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Public Service Enterprise Group Incorporated (NYSE:PEG)
Q4 2017 Earnings Conference Call
Feb. 23, 2018, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. My name is Shelby and I am your event operator today. I would like to welcome everyone to today's conference, Public Service Enterprise Group Fourth Quarter 2017 and Year-End Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session for members of the financial community. At that time, if you have a question, you will need to press "*" and the "1" on your telephone keypad. To withdraw your question, press "#."

As a reminder, this conference is being recorded today, February 23, 2018, and will be available for telephone replay beginning at 2:00 p.m. Eastern Time today until 11:30 p.m. Eastern Time on Friday, March 2, 2018. It will also be available as an audio webcast on PSEG's corporate website at www.pseg.com. I would now like to turn the conference over to Kathleen Lally. Please go ahead.

Kathleen A. Lally -- Vice President, Investor Relations

Thank you, Shelby. Good morning, everyone. Thank you for participating in our earnings call. As you are aware, we released our fourth quarter and full-year 2017 earnings results earlier today. The release and attachments as mentioned are posted on our website at www.pseg.com under the Investors section. We also posted a series of slides that detail operating results by company for the quarter and year. Our 10-K for the period ended December 31, 2017 is expected to be filed early next week.

I'm not going to read the full disclaimer statement or the comments we have on the difference between operating earnings and GAAP results, but I do ask that you all read those comments contained in our slides and on our website. The disclaimer statement regarding forward-looking statements details the number of risks and uncertainties that could cause actual results to differ materially from forward-looking statements made therein. And although we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if our estimates change, unless required by applicable securities laws.

We also provide commentary with regard to the difference between operating earnings and adjusted EBITDA and net income reported in accordance with generally accepted accounting principles in the United States. PSEG believes that the non-GAAP financial measures of operating earnings and adjusted EBITDA provide a consistent and comparable measure of performance to help shareholders understand operating and financial trends but should not be considered an alternative to our corresponding GAAP measure, net income.

I'm now going to turn the call over to Ralph Izzo, Chairman, President, and Chief Executive Officer of Public Service Enterprise Group. And joining Ralph on the call is Dan Cregg, Executive Vice President and Chief Financial Officer. At the conclusion of their remarks, there will be time for your questions. We ask that you limit yourself to one question and one follow-up question and we hope to get to everyone's questions. Thank you.

Ralph Izzo -- Chairman, President, and Chief Executive Officer

Thank you, Kathleen, and thanks, everyone, for joining us today. This morning we reported non-GAAP operating earnings for the fourth quarter of 2017 of $0.57 per share versus non-GAAP operating earnings of $0.54 per share earned in the fourth quarter of 2016. Non-GAAP operating earnings for the full-year of $2.93 per share versus 2016's non-GAAP operating earnings of $2.90 per share were above the midpoint of our guidance range, which was $2.80 to $3.00 per share.

Our GAAP results for the full year of $3.10 per share included a one-time, non-cash benefit associated with the revaluation of deferred tax liabilities at Enterprise and PSEG Power associated with a reduction in the federal tax rate and expenses associated with our decision to retire the Hudson and Mercer coal-fired generating stations in June of '17. Details on the results for the quarter and the full-year can be found on Slides 5 and 6. Successful execution of our capital program at PSE&G and increased output, coupled with strong cost control at PSEG Power, offset earnings weakness experienced earlier in the year from abnormal weather conditions.

Non-GAAP operating earnings from our regulated utility business grew 8.6% in 2017, as PSE&G's investment program expanded rate base by 12.5% to $17 billion at the end of the year. The utilities earnings have grown at an annual rate of approximately 13% over the past five years, which is in line with its growth in rate base over this timeframe. The growth in earnings occurred with PSE&G maintaining cost discipline while successfully implementing infrastructure programs that upgraded its electric and gas systems to make them both more reliable and resilient.

Importantly, PSE&G has achieved these results as customer bills have declined. This past January, the utility filed its first distribution base rate case since 2010. The filing, which was required by the 2014 Energy Strong settlement, calls for a 1% increase in revenue as it incorporates a reduction in revenue associated with the decline in the federal tax rate. Also in January, PSE&G updated its 2018 annual transmission formula rate with the Federal Energy Regulatory Commission. The update reflecting the lower federal corporate tax rate reduced the utility's annual transmission revenue requirement by $148 million.

The timing of the reduction in the federal tax rate and the base rate filing places us in the position to pass along tax savings to our customers and keep rates low, allowing us to continue to improve our aging infrastructure. As important, PSE&G's achievements allowed us to maintain our best in class reliability. For the 16th year in a row, PSE&G's work to protect and strengthen the system yielded recognition as the most reliable electric utility in the mid-Atlantic region.

Also during the year, the New Jersey Board of Public Utilities approved PSE&G's plans to expand its investment in energy efficiency by $69 million. PSE&G also filed with the BPU plans to extend its innovative Gas System Modernization Program. The extension, otherwise known as GSMP2, would accelerate the pace of replacement of aging cast iron and unprotected steel. The program would entail replacing 250 miles of pipe per year over five years at a total cost of $2.7 billion. We hope to have a decision on this program in the second quarter.

The GSMP2 filing is modeled on the process outlined in the Infrastructure Investment Program, and if I refer to that in the future, I'll just say IIP, which was approved by the BPU in January. The Board's approval of IIP provides for a rate recovery mechanism that encourages and supports the continued safety, reliability, and resiliency of utility infrastructure, which is essential for economic growth in New Jersey.

In the coming months, you should expect PSE&G to seek approval, once again, under the IIP process to extend its Energy Strong related investment programs. We also expect to make a filing to broaden our investment in energy efficiency. An expansion of energy efficiency is one of the best means of achieving the state's clean energy goals and simultaneously limiting growth in the customer bill.

Now let me turn my attention to PSEG Power. Power's non-GAAP operating earnings for the full-year of $505 million, or $1.00 per share, were at the upper end of our guidance range. Cost discipline across the fleet and strong operations from Power's nuclear generating assets supported the better than forecasted results. Power's nuclear fleet operated at 93.9% capacity factor for the year, generating record electric output of 31.8 terawatt hours.

PSEG Power has also made progress on construction activities related to its three new natural gas combined-cycle generation stations. Two plants, the Keys and Sewaren stations, are expected to be operational during the second quarter of this year, and Bridgeport Harbor 5 is expected to achieve commercial operation during the second quarter of 2019. Together these units represent 1,800 megawatts of efficient, clean, gas-fired capacity that will improve Power's competitive position.

Safe and reliable operation has been a hallmark of PSEG Power. The cold weather experienced early in 2018 reinforced the importance of Power's diverse fleet and, of course, making sure the assets were available when needed to meet demand. The nuclear plants ran at full power, providing base load capacity for every day demand, as a shortage of natural gas required some of Power's stations to operate on oil. Power's management team has continued to drive efficient operations at its fossil stations, which include the early retirement of its Hudson and Mercer coal-fired stations, as well as at nuclear. Controlling costs is vital but we face continued challenges in maintaining operations, particularly at our nuclear plants, as the average price for Power's energy hedges is expected to decline by $5.00 per megawatt hour in 2018, from $45.00 per megawatt hour in 2017, with even further erosion foreseen in '19.

On the policy front, as you know, we have been focusing on raising awareness of the financial condition of our nuclear generating assets and communicating to the state of New Jersey the detrimental impact closure would have on the state's cost of electricity, its air quality, and overall economy. The loss of the approximately 32 terawatt hours of clean electric energy produced by Power's nuclear generation in 2017 would represent a severe setback to the state's ability to meet its clean energy goals and result in crushing economic impacts due to resulting increases in electricity prices and major job losses. We remain involved in discussions with key stakeholders here in New Jersey and with those in charge at the wholesale energy market at FERC and PJM to secure the long-term viability of our nuclear generation assets.

A bill as proposed in the New Jersey legislature would value the attributes of nuclear and create a safety net for our at-risk nuclear capacity. The bill also addresses the state's path toward a clean energy future. We are pleased that the legislature is giving this issue the careful attention it deserves and hope for timely resolution. But the risk of closure remains without a change in the financial condition of nuclear. To that end, Power recorded a $276 million increase in its asset retirement obligation liabilities at the end of 2017 to take into account a higher assumed probability of early retirement of its nuclear units.

Our financial condition is strong given the focus we have placed on maintaining a healthy balance sheet that supports our investment goals. Our balance sheet continues to provide us with the competitive advantage as we adapt to recently enacted changes in the federal tax code. We ended 2017 with strong credit metrics, which support continued growth in our regulated investment program without the need to issue equity. And this position is unchanged with tax reform. Our capital program for the five-year period ending in 2022 has expanded to $13 billion to $15 billion from the $13 billion level outlined a year ago. And it remains focused on investments that improve the reliability and efficiency of our operations, which also advance the state's plans to a clean energy future.

The utilities investment program of roughly $11.5 billion to $13.2 billion, which accounts for 90% of the total PSEG program, addresses customers' desires for reliable, efficient, and clean energy and provides for continuation of our projected 7% to 9% compound annual growth rate for rate base off a higher 2017 base. Also, given the impacts of tax reform, we feel comfortable achieving the midpoint of that range.

PSEG Power's major capital program will be complete in 2019, following the commercial operation of Bridgeport Harbor 5. The start-up of that 485 megawatt, gas-fired combined-cycle unit will represent the conclusion of Power's $2 billion capital investment in three new gas-fired combined-cycle stations, including the previously mentioned Keys Energy Center and Sewaren, which as I said are scheduled to start up by the middle of this year. Power's focus will be on efficient operations, improving the returns on their generating assets, and resolving the state of its nuclear units.

PSEG's strategy implemented a decade ago has transitioned our business mix to one that is more aligned to our regulated earnings. PSE&G, our regulated company, has grown to represent two-thirds of our consolidated non-GAAP operating earnings. PSEG Power, focused on improving its operational efficiency and maintaining a strong balance sheet, continues to provide strong cash flow in support of our investment program. The growth in our investment program and the disciplined approach to O&M have overcome a decline in energy prices over the past five years and produced annual growth in consolidated non-GAAP operating earnings of approximately 4% during that time.

Despite the challenges we continue to face in the wholesale markets, especially at our nuclear units, the continued successful investment in regulated programs have provided reliability and quality service to our customers. And the benefits of the reduction in the federal tax rate are expected to support continued growth in earnings. For 2018, we are forecasting consolidated non-GAAP operating earnings of $3.00 to $3.20 per share, which at the midpoint represents 6% growth in earnings over 2017. The Board of Directors' recent decision to increase the company's common dividend 4.7% to the indicative annual rate of $1.80 per share is an acknowledgement and expression of confidence in our strategy and outlook.

It needs to be said that our success is the result of the outstanding effort of our dedicated workforce and we are positioned to continue to execute on our strategy to provide long-term value to our shareholders as we meet the needs of our customers in the communities we serve. I'll now turn the call over to Dan for more details on our operating results and will be available for your questions after his remarks.

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Thank you, Ralph. And good morning, everyone. As Ralph said, PSEG reported non-GAAP operating earnings for the fourth quarter of $0.57 per share versus $0.54 per share for the fourth quarter of 2016. Our earnings in the quarter brought non-GAAP operating earnings for the full-year to $2.93 per share, a 1% increase over 2016's non-GAAP operating earnings of $2.90 per share, and at the upper end of our non-GAAP operating earnings guidance for 2017 of $2.80 to $3.00 per share.

On Slide 5, we have provided you with a reconciliation of non-GAAP operating earnings to net income for the quarter. We have provided you with information on Slide 11 regarding the contribution to non-GAAP operating earnings by business for the quarter. Slides 12 and 14 contain waterfall charts that take you through the quarter-over-quarter and year-over-year net changes in non-GAAP operating earnings by major business. I will review each company in more detail starting with PSE&G.

PSE&G reported net income for the fourth quarter of 2017 of $0.43 per share, compared with $0.38 per share for the fourth quarter of 2016. PSE&G's full-year 2017 net income was $973 million, or $1.92 per share, compared with net income of $889 million, or $1.75 per share, in 2016. Non-GAAP operating earnings for the full-year were $963 million, or $1.90 per share, an 8.5% increase over 2016 non-GAAP operating earnings of $1.75 per share.

As shown on Slide 16, PSE&G's net income in the fourth quarter continued to benefit from a return on its expanded investment in transmission and distribution infrastructure, which more than offset an increase in O&M. Growth in PSE&G's investment in transmission improved quarter-over-quarter net income comparisons by $0.03 per share and recovery in investment made in gas distribution under PSE&G's Energy Strong and Gas System Modernization Programs increased quarter-over-quarter net income by $0.01 per share. Colder than normal weather as compared to more normal weather conditions in the year ago quarter improved net income by $0.01 per share. An increase in O&M expenses associated with preventative and corrective maintenance reduced quarter-over-quarter net income by $0.02 per share.

Electric sales on a weather-normalized basis modestly declined 0.4% for the year as energy efficiency and solar net metering offset growth in the number of customers. Weather-normalized gas sales for the year increased 1.2% led by growth from commercial and industrial customers. PSE&G's distribution rate base filing provides it with an opportunity to reflect current estimates of electric and gas sales growth and proposes improvements in its rate design, including decoupling and higher monthly fixed charges offset by lower volume metric rates to minimize the impact of sales variability. This aligns our interest with achieving greater energy efficiency results. Details of the base rate filing are outlined on Slide 18. The filing is based on a test year ending June 30, 2018, with some adjustments for the following months, including a rate base of $9.6 billion as of December 31, 2018.

And as Ralph mentioned, PSE&G filed for a 1% increase in revenue, or $95 million. In keeping with maintenance of PSE&G's credit metrics, the request is based on a cap structure consisting of 54% common equity and reflects a 10.3% return on equity. PSE&G's filing took into account approximately $130 million reduction in its annual revenue requirement as a result of the federal corporate income tax rate reduction from 35% to 21% and, in addition, provides for a one-time credit for estimated excess income tax collected from January 1, 2018 to the time rates go into effect.

PSE&G is also proposing to increase the amount of tax credits flowed back to customers in subsequent years. This would result in rate decreases, which would have the effect of offsetting the impact on the customer bill associated with investments such as the GSMP2 capital program. Pursuant to a recent BPU order, we expect to make a filing to lower our rate sooner by April 1st, to account for the lower federal tax rate, and will update our rate case filing accordingly. A decision on the base rate filing is anticipated in the fourth quarter.

PSE&G has separately updated its transmission formula rate filing for 2018 to incorporate the lower federal tax rate. The update reduced its annual revenue requirement by $148 million from the original filing, which called for an increase in revenue of $212 million. This adjustment has no impact on earnings expectations.

PSE&G's investment of $3.1 billion in its transmission and distribution infrastructure in 2017 provided for approximately 13% growth in rate base to $17 billion. Of this amount, PSE&G's investment in transmission has growth to represent 46%, or $7.8 billion, of the company's consolidated rate base at the end of 2017. Supported by the ongoing transmission and distribution investment program, we are forecasting continued in PSE&G's net income to a range of $1 billion to $1.3 billion in 2018.

Now let's turn to Power. As shown on Slide 21, PSEG Power reported non-GAAP operating earnings of $0.20 per share compared with non-GAAP operating earnings of $0.13 per share a year ago. The results for the quarter brought Power's full-year non-GAAP operating earnings to $505 million, or $1.00 per share, compared to 2016's non-GAAP operating earnings of $514 million, or $1.01 per share. Power's adjusted EBITDA for the quarter and the year amounted to $196 million and $1.172 billion respectively, and this compares with adjusted EBITDA for the fourth quarter of 2016 of $155 million and adjusted EBITA for the full-year 2016 of $1.201 billion. We have provided you with more detail on generation for the quarter and for the year on Slides 22 and 23. The earnings release as well as the earnings slides on Pages 12 and 14 provide you with a detailed analysis of Power's operating earnings quarter-over-quarter and year-over-year from changes in revenue and cost.

Power's earnings benefited from an increase in capacity prices in New England and PJM, which improved quarterly net income comparisons by $0.02 per share. A 2% increase in output improved net income comparisons by $0.01 per share, as colder than normal weather resulted in higher gas send out, which increased net income by $0.01 per share. A decline in the average price received on energy hedges of $4.00 per megawatt hour was partially offset by an increase in market prices on unhedged output, which combined to reduce quarterly net income by $0.01 per share. A decline in O&M expense improved net income comparisons by $0.03 per share. A decline in depreciation expense associated with the retirement of Hudson and Mercer, as well as a decline in interest and taxes, combined to improve fourth quarter net income comparisons by $0.01 per share.

Gross margins in the fourth quarter increased to $38.00 per megawatt hour from $37.00 per megawatt hour and Power prices held up vis a vis gas prices in response to the colder than normal weather. For the year, gross margins declined to $38.00 per megawatt hour from $40.00 per megawatt hour, given a decline in average hedge prices for energy.

Now let's turn to Power's operations. Output from Power's generating facilities decreased 2% in the fourth quarter and quarterly comparisons were influenced by the timing of nuclear plant refueling outages and increased demand in response to colder than normal weather during the month of December. Based on results from the fourth quarter, output for the year of 50 terawatt hours was stronger than the forecast we provided you at the end of the third quarter, which called for full-year output of 49 to 50 terawatt hours.

The nuclear fleet operated at an average capacity factor of 89.9% in the fourth quarter and the fleet's performance in the fourth quarter resulted in a full-year capacity factor of 93.9%, producing record electric output for the year of 31.8 terawatt hours. The fleet's output was aided by strong performance from Power's 100% owned Hope Creek nuclear plant, which operated at a 100% capacity factor for the year. And based on our normal 18-month refueling cycle, Hope Creek is scheduled for refueling this spring, the spring of 2018.

Power's gas-fired combined-cycle fleet operated at an average capacity factor of approximately 40% for the quarter and approximately 47% for the year, producing 13.6 terawatt hours of electric energy for the year. Output from the coal fleet declined slightly during the quarter as a result of outage work at Keystone, but for the year, output from the coal fleet increased 12% as the fleet's competitiveness benefited from an increase in gas prices.

For 2018, with the addition of Keys and Sewaren combined-cycle units, Power's forecasting an increase in output to 55 to 57 terawatt hours. Following completion of the recent basic generation, or BGS auction, in New Jersey, approximately 80% to 85% of production for the year is hedged at an average price of $40.00 per megawatt hour. Power is forecasting a further increase in output for 2019 to 59 to 61 terawatt hours, with a full year of Keys and Sewaren in operation and a partial year from the new combined-cycle unit at Bridgeport Harbor. And for 2020, Power is forecasting output of 63 to 65 terawatt hours.

Approximately 55% to 60% of 2019's expected output has been hedged at an average price of $38.00 per megawatt hour and approximately 25% to 30% of 2020's expected output has been hedged at an average price also of $38.00 per megawatt hour. An update of Power's hedge position is provided on Slide 26. And as you can see, Power has hedged its base load nuclear and coal output for 2018 and has mostly hedged in 2019. The gas-fired combined-cycle assets remain more open to the market during those years and will be available to take advantage of spark spread opportunities that have improved based upon recent fluctuations in commodity prices. The outlook for 2018 and 2019 has improved since our last update based on increase in sparks in the region and power prices have not declined to the same degree as gas.

Power's non-GAAP operating earnings for 2018 are forecast at $485 million to $560 million and the forecast represents non-GAAP adjusted EBITDA for the full-year 2018 of $1.075 billion to $1.180 billion.

PSEG Enterprise and Other reported net income for the fourth quarter of 2017 of $126 million, or $0.25 per share, compared to net income of $11 million, or $0.02 per share, for the fourth quarter of 2016. For the full-year, PSEG Enterprise and Other reported net income of $122 million, or $0.24 per share, which compares to a net loss in 2016 of $20 million, or $0.04 per share. And the results for 2017 include a one-time, non-cash earnings benefit of $147 million related to the reduction in the federal corporate tax rate, resulting in a decrease in energy holdings' deferred tax liabilities, partially offset by an after tax charge taken earlier in the year related to ongoing challenges facing the energy arena.

For the fourth quarter of 2017, PSEG Enterprise and Other reported a non-GAAP operating loss of $21 million, or $0.04 per share, compared to non-GAAP operating earnings of $17 million, or $0.03 per share, in the year ago quarter. The results for the fourth quarter brought PSEG Enterprise and Other non-GAAP operating earnings for the full-year to $20 million, or $0.03 per share, versus $72 million, or $0.14 per share, in 2016. The decline in non-GAAP operating earnings in the fourth quarter reflects the impact of a $15 million after tax contribution to the PSEG Foundation, as well as certain tax items at the parent and PSEG Holdings and the absence of certain tax items in the fourth quarter of 2016 at PSEG Energy Holdings.

For 2018, non-GAAP operating earnings for PSEG Enterprise and Other, which are driven by PSEG Long Island and partially offset by parent interest expense, are forecast at $35 million.

I want to spend just a moment on the subject of tax reform. PSEG is a net beneficiary under the Tax Cut and Jobs Act of 2017 and our financial flexibility remains strong. PSE&G, as mentioned, will be returning 100% of the benefit from the decline in the federal tax rate to its customers. And the recently filed distribution base rate request reflects a $130 million annual reduction in revenue associated with the lower federal tax rate and, as mentioned, we amended our 2018 transmission formula rate to incorporate the decline in revenue of $148 million associated with the lower federal tax rate.

Net income from PSEG Power and Enterprise is expected to benefit from the decline in the federal tax rate and our estimate of 2018's non-GAAP operating earnings reflects an improvement in earnings of approximately $0.16 per share. PSE&G's cash flow will be negatively impacted by the elimination of bonus depreciation and lower tax rates for ongoing tax depreciation. PSEG Power's cash flow, on the other hand, is expected to benefit from its ability to expense 100% of its capital expenditures. PSEG Power's cash flow in 2018 will also benefit from the reduction in the federal tax rate, as well as a decline in capital spending in 2018 of about $400 million with the mid-2018 completion of construction at both Keys and at Sewaren.

Given our strong balance sheet and low debt balance, we estimate that interest expense at PSEG Power and Enterprise will remain fully deductible for tax purposes. The reduction in the federal tax rate under the Tax Act also reduced deferred tax liability of PSEG Power and Enterprise, which was originally recorded based on the higher 35% rate. At PSEG Power and Energy Holdings, we recorded one-time, non-cash earnings benefits in the fourth quarter of 2017 of $588 million and $147 million, respectively, resulting from this reduction in deferred tax liabilities. PSE&G has excess deferred taxes of approximately $2.1 billion as of December 31, 2017, and has recorded the impact of these excess deferred taxes as a regulatory liability.

Approximately 70% of PSE&G's excess deferred taxes are deemed protected under the IRS normalization rules, which requires the protected deferred taxes be returned to customers over the life of the remaining asset that generated the deferred taxes in the first place. Given the long-lived nature of utility assets, it will take many, many years for all of these protected taxes to be returned to customers. The remaining 30%, or about $600 million, some of which were included in our distribution base rate filing, will be returned to customers over a time frame that will be determined in discussions with the BPU and with FERC. Of course, as you know, the loss of bonus depreciation and reduction in PSE&G's deferred tax balance serves to increase its rate base. We estimate that these two items combined will increase the annual growth in PSE&G's rate base by approximately 1% through 2022.

The net result of the change in federal tax law and PSEG's consolidated cash flow and credit metrics is manageable given our business mix and the strength of our balance sheet. We do not anticipate the need to issue equity to finance our capital program and we continue to have excess balance sheet capacity to finance further growth.

As Ralph mentioned, our financial condition remains strong. We closed 2017 with $313 million of cash on hand and debt representing 49.6% of our consolidated capital position and debted Power approximating 29% of its capital base. At year-end, Power's debt position was just over 2.1 times the midpoint of our forecasted 2018 adjusted EBITDA. We are guiding to a non-GAAP operating earnings at PSEG for 2018 of $3.00 to $3.20 per share, which is a 6% increase over 2017. And the common dividend was recently increased 4.7% to the indicative annual level of $1.80 per share. This represents a 58% payout of earnings at the midpoint of our 2018 guidance and builds on the 3.4% annual rate of growth in the dividend over the last ten years.

Shelby, we are now ready to take questions.

Questions and Answers:

Operator

Ladies and gentlemen, we will now begin the question-and-answer session for members of our financial community. If you have a question, please press "*" and "1" on your telephone keypad. If your question has been answered and you wish to withdraw your request, you may do so by pressing "#". If you are on a speaker phone, please pick up your handset before entering your request. One moment, please, for the first question.

And your first question comes from Julien Smith of Bank of America Merrill Lynch.

Josephine Moore -- Bank of America Merrill Lynch -- Analyst

Good morning, everyone. It's Josephine here.

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Good morning.

Morning, Josephine.

Josephine Moore -- Bank of America Merrill Lynch -- Analyst

I just was wondering, could you provide a little bit of commentary on your outlook of the ongoing PJM price formation reform discussion as well as the potential for comprehensive energy legislation in New Jersey?

Ralph Izzo -- Chairman, President, and Chief Executive Officer

Sure, Josephine. So as you know, there's a due date of, I believe it's sometime in the first week of March, where each RTO is supposed to get back to FERC with respect to the FERC decision to close the DOE offer and to ask the question about fuel diversity and resiliency of the grid. There have been very public conversations and statements by PJM that they believe, in particular, their inflexible unit challenges are things that need to be corrected in the market. These showed up in abundance during -- it's not called the Polar Vortex. They had some other name for it this past January. Some sort of a cold bomb or something. Where Andy Ott testified in front of the Senate Energy and Natural Resources Committee that there had to be $4 million to $5 million in daily uplift payments. So without having control of the pen, I fully expect PJM management to submit comments that they have some improvements to make in their current tariff if prices, in fact, are going to be the way in which the market is reliably dispatched. Because there continues to be out-of-market payments that are relied upon to achieve that.

Switching gears on you and moving over to New Jersey, we've had some very good conversations. We had a good day yesterday with a comprehensive energy bill, which included our nuclear concerns, reported out of the Senate Budget Committee and the Assembly Telecommunications and Utilities Committee, getting further reference in the Assembly to its budget committee, its appropriations committee, if you will. And I think the encouraging news there is that everyone who has testified, and we have now had four hearings on this, I think, with the exception of our competitors, have said they don't want to see those plants close. And our competitors obviously want to see those plants close because that means higher prices. I just have a high degree of confidence that New Jersey policymakers understand the value of those plants and will do the right thing. But, of course, one cannot guarantee any outcome.

Josephine Moore -- Bank of America Merrill Lynch -- Analyst

Great. Thank you. And then just one follow-up here. You talk about a roughly $80 million benefit from tax reform at Power but increased guidance by only $50 million. Are there any headwinds that limit the ability to fully recognize that tax reform benefit?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Yeah, I think if you think about the overall impact year-over-year, we referenced the $0.16 related to tax reform, but of course there are other impacts as you step from year to year. We'll see changes in capacity prices, which will help, but we also have a reduction in the average price that we sold our power. So that's a headwind that we have been fighting and, as you mentioned that word, that's exactly what it is.

Josephine Moore -- Bank of America Merrill Lynch -- Analyst

The $5.00 reduction? Okay.

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Yeah. Per megawatt hour. So you think about that across the fleet and then you compare that to an uplift in capacity and a benefit from tax reform. Those are your biggest pieces.

Josephine Moore -- Bank of America Merrill Lynch -- Analyst

Awesome. Great. Thank you very much.

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Thanks, Josephine.

Operator

Your next question comes from Angie Storozynski of Macquarie Capital.

Angie Storozynski -- Macquarie Capital -- Analyst

Thank you. So I understand that you have a pending rate case for your utility but your guidance for 2018 seems to imply a relatively low pickup in earnings power of the utility versus what we have seen in the past. Is this just because you are waiting for your rates to be shored up in the rate case?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Yeah, Angie, if you think about the timing of the rate case, we are essentially saying that we would intend to see rates at the end of the year. I think we referenced fourth quarter in our prepared remarks. So I think a big part of it is just related to the rate relief on the distribution side coming at the end of the rate case, which would be toward the end of the year.

Angie Storozynski -- Macquarie Capital -- Analyst

But how about your previous expectations that there would be a rate base growth of around, I forget, 8% or 9% and a commensurate increase in earnings? Does this still hold? I mean, granted that we're still waiting for the outcome of the rate case.

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Yeah. I think, if you think about the two sides of the business, Angie, on the transmission side, that's going to move along by virtue of the formula rate, which is always the norm. But when we take a look at the utility side of the business, I wouldn't expect to see anything different. We have a 6% increase to the midpoint of the range. And with the rate case following on later in the year and as we move into '19, I think that would bridge the gap for you.

Angie Storozynski -- Macquarie Capital -- Analyst

Great. On the Power side, so it seems like you've marginally reduced your expectations of volumes for the BGS option. There's been also some news or press coverage of your interest in the retail business. How should we think about it, how you are trying to shape up the merchant power earnings, given the weakness in the load curves?

Ralph Izzo -- Chairman, President, and Chief Executive Officer

Yeah. So I think, Angie, we've been pretty consistent that the retail business is a defensive play. It's primarily targeted at improving the negativity in basis differentials that we've experienced. We're looking at it as a nice supplement, if you will, to the diminution of the BGS load contract that we have seen occur over the years. What did change, probably about a year or so ago, was our recognition that we would not find an acquisition opportunity to just kind of step into a New Jersey-focused, PJM-centric opportunity. So we're building it organically. And that's going fine, but when you do something organically, it's a little bit more gradual than just stepping into it. So no change in strategy there at all.

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

And, Angie, as we step from year to year, we will have a BGS auction roll off. Right? So the state goes out to auction a third of the load each year. So over three years, they auction everything. And so as we step from year to year to year, there could be some modest differences within volumes of the number of tranches that we would have as we go from auction to auction to auction.

Ralph Izzo -- Chairman, President, and Chief Executive Officer

And, Angie, I just want to couple on to something that Dan mentioned before. So the rate base growth, we're still saying is 7% to 9% and comfortable with the midpoint. But remember we had a fair amount of capital that was deployed coming at the back end of GSMP1 and Energy Strong that is part of the rate case proceeding we're in now. So the 12% growth in rate base that you saw last year, by necessity, as Dan correctly pointed out, is awaiting rate relief at the end of the year. And when you get it at the end of the year, you just -- by now, Dan and I are repeating ourselves, it doesn't give you the full 12 months of impact. So I think we're OK there.

Angie Storozynski -- Macquarie Capital -- Analyst

Thank you. Thanks.

Operator

Your next question comes from Praful Mehta of Citi Investments.

Praful Mehta -- Citigroup Global Markets -- Analyst

Thanks so much. Hi, guys.

Ralph Izzo -- Chairman, President, and Chief Executive Officer

Hi, Praful.

Praful Mehta -- Citigroup Global Markets -- Analyst

Hi. So just, first, we want to just clarify, in terms of tax reform, what is exactly built into the forecast? I know on the Power side, it sounds like you've incorporated the lower taxes. On the utilities side, the DTL refund, the unprotected refund, it didn't sound like it was. So I just wanted to clarify specifically what is currently built in of tax reform and what is more left, in terms of regulatory outcomes that you are waiting to see?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Praful, I think if you think about the utility side of the ledger, it's much more of a cash story, especially right away. So it's about the pass back of taxes because, frankly, you're not going to end up paying taxes. So if you think about what we did, we proactively, in January, went to FERC knowing that there was going to be a rate change and we knew we were going to pay less tax in 2018. So we proactively went to FERC to get that money back into customers' hands. Revenues come down, taxes come down, ends up being a wash. There will be some modest benefit as we step through time because if you have less deferred taxes on your books and you pass that back to customers, deferred taxes is a reduction in rate base so your rate base will grow as you step through time with that reduction in rate base. But that will grow over time and does not have, really, much of a P&L impact as you look at 2018, in particular, for the utility.

Praful Mehta -- Citigroup Global Markets -- Analyst

Got you. Yeah. I was, again, more focused on the cash impact specifically. Like, for example, the DTL refund. Is that currently incorporated within the forecast or no?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Yes. Yeah, and I'll refer to the prepared remarks as well, Praful. If you think about some of those are protected deferred taxes. That's the lion's share of our deferred taxes. And that will get passed back over what's called the "average rate assumption" method. That's over the remaining life of the asset. And I think it's a true statement to say that we are still passing back some deferred taxes from the 1986 tax act when it happened because we have such long-lived property. So that will go on for a period of time as those different lives end up turning. But, yes, we've incorporated what we know and estimates of what we don't know into our numbers.

Praful Mehta -- Citigroup Global Markets -- Analyst

Got you. Perfect. Thanks. And then secondly, in terms of the New Jersey bill, it's helpful -- and your conversations clearly were productive from what we heard yesterday. How do you see that playing out from here in terms of timing and when does it reach the Governor's desk and all of that? How do you see that playing out from here?

Ralph Izzo -- Chairman, President, and Chief Executive Officer

My high degree of confidence in the ultimate outcome is matched by my uncertainty over timing. So what I can tell you is that the bill is posted for a vote Monday in the State Senate. The Assembly doesn't have a voting session, I don't think, at present scheduled until the end of March. So we're 114-year-old company, Praful, and Salem is 40 years old, Hope Creek is 30 years old. I'm not going to sweat a couple of weeks one direction or another. But I feel pretty good about the nature of the conversation and the clearly earnest desire on the part of all stakeholders to preserve those plants. But timing is not something I can predict.

Praful Mehta -- Citigroup Global Markets -- Analyst

Understood. Thanks so much, guys.

Operator

Your next question comes from Jonathan Arnold of Deutsche Bank.

Jonathan Arnold -- Deutsche Bank -- Analyst

Yeah, good morning, guys.

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Hey, John.

Jonathan Arnold -- Deutsche Bank -- Analyst

My question has to do on tax reform and your comments, Dan. I think you said obviously that you're not planning any equity but you said you also still have excess balance sheet capacity. And I know you don't normally update that until the analyst day but, if I recall, at EEI you gave us a slide which showed something like a $1.8 billion reduction, or roughly halving of what it had been without tax reform. I guess my question is, is that still a good number? Or as you further refine your inputs and outputs, are we somewhere else?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

No, I think you're still very much in that range, Jonathan. I think that what we tried to do at that point is highlight that a number that we had provided was based in large part on FFO to debt and there was a lot of FFO that came from bonus depreciation. So by either the passage of time or by tax reform, because at EEI we had not had tax reform at that point in time, unless bonus was extended, the FFO was going to come down. And so that was kind of a temporal aspect and what we tried to do, to your good memory, was to give some indication that that was going to come down. So the order of magnitude numbers was about $3 billion at that point and we were highlighting that about $1.8 billion or so would go away with bonus depreciation. So that's still in the right ballpark and I think the right way to think about it. And when I referenced before the strength of the balance sheet and the ability to fund further investments, it's still that order of magnitude.

Jonathan Arnold -- Deutsche Bank -- Analyst

And so that was, if I remember, the math was like $300 million FFO divided by your 18% target, effectively?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Yeah.

Jonathan Arnold -- Deutsche Bank -- Analyst

That's how you got there. So presumably that means, as you put this all together, you see FFO degradation roughly in that $300 million range still?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Yeah. As you step out into -- I think our numbers were targeted around a 2020 or so time frame. Right? So you kind of come off of those bonus years. But you're thinking about it exactly right, Jonathan.

Jonathan Arnold -- Deutsche Bank -- Analyst

Okay. Great. Thank you. And then just on the guidance for holdings and the increase in '18 over '17, is that all tax reform related? And I just some uptick in the Long Island contract? Or is there anything else driving that?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

No. It's not a lot. If you have a little bit lower taxes, you'll have a little bit higher income. And the $35 million we threw out is kind of a normal range. Last year, we had some tax issues coming through and we had made a contribution to the Foundation. So I think you can look at '18 being a more normal year.

Jonathan Arnold -- Deutsche Bank -- Analyst

So it's more that '17 was a little skewed low and '18 is more normal?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

That's exactly right.

Jonathan Arnold -- Deutsche Bank -- Analyst

Perfect. Thank you very much.

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

You got it.

Operator

Your next question comes from Greg Gordon of Evercore ISI.

Greg Gordon -- Evercore ISI -- Analyst

Thanks. Good morning. Thank you. A lot of my questions have been answered and this one you may not be able to answer but I'll try. In terms of your observation from the outside looking in at how PJM gets to the answer on implementing their price reform initiatives, it appears that there's a bit of a "cart-horse" issue here, in that one path is to wait for the FERC to potentially order a 206 proceeding and say that their rates are unjust and unreasonable. So my first question is, are we on a path in the current FERC docket where you believe, at the end of the initial filings and the responses, that the FERC could look at the evidence that PJM files to show that their rates are not appropriate?

Can they actually get to a place at the end of this proceeding where they could legally say, "Yes, you've proven their rates are unjust and unreasonable," and allow them to go ahead and change the rate? Or are we realistically on a path here where they have to make a decision on whether they're going to go through the stakeholder process and then it's whether they go through a truncated process with a Board vote or a more elongated process with a stakeholder vote, understanding that the former is what they used when they did capacity performance? It's a long question, but hopefully you get the gist.

Ralph Izzo -- Chairman, President, and Chief Executive Officer

Yeah, we get the gist but you were right at the start. Greg, I'm sorry, there's no way to predict that. I would point out to you, though, that there's multiple things going on at FERC that matter from PJM. There's capacity market reform, there's fast start pricing, there's price formation. So there's multiple issues. There's multiple degrees of freedom. Is it a 205 or is it a 206? Is it a truncated process? Is it not? So it's just I think we're all visiting with the commissioners and telling them how important it is. And I think we're all seeing the same comments come out of PJM. So I don't know what else to say at this point about it.

Greg Gordon -- Evercore ISI -- Analyst

Okay. Thank you.

Operator

Your next question comes from Christopher Turnure of JP Morgan Securities.

Ralph Izzo -- Chairman, President, and Chief Executive Officer

Hey, Chris.

Christopher Turnure -- JP Morgan Securities -- Analyst

Good morning. The only question that I have left is on the New Jersey nuclear support. You've answered a couple of questions on it already, of course, but I'm wondering if there's a couple of potential hurdles to getting across the finish line this session that you're concerned about? It seems like the Governor could potentially further his environmental efforts and the emission-free power effort long-term through this and there's some other stakeholders that seem to have come in line here. But what might we be missing that could scuttle the entire operation?

Ralph Izzo -- Chairman, President, and Chief Executive Officer

Hey, Chris, so it's always nice to have quarterly calls and we're trying to explain the past but now you guys are really pushing us to predict the future. It's so hard. I mean, the good news is the Governor has publicly stated on numerous occasions that those plants have to continue to operate as a bridge to a long-term renewables future. And as I said before, everyone who has testified, other than our competitors, have begun their testimony by saying, "We don't want these plants to close but." And they each have a "but" that they put in there. So are there hurdles? Yes, there are.

But I stay grounded on the support, the articulated support of consumer groups, environmental groups, and the Governor and the legislature itself. And we have made progress in terms of schedule and in terms of going through the committee process. So we'll just keep making sure people know what it means if they go away. And then, of course, at the risk of stating the obvious, all of our shareholders know that we will do what is right by our fiduciary responsibility in terms of the plants, regardless of New Jersey's actions.

Christopher Turnure -- JP Morgan Securities -- Analyst

Okay. Fair enough. Thanks, Ralph.

Operator

Your next question comes from Michael Lapides of Goldman Sachs & Company.

Michael Lapides -- Goldman Sachs & Co. -- Analyst

Hey, guys. Thanks for taking my question. On PSE&G, I just want to make sure I understand the puts and takes in rates or revenue requirements that are happening this year. So on a year-over-year basis, is what you're saying is that transmission is actually down year-over-year and that's just all tax-related?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

From a pure revenue perspective, but completely neutral from an earnings perspective.

Michael Lapides -- Goldman Sachs & Co. -- Analyst

Got it. And then the distribution revenue reduction for tax is going to happen in April of this year?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Correct.

Michael Lapides -- Goldman Sachs & Co. -- Analyst

Okay. And that's not a full-year number, that's an annualized number. So it's as if it were April this year through March of next year?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Yeah. Yeah, right.

Michael Lapides -- Goldman Sachs & Co. -- Analyst

Okay. And then the rate increase won't happen -- well, let me rephrase that. Anything tied to rate changes from the rate case won't happen until the end of the year?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

That's right. Yeah.

Michael Lapides -- Goldman Sachs & Co. -- Analyst

Are there any other -- what about tracker or GSMP1 or even GSMP2 related revenue changes? Are you still getting those in 2018 or do the things we've talked about kind of supersede that or incorporate that?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

The only thing that ends up superseding that, Michael, is when the rate case is done. So they roll in as we work our way forward. They'll be done, I think, by the time we get to the rate case and so they'll kind of wrap up at the same time. But until then, we'll have roll-ins as we always have.

Michael Lapides -- Goldman Sachs & Co. -- Analyst

Hold on. I want to make sure I follow this. So in 2018, you'll have the transmission revenue decline, obviously offset by tax. You'll have the distribution revenue decline, offset by tax. And then whatever you'll have in the rate case. None of the other trackers or anything will flow in in '18 but they'll kick back in in '19?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Yeah. So you'll have our continuing roll-ins as they are, from the standpoint of Energy Strong and GSMP. And then we'll have the rate case as it comes in at the end of the year. So I don't think it's any different than the norm. the only thing different than the norm, the way to think about it really, is the two tax rate -- the return of the taxes at both the distribution and the transmission side, which has no P&L impact. Revenues go down and taxes go down.

Ralph Izzo -- Chairman, President, and Chief Executive Officer

Also, I think our solar and energy efficiency filings are not part of rate case proceedings. They'll continue to have their trackers.

Michael Lapides -- Goldman Sachs & Co. -- Analyst

Yeah. Got it. And then, finally, what tax rates are you assuming at both ENG and Power this year? What's the end guidance?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

The statutory moves to 21% and then we'll have some modest moves like we normally do. So, for instance, the update to taxes has eliminated a production deduction, a manufacturing deduction that Power would take to the tune of a couple pennies. But other than that, it's still modest adjustments off of the statutory rate.

Michael Lapides -- Goldman Sachs & Co. -- Analyst

Got it. Okay. And no significant state tax level added on top of that?

Ralph Izzo -- Chairman, President, and Chief Executive Officer

Yeah. I mean, we do have, what is it, 9% in New Jersey?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

True. But no different, other than the fact that the federal benefit you get from states is going to change by virtue of the federal tax rate change.

Michael Lapides -- Goldman Sachs & Co. -- Analyst

Got it. Much appreciated, guys. Thank you and sorry to get so far down in the weeds on that one. Thanks, guys.

Operator

Once again, if you would like to ask a question, you may do so by pressing "*1". Your next question comes from Paul Fremont of Mizuho.

Paul Fremont -- Mizuho -- Analyst

Thank you very much. Does your GRC filing and the rate base numbers that are in there, does that reflect the rate base numbers after tax reform or would there be a further adjustment that we need to make?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

So what we have filed within the rate case assumed that we did have the tax changes come through. We had also, within our base rate case filing, had a pass back of some deferred taxes within that rate case. And we will continue to do so as we make our prospective filings. Now, what may end up happening in our prospective filings is some of the pass back of deferred taxes that were embedded within the filing may get swapped out compared to some of the excess taxes that we will ultimately pass back to customers. I guess I would say as we step through the next steps of this rate case, we will have overlaid on top of it the BPU order to provide back the tax rate change, which was in our base rate case. So we will adjust the base rate case in our next filing to adjust for the fact that a separate filing will be made by virtue of the BPU order outside of the rate case.

Paul Fremont -- Mizuho -- Analyst

Okay. And then can you at all discuss what the retail contribution was in 2017?

Ralph Izzo -- Chairman, President, and Chief Executive Officer

We don't break that out, Paul. It would have been very, very modest at this point.

Paul Fremont -- Mizuho -- Analyst

And, I mean, can you give us maybe a metric? Like, you know, how many megawatt hours did you sell?

Ralph Izzo -- Chairman, President, and Chief Executive Officer

Yeah, I just don't have that number. I don't think -- we've not broken that out. We were really -- what I can tell you is how many people we were hiring to get going but not how many megawatts we sold.

Paul Fremont -- Mizuho -- Analyst

So when would be sort of the first year that you would expect any type of material contribution out of that business?

Ralph Izzo -- Chairman, President, and Chief Executive Officer

It depends on your definition of material really. I mean, we don't break out a lot of the sub-numbers in Power. We don't do it power plant by power plant. We don't give you gas versus electric. So I don't think you should expect us to break out something that is truly an organically grown, defensive mechanism. At least in changes of revenue recognition, portrayals in the SEC documents that may be a little bit more illuminating.

Paul Fremont -- Mizuho -- Analyst

Great. Thank you.

Ralph Izzo -- Chairman, President, and Chief Executive Officer

Thanks.

Operator

And your final question comes from Ashar Khan of Verition Fund Management.

Ashar Khan -- Verition Fund Management -- Analyst

Good morning and thanks for good results. Can I just ask one question? You kind of referred to it that utility growth is a little bit muted this year. But then can we expect -- what inference I got from your comments is that you make it up in '19 because of the back end-loaded nature of the rate case. That's my one question. And the second question I had was that you mentioned the 7% to 9% growth rate in the utility rate base, and that's the same number you mentioned that at your analyst day, but now you also mentioned that you have an additional $1 billion of rate base because of the tax reform. Is that $1 billion rate base included in that 7% to 9% or no? Just clarification on those two issues.

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Yeah, so I think the way to think about it is that we jump off, as we do every year, from a higher base by virtue of the prior year's investment in rate base. So as rate base steps up, the ability to grow at the same rate kind of presupposes an incremental increase to rate base from a pure dollar amount. And if you take a look at the incremental rate base by virtue of the lower deferred taxes and if you take a look at the bump up in the starting point year-over-year, it's a bit of an offset. So I think that's -- if you think about us going from 7% to 9% on a lower base to 7% to 9% on a higher base, basically it's tougher to do but some of the deferred tax impacts of tax reform provide that offset and leaves us at comparably the same place.

Ashar Khan -- Verition Fund Management -- Analyst

Okay. And what base are you using? Can you just mention?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

End of '17.

Ashar Khan -- Verition Fund Management -- Analyst

End of '17. Okay. Thank you. And then on the utility earning question?

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

I think it's essentially what we referenced before. If we have incremental spend that Ralph mentioned from both GSMP and Energy Strong that was going to roll into the rate case and we have rates that come in toward the end of the year, you would anticipate seeing maybe a little bit of a modest shave-off of rate of growth. What comes in 2019, we'll end up giving you the details on it this time next year, from the standpoint of total '19 earnings guide.

Ashar Khan -- Verition Fund Management -- Analyst

Okay. Thank you so much.

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

You got it.

Ralph Izzo -- Chairman, President, and Chief Executive Officer

So I guess that was our last question. Thank you all. Dan and Kathleen will be on the road, hopefully seeing many of you next week. The three of us will be on the road a couple of weeks after that. Maybe we'll see many of you then. One thing that's a little different this year, you may have noticed that we have moved our analyst and investor conference to June. Please read nothing into that other than bad scheduling on my part that required some coordination of family calendars and business calendars. But nonetheless I think we have some good things to talk to you about and we'll know a lot more then about the New Jersey nuclear situation. We'll know a lot more about RPM and the comments will be into FERC from PJM and other folks. And so I think we have a lot of opportunities ahead of us in the next few months. So with that, thank you for participating in the call and we look forward to seeing you soon. Take care.

Operator

Ladies and gentlemen, that does conclude your conference call for today. You may disconnect and thank you for participating.

Duration: 63 minutes

Call participants:

Kathleen A. Lally -- Vice President, Investor Relations

Ralph Izzo -- Chairman, President, and Chief Executive Officer

Daniel J. Cregg -- Executive Vice President and Chief Financial Officer

Josephine Moore -- Bank of America Merrill Lynch -- Analyst

Angie Storozynski -- Macquarie Capital -- Analyst

Praful Mehta -- Citigroup Global Markets -- Analyst

Jonathan Arnold -- Deutsche Bank -- Analyst

Greg Gordon -- Evercore ISI -- Analyst

Christopher Turnure -- JP Morgan Securities -- Analyst

Michael Lapides -- Goldman Sachs & Co. -- Analyst

Paul Fremont -- Mizuho -- Analyst

Ashar Khan -- Verition Fund Management -- Analyst

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