Kathleen Lally – VP, IR Ralph Izzo – Chairman, President and CEO Caroline Dorsa – EVP and CFO

Reza Hatefi – Decade Capital Paul Patterson – Glenrock Associates Jonathan Arnold – Deutsche Bank Greg Gordon – Morgan Stanley Paul Fremont – Jefferies Leslie Rich – Columbia Management Vedula Murti – CDP US Annie Tsao – AllianceBernstein Brian Chin – Citigroup Angie Storozynski – Macquarie Capital

Ladies and gentlemen, thank you for standing by. Welcome to the Public Service Enterprise Group fourth quarter 2009 earnings conference call and webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session for members of the financial community. (Operator instructions) As a reminder, this conference is being recorded Thursday, February 18th, 2010 and will be available for telephone replay, beginning at 1 O’clock PM February 18, 2010 through February 25th, 2010. It will also be available as an audio webcast on PSEG's corporate website at www.pseg.com. I would now like to turn the conference over to Kathleen Lally. Please go ahead.

Thank you operator. Good morning everyone. We appreciate you participating in our call today. As you are aware, we did release our fourth quarter and full year 2009 earnings statements earlier this morning. The release and attachments are posted on our website at www.pseg.com under the Investors section. We also posted a series of slides that would be available to you that detail operating results by company for the quarter. Our 10-K for the period ended December 31, 2009 is expected to be filed next week, probably by mid to late week. I am not going to read the full disclaimer statement or the comments we have on the difference between operating earnings and GAAP results, but I please ask that you read those comments contained in our slides and on our website. The disclaimer statement regards forward-looking statements, detailing the number of risks and uncertainties that could cause actual results to differ materially from forward-looking statements made therein, and although we may elect to update forward-looking statements from time-to-time, we specifically disclaim any obligation to do so even if our estimate changes unless required by applicable securities laws. As you know, we also present a commentary with regard to the difference between operating earnings and net income reported in accordance with Generally Accepted Accounting Principles in the United States. PSEG believes that the non-GAAP financial measure of operating earnings provides a consistent and comparable measure of performance of metrics to help shareholders understand performance trends. I am now going to turn the call over to Ralph Izzo, Chairman, President and Chief Executive Officer of Public Service Enterprise Group. Joining Ralph on the call is Caroline Dorsa, Executive Vice President and Chief Financial Officer. At the conclusion of their remarks, there will be time for your questions. We ask that you limit yourself to one question and one follow-up question. Thank you.

Thank you Kathleen, and good morning, and thanks everyone for joining us today on this call. Earlier this morning, we reported operating earnings for the fourth quarter of $0.62 per share, which is the same as what we earned in the year-ago period. The results for the quarter brought operating earnings for 2009 to $3.12 per share. This is to be compared to $3.03 per share earned in 2008. The full-year results fell in the middle of the earnings guidance of $3.00 to $3.25 per share we set for 2009. These results were achieved in the face of what can only be characterized as very challenging markets. A weak economy and abnormal weather affected demand in the fourth quarter and throughout the year. In PSEG Power, our nuclear and combined cycle fleet of generating assets produced at record levels during 2009. Their strong performance and availability helped to offset the impact of lower power prices on our earnings. Earnings were also aided by our employees’ response to weaker than anticipated demand with a reduction in expenses. At PSEG Energy Holdings, we were able to take advantage of the financing environment to negotiate the termination of 12 cross-border leases, including two in the fourth quarter. These deals substantially reduced our potential tax and financial risk. Clearly our 2009 results demonstrate the importance of a balanced portfolio of assets. The credit for our results, however, belongs to our employees. It is worth repeating, their commitment to our shared goal of operational excellence and their responsiveness to a call to control costs was a major contributor to our results. Cost reduction programs implemented throughout the organization, including support from our union membership, will continue to be an important contribution to our operating results. For 2010, we are forecasting operating earnings will fall within the range of $3.00 and $3.25 per share. At the moment, we are not providing you with the breakdown of operating earnings by subsidiary as has been our custom in prior years. We intend to provide that guidance at the conclusion of PSE&G’s distribution rate case. Now let me take a step back for a moment to assess the business environment. The providers of energy in today's market face many challenges, in light of changing fuel prices and the need to meet increased government mandates. I'm confident that PSEG can meet the challenges of today's demanding market. We are working toward improving on our operationally excellent low carbon integrated business model that provides energy to customers in a cost-efficient way, and meets our shareholder requirements for attractive returns. PSEG’s capital commitments are focused on maintaining the availability of critical generating units in constrained markets, expanding our investment in renewable solar energy projects at attractive risk-adjusted returns, and increasing our nuclear footprint through upgrades of existing capacity as we also improve the reliability and functionality of our distribution and transmission infrastructure. We are well down this path. Regulatory approvals received by PSE&G in 2009 support the investment of $1.4 billion to improve reliability, help customers save energy, and expand the use of solar energy. These approvals provide us with prompt cost recovery and a reasonable return. Also the New Jersey Board of Public Utilities’ recent decision on our $750 million investment in the Susquehanna to Roseland transmission line will improve reliability in the northern part of New Jersey. We hope our past results and our ongoing passion help you to understand our commitment to providing excellence in operations into the future. The board of directors recently approved the 3% increase in the quarterly common dividend rate to $34.25 per share for the first quarter, which represents an indicated annual dividend rate of $1.37 per share. The board’s action represents the seventh consecutive annual increase in the dividends, and the continuation of 103 year history of paying an annual dividend to shareholders. We are committed to improving returns on operations, investing at levels that support our long-term growth, and sharing these returns. We look forward to seeing many of you at our annual conference for the financial community at February 26. As we have in the past, we will discuss the strategic drivers of our business, public policy that matters to our industry, and our strategy to position PSEG for a changing energy environment, as well as the specific market and cost factors that influence us. And now, I will turn the call over to Caroline.

Thanks Ralph, and good morning everyone. As Ralph said, PSEG reported operating earnings in the fourth quarter of $0.62 per share versus operating earnings of $0.62 per share in last year’s fourth quarter. Our earnings for the fourth quarter brought operating earnings for the full year to $3.12 per share versus operating earnings for 2008 of $3.03 per share. Just to remind you, our operating earnings exclude the impact of the change in value in our NDT investments and obligations, as well as other charges related to future decommissioning, and any changes in the value of transactions related to our generating assets that don’t qualify for hedge accounting, i.e., their mark-to-market. We also exclude the impact of adjustments to lease reserves, which I will come back to later in the discussion. As we have also done throughout the year, we have adjusted the prior year numbers to make your comparisons easy to follow. Slide 4 provides a reconciliation of operating income to income from continuing operations and net income for the quarter. As you can see on slide 10, PSEG Power provides the largest contribution to earnings. For the quarter, Power reported operating earnings of $0.47 per share compared with $0.49 per share last year. PSE&G reported operating earnings of $0.13 per share compared to $0.15 per share last year. PSEG Energy Holdings reported operating earnings of $0.03 per share compared with a marginal contribution in the year ago quarter. The parent company reported a loss of $0.01 a share compared with a loss of $0.02 per share in last year’s quarter. We have provided you with waterfall charts on slides 12 and 13 that take you through the net changes in quarter-over-quarter and year-over-year operating earnings comparisons by major business. But now I would like to review each company in a little more detail, starting with Power. As shown on slide 15, PSEG Power reported operating earnings for the fourth quarter of $0.47 per share compared with $0.49 per share a year ago. Please note that Power’s results for the quarter, the year, and the results for the year ago period now reflect the impact of the October 1 transfer of the Texas gas fired assets from Holdings to Power. Power’s operating earnings for the quarter brought 2009’s full year operating earnings to 1.2 billion in line with our guidance. The operating environment, as Ralph said, in the quarter continued to be challenged by low-power prices as well as a weak economy, although not as challenging of what we experienced in the third quarter, when as you recall weather compounded our difficulties. Power’s results for the fourth quarter were affected by those weak power prices, which more than offset an 8% increase in generation. The decline in margin was experienced in the Texas and New York, New England market, $0.02 a share in each market. Margins in PJM, however, increased $0.02 per share, a 3.5% increase quarter-over-quarter. The PJM assets continue to benefit from higher hedge related prices, and a 2% increase in nuclear generation, which together helped to offset a decline in BGS related volume. The weak economy continued to affect the level of demand, which reduced earnings by an estimated $0.01 per share. The decline in BGS volumes also reflects the effect of customer migrations, which we estimate reduced earnings by $0.02 per share in the quarter, and for the year we estimate customer migration away from BGS cost us about $0.08 per share. The earnings impact for the full year reflects the small impact to the first-half of the year, or $0.02 per share over the first full six-month period for migration, the third-quarter impact of $0.04 per share that we spoke about on the third-quarter call, and the fourth quarter impact of $0.02 per share. Despite all of these factors across the year, PJM margins were still up 9% for the year, reflecting our dispatch flexibility and hedging strategies, which offset a decline in demand. Earnings comparisons were also affected by an increase in O&M, depreciation and other miscellaneous items of $0.03 per share. But note that for the full year, Power’s O&M expense was in fact 2% lower than a year ago. As anticipated, we earned $0.01 per share on trading activities, and coupled with gains this quarter associated with contracting activities, including Power’s participation in full requirements auctions, these activities together increased earnings by $0.03 per share. As I mentioned, generation increased 8% during the quarter, Power’s nuclear and combined cycle fleet each experienced record levels of output. Generation from the combined cycle fleet, including Texas, increased 29.8% in the quarter. Excluding Texas, output from the combined cycle unit to New York and New Jersey increased 47%. The nuclear fleet operated at 92% capacity factor in the quarter versus 91.3% in last year's fourth quarter, bringing the capacity factor for the full year to 93.4%, record performance for the year and in line with our expectations as outlined on the third quarter earnings call. Generation from Power’s New Jersey coal units increased during the fourth quarter as compared to earlier in the year as an increase in the cost of gas relative to coal improved the economic dispatch of these units. But on an annual basis, as you can see on the slides, coal-fired generation was still below last year's level of output. The increasing in generation from the coal-fired stations this quarter, coupled with the lower pricing, reduced average gross margins for the PJM’s New York and New England fleet to $51 per megawatt hour in the quarter from $55 per megawatt hour in last year's quarter, again in line with our expectations. The average gross margin earned on the Texas combined cycle generation declined to $7 per megawatt hour in the quarter from $16 per megawatt hour last year, as a result of decline in spark spreads, which we talked about before. The growth in output during the fourth quarter brought output for the full year to 59.8 terawatt hours, 5% decline from 2008’s level of generation. Nuclear fleet provided approximately 51% of Power’s total generation. The strong performance from nuclear, coupled with lower gas costs, supported annual average gross margins on the PJM’s New York and New England fleet of $60 per megawatt hour for the year, slightly higher than the $58 per megawatt hour we were forecasting at the start of the year. To summarize these drivers, we estimate Power’s earnings for the full year were hurt by weak economic conditions about $0.03 per share, cooler than normal weather during the important summer months about $0.02 per share, and as we said earlier customer migration is about $0.08 per share. On the other side, recontracting and the dispatch flexibility of the PJM fleet helped results by about $0.08 per share. Now, I will turn to PSE&G. PSE&G reported operating earnings for the fourth quarter of 2009 of $0.13 per share compared with $.15 per share for the fourth quarter of 2008, as shown on slide 22. PSE&G’s full year 2009 operating earnings were $321 million, also in line with our guidance. Gas margins declined in the fourth quarter by about $0.01 per share. The results were affected by warmer than normal weather in this year’s fourth quarter compared with colder than normal weather experienced in the prior year. The reduction in gas margin was offset by an increase in transmission rates and higher appliance service margin which together added $0.01 per share to earnings. Earnings comparisons were also hurt by an increase in pension expense, which more than offset a reduction in other operation and maintenance expenses and a lower tax rate. These items combined to reduce PSE&G’s fourth quarter earnings by $0.02 per share, as normal weather conditions and a weak economy hurt demand in 2009. During the fourth quarter weather normalized, electric demand declined 3.2%, resulting in a 2.5% decline in demand for the full year. Within that total, weather normalized demand from residential electric customers declined by 0.8% for the fourth quarter, and 0.9% for the full year. For gas, weather normalized demand increased 1.1% in the fourth quarter resulting in a 0.7% decline in sales for the full year. Trends in employment and housing tend to be pretty good barometers of the New Jersey economic condition, and both were at multiyear lows, although we may not be experiencing a decline as fast as we did earlier in the year; we have not experienced as yet any up-tick in growth. Another key development at the utility, as you are probably aware, the regulatory calendar is full. PSE&G implemented $23 million increase in transmission revenues effective January 1, as part of its formula rate treatment on increased investment. The New Jersey BPU approved PSE&G's $750 million investments in the Susquehanna to Roseland transmission line on February 11 of this year. The BPU’s decision represents a critical milestone in the regulatory approval process. PSE&G also updated its filing with the BPU for an increase in electric and gas revenues totaling $222 million. This updated request reflects the actual results for 12 months ended December 31 of 2009. The update represents an increase in electric revenues of $14 million and reductions in gas revenues of $23 million from the May 2009 rate filing. PSE&G’s request is based on an 11.25% return on equity, and a 51.2% equity ratio. Following the normal process for this request, the BPU would be expected to issue a decision in May or June of this year with rates effective midyear. For 2009, for reference, operating earnings provided an earned return on equity of about 8% for our distribution business, and about 11% for our transmission business. Next, let me turn to PSEG Energy Holdings. Energy Holdings reported operating earnings for the fourth quarter of 2009 of $0.03 per share compared to operating earnings of about $1 million for the fourth quarter of 2008. Holdings’ quarterly earnings were aided by the recognition of gains on the successful termination of two cross-border leases, which amounted to $0.02 per share. The results also benefited from a reduction in O&M expenses and lower interest expense, which added $0.02 per share to earnings. A reduction in the value of our remaining International generation assets lowered earnings by $0.01 a share and reduced our investment in that asset to a nominal level. The termination of the two leases in the fourth quarter brings the number of leases terminated to 13, 12 in 2009 and one and 2008. Our activity reduced our potential cash tax liability to $660 million. As we have discussed before, if we had not terminated any leases, our potential liability would have risen to more than $1.3 billion. So we have in fact cut our risk in half, and as we said before, we have been using the proceeds from counter parties from those terminations to accomplish this risk reduction. In addition, we still have $320 million on deposit with the IRS to meet any potential tax liabilities. So think of that as an offset to the $660 million exposure. Also, we’ve reduced our reserve for lease exposures by $29 million after-tax based on a reassessment of risk following the outcome of the favorable court decision late in 2009 for another utility. The net after-tax gain of $29 million is reflected in earnings from continuing operations, but not in operating earnings. In terms of 2010 outlook, as Ralph mentioned, we are providing operating earnings guidance for 2010 of $3.00 to $3.25 per share. We won't be providing operating earnings guidance by subsidiary until the conclusion of PSE&G's distribution rate case. Overall, our guidance is based on expectations of a modest improvement in demand and normal weather versus the very weak conditions experienced in 2009. We estimate the combination of a normal weather conditions and a weak economy reduced 2009 earnings by $0.08 per share at Power and PSE&G. However, 2009 operating earnings also benefited from the $0.13 per share of gains on the termination in leases, which we don't expect to see duplicated in the current year. Remember, we have only five leases left, and we do continue to actively manage them. Our ability to control growth in expenses, and operate at top quartile levels of performance in many areas of our business provide support for our 2010 earnings guidance. We estimate our O&M, excluding the impact of regulatory recovery clauses for our company as a whole will be flat year-over-year as it was for the company as a whole for 2009. Finally, a brief comment on financing activity. As you probably are aware, we remain fairly active in the fourth quarter. We eliminated the last piece of long-term debt at the parent with the redemption of $49 million of debt. PSE&G was able to take advantage of attractive debt markets to prefinance a portion of its 2010 capital needs through the issuance of $250 million of 30-year medium term notes at a rate of 5.375. PSE&G also made an early redemption of $44 million of debt. And as I said, we continue to reduce our potential lease related tax liability with proceeds from the termination of leases. So, from up then at year end, a simple calculation of debt to capital will reveal a reduction in debt to capital to 45% from 49% at the end of 2008. So the balance sheet continues to be strong. That concludes my remarks, and now we look forward to taking your questions.

(Operator instructions) One moment please for the first question. Your first question comes from the line of Reza Hatefi, Decade Capital. Reza Hatefi - Decade Capital: Thank you. I was wondering, just what is the base load coal and nuke generation volumes assumed in 2010?

I haven't given any estimates for generation volumes for the business for 2010. Keep in mind that what we are anticipating is to have normal weather and of course, we had much cooler than normal weather in 2009, and some benefit from the economy, but we're not ready to say we expect the economy to fully rebound, but we haven't given details on the generation volumes. Keep in mind we also use our dispatch flexibility based on pricing in the market to dispatch our assets for the best economics in 2009. We do the same thing in 2010. Reza Hatefi - Decade Capital: And what is your hedge percentage and average hedge price in 2010?

So for 2010, we are about 90% hedged on our base load coal and nuclear. We are following the BGS, with an average hedge price of about $72 per megawatt hour. Reza Hatefi - Decade Capital: And could you --

Reza, we got to ask that you allow somebody else to ask a question. You can get back on. Thank you. Reza Hatefi - Decade Capital: Okay. Thanks.

Your next question comes from the line of Paul Patterson, Glenrock Associates. Paul Patterson - Glenrock Associates: Good morning.

Good morning. Paul Patterson - Glenrock Associates: The gain from the contracts that you guys saw in the quarter, what was it for the year and what's the outlook for 2010 on that?

On the leases. Okay, the leases. So the gains on the leases -- Paul Patterson - Glenrock Associates: No, no, no, I'm sorry. I'm talking -- there's contract gain that was mentioned in the release, I think it was about -- I'm not sure exactly how many cents a share it was, but during the fourth quarter, you guys saw gains on contracts entered into during the fourth quarter.

Oh, right. Paul Patterson - Glenrock Associates: Can you explain a little bit more of that?

Sure, sure. So, those are the full requirements contracts that we enter into as we participate in some of these polar load auctions that we're doing more of that. We talked about during the year and that contributed about $0.03 to the quarter together with some $0.01 of trading gains that I mentioned. As we said, we're not giving guidance for our subsidiaries, and certainly not at that level of detail. I think it is fair to say that we've expanded our participation in those types of contracts during the years we've talked about; we participated in PECO contract, for example. We expect to continue to do that in 2010, but of course those are auctions. So it is too early to try to forecast exactly what kind of results we'll see from that. Paul Patterson - Glenrock Associates: So when you say gain on contracts, is that a -- how -- is there some specific accounting associated with that? In other words, when you enter into the contract, does that provide a benefit at that point in time? I mean is that -- how does that work, I guess is what I'm wondering? Have you sold the contract?

Sure. Paul Patterson - Glenrock Associates: And what was the total impact for 2009?

Sure. So let me just describe the process a little bit in terms of how to think about those numbers. Those are real economic gains that come from participating in those types of auctions, and then to the extent that we win load opportunities in those auctions, we then hedge out the cost aspects and supply aspects of those contracts fully right at that time. So we don't leave ourselves open, and based on what we win and of course, how we bid obviously reflects our expectations of the profit margin we expect to get, and then as we win tranches, we then hedge out the cost of supply, the delta between those two are the gains that you see that we are reporting on a quarterly basis, and those are real economic gains. Those are then in our portfolio, their mark-to-market during the year but they are fully hedged once we enter into that. Paul Patterson - Glenrock Associates: Okay. So basically, the contract might be for a period larger than the actual quarter that it's been -- that that has been recognized in, but effectively, you've hedged both sides, so you feel pretty confident in that the economic value will materialize. Is that the right way to think about it?

Yes. They are the contracts for serving load in a forward period that we enter into in a current period, and so we have those gains. Paul Patterson - Glenrock Associates: I got you.

Gains, right, exactly. And certain loads over time. Paul Patterson - Glenrock Associates: Okay, and how much was that for the full-year 2009, this whole benefit from that kind of activity?

About $0.05. When you go back and look at our quarters, we had about $0.02 this quarter, $0.01 was trading, $0.02 was the load contract, and a few cents in the prior quarter. It's about $0.05 for the year. Paul Patterson - Glenrock Associates: That's for the total benefit. That's not the delta over the previous year, correct?

Correct, correct. Total benefit. Paul Patterson - Glenrock Associates: Okay, and the sales outlook for weather adjusted --

Paul, I'm going to have to ask that you give someone else a chance. Paul Patterson - Glenrock Associates: Absolutely, sure.

I'm sorry.

And your next question comes from the line of Jonathan Arnold, Deutsche Bank. Jonathan Arnold - Deutsche Bank: Good morning.

Good morning. Jonathan Arnold - Deutsche Bank: My question is on your comments on migration. And if I heard you correctly, you said it was -- it hurt Power by a couple of pennies in Q4 and about $0.08 for the year. So my question is, what kind of follow through full year impact is there to come from the migration you've seen to date in 2010? And then you know, what level of additional switching beyond that have you embedded in the 2010 guidance, you know, some rough idea on that?

Sure. So relative to migration your numbers are right for 2009, $0.04 in the third quarter, $0.02 in the first six months, and $0.02 in the fourth quarter. In terms of our thinking about migration on a year-over-year basis, again we're not giving detailed aspects of guidance, but I would not expect migration to be a higher impact year-over-year. So we wouldn't expect to see at this point deltas year-over-year on migration from the level that we had in 2009. And the reason for that is I think about some of what happened in 2009. In the summer quarter, which is our highest demand quarter, there were some very unusual weather conditions as you may recall that led to some of the lowest prices we've seen in power during the year we are seeing in the summer quarter, while at the same time the BGS price had its summer premium. So the differential over the headroom or the opportunity for migration was the largest in the summer. So what we've seen and we mentioned on the third quarter call was migration of about 11%. That has increased but at a much slower rate to about 15% of our total load has migrated, but at the same time keep in mind that that differential, that price differential has moderated very significantly. So the opportunity for impact to us from migration is very different right now, and our expectations for normal weather and therefore more normal pricing next year than what we experienced in 2009. Again those are assumptions and estimates. We'll have to see how that plays out over time, and also given the results of the current BGS auction, you'll have some slightly lower pricing in the summer as BGS rolls in with a new auction in June, and there is a bit of a moderation in the way that summer premium will be calculated in ‘10, again that will upset that headroom calculations. So year-over-year we don't see a material impact on a year-over-year basis from migration. Jonathan Arnold - Deutsche Bank: Thank you very much.

You're welcome.

Your next question comes from the line of Greg Gordon, Morgan Stanley. Greg Gordon - Morgan Stanley: Thank you. Have you had an opportunity or has your team at PSE&G Power had the opportunity, PEG Power had the opportunity to look at the structure that's been created for the 2013, 2014 capacity auction, and do you think that pricing in that auction is biased to be higher given the parameters that have been laid out versus the prior year's auction?

So certainly we’ve had a chance to look at those in some detail, as you would imagine our Power group. I think given the fact that those are the preliminary parameters put out, and of course the auction doesn’t occur until May, it is too early for us to speculate as to how we might expect to see that clear. Greg Gordon - Morgan Stanley: Well, if we presume that the final rules look exactly like the current proposed rules, would you expect at least that pricing would not be lower than it was in the prior auction?

So, as I said it is really too early to speculate, and I think we just have to wait and see how it plays out. Greg Gordon - Morgan Stanley: Okay, thank you.

Sure.

Your next question comes from the line of Paul Fremont - Jefferies. Paul Fremont - Jefferies: Thank you. Can you tell us for 2009 what the contribution of BGSS was and also power trading?

So for trading, as I mentioned that participation and full requirements contracts, and some of the gains as I described as we calculate them was about $0.05 for the year and then there is a small amount for trading that I mentioned as well. For BGSS we don't break that out specifically. Year-over-year is relatively consistent, but we don't give that detail for BGSS. Paul Fremont - Jefferies: I guess in prior years, though, you had -- well, for 2009, it was supposed to be within several cents of what it had been previously. The last disclosures I think you had made were somewhere in the $185 million range. Should we assume that it's not materially different in 2009?

Without confirming that particular value, because we haven't given out that number, but I can't tell you for year-on-year, the margins in BGSS is basically consistent. Paul Fremont - Jefferies: Okay. Thank you very much.

You're welcome.

Your next question comes from the line of Leslie Rich, Columbia Management. Leslie Rich - Columbia Management: Hi, thank you. Just going back to the customer migration. Do you -- now that that the headroom has -- you know, the projected headroom has disappeared, as you look forward. Would you expect to see any customers come back to you, or do you assume that they're you know, going to be served by competitors going forward?

Yes Leslie, good question. We're not building into our projections expectation of our customers coming back early. There are still a little bit of headroom, but again very different dynamics in terms of pricing. Keep in mind though that even though customers migrate, they are still in our territory and we still serve them. That's what our ER&T group does and so, I mean, something we will talk a little bit more next week of course at our analyst meeting, but they still have to buy power, and so we still get some of that margin back, but I think it is too early to speculate on how we think about customers coming back. Of course we are not in the retail business. So it's really up to the retailers and their pricing and strategy and how customers compare that with pricing coming back in. Leslie Rich - Columbia Management: And are those commercial and industrial customers or all classes?

They are primarily those -- commercial and industrial because as you would well imagine it is probably the least profitable for a retailer to try to migrate residential customers. Leslie Rich - Columbia Management: Okay, great. Thank you.

Sure.

Your next question comes from the line of Vedula Murti, CDP US. Vedula Murti – CDP US: Good morning.

Good morning. Vedula Murti – CDP US: My question has to do with the balance sheet at PEG Power. And I was taking a look, you know, as of at least third quarter, there was just about 3 -- just under $3.2 billion of long-term debt. I'm wondering, one, with the asset transfer down from Holdings into PEG Power, you know, is there any material debt that's going to be transferred down, and then I have a follow up question after that.

Sure. So good question relative to Texas asset transfer. So you're right. That came over to Power, but I can tell you when you look at the long-term debt at Power, for the end of the year, and you'll see this when we file the 10-K as Kathleen said later in the month. You'll see long-term debt at Power of about $3.1 billion, and so actually Power’s debt-to-cap ratio is about 43% at the end of the year, slightly better than the debt-to-cap ratio for the company as a whole, which is 45%, and of course the utility has its debt structure consistent with its rate case. So we're running a trimmed balance sheet for whole company as even slightly trimmer for PEG Power. Vedula Murti – CDP US: And my second question is that when you interpolate you know, the current interest expense on the debt balances at PEG Power, it looks like your cost of debt is just below 5%, if I'm thinking about it properly. I'm wondering, you know, what type of potential refinancing issues there could be down the line, and whether I'm thinking about that properly?

Yes, so don’t want to speculate on, you know, specific timing for financing. As you would expect we try to capitalize on the markets as we see them, and of course Power’s own capital and investment needs as well as dividends up to the parent. What I can tell you is think about power, which has significant capital expenditures last year of about $900 million. Utility will be the growing capital expenditure part of our business in the upcoming period, but given that and Power’s cash flow our intention is to keep that kind of debt-to-cap ratio in the kind of FFO to debt that we run at Power trim. So within the context of this business needs, we will finance it but you're not going to see it change in terms of its capital structure in any meaningful way, because it is obviously critical for us to keep Power well situated as credit rating. Vedula Murti – CDP US: My last question, any meaningful maturities coming up at Power that will be refinanced in the next two, three years we should keep in mind?

There are one or two maturities I think the Power, not huge numbers, small maturities in 2011. Vedula Murti – CDP US: Thank you.

Your next question comes from the line of Annie Tsao, AllianceBernstein. Annie Tsao - AllianceBernstein: Good morning. Can you hear me?

Yes, Annie. Annie Tsao - AllianceBernstein: Okay. I just have a question regarding just a clarification on your 2010 earnings guidance, $3 to $3.25. That's assuming no gain in the lease termination, right? Or there is some?

As we said Annie, we haven't given out subsidiary guidance. So don't want to kind of drill into guidance by each of the operating companies. What I did mention was to keep in mind that the $0.13 per year that you saw this year, and its contribution to operating earnings is not something that you can repeat next year for a good reason. We've terminated 13 leases. We only have 5 leases left, and so even if we were to terminate all of them, you are not going to see the same sort of economic dynamics you saw in 2009. That being said, we still intend to actively manage the portfolio every time we terminate a lease. You know, we take down a tax exposure, which is terrific, but of course those are negotiated transactions. So you can't really forecast whether you're going to see terminations to what extent in 2010. So with that kind of keeping that in mind it's one of the things that's one of our priorities, but can't really forecast within our guidance how much to expect in terminations. Annie Tsao - AllianceBernstein: And what kind -- you assume normal weather and some kind of economic recovery? And then what kind of demand growth then you anticipate then?

Well, as I said we are assuming normal weather, just because it is too early to assume anything different, and better not to try to forecast that. We are assuming that you may have hit bottom on the economy and start to see some recovery, but not to the extent that you know, we had economics hit in 2009, and you probably may be aware from the filings that we've made for the utility. You know, we're not assuming significant amount of growth in our business from the distribution side as well. Annie Tsao - AllianceBernstein: Thank you.

Your next question comes from the line of Brian Chin, Citigroup. Brian Chin - Citigroup: Yes, the question was asked and answered. Thank you.

Okay.

Your next question comes from the line of Angie Storozynski, Macquarie Capital. I am sorry, Macquarie Capital. Angie Storozynski - Macquarie Capital: Thank you. Two questions, both related to the BGS auction and migration. One, you guys mentioned that there's some new structure regarding the summer premium calculation on top of the BGS auction. I wonder if I just misunderstood that, or is it just an indication that the summer BGS prices will be lower because the BGS auction cleared at a lower level.

So to your question Angie, it is actually both. Every year there is a -- in the BGS auction there is a setting of the summer premium, and it varies year by year. So in the way in which BGS auction was set for 2010, there was not a summer premium put in. So when you factor that in, of course that's just one-third of the total BGS for 2010, and there will be some moderation of that summer premium up-tick relative what we saw say in last year where all three of the tranches had a summer premium, but it is a normal process. It's something that the BPU says on a regular basis. Angie Storozynski - Macquarie Capital: Okay. And the other question is about the migration. You mentioned the concentration is on commercial and industrial clients. But the way I see it, I mean, margins for competitive retailers are actually the highest for our residential clients. Maybe the volumes are lower and maybe it's a hustle to sign them up, but the margins are significantly higher for residential customers. So I'm actually surprised to hear that the switching is mostly among C&I [ph] clients.

Well, obviously it is the data that we see, and as, you know, we’ve spoken about before, and Ralph mentioned it is not the business that we're in and not one that we intend to get into. So I'm not really familiar with how retailers are calculating their margins. Angie Storozynski - Macquarie Capital: Okay, thank you.

Your next question comes from the line of Paul Fremont - Jefferies. Paul Fremont - Jefferies: Yes. In the rate case, should we look at the window of opportunity for settlement as going all the way through to a final rate order or practically speaking, is -- does the likelihood of settlement potentially become significantly less after the hearings?

No, Paul, this is Ralph. I would say just the opposite. It is a possibility of settlement increases after the hearings. Having said that you're looking at the earliest possible settlement being more of an April timeframe, but a rendered decision being more in the late May, early June time frame. So we're kind of counting on rates effective middle of the year. Paul Fremont - Jefferies: Thank you very much.

(Operator instructions) Your next question is a follow-up from the line of Paul Patterson, Glenrock Associates. Paul Patterson - Glenrock Associates: Good morning, guys.

Good morning. Paul Patterson - Glenrock Associates: I think most of my questions are answered, just to quickly make sure I clarify something here. The sales growth, the weather-adjusted sales growth, you guys expect it to be somewhat positive, but kind of lackluster. Is that an adequate regurgitation on my part, or how would you describe it?

Yes, I would say our expectations are for some sales growth in 2010, and if you look at that as we think about raising utility, the rate case in utility but modest. We are really talking you know, between less than 1% for the upcoming year, weather normalized, of course. Paul Patterson - Glenrock Associates: Excellent. Thanks a lot, guys.

Sure.

Any other questions.

(Operator instructions)

We may be ready to wrap up Kathleen.

Mr. Izzo, Ms. Dorsa, there are no further questions at this time. Please continue with your presentation or closing remarks.

So just in conclusion, I must tell you all the biggest source of pride that I felt this past year was to witness the team work that our employees across the company, labor and management, long-term, short-term, entry level, senior level, all of whom were looking for ways to save dollars, but preserve service levels, and I can tell you emphatically without doubt that we did so successfully. So thank you for joining us today. I would encourage you to join us next Friday at our investor conference that will take place in the morning in New York City. Please don’t hesitate to contact Kathleen or our investor relations group for the particulars, and we hope to see you there. Thanks again.

Ladies and gentlemen, that does conclude your conference call for today. You may disconnect, and thank you for participating.