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) February 18, 2010

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

(Exact name of registrant as specified in its charter)

New Jersey	001-09120	22-2625848
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer 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

PSEG POWER LLC

(Exact name of registrant as specified in its charter)

Delaware	001-34232	22-3663480
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer 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

PUBLIC SERVICE ELECTRIC AND GAS COMPANY

(Exact name of registrant as specified in its charter)

New Jersey	001-00973	22-1212800
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer 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

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):

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

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

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

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

The information contained in Item 2.02. Results of Operations and Financial Condition in this Form 8-K is furnished solely for Public Service Enterprise Group Incorporated (PSEG). The information contained in Item 7.01 Regulation FD Disclosure in this combined Form 8-K is separately furnished, as noted, by PSEG, PSEG Power LLC (Power) and Public Service Electric and Gas Company (PSE&G). 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. Power and PSE&G each makes representations only as to itself and makes no other representations whatsoever as to any other company.

Item 2.02 Results of Operations and Financial Condition

PSEG

On February 18, 2010 PSEG announced unaudited financial results for the quarter and year ended December 31, 2009. A copy of the earnings release dated February 18, 2010 is furnished as Exhibit 99 to this Form 8-K.

Item 7.01 Regulation FD Disclosure

PSEG, Power and PSE&G

On February 18, 2010, PSEG conducted an earnings call regarding its 2009 fourth quarter and annual results. A copy of the slideshow presentation used during the earnings call is furnished as Exhibit 99.1 to this Form 8-K.

Item 9.01 Financial Statements and Exhibits

Exhibit 99	Press Release dated February 18, 2010 announcing 2009 fourth quarter and annual results.
Exhibit 99.1	Slideshow Presentation

2

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/    DEREK M. DIRISIO
	Derek M. DiRisio
	Vice President and Controller
	(Principal Accounting Officer)

Date: February 18, 2010

3

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/    DEREK M. DIRISIO
	Derek M. DiRisio
	Vice President and Controller
	(Principal Accounting Officer)

Date: February 18, 2010

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.

PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(Registrant)
By:	/s/    DEREK M. DIRISIO
	Derek M. DiRisio
	Vice President and Controller
	(Principal Accounting Officer)

Date: February 18, 2010

5

EX-99

Exhibit 99

  Investor News   NYSE:PEG  

For further information, contact:
•   Kathleen A. Lally, Vice President – Investor Relations	Phone: 973-430-6565
•   Greg McLaughlin, Sr. Investor Relations Analyst	Phone: 973-430-6568
•   Yaeni Kim, Sr. Investor Relations Analyst	Phone: 973-430-6596

PSEG ANNOUNCES 2009 RESULTS

$3.14 PER SHARE FROM CONTINUING OPERATIONS

$3.12 PER SHARE OF OPERATING EARNINGS

Results Benefit From Strong Operating Performance

Company Provides 2010 Earnings Guidance of $3.00-$3.25

(February 18, 2010) – Public Service Enterprise Group (PSEG) reported Income from Continuing Operations and Net Income for 2009 of $1,592 million or $3.14 per share as compared to $983 million or $1.93 per share for 2008. Including Income from Discontinued Operations ($0.41 per share), PSEG reported Net Income for 2008 of $1,188 million or $2.34 per share. Operating Earnings for 2009 were $1,579 million or $3.12 per share compared to 2008 Operating Earnings of $1,542 million or $3.03 per share.

PSEG also reported Income from Continuing Operations for the fourth quarter of 2009 of $349 million, or $0.69 per share. This compares to fourth quarter 2008 results of $237 million, or $0.46 per share. Operating Earnings for the fourth quarter of 2009 were $315 million, or $0.62 per share compared to fourth quarter 2008 Operating Earnings of $313 million, or $0.62 per share.

PSEG believes that the non-GAAP financial measure of “Operating Earnings” provides a consistent and comparable measure of performance of its businesses to help shareholders understand performance trends. Operating Earnings exclude the impact of returns/(losses) associated with Nuclear Decommissioning Trust (NDT) investments and Mark-To-Market accounting as well as the impact of the sale and/or impairment of certain non-core assets and other one-time items not related to ongoing operations. The table below provides a reconciliation of PSEG’s Net Income to Operating Earnings (a non-GAAP measure) for the full year and fourth quarter. See Attachment 12 for a complete list of items excluded from Income from Continuing Operations in the determination of Operating Earnings.

PSEG CONSOLIDATED EARNINGS (unaudited)

Full-Year Comparative Results

2009 and 2008

	Income ($millions)						Diluted Earnings Per Share
	2009			2008			2009			2008
Net Income	$	1,592		$	1,188		$	3.14		$	2.34
Less: Income from Discontinued Ops		—			(205	)		—			(0.41	)
Income From Continuing Ops	$	1,592		$	983		$	3.14		$	1.93
Reconciling Items: Lease Reserves		(29	)		490			(0.05	)		0.96
Other Items		16			69			0.03			0.14
Operating Earnings (Non-GAAP)	$	1,579		$	1,542		$	3.12		$	3.03
					Avg. Shares			507M			508M

PSEG CONSOLIDATED EARNINGS (unaudited)

Fourth Quarter Comparative Results

2009 and 2008

	Income ($millions)					Diluted Earnings Per Share
	2009			2008		2009			2008
Net Income	$	349		$	234	$	0.69		$	0.46
Less: Loss from Discontinued Ops		—			3		—			—
Income From Continuing Ops	$	349		$	237	$	0.69		$	0.46
Reconciling Items: Lease Reserves		(29	)				(0.05	)
Other Items		(5	)		76		(0.02	)		0.16
Operating Earnings (Non-GAAP)	$	315		$	313	$	0.62		$	0.62
					Avg. Shares		507M			507M

“I am pleased by PSEG’s operating results” said Ralph Izzo, chairman, president and chief executive officer of PSEG. “PSEG reported strong earnings in the face of very challenging market conditions. Clearly, our 2009 results demonstrate the importance of a balanced portfolio of assets. The dispatch flexibility of our PJM portfolio of generating assets was ably demonstrated over the past year. The credit, however, belongs to our employees. Their commitment to our shared goal of operational excellence, and their responsiveness to a call to control costs was a major contributor to our earnings.”

Operating Earnings by subsidiary for 2009 is as follows:

2009 and 2008 Operating Earnings

($ millions)

	2009A		2008A
PSEG Power	$	1,205	$	1,170
PSE&G		321		360
PSEG Energy Holdings		43		36
PSEG Parent		10		(24	)
Operating Earnings	$	1,579	$	1,542
Earnings Per Share	$	3.12	$	3.03

2010 Earnings Guidance

Izzo indicated that PSEG was providing operating earnings guidance for 2010 of $3.00-$3.25 per share. “Although economic conditions remain challenging, cost reduction programs implemented throughout the organization—including support from our union membership—should help us achieve our earnings objectives.”

Izzo added “2009 represented a year of significant achievement for PSEG. We hope to build on this record by meeting our customer needs for safe, reliable, clean and economic energy as we also meet the needs of our shareholders for reasonable returns. This will be accomplished largely by increasing our capital investment in our energy infrastructure.”

Operating Earnings Review and Outlook by Operating Subsidiary

See Attachments 6 and 7 for detail regarding the quarter-over-quarter and year-over-year earnings reconciliations for each of PSEG’s businesses.

PSEG Power

PSEG Power reported operating earnings of $242 million ($0.47 per share) for the fourth quarter of 2009 bringing full year operating earnings to $1,205 million ($2.38 per share), a record year for Power. On a comparative basis, PSEG Power reported operating earnings of $246 million ($0.49 per share) and $1,170 million ($2.30 per share) for the fourth quarter and full year 2008 respectively. Power’s operating results include the contribution from the 2,000 MW of gas-fired assets in Texas transferred from Holdings to Power.

PSEG Power’s results in the fourth quarter of 2009 were affected by weak power prices which more than offset an 8% increase in generation and lower fuel costs. A decline in margin was experienced in the Texas ($0.02 per share) and New York/New England ($0.02 per share) markets. Earnings from the PJM assets increased $0.02 per share benefiting from higher hedge related prices and a 2% increase in nuclear generation which together more than offset a decline in BGS related volumes. Earnings comparisons were also hurt by an increase in O&M, and other miscellaneous items ($0.03 per share). An anticipated reversal of $0.01 per share of trading related losses recognized earlier in the year coupled with gains on contracts entered into during the fourth quarter increased earnings ($0.03 per share).

Power’s Nuclear and Combined Cycle fleets experienced record levels of output. Output from the combined cycle fleet (including Texas) increased 29.8% in the quarter. The nuclear fleet operated at a 92% capacity factor in the quarter (versus 91.3%) bringing the capacity factor for the full year to 93.4%. Generation from Power’s NJ coal units increased during the fourth quarter as an increase in the cost of gas relative to coal improved the economic dispatch of these units.

PSE&G

PSE&G reported operating earnings of $68 million ($0.13 per share) for the fourth quarter compared with operating earnings of $76 million ($0.15 per share) for the fourth quarter of 2008. The results for the fourth quarter brought PSE&G’s operating earnings for 2009 to $321 million ($0.63 per share) as compared with 2008 results of $360 million ($0.71 per share).

Gas margins declined in the fourth quarter by $0.01 per share. The results were affected by warmer than normal weather in this year’s fourth quarter compared with colder than normal weather experienced in the prior year. The reduction in gas margin was offset by an increase in transmission rates and higher appliance service margin which together added $0.01 per share to earnings. Earnings comparisons were hurt by an increase in pension expense which more than offset a reduction in other operation and maintenance costs and a lower tax rate. These items combined to reduce PSE&G’s fourth quarter earnings by $0.02 per share.

Electric and gas demand in 2009 have been heavily influenced by the weather and weak economic conditions. A 3.2% decline in weather-normalized electric demand in the fourth quarter resulted in a 2.5% decline in electric demand for the full year. Demand from residential customers declined 0.8% for the quarter resulting in a 0.9% decline in weather normalized demand for the year. Gas demand (weather normalized) increased 1.1% in the fourth quarter resulting in a decline of 0.7% for the full year.

The New Jersey Board of Public Utilities (BPU) approved construction of the $750 million Susquehanna to Roseland transmission line on February 11, 2010. The BPU’s decision represents a critical milestone in the regulatory approval process.

PSE&G updated its filing with the BPU for an increase in electric ($148 million) and gas ($74 million) revenues. This updated request reflects actual results for the 12 months ended December 31, 2009 as part of the 2009 test year. The update represents an increase in electric ($14 million) revenues and a reduction in gas ($23 million) revenues over the May 2009 rate filing. PSE&G’s request is based on an 11.25% return on equity. PSE&G’s 2009 operating earnings represented an earned return on equity of 8.3%.

PSEG Energy Holdings

PSEG Energy Holdings reported operating earnings for the fourth quarter of 2009 of $12 million ($0.03 per share) compared to operating earnings of $1 million for the fourth quarter of 2008. The results for the fourth quarter brought Energy Holdings’ full year 2009 operating earnings to $43 million ($0.09 per share) as compared with 2008’s operating earnings of $36 million ($0.07 per share). The results for the quarter and the full year reflect the transfer of the Texas generating assets to PSEG Power on October 1, 2009.

Earnings comparisons were aided by the recognition of gains on the successful termination of two cross-border leveraged leases in the quarter ($0.02 per share). Results also benefited from a reduction in operation and maintenance expenses and lower interest expense ($0.02 per share) which more than offset a reduction in the value of the Company’s remaining International asset ($0.01 per share) which reduced the investment to a modest level.

The termination of two leases in the fourth quarter of 2009 brought the number of leases terminated in 2009 to 12; our activity reduced our cash tax potential liability by $670 million to around $660 million. The activity over the past year leaves us with an investment in five cross-border leveraged leases at year-end.

During the fourth quarter, we reduced our reserve for our cross-border leveraged leases by $29 million based on a reassessment of risk following the outcome of a court case with similar facts to ours. The gain is reflected in earnings from continuing operations.

Summary

PSEG realized operating earnings of $3.12 per share in 2009, a 3% improvement over 2008 operating earnings of $3.03 per share. We have initiated operating earnings guidance for 2010 at $3.00 - $3.25 per share.

######

FORWARD-LOOKING STATEMENT

Readers are cautioned that statements contained in this presentation 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, but are not limited to:

• Adverse changes in energy industry, law, policies and regulation, including market structures and rules, and reliability standards.

• Any inability of our transmission and distribution businesses to obtain adequate and timely rate relief and regulatory approvals from federal and state regulators.

• Changes in federal and state environmental regulations that could increase our costs or limit operations of our generating units.

• Changes in nuclear regulation and/or developments in the nuclear power industry generally, that could limit operations of our nuclear generating units.

• Actions or activities at one of our nuclear units located on a multi-unit site that might adversely affect our ability to continue to operate that unit or other units at the same site.

• Any inability to balance our energy obligations, available supply and trading risks.

• Any deterioration in our credit quality.

• Availability of capital and credit at commercially reasonable terms and our ability to meet cash needs.

• Any inability to realize anticipated tax benefits or retain tax credits.

• Changes in the cost of or interruption in the supply of fuel and other commodities necessary to the operation of our generating units.

• Delays or unforeseen cost escalations in our construction and development activities.

• Adverse performance of our decommissioning and defined benefit plan trust fund investments, and changes in discount rates and funding requirements.

• Changes in technology and increased customer conservation.

For further information, please refer to our Annual Report on Form 10-K, including Item 1A. Risk Factors, 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 presentation. 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 internal estimates change, unless otherwise required by applicable securities laws.

Attachment 1

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Operating Earnings and Per Share Results by Subsidiary

(Unaudited)

	For the Quarters Ended December 31,						For the Twelve Months Ended December 31,
	2009			2008			2009		2008
Earnings Results ($ Millions)
PSEG Power	$	242		$	246		$	1,205	$	1,170
PSE&G		68			76			321		360
PSEG Energy Holdings		12			1			43		36
PSEG		(7	)		(10	)		10		(24	)
Operating Earnings	$	315		$	313		$	1,579	$	1,542
Reconciling Items(a)		34			(76	)		13		(559	)
Income from Continuing Operations	$	349		$	237		$	1,592	$	983
Discontinued Operations		—			(3	)		—		205
Net Income	$	349		$	234		$	1,592	$	1,188
Fully Diluted Average Shares Outstanding (in Millions)		507			507			507		508
Per Share Results (Diluted)
PSEG Power	$	0.47		$	0.49		$	2.38	$	2.30
PSE&G		0.13			0.15			0.63		0.71
PSEG Energy Holdings		0.03			—			0.09		0.07
PSEG		(0.01	)		(0.02	)		0.02		(0.05	)
Operating Earnings	$	0.62		$	0.62		$	3.12	$	3.03
Reconciling Items(a)		0.07			(0.16	)		0.02		(1.10	)
Income from Continuing Operations	$	0.69		$	0.46		$	3.14	$	1.93
Discontinued Operations		—			—			—		0.41
Net Income	$	0.69		$	0.46		$	3.14	$	2.34

(a) See attachment 12 for details of items excluded from Continuing Operations to compute Operating Earnings.

Note 1:

Income from Continuing Operations includes preferred stock dividends relating to PSE&G of $1 million for the quarters ended December 31, 2009 and 2008 and $4 million for the twelve months ended December 31, 2009 and 2008.

Attachment 2

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidating Statements of Operations

(Unaudited, $ Millions)

	For the Quarter Ended December 31, 2009
	PSEG			OTHER (a)			PSEG POWER			PSE&G			PSEG ENERGY HOLDINGS
OPERATING REVENUES	$	2,886		$	(813	)	$	1,752		$	1,922		$	25
OPERATING EXPENSES
Energy Costs		1,335			(813	)		983			1,165			—
Operation and Maintenance		681			(7	)		294			384			10
Depreciation and Amortization		204			4			51			146			3
Taxes Other Than Income Taxes		33			—			—			33			—
Total Operating Expenses		2,253			(816	)		1,328			1,728			13
OPERATING INCOME		633			3			424			194			12
Income from & Impairment on Equity Method Investments		—			—			—			—			—
Other Income and Deductions		(1	)		(17	)		14			—			2
Interest Expense		(120	)		—			(42	)		(76	)		(2	)
Preferred Stock Dividends		—			1			—			(1	)		—
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (b)		512			(13	)		396			117			12
Income Tax Expense		(163	)		6			(149	)		(49	)		29
NET INCOME (LOSS)		349		$	(7	)	$	247		$	68		$	41
Reconciling Items Excluded from Continuing Operations (c):		34			—			5			—			29
OPERATING EARNINGS (LOSS)	$	315		$	(7	)	$	242		$	68		$	12

	For the Quarter Ended December 31, 2008
	PSEG			OTHER (a)			PSEG POWER			PSE&G			PSEG ENERGY HOLDINGS
OPERATING REVENUES	$	3,262		$	(1,065	)	$	2,008		$	2,288		$	31
OPERATING EXPENSES
Energy Costs		1,743			(1,066	)		1,264			1,545			—
Operation and Maintenance		630			(8	)		281			345			12
Depreciation and Amortization		195			6			47			140			2
Taxes Other Than Income Taxes		35			—			—			35			—
Total Operating Expenses		2,603			(1,068	)		1,592			2,065			14
OPERATING INCOME		659			3			416			223			17
Income from & Impairment on Equity Method Investments		(16	)		—			—			—			(16	)
Other Income and Deductions		(29	)		(21	)		(20	)		2			10
Other Than Temporary Impairments		(85	)		(1	)		(84	)		—			—
Interest Expense		(146	)		(1	)		(49	)		(81	)		(15	)
Preferred Stock Dividends		—			1			—			(1	)		—
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (b)		383			(19	)		263			143			(4	)
Income Tax Expense		(146	)		9			(80	)		(67	)		(8	)
INCOME (LOSS) FROM CONTINUING OPERATIONS		237			(10	)		183			76			(12	)
Discontinued Operations, net of tax		(3	)		—			—			—			(3	)
NET INCOME (LOSS)	$	234		$	(10	)	$	183		$	76		$	(15	)
Reconciling Items Excluded from Continuing Operations (c):		(76	)		—			(63	)		—			(13	)
OPERATING EARNINGS (LOSS)	$	313		$	(10	)	$	246		$	76		$	1

(a) Primarily includes financing activities and donations at the parent and intercompany eliminations.

(b) Income from Continuing Operations before Income Taxes includes preferred stock dividends relating to PSE&G of $1 million for the quarters ended December 31, 2009 and 2008.

(c) See attachment 12 for details of items excluded from Continuing Operations to compute Operating Earnings.

Attachment 3

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidating Statements of Operations

(Unaudited, $ Millions)

	For the Twelve Months Ended December 31, 2009
	PSEG			OTHER (a)			PSEG POWER			PSE&G			PSEG ENERGY HOLDINGS
OPERATING REVENUES	$	12,406		$	(3,201	)	$	7,143		$	8,243		$	221
OPERATING EXPENSES
Energy Costs		5,711			(3,199	)		3,740			5,170			—
Operation and Maintenance		2,603			(32	)		1,114			1,474			47
Depreciation and Amortization		838			16			203			608			11
Taxes Other Than Income Taxes		133			—			—			133			—
Total Operating Expenses		9,285			(3,215	)		5,057			7,385			58
OPERATING INCOME		3,121			14			2,086			858			163
Income from & Impairment on Equity Method Investments		17			—			—			—			17
Other Income and Deductions		86			8			99			5			(26	)
Other Than Temporary Impairments		(61	)		(1	)		(60	)		—			—
Interest Expense		(527	)		(11	)		(167	)		(312	)		(37	)
Preferred Stock Dividends		—			4			—			(4	)		—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (b)		2,636			14			1,958			547			117
Income Tax Expense		(1,044	)		(4	)		(769	)		(226	)		(45	)
NET INCOME	$	1,592		$	10		$	1,189		$	321		$	72
Reconciling Items Excluded from Continuing Operations (c):		13			—			(16	)		—			29
OPERATING EARNINGS	$	1,579		$	10		$	1,205		$	321		$	43

	For the Twelve Months Ended December 31, 2008
	PSEG			OTHER (a)			PSEG POWER			PSE&G			PSEG ENERGY HOLDINGS
OPERATING REVENUES	$	13,322		$	(3,831	)	$	8,483		$	9,038		$	(368	)
OPERATING EXPENSES
Energy Costs		7,295			(3,828	)		5,051			6,072			—
Operation and Maintenance		2,486			(35	)		1,126			1,338			57
Depreciation and Amortization		792			17			181			583			11
Taxes Other Than Income Taxes		136			—			—			136			—
Total Operating Expenses		10,709			(3,846	)		6,358			8,129			68
OPERATING INCOME		2,613			15			2,125			909			(436	)
Income from & Impairment on Equity Method Investments		10			—			—			—			10
Other Income and Deductions		100			(32	)		100			8			24
Other Than Temporary Impairments		(220	)		(1	)		(219	)		—			—
Interest Expense		(594	)		(20	)		(192	)		(325	)		(57	)
Preferred Stock Dividends		—			4			—			(4	)		—
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (b)		1,909			(34	)		1,814			588			(459	)
Income Tax (Expense) Benefit		(926	)		10			(699	)		(228	)		(9	)
INCOME (LOSS) FROM CONTINUING OPERATIONS		983			(24	)		1,115			360			(468	)
Discontinued Operations, net of tax		205			—			—			—			205
NET INCOME (LOSS)	$	1,188		$	(24	)	$	1,115		$	360		$	(263	)
Reconciling Items Excluded from Continuing Operations (c):		(559	)		—			(55	)		—			(504	)
OPERATING EARNINGS (LOSS)	$	1,542		$	(24	)	$	1,170		$	360		$	36

(a) Primarily includes financing activities and donations at the parent and intercompany eliminations.

(b) Income from Continuing Operations before Income Taxes includes preferred stock dividends relating to PSE&G of $4 million for the twelve months ended December 31, 2009 and 2008.

(c) See attachment 12 for details of items excluded from Continuing Operations to compute Operating Earnings.

Attachment 4

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Capitalization Schedule

(Unaudited, $ Millions)

	December 31, 2009			December 31, 2008
DEBT
Commercial Paper and Loans	$	530		$	19
Long-Term Debt (a)		6,781			7,180
Securitization Debt (a)		1,343			1,530
Project Level, Non-Recourse Debt (a)		42			328
Total Debt		8,696			9,057
SUBSIDIARY’S PREFERRED STOCK
WITHOUT MANDATORY REDEMPTION		80			80
STOCKHOLDERS’ EQUITY
Common Stock		4,788			4,756
Treasury Stock		(588	)		(581	)
Retained Earnings		4,704			3,773
Accumulated Other Comprehensive Loss		(116	)		(177	)
Total Common Stockholders’ Equity		8,788			7,771
Noncontrolling Interests		10			11
Total Equity		8,798			7,782
Total Capitalization	$	17,574		$	16,919
Debt to Capitalization Ratios pursuant to PSEG’s credit agreements		45.1	%		47.9	%

(a) Includes amounts due within one year

Note 1:

PSEG’s credit agreements contain covenants that require PSEG’s debt to capitalization ratio not to exceed 70.0% at any time.

This ratio is presented for the benefit of the investors of the related securities to which the covenants apply; it is not intended as a

financial performance or liquidity measure.

2009

The ratio as calculated pursuant to these covenants includes capital lease obligations ($39 million) and certain other obligations such as guarantees and letters of credit ($116 million), excluding any letters of credit related to collateral posting on energy/commodity contracts. The calculation excludes non-recourse project debt ($42 million), securitization debt ($1.343 billion), the equity reduction ($400 million) from the funded status of the pension and benefit plans associated with generally accepted accounting principles (GAAP) related to “Employers’ Accounting for Defined Pension and Other Post-Retirement Plans” and the Accumulated Other Comprehensive Income, $180 million, related to the mark-to-market of energy contracts.

2008

The ratio as calculated pursuant to these covenants includes capital lease obligations ($43 million) and certain other obligations such as guarantees and letters of credit ($148 million), excluding any letters of credit related to collateral posting on energy/commodity contracts. The calculation excludes non-recourse project debt ($328 million), securitization debt ($1.530 billion),

the equity reduction ($367 million) from the funded status of the pension and benefit plans associated with GAAP related to “Employers’ Accounting for Defined Pension and Other Post-Retirement Plans” and the Accumulated Other Comprehensive Income, $176 million, related to the mark-to-market of energy contracts.

Attachment 5

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, $ Millions)

	For the Twelve Months Ended December 31,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	1,592		$	1,188
Adjustments to Reconcile Net Income to Net Cash Flows From Operating Activities
Lease Transaction Reserves, net of tax		(29	)		490
Other		292			667
NET CASH PROVIDED BY OPERATING ACTIVITIES		1,855			2,345
NET CASH USED IN INVESTING ACTIVITIES		(792	)		(775	)
NET CASH USED IN FINANCING ACTIVITIES		(1,034	)		(1,629	)
Net Increase (Decrease) in Cash and Cash Equivalents		29			(59	)
Cash and Cash Equivalents at Beginning of Period		321			380
Cash and Cash Equivalents at End of Period	$	350		$	321

Attachment 6

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Quarter-to-Quarter EPS Reconciliation

December 31, 2009 vs. December 31, 2008

(Unaudited)

PSEG 4th Quarter 2008 Net Income						$	0.46
PSEG 4th Quarter 2008 Income from Continuing Operations						$	0.46
Reconciling Items (a)							(0.16	)
PSEG 4th Quarter 2008 Operating Earnings						$	0.62
							B/(W)
PSEG Power
4th Quarter 2008			$	0.49
Lower Pricing offset by Lower Fuel Expense	(0.02	)
BGSS and Wholesale Power Trading	0.03
Margin				0.01
O&M				(0.01	)
Misc.				(0.02	)
4th Quarter 2009			$	0.47		$	(0.02	)
PSE&G
4th Quarter 2008			$	0.15
Weather				(0.01	)
Transmission and Appliance Service				0.01
O&M				(0.03	)
Taxes and Misc.				0.01
4th Quarter 2009			$	0.13		$	(0.02	)
PSEG Energy Holdings
4th Quarter 2008			$	—
2009 Lease Sales				0.02
O&M, Interest and Other				0.01
4th Quarter 2009			$	0.03		$	0.03
Public Service Enterprise Group
4th Quarter 2008			$	(0.02	)
Interest				0.01
4th Quarter 2009			$	(0.01	)	$	0.01
PSEG 4th Quarter 2009 Operating Earnings						$	0.62
Reconciling Items (a)							0.07
PSEG 4th Quarter 2009 Income from Continuing Operations						$	0.69
Discontinued Operations							—
PSEG 4th Quarter 2009 Net Income						$	0.69

(a) See attachment 12 for details of items excluded from Continuing Operations to compute Operating Earnings.

Attachment 7

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Year to Date EPS Reconciliation

December 31, 2009 vs. December 31, 2008

(Unaudited)

PSEG Net Income for the Twelve Months Ended December 31, 2008					$	2.34
Discontinued Operations (SAESA and Bioenergie)						0.41
PSEG Income from Continuing Operations for the Twelve Months Ended December 31, 2008		$	1.93
Reconciling Items (a)						(1.10	)
PSEG Operating Earnings for the Twelve Months Ended December 31, 2008					$	3.03
						B/(W)
PSEG Power
Year to Date December 31, 2008		$	2.30
Recontracting and Lower Fuel Expense	0.04
BGSS and Wholesale Power Trading	0.01
Margin			0.05
O&M			0.03
Interest			0.03
Depreciation and Other			(0.03	)
Year to Date December 31, 2009		$	2.38		$	0.08
PSE&G
Year to Date December 31, 2008		$	0.71
Transmission Margin			0.04
Appliance Service Margin			0.01
Electric and Gas Margins			(0.01	)
Weather			(0.01	)
O&M			(0.06	)
Depreciation			(0.03	)
Taxes			(0.03	)
Interest			0.01
Year to Date December 31, 2009		$	0.63		$	(0.08	)
PSEG Energy Holdings
Year to Date December 31, 2008		$	0.07
2009 Lease Sales			0.13
Lease Income			(0.04	)
Effective Tax Rate and Other			(0.03	)
Intercompany Transaction Eliminated in Consolidation			(0.04	)
Year to Date December 31, 2009		$	0.09		$	0.02
Public Service Enterprise Group
Year to Date December 31, 2008		$	(0.05	)
Interest			0.03
Intercompany Transaction Eliminated in Consolidation			0.04
Year to Date December 31, 2009		$	0.02		$	0.07
PSEG Operating Earnings for the Twelve Months Ended December 31, 2009					$	3.12
Reconciling Items (a)						0.02
PSEG Income from Continuing Operations for the Twelve Months Ended December 31, 2009		$	3.14
Discontinued Operations						—
PSEG Net Income for the Twelve Months Ended December 31, 2009					$	3.14

(a) See attachment 12 for details of items excluded from Continuing Operations to compute Operating Earnings.

Attachment 8

PSEG POWER LLC

Generation Measures

(Unaudited)

	GWhr Breakdown				GWhr Breakdown
	Quarters Ended December 31,				Twelve Months Ended December 31,
	2009		2008		2009		2008
Nuclear - NJ	5,196		5,128		20,978		20,016
Nuclear - PA	2,335		2,232		9,305		9,268
Total Nuclear	7,531		7,360		30,283		29,284
Fossil - Coal - NJ	1,002		692		2,853		4,364
Fossil - Coal - PA	1,133		1,277		5,141		5,811
Fossil - Coal - CT	392		701		1,008		2,881
Total Coal	2,527		2,670		9,002		13,056
Fossil - Oil & Natural Gas - NJ	2,593		1,849		9,376		10,138
Fossil - Oil & Natural Gas - NY	956		653		3,493		2,834
Fossil - Oil & Natural Gas - CT	(2	)	14		113		118
Fossil - Oil & Natural Gas - TX	1,784		1,688		7,644		7,866
Total Oil & Natural Gas	5,331		4,204		20,626		20,956
Fossil - Pumped Storage	(18	)	(28	)	(103	)	(138	)
	15,371		14,206		59,808		63,158
	% Generation by Fuel Type				% Generation by Fuel Type
	Quarters Ended December 31,				Twelve Months Ended December 31,
	2009		2008		2009		2008
Nuclear - NJ	34	%	36	%	35	%	32	%
Nuclear - PA	15	%	16	%	16	%	14	%
Total Nuclear	49	%	52	%	51	%	46	%
Fossil - Coal - NJ	6	%	5	%	5	%	7	%
Fossil - Coal - PA	7	%	9	%	8	%	9	%
Fossil - Coal - CT	3	%	5	%	2	%	5	%
Total Coal	16	%	19	%	15	%	21	%
Fossil - Oil & Natural Gas - NJ	17	%	13	%	15	%	17	%
Fossil - Oil & Natural Gas - NY	6	%	5	%	6	%	4	%
Fossil - Oil & Natural Gas - CT	0	%	0	%	0	%	0	%
Fossil - Oil & Natural Gas - TX	12	%	11	%	13	%	12	%
Total Oil & Natural Gas	35	%	29	%	34	%	33	%
Fossil - Pumped Storage	0	%	0	%	0	%	0	%
	100	%	100	%	100	%	100	%

Attachment 9

PUBLIC SERVICE ELECTRIC & GAS COMPANY

Retail Sales and Revenues

(Unaudited)

December 31, 2009

Electric Sales and Revenues

Sales (millions kwh)	Quarter Ended		Change vs. 2008		Twelve Months Ended		Change vs. 2008
Residential		2,895	-2.9	%		12,992	-4.6	%
Commercial & Industrial		6,712	-4.7	%		28,586	-3.8	%
Street Lighting		120	9.9	%		383	2.7	%
Other		2	-30.7	%		10	-30.2	%
Total		9,729	-4.0	%		41,971	-4.0	%
Revenue ($ millions)
Residential	$	480	-0.3	%	$	2,203	1.3	%
Commercial & Industrial		551	-17.7	%		2,821	-9.6	%
Street Lighting		23	13.5	%		80	3.3	%
Other Operating Revenues*		67	-18.2	%		277	-35.1	%
Total	$	1,121	-10.6	%	$	5,381	-7.2	%
Weather Data	Quarter Ended		Change vs. 2008		Twelve Months Ended		Change vs. 2008
THI Hours - Actual		97	-17.2	%		11,098	-22.1	%
THI Hours - Normal		328				15,435

^* Primarily sales of Non-Utility Generator energy to PJM and Transmission related revenues.

Attachment 10

PUBLIC SERVICE ELECTRIC & GAS COMPANY

Retail Sales and Revenues

(Unaudited)

December 31, 2009

Gas Sold and Transported

Sales (millions therms)	Quarter Ended		Change vs. 2008		Twelve Months Ended		Change vs. 2008
Residential Sales		425	-7.0	%		1,403	1.5	%
Commercial & Industrial - Firm Sales		145	-14.7	%		517	-3.2	%
Commercial & Industrial - Interruptible & Cogen		32	-2.2	%		179	-19.1	%
Total		602	-8.8	%		2,099	-1.9	%
Gas Transported - Firm Sales		143	5.3	%		464	4.1	%
Gas Transported - Non-Firm		228	5.7	%		937	9.3	%
Revenue ($ millions)
Residential Sales	$	351	-30.5	%	$	1,309	-3.3	%
Commercial & Industrial - Firm Sales		91	-39.9	%		341	-38.0	%
Commercial & Industrial - Interruptible & Cogen		18	-36.4	%		88	-62.6	%
Other Operating Revenues*		41	7.7	%		142	5.5	%
Total	$	501	-30.7	%	$	1,880	-17.3	%
Gas Transported	$	300	-3.9	%	$	982	1.7	%
Weather Data	Quarter Ended		Change vs. 2008		Twelve Months Ended		Change vs. 2008
Degree Days - Actual		1,186	-10.6	%		3,676	2.4	%
Degree Days - Normal		1,224				3,601

^*Primarily Appliance Service.

Attachment 11

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Statistical Measures

(Unaudited)

	For the Quarters Ended December 31						For the Twelve Months Ended December 31
	2009			2008			2009			2008
Weighted Average Common Shares Outstanding (000’s)
Basic		505,987			506,083			505,986			507,693
Diluted		507,382			506,706			507,064			508,427
Stock Price at End of Period							$	33.25		$	29.17
Dividends Paid per Share of Common Stock	$	0.3325		$	0.3225		$	1.3300		$	1.2900
Dividend Payout Ratio*								42.7	%		42.5	%
Dividend Yield								4.0	%		4.4	%
Price/Earnings Ratio*								10.7			9.6
Rate of Return on Average Common Equity*								18.9	%		21.0	%
Book Value per Common Share							$	17.37		$	15.36
Market Price as a Percent of Book Value								191	%		190	%
Total Shareholder Return		6.9	%		-10.0	%		19.2	%		-38.6	%

* Calculation based on Operating Earnings for the 12 month period ended.

Attachment 12

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings

(Unaudited)

	For the Quarters Ended December 31,						For the Twelve Months Ended December 31,
Pro-forma Adjustments, net of tax	2009			2008			2009			2008
Earnings Impact ($ Millions)
Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity	$	8		$	(49	)	$	9		$	(71	)
Gain (Loss) on Mark-to-Market (MTM)		(3	)		(14	)		(25	)		16
Lease Transaction Reserves		—			—			—			(490	)
Net Reversal of Lease Transaction Reserves		29			—			29			—
Asset Impairments		—			(13	)		—			(13	)
Premium on Bond Redemption		—			—			—			(1	)
Total Pro-forma adjustments	$	34		$	(76	)	$	13		$	(559	)
Fully Diluted Average Shares Outstanding (in Millions)		507			507			507			508
Per Share Impact (Diluted)
Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity	$	0.02		$	(0.10	)	$	0.02		$	(0.14	)
Gain (Loss) on Mark-to-Market (MTM)		—			(0.03	)		(0.05	)		0.03
Lease Transaction Reserves		—			—			—			(0.96	)
Net Reversal of Lease Transaction Reserves		0.05			—			0.05			—
Asset Impairments		—			(0.03	)		—			(0.03	)
Premium on Bond Redemption		—			—			—			—
Total Pro-forma adjustments	$	0.07		$	(0.16	)	$	0.02		$	(1.10	)

EX-99.1

Public Service Enterprise Group

PSEG Earnings Conference Call

4

th

Quarter and Year-end 2009

February 18, 2010

Exhibit 99.1

1

Forward-Looking Statement

Readers are cautioned that statements contained in this presentation 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,

but

are

not

limited to:

•

Adverse changes in energy industry, law, policies and regulation, including market structures and rules, and reliability standards.

•

Any inability

of

our

transmission

and

distribution

businesses

to

obtain

adequate

and

timely

rate

relief

and

regulatory

approvals

from

federal

and

state regulators.

•

Changes in federal and state environmental regulations that could increase our costs or limit operations of our generating units.

•

Changes

in

nuclear

regulation

and/or

developments

in

the

nuclear

power

industry

generally,

that

could

limit

operations

of

our

nuclear

generating

units.

•

Actions

or

activities

at

one

of

our

nuclear

units

located

on

a

multi-unit

site

that

might

adversely

affect

our

ability

to

continue

to

operate

that

unit

or

other units at the same site.

•

Any inability to balance our energy obligations, available supply and trading risks.

•

Any deterioration in our credit quality.

•

Availability of capital and credit at commercially reasonable terms and our ability to meet cash needs.

•

Any inability to realize anticipated tax benefits or retain tax credits.

•

Changes

in

the

cost

of

or

interruption

in

the

supply

of

fuel

and

other

commodities

necessary

to

the

operation

of

our

generating

units.

•

Delays or unforeseen cost escalations in our construction and development activities.

•

Adverse performance of our decommissioning and defined benefit plan trust fund investments, and changes in discount rates and funding

requirements.

•

Changes in technology and increased customer conservation.

For further information, please refer to our Annual Report on Form 10-K, including Item 1A. Risk Factors, 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

presentation.

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

internal

estimates

change,

unless

otherwise

required

by

applicable

securities

laws.

2

GAAP Disclaimer

PSEG presents Operating Earnings in addition to its Net Income reported

in accordance with accounting principles generally accepted in the United

States (GAAP). Operating Earnings is a non-GAAP financial measure that

differs from Net Income because it excludes gains or losses associated

with Nuclear Decommissioning Trust (NDT) and Mark-to-Market (MTM)

accounting, the impact of the sale of certain non-core domestic and

international assets and material impairments and lease-transaction-

related charges. PSEG presents Operating Earnings because

management believes that it is appropriate for investors to consider

results excluding these items in addition to the results reported in

accordance with GAAP. PSEG believes that the non-GAAP financial

measure of Operating Earnings provides a consistent and comparable

measure of performance of its businesses to help shareholders

understand performance trends.

This information is not

intended to be

viewed as an alternative to GAAP information. The last two slides in this

presentation include a list of items excluded from Income from Continuing

Operations to reconcile to Operating Earnings, with a reference to that

slide included on each of the slides where the non-GAAP information

appears.

PSEG

2009 Q4 Review

Ralph Izzo

Chairman, President and Chief Executive Officer

4

Q4 2009 Earnings Summary

(3)

-

Discontinued Operations, Net of Tax

$ 0.62

$  0.62

EPS from Operating Earnings*

234

349

Net Income

237

349

Income from Continuing

Operations

(76)

34

Reconciling

Items, Net of Tax

$  313

$  315

Operating

Earnings

2008

2009

$ millions (except EPS)

Quarter ended December 31,         

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

5

Full-year 2009 Earnings Summary

205

-

Discontinued Operations, Net of Tax

$ 3.03

$  3.12

EPS from Operating Earnings*

1,188

1,592

Net Income

983

1,592

Income from Continuing

Operations

(559)

13

Reconciling

Items, Net of Tax

$  1,542

$  1,579

Operating

Earnings

2008

2009

$ millions (except EPS)

For the twelve months ended

December 31,                    

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

6

PSEG –

2009: Balanced

asset

mix

met

market’s

challenges

2009 earnings within guidance

Focused on operational excellence

Record production from nuclear and combined cycle fleet

Reliability standards maintained at PSE&G

Ownership of Texas assets transferred to Power

O&M challenge met by employees

Foundation laid for future

Regulatory approvals in 2009 for $1.4 billion of investments in solar,

infrastructure and energy efficiency

BPU approval for $750 million investment in Susquehanna-Roseland

transmission line

Environmental upgrades at generation units to be completed in 2010

Financial position strengthened

Lease terminations cut related tax liability in half

Long-term debt reduced

Dividend increased for seventh consecutive year

7

2008 Operating Earnings*

2009 Operating Earnings*

2010 Guidance

$3.00 -

$3.25

PSEG –

Introducing

2010 Guidance

$3.03

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.                    

$3.12

8

PSEG –

Meeting

Challenges

Achieving earnings targets

Enhancing operational efficiency with a focus on achieving top

quartile performance across the enterprise

Investing in areas with attractive risk-adjusted returns

Sustaining a strong balance sheet

Providing an above average return through our common

dividend

PSEG

2009 Q4 Operating Company Review

Caroline Dorsa

Executive Vice President and Chief Financial Officer

10

Q4 Operating

Earnings by Subsidiary

$    313

(10)

1

76

$   246

2008

$   315

(7)

12

68

$   242

2009

Operating

Earnings

Earnings per Share

(0.02)

(0.01)

Enterprise

$   0.62

$   0.62

Operating

Earnings*

-

0.03

PSEG Energy Holdings

0.15

0.13

PSE&G

$   0.49

$   0.47

PSEG Power

2008

2009

$ millions (except EPS)

Quarter ended December 31,

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

11

Full-year 2009 Operating Earnings by Subsidiary

$ 1,542 

(24)

36

360

$   1,170

2008

$   1,579

10

43

321

$   1,205

2009

Operating

Earnings

Earnings per Share

(0.05)

0.02

Enterprise

3.03

$   3.12

Operating Earnings*

0.07

0.09

PSEG Energy Holdings

0.71

0.63

PSE&G

$   2.30

$   2.38

PSEG Power

2008

2009

$ millions (except EPS)

For the year ended December 31,

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

12

$.62

(.02)

(.02)

.03

.01

$.62

0.00

0.35

0.70

PSEG EPS Reconciliation –

Q4 2009 versus Q4 2008

Q4 2009       

operating

earnings*

Q4 2008       

operating

earnings*

Interest

Lower Pricing

Offset by Lower

Fuel Expense 

(.02)

BGSS and

Wholesale Power

Trading .03

O&M and Other 

(.03)

PSEG Power

Weather (.01)

O&M (.03)

Transmission

and Appliance

Service  .01

Taxes and

Other  .01

PSE&G

PSEG Energy

Holdings

Enterprise

2009 Lease

Sales  .02

O&M, Interest 

and Other  .01

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

13

$3.03

.08

(.08)

.02

.07

$3.12

0.00

0.65

1.30

1.95

2.60

3.25

PSEG EPS Reconciliation –

Full-year 2009 versus Full-

year 2008

2009       

operating

earnings*

2008       

operating

earnings*

Interest  .03

Intercompany

Transaction

Eliminated in

Consolidation  .04

Recontracting

and Lower Fuel

Expense  .04

BGSS and

Wholesale Power

Trading  .01

O&M  .03

Interest  .03

Depreciation and

Other  (.03) 

PSEG Power

Margin –

Gas,

Electric,

Transmission

and Appliance

Service  .04

Weather  (.01)

O&M  (.06)

Depreciation

(.03)

Taxes  (.03)

Interest .01

PSE&G

PSEG Energy

Holdings

Enterprise

2009 Lease Sales 

.13

Lease Income  (.04)

Effective Tax Rate

and Other  (.03)

Intercompany

Transaction

Eliminated in

Consolidation  (.04)

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

PSEG Power

2009 Q4 Review

15

PSEG Power –

Q4 2009 EPS Summary

11

(14)

(3)

Mark-to-Market, Net of Tax

57

(49)

8

NDT Funds Related Activity,              

Net of Tax

($ 256)

$ 2,008

$ 1,752

Operating

Revenues

($ 0.02)

$   0.49

$    0.47

EPS from Operating Earnings*

64

183

247

Net Income

(4)

246

242

Operating

Earnings

Variance

Q4 2008

Q4 2009

$ millions (except EPS)

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

16

$.47

(.03)

.03

(.02)

$.49

0.00

0.25

0.50

0.75

Lower Pricing

Offset by Lower

Fuel Expense

PSEG Power EPS Reconciliation –

Q4 2009 versus Q4 2008

Q4 2009       

operating

earnings*

Q4 2008       

operating

earnings*

BGSS and

Wholesale

Power Trading

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

O&M and

Other

17

29,284

30,283

12,918

8,899

13,090

12,982

7,866

7,644

0

32,500

65,000

2008

2009

PSEG Power –

Generation Measures

7,360

7,531

2,642

2,509

2,516

3,547

1,784

1,688

0

8,750

17,500

2008

2009

Quarter

ended

December

31,

Total Nuclear

Total Coal*

Oil & Natural Gas

–

excluding

Texas

* Includes figures for Pumped Storage

PSEG Power –

Generation (GWh)

14,206

15,371

Twelve

months

ended

December

31,

63,158

59,808

Oil & Natural Gas

-

Texas

18

PSEG Power –

Fuel Costs

240

279

Oil & Gas*

97

92

Coal

24.53

28.44

$ / MWh

15,371

14,206

Total Generation

(GWh)

377

404

Total Fuel Cost

40

33

Nuclear

Total Fossil

($ millions)

337

371

2009

2008

Quarter ended December 31,

PSEG Power –

Fuel Costs

882

1,645

Oil & Gas*

336

423

Coal

22.87

34.79

$ / MWh

59,808

63,158

Total Generation

(GWh)

1,368

2,197

Total Fuel Cost

150

129

Nuclear

Total Fossil

($ millions)

1,218

2,068

2009

2008

Twelve months ended

December 31,

* Includes Texas.

19

PSEG Power –

Gross Margin Performance

$0

$25

$50

$75

2008

2009

$0

$25

$50

$75

2008

2009

$55

$51

Quarter ended

December 31,

Twelve  months ended

December 31,

$55

$60

PJM total gross margin was sustained by lower costs to serve, including

strong performance of our nuclear fleet, which offset lower overall demand

Low gas pricing resulted in gas displacing coal-fired generation

Low spark spreads, partially offset by

increase in generation.

$13

Texas

Regional Performance

$17

$18

$657

Q4 Gross

Margin ($M)

Q4 Performance

Region

Low spark spreads, partially offset by

increase in generation.

New York

Output of Bridgeport Harbor hurt by

low energy prices and high cost of

coal.

New

England

Q4 contribution to gross margin ($M)

increased 3.5% versus year ago;

strong nuclear production, higher

contracted prices offset impact of

customer migration.

PJM

PSEG Power Gross Margin ($/MWh)*

* Excludes Texas. Gross margin for Texaswas $27M and $13M in Q4 2008 and Q4 2009, respectively. For full year, Texas gross margin was

$207M and $113 for 2008 and 2009, respectively.

20

PSEG Power –

Q4 Operating Highlights

Q4 output + 8%; full-year decline of 5%

Q4 nuclear capacity factor at 92.0%; full-year at 93.4%

Combined cycle units operated at record levels

Higher NJ coal dispatch in Q4

Operations

Regulatory and Market

Environment

Financial

BGS auction priced at $95.77/MWh versus $98.88/MWh for expiring contract

Poor economy hurt Q4 earnings ($0.01 per share); customer migration also hurt

Q4 earnings ($0.02 per share)

90 -

95% of 2010 anticipated coal and nuclear output hedged following BGS

auction

Ownership of Texas assets transferred to Power on October 1; financial

statements for 2009 and 2008 reflect transfer

Power’s EBITDA and earnings in line with forecast

PSE&G

2009 Q4 Review

22

PSE&G –

Q4 2009 Earnings Summary

(337)

2,065

1,728

Total Operating

Expenses

(2)

35

33

Taxes Other than Income Taxes

Operating

Expenses

(380)

1,545

1,165

Energy Costs

39

345

384

Operation & Maintenance

6

140

146

Depreciation & Amortization

($ 0.02)

$ 0.15

$ 0.13

EPS from Operating Earnings*

(8)

76

68

Operating

Earnings / Net Income

($ 366)

$ 2,288

$ 1,922

Operating

Revenues

Variance

Q4 2008

Q4 2009

$ millions (except EPS)

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

23

$.13

.01

(.03)

.01

(.01)

$.15

0.00

0.10

0.20

PSE&G EPS Reconciliation –

Q4 2009

versus Q4 2008

Q4 2009      

operating

earnings*

Q4 2008       

operating

earnings*

Weather

Taxes and

Other

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

O&M

Transmission

and Appliance

Service

24

PSE&G –

Q4 Operating Highlights

NJ BPU approved construction of the $750 million Susquehanna-Roseland 500kV

transmission line; in-service date of 2012

Electric and gas rate filing updated to reflect actual results for 2009 test year

Electric increase ($148 million); gas increase ($74 million)

Leadership of NJ BPU changed with election of Chris Christie (R)

as governor

PSE&G issued $250 million of 30-year secured debt at 5.375%

PSE&G’s

2009 operating earnings provided an earned return on equity of 8.3%

Operations

Regulatory and Market

Environment

Financial

Decline in employment having impact on sales growth

Non-pension related O&M remains under control

Agreements with majority of union employees will contain O&M growth in 2010

Focused on maintaining reliability

PSEG Energy Holdings

2009 Q4 Review

26

PSEG Energy Holdings –

Q4 2009 Earnings Summary

3

(3)

--

Discontinued Operations, net of tax

13

(13)

--

Asset Impairments

29

--

29

Net Reversal of Lease Transaction

Reserves

$0.03

--

$ 0.03

EPS from Operating Earnings*

$ 56

($ 15)

$ 41

Net Income (Loss)

$ 11

$ 1

$ 12

Operating

Earnings

Variance

Q4 2008

Q4 2009

$ millions (except EPS)

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

27

.03

.01

.02

$.00

0.00

0.05

PSEG Energy Holdings EPS

Reconciliation

–

Q4

2009

versus

Q4 2008

Q4 2009       

operating

earnings*

Q4 2008      

operating

earnings*

2009 Lease

Sales

* See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

O&M,

Interest

and Other

28

PSEG Energy Holdings –

Q4 Operating Highlights

Financial

Termination of two leases in Q4 brought total number of leases

terminated to 13, reducing potential tax liability at year-end to $660 million

Reserve for IRS interest reduced in Q4 2009 based on reassessment of

risk following court decision in case with facts similar to ours

Ownership of Texas gas-fired generating assets transferred to Power on

October 1, 2009

PSEG

30

PSEG Financial Highlights

2010 operating earnings guidance of $3.00 -

$3.25 per share

Guidance by operating company will be provided following conclusion of PSE&G

distribution rate case

2009 earnings included $0.13 per share of gains on lease terminations offsetting

$0.08 per share negative impact on earnings from contraction in economic activity

and cooler than normal weather

Financial risk associated with lease investments reduced to approximately

$660 million

Financial position strengthened

Parent level long-term debt eliminated

Debt:capital

ratio at 45% at year-end 2009 versus 49% at end of 2008

31

PSEG Liquidity as of February 12, 2010

Expiration

Total

Primary

Usage at

Available

Company

Facility

Date

Facility

Purpose

2/12/2010

2/12/2010

PSEG

5-year Credit Facility

Dec-12

$1,000

1

CP Support/Funding/LCs

$288

$712

Uncommitted Bilateral

Agreement

N/A

N/A

Funding

0

N/A

Power

5-Year Credit Facility

Dec-12

1,600

2

Funding/LCs

203

1,397

2-Year Credit Facility

Jul-11

350

Funding

0

350

Bilateral Credit Facility

Mar-10

100

Funding/LCs

39

61

PSE&G

5-year Credit Facility

Jun-12

600

3

CP Support/Funding/LCs

0

600

Uncommitted Bilateral

N/A

N/A

Funding

0

N/A

Total

$3,650

$3,120

1

PSEG Facility reduces by $47 million in 12/2011

2

Power Facility reduces by $75 million in 12/2011

3

PSE&G Facility reduces by $28 million in 12/2011

32

Items Excluded from Income from Continuing

Operations to

Reconcile to Operating

Earnings

Please see Page 2 for an explanation of PSEG’s use of Operating

Earnings as a non-GAAP financial measure and how

it differs from Net Income.

Pro-forma Adjustments, net of tax

2009

2008

2009

2008

Earnings Impact ($ Millions)

Gain (Loss) on Nuclear Decommissioning Trust (NDT)

Fund Related Activity

8

$          

(49)

$       

9

$          

(71)

$       

Gain (Loss) on Mark-to-Market (MTM)

(3)

(14)

(25)

16

Lease Transaction Reserves

-

-

-

(490)

Net Reversal of Lease Transaction Reserves

29

-

29

-

Asset Impairments

-

(13)

-

(13)

Premium on Bond Redemption

-

-

-

(1)

Total Pro-forma adjustments

34

$        

(76)

$       

13

$        

(559)

$     

Fully Diluted Average Shares Outstanding (in Millions)

507

507

507

508

Per Share Impact (Diluted)

Gain (Loss) on Nuclear Decommissioning Trust (NDT)

Fund Related Activity

0.02

$     

(0.10)

$    

0.02

$     

(0.14)

$    

Gain (Loss) on Mark-to-Market (MTM)

-

(0.03)

(0.05)

0.03

Lease Transaction Reserves

-

-

-

(0.96)

Net Reversal of Lease Transaction Reserves

0.05

-

0.05

-

Asset Impairments

-

(0.03)

-

(0.03)

Premium on Bond Redemption

-

-

-

-

Total Pro-forma adjustments

0.07

$     

(0.16)

$    

0.02

$     

(1.10)

$    

For the Quarters Ended

For the Twelve Months Ended

December 31,

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Reconciling

Items

Excluded

from

Continuing

Operations

to

Compute

Operating

Earnings

(Unaudited)

December 31,