Switching Negatively Impacts PSEG in Q2; Holds Line on Migration Forecast

Customer migration away from Basic Generation Service in New Jersey negatively impacted second quarter earnings at PSEG Power by about $15 million, versus the year-ago, parent Public Service Enterprise Group reported yesterday.

Customer migration represented about 38% of BGS volumes in the second quarter, up from 36% during the first quarter of 2012.

PSEG called this level of migration in line with expectations and affirmed its prior forecast of customer migration in the range of 36% to 40% for the year 2012.

In particular, executives noted that the combination of the lower, reset BGS prices which took effect June 1, in combination with an increase in market prices due to heat-related demand, has decreased headroom for competitive suppliers. Executives said that current headroom is similar to the level seen in the third quarter of 2011, during which time migration to competitive electric supply slowed.