EXHIBIT 99.2

                          NOTICE OF GUARANTEED DELIVERY

                            PSEG ENERGY HOLDINGS INC.

  OFFER TO EXCHANGE ITS 8.50% SENIOR NOTES DUE 2011, WHICH HAVE BEEN REGISTERED
       UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OUTSTANDING 8.50%
            SENIOR NOTES DUE 2011, WHICH HAVE NOT BEEN SO REGISTERED.

              PURSUANT TO THE PROSPECTUS DATED ______________, 2001

As set forth in the Exchange Offer (as described in the Prospectus (as defined
below)), this form or one substantially equivalent hereto must be used to accept
the Exchange Offer if certificates for unregistered 8.50% Senior Notes due 2011
(the Original Notes), of PSEG Energy Holdings Inc. (Energy Holdings), are not
immediately available or time will not permit a holder's Original Notes or other
required documents to reach the Exchange Agent on or prior to the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a timely
basis. This form may be delivered by facsimile transmission, by registered or
certified mail, by hand, or by overnight delivery service to the Exchange Agent.
See The Exchange Offer -- Procedures for Tendering Original Notes in the
Prospectus.

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME,
ON _________________, 2001 (THE EXPIRATION DATE), UNLESS THE EXCHANGE OFFER IS
EXTENDED BY ENERGY HOLDINGS.

                  THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:

                            FIRST UNION NATIONAL BANK



                                                              
   Facsimile Transmissions:
By Hand Or Overnight Delivery:      (Eligible Institutions Only)    By Registered Or Certified Mail:
   First Union National Bank                704-590-7628             By Hand Or Overnight Delivery:
     First Union Customer                                               First Union National Bank
      Information Center                                                  First Union Customer
  1525 West W.T. Harris Blvd.                                              Information Center
  Corporate Trust Department                                           1525 West W.T. Harris Blvd.
    Charlotte, N.C.* 28262                                             Corporate Trust Department
   Attention: Michael Klotz                                              Charlotte, N.C.* 28262
                                                                        Attention: Michael Klotz

                                      To Confirm by Telephone
                                     or for Information Call:
                                            Marsha Rice
                                           704-590-7413


(Originals of all documents sent by facsimile should be sent promptly by
registered or certified mail, by hand, or by overnight delivery service.)

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.




Ladies and Gentlemen:

The undersigned hereby tenders to PSEG Energy Holdings Inc., a New Jersey
corporation (Energy Holdings), in accordance with Energy Holdings' offer, upon
the terms and subject to the conditions set forth in the prospectus dated
_______________, 2001 (the Prospectus), and in the accompanying Letter of
Transmittal, receipt of which is hereby acknowledged, $____________ in the
aggregate principal amount of Original Notes pursuant to the guaranteed delivery
procedures described in the Prospectus.

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  Name(s) of Registered Holder(s): _________________________________________
                                             (Please Type or Print)

  Address: _________________________________________________________________

  Area Code and Telephone Number: __________________________________________

  Certificate Number(s) for Original Notes (if available): _________________

  Total Principal Amount Tendered and
  Represented by Certificate(s): $ _________________________________________

  Signature of Registered Holder(s): _______________________________________

  Date: ____________________________________

  |_| The Depository Trust Company
        (check if Original Notes will be tendered by book-entry transfer)

  Account Number ___________________________

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                      THE GUARANTEE BELOW MUST BE COMPLETED

                                    GUARANTEE
                    (Not to be used for signature guarantee)

The undersigned, being a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office in the United States, hereby
guarantees (a) that the above-named person(s) own(s) the Original Notes tendered
hereby within the meaning of Rule 14e-4 (Rule 14e-4) under the Securities
Exchange Act of 1934, as amended, (b) that the tender of such Original Notes
complies with Rule 14e-4, and (c) to deliver to the Exchange Agent the
certificates representing the Original Notes tendered hereby or confirmation of
book-entry transfer of such Original Notes into the Exchange Agent's account at
The Depository Trust Company, in proper form for transfer, together with the
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees and any other required
documents, within three New York Stock Exchange trading days after the
expiration date.

Name of Firm: ______________________________________________________________

Address: ___________________________________________________________________

Area Code and Telephone Number: ____________________________________________

Authorized Signature: ______________________________________________________

Name: ______________________________________________________________________

Title: _____________________________________________________________________

Date: ______________________________________________________________________

NOTE: DO NOT SEND CERTIFICATES OF ORIGINAL NOTES WITH THIS FORM. CERTIFICATES
FOR ORIGINAL NOTES SHOULD BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.

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