Public Service Enterprise Group (PEG)
Q3 2011 Earnings Call
November 01, 2011 11:00 am ET
Caroline D. Dorsa - Chief Financial Officer and Executive Vice President
Previous Statements by PEG
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Kathleen A. Lally - Vice President of Investor Relations
Michael J. Lapides - Goldman Sachs Group Inc., Research Division
Paul B. Fremont - Jefferies & Company, Inc., Research Division
Dan Eggers - Crédit Suisse AG, Research Division
Jonathan P. Arnold - Deutsche Bank AG, Research Division
Gregg Orrill - Barclays Capital, Research Division
Kit Konolige - Ticonderoga Securities LLC, Research Division
Travis Miller - Morningstar Inc., Research Division
Unknown Analyst -
Ladies and gentlemen, thank you for standing by. Welcome to the Public Service Enterprise Group Third Quarter 2011 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, November 1, 2011, and will be available for telephone replay beginning at 1:00 p.m., November 1, 2011, to November 7, 2011. 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 the Kathleen Lally, Vice President of Investor Relations. Please go ahead.
Kathleen A. Lally
Thank you, Ashley. Thank you, and good morning to everyone who is participating in our earnings call this morning. As you know, we released third quarter 2011 earning statements earlier today. And as mentioned, the release and attachments are posted on our website at www.pseg.com under the Investors section. We also posted a series of slides that detail the operating results by company for the quarter. Our 10-Q for the period ended September 30, 2011, is expected to be filed shortly. I don't intend to read the full disclaimer statement or the comments we have on the difference between operating earnings and GAAP results. But as you know, the earnings release and the other matters that we will discuss in today's call contain forward-looking statements and estimates that are subject to various risks and uncertainties. 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 estimate changes unless we are required to do so. Our release also contains adjusted non-GAAP operating earnings. Please refer to today's 8 K, which contains our earnings release and attachments or other filings for a discussion of factors that may cause results to differ from management's projections, forecasts and expectations, and for a reconciliation of operating earnings to GAAP results.
I would now like to turn call over to Ralph Izzo, Chairman, President and Chief Executive Officer of Public Service Enterprise Group. 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. We ask that you limit yourself to one question and one follow-up. Thanks.
Thank you, Kathleen. And thank you, everyone for joining us today. Earlier this morning, we reported operating earnings for the third quarter 2011 of $0.83 per share compared with operating earnings of $1.03 per share earned in 2010's third quarter. We achieved solid operating earnings for the third quarter in spite of daunting challenges. Our biggest challenge remains the low price of electricity. The effects of our earnings are realized primarily through reductions in BGS and RPM prices effective on June 1 of this year. During the quarter, however, we were also faced with the need to respond to the biggest storm to hit our service territory in our 108-year history. We experienced a historic number of customer outages and level of system damage in the wake of Hurricane Irene. As usual, our employees met the challenge. Thousands of employees from around the entire enterprise banded together with a common purpose: to help our customers when they needed us most. Utility counted on and received the assistance of everyone in PSEG who could lend a much-needed hand.
The employees of PSEG Power also met the challenge. Their efforts to maintain the material condition of our generating units assured their availability during that critical time. Our 3 New Jersey nuclear units remained online during the hurricane and that strong storm performance was typical of the quarter as a whole. The Hope Creek nuclear station operated at a 97 capacity -- 97% capacity factor during the quarter, resulting in our nuclear fleet operating at a better-than-expected capacity factor of 93% year-to-date. Our fossil fleet met the demands of the system during this summer's historically high temperatures. Our combined cycle fleet continues to reduce its force outage rates with all units operating during the July heat wave. Our workforce was called upon again this past weekend, in response to a north-easter that resulted in substantial damage and customer outages. We expect to restore power to approximately 95% of the 500,000 customers who lost power by this Thursday evening. And we have already restored 87% of the affected customers. I expect to have more to say about our employees' efforts in this storm during our next quarterly call.
We remain on track with our major capital programs at PSE&G and PSEG Power. Please recall that our budgets call for spending $6.9 billion over 2011, '12, and '13, with '11's capital outlays at $2.3 billion.