Public Service Enterprise Group Inc
DUS:PSE
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Economic Moat
Public Service Enterprise Group has a narrow economic moat
Exclusive local delivery rights and the expense of duplicating PSE&G’s power lines and gas pipes keep rivals from competing directly for its delivery customers. Customers can choose another energy supplier, but PSE&G still delivers that energy and collects regulated delivery charges.
What protects Public Service Enterprise Group from competitors
Efficient Scale
PSE&G’s established networks serve defined areas of New Jersey, where a rival would have to build competing lines or pipes to reach the same customers. Splitting those customers between duplicate networks would make entry unattractive; even competing energy suppliers use PSE&G’s delivery system.
Intangible Assets
PSE&G’s utility franchise gives it exclusive rights to deliver energy to its regulated local customers, preventing rival suppliers from taking over that delivery relationship. Regulators set its delivery charges and allow it to recover approved costs and earn a return on approved investments.
What could weaken Public Service Enterprise Group's moat
2 risks to watch
One for each source of the moat: what could happen and how it would weaken it
