Public Service Enterprise Group (PEG) Q2 2026 earnings call transcript

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

Good morning and welcome to PSEG's Second Quarter 2026 earnings presentation. On today's call are Ralph Larosa, Chair, President and CEO, and Dan Craig, Executive Vice President and CFO. The press release attachments and slides for today's discussion are posted on our IR website at investor dot pseg dot com and our 10Q 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-gap operating earnings, which differs from net income or loss, as reported in accordance with generally accepted accounting principles or gaps in the United States. We include reconciliation of our non-gap 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 Larosa. Thank you, Carlotta. And thank you for joining us to review PSEG's Second Quarter 2026 results.

Starting with our financial results, PSEG reported net income of 67 cents per share and non-gap operating earnings of 86 cents per share, bringing our first half results to $2.15 per share of net income and $2.41 per share of non-gap operating earnings.

Our ongoing investments in PSEG's system replacement, reliability and energy efficiency were the main drivers of growth in our financial results in the second quarter.

And that PSEG powered an increase in realized market prices higher nuclear generation and gas operations more than offset the absence of the zero emission certificate programs that concluded in May of 2025.

With results of the first half of 2026 coming in, as expected, we are pleased to reaffirm a full-year non-gap operating earnings guidance in the range of $4.28 to $4.40 per share.

Now, our operational results may have even been better as we successfully managed one of the most challenging storm restorations in our company's history.

Over the July 4th holiday weekend, a series of heatways and successive thunderstorms hit our service area, accompanied by winds of over 70 miles per hour.

PSEG reconnected approximately 380,000 customers with nearly all customers restored within 24 hours of losing power. Demonstrating the value of our system reliability investments and our crew's steadfast commitment to our customers.

PSEG's round-the-clock restoration efforts were led by over 330 crews and were supported by over 10 million proactive customer communications.

In addition to thanking our employees who participated in the storm response, I also want to highlight that we worked this multi-day restoration effort with an excellent safety record and provided PSEG crews to help with support and welcome the upcoming review of our storm response by the New Jersey Board of Public Utilities. And we will be submitting a comprehensive post-event performance report to them tomorrow, August 5th.

During the heat wave, PSEG reached a peak summer load of 10,446 megawatts, the highest level in 14 years and activated demand response, part of our clean energy future programs, during three separate events in early July, helping to keep peak energy costs down for customers.

Our clean energy future programs now generate more than $1 billion in annual customer savings, helping nearly 525,000 residential and business customers save energy and lower utility bills since we began the CFE program back in October of 2020.

Our EE investments have also supported approximately 9,300 jobs statewide over the past six years, including a network of more than 1,000 trade and union allies.

We are proud of our strong performance to date in this program, including the success of our job programs, including the use of union labor for this work.

We expect to file our proposal to implement the BPUs recently adopted framework for a one year extension of the EE2 Triannium by September 30.

And more good news for customers. This month, we are implementing residential bill credits consistent with Executive Order 1 and continuing the 12 month Schedule Group Fund of approximately $166 million of the zero emission certificates that started back in June.

CSEG has also filed with the BPU to lower residential gas bills by more than 5% beginning October 1st. Continuing to benefit our customers with the lowest gas utility bills in New Jersey and the region.

We are also pleased to mention that PGM made a filing at FERC in June to implement a favorable perspective change to transmission cost allocation rules effective June 1st of 2026.

Based on public data from PGM, this perspective change will result in approximately $33 million benefit to our central transmission customers for the period running from June 1st through year end, 2026. When expected, prospective annual benefit of approximately $65 million.

This is another example of how we continue to advocate on behalf of our customers. Since Governor Cheryl's inauguration, her administration has been focused on New Jersey affordability.

The governor's first executive order directed the BPU to study modernizing the electric utility business model. And last month, the BPU released this consultant report, which also marked the conclusion of phase one of this directive.

While no formal recommendation was issued, several examples of promising regulatory frameworks from other states and multiple reforms were highlighted.

These included multi-year rate plans, performance based rates, performance incentive metrics, earning sharing mechanisms, decoupling, and shared saving mechanisms. All of which can further alignment and transparency between the utility business model, state energy policy goals, and affordability in the state.

The BPU will now proceed to phase two of this effort, which is expected to focus on cost discipline, financing modernization, targeting incentives and shared savings, and stage performance based ratemaking.

BSE and G will fully participate in this proceeding, and we expect to file comments by September 18th. We are encouraged by the report's balance assessment of the extent to which the business model changes can address affordability, as well as the report highlighting the value of utilizing multiple criteria in its decision making.

As we prepare for these upcoming stakeholder proceedings, combined with the growing regulatory lag that comes from our historical test year and our robust capital program, we believe there is an opportunity to bridge Governor Cheryl's call for greater accountability and transparency with our regulatory requirement to recover brutally invested capital and update our cost of service.

BSE and G's last base rate case settled in October of 2024, established the requirement to file our next base case no later than 2029. However, we have stated before that we could file sooner if conditions warranted. When you consider that we have added a significant amount of distribution rate base at a time when there have been fewer infrastructure investment programs, the alternative is more frequent base rate cases.

As a result, PSE and G currently anticipates filing by year end 2026 to update base rates. Now, turning the PSE G power. PSE G nuclear also performed well during the quarter, supplying the grid with 7.8 terawatt hours of carbon free 24 by seven base load generation and achieving a capacity factor of 92%. That included a second consecutive break or break or run at Salem unit two.

As widely expected, PGM's latest capacity auction priced at $325 per megawatt day, the upper end of the price collar and fell 6.8 gigawatts short of PGM's targeted reliability requirement. This collar will remain in place during the upcoming December 2026 auction, covering capacity pricing into mid 2030. The uncapped price in the latest auction would have been $555 per megawatt day, but the reserve margin still falls well below PGM's reliability requirement.

We are continuing to review PGM's recent filings, detailing their reliability backstop procurement and IRAS roles. The interim resource adequacy service, formerly known as Connect and Manage. Including PGM's Friday submission to FERC.

The bilateral phase of PGM's RBP, the PSEG power recently submitted several project proposals throughout the region that may qualify as new, dispatchable generation that could be paired with new large loads through bilateral contracts.

Turning to long-term resource adequacy here in New Jersey, Governor Cheryl recently signed the Power in New Jersey Act into law establishing a new nuclear procurement process at the BPU to procure at least 1,100 megawatts through a state-backed program.

As the only operative existing nuclear generating facilities in New Jersey, PSEG nuclear has been engaging in efforts to enable new nuclear development at our site in Salem County since 2016. When we obtained an early site permit from the U. S. Nuclear Regulatory Commission, one of only six currently issued in the United States.

We believe that new nuclear generation represents a compelling long-term solution to address New Jersey's growing resource adequacy needs and support economic development in South Jersey and a successful framework for new nuclear will require an appropriate allocation of project risk.

At the same time, PSEG powers continuing discussions with interested parties that see value in our existing nuclear production, future nuclear operates, and other generation opportunities.

In summary, our teams delivered solid financial and operational results for the second quarter and first half of 2026, enabling us to maintain PSEG's full year 2026 non-GAP operating earnings guidance.

We are also reaffirming PSEG's five-year non-GAP operating earnings growth outlook of 6 to 8% through 2030, as we continue to pursue opportunities incremental to our long-term forecast, including the potential to contract our nuclear output under multi-year agreements.

Importantly, our solid balance sheet enables the funding of PSEG's total five-year capital investment program of $24 to $28 billion without the need to issue new equity or sell assets and provides the opportunity for consistent and sustainable dividend growth. And that'll turn the call over to Dan, who will review the quarter's results and then rejoin the call for the Q&A session.

Great, thank you, Ralph, and good morning, everybody. PSEG reported net income of 67 cents per share for the second quarter of 2026, compared to $1.17 per share in 2025, and non-GAP operating earnings were 86 cents per share in the second quarter of 2026, compared to 77 cents per share in 2025.

These quarterly results bring first half 2026 net income to $2.15 per share, and non-GAP operating earnings to $2.41 per share.

We've provided you with information on slides eight and 10, regarding the contribution to net income and non-GAP operating earnings by business for the second quarter and first half of 2026.

But as 9 and 11 contain waterfall charts that take you through the net changes for the quarter and your date periods over the prior year in non-GAP operating earnings per share, also by major business.

Starting with PSEG, which reported second quarter net income and non-GAP operating earnings of $342 million for 2026, compared to $332 million in 2025.

The utilities results were driven by ongoing investment in our energy efficiency and gas system modernization programs. Return to the waterfall on slide nine, transmission margin was flat compared to the year ago quarter, as higher investment was offset by a prior year of true up, and our distribution margin increased by five cents per share compared to the year ago period, largely reflecting incremental gas margin from GSMP to extension roll-ins and higher investment in energy efficiency.

Compared to the second quarter of 2025, distribution O and M expense was up by a penny per share, reflecting an increase in operational cost due to inflation.

And depreciation and interest expense each rose by a penny per share due to ongoing capital investments and higher long-term interest rates. And utility taxes and other had a net favorable impact of a penny per share.

Weather conditions during the second quarter as measured by the temperature humidity index were 29% warmer than normal and 9% warmer than the second 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 the widespread adoption of energy conservation, including energy efficiency and solar programs.

Under the SIP, the number of electric and gas customers drives margin and residential customer growth for electric was about 1% and gas was flat over the past year.

The SIP is also benefiting customers as higher revenues from last year's warmer than normal summer weather will continue to be refunded to electric customers.

And PSE&G has a 5% decrease pending for residential gas customers driven by the higher revenues from the colder than normal winter earlier this year.

On the capital front, PSE&G invested approximately a billion dollars during the second quarter and is on track to execute our full year 2026 regulated capital investment plan of approximately 4.2 billion focused on continued investments in infrastructure modernization, energy efficiency, electrification initiatives and low growth.

We have also maintained our five year regulated capital investment plan of 22 and a half to 25 and a half billion through 2030.

Completed the GSMP2 extension program in 2025 and were approved to roll in 23 million effective April, 2026 as planned.

PSE&G continues to execute on the GSMP3 program approved by the BPU last November. We expect to invest a total of $1.4 billion over a three year period with approximately a billion of the total program receiving accelerated recovery with a balanced and stipulated base to be recovered in our next base rate case.

And as Ralph mentioned earlier, we expect the cadence of more frequent base rate cases in the future as fewer clause based IIPs cover our capital program.

And since our last rate case concluded in 2024, PSE&G has made significant investments in distribution rate base to support the reliability of our system.

We continue to explore the details of the E3 consultants report addressing Governor Cheryl's executive order one related to New Jersey's regulatory construct.

Elements of the report provide opportunities to enhance the transparency of the regulatory model, which would be helpful for setting customer expectations.

As well as the inclusions of performance based metrics, which based on our high level of service and customer satisfaction, we would welcome.

Switching to transmission and following up on the potential earnings impact of the recent legislation that could eliminate the 50 basis point RTO incentive, we estimated in our 2025 10K that loss of that incentive could represent an annual headwind of 40 million of net income where approximately eight cents per share.

Last February, we considered the possibility that the RTO incentive earnings might be eliminated at some point when we rolled forward our long term non gap operating earnings guidance to 68% through 2030.

I would also note that the effective date of this legislation is January, 2027. So there will not be an impact on 2026 results.

Moving now to PSG Power and Other. For the second quarter, PSG Power and Other reported a net loss of 8 million in 2026 compared to net income of 253 million in 2025.

And non gap operating earnings were 83 million in the second quarter of 2026 compared to 52 million in the second quarter of 2025.

Referring again to the waterfall on slide nine. For the second quarter of 2026 versus 2025, net energy margin rose by eight cents per share driven by higher generation volume, higher capacity prices and higher gas operations. Hardly offset by the absence of those zero emission certificates and the lipor related fuel and energy management fees.

O&M was flat compared to the second quarter of 2025. An interest expense rose by a penny per share reflecting incremental debt at higher interest rates.

Lastly, taxes and other items had a net unfavorable impact of a penny per share in the second quarter compared to 2025. In July, PSG nuclear cleared approximately 3600 megawatts of its eligible nuclear capacity in PJM's base residual auction at $325 per megawatt day for the energy year beginning June 1, 2028 and going through May 31st of 2029.

This latest result represents a modest decline from the $333 per megawatt day price set in the prior PJM capacity auction.

Touching on some recent financing activity, PSG had strong available liquidity totaling 3.4 billion as of the end of June.

This includes approximately $200 million of cash on hand. On the financing front, in June, PSG issued $500 million of 4.8% on secured senior notes due 2031 and used the proceeds to prepay $500 million of a 364 day term loan initiated in February of 2026.

PSG's level of variable rate debt represented approximately 3% of our total debt as of the end of June. Our variable rate debt consisted of the on-heads portion or about half of the $500 million, 364 day term loan at PSG Power maturing in December of 2026 and commercial paper.

Looking ahead, our solid balance sheet continues to support the execution of PSG's five-year capital spending plan dominated by regulated capex 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 second quarter and first half of 2026, enabling us to maintain PSG's full year, 2026 non-gap operating earnings guidance of $4.28 to $4.40 per share.

We're also reaffirming our six to eight percent compound annual growth rate for non-gap operating earnings outlook through 2030 based on our confidence of executing a five-year regulated capital investment plan that also supports a six to seven and a half percent compound annual growth in rate-based over the same period.

We continue to pursue nuclear revenue opportunities, competitive transmission projects and incremental utility infrastructure projects, including making incremental system investments to connect solar and battery storage resources to the grid to meet new demand, which could provide upside to our current growth outlook through 2030.

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

Good morning.

Morning.

Yeah, thanks Nick. So I don't expect a lot to make it in to this base, to this filing and that's exactly why I think the timing of the filing aligns pretty well with the state's goals here. I think for all of us as we look at the EO1 report, we see a state that's looking for a little more transparency, a little more performance based rate making and potential for some multi-year rate plans.

To be set up appropriately for that, you need a base rate case. And so the timing of that aligns with the fact that we haven't had anything on the electric side and put the five years for an IIT kind of puts us in a place where this makes a ton of sense for us right now. And I think it makes a ton of sense for the state.

If you look across the utilities in New Jersey, most of the gas utilities have been in for a base rate case.

And I think we heard from some of the others in New Jersey, the other electrics that they were planning to come in. And I think Orange and Rockland just settled. So if you look across the spectrum, we think this fits and it would keep us from being an outlier as we go into the next phase of the EO1.

Yeah, Nick, we see ourselves in the six to eight as we've been saying. So that hasn't changed. We reaffirmed, we believe there's other opportunities that are presenting itself in the industry that we have opportunities to participate in. And I think we talked a little bit about the RBA, a few other things that are happening in the PJM are potential upgrades at our nuclear plant that we've talked about quite for a few different times on these different calls. So we remain confident in the six to eight and the RTO Adder was one of the scenarios that we had planned for.

Good morning to you.

Can you speak a little bit more to the project proposals and I guess any way to frame the scale and type of opportunity that you're seeing for PSEC power in that? Yeah, no, Rich, thanks for that. So look, I think, you know, people have to some degree forgotten a little bit about the capabilities that we have inside the company as it goes to generation.

You know, we were one of the, we built some of the last generation plants in PJM and certainly in PJM East, when we completed Sea Warren and Keys. But we exited that because it was a market-based solution that really existed and was not something that we wanted to be part of. Now, as PJM is moving into this RBA and there's more opportunities for long-term PPA type or utility-like agreements, we see an opportunity that might present itself.

So we've got a few opportunities we think inside New Jersey. If you outside New Jersey that we're taking a look at and I don't want to go much further than that right now because things are still changing at PJM and we'll read the tea leaves on that just like everyone else's. I think even the load forecast is going to change. We saw some things on that as recently as yesterday.

So as those opportunities present themselves, we'll look at it, but we have a skill set here that exists and we kept the people. Just for those that may not recall when we did exit the fossil business, we offered those employees an opportunity to stay along with us in the utility. And many people did at all sorts of levels in the organization. So we think we've got the skill set to put that group back together and we think that there's opportunities now that a more utility-like which kind of align exactly with the investments we're looking to make.

Yeah, we'll roll forward our Catholics at the beginning of next year as we have in the past couple of years. So that cycle's gonna remain the same. I think our guest distribution business is focused as it always has been on replacement of cast iron. That's still something that I don't see changing. I think on the electric side, you've seen a lot from Governor Schell's administration about being ready for solar, more distributed energy resources, batteries and so on. And I think that you'll see more alignment with our last mile conversations that we've had over the last few years in our, they have a specific PSUP program that they've talked about at the Board of Public Utilities.

And as the new Board President gets his feet under him at the board there, I think you'll see a little more focus on driving the electric utilities in that direction and any updates will have will roll out in the first quarter of next year.

Good morning, Carly.

Good morning.

So where you are in 27 or 28 at this point? Yeah, Carly, there's nothing incremental for us to disclose, there's nothing in the material that we have disclosed. We're working our way through the future years as we step through time.

And then I guess just as you're thinking about potentially getting towards more regulatory certainty and PJM, I'm curious if you have seen any inflections in interest from data center or other large load customers for PPAs at power relative to prior quarters? Yeah, I wouldn't say there's inflections, Carly. I think there's been some continued interest and pursued on some things. I think that continues.

I think that the process in PJM is something that people have, I think, for the past few months. No one is out there, they try to figure out where it's going and what it's gonna mean from the standpoint of new load. And I do think that this whole RVP and IRAS processes are gonna help folks figure out what is gonna be expected of them so they can work against that backdrop. And so I think really the only change we've seen is just maybe just the caveat in the discussions related to the fact that if something has to happen, they are not boxing themselves in through any kind of an agreement to trouble that thing that they need to stay in compliance with.

But I wouldn't call it inflections, I would just call it people reading the context of where we are with respect to PJM.

Yep.

Yeah, Michael. I would say the next step is phase two. I think you've all had information in the public and I don't want to front run anything at the BPU. I think they've got their own timeline. And as I mentioned, we've got a new president at the BPU who is getting up to speed and we'll see if he wants to make any changes to the timeline that was published, but I don't expect that to be the case.

And then as far as our rate case goes, we haven't disclosed any more on that. And I'll leave. We wanted to signal to you all that. We were getting aligned again with the state and the timing that was going to be required to adequately execute on E01. And so put those two pieces together. And we wanted to make sure that we were transparent about that with the investment community. So we got that information out, but no more details on that at this time.

And so we've raised our hand and we wanted to, again, remind folks that we're in that business, but I'll turn it to Dan for a little more. Yeah, Michael, we see potential in what is there to explore and determine whether something there is going to be attractive.

It would be foolish to provide what an expectation would be of returns in a competitive situation. So I won't do that, but I do think that there's enough there for us to be interested in exploring, getting into the process and seeing if it meets a criteria, which what we've talked about is whether it's going to be utility-like or contracted enough to be attractive to us. And so all of those elements that I just talked about go into kind of risk and you're going to compare your return to the risk that you're taking. So obviously it's a, it's more complicated than just providing a number to you with respect to what the return would be.

Michael, I just, let me just double down on what Dan said regarding the risk profile and the utility-like. I just want to reinforce that. We said it in an earlier question as well, but that's really important to us. However, I do think that as you said, there's some more clarity in the PJM regulatory construct they're putting together. I think it's getting closer to utility-like with at least some of these opportunities that exist.

Good morning, Jeremy.

And sorry if you had already said this, but in these conversations with bilaterals, is it interesting existing assets or both or how should we think about that?

Yeah, I think it's both but more interested in new, right? If you think about the entire tone, I think across the country with respect to new load coming on, you don't have discussions about new load coming on with at least a preference for having incremental generation to join that. So I think there's also an understanding that new generation takes a while to come on. And so I think there is a preference to have something new to kind of fit within that overall dialogue.

But I would say there's not solely an interest in new is how I would describe it.

No, it's not. It's not a fixed ratio. It is just a preference at all.

It depends upon the timeline that you're looking at. I do believe that new nuclear makes sense as we said in the prepared remarks. I think it's aligned, again, with the policies of the state. So we've always done that. So we're trying to enable that as best we can.

But whether or not those units, whether it's in New Jersey or across the country, come on quick enough for some of the load that's looking to connect, you know, these are 12 years, 12-year long projects. I won't revisit what's happened in the past. So we need short-term solutions as well as long-term solutions. And I think that the new nuclear certainly falls in the long-term bucket. And even if you take a look at what the RBP is talking about, they're talking about an in-service date of 2032.

So that's, you know, half the time to get to the 12 years that Ralph just talked about. So I think there's your term, medium term, and long-term nuclear certainly on the longer term.

Yeah, I think, well, we see multiple paths. And you kind of say there's multiple, you know, things that they put forth in EO1. I thought they really just put forth a number of options, but not necessarily a number of reforms, right? There's, there's multi-array plans, there's performance-based rates, but these are things we've seen before in the industry.

And they will provide more transparency for our customers. So I welcome the everything that's being discussed. I think more transparency for customers is helpful for us, especially when you have the summit of billing cycles like we've gone through. I think one of the best things that came out of the report was the reference to, you know, only 25% of the bill is distribution.

And I think that was the number that was voted in the EO1. And so I look at that and I say, you know, I welcome the transparency. I think that's very helpful for us as a company. And from a performance-based rates, you know, I started to prepare comments as we do always with financial but move quickly into operational because we are very proud of the operational results that we have as a company. And so from a performance-based rate standpoint, we welcome that. So I kind of tied those two pieces together. And I think the paths that we see are all positive. I think we have to all the, you know, devils in the details. And we'll work through that with policymakers, but I feel pretty good about where we are.

And I think that our final number of base rate case shows our willingness to be aligned from a timing standpoint with the next steps that we'll see in this process.

Look, I think that there's still, again, we got to look for a little more detail. We got to see what comes out of birth when they finally approve everything. But, you know, the state will be involved because the VP will have some timelines that they'll have to meet right now. I think it's set up at 12 months, but we'll see how that changes over time. And I don't want to be locked into anything specific there until we see what comes out of birth.

But I do think that working together with the BPU, we can be very helpful here. And I'm going to point to something that recently happened, which is the transmission cost allocations process where we had, I think it was in, again, in our prepared remarks where we talked a little bit about how some of that cost allocation was done and working with the state.

We now, as recently as I guess the last two days, we saw that that filing that we had made for the cost allocations was approved by FERC. And the result is going to be a $65 million a year savings going forward, you know, that's not just a one time, that's every year going forward for our customers. So, you know, we've proven we can work with the state. In that particular case, that cost allocation was something we really advocated for strongly as a company ourselves, and then we worked with the state to get over some of the last minute hurdles here. And I think we can do the same when we get into this, into the RBA.

I think we'll be able to figure out exactly the right way to do this to help from a customer cost standpoint as best we can.

Hey, Sophia.

So it's a great question.

I'll give it to Dan. Yeah, you know, I think to the extent that you are new load, you're going to end up getting pushed into that, but I also think that there's, you know, states that are seeing their supply-demand balances not necessarily be where they want them and may be looking to do something to prompt some generation there. And I think that's got some potential as well.

I think to your question, it sounded like are you seeing folks come in and in particular new load looking for new generation? I think that will get caught up into that RBP process though. So I think there are other venues and I think we've got one of the best sites that are out there with respect to the infrastructure in place.

But we'll see what happens throughout it as we go forward through a couple of different processes as they move forward.

So I'm going to, again, just kind of reinforce something Dan said earlier. It all depends upon the risk, right? And we have said we don't want to be in a high-risk market. I would consider PGM marketplace to be high-risk. We're looking for utility-like returns. So I think in saying that utility-like investments, we're saying utility-like returns because we're looking for utility-like risk.

And I don't want to go much further than that, other than just to reinforce utility-like, utility-like, utility-like.

There's not a tremendous financial opportunity on the VPP side that we see. I think maybe nationwide, if you were in that game or you're doing some other things, but for our New Jersey customers, it's more about aligning with policy and enabling that policy than it is about a financial return.

Okay, I've got a thorny initiative that you have on their way to address that alignment. Yeah, we have some – we have some – I think we've worked with the BPU on a couple of different items where we've put forth some pilot programs, and I think they're going to initiate more of a process there.

Yeah, look, I look at that as a very specific piece of the regulatory process, not overarching. I think, again, the state is looking for affordability, so understand the goals that were put forth in that framework, but it is a framework. It's not mandated, so we have the opportunity to talk about how our programs differentiate from others. I think one of the biggest ones for us is our use of union labor and the percentage in which we use union labor to achieve the goals that were put forth for all of the for us by the BPU.

So I do think we are some different chain factors that are worth discussion. I also think that it's important to note that this is prospective from an asset standpoint. This is dealing with the extension assets, the dollars that we put forth to support that investment, not for all the investments, so that's also important. And I think it's also a reflection of the amount of, I'd say, the loan program, the on-bill financing that we're doing, and the perceived risk around that specific part of the program. So there's a lot of specifics in what I just said to you, which makes it kind of unique, and it's consistent from an affordability standpoint, but it's unique from an investment standpoint as we think about it.

So, you know, more to come on that. I think we're, again, very well positioned. I think our site is very well positioned. And we look forward to doing what we can to enable new nuclear in New Jersey.

But I think, to your specific question, is there a line of sight for policymakers on the cost? I think there's plenty of studies out there. And I think there's plenty of conversation about where these costs are and, more importantly, where they could go to.

Hey, Travis.

EO1 and the process from here. Is the ball now in your court in terms of putting together proposals, best ideas, stuff like that to present to the BPU? Or are you still waiting for some more guidance, either from Governor's Office or BPU or some other entity before you start putting the filing out? Yeah, Travis. There's a clear phase too that the Board of Public Utilities will go through as the next step in this process. So, you know, we'll participate in that. We'll have comments. There's plenty of stakeholder meetings that have been scheduled by the Board that, you know, we will participate in and others.

So it's more at this point still an open item that we wait for finalization of the orders from the Board of Public Utilities.

So you think in terms of putting together actual proposals and stuff that comes after the base rate case? Well, no, I think we said we filed by the end of the year. There's a timeline associated with that. If you kind of play it out, there'll be some sort of a framework that'll come out for a V01. I would expect that to happen in the last quarter, beginning in next year, put that framework together. Now you've got your base rate filing that's been recently approved or is about to be approved just for any utility in the state.

And then you can start to move, you know, efficiently into the next framework because you've got that base to work off of.

Thank you. At this time, I'll turn the floor back to Mr. LaRosa for closing comments. Well, thank you. Hey, just a couple of things. Appreciate all the interest is always just want to reinforce the way we started, which was under the great work by the teams here in New Jersey and in Long Island to respond to the storms over the July 4th holiday season. And just the fact that people were away from their families and from their barbecues and from everything that they wanted to be doing otherwise during that weekend.

Without that operational excellence, we couldn't even be having conversations about what we can potentially do moving forward. And I think as I look forward, we've continued to get more regulatory clarity both at PJM with some of the steps that they've taken and how that might play out on the generation side. And here in New Jersey on the distribution side as we move through the E01 process and ongoing conversations there. So regulatory clarity is starting to take place.

And then I think on top of that, there's opportunities sets that remain in front of us that are presented both by the regulatory clarity of PJM and in New Jersey as it pertains to that last mile and getting the system ready for the solar and batteries that we know we need in the near term. So put all those pieces together and I feel pretty good about where we are.

So I look forward to the next time that we're together and I'll just end by wishing Carlotta a belated happy birthday for all of you that are on a call and interact with her all the time. When you give her a buzz next time, just make sure you say happy birthday. Thanks for dialing in.