PSEG Power LLC

Over the course of the year PSEG Power has redeemed all of its outstanding senior notes ahead of the sale of the fossil units. We expect the company will relever to a new capital structure in 2022. We plan to reevaluate the new stand-alone PSEG Power following a successful conclusion of the sale process, however, given the stability of the nuclear assets and our view of PSEG Power's importance to PSEG, we are unlikely to change the rating. PSEG Power's stand-alone creditworthiness is tightly linked to these ZECs payment, which, while highly supportive of credit, require reauthorization every three years. This short duration of ZECs introduces a level of uncertainty to PSEG Power's medium-term outlook, as the amount of support

...PSEG Power LLC is undergoing a significant transformation. PSEG Power is in the process of selling its nonnuclear assets. It sold its solar units in mid-2021 and we expect the sale of its fossil units to close by the end of the first quarter of 2022. We believe the envisioned future PSEG Power will be more stable and profitable, albeit smaller and less diversified relative to its prior constitution. We also believe the future PSEG Power will be strategically important to PSEG and is unlikely to be sold. Over the course of the year PSEG Power has redeemed all of its outstanding senior notes ahead of the sale of the fossil units. We expect the company will relever to a new capital structure in 2022. We plan to reevaluate the new stand-alone PSEG Power following a successful conclusion of the sale process, however, given the stability of the nuclear assets and our view of PSEG Power's importance to PSEG, we are unlikely to change the rating. Regulatory support for zero carbon generation is...

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