EXHIBIT 12.3

PUBLIC SERVICE ELECTRIC AND GAS COMPANY
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
Plus Preferred Security Dividend Requirements

|                                                                              |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  
|----------------------------------------------------------------------------- |  | -------------------------- | ---- | -------------------- | - | ---- | - | ---- | ---- | ---- | - | ---- | - | ---- | ---- | - | - | ---- | - | - | ---- | -
|                                                                              |  | For the
 Nine Months       |      | For the
 Years Ended |  
|                                                                              |  | Ended
 September 30,       |      | December
 31,        |  
|                                                                              |  |                            |      |                      |  
|                                                                              |  | 2008                       |      | 2007                 |   | 2007 |   | 2006 |      | 2005 |   | 2004 |   | 2003 |     
|                                                                              |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |     
|                                                                              |  | (Millions,
 except ratios) |     
|                                                                              |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  
|Earnings as Defined in Regulation S-K
(A):                                    |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  
|                                                                              |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  
|Pre-tax Income from Continuing
Operations                                     |  | $                          | 448  |                      | $ | 516  |   | $    | 637  |      | $ | 448  |   | $    | 583  |   | $ | 592  |   | $ | 376  |  
|Fixed Charges                                                                 |  |                            | 249  |                      |   | 255  |   |      | 339  |      |   | 353  |   |      | 349  |   |   | 369  |   |   | 397  |  
|Preferred Securities Pre Tax                                                  |  |                            | (5   | )                    |   | (5   | ) |      | (7   | )    |   | (7   | ) |      | (7   | ) |   | (7   | ) |   | (7   | )
|                                                                              |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  
|Earnings                                                                      |  | $                          | 692  |                      | $ | 766  |   | $    | 969  |      | $ | 794  |   | $    | 925  |   | $ | 954  |   | $ | 766  |  
|                                                                              |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  
|                                                                              |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  
|Fixed Charges as Defined in Regulation S-K
(B)                                |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  
|                                                                              |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  
|Interest Expense                                                              |  | $                          | 244  |                      | $ | 250  |   | $    | 332  |      | $ | 346  |   | $    | 342  |   | $ | 362  |   | $ | 390  |  
|Interest Factor in Rentals                                                    |  |                            |     |                      |   |     |   |      |     |      |   |     |   |      |     |   |   |     |   |   |     |  
|Preferred Securities Dividends                                                |  |                            | 3    |                      |   | 3    |   |      | 4    |      |   | 4    |   |      | 4    |   |   | 4    |   |   | 4    |  
|Adjustment to state Preferred Securities
Dividends on a pre-income tax
 basis |  |                            | 2    |                      |   | 2    |   |      | 3    |      |   | 3    |   |      | 3    |   |   | 3    |   |   | 3    |  
|                                                                              |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  
|Total Fixed Charges                                                           |  | $                          | 249  |                      | $ | 255  |   | $    | 339  |      | $ | 353  |   | $    | 349  |   | $ | 369  |   | $ | 397  |  
|                                                                              |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  
|                                                                              |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  
|Ratio of Earnings to Fixed Charges                                            |  |                            | 2.78 |                      |   | 3.00 |   |      | 2.86 |      |   | 2.25 |   |      | 2.65 |   |   | 2.59 |   |   | 1.93 |  
|                                                                              |  |                            |      |                      |   |      |   |      |      |      |   |      |   |      |      |   |   |      |   |   |      |  

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 (a) the amount of any
 interest capitalized during the period (b) the actual amount of any preferred
 securities dividend requirements of majority owned subsidiaries (c) preferred
 stock dividends which were included in such fixed charges amount but not
 deducted in the determination of pre-tax income.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(B) | Fixed Charges represent (a)
 interest, whether expensed or capitalized, (b) amortization of debt discount
 and premium expense (c) an estimate of interest implicit in rentals and (d)
 preferred securities dividend requirements of majority owned subsidiaries and
 preferred stock dividends, increased to reflect the pre-tax earnings
 requirement for PSE&G.                                                                                                     

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