Business Performance and Improvement

BUSINESS PERFORMANCE & IMPROVEMENT

Rosalia BenantiD I S T R I B U T I O N B U S I N E S S T E A M L E A D E R - U T I L I T Y S C O R E C A R D

2015

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Four Primary Companies

PSE&G (Regulated Electric and Gas Utility)• Customer Operations• Electric Operations• Gas Delivery• DP&C• AMCS• Renewable Energy

PSEG-LI (Regulated Electric Utility–Long Island, NY)

PSEG Power (Non-Regulated Generation Fleet)

PSEG Services Corp. (Shared Services)

PSEG is a publicly traded company (NYSE-PEG)

Fortune 500 Company (#284)

$ 32.5B of assets

$ 10B of revenues

12,000 employees

Nearly 4 million customers in NJ (Electric & Gas)

113 consecutive years of providing dividends

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People providing Safe, Economic reliable Green energy

PSEG Strategy

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PSE&G Performance Measurement Process

Clearly Define Vision and Strategy

Link Metrics, Benchmarking and Targets to Strategy

Link Initiatives andBest Practices

to Execute Strategy

Measure and Communicate Performance

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CEO Review

BU Measure ValidationSC/OC Measure

Alignment

BU Target Setting and SC/OC Alignment

August September October November December

Planning

Gather Input to Compensation

Guidelines

Draft Compensation Guidelines

Gather Input to on “Corporate Metrics”

Corporate Metric

Validation

Corporate Metric Target

Setting

10/14EOG Discussion

10/24EOG

Discussion

1/31Complete

January

11/21EOG

Discussion

Incorporate 2014 Actual ResultsIncorporat

e CEO Feedback 12/21

Communicate Draft Scorecards

2015 Balanced Scorecard T1, T2, T3 and T4 SCORECARDS

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Business Performance & Improvement Group, centrally located in AMCS, produces scorecards for all line of

businesses within PSE&G PSE&G Balanced Scorecards (monthly packages)

• Utility

• Asset Management & Centralized Services

• Customer Operations

• Renewable Energy/Customer Solutions

• Delivery Projects & Construction

• Electric Operations

• Gas Delivery

PSE&G Gas & Electric Peer Panel Premier Benchmark Study

60% Gas Companies40% Electric Companies

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Benchmarking guides our target setting process …

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PSE&G recipient of two 2014

JD Power Business Awards

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Customer Operations has Vertical & Horizontal…

… Alignment with Utility level Compensable metrics

Shared Utility Metric

Compensable Metrics Utility AMCS GD EO DPC CO RESAvailabilty (Part A) X X X X X X XSAIDI X XForced Automatic Outage Rate (Trans) X X X XGas Leak Reports Per Mile X X XDamages per 1,000 Locate Requests X XBPU Inquiries – Non-collections X X X XJD Power Electric (Residential) X X X X XJD Power Gas (Residential) X X X XKey Project Milestone Completion (%)- Crit.Proj. X X X XEnergy Strong Milestones X X X X X

X

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There is Horizontal Alignment and Utility Level Line of SightCompensable Metrics Utility AMCS GD EO DPC CO RES

SAIFI X XProject Cost Schedule Performance X XMOT Survey X X XEnvironmental Audit & Assessment Remediation Rate XTimely Remediation of SOX 404 XGross Inventory Accuracy XLeak Response Rate XFix it Right X% Regulatory Compliance XCAIDI X XPolice & Fire Response Rate XPercent of Actual Meter Reads XChronic No Reads XGeneral Inquiry Abandonment Rate (%) XPaperless Billing (%) X XTVMP Radial Clearance Compliance XProject Estimation Accuracy X% of MGP Remedial Action Milestones Accomplished XDevelopment Milestones Completed XComfort Partners QA/AC Pass Rate XSolar Loan Commitment Letter Cycle Time XActual Renewable Energy Generated. MWH XAnnualized Energy Effi ciency Energy Savings (MWh equivalent) XAS Contract Unit Sales X

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The 2015 Performance Incentive Plan

is weighted towards operational results

With greater weight placed on the Scorecard

COScorecard

90%

StrategicInitiative

10%

18LONGISLAND

Questions