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) July 30, 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 July 30, 2010, PSEG announced unaudited financial results for the three months and six months ended June 30, 2010. A copy of the earnings release dated July 30, 2010 is furnished as Exhibit 99 to this Form 8-K.

Item 7.01 Regulation FD Disclosure

PSEG, Power and PSE&G

On July 30, 2010, PSEG conducted an earnings call regarding its 2010 second quarter 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 July 30, 2010 announcing second quarter 2010 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: July 30, 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: July 30, 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: July 30, 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
•   Carlotta Chan Lane, Manager – Investor Relations	Phone: 973-430-6596

July 30, 2010

PSEG ANNOUNCES 2010 SECOND QUARTER RESULTS

$0.44 PER SHARE FROM NET INCOME

$0.65 PER SHARE OF OPERATING EARNINGS

Company Maintains 2010 Operating Earnings Guidance of $3.00-$3.25 Per Share

Susquehanna-Roseland In-Service Date Delayed

Public Service Enterprise Group (PSEG) reported today Second Quarter 2010 Net Income and Income from Continuing Operations of $224 million or $0.44 per share as compared to $311 million or $0.61 per share for the Second Quarter of 2009. Operating Earnings for the second quarter of 2010 were $331 million or $0.65 per share compared to the Second Quarter of 2009 Operating Earnings of $318 million or $0.63 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), Mark-to-Market (MTM) accounting and other material one time items. The table below provides a reconciliation of PSEG’s Net Income to Operating Earnings (a non-GAAP measure) for the first 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)

Second Quarter Comparative Results

2010 and 2009

	Income ($millions)				Diluted Earnings Per Share
	2010		2009		2010		2009
Net Income/Income from Continuing Ops	$	224	$	311	$	0.44	$	0.61
Less: Excluded Items		107		7		0.21		0.02
Operating Earnings (Non-GAAP)	$	331	$	318	$	0.65	$	0.63
				Avg. Shares		507M		507M

“Although our results continue to be affected by weak economic conditions and low energy prices, our employees’ dedication to operational efficiency continues to provide important support for our earnings” said Ralph Izzo, chairman, president and chief executive officer of PSEG. He went on to say, “with the implementation of an increase in electric and gas rates at the start of the summer and extremely warm weather conditions, we are reaffirming our operating earnings guidance for 2010 of $3.00 - $3.25 per share.” Operating Earnings guidance by company for the full year is as follows:

Operating Earnings

	2010E	2009A
PSEG Power	$1,060 - $1,135	$1,205
PSE&G	$425 - $455	$321
PSEG Energy Holdings	$30 - $40	$43
Parent	$5 - $15	$10
Total	$1,520 - $1,645	$1,579
Earnings Per Share	$3.00 - $3.25	$3.12

Ralph Izzo indicated that PSE&G has notified the PJM Interconnection that the in-service date for the eastern portion of the Susquehanna-Roseland transmission line has been delayed by 2 years to 2014 with the in-service date for the western portion of the line delayed until 2015. He added “we are disappointed by the delay, but look forward to meeting the region’s reliability requirements in partnership with our regulators and PJM.” The delays are due to on-going environmental permit reviews.

Operating Earnings Review and Outlook by Operating Subsidiary

See Attachment 6 for detail regarding the quarter-over-quarter reconciliations for each of PSEG’s businesses.

PSEG Power

PSEG Power reported operating earnings of $239 million ($0.47 per share) for the second quarter of 2010 compared with operating earnings of $253 million ($0.50 per share) for the second quarter of 2009. PSEG Power’s operating earnings for 2009 have been adjusted to reflect the inclusion of the results for the Texas gas-fired generating assets transferred from PSEG Energy Holdings during the fourth quarter of last year.

PSEG Power’s results in the second quarter of 2010 were supported by a 20% increase in generation. Demand increased due to warmer than normal weather which more than offset the impact on earnings from a decline in pricing aiding earnings by $0.02 per share. Lower realized pricing includes the effect of customer migration from BGS. Although the level of customer migration is consistent with the Company’s expectations, market prices for energy were lower than anticipated. As a result, the impact on margins from customer migration away from BGS reduced earnings by $0.01 per share quarter-over-quarter. Included in Power’s fuel expense is an impairment of excess sulfur dioxide emissions allowances which reduced earnings by $0.02 per share. A decline in margin associated with other trading related activity reduced Power’s earnings during the quarter by $0.02 per share. A quarter-over-quarter decline in depreciation and O&M more than offset an increase in interest expense aiding earnings by $0.01 per share. An increase in the effective tax rate reduced earnings by $0.02 per share.

The nuclear generating units operated by PSEG Power performed at an average capacity factor of 88% during the quarter resulting in a capacity factor of 92.5% for the first half of the year. The results for the quarter include the effect of a 25-day refueling outage at Salem 1. Including Power’s 50% interest in the Peach Bottom units, the fleet operated at an average capacity factor during the quarter of 92.6%. Performance in the second half of the year, however, will be impacted by an unplanned 17-day outage at Salem 1 during the month of July to repair a transformer. The unit returned to service on July 24. The unplanned outage is expected to reduce Salem’s capacity factor for the full year by 5%, however, given year-to-date positive results for the rest of the nuclear fleet, the outage is expected to lower the full year capacity factor for the fleet by approximately 0.5%.

Generation from the coal-fired fleet increased 77% during the quarter in response to weather-related demand. The combined cycle fleet benefited from market opportunities, operating at an average capacity factor of 53% in the quarter.

Power’s operating earnings for 2010 are forecast at $1,060 - $1,135 million compared to operating earnings for 2009 of $1,205 million. Full year operating earnings will be affected by continued lower forward energy pricing.

Power’s coal and nuclear production is 100% hedged for 2010 at an average price of $72 per MWh versus average hedge prices in place for 2009 of $78 per MWh. Power continues to hedge its expected generation in future years consistent with past practice. At mid-2010, approximately 66% of Power’s anticipated coal and nuclear generation is hedged for 2011 with hedges in place for 26% of Power’s anticipated coal and nuclear generation for 2012.

Power’s full year earnings comparisons will also be affected by greater than anticipated erosion in margins from BGS customer migration as well as volume declines associated with other full requirement contracts. The forecast includes the impact of the unscheduled 17-day outage at Salem 1. These items will be partially offset by an increase in generation volume, a decline in depreciation expense and continued focus on O&M. In addition, Power’s full year earnings will reflect the impact of a one-time increase in taxes related to the enactment of health care legislation recognized in March 2010 along with the impairment of sulfur-dioxide emissions allowances.

PSE&G

PSE&G reported operating earnings of $75 million ($0.15 per share) for the second quarter of 2010 compared with operating earnings of $43 million ($0.09 per share) for the second quarter of 2009.

PSE&G’s results were driven by warmer than normal weather. The THI Index which takes temperature and humidity into account was 41% above normal during the second quarter and 131% higher than year ago levels. An increase in demand related revenues aided earnings by $0.03 per share; an increase in weather related sales added $0.01 per share. Higher transmission revenues added $0.01 per share. A reduction in operating and maintenance expense was offset by a one-time $0.02 per share charge related to expenses disallowed in the rate case. A reduction in the effective tax rate improved earnings by $0.01 per share.

PSE&G’s weather normalized electric sales showed a slight improvement during the quarter as increased sales to the residential and commercial sectors were largely offset by continued weakness in the industrial sector.

PSE&G received approval from the New Jersey Board of Public Utilities (BPU) for an increase in electric rates of $73.5 million on June 7, 2010; the BPU subsequently approved an increase in gas rates of $26.5 million on June 18. The rate increase provides for a 10.3% return on equity and a 51.2% equity ratio. As part of the rate agreement, the rate of return authorized in this agreement will also apply to the investment programs approved in 2009. PSE&G also agreed to refund $122 million to electric customers over a 24-month period to resolve a long-standing issue associated with the state’s de-regulation law. The refund was recognized in the second quarter, and resulted in a charge of $0.14 per share against PSE&G’s net income. This item was excluded from our operating earnings.

PSE&G’s operating earnings for 2010 are forecast at $425 million – $455 million compared to 2009 operating earnings of $321 million. Operating earnings will be influenced by a full year of return on capital projects approved by the BPU in 2009, the increase in electric and gas distribution rates, an increase in transmission revenue effective at the beginning of the year, growth in weather normalized sales and focus on operating expenses.

PSE&G notified PJM that it has not obtained certain environmental approvals that are required for completion of the Eastern and Western segments of the Susquehanna – Roseland transmission line. Consequently, at this time, we do not expect the Eastern portion of the line to be in service before June 2014, and we do not expect the Western portion to be in service before June 2015.

PSEG Energy Holdings

PSEG Energy Holdings reported operating earnings of $12 million ($0.02 per share) for the second quarter of 2010 versus operating earnings of $21 million ($0.04 per share) during the second quarter of 2009. The results for 2009 have been adjusted to reflect the transfer of the Texas gas-fired generating assets to PSEG Power during the fourth quarter of 2009.

The decline in operating earnings for the quarter reflects lower gains on lease sales and lower project earnings which together reduced quarter over quarter earnings by $0.05 per share. Tax benefits primarily associated with the start-up of solar projects in Ohio and Florida added $0.02 per share to earnings. A decline in interest expense aided earnings comparisons by $0.01 per share.

PSEG Energy Holdings terminated one cross-border lease during the quarter. The successful termination reduced Holdings potential cash tax liability to $550 million at the end of June. In addition, Holdings has deposited $320 million with the IRS to defray potential interest costs associated with this disputed tax liability, reducing our potential cash exposure to $230 million.

Holdings operating earnings for 2010 are forecast at $30 million to $40 million compared to 2009 operating earnings of $43 million. The decline reflects the loss of income on terminated leases, and a reduction in gains from the termination of leases.

Financings

PSEG completed several financings during the quarter at Power and PSE&G with funds used to finance our capital expenditures and redeem higher cost debt facilities.

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, consequences 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. When used herein, the words “anticipate”, “intend”, “estimate”, “believe”, “expect”, “plan”, “should”, “hypothetical”, “potential”, “forecast”, “project”, variations of such words and similar expressions are intended to identify forward-looking statements. Although we believe that our expectations are based on reasonable assumptions, they are subject to risks and uncertainties and we can give no assurance they will be achieved. The results or developments projected or predicted in these statements may differ materially from what may actually occur. 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, transmission planning 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 in receipt of necessary permits and approvals for our construction and development activities.

• 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 customer usage patterns.

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 Three Months Ended June 30,						For the Six Months Ended June 30,
	2010			2009			2010			2009
Earnings Results ($ Millions)
PSEG Power	$	239		$	253		$	537		$	606
PSE&G		75			43			192			166
PSEG Energy Holdings		12			21			19			31
PSEG		5			1			8			(3	)
Operating Earnings	$	331		$	318		$	756		$	800
Reconciling Items(a)		(107	)		(7	)		(41	)		(45	)
Net Income	$	224		$	311		$	715		$	755
Fully Diluted Average Shares Outstanding (in Millions)		507			507			507			507
Per Share Results (Diluted)
PSEG Power	$	0.47		$	0.50		$	1.06		$	1.20
PSE&G		0.15			0.09			0.38			0.33
PSEG Energy Holdings		0.02			0.04			0.03			0.06
PSEG		0.01			—			0.02			(0.01	)
Operating Earnings	$	0.65		$	0.63		$	1.49		$	1.58
Reconciling Items(a)		(0.21	)		(0.02	)		(0.08	)		(0.09	)
Net Income	$	0.44		$	0.61		$	1.41		$	1.49

(a) See attachment 12 for details of items excluded from Income from Continuing Operations to compute Operating Earnings. Income from Continuing Operations for the three months and six months ended June 30, 2010 and 2009 is equal to Net Income.

Note:

Income from Continuing Operations includes preferred stock dividends relating to PSE&G of $1 million for the three months ended June 30, 2009.

Income from Continuing Operations includes preferred stock dividends relating to PSE&G of $1 million and $2 million for the six months ended June 30, 2010 and 2009, respectively.

Attachment 2

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidating Statements of Operations

(Unaudited, $ Millions)

	For the Three Months Ended June 30, 2010
	PSEG			OTHER (a)			PSEG POWER			PSE&G			PSEG ENERGY HOLDINGS
OPERATING REVENUES	$	2,455		$	(459	)	$	1,358		$	1,536		$	20
OPERATING EXPENSES
Energy Costs		1,147			(457	)		687			917			—
Operation and Maintenance		610			(11	)		269			343			9
Depreciation and Amortization		233			5			48			177			3
Taxes Other Than Income Taxes		28			—			—			28			—
Total Operating Expenses		2,018			(463	)		1,004			1,465			12
OPERATING INCOME		437			4			354			71			8
Income from Equity Method Investments		5			—			—			—			5
Other Income and Deductions		35			1			30			3			1
Other Than Temporary Impairments		(5	)		—			(5	)		—			—
Interest Expense		(120	)		4			(42	)		(80	)		(2	)
Preferred Stock Dividends		—			—			—			—			—
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		352			9			337			(6	)		12
Income Tax (Expense) Benefit		(128	)		(4	)		(133	)		9			—
NET INCOME	$	224		$	5		$	204		$	3		$	12
Reconciling Items Excluded from Continuing Operations(C) :		(107	)		—			(35	)		(72	)		—
OPERATING EARNINGS	$	331		$	5		$	239		$	75		$	12
	For the Three Months Ended June 30, 2009
	PSEG			OTHER  (a)			PSEG POWER			PSE&G			PSEG ENERGY HOLDINGS
OPERATING REVENUES	$	2,560		$	(541	)	$	1,363		$	1,643		$	95
OPERATING EXPENSES
Energy Costs		1,067			(539	)		627			979			—
Operation and Maintenance		627			(8	)		281			344			10
Depreciation and Amortization		203			4			53			144			2
Taxes Other Than Income Taxes		26			—			—			26			—
Total Operating Expenses		1,923			(543	)		961			1,493			12
OPERATING INCOME		637			2			402			150			83
Income from Equity Method Investments		1			—			—			—			1
Other Income and Deductions		47			—			42			3			2
Other Than Temporary Impairments		(1	)		(1	)		—			—			—
Interest Expense		(133	)		(2	)		(39	)		(80	)		(12	)
Preferred Stock Dividends		—			1			—			(1	)		—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (b)		551			—			405			72			74
Income Tax (Expense) Benefit		(240	)		1			(159	)		(29	)		(53	)
NET INCOME	$	311		$	1		$	246		$	43		$	21
Reconciling Items Excluded from Continuing Operations(C) :		(7	)		—			(7	)		—			—
OPERATING EARNINGS	$	318		$	1		$	253		$	43		$	21

(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 three months ended June 30, 2009.

(c) See attachment 12 for details of items excluded from Income from Continuing Operations to compute Operating Earnings. Income from Continuing Operations for the three months ended June 30, 2010 and 2009 is equal to Net Income.

Attachment 3

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidating Statements of Operations

(Unaudited, $ Millions)

	For the Six Months Ended June 30, 2010
	PSEG			OTHER (a)			PSEG POWER			PSE&G			PSEG ENERGY HOLDINGS
OPERATING REVENUES	$	6,135		$	(1,562	)	$	3,661		$	3,980		$	56
OPERATING EXPENSES
Energy Costs		2,915			(1,560	)		2,018			2,457			—
Operation and Maintenance		1,314			(19	)		554			757			22
Depreciation and Amortization		465			9			96			354			6
Taxes Other Than Income Taxes		70			—			—			70			—
Total Operating Expenses		4,764			(1,570	)		2,668			3,638			28
OPERATING INCOME		1,371			8			993			342			28
Income from Equity Method Investments		8			—			—			—			8
Other Income and Deductions		62			(2	)		55			7			2
Other Than Temporary Impairments		(6	)		—			(6	)		—			—
Interest Expense		(236	)		7			(82	)		(157	)		(4	)
Preferred Stock Dividends		—			1			—			(1	)		—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (b)		1,199			14			960			191			34
Income Tax Expense		(484	)		(6	)		(392	)		(71	)		(15	)
NET INCOME	$	715		$	8		$	568		$	120		$	19
Reconciling Items Excluded from Continuing Operations(C) :		(41	)		—			31			(72	)		—
OPERATING EARNINGS	$	756		$	8		$	537		$	192		$	19
	For the Six Months Ended June 30, 2009
	PSEG			OTHER (a)			PSEG POWER			PSE&G			PSEG ENERGY HOLDINGS
OPERATING REVENUES	$	6,480		$	(1,864	)	$	3,827		$	4,378		$	139
OPERATING EXPENSES
Energy Costs		3,135			(1,861	)		2,158			2,838			—
Operation and Maintenance		1,301			(16	)		555			739			23
Depreciation and Amortization		410			8			104			293			5
Taxes Other Than Income Taxes		70			—			—			70			—
Total Operating Expenses		4,916			(1,869	)		2,817			3,940			28
OPERATING INCOME		1,564			5			1,010			438			111
Income from Equity Method Investments		11			—			—			—			11
Other Income and Deductions		63			(7	)		62			3			5
Other Than Temporary Impairments		(61	)		(1	)		(60	)		—			—
Interest Expense		(278	)		(6	)		(88	)		(159	)		(25	)
Preferred Stock Dividends		—			2			—			(2	)		—
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (b)		1,299			(7	)		924			280			102
Income Tax (Expense) Benefit		(544	)		4			(363	)		(114	)		(71	)
NET INCOME (LOSS)	$	755		$	(3	)	$	561		$	166		$	31
Reconciling Items Excluded from Continuing Operations(C) :		(45	)		—			(45	)		—			—
OPERATING EARNINGS (LOSS)	$	800		$	(3	)	$	606		$	166		$	31

(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 and $2 million for the six months ended June 30, 2010 and 2009, respectively.

(c) See attachment 12 for details of items excluded from Income from Continuing Operations to compute Operating Earnings. Income from Continuing Operations for the six months ended June 30, 2010 and 2009 is equal to Net Income.

Attachment 4

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Capitalization Schedule

(Unaudited, $ Millions)

	June 30, 2010			December 31, 2009
DEBT
Commercial Paper and Loans	$	390		$	530
Long-Term Debt		7,456			6,781
Securitization Debt		1,251			1,343
Project Level, Non-Recourse Debt		40			42
Total Debt		9,137			8,696
SUBSIDIARY’S PREFERRED STOCK WITHOUT MANDATORY REDEMPTION		—			80
STOCKHOLDERS’ EQUITY
Common Stock		4,786			4,788
Treasury Stock		(593	)		(588	)
Retained Earnings		5,072			4,704
Accumulated Other Comprehensive Loss		(139	)		(116	)
Total Common Stockholders’ Equity		9,126			8,788
Noncontrolling Interests - Equity Investments		9			10
Total Equity		9,135			8,798
Total Capitalization	$	18,272		$	17,574

Attachment 5

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, $ Millions)

	For the Six Months Ended June 30,
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	715		$	755
Adjustments to Reconcile Net Income to Net Cash Flows From Operating Activities		(195	)		34
NET CASH PROVIDED BY OPERATING ACTIVITIES		520			789
NET CASH USED IN INVESTING ACTIVITIES		(755	)		(210	)
NET CASH USED IN FINANCING ACTIVITIES		(58	)		(507	)
Net Increase (Decrease) in Cash and Cash Equivalents		(293	)		72
Cash and Cash Equivalents at Beginning of Period		350			321
Cash and Cash Equivalents at End of Period	$	57		$	393

Attachment 6

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Quarter-over-Quarter EPS Reconciliation

June 30, 2010 vs. June 30, 2009

(Unaudited)

Attachment 7

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Year-over-Year EPS Reconciliation

June 30, 2010 vs. June 30, 2009

(Unaudited)

Attachment 8

PSEG POWER LLC

Generation Measures

(Unaudited)

	GWhr Breakdown				GWhr Breakdown
	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Nuclear - NJ	5,027		4,738		10,371		10,227
Nuclear - PA	2,460		2,458		4,897		4,787
Total Nuclear	7,487		7,196		15,268		15,014
Fossil - Coal - NJ*	1,044		220		2,172		972
Fossil - Coal - PA	1,335		1,233		2,766		2,666
Fossil - Coal - CT	216		17		577		510
Total Coal	2,595		1,470		5,515		4,148
Fossil - Oil & Natural Gas - NJ	2,834		2,082		5,505		3,902
Fossil - Oil & Natural Gas - NY	1,239		805		2,094		1,510
Fossil - Oil & Natural Gas - CT	17		—		21		99
Fossil - Oil & Natural Gas - TX	2,010		1,937		3,543		3,533
Total Oil & Natural Gas	6,100		4,824		11,163		9,044
	16,182		13,490		31,946		28,206
	% Generation by Fuel Type				% Generation by Fuel Type
	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Nuclear - NJ	31	%	35	%	33	%	36	%
Nuclear - PA	15	%	18	%	15	%	17	%
Total Nuclear	46	%	53	%	48	%	53	%
Fossil - Coal - NJ*	7	%	2	%	7	%	3	%
Fossil - Coal - PA	8	%	9	%	8	%	10	%
Fossil - Coal - CT	1	%	0	%	2	%	2	%
Total Coal	16	%	11	%	17	%	15	%
Fossil - Oil & Natural Gas - NJ	18	%	15	%	17	%	14	%
Fossil - Oil & Natural Gas - NY	8	%	7	%	7	%	5	%
Fossil - Oil & Natural Gas - CT	0	%	0	%	0	%	0	%
Fossil - Oil & Natural Gas - TX	12	%	14	%	11	%	13	%
Total Oil & Natural Gas	38	%	36	%	35	%	32	%
	100	%	100	%	100	%	100	%

* Includes Pumped Storage. Pumped Storage accounted for <1% of total generation for the three and six months ended June 30, 2010 and 2009.

Attachment 9

PUBLIC SERVICE ELECTRIC & GAS COMPANY

Retail Sales and Revenues

(Unaudited)

June 30, 2010

Electric Sales and Revenues

	Three Months Ended		Change vs. 2009		Six Months Ended		Change vs. 2009
Sales (millions kwh)
Residential		3,364	17.7	%		6,531	7.2	%
Commercial & Industrial		7,093	2.6	%		14,066	0.8	%
Street Lighting		82	-1.0	%		185	-0.4	%
Other		2	3.8	%		5	2.0	%
Total		10,541	6.9	%		20,787	2.7	%
Revenue ($ millions)
Residential	$	529	13.4	%	$	1,066	5.9	%
Commercial & Industrial		571	-19.1	%		1,146	-17.7	%
Street Lighting		18	1.0	%		39	0.4	%
Other Operating Revenues*		75	7.6	%		167	22.6	%
Total	$	1,193	-5.3	%	$	2,418	-6.1	%
	Three Months Ended		Change vs. 2009		Six Months Ended		Change vs. 2009
Weather Data
THI Hours - Actual		5,495	131.4	%		5,495	131.4	%
THI Hours - Normal		3,888				3,925

* 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)

June 30, 2010

Gas Sold and Transported

	Three Months Ended		Change vs. 2009		Six Months Ended		Change vs. 2009
Sales (millions therms)
Residential Sales		156	-12.0	%		801	-9.2	%
Commercial & Industrial - Firm Sales		58	-15.0	%		301	-10.2	%
Commercial & Industrial - Interr. & Cogen		41	-9.5	%		76	-17.6	%
Total		255	-12.4	%		1,178	-10.0	%
Gas Transported - Firm Sales		71	-9.9	%		269	-1.2	%
Gas Transported - Non-Firm		240	116.3	%		442	47.3	%
Revenue ($ millions)
Residential Sales	$	129	-21.3	%	$	662	-23.9	%
Commercial & Industrial - Firm Sales		34	-6.6	%		215	-6.6	%
Commercial & Industrial - Interr. & Cogen		22	6.8	%		44	-9.7	%
Other Operating Revenues*		37	11.2	%		75	10.8	%
Total	$	222	-12.7	%	$	996	-18.1	%
Gas Transported	$	121	-6.2	%	$	565	-3.7	%
	Three Months Ended		Change vs. 2009		Six Months Ended		Change vs. 2009
Weather Data
Degree Days - Actual		169	-37.5	%		2,146	-13.5	%
Degree Days - Normal		295				2,352

* Primarily Appliance Service.

Attachment 11

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Statistical Measures

(Unaudited)

	For the Three Months Ended June 30						For the Six Months Ended June 30
	2010			2009			2010			2009
Weighted Average Common Shares Outstanding (000’s)
Basic		506,109			505,990			506,030			505,988
Diluted		507,091			506,936			507,119			506,812
Stock Price at End of Period							$	31.33		$	32.63
Dividends Paid per Share of Common Stock	$	0.3425		$	0.3325		$	0.6850		$	0.6650
Dividend Payout Ratio*								44.6	%		41.7	%
Dividend Yield								4.3	%		4.0	%
Price/Earnings Ratio*								10.3			10.4
Rate of Return on Average Common Equity*								17.4	%		20.6	%
Book Value per Common Share							$	18.04		$	16.58
Market Price as a Percent of Book Value								174	%		197	%
Total Shareholder Return		7.3	%		11.9	%		-3.7	%		14.5	%

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

Attachment 12

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Reconciling Items Excluded from Continuing Operations^(a) to Compute Operating Earnings

(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Twelve Months Ended December 31,
Pro-forma Adjustments, net of tax	2010			2009			2010			2009			2009
Earnings Impact ($ Millions)
Gain (Loss) on Nuclear Decommissioning Trust (NDT)	$	10		$	17		$	20		$	(6	)	$	9
Fund Related Activity (PSEG Power)
Gain (Loss) on Mark-to-Market (MTM) (PSEG Power)		(45	)		(24	)		11			(39	)		(25	)
Net Reversal of Lease Transaction Reserves (Energy Holdings)		—			—			—			—			29
Market Transition Charge Refund (PSE&G)		(72	)		—			(72	)		—			—
Total Pro-forma adjustments	$	(107	)	$	(7	)	$	(41	)	$	(45	)	$	13
Fully Diluted Average Shares Outstanding (in Millions)		507			507			507			507			507
Per Share Impact (Diluted)
Gain (Loss) on NDT Fund Related Activity (PSEG Power)	$	0.02		$	0.03		$	0.04		$	(0.01	)	$	0.02
Gain (Loss) on MTM (PSEG Power)		(0.09	)		(0.05	)		0.02			(0.08	)		(0.05	)
Net Reversal of Lease Transaction Reserves (Energy Holdings)		—			—			—			—			0.05
Market Transition Charge Refund (PSE&G)		(0.14	)		—			(0.14	)		—			—
Total Pro-forma adjustments	$	(0.21	)	$	(0.02	)	$	(0.08	)	$	(0.09	)	$	0.02

(a) Income from Continuing Operations for the three and six months ended June 30, 2010 and 2009, and the twelve months ended December 31, 2009 is equal to Net Income.

EX-99.1

Public Service Enterprise Group

PSEG Earnings Conference Call

2

nd

Quarter

2010

July 30, 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,

consequences

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.

When

used

herein,

the

words

“anticipate”,

“intend”,

“estimate”,

“believe”,

“expect”,

“plan”,

“should”,

“hypothetical”,

“potential”,

“forecast”,

“project”,

variations

of

such

words

and

similar

expressions

are

intended

to

identify

forward-looking

statements.

Although

we

believe

that

our

expectations

are

based

on

reasonable

assumptions,

they

are

subject

to

risks

and

uncertainties

and

we

can

give

no

assurance

they

will

be

achieved.

The

results

or

developments

projected

or

predicted

in

these

statements

may

differ

materially

from

what

may

actually

occur.

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,

transmission

planning

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

in

receipt

of

necessary

permits

and

approvals

for

our

construction

and

development

activities.

•

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

customer

usage

patterns.

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), Mark-to-Market (MTM)

accounting, and other material one-time items. 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

2010 Q2 Review

Ralph Izzo

Chairman, President and Chief Executive Officer

*

*

*

*

*

*

*

*

*

*

4

Q2 2010 Earnings Summary

$ 318

$ 331

Operating Earnings

$ 311

$ 224

Income from Continuing Operations /              

Net Income

(7)

(107)

Reconciling Items, Net of Tax

$ 0.63

$ 0.65

EPS from Operating Earnings*

2009

2010

$ millions (except EPS)

Quarter ended June 30              

* See page 33 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

5

Q2 2010 Earnings Summary

$ 800

$ 756    

Operating Earnings

$ 755

$ 715

Income from Continuing Operations /              

Net Income

(45)

(41)      

Reconciling Items, Net of Tax

$ 1.58

$ 1.49

EPS from Operating Earnings*

2009

2010

$ millions (except EPS)

Six months ended June 30           

* See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

6

PSEG –

Q2 2010

Focused on operational excellence

PSE&G focused on meeting reliability

Power’s generation volumes increased 20% quarter-over-quarter

Foundation laid for the future

BPU approved settlement of PSE&G electric and gas rate case

PSE&G aligning capital and O&M with revenue to ensure capability

of earning authorized return

Investments for the future

Susquehanna-Roseland in-service date delayed by 2 years

PSE&G assessing reliability enhancing transmission investments

Meeting Environmental Standards:  Completion of BET construction

on schedule for year-end 2010

Financing position

Debt financings lowered cost and extended maturities

Lease termination reduced potential tax liability to $550 million

$415 million contributed to pension trust

Focused on building a financially strong, environmentally friendly energy

business

7

2008 Operating Earnings*

2009 Operating Earnings*

2010 Guidance

$3.00 -

$3.25

PSEG –

Maintaining 2010 Guidance

$3.03

* See page 35 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.                    

$3.12

PSEG

2010 Q2 Operating Company Review

Caroline Dorsa

Executive Vice President and Chief Financial Officer

*

*

*

*

*

*

*

*

*

*

9

Q2 Operating Earnings by Subsidiary

$    318

1

21

43

$   253

2009

$   331

5

12

75

$   239

2010

Operating Earnings

Earnings per Share

--

0.01

Enterprise

$   0.63

$   0.65

Operating Earnings*

0.04

0.02

PSEG Energy Holdings

0.09

0.15

PSE&G

$   0.50

$   0.47

PSEG Power

2009

2010

$ millions (except EPS)

Quarter ended June 30

* See page 33 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

10

Q2 Operating Earnings by Subsidiary

$ 800  

(3)

31

166

$606

2009

$ 756

8

19

192

$   537

2010

Operating Earnings

Earnings per Share

(0.01)

0.02

Enterprise

$   1.58

$   1.49

Operating Earnings*

0.06

0.03

PSEG Energy Holdings

0.33

0.38

PSE&G

$   1.20

$   1.06

PSEG Power

2009

2010

$ millions (except EPS)

Six months ended June 30

•See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

11

$0.65

0.01

(0.02)

0.06

(0.03)

$0.63

0.00

0.25

0.50

0.75

1.00

PSEG EPS Reconciliation –

Q2 2010 versus Q2 2009

Q2 2010       

operating

earnings*

Q2 2009       

operating

earnings*

Interest

Higher volume offset

by lower prices  

0.02

O&M 0.01

WPT (0.02)

Taxes  (0.02)

SO2 Impairment

(0.02)

PSEG Power

Weather 0.01

Margins:

Electric 0.03

Transmission  0.01

O&M 0.01

Taxes & Misc. 0.01

D&A (0.01)

PSE&G

PSEG Energy

Holdings

Enterprise

Lower gains on

lease sales and

lower project

earnings (0.05)

Tax Benefits for

Solar & Other

Projects 0.02

Interest 0.01

•See page 33 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

12

$1.49

0.03

(0.03)

0.05

(0.14)

$1.58

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

PSEG EPS Reconciliation –

YTD 2010 versus YTD 2009

YTD 2010       

operating

earnings*

YTD 2009       

operating

earnings*

Interest

Higher volume

offset by lower

prices (0.04)

WPT (0.05)

SO2 Impairment

(0.02)

BGSS (0.01)

D&A 0.01

Taxes  (0.01)

Increase in

effective tax rate

related to

healthcare

legislation (0.02)

PSEG Power

Weather (0.02)

Margins:

Electric 0.04

Transmission 

0.02

Appliance Service

0.01

Taxes & Misc.

0.02

O&M (0.01)

D&A (0.01)

PSE&G

PSEG Energy

Holdings

Enterprise

Lower gains on

lease sales and 

lower project

earnings (0.06)

Tax Benefits for

Solar and Other

Projects 0.02

Interest 0.01

* See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

PSEG Power

2010 Q2 Review

*

*

*

*

*

*

*

*

*

*

14

PSEG Power –

Q2 2010 EPS Summary

(21)

(24)

(45)

Mark-to-Market, Net of Tax

(7)

17

10

NDT Funds Related Activity,              

Net of Tax

($ 5)

$ 1,363

$ 1,358

Operating Revenues

($ 0.03)

$   0.50

$    0.47

EPS from Operating Earnings*

(42)

246

204

Income from Continuing Operations /

Net Income

(14)

253

239

Operating Earnings

Variance

Q2 2009

Q2 2010

$ millions (except EPS)

* See page 33 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

15

$0.50

0.02

(0.02)

(0.02)

$0.47

(0.01)

0.00

0.25

0.50

0.75

Higher

volume

offset by

lower

prices

PSEG Power EPS Reconciliation –

Q2 2010 versus Q2 2009

Q2 2010       

operating

earnings*

Q2 2009       

operating

earnings*

* See page 33 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

WPT

O&M 0.01

Taxes (0.02)

SO2

Impairment

16

PSEG Power –

Generation Measures

7,487

7,196

2,595

1,470

4,090

2,887

1,937

2,010

0

8,750

17,500

2010

2009

Quarter ended June 30

Total Nuclear

Total Coal*

Oil & Natural Gas

–

excluding

Texas

* Includes figures for Pumped Storage

PSEG Power –

Generation (GWh)

13,490

16,182

Oil & Natural Gas

-

Texas

PSEG Power –

Capacity Factors (%)

41%

43%

Texas

37%

52%

PJM and NY

Combined

Cycle

35%

83%

42%

95.0%

2010

30%

CT

80%

PA

20%

NJ

Coal

93.4%

Nuclear

2009

Six months ended June 30

17

PSEG Power –

Fuel Costs

178

236

Oil & Gas*

47

100

Coal

19.27

23.30

$ / MWh

13,490

16,182

Total Generation

(GWh)

260

377

Total Fuel Costs

35

41

Nuclear

Total Fossil

($ millions)

225

336

2009

2010

Quarter ended June 30

PSEG Power –

Fuel Costs

* Includes Texas.

18

PSEG Power –

Gross Margin Performance

$0

$25

$50

$75

2010

2009

2008

$63

$51

Quarter ended June 30

Volume increased 20% vs. year ago in response to weather-related demand

Margins influenced by BGS migration and impairment of excess SO2

emission

allowances

Decline in gross margin influenced

by lower spark spread.

$29

Texas

Regional Performance

$14

$20

$688

Q2 Gross

Margin ($M)

Q2 Performance

Region

Improvement in generation offset

by decline in price.

New York

Volumes and margins lower vs.

year ago, reflecting decline in dark

spreads.

New

England

Margin improvement aided by

strong weather-related demand

offset by lower pricing and ($0.01)

SO2 impairment.

PJM

PSEG Power Gross Margin ($/MWh)*

* Excludes Texas

Increase

in

generation

was

predominantly

from

combined

cycle

and

coal

with

continued

strong

nuclear.

$50

19

…

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 89 MW 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

0

2,000

4,000

6,000

8,000

10,000

12,000

09/10

10/11

11/12

12/13

13/14

PJM

Capacity

Available

to

Receive

Auction

Pricing

20

PSEG Power –

Q2 Operating Highlights

Q2 output + 20% added $0.05 to EPS

Q2 nuclear capacity factor at 92.6%

Combined cycle and coal units captured market opportunities

Operations

Regulatory and Market

Environment

Financial

Lower pricing reduced Q2 earnings ($0.03) per share which includes the impact

of customer migration of ($0.01) per share; mark-to-market related to lower

volumes on other full requirements contracts was ($0.02) per share

RPM auction results support locational

value of assets

Power on track to complete Back-End-Technology construction at Hudson and

Mercer by year-end

Bid accepted for 89 MW peaker

at Kearny for 2013 in-service

Power debt exchange to reduce financing cost and extend maturities

PSE&G

2010 Q2 Review

*

*

*

*

*

*

*

*

*

*

22

PSE&G –

Q2 2010 Earnings Summary

28

1,493

1,465

Total Operating Expenses

(2)

26

28

Taxes Other than Income Taxes

Operating Expenses

62

979

917

Energy Costs

1

344

343

Operation & Maintenance

(33)

144

177

Depreciation & Amortization

$ 0.06

$ 0.09

$ 0.15

EPS from Operating Earnings*

32

43

75

Operating Earnings

($ 107)

$ 1,643

$ 1,536

Operating Revenues

Variance

Q2 2009

Q2 2010

$ millions (except EPS)

* See page 33 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

23

$0.09

0.04

0.01

0.01

$0.15

0.00

0.05

0.10

0.15

0.20

`

PSE&G EPS Reconciliation –

Q2 2010

versus Q2 2009

Q2 2010      

operating

earnings*

Q2 2009       

operating

earnings*

Weather

* See page 33 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

O&M 0.01

Taxes & Misc.

0.01

D&A (0.01)

Margins:

Electric 0.03

Transmission 0.01

24

PSE&G –

Monthly Weather Data

1,333

3,954

208

376

586

1,412

140

749

2,999

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

April

May

June

2010

2009

Normal

2010 vs. 2009 vs. Normal

PSE&G Monthly Temperature Humidity Index (THI)

+ 131% Q2 2010 vs. Q2 2009

+ 41% Q2 2010 vs. Normal

25

PSE&G –

Q2 Operating Highlights

NJ BPU approved stipulated settlement in June providing for $100

million in electric

and gas revenue based on authorized ROE of 10.3% and Equity Ratio of 51.2%

Refunding $122 million to resolve issues related to the Market Transition Charge

over the next 24 months

BPU plans to hold separate hearings on rate treatment of consolidated taxes and SBC

Susquehanna-Roseland Transmission in-service date delayed by 2 years

PSE&G has reduced its distribution related capital budgets by $140 million over

2010-2012

PSE&G distribution operations earned an 8.3% return on equity for the trailing

12 months

Operations

Regulatory and Market

Environment

Financial

Economic indicators appear to have stabilized but have yet to indicate a recovery

Focused on maintaining reliability

PSEG Energy Holdings

2010 Q2 Review

*

*

*

*

*

*

*

*

*

*

27

PSEG Energy Holdings –

Q2 2010 Earnings Summary

($0.02)

$ 0.04

$ 0.02

EPS from Operating Earnings*

($ 9)

$ 21

$12

Income from Continuing Operations /

Net Income

($ 75)

$ 95

$ 20

Operating Revenues

Variance

Q2 2009

Q2 2010

$ millions (except EPS)

* See page 33 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

28

$0.02

(0.02)

$0.04

0.00

0.01

0.02

0.03

0.04

PSEG

Energy

Holdings

EPS

Reconciliation

–

Q2

2010

versus

Q2 2009

Q2 2010       

operating

earnings*

Q2 2009      

operating

earnings*

Lower gains on lease

sales and lower

project earnings

(0.05)

Tax Benefits for Solar

& Other Projects

0.02

Interest  0.01

* See page 33 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

29

PSEG Energy Holdings –

Q2 Operating Highlights

Financial

Termination of additional lease in Q2 reduced potential tax liability at

quarter-end to $550 million; $320 million of cash on deposit at IRS

Solar projects in Ohio and Florida exceeding expectations; NJ solar

project is operating as planned

Reviewing opportunity for additional investments in solar under PPA

arrangements

PSEG

*

*

*

*

*

*

*

*

*

*

*

*

31

2010 Operating Earnings Guidance

$ 3.12

$ 1,579

$ 10

$ 43

$ 321

$ 1,205

2009A*

$ 3.00 –

$ 3.25

$ 1,520 –

$ 1,645

$ 5 –

$15

$ 30 –

$ 40

$ 425 –

$ 455

$ 1,060 –

$ 1,135

2010E

Enterprise

Earnings per Share

Operating Earnings*

PSEG Energy Holdings

PSE&G

PSEG Power

$ millions (except EPS)

* See page 35 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

32

PSEG Liquidity as of June 30, 2010

PSEG Liquidity as of June 30, 2010

Expiration

Total

Available

Company

Facility

Date

Facility

Usage

Liquidity

5-Year Credit Facility (Power)

Dec-12

$1,600

1

$231

$1,369

5-Year Credit Facility (PSEG)

Dec-12

$1,000

2

$182

$818

2-Year Credit Facility (Power)

Jul-11

$350

$0

$350

PSE&G

5-Year Credit Facility

Jun-12

$600

3

$214

$386

Total

$3,550

$2,923

1

Power Facility reduces by $75 million in 12/2011

2

PSEG Facility reduces by $47 million in 12/2011

3

PSE&G Facility reduces by $28 million in 6/2011

PSEG /

Power

($Millions)

33

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

2010

2009

Earnings Impact ($ Millions)

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

10

$        

17

$        

      Activity (PSEG Power)

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

(45)

(24)

Market Transition Charge Refund (PSE&G)

(72)

-

Total Pro-forma adjustments

(107)

$     

(7)

$         

Fully Diluted Average Shares Outstanding (in Millions)

507

507

Per Share Impact (Diluted)

Gain (Loss) on NDT Fund Related Activity (PSEG Power)

0.02

$     

0.03

$     

Gain (Loss) on MTM (PSEG Power)

(0.09)

(0.05)

Market Transition Charge Refund (PSE&G)

(0.14)

-

Total Pro-forma adjustments

(0.21)

$    

(0.02)

$    

(a) Income from Continuing Operations for the three months ended June 30, 2010 and 2009 is equal to Net Income.

For the Three Months Ended

30-Jun

34

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

2010

2009

Earnings Impact ($ Millions)

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

20

$        

(6)

$         

     Activity (PSEG Power)

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

11

(39)

Market Transition Charge Refund (PSE&G)

(72)

-

Total Pro-forma adjustments

(41)

$       

(45)

$       

Fully Diluted Average Shares Outstanding (in Millions)

507

507

Per Share Impact (Diluted)

Gain (Loss) on NDT Fund Related Activity (PSEG Power)

0.04

$     

(0.01)

$    

Gain (Loss) on MTM (PSEG Power)

0.02

(0.08)

Market Transition Charge Refund (PSE&G)

(0.14)

-

Total Pro-forma adjustments

(0.08)

$    

(0.09)

$    

(a) Income from Continuing Operations for the six months ended June 30, 2010 and 2009 is equal to Net Income.

For the Six Months Ended

30-Jun

35

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

Earnings Impact ($ Millions)

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

Related Activity (PSEG Power)

9

$         

(71)

$                

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

(25)

16

Lease Transaction Reserves

-

(490)

Net Reversal of Lease Transaction Reserves

29

-

Asset Impairments

-

(13)

Premium on Bond Redemption

-

(1)

Total Pro-forma adjustments

13

$       

(559)

$             

Fully Diluted Average Shares Outstanding (in Millions)

507

508

Per Share Impact (Diluted)

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

Related Activity (PSEG Power)

0.02

$    

(0.14)

$            

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

(0.05)

0.03

Lease Transaction Reserves

-

(0.96)

Net Reversal of Lease Transaction Reserves

0.05

-

Asset Impairments

-

(0.03)

Premium on Bond Redemption

-

-

Total Pro-forma adjustments

0.02

$    

(1.10)

$            

For the Twelve Months Ended

December 31,