(May 26, 2006 - Newark, N.J.) - Public Service Electric and Gas Co. (PSE&G) today announced that winter heating bills for its 1.7 million residential gas customers would remain stable heading into the 2006-2007 winter heating season. In its annual filing with the New Jersey Board of Public Utilities (BPU), the state’s largest electric and gas utility proposed a small overall decrease in the average customer bill on an annual basis.

The company is proposing a 1 percent decrease in the gas supply portion of the bill due to lower wholesale supply prices. The filing also contains an increase in the balancing charge, which is applied to bills from November through March to recover the cost of providing storage and peaking services.

The combined impact of both changes is a decrease of 0.2 percent on an annual basis, but a 0.1 percent increase on an average winter monthly bill. A residential gas heating customer who uses 100 therms in a winter month would pay $149.06 per month, or 10 cents more under the proposed rates during each of the five winter months. On an annual basis, this same customer’s bill would drop $2.18. The new rates would take effect Oct. 1, 2006 if approved by the BPU.

“Wholesale gas supply prices have moderated in the short term, principally due to warmer winter weather earlier this year and plenty of gas in storage. And that’s certainly good news for our customers,” said Frederick Lark, vice president of business analysis for PSE&G. “About half of the gas we will need this winter has been locked in, which will tend to keep prices stable.  Looking out over the longer term, however, we’re concerned that prices could start spiking again because of possible hurricane activity, colder winter weather, and other factors.”

PSE&G makes no profit on the sale of natural gas, and passes along what it pays to customers. If the price of natural gas increases later this winter, the BPU allows the state’s natural gas utilities, including PSE&G, to recover those costs. Reductions in the gas supply price may be implemented at any time if market conditions warrant.

Public Service Electric and Gas Company (PSE&G) is New Jersey’s oldest and largest regulated gas and electric delivery utility, serving nearly three-quarters of the state’s population. PSE&G is the winner of the ReliabilityOne National Achievement Award for superior electric system reliability. PSE&G is a subsidiary of Public Service Enterprise Group Incorporated (PSEG) (NYSE:PEG), a diversified energy company (www.pseg.com).