EXHIBIT 25-5
                                  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)

                                   ----------

                            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)

                     Public Service Electric and Gas Company

                                (Name of Obligor)

                   New Jersey                            22-2625848
             (State of Incorporation)                 (I.R.S. Employer
                                                      Identification No.)

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

                         Guarantee for Capital Trust III

                         (Title of Indenture Securities)


<PAGE>

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:

                             As of December 15, 2001
--------------------------------------------------------------------------------
           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


                                       1
<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.

                             As of December 15, 2001
--------------------------------------------------------------------------------
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.

                             As of December 15, 2001
--------------------------------------------------------------------------------
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.

                             As of December 15, 2001
--------------------------------------------------------------------------------
Col. A          Col. B           Col. C                      Col. D.
--------------------------------------------------------------------------------
Name of Owner   Whether the      Amount owned beneficially   Percentage of class
                Securities are   or held as collateral       represented by
                Voting or        security for obligations    amount given in
                nonvoting        in default by Trustee       Col. C.
                Securities
--------------------------------------------------------------------------------
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.

                             As of December 15, 2001
--------------------------------------------------------------------------------
Col. A          Col. B       Col. C                          Col. D.
--------------------------------------------------------------------------------
Name of         Amount       Amount owned beneficially       Percentage of class
Issuer and      outstanding  or held as collateral security  represented by
Title of class               for obligations in default      amount given in
                             By Trustee                      Col. C
--------------------------------------------------------------------------------
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.

                             As of December 15, 2001
--------------------------------------------------------------------------------
Col. A.         Col. B.      Col. C.                         Col. D.

Name of Issuer  Amount       Amount owned beneficially       Percentage of class
And title of    outstanding  or held as collateral security  represented by
class                        For obligations in default      amount given in
                             By Trustee                      Col. C
--------------------------------------------------------------------------------
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.

                             As of December 15, 2001
--------------------------------------------------------------------------------
Col. A.         Col. B.      Col. C.                    Col. D.
--------------------------------------------------------------------------------
Name of Issuer  Amount       Amount owned beneficially  Percentage of class
And title of    outstanding  or held as collateral      represented by amount
class                        security For obligations   given in Col. C
                             in default By Trustee
--------------------------------------------------------------------------------
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:

                            As of December 15, 2001
--------------------------------------------------------------------------------
Col. A.                            Col. B.                         Col. C.
--------------------------------------------------------------------------------
Nature of indebtedness             Amount outstanding              Date due
--------------------------------------------------------------------------------
Not Applicable


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<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

*Exhibits  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 333-47985).

**Exhibits  thus  designated  have 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 333-49145).

      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.


                                       4
<PAGE>

                                    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,  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 15th
day of December 2001.

                                                       First Union National Bank

                                                       (Trustee)

(CORPORATE SEAL)

                                                       By: /s/ Frank Gallagher
                                                          ---------------------
                                                             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 Public Service  Electric
and Gas Company,  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 therefor.

                                                       FIRST UNION NATIONAL BANK

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

Morristown, NJ
December 15, 2001


                                       6
<PAGE>

                                                                     EXHIBIT T-7

                               REPORT OF CONDITION

      Consolidating  domestic  and  foreign  subsidiaries  of  the  First  Union
National  Bank,  at the close of business on September  30,  2001,  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 .............     7,888,000
  Interest-bearing balances ......................................     2,284,000
Securities .......................................................     /////////
  Hold-to-maturity securities ....................................             0
  Available-for-sale securities ..................................    47,603,000
Federal funds sold and securities purchased under agreements .....    //////////
         to resell                                                     5,676,000
Loans and lease financing receivables:
         Loan and leases held for sale ...........................     6,310,000
         Loan and leases, net of unearned income .................   120,035,000
         LESS: Allowance for loan and lease losses ...............     2,229,000
         LESS: Allocated transfer risk reserve ...................             0
         Loans and leases, net of unearned income, allowance,
         and reserve .............................................   117,806,000
Trading Assets ...................................................    20,353,000
Premises and fixed assets (including capitalized leases) .........     2,718,000
Other real estate owned ..........................................        94,000
Investment in unconsolidated subsidiaries and associated .........    //////////
companies ........................................................       460,000
Customer's liability to this bank on acceptances outstanding .....       771,000
Intangible assets
         Goodwill ................................................     2,295,000
         Other intangible Assets .................................       336,000
Other assets .....................................................    17,601,000
                          Total assets ...........................   232,195,000

                                   LIABILITIES

Deposits:
         In domestic offices .....................................   128,183,000
           Noninterest-bearing ...................................    18,392,000
           Interest-bearing ......................................   109,791,000
         In foreign offices, Edge and Agreement subsidiaries,
         and IBFs ................................................    12,577,000
           Noninterest-bearing ...................................        55,000
           Interest-bearing ......................................    12,522,000
Federal funds purchased and securities sold under agreements
         to repurchase                                                23,042,000
Trading liabilities ..............................................    14,604,000
Other borrowed money: ............................................    19,566,000
Bank's liability on acceptances executed and outstanding .........       773,000
Subordinated notes and debentures ................................     5,993,000
Other liabilities ................................................    10,413,000
Total liabilities ................................................   215,151,000
Minority Interest in consolidated subsidiaries ...................       965,000

                                 EQUITY CAPITAL

Perpetual preferred stock and related surplus ....................       161,000
Common Stock .....................................................       455,000
Surplus ..........................................................    13,302,000
Retained Earnings ................................................     1,206,000
Accumulated other comprehensive income ...........................       955,000
Other Equity Capital components ..................................             0
Total equity capital .............................................    16,079,000
Total liabilities and equity capital .............................   232,195,000