PUBLIC SERVICE ENTERPRISE GROUP INC Revenue Disclosure
Note 2. Revenues
Nature of Goods and Services
The following is a description of principal activities by which PSEG and its subsidiaries generate their revenues.
PSE&G
Revenues from Contracts with Customers
Electric and Gas Distribution and Transmission Revenues—PSE&G sells gas and electricity to customers under default commodity supply tariffs. PSE&G’s regulated electric and gas default commodity supply and distribution services are separate tariffs which are satisfied as the product(s) and/or service(s) are delivered to the customer. The electric and gas commodity and delivery tariffs are recurring contracts in effect until modified through the regulatory approval process as appropriate. Revenue is recognized over time as the service is rendered to the customer. Included in PSE&G’s regulated revenues are unbilled electric and gas revenues which represent the estimated amount customers will be billed for services rendered from the most recent meter reading to the end of the respective accounting period.
PSE&G’s transmission revenues are earned under a separate tariff using a FERC-approved annual formula rate mechanism. The performance obligation of transmission service is satisfied and revenue is recognized as it is provided to the customer. The formula rate mechanism provides for an annual filing of an estimated revenue requirement with rates effective January 1 of each year and a true-up to that estimate based on actual revenue requirements. The true-up mechanism is an alternative revenue which is outside the scope of revenue from contracts with customers.
Other Revenues from Contracts with Customers
Other revenues from contracts with customers, which are not a material source of PSE&G revenues, are generated primarily from appliance repair services and solar generation projects. The performance obligations under these contracts are satisfied and revenue is recognized as control of products is delivered or services are rendered.
Revenues Unrelated to Contracts with Customers
Other PSE&G revenues unrelated to contracts with customers are derived from alternative revenue mechanisms recorded pursuant to regulatory accounting guidance. These revenues, which include the Conservation Incentive Program (CIP), green energy program true-ups and transmission formula rate true-ups, are not a material source of PSE&G revenues.
PSEG Power & Other
Revenues from Contracts with Customers
Electricity and Related Products—PSEG Power owns generation solely within PJM, which facilitates the dispatch of energy and energy-related products. PSEG Power primarily sells to the PJM ISO energy and ancillary services which are separately transacted in the day-ahead or real-time energy markets. The energy and ancillary services performance obligations are typically satisfied over time as delivered and revenue is recognized accordingly. PSEG generally reports electricity sales and purchases conducted with PJM net on an hourly basis in either Operating Revenues or Energy Costs in its Consolidated Statements of Operations. The classification depends on the net hourly activity.
PSEG Power enters into capacity sales and capacity purchases through PJM. The transactions are reported on a net basis dependent on PSEG Power’s monthly net sale or purchase position through PJM. The performance obligations with PJM are satisfied over time upon delivery of the capacity and revenue is recognized accordingly. In addition to capacity sold through PJM, PSEG Power sells capacity through bilateral contracts and the related revenue is reported on a gross basis and recognized over time upon delivery of the capacity.
In May 2025, PSEG Power’s Salem 1, Salem 2 and Hope Creek nuclear plants zero emission certificate (ZEC) sales concluded. These nuclear plants received ZEC revenue from the electric distribution companies (EDCs) in New Jersey. PSEG Power recognized revenue when the units generated electricity, which was when the performance obligation was satisfied. These revenues have been considered variable consideration within the scope of revenue from contracts with customers and are included in PJM Sales in the following tables. ZEC revenue has been adjusted by the estimated production tax credits (PTCs) generated from these nuclear plants. ZEC revenue will be adjusted based upon the actual value of the PTCs generated by these nuclear plants and that adjustment could be material. See Note 19. Income Taxes for further discussion on the factors that could result in an adjustment to the value of the PTCs.
Gas Contracts—PSEG Power sells wholesale natural gas, primarily through an index based full-requirements Basic Gas Supply Service (BGSS) contract with PSE&G to meet the gas supply requirements of PSE&G’s customers. The BGSS contract remains in effect unless terminated by either party with a two-year notice. Based upon the availability of natural gas, storage and pipeline capacity beyond PSE&G’s daily needs, PSEG Power also sells gas and pipeline capacity to other counterparties under bilateral contracts. The performance obligation is primarily the delivery of gas which is satisfied over time. Revenue is recognized as gas is delivered or pipeline capacity is released.
PSEG LI Contract—PSEG LI has a contract with LIPA which generates revenues. PSEG LI’s subsidiary, Long Island Electric Utility Servco, LLC (Servco) records costs which are recovered from LIPA and records the recovery of those costs as revenues when Servco is a principal in the transaction. In September 2025, the LIPA board of trustees approved a five-year extension of the contract. See Amended OSA below for further information.
Other Revenues from Contracts with Customers
PSEG Power has contracted to provide energy management and fuel procurement services for LIPA. Revenue is recognized over time as services are rendered. This agreement expired in December 2025.
Revenues Unrelated to Contracts with Customers
PSEG Power’s revenues unrelated to contracts with customers include electric, gas and certain energy-related transactions accounted for in accordance with Derivatives and Hedging accounting guidance. See Note 15. Financial Risk Management Activities for further discussion.
Energy Holdings generates lease revenues which are recorded pursuant to lease accounting guidance.
Disaggregation of Revenues
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PSE&G |
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PSEG |
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Eliminations |
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Consolidated |
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Millions |
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Year Ended December 31, 2025 |
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Revenues from Contracts with Customers |
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Electric Distribution |
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$ |
4,858 |
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$ |
— |
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$ |
— |
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$ |
4,858 |
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Gas Distribution |
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2,461 |
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— |
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— |
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2,461 |
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Transmission |
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1,779 |
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— |
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— |
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1,779 |
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Electricity and Related Product Sales |
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Third-Party Sales |
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— |
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1,540 |
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— |
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1,540 |
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Sales to Affiliates |
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— |
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47 |
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(47 |
) |
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— |
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Gas Sales |
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Third-Party Sales |
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— |
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353 |
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— |
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353 |
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Sales to Affiliates |
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— |
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1,060 |
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(1,060 |
) |
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— |
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Other Revenues from Contracts with Customers (B) |
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385 |
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752 |
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(5 |
) |
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1,132 |
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Total Revenues from Contracts with Customers |
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9,483 |
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3,752 |
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(1,112 |
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12,123 |
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Revenues Unrelated to Contracts with Customers (C) |
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75 |
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(30 |
) |
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— |
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45 |
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Total Operating Revenues |
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$ |
9,558 |
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$ |
3,722 |
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$ |
(1,112 |
) |
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$ |
12,168 |
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PSE&G |
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PSEG |
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Eliminations |
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Consolidated |
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Millions |
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Year Ended December 31, 2024 |
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Revenues from Contracts with Customers |
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Electric Distribution |
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$ |
3,977 |
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$ |
— |
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$ |
— |
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$ |
3,977 |
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Gas Distribution |
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2,059 |
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— |
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— |
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2,059 |
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Transmission |
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1,754 |
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— |
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— |
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1,754 |
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Electricity and Related Product Sales |
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Third-Party Sales |
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— |
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824 |
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— |
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824 |
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Sales to Affiliates |
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— |
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114 |
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(114 |
) |
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— |
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Gas Sales |
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Third-Party Sales |
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— |
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206 |
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— |
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206 |
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Sales to Affiliates |
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— |
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846 |
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(846 |
) |
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— |
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Other Revenues from Contracts with Customers (B) |
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368 |
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692 |
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(6 |
) |
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1,054 |
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Total Revenues from Contracts with Customers |
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8,158 |
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2,682 |
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(966 |
) |
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9,874 |
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Revenues Unrelated to Contracts with Customers (C) |
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291 |
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125 |
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— |
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416 |
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Total Operating Revenues |
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$ |
8,449 |
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$ |
2,807 |
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$ |
(966 |
) |
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$ |
10,290 |
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PSE&G |
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PSEG |
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Eliminations |
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Consolidated |
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Millions |
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Year Ended December 31, 2023 |
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Revenues from Contracts with Customers |
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Electric Distribution |
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$ |
3,494 |
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$ |
— |
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$ |
— |
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$ |
3,494 |
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Gas Distribution |
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1,982 |
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— |
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— |
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1,982 |
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Transmission |
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1,673 |
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— |
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— |
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1,673 |
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Electricity and Related Product Sales |
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Third-Party Sales |
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— |
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905 |
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— |
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905 |
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Sales to Affiliates |
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— |
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114 |
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(114 |
) |
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— |
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Gas Sales |
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Third-Party Sales |
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— |
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206 |
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— |
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206 |
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Sales to Affiliates |
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— |
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984 |
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(984 |
) |
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— |
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Other Revenues from Contracts with Customers (B) |
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368 |
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631 |
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(5 |
) |
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994 |
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Total Revenues from Contracts with Customers |
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7,517 |
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2,840 |
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(1,103 |
) |
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9,254 |
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Revenues Unrelated to Contracts with Customers (C) |
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290 |
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1,693 |
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— |
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1,983 |
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Total Operating Revenues |
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$ |
7,807 |
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$ |
4,533 |
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$ |
(1,103 |
) |
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$ |
11,237 |
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Contract Balances
PSE&G
PSE&G did not have any material contract balances (rights to consideration for services already provided or obligations to provide services in the future for consideration already received) as of December 31, 2025 and 2024. Substantially all of PSE&G’s accounts receivable and unbilled revenues result from contracts with customers that are priced at tariff rates. The allowance for credit losses represented approximately 12% and 13% of accounts receivable (including unbilled revenues) as of December 31, 2025 and 2024, respectively.
Accounts Receivable—Allowance for Credit Losses
PSE&G’s accounts receivable, including unbilled revenues, is primarily comprised of utility customer receivables for the provision of electric and gas service and appliance services, and are reported on the balance sheet as gross outstanding amounts adjusted for an allowance for credit losses. The allowance for credit losses reflects PSE&G’s best estimate of losses on the account balances. The allowance is based on PSE&G’s projection of accounts receivable aging, historical experience, economic factors and other currently available evidence. PSE&G’s electric bad debt expense is recoverable through its Societal Benefits Clause (SBC) mechanism.
The following provides a reconciliation of PSE&G’s allowance for credit losses for the years ended December 31, 2025 and 2024.
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Years Ended December 31, |
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2025 |
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2024 |
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Millions |
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Balance at Beginning of Year |
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$ |
215 |
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$ |
283 |
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Utility Customer and Other Accounts |
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Provision |
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145 |
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103 |
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Write-offs, net of Recoveries of $42 million and $31 million for 2025 and 2024, respectively |
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(106 |
) |
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(171 |
) |
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Balance at End of Year |
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$ |
254 |
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$ |
215 |
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PSEG Power & Other
PSEG Power generally collects consideration upon satisfaction of performance obligations, and therefore, PSEG Power had no material contract balances as of December 31, 2025 and 2024.
PSEG Power’s accounts receivable include amounts resulting from contracts with customers and other contracts which are out of scope of accounting guidance for revenues from contracts with customers. The majority of these accounts receivable are subject to master netting agreements. As a result, accounts receivable resulting from contracts with customers and receivables unrelated to contracts with customers are netted within Accounts Receivable and Accounts Payable on the Consolidated Balance Sheets.
PSEG Power’s accounts receivable consist mainly of revenues from energy and ancillary services sold directly to ISOs and other counterparties. In the wholesale energy markets in which PSEG Power operates, payment for services rendered and products transferred are typically due within 30 days of delivery. As such, there is little credit risk associated with these receivables. PSEG Power did not record an allowance for credit losses for these receivables as of December 31, 2025 and 2024. PSEG Power monitors the status of its counterparties on an ongoing basis to assess whether there are any anticipated credit losses.
PSEG LI did not have any material contract balances as of December 31, 2025 and 2024.
Remaining Performance Obligations under Fixed Consideration Contracts
PSEG primarily records revenues as allowed by the guidance, which states that if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, the entity may recognize revenue in the amount to which the entity has a right to invoice. PSEG has future performance obligations under contracts with fixed consideration as follows:
Capacity Revenues from the PJM Annual Base Residual and Incremental Auctions—The Base Residual Auction is generally conducted annually three years in advance of the operating period. However, changes to capacity market rules have resulted in auction suspensions and delays so that recent auctions have been run closer in time to their operating periods. In July 2024 the results of the 2025/2026 auction were released, in July 2025 the results of the 2026/2027 auction were released and in December 2025 the results of the 2027/2028 auction were released. PSEG Power expects to realize the following average capacity prices resulting from the base and incremental auctions, including unit specific bilateral contracts for previously cleared capacity obligations.
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Delivery Year |
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$ per |
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MW |
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June 2025 to May 2026 |
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$ |
270 |
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3,500 |
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June 2026 to May 2027 |
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$ |
329 |
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3,500 |
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June 2027 to May 2028 |
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$ |
333 |
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3,500 |
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Amended OSA—PSEG LI has been operating LIPA’s electric T&D system in Long Island, New York since 2014 under a 12-year OSA with LIPA that expired on December 31, 2025, with annual fixed and variable components. The fixed fee for the provision of services thereunder in 2025 was approximately $45 million. In December 2025, PSEG LI entered into a five-year extension of the
OSA ending on December 31, 2030. The fixed fee for the provision of services r in 2026 and 2027 is approximately $43 million, escalating to approximately $47 million in 2028 and updated annually based on the change in the Consumer Price Index through the remainder of the contract. A competitor in the contract bidding process filed litigation against LIPA challenging the process. LIPA filed a motion to dismiss the competitor’s claim as untimely, which was granted by the New York Supreme Court. The competitor filed an appeal in January 2026.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 28, 2019 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.