PSEG Energy Resources & Trade LLC

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3 Attachment # 4 Clean Version of Revised Tariff Sheet PSEG Energy Resources & Trade LLC FERC Electric Tariff, Original Volume No. 1

4 PSEG Energy Resources & Trade LLC FERC Electric Tariff, Original Volume No. 1 Znd Revised Sheet No. 3 Superseding 1 Rev. Sheet No. 3 Superseding Original Sheet No. 4 Superseding Original Sheet No. 5 PSEG Energy Resources BL Trade LLC SUPPLEMENT NO.- TO RATE SCHEDULE NO.- STATEMENT OF POLICY AND CODE OF CONDUCT WITH RESPECT TO THE RELATIONSHIP BETWEEN PSEG Energy Resources & Trade LLC AND Public Service Electric and Gas Company Marketinz of Power TO the maximum extent practical, the employees of Public Service Electric and Gas Company ( PSE&G ) wiii operate separately from PSEG Energy Resources & Trade LLC. All market information shared between PSE&G and PSEG Energy Resources & Trade LLC will be disclosed simultaneously to the public. This includes all market information, including but not limited to, any commutation concerning power or transmission business, present or future, positive or negative, concrete or potential. Shared employees in a support role are not bound by this provision, but they may not serve as an improper conduit of information to non-support personnel. Sales of non-power goods or services by PSEBLG, including sales made through its affiliated EWGs or QFs to PSEG Energy Resources Br. Trade LLC will be at the higher of cost or market price. Sales of any non-power goods or service by PSEG Energy Resources & Trade LLC to PSE&G will not be at a price above market. Brokerinu of Power 5. PSEG Energy Resources & Trade LLC will not broker power for PSE&G. Issued by: Steven R. Teitelman President Effective Date: February 27, 2006

5 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION PSEG Energy Resources & Trade LLC Docket Nos. ER Public Service Electric and Gas Company ER NOTICE OF FILING Take notice that on January 22,2007, PSEG Energy Resources & Trade LLC and Public Service Electric and Gas Company tendered for filing an amendment to their joint triennial market power update in compliance with the Commission Orders granting them market-based rate authority in Docket Nos. ER and ER Any person desiring to intervene or to protest this filing must file in accordance with Rules 21 1 and 214 of the Commission s Rules of Practice and Procedure (1 8 CFR $ and ). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make Protestants parties to the proceeding. Any person wishing to become aparty must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant. The Commission encourages electronic submission of protests and interventions in lieu of paper using the efiling link at - Persons unable to file electronically should submit an original and 14 copies of the protest or intervention to the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C This filing is accessible on-line at using the elibrary link and is available for review in the Commission s Public Reference Room in Washington, D.C. There is an esubscription link on the web site that enables subscribers to receive notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please FERCOnheSupport@ferc.gov, or call (866) (toll free). For TTY, call (202) Comment Date: 5:OO pm Eastern Time on (insert date). Magalie R Salas Secretary

6 Issued by FERC OSEC 02/28/2007 in Docket#: ER FEDERAL ENERGY REGULATORY COMMISSION Washington, D.C In Reply Refer To: PSE&G Energy Resources & Trade LLC and Public Service Electric and Gas Company Docket Nos. ER and ER February 28,2007 Ms. Tamara L. Linde, Esq. General Solicitor Attorney for PSE&G Services Corporation 80 Park Plaza, T5G Newark, New Jersey Reference: Updated Market Power Analysis, Compliance to Order No. 652 and Removal of Market-Behavior Rules Dear Ms. Linde: Pursuant to the authority delegated to the Director, Division of Tariffs and Market Development - West, under 18 C.F.R , your submittals filed in the referenced docket are accepted for filing. On November 30,2006, as amended on December 6, 2006 and January 22,2007, you filed on behalf of PSE&G Energy Resources & Trade, LLC (ER&T) and Public Service Electric and Gas Company (PSE&G) (Applicants), an updated market power analysis pursuant to the Commission s order granting the Applicants authority to sell electric energy and capacity at market-based rates2 You also submitted revised tariff 1 PSE&G s FERC Electric Tariff, Original Volume No. 6, First Revised Sheet No. 2 (supercedes Original Sheet Nos. 2-4). The change in status language is effective March 21, ER&T s FERC Electric Tariff, Original Volume No. 5, Second Revised Sheet No. 3 (supercedes First Revised Sheet No.3 and Original Sheet Nos. 4-5). The removal of market behavior rules is effective February 27, PSEG Energy Resources & Trade LLC, Docket No. ER (February 12, 1997) (unpublished letter order), and Public Service Electric and Gas Company, Docket No. ER (September 29, 1999) (unpublished letter order).

7 Issued by FERC OSEC 02/28/2007 in Docket#: ER Docket Nos. ER and ER sheets for PSE&G to incorporate the change in status reporting requirement adopted by the Commission in Order No and to remove the Commission s market behavior rules for both PSE&G and ER~LT.~ You state that the Applicants are subsidiaries of Public Service Enterprise Group Incorporated (PSEG). You state that PSE&G and ER&T do not own or operate any electric generation. You state that the Applicants affiliates own generation in PJM Interconnection, L.L.C (PJM), IS0 New England, Inc. (ISO-NE), New York Independent System Operator (NYISO) and California Independent System Operator Corporation (CAISO) markets. You stzte that PSE&G is a member of PJM and has made all of its transmission facilities available for open access transmission service pursuant to the PJM Open Access Transmission Tariff. You state that other than the transmission assets owned by PSE&G, no transmission assets are owned by the Applicants or any of their affiliates. You also state that Applicants own natural gas distribution facilities in the State of New Jersey and that Applicants will continue to comply with Codes of Conduct and prohibition of sales to affiliates, so no affiliate abuse concerns exist. Your filings were noticed on December 4,2006, December 1 1, 2006 and January 25,2007, with comments, protests or interventions due on or before December , December 27,2006 and February 12,2007. None was filed. Market-Based Rate Authorization The Commission allows power sales at market-based rates if the seller and its affiliates do not have, or have adequately mitigated market power in generation and transmission and cannot erect other barriers to entry. The Commission also considers whether there is evidence of affiliate abuse or reciprocal dealing.6 In its order issued in AEP Power Marketing, Inc., 107 FERC 7 6 1,O 18, order on reh g, 108 FERC 76 1,026 (2004), the Commission adopted two indicative screens for Reporting Requirement for Changes in Status for Public Utilities with Mavket- Based Rate Authority, Order No. 652, 70 Fed. Reg. 8,253 (Feb. 18,2005), FERC Stats. & Regs. 7 31,175, order on reh g, 11 1 FERC 7 61,413 (2005). 4 Investigation of Terms and Conditions of Public Utility Market-Based Rate Authorizations, 114 FERC 7 61,165 (2006). 5 Pennsylvania-New Jersey-Mavland Interconnection, 81 FERC 7 61,257 (1997) 6 See, e.g., Progress PowerMarketing, Inc., 76 FERC fi 61,155, at 61,919 (1996); Northwest Power Marketing Co., L.L.C., 75 FERC 7 61,281, at 61,899 (1996); accord Heartland Energy Services, Inc., 68 FERC 7 61,223, at 62, (1994).

8 Issued by FERC OSEC 02/28/2007 in Docket#: ER Docket Nos. ER and ER assessing generation market power. You have prepared the pivotal supplier and wholesale market share screens for the PJM, ISO-NE, NYISO and the CAISO markets. Your generation market power screens have been reviewed, and you pass both the pivotal supplier and wholesale market share screens in all of those markets listed above. In addition, based on your representations, your submittal satisfies the Commission's requirements for market-based rates regarding transmission market power, other barriers to entry, and affiliate abuse. With regards to barriers to entry, as we previously advised Applicants, should you or any of your affiliates deny, delay or require unreasonable terms, conditions, or rates for natural gas service to a potential electric competitor in bulk power markets, then that electric competitor may file a complaint with the Commission that could result in the suspension of your authority to sell power at market-based rates. Reporting Requirements In Order No. 664, the Commission stated that it no longer grants waivers of the full requirements of Part 45 in its orders granting market-based rate authority. Rather, persons seeking to hold interloclung positions are required henceforth to comply with the full requirements of Part 45.' With respect to an individual who currently is authorized to hold interloclung positions, that individual will not need to refile under the full requirements of Part 45 to continue to hold such interlocking positions (unless and until that individual assumes different or additional interlocking positions).' Thus, Order No. 664 requires that you henceforth comply with the full requirements of Part 45. Consistent with the procedures the Commission adopted in Order No. 2001, you - must file electronically with the Commission an Electric Quarterly Report containing: (1) a summary of the contractual terms and conditions in every effective service agreement for market-based power sales; and (2) transaction information for effective short-term (less than one year) and long-term (one year or greater) market-based power I See Commission Authorization to Hold Interlocking Positions, Order No. 664, 112 FERC 7 61,298 at P 34, FERC Stats. & Regs. fi 31,194 (2005) ("[me intend to no longer grant waivers of the full requirements of [Plart 45 in our orders granting marketbased rate authority. Rather, persons seeking to hold interlocking positions will be required henceforth to comply with the full requirements of [Plart 45"). 'Id. at P 36.

9 Issued by FERC OSEC 02/28/2007 in Docket#: ER Docket Nos. ER and ER sales during the most recent calendar quarter.' Electric Quarterly Reports must be filed quarterly no later than 30 days after the end of the reporting quarter." Order No. 652 requires that you timely report to the Commission any change in status that would reflect a departure from the characteristics the Commission relied upon in granting market-based rate authority. Your next updated market power analysis is due within three years of the date of this order. The Commission has stated it reserves the right to require such an analysis at any time." This action does not constitute approval of any service, rate, charge, classification, or any rule, regulation, or practice affecting such rate or service provided for in the filed documents; nor shall such action be deemed as recognition of any claimed contractual right or obligation affecting or relating to such service or rate; and such acceptance is without prejudice to any findings or orders which have been or may hereafter be made by the Commission in any proceeding now pending or hereafter instituted by or against any of the applicant(s). This order constitutes final agency action. Requests for rehearing by the Commission may be filed within 30 days of the date of issuance of this order, pursuant to 18 C.F.R Revised Public Utility Filing Requirements, Order No. 2001, 67 Fed. Reg. 31,043 (May 8,2002), FERC Stats. & Regs. T[ 31,127 (2002). Required data sets for contractual and transaction information are described in Attachments B and C of Order No The Electric Quarterly Report must be submitted to the Commission using the EQR Submission System Software, which may be downloaded from the Commission's website at 10 The exact dates for these reports are prescribed in 18 C.F.R b. Failure to file an Electric Quarterly Report (without an appropriate request for extension), or failure to report an agreement in an Electric Quarterly Report, may result in forfeiture of market-based rate authority, requiring filing of a new application for market-based rate authority if the applicant wishes to resume making sales at market-based rates. See, eg., Duke/Louis Dreyfus Energy Services (New England) L.L.C., 75 FERC ,165 (1996); Western Resources, Inc., 94 FERC 7 61,050 (2001).

10 Issued by FERC OSEC 02/28/2007 in Docket#: ER Docket Nos. ER and ER Questions regarding the above order should be directed to: Federal Energy Regulatory Commission Attn: Michelle Barnaby Phone: (202) Office of Energy Markets and Reliability 888 First Street, N.E., EM-5.6 Washington, D.C Sincerely, Steve P. Rodgers, Director Division of Tariffs and Market Development - West

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12 EXHIBIT B AFFIDAVIT STATE OF NEW JERSEY COUNTY OF ESSEX Before me, the undersigned authority, personally came and appeared KEVIN J. QUI known to me to be the President of PSEG Energy Resources & Trade LLC, who upon being duly sworn, stated the following: I am of full legal age and that my business address is 80 Park Plaza, T19, Newark, New Jersey, I am the President of PSEG Energy Resources & Trade LLC. The purpose of this affidavit is to verify that PSEG Energy Resources & Trade LLC is a power marketer, as defined in Section ( 1 1) of the Texas Utilities Code. I have reviewed the Registration of PSEG Energy Resources & Trade LLC as a power marketer, and the information included therein is, to the best of my knowledge, true and correct. SUBSCRIBED AND SWORN TO BEFORE ME this $+ day of dw,, 2007 w Jersey