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Public Service Enterprise Group (PEG)
Q4 2012 Earnings Call
February 21, 2013 11:00 am ET
Kathleen A. Lally - Vice President of Investor Relations
Previous Statements by PEG
» Public Service Enterprise Group Management Discusses Q3 2012 Results - Earnings Call Transcript
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Caroline D. Dorsa - Chief Financial Officer and Executive Vice President
Travis Miller - Morningstar Inc., Research Division
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Brian Chin - Citigroup Inc, Research Division
Ladies and gentlemen, thank you for standing by. My name is Kimiko, and I'm your operator today. I would like to welcome you to today's conference of Public Service Enterprise Group Fourth Quarter 2012 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, February 21, 2013, and will be available for telephone replay beginning at 1:00 p.m. Eastern Time today until 11:30 p.m. Eastern Time on March 4, 2013. It will also be available as an audio webcast on PSEG's corporate website at www.pseg.com.
I would now like to turn the conference over to Kathleen Lally. Please go ahead.
Kathleen A. Lally
Thank you, Kimiko. Good morning, everyone. We appreciate your participating in our earnings call this morning. As you are aware, we released our fourth quarter and full year 2012 earnings statements earlier today. And as mentioned, the release and attachments are posted on our website, www.pseg.com, under the Investors section.
We also posted a series of slides that detail operating results by company for the quarter. Our 10-K for the year ended December 31, 2012 is expected to be filed shortly. We won't go through the entire disclaimer or the comments we have on the difference between operating earnings and GAAP results, but we do ask that you read those comments contained in our slides and on our website.
The disclaimer statement regards forward-looking statements detailing the number of risks and uncertainties that cause actual results to differ materially from forward-looking statements made therein. And although we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if our estimates change, unless required by applicable securities laws.
We also provide you with a commentary on the difference between operating earnings and net income reported in accordance with Generally Accepted Accounting Principles in the United States. PSEG believes that the non-GAAP financial measure of operating earnings provides a consistent and comparable measure of performance to help shareholders understand trends.
I will now turn the call over to Ralph Izzo, Chairman, President and Chief Executive Officer of Public Service Enterprise Group. And joining Ralph on the call is Caroline Dorsa, Executive Vice President and Chief Financial Officer. At the conclusion of their remarks, there will be time for your questions. [Operator Instructions]
Nice try, Kathleen. Thank you, Kathleen, and thanks, everyone, for joining us on today's call. Now before I review the earnings we reported earlier this morning, I want to recognize the extraordinary response by PSEG's employees to Superstorm sandy. This truly epic storm challenged us more than any other natural disaster in PSEG's 109-year history. Every aspect of our business was affected by the storm, electric and gas distribution, as well as transmission and power generation. We restored service to more than 2.1 million customers in a 2-week period of time. We reactivated generating facilities damaged by the storm surge and we repositioned our portfolio in response to the storm's impact on our facilities.
We came through this unprecedented storm because our employees worked around the clock to restore service to our customers. We also owe a debt of gratitude to all the employees of utility companies from outside the state who helped us restore our system to working order. We take our commitment to serve the public very seriously, and our employees demonstrated that commitment in the aftermath of Sandy, even at great personal sacrifice. There is simply no better group of people to get the job done.
A s we've disclosed previously, we estimate the cost of restoring service and getting back to normal operations at approximately $295 million of PSE&G. Today, we want to let you know that damage from Sandy could cost up to $300 million of PSEG Power. We incurred $85 million of this expense in the fourth quarter of 2012, the amount that PSEG Power will be spent over a 2-year period. The estimate of the storm's impact on our cost doesn't reflect any recovery from our insurance carriers, which we are pursuing.
Superstorm Sandy has also caused us to review our investment program, to pursue measures targeted at fortifying our electric system and helping prevent a similar level of storm-related damage in the future. We have filed proposals with the New Jersey Board of Public Utilities that would strengthen our infrastructure, provide us with better intelligence on system outages, enhanced communications with our customers and local stakeholders and improve on the already reliable service expected by our customers.
Our plans call for an increase in our distribution capital program of up to $3.9 billion over the next 10 years, with an additional $1.5 billion targeted at our federally regulated transmission system to harden and improve the resiliency of the grid.