Pricing Supplement dated December 13, 2006
(To Prospectus Supplement dated August 16, 2004
  and Prospectus dated June 21, 2004)

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



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CUSIP: 74456QAQ9                           These Notes are DTC Eligible and
Trade Date: December 13, 2006              will be issued in Book-entry form
Original Issue Date: December 18, 2006
Principal Amount: $250,000,000             Agents:
Price to Public: 99.576% of Principal      [ ] Banc of America Securities LLC
  Amount, plus accrued interest from the   [X] Barclays Capital Inc. ($55,000,000)
  Original Issue Date if settlement        [X] BNP Paribas Securities Corp. ($55,000,000)
  occurs after that date                   [X] Citigroup Global Markets Inc. ($55,000,000)
Agents' Commission: $1,875,000             [ ] Deutsche Bank Securities Inc.
Net Proceeds to Company: $247,065,000      [ ] Jackson Securities, LLC
Interest Rate: 5.70% per annum             [ ] J.P. Morgan Securities Inc.
Interest Accrual Date: December 18, 2006   [ ] M.R. Beal & Company
Interest Payment Dates: June 1 and         [X] Scotia Capital (USA) Inc. ($55,000,000)
  December 1, commencing June 1, 2007      [X] Toussaint Capital Partners, LLC ($15,000,000)
Regular Record Dates: May 15 and           [ ] UBS Securities LLC
  November 15                              [X] The Williams Capital Group, L.P. ($15,000,000)
Maturity Date: December 1, 2036            Agents' Capacity: Agent of PSE&G
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Redemption Provisions:

      The Secured  Medium-Term  Notes,  Series D 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 the  Maturity  Date on not less than 30 days prior  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 (exclusive
of accrued interest to the redemption date) 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 the United States (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.

Use of Proceeds:

      The net proceeds  from the sale of the Secured  Medium-Term  Notes will be
added to the  general  funds of PSE&G and will be used to reduce its  short-term
debt consisting of commercial paper.