Recent Accounting Standards

6 Months Ended

Jun. 30, 2011

Recent Accounting Standards

Note 2. Recent Accounting Standards

New Standard Adopted during 2011

Revenue Arrangements with Multiple Deliverables

• amends existing guidance for identifying separate deliverables in a revenue-generating transaction where multiple deliverables exist,

• establishes a selling price hierarchy, such as, "vendor-specific objective evidence," "third-party evidence" and "estimated selling price" for determining the selling price of a deliverable, and

• provides guidance for allocating and recognizing revenue based on separate deliverables.

We adopted this standard, prospectively effective January 1, 2011, for new and significantly modified revenue arrangements. Upon adoption, there was no material impact on our financial statements and we do not anticipate any changes to the pattern or general timing of revenue recognition for our significant units of account in future periods.

New Accounting Standards Issued But Not Yet Adopted

Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and International Financial Reporting Standards (IFRS)

This accounting standard was issued to update guidance related to fair value measurements and disclosures as a step towards achieving convergence between US GAAP and IFRS. The updated guidance

• clarifies intent about application of existing fair value measurements and disclosures,

• changes some requirements for fair value measurements, and

• requires expanded disclosures.

This guidance is effective for interim and annual periods beginning after December 15, 2011. We believe our adoption of the new guidance on January 1, 2012 will not have an impact on our consolidated financial position, results of operations or cash flows; however, it will result in expanded disclosures.

Presentation of Comprehensive Income

This accounting standard was issued on the presentation of comprehensive income as a step towards achieving convergence between US GAAP and IFRS. The updated guidance

• allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements, and

• eliminates the current option to report other comprehensive income and its components in the statement of changes in equity.

This guidance is effective for fiscal years and interim periods beginning after December 15, 2011. We believe that the adoption of the new guidance on January 1, 2012 will not have an impact on our consolidated financial position, results of operations or cash flows, but will change the presentation of the components of other comprehensive income.

Power [Member]

Recent Accounting Standards

Note 2. Recent Accounting Standards

New Standard Adopted during 2011

Revenue Arrangements with Multiple Deliverables

• amends existing guidance for identifying separate deliverables in a revenue-generating transaction where multiple deliverables exist,

• establishes a selling price hierarchy, such as, "vendor-specific objective evidence," "third-party evidence" and "estimated selling price" for determining the selling price of a deliverable, and

• provides guidance for allocating and recognizing revenue based on separate deliverables.

We adopted this standard, prospectively effective January 1, 2011, for new and significantly modified revenue arrangements. Upon adoption, there was no material impact on our financial statements and we do not anticipate any changes to the pattern or general timing of revenue recognition for our significant units of account in future periods.

New Accounting Standards Issued But Not Yet Adopted

Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and International Financial Reporting Standards (IFRS)

This accounting standard was issued to update guidance related to fair value measurements and disclosures as a step towards achieving convergence between US GAAP and IFRS. The updated guidance

• clarifies intent about application of existing fair value measurements and disclosures,

• changes some requirements for fair value measurements, and

• requires expanded disclosures.

This guidance is effective for interim and annual periods beginning after December 15, 2011. We believe our adoption of the new guidance on January 1, 2012 will not have an impact on our consolidated financial position, results of operations or cash flows; however, it will result in expanded disclosures.

Presentation of Comprehensive Income

This accounting standard was issued on the presentation of comprehensive income as a step towards achieving convergence between US GAAP and IFRS. The updated guidance

• allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements, and

• eliminates the current option to report other comprehensive income and its components in the statement of changes in equity.

This guidance is effective for fiscal years and interim periods beginning after December 15, 2011. We believe that the adoption of the new guidance on January 1, 2012 will not have an impact on our consolidated financial position, results of operations or cash flows, but will change the presentation of the components of other comprehensive income.

PSE&G [Member]

Recent Accounting Standards

Note 2. Recent Accounting Standards

New Standard Adopted during 2011

Revenue Arrangements with Multiple Deliverables

• amends existing guidance for identifying separate deliverables in a revenue-generating transaction where multiple deliverables exist,

• establishes a selling price hierarchy, such as, "vendor-specific objective evidence," "third-party evidence" and "estimated selling price" for determining the selling price of a deliverable, and

• provides guidance for allocating and recognizing revenue based on separate deliverables.

We adopted this standard, prospectively effective January 1, 2011, for new and significantly modified revenue arrangements. Upon adoption, there was no material impact on our financial statements and we do not anticipate any changes to the pattern or general timing of revenue recognition for our significant units of account in future periods.

New Accounting Standards Issued But Not Yet Adopted

Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and International Financial Reporting Standards (IFRS)

This accounting standard was issued to update guidance related to fair value measurements and disclosures as a step towards achieving convergence between US GAAP and IFRS. The updated guidance

• clarifies intent about application of existing fair value measurements and disclosures,

• changes some requirements for fair value measurements, and

• requires expanded disclosures.

This guidance is effective for interim and annual periods beginning after December 15, 2011. We believe our adoption of the new guidance on January 1, 2012 will not have an impact on our consolidated financial position, results of operations or cash flows; however, it will result in expanded disclosures.

Presentation of Comprehensive Income

This accounting standard was issued on the presentation of comprehensive income as a step towards achieving convergence between US GAAP and IFRS. The updated guidance

• allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements, and

• eliminates the current option to report other comprehensive income and its components in the statement of changes in equity.

This guidance is effective for fiscal years and interim periods beginning after December 15, 2011. We believe that the adoption of the new guidance on January 1, 2012 will not have an impact on our consolidated financial position, results of operations or cash flows, but will change the presentation of the components of other comprehensive income.