PEG

What You Should Know

Public Service Enterprise Group is a New Jersey-based diversified energy company that owns Public Service Electric and Gas Company (PSE&G), a regulated electric and natural-gas utility, and PSEG Power, which operates one of the largest nuclear fleets in the United States. The underlying business — generating, transmitting, and distributing electricity and natural gas — is unambiguously permissible. Nuclear generation is broadly accepted by Sharia advisory boards as a legitimate energy source. The Sharia concern is financial structure rather than business activity. Like most regulated utilities, PSEG finances its rate-base capital expenditure with substantial long-term bond debt, and debt-to-market-cap typically sits well above the 33% Sharia threshold. Some Sharia advisory boards screen all conventional utilities as non-compliant on financial grounds; others permit utilities with purification of the leverage-related portion of dividends. Muslim investors should check their preferred board's methodology before initiating a position.