Related-Party Transactions

9 Months Ended

Sep. 30, 2011

Related-Party Transactions

Note 17. Related-Party Transactions

The following discussion relates to intercompany transactions, the majority of which are eliminated during the PSEG consolidation process in accordance with GAAP.

Power

The financial statements for Power include transactions with related parties presented as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
Related Party Transactions	2011			2010			2011			2010
	Millions
Revenue from Affiliates:
Billings to PSE&G through BGSS (A)	$	91		$	118		$	958		$	1,102
Billings to PSE&G through BGS (A)		272			345			734			904
Total Revenue from Affiliates	$	363		$	463		$	1,692		$	2,006
Expense Billings from Affiliates:
Administrative Billings from Services (B)	$	(37	)	$	(34	)	$	(109	)	$	(106	)
Total Expense Billings from Affiliates	$	(37	)	$	(34	)	$	(109	)	$	(106	)

Related Party Transactions	As of September 30, 2011			As of December 31, 2010
	Millions
Receivables from PSE&G through BGS and BGSS Contracts (A)	$	110		$	372
Receivables from PSE&G Related to Gas Supply Hedges for BGSS (A)		64			58
Payable to Services (B)		(23	)		(26	)
Tax Sharing Receivable from (Payable to) PSEG (C)		(18	)		380
Current Unrecognized Tax Receivable from (Payable to) PSEG (C)		(5	)		1
Payable to PSEG		(1	)		(3	)
Accounts Receivable—Affiliated Companies, net	$	127		$	782
Short-Term Loan to Affiliate (Demand Note to PSEG) (D)	$	1,574		$	398
Working Capital Advances to Services (E)	$	17		$	17
Long-Term Accrued Taxes Receivable (C)	$	19		$	16

PSE&G

The financials statements for PSE&G include transactions with related parties presented as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
Related Party Transactions	2011			2010			2011			2010
	Millions
Expense Billings from Affiliates:
Billings from Power through BGSS (A)	$	(91	)	$	(118	)	$	(958	)	$	(1,102	)
Billings from Power through BGS (A)		(272	)		(345	)		(734	)		(904	)
Administrative Billings from Services (B)		(53	)		(47	)		(154	)		(151	)
Total Expense Billings from Affiliates	$	(416	)	$	(510	)	$	(1,846	)	$	(2,157	)

Related Party Transactions	As of September 30, 2011			As of December 31, 2010
	Millions
Payable to Power through BGS and BGSS (A)	$	(110	)	$	(372	)
Payable to Power Related to Gas Supply Hedges for BGSS (A)		(64	)		(58	)
Payable to Power for SREC Liability (F)		(7	)		(7	)
Payable to Services (B)		(42	)		(48	)
Tax Sharing Receivable from PSEG (C)		467			321
Current Unrecognized Tax Receivable from PSEG (C)		59			73
Receivable from PSEG		1			6
Accounts Receivable (Payable)—Affiliated Companies, net	$	304		$	(85	)
Working Capital Advances to Services (E)	$	33		$	33
Long-Term Accrued Taxes Payable (C)	$	(54	)	$	(74	)

(A) PSE&G has entered into a requirements contract with Power under which Power provides the gas supply services needed to meet PSE&G's BGSS and other contractual requirements through March 31, 2012 and year-to-year thereafter. Power has also entered into contracts to supply energy, capacity and ancillary services to PSE&G through the BGS auction process.

(B) Services provides and bills administrative services to Power and PSE&G at cost. In addition, Power and PSE&G have other payables to Services, including amounts related to certain common costs, such as pension and OPEB costs, which Services pays on behalf of each of the operating companies.

(C) PSEG files a consolidated federal income tax return with its affiliated companies. A tax allocation agreement exists between PSEG and each of its affiliated companies. The general operation of these agreements is that the subsidiary company will compute its taxable income on a stand-alone basis. If the result is a net tax liability, such amount shall be paid to PSEG. If there are net operating losses and/or tax credits, the subsidiary shall receive payment for the tax savings from PSEG to the extent that PSEG is able to utilize those benefits.

(D) Power's short-term loans with PSEG are for working capital and other short-term needs. Interest Income and Interest Expense relating to these short-term funding activities were immaterial.

(E) Power and PSE&G have advanced working capital to Services. The amounts are included in Other Noncurrent Assets on Power's and PSE&G's Condensed Consolidated Balance Sheets.

(F) In 2008, the BPU issued a decision that certain BGS suppliers will be reimbursed for the cost they incurred above $300 per Solar Renewable Energy Certificate (SREC) during the period June 1, 2008 through May 31, 2010. The BPU order further provided that the excess cost may be passed on to ratepayers. Following an appeal, on March 10, 2011, the New Jersey Supreme Court reversed and remanded the BPU's 2008 order. The Court did not rule on the substantive issue of whether the pass-through of SREC costs was appropriate. The BPU subsequently held a legislative hearing process to comply with the Court's ruling. PSE&G, along with other New Jersey utilities and Power participated at the hearing and filed comments. The BPU has not yet issued a decision. PSE&G has estimated and accrued a total liability for the excess SREC cost of $17 million as of September 30, 2011 and December 31, 2010, including approximately $7 million for Power's share which is included in PSE&G's Accounts Payable—Affiliated Companies as of December 31, 2010. Under current guidance, Power is unable to record the related intercompany receivable on its Condensed Consolidated Balance Sheet. As a result, PSE&G's liability to Power is not eliminated in consolidation and is included in Other Current Liabilities on PSEG's Condensed Consolidated Balance Sheet as of September 30, 2011 and December 31, 2010.

Power [Member]

Related-Party Transactions

Note 17. Related-Party Transactions

The following discussion relates to intercompany transactions, the majority of which are eliminated during the PSEG consolidation process in accordance with GAAP.

Power

The financial statements for Power include transactions with related parties presented as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
Related Party Transactions	2011			2010			2011			2010
	Millions
Revenue from Affiliates:
Billings to PSE&G through BGSS (A)	$	91		$	118		$	958		$	1,102
Billings to PSE&G through BGS (A)		272			345			734			904
Total Revenue from Affiliates	$	363		$	463		$	1,692		$	2,006
Expense Billings from Affiliates:
Administrative Billings from Services (B)	$	(37	)	$	(34	)	$	(109	)	$	(106	)
Total Expense Billings from Affiliates	$	(37	)	$	(34	)	$	(109	)	$	(106	)

Related Party Transactions	As of September 30, 2011			As of December 31, 2010
	Millions
Receivables from PSE&G through BGS and BGSS Contracts (A)	$	110		$	372
Receivables from PSE&G Related to Gas Supply Hedges for BGSS (A)		64			58
Payable to Services (B)		(23	)		(26	)
Tax Sharing Receivable from (Payable to) PSEG (C)		(18	)		380
Current Unrecognized Tax Receivable from (Payable to) PSEG (C)		(5	)		1
Payable to PSEG		(1	)		(3	)
Accounts Receivable—Affiliated Companies, net	$	127		$	782
Short-Term Loan to Affiliate (Demand Note to PSEG) (D)	$	1,574		$	398
Working Capital Advances to Services (E)	$	17		$	17
Long-Term Accrued Taxes Receivable (C)	$	19		$	16

PSE&G

The financials statements for PSE&G include transactions with related parties presented as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
Related Party Transactions	2011			2010			2011			2010
	Millions
Expense Billings from Affiliates:
Billings from Power through BGSS (A)	$	(91	)	$	(118	)	$	(958	)	$	(1,102	)
Billings from Power through BGS (A)		(272	)		(345	)		(734	)		(904	)
Administrative Billings from Services (B)		(53	)		(47	)		(154	)		(151	)
Total Expense Billings from Affiliates	$	(416	)	$	(510	)	$	(1,846	)	$	(2,157	)

Related Party Transactions	As of September 30, 2011			As of December 31, 2010
	Millions
Payable to Power through BGS and BGSS (A)	$	(110	)	$	(372	)
Payable to Power Related to Gas Supply Hedges for BGSS (A)		(64	)		(58	)
Payable to Power for SREC Liability (F)		(7	)		(7	)
Payable to Services (B)		(42	)		(48	)
Tax Sharing Receivable from PSEG (C)		467			321
Current Unrecognized Tax Receivable from PSEG (C)		59			73
Receivable from PSEG		1			6
Accounts Receivable (Payable)—Affiliated Companies, net	$	304		$	(85	)
Working Capital Advances to Services (E)	$	33		$	33
Long-Term Accrued Taxes Payable (C)	$	(54	)	$	(74	)

(A) PSE&G has entered into a requirements contract with Power under which Power provides the gas supply services needed to meet PSE&G's BGSS and other contractual requirements through March 31, 2012 and year-to-year thereafter. Power has also entered into contracts to supply energy, capacity and ancillary services to PSE&G through the BGS auction process.

(B) Services provides and bills administrative services to Power and PSE&G at cost. In addition, Power and PSE&G have other payables to Services, including amounts related to certain common costs, such as pension and OPEB costs, which Services pays on behalf of each of the operating companies.

(C) PSEG files a consolidated federal income tax return with its affiliated companies. A tax allocation agreement exists between PSEG and each of its affiliated companies. The general operation of these agreements is that the subsidiary company will compute its taxable income on a stand-alone basis. If the result is a net tax liability, such amount shall be paid to PSEG. If there are net operating losses and/or tax credits, the subsidiary shall receive payment for the tax savings from PSEG to the extent that PSEG is able to utilize those benefits.

(D) Power's short-term loans with PSEG are for working capital and other short-term needs. Interest Income and Interest Expense relating to these short-term funding activities were immaterial.

(E) Power and PSE&G have advanced working capital to Services. The amounts are included in Other Noncurrent Assets on Power's and PSE&G's Condensed Consolidated Balance Sheets.

(F) In 2008, the BPU issued a decision that certain BGS suppliers will be reimbursed for the cost they incurred above $300 per Solar Renewable Energy Certificate (SREC) during the period June 1, 2008 through May 31, 2010. The BPU order further provided that the excess cost may be passed on to ratepayers. Following an appeal, on March 10, 2011, the New Jersey Supreme Court reversed and remanded the BPU's 2008 order. The Court did not rule on the substantive issue of whether the pass-through of SREC costs was appropriate. The BPU subsequently held a legislative hearing process to comply with the Court's ruling. PSE&G, along with other New Jersey utilities and Power participated at the hearing and filed comments. The BPU has not yet issued a decision. PSE&G has estimated and accrued a total liability for the excess SREC cost of $17 million as of September 30, 2011 and December 31, 2010, including approximately $7 million for Power's share which is included in PSE&G's Accounts Payable—Affiliated Companies as of December 31, 2010. Under current guidance, Power is unable to record the related intercompany receivable on its Condensed Consolidated Balance Sheet. As a result, PSE&G's liability to Power is not eliminated in consolidation and is included in Other Current Liabilities on PSEG's Condensed Consolidated Balance Sheet as of September 30, 2011 and December 31, 2010.

PSE&G [Member]

Related-Party Transactions

Note 17. Related-Party Transactions

The following discussion relates to intercompany transactions, the majority of which are eliminated during the PSEG consolidation process in accordance with GAAP.

Power

The financial statements for Power include transactions with related parties presented as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
Related Party Transactions	2011			2010			2011			2010
	Millions
Revenue from Affiliates:
Billings to PSE&G through BGSS (A)	$	91		$	118		$	958		$	1,102
Billings to PSE&G through BGS (A)		272			345			734			904
Total Revenue from Affiliates	$	363		$	463		$	1,692		$	2,006
Expense Billings from Affiliates:
Administrative Billings from Services (B)	$	(37	)	$	(34	)	$	(109	)	$	(106	)
Total Expense Billings from Affiliates	$	(37	)	$	(34	)	$	(109	)	$	(106	)

Related Party Transactions	As of September 30, 2011			As of December 31, 2010
	Millions
Receivables from PSE&G through BGS and BGSS Contracts (A)	$	110		$	372
Receivables from PSE&G Related to Gas Supply Hedges for BGSS (A)		64			58
Payable to Services (B)		(23	)		(26	)
Tax Sharing Receivable from (Payable to) PSEG (C)		(18	)		380
Current Unrecognized Tax Receivable from (Payable to) PSEG (C)		(5	)		1
Payable to PSEG		(1	)		(3	)
Accounts Receivable—Affiliated Companies, net	$	127		$	782
Short-Term Loan to Affiliate (Demand Note to PSEG) (D)	$	1,574		$	398
Working Capital Advances to Services (E)	$	17		$	17
Long-Term Accrued Taxes Receivable (C)	$	19		$	16

PSE&G

The financials statements for PSE&G include transactions with related parties presented as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
Related Party Transactions	2011			2010			2011			2010
	Millions
Expense Billings from Affiliates:
Billings from Power through BGSS (A)	$	(91	)	$	(118	)	$	(958	)	$	(1,102	)
Billings from Power through BGS (A)		(272	)		(345	)		(734	)		(904	)
Administrative Billings from Services (B)		(53	)		(47	)		(154	)		(151	)
Total Expense Billings from Affiliates	$	(416	)	$	(510	)	$	(1,846	)	$	(2,157	)

Related Party Transactions	As of September 30, 2011			As of December 31, 2010
	Millions
Payable to Power through BGS and BGSS (A)	$	(110	)	$	(372	)
Payable to Power Related to Gas Supply Hedges for BGSS (A)		(64	)		(58	)
Payable to Power for SREC Liability (F)		(7	)		(7	)
Payable to Services (B)		(42	)		(48	)
Tax Sharing Receivable from PSEG (C)		467			321
Current Unrecognized Tax Receivable from PSEG (C)		59			73
Receivable from PSEG		1			6
Accounts Receivable (Payable)—Affiliated Companies, net	$	304		$	(85	)
Working Capital Advances to Services (E)	$	33		$	33
Long-Term Accrued Taxes Payable (C)	$	(54	)	$	(74	)

(A) PSE&G has entered into a requirements contract with Power under which Power provides the gas supply services needed to meet PSE&G's BGSS and other contractual requirements through March 31, 2012 and year-to-year thereafter. Power has also entered into contracts to supply energy, capacity and ancillary services to PSE&G through the BGS auction process.

(B) Services provides and bills administrative services to Power and PSE&G at cost. In addition, Power and PSE&G have other payables to Services, including amounts related to certain common costs, such as pension and OPEB costs, which Services pays on behalf of each of the operating companies.

(C) PSEG files a consolidated federal income tax return with its affiliated companies. A tax allocation agreement exists between PSEG and each of its affiliated companies. The general operation of these agreements is that the subsidiary company will compute its taxable income on a stand-alone basis. If the result is a net tax liability, such amount shall be paid to PSEG. If there are net operating losses and/or tax credits, the subsidiary shall receive payment for the tax savings from PSEG to the extent that PSEG is able to utilize those benefits.

(D) Power's short-term loans with PSEG are for working capital and other short-term needs. Interest Income and Interest Expense relating to these short-term funding activities were immaterial.

(E) Power and PSE&G have advanced working capital to Services. The amounts are included in Other Noncurrent Assets on Power's and PSE&G's Condensed Consolidated Balance Sheets.

(F) In 2008, the BPU issued a decision that certain BGS suppliers will be reimbursed for the cost they incurred above $300 per Solar Renewable Energy Certificate (SREC) during the period June 1, 2008 through May 31, 2010. The BPU order further provided that the excess cost may be passed on to ratepayers. Following an appeal, on March 10, 2011, the New Jersey Supreme Court reversed and remanded the BPU's 2008 order. The Court did not rule on the substantive issue of whether the pass-through of SREC costs was appropriate. The BPU subsequently held a legislative hearing process to comply with the Court's ruling. PSE&G, along with other New Jersey utilities and Power participated at the hearing and filed comments. The BPU has not yet issued a decision. PSE&G has estimated and accrued a total liability for the excess SREC cost of $17 million as of September 30, 2011 and December 31, 2010, including approximately $7 million for Power's share which is included in PSE&G's Accounts Payable—Affiliated Companies as of December 31, 2010. Under current guidance, Power is unable to record the related intercompany receivable on its Condensed Consolidated Balance Sheet. As a result, PSE&G's liability to Power is not eliminated in consolidation and is included in Other Current Liabilities on PSEG's Condensed Consolidated Balance Sheet as of September 30, 2011 and December 31, 2010.