EXHIBIT
12.1

PUBLIC
SERVICE ELECTRIC AND GAS COMPANY
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

|                                                       |  | For the Nine Months
        Ended September 30, |      | For the Years
        Ended
        December 31, |  
|------------------------------------------------------ |  | ----------------------------------------------- | ---- | ------------------------------------------------ | -
|                                                       |  |                                                 |      |                                                  |  
|                                                       |  | 2003                                            |      | 2002                                             |  
|                                                       |  |                                                 |      |                                                  |  
|                                                       |  | (Millions, except
        ratios)               |     
|Earnings
        as Defined in Regulation S-K (A):     |  |                                                 |      |                                                  |  
|                                                       |  |                                                 |      |                                                  |  
|Pre-tax
        Income from Continuing Operations      |  | $                                               | 278  |                                                  | $
|Fixed
        Charges                                  |  |                                                 | 291  |                                                  |  
|AFUDC                                                  |  |                                                 |     |                                                  |  
|                                                       |  |                                                 |      |                                                  |  
|Earnings                                               |  | $                                               | 569  |                                                  | $
|                                                       |  |                                                 |      |                                                  |  
|                                                       |  |                                                 |      |                                                  |  
|Fixed
        Charges as Defined in Regulation S-K (B) |  |                                                 |      |                                                  |  
|                                                       |  |                                                 |      |                                                  |  
|Interest
        Expense                               |  | $                                               | 291  |                                                  | $
|Interest
        Factor in Rentals                     |  |                                                 |     |                                                  |  
|                                                       |  |                                                 |      |                                                  |  
|Total
        Fixed Charges                            |  | $                                               | 291  |                                                  | $
|                                                       |  |                                                 |      |                                                  |  
|                                                       |  |                                                 |      |                                                  |  
|Ratio
        of Earnings to Fixed Charges             |  |                                                 | 1.96 |                                                  |  
|                                                       |  |                                                 |      |                                                  |  

(A)

The term earnings shall be defined as
pretax income from continuing operations. Add to pretax income the amount of
fixed charges adjusted to exclude the amount of any interest capitalized during
the period.

(B)

Fixed Charges represent (a) interest, whether
expensed or capitalized, (b) amortization of debt discount, premium and expense
and (c) an estimate of interest implicit in rentals.