Exhibit 14

PSEG Standards of Integrity


|                                                | 
|----------------------------------------------- | 
|Table of Contents                               | 
|                                                | 
|Definitions                                     | 
|Message From
 The Chairman                      | 
|                                                | 
|Section 1 -
 Integrity Process                  | 
|Introduction                                    | 
|Resources
 for Answering Questions              | 
|Reporting
 Concerns                             | 
|PSEG
 Integrity Line                            | 
|Waivers                                         | 
|Training                                        | 
|Certification
 of Compliance                    | 
|Retaliation                                     | 
|Discipline                                      | 
|                                                | 
|Section 2 -
 Personal and Public Responsibility | 
|Safety and
 Health                              | 
|Substance
 Abuse                                | 
|Environmental
 Responsibility                   | 
|                                                | 
|Section 3 -
 Business Relationships             | 
|Equal
 Opportunity and Diversity                | 
|Discrimination
 and Harrassment                 | 
|Workplace
 Violence                             | 
|Customer
 Relations                             | 
|Supplier
 Relations                             | 
|Government
 Relations                           | 
|Gift Giving
 to Government Officials            | 
|Competitor
 Relations                           | 
|                                                | 
|Section 4 -
 Personal Conduct                   | 
|Gifts Meals
 and Entertainment                  | 
|Corporate
 Opportunities                        | 
|Conflict of
 Interest                           | 
|Outside
 Employment                             | 
|Community
 Service                              | 
|Insider
 Trading                                | 
|Games of
 Chance                                | 
|                                                | 
|Section 5 -
 Company Property                   | 
|Company
 Assets                                 | 
|Confidential
 Information                       | 
|Computer and
 Information Resources             | 

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|                                              | 
|--------------------------------------------- | 
|Records
 Management Retention and Destruction | 
|                                              | 
|Section 6 -
 Business Controls                | 
|Internal
 Controls                            | 
|Executive
 Officers                           | 
|Fair
 Disclosure                              | 
|PSEG
 Attorneys                               | 
|                                              | 
|Section 7 -
 Legal Requirements               | 
|Affiliate
 Standards                          | 
|Political
 Contributions and Activities       | 
|Competitive
 Rules                            | 
|Energy Trading                                | 
|Foreign
 Corrupt Practices                    | 
|                                              | 
|Conclusion                                    | 

Definitions

When used in the
Standards of Integrity (Standards), the
terms set forth below have the following meaning:

PSEG or Company -Public
Service Enterprise Group Incorporated and all of its subsidiaries. Subsidiaries
are defined as companies in which PSEG directly or indirectly owns more than
50% of the voting stock.

Member of the PSEG Board of Directors:
Any outside member of the PSEG or PSE&G Board of Directors

Associate: Any PSEG
employee, including any officer, non-represented employee or represented
employee.

Supplier:Any
auditing firm, law firm, vendor, contractor, consultant or other third party
engaged by PSEG to provide products, services (professional or otherwise) or
materials to the Company or to a third party on behalf of the Company.

Workplace: Any place
where an associate conducts activities on behalf of the Company including the
land, buildings, facilities, and vehicles owned or used by the Company;
customer and supplier premises; Company-sponsored or supported events whether
on or off Company property; and business travel.

Executive Officers:
PSEGs Chief Executive Officer; Chief Financial Officer; Accounting Officer;
Treasurer; General Counsel; and the presidents of major subsidiaries.

Compliance Council:
A body comprised of certain of the Companys Executive Officers

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having
responsibilities for the design, maintenance and execution of the Companys
Compliance Program and implementation activities.

Message From The Chairman

This is a time
of considerable change, growth and opportunity for PSEG. We have new
leadership. Many employees are in new positions. Quite a few are new to the
Company.

As we take on
new challenges, there can be no change in the good, strong values that guide
us. Integrity is basic to everything our Company stands for and hopes to
achieve. PSEG has built an outstanding reputation for integrity since being
founded more than a century ago. It is up to each of us to uphold and safeguard
this reputation in all our actions.

Integrity does
not allow for shortcuts or compromises. It is about doing the right thing, in
keeping with the letter andspirit
of the law. The PSEG Standards of Integrity embody our unwavering commitment to
ethical business conduct. It is essential that each of us be familiar with the
Standards of Integrity, understand them thoroughly and act accordingly.

The best
rulebook, however, cannot anticipate every situation. If you are unsure about
what is the right thing to do, ask for advice. Business issues can be complex,
but integrity comes down to some simple principles: Keeping our commitments,
acting honestly and treating others with the same dignity and respect we want
for ourselves.

Integrity must
continue to define the character of our Company. With your continued support and
dedication, I am confident it will.

Sincerely,
Ralph Izzo
PSEG Chairman, President and Chief Executive Officer
July 2007

Section 1 - Integrity Process

Introduction

The Standards
of Integrity (Standards) embody the commitment of Public Service Enterprise
Group Incorporated (PSEG or Company) to conduct operations in accordance
with the highest ethical standards and in compliance with law. They establish a
set of common expectations for behavior in dealings with investors, customers,
employees, competitors, suppliers, government officials, the media and other
stakeholders.

The Standards
apply to all who work for, or on behalf of, PSEG including all associates,
members of PSEGs Board of Directors and, where appropriate, suppliers.

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All are
responsible to comply with the Standards and law while conducting activities on
behalf of the Company. The Standards apply to conduct in the workplace or in
any other place where these individuals are conducting activities for, or on
behalf of, the Company.

The Standards
are a condition of employment for associates, a condition of service for
members of the Board of Directors and a condition of engagement for suppliers.

The Standards
do not cover all situations where questions of ethics or compliance may arise.
Doing that would be virtually impossible, given our varied opportunities for
decision-making.

To help
implement the Standards, the following questions are provided to guide your
judgment and behavior:

| |   |                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------
| |  | Will your
 action comply with the intent and purpose of the Standards?                                        
| |   |                                                                                                               
| |  | Is your
 action honest in every respect?                                                                      
| |   |                                                                                                               
| |  | Could you
 defend your action in front of supervisors, fellow associates, the general
 public and your family?
| |   |                                                                                                               
| |  | Will this
 action appear appropriate to others?                                                               
| |   |                                                                                                               
| |  | Do you feel
 comfortable about doing this, or does it violate your personal code of
 conduct?                 

In judging the
appropriateness of any action, you should be able to answer yes to each of
these questions. Honesty, common sense and good judgment provide the best
general guidelines for appropriate behavior. The Company relies on the personal
judgment and thoughtful behavior of each associate in conducting the Companys
business.

If you are
unsure about how to act, resources are available to answer questions regarding
the interpretation or application of the Standards or law. Those resources are
identified in the next section.

Resources for Answering Questions

Associates are
encouraged to contact a manager or supervisor as the first source of guidance
regarding the interpretation or application of the Standards. If discussion
with a manager or supervisor is impractical or uncomfortable, associates may
contact either: R. Edwin Selover, PSEG Ethics
Counselor, Newark, Mail Code T4, 973-430-6450, Edwin.Selover@pseg.com,or Hugh J.
Mahoney, PSEG Compliance Counsel,
Newark, Mail Code T5, 973-430-6405, Hugh.Mahoney@pseg.com Associates may
also call the PSEG Integrity Line
toll free at 1-800-655-7269. These
contacts may be made anonymously.

Reporting Concerns

Associates are
required to report suspected violations of the Standards or law, where

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there is a
reasonable basis to know that a violation is occurring or has occurred, using
the resources described in the Resources for
Questionssection or by contacting the Integrity Line. Where an
associate reports a suspected violation to a manager or supervisor, the manager
or supervisor should report the suspected violation to PSEGs Compliance
Counsel.

All reports of
suspected violations of the Standards or law will be treated confidentially to
the extent possible under the circumstances. Concerns regarding accounting,
internal accounting controls or auditing matters, material violations of the
securities laws and material breaches of fiduciary duty will be reported to the
Audit Committee of PSEGs Board of Directors. A prompt, full, fair and
confidential investigation will be conducted of reported concerns. Associates
are required to cooperate in any investigation of a compliance or ethics concern.

A report
documenting the results of all investigations will be prepared and transmitted
to PSEGs Ethics Counselor. If an investigation discloses the need for
corrective action, appropriate corrective action will be implemented to prevent
recurrence. A summary report documenting all reported concerns and the results
of the investigations of such concerns will be periodically provided to PSEGs
Compliance Council and the Audit Committee.

PSEG Nuclear
associates should report concerns regarding nuclear safety or quality to a
manager or supervisor. If this is impractical or uncomfortable, they may
contact the Employee Concerns Groupat
1-800-353-2792,extension 1402. This contact may be made anonymously.

PSEG Integrity Line

If associates
are uncomfortable talking to someone at the Company regarding an interpretation
or application of the Standards or law, or a concern with respect to a
suspected violation of the Standards or law, associates may call the PSEG Integrity Line toll free at 1-800-655-7269.
The service is provided by
an independent third-party contractor, is multilingual and is available 24
hours a day, seven days a week. All calls to the Integrity Line are answered by
employees of the contractor.

Associates may
choose to remain anonymous when contacting the Integrity Line. Where anonymity is requested, the contractor
will not use caller ID or other methods to identify the caller. The
contractor may monitor calls for quality assurance. Quality assurance
recordings are not made available to the Company.

Reports of all
calls are made and forwarded to PSEGs Compliance Counsel for review and
appropriate action.

Associates
will be given a case number and requested to contact the Integrity Line in three (3) business days
in the event additional information is required. The case number may also be
used by the caller to obtain a response to a question or a progress statement
on any investigation regarding a reported concern. The Integrity Linewill not, however,

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provide any
details regarding any investigation of a reported concern.

Waivers

A waiver of
any provision of the Standards may be granted, but only in exceptional
circumstances and for substantial cause. A waiver request must be submitted to
the Ethics Counselor or the Compliance Counsel for decision. A waiver of any
provision of the Standards for any member of the Board of Directors or an
Executive Officer may only be made by the PSEG Board of Directors.

All waivers
will be disclosed to the PSEG Compliance Council. Waivers for Members of the
Board of Directors or Executive Officers will be disclosed to stockholders.

Training

PSEG is
committed to provide annual training to all associates regarding the Standards.
All associates must complete the training made available by the Company regarding
the Standards. Associates failing to complete the training may be subject to
disciplinary action.

Certification of Compliance

Non-represented
associates, members of the Board of Directors and certain supplier employees
are required each year to complete a certification of compliance questionnaire.
The questionnaire requires these individuals to acknowledge their understanding
of the Standards, self-assess compliance with the Standards and disclose any
exceptions to compliance by themselves or others. Completion of a certification
questionnaire is a condition of employment for non-represented associates, a
condition of service for members of the Board of Directors, and a condition of
engagement for certain suppliers.

The
certification of compliance questionnaire is administered by a third-party
supplier on a confidential basis in collaboration with PSEGs Internal Audit
Services Group. Exceptions that identify suspected violations of the Standards
or law are forwarded to PSEGs Compliance Counsel for review and, where
necessary, investigation. All exceptions will be treated confidentially to the
extent possible under the circumstances.

Retaliation

Associates may
not discharge, demote, suspend, threaten, harass or in any manner discriminate
in the terms and conditions of employment regarding another associate who in
good faith asks a question or reports a concern regarding a suspected violation
of the Standards or law. Associates also may not discriminate or retaliate
against another associate who participates in an investigation of any such
matter. PSEG does not and will not tolerate any such discrimination or
retaliation, and any PSEG associate who engages in such discrimination or
retaliation will be subject to disciplinary action, up to and including discharge.

Discipline

Discipline, up
to and including discharge, may be taken against any associate who:

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| |   |                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Authorizes
 or participates in an action which violates the Standards or law;                                                                                                                    
| |   |                                                                                                                                                                                                  
| |  | Fails to
 report a violation of the Standards or law where there is a reasonable basis
 to know that a violation is occurring or has occurred;                                                   
| |   |                                                                                                                                                                                                  
| |  | Reports a
 violation of the Standards or law that is knowingly false and intentionally
 made in bad faith;                                                                                       
| |   |                                                                                                                                                                                                  
| |  | Fails to
 cooperate with an investigation or intentionally conceals information or
 otherwise intentionally obstructs an investigation concerning a suspected
 violation of the Standards or law;
| |   |                                                                                                                                                                                                  
| |  | Retaliates
 or discriminates in any way against anyone who in good faith reports a
 suspected violation of the Standards or law by another person;                                               
| |   |                                                                                                                                                                                                  
| |  | Retaliates
 or discriminates in any way against anyone who cooperates in any
 investigation of any such suspected violation; or,                                                                 
| |   |                                                                                                                                                                                                  
| |  | Fails to
 complete or falsely completes a certification of compliance questionnaire.                                                                                                             

Self-reporting
of wrongdoing will be a favorable factor considered by management in connection
with any discipline that may be imposed for a violation of the Standards or
law.

Section 2 - Personal And Public Responsibility

Safety and Health

Safety and
health is PSEGs top priority and must never be compromised. PSEG conducts
operations with the highest regard for the safety and health of associates,
customers, suppliers and the general public in compliance with safety and
health laws and regulations. To do so, PSEG maintains a work environment that
is safety conscious and a workforce that is properly equipped, properly trained
and knowledgeable of regulatory requirements, industry guidelines and Company
policies, practices and procedures regarding safety and health. PSEG remains
committed to fostering a culture that embraces safety and health as a way of
life, both on and off the job, to achieve an accident-free work environment.

PSEG also
remains committed to protecting public safety in connection with the operation
of its plants, facilities, equipment and operating systems. This commitment
means that the Company maintains its plants, facilities, equipment and
operating systems in sound operating condition and utilizes operating practices
and procedures that are consistent with prevailing industry practices and
standards.

Associates are
expected to understand and accept responsibility for their safety and health,
maintain a positive safety attitude, be alert to unsafe work conditions and
exercise caution during the conduct of their work to prevent accidents
involving themselves and others. Associates must comply with all laws,
regulations and Company policies, practices and procedures regarding worker
safety and health.

Associates are
expected to adhere to the following values to promote the safety and

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health culture
to achieve an accident-free environment:

Trust: respect and
trust each others opinions and decisions and follow through on all safety and
health concerns

Care: approach each
day with the determination to care for ourselves, co-workers, suppliers and the
communities we serve

Knowledge: possess
the knowledge and skills to protect our health and safety

Communication:
communicate in a clear, open and honest manner Associates have the absolute
right, as well as obligation, to question, stop and correct any unsafe act or
condition. Retaliation is prohibited from being taken against any associate who
in good faith raises a safety or health concern for resolution.

PSEG establishes
key measures to track the Companys performance, sets objectives and targets to
drive continuous performance improvement, conducts audits and assessments, and
promptly corrects conditions that threaten the safety and health of associates,
customers and the general public.

Substance Abuse

The Company is
committed to maintaining a work environment that ensures the safety, health and
welfare of associates, customers, suppliers and the general public. Illegal
drug use and alcohol abuse may impact workplace safety and productivity,
disrupt associates lives and may jeopardize the attainment of this commitment.

Associates are
prohibited from possessing or using (except when prescribed by a licensed
physician), selling, purchasing, distributing, transferring or manufacturing
any controlled dangerous substance or other illegal drug or making any
arrangement for such activity on Company time or property.

Associates are
also prohibited from reporting to work unfit for duty as a result of
off-the-job use of any medication or controlled dangerous substance or other
illegal drug. Associates who for medical reasons are using prescription or
non-prescription drugs with side effects that may impair alertness or judgment
and, therefore, jeopardize worker safety must inform their immediate supervisor
about the potential for such side effects. If discussion with a supervisor is
impractical or uncomfortable, the associate must contact the Companys Medical Department at 973-430-5942.

Associates are
prohibited from consuming alcoholic beverages on Company time, property, or at
Company-sponsored events unless the consumption is authorized by an associate
at the level of Vice President or above. Any consumption of alcohol on Company
time, property or at Company-sponsored events must be supervised, moderate and
reasonable. Also, they must not violate any legal or regulatory requirements,
such as those established by the Nuclear Regulatory Commission or Department of
Transportation.

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Associates are
prohibited from reporting to work unfit for duty as a result of off-the-job
consumption of alcohol. Consumption of alcohol by any associate while assigned
to on-call or standby duty is prohibited for the entire period of the
assignment.

Associates are encouraged to
seek professional help to resolve drug or alcohol dependency. The Company
maintains an Employee Assistance Program (EAP) that provides confidential,
professional third-party help for associates and their families who have a
problem with drug or alcohol abuse. An EAP representative may be contacted at 1-800-430-0747. PSEG Nuclear associates may
call 1-800-339-5077 for
assistance.

Environmental
Responsibility

PSEG remains committed to conducting operations in a way that protects
the environment, and complies with all applicable laws, regulations and other
relevant standards to which the Company may voluntarily subscribe. PSEG
maintains the management systems, training and resources necessary to achieve
this objective.

PSEG and its associates will:

| |   |                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Comply with
 all applicable laws and regulations regarding the environment;                                                                                                                                                        
| |   |                                                                                                                                                                                                                                    
| |  | Obtain and
 comply with all permits applicable to the construction, modification or
 operation of facilities and equipment or the conduct of such other activities
 that may result in a release of a pollutant to the environment;
| |   |                                                                                                                                                                                                                                    
| |  | Make timely,
 accurate, true and complete reports of any unauthorized release of pollutants
 to the environment;                                                                                                                   
| |   |                                                                                                                                                                                                                                    
| |  | Maintain
 open and honest dialogue with stakeholders and the public about environmental
 issues and environmental performance;                                                                                                     
| |   |                                                                                                                                                                                                                                    
| |  | Assess and
 manage the environmental risks associated with all aspects of the Companys
 business to protect the environment;                                                                                                      
| |   |                                                                                                                                                                                                                                    
| |  | Factor
 pollution prevention and resource conservation opportunities into the Companys
 business planning and operating decisions to help reduce impacts to the
 environment; and,                                                
| |   |                                                                                                                                                                                                                                    
| |  | Promptly
 correct conditions that threaten the environment.                                                                                                                                                                        

PSEG
establishes key measures to track environmental performance, sets objectives
and targets to drive continuous performance improvement, and conducts audits
and assessments to assure compliance with laws, regulations and internal
standards.

Section 3 - Business Relationships

Equal Opportunity and Diversity

PSEG is an
equal opportunity employer and recruits, selects, trains and pays based on
merit, experience and other work-related criteria without regard to the
characteristics or traits protected by law. Characteristics or

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traits protected by law include race,
religion, creed, color, national origin, nationality, ancestry, age, disability
or handicap, marital status, affectional or sexual orientation, sex, atypical
hereditary cellular or blood trait, status as a special disabled veteran,
veteran of the Vietnam era or any other covered veteran, and those obligated to
serve in the Armed Forces of the United States (Protected Characteristics).

PSEG remains
committed to maintaining a workplace where diversity is valued and where
associates of all backgrounds have the opportunity to make contributions to the
Company and reach their full career potential.

Associates
must comply with the Companys commitment to equal opportunity employment,
value diversity and treat each other with respect and dignity.

Discrimination and Harrassment

The Company
maintains an environment where associates can participate and contribute to
corporate success and shareholder value, free from discrimination and
harassment. Associates are prohibited from discriminating against other
associates based on any Protected Characteristic.

Associates are
also prohibited from engaging in harassment. Harassment means offensive conduct
that singles out an associate or group of associates to the detriment or
objection of those individuals and which is severe and pervasive. Offensive
conduct may include insults, jokes, slurs, solicitations, pictures, cartoons or
posters which create an intimidating, hostile or offensive work environment.

Sexual
harassment is also prohibited. It includes, but is not limited to, any quid pro quo(i.e., giving something in
return for something else), unwelcome sexual advance or suggestion, request for
sexual favors, unwanted physical contact, displays of sexuallyoriented
pictures, cartoons and posters, sexual remarks, or other unwelcome verbal or physical
conduct of a sex-based nature which affects or interferes with an individuals
work performance or creates an intimidating, hostile or offensive work
environment.

Associates who
believe they are being subjected to discrimination or harassment should report
the conduct to their immediate supervisor, or the
Employee Solutions Group in Human Resources. The Employee Solutions
Group can be contacted by phone at 973-430-5545
or by e-mail at employeesolutions@pseg.com.

Workplace Violence

Violent acts,
abusive verbal or physical behavior and threats, or other expressions of
violence by any associate against another, are prohibited.

Associates are
prohibited from possessing any deadly or dangerous weapon as defined by

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law unless
prior approval is obtained from PSEGs Ethics Counselor or PSEGs Compliance
Counsel.

Customer Relations

PSEG is
committed to understanding and being sensitive to customers needs and
providing them with energy and energy services in a professional and prompt
manner. To that end, PSEG associates shall:

| |   |                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Work in a
 safe and responsible manner when on the property of a customer or other third
 party;                                                                       
| |   |                                                                                                                                                                        
| |  | Act in a
 professional and empathetic manner when interacting with customers;                                                                                          
| |   |                                                                                                                                                                        
| |  | Treat
 customers fairly by being honest and flexible in meeting their needs;                                                                                           
| |   |                                                                                                                                                                        
| |  | Respond
 promptly, courteously and proactively to customer inquiries and requests;                                                                                     
| |   |                                                                                                                                                                        
| |  | Keep
 commitments to customers by following up through completion when resolving a
 customers inquiry or request and by working to prevent a recurrence;              
| |   |                                                                                                                                                                        
| |  | Reasonably
 restore a customers or other third partys property when work is completed;                                                                               
| |   |                                                                                                                                                                        
| |  | Accurately
 and appropriately represent all services in offerings or advertising,
 marketing and sales efforts;                                                        
| |   |                                                                                                                                                                        
| |  | Not unduly
 discriminate against or provide undue preferential treatment to any customer;
 and,                                                                        
| |   |                                                                                                                                                                        
| |  | Respect and
 maintain the confidentiality of all information obtained from or provided by
 the customer in connection with the provision of energy and energy services.

Associates
shall appropriately safeguard customer information, and use it solely for the
purpose of conducting Company business. Associates shall not release customer
information to any third party, including any associate in an affiliated
company, without proper authorization from the customer, except as authorized
by Company policy, law, a lawfully issued order, subpoena or administrative
request.

Supplier Relations

Associates
must comply with PSEG procurement practices during any procurement activity,
including identifying potential suppliers, bidding, awarding bids, negotiating
and contracting, issuing requisitions, managing purchase orders or contracts
and processing invoices.

Associates
must make procurement decisions with integrity and based on criteria, such as
quality, price, reliability, availability, capability, schedule requirements
and services, that will deliver the best total value to PSEG. Associates must
deal with suppliers ethically and fairly, and avoid the appearance of
impropriety. They must maintain positive and professional relations with
suppliers and conduct business with them in good faith and, where possible,
resolve disputes quickly and equitably.

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Associates may
not directly solicit charitable or other contributions from suppliers where the
solicitation would create an expectation by the supplier of a quid pro quo.

Associates may
not engage the Companys independent auditor, Deloitte & Touche LLP, to
perform any services without the prior approval of PSEGs Chief Financial
Officer.

Government Relations

PSEG is
committed to conducting its business with government agencies and officials
consistent with the highest ethical standards and in compliance with applicable
laws, regulations and rules.

Associates must
cooperate with government agencies and officials in a straightforward manner
and must exercise the utmost integrity at all times in conducting business with
such agencies and officials, including:

| |   |                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Providing
 accurate, responsive and timely disclosure of information in connection with
 responding to regulatory reporting requirements and in connection with the
 conduct of regulatory proceedings;
| |   |                                                                                                                                                                                                        
| |  | Ensuring
 that all responses to reasonable requests or inquiries from government
 agencies or officials are accurate, complete and timely; and,                                                        
| |   |                                                                                                                                                                                                        
| |  | Representing
 themselves and the Company professionally and with honesty and integrity when
 appearing before or interacting with government agencies or officials.                                    

PSEG is also
committed to cooperating with governmental enforcement investigators and law
enforcement officials. All inquiries, requests or demands from such
investigators and officials must be referred to PSEGs Ethics Counselor or
PSEGs Compliance Counsel.

There will be
situations where PSEG will consider it necessary to contest or oppose
governmental requests, inquiries or existing or proposed governmental policies,
decisions or actions, including proposed legislative and regulatory actions.
Associates will present the Companys opposition and its positions, interests
and views factually, responsibly, professionally and with the utmost honesty
and integrity.

Gift Giving to Government Officials

There are many
laws, regulations and rules governing the giving of benefits to government
officials including gifts, entertainment, food and beverage, travel and
lodging, honoraria, loans, or any other thing of value. Associates who interact
with government agencies and officials must be aware of and comply with such
requirements and any codes of conduct applicable to such agencies and
officials.

Associates are
prohibited from giving anything of value, directly or indirectly, to any
government official to influence the officials judgment in the performance of
official duties or as a reward for such performance. Associates may not provide
any benefit to

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any government
official for any other reason without obtaining the prior approval of the Vice
PresidentFederal Affairs and Policy or the Vice PresidentState Governmental
Affairs, as appropriate.

Associates in
foreign countries where the Company does business must obtain prior approval
from the Companys Ethics Counselor in advance of providing any benefit to any
government official.

Competitor Relations

PSEG promotes
its products and services through fair and accurate comparisons with its
competitors and sells them on the strength of such products and services and
the Companys reputation. Associates must not engage in unfair, misleading or
inaccurate comparisons of the Companys products and services with those of its
competitors.

The Company
has a right to learn about competitors and will comply with the laws related to
the collection of competitive intelligence. Associates are prohibited from
misrepresenting themselves in the collection of competitive intelligence.
Associates are also prohibited from using, soliciting, accepting or otherwise
obtaining trade secrets or other competitive information that they know to be
confidential, proprietary or acquired through unlawful means.

Associates
formerly employed by a competitor may not use or disclose information about the
competitor that the associate believes to be proprietary or confidential.

Section 4 - Personal Conduct

Gifts, Meals and Entertainment

PSEG is
committed to having associates make business decisions objectively and solely
on the basis of the best quality, service, price or other competitive factor.
Associates may not solicit or accept from or give gifts, services, discounts,
gratuities or other things of value (collectively Gifts) to a supplier,
customer, union official or other third party doing business or seeking to do
business with the Company. Gifts received by an associate from such parties
must be returned to the donor, accompanied with an explanation about PSEGs
Standards.

Mementos,
souvenirs, advertising novelties and other items of a modest value (typically
not greater than $100 retail), customarily associated with legitimate business
relationships, are excluded from these restrictions. Food or beverage of a
modest value (typically not greater than $100 retail) is also excluded from
these restrictions. Perishable food or beverage received by an associate in
excess of this amount should be donated to a charitable organization and the
donor so notified. Finally, supplier discounts that are available to all
associates are also excluded from these restrictions.

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Meals or
attendance at entertainment (e.g., attendance at sporting or theater events) or
business events with a third party, the primary purpose of which is to maintain
necessary business relationships, are considered legitimate business activity
as long as the underlying business purpose is valid. Associates should attempt
to reciprocate when the next business occasion occurs. Associates who have
ongoing working relationships with suppliers must, however, avoid the offer or
acceptance of frequent meals and entertainment. Associates must also decline
any offers of lavish business meals, entertainment or business events. As a
measure of whether a particular meal, entertainment or business event is
lavish, associates may only accept such offers of a value that their management
would approve if included by the associate on his or her expense account.

Associates may
provide individuals outside PSEG with meals, entertainment, attendance at
business events, refreshments, transportation, lodging or incidental
hospitality. Such expenditures, however, must have a valid business purpose, be
moderate, done within the framework of good business judgment and consistent
with law.

It may be
customary in some foreign countries for individuals doing business with each
other to give or exchange Gifts. Associates may respect these customs, when
appropriate, but only in accordance with local laws. Gifts received by
associates in this context become PSEG property and must be reported to the
Ethics Counselor or Compliance Counsel.

Corporate Opportunities

Associates
have a duty to the Company to serve and advance the Companys legitimate
interests when the opportunity arises. Associates must not:

| |   |                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------
| |  | Deprive the
 Company of a business opportunity;                                                                                                
| |   |                                                                                                                                                
| |  | Use a
 company asset, confidential information or position to obtain a business
 opportunity for personal or third-party gain or advantage; or,
| |   |                                                                                                                                                
| |  | Compete with
 the Company.                                                                                                                     

Conflict of Interest

An actual
conflict of interest occurs when an associates personal interest interferes in
any way with the interests of the Company. A perceived conflict of interest
occurs when an associates personal interest could lead others to doubt the
associates objectivity or impartiality regarding the associates management of
the interests of the Company. A conflict of interest may take many forms, and
loss or harm to the Company is not necessary for a conflict of interest to
occur.

Associates must avoid any
actual or perceived conflict of interest and must specifically avoid
activities, interests or associations that:

---



| |   |                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Take
  advantage or appear to take advantage of their employment with the Company
  for personal gain or for the gain of family members, friends and
  acquaintances;     
| |   |                                                                                                                                                                           
| |  | Interfere,
  or appear to interfere, with the performance of their duties in an objective,
  impartial and effective manner;                                              
| |   |                                                                                                                                                                           
| |  | Reflect
  unfavorably, or appear to reflect unfavorably, upon PSEGs good name and
  reputation;                                                                          
| |   |                                                                                                                                                                           
| |  | Divide, or
  appear to divide, their primary duty to the Company versus an outside
  activity, personal interest or interest of a family member, friend or
  acquaintance;
| |   |                                                                                                                                                                           
| |  | Take
  advantage, or appear to take advantage, of confidential information, if the
  information has not been publicly announced; or,                                     
| |   |                                                                                                                                                                           
| |  | Otherwise
  conflict, or be perceived to otherwise conflict, with PSEGs interests.                                                                                       

Outside Employment

Associates may accept work with
another business organization while in the Companys employ, as long as the
outside employment:

| |   |                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------
| |  | Is not with
  a competitor;                                                                                                         
| |   |                                                                                                                                     
| |  | Does not
  create an actual or perceived conflict of interest;                                                                      
| |   |                                                                                                                                     
| |  | Is not done
  on Company time and does not involve the use of company assets;                                                       
| |   |                                                                                                                                     
| |  | Does not
  involve any attempt to sell products or services to PSEG;                                                                
| |   |                                                                                                                                     
| |  | Does not
  interfere with the associates duty to PSEG; or,                                                                         
| |   |                                                                                                                                     
| |  | Does not
  prevent the associate from dedicating the time and effort required to fulfill
  the associates responsibilities to PSEG.

Community Service

PSEG supports
the involvement of associates in service to the community. Associates may
volunteer for civic activities, or serve in public office and other positions
in the community as long as such activities do not exploit or conflict with
their employment, or create or appear to create a conflict of interest.
Associates must report any public office or position they hold to their
manager, disclose the potential for any conflict or appearance of any conflict
of interest, and disqualify themselves from Company decisions affecting the
community where they serve or from community decisions affecting the Company.

Insider Trading

Federal law
and SEC regulations prohibit any associates from buying or selling any PSEG
securities based on material information obtained in the course of employment
if the information is not available to the general public (Inside
Information).

Federal law and SEC regulations also prohibit associates from
conveying Inside Information to anyone who may, based on such Inside
Information, buy or sell any PSEG security. Finally, they also prohibit
associates from trading in the securities of suppliers, customers or third
parties, including a merger partner, with whom PSEG has a business

---



relationship
and about whom an associate acquires Inside Information.

Material
information, for purposes of this provision is information (whether favorable
or unfavorable) that a reasonable investor would consider important in deciding
whether to buy or sell a security of the Company.

Inside
Information includes: information with respect to financial results; earnings
projections; changes in dividend rates; issuance or repurchase of securities;
changes in credit or debt ratings; contracts; expansion or curtailment plans;
mergers and acquisitions; sale or purchase of assets; major litigation;
regulatory filings or decisions; or material labor negotiations or disputes.

If an
associate has access to Inside Information about PSEG or a company with whom
PSEG has a business relationship, he or she must abstain from buying, selling
or trading the securities of those companies or from making buy or sell recommendations
while in possession of such information. Associates must also refrain from
disclosing such information to anyone who does not have a clear need to know.

PSEG has
adopted and posted on the PSEG website a policy that more specifically
describes the Companys expectations for behavior for all Directors and
associates regarding the SECs insider trading rules. The policy, which is
incorporated herein by reference, may be found on the PSEG intranet website
under Corporate Resources  Integrity & Compliance  Insider Trading.

Games of Chance

Gambling is
illegal except where specifically authorized by statute. Gambling is defined as
risking something of value upon the outcome of a contest of chance on the
understanding that something of value will be received in the event of a
certain outcome. A contest of chance is any game (e.g., sports pool, lottery
or raffle) in which the outcome depends in a material degree on an element of
chance, notwithstanding that the skill of contestants may be a factor.

Associates may
not operate or participate in any contests of chance (including sports pools,
lotteries, or raffles) not specifically authorized by law on Company property
or Company time.

Raffles may,
however, be conducted on Company property or Company time if the raffle is
sponsored by an organization qualified by law; the sponsoring organization
obtains or possesses an appropriate license to conduct the raffle; and is
coordinated and monitored by the qualified organization; and is approved by a
Vice President. The Company is not qualified by law to sponsor raffles.

---



Section 5 - Company Property

Company Assets

PSEGs assets
consist of all associates and the contracted services and tangible and
intangible property which the Company owns, possesses and/or utilizes to
conduct its business, including funds, credit cards, land, plants and
facilities, equipment, vehicles, computer and information resources, inventory,
confidential information, contract rights, licenses, patents, trademarks,
service marks or other legal rights. Company assets that are obsolete or scrap
remain the property of the Company (hereinafter collectively Company Assets).

Associates
shall safeguard and take reasonable care to prevent the unauthorized use,
damage, waste, loss or theft of Company Assets. Associates are prohibited from
damaging, sabotaging, embezzling, stealing or otherwise misappropriating any
Company Asset, even if the property is obsolete or scrap. Associates may only
use or authorize the use of any Company Asset for legitimate business purposes,
unless approved by an associate at a director level or above and only where
such other use is not otherwise prohibited by the Standards or law.

Confidential Information

Confidential
information is information about the Companys business or operations that is
non-public and, if disclosed, may adversely impact the Company, associates,
customers, suppliers or other third parties. Confidential information includes
information regarding: facilities; equipment; systems; operations; outages;
financial results; earnings forecasts; budgets; sales forecasts; pricing;
sensitivity analyses; studies; business strategies; research; leads; plans and
proposals; development or construction; contracts; associates; customers;
suppliers; business partners; mergers, acquisitions and divestitures
(hereinafter, collectively, Confidential Information).

Associates
must protect and are responsible for securing and safeguarding Confidential
Information. They must also comply with law, Company policies and practices and
confidentiality agreements designed to protect the Confidential Information
from unauthorized disclosure. Confidential Information needed for an
associates job must be used solely for that purpose and may be shared only
with other associates who have a right and need to know. Associates may only
use Confidential Information for business-related purposes and are specifically
prohibited from using it for personal interest, benefit or gain or that of a
third party.

Associates may
not disclose Confidential Information to a third party, unless the disclosure
is appropriately authorized, legally mandated or done pursuant to a
confidentiality agreement.

Associates
must return all Confidential Information upon resignation, retirement or
termination. Confidential Information gained as a result of PSEG employment may
not be used or shared with any individual, firm or other organization after
employment with PSEG has ended.

---



Computer and Information Resources

Computer and
information resources include all of the Companys information technology
infrastructure and applications, electronic communication systems, messaging,
telephone and voicemail, and external computer-based services when accessed
through PSEGs networks systems (hereinafter, collectively, Computer and
Information Resources).

Computer and
Information Resources are for the use of associates and authorized suppliers
and may be used only for legitimate Company-related business purposes.
Incidental personal use of these resources by associates may be permitted if
the use is reasonable, does not impact performance or productivity, does not
violate other restrictions management has established and is otherwise
consistent with the Standards and law.

Associates and
authorized suppliers must use, safeguard and protect Computer and Information
Resources responsibly and in accordance with law, Company policies and
practices and licensing and copyright agreements. Associates who are
information system owners are responsible for ensuring that their systems and
the information the systems contain are appropriately secured for use solely by
those authorized to have access.

Associates and
authorized suppliers may not disguise their identity or directly or indirectly
circumvent security and administrative access controls when using Computer and
Information Resources.

Associates and
authorized suppliers are prohibited from utilizing Computer and Information
Resources to access, intentionally receive, transmit and/or view messages or
materials that are: sexually explicit; pornographic; hate-related;
discriminatory; offensive; malicious; libelous; slanderous; terroristic; or
threatening in nature.

Associates and
authorized suppliers who use Computer and Information Resources from remote
locations (e.g., home or other non-PSEG locations) are subject to the
requirements set forth in the remote access subscription agreements and these
Standards.

Associates and
authorized suppliers should have no expectation of privacy or confidentiality
while using Computer and Information Resources. The Company reserves the right,
without notice, to monitor, access, inspect, acquire and disclose the contents
of all messages and materials contained in Computer and Information Resources.

Records Management, Retention and Destruction

PSEG maintains
policies, practices and schedules intended to identify, manage, maintain and
retain records required for the conduct of the Companys business (Company
Records) and to ensure the consistent and documented destruction of such
records. Company Records consist of documentary materials created or received
in the ordinary course of business, regardless of the specific nature, medium
or form and include

---



documents,
photographs, microfilm, and electronic, digital and audio files, including e-mails.

Associates
must maintain, retain and destroy Company Records in accordance with applicable
Company policies, practices and schedules. Associates must not, however,
discard, destroy, conceal or alter the integrity of any Company Record if the
associate is notified or otherwise becomes aware that Company Records are
relevant to a pending, threatened or reasonably anticipated inquiry,
investigation, administrative proceeding or litigation involving the Company.
If there is a question as to whether a Company Record should be discarded or
destroyed, associates should contact the Law Department for guidance.

Section 6 - Business Controls

Internal Controls

PSEG maintains a system of
internal controls to provide reasonable assurance that:

| |   |                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Financial
  and operational accounting and reporting are full, fair, accurate, timely and
  reliable;                                                                
| |   |                                                                                                                                                                      
| |  | Authority
  and accountability to conduct business is delegated in a manner that balances
  efficient decision-making with protection of PSEGs assets and interests;
| |   |                                                                                                                                                                      
| |  | Adequate
  segregation of duties exists between authorization, creation, approval,
  custody, record keeping and reconciliation;                                     
| |   |                                                                                                                                                                      
| |  | Fraud and
  misconduct are prevented and detected;                                                                                                                   
| |   |                                                                                                                                                                      
| |  | Compliance
  with PSEGs policies and practices and applicable laws and regulations is
  promoted, communicated and maintained;                                      
| |   |                                                                                                                                                                      
| |  | Financial
  integrity remains strong and risk is effectively managed;                                                                                                
| |   |                                                                                                                                                                      
| |  | Assets are
  used in PSEGs best interest and are appropriately safeguarded and accounted
  for; and,                                                                
| |   |                                                                                                                                                                      
| |  | Operations
  and activities are effective and efficient.                                                                                                             

Associates are responsible for:

| |   |                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Understanding
  and complying with the system of controls established and maintained in their
  respective organizations;                                                         
| |   |                                                                                                                                                                                   
| |  | Recording
  all business transactions, events and conditions in an accurate, complete and
  timely manner;                                                                        
| |   |                                                                                                                                                                                   
| |  | Ensuring
  that all transactions are properly authorized and approved; and,                                                                                                       
| |   |                                                                                                                                                                                   
| |  | Reporting
  control deficiencies that have the potential to adversely affect the ability
  of the Company to record, process, summarize or report financial or
  operational data.

Associates are
prohibited from:

---



| |   |                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Falsifying
  data, information or records with respect to the Companys finances or
  operations, including those related to assets, liabilities, revenues,
  expenses, earnings, quality, safety and security, environmental performance,
  plants, facilities and

equipment, claims, benefits,
and time reporting;

| |   |                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Accelerating,
  postponing or otherwise manipulating the accurate and timely recording of
  assets, liabilities, revenues, expenses or earnings;                                                            
| |   |                                                                                                                                                                                                             
| |  | Creating
  off-book accounts or funds or making any other entry in any other record that
  intentionally misrepresents, conceals or disguises the true nature of any
  transaction, event or condition; and,
| |   |                                                                                                                                                                                                             
| |  | Taking any
  action to improperly influence, coerce, manipulate or mislead any internal or
  external auditor or investigator engaged in a review of the Companys
  transactions, activities or operations.

Executive Officers

PSEG maintains a code of ethics
for its Executive Officers to address the provisions of the Sarbanes-Oxley Act
and the Securities and Exchange Commissions (SEC) implementing regulations.
Consistent with this guidance, PSEGs Executive Officers must comply with the
following principles in discharging their responsibilities:

| |   |                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Act honestly
  and ethically, including the ethical handling of actual or perceived
  conflicts of interest between personal and professional relationships;         
| |   |                                                                                                                                                                      
| |  | Make full,
  fair, accurate, timely and understandable disclosure in reports and documents
  filed with, or submitted to, the SEC and in other public communications;
| |   |                                                                                                                                                                      
| |  | Ensure that
  the internal controls around financial reporting and disclosure are properly
  designed and effective;                                                 
| |   |                                                                                                                                                                      
| |  | Establish an
  environment in the workplace that promotes honest and ethical behavior;                                                                               
| |   |                                                                                                                                                                      
| |  | Promote
  accountability for adherence to the Standards, including these principles,
  and administer the Standards and these principles to deter wrongdoing;        
| |   |                                                                                                                                                                      
| |  | Make prompt
  reporting of violations of the Standards and these principles to PSEGs
  Ethics Counselor or PSEGs Compliance Counsel; and,                          
| |   |                                                                                                                                                                      
| |  | Comply with
  applicable laws, rules and regulations.                                                                                                                

Associates
must act with the same high regard for fairness, honesty, accuracy and good
faith regarding their responsibilities to enable the Executive Officers to meet
these principles.

Associates may
not utilize any Company Asset or any PSEG business relationship to extend,
maintain, arrange for or guarantee the extension of credit in the form of a
personal loan to or for the benefit of any member of the Board of Directors or
Executive

---



Officer,
except as may be otherwise specifically authorized by law.

Fair Disclosure

The SECs
Regulation FD (Regulation FD) prohibits selective disclosure of material,
nonpublic information by public companies to investors and market
professionals, such as analysts and investment advisors, under circumstances
where it is reasonably foreseeable that such persons would trade on the basis
of that information. Material non-public information for purposes of Regulation
FD is equivalent to Inside Information defined in the Insider Trading
provision. The objective of Regulation FD is to foster a level information
playing field for all investors by requiring the simultaneous disclosure to the
public of all material non-public information which a company makes available
to market professionals and investors. Disclosures of this information must be
done broadly and simultaneously. Disclosures made pursuant to appropriate
confidentiality arrangements are excluded from this prohibition.

Associates
authorized to communicate on behalf of PSEG with investors and market
professionals (other than for shareholder administrative matters) are limited
to the Chief Executive Officer, Chief Financial Officer, Presidents of the
Companys major subsidiaries, the Treasurer, Vice President and staff of the
Investor Relations Department and certain other senior officers, who may be
specifically designated.

All other
associates are prohibited from communicating with investors or market
professionals, the media or any other external audience regarding Inside
Information. Associates must refer all inquiries from these individuals to the
Investor Relations Department. Instances of unintentional disclosure of Inside
Information must be immediately reported to the Office of the Corporate
Counsel, as PSEG is required to make broad public disclosure of this
information within twenty-four (24) hours of the unintentional disclosure.

PSEG has
adopted a policy which more specifically describes the Companys methods and
practices for the communication of Inside Information and the handling of
inquiries from investors and market professionals. The policy, which is
incorporated herein by reference, may be found on the PSEG intranet website
under Corporate Resources  Integrity and Compliance  Regulation FD Disclosure
Policy.

PSEG Attorneys

PSEG maintains
standards of professional conduct that require attorneys to report evidence of
wrongdoing by the Company, members of the Board of Directors or associates.
PSEG attorneys (including in-house and outside counsel) who become aware of
evidence of a material violation of the securities laws or a fiduciary duty
must report evidence of the violation to PSEGs General Counsel and their
supervisory attorney. The attorney may report the evidence to the Companys
Audit Committee if the attorney reasonably believes that reporting the evidence
to the Companys General Counsel would be futile. The attorney must report the
evidence to the Audit Committee if the attorney concludes that the response
from the Companys General Counsel to the matter is not appropriate.

---



Section 7 - Legal Requirements

PSEG business
operations and transactions are subject to a multitude of legal requirements.
Legal requirements of particular importance to PSEG and its business operations
are summarized in this section. If a question arises regarding any legal
requirement, the associate should contact the Law Department for guidance.

Affiliate Standards

The Federal Energy Regulatory
Commission and the New Jersey Board of Public Utilities have adopted
regulations governing the relationships between PSE&G and its affiliates to
ensure that:

| |   |                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | PSE&G employees,
  who operate or plan the transmission system, function independently from
  employees of affiliates engaged in buying or selling gas or electricity in
  the wholesale market or operating generating plants (energy affiliates);      
| |   |                                                                                                                                                                                                                                                            
| |  | Preferential
  treatment, including preferential access to PSE&Gs customers or
  transmission systems, is not provided to any seller of electricity, gas, or
  energy services, whether an affiliate or a competitor;                                     
| |   |                                                                                                                                                                                                                                                            
| |  | PSE&G
  does not disclose non-public information regarding transmission operations or
  generation to any energy affiliate;                                                                                                                                
| |   |                                                                                                                                                                                                                                                            
| |  | PSE&G
  customer information is not provided to third parties, including any
  affiliate or competitive business of the utility, without the written consent
  of the customer or unless the disclosure is made in accordance with law or
  Company policy;
| |   |                                                                                                                                                                                                                                                            
| |  | Leads are
  not provided to and tying, preferences or similar activities designed to
  provide a competitive advantage are not engaged in for the benefit of any
  competitive business of the utility or any affiliate; and,                              
| |   |                                                                                                                                                                                                                                                            
| |  | Costs are
  appropriately charged or allocated between PSE&G and its affiliates and
  between PSE&Gs Appliance Service Business and PSE&Gs other
  businesses.                                                                                           

Associates are
responsible for understanding and must comply with these regulations.

Political Contributions and Activities

PSEG respects
the right of associates to be actively involved in political activities of
their own choosing, including the making of political contributions. When
speaking on or otherwise becoming involved in public issues as a private
citizen, associates must make clear that the views expressed are their own and
not those of PSEG. When making political contributions, associates may do so
solely on their own behalf, and may not be reimbursed for such contributions by
the Company.

Associates may
not solicit contributions from other associates for personal political purposes
on Company time and may not use Company property or other resources for their
own political purposes. Associates may also not have other associates,
including

---



administrative
or other support staff, perform activities to support an associates personal
political purposes.

Federal law
prohibits corporations from making contributions of any kind to a candidate,
political party, or political committee in connection with a federal election.
A corporation nonetheless is allowed to use corporate resources to solicit
contributions to candidates, parties or political committees in connection with
a federal election, so long as the solicitation is limited to the corporations
so-called restricted class. The restricted class generally includes
associates who have policymaking, managerial, professional or supervisory
responsibilities who are U.S. citizens or permanent residents. These
solicitations are subject to specific legal requirements and associates making
solicitations on behalf of the Company must coordinate them in advance with the
Vice PresidentFederal Affairs and Policy.

Federal law
does authorize corporations to fund the establishment and maintenance of a
federal political action committee (PAC), which may make contributions to
candidates for federal elective office using monies collected from the
Companys restricted class. Federal law does not, however, permit corporations
to make any contributions to the PAC to support federal candidates. PSEG has
established and provides administrative support to PSEGs federal PAC. An
associates participation in the Companys PAC must be strictly voluntary and
associates have the absolute right to refuse to contribute without fear of
reprisal of any kind.

States also
have laws and regulations governing corporate contributions and activities to
support candidates for state or local office. New Jersey, for example,
prohibits a gas, electric or power company or any affiliate from making
contributions, or providing other things of value, to aid or promote the
nomination or election of any person to state or local office in New Jersey.
Other states may permit contributions by the Company to candidates for elective
office. Decisions with respect to making corporate contributions to and the
conduct of activities to support state or local candidates in states other than
New Jersey must be reviewed with PSEGs Vice PresidentFederal Affairs and
Policy prior to making such political contributions or conducting such
activities.

State laws
also authorize the formation of PACs to solicit monies from associates for the
purpose of making contributions to candidates for state or local elective
office. Associate participation in state PACs must be strictly voluntary, and
associates have the absolute right to refuse to contribute without fear of
reprisal of any kind. State laws differ on the nature and scope of a
corporations relationship with a state PAC. For example, the Company is
neither permitted to support the administration of PSExecPAC nor permitted to
contribute money to the PAC for making contributions to candidates for state
elective office.

Associates
interacting with candidates for federal or state elective office on behalf of
the Company, or those managing activities of any PAC affiliated with the
Company, must understand and comply with the laws and regulations regarding the
conduct of these activities.

---



PSEG conducts
activities intended to influence legislation, regulation or governmental
processes (Lobbying Activities) at both the federal and state level. Federal
and state law require the Company to file reports identifying the associates
and suppliers engaged in Lobbying Activities on its behalf and providing
specific information regarding those activities. While pre-registration by
individuals conducting those activities is not required under federal law, it
may be required under state law, such as in New Jersey.

Lobbying
Activities at the federal level and in states other than New Jersey may only be
conducted by associates authorized by the Vice PresidentFederal Affairs and
Policy. Such activities in New Jersey must be conducted only by associates
registered as Governmental Affairs Agents or those otherwise authorized by the
Vice PresidentState Governmental Affairs.

Competitive Rules

Activities
that limit competition, restrict trade or otherwise create dominance in a
market may violate antitrust laws. These laws generally prohibit joint action
which restrains competition as well as improper unilateral action which either
unfairly propels one competitor into a monopoly position in the market or
seriously threatens to do so. Other aspects of antitrust laws prohibit certain
types of unfair trade practices. Specific activities that may be prohibited
include the following:

Price Fixing - make
an agreement or reach a mutual understanding with a competitor to fix levels of
production, prices or rates;

Bid Rigging - agree
with a competitor or a supplier on what or when to bid in preparing bids or
proposals;

Dividing Markets -
divide or allocate sales territories, customers or products/services with any
customer, supplier or competitor;

Boycotts - make
joint agreements, especially among competitors, to refuse to deal with a
particular competitor, customer or supplier;

Tying Agreements -
force a customer to buy an unwanted product or service as a condition of buying
a desired product or service;

Exclusive Dealing -
make agreements that restrict customers from dealing with the Companys
competitors;

Refusal To Deal-
arbitrarily refuse to deal with or purchase from others simply because they are
competitors or they have chosen a competitors product or services;

Joint Purchasing -
collaborate with other buyers of the same goods or services in a collective
purchasing scheme;

---



Reciprocal Dealing -
agree that one party buys products from another on condition that the second
party will buy products from the first; and

Information Exchange
- exchange competitively sensitive information that is not publicly available
with competitors, e.g. prices, pricing policy, costs, marketing and services
plans, capacity plans and capabilities.

In addition to
the antitrust laws, state laws may impose liability on PSEG or associates for
conduct including:

Business Disparagement
- making false statements about a competitors business or integrity; and

Interfere With Contract
- knowingly inducing a third party to breach a contract in order to do business
with the Company.

Associates who
believe that the activities listed in this provision are occurring must contact
PSEG Ethics Counselor or PSEG Compliance Counsel for advice and guidance.

Energy Trading

PSEG is committed to employing
lawful and ethical trading practices in connection with conducting the
Companys electric power and gas supply businesses and trading operations.
Consistent with this commitment, associates must adhere to the following
principles when conducting activities related to such businesses and operations:

| |   |                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Engage only
  in transactions with a legitimate business purpose or that otherwise have
  economic substance;                                                                                                                   
| |   |                                                                                                                                                                                                                                 
| |  | Operate and
  schedule generating facilities, undertake maintenance, declare outages and
  commit or otherwise bid supply in a manner that complies with the
  regulations, rules and guidelines of the applicable power market;
| |   |                                                                                                                                                                                                                                 
| |  | Manage the
  physical operation of supply resources and schedule power transactions in a
  manner consistent with the reliable operation of the transmission grid;                                                              
| |   |                                                                                                                                                                                                                                 
| |  | Disclose
  information to regulators, market monitors and the media, including market
  publications and publishers of surveys and price indices, that is accurate
  and consistent;                                            
| |   |                                                                                                                                                                                                                                 
| |  | Prepare and
  maintain for a reasonable period of time adequate and accurate documentation
  of all commodity and trading transactions; and,                                                                                    
| |   |                                                                                                                                                                                                                                 
| |  | Otherwise
  comply with applicable laws, regulations, tariffs, rules and requirements
  when conducting activities related to such businesses and operations.                                                                   

Additionally,
associates must not:

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| |   |                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Engage in
  transactions intended to artificially boost revenues or volumes or intended
  to manipulate market prices or market conditions;                                                 
| |   |                                                                                                                                                                                             
| |  | Engage in
  transactions that create artificial supply or shortages to affect market prices
  or that misrepresent the operational capabilities of units to affect the same
  result;       
| |   |                                                                                                                                                                                             
| |  | Engage in
  transactions or schedule resources to create congestion to manipulate prices
  or to jeopardize the security of dispatch operations;                                            
| |   |                                                                                                                                                                                             
| |  | Collude with
  other market participants to affect the price or supply of any commodity,
  allocate territories, customers or products, or otherwise unlawfully restrain
  competition; and,
| |   |                                                                                                                                                                                             
| |  | Arrange and
  execute simultaneous offsetting buy and sell trades with intent to
  artificially affect reported revenues, trading volumes or market prices.                                 

Foreign Corrupt Practices

The Foreign
Corrupt Practices Act (FCPA) and similar laws in many countries in which PSEG
currently has operations make it a crime for companies, as well as their
officers, directors, employees and agents, to promise or give anything of value
to a foreign official, foreign political party, or party official or to any
candidate for foreign political office (Covered Individuals) in order to obtain
or retain business, obtain any improper advantage, or otherwise influence their
judgment in the performance of official duties. These laws also prohibit making
payments to agents, sales representatives or other third parties if there is
reason to believe the payment will be used illegally or will go directly or
indirectly to a Covered Individual. Associates are prohibited from promising or
giving anything of value, either directly or indirectly, to or for the benefit
of Covered Individuals to obtain or retain business or any improper advantage.

There may be
instances where local custom allows incidental payments to officials to
expedite the performance of routine governmental action of a non-discretionary
nature. Payments of this nature are not prohibited by the FCPA. Such payments
should be considered only in the event that the payment does not violate
applicable anti-bribery laws and no other reasonable alternative is available.
The payments should be minimal, made only to minor foreign government employees,
and accurately recorded in the Companys books and records. Associates should
not make any payment to a Covered Individual regardless of amount or local
custom without consultation with the Law Department.

The FCPA and
similar laws in other countries require covered companies (such as PSEG) to
maintain accurate books, records and accounts and to devise a system of
internal accounting controls sufficient to provide reasonable assurance that
the Companys books and records accurately reflect transactions and
dispositions of assets. Associates and agents of PSEG must maintain such books,
records and accounts that reflect all transactions and dispositions of Company
Assets for domestic and foreign business activities.

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Conclusion

Act legally
and with the highest ethical standards. It is required for PSEGs business
success. If you have a question or a concern, please use the resources provided
to obtain the assistance you require.

* * *

The
Standards of Integrity are not a contract of employment and are not intended to
create any contractual obligations on the part of PSEG. The Standards of
Integrity do not alter the existing at -will employment relationship between
PSEG and its associates. Labor organizations that represent associates have
been placed on notice that these Standards are among the work rules applicable
to their members.

PSEG Internal Use Onlywww.informationcentral.pseg.com

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