**EXHIBIT 12**

 

**PUBLIC SERVICEENTERPRISE GROUP INCORPORATED**

**COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES**

 

 

 

|                                                                |   | **For          the Nine****Months Ended****September 30,** |   | **For          the Years Ended****December 31,** |   |
|---------------------------------------------------------------------|--------|------------------------------------------------------------|--------|--------------------------------------------------|--------|
|                                                                |   | **2006**                                                   |   | **2005**                                         |   | **2005** |   | **2004** |   | **2003** |   | **2002** |   | **2001** |   |
|                                                                |   | **(Millions,          except ratios)**                     |   |
| Earnings          as Defined in Regulation S-K (A):                 |   |                                                       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |                                                       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-tax          Income from Continuing Operations                  |   | $                                                          | 938    |                                             | $      | 1,052 |   | $ | 1,399 |  | $ | 1,237 |   | $ | 1,324 |   | $ | 659 |   | $ | 1,139 |   |
| (Income)          Loss from Equity Investees, net of Distributions  |   |                                                       | (55    | )                                                |   | (77 | ) |   | (28 | ) |   | 78 |   |   | 60 |   |   | (2 | ) |   | (59 | ) |
| Fixed          Charges                                              |   |                                                       | 668    |                                             |   | 701 |   |   | 931 |   |   | 928 |   |   | 963 |   |   | 946 |   |   | 876 |   |
| Capitalized          Interest (B)                                   |   |                                                       | (30    | )                                                |   | (73 | ) |   | (92 | ) |   | (109 | ) |   | (116 | ) |   | (104 | ) |   | (74 | ) |
| Preferred          Securities Dividend Requirements of Subsidiaries |   |                                                       | (5     | )                                                |   | (9 | ) |   | (6 | ) |   | (6 | ) |   | (6 | ) |   | (6 | ) |   | (8 | ) |
| Total          Earnings                                             |   | $                                                          | 1,516  |                                             | $      | 1,594 |   | $ | 2,204 |   | $ | 2,128 |   | $ | 2,225 |   | $ | 1,493 |   | $ | 1,874 |   |
|                                                                |   |                                                       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed          Charges as Defined in Regulation S-K (C)             |   |                                                       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |                                                       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest          Expense                                           |   | $                                                          | 655    |                                             | $      | 684 |   | $ | 915 |   | $ | 913 |   | $ | 949 |   | $ | 926 |   | $ | 852 |   |
| Interest          Factor in Rentals                                 |   |                                                       | 8      |                                             |   | 8 |   |   | 10 |   |   | 9 |   |   | 8 |   |   | 14 |   |   | 16 |   |
| Preferred          Securities Dividend Requirements of Subsidiaries |   |                                                       | 5      |                                             |   | 9 |   |   | 6 |   |   | 6 |   |   | 6 |   |   | 6 |   |   | 8 |   |
| Total          Fixed Charges                                        |   | $                                                          | 668    |                                             | $      | 701 |   | $ | 931 |   | $ | 928 |   | $ | 963 |   | $ | 946 |   | $ | 876 |   |
|                                                                |   |                                                       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio          of Earnings to Fixed Charges                         |   |                                                       | 2.27   |                                             |   | 2.27 |   |   | 2.37 |   |   | 2.29 |   |   | 2.31 |   |   | 1.58 |   |   | 2.14 |   |
|                                                                |   |                                                       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

 

 

| (A)    | The          term “earnings” shall be defined as pre-tax Income from Continuing          Operations before income or loss from equity investees plus distributed          income from equity investees. Add to pre-tax income the amount of fixed          charges adjusted to exclude (a) the amount of any interest capitalized          during the period and (b) the actual amount of any preferred securities          dividend requirements of majority-owned subsidiaries stated on a pre-tax          level. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (B)    | Fixed          Charges represent (a) interest, whether expensed or capitalized, (b)          amortization of debt discount, premium and expense, (c) an estimate          of interest implicit in rentals and (d) preferred securities dividend          requirements of majority-owned subsidiaries stated on a pre-tax level.                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (C)    | Capitalized          Interest excludes AFUDC for PSE&G.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

 

 

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