On its investor day, management stated that it has no plans to issue equity in the foreseeable future.  The Company expects to generate surplus cash flow at PSEG Power following the completion of scrubbers at its Mercer and Hudson power plants.  This surplus cash flow, combined with debt at the utility, is expected to fund the utility's capital spending program.

Capital Investment Plans for 2009-2011

In 2009, BPU approved the Capital Economic Stimulus Program.  Under this program, the Company expects accelerating $694.0 million of capital infrastructure investments through the distribution business in New Jersey over a 24-month period.  The program seeks to support employment in New Jersey, while enhancing reliability.  This program provides for a charge for contemporaneous recovery of a return on the program expenditures plus depreciation of the assets, which will be adjusted each January.  Total expenditures through December 31, 2009, related to this project were approximately $180.0 million.

In 2009, The BPU approved the Energy Efficiency Economic Stimulus Program.  Under this program, the Company expects approximately $190 million in energy efficiency expenditures in New Jersey over an 18-month period.  The program seeks to help New Jersey meet its Energy Master Plan goal of reducing energy consumption by 20% by 2020 and to support employment growth.  This program provides for a charge for contemporaneous recovery of a return on the program expenditures.  Total expenditures through December 31, 2009, related to this project were approximately $5.0 million.

On its investor day, management stated that Public Service Electric & Gas Company (PSE&G) will invest $5.3 billion between 2010 and 2012.  The planned spending program, if approved by New Jersey regulators, would result in rate base growth of 14%.  The proposed new plant additions include new transmission, New Jersey capital infrastructure stimulus projects and alternative energy and demand response spending.

PSEG Power spending in 2012 will decline to under $500.0 million.  The Company's capital spending program will include growth projects consisting of new peaking plants in New Jersey and New England and nuclear uprates at the company's Peach Bottom Plant.  The Company will also incur a modest amount of development costs associated with its nuclear new build project.

The capital spending budget does not include a scrubber at the Company's Bridgeport coal plant.  Future spending at Bridgeport will depend on new EPA rules pertaining to sulfur, nitrous oxide, hazardous air pollutants (including mercury) and waste disposal.  Salem capital spending will depend on new EPA rules.