SECURITIES AND EXCHANGE COMMISION
                             WASHINGTON, D.C. 20549

                                    FORM T-1

       STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

     CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT
                              TO SECTION 305(b)(2)

                            FIRST UNION NATIONAL BANK
               (Exact Name of Trustee as Specified in its Charter)

                                   22-1147033
                      (I.R.S. Employer Identification No.)

                 2 FIRST UNION CENTER, CHARLOTTE, NORTH CAROLINA
                    (Address of Principal Executive Offices)

                                   28288-0201
                                   (Zip Code)

                            FIRST UNION NATIONAL BANK
                                 21 SOUTH STREET
                              MORRISTOWN, NJ 07960
                    ATTENTION: CORPORATE TRUST ADMINISTRATION
                                 (973) 898-7166
            (Name, address and telephone number of Agent for Service)

                            PSEG ENERGY HOLDING INC.
               (Exact Name of Obligor as Specified in its Charter)

                                   NEW JERSEY
         (State or other jurisdiction of Incorporation or Organization)

                                   22-2625848
                      (I.R.S. Employer Identification No.)


                        80 PARK PLAZA, NEWARK, NEW JERSEY
                    (Address of Principal Executive Offices)

                                      07101
                                   (Zip Code)

                            10% SENIOR NOTES DUE 2009
                         (Title of Indenture Securities)


<PAGE>



1. General information.

Furnish the following information as to the trustee:

a) Name and address of each  examining or  supervisory  authority to which it is
subject:

      Comptroller of the Currency
      United States Department of the Treasury
      Washington, D.C.  20219

      Federal Reserve Bank
      Richmond, Virginia 23219

      Federal Deposit Insurance Corporation
      Washington, D.C.  20429

b) Whether it is authorized to exercise corporate trust powers.

      Yes.


2. Affiliations with obligor.

      If  the  obligor  is an  affiliate  of the  trustee,  describe  each  such
affiliation.

      None.


3. Voting securities of the trustee.

      Furnish the following information as to each class of voting securities of
the trustee:


                             As of December 31, 1999

--------------------------------------------------------------------------------
 Col. A                Col. B                 Col. C               Col. D
--------------------------------------------------------------------------------

 Title of Class        Amount Outstanding
--------------------------------------------------------------------------------
Not Applicable

4. Trusteeships under other indentures.

   If the trustee is a trustee  under  another  indenture  under which any other
securities,   or  certificates  of  interest  or   participation  in  any  other
securities, of the obligor are outstanding, furnish the following information:

      (a) Title of the securities outstanding under each such other indenture.

          Not Applicable

      (b) A brief  statement  of the facts  relied upon as a basis for the claim
that no conflicting  interest within the meaning of Section 310(b)(1) of the Act
arises as a result of the trusteeship under any


<PAGE>


such other indenture, including a statement as to how the indenture, including a
statement  as to how the  indenture  securities  will rank as compared  with the
securities issued under such other indenture.

          Not Applicable

5.  Interlocking  directorates  and  similar  relationships  with the obligor or
underwriters.

      If the  trustee  or any of the  directors  or  executive  officers  of the
trustee is a director, officer, partner, employee,  appointee, or representative
of the obligor or of any underwriter for the obligor,  identify each such person
having any such connection and state the nature of each such connection.

      Not applicable

6.  Voting securities of the trustee owned by the obligor or its officials.

      Furnish  the  following  information  as to the voting  securities  of the
trustee  owned  beneficially  by the obligor  and each  director,  partner,  and
executive officer of the obligor:


                             As of December 31, 1999

--------------------------------------------------------------------------------
Col. A            Col. B             Col. C            Col. D
--------------------------------------------------------------------------------

Name of Owner     Title of Class     Amount owned      Percentage of Voting
                                     Beneficially      Securities represented
                                                       by amount given in Col. C

--------------------------------------------------------------------------------
Not Applicable

7. Voting securities of the trustee owned by underwriters or their officials.

      Furnish  the  following  information  as to the voting  securities  of the
trustee  owned  beneficially  by each  underwriter  for  the  obligor  and  each
director, partner, and executive officer of each such underwriter:


                             As of December 31, 1999

--------------------------------------------------------------------------------
Col. A            Col. B             Col. C            Col. D
--------------------------------------------------------------------------------

Name of Owner     Title of Class     Amount owned      Percentage of Voting
                                     Beneficially      Securities represented
                                                       by amount given in Col. C

--------------------------------------------------------------------------------
Not Applicable

8. Securities of the obligor owned or held by the trustee.

      Furnish the  following  information  as to securities of the obligor owned
beneficially  or held as collateral  security for  obligations in default by the
trustee:

<PAGE>


                             As of December 31, 1999
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Col. A            Col. B                    Col. C                        Col. D
---------------------------------------------------------------------------------------------

<S>               <C>                       <C>                           <C>
Title of Class    Whether the securities    Amount owned beneficially     Percentage of class
                  Are voting or             or held as collateral         represented by
                  nonvoting Securities      Security for oblications      amount given in
                                            In default by Trustee         Col. C

---------------------------------------------------------------------------------------------
</TABLE>

Not Applicable

9. Securities of underwriters owned or held by the trustee.

      If the trustee  owns  beneficially  or holds as  collateral  security  for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee:


                             As of December 31, 1999
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Col. A            Col. B                  Col. C                         Col. D
--------------------------------------------------------------------------------------------

<S>               <C>                     <C>                            <C>
Name of Issuer    Amount Outstanding      Amount owned beneficially      Percentage of class
And Title of                              or held as collateral          represented by
Class                                     security for oblications       amount given in
                                          In default by Trustee          Col. C

--------------------------------------------------------------------------------------------
</TABLE>

Not Applicable

10.  Ownership  or  holdings  by the  trustee  of voting  securities  of certain
affiliates or security holders of the obligor.

      If the trustee  owns  beneficially  or holds as  collateral  security  for
obligations  in default  voting  securities of a person who, to the knowledge of
the  trustee  (1) owns 10 percent or more of the voting  stock of the obligor or
(2) is an  affiliate,  other than a  subsidiary,  of the  obligor,  furnish  the
following information as to the voting securities of such person:


                             As of December 31, 1999
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
Col. A            Col. B                Col. C                      Col. D
---------------------------------------------------------------------------------------

<S>               <C>                   <C>                         <C>
Name of Issuer    Amount Outstanding    Amount owned beneficially   Percentage of class
And Title of                            or held as collateral       represented by
Class                                   security for oblications    amount given in
                                        In default by Trustee       Col. C

---------------------------------------------------------------------------------------
</TABLE>

Not Applicable

11.  Ownership or holdings by the trustee of any  securities  of a person owning
50 percent or more of the voting securities of the obligor.

<PAGE>


      If the trustee  owns  beneficially  or holds as  collateral  security  for
obligations  in default any  securities of a person who, to the knowledge of the
trustee,  owns 50  percent  or more of the  voting  securities  of the  obligor,
furnish the following  information as to each class of securities of such person
any of which are so owned or held by the trustee:


                             As of December 31, 1999
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
Col. A           Col. B                 Col. C                       Col. D
----------------------------------------------------------------------------------------

<S>              <C>                    <C>                          <C>
Name of Issuer   Amount Outstanding     Amount owned beneficially    Percentage of class
And Title of                            or held as collateral        represented by
Class                                   security for oblications     amount given in
                                        In default by Trustee        Col. C

----------------------------------------------------------------------------------------
</TABLE>

Not Applicable

12. Indebtedness of the obligor to the trustee.

      Except as noted in the  instructions,  if the  obligor is  indebted to the
trustee, furnish the following information:


                             As of December 31, 1999

--------------------------------------------------------------------------------
Col. A              Col. B                    Col. C                Col. D
--------------------------------------------------------------------------------

Nature of           Amount Outstanding        Date due
indebtedness

--------------------------------------------------------------------------------
Not Applicable

13. Defaults by the obligor.

      (a) State  whether  there is or has been a  default  with  respect  to the
securities under this indenture. Explain the nature of any such default.

      None.

      (b) If the trustee is a trustee  under another  indenture  under which any
other  securities,  or  certificates of interest or  participation  in any other
securities,  of the  obligor  are  outstanding,  or is trustee for more than one
outstanding  series of securities  under the indenture,  state whether there has
been a default  under any such  indenture or series,  identify the  indenture or
series affected, and explain the nature of any such default.

      None


<PAGE>

14. Affiliations with the underwriters.

      If any  underwriter  is an affiliate of the  trustee,  describe  each such
affiliation.

      Not applicable

15. Foreign trustee.

      Identify the order or rule  pursuant to which the trustee is authorized to
act as sole trustee under indentures qualified or to be qualified under the Act.

      Not applicable - trustee is a national banking association organized under
the laws of the United States.

16.   List of Exhibits.

      List below all exhibits filed as part of this statement of eligibility.

__    1. Copy of Articles of Association of the trustee as now in effect.*

__    2. Copy of the  Certificate of the Comptroller of the Currency dated March
         4,  1998,   evidencing   the  authority  of  the  trustee  to  transact
         business.**

__    3. Copy of the  Certification  of  Fiduciary  Powers of the trustee by the
         Office of the Comptroller of the Currency dated April 7, 1999.***

__    4. Copy of existing by-laws of the trustee.***

__    5. -Not Applicable.

X     6. Consent of the trustee required by Section 321(b) of the Act.

X     7. Copy of report of  condition of the trustee at the close of business on
         September  30,  1999,  published  pursuant to the  requirements  of its
         supervising authority.

__    8. Copy of any order  pursuant to which the foreign  trustee is authorized
         to act as sole trustee  under  indentures  qualified or to be qualified
         under the Act.
         - Not Applicable

__    9. Consent to service of process required of foreign trustees  pursuant to
         Rule 10a-4 under the Act.
         - Not Applicable

-----------------
*     Previously filed with the Securities and Exchange  Commission on March 16,
      1998 as an Exhibit to Form T-1 in connection with  Registration  Statement
      Number 333-47985,

**    and filed with the

<PAGE>


      Securities and Exchange  Commission on July 15, 1998 as an Exhibit to Form
      T-1 in connection with Registration  Statement Number  333-59145,

***   and filed with the Securities  and Exchange  Commission on May 20, 1999 in
      connection with  Registration  Statement Number 333-78927 and incorporated
      herein by reference.

                                      NOTE

            The   trustee   disclaims   responsibility   for  the   accuracy  or
      completeness of information contained in this Statement of Eligibility and
      Qualification  not known to the trustee and not  obtainable  by it through
      reasonable  investigation and as to which information it has obtained from
      the  obligor  and  has  had to rely or  will  obtain  from  the  principal
      underwriters and will have to rely.

                                    SIGNATURE

            Pursuant to the requirements of the Trust Indenture Act of 1939, the
      trustee,  First  Union  National  Bank,  a  national  banking  association
      organized and existing under the laws of the United States of America, has
      duly caused this Statement of Eligibility and  Qualification  to be signed
      on its behalf by the undersigned,  thereunto duly  authorized,  all in the
      Town of  Morristown  and State of New Jersey,  on the 10th day of January,
      2000.

                                       FIRST UNION NATIONAL BANK



      (Corporate Seal)                 By: /s/ Frank Gallagher
                                          ----------------------
                                           Frank Gallagher
                                           Vice President


<PAGE>



                                                                     EXHIBIT T-6

                               CONSENT OF TRUSTEE

      Pursuant to the  requirements of Section 321(b) of the Trust Indenture Act
of 1939, and in connection  with the proposed issue of PSEG Energy Holdings Inc.
Debt  Securities,  First Union  National Bank,  hereby  consents that reports of
examinations  by Federal,  State,  Territorial  or District  authorities  may be
furnished by such  authorities to the Securities  and Exchange  Commission  upon
request therefor.



                                                    FIRST UNION NATIONAL BANK


                                                    By: /s/ Frank Gallagher
                                                       ------------------------
                                                         Frank Gallagher
                                                         Vice President




Morristown, N.J.

January 10, 2000























<PAGE>


                          REPORT OF CONDITION                          EXHIBIT 7

Consolidating  domestic  and foreign  subsidiaries  of the First Union  National
Bank, Charlotte,  North Carolina, at the close of business on September 30, 1999
published in response to call made by Comptroller  of the Currency,  under title
12, United States Code,  Section 161.  Charter  Number 22693  Comptroller of the
Currency.

Statement of Resources and Liabilities


                                     ASSETS

                                                           Thousand of Dollars
                                                           -------------------

Cash and balance due from depository institutions:
  Noninterest-bearing balances and currency and coin .........    8,946,000
  Interest-bearing balances ..................................      266,000
Securities ...................................................   //////////
  Held-to-maturity securities ................................    1,644,000
  Available-for-sale securities ..............................   47,356,000
Federal funds sold and securities purchases to resell ........    2,856,000
Loans and lease financing receivables:
  Loans and leases, net of unearned income....................  132,839,000
  LESS: Allowance for loan and lease losses ..................    1,743,000
  LESS: Allocated transfer risk reserve ......................            0
  Loans and leases, net of unearned income, allowance, and
  reserve ....................................................  131,096,000
Trading assets ...............................................    8,333,000
Premises and fixed assets (including capitalized leases) .....    3,070,000
Other real estate owned ......................................      134,000
Investment in unconsolidated subsidiaries and associated .....   //////////
companies ....................................................      262,000
Customer's liability to this bank on acceptances outstanding..      807,000
Intangible assets ............................................    5,115,000
Other assets .................................................   10,789,000
Total assets .................................................  220,674,000

                                   LIABILITIES
Deposits:
     In domestic offices .....................................  129,621,000
       Noninterest-bearing ...................................   21,341,000
       Interest-bearing ......................................  108,280,000
     In foreign offices, Edge and Agreement subsidiaries,
     and IBFs ................................................    9,838,000
       Noninterest-bearing ...................................      466,000
       Interest-bearing ......................................    9,372,000
Federal funds purchased and securities sold under agreements
 to repurchase ...............................................   23,796,000
Demand notes issued to the U.S. Treasury .....................      782,000
Trading liabilities ..........................................    4,984,000
Other borrowed money .........................................   //////////
    With a remaining maturity of one year or less ............   14,643,000
    With a remaining maturity of more than 1 year thru 3 yrs .    5,639,000
    With a maturity of more than three years .................    2,872,000
Not applicable ...............................................    /////////
Bank's liability on acceptances executed and outstanding .....      807,000
Subordinated notes and debentures ............................    4,269,000
Other liabilities ............................................    6,515,000
Total liabilities ............................................  203,766,000
Not applicable ...............................................  ///////////


<PAGE>

                                 EQUITY CAPITAL

Perpetual preferred stock and related surplus ................      161,000
Common Stock .................................................      455,000
Surplus ......................................................   13,306,000
Undivided profits and capital reserves .......................    3,553,000
Net unrealized holding gains (losses) on available-for-sale
 securities ..................................................     (562,000)
Accumulated net gains (loses on cash flow hedges .............            0
Cumulative foreign currency translation adjustments ..........       (5,000)
Total equity capital .........................................   16,908,000
Total liabilities and equity capital .........................  220,674,000