424B5 1 e44839_424b5.htm PRICING SUPPLEMENT

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities Offered

Maximum Aggregate Offering Price

Amount of Registration Fee(1)

0.850% Secured Medium-Term Notes, Series G, due August 15, 2014

$250,000,000

$29,025


(1)

The filing fee of $29,025 is calculated in accordance with Rule 457(r) under the Securities Act of 1933 and relates to the Registration Statement on Form S-3 (No. 333-155732) filed by Public Service Electric and Gas Company on November 26, 2008.



Filed pursuant to Rule 424(b)(5)
Registration Statement No. 333-155732

Pricing Supplement dated August 10, 2011
(To Prospectus Supplement dated November 18, 2009
and Prospectus dated November 26, 2008)

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


CUSIP: 74456QAY2 Maturity Date: August 15, 2014
Trade Date: August 10, 2011 These Notes are DTC Eligible and will be issued in
Original Issue Date/Settlement Date: August 16, 2011,    book-entry form
   which is the fourth business day following the Trade Mode of Distribution: [X] Underwritten [   ] Agented
   Date. Accordingly, purchasers who wish to trade the    [   ] Barclays Capital Inc.
   Notes on the date hereof will be required, because the    [   ] BNP Paribas Securities Corp.
   Notes will not initially settle in T+3, to specify an    [   ] CastleOak Securities, L.P.
   alternative settlement date at the time of such trade to    [   ] Citigroup Global Markets Inc.
   prevent a failed settlement and should consult their own    [   ] Deutsche Bank Securities Inc.
   advisors.    [   ] Goldman, Sachs & Co.
Principal Amount: $250,000,000    [X] J.P. Morgan Securities LLC ($117,500,000)
Price to Public: 99.941% of Principal Amount, plus    [   ] Merrill Lynch, Pierce, Fenner & Smith
                               Incorporated
   accrued interest from August 16, 2011 if settlement    [   ] Mitsubishi UFJ Securities (USA), Inc.
   occurs after that date    [   ] Mizuho Securities USA Inc.
Purchase Price: 99.591% of Principal Amount     [   ] Morgan Stanley & Co. LLC
Net Proceeds to Company: $248,977,500    [X] RBS Securities Inc. ($117,500,000)
Interest Rate: 0.850% per annum    [   ] Scotia Capital (USA) Inc.
Interest Accrual Date: August 16, 2011    [X] Toussaint Capital Partners, LLC ($15,000,000)
Interest Payment Dates: February 15 and August 15,    [   ] Wells Fargo Securities, LLC
   commencing February 15, 2012    [   ] The Williams Capital Group, L.P.
Regular Record Dates: February 1 and August 1  

Redemption Provisions:

     The Secured Medium-Term Notes, Series G 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 10 basis points (0.10%), 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 a 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 for general corporate purposes.