1) PSEG is an energy company with over $29 billion in assets as of 2005. Its main business segments are regional utilities, wholesale energy generation, and energy trading. 2) For 2006, PSEG is forecasting operating earnings between $875-950 million and EPS between $3.45-3.75. It provides an outlook for 10%+ earnings growth by 2007 driven by various business factors. 3) PSEG Power is focusing on improving performance from its nuclear, fossil, and trading operations which is expected to increase energy and capacity margins over the next few years. PSEG&G is working to restore its regulatory relationships and profitability from its gas and electric utilities. PSEG Holdings

1. Public Service Enterprise Group
Merrill Lynch
Global Power & Gas Leaders Conference
September 26, 2006

2. Forward-Looking Statements
This presentation includes forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. The factors
that could cause actual results of Public Service Enterprise Group Incorporated (PSEG), Public
Service Electric and Gas Company, PSEG Power LLC, and PSEG Energy Holdings L.L.C.
(collectively, the PSEG Companies) to differ materially from these forward-looking statements
include those discussed herein as well as those discussed in (1) the PSEG Companies' 2005
Annual Report on Form 10-K, and 2006 Quarterly Reports on Form 10-Q in (a) Forward
Looking Statements (b) Risk Factors, and (c) Management's Discussion and Analysis of
Financial Condition and Results of Operations and (2) other factors discussed in filings with the
SEC by the PSEG Companies. Readers are cautioned not to place undue reliance on these
forward-looking statements, which apply only as of the date of this presentation. None of the
PSEG Companies undertakes any obligation to publicly release any revision to its forward-
looking statements to reflect events or circumstances after the date of this presentation.
1

3. PSEG Overview
2006E Operating Earnings(1)(2): $875M - $950M
2006 EPS Guidance(1)(2): $3.45 - $3.75
Assets (as of 12/31/05): $ 29.8B
Regional
Traditional T&D
Wholesale Energy
Electric Customers: 2.1M Nuclear Capacity: 3,494 MW Domestic/Int’l Leveraged
Gas Customers: 1.7M Total Capacity: 14,636 MW Energy Leases
2005 Results: $347M(3) $418M(3) $196M(3)
2006 Range: $250M - $270M(2) $500M - $550M(2) $185M - $205M(2)
(1) Includes the parent impact of $(60-70)M
(2) Income from Continuing Operations, excluding merger-related costs and
gains/losses from asset sales and related costs
(3) Income from Continuing Operations, excluding merger-related costs of $3M for
2
PSE&G and $12M for PSEG Power

4. PSEG 2007 Earnings Outlook & Drivers
Excess
of 10%
Growth
$4.60 - $5.00
• Gas Rate • Texas
$3.45 - $3.75 Case
• 2006 RGE
• Electric Sale
Proceeding
• Forward
Hedging • New
• Weather Accounting
Standard
• Re-contracting
- PJM/NE
• Capacity
Market Design
2006 Guidance Power PSE&G Holdings 2007 Guidance 2008
3

5. PSEG Power

6. PSEG Power Overview
Nuclear
• Nuclear Operating Services Agreement provides stability
• 2005 – record output
• 2006 – year to date output exceeds 2005 at each unit
Fossil
• Increased output over 2005
• Improved performance
Energy & Capacity Margin Growth
• 2006 – energy recontracting improvements
• 2007 and beyond – energy recontracting and capacity market improvements
• Year over year growth
- 2006: $5-6/MWh improvement
- 2007: additional $7-9/MWh improvement
- 2008: further margin increase at a declining rate
5

7. Improvements in Nuclear Operations
MW Exelon Share
• Strong operational performance
2,500 Total:
3,494MW
- Capacity factors: YTD ~96%
2,000
PSEG
Summer ~100%
Share
1,500
• Outage management
1,000
- Record for reactor head replacement
500
- Site records achieved
0 • Station culture improvements
Hope Creek Salem 1 & 2 Peach Bottom
- SCWE issue closed
2&3
- “Substantial, sustainable progress”
PSEG
1,059MW* 1,323MW 1,112MW
MW
Owned
• Nuclear Operating Services
• PSEG Owned • Jointly Owned • Jointly Owned
Agreement (NOSA) remains
• PSEG Operated • PSEG Operated • Exelon Operated
effective
(NOSA) (NOSA)
*Uprate of 127MW scheduled for Fall 2007
6

8. Improvement in Fossil Operations
Total Fossil Output (Gwh)
A Diverse 11,000 MW Fleet
25,000
• 2,400 MW coal
• 4,300 MW combined cycle
20,000
• 4,500 MW peaking and other
15,000
10,000
Strong Performance
• Continued growth in output
5,000
• Improved fleet performance
• Merger related divestiture
0
commitments no longer
2002 2003 2004 2005 2006 Est.
applicable
Coal Combined Cycle Peaking & Other
Low cost nuclear and coal generate more than 80% of Power’s total output
7

9. BGS Auction Results
Increase in Full Requirements Component Due to:
Full Requirements
$102.21
Increased Congestion (East/West Basis)
• Capacity
(36 Month NJ Avg.)
Anticipated Increase in Capacity Markets/RPM • Load shape
• Transmission
Higher Volatility in Market Increases Risk Premium
• Congestion
~ $32 • Ancillary services
$65.91 • Risk premium
(36 Month NJ Avg.)
$55.59 $55.05 Recent Forward
(34 Month NJ Avg.) (36 Month NJ Avg.)
~ $21 Price Range
~ $18
~ $21
$67 - $70
$44 - $46
RTC Forward
$36 - $37
$33 - $34 Energy Cost
2003 Auction 2004 Auction 2005 Auction 2006 Auction
RTC = round the clock
8

10. Significant Forward Hedging of Nuclear and Coal
120%
Generation output not under contract
100%
2006 BGS
% of Nuclear and Coal Generation
80%
2005 BGS
2004 BGS
2003 BGS
60%
United Illuminating
40%
Other term energy contracts
20%
0%
Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08
% Hedged 85 - 95% 65 - 80%
> 95%
2008
2007
2006
9

11. Capacity Market Design
PJM
• FERC Order 4/20/06
• Locational pricing
• Settlement discussions ongoing
• Anticipated implementation 6/1/07
• PJM simulations show pricing from $20/kw-yr to mid $30’s/kw-yr
New England
• Forward Capacity Market (FCM) scheduled to begin 12/1/06
• Transition period prices have been established
12/1/06 – 5/31/08 $36.60/kw-yr
6/1/08 – 5/31/09 $45.00/kw-yr
6/1/09 – 5/31/10 $49.20/kw-yr
• First auction scheduled in 2008 for 2010 delivery
10

12. PSE&G

13. Recognized as a Top Performing Utility
o.
ex C
Accomplishments
.
ic Co
Suss Passa
• Top quartile performance
Co.
n
Berge
N
continues
Co.
n
War re
W E
Co.
r is
Mo r
S
• Strong safety and reliability
.
x Co
Esse Co.
son
Hud
results
.
Co. n Co
n Unio
terdo
• Dedication to capital
H un
STATEN
ISLAND
investment program
.
t Co
er se
So m
.
Co
lesex
M idd
Issues
r Co.
Merce .
• Disappointing returns from
Co
outh
M onm
KEY:
COMBINED ELECTRIC & GAS TERRITORIES
ELECTRIC TERRITORY
gas business
GAS TERRITORY
0 10ml
1 2 3 4 5 6 7 8 9
• ROE: <4%
.
n Co
o. Ocea
to n C
• Re-establish constructive
ing
Bu r l
regulatory relations regarding
traditional utility matters
.
en Co
Camd
Co.
ester
G louc
12

14. PSE&G Regulatory Filings
Excess Depreciation Credit
• $64M annual credit expired December 31, 2005
• PSE&G filed 1Q 2006 actual results in June
• Decision was put on hold, pending merger review
• Expect discussions to resume with BPU shortly
Gas Base Rate Case
• $133M revenue increase requested
• Hearings held in July & August of this year
• Currently conducting settlement discussions
• Schedule calls for BPU decision late this year or early next year
13

15. PSEG Energy Holdings

16. PSEG Holdings: Providing Meaningful Earnings
• Approximately 95% of Global’s Earnings
come from US Generation and Latin
American Distribution assets
PSEG Texas Merchant
Generation
Resources
(2,000 MW)
• Continue strategic asset monetization
International
Generation
Other fully contracted
• Significant decapitalization: 2004-2006
US Generation
Latin American
• Recourse debt reduction: $917M
Distribution
• Return of capital & dividends: $1,309M
$2,226M
Projected Earnings Contribution
15

17. PSEG’s Business Outlook
• Improved performance and reliability of Nuclear Operations
• Enhanced electric marketplace
• Business risk improvements
16

18. Public Service Enterprise Group
17