UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

FORM 10Q

|            |  |                                                               |  |                   
|----------- |  | ------------------------------------------------------------- |  | ------------------
|(Mark One)  |  |                                                               |  |                   
|[X]         |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR                    |  |                   
|            |  | 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                  |  |                   
|            |  | For the quarterly period ended September 30, 2008             |  |                   
|           
|            |  | OR                                                            |  |                   
|           
|[   ]       |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR                   |  |                   
|            |  | 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                  |  |                   
|            |  | For the transition period from______________ to______________ |  |                   
|            |  |                                                               |  |                   
|            |  |                                                               |  |                   
|Commission  |  | Registrant, State of Incorporation,                           |  | I.R.S. Employer   
|File Number |  | Address, and Telephone Number                                 |  | Identification No.
|333-127545  |  | PSE&G Transition Funding II LLC                               |  | 55-0628725        
|            |  | (A Delaware limited liability company)                        |  |                   
|            |  | 80 Park Plaza  T4D                                           |  |                   
|            |  | P.O. Box 1171                                                 |  |                   
|            |  | Newark, New Jersey 07101-1171                                 |  |                   
|            |  | 973 297-2227                                                  |  |                   
|            |  | http://www.pseg.com                                           |  |                   

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X    No

Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

|                        |                   |                         |                          
|----------------------- | ----------------- | ----------------------- | -------------------------
|Large accelerated filer | Accelerated filer | Non-accelerated filer X | Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes     No X

Registrant is a wholly owned subsidiary of Public Service Electric and Gas Company.

Registrant meets the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q and is filing this Form 10-Q with the reduced disclosure format authorized by General Instruction H.





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TABLE OF CONTENTS

|                              |  |                                                                                       |  |     
|----------------------------- |  | ------------------------------------------------------------------------------------- |  | ----
|                              |  |                                                                                       |  | PAGE
|FORWARD-LOOKING STATEMENTS    |  | ii                                                                                   
|                              |  |                                                                                      
|PART I. FINANCIAL INFORMATION |  |                                                                                      
|                              |  |                                                                                      
|Item 1.                       |  | Condensed Financial Statements                                                        |  | 1   
|                              |  | Notes to Condensed Financial Statements                                               |  |     
|                              |  | Note 1. Organization and Basis of Presentation                                        |  | 4   
|                              |  | Note 2. The Bonds                                                                     |  | 5   
|                              |  | Note 3. Significant Agreements and Related Party Transactions                         |  | 5   
|                              |  |                                                                                       |  |     
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 6   
|                              |  | Results of Operations                                                                 |  | 6   
|                              |  | Liquidity and Capital Resources                                                       |  | 7   
|                              |  |                                                                                       |  |     
|Item 3.                       |  | Qualitative and Quantitative Disclosures About Market Risk                            |  | 7   
|                              |  |                                                                                       |  |     
|Item 4.                       |  | Controls and Procedures                                                               |  | 7   
|                              |  |                                                                                       |  |     
|PART II. OTHER INFORMATION    |  |                                                                                      
|                              |  |                                                                                       |  |     
|Item 1.                       |  | Legal Proceedings                                                                     |  | 8   
|                              |  |                                                                                       |  |     
|Item 6.                       |  | Exhibits                                                                              |  | 8   
|                              |  |                                                                                      
|Signature                     |  | 9                                                                                    

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FORWARD-LOOKING STATEMENTS

Except for the historical information contained herein, certain of the matters discussed in this report constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such statements are based on managements beliefs as well as assumptions made by and
information currently available to management. When used herein, the words, anticipate, intend, estimate, believe, expect, plan, potential, variations of such words
and similar expressions are intended to identify forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The following
review of factors should not be construed as exhaustive.

In addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements, factors that could cause actual results to differ materially from those contemplated in any
forward-looking statements include, among others, the following: state and federal legal or regulatory developments; national or regional economic conditions; market demand and prices for energy; customer conservation; distributed generation
technology; weather variations affecting customer energy usage; the effect of continued electric industry restructuring; operating performance of Public Service Electric and Gas Companys facilities and third party suppliers; and the payment
patterns of customers including the rate of delinquencies.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PSE&G TRANSITION FUNDING II LLCCONDENSED STATEMENTS OF OPERATIONS(Thousands of Dollars)(Unaudited)

|                                             |  |   |                        |   |  |   |                           |   |  |   |        |   |  |   |        |  
|-------------------------------------------- |  | - | ---------------------- | - |  | - | ------------------------- | - |  | - | ------ | - |  | - | ------ | -
|                                             |  |   | For the Quarters Ended |   |  |   | For the Nine Months Ended |  
|                                             |  |   | September 30,          |   |  |   | September 30,             |  
|                                             |  |   | 2008                   |   |  |   | 2007                      |   |  |   | 2008   |   |  |   | 2007   |  
|OPERATING REVENUES                           |  | $ | 3,802                  |   |  | $ | 3,848                     |   |  | $ | 10,166 |   |  | $ | 10,286 |  
|OPERATING EXPENSES                           |  |   |                        |   |  |   |                           |   |  |   |        |   |  |   |        |  
|Amortization of Bondable Transition Property |  |   | 2,908                  |   |  |   | 2,812                     |   |  |   | 7,328  |   |  |   | 7,157  |  
|Servicing and Administrative Fees            |  |   | 12                     |   |  |   | 62                        |   |  |   | 108    |   |  |   | 157    |  
|Total Operating Expenses                     |  |   | 2,920                  |   |  |   | 2,874                     |   |  |   | 7,436  |   |  |   | 7,314  |  
|OPERATING INCOME                             |  |   | 882                    |   |  |   | 974                       |   |  |   | 2,730  |   |  |   | 2,972  |  
|Interest Income                              |  |   | 9                      |   |  |   | 32                        |   |  |   | 52     |   |  |   | 129    |  
|Interest Expense                             |  |   | (888                   | ) |  |   | (998                      | ) |  |   | (2,771 | ) |  |   | (3,079 | )
|NET INCOME                                   |  | $ | 3                      |   |  | $ | 8                         |   |  | $ | 11     |   |  | $ | 22     |  

See Notes to Condensed Financial Statements

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PSE&G TRANSITION FUNDING II LLCCONDENSED BALANCE SHEETS(Thousands of Dollars)(Unaudited)

|                                      |  |   |               |  |   |             
|------------------------------------- |  | - | ------------- |  | - | ------------
|                                      |  |   | September 30, |  |   | December 31,
|                                      |  |   | 2008          |  |   | 2007        
|ASSETS                                |  |   |               |  |   |             
|Current Assets:                       |  |   |               |  |   |             
|Cash and Cash Equivalents             |  | $ | 70            |  | $ | 59          
|Receivable from Member                |  |   | 3,025         |  |   | 2,706       
|Restricted Funds                      |  |   | 3,606         |  |   | 348         
|Total Current Assets                  |  |   | 6,701         |  |   | 3,113       
|                                     
|Noncurrent Assets:                    |  |   |               |  |   |             
|Restricted Funds                      |  |   | 514           |  |   | 514         
|Bondable Transition Property          |  |   | 75,389        |  |   | 82,717      
|Total Noncurrent Assets               |  |   | 75,903        |  |   | 83,231      
|TOTAL ASSETS                          |  | $ | 82,604        |  | $ | 86,344      
|                                     
|LIABILITIES                           |  |   |               |  |   |             
|Current Liabilities:                  |  |   |               |  |   |             
|Current Portion of Long-Term Debt     |  | $ | 9,980         |  | $ | 9,801       
|Current Portion of Payable to Member  |  |   |              |  |   | 4           
|Accrued Interest                      |  |   | 1,047         |  |   | 168         
|Total Current Liabilities             |  |   | 11,027        |  |   | 9,973       
|                                     
|Long-Term Debt                        |  |   | 70,993        |  |   | 75,798      
|                                     
|TOTAL LIABILITIES                     |  |   | 82,020        |  |   | 85,771      
|                                     
|MEMBERS EQUITY                       |  |   |               |  |   |             
|Contributed Capital                   |  |   | 514           |  |   | 514         
|Retained Earnings                     |  |   | 70            |  |   | 59          
|Total Members Equity                 |  |   | 584           |  |   | 573         
|TOTAL LIABILITIES AND MEMBERS EQUITY |  | $ | 82,604        |  | $ | 86,344      

See Notes to Condensed Financial Statements

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PSE&G TRANSITION FUNDING II LLCCONDENSED STATEMENTS OF CASH FLOWS(Thousands of Dollars)(Unaudited)

|                                                       |  |   |                           |   |  |   |        |  
|------------------------------------------------------ |  | - | ------------------------- | - |  | - | ------ | -
|                                                       |  |   | For the Nine Months Ended |  
|                                                       |  |   | September 30,             |  
|                                                       |  |   | 2008                      |   |  |   | 2007   |  
|CASH FLOWS FROM OPERATING ACTIVITIES                   |  |   |                           |   |  |   |        |  
|Net Income                                             |  | $ | 11                        |   |  | $ | 22     |  
|Adjustments to Reconcile Net Income to Net Cash        |  |   |                           |   |  |   |        |  
|Flows from Operating Activities:                       |  |   |                           |   |  |   |        |  
|Amortization of Bondable Transition Property           |  |   | 7,328                     |   |  |   | 7,157  |  
|Net Changes in Certain Current Assets and Liabilities: |  |   |                           |   |  |   |        |  
|Receivable from Member                                 |  |   | (319                      | ) |  |   | (565   | )
|Restricted Funds                                       |  |   | (3,258                    | ) |  |   | (3,334 | )
|Accrued Expenses                                       |  |   | (4                        | ) |  |   | 49     |  
|Accrued Interest                                       |  |   | 879                       |   |  |   | 991    |  
|Net Cash Provided By Operating Activities              |  |   | 4,637                     |   |  |   | 4,320  |  
|                                                      
|CASH FLOWS FROM INVESTING ACTIVITIES                   |  |   |                          |   |  |   |       |  
|                                                      
|CASH FLOWS FROM FINANCING ACTIVITIES                   |  |   |                           |   |  |   |        |  
|Repayment of Long-Term Debt                            |  |   | (4,626                    | ) |  |   | (4,298 | )
|Net Cash Used in Financing Activities                  |  |   | (4,626                    | ) |  |   | (4,298 | )
|Increase in Cash and Cash Equivalents                  |  |   | 11                        |   |  |   | 22     |  
|Cash and Cash Equivalents at Beginning of Period       |  |   | 59                        |   |  |   | 31     |  
|Cash and Cash Equivalents at End of Period             |  | $ | 70                        |   |  | $ | 53     |  
|                                                      
|Interest Paid                                          |  | $ | 1,892                     |   |  | $ | 2,088  |  

See Notes to Condensed Financial Statements

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NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Organization and Basis of Presentation

Organization

Unless the context otherwise indicates, all references to Transition Funding II, we, us or our herein mean PSE&G Transition Funding II LLC, a
Delaware limited liability company located at 80 Park Plaza, Newark, New Jersey 07102.

We were formed under the laws of the State of Delaware on July 18, 2005 and operate pursuant to a limited liability company agreement with Public Service Electric and Gas Company (PSE&G) as
our sole member. PSE&G is an operating electric and gas utility and is a wholly owned subsidiary of Public Service Enterprise Group Incorporated (PSEG). We were organized for the sole purpose of purchasing and owning the BGS bondable transition
property (BTP) of PSE&G, issuing transition bonds (Bonds), pledging our interest in BTP and other collateral to a debt/security trustee (Trustee) to collateralize the Bonds, and performing activities that are necessary, suitable or convenient to
accomplish these purposes.

The Electric Discount and Energy Competition Act, enacted in the State of New Jersey in February 1999 and amended in September 2002 (Competition Act), authorizes electric public utilities, such
as PSE&G, to recover, among other costs, basic generation service (BGS) transition costs. BGS transition costs represent the amount by which a public utilitys cost of supplying BGS exceeds the net revenues received by the public utility
for providing such service during a four-year transition period ended July 31, 2003. BGS is a regulated electric generation service provided to any electric utility consumer that has not chosen an alternative power supplier. A public utility may
recover BGS transition costs through an irrevocable non-bypassable charge called a BGS transition bond charge (TBC) that is assessed on all retail electric consumers. The Competition Act permits special purpose entities formed by electric public
utilities to issue debt securities secured by the right to receive revenues arising from the TBC.

BTP represents the irrevocable right of PSE&G, or its successor or assignee, to collect a TBC pursuant to a bondable stranded cost rate order (Finance Order), which was issued on July 12,
2005 by the New Jersey Board of Public Utilities (BPU) in accordance with the Competition Act. These orders are a matter of public record and are available from the BPU. The Finance Order authorizes the TBC to be sufficient to recover the $102.7
million aggregate principal amount of Bonds, plus an amount sufficient to provide for any credit enhancement, to fund any reserves and to pay interest, redemption premiums, if any, servicing fees and other expenses relating to the Bonds.

Our organizational documents require us to operate in a manner so that we should not be consolidated in the bankruptcy estate of PSE&G in the event PSE&G becomes subject to a bankruptcy
proceeding.

Basis of Presentation

The condensed financial
statements included herein have been prepared pursuant to the rules and regulations
of the SEC for Quarterly Reports on Form 10-Q. Certain information and note disclosures
normally included in financial statements prepared in accordance with Generally
Accepted Accounting Principles in the United States of America (GAAP) have been
condensed or omitted pursuant to such rules and regulations. In the opinion of
management, the disclosures are adequate to make the information presented not
misleading. These condensed financial statements and notes to condensed financial
statements (Notes) should be read in conjunction with and update and supplement
matters discussed in our Annual Report on Form 10-K for the year ended December
31, 2007 and Quarterly Reports on Form 10-Q for the quarters ended March 31,
2008 and June 30, 2008.

The unaudited financial
information furnished herein reflects all adjustments, which are, in the opinion
of management, necessary to fairly state the results for the interim periods
presented. The year-end condensed balance sheet was derived from the audited
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 2007.

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NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Note 2. The Bonds

On September 23, 2005, we issued $102.7 million of Bonds in four classes with maturities ranging from two years to nine years. The net proceeds of the issuance were remitted to PSE&G as consideration for the BTP.

Under applicable law, the Bonds are not an obligation of PSE&G or secured by the assets of PSE&G, but rather the Bonds are only recourse to us and are collateralized on a pro rata basis by the BTP and our equity and assets. TBC collections are deposited at least monthly by PSE&G with the Trustee and are used to pay our expenses, to pay our debt service on the Bonds and to fund any credit enhancement for the Bonds. We have also pledged the capital contributed by PSE&G to secure the debt service requirements of the Bonds. The debt service requirements include a capital subaccount and a reserve subaccount, which are available to bond holders. Any amounts collateralizing the Bonds will be returned to PSE&G upon payment of the Bonds.

The significant terms of the Bonds issued by us, and the amounts outstanding, as of September 30, 2008 are as follows:

| |           |  |   |             |  |          |  |   |               |  |   |             |  |   |             |  |              |  |          | 
| | --------- |  | - | ----------- |  | -------- |  | - | ------------- |  | - | ----------- |  | - | ----------- |  | ------------ |  | -------- | 
| |           |  |   |             |  |          |  |   | Payments      |  |   |             |  |   |             |  |              |  |          | 
| |           |  |   | Initial     |  |          |  |   | Made On       |  |   | Current     |  |   | Noncurrent  |  | Final/       |  | Final    | 
| |           |  |   | Principal   |  | Interest |  |   | Bonds Through |  |   | Portion     |  |   | Portion     |  | Expected     |  | Maturity | 
| |           |  |   | Balance     |  | Rate     |  |   | September 30, |  |   | Outstanding |  |   | Outstanding |  | Payment Date |  | Date     | 
| |           |  |   |             |  |          |  |   | 2008          |  |   |             |  |   |             |  |              |  |          | 
| |           |  |   |             |  |          |  |   |               |  |   |             |  |   |             |  |              |  |          | 
| | Class A-1 |  | $ | 25,200,000  |  | 4.18%    |  | $ | 21,726,896    |  | $ | 3,473,104   |  | $ |            |  | 12/15/08     |  | 12/15/10 | 
| | Class A-2 |  |   | 35,000,000  |  | 4.34%    |  |   |              |  |   | 6,506,961   |  |   | 28,493,039  |  | 6/15/12      |  | 6/16/14  | 
| | Class A-3 |  |   | 20,000,000  |  | 4.49%    |  |   |              |  |   |            |  |   | 20,000,000  |  | 12/16/13     |  | 12/15/15 | 
| | Class A-4 |  |   | 22,500,000  |  | 4.57%    |  |   |              |  |   |            |  |   | 22,500,000  |  | 6/15/15      |  | 6/15/17  | 
| | Total     |  | $ | 102,700,000 |  |          |  | $ | 21,726,896    |  | $ | 9,980,065   |  | $ | 70,993,039  |  |              |  |          | 
| |           |  |   |             |  |          |  |   |               |  |   |             |  |   |             |  |              |  |          | 

Note 3. Significant Agreements and Related Party Transactions

Under the servicing agreement entered into by PSE&G and us, concurrently with the issuance of the Bonds, PSE&G, as servicer, is required to manage and administer our BTP and to collect the TBC on our behalf.Under the Finance Order, PSE&G withholds from the TBC collections an annual servicing fee equal to 0.05% of the initial balance of Bonds issued. In addition we pay miscellaneous operating expenses to PSE&G up to $100 thousand per quarter, administration fees up to $31 thousand per quarter and trustee fees up to $4 thousand per quarter. Servicing and administrative fees for the quarters ended September 30, 2008 and 2007 were approximately $12 thousand and $62 thousand respectively. Servicing and administrative fees for the nine months ended September 30, 2008 and 2007 were approximately $108 thousand and $157 thousand respectively.

As of September 30, 2008 and December 31, 2007, we had a receivable from our sole member, PSE&G, of approximately $3.0 and $2.7 million respectively, relating to TBC billings.

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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless the context otherwise indicates, all references to Transition Funding II, we, us or our herein mean PSE&G Transition Funding II LLC, a
Delaware limited liability company located at 80 Park Plaza, Newark, New Jersey 07102.

Following are the significant changes in or additions to information reported in our 2007 Annual Report on Form 10K affecting the financial condition and the results of our operations.
This discussion refers to our condensed financial statements (Statements) and related notes to condensed financial statements (Notes) and should be read in conjunction with such Statements and Notes. The following analysis of the financial condition
and our results of operations is in an abbreviated format pursuant to General Instruction H of Form 10-Q.

On September 23, 2005, we issued $102.7 million of transition bonds in four classes with maturities ranging from two years to nine years. The net proceeds of the issuance were utilized to
acquire Public Service Electric and Gas Companys (PSE&G) property right in the BGS transition bond charge (TBC). We use collections of the TBC to make scheduled principal and interest payments on the transition bonds and to cover any
additional administrative costs.

RESULTS OF OPERATIONS

Operating Revenues

TBC revenues decreased approximately $46 thousand or 1% and $120 thousand or 1% for the quarter and nine months ended September 30, 2008, respectively, as compared to the same periods
in 2007, due to 1% decreases in sales volumes for the quarter and nine months.

Operating Expenses

Amortization of Bondable Transition Property (BTP)

As a regulated entity, our amortization expense fluctuates with changes in revenue and interest expense. Amortization of BTP increased approximately $96 thousand or 3% and $171 thousand
or 2% for the quarter and nine months ended September 30, 2008, respectively, as compared to the same periods in 2007.

Servicing and Administrative Fees

PSE&G withholds from the TBC
collections an annual servicing fee equal to 0.05% of the initial balance of
the Bonds issued and charges an additional fee for various administrative costs.
Servicing and Administrative Fees decreased by approximately $50 thousand and
$49 thousand for the quarter and nine months ended September 30, 2008, respectively,
as compared to the same periods in 2007, due to lower administrative expenses
billed to us by the Servicer, PSE&G.

Interest Income

Interest Income decreased approximately $23 thousand or 72% and $77 thousand or 60% for the quarter and nine months ended September 30, 2008, respectively, as compared to the same
periods in 2007, primarily due to lower average balances and lower interest rates in 2008.

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Interest Expense

Interest expense decreased approximately $110 thousand or 11% and $308 thousand or 10% for the quarter and nine months ended September 30, 2008, respectively, as compared to the same
period in 2007, due primarily to a reduction in the total amount of debt outstanding.

LIQUIDITY AND CAPITAL RESOURCES

The principal amount of the Bonds, interest and fees are being recovered through the TBC. As part of PSE&Gs responsibility as Servicer under the Servicing Agreement, PSE&G remits
the TBC collections to the Trustee to make scheduled payments on the Bonds.

Payments of principal, interest and all related expenses with respect to the Bonds were made by the Trustee on June 16, 2008, totaling $6.6 million.

ITEM 3. QUALITATIVE AND QUANTITATIVEDISCLOSURES ABOUT MARKET RISK

We are not subject to risk of fluctuating interest rates as all four classes of Bonds were issued with fixed interest rates.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We have established and maintain disclosure controls and procedures as defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange
Act) to provide reasonable assurance that information required to be disclosed in the report that is filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported and is accumulated and communicated to
the Chief Executive Officer and Chief Financial Officer, as appropriate, by others within the company to allow timely decisions regarding required disclosure. We have established a disclosure committee which includes several key management employees
and which reports directly to the Chief Financial Officer and Chief Executive Officer. The committee monitors and evaluates the effectiveness of these disclosure controls and procedures. The Chief Financial Officer and Chief Executive Officer have
evaluated the effectiveness of the disclosure controls and procedures and, based on this evaluation, have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by the
report.

Internal Controls

We continually review our disclosure controls and procedures and make changes, as necessary, to ensure the quality of our financial reporting. There have been no changes in internal control
over financial reporting that occurred during the third quarter of 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Electric Discount and Energy Competition Act (Competition Act)

On April 23, 2007, PSE&G and our affiliate, PSE&G Transition Funding LLC (Transition Funding) were served with a copy of a purported class action complaint (Complaint) challenging the constitutional validity of certain provisions of New Jerseys Competition Act, seeking injunctive relief against continued collection from PSE&Gs electric customers of the TBC of Transition Funding, as well as recovery of TBC amounts previously collected. Notice of the filing of the Complaint was also provided to New Jerseys Attorney General. Under New Jersey law, the Competition Act, enacted in 1999, is presumed constitutional. On July 9, 2007, the same plaintiff filed an amended Complaint to also seek injunctive relief from continued collection of related taxes as well as recovery of such taxes previously collected. On July 30, 2007, PSE&G filed a motion to dismiss the amended Complaint, or, in the alternative, for summary jud
gment. On October 10, 2007, PSE&Gs and Transition Fundings motion to dismiss the Amended Complaint was granted. On November 21, 2007, the plaintiff filed a notice of appeal with the Appellate Division of the New Jersey Superior Court. Briefing of the appeal has been completed.

On July 9, 2007, the same plaintiff also filed a petition with the BPU requesting review and adjustment to PSE&Gs recovery of the same charges. On September 30, 2007, PSE&G filed a motion with the BPU to dismiss the petition. PSE&Gs motion to dismiss the BPU petition is pending.

ITEM 6. EXHIBITS

A listing of exhibits being filed with this document is as follows:

|               |  |                                                                                                                                                                            
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Document                                                                                                                                                                   
|31.1           |  | Certification by Thomas M. OFlynn, Chief Executive Officer
of PSE&G Transition Funding II LLC Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act
of 1934  
|              
|31.2           |  | Certification by Morton A. Plawner, Chief Financial Officer of PSE&G Transition
Funding II LLC Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934  
|              
|32.1           |  | Certification by Thomas M. OFlynn, Chief Executive Officer
of PSE&G Transition Funding II LLC Pursuant to Section 1350 of Chapter 63 of Title 18
of the United States Code
|              
|32.2           |  | Certification by Morton A. Plawner, Chief Financial Officer of
PSE&G Transition Funding II LLC Pursuant to Section 1350 of Chapter 63 of Title 18 of the
United States Code

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PSE&G TRANSITION FUNDING II LLC(Registrant)

By:
        
        /s/
          Derek M. DiRisioDerek M. DiRisioController(Principal Accounting Officer)


Date: November 14, 2008

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