The ratings on PSEG Power LLC (Power) reflect the consolidated credit profile of parent Public Service Enterprise Group Inc. (Enterprise). Ratings on Enterprise reflect unregulated operations that are volatile but have provided strong cash flows in the past, resulting in an improvement in the group's consolidated financial profile. Enterprise's business risk profile is strong and is driven by Power's exposure to merchant power, offset by PSE&G's excellent regulated utility operations. Given various ring-fencing provisions, we consider subsidiary PSEG Energy Holdings Inc. (Holdings) as an equity investment, and not core to the ongoing business strategy of PSEG Inc (PSEG). However, we consolidate Holdings' affiliate, PSEG Global, with PSEG. Strengths include Power's well-positioned base load electricity generation assets that benefit from relatively
