Ladies and gentlemen, thank you for standing by. My name is Kyle, and I am your event operator today. I'd like to welcome everyone to today's conference, Public Service Enterprise Group's second quarter 2022 earnings conference call and webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session for members of the financial community. At that time, if you have a question, you will need to press the star and the number one on your telephone keypad. To withdraw your question, please press star and the number two. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded today, 2nd August 2022, and will be available for replay as an audio webcast on PSEG's Investor Relations website at investor. pseg. com. I would now like to turn the conference over to Carlotta Chan. Please go ahead. Thank you, Kyle. Good morning, everyone. PSEG's second quarter 2022 earnings release attachments and slides detailing operating results by company are posted on our IR website located at www.investor.pseg.com, and our 10-Q will be filed shortly. The 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-GAAP operating earnings, which differs from net income as reported in accordance with generally accepted accounting principles or GAAP in the United States. We include reconciliations of our non-GAAP financial measures and a disclaimer regarding forward-looking statements on our IR website and in today's earnings materials. On today's call are Ralph Izzo, Chair, President, and Chief Executive Officer of PSEG. Dan Craig, Executive Vice President and Chief Financial Officer. Following their prepared remarks, Ralph LaRossa, currently our Chief Operating Officer and our next CEO, will join Ralph and Dan to take your questions. Ralph? Thank you, Carlotta. Excuse me. Good morning, everyone, and thanks for joining us for a review of PSEG's second quarter 2022 results. For the second quarter, PSEG reported net income of $131 million or $0.26 per share, compared to a net loss of $177 million or $0.35 per share in the second quarter of 2021. Non-GAAP operating earnings for the second quarter of 2022 were $320 million or $0.64 per share, compared to non-GAAP operating earnings of $356 million or $0.70 per share in 2021 second quarter. Just a reminder, I'll repeat this several times throughout this call, that the second quarter 2021 included the results from our divested fossil assets and Solar Source. PSEG is on track to achieve our 2022 non-GAAP operating earnings guidance of $3.35-3.55 per share based on results through the first six months of 2022. This is largely driven by ongoing rate-based growth from regulated investments and lower costs due to the already mentioned sale of generation assets on the carbon-free infrastructure side of the business. Utility earnings for the first half of 2022 are up 4% over last year. At carbon-free infrastructure, the year-over-year comparisons are skewed by our asset sales. Also, the majority of 2022's earnings at the carbon-free infrastructure and other side of the business have been realized as of 30th June. For the balance of 2022, the utility will continue to be the main driver of PSEG's growth profile, which results squarely within our guidance range. I'm very encouraged by the revised climate compromise contained in the proposed Inflation Reduction Act that includes production tax credit provisions for existing nuclear and new offshore wind resources. We hope to see it move on to the Senate floor this week, but more on that later. I know many of you have been following the potential for an impact to our pension results in 2023 due to the significant declines in equity and fixed income markets since the beginning of the year. Should market conditions remain stressed on our 31st December measurement date, we would anticipate non-cash pension headwinds related to these market declines. 31st December is the single date that will determine the pension impact for 2023. Instead of continually updating a number as our dynamic market changes on a daily basis, we would rather simply assure you that in the interim, we are actively developing plans to counteract the potential near-term headwinds to the extent they remain at year-end. I want to emphasize that our pension remains very well-funded and does not, I repeat, does not require any cash contributions for the foreseeable future. From a funding perspective, our pensions were approximately 95% funded at year-end 2021, and the increase in the discount rate year to date has kept the funding ratio in a comparable place to year-end. Rest assured that we will work tirelessly to mitigate the potential future headwinds, including pension, supply chain, and general inflationary pressures. I hope you will see through these near-term challenges and recognize what we see, that the underlying fundamental utility growth story of PSEG remains intact and that our valuation will reflect the improved business mix and overall de-risking that continues. All of which gives us the confidence to reiterate our multi-year 5%-7% EPS CAGR from the midpoint of 2022 non-GAAP operating earnings guidance to 2025. We remain focused on improving our system reliability and resiliency, further de-risking the business overall and maximizing affordability for our customers. The statewide moratorium on shutoffs for residential electric and gas service was lifted in mid-March 2022, and collections and shutoffs have since restarted. However, New Jersey did pass legislation after the moratorium ended that provided protection from shutoffs to customers who applied for payment assistance programs by 15th June of 2022. Applicants for assistance are protected from shutoffs while awaiting their application determination. As a result, PSEG continues to experience higher accounts receivable aging, which we expect will take the next several years to reset to historical levels. PSEG's electric distribution bad debt expense is recoverable through its Societal Benefits Clause mechanism and has deferred its incremental gas distribution bad debt expense as well as other incremental COVID-19 costs to future recovery, which will likely take place in our next distribution-based rate case. Our regulatory framework in New Jersey continues to be constructive. Working with the BPU staff and Rate Counsel, we reached a settlement to begin work this quarter on the Infrastructure Advancement Program. The BPU approved the settlement in June, and over the next four years, we will invest $500 million to extend reliability improvements inclusive of the last mile of our distribution system as we prepare the grid for the rapid transition to electric vehicles and enable a greater integration of renewable energy resources. Turning to our efforts on the environmental, social, and governance or ESG front, we are continuing our internal preparations to finalize company-wide emission reduction goals, and we will be submitting those targets to the United Nations-backed Science Based Targets initiative for validation that they are in fact consistent with the objectives of the Paris Agreement to limit the global temperature increase to 1.5 degrees Celsius or less. We have until September 2023 to finalize and submit our targets for validation. Although we're aiming to present our pathways before then, which will address all three scopes of PSEG's emissions reduction goals. Let me turn now to commodity markets, where we've seen a continued increase in electric and natural gas prices during the second quarter. Although some PJM prices have moderated recently, prices remain at high levels. With gas and electricity supply costs, which are passed through at PSEG, comprising approximately 40%-45% of a typical residential gas and electric bill, we are keenly focused on controlling costs to minimize the impact of rising commodity costs on these customer bills and maximizing affordability. On the electric side, PSEG contracts for its default BGS, Basic Generation Service, as we often refer to it, requirements on a three-year rolling basis. In each year, one-third of the load is procured for a three-year period. New BGS rates went into effect 1st June. Despite what I just said a moment ago, but due to a decline in actual versus assumed capacity costs, electricity bills actually declined. On the gas side, PSEG is permitted to recover the cost of hedging up to 80% or roughly 115 BCF of its annual residential requirements through the BGSS tariff. We recently filed for our anticipated BGSS costs to go into effect in rates before the upcoming winter season that will reflect current market prices at the time and be trued up for actual costs over subsequent time periods. On the nuclear side of the business, we remain fully hedged in 2022 and 2023 and a little more than half hedged in 2024. With our ratable baseload hedging program in effect, we should begin to see higher prices layer in as we continue to incrementally sell power forward into 2024 and 2025, assuming that prices remain at today's higher levels. The uncertainty of power prices highlights the critical need for longer revenue visibility to safeguard the economic viability of existing nuclear plants, which are increasingly recognized as an irreplaceable source of carbon-free domestic energy supply. I might add this is also taking place at the international level in terms of the recognition as an irreplaceable source of carbon-free energy supply. We continue to observe a positive shift in public sentiment and support of preserving these nuclear plants, most recently as part of what I mentioned before, the proposed Inflation Reduction Act of 2022, as our country invests in energy security and climate change solutions which can help to stabilize rising electricity prices. This proposed legislation, agreed to last Thursday by Senators Manchin and Schumer, includes the nuclear production tax credit we have advocated for over the last two years and would be in effect from January 2024 through 2032. This pricing floor for nuclear generation squarely addresses our need for a longer-term framework within which we can continue to own and operate our fleet with extended revenue visibility beyond the current three-year Zero Emission Certificate cycle. The bill also includes transitioning to a technology-neutral ITC/PTC beginning in 2025 for new carbon-free resources. There is a 15% corporate minimum tax on net book income that would impact us and our customers. We are analyzing all aspects of the bill, including the many provisions that will help address climate change. We are hopeful that these provisions will pass Congress. Senate Majority Leader Schumer indicated his intention to bring the bill to the Senate floor this week. There is a review process involving the Senate parliamentarian that could take a week by itself to complete. If the Senate is able to approve the measure, the House would likely return from the August recess to vote on it. In the meantime, we continue to have policy-level discussions with New Jersey state legislators who are currently in summer recess to discuss a longer duration alternative to the current Zero Emission Certificate framework for nuclear should the price floor contained in the reconciliation bill prove elusive. Now let me turn to an update of our offshore wind opportunities, which we continue to advance on a number of fronts. On the transmission partnership Coastal Wind Link, the timing of New Jersey's decision on its State Agreement Approach to transmission offshore is still expected this October. On Ocean Wind 1, development efforts are ongoing as we approach the upcoming FID date in the coming months, while the Bureau of Ocean Energy Management will continue public hearings on the draft environmental impact statement later this summer. As related to the opportunity to co-invest with Ørsted, we continue to have conversations on a variety of fronts. In fact, due diligence continues in earnest in this regard. As I step down from my CEO duties on 1st September, PSEG is well-positioned to enter its 120th year of serving New Jersey with essential energy services that help to power the economic engine of the state and advance its energy policy leadership. In my role as Executive Chair of the Board through the end of 2022, I will continue to advocate on behalf of PSEG in key policy arenas. Now, later you'll hear from Ralph A. LaRossa, and I must say he is the most well-prepared, ready CEO-elect in the history of our company. With Ralph at the helm, PSEG will further advance its Powering Progress vision of a future where people use less energy and it's cleaner, safer, and delivered more reliably than ever. PSEG's dedicated workforce will continue the public service heritage that recently earned us the 2022 Edison Award from the Edison Electric Institute, the electric utility's highest industry honor, in recognition of PSEG's infrastructure modernization programs focused on protecting our customers and communities from extreme weather conditions. I think that's our second Edison Award in the last 10 or 12 years or so. I will now turn the call over to Dan for more details on our operating results. Dan, Ralph, and I will be available for your questions. Thank you, Ralph. Good morning, everybody. As Ralph mentioned, for the second quarter of 2022, PSEG reported net income of $0.26 per share and non-GAAP operating earnings of $0.64 per share. We've provided you with information on slides nine and 11 regarding the contribution to non-GAAP operating earnings by business for the second quarter and year-to-date periods ended 30th June. Slides 10 and 12 contain waterfall charts that take you through the net changes quarter-over-quarter and first half 2022 over first half 2021 and non-GAAP operating earnings by major business. We'll start with PSE&G, whose second quarter net income was relatively flat compared to the second quarter of 2021, reflecting rate base additions from our investment programs and our gas system modernization, Energy Strong programs, and the implementation of the SIP, which was largely offset by higher O&M in the quarter, much of which was timing related. Compared to the second quarter of 2021, transmission margin was flat as growth in rate base and other positive true-up adjustments were offset by the August 2021 implementation of a new transmission formula rate, including our base return on equity moving to +9.9% the 50 basis point adder. For distribution, gas margin improved $0.02 per share over the second quarter of 2021, reflecting the scheduled recovery of investments made under GSMP and a true-up from the SIP. Electric margin rose $0.02 per share compared to the second quarter of 2021, driven by the scheduled recovery of Energy Strong II investments and the SIP. Other margin primarily related to appliance service also added $0.01 per share compared to the second quarter of 2021. O&M expense was $0.04 per share unfavorable compared with the second quarter of 2021, reflecting higher costs from the resumption of customer settlement proceedings as courts reopened, and higher electric operation expense and gas tariff work. Interest expense was $0.01 per share unfavorable, reflecting higher investment. In addition, the impact of PSEG's $500 million share repurchase program had $0.01 per share benefit on second quarter 2022 results. Flow-through taxes and other items had a net unfavorable impact of $0.01 per share compared to the second quarter of 2021, driven by the use of an annual effective tax rate that will reverse over the remainder of the year. Summer weather during the second quarter of 2022, measured by the Temperature-Humidity Index, was warmer than normal but cooler than temperatures during the second quarter of 2021. With the SIP in effect, variations in weather, positive or negative, have a limited impact on electric and gas margins while enabling the widespread adoption of PSE&G's energy efficiency program. For the trailing 12 months ended 30th June, weather normalized electric and gas sales reflected lower residential sales, both electric and gas lower by approximately 3%, and higher commercial and industrial sales, higher by 2% and 3% respectively, as more people return to work outside the home. Growth in the number of electric and gas customers remained positive by approximately 1% over the trailing twelve-month period. PSE&G invested approximately $741 million during the second quarter and approximately $1.4 billion year to date through 30th June. We are on track to execute our planned 2022 capital investment program of $2.9 billion. The 2022 capital spending program includes infrastructure upgrades to transmission and distribution facilities, as well as the continued rollout of the Clean Energy Future investments in energy efficiency, Energy Cloud and smart meters, electric vehicle charging infrastructure, and the new IAP investments that will begin this quarter. PSE&G's forecast of net income for 2022 is unchanged at $1.51 -1.56 billion. Moving on to carbon-free infrastructure and other, where we reported a net loss of $174 million or $0.35 per share for the second quarter of 2022, driven by our nuclear decommissioning trust and mark-to-market impacts and non-GAAP operating earnings of $15 million or $0.03 per share. This compares to a second quarter 2021 net loss of $486 million and non-GAAP operating earnings of $47 million, which included the results of the divested fossil and solar assets. For the second quarter of 2022, electric gross margin declined by $0.25 per share, primarily due to the sale of the 6,750 MW fossil portfolio this past February and the sale of the Solar Source portfolio in June 2021. This reduction in gross margin includes recontracting approximately 8 TWh of nuclear generation at a $3/MWh lower average price. In addition, ZECs added $0.01 per share due to the absence of the Hope Creek refueling outage in the year earlier quarter. Separately, lower margins at gas operations resulted in a $0.01 decline in gross margin versus the second quarter of 2021. Year-over-year second quarter cost comparisons were better by $0.22 per share due to the divestitures, driven by lower O&M depreciation and interest expense that will mainly benefit first half 2022 results. You recall the third and fourth quarters of 2021 reflected the Solar Source sale in June, the cessation of fossil depreciation from August onward, and the retirement of PSEG Power's outstanding debt in October. Current activity was $0.01 per share unfavorable compared with the second quarter of 2021 as a result of higher interest expense, and taxes and other were $0.01 unfavorable compared to the second quarter of last year. Nuclear generating output increased by over 3.7% to 7.5 TWh in the second quarter of 2022, reflecting the absence of a refueling outage at Hope Creek in the year-earlier quarter. The capacity factor for the nuclear fleet for the year-to-date period through 30th June was 95.1%. PSEG is forecasting generation output of 14-16 TWh for the remaining two quarters of 2022, and has hedged approximately 95%-100% of this production at an average price of $28 per MWh. For 2023, we're forecasting nuclear base load output of 30-32 TWh with 95%-100% hedged at an average price of $31 per MWh. For 2024, we're forecasting nuclear base load output of 29-31 TWh, which is 55%-60% hedged at an average price of $32 per MWh. The forecast of non-GAAP operating earnings for carbon-free infrastructure and other is unchanged at $170 -220 million. This guidance for 2022 excludes results related to the fossil sale, fossil assets that were sold in February of this year. With respect to recent financing activity and collateral postings, PSEG remains on solid financial footing. As of 30th June, the PSEG money pool, including PSEG and Power, had available liquidity, including cash on hand, of $3.7 billion. In April and May of 2022, we entered into a 364-day variable rate term loan agreement totaling $2 billion. Also in the quarter, Power entered into two $100 million letter of credit facilities expiring in April 2024 and April 2025, respectively. In July of 2022, PSEG repaid a $1.25 billion short-term loan that was due later this month. Power had net cash collateral postings of $2.5 billion at 30th June related to out-of-the-money hedge positions as energy prices rose during the second quarter of 2022. Collateral postings have increased subsequent to 30th June, and at the end of July, PSEG Power had net collateral postings of approximately $2.5 billion. Most of this collateral is associated with hedges in place through the end of 2023 and is expected to be returned to PSEG Power once it satisfies its obligations under those contracts, or sooner if market prices decline in the interim. As Ralph mentioned, we are reaffirming PSEG's 2022 non-GAAP operating earnings guidance of $3.35-3.55 per share, with regulated operations contributing approximately 90% of the total. For the full year of 2022, PSE&G's net income is forecasted at $1.51 -1.56 billion. The non-GAAP operating earnings for CFI&O is forecasted at $170 -220 million. PSEG's 2022 earnings guidance excludes financial results from the divested fossil assets and includes an additional interest expense related to recent financings. Looking beyond 2022, regarding the pension item Ralph referenced earlier, slide 19 in the webcast deck highlights some pension disclosure contained in our current 10-K annual report. We outlined several items that will influence the pension impact in 2023, including updating the discount rate and interest costs, setting the expected return on plan assets for 2023, calculating the actual gain or loss on the funds, and determining the fair value of the funds at year-end. As many of you know, we do not smooth. We apply the fair value of the fund balances to next year's expected return. As such, asset values and discount rate on 31st December will determine the impacts for next year. Lastly, we've completed our $500 million share repurchase through open market purchases and an accelerated share repurchase program in May 2022. That concludes our prepared remarks, and with this being Ralph Izzo's last earnings call as CEO, I'll give him an opportunity to make some closing remarks before taking your questions. Oh, no. Actually, Dan, I think I'll wait till later to make those comments. Sorry about that, Dan. Okay. Why don't we go right to the questions, Kyle? Yep. Thank you. Ladies and gentlemen, we will now begin the question and answer session for members of the financial community. If you have a question, please press the star and the number one on your telephone keypad. If your question has been answered and you wish to withdraw your polling request, you may do so by pressing the star and the number two. If you are on a speakerphone, please pick up your handset before entering your request. One moment please for the first question. The first question is from Shar Pourreza with Guggenheim Partners. Please proceed with your question. Hey, guys. Good morning. Hey, Shar. Hi, Shar. Ralph, let me just, if it's okay, start on the pension side. Can we maybe just get a little bit more details on the potential offsets that you're sort of thinking about implementing? I mean, everyone has estimates out there on what the drag could be. Whether it's $0.20, $0.30, $0.40 or whatever it ends up being, do you feel like you could offset that kind of a drag? And how does that potentially factor into a rate case filing in 2023? Yeah. Shar, of course, we like to think of the fact that we're always mindful of our O&M expense. You can always do more, right? There's a cost versus quality consideration that we'll have to take into account. There's no doubt we can offset some of the headwinds. We're just not gonna get into a conversation today about how easy it is to offset $0.05 versus $0.30 versus $0.20. Believe me, we've seen numbers dance around that whole range over the past six months. We're not gonna do anything that compromises the long-term service quality of the customers. We're going to look at every part of our cost structure to see what is a good short-term decision, what's a good long-term decision. Of course, as you correctly pointed out, the utility does have a rate case that starts 1 January, 2024. We view this as a short-term headwind that's not quantifiable on 2nd August and can only be quantified on 31st December. We're looking at a whole litany of potential cost reductions, and each one of them comes with some risk. We'll draw the line where we feel comfortable that the short-term risks are manageable, but we do nothing to jeopardize the long-term health of the company. Got it. I know that's not a quantitative answer to your question, but I think it's just gonna drive people crazy to every day look at what markets are doing and what congressional leader is visiting what island nation and what's that doing to equity markets and things that are simply not within our control over the next few months. Got it. Okay. That's helpful. Just, Ralph, on the strategy side with generation, sort of with the Inflation Reduction Act gaining traction, there's obviously improved visibility on nuclear, which is one of the things you mentioned would be a trigger point potentially to assess whether you want the assets within the portfolio or not. Any updates there? Just around offshore wind, there's obviously some very healthy valuation marks on the land lease values, you know, with your neighbor looking to provide another maybe data point soon. Any thoughts there on whether you would reassess value here as well? I guess how are you thinking about, you know, potential trigger points to exit the remaining generation business you have? Yeah. No, I think you hit the nail on the head in terms of important data points, Shar, coming in. Look, if the Inflation Reduction Act passes as is proposed, there are some technical amendments that we're working with bill sponsors to make sure are considered because of some language that is inconsistent with what people have told us they're trying to achieve. I mean, you basically have a nuclear energy price of $44 a megawatt hour, give or take a few pennies, as long as power prices in the market don't drop below $25, and as long as power prices in the market don't go above $44. So the nuclear assets begin, to me at least, to look a lot like a rate-based rate of return piece of infrastructure, right? With a steady and attractive cash flow that makes them economically viable. Now, there's a whole lot of wood that needs to be chopped between now and making that something that President Biden puts his pen to. Then there's the need to see what investor reaction will be if it's interpreted the same way that we interpret it, which is, as I said, essentially a very predictable earnings stream with a very solid cash flow generation that I think serves the state of New Jersey very well, serves the company very well, serves the planet very well. On offshore wind, we do have an important data point coming up, and you've alluded to it. There's another company that is in a strategic review process, and we'll carefully monitor the outcome of that while pursuing with all the due diligence efforts I spoke about before, from Coastal Wind Link to Ocean Wind 1 and some other possible opportunities with Ørsted. Look, it should be obvious to everyone. New Jersey is going to build 7.5 GW of offshore wind. I think six states are going to build 30 GW of offshore wind. That's going to have a significant impact on power markets, bill headroom, and opportunities to grow earnings per share for companies. It's something that we want to make sure we are taking the long view in terms of the role we should or shouldn't play in that. More to follow. Some of it is we'll be following in the next few months. Got it. Sorry, what was the test year for the rate case that you guys are going to file? Is it 2023? The test year is from July of 2023 to June of 2024, so it does include 2023. It gets filed on 1 January 2024. Fantastic. I appreciate it, guys. Ralph and Ralph, congrats. See you guys. Thanks, Shar. Our next question is from Nicholas Campanella with Credit Suisse. Please proceed with your question. Hey, good morning. Thanks for taking my question. You know, just acknowledging that you kind of, you know, reiterated the long-term 5%-7% EPS CAGR. You know, when we kind of take into account the mitigation strategies you're targeting, and this 5%-7% CAGR, is this a long-term CAGR or do you still have kind of visibility on 5%-7% growth in 2023? Nick, as you know, in a regulated world with test years and rate cases, one does not. Even though I guess it's almost 90% of our CapEx has some form of trackers, some of that is delayed six months, some of that's delayed one year. We've never told people that the 5%-7% CAGR is every year to be applied. It was, you take the mid-20s of the 2022 guidance, and you look at where we are in 2025, and the CAGR over that timeframe is 5%-7%. With that, we never gave what 2023 would be or what 2024 would be. Okay, thank you. Just other aspects of the IRA, just like the minimum 15% tax. Just how does that kind of play in to affecting your business, if at all? You know, what are the offsets there? Dan will talk. I think, you know, what's laid out right now, Nick, is pretty similar to what's in the Build Back Better. I think, you know, your first screen you're going to go through is the size of the earnings from the company to determine whether or not you're subject to it. Then you're going to work your way through essentially will de-emphasize things like depreciation and give you a lower rate in exchange. That trade-off, I think, as an industry, we're going to go through and take a look and see what that means from a cash flow basis. To the extent that that does kick in, you'll have a higher cash flow up front going out the door for taxes. Whatever excess you do have, that's going to be carried forward indefinitely. We will work our way through. Ultimately, to the extent that that happens, you have a deferred tax asset or probably more appropriately stated, a smaller deferred tax liability, which comes into play in the balance of your rate making as well. I think we're all exploring where this is going to go to the extent it does get across the finish line. As is, I know that there are some in Washington who had challenges against this type of an increase in the first go-round. Right now, as it's laid out, it looks pretty similar to what was in Build Back Better. Okay, great. If I could just squeeze one more in. I think folks are wondering, so I'll ask. Just any thoughts on an Analyst Day this year? Yes. Ralph, go ahead. Yeah. Yeah, Nick. This is Ralph LaRossa. Nick, right now we're planning to do Analyst Day in the first quarter of 2023. I think Ralph has laid out a bunch of mileposts that would lead us to say that there's enough moving parts that it makes sense for us to have that conversation in the first quarter of 2023. All right. Fantastic. Congrats everyone. Thanks again. Our next question is from Steve Fleishman with Wolfe Research. Please proceed with your question. Yeah. Hi, good morning. Ralph Izzo, just want to wish you the best, in case this is your last earnings call. Thanks, Steve. Been fun. First of all, just on the pension, how should we think about how the pension is maybe roughly split between regulated and non-regulated parts of PSEG? You probably have 75%-80% of it that's going towards the regulated piece, Steve. Okay. When you obviously, you don't know what returns are gonna be the next three years, but when you think about your confidence in the five to seven to 25, is most of that just because this just gets all trued up in the rate case no matter what happens with the pension performance, and you just go to normal return? Or is it that you're expecting the market to bounce back and the offsets? Is it more that this is just part of the rate case, you know, ups and downs? Think about it more the latter, Steve. We'll obviously, you're gonna have the effect of markets, both your equity and debt markets for your asset return for the assets within the trust, as well as what the discount rate's gonna look like. Ultimately, with a bigger part of the pension being on the utility side of the house, you're gonna have a regulatory aspect of it that's gonna be important as well. It's not like you're counting on the markets to come back or anything like that? Right. Right. Ralph Izzo, unfair question to end things up. You know, you've been very involved in working on this IRA law. Just curious, your best judgment on the likelihood it passes. You know, I was a little bit worried about Senator Sinema, but the tax provisions, the carried interest provisions don't seem to be a big number. I find it hard to believe that would really result in you having to worry about one more renegade senator vetoing the bill. As we head into the midterms, there's a really good chance it looks like the Senate could retain a Democratic majority. A lot of them feel like if they could get this over the finish line, that would cement that prospect. I give it a high probability of success. My bigger worry was whether or not when you reduce a $2 trillion piece of legislation to half a trillion, if you lose the folks that were part of it on the House side but, s ome of the more visible and outspoken members of the left wing of the Democratic Party have said this is a critically important climate change initiative and the most important thing we've done in this regard. I've gained a little bit of confidence there as well. I'd put its odds at pretty strong. I mean, with the Senate majority leader saying he's going to bring it to the floor on Thursday, even before the parliamentarian is likely to rule, I'd say the odds are looking quite good at this point. I had one last question I forgot about. Offshore wind transmission, the bidding for that. Is there any update on the process there? Oh, it just says that the RFP, I think, is going to come out first quarter of next year for the next round. Is that the question? Transmission. Oh, transmission. Okay. We still have an October date, Steve, for when we're supposed to be hearing back. There's been work that's been ongoing on it. I know PJM put out a piece related to some of the risks and the constructability and different elements. I know folks have had some comments back on that. Ultimately, it sits within the BPU's jurisdiction with PJM providing some technical support. October is still when we're supposed to hear back with the answers on that. Okay, great. Thank you very much. The next question is from Durgesh Chopra with Evercore ISI. Please proceed with your question. Hey, guys. Good morning. Hello. Just on the pension topic. One of the discussions that we've had with investors relates to your earned ROEs versus authorized. Obviously pension has been sort of a tailwind, you know, past few years, and it looks like it's going to be a headwind going forward. Can you comment on, Dan, just your earned versus authorized returns at the utility currently? And then how are you modeling that going forward in your 5%-7% target? I'm interested in, you know, your returns versus the authorized levels. Thank you. Yeah. I mean, I think, I guess, if you want to think about what we would anticipate on a go-forward basis, it would be earning our allowed return. Yeah, you're going to have some tailwinds, some headwinds from various items. Pension certainly is one. You're right. If I think about it in the immediate term, you've got the potential for more headwinds. If you look backwards, there's been some tailwinds. There's other items that have offsets and also come into play. I think if you want to think about what we're anticipating as we look at 25, I think it's we're anticipating earning our allowed return. Dan, I mean, 40% of rate base is transmission, which is basically true up exactly every year. Right. If I'm not mistaken, doesn't the conservation incentive program have a range where if we fall outside that range, we're either not eligible? We stick to that allowed return basically on both the D and the T side. Yeah, exactly. The way that CIP mechanism works, it has kind of bounds related to your earned return. We are pretty close to that level throughout. Got it. Thanks. I mean, I guess the forward-looking plan has you earning close to the authorized is the key takeaway here. Just, Ralph, wanted to go back to sort of the strategic review, you know, on offshore. How critical, and this is, you know, how critical is being involved with the offshore generation side to winning, you know, some of these offshore transmission opportunities? Obviously, you previously indicated like roughly, I think over $1 billion in opportunity. You know, and we'll hear about it in October. How, you know, how critical it is from a strategic standpoint to be in the generation to get some of these transmission awards, or you think those are two independent things? I think those are two independent things. I don't think it's critical at all. Dan, did you want to answer that? No, I'd just reinforce that. Great. Thanks, guys. Appreciate the update. Yes. The next question is from David Arcaro with Morgan Stanley. Please proceed with your question. Hey, good morning. Thanks so much for taking my question. Could you talk a little bit as to the hedging environment for 2024 right now for power? You know, is there any update on your ability to take advantage of the current commodity backdrop to accelerate some hedging from here? What's the liquidity looking like? Yeah, there's market liquidity out there, David. We couldn't close out the entire position in a very short term, but there's liquidity to be able to continue to do what we anticipate doing, which is staying on our ratable path. I mean, I think we've got a market environment which has higher pricing than what we have seen historically. By the same token, we've got a fairly backwardation curve. Those two items, I think are a little bit at odds with respect to where things may be going. We're moving along related to our ratable hedging program, kind of within the bounds that we set. I anticipate that general construct to remain. Got it. Thanks. That makes sense. You know, it's early, but just wondering, as you think about some of the strategic considerations over the next year or so, any early thoughts on how you'd redeploy capital, and kind of use of proceeds, as some of these strategic endeavors might unlock cash flow? Yeah, I mean, I think one of the things that is really important about the Infrastructure Advancement Program is the recognition to the credit of the Board of Public Utilities of the under-investment, or let's just say the lack of investment that has followed the last mile because there was so much to do with the higher voltage part of the system. All the good work we did in transmission and inside plant that actually resulted in our second Edison Award and just an outstanding outcome in what was a devastating flood event in Hurricane Ida. All of that work that went so well at the high voltage now needs to go towards the lower voltage part of the system. IAP was a recognition of that and getting $500+ million of the $800 million ask approved, I think shows that we're entering a new era. You have people working from home. Losing power at the home is not just annoying blinking lights on the microwave oven. It's you can't charge your car, you can't do your work, you can't call your neighbor, you can't find out where the kids are. That level of resiliency and reliability is something that customers are demanding. I think that there's a lot of opportunity in that, in that last mile that we're just beginning to explore and touch upon. As we've often said in the past, David, there's a long runway of utility investment needs, right? I mean, we still have a lot of aging infrastructure we haven't replaced. I think it was. I've lost track of what the runway is on the GSMP program at the current spend rate. It's either 20 or some odd years, I think. The number one gating function has been, is, and will be just making sure that we have customer affordability, and we're always mindful of that. In terms of opportunities to redeploy, that's on the 10 things that used to keep me awake at night, that was somewhere around number 20. Got it. Thanks so much. Really appreciate it. Our next question is from Julien Dumoulin-Smith with Bank of America. Please proceed with your question. Hey, congratulations again. Ralph and Ralph here. I'm just gonna keep going here on this theme here on the five to seven, and I want to come back to it. I know we asked you, I think even last time here, but the expectation of this persisting beyond 2023 on the five to seven, does that include the latest net pension headwinds and power mark-to-market? Where do you stand on reflecting that? Again, I get that this is moving around. I get it's rate case sensitive. What is your expectation? Related to that, if you can, what is the current asset performance year to date? You kind of implied a comment in your prepared remarks, but if you can quantify that, it'd be great. Yeah, Julien, I think it's consistent with what we've been saying. I think we're not gonna know exactly what that number is gonna be until twelve thirty-one. That is the nature of how we do our accounting, and that's where we're gonna stand. I think we're gonna have that part of the puzzle determined at that time, and given the variability we've seen in markets, you could see some movement there. I would argue that if you take a look at how we are invested, with, you know, kind of in the mid-50s on the equity side and then some real assets and the balance being on the debt side, you can kind of make a determination that we're, if you use just the benchmarks, I think you're gonna be in the right ballpark. Against that backdrop, we're gonna do exactly what Ralph talked about. We're gonna go through, we're gonna drive through all the initiatives that we've started to lay out, made determinations on some. We'll continue to make determinations on other and try to make sure we strike the right balance between running the business right and managing our way through some nearer-term headwinds. The magnitude of those, and what we see by virtue of doing the things that we've identified is gonna be what's gonna determine where we end up in 2023. It's a little bit dynamic right now, but that's gonna drive ultimately where we land within 2023, and that guidance will be forthcoming. Right. And maybe implicitly within this, you expect the utility to grow 5%-7% specifically, right? Say again. So all we- You expect the utility to grow 5%-7% specifically as well, right? We give you a rate base CAGR on the utility, right? We don't break each business separately in terms of the CAGR. But as you know, Julien, given 90% of our CapEx gets some type of contemporaneous return. The utility earnings should equal rate base minus O&M minus regulatory lag, plus any new customer growth, which is not part of the SIP. And those last three pieces are pretty small, but they can change things after the first decimal point. But we don't break out each company separately in terms of the CAGR. But these Actually, just going back to the last question very briefly here. Why only hedge five percentage points of 24 at this point? You know, is it just about the prospects on federal support here that hold you back, just to make sure? Say your question again, Julien. Just on the only adding about five percentage points on 2024 hedging. I would have thought intuitively maybe you would layer in more. Again, question is, more or less, is the federal support and uncertainty from a legislative perspective hold you back? I mean, I think frankly, it's just more consistent with respect to how we're thinking about the ratable program. We are a little bit higher than what a ratable three-year would have you have the math turn out to be. We have some of those ranges, but we want to stay within a bit of a ratable band, identifying as well the backwardation that exists within the curve. I think that we'll continue to move forward, continuing to hedge at the prices that we're seeing as we go forward. I think you'll, I wouldn't anticipate us to be outside of that ratable range in the near future. Got it. All righty. Well, congrats again to both. Izzo, I'm sure I'll catch you soon. Cheers. Thanks. The next question is from Ross Fowler with UBS. Please proceed with your question. Morning, how are you? Hey, Ross. I just wanted to go to slide 22 and make sure I understand the dynamic here between the potential, let's call it potential because that's what it is, nuclear PTC at the federal level and the ZECs in New Jersey. If I think about the 55%-60% that you've got hedged at $32/MWh out in 2024. Right now, status quo, I would add the $10 ZEC to that and get a price on that hedge piece of about $42/MWh. If I were to get the nuclear PTC, that would be somewhere between $42 and $44/MWh, and that would actually be upside to that pricing, right? Because the ZEC would go away in New Jersey, if I understand it correctly. It'd be replaced essentially by the nuclear PTC at the federal level. Have I got that right? Is that the right understanding? You got that right. Yep. Yep. Come in and out? Okay. Then the non-hedged piece would come back to the nuclear PTC price if. Well, it would basically be either the current price if it were over the $44 or would be the $42-44 at the nuclear PTC, if that's what we get. It would be whatever you hedged at plus the ZEC, if that's where we stay. Am I thinking about that correctly? Yeah, I think that's right. Ross, when you think about what they're doing in Washington essentially is a floor. To the extent that realized exceeds that, then the PTC basically just drifts away as your realized goes up. New Jersey- Right. Ends with +10, right? Right. As you look to hedge, a further piece of that, you know, following on to Julien's question here, where you go through your ratable hedging. You know, if hedging were to move up above that $32, it would be above the nuclear PTC. But if you lose the $10 ZEC, you'd have to come back to the nuclear PTC level. Is that how I should think about that? I guess I'm trying to say if you're hedged at $35, right, you'd get a credit for the PTC up to that $44 level. Yep In the federal PTC case. If you're hedged at $34, or $35, it would actually be $45 in the ZEC case. Am I thinking about that correctly? Well, the state does not have to give you $10. Right? Okay. Through 2025. Five is where we are. The crisp definition with respect to the realization that you apply in determining what the PTC is to get you to that 44 is gonna be finalized within the details, but that's our expectation. Okay. Okay, that makes sense to me. Thank you. I just wanted to make sure I was getting the ins and outs correctly as we potentially change what applies to the power side in New Jersey for the nuclear plants. Thank you very much. The next question is from Michael Lapides with Goldman Sachs. Please proceed with your question. Hey, guys. Thank you for taking my question and congratulations to both Ralph Izzo and Ralph LaRossa. My question is probably more for Dan. Dan, you talked a little bit about collateral postings and being a little over or right around $2.5 billion at the end of July. That cash, if I understand correctly, comes back over the next 18 months between now and year-end 2023. How should we think? What does that mean? Does that mean that it's simply a reduction in maybe your draws on your credit facility that shows up, so short-term debt on the balance sheet will actually go down by that amount by the time we get to 2023, end of 2023 if we leave all else constant? Yep. I think you're thinking about it exactly right, Michael. Think about it as incremental draws to fund that, and as that comes back, we would just take out the source that was used to fund it in the first place. The source that's being used to fund it is simply short-term debt or credit facility up top at the holding company level. Yep, that's exactly right. Got it. Okay. My follow-on question relates to the Inflation Reduction Act. If I were to apply that to the minimum tax requirement to 2022, how big of a cash flow impact would that be on this year using your guidance for this year? How material? I wouldn't give you, like, a single year look because you can have one-time items that would come through. If you think about this year, we closed the fossil sales, so you're gonna have some kind of disruptions in what it normally looks like. Mm-hmm. I think if I would try to do the math, and it's gonna depend year over year over the longer term, but you're gonna, you know, basically take a look at what your delta is within your accelerated depreciation, what the delta is within the rates. There's gonna be other pieces that are gonna move, but I think those are the two biggest moving pieces that you'd have. How much does that 6% buy you going from 21% to 15%, compared to the magnitude of what you're getting through the tax benefits that would be taken away that aren't in your book income? So that's the trade-off, and it's gonna vary a little bit by year depending upon what capital you're deploying and where you are within the accelerated depreciation scheme. I hate to sound really big picture here, but I'm gonna try and do it. Big deal, medium deal, small deal? I think it's probably somewhere in between. I think to the extent that you're gonna see an incremental payment, you're gonna end up having an indefinite carryforward on your credit, and basically that's gonna reduce your deferred taxes. To the extent that deferred taxes end up reducing your rate base when you have a deferred tax liability, it seems like you'd have the potential that from a regulatory perspective, you'd have an incremental rate base component on the regulatory side of the business, and that's where most of the capital is. I think it's still gotta play out and see where we end up in the final determination, but somewhere in between. Got it. Thanks, Dan. Much appreciated, guys. You were right, Michael. That was a question for Dan. The next- I think we're coming up on the hour call. We are. Do we have time for one more question? One more question. Yes. Sure. The next question is from Jeremy Tonet with JP Morgan. Please proceed with your question. Hi, good morning. Hey, Jeremy. Best of luck to Ralph and Ralph. Thank you. Just wanted to kind of pick up on the last point a little bit there, if I could, as it relates to the IRA. It passed as it is, how would this impact your financing strategy and agency thresholds if passed? Well, I think ultimately there's the potential for a lot of pieces, Jeremy, so it's kinda tough to give a really crisp answer. You've got some. If I think about just a couple of pieces that are going on, you're gonna have a PTC on nuclear that's either gonna kick in in a certain magnitude or not kick in in a certain magnitude because you're above or below that floor. You've got some cash variability there. I think you've got offshore wind, you've got some PTC potential versus ITC, and you're gonna make your trade-off there, which has a different impact for cash and for book. You've got this minimum tax item, which could be an incremental draw on cash. I think, you know, having the balance sheet strength that we have, we have the ability obviously to work through these issues. I think the incremental financings around the edges would be changing based upon the timing of some of these things when we see any potential minimum tax incremental payments reversing and the timing of any of these credits that come through. Those are the things you would look to, but I think you've got a lot of time between now and final passage to actually figure out what the actual impacts are gonna be. Got it. Just one little point there. Is it fair to say, PTC visibility for nukes would change agency view there versus a three-year ZEC? Certainly a favorable item. Magnitude of that change to be determined. I think you've you know, it like we talked about, it could be incremental dollars. It could be a floor which provides stability, which reduces risk, which the agencies would like. Either way, if I think about both the flexibility on the offshore wind as well as the PTC for nuclear, I think both of them are value additive, from the standpoint of both of these options that we have on the generation side. Got it. Thanks. Just the last one, if I could. As it relates to the IAP process, are there any takeaways from this process this time, particularly as it relates to how you might view future extensions of CEF and GSMP programs? I think less on CEF and GSMP and more on last mile. I think this was the first proposal that we put in front of the BPU to start the long runway of work that we have on the last mile, and we were very pleased with the acknowledgment of that need and the work that we have ahead of us. I think more than anything else, I would look to the IAP. If it's a signal for anything, it's the acknowledgment of the work that does need to be done on the last mile of the system on a more proactive basis rather than than just run to failure. Got it. That's helpful. I'll leave it there. Thanks. Thanks, Jeremy. Great. Look, it's been mentioned a couple of times, this is my last quarterly earnings call. It's something of a cliché, but I have to tell you, it's been just a genuine honor and privilege to be CEO of this company for 15 years. For those of you who are still on the call, or listening to the webcast, I want to extend to you and hope you'll accept my sincere thanks for all of the conversations, all of the probing questions you've offered over those years. I'm not kidding. I mean, it's served to make us a better company, and hopefully it's served to make me a better CEO. I'll genuinely miss those interactions. I cannot overemphasize the company is in great hands with the new Ralph with Dan and the entire senior team. We've worked side by side for a long time, and I have just 100% confidence that they will do a far better job than I was able to do on my own, certainly in the early stages. Now, I know that you're all eager to learn more about pensions and nuclear economics and ownership and offshore wind prospects, and you will. You will. I'm encouraging our leadership team to continue our proud tradition of taking a long-term view and gathering important information before rushing into decisions that might have short-term appeal but long-term consequences. I think just we're literally talking about weeks and maybe months before we get some really important data points that come our way. With that, it's now my pleasure to turn the call over to Ralph. Thank you, Ralph. I just have a few items I wanted to touch on. First, I want everyone to know how excited I am for our future. We are very well positioned by our Powering Progress vision, and I look forward to continuing the work that we have started. Second, I wanted to thank all of you on the call for the kind and supporting words I've received from so many of you since the announcement in April. I look forward to meeting with you throughout the remainder of 2022. Finally, I wanted to thank you, Ralph. Thank you for all you've done for this great company, our customers, and our employees. Thank you for the industry leadership and specifically your leadership on addressing climate change issues. Last but not least, I thank you for all the time and effort you've given to me personally. With that, Kyle, I think we're ready to close the call. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.