Jobs, Benefits, Business Model, Founding Story

PSEG provides a range of energy products and services to residential, commercial, and industrial customers, with a view to ensuring reliable and efficient services.

PSEG was formed in 1903 as The Public Service Corporation, and through the amalgamating of more than 400 individual gas, electric and transportation companies from the New Jersey area. It was renamed Public Service Electric and Gas Company in 1948, and in 1980 sold its transportation business to New Jersey Transit, leaving it to focus on the utilities industry.

In 1985 PSEG was established as a holding company, with the operations of Public Service Electric and Gas Company organised into its corporate structure. The Company went on to consolidate its unregulated businesses under the umbrella of PSEG Energy Holdings, with its unregulated national power generation later organised under PSEG Power.

PSEG has developed into one of the largest regional utility companies in the US, employing more than 13,025 workers and generating revenue in excess of $10 billion. The Company is ranked at 272nd on the Fortune 500 list and placed 413th on the Forbes Global 2000 list. PSEG trade a portion of its shares on the New York Stock Exchange. It has a current market capitalisation of $$20.73 billion.

Business model of PSEG

Customer Segments

PSEG provides a range of energy and gas services that serve a range of customers within the energy and gas sector. The Company’s customers can be organised into two principal segments, separated by the Company’s services:

  • Retail Customers, comprising residential, commercial and industrial customers, including small and medium-sized commercial businesses, manufacturing companies, agricultural operators, and goods producers; and
  • Wholesale Customers, comprising energy and gas marketers, specialist distributors, and other energy businesses.

PSEG is a regional operator. According to its annual report, PSEG’s utility business serves 2.2 million electric customers and 1.8 million gas customers in a service area that covers approximately 2,600 square miles running diagonally across New Jersey. This includes the state’s most heavily populated, commercialised and industrialised areas, including its six largest cities and approximately 300 suburban and rural communities. The Company does not serve an international customer base.

Value Propositions

PSEG provides value to its customers in the following ways:

  • Its reputation and industry standing, with the Company established as one the leading regional utility companies in the US, and having a track record for providing reliable services to a broad regional customer base;
  • Its range of services, with the Company providing a range of retail utility and energy wholesale services to a broad network of customers, including general consumers, commercial entities, industrial enterprises, and energy service companies;
  • Its flexibility and accessibility, with the Company providing a range of online tools and resources to its customers through its online customer portal, enabling customers to manage their accounts and bills easily on a self-service basis; and
  • Its industry expertise and experience, with the Company employing a workforce of highly-trained specialist personnel across its two operating segments, as well as a team of experienced industry executives.
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PSEG operates a website at, through which it provides information on its services, its service areas, and general operating activities. The Company also operates an online customer portal that allows customers to manage their accounts, organise payments, and transfer services. The Company, however, does not appear to operate an online sales channel.

PSEG also accepts payments from customers through a network of Western Union branches, as well as a chain of dedicated payment and service centres located across the Company’s service areas, including in Jersey City, New Brunswick, Newark, Hackensack, and Union City. Alternative customers can make payments by phone or money order.

PSEG operates a dedicated retail sales force, which deals directly with the Company’s retail customers. It also has a dedicated wholesale sales unit, which makes sales to energy marketers and distributors through wholesale contracts and tariffs. Additionally, PSEG utilises the services of various affiliate companies to extend its in-house sales and marketing reach.

PSEG operates its own power generation and distribution infrastructure, through which it delivers its electricity and gas. This includes nuclear and fossil fuel facilities, as well extensive pipeline and transmission networks. Some of the Company’s energy is also transmitted through certain shared facilities and joint venture operations.

Customer Relationships

PSEG provides a range of services and tools to its retail customers on a self-service basis through its online customer portal. This digital channel allows customers to manage their accounts, make payments, terminate or transfer their service, set up alerts, and arrange repairs without interacting directly with members of the Company’s sales or support personnel.

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The Company also provides personalised care to its customers, with its sales team able to provide advice and guidance on the Company’s various services. The Company also operates a dedicated support team, which can be contacted over the phone, and is able to personally respond to queries and complaints. Customers are also able to access a range of resources online, including information regarding power outages, safety and energy saving tips, user guides, and news coverage.

PSEG additionally operates several social media accounts – including with Facebook, Twitter, and LinkedIn – through which the Company can interact directly with customers, and keep them regularly updated with company developments.

Key Activities

PSEG is an energy holding company. Through its various subsidiaries and operating divisions, the Company provides a range of energy services to customers across the Northeastern and Mid- Atlantic United States.

The Company is primarily engaged in the transmission and distribution of electricity and natural gas, through two reportable operating segments: Public Service Electric and Gas Company, which operates as a public utility company, engaged in the transmission of electricity and distribution of electricity and natural gas to residential, commercial, and industrial customers across certain areas of New Jersey; and PSEG Power, which operates as a multiregional, wholesale energy supply company that integrates its generating asset operations and gas supply commitments with its wholesale energy, fuel supply and energy trading transacting functions.

Key Partners

PSEG works closely with a broad network of partners across the energy sectors, in support of its various generation and distribution activities. The Company’s partners can be organised as follows:

  • Supplier and Vendor Partners, comprising suppliers of raw materials and equipment, tools, and technologies that directly support the Company’s power generation and electric and gas distribution activities, as well as suppliers of professional services across the enterprise;
  • Joint Venture Partners, comprising a range of energy and gas companies with which the Company collaborates on joint projects through mutually owned entities;
  • Cogeneration and Distribution Partners, comprising a range of power generation and distribution companies with which the Company’s shares resources and collaborates on cogeneration and co-distribution projects;
  • Community and Sustainability Partners, comprising a range of charitable organisations and non-profits with which the Company collaborates on community projects; and
  • Energy Efficiency Partners, comprising contractors, distributors, suppliers, and manufacturers of energy efficient equipment, as well as various professionals, that assist the Company in promoting energy efficiency across the Company’s service areas.
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PSEG has a number of partnerships in place, including a recent tie-up with The Tyler Clementi Centre at Rutgers University to help provide incentives to New Jersey public high schools interested in offering the LGBTQ Youth Empowerment Initiative, and a partnership with GE to utilise software and analytics to help generate more competitive power.

Key Resources

PSEG’s key resources are its raw materials and supply chain, its power generating facilities, its transmission and distribution infrastructure, its IT and communications infrastructure, its sales and marketing channels, its partnerships, and its personnel.

PSEG’s most notable key resources are its physical properties and infrastructure. This includes nuclear, coal, coal and natural gas, and oil and natural gas power plants across New Jersey, New York, Pennsylvania, and Connecticut, with a total generating output of approximately 55,000 GWh. The Company also owns and operates a network of distribution pipelines and transmission lines across its operating areas.

Cost Structure

PSEG incurs costs in relation to the procurement of raw materials and supplies, the operation of its power generation facilities, the maintenance and operation of its gas and electric distribution infrastructure, the maintenance of its IT and communications infrastructure, the operation of its sales and marketing channels, the management of its partnerships, and the retention of its personnel.

In 2015 PSEG accrued total operating expenses in the amount of $7.45 billion. This included energy costs totalling $3.26 billion and operation and maintenance costs totalling $2.98 billion.

Revenue Streams

PSEG generates revenue through the generation, sale, and distribution of energy across the Northeast and Mid-Atlantic US. The Company has two principal revenue streams:

  • Revenue derived from the retail sale of electric transmission and electric and gas distribution to residential, commercial and industrial customers under regulated rate tariffs, as fees associated with appliance services and repairs; and
  • Revenue derived from the wholesale sale of energy products, including electricity, natural gas, and emissions credits, under contract or on the spot market.

In 2015 PSEG generated total operating revenue in the amount of $10.42 billion, down slightly on the $10.89 billion recorded by the Company in 2014. The majority of the Company’s revenue was generated by its Public Service Electric and Gas Company, which alone accounted for annual operating revenue of $6.64 billion. The Company’s PSEG Power segment generated $4.93 billion.

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