Table of Contents ability to make things better 06

ability to build on success 12 ability to boost economic vibrancy 20 ability to excel in providing green energy 30 ability to help people be their best 42 Sustain

to develop abilityWe are pleased to share with our customers, the energy communities, shareholders and employees our 2015 Sustainability Report that updates our progress company of toward this goal in the previous year. The 2015 report the future is our seventh annual Sustainability Report and allows us to reflect on our progress over the past year with a fresh, new approach that captures our vision to be a recognized leader for people providing safe, reliable, economic and greener energy. 4 about this report

About this Report About this Report These pages offer a critical look at the issues that matter most to our company and stakeholders as we strive to enhance the benefits we bring to people and reduce our environmental impact. We note progress in key areas such as strengthening vital infrastructure, creating a more resilient energy system and further improving access to the benefits of energy efficiency and renewable solar power.

We invite you to read more about our approach on the Sustainability section of our corporate website, located at: http://www.pseg.com/sustainability.

This report was primarily developed according to the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines Version 4 (G4). A complete GRI guide is available online and includes the Electric Utility Sector Supplement for reporting on industry- specific information as well as the G4 standards for reporting.

Feedback

We welcome your feedback on our performance and reporting. For additional information about this report, the Global Reporting Initiative information posted on our website or PSEG’s sustainability initiatives please contact Angela Ortiz at [email protected] or send your comments to [email protected]. message from the chairman 5 Message from the Chairman

PSEG has been building a sustainable future for Our community role remains vital. We have more than 100 years not only for ourselves but initiatives like our partnership with Sesame for the customers and communities we serve Street to help prepare families with young and for the world around us. We are not about children for emergencies, tying into our focus to stop. During the past year we made notable on safety and resiliency. Our goal is to have an progress in our ongoing efforts to grow a even greater impact in leading our communities brighter energy future responsibly, reliably and toward a sustainable future. efficiently. We completed major infrastructure Diversity and inclusion are essential to projects, bringing our customers the benefits fostering an environment that can help us of improved reliability while creating thousands improve across the board by becoming more of jobs. We moved ahead with a new effort to closely aligned with the changing faces of our improve the resiliency of our electric and gas customers and communities. I am encouraged systems against extreme storms. With our eyes by the progress we are making thanks to the on the future as well, we are proud to be a active participation of employees in a whole leader in expanding access to energy efficiency range of efforts – from the PSEG Diversity and and renewable solar power while investing on Inclusion Council to our employee resource many fronts to meet the increasing demand for groups and community volunteer activities. reliable energy from cleaner sources. Making things better is the essence of what Our experience demonstrates that it is possible we do as a company with a proud Public to power the economy, provide good jobs for Service tradition and a vision based on safe, people and protect the environment at the reliable, economic and greener energy. We are same time. Yet for all of our accomplishments, determined to continue working as hard as we we recognize there is much more to do. Our possibly can in concert with our stakeholders customers depend on our energy more than to turn our challenges into opportunities for ever at a time of unprecedented, indeed growth and development – promoting a safe, intensifying, changes in technology and the secure and prosperous future for our children climate. The status quo is not an option. and grandchildren. With the continued support We are focused on initiatives that can produce of our dedicated employees, I remain confident multiple benefits. For example, we have that we are up to the test. proposed an expanded effort to modernize our gas system in ways that would enhance safety and reliability, reduce the release of methane, Ralph Izzo a potent greenhouse gas, and support the Chairman, President and Chief Executive Officer creation of more than 500 jobs in New Jersey. Public Service Enterprise Group Incorporated We will continue to advocate for universal access to clean, efficient energy solutions. November 2015 Sustain abilityto make things better ability to make things better 7

Public Service Enterprise Group Incorporated (PSEG) is New Jersey’s largest provider of electric and gas service, serving 2.2 million electric customers and 1.8 million gas customers, approximately 70 percent of the state’s population. We also own and operate a 13,250 megawatt fleet of power plants in the Northeast and Mid-Atlantic United States. We have been recognized not only for outstanding reliability, but also for our renewable solar energy and energy efficiency efforts. We are a publicly traded (NYSE: PEG) diversified energy company among the nation’s leading utilities with approximately $35 billion in assets. Our headquarters are in Newark, New Jersey.

2 014 Results Employees 12,689

Total Assets (Dollars in Millions) $35,333

Total Revenue (Dollars in Millions) $10,886

Income for Continuing Operations (Dollars in Millions) $1,518

Earnings per Share - Diluted (Net Income) $2.99

Dividend per Share $1.48

Photo: Miguel Ulloa, meter reader-Newark district, went “above and beyond” in coming to the aid of an ill customer. 8 ability to make things better

Public Service Electric and Gas (PSE&G)

PSE&G is a franchised public utility that provides electric and gas distribution and transmission service to over 300 New Jersey communities. PSE&G’s 2,600 square mile service territory runs diagonally across New Jersey. The company serves 2.2 million electric and 1.8 million gas customers, or approximately 70% of the state’s population.

Public Service Electric and Gas ELECTRIC GAS

Customers 2.2 Million 1.8 Million

Growth of Customer Base (2010 – 2014) 0.3% 0.3%

Electric Sales and Gas Sold and Transported 40,737 GWh 2,628M Therms*

Projected Annual Load Growth (2015 – 2017)** 1.1% 0.5%

Projected Annual Load Growth Transmission (2015 – 2017) 0.9% —

Sales Mix

Residential 32% 60%

Commercial 58% 36%

Industrial 10% 4%

TRANSMISSION ELECTRIC GAS Approved Rate of Return*** 11.68% ROE 10.3% ROE 10.3% ROE

RENEWABLES AND EFFICIENCY 2009-2014 TOTAL PROGRAM APPROVED PROGRAMS PLAN Electric territory Gas territory Solar Loan Capacity 83 MW 178.5 MW

Transmission by Voltage Solar 4 All Capacity 100 MW 125 MW 138kv 345kv 161kv 500kv Energy Efficiency Annual Electric savings 206 GWh 214 GWh 230kv Energy Efficiency Annual Gas savings 6.5M Therms 7M Therms

* Gas firm only sales. ** Estmated annual growth per year, assumes normal weather. *** Some projects approved for specific ROE. ability to make things better 9

PSEG Power

PSEG Power owns a 13,250 megawatt fleet of diverse, low cost and geographically well-positioned generating assets in the Northeast and Mid-Atlantic regions of the United States. PSEG Power also has a 148 MW fleet of grid-connected solar facilities in operation or development throughout the country. Having a balanced portfolio both in terms of fuel mix and market segment (base load, load following and peaking) helps us generate the power that our customers need, when they need it.

Power Plant Fuel Diversity Total MW: 13,359 Locations 1% 9% 27%

44% 1% 18%

ISO New England New York ISO l Coal l Oil l Nuclear l Solar

BETHLEHEM ENERGY CENTER l Gas l Pumped Storage (ALBANY) BRIDGEPORT

NEW HAVEN Energy Produced Total GWh: 54,962 HUDSON BERGEN

KEARNY KEYSTONE YARDS CREEK ESSEX 14% CONEMAUGH MERCER LINDEN

SEWAREN 53% PEACH BOTTOM 31% EDISON

BURLINGTON HOPE CREEK NATIONAL PARK 2% SALEM PJM l Coal l Pumped l Nuclear Storage/Oil l Gas 10 ability to make things better

PSEG Long Island PSEG recognizes that improvement and top performance are not self-sustaining and must PSEG Long Island operates the electric be proactively managed on a continuing basis. transmission and distribution system of the The company accomplishes this by: Long Island Power Authority (LIPA) serving • Defining management accountability for approximately 1.1 million customers in Nassau governance, oversight and performance; and Suffolk counties and the Rockaway • Engaging employees – recognizing that peninsula of Queens, New York. PSEG Long people are the key to executing our strategy; Island is now in its second year, having begun operations January 1, 2014 under a • Providing disciplined implementation of a 12-year agreement. In January 2015 PSEG shared management model framework which Power began providing fuel procurement and drives each line of business and supporting power management services for LIPA under a organization units to top performance levels separate agreement. and ensures continuous improvement; This year • Measuring results, using tools such as the Balanced Scorecard through which, marks PSEG’s PSEG Vision, Strategy, Scorecard Measures and against which, the organization’s th performance can be assessed against This year marks PSEG’s 113th year as a external benchmarks and business goals; company, a testament of our sustainability • Realizing synergies, identifying and to our customers, our shareholders and the implementing best practices to optimize communities we serve. PSEG’s vision is to be organizational scale, resources and 113year as a company, a recognized leader for People providing Safe, improvement efforts; a testament of our reliable, Economic and Greener energy – today • Focusing on identifying and satisfying sustainability to and for our next 113 years – a vision that is our customers, our customer needs and objectives; consistent with who we are and what we have shareholders and the • Providing a platform for efficient knowledge been throughout our long history. communities we serve. transfer; and To achieve this vision and ensure the long-term • Minimizing the impact of personnel changes sustainability of the Company, the efforts of by providing predictable, consistent guidelines, each operating company align with PSEG’s reflecting the strong values and high business strategy based on three pillars: standards on which our business is based. operational excellence, financial strength, and disciplined investment. A drive toward continuous improvement is a common thread of our efforts.

The Balanced Scorecard is our tool to translate our strategy into tactical measures of success. We establish stretch goals on metrics related to operations, people, green energy, and safe and reliable service, measuring ourselves against top quartile performers in each category. We use our Balanced Scorecard to keep a clear focus on our strategy and the role every employee plays in achieving our goals. ability to make things better 11 Our Vision To be a recognized leader for: People providing Safe, reliable, Economic and Greener energy Our Values accountability continuous improvement customer focus diversity and inclusion ethics and integrity respect safety Sustain abilityto build on success ability to build on success 13

For more than a hundred years we have been operating our business with a focus on sustainability. The yearly release of our sustainability report allows us to share progress with our diverse range of stakeholders, while also discussing challenges on the road ahead. Change is a constant in our industry – and world.

A key challenge going forward is the need for Leading from the Top a resilient infrastructure to improve society’s ability to withstand and recover from extreme Sustainability begins with our leadership. PSEG has over storms. At the same time, we believe it is PSEG’s Executive Officer Group is critically important to build a future in which responsible for providing sound leadership energy efficiency is universally available to and management that contributes to the help safeguard our planet while keeping company’s long-term success and sets the energy as reliable and affordable as possible. right example for employees. Representing a wide range of experience, our officers take an Our focus on sustainability at PSEG reflects active leadership role not only with regard to a deep recognition that our continued ability our business goals, but also on environmental thousand dedicated to prosper as a business depends on helping issues and community engagement. 12 others prosper, too. Thus, we emphasize the employees. importance of defining success not only by the PSEG established a corporate Environmental, bottom line but also by the environmental and Health and Safety Policy in 1996. This policy, social dimensions of performance. We strive reviewed and approved by the PSEG Board to be both systematic and comprehensive in of Directors, reflects the principles by which our approach to sustainability-related issues. PSEG operates in eight areas: associate Doing so helps us to remain true to our health and safety; nuclear safety; climate most important commitments and to further change; environmental compliance; risk improve performance. reduction; pollution prevention and resource conservation; open communication; and continuous improvement. How We Manage Sustainability THE PSEG EH&S POLICY IS AVAILABLE ONLINE AT WWW.PSEG. COM/INFO/ENVIRONMENT/HEALTH.JSP Employees across the entire company at all levels are involved with managing sustainability. We pride ourselves on being a company with strong leadership, great employees and proven processes to manage sustainability throughout the business.

Photo: PSEG Long Island tester Amanda Mitchell wears the proper safety gear as she services both residential and commercial meters. 14 ability to build on success

Our external blog, Energize, provides a new forum to communicate company news and convey our executives’ thought leadership.

Corporate Sustainability Goals to a variety of issues we must manage. It includes input from investors, customers, local With all of our sustainability efforts we set communities, NGOs, employees and other sights on supporting PSEG’s strategic business stakeholders to ensure alignment between our model as well as our strategic objectives. The sustainability goals and our business objectives. sustainability goals we have set for ourselves reflect the alignment between our sustainability This materiality matrix framework enables us approach and the way we conduct our business. to map out a clear path through the variety of environmental, financial and social challenges GOAL 1: To be a clear leader in reliability and we face. The following are the most important safety, customer service and providing clean issues to our stakeholders and business based energy. on our materiality analysis:

GOAL 2: To be recognized as a great place • Clean Air and Climate Change to work where engaged employees are our • Diversity & Inclusion differentiator. • Employee Engagement

GOAL 3: To be a thought-leader on energy and • Energy Efficiency environmental issues. • Financial Performance • Reliability and Resiliency GOAL 4: To be a strong partner of all the communities in which we operate, in keeping • Renewable Energy with our role for over 100 years in promoting a • Stakeholder Engagement more sustainable future. • Talent Attraction and Retention

We develop goals and management processes Our Material Issues with regard to these issues, which are For this report we focus our efforts on described in more detail throughout the report. the issues that are most material to our business, the communities we serve and our Awards and Recognition environmental impacts. We regularly conduct a materiality analysis that assesses risks and We are proud of the external recognition that opportunities to help identify PSEG’s most our sustainability commitment, leadership, important issues. Our process allows us to and compliance receives. Several independent weigh and quantify the degree of importance bodies recognized PSEG’s achievements in that our business and stakeholders give sustainability, investment in our people and ability to build on success 15 economic accomplishments in 2014, continuing • PSE&G received a Star of Energy Efficiency to the present. These awards and honors testify Award from the Alliance to Save Energy to our employees’ continued dedication and to for its efforts to make New Jersey hospitals the importance we place on being a long-term and apartment buildings more energy efficient. leader in economic, social and environmental 2014 performance. We are pleased to be recognized for our commitment to pursue responsible • PSE&G received the prestigious policies while creating jobs and fostering ReliabilityOne Award for the Mid-Atlantic economic development. region for the 13th consecutive year from PA Consulting, a national industry benchmarking PSEG’s 2014-2015 awards, recognition and group. PSE&G was also named America’s honors include: Most Reliable Electric Utility five out of the past 10 years. 2015 • PSEG received the Employer of the •  PSE&G is one of the top ten utilities in Year Award from the Joint Disability Issues the nation for cumulative solar megawatts PSE&G Committee of the Newark and Essex County according to a 2014 Solar Electric Power was named Workforce Investment Boards and the Newark Association (SEPA) survey. America’s Division of Vocational Rehabilitation Services Most Reliable • PSEG ranked 40th on the 2015 “Top 50 (DVRS). The company was recognized for its Electric Employers” in Equal Opportunity Magazine. efforts to improve employment opportunities Utility The readers of Equal Opportunity magazine for individuals with disabilities. selected the top companies in the country • PSEG was named to the Dow Jones for which they would most prefer to work Sustainability North America Index or believe would provide a positive working for the seventh consecutive year. The environment for members of minority groups. Dow Jones Sustainability Indices recognize This list is based on an annual reader survey companies that are best in class among mailed each year to randomly selected readers their peers in meeting certain economic, of Equal Opportunity magazine. environmental and social criteria. PSEG’s • PSEG was named one of the 25 Champions 2015 Sustainability Report highlights of Good Works by The Commerce and accomplishments and outlines challenges the Industry Association of New Jersey for its company faces in its quest to remain a leader volunteer work building playgrounds with out of the past 10 years. in providing safe, reliable, economic and KaBoom in Moonachie and Little Ferry, NJ. greener energy. 5 • PSE&G ranks highest in customer satisfaction • PSEG Long Island received the 2014 with business natural gas service and ENERGY STAR® Partner of the Year — large business electric service in the East, Sustained Excellence Award from the according to J.D. Power. This is the first time U.S. Environmental Protection Agency (EPA), in PSE&G’s history that the company achieved for its commitment and dedication to energy this distinction for both electric and gas efficiency and the ENERGY STAR program. service in the same year. • PSEG was named to the 2014 FORTUNE • PSEG moved to 23rd on the 2015 top 100 List of Most Admired Companies, ranking list of military-friendly employers, by G.I. fourth among electric and gas companies in Jobs and Military Spouse magazines. The the United States. company ranked 29th on the list in 2014. 16 ability to build on success

2014 Corporate Highlights achieving customer satisfaction scores showing the biggest improvement of any PSEG has continued to make progress – with utility in the nation. our dedicated employees again contributing in • And, we continued to demonstrate that countless ways to our efforts. utilities can be instrumental in expanding To cite some of the year’s highlights: access to the benefits of energy efficiency and solar energy in ways that promote a • We added to the reputation we have built sustainable future. for highly reliable service, as evidenced by PSE&G being recognized as the most reliable In 2014, we provided our shareholders with electric utility in its region for the 13th year attractive returns – in keeping with a long- in a row. established PSEG objective. We completed • We embarked on a major new effort to 2014 with earnings of $2.99 per share, improve the resiliency of our electric and gas compared to $2.45 in the prior year. systems against extreme storms. Our strong financial position has allowed us to • We completed several major transmission meaningfully increase our dividend. In 2014 projects on time and on budget as we increased our annual dividend from $1.44 we continued to implement our large per share to $1.48 per share, and in February transmission investment program which is 2015, we raised our quarterly dividend by 5.4 essentially rewiring New Jersey – supporting percent, bringing our indicative annual dividend reliable service long into the future, giving an rate to $1.56 per share. This was the 11th important boost to New Jersey’s economy increase in our dividend in the last 12 years. and creating thousands of jobs. • Our fossil fueled power plants increased PSEG has a long history of paying dividends. We year-over-year electricity output and our see the potential for our shareholders to continue combined cycle fleet produced at record to benefit from consistent and sustainable levels. Our Linden 1 and Bergen 1 & 2 growth in our dividend, given our business mix, units also set generation records. And, continued positive cash flow from our generation given the overriding importance of safety, business and our strong balance sheet. we are especially proud that for the second We are determined to maintain a strong focus consecutive year, our fossil fleet achieved a on operational excellence, financial strength safety performance in the top ten percent of and disciplined investment. These pillars of its industry. our strategy will remain basic to how we run • We further enhanced our financial strength, the business. Our goal is to sustain a cycle with a balance sheet that has remained one of continuously improving performance, in of the strongest in our industry. keeping with our long-standing commitments • We again delivered substantial savings to to our customers, our employees and not least, our customers and low-cost fuel to our our shareholders. power plants through the access we enjoy to shale gas. • We had a terrific first year managing the electric system of the Long Island Power Authority – with our PSEG Long Island team ability to build on success 17

Key Performance Indicators at a Glance

PSEG continues to measure our sustainability key performance indicators, as we strive to advance on our path as a recognized leader for People providing Safe, reliable, Economic and Greener energy. Most of these metrics are tracked monthly in our Balanced Scorecard and therefore are linked to the performance appraisal of our employees, including senior management. Key Performance Indicators

2011 2012 2013 2014

PEOPLE

OSHA Recordable Case Incidence Rate 1.51 1.25 1.01 1.57

Lost Time Cases 58 53 29 72

OSHA Recordable Cases 160 133 105 202

Fatalities 0 0 0 0

Lost Time Case Rate 0.55 0.5 0.28 0.56

SAFE AND RELIABLE

Transmission Reliability (%) 99.973 99.995 99.997 100

SAIFI (System Average Interruption 0.78 0.67 0.74 0.63 Frequency Index)

GREEN

Environmental Violations (2 year average) 7.5 7.0 7.0 5.0*

Reportable Spills (federal level) 51 115** 47 55*

GHG Direct (metric tons CO2e) 17.033,103 13,929,406 14,955,608 15,460,147

GHG Indirect (metric tons CO2e) 1,219,662 1.103,174 1,262,778 1,137,326

Nox (metric tons) 12,211 10,001 10,479 11,062

Sox (metric tons) 14,647 9,155 9,134 9,655

Mercury (metric tons) 0.063 0.0611 0.0674 0.0671

* This includes PSEG LI for the first time **Approximately 80 federal reportable spills occurred as a result of Super Storm Sandy. 18 ability to build on success

Engaging Our Stakeholders PSEG Stakeholder Engagement Council

Building strong relationships with our PSEG’s Stakeholder Engagement Council is stakeholders is essential to maintain a high led by an executive from our External Affairs level of trust, understanding and service. We organization and includes representatives from engage with stakeholders in various ways that different parts of the company. The role of the accommodate their needs and find that we Council is to consider key issues the company learn a lot in the process. Connecting with our is facing (short and long term), consider at the customers, investors, employees, communities, same time the interests and concerns of our government officials, regulators and suppliers key stakeholder groups and devise engagement helps us run a better business and meet strategies to find common denominators and and often exceed environmental and social design mutually beneficial strategies. expectations. Ways We Engage Specific Stakeholders Some of our stakeholder interests overlap Accountability is one of PSEG’s most important and some compete, so we strive to take a core values, informing our efforts to build pro-active approach that reaches out to: even stronger stakeholder relationships. We • Educate stakeholders on our operations. recognize that our credibility ultimately depends • Support and engage in local community not on words but deeds – on living up to our activities, initiatives, and betterment commitments and taking responsibility for our programs. actions and results. • Respond openly and immediately to The importance of maintaining good, stakeholder concerns about construction, transparent lines of communication with our design, operation and environmental stakeholders cannot be overemphasized. compliance of our operations. Our experience is that different stakeholder • Give stakeholders a voice in decisions that groups prefer to communicate in different could impact them. ways. We provide stakeholders numerous Regional Public Affairs managers are an channels tailored to the needs of each group, important face of stakeholder engagement to communicate interests and especially to in each region of our utility service area and resolve conflicts or concerns. nuclear emergency planning zones. They This interactive process helps us improve as a are trained and experienced in addressing socially responsible company. We incorporate public concerns and facilitating public stakeholder feedback into our business hearings for stakeholders. They manage each planning with an eye toward creating shared step of stakeholder engagement and make wins with the communities we serve. critical decisions to continually improve our stakeholder engagement practices. ability to build on success 19 Communications Tools

Customers Investors

PSE&G INVESTOR RELATIONS WEBSITE: HTTP://WWW.PSEG.COM/INFO/ PSE&G CUSTOMER SERVICE WEBSITES AND PHONE LINE (CONTACT US): INVESTORS/INDEX.JSP HTTP://WWW.PSEG.COM/INFO/CONTACT.JSP INVESTORS FACTBOOK: HTTP://INVESTOR.PSEG.COM/SITES/PSEG. CUSTOMER SERVICE CENTER LOCATIONS: HTTP://PSEG.COM/HOME/ INVESTORHQ.BUSINESSWIRE.COM/FILES/DOC_LIBRARY/FILE/FACTBOOK.PDF CUSTOMER_SERVICE/BILL/CENTERS.JSP 2014 ANNUAL REPORT WEBSITE: HTTP://INVESTOR.PSEG.COM/SITES/ UTILITY OUTAGE INFORMATION: PSEG.INVESTORHQ.BUSINESSWIRE.COM/FILES/DOC_LIBRARY/FILE/PSEG- • WEBSITE: HTTP://WWW.PSEG.COM/HOME/CUSTOMER_SERVICE/ AR2014.PDF OUTAGE_INFO/INDEX.JSP • REAL-TIME MAP: HTTP://WWW.PSEG.COM/OUTAGECENTER/INDEX.JSP News and Media ELECTRIC RELIABILITY PROJECTS WEBSITE: HTTP://WWW.PSEG.COM/ FAMILY/PSEANDG/POWERLINE/RELIABILITY_PROJECTS/INDEX.JSP Social Media PSEG Long Island SOCIAL MEDIA WEBSITE: HTTP://WWW.PSEG.COM/INFO/MEDIA/SOCIAL/ CUSTOMER SERVICE WEBSITES AND PHONE LINE (CONTACT US): INDEX.JSP HTTPS://WWW.PSEGLINY.COM/PAGE.CFM/HOME/CUSTOMERSERVICE/ YOUTUBE CHANNEL: HTTP://WWW.YOUTUBE.COM/PSEGVIDEO CONTACTUS TWITTER CHANNELS: CUSTOMER SERVICE CENTER LOCATIONS: HTTPS://WWW.PSEGLINY.COM/ PAGE.CFM/ACCOUNT/PAYMENT/CUSTOMERSERVICECENTERS • FOLLOW @PSEGDELIVERS FOR THE LATEST CUSTOMER SERVICE INNOVATIONS AND STORM UPDATES. OUTAGE INFORMATION: • TWITTER: HTTP://TWITTER.COM/#!/PSEGDELIVERS • FOLLOW @PSEGNEWS FOR THE LATEST NEWS, HAPPENINGS, JOB • WEBSITE: HTTPS://WWW.PSEGLINY.COM/C.CFM/OUTAGE OPPORTUNITIES AND THE PEOPLE AND ORGANIZATIONS THAT SUPPORT THE COMMUNITIES WE SERVE. ELECTRIC RELIABILITY IMPROVEMENT PROJECTS: HTTPS:// WWW.PSEGLINY.COM/PAGE.CFM/ABOUTUS/CURRENTINITIATIVES/ • FOLLOW @PSEGLI TO CONNECT WITH PSEG LONG ISLAND THE UTILITY RELIABILITYPROJECTS THAT PROVIDES ELECTRICAL SERVICE TO LONG ISLAND AND THE ROCKAWAYS. Communities FACEBOOK: • OUR CORPORATE FACEBOOK PAGE FEATURES NEWS, ENERGY- SAVING AND SAFETY TIPS, STORM UPDATES, JOB POSTINGS, POLICY CORPORATE CITIZENSHIP WEBSITE: HTTPS://WWW.PSEG.COM/INFO/ DISCUSSIONS AND MORE. COMMUNITY/NEW_SITE/INDEX.JSP • PSEG LONG ISLAND’S FACEBOOK PAGE FOCUSES ON DIVERSITY AND INCLUSION WEBSITE: HTTPS://WWW.PSEG.COM/INFO/ CONVERSATIONS ABOUT OUR NEW ELECTRIC COMPANY WHICH SERVES CAREERS/DIVERSITY.JSP LONG ISLAND AND THE ROCKAWAYS. PSEG FOUNDATION: HTTPS://WWW.PSEG.COM/INFO/COMMUNITY/NEW_ CORPORATE BLOG: HTTP://ENERGIZEPSEG.COM/ SITE/OUR_GIVING/GUIDELINES.JSP PRESS RELEASES AND MEDIA RELATIONS WEBSITE: HTTP://PSEG. ESTUARY ENHANCEMENT PROGRAM WEBSITE: HTTP://WWW.PSEG.COM/ COM/INFO/MEDIA/NEWS.JSP INFO/ENVIRONMENT/ESTUARY.JSP ENERGY AND ENVIRONMENTAL RESOURCE CENTER (EERC) WEBSITE AND FACEBOOK ACCOUNT: • WEBSITE: HTTP://WWW.PSEG.COM/FAMILY/POWER/EERC/INDEX.JSP • FACEBOOK: HTTP://WWW.FACEBOOK.COM/PSEG.EERC LONG ISLAND COMMUNITY PARTNERSHIPS: HTTPS://WWW.PSEGLINY. COM/PAGE.CFM/COMMUNITY Sustain abilityto boost economic vibrancy ability to boost economic vibrancy 21

Affordable and reliable energy is fundamental to the economic prosperity of the communities we serve. PSEG is proud to be a strong contributor to our economy by creating jobs, paying wages and supporting local suppliers. Yet it’s not only the scale of our economic activity that makes a difference, but our ability to deliver results.

We have achieved a best-in-class utility growth financial support to retirees and survivors. The rate by executing well on our investment businesses and suppliers we work with provide program, which is closely aligned with our additional jobs in the region. Several of our Our forecast customers’ needs and public policy goals. facilities are the primary economic engines includes We are further strengthening our stakeholder of their communities, including our Salem more than relationships by investing heavily in grid and Hope Creek nuclear facilities, the largest enhancements, improving the efficiency and employer in Salem County, New Jersey, with seamlessness of the transmission system, over 1,500 employees. expanding energy efficiency programs, and greening our generation fleet. Our record of Investments Fueling delivering on our commitments and realizing Economic Growth growth provides a strong platform on which to build for the future. Economic development is part and parcel of what we do as an energy company that invests billion dollars in We recognize that to continue contributing on many levels in efforts that strengthen 15capital spending over to the economy to the extent that we do, we communities and promote prosperity. Our the next 5 years. need to remain financially strong ourselves forecast includes more than $15 billion in despite facing external challenges such as capital spending over the next 5 years, most extreme weather, difficult energy markets of which is dedicated to vital infrastructure and uncertainty about the direction of energy improvements. As we continue to invest in our policy. We manage these challenges through system, our efforts are having an increasingly our ongoing focus on operational excellence, powerful impact – creating thousands of jobs, financial strength and disciplined investment. providing business for many other firms and We believe that this strategy will continue to contributing to the economy’s long-term health serve us well while positioning us to meet our and competitiveness. enduring commitments to our stakeholders. PSE&G’s transmission investment program is a case in point. The Bloustein School of Creating Business and Jobs in the communities We Serve Planning & Public Policy at Rutgers University evaluated the economic impact of seven of our PSEG’s role as an economic engine has large-scale transmission projects designed to continued to grow from year to year. We improve the flow of electricity across the state directly employ more than 12,000 people – and found that these efforts would not only and spend $1 billion annually on wages. In produce a more reliable electric system, but Photo: Tony Salokas, 5th division lineman, started at PSE&G in addition, we provide another $150 million in also create 6,000 jobs a year over 10 years. February 2015. 22 ability to boost economic vibrancy

A spirit of caring is at the heart of PSE&G’s strong customer service tradition, and is exemplified by dedicated employees like Shikia Washington, a PSE&G credit and collections representative.

Local tax payments and the funding of and do so with a strong focus on continuous charitable organizations also fuel economic improvement. We measure customer perception development by contributing to local services. of our service using a Customer Perception Annually we spend approximately $375 million Index (CPI) as well as transactional surveys, and on state and local taxes, which help fund roads the results are used to benchmark a database and services such as job training to grow the of approximately 100 companies. Employees economy. The PSEG Foundation funds another receive feedback on how we can improve our $7 million through its philanthropic activities. service based on the results.

MORE ON OUR ECONOMIC DEVELOPMENT AND EMPLOYMENT IMPACT IN THE REGION IS AVAILABLE ONLINE AT: HTTP://WWW. Reliability is a cornerstone of excellence in our PSEG.COM/INFO/MEDIA/IMPACTNJ.JSP industry. In 2014, PSE&G was named the Mid- Atlantic region’s most reliable electric utility for Putting Customers First the 13th consecutive year by PA Consulting, an industry benchmarking group. While proud PSEG strives for top quartile performance in of this recognition, we are even prouder of our providing safe, reliable, economic and greener employees, who have a strong tradition of being energy. We ensure customer satisfaction with there for our customers – day in and out – and a focus on safe, reliable service at costs that in storms and emergencies. we try to keep as low as possible. In doing so, we must constantly manage costs to maximize PSE&G performs well in customer satisfaction value to our customers and shareholders alike. when compared to other utilities. In recent surveys, J.D. Power ranked PSE&G highest Customer Service in gas business service customer satisfaction and the highest in electric service business PSE&G is proud of its strong customer service customer satisfaction among large utilities in tradition. Each year we set quantitative targets the eastern United States. These outstanding for customer satisfaction as one of our top goals customer satisfaction scores can be directly tied to a number of targeted improvements we ability to boost economic vibrancy 23 made for business customers. We established the few remaining utility companies that offers a Business Solutions Center and enhanced a customers in-person assistance through 16 range of customer-friendly tools – including urban walk-in Customer Service Centers. an online portal to programs, products and services designed for the business community. Delivering Savings to Customers We find a personal touch goes a long way as with Low-Cost Natural Gas well. Our executives and customer account representatives meet with customers one-on- In addition to enjoying the benefits of reliability, one to better understand their needs and help PSE&G’s residential customers have reaped resolve specific issues. substantial savings from low-cost natural gas supplies and the astute management of our PSE&G’s focus on improving the resiliency of natural gas transportation and storage assets. the grid and increasing operational efficiency Since 2009, reductions in the cost of natural has also translated into strong performance gas supply have lowered residential gas bills in a number of areas of customer satisfaction, by about 47 percent – savings the typical PSEG has including price and billing and payment, among customer about $792 annually. Our electric more than others. We have further sharpened this focus by customers also benefit from low-cost natural making system enhancements targeted to the gas supplies, given the role of natural gas as a needs of hospitals, water treatment plants and major fuel for electricity production. other critical facilities that serve the public. Although we do our best to keep bills low, we Using New Tools to Build Even Stronger know some customers will still struggle to heat 18 5 Customer Relationships thousand followers their homes. We provide simple, yet effective, on Twitter, Facebook Increasingly, our customers are online – and energy conservation tips to lower usage and and LinkedIn. we are, too, in our ongoing efforts to better bills. We also partner with state and federal serve them. Based on lessons learned from agencies to spread the word about a variety of our experience during Superstorm Sandy, we payment assistance programs for low-income have increased messaging across all channels customers, as well as for those customers who to better communicate with customers before, may have larger paychecks but have fallen on during and after storms. PSE&G is the number hard times. one utility on Twitter, with more than 80,000 The availability of low-cost domestic gas followers. Our mobile web includes a range reserves will continue to have important of capabilities for customers to receive text implications. With gas prices low, we believe alerts about their bills and power outages. this is an ideal time to modernize our system And we are using tools like Facebook to alert – replacing older pipes and making other customers about project work being done in critical improvements that would enhance their communities. safety and reliability while keeping energy as To provide our customers even more access affordable as possible. to our customer service team, we are one of 24 ability to boost economic vibrancy

Making a Strong System All in all, more than 60 percent of PSE&G’s Even Stronger $11 billion, 5-year capital investment program is related to transmission. The tools in our kit We have been investing in essential may have changed over the last 100 years, infrastructure for more than 100 years. While but reliability remains fundamental. We are older parts of our system have served their determined to support the high standard of purpose, a heightened focus on replacing aging reliable service that is our company’s hallmark. infrastructure is critical going forward. Improving Resiliency Two huge events crystallized the need to modernize our infrastructure: the blackout of Also at PSE&G, we are moving ahead with our 2003 affecting 60 million people and almost $1.2 billion Energy Strong program to harden a decade later, Superstorm Sandy, which and improve the resiliency of our system to knocked out power to 90 percent of our extreme weather. We are on track to complete customers and caused horrendous devastation the replacement of 250 miles of low-pressure across New Jersey, New York and the wider cast iron gas mains in or near flood-prone region. Nor have we forgotten that only a year areas, increasing the reliability of gas service. before Sandy, New Jersey was also hit hard by We have also begun work to harden, raise or Hurricane Irene and a rare October snowstorm. in some cases relocate 29 substations that were flooded during Superstorm Sandy or Our infrastructure investments are driven by Hurricane Irene. two R’s – reliability and resiliency. In 2014, we completed construction of the $390 million The importance of improving resiliency is North Central reliability line and placed into increasingly recognized around the country. service the $400 million Burlington-Camden PSEG Long Island recently received approval for line, as well. These two 230-kilovolt projects a federally funded three-year program of grid will make an important contribution to system reinforcements. This $729 million grant will be reliability across New Jersey. In 2015, we invested in projects to upgrade or replace more marked a significant milestone with the than 1,000 miles of mainline circuit facilities, completion of the new 500-kilovolt Susquehanna elevate and protect flood-prone substations - Roseland power line, a major grid upgrade that and install innovative automation that isolates improves the interstate flow of power to support faults, all of which will allow us to limit the safe, reliable electric service for millions of number of customers impacted by an outage people throughout the region. and significantly speed their restoration if power is lost. Helicopters, The new Susquehanna - Roseland power transporting crews line modernizes a vital transmission artery Modernizing Our Gas System first built in the 1920s by construction crews and materials, Much more needs to be done to proactively using teams of horses, mules and oxen to aid in building modernize our network. PSE&G’s gas pull wagons loaded with heavy equipment new power lines distribution system currently operates and over barely existing roads. Now, instead of maintains over 4,800 miles of cast iron and and preserving using mules, we have helicopters transporting unprotected steel mains – the largest such pristine land. equipment and workers to aid construction in system in any single utility. In 2015, we remote areas while also helping limit impacts proposed a new Gas System Modernization on pristine land. ability to boost economic vibrancy 25

Program to replace old cast iron and steel Optimizing Value equipment with strong, durable plastic piping. This effort would support a safe, clean and Reliability at PSEG is also about having power reliable gas system well into the future while plants that are available to run as needed creating 500 jobs in New Jersey. With today’s to help meet the energy needs of millions lower gas bills, we believe it makes sense to of people. Our generation fleet is not only make these investments now. one of the largest in the Northeastern United States, but also one of the most diverse by Modernizing our gas system in this way will fuel mix and dispatch capability. This diversity involve a host of improvements, including the improves our ability to meet market demand installation of excess flow valve safety devices, around the clock from season to season, as the reduction of methane emissions by the was evident during the last two harsh winters, equivalent of 122,000 tons of carbon dioxide as well as throughout the summer. Some of per year, and further benefits from a higher- our generating units have dual-fuel capability, pressure system that allows the use of high- providing us with additional flexibility in efficiency appliances by customers. responding to various market conditions.

Our energy is increasingly important to support We have also been able to get more out of our today’s busy lifestyles and a competitive existing generation assets through various plant economy. We will continue moving ahead with a improvements. For example, we have installed wide range of infrastructure improvements that advanced gas path (AGP) technology at our are essential to meet our customers’ evolving Linden and Bergen combined-cycle units, needs and help make the future event brighter making these units more fuel efficient and for all we serve. increasing their capacity. Similar improvements are scheduled to be made from 2017 through 2019 at our Bethlehem Energy Center near

PSE&G’s Gas System ModernizationLorem ipsum dolor sit amet, Programconsectetur is designed to accelerateadipiscing the elit. replacement of older gas mains and service lines with new plastic pipes, supporting a safe, clean, reliable gas system well into the future.

26 ability to boost economic vibrancy

Customers like Jane and Jack Campion of Bayonne, New Jersey, are reaping benefits from the access PSE&G enjoys to low- cost gas supplies in the region.

Albany, New York. In total, these upgrades are We are also updating our Sewaren generating expected to produce a net power increase of station as part of our growth strategy to meet 152 megawatts – the equivalent of building a the increasing demand for electricity from new, three-unit peaking station. Through other cleaner sources. The new power plant, Sewaren economic investments, we have increased the 7, will be a highly efficient, clean dual-fuel 540 capacity of our existing nuclear units as well. MW combined-cycle facility, to be built on the site of our existing Sewaren generation station In addition, PSEG Power recently announced in Woodbridge, New Jersey. By repowering an plans to construct and operate a new, clean existing generation site, PSEG is able to take natural gas-fired 755 megawatt combined- advantage of existing infrastructure, replacing cycle unit at the Keys Energy Center in older, less efficient generating units with Maryland. The Keys facility will be equipped cleaner more efficient technology. The new with state-of-the-art emissions control plant is expected to generate about 350 jobs technology, including: during its two-year construction phase and will • A combination of low nitrogen oxide (NOx) employ up to 28 full-time workers. combustors and a selective catalytic reduction (SCR) system to reduce NOx The new Keys Energy Center and Sewaren 7 emissions; projects represent a total investment of $1.5 billion and reflect our vision of America’s energy • An oxidation catalyst to reduce carbon future – cleaner, affordable and efficient. monoxide emissions; and When completed, the plants will have a total • Air-cooled condensers to continuously generating capacity of 1,300 megawatts, recycle water for cooling purposes. enough power to meet the needs of more than one million homes. ability to boost economic vibrancy 27

Our investments in clean, efficient power Working with Suppliers facilities testify to our strong environmental commitment, yet also make an important We value suppliers who share our commitment contribution, we believe, to our competitive to reliability, quality and integrity. We have strong position. Older generating units across the relationships with our suppliers and depend on country are expected to retire in light of them to meet the highest standards of service. increasingly strict environmental requirements. Working with as many suppliers as we do is We are ahead of many of our peers in having a complex process that requires thoughtful already made extensive environmental and meticulous management. We expect our improvements across our fleet. We will suppliers to meet our ethical standards and continue to support market rules to ensure have a procurement and supplier management fair competition, provide proper incentives and process that conforms to the highest standards protect the interests of consumers. in the industry.

PSEG’s management practices and code of Sound Financial Performance The new business conduct, our Standards of Integrity, Sewaren 7 Financial strength enhances our ability to are woven into everything we do, including our plant is sustain superb operations, deploy capital relationships with suppliers. When considered expected to effectively and deliver value to our customers for a new contract of any type, suppliers go generate and shareholders, while also making through a rigorous pre-qualification review. about meaningful contributions to our communities. After contract award, the performance of key One sign of our financial strength is our suppliers is monitored by PSEG Procurement dividend. PSEG has one of the longest records in concert with the Corporate Health and of paying dividends in corporate America, Safety organization. In addition, a third-party 350 extending for almost 110 years. In February compliance auditor verifies certain health and jobs during its two-year 2015, we increased our quarterly dividend by safety information to conform with regulatory construction phase and 5.4 percent. This was the 11th increase in our and PSEG standards. Key suppliers are will employ up to 28 dividend in the last 12 years. graded based upon performance metrics and full-time workers. incentives are included in a majority of key Financial management is especially challenging supplier contracts. in a changing and sometimes uncertain economic and regulatory climate. Our financial Supplier Spending results depend on many risk factors including, PSEG is one of New Jersey’s biggest supporters but not limited to, commodity prices; regional of local business and spends more than $1 market rules; environmental regulations; and billion annually with New Jersey vendors. We state and federal energy regulation. We strive distribute this benefit annually to approximately to manage or mitigate these risks to make 1,500 vendors across the state. disciplined investment decisions.

KEY METRICS ON OUR FINANCIAL PERFORMANCE CAN BE FOUND Supplier Diversity IN THE ABOUT US SECTION OF THIS REPORT AND OUR 2014 ANNUAL REPORT WHICH IS AVAILABLE ON OUR WEBSITE. We believe it is important to build a supplier list that reflects our diverse customer base. PSEG’s Supplier Diversity Program has proactively engaged minority and women- owned business (MWBEs) for more than 25 28 ability to boost economic vibrancy

Total Spent on Minority and Women Owned Businesses (Millions)

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$0 $50 $100 $150 $200 $250 $300

years to level the playing field and increase the goals in appropriate increments that will take range of perspectives and capabilities among into consideration upcoming construction our service providers. We are proud to have projects, company infrastructure developments, reached a record level of more than $275 sustainability projects and system 50 million of business with women- and minority improvements. Our spending with MWBEs has owned companies in 2014. Also during the more than doubled over the past 10 years and year, we added 19 new certified minority and currently represents approximately 12 percent women-owned businesses to our active roster of our total spending with our suppliers. and awarded contracts resulting in newly PSEG works with more than 200 MWBEs across identified diverse suppliers providing products a broad array of business needs, including, but and services in several key areas. not limited to: construction services; engineered We are working hard to build on this success. equipment; paving and vegetation management; Supplier diversity goals are tied directly to tools and hardware; office equipment; and PSEG’s performance indicators and are linked more. Toward this effort, PSEG has developed to PSEG’s executive leadership and managers. strategies, training, communication and Moving forward, PSEG intends to continue to processes that educate, offer exposure to expand our supplier diversity and understanding of our supplier diversity process and business needs. Suppliers receive ability to boost economic vibrancy 29 regular mentoring, development, coaching, • Regional Alliance for Small Contractors certification assistance and additional support by • Edison Electric Institute – Supplier participating in our process. Diversity Group

We host multiple annual minority and women- • National Hispanic Business Group owned procurement matchmaking fairs at our • Hispanic Business Council of Commerce & Newark headquarters and at our nuclear site in Industry of New Jersey Salem, New Jersey. At no fee to the suppliers, • New Jersey African American Chamber PSEG’s Procurement organization brings all of Commerce of its sub-groups together to interview MWBE suppliers for procurement opportunities and PSEG has received many business awards share information that clarifies how to do for promoting supplier diversity. The company business with us. also holds board-level positions on the New York and New Jersey Minority Supplier Demographics are shifting, creating a steady Development Council, the New Jersey BPU’s increase in the number of minority and Supplier Diversity Development Council, New We are proud women-owned businesses across the region. Jersey Commerce and Industry Group and the to have Like our parent company, PSEG Long Island New Jersey Association of Women Business reached a is sourcing from this widening pool of diverse Owners. PSEG supports and accepts business record level suppliers through our supplier diversity ownership certification from the State of of more than program, as well. Tapping into this pool helps New Jersey, National Minority Supplier us strengthen our connection to the community, Development Council, Women’s Business lower costs and improve efficiency. PSEG Enterprise National Council, New Jersey Long Island is demonstrating more than just Transit, Port Authority and others. social responsibility by making the supplier 275 million dollars of diversity model part of our business strategy. Jennifer Marin, president of Endot Industries, business with women- We are benefiting our customers, suppliers and a women-owned New Jersey firm that and minority owned community. supplies materials for PSEG’s gas delivery companies in 2014. business, credited PSEG’s recent investments To develop and expand our supplier diversity with her company’s growth during a tough process to a world class level, PSEG is a economy. “The most recent award for the corporate member or sponsor of the following Energy Strong program was instrumental in supplier diversity organizations: allowing us to maintain a more stable work • New York & New Jersey Minority Supplier force and retain employees during winter Development Council months – when layoffs are more prominent • Minority Supplier Development Council due to slow business,” explained Marin. PA-NJ-DE “Energy Strong also helped Endot to maintain a healthy sales volume when our water pipe • New Jersey’s BPU Supplier Diversity sales are off due to the slow housing market.” Development Council • New Jersey Association of Women Business Owners • Women Presidents’ Educational Organization Sustain abilityto excel in providing green energy ability to lead in providing green energy 31

Sustainable green energy strategies to promote job creation, economic growth and a healthy environment have never been more needed than they are today. PSEG is proud to be a leader in undertaking green generation initiatives that create jobs and grow the economy while protecting the environment.

PSEG has invested substantially in clean safety through our emphasis on a strong safety generation technologies in recent years while culture and continually strive for excellence in working hard to reduce our environmental every part of our operations. We also require PSEG met footprint. These efforts place us in the forefront that our employees and business processes a goal of of our industry in implementing environmental comply with all relevant environmental, health reducing its solutions to meet our sustainability challenges. and safety laws and regulations. greenhouse Environmental stewardship will remain a core gas emissions Our strong relationships with the public sector, component of our mission. renewable energy developers and policymakers As a leader in low-carbon energy, PSEG has help us identify and implement innovative long advocated for federal legislation to limit environmental solutions. PSEG continues to and reduce greenhouse gas (GHG) emissions. embrace public-private partnerships that have Absent a comprehensive legislative solution, we contributed to New Jersey’s well-being and have supported public polices to cost-effectively prosperity for more than a century. These 25percent from 2005 reduce greenhouse gases. With our sustainability partnerships support our ability to invest in levels 14 years ahead focus in mind, we invest in carefully selected areas such as energy efficiency and solar of schedule. energy efficiency and solar projects that help energy, which are critical to a sustainable meet carbon reduction goals, contribute to energy future. economic development and create jobs. PSEG envisions climate change as a business and a social challenge … and also an Our Approach extraordinary opportunity for new investment and growth. We believe that energy companies Environmental stewardship and sustainability can be instrumental in helping society address require strong commitments and excellent climate change in comprehensive, practical ways management. Our Environmental, Health – with the goal of assuring that the benefits of a and Safety Policy (EH&S) establishes our green economy are accessible to all. There is no commitment and the PSEG EH&S Program easy solution to climate change, but real results Guide outlines our management approach to can be achieved when action is taken on a broad environmental health and safety. array of fronts, by all sectors of society. The PSEG EH&S Policy describes our PSEG was one of the first companies in our commitment to conduct our business in a industry to recognize the need to address safe, environmentally friendly and responsible climate change by establishing our initial Photo: Claudia Rocca, PSE&G licensing manner. We underscore our commitment to project manager, after Endangered and Non-game Species Program biologists examined and tagged a male eaglet. 32 ability to lead in providing green energy

carbon emission goals in the early 1990s. We believe that energy efficiency must be Today, PSEG’s carbon emissions per megawatt the centerpiece of a comprehensive effort to hour and per customer are best in class. build a sustainable energy future because of its enormous potential to lower emissions and We have established and achieved a significant reduce energy bills. Utilities like PSE&G can number of carbon reduction goals over the past be instrumental in making energy efficiency two decades. In 2004, through EPA’s Climate as universally available as the safe, reliable Leaders Program, PSEG voluntarily pledged electricity and gas that our customers depend to reduce its GHG emissions intensity by 18% on today. More about our energy efficiency from 2000 levels by 2008. PSEG surpassed programs can be found in the following pages. this goal by achieving a 31% reduction. Subsequently, we established a new goal to We are proud to be active in efforts that have reduce our GHG emissions by 25% from 2005 made New Jersey a leader in solar energy. So Indirect and Direct levels by 2025. In 2011, PSEG met that goal far, PSE&G has built 27 community-based, GHG Emissions (Metric Tons CO2e) 14 years ahead of schedule. grid-connected solar facilities totaling more 2011 than 75 megawatts, providing clean electricity We accomplished this goal through energy 2011 to all of our customers. Larger solar facilities efficiency programs, deployment of renewable 2012 like those we are building on landfills generate 2012 energy, increasing nuclear output, building power at 50 to 60 percent of the cost of rooftop 2013 clean and efficient natural gas plants, and 2013 solar – increasing access to the benefits of shifting output from coal to natural gas. 2014 clean, renewable energy at less cost than many 2014 PSEG aims to build on this success to further alternatives. We are looking to build on this 0 5M 10M 15M 20M reduce emissions and provide more low-carbon success by providing our customers with more Indirect Direct energy, as well as implementing programs for community-based grid solar solutions. climate adaptation and resiliency. Our climate PSE&G is a long-time participant in EPA’s strategy has now shifted from an overall Natural Gas STAR program, a voluntary initiative reduction approach to one that focuses on that encourages natural gas companies to strategies that meet society’s 21st century adopt cost-effective technologies and practices priorities – with a particular emphasis on that reduce methane emissions. As of 2013, investments that expand access to the benefits we have had cumulative reductions of methane of energy efficiency and solar energy emissions of 574,285 thousand cubic feet

PSEG offers no-cost charging and free parking to employees participating in our electric car incentive program at three company locations. ability to lead in providing green energy 33

(Mcf) since joining the program in 1993. Since organizations and helping to attract and retain 2011, PSE&G has reduced methane emissions employees and tenants who might also be 2% annually for a total of 32,000 million tons EV car owners. In order to be considered for of CO2 equivalent. the pilot, the site must be in PSE&G’s service area, with a demonstrated, immediate, on-site We have also taken steps to reduce sulfur demand from five electric car drivers. PSE&G hexafluoride (SF6) emissions. From 2012 provides the smart-charging equipment, and our to 2013, we reduced SF6 emissions from partners pay to install them. PSE&G’s electrical transmission and distribution equipment by approximately 12,500 million While helping to increase the number of charging tons of CO2 equivalent. plugs available in the state, PSE&G is also capturing a range of data from these charging stations, like times of peak use, peak and total Reducing Emissions electric demand, number of plugs used and NOx Emissions from Mobile Sources and (Metric Tons) Promoting Electric Vehicles more. In turn, we use this data to gain a better understanding of how people and organizations 2011 Also, PSEG has been taking steps to reduce use these charging stations in real life. 2012 greenhouse gas emissions from mobile sources. PSE&G continues to take action to lower the 2013 In 2013, PSEG launched an Employee Electric emissions from our own fleet of vehicles. We 2014 Car Initiative Pilot Program, where employees have improved the fuel efficiency of our fleet 0 3,000 6,000 9,000 12,000 15,000 who commute in an electric car may receive by 15% over the past 5 years. Almost 50% of no-cost charging and parking for three years at our light duty vehicles are now hybrids, and three company locations (Newark, Edison and 66% of our aerial lift trucks now have electric Salem). Last year, we opened the largest electric SO2 Emissions drives, allowing the operation of the lift without (Metric Tons) car charging facility in New Jersey as part of running the engine. We have also increased 2011 this program. PSE&G is a pledged supporter of the purchases of aerial lift trucks with a “cab the Northeast Electric Vehicle Network, which 2012 comfort option” which reduces engine idling was established to accelerate the deployment of 2013 time by running the cab temperature control electric vehicles (EVs). equipment off of the electric drive battery. 2014 Lack of convenient charging stations remains an 0 3,000 6,000 9,000 12,000 15,000 impediment that keeps potential EV drivers from Building Partnerships going all electric. There is no charging station equivalent to the thousands of filling stations that Mercury Climate adaptation is an area of increased Emissions serve gas-powered cars. PSE&G is doing its part focus for us as we increase resiliency. PSEG is (Metric Tons) to meet this need though an EV charging station a founding member of the New Jersey Climate 2011 pilot program. We are partnering with hospitals Adaptation Alliance, which was formed in 2011 2012 and businesses, a university, a condominium by a diverse group of stakeholders. The Alliance’s developer and a government agency to install a focus is on climate change preparedness and 2013 total of 50 plug-in stations. And we are looking adaptation in key impacted sectors, including 2014 for 20 more participants in the program. energy infrastructure. .00 .01 .02 .03 .04 .05 .06 .07 .08

In addition to having PSE&G pick up the cost Expanding this approach to a national stage, of the charging equipment, our partners get PSE&G collaborated with the U.S. Department the further benefits of aiding the environment, of Energy (DOE), along with sixteen other spurring the wider acceptance of EVs, burnishing utilities, to launch the Partnership for Energy their reputations as environmentally conscious 34 ability to lead in providing green energy

Sector Climate Resilience in April 2015. This efficiency are undervalued, misunderstood and Partnership is a voluntary program aimed at obscured by barriers both real and perceived. enhancing energy security against the impacts Public policy and well-designed programs of extreme weather and climate change. The can overcome these hurdles and unleash the Partnership will develop resources to facilitate potential for energy efficiency. risk-based decision making and pursue cost- PSE&G’s energy efficiency programs are effective strategies to improve the resiliency of designed to serve the broadest range of the nation’s energy infrastructure. customers. For example, we target many of our energy efficiency efforts to hospitals, Energy Efficiency residential multifamily housing, non-profits and municipal buildings, and thus ensure the societal For the communities we serve – and our nation benefits are distributed more widely across the as a whole – energy efficiency represents an communities we serve in New Jersey. enormous investment opportunity. In fact, the cost of saving a kilowatt-hour of electricity is Targeted Investment lower than the cost of generating and delivering the next kilowatt-hour of electricity. We will PSE&G’s energy efficiency programs have continue to support solutions that promote targeted a range of stakeholders over the past investment in energy efficiency as one of the several years, from hospitals and government most cost effective ways to build a sustainable entities to homeowners and small-business energy economy. operators. These initiatives have included: • Hospital Efficiency Program Energy Efficiency at PSE&G • Residential Whole House Efficiency Program • Direct Install Program for Small Businesses The customers who could benefit most from • Direct Install Program for Government energy efficiency cost savings are often the Facilities/Non-Profits Residential Multifamily ones least able to make the up-front financial Housing Program commitment. The hurdles to such investments vary, ranging from a lack of energy expertise and • Residential Programmable Thermostat awareness, limited access to capital or credit, Program in Urban Enterprise Zones difficulty finding technical assistance and/or • Warehouse Lighting Pilot Program qualified contractors, to skepticism about the Through these programs, we typically pay the payback and competing priorities for investment up-front costs for the energy efficiency work dollars. In essence, the benefits of energy

We have invested $120 PSE&G’s award- million at 33 hospitals winning energy which has saved efficiency program for them $12 million to date that hospitals has acheived can be used to improve medical care outstanding results.

and enough energy to power 10,000 homes ability to lead in providing green energy 35 and participants repay a portion of the cost over improvements over three years, interest free on time, interest free, on their utility bill. their PSE&G bill. There are 37 hospitals in the program with work completed at 33 to date. We have already invested nearly $300 million The recently approved extension to the program in these efforts, and in May 2015 received will allow PSE&G to address the 12 hospitals approval from the New Jersey Board of Public currently on the waiting list. Utilities (BPU) to invest an additional $95 million to extend the Hospital Efficiency Program, the More than $3.4 million in energy efficiency Residential Multifamily Housing Program and work was recently completed at Robert Wood the Direct Install for Government Facilities/Non- Johnson (RWJ) University Hospital Rahway Profits Program which will now include small through PSE&G’s Hospital Efficiency Program. businesses customers. This will save the hospital more than $300,000 annually in energy costs. “For almost 100 This extension will enable PSE&G to serve a years, this hospital has provided critical medical roster of hospitals, healthcare facilities and services to the people in this region,” said residential multi-family housing units that are RWJ Rahway President and CEO Kirk Tice. currently on program waiting lists. It will also “The energy efficiency improvements made allow us to offer energy efficiency assistance for possible through the PSE&G program will not the first time in several years to small business only help us use energy more efficiently, they customers in 25 Urban Enterprise Zones (UEZs) will also save us hundreds of thousands of while also continuing energy efficiency efforts for dollars annually in energy costs, and greatly government facilities and non-profits. improve the infrastructure that we rely on for Between 2009 and 2014 our programs have the comfort and convenience of patients, achieved annualized electric and gas savings visitors and staff.” PSE&G and Robert that could power 30,000 homes and provide Residential Multifamily Housing Program enough natural gas to supply 6,500 homes Wood Johnson throughout the year. This program encourages the installation of University (RWJ) energy efficiency improvements by providing Hospital Rahway Hospital Efficiency Program cost-effective energy saving opportunities recently marked PSE&G identified hospitals as a high for eligible multifamily housing projects. the completion of Participating building owners repay a portion energy-usage sector facing unique challenges energy efficiency of the total cost of the project interest-free and market barriers that required more than improvements traditional energy efficiency rebates on their PSE&G bill over a five- or ten-year that will save the to overcome. repayment period. This program has already made more than 10,000 apartments more hospital more than Our $174 million Hospital Efficiency Program energy efficient and the recent program $300,000 annually finances major energy efficiency upgrades extension will allow PSE&G to serve the waiting in energy costs. to help hospitals reduce energy costs and list of approximately 45 multifamily projects thus focus on their core mission. It is the only comprised of more than 10,000 additional program we know of where the utility bears apartments. In addition to improved energy all of the up-front capital costs and enables efficiency, this effort also typically enhances these large users to repay their share of the comfort and safety along with resident costs over time on their utility bill. On average, satisfaction. hospitals repay about 30 percent of the cost of 36 ability to lead in providing green energy

Direct Install for Government Facilities/ than $1 billion in incentives and saved more Non-Profits Program than 15 million megawatt-hours of electricity and 220 million therms of natural gas. The Direct Install Program currently provides energy efficiency services to government PSE&G is also one of several utilities in New and non-profit facilities. PSE&G pays for 100 Jersey that run the BPU’s Comfort Partners percent of the total cost upfront to install energy efficiency program for low income recommended energy efficiency measures residents. Through Comfort Partners, PSE&G and program participants repay 30 percent of has improved the energy efficiency of more the cost interest free, over three years on their than 60,000 homes, helped those customers PSE&G bill. The program extension granted hold the line on their energy costs and saved earlier this year will allow us to continue 5.5 million kilowatt hours of electricity and 5.7 this work with government and non-profit million therms of natural gas. customers while also making the program available for the first time since 2012 to small PSE&G is businesses located in the 25 UEZs in PSE&G’s Energy Efficiency – PSEG Long Island investing service territory. almost PSEG Long Island has a number of effective Tracking Progress energy efficiency programs designed to help Our programs have shown that the hurdles customers save energy and money while also to energy efficiency investments in urban helping the environment. 400 areas and in high energy-use sectors can be million dollars to PSEG Long Island spent about $70 million on our overcome. By the end of 2014, PSE&G had help fund energy Efficiency Long Island (ELI) portfolio of programs efficiency efforts with directly installed measures and/or provided in 2014, saving customers over 263 million customers that can incentives to more than 10,000 residential kilowatt-hours of energy and lowering peak most use the help. customers, 100 schools, 600 businesses, 300 demand by over than 55 MW. The ELI program, government agencies and approximately 30 established in 2009, has a long-term goal of hospitals and 25 apartment buildings, many of reducing peak demand by 520 MW by 2018, which are senior housing. We also completed and so far has reduced peak demand by 251 MW. 575 projects for urban small businesses (prior to the most recent program extension), audited National Recognition more than 6,000 residential houses, provided weatherization/seal-up services to 4,400 In light of the performance of the ELI homes and deeper retrofits to 1,600 homes, program, PSEG Long Island was honored and provided more than 28,000 programmable with an ENERGY STAR Partner of the Year – thermostats and 400,000 energy-efficient light Sustained Excellence Award in 2014 by the bulbs to urban residents. U.S. Environmental Protection Agency (EPA) for our commitment and dedication to energy PSE&G has also managed a “Standard Offer” efficiency and the ENERGY STAR program. program for approximately 20 years among its residential and small and large commercial Our efforts were recognized for the results customers. Participants in the program submit they are delivering, too. For example, our a proposal to install energy savings measures, Home Performance programs have served such as lighting, heating, cooling or insulation, over 12,000 customers, saving 16.8 million and receive standard incentives based on kWh of energy, which is equivalent to removing savings of natural gas and electricity. To date approximately 2,439 cars from the road a year. the Standard Offer program has paid out more Also, ENERGY STAR-certified light emitting ability to lead in providing green energy 37 diodes (LED) sales have increased from almost A REAP technician (PSEG Long Island 3,500 in 2010 to more than 600,000 in 2013. contractor) will come to the home and LED lighting uses 75% less energy and lasts 25 provide a free home energy survey and times as long as incandescent bulbs. educate the customer on how to use less electricity by practicing energy efficiency. An Array of Energy Efficiency Programs During the home energy survey, the Efficiency Long Island contains a portfolio of technician may install high-efficiency lighting, programs targeted to residential customers and energy efficient appliances, pipe insulation local businesses. Among them are: and domestic hot water flow devices. • Energy Efficient Products Program: • Cool Homes - Central Air Rebate Program: The goal of this program is to bring proven A new, efficient central air conditioning ENERGY STAR technologies to customers so system can reduce cooling energy costs they can benefit from energy savings, thereby by up to 40% compared to older inefficient lowering their electric bills. Rebates and models and save customers as much as incentives are offered on a variety of ENERGY $500 a year on their electric bill. Rebates The Cool STAR rated appliances, lighting fixtures, and for new and replacement installations are Homes household electrical equipment. available, as well as rebates for geothermal program saves and ductless mini-split systems. Participating customers as • Home Performance Direct (HPD) Program: contractors are eligible to receive quality much as This is a free program for customers that have installation incentives as well. central air conditioning. The program includes a comprehensive home assessment (CHA) • Commercial Efficiency Rebate Program: and select, free efficiency upgrades. The CHA Customers can receive cash incentives for provides recommendations for cost-effective installing energy efficient electric equipment 500 in their facilities. Rebates are available for a dollars a year on their improvements that may qualify for financial electric bill. incentives. Non Central Air Conditioning range of energy-saving measures. customers can still qualify for a free CHA • Energy Assessment Program: through New York State’s Green Jobs Green Services are provided for business customers NY (GJGNY) program with financial incentives to assess their energy demand and analyze through the HPwES program, described below. energy conservation measures – free • Home Performance with ENERGY of charge to customers. This program is STAR® Program: This free program specifically for small businesses interested in is designed to save homeowners up to becoming more energy efficient. 20% on their monthly energy bills. Based • Technical Assistance Program: upon the recommendations from the PSEG Long Island’s Technical Assistance (TA) comprehensive home assessment during program provides co-funding to customers the initial audit, a homeowner can make who require engineering and design services additional improvements and take actions to in order to qualify for certain rebates or stop wasting energy and start saving money. certifications. The TA program supports LEED Specifically, these improvements might involve certification and requirements, ENERGY STAR a home’s insulation, heating and cooling benchmarking certification and requirements, system, windows, appliances and lighting. and will fund approved studies to determine • Residential Energy Affordability the energy savings potential of a technology. Partnership (REAP) Program: The REAP program is for income-eligible customers. 38 ability to lead in providing green energy

Renewable Energy environment, turns landfills and brownfields green with solar power and spurs economic Our renewable energy initiatives have helped development by creating good jobs and making make New Jersey one of the leading states the state a center for solar development. In for solar energy development – creating jobs, fact, the Solar 4 All Program will create, on spurring economic activity and helping the state average, about 300 jobs a year between 2010 meet its renewable energy targets. New Jersey and 2016. The program also benefits PSE&G ranks third in the number of solar installations customers directly by connecting solar power in the nation and PSE&G is fifth in the nation into the electric grid. Solar 4 All will eventually among utilities for cumulative solar megawatts provide enough solar electricity to power about interconnected, according to the Solar Electric 20,000 average-size New Jersey homes Power Association (SEPA). PSE&G also leads annually. the nation in the development of landfill and brownfield solar farms. Solar 4 All is also helping to turn landfills and brownfields green. Of the 26 centralized solar Larger solar We are aggressively helping New Jersey meet projects currently in service, four are located facilities its renewable energy goals. New Jersey’s RPS on PSE&G remediated brownfield sites in New produce requires load serving entities in the state to Jersey: Trenton, Silver Lake/Edison, Linden, power at procure 22.5 percent of the electricity they sell and Hackensack and three are located on to customers from qualifying renewable energy closed New Jersey landfill sites in Bordentown, by 2021. Also included in that goal is a specific Deptford, and Kearny. These sites provide more allocation for solar power. PSEG is helping to meet than 30MW-dc of solar capacity. the RPS target by directly developing solar projects and providing financing for solar projects. PSE&G’s These landfill solar projects solar projects benefit solar investments create a demand for technology from economics of scale compared to the typical 50to 60 percent of the residential net metered solar project. cost of rooftop solar. that will transform the way we generate electricity and create green jobs. Solar 4 All also features 40MW-dc of pole- Our Approach attached solar, which saves space while generating highly distributed solar energy. A Our approach to solar development includes 40MW-dc solar farm would require about 140 direct ownership of large-scale, grid connected acres, or about 110 football fields, of land. The projects through our Solar 4 All Program, and a 40MW-dc of utility pole-mounted solar units Solar Loan Program targeted to businesses occupies no real estate. More than 174,000 and homeowners that need financing for pole-attached solar units are installed in PSE&G their projects. electric service territory around the state.

Solar 4 All™ Over the next few years, PSE&G will be building an additional 21MW-dc of solar capacity on Solar 4 All is a 125 megawatt-dc (MW-dc) additional landfills and brownfields in the program that utilizes rooftops, solar farms, utility’s electric service territory. Solar 4 All utility poles and landfills/brownfields for will also support 3MW-dc of solar generation large-scale, grid connected solar projects. As featuring unique solar technologies centered on of mid-2015, more than 101 MW-dc of the energy storage and grid-hardening applications. 125MW-dc total are in service.

Solar 4 All helps New Jersey reach its solar power goals, helps promote a cleaner ability to lead in providing green energy 39

Solar Loan • PSEG Milford Solar Farm, a 15-MW solar farm in Milford, Delaware. The 178.5 MW-dc Solar Loan program is the • PSEG Badger 1 Solar Farm, a 19.3-MW solar second piece of PSE&G’s solar development facility located west of Phoenix, Arizona. strategy. This program encourages business and residential customers in our electric service • PSEG Queen Creek Solar Farm, a 25.2-MW territory to install solar energy systems on their solar farm in Queen Creek, Arizona. homes and businesses. PSE&G solar loans • PSEG Essex Solar Center, a 3.6-MW solar can help make solar ownership affordable by farm in Essex, Vermont. financing a major portion of the solar system • PSEG El Paso Solar Energy Center, a 13-MW and providing a unique repayment option solar farm in El Paso, Texas. that locks in a guaranteed value of the Solar Renewable Energy Certificates (SRECs) the Renewable Energy – PSEG Long Island system is expected to generate. New York State has established a goal of The Solar Loan Program has granted more than obtaining 30% of its energy from renewable $250 million in loans and helped more than energy by 2015. PSEG Long Island is working 1,000 customers finance over 80 megawatts-dc to do our part toward achieving that goal. of solar capacity on their homes and businesses. We have moved aggressively to integrate solar energy into our service area, from both PSEG Solar Source the wholesale and retail sides of the market. Overall, PSEG Long Island has installed over PSEG Solar Source, a subsidiary of PSEG Power 145 MW of solar through 2014. Ventures, develops, owns and operates utility- scale solar facilities outside our New Jersey Over the past few years, PSEG Long Island has service area. PSEG Solar Source has been able seen an explosion of interest in our rooftop to expand its portfolio to 148 megawatts of solar program. Over 15,000 customers have PSE&G’s clean clean, renewable energy – with 12 facilities in taken advantage of the program, installing energy-producing operation or development in 9 states. We are about 125 MW dc of clean solar power on solar farms built proud to be a part of efforts across the country their homes. This program provides a fixed on landfills and to combat climate change and increase the incentive for a block of power, which then amount of locally generated renewable energy resets to a lower incentive once the prior block former industrial while spurring the economy as well. And, we is filled. PSEG Long Island also has a feed-in properties called are actively exploring opportunities to add to tariff program for larger commercial projects. brownfields feed PSEG Solar Source’s portfolio. This program has resulted in the installation of power into the about 27 MW of solar power. PSEG Solar Source’s operating facilities are: electric grid to • PSEG Mars Solar Garden, a 2.2-MW facility In addition, PSEG Long Island put out a the benefit of all located adjacent to the Mars Snackfood’s solicitation for up to 280 MW of grid-connected customers. U.S. headquarters in Hackettstown, renewable energy in 2014. To date, 122 MWs New Jersey. of projects have been authorized. • PSEG Shasta Solar Farm, two adjacent solar facilities totaling 4.4 MW located in Shasta Nuclear Power County, California. • PSEG Wyandot Solar Farm, a 12-MW solar Nuclear power continues to hold several farm in Wyandot County, Ohio. advantages for helping to meet the country’s future energy needs. Nuclear generation emits • PSEG Jacksonville Solar Farm, a 15-MW no carbon or other pollutants associated with solar facility in Jacksonville, Florida. 40 ability to lead in providing green energy

fossil fueled plants, while providing tremendous Emergency Preparedness economic and job benefits for the region. PSEG Nuclear maintains a strong emergency We believe a systematic approach to nuclear response plan. As part of this plan, we work energy management ensures public safety, closely with the states of New Jersey and and the recent success of our application to Delaware to protect the health and safety of relicense two facilities is further endorsement the public. The Nuclear Regulatory Commission of our management expertise. We also (NRC) assesses the capabilities of the plan by recognize the importance of educating the requiring us to perform a full-scale exercise public about nuclear energy and have been that includes the participation of government recognized for our community outreach efforts. agencies at least once every two years. A recent More than 25,000 stakeholders have toured exercise was performed in May 2015 with no our nuclear plants and community information issues. We perform these exercises to maintain center in the past five years. the skills of our emergency responders and conduct additional drills quarterly. Nuclear Fleet

Our nuclear power generating fleet consists Water of the Salem and Hope Creek nuclear generating stations in Lower Alloways Creek, Stewardship of water resources remains a New Jersey and part ownership of the Peach priority for PSEG in the areas where we operate. Bottom nuclear generating station in Delta, PSEG’s power plants use water to drive steam Pennsylvania. PSEG has taken steps to turbines, for cooling in boilers and to reduce air ensure that nuclear power will be part of New emissions. As discussed in the section on air Jersey’s future. First, we received 20-year quality, PSEG has installed technologies that license extensions to the Hope Creek unit and reduce emissions of NOx and SO2. However, both Salem units, ensuring these plants can many of these technologies rely on the injection of water to achieve this environmental benefit. As Maintenance continue to operate well into the 21st century. a result, overall water use for these facilities has manager Dave We are also in the process of obtaining an increased. The largest volume of water is linked Williams participates early site permit, the first step needed for the to non-contact cooling water systems. Several in high-angle rescue construction of a new plant, for a site north different systems are in use ranging from once- training at the of our Hope Creek reactor. With access to through systems to wet cooling towers and a available transmission, proximity to energy Mercer Generating wet/dry hybrid cooling tower. users and available land, our South Jersey site Station. is one of the best locations for a nuclear unit Once-through systems withdraw high in the nation. If an early site permit is granted, volumes of water with relatively low water it would be valid for 20 years, allowing PSEG consumption rates but they also have impacts Nuclear additional time to decide whether to local aquatic habitats. PSEG has addressed to apply for a combined construction and these impacts in several ways, including the operating license. installation of state-of-the-art technologies and the restoration of marsh habitats. Cooling ADDITIONAL INFORMATION ABOUT OUR NUCLEAR POWER FLEET IS AVAILABLE ONLINE AT: HTTP://WWW.PSEG.COM/FAMILY/POWER/ towers withdraw significantly less water but NUCLEAR/INDEX.JSP with a relatively higher consumption rate. To offset this, PSEG has at two locations chosen to use an available alternate water source, “Reclaimed Wastewater Effluent,” to limit reliance on potable water supplies. ability to lead in providing green energy 41

Meeting water quality standards continues to PSEG works with local conservation be an issue we manage at our plants daily. organizations such as the Hackensack PSEG has designed and installed systems Riverkeeper to support the maintenance of to treat industrial wastewater at its facilities, osprey platforms and facilitate increasing reduce the concentration of pollutants in populations of this endangered species. Several the discharge and reduce the potential for of PSEG’s facilities are home to active platforms stormwater to carry pollutants from its facilities. including Hudson Generating Station in Jersey City. PSEG is also a partner with a broad group Guidelines and Verification of stakeholders in the Abbott Marshlands PSEG guidelines call for all of our power Stewardship Council. This important resource plants to ensure that they maintain the quality area is located in Mercer County adjacent to and quantity of water on both the intake and PSEG Power’s Mercer Generating Station and discharge sides of their operations. We use also has several transmission lines crossing best available technology to safely remove and over it. Through this collaboration PSEG works return fish to rivers during water intake at our with other stakeholders to protect and preserve facilities. We also monitor pH and temperature the marsh habitat and educate the public on of the water returned to rivers and we are in marsh ecology and benefits. compliance with state environmental quality Environmental Impact Assessment permits. We treat all effluents on-site before discharge and both our measured and reported The cornerstone of our approach to water data are externally verified in several maintaining biodiversity is an environmental ways by federal and state regulatory agencies. impact assessment process for our projects. This includes an evaluation of biodiversity impacts, using inventory maps created by Duc Tran, Biodiversity the New Jersey Geographic Information PSEG Fossil Providing safe, reliable and efficient energy System. In addition, we file our Environmental environmental to meet the needs of our customers requires Impact Statements (EIS) and Environmental specialist, maintenance of lines that pass through local Assessments (EA) with the appropriate oversees traveling ecosystems. We work closely with experts, regulatory agencies such as the New Jersey including the New Jersey Audubon Society Department of Environmental Protection, the screens installed and The Nature Conservancy, to integrate Board of Public Utilities, and the National Park at PSEG’s Hudson biodiversity considerations and mitigate Service. Our EIS and EA reports are publicly generating station ecosystem impacts from design through available through those agencies and we post to provide fish a project construction and maintenance. PSE&G updates to project websites for many of our safe return to is currently working with New Jersey Audubon larger projects. the river. to evaluate practices for the management As a result, while we advance the development of vegetation along its 1,100 miles of of projects to maintain and improve the transmission Rights of Way. Information reliability of our energy systems, we gathered from this effort will be used to develop have worked closely with regulators and sustainable maintenance practices that will environmental stakeholders to mitigate the balance the safety and reliability needs of the environmental impacts of those projects. In utility system with the need to maintain diverse addition, PSEG has sought out and partnered habitats from migratory and sensitive species. with others to identify practices that will lead to improved habitat diversity. Sustain abilityto help people be their best ability to help people be their best 43

PSEG is a company with strong ethical values and a deep commitment to its employees. We understand that our success ultimately depends on our ongoing ability to attract, develop and retain a highly skilled, diverse and engaged workforce. Indeed, our people are the key to achieving operational excellence.

Each year we review our people strategy Integrity and PSEG values form the foundation of to ensure we are engaging and motivating our ethics program. employees. Our goal is to promote an environment where employees develop and Standards of Integrity utilize skills, feel comfortable sharing their PSEG is committed to conducting operations in ideas and concerns, and directly support the accordance with the highest ethical standards achievement of key business objectives. We and in compliance with the law. These Standards

believe these efforts contribute to a high- ES ST of Integrity (“Standards”) and the PSEG values LU A A N V D performance culture. A embody that commitment. Our core values – R

D

S

Accountability, Continuous Improvement,

Employee engagement is an important part

Customer Focus, Diversity, Integrity, Respect of our journey to improve as a company.

and Safety – guide our conduct wherever A Our engagement initiatives focus on issues C C we operate. We require every employee and O such as comfort in speaking up and building U N

contractor to uphold our values and standards to T A employee capabilities through our People Strong B G IL I N work with PSEG. IT I N curriculum, and fostering diversity and inclusion Y T R A to ensure we move forward effectively as one The PSEG Standards of Integrity, reviewed and team. We want to build a culture where everyone approved by the PSEG Board of Directors, is not only contributes but feels valued and a specific policy commitment that describes appreciated, and has a range of opportunities for the company’s expectation of employee and growth and development. contractor conduct in the workplace. Our Standards of Integrity set common expectations We identify and manage numerous risks and for interaction with investors, customers, opportunities through our people strategy. Part coworkers, competitors, vendors, government of the reality of our business is the commitment officials, the media and others. Our entire staff of maintaining employee and public safety, good of management, administrative, supervisory and relations with our labor unions and an engaged technical associates must complete training workforce. on the Standards of Integrity and results are reported to the Audit Committee of the Board Business Ethics and Values of Directors annually. We ensure accountability by defining responsibility, reporting breaches, A good name is more than a source of pride: tracking results and responding to issues. it gives us credibility in the marketplace, in the Photo: Dominick Albowicz, service communities where we work and among current THE FULL STANDARDS OF INTEGRITY ARE ONLINE AT: specialist-Clifton gas, and his daughter HTTP://PSEG.COM/FAMILY/ABOUT/INTEGRITY/PDF/ Madelynn, learn about emergency preparedness through the new Sesame and potential employees. Our Standards of STANDARDS.PDF Street Let’s Get Ready app. 44 ability to help people be their best

Employee Health and Safety An independent third-party audit team’s review of PSEG’s Environmental Health and Safety A safe and healthy workforce is a high- (EHS) management systems concluded that the performing workforce. We take numerous system’s design and overall performance placed measures to ensure employees and contractors PSEG as a top performer among its peers.

have the proper knowledge, training and THE FULL PSEG ENVIRONMENT, HEALTH AND SAFETY POLICY protective equipment to maintain their personal OUTLINING OUR RESPONSIBILITY IS AVAILABLE AT: HTTP://WWW. PSEG.COM/INFO/ENVIRONMENT/HEALTH.JSP health and safety. Moving Toward Target Zero PSEG’s business requires managing sophisticated energy production and Over the past 10 years we have continued to distribution operations involving commodities improve our safety performance. Indeed, our which are inherently hazardous. We control the 2006-2015 performance, as measured by risks associated with those hazards through the OSHA Recordable Case Incidence Rate the successful implementation of engineering and Severity Rate, was better than during Employees controls, work processes and continuous any other 10-year period since these metrics working improvement goals, by a highly trained and through a started being used in the 1970’s. Building personal skilled workforce. on our health and safety culture, we aim to achieve our vision of Target Zero – where no problem can Our Approach call the EAP one gets hurt – through a strong commitment hotline PSEG’s commitment to employee health and to continuous improvement and employee safety is our foremost priority and is supported involvement. Among other improvements, we by our employees’ exemplary efforts over many have established a more detailed and focused years. Our health and safety culture reflects investigation and analysis process to evaluate strong and continuing employee involvement, and track incidents and ensure that corrective teamwork and pride. Moreover, we believe actions are taken. that safety excellence enables operational We are adding tools to help us on our safety 24hours a day for excellence. Our culture is supported by policies, journey. For example, our new Safety Information confidential counseling practices, processes and management systems Management System (SIMS) is scheduled to and referrals. that enable employee involvement, continuous be in place for all business units in 2016. SIMS learning, and disciplined risk assessment, will support our ongoing efforts to understand prioritization and control. We ensure the our safety performance with heightened clarity, strength of our processes and management precision and rigor as we strive to continue systems and their implementation through improving from a safety standpoint. self-assessments, third-party audits and benchmarking activities within and outside our industry. Employee Welfare

Both our culture and management system People select companies that share their values. illustrate our approach to safety throughout We find that job candidates are drawn to us the company. The twelve components of our because of our reputation and stability along health and safety system provide the structure with our clean energy initiatives, environmental for promoting a culture built on trust, care, stewardship and community role. PSEG has knowledge and communication. provided opportunities for our employees to grow with us for more than 100 years, and we will continue to foster a workplace environment that contributes to this success. ability to help people be their best 45

Employees who are members of labor unions Employee Assistance Program (EAP): covered under collective bargaining agreements Employees working through a personal problem comprise nearly two-thirds of our workforce. that could affect their well-being can call the Contract negotiations will be a priority for us EAP hotline 24 hours a day for confidential in the next few years since contracts covering counseling and referrals. Counselors provide approximately 80 percent of our union assessment, short-term counseling referrals employees expire in 2017. We are proud of our and treatment monitoring. strong union-management relations and will Carebridge: This service is available to help begin laying the groundwork for our negotiation employees who are caring for aging parents, process in the next year. children with injuries or disabilities, or family members with substance abuse problems. Compensation and Benefits PSEG’s Carebridge program provides employees with referrals to professional assistance that Taking great care of our customers starts supports a family member in need. with making sure we take great care of our employees. We have long provided our Bright Horizons Child Care Program: This employees with an attractive combination of service offers priority access for back-up, compensation and benefits, supporting our full-time and part-time child care to company strategic objective to attract, retain and develop employees. In addition, employees are provided a high performing and diverse workforce. This with 20 visits per year, subject to a $15 past year we conducted a thorough review of co-payment, at Bright Horizon’s Child Care non-officer compensation grade structure and facilities nationwide for back-up child care. incentive plan design. This evaluation confirmed MORE INFORMATION ON CAREERS WITH PSEG AND OUR BENEFITS the competitiveness of the compensation we IS AVAILABLE ON THE FOLLOWING WEBSITES: Town Halls for offer, while also providing other valuable insights PSEG CAREERS: HTTP://WWW.PSEG.COM/INFO/CAREERS/ PSEG employees PSEG BENEFITS: HTTP://WWW.PSEG.COM/INFO/CAREERS/ that we used to effectively integrate PSEG Long BENEFITS.JSP promote Island jobs so that the company now has one high levels of common pay structure. We also made design engagement. changes to our Long-Term Incentive Program, Wellness and Lifestyle or LTIP, to increase market-driven incentive Lifestyle and employee well-being are essential opportunities and participation rates. Moreover, to a high-performance culture. PSEG provides we made additional design changes to ensure additional services beyond traditional benefits all employees are focused on continuous to support and encourage employees to lead improvement and operational excellence. a balanced and healthy lifestyle. During the Our comprehensive benefits package last quarter of 2015, PSEG will introduce a empowers employees to be their best. We new “Be Well” program focused on risk factors benchmark our industry peers to ensure we are that impact our employees and drive health within five percent of the group average and care costs. We will continue to offer our onsite adjust as the market changes. The wide range fitness centers at two of our largest sites and of employee services, retirement, health and continue to offer onsite flu shots. other benefits are designed to help employees A corporate wellness council, consisting of enhance their work-life balance and suit their various union and management personnel, has diverse lifestyles. Highlights of benefits include: played a significant role in promoting wellness and wellness-related programs. These resources are available to all our full-time employees. 46 ability to help people be their best

Talent Management Island as well. During the first quarter of 2015 over 200 PSEG Long Island employees A high-performance culture rewards personal completed our Power Up onboarding program. growth, input from our employees and Additionally, all new hires attend a one-day professional development. PSEG is committed program to provide an overview of our culture, to developing a strong culture through effective our people policies and practices. All new hires employee support. attend both onboarding programs during their We recognize the challenge of preparing our first six months of employment. workforce for a transition with the retirement In 2014, a new college onboarding program of baby boomers in the next decade. While called Accelerate was designed and PSEG provides strong development and training implemented for all new college hires. This programs, like others in our industry, we have 6-month program was developed to provide an aging workforce. More than 30 percent the most recent college recruits and intern of our employees will be retirement-eligible conversions from the prior summer with a over the next five years. This can be especially focused approach to move from the campus to difficult to manage since finding employees the corporate environment and engage quickly with the skills necessary to replace these with the business. Retention of this group will career veterans is not always easy, particularly continue to be monitored. We are currently in areas like PSEG Nuclear where it can take investing and installing a new best-in-class years of on- and off-the-job training and onboarding tool to actively engage our pre-hires development to qualify for certain positions. prior to their first day. We continue to strengthen our internal hiring, training process and recruitment process to In the area of workforce planning, PSEG uses develop a pipeline of employees that can meet a holistic and structured approach based on anticipated attrition needs. best practices from the nuclear and energy industries and the Center for Energy Workforce Onboarding Development (CEWD). PSEG has been closely PSEG increased the emphasis on onboarding in monitoring employee retirement eligibility, 2014 with the development of a 45 minute- especially to address critical positions or areas eLearning program accessible through the of potential risk. During the past several years, onboarding portal for all new employees. PSEG has conducted workforce planning This program is being utilized by PSEG Long exercises within our various businesses.

Since 2008, PSEG Nuclear has supported Salem Community College’s Nuclear Energy Technology Program. Students are eligible for scholarships made possible by PSEG. ability to help people be their best 47

Career Development These academies are an important part of our workforce development efforts, and we PSEG provides comprehensive approaches and will continue to develop succession plans and tools for employee career development. All non- additional programs to support the growth of our union employees set development goals with employees. their managers, participate in a performance appraisal process and have access to a variety PSEG has invested in a Leadership of tools and resources to improve their skills Management System to help drive not only the and track their progress. importance of development but a more effective and impactful way of providing it to our PSEG is very proud of our People Strong employees and being able to track participation professional development curriculum, which on an ongoing basis. Highlights of initiatives addresses the ongoing development needs of that facilitate employees’ continued growth and our employees to help us succeed together. development include: This curriculum reflects input from a variety of • Training: Our Training & Development sources, including our employee development More than Centers in New Jersey and Long Island culture survey, talent development process, provide state-of-the art facilities for technical and our employees’ individual development training of our craft employees and for the plans while also factoring in the needs of the training of new hires as well as the ongoing organization. development for PSEG’s highly skilled The People Strong curriculum allows PSEG workforce. employees to develop via classroom study and 30percent of our The PSEG intranet, myPSEG.com, provides eLearning. The curriculum is organized by both employees will be employees with a wide range of helpful leadership development and professional skills, retirement-eligible over information on their salary and benefits, and includes opportunities to further develop the next five years. retirement plans and services. We maintain individuals identified as having high potential an electronic catalogue of policies, practices, to grow within the organization. Programs are procedures, and operational excellence models delivered via classroom and eLearning and so employees know exactly how to excel. the majority of our programs are provided via Internally, public information is communicated blended learning solutions. through myPSEG.com, daily Outlook online Two flagship programs in the People Strong emails, and PSEG Outlook, our employee curriculum are the Leadership and Supervisory magazine. Academies: Mapping Out the Path to Employee • The PSEG Leadership Academy is a week- Success - Continuing to Develop High long immersive program for top-performing Potential Talent: PSEG continues to develop managers. It provides intensive training on women through the GROW program – Growing leadership, decision-making and problem and Reaching for Opportunities for PSEG solving by engaging executives and their Women. This is a nine-month program focused peers across the company. on accelerating leadership development skills, • The PSEG Supervisory Academy provides increasing self-awareness and broadening frontline leaders with skills necessary to business knowledge across the enterprise. 2014 lead their own teams, drive continuous graduates and their mentors continued to be improvement, and manage up within their monitored to measure movement within the organization. organization. 48 ability to help people be their best

Rolling out in 2015 is a new program, “Charting support our workforce and marketplace goals Your Course,” focused on the junior level by helping us build relationships with other individual contributor contemplating their next organizations in the marketplace to source career move – primarily as a subject matter talent and suppliers. The PSEG Foundation expert (SME), individual contributor or through a supports their efforts by donating up to $2,500 move into supervision. This program is focusing annually to charities they are aligned with. on developing 24 employees with an opportunity The current Employee Resource Groups are: to leverage 8-10 managers and directors as mentors through the 6-month program. PSEG • AABE (American Association of Blacks in Energy) Diversity and Inclusion Our Workforce: • Adelante A diverse company is a strong company. We • ASPIRE (Asians & Pacific Islanders Reaching believe in a culture that values and promotes for Excellence) PSEG Veterans equal opportunity. Our diversity strategy focuses • Black Professional Network YEAR VETERAN EXTERNAL on our Workplace, Workforce and Marketplace. HIRE RATE • Enabling Ability Workplace 2013 10% • FEAT (Functional Environmental Achievement Team) 2014 11% A workplace that respects team members is the first step in our diversity strategy. We strive • GaLA (Gay and Lesbian Alliances at PSEG) to build a culture that is inclusive through • Minority Interchange awareness, team member support and decision Females • North American Young Generation in Nuclear making, and engagement of underrepresented 2013 2014 • PS Nuclear Vets employees. The following workplace programs MAST 25.7% 25.7% help us meet our diversity goals: • PSEG VETS/PS Nuclear Vets UNION 10.4% 13.0% • RISE UP Manager Training: Creating an atmosphere of • TYPP (The Young Professional of PSEG) TOTAL 16.2% 17.7% candor and respect for high-performing teams begins with managers. We provide managers • Women In Nuclear of PSEG with coaching and resources to set standards • Women’s Network

People of Color for respect, train their employees on diversity, PSEG LI 2013 2014 and communicate with employees over their concerns. • ASPIRE (Asians & Pacific Islanders Reaching MAST 22.4% 23.2% for Excellence) Career Support: We post jobs internally and UNION 23.6% 22.1% • HOLA (Hispanic Organization for Leadership encourage internal referrals and applicants. TOTAL 23.1% 22.5% and Achievement) We offer support for internal applicants with • The Alliance resume-writing and interview skill-building. • TYPP (The Young Professionals of PSEG) Employee Resource Groups: Employee • Vets ERG Resource Groups allow employees to share • Women’s ERG their diverse interests, talents and learning often to advance career goals. They also ability to help people be their best 49

Irene Muldowney, PSEG Fossil environmental compliance & programs manager, is part of a team that works hard to uphold PSEG’s reputation as a responsible company and environmental steward.

Workforce We are especially proud of our relationships with the military, supporting our efforts to attract Attracting a qualified, diverse and high- and recruit members of our armed forces performing workforce is step two in our returning from tours of duty. We design specific diversity strategy. We partner with a variety of outreach, hiring and policies to meet the needs local, regional and national organizations to of members of the military and their families. position PSEG as an employer of choice and One policy allows some members of the Reserve attract top talent. Forces, who are activated for a tour of duty, to return to their jobs at PSEG afterwards. Achievements Individuals with Disabilities Outreach PSEG’s diversity efforts have received external recognition. In 2015, PSEG ranked 23rd on GI PSEG has long been a partner and supporter Jobs magazine’s list of Top 100 Military Friendly of organizations that support individuals with Employers, our highest ranking over the last disabilities (well before the federal mandate). four years. We have received Readers Choice From sharing our employment opportunities recognition from Equal Opportunity magazine with local organizations such as the United as a Top 50 Employer for three years running. Way and Goodwill Industries, to our direct Our programs are consistent with industry partnerships with the Wounded Warriors – best practices for top performing companies Warriors to Work program and the NJ State according to Diversity, Inc. magazine. We have Division on Vocational Rehabilitation Services also been recognized by organizations dedicated (DVRS), PSEG always seeks to recruit a to certifying and promoting Minority and Women diverse talent pool, including individuals with Business Enterprises. We have won the NY and disabilities, for its broad range of job types and NJ Minority Supplier Development Council’s openings. In October of 2014, during Disability Corporation of the Year Award three times and Awareness Month, PSEG was honored by the Coordinator of the Year Award three times. receiving the New Jersey DVRS Employer of the Year Award in recognition for our efforts to hire

and advocate for individuals with disabilities. 50 ability to help people be their best

The PSEG Fossil procurement team spending a few volunteer hours planting seeds at a community garden in Newark, New Jersey. The vegetables grown here are sold at local farm stands.

Employee Engagement to focus on driving ongoing improvements. These action plans are also tracked and We know we will have to continue to engage progress is monitored quarterly. employees to win the race for talent. We Winning Hearts and Minds implement several employee engagement programs in keeping with this priority, and will Employee engagement is critically important continue to seek ways to win the hearts and in the short- and long-term. Our challenge minds of our employees. is to create a workplace environment where employees feel increasingly engaged and Employee Engagement Strategy empowered to be their best – building Overall engagement is measured through the satisfying careers and growing with us over PSEG Culture Survey administered every other many years. We must continue to measure year and with a pulse survey during the ‘off’ employee engagement and satisfaction, and year. PSEG’s culture survey was administered in focus on continuous improvement in taking September 2014 and all people managers have care of our employees so that they stick with us active action plans in place based on their local and continue to take care of our customers. results. Results of the Culture Survey indicated Employee Spotlights a positive trend across Alignment, Engagement, and Capabilities. This is significant as One of the elements of employee engagement PSEG compares itself to a high-performing that we are most proud of is our regular spotlight benchmark norm in the Top Quartile or 75th on employee efforts and accomplishments in Percentile. our PSEG Outlook newspaper. Throughout the newspaper, we feature employees going the We believe managers have a special role extra mile, examples of ways in which PSEG is in setting the right example. In 2015, all a good place to work, and unsung heroes in the managers with supervisory responsibilities have workplace. a People Strong Engagement performance goal ability to help people be their best 51

Corporate Citizenship The corporate-wide Diversity & Inclusion and Culture Council now stands at 95 employee members. Following the signing of an enterprise-wide In 2014, PSEG’s Corporate Social Responsibility Diversity and Inclusion Commitment Letter, work was redefined as Corporate Citizenship council and corporate leadership created a & Culture to recognize the extent to which our strategic goal, titled “People Strong,” to define deep involvement in community affairs and measurable outcomes of the council’s work. philanthropy is interwoven with our people, This goal focuses on employee retention, reputation and culture. Sustainability drives employee engagement, and diversity spend our business and citizenship goals across the with suppliers and corporate and Foundation enterprise. Strong values such as safety, integrity, giving. Two local Diversity & Inclusion councils diversity and inclusion are at the core of our have been formed with local executive culture to guide and inspire our business efforts. leadership and representation at major PSEG’s story demonstrates that corporate locations outside corporate headquarters. citizenship – like citizenship itself – is all Employee Volunteerism about involvement. We are not a company of bystanders, but of people who care, and our Employees engaged in their communities employees contribute in many ways to make strengthen our relationship with customers life better for those we serve. They take pride and community leaders. We support employee in the words “Public Service” in our company’s volunteering, volunteer grants, and employee name, and we encourage their participation in matching programs in the community. In 2014, the life of our communities. This past year we the company adopted a volunteer time release adopted a volunteer time release practice to practice that allows up to eight paid hours of open up more opportunities for employees to volunteer time for our employees to use for connect with their communities on behalf of the company-approved activities. There were 22 company. Our community role has taken on an company-sponsored volunteer events, with added dimension through the activities of the 1,749 employees participating during the year. PSEG Diversity & Inclusion Council as well as The eight-hour time release practice was utilized Carin Burwell, our Employee Resource Groups. And we are by 65 employees, most notably for the 2014 senior analyst- working to leverage the impact of the PSEG Special Olympics in June. Of the 125 volunteers, delivery projects Foundation by focusing on three key areas – the eight-hour time release practice was used and construction, sustainable neighborhoods, STEM education, by 40 percent of volunteers. In total, 24,900 volunteers her and safety and disaster preparedness – with volunteer hours were logged by employees. time at St. James signature programs in each portfolio. Power of Giving Social Services PSEG needs everyone to be able to perform at in Newark, New PSEG recognizes and rewards our most their highest capability, feel trusted, and have Jersey. the opportunity to be heard in the workplace. committed volunteers through three programs In order to achieve our operational excellence, that offer grants to non-profit organizations reliability, profitability, and customer service where our employees contribute time and objectives, we must develop our workforce to talent. PSEG’s matching gift program is open to reflect and respect our marketplace and our employees, retirees and members of our Board communities. We must develop an inclusive of Directors. Employees can receive matching culture that empowers all of our people to gifts to charitable and civic organizations up contribute to our success. to $2,500, and PSEG matched $643,700 in 2014. Employees can also receive up to 52 ability to help people be their best

(l-r) PSEG Long Island employees Brian Hassin and Alex Nyilas assemble a picnic table as part of a volunteer team effort that helped the nonprofit KaBOOM build a new playground in Central Islip, New York.

$1,000 annually in volunteer grants for their Sustainable Neighborhoods: We invest in organizations, including qualified 501(c)(3) public parks that improve the quality of life organizations, youth sports groups, and veterans, for local residents and in the environmental fire and rescue organizations. In 2014, the organizations that protect and preserve natural company provided volunteer grants totaling resources, address climate adaptation, and $92,200. Of special note are recipients of build sustainable communities. We support our Recognizing Excellence in Volunteerism organizations that anchor their communities (REV) awards, who collectively served 6,850 by providing a variety of programs and hours and garnered $34,000 in volunteer services for the whole family unit, including awards. Lastly, employees organized multiple childcare services that enable parents to work fundraising events during the year for the fulltime, mortgage and financial counseling, PSE&G Children’s Specialized Hospital, raising job placement and skills training, health care approximately $60,000 for the hospital. resources and information, and housing stability.

PSEG Foundation In 2014, we completed our fourth playground build, in partnership with KaBoom! and the In 2014, our community investments totaled town of Little Ferry, New Jersey, which was $7,038,700. The Foundation strengthened impacted by Superstorm Sandy. its strategic community investments by establishing signature programs within each Stem Education: We support programs giving portfolio that cross our service and that engage, excite and inspire students in operating territories in New Jersey, Long science, technology, engineering and math Island, the Albany region of New York State, (STEM) subjects. Now in its third year, the and Bridgeport and New Haven, Connecticut. PSEG Science SPARK Partners is our signature The Foundation invests in programs and funding program to identify organizations organizations in three key areas: sustainable that provide highly technical, hands-on STEM neighborhoods, STEM education, and safety learning experiences for youth during out-of- and disaster preparedness. school time. We also partner with key colleges and universities with strategic programs that build a pipeline of curious and prepared middle ability to help people be their best 53 and high school students, ready to pursue a The initiatives are aimed at instituting field of study in the STEM fields, particularly emergency preparedness into families’ women and minority students. We provide routines through simple tips, strategies, scholarship funding and identify real-world and activities, as well as prepare families work experiences that prepare students for with effective and comforting ways to their careers after college, through capstone respond when a disaster occurs. The app projects, internships and mentoring programs. and associated materials can be used in the home, as well as the classroom. Safety and Disaster Preparedness: In partnership with Sesame Workshop, the Since its launch in October 2014, the “Let’s Get Ready!” app has approximately 10,500 2014 PSEG Foundation launched “Let’s Get Ready!”, Foundation a disaster planning app that parents and downloads. Let’s Get Ready is available & Corporate guardians can use to prepare their children for free download in the iTunes™ and Giving for emergency situations. The app and GooglePlay™ stores for iOS™, Android™ associated educational materials are debuting and Kindle™. 21% at community events across our territory, driven • 2014 Special Olympics USA Games: by PSEG’s role as a first responder and Sesame PSE&G was a Founding Partner of the Street’s safe and trusted brand. 2014 Special Olympics USA Games, as 79% We strengthened our partnership with police, well as the proud sponsor of the Games’ fire and rescue, local officials, and other Youth Leadership Summit. We are proud of disaster response organizations to establish the more than 3,500 diverse athletes from l Charitable l Community Investments communication and response plans within all 50 states and the District of Columbia the communities we serve before the next who competed in 17 sporting activities, crisis occurs. We also educate customers, the children who participated in the Youth Leadership Summit, and our employee 2014 PSEG government and emergency responders about Foundation electric and gas safety issues. volunteers who helped to make the Games Community such an inspirational week of events. Investments Burn and trauma centers provide critical care 5% 2% when our employees and customers need it Changing the world is no easy task, but most. We support burn and trauma centers that is exactly what more than 100 student throughout PSEG’s service and operating leaders, both with and without intellectual disabilities, joined together to do in a territories in New Jersey, Connecticut and Lorem ipsum dolor New York. weeklong Youth Leadership Summit. The sit amet, consectetur summit, held during the 2014 Special adipiscing93% elit. Lorem Spotlight Ideas: Olympics USA Games, took place at the Lawrenceville School in Lawrenceville, New •  PSEG Goes to Sesame Street – Jersey, and PSE&G was the proud sponsor. l Safety Let’s Get Ready and be Here for Each During the week-long summit, students l Sustainable Neighborhoods Other!: The PSEG Foundation partnered l Education (STEM) from across the country shared how sports with Sesame Workshop to develop Let’s Get can be a platform to create an environment Ready: Planning Together for Emergencies, where everyone feels safe, comfortable and and Here For Each Other: Helping Families supported. The summit also served as a After Emergencies, free emergency forum for youth to enhance the knowledge preparedness and response initiatives in and skills necessary to create an effective English and Spanish. campaign for positive change in their schools and communities, resulting in greater acceptance of children with disabilities. 54 ability to help people be their best

PSEG and Sesame Street have launched a new partnership dedicated to helping families prepare for emergencies, providing tools such as free apps in English and Spanish.

• The PSEG 100: PSEG has more than 12,000 students about what an energy company looks employees across multiple states representing like and where energy comes from.

men and women from a rich variety of CHECK OUT OUR 100 PEOPLE WEBSITE, HTTPS://WWW.PSEG. backgrounds and expertise. But could you COM/INFO/COMMUNITY/NEW_SITE/100PEOPLE.JSP TO LEARN THE PERSONAL STORIES OF THESE EMPLOYEES THROUGH conceptualize what a snapshot of PSEG would PHOTOS AND VIDEO INTERVIEWS ABOUT THEIR JOBS, HOBBIES look like as just 100 people? That’s what AND PASSIONS. the PSEG Foundation set out to do when it • The Power of Generosity: The PSEG partnered with the 100 People Foundation. Foundation awarded a $150,000 grant to Using the 100 People Foundation philosophy the Connecticut Burn Center at Bridgeport and methodology, we set out to identify the Hospital in Bridgeport. The donation – along 100 people that could best represent our with matching proceeds from the annual company. The result was a diverse group of Bridgeport Harbor Station Golf Tournament, employees that helped create a community held each summer for more than 20 years – that represents PSEG by job type and funded the complete renovation of a nursing company-wide characteristics. Employees station at the facility. from varied positions, levels and tenure were • Rutgers Students “WIN” at PSEG nominated by their peers as the people they Nuclear: PSEG Nuclear hosted a group of most admire. aspiring female engineers from Rutgers Some of the employees chosen to help University’s Douglass Campus. A highlight of represent PSEG as 100 people served in their visit was a question and answer session the military where they learned about great with employees from the Women in Nuclear teamwork, or are the third generation of their employee resource group, who shared their family to work for PSEG. Several nominees experiences and offered career advice to the were the first members of their family to attend students. college. It is this diverse culture that makes us LEARN MORE ABOUT PSEG’S CITIZENSHIP EFFORTS AT: HTTPS://WWW.PSEG.COM/INFO/COMMUNITY/NEW_SITE/ who we are: a great place to work and a proud INDEX.JS member of the communities we serve.

As part of the 100 People Foundation’s larger global initiative, our project will be used to teach Forward Looking Statement: Readers are cautioned that the statements contained in this communication about us and our subsidiaries’ future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical, are forward- looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995.Although we believe that our expectations are based on reasonable assumptions, we can give no assurance they will be achieved. There are a number of risks and uncertainties that could cause actual results to differ materially from what may actually occur. A discussion of some of these risks and uncertainties is contained in our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission (SEC). These documents address in further detail our business, industry issues and other factors that could cause actual results to differ materially from those indicated in this communication. Forward looking statements made in this communication only apply as of this date. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if our internal estimates change, unless otherwise required by applicable securities laws. Please click here to read our complete Forward Looking Statement. Public Service Enterprise Group Incorporated 80 Park Plaza Newark, NJ 07102 973.430.7000 www.pseg.com