公共服務企業集團 (PEG) 2026 年第三季財報電話會議：營運每股盈餘 1.15 美元，重申財測指引

重點總覽

• 公共服務企業集團 (PSEG) 公布 2026 年第三季每股淨利為 0.76 美元，低於去年同期的 1.24 美元；而非 GAAP 營運獲利則自每股 1.13 美元增至 1.15 美元。
• PSEG 重申 2026 全年非 GAAP 營運獲利指引為每股 4.28 美元至 4.40 美元。管理層表示，營運結果仍符合靠近中位數的預估。
• 該公司亦重申截至 2030 年的長期營運獲利成長展望為 6% 至 8%，此目標獲得受監管資本計畫及預期 6% 至 7.5% 的費率基礎年複合成長率 (CAGR) 所支撐。
• PSE&G 在本季投資約 11 億美元，並持續朝 2026 年約 42 億美元的受監管資本投資目標邁進。截至 2030 年的五年計畫金額仍維持在 225 億至 255 億美元。
• PSEG Power & Other 的非 GAAP 營運獲利為 6,800 萬美元，高於前一年同期的 5,000 萬美元，主因發電與容量價格上升、天然氣營運改善以及核電停機成本降低。
• 核能機組在本季發電 8.2 太瓦時 (TWh)，容量因素達 95.5%。管理層持續積極尋求涉及現有核能發電量、容量升級及大負載客戶的合約。

核心財務數據

2026 年前九個月，PSEG 錄得每股淨利 2.91 美元，每股非 GAAP 營運獲利為 3.56 美元。

業務與營運表現

受投資增加帶動，PSE&G 的輸電利潤年增每股 0.02 美元。配電利潤每股增加 0.03 美元，主要反映配電與能源效率投資以及客戶成長。

這些成長被資本投資帶來的折舊與利息費用增加、新增債務以及以較高長期利率進行再融資所抵銷。稅務與其他項目使單季獲利淨減少每股 0.04 美元，主因稅務時間差。

過去 12 個月住宅用電客戶數成長約 1%，用氣客戶數則持平。節能獎勵計畫 (Conservation Incentive Program) 將天氣與經濟因素造成的銷售差異與大部分配電利潤解耦。

PSE&G 的五年受監管資本計畫仍專注於基礎設施現代化、能源效率、電氣化與負載成長。管理層表示，資產負債表足以資助該計畫，無需增資發行新股或出售資產。

PSEG Power & Other 的淨能源利潤每股增加 0.04 美元。較高的發電與容量價格以及天然氣營運成長，被缺乏 PSEG Long Island 燃料與能源管理費所部分抵銷。營運與維護成本 (O&M) 每股改善 0.02 美元，受益於去年同期 Hope Creek 大修停機與燃料週期延長工程的影響消除。

核能機組在 2026 年前九個月發電 23.9 TWh，容量因素為 94.3%。Salem 1 號機組在連續運轉 491 天後，進入秋季裝填燃料大修。

PSEG Power 在 PJM 於 2026 年 7 月舉行的基本殘餘拍賣中，以每 MW-天 325 美元的價格，投標成功約 3,600 MW 的現有容量，交付年份為 2028 年 6 月至 2029 年 5 月。

管理層指引

PSEG 重申 2026 年非 GAAP 營運獲利指引為每股 4.28 至 4.40 美元。管理層並未縮小該區間，並表示投資人應繼續考慮靠近中位數的結果。

公司亦重申截至 2030 年的營運獲利成長展望為 6% 至 8%。該展望獲得 225 億至 255 億美元受監管資本計畫以及預期 6% 至 7.5% 的費率基礎年複合成長率 (CAGR) 所支撐。

管理層計畫在 2027 年 2 月的 2026 年終法說會上，提供 2027 年非 GAAP 營運獲利指引，滾動更新資本計畫，並更新費率基礎與長期獲利成長展望。

管理層指出的潛在利多機會包括核能合約談判、競爭性輸電專案，以及連接太陽能與電池儲能資源所需的新增公用事業基礎設施。Salem 核能機組容量提升已包含在目前的五年計畫中。

風險與關注領域

PSEG 核能機組實現的電力價格較接近 PECO 區域而非 PJM 西部樞紐 (PJM Western Hub)。管理層表示，歷史上約 20% 的折價最近擴大至約 30%，儘管公司的避險部位限制了近期曝險。

截至 9 月 30 日，PSEG Power 已遠期售出約 70 TWh 的預期發電量。公司 2026 年的避險比例超過 95%，2027 年的產量亦有高比例預售，而 2028 年及以後的避險產量則較少。

管理層預計其 2027 年實現的核能發電價值將維持在獲得隨通膨調整之核能生產稅收抵減 (PTC) 的門檻之上。鑑於供需及遠期電價的不確定性，管理層拒絕預測 2028 年的結果。

PJM 資源充足性仍是核心問題。FERC 於 9 月做出的決定預計將使可靠性後備採購拍賣延後至 2027 年 3 月或更晚。管理層亦強調了未來 PJM 容量市場結構以及新發電設施上線速度的不確定性。

其他不確定領域包括紐澤西州對受監管公用事業擁有太陽能與儲能資產的政策、當地對資料中心的審批狀況、PSE&G 計劃提交之監管申請案的結構，以及新核能開發的時間點。

分析師問答重點

電力避險與基差曝險：管理層強調，PSEG 機組的結算價接近 PECO 區域，而非 PJM 西部樞紐。公司透過直接避險、財務輸電權 (FTR)、換匯與選擇權，使避險部位更接近機組的實際實現價格。

核能合約談判：PSEG 表示與大負載客戶的討論依然積極且正在推進，但尚無協議可公布。潛在方案可能涵蓋現有核能發電量、未來容量提升及其他發電機會。任何合約都將納入公司更廣泛的避險部位中。

監管遞延效應：PSE&G 預計向紐澤西州公用事業委員會 (BPU) 提交提案，解決自上次配電費率審查以來資本投資的監管遞延問題。管理層表示該提案旨在配合州長的負擔能力議程，以及儘可能長期維持費率穩定的目標，但未透露具體結構細節。

輸電業務機會：管理層預期 PJM 定價差異與區域電網需求將帶來額外的輸電機會。該公司相信即將開放的輸電申請窗口可能比上次流程提供更多機會。

大負載管道：管理層表示，PSE&G 收到的大負載諮詢量仍維持在先前討論的約 11.8 GW 左右。目前的興趣比以往更偏向邊緣運算專案，而非超大規模資料中心。

新核能項目：PSEG 認為其 Salem 郡場址、早期場址許可 (ESP)、PJM 地理位置及鄰近港口等條件均為戰略優勢。管理層表示，紐澤西州的第一個重大里程碑將是 BPU 就新核能舉辦的拍賣，同時指出核能開發仍是一個複雜且涉及多方的過程。

完整法說會逐字稿

---

完整財報電話會議逐字稿

管理層陳述

Operator

Ladies and gentlemen, thank you for standing by. My name is Shamali, and I am your event operator today. I would like to welcome everyone to today's conference Public Service Enterprise Group's Third Quarter 2026 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded today, November 2, 2026, and will be available for replay as an audio webcast on the SEC's Investor Relations website at investor.pseg.com.

I would now like to turn the conference over to Carlotta Chan. Please go ahead.

Carlotta Chan

Good morning and welcome to PSEG's Third Quarter 2026 Earnings Presentation. On today's call, are Ralph LaRossa, Chair President and CEO; and Dan Cregg, Executive Vice President and CFO. The press release attached and slides for today's discussion are posted on our IR website at investor.pseg.com, and our 10-Q will be filed later today.

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 loss, as reported in accordance with generally accepted accounting principles or 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 our prepared remarks, we will conduct a 30-minute question-and-answer session.

I will now turn the call over to Ralph LaRossa.

Ralph LaRossa

Thank you, Carlotta, and thank you for joining us to review PSEG's results for the third quarter of 2026. Starting with our financials. PSEG reported net income of $0.76 per share and non-GAAP operating earnings of $1.15 per share for the third quarter. Bringing our results for the first 9 months of 2026 to $2.91 per share of net income and $3.56 per share of non-GAAP operating earnings. PSEG continues to achieve solid operational and financial results, enabling us to deliver reliable utility service and generate the carbon-free base flow generation our customers expect.

Our financial results for the third quarter and year-to-date period aligned with our expectations for the full year and we are reaffirming PSEG's guidance for 2026 non-GAAP operating earnings in the range of $4.28 to $4.40 per share. Continued investments in PSE&G's energy efficiency programs and transmission were the main contributors of growth in utility margin and were offset by higher depreciation and interest costs as well as the timing of taxes. In the PSEG Power and Other, the absence of last fall's Hope Creek refueling outage resulted in lower O&M, which combined with an increase in realized market prices, higher nuclear generation and gas operations drove the improvement in PSEG's Power's results.

Turning to our third quarter operations. PSE&G faced severe weather throughout the third quarter, which highlighted our best-in-class storm response, our commitment to service excellence and the customer value of our investments in resilience, reliability and the modernization of our electric and gas systems. Nor'easter hit our service territory in September, bringing severe wind gust and heavy rain and affected approximately 70,000 PSE&G electric customers. The widespread treat damage and challenging conditions nearly all affected customers are efficiently restored within 24 hours. Our gas operations also remained stable throughout this multi-day event with no storm-related customer outages.

I'm also pleased to report that PSEG Long Island is on track for its most reliable year on record as life has started the operating service management model and customer satisfactory metrics are all continuing to move in the right direction. Back in New Jersey, PSE&G filed its Clean Energy Future EE 2.5 proposal in late September in response to the BPU's recently adopted framework for a 1-year extension of the EE2 triennium. Our filing highlights the success and efficacy of our EE programs, which generate over $1 billion in annual customer savings, having helped nearly 525,000 residential and business customers save energy and lower utility bills since the program began in October of 2020. PSE&G's EE investments have also supported approximately 9,300 jobs stay wide over the past 6 years, and we continue to expand the use of union labor in these EE roles.

And an update on some good news for customers is that PJM has prospectively reduced wholesale transmission rates for PSE&G customers. This was due to our collaboration with the state, which resulted in a FERC ruling earlier this year on transmission cost allocation, favorable to our customers. and we expect to file in early '27 to credit the dollars back to those retail customers. Also on a state level, we note several constructive regulatory actions the BPU has taken over the past quarter that include: one, the BPU's approval of our gas filing to lower residential gas bills by 5%, effective October 1, 2026; second was the approval of our GSMP 2 extension petition to recover investments made through May of 2026, which was also effective on October 1; third was the approval of our clean energy future electric vehicle recoveries for investments made through year-end 2025; and fourth was the approval of our infrastructure advancement program or IAP, request to recover the remaining investments through the year-end 2025. For these last 2 items, a reduction in another funding was used to offset the bill impacts of these recoveries.

During our second quarter call, we mentioned that PSE&G was planning to file for updated base rates by year-end 2026. Over the past several months, we have worked constructively with the Cheryl administration to out meet the goals of the 2 executive orders issued earlier this year. In line with the spirit of those executive orders and the governor's affordability agenda, we anticipate filing a proposal with the New Jersey BPU to address the regulatory lag of capital investments made since our lab distribution rate case. We look forward to providing you with more detail shortly. Also at the BPU, the ongoing study on modernizing New Jersey's electric utility business model has progressed to its second phase, and we are actively participating in the Board's stakeholder proceedings.

This initiative is focusing on cost discipline, financing modernization, targeted incentives and shared savings and staged performance-based rate making. We believe these and other options mentioned in the Phase I report, including multiyear rate plans, performance-based rates, performance incentive metrics, earnings sharing mechanisms, decoupling and shared saving mechanisms offer constructive paths to strengthen the connection between customer value, cost accountability and timely recovery of prudent investment.

Now turning to PSEG Power. At PSEG Nuclear, we supplied the regional grid with 8.2 terawatt hours of reliable, carbon-free baseload energy during the third quarter, operating at a capacity factor of 95.5%. Salem Unit 1 recently entered its fall refueling following a 491-day breaker-to-breaker run matching Salem Unit 2's back-to-back breaker-to-breaker run posted earlier this year. PSEG Power continues to generate stable cash flows that help fund our regulated investments while pursuing high-value regional growth opportunities. Turning briefly to our regional power market. PJM continues to have a significant resource adequacy problem and will require both existing and new generation to meet ever-increasing electric demand in the region. We are following the activity of FERC and PJM regarding PJM's reliability backstop procurement and interim resource adequacy service filings. And considering how these developments interplay with our nuclear contracting efforts.

In September, FERC in accepted certain aspects of the RPP but rejected others, resulting in an anticipated delay of the RPP auction to March 2027 or later. The FERC order did not disturb the bilateral matchmaking process to match new generation with new large lower covers, which has presented opportunities for us. FERC's rejection of PJM's IRAS filing reinforces that the focus has shifted to the states to address retail curtailment and cost issues associated with large load customers, and we look forward to continuing to work with New Jersey as it implements these rules. PSEG Power is continuing to develop terms with large load entities for contracting arrangements involving the existing nuclear production future nuclear upgrades and other generation opportunities. Similar to recently announced power purchase agreements in the PJM region and specifically in New Jersey, which we believe can produce tangible benefits for PSEG, supply certainty for large loads and create economic development opportunities for our state and the regional economy.

In early October, PSEG Nuclear participated in the first meeting of the Governor's Nuclear Task Force, which outlined the initial work plans to establish the process for evaluating new nuclear development in the state. We continue to support and enable development at our site in Salem County. We are reaffirming both our full year 2026 non-GAAP operating earnings guidance and PSEG's 5-year growth outlook of 6% to 8% through 2030. In summary, our teams continue to execute our business plan. We are delivering solid results and customer value, and we are making steady progress on the regulatory front.

I'll now turn the call over to Dan, who will review the financial results, and then I'll rejoin the call for the Q&A session.

Daniel Cregg

Thank you, Ralph, and good morning, everybody. PSEG recorded net income of $0.76 per share for the third quarter of 2026 compared to $1.24 per share in 2025 and non-GAAP operating earnings were $1.15 per share in the third quarter of 2026 compared to $1.13 per share in 2025. These quarterly results bring our year-to-date 2026 net income to $2.91 per share and non-GAAP operating earnings to $3.56 per share. We've provided you with information on Slide 7 and 9 regarding the contribution to net income and non-GAAP operating earnings by business for the third quarter and 9 months ended September 30, 2026.

Slides 8 and 10 contain waterfall charts that take you through the net changes for the quarter and year-to-date periods over the prior year and non-GAAP operating earnings per share also that major business. Starting with PSE&G, which reported third quarter net income and non-GAAP operating earnings of $506 million for 2 compared to $515 million in 2025. [indiscernible] quarter-over-quarter report transmission margin increased by $0.02 per share, driven by higher investments. Our distribution margin increased by $0.03 per share compared to the year ago period, especially reflecting higher investments in distribution and energy efficiency and an increase in the number of [indiscernible].

On the expense side, distribution per share compared to the third quarter of 2025. Depreciation and interest each rose by $0.01 per share due to ongoing capital investments incremental debt and the replacement of maturing debt at higher long-term interest rates. Taxes and other had a net unfavorable impact of $0.04 per share, driven mostly by the timing of taxes which is recorded through an annual effective tax rate and that's to 0 over a full year. Weather conditions during the third quarter, as measured by the temperature humidity index, we're 3% cooler than normal, was 2% warmer than the third quarter of 2025.

As a reminder, the conservation incentive program, or SIP mechanism decouples weather and other economic sales variances from a significant portion of our distribution margin, while helping PSE&G promote a widespread adoption energy conservation, including energy efficiency and solar program. Under the SIP, it's the number of elect in gas customers that drives margin and residential customer growth for electric was about 1%, and gas was flat over the past 12 months. The SIP also benefits customers as higher revenues from last year's warmer-than-normal summer weather will continue to be refunded to electric customers. And this past October 1, PSE&G implemented a 5% decrease for residential gas customers, driven by higher revenues from a colder-than-normal winter in early 2026.

On the capital front, PSE&G invested approximately $1.1 billion during the third quarter, and we are on track to execute our full year 2026 regulated capital investment plan of approximately $4.2 billion, focused on continued investments in infrastructure modernization, like the third phase of our Gas System Modernization Program, energy efficiency, electrification initiatives and load growth. We are also maintaining our 5-year regulated capital investment plan of $22.5 billion to $25.5 billion through 2030. For our customers, the value of these investments means fewer interruptions, faster restoration times and more tools to manage their energy use. During the third quarter, the BPU approved an annual revenue increase of $14 million for investments under our infrastructure advancement program. and approved an annual increase of $8 million for investments under our Clean Energy Future electric vehicles program. Both rollings took effect on October 1.

Moving on now to PSEG Power & Other. For the third quarter, PSEG Power & Other reported a net loss of $130 million in 2026 compared to net income of $107 million in 2025 and non-GAAP operating earnings were $68 million in the third quarter of 2026 compared to $50 million in the third quarter of 2025. Referring to the waterfall on Slide 8. For the third quarter of 2026 versus 2025, net energy margin rose by $0.04 per share, driven by higher generation and capacity prices and gas operations, partly offset by the absence of PSEG Long Island's fuel and energy management fees. O&M declined by $0.02 per share from the year earlier quarter, benefiting from the absence of last fall's refueling and fuel cycle extension work at our 100% owned Hope Creek Nuclear event. Depreciation and interest expense were both flat and taxes and other items had a net unfavorable impact of $0.02 per share in the third quarter compared to 2025.

On the operating side, the nuclear fleet produced approximately 8.2 terawatt hours during the third quarter and reached 23.9 terawatt hours for the 9 months ended September 30. Capacity factors for the nuclear fleet were 95.5% and 94.3% for the same quarter and 9-month periods, respectively. We previously noted that PSEG Power cleared approximately 3,600 megawatts of existing capacity in PJM's July 2026 base residual auction at $325 per megawatt day for the energy year beginning June 2028 through May of 2029. As you know, the existing price collar of $175 to $325 per megawatt day, will continue in effect for this December's capacity auction covering the 2029, 2030 energy year. As we have stated in the past, our realized energy price for our 5-unit nuclear fleet is historically aligned with PECO zone and has traded at about a 20% discount to the more liquid PJM Western hub. Recently, the basis differential between these 2 hubs has widened to add a 30% discount, but our hedge position has limited at-term exposure to this pricing improvement. As of September 30, PSEG Power had approximately 70 terawatt hours of expected generation output sold forward. We have previously mentioned that we were more than 95% hedged from 2026 and have a high percentage of output sold forward for and less than 2028 and beyond.

On the nuclear PTC front, similar to 2026, we expect that our current portfolio position for 2027 will result in the realized value of our nuclear generation output being above the level at which we would receive the nuclear production tax credit, which, as you know, is adjusted annually for inflation. Touching on some recent financing activity. PSEG had strong available liquidity totaling $3.9 billion as of the end of September. This includes over $830 million of cash on hand, primarily related to net PSE&G financing activity during the quarter. On the fencing front this past August, PSE&G issued $1 billion of secured medium-term notes comprised of $650 million of 10-year notes at a rate of 5.4% and $350 million of 30-year notes at 6.05%. A portion of the proceeds was used to redeem $425 million of 2.25% secured MTNs at maturity in September with the balance used to provide cash on hand to support our capital spending plan.

And also in September, PSEG Power issued $400 million of 5-year senior notes at a live 5.55%. PSEG's level of variable rate debt represented approximately 3% of our total debt as of the end of September. Our variable rate debt consisted of the unhedged portion, about $250 million of the $500 million 364-day term loan at PSEG Power maturing in December 2026 and commercial paper. Looking ahead, our solid balance sheet supports the execution of PSEG's predominantly regulated 5-year capital spending plan without the need to issue new equity or sell assets and provides the opportunity for consistent and sustainable dividend growth.

In closing, we delivered solid operating and financial performance in the third quarter and year-to-date period, enabling us to maintain PSEG's full year 2026 non-GAAP operating earnings guidance of $4.28 to $4.40 per share [Technical Difficulty] earnings through 2030 based on our confidence in executing our 5-year regulated capital investment plan, that also supports a 6% to 7.5% rate base CAGR over the same period. We continue to pursue nuclear revenue opportunities and believe recently announced agreements combining capacity upgrades with existing generating output, provide wins for all parties, including the economic development interests of our region. And other opportunities such as competitive transmission projects and incremental utility infrastructure projects, including system investments to connect solar and battery storage resources to the grid to meet new demand. Also provide upside to our current growth outlook through 2030. Finally, we expect to introduce PSEG's 2027 non-GAAP operating earnings guidance roll forward our capital investment plan, update our rate base and long-term earnings CAGRs and discuss this outlook all during our 2026 year-end call in February of 2027.

That concludes our formal remarks, and we are now ready to begin the question-and-answer session.

Operator

[Operator Instructions] The first question comes from the line of Shahriar Pourreza with Wells Fargo.

分析師問答

Shahriar Pourreza

Excellent, excellent. Just on Ralph on the head strategy for Power as we're thinking about kind of the risks emerging. It sounds like the impact is more modest than people gave a credit for. I guess are you assuming it normalizes in a couple of years, what instruments you're using, is it FTRs? And just any way to quantify what proportion of the forward sold power could be impacted from basis changes maybe on an annual basis?

Ralph LaRossa

Yes. Well, I'm going to let Dan give you a little more detail. Let me just give you a high level on the whole thing, and there was a ton in your questionnaire. So we haven't been given a lot on the hedge details. But just think about it this way, Sean, the entire PJM grid has the prices have gone up, right? And so I think we have been saying for many years to take a look at the price at the PECO hub. And so the PECO has gone up and has gone off as quickly as the West Hub has gone up. So the -- where we hedge has gone up, maybe not as much as some folks have been thinking for our power business, but that is where we hedge, and that is what we've been articulated for quite some time. The basis differential between the 2 shows up if you don't -- if you're not covered in both places, and I'll let Dan take a little more detail for you from there. .

Daniel Cregg

Yes. Shahriar, so especially as you look at this year and into next year, we have a very balanced hedge position given the ability to move things to PECO. I think that the other thing to put things in context, if you think about -- what we had said for a long time was that we were hedging on a fairly strict ratable approach. When the PTC came in, we described that as a put option that we had, and it essentially had us thinking more about the overall position of stepping a little bit away from the pure ratable approach. And I think that, that same thinking goes into where we are now and how we have approached it. We're taking a look at what the market is as we're moving into our hedges. And with respect to products, I think, which is another part of your question, you've got the ability to put on direct hedges where we are at that PECO zone as well as FTRs but also some swaps and some options. And so, there's a host of products that we utilize to try to manage the overall position. And ultimately, we will get paid at that PECO hub.

Shahriar Pourreza

Got it. Okay. That's perfect. And then just lastly, on the recent PJM deals, I mean, obviously, it seems like the scarcity value for nuclear electrons is getting higher even though the last deal didn't come with clean energy attributes. Maybe just elaborating on your prepared, just updated thoughts on Pennsylvania or New Jersey contract potential? And is it even possible to do a deal in New Jersey with the optics there?

Ralph LaRossa

Yes. I think you've seen a deal recently that talked about New Jersey to some degree. I think the last Constellation deal talked about some of the upgrades that are at -- going on at our Salem plant, and we've been enabling, and I think that you saw that the governor applauded that as a way to bring the tech companies to the table to pick up their fair share of some of the costs that are being incurred in the grid and in the energy market as a whole. So I think there's possibility to do things, certainly, with that incremental power that you're seeing at that location. I think the question about how much we're going to see data centers showing up here in New Jersey remains an open item.

We've talked about that for quite some time. And even I think this the selection season, we have some municipalities that are voting on it at that level because the governor has said she's leaving many of the decisions up to the local municipalities to decide as far as whether or not they want to embrace the data center industry or not. And I think our plan is a good one and is kind of putting that at the place where folks have to make that decision and deal with the data centers directly. So I think there's a possibility, but I'm not -- and I don't know, Dan, do you want to give a little more color on progress in that area.

Daniel Cregg

I think, Shahriar, just the way to think about it is that there remains some strong interest. I think these things don't happen overnight, but you have started to see some incremental deals get done. I think Ralph take on it from a New Jersey perspective is spot on. I think there was an appreciation and an acknowledgment for what that was. And so conversations continue and advance. And I think we feel pretty good about where they are, but what I'm anything to announce right now.

Operator

Our question comes from the line of Richard Sunderland with Truist Securities.

Richard Sunderland

Ralph, I wanted to pick up some of the language around your upcoming PSE&G filing. Is that sort of a shift away from a full rate case as you sort of spoke to on 2Q. And is this focused on rate changes or more of accounting efforts around how that lag has built into the business since the last great changes? Any sort of bigger picture on that would be helpful.

Ralph LaRossa

Yes, Rich, I would try to keep it at a very high level now because we -- and I appreciate the question as we articulated on the call. look, we're looking for a solution that supports the governor's initiative. We have, for the last -- we talked about ad nauseam on these calls and then other interactions about how we're aligned with the state's policy and that goes back 2, 3, 4 administrations here. We've always been successful in doing that. And we think that there might be an opportunity here in a filing to do just that, stay aligned and still address the regulatory lag that exists. So we expect that we'll be making a filing. That's what I said in the prepared remarks. And as soon as we make that filing, we will communicate the details of that to you. But it's all about staying aligned and enabling the governor's policy. .

Richard Sunderland

Okay. Okay. Understood. I guess maybe the bigger picture and the DTE Phase 2 efforts, anything out of there that's informing how you're viewing the potential around this filing or anything you can speak to around just kind of the overall backdrop in the state and how that's informing your strategy around this filing and presumably others thereafter?

Ralph LaRossa

Yes. I think, look, the timing of all of those recommendations that will come out -- I think it's E3 is the consultant that's been working on that with the BPU that will come out and be made. I think if we were to make a filing could be aligning -- continuing the alignment from our standpoint with level setting our rates as the state rolls out new regulatory policies, but I think if you take a hard look at what's there and what E3 has been talking about, these are things that the governor has said in the past and things that the companies have said in the past here in New Jersey. So we continue to look forward to that. We continue to participate in those proceedings. But I don't -- I think our filing that we're doing here is all about staying aligned with the governor's goal is to keep rates flat for as long as possible, and we'll see what we can do to be a line there.

Operator

Our next question comes from the line of Matt Petit with Barclays.

Nicholas Campanella

It's Nick Campanella on for Matt. Maybe we should follow up there on the basis. You said that you're going to be above PTC level in '27 still despite the widening basis? Maybe just to confirm that? And then how do you see that case playing out for '28?

Daniel Cregg

Yes. So we have said that, and that is the case to confirm your question is confirmatory to what we said. And I think, look, we can look to the forwards for where markets are right now. I think we've got over a year before we start to get into 2028, I'm not going to predict where markets are going to go. I think what we look for more fundamentally is what the supply-demand balance is. And then continuing to watch what's coming online, both from a generation and a demand standpoint is ultimately what's going to drive that. But I think what we've seen is increasing announcements about demand more so than what generation is coming on and generation continues to be a little bit of a struggle to see stuff coming on quickly other than maybe some solar and storage. So I think you're probably going to continue to see some upward pressure, but that will manifest itself in the forward as we go forward.

Nicholas Campanella

Great. And then a lot of moving pieces as we kind of get ready for your next full 4-year or fourth quarter update. When we kind of take into account, it seems like you can absorb the basis and you're also maybe getting kind of a true-up and lag at the utility, but I guess we'll see what the filing looks like. Just how do you kind of frame the 6% to 8%, '27 and beyond? Can you be outside of the range in any given year? Or do you still see yourself kind of growing inside of that range? Any comments there would be helpful.

Ralph LaRossa

Yes. Nick, I cannot emphasize enough the reaffirmation that we've made of our 6% to 8% growth rate and take a lot of time and a lot of pride in going through that. we stand by it, and that's where we think we're going to be. So that's why we came out and reaffirmed.

Operator

Our next question comes from the line of Nick Amasuchi with Evercore ISI.

Nicholas Amicucci

I just wanted to -- kind of following up on Nick's previous question, too. Just as we kind of think about the roll forward and kind of as we think about the next capital update, I guess what are kind of the -- what are the near-term items that we could kind of see creep into that. If we think about like competitive transmission wins, potentially the nuclear contracting, obviously, that that's pretty fluid. But -- or we think about is it going to be more solar and storage type of deals?

Ralph LaRossa

Yes. Nick, we've been -- I don't think things have changed all that much for us from a projection standpoint, of what we've been talking about for the last few quarters. I think we have that opportunity as the policies continue to ripen here in New Jersey for us to do more on the solar and support for solar and batteries through or enabling the grid readiness. There's some real focus on VPP. The virtual power plants here in New Jersey would be a small opportunities set for the utilities, but we're all going to participate in that. Some of it will be IT activities and so on to enable it. I think you will see some additional transmission continuing to being built in the PJM region. Everyone talks about this basis differential between the West and many of the other hubs here at PJM. It's not just PECO that, that differential existed. .

And I think that, that's going to create opportunities as well through different ways that PJM comes up with its plans, whether it's market-driven solutions or what they normally do in the RTEP process. So I think you're going to see more of that. I don't want to front run what that is. We'll see what PJM comes out with, and we have been a participant in a successful participant in some of those proceedings in the past, and that's that Maryland project that we have ongoing. So it's more of the same for us, but continued clarity in our line of sight.

Nicholas Amicucci

Right. That makes sense. Then if I could just follow up somewhat of a cleanup item. I just want to make sure I understand it. The Salem up rates under development. Is there any of that earnings contribution within the current outlook? Or is that something that's going to be longer dated?

Daniel Cregg

Yes, that's within our 5-year plan, Nick. So that will be on by the time we get to the end of our 5-year period.

Operator

Our next question comes from the line of Carly Davenport with Goldman Sachs.

Carly Davenport

Maybe just wanted to get your views on PJM's sort of latest response to the FERC on the RBP last week. You've mentioned you've submitted some projects into the RBP process. So just curious if you could expand a little bit on how you're thinking about that process versus perhaps pursuing opportunities just in the bilateral market.

Daniel Cregg

Well, I think it's really both, Carly. I think that I still think that the effort that's been put forth has been helpful to try to make something happen. I think it has been a little bit bumpy with the back and forth with FERC. And I think that's understandable. But I think what it probably has done more than anything else is just broaden the opportunity set to try to get some generation built for all this low that we're seeing projected to come online as we step through the next number of years. And so they've gone back and forth with FERC, and I think there's been a little bit of a frustration from timing and from where things have landed that it's a little bit of a duo. But net-net, I still alone the concept to try to get some generation built because we're going to need it. And I think it has -- if nothing else, it has expanded the potential for some bilateral deals as well.

Carly Davenport

Got it. Okay. Great. That's helpful. And then you highlighted some of the financing activity during the quarter. I guess just with the move in interest rates and the capital plan needs. How should we be thinking about the impacts to perhaps '27 guidance or any earnings sensitivities with the move that we've recently seen in rates?

Ralph LaRossa

Just I think Dan and his team continue to do a great job of managing that. We're through most of the '26 financing that we needed. And I think we're in fine shape as we move into '27. If you look forward to '27, it's -- our activity will not be at the same level it was at in '26.

Daniel Cregg

And we do look for opportunities to hedge into next year, Carly, I think that we're all facing a little bit of an increasing interest rate environment. We've got the regulatory construct that helps with some of that, especially given the magnitude of our transition business. And so we're through our '26 plan, and we'll move into the '27 plan in that environment, but with a little bit of an eye towards what's going on in '27 that we're looking to right now in 2026.

Operator

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

David Arcaro

I was wondering how you're thinking about solar and storage investments from a regulated utility perspective, utility-owned investments in that area.

Ralph LaRossa

Yes, David, we would love to. We have in the past just to refresh everyone's memory, we had our solar for all program that we had here in New Jersey for quite some time that was focused mainly on some of the landfill opportunities that existed, and we executed on that, and those plants are still in and running. You all know about some of the work that we did put some solar on poles here. We've done that in the past. And on the battery front, we were the first utility put in a filing over 5 years ago now on that front. And so we continue to look for those opportunities. I think the policy is not yet certain here in New Jersey as to whether or not it will move in a regulated direction or stay solely competitive. And so we're monitoring it, and we're going to participate. We have the knowledge and the skills here to do that. But we don't want to front run the policy of the state. We want to align with that state policy. So as that becomes clearer, we will participate, but we will do so in a wait is wanted by the state of New Jersey.

David Arcaro

Yes. Got it. Understood. That's helpful. And then I was just wondering, you mentioned just thinking through how to address regulatory lag. I was wondering what types of proposals might you be supportive of or considering as you think about going forward now if it's something besides trackers, how you manage or propose new structures around regulatory lag?

Ralph LaRossa

Yes, David, again, I don't want to front run some of the discussions that were happening. It's all constructive. And again, it's all aligned with trying to keep rates flat, but stay tuned, and we will communicate as quickly as we possibly can. .

Operator

Our next question comes from the line of Michael Sullivan with Wolfe Research.

Michael Sullivan

I wanted to ask on your thoughts on the future of the capacity auction in PJM and where you think that's going? And then just as you get ready for this roll forward, how you come up with assumptions for 2031, given we're going to be on kind of the current construct out there?

Ralph LaRossa

Yes, Michael, that crystal ball is sometimes it gets clear and sometimes it gets a little cloudier. Last week, New Jersey had a pretty big conversation about energy here that was hosted by the New Jersey business and industry association. And at that conference and discussion, PJM was represented, and they talked a lot, and there are some good press that was written up about it that discussed where PJM really wants to be the residual auction. They reinforced that they're looking for the states to pick up the capacity issues and deal with what they need to from a generation standpoint in the states.

So I think you've got to triangulate so many different things here. You've got to triangulate conversations like that. You got to triangulate the RBA that Dan was talking about before, the bilateral contracts that you see taking place some of the mandates in individual states to bring your own generation if you're going to build certain size load in those states, some of that here, some of that in other places. And I can't give you a specific answer on what's going to -- where we're going to be sitting in 2031, but I know what we're doing, and that's continuing to look at all of those inputs and trying to come up with the best way that we can participate and be part of that growth opportunity.

Michael Sullivan

Okay. Great. And then I think there's another annual PJM open window coming up here. Maybe if you could just give us a sense of your expectations there for the opportunity set.

Ralph LaRossa

You're talking about the transmission open window, right?

Michael Sullivan

Exactly.

Ralph LaRossa

Yes. So look, I alluded to that a little bit earlier. I think that these basis conversations that we're talking about. And again, it's not just PECO to the west. It's many of the other hubs as well will create opportunities for RTEP type solutions in that open window. So we'll see we monitor. I think it will be more war -- if our crystal ball on that is right, there will be more opportunities than there was in the most recent open window.

Operator

Our next question comes from the line of Jeremy Tonet with JPMorgan.

Unknown Analyst

This is actually Adam Kelly on for Jeremy. Just one like small question on my end. Could you provide any update on PSE&G's large load inquiries? Any thoughts or color on where the total count stands at this point in time, which in the past was probably around 11.8 gigawatts as of December '25. Can you kind of still see that as the same level or any kind of shift in inventories to date?

Ralph LaRossa

We've been saying at about that level. I don't have the number right in front of me, but we've been staying at about that level. And I think that what we're seeing continues to be what many people refer to as edge computing opportunities. rather than the large mega data centers that are at a hyperscaler types. So that's consistent with some of the financial industries that are supported here in New Jersey.

Operator

Our next question comes from the line of Julien Dumoulin-Smith with Jefferies.

Julien Dumoulin-Smith

So look, I wanted to follow up, less so in the spirit of long term, but just in the near term, what about tightening the guidance range here, guys? Anything that you're seeing in the near term that's driving some ambiguities. As I hear you guys talk about hedging, that's not a '26 dynamic. As I hear you talk about rates, it's a longer-dated, but look, is there anything on the regulatory front that's sort of impeding? I know your typical cadence. And again, you talk about like setting a record or a trend here. That's why I'm asking, if you will.

Daniel Cregg

No. Julien, I don't -- I wouldn't read too much in. I mean, we reaffirmed where we are. We haven't kind of pushed you higher or lower, you should still be thinking somewhere around the midpoint of where we are -- we just kind of left it where it is from -- because it's been consistent with us executing against the entire year.

Julien Dumoulin-Smith

All right. We'll always nitpick, if we can. And then if I can, zeroing. With that said, look, how do you think about '27 here? And so Nick zeroed in on it. I'm going to double down on it a little bit. How do you think about where you're hedged on '27 versus '26? And again, I know it's commercially sensitive to a certain point, but PTC for, okay, that's a given. How do you think about where you're hedged on '26? And is it an uptick here at pricing? Because I get that there's a question of like where and when you hedge that is important to consider here. And again, maybe the same is relevant for '28 here, too, but really even on '27. How do you think about just what you've had? I imagine a lot of it is established at this point. Is it -- is there a net increase just given the overarching trend from the last 3 years and given the ratable hedging program?

Ralph LaRossa

And then just to be clear on one thing that Julien the net increase in the hedging is that what you're asking?

Julien Dumoulin-Smith

Well, a net increase in hedge value, i.e., the dollar per megawatt hour rate that you're getting, right? Or is there some other offset because of how and where you -- more where are you hedged where basis could be an offset to that? I just want to make sure I'm hearing you clearly because otherwise, you would think that the multiyear trend we've seen regardless of the basis may very well provide an uptick in overall realized price. But tell me how you put that again? Because I get PTC floors kind of a baseline statement without giving too much specificity here.

Ralph LaRossa

Right. Look, I'll try to give Dan a little bit of air cover here for 30 seconds and he can add some more if he'd like. But [indiscernible] that. At the end of the day, I think, Julien, what we were alluding to there in many of these conversations, and you just hit on it, is where are you assuming the hedge is taken is made and where is it being executed at. And if folks are assuming it's all at the West, they may have a different value as you asked in the hedge value going higher versus somebody who is thinking it was going to be at PECO. And so we've been reinforcing with folks that our hedge has been executed in the past and is currently, as we've talked about at nauseam here is that PECO. So we -- it has -- everything has gone up, but PECO has not gone up as much as the West.

Daniel Cregg

Yes. I think, Julien, we've seen some people kind of jump on to Western price increasing and that for where we're necessarily going to be and our units are priced at PECO and not out there. But we also have taken care to ensure that we are putting on positions that are closer to where our price is actually going to land. And so I kind of -- I don't want to give partial guidance to the guidance we haven't given yet, which is kind of where your question goes to -- but I think that we're in a pretty good spot related to what prices look like against the backdrop of the movement that you've seen over the year. I'll kind of leave it at that.

Ralph LaRossa

Again, Julien, we're trying to be respectful of the question but not go into details when we haven't provided.

Operator

Our next question comes from the line -- our next question comes from the line of Steve D'Ambrisi with RBC Capital Markets.

Stephen D’Ambrisi

Just a quick one on new nuclear. I think you guys have been very clear about your appetite for new nuclear, but as a large operator and the holder of the early site permit, can you just talk about how those conversations are progressing in the U.S. maybe like a quarter or 2 ago, it felt like there's a lot more focus on this, and it seems like it's quieted down a little bit, and there's more of a focus even from the administration on up rates. Just interested to hear kind of what's going on behind the scenes.

Ralph LaRossa

Yes. Look, I think, again, alignment with our governor is all about enabling new nuclear here. She has been very vocal about the fact that she sees that as a long-term solution. for the state and beyond the nuclear industry that is. So we've been participating where we can. And again, we think our site based upon location based upon the early site permit. And when I say location, not just where it sits within PJM, but where it also sits as far as access to ports and ability to move large pieces of equipment easily gives us a real advantage. And so we are out advocating as strongly as we can with those conversations that you're alluding to and within those conversations that you're alluding to.

Stephen D’Ambrisi

Any real visible data points that we should be watching for in either in the New Jersey process or more broadly? I know you said there was an October meeting, but just like what came out of that.

Ralph LaRossa

I think New Jersey continues to have the conversations. And again, the focus of the New Jersey policy conversations have been about educating and transparency for the public about what the industry is and what it might mean for energy prices here in New Jersey. So I think that's been -- that first meeting was the start of that. There's a website and a few other things that have been put up by the state of New Jersey to focus on it. But I think from a data point standpoint in New Jersey, the first real action will be when the Board of Public Utilities holds its auction for new nuclear, which was called for by the legislation that was last year. So that will be the first thing here in New Jersey. Obviously, the federal government could be doing many things to help enable new nuclear and certainly, I'm not going to front run that to the federal government on that.

Daniel Cregg

Yes. Steve, the only thing I'd add, and it's not anything that you don't know, but it's -- I think it's a very complicated multiparty thing that folks are working on. And so that kind of becomes the challenge, and I think in instances where things may be a little quiet my sense is the way to describe it is that there's still activity, but it's kind of tough to finalize anything or get to an announcement stage. So I think that's -- it's suffering just from the nature of what it is and what people are trying to get done.

Operator

Our last question comes from the line of Anthony Crowdell with Mizuho.

Anthony Crowdell

I guess just maybe one question or follow-up. Just you talked about the potential that maybe getting a large load customer on either upgrades or existing nuclear. I guess does that change your hedging strategy that maybe you would go more open as those conversations are going on? And then I have a follow-up.

Daniel Cregg

Yes. I think the way to think about it is that whatever is in place, will be a contract for a portion of what you are looking to sell more broadly. So you would definitively have to take that into account as you're looking at your overall position.

Anthony Crowdell

Got it. And then this may be more of an EEI 101 question just given the time. So just throw the flag if necessary. If we think about how hedging works, is it -- and I think everyone's concerned is that maybe you're short the basis at PJM West and you're long, the PECO zone, which you guys are very clear, that's where you price your units and they have this like exposure that you're kind of short the PJM West price, I guess, is that how the hedging works? Or is that how you go about hedges? And if this is better, just to pick up at EEI, let me know.

Daniel Cregg

No. I mean I think PJM West is a product that is available for you, but there's other ways to move those positions closer to your actual unit. And we do utilize those products to do exactly that.

Ralph LaRossa

Yes. And Anthony, it's not -- it's just -- there are other people that trade in those products to listen to these calls like anybody else. So we are purposefully describing the best we can right now.

Operator

And that is all the time we have for questions. And I would like to turn the floor back to Mr. LaRossa for our closing comments. .

Ralph LaRossa

Thank you very much. Thank you all for calling in. We appreciate the ongoing interest. I just want to kind of tie out a couple of things. It's been a long summer. Many storms, many activities that have gone on here to were challenges for the company beyond what we've talked about on this call. And I just want to thank the employees at nuclear for the ongoing performance there. I think we just completed another break, break a run at Salem 1 or T&D operations both in Long Island and in New Jersey had outstanding years in a summer that was full of Friday night storms and have continued to perform very well. and we'll continue to have further conversations about the topics that we discuss today and look forward to it at EEI next week. So thanks for calling in, and take care. .

Operator

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