Public Service Enterprise Group (PEG) risk factors, 2025 10-K

GENERAL OPERATIONAL AND FINANCIAL RISKS

1. 01Inability to successfully develop, obtain regulatory approval for, or construct T&D, and our nuclear generation projects could adversely impact our businesses
2. 02Failure to obtain regulatory or other approvals, delays, cost escalations or otherwise unsuccessful construction and development could materially affect our financial position, results of operations and cash flows
3. 03We are subject to physical, financial and transition risks related to climate change, including potentially increased legislative and regulatory burdens and changing customer preferences, and we may be subject to lawsuits, all of which could impact our businesses and results of operations
4. 04To the extent financial markets view climate change and greenhouse gas (GHG) emissions as a financial risk, our ability to access capital markets could be negatively affected or cause us to receive less than favorable terms and conditions
5. 05investments and our ability to meet our targets of net zero GHG emissions by 2030 for Scopes 1 and 2 emissions, or other GHG emissions reduction or climate-related goals that we may set from time to time, in a cost-effective manner or at all
6. 06We are also exposed to the risk of pandemics, which could result in service disruptions and delays or otherwise impair our ability to timely provide service to our customers, complete our investment projects or obtain timely recovery of our costs
7. 07Any inability to recover the carrying amount of our long-lived assets could result in future impairment charges which could have a material adverse impact on our financial condition and results of operations
8. 08Disruptions or cost increases in our supply chain, including labor shortages, could materially impact our business
9. 09Inability to maintain sufficient liquidity in the amounts and at the times needed or access sufficient capital at reasonable rates or on commercially reasonable terms could adversely impact our business
10. 10maintenance of our investment grade credit ratings
11. 11Cybersecurity attacks, data breaches, or intrusions or other disruptions to our IT, operational or other systems could adversely impact our businesses
12. 12breaches of vendors’ infrastructures where our confidential information is stored
13. 13An increasing demand for power and load growth, potentially compounded by a shift away from natural gas toward increased electrification could cause reliability issues and higher costs for customers, which could lead to potential pressure on fair and timely recovery of our investments and proposed programs
14. 14Failure to attract and retain a qualified workforce could have an adverse effect on our business
15. 15Inflation, including increases in the costs of equipment and materials, fuel, services and labor could adversely affect our operating results
16. 16Covenants in our debt instruments and credit agreements may adversely affect our business
17. 17Financial market performance directly affects the asset values of our defined benefit plan trust funds and Nuclear Decommissioning Trust (NDT) Fund. Market performance and other factors could decrease the value of trust assets and could result in the need for significant additional funding
18. 18We are party to, and are also exploring opportunities to enter into, several contracts from which we currently or may in the future derive significant revenues
19. 19Artificial Intelligence is an emerging area of technology that has the potential to impact various aspects of our business operations and customer interactions

RISKS RELATED TO OUR GENERATION BUSINESS

1. 20Fluctuations in the wholesale power and natural gas markets could negatively affect our financial condition, results of operations and cash flows
2. 21federal and state power, market and environmental regulation and legislation, including financial incentives for new renewable energy generation capacity that could lead to oversupply and price suppression
3. 22We may be unable to obtain an adequate nuclear fuel supply in the future
4. 23the loss of critical infrastructure, acts of war or terrorist attacks (including cybersecurity breaches) or catastrophic events such as fires, earthquakes, explosions, floods, severe storms or other similar occurrences could impede the delivery of such fuels
5. 24The introduction or expansion of technologies related to energy generation, distribution and consumption and changes in customer usage patterns could adversely impact us
6. 25We are subject to third-party credit risk relating to our sale of nuclear generation output
7. 26There may be periods when PSEG Power generation may not operate and/or may not be able to meet its commitments under forward sale obligations and PJM rules at a reasonable cost or at all
8. 27Identifying and correcting any of these issues may require significant time and expense. Depending on the materiality of the issue, we may choose to close a plant rather than incur the expense of restarting it or returning it to full capacity

REGULATORY, LEGISLATIVE AND LEGAL RISKS

1. 28PSE&G’s revenues, earnings and results of operations are dependent upon state laws and regulations that affect distribution and related activities
2. 29PSE&G’s proposed investment projects or programs may not be fully approved by regulators and actual capital investment by PSE&G may be lower than planned, which would cause lower than anticipated rate base
3. 30We are subject to comprehensive federal regulation that affects, or may affect, our businesses
4. 31point adder for RTO membership in 2008. Elimination of the adder for RTO membership would reduce PSE&G’s annual Net Income and annual cash inflows by approximately $40 million
5. 32As further described in Item 7. MD&A—Executive Overview of 2024 and Future Outlook, PSEG Power’s Salem 1, Salem 2 and Hope Creek nuclear plants have been awarded ZECs by the BPU through May 2025
6. 33We may be adversely affected by changes in energy regulatory policies, including energy and capacity market design rules and developments affecting transmission
7. 34Our ownership and operation of nuclear power plants involve regulatory risks as well as financial, environmental and health and safety risks
8. 35In addition, if a unit cannot be operated through the end of its current estimated useful life, our results of operations could be adversely affected by increased depreciation rates, impairment charges and accelerated future decommissioning costs
9. 36We are subject to numerous federal, state and local environmental laws and regulations that may significantly limit or affect our businesses, adversely impact our business plans or expose us to significant environmental fines and liabilities
10. 37Actions by state and federal government agencies could also result in reduced reliance on natural gas and could potentially result in stranding natural gas assets owned and operated by PSE&G, which could materially adversely affect our business, financial condition and results of operations
11. 38We may not receive necessary licenses, permits and siting approvals in a timely manner or at all, which could adversely impact our business and results of operations
12. 39Changes in tax laws and regulations may adversely affect our financial condition, results of operations and cash flows