Public Service Enterprise (PEG) 10-Q 3 Aug 09 2009 Q2 Quarterly report Financial data

DOCUMENT AND ENTITY INFORMATION

DOCUMENT AND ENTITY INFORMATION (USD $)
	6 Months Ended Jun. 30, 2009	Jun. 30, 2008
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-06-30
Entity Registrant Name	Public Service Enterprise Group Incorporated
Entity Central Index Key	0000788784
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$23,326,705,042
Entity Common Stock, Shares Outstanding	505,985,285

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Share data in Thousands	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
OPERATING REVENUES	$2,561	$2,550	$6,482	$6,342
OPERATING EXPENSES
Energy Costs	1,067	1,535	3,135	3,654
Operation and Maintenance	628	620	1,303	1,247
Depreciation and Amortization	203	191	410	383
Taxes Other Than Income Taxes	26	27	70	70
Total Operating Expenses	1,924	2,373	4,918	5,354
OPERATING INCOME	637	177	1,564	988
Income from Equity Method Investments	9	7	19	19
Impairment on Equity Method Investments	(8)	0	(8)	0
Other Income	91	97	162	190
Other Deductions	(44)	(56)	(99)	(113)
Other Than Temporary Impairments	(1)	(32)	(61)	(70)
Interest Expense	(133)	(146)	(278)	(299)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	551	47	1,299	715
Income Tax Expense	(240)	(213)	(544)	(446)
INCOME (LOSS) FROM CONTINUING OPERATIONS	311	(166)	755	269
Income from Discontinued Operations, net of tax expense of $5 and $13 for the three and six months ended 2008	0	16	0	29
NET INCOME (LOSS)	$311	($150)	$755	$298
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (THOUSANDS):
BASIC	505,990	508,491	505,988	508,491
DILUTED	506,936	509,487	506,812	509,483
EARNINGS PER SHARE: BASIC
INCOME (LOSS) FROM CONTINUING OPERATIONS	0.61	-0.32	1.49	0.53
NET INCOME (LOSS)	0.61	-0.29	1.49	0.59
EARNINGS PER SHARE: DILUTED
INCOME (LOSS) FROM CONTINUING OPERATIONS	0.61	-0.32	1.49	0.53
NET INCOME (LOSS)	0.61	-0.29	1.49	0.59
DIVIDENDS PAID PER SHARE OF COMMON STOCK	0.3325	0.3225	0.665	0.645

STATEMENTS OF OPERATIONS PARENT

STATEMENTS OF OPERATIONS PARENTHETICAL (USD $)
In Millions	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2008
Statements of Operations Parenthetical
Income from Discontinued Operations, tax expense	$5	$13

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions	Jun. 30, 2009	Dec. 31, 2008
ASSETS
Cash and Cash Equivalents	$393	$321
Accounts Receivable, net of allowances of $69 and $66 in 2009 and 2008, respectively	1,271	1,398
Unbilled Revenues	303	454
Fuel	730	938
Materials and Supplies	343	317
Prepayments	465	150
Restricted Funds	10	118
Derivative Contracts	259	237
Other	60	66
Total Current Assets	3,834	3,999
PROPERTY, PLANT AND EQUIPMENT	21,519	20,818
Less: Accumulated Depreciation and Amortization	(6,620)	(6,385)
Net Property, Plant and Equipment	14,899	14,433
NONCURRENT ASSETS
Regulatory Assets	6,022	6,352
Long-Term Investments	2,309	2,695
Nuclear Decommissioning Trust (NDT) Funds	1,059	970
Other Special Funds	140	133
Goodwill	16	16
Other Intangibles	108	53
Derivative Contracts	154	160
Other	219	238
Total Noncurrent Assets	10,027	10,617
TOTAL ASSETS	28,760	29,049
LIABILITIES AND CAPITALIZATION
Long-Term Debt Due Within One Year	746	1,033
Commercial Paper and Loans	333	19
Accounts Payable	941	1,227
Derivative Contracts	310	356
Accrued Interest	100	99
Accrued Taxes	206	8
Clean Energy Program	159	142
Obligation to Return Cash Collateral	96	102
Other	430	424
Total Current Liabilities	3,321	3,410
NONCURRENT LIABILITIES
Deferred Income Taxes and Investment Tax Credits (ITC)	4,046	3,865
Regulatory Liabilities	396	355
Asset Retirement Obligations	595	576
Other Postretirement Benefit (OPEB) Costs	968	975
Accrued Pension Costs	877	1,196
Clean Energy Program	451	532
Environmental Costs	730	743
Derivative Contracts	106	164
Long-Term Accrued Taxes	856	1,241
Other	130	125
Total Noncurrent Liabilities	9,155	9,772
LONG-TERM DEBT
Long-Term Debt	6,515	6,621
Securitization Debt	1,250	1,342
Project Level, Non-Recourse Debt	40	42
Total Long-Term Debt	7,805	8,005
SUBSIDIARY'S PREFERRED STOCK WITHOUT MANDATORY REDEMPTION	80	80
STOCKHOLDERS' EQUITY
Common Stock, no par, authorized 1,000,000,000 shares; issued, 2009 and 2008 - 533,556,660 shares	4,772	4,756
Treasury Stock, at cost, 2009 - 27,571,375 shares; 2008 - 27,538,762 shares	(587)	(581)
Retained Earnings	4,204	3,773
Accumulated Other Comprehensive Loss	0	(177)
Total Common Stockholders' Equity	8,389	7,771
Noncontrolling Interest - Equity Investments	10	11
Total Capitalization	16,284	15,867
TOTAL LIABILITIES AND CAPITALIZATION	$28,760	$29,049

BALANCE SHEETS PARENTHETICAL

BALANCE SHEETS PARENTHETICAL (USD $)
In Millions, except Share data	Jun. 30, 2009	Dec. 31, 2008
Balance Sheets Parenthetical
Allowance for Doubtful Accounts Receivable	$69	$66
Common Stock, Shares Authorized	1,000,000,000	1,000,000,000
Common Stock, Shares, Issued	533,556,660	533,556,660
Treasury Stock, Shares	27,571,375	27,538,762

1_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME (LOSS)	$755	$298
Depreciation and Amortization	410	387
Amortization of Nuclear Fuel	57	48
Provision for Deferred Income Taxes (Other than Leases) and ITC	139	90
Non-Cash Employee Benefit Plan Costs	173	84
Lease Transaction Charges, net of tax	0	490
Leveraged Lease Income, Adjusted for Rents Received and Deferred Taxes	(364)	(23)
Gain on Sale of Investments	(99)	(1)
Undistributed Earnings from Affiliates	(11)	(37)
Net Realized and Unrealized Gains on Energy Contracts and Other Derivatives	(71)	(50)
Over (Under) Recovery of Electric Energy Costs (BGS and NTC) and Gas Costs	8	(66)
Over (Under) Recovery of Societal Benefits Charge (SBC)	47	(12)
Cost of Removal	(23)	(20)
Net Realized (Gains) Losses and Expense from NDT Funds	(3)	5
Net Change in Certain Current Assets and Liabilities	307	(585)
Employee Benefit Plan Funding and Related Payments	(409)	(30)
Other	(127)	45
Net Cash Provided By Operating Activities	789	623
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to Property, Plant and Equipment	(816)	(739)
Proceeds from the Sale of Capital Leases and Investments	510	41
Proceeds from NDT Funds Sales	1,475	1,257
Investment in NDT Funds	(1,491)	(1,271)
Restricted Funds	108	0
NDT Funds Interest and Dividends	21	24
Other	(17)	(14)
Net Cash Used In Investing Activities	(210)	(702)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Change in Commercial Paper and Loans	314	854
Issuance of Long-Term Debt	209	700
Redemptions of Long-term Debts	(320)	(1,263)
Repayment of Non-Recourse Debt	(283)	(22)
Redemption of Securitization Debt	(87)	(82)
Net Premium Paid on Early Extinguishment of Debt	0	(80)
Cash Dividends Paid on Common Stock	(336)	(328)
Other	(4)	3
Net Cash Used In Financing Activities	(507)	(218)
Effect of Exchange Rate Change	0	1
Net Increase (Decrease) in Cash and Cash Equivalents	72	(296)
Cash and Cash Equivalents at Beginning of Period	321	380
Cash and Cash Equivalents at End of Period	393	84
Supplemental Disclosure of Cash Flow Information:
Income Taxes Paid	613	454
Interest Paid, Net of Amounts Capitalized	$254	$279

Organization and Basis of Prese

Organization and Basis of Presentation
	3 Months Ended Jun. 30, 2009 USD / shares
Organization and Basis of Presentation [Abstract]
Organization and Basis of Presentation	Note 1. Organization and Basis of Presentation Organization PSEG is a holding company with a diversified business mix within the energy industry. Its operations are primarily in the Northeastern and Mid Atlantic United States and in other select markets. PSEGs four principal direct wholly owned subsidiaries are: Power which is a multi-regional, wholesale energy supply company that integrates its generating asset operations and gas supply commitments with its wholesale energy, fuel supply, energy trading and marketing and risk management function through three principal direct wholly owned subsidiaries. Powers subsidiaries are subject to regulation by the Federal Energy Regulatory Commission (FERC), the Nuclear Regulatory Commission (NRC) and the states in which they operate. PSEG which is an operating public utility engaged principally in the transmission of electricity and distribution of electricity and natural gas in certain areas of New Jersey. PSEG is subject to regulation by the New Jersey Board of Public Utilities (BPU) and the FERC. PSEG Energy Holdings, L.L.C. (Energy Holdings) - which owns and operates primarily domestic projects engaged in the generation of energy and has invested in energy-related leveraged leases through its direct wholly owned subsidiaries. Certain Energy Holdings subsidiaries are subject to regulation by the FERC and the states in which they operate. Energy Holdings is also exploring opportunities for investment in renewable generation projects. PSEG Services Corporation (Services) which provides management and administrative and general services to PSEG and its subsidiaries. Basis of Presentation The respective financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) applicable to Quarterly Reports on Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. These Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements (Notes) should be read in conjunction with, and update and supplement matters discussed in, PSEGs, Powers and PSEGs respective Annual Report on Form 10-K for the year ended December 31, 2008 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2009. The unaudited condensed consolidated financial information furnished herein reflects all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. All such adjustments are of a normal recurring nature. The year-end Condensed Consolidated Balance Sheets were derived from the audited Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2008. Reclassifications Certain reclassifications were made to the prior period financial statements in accordance with new accounting guidance adopted in 2009. Minority interests of $11 million were rec

Recent Accounting Standards

Recent Accounting Standards
	3 Months Ended Jun. 30, 2009 USD / shares
Recent Accounting Standards [Abstract]
Recent Accounting Standards	Note 2. Recent Accounting Standards The following is a summary of new accounting guidance adopted in 2009 and guidance issued but not yet adopted that could impact our businesses. The new accounting guidance adopted in 2009 did not have a material impact on our financial statements. Accounting standards adopted in 2009 Statement of Financial Accounting Standards (SFAS) No. 141 (revised 2007), Business Combinations (SFAS 141(R)) changes financial accounting and reporting of business combination transactions, applies to all transactions and events in which an entity obtains control of one or more businesses of an acquiree, requires all assets acquired and liabilities assumed in a business combination to be measured at their acquisition date fair value, with limited exceptions, and requires acquisition-related costs and certain restructuring costs to be recognized separately from the business combination. We adopted SFAS 141(R) effective January 1, 2009. Any new business combination transactions will be accounted for under this guidance. SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements - an amendment of Accounting Research Bulletin (ARB) No. 51 (SFAS 160) changes the financial reporting relationship between a parent and non-controlling interests, requires all entities to report non-controlling interests in subsidiaries as a separate component of equity in the consolidated financial statements, requires net income attributable to the non-controlling interest to be shown on the face of the income statement in addition to net income attributable to the controlling interest, and applies prospectively, except for presentation and disclosure requirements, which are applied retrospectively. We adopted SFAS 160 effective January 1, 2009 and revised the balance sheet and income statement presentations as required by the standard. The income statement impact was immaterial. SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activitiesan amendment of FASB Statement No. 133 (SFAS 161) requires an entity to disclose an understanding of: how and why it uses derivatives, how derivatives and related hedged items are accounted for, and the overall impact of derivatives on an entitys financial statements. We adopted SFAS 161 effective January 1, 2009. For additional information / disclosures, see Note 8. Financial Risk Management Activities. SFAS No. 165, Subsequent Events (SFAS 165) establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued and requires the disclosure of the date through which subsequent events have been evaluated and whether that date is the date on which the financial statements were issued or the date on which the financial statements were available to be issued. We adopted SFAS 165 effective for our second quarter 2009 reporting. We evaluated any subsequent events through July 31, 2009, which is the date the financial statements were issued. FASB Staff P

Discontinued Operations and Dis

Discontinued Operations and Dispositions
	3 Months Ended Jun. 30, 2009 USD / shares
Discontinued Operations and Dispositions [Abstract]
Discontinued Operations and Dispositions	Note 3. Discontinued Operations and Dispositions Discontinued Operations Bioenergie In November 2008, Energy Holdings sold its 85% ownership interest in Bioenergie for $40 million. The sale resulted in an after-tax loss of $15 million. Net cash proceeds, after realization of tax benefits, were approximately $70 million. Bioenergies operating results for the quarter and six months ended June 30, 2008, which were reclassified to Discontinued Operations, are summarized below: Three MonthsEnded June 30, 2008 Six Months Ended June 30, 2008 Millions Operating Revenues $ 11 $ 22 Income Before Income Taxes $ - $ 1 Net Loss $ - $ (1) SAESA Group In July 2008, Energy Holdings sold its investment in the SAESA Group for a total of $1.3 billion, including the assumption of $413 million of the consolidated debt of the group. The sale resulted in an after-tax gain of $187 million. Net cash proceeds, after Chilean and U.S. taxes of $269 million, were $612 million. SAESA Groups operating results for the quarter and six months ended June 30, 2008, which are included in Discontinued Operations, are summarized below: Three Months Ended June 30, 2008 Six Months Ended June 30, 2008 Millions Operating Revenues $ 156 $ 342 Income Before Income Taxes $ 21 $ 41 Net Income $ 16 $ 30 Dispositions GWF Energy LLC (GWF Energy) In May 2009, Energy Holdings entered into a Memorandum of Understanding under which it will sell, in two separate transactions, its 60% ownership interest in GWF Energy, an equity method investment, for a total purchase price of $70 million. As a result, Energy Holdings recorded an after-tax impairment charge of $3 million. Energy Holdings completed the first stage of the sale in June 2009, selling a 10.1% interest in GWF Energy for approximately $7 million. The sale of Energy Holdings remaining 49.9% interest is subject to certain conditions, including theexecution of a new power purchase agreement (PPA)with its customer and the related approval of thePPAby the California Public Utilities Commission. PPN Power Generating Company Limited (PPN) In May 2009, Energy Holdings sold its 20% ownership interest in PPN, which owns and operates a 330 MW generation facility in India for approximately book value. Leveraged Leases In the first six months of 2009, Energy Holdings sold its interest in nine leveraged leases with a combined book value of approximately $369 million, including seven international leases for which the IRS has disallowed deductions taken in prior years. Total proceeds for the sales were approximately $460 million and resulted in an after-tax gain of $35 million. Proceeds from these transactions are being used to reduce Energy Holdings tax exposure related to these lease investments. For additional information see Note 6. Commitments and Contingent Liabilities. Other In May 2009, Energy Holdings sold its 6.5% interest in the Midland Cogeneration Venture LP (MCV) for a

Available-for-Sale Securities

Available-for-Sale Securities
	3 Months Ended Jun. 30, 2009 USD / shares
Available-for-Sale Securities [Abstract]
Available-for-Sale Securities	Note 4. Available-for-Sale Securities NDT Funds In accordance with NRC regulations, entities owning an interest in nuclear generating facilities are required to determine the costs and funding methods necessary to decommission such facilities upon termination of operation. As a general practice, each nuclear owner places funds in independent external trust accounts it maintains to provide for decommissioning. Power maintains the external master nuclear decommissioning trust which contains two separate funds: a qualified fund and a non-qualified fund. Section 468A of the Internal Revenue Code limits the amount of money that can be contributed into a qualified fund. In the most recent study of the total cost of decommissioning, Powers share related to its five nuclear units was estimated at approximately $2.1 billion, including contingencies. The liability for decommissioning recorded on a discounted basis as of June 30, 2009 was approximately $309 million and is included in the Asset Retirement Obligation (ARO). The trust funds are managed by third-party investment advisors who operate under investment guidelines developed by Powers NDT Investment Committee. Power classifies investments in the NDT Funds as available-for-sale under SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, (SFAS 115). The following tables show the fair values and gross unrealized gains and losses for the securities held in the NDT Funds. As of June 30, 2009 Gross Gross Estimated Fair Value Unrealized Unrealized Cost Gains Losses Millions Equity Securities $ 441 $ 88 $ (2) $ 527 Debt Securities Government Obligations 296 4 (4) 296 Other Debt Securities 212 14 (20) 206 Total Debt Securities 508 18 (24) 502 Other Securities 30 - - 30 Total Available-for-Sale Securities $ 979 $ 106 $ (26) $ 1,059 As of December 31, 2008 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Millions Equity Securities $ 386 $ 32 $ (5) $ 413 Debt Securities Government Obligations 192 3 - 195 Other Debt Securities 284 6 - 290 Total Debt Securities 476 9 - 485 Other Securities 72 1 (1) 72 Total Available-for-Sale Securities $ 934 $ 42 $ (6) $ 970 The following table shows the value of securities in the NDT Funds that have been in an unrealized position for less than 12 months, or for 12 months or longer. As of June 30, 2009 As of June 30, 2009 As of December 31, 2008 Greater Than 12 Months Less Than 12 Months Less Than 12 Months* Gross Gro

Pension and OPEB

Pension and OPEB
	3 Months Ended Jun. 30, 2009 USD / shares
Pension and OPEB [Abstract]
Pension and OPEB	Note 5. Pension and OPEB PSEG sponsors several qualified and nonqualified pension plans and other postretirement benefit plans covering PSEGs and its participating affiliates current and former employees who meet certain eligibility criteria. The following table provides the components of net periodic benefit costs relating to all qualified and nonqualified pension and OPEB plans on an aggregate basis. OPEB costs are presented net of the federal subsidy expected for prescription drugs under the Medicare Prescription Drug Improvement and Modernization Act of 2003. Pension Benefits Three Months Ended June 30, OPEB Three Months Ended June 30, Pension Benefits Six Months Ended June 30, OPEB Six Months Ended June 30, 2009 2008 2009 2008 2009 2008 2009 2008 Millions Components of Net Periodic Benefit Cost: Service Cost $ 19 $ 20 $ 3 $ 3 $ 38 $ 39 $ 6 $ 7 Interest Cost 59 57 18 18 118 114 36 36 Expected Return on Plan Assets (54) (73) (3) (3) (108) (145) (6) (7) Amortization of Net Transition Obligation - - 7 7 - - 14 14 Prior Service Cost 2 3 3 3 4 5 7 6 Actuarial Loss 28 3 (1) (1) 56 6 (2) (1) Net Periodic Benefit Cost $ 54 $ 10 $ 27 $ 27 $ 108 $ 19 $ 55 $ 55 Effect of Regulatory Asset - 5 5 - 10 10 Total Benefit Expense, Including Effect of Regulatory Asset $ 54 $ 10 $ 32 $ 32 $ 108 $ 19 $ 65 $ 65 Pension and OPEB costs for PSEG, Power and PSEG are detailed as follows: Pension Three Months Ended June 30, OPEB Three Months Ended June 30, Pension Six Months Ended June 30, OPEB Six Months Ended June 30, 2009 2008 2009 2008 2009 2008 2009 2008 Millions Power $ 17 $ 3 $ 3 $ 3 $ 33 $ 6 $ 6 $ 6 PSEG 30 4 29 28 60 8 58 57 Other 7 3 - 1 15 5 1 2 Total Benefit Costs $ 54 $ 10 $ 32 $ 32 $ 108 $ 19 $ 65 $ 65 During the six months ended June 30, 2009, PSEG contributed its planned contributions for the year 2009 of $364 million and $11 million into its pension and postretirement healthcare plans, respectively.

Commitments and Contingent Liab

Commitments and Contingent Liabilities
	3 Months Ended Jun. 30, 2009 USD / shares
Commitments and Contingent Liabilities [Abstract]
Commitments and Contingent Liabilities	Note 6. Commitments and Contingent Liabilities Guaranteed Obligations Power has unconditionally guaranteed payments by its subsidiaries in commodity-related transactions to support current exposure, interest and other costs on sums due and payable in the ordinary course of business. These guarantees are provided to counterparties in order to obtain credit. Under these agreements, guarantees cover lines of credit between entities and are often reciprocal in nature. The exposure between counterparties can move in either direction. In order for Power to incur liability for the face value of the outstanding guarantees, its subsidiaries would have to fully utilize the credit granted to them by every counterparty to whom Power has provided a guarantee and all of the related contracts would have to be out-of-the-money (if the contracts are terminated, Power would owe money to the counterparties). The probability of this is highly unlikely due to offsetting positions within the portfolio. For this reason, the current exposure at any point in time is a more meaningful representation of the potential liability under these guarantees. This current exposure consists of the net of accounts receivable and accounts payable and the forward value on open positions, less any margins posted. Power is subject to counterparty collateral calls related to commodity contracts and is subject to certain creditworthiness standards as guarantor under performance guarantees of its subsidiaries. Changes in commodity prices can have a material impact on margin requirements under such contracts, which are posted and received primarily in the form of letters of credit. Power also routinely enters into futures and options transactions for electricity and natural gas as part of its operations. These futures contracts usually require a cash margin deposit with brokers, which can change based on market movement and in accordance with exchange rules. The face value of outstanding guarantees, current exposure and margin positions as of June 30, 2009 and December 31, 2008 are as follows: As of June 30, As of December 31, 2009 2008 Millions Face value of outstanding guarantees $ 1,897 $ 1,856 Exposure under current guarantees $ 624 $ 585 Letters of Credit Margin Posted $ 153 $ 201 Letters of Credit Margin Received $ 148 $ 250 Net Cash Received Counterparty Cash Margin Deposited $ 1 $ 3 Counterparty Cash Margin (Received) (194) (81) Net Broker Balance (Received) Deposited (14) (74) Total Net Cash Received $ (207) $ (152) Power nets the fair value of cash collateral receivables and payables with the corresponding net energy contract balances. Of the net cash received, Power has included $227 million and $112 million in its corresponding net derivative contract positions as of June 30, 2009 and December 31, 2008, respectively. The remaining balance of net cash (received) deposited shown above is primarily include

Changes in Capitalization

Changes in Capitalization
	3 Months Ended Jun. 30, 2009 USD / shares
Changes in Capitalization [Abstract]
Changes in Capitalization	Note 7. Changes in Capitalization The following capital transactions occurred in the first six months of 2009: Power converted $44 million of 4.00% Pollution Control Bonds to variable rate demand bonds backed by letters of credit, and established a program for the issuance of up to $500 million of unsecured medium-term notes (MTNs) to retail investors in January. Under this program we issued $161 million of 6.5% MTNs due January 2014 (issued January, callable in one year) and issued $48 million of 6% MTNs due January 2013 (issued January, callable in one year). paid a cash dividend of $600 million to PSEG and paid $250 million of 3.75% Senior Notes at maturity in April. PSEG paid $44 million of 8.10% MTNs, Series A at maturity in May, paid $16 million of 8.16% MTNs, Series A at maturity in May, received $250 million equity contribution from PSEG, paid $82 million of Transition Fundings securitization debt, and paid $5 million of Transition Funding IIs securitization debt. Energy Holdings redeemed $280 million of floating rate non-recourse project debt due in December 2009 associated with PSEG Texas and repurchased $10 million of its 8.5% Senior Notes due 2011.

Financial Risk Management Activ

Financial Risk Management Activities
	3 Months Ended Jun. 30, 2009 USD / shares
Financial Risk Management Activities [Abstract]
Financial Risk Management Activities	Note 8. Financial Risk Management Activities The operations of PSEG, Power and PSEG are exposed to market risks from changes in commodity prices, interest rates and equity prices that could affect their results of operations and financial condition. Exposure to these risks is managed through normal operating and financing activities and, when appropriate, through hedging transactions. Hedging transactions use derivative instruments to create a relationship in which changes to the value of the assets, liabilities or anticipated transactions exposed to market risks are expected to be offset by changes in the value of these derivative instruments. Commodity Prices The availability and price of energy commodities are subject to fluctuations due to weather, environmental policies, changes in supply and demand, state and federal regulatory policies, market conditions, transmission availability and other events. Power and Energy Holdings use physical and financial transactions in the wholesale energy markets to mitigate the effects of adverse movements in fuel and electricity prices. Contracts that do not qualify for hedge accounting are marked to market in accordance with SFAS 133, with changes in fair value recorded in the income statement. The fair value for the majority of these contracts is obtained from quoted market sources. Modeling techniques using assumptions reflective of current market rates, yield curves and forward prices are used to interpolate certain prices when no quoted market exists. The financial effect of using such modeling techniques is not material to PSEGs or Powers financial statements. Cash Flow Hedges Power uses forward sale and purchase contracts, swaps, futures and firm transmission right contracts to hedge: forecasted energy sales from its generation stations and the related load obligations and the price of fuel to meet its fuel purchase requirements. Energy Holdings uses forward sale and purchase contracts and swaps to hedge: forecasted energy sales from its Texas generation stations and the price of fuel for one of the Texas generation facilities. These derivative transactions are designated and effective as cash flow hedges under SFAS 133. As of June 30, 2009 and December 31, 2008, the fair value and the impact on Accumulated Other Comprehensive Income (Loss) associated with these hedges was as follows: As of June 30, As of December 31, 2009 2008 Power Millions Fair Value of Cash Flow Hedges $ 438 $ 331 * Impact on Accumulated Other Comprehensive Income (Loss) (after tax) $ 311 $ 176 Energy Holdings Fair Value of Cash Flow Hedges $ - $ 3 Impact on Accumulated Other Comprehensive Income (Loss) (after tax) $ 3 $ 2 * Powers fair value of cash flow hedges of $331 million at December 31, 2008 shown in the table above was corrected from $320 million disclosed in our 2008 Form 10-K. The expiration date of the longest-dated cash flow hedge at Power is in 2011. Powers after-tax unrealized gains on the

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Jun. 30, 2009 USD / shares
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 9. Fair Value Measurements Effective January 1, 2008, PSEG, Power and PSEG adopted SFAS No. 157, Fair Value Measurements (SFAS 157), except for non-financial assets and liabilities as described in FSP FAS 157-2. PSEG, Power and PSEG adopted SFAS 157 for non-financial assets and liabilities on January 1, 2009. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and establishes a fair value hierarchy that distinguishes between assumptions based on market data obtained from independent sources and those based on an entitys own assumptions. The hierarchy prioritizes the inputs to fair value measurement into three levels: Level 1measurements utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that PSEG, Power and PSEG have the ability to access. These consist primarily of listed equity securities, exchange traded derivatives and certain U.S. government treasury securities. Level 2measurements include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and other observable inputs such as interest rates and yield curves that are observable at commonly quoted intervals. These consist primarily of non-exchange traded derivatives such as forward contracts or options and most fixed income securities. Level 3measurements use unobservable inputs for assets or liabilities, based on the best information available and might include an entitys own data and assumptions. In some valuations, the inputs used may fall into different levels of the hierarchy. In these cases, the financial instruments level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. These consist mainly of various financial transmission rights, other longer term capacity and transportation contracts and certain commingled securities. In addition to establishing a measurement framework, SFAS 157 nullifies the guidance of EITF 02-3, Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities, which did not allow an entity to recognize an unrealized gain or loss at the inception of a derivative instrument unless the fair value of that instrument was obtained from a quoted market price in an active market or was otherwise evidenced by comparison to other observable current market transactions or based on a valuation technique incorporating observable market data. The following tables present information about PSEGs, Powers, and PSEGs respective assets and (liabilities) measured at fair value on a recurring basis as of June 30, 2009 and December 31, 2008, including the fair value measurements and the levels o

Other Income and Deductions

Other Income and Deductions
	3 Months Ended Jun. 30, 2009 USD / shares
Other Income and Deductions [Abstract]
Other Income and Deductions	Note 10. Other Income and Deductions Other Income Power PSEG Other (A) Consolidated Total Millions Three Months Ended June 30, 2009 NDT Fund Gains $ 73 $ - $ - $ 73 NDT Interest, Dividend and Other Income 12 - - 12 Other Interest and Dividend Income 1 1 1 3 Other - 3 - 3 Total Other Income $ 86 $ 4 $ 1 $ 91 Three Months Ended June 30, 2008 NDT Fund Gains $ 76 $ - $ - $ 76 NDT Interest, Dividend and Other Income 14 - - 14 Other Interest and Dividend Income 2 2 1 5 Other 1 - 1 2 Total Other Income $ 93 $ 2 $ 2 $ 97 Six Months Ended June 30, 2009 NDT Fund Gains $ 127 $ - $ - $ 127 NDT Interest, Dividend and Other Income 25 - - 25 Other Interest and Dividend Income 4 1 - 5 Other - 4 1 5 Total Other Income $ 156 $ 5 $ 1 $ 162 Six Months Ended June 30, 2008 NDT Fund Gains $ 147 $ - $ - $ 147 NDT Interest, Dividend and Other Income 26 - - 26 Other Interest and Dividend Income 4 4 2 10 Other 2 3 2 7 Total Other Income $ 179 $ 7 $ 4 $ 190 Other Deductions Power PSEG Other (A) Consolidated Total Millions Three Months Ended June 30, 2009 NDT Fund Losses and Expenses $ 43 $ - $ - $ 43 Other 1 1 (1) 1 Total Other Deductions $ 44 $ 1 $ (1) $ 44 Three Months Ended June 30, 2008 NDT Fund Losses and Expenses $ 54 $ - $ - $ 54 Other 1 - 1 2 Total Other Deductions $ 55 $ - $ 1 $ 56 Six Months Ended June 30, 2009 NDT Fund Losses and Expenses $ 89 $ - $ - $ 89 Other 5 2 3 10 Total Other Deductions $ 94 $ 2 $ 3 $ 99 Six Months Ended June 30, 2008 NDT Fund Losses and Expenses $ 108 $ - $ - $ 108 Other - 1 4 5 Total Other Deductions $ 108 $ 1 $ 4 $ 113 (A) Other primarily consists of activity at PSEG (as parent company), Energy Holdings, Services and intercompany eliminations.

Income Taxes

Income Taxes
	3 Months Ended Jun. 30, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	Note 11. Income Taxes PSEGs effective tax rate for the quarter ended June 30, 2009 was 43.6% as compared to 41.0% for the quarter ended June 30, 2008, excluding the tax effect of a $490 million, after tax, charge taken in the second quarter of 2008 related to leveraged lease transactions. The increase in the effective tax rate was due primarily to the sale of leveraged lease assets in 2009. This was offset by tax benefits from reductions of reserves for uncertain tax positions in 2009. PSEGs effective tax rate for the six months ended June 30, 2009 was 41.9% as compared to 37.6% for the six months ended June 30, 2008, excluding the tax effect of a $490 million, after tax, charge taken in the second quarter of 2008 related to leveraged lease transactions. The increase in the effective tax rate was due primarily to the sale of leveraged lease assets in 2009 and the absence of tax benefits, accrued in 2008, applicable to an IRS refund claim. This was offset by tax benefits from reductions of reserves for uncertain tax positions in 2009 and benefits of a manufacturing deduction under the American Jobs Creation Act of 2004. Powers effective tax rate for the quarter ended June 30, 2009 was 39.1% as compared to 40.7% for the quarter ended June 30, 2008. The decrease in the effective tax rate was due primarily to tax benefits from reductions of reserves for uncertain tax positions and increased benefits of a manufacturing deduction under the American Jobs Creation Act of 2004 offset by higher earnings in the NDT Fund. Powers effective tax rate for the six months ended June 30, 2009 was 39.2% as compared to 40.6% for the six months ended June 30, 2008. The decrease in the effective tax rate was due primarily to tax benefits from reductions of reserves for uncertain tax positions and increased benefits of a manufacturing deduction under the American Jobs Creation Act of 2004. PSEGs effective tax rate for the quarter ended June 30, 2009 was 39.7% as compared to 35.0% for the quarter ended June 30, 2008. The increase in the effective tax rate was due primarily to the absence of tax benefits, accrued in 2008, applicable to an IRS refund claim. PSEGs effective tax rate for the six months ended June 30, 2009 was 40.4% as compared to 33.0% for the six months ended June 30, 2008. The increase in the effective tax rate was due primarily to the absence of tax benefits, accrued in 2008, applicable to an IRS refund claim. PSEG and PSEG have $1.155 billion and $28 million, respectively of unrecognized tax benefits as of June 30, 2009. On December 17, 2007, September 15, 2008 and June 26, 2009 PSEG made tax deposits with the IRS in the amount of $100 million, $80 million and $140 million, respectively, to defray interest costs associated with disputed tax assessments associated with certain lease investments (see Note 6. Commitments and Contingent Liabilities). The $320 million of deposits are fully refundable and are recorded as a reduction to the Long-Term Accrued Taxes in PSEGs Consolidated Balance Sheets, but are not reflected in the $1.155 billion amount shown above. PSEG and PSEG are no longer subject to examination for

Comprehensive Income

Comprehensive Income (Loss), Net of Tax
	3 Months Ended Jun. 30, 2009 USD / shares
Comprehensive Income (Loss), Net of Tax [Abstract]
Comprehensive Income (Loss), Net of Tax	Note 12. Comprehensive Income (Loss), Net of Tax Power (A) PSEG Other (B) Consolidated Total Millions Three Months Ended June 30, 2009: Net Income $ 257 $ 44 $ 9 $ 310 Other Comprehensive Income (Loss) 36 1 (6) 31 Comprehensive Income $ 293 $ 45 $ 3 $ 341 Three Months Ended June 30, 2008: Net Income $ 240 $ 52 $ (442) $ (150) Other Comprehensive Income (Loss) (388) - (72) (460) Comprehensive Income $ (148) $ 52 $ (514) $ (610) Six Months Ended June 30, 2009: Net Income $ 575 $ 168 $ 11 $ 754 Other Comprehensive Income (Loss) 168 1 8 177 Comprehensive Income $ 743 $ 169 $ 19 $ 931 Six Months Ended June 30, 2008: Net Income $ 515 $ 189 $ (406) $ 298 Other Comprehensive Income (Loss) (660) - (20) (680) Comprehensive Income $ (145) $ 189 $ (426) $ (382) (A) Changes at Power primarily relate to changes in SFAS 133 unrealized gains and losses on derivative contracts that qualify for hedge accounting in 2009 and 2008, as detailed below. (B) Other consists of activity at PSEG (as parent company), Energy Holdings, Services and intercompany eliminations. Accumulated Other Comprehensive Income (Loss) Balance as of Balance as of December 31, 2008 Power PSEG Other June 30, 2009 Millions Six Months Ended June 30, 2009: Derivative Contracts $ 172 $ 134 $ - $ 5 $ 311 Pension and OPEB Plans (371) 10 - 2 (359) NDT Funds (A) 18 22 - - 40 Other 4 2 1 1 8 $ (177) $ 168 $ 1 $ 8 $ - (A) Includes reclassification of $12 million of non-credit losses, net-of-tax, from Retained Earnings to Accumulated Other Comprehensive Income (Loss) recorded upon adoption of FSP FAS 115-2 and FAS 124-2 effective April 1, 2009. See Note 2. Recent Accounting Standards for additional information. Balance as of Balance as of December 31, 2007 Power PSEG Other June 30, 2008 Six Months Ended June 30, 2008: Millions Derivative Contracts $ (259) $(619) $ - $ - $ (878) Pension and OPEB Plans (167) 1 - - (166) Currency Translation Adjustment 107 - - (19) 88 NDT Funds 97 (42) - - 55 Other 6 - - (1) 5 $ (216) $(660) $ - $(20) $ (896)

Earnings Per Share

Earnings Per Share (EPS)
	3 Months Ended Jun. 30, 2009 USD / shares
Earnings Per Share (EPS) [Abstract]
Earnings Per Share (EPS)	Note 13. Earnings Per Share (EPS) PSEG Diluted EPS is calculated by dividing Net Income by the weighted average number of shares of common stock outstanding, including shares issuable upon exercise of stock options outstanding or vesting of restricted stock awards granted under our stock compensation plans and upon payment of performance units or restricted stock units. The following table shows the effect of these stock options, restricted stock awards, performance units and restricted stock units on the weighted average number of shares outstanding used in calculating diluted EPS: Three Months Ended June 30, Six Months Ended June 30, 2009 2008 2009 2008 Basic Diluted Basic Diluted Basic Diluted Basic Diluted EPS Numerator: Earnings (Millions) Continuing Operations $ 311 $ 311 $ (166) $ (166) $ 755 $ 755 $ 269 $ 269 Discontinued Operations - - 16 16 - - 29 29 Net Income (Loss) $ 311 $ 311 $ (150) $ (150) $ 755 $ 755 $ 298 $ 298 EPS Denominator (Thousands): Weighted Average Common Shares Outstanding 505,990 505,990 508,491 508,491 505,988 505,988 508,491 508,491 Effect of Stock Options - 186 - 457 - 189 - 477 Effect of Stock Performance Share Units - 677 - 517 - 575 - 501 Effect of Restricted Stock - 44 - 22 - 40 - 14 Effect of Restricted Stock Units - 39 - - - 20 - - Total Shares 505,990 506,936 508,491 509,487 505,988 506,812 508,491 509,483 EPS: Continuing Operations $ 0.61 $ 0.61 $ (0.32) $ (0.32) $ 1.49 $ 1.49 $ 0.53 $ 0.53 Discontinued Operations - - 0.03 0.03 - - 0.06 0.06 Net Income (Loss) $ 0.61 $ 0.61 $ (0.29) $ (0.29) $ 1.49 $ 1.49 $ 0.59 $ 0.59 Dividend payments on common stock for the quarters ended June 30, 2009 and 2008 were $0.3325 and $0.3225 per share, respectively, and totaled $168 million and $164 million respectively. Dividend payments on common stock for the six months ended June 30, 2009 and 2008 were $0.665 and $0.645 per share, respectively, and totaled approximately $336 million and $328 million, respectively.

Financial Information by Busine

Financial Information by Business Segments
	3 Months Ended Jun. 30, 2009 USD / shares
Financial Information by Business Segments [Abstract]
Financial Information by Business Segments	Note 14. Financial Information by Business Segments Energy Power PSEG Holdings Other (A) Consolidated Millions Three Months Ended June 30, 2009: Total Operating Revenues $ 1,301 $ 1,643 $ 158 $ (541) $ 2,561 Net Income (Loss) 257 44 10 - 311 Preferred Securities Dividends - (1) - 1 - Segment Earnings (Loss) 257 43 10 1 311 Gross Additions to Long-Lived Assets 218 185 10 1 414 Three Months Ended June 30, 2008: Total Operating Revenues $ 1,623 $ 1,858 $ (240) $ (691) $ 2,550 Income (Loss) From Continuing Operations 240 52 (453) (5) (166) Income from Discontinued Operations, net of tax - - 16 - 16 Net Income (Loss) 240 52 (437) (5) (150) Preferred Securities Dividends - (1) - 1 - Segment Earnings (Loss) 240 51 (437) (4) (150) Gross Additions to Long-Lived Assets 210 200 2 4 416 Six Months Ended June 30, 2009: Total Operating Revenues $ 3,675 $ 4,378 $ 293 $ (1,864) $ 6,482 Net Income (Loss) 575 168 17 (5) 755 Preferred Securities Dividends - (2) - 2 - Segment Earnings (Loss) 575 166 17 (3) 755 Gross Additions to Long-Lived Assets 425 379 13 (1) 816 Six Months Ended June 30, 2008: Total Operating Revenues $ 3,998 $ 4,476 $ (109) $ (2,023) $ 6,342 Income (Loss) From Continuing Operations 515 189 (424) (11) 269 Income from Discontinued Operations, net of tax - - 29 - 29 Net Income (Loss) 515 189 (395) (11) 298 Preferred Securities Dividends - (2) - 2 - Segment Earnings (Loss) 515 187 (395) (9) 298 Gross Additions to Long-Lived Assets 384 345 4 6 739 As of June 30, 2009: Total Assets $ 9,406 $ 16,441 $ 3,729 $ (816) $ 28,760 Investments in Equity Method Subsidiaries $ 42 $ - $ 173 $ - $ 215 As of December 31, 2008: Total Assets $ 9,459 $ 16,406 $ 4,256 $ (1,072) $ 29,049 Investments in Equity Method Subsidiaries $ 35 $ - $ 180 $ - $ 215 (A) Other activiti

Related-Party Transactions

Related-Party Transactions
	3 Months Ended Jun. 30, 2009 USD / shares
Related-Party Transactions [Abstract]
Related-Party Transactions	Note 15. Related-Party Transactions The following discussion relates to intercompany transactions, which are eliminated during the PSEG consolidation process in accordance with GAAP. Power The financials statements for Power include transactions with related parties presented as follows: Three Months Ended June 30, Six Months Ended June 30, Related Party Transactions 2009 2008 2009 2008 Millions Revenue from Affiliates: Billings to PSEG through BGSS (A) $ 213 $ 345 $ 1,183 $ 1,396 Billings to PSEG through BGS (A) 319 335 663 607 Total Revenue from Affiliates $ 532 $ 680 $ 1,846 $ 2,003 Expense Billings from Affiliates: Administrative Billings from Services (B) $ (37) $ (42) $ (77) $ (82) Total Expense Billings from Affiliates $ (37) $ (42) $ (77) $ (82) As of As of Related Party Balances June 30, 2009 December 31, 2008 Millions Receivables from PSEG Related to Gas Supply Hedges for BGSS (A) $ 294 $ 319 Receivables from PSEG through BGS and BGSS Contracts (A) 164 475 Administrative Billings Payable to Services (B) (21) (26) Tax Sharing Receivable from (Payable to) PSEG (C) 42 (36) Current Unrecognized Tax Receivable from PSEG (C) 4 - Amounts Receivable from Energy Holdings 17 - Amounts PSEG Paid on Power's Behalf (1) - Accounts ReceivableAffiliated Companies, net $ 499 $ 732 Short-Term Loan to Affiliate (Demand Note Receivable from PSEG) (D) $ 142 $ - Short-Term Loan from Affiliate (Demand Note Payable to PSEG) (D) $ - $ (3) Working Capital Advances to Services (E) $ 17 $ 17 Long-Term Accrued Taxes Payable (C) $ (4) $ (16) PSEG The financials statements for PSEG include transactions with related parties presented as follows: Three Months Ended June 30, Six Months Ended June 30, Related Party Transactions 2009 2008 2009 2008 Millions Expense Billings from Affiliates: Billings from Power through BGSS (A) $ (213) $ (345) $ (1,183) $ (1,396) Billings from Power through BGS (A) (319) (335) (663) (607) Administrative Billings from Services (B) (63) (71) (129) (133) Total Expense Billings from Affiliates $ (595) $ (751) $ (1,975) $ (2,136) As of As of Related Party Balances June 30, 2009 December 31, 2008 Millions Payable to Power Related to Gas Supply Hedges for BGSS (A) $ (294) $ (319) Payable to Power through BGS and BGSS Contracts (A) (164) (475)