8-K

UNITED STATES
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 (Date of earliest event reported) September 14, 2006

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

(Exact name of registrant as specified in its charter)

New Jersey	001-09120	22-2625848
(State or other	(Commission File Number)	(I.R.S. Employer
jurisdiction of incorporation)		Identification No.)

80 Park Plaza, P.O. Box 1171
Newark, New Jersey 07101-1171
(Address of principal executive offices) (Zip Code)
973-430-7000
(Registrant’s telephone number, including area code)
http://www.pseg.com

PUBLIC SERVICE ELECTRIC AND GAS COMPANY

(Exact name of registrant as specified in its charter)

New Jersey	001-00973	22-1212800
(State or other	(Commission File Number)	(I.R.S. Employer
jurisdiction of incorporation)		Identification No.)

80 Park Plaza, P.O. Box 570
Newark, New Jersey 07101-0570
(Address of principal executive offices) (Zip Code)
973-430-7000
(Registrant’s telephone number, including area code)
http://www.pseg.com

PSEG POWER LLC

(Exact name of registrant as specified in its charter)

Delaware	000-49614	22-3663480
(State or other	(Commission File Number)	(I.R.S. Employer
jurisdiction of incorporation)		Identification No.)

80 Park Plaza, T-25
Newark, New Jersey 07102-4194
(Address of principal executive offices) (Zip Code)
973-430-7000
(Registrant’s telephone number, including area code)
http://www.pseg.com

PSEG ENERGY HOLDINGS L.L.C.

(Exact name of registrant as specified in its charter)

New Jersey	000-32503	42-1544079
(State or other	(Commission File Number)	(I.R.S. Employer
jurisdiction of incorporation)		Identification No.)

80 Park Plaza, T-20
Newark, New Jersey 07102-4194
(Address of principal executive offices) (Zip Code)
973-430-7000
(Registrant’s telephone number, including area code)
http://www.pseg.com

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

This combined Form 8-K is separately furnished by Public Service Enterprise Group Incorporated (PSEG), Public Service Electric and Gas Company (PSE&G), PSEG Power LLC (Power) and PSEG Energy Holdings L.L.C. (Energy Holdings). Information contained herein relating to any individual company is provided by such company on its own behalf and in connection with its respective Form 8-K. PSE&G, Power and Energy Holdings each makes representations only as to itself and makes no other representations whatsoever as to any other company.

Item 1.02. Termination of a Material Definitive Agreement

On December 20, 2004, PSEG entered into an Agreement and Plan of Merger (Merger Agreement) with Exelon Corporation (Exelon) providing for a merger of PSEG with and into Exelon. The Merger Agreement provided that each share of PSEG common stock would be converted into 1.225 shares of Exelon common stock. The transactions contemplated by the Merger Agreement were approved by the boards of directors and shareholders of PSEG and Exelon. PSEG and Exelon have obtained all regulatory approvals from the principal governmental authorities involved to complete the merger, except the New Jersey Board of Public Utilities.

Under the terms of the Merger Agreement, if the merger was not consummated by June 20, 2006, either party could terminate without financial penalty. On September 14, 2006, PSEG received from Exelon a formal notice of termination under the terms of the Merger Agreement. PSEG and Exelon issued a joint statement regarding the circumstances surrounding the termination, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

PSEG entered into an Operating Services Agreement (OSC) with Exelon, which commenced on January 17, 2005 relating to the operation of the Hope Creek and Salem nuclear generation stations. The OSC is in full force and effect and currently terminates in January 2007. Upon any termination, at the election of PSEG, Exelon shall continue to provide the full complement of personnel and services that were being supplied prior to termination for a transition period of up to three years.

Item 8.01. Other Information

On September 14, 2006, PSEG issued a press release reaffirming its earnings guidance for 2006 and providing preliminary earnings guidance for 2007. A copy of the release is furnished herewith as Exhibit 99.2.

Item 9.01. Financial Statements and Exhibits

Exhibit No.	Description
99.1	Joint Statement of PSEG and Exelon
99.2	Press release relating to PSEG’s 2006 and 2007 earnings guidance

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(Registrant)
By:	/s/ Patricia A. Rado
	Patricia A. Rado
	Vice President and Controller
	(Principal Accounting Officer)

Date: September 14, 2006

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.

PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(Registrant)
By:	/s/ Patricia A. Rado
	Patricia A. Rado
	Vice President and Controller
	(Principal Accounting Officer)

Date: September 14, 2006

4

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.

PSEG POWER LLC (Registrant)
By:	/s/ Patricia A. Rado
	Patricia A. Rado
	Vice President and Controller (Principal Accounting Officer)

Date: September 14, 2006

5

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.

PSEG ENERGY HOLDINGS L.L.C.
(Registrant)
By:	/s/ Patricia A. Rado
	Patricia A. Rado
	Controller
	(Principal Accounting Officer)

Date: September 14, 2006

6

EX-99.1

Exhibit 99.1

News Release

Contacts:

Exelon
Investor Relations: Joyce Carson (312) 394-3441
Media Relations: Jennifer Medley (312) 394-7189

PSEG
Investor Relations: Morton Plawner (973) 430-6474
Media Relations: Paul Rosengren (973) 430-5911

PSEG and Exelon Announce Termination of Proposed Utility Merger

Companies cite insurmountable gaps with New Jersey Board of Public Utilities

CHICAGO and NEWARK, NJ (Sept. 14, 2006) —Public Service Enterprise Group Incorporated (PSEG) and Exelon Corporation announced today that Exelon has given PSEG formal notice of termination of the merger agreement announced December 20, 2004, and the companies have agreed to withdraw their application for merger approval, which has been pending before the New Jersey Board of Public Utilities (NJBPU) for more than 19 months.

The announcement followed a number of discussions with state officials and other interested parties to better understand their respective positions on the proposed merger. The discussions made clear that gaps separating the parties’ respective settlement positions are insurmountable. Major differences included, among other things, issues relating to rate concessions and market power mitigation.

“We are very disappointed that the merger cannot be completed,” said John W. Rowe, Exelon’s chairman, president and CEO. “We wish PSEG and its team all the best. It is a truly first-class organization, and it was a pleasure teaming up with them on a merger that made so much sense.”

“We have spent a lot of time and effort on this transaction because of the value it would have created for the companies and their customers,” said E. James Ferland, chairman, president and CEO of PSEG. “We are equally disappointed but remain committed to continuing our tradition of providing exceptional service to our customers in New Jersey,” Ferland continued. “We appreciate the goodwill, professionalism, and efforts of the Exelon team.”

# # #

Exelon Corporation is one of the nation’s largest electric utilities with approximately 5.2 million customers and more than $15 billion in annual revenues. The company has one of the industry’s largest portfolios of electricity generation capacity, with a nationwide reach and strong positions in the Midwest and Mid-Atlantic.

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Exelon distributes electricity to approximately 5.2 million customers in northern Illinois and Pennsylvania and natural gas to more than 470,000 customers in southeastern Pennsylvania. Exelon is headquartered in Chicago and trades on the NYSE under the ticker EXC.

Public Service Enterprise Group (PSEG) (NYSE:PEG) is a publicly traded diversified energy company with annual revenues of more than $12 billion, and three principal subsidiaries: PSEG Power, one of the largest independent power producers in the U.S.; Public Service Electric and Gas Company (PSE&G), New Jersey’s oldest and largest energy distribution utility company; and, PSEG Energy Holdings, a holding company for other non-regulated energy businesses.

EX-99.2

Exhibit 99.2

News Release

Media Contact:	Paul Rosengren 973-430-5911
Investor Contact:	Mort Plawner 973-430-6474

PSEG CHAIRMAN SAYS STAND-ALONE OUTLOOK FOR PSEG IS STRONG

Ferland Reaffirms 2006 Earnings Guidance of $3.45 to $3.75 Per Share,
Issues Preliminary 2007 Guidance of $4.60 to $5.00 Per Share

(September 14, 2006 — Newark, N.J.) — E. James Ferland, the chairman and CEO of PSEG, said today that, while he was disappointed the plan to merge with Exelon would not be completed, the business outlook for his company is strong.

“The merger would have provided strategic benefits for PSEG and real benefits for New Jersey,” said Ferland. “It is unfortunate that our intense effort to reach a comprehensive settlement with the state’s Board of Public Utilities was not successful. We simply could not achieve agreement on issues ranging from market power mitigation to electric and gas rate concessions.”

Ferland emphasized, however, that PSEG’s current stand-alone business outlook is one of the most positive in the company’s history, given the favorable pricing in energy markets and improvements in the performance of our own Salem and Hope Creek nuclear plants. “In addition, the company took strong steps over the last two years to improve our financial stability and reduce our international exposure,” he said.

Ferland added: “While the combination of PSEG and Exelon would have produced strong results in the years ahead, I want to assure all our important constituents — including investors, customers, vendors, employees, and the communities we serve — that our prospects on a stand-alone basis are bright and our commitment to our constituencies remains as solid as ever.”

Ferland reaffirmed earnings guidance for 2006 of $3.45 to $3.75 per share and projected double-digit growth in the next several years. He provided preliminary earnings guidance for 2007 of $4.60 to $5.00 per share. He said the company would provide more details on this guidance in an investor/media teleconference scheduled for September 20. He added the company is also planning an investor/media conference for later in the year to provide a comprehensive strategic and earnings update for 2007 and beyond. Details about both events will be announced at a later time.

Ferland said the improvements in PSEG’s nuclear facilities reflect the success of the Nuclear Operating Services Agreement with Exelon that was implemented in January, 2005. “Both Salem and Hope Creek are showing gains in the areas of safety and reliability while producing significantly more electricity,” he said. “The operating agreement with Exelon has already reaped tremendous results, and we intend to keep the positive momentum going.”

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The nuclear operating services agreement with Exelon remains in effect through January 17, 2007. PSEG has options to renew the agreement for up to three years. “We plan to keep the Exelon team in place while we evaluate our strategic options for our nuclear facilities in the future,” Ferland added.

Ferland said PSE&G, the utility business, would continue seeking much-needed rate relief in its gas and electric delivery base rate cases currently pending before the New Jersey Board of Public Utilities (BPU).

“We have a reputation for having a cooperative and effective relationship with state regulators,” Ferland emphasized. “We will work with the BPU to resolve these cases as reasonably and as quickly as possible. This rate relief will allow us to continue to invest in our gas and electric infrastructure to assure our customers safe and reliable service.”

Ferland also thanked PSEG’s 9,500 employees for their hard work on the merger and for keeping a focus on safety and quality during a prolonged period of uncertainty. “Our employees are the reason this company faces the future in great shape. Despite conditions that were far from ideal, they stayed focused on the basics and strengthened the long-term prospects of the company.”

Public Service Enterprise Group (PSEG) (NYSE:PEG) is a publicly traded diversified energy company with annual revenues of more than $12 billion, and three principal subsidiaries: PSEG Power, one of the largest independent power producers in the U.S.; Public Service Electric and Gas Company (PSE&G), New Jersey’s oldest and largest energy distribution utility company; and, PSEG Energy Holdings, a holding company for other non-regulated energy businesses.

Forward-Looking Statement
Readers are cautioned that statements contained in this press release about our and our subsidiaries’ future performance, including future revenues, earnings, strategies, prospects and all other statements that are not purely historical, are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance they will be achieved. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the effects of weather; the performance of generating units and transmission systems; the availability and prices for oil, gas, coal, nuclear fuel, capacity and electricity; changes in the markets for electricity and other energy-related commodities; changes in the number of participants and the risk profile of such participants in the energy marketing and trading business; the effectiveness of our risk management and internal controls systems; the effects of regulatory decisions and changes in law; changes in competition in the markets we serve; the ability to recover regulatory assets and other potential stranded costs; the outcomes of litigation and regulatory proceedings or inquiries; the timing and success of efforts to develop domestic and international power projects; conditions of the capital markets and equity markets; advances in technology; changes in accounting standards; changes in interest rates and in financial and foreign currency markets generally; the economic and political climate and growth in the areas in which we conduct our activities; and changes in corporate strategies. For further information, please refer to our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. These documents address in further detail our business, industry issues and other factors that could cause actual results to differ materially from those indicated in this release. In addition, any forward-looking statements included herein represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if our estimates change, unless otherwise required by applicable securities laws.

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