EXHIBIT 10

                  PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
               2007 EQUITY COMPENSATION PLAN FOR OUTSIDE DIRECTORS

I.    PURPOSE

      The purpose of this Public Service Enterprise Group Incorporated 2007
Equity Compensation Plan for Outside Directors is to advance the interests of
the Company and its stockholders by assisting the Company in attracting and
retaining individuals of superior talent, ability and achievement to serve on
its Board of Directors.

      It is intended that the Plan will be interpreted and administered to
prevent taxation under Section 409A of the Code. Any provision of or amendment
to this Plan that would cause any amount to be taxable under Section 409A with
respect to any individual is void and without effect. Any election by any
participant, and any administrative action by the Committee that would cause any
amount to be taxable under Section 409A with respect to any individual is void
and without effect under the Plan. In the event that a Participant fails to make
a Section 409A-compliant payment election, the Plan's default payment
provisions, as set forth in Subsection V.G and Article VIII, shall apply. It is
further intended that the Plan will be amended in accordance with present and
future guidance issued by the Treasury Department under Section 885 of the
American Jobs Creation Act of 2004.

II.   DEFINITIONS

      The following words and phrases shall have the meanings set forth below
unless a different meaning is required by the context:

      a)    ANNUAL MEETING: The Annual Meeting of Stockholders of the Company.

      b)    BOARD: The Board of Directors of the Company.

      c)    CODE: The Internal Revenue Code of 1986, as amended.

      d)    COMMITTEE: Those persons who are members of the Board but who are
            not Outside Directors.

      e)    COMMON STOCK: The Common Stock without nominal or par value of the
            Company.

      f)    COMPANY: Public Service Enterprise Group Incorporated, a corporation
            organized and existing under the laws of the State of New Jersey, or
            its successor or successors.

      g)    DISABILITY: Any physical or mental condition of a permanent nature
            which, in sole reasonable judgment of the Committee, renders an
            Outside Director incapable of performing the duties of a member of
            the Board.

<PAGE>

                                        2

      h)    EFFECTIVE DATE: Upon approval by stockholders at the 2007 Annual
            Meeting of Stockholders.

      i)    EXCHANGE ACT: The Securities and Exchange Act of 1934, as amended,
            or as it may be amended from time to time.

      j)    NYSE: The New York Stock Exchange, Inc.

      k)    OUTSIDE DIRECTOR: A member of the Board on or after the Effective
            Date who never has been employed by the Company or any of its
            affiliates.

      l)    PARTICIPANT: An Outside Director who receives a Stock Unit Award
            under this Plan.

      m)    PLAN: This Public Service Enterprise Group Incorporated 2007 Equity
            Compensation Plan for Outside Directors, as it may be amended from
            time to time.

      n)    SECURITIES ACT: The Securities Act of 1933, as amended, or as it may
            be amended from time to time.

      o)    SERVICE: A Director's service as a member of the Board.

      p)    STOCK UNIT AWARD: An award, representing the right to receive shares
            of Common Stock upon termination of service as an Outside Director,
            subject to the provisions of Article IV hereof

      q)    YEAR OF SERVICE: The annual period commencing on May 1st of each
            year and ending at the earlier of the succeeding April 30th or the
            next Annual Meeting of Stockholders. For any person first elected a
            member of the Board after May 1st of any year, his/her first Year of
            Service shall commence upon his/her election as a Director and shall
            end at the earlier of the succeeding April 30th or the next Annual
            Meeting of Stockholders..

III.  SHARES SUBJECT TO THE PLAN

      200,000 shares of Common Stock are reserved to satisfy awards of Stock
Units pursuant to the terms of this Plan. Such shares may be acquired directly
from the Company or, at the discretion of the Company, purchased on the open
market by the Company or its agent.

IV.   STOCK UNIT AWARDS

      A.    Upon the commencement of each Year of Service as a member of the
            Board, each Outside Director shall be granted an award of Stock
            Units in an amount as shall be established from time to time by the
            Board of Directors. The date of grant shall be the first business
            day of May. With respect to an Outside Director first elected

<PAGE>

                                        3

            as a director after May 1 of any year, the date of such Outside
            Director's initial award grant under this Plan shall be the first
            business day of the month next following the Outside Director's
            initial election as a member of the Board.

      B.    The number of Stock Units to be awarded on any particular date of
            grant shall be equal to the amount of the award grant (expressed in
            dollars) divided by the closing price of the Common Stock on the
            NYSE on the date of grant as provided in Section IV.A, rounded up to
            the next whole share.

      C.    If a Participant fails to complete the Year of Service with respect
            to which a Stock Unit Award has been granted, other than on account
            of Disability or death, such Stock Unit Award and any earnings
            thereon shall be prorated to reflect the portion of the Year of
            Service actually served by the Participant.

      D.    No stock certificates shall be issued in connection with any Stock
            Unit Award and the Stock Unit Awards shall be evidenced by
            bookkeeping account in the name of the Participant maintained by the
            Company. The Company shall not be required to segregate any amounts
            credited to these Stock Unit Award accounts, which shall be
            established merely as an accounting convenience. Amounts credited to
            the Stock Unit Award accounts shall at all times remain solely the
            property of the Company subject to the claims of its general
            creditors and available for the Company's use for whatever purpose
            desired. Stock Unit Award accounts shall be credited with dividend
            equivalents at a rate equal to such dividends as may be declared by
            the Company on the Common Stock. Such dividends equivalents shall
            invested as additional Stock Units as of the last business day of
            each quarter at a share price equal to closing price of the Common
            Stock on the NYSE on the date the transaction is credited.

      E.    Until distribution of shares of Common Stock from the Plan, neither
            a Participant nor any other person shall have any right to commute,
            sell, assign, transfer, pledge, anticipate, mortgage or otherwise
            encumber, transfer, hypothecate, alienate or convey the amounts, if
            any, payable hereunder, or any part thereof, which are, and all
            rights to which are expressly declared to be, unassignable and
            non-transferable. No part of the amounts payable shall, prior to
            actual payment, be subject to seizure, attachment, garnishment or
            sequestration for the payment of any debts, judgments, alimony or
            separate maintenance owed by a Participant or any other person, be
            transferable by operation of law in the event of a Participant's or
            any other person's bankruptcy or insolvency.

            PROVIDED, HOWEVER, THAT, in the event that a domestic relations
            order of any State is received by the Plan and thereafter determined
            to be a Qualified Domestic Relations Order (QDRO) within the meaning
            of Code section 414(p), the portion of the Account of the
            Participant to which such QDRO is directed shall be apportioned as
            specified in such QDRO, valued as of the business day preceding the
            date specified in such QDRO. Upon notice to the Committee that a
            QDRO is being sought with respect to a Participant's Account, no
            distribution shall be

<PAGE>

                                        4

            made to a Participant until such time as the status of the QDRO is
            determined. The alternate payee of the Participant's Account shall
            thereafter participate in the Plan in accordance with its terms,
            except such person shall not have the rights or benefits provided in
            Subsection IV.A If a QDRO is issued and the amount awarded the
            alternate payee exceeds the value of the Participant's Account, the
            amount apportioned shall be limited to the amount then in the
            account. If a QDRO so provides, benefits may be paid to an alternate
            payee before they would otherwise be distributable under the Plan,
            and no such distribution to an alternate payee shall be treated as a
            distribution to the Participant for purposes of Article V.

      F.    No Participant shall have any of the rights of a stockholder
            (including the right to vote and to receive dividends and other
            distributions) with respect to Stock Units unless and until shares
            of Common Stock are actually issued in his/her name.

      G.    In the event of any stock dividend, stock split, combination or
            exchange of shares, merger, consolidation, spin-off or other
            distribution (other than normal cash dividends) of Company assets to
            shareholders, or any other change affecting the Common Stock, such
            adjustments, if any, as are appropriate to reflect such change shall
            be made with respect to outstanding Stock Unit Awards.

      H.    Upon a Change in Control of the Company all outstanding Stock Unit
            Awards shall be considered as having met the requirements of Section
            IV.C. For the purposes of this Plan, "Change in Control" shall mean
            the occurrence of any of the following events:

            a)    any "person" (within the meaning of Section 13(d) of the
                  Exchange Act is or becomes the beneficial owner within the
                  meaning of Rule 13d-3 under the Exchange Act (a "Beneficial
                  Owner"), directly or indirectly, of securities of the Company
                  (not including in the securities beneficially owned by such
                  person any securities acquired directly from the Company or
                  its affiliates) representing 25% or more of the combined
                  voting power of the Company's then outstanding securities,
                  excluding any person who becomes such a Beneficial Owner in
                  connection with a transaction described in clause (1) of
                  paragraph (c) below; or

            b)    the following individuals cease for any reason to constitute a
                  majority of the number of directors then serving: individuals
                  who, on December 15, 1998, constitute the Board of Directors
                  and any new director (other than a director whose initial
                  assumption of office is in connection with an actual or
                  threatened election contest, including but not limited to a
                  consent solicitation. relating to the election of directors of
                  the Company) whose appointment or election by the Board of
                  Directors or nomination for election by the Company's
                  stockholders was approved or recommended by a vote of at least
                  two-thirds (2/3) of the directors then still in office who
                  either were directors on April 17, 2007 or whose appointment,
                  election or nomination for election was previously so approved
                  or recommended: or

<PAGE>

                                        5

            c)    there is consummated a merger or consolidation of the Company
                  or any direct or indirect wholly owned subsidiary of the
                  Company with any other corporation other than (1) a merger or
                  consolidation which would result in the voting securities of
                  the Company outstanding immediately prior to such merger or
                  consolidation continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of
                  the surviving entity or any parent thereof), in combination
                  with the ownership of any trustee or other fiduciary holding
                  securities under an employee benefit plan of the Company or
                  any subsidiary of the Company, at least 75% of the combined
                  voting power of the securities of the Company or such
                  surviving entity or any parent thereof outstanding immediately
                  after such merger or consolidation, or (2) a merger or
                  consolidation effected to implement a recapitalization of the
                  Company (or similar transaction) in which no person is or
                  becomes the Beneficial Owner, directly or indirectly, of
                  securities of the Company representing 25% or more of the
                  combined voting power of the Company's then outstanding
                  securities; or

            d)    the stockholders of the Company approve a plan of complete
                  liquidation or dissolution of the Company or there is
                  consummated an agreement for the sale or disposition by the
                  Company of all or substantially all of the Company's assets,
                  other than a sale or disposition by the Company of all or
                  substantially all of the Company's assets to an entity, at
                  least 75% of the combined voting power of the voting
                  securities of which are owned by stockholders of the Company
                  in substantially the same proportions as their ownership of
                  the Company immediately prior to such sale.

            Notwithstanding the foregoing subparagraphs (a), (b), (c) and (d), a
            "Change in Control" shall not be deemed to have occurred by virtue
            of the consummation of any transaction or series of integrated
            transactions immediately following which the record holders of the
            Common Stock of the Company immediately prior to such transaction or
            series of transactions continue to have substantially the same
            proportionate ownership in an entity which owns all or substantially
            all of the assets of the Company immediately following such
            transaction or series of transactions.

V.    DISTRIBUTIONS

      A.    Upon the termination of a Participant's service as an Outside
            Director, the Company shall issue to the Participant certificates
            for shares of Common Stock equal to the number of whole Stock Units
            in his/her account without any legend or restriction of any kind in
            accordance with such Participant's distribution elections hereunder.
            Any remaining fractional Stock Units shall be paid in cash based
            upon the closing price of the Common Stock on the NYSE on the day
            prior to the date of distribution.

<PAGE>

                                        6

      B.    By written notice to the Plan filed with the Company's Secretary, a
            Participant may elect to have distribution of his/her Stock Unit
            Award account commence: (1) on the 30th day following the date of
            termination of the Participant's Service, (2) on the 15th day of
            January next following the date of termination of the Participant's
            Service or (3) on the 15th day of January of any calendar year
            following termination of the Participant's Service, but not later
            than the January following the Participant's 72nd birthday, unless
            the Participant is still a Director at such time, in which case
            distribution shall commence on the 30th day following the date the
            Participant ceases to be a Director. Any such election, or any
            change in such election (by such subsequent written notice to the
            Secretary of the Company), shall apply only to future awards. In the
            event no election is made as to the commencement of distribution,
            such distribution shall commence on the 30th day following the date
            the Participant ceases to be a Director of the Company.

      C.    By written notice to the Plan filed with the Company's Secretary, a
            Participant may elect to receive the distribution of his/her Stock
            Unit Award account in the form of (1) one lump-sum payment, or (2)
            annual distributions over a period selected by the Participant of up
            to ten years. In the event a lump-sum payment is made under the
            Plan, the amount then standing to the Participant's credit in his/
            her Stock Unit Award account shall be paid to the Participant on the
            date determined under Section V.B. In the case of a distribution
            over a period of years, the Company shall pay to the Participant,
            commencing on the date determined under Section V.B, annual
            installments from the amount then standing to his or her credit in
            his or her Stock Unit Award account, including earnings credits on
            the unpaid balance to the date of distribution. The amount of each
            installment shall be determined by dividing the then unpaid balance,
            plus earnings credits, in the Participant's Stock Unit Award account
            by the number of installments remaining to be paid. If a Participant
            does not make an election as to the manner of distribution of his or
            her Stock Unit Award account, such distribution shall be made in the
            form of a lump sum.

      D.    In the event of a Participant's death, the balance of the
            Participant's Stock Unit Award account shall be distributed to the
            Participant's Beneficiary(ies) in a lump-sum payment within 30 days
            following the Participant's death A Participant may change
            Beneficiary designations by filing a subsequent notice with the
            Secretary of the Company. If a Participant does not make a
            Beneficiary designation, or if the Beneficiary has predeceased the
            Participant, such distribution shall be made as a lump-sum to
            his/her estate.

      E.    Participants may, (i) by notice filed with the Company prior to
            December 31st of any year, make changes of distribution elections on
            a prospective basis; and (ii) by notice filed with the Company, make
            changes of distribution elections with respect to prior deferred
            compensation as long as (A) any such new distribution election is
            made at least one year prior to the date that the commencement of
            the distribution would otherwise have occurred and (B) the revised
            commencement

<PAGE>

                                        7

            date is at least five years later than the date that the
            commencement of the distribution would otherwise have occurred;
            provided that such an election may not defer payment beyond the
            later of the January following the Participant's 72nd birthday or
            the Participant's termination of service as a director. For the
            purposes of this subsection V.E, if a Participant has elected a
            distribution in installments, each installment shall be deemed a
            separate election.

      F.    Notwithstanding any other provision of the Plan, if the Board, by
            vote of the Outside Directors, other than the Participant making the
            claim, shall determine in its sole discretion that the time of
            payment of a Participant's Stock Unit Award account should be
            advanced because of protracted illness or other undue hardship, then
            the Board may advance the time or times of payment (whether before
            or after the date of Participant's termination of service as a
            Director) of an amount or amounts needed to meet the emergency in
            accordance with the requirements of Code Section 409A and the
            regulations promulgated thereunder.

      G.    DISTRIBUTION IN CASE OF CERTAIN TAX EVENTS - If, with respect to any
            Participant, the Plan fails to meet the requirements of the Code
            with respect to the deferral of tax liability, the Company may
            accelerate distribution from a Participant's Account amounts
            sufficient to meet such Participant's resulting Federal, State,
            Local and/or Foreign tax liability (including any interest and
            penalties).

VI.   FURTHER CONDITIONS

      A.    Unless the shares of Common Stock to be distributed pursuant to the
            Plan have been registered with the Securities and Exchange
            Commission under the Securities Act prior to issuance, the
            Participant receiving such shares must represent in writing to the
            Company that such shares of Common Stock are being acquired for
            investment purposes only and not with a view towards the further
            resale or distribution thereof and must supply to the Company such
            other documentation as may be required by the Company, unless in the
            opinion of counsel to the Company such representation, agreement or
            documentation is not necessary to comply with the Securities Act.

      B.    The Company shall not be obligated to deliver any shares of Common
            Stock until they have been listed on each securities exchange on
            which the shares of Common Stock may then be listed or until there
            has been qualification under or compliance with such state or
            federal laws, rules or regulations as the Company may deem
            applicable. The Company shall use reasonable efforts to obtain such
            listing, qualification and compliance.

      C.    The Committee may make such provisions and take such steps as it may
            deem necessary or appropriate for the withholding of any taxes that
            the Company is required by any law or regulation of any governmental
            authority, whether federal, state or local, domestic or foreign, to
            withhold in connection with the award of

<PAGE>

                                        8

            Stock Units or the distribution of any Common Stock, including, but
            not limited to (i) the withholding of delivery of certificates for
            shares of Common Stock until the Participant reimburses the Company
            for the amount the Company is required to withhold with respect to
            such taxes, (ii) the canceling of any number of shares of Common
            Stock issuable in an amount sufficient to reimburse the Company for
            the amount it is required to so withhold or (iii) withholding the
            amount due from any such Participant's other compensation.

VII.  ADMINISTRATION

      The Plan shall be administered by the Committee, which shall establish
rules and regulations regarding the administration and operation of the Plan.

VIII. TERMINATION, MODIFICATION AND AMENDMENT

      Although the Company anticipates that it will continue the Plan for an
indefinite period of time, there is no guarantee that the Company will continue
the Plan or will not terminate the Plan at any time in the future. Accordingly,
the Company, by the Board of Directors, reserves the right to discontinue its
sponsorship of the Plan or to terminate the Plan (or both), at any time, by the
action of the Board of Directors. In general, upon the termination of the Plan,
the affected Participants shall receive payment of their benefits in accordance
with the terms of Article V. However, the Company may, in its discretion,
terminate the entire Plan and pay each Participant a single lump-sum
distribution of his or her entire Account Balance, in the event that the Company
satisfies any of the following:

      (a)   such distributions are made between 12 and 24 months following the
termination of the Plan, and the Company does not adopt a new plan which would
be aggregated with this Plan under IRS guidance under Code Section 409A at any
time within the five years following the Plan termination.

      (b)   the Plan is terminated within the 30 days preceding or the 12 months
following a Change in Control, all payments are made within 12 months of the
date of termination, and all substantially similar arrangements sponsored by the
Company are terminated as well.

      (c)   the Plan is terminated within 12 months of a corporate dissolution,
as defined in IRS guidance under Code Section 409A, and lump sum payments are
made in the latest of (i) the year of the termination, (ii) the year in which
amounts are no longer subject to a substantial risk of forfeiture; or (iii) the
first year in which payment is administratively practicable.

The termination of the Plan shall not adversely affect any Participant or
Beneficiary who has become entitled to the payment of any benefits under the
Plan as of the date of termination.

IX.   NOT A CONTRACT FOR CONTINUED SERVICE

      Nothing contained in the Plan or in any restricted stock agreement
executed pursuant hereto shall be deemed to confer upon any Outside Director to
whom Stock Unit Awards are or may be awarded hereunder any right to remain a
member of the Board or in any way limit the

<PAGE>

                                        9

right of the Board or the Stockholders to terminate or fail to renominate or
reelect any such Outside Director as a member of the Board.

X.    MISCELLANEOUS

      A.    The costs and expenses of administering the Plan shall be borne by
            the Company and shall not be charged against any award or to any
            Outside Director receiving an award.

      B.    This Plan and actions taken in connection herewith shall be governed
            and construed in accordance with the laws of the State of New
            Jersey.

      C.    The captions and section numbers appearing in this Plan are inserted
            only as a matter of convenience. They do not define, limit or
            describe the scope or intent of the provisions of this Plan. In this
            Plan, words in the singular number include the plural and in the
            plural include the singular; and words of the masculine gender
            include the feminine and the neuter, and when the sense so
            indicates, words of the neuter gender may refer to any gender.

      D.    Whenever the time for payment or performance hereunder shall fall on
            a weekend or public holiday, such payment or performance shall be
            deemed to be timely if made on the next succeeding business day.