Google's $4.3 billion nuclear deal adds 97 MW at PSEG's Salem plant; its stock is still down 12% this year

Ninety-seven megawatts land in southern New Jersey

Google signed a 20-year power purchase agreement↗ with Constellation Energy▼−1.27% — Constellation Energy, down 1.27 percent today, the largest US nuclear operator, on October 6, 2026: more than $4.3 billion for turbines, steam generators and control systems at 11 reactors in Illinois, Pennsylvania and New Jersey, adding 890 MW of capacity that does not exist today, first delivery due 2028 ¹. One of the 11 is Salem, a 2,327 MW station in southern New Jersey slated for 97 MW of the work ².

Public Service Enterprise Group (PEG), New Jersey's dominant utility, operates Salem and owns 57 percent of it; Constellation holds 43 ³. Constellation's shares rose almost 14 percent the morning of the announcement ⁴. PEG closed October 14 at $70.56, down 12.13 percent for the year ⁵.

Why the money is not showing up in PSEG's stock

The $4.3 billion works out to just over $4,800 per kilowatt, by Canary Media's arithmetic, more than utility-scale solar with storage or a new gas plant ². PJM, the grid operator for the mid-Atlantic and Midwest, cleared its 2028/29 capacity auction 6,831 MW short of its reliability requirement↗ ³.

Yet the contract is Constellation's paper, and what the Salem work means for PSEG's·−0.33% — PSEG, down 0.33 percent as of its last quote accounts is not disclosed. The other half of the Google▲+0.47% — Google, up 0.47 percent today package, a 15-year supply deal for 2,700 MW of existing-fleet output, adds no new capacity at all ⁶. Generation is 12.7 percent of PSEG's net sales, against 40.1 percent from its distribution wires ⁵, and second-quarter net income fell 43 percent year over year ⁷.

Regulators are rewriting the rules, and returns are in dispute

State regulators redrawing how New Jersey utilities operate heard contentious pushback over the returns they should earn ⁸, and at a October 13 nuclear-energy seminar↗, speakers said any new nuclear project in the state faces funding and offtake obstacles ⁹.

Six target cuts in a month, and the Street still says outperform

Goldman Sachs▲+1.40% — Goldman Sachs, up 1.40 percent today trimmed its PSEG target to $83 from $86 on October 15↗, the sixth analyst cut since September 18; Scotiabank swung hardest, $92 to $77 ⁵. The consensus nonetheless holds at outperform: 22 analysts, average target $83.36, 18 percent above the closing price ⁵.

The Federal Energy Regulatory Commission on October 9 accepted PJM's 50 MW definition of a large load↗ and rejected most of the rest of the package ². Jefferies▲+2.25% — Jefferies, up 2.25 percent today told clients the outcome means higher capacity prices for longer, and named Constellation and the independent power producers NRG▲+1.99% — NRG, up 1.99 percent today, Talen▼−1.34% — Talen, down 1.34 percent today and Vistra▲+1.89% — Vistra, up 1.89 percent today as beneficiaries ². PSEG is not on that list.

November earnings, then the 2027 filings

PSEG reports third-quarter results on November 2 ⁵. Its own stretch-uprate applications for both Salem units sit on the Nuclear Regulatory Commission's calendar for the second quarter of 2027, with a license-renewal filing the same year ³. Salem is licensed to 2036 and 2040 ³, and the Google term runs 20 years from 2028 deliveries ¹. Google has signed for reactor years the licenses do not yet cover.