EXHIBIT 12

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



                                                       -------------------------
                                                        For the Quarters Ended
                                                               March 31,
                                                       -------------------------
                                                            2002        2001
                                                       -----------  ------------

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

Net Income                                                     $68          $112
Income Taxes                                                    42            77
Fixed Charges                                                  107            72
                                                       -----------  ------------
Earnings                                                      $217          $261
                                                       ===========  ============

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

Total Interest Expense                                        $101           $58
Interest Factor in Rentals                                       3             3
Subsidiaries' Preferred Securities
    Dividend Requirements                                        3            11
                                                       -----------  ------------
Total Fixed Charges                                           $107           $72
                                                       ===========  ============

Ratio of Earnings to Fixed Charges                            2.03          3.63
                                                       ===========  ============

(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)  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.

<PAGE>
                                                                   EXHIBIT 12(A)

                     PUBLIC SERVICE ELECTRIC AND GAS COMPANY
                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                   PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS


                                                       -------------------------
                                                        For the Quarters Ended
                                                               March 31,
                                                       -------------------------
                                                           2002         2001
                                                       -----------  ------------

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

Net Income                                                     $68          $112
Income Taxes                                                    42            77
Fixed Charges                                                  109            77
                                                       -----------  ------------
Earnings                                                      $219          $266
                                                       ===========  ============

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

Total Interest Expense                                        $101           $58
Interest Factor in Rentals                                       3             3
Subsidiaries' Preferred Securities
    Dividend Requirements                                        3            11
Preferred Stock Dividends                                        1             3
Adjustment to Preferred Stock Dividends to
    state on a pre-income tax basis                              1             2
                                                       -----------  ------------
Total Fixed Charges                                           $109           $77
                                                       ===========  ============

Ratio of Earnings to Fixed Charges                            2.01          3.45
                                                       ===========  ============

(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)  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.