PS ENTERPRISE <PEG.N> EXPECTS EPS GROWTH OF 5 PCT/YR OVER NEXT 5 YEARS - CFO
 PS ENTERPRISE <PEG.N> SEES DROPS IN UTILITY CAPITAL SPENDING - CFO
 INTERVIEW - PS Enterprise <PEG.N>CFO sees EPS rise
By Jim Brumm
NEWARK, N.J., Feb 10 (Reuter) - Public Service Enterprise Group Inc expects earnings per share to increase at least five percent per year over the next five years, Chief Financial Officer Robert C. Murray told Reuters.
But the profit growth will not be translated into increased dividends in the immediate future, he said.
Capital spending by the company's major subsidiary, Public Service Electric & Gas Co, during the next five years "will be half of what was spent in the previous five years," he said in an interview.
Some of that decline will be offset by increased spending by the company's non-regulated activities, he said.
Murray said spending by the utility, excluding nuclear fuel, is expected to drop to $495 million this year, from $592 million in 1996. By 2001, these outlays will be "under $400 million."
But he expects spending by Enterprise's non-regulated generating unit to total $100 to $150 million over the five years, while another $50 to $100 million will be invested by the company's other non-regulated energy businesses. Last year, about $8 million was spent in these two areas.
Spending on nuclear fuel, which "technically is capital spending," dropped to $45 million from the normal range of $90 to $100 million, Murray said. He noted this reflected the closing of the 42.59 percent-owned Salem Generating Station for the entire year. PSE&G, the operator of the two 1,106 megawatt units, continues to expect Unit 2 to restart in the second quarter and Unit 1 this summer. 
Utility spokesman George Koodray declined to comment on whether PECO Energy Co's <PE.N> stated "belief that the earliest that Unit NO.1 will return to service is late in the third quarter" represents an extension of that timeframe.
The other Salem owners are Atlantic Energy Inc <A TE.N> and Delmarva Power and Light Co <DEW.N> with 7.41 percent each. 
 Murray said these plants will be "very competitive" on a cash basis, able to produce power at $0.015-$0.020 per kilowatt hour "on a marginal cost basis."	 That is "a lower marginal cost than anything out there."
The plants are a component of Enterprise's earnings growth targets, Murray said, adding the company is "looking for a minimum five percent annual growth (in earnings per share) over the next five years." Stressing "this is more than a goal," Murray said he's "convinced there's a robustness to (the company's) plans" that will achieve this growth, starting from last year's $2.64 per share, excluding extraordinary items.
The financial community, however, expects Enterprise earnings per share to grow one or two percent per year, he said. The consensus of the 18 analysts reporting to First Call is $2.69 per share for 1997.
In the short term, Murray said, "The bulk of the (earnings) growth will come from the utility," through further cost reductions. Beyond the turn of the century," Enterprise's non-regulated power generation and energy services operations will add to the growth, he said. 
The chief executive of the newest of those, Energis Resources Inc's Frank Cassiday said he is not expected to produce significant profits for two or three years.
In early February 1997, I spent a day with PSEG executives while the restructuring process was underway in New Jersey. The result was one article filed that day which I didn’t save and three articles that moved the next Monday afternoon after additional reporting. Those articles follow this note, along with another item about PSEG that appeared that afternoon. The first article was carried in full, with byline, on the front business page of the Newark, NJ, Star-Ledger. Below, that article appears with the two snaps -– free standing, alert headlines -- that preceded it.  

Jim Brumm

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Boosting this year's earnings per share growth will be the repurchase of 13 million shares during the last four months of 1996, Murray said. The "bulk of (the impact on average shares outstanding) will be this year," he said. Murray said he does not expect further stock buybacks until the company proceeds with securitization of its stranded assets. This portion of the Energy Master Plan proposed by New Jersey regulators needs legislative approval. Such sales would probably lead to "massive" repurchases of debt and equity, he said. Since the sales would shrink the company's assets, there would have to be a corresponding shrinkage in its capital, he explained. 
Murray also said there will be "no dividend increase in the immediate future." Although unchanged since 1991, Enterprise's current quarterly payment of $0.54 per share represents a payout ratio of more than 80 percent. This has to be reduced to between 60 and 70 percent, Murray said, adding the exact target will depend on Wall Street expectations, once restructuring has been completed. 
((-- New York Newsdesk 212-859-1610.))

 INTERVIEW - Energis seeks to be Northeast force
By Jim Brumm
EDISON, N.J., Feb 10 (Reuter) - Public Service Enterprise Group Inc <PEG.N> formed Energis Resources Inc to be one of the top three energy service providers in the U.S. northeast, the chief executive of the new unit told Reuters.
And Enterprise is willing to invest to make that happen, Frank Cassidy said, adding "no significant profits are expected for two or three years."
He said Energis is now generating revenues at an annual rate of about $100 million and expects to top $1 billion within five years. 
Cassidy was point man for Enterprise's Public Service Electric & Gas Co utility on the New Jersey Energy Master Plan negotiations with state regulators before being named to head Energis last fall. In November, he was named head of a unit still to be named that was consolidating functions previously performed by several Enterprise companies, including U.S. Energy Partners and Enterprise Strategic Energy Solutions.
By the time the new unit's name was announced January 30, Energis was providing natural gas to more than 3,600 business clients.
And, it will be filing shortly for a Federal Energy Regulatory Commission power marketing license, Cassidy said. "The real value we add is packaging services," he said.
It needs a license to be a power buyer to aggregate power to meet the needs of individual customers as the market opens up, he explained, adding Energis has no plans at this time to compete with PSE&G's power marketing activities.
Currently, Cassidy noted, sales under the pilot retail wheeling programs underway in the northeast are being made "below the cost of aggregating" that power. There will be "a couple of years of (such) cut-throat competition" before there is a shakeout in the energy service business, he said, noting the first to fall will be those who are under capitalized. 
((-- New York Newsdesk 212-859-1610 --))

16:14 10 Feb Power marketers providing PSE&G <PEG.N> coal
NEW YORK, Feb 10 (Reuter) - Public Service Electric & Gas Co is selling 600 megawatts of power from its Hudson generating
plant under two coal tolling agreements, spokesman Paul Lief Rosengren said Monday.
Under a tolling agreement, the coal is provided by the power marketer, which then pays a fixed fee - or toll - to generate
electricity from that coal for sale elsewhere.
An LG&E Energy Corp <LGE.N> spokesman said one of the contracts, for 300 megawatts of power, is with LG&E.
He noted the company is the third largest U.S. power marketer. It is the number one power marketer in the area served by the Pennsylvania-New Jersey-Maryland interconnection.
The power being produced by the Public Service Enterprise Group Inc utility subsidiary is being sold to LG&E customers in the
PJM market area, the spokesman said.
((- Jim Brumm 212-859-1710.))
Monday, 10 February 199716:14:57
ENDS [nN10173860J

	
16:47 11 Feb Vitol marketing PSE&G <PEG.N> power
	BOSTON, Feb 11 (Reuter) - Vitol Gas & Electric LLC said it is distributing 300 megawatts of power produced by Public Service
	Electric & Gas Co under a 15 month coal tolling agreement.
	Vitol G&E, which is 51 percent owned by <Vitol SA>, said it will supply 750,000 tons of coal under the agreement.
	We bring physical coal to the generating station, at economics, that make sense, and then sell the electricity into the
Pennsylvania-Jersey-Maryland Power Pool and the Northeast, said George McClellan, head of Vitol G&E's coal division.
	The power being delivered to Vitol is half that being produced by the Public Service Enterprise Group Inc utility subsidiary under
coal tolling arrangements. Another 300 megawatts is being produced for LG&E Energy Corp <LGE.N>.
((- Jim Brumm 212-859-1710.))
Tuesday, 11 February 199716:47:29 ENDS [nN1190953]
I

Enterprise <PEG.N> deregulation clouds going away
By Jim Brumm
NEWARK, N.J., Feb 10 (Reuter) - The clouds of utility deregulation are going away at Public Service Enterprise Group Inc, chief financial officer Robert C. Murray told Reuters.
Noting industry changes "are coming faster than many people thought possible," he said the transition "will cause us some pain, but we're not being gored" like many feared.
Although it is still too early to tell, the read on New Jersey's deregulation proposals is pretty good, he continued.
The director of state governmental affairs at the company's utility subsidiary, Frederick D. DeSanti, said "I am very pleased with the way the (various) coalitions are coming forward" in support of needed tax changes and securitization of stranded assets during talks on deregulation.
The business community was "very moderate" at last week's initial hearings on the New Jersey Master Energy Plan, he pointed out in an interview.
"We've been through (deregulation) on the (natural) gas side," Murray pointed out, noting the company is the largest natural gas
distribution utility east of the Mississippi.
He also said the pressure of a negative debt rating change appears to be off following talks with Standard & Poor’s and Moody's. Both agencies have the company on watch with negative implications.
Murray said Moody's has said it is not changing Enterprise's ratings, but the negative indicators will not be lifted until the Salem
Generating Station comes back on line.	
PSE&G, which has a 42.59 percent interest in Salem, has said it expects the plant to be back in operation this summer.
In December, S&P revised the outlook of PECO Energy Co <PE.N>, which has a similar Salem stake, to positive citing a Pennsylvania law allowing securitization of stranded costs.
Securitization has been proposed by New Jersey regulators, but the legislature has taken no action, DeSanti noted.
PSE&G's "real challenge" under deregulation, according to senior vice president Alfred C. Koeppe, is changing the company's culture "to offense from defense."
Stating the company's "strength is our people," he said the stability of the six year contracts PSE&G has reached with its unions means the utility has the potential of finding additional work for its field forces from others in need of quality help. 
((- New York newsdesk 212-859-1610-))

Monday, 10 February 199718:36:02 NOS [nN10176559]