1. John F. Doherty ASSOCIATE GENERAL ENVIRONMENTAL COUNSEL

2. Serving New Jersey for 111 Years PSE&G Service Territory 323 Municipalities 70% of New Jersey’s population 1.8 million Gas customers 2.2 million Electric customers 2

3. ElectricGas Customers Growth (2010 – 2014) 2.2 Million 0.3% 1.8 Million 0.3% 2014 Electric Sales and Gas Sold and Transported40,737 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 Residential32%60% Commercial58%36% Industrial10%4% TransmissionElectricGas Approved Rate of Return*** 11.68% ROE10.3% ROE Renewables & Energy Efficiency Approved Programs 2009-June 2015 Total Program Plan Total Investment thru June 2015 Solar Loan Capacity 83 MW178.5 MW$250M Solar 4 All Capacity 100 MW125 MW$527M EE Annual Electric savings206 GWh~250 GWh EE Annual Gas savings6.5 M Therms ~10 M Therms PSE&G is the largest electric and gas distribution and transmission utility company in New Jersey 3

4. PSE&G reached a $1.22 billion settlement with the NJ BPU staff which was approved by the NJ Board of Public Utilities on May 21, 2014 $620M to raise, relocated or protect 29 switching and substations that were damaged by water in recent storms $50M to protect five natural gas metering stations and a liquefied natural gas station affected by Sandy. $100M to create redundancy in the system, reducing outages when damage occurs. $100M to deploy smart grid technologies to better monitor system operations to increase our ability to more swiftly deploy repair teams. $350M to replace and modernize 250 miles of low-pressure cast iron gas mains in or near flood areas. 4

5. Make it Stronger – $1.12B $620M – Electric Station Flood Mitigation Raise, relocate or protect 29 switching and substations that were damaged by water in recent storms. $100M – Contingency Reconfiguration Strategies Create redundancy in the system, reducing outages when damage occurs. $350M - Utilization Pressure Cast Iron (UPCI) Replacement Replace and modernize 250 miles of low-pressure cast iron gas mains in or near flood areas $50M - M&R Station Flood Mitigation Protect five natural gas metering stations and a liquefied natural gas station affected by Sandy or located in flood zones. “Hardening”: Physically changing the infrastructure to make it less susceptible to damage from extreme wind, flooding, or flying debris. Hardening improves the durability and stability of energy infrastructure, making it better able to withstand the impacts of hurricanes and weather events without sustaining major damage. 5

6. Sewaren Switch Station in the Sky Installation meets the proposed updated FEMA/State guidelines

7. Make it Smarter - $100M $ 100M – Advanced Technologies Deploy smart grid technologies to better monitor system operations to increase our ability to more swiftly deploy repair teams. “ Resiliency”: Ability of an energy facility to recover quickly from damage to any of its components or to any of the external systems on which it depends. Resiliency measures do not prevent damage; but rather they enable energy systems to continue operating despite damage and/or promote a rapid return to normal operations when damages/outages do occur. 7

8. Contingency Reconfiguration - $100M This program focuses on minimizing outages and increasing restoration options to critical infrastructure by: – Providing redundancy by adding additional circuit tie. – Reducing restoration time by installing smart switches to provide remote/automated operation. – Reducing size of outage by sectionalizing circuit using additional feeder reclosers. – Reducing exposure to outages by decreasing overall circuit length through rerouting. – Reducing restoration time by rerouting circuit to improve accessibility. 8

9. Facility Types The critical infrastructure selected for this program include: – Defense Security – Hospital – Petroleum – Water/Sewage – Police – Prison – Red Cross Shelter – Telecom – Senior/Long Term Care – OEM HQ – Non Surgical Hospitals 9

10. Advanced Technologies – Microprocessor Relays and SCADA – Microprocessor relays on distribution feeders – Enable remote operation and position indication of each feeder circuit breaker – Provide remote monitoring capabilities including circuit and transformer loading, circuit breaker position, load imbalance, will assist in fault location and more. 10

11. Transmission Hardening Program - $980M 11 Bayonne Switching Station Bayway Switching Station Essex 230/138kV Homestead Jersey City Switching Station Linden 230/138kV Marion 138kV North Avenue New Milford During Superstorm Sandy Marion 138kV During Superstorm Sandy Hillsdale Jackson Road New Milford Somerville Substation Sewaren 230/138 kV Hoboken South Waterfront Penhorn

12. Gas Main Replacement - $350M Replace low pressure mains (Cast Iron) with high pressure plastic – Includes service replacements and regulator retirements – Allows for high efficiency appliances and gas generators – Excess flow valves improve safety Prioritizing Replacements – Previously flooded areas and adjacent FEMA flood zones – To the extent possible, higher leak history Minimizes water infiltration into mains and extended service restoration 12

13. Metering & Regulating Station Flood Mitigation - $50M This subprogram will implement flood mitigation for the seven stations that had water intrusion in Superstorm Sandy as well as provide an auxiliary generator at one station. “Hardening” will entail the raising in elevation of flood sensitive equipment including: valve actuators, gas heaters, instruments & transducers, controllers, modems, RTU’s, and standby generators. 13 Crown Central M&R Station Piles Creek M&R Station

14. The PSE&G Gas System Modernization Program (GSMP) Approved by the NJ BPU on November 16 th 2015 $905 Million over a 3 year period Accelerated cast iron and unprotected steel main and service replacement program Upgrades legacy low pressure systems to high pressure Relocates inside meter sets to outside Installs excess flow valve (EFV) safety devices Supports regulatory focus of replacing the highest risk, most leak prone facilities This program is the first phase of a long-term 30 year replacement program for cast iron and unprotected steel

15. Since 2011, PSE&G has reduced methane emissions 2% annually for a total of 32,000 metric tons of CO2 equivalent Methane emission reduction from the 5 year Gas System Modernization Program is estimated at approximately 122,000 metric tons of CO2 equivalent per year This represents removing approximately 26,000 vehicles from the road. The 30 year program would result in an annual cumulative reduction of methane emissions of approximately 635,000 metric tons of CO2 equivalent emissions. This represents a reduction of nearly 83% of PSE&G’s 2013 reported emissions and is equivalent to removing approximately 135,000 vehicles from the road. Significant Reductions in Greenhouse Gas Emissions 15

16. Safety Improved System Reliability Customer Choice Most Importantly Our Customers Benefit Modern PE has a failure rate 50x lower than Cast Iron Property protected by EFVs will increase by 40% Removal of an asset class – LP Regulator Stations 16 Eliminates potential for water infiltration and associated outages Eliminates low pressure outages Appliances Generators Efficiency Excess Flow Valve