Available-for-Sale Securities

12 Months Ended

Dec. 31, 2012

Available-for-Sale Securities

Available-for-Sale Securities

NDT Fund

In accordance with NRC regulations, entities owning an interest in nuclear generating facilities are required to determine the costs and funding methods necessary to decommission such facilities upon termination of operation. As a general practice, each nuclear owner places funds in independent external trust accounts it maintains to provide for decommissioning. Power is required to file periodic reports with the NRC demonstrating that the NDT Fund meets the formula-based minimum NRC funding requirements.

Power maintains an external master NDT to fund its share of decommissioning for its five nuclear facilities upon their respective termination of operation. The trust contains two separate funds: a qualified fund and a non-qualified fund. Section 468A of the Internal Revenue Code limits the amount of money that can be contributed into a qualified fund. Power’s share of decommissioning costs related to its five nuclear units was estimated to be between $2.2 billion and $2.4 billion, including contingencies. The liability for decommissioning recorded on a discounted basis as of December 31, 2012 was approximately $348 million and is included in the Asset Retirement Obligation. The trust funds are managed by third-party investment advisors who operate under investment guidelines developed by Power. In September 2012, Power revised the asset structure for a portion of its NDT Fund and realized gains of $59 million. The investments were transitioned to new investment managers to remove under-performing managers.

Power classifies investments in the NDT Fund as available-for-sale. The following tables show the fair values and gross unrealized gains and losses for the securities held in the NDT Fund:

	As of December 31, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities	$	648	$	147	$	(6	)	$	789
Debt Securities
Government Obligations	274		11		—			285
Other Debt Securities	320		22		—			342
Total Debt Securities	594		33		—			627
Other Securities	124		—		—			124
Total NDT Available-for-Sale Securities	$	1,366	$	180	$	(6	)	$	1,540

	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities	$	582	$	126	$	(23	)	$	685
Debt Securities
Government Obligations	343		16		—			359
Other Debt Securities	268		15		(2		)	281
Total Debt Securities	611		31		(2		)	640
Other Securities	24		—		—			24
Total NDT Available-for-Sale Securities	$	1,217	$	157	$	(25	)	$	1,349

These amounts do not include receivables and payables for NDT Fund transactions which have not settled at the end of each period. Such amounts are included in Accounts Receivable and Accounts Payable on the Consolidated Balance Sheets as shown in the following table.

	As of December 31, 2012		As of December 31, 2011
	Millions
Accounts Receivable	$	18	$	27
Accounts Payable	$	53	$	22

The following table shows the value of securities in the NDT Fund that have been in an unrealized loss position for less than 12 months and greater than 12 months:

	As of December 31, 2012									As of December 31, 2011
	Less Than 12 Months					Greater Than 12 Months				Less Than 12 Months					Greater Than 12 Months
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	Millions
Equity Securities (A)	$	139	$	(6	)	$	—	$	—	$	183	$	(23	)	$	—	$	—
Debt Securities
Government Obligations (B)	34		—			1		—		20		—			3		—
Other Debt Securities (C)	31		—			6		—		56		(1		)	4		(1		)
Total Debt Securities	65		—			7		—		76		(1		)	7		(1		)
NDT Available-for-Sale Securities	$	204	$	(6	)	$	7	$	—	$	259	$	(24	)	$	7	$	(1	)

(A) Equity Securities—Investments in marketable equity securities within the NDT Fund are primarily in common stocks within a broad range of industries and sectors. The unrealized losses are distributed over hundreds of companies with limited impairment durations. Power does not consider these securities to be other-than-temporarily impaired as of December 31, 2012.

(B) Debt Securities (Government)—Unrealized losses on Power’s NDT investments in United States Treasury obligations and Federal Agency mortgage-backed securities were caused by interest rate changes. Since these investments are guaranteed by the United States government or an agency of the United States government, it is not expected that these securities will settle for less than their amortized cost basis, since Power does not intend to sell nor will it be more-likely-than-not required to sell. Power does not consider these securities to be other-than-temporarily impaired as of December 31, 2012.

(C) Debt Securities (Corporate)—Power’s investments in corporate bonds are primarily in investment grade securities. It is not expected that these securities would settle for less than their amortized cost. Since Power does not intend to sell these securities nor will it be more-likely-than-not required to sell, Power does not consider these debt securities to be other-than-temporarily impaired as of December 31, 2012.

The proceeds from the sales of and the net realized gains on securities in the NDT Fund were:

	Years Ended December 31,
	2012			2011			2010
	Millions
Proceeds from Sales	$	1,433		$	1,355		$	958
Net Realized Gains:
Gross Realized Gains	$	153		$	144		$	119
Gross Realized Losses	(52		)	(45		)	(39		)
Net Realized Gains (Losses) on NDT Fund	$	101		$	99		$	80

Net realized gains disclosed in the above table were recognized in Other Income and Other Deductions in PSEG’s and Power’s Consolidated Statements of Operations. Net unrealized gains of $84 million (after-tax) are included in Accumulated Other Comprehensive Loss on Power’s Consolidated Balance Sheet as of December 31, 2012.

The available-for-sale debt securities held as of December 31, 2012 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	18
1 - 5 years	136
6 - 10 years	176
11 - 15 years	42
16 - 20 years	10
Over 20 years	245
Total NDT Available-for-Sale Debt Securities	$	627

The cost of these securities was determined on the basis of specific identification.

Power periodically assesses individual securities whose fair value is less than amortized cost to determine whether the investments are considered to be other-than-temporarily impaired. For equity securities, management considers the ability and intent to hold for a reasonable time to permit recovery in addition to the severity and duration of the loss. For fixed income securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). In 2012, other-than-temporary impairments of $18 million were recognized on securities in the NDT Fund. Any subsequent recoveries in the value of these securities would be recognized in Accumulated Other Comprehensive Income (Loss) unless the securities are sold, in which case, any gain would be recognized in income. The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.

Rabbi Trust

PSEG maintains certain unfunded nonqualified benefit plans to provide supplemental retirement and deferred compensation benefits to certain key employees. Certain assets related to these plans have been set aside in a grantor trust commonly known as a “Rabbi Trust.”

In March 2012, PSEG restructured the fixed income component of its Rabbi Trust and realized a gain of $5 million. In August 2010, PSEG revised the asset structure of the Rabbi Trust and realized gains of approximately $31 million as the investments were transitioned to a new asset allocation and investment manager.

PSEG classifies investments in the Rabbi Trust as available-for-sale. The following tables show the fair values, gross unrealized gains and losses and amortized cost bases for the securities held in the Rabbi Trust.

	As of December 31, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities	$	13	$	5	$	—	$	18
Debt Securities
Government Obligations	114		3		—		117
Other Debt Securities	45		2		—		47
Total Debt Securities	159		5		—		164
Other Securities	3		—		—		3
Total Rabbi Trust Available-for-Sale Securities	$	175	$	10	$	—	$	185

	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities	$	16	$	3	$	—	$	19
Debt Securities	148		5		—		153
Total Rabbi Trust Available-for-Sale Securities	$	164	$	8	$	—	$	172

As of December 31, 2012, amounts in the above table do not include Accounts Receivable of $4 million and Accounts Payable of $5 million for Rabbi Trust Fund transactions which had not yet settled. These amounts are included on the Consolidated Balance Sheets.

	Years Ended December 31,
	2012		2011		2010
	Millions
Proceeds from Rabbi Trust Sales	$	233	$	—	$	158
Net Realized Gains (Losses):
Gross Realized Gains	$	6	$	—	$	31
Gross Realized Losses	—		—		—
Net Realized Gains (Losses) on Rabbi Trust	$	6	$	—	$	31

Gross realized gains disclosed in the above table were recognized in Other Income in the Consolidated Statements of Operations. Net unrealized gains of $6 million (after-tax) were recognized in Accumulated Other Comprehensive Loss on the Consolidated Balance Sheets as of December 31, 2012. The Rabbi Trust available-for-sale debt securities held as of December 31, 2012 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	—
1 - 5 years	60
6 - 10 years	31
11 - 15 years	9
16 - 20 years	5
Over 20 years	59
Total Rabbi Trust Available-for-Sale Debt Securities	$	164

The cost of these securities was determined on the basis of specific identification.

PSEG periodically assesses individual securities whose fair value is less than amortized cost to determine whether the investments are considered to be other-than-temporarily impaired. For equity securities, the Rabbi Trust is invested in a commingled indexed mutual fund. Due to the commingled nature of this fund, PSEG does not have the ability to hold these securities until expected recovery. As a result, any declines in fair market value below cost are recorded as a charge to earnings. For fixed income securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities. In 2012, there were no other-than-temporary impairments recognized on investments of the Rabbi Trust.

The fair value of the Rabbi Trust related to PSEG, Power and PSE&G are detailed as follows:

	As of December 31, 2012		As of December 31, 2011
	Millions
Power	$	36	$	33
PSE&G	61		57
Other	88		82
Total Rabbi Trust Available-for-Sale Securities	$	185	$	172

Power [Member]

Available-for-Sale Securities

Available-for-Sale Securities

NDT Fund

In accordance with NRC regulations, entities owning an interest in nuclear generating facilities are required to determine the costs and funding methods necessary to decommission such facilities upon termination of operation. As a general practice, each nuclear owner places funds in independent external trust accounts it maintains to provide for decommissioning. Power is required to file periodic reports with the NRC demonstrating that the NDT Fund meets the formula-based minimum NRC funding requirements.

Power maintains an external master NDT to fund its share of decommissioning for its five nuclear facilities upon their respective termination of operation. The trust contains two separate funds: a qualified fund and a non-qualified fund. Section 468A of the Internal Revenue Code limits the amount of money that can be contributed into a qualified fund. Power’s share of decommissioning costs related to its five nuclear units was estimated to be between $2.2 billion and $2.4 billion, including contingencies. The liability for decommissioning recorded on a discounted basis as of December 31, 2012 was approximately $348 million and is included in the Asset Retirement Obligation. The trust funds are managed by third-party investment advisors who operate under investment guidelines developed by Power. In September 2012, Power revised the asset structure for a portion of its NDT Fund and realized gains of $59 million. The investments were transitioned to new investment managers to remove under-performing managers.

Power classifies investments in the NDT Fund as available-for-sale. The following tables show the fair values and gross unrealized gains and losses for the securities held in the NDT Fund:

	As of December 31, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities	$	648	$	147	$	(6	)	$	789
Debt Securities
Government Obligations	274		11		—			285
Other Debt Securities	320		22		—			342
Total Debt Securities	594		33		—			627
Other Securities	124		—		—			124
Total NDT Available-for-Sale Securities	$	1,366	$	180	$	(6	)	$	1,540

	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities	$	582	$	126	$	(23	)	$	685
Debt Securities
Government Obligations	343		16		—			359
Other Debt Securities	268		15		(2		)	281
Total Debt Securities	611		31		(2		)	640
Other Securities	24		—		—			24
Total NDT Available-for-Sale Securities	$	1,217	$	157	$	(25	)	$	1,349

These amounts do not include receivables and payables for NDT Fund transactions which have not settled at the end of each period. Such amounts are included in Accounts Receivable and Accounts Payable on the Consolidated Balance Sheets as shown in the following table.

	As of December 31, 2012		As of December 31, 2011
	Millions
Accounts Receivable	$	18	$	27
Accounts Payable	$	53	$	22

The following table shows the value of securities in the NDT Fund that have been in an unrealized loss position for less than 12 months and greater than 12 months:

	As of December 31, 2012									As of December 31, 2011
	Less Than 12 Months					Greater Than 12 Months				Less Than 12 Months					Greater Than 12 Months
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	Millions
Equity Securities (A)	$	139	$	(6	)	$	—	$	—	$	183	$	(23	)	$	—	$	—
Debt Securities
Government Obligations (B)	34		—			1		—		20		—			3		—
Other Debt Securities (C)	31		—			6		—		56		(1		)	4		(1		)
Total Debt Securities	65		—			7		—		76		(1		)	7		(1		)
NDT Available-for-Sale Securities	$	204	$	(6	)	$	7	$	—	$	259	$	(24	)	$	7	$	(1	)

(A) Equity Securities—Investments in marketable equity securities within the NDT Fund are primarily in common stocks within a broad range of industries and sectors. The unrealized losses are distributed over hundreds of companies with limited impairment durations. Power does not consider these securities to be other-than-temporarily impaired as of December 31, 2012.

(B) Debt Securities (Government)—Unrealized losses on Power’s NDT investments in United States Treasury obligations and Federal Agency mortgage-backed securities were caused by interest rate changes. Since these investments are guaranteed by the United States government or an agency of the United States government, it is not expected that these securities will settle for less than their amortized cost basis, since Power does not intend to sell nor will it be more-likely-than-not required to sell. Power does not consider these securities to be other-than-temporarily impaired as of December 31, 2012.

(C) Debt Securities (Corporate)—Power’s investments in corporate bonds are primarily in investment grade securities. It is not expected that these securities would settle for less than their amortized cost. Since Power does not intend to sell these securities nor will it be more-likely-than-not required to sell, Power does not consider these debt securities to be other-than-temporarily impaired as of December 31, 2012.

The proceeds from the sales of and the net realized gains on securities in the NDT Fund were:

	Years Ended December 31,
	2012			2011			2010
	Millions
Proceeds from Sales	$	1,433		$	1,355		$	958
Net Realized Gains:
Gross Realized Gains	$	153		$	144		$	119
Gross Realized Losses	(52		)	(45		)	(39		)
Net Realized Gains (Losses) on NDT Fund	$	101		$	99		$	80

Net realized gains disclosed in the above table were recognized in Other Income and Other Deductions in PSEG’s and Power’s Consolidated Statements of Operations. Net unrealized gains of $84 million (after-tax) are included in Accumulated Other Comprehensive Loss on Power’s Consolidated Balance Sheet as of December 31, 2012.

The available-for-sale debt securities held as of December 31, 2012 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	18
1 - 5 years	136
6 - 10 years	176
11 - 15 years	42
16 - 20 years	10
Over 20 years	245
Total NDT Available-for-Sale Debt Securities	$	627

The cost of these securities was determined on the basis of specific identification.

Power periodically assesses individual securities whose fair value is less than amortized cost to determine whether the investments are considered to be other-than-temporarily impaired. For equity securities, management considers the ability and intent to hold for a reasonable time to permit recovery in addition to the severity and duration of the loss. For fixed income securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). In 2012, other-than-temporary impairments of $18 million were recognized on securities in the NDT Fund. Any subsequent recoveries in the value of these securities would be recognized in Accumulated Other Comprehensive Income (Loss) unless the securities are sold, in which case, any gain would be recognized in income. The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.

Rabbi Trust

PSEG maintains certain unfunded nonqualified benefit plans to provide supplemental retirement and deferred compensation benefits to certain key employees. Certain assets related to these plans have been set aside in a grantor trust commonly known as a “Rabbi Trust.”

In March 2012, PSEG restructured the fixed income component of its Rabbi Trust and realized a gain of $5 million. In August 2010, PSEG revised the asset structure of the Rabbi Trust and realized gains of approximately $31 million as the investments were transitioned to a new asset allocation and investment manager.

PSEG classifies investments in the Rabbi Trust as available-for-sale. The following tables show the fair values, gross unrealized gains and losses and amortized cost bases for the securities held in the Rabbi Trust.

	As of December 31, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities	$	13	$	5	$	—	$	18
Debt Securities
Government Obligations	114		3		—		117
Other Debt Securities	45		2		—		47
Total Debt Securities	159		5		—		164
Other Securities	3		—		—		3
Total Rabbi Trust Available-for-Sale Securities	$	175	$	10	$	—	$	185

	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities	$	16	$	3	$	—	$	19
Debt Securities	148		5		—		153
Total Rabbi Trust Available-for-Sale Securities	$	164	$	8	$	—	$	172

As of December 31, 2012, amounts in the above table do not include Accounts Receivable of $4 million and Accounts Payable of $5 million for Rabbi Trust Fund transactions which had not yet settled. These amounts are included on the Consolidated Balance Sheets.

	Years Ended December 31,
	2012		2011		2010
	Millions
Proceeds from Rabbi Trust Sales	$	233	$	—	$	158
Net Realized Gains (Losses):
Gross Realized Gains	$	6	$	—	$	31
Gross Realized Losses	—		—		—
Net Realized Gains (Losses) on Rabbi Trust	$	6	$	—	$	31

Gross realized gains disclosed in the above table were recognized in Other Income in the Consolidated Statements of Operations. Net unrealized gains of $6 million (after-tax) were recognized in Accumulated Other Comprehensive Loss on the Consolidated Balance Sheets as of December 31, 2012. The Rabbi Trust available-for-sale debt securities held as of December 31, 2012 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	—
1 - 5 years	60
6 - 10 years	31
11 - 15 years	9
16 - 20 years	5
Over 20 years	59
Total Rabbi Trust Available-for-Sale Debt Securities	$	164

The cost of these securities was determined on the basis of specific identification.

PSEG periodically assesses individual securities whose fair value is less than amortized cost to determine whether the investments are considered to be other-than-temporarily impaired. For equity securities, the Rabbi Trust is invested in a commingled indexed mutual fund. Due to the commingled nature of this fund, PSEG does not have the ability to hold these securities until expected recovery. As a result, any declines in fair market value below cost are recorded as a charge to earnings. For fixed income securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities. In 2012, there were no other-than-temporary impairments recognized on investments of the Rabbi Trust.

The fair value of the Rabbi Trust related to PSEG, Power and PSE&G are detailed as follows:

	As of December 31, 2012		As of December 31, 2011
	Millions
Power	$	36	$	33
PSE&G	61		57
Other	88		82
Total Rabbi Trust Available-for-Sale Securities	$	185	$	172

PSE&G [Member]

Available-for-Sale Securities

Available-for-Sale Securities

NDT Fund

In accordance with NRC regulations, entities owning an interest in nuclear generating facilities are required to determine the costs and funding methods necessary to decommission such facilities upon termination of operation. As a general practice, each nuclear owner places funds in independent external trust accounts it maintains to provide for decommissioning. Power is required to file periodic reports with the NRC demonstrating that the NDT Fund meets the formula-based minimum NRC funding requirements.

Power maintains an external master NDT to fund its share of decommissioning for its five nuclear facilities upon their respective termination of operation. The trust contains two separate funds: a qualified fund and a non-qualified fund. Section 468A of the Internal Revenue Code limits the amount of money that can be contributed into a qualified fund. Power’s share of decommissioning costs related to its five nuclear units was estimated to be between $2.2 billion and $2.4 billion, including contingencies. The liability for decommissioning recorded on a discounted basis as of December 31, 2012 was approximately $348 million and is included in the Asset Retirement Obligation. The trust funds are managed by third-party investment advisors who operate under investment guidelines developed by Power. In September 2012, Power revised the asset structure for a portion of its NDT Fund and realized gains of $59 million. The investments were transitioned to new investment managers to remove under-performing managers.

Power classifies investments in the NDT Fund as available-for-sale. The following tables show the fair values and gross unrealized gains and losses for the securities held in the NDT Fund:

	As of December 31, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities	$	648	$	147	$	(6	)	$	789
Debt Securities
Government Obligations	274		11		—			285
Other Debt Securities	320		22		—			342
Total Debt Securities	594		33		—			627
Other Securities	124		—		—			124
Total NDT Available-for-Sale Securities	$	1,366	$	180	$	(6	)	$	1,540

	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities	$	582	$	126	$	(23	)	$	685
Debt Securities
Government Obligations	343		16		—			359
Other Debt Securities	268		15		(2		)	281
Total Debt Securities	611		31		(2		)	640
Other Securities	24		—		—			24
Total NDT Available-for-Sale Securities	$	1,217	$	157	$	(25	)	$	1,349

These amounts do not include receivables and payables for NDT Fund transactions which have not settled at the end of each period. Such amounts are included in Accounts Receivable and Accounts Payable on the Consolidated Balance Sheets as shown in the following table.

	As of December 31, 2012		As of December 31, 2011
	Millions
Accounts Receivable	$	18	$	27
Accounts Payable	$	53	$	22

The following table shows the value of securities in the NDT Fund that have been in an unrealized loss position for less than 12 months and greater than 12 months:

	As of December 31, 2012									As of December 31, 2011
	Less Than 12 Months					Greater Than 12 Months				Less Than 12 Months					Greater Than 12 Months
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	Millions
Equity Securities (A)	$	139	$	(6	)	$	—	$	—	$	183	$	(23	)	$	—	$	—
Debt Securities
Government Obligations (B)	34		—			1		—		20		—			3		—
Other Debt Securities (C)	31		—			6		—		56		(1		)	4		(1		)
Total Debt Securities	65		—			7		—		76		(1		)	7		(1		)
NDT Available-for-Sale Securities	$	204	$	(6	)	$	7	$	—	$	259	$	(24	)	$	7	$	(1	)

(A) Equity Securities—Investments in marketable equity securities within the NDT Fund are primarily in common stocks within a broad range of industries and sectors. The unrealized losses are distributed over hundreds of companies with limited impairment durations. Power does not consider these securities to be other-than-temporarily impaired as of December 31, 2012.

(B) Debt Securities (Government)—Unrealized losses on Power’s NDT investments in United States Treasury obligations and Federal Agency mortgage-backed securities were caused by interest rate changes. Since these investments are guaranteed by the United States government or an agency of the United States government, it is not expected that these securities will settle for less than their amortized cost basis, since Power does not intend to sell nor will it be more-likely-than-not required to sell. Power does not consider these securities to be other-than-temporarily impaired as of December 31, 2012.

(C) Debt Securities (Corporate)—Power’s investments in corporate bonds are primarily in investment grade securities. It is not expected that these securities would settle for less than their amortized cost. Since Power does not intend to sell these securities nor will it be more-likely-than-not required to sell, Power does not consider these debt securities to be other-than-temporarily impaired as of December 31, 2012.

The proceeds from the sales of and the net realized gains on securities in the NDT Fund were:

	Years Ended December 31,
	2012			2011			2010
	Millions
Proceeds from Sales	$	1,433		$	1,355		$	958
Net Realized Gains:
Gross Realized Gains	$	153		$	144		$	119
Gross Realized Losses	(52		)	(45		)	(39		)
Net Realized Gains (Losses) on NDT Fund	$	101		$	99		$	80

Net realized gains disclosed in the above table were recognized in Other Income and Other Deductions in PSEG’s and Power’s Consolidated Statements of Operations. Net unrealized gains of $84 million (after-tax) are included in Accumulated Other Comprehensive Loss on Power’s Consolidated Balance Sheet as of December 31, 2012.

The available-for-sale debt securities held as of December 31, 2012 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	18
1 - 5 years	136
6 - 10 years	176
11 - 15 years	42
16 - 20 years	10
Over 20 years	245
Total NDT Available-for-Sale Debt Securities	$	627

The cost of these securities was determined on the basis of specific identification.

Power periodically assesses individual securities whose fair value is less than amortized cost to determine whether the investments are considered to be other-than-temporarily impaired. For equity securities, management considers the ability and intent to hold for a reasonable time to permit recovery in addition to the severity and duration of the loss. For fixed income securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). In 2012, other-than-temporary impairments of $18 million were recognized on securities in the NDT Fund. Any subsequent recoveries in the value of these securities would be recognized in Accumulated Other Comprehensive Income (Loss) unless the securities are sold, in which case, any gain would be recognized in income. The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.

Rabbi Trust

PSEG maintains certain unfunded nonqualified benefit plans to provide supplemental retirement and deferred compensation benefits to certain key employees. Certain assets related to these plans have been set aside in a grantor trust commonly known as a “Rabbi Trust.”

In March 2012, PSEG restructured the fixed income component of its Rabbi Trust and realized a gain of $5 million. In August 2010, PSEG revised the asset structure of the Rabbi Trust and realized gains of approximately $31 million as the investments were transitioned to a new asset allocation and investment manager.

PSEG classifies investments in the Rabbi Trust as available-for-sale. The following tables show the fair values, gross unrealized gains and losses and amortized cost bases for the securities held in the Rabbi Trust.

	As of December 31, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities	$	13	$	5	$	—	$	18
Debt Securities
Government Obligations	114		3		—		117
Other Debt Securities	45		2		—		47
Total Debt Securities	159		5		—		164
Other Securities	3		—		—		3
Total Rabbi Trust Available-for-Sale Securities	$	175	$	10	$	—	$	185

	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities	$	16	$	3	$	—	$	19
Debt Securities	148		5		—		153
Total Rabbi Trust Available-for-Sale Securities	$	164	$	8	$	—	$	172

As of December 31, 2012, amounts in the above table do not include Accounts Receivable of $4 million and Accounts Payable of $5 million for Rabbi Trust Fund transactions which had not yet settled. These amounts are included on the Consolidated Balance Sheets.

	Years Ended December 31,
	2012		2011		2010
	Millions
Proceeds from Rabbi Trust Sales	$	233	$	—	$	158
Net Realized Gains (Losses):
Gross Realized Gains	$	6	$	—	$	31
Gross Realized Losses	—		—		—
Net Realized Gains (Losses) on Rabbi Trust	$	6	$	—	$	31

Gross realized gains disclosed in the above table were recognized in Other Income in the Consolidated Statements of Operations. Net unrealized gains of $6 million (after-tax) were recognized in Accumulated Other Comprehensive Loss on the Consolidated Balance Sheets as of December 31, 2012. The Rabbi Trust available-for-sale debt securities held as of December 31, 2012 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	—
1 - 5 years	60
6 - 10 years	31
11 - 15 years	9
16 - 20 years	5
Over 20 years	59
Total Rabbi Trust Available-for-Sale Debt Securities	$	164

The cost of these securities was determined on the basis of specific identification.

PSEG periodically assesses individual securities whose fair value is less than amortized cost to determine whether the investments are considered to be other-than-temporarily impaired. For equity securities, the Rabbi Trust is invested in a commingled indexed mutual fund. Due to the commingled nature of this fund, PSEG does not have the ability to hold these securities until expected recovery. As a result, any declines in fair market value below cost are recorded as a charge to earnings. For fixed income securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities. In 2012, there were no other-than-temporary impairments recognized on investments of the Rabbi Trust.

The fair value of the Rabbi Trust related to PSEG, Power and PSE&G are detailed as follows:

	As of December 31, 2012		As of December 31, 2011
	Millions
Power	$	36	$	33
PSE&G	61		57
Other	88		82
Total Rabbi Trust Available-for-Sale Securities	$	185	$	172