Public Service Electric & Gas 8-K Regulation FD Disclosure

Exhibit 99

We have the

energy

to make things better

…

for you, for our investors

and for our stakeholders.

2

Forward Looking Statement

3

GAAP Disclaimer

PSEG presents Operating Earnings in addition to its Net Income reported in

accordance with accounting principles generally accepted in the United States

(GAAP).  Operating Earnings is a non-GAAP financial measure that differs from Net

Income because it excludes gains or losses associated with Nuclear

Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting, and other

material one-time items.  PSEG presents Operating Earnings because

management believes that it is appropriate for investors to consider results

excluding these items in addition to the results reported in accordance with GAAP. 

PSEG believes that the non-GAAP financial measure of Operating Earnings

provides a consistent and comparable measure of performance of its businesses

to help shareholders understand performance trends.  This information is

not

intended to be viewed as an alternative to GAAP information. The

last slide in

this presentation includes a list of items excluded from Income from Continuing

Operations to reconcile to Operating Earnings, with a reference to that slide

included on each of the slides where the non-GAAP information appears.

2013 Conference Agenda

Presentation

Presenter

Welcome and Introductions

Kathleen Lally

PSEG

Ralph Izzo

PSE&G

Ralph LaRossa

PSEG Energy Holdings

Randall Mehrberg

Q&A Session

Break

PSEG Power

William Levis

Power ER&T

Shahid Malik

Q&A Session

Financial Review & Outlook

Caroline Dorsa

Summary

Ralph Izzo

Q&A Session

Conference Conclusion

4

PSEG INTRODUCTION & OVERVIEW

Ralph Izzo

CHAIRMAN, PRESIDENT AND

CHIEF EXECUTIVE OFFICER

6

PSEG Strategy

Leveraging the

strength of PSEG’s

balance sheet to

invest primarily in

our stable, regulated

business in ways

that meet customer

needs and state

goals as we protect

the upside of the

merchant business

and provide growth

for our shareholders

PSEG met 2012’s challenges

with our strong platform of assets

ASSETS AND OPERATING EARNINGS ARE FOR THE YEAR ENDED 12/31/2012.

ENERGY HOLDINGS INCLUDES PARENT.

SEE PAGE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS TO RECONCILE TO

OPERATING EARNING.

Electric & Gas Delivery

and Transmission

Regional

Wholesale Energy

Renewable

Investments

PSE&G positioned

to meet NJ’s

energy policy and

economic growth

objectives with an

investment program

exceeding $10 billion

through 2017

PSEG Power’s

low-cost, base

load and load

following fleet is

geographically well

positioned and

environmentally

responsible

PSEG Energy

Holdings positioned

to pursue attractive

renewable

generation and

develop new

business

opportunities

Assets $19.2B

Operating Earnings $528M

Assets $11.0B

Operating Earnings $644M

Assets $1.5B

Operating Earnings $64M

7

8

PSEG –

2012 Highlights

2012 Earnings in-line with guidance

•

Achieved operating earnings of $2.44 per share, at the high end of guidance range of $2.25-$2.50,

including storm-related costs at PSE&G

•

PSE&G represented 43% of consolidated operating earnings with growth in transmission

Operational excellence

PSEG disciplined capital investment

•

Key

regulatory

approvals

received

for

major

transmission

projects

•

BPU

decisions

pending

on

Solar4All

Extension

and

Solar

Loan

III

•

Power

added

400

MW

of

new

peakers

in

time

to

respond

to

summer

demand

•

Holdings

added

40

MW

of

new

solar

capacity

•

Record

output

from

CCGTs,

continued

strong

production

from

Nuclear,

and

Power’s

control

of

O&M

supported

results

•

PSE&G

recognized

for

reliability:

National

ReliabilityOne

Excellence

Award,

Mid-Atlantic

Reliability

Award,

and

Award

for

Outstanding

Response

to

a

Major

Outage

Event;

as

well

as

EEI’s

Emergency

Response

Award

•

Restored

service

to

2.1

million

customers

in

a

two-week

period

of

time

in

the

aftermath

of

Superstorm

Sandy

and

the

Nor’easter

that

followed

•

Extension

of

major

labor

contracts

9

2013 Operating Earnings Guidance

$2.74

$2.44

$2.25 - 

$2.50 E

2011 Operating Earnings*

2012 Operating Earnings*

2013 Guidance

* SEE PAGE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING

OPERATIONS TO RECONCILE TO OPERATING EARNINGS.            E = ESTIMATE.

10

2013 Operating Earnings

*

*SEE

PAGE

A

FOR

ITEMS

EXCLUDED

FROM

INCOME

FROM

CONTINUING

OPERATIONS

TO

RECONCILE

TO

OPERATING

EARNINGS;

ALL

PERIODS

REFLECT

TEXAS

IN

DISCONTINUED

OPERATIONS.

E=ESTIMATE.

Investment in the

regulated business

has changed the

earnings mix

Our 2009-2013

investment focus has

brought us to a 50/50

mix for 2013

PSE&G’s 2013-2017

Energy Strong Program

and ongoing transmission

investments will support

continued growth in

PSE&G’s earnings

Percent of Operating Earnings Contribution by Subsidiary

11

PSEG Focus

Operational excellence and disciplined investment helped offset the

earnings impact of lower energy prices

2008

2012

PSEG Focus

($ millions, except as noted)

SEE PAGE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS TO

RECONCILE TO OPERATING EARNINGS. (1) PLANNED COMPOUND ANNUAL GROWTH RATE 2008-

2012.(2) ACTUAL COMPOUND ANNUAL GROWTH RATE 2008-2012.

12

SuperStorm

Sandy met by

an exceptional

response

The storm affected

PSE&G and Power

13

PSEG Capital Spending focused on growth

PSEG 2013-2015E Capital Spending*

$6.1 Billion

by Subsidiary

PSEG 2013-2015E Capital Spending*

$6.1 Billion

Growth / Environmental / Maintenance

E = ESTIMATE; CAPITAL EXCLUDES IDC AND AFUDC.

*THIS FORECAST DOES NOT REFLECT THE IMPACT OF NEW PROPOSALS RECENTLY FILED WITH

THE NJBPU.

B

14

What’s Next: PSEG’s Capital Spending expansion

opportunity directed toward growth in regulated business with

~ 25% growth in planned spending

Potential

PSEG 2013-2015E Capital Spending*

$7.6 Billion

by Subsidiary

Potential

PSEG 2013-2015E Capital Spending*

$7.6 Billion

Growth / Environmental / Maintenance

E = ESTIMATE; CAPITAL EXCLUDES IDC AND AFUDC. 

15

PSE&G’s Energy Strong Capital Program

addresses new reality

•

New $3.9 Billion Infrastructure Program filed with the NJBPU to strengthen

PSE&G’s electric and gas system focusing on hardening and resiliency

•

Plan to invest an additional $1.5 Billion in Transmission grid over the

ten-year period

•

PSE&G’s Infrastructure proposal includes:

•

Protecting 40 utility installations from severe storms ($1.7 Billion)

•

Making the electric grid smarter and easier to repair ($454 Million)

•

Adding backup distribution lines and system redundancies ($415 Million)

•

Undergrounding 20 miles of overhead distribution lines ($60 Million)

•

Modernizing the gas distribution system ($1.1 Billion)

•

Better protection for homes and businesses during severe weather

and improved

day to day system reliability

•

Proposed filing creates ~5,800 jobs and stimulates economic activity for New

Jersey businesses

16

PSEG Power value advantaged

by asset

diversity, fuel flexibility and location

Fuel Diversity*

Total MW: 13,226

Energy Produced*

Total GWh: 52,511

Energy Market Served*

Total MW: 13,226

*2012

**INCLUDES NJ UNITS THAT FUEL SWITCH TO GAS.

17

•

2.2% (forecast³)

•

$12,600

•

$5,000

4

•

$6,900

5

•

$700

5

•

1.4%

•

30.4TWh

•

$290

•

$12-$15

2015E

•

0.8% (actual²)

•

$9,000

•

$2,500

•

$5,900

•

$600

•

1.7%

•

29.8TWh

•

$240

•

$0

2012

Where we’re going

•

2.4% (planned¹)

•

$6,800

•

$866

•

$5,900

•

$0

•

1.6%

•

29.3TWh

•

$0

•

$0

•

O&M Growth per year

•

PSE&G Rate Base

Transmission

E&G Distribution

EMP

•

EFORd Rate -

CCGT

•

Nuclear Generation

•

Holdings Solar Investment

•

LIPA Earnings

PSEG Focus

($ millions, except as noted)

2008

(1)

Planned compound annual growth rate 2008-2012.

(2)

Actual compound annual growth rate 2008-2012.

(3) Two-year compound annual growth rate from 2013.

(4) Includes additional Transmission hardening.

(5) Includes proposed filings:  EE4A, SL3, S4Ae, and ES programs.

.

E = ESTIMATE.

.

18

Balance Sheet Strengthened

PSEG has reduced risk

PSEG Total Capitalization

2009

2012

Power

Power

PSE&G

PSE&G

Equity

55%

Debt

45%

Equity

59%

Debt

41%

57%

43%

55%

45%

70%

30%

51%

49%

19

Using PSEG’s balance sheet strength

to finance growth in the regulated enterprise without equity

issuance

PSEG Total Capitalization

2012

2015E*

* E = ESTIMATE; INCLUDES THE FOLLOWING PROPOSED FILINGS: EE4A, SL3, S4AE, ENERGY STRONG (ES) AND

TRANSMISSION HARDENING.

20

PSEG Annual Dividend

A long history of growth and returning cash to

shareholders

*2013 PAYOUT RATIO REFLECTS THE MIDPOINT OF 2013 OPERATING EARNINGS GUIDANCE.

**INDICATED ANNUAL RATE.

21

Value Proposition

PSEG is positioned to expand its investment in PSE&G

projects that provide reasonable, risk adjusted returns,

in ways that meet customer needs and state goals,

given strong cash flow of Power and growing cash

contribution from PSE&G.

PSEG will maintain a strong financial profile that

provides the opportunity to achieve our growth

objectives and maintains our track record of returning

cash to shareholders.

PSE&G

PRESIDENT AND CHIEF

OPERATING OFFICER

Ralph LaRossa

23

PSE&G

strategy

Building a

sustainable

platform that

balances

reliability,

customer rates

and public

policy to ensure

growth at

reasonable

returns

24

PSE&G is the largest electric and gas distribution and transmission utility

company in New Jersey

* WEATHER NORMALIZED-ESTIMATED ANNUAL GROWTH PER YEAR OVER FORECAST PERIOD.

** TRANSMISSION LOAD GROWTH CAGR UTILIZES 2007 AS BASE  YEAR.

*** SPECIFIC PROJECTS  APPROVED FOR INCENTIVE RATE TREATMENT WITH ADDITIONAL  ROE.

Electric

Gas

Customers

Growth (2008 –

2012)

2.2 Million

0.6%

1.8 Million

0.6%

Electric Sales and Gas Sold and Transported

41,641 GWh

3,397 M

Therms

Projected Annual Load Growth (2013 –

2015)

0.7%*

0.2%*

Historical Annual Peak Load Growth

Transmission (2008 –

2012)

0.4%**

Projected Annual Load Growth

Transmission (2013 –

2015)

1.4%

Sales Mix

Residential

33%

60%

Commercial

57%

36%

Industrial

10%

4%

Transmission

Electric

Gas

Approved Rate of Return

11.68% ROE***

10.3% ROE

10.3% ROE

Renewables and Energy Efficiency Approved

Programs

2009-2012

Total Program

Plan

Solar Loan

67 MW

81 MW

Solar 4 All

74 MW

80 MW

Energy Efficiency Annual Electric savings

160 GWh

200 GWh

Energy Efficiency Annual Gas savings

5M Therms

7M Therms

Electric

Territory

Gas

Territory

25

National

reliability

award winner

and recognized

for emergency

response during

Hurricane Irene

26

During

SuperStorm

Sandy

strong

winds, heavy

rainfall and storm

surges caused

significant

damage to our

infrastructure

27

PSE&G brought in more than 4,000

contractors and mutual aid workers at the height of

restoration efforts

28

PSE&G’s

response

to customer

outages

during recent

major events

Restoration response incorporated lessons learned from

Hurricane Irene

Cumulative Customers Restored

29

PSE&G’s operating earnings grew ~10%*

with increased investment, cost control and supportive rate

mechanisms

* COMPOUND ANNUAL GROWTH RATE

SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS TO RECONCILE TO OPERATING EARNINGS.

30

Growth in rate base is driven by investments with

favorable recovery mechanisms

PSE&G Rate Base

PSE&G’s

rate base

has grown ~7%

annualized

with a

focus on meeting

the State’s goals

and customers’

needs

31

Represents ~28% of rate base in 2012

Overall,

Transmission

has

delivered

on planned

spending

PSE&G’s Transmission Capital Expenditures

0

200

400

600

800

1,000

1,200

2009 2009

Plan

Actual

2010 2010

Plan

Actual

2011 2011

Plan

Actual

2012 2012

Plan

Actual

Remaining Transmission

Susquehanna

-Roseland

North East Grid

North Central Reliability

Mickelton-Gloucester

-Camden

Burlington-Camden

32

Providing

solutions

for

New Jersey’s

energy and

economic

development

goals

($ Millions)

Approval

Date

Forecast

Amount*

Spending

Thru 2012

Remaining

Spending

Renewables

Solar Loan I & II

April 2008/

November

2009

$243

$209

34

Solar 4 All

July 2009

456

437

19

Energy Efficiency

Carbon Abatement

December

2008

45

45

-

Energy Efficiency

Economic Stimulus

July 2009

161

156

5

Demand Response

July 2009

35

27

8

Energy Efficiency

Economic Stimulus

Extension

July 2011

95

14

81

Distribution

NJ Capital Infrastructure

Program 1 (CIP 1)

April 2009

702

702

-

NJ Capital Infrastructure

Program 2 (CIP 2)

July 2011

273

253

20

Total

$2,010

$1,843

$167

* THIS FORECAST DOES NOT REFLECT THE IMPACT OF NEW PROPOSALS RECENTLY FILED WITH THE NJBPU

33

Focus on controlling O&M allows us to earn

our authorized return

* EXCLUDES REGULATORY CLAUSES                 ** INCLUDES $40M IMPACT FROM SUPERSTORM SANDY IN 2012                  E = ESTIMATE

34

PSE&G’s capital program will continue to be

focused on delivering energy solutions to meet New Jersey’s

public policy

* PROPOSED FILINGS INCLUDE EE4A, SL3, S4AE, AND ENERGY STRONG (ES)                E = ESTIMATE

35

2013-2017 proposed investment plan

would grow our current capital plan by up to 50%

2013-2017E Capital Expenditures

Existing Plan

$6.9 Billion

Existing Plan and Proposed Filings

$10.6 Billion

*

*

E = ESTIMATE

36

PSE&G’s proposed investments would be

recovered through contemporaneous recovery mechanisms

E = ESTIMATE

Contemporaneous Recovery Mechanisms

Traditional Recovery Mechanisms

Energy Strong Filing (ES)

Solar/Energy Efficiency

Clauses

FERC Formula Rates

Distribution Base Rates

21%

10%

47%

22%

$10.6 Billion

2013-2017E Capital Spending by Recovery Method

37

PSE&G’s existing major transmission

investment program remains on schedule and on budget

Major Transmission Projects

Approved

ROE

Inclusion

of CWIP in

Rate Base

100%

Recovery

of Costs

Due to

Abandonment

Total

Estimated

Project

Costs

Expected

In-service

Date

Susquehanna-Roseland

12.93%

$790

June 2014 /

June 2015

Northeast Grid Reliability

11.93%

$895

June 2015

North Central Reliability

11.68%

$390

June 2014

Burlington –

Camden 230kV

11.68%

$399

June 2014

Mickleton –

Gloucester-Camden 230kV

11.68%

$435

June 2015

38

Susquehanna-Roseland consists of

constructing 150 miles of 500kV circuit (46 miles in NJ) with

two new 500kV GIS switching stations at Roseland and

Hopatcong

Project

Estimate

Up To*

Through

Year-end 2012

2013-2015E

Expected

In-service Date

$790M

$324M

$466M

June 2014 / June

2015

•

PJM RTEP project b0489

•

ROE of 12.93% (including 1.25% incentive)

•

100% CWIP in rate base during development

•

100% recovery of prudently incurred costs due to abandonment

Project Status:  Major permitting & siting complete, outside and

inside plant

construction in progress

*PROJECT IS SHARED WITH PPL. PROJECT ESTIMATE REPRESENTS PSE&G’S CONSTRUCTION

RESPONSIBILITY FOR THE NJ PORTION.     E = ESTIMATE

39

Northeast Grid Reliability consists of

upgrading approximately 50 overhead circuit miles of 138kV

transmission line to 230kV, constructing ~18 miles of new

underground 230kV lines, and converting twelve existing

stations to 230kV operation

Project

Estimate Up

To

Through Year-

end 2012

2013-2015E

Expected

In-service Date

$895M

$88M

$807M

June 2015

•

PJM RTEP project b1304

•

ROE of 11.93% (including 0.25% incentive)

•

100% CWIP in rate base during development

•

100% recovery of prudently incurred costs due to abandonment

Project Status: Engineering, licensing, and outside plant

underground construction in progress

E = ESTIMATE

40

North Central Reliability consists of upgrading

55 circuit miles of 138kV transmission line to 230kV, and

converting six existing stations to 230kV operation

Project

Estimate Up To

Through Year-

end 2012

2013-2015E

Expected

In-service Date

$390M

$163M

$227M

June 2014

•

PJM RTEP project b1154

•

ROE of 11.68%

•

100% CWIP in rate base during development

•

100% recovery of prudently incurred costs due to abandonment

Project Status: Major permitting & siting complete, outside and inside

plant construction in progress

E = ESTIMATE

41

Burlington-Camden 230kV consists of upgrading

37 circuit miles (30 miles of overhead and 7 miles of under-

ground) of 138kV transmission line to 230kV, converting the

existing stations to 230kV operation

Project

Estimate

Up To

Through

Year-end

2012

2013-

2014E

Expected

In-service

Date

$399M

$169M

$230M

June

2014

•

PJM RTEP project b1156

•

ROE of 11.68%

•

100% CWIP in rate base during

development

•

100% recovery of prudently incurred costs

due to abandonment

E = ESTIMATE

Project Status: Major permitting & siting

complete, outside and inside plant

construction in progress

42

Mickleton-Gloucester-Camden 230kV

consists of upgrading 10 circuit miles of overhead transmission,

installing ~16 circuit miles of new 230kV underground, 10

circuit miles of new 230kV overhead, and

modifications/upgrades at five existing stations

Project

Estimate Up To

Through Year-

end 2012

2013-2015E

Expected

In-service Date

$435M

$24M

$411M

June 2015

•

PJM RTEP project b1398

•

ROE of 11.68%

•

100% CWIP in rate base during development

•

100% recovery of prudently incurred costs due to abandonment

E = ESTIMATE

Project Status: Major permitting & siting complete, outside and inside

plant construction in progress

43

State policy imperatives have been redefined

by SuperStorm Sandy

44

We have also responded with a plan focused

on infrastructure hardening and resiliency

45

PSE&G is continuing to provide solutions

to assist New Jersey in achieving its EMP goals

*PENDING APPROVAL.

46

Lower commodity costs and expiration of

certain transition charges are expected to fully offset the impact

to customer bills

*2018 BGS/BGSS RATES AS WELL AS SBC AND DISTRIBUTION RATES HELD CONSTANT AT CURRENT 2013 RATES.

RATES RELATED TO ELECTRIC RESTRUCTURING: SECURITIZATION (STC), NON-UTILITY GENERATION CHARGE (NGC), & TRANSITIONAL ENERGY FACILITIES ASSESSMENT (TEFA), ARE REDUCED TO ZERO BY 2018. THE RGGI RECOVERY CHARGE (RRC), SOLAR

PILOT RECOVERY CHARGE (SPRC), AND CAPITAL ECONOMIC STIMULUS INFRASTRUCTURE INVESTMENT PROGRAM EXTENSION (CIP II ) BILL IMPACTS ARE INCLUDED IN THEIR RESPECTIVE GAS AND ELECTRIC BARS AND FORECASTED IN 2018 BASED UPON

LATEST ESTIMATE. THE 2018 BILL IMPACTS OF ES, EE4ALL, AND S4AEXT/SL3 IMPACTS ARE BASED UPON CURRENT ESTIMATES.

47

PSE&G’s 2013 operating earnings

is benefiting from transmission growth and

cost containment initiatives

E= ESTIMATE

*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS TO RECONCILE TO OPERATING

EARNINGS.

48

Long Island

Power Authority

49

LIPA T&D management contract

In December 2011, the Long Island Power Authority (LIPA) selected PSEG to manage

its electric transmission and distribution system for 10 years starting in 2014 

•

Commitment to cost control and investment optimization

•

Corporate culture of transparency and data-driven decision making

•

Transition activities on-track –

successfully achieving all milestones through February 2013

Successful management of the LIPA transmission and distribution system may lead to additional

growth opportunities

•

Reasons

for

selecting

PSEG

included:

•

Proven

technical

capabilities

and

track

record

of

top

quartile

customer

service

and

reliability

•

Evaluating

impact

of

SuperStorm

Sandy

and

recent

LIPA

management

changes

on

the

overall

schedule

and

transition

PSEG ENERGY

holdings

EXECUTIVE VICE PRESIDENT

STRATEGY AND DEVELOPMENT

PRESIDENT PSEG

ENERGY HOLDINGS

Randall Mehrberg

51

PSEG

Energy Holdings

strategy

Holdings’

priorities

are to manage

lease risks, sell

remaining non-

core assets and

grow the

renewables

portfolio

52

PSEG ENERGY HOLDINGS has monetized the

majority of its legacy assets, eliminated all Holdings debt, and

returned cash to PSEG

NOTE:

2006

AND

2012

DATA

REFLECT

BOOK

VALUES

OF

ASSETS,

EXCLUDING

DEFERRED

TAXES.

TRANSACTIONS

REFLECT

TRANSFER

VALUE

IN

THE

CASE

OF

TEXAS,

MARKET

VALUES

FOR

ASSET

DISPOSITIONS

OR,

IN

THE

CASE

OF

DYNEGY,

BOOK

VALUE

RESERVE

TAKEN

IN

2011..

Holdings Investment Portfolio

53

Reducing Risk and

Monetizing Legacy Assets

PSEG Energy Holdings

Growth in

unregulated renewables

PSEG Solar Source

Growth by

leveraging knowledge

PSEG Long Island

Merchant Energy

Leveraged Leases

Regulated Energy

Leveraged Leases

Real Estate Leveraged

and Operating Leases

Legacy

Generation Assets

…MANAGING RISK FOR REMAINING LEGACY ASSETS AND INVESTING IN RENEWABLES

54

Queen Creek

Arizona (25 MW)

COD October 2012

Polycrystalline -

single axis tracker

Investment $75 million

20 year PPA with SRP

PSEG Solar Source has completed 69 MW and has

an additional 19 MW under construction

JEA

Florida (15 MW)

Milford

Delaware (15 MW)

COD December 2012

Polycrystalline -

fixed tilt

Investment $47 million

20 year PPA with DEMEC

Hackettstown  (Mars)

New Jersey  (2 MW)

COD September 2009

Thin film panels –

fixed tilt

Investment $13 million

15 year PPA with Mars, Inc.

Wyandot

Ohio (12 MW)

COD May 2010

Thin film panels –

fixed tilt

Investment $45 million

20 year PPA with AEP

…

OPPORTUNITY FOR GROWTH IN UNREGULATED SOLAR

Badger I

Arizona (19 MW)

Expected COD late 2013

Polycrystalline -

single axis tracker

Investment $51 million

30 year PPA with APS

COD September 2010

Thin film panels –

fixed tilt

Investment $59 million

30 year PPA with JEA

55

PSEG Energy Holdings

These projects will produce steady results for PSEG

PSEG Solar Source EBITDA

E = ESTIMATE..

…

A STABLE, LOW-RISK PORTFOLIO

56

PSEG Energy Holdings

Simplifying the

business and creating

growth opportunities in

renewables

Operational Excellence

Financial Strength                       

Disciplined Investment

PSEG POWER

PRESIDENT & CHIEF OPERATING

William Levis

OFFICER, PSEG POWER

58

PSEG Power

strategy

Focused on safety

performance, unit

reliability, competitive

cost structure with

control of

maintenance costs,

achieving operational

excellence, and

supporting market

rules to maintain a

level playing field

59

PSEG Power creating value by responding to changing

markets and regulations

60

PSEG Power delivered in 2012

Storm and

weather challenges

•

SuperStorm Sandy

impacted

our generating sites

•

Warm winter put

pressure on demand

and pricing for both

electricity and gas

•

Hot summer weather

created challenging

operating

environment

Market

challenges

•

Unit outages and

transmission

outages resulted in

pressure on basis

•

Lower gas cost

impacted dark

spread pressuring

coal unit dispatch

•

Load impacted by

weather and

economy

Value

delivered

•

Cost control

•

Lower dispatch and fuel cost

•

Captured value through coal/gas

switching, unit flexibility

•

Improved unit availability

•

Coal & oil sales optimized inventory

•

Expedited return from storm outages,

restored margin opportunities

•

Optimized unit dispatch across fleet

during storm recovery

61

PSEG Power has generating assets in

three competitive markets

•

Low cost portfolio

•

Fuel flexibility

•

Assets near loads

•

Poised to benefit in real

time markets

•

Fleet will maintain

diversity and efficiency in

2016 after HEDD

•

Most sites suitable for

expansion

62

PSEG Power Nuclear fleet is a critical element

of success

Hope Creek

•

Operated by PSEG Nuclear

•

PSEG Ownership: 100%

•

Technology: Boiling Water

Reactor

•

Total Capacity: 1,174 MW

•

Owned Capacity:  1,174 MW

•

License Expiration: 2046

•

Next Refueling

•

Fall 2013

Salem

Units 1 and 2

•

Operated by PSEG Nuclear

•

PSEG Ownership:  57%,

Exelon –

43%

•

Technology: Pressurized Water

Reactor

•

Total Capacity: 2,326 MW

•

Owned Capacity: 1,335 MW

•

License Expiration: 2036

and 2040

•

Next Refueling

•

Unit 1 --

Spring 2013

•

Unit 2 –

Spring 2014

Peach Bottom

Units 2 and 3

•

Operated by Exelon

•

PSEG Ownership: 50%

•

Technology: Boiling Water

Reactor

•

Total Capacity: 2,245 MW

•

Owned Capacity:

1,123 MW

•

License Expiration: 2033 and

2034

•

Next Refueling

•

Unit 2 –

Fall 2014

•

Unit 3 –

Fall 2013

63

PSEG Power Nuclear is core to the fleet and has

competitive advantages

64

PSEG Power’s

Fossil Fleet

availability has

shown

steady

improvement

65

PSEG Power

improvements

achieved in

combined cycle

fleet efficiency

Actions Taken to Create Value

•

Heat rate improvement

program

•

Operational Excellence

Model

•

Training programs

•

Unit testing initiative

•

Outage work to restore

efficiency

66

SuperStorm Sandy affected the fleet;

when the load returned, Power was ready

67

PSEG Power’s fleet is among the lowest emitting

in the industry

•

Mercury reduced 80% across the timeframe above

•

Power is well positioned for HAPS

68

PSEG Power’s

focus on costs

has resulted in

moderate

increase in O&M

for six years

Cost control actions taken:

•

Coal assessment

•

CCGT material condition assessment

•

Contract renegotiation

•

Material management

•

Nuclear maintenance productivity study

•

Nuclear outage efficiency initiative

2008 to 2013 CAGR = 1.9%

Power O&M Expense*

* INCLUDES IMPACTS FROM STORM RECOVERY COSTS AND POTENTIAL RELATED INSURANCE PROCEEDS.     

E = ESTIMATE.

69

PSEG Power is well positioned

for growth in

the fleet when market conditions dictate

Available locations

Our

sites

possess

infrastructure

advantages

•

Bergen

•

Burlington

•

Essex

•

Edison

•

Kearny

•

Hudson

•

Linden

•

Sewaren

•

Bridgeport

Harbor

•

Electric Interconnection

•

Gas Pipeline Access

•

Sites/Space

•

Emissions

70

PSEG Power will maintain diversity and

efficiency after a realignment of the fleet in 2016

E=ESTIMATE

71

PSEG Power is an established leader

within the industry

72

PSEG Power has added value with focus on

operational excellence

* EXCLUDES SANDY IMPACT.

Shahid Malik

PRESIDENT

ENERGY RESOURCES AND TRADE

PSEG POWER ER&T

74

PSEG Power

ER&T strategy

Focused on

optimizing the value

of its asset portfolio

and providing

outstanding service

to our customers, 

while prudently

managing risk

75

Agenda

Diversified Assets & Flexible Dispatch

Managing Risks & Creating Value

Regulatory Advocacy

76

PSEG wholesale market strategy

built on a strong asset portfolio

Diversified

Assets &

Flexible Dispatch

Regulatory

Advocacy

Managing

Risks &

Creating Value

Managing Risks & Creating Value

Consistent hedging strategy •

Full load requirements •

Capacity sales •Monetize optionality

Diversified Assets &

Flexible Dispatch

Strong operational performance

Fuel switching

Ancillary services

Regulatory Advocacy

Supports competitive markets

Seeks a level playing field

Provides insight

Creates opportunity

MARKET

EXPECTATIONS

77

Diversified assets and flexible dispatch

78

Fleet capacity has been advanced by:

79

Spark spread replaces dark spread

as major value driver

Actual Monthly On Peak Spreads

PS Zone vs M3/CAPP

PSEG Power Natural Gas

Use for Electric Generation

Spark spread has risen above dark spread in PJM markets

Power’s gas units operating at record throughput

Gas operation provides much more operational flexibility

Enhances the ability of trading organization to capture volatility

79

80

Agenda

Diversified Assets & Flexible Dispatch

Managing Risks & Creating Value

Regulatory Advocacy

81

2013 BGS Auction Results for PSE&G Zone

Capacity

Load shape

Transmission

Congestion

Ancillary services

Risk premium

Green

BGS sales account for about a third of our forward portfolio of hedges

3 Year Average

Round the Clock

PJM West

Forward Energy

Price

2009

2010

2011

2012

2013

$103.72

~ $47

$95.77

$94.30

~ $47

~ $48

~ $46

$83.88

~ $53

$92.18

$48

-

$50

$45

-

$47

$37

-

$38

$56

-

$58

$39

-

$40

BGS PRICES REFLECT PSE&G ZONE; RESULTS FOR 2011-2013 WILL BE THE NEW BLENDED PRICES BEGINNING JUNE 1, 2013.

82

•

3 Year forward BGS sales comprise smaller percentage of Power’s hedges

•

Other full requirement load deals help capture additional locational and load

shape premium

NOTE:  PERCENTAGES REPRESENT HEDGED VOLUMES IN PLACE AFTER BGS AUCTION.

Our hedging mix has changed with the

market but still captures the fleet’s locational advantage

83

Hedging strategy designed to protect gross margin

and leverage the portfolio

Dynamic Hedging on

Intermediate Coal, Combined

Cycle and Peaking:

2013

2014

2015

Baseload

(Nuclear and

Baseload Coal)

Volume TWh

35

35

35

% Hedged

100%

80-85%

40-45%

Price $/MWh

$50

$49

$51

Intermediate

Coal, Combined

Cycle, Peaking

Volume TWh

20

19

18

% Hedged

30-35%

0%

0%

Price $/MWh

$50

$49

$51

TOTAL

Volume TWh

53-55

53-55

52-54

% Hedged

75-80%

50-60%

25-30%

Price $/MWh

$50

$49

$51

Ratable Hedging on Baseload:

* HEDGE PERCENTAGES AND PRICES AS OF FEBRUARY 11, 2013. REVENUES

OF FULL REQUIREMENT LOAD DEALS BASED ON CONTRACT PRICE,

INCLUDING RENEWABLE ENERGY CREDITS, ANCILLARY, AND TRANSMISSION COMPONENTS BUT EXCLUDING CAPACITY. HEDGES INCLUDE POSITIONS

WITH MTM ACCOUNTING TREATMENT AND OPTIONS.

•

Position fleet to take advantage

of market volatility

•

Gas and load-following fleet left

open until prompt year to

capture volatility

•

Use all trading products to

capture option value of assets

and benefit from market

dislocations

•

3 year ratable hedge tactics

•

3 year PJM hedge of capacity

(not included in table)

•

Load following sales (such as

BGS) have strong correlation to

our units for hedging basis and

load shaping premium

84

•

Basis (PS Zone to PJM West) will continue to trend downward for forward sales

•

Volatility will remain significant in the prompt periods (especially summer/winter)

•

Power maintains sufficient length to participate in upside volatility as well as a

valuable 250MW transmission position into NYC

•

Basis will continue to have a positive impact on PSEG Power profitability

*AS OF FEBRUARY 14, 2013.

85

•

Lower cost supplies of shale

gas have been beneficial to

both PSE&G customers and

PSEG Power

•

Over 50% of our available

pipeline capacity can access

market area supplies of

shale gas

•

Power’s generating units sit

in close proximity to the

Marcellus fairway

•

Power buys approximately

350BCF/year of gas

•

We have been able to

arbitrage gas values from

South to North and East to

West using our storage and

pipeline capacity

Gulf Coast Supply

0.7 BCF/D

Shale Supply

0.6 BCF/D

Storage

0.9 BCF/D

Albany

PSEG’s locational advantage

and gas basis

New York

86

PJM’s capacity market continues to recognize

locational value of our fleet

2016/2017 RPM Auction Influenced By:

•

Updated Demand Curve

•

Updated Transfer Capabilities

•

Environmental Retirements

•

New Build/Cost of New Entry

•

Minimum Offer Price Rule

•

Demand Response

87

Reserve margins in PJM declining with retirements

Generation Deactivation Notifications

Source: PJM TEAC, 1/10/2013

•

PJM Pending Deactivation Requests of

12,634 MW as of January 22, 2013

•

Approximately 4,000 MW of additional

owner announced retirements in PJM

through next auction

•

PJM forecasts a declining Reserve Margin

through 2017

88

Agenda

Diversified Assets & Flexible Dispatch

Managing Risks & Creating Value

Regulatory Advocacy

89

Regulatory Advocacy

Current Issues

•

PJM RPM rules for Capacity Markets

•

PJM Energy/Ancillary Services Market

•

New England Capacity Markets

•

New York Energy Markets

•

Trade Associations and ISO/RTO activities

ISSUE /POLICY

HOW ADDRESSED?

PJM

MOPR

Sufficiency/Exceptions before FERC and courts

DEMAND RESPONSE RULES

Performance/eligibility/compensation issues before courts, FERC,

and PJM

stakeholder process

ANCILLARY/ENERGY

Regulation/Black-start modifications under consideration in PJM stakeholder

process before FERC

NYISO

CAPACITY

Jurisdictional dispute at FERC over retirement decisions; Impact

of PSC

approved Reliability Must Run arrangement on markets

NEPOOL

FCM

Market design issues pending at Court of Appeals, FERC and ISO-NE

stakeholder process

FEDERAL

Gas/Electric Coordination

Participation in ISO/FERC/Industry forums

Recent Rulings

•

FERC approval of Cost of New Entry (CONE)

•

PJM Area Regulation rules

•

EPA RICE/NESHAPS rules

•

FERC ruling imposing DR must offer requirement

in ISO-NE

90

Diversified

Assets &

Flexible Dispatch

Regulatory

Advocacy

Managing

Risks &

Creating Value

Managing Risks & Creating Value

Consistent hedging strategy •

Full load requirements •

Capacity sales •Monetize optionality

Diversified Assets &

Flexible Dispatch

Strong operational performance

Fuel switching

Ancillary services

Regulatory Advocacy

Supports competitive markets

Seeks a level playing field

Provides insight

Creates opportunity

MARKET

EXPECTATIONS

PSEG wholesale market strategy

built on a strong asset portfolio

PSEG FINANCIAL REVIEW

& OUTLOOK

EXECUTIVE VICE PRESIDENT AND

CHIEF FINANCIAL OFFICER

Caroline Dorsa

92

Strong financial position to support our

business initiatives

Financial Position

Achieved Earnings Guidance

Stable Dividend and Opportunity for Growth

Strong Balance Sheet

Regulated Growth Opportunity without Equity Issuance

Solid Credit Ratings

O&M Controlled

Well Funded Pension

93

2013 guidance in same range as 2012

PSEG Operating Earnings

$ Millions (except EPS)

2013E

PSEG Power

$535 -

$600

PSE&G

$580 -

$635

PSEG Energy Holdings/Parent

$25 -

$35

Operating Earnings*

$1,140 -

$1,270

2013 Earnings Guidance

$2.25 -

$2.50

E = ESTIMATE

*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS TO

RECONCILE TO OPERATING EARNINGS.

94

PSE&G is expected to represent 50%

of 2013 operating earnings

Business Mix of Operating Earnings

PSE&G

Power

& Other

~50%

~50%

E = ESTIMATE

SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS TO

RECONCILE TO OPERATING EARNINGS.

95

In 2012, PSE&G executed its capital program, Power

generated significant free cash flow and PSEG increased its

shareholder dividend

Power

Cash

from Ops

PSE&G

Cash

from Ops

(1)

PSE&G

Capital

Investment

Power

Capital

Investment

Cash

Other

Net

Cash

Flow

Shareholder

Dividend

Net Debt

Issuances

2012 Sources and Uses

(1) PSE&G CASH FROM OPERATIONS ADJUSTS FOR SECURITIZATION PRINCIPAL REPAYMENTS OF ~$216 MILLION.

96

Our capital investment options can result in as

much as $5.6B of utility growth investment through 2015

PSE&G

Growth

~$4B

PSE&G

Maintenance

Power

& Other

Potential Opportunities

Approved Programs

2013 –

2015E Capital Investment

~$6B

~$6.4B

~$6.6B

~$7.6B

EMP

~$0.4B

New

Transmission

~$0.2B

New

Distribution

~$1B

PSE&G

Growth

$5.6B

EMP: ENERGY MASTER PLAN

E = ESTIMATE

97

All scenarios can be financed without new equity

2013 –

2015E

Power

Cash   

from Ops

PSE&G

Cash 

from Ops

(1)

PSE&G

Capital

Investment

Power

Capital

Investment

Shareholder

Dividend

Net Debt

Issuances

Other

Net Cash

Flow

2013 –

2015E

Power

Cash

from Ops

PSE&G

Cash

from Ops

(1)

PSE&G

Capital

Investment

Power

Capital

Investment

Shareholder

Dividend

Net Debt

Issuances

Other

Net

Cash

Flow

Approved Programs plus EMP, New

Transmission and New Distribution

Approved Programs

(1) PSE&G CASH FROM OPERATIONS ADJUSTS FOR SECURITIZATION PRINCIPAL

REPAYMENTS OF ~$725M FROM 2013-2015

E = ESTIMATE

98

PSE&G’s capital spending drives regulated

earnings growth with a potential future rate base of up to ~$12.6B

~$9B

~$2.2B

~$11.2B

2012 Rate Base

Potential New Opportunities

2013 –

2015E Rate Base Growth

Approved

Programs

2015E  Rate Base

3-yr CAGR: ~7.8%

2015E  Rate Base

3-yr CAGR: ~12%

EMP

~$0.2B

New

Distribution

~$1B

New

Transmission

~$0.2B

~$11.4B

~$11.6B

~$12.6B

EMP: ENERGY MASTER PLAN

E = ESTIMATE

99

Power’s credit metrics are expected

to remain strong

Power FFO/Debt

2013 –

2015E Average

E = ESTIMATE

0%

10%

20%

30%

40%

50%

60%

70%

80%

2010

2011

2012

Approved

Approved plus EMP,

New Transmission

and New

Distribution

100

Using PSEG’s balance sheet strength

to finance growth in the regulated enterprise without equity

issuance

PSEG Total Capitalization

2012

2015E*

* E = ESTIMATE; INCLUDES THE FOLLOWING PROPOSED FILINGS: EE4A, SL3, S4AE, ENERGY STRONG (ES) AND

TRANSMISSION HARDENING.

101

Our investment programs are affordable,

helped by the expiration of known charges by 2017, which

lower the average residential customer bill by ~ 8.7% based on

today’s current bill

PSE&G Securitization & NUG Impacts ($Millions)

PSE&G Securitization Impacts

2013

2014

2015

2016

2017

Revenues

439

445

386

0

0

Interest Expense

(46)

(30)

(11)

0

0

Amortization

(253)

(273)

(233)

0

0

Deferred Tax & Other

(140)

(142)

(142)

0

0

P&L Impact (GAAP view)

0

0

0

0

0

PSE&G Non–Utility  Generation

2013

2014

2015

2016

2017

Revenues*

157

167

141

49

0

Expenses

(157)

(167)

(141)

(49)

0

P&L Impact (GAAP view)

0

0

0

0

0

*NUG revenues reflect Feb 1, 2013 rates

Typical Current Average Residential

Customer Bill Impact

Securitization

~6.6%

Non-Utility

Generation

~2.1%

102

Modest O&M growth with Power increases from

CCGT maintenance cycles, due to high utilization rates

(1) POWER EXCLUDES IMPACTS FROM STORM RECOVERY COSTS AND POTENTIAL RELATED INSURANCE PROCEEDS NM = NOT MATERIAL. 

E = ESTIMATE.

PSEG O&M Expense

(1)

2013-2015E CAGR: ~2.2%

CAGR

Transmission

~0.4%

Distribution

~1.3%

Power

~2.9%

Holdings &

Other: N.M.

103

Pension contributions expected to decline with

well funded plan

Pension Plan  Contributions

2010

2011

2012

2013E

2014E

2015E

Funded Ratio

82%

84%

83%

>85%

>90%

>90%

Amended

Benefit

Plans

E = ESTIMATE

104

PSEG’s long-term outlook is influenced by

Power’s hedge position and increased investment at PSE&G

2014E

2015E

Segment EPS Drivers

E = ESTIMATE

Each $1/mcf Change in Natural Gas

Each $2/MWh Change in Spark Spread

Each $2/MWh Change in Dark Spread

Each 1% Change in Nuclear Capacity Factor

Each $100 Million of Incremental Investment

Each 1% Change in Sales:

Electric

Gas

Each 1% Change in O&M

Each 10 bp Change in ROE

$0.01

$0.01

$0.01

$0.01

$0.01

$0.10 -

$0.13

$0.04

$0.01

$0.01

$0.03 -

$0.06

$0.04

$0.01

$0.01

$0.01

$0.01

$0.01

$0.01

$0.01

105

Opportunity for modest and sustainable

dividend increases consistent with stable regulated growth

and cash generation outlook at PSEG Power

PSE&G

EPS

$1.25

$1.14

$1.42

Annual Dividend Per Share

E = ESTIMATE

106

Summary

•

Operating Earnings Guidance for 2013 of $2.25 -

$2.50 per share

with earnings mix shifting to 50% regulated

•

Double digit operating earnings growth at PSE&G starting in 2013,

and continuing through 2015 driven by transmission investments and

approved programs

•

Power’s continued focus on operational excellence, market expertise

and financial strength reduces risk in low price environment

•

Strong Balance Sheet and Cash Flow support  full capital program

without the need for equity

•

Long history of returning cash to the shareholder through the common

dividend, with opportunity for further growth

PSEG Executive Profiles

108

CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Ralph Izzo

109

EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL, PUBLIC SERVICE

ENTERPRISE GROUP INCORPORATED, PUBLIC SERVICE ELECTRIC AND GAS

COMPANY, PSEG SERVICES CORPORATION, EXECUTIVE VICE PRESIDENT 

AND PSEG POWER

J. A. Bouknight, Jr. (Lon)

110

EXECUTIVE

VICE

PRESIDENT

AND

CHIEF

FINANCIAL

OFFICER,

EXECUTIVE

VICE

PRESIDENT

AND

CHIEF

FINANCIAL

OFFICER,

PUBLIC

SERVICE

ENTERPRISE

GROUP

INCORPORATED,

PUBLIC

SERVICE

ELECTRIC

AND

GAS

COMPANY,

PSEG

POWER

LLC

AND

PSEG

SERVICES

CORPORATION

Caroline Dorsa

111

SENIOR VICE PRESIDENT –

PUBLIC AFFAIRS & SUSTAINABILITY

PSEG SERVICES CORPORATION

Anne E. Hoskins

112

PRESIDENT AND CHIEF NUCLEAR OFFICER

PSEG NUCLEAR

Thomas P. Joyce

113

PRESIDENT AND CHIEF EXECUTIVE OFFICER

PUBLIC SERVICE ELECTRIC AND GAS COMPANY

Ralph LaRossa

114

PRESIDENT & CHIEF OPERATING OFFICER

PSEG POWER

William Levis

115

PRESIDENT

PSEG FOSSIL

Richard P. Lopriore

116

PRESIDENT

PSEG ENERGY RESOURCES & TRADE

Shahid Malik

117

EXECUTIVE VICE PRESIDENT STRATEGY AND DEVELOPMENT

PRESIDENT PSEG ENERGY HOLDINGS

Randall Mehrberg

118

SENIOR

VICE

PRESIDENT

–

HUMAN

RESOURCES

AND

CHIEF HUMAN RESOURCES OFFICER PSEG SERVICES CORPORATION

Margaret M. Pego, SPHR

119

PSE&G

Appendix

120

PSE&G provides high reliability at below

average cost which creates superior value to customers

SAIDI

=

SYSTEM

AVERAGE

INTERRUPTION

DURATION

INDEX,

A

MEASURE

OF

AVERAGE

OUTAGE

DURATION

FOR

ALL

CUSTOMERS

SERVED.

121

PSE&G prioritizes public safety

while maintaining value to customers

LEAK

RESPONSE

RATE

=

PERCENTAGE

OF

UTILITY

RESPONSES

TO

REPORTED

LEAKS

WITHIN

ONE

HOUR.

122

Formula rates for transmission make the

process more predictable with contemporaneous returns

Transmission (Federal)

Distribution Base Rate Case (State)

Current ROE

•

11.68% base

•

12.93% with incentives on Susquehanna-Roseland

•

11.93% with incentives on Northeast Grid

•

10.3%

Volatility of Returns

•

Low –

prospective recovery with annual true-ups for

over/under recovery

•

Higher –

performance impacted positively/negatively

by cost management, weather, customer demands,

etc.

Process

•

Formula –

The rate template and specific elements like

ROE are predetermined with annual updates and true

ups

•

Litigated case with each element (depreciation, ROE,

O&M levels, Rate Base) scrutinized and settled

Intervenors

•

State consumer advocates usually participate

•

State consumer advocates

•

Large customers

•

Other parties affected by the case, e.g. Solar

Developers

Test Year

•

PSE&G

has

fully

forecasted

test

year

for

both

Capital

and

O&M

•

Historical

test

year

with

pro-forma

adjustments

for

known

and

measurable

items,

e.g.

wage

escalation

Time to resolve

•

Annual Formula updates are filed in October with

January 1 effective date

•

Typically settled within 12-15 months

123

New Jersey Board of Public Utilities (BPU)

•

The Board of Public Utilities consists of five

commissioners appointed by the Governor.  These

appointees are confirmed by the NJ Senate for six-year,

staggered terms.  The Governor appoints one of the five

to serve as Commission President.  Currently, the

commissioners are:

•

Robert M. Hanna, Commission President

•

Jeanne M. Fox

•

Joseph L. Fiordaliso

•

Mary-Anna Holden

•

Stefanie Brand, Director of the Division of Rate Counsel

124

Slow economic recovery in NJ is constraining

growth in all market sectors

Modest residential growth limited

by housing market inactivity and

the slow economic recovery

Consumer spending is trending

with the slow economic recovery

and impacting growth in the

commercial sector

Industrial sales growth continues

to be constrained by slow

economic recovery

0.3%

0.4%

0.0%

0.5%

0.9%

0.7%

0.3%

0.7%

2013 -

2015 Projected Sales

Growth –

Gas*

2013 -

2015  Projected

Sales Growth –

Electric*

Residential

Commercial

Industrial

Total

Residential

Commercial

Industrial

Total

*  WEATHER NORMALIZED ESTIMATED ANNUAL GROWTH PER YEAR OVER FORECAST PERIOD

125

Key economic indicators forecast renewed

growth over the 2012 to 2015 timeframe

The New Jersey economy increased by 0.3%

annually from 2010 to 2012 and is

anticipated to grow 2.3% per year from

2012 to 2015

New Jersey total non-farm employment

increased by 0.6% annually from 2010 to

2012 and is expected to grow 1.4% per year

from 2012 to 2015

Real personal income in New Jersey

increased by 1.4% annually from 2010 to

2012 and is expected to increase 2.5% per

year from 2012 to 2015

Single family housing starts declined by

2.6% annually from 2010 to 2012 and are

expected to increase ~24% per year from

2012 to 2015

SOURCE: HIS GLOBAL INSIGHT FEBRUARY 2013 FORECAST.

126

PSEG Power

Appendix

127

Nuclear fuel needs have been hedged through 2015

Hedged

128

Power’s coal hedging reflects 2013 supply

matched with 2013 sales…

Station

Coal Type

Pricing

($/MWh)

*

Comments

Bridgeport

Harbor

Adaro

Mid $50’s

Higher

price, lower

BTU, enviro

coal

Hudson

CAPP

High

$40’s

Flexibility

after BET in

2010

Mercer

Metallurgica

l

CAPP/NAPP

Mid $40’s

More

limited

segment of

coal

market

Keystone

NAPP

Mid $20’s

Prices

steady

Conemaugh

NAAP

Mid $20’s

Prices

steady

*COMMODITY PLUS TRANSPORTATION

129

The full requirements BGS rate recognizes the

forward PJM capacity market price

2013-2014

250

$

195

$

2014-2015

170

$

108

$

2015-2016

166

$

365

$

108

8,760

~37%

350,000

22

$

MW per Tranch (varies by EDC)

Load Factor (varies by EDC)

Capacity Price per BGS Tranche

Capacity Price per RPM Auction for  PSEG Zone

Three Year  Average ($/MW-day)

$ 195

Capacity Cost per Tranche

$      7,712,637

MWh per Tranche

Capacity Cost per MWh

Three Year  Average ($/MW-day)

Days per Year

Energy MW per Tranche (Varies by EDC)

Hours per Year

MWh per Tranche, approx.

130

PSEG Energy Holdings

Appendix

131

PSEG Energy Holdings

Investment Portfolio

Equipment

Investment  Balance *            

at  12/31/12

($millions)

Solar  Source

Five Operating Solar Facilities : NJ, DE, OH, FL, AZ  –

69 MW

$159

Merchant Energy Leases

GenOn (REMA)

Keystone, Conemaugh & Shawville (PA)

3 coal-fired plants (1,162 equity MW)

$341

Edison Mission Energy (EME)**

Powerton & Joliet Generating Stations (IL)                     

2 coal-fired generating facilities (1,640 equity MW)

$218

Regulated Energy Leases

Merrill Creek

Reservoir in NJ  (PECO, MetEd, Delmarva Power & Light)

$202

Grand Gulf

Nuclear station in Mississippi (175 equity MW)

Real Estate Leveraged Leases

GM Renaissance Center; Wal-Marts; E-D (shopping) Center

$ 80

Real Estate  Operating Leases

Office Towers, Shopping Centers -

29 properties

$100

Generation Legacy Assets

Kalaeloa (HI)  209 MW CC Oil,  GWF (in wind down stage) 

$ 96

Aircraft Leases and Other

Delta Airlines aircraft; Land & Receivables

$ 24

Total Holdings Investments

$1,220

* BOOK BALANCE EXCLUDING  DEFERRED TAX ACCOUNTS

**EME AND ITS SUBSIDIARIES FILED CHAPTER 11 BANKRUPTCY ON 12/17/2012. LEASE REJECTION OR ACCEPTANCE DECISION IS

PENDING.

132

PSEG Financial

Appendix

133

Delivered on 2012 earnings guidance

PSEG Operating Earnings

$ Millions (except EPS)

2012

PSEG Power

$644

PSE&G

$528

PSEG Energy Holdings/Parent

$64

Operating Earnings*

$1,236

Earnings per Share

$2.44

2012 Earnings Guidance

$2.25 -

$2.50

*SEE SLIDE A

FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS TO RECONCILE TO OPERATING EARNINGS.

134

PSEG 2013 Operating Earnings

Guidance -

By Subsidiary

$ millions (except EPS)

2013E

2012A

PSE&G

$580 –

$635

$528

PSEG Power

$535 –

$600

$644  

PSEG Energy Holdings/Enterprise

$25 –

$35  

$64

Operating Earnings*

$1,140 –

$1,270

$ 1,236

Earnings per Share

$ 2.25 –

$ 2.50

$2.44

* SEE SLIDE A  FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS TO

RECONCILE TO OPERATING EARNINGS.  E

=

ESTIMATE

135

Strong Balance Sheet supports our full capital

program without the need for equity

$Billions

Capitalization

Subsidiary Debt

(1)

2010

2011

2012

PSE&G

4.28

4.27

5.06

PSEG Power

3.45

2.75

2.34

Parent & Other

0.08

0.04

0.04

Total PSEG Debt

7.81

7.06

7.44

Subsidiary Equity

PSE&G

4.42

4.65

5.17

PSEG Power

5.03

5.44

5.44

Parent & Other

0.18

0.18

0.17

Total PSEG Equity

9.63

10.27

10.78

PSE&G Debt to Cap

49%

48%

49%

Power Debt to Cap

41%

34%

30%

PSEG Debt to Cap

45%

41%

41%

DEBT INCLUDES SHORT TERM DEBT (INCLUDING COMMERCIAL PAPER) AND EXCLUDES NON-RECOURSE AND SECURITIZATION DEBT

136

PSEG Liquidity as of December 31, 2012

Company

Facility

Date

Facility

Usage

Liquidity

($Millions)

PSE&G

5-year Credit Facility

Apr-16

$600

$276

$324

5-Year Credit Facility (Power)

Mar-17

1,600

65

1,535

5-Year Credit Facility (Power)

Apr-16

1,000

0

1,000

5-Year Bilateral (Power)

Sep-15

100

100

0

5-year Credit Facility (PSEG)

Mar-17

500

4

496

5-year Credit Facility (PSEG)

Apr-16

500

0

500

Total

$4,300

$445

$3,855

$222

PSE&G ST Investment

$65

Total Liquidity Available

$4,142

Total Parent / Power Liquidity

$3,753

PSEG /

Power

PSEG Money Pool ST Investment

Items Excluded from Income from

Continuing Operations to Reconcile to Operating Earnings

2012

2011

2010

2009

2008

Earnings Impact ($ Millions)

Gain (Loss) on Nuclear Decommissioning Trust (NDT)

Fund Related Activity (PSEG Power)

52

$             

50

$          

46

$          

9

$               

(71)

$         

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

(10)

107

(1)

(11)

14

Lease Transaction Activity (Energy Holdings)

36

(173)

-

29

(490)

Storm O&M (PSEG Power)

(39)

-

-

-

-

Market Transition Charge Refund (PSE&G)

-

-

(72)

-

-

Gain (Loss) on Asset Sales and Impairments (Energy Holdings)

-

34

-

-

(13)

For the Year Ended

December 31,

Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings

(Unaudited)

Pro-forma Adjustments, net of tax

Total Pro-forma adjustments

39

$             

18

$          

(27)

$         

27

$             

(560)

$       

Fully Diluted Average Shares Outstanding (in Millions)

507

507

507

507

508

Per Share Impact (Diluted)

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

0.10

$          

0.10

$       

0.09

$       

0.02

$          

(0.14)

$      

Gain (Loss) on MTM (PSEG Power)

(0.02)

0.21

-

(0.02)

0.03

Lease TransactionActivity (Energy Holdings)

0.07

(0.34)

-

0.05

(0.96)

Storm O&M (PSEG Power)

(0.08)

-

-

-

-

Market Transition Charge Refund (PSE&G)

-

-

(0.14)

-

-

Gain (Loss) on Asset Sales and Impairments (Energy Holdings)

-

0.06

-

-

(0.03)

Total Pro-forma adjustments

0.07

$          

0.03

$       

(0.05)

$      

0.05

$          

(1.10)

$      

PLEASE SEE PAGE 3 FOR AN EXPLANATION OF PSEG’S USE OF OPERATING EARNINGS AS A NON-GAAP FINANCIAL MEASURE AND HOW IT DIFFERS FROM NET INCOME.

A