EXHIBIT 12
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<CAPTION>

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



                                                                  --------------------------
                                                                     For the Six Months
                                                                       Ended June 30,
                                                                  --------------------------
                                                                     2002          2001
                                                                  -----------   ------------
<S>                                                                     <C>            <C>
Earnings as Defined in Regulation S-K (A):

Pre-tax Income from Continuing Operations                               $117           $239
Fixed Charges                                                            204            229
                                                                  -----------   ------------
Earnings                                                                $321           $468
                                                                  ===========   ============

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

Total Interest Expense                                                  $203           $229
Interest Factor in Rentals                                                 1              1
Subsidiaries' Preferred Securities Dividend Requirements                   7             18
                                                                  -----------   ------------
Total Fixed Charges                                                     $211           $248
                                                                  ===========   ============

Ratio of Earnings to Fixed Charges                                      1.52           1.89
                                                                  ===========   ============

(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 securities dividend  requirements of
     majority-owned subsidiaries.

(B)  Fixed  Charges  represent (a) interest,  whether  expensed or  capitalized,
     (including  interest  on the  securitized  debt) (b)  amortization  of debt
     discount,  premium and  expense,  (c) an  estimate of interest  implicit in
     rentals,   and  (d)   preferred   securities   dividend   requirements   of
     subsidiaries.
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<PAGE>
                                                                   EXHIBIT 12(A)
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<CAPTION>

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


                                                                  --------------------------
                                                                     For the Six Months
                                                                       Ended June 30,
                                                                  --------------------------
                                                                      2002          2001
                                                                  -----------   ------------
<S>                                                                      <C>           <C>
Earnings as Defined in Regulation S-K (A):

Pre-tax Income from Continuing Operations                               $117           $239
Fixed Charges                                                            204            229
                                                                  -----------   ------------
Earnings                                                                $321           $468
                                                                  ===========   ============

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

Total Interest Expense                                                  $203           $229
Interest Factor in Rentals                                                 1              1
Subsidiaries' Preferred Securities Dividend Requirements                   7             18
Preferred Stock Dividends                                                  2              4
Adjustment to Preferred Stock Dividends to state on a
   pre-income tax basis                                                    1              3
                                                                  -----------   ------------
Total Fixed Charges                                                     $214           $255
                                                                  ===========   ============

Ratio of Earnings to Fixed Charges                                      1.50           1.84
                                                                  ===========   ============

(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 pretax income.

(B)  Fixed  Charges  represent (a) interest,  whether  expensed or  capitalized,
     (including  interest  on the  securitized  debt) (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.

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