17. Public Service Enterprise Group Incorporated (NYSE:PEG)
Number of Hedge Fund Investors In Q2 2024: 34
Sector: Utilities
Public Service Enterprise Group Incorporated (NYSE:PEG) is a regulated American utility headquartered in Newark, New Jersey. The fact that it’s a regulated utility means that the firm is dependent on regulators to secure lucrative return on equity (ROE) for its power generation projects. These also mean that if it is able to secure high ROE for its projects, then Public Service Enterprise Group Incorporated (NYSE:PEG) is insulated from power prices dropping during periods of lower demand. October was a key month for the firm on the regulatory front as it was able to secure its first price hike in six years from New Jersey regulators. Public Service Enterprise Group Incorporated (NYSE:PEG) also plans to grow its renewable energy portfolio using nuclear energy to power data centers and benefit from the booming AI demand.
Public Service Enterprise Group Incorporated (NYSE:PEG)’s management commented on its plans for the data center sector 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.”
