Comments to Latest Drafts

Adele:
Here are my thoughts on the latest drafts of the ISDA and CSA Schedules that
you sent to me:

1. In Part 1, Section (e) of the ISDA Schedule, right after the definition of
PSE&G Reorganization Transaction you need to delete "S&P". I also need to
see what you are planning to put on Annex C.

2. I am checking with my credit person regarding the language that you added
to Part 5, Section (h) - Transfer.

3. In the CSA, I thought that both threshold amounts were to be at
$7,500,000. In addition, in the proviso after threshold, the term "Specified
Condition" should be changed to "Material Adverse Change". A Mac would be
triggered if Credit Ratings were below BBB-.

4. In Paragraph 13, Section (e), if the only types of collateral are cash or
LC's why is consent required to substitute?

5. I would like to discuss with you our proposed Insert 4 to Paragraph 13,
Section (h)(iii).

6. In Paragraph 13, Section (j)(ii)(2), why was the last sentence deleted?

7. I need to discuss with you just a few issues on the LC provisions. I will
send you a mark-up with my thoughts and questions.

Hopefully we can get this resolved next week. Tuesday through Thursday of
next week work best for me. I will fax to you a mark-up with my nits and
comments on the lC language.

Carol