Public Service Enterprise (PEG) 10-K 25 Feb 10 2009 FY Annual report Financial data

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Millions, except Share data in Thousands	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
OPERATING REVENUES	$12,406	$13,322	$12,677
OPERATING EXPENSES
Energy Costs	5,711	7,295	6,512
Operation and Maintenance	2,603	2,486	2,406
Depreciation and Amortization	838	792	774
Taxes Other Than Income Taxes	133	136	139
Total Operating Expenses	9,285	10,709	9,831
OPERATING INCOME	3,121	2,613	2,846
Income from Equity Method Investments	39	37	115
Gain (Loss) on Disposal and (Impairment) on Equity Method Investments	(22)	(27)	137
Other Income	247	436	279
Other Deductions	(161)	(336)	(188)
Other-Than-Temporary Impairments	(61)	(220)	(73)
Interest Expense	(527)	(594)	(727)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	2,636	1,909	2,389
Income Tax Expense	(1,044)	(926)	(1,064)
INCOME FROM CONTINUING OPERATIONS	1,592	983	1,325
Income (Loss) from Discontinued Operations, including Gain (Loss) on Disposal, net of tax expense of $171 and $157 for the years ended 2008 and 2007, respectively	0	205	10
NET INCOME	$1,592	$1,188	$1,335
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (THOUSANDS):
BASIC	505,986	507,693	507,560
DILUTED	507,064	508,427	508,813
BASIC
INCOME FROM CONTINUING OPERATIONS	3.15	1.94	2.61
NET INCOME	3.15	2.34	2.63
DILUTED
INCOME FROM CONTINUING OPERATIONS	3.14	1.93	2.6
NET INCOME	3.14	2.34	2.62
DIVIDENDS PAID PER SHARE OF COMMON STOCK	1.33	1.29	1.17

1_Statement Of Income Alternati

Statement Of Income Alternative (Parenthetical) (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Income (Loss) from Discontinued Operations, tax expense	$0	$171	$157

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
CURRENT ASSETS
Cash and Cash Equivalents	$350	$321
Accounts Receivable, net of allowances of $79 and $66 in 2009 and 2008, respectively	1,229	1,398
Unbilled Revenues	411	454
Fuel	806	938
Materials and Supplies, net	361	317
Prepayments	161	150
Restricted Funds	2	118
Derivative Contracts	243	237
Other	83	66
Total Current Assets	3,646	3,999
PROPERTY, PLANT AND EQUIPMENT	22,069	20,818
Less: Accumulated Depreciation and Amortization	(6,629)	(6,385)
Net Property, Plant and Equipment	15,440	14,433
NONCURRENT ASSETS
Regulatory Assets	5,769	6,352
Long-Term Investments	2,032	2,695
Nuclear Decommissioning Trust (NDT) Funds	1,199	970
Other Special Funds	149	133
Goodwill	16	16
Other Intangibles	123	53
Derivative Contracts	123	160
Other	233	238
Total Noncurrent Assets	9,644	10,617
TOTAL ASSETS	28,730	29,049
CURRENT LIABILITIES
Long-Term Debt Due Within One Year	521	1,033
Commercial Paper and Loans	530	19
Accounts Payable	1,081	1,227
Derivative Contracts	201	356
Accrued Interest	102	99
Accrued Taxes	90	8
Clean Energy Program	166	142
Obligation to Return Cash Collateral	95	102
Other	428	424
Total Current Liabilities	3,214	3,410
NONCURRENT LIABILITIES
Deferred Income Taxes and Investment Tax Credits (ITC)	4,139	3,865
Regulatory Liabilities	404	355
Asset Retirement Obligations	439	576
Other Postretirement Benefit (OPEB) Costs	1,095	975
Accrued Pension Costs	1,094	1,196
Clean Energy Program	400	532
Environmental Costs	704	743
Derivative Contracts	40	164
Long-Term Accrued Taxes	538	1,241
Other	140	125
Total Noncurrent Liabilities	8,993	9,772
LONG-TERM DEBT
Long-Term Debt	6,481	6,621
Securitization Debt	1,145	1,342
Project Level, Non-Recourse Debt	19	42
Total Long-Term Debt	7,645	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	4,788	4,756
Treasury Stock, at cost, 2009-27,567,030 shares; 2008-27,538,762 shares	(588)	(581)
Retained Earnings	4,704	3,773
Accumulated Other Comprehensive Loss	(116)	(177)
Total Common Stockholders' Equity	8,788	7,771
Noncontrolling Interest	10	11
Total Stockholders' Equity	8,798	7,782
Total Capitalization	16,523	15,867
TOTAL LIABILITIES AND CAPITALIZATION	$28,730	$29,049

2_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Millions, except Share data	Dec. 31, 2009	Dec. 31, 2008
Accounts Receivable, allowances	$79	$66
Common Stock, no par	$0	$0
Common Stock, authorized	1,000,000,000	1,000,000,000
Common Stock, issued	533,556,660	533,556,660
Treasury Stock, shares	27,567,030	27,538,762

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$1,592	$1,188	$1,335
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
Gain on Disposal of Discontinued Operations	0	(335)	(120)
Depreciation and Amortization	838	793	802
Amortization of Nuclear Fuel	121	101	95
Provision for Deferred Income Taxes (Other than Leases) and ITC	326	71	241
Non-Cash Employee Benefit Plan Costs	347	167	185
Lease Transaction Reserves, net of tax	(29)	490	0
Leveraged Lease Income, Adjusted for Rents Received and Deferred Taxes	(678)	51	70
(Gain) Loss on Disposal and Impairment on Equity Method Investments	22	27	(137)
Gain on Sale of Investments	(167)	(11)	(20)
Undistributed Earnings from Affiliates	(28)	(40)	(10)
Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives	25	(39)	22
Under Recovery of Electric Energy Costs (BGS and NTC) and Gas Costs	(32)	(43)	(71)
Over (Under) Recovery of Societal Benefits Charge (SBC)	4	(75)	(53)
Cost of Removal	(54)	(44)	(37)
Net Realized (Gains) Losses and (Income) Expense from NDT Funds	(50)	115	(48)
Net Change in Certain Current Assets and Liabilities	221	74	(198)
Employee Benefit Plan Funding and Related Payments	(446)	(139)	(96)
Other	(157)	(6)	(39)
Net Cash Provided By Operating Activities	1,855	2,345	1,921
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to Property, Plant and Equipment	(1,794)	(1,771)	(1,348)
Settlement for Spent Nuclear Fuel Claim	47	0	0
Proceeds from Sale of Discontinued Operations	0	925	600
Proceeds from Sale of Property, Plant and Equipment	2	9	55
Proceeds from the Sale of Capital Leases and Investments	880	77	703
Proceeds from NDT Funds Sales	1,769	3,060	1,672
Investment in NDT Funds	(1,798)	(3,093)	(1,703)
Restricted Funds	116	(11)	(41)
NDT Funds Interest and Dividends	39	48	48
Solar Loan Investments	(43)	0	0
Other	(10)	(19)	23
Net Cash Provided By (Used In) Investing Activities	(792)	(775)	9
CASH FLOWS FROM FINANCING ACTIVITIES
Net Change in Commercial Paper and Loans	511	(46)	(317)
Issuance of Long-Term Debt	459	1,075	434
Issuance of Non-Recourse Debt	0	0	163
Issuance of Common Stock	0	0	83
Purchase of Common Treasury Stock	0	(92)	0
Redemptions of Long-Term Debt	(820)	(1,582)	(551)
Repayment of Non-Recourse Debt	(286)	(56)	(57)
Redemption of Securitization Debt	(187)	(179)	(170)
Net Premium Paid on Early Extinguishment of Debt	0	(79)	0
Premium Paid on Debt Exchange	(36)	0	0
Cash Dividends Paid on Common Stock	(673)	(655)	(594)
Redemption of Debt Underlying Trust Securities	0	0	(660)
Other	(2)	(15)	19
Net Cash Used In Financing Activities	(1,034)	(1,629)	(1,650)
Net Increase (Decrease) in Cash and Cash Equivalents	29	(59)	280
Cash and Cash Equivalents at Beginning of Period	321	380	100
Cash and Cash Equivalents at End of Period	350	321	380
Supplemental Disclosure of Cash Flow Information:
Income Taxes Paid	1,364	952	678
Interest Paid, Net of Amounts Capitalized	$500	$557	$715

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions	Common Stock	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Loss	Noncontrolling Interest	Total
Beginning Balance at Dec. 31, 2006	$4,661	($516)	$2,710	($108)	$6	$6,753
Beginning Balance (in shares) at Dec. 31, 2006	532	(27)
Net Income			1,335			1,335
Other Comprehensive Income (Loss), net of tax:
Currency Translation Adjustment, net of tax				(3)		(3)
Available-for-Sale Securities, net of tax				(10)		(10)
Change in Fair Value of Derivative Instruments, net of tax				(290)		(290)
Reclassification Adjustments for Net Amounts included in Net Income, net of tax				144		144
Sale of Investments				1		1
Pension/OPEB adjustment, net of tax				50		50
Adoption of Accounting Guidance for Leases, net of tax			(67)			(67)
Adoption of Accounting Guidance for Uncertain Tax Positions, net of tax			(123)			(123)
Cash Dividends on Common Stock			(594)			(594)
Issuance of Common Stock (in shares)	2	2
Issuance of Common Stock	35	48				83
Other	36	(10)				26
Ending Balance (in shares) at Dec. 31, 2007	534	(25)
Ending Balance at Dec. 31, 2007	4,732	(478)	3,261	(216)	6	7,305
Net Income			1,188			1,188
Other Comprehensive Income (Loss), net of tax:
Currency Translation Adjustment, net of tax				(106)		(106)
Available-for-Sale Securities, net of tax				(79)		(79)
Change in Fair Value of Derivative Instruments, net of tax				253		253
Reclassification Adjustments for Net Amounts included in Net Income, net of tax				176		176
Pension/OPEB adjustment, net of tax				(205)		(205)
Adoption of Accounting Guidance for Fair Value Measurements, net of tax			(21)			(21)
Cash Dividends on Common Stock			(655)			(655)
Repurchase of Common Stock (in shares)		(3)
Repurchase of Common Stock		(92)				(92)
Investment by Noncontrolling Interest					5	5
Other	24	(11)				13
Ending Balance (in shares) at Dec. 31, 2008	534	(28)
Ending Balance at Dec. 31, 2008	4,756	(581)	3,773	(177)	11	7,782
Net Income			1,592			1,592
Other Comprehensive Income (Loss), net of tax:
Available-for-Sale Securities, net of tax				94		94
Change in Fair Value of Derivative Instruments, net of tax				356		356
Reclassification Adjustments for Net Amounts included in Net Income, net of tax				(348)		(348)
Pension/OPEB adjustment, net of tax				(29)		(29)
Adoption of Accounting Guidance for Non-Credit Losses, net of tax			12	(12)		0
Cash Dividends on Common Stock			(673)			(673)
Noncontrolling Interest in Losses of Consolidated Entity					(1)	(1)
Other	32	(7)				25
Ending Balance (in shares) at Dec. 31, 2009	534	(28)
Ending Balance at Dec. 31, 2009	$4,788	($588)	$4,704	($116)	$10	$8,798

Organization, Basis of Presenta

Organization, Basis of Presentation and Summary of Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Organization, Basis of Presentation and Summary of Significant Accounting Policies	Note1. Organization, Basis of Presentation and Summary of Significant Accounting Policies Public Service Enterprise Group Incorporated, (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: PSEG Power LLC (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 functions 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. Public Service Electric and Gas Company (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 FERC. Pursuant to applicable BPU orders, PSEG is also investing in the development of solar generation projects and energy efficiency programs within its service territory. 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 FERC and the states in which they operate. Energy Holdings is also investing in solar generation projects and exploring opportunities for other investments in renewable generation. 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 Annual Reports on Form 10-K and in accordance with accounting guidance generally accepted in the United States (GAAP). On October1, 2009, Energy Holdings distributed the outstanding equity of PSEG Texas, LP (PSEG Texas) to PSEG. PSEG in turn contributed it to Power as an additional equity investment. Power had been responsible for the operation of the Texas facilities under a management agreement since January 2008. This transaction was accounted for as a non-cash transfer of equity interest between entities under common control. Power recognized the Texas assets and liabilities at their carrying amounts (historical cost) at the date of transfer. In addition, as required under current guidance, Power accounted for the transaction to include the earnings and assets and liabilities related to PSEG Texas as if the transfer occurred at the beginning of the year, and prior years have been retrospectively adjusted to furnish comparative information. For the year ended December

Variable Interest Entities

Variable Interest Entities
	12 Months Ended Dec. 31, 2009 USD / shares
Variable Interest Entities	Note 2. Variable Interest Entities PSEG has determined that Transition Funding and Transition Funding II are variable interest entities (VIEs) for which it is the primary beneficiary. Accordingly, PSEG consolidates the VIEs assets and liabilities within its Consolidated Balances, of which the most significant amounts are listed in the table below: AsofDecember31, 2009 2008 Millions Regulatory Assets $ 1,367 $ 1,546 Long-Term Debt, including Current Portion $ 1,343 $ 1,530 Maximum Exposure to Loss* $ 16 $ 15 * PSEGs maximum exposure to loss is equal to its equity investment in these VIEs. The risk of actual loss to PSEG is considered remote. Transition Funding and Transition Funding II were formed solely for the purpose of issuing transition bonds and purchasing bond transitional property of PSEG, which is pledged as collateral to the trustee. PSEG acts as the servicer for these entities to collect securitization transition charges authorized by the BPU. These funds are remitted to Transition Funding and Transition Funding II and are used for interest and principal payments on the transition bonds and related costs. Energy Holdings has variable interests through its investments in two projects for renewable energy where it is also the primary beneficiary. As a result, Energy Holdings consolidates the assets and liabilities of these projects in the amounts disclosed below: AsofDecember31, 2009 2008 Millions Property, Plant and Equipment $ 13 $ 9 Other Assets $ 17 $ 1 Notes Payable $ 4 $ 2 Other Liabilities $ 7 $ Maximum Exposure to Loss* $ 21 $ 6 * Energy Holdings maximum exposure to loss is equal to its equity investment in these VIEs. The risk of actual loss to Energy Holdings is considered remote. Energy Holdings is also committed to fund any operating losses on one of the partnerships up to $11 million through 2011.

Recent Accounting Standards

Recent Accounting Standards
	12 Months Ended Dec. 31, 2009 USD / shares
Recent Accounting Standards	Note 3. Recent Accounting Standards New Standards Adopted during 2009 During 2009, we have adopted several new accounting standards. The new standards adopted did not have a material impact on our financial statements. The following is a summary of the requirements and impacts of the new standards. Noncontrolling Interests in Consolidated Financial Statements changes the financial reporting relationship between a parent and noncontrolling interests, requires all entities to report noncontrolling interests in subsidiaries as a separate component of equity in the consolidated financial statements, requires net income attributable to the noncontrolling interests 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 revised the balance sheet presentations as required by the standard. The income statement impact was immaterial. Disclosures about Derivative Instruments and Hedging Activities 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. The required disclosures are included in Note 15. Financial Risk Management Activities. Subsequent Events 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 evaluated subsequent events through February24, 2010, which is the date the financial statements were issued. Recognition and Presentation of Other-Than-Temporary Impairments revises recognition guidance in determining whether a debt security is other-than-temporarily impaired. A debt security is considered other-than-temporarily impaired in either of the following circumstances if the fair value is less than the amortized cost: an entity has an intent to sell the security, or it is more-likely-than-not that an entity will be required to sell the security prior to the recovery of its amortized cost basis, or an entity does not expect to recover the entire amortized cost basis of the security. provides further guidance to determine the amount of impairment to be recorded in earnings (credit-related loss) and/or Accumulated Other Comprehensive Income (Loss) (non-credit related loss). We recorded a cumulative-effect adjustment to reclassify $12 million of non-credit losses, net-of-tax, from Retained Earnings to Accumulated Other Comprehensive Income (Loss) on April1, 2009 at the initial adoption date. The expanded disclosures required by the standard are included

Discontinued Operations, Dispos

Discontinued Operations, Dispositions and Impairments
	12 Months Ended Dec. 31, 2009 USD / shares
Discontinued Operations, Dispositions and Impairments	Note4. Discontinued Operations, Dispositions and Impairments Discontinued Operations Power In May 2007, Power completed the sale of Lawrenceburg Energy Center (Lawrenceburg), a 1,096-megawatt (MW), gas-fired combined cycle electric generating plant located in Lawrenceburg, Indiana, to AEP Generating Company. The sale price was $325 million. Lawrenceburgs operating results for the year ended December31, 2007, which were reclassified to Discontinued Operations, are summarized below: YearEnded December31, 2007 Millions Operating Revenues $ Loss Before Income Taxes $ (13 ) Net Loss $ (8 ) Energy Holdings Bioenergie In November 2008, Energy Holdings sold its 85% ownership interest in Bioenergie for $40 million. Bioenergie owns three biomass generation plants in Italy. The sale resulted in an after-tax loss of $15 million recorded in 2008 in Discontinued Operations. Net cash proceeds, after realization of tax benefits, were approximately $70 million. Bioenergies operating results for the years ended December31, 2008 and 2007, which were reclassified to Discontinued Operations, are summarized below: YearsEndedDecember31, 2008 2007 Millions Operating Revenues $ 40 $ 22 Income (Loss) Before Income Taxes $ 5 $ (10 ) Net Income (Loss) $ 3 $ (6 ) SAESA Group In July 2008, Energy Holdings sold its investment in the SAESA Group, which consists of certain transmission, distribution and generation companies in Chile, for a total purchase price 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, which is included in Discontinued Operations. Net cash proceeds, after Chilean and U.S. taxes of $269 million, were $612 million. SAESA Groups operating results for the years ended December31, 2008 and 2007, which were reclassified to Discontinued Operations, are summarized below: YearsEndedDecember31, 2008 2007 Millions Operating Revenues $ 379 $ 442 Income Before Income Taxes $ 36 $ 55 Net Income (Loss) $ 30 $ (34 ) Electroandes S.A. (Electroandes) In October 2007, Energy Holdings sold its investment in Electroandes, a hydro-electric generation and transmission company in Peru, for a total purchase price of $390 million, including the assumption of approximately $108 million of debt. Net proceeds, after tax of $72 million and including dividends received prior to closing, were $220 million. Energy Holdings recorded an after-tax gain of $48 million recorded in the fourth quarter of 2007 which is included in Discontinued Operations. Energy Holdings recorded a $19 million income tax expense in the second quarter of 2007, as the income generated by Electroandes was no longer expected to be indefinitely reinvested. Electroandes operating results for the year ended December31, 2007, which were reclassified to Discontinued Operations, are summarized below: YearEnded December31,

Property, Plant and Equipment a

Property, Plant and Equipment and Jointly-Owned Facilities
	12 Months Ended Dec. 31, 2009 USD / shares
Property, Plant and Equipment and Jointly-Owned Facilities	Note 5. Property, Plant and Equipment and Jointly-Owned Facilities Information related to Property, Plant and Equipment as of December31, 2009 and 2008 is detailed below: Power PSEG Other PSEG Consolidated Millions December 31, 2009 Generation: Fossil Production $ 5,910 $ $ $ 5,910 Nuclear Production 833 833 Nuclear Fuel in Service 631 631 Other Production-Solar 13 13 26 Construction Work in Progress 1,124 1,124 Total Generation 8,498 13 13 8,524 Transmission and Distribution: Electric Transmission 1,891 1,891 Electric Distribution 5,804 5,804 Gas Transmission 95 95 Gas Distribution 4,422 4,422 Construction Work in Progress 108 108 Plant Held for Future Use 7 7 Other 421 421 Total Transmission and Distribution 12,748 12,748 Other 81 172 544 797 Total $ 8,579 $ 12,933 $ 557 $ 22,069 Power PSEG Other PSEG Consolidated Millions December 31, 2008 Generation: Fossil Production $ 5,701 $ $ $ 5,701 Nuclear Production 988 988 Nuclear Fuel in Service 549 549 Construction Work in Progress 776 776 Total Generation 8,014 8,014 Transmission and Distribution: Electric Transmission 1,655 1,655 Electric Distribution 5,567 5,567 Gas Transmission 88 88 Gas Distribution 4,228 4,228 Construction Work in Progress 176 176 Plant Held for Future Use 9 9 Other 471 471 Total Transmission and Distribution 12,194 12,194 Other 69 64 477 610 Total $ 8,083 $ 12,258 $ 477 $ 20,818 Power and PSEG have ownership interests in and are responsible for providing their respective shares of the necessary financing for the following jointly-owned facilities. All amounts reflect the share of Powers and PSEGs jointly-owned projects and the corresponding direct expenses are included in the Consolidated Statements of Operations as operating expenses. December31, 2009 Ownership Interest Plant Accumulated Depreciation Millions Power: Coal Generating Conemaugh 22.50 % $ 242 $ 117 Keystone 22.84 % $ 373 $ 96 Nuclear Generating

Regulatory Assets and Liabiliti

Regulatory Assets and Liabilities
	12 Months Ended Dec. 31, 2009 USD / shares
Regulatory Assets and Liabilities	Note 6. Regulatory Assets and Liabilities As discussed in Note 1. Organization, Basis of Presentation and Summary of Significant Accounting Policies, PSEG prepares its financial statements in accordance with GAAP accounting for regulated utilities. A regulated utility is required to defer the recognition of costs (a regulatory asset) or the recognition of obligations (a regulatory liability) if it is probable that, through the rate-making process, there will be a corresponding increase or decrease in future rates. Accordingly, PSEG has deferred certain costs, which will be amortized over various future periods. These costs are deferred based on rate orders issued by the BPU or FERC or PSEGs experience with prior rate cases. With the exception of the Customer Care System regulatory asset, which is expected to be decided in its currently pending rate case, all of PSEGs regulatory assets and liabilities at December31, 2009 and 2008 are supported by written rate orders, either explicitly or implicitly through the BPUs treatment of various cost items. Regulatory assets are subject to prudence reviews and can be disallowed in the future by regulatory authorities. PSEG believes that all of its regulatory assets are probable of recovery. To the extent that collection of any regulatory assets or payments of regulatory liabilities is no longer probable, the amounts would be charged or credited to income. PSEG had the following regulatory assets and liabilities: AsofDecember31, 2009 2008 Recovery/Refund Period Millions Regulatory Assets Stranded Costs To Be Recovered $ 2,176 $ 2,479 ThroughDecember2015(1)(2) Manufactured Gas Plant (MGP) Remediation Costs 694 709 Various(2) Pension and Other Postretirement 1,053 988 Various Deferred Income Taxes 409 421 Various Societal Benefits Charges (SBC) 188 209 Various(2) New Jersey Clean Energy Program 566 674 To be determined(2) Gas Contract Mark-to-Market 112 384 Various(1) OPEB Costs 58 77 Through December 2012(2) Unamortized Loss on Reacquired Debt and Debt Expense 106 112 Over remaining debt life(1) Conditional Asset Retirement Obligation 64 92 Various Repair Allowance Taxes 37 45 Through August 2013(1)(2) Uncertain Tax Positions 55 39 Various Regulatory Restructuring Costs 18 23 ThroughAugust2013(1)(2) Gas Margin Adjustment Clause 45 34 To be determined(2) Customer Care System 38 14 To be determined Plant and Regulatory Study Costs 11 13 Through December 2021(2) Incurred But Not Reported Claim Reserve 16 12 Various Asbestos Abatement 8 8 Through 2020(2) Non-Utility Generation Charge (NGC) 86 To be determined Other 29 19 Various Total Regulatory Assets $ 5,769 $ 6,352 AsofDecember31, 2009 2008 Recovery/Refund Period Millions Regulatory Liabilities

Long-Term Investments

Long-Term Investments
	12 Months Ended Dec. 31, 2009 USD / shares
Long-Term Investments	Note 7. Long-Term Investments Long-Term Investments as of December31, 2009 and 2008 included the following: AsofDecember31, 2009 2008 Power Millions Partnerships and Corporate Joint Ventures $ 36 $ 23 Other Investments 12 PSEG Life Insurance and Supplemental Benefits $ 156 $ 151 Other Investments 48 7 Energy Holdings Leveraged Leases $ 1,609 $ 2,279 Partnerships and Corporate Joint Ventures 183 202 Other Investments 21 Total Long-Term Investments $ 2,032 $ 2,695 Leveraged Leases The net investment in leveraged leases was comprised of the following: AsofDecember31, 2009 2008 Millions Lease rents receivable (net of non-recourse debt) $ 1,587 $ 2,749 Estimated residual value of leased assets 934 971 2,521 3,720 Unearned and deferred income (912 ) (1,441 ) Total investments in leveraged leases 1,609 2,279 Deferred tax liabilities (1,313 ) (1,994 ) Net investment in leveraged leases $ 296 $ 285 The pre-tax income and income tax effects related to investments in leveraged leases were as follows: Years Ended December31, 2009 2008 2007 Millions Pre-tax income (loss) of leveraged leases $ 23 $ (408 ) $ 114 Income tax expense (benefit) on pre-tax income of leveraged leases $ 23 $ (98 ) $ 36 Amortization of investment tax credits of leveraged leases $ $ $ (1 ) Investments in and Advances to Affiliates Investments in net assets of affiliated companies accounted for under the equity method of accounting by Energy Holdings amounted to $176 million and $180 million as of December31, 2009 and 2008, respectively. The decrease of $4 million between the December31, 2009 and 2008 equity investment balances was due primarily to additional undistributed earnings from the investments in 2009 being more than offset by the further impairment of our equity investment in Turboven and the partial sale of the equity investment in GWF Energy in 2009 (see Note 4. Discontinued Operations, Dispositions and Impairments). During the three years ended December31, 2009, 2008 and 2007, the amount of dividends from these investments was $10 million, $25 million and $108 million, respectively. Energy Holdings share of income and cash flow distribution percentages ranged from 40% to 50% as of December31, 2009. Power and Energy Holdings had the following equity method investments as of December31, 2009: Name Location % Owned Power Keystone PA 23% Conemaugh PA 23% Energy Holdings Kalaeloa HI 50% GWF CA 50% Hanford, L. P. CA 50% GWF Energy CA 50% Bridgewater NH 40% Turboven Venezuela 50% Energy Holdings also has investments in certain companies in w

Available-for-Sale Securities

Available-for-Sale Securities
	12 Months Ended Dec. 31, 2009 USD / shares
Available-for-Sale Securities	Note 8. 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 is required to file periodic reports with the NRC demonstrating that the NDT Funds meet the formula-based minimum NRC funding requirements. Power maintains the external master nuclear decommissioning trust which contains two separate funds: a qualified fund and a non-qualified fund. Section468A of the Internal Revenue Code limits the amount of money that can be contributed into a qualified fund. Powers share of decommissioning costs 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 December31, 2009 was approximately $204 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 Power. Power classifies investments in the NDT Funds as available-for-sale. The following tables show the fair values and gross unrealized gains and losses for the securities held in the NDT Funds: As of December31, 2009 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated FairValue Millions Equity Securities $ 475 $ 180 $ (5 ) $ 650 Debt Securities Government Obligations 296 4 (3 ) 297 Other Debt Securities 209 10 (3 ) 216 Total Debt Securities 505 14 (6 ) 513 Other Securities 37 (1 ) 36 Total Available-for-Sale Securities $ 1,017 $ 194 $ (12 ) $ 1,199 As of December31, 2008 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated FairValue 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 loss position for less than 12 months and greater than 12 months: AsofDecember31,2009 Less Than 12 Months AsofDecember31,2009 Greater Than 12Months AsofDecember31,2008 Less Than 12 Months* Fair Value Gross Unrealized Losses

Goodwill and Other Intangibles

Goodwill and Other Intangibles
	12 Months Ended Dec. 31, 2009 USD / shares
Goodwill and Other Intangibles	Note 9. Goodwill and Other Intangibles As of each of December31, 2009 and 2008, Power had goodwill of $16 million related to the Bethlehem Energy Center. Power conducted an annual review for goodwill impairment as of October 31, 2009 and concluded that goodwill was not impaired. No events occurred subsequent to that date which would require a further review of goodwill for impairment. Energy Holdings pro rata share of goodwill relating to its equity method investment in Kalaeloa was $25million as of December31, 2009 and 2008. In addition to goodwill, as of December31, 2009 and 2008, Power had intangible assets of $114 million and $43 million, respectively, related to emissions allowances and renewable energy credits. Emissions expense including costs for CO2 emissions, which is recorded as emissions occur, for the years ended December31, 2009, 2008 and 2007 amounted to $34 million, $1 million and $2 million, respectively. Expense related to renewable energy requirements, which is recorded as load is served under contracts requiring energy from renewable sources, for the years ended December31, 2009, 2008 and 2007 amounted to $46 million, $25million and $16 million, respectively. Also as of December31, 2009 and 2008, Energy Holdings joint venture that develops compressed air energy storage had intangible assets of $9 million.

Asset Retirement Obligations

Asset Retirement Obligations (AROs)
	12 Months Ended Dec. 31, 2009 USD / shares
Asset Retirement Obligations (AROs)	Note 10. Asset Retirement Obligations (AROs) PSEG, Power and PSEG have recorded various Asset Retirement Obligations (AROs) which represent legal obligations to remove or dispose of an asset or some component of an asset at retirement. Powers ARO liability primarily relates to the decommissioning of its nuclear power plants, an independent external trust that is intended to fund decommissioning of its nuclear facilities upon termination of operation. For additional information, see Note 8. Available-for-Sale Securities. Power also identified conditional AROs primarily related to Powers fossil generation units, including liabilities for removal of asbestos, stored hazardous liquid material and underground storage tanks from industrial power sites, restoration of leased office space to rentable condition upon lease termination, permits and authorizations, restoration of an area occupied by a reservoir when the reservoir is no longer needed, and demolition of certain plants, and the restoration of the sites at which they reside when the plants are no longer in service. On December31, 2009, Power recorded a decrease to its ARO liability and asset of $134 million, primarily related to revisions in assumptions regarding the decommissioning of its nuclear facilities and estimated decommissioning cash flows. These revisions include updates to the discount rate and inflation rate used in estimating future decommissioning cash flows, as well as new information and legal precedent, including Powers settlement with the DOE during 2009 regarding the reimbursement for costs associated with storage and disposal of spent nuclear fuel. See Note 12. Commitments and Contingent Liabilities for additional information. PSEG has a conditional ARO for legal obligations related to the removal of asbestos and underground storage tanks at certain industrial establishments, removal of wood poles, leases and licenses, and the requirement to seal natural gas pipelines at all sources of gas when the pipelines are no longer in service. PSEG did not record an ARO for PSEGs protected steel and poly-based natural gas transmission lines, as management believes that these categories of transmission lines have an indeterminable life. PSEG recognized a decrease in its ARO liability and asset of $41 million, primarily relating to a revision in the inflation rate assumption used to calculate the estimated future undiscounted cash flows. The impact of the revisions to the various assumptions, as well as other changes to the ARO liabilities for PSEG, Power and PSEG during 2009, are presented in the following table: PSEG Power PSEG Other Millions ARO Liability as of January1, 2009 $ 576 $ 334 $ 240 $ 2 Liabilities Settled (4 ) (1 ) (3 ) Liabilities Incurred 1 1 Accretion Expense 27 27 Accretion Expense Deferred and Recovered in Rate Base (A) 14 14 Revisions to Present Value of Estimated Cash Flows (175 )

Pension, Other Postretirement B

Pension, Other Postretirement Benefits (OPEB) and Savings Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Pension, Other Postretirement Benefits (OPEB) and Savings Plans	Note 11. Pension, Other Postretirement Benefits (OPEB) and Savings Plans 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. Eligible employees of Power, PSEG, Energy Holdings and Services participate in non-contributory pension and OPEB plans sponsored by PSEG and administered by Services. In addition, represented and nonrepresented employees are eligible for participation in PSEGs two defined contribution plans described below. PSEG, Power and PSEG are required to record the under or over funded positions of their defined benefit pension and OPEB plans on their respective balance sheets. Such funding positions were first measured as of December31, 2006 in compliance with revised accounting guidance effective for periods ending after December15, 2006 and in accordance with customary practice of each PSEG company. For under funded plans, the liability is equal to the difference between the plans benefit obligation and the fair value of plan assets. For defined benefit pension plans, the benefit obligation is the projected benefit obligation. For OPEB plans, the benefit obligation is the accumulated postretirement benefit obligation. In addition, accounting guidance requires that the total unrecognized costs for defined benefit pension and OPEB plans be recorded as an after-tax charge to Accumulated Other Comprehensive Loss, a separate component of Stockholders Equity. However, for PSEG, because the amortization of the unrecognized costs is being collected from customers, the accumulated unrecognized costs are recorded as a Regulatory Asset. The unrecognized costs represent actuarial gains or losses, prior service costs and transition obligations arising from the adoption of the revised accounting guidance for pensions and OPEB, which had not been expensed. For Power, the charge to Accumulated OCI is amortized and recorded as net periodic pension cost in the Consolidated Statement of Operations. For PSEG, the Regulatory Asset is amortized and recorded as net periodic pension cost in the Consolidated Statement of Operations. The following table provides a roll-forward of the changes in the benefit obligation and the fair value of plan assets during each of the two years in the periods ended December31, 2009 and 2008. It also provides the funded status of the plans and the amounts recognized and amounts not recognized in the Consolidated Balance Sheets at the end of both years. Pension Benefits Other Benefits 2009 2008 2009 2008 Millions Change in Benefit Obligation: Benefit Obligation at Beginning of Year $ 3,569 $ 3,601 $ 1,104 $ 1,166 Service Cost 76 78 13 15 Interest Cost 235 227 73 72 Actuarial (Gain) Loss 381 (122 ) 129 (91 ) Gross Benefits Paid (216 ) (215 ) (69 ) (64 ) Medicare Subsidy Receipts 5 6 Plan Amendments

Commitments and Contingent Liab

Commitments and Contingent Liabilities
	12 Months Ended Dec. 31, 2009 USD / shares
Commitments and Contingent Liabilities	Note 12. Commitments and Contingent Liabilities Guaranteed Obligations Powers activities primarily involve the purchase and sale of energy and related products under transportation, physical, financial and forward contracts at fixed and variable prices. These transactions are with numerous counterparties and brokers that may require cash, cash related instruments or guarantees. Power has unconditionally guaranteed payments to counterparties by its subsidiaries in commodity-related transactions in order to support current exposure, interest and other costs on sums due and payable in the ordinary course of business, and 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 a 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). Power believes the probability of this is highly unlikely. 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 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 December31, 2009 and 2008 are as follows: AsofDecember31, 2009 2008 Millions Face value of outstanding guarantees $ 1,783 $ 1,856 Exposure under current guarantees $ 403 $ 585 Letters of Credit Margin Posted $ 122 $ 201 Letters of Credit Margin Received $ 123 $ 250 Cash Deposited and Received Counterparty Cash Margin Deposited $ $ 3 Counterparty Cash Margin Received (90 ) (81 ) Net Broker Balance Received (31 ) (74 ) Power nets the fair value of cash collateral receivables and payables with the corresponding net energy contract balances. See Note 15. Financial Risk Management Activities for further discussion. The remaining balance of net cash (received) deposited is primarily includ

Schedule of Consolidated Debt

Schedule of Consolidated Debt
	12 Months Ended Dec. 31, 2009 USD / shares
Schedule of Consolidated Debt	Note 13. Schedule of Consolidated Debt Long-Term Debt AsofDecember31, Maturity 2009 2008 Millions PSEG (Parent) Senior Note6.89% 2009 $ $ 49 Senior Note4.66% 2009 200 Principal Amount Outstanding 249 Fair Value of Swaps(A) (3 ) Unamortized Discount Related to Debt Exchange(B) (35 ) Amounts Due Within One Year (249 ) Total Long-Term Debt of PSEG (Parent) $ (38 ) $ AsofDecember31, Maturity 2009 2008 Power Millions Senior Notes: 3.75% 2009 $ $ 250 7.75% 2011 800 800 6.95% 2012 600 600 5.00% 2014 250 250 5.50% 2015 300 300 5.32% 2016 303 8.63% 2031 500 500 Total Senior Notes 2,753 2,700 Pollution Control Notes: 5.00% 2012 66 66 5.50% 2020 14 14 5.85% 2027 19 19 5.75% 2031 25 25 5.75% 2037 40 40 4.00% 2042 44 Total Pollution Control Notes 164 208 Medium Term Notes (MTNs): 6.00% 2013 48 6.50% 2014 161 Total MTNs 209 Nonrecourse Project Debt - Texas - Floating Rate(C)(D) 2009 280 Principal Amount Outstanding 3,126 3,188 Amounts Due Within One Year (530 ) Net Unamortized Discount (5 ) (5 ) Total Long-Term Debt of Power $ 3,121 $ 2,653 AsofDecember31, PSEG Maturity 2009 2008 First and Refunding Mortgage Bonds(E): Millions Libor + .875% 2010 300 300 6.75% 2016 171 171 9.25% 2021 134 134 8.00% 2037 7 7 5.00% 2037 8 8 Total First and Refunding Mortgage Bonds 620 620 Pollution Control Bonds(E): 6.45% 2019 5 5.20% 2025 23 23 Floating Rate(F) 2028-2033 100 5.45% 2032 50 50 6.40% 2032 100 100 Total Pollution Control Bonds 173 278 Medium-Term Notes(E): 8.16% 2009 16 8.10% 2009 44 5.13% 2012 300 300 5.00% 2013 150 150 5.38% 2013 300 300 6.33% 2013 275 275 5.00% 2014 250 250 5.30% 2018 400 400 7.04% 2020 9 9 7.18% 2023 5 7.15% 2023 34 5.25% 2035 250 250 5.70% 2036 250 250 5.80% 2037 350 350 5.38% 2039 250 Total MTNs 2,784 2,633 Principal Amount Outstanding 3,577

Schedule of Consolidated Capita

Schedule of Consolidated Capital Stock and Other Securities
	12 Months Ended Dec. 31, 2009 USD / shares
Schedule of Consolidated Capital Stock and Other Securities	Note 14. Schedule of Consolidated Capital Stock and Other Securities Outstanding Shares Redemption Price Per Share Asof December31, Book Value 2009 2008 Millions PSEG Common Stock (no par value)(A) Authorized 1,000,000,000 shares; (outstanding as of December31, 2008, 506,017,898 shares) 505,989,630 $ 4,200 $ 4,175 PSEG Cumulative Preferred Stock (B) without Mandatory Redemption (C) $100 par value series 4.08% 146,221 $ 103.00 $ 15 $ 15 4.18% 116,958 $ 103.00 12 12 4.30% 149,478 $ 102.75 15 15 5.05% 104,002 $ 103.00 10 10 5.28% 117,864 $ 103.00 12 12 6.92% 160,711 $ 101.73 16 16 Total Preferred Stock without Mandatory Redemption 795,234 $ 80 $ 80 (A) PSEG did not issue any new shares under the Dividend Reinvestment and Stock Purchase Plan (DRASPP) and the Employee Stock Purchase Plan (ESPP) in 2009 or 2008. Total authorized and unissued shares of common stock available for issuance through PSEGs DRASPP, ESPP and various employee benefit plans amounted to 7.0million shares as of December31, 2009. (B) As of December31, 2009, there was an aggregate of 6.7million shares of $100 par value and 10million shares of $25 par value Cumulative Preferred Stock, which were authorized and unissued and which, upon issuance, may or may not provide for mandatory sinking fund redemption. If dividends upon any shares of Preferred Stock are in arrears for four consecutive quarters, holders receive voting rights for the election of a majority of PSEGs Board of Directors. Such voting rights continue until all accumulated and unpaid dividends thereon have been paid, whereupon all such voting rights cease. There are no arrearages in cumulative preferred stock and no voting rights for preferred shares currently exist. No preferred stock agreement contains any liquidation preferences in excess of par values or any deemed liquidation events. (C) As of each of December31, 2009 and 2008, the annual dividend requirement and the embedded dividend rate for PSEGs Preferred Stock without Mandatory Redemption was $4 million and 5.03%, respectively. Fair Value of Preferred Securities The estimated fair value of PSEGs Cumulative Preferred Stock was $66 million as of December31, 2009 and 2008. The estimated fair value was determined using market quotations. On February16, 2010, PSEG irrevocably called for redemption on March22, 2010 all of its outstanding preferred stock. PSEG deposited the redemption price and the accrued unpaid dividends to the redemption date, into Bank of New York Mellon shareholder services, terminating all rights of holders of the preferred stock except the right to receive the redemption price upon surrender of shares. As a result all of the outstanding equity in PSEG is ownedby PSEG.

Financial Risk Management Activ

Financial Risk Management Activities
	12 Months Ended Dec. 31, 2009 USD / shares
Financial Risk Management Activities	Note 15. 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 uses 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 or normal purchases normal sales treatment are marked to market 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. These derivative transactions are designated and effective as cash flow hedges. As of December31, 2009 and 2008, the fair value and the impact on Accumulated Other Comprehensive Income (Loss) associated with these hedges was as follows: December31, 2009 2008 Millions Fair Value of Cash Flow Hedges $ 286 $ 334 Impact on Accumulated Other Comprehensive Income (Loss) (after tax) $ 184 $ 178 The expiration date of the longest-dated cash flow hedge at Power is in 2011. Powers after-tax unrealized gains on these derivatives that are expected to be reclassified to earnings during the 12 months ending December31, 2010 and December31, 2011 are $99 million and $85 million, respectively. Ineffectiveness associated with these hedges was less than $1 million at December31, 2009. Trading Derivatives In general, the main purpose of Powers wholesale marketing operation is to optimize the value of the output of the generating facilities via various products and services available in the markets we serve. Power does engage in some trading of electricity and energy-related products where such transactions are not associated with the output or fuel purchase requirements of our faci

Fair Value Measurements

Fair Value Measurements
	12 Months Ended Dec. 31, 2009 USD / shares
Fair Value Measurements	Note 16. Fair Value Measurements PSEG, Power and PSEG adopted accounting guidance for Fair Value Measurements for financial assets and liabilities effective January1, 2008, and for nonrecurring fair value measurements of non-financial assets and liabilities effective January1, 2009. The fair value measurements guidance 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. The fair value measurement guidance 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. 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, the fair value measurement guidance nullified the prior guidance 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. Under prior guidance, Power had a deferred inception loss of $34 million, pre-tax, as of December31, 2007 related to a five-year capacity contract at its generation facilities, which was being amortized at $11 million per year through 2010. In accordance with the provisions of Fair Value Measurements, Power recorded a cumulative effect adjustment of $21 million after-tax to January1, 2008 Retained Earnings in its Consolidated Balance Sheet associated

Stock Based Compensation

Stock Based Compensation
	12 Months Ended Dec. 31, 2009 USD / shares
Stock Based Compensation	Note17. Stock Based Compensation As approved at the Annual Meeting of Stockholders in 2004, PSEGs 2004 Long-Term Incentive Plan (LTIP) replaced the prior 1989 LTIP and 2001 LTIP. The 2004 LTIP is a broad-based equity compensation program that provides for grants of various long-term incentive compensation awards, such as stock options, stock appreciation rights, performance share units, restricted stock, restricted stock units, cash awards or any combination thereof. The types of long-term incentive awards that have been granted and remain outstanding under the LTIPs are non-qualified options to purchase shares of PSEGs common stock, restricted stock awards, restricted stock unit awards and performance unit awards. The 2004 LTIP currently provides for the issuance of equity awards with respect to approximately 26million shares of common stock. As of December31, 2009, there were approximately 18million shares available for future awards under the 2004 LTIP. Stock Options Under the 2004 LTIP, non-qualified options to acquire shares of PSEG common stock may be granted to officers and other key employees selected by the Organization and Compensation Committee of PSEGs Board of Directors, the plans administrative committee (Committee). Option awards are granted with an exercise price equal to the market price of PSEGs common stock at the grant date. The options generally vest based on three to five years of continuous service. Vesting schedules may be accelerated upon the occurrence of certain events, such as a change-in-control (unless substituted with an equity award of equal value), retirement, death or disability. Options are exercisable over a period of time designated by the Committee (but not prior to one year or longer than 10 years from the date of grant) and are subject to such other terms and conditions as the Committee determines. Payment by option holders upon exercise of an option may be made in cash or, with the consent of the Committee, by delivering previously acquired shares of PSEG common stock. Restricted Stock Under the 2004 LTIP, PSEG has granted restricted stock awards to officers and other key employees. These shares are subject to risk of forfeiture until vested by continued employment. Restricted stock generally vests annually over three or four years, but is considered outstanding at the time of grant, as the recipients are entitled to dividends and voting rights. Vesting may be accelerated upon certain events, such as change-in-control (unless substituted with an equity award of equal value), retirement, death or disability. Restricted Stock Units Under the 2004 LTIP, PSEG has granted restricted stock unit awards to officers and certain other key employees. These awards, which are bookkeeping entries only, are subject to risk of forfeiture until vested by continued employment. Until vested, the units are credited with dividend equivalents proportionate to the dividends paid on PSEG common stock. The restricted stock units generally vest annually over four years and distributions are made in shares of common stock. Vesting may be accelerated upon certain events, such as change-in-control (unless

Other Income and Deductions

Other Income and Deductions
	12 Months Ended Dec. 31, 2009 USD / shares
Other Income and Deductions	Note 18. Other Income and Deductions Other Income Power PSEG Other(A) Consolidated Total Millions For the Year Ended December31, 2009: NDT Fund Gains $ 183 $ $ $ 183 NDT Interest, Dividend and Other Income 44 44 Other Interest and Dividend Income 6 1 2 9 Other 1 7 3 11 Total Other Income $ 234 $ 8 $ 5 $ 247 For the Year Ended December31, 2008: NDT Fund Gains $ 354 $ $ $ 354 NDT Interest, Dividend and Other Income 53 53 Other Interest and Dividend Income 7 5 6 18 Other 2 7 2 11 Total Other Income $ 416 $ 12 $ 8 $ 436 For the Year Ended December31, 2007: NDT Fund Gains $ 164 $ $ $ 164 NDT Interest, Dividend and Other Income 50 50 Other Interest and Dividend Income 24 10 2 36 Other 4 6 19 29 Total Other Income $ 242 $ 16 $ 21 $ 279 Other Deductions Power PSEG Other(A) Consolidated Total Millions For the Year Ended December31, 2009: NDT Fund Losses and Expenses $ 117 $ $ $ 117 Other 18 3 23 44 Total Other Deductions $ 135 $ 3 $ 23 $ 161 For the Year Ended December31, 2008: NDT Fund Losses and Expenses $ 302 $ $ $ 302 Other 14 4 16 34 Total Other Deductions $ 316 $ 4 $ 16 $ 336 For the Year Ended December31, 2007: NDT Fund Losses and Expenses $ 94 $ $ $ 94 Loss on Early Retirement of Debt 47 47 Other 3 4 40 47 Total Other Deductions $ 97 $ 4 $ 87 $ 188 (A) Other primarily consists of activity at PSEG (parent company), Energy Holdings and Services and intercompany eliminations.

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes	Note 19. Income Taxes A reconciliation of reported income tax expense for PSEG with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows: 2009 2008 2007 Millions Net Income $ 1,592 $ 1,188 $ 1,335 Income from Discontinued Operations, including Gain on Disposal, net of tax benefit 205 10 Income from Continuing Operations 1,592 983 1,325 Preferred Dividends (4 ) (4 ) (4 ) Income from Continuing Operations, excluding Preferred Dividends $ 1,596 $ 987 $ 1,329 Income Taxes: Operating Income: Current Expense: Federal $ 562 $ 1,430 $ 705 State 257 123 156 Total Current 819 1,553 861 Deferred Expense: Federal 178 (768 ) 150 State 44 144 57 Total Deferred 222 (624 ) 207 Foreign Investment Tax Credit 3 (3 ) (4 ) Total Income Taxes $ 1,044 $ 926 $ 1,064 Pre-Tax Income $ 2,640 $ 1,913 $ 2,393 Tax Computed at Statutory Rate @ 35% $ 924 $ 669 $ 837 Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments: State Income Taxes (net of federal income tax) 201 169 144 Foreign Operations 82 Uncertain Tax Positions (73 ) 135 29 Other (8 ) (47 ) (28 ) Sub-Total 120 257 227 Total Income Tax Provision $ 1,044 $ 926 $ 1,064 Effective Income Tax Rate 39.5% 48.4% 44.5% The following is an analysis of deferred income taxes for PSEG: 2009 2008 Deferred Income Taxes Millions Assets: Current (net) $ 52 $ 52 Noncurrent: Unrecovered Investment Tax Credit 14 14 OCI 28 44 Cumulative Effect of a Change in Accounting Principle 11 11 New Jersey Corporate Business Tax 52 81 OPEB 269 242 Cost of Removal 51 51 Nuclear Decommissioning 17 Related to Foreign Operations 6 Development Fees 1 8 Contractual Liabilities Environmental Costs 35 35 MTC 17 17 Related to Uncertain Tax Positions 507 1,017 Other 15 11 Total Noncurrent 1,000 1,554 Total Assets $ 1,052 $ 1,606 Liabilities: Current (net) $ $ Noncurrent: Plant-Related Items 2,133

Earnings Per Share

Earnings Per Share (EPS) and Dividends
	12 Months Ended Dec. 31, 2009 USD / shares
Earnings Per Share (EPS) and Dividends	Note 20. Earnings Per Share (EPS) and Dividends EPS 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 PSEGs stock compensation plans and upon payment of performance share units or restricted stock units. The following table shows the effect of these stock options, restricted stock awards, performance share units and restricted stock units on the weighted average number of shares outstanding used in calculating diluted EPS: For the Years Ended December31, 2009 2008 2007 Basic Diluted Basic Diluted Basic Diluted EPS Numerator: Earnings (Millions) Continuing Operations $ 1,592 $ 1,592 $ 983 $ 983 $ 1,325 $ 1,325 Discontinued Operations 205 205 10 10 Net Income $ 1,592 $ 1,592 $ 1,188 $ 1,188 $ 1,335 $ 1,335 EPS Denominator (Thousands): Weighted Average Common Shares Outstanding 505,986 505,986 507,693 507,693 507,560 507,560 Effect of Stock Options 183 341 678 Effect of Stock Performance Share Units 786 322 560 Effect of Restricted Stock 12 Effect of Restricted Stock Units 109 71 3 Total Shares 505,986 507,064 507,693 508,427 507,560 508,813 EPS: Continuing Operations $ 3.15 $ 3.14 $ 1.94 $ 1.93 $ 2.61 $ 2.60 Discontinued Operations 0.40 0.41 0.02 0.02 Net Income $ 3.15 $ 3.14 $ 2.34 $ 2.34 $ 2.63 $ 2.62 There were approximately 1.6million stock options excluded from the weighted average common shares used for diluted EPS due to their antidilutive effect for the year ended December31, 2009. No other stock options had an antidilutive effect for the years ended December31, 2009, 2008 or 2007. Dividends Dividend payments on common stock for the year ended December31, 2009 were $1.33 per share and totaled $673 million. Dividend payments on common stock for the year ended December31, 2008 were $1.29 per share and totaled $655 million. On February16, 2010, PSEGs Board of Directors approved a $0.01 increase in its quarterly common stock dividend, from $0.3325 to $0.3425 per share for the first quarter of 2010.

Financial Information by Busine

Financial Information by Business Segment
	12 Months Ended Dec. 31, 2009 USD / shares
Financial Information by Business Segment	Note 21. Financial Information by Business Segment Basis of Organization PSEGs operating segments are Power, PSEG and Energy Holdings. The operating segments were determined by management in accordance with GAAPDisclosures about Segments of an Enterprise and Related Information. These segments were determined based on how management measures performance based on segment Net Income, as illustrated in the following table, and how it allocates resources to each business. On October1, 2009, the Texas generation facilities were transferred from Energy Holdings to Power. As a result, the earnings and assets and liabilities related to the Texas facilities are presented as if the transfer occurred at the beginning of the year, and prior years have been retrospectively adjusted to furnish comparative information. See Note 1. Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information. Power Power earns revenues by selling energy, capacity and ancillary services on a wholesale basis under contract to power marketers and to load serving entities and by bidding energy, capacity and ancillary services into the markets for these products. Power also enters into trading contracts for energy, capacity, financial transmission rights, gas, emission allowances and other energy-related contracts to optimize the value of its portfolio of generating assets and its electric and gas supply obligations. PSEG PSEG earns revenues from its tariffs, under which it provides electric transmission and electric and gas distribution services to residential, commercial and industrial customers in New Jersey. The rates charged for electric transmission are regulated by FERC while the rates charged for electric and gas distribution are regulated by the BPU. Revenues are also earned from several other activities such as sundry sales, the appliance service business, wholesale transmission services and other miscellaneous services. Energy Holdings Energy Holdings earns revenues from its portfolio of passive investments primarily consisting of leveraged leases. The lease investments are domestic and international; however, revenues from all international investments are denominated in U.S. dollars. Gains and losses on sales of these investments are typically recognized in revenues. Energy Holdings also has equity method generation projects. Earnings from these projects are presented below Operating Income. Other Other activities include amounts applicable to PSEG (parent corporation), Services and intercompany eliminations, primarily relating to intercompany transactions between Power and PSEG. No gains or losses are recorded on any intercompany transactions; rather, all intercompany transactions are at cost or, in the case of the BGS and BGSS contracts between Power and PSEG, at rates prescribed by the BPU. For a further discussion of the intercompany transactions between Power and PSEG, see Note 22. Related-Party Transactions. The net losses primarily relate to financing and certain administrative and general cost. Power PSEG Energy Holdings Other

Related-Party Transactions

Related-Party Transactions
	12 Months Ended Dec. 31, 2009 USD / shares
Related-Party Transactions	Note 22. Related-Party Transactions The majority of 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: FortheYearsEndedDecember31, Related Party Transactions 2009 2008 2007 Millions Revenue from Affiliates: Billings to PSEG through BGS (A) $ 1,322 $ 1,453 $ 1,163 Billings to PSEG through BGSS (A) 1,838 2,316 2,208 Total Revenue from Affiliates $ 3,160 $ 3,769 $ 3,371 Expense Billings from Affiliates: Administrative Billings from Services (B) $ (153 ) $ (166 ) $ (144 ) Total Expense Billings from Affiliates $ (153 ) $ (166 ) $ (144 ) As of December31, Related Party Balances 2009 2008 Millions Receivables from PSEG through BGS and BGSS Contracts(A) $ 404 $ 475 Receivables from PSEG Related to Gas Supply Hedges for BGSS(A) 120 319 Payable to Services(B) (27 ) (26 ) Tax Sharing Payable to PSEG(C) (28 ) (38 ) Current Unrecognized Tax Receivable from PSEG(C) 3 Payable to PSEG (13 ) Accounts ReceivableAffiliated Companies, net $ 459 $ 730 Short-Term Loan (from) to Affiliate (Demand Note (from) to PSEG)(D) $ (194 ) $ 55 Working Capital Advances to Services(E) $ 17 $ 17 Long-Term Accrued Taxes Receivable (Payable)(C) $ 39 $ (29 ) PSEG The financials statements for PSEG include transactions with related parties presented as follows: FortheYearsEndedDecember31, Related Party Transactions 2009 2008 2007 Millions Expense Billings from affiliates: Billings from Power through BGS(A) $ (1,322 ) $ (1,453 ) $ (1,163 ) Billings from Power through BGSS(A) (1,838 ) (2,316 ) (2,208 ) Administrative Billings from Services(B) (240 ) (264 ) (238 ) Total Expense Billings from Affiliates $ (3,400 ) $ (4,033 ) $ (3,609 ) As of December31, Related Party Transactions 2009 2008 Millions Payable to Power through BGS and BGSS Contracts(A) $ (404 ) $ (475 ) Payable to Power Related to Gas Supply Hedges for BGSS(A) (120 ) (319 ) Payable to Power for SREC liability(F) (7 ) Payable to Services(B) (42 ) (54 ) Tax Sharing Receivable from PSEG(C) 13 21 Current Unrecognized Tax Receivable from PSEG(C) 61 55 Receivable from PSEG 3

Selected Quarterly Data

Selected Quarterly Data (Unaudited)
	12 Months Ended Dec. 31, 2009 USD / shares
Selected Quarterly Data (Unaudited)	Note 23. Selected Quarterly Data (Unaudited) The information shown in the following tables, in the opinion of PSEG, Power and PSEG includes all adjustments, consisting only of normal recurring accruals, necessary to fairly present such amounts. Calendar Quarter Ended March31, June30, September30, December31, 2009 2008 2009 2008 2009 2008 2009 2008 PSEG Consolidated: Millions Operating Revenues $ 3,920 $ 3,792 $ 2,560 $ 2,550 $ 3,040 $ 3,718 $ 2,886 $ 3,262 Operating Income 927 811 637 177 924 965 633 660 Income (Loss) from Continuing Operations 444 435 311 (166 ) 488 476 349 238 Income (Loss) from Discontinued Operations, including Gain (Loss) on Disposal, net of tax 13 16 180 (4 ) Net Income (Loss) 444 448 311 (150 ) 488 656 349 234 Earnings Per Share: Basic: Income (Loss) from Continuing Operations 0.88 0.86 0.61 (0.32 ) 0.96 0.94 0.70 0.46 Net Income (Loss) 0.88 0.88 0.61 (0.29 ) 0.96 1.29 0.70 0.46 Diluted: Income (Loss) from Continuing Operations 0.88 0.85 0.61 (0.32 ) 0.96 0.94 0.69 0.46 Net Income (Loss) 0.88 0.88 0.61 (0.29 ) 0.96 1.29 0.69 0.46 Weighted Average Common Shares Outstanding: Basic 506 508 506 508 506 508 506 506 Diluted 507 510 507 509 507 508 507 508 Calendar Quarter Ended March 31, June 30, September 30, December 31, 2009 2008 2009 2008 2009 2008 2009 2008 Power: Millions Operating Revenues $ 2,464 $ 2,475 $ 1,363 $ 1,838 $ 1,564 $ 2,162 $ 1,752 $ 2,008 Operating Income $ 608 $ 516 $ 402 $ 490 $ 652 $ 703 $ 424 $ 416 Income from Continuing Operations $ 314 $ 276 $ 246 $ 268 $ 382 $ 388 $ 247 $ 183 Net Income $ 314 $ 276 $ 246 $ 268 $ 382 $ 388 $ 247 $ 183 Calendar Quarter Ended March31, June30, September30, December31, 2009 2008 2009 2008 2009 2008 2009 2008 PSEG: Millions Operating Revenues $ 2,735 $ 2,618 $ 1,643 $ 1,858 $ 1,943 $ 2,274 $ 1,922 $ 2,288 Operating Income $ 288 $ 279 $ 150 $ 159 $ 226 $ 248 $ 194 $ 223 Income from Continuing Operations $ 124 $ 137 $ 44 $ 52 $ 88 $ 98 $ 69 $ 77 Net Income $ 124 $ 137

Guarantees of Debt

Guarantees of Debt
	12 Months Ended Dec. 31, 2009 USD / shares
Guarantees of Debt	Note 24. Guarantees of Debt Powers Senior Notes are fully and unconditionally and jointly and severally guaranteed by its subsidiaries, PSEG Fossil LLC, PSEG Nuclear LLC and PSEG Energy Resources Trade LLC. The following table presents condensed financial information for the guarantor subsidiaries as well as Powers non-guarantor subsidiaries as of December31, 2009 and 2008 and for the years ended December31, 2009, 2008 and 2007. Power Guarantor Subsidiaries Other Subsidiaries Consolidating Adjustments Total Millions For the Year Ended December31, 2009: Operating Revenues $ $ 7,932 $ 494 $ (1,283 ) $ 7,143 Operating Expenses 4 5,846 491 (1,284 ) 5,057 Operating Income (Loss) (4 ) 2,086 3 1 2,086 Equity Earnings (Losses) of Subsidiaries 1,208 (20 ) (1,188 ) Other Income 57 256 2 (81 ) 234 Other Deductions (14 ) (120 ) (1 ) (135 ) Other Than Temporary Impairments (60 ) (60 ) Interest Expense (145 ) (73 ) (29 ) 80 (167 ) Income Tax Benefit (Expense) 87 (861 ) 5 (769 ) Income (Loss) on Discontinued Operations, net of Tax Benefit Net Income (Loss) $ 1,189 $ 1,208 $ (20 ) $ (1,188 ) $ 1,189 As of December31, 2009: Current Assets 3,039 5,614 560 (6,871 ) $ 2,342 Property, Plant and Equipment, net 61 4,872 1,452 6,385 Investment in Subsidiaries 4,865 1,093 (5,958 ) Noncurrent Assets 253 1,452 52 (151 ) 1,606 Total Assets $ 8,218 $ 13,031 $ 2,064 $ (12,980 ) $ 10,333 Current Liabilities $ 107 $ 7,167 $ 818 $ (6,869 ) $ 1,223 Noncurrent Liabilities 522 1,002 150 (152 ) 1,522 Long-Term Debt 3,121 3,121 Members Equity 4,468 4,862 1,096 (5,959 ) 4,467 Total Liabilities and Members Equity $ 8,218 $ 13,031 $ 2,064 $ (12,980 ) $ 10,333 For the Year Ended December31, 2009: Net Cash Provided By (Used In) Operating Activities $ 383 $ 2,520 $ 10 $ (1,255 ) $ 1,658 Net Cash Provided By (Used In) Investing Activities $ 490 $ (1,320 ) $ (50 ) $ 228 $ (652 ) Net Cash Provided By (Used In) Financing Activities $ (873 ) $ (1,202 ) $ 66 $ 1,027 $ (982 ) Power Guarantor Subsidiaries Other Subsidiaries

Schedule II-Valuation and Quali

Schedule II-Valuation and Qualifying Accounts
	12 Months Ended Dec. 31, 2009 USD / shares
Schedule II-Valuation and Qualifying Accounts	PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Schedule IIValuation and Qualifying Accounts Years Ended December31, 2009December 31, 2007 Column A ColumnB Column C Column D ColumnE Additions Description Balanceat Beginning of Period Chargedto cost and expenses Chargedto other accounts describe Deductions describe Balance at End of Period Millions 2009 Allowance for Doubtful Accounts $ 66 $ 110 $ $ 97 (A) $ 79 Materials and Supplies Valuation Reserve 5 1 1 (B) 5 Other Valuation Allowances 8 8 2008 Allowance for Doubtful Accounts $ 46 $ 89 $ $ 69 (A) $ 66 Materials and Supplies Valuation Reserve 6 1 (B) 5 Other Valuation Allowances 8 8 2007 Allowance for Doubtful Accounts $ 47 $ 64 $ $ 65 (A) $ 46 Materials and Supplies Valuation Reserve 8 2 4 (B) 6 Other Valuation Allowances 8 8 (A) Accounts Receivable/Investments written off (B) Reduced reserve to appropriate level and to remove obsolete inventory

Document Information

Document Information
	12 Months Ended Dec. 31, 2009 USD / shares
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Jan. 29, 2010	Jun. 30, 2009
Trading Symbol	PEG
Entity Registrant Name	PUBLIC SERVICE ENTERPRISE GROUP INC
Entity Central Index Key	0000788784
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		505,952,069
Entity Public Float			$16,495,708,079