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) October 27, 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 October 27, 2010, PSEG announced unaudited financial results for the three and nine months ended September 30, 2010. A copy of the earnings release dated October 27, 2010 is furnished as Exhibit 99 to this Form 8-K.

Item 7.01 Regulation FD Disclosure

PSEG, Power and PSE&G

On October 27, 2010, PSEG conducted an earnings call regarding its 2010 third 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 October 27, 2010 announcing third 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: October 27, 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: October 27, 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: October 27, 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

October 27, 2010

PSEG ANNOUNCES 2010 THIRD QUARTER RESULTS

$1.12 PER SHARE FROM NET INCOME

$1.06 PER SHARE OF OPERATING EARNINGS

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

Forward Power Prices Continue To Decline

Public Service Enterprise Group (PSEG) today reported third quarter 2010 net income and income from continuing operations of $567 million or $1.12 per share as compared to $488 million or $0.96 per share for the third quarter of 2009. Operating earnings for the third quarter of 2010 were $538 million or $1.06 per share compared to the third quarter of 2009 operating earnings of $464 million or $0.92 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), certain 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 third 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)

Third Quarter Comparative Results

2010 and 2009

	Income ($millions)				Diluted Earnings Per Share
	2010		2009		2010		2009
Net Income/Income from Continuing Ops	$	567	$	488	$	1.12	$	0.96
Less: Excluded Items		29		24		0.06		0.04
Operating Earnings (Non-GAAP)	$	538	$	464	$	1.06	$	0.92
				Avg. Shares		507M		507M

“Our financial results in the third quarter were strong” said Ralph Izzo, chairman, president and chief executive officer of PSEG. “Warmer than normal weather and higher electric delivery rates in effect at the start of the summer helped to offset the impact of a slow economic recovery and lower realized energy prices at Power. Our results for the quarter continue to support full year earnings 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

Izzo indicated that the strong results “reflect the substantial efforts of our employees to reduce costs in the face of continuing decreases in energy prices. These efforts will play an important role in meeting our financial objectives as legacy hedges executed at higher prices roll off in 2011 and 2012.”

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 $355 million ($0.70 per share) for the third quarter of 2010 compared with operating earnings of $358 million ($0.71 per share) for the third quarter of 2009.

PSEG Power’s results in the third quarter benefited from a 10% increase in output. The increase in output was experienced by PSEG Power’s fossil fleet, and improved earnings by $0.04 per share. This improvement was partially offset by a 17-day unplanned outage at the Salem 1 nuclear reactor early in the quarter. The lower nuclear output reduced earnings by $0.03 per share. Warmer than normal weather during the quarter added $0.03 per share to earnings. The recontracting of expiring hedges at lower prices reduced earnings by $0.05 per share including customer migration away from the BGS contract which reduced earnings in the quarter by $0.01 per share. In addition, the continued erosion in margin on certain wholesale electric energy supply contracts that Power supplies from the market reduced earnings by $0.02 per share. Realized gains on investments in Power’s Rabbi Trust Fund added $0.01 per share to earnings. A decline in the effective tax rate aided earnings by $0.01 per share.

The nuclear generating units operated by PSEG Power performed at an average capacity factor of 90.4% during the quarter resulting in a capacity factor of 91.8% for the nine months ended September 30, 2010. The results for the quarter include the effect of the unplanned outage at Salem 1. The outage is expected to reduce the full-year capacity factor for Power’s fleet by 0.6% to slightly better than 91%. The anticipated results for the full-year reflect the impact of a scheduled refueling outage at Hope Creek that began on October 15.

Power’s operating earnings for 2010 are forecasted 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 full year earnings comparisons will be affected by erosion in margins from BGS customer migration as well as volume declines associated with other full requirement contracts. Our forecast for full-year 2010 assumes a year-over-year reduction in margin associated with customer migration of $0.04 per share, at the upper end of our prior guidance of a $0.02 - $0.04 per share impact for the year. New retail suppliers have entered the market for residential customers in the third quarter.

These items will be partially offset by an expected 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 recognized in the second quarter.

Power continues to hedge its expected generation in future years consistent with past practice. At the end of September, approximately 68% of Power’s anticipated 2011 coal and nuclear generation is hedged at an average price of $71 per MWh with hedges. This compares with an average hedge price for energy in 2010 of $72 per MWh. These figures, however, don’t reflect the potential impact of increased levels of customer migration, which could reduce the level of power supplied under existing BGS contracts. Incremental migration equal to 5% of customer load would reduce earnings by approximately $0.015 per share at current market prices. An additional loss of 15% of load would reduce our average hedged price in 2011 to $67 per MWh.

PSE&G

PSE&G reported operating earnings of $155 million ($0.30 per share) for the third quarter of 2010 compared with operating earnings of $87 million ($0.17 per share) for the third quarter of 2009.

PSE&G’s results were driven by higher rates, abnormally warm weather and a reduction in operating and maintenance expenses. An annual increase in electric and gas rates of $73.5 million and $26.5 million that went into effect on June 7 and July 9 respectively added $0.05 per share to earnings. An increase in revenue associated with investments in capital infrastructure and renewables approved during 2009 improved earnings by $0.01 per share. Warmer than normal weather during the third quarter of 2010 in comparison to cooler than normal weather conditions in the year ago period improved electric demand and earnings by $0.03 per share. An increase in transmission revenues at the start of the year added $0.01 per share to quarterly earnings. A decline in operating and maintenance expenses during the quarter improved earnings by $0.02 per share. These items offset an increase in depreciation and interest expense associated with higher levels of capital investment ($0.02 per share). Realized gains on investments in PSE&G’s Rabbi Trust added $0.02 per share, and a decline in the effective tax rate added $0.01 per share to earnings.

PSE&G experienced an increase in demand from residential and commercial customers during the third quarter reflecting the favorable weather that more than offset the impact of a weak economy on demand. Economic data related to employment and housing in PSE&G’s service territory show signs of stability but, don’t yet indicate a return to growth in the economy.

PSE&G’s operating earnings for 2010 are forecast at $425 - $455 million compared to 2009’s 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 and a decline in operating and maintenance expenses.

PSE&G has updated its forecast of capital spending for 2010-2012, and provided an initial forecast related to capital spending plans for 2013. The revised budget calls for spending $4.5 billion over 2010-2012 with spending of $1.6 billion for 2013 resulting in a $6.1 billion capital program over this four year period. The projections take into account the delay associated with the in-service date for the Susquehanna to Roseland transmission line, the reconfiguration of the Branchburg-Roseland-Hudson line as well as the previously announced reduction in distribution spending. Transmission related capital spending represents 50% of PSE&G’s forecast level of capital spending over 2010-2013. The implementation and timing of capital expenditures are subject to obtaining timely government approvals.

PSEG Energy Holdings

PSEG Energy Holdings reported operating earnings of $24 million ($0.05 per share) for the third quarter of 2010 versus an operating loss of $1 million during the third quarter of 2009.

The improvement in operating earnings for the quarter reflects the successful termination of two Lilo/Silo leveraged leases during the quarter that resulted in a gain of $0.03 per share which matched a similar level of termination related gains recorded in the year ago quarter. Results also benefited from the absence of a premium paid on the debt exchange with Power in 2009 ($0.04 per share) as well as a decline in interest expense ($0.01 per share).

The successful termination of two cross-border leases during the quarter reduced Holdings’ net cash exposure to $330 million at the end of September. Holdings has $320 million on deposit with the IRS to defray potential interest costs associated with this disputed tax matter.

Holdings’ operating earnings for 2010 are forecast at $30 – $40 million as compared to 2009’s operating earnings of $43 million. The loss of income on terminated leases, the absence of the debt exchange this year and a reduction in gains from the termination of leases will be partially offset by lower financing costs and tax benefits from the start-up of solar projects in Ohio and Florida.

Other Items

PSEG Power indicated during the quarter that it is exploring the potential sale of its two 1,000 MW combined cycle generating facilities in Texas through an auction process. The sale is dependent on the receipt of offers that reflect the appropriate value for the assets.

Holdings issued a call notice in October for the redemption in December 2010 of the remaining $127 million outstanding principal balance of its 8.5% Senior Notes due June 2011.

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 cost allocation rules, including rules regarding who is permitted to build transmission going forward, 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.

• Adverse changes in the demand for or price of the capacity and energy that we sell into wholesale electricity markets.

• 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 September 30,					For the Nine Months Ended September 30,
	2010		2009			2010			2009
Earnings Results ($ Millions)
PSEG Power	$	355	$	358		$	892		$	964
PSE&G		155		87			347			253
PSEG Energy Holdings		24		(1	)		43			30
PSEG		4		20			12			17
Operating Earnings	$	538	$	464		$	1,294		$	1,264
Reconciling Items(a)		29		24			(12	)		(21	)
Net Income	$	567	$	488		$	1,282		$	1,243
Fully Diluted Average Shares Outstanding (in Millions)		507		507			507			507
Per Share Results (Diluted)
PSEG Power	$	0.70	$	0.71		$	1.76		$	1.91
PSE&G		0.30		0.17			0.68			0.50
PSEG Energy Holdings		0.05		—			0.09			0.06
PSEG		0.01		0.04			0.02			0.03
Operating Earnings	$	1.06	$	0.92		$	2.55		$	2.50
Reconciling Items(a)		0.06		0.04			(0.02	)		(0.05	)
Net Income	$	1.12	$	0.96		$	2.53		$	2.45

(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 nine months ended September 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 September 30, 2009.

Income from Continuing Operations includes preferred stock dividends relating to PSE&G of $1 million and $3 million for the nine months ended September 30, 2010 and 2009, respectively.

Attachment 2

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidating Statements of Operations

(Unaudited, $ Millions)

	For the Three Months Ended September 30, 2010
	PSEG			OTHER (a)			PSEG POWER			PSE&G			PSEG ENERGY HOLDINGS
OPERATING REVENUES	$	3,254		$	(474	)	$	1,663		$	2,007		$	58
OPERATING EXPENSES
Energy Costs		1,355			(474	)		714			1,115			—
Operation and Maintenance		601			1			263			327			10
Depreciation and Amortization		265			4			48			209			4
Taxes Other Than Income Taxes		31			—			—			31			—
Total Operating Expenses		2,252			(469	)		1,025			1,682			14
OPERATING INCOME		1,002			(5	)		638			325			44
Income from Equity Method Investments		4			—			—			—			4
Other Income and Deductions		66			11			35			13			7
Other Than Temporary Impairments		(3	)		(1	)		(2	)		—			—
Interest Expense		(120	)		3			(37	)		(82	)		(4	)
Preferred Stock Dividends		—			—			—			—			—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		949			8			634			256			51
Income Tax Expense		(382	)		(4	)		(250	)		(101	)		(27	)
NET INCOME	$	567		$	4		$	384		$	155		$	24
Reconciling Items Excluded from Continuing Operations(C):		29			—			29			—			—
OPERATING EARNINGS	$	538		$	4		$	355		$	155		$	24
	For the Three Months Ended September 30, 2009
	PSEG			OTHER (a)			PSEG POWER			PSE&G			PSEG ENERGY HOLDINGS
OPERATING REVENUES	$	3,040		$	(524	)	$	1,564		$	1,943		$	57
OPERATING EXPENSES
Energy Costs		1,241			(525	)		599			1,167			—
Operation and Maintenance		621			(9	)		265			351			14
Depreciation and Amortization		224			4			48			169			3
Taxes Other Than Income Taxes		30			—			—			30			—
Total Operating Expenses		2,116			(530	)		912			1,717			17
OPERATING INCOME		924			6			652			226			40
Income from Equity Method Investments		6			—			—			—			6
Other Income and Deductions		24			33			23			2			(34	)
Interest Expense		(129	)		(5	)		(37	)		(77	)		(10	)
Preferred Stock Dividends		—			1			—			(1	)		—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (b)		825			35			638			150			2
Income Tax Expense		(337	)		(15	)		(256	)		(63	)		(3	)
NET INCOME (LOSS)	$	488		$	20		$	382		$	87		$	(1	)
Reconciling Items Excluded from Continuing Operations(C):		24			—			24			—			—
OPERATING EARNINGS (LOSS)	$	464		$	20		$	358		$	87		$	(1	)

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

(b) Income from Continuing Operations before Income Taxes includes preferred stock dividends relating to PSE&G of $1 million for the three months ended September 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 September 30, 2010 and 2009 is equal to Net Income.

Attachment 3

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidating Statements of Operations

(Unaudited, $ Millions)

	For the Nine Months Ended September 30, 2010
	PSEG			OTHER (a)			PSEG POWER			PSE&G			PSEG ENERGY HOLDINGS
OPERATING REVENUES	$	9,389		$	(2,036	)	$	5,324		$	5,987		$	114
OPERATING EXPENSES
Energy Costs		4,270			(2,034	)		2,732			3,572			—
Operation and Maintenance		1,915			(18	)		817			1,084			32
Depreciation and Amortization		730			13			144			563			10
Taxes Other Than Income Taxes		101			—			—			101			—
Total Operating Expenses		7,016			(2,039	)		3,693			5,320			42
OPERATING INCOME		2,373			3			1,631			667			72
Income from Equity Method Investments		12			—			—			—			12
Other Income and Deductions		128			9			90			20			9
Other Than Temporary Impairments		(9	)		(1	)		(8	)		—			—
Interest Expense		(356	)		10			(119	)		(239	)		(8	)
Preferred Stock Dividends		—			1			—			(1	)		—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (b)		2,148			22			1,594			447			85
Income Tax Expense		(866	)		(10	)		(642	)		(172	)		(42	)
NET INCOME	$	1,282		$	12		$	952		$	275		$	43
Reconciling Items Excluded from Continuing Operations(C):		(12	)		—			60			(72	)		—
OPERATING EARNINGS	$	1,294		$	12		$	892		$	347		$	43
	For the Nine Months Ended September 30, 2009
	PSEG			OTHER (a)			PSEG POWER			PSE&G			PSEG ENERGY HOLDINGS
OPERATING REVENUES	$	9,520		$	(2,388	)	$	5,391		$	6,321		$	196
OPERATING EXPENSES
Energy Costs		4,376			(2,386	)		2,757			4,005			—
Operation and Maintenance		1,922			(25	)		820			1,090			37
Depreciation and Amortization		634			12			152			462			8
Taxes Other Than Income Taxes		100			—			—			100			—
Total Operating Expenses		7,032			(2,399	)		3,729			5,657			45
OPERATING INCOME		2,488			11			1,662			664			151
Income from Equity Method Investments		17			—			—			—			17
Other Income and Deductions		87			26			85			5			(29	)
Other Than Temporary Impairments		(61	)		(1	)		(60	)		—			—
Interest Expense		(407	)		(11	)		(125	)		(236	)		(35	)
Preferred Stock Dividends		—			3			—			(3	)		—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (b)		2,124			28			1,562			430			104
Income Tax Expense		(881	)		(11	)		(619	)		(177	)		(74	)
NET INCOME	$	1,243		$	17		$	943		$	253		$	30
Reconciling Items Excluded from Continuing Operations(C):		(21	)		—			(21	)		—			—
OPERATING EARNINGS	$	1,264		$	17		$	964		$	253		$	30

(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 $3 million for the nine months ended September 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 nine months ended September 30, 2010 and 2009 is equal to Net Income.

Attachment 4

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Capitalization Schedule

(Unaudited, $ Millions)

	September 30, 2010			December 31, 2009
DEBT
Commercial Paper and Loans	$	—		$	530
Long-Term Debt		7,898			6,781
Securitization Debt		1,202			1,343
Project Level, Non-Recourse Debt		56			42
Total Debt		9,156			8,696
SUBSIDIARY’S PREFERRED STOCK WITHOUT MANDATORY REDEMPTION		—			80
STOCKHOLDERS’ EQUITY
Common Stock		4,796			4,788
Treasury Stock		(594	)		(588	)
Retained Earnings		5,466			4,704
Accumulated Other Comprehensive Loss		(111	)		(116	)
Total Common Stockholders’ Equity		9,557			8,788
Noncontrolling Interests - Equity Investments		8			10
Total Equity		9,565			8,798
Total Capitalization	$	18,721		$	17,574

Attachment 5

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, $ Millions)

	For the Nine Months Ended September 30,
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	1,282		$	1,243
Adjustments to Reconcile Net Income to Net Cash Flows From Operating Activities		57			98
NET CASH PROVIDED BY OPERATING ACTIVITIES		1,339			1,341
NET CASH USED IN INVESTING ACTIVITIES		(1,096	)		(419	)
NET CASH USED IN FINANCING ACTIVITIES		(261	)		(1,113	)
Net Decrease in Cash and Cash Equivalents		(18	)		(191	)
Cash and Cash Equivalents at Beginning of Period		350			321
Cash and Cash Equivalents at End of Period	$	332		$	130

Attachment 6

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Quarter-over-Quarter EPS Reconciliation

September 30, 2010 vs. September 30, 2009

(Unaudited)

Attachment 7

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Year-over-Year EPS Reconciliation

September 30, 2010 vs. September 30, 2009

(Unaudited)

Attachment 8

PSEG POWER LLC

Generation Measures

(Unaudited)

	GWhr Breakdown						GWhr Breakdown
	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009
Nuclear - NJ		5,146			5,555			15,517			15,782
Nuclear - PA		2,163			2,183			7,060			6,969
Total Nuclear		7,309			7,738			22,577			22,751
Fossil - Coal - NJ*		1,130			795			3,302			1,766
Fossil - Coal - PA		1,548			1,341			4,314			4,008
Fossil - Coal - CT		453			105			1,031			615
Total Coal		3,131			2,241			8,647			6,389
Fossil - Oil & Natural Gas - NJ		3,700			2,881			9,204			6,782
Fossil - Oil & Natural Gas - NY		1,272			1,028			3,366			2,537
Fossil - Oil & Natural Gas - CT		101			16			122			116
Fossil - Oil & Natural Gas - TX		2,336			2,328			5,879			5,861
Total Oil & Natural Gas		7,409			6,253			18,571			15,296
		17,849			16,232			49,795			44,436
	% Generation by Fuel Type						% Generation by Fuel Type
	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009
Nuclear - NJ		29	%		34	%		31	%		35	%
Nuclear - PA		12	%		14	%		14	%		16	%
Total Nuclear		41	%		48	%		45	%		51	%
Fossil - Coal - NJ*		6	%		5	%		7	%		4	%
Fossil - Coal - PA		9	%		8	%		9	%		9	%
Fossil - Coal - CT		3	%		1	%		2	%		1	%
Total Coal		18	%		14	%		18	%		14	%
Fossil - Oil & Natural Gas - NJ		21	%		18	%		18	%		16	%
Fossil - Oil & Natural Gas - NY		7	%		6	%		7	%		6	%
Fossil - Oil & Natural Gas - CT		0	%		0	%		0	%		0	%
Fossil - Oil & Natural Gas - TX		13	%		14	%		12	%		13	%
Total Oil & Natural Gas		41	%		38	%		37	%		35	%
		100	%		100	%		100	%		100	%

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

Attachment 9

PUBLIC SERVICE ELECTRIC & GAS COMPANY

Retail Sales and Revenues

(Unaudited)

September 30, 2010

Electric Sales and Revenues

	Three Months Ended		Change vs. 2009			Nine Months Ended		Change vs. 2009
Sales (millions kwh)
Residential		4,769		19.1	%		11,300		11.9	%
Commercial & Industrial		8,087		2.1	%		22,154		1.3	%
Street Lighting		82		5.2	%		266		1.3	%
Other		3		5.1	%		7		3.1	%
Total		12,941		7.8	%		33,727		4.6	%
Revenue ($ millions)
Residential	$	827		15.5	%	$	1,894		9.9	%
Commercial & Industrial		803		-8.5	%		1,949		-14.2	%
Street Lighting		18		1.8	%		57		0.9	%
Other Operating Revenues*		110		50.3	%		277		32.3	%
Total	$	1,758		4.3	%	$	4,177		-2.0	%
	Three Months Ended		Change vs. 2009			Nine Months Ended		Change vs. 2009
Weather Data
THI Hours - Actual		14,507		68.2	%		20,001		81.8	%
THI Hours - Normal		11,130					15,055

* 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)

September 30, 2010

Gas Sold and Transported

	Three Months Ended		Change vs. 2009			Nine Months Ended		Change vs. 2009
Sales (millions therms)
Residential Sales		84		-12.8	%		885		-9.5	%
Commercial & Industrial - Firm Sales		33		-12.1	%		334		-10.4	%
Commercial & Industrial - Interr. & Cogen		62		12.9	%		138		-6.3	%
Total		179		-5.2	%		1,357		-9.4	%
Gas Transported - Firm Sales		55		14.6	%		324		1.2	%
Gas Transported - Non-Firm		287		-29.8	%		729		2.8	%
Revenue ($ millions)
Residential Sales	$	64		-27.5	%	$	726		-24.2	%
Commercial & Industrial - Firm Sales		21		11.1	%		236		-5.2	%
Commercial & Industrial - Interr. & Cogen		32		48.9	%		77		8.1	%
Other Operating Revenues*		36		5.6	%		111		9.1	%
Total	$	153		-5.9	%	$	1,150		-16.6	%
Gas Transported	$	96		1.0	%	$	661		-3.1	%
	Three Months Ended		Change vs. 2009			Nine Months Ended		Change vs. 2009
Weather Data
Degree Days - Actual		—		-100.0	%		2,146		-13.8	%
Degree Days - Normal		9					2,360

* Primarily Appliance Service.

Attachment 11

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Statistical Measures

(Unaudited)

	For the Three Months Ended September 30						For the Nine Months Ended September 30
	2010			2009			2010			2009
Weighted Average Common Shares Outstanding (000’s)
Basic		505,945			505,982			506,001			505,986
Diluted		506,968			507,242			507,068			506,957
Stock Price at End of Period							$	33.08		$	31.44
Dividends Paid per Share of Common Stock	$	0.3425		$	0.3325		$	1.0275		$	0.9975
Dividend Payout Ratio*								42.9	%		42.3	%
Dividend Yield								4.1	%		4.2	%
Price/Earnings Ratio*								10.4			10.1
Rate of Return on Average Common Equity*								17.7	%		19.4	%
Book Value per Common Share							$	18.89		$	17.16
Market Price as a Percent of Book Value								175	%		183	%
Total Shareholder Return		6.7	%		-2.6	%		2.8	%		11.6	%

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

Attachment 12

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

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

(Unaudited)

	For the Three Months Ended September 30,				For the Nine Months Ended September 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	$	7	$	30		$	1		$	9
Fund Related Activity (PSEG Power)
Gain (Loss) on Mark-to-Market (MTM) (PSEG Power)		19		17		30			(22	)		(25	)
Net Reversal of Lease Transaction Reserves (Energy Holdings)		—		—		—			—			29
Market Transition Charge Refund (PSE&G)		—		—		(72	)		—			—
Total Pro-forma adjustments	$	29	$	24	$	(12	)	$	(21	)	$	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	$	0.01	$	0.06		$	—		$	0.02
Gain (Loss) on MTM (PSEG Power)		0.04		0.03		0.06			(0.05	)		(0.05	)
Net Reversal of Lease Transaction Reserves (Energy Holdings)		—		—		—			—			0.05
Market Transition Charge Refund (PSE&G)		—		—		(0.14	)		—			—
Total Pro-forma adjustments	$	0.06	$	0.04	$	(0.02	)	$	(0.05	)	$	0.02

(a) Income from Continuing Operations for the three and nine months ended September 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

3

rd

Quarter 2010

October 27, 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 cost allocation rules, including rules

regarding

who

is

permitted

to

build

transmission

going

forward,

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.

•

Adverse changes in the demand for or price of the capacity and energy that we sell into wholesale electricity markets,

•

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 Q3 Review

Ralph Izzo

Chairman, President and Chief Executive Officer

*

*

*

*

*

*

*

*

4

Q3 2010 Earnings Summary

-

-

Discontinued Operations, Net of Tax

$  0.92

$  1.06

EPS from Operating Earnings*

$  488

$  567   

Net Income

488

567

Income from Continuing Operations

24

29     

Reconciling Items, Net of Tax

$  464

$  538

Operating Earnings

2009

2010

$ millions (except EPS)

Quarter Ended September 30        

* See page 36 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

5

YTD Earnings Summary

-

-

Discontinued Operations, Net of Tax

$ 2.50

$  2.55

EPS from Operating Earnings*

$1,243

$1,282   

Net Income

1,243

1,282

Income from Continuing Operations

(21)

(12)     

Reconciling Items, Net of Tax

$  1,264

$1,294 

Operating Earnings

2009

2010

$ millions (except EPS)

Nine Months Ended September 30         

* See page 36 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

6

PSEG –

Q3 2010: Company Execution Strong in Quarter

Q3 2010 results

Higher generation output 

Cost control efforts aiding margins

New utility rates in effect

Hottest New Jersey summer on record

Challenging markets

Still weak economy

Weak natural gas price environment; customer migration

Sharpened business focus

Texas generating assets –

process continuing for potential sale

Revised capital spending forecast reflects updated Transmission projects

2 additional lease terminations; 1 cross border lease remaining

Company position continues to receive recognition

World Index -

Dow Jones Sustainability Index

Carbon Disclosure Project

PSEG

2010 Q3 Operating Company Review

Caroline Dorsa

Executive Vice President and Chief Financial Officer

*

*

*

*

*

*

*

*

8

2008 Operating Earnings*

2009 Operating Earnings*

2010 Guidance

$3.00 -

$3.25

PSEG –

Maintaining 2010 Guidance

$3.03

* See page 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.                    

$3.12

9

Q3 Operating Earnings by Subsidiary

$    464

20

(1)

87

$   358

2009

$  538  

4

24

155

$355  

2010

Operating Earnings

Earnings per Share

0.04

0.01

Enterprise

$   0.92

$   1.06

Operating Earnings*

-

0.05

PSEG Energy Holdings

0.17

0.30

PSE&G

$   0.71

$   0.70

PSEG Power

2009

2010

$ millions (except EPS)

Quarter Ended September 30

* See page 36 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

10

YTD Operating Earnings by Subsidiary

$    1,264

17

30

253

$   964

2009

$1,294  

12

43

347

$892  

2010

Operating Earnings

Earnings per Share

0.03

0.02

Enterprise

$   2.50

$   2.55

Operating Earnings*

0.06

0.09

PSEG Energy Holdings

0.50

0.68

PSE&G

$   1.91

$   1.76

PSEG Power

2009

2010

$ millions (except EPS)

Nine Months Ended September 30

* See page 36 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

11

$1.06

(0.03)

0.05

0.13

(0.01)

$0.92

0.00

0.20

0.40

0.60

0.80

1.00

1.20

PSEG EPS Reconciliation –

Q3 2010 versus Q3 2009

Q3 2010       

Operating

Earnings*

Q3 2009       

Operating

Earnings*

Higher Generating

Volume

Offset by Lower

Prices .00

Nuclear (.03)

Weather .03

Migration (.01)

WPT (.02)

Other .02

PSEG Power

Electric & Gas

Margin (Including

Rate Increases) .06 

Transmission Margin

.01

Weather .03

O&M .02

Other .01

PSE&G

PSEG Energy

Holdings

Enterprise

2009 Debt

Exchange Cost

Eliminated in

Consolidation

.04

Interest .01

•See page 36 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. 

2009 Debt

Exchange

Benefit

Eliminated in

Consolidation

(.04)

Interest .01

12

$2.50

(0.15)

0.18

0.03

(0.01)

$2.55

1.00

1.25

1.50

1.75

2.00

2.25

2.50

2.75

PSEG EPS Reconciliation –

YTD 2010 versus YTD 2009

Nine Months

Ended

9/30/2010

Operating

Earnings*

Nine Months

Ended 9/30/2009      

Operating

Earnings*

Interest .03

2009 Debt

Exchange Benefit

Eliminated in

Consolidation  (.04)

Higher volume offset by

lower prices (.05)

Weather .05

Migration (.03)

Economy (.01)

Nuclear (.01)

WPT (.07) ; BGSS (.01)

O&M (.01); Other .03

SO

2

Impairment (.02)

Increase in effective tax

rate related to healthcare

legislation (.02)

PSEG Power

Electric & Gas

Margin (Including

Rate Increases) .07

Transmission .03

Other .02

Appliance

Service .01

Weather .02

O&M  .01

Depreciation,

Taxes & Other .02

PSE&G

PSEG Energy

Holdings

Enterprise

2009 Lease Sales

& Other Investments

(.06)

Interest .03

Effective Tax Rate

and Other  .02

2009 Debt Exchange

Cost Eliminated in

Consolidation  .04

*

See

page

36

for

Items

excluded

from

Net

Income

to

reconcile

to

Operating

Earnings.

PSEG Power

2010 Q3 Review

*

*

*

*

*

*

*

*

*

*

14

PSEG Power –

Q3 2010 EPS Summary

2

17

19

Mark-to-Market, Net of Tax

3

7

10

NDT Funds Related Activity,              

Net of Tax

$ 99

$ 1,564

$1,663

Operating Revenues

$  (0.01)

$    0.71

$  0.70

EPS from Operating Earnings*

$ 2

$ 382

$ 384

Net Income

(3)

358

355

Operating Earnings

Variance

Q3 2009

Q3 2010

$ millions (except EPS)

* See page 36 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

15

$0.70

0.02

0.02

(0.05)

$0.71

0.00

0.25

0.50

0.75

1.00

Nuclear (.03)

WPT (.02)

PSEG Power EPS Reconciliation –

Q3 2010 versus Q3 2009

Q3 2010       

Operating

Earnings*

Q3 2009       

Operating

Earnings*

Weather .03

Higher Generation

Volumes Offset by

Lower Prices .00

Migration (.01)

* See page 36 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. 

Rabbi Trust Gains .01

Taxes .01

16

PSEG Power –

Generation Measures

7,309

7,738

3,131

2,241

7,409

6,253

0

10,000

20,000

2010

2009

Quarter Ended September 30

Total Nuclear

Total Coal*

Total Oil &

Natural Gas

* Includes figures for Pumped Storage. 

PSEG Power –

Generation (GWh)

16,232

17,849

22,577

22,751

8,647

6,389

18,571

15,296

0

10,000

20,000

30,000

40,000

50,000

2010

2009

Nine Months Ended September 30

44,436

49,795

17

PSEG Power –

Generation Measures

45

51

18

14

25

13

22

12

0

50

100

2010

2009

Nine

Months

Ended

September

30

Total Nuclear

Total Coal*

Oil & Natural Gas

–

excluding

Texas

* Includes figures for Pumped Storage

PSEG Power –

% Generation Contribution

Oil & Natural Gas

-

Texas

PSEG Power –

Capacity Factors (%)

45%

47%

Texas

43%

56%

PJM and NY

Combined

Cycle

41%

86%

43%

93.1%

2010

25%

CT

79%

PA

23%

NJ

Coal

93.8%

Nuclear**

2009

Nine Months Ended

September 30

**Total

Nuclear

Fleet

-

PS

Share

18

PSEG Power –

Fuel Costs

232

318

Oil & Gas

97

122

Coal

22.67

26.95

$ / MWh

16,232

17,849

Total Generation

(GWh)

368

481

Total Fuel Cost

39

41

Nuclear

Total Fossil

($ millions)

329

440

2009

2010

Quarter Ended September 30

PSEG Power –

Fuel Costs

641

817

Oil & Gas

240

336

Coal

22.30

25.65

$ / MWh

44,436

49,795

Total Generation

(GWh)

991

1,277

Total Fuel Cost

110

124

Nuclear

Total Fossil

($ millions)

881

1,153

2009

2010

Nine Months Ended

September 30

19

PSEG Power –

Gross Margin Performance

$0

$25

$50

$75

2010

2009

$0

$25

$50

$75

2010

2009

$64

$57

Quarter Ended

September 30

Nine Months Ended

September 30

$63

$55

In Q3, PJM total gross margin was sustained by strong weather-related demand,

with higher volumes offsetting lower realized prices

Salem Unit 1’s 17-day unplanned outage reduced nuclear generation and

earnings by $0.03 per share

Low spark spreads, partially offset by

increase in gas-fired generation.

$18

New York

Regional Performance

$41

$15

$856

Gross

Margin ($M)

Q3 2010 Performance

Region

Generation flat with year-ago levels.

Texas

Generation increased with strong

weather-related demand.

New

England

Q3 contribution to gross margin ($M)

flat versus year ago.  A 10% increase

in generation offsetting lower realized

prices and the cost of the Salem

nuclear outage.

PJM

PSEG Power Gross Margin ($/MWh)*

*Excludes Texas.

20

PSEG Power –

Q3 Operating Highlights

10% increase in total output

Weighted average combined cycle capacity factor of 59% vs. 52% in Q3 2009

Weighted average coal capacity factor of 60% vs

43% in Q3 2009

Q3 nuclear fleet capacity factor of 89.4%; Hope Creek refueling outage underway

in Q4 2010

Operations

Financial

Power markets affected by hottest summer on record in NJ, weak economic

growth, and an excess supply of gas

Actively managing coal inventory

Exploring the sale of Texas gas-fired assets (2,000 MW)

New, 5-year $100 million bilateral credit facility

Regulatory and Market

Environment

PSE&G

2010 Q3 Review

*

*

*

*

*

*

*

*

*

*

22

PSE&G –

Q3 2010 Earnings Summary

(35)

1,717

1,682

Total Operating Expenses

1

30

31

Taxes Other than Income Taxes

Operating Expenses

(52)

1,167

1,115

Energy Costs

(24)

351

327

Operation & Maintenance

40

169

209

Depreciation & Amortization

$ 0.13

$ 0.17

$ 0.30

EPS from Operating Earnings*

$ 68    

$ 87

$ 155

Operating Earnings / Net Income

$ 64

$ 1,943

$ 2,007

Operating Revenues

Variance

Q3 2009

Q3 2010

$ millions (except EPS)

* See page 36 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

23

$0.17

0.07

0.03

0.02

0.01

$0.30

0.00

0.10

0.20

0.30

PSE&G EPS Reconciliation –

Q3 2010

versus Q3 2009

Q3 2010  

Operating

Earnings*

Q3 2009       

Operating

Earnings*

Weather .03

O&M

* See page 36 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

Electric & Gas

Margin (Including

Rate Increases) .06

Transmission .01

Other

Rabbi Trust

Gains .02

Taxes .01

D&A (.01)

Interest (.01)

24

56

33

38

27

5

147

55

0

50

100

150

200

250

2010

Normal

2009

July

August

September

Q3 2010 Was The Warmest Summer on Record in New Jersey

Third Quarter Number of Hours

Where

the

Temperature

was

Equal

or

Greater

than

90

o

F

40

230

93

…

with peak-producing hours up by over 4.5x 2009 levels

25

PSE&G Capital Spending: 2010-2013

PSE&G Capital Spending: 2010-2013

$6,130

$1,590

$1,490

$1,450

$1,600

Total

$890

$30

$190

$320

$350

Renewables/EMP

$2,170

$420

$390

$460

$900

Distribution

$3,070

$1,140

$910

$670

$350

Transmission

2010-2013E

2013E

2012E

2011E

2010E*

($ Millions)

Capital program provides growth in rate base of 9.5% per year from 2009

base of $7.3 Billion

Transmission investment represents 50% of planned capex over 2010-2013 and is

expected to comprise 31% of PSE&G rate base by 2013

Supportive regulatory treatment with contemporaneous recovery should align

earnings growth with investment

*Estimate

26

PSE&G –

Q3 Operating Highlights

PSE&G

Electric

and

Gas

rate

increases

effective

in

June

and

July

2010,

respectively

B-R-H Transmission Line re-configured to a 230 KV project with underground components;

2015 in-service date

Reliability projects related to the S-R Transmission in-service delay identified

EMP review underway; 2011 update expected

Updated PSE&G Capital Forecast for 2010-2013 calls for $6.1 Billion investment program

Rate Base Growth (CAGR) of 9.5% per year

Distribution’s

average

return

on

equity

for

the

12

months

ended

September

30,

2010

was

9.5%

Operations

Financial

Economic indicators have yet to point to sustained recovery

Electric sales skewed by the hottest summer on record in NJ

Temperature Humidity Index was 30% above normal and 68% above 2009’s mild summer

Regulatory and Market

Environment

PSEG Energy Holdings

2010 Q3 Review

*

*

*

*

*

*

*

*

*

*

28

PSEG Energy Holdings –

Q3 2010 Earnings Summary

-

-

-

Discontinued Operations, Net of Tax

-

-

-

Mark-to-Market, Net of Tax

$0.05

$ 0.00

$ 0.05

EPS from Operating Earnings*

$ 25

$  (1)

$  24

Net Income

$ 25

$  (1)

$  24

Operating Earnings

Variance

Q3 2009

Q3 2010

$ millions (except EPS)

* See page 36 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

29

$0.05

0.05

(0.01)

0.01

$0.0

0.00

0.01

0.02

0.03

0.04

0.05

0.06

PSEG Energy Holdings EPS Reconciliation –

Q3 2010 versus Q3 2009

Q3 2010       

Operating

Earnings*

Q3 2009      

Operating

Earnings*

G&A

Taxes

Other

* See page 36 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

Resources

Global

Holdings

Taxes

2009 Debt Exchange

Cost Eliminated in

Consolidation .04

Interest .01

30

PSEG Energy Holdings –

Q3 Operating Highlights

Financial

Termination of 2 additional leases in Q3 reduced net cash exposure at

quarter-end to $330 million; $320 million of cash on deposit at IRS

Solar projects in Ohio and Florida placed in-service; NJ solar project is

operating as planned

Continuing to review opportunities for additional investments in

solar

under PPA arrangements

In December 2010, Holdings will redeem the remaining $127 Million

of its 8.5% Senior Notes

31

$660

~$1,200

~$10

~$330

$-

$500

$1,000

$1,500

2008

2009

2010

Cash Exposure Net

of $320M of IRS

Deposits

2009 Activities

Terminated 12

LILO/SILO

leases

2010 Activities

Terminated 4 LILO/SILO

leases to date

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.

1

5

17

# of LILO/SILO

Leases Remaining*

12/31/2008

12/31/2009

9/30/2010

*LILO/SILO leases are international leveraged leases.

PSEG

*

*

*

*

*

*

*

*

*

*

33

2010 Operating Earnings Guidance By Subsidiary

$ 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 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

34

PSEG –

Q3 2010

Utility capital spending will result in 9.5%

rate base growth CAGR –

primarily driven

by transmission investment

Migration impacts are meeting expectations

but accelerating realization of current market

Forward price curve is weak and getting

weaker

35

PSEG Liquidity as of October 20, 2010

PSEG Liquidity as of October 20, 2010

Expiration

Total

Available

Company

Facility

Date

Facility

Usage

Liquidity

5-Year Credit Facility (Power)

Dec-12

$1,600

1

$173

$1,427

5-Year Credit Facility (PSEG)

Dec-12

$1,000

2

$14

$986

5-Year Bilateral Facility (Power)

Sep-15

$100

$100

$0

2-Year Credit Facility (Power)

Jul-11

$350

$0

$350

PSE&G

5-Year Credit Facility

Jun-12

$600

3

$0

$600

Total

$3,650

$3,363

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)

36

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

2010

2009

Earnings Impact ($ Millions)

Gain (Loss) on Nuclear Decommissioning Trust (NDT)

10

$       

7

$         

30

$       

1

$         

Fund Related Activity (PSEG Power)

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

19

17

30

(22)

Net Reversal of Lease Transaction Reserves (Energy Holdings)

-

-

-

-

Market Transition Charge Refund (PSE&G)

-

-

(72)

-

Total Pro-forma adjustments

29

$       

24

$       

(12)

$      

(21)

$      

Fully Diluted Average Shares Outstanding (in Millions)

507

507

507

507

Per Share Impact (Diluted)

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

0.02

$    

0.01

$    

0.06

$    

-

$      

Gain (Loss) on MTM (PSEG Power)

0.04

0.03

0.06

(0.05)

Net Reversal of Lease Transaction Reserves (Energy Holdings)

-

-

-

-

Market Transition Charge Refund (PSE&G)

-

-

(0.14)

-

Total Pro-forma adjustments

0.06

$    

0.04

$    

(0.02)

$   

(0.05)

$   

(a) Income from Continuing Operations for the three and nine months ended September 30, 2010 and 2009.

December 31, 2009 is equal to Net Income.

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Reconciling

Items

Excluded

from

Continuing

Operations

to

Compute

Operating

Earnings

(Unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

(a)

37

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,