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                     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         January 21, 1994



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


  New Jersey                    1-9120                      22-2625848 
(State or other               (Commission                (I.R.S. Employer 
jurisdiction of               File Number)             Identification No.) 
 incorporation) 
 

     80 Park Plaza, P. O. Box 1171 
           Newark, New Jersey                               07101-1171
(Address of principal executive offices)                    (Zip Code) 
 
     Registrant's telephone number, including area code:  201-430-7000 



                  PUBLIC SERVICE ELECTRIC AND GAS COMPANY 
           (Exact name of registrant as specified in its charter) 


  New Jersey                     1-973                      22-1212800 
(State or other               (Commission                (I.R.S. Employer 
jurisdiction of               File Number)              Identification No.) 
incorporation) 
 

      80 Park Plaza, P. O. Box 570 
           Newark, New Jersey                               07101-0570 
(Address of principal executive offices)                    (Zip Code) 
 

     Registrant's telephone number, including area code:  201-430-7000 

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Item 5.   Other Events.
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     The following information updates certain matters previously reported to 
the Securities and Exchange Commission under Item 1 -  Business of Part I of 
the Annual Reports on Form 10-K for 1992 and Part II of the Reports on Form 
10-Q for the quarters ended March 31, 1993, June 30, 1993 and September 30, 
1993 of Public Service Electric and Gas Company (PSE&G) and its parent, 
Public Service Enterprise Group Incorporated (Enterprise).  

Credit Ratings
- --------------

     On January 17, 1994, Standard & Poor's Corporation (S&P) announced that 
it had lowered its securities ratings of PSE&G's debt and preferred stock as 
follows:  mortgage bonds to A- from A; debentures and preferred stock to BBB+ 
from A-; and commercial paper to A-2 from A-1.

     S&P also announced that it had lowered its securities ratings on the 
medium term notes (MTNs) of Enterprise's indirect subsidiary PSEG Capital 
Corporation (PSEG Capital) to BBB from BBB+ and on the commercial paper of 
PSE&G's subsidiary, PSEG Fuel Corporation to A-2 from A-1.  S&P said:  

     "The downgrades for PSE&G reflect prospects for a financial profile that 
     will be inadequate for former ratings in view of a business position 
     considered by S&P to be somewhat below average.  Despite ample 
     generating reserves and limited external financing pressures during the 
     next several years, financial improvement will be constrained by 
     sluggish sales growth prospects due to a weak local economy and a high 
     common dividend payout ratio which will restrict capital structure 
     improvement."

S&P further stated:  

     "Other concerns include regionally high electric rates, in part due to a 
     heavy capital investment in the Hope Creek nuclear facility, and high 
     production costs.  Recognizing increasing competition in retail power 
     markets, PSE&G has been aggressive in identifying customers that have 
     alternative power options and negotiating special tariffs, when 
     necessary, to retain load."

     "Additionally, plans to refrain from seeking base rate relief during the 
     next few years should gradually improve PSE&G's relative  competitive 
     position.  Still, prospective revenue loss tied to discounted retail 
     power contracts could exacerbate pressures to control costs to maintain 
     adequate earning levels.  PSE&G's financial parameters strengthened 
     during the past year due primarily to electric and gas base rate relief 
     earlier in the year, strong, largely weather-related, electric sales 
     growth, and continued cost control."


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     "Over the intermediate term, financial measures of protection should 
     remain stable, with cash flow after dividends funding the bulk of 
     construction expenditures."

     "The rating action for PSEG Capital, the initial funding conduit for the 
     nonutility operations, follows that of PSE&G in view of the former's 
     primary credit support provided by a support agreement from parent 
     Enterprise.  The Parent's creditworthiness is, in turn, derived mainly 
     from its cash-generating entity, PSE&G."

     "The ratings outlook for both PSE&G and PSEG Capital is stable, 
     reflecting PSE&G's manageable construction program, limited external 
     financing pressures, and absence of rate relief needs."

     The respective ratings presently assigned by Moody's Investor Service 
(Moody's) and Duff and Phelps (Duff) to PSE&G's securities are as follows:  
Mortgage Bonds, A2 and A; Debenture Bonds, A3 and A-; Preferred Stock, A3 and 
A- and commercial paper, P1 and Duff 1.  The ratings presently assigned by 
Moody's and Duff to PSEG Capital's MTNs are Baa2 and BBB+, respectively.  The 
respective ratings assigned by S&P, Moody's and Duff to the commercial paper 
of Enterprise's indirect subsidiary, Enterprise Capital Funding Corporation, 
which is supported by a commercial bank letter of credit, are A1+, P1 and 
Duff 1+.  

     The current ratings of such securities reflect the respective views of 
the rating agency furnishing the same and not necessarily those of management 
of Enterprise or PSE&G.  An explanation of the significance of such ratings 
may be obtained from such agency.  

1993 Unaudited Operating Results
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     On January 18, 1994, Enterprise reported that its unaudited 1993 
consolidated earnings were a record $600.9 million, or $2.50 per share of 
common stock, based on 240.7 million average shares outstanding.  Enterprise 
consolidated earnings for 1992 were $504.1 million, or $2.17 per share, based 
on 232.3 million average shares outstanding.  

     PSE&G also reported unaudited 1993 consolidated earnings of $576.7 
million for the year, or $2.40 per share of Enterprise common stock, compared 
with 1992 earnings of $444.0 million, or $1.91 per share.          

     Both Enterprise and PSE&G's improved results stemmed principally from 
PSE&G's increased weather-related electric sales and its higher electric and 
gas base rates that became effective January 1, 1993.  

     Consolidated unaudited 1993 earnings for Enterprise Diversified Holdings 
Incorporated (EDHI), parent company of Enterprise's nonutility businesses, 
were $24.2 million, or 10 cents per share of Enterprise common 

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stock, compared with its 1992 earnings of $60.1 million, or 26 cents per 
share.

     EDHI's results were positively affected by comparatively higher income 
from Energy Development Corporation, its wholly-owned oil and gas subsidiary, 
largely due to higher natural gas prices.  However, EDHI's results were also 
impacted by the recording of an impairment in the value of certain properties 
by its wholly-owned real estate subsidiary, Enterprise Group Development 
Corporation (EGDC).  As a result of a recent comprehensive management review 
of each property's current value and the potential for increasing such value 
through operating and other improvements, EGDC recorded an impairment related 
to certain of its properties, including properties upon which EGDC's 
management altered its intent from a long-term investment strategy to a 
short-term hold for sale status, reflecting such properties on its books at 
their net realizable value.  This impairment reduced EDHI's unaudited 
consolidated earnings by $50.5 million or 21 cents per share of Enterprise 
common stock.  Exclusive of the recorded impairment, EDHI's unaudited 
consolidated net income would have been a record $74.6 million for the year.  


                              SIGNATURE
                              --------- 

     Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrants have duly caused this report to be signed on their behalf by the 
undersigned hereunto duly authorized.


                              PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 
                                              (Registrant)

                                 PUBLIC SERVICE ELECTRIC AND GAS COMPANY 
                                              (Registrant) 



                          By                ROBERT C. MURRAY
                              -------------------------------------------
                                            Robert C. Murray
                               Vice President and Chief Financial Officer
                              Public Service Enterprise Group Incorporated 

                                  Senior Vice President - Finance and
                                        Chief Financial Officer
                                 Public Service Electric and Gas Company 

Date:  January 21, 1994
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