EXHIBIT 4.3

UNLESS THIS  CERTIFICATE  IS PRESENTED BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET,  NEW YORK, NEW YORK) (THE DEPOSITORY)
TO PSEG ENERGY  HOLDINGS  INC. (THE  COMPANY) OR ITS AGENT FOR  REGISTRATION  OF
TRANSFER,  EXCHANGE OR PAYMENT, AND SUCH CERTIFICATE ISSUED IS REGISTERED IN THE
NAME  OF  CEDE  &  CO.,  OR  SUCH  OTHER  NAME  AS  REQUESTED  BY AN  AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY,  ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL,  SINCE THE REGISTERED  OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

UNLESS AND UNTIL THIS  CERTIFICATE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
CERTIFICATED  FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO THE DEPOSITORY OR
ANOTHER  NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR OF THE DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR.


<PAGE>

CUSIP NO.                                                          $550,000,000
No. R-1

                            PSEG ENERGY HOLDINGS INC.
                           8.50% Senior Note due 2011

PSEG ENERGY HOLDINGS INC., a New Jersey  corporation  (herein referred to as the
Company,  which term  includes any  successor  corporation  under the  Indenture
hereinafter  referred to), for value received,  hereby promises to pay to Cede &
Co., or registered  assigns,  the principal sum of $550,000,000 on June 15, 2011
(the Stated  Maturity  Date),  unless redeemed or repurchased in accordance with
the  provisions of this Note, and to pay interest on the  outstanding  principal
amount of this Note from June 15, 2001,  semi-annually in arrears on June 15 and
December  15 in each year,  commencing  December  15,  2001  (each,  an Interest
Payment  Date) at 8.50% per annum  until  the  principal  hereof is paid or duly
provided  for.  Interest  payable on each  Interest  Payment  Date will  include
interest  accrued from and including July 5, 2001 or from and including the most
recent  Interest  Payment Date to which  interest has been paid or duly provided
for, as the case may be, to but excluding such Interest  Payment Date.  Interest
will be computed based on a 360-day year consisting of 12 30-day months.

The  interest so  payable,  and  punctually  paid or duly  provided  for, on any
Interest Payment Date will, except as provided below, be paid to the person (the
Holder) in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on the June 1 and December 1 (whether or not a Business
Day (as defined  below)) next  preceding  such Interest  Payment Date (a Regular
Record  Date).  Any such  interest not so  punctually  paid or duly provided for
(Defaulted  Interest) will  forthwith  cease to be payable to the Holder on such
Regular Record Date and may either be paid to the person in whose name this Note
(or one or more  Predecessor  Notes) is registered at the close of business on a
special  record date (the Special Record Date) for the payment of such Defaulted
Interest to be fixed by the Trustee  hereinafter  referred  to,  notice  whereof
shall be given to the  Holder of this Note not less than ten days  prior to such
Special Record Date, or may be paid at any time in any other lawful manner,  all
as more fully provided in the Indenture.

For purposes of this Note, Business Day means each Monday,  Tuesday,  Wednesday,
Thursday and Friday which is not a day on which banking  institutions  in Newark
New  Jersey  and The City of New  York are  authorized  or  obligated  by law or
executive order to close.

Payment of the principal of and any premium on this Note on the Stated  Maturity
Date  or  date  of  earlier  redemption  or  repurchase  will  be  made  against
presentation of this Note at the office or agency of the Company  maintained for
that purpose in the Borough of Manhattan,  The City of New York, in such coin or
currency  of the  United  States of  America  as at the time of payment is legal
tender for the payment of public and private debts.

Payments of  principal,  premium,  if any,  and interest in respect of this Note
will be made in such coin or currency of the United  States of America as at the
time of payment is legal  tender for the payment of pubic and private  debts (i)
in the  case of  payments  on the  Stated  Maturity  Date  or  date  of  earlier
redemption or repurchase, in immediately available funds and (ii) in the case of
payments on an Interest  Payment  Date,  at the option of the Company,  by check
mailed to the Holder entitled thereto at the applicable address appearing in the
Security  Register or by transfer of immediately  available  funds to an account
maintained  by the payee with a bank  located in the United  States of  America;
provided,  however,  that  so long as Cede & Co.  is the  Holder  of this  Note,
payments of interest on an  Interest  Payment  Date will be made in  immediately
available funds.

Any payment of principal,  premium or interest required to be made on a day that
is not a Business  Day need not be made on such day, but may be made on the next
succeeding  Business  Day with the same  force and effect as if made on such day
and no interest shall accrue as a result of such delayed payment.

General.  This Note is one of a duly authorized issue of debt securities (herein
called the  Securities)  of the Company,  issued and to be issued in one or more
series under an indenture, dated as of October 8, 1999, as it may be modified or
supplemented  from time to time  (herein  called  the  Indenture),  between  the
Company and First Union  National  Bank, as Trustee  (herein called the Trustee,
which term includes any successor  trustee under the Indenture with respect to a
series of which  this Note is a part),  to which  indenture  and all  indentures
supplemental thereto, reference


                                       2
<PAGE>

is hereby made for a statement of the respective  rights,  limitations
of rights,  duties and immunities thereunder of the Company, the Trustee and the
Holders of the Notes,  and of the terms upon which the Notes are, and are to be,
authenticated  and delivered.  This Note is one of a duly  authorized  series of
Notes designated as 8.50% Senior Notes due 2011 (collectively, the Notes), which
such  series is  limited,  subject to the  provisions  of the  Indenture,  to an
aggregate principal amount equal to $550,000,000.

Events of Default.  If an Event of Default  with respect to the Notes shall have
occurred and be  continuing,  the principal of the Notes may be declared due and
payable in the manner and with the effect provided in the Indenture.

Redemption.  This Note will be redeemable at the option of the Company, in whole
or in part at any  time,  on at least 30 days  but not more  than 60 days  prior
written notice mailed to the Holder hereof,  at a price the  (Redemption  Price)
equal to the greater of (i) 100% of the  principal  amount to be  redeemed,  and
(ii) the sum, as determined by the Quotation  Agent (as defined  below),  of the
present  values  of the  principal  amount  to be  redeemed  and  the  remaining
scheduled  payments  of  interest  thereon  from  the  date of  redemption  (the
Redemption Date) to June 15, 2011, (the Remaining  Life),  discounted from their
respective  payment dates to the Redemption Date on a semiannual basis (assuming
a 360-day year  consisting  of twelve  30-day  months) at the Treasury  Rate (as
defined  below) plus 40 basis  points,  plus, in either case,  accrued  interest
thereon to the Redemption Date.

If money  sufficient to pay the Redemption  Price of and accrued interest on all
of this  Note  (or  portion  hereof)  to be  redeemed  on a  Redemption  Date is
deposited with the Trustee or a Paying Agent on or before such  Redemption  Date
and certain other  conditions are satisfied,  then on and after such  Redemption
Date, interest will cease to accrue on this Note (or such portion hereof) called
for redemption.

This Note will not be  entitled to the benefit of, or be subject to, any sinking
fund.

Option to Elect  Repayment Upon Certain Events  Involving PSEG Resources Inc. If
(1) the  Company  shall no longer own 100% of the equity  ownership  interest in
PSEG Resources Inc. (herein referred to as Resources),  or (ii)(a) a transaction
or series of related transactions  involving Resources (a Resources Transaction)
causes the assets of Resources  immediately after such Resources  Transaction to
be at least 20% less  than the  assets of  Resources  immediately  prior to such
Resources  Transaction  (as  measured  from  the  end of the  month  immediately
preceding the Resources  Transaction (or, in the case of a Resources Transaction
involving a series of transactions, the month immediately preceding the first of
such  transactions))  and (b) as a direct result of such Resources  Transaction,
either of Standard & Poor's  Ratings Group or Moody's  Investors  Service,  Inc.
shall downgrade its respective  rating of the Company below BBB- or Baa3(or,  if
either of such ratings immediately  preceding the Resources Transaction is lower
than BBB- or Baa3,  respectively,  such rating shall as a direct  result of such
Resources  Transaction be  downgraded),  then the Holder of this Note shall,  in
accordance  with  the  provisions  hereof  and  subject  to  Article  13 of  the
Indenture,  have the right to require the Company to  repurchase  this Note,  in
whole  or in part,  at a price  (the  Resources  Repayment  Price)  equal to the
greater of (i) 100% of the principal amount to be repurchased, and (ii) the sum,
as  determined by the Quotation  Agent,  of the present  values of the principal
amount to be  repurchased  and the  remaining  scheduled  payments  of  interest
thereon from the date of repayment  (the Resources  Repayment  Date) to June 15,
2011,  discounted from their respective payment dates to the Resources Repayment
Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the  Treasury  Rate,  plus 40 basis  points,  plus,  in either  case,
accrued interest thereon to the Resources Repayment Date.


                                       3
<PAGE>

Within 30 days  following  any Resources  Transaction,  the Company shall mail a
notice to the Holder of this Note (with a copy to the Trustee) stating:

1. that a Resources  Transaction  has occurred and that the Holder has the right
to require  the Company to  repurchase  this Note,  in whole or in part,  at the
Resources Repayment Price in cash (the Resources Offer);

2. the  circumstances  and relevant facts  regarding such Resources  Transaction
(including   information  with  respect  to  balance  sheet  data  of  Resources
immediately  following the Resources  Transaction  and in the month  immediately
preceding the Resources Transaction);

3. the Repayment  Date (which shall be a Business Day and be not earlier than 45
days nor later than 60 days from the date of the  delivery of such notice to the
depository);

4. that any portion of this Note not tendered  for  repayment  will  continue to
accrue interest;

5. that  interest  on this  Note (or  portion  hereof)  tendered  for  repayment
pursuant to the  Resources  Offer shall cease to accrue  after  repayment on the
Resources Repayment Date;

6. that if the Holder of this Note elects to have Notes repurchased  pursuant to
a Resources Offer, such Holder will be required to surrender this Note, with the
form  entitled  Option to Elect  Repayment  attached  hereto  completed,  to the
Trustee at the address  specified in the notice not earlier than 45 days and not
later than 30 days prior to the Resources Repayment Date;

7. that the Holder will be entitled to withdraw its election if the Paying Agent
receives,  not later than the close of  business on the third  Business  Day (or
such  shorter  period  as may be  required  by  applicable  law)  preceding  the
Resources Repayment Date, a telegram,  telex,  facsimile  transmission or letter
setting forth the name of the Holder,  the principal  amount of Notes the Holder
delivered for repayment,  and a statement  that such Holder is  withdrawing  its
election to have such Notes repurchased; and

8.  that the  Holder  of this Note  electing  only a portion  of this Note to be
repurchased  will be issued new Notes in a principal amount equal to the portion
of this Note not subject to such election.

In addition to the  foregoing,  the Company shall also deliver to The Depository
Trust Company within the time periods  specified above, for retransmittal to its
participants,  a notice  substantially  to the effect  specified  in clauses (1)
through  (5) and (7)  above,  which  notice  shall  also  specify  the  required
procedures  (furnished by The Depository Trust Company) for owners of beneficial
interests in this Global Security to tender and receive payment of the Resources
Repayment  Price for such interests  (including The Depository  Trust  Company's
Repayment Option Procedures,  to the extent applicable),  all in accordance with
The Depository Trust Company's rules, regulations and practices.

On the  Resources  Repayment  Date,  the Company  shall deposit with the Trustee
money sufficient  without  reinvestment to pay the Resources  Repayment Price of
this Note (or portion  hereof) to be  repurchased.  The Trustee shall as soon as
practicable  promptly mail to the Holder of this Note payment in an amount equal
to the Resources  Repayment  Price and as soon as practicable  authenticate  and
mail to such  Holder a new Note in a  principal  amount  equal to any portion of
this Note not repurchased.

Option to Elect Repayment Upon a Change of Control.  In the event of a Change of
Control  (as defined in the  Indenture),  the Holder of this Note shall have the
right to require the Company to  repurchase  this Note,  in whole or in part, at
101% of the principal amount thereof

plus accrued  interest to the Repayment  Date in accordance  with the procedures
set forth in the Indenture.

The Company  shall comply with Rule 14e-1 under the  Securities  Act of 1934, as
amended (the Exchange Act), and any other applicable laws and regulations in the
event that a Resources Transaction or Change of Control occurs.


                                       4
<PAGE>

                               Certain Definitions

Comparable  Treasury Issue means the United States Treasury security selected by
the Quotation  Agent as having a maturity  comparable to the Remaining Life that
would be utilized,  at the time of selection  and in accordance  with  customary
financial  practice,  in pricing  new issues of  corporate  debt  securities  of
comparable  maturity  with the  Remaining  Life of the Notes to be  redeemed  or
repurchased, as the case may be.

Comparable  Treasury  Price  means,  with  respect to any  Redemption  Date or a
Repayment Date, the average of four Reference Treasury Dealer Quotations,  after
excluding the highest and lowest of such Reference  Treasury Dealer  Quotations,
or, if the  Trustee  obtains  fewer  than four such  Reference  Treasury  Dealer
Quotations, the average of all such quotations.

Quotation Agent means the Reference  Treasury  Dealer  appointed by the Company.
Reference  Treasury  Dealer means:  (i) lehman  brothers inc. And its respective
successors; provided, however, that if the foregoing shall cease to be a primary
United States Government  securities dealer in New York City (a Primary Treasury
Dealer), the Company shall substitute therefore another Primary Treasury Dealer;
and (ii) any other Primary Treasury Dealer selected by the Company.

Reference  Treasury  Dealer  Quotations  means,  with respect to each  Reference
Treasury  Dealer and any  Redemption  Date or Repayment  Date,  the average,  as
determined  by the  Trustee,  of the bid and  asked  prices  for the  Comparable
Treasury Issue (expressed in each case as a percentage of its principal  amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such  Redemption Date or
Repayment Date, as the case may be.

Treasury Rate means,  with respect to any Redemption Date or Repayment Date, the
rate per annum equal to the  semi-annual  yield to  maturity  of the  Comparable
Treasury  Issue,  calculated on the third Business Day preceding such Redemption
Date or Repayment  Date,  as the case may be,  using a price for the  Comparable
Treasury Issue (expressed as a percentage of its principal  amount) equal to the
Comparable  Treasury Price for such  Redemption  Date or Repayment  Date, as the
case may be.

Reports Upon Request of Holders. During any Registration Default Period (as such
term is  defined  in the  Exchange  and  Registration  Rights  Agreement,  dated
February 10,  2000,  between the Company and Lehman  Brothers  Inc.) the Company
will make available to the Holder of this Note,  upon request,  copies of annual
reports and of the information,  documents, and other reports (Periodic Reports)
that the  Company  would  have been  required  to file with the  Securities  and
Exchange  Commission  (the SEC)  pursuant to Section 13 or Section  15(d) of the
Exchange  Act if the Company was subject to the  reporting  obligations  of such
Sections.  The Company shall make such Periodic Reports  available to the Holder
of this Note within the respective time periods mandated by the Exchange Act for
the filing of such Periodic  Reports with the SEC for issuers subject to Section
13 or 15(d) of the Exchange Act.

Modification  and Waivers;  Obligations of the Company  Absolute.  The Indenture
permits, with certain exceptions as therein provided,  the amendment thereof and
the  modification of the rights and obligations of the Company and the rights of
the Holders of the  Securities  of each series.  Such  amendment may be effected
under the  Indenture at any time by the Company and the Trustee with the consent
of the Holders of a majority in  aggregate  principal  amount of all  Securities
issued under the Indenture at the time  Outstanding  and affected  thereby.  The
Indenture  also  contains  provisions  permitting  the  Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding,  on behalf
of the Holders of all Outstanding Securities, to waive compliance by the Company
with  certain  provisions  of  the  Indenture.  Furthermore,  provisions  in the
Indenture permit the Holders of a majority in aggregate  principal amount of the
Outstanding  Securities of an individual  series,  to waive, on behalf of all of
the Holders of Securities of such individual series, certain past defaults under
the  Indenture  and their  consequences.  Any such  consent  or waiver  shall be
conclusive  and binding upon the Holder of this Note and upon all future Holders
of this Note and of any Note issued upon the  registration of transfer hereof or
in exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.


                                       5
<PAGE>

No  reference  herein to the  Indenture  and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of (and premium, if any) and interest on
this  Note at the  times,  place and rate,  and in the coin or  currency  herein
prescribed.

Defeasance  and Covenant  Defeasance.  The  Indenture  contains  provisions  for
defeasance  at any time of (a) the entire  indebtedness  of the  Company on this
Note and (b) certain  restrictive  covenants and the related defaults and Events
of Default,  upon  compliance by the Company with certain  conditions  set forth
therein, which provisions apply to this Note.

Authorized Denominations. The Notes are issuable only in registered form without
coupons in denominations of $1,000 and integral multiples thereof.

Registration  of Transfer or Exchange.  As provided in the Indenture and subject
to certain  limitations  herein and therein set forth, the transfer of this Note
is  registrable  in the  Security  Register  upon  surrender  of this  Note  for
registration  of  transfer  at the office or agency of the  Company in any place
where the  principal  of (and  premium,  if any) and  interest  on this Note are
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form  satisfactory  to the Company and the Security  Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing,  and thereupon one
or more new  Notes,  of  authorized  denominations  and for the  same  aggregate
principal amount, will be issued to the designated transferee or transferees.

As  provided in the  Indenture  and  subject to certain  limitations  herein and
therein set forth,  the Notes are  exchangeable  for a like aggregate  principal
amount of Notes of  different  authorized  denominations,  as  requested  by the
Holders surrendering the same.

This Note is a Global  Security.  If The Depository Trust Company is at any time
unwilling,  unable or  ineligible  to  continue  as  depository  and a successor
depository is not appointed by the Company within 90 days or an Event of Default
under the Indenture has occurred and is continuing, the Company will issue Notes
in  certificated  form in exchange for this Global  Security.  In addition,  the
Company may at any time determine not to have  Securities  represented by one or
more Global Securities and, in such event, will issue Notes in certificated form
in exchange in whole for this Global Security. In any such instance, an owner of
a  beneficial  interest  in this  Global  Security  will be entitled to physical
delivery  in  certificated  form of Notes  equal  in  principal  amount  to such
beneficial  interest  and to have such Notes  registered  in its name.  Notes so
issued  in  certificated  form will be issued  in  denominations  of $1,000  and
integral  multiples thereof and will be issued in registered form only,  without
coupons.

No  service  charge  shall be made  for any such  registration  of  transfer  or
exchange,  but the Company may require  payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Note for registration of transfer, the Company,
the  Trustee and any agent of the Company or the Trustee may treat the Holder of
this Note as the owner  hereof  for all  purposes,  whether  or not this Note be
overdue,  and  neither  the  Company,  the  Trustee  nor any such agent shall be
affected by notice to the contrary.

Defined  Terms.  All terms used in this Note which are defined in the  Indenture
and are not otherwise defined herein shall have the meanings assigned to them in
the Indenture.

Governing  Law. This Note shall be governed by and construed in accordance  with
the law of the State of New Jersey.  Unless the  certificate  of  authentication
hereon has been executed by the Trustee by manual signature, this Note shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.


                                       6
<PAGE>

IN WITNESS  WHEREOF,  the Company has caused this instrument to be duly executed
under its facsimile corporate seal.


      Dated:                                          PSEG ENERGY HOLDINGS INC.



      BY: ____________________________
      President

      ATTEST: ________________________
      Secretary

      TRUSTEE'S CERTIFICATE OF AUTHENTICATION

      This is one of the Securities of the series designated therein referred to
      in the within-mentioned Indenture.


                                            FIRST UNION NATIONAL BANK,
                                                    as Trustee

                                         BY: ____________________________
                                               Authorized Signatory


                                       7
<PAGE>

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:
I or we assign and transfer this Security to

                  (Insert assignee's soc. sec. or tax I.D. No.)

       ___________________________________________________________________

              (Print or type assignee's name, address and zip code)

       ___________________________________________________________________

and irrevocably appoint  ______________________  agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.



Dated: ____________________________        Signed: _____________________________


                           ___________________________
                           (Sign exactly as your name
                           appears on the other side of
                           this Security)


Signature Guarantee: ___________________________________________________________


                                       8
<PAGE>

                         OPTION TO ELECT REPAYMENT FORM

If you wish to elect to have this Note  repurchased by the Company upon a Change
of Control, check this box: [ ]

If you wish to elect to have only part of this Note  repurchased  by the Company
upon a Change of Control, state the amount: $___________________________________

If you  wish to  elect to have  this  Note  repurchased  by the  Company  upon a
Resources Transaction, check this box: [ ]

If you wish to elect to have only part of this Note  repurchased  by the Company
upon a Resources Transaction, state the amount: $_______________________________

   Dated:                        Signed:
          ----------------------          --------------------------------------
                                          (Sign exactly as your name appears on
                                           the other side of this Security)


Signature Guarantee: ___________________________________________________________


                                       9