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               RETIREMENT INCOME REINSTATEMENT PLAN

                 FOR NON-REPRESENTED EMPLOYEES OF

             PUBLIC SERVICE ELECTRIC AND GAS COMPANY

                        AND ITS AFFILIATES




                                         Effective January 1, 1996<PAGE>
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                    TABLE OF CONTENTS



Section 1.  Definitions. . . . . . . . . . . . . . . . . . . . . 1

Section 2.  Eligibility. . . . . . . . . . . . . . . . . . . . . 4

Section 3.  Supplemental Retirement Benefit. . . . . . . . . . . 5

Section 4.  Supplemental Surviving Spouse Benefit. . . . . . . . 7

Section 5.  Administration of the Plan . . . . . . . . . . . . . 7

Section 6.  Claims Procedure and Status Determination. . . . . . 9

Section 7.  Amendment or Termination . . . . . . . . . . . . . .10

Section 8.  General Provisions . . . . . . . . . . . . . . . . .11

Section 9.  Miscellaneous. . . . . . . . . . . . . . . . . . . .13
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               RETIREMENT INCOME REINSTATEMENT PLAN
                 FOR NON-REPRESENTED EMPLOYEES OF
                 PUBLIC SERVICE ELECTRIC AND GAS
                    COMPANY AND ITS AFFILIATES

     This Retirement Income Reinstatement Plan for Non-Represented
Employees of Public Service Electric and Gas Company and its
Affiliates is adopted effective January 1, 1995.  This Plan is
established and maintained by Public Service Electric and Gas
Company and its Participating Affiliates solely for the purpose of
assisting in attracting and retaining a stable pool of key
managerial and professional talent and long-term key employee
commitment by providing certain supplemental retirement benefits
for certain of their employees who participate in the Pension Plan
of Public Service Electric and Gas Company.  This Plan is intended
to constitute an unfunded "excess benefit plan" as defined in
Section 3(36) of the ERISA, to the extent it provides benefits that
would be paid under the Pension Plan of Public Service Electric and
Gas Company but for the limitations of Section 415 of the Code, and
an unfunded plan of deferred compensation for a select group of
management or highly compensated employees for purposes of Title 1
of ERISA, to the extent it provides other benefits.

     Accordingly, Public Service Electric and Gas Company hereby
adopts this Plan pursuant to the terms and provisions set forth
below:

Section 1.  Definitions

   When used herein, the words and phrases hereinafter defined
shall have the following meanings unless a different meaning is
clearly required by the context of the Plan:

   1.1  "Affiliate" shall mean any organization which is a member
of a controlled group of Companies (as defined in Code Section
414(b), as modified by Code Section 415(h)) which includes the
Company; or any trades or businesses (whether or not incorporated)
which are under common control (as defined in Code Section 414(c),
as modified by Code Section 415(h)) with the Company; or a member
of an affiliated service group (as defined in Code Section 414(m))
which includes the Company or any other entity required to be
aggregated with the Company as required by regulations promulgated
pursuant to Code Section 414(o).

   1.2 "Beneficiary" shall mean any person or persons selected by
a Participant on a form provided by the Company who may become
eligible to receive to receive the benefits provided under this
Plan in the event of such Participant's death.

   1.3 "Benefit Limitation" shall mean the maximum annual benefit
payable to a Participant under the Pension Plan in accordance with
Section 415 of the Code.
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   1.4  "Board of Directors" or "Board" shall mean the Board of
Directors of the Company.

   1.5  "Code" shall mean the Internal Revenue Code of 1986, as
amended, and as same may be amended from time to time.

   1.6  "Company" shall mean Public Service Electric and Gas
Company.

   1.7 "Compensation" shall mean compensation as defined in the
Pension Plan except, for the purposes hereof, Compensation shall
also include amounts which have been deferred under any Deferred
Compensation Plan of the Company or any Participating Affiliate
which would otherwise be excluded soley on account of Subsection
1.6(a) of the Pension Plan.  

   1.8 "Compensation Limitation" shall mean the maximum amount of
annual compensation under Section 401(a)(17) of the Code that may
be taken into account in any Plan Year for benefit accrual purposes
under the Pension Plan.

   1.9  "Employee" shall mean any individual in the employ of the
Company or a Participating Affiliate who is not included within a
unit of employees covered by a collective bargaining agreement. 
The term "Employee" shall not include a director of the Company or
a Participating Affiliate who serves in no capacity other than as
a director, a consultant or independent contractor doing work for
the Company or a Participating Affiliate or a person employed by a
consultant or independent contractor doing work for the Company or
a Participating Affiliate.

   1.10    "Employee Benefits Committee" or "Committee" shall mean
the Employee Benefits Committee of Public Service Electric and Gas
Company.

   1.11   "Employee Benefits Policy Committee" shall mean the
Employee Benefits Policy Committee of Public Service Enterprise
Group Incorporated, the Company's parent.

   1.12   "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, and as the same may be amended
from time to time.

   1.13   "Normal Retirement Date" shall mean the first day of the
month coinciding with or next following a Participant's attainment
of age 65.

   1.14   "Participant" shall mean any Employee or former Employee
of the Company or a Participating Affiliate who meets the
requirements of Subsection 2.1 of the Plan.
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   1.15    "Participating Affiliate" shall mean any Affiliate of
the Company which (a) is the sponsor or a Participating Affiliate
of the Pension Plan; (b) adopts this Plan with the approval of the
Board of Directors; (c) authorizes the Board of Directors and the
Employee Benefits Committee to act for it in all matters arising
under or with respect to this Plan; and (d) complies with such
other terms and conditions relating to this Plan as may be imposed
by the Board of Directors.

   1.16   "Pension Plan" shall mean the Pension Plan of Public
Service Electric and Gas Company and each successor or replacement
plan.

   1.17   "Pension Plan Retirement Benefit" shall mean the
aggregate annual benefit payable to a Participant pursuant to the
Pension Plan by reason of the Participant's termination of
employment with the Company and all Affiliates for any reason other
than death.

   1.18   "Pension Plan Surviving Spouse Benefit" shall mean the
aggregate annual benefit payable to the Surviving Spouse of a
Participant pursuant to the Pension Plan in the event of the death
of the Participant at any time prior to commencement of payment of
the Participant's Pension Plan Retirement Benefit.

   1.19   "Plan" shall mean this Retirement Income Reinstatement
Plan for Non-Represented Employees of Public Service Electric and
Gas Company and Its Affiliates.

   1.20   "Plan Year" shall mean the calendar year.

   1.21   "Supplemental Retirement Benefit" shall mean the benefit
payable to a Participant pursuant to this Plan by reason of the
Participant's termination of employment with the Company and all
Affiliates for any reason other than death.

   1.22   "Surviving Spouse" shall mean a person who is married to
a Participant at the date of the Participant's death.

   1.23   "Supplemental Surviving Spouse Benefit" shall mean the
benefit payable to a Surviving Spouse pursuant to this Plan.

Section 2.  Eligibility

   2.1 A Participant who is eligible to receive a Pension Plan
Retirement Benefit, the amount of which is reduced by reason of (a)
the application of the limitations on benefits imposed by
application of any provisions of the Code, as in effect on the date
for commencement of the Pension Plan Retirement Benefit or as in
effect at any time thereafter, to the Pension Plan or (b) the
restrictions of Subsection 1.6(a) of the Pension Plan, shall be
eligible to receive a Supplemental Retirement Benefit.  The
Surviving Spouse of a Participant described in the preceding
sentence who dies prior to commencement of payment of his Pension
Plan Retirement Benefit shall be eligible to receive a Supplemental
Surviving Spouse Benefit.
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Section 3.  Supplemental Retirement Benefit

   3.1 The Supplemental Retirement Benefit payable to an eligible
Participant shall be equal to the excess of (a) over (b) where:

     (a)  is the amount of Pension Plan Retirement Benefit to which
the Participant would have been entitled under the Pension Plan if
such benefit were computed without regard to (i)  the exclusion of
any amounts pursuant to Subsection 1.6(a) of the Pension Plan, (ii)
the Benefit Limitation or (iii) the Compensation Limitation; and

     (b)  is the amount of the Pension Plan Retirement Benefit
actually payable to the Participant or payable to a third party on
the Participant's behalf under the Pension Plan.

     The amounts described in (a) and (b) shall be computed as of
the date of termination of employment of the Participant with the
Company and all Affiliates in the form of a single life annuity
payable over the lifetime of the Participant only commencing on his
Normal Retirement Date. 

   3.2.   The Supplemental Retirement Benefit payable to a
Participant shall be paid in the same form under which the Pension
Plan Retirement Benefit is payable to the Participant (including
the election to receive a lump sum distribution of the present
value of any benefit).  The Participant's election under the
Pension Plan of any optional form of payment of his Pension Plan
Retirement Benefit (with the valid consent of his spouse where
required under the Pension Plan) shall also be applicable to the
payment of his Supplemental Retirement Benefit.

   3.3 Payment of the Supplemental Retirement Benefit to a
Participant shall commence on the same date as payment of the
Pension Plan Retirement Benefit to the Participant commences.  Any
election under the Pension Plan made by the Participant with
respect to the commencement of payment of his Pension Plan
Retirement Benefit shall also be applicable with respect to the
commencement of payment of his Supplemental Retirement Benefit.

   3.4 Notwithstanding the provisions of Sections 3.2 and 3.3
above, an election made by the Participant under the Pension Plan
with respect to the form of payment of his Pension Plan Retirement
Benefit (with the valid consent of his spouse where required under
the Pension Plan), or the date for commencement of payment thereof,
shall not be effective with respect to the form of payment or date
for commencement of payment of his Supplemental Retirement Benefits
hereunder unless such election is expressly approved by the
Committee with respect to his Supplemental Retirement Benefit.  If
the Committee shall not approve such election, then the form of
payment or date for commencement of payment of the Participant's
Supplemental Retirement Benefits shall be selected by the Committee
in its sole discretion.
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   3.5 A Supplemental Retirement Benefit which is payable in any
form other than a single life annuity over the lifetime of the
Participant, or which commences at any time prior to the
Participant's Normal Retirement Date, shall be the actuarial
equivalent of the Supplemental Retirement Benefit set forth in
Subsection 3.1 above as determined by the same actuarial
adjustments as those specified in the Pension Plan with respect to
determination of the amount of the Pension Plan Retirement Benefit
on the date for commencement of payment hereunder.

Section 4.  Supplemental Surviving Spouse Benefit

   4.1 If a Participant dies prior to commencement of payment of
his Pension Plan Retirement Benefit under circumstances in which a
Pension Plan Surviving Spouse Benefit is payable to his Surviving
Spouse, then a Supplemental Surviving Spouse Benefit shall be
payable to his Surviving Spouse as hereinafter provided.  The
Supplemental Surviving Spouse Benefit payable to a Surviving Spouse
shall be equal to the excess of  (a) over (b) where:

     (a)  is the amount of Pension Plan Surviving Spouse Benefit to
which the Surviving Spouse would have been entitled under the
Pension Plan if such benefit were computed without regard to (i)
the exclusion of any amounts pursuant to Subsection 1.6(a) of the
Pension Plan, (ii) the Benefit Limitation or (iii) the Compensation
Limitation; and

     (b)  is the amount of the Pension Plan Surviving Spouse
Benefit actually payable to the Surviving Spouse under the Pension
Plan.

   4.2 A Supplemental Surviving Spouse Benefit shall be payable
over the lifetime of the Surviving Spouse only in monthly
installments commencing on the date for commencement of payment of
the Pension Plan Surviving Spouse Benefit to the Surviving Spouse
and terminating on the date of the last payment of the Pension Plan
Surviving Spouse Benefit made before the Surviving Spouse's death.

Section 5.  Administration of the Plan

   5.1 The Committee shall be the named fiduciary of this Plan
responsible for the general operation and administration of this
Plan and for carrying out the provisions thereof.  The Committee
shall have discretionary authority to construe the terms of this
Plan.

   5.2 The Committee shall adopt such rules and procedures as it
deems necessary and advisable to administer this Plan and to
transact its business.  Subject to the other requirements of this
Section 5, the Committee may--

     (a)  employ agents to carry out non-fiduciary responsibility;
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     (b)  employ agents to carry out fiduciary responsibilities
(other than trustee responsibilities as defined in Section
405(c)(3) of ERISA);

     (c)  consult with counsel, who may be counsel to the Company
or an Affiliate; and

     (d)  provide for the allocation of fiduciary responsibilities
(other than trustee responsibilities as defined in Section
405(c)(3) of ERISA) among its members.

     However, any action described in sub-paragraphs (b) or (d) of
this Subsection 5.2, and any modification or rescission of any such
action, may be effected by the Committee only by a resolution
approved by a majority of the Committee.  The Committee shall be
entitled to rely conclusively upon all tables, valuations,
certificates, opinions and reports furnished any actuary,
accountant, controller, counsel or other person employed or engaged
by the Committee with respect to this Plan.

   5.3 The Committee shall keep written minutes of all its
proceedings, which shall be open to inspection by the Board of
Directors.  In the case of any decision by the Committee with
respect to a claim for benefits under this Plan, such Committee
shall include in its minutes a brief explanation of the grounds
upon which such decision was based.

   5.4 In performing their duties, the members of the Committee
shall act solely in the interest of the Participants in this Plan
and their Beneficiaries and

     (a)  for the exclusive purpose of providing benefits to
Participants and their Beneficiaries;

     (b)  with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of
an enterprise of a like character and with like aims; and

     (c)  in accordance with the documents and instruments
governing this Plan insofar as such documents and instruments are
consistent with the provisions of Title I of ERISA.

   5.5 In addition to any other duties the Committee may have, the
Committee shall review the performance of all persons to whom the
Committee shall have delegated or allocated fiduciary duties
pursuant to the provisions of this Section 5.
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   5.6 The Company agrees to indemnify and reimburse, to the
fullest extent permitted by law, members of the Committee,
directors and employees of the Company and its Affiliates, and all
such former members, directors and employees, for any and all
expenses, liabilities or losses arising out of any act or omission
relating to the rendition of services for or the management and
administration of this Plan.

   5.7 No member of the Committee nor any delegate thereof shall
be personally liable by virtue of any contract, agreement or other
instrument made or executed by him or on his behalf in such
capacity.

Section 6.  Claims Procedure and Status Determination

   6.1 Claims for benefits under this Plan and requests for a
status determination shall be filed in writing with the Company.

   6.2 In the case of a claim for benefits, written notice shall
be given to the claiming Participant or Beneficiary of the
disposition of such claim, setting forth specific reasons for any
denial of such claim in whole or in part.  If a claim is denied in
whole or in part, the notice shall state that such Participant or
Beneficiary may, within sixty days of the receipt of such denial,
request in writing that the decision denying the claim be reviewed
by the Committee and provide the Committee with information in
support of his position by submitting such information in writing
to the Secretary of the Committee.

   6.3 The Committee shall review each claim for benefits which has
been denied in whole or in part and for which such review has been
requested and shall notify, in writing, the affected Participant or
Beneficiary of its decision and the reasons therefor.

   6.4 In the case of a request for status determination, written
notice shall be given to the requesting person within a reasonable
time setting forth specific reasons for the decision.

Section 7.  Amendment or Termination

   7.1 The Company reserves the right to amend or terminate this
Plan when, in the sole opinion of the Company, such amendment or
termination is advisable.  Any such amendment or termination shall
be made pursuant to a resolution of the Board or of the Employee
Benefits Policy Committee and shall be effective as provided for in
such resolution.

   7.2 No amendment or termination of this Plan shall directly or
indirectly deprive any current or former Participant, Beneficiary
or Surviving Spouse of all or any portion of any Supplemental
Retirement Benefit or Supplemental Surviving Spouse Benefit payment
which has commenced prior to the effective date of such amendment
or termination or the right to which has accrued  on such effective
date.
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Section 8.  General Provisions

   8.1 This Plan at all times shall be entirely unfunded and no
provision shall at any time be made with respect to segregating any
assets of the Company or any Affiliate for payment of any benefits
hereunder.  No Participant, Beneficiary, Surviving Spouse or any
other person shall have any interest in any particular assets of
the Company or any Affiliate by reason of the right to receive a
benefit under this Plan and any such Participant, Beneficiary,
Surviving Spouse or other person shall have only the rights of a
general unsecured creditor with respect to any rights under the
Plan.

   8.2 Except as otherwise expressly provided herein, all terms and
conditions of the Pension Plan applicable to a Pension Plan
Retirement Benefit or a Pension Plan Surviving Spouse Benefit shall
also be applicable to a Supplemental Retirement Benefit or a
Supplemental Surviving Spouse Benefits payable hereunder.  Any
Pension Plan Retirement Benefit or Pension Plan Surviving Spouse
Benefit, or any other benefit payable under the Pension Plan, shall
be paid solely in accordance with the terms and conditions of the
Pension Plan and nothing in this Plan shall operate or be construed
in any way to modify, amend or affect the terms and provisions of
the Pension Plan.

   8.3 Nothing contained in this Plan shall constitute a guaranty
by the Company or any other entity or person that the assets of the
Company or any Affiliate will be sufficient to pay any benefit
hereunder.

   8.4 No Participant or Surviving Spouse shall have any right to
a benefit under this Plan except in accordance with the terms of
this Plan.  Establishment of this Plan shall not be construed to
give any Participant the right to be retained in the service of the
Company or any Affiliate.

   8.5 No interest of any person or entity in, or right to receive
a benefit under, this Plan shall be subject in any manner to sale,
transfer, assignment, pledge, attachment, garnishment or other
alienation or encumbrance of any kind; nor any such interest or
right to receive a benefits be taken, either voluntarily or
involuntarily, for the satisfaction of the debts of, or other
obligations or claims against, such person or entity, including
claims for alimony, support, separate maintenance and claims in
bankruptcy proceedings.

   8.6 This Plan shall be construed and administered under the laws
of the United States and the State of New Jersey to the extent not
superseded by Federal law.
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   8.7 If the present value of any Supplemental Retirement Benefit
or Supplemental Surviving Spouse benefit is less than $3,500, the
Company may pay the present value of such Benefit to the
Participant or Surviving Spouse in a single lump sum in lieu of any
further benefit payments hereunder.

   8.8 Actuarial assumptions to determine the present value of any
benefit hereunder shall be the same as used to determine the
present value of benefits under the Pension Plan.

   8.9 If any person entitled to a benefit payment under this Plan
is deemed by the Committee to be incapable of personally receiving
and giving a valid receipt for such payment, then, unless and until
claim therefor shall have been made by a duly appointed guardian or
other legal representative of such person, the Committee may
provide for such payment or any part thereof to be made to any
other person or institution then contributing toward or providing
for the care and maintenance of such person.  Any such payment
shall be a payment for  the account of such person and a complete
discharge of any liability of the Company and this Plan therefor.

   8.10   This Plan shall not be automatically terminated by a
transfer or sale of assets of the Company or by the merger or
consolidation of the Company into or with any other company or
other entity, but this Plan shall be continued after such sale,
merger or consolidation only if and to the extent that the
transferee, purchaser or successor entity agrees to continue this
Plan.  In the event that this Plan is not continued by the
transferee, purchaser or successor entity, then this Plan shall
terminate subject to the provisions of Section 7.2.

   8.11   Each Participant shall keep the Company informed of his
current address and the current address of his spouse.  The Company
shall not be obligated to search for the whereabouts of any person. 
If the location of a Participant is not made known to the Company
within three (3) years after the date on which payment of the
Participant's Supplemental Retirement Benefit may first be made,
payment may be made as though the Participant had died at the end
of the three-year period.  If, within one additional year after
such three-year period has elapsed, or, within three years after
the actual death of a Participant, the Company is unable to locate
any Surviving Spouse of the Participant, then the Company shall
have no further obligation to pay any benefit hereunder to such
Participant or Surviving Spouse or any other person and such
benefit shall be irrevocably forfeited.

   8.12   Notwithstanding any of the preceding provisions of this
Plan, none of the Company, the Committee or any individual acting
as an employee or agent of the Company or the Committee shall be
liable to any Participant, former Participant, Surviving Spouse or
any other person for any claim, loss, liability or expense incurred
in connection with this Plan.
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Section 9.  Miscellaneous

   9.1 As used herein, words in the masculine gender shall include
the feminine and the singular shall include the plural, and vice
versa, unless otherwise required by the context.  Any headings used
herein are included for ease of reference only and are not to be
construed so as to alter the terms hereof.