Changes in Capitalization

6 Months Ended

Jun. 30, 2012

Changes in Capitalization

Note 9. Changes in Capitalization

The following capital transactions occurred in the first six months of 2012:

Power

• paid $66 million of 5.00% Pollution Control Revenue Refunding bond at maturity, and

• paid cash dividends of $600 million to PSEG.

PSE&G

• refinanced at par $50 million of 5.45% fixed rate Pollution Control Financing Authority of Salem County Authority Bonds due February 1, 2032, which were serviced and secured by PSE&G’s First and Refunding Mortgage Bonds, with $50 million of weekly-reset variable rate demand bonds due April 1, 2046, which are serviced and secured by PSE&G’s First and Refunding Mortgage Bonds,

• redeemed and retired at par $23 million of 5.20% fixed rate Pollution Control Financing Authority of Salem County Authority Bonds due March 1, 2025, which were serviced and secured by PSE&G’s First and Refunding Mortgage Bonds of like tenor,

• issued $450 million of 3.95% Secured Medium-Term Notes, Series H due May 2042,

• paid $96 million of Transition Funding’s securitization debt, and

• paid $5 million of Transition Funding II’s securitization debt.

Energy Holdings

• released from $50 million of nonrecourse project debt related to the Dynegy Leases.

Power [Member]

Changes in Capitalization

Note 9. Changes in Capitalization

The following capital transactions occurred in the first six months of 2012:

Power

• paid $66 million of 5.00% Pollution Control Revenue Refunding bond at maturity, and

• paid cash dividends of $600 million to PSEG.

PSE&G

• refinanced at par $50 million of 5.45% fixed rate Pollution Control Financing Authority of Salem County Authority Bonds due February 1, 2032, which were serviced and secured by PSE&G’s First and Refunding Mortgage Bonds, with $50 million of weekly-reset variable rate demand bonds due April 1, 2046, which are serviced and secured by PSE&G’s First and Refunding Mortgage Bonds,

• redeemed and retired at par $23 million of 5.20% fixed rate Pollution Control Financing Authority of Salem County Authority Bonds due March 1, 2025, which were serviced and secured by PSE&G’s First and Refunding Mortgage Bonds of like tenor,

• issued $450 million of 3.95% Secured Medium-Term Notes, Series H due May 2042,

• paid $96 million of Transition Funding’s securitization debt, and

• paid $5 million of Transition Funding II’s securitization debt.

Energy Holdings

• released from $50 million of nonrecourse project debt related to the Dynegy Leases.

PSE And G [Member]

Changes in Capitalization

Note 9. Changes in Capitalization

The following capital transactions occurred in the first six months of 2012:

Power

• paid $66 million of 5.00% Pollution Control Revenue Refunding bond at maturity, and

• paid cash dividends of $600 million to PSEG.

PSE&G

• refinanced at par $50 million of 5.45% fixed rate Pollution Control Financing Authority of Salem County Authority Bonds due February 1, 2032, which were serviced and secured by PSE&G’s First and Refunding Mortgage Bonds, with $50 million of weekly-reset variable rate demand bonds due April 1, 2046, which are serviced and secured by PSE&G’s First and Refunding Mortgage Bonds,

• redeemed and retired at par $23 million of 5.20% fixed rate Pollution Control Financing Authority of Salem County Authority Bonds due March 1, 2025, which were serviced and secured by PSE&G’s First and Refunding Mortgage Bonds of like tenor,

• issued $450 million of 3.95% Secured Medium-Term Notes, Series H due May 2042,

• paid $96 million of Transition Funding’s securitization debt, and

• paid $5 million of Transition Funding II’s securitization debt.

Energy Holdings

• released from $50 million of nonrecourse project debt related to the Dynegy Leases.