8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 4, 2007

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(Exact name of registrant as specified in its charter)

	New Jersey		001-09120		22-2625848
(State or other		(Commission File Number)		(I.R.S. Employer
jurisdiction of incorporation)				Identification No.)

80 Park Plaza, P.O. Box 1171
	Newark, New Jersey 07101-1171
(Address of principal executive offices) (Zip Code)
	973-430-7000
(Registrant’s telephone number, including area code)
http://www.pseg.com

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

          On May 4, 2007, Public Service Enterprise Group Incorporated (PSEG) announced unaudited financial results for the quarter ended March 31, 2007. A copy of the earnings release and related slideshow presentation dated May 4, 2007 are furnished as Exhibits 99 and 99.1 to this Form 8-K. The information contained in this report is being furnished pursuant to Item 2.02 as directed by the U.S. Securities and Exchange Commission.

Item 9.01 Financial Statements and Exhibits

Exhibit 99	Press Release dated May 4, 2007 announcing first quarter 2007 results
Exhibit 99.1	Slideshow Presentation

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.

	PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
	(Registrant)
By:	/s/ Derek M. DiRisio
	Derek M. DiRisio
	Vice President and Controller
	(Principal Accounting Officer)

Date: May 4, 2007

3

EX-99

Exhibit 99

Investor News NYSE:PEG          

For further information, contact:

Ø	Kathleen A. Lally, Vice President – Investor Relations	Phone: 973-430-6565
Ø	Greg McLaughlin, Sr. Investor Relations Analyst	Phone: 973-430-6568
Ø	Yaeni Kim, Sr. Investor Relations Analyst	Phone: 973-430-6596

May 4, 2007

PSEG ANNOUNCES FIRST QUARTER 2007 RESULTS:
$1.32 PER SHARE FROM CONTINUING OPERATIONS

Results At High End of Expectations,
Reflecting Strong Performance by PSEG Power and PSE&G

Company Reaffirms 2007 Guidance of $4.90-$5.30 Per Share

Public Service Enterprise Group (PSEG) reported today (May 4, 2007) income from continuing operations for the first quarter of 2007 of $335 million or $1.32 per share as compared to $208 million or $0.83 per share for the comparable period in 2006. Excluding merger-related costs of $5 million or $0.02 per share, PSEG reported operating earnings of $213 million or $0.85 per share for the 2006 first quarter. Losses on discontinued operations of $6 million or $0.02 per share reduced net income for the first quarter of 2007 to $329 million or $1.30 per share and lowered net income for the first quarter of 2006 by $5 million or $0.02 per share to $203 million or $0.81 per share.

“Our two largest businesses are performing very well,” said Ralph Izzo, chairman, president and chief executive officer of PSEG. “Earnings at PSEG Power during the quarter are the result of continued strong nuclear operations, an improvement in realized prices and the BGSS supply contract returning to more normal margins versus last year’s disappointing results. Public Service Electric and Gas Company’s (PSE&G) earnings benefited from more normal weather conditions and the impact of the gas and electric rate settlement effective in the fourth quarter of 2006.” He went on to mention that “the PSEG group of companies continue to focus on maintaining safe and reliable operations as the foundation for success”.

Operating earnings exclude the impact of the sale of certain non-core domestic and international assets and costs stemming from the termination in September, 2006 of the merger agreement with Exelon Corporation. The table below provides a reconciliation of PSEG’s net income to operating earnings (a non-GAAP measure) for the first quarter.

PSEG CONSOLIDATED EARNINGS
First Quarter Comparative Results
2007 and 2006 Income

	($M)				Diluted Earnings Per Share
	2007		2006		2007		2006
Net Income	$	329	$	203	$	1.30	$	0.81
Add: Loss from Discontinued Operations		6		5		0.02		0.02
Income From Continuing Operations		335		208		1.32		0.83
Add: Merger Costs		—		5		—		0.02
Operating Earnings (Non-GAAP)	$	335	$	213	$	1.32	$	0.85
		Avg. Shares				253M		252M

PSEG believes that the non-GAAP financial measure of “Operating Earnings” provides a consistent and comparable measure of performance of its businesses to help shareholders understand financial trends.

Izzo noted several key highlights during the first quarter:

• PSEG Power’s Salem 1 nuclear unit entered a refueling outage at the end of March after a record 383 consecutive days of operation. The performance is a testament to the effectiveness of the outage-related work being performed at Power’s three units – Salem 1 and 2 and Hope Creek.

• PSEG has largely completed the effort to put in place a highly qualified and capable new management team, including the hiring of the Exelon senior leadership team at its nuclear facilities as well as the recent hiring of Richard P. Lopriore as president of PSEG Fossil.

• Initiated construction on the back-end technology at the Mercer Station as part of a commitment to environmental stewardship.

• PSEG Energy Holdings announced that it was exploring the sale of Electroandes, a hydro-electric generation and transmission company in Peru.

Ralph Izzo indicated that the strong results for the first quarter place the company on “the right path” for achieving its recently increased 2007 operating earnings guidance of $4.90-$5.30 per share. The mid-point of the guidance represents a 37% increase over 2006’s operating earnings of $3.71 per share. Higher prices for contracted power and the successful completion of the Pennsylvania-New Jersey-Maryland (PJM) regional transmission organization’s first capacity auction provide support for projected growth in 2008 of 15% to $5.60-$6.10 per share.

Forecasted operating earnings ranges by subsidiary for 2007 are as follows:

2007 Operating Earnings ($millions)

PSEG Power	$	825		-	$	905
PSE&G		340		-		360
PSEG Energy Holdings		130		-		145
PSEG Parent		(50	)	-		(40	)
Operating Earnings	$	1,245		-	$	1,370
Earnings Per Share	$	4.90		-	$	5.30

Also during the first quarter, PSEG Power paid a dividend to PSEG of $125 million. PSEG Energy Holdings continued its practice of returning capital to PSEG with a distribution of $145 million.

Izzo said that PSEG, as much as it remains focused on maintaining its strong operational and financial performance, is also committed to addressing the environmental challenges that face the industry. PSE&G, as part of a program to meet the State of New Jersey’s Energy Master Plan goals for energy efficiency and renewable resources, unveiled a regulatory initiative designed to spur development of solar power. This is the first of a number of initiatives it intends to announce this year to combat climate change.

Operating Earnings Review and Outlook by Operating Subsidiary

See Attachment six for detail regarding the quarter over quarter earnings reconciliations for each of PSEG’s businesses.

PSEG Power

PSEG Power reported operating earnings of $219 million ($0.87 per share) for the first quarter of 2007. On a comparative basis, PSEG Power reported operating earnings of $121 million ($0.48 per share) for the first quarter of 2006.

PSEG Power’s first-quarter margins reflect the benefits of many factors – strong markets (particularly PJM), favorable operations, and more normal margins associated with supplying the BGSS contract. Higher contracted power prices added $0.28 per share to earnings. The continued strong performance of PSEG Power’s nuclear fleet allowed it to realize the full benefit of higher prices. The nuclear fleet operated at a 97% capacity factor during the quarter compared with a slightly stronger operating record in the first quarter of 2006.

PSEG Power continues, however, to forecast the nuclear fleet will operate at a capacity factor for the full year lower than that recorded in the first quarter due to plans for three refueling outages. More favorable prices in the natural gas market also aided margins realized on the BGSS contract, which contributed $0.11 per share to earnings. Reported results for the quarter also benefited from recognition of mark to market gains of $0.04 per share.

These factors more than offset a decline in availability of the fossil fleet as a result of the environmental consent decree for the Hudson and Mercer coal stations signed at the end of the year 2006 as well as small increases in operating and financing expenses.

PSEG Power’s operating earnings for 2007 are expected to continue to reflect higher electric power prices with the expiration of below market contracts in New Jersey and Connecticut, the successful auction of capacity in PJM, and improved margins associated with servicing the BGSS contract.

PSE&G

PSE&G reported operating earnings in the first quarter of 2007 of $131 million ($0.52 per share) versus $78 million ($0.31 per share) for the first quarter of 2006.

PSE&G’s quarterly operating earnings benefited from a number of factors. The November 2006 settlement of PSE&G’s gas and electric rate issues added $0.09 per share to earnings and restored reasonable equity returns at the utility. The effect of the rate agreements can be seen in higher electric and gas revenues and lower depreciation expense. Improved weather conditions for the quarter added $0.06 per share to earnings compared to warmer than normal weather experienced in the first quarter of 2006. PSE&G is also experiencing higher demand for electricity compared to the first quarter last year. This increase in volume represented a $0.03 per share improvement in earnings.

PSE&G’s 2007 operating earnings should continue to benefit from a full year of rate relief. Normal weather during the remainder of the year could also provide an additional $0.10-$0.15 per share of uplift to earnings as the company’s operating results during the fourth quarter of 2006 were negatively impacted by warmer than normal weather. Results for the remainder of the year will be affected by forecast increases in operating and maintenance expenses.

PSEG Energy Holdings

PSEG Energy Holdings reported operating earnings in the first quarter of 2007 of $3 million ($0.01 per share) versus $28 million ($0.12 per share) recorded in the first quarter of 2006.

The decline in PSEG Energy Holdings’ operating earnings was due to lower results at both of its subsidiary companies, PSEG Global and PSEG Resources, and was also driven by an increase in projected spark spread relative to a fixed-price contract. The results at

Global were affected by the recognition of mark to market losses associated with a contract at our Texas generation facilities, which accounted for $0.06 per share of the year over year reduction in earnings. The projections in future spark spreads are expected to benefit Global’s Texas operations in the coming years. In addition, major maintenance at the two 1,000 MW gas-fired, combined-cycle generating units in Texas completed during the quarter resulted in $0.04 per share of expense in the quarter. This activity prepares the units for operation during the typically heavy summer demand period.

Global’s first quarter earnings comparisons were also affected by a loss of production at its 85% owned generation facility in Italy ($0.02 per share) and the sale of RGE in 2006 ($0.03 per share). These items were partially offset by improved operations at SAESA ($0.02 per share), a one time gain associated with the sale of the Tracy biomass facility ($0.02 per share), and a contractual settlement associated with Konya-Ilgin ($0.02 per share).

The operations at the balance of Global’s domestic generation and international distribution properties continue to perform well and provide the opportunity for excellent growth.

The earnings contribution from Resources reflects the implementation of a new accounting policy effective January 1, 2007. This change in accounting reduced lease income by $0.02 per share in the quarter. The full-year earnings contribution from PSEG Energy Holdings will continue to be affected by the implementation of the new accounting policy.

PSEG Energy Holdings also announced during the quarter that it was exploring the potential sale of Electroandes, a hydro-electric generation and transmission company in Peru. PSEG Energy Holdings has hired JP Morgan to evaluate unsolicited interest in the property. If sold, it would reduce PSEG Energy Holdings’ exposure to the more risky International generation business.

PSEG

The parent company recorded a net expense of $18 million ($0.08) for the quarter compared with net expense of $14 million ($0.06) recognized during the first quarter of the prior year. The difference is associated with a charitable contribution made to the PSEG Foundation. Losses at the parent company level are expected to decline during the remainder of the year due to a planned reduction in debt levels and interest expense.

FORWARD-LOOKING STATEMENT

Readers are cautioned that statements contained in this press release about our and our subsidiaries’ future performance, including future revenues, earnings, strategies, prospects and all other statements that are not purely historical, are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance they will be achieved. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the effects of weather; the performance of generating units and transmission systems; the availability and prices for oil, gas, coal, nuclear fuel, capacity and electricity; changes in the markets for electricity and other energy-related commodities; changes in the number of participants and the risk profile of such participants in the energy marketing and trading business; the effectiveness of our risk management and internal controls systems; the effects of regulatory

decisions and changes in law; changes in competition in the markets we serve; the ability to recover regulatory assets and other potential stranded costs; the outcomes of litigation and regulatory proceedings or inquiries; the timing and success of efforts to develop domestic and international power projects; conditions of the capital markets and equity markets; advances in technology; changes in accounting standards; changes in interest rates and in financial and foreign currency markets generally; the economic and political climate and growth in the areas in which we conduct our activities; and changes in corporate strategies. For further information, please refer to our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. These documents address in further detail our business, industry issues and other factors that could cause actual results to differ materially from those indicated in this release. In addition, any forward-looking statements included herein represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if our estimates change, unless otherwise required by applicable securities laws

Attachment 1

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Reconciliation of Operating Earnings to Reported Earnings by Subsidiary
For the Three Months Ended March 31,
(Unaudited)

	2007 EPS									2006 EPS
	Reported Earnings			Continuing Operations			Operating Earnings			Reported Earnings			Continuing Operations			Operating Earnings
PSE&G:
Operations	$	0.52		$	0.52		$	0.52		$	0.31		$	0.31		$	0.31
Total PSE&G:		0.52			0.52			0.52			0.31			0.31			0.31
PSEG Power:
Operations		0.87			0.87			0.87			0.48			0.48			0.48
Discontinued Operations		(0.02	)		—			—			(0.04	)		—			—
Total PSEG Power:		0.85			0.87			0.87			0.44			0.48			0.48
PSEG Energy Holdings:
PSEG Global		(0.05	)		(0.05	)		(0.05	)		0.04			0.04			0.04
PSEG Resources		0.06			0.06			0.06			0.08			0.08			0.08
Discontinued Operations		—			—			—			0.02			—			—
Total PSEG Energy Holdings		0.01			0.01			0.01			0.14			0.12			0.12
Enterprise:
Interest & Other Expenses		(0.08	)		(0.08	)		(0.08	)		(0.06	)		(0.06	)		(0.06	)
Merger and Merger Related Costs		—			—			—			(0.02	)		(0.02	)		—
Total Enterprise		(0.08	)		(0.08	)		(0.08	)		(0.08	)		(0.08	)		(0.06	)
PSEG Earnings Per Share	$	1.30		$	1.32		$	1.32		$	0.81		$	0.83		$	0.85

Attachment 2

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Operating Earnings and Per Share Reults by Subsidiary
(Unaudited)

	For the Quarter Ended March 31,
	2007			2006
Earnings Results (in Millions)
PSE&G	$	131		$	78
PSEG Power		219			121
PSEG Energy Holdings
PSEG Global		(13	)		9
PSEG Resources		17			20
PSEG Energy Holdings		(1	)		(1	)
Total PSEG Energy Holdings		3			28
PSEG		(18	)		(14	)
Operating Earnings	$	335		$	213
Merger and Merger Related Costs		—			(5	)
Income from Continuing Operations	$	335		$	208
Loss from Discontinued Operations		(6	)		(5	)
PSEG Net Income (Loss)	$	329		$	203
Shares Outstanding (millions)		253			252
Per Share Results (Basic and Diluted)
PSE&G	$	0.52		$	0.31
PSEG Power		0.87			0.48
PSEG Energy Holdings
PSEG Global		(0.05	)		0.04
PSEG Resources		0.06			0.08
PSEG Energy Holdings		—			—
Total PSEG Energy Holdings		0.01			0.12
PSEG		(0.08	)		(0.06	)
Operating Earnings	$	1.32		$	0.85
Merger and Merger Related Costs		—			(0.02	)
Income from Continuing Operations	$	1.32		$	0.83
Loss from Discontinued Operations		(0.02	)		(0.02	)
PSEG Net Income (Loss)	$	1.30		$	0.81

Note 1:

Net Income includes preferred stock dividends / preference units distributions relating to PSE&G of $1 million for each of the quarters ended March 31, 2007 and 2006, respectively.

Attachment 3

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Consolidating Statement of Operations
(Unaudited, $ Millions)

	For the Quarter Ended March 31, 2007
	PSEG			OTHER			PSE&G			PSEG POWER			PSEG ENERGY HOLDINGS
				(Note 2)
OPERATING REVENUES	$	3,614		$	(1,275	)	$	2,486		$	2,149		$	254
OPERATING EXPENSES
Energy Costs		2,041			(1,273	)		1,665			1,488			161
Operation and Maintenance		610			(6	)		325			238			53
Depreciation and Amortization		196			3			145			34			14
Taxes Other Than Income Taxes		43			—			43			—			—
Total Operating Expenses		2,890			(1,276	)		2,178			1,760			228
Income from Equity Method Investments		26			—			—			—			26
OPERATING INCOME		750			1			308			389			52
Other Income and Deductions		35			(5	)		4			22			14
Interest Expense		(187	)		(26	)		(81	)		(37	)		(43	)
Preferred Securities Dividends		(1	)		—			(1	)		—			—
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1)		597			(30	)		230			374			23
Income Tax (Expense) Benefit		(262	)		12			(99	)		(155	)		(20	)
INCOME (LOSS) FROM CONTINUING OPERATIONS		335			(18	)		131			219			3
Loss from Discontinued Operations, net of tax		(6	)		—			—			(6	)		—
NET INCOME (LOSS)	$	329		$	(18	)	$	131		$	213		$	3
Loss from Discontinued Operations, including Loss on Disposal, net of tax		6			—			—			6			—
OPERATING EARNINGS	$	335		$	(18	)	$	131		$	219		$	3

	For the Quarter Ended March 31, 2006
	PSEG			OTHER			PSE&G			PSEG POWER			PSEG ENERGY HOLDINGS
				(Note 2)
OPERATING REVENUES	$	3,461		$	(1,111	)	$	2,293		$	1,967		$	312
OPERATING EXPENSES
Energy Costs		2,146			(1,109	)		1,574			1,487			194
Operation and Maintenance		578			(4	)		301			232			49
Depreciation and Amortization		201			6			152			31			12
Taxes Other Than Income Taxes		41			—			41			—			—
Total Operating Expenses		2,966			(1,107	)		2,068			1,750			255
Income from Equity Method Investments		33			—			—			—			33
OPERATING INCOME		528			(4	)		225			217			90
Other Income and Deductions		23			(2	)		3			22			—
Interest Expense		(193	)		(26	)		(85	)		(32	)		(50	)
Preferred Securities Dividends		(1	)		—			(1	)		—			—
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1)		357			(32	)		142			207			40
Income Tax (Expense) Benefit		(149	)		14			(65	)		(86	)		(12	)
INCOME (LOSS) FROM CONTINUING OPERATIONS		208			(18	)		77			121			28
Income (Loss) from Discontinued Operations, net of tax		(5	)		—			—			(9	)		4
NET INCOME (LOSS)	$	203		$	(18	)	$	77		$	112		$	32
Discontinued Operations, incl. Loss on Disposal, net of tax		5			—			—			9			(4	)
Merger and Merger-Related Costs, net of tax		5			4			1			—			—
OPERATING EARNINGS	$	213		$	(14	)	$	78		$	121		$	28

Note 1:

Income before Income Taxes includes preferred stock dividends relating to PSE&G of $1 million for each of the quarters ended March 31, 2007 and 2006.

Note 2:

Primarily includes financing activities at the parent and intercompany eliminations.

Attachment 4

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Capitalization Schedule
(Unaudited, $ Millions)

	March 31, 2007			December 31, 2006
DEBT
Commercial Paper and Loans	$	277		$	381
Long-Term Debt, including amounts due within one year		7,687			7,799
Securitization Debt, including amounts due within one year		1,841			1,879
Project Level, Non-Recourse Debt, including amounts due within one year		865			881
Debt Supporting Trust Preferred Securities, including amounts due within one year		660			660
Total Debt		11,330			11,600
SUBSIDIARY’S PREFERRED SECURITIES		80			80
COMMON STOCKHOLDERS’ EQUITY
Common Stock		4,683			4,661
Treasury Stock		(499	)		(516	)
Retained Earnings		2,717			2,710
Accumulated Other Comprehensive Loss		(272	)		(108	)
Total Common Stockholders’ Equity		6,629			6,747
Total Capitalization	$	18,039		$	18,427

Note 1:

PSEG’s credit agreements contain covenants that require PSEG’s debt to capitalization ratio not to exceed 70.0% at any time.

This ratio is presented for the benefit of the investors and the related securities to which the covenants apply and is not intended as a financial performance or liquidity measure.

2007

The debt to capitalization ratio calculated under PSEG’s credit agreements as of March 31, 2007 was 50.7%.

The ratio as calculated pursuant to these covenants excludes non-recourse project debt ($865 million), securitization debt ($1.841 billion) and Debt Supporting Trust Preferred Securities ($660 million). It also includes capital lease obligations ($50 million) and certain other obligations such as guarantees and letters of credit ($75 million), excluding any letters of credit related to collateral posting on energy/commodity contracts. The calculation excludes the equity reduction ($238 million) from the funded status of the pension and benefit plans associated with FAS 158 “Employers’ Accounting for Defined Pension and Other Post-Retirement Plans” which was recorded in 2006 and excludes the Accumulated Other Comprehensive Loss ($267 million) related to the mark to market of energy contracts.

2006

The debt to capitalization ratio calculated under PSEG’s credit agreements as of December 31, 2006 was 51.6%.

The ratio as calculated pursuant to these covenants excludes non-recourse project debt ($881 million), securitization debt ($1.879 billion) and Debt Supporting Trust Preferred Securities ($660 million). It also includes capital lease obligations ($50 million) and certain other obligations such as guarantees and letters of credit ($106 million), excluding any letters of credit related to collateral posting on energy/commodity contracts. The calculation excludes the equity reduction ($226 million) from the funded status of the pension and benefit plans associated with FAS 158 “Employers’ Accounting for Defined Pension and Other Post-Retirement Plans” which was recorded in 2006 and excludes the Accumulated Other Comprehensive Loss ($108 million) related to the mark to market of energy contracts.

Attachment 5

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, $ Millions)

	For the Three Months Ended
	March 31, 2007			March 31, 2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	329		$	203
Adjustments to Reconcile Net Income to Net Cash Flows
From Operating Activities		627			707
Net Cash Provided By Operating Activities		956			910
NET CASH USED IN INVESTING ACTIVITIES		(233	)		(233	)
NET CASH USED IN FINANCING ACTIVITIES		(381	)		(746	)
Effect of Exchange Rate Change		—			(1	)
Net Increase (Decrease) in Cash and Cash Equivalents		342			(70	)
Cash and Cash Equivalents at Beginning of Period		141			288
Cash and Cash Equivalents at End of Period	$	483		$	218

Attachment 6

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Quarter-to-Quarter EPS Reconciliation
March 31, 2007 vs. March 31, 2006
(Unaudited)

PSEG 1st Quarter 2006 Net Income					$	0.81
Loss from Discontinued Operations						0.02
PSEG 1st Quarter 2006 Income from Continuing Operations					$	0.83
Merger and Merger Related Costs						0.02
PSEG 1st Quarter 2006 Operating Earnings					$	0.85
PSE&G						B/(W	)
1st Quarter 2006		$	0.31
Rate Relief - Gas $0.06, Electric $0.03			0.09
Weather - Gas $0.05, Electric $0.01			0.06
Volume/Demand			0.03
Transmission			0.01
O&M & Other			0.02
1st Quarter 2007		$	0.52		$	0.21
PSEG Power
1st Quarter 2006		$	0.48
Recontracting and Strong Operations	0.28
BGSS & Other	0.11
Mark to Market	0.04
Margin			0.43
O&M			(0.02	)
Depreciation, Interest, and Other			(0.02	)
1st Quarter 2007		$	0.87		$	0.39
PSEG Energy Holdings
1st Quarter 2006		$	0.12
Texas Generation Facilities - - MTM ($0.06), Planned Major Maintenance ($0.04)			(0.10	)
RGE (Brazil) - Absence of earnings due to 2006 sale			(0.03	)
Bioenergie (Italy) - Loss of production at generation facility			(0.02	)
Saesa (Chile) operations			0.02
Konya-Ilgin (Turkey) litigation settlement			0.02
Gain on sale of investment in Tracy (California) project			0.02
Lower leveraged lease income			(0.02	)
1st Quarter 2007		$	0.01		$	(0.11	)
Public Service Enterprise Group
1st Quarter 2006		$	(0.06	)
Interest and Donations			(0.02	)
1st Quarter 2007		$	(0.08	)	$	(0.02	)
PSEG 1st Quarter 2007 Income from Continuing Operations					$	1.32
(Loss) from Discontinued Operations						(0.02	)
PSEG 1st Quarter 2007 Net Income					$	1.30

Attachment 7

PSEG Global L.L.C.
Investment Results
(Unaudited, $ Millions)

	Total Capital Invested (A) As of March 31,
	2007				2006
Region
United States	$	428	23	%	$	436	18	%
Chile & Peru		1,275	69	%		1,208	51	%
Other - Europe, Venezuela, & India		150	8	%		743	31	%
Total	$	1,853	100	%	$	2,387	100	%

	Contribution by RegionFor the Three Months Ended
	March 31, 2007					March 31, 2006
Region
United States	$	6		18	%	$	16	37	%
Chile & Peru		30		93	%		24	56	%
Other - Europe, Venezuela, & India		(4	)	-11	%		3	7	%
Total	$	32		100	%	$	43	100	%

Reconciliation of Regional Contribution to Continuing Operations

	For the Three Months Ended
	March 31, 2007			March 31, 2006
Total Global Regional Contributions	$	32		$	43
MTM Loss on Texas Generation Facilities Contracts		(29	)		(6	)
Administrative and general expenses		(5	)		(9	)
Interest Expense		(22	)		(26	)
Other Income		12			2
Earnings/Gain on Assets sold		7			7
Income Tax Expense		(8	)		(2	)
Continuing Operations	$	(13	)	$	9

(A) Total Capital Invested includes Global’s gross investments less non-recourse debt at the project level.

Attachment 8

PUBLIC SERVICE ELECTRIC & GAS
Sales and Revenues to Customers
(Unaudited)
March-07

Electric Sales and Revenues

	Three Months Ended		Change vs. 2006		Twelve Months Ended		Change vs. 2006
Sales (millions kwh)
Residential		3,244	5.6	%		13,565	-2.7	%
Commercial		5,897	2.6	%		24,158	0.1	%
Industrial		1,297	-9.2	%		5,759	-8.1	%
Street Lighting		102	3.6	%		373	3.3	%
Interdepartmental		4	7.7	%		14	5.7	%
Total		10,544	1.8	%		43,869	-1.9	%
Revenue (in millions)
Residential	$	417	19.0	%	$	1,780	8.3	%
Commercial		517	19.2	%		2,359	13.3	%
Industrial		70	9.5	%		323	-1.3	%
Street Lighting		19	14.8	%		70	11.1	%
Other		75	-8.5	%		304	-22.0	%
Total	$	1,098	16.0	%	$	4,836	7.3	%

Gas Sold and Transported

	Three Months Ended		Change vs. 2006		Twelve Months Ended		Change vs. 2006
Sales (millions therms)
Residential Sales		690	13.3	%		1,334	-0.8	%
Commercial - Firm Sales		254	1.7	%		505	-3.7	%
Commercial - Interr. & Cogen		13	-25.6	%		51	-63.9	%
Industrial - Firm Sales		21	6.4	%		39	-5.8	%
Industrial - Interr. & Cogen		16	-27.6	%		121	-38.8	%
Other Operating Revenues		1	96.0	%		1	15.0	%
Total		995	8.3	%		2,051	-8.8	%
Gas Transported		360	7.8	%		1,220	0.3	%
Revenue (in millions)
Residential Sales	$	633	3.9	%	$	1,255	2.4	%
Commercial - Firm Sales		226	-17.8	%		442	-30.3	%
Commercial - Interr. & Cogen		12	-40.4	%		42	-39.8	%
Industrial - Firm Sales		18	-14.3	%		34	-30.2	%
Industrial - Interr. & Cogen		16	-29.7	%		160	-18.5	%
Other Operating Revenues		34	4.2	%		135	0.8	%
Total	$	939	-4.2	%	$	2,068	-10.4	%
Gas Transported		449	22.4	%		801	-0.7	%

	Three Months Ended		Change vs. 2006		Twelve Months Ended		Change vs. 2006
Weather Data
Degree Days - Actual		2,613	13.9	%		4,449	-1.5	%
Degree Days - Normal		2,564				4,817
THI Hours - Actual		48	765.8	%		15,624	-18.2	%
THI Hours - Normal		38				14,826

Attachment 9

PSEG Power
Generation Measures
(Unaudited)

	% Generation by Fuel Type				GWhr Breakdown
	Quarter Ended March 31,				Quarter Ended March 31,
	2007		2006		2007			2006
Nuclear - NJ	39	%	40	%		5,011			5,158
Nuclear - PA	19	%	19	%		2,445			2,449
Total Nuclear	58	%	59	%		7,456			7,607
Fossil - Coal - NJ	8	%	12	%		1,099			1,588
Fossil - Coal - PA	10	%	11	%		1,295			1,404
Fossil - Coal - CT	6	%	6	%		783			778
Total Coal	24	%	29	%		3,177			3,770
Fossil - Oil & Natural Gas - NJ	11	%	9	%		1,416			1,123
Fossil - Oil & Natural Gas - NY	5	%	3	%		622			341
Fossil - Oil & Natural Gas - CT	2	%	0	%		273			49
Fossil - Oil & Natural Gas - Midwest	0	%	0	%		(5	)		(3	)
Total Oil & Natural Gas	18	%	12	%		2,306			1,510
Fossil - Pumped Storage	0	%	0	%		(34	)		(35	)
	100	%	100	%		12,905			12,852

Attachment 10

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Statistical Measures
(Unaudited)

	For the Quarters Ended
	March 31, 2007			March 31, 2006
Weighted Average Common Shares Outstanding (000’s)
Basic		252,892			251,187
Diluted		253,356			252,065
Stock Price at End of Period	$	83.04		$	64.04
Dividends Paid per Share of Common Stock	$	0.585		$	0.570
Dividend Payout Ratio*		54.6	%		66.2	%
Dividend Yield		2.8	%		3.5	%
Price/Earnings Ratio*		19.8			18.8
Rate of Return on Average Common Equity*		16.0	%		14.5	%
Book Value per Common Share	$	26.16		$	24.74
Market Price as a Percent of Book Value		317	%		259	%
Total Shareholder Return		26.1	%		-0.6	%

*Calculation based on Operating Earnings for 12 month period ended

Attachment 11

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Non-Trading Mark-to-Market
(Unaudited)
March-07

2007 Non-Trading Mark-to-MarketEnergy Positions

In Millions After-Tax	Q1			Q2		Q3		Q4		Year-to-Date
Power	$	(0.5	)							$	(0.5	)
Holdings	$	(20.5	)							$	(20.5	)
Total	$	(21.0	)	$	—	$	—	$	—	$	(21.0	)

EPS Impact	Q1			Q2		Q3		Q4		Year-to-Date
Power	$	(0.00	)							$	(0.00	)
Holdings		(0.08	)							$	(0.08	)
Total	$	(0.08	)	$	—	$	—	$	—	$	(0.08	)

2006 Non-Trading Mark-to-MarketEnergy Positions

In Millions After-Tax	Q1			Q2		Q3		Q4			Year-to-Date
Power	$	(11.4	)	$	1.3	$	12.0	$	(3.0	)	$	(1.1	)
Holdings	$	(4.1	)	$	13.0	$	29.3	$	(9.4	)	$	28.8
Total	$	(15.5	)	$	14.3	$	41.3	$	(12.4	)	$	27.7

EPS Impact	Q1			Q2		Q3		Q4			Year-to-Date
Power	$	(0.05	)	$	0.01	$	0.05	$	(0.01	)	$	—
Holdings		(0.02	)		0.05		0.12		(0.04	)	$	0.11
Total	$	(0.07	)	$	0.06	$	0.17	$	(0.05	)	$	0.11

Attachment 12

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

PSEG Liquidity

(Unaudited, $ Millions)

PSEG Liquidity as of March 31, 2007
Company	Facility	Expiration Date	Total Facility		Primary Purpose	Usage at 3/31/2007		Available Liquidity 3/31/2007
PSEG	5-year Credit Facility	Dec-11	$	1,000	CP Support /Funding/LCs	$	1	$	999
	Uncommitted Bilateral Agreement	N/A		N/A	Funding		—		N/A
PSE&G	5-year Credit Facility	Jun-11		600	CP Support /Funding/LCs		222		378
	Uncommitted Bilateral Agreement	N/A		N/A	Funding		48		N/A
Energy Holdings	5-year Credit Facility	Jun-10		150	Funding/LCs		27		123
Power	5-Year Credit Facility	Dec-11		1,600	Funding/LCs		20		1,580
	Bilateral Credit Facility	Mar-10		100	Funding/LCs		26		74
	Bilateral Credit Facility*	Jun-07		200	Funding/LCs		10		190
		Total	$	3,650				$	3,344
					PSEG Short Term Investment				362
				Total Liquidity Available				$	3,706
	*PSEG/Power Co-borrower facility

EX-99.1

Public Service Enterprise Group

PSEG Earnings Conference Call

1^st Quarter 2007

May 4, 2007

Exhibit 99.1

Disclaimer Statement

The statements contained in this communication about our and our
subsidiaries’ future performance, including, without limitation, future
revenues, earnings, strategies, prospects and all other statements that are
not purely historical, are forward-looking statements for purposes of the safe
harbor provisions under The Private Securities Litigation Reform Act of
1995. Although we believe that our expectations are based on information
currently available and on reasonable assumptions, we can give no
assurance they will be achieved. There are a number of risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements made herein. A discussion of some of these
risks and uncertainties is contained in our Annual Report on Form 10-K and
subsequent reports on Form 10-Q and Form 8-K filed with the Securities
and Exchange Commission (SEC), and available on our website:
http://www.pseg.com. These documents address in further detail our
business, industry issues and other factors that could cause actual results
to differ materially from those indicated in this communication. In addition,
any forward-looking statements included herein represent our estimates
only as of today and should not be relied upon as representing our
estimates as of any subsequent date. While we may elect to update
forward-looking statements from time to time, we specifically disclaim any
obligation to do so, even if our estimates change, unless otherwise required
by applicable securities laws.

1

GAAP Disclaimer

PSEG presents Operating Earnings in addition to its Net Income reported in
accordance with generally accepted accounting principles (GAAP). Operating
Earnings is a non-GAAP financial measure that differs from Net Income
because it excludes the impact of the sale of certain non-core domestic and
international assets and costs stemming from the terminated merger
agreement with Exelon Corporation. PSEG presents Operating Earnings
because management believes that it is appropriate for investors to consider
results excluding these items in addition to the results reported in accordance
with GAAP. PSEG believes that the non-GAAP financial measure of
Operating Earnings provides a consistent and comparable measure of
performance of its businesses to help shareholders understand performance
trends.  This information is not intended to be viewed as an alternative to
GAAP information. A reconciliation of Operating Earnings to Net Income is
included on the slides where the information appears. These slides are only
intended to be reviewed in conjunction with the oral presentation to which they relate.

2

PSEG
2007 Q1 Review

Ralph Izzo

Chairman, President and Chief Executive Officer

Q1 2007 EPS Summary

($ 5)

($ 6)

Discontinued Operations, net of tax

$ 0.85

$ 1.32

EPS from Operating Earnings

$ 203

$ 329

Net Income

$ 208

$ 335

Income from Continuing Operations

($ 5)

-

Merger Costs

$ 213

$ 335

Operating Earnings

Q1 2006

Q1 2007

               $ millions (except EPS)

4

PSEG – Q1 Operating Highlights

Solid Earnings Growth

PSEG Power delivered exceptional results

Roll-off of below market contracts

Sustained top quartile nuclear performance with fleet operating at 97% capacity

factor

Favorable natural gas market

PSE&G performing at more normal levels

Rate relief received in Q4 2006 supporting returns

More normal weather

Costs under control

Holdings earnings lower

Rising prices in Texas drive unrealized MTM loss on fixed-price contract

Completion of major maintenance positions assets for summer peak

Cash flow and liquidity remain strong

Parent debt reduced with dividends and returns of capital received                     

                     
from subsidiaries

5

Markets remain attractive

BGS

Power a successful participant

Roll-off of below market contracts

RPM

Capacity markets - auctions underway

Carbon constraints – a growing focus

Favorably positioned

6

PSEG – Meeting challenges

Staffing progress / leadership team in place

Balance sheet continues to improve; positioned to participate

in opportunities

Advocating integrated energy solutions as key to meeting

environmental challenges

Efficiency, renewables, advanced fossil, nuclear

Solar Initiative

50% of two-year goal

$100M investment

Support cap-and–trade mechanism to achieve greenhouse

gas emission restrictions

Probable federal legislation in 2008

7

Solar Initiative – We deliver on Energy Master Plan promise

PSE&G will invest $100M over 2008-2009 to help finance installation
of 30MW of solar photovoltaic systems on municipal buildings,
businesses and homes.

The solar initiative is designed to fulfill 50% of the renewable portfolio
standard (RPS) requirements over a two year period.

Program will provide loans to developers to cover 40-50% of the cost
of solar installation project. The remaining cost of the project will be
funded by an equity partner (or host customer) who would also own
the solar panels.

PSE&G will be repaid the principal plus interest over 15 year period
in the form of credits called Solar Renewable Energy Certificates
(SREC’s) or, in cash.  PSE&G will allocate SRECS to Load Serving
Entities (LSE) which will lower their renewable portfolio compliance
cost standards over time.

PSE&G would earn a return for the full cost of capital plus an
incentive for spurring the solar market.

8

Review of assets continues

Hired financial advisor to explore sale of Global’s 99%-owned

investment in Electroandes

4 hydro plants in Peru with 180MW of capacity and net

investment of approximately $160M

Significant amount of interest expressed in non-strategic asset

Opportunity to reallocate capital if valuations attractive

Sale of Lawrenceburg to close in Q2 2007

$425M of cash benefit

Proceeds expected to be applied to debt reduction

9

Summary of Q1 fundamental drivers

Operations

Nuclear baseload generation fleet that operates at top quartile levels

Distribution and transmission assets providing safe, secure and

reasonably priced energy supply and services

Markets

Deep, liquid markets with natural gas setting price for generation

Capacity values receiving recognition in constrained markets

Improved values for international assets

Financials

Free cash flow powers debt pay down and growth of incumbent utility

and generation businesses

10

Earnings Outlook – On growth trajectory

$0.00

$1.00

$2.00

Earnings
per Share

$3.00

$4.00

$5.00

$6.00

2006

Operating

Earnings

2007

Guidance

2008

Guidance

$4.90 - $5.30

$5.60 - $6.10

$3.71

*Excludes Loss on Sale of RGE of $0.70 per share, Merger costs of $0.03 per share and Loss from Discontinued Operations of $0.05 per share
**Percentage change in growth based on mid-point of guidance                                                                                                                                  
***Raised 2007 guidance on March 26, 2007 from $4.60-$5.00 to $4.90-$5.30

*

***

Q1 2007
Operating
Earnings:
$1.32

11

PSEG
2007 Q1 Review

Tom O’Flynn

Executive Vice President and Chief Financial Officer

Q1 2007 EPS Summary

($ 5)

($ 6)

Discontinued Operations, net of tax

$ 0.85

$ 1.32

EPS from Operating Earnings

$ 203

$ 329

Net Income

$ 208

$ 335

Income from Continuing Operations

($ 5)

-

Merger Costs

$ 213

$ 335

Operating Earnings

Q1 2006

Q1 2007

               $ millions (except EPS)

13

Q1 Operating Earnings by Subsidiary

$    213

     (14)

     28

    121

$      78

2006

$   335

    (18)

      3

  219

$   131

2007

Operating Earnings

Earnings per Share

  (0.06)

  (0.08)

Enterprise

$   0.85

$   1.32

Operating Earnings

  0.12

  0.01

PSEG Energy Holdings

  0.48

  0.87

PSEG Power

$   0.31

$   0.52

PSE&G

2006

2007

YTD March 31, 2007 
$ Millions (except EPS)

* 2006 excludes merger related costs of $1M at PSE&G, Losses from Discontinued Operations of $9M, or $0.04 per share at Power, Income
from Discontinued Operations of $4M, or $0.02 per share at Energy Holdings and merger related costs of $4M, or $0.02 per share at Enterprise

** 2007 excludes Losses from Discontinued Operations of $6M, or $0.02 per share at Power

**

*

14

.85

.21

.39

(.11)

(.02)

1.32

0.00

0.25

0.50

0.75

1.00

1.25

1.50

Utility

Rate relief .09

Weather .06

Volume/ Demand .03

O&M/ Other .02

Transmission .01

$ / share

EPS Reconciliation – Q1 2006 versus Q1 2007

       Q1 2007        
operating
earnings**

       Q1 2006        
operating
earnings*

Enterprise

Interest and
Donations (.02)

Power

Re-contracting /
Strong
operations .28

BGSS and Other
.11

Mark-to-Market
.04

Holdings

Other .01

Texas –   
Mark-to-
Market (.06)

Texas –
maintenance
(.04)

Lease Income
(.02)

* Excludes $0.02 of merger related costs and $0.02 Loss from Discontinued Operations               
** Excludes $0.02 Loss from Discontinued Operations

O&M (.02)

Depreciation/
Interest/NDT
(.02)

15

PSE&G
2007 Q1 Review

PSE&G – Q1 2007 EPS Summary

$ 0.21

$ 0.31

$ 0.52

EPS from Operating Earnings

$ 54

$ 77

$ 131

Net Income from Continuing
Operations

$ 53

$ 78

$ 131

Operating Earnings*

$ 193

$ 2,293

$ 2,486

Operating Revenues

Variance

Q1 2006

Q1 2007

               $ millions (except EPS)

* Excludes $1M merger related costs in Q1 2006

17

0.31

0.09

0.06

0.03

0.03

0.52

0.00

0.15

0.30

0.45

0.60

Rate Relief:      

Gas $.06

Electric $.03

$ / share

EPS Reconciliation – Q1 2006 versus Q1 2007

Q1 2007
operating
earnings

Q1 2006
operating
earnings

Weather:

Electric $.01

Gas $.05

Other:

Transmission
$.01

O&M & Other
$.02

Volume/
Demand
$.03

18

PSE&G – Q1 Operating Highlights

Operations

Sales growth reflects

Normal electric demand from residential and commercial customers

More normal weather

Degree days in 2007 were 2% colder than normal

Degree days in 2006 were 10% warmer than normal

Decline in industrial segment

Customer sensitivity to higher gas prices

\

Regulatory

Solar initiative filed

$100M of loans to fund development of solar photovoltaics

Financial

Rate relief effective in Q4 2006 added $0.09 per share to earnings

Operating and maintenance expenses are under control

PSE&G announced it would proceed with capital program ($150M - $175M) for
installation of Integrated Customer Service Platform (ICSP)

19

PSEG Power
2007 Q1 Review

PSEG Power - Q1 2007 EPS Summary

$ 182

$ 1,967

$ 2,149

Operating Revenues

$ 0.39

$ 0.48

$ 0.87

EPS from Operating Earnings

$ 101

$ 112

$ 213

Net Income

$ 3

($ 9)

($ 6)

Discontinued Operations, net of tax

$ 98

$ 121

$ 219

Income from Continuing Operations

$ 98

$ 121

$ 219

Operating Earnings

Variance

Q1 2006

Q1 2007

               $ millions (except EPS)

21

.48

.28

.11

.04

(.02)

(.02)

.87

0.00

0.20

0.40

0.60

0.80

Recontracting
and strong
operations

EPS Reconciliation – Q1 2006 versus Q1 2007

       Q1 2007        
operating
earnings**

       Q1 2006        
operating
earnings*

O&M

BGSS returns
to 2004-2005
levels

Mark-to-
Market

Depreciation,
Interest & NDT

* Excludes $0.04 Loss from Discontinued Operations
** Excludes $0.02 Loss from Discontinued Operations

$ / share

22

C&I Customers on BGSS Tariff

$ / MMBTU

Jan-06

Mar-06

May-06

Jul-06

Sep-06

Nov-06

Jan-07

Mar-07

Inventory Costs

C&I BGSS Tariff

Cost influenced by storage
refill during high April-
November 2005 spot price

Cost influenced by storage
refill during low April-
November 2006 spot price

Tariff based on
spot prices

Tariff trends upward
with rise in real time
spot prices

23

Prices and operations yield margin

$0

$10

$20

$30

$40

$50

$60

Q1 2006

Q1 2007

PSEG Power Realized Gross Margin
($/MWh)

$36

$44

24

RPM Capacity Auction – Transparent Pricing Model

2007- 2008 Capacity Auction Results

($/ MW-day)

N/A

N/A

$40.80

Rest of
Pool

$48.38

$140.16

$188.54

Southwest
MAAC

$20.16

$177.51

$197.67

Eastern
MAAC

CTR
Value*

Load
Price

Unit
Price

PJM released results on April 13 from its first
capacity auction under the Reliability Pricing
Model (RPM) for the 2007-2008 delivery year.

Three auctions are scheduled in the next nine
months to provide transition through the 2010-
2011 delivery year.

July:        ’08 - ’09 Planning Year

October:  ’09 – ’10 Planning Year

January:  ’10 – ’11 Planning Year

Pricing in initial auction for Eastern MAAC
reflected close to the Net “Cost of New Entry”:
standard simple cycle gas turbine adjusted for
location and net revenues.

Future auction pricing could be influenced by
changes in: load growth, emergency transfer
capability (CETL),  avoided cost for units, forced
outage rates, and unit derates / retirements.

Market prices support our forecast year-over-
year improvement in capacity margin of $125M -
$175M in 2007 with further improvement in 2008.

*CTR Value: Capacity Transfer Rights                                                            
Allocated to Load Serving Entities (LSE) in constrained zones to provide
them with access to supply from outside the zone.

25

PSEG Power – Q1 Operating Highlights

Operations:

Sustained improvement in performance

Nuclear fleet operated at 97% capacity factor

Successful completion of Salem No. 1 outage

23 day outage began on 3/27/07

Executed the Engineering, Procurement and Construction (EPC) agreement
for Mercer back-end environmental work

Markets:

Benefiting from roll-off of below market contracts

BGS February auction cleared at ~$99 per MWh

Capacity auction settles at ~$198/MW-day for EMAAC

Natural Gas pricing and weather improves BGSS margins

Financial:

$125M dividend payment to Enterprise

Lawrenceburg sale scheduled to close in Q2 2007

$425M of proceeds

26

PSEG Energy Holdings
2007 Q1 Review

PSEG Energy Holdings – Q1 2007 EPS Summary

($ 0.11)

$ 0.12

$ 0.01

EPS from Operating Earnings

($ 29)

$ 32

$ 3

Net Income

($ 4)

$ 4

-

Discontinued Operations, net of tax

($ 25)

$ 28

$ 3

Income from Continuing Operations

($ 38)

$ 90

$ 52

Operating Income

Variance

Q1 2006

Q1 2007

               $ millions (except EPS)

28

.12

(.06)

(.04)

.01

(.02)

.01

0.00

0.05

0.10

$ / share

0.15

EPS Reconciliation – Q1 2006 versus Q1 2007

Q1 2007
operating
earnings

Q1 2006
operating
earnings*

Lease Income

Texas: O&M

Other

Resources

Global

Texas: MTM

* Excludes $0.02 Income from Discontinued Operations

29

PSEG Energy Holdings – Q1 Operating Highlights

Operations:

Global

Planned major maintenance program in Texas completed

Settlement of Konya-Ilgin (Turkey) arbitration

Markets:

Stronger forward market conditions in Texas versus year-end 2006 pricing

Financial:

Engaged financial advisor to act as financial advisor for potential sale of              
Electroandes

Completed refinancing of GWF (CA) and sale of Tracy (CA)

$145M return of capital to PSEG in March

30

Gas prices and reserve margins have driven spark spreads higher, generating
strong results

Open position sensitivity to market (Calendar 2008):

Natural Gas: +/- $1/MMBtu = +/- $13 M

Heat Rate: +/- 500 Btu/KWh = +/- $25 M

Texas Market Update

$100

~19

15%

6.90

2007*

$130

19.42

16%

10.82

2006

$93

16.50

17%

6.34

2005

$48

11.97

25%

5.42

2004

EBITDA

($M)

Spark
Spread

Reserve
Margin

NYMEX

NYMEX = Forward curve at year-end

Reserve margin c/o ERCOT (both
actuals and June 06 report for
projections)

Spark Spread and EBITDA = actual
amount achieved and projected
(including ancillary revenues, but
excluding MTM gains)

*As of year-end 2006

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$5.60 - $6.10

Strong earnings growth in 2007 and 2008

$3.77*

$3.71**

37%

15%

$4.90 - $5.30

Holdings

PSE&G

Power

Parent

Operating Earnings by Subsidiary

*Excludes ($.14) Merger Costs, ($.07) Cumulative Effect of an Accounting Change and ($.85) Discontinued Operations                                    
**Excludes ($.03) Merger Costs, ($.70) Loss on Sale of RGE and ($.05) Discontinued Operations

446

347

196

515

262

227

825-905

340-360

130-145

0

(71)

(66)

(50)-(40)

2005

2006

2007

2008

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Balance sheet improvement underway

Debt at 59% of consolidated capital (excluding
securitization debt) at March 31, 2007

Return of capital of $145M received from Holdings and
$125M dividend from Power in 1Q 2007

Proceeds from sale of Lawrenceburg ($425M) to be
received by end of 2Q and will be used to retire debt

PSEG called for redemption on May 15, 2007, $375M of
outstanding Senior Floating Notes due 2008

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Summary

Summary

Solid earnings and operating performance

Attractive markets

Pricing signals remain strong

Assets well positioned

Meeting market challenges

Supporting carbon cap-and-trade

Solar initiative

Financial condition strengthening

Earnings growth on track

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