The 'BBB' ratings on supply company PSEG Power LLC are influenced by the credit quality of parent, Public Service Enterprises Group Inc. (PSEG). In turn, PSEG's ratings 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. PSEG's business risk profile is strong and is driven by PSEG Power LLC's exposure to merchant power, offset by Public Service Electric&Gas Co.'s (PSE&G) excellent regulated utility operations. Strengths include PSEG Power's well-positioned base load electricity generation assets that benefit from relatively tight reserve margins and transmission constraints into the eastern region of the PJM Interconnection. We expect PSEG Power's large baseload fleet of plants to
