Note 9. Changes in Capitalization

The following capital transactions occurred in the first nine months of 2011:

Power

•

issued $250 million of 2.75% Senior Notes due September 2016 in September,

•

issued $250 million of 4.15% Senior Notes due September 2021 in September,

•

paid $606 million of 7.75% Senior Notes at maturity in April, and

•

paid cash dividends of $350 million to PSEG.

PSE&G

•

issued $250 million of 0.85% Medium Term Notes due August 2014 in August, and

•

paid $142 million of Transition Funding's securitization debt, and

•

paid $5 million of Transition Funding II's securitization debt.

Energy Holdings

•

paid $1 million of nonrecourse project debt.

PSE&G

In addition, $164 million of tax-exempt bonds of the Pollution Control Financing Authority of Salem County (Authority Bonds), which are serviced and secured by PSE&G's first mortgage bonds of like tenor, are subject to a mandatory put in November 2011. PSE&G intends to buy the Authority Bonds in on their mandatory put date. The Authority Bonds had an initial term rate of 0.95%.

Also, $100 million of tax-exempt bonds of the New Jersey Economic Development Authority (EDA Bonds), which are serviced and secured by PSE&G's first mortgage bonds of like tenor, are subject to a mandatory put in December 2011. PSE&G intends to buy the EDA Bonds in on their mandatory put date. The EDA Bonds had an initial term rate of 1.20%.

Changes In Capitalization

Note 9. Changes in Capitalization

The following capital transactions occurred in the first nine months of 2011:

Power

•

issued $250 million of 2.75% Senior Notes due September 2016 in September,

•

issued $250 million of 4.15% Senior Notes due September 2021 in September,

•

paid $606 million of 7.75% Senior Notes at maturity in April, and

•

paid cash dividends of $350 million to PSEG.

PSE&G

•

issued $250 million of 0.85% Medium Term Notes due August 2014 in August, and

•

paid $142 million of Transition Funding's securitization debt, and

•

paid $5 million of Transition Funding II's securitization debt.

Energy Holdings

•

paid $1 million of nonrecourse project debt.

PSE&G

In addition, $164 million of tax-exempt bonds of the Pollution Control Financing Authority of Salem County (Authority Bonds), which are serviced and secured by PSE&G's first mortgage bonds of like tenor, are subject to a mandatory put in November 2011. PSE&G intends to buy the Authority Bonds in on their mandatory put date. The Authority Bonds had an initial term rate of 0.95%.

Also, $100 million of tax-exempt bonds of the New Jersey Economic Development Authority (EDA Bonds), which are serviced and secured by PSE&G's first mortgage bonds of like tenor, are subject to a mandatory put in December 2011. PSE&G intends to buy the EDA Bonds in on their mandatory put date. The EDA Bonds had an initial term rate of 1.20%.

Changes In Capitalization

Note 9. Changes in Capitalization

The following capital transactions occurred in the first nine months of 2011:

Power

•

issued $250 million of 2.75% Senior Notes due September 2016 in September,

•

issued $250 million of 4.15% Senior Notes due September 2021 in September,

•

paid $606 million of 7.75% Senior Notes at maturity in April, and

•

paid cash dividends of $350 million to PSEG.

PSE&G

•

issued $250 million of 0.85% Medium Term Notes due August 2014 in August, and

•

paid $142 million of Transition Funding's securitization debt, and

•

paid $5 million of Transition Funding II's securitization debt.

Energy Holdings

•

paid $1 million of nonrecourse project debt.

PSE&G

In addition, $164 million of tax-exempt bonds of the Pollution Control Financing Authority of Salem County (Authority Bonds), which are serviced and secured by PSE&G's first mortgage bonds of like tenor, are subject to a mandatory put in November 2011. PSE&G intends to buy the Authority Bonds in on their mandatory put date. The Authority Bonds had an initial term rate of 0.95%.

Also, $100 million of tax-exempt bonds of the New Jersey Economic Development Authority (EDA Bonds), which are serviced and secured by PSE&G's first mortgage bonds of like tenor, are subject to a mandatory put in December 2011. PSE&G intends to buy the EDA Bonds in on their mandatory put date. The EDA Bonds had an initial term rate of 1.20%.