EXHIBIT 5

                  Public Service Enterprise Group Incorporated
                         80 Park Plaza, Newark, NJ 07101
                               Tel: (973) 430-7000

                                  June 26, 2000

PSEG Energy Holdings Inc.
80 Park Plaza
Newark, NJ 07101

     RE: PSEG Energy Holdings Inc.

Ladies and Gentlemen:

      I  am  Associate  General  Counsel  of  Public  Service  Enterprise  Group
Incorporated  and in that  capacity  have acted as counsel for its  wholly-owned
subsidiary, PSEG Energy Holdings Inc., a New Jersey corporation (the "Company"),
in  connection  with the  Company's  preparation  and  filing of a  Registration
Statement  on Form S-4 (File  No.  333-95697),  filed  with the  Securities  and
Exchange  Commission  (the  "Commission")  under the  Securities Act of 1933, as
amended (the "Act") on January 28, 2000,  Amendment No. 1 thereto filed with the
Commission on April 12, 2000,  Amendment No. 2 thereto filed with the Commission
on May 26, 2000 and Amendment No. 3 thereto with which this letter is filed with
the Commission as Exhibit 5 (such  Registration  Statement,  as so amended,  the
"Registration  Statement")of  $400,000,000  aggregate  principal  amount  of 10%
Senior  Notes  due 2009  (the  "Exchange  Notes").  The  Notes  are to be issued
pursuant  to an exchange  offer (the  "Exchange  Offer") in exchange  for a like
principal  amount of the Company's  issued and  outstanding 10% Senior Notes due
2009 (the "Original  Notes") under an indenture dated as of October 8, 1999 (the
"Indenture")  between the Company and First Union  National Bank as Trustee (the
"Trustee").

      In  connection  with this  opinion,  I or member of my staff have examined
documents and records as I have deemed  necessary or  appropriate as a basis for
the opinions set forth  herein.  In such  examination,  I have assumed the legal
capacity  of  all  natural  persons,  the  genuineness  of all  signatures,  the
authenticity  of all documents  submitted to me as originals,  the conformity to
original documents of all documents  submitted to me as certified,  conformed or
photostatic  copies  and  the  authenticity  of the  originals  of  such  latter
documents.  In making such  examination  of  documents,  I have assumed that the
parties thereto,  other than the Company, had the power,  corporate or other, to
enter into and perform all obligations  thereunder and have also assumed the due
authorization  by all  requisite  action  corporate or other and  execution  and
delivery by such parties of such  documents and the validity and binding  effect
thereof on such parties.

      My opinions  set forth  herein are limited to the laws of the State of New
Jersey and federal laws of the United States.  I do not express any opinion with
respect to the law of any other  jurisdiction or the securities or blue sky laws
of any state.

      Based  upon  and   subject   to  the   foregoing   and  the   limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that when (a) the Exchange  Notes have been duly executed and  authenticated  in
accordance  with the terms of the Indenture and delivered upon  consummation  of
the Exchange Offer against receipt of the Original Notes surrendered in exchange
therefore  in  accordance  with the  terms  of the  Exchange  Offer  and (b) the
Registration  Statement  shall  have  become  effective  under  the  Act and the
Indenture  shall have been qualified  under the Trust  Indenture Act of 1939, as
amended, the Exchange Notes will constitute valid and binding obligations of the
Company  entitled to


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the benefits of the Indenture and enforceable  against the Company in accordance
with their terms, except to the extent the enforcement thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or  hereinafter in effect  relating to creditors'  rights
generally  and  (ii)  general   principles  of  equity  (regardless  of  whether
enforcement is considered in a proceeding at law or in equity).

      I hereby  consent  to the  filing of this  opinion  as an  exhibit  to the
Registration  Statement. I also consent to the reference to me under the caption
"Legal Opinions" in the Registration Statement.

                                                              Very truly yours,

                                                              /s/ James T. Foran
                                                              ------------------
                                                              James T. Foran