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UNITED STATES
SECURITIES 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 March 31, 2006     
|           |  |                                                     
|           |  | OR                                                  
|           |  |                                                     
|o          |  | 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          |  | Applied
  For       
|              |  | (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 o

Indicate by check mark whether the registrant is a large accelerated
  filer, an accelerated filer, or a non-accelerated filer. See definition of  accelerated
  filer and large accelerated filer in Rule 12b-2 of the Exchange Act.
  (Check one): Large accelerated filer o
     Accelerated filer o    Non-accelerated
  filer x

Indicate by check
mark whether any of the registrants is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o    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                                                       |    | 6   
|                              |                                                                                         |    |     
|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 

i

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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.

ii

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PART I.  FINANCIAL INFORMATIONITEM 1.  FINANCIAL STATEMENTS

PSE&G
TRANSITION FUNDING II LLC
CONDENSED STATEMENT OF OPERATIONS
(Thousands of Dollars)
(Unaudited)

|                                               |  |                                          |        |  
|---------------------------------------------- |  | ---------------------------------------- | ------ | -
|                                               |  | For the
  Quarter Ended
  March 31, 2006 |       
|                                               |  |                                          |       
|                                              
|REVENUES                                       |  | $                                        | 3,006  |  
|                                               |  |                                          |        |  
|EXPENSES                                       |  |                                          |        |  
|Amortization of Bondable Transition
  Property |  |                                          | 1,846  |  
|Servicing Fees                                 |  |                                          | 45     |  
|                                               |  |                                          |        |  
|Total Expenses                                 |  |                                          | 1,891  |  
|                                               |  |                                          |        |  
|OPERATING INCOME                               |  |                                          | 1,115  |  
|Interest Income                                |  |                                          | 15     |  
|Interest Expense                               |  |                                          | (1,124 | )
|                                               |  |                                          |        |  
|NET INCOME                                     |  | $                                        | 6      |  
|                                               |  |                                          |        |  

See Notes to
Condensed Financial Statements.

1

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PSE&G
TRANSITION FUNDING II LLC
CONDENSED BALANCE SHEET
(Thousands of Dollars)
(Unaudited)

|                                          |  |                                |         |                                   |   |         | 
|----------------------------------------- |  | ------------------------------ | ------- | --------------------------------- | - | ------- | 
|                                          |  | March
        31,
        2006 |         | December
        31,
        2005 |  
|                                          |  |                                |         |                                   |  
|ASSETS                                    |  |                                |         |                                   |   |         | 
|Current
        Assets:                   |  |                                |         |                                   |   |         | 
|Cash                                      |  | $                              | 11      |                                   | $ | 5       | 
|Receivable
        from Member            |  |                                | 2,394   |                                   |   | 2,405   | 
|Receivable
        from Affiliate         |  |                                |        |                                   |   | 1,198   | 
|Restricted
        Cash                   |  |                                | 4,211   |                                   |   |        | 
|                                          |  |                                |         |                                   |   |         | 
|Total
        Current Assets              |  |                                | 6,616   |                                   |   | 3,608   | 
|                                          |  |                                |         |                                   |   |         | 
|                                          |  |                                |         |                                   |   |         | 
|Noncurrent
        Assets:                |  |                                |         |                                   |   |         | 
|Restricted
        Cash                   |  |                                | 514     |                                   |   | 514     | 
|Bondable
        Transition Property      |  |                                | 98,476  |                                   |   | 100,322 | 
|                                          |  |                                |         |                                   |   |         | 
|Total
        Noncurrent Assets           |  |                                | 98,990  |                                   |   | 100,836 | 
|                                          |  |                                |         |                                   |   |         | 
|TOTAL ASSETS                              |  | $                              | 105,606 |                                   | $ | 104,444 | 
|                                          |  |                                |         |                                   |   |         | 
|                                          |  |                                |         |                                   |   |         | 
|LIABILITIES                               |  |                                |         |                                   |   |         | 
|Current
        Liabilities:              |  |                                |         |                                   |   |         | 
|Current
        Portion of Long-Term Debt |  | $                              | 7,705   |                                   | $ | 7,705   | 
|Accounts
        Payable                  |  |                                | 32      |                                   |   |        | 
|Accrued
        Interest                  |  |                                | 2,349   |                                   |   | 1,225   | 
|                                          |  |                                |         |                                   |   |         | 
|Total
        Current Liabilities         |  |                                | 10,086  |                                   |   | 8,930   | 
|                                          |  |                                |         |                                   |   |         | 
|                                          |  |                                |         |                                   |   |         | 
|Long-Term
        Debt                    |  |                                | 94,995  |                                   |   | 94,995  | 
|                                          |  |                                |         |                                   |   |         | 
|                                          |  |                                |         |                                   |   |         | 
|TOTAL LIABILITIES                         |  |                                | 105,081 |                                   |   | 103,925 | 
|                                          |  |                                |         |                                   |   |         | 
|                                          |  |                                |         |                                   |   |         | 
|MEMBERS EQUITY                           |  |                                |         |                                   |   |         | 
|Contributed
        Capital               |  |                                | 514     |                                   |   | 514     | 
|Retained
        Earnings                 |  |                                | 11      |                                   |   | 5       | 
|                                          |  |                                |         |                                   |   |         | 
|Total
        Members Equity             |  |                                | 525     |                                   |   | 519     | 
|                                          |  |                                |         |                                   |   |         | 
|TOTAL LIABILITIES AND MEMBERS EQUITY     |  | $                              | 105,606 |                                   | $ | 104,444 | 
|                                          |  |                                |         |                                   |   |         | 

See Notes to
Condensed Financial Statements.

2

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PSE&G
TRANSITION FUNDING II LLC
CONDENSED STATEMENT OF CASH FLOWS
(Thousands of Dollars)
(Unaudited)

|                                                                                         |  |                                                              |       | 
|---------------------------------------------------------------------------------------- |  | ------------------------------------------------------------ | ----- | 
|                                                                                         |  | For
        the
        Quarter Ended
        March 31, 2006 |      
|                                                                                         |  |                                                              |      
|CASH FLOWS FROM OPERATING
        ACTIVITIES                                             |  |                                                              |       | 
|Net
        income                                                                       |  | $                                                            | 6     | 
|Adjustments
        to reconcile net income to net cash flows from operating activities: |  |                                                              |       | 
|Amortization
        of Bondable Transition Property                                     |  |                                                              | 1,846 | 
|Net
        Changes in Certain Current Assets and Liabilities:                           |  |                                                              |       | 
|Receivable
        from Member                                                           |  |                                                              | 11    | 
|Receivable
        from Affiliate                                                        |  |                                                              | 1,198 | 
|Accounts
        Payable                                                                 |  |                                                              | 32    | 
|Accrued
        Interest                                                                 |  |                                                              | 1,124 | 
|Net
        Cash Provided By Operating Activities                                        |  |                                                              | 4,217 | 
|                                                                                         |  |                                                              |       | 
|CASH FLOWS FROM INVESTING
        ACTIVITIES                                             |  |                                                              |      | 
|                                                                                         |  |                                                              |       | 
|CASH FLOWS FROM FINANCING ACTIVITIES                                                     |  |                                                              |      | 
|                                                                                         |  |                                                              |       | 
|Net Change in Cash and
        Cash Equivalents                                          |  |                                                              | 4,217 | 
|Cash and Cash Equivalents at Beginning
        of Period                                 |  |                                                              | 5     | 
|                                                                                         |  |                                                              |       | 
|Cash and Cash Equivalents
        at End of Period                                       |  | $                                                            | 4,222 | 
|                                                                                         |  |                                                              |       | 
|                                                                                         |  |                                                              |       | 
|Interest Paid                                                                            |  | $                                                            |      | 

See Notes to
Condensed Financial Statements.

3

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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).

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.

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.

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.

On
December 20, 2004, PSEG entered into an agreement and plan of merger with
Exelon Corporation (Exelon), which is headquartered in Chicago, Illinois,
whereby PSEG will be merged with and into Exelon. We do not expect this
transaction to have any effect on our operations.

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 2005 Annual Report on Form 10-K.

4

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NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)

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 2005 Annual
Report on Form 10-K.

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
March 31, 2006 are as follows:

|          |  |                               |             |                 |                                 |      |                                    |   |                                    |  |                         |            |  |  |          |  |  |          | 
|--------- |  | ----------------------------- | ----------- | --------------- | ------------------------------- | ---- | ---------------------------------- | - | ---------------------------------- |  | ----------------------- | ---------- |  |  | -------- |  |  | -------- | 
|          |  | Initial
  Principal
  Balance |             | Interest
  Rate | Current
  Portion
  Outstanding |      | Noncurrent
  Portion
  Outstanding |   | Final/
  Expected
  Payment
  Date |  | Final
  Maturity
  Date |           
|          |  |                               |             |                 |                                 |      |                                    |   |                                    |  |                         |            | 
|Class A-1 |  | $                             | 25,200,000  |                 |                                 | 4.18 | %                                  | $ | 7,705,415                          |  | $                       | 17,494,585 |  |  | 12/15/08 |  |  | 12/15/10 | 
|Class A-2 |  |                               | 35,000,000  |                 |                                 | 4.34 | %                                  |   |                                   |  |                         | 35,000,000 |  |  | 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 |                 |                                 |      |                                    | $ | 7,705,415                          |  | $                       | 94,994,585 |  |  |          |  |  |          | 
|          |  |                               |             |                 |                                 |      |                                    |   |                                    |  |                         |            |  |  |          |  |  |          | 

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 quarter ended March 31, 2006 were
  approximately $45 thousand.

As
  of March 31, 2006 and December 31, 2005, we had a receivable from our sole member,
  PSE&G, of approximately $2,394 thousand and $2,405 thousand, respectively,
  relating to TBC billings. As of December 31, 2005 we had a receivable of approximately
  $1,198 thousand for funds deposited with our affiliate, PSE&G Transition
  Funding LLC which was paid during the first quarter of 2006.

5

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ITEM 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL 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 2005
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
December 20, 2004, PSEG entered into an agreement and plan of merger with
Exelon Corporation (Exelon), which is headquartered in Chicago, Illinois,
whereby PSEG will be merged with and into Exelon. We do not expect this
transaction to have any effect on our operations.

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

For
  the quarter ended March 31, 2006 we recorded revenue generated from TBC of approximately
  $3,006 thousand, amortization expense of approximately $1,846 thousand, Servicing
  and Administrative Fees of approximately $45 thousand, Interest Expense of approximately
  $1,124 thousand and Interest Income of approximately $15 thousand. As a regulated
  entity, our amortization expense fluctuates with changes in revenue and interest
  expense. We defer any over or under collection of expense to match against
  future revenues. In January 2006, as a result of the annual true-up approved
  by the State of New Jersey Board of Public Utilities (BPU), the TBC (exclusive
  of sales and use tax) decreased to 0.0293 cents per Kilowatt-hour (kWh) as compared
  to 0.0295 cents per kWh charged in 2005.

LIQUIDITY AND CAPITAL RESOURCES

The
principal amount of the Bonds, interest and fees will be recovered through the
TBC. As part of PSE&Gs responsibility as Servicer under the Servicing
Agreement, PSE&G will remit the TBC collections to the Trustee to make
scheduled payments on the Bonds. The first payment of bond principal, interest
and all related expenses will be made by the Trustee on June 15, 2006. We
currently expect that there will be sufficient funds to make our scheduled
payments.

6

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ITEM 3. QUALITATIVE AND QUANTITATIVE
DISCLOSURES 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 which are designed
to provide reasonable assurance that material information is made known to the
Chief Executive Officer and Chief Financial Officer by others within the
entity. We have established a disclosure committee which is made up of 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 has
evaluated the effectiveness of the disclosure controls and procedures as of
March 31, 2006 and, based on this evaluation, has concluded that the disclosure
controls and procedures were effective in providing reasonable assurance during
the period covered in this quarterly report.

Internal Controls

During the
first quarter of 2006, we continued to make enhancements to internal controls
to enable us to maintain the effectiveness of our internal control over
financial reporting as of March 31, 2006. There were no significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation. It should be
noted that the design of any system of controls is based, in part, on certain
assumptions about the likelihood of future events, and provides reasonable
assurance that the internal control system will succeed in achieving its stated
objectives.

7

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PART II. OTHER
INFORMATION

ITEM 1. LEGAL
PROCEEDINGS

None.

ITEM 6. EXHIBITS

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

| |                |  |                                                                                                                                                                                                             | 
| | -------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | Exhibit Number |  | Document                                                                                                                                                                                                    | 
| |                |  |                                                                                                                                                                                                             | 
| | 31             |  | Certification
  by Robert E. Busch, Chief Executive Officer and 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             |  | Certification
  by Robert E. Busch, Chief Executive Officer and 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

8

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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/
  Patricia A. Rado          | 
|                     |     |                                 | 
|                     |     | Patricia A. Rado                | 
|                     |     | Controller                      | 
|                     |     | (Principal Accounting Officer)  | 
|                     |     |                                 | 
|Date: May
  12, 2006 |     |                                 | 

9

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