<TABLE>
                                                                                                              EXHIBIT 12 (B)

-----------------------------------------------------------------------------------------------------------------------------
                                          PUBLIC SERVICE ELECTRIC AND GAS COMPANY
-----------------------------------------------------------------------------------------------------------------------------

                                     COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
                                         PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS

<CAPTION>

                                                                                                                  12 Months
                                                                                                                    Ended
                                                                YEARS ENDED DECEMBER 31,                          March 31,
                                         ------------  -------------  ------------  ------------  -------------  ------------
                                            1994           1995          1996          1997           1998          1999
                                         ------------  -------------  ------------  ------------  -------------  ------------

<S>                                             <C>            <C>           <C>           <C>            <C>           <C> 
Earnings as Defined in Regulation
     S-K (A):

Net Income                                      $659           $617          $535          $528           $604          $616
Income Taxes (B)                                 302            326           268           286            406           421
Fixed Charges                                    408            419           438           450            446           443
                                         ------------  -------------  ------------  ------------  ------------   ------------
Earnings                                      $1,369         $1,362        $1,241        $1,264         $1,456        $1,480
                                         ============  =============  ============  ============  =============  ============

Fixed Charges as Defined in
  Regulation S-K (C):

Total Interest Expense                          $396           $407          $399          $395           $390          $387
Interest Factor in Rentals                        12             12            11            11             11            11
Subsidiaries' Preferred Securities
    Dividend Requirements                         --             --            28            44             45            45
Preferred Stock Dividends                         42             49            23            12              9             9
Adjustment to Preferred Stock
    Dividends to state on a pre-income
    tax basis                                     19             24            12             6              6             7
                                         ------------  -------------  ------------  ------------  -------------  ------------
Total Fixed Charges                             $469           $492          $473          $468           $461          $459
                                         ============  =============  ============  ============  =============  ============

Ratio of Earnings to Fixed Charges              2.92           2.77          2.62          2.70           3.15          3.22
                                         ============  =============  ============  ============  =============  ============

<FN>
(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 and
     (b) the actual  amount of any  preferred  stock  dividend  requirements  of
     majority-owned  subsidiaries  which were  included  in such  fixed  charges
     amount but not deducted in the determination of pretax income.

(B)  Includes State income taxes and Federal income taxes for other income.

(C)  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 subsidiaries  and preferred stock  dividends,  increased to
     reflect the pre-tax  earnings  requirement for Public Service  Electric and
     Gas Company.

</FN>
</TABLE>