Pricing Supplement dated September 12, 2002     Filed Pursuant to Rule 424(b)(3)
(To Prospectus Supplement and Prospectus             Registration Nos. 333-98617
dated September 12, 2002)                                          and 333-44991

                 PUBLIC SERVICE ELECTRIC AND GAS COMPANY (PSE&G)
                      Secured Medium-Term Notes, Series B

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  CUSIP: 74456QAJ5
  Trade Date: September 12, 2012
  Original Issue Date: September 17, 2002
  Principal Amount: $300,000,000
  Price to Public: 99.61% of Principal Amount
  Net Proceeds to Company: $297,030,000
  Agents' Commission: $1,800,000
  Interest Rate: 5.125% per annum
  Interest Accrual Date: September 17, 2002
  Interest Payment Dates: March 1 and September 1,
    commencing March 1, 2003
  Maturity Date: September 1, 2012

  These Notes are DTC Eligible and will be issued in
     Book-entry form

  Agents:
  [X] Banc of America Securities LLC
  [X] Banc One Capital Markets, Inc.
  [ ] BNY Capital Markets, Inc.
  [ ] Credit Lyonnais Securities (USA) Inc.
  [X] Credit Suisse First Boston
  [ ] The Williams Capital Group, L.P.

  Agents' Capacity: Agent of PSE&G

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Redemption Provisions:

      The Secured  Medium-Term  Notes,  Series B offered  hereby  (the  "Secured
Medium-Term Notes") will be subject to redemption as described in the prospectus
and prospectus supplement.

      Additionally,  the Secured Medium-Term Notes will be subject to redemption
at any time  prior to  maturity  on not less  than 30 days,  written  notice  to
holders,  either as a whole or in part, at the option of PSE&G,  at a redemption
price  equal to the greater of (i) 100% of the  principal  amount of the Secured
Medium-Term  Notes, to be redeemed and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
redemption  date on a semi-annual  basis  (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 20 basis points, plus, in either
case, accrued interest thereon to the date of redemption.

      "Treasury Rate" means,  with respect to any redemption  date, the rate per
annum equal to the  semi-annual  equivalent  yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
percentage of its principal  amount) equal to the Comparable  Treasury Price for
such redemption date.

      "Comparable  Treasury  Issue" means the United  States  Treasury  security
selected by an Independent  Investment Banker as having a maturity comparable to
the remaining term of the Secured Medium-Term Notes to be redeemed that would be
utilized,  at the time of selection and in accordance  with customary  financial
practice,  in pricing new issues of  corporate  debt  securities  of  comparable
maturity to the remaining term of the Secured Medium-Term Notes to be redeemed.

      "Comparable  Treasury Price" means,  with respect to any redemption  date,
(i)  the  average  of  three  Reference  Treasury  Dealer  Quotations  for  such
redemption  date,  after  excluding  the  highest  and lowest of five  Reference
Treasury  Dealer  Quotations,  or (ii) if the  Trustee is unable to obtain  five
Reference  Treasury  Dealer  Quotations,  the average of all Reference  Treasury
Dealer Quotations so obtained.

      "Independent  Investment  Banker"  means  one  of the  Reference  Treasury
Dealers appointed by PSE&G and acceptable to the Trustee.

      "Reference  Treasury  Dealer" means a primary U.S.  Government  Securities
Dealer in New York City (a  "Primary  Treasury  Dealer")  selected  by PSE&G and
acceptable to the Trustee.

      "Reference  Treasury  Dealer  Quotations"  means,  with  respect  to  each
Reference Treasury Dealer and any redemption date, the average, as determined by
the  Trustee,  of the bid and asked  prices for the  Comparable  Treasury  Issue
(expressed,  in each case, as a percentage of its  principal  amount)  quoted in
writing to the Trustee by such Reference Treasury Dealer at or before 5:00 p.m.,
New York City time, on the third business day preceding such redemption date.