PSEG

Public

Service

Enterprise

Group

California Investor Meetings

June 29 -

30, 2010

Exhibit 99

2

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

located

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 conditions 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.

•

Increase in competition in energy markets in which we compete.

•

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.

3

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 the impact of mark-to-market activity, Nuclear

Decommissioning

Trust

Fund

related

activity,

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 Net Income to reconcile to Operating Earnings, with a reference to

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

PSEG –

Defining the Future

Ralph Izzo

Chairman, President and Chief Executive Officer

Caroline Dorsa

Executive Vice President and Chief Financial Officer

Kathleen A. Lally

Vice President, Investor Relations

5

PSEG: the right mix for the

opportunities of today and tomorrow

Electric & Gas Delivery

and Transmission

Regional Wholesale Energy

Renewable Investments

PSE&G positioned

to meet NJ’s

energy policy and

economic growth

objectives

with $5.3 billion

investment program.

PSEG Power’s

low-cost baseload

nuclear and

coal fleet

is geographically well

positioned and

environmentally

responsible.

PSEG Energy Holdings

positioned to pursue

attractive renewable

generation opportunities:

•

Solar

•

Offshore wind

•

Compressed Air Energy

Storage (CAES)

6

A successful track record…

…

provides the confidence to capitalize on the opportunities of tomorrow.

PSEG Power resumed independent control of nuclear fleet, produced record levels of

generation and achieved top quartile performance; fossil fleet retrofitted to meet more

stringent environmental requirements.

PSE&G consistently recognized for reliability; investment programs expanded to meet NJ’s

goals for economic growth and clean energy.

Business focus improved; balance sheet strengthened; Holdings’

financial risk lessened with

sale of international investments, termination of offshore leases

Operational and financial focus has allowed PSEG to meet/exceed earnings objectives in

each of the past three years.

History of returning cash to shareholders through common dividend.

2007

2008

2009

7

Earnings growth achieved…

…

through higher pricing, increased production and lower costs.

$2.68

$3.03

$3.12

2007 Operating Earnings*

2008 Operating Earnings*

2009 Operating Earnings*

* See page 71 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

8

Investment programs, hedge profile

and cost control support 2010 outlook

$3.12

$3.00 - $3.25

2009 Operating Earnings*

2010 Guidance

* See page 71 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

Tomorrow’s energy market will reward…

…an operationally efficient, environmentally responsible,

integrated generation, transmission and distribution business.

Higher margins driven by

environmentally

responsible &

operationally flexible

energy supply

Superior operations =

customer satisfaction 

+ higher value

Business driven by the

need to address

environmental issues

and stable pricing

Infrastructure

investment to

support reliability +

improve performance

9

10

A $7.7 billion investment program over        

2010 –

2012…

…

supports long-term growth.

11

PSEG is advantaged…

…

with a strong balance sheet and cash flow to pursue

an investment program that seizes the opportunities of tomorrow.

Right Assets,

Right Markets

Operational

Flexibility

Environmental

Infrastructure

Improvements

2010

Integrated business model with assets located close to

load centers

Dispatch flexibility of operating assets and trading

capability supports margins in full-requirements markets

Environmentally responsible; pursuing investments in

renewables; nuclear uprates

Investments to improve reliability and functionality of grid

12

PSEG has provided investors with a better

than average return…

…

and we are positioned to deliver value over the long-term.

5 year*

10 year*

3 year*

*For the period ended December 31, 2009.

-10

-5

0

5

10

15

20

PSEG

S&P 500

Electrics

Dow Jones

Utility

Average

0

20

40

60

PSEG

S&P 500

Electrics

Dow Jones

Utility

Average

0

50

100

150

200

PSEG

S&P 500

Electrics

Dow Jones

Utility

Average

13

*Indicated annual dividend rate

Seventh consecutive annual

dividend increase is part of a 103-year

history of paying common dividends…

43%

70%

44%

Payout

Ratio

42 –

46%

43%

66%

63%

Dividends per Share

…

and we remain comfortably within our targeted 40-50% payout range.

$1.10

$1.12

$1.14

$1.17

$1.29

$1.33

$1.37*

2004

2005

2006

2007

2008

2009

2010

14

PSEG is responding to investors’

questions

PSE&G’s capital programs have nominal impact on rates

Stable supply costs provide room for regulatory support of capital programs

What is the impact

on customer from

capital programs?

Strong PSEG cash flow and approved PSE&G capital structure support financing

requirements

Do you need equity?

Downside risk limited by recent auction results which incorporated lower           

market energy prices

Physical assets provide optionality

What is the

impact of migration?

Modest

payout

ratio

and

strong

balance

sheet

provide

support

–

7    consecutive          

annual increase

Is dividend secure?

Multi-year hedging through participation in full-requirements auctions

Asset balance dampens relative fuel price volatility

Capacity markets provide stability

What’s the impact of

commodity volatility?

Environmentally advantaged

Federal and State Policy initiatives support capital plans

How is PSEG affected

by policy changes?

PSEG Position

Investors’

Questions

th

PSEG Power –

Review and

Outlook

16

PSEG Power

–

Right assets in the right markets…

Portfolio approach to

hedging over multi-year

timeframe to derive

market premiums

Investment

program supported by

strong cash flow and

credit metrics

Low-cost,

environmentally

responsible, operationally

flexible supply located in

premium markets

Focus on operational

excellence to maximize

asset value

…

with dispatch flexibility supporting returns in volatile markets.

17

Low-cost portfolio

Regional focus in competitive, liquid

markets

Assets favorably located near

customers/load centers

Many units east of PJM constraints

Southern NEPOOL/ Connecticut

Texas assets –

low cost combined cycle

Market knowledge and experience to

maximize the value of our assets

…

with low cost plants, in good locations, within solid markets.

Power’s

assets

drive value in a dynamic environment…

15%

52%

8%

Fuel Diversity

Coal

Gas

Oil

Nuclear

Pumped

Storage

1%

Energy Produced

(Twelve months ended December 31, 2009)

Total GWh: 59,808

51%

15%

34%

Pumped Storage

& Oil <1%

Nuclear

Coal

Gas

Total MW: 15,548

24%

8%

18

Power’s Northeast assets are located in

attractive markets near load centers …

... and the fleet has expanded to include 2,000MW in Texas.

19

…

while maintaining optionality under a variety of conditions.

Power’s PJM assets along the dispatch curve

reduce the risk of serving full requirement load

contracts…

X

X

Ancillary Revenue

X

X

X

X

Capacity Revenue

X

X

Energy Revenue

X

X

Dual Fuel

Salem

Nuclear

Coal

Combined Cycle

Steam

Peaking

Peaking units

Baseload units

Load following units

Illustrative

Hope

Creek

Keystone

Conemaugh

Hudson 2

Linden 1,2

Burlington 8-9-11

Edison 1-2-3

Essex 10-11-12

Bergen 1

Sewaren 1-4

Hudson 1

Mercer1, 2

Bergen 2

Sewaren 6

Mercer 3

Kearny 10-11

Linden 5-8 / Essex 9

Burlington 12  / Kearny 12

Peach

Bottom

Yards

Creek

National Park

Salem 3

Bergen 3

20

Our nuclear performance has improved…

11.1

3.1

0.6

2.1

1.0

0.9

0.4

0.7

0.6

0.7

0.6

0.6

0.6

2004

2005

2006

2007

2008

2009

2010 Target

25

27

29

28

29

30

30

2004

2005

2006

2007

2008

2009

2010 Target

79.0

85.0

97.0

94.0

91.7

99.0

98.0

96

96

97

96

97

98

2004

2005

2006

2007

2008

2009

2010 Target

Salem station set a new generation record.

Highest combined Salem and Hope Creek

Nuclear site output in Power’s history

Top quartile INPO Index

…

as we maintain our drive for excellence.

Nuclear Generation Output*

(000’s GWh)

Forced

Loss

Rate

(

)

(%)

INPO

Index

(

)

NJ Units

1  

Quartile

NJ Units

1

Quartile

* Total PS share nuclear generation

st

st

21

SO

2

…

and back-end technology investments will prepare us for the future.

Power’s coal fleet has shown improvement…

14

15

15

13

13

9

13

2004

2005

2006

2007

2008

2009

2010 Target

10.3

11.1

11.3

7.9

8.4

4.8

3.8

2004

2005

2006

2007

2008

2009

2010 Target

Market conditions reduced output in 2009

Operational results greatly improved

Environmental footprint improved

Output

(000’s GWh)

Forced

Outage

Rate

(

)

(% EFORD)

SO

2

and

NOx

Rates

(

)

(lb/mmbtu)

NOx

1.11

1.12

1.01

0.91

0.96

0.83

0.47

0.34

0.34

0.29

0.20

0.21

0.19

0.16

2004

2005

2006

2007

2008

2009

2010 Target

22

Power’s combined cycle fleet is creating

value…

5

4

8

10

20

20

18

2004

2005

2006

2007

2008*

2009*

2010

Target*

3.4

7

3.4

2.5

1.8

1.5

0.8

2004

2005

2006

2007

2008*

2009*

2010

Target*

8079

7847

7928

7768

7587

7507

7452

2004

2005

2006

2007

2008*

2009*

2010

Target*

Output

(000’s GWh)

Forced

Outage

Rate

(

)

(% EFORD)

Period

Heat

Rate

(

)

(mmbtu/KWh)

Highest output ever in 2009

Approaching top quartile forced outage rate

Benefiting from heat rate improvement

program

…

benefiting from operating enhancements and market dynamics.

* Includes Texas

23

Our peaking fleet rounds out a diverse

generation portfolio…

13

17

23

19

13

14

12

2004

2005

2006

2007

2008

2009

2010 Target

85

86

76

77

91

92

94

2004

2005

2006

2007

2008

2009

2010 Target

Peaking start success provides

opportunities in ancillary and real time

markets

Peaking adds flexibility in serving load

and managing needs of a diverse market

environment

…

and provides ability to follow load during periods of high demand.

%

Start

Success

(

)

Forced

Outage

Rate

(

)

(% EFORD)

Equivalent

Availability

(

)

(%)

99.7

96.5

98.6

97.0

98.9

99.3

99.7

2004

2005

2006

2007

2008

2009

2010 Target

24

Stringent environmental challenges are on the

horizon, with potentially broad industry impacts…

High

High

Regional

High

High

Industry Impact

Emission restrictions net favorable to Power

Carbon

Controls on coal units done or under way

Power’s relative position very strong

NOx, SO

2

, Hg

(CAIR)

Peaking fleet replacement strategy

Upwind

states

anticipated

to

increase

NOx

stringency

Ozone air quality standards

(HEDD)

EPA required to perform cost-benefit analysis

Issue widely shared across industry

Potential capital spend exposure

Once-through cooling water

(316(b))

Power uses dry fly ash systems

Ash has been tested as non-hazardous

Coal ash regulation

Power’s Positioning

Issue

…but Power’s clean fleet is very competitively positioned for success.

25

Source: EPA, EIA (2006 and

2007) and PSEG Projection

Power’s coal assets will have completed

many environmental upgrades by 2010…

…resulting in dramatically lower emissions.

PSEG Projected NOX Emission Rate for 2011

versus 2008 400 U.S. Coal Plants

Conemaugh

Hudson

Bridgeport

Mercer   Keystone

NOx

Keystone

Bridgeport

Conemaugh

Hudson   Mercer

SO

2

PSEG Projected SO2 Emission Rate for 2011

versus 2008 400 U.S. Coal Plants

Keystone

Conemaugh

Bridgeport

Mercer

Mercury

PSEG Projected HG Emission Rate for 2011

versus 2008 400 U.S. Coal Plants

Hudson

0

2

4

6

8

10

12

14

0

10

20

30

40

50

60

0

50

100

150

200

250

26

Power remains a leading provider in an

excellent market…

Pricing in 2009 was impacted by low economic demand, cool summer

weather, and low

gas prices

Power’s hedging strategy enabled strong results

2010 forwards imply continued market challenges, but entities with the right assets in

the right locations are best positioned

Power will continue to utilize a hedging strategy that incorporates full requirement load

contracts and other contracting to secure pricing over a 2-3 year forward horizon

BGS continues to be the foundation of our hedging strategy

Balanced generation portfolio in ideal position to serve BGS

Three year nature of BGS provides pricing stability for customers and providers

…

and has a fleet ideally positioned to serve customers.

27

Full Requirements Component

Increase in Capacity Markets/RPM

Growing Renewable Energy Requirements

Component for Market Risk

Through Power’s

participation in each of the BGS auctions…

Market Perspective –

BGS Auction Results

…

we have developed an expertise in serving full-requirements contracts.

2003

2004

2005

2006

2007

2008

2009

2010

3 Year Average

Round the

Clock PJM

West Forward

Energy Price

$55.59

Capacity

Load shape

Transmission

Congestion

Ancillary services

Risk premium

Green

$33 -

$34

$36 -

$37

$44 -

$46

$67 -

$70

$58 -

$60

$68 -

$71

$56 -

$58

$48 -

$50

~ $21

$55.05

~ $18

$65.41

~ $21

$102.51

~ $32

$98.88

~ $41

$111.50

~ $43

$103.72

~ $47

$95.77

~ $47

Note: BGS prices reflect PSE&G Zone

28

The result of Power’s hedging strategy is a

portfolio of contracted output…

…

which dampens the impact of market volatility on earnings in the near term.

Power’s

anticipated

nuclear and coal

output is

contracted over

the next few

years:

2010: 90-95%

2011: 50-60%

2012: 15-30%

Nuclear / Pumped Storage

Coal

Combined Cycle (CC)

Steam and Peakers

Existing BGS, Other Load Contracts, Hedges + Future BGS

Existing BGS, Other Load Contracts, and Hedges

Total Fleet RTC Average

2010

2011

2012

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

29

Power’s coal hedging reflects supply

matched with sales…

…

while maintaining flexibility on supply post BET installation.

0%

20%

40%

60%

80%

100%

2010

2011

2012

$0

$10

$20

$30

$40

$50

Contracted Coal

Mid $20’s

To

High $20’s

Mid $20’s

To

High $20’s

Mid $40’s

To

Low $40’s

Mid $40’s

To

Low $40’s

High $40’s

To

Mid $40’s

Indicative

Pricing

($/MWh)

Prices lower,

moderating

Northern

Appalachian

Conemaugh

Prices lower,

moderating

Northern

Appalachian

Keystone

More limited

segment of

coal market

Metallurgical

CAPP/NAPP

Mercer

Flexibility after

BET in 2010

Adaro  (2010)

CAPP/NAPP

(2011+)

Hudson

Higher price,

lower BTU,

enviro

coal

Adaro

Bridgeport

Harbor

Comments

Coal Type

Station

% Hedged

(left scale)

$/MWh

(right

scale)

*

*Reflects

Keystone

and

Conemaugh

contracts

30

$0

$5

$10

2010

2011

2012

Anticipated Nuclear Fuel Cost

Power has hedged its nuclear fuel

needs through 2012…

…

with increased costs over that time horizon.

Hedged

$40

$45

$50

$55

$60

$65

Power’s assets are well positioned near load

centers…

…

which resulted in a 9% growth in PJM gross margin from 2008 to 2009.

Historical 5-year Average PJM Energy Price

(Around the Clock)

Note: excludes Dominion (less than 5 years of history)

31

32

…

with sites in the eastern part of PJM.

Reliability Pricing Model –

locational

value

of Power’s generating fleet recognized…

With nearly 1/3 of its capacity in PS North and nearly 2/3 of its capacity in MAAC and EMAAC,

Power’s assets in congested locations received higher pricing in the 2013/2014 RPM Auction.

•

Locational

value of Power’s

fleet recognized

•

Bid for 90MW of new

capacity accepted for

2013/2014 auction; in-service

June 2013

•

On schedule to complete

178MW of previously cleared

peaking capacity by June

2012

$27.73

$16.46

$110.00

$174.29

$102.04

Rest of Pool

$245.00

$185.00

PSEG North Zone

$245.00

PSEG

$133.37

$139.73

2012 / 2013

$226.15

$245.00

2013/2014

$110.00

$174.29

$191.32

MAAC

$110.00

$174.29

$191.32

Eastern MAAC

2011 / 2012

2010 / 2011

2009 / 2010

$/MW-day

PJM Zones

PJM Capacity Available to Receive Auction Pricing

0

2,000

4,000

6,000

8,000

10,000

12,000

09/10

10/11

11/12

12/13

13/14

33

0%

25%

50%

75%

100%

2010

2011

2012

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

0%

25%

50%

75%

100%

2010

2011

2012

$0

$50

$100

$150

Power’s hedging program provides near-

term stability from market volatility…

…

while remaining open to long-term market forces.

Estimated EPS impact of

$10/MWh PJM West around the

clock price change* (~$2/mmbtu

gas change)

Contracted Capacity

Price

(right

scale)

* As of March 31, 2010 Assuming normal market commodity correlation and demand           

** Excludes

Texas

–

No

capacity

market

Power has

contracted for a

considerable

percentage of its

future output

over the next two

years at

attractive prices.  

The pricing for

most of Power’s

capacity has been

fixed through May 

2014, with the

completion of

auctions in PJM

and NE.  

% sold

(left

scale)

$0.30 -

$0.60

$0.10 -

$0.30

$0.05 -

$0.10

Contracted Energy

Price

(right

scale)

% sold

(left

scale)

**

*

PSE&G –

Review and Outlook

35

PSE&G

is positioned for growth…

…through investments in infrastructure, renewables and energy efficiency.

Leader in reliability; focused

on maintaining position by

improving customer

responsiveness and

efficiency

Economically meeting

mandates for reliability,

service quality and access to

renewables

Largest provider of electric

and gas distribution services

and transmission in NJ. 

Creating renewable and

energy efficiency solutions

for NJ customers

Focused on regulatory

mechanisms that provide

reasonable and current

recovery of and return on

capital

PSE&G is the largest utility in New Jersey providing

electric, gas and transmission services,…

…and delivering renewable and energy efficiency solutions for customers.

*   Actual                                                      

**  Weather normalized = estimated annual growth per year over forecast period                

*** Lifetime

GWh

+

Lifetime

Dtherms

converted

to

GWh

60%

31%

Residential

36%

58%

Commercial

0.4%**

0.4% -

1.3%**

Projected Annual Load Growth (2009 –

2012)

Sales Mix

3,500 M Therms

41,961 GWh

Electric Sales and Gas Sold and Transported

(0.4%)*

(0.6%)*

Historical Annual Load Growth (2005 -

2009)

4%

11%

Industrial

1.7 Million

3.2%

Gas

2.1 Million

3.0%

Customers

Growth

(2004 –

2009)

Electric

0.5%*

Historical Annual

Peak Load Growth

2005-2009

1,442

Network Circuit Miles

Key Statistics

Transmission

2.1%**

Projected PJM

Peak Load Growth

2009-2012

13,512 GWh

230 GWh

Energy Efficiency Initiative (lifetime equivalent)***

80 MW

1 MW

Solar 4 All

11.6 MW

2009

Renewables and Energy Efficiency

Solar Loan

81 MW

Total

36

37

…which creates superior value to customers.

PSE&G provides the highest

reliability at below average cost...

SAIDI

VS

O&M

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

0

50

100

150

200

250

300

350

System Average Interruption Duration Index (SAIDI)

PSE&G

38

Our 2010 –

2012 capital plan calls for

investing $ 5.3 billion…

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2009

2010

2011

2012

NJ Infrastructure

Stimulus

Solar

Energy Efficiency

Transmission

Core Investment

…with contemporaneous recovery mechanisms approved

for $3.6 billion.

39

Branchburg

Branchburg

Roseland

Roseland

Hopatcong

Hopatcong

Hudson

Hudson

Transmission investment recovery…

Future Transmission project spending will be influenced by

PJM evaluation, potentially adding $1.5B in additional

projects over 2010 –

2015.

Various

$300

14 69kV Reliability projects thru 2012

Various

$200

20 Approved RTEP projects thru 2012

125 bps

2013

$1,100

Branchburg-Roseland-Hudson

125 bps

2012

$750

Susquehanna-Roseland

Incentive

In-Service

Spending

($ Millions)

…is supported by formula rate treatment and CWIP in rate base*.

* Approval of CWIP for 500kV backbone projects.

Transmission Projects

Future Projects

40

PSE&G’s investment program provides opportunity

for 14% annualized growth in rate base

PSE&G Rate Base

0

2,000

4,000

6,000

8,000

10,000

12,000

2009

2010

2011

2012

Gas Distribution

Electric Distribution

Electric Transmission

EMP

*

*

*projected rate base

41

New Jersey Electric & Gas Rate Agreement

--

A Balancing of Interests

51.2%

Equity Ratio

11.25%

Return on Equity

$6.2B

$2.3B

$3.89B

Rate Base

$222.5M

$74.0M

$148.5M

Increase

Total

Gas

Electric

51.2%

Equity Ratio

10.3%

Return on Equity

$6.0B

$2.27B

$3.75B

Rate Base

$100.0M

$26.5M

$73.5M

Increase

Total

Gas

Electric

Request

Agreement

…

in a difficult economic environment.

42

PSE&G Rate Agreement Terms

Rate

Agreement

approved

by

NJ

Board

of

Public

Utilities

(BPU)

on

June

7,

2010.

•

The agreement, an increase in electric revenue of $73.5 million and gas revenue

of $26.5 million, is based on a 10.3% return on equity and a 51.2% equity ratio

on a $6.0 billion rate base.

•

The agreement provides for a gas weather normalization clause.

•

The

agreement

does

not

provide

for

trackers

on

pension

costs

and

capital

expenditures.

•

The agreement requires PSE&G to return $122 million of Market Transition

Charges to customers over a 2-year period.

•

Agreement

supports

a

review

by

the

BPU

of

policy

on

consolidated

tax

accounting and recovery of Societal Benefits Charge.

43

Regulatory Reform

Working in New Jersey to build political and regulatory        

support for “Utility of the Future”...

…to create shareholder and customer value.

Transmission

Backbone

Projects

Smart Grid/PHEV

Infrastructure

T&D

Infrastructure

Replacement

Renewables

Development

Energy

Efficiency

Development

PSEG Energy Holdings –

Review and Outlook 

PSEG Energy Holdings

Simplifying the business and creating sustainable growth opportunities.

Streamlined business

and reduced financial risk

Maximizing the value of

the remaining portfolio

Transaction structures

and partnerships mitigate

financial risk

Capitalizing on

renewable opportunities

45

46

PSEG Energy Holdings…

PSEG Global

International assets sold*

Texas generating assets (2 –

1,000MW CCGTs) transferred to PSEG Power

Small remaining investment in domestic traditional generation joint venture

assets

PSEG Resources

Tax

exposure

reduced

by

$740

million

through

fourteen

LILO/SILO

lease

terminations,

including

Nuon

termination

in

January

2010

Maximizing value and minimizing risk for traditional leases and real estate

Long-term debt reduced by $1 billion over 2008 and 2009

Redemption of $642 million of Energy Holdings recourse debt

$368 million eliminated through bond exchange

$127 million of debt remaining

…

has streamlined its businesses and reduced its risk.

* Nominal investment in Venezuela remaining

PSEG Energy Holdings is focused on renewable

energy opportunities

Complementing PSEG portfolio by increasing earnings

base with structured, low risk investments

Disciplined evaluation of favorable markets for renewables

Transaction structure and partnerships designed to mitigate risk

Expand geographic and regulatory diversity

Attractive and predictable returns

Pursuing renewable strategy through three primary

vehicles

Solar Source LLC

Energy Storage and Power LLC

Garden State Offshore Energy LLC

47

Long-term off-take agreements with creditworthy counterparties

Capitalizing on existing renewable markets

Leveraging partnerships and alliances

A 2MW solar facility developed and installed in 2009

An additional 27MW in construction for completion in 2010

20-30

year

Power

Purchase

Agreements

for

energy,

capacity

and

green

attributes

Low risk Engineering, Procurement & Construction contracts

Projects that leverage the Investment Tax Credit

~$114M total investment to date

…

in the emergent solar industry.

PSEG Solar Source is building a portfolio

to take advantage of attractive

opportunities…

48

PSEG –

Financial Review and

Outlook  

50

PSEG…

…is

focused

on

providing

above

average

risk-adjusted

returns.

Top quartile performance

in operations with year-

over-year improvements

and cost management.

Maintain balance

between risk and return

through prudent balance

sheet management

Met/exceeded

earnings and financial

objectives

Securing premium value in

transparent, competitive

markets; implementing

mechanisms supporting cost

recovery in reasonable

timeframe

51

$3.12*

We have met or exceeded our earnings

objectives …

…

and expect 2010 earnings to remain strong.

Holdings

PSE&G

Power

Parent

Earnings per Share by Subsidiary

$2.68*

*See page 71

for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings

$3.00 -

$3.25

$2.80 -

$3.05

$2.30 -

$2.50

Guidance Range

$3.03*

$(0.12)

$0.14

$0.74

$1.92

$0.02

$(0.05)

$0.09

$0.07

$0.63

$0.71

$2.38

$2.30

2007

2008

2009

52

Earnings were strong in 2009…

…benefiting from pricing, cost control and risk mitigation.

$3.12

$3.03

2008*

PSE&G

Power

Holdings /

Enterprise

2009*

($0.08)

$0.08

$0.09

Interest  0.03

Debt Exchange

Premium Eliminated

in Consolidation 

0.04

Recontracting

and Lower Fuel

Expense  0.04

BGSS and

Wholesale Power

Trading  0.01

O&M  0.02

Interest  0.03

Depreciation and

Other  (0.02) 

Margin –

Gas,

Electric,

Transmission

and Appliance

Service  0.04

Weather  (0.01)

O&M  (0.06)

Depreciation

(0.03)

Taxes  (0.03)

Interest 0.01

2009 Lease Sales 

0.13

Lease Income 

(0.04)

Effective Tax Rate

and Other  (0.03)

Debt Exchange

Premium

Eliminated in

Consolidation 

(0.04)

Holdings:

Enterprise:

*See page 71

for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings

53

$0.84

0.01

(0.01)

(0.01)

(0.10)

$0.95

0.00

0.25

0.50

0.75

1.00

PSEG

EPS

Reconciliation

–

Q1

2010

versus

Q1 2009

Q1 2010       

operating

earnings*

Q1 2009       

operating

earnings*

Interest

Higher volume

offset by lower

prices   (0.05)

BGSS and trading 

(0.04)

O&M (0.02)

Increase in

effective tax rate

related to new

healthcare

legislation  (0.02)

Depreciation,

interest and other 

0.03

PSEG Power

Weather (0.02)

O&M (0.02)

Electric margin 

0.01

Transmission

margin  0.01

Other  0.01

PSE&G

PSEG Energy

Holdings

Enterprise

Lower project

earnings and

lower gains

on lease sales 

* See page 72 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

54

$2,091

$1,993

$163

$30

2008

2009

Sustainability Plan

Non-pension

O&M

Expense

(1)

Pension

Expense

Manage Staffing Levels

Control General and

Administrative Expenses

Capture Productivity

Gains

(1)

Excludes O&M related to PSE&G clauses

We have successfully managed our O&M …

…

through benchmarking efforts and operational excellence.

$2,121M

$2,156M

55

Cash Exposure Net

of $320M of IRS

Deposits

12/31/08

12/31/09

1/31/10

4

5

17

# of LILO/SILO Leases

2009 Activities

Terminated 12

LILO / SILO

leases

2010 Activities

Terminated 1 lease in

January

Pursue additional lease

termination opportunities

2008 Activities

Terminated 1

LILO / SILO lease

Exposure to our potential lease tax

liability…

…was reduced with aggressive asset management.

$660

~$1,200

~$270

~$590

$-

$500

$1,000

$1,500

56

$1,000

$1,250

$1,500

$1,750

$2,000

$2,250

2009

2010

2011

2012

PSEG Consolidated O&M

(1)

C.A.G.R. (’09 –’12) = 0.7%

(1)

Excludes O&M related to PSE&G clauses

Aggressive employee management of our

O&M, including 2010 wage freeze …

…and improving pension expense, will result in modest O&M growth.

*

*

*

*estimated

57

2009 Operating Earnings*

2010 Guidance

Rigorous cost controls, hedging strategy

and improved utility capital recovery…

…help mitigate the risk of weak prices in 2010.

$3.12

$3.00

-

$3.25

PSE&G:

Network Transmission Service (NTS) revenue increase for  

2010 from 2009 ~ $0.03 EPS

2009 earned ROE = 8.3%

1% change in Distribution earned ROE in 2010 ~ $0.07 EPS 

1% change in load in 2010 ~ $0.02 EPS

PSEG Power:

Revenue/Margin

Nuclear output fully contracted

Dark

Spread

change

of

$5/MWh

at

market

–

impact

of

$0.03-$0.07/share

Spark

Spread

change

of

$5/MWh

at

market

–

impact

of $0.08-$0.12/share

Operations

1% change

in

nuclear

capacity

factor

–

impact

of                  

$0.01-$0.03/share

O&M

1%

change

–

impact

of

~$0.01/share

Drivers

*See page 71

for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings

58

PSEG is shifting emphasis to growth

investments…

…to meet the requirements of the evolving energy markets.

Maintenance /

Regulatory

Investments

$2.5B

Growth

Investments

$5.2B

Capital Spending by Category

Total 2010-2012 Capital: $7.7 Billion

59

$0

$1,000

$2,000

$3,000

$4,000

$5,000

Sources

Uses

In 2009, we had substantial cash

generation …

PSEG Consolidated

2009 Sources and Uses

Power Cash

from Ops

Shareholder

Dividend

Gross Lease

Proceeds

PSE&G

Investment

…which was applied toward improving our financial profile.

Debt

Redemptions

Lease Termination

Taxes & IRS Deposit

Debt

Issuances

PSE&G Cash

from Ops(1)

Power

Investment

(1)

PSE&G Cash from Operations adjusts for securitization principal repayments of ~ $190M

Regulated investment

Eliminated Parent Long-term

debt and minimized Holdings’

debt

Reduced Tax Risk

60

Target = 51.2%

•

2009 FFO to Debt remained strong comfortably

above minimum threshold level

•

Decline from 2008 expected due to Power debt

exchange which reduced Holdings refinancing

risk

25%

30%

35%

40%

45%

50%

2007

2008

2009

PSEG Power

Funds from Operations / Total Debt

PSE&G

Regulatory Equity Ratio

Key credit measures support our planned

investment program

Our balance sheet also provides a platform for future growth.

40%

45%

50%

55%

2007

2008

2009

61

Sources

Uses

PSEG Power’s internally generated cash

flow enables Power…

…

to strengthen its long term balance sheet; support the

shareholder dividend; and, allows PSE&G to retain earnings for

growth.

Sources

Uses

Cash

from Ops

Net Debt

Redemption

Investment

Dividends

to Parent

for payment

to

shareholders

Power                                       

2009–2012 Sources and Uses

Cash from

Ops*

Net Debt

Issuance

Intercompany

Capital

Contribution

Investment

PSE&G                                       

2009-2012 Sources and Uses

* Cash from Operations adjusts for securitization principal repayments ~ $0.8B

62

With our current facilities, PSEG/Power

expects

to

have

approximately

$2.5

billion

of

credit capacity through 2012 ...

Non-PSE&G Credit Capacity

...and we will continue to ensure adequate liquidity.

Power facility reduced by $75M in 12/2011

PSEG facility reduced by $47M in 12/2011

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

2010

2011

2012

Power

Syndicated

Facility

-

1.60B

¹

Expires 12/2012

Power 2-Year Facility -

0.35B

Expires 7/2011

PSEG

Syndicated

Facility

-

1.00B

²

Expires 12/2012

1

2

63

PSEG value proposition

PSEG provides investors with a balanced portfolio of assets within a

shifting landscape for energy.

PSEG’s focus on operational excellence and O&M control will yield

benefits now, and over the long-term.

PSEG’s capital commitments are focused on improving reliability and

service quality at attractive risk-adjusted returns.

PSEG’s strong balance sheet and cash flow support a capital program

that will benefit shareholders through ongoing support of dividends and

opportunity for future growth.

64

PSEG is advantaged…

…

with a strong balance sheet and cash flow to pursue an investment

program that seizes the opportunities of tomorrow.

Right Assets,                       

Right Markets

Operational                     

Flexibility

Environmental

Infrastructure               

Improvements

Integrated business model with assets located close

to

load centers

Dispatch flexibility of operating assets and trading

capability

supports

margins

in

full-requirements

markets 

Environmentally responsible; pursuing investments in

renewables; nuclear uprates

Investments

to

improve

reliability

and

functionality

of

grid

2010

Appendix

66

Q1 Operating Earnings by Subsidiary

$    482

(4)

11

123

$   352

2009

$   425

3

7

117

$   298

2010

Operating Earnings

Earnings per Share

--

0.01

Enterprise

$   0.95

$   0.84

Operating Earnings*

0.02

0.01

PSEG Energy Holdings

0.24

0.23

PSE&G

$   0.69

$   0.59

PSEG Power

2009

2010

$ millions (except EPS)

Quarter ended March 31

* See page 72 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

67

PSEG Power –

Gross Margin Performance

$0

$25

$50

$75

2010

2009

$63

$55

Quarter ended March 31

Power’s gross margin affected by lower pricing and customer migration which offset 7%

increase in production.

Combined cycle gas units maintained strong contribution to operations.

No change versus year ago; higher prices

offset decline in generation.

$18

Texas

Regional Performance

$12

$27

$748

Q1 Gross

Margin ($M)

Q1 Performance

Region

Increase in generation supported margin.

New York

Contribution to margin hurt by lower prices.

New

England

Q1 contribution to gross margin ($M)

declined 5.0% versus year ago; decline in

price and migration offset increase in

production.

PJM

PSEG Power Gross Margin ($/MWh)*

* Excludes Texas

Increase in generation was predominantly from combined cycle and

coal with continued strong nuclear.

68

Projects to NY

Neptune HVDC project (685

MW) Sayreville to Long Island

Linden VFT project (330 MW)

Linden to Staten Island

Bergen O66 project (670 MW*)

Bergen to ConEd's

West 49th

St

Bergen U2-100 project (800

MW**) connecting Bergen to

NY

Projects to NJ

PSE&G’s evaluation of

the proposed backbone

Transmission projects:

Susquehanna -

Roseland

Branchburg-

Roseland-Hudson***

As

a

result

NJ

will

need

new

generation,

DSM

or

additional

transmission

imports.

Total Import

Capability

~ 2,000 MW

Total Export

Capability

~ 2,500 MW

2010-2020 NJ Summer Peak

Growth Rate = 1.6%

Sources: Imports: PSE&G Estimates; Exports:  PJM 2009 RTEP;  Load Growth: PJM 2010 Load Forecast Report

NJ’s load is expected to grow 3,450MW by

2020, with net imports decreasing ~500MW.

* Project has firm contract for 320MW

**

Project

in

queue

–

no

firm

contracts

***PJM

has

specified a

June

2013

in-service

date

for

this

project,

though

PJM

has

publicly

indicated

that

the

in-service

date

may

be

delayed

and

that

alternatives

to

the

project

are

being considered.

69

$0

$100

$200

$300

$400

$500

$600

$700

$0

$10

$20

$30

$40

CO

2

Price

($/ton)

While the prospects for a

cap and trade program may be delayed…

…Power remains well positioned to capture value if implemented.

CO

2

$/Ton Impact on PJM Prices and Power’s EBITDA

The impact on electric prices moderates at higher CO

2

prices as:

•

the fleet dispatch changes, and

•

the CO

2

intensity of the grid goes down.

Illustration at $20 CO

2

:

(2008 Data)

62 TWh

x ~ $11 to $14/MWh

~ $680 –

$870 M revenue

23M tons

x $20/ton

~ $460 M expense

70

Debt Maturity Profile as of May 2010

Note: Excludes securitized debt.

0

100

200

300

400

500

600

700

800

900

1,000

1,100

ENTERPRISE

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

HOLDINGS (Non-Recourse)

22

3

4

3

1

1

7

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

HOLDINGS (Recourse)

0

127

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

POWER

0

605

666

300

250

300

303

0

0

0

420

0

0

0

0

0

0

19

0

0

0

525

0

0

0

0

0

40

0

0

0

0

45

PSE&G excl. Securitization

0

0

300

725

250

300

171

0

400

0

9

134

0

0

0

23

0

0

0

0

0

0

150

0

0

250

250

365

0

250

300

0

0

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2010 Financing Activity

•

PSE&G maturity of $300M in March 2010

•

PSE&G issued $300M due 2040

•

PSE&G issued $300M due 2015

•

Power remarketed $44M of tax-exempt bonds due 2042

•

Power called $48M due 2013 and $161M due 2014

•

Power issued $300M due 2013

•

Power issued $250M due 2020

•

Power exchanged $195M due 2011 for $156M due 2020 plus

cash of $52M

71

Items Excluded from Income from Continuing

Operations to Reconcile to Operating Earnings

Please see Page 3 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

2007

2006

2005

Earnings Impact ($ Millions)

Gain (Loss) on Nuclear Decommissioning Trust (NDT)

Fund Related Activity

9

$             

(71)

$           

12

$             

11

40

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

(25)

16

10

28

(9)

Lease Transaction Reserves

-

(490)

-

-

-

Net Reversal of Lease Transaction Reserves

29

-

-

-

-

Asset Sales and Impairments

-

(13)

(32)

(178)

-

Premium on Bond Redemption

-

(1)

(28)

(7)

(6)

Merger-related Costs

-

-

-

(8)

(32)

Total Pro-forma adjustments

13

$           

(559)

$          

(38)

$            

(154)

$           

(7)

$              

Fully Diluted Average Shares Outstanding (in Millions)

507

508

509

505

489

Per Share Impact (Diluted)

Gain (Loss) on Nuclear Decommissioning Trust (NDT)

Fund Related Activity

0.02

$         

(0.14)

$         

0.02

$           

0.02

$           

0.08

$           

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

(0.05)

0.03

0.02

0.06

(0.02)

Lease Transaction Reserves

-

(0.96)

-

-

-

Net Reversal of Lease Transaction Reserves

0.05

-

-

-

-

Asset Impairments

-

(0.03)

(0.06)

(0.35)

-

Premium on Bond Redemption

-

-

(0.06)

(0.01)

(0.01)

Merger-related Costs

-

-

-

(0.02)

(0.07)

Total Pro-forma adjustments

0.02

$         

(1.10)

$         

(0.08)

$          

(0.30)

$          

(0.02)

$          

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

For the Twelve Months Ended

December 31,

Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings

(Unaudited)

72

Items Excluded from Income from Continuing

Operations to Reconcile to Operating Earnings

Please see Page 3 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

2010

2009

Earnings Impact ($ Millions)

Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity

10

$        

(23)

$       

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

56

(15)

Total Pro-forma adjustments

66

$        

(38)

$       

Fully Diluted Average Shares Outstanding (in Millions)

507

507

Per Share Impact (Diluted)

Gain (Loss) on NDT Fund Related Activity

0.02

$     

(0.04)

$    

Gain (Loss) on MTM

0.11

(0.03)

Total Pro-forma adjustments

0.13

$     

(0.07)

$    

For the Three Months Ended

March 31,

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Reconciling

Items

Excluded

from

Continuing

Operations

(a)

to Compute Operating Earnings

(Unaudited)

(a) Income from Continuing Operations for the three months ended March 31, 2010 and 2009 is equal to Net Income.