Exhibit 25-6

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM T-1
                            STATEMENT OF ELIGIBILITY
                      UNDER THE TRUST INDENTURE ACT OF 1939
                 OF A CORPORATION DESIGNATED TO ACT AS A TRUSTEE

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

                       WACHOVIA BANK, NATIONAL ASSOCIATION
                      (Formerly First Union National Bank)
                                (Name of Trustee)

                                                                 22-1147033
(Jurisdiction of Incorporation or                             (I.R.S. Employer
Organization if not a U.S. National Bank)                    Identification No.)

301 South College Street, Charlotte, North Carolina              28288-0630
     (Address of Principal Executive Offices)                    (Zip Code)

                             PSEG FUNDING TRUST III
                                (Name of Obligor)

                DELAWARE                                42-6629083
         (State of Incorporation)                     (I.R.S. Employer
                                                     Identification No.)

     80 Park Plaza, Newark, New Jersey                    07101
 (Address of Principal Executive Offices)               (Zip Code)

                           Preferred Trust Securities
                         (Title of Indenture Securities)


<PAGE>

                                     GENERAL

Item 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, Washington, D.C.
            Board of Governors of the Federal Reserve System, Richmond, VA 23219
            Federal Deposit Insurance Corporation, Washington, D.C.

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

                  The Trustee is authorized to exercise corporate trust powers.

Item 2. Affiliations with Obligor.

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

      None.

Item 3. Voting Securities of the Trustee.

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

--------------------------------------------------------------------------------
            Col. A                           Col. B

--------------------------------------------------------------------------------
            Title of Class                   Amount Outstanding

--------------------------------------------------------------------------------

Item 4. Trusteeship 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 such other indenture, including
a statement as to how the indenture securities will rank as compared with the
securities issued under such other indenture.

      Not Applicable.

Item 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


<PAGE>

Item 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.

--------------------------------------------------------------------------------
      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

Item 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.

--------------------------------------------------------------------------------
      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

Item 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 the obligations in default by
the trustee.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
      Col. A          Col. B                 Col. C                        Col. D.
----------------------------------------------------------------------------------------------
<S>                   <C>                    <C>                           <C>
      Name of Owner   Whether the            Amount owned beneficially     Percentage of class
                      Securities are         or held as collateral         represented by
                      Voting or nonvoting    security for obligations      amount given in
                      Securities             in default by Trustee         Col. C.
----------------------------------------------------------------------------------------------
</TABLE>
      Not Applicable

Item 9. Securities of the 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.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
      Col. A           Col. B                 Col. C                           Col. D.
-----------------------------------------------------------------------------------------------------
<S>                    <C>                    <C>                              <C>
      Name of          Amount outstanding     Amount owned beneficially        Percentage of class
      Issuer and                              or held as collateral security   represented by
      Title of class                          for obligations in default       amount given in Col. C
                                              By Trustee
-----------------------------------------------------------------------------------------------------
</TABLE>
      Not Applicable


                                       2
<PAGE>

Item 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 securities 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.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
      Col. A           Col. B                 Col. C                           Col. D.
-----------------------------------------------------------------------------------------------------
<S>                    <C>                    <C>                              <C>
      Name of          Amount outstanding     Amount owned beneficially        Percentage of class
      Issuer and                              or held as collateral security   represented by
      Title of class                          for obligations in default       amount given in Col. C
                                              By Trustee
-----------------------------------------------------------------------------------------------------
</TABLE>
      Not Applicable

Item 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.

      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.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
      Col. A           Col. B                 Col. C                           Col. D.
-----------------------------------------------------------------------------------------------------
<S>                    <C>                    <C>                              <C>
      Name of          Amount outstanding     Amount owned beneficially        Percentage of class
      Issuer and                              or held as collateral security   represented by
      Title of class                          for obligations in default       amount given in Col. C
                                              By Trustee

-----------------------------------------------------------------------------------------------------
</TABLE>
      Not Applicable

Item 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:

--------------------------------------------------------------------------------
      Col. A.                          Col. B.                    Col. C.
      Nature of indebtedness           Amount outstanding         Date due

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


                                       3
<PAGE>

Item 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 default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.

      None

Item 14. Affiliations with the Underwriters.

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

      Not Applicable

Item 15. Foreign Trustee.

      Identify the order or rule 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

Item 16. Lists of Exhibits.

      1* -Copy of Articles of Association of the Trustee as now in effect.
      2  -No certificate of authority of the Trustee to commence business is
          furnished since this authority is contained in the Articles of
          Association of the Trustee.
      3* -Copy of the authorization of the Trustee to exercise corporate trust
          powers.
      4* -Copy of the existing By-Laws of the Trustee, as now in effect.
      5  -Not applicable.
      6  -The consent of the Trustee required by Section 321(b) of the Act.
      7  -A copy of the latest report of Condition of the Trustee published
          pursuant to the law or the requirements of its supervising or
          examining authority.
      8  -Not Applicable
      9  -Not Applicable

*Exhibit thus designated has heretofore been filed with the Securities and
Exchange Commission, have not been amended since filing and are incorporated
herein by reference (see Exhibit T-1 Registration Number 333-86372).

      In answering any item in this statement of eligibility and qualification
which relates to matters peculiarly within the knowledge of the obligor or of
its directors or officers, or an underwriter for the obligor, the undersigned,
First Union National Bank, has relied upon information furnished to it by the
obligor or such underwriter.


                                       10
<PAGE>

                                    SIGNATURE

      Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Wachovia Bank National Association (formerly First Union National
Bank), organized and existing under the laws of the United States, has duly
caused this Statement of Eligibility 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 20th day of November, 2002.

                                            Wachovia Bank, National Association
                                            (formerly First Union National Bank)

                                            (Trustee)

(CORPORATE SEAL)

                                                        By: /s/ Melissa Matthews
                                                            --------------------
                                                                Vice President


                                        5
<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 Funding Trust III, we
hereby consent 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 therefore.

                                            WACHOVIA BANK, NATIONAL ASSOCIATION
                                            (formerly FIRST UNION NATIONAL BANK)

                                                        By: /s/ Melissa Matthews
                                                            --------------------
                                                                Vice President

Morristown, NJ
November 20, 2002


<PAGE>

                                   EXHIBIT T-7

                               REPORT OF CONDITION

Consolidating domestic and foreign subsidiaries of the Wachovia Bank, National
Association, at the close of business on September 30, 2002, 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 ................ 13,236,000
  Interest-bearing balances .........................................    688,000
Securities .......................................................... /////////
  Hold-to-maturity securities .......................................          0
  Available-for-sale securities ..................................... 68,147,000
Federal funds sold and securities purchased under agreements ........ //////////
         to resell .................................................. //////////
   Federal funds sold in domestic offices ...........................    371,000
   Securities purchased under agreements to resell ..................  3,487,000
Loans and lease financing receivables:
         Loan and leases held for sale ..............................  6,772,000
         Loan and leases, net of unearned income ....................156,995,000
         LESS: Allowance for loan and lease losses ..................  2,823,000
         LESS: Allocated transfer risk reserve ......................          0
         Loans and leases, net of unearned income,
         allowance, and reserve .....................................154,172,000
Trading Assets ...................................................... 26,499,000
Premises and fixed assets (including capitalized leases) ............  3,186,000
Other real estate owned .............................................    109,000
Investment in unconsolidated subsidiaries and associated ............ //////////
companies ...........................................................    560,000
Customer's liability to this bank on acceptances outstanding ........  1,080,000
Intangible assets
         Goodwill ...................................................  9,421,000
Other intangible Assets .............................................  1,869,000
Other assets ........................................................ 22,339,000
                                    Total assets ....................311,936,000

LIABILITIES

Deposits:
         In domestic offices ........................................180,446,000
           Noninterest-bearing ...................................... 32,701,000
           Interest-bearing .........................................147,745,000
         In foreign offices, Edge and Agreement subsidiaries,
         and IBFs ................................................... 14,915,000
           Noninterest-bearing ......................................     58,000
           Interest-bearing ......................................... 14,857,000
Federal funds purchased and securities sold under agreements
         to repurchase Federal funds purchased in
         domestic offices ...........................................  3,613,000
         Securities sold under agreements to repurchase ............. 19,850,000
Trading liabilities ................................................. 19,670,000
Other borrowed money (includes mortgage indebtedness and
Obligations under capitalized leases) (from Schedule RC-M) .......... 18,365,000
Bank's liability on acceptances executed and outstanding ............  1,093,000
Subordinated notes and debentures ...................................  8,615,000
Other liabilities ................................................... 12,971,000
Total liabilities ...................................................279,538,000
Minority Interest in consolidated subsidiaries ......................    859,000

EQUITY CAPITAL

Perpetual preferred stock and related surplus .......................          0
Common Stock ........................................................    455,000
Surplus ............................................................. 24,930,000
Retained Earnings ...................................................  4,071,000
Accumulated other comprehensive income ..............................  2,083,000
Other Equity Capital components .....................................          0
Total equity capital ................................................ 31,539,000
Total liabilities and equity capital ................................311,936,000