20. Public Service Enterprise Group Incorporated (NYSE:PEG)
Year To Date Share Price Gain: 42.44%
Number of Hedge Fund Investors in Q2 2024: 34
Public Service Enterprise Group Incorporated (NYSE:PEG) is the first utility stock on our list. It is a regulated utility, which means that the firm has to negotiate with state regulators to set its electricity prices. This creates a double edged sword for Public Service Enterprise Group Incorporated (NYSE:PEG) since while at one end the firm can keep rates high even if excess supply lowers prices, on the other hand, it risks its margins if generation costs grow. The firm also has exposure to clean energy through a solar power generation capacity of 158 megawatts in its portfolio. October has been an important month for Public Service Enterprise Group Incorporated (NYSE:PEG) as its negotiations with New Jersey regulators enabled it to secure its first price hike in six years. AI related bullishness for the firm is primarily due to its presence in New Jersey and plans to supply data centers with power from nuclear plants.
Public Service Enterprise Group Incorporated (NYSE:PEG)’s management shared insights about its data center plans during the Q2 2024 earnings call:
“We also continue to pursue potential incremental investment opportunities for future regulated growth. Along those lines, PSE&G is experienced an increase in new business requests and feasibility studies from potential data center customers across our service area compared with 2023 activity, which combined with increased electric vehicle charging is expected to drive load growth and system investment needs in the future. Switching to regulated transmission solicitations, which are scheduled for this summer, PSE&G expects that the BPU will announce the winner or winners of the pre-built offshore wind infrastructure during the second half of 2024.
Last month, the BPU postponed its second state agreement approach process to procure transmission to support offshore wind generation, while it evaluates the impact of FERC and PGM activity on long-term transmission planning, cost allocation and interconnection queue reform. The BPU may reevaluate this timing and the need for a second SAA solicitation in six months, which would be this coming December. PJM opened the 2024 regional transmission Expansion Plan Window 1 solicitation earlier this month, which reflects their higher load growth forecast on the 2029 to 2032 plan horizon. That has been influenced by increased electrification expectations and data center load growth throughout PJM. We are evaluating the Window 1 solicitation for potential opportunities to bid this September.
Now crossing the Hudson for a moment, and as expected, the Long Island Power Authority opened a request for proposal process to select the manager to operate their electric grid. Our existing operating services agreement and power supply contract with LIPA runs through the end of 2025. We intend to submit proposals into their RFP process and LIPA is expected to make selections early next year. At PSEG Power, we are also continuing to explore opportunities for the potential sale of electricity from our nuclear facilities pursuant to long-term agreements to supply large power energy users such as data centers and hydrogen producers.”
