Prospectus
[LOGO] PSEG
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
1,432,914 shares of Common Stock without Par Value
Enterprise Direct Plan
(Dividend Reinvestment and Stock Purchase Plan)
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We hereby offer participation in the Enterprise Direct Plan (Enterprise
Direct or Plan). Enterprise Direct is a direct stock purchase plan designed to
promote long-term ownership among investors in our common stock, without par
value (Common Stock).
Under Enterprise Direct:
o Shareholders who own shares of Common Stock or any of the several
series of preferred stock (Preferred Stock) of our subsidiary,
Public Service Electric and Gas Company (PSE&G), directly in their
name may enroll.
o Non-shareholders may enroll in the Plan by making an initial
investment (Initial Investment) of at least $250. The maximum
Initial Investment is $10,000. An enrollment fee (Enrollment Fee)
will be deducted from the Initial Investment.
o All or a portion of dividends from Common Stock or Preferred Stock
may automatically be reinvested in additional shares of Common
Stock.
o Once enrolled, Participants may make additional investments
(Voluntary Contributions) of $50 or more. The maximum Voluntary
Contribution for any single investment date will be $10,000. The
maximum annual investment (including the Initial Investment and
Voluntary Contributions, but excluding reinvested dividends and
shares deposited with Enterprise Direct for safekeeping only) is
$125,000.
o Shareholders who hold Common Stock certificates may deposit them
with the Administrator for safekeeping, whether or not they reinvest
their dividends.
o No brokerage commissions will be charged for purchases or
reinvestments through the Plan. Participants will be required to pay
certain fees in connection with the Plan. See "Service Fees".
o Any shareholders enrolled or deemed to be enrolled (Participants)
may sell shares of Common Stock credited to their accounts through
Enterprise Direct. Brokerage commissions, related service charges
and any applicable taxes will be deducted from the proceeds of such
sales.
o Participants may have any non-reinvested dividends on shares of
Common Stock held in their Enterprise Direct accounts paid by
electronic deposit.
Shares of Common Stock will be purchased under the Plan, at our option,
from newly issued shares, shares held in our treasury or shares purchased on the
open market by a broker-dealer registered under the Securities Exchange Act of
1934 (Exchange Act) who may be affiliated with the Plan's Administrator, which
is acting as an "agent independent" of us and our affiliates, as that term is
defined in rules and regulations under the Exchange Act (Independent Agent).
However, Common Stock purchased with the Initial Investment by a non-shareholder
will be acquired in the open market. All sales of Common Stock under the Plan
will be made by an Independent Agent.
The Common Stock is listed on the New York Stock Exchange under the ticker
symbol "PEG." The closing price of the Common Stock on May 10, 2007 was $89.41.
We have appointed The Bank of New York (BNY) as the Administrator of the
Plan.
Investing in the Common Stock involves risks.
See "Risk Factors" beginning on page 3.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is May 11, 2007.
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission (SEC). In this prospectus, unless the context
indicates otherwise, the words and terms PSEG, Company, we, our, ours and us
refer to Public Service Enterprise Group Incorporated and its consolidated
subsidiaries.
We believe that we have included or incorporated by reference all
information material to investors in this prospectus, but certain details that
may be important for specific investment purposes have not been included. To see
more detail, you should read the exhibits filed with or incorporated by
reference into the registration statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information with
the SEC. Our filings are available to the public over the Internet at the SEC's
web site at http://www.sec.gov, as well as at our web site at www.pseg.com. You
may read and copy any material on file with the SEC at the SEC's Public
Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the Public Reference Room.
You may also inspect these documents at the New York Stock Exchange, Inc.
(New York Stock Exchange) where certain of our securities are listed.
The SEC allows us to "incorporate by reference" documents that are filed
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference or
deemed incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will be deemed to automatically
update and supersede this incorporated information. We incorporate by reference
the information in the documents listed below that has been filed with the SEC
and any future filings made with the SEC under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), prior
to the termination of this offering of Common Stock.
o Our Annual Report on Form 10-K for the year ended December 31, 2006.
o Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2007.
o Our Current Reports on Form 8-K filed January 3, 2007, January 30,
2007 (only with respect to Item 8.01) and April 20, 2007.
o The description of Common Stock in our registration statement filed
pursuant to Section 12 of the Exchange Act, and any amendment or
report filed for the purpose of amending such description.
You can get a free copy of any of the documents incorporated by reference
in this prospectus by making an oral or written request directed to:
Vice President - Investor Relations
PSEG Services Corporation
80 Park Plaza, 6th Floor
Newark, NJ 07102
Telephone (973) 430-6565
You should rely only on the information contained or incorporated by
reference or deemed to be incorporated by reference in this prospectus or in any
prospectus supplement. We have not authorized anyone else to provide you with
different or additional information. You should not rely on any other
information or representations. Our results of operations, financial condition,
business and prospects may change after this prospectus and the prospectus
supplement are distributed to you. You should not assume that the information in
this prospectus and any prospectus supplement is accurate as of any date other
than the dates on the front of those documents. You should read all information
supplementing this prospectus.
THIS PROSPECTUS CONTAINS THE TEXT OF ENTERPRISE DIRECT IN ITS ENTIRETY AND,
THEREFORE, SHOULD BE RETAINED BY PARTICIPANTS FOR FUTURE REFERENCE.
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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
General
We are a holding company that neither owns nor operates any physical
properties. Through our subsidiaries, we are one of the leading providers of
energy and energy-related services in the nation. Our operations are primarily
in the Northeastern and MidAtlantic United States as well as in other select
domestic and international markets. We have four direct, wholly-owned
subsidiaries:
o Public Service Electric and Gas Company (PSE&G), which is an
operating public utility company engaged principally in the
transmission and distribution of electric energy and gas service in
New Jersey;
o PSEG Power LLC (Power), which is a multi-regional independent
electric generation and wholesale energy marketing company;
o PSEG Energy Holdings L.L.C. (Energy Holdings), which participates
nationally and internationally in energy-related lines of business
through its subsidiaries; and
o PSEG Services Corporation (Services), which provides administrative
and support services to us and our subsidiaries.
We are a New Jersey corporation with our principal offices located at 80
Park Plaza, Newark, New Jersey 07102. Our telephone number is (973) 430-7000.
RISK FACTORS
The following factors should be considered when reviewing our business and
are relied upon by us in issuing any forward-looking statements. These factors
could affect actual results and cause our results to differ materially from
those expressed in any forward-looking statements made by, or on behalf of us.
Some or all of these factors may apply to us and our subsidiaries.
Generation operating performance may fall below projected levels and could
negatively impact results
Operating generating stations below expected capacity levels, especially
at low-cost nuclear and coal facilities, may result in lost revenues and
increased expenses, including replacement power costs. Factors that could cause
generating station operations to fall below expected levels include, but are not
limited to, the following:
o breakdown or failure of equipment, processes or management
effectiveness;
o disruptions in the transmission of electricity;
o labor disputes;
o fuel supply interruptions or transportation constraints;
o limitations which may be imposed by environmental or other
regulatory requirements;
o permit limitations; and
o operator error or catastrophic events such as fires, earthquakes,
explosions, floods, acts of terrorism or other similar occurrences.
The potential lost revenues and increased expenses could result in a case
where sufficient cash may not be available to service debt. In addition, any
prolonged operating performance issues could potentially result in an impairment
of the value of the affected facility.
Failure to obtain adequate and timely rate relief could negatively impact
results
As a public utility, PSE&G's rates are regulated. These rates are designed
to allow PSE&G the opportunity to recover its operating expenses and earn a fair
return on its rate base, which primarily consists of its property, plant and
equipment. These rates include its electric and gas tariff rates that are
subject to regulation by the BPU as well as its transmission rates that are
subject to regulation by FERC. PSE&G's base rates are set by the BPU for
electric distribution and gas distribution
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and are effective until the time the BPU approves a base rate change. These base
rate cases generally take place when equity returns fall below reasonable
levels. Some categories of costs, such as energy costs, are recovered through
adjustment charges that are periodically reset to reflect actual costs. If these
costs exceed the amount included in PSE&G's adjustment charges, there may be a
negative impact on cash flows.
If PSE&G does not obtain adequate rate treatment on a timely basis in
order to meet its operating expenses, there may be a negative impact on earnings
and operating cash flows. PSE&G can give no assurances that tariff relief will
be timely or sufficient for it to recover its costs and provide a sufficient
return for its investors.
The distribution facilities of Energy Holdings' subsidiary, PSEG Global
L.L.C. (Global) are rate-regulated enterprises. Governmental authorities
establish rates charged to customers. While these rates are designed to cover
all operating costs and provide a return on investment, Energy Holdings can give
no assurances that rates will, in the future, be sufficient to cover Global's
costs and provide a sufficient return on its investments. In addition, future
rates may not be adequate to provide cash flow to pay principal and interest on
the debt of Global's subsidiaries and affiliates or to enable its subsidiaries
and affiliates to comply with the terms of debt agreements.
Inability to balance energy obligations, available supply and trading risks
could negatively impact results
The revenues generated by the operation of the generating stations are
subject to market risks that are beyond our control. Generation output will
either be used to satisfy wholesale contract requirements, other bilateral
contracts or be sold into other competitive power markets. Participants in the
competitive power markets are not guaranteed any specified rate of return on
their capital investments through recovery of mandated rates payable by
purchasers of electricity.
Generation revenues and results of operations are dependent upon
prevailing market prices for energy, capacity, ancillary services and fuel
supply in the markets served.
Our energy trading and marketing activities frequently involve the
establishment of forward sale positions in the wholesale energy markets on
long-term and short-term bases. To the extent that we have produced or purchased
energy in excess of our contracted obligations, a reduction in market prices
could reduce profitability.
Conversely, to the extent that we have contracted obligations in excess of
energy we have produced or purchased, an increase in market prices could reduce
profitability.
If the strategy we utilize to hedge our exposures to these various risks
is not effective, we could incur significant losses. Our substantial market
positions can also be adversely affected by the level of volatility in the
energy markets that, in turn, depends on various factors, including weather in
various geographical areas, short-term supply and demand imbalances and pricing
differentials at various geographic locations, which cannot be predicted with
any certainty.
Increases in market prices also affect our ability to hedge generation
output and fuel requirements as the obligation to post margin increases with
increasing prices and, resultingly, could require the maintenance of liquidity
resources that would be prohibitively expensive.
Environmental regulations could limit operations
We are required to comply with numerous statutes, regulations and
ordinances relating to the safety and health of employees and the public, the
protection of the environment and land use. These statutes, regulations and
ordinances are constantly changing. While we believe that we have obtained all
material approvals currently required to own and operate our facilities and that
approvals will be issued in a timely manner, significant additional costs could
be incurred in order to comply with these requirements. In some cases, the cost
of compliance could exceed the marginal value of the facility. Failure to comply
with environmental statutes, regulations and ordinances could have a material
effect on us, including potential civil or criminal liability, the imposition of
clean-up liens or fines and expenditures of funds to bring facilities into
compliance or possible impairment of the value of the affected facility.
We can give no assurance that we will be able to:
o obtain all required environmental approvals not yet received or that
may be required in the future;
o obtain any necessary modifications to existing environmental
approvals;
o maintain compliance with all applicable environmental laws,
regulations and approvals; or
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o recover any resulting costs through future sales.
Delay in obtaining or failure to obtain and maintain in full force and
effect any environmental approvals, or delay or failure to satisfy any
applicable environmental regulatory requirements, could prevent construction of
new facilities, operation of existing facilities or sale of energy from these
facilities or could result in significant additional costs.
Many of our generating facilities are located in the State of New Jersey
where environmental programs are generally considered to be more stringent in
comparison to similar programs in other states. As such, there may be instances
where the facilities located in New Jersey are subject to more stringent and,
therefore, more costly pollution control requirements than competitive
facilities in other states.
Regulatory issues significantly impact operations and profitability
Federal, state and local authorities impose substantial regulation and
permitting requirements on the electric power generation business. We are
required to comply with numerous laws and regulations and to obtain numerous
governmental permits in order to operate generation stations. In addition, our
energy distribution businesses could be subject to financial penalties if
reliability performance standards are not met.
We can give no assurance that existing regulations will not be revised or
reinterpreted, that new laws and regulations will not be adopted or become
applicable or that future changes in laws and regulations, including the
possibility of reregulation in some deregulated markets, will not have a
detrimental effect on our businesses.
We believe that we have obtained all material energy-related federal,
state and local approvals currently required to operate our generation stations
and sell energy output. Although not currently required, additional regulatory
approvals may be required in the future due to changes in laws and regulations
or for other reasons. No assurance can be given that we will be able to obtain
any required regulatory approval in the future, or that we will be able to
obtain any necessary extensions in receiving any required regulatory approvals.
We are also subject to pervasive regulation with respect to the operation
of nuclear generation stations. This regulation involves testing, evaluation and
modification of all aspects of plant operation in light of safety, environmental
and personnel management requirements. We must also make continuous
demonstrations that plant operations meet applicable requirements. The Nuclear
Regulatory Commission has the ultimate authority to determine whether any
nuclear generation unit may operate.
Any failure to obtain or comply with any required regulatory approvals
could materially adversely affect our ability to operate generation stations or
sell electricity to third parties.
In addition, there is also a risk to us if states decide to turn away from
competition and allow regulated utilities to continue to own or reacquire and
operate generating stations in a regulated and potentially uneconomical manner,
or to encourage rate-based treatment for the construction of new base-load
generating units. This has already occurred in certain states. The lack of
consistent rules in markets may negatively impact the competitiveness of our
plants.
Moreover, current rules being developed by regulatory authorities with
respect to the access to and construction of transmission and the allocation of
costs for such construction may have the effect of altering the level playing
field between transmission options and generation options, which could have a
competitive impact upon us.
Availability of adequate power transmission facilities could impact operations
The ability to sell and deliver electric energy products may be adversely
impacted and the ability to generate revenues may be limited if:
o transmission is disrupted;
o transmission capacity is inadequate; or
o a region's power transmission infrastructure is inadequate.
Inability to access sufficient capital in the amounts and at the times needed
could negatively impact results
Capital for projects and investments has been provided by
internally-generated cash flow, equity issuances and borrowings. Continued
access to debt capital from outside sources is required in order to efficiently
fund the cash flow needs
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of our businesses. The ability to arrange financing and the costs of capital
depend on numerous factors including, among other things, general economic and
market conditions, the availability of credit from banks and other financial
institutions, investor confidence, the success of current projects and the
quality of new projects.
The ability to access sufficient capital in the bank and debt capital
markets is dependent upon current and future capital structure, performance,
financial condition and the availability of capital at a reasonable economic
cost. As a result, no assurance can be given that we will be successful in
obtaining financing for projects and investments or funding the equity
commitments required for such projects and investments in the future.
Counterparty credit risks or a deterioration of credit quality could negatively
impact results
As market prices for energy and fuel fluctuate, our forward energy sale
and forward fuel purchase contracts could require substantial collateral
requiring us to source additional liquidity during periods when our ability to
source such liquidity may be limited. Also, in connection with our energy
trading activities, we must meet credit quality standards required by
counterparties. Standard industry contracts generally require trading
counterparties to maintain investment grade ratings. These same contracts
provide reciprocal benefits to us. If we lose our investment grade credit
rating, we would have to provide additional collateral in the form of letters of
credit or cash, which would significantly impact the energy trading business.
This would increase our costs of doing business and limit our ability to
successfully conduct energy trading operations.
We sell generation output through the execution of bilateral contracts.
These contracts are subject to credit risk, which relates to the ability of
counterparties to meet their contractual obligations. Any failure to perform on
the part of these counterparties could have a material impact on our results of
operations, cash flows and financial position. As market prices rise above
contracted price levels, we are required to post collateral with purchasers.
Collateral posting requirements for New Jersey's Basic Generation Service (BGS)
contracts, in particular, are one-sided. If market prices fall below BGS
contracted price levels for a single contract, power purchasers are not required
to post collateral with us. However, such margin positions can be netted against
margin due from us in other BGS contracts with the same counterparty.
Substantial competition from well-capitalized participants in the worldwide
energy markets could negatively impact results
Restructuring of worldwide energy markets is creating opportunities for,
and substantial competition from, well-capitalized entities that may adversely
affect our ability to make investments on favorable terms and achieve growth
objectives. Increased competition could contribute to a reduction in prices
offered for power and could result in lower returns which may affect our ability
to service our outstanding indebtedness, including short-term debt. Some of the
competitors include:
o merchant generators;
o banks, funds and other financial entities;
o domestic and multi-national utility generators;
o energy marketers;
o fuel supply companies; and
o affiliates of other industrial companies.
As a holding company, the ability to service debt could be limited
We are a holding company with no material assets other than the stock or
membership interests of our subsidiaries and project affiliates. As such, we
depend on our subsidiaries' and project affiliates' cash flow and our access to
capital in order to service our indebtedness. Our subsidiaries and project
affiliates are separate and distinct legal entities that have no obligation,
contingent or otherwise, to pay any amounts when due on our debt or to make any
funds available to pay such amounts. As a result, our debt will effectively be
subordinated to all existing and future debt, trade creditors, and other
liabilities of our subsidiaries and project affiliates and our rights, and
hence, the rights of our creditors to participate in any distribution of assets
of any subsidiary or project affiliate upon its liquidation or reorganization or
otherwise, would be subject to the prior claims of that subsidiary's or project
affiliate's creditors, except to the extent that our claims as a creditor of
such subsidiary or project affiliate may be recognized.
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In addition, certain of our subsidiaries' project-related debt agreements
generally restrict the subsidiaries' ability to pay dividends, make cash
distributions or otherwise transfer funds. These restrictions may include
achieving and maintaining financial performance or debt coverage ratios, absence
of events of default, or priority in payment of other current or prospective
obligations.
Adverse international developments could negatively impact results
A component of our business is international distribution and generation,
primarily in Chile and Peru. The economic and political conditions in certain
countries where we have interests present risks that may be different than those
found in the U.S. which could affect the value of our investments, cash flows
from projects and make it more difficult to obtain non-recourse project
refinancing on suitable terms or could impair our ability to enforce our rights
under agreements relating to such projects. Such risks include:
o expropriation or nationalization of energy assets;
o renegotiation or abrogation of existing contracts; and
o changes in law or tax policy.
Operations in foreign countries also present risks associated with
currency exchange rates and convertibility, inflation and repatriation of
earnings. In some countries, economic and monetary conditions and other factors
could affect our ability to convert our cash distributions to U.S. Dollars or
other freely convertible currencies, or to move funds offshore from these
countries. Furthermore, the central bank of any of these countries may have the
authority to suspend, restrict or otherwise impose conditions on foreign
exchange transactions or to approve distributions to foreign investors.
Inability to realize tax benefits could negatively impact results
Through our leveraged lease investments, we acquire an asset by investing
equity representing approximately 15% to 20% of the cost of the asset and
incurring non-recourse lease debt for the balance. As the owner, we are entitled
to depreciate the asset under applicable federal and state tax guidelines and
receive income from the tax benefits associated with interest and depreciation
deductions with respect to the leased property. Our ability to realize these tax
benefits is dependent on operating income generated by other parts of our
business. A reduction of operating income could impair our ability to receive
such benefits, which would result in a reduction of earnings and cash flows. In
addition, during 2006, the Internal Revenue Service (IRS) in its audit of our
tax returns proposed to disallow certain deductions associated with some of the
leveraged leases which have been designated by the IRS as listed transactions.
Any material disallowance of deductions could impact our earnings and ability to
service outstanding indebtedness.
Decreases in the value of the pension and other postretirement assets could
require additional funding
Adverse changes in the rates of return or performance of the investments
in which our pension and other postretirement trust assets are held could lower
the value of the funds and the trust assets. Such a decline in value could
result in additional funding obligations to meet the applicable legal and
regulatory requirements. To the extent that these additional funding obligations
are significant, this could impact our ability to service debt.
Changes in technology may make power generation assets less competitive
A key element of our business plan is that generating power at central
power plants produces electricity at relatively low cost. There are alternative
technologies to produce electricity that continue to attract capital for
research and development, most notably fuel cells, microturbines, windmills and
photovoltaic (solar) cells. It is possible that advances in technology will
reduce the cost of alternative methods of producing electricity to a level that
is competitive with that of most central station electric production. If this
were to happen, our market share could be eroded and the value of our power
plants could be significantly impaired. Changes in technology could also alter
the channels through which retail electric customers buy electricity, which
could adversely affect financial results.
Insurance coverages may not be sufficient
We have insurance for our facilities, including:
o all-risk property damage insurance;
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o commercial general public liability insurance;
o boiler and machinery coverage;
o nuclear liability; and
o for nuclear generating units, replacement power and business
interruption insurance in amounts and with deductibles that
management considers appropriate.
We can give no assurance that this insurance coverage will be available in
the future on commercially reasonable terms or that the insurance proceeds
received for any loss of or any damage to any of our facilities will be
sufficient to fund future payments on debt. Additionally, some properties may
not be insured in the event of an act of terrorism.
Recession, acts of war or terrorism could negatively impact results
The consequences of a prolonged recession and adverse market conditions
may include the continued uncertainty of energy prices and the capital and
commodity markets. We cannot predict the impact of any continued economic
slowdown, reduced growth rate in energy usage or fluctuating energy prices;
however, such impact could have a material adverse effect on our financial
condition, results of operations and net cash flows.
Major industrial facilities, generation plants, fuel storage facilities
and transmission and distribution facilities may be targets of terrorist
activities that could result in disruption of our ability to produce or
distribute some portion of our energy products. Any such disruption could result
in a significant decrease in revenues and/or significant additional costs to
repair, which could have a material adverse impact on our financial condition,
results of operation and cash flows.
FORWARD-LOOKING STATEMENTS
This prospectus includes "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. All statements, other
than statements of historical facts, included in this prospectus or in the
documents or information incorporated by reference or deemed to be incorporated
by reference in this prospectus that address activities, events or developments
that we expect or anticipate will or may occur in the future, including such
matters as our projections, future capital expenditures, business strategy,
competitive strengths, goals, expansion, market and industry developments and
the growth of our businesses and operations, are forward-looking statements.
These statements are based on assumptions and analyses made by us in light of
our experience and our perception of historical trends, current conditions and
expected future developments as well as other factors we believe are appropriate
under the circumstances. Forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially from those
anticipated. Such statements are based on management's beliefs as well as
assumptions made by and information currently available to management. When used
herein, the words "anticipate," "intend," "estimate," "believe," "expect,"
"plan," "hypothetical," "potential," "forecast," "project," and variations of
such words and similar expressions are intended to identify forward-looking
statements. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. The following review should not be construed as a complete
list of factors that could affect forward-looking statements. In addition to any
assumptions and other factors referred to specifically in connection with such
forward-looking statements discussed above, factors that could cause results to
materially differ from those included in any forward-looking statements include
among others, the following:
o regulatory issues that significantly impact operations;
o ability to obtain satisfactory regulatory results;
o operating performance or cash flow from investments falling below
projected levels;
o credit, commodity, interest rate, counterparty and other financial
market risks;
o adverse changes in rate regulation and or the inability to obtain
adequate and timely rate relief;
o liquidity and the ability to access capital and credit markets and
maintain adequate credit ratings;
o adverse or unanticipated weather conditions that significantly
impact costs and/or operations, including generation;
o ability to attract and retain management and other key employees;
o changes in the electric industry, including changes to regional
transmission organizations and power pools;
o changes in energy policies and regulation;
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o changes in demand;
o inability to meet generation operating performance;
o inability to maintain nuclear operating performance at projected
levels;
o changes in the number of market participants and the risk profiles
of such participants;
o availability of power transmission facilities that impact the
ability to deliver output to customers;
o growth in costs and expenses;
o operating performance or cash flow from investments falling below
projected levels;
o environmental regulations that significantly impact operations;
o changes in rates of return on overall debt and equity markets that
could adversely impact the value of pension and other post
retirement assets and liabilities and the Nuclear Decommissioning
Trust Funds;
o ability to maintain satisfactory regulatory results;
o changes in political conditions, recession, acts of war or
terrorism;
o changes in technology that make generation, transmission, and/or
distribution assets less competitive;
o continued availability of insurance coverage at commercially
reasonable rates;
o involvement in lawsuits, including liability claims and commercial
disputes;
o acquisitions, divestitures, mergers, restructurings or strategic
initiatives that change PSEG's, PSE&G's, Power's and Energy
Holdings' strategy or structure;
o business combinations among competitors and major customers;
o general economic conditions, including inflation or deflation;
o changes in tax laws and regulations;
o changes to accounting standards or accounting principles generally
accepted in the U.S., which may require adjustments to financial
statements;
o ability to recover investments or service debt as a result of any of
the risks or uncertainties mentioned herein;
o energy transmission constraints or lack thereof;
o adverse changes in the market for energy, capacity, natural gas,
coal, nuclear fuel, emissions credits, congestion credits and other
commodity prices, especially during significant price movements for
natural gas and power;
o surplus of energy capacity and excess supply;
o substantial competition in the domestic and worldwide energy
markets;
o inability to effectively manage portfolios of electric generation
assets, gas supply contracts and electric and gas supply
obligations;
o margin posting requirements, especially during significant price
movements for natural gas and power;
o availability of fuel and timely transportation at reasonable prices;
o effects on competitive position of actions involving competitors or
major customers;
o adverse market developments or changes in market rules, including
delays or impediments to implementation of reasonable capacity
markets;
o changes in product or sourcing mix;
o delays, cost escalations or unsuccessful construction and
development;
o changes in regulation and safety and security measures at nuclear
facilities;
o changes in political regimes in foreign countries;
o international developments negatively impacting business;
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o changes in foreign currency exchange rates;
o deterioration in the credit of lessees and their ability to
adequately service lease rentals; and
o ability to realize tax benefits and favorably resolve tax audit
claims.
All of the forward-looking statements made in this prospectus are
qualified by these cautionary statements and we cannot assure you that the
results or developments anticipated by us will be realized or, even if realized,
will have the expected consequences to or effects on us or our business
prospects, financial condition or results of operations. You should not place
undue reliance on these forward-looking statements in making your investment
decision. We expressly disclaim any obligation or undertaking to release
publicly any updates or revisions to these forward-looking statements to reflect
events or circumstances that occur or arise or are anticipated to occur or arise
after the date hereof. In making an investment decision regarding the
securities, we are not making, and you should not infer, any representation
about the likely existence of any particular future set of facts or
circumstances. The forward-looking statements contained in this prospectus, any
prospectus supplement and the documents incorporated by reference or deemed to
be incorporated by reference into this prospectus and any related prospectus
supplement are intended to qualify for the safe harbor provisions of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended.
DESCRIPTION OF THE COMMON STOCK
The following description summarizes the material terms of our Common
Stock. Because this section is a summary, it does not describe every aspect of
our Common Stock. For additional information, you should refer to the applicable
provisions of the New Jersey Business Corporation Act and our Certificate of
Incorporation, as amended (the "Charter") and By-Laws, as amended. Our Charter
and By-Laws are exhibits to the registration statement of which this prospectus
is a part.
Authorized Common Stock
Our authorized capital stock consists of one billion shares of Common
Stock, without par value.
Common Stock
General. As of May 10, 2007, 253,626,420 shares of our Common Stock were
issued and outstanding. The outstanding shares of our Common Stock are, and any
Common Stock offered hereby when issued and paid for will be, fully paid and
non-assessable.
Dividend Rights. Holders of our Common Stock are entitled to such
dividends as may be declared from time to time by our board of directors from
legally available funds after payment of all amounts owed on any preferred stock
that may be outstanding.
Voting Rights. Holders of our Common Stock are entitled to one vote for
each share held by them on all matters presented to shareholders.
Liquidation Rights. After satisfaction of the preferential liquidation
rights of any preferred stock, the holders of our Common Stock are entitled to
share, ratably, in the distribution of all remaining net assets.
Redemption Rights. The shares of our Common Stock are not subject to
redemption or to any further calls or assessments and are not entitled to the
benefit of any sinking fund provisions.
Transfer Agent and Registrar
The transfer agent and registrar for our common and preferred stock is The
Bank of New York.
10
THE ENTERPRISE DIRECT PLAN
The following constitutes the full text of Enterprise Direct:
Purpose
Enterprise Direct is a direct stock purchase plan designed to promote
long-term ownership among investors in our Common Stock. Participants may
purchase shares of Common Stock and reinvest all or a portion of the dividends
paid on Common Stock and/or Preferred Stock in shares of Common Stock, without
the payment of any brokerage commissions. To the extent, if any, that such
shares are purchased directly from us, the Plan will provide Enterprise with
additional equity capital.
Administration
Enterprise Direct is administered by the individual (who may be our
employee or an employee of any of our subsidiaries), bank, trust company or
other entity (including us or any of our subsidiaries) appointed from time to
time by us to act as administrator of the Plan (Administrator).
The Administrator is responsible for administering the Plan, receiving all
cash investments made by Participants, forwarding funds to be used to purchase
Common Stock in the open market and sales instructions to the Independent Agent,
holding shares of stock acquired under the Plan, maintaining records, sending
statements of account to Participants and performing other duties related to the
Plan. Under certain circumstances, the Administrator may be an Independent
Agent.
We have appointed The Bank of New York as the Administrator of Enterprise
Direct.
Inquiries
Participants may contact the Administrator by writing to:
The Bank of New York
Church Street Station
P.O. Box 11258
New York, NY 10286-1258
By Telephone, Toll Free:
1-800-242-0813 between 8:00 a.m. and 8:00 p.m. Monday through
Friday, Eastern Time;
- International Calls:
1-212-815-3700, Company #2832
- Website:
www.stockbny.com
For optional cash investments, sales, transfers, deposits or withdrawals,
mail the tear-off portion of your transaction advice or account statement to:
The Bank of New York
Investment Services Department/PSEG
P.O. Box 1958
Newark, New Jersey 07101-9774
o For investments via EFT, withdrawals, sales and changes to your
investment election you may use the Administrator's website:
www.stockbny.com.
o First-time U.S. users will have to enter their social security
number or taxpayer ID and email address when prompted in order to
establish a Personal Identification Number ("PIN").
o First time non-U.S. users will have to enter their account number
and email address in order to have a PIN mailed to their address of
record.
o For sales only, you may call BONY's toll-free number 1-800-242-0813
with your request, or 1-212-815-3700 for international calls.
11
Eligibility
Any person or entity is eligible to participate in Enterprise Direct
provided that (i) such person or entity fulfills the requirements described
below under "Enrollment Procedures" and (ii) in the case of foreign investors,
participation is limited to shareholders whose participation would not violate
local laws and regulations or subject the Plan, the Administrator or us to
taxation by or in such jurisdictions.
Regulations in certain countries may limit or prohibit participation in
this type of plan. Therefore, persons residing outside the U.S. who wish to
participate in Enterprise Direct should first determine whether they are subject
to any governmental regulations prohibiting their participation. Enterprise
Direct is not offered to any person in any country where such participation is
prohibited or where registration of us, the Administrator or the Common Stock
would be required as a condition of such person's participation.
Enrollment Procedures
Requests for copies of an enrollment and authorization form
(Enrollment/Authorization Form) and this Prospectus should be made to the
Administrator at the addresses and telephone numbers listed in "Inquiries,"
above.
Shareholders
Shareholders who hold shares of Common Stock or shares of any series of
Preferred Stock directly in their name may join Enterprise Direct by completing
the Enrollment/Authorization Form. See "Methods of Investment".
Non-Shareholders
Investors may join Enterprise Direct by returning a completed
Enrollment/Authorization Form to the Administrator. To enroll, investors must
make an Initial Investment of at least $250. The maximum Initial Investment is
$10,000. See "Methods of Investment". Non-shareholders will pay a one-time
enrollment fee. See "Service Fees." Common Stock purchased with the Initial
Investment by a non-shareholder will be purchased in the open market. See
"Purchases of Common Stock."
"Street Name" Holders/Transfer of Shares From a Broker
Beneficial owners whose shares are registered in the name of a bank, a
broker, a trustee or other agent may transfer these shares to an Enterprise
Direct account by instructing their agent to register these shares directly in
their name. Upon such registration, the shareholder may enroll in Enterprise
Direct by returning a completed Enrollment/Authorization Form to the
Administrator.
Methods of Investment
A Participant's total investment cannot exceed $125,000 per calendar year
or $10,000 per Voluntary Contribution and must be made in U.S. Dollars. For the
purpose of applying the annual limit, all investments during any calendar year
(including the Initial Investment and all Voluntary Contributions, but excluding
reinvested dividends and shares deposited with Enterprise Direct for safekeeping
only) are aggregated. No interest will be paid on amounts held by the
Administrator pending investment.
Direct Investment
Participants may make investments in Common Stock through Enterprise
Direct of at least $250 for an Initial Investment and at least $50 per
investment for any Voluntary Contributions (each, a Direct Investment) by
mailing a new Enrollment/Authorization Form together with a check as directed on
the form. The check must be in U.S. dollars and drawn on a U.S. bank. Do not
send cash. Money orders will not be accepted. Funds received by the
Administrator at least two business days prior to an Investment Date (as defined
in "Investment Dates", below) will be invested on such Investment Date. Funds
received less than two business days prior to an Investment Date will be
invested on the following Investment Date. Any individual or entity may make
Direct Investments on behalf of any Participant or eligible investor as a gift
or award.
A Direct Investment received by the Administrator and not yet used to
purchase Common Stock through the Plan will be returned to the Participant as
soon as practicable if a written request is received by the Administrator at
least five business days prior to the applicable Investment Date. However, no
refund of a check will be made until the check has cleared. Accordingly, such
refunds may be delayed up to three weeks. No interest will be paid on a Direct
Investment that is refunded to the Participant.
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Automatic Investments
Participants may make Voluntary Contributions through electronic
withdrawals of at least $50 from a predesignated account with a U.S. Financial
institution (Automatic Investments). To initiate Automatic Investments,
Participants must complete and return the Automatic Investment section of the
Enrollment/Authorization Form. Automatic Investments will be initiated as
promptly as practicable. Once initiated, funds will be drawn on the 25th day of
each month, or if such date is not a business day, the deduction will be made on
the preceding business day. Participants should allow 4 to 6 weeks for the first
Automatic Investment to be initiated or for changes in designated financial
institutions or accounts. See "Investment Dates."
Dividends
Participants may elect to acquire Common Stock through the Plan by
reinvesting all or a portion of dividends paid on Common Stock or Preferred
Stock registered in their names by completing an Enrollment/Authorization Form.
Participants electing partial reinvestment of dividends must designate the
specific number of shares and series of securities (i.e., Common Stock and/or
the one or more series of Preferred Stock) on which dividends will be paid in
cash or reinvested. Once a Participant elects reinvestment, dividends paid on
the specific securities so designated will be reinvested in shares of Common
Stock until a different Enrollment/Authorization Form is received. An
Enrollment/Authorization Form must be received by the Administrator no later
than the first business day of a month in which a dividend is to be paid to be
effective with respect to that dividend. The amount reinvested will be reduced
by any amount which is required to be withheld under applicable tax or other
statutes. See "Income Tax Information."
If a Participant does not elect to reinvest dividends, or elects partial
reinvestment, that portion of the dividends not being reinvested will be sent to
the Participant by check or, if the Participant has elected, by electronic
direct deposit. See "Direct Deposit of Dividends Not Reinvested". The amount of
any such dividends paid will be reduced by any amount which is required to be
withheld under applicable tax or other statutes. See "Income Tax Information."
Investment Dates
Enterprise Direct's "Investment Dates" are as follows:
(a) For Direct Investments, (i) the 15th day of each calendar month and
the last calendar day of the month, or, if such day is not a day on which the
financial markets in New York City are open for business, the immediately
preceding day on which they are open. No interest will be paid on amounts held
by the Administrator pending investment.
(b) For Automatic Investments, the last calendar day of each month, or, if
such day is not a day on which the financial markets in New York City are open
for business, the immediately preceding day on which they are open.
(c) For dividends paid on Common Stock or Preferred Stock which are
designated for investment through Enterprise Direct, on each respective dividend
payment date.
Purchases of Common Stock
Common Stock will be purchased by the Independent Agent in the open market
or directly from us, at our sole discretion. However, Common Stock purchased
with Initial Investment funds for non-shareholders will be acquired only in the
open market. Shares purchased from us may be either newly issued shares or
shares held in our treasury.
We may not change our determination regarding the source of the shares
(i.e., from us or in the open market) more than once in any 3-month period. At
any time that shares of Common Stock are purchased in the open market for
Participants, we will not exercise our right to change the source of purchases
of Common Stock absent a determination by our Board of Directors or the Finance
Committee of our Board of Directors that we have a need to increase equity
capital or there is another compelling reason for such change.
Open market purchases by the Independent Agent may be made on any stock
exchange in the United States where the Common Stock is traded, in the
over-the-counter market, from Participants who are selling through the Plan or
by negotiated transactions on such terms as the Independent Agent, in its sole
discretion, may reasonably determine at the time of purchase. Any shares
purchased by the Independent Agent from us will be made in accordance with
applicable requirements. None of us, the Administrator (unless the Administrator
is also the Independent Agent) nor any Participant shall have any authority or
power to direct the time or price at which shares of Common Stock may be
purchased. We will pay all brokerage
13
commissions, related service charges and any applicable taxes incurred by the
Independent Agent in connection with the purchase of shares of Common Stock in
the open market. For information concerning the potential income tax
consequences to the Participant of open market purchases see "Income Tax
Information."
For shares purchased in the open market, the Independent Agent may, at its
sole discretion, purchase such shares at any time beginning on the Investment
Date and ending on the business day before the next Investment Date. The number
of shares (including any fraction of a share) of Common Stock credited to the
account of a Participant for a particular Investment Date will be determined by
dividing the total amount of dividends, Direct Investments and/or Automatic
Investments to be invested for such Participant on such Investment Date by the
weighted average price per share of such purchases made for all Participants for
such Investment Date.
Purchases of shares of Common Stock from us, whether newly issued or
treasury shares, will be made on the relevant Investment Date at the average of
the high and low sales prices of the Common Stock reported on the New York Stock
Exchange Composite Tape as published for the Investment Date. No brokerage
commissions will be incurred on shares acquired directly from us.
Under Enterprise Direct, a Participant does not have the ability to order
the purchase of a specific number of shares, the purchase of shares at a
specified price or a particular date of purchase, as may be done with purchases
through a broker.
The Independent Agent may commingle each Participant's funds with those of
other Participants for the purpose of executing purchase and sale transactions.
Sales of Common Stock
A Participant may sell any or all full shares of Common Stock in the
Participant's account without terminating participation in Enterprise Direct by
delivering a request acceptable to the Administrator. See "Administration." Any
remaining full shares and fraction of a share will remain in the Participant's
account. Under Enterprise Direct, a Participant does not have the ability to
sell shares at a specific price or on a particular date, as may be done with
sales through a broker.
A request to have the check for the proceeds of the sale of Plan shares
issued in a name other than the account name of record will be honored only
after the requirements for the transfer of stock have been met. See
"Gift/Transfer of Shares."
HOW CAN I SELL MY SHARES?
You may instruct the Administrator to sell some or all shares held in your
Plan account by one of the following methods:
Sale Orders via IVR System
You may instruct the Administrator to sell some or all of your Plan shares
by placing a sale order via the Interactive Voice Response ("IVR") system. To
place a sale order, contact the Administrator, toll-free, at 1-800-242-0813.
Simply enter your social security number or taxpayer ID at the prompt and select
the menu option for sales and follow the instructions provided. For security
purposes, you will be asked to enter your account number.
Sale Orders via Internet
You may instruct the Administrator to sell some or all of your Plan shares
by placing a sale order via the Internet. To place a sale order, you will first
need to request a PIN by visiting the Administrator's website at
www.stockbny.com (see page 11 "Inquiries").
Sale Orders via Mail
You may instruct the Administrator to sell some or all of your Plan shares
by completing and signing the tear-off portion of your account statement and
mailing the instructions to the Administrator. If there is more than one name or
owner on the Plan account, all Participants must sign the tear-off portion of
the account statement.
14
HOW ARE SHARES SOLD?
As with purchases, the Administrator aggregates all requests to sell
shares and then sells the total shares on the open market. Sales are made
through an Independent Agent who will receive brokerage commissions. Normally,
the shares will be sold on the New York Stock Exchange, where our Common Stock
trades.
Sales are made at least once a week. Depending on the number of shares
being sold and current trading volume in the shares, sales may be executed in
multiple transactions and may be traded on more than one day. The fee in
connection with the sale of shares is $10.00 plus brokerage fees and
commissions. The selling price will not be known until the sale is complete. The
price per share sold will reflect the per share fee, and shall always be the
average weighted price for all shares sold for the Plan on the trade date or
dates less the per share transaction fee.
A check for the proceeds of the sale of shares, less applicable taxes and
transaction fees, will normally be mailed to you by first class mail within two
(2) business days after the final trade settlement date.
Sales will be made by the Independent Agent as soon as practicable after
receipt of such request by the Administrator. Subject to applicable regulations,
the Independent Agent shall have sole discretion as to all matters relating to
such sales, including determining the number of shares, if any, to be sold on
any day or at any time of that day, the prices received for such shares, the
markets on which such sales are made and the person (including other brokers and
dealers) from or through whom such sales are made. The proceeds from the sale,
less any fees charged by us and brokerage fees, related service charges and any
applicable taxes paid by the Independent Agent, will be remitted to the
Participant by the Administrator. A service fee will be charged for such sales.
See "Service Fees."
A request to sell shares of Common Stock in a Participant's account is
irrevocable when made. The price received by the independent agent for the
account of the Participant will necessarily be dependent on market conditions in
effect at the time of the sale. The market price of shares of Common Stock may
fluctuate up or down between the time the Participant requests such sale and the
time such shares are actually sold by the Independent Agent. No liability for
any such change in market price in connection with any such sale is or has been
assumed by us, the Administrator or the Independent Agent.
Changing Plan Options
Participants may change their Enterprise Direct options at any time by
delivering a new Enrollment/Authorization Form or other instructions to that
effect to the Administrator. Any such instructions must be received by the
Administrator no later than the first business day of a month in which a
dividend is to be paid to be effective for that dividend. In addition, for
changes involving Automatic Investments, an Enrollment/Authorization Form
indicating such change must be received by the Administrator no later than ten
business days prior to the Investment Date upon which the change is to become
effective.
Withdrawal from Enterprise Direct
Participants may withdraw from Enterprise Direct by giving written notice
to the Administrator. Upon withdrawal, the Administrator will maintain all
shares of Common Stock held in the Participant's account in book-entry form,
unless the Participant requests that the Administrator either (i) send a
certificate for the number of whole shares held in the Enterprise Direct account
and a check for the value of any fractional shares (based on 100% of the then
current market price of the Common Stock at the time such shares are sold, less
applicable fees, brokerage commissions, related service charges and any
applicable taxes); or (ii) sell all shares in the Enterprise Direct account as
described under "Sales of Common Stock." Thereafter, dividends will be paid in
cash unless the shareholder rejoins Enterprise Direct.
Certificates will be issued upon withdrawal in the name or names in which
the account is maintained, unless otherwise instructed. See "Gift/Transfer of
Shares." No certificates will be issued for a fractional share.
All notices of withdrawal will be processed by the Administrator and any
uninvested funds will be returned to the withdrawing Participant as soon as
practicable, without interest. If a notice of withdrawal is received on or after
an ex-dividend date but before the related dividend payment date, the withdrawal
will be processed as described above and a separate dividend check will be
mailed to the Participant as soon as practicable following the dividend payment
date.
15
Safekeeping
Both Participants and non-Participants may deposit some or all of their
Common Stock certificates with the Administrator for safekeeping. Shares
deposited will be credited to the individual's account as maintained by the
Administrator. By using Enterprise Direct's safekeeping service, shareholders no
longer bear the risk and cost associated with the loss, theft or destruction of
stock certificates. Shareholders using this service who are not Enterprise
Direct Participants will receive dividends in cash until they enroll in
Enterprise Direct. Shares held in safekeeping may be sold or transferred as
described in "Sales of Common Stock" and "Gift/Transfer of Shares."
To deposit certificates with Enterprise Direct's safekeeping service,
shareholders should send their certificates by registered and insured mail to
the Administrator with written instructions to deposit such shares. The
certificates should not be endorsed and the assignment section should not be
completed. All certificates deposited for safekeeping will be cancelled and a
book-entry account established for the shareholder.
Direct Deposit of Dividends Not Reinvested
Participants and non-Participants who elect not to reinvest all dividends
on shares of Common Stock and Preferred Stock may receive non-reinvested
dividends by electronic deposit to their accounts at predesignated U.S.
financial institutions on the applicable dividend payment date. To receive
direct deposit of funds, Participants and non-Participants must obtain from the
Administrator a direct deposit authorization form ("Direct Deposit Form") and
complete, sign and return it to the Administrator. Direct deposit of funds will
become effective as promptly as practicable after receipt of a completed Direct
Deposit Form. Changes in designated direct deposit accounts may be made by
delivering a new Direct Deposit Form to the Administrator.
Dividends on shares of Common Stock and Preferred Stock not designated for
reinvestment and not directly deposited will be paid by check on the applicable
dividend payment date.
Gift/Transfer of Shares
Shareholders may transfer the ownership of some or all of their Enterprise
Direct shares or shares of Common Stock held in safekeeping by contacting the
Administrator and complying with its requirements for the transfer of stock then
in effect. See "Inquiries". Shares may be transferred to new or existing
shareholders.
Service Fees
Enrollment Fee for Non-Shareholders...................................... $10.00
(Deducted from the Initial Investment)
Sales and Termination Fee Per Transaction................................ $10.00
(Plus brokerage commissions, related service charges and
any applicable taxes incurred by the Independent Agent
in connection with such sale)
Fee for Each Returned Check or Rejected Automatic Investment............. $35.00
In the event that a Participant's optional cash investment check or EFT
is returned unpaid for any reason, the Participant will be charged a
$35.00 return fee. Further, BNY will immediately remove from the
Participant's account shares that were purchased in anticipation of the
collection of such funds plus the return fee. These shares will be sold
to recover any uncollected funds and the return fee. If the net proceeds
of the sale of such shares are insufficient to recover in full the
uncollected amounts plus the return fee, BNY reserves the right to sell
such additional shares from any of the Participant's accounts maintained
by BNY as may be necessary to recover in full the uncollected balance
plus the return fee. The sale of such shares may, in some cases, yield
an amount greater than that required to recover in full the uncollected
balance plus the return fee. If this occurs, only amounts in excess of
$1.00 will be remitted to the Participant.
Fee for Account Research................................................. $25.00
(Per hour; one hour minimum)
16
We reserve the right at any time to change these fees or to charge
Participants (including those who do not reinvest dividends) other fees,
including but not limited to administrative, set-up and handling fees. Notices
of such future changes or additional fees will be sent to Participants at least
30 days prior to their effective date.
The Administrator will deduct the applicable fees and any other charges
from proceeds due from a sale, funds received for investment or the payment of
dividends. Any brokerage fees or commissions paid by us on behalf of a
Participant to purchase shares of Common Stock under Enterprise Direct will be
reported to the Internal Revenue Service ("IRS") as income to the Participant.
See "Income Tax Information." At present, we estimate that brokerage fees and
commissions will not exceed $0.10 per share. We do not control the amount or the
timing of changes to brokerage fees and commissions. Therefore, no notice of
increases in brokerage fees and commissions will be provided.
Reports To Participants
Participants will be provided quarterly statements listing all
transactions in the Participant's account for the calendar year through that
quarter at their last known address as shown on the Administrator's records. In
addition, Participants will be provided a monthly confirmation statement for
each month in which a Voluntary Contribution is made. Quarterly statements
provide cost basis information which is necessary for tax reporting after the
sale of Common Stock and should be retained by the Participant.
Stock Splits; Stock Dividends; Rights Offerings
Only dividends payable in cash may be reinvested under the Plan. In the
event dividends are paid in shares of Common Stock, or if shares of Common Stock
are distributed in connection with any stock split or similar transaction, each
Participant's account will be adjusted to reflect the receipt of shares of
Common Stock so paid or distributed. In the event of a rights offering, rights
will be issued and mailed directly to the Participant for the number of whole
shares only and rights based on a fraction of a share held in the Participant's
account will be sold and the net proceeds will be applied as a Direct Investment
to purchase shares of Common Stock under the Plan on the next Investment Date.
Rights of Participants
All Common Stock purchased and/or held in a Participant's account will be
held in a nominee name and administered by the Administrator, as custodian. Cash
held for a Participant's account pending investment will be held in a segregated
account and will not be commingled with our or the Administrator's funds
(although funds held for Participants will be commingled with funds held for
other Participants). Participants will be provided all reports distributed to
our shareholders, as well as proxy materials, including a proxy covering all
Common Stock held in the Participant's account, relating to any annual or
special meeting of our shareholders at the last address for the Participant
shown on the Administrator's records. Common Stock held in a Participant's
account will be voted as and to the extent specified by the Participant. If a
proxy with respect to the Common Stock held in a Participant's account is not
received by the Administrator prior to the fifth day before a shareholder
meeting, the Administrator will vote the shares held in the Participant's
account in accordance with the recommendations of our management.
Responsibility of the Administrator and Us; Indemnification
Neither we nor the Administrator can assure a profit or protect against a
loss on shares purchased under Enterprise Direct. The establishment and
maintenance of Enterprise Direct by us does not constitute an assurance with
respect to either the value of Common Stock or whether we will continue to pay
dividends on Common Stock or at what rate.
Neither we nor the Administrator will be liable for any losses or
liability howsoever incurred by Participants arising from, related to or in
connection with the administration of the Plan or the Administrator's actions or
non-actions with respect to the Plan (including by way of example and not by way
of limitation any losses or claim of liability arising from (i) the failure to
terminate a Participant's account, sell shares in the Plan or invest optional
cash investments or dividends without prior receipt of proper documentation and
instructions; (ii) the prices at which shares are purchased or sold for the
Participant's account, the timing of such purchases and sales, and the
fluctuation of prices of the shares (a) between the receipt of cash or dividends
for investment and such investment, (b) between the receipt of instructions to
sell and such sale and (c) after the purchase and sale of shares, and (iii) the
transfer of shares from Participant's account to a broker pursuant to the
Profile Program of The
17
Depositary Trust Company) except for such losses and liabilities caused by the
Administrator's negligence or willful misconduct. In no event shall the
Administrator be liable for special, consequential or punitive damages or losses
due to forces beyond its control (including by way of example and not by way of
limitation strikes, work stoppages, acts of war or terrorism, insurrection,
revolution, nuclear or natural catastrophes or acts of God, and interruptions,
loss or malfunctions of utilities, communications or computer (software and
hardware services)).
MODIFICATION OR TERMINATION OF ENTERPRISE DIRECT
We may modify or terminate Enterprise Direct at any time with or without
prior notice and, in such event, Participants will be so notified. The
Administrator also reserves the right to change any administrative procedures of
Enterprise Direct.
Interpretation of Enterprise Direct
We and the Administrator may, in our absolute discretion, interpret and
regulate Enterprise Direct as deemed necessary or desirable in connection with
the operation of Enterprise Direct and resolve questions or ambiguities
concerning the various provisions of Enterprise Direct.
Governing Law
Enterprise Direct shall be governed by and construed in accordance with
the laws of the State of New Jersey.
Termination of Participation
If a Participant does not have at least one whole share of Common Stock
credited to the Participant's account under Enterprise Direct, or does not own
any Common or Preferred Stock for which dividends are designated for
reinvestment pursuant to Enterprise Direct, the Participant's participation in
Enterprise Direct may be terminated by us upon written notice to the
Participant. Additionally, we may terminate any Participant's participation in
Enterprise Direct after sending written notice to such Participant at the
address appearing on the Administrator's records. A Participant whose
participation has been terminated will receive (i) a certificate for all of the
whole shares of Common Stock credited to the Participant's account in Enterprise
Direct, (ii) any dividends and cash investments credited to the Participant's
account and (iii) a check for the cash value of any fraction of a share of
Common Stock credited to the Participant's account. Such fraction of a share
shall be valued at the weighted average price per share of the aggregate number
of shares sold by the Independent Agent on the day such fraction of a share is
sold.
INCOME TAX INFORMATION
We believe that the following is an accurate summary (as of the date of
this Prospectus) of the U.S. federal income tax consequences generally
applicable to Participants in Enterprise Direct who are taxed on their dividend
income.
For U.S. federal income tax purposes, dividends invested in our Common
Stock under Enterprise Direct are taxable to the same extent and in the same
manner as the dividends received from us in cash. Therefore, taxable
Participants cannot avoid federal income taxes by participating in Enterprise
Direct. Further, brokerage commissions paid by us for open market purchase of
shares on a Participant's behalf are also treated as taxable dividends for this
purpose. Annual informational returns sent to the IRS and to Participants, where
required, will reflect all dividends declared on their Common Stock, whether or
not invested under Enterprise Direct, and any related brokerage commissions.
A Participant's income tax basis in shares acquired under Enterprise
Direct will equal the price at which the shares are credited to the
Participant's account by the Administrator and will be increased by any
brokerage commissions incurred by us in purchasing the shares on the open
market.
This discussion does not address the tax considerations arising under the
laws of any foreign, state or local jurisdictions, nor does it address all tax
considerations applicable to a Participant's particular circumstances. Further,
certain Participants, such as tax-exempt entities (e.g., pension plans and IRAs)
and foreign shareholders may be exempt from U.S. federal income tax on their
dividend income. Accordingly, Participants are urged to discuss participation in
Enterprise Direct with their tax advisors before enrolling.
18
In the case of Participants in Enterprise Direct whose dividends are
subject to U.S. back-up withholding, the Administrator will reinvest dividends
less the amount of tax required to be withheld.
In the case of foreign shareholders whose dividends are subject to U.S.
tax withholding, the Administrator will reinvest dividends less the amount of
tax required to be withheld. The filing of any documentation required obtaining
a reduction in the U.S. withholding tax will be the responsibility of the
foreign shareholder.
USE OF PROCEEDS
We will receive proceeds from the purchase of Common Stock pursuant to
Enterprise Direct only to the extent that any such purchases are made directly
from us and not in open market purchases by the Administrator. Proceeds received
by us from such purchases will be used for general corporate purposes.
PLAN OF DISTRIBUTION
Common Stock offered pursuant to Enterprise Direct will be purchased in
the open market or, at our option, directly from us. Participants will be
required to pay certain fees in connection with Enterprise Direct. See "Service
Fees" for a description of the fees charged by Enterprise Direct. All other
costs related to the administration of Enterprise Direct will be paid by us.
LEGAL MATTERS
The legality of the Common Stock covered hereby has been passed upon for
us by James T. Foran, Esq., our Associate General Counsel and General Corporate
Counsel of Services. Mr. Foran is an officer but not a Director, of us and
Services and owns shares of Common Stock.
EXPERTS
The consolidated financial statements and the related consolidated
financial statement schedule incorporated into this prospectus by reference from
our Annual Report on Form 10-K for the year ended December 31, 2006, and
management's report on the effectiveness of internal control over financial
reporting, incorporated into this prospectus by reference from our Annual Report
on Form 10-K for the year ended December 31, 2006, have been audited by Deloitte
& Touche LLP, an independent registered public accounting firm, as stated in
their reports (which reports (1) express an unqualified opinion on the
consolidated financial statements and consolidated financial statement schedule
and include an explanatory paragraph referring to our adoption of Statement of
Financial Accounting Standards No. 158, Employers' Accounting for Defined
Benefit Pension and other Postretirement Plans, on December 31, 2006, (2)
express an unqualified opinion on management's assessment regarding the
effectiveness of internal control over financial reporting, and (3) express an
unqualified opinion on the effectiveness of internal control over financial
reporting), which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
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No person has been authorized to give any information or to make any
representations other than those contained in this prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of enterprise since the date hereof
or that the information herein is correct as of any time subsequent to its date.
TABLE OF CONTENTS
PAGE
Where You Can Find More Information ....................................... 2
Public Service Enterprise Group Incorporated .............................. 3
General ................................................................... 3
Risk Factors .............................................................. 3
Forward-Looking Statements ................................................ 8
Description of the Common Stock ........................................... 10
The Enterprise Direct Plan ................................................ 11
Purpose ................................................................... 11
Administration ............................................................ 11
Inquiries ................................................................. 11
Eligibility ............................................................... 12
Enrollment Procedures ..................................................... 12
Shareholders ............................................................ 12
Non-shareholders ........................................................ 12
"Street Name" Holders/Transfer of Shares from a Broker .................. 12
Methods of Investment ..................................................... 12
Direct Investment ....................................................... 12
Automatic Investments ................................................... 13
Dividends ............................................................... 13
Investment Dates .......................................................... 13
Purchases of Common Stock ................................................. 13
Sales of Common Stock ..................................................... 14
Changing Plan Options ..................................................... 15
Withdrawal from Enterprise Direct ......................................... 15
Safekeeping ............................................................... 16
Direct Deposit of Dividends Not Reinvested ................................ 16
Gift/Transfer of Shares ................................................... 16
Service Fees .............................................................. 16
Reports to Participants ................................................... 17
Stock Splits; Stock Dividends; Rights Offerings ........................... 17
Rights of Participants .................................................... 17
Responsibility of the Administrator and Us; Indemnification ............... 17
Modification or Termination of Enterprise Direct .......................... 18
Interpretation of Enterprise Direct ..................................... 18
Governing Law ........................................................... 18
Termination of Participation ............................................ 18
Income Tax Information .................................................... 18
Use of Proceeds ........................................................... 19
Plan of Distribution ...................................................... 19
Legal Matters ............................................................. 19
Experts ................................................................... 19
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[LOGO] PSEG
Public Service
Enterprise Group
Incorporated
Enterprise Direct(SM)
(Dividend Reinvestment And
Stock Purchase Plan)
May 11, 2007
Prospectus
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