Available-for-Sale Securities

9 Months Ended

Sep. 30, 2012

Available-for-Sale Securities

Available-for-Sale Securities

Nuclear Decommissioning Trust (NDT) Fund

Power maintains an external master nuclear decommissioning trust to fund its share of decommissioning for its five nuclear facilities upon termination of operation. The trust contains two separate funds: a qualified fund and a non-qualified fund. Section 468A of the Internal Revenue Code limits the amount of money that can be contributed into a qualified fund. The trust funds are managed by third-party investment advisers who operate under investment guidelines developed by Power. In September 2012, Power restructured a portion of its NDT Fund and realized gains of $59 million.  The investments were transitioned to new investment managers to remove under-performing managers. 

Power classifies investments in the NDT Fund as available-for-sale. The following tables show the fair values and gross unrealized gains and losses for the securities held in the NDT Fund:

	As of September 30, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities	$	626	$	128	$	(5	)	$	749
Debt Securities
Government Obligations	274		14		—			288
Other Debt Securities	311		22		—			333
Total Debt Securities	585		36		—			621
Other Securities	131		—		—			131
Total NDT Available-for-Sale Securities	$	1,342	$	164	$	(5	)	$	1,501

	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities	$	582	$	126	$	(23	)	$	685
Debt Securities
Government Obligations	343		16		—			359
Other Debt Securities	268		15		(2		)	281
Total Debt Securities	611		31		(2		)	640
Other Securities	24		—		—			24
Total NDT Available-for-Sale Securities	$	1,217	$	157	$	(25	)	$	1,349

These amounts do not include receivables and payables for NDT Fund transactions which have not settled at the end of each period. Such amounts are included in Accounts Receivable and Accounts Payable on the Condensed Consolidated Balance Sheets as shown in the following table.

	As of		As of
	September 30, 2012		December 31, 2011
	Millions
Accounts Receivable	$	61	$	27
Accounts Payable	$	80	$	22

The following table shows the value of securities in the NDT Fund that have been in an unrealized loss position for less than and greater than 12 months. Power does not consider these securities to be other-than-temporarily impaired as of September 30, 2012.

	As of September 30, 2012									As of December 31, 2011
	Less Than 12 Months					Greater Than 12 Months				Less Than 12 Months					Greater Than 12 Months
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	Millions
Equity Securities (A)	$	215	$	(5	)	$	—	$	—	$	183	$	(23	)	$	—	$	—
Debt Securities
Government Obligations (B)	11		—			2		—		20		—			3		—
Other Debt Securities (C)	7		—			3		—		56		(1		)	4		(1		)
Total Debt Securities	18		—			5		—		76		(1		)	7		(1		)
Other Securities	6		—			—		—		—		—			—		—
NDT Available-for-Sale Securities	$	239	$	(5	)	$	5	$	—	$	259	$	(24	)	$	7	$	(1	)

(A) Equity Securities—Represent investments primarily in common stock within a broad range of industries and sectors. The unrealized losses are distributed over two hundred companies with limited impairment durations.

(B) Debt Securities (Government)—Unrealized losses on investments in United States Treasury obligations and Federal Agency mortgage-backed securities were caused by interest rate changes. Since these investments are guaranteed by the United States government or an agency of the United States government, it is not expected that these securities will settle for less than their amortized cost basis. Power does not intend to sell nor will it be more-likely-than-not required to sell these securities.

(C) Debt Securities (Corporate)—Represent investment grade corporate bonds which are not expected to settle for less than their amortized cost. Power does not intend to sell nor will it be more-likely-than-not required to sell these securities.

The proceeds from the sales of and the net realized gains on securities in the NDT Fund were:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
	Millions
Proceeds from NDT Fund Sales	$	617		$	431		$	1,252		$	1,088
Net Realized Gains (Losses) on NDT Fund:
Gross Realized Gains	$	94		$	26		$	136		$	121
Gross Realized Losses	(19		)	(10		)	(41		)	(28		)
Net Realized Gains (Losses) on NDT Fund	$	75		$	16		$	95		$	93

Net realized gains disclosed in the above table were recognized in Other Income and Other Deductions in PSEG’s and Power’s Condensed Consolidated Statements of Operations. Net unrealized gains of $77 million (after-tax) were recognized in Accumulated Other Comprehensive Loss on Power’s Condensed Consolidated Balance Sheet as of September 30, 2012.

The NDT available-for-sale debt securities held as of September 30, 2012 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	21
1 - 5 years	129
6 - 10 years	173
11 - 15 years	38
16 - 20 years	9
Over 20 years	251
Total NDT Available-for-Sale Debt Securities	$	621

The cost of these securities was determined on the basis of specific identification.

Power periodically assesses individual securities whose fair value is less than amortized cost to determine whether the investments are considered to be other-than-temporarily impaired. For equity securities, management considers the ability and intent to hold for a reasonable time to permit recovery in addition to the severity and duration of the loss. For fixed income securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). In 2012, other-than-temporary impairments of $14 million were recognized on securities in the NDT Fund. Any subsequent recoveries in the value of these securities would be recognized in Accumulated Other Comprehensive Income (Loss) unless the securities are sold, in which case, any gain would be recognized in income. The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.

Rabbi Trust

PSEG maintains certain unfunded nonqualified benefit plans to provide supplemental retirement and deferred compensation benefits to certain key employees. Certain assets related to these plans have been set aside in a grantor trust commonly known as the “Rabbi Trust.” In March 2012, PSEG restructured the fixed income component of the Rabbi Trust.

PSEG classifies investments in the Rabbi Trust as available-for-sale. The following tables show the fair values, gross unrealized gains and losses and amortized cost basis for the securities held in the Rabbi Trust.

	As of September 30, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities	$	13	$	4	$	—	$	17
Debt Securities
Government Obligations	113		3		—		116
Other Debt Securities	45		2		—		47
Total Debt Securities	158		5		—		163
Other Securities	3		—		—		3
Total Rabbi Trust Available-for-Sale Securities	$	174	$	9	$	—	$	183

	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities	$	16	$	3	$	—	$	19
Debt Securities	148		5		—		153
Total Rabbi Trust Available-for-Sale Securities	$	164	$	8	$	—	$	172

As of September 30, 2012, amounts in the above table do not include Accounts Receivable of $4 million and Accounts Payable of $5 million for Rabbi Trust Fund transactions which had not yet settled. These amounts are included on the Condensed Consolidated Balance Sheets.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2012		2011		2012		2011
	Millions
Proceeds from Rabbi Trust Sales	$	6	$	—	$	221	$	—
Net Realized Gains (Losses) on Rabbi Trust:
Gross Realized Gains	$	—	$	—	$	6	$	—
Gross Realized Losses	—		—		—		—
Net Realized Gains (Losses) on Rabbi Trust	$	—	$	—	$	6	$	—

Gross realized gains disclosed in the above table were recognized in Other Income in the Condensed Consolidated Statements of Operations. Net unrealized gains of $5 million (after-tax) were recognized in Accumulated Other Comprehensive Loss on the Condensed Consolidated Balance Sheets as of September 30, 2012. The Rabbi Trust available-for-sale debt securities held as of September 30, 2012 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	—
1 - 5 years	58
6 - 10 years	31
11 - 15 years	10
16 - 20 years	5
Over 20 years	59
Total Rabbi Trust Available-for-Sale Debt Securities	$	163

The cost of these securities was determined on the basis of specific identification.

PSEG periodically assesses individual securities whose fair value is less than amortized cost to determine whether the investments are considered to be other-than-temporarily impaired. For equity securities, the Rabbi Trust is invested in a commingled indexed mutual fund. Due to the commingled nature of this fund, PSEG does not have the ability to hold these securities until expected recovery. As a result, any declines in fair market value below cost are recorded as a charge to earnings. For fixed income securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.

The fair value of assets in the Rabbi Trust related to PSEG, Power and PSE&G are detailed as follows:

	As of		As of
	September 30, 2012		December 31, 2011
	Millions
Power	$	36	$	33
PSE&G	61		57
Other	86		82
Total Rabbi Trust Available-for-Sale Securities	$	183	$	172

Power [Member]

Available-for-Sale Securities

Available-for-Sale Securities

Nuclear Decommissioning Trust (NDT) Fund

Power maintains an external master nuclear decommissioning trust to fund its share of decommissioning for its five nuclear facilities upon termination of operation. The trust contains two separate funds: a qualified fund and a non-qualified fund. Section 468A of the Internal Revenue Code limits the amount of money that can be contributed into a qualified fund. The trust funds are managed by third-party investment advisers who operate under investment guidelines developed by Power. In September 2012, Power restructured a portion of its NDT Fund and realized gains of $59 million.  The investments were transitioned to new investment managers to remove under-performing managers. 

Power classifies investments in the NDT Fund as available-for-sale. The following tables show the fair values and gross unrealized gains and losses for the securities held in the NDT Fund:

	As of September 30, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities	$	626	$	128	$	(5	)	$	749
Debt Securities
Government Obligations	274		14		—			288
Other Debt Securities	311		22		—			333
Total Debt Securities	585		36		—			621
Other Securities	131		—		—			131
Total NDT Available-for-Sale Securities	$	1,342	$	164	$	(5	)	$	1,501

	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities	$	582	$	126	$	(23	)	$	685
Debt Securities
Government Obligations	343		16		—			359
Other Debt Securities	268		15		(2		)	281
Total Debt Securities	611		31		(2		)	640
Other Securities	24		—		—			24
Total NDT Available-for-Sale Securities	$	1,217	$	157	$	(25	)	$	1,349

These amounts do not include receivables and payables for NDT Fund transactions which have not settled at the end of each period. Such amounts are included in Accounts Receivable and Accounts Payable on the Condensed Consolidated Balance Sheets as shown in the following table.

	As of		As of
	September 30, 2012		December 31, 2011
	Millions
Accounts Receivable	$	61	$	27
Accounts Payable	$	80	$	22

The following table shows the value of securities in the NDT Fund that have been in an unrealized loss position for less than and greater than 12 months. Power does not consider these securities to be other-than-temporarily impaired as of September 30, 2012.

	As of September 30, 2012									As of December 31, 2011
	Less Than 12 Months					Greater Than 12 Months				Less Than 12 Months					Greater Than 12 Months
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	Millions
Equity Securities (A)	$	215	$	(5	)	$	—	$	—	$	183	$	(23	)	$	—	$	—
Debt Securities
Government Obligations (B)	11		—			2		—		20		—			3		—
Other Debt Securities (C)	7		—			3		—		56		(1		)	4		(1		)
Total Debt Securities	18		—			5		—		76		(1		)	7		(1		)
Other Securities	6		—			—		—		—		—			—		—
NDT Available-for-Sale Securities	$	239	$	(5	)	$	5	$	—	$	259	$	(24	)	$	7	$	(1	)

(A) Equity Securities—Represent investments primarily in common stock within a broad range of industries and sectors. The unrealized losses are distributed over two hundred companies with limited impairment durations.

(B) Debt Securities (Government)—Unrealized losses on investments in United States Treasury obligations and Federal Agency mortgage-backed securities were caused by interest rate changes. Since these investments are guaranteed by the United States government or an agency of the United States government, it is not expected that these securities will settle for less than their amortized cost basis. Power does not intend to sell nor will it be more-likely-than-not required to sell these securities.

(C) Debt Securities (Corporate)—Represent investment grade corporate bonds which are not expected to settle for less than their amortized cost. Power does not intend to sell nor will it be more-likely-than-not required to sell these securities.

The proceeds from the sales of and the net realized gains on securities in the NDT Fund were:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
	Millions
Proceeds from NDT Fund Sales	$	617		$	431		$	1,252		$	1,088
Net Realized Gains (Losses) on NDT Fund:
Gross Realized Gains	$	94		$	26		$	136		$	121
Gross Realized Losses	(19		)	(10		)	(41		)	(28		)
Net Realized Gains (Losses) on NDT Fund	$	75		$	16		$	95		$	93

Net realized gains disclosed in the above table were recognized in Other Income and Other Deductions in PSEG’s and Power’s Condensed Consolidated Statements of Operations. Net unrealized gains of $77 million (after-tax) were recognized in Accumulated Other Comprehensive Loss on Power’s Condensed Consolidated Balance Sheet as of September 30, 2012.

The NDT available-for-sale debt securities held as of September 30, 2012 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	21
1 - 5 years	129
6 - 10 years	173
11 - 15 years	38
16 - 20 years	9
Over 20 years	251
Total NDT Available-for-Sale Debt Securities	$	621

The cost of these securities was determined on the basis of specific identification.

Power periodically assesses individual securities whose fair value is less than amortized cost to determine whether the investments are considered to be other-than-temporarily impaired. For equity securities, management considers the ability and intent to hold for a reasonable time to permit recovery in addition to the severity and duration of the loss. For fixed income securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). In 2012, other-than-temporary impairments of $14 million were recognized on securities in the NDT Fund. Any subsequent recoveries in the value of these securities would be recognized in Accumulated Other Comprehensive Income (Loss) unless the securities are sold, in which case, any gain would be recognized in income. The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.

Rabbi Trust

PSEG maintains certain unfunded nonqualified benefit plans to provide supplemental retirement and deferred compensation benefits to certain key employees. Certain assets related to these plans have been set aside in a grantor trust commonly known as the “Rabbi Trust.” In March 2012, PSEG restructured the fixed income component of the Rabbi Trust.

PSEG classifies investments in the Rabbi Trust as available-for-sale. The following tables show the fair values, gross unrealized gains and losses and amortized cost basis for the securities held in the Rabbi Trust.

	As of September 30, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities	$	13	$	4	$	—	$	17
Debt Securities
Government Obligations	113		3		—		116
Other Debt Securities	45		2		—		47
Total Debt Securities	158		5		—		163
Other Securities	3		—		—		3
Total Rabbi Trust Available-for-Sale Securities	$	174	$	9	$	—	$	183

	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities	$	16	$	3	$	—	$	19
Debt Securities	148		5		—		153
Total Rabbi Trust Available-for-Sale Securities	$	164	$	8	$	—	$	172

As of September 30, 2012, amounts in the above table do not include Accounts Receivable of $4 million and Accounts Payable of $5 million for Rabbi Trust Fund transactions which had not yet settled. These amounts are included on the Condensed Consolidated Balance Sheets.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2012		2011		2012		2011
	Millions
Proceeds from Rabbi Trust Sales	$	6	$	—	$	221	$	—
Net Realized Gains (Losses) on Rabbi Trust:
Gross Realized Gains	$	—	$	—	$	6	$	—
Gross Realized Losses	—		—		—		—
Net Realized Gains (Losses) on Rabbi Trust	$	—	$	—	$	6	$	—

Gross realized gains disclosed in the above table were recognized in Other Income in the Condensed Consolidated Statements of Operations. Net unrealized gains of $5 million (after-tax) were recognized in Accumulated Other Comprehensive Loss on the Condensed Consolidated Balance Sheets as of September 30, 2012. The Rabbi Trust available-for-sale debt securities held as of September 30, 2012 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	—
1 - 5 years	58
6 - 10 years	31
11 - 15 years	10
16 - 20 years	5
Over 20 years	59
Total Rabbi Trust Available-for-Sale Debt Securities	$	163

The cost of these securities was determined on the basis of specific identification.

PSEG periodically assesses individual securities whose fair value is less than amortized cost to determine whether the investments are considered to be other-than-temporarily impaired. For equity securities, the Rabbi Trust is invested in a commingled indexed mutual fund. Due to the commingled nature of this fund, PSEG does not have the ability to hold these securities until expected recovery. As a result, any declines in fair market value below cost are recorded as a charge to earnings. For fixed income securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.

The fair value of assets in the Rabbi Trust related to PSEG, Power and PSE&G are detailed as follows:

	As of		As of
	September 30, 2012		December 31, 2011
	Millions
Power	$	36	$	33
PSE&G	61		57
Other	86		82
Total Rabbi Trust Available-for-Sale Securities	$	183	$	172

PSE And G [Member]

Available-for-Sale Securities

Available-for-Sale Securities

Nuclear Decommissioning Trust (NDT) Fund

Power maintains an external master nuclear decommissioning trust to fund its share of decommissioning for its five nuclear facilities upon termination of operation. The trust contains two separate funds: a qualified fund and a non-qualified fund. Section 468A of the Internal Revenue Code limits the amount of money that can be contributed into a qualified fund. The trust funds are managed by third-party investment advisers who operate under investment guidelines developed by Power. In September 2012, Power restructured a portion of its NDT Fund and realized gains of $59 million.  The investments were transitioned to new investment managers to remove under-performing managers. 

Power classifies investments in the NDT Fund as available-for-sale. The following tables show the fair values and gross unrealized gains and losses for the securities held in the NDT Fund:

	As of September 30, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities	$	626	$	128	$	(5	)	$	749
Debt Securities
Government Obligations	274		14		—			288
Other Debt Securities	311		22		—			333
Total Debt Securities	585		36		—			621
Other Securities	131		—		—			131
Total NDT Available-for-Sale Securities	$	1,342	$	164	$	(5	)	$	1,501

	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities	$	582	$	126	$	(23	)	$	685
Debt Securities
Government Obligations	343		16		—			359
Other Debt Securities	268		15		(2		)	281
Total Debt Securities	611		31		(2		)	640
Other Securities	24		—		—			24
Total NDT Available-for-Sale Securities	$	1,217	$	157	$	(25	)	$	1,349

These amounts do not include receivables and payables for NDT Fund transactions which have not settled at the end of each period. Such amounts are included in Accounts Receivable and Accounts Payable on the Condensed Consolidated Balance Sheets as shown in the following table.

	As of		As of
	September 30, 2012		December 31, 2011
	Millions
Accounts Receivable	$	61	$	27
Accounts Payable	$	80	$	22

The following table shows the value of securities in the NDT Fund that have been in an unrealized loss position for less than and greater than 12 months. Power does not consider these securities to be other-than-temporarily impaired as of September 30, 2012.

	As of September 30, 2012									As of December 31, 2011
	Less Than 12 Months					Greater Than 12 Months				Less Than 12 Months					Greater Than 12 Months
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	Millions
Equity Securities (A)	$	215	$	(5	)	$	—	$	—	$	183	$	(23	)	$	—	$	—
Debt Securities
Government Obligations (B)	11		—			2		—		20		—			3		—
Other Debt Securities (C)	7		—			3		—		56		(1		)	4		(1		)
Total Debt Securities	18		—			5		—		76		(1		)	7		(1		)
Other Securities	6		—			—		—		—		—			—		—
NDT Available-for-Sale Securities	$	239	$	(5	)	$	5	$	—	$	259	$	(24	)	$	7	$	(1	)

(A) Equity Securities—Represent investments primarily in common stock within a broad range of industries and sectors. The unrealized losses are distributed over two hundred companies with limited impairment durations.

(B) Debt Securities (Government)—Unrealized losses on investments in United States Treasury obligations and Federal Agency mortgage-backed securities were caused by interest rate changes. Since these investments are guaranteed by the United States government or an agency of the United States government, it is not expected that these securities will settle for less than their amortized cost basis. Power does not intend to sell nor will it be more-likely-than-not required to sell these securities.

(C) Debt Securities (Corporate)—Represent investment grade corporate bonds which are not expected to settle for less than their amortized cost. Power does not intend to sell nor will it be more-likely-than-not required to sell these securities.

The proceeds from the sales of and the net realized gains on securities in the NDT Fund were:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
	Millions
Proceeds from NDT Fund Sales	$	617		$	431		$	1,252		$	1,088
Net Realized Gains (Losses) on NDT Fund:
Gross Realized Gains	$	94		$	26		$	136		$	121
Gross Realized Losses	(19		)	(10		)	(41		)	(28		)
Net Realized Gains (Losses) on NDT Fund	$	75		$	16		$	95		$	93

Net realized gains disclosed in the above table were recognized in Other Income and Other Deductions in PSEG’s and Power’s Condensed Consolidated Statements of Operations. Net unrealized gains of $77 million (after-tax) were recognized in Accumulated Other Comprehensive Loss on Power’s Condensed Consolidated Balance Sheet as of September 30, 2012.

The NDT available-for-sale debt securities held as of September 30, 2012 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	21
1 - 5 years	129
6 - 10 years	173
11 - 15 years	38
16 - 20 years	9
Over 20 years	251
Total NDT Available-for-Sale Debt Securities	$	621

The cost of these securities was determined on the basis of specific identification.

Power periodically assesses individual securities whose fair value is less than amortized cost to determine whether the investments are considered to be other-than-temporarily impaired. For equity securities, management considers the ability and intent to hold for a reasonable time to permit recovery in addition to the severity and duration of the loss. For fixed income securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). In 2012, other-than-temporary impairments of $14 million were recognized on securities in the NDT Fund. Any subsequent recoveries in the value of these securities would be recognized in Accumulated Other Comprehensive Income (Loss) unless the securities are sold, in which case, any gain would be recognized in income. The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.

Rabbi Trust

PSEG maintains certain unfunded nonqualified benefit plans to provide supplemental retirement and deferred compensation benefits to certain key employees. Certain assets related to these plans have been set aside in a grantor trust commonly known as the “Rabbi Trust.” In March 2012, PSEG restructured the fixed income component of the Rabbi Trust.

PSEG classifies investments in the Rabbi Trust as available-for-sale. The following tables show the fair values, gross unrealized gains and losses and amortized cost basis for the securities held in the Rabbi Trust.

	As of September 30, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities	$	13	$	4	$	—	$	17
Debt Securities
Government Obligations	113		3		—		116
Other Debt Securities	45		2		—		47
Total Debt Securities	158		5		—		163
Other Securities	3		—		—		3
Total Rabbi Trust Available-for-Sale Securities	$	174	$	9	$	—	$	183

	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities	$	16	$	3	$	—	$	19
Debt Securities	148		5		—		153
Total Rabbi Trust Available-for-Sale Securities	$	164	$	8	$	—	$	172

As of September 30, 2012, amounts in the above table do not include Accounts Receivable of $4 million and Accounts Payable of $5 million for Rabbi Trust Fund transactions which had not yet settled. These amounts are included on the Condensed Consolidated Balance Sheets.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2012		2011		2012		2011
	Millions
Proceeds from Rabbi Trust Sales	$	6	$	—	$	221	$	—
Net Realized Gains (Losses) on Rabbi Trust:
Gross Realized Gains	$	—	$	—	$	6	$	—
Gross Realized Losses	—		—		—		—
Net Realized Gains (Losses) on Rabbi Trust	$	—	$	—	$	6	$	—

Gross realized gains disclosed in the above table were recognized in Other Income in the Condensed Consolidated Statements of Operations. Net unrealized gains of $5 million (after-tax) were recognized in Accumulated Other Comprehensive Loss on the Condensed Consolidated Balance Sheets as of September 30, 2012. The Rabbi Trust available-for-sale debt securities held as of September 30, 2012 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	—
1 - 5 years	58
6 - 10 years	31
11 - 15 years	10
16 - 20 years	5
Over 20 years	59
Total Rabbi Trust Available-for-Sale Debt Securities	$	163

The cost of these securities was determined on the basis of specific identification.

PSEG periodically assesses individual securities whose fair value is less than amortized cost to determine whether the investments are considered to be other-than-temporarily impaired. For equity securities, the Rabbi Trust is invested in a commingled indexed mutual fund. Due to the commingled nature of this fund, PSEG does not have the ability to hold these securities until expected recovery. As a result, any declines in fair market value below cost are recorded as a charge to earnings. For fixed income securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.

The fair value of assets in the Rabbi Trust related to PSEG, Power and PSE&G are detailed as follows:

	As of		As of
	September 30, 2012		December 31, 2011
	Millions
Power	$	36	$	33
PSE&G	61		57
Other	86		82
Total Rabbi Trust Available-for-Sale Securities	$	183	$	172