Document:

Exhibit 4-29

                              SUPPLEMENTAL MORTGAGE
================================================================================

                             Supplemental Indenture

                               Dated March 1, 2008

                                   ----------

                                 SUPPLEMENTAL TO
                          FIRST AND REFUNDING MORTGAGE
                              DATED AUGUST 1, 1924

                                   ----------

                     PUBLIC SERVICE ELECTRIC AND GAS COMPANY
                                       TO
                          US BANK NATIONAL ASSOCIATION
                                     Trustee
                                 21 South Street
                          Morristown, New Jersey 07960

                                   ----------

                           PROVIDING FOR THE ISSUE OF
                $ 300,000,000 FIRST AND REFUNDING MORTGAGE BONDS,
                         FLOATING RATE SERIES B DUE 2010

--------------------------------------------------------------------------------

                     RECORD IN MORTGAGE BOOK AND RETURN TO:
                              JAMES T. FORAN, ESQ.
                               80 PARK PLAZA, T5B
                             NEWARK, N.J. 07102-4194

Prepared by

/s/ Edward C. Fedak
-----------------------
(EDWARD C. FEDAK, ESQ.)

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
RECITALS.......................................................................1
FORM OF BOND...................................................................3
FORM OF CERTIFICATE OF AUTHENTICATION..........................................3
GRANTING CLAUSES...............................................................8

                                   ARTICLE I.
                      BONDS OF THE FLOATING RATE SERIES B.
DESCRIPTION OF SERIES..........................................................8

                                   ARTICLE II.
               REDEMPTION OF BONDS OF THE FLOATING RATE SERIES B.
SECTION 2.01.     Redemption--Redemption Price.................................9
SECTION 2.02.     Redemptions Pursuant to Section 4C of
                    Article Eight of the Indenture.............................9
SECTION 2.03.     Interest on Called Bonds to Cease...........................10
SECTION 2.04.     Bonds Called in Part........................................10
SECTION 2.05.     Provisions of Indenture Not Applicable......................10

                                  ARTICLE III.
                                 MISCELLANEOUS.
SECTION 3.01.     Authentication of Bonds of Floating Rate Series B...........11
SECTION 3.02.     Authentication Agent........................................11
SECTION 3.03.     Additional Restrictions on Authentication of
                    Additional Bonds Under Indenture..........................11
SECTION 3.04.     Restriction on Dividends....................................12
SECTION 3.05.     Use of Facsimile Seal and Signatures........................12
SECTION 3.06.     Time for Making of Payment..................................12
SECTION 3.07.     Effective Period of Supplemental Indenture..................12
SECTION 3.08      Effect of Approval of Board of Public Utilities
                    of the State of New Jersey................................12
Section 3.09.     Execution in Counterparts...................................12
ACKNOWLEDGEMENTS..............................................................14
CERTIFICATE OF RESIDENCE......................................................15

<PAGE>

      SUPPLEMENTAL  INDENTURE,  dated the 1st day of MARCH 2008, for convenience
of  reference  and  effective  from the time of execution  and delivery  hereof,
between PUBLIC SERVICE ELECTRIC AND GAS COMPANY,  a corporation  organized under
the laws of the State of New Jersey,  hereinafter called the "Company", party of
the first part, and US Bank National Association, a national banking association
organized under the laws of the United States of America,  as successor  Trustee
to Wachovia Bank, National Association (previously known as Fidelity Union Trust
Company) under the indenture dated August 1, 1924, below mentioned,  hereinafter
called the "Trustee", party of the second part.

      WHEREAS,  on July 25, 1924, the Company executed and delivered to FIDELITY
UNION TRUST  COMPANY,  a certain  indenture  dated  August 1, 1924  (hereinafter
called the  "Indenture")  to secure  and to  provide  for the issue of First and
Refunding Mortgage Gold Bonds of the Company; and

      WHEREAS,  the Indenture has been recorded in the following counties of the
State of New Jersey, in the offices,  and therein in the books and at the pages,
as follows:

                                                                     Page
County              Office               Book Number                Number
--------------------------------------------------------------------------------
Atlantic            Clerk's        1955 of Mortgages                  160
Bergen              Clerk's        94 of Chattel Mortgages         123 etc.
Burlington          Clerk's        693 of Mortgages                 88 etc.
                                   52 of Chattel Mortgages       Folio 8 etc.
Camden              Register's     177 of Mortgages             Folio 354 etc.
                                   45 of Chattel Mortgages         184 etc.
Cumberland          Clerk's        239 of Mortgages                 1 etc.
                                   786 of Mortgages                638 & c.
Essex               Register's     437 of Chattel Mortgages          1-48
                                   T-51 of Mortgages                341-392
Gloucester          Clerk's        34 of Chattel Mortgages         123 etc.
Hudson              Register's     142 of Mortgages                 7 etc.
                                   453 of Chattel Mortgages         9 etc.
                                   1245 of Mortgages               484, etc.
Hunterdon           Clerk's        151 of Mortgages                   344
Mercer              Clerk's        67 of Chattel Mortgages          1 etc.
Middlesex           Clerk's        384 of Mortgages                 1 etc.
                                   113 of Chattel Mortgages         3 etc.
                                   437 of Mortgages                294 etc.
Monmouth            Clerk's        951 of Mortgages                291 & c.
Morris              Clerk's        N-3 of Chattel Mortgages        446 etc.
                                   F-10 of Mortgages               269 etc.
Ocean               Clerk's        1809 of Mortgages                  40
Passaic             Register's     M-6 of Chattel Mortgages        178, etc.
Salem               Clerk's        R-13 of Mortgages               268 etc.
                                   267 of Mortgages                249 etc.
Somerset            Clerk's        46 of Chattel Mortgages         207 etc.
                                   N-10 of Mortgages                1 etc.
Sussex              Clerk's        123 of Mortgages                 10 & c.
Union               Register's     9584 of Mortgages               259 etc.
Warren              Clerk's        124 of Mortgages                141 etc.

<PAGE>
                                       2

and

      WHEREAS, the Indenture has also been recorded in the following counties of
the Commonwealth of Pennsylvania,  in the offices,  and therein in the books and
at the pages, as follows:

                                                                     Page
County              Office                     Book Number          Number
--------------------------------------------------------------------------
Adams               Recorder's             22 of Mortgages            105
Armstrong           Recorder's            208 of Mortgages            381
Bedford             Recorder's             90 of Mortgages            917
Blair               Recorder's            671 of Mortgages            430
Cambria             Recorder's            407 of Mortgages            352
Cumberland          Recorder's            500 of Mortgages            136
Franklin            Recorder's            285 of Mortgages            373
Huntington          Recorder's            128 of Mortgages             47
Indiana             Recorder's            197 of Mortgages            281
Lancaster           Recorder's            984 of Mortgages              1
Montgomery          Recorder's           5053 of Mortgages           1221
Westmoreland        Recorder's           1281 of Mortgages            198
York                Recorder's           31-V of Mortgages            446

and

      WHEREAS,  the  Indenture  granted,   bargained,  sold,  aliened,  remised,
released,  conveyed,  confirmed,  assigned,  transferred  and set over  unto the
Trustee certain  property of the Company,  more fully set forth and described in
the Indenture,  then owned or which might thereafter be acquired by the Company;
and

      WHEREAS, the Company, by various supplemental indentures,  supplemental to
the  Indenture,  the  last of  which  was  dated  April 1,  2007,  has  granted,
bargained,  sold, aliened, remised,  released,  conveyed,  confirmed,  assigned,
transferred  and set over  unto the  Trustee  certain  property  of the  Company
acquired by it after the execution and delivery of the Indenture; and

      WHEREAS,  since the execution and delivery of said supplemental  indenture
dated April 1, 2007, the Company has acquired property which, in accordance with
the provisions of the Indenture,  is subject to the lien thereof and the Company
desires to confirm such lien; and

      WHEREAS, the Indenture has been amended or supplemented from time to time;
and

      WHEREAS, it is provided in the Indenture that no bonds other than those of
the 5-1/2% Series due 1959 therein  authorized may be issued thereunder unless a
supplemental  indenture  providing for the issue of such additional  bonds shall
have been executed and delivered by the Company to the Trustee; and

      WHEREAS,  the  Company  desires to provide  for the issue of  $300,000,000
principal  amount of bonds to be  secured  by said  Indenture  of a series to be
designated as "First and Refunding  Mortgage  Bonds,  Floating Rate Series B due
2010" (hereinafter sometimes called "Floating Rate Series B"); and

      WHEREAS,  the text of the Bonds of the  Floating  Rate Series B and of the
certificate  of  authentication  to be borne by the Bonds of the  Floating  Rate
Series B shall be substantially of the following tenor:

<PAGE>
                                       3

                                 [FORM OF BOND]

                                     [FACE]

REGISTERED
REGISTERED
NUMBER
AMOUNT
RV                                                                             $
300,000,000

                     PUBLIC SERVICE ELECTRIC AND GAS COMPANY
                       FIRST AND REFUNDING MORTGAGE BOND,
                         FLOATING RATE SERIES B DUE 2010

     Public Service Electric and Gas Company (hereinafter called the "Company"),
a corporation of the State of New Jersey, for value received, hereby promises to
pay to _______________________ , or registered assigns, on the surrender hereof,
the  principal sum of Three  Hundred  Million Dollars,  on  March 12,  2010, and
to pay  interest thereon from the  date  hereof, at an annual rate of LIBOR plus
0.875%  reset and calculated  as more fully set forth on the reverse hereof, and
until  payment of said principal sum,  such  interest to  be  payable March  12,
June 12, September 12 and December 12 in each year beginning June 12, 2008.

      Both  the  principal  hereof  and  interest  hereon  shall  be paid at the
principal corporate trust office of US Bank National  Association in the City of
Morristown,  State of New Jersey,  or (at the option of the registered owner) at
the  corporate  trust  office or agency of any  paying  agent  appointed  by the
Company,  in the Borough of Manhattan,  City and State of New York, in such coin
or  currency  of the United  States of  America as at the time of payment  shall
constitute legal tender for the payment of public and private debts.

      IN WITNESS  WHEREOF,  the Company has caused this Bond to be duly executed
by its proper officers under its corporate seal.

Dated

                                     PUBLIC SERVICE ELECTRIC AND GAS COMPANY,

                                     By
                                        ----------------------------------
                                                  (Vice) President

(Seal)
Attest:

----------------------------------
(Assistant) Secretary

                     (FORM OF CERTIFICATE OF AUTHENTICATION)
                          CERTIFICATE OF AUTHENTICATION

      This Bond is one of the Bonds of the series  designated  therein  which is
described in the  within-mentioned  indenture and  supplemental  indenture dated
March 1, 2008, as secured thereby.

                                     US BANK NATIONAL ASSOCIATION, TRUSTEE,

                                     By
                                        ----------------------------------
                                                Authorized Signatory

<PAGE>
                                       4

                (FORM OF ALTERNATE CERTIFICATE OF AUTHENTICATION)
                     ALTERNATE CERTIFICATE OF AUTHENTICATION

      This Bond is one of the Bonds of the series  designated  therein which are
      described in the  within-mentioned  indenture and  supplemental  indenture
      dated March 1, 2008, as secured thereby.

                                     US BANK NATIONAL ASSOCIATION, TRUSTEE

                                     By
                                     -------------------------------------------

                                                   Authenticating Agent

                                     By
                                     -------------------------------------------
                                                   Authorized Signatory

                                 [FORM OF BOND]
                                    [REVERSE]

                     PUBLIC SERVICE ELECTRIC AND GAS COMPANY

                       FIRST AND REFUNDING MORTGAGE BOND,
                         FLOATING RATE SERIES B DUE 2010

      This Bond is one of the First and Refunding  Mortgage Bonds of the Company
issued and to be issued under and  pursuant  to, and all equally  secured by, an
indenture of mortgage or deed of trust dated August 1, 1924, as supplemented and
amended by supplemental indentures thereto, including the Supplemental Indenture
dated  March  1,  2008,  duly  executed  by the  Company  and US  Bank  National
Association  as  Trustee.  This  Bond is one of the Bonds of the  Floating  Rate
Series B due 2010, which series is limited to the aggregate  principal amount of
$300,000,000 and is issued pursuant to said  Supplemental  Indenture dated March
1, 2008.  Reference is hereby made to said indenture and all supplements thereto
for a specification  of the principal amount of Bonds from time to time issuable
thereunder,  and for a description of the  properties  mortgaged and conveyed or
assigned  to said  Trustee  or its  successors,  the  nature  and  extent of the
security,  and  the  rights  of the  holders  of  said  Bonds  and  any  coupons
appurtenant thereto, and of the Trustee in respect of such security.

      In and by said indenture, as amended and supplemented, it is provided that
with the written approval of the Company and the Trustee,  any of the provisions
of said  indenture  may from time to time be  eliminated  or modified  and other
provisions  may be added  thereto  provided the change does nor alter the annual
interest rate,  redemption  price or date, date of maturity or amount payable on
maturity of any then  outstanding  Bond or conflict with the Trust Indenture Act
of 1939 as then in effect,  and provided the holders of 85% in principal  amount
of the Bonds secured by said indenture and then outstanding (including,  if such
change  affect the Bonds of one or more  series  but less than all  series  then
outstanding,  a like  percentage  of the then  outstanding  Bonds of each series
affected by such change,  and excluding Bonds owned or controlled by the Company
or by the parties  owning at least 10% of the  outstanding  voting  stock of the
Company,  as more fully specified in said indenture) consent in writing thereto,
all as more fully set forth in said indenture, as amended and supplemented.

      First and  Refunding  Mortgage  Bonds  issuable  under said  indenture are
issuable  in series,  and the Bonds of any series may be for  varying  principal
amounts and in the form of coupon bonds and of registered bonds without coupons,
and the Bonds of any one series may differ from the Bonds of any other series as
to  date,  maturity,  interest  rate  and  otherwise,  all as in said  indenture
provided  and set forth.  The Bonds of the Floating  Rate Series B due 2010,  in
which this Bond is included, are designated "First and Refunding Mortgage Bonds,
Floating Rate Series B due 2010".

<PAGE>
                                       5

      In case of the  happening  of an event of  default  as  specified  in said
indenture and said supplemental indenture dated March 1, 1942, the principal sum
of the Bonds of this  series  may be  declared  or may  become  due and  payable
forthwith, in the manner and with the effect in said indenture provided.

      Interest on this Bond shall accrue from and  including  March 12, 2008 (or
from the most recent  Interest  Payment Date to which  interest has been paid or
duly provided for) to but excluding the applicable Interest Payment Date, stated
maturity or date of earlier redemption,  as the case may be and shall be payable
quarterly in arrears on each March 12, June 12,  September  12, and December 12,
commencing June 12, 2008. The interest rate on the Bonds of this series shall be
reset  quarterly and the Bonds shall bear interest at a per annum rate (computed
by the Calculation Agent (as defined below) on the basis of the actual number of
days  elapsed  over a 360-day  year) equal to LIBOR (as  defined  below) for the
applicable  Interest  Period (as defined  below),  plus 0.875 %,  subject to the
maximum  interest rate  permitted by New Jersey law, as such law may be modified
by United States law of general application.

      If any Interest  Payment Date (other than at stated maturity or redemption
date) would  otherwise be a day that is not a Business  Day (as defined  below),
such Interest Payment Date shall be postponed to the next succeeding day that is
a Business  Day,  unless  that next  succeeding  Business  Day falls in the next
succeeding  calendar month, in which case the Interest  Payment Date will be the
immediately preceding Business Day. If the stated maturity or redemption date of
this Bond would  otherwise  be a day that is not a  Business  Day,  such  stated
maturity or redemption date, as the case may be, will be the next succeeding day
that is a Business Day, and no additional  interest  shall accrue as a result of
such delayed payment.

      Promptly upon such  determination,  the Calculation  Agent will notify the
Company and the Trustee,  if the Trustee is not then serving as the  Calculation
Agent,  of the interest  rate for the new  Interest  Period.  The interest  rate
determined by the Calculation Agent, absent manifest error, shall be binding and
conclusive upon the Company,  the beneficial owners and holders of the Bonds and
the Trustee.

      "Calculation Agent" means US Bank National  Association,  or its successor
appointed by the Company, acting as Calculation Agent.

      "Interest  Determination  Date" means the second  London  Business Day (as
defined  below)  immediately  preceding  the first day of the relevant  Interest
Period.

      "Interest  Payment  Date" means each March 12, June 12,  September 12, and
December 12, commencing June 12, 2008.

      "Interest  Period" means the period commencing on an Interest Payment Date
for the Bonds of this series (or,  with respect to the initial  Interest  Period
only,  commencing  on the issue date for the Bonds) and ending on the day before
the next succeeding Interest Payment Date for the Bonds.

      "LIBOR" for any Interest  Determination  Date will be the offered rate for
deposits in U.S.  dollars  having an index maturity of three months for a period
commencing on the second London Business Day immediately following such Interest
Determination  Date in  amounts of not less than U.S.  $1,000,000,  as such rate
appears on Reuters Page LIBOR01 (as defined below) at approximately  11:00 a.m.,
London time, on such Interest Determination Date (the "Reported Rate"). "Reuters
Page LIBOR01" means the display  designated on page LIBOR01 by Reuters Group plc
(or such other page as may  replace  the  LIBOR01  page on that  service (or any
successor  service)  or such other  service as may be  nominated  by the British
Bankers'  Association  for the purpose of displaying  London  interbank  offered
rates for U.S. dollar deposits).  ). If, on an Interest Determination Date, such
rate does not appear on Reuters Page LIBOR01 as of 11:00 a.m.,  London time,  or
if Reuters Page LIBOR01 is not  available on such date,  the  Calculation  Agent
will obtain such rate from Bloomberg L.P.'s page "BBAM."

      If the following  circumstances exist on any Interest  Determination Date,
the Calculation  Agent shall  determine  "LIBOR" for the Bonds of this series as
follows:

      (1)   In the event no Reported  Rate  appears on Reuters  Page  LIBOR01 or
            Bloomberg  L.P.  page BBAM as of  approximately  11:00 a.m.,  London
            time, on such Interest  Determination  Date, the  Calculation  Agent
            shall  request the  principal  London  offices of each of four major
            banks in the

<PAGE>
                                       6

            London  interbank  market selected by the  Calculation  Agent (after
            consultation  with the  Company) to provide a  quotation  (the "Rate
            Quotation") at which three month U.S.  dollar deposits in amounts of
            not less than U.S.  $1,000,000  are  offered by it to prime banks in
            the London interbank market, as of approximately  11:00 a.m., London
            time, on such Interest Determination Date, that is representative of
            a single transaction at such time (the "Representative Amounts"). If
            at least two Rate  Quotations are provided,  LIBOR for such Interest
            Determination  Date will be the arithmetic  mean of such  quotations
            obtained by the Calculation Agent.

      (2)   In the event no Reported  Rate  appears on Reuters  Page  LIBOR01 or
            Bloomberg  L.P.  page BBAM as of  approximately  11:00 a.m.,  London
            time, on such Interest  Determination  Date and there are fewer than
            two Rate  Quotations  provided as  contemplated in clause (1) above,
            LIBOR for such Interest  Determination  Date will be the  arithmetic
            mean of the rates quoted at approximately  11:00 a.m., New York City
            time,  on such Interest  Determination  Date by three major banks in
            New York City selected by the Calculation Agent (after  consultation
            with the  Company)  for  loans  in  Representative  Amounts  in U.S.
            dollars to leading  European banks having an index maturity of three
            months for a period  commencing  on the second  London  Business Day
            immediately  following such Interest  Determination Date;  provided,
            however,  that if fewer than three banks selected by the Calculation
            Agent are quoting such rates, LIBOR for such Interest  Determination
            Date will be the same as LIBOR in effect for the Interest  Period in
            which such Interest  Determination Date falls (or, if none, shall be
            the offered  rate for  deposits in U. S. Dollars that appears on the
            most recent London Business Day preceding the Interest Determination
            Date for such  Interest  Period for which the rate was  displayed on
            Reuters  Page LIBOR01 or  Bloomberg  L.P.  page BBAM with respect to
            deposits commencing on the second London Business Day following that
            date).

      "Business  Day" means any day,  other than a  Saturday  or Sunday,  (i) on
which banking  institutions in New York, New York are not required or authorized
by law,  regulation  or  executive  order to close,  (ii) which is also a London
Business Day and (iii) a day on which the  Trustee's  corporate  trust office is
not  closed for  business.  "London  Business  Day" means a day that is a day on
which  dealings  in  deposits  in U.S.  dollars  are  transacted  in the  London
interbank market.

      All  percentages  resulting from any  calculation of any interest rate for
this Bond shall be rounded, if necessary,  to the nearest one hundred thousandth
of a percentage  point,  with five one millionths of a percentage  point rounded
upward  and all  dollar  amounts  shall be rounded  to the  nearest  cent,  with
one-half cent being rounded upward.

      As more fully provided in said supplemental indenture dated March 1, 2008,
the Bonds of this series are subject to redemption prior to maturity,  on notice
given as below  provided,  (a)  beginning on or after  September  12, 2008, as a
whole at any time or in part from time to time on any  Interest  Payment Date at
the election of the Company, upon payment of 100% of the principal amount of the
bonds of the Floating  Rate Series B to be redeemed  (said amount  (exclusive of
accrued interest) is herein referred to as the "regular  redemption  price") and
(b) at any time prior to  maturity,  on notice  given as below  provided  by the
application of proceeds of released  property or other money held by the Trustee
and  which,  pursuant  to the  provisions  of said  indenture,  as  amended  and
supplemented, is applied to the redemption of Bonds of this series, upon payment
of the  "Special  Redemption  Price" of 100% of the  principal  amount  thereof;
together,  in each case, with accrued interest to the date fixed for redemption;
provided,  however,  that  interest  payable  on the Bonds  with  respect  to an
interest payment date that falls on or before a redemption date shall be made to
the holder of the Bonds on the record  date  related  to such  interest  payment
date.  Notice of any such  redemption  shall be given by mailing the same to the
respective  registered  owners  of the  Bonds  of  this  series  so  called  for
redemption,  not less than 30 nor more than 40 days in advance of the date fixed
for  redemption.  In the  case of  redemption  of Bonds  of this  series  at the
election of the Company the notice of  redemption  may be  conditioned  upon the
deposit of the total regular  redemption price of all the Bonds so called,  with
accrued  interest  thereon to the redemption date, with the Trustee on or before
the date fixed for redemption. .

      If this Bond or any portion  thereof be called for  redemption and payment
be duly provided  therefor,  interest shall cease to accrue on this Bond or such
portion on the date fixed for such redemption.

<PAGE>
                                       7

      This Bond is  transferable,  but only as provided in said indenture,  upon
surrender  hereof,  by the  registered  owner  in  person  or by  attorney  duly
authorized  in writing,  at any office where the  principal  hereof and interest
hereon are payable;  upon any such  transfer a new Bond  similar  hereto will be
issued to the transferee.  No service charge shall be made for any such transfer
or exchange,  but the Company may require  payment of a sum  sufficient to cover
any tax or other  governmental  charge that may be imposed in relation  thereto.
The Company and the Trustee  hereunder  and any paying  agent may deem and treat
the person in whose name this Bond is  registered  as the absolute  owner hereof
for the purpose of receiving  payment of or on account of the  principal  hereof
and the interest hereon and for all other purposes;  and neither the Company nor
the Trustee  hereunder  nor any paying  agent shall be affected by any notice to
the contrary.

      The Bonds of this series are issuable  only in fully  registered  form, in
denominations of $1,000 and any multiple of $1,000.  Such fully registered Bonds
of the several  denominations  may be exchanged  for fully  registered  Bonds of
other  authorized  denominations,  but only as provided in said indenture,  upon
surrender  thereof,  by the  registered  owner in  person  or by  attorney  duly
authorized in writing, at either of said offices where the principal thereof and
interest  thereon  are  payable.  No service  charge  shall be made for any such
exchange,  but the Company may require  payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto.

      The Company shall not be required to issue or make  transfers or exchanges
of Bonds of this  series for a period of ten days next  preceding  any  Interest
Payment  Date or next  preceding  the date of any  drawing  of such  Bonds to be
redeemed,  and the Company shall not be required to make  transfers or exchanges
of any such Bonds drawn in whole or in part for such redemption.

      No recourse under or upon any obligation,  covenant or agreement contained
in said  indenture  or in any  indenture  supplemental  thereto,  or in any Bond
issued thereunder,  or because of any indebtedness arising thereunder,  shall be
had  against  any  incorporator,   or  against  any  past,   present  or  future
stockholder,  officer, or director,  as such, of the Company or of any successor
corporation,   either   directly  or  through  the  Company  or  any   successor
corporation,  under any rule of law, statute or  constitutional  provision or by
the  enforcement  of any  assessment or by any legal or equitable  proceeding or
otherwise,  it being expressly  agreed and understood  that said indenture,  any
indenture supplemental thereto and the obligations issued thereunder, are solely
corporate obligations,  and that no personal liability whatever shall attach to,
or be incurred by, such incorporators,  stockholders,  officers or directors, as
such, of the Company, or of any successor  corporation,  or any of them, because
of the incurring of the indebtedness  thereby authorized,  or under or by reason
of any of the obligations, covenants or agreements contained in the indenture or
in any indenture  supplemental thereto or in any of the Bonds issued thereunder,
or implied therefrom.

      This Bond shall not be  entitled  to any  security  or benefit  under said
indenture, as amended and supplemented, and shall not become valid or obligatory
for any purpose, until the certificate of authentication, hereon endorsed, shall
have been signed by US Bank National Association as Trustee, or by its successor
in trust under said indenture.

      WHEREAS,  the execution and delivery of this  supplemental  indenture have
been duly authorized by the Board of Directors of the Company; and

      WHEREAS, the Company represents that all things necessary to make the bond
of the series hereinafter described,  when duly authenticated by the Trustee and
issued by the Company, a valid, binding and legal obligation of the Company, and
to make this supplemental  indenture a valid and binding agreement  supplemental
to the Indenture, have been done and performed:

<PAGE>
                                       8

      NOW, THEREFORE,  THIS SUPPLEMENTAL  INDENTURE WITNESSETH that the Company,
in  consideration  of the premises and the execution and delivery by the Trustee
of this supplemental indenture, and in pursuance of the covenants and agreements
contained in the  Indenture and for other good and valuable  consideration,  the
receipt of which is hereby acknowledged,  has granted, bargained, sold, aliened,
remised, released, conveyed, confirmed,  assigned, transferred and set over, and
by these presents does grant,  bargain,  sell, alien, remise,  release,  convey,
confirm,  assign,  transfer and set over unto the Trustee,  its  successors  and
assigns, forever, all the right, title and interest of the Company in and to all
property  of  every  kind and  description  (except  cash,  accounts  and  bills
receivable and all  merchandise  bought,  sold or  manufactured  for sale in the
ordinary  course of the Company's  business,  stocks,  bonds or other  corporate
obligations  or  securities,  other than such as are  described in Part V of the
Granting  Clauses of the  Indenture,  not  acquired  with the  proceeds of bonds
secured by the  Indenture,  and except as in the Indenture and herein  otherwise
expressly  excluded) acquired by the Company since the execution and delivery of
the  supplemental  indenture  dated April 1, 2007,  subsequent  to the Indenture
(except any such property duly released from, or disposed of, free from the lien
of the  Indenture,  in  accordance  with the  provisions  thereof)  and all such
property  which at any time  hereafter  may be acquired by the  Company;

      All of which  property it is intended  shall be included in and granted by
this  supplemental  indenture  and  covered  by the  lien  of the  Indenture  as
heretofore and hereby amended and supplemented;

      UNDER AND SUBJECT to any  encumbrances  or mortgages  existing on property
acquired  by the  Company  at the time of such  acquisition  and not  heretofore
discharged of record; and

      SUBJECT  also,  to the  exceptions,  reservations  and  provisions  in the
Indenture  and in  this  supplemental  indenture  recited,  and  to  the  liens,
reservations, exceptions, limitations, conditions and restrictions imposed by or
contained  in the several  deeds,  grants,  franchises  and  contracts  or other
instruments  through which the Company acquired or claims title to the aforesaid
property;  and Subject,  also, to the existing leases,  to liens on easements or
rights of way, to liens for taxes,  assessments and governmental  charges not in
default or the payment of which is deferred,  pending appeal or other contest by
legal  proceedings,  pursuant to Section 4 of Article Five of the Indenture,  or
the payment of which is  deferred  pending  billing,  transfer of title or final
determination of amount, to easements for alleys, streets,  highways,  rights of
way and  railroads  that may run across or encroach upon the said  property,  to
joint pole and similar  agreements,  to undetermined liens and charges,  if any,
incidental to construction, and other encumbrances permitted by the Indenture as
heretofore and hereby amended and supplemented;

      TO HAVE AND TO HOLD the property hereby conveyed or assigned,  or intended
to be conveyed or assigned,  unto the Trustee,  its successor or successors  and
assigns, forever;

      IN TRUST, NEVERTHELESS, upon the terms, conditions and trusts set forth in
the Indenture as heretofore and hereby amended and supplemented, to the end that
the said  property  shall be subject to the lien of the  Indenture as heretofore
and hereby  amended and  supplemented,  with the same force and effect as though
said property had been included in the Granting  Clauses of the Indenture at the
time of the  execution and delivery  thereof;

      AND  THIS  SUPPLEMENTAL   INDENTURE   FURTHER   WITNESSETH  that  for  the
considerations  aforesaid,  it is hereby covenanted  between the Company and the
Trustee as follows:

                                   ARTICLE I.

                      BONDS OF THE FLOATING RATE SERIES B.

      The series of bonds authorized by this supplemental indenture to be issued
under and secured by the  Indenture  shall be  designated  "First and  Refunding
Mortgage  Bonds,  Floating  Rate  Series B due  2010";  shall be  limited to the
aggregate  principal  amount of  $300,000,000;  shall  mature on March 12, 2010;
shall bear  interest at a per annum rate of LIBOR plus  0.875%,  calculated  and
reset as more  fully set forth in the form of the Bond  hereinbefore  described,
payable in arrears on March 12, June 12,  September  12, and December 12 of each
year,  commencing  June 12,  2008;  shall be  payable as to both  principal  and
interest in such coin or currency of the United States of America as at the time
of payment shall  constitute  legal tender for the payment of public and private
debts, at the principal corporate trust office of US Bank, National Association,
in the City of  Morristown,  State of New  Jersey,  or, as may be desired by the
persons  entitled to receive such  principal and interest  respectively,  at the
office or agency of the Company in the Borough of  Manhattan,  City and State of
New York;  and shall be issuable only in the form of fully  registered  bonds in
the  denominations  of  $1,000  and any  multiple  of  $1,000  and  the  several
denominations  shall be  interchangeable.  The date of each bond of the Floating
Rate Series B shall be the  Interest  Payment  Date next  preceding  the date of
authentication,  unless such date of authentication be an Interest Payment Date,
in which case the date shall be the date of authentication,  or unless such date
of authentication be prior to the first Interest Payment Date, in which case the
date shall be March 12, 2008.

<PAGE>
                                       9

      The Company shall not be required to issue or make  transfers or exchanges
of bonds of the Floating  Rate Series B for a period of ten days next  preceding
any  Interest  Payment  Date or next  preceding  the date of any drawing of such
bonds to be redeemed, and the Company shall not be required to make transfers or
exchanges of any such bonds drawn in whole or in part for such redemption.

      Bonds  of  the  Floating   Rate  Series  B  shall  be   transferable   and
exchangeable,  but only as provided in the Indenture, upon surrender thereof for
cancellation by the registered owner in person or by attorney duly authorized in
writing at either of said offices. The Company hereby waives any right to make a
charge for any transfer or exchange of Bonds of the Floating  Rate Series B, but
the  Company  may require  payment of a sum  sufficient  to cover any tax or any
other governmental charge that may be imposed in relation thereto.

                                   ARTICLE II.

                 REDEMPTION OF BONDS OF FLOATING RATE SERIES B.

     SECTION 2.01. Redemption--Redemption Prices. Bonds of the Floating Rate
     Series B shall be subject to redemption at any time:

      a)    as a whole at any time on or after  September  12, 2008,  or in part
            from time to time on any Interest Payment Date on or after September
            12, 2008 at the  election of the Company as provided in Section 2.02
            hereof, upon payment of 100% of the principal amount of the bonds of
            the Floating Rate Series B to be redeemed (said amount (exclusive of
            accrued  interest) is herein referred to as the "regular  redemption
            price");

      (b)   at any time by the application of any proceeds of released  property
            or other money held by the Trustee and which, pursuant to Section 4C
            of Article Eight of the Indenture,  as amended and supplemented,  is
            applied to the  redemption  of bonds of the Floating  Rate Series B,
            upon payment of 100% of the principal  amount  thereof  specified as
            the "Special  Redemption Price" in the form of Bond hereinbefore set
            forth  (said  amount  (exclusive  of  accrued  interest)  is  herein
            referred to as the "special redemption price");

      together  in each  case  with  accrued  interest  to the  date  fixed  for
      redemption.

      SECTION  2.02.  Redemption  at Election of  Company.  The  election of the
Company  to  redeem  any of the  bonds of the  Floating  Rate  Series B shall be
evidenced by a resolution  of the Board of Directors of the Company  calling for
redemption on an Interest Payment Date all or a stated principal amount thereof.
Any such call may be conditioned upon the deposit with the Trustee, on or before
such  redemption  date,  of the total regular  redemption  price of the bonds so
called,  with accrued  interest thereon to the redemption date. At least 40 days
prior to such redemption date (or at such later time as shall be satisfactory to
the  Trustee) the Company  shall file with the Trustee a certified  copy of such
resolution.  Unless  such call  shall be  conditioned  upon the  deposit  of the
regular  redemption price and accrued interest with the Trustee on or before the
redemption  date and unless the notice below  provided  for shall so state,  the
Company  shall on or before such  redemption  date  deposit with the Trustee the
total regular redemption price of all the bonds so called, with accrued interest
thereon to the redemption date.

      If the Company elects to redeem less than all of the bonds of the Floating
Rate Series B, the particular  bonds or portions  thereof to be redeemed  shall,
upon request of the Company,  be drawn by lot by the Trustee,  according to such
method as it shall deem proper,  from the bonds of said series then outstanding.
The Trustee  shall  certify to the  Company  the serial  numbers of the bonds so
drawn.

      The Company shall thereupon give notice of such redemption,  in the manner
and substantially in the form provided in Section 2.03 hereof to be given in the
case of bonds of the  Floating  Rate  Series B called  pursuant to Section 4C of
Article Eight of the Indenture, except that (1) such notice shall state that the
bonds  specified have been called for redemption at the election of the Company,
and that they will be payable on the date  specified  in the  resolution  of the
Board of Directors of the Company at a stated amount (which shall be the regular
redemption  price plus any accrued and unpaid interest to the redemption  date),
(2) if all the bonds of the Floating  Rate Series B be called,  the notice shall
so state and may omit the  serial  numbers  thereof,  (3) if the date  fixed for
redemption be other than an Interest  Payment Date,  the notice shall state that
the bonds will be payable at the regular  redemption price plus accrued interest
to the redemption  date, (4) the mailing of such notice to registered  owners of
bonds of said series  shall take place not less than 30 nor more than 40 days in
advance of the date fixed for redemption, but failure

<PAGE>
                                       10

duly to give  such  notice of  redemption  to the  registered  owner of any bond
called for  redemption  in whole or in part shall not affect the validity of the
proceedings  for the  redemption of any other bond,  and (5) if the call of such
bonds for redemption shall have been conditioned upon the deposit of the regular
redemption  price  and  accrued  interest  with the  Trustee  on or  before  the
redemption date, as above permitted,  the notice shall so state, and shall state
that unless such deposit is made on or before such date the call for  redemption
and the notice shall be of no effect.

      Before  any money  shall be applied by the  Trustee to the  redemption  of
bonds under this Section, the Company shall deliver to the Trustee a certificate
or opinion by the President or a Vice President of the Company and an opinion of
counsel,  stating that all conditions  precedent  provided for herein (including
any covenants  compliance with which constitutes a condition precedent) relating
to such redemption have been complied with.

      SECTION 2.03.  Redemptions  Pursuant to Section 4C of Article Eight of the
Indenture.  If,  pursuant to Section 4C of Article  Eight of the  Indenture,  as
amended and supplemented,  any proceeds of released property or other money then
held by the  Trustee  shall be  applied  to the  redemption  of the bonds of the
Floating  Rate  Series  B,  the  Trustee  not  later  than 30 days  prior to the
applicable  redemption  date,  shall draw by lot  according to such method as it
shall  deem  proper,  from all the  bonds  of the  Floating  Rate  Series B then
outstanding,  such principal amount thereof as is to be redeemed.  Bonds of said
series so redeemed shall be cancelled.

      After such drawing the Trustee  shall,  not later than 30 nor more than 40
days in  advance  of the date  fixed for  redemption,  give,  in the name of the
Company,  notice by mail that bonds of the  Floating  Rate  Series B bearing the
serial  numbers  specified  have been  called for  redemption  pursuant  to said
Section  4C of  Article  Eight,  that  they  will  be due  and  payable  on such
redemption date, at the office of the Trustee in Morristown,  New Jersey, or (at
the option of the  registered  owner) at the office or agency of the  Company in
the Borough of Manhattan,  City and State of New York, at a stated amount (which
shall be the Special  Redemption  Price (plus any accrued and unpaid interest to
the  redemption  date),  that, if the date fixed for redemption be other than an
Interest  Payment  Date,  the bonds will be payable  at the  Special  Redemption
Price,  plus  accrued  interest to the  redemption  date,  and that all interest
thereon will cease to accrue after said date. Such notice shall be mailed to the
registered owners of the bonds so called,  at their respective  addresses as the
same may  appear on the  registry  books.  Failure  duly to give such  notice of
redemption to the registered owner of any bond called for redemption in whole or
in part shall not affect the validity of the  proceedings  for the redemption of
any other bond.

      SECTION 2.04. Called Bonds to be Surrendered--Interest to Cease. Each bond
or portion  thereof of the Floating Rate Series B so called under either Section
2.02 or 2.03 hereof  shall be due and payable  (upon  surrender  thereof) at the
places and price and on the date specified in such notice, anything herein or in
such  bond to the  contrary  notwithstanding.  From and after the date when each
bond or portion  thereof of the Floating  Rate Series B shall be due and payable
as  aforesaid  (unless  upon said date the full amount due thereon  shall not be
held by the Trustee  and be  immediately  available  for  payment),  all further
interest shall cease to accrue on such bond or on such portion  thereof,  as the
case may be.

      SECTION  2.05.  Bonds Called in Part. If only a portion of any bond of the
Floating Rate Series B shall be drawn by lot by the Trustee  pursuant to Section
2.02 or 2.03 hereof,  the notice of redemption  hereinbefore  provided for shall
specify the serial number of such bond and the portion of the  principal  amount
thereof to be redeemed.  Upon surrender of such bond for partial  redemption and
upon payment of the portion so called for redemption, a new bond or bonds of the
Floating Rate Series B, in aggregate  principal  amount equal to the  unredeemed
portion  of  such   surrendered   bond,   shall  be  executed  by  the  Company,
authenticated  by or on behalf of the Trustee,  and delivered to the  registered
owner thereof, without expense to such owner.

      SECTION 2.06.  Provisions of Indenture Not  Applicable.  There shall be no
sinking fund for the bonds of Floating Rate Series B. The  provisions of Article
Four of the  Indenture,  as  amended  and  supplemented,  shall not apply to the
procedure for the exercise of any right of redemption reserved by the Company in
this Article in respect of the bonds of the Floating Rate Series B.

<PAGE>
                                       11

                                   ARTICLE III

                                 MISCELLANEOUS.

      SECTION 3.01.  Authentication  of Bonds of Floating Rate Series B. None of
the Bonds of the  Floating  Rate Series B, the issue of which is provided for by
this  supplemental  indenture,  shall be  authenticated  by or on  behalf of the
Trustee except in accordance  with the  provisions of the Indenture,  as amended
and supplemented,  and this supplemental indenture, and upon compliance with the
conditions in that behalf therein contained.

      SECTION  3.02.  Authenticating  Agent.  As long as any of the bonds of the
Floating  Rate  Series  B  remain  outstanding,   the  Trustee  may  appoint  an
authenticating  agent to act on its  behalf  and  subject  to its  direction  in
connection with the  authentication of bonds of the Floating Rate Series B. Such
authenticating  agent  shall be  appointed  by the Trustee by an  instrument  in
writing and shall have no responsibility or liability for any action taken by it
at the direction of the Trustee. Such authenticating agent shall at all times be
a corporation  organized and doing  business under the laws of the United States
or of any State or  Territory or of the  District of Columbia  authorized  under
such laws to act as authenticating  agent, having a combined capital and surplus
of at least $5,000,000, subject to supervision or examination by Federal, State,
Territorial,  or  District  of  Columbia  authority  and,  if  there  be  such a
corporation  willing and able to act as  authenticating  agent on reasonable and
customary  terms,  having its principal office and place of business in The City
of New  York.  If such  corporation  publishes  reports  of  condition  at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining  authority,  then for the  purposes of this  Section 3.02 the combined
capital  and  surplus  of such  corporation  shall be deemed to be its  combined
capital  and  surplus as set forth in its most  recent  report of  condition  so
published.

      Any  corporation  into  which  any  authenticating  agent may be merged or
converted or with which it may be  consolidated,  or any  corporation  resulting
from any merger,  conversion, or consolidation to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate agency business
of any  authenticating  agent,  shall  continue to be the  authenticating  agent
without the  execution  or filing of any paper or any further act on the part of
the Trustee or the authenticating agent.

      Any  authenticating  agent may at any time resign by giving written notice
of  resignation  to the Trustee and to the Company.  The Trustee may at any time
terminate the agency of any  authenticating  agent by giving  written  notice of
termination to such authenticating agent and to the Company. Upon receiving such
a notice of resignation  or upon such a termination,  or in case at any time any
authenticating  agent  shall  cease  to  be  eligible  in  accordance  with  the
provisions  of  this  Section   3.02,   the  Trustee  may  appoint  a  successor
authenticating  agent. The Trustee shall give written notice of such appointment
to the  Company  and shall mail  notice of such  appointment  to all  registered
owners of the bonds of the Floating Rate Series B, at their respective addresses
as the same may  appear on the  registry  books.  Any  successor  authenticating
agent,  upon  acceptance  of its  appointment,  shall become vested with all the
rights, powers, duties and responsibilities of its predecessor, with like effect
as if originally  appointed  authenticating  agent. No successor  authenticating
agent shall be appointed  unless  eligible  under the provisions of this Section
3.02.

      The Trustee  agrees to pay to the  authenticating  agent from time to time
reasonable  compensation for its services,  and the Trustee shall be entitled to
be reimbursed for such payments as provided in the Indenture.

      SECTION 3.03.  Additional  Restrictions  on  Authentication  of Additional
Bonds Under  Indenture.  The Company  covenants  that from and after the date of
execution  of this  supplemental  indenture no  additional  bonds (as defined in
Section 1 of Article Two of the Indenture) shall be authenticated  and delivered
by the Trustee  under  Subdivision A of Section 4 of said Article Two on account
of additions or improvements to the mortgaged property;

            (1) unless the net  earnings of the Company for the period  required
      by Subdivision C of Section 6 of said Article Two shall have been at least
      twice the fixed  charges  (in lieu of 1-3/4 times such fixed  charges,  as
      required by said Subdivision C); and for the purpose of this condition (a)
      such  fixed  charges  shall in each  case  include  interest  on the bonds
      applied for,  notwithstanding  the  parenthetical  provision  contained in
      clause (4) of said  Subdivision  C, and (b) in computing such net earnings
      there shall be included in expenses of operation  (under  paragraph (c) of
      said  Subdivision  C)  all  charges  against  earnings  for  depreciation,
      renewals  or  replacements,  and  all  certificates  with  respect  to net
      earnings delivered to the Trustee in connection with any authentication of
      additional bonds under said Article Two shall so state; and

            (2)  except  to the  extent of 60% (in lieu of 75% as  permitted  by
      Subdivision  A of Section 7 of said Article Two) of the cost or fair value
      to the Company of the additions or improvements forming the basis for such
      authentication of additional bonds.

<PAGE>
                                       12

      SECTION 3.04.  Restriction  on Dividends.  The Company will not declare or
pay any dividend on any shares of its common stock (other than dividends payable
in  shares of its  common  stock)  or make any  other  distribution  on any such
shares, or purchase or otherwise acquire any such shares (except shares acquired
without  cost to the  Company)  whenever  such  action  would  reduce the earned
surplus of the Company to an amount less than  $10,000,000 or such lesser amount
as may remain after deducting from said $10,000,000 all amounts appearing in the
books of account of the Company on December  31, 1948,  which shall  thereafter,
pursuant to any order or rule of any regulatory body entered after said date, be
required  to be removed,  in whole or in part,  from the books of account of the
Company by charges to earned surplus.

      SECTION  3.05.  Use of  Facsimile  Seal  and  Signatures.  The seal of the
Company and any or all signatures of the officers of the Company upon any of the
Bonds of the Floating Rate Series B may be facsimiles.

      SECTION  3.06.  Time for Making of Payment.  All  payments of principal or
redemption  price of, and interest  on, the Bonds of the Floating  Rate Series B
shall be made either prior to the due date thereof or on the due date thereof in
immediately  available  funds. If any Interest Payment Date (other than a stated
maturity or  redemption  date) would  otherwise  be a day that is not a Business
Day, such Interest  Payment Date shall be postponed to the next  succeeding  day
that is a Business Day. If the stated  maturity or redemption  date of this Bond
would  otherwise be a day that is not a Business  Day,  such stated  maturity or
redemption  date, as the case may be, will be the next  succeeding day that is a
Business  Day,  and no  additional  interest  shall  accrue  as a result of such
delayed payment.

      SECTION 3.07.  Effective Period of Supplemental  Indenture.  The preceding
provisions of Articles I, II and III of this supplemental indenture shall remain
in effect only so long as any of the Bonds of the  Floating  Rate Series B shall
remain outstanding.

      SECTION 3.08. Effect of Approval of Board of Public Utilities of the State
of New Jersey. The approval of the Board of Public Utilities of the State of New
Jersey of the execution  and delivery of these  presents and of the issue of any
Bond of the  Floating  Rate Series B shall not be  construed as approval of said
Board of any other act,  matter or thing which  requires  approval of said Board
under the laws of the State of New Jersey.

      SECTION 3.09.  Execution in Counterparts.  For the purpose of facilitating
the recording hereof,  this supplemental  indenture has been executed in several
counterparts,  each of which shall be and shall be taken to be an original,  and
all collectively but one instrument.

<PAGE>
                                       13

      IN WITNESS WHEREOF,  Public Service Electric and Gas Company, party hereto
of the first part,  after due corporate and other  proceedings,  has caused this
supplemental  indenture to be signed and acknowledged or proved by its President
or one of its Vice  Presidents and its corporate seal hereunto to be affixed and
to be attested by the signature of its Secretary or an Assistant Secretary;  and
US Bank National Association,  as Trustee,  party hereto of the second part, has
caused this  supplemental  indenture to be signed and  acknowledged or proved by
its  President  or one of its  Vice  Presidents,  and its  corporate  seal to be
hereunto affixed and to be attested by the signature of its Secretary, Assistant
Secretary,  Vice  President,  or  an  Assistant  Vice  President.  Executed  and
delivered this 5th day of March 2008.

Attest:
                                     PUBLIC SERVICE ELECTRIC AND GAS COMPANY

                                     By /s/ M. A. Plawner
                                       -----------------------------------------
                                                     M. A. Plawner
                                                    Vice President
Attest:

 /s/ S. L. Guibord
-----------------------------------
          S. L. Guibord
       Assistant Secretary

                                     US BANK  NATIONAL ASSOCIATION

                                     By /s/ N. Barnes
                                       -----------------------------------------
                                                       N. Barnes
                                                    Vice President
Attest:

 /s/ P. O'Brien
-----------------------------------
            P. O'Brien
         Vice President

<PAGE>
                                       14

STATE OF NEW JERSEY          )
                          SS:)
COUNTY OF ESSEX              )

      Be it  Remembered,  that on this 5th day of March  2008,  before  me,  the
subscriber, a Notary Public of the State of New Jersey, personally appeared M.A.
Plawner, who, I am satisfied, is a Vice President of Public Service Electric and
Gas Company,  one of the corporations  named in and which executed the foregoing
instrument,  and is the person who signed the said  instrument  as such officer,
for and on behalf of such corporation,  and I having first made known to him the
contents thereof,  he did acknowledge that he signed the said instrument as such
officer,  that the said instrument was made by such  corporation and sealed with
its corporate  seal,  that the said  instrument is the voluntary act and deed of
such corporation,  made by virtue of authority from its Board of Directors,  and
that  said  corporation  the  mortgagor,  has  received  a  true  copy  of  said
instrument.

                                        /s/ Michelle Zelinski
                                       -----------------------------------------
                                        Michelle Zelinski
                                        Notary Public of New Jersey
                                        My Commission Expires August 15, 2011

STATE OF NEW JERSEY          )
                          SS:)
COUNTY OF ESSEX              )

      Be it  Remembered,  that on this 5th day of March  2008,  before  me,  the
subscriber,  a Notary  Public of the State of New  Jersey,  personally  appeared
Norman  Barnes,  who, I am  satisfied,  is a Vice  President of US Bank National
Association,  one of the corporations  named in and which executed the foregoing
instrument,  and is the person who signed the said  instrument  as such officer,
for and on behalf of such corporation,  and I having first made known to him the
contents thereof,  he did acknowledge that he signed the said instrument as such
officer,  that the said instrument was made by such  corporation and sealed with
its corporate  seal, and that the said  instrument is the voluntary act and deed
of such corporation, made by virtue of authority from its Board of Directors.

                                         /s/ Melody Nedrick
                                        ----------------------------------
                                         Melody Nedrick
                                         Notary Public of New Jersey

                                         My Commission Expires March 3, 2010

<PAGE>
                                       15

                            CERTIFICATE OF RESIDENCE

      US Bank National  Association,  Mortgagee and Trustee within named, hereby
certifies that its precise residence is 21 South Street,  Morristown, New Jersey
07960.

                                     US BANK NATIONAL ASSOCIATION

                                      By /s/ N. Barnes
                                        ----------------------------------------
                                         N. Barnes
                                         Vice PresidentExhibit 4-30

                              SUPPLEMENTAL MORTGAGE
================================================================================

                             Supplemental Indenture

                               Dated ______________

                                   ----------

                                 SUPPLEMENTAL TO
                          FIRST AND REFUNDING MORTGAGE
                              DATED AUGUST 1, 1924

                                   ----------

                     PUBLIC SERVICE ELECTRIC AND GAS COMPANY
                                       TO
                          US BANK NATIONAL ASSOCIATION
                                     Trustee
                                 21 South Street
                          Morristown, New Jersey 07960

                                   ----------

                           PROVIDING FOR THE ISSUE OF
               $______________ FIRST AND REFUNDING MORTGAGE BONDS,
                   ______________ SERIES ______ DUE __________

--------------------------------------------------------------------------------

                     RECORD IN MORTGAGE BOOK AND RETURN TO:
                                     , ESQ.
                               80 PARK PLAZA, T5B
                             NEWARK, N.J. 07102-4194

Prepared by

-----------------------
(______________, ESQ.)

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
RECITALS......................................................................
FORM OF BOND..................................................................
FORM OF CERTIFICATE OF AUTHENTICATION.........................................
GRANTING CLAUSES..............................................................

                                   ARTICLE I.
                      BONDS OF THE ______________ SERIES __.
DESCRIPTION OF SERIES.........................................................

                                   ARTICLE II.
               REDEMPTION OF BONDS OF THE ______________ SERIES __.
SECTION 2.01.     Redemption--Redemption Price................................
SECTION 2.02.     Redemptions Pursuant to Section 4C of
                    Article Eight of the Indenture............................
SECTION 2.03.     Interest on Called Bonds to Cease...........................
SECTION 2.04.     Bonds Called in Part........................................
SECTION 2.05.     Provisions of Indenture Not Applicable......................

                                  ARTICLE III.
                                 MISCELLANEOUS.
SECTION 3.01.     Authentication of Bonds of ______________ Series __ ........
SECTION 3.02.     Authentication Agent........................................
SECTION 3.03.     Additional Restrictions on Authentication of
                    Additional Bonds Under Indenture..........................
SECTION 3.04.     Restriction on Dividends....................................
SECTION 3.05.     Use of Facsimile Seal and Signatures........................
SECTION 3.06.     Time for Making of Payment..................................
SECTION 3.07.     Effective Period of Supplemental Indenture..................
SECTION 3.08      Effect of Approval of Board of Public Utilities
                    of the State of New Jersey................................
Section 3.09.     Execution in Counterparts...................................
ACKNOWLEDGEMENTS..............................................................
CERTIFICATE OF RESIDENCE......................................................

<PAGE>

      SUPPLEMENTAL  INDENTURE,  dated the ___ day of __________, for convenience
of  reference  and  effective  from the time of execution  and delivery  hereof,
between PUBLIC SERVICE ELECTRIC AND GAS COMPANY,  a corporation  organized under
the laws of the State of New Jersey,  hereinafter called the "Company", party of
the first part, and US Bank National Association, a national banking association
organized under the laws of the United States of America,  as successor  Trustee
to Wachovia Bank, National Association (previously known as Fidelity Union Trust
Company) under the indenture dated August 1, 1924, below mentioned,  hereinafter
called the "Trustee", party of the second part.

      WHEREAS,  on July 25, 1924, the Company executed and delivered to FIDELITY
UNION TRUST  COMPANY,  a certain  indenture  dated  August 1, 1924  (hereinafter
called the  "Indenture")  to secure  and to  provide  for the issue of First and
Refunding Mortgage Gold Bonds of the Company; and

      WHEREAS,  the Indenture has been recorded in the following counties of the
State of New Jersey, in the offices,  and therein in the books and at the pages,
as follows:

                                                                     Page
County              Office               Book Number                Number
--------------------------------------------------------------------------------
Atlantic            Clerk's        1955 of Mortgages                  160
Bergen              Clerk's        94 of Chattel Mortgages         123 etc.
Burlington          Clerk's        693 of Mortgages                 88 etc.
                                   52 of Chattel Mortgages       Folio 8 etc.
Camden              Register's     177 of Mortgages             Folio 354 etc.
                                   45 of Chattel Mortgages         184 etc.
Cumberland          Clerk's        239 of Mortgages                 1 etc.
                                   786 of Mortgages                638 & c.
Essex               Register's     437 of Chattel Mortgages          1-48
                                   T-51 of Mortgages                341-392
Gloucester          Clerk's        34 of Chattel Mortgages         123 etc.
Hudson              Register's     142 of Mortgages                 7 etc.
                                   453 of Chattel Mortgages         9 etc.
                                   1245 of Mortgages               484, etc.
Hunterdon           Clerk's        151 of Mortgages                   344
Mercer              Clerk's        67 of Chattel Mortgages          1 etc.
Middlesex           Clerk's        384 of Mortgages                 1 etc.
                                   113 of Chattel Mortgages         3 etc.
                                   437 of Mortgages                294 etc.
Monmouth            Clerk's        951 of Mortgages                291 & c.
Morris              Clerk's        N-3 of Chattel Mortgages        446 etc.
                                   F-10 of Mortgages               269 etc.
Ocean               Clerk's        1809 of Mortgages                  40
Passaic             Register's     M-6 of Chattel Mortgages        178, etc.
Salem               Clerk's        R-13 of Mortgages               268 etc.
                                   267 of Mortgages                249 etc.
Somerset            Clerk's        46 of Chattel Mortgages         207 etc.
                                   N-10 of Mortgages                1 etc.
Sussex              Clerk's        123 of Mortgages                 10 & c.
Union               Register's     9584 of Mortgages               259 etc.
Warren              Clerk's        124 of Mortgages                141 etc.

<PAGE>
                                       2

and

      WHEREAS, the Indenture has also been recorded in the following counties of
the Commonwealth of Pennsylvania,  in the offices,  and therein in the books and
at the pages, as follows:

                                                                     Page
County              Office                     Book Number          Number
--------------------------------------------------------------------------
Adams               Recorder's             22 of Mortgages            105
Armstrong           Recorder's            208 of Mortgages            381
Bedford             Recorder's             90 of Mortgages            917
Blair               Recorder's            671 of Mortgages            430
Cambria             Recorder's            407 of Mortgages            352
Cumberland          Recorder's            500 of Mortgages            136
Franklin            Recorder's            285 of Mortgages            373
Huntington          Recorder's            128 of Mortgages             47
Indiana             Recorder's            197 of Mortgages            281
Lancaster           Recorder's            984 of Mortgages              1
Montgomery          Recorder's           5053 of Mortgages           1221
Westmoreland        Recorder's           1281 of Mortgages            198
York                Recorder's           31-V of Mortgages            446

and

      WHEREAS,  the  Indenture  granted,   bargained,  sold,  aliened,  remised,
released,  conveyed,  confirmed,  assigned,  transferred  and set over  unto the
Trustee certain  property of the Company,  more fully set forth and described in
the Indenture,  then owned or which might thereafter be acquired by the Company;
and

      WHEREAS, the Company, by various supplemental indentures,  supplemental to
the  Indenture,  the  last of  which  was  dated  ______________,  has  granted,
bargained,  sold, aliened, remised,  released,  conveyed,  confirmed,  assigned,
transferred  and set over  unto the  Trustee  certain  property  of the  Company
acquired by it after the execution and delivery of the Indenture; and

      WHEREAS,  since the execution and delivery of said supplemental  indenture
dated _____________, the Company has acquired property which, in accordance with
the provisions of the Indenture,  is subject to the lien thereof and the Company
desires to confirm such lien; and

      WHEREAS, the Indenture has been amended or supplemented from time to time;
and

      WHEREAS, it is provided in the Indenture that no bonds other than those of
the 5-1/2% Series due 1959 therein  authorized may be issued thereunder unless a
supplemental  indenture  providing for the issue of such additional  bonds shall
have been executed and delivered by the Company to the Trustee; and

      WHEREAS,  the  Company  desires to provide  for the issue of  $___________
principal  amount of bonds to be  secured  by said  Indenture  of a series to be
designated as "First and Refunding Mortgage Bonds,  ______________ Series __ due
____" (hereinafter sometimes called "______________ Series __"); and

      WHEREAS, the text of the Bonds of the ______________  Series __ and of the
certificate  of  authentication  to be borne by the Bonds of the  ______________
Series __ shall be substantially of the following tenor:

<PAGE>
                                       3

                                 [FORM OF BOND]

                                     [FACE]

REGISTERED
REGISTERED
NUMBER
AMOUNT
RV                                                                             $
____________

                     PUBLIC SERVICE ELECTRIC AND GAS COMPANY
                       FIRST AND REFUNDING MORTGAGE BOND,
                        ______________ SERIES __ DUE ____

      Public  Service   Electric  and  Gas  Company   (hereinafter   called  the
"Company"), a corporation of the State of New Jersey, for value received, hereby
promises  to pay  to  _______________________,  or  registered  assigns,  on the
surrender  hereof,  the  principal  sum  of  ___________   Million  Dollars,  on
___________, and to pay interest thereon from the date hereof, at an annual rate
of ___________  ___________% reset and calculated as more fully set forth on the
reverse  hereof,  and until payment of said  principal  sum, such interest to be
payable  _________,  ___________,  ___________  and  ___________  in  each  year
beginning ___________.

      Both  the  principal  hereof  and  interest  hereon  shall  be paid at the
principal corporate trust office of US Bank National  Association in the City of
Morristown,  State of New Jersey,  or (at the option of the registered owner) at
the  corporate  trust  office or agency of any  paying  agent  appointed  by the
Company, in such coin or currency of the United States of America as at the time
of payment shall  constitute  legal tender for the payment of public and private
debts.

      IN WITNESS  WHEREOF,  the Company has caused this Bond to be duly executed
by its proper officers under its corporate seal.

Dated

                                     PUBLIC SERVICE ELECTRIC AND GAS COMPANY,

                                     By
                                        ----------------------------------
                                                  (Vice) President

(Seal)
Attest:

----------------------------------
(Assistant) Secretary

                     (FORM OF CERTIFICATE OF AUTHENTICATION)
                          CERTIFICATE OF AUTHENTICATION

      This Bond is one of the Bonds of the series  designated  therein  which is
described in the  within-mentioned  indenture and  supplemental  indenture dated
___________, as secured thereby.

                                     US BANK NATIONAL ASSOCIATION, TRUSTEE,

                                     By
                                        ----------------------------------
                                                Authorized Signatory

<PAGE>
                                       4

                (FORM OF ALTERNATE CERTIFICATE OF AUTHENTICATION)
                     ALTERNATE CERTIFICATE OF AUTHENTICATION

      This Bond is one of the Bonds of the series  designated  therein which are
      described in the  within-mentioned  indenture and  supplemental  indenture
      dated ___________, as secured thereby.

                                     US BANK NATIONAL ASSOCIATION, TRUSTEE

                                     By
                                     -------------------------------------------

                                                   Authenticating Agent

                                     By
                                     -------------------------------------------
                                                   Authorized Signatory

                                 [FORM OF BOND]
                                    [REVERSE]

                     PUBLIC SERVICE ELECTRIC AND GAS COMPANY

                       FIRST AND REFUNDING MORTGAGE BOND,
                        ______________ SERIES __ DUE ____

      This Bond is one of the First and Refunding  Mortgage Bonds of the Company
issued and to be issued under and  pursuant  to, and all equally  secured by, an
indenture of mortgage or deed of trust dated August 1, 1924, as supplemented and
amended by supplemental indentures thereto, including the Supplemental Indenture
dated ___________, duly executed by the Company and US Bank National Association
as Trustee.  This Bond is one of the Bonds of the  ______________  Series __ due
____, which series is limited to the aggregate  principal amount of $___________
and is  issued  pursuant  to  said  Supplemental  Indenture  dated  ___________.
Reference is hereby made to said  indenture  and all  supplements  thereto for a
specification  of the  principal  amount  of Bonds  from  time to time  issuable
thereunder,  and for a description of the  properties  mortgaged and conveyed or
assigned  to said  Trustee  or its  successors,  the  nature  and  extent of the
security,  and  the  rights  of the  holders  of  said  Bonds  and  any  coupons
appurtenant thereto, and of the Trustee in respect of such security.

      In and by said indenture, as amended and supplemented, it is provided that
with the written approval of the Company and the Trustee,  any of the provisions
of said  indenture  may from time to time be  eliminated  or modified  and other
provisions  may be added  thereto  provided the change does nor alter the annual
interest rate,  redemption  price or date, date of maturity or amount payable on
maturity of any then  outstanding  Bond or conflict with the Trust Indenture Act
of 1939 as then in effect,  and provided the holders of 85% in principal  amount
of the Bonds secured by said indenture and then outstanding (including,  if such
change  affect the Bonds of one or more  series  but less than all  series  then
outstanding,  a like  percentage  of the then  outstanding  Bonds of each series
affected by such change,  and excluding Bonds owned or controlled by the Company
or by the parties  owning at least 10% of the  outstanding  voting  stock of the
Company,  as more fully specified in said indenture) consent in writing thereto,
all as more fully set forth in said indenture, as amended and supplemented.

      First and  Refunding  Mortgage  Bonds  issuable  under said  indenture are
issuable  in series,  and the Bonds of any series may be for  varying  principal
amounts and in the form of coupon bonds and of registered bonds without coupons,
and the Bonds of any one series may differ from the Bonds of any other series as
to  date,  maturity,  interest  rate  and  otherwise,  all as in said  indenture
provided and set forth. The Bonds of the  ______________  Series __ due ____, in
which this Bond is included, are designated "First and Refunding Mortgage Bonds,
______________ Series __ due ____".

<PAGE>
                                       5

      In case of the  happening  of an event of  default  as  specified  in said
indenture and said supplemental indenture dated March 1, 1942, the principal sum
of the Bonds of this  series  may be  declared  or may  become  due and  payable
forthwith, in the manner and with the effect in said indenture provided.

      The Bonds of this  series are  subject to  redemption  as  provided in the
Supplemental Indenture dated ______________.

<PAGE>
                                       6

      This Bond is  transferable,  but only as provided in said indenture,  upon
surrender  hereof,  by the  registered  owner  in  person  or by  attorney  duly
authorized  in writing,  at any office where the  principal  hereof and interest
hereon are payable;  upon any such  transfer a new Bond  similar  hereto will be
issued to the transferee.  No service charge shall be made for any such transfer
or exchange,  but the Company may require  payment of a sum  sufficient to cover
any tax or other  governmental  charge that may be imposed in relation  thereto.
The Company and the Trustee  hereunder  and any paying  agent may deem and treat
the person in whose name this Bond is  registered  as the absolute  owner hereof
for the purpose of receiving  payment of or on account of the  principal  hereof
and the interest hereon and for all other purposes;  and neither the Company nor
the Trustee  hereunder  nor any paying  agent shall be affected by any notice to
the contrary.

      The Bonds of this series are issuable  only in fully  registered  form, in
denominations of $_____ and any multiple of $_____.  Such fully registered Bonds
of the several  denominations  may be exchanged  for fully  registered  Bonds of
other  authorized  denominations,  but only as provided in said indenture,  upon
surrender  thereof,  by the  registered  owner in  person  or by  attorney  duly
authorized in writing, at either of said offices where the principal thereof and
interest  thereon  are  payable.  No service  charge  shall be made for any such
exchange,  but the Company may require  payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto.

      The Company shall not be required to issue or make  transfers or exchanges
of Bonds of this  series for a period of ten days next  preceding  any  interest
payment  date or next  preceding  the date of any  drawing  of such  Bonds to be
redeemed,  and the Company shall not be required to make  transfers or exchanges
of any such Bonds drawn in whole or in part for such redemption.

      No recourse under or upon any obligation,  covenant or agreement contained
in said  indenture  or in any  indenture  supplemental  thereto,  or in any Bond
issued thereunder,  or because of any indebtedness arising thereunder,  shall be
had  against  any  incorporator,   or  against  any  past,   present  or  future
stockholder,  officer, or director,  as such, of the Company or of any successor
corporation,   either   directly  or  through  the  Company  or  any   successor
corporation,  under any rule of law, statute or  constitutional  provision or by
the  enforcement  of any  assessment or by any legal or equitable  proceeding or
otherwise,  it being expressly  agreed and understood  that said indenture,  any
indenture supplemental thereto and the obligations issued thereunder, are solely
corporate obligations,  and that no personal liability whatever shall attach to,
or be incurred by, such incorporators,  stockholders,  officers or directors, as
such, of the Company, or of any successor  corporation,  or any of them, because
of the incurring of the indebtedness  thereby authorized,  or under or by reason
of any of the obligations, covenants or agreements contained in the indenture or
in any indenture  supplemental thereto or in any of the Bonds issued thereunder,
or implied therefrom.

      This Bond shall not be  entitled  to any  security  or benefit  under said
indenture, as amended and supplemented, and shall not become valid or obligatory
for any purpose, until the certificate of authentication, hereon endorsed, shall
have been signed by US Bank National Association as Trustee, or by its successor
in trust under said indenture.

      WHEREAS,  the execution and delivery of this  supplemental  indenture have
been duly authorized by the Board of Directors of the Company; and

      WHEREAS, the Company represents that all things necessary to make the bond
of the series hereinafter described,  when duly authenticated by the Trustee and
issued by the Company, a valid, binding and legal obligation of the Company, and
to make this supplemental  indenture a valid and binding agreement  supplemental
to the Indenture, have been done and performed:

<PAGE>
                                       7

      NOW, THEREFORE,  THIS SUPPLEMENTAL  INDENTURE WITNESSETH that the Company,
in  consideration  of the premises and the execution and delivery by the Trustee
of this supplemental indenture, and in pursuance of the covenants and agreements
contained in the  Indenture and for other good and valuable  consideration,  the
receipt of which is hereby acknowledged,  has granted, bargained, sold, aliened,
remised, released, conveyed, confirmed,  assigned, transferred and set over, and
by these presents does grant,  bargain,  sell, alien, remise,  release,  convey,
confirm,  assign,  transfer and set over unto the Trustee,  its  successors  and
assigns, forever, all the right, title and interest of the Company in and to all
property  of  every  kind and  description  (except  cash,  accounts  and  bills
receivable and all  merchandise  bought,  sold or  manufactured  for sale in the
ordinary  course of the Company's  business,  stocks,  bonds or other  corporate
obligations  or  securities,  other than such as are  described in Part V of the
Granting  Clauses of the  Indenture,  not  acquired  with the  proceeds of bonds
secured by the  Indenture,  and except as in the Indenture and herein  otherwise
expressly  excluded) acquired by the Company since the execution and delivery of
the  supplemental  indenture  dated  ___________,  subsequent  to the  Indenture
(except any such property duly released from, or disposed of, free from the lien
of the  Indenture,  in  accordance  with the  provisions  thereof)  and all such
property which at any time hereafter may be acquired by the Company;

      All of which  property it is intended  shall be included in and granted by
this  supplemental  indenture  and  covered  by the  lien  of the  Indenture  as
heretofore and hereby amended and supplemented;

      UNDER AND SUBJECT to any  encumbrances  or mortgages  existing on property
acquired  by the  Company  at the time of such  acquisition  and not  heretofore
discharged of record; and

      SUBJECT  also,  to the  exceptions,  reservations  and  provisions  in the
Indenture  and in  this  supplemental  indenture  recited,  and  to  the  liens,
reservations, exceptions, limitations, conditions and restrictions imposed by or
contained  in the several  deeds,  grants,  franchises  and  contracts  or other
instruments  through which the Company acquired or claims title to the aforesaid
property;  and Subject,  also, to the existing leases,  to liens on easements or
rights of way, to liens for taxes,  assessments and governmental  charges not in
default or the payment of which is deferred,  pending appeal or other contest by
legal  proceedings,  pursuant to Section 4 of Article Five of the Indenture,  or
the payment of which is  deferred  pending  billing,  transfer of title or final
determination of amount, to easements for alleys, streets,  highways,  rights of
way and  railroads  that may run across or encroach upon the said  property,  to
joint pole and similar  agreements,  to undetermined liens and charges,  if any,
incidental to construction, and other encumbrances permitted by the Indenture as
heretofore and hereby amended and supplemented;

      TO HAVE AND TO HOLD the property hereby conveyed or assigned,  or intended
to be conveyed or assigned,  unto the Trustee,  its successor or successors  and
assigns, forever;

      IN TRUST, NEVERTHELESS, upon the terms, conditions and trusts set forth in
the Indenture as heretofore and hereby amended and supplemented, to the end that
the said  property  shall be subject to the lien of the  Indenture as heretofore
and hereby  amended and  supplemented,  with the same force and effect as though
said property had been included in the Granting  Clauses of the Indenture at the
time of the  execution and delivery  thereof;

      AND  THIS  SUPPLEMENTAL   INDENTURE   FURTHER   WITNESSETH  that  for  the
considerations  aforesaid,  it is hereby covenanted  between the Company and the
Trustee as follows:

                                   ARTICLE I.

                     BONDS OF THE ______________ SERIES __.

      The series of bonds authorized by this supplemental indenture to be issued
under and secured by the  Indenture  shall be  designated  "First and  Refunding
Mortgage  Bonds,  ______________  Series __ due  ____";  shall be limited to the
aggregate principal amount of $____________;  shall mature on ___________; shall
bear  interest  at a rate  and on the  dates  set  forth in the form of the Bond
hereinbefore  described,  shall be payable as to both  principal and interest in
such coin or currency of the United  States of America as at the time of payment
shall  constitute  legal tender for the payment of public and private debts,  at
the principal corporate trust office of US Bank National Association,  or at the
corporate trust office of any paying agent appointed, and shall be issuable only
in the form of fully  registered  bonds in the  denominations  of $_____ and any
multiple of $_____ and the several denominations shall be interchangeable.

<PAGE>
                                       8

      The Company shall not be required to issue or make  transfers or exchanges
of bonds of the _____________ Series __ for a period of ten days next  preceding
any  interest  payment  date or next  preceding  the date of any drawing of such
bonds to be redeemed, and the Company shall not be required to make transfers or
exchanges of any such bonds drawn in whole or in part for such redemption.

      Bonds  of  the  ______________  Series  __  shall  be   transferable   and
exchangeable,  but only as provided in the Indenture, upon surrender thereof for
cancellation by the registered owner in person or by attorney duly authorized in
writing at either of said offices. The Company hereby waives any right to make a
charge for any transfer or exchange of Bonds of the _____________ Series __, but
the  Company  may require  payment of a sum  sufficient  to cover any tax or any
other governmental charge that may be imposed in relation thereto.

                                   ARTICLE II.

                REDEMPTION OF BONDS OF ______________ SERIES __.

     SECTION 2.01. Redemption--Redemption Prices. Bonds of the ______________
     Series __ shall be subject to redemption at any time:

      a)    as a whole at any time on or after ___________, or in part from time
            to time on any interest payment date on or after  ___________ at the
            election of the Company as provided  in Section  2.02  hereof,  upon
            payment  of  100%  of  the  principal  amount  of the  bonds  of the
            ______________  Series __ to be redeemed (said amount  (exclusive of
            accrued  interest) is herein referred to as the "regular  redemption
            price");

      (b)   at any time by the application of any proceeds of released  property
            or other money held by the Trustee and which, pursuant to Section 4C
            of Article Eight of the Indenture,  as amended and supplemented,  is
            applied to the redemption of bonds of the ______________  Series __,
            upon payment of 100% of the principal  amount  thereof  specified as
            the "Special  Redemption Price" in the form of Bond hereinbefore set
            forth  (said  amount  (exclusive  of  accrued  interest)  is  herein
            referred to as the "special redemption price");

      together  in each  case  with  accrued  interest  to the  date  fixed  for
      redemption.

      SECTION  2.02.  Redemption  at Election of  Company.  The  election of the
Company  to redeem  any of the  bonds of the  ______________  Series __ shall be
evidenced by a resolution  of the Board of Directors of the Company  calling for
redemption on an interest payment date all or a stated principal amount thereof.
Any such call may be conditioned upon the deposit with the Trustee, on or before
such  redemption  date,  of the total regular  redemption  price of the bonds so
called,  with accrued  interest thereon to the redemption date. At least 40 days
prior to such redemption date (or at such later time as shall be satisfactory to
the  Trustee) the Company  shall file with the Trustee a certified  copy of such
resolution.  Unless  such call  shall be  conditioned  upon the  deposit  of the
regular  redemption price and accrued interest with the Trustee on or before the
redemption  date and unless the notice below  provided  for shall so state,  the
Company  shall on or before such  redemption  date  deposit with the Trustee the
total regular redemption price of all the bonds so called, with accrued interest
thereon to the redemption date.

      If the  Company  elects  to  redeem  less  than  all of the  bonds  of the
______________  Series  __,  the  particular  bonds or  portions  thereof  to be
redeemed  shall,  upon request of the  Company,  be drawn by lot by the Trustee,
according to such method as it shall deem proper,  from the bonds of said series
then outstanding. The Trustee shall certify to the Company the serial numbers of
the bonds so drawn.

      The Company shall thereupon give notice of such redemption,  in the manner
and substantially in the form provided in Section 2.03 hereof to be given in the
case of bonds of the  ______________  Series __ called pursuant to Section 4C of
Article Eight of the Indenture, except that (1) such notice shall state that the
bonds  specified have been called for redemption at the election of the Company,
and that they will be payable on the date  specified  in the  resolution  of the
Board of Directors of the Company at a stated amount (which shall be the regular
redemption  price plus any accrued and unpaid interest to the redemption  date),
(2) if all the bonds of the ______________ Series __ be called, the notice shall
so state and may omit the  serial  numbers  thereof,  (3) if the date  fixed for
redemption be other than an interest  payment date,  the notice shall state that
the bonds will be payable at the regular  redemption price plus accrued interest
to the redemption  date, (4) the mailing of such notice to registered  owners of
bonds of said series  shall take place not less than 30 nor more than 40 days in
advance of the date fixed for redemption, but failure

<PAGE>
                                       9

duly to give  such  notice of  redemption  to the  registered  owner of any bond
called for  redemption  in whole or in part shall not affect the validity of the
proceedings  for the  redemption of any other bond,  and (5) if the call of such
bonds for redemption shall have been conditioned upon the deposit of the regular
redemption  price  and  accrued  interest  with the  Trustee  on or  before  the
redemption date, as above permitted,  the notice shall so state, and shall state
that unless such deposit is made on or before such date the call for  redemption
and the notice shall be of no effect.

      Before  any money  shall be applied by the  Trustee to the  redemption  of
bonds under this Section, the Company shall deliver to the Trustee a certificate
or opinion by the President or a Vice President of the Company and an opinion of
counsel,  stating that all conditions  precedent  provided for herein (including
any covenants  compliance with which constitutes a condition precedent) relating
to such redemption have been complied with.

      SECTION 2.03.  Redemptions  Pursuant to Section 4C of Article Eight of the
Indenture.  If,  pursuant to Section 4C of Article  Eight of the  Indenture,  as
amended and supplemented,  any proceeds of released property or other money then
held by the  Trustee  shall be  applied  to the  redemption  of the bonds of the
______________  Series  __,  the  Trustee  not later  than 30 days  prior to the
applicable  redemption  date,  shall draw by lot  according to such method as it
shall  deem  proper,  from all the  bonds of the  ______________  Series __ then
outstanding,  such principal amount thereof as is to be redeemed.  Bonds of said
series so redeemed shall be cancelled.

      After such drawing the Trustee  shall,  not later than 30 nor more than 40
days in  advance  of the date  fixed for  redemption,  give,  in the name of the
Company,  notice by mail that bonds of the ______________  Series __ bearing the
serial  numbers  specified  have been  called for  redemption  pursuant  to said
Section  4C of  Article  Eight,  that  they  will  be due  and  payable  on such
redemption  date, at the principal  corporate  trust office of the Trustee or at
the  corporate  trust office of any paying agent  appointed,  at a stated amount
(which  shall be the  Special  Redemption  Price  (plus any  accrued  and unpaid
interest to the  redemption  date),  that,  if the date fixed for  redemption be
other than an interest  payment  date,  the bonds will be payable at the Special
Redemption  Price,  plus accrued  interest to the redemption  date, and that all
interest  thereon  will cease to accrue  after said date.  Such notice  shall be
mailed to the  registered  owners of the bonds so  called,  at their  respective
addresses  as the same may appear on the  registry  books.  Failure duly to give
such  notice  of  redemption  to the  registered  owner of any bond  called  for
redemption in whole or in part shall not affect the validity of the  proceedings
for the redemption of any other bond.

      SECTION 2.04. Called Bonds to be Surrendered--Interest to Cease. Each bond
or  portion  thereof  of the  ______________  Series __ so called  under  either
Section 2.02 or 2.03 hereof shall be due and payable (upon surrender thereof) at
the places and price and on the date specified in such notice,  anything  herein
or in such bond to the  contrary  notwithstanding.  From and after the date when
each bond or portion  thereof of the  ______________  Series __ shall be due and
payable as aforesaid  (unless  upon said date the full amount due thereon  shall
not be held by the  Trustee  and be  immediately  available  for  payment),  all
further  interest shall cease to accrue on such bond or on such portion thereof,
as the case may be.

      SECTION  2.05.  Bonds Called in Part. If only a portion of any bond of the
______________  Series  __  shall be drawn  by lot by the  Trustee  pursuant  to
Section 2.02 or 2.03 hereof, the notice of redemption  hereinbefore provided for
shall  specify the serial  number of such bond and the portion of the  principal
amount  thereof  to be  redeemed.  Upon  surrender  of  such  bond  for  partial
redemption and upon payment of the portion so called for redemption,  a new bond
or bonds of the ______________ Series __, in aggregate principal amount equal to
the  unredeemed  portion of such  surrendered  bond,  shall be  executed  by the
Company,  authenticated  by or on behalf of the  Trustee,  and  delivered to the
registered owner thereof, without expense to such owner.

      SECTION 2.06.  Provisions of Indenture Not  Applicable.  There shall be no
sinking  fund for the bonds of  ______________  Series  __.  The  provisions  of
Article Four of the Indenture,  as amended and supplemented,  shall not apply to
the  procedure  for the  exercise  of any right of  redemption  reserved  by the
Company in this Article in respect of the bonds of the ______________ Series __.

<PAGE>
                                       10

                                   ARTICLE III

                                 MISCELLANEOUS.

      SECTION 3.01. Authentication of Bonds of ______________ Series __. None of
the Bonds of the ______________ Series __, the issue of which is provided for by
this  supplemental  indenture,  shall be  authenticated  by or on  behalf of the
Trustee except in accordance  with the  provisions of the Indenture,  as amended
and supplemented,  and this supplemental indenture, and upon compliance with the
conditions in that behalf therein contained.

      SECTION  3.02.  Authenticating  Agent.  As long as any of the bonds of the
______________  Series  __  remain  outstanding,  the  Trustee  may  appoint  an
authenticating  agent to act on its  behalf  and  subject  to its  direction  in
connection with the  authentication  of bonds of the  ______________  Series __.
Such authenticating  agent shall be appointed by the Trustee by an instrument in
writing and shall have no responsibility or liability for any action taken by it
at the direction of the Trustee. Such authenticating agent shall at all times be
a corporation  organized and doing  business under the laws of the United States
or of any State or  Territory or of the  District of Columbia  authorized  under
such laws to act as authenticating  agent, having a combined capital and surplus
of at least $5,000,000, subject to supervision or examination by Federal, State,
Territorial,  or  District  of  Columbia  authority  and,  if  there  be  such a
corporation  willing and able to act as  authenticating  agent on reasonable and
customary  terms,  having its principal office and place of business in The City
of New  York.  If such  corporation  publishes  reports  of  condition  at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining  authority,  then for the  purposes of this  Section 3.02 the combined
capital  and  surplus  of such  corporation  shall be deemed to be its  combined
capital  and  surplus as set forth in its most  recent  report of  condition  so
published.

      Any  corporation  into  which  any  authenticating  agent may be merged or
converted or with which it may be  consolidated,  or any  corporation  resulting
from any merger,  conversion, or consolidation to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate agency business
of any  authenticating  agent,  shall  continue to be the  authenticating  agent
without the  execution  or filing of any paper or any further act on the part of
the Trustee or the authenticating agent.

      Any  authenticating  agent may at any time resign by giving written notice
of  resignation  to the Trustee and to the Company.  The Trustee may at any time
terminate the agency of any  authenticating  agent by giving  written  notice of
termination to such authenticating agent and to the Company. Upon receiving such
a notice of resignation  or upon such a termination,  or in case at any time any
authenticating  agent  shall  cease  to  be  eligible  in  accordance  with  the
provisions  of  this  Section   3.02,   the  Trustee  may  appoint  a  successor
authenticating  agent. The Trustee shall give written notice of such appointment
to the  Company  and shall mail  notice of such  appointment  to all  registered
owners  of the  bonds of the  ______________  Series  __,  at  their  respective
addresses  as  the  same  may  appear  on  the  registry  books.  Any  successor
authenticating  agent,  upon acceptance of its appointment,  shall become vested
with all the rights,  powers,  duties and  responsibilities  of its predecessor,
with like effect as if originally appointed  authenticating  agent. No successor
authenticating  agent shall be appointed unless eligible under the provisions of
this Section 3.02.

      The Trustee  agrees to pay to the  authenticating  agent from time to time
reasonable  compensation for its services,  and the Trustee shall be entitled to
be reimbursed for such payments as provided in the Indenture.

      SECTION 3.03.  Additional  Restrictions  on  Authentication  of Additional
Bonds Under  Indenture.  The Company  covenants  that from and after the date of
execution  of this  supplemental  indenture no  additional  bonds (as defined in
Section 1 of Article Two of the Indenture) shall be authenticated  and delivered
by the Trustee  under  Subdivision A of Section 4 of said Article Two on account
of additions or improvements to the mortgaged property;

            (1) unless the net  earnings of the Company for the period  required
      by Subdivision C of Section 6 of said Article Two shall have been at least
      twice the fixed  charges  (in lieu of 1-3/4 times such fixed  charges,  as
      required by said Subdivision C); and for the purpose of this condition (a)
      such  fixed  charges  shall in each  case  include  interest  on the bonds
      applied for,  notwithstanding  the  parenthetical  provision  contained in
      clause (4) of said  Subdivision  C, and (b) in computing such net earnings
      there shall be included in expenses of operation  (under  paragraph (c) of
      said  Subdivision  C)  all  charges  against  earnings  for  depreciation,
      renewals  or  replacements,  and  all  certificates  with  respect  to net
      earnings delivered to the Trustee in connection with any authentication of
      additional bonds under said Article Two shall so state; and

            (2)  except  to the  extent of 60% (in lieu of 75% as  permitted  by
      Subdivision  A of Section 7 of said Article Two) of the cost or fair value
      to the Company of the additions or improvements forming the basis for such
      authentication of additional bonds.

<PAGE>
                                       11

      SECTION 3.04.  Restriction  on Dividends.  The Company will not declare or
pay any dividend on any shares of its common stock (other than dividends payable
in  shares of its  common  stock)  or make any  other  distribution  on any such
shares, or purchase or otherwise acquire any such shares (except shares acquired
without  cost to the  Company)  whenever  such  action  would  reduce the earned
surplus of the Company to an amount less than  $10,000,000 or such lesser amount
as may remain after deducting from said $10,000,000 all amounts appearing in the
books of account of the Company on December  31, 1948,  which shall  thereafter,
pursuant to any order or rule of any regulatory body entered after said date, be
required  to be removed,  in whole or in part,  from the books of account of the
Company by charges to earned surplus.

      SECTION  3.05.  Use of  Facsimile  Seal  and  Signatures.  The seal of the
Company and any or all signatures of the officers of the Company upon any of the
Bonds of the ______________ Series __ may be facsimiles.

      SECTION  3.06.  Time for Making of Payment.  All  payments of principal or
redemption  price of, and interest on, the Bonds of the ______________ Series __
shall be made either prior to the due date thereof or on the due date thereof in
immediately  available  funds. If any interest payment date (other than a stated
maturity or  redemption  date) would  otherwise  be a day that is not a business
day, such interest  payment date shall be postponed to the next  succeeding  day
that is a business day. If the stated  maturity or redemption  date of this Bond
would  otherwise be a day that is not a business  day,  such stated  maturity or
redemption  date, as the case may be, will be the next  succeeding day that is a
business  day,  and no  additional  interest  shall  accrue  as a result of such
delayed payment.

      SECTION 3.07.  Effective Period of Supplemental  Indenture.  The preceding
provisions of Articles I, II and III of this supplemental indenture shall remain
in effect only so long as any of the Bonds of the ______________ Series __ shall
remain outstanding.

      SECTION 3.08. Effect of Approval of Board of Public Utilities of the State
of New Jersey. The approval of the Board of Public Utilities of the State of New
Jersey of the execution  and delivery of these  presents and of the issue of any
Bond of the  ______________ Series __ shall not be construed as approval of said
Board of any other act,  matter or thing which  requires  approval of said Board
under the laws of the State of New Jersey.

      SECTION 3.09.  Execution in Counterparts.  For the purpose of facilitating
the recording hereof,  this supplemental  indenture has been executed in several
counterparts,  each of which shall be and shall be taken to be an original,  and
all collectively but one instrument.

<PAGE>
                                       12

      IN WITNESS WHEREOF,  Public Service Electric and Gas Company, party hereto
of the first part,  after due corporate and other  proceedings,  has caused this
supplemental  indenture to be signed and acknowledged or proved by its President
or one of its Vice  Presidents and its corporate seal hereunto to be affixed and
to be attested by the signature of its Secretary or an Assistant Secretary;  and
US Bank National Association,  as Trustee,  party hereto of the second part, has
caused this  supplemental  indenture to be signed and  acknowledged or proved by
its  President  or one of its  Vice  Presidents,  and its  corporate  seal to be
hereunto affixed and to be attested by the signature of its Secretary, Assistant
Secretary,  Vice  President,  or  an  Assistant  Vice  President.  Executed  and
delivered this ____ day of ___________.

Attest:
                                     PUBLIC SERVICE ELECTRIC AND GAS COMPANY

                                     By     ____________________________
                                       -----------------------------------------
                                                  __________________
                                                    Vice President
Attest:

     _______________________
-----------------------------------
       __________________
       Assistant Secretary

                                     US BANK  NATIONAL ASSOCIATION

                                     By     _____________________________
                                       -----------------------------------------
                                                  __________________
                                                    Vice President
Attest:

     _______________________
-----------------------------------
       __________________
         Vice President

<PAGE>
                                       13

STATE OF NEW JERSEY          )
                          SS:)
COUNTY OF ESSEX              )

      Be it  Remembered,  that on this ___ day of  ___________,  before  me, the
subscriber,  a Notary  Public of the State of New  Jersey,  personally  appeared
___________, who, I am satisfied, is a Vice President of Public Service Electric
and Gas  Company,  one of the  corporations  named  in and  which  executed  the
foregoing  instrument,  and is the person who signed the said instrument as such
officer, for and on behalf of such corporation, and I having first made known to
him the contents thereof,  he did acknowledge that he signed the said instrument
as such  officer,  that the said  instrument  was made by such  corporation  and
sealed with its corporate  seal,  that the said  instrument is the voluntary act
and deed of such  corporation,  made by  virtue of  authority  from its Board of
Directors,  and that said corporation the mortgagor, has received a true copy of
said instrument.

                                            ___________________
                                       -----------------------------------------
                                        _______________________
                                        Notary Public of New Jersey
                                        My Commission Expires

STATE OF NEW JERSEY          )
                          SS:)
COUNTY OF ESSEX              )

      Be it  Remembered,  that on this ___ day of  ___________,  before  me, the
subscriber,  a Notary  Public of the State of New  Jersey,  personally  appeared
___________,  who,  I am  satisfied,  is a Vice  President  of US Bank  National
Association,  one of the corporations  named in and which executed the foregoing
instrument,  and is the person who signed the said  instrument  as such officer,
for and on behalf of such corporation,  and I having first made known to him the
contents thereof,  he did acknowledge that he signed the said instrument as such
officer,  that the said instrument was made by such  corporation and sealed with
its corporate  seal, and that the said  instrument is the voluntary act and deed
of such corporation, made by virtue of authority from its Board of Directors.

                                            ___________________
                                       -----------------------------------------
                                        _______________________
                                        Notary Public of New Jersey

                                        My Commission Expires ___________

<PAGE>
                                       14

                            CERTIFICATE OF RESIDENCE

      US Bank National  Association,  Mortgagee and Trustee within named, hereby
certifies that its precise residence is 21 South Street,  Morristown, New Jersey
07960.

                                     US BANK NATIONAL ASSOCIATION

                                      By     _____________________
                                        ----------------------------------------
                                         _________________________
                                         Vice President

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