- Long Island extension: LIPA’s board approved a five-year extension of PSEG Long Island’s grid management contract (Jan 1, 2026–Dec 31, 2030) [1]. (PSEG Long Island has run the Long Island grid since 2014.) The deal now goes to the NY State Comptroller and Attorney General for final sign-off [2].
- Quanta challenge fails: Power contractor Quanta Services sued to block the extension, but an NY court refused its temporary restraining order as “moot” [3]. (Quanta had argued the bidding process was flawed, but PSEG’s incumbency and reliability record prevailed.)
- Stock & forecasts: PSEG (NYSE: PEG) stock traded around $84.7 on Oct 16, 2025 [4]. Analysts give PEG a Moderate Buy consensus, with 6 Buys and 5 Holds [5]. The 12‑month average price target is about $90.95 [6] (≈7.4% above current levels), and fair-value estimates hover in the low $90s [7] [8]. PSEG’s solid dividend track (14th straight annual hike) and $24 billion capital plan were recently highlighted as factors supporting long-term growth [9].
- Earnings ahead: PSEG will report Q3 2025 results and hold an earnings call on Nov 3, 2025 (11:00 a.m. ET) [10]. Investors will watch guidance, regulatory updates and any impact of the Long Island contract on PSEG’s power and utility segments.
Long Island Contract Extension
On Sept. 25, 2025 the Long Island Power Authority (LIPA) board voted to extend the contract with PSEG Long Island by five years [11]. This keeps PSEG as the operator of the 1.2+ million–customer electric grid on Long Island and the Rockaways through 2030. PSEG’s CEO Ralph LaRossa praised the decision: “Since 2014, PSEG Long Island has become the No. 1 overhead electric service provider in the State of New York in reliability and customer satisfaction.” [12]. The agreement was touted as cost-saving (about $17 million less to ratepayers over five years) and performance-based (tying more than half of PSEG’s compensation to service metrics) [13].
However, the extension still requires approvals from New York’s comptroller and Attorney General [14]. News reports indicate AG Letitia James’ office has signaled approval, leaving only the comptroller’s sign-off pending. Once final, the deal “delivers a longer runway of predictable fee-based revenue” for PSEG [15] [16], locking in its role on Long Island for another half-decade.
At the same time, the process has drawn scrutiny. Quanta Services – a Houston-based utility contractor – sued to halt the award, arguing its own proposals were rejected despite being recommended by LIPA staff [17]. In late September, a state Supreme Court judge denied Quanta’s request for an injunction, effectively green-lighting PSEG’s win [18]. As one analysis notes, the five-year renewal “confirms PSEG’s operational reliability and customer service strengths” even though “the direct financial impact is not likely to materially affect” PSEG’s near-term growth drivers [19]. In other words, investors see the extension as a vote of confidence in PSEG Long Island’s performance, but the real upside will come from other growth avenues (like converting new data-center loads to firm contracts).
Stock Performance and Analyst Outlook
PSEG’s shares have traded in roughly a $75–$95 range over the past year [20]. On Oct. 16, 2025, PEG was around $84.73 per share (up +2.78% on the day) [21]. The stock has been rallying in recent weeks amid broader market strength and the LIPA news. Analysts remain optimistic: MarketBeat calculates a consensus Moderate Buy rating, with an average one-year target of $90.95 [22]. This implies about a 7–10% upside from current levels. Simply Wall St’s community fair-value estimates are similar (around $90.6–90.9) [23].
Institutional investors point to PSEG’s regulated earnings stability and growth outlook. PSEG itself guides to roughly 5–7% annual operating earnings growth through 2029 [24], driven mostly by its utility (PSE&G) business. The company also recently increased its five-year capital investment plan to about $24 billion (for 2025–2029) without selling equity [25], and it just announced its 14th straight annual dividend hike (current yield ≈3.1%) [26]. These moves underline PSEG’s focus on shareholder returns and utility infrastructure.
On the flip side, some caution that PSEG’s growth depends on regulatory approval of cost recoveries and converting pipeline demand into revenue [27]. Sahm Capital (citing Simply Wall St) notes that while the grid contract extension “confirms PSEG’s operational reliability,” it “does not materially affect the company’s most important short-term catalyst” – namely, winning new large-load customers and investments [28]. In practice, that means the stock may not soar on the LIPA news alone, but the extension removes uncertainty and could support a higher valuation if PSEG delivers on its other plans.
Looking Ahead: Q3 Results and Next Steps
Investors are now focused on PSEG’s upcoming third-quarter report, due Nov. 3, 2025 (earnings call 11:00 a.m. ET) [29]. Analysts will scrutinize PSEG’s guidance for the rest of 2025 and any commentary on capital projects (including the Long Island deal). Given PSEG’s regulated model, surprises are unlikely, but execution of its capital plan and regulatory outcomes will be key. In the meantime, the extension of the Long Island contract is being viewed as a positive development that adds visibility to future cash flows [30].
As one financial observer put it: PSEG’s “successful partnership” with LIPA provides stability, and management’s “Powering Progress” strategy aims to leverage that stability into cleaner, safer service [31]. With a solid track record (reliability up 35%, outage times down 21% since 2014 [32]) and commitment to sustainable growth, PSEG’s stock is positioned near the top of its range. If the broader market holds and PSEG hits its growth targets, analysts see room for the share price to move into the low $90s in the next year [33] [34].
Sources: PSEG press releases and investor news [35] [36]; engineering and financial media [37] [38]; stock research services [39] [40].
References
1. www.prnewswire.com, 2. www.prnewswire.com, 3. www.enr.com, 4. www.reuters.com, 5. www.marketbeat.com, 6. www.marketbeat.com, 7. simplywall.st, 8. www.marketbeat.com, 9. simplywall.st, 10. investor.pseg.com, 11. www.prnewswire.com, 12. www.prnewswire.com, 13. www.enr.com, 14. www.prnewswire.com, 15. simplywall.st, 16. www.sahmcapital.com, 17. www.enr.com, 18. www.enr.com, 19. www.sahmcapital.com, 20. www.reuters.com, 21. www.reuters.com, 22. www.marketbeat.com, 23. simplywall.st, 24. s24.q4cdn.com, 25. simplywall.st, 26. simplywall.st, 27. www.sahmcapital.com, 28. www.sahmcapital.com, 29. investor.pseg.com, 30. simplywall.st, 31. www.prnewswire.com, 32. nj.pseg.com, 33. www.marketbeat.com, 34. simplywall.st, 35. www.prnewswire.com, 36. investor.pseg.com, 37. www.enr.com, 38. www.sahmcapital.com, 39. www.marketbeat.com, 40. simplywall.st
