Public Service Enterprise Group

• 1. Introduction

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  Public Service Enterprise Group, better known as PSEG, began not in 1985 when it was formally incorporated, but in 1903, when a single company absorbed more than 400 gas, electric, and transportation businesses across New Jersey. That consolidation planted the roots of a utility empire that would one day power nearly four million customers across two states. What does it mean when a company touches almost every home and business in a region, yet remains largely invisible until the lights go out? The story of PSEG is one of mergers, controversies, billion-dollar projects, and a fight over who gets to run the electric grid on Long Island that stretched into the courts, the state legislature, and the office of the New York State Inspector General.

• 2. A Corporation Built on Consolidation

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  The Public Service Corporation came together in 1903 by folding more than 400 separate gas, electric, and transportation companies into a single New Jersey entity. For a quarter century it held all of these businesses under one roof. Then, in 1928, it reorganized: the electric and gas operations merged into a new company, PSE&G, while the transit operations were gathered under Public Service Coordinated Transport. Two decades later, in 1948, the original parent corporation dissolved entirely, leaving PSE&G standing as an independent company with the transit arm as its subsidiary.

  Transit and utility turned out to be an awkward pairing. Public Service Coordinated Transport was renamed Transport of New Jersey in 1971. Nine years after that, in 1980, it was sold to New Jersey Transit, stripping away the last non-utility business and leaving PSE&G focused entirely on gas and electric service. The holding company structure that would eventually become PSEG did not arrive until 1985, when Public Service Enterprise Group was formed to oversee PSE&G's operations. PSE&G itself carries the distinction of being New Jersey's oldest and largest investor-owned utility.

• 3. Growth, Diversification, and a Failed Merger

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  Four years after PSEG was formed, in 1989, the company created Enterprise Diversified Holdings to pull its unregulated businesses into a single entity, which would later be renamed PSEG Energy Holdings. The ambition to reach beyond New Jersey's regulated utility market grew further in 2000, when PSEG spun off PSE&G's unregulated national power generation assets into a separate company called PSEG Power.

  The biggest move of that era, though, never happened. In 2005 the Federal Energy Regulatory Commission approved a proposed merger between PSEG and Exelon, a utility company based in Chicago and Philadelphia. The deal collapsed anyway: the New Jersey Board of Public Utilities withheld its approval, and the merger died. Despite the failed combination, PSEG and Exelon did end up sharing ownership in nuclear operations. PSEG Nuclear holds a 57 percent stake in the Salem Nuclear Power Plant, which it operates in partnership with Exelon, and the two companies share the Peach Bottom Nuclear Generating Station in Pennsylvania on a 50/50 basis, with Exelon operating that facility. PSEG Nuclear runs the plants at two sites in Lower Alloways Creek Township, New Jersey, and the three reactors there receive $300 million annually in subsidies.

• 4. Solar Ambition and Storm Reckoning

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  In 2009, PSEG launched what it called the Solar 4 All project, attaching solar panels to 200,000 utility poles at a total cost of $773 million. At the time of its launch, no project of its kind anywhere in the world was larger. The installation was completed in 2013, and PSEG also developed solar farms in Edison, Hamilton, Linden, and Trenton during the same period.

  Climate-driven storms put a harsher light on the company's operations. Hurricane Isaias struck in August 2020, leaving approximately 490,000 customers in New Jersey and around 400,000 on Long Island without power. Some customers had service restored within hours; others waited several days. By the 10th of August, roughly 20,000 customers in New Jersey and about 42,000 on Long Island were still without electricity. The response drew sharp criticism from government officials. New York Governor Andrew Cuomo threatened to revoke operating licenses for both PSEG and Con Edison. The storm's aftermath accelerated scrutiny of PSEG Long Island's performance that would continue for years.

• 5. The Long Island Contract Fight

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  PSEG Long Island's presence on Long Island began on the 1st of January 2014, after the Long Island Power Authority chose PSEG to manage its grid more directly. The decision followed heavy criticism of LIPA's own performance during Hurricane Sandy. PSEG took over most operational responsibilities and rebranded the service under its own name.

  By 2020, LIPA had filed a lawsuit in New York court seeking $70 million in damages, alleging that PSEG Long Island had failed to respond adequately to Tropical Storm Isaias. LIPA CEO Tom Falcone stated publicly that PSEG Long Island had collected nearly $500 million from local customers over seven years without meeting basic service obligations. The criticism did not stop with storm response. A federal judge filed a separate lawsuit alleging that PSEG's negligence caused a fire that destroyed his Suffolk County home, seeking $515,000 for uninsured rebuilding costs. Of the roughly 2,400 property damage claims filed with PSEG Long Island each year, only about 15 percent are approved.

  In early 2025, LIPA ran a competitive bidding process to select the next operator of Long Island's grid. The final two candidates were PSEG Long Island and Quanta Services, a Texas-based utility firm. A special committee of senior LIPA officials unanimously recommended Quanta, describing its proposal as offering the best value to customers. The LIPA board voted 6-1 to reject that recommendation, then voted 6-1 to retain PSEG Long Island, with two members abstaining. A Quanta executive said the company had been told there would be no preferential treatment for the incumbent. The committee's 150-page evaluation report, which reportedly rated Quanta higher, was not made public. In May 2025, the New York State Inspector General opened an investigation into potential undue influence by lobbyists or political figures on the grid management decision.

• 6. Rates, Service, and Regulatory Penalties

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  Long Island electricity customers already pay some of the highest rates in the United States, averaging 62 percent more than the national rate. In 2024 alone, PSEG Long Island raised the power supply charge seven separate times, with one increase adding about $10 per month to an average bill. The utility attributed the increases to fluctuations in natural gas prices and stated it did not profit from the power supply charge. Separately, Long Island residential customers were charged $4.4 million to cover PSEG's own costs in pursuing a proposed rate hike, costs that according to the AARP and the Public Utility Law Project included lobbying LIPA for a nearly 12 percent electric rate increase over three years.

  On the New Jersey side, October 2024 brought the first base rate increase for PSE&G since 2018. The New Jersey Board of Public Utilities approved a settlement raising the average residential combined electric and gas bill by 7 percent, or about $15 per month. PSEG noted that the adjustment was still below the overall rate of inflation during the six-year period since the last increase.

  The regulatory record carries heavier marks as well. In 2023 PSE&G agreed to a $6.6 million settlement after the Federal Energy Regulatory Commission found it had submitted inaccurate information to PJM Interconnection concerning a $546 million transmission project. The case centered on a 2017 proposal to replace a transmission line in the Roseland-Pleasant Valley corridor. According to Violation Tracker, PSEG's environmental and regulatory violations total more than $364 million across 33 cases, including a $344.4 million air pollution penalty against its subsidiary PSEG Fossil LLC in 2002. That penalty alone remains among the largest in the company's history.

• 7. Scale of Operations

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  PSE&G's service territory in New Jersey runs along a 2,600-square-mile diagonal corridor stretching from Bergen County in the northeast to Gloucester County in the southwest. Within that corridor, PSE&G serves 1.8 million gas customers and 2.2 million electric customers across more than 300 urban, suburban, and rural communities, including New Jersey's six largest cities.

  PSEG Long Island operates under a different model entirely, managing the grid under contract with LIPA rather than owning it outright. The subsidiary supplies electricity to approximately 1.1 million customers in Nassau and Suffolk counties and on the Rockaway Peninsula in Queens. By early 2024, PSEG Long Island's call center had become a focus of concern: LIPA chairwoman Tracey Edwards described service levels as horrible, citing data showing only 15 percent of calls were answered within 30 seconds in February 2024, compared with 41.8 percent for all of 2023. The average call handling time stood at 473 seconds. The problem carried extra urgency because the company was preparing to move all 1.1 million Long Island customers onto a new time-of-use rate plan, a transition that would predictably generate a high volume of customer questions.