PSEG reported non-GAAP operating earnings for the third quarter of 2020 of $0.96 per share versus $0.98 per share in last year's third quarter.
PSEG's GAAP results for the third quarter were $1.14 per share compared with $0.79 per share in the third quarter of 2019.
Our results for the third quarter bring non-GAAP operating earnings for the year-to-date to $2.78 per share, up 5.3% compared to the $2.64 per share in the first months of 2019.
We are updating PSEG's non-GAAP operating earnings guidance for 2020 to a range of $3.35 to $3.50 per share, which removes $0.05 per share from the lower end of our original guidance range.
The BPU's landmark decision on energy efficiency will enable PSE&G to invest $1 billion over three years to help bring universal access to energy efficiency for all New Jersey customers.
PSE&G's Clean Energy Future Energy Efficiency program will also establish a clean energy jobs training program, create over 3,200 direct jobs and enable everyone in New Jersey to benefit from the avoidance of 8 million metric tons of carbon emissions through 2050.
The $1 billion of remaining CEF programs we proposed to implement, which in the energy cloud or otherwise known as advanced metering infrastructure, to expand electric vehicle infrastructure and energy storage, are entering hearing stages later this year and we expect them to conclude in the first quarter of 2021.
Our service area experienced significantly warmer weather during the first half of the summer, which along with the continued reopening of the New Jersey economy, served to moderate the 7% load loss seen earlier in the year caused by the COVID-19 pandemic.
In early August, tropical storm, Isaias, wreaked havoc across the New York, New Jersey area with powerful winds and heavy rains; and the fast-moving storm did left approximately 1 million of our customers in New Jersey and Long Island without power.
PSE&G and PSEG Long Island worked around the clock alongside nearly 3,000 mutual aid personnel in New Jersey and over 5,000 on Long Island to restore service.
In New Jersey, we restored 90% of our customers within 72 hours.
We were able to restore 80% of customers who lost service within 72 hours.
At the state level, the energy efficiency decision authorizing a $1 billion investment over three years represents an annual run rate of about $350 million, which is nearly a tenfold increase from our previous annual energy efficiency spend.
These investments will receive recovery of and on capital through a clause mechanism at the current authorized return-on-equity of 9.6% and be amortized over 10 years with no incentives or penalties applied during the first five years from the start of the program.
The 10-year energy efficiency programs approved by the BPU will help New Jersey achieve its preliminary energy savings target of 2.15% for electricity and 1.1% for gas within five years.
These persistent conditions kept PJM day ahead around the clock prices in the mid-teens to low $20 per megawatt hour for most days during the third quarter, despite a few weather-driven spikes above $30 per megawatt hour over the summer.
The addition of the next jury hearings for the second ZEC proceeding will improve transparency and we believe our application supports the need for more than a $10 per megawatt attribute repayment for the Salem and Hope Creek units.
A new Brattle report estimates that preservation of our New Jersey nuclear units through an extension of the $10 per megawatt hour attribute payment saves customers approximately $175 million per year in lower energy costs over the next 10 years.
The New Jersey Department of Environmental Protection also weighed in through a recently issued report evaluating the states progress in reducing its greenhouse gas emission with a goal of 80% by the year 2050.
One of the recommendations in the DEPs 80/50 report, is to retain existing carbon-free resources, including the Stage 3 nuclear power plant.
And regarding governance, we continue to garner first tier scores for our contributions disclosure and transparency, as cited in the 2020 update of the Corporate Political Disclosure and Accountability Index, also known as the CPA-Zicklin Index, with a score of 85.7, which exceeds both the S&P 500 company average as well as the Utility average score of 77.2.
As I mentioned, we are narrowing PSEG's non-GAAP operating earnings guidance for full year 2020 by removing $0.05 per share off the lower end.
This updates our guidance range to $3.35 to $3.50 per share, based on solid results through the first nine months of the year and our ongoing confidence that we can effectively manage costs at both businesses, continue executing our PSE&Gs investment programs and provide New Jersey with safe, reliable sources of efficient and zero-carbon sources of electricity.
We continue to expect regulated operations to contribute nearly 80% of total non-GAAP operating earnings for the year, reflecting the benefits of PSE&Gs ongoing investments in New Jersey's energy infrastructure.
We also remain on-track to execute on the PSEG five-year $13 billion to $15.7 billion capital plan without the need to issue new equity, and our liquidity position at September 30 stood at nearly $5 billion.
PSEG continues its due diligence and negotiations with Orsted, in preparation of making a final recommendation to our Board of Directors on whether to invest up to a 25% equity stake in the Ocean Wind project.
As Ralph said, PSEG reported non-GAAP operating earnings for the third quarter of 2020 of $0.96 per share versus $0.98 per share in last year's third quarter.
PSE&G reported net income of $0.61 per share for the third quarter of 2020 compared with net income of $0.68 per share for the third quarter of 2019, as shown on Slide 14.
Investment in transmission added $0.04 per share third quarter net income.
Electric margin was a $0.01 per share favorable compared to the year-earlier quarter, driven by higher weather normalized residential volumes, mostly offset by lower commercial and industrial demand.
Summer 2020 weather was a $0.01 per share ahead of weather experienced in the third quarter of 2019.
O&M expense was $0.03 unfavorable versus the third quarter of 2019, primarily reflecting our internal labor costs on tropical storm Isaias and timing of certain maintenance activities, partly offset by the reversal of certain COVID-19-related cost recognized in prior quarters.
To reflect that order, PSE&G deferred certain COVID-19-related O&M and gas bad debt expense previously recorded and established a corresponding regulatory asset of approximately $0.05 per share for future recovery.
Obviously, offsetting this timing item, PSE&G reversed a $0.04 accrual of revenue under the weather normalization costs for collection of lower gas margins resulting from the warmer-than-normal winter earlier in the year due to recovery limitations under that quarters earnings test.
Distribution-related depreciation lowered net income by a $0.01 per share and non-operating pension expense was a $0.01 per share favorable compared with last year's third quarter.
Flow through taxes and other items lowered net income by $0.07 per share compared to the third quarter of 2019, driven largely by timing of taxes and taxes related to bad debt expense.
Summer weather in the third quarter is measured by the Temperature-Humidity Index, was nearly 18% warmer than normal and 7% warmer than the third quarter of 2019.
Weather normalized electric sales for the quarter declined by approximately 1% versus last year, again reflecting the increases that we've seen in residential volumes, which only partially offsets lower commercial industrial sales.
Residential weather normalized sales were up 7% due to the COVID-19 work-from-home impact.
However, C&I sales declined by approximately 6% with many parts of the New Jersey economy not yet fully reopened.
On a net margin basis, however, residential margins -- which are driven by volumes, are 5% year-to-date, weather normalized -- have offset the margin impact of lower C&I demands.
PSE&G invested approximately $700 million in the third quarter and $1.9 billion through September 30th, as part of its 2020 capital investment program of approximately $2.7 billion in infrastructure upgrades to its transmission and distribution facilities to maintain reliability, increase resiliency and replace aging energy infrastructure.
The Clean Energy Future Energy Efficiency Investment will begin later this year and ramp up to approximately $125 million in 2021 before reaching a full annual run rate of about $350 million in 2022.
We continue to forecast that over 90% of PSEGs planned capital investment will be directed to the utility over the 2020 to 2024 timeframe.
PJM cost reallocations will more than offset the higher revenue requirements of approximately $119 million and result in a net reduction in costs to PSE&G customers when implemented in January of 2021.
PSE&Gs forecast of net income for the full year has been updated to $1,325 million to $1,355 million from $1,310 million to $1,370 million.
PSEG Power reported non-GAAP operating earnings for the third quarter of $0.33 per share, and non-GAAP adjusted EBITDA of $349 million.
This compares to non-GAAP operating earnings of $0.29 per share and non-GAAP adjusted EBITDA of $322 million for the third quarter of 2019.
And we've also provided you with more detail on generation for the quarter and for year-to-date 2020 on Slides 21 and 22.
PSEG Power's third quarter non-GAAP operating earnings were positively affected by several items that have improved results by $0.04 per share compared to the year ago quarter.
The scheduled rise in PJM's capacity revenue on June 1, increased non-GAAP operating earnings comparison by $0.03 per share compared with the third quarter of 2019.
Reduced generation volumes lowered results by $0.02 per share versus the third quarter of '19, reflecting the sale of the Keystone and Conemaugh coal units last year, as well as some lower market demand.
Recontracting and market impacts reduced results by $0.02 per share versus the year ago quarter.
And gas operations were $0.02 per share higher.
Lower O&M expense was $0.03 per share favorable compared to last year's third quarter, reflecting lower fossil maintenance costs, including the absence of a major outage at Lindon that occurred in the third quarter of 2019.
Lower interest and depreciation expense combined to add a $0.01 per share versus the year ago quarter.
And also during the quarter, New Jersey enacted an increase in the corporate surtax to 2.5% as part of the fiscal year 2021 budget, which lowered comparisons of $0.01 per share for the third quarter of 2019.
Gross margin for the third quarter was $33 per megawatt hour, an improvement of $2 per megawatt hour over the third quarter of 2019, nearly reflecting the scheduled increase in capacity prices with the new energy year that began June 1st.
Total generating output declined 9% to 14.9 terawatt hours for the third quarter, reflecting the sale of Keystone and Conemaugh.
PSE&G Power's combined cycle fleet produced 6.7 terawatt hours of output, down 7%, reflecting lower market demand driven by ongoing COVID-19-related impacts on economic activity in the state.
The nuclear fleet operated at an average capacity factor of 95.9% -- I'm sorry, 95.7% for the quarter, producing 8.2 terawatt hours, up 5% over the third quarter of '19, and represent 55% of total generation.
PSE&G Power continues to forecast total output of 2020 of 50 to 52 terawatt hours.
For the remainder of 2020, Power has hedged approximately 95% to 100% of production at an average price of $36 per megawatt hour.
For 2021, Power has hedged 75% to 80% of forecast production of 48 to 50 terawatt hours, at an average price of $35 per megawatt hours.
And Power is also forecasting output for 2022 of 48 to 50 terawatt hours, and approximately 35% to 40% of Power's output in 2022 is hedged at an average price of $34 per megawatt hour.
We are updating the forecast of both Power's non-GAAP operating earnings for 2020 to a range of $385 million to $430 million from $345 million to $435 million, and estimate of non-GAAP operating EBITDA to a range of $980 million to a $1,045 million from $950 million to $1,050 million.
We reported net income of $8 million or $0.02 per share for the third quarter of 2020 compared to net income of $6 million or $0.01 per share in the third quarter of 2019.
And the forecast for PSEG Enterprise and other for 2020 has been updated to a net loss of $10 million from a net loss of $5 million.
PSEG ended the third quarter with over $4.9 billion of available liquidity, including cash on hand of about $966 million and debt representing 52% of our consolidated capital.
In August, PSEG issued $550 million five-year senior notes at 80 basis points and $550 million 10-year senior notes at 1.6%, and retired $500 million of the 364-day term loan agreements issued in the spring.
PSEG has also offered $700 million of floating rate term loans that will mature in November 2020.
Also, in August, PSE&G issued $375 million of 30-year secured medium term notes at a coupon rate of 2.05% and retired $250 million of MTN's at maturity.
Power's debt as a percentage of capital declined to 28% at September 30th, and we still expect to fully fund PSEG's five-year $13 billion to $15.7 billion capital investment program over the 2020 to 2024 period without the need to issue new equity.
And as Ralph mentioned, we've narrowed our non-GAAP operating earnings guidance for the full year by removing $0.05 per share from the lower end of the original guidance, and updated range to $3.35 per share to $3.50 per share.

Summary:
PSEG reported non-GAAP operating earnings for the third quarter of 2020 of $0.96 per share versus $0.98 per share in last year's third quarter.
PSEG's GAAP results for the third quarter were $1.14 per share compared with $0.79 per share in the third quarter of 2019.
We are updating PSEG's non-GAAP operating earnings guidance for 2020 to a range of $3.35 to $3.50 per share, which removes $0.05 per share from the lower end of our original guidance range.
This updates our guidance range to $3.35 to $3.50 per share, based on solid results through the first nine months of the year and our ongoing confidence that we can effectively manage costs at both businesses, continue executing our PSE&Gs investment programs and provide New Jersey with safe, reliable sources of efficient and zero-carbon sources of electricity.
As Ralph said, PSEG reported non-GAAP operating earnings for the third quarter of 2020 of $0.96 per share versus $0.98 per share in last year's third quarter.
And as Ralph mentioned, we've narrowed our non-GAAP operating earnings guidance for the full year by removing $0.05 per share from the lower end of the original guidance, and updated range to $3.35 per share to $3.50 per share.