PSEG Global to Explore Sale of SAESA Group of Chilean Electric Distribution Companies

NEWARK, N.J., Dec. 18 /PRNewswire-FirstCall/ -- PSEG Global announced today it intends to sell its ownership interests in the SAESA Group of companies (SAESA) in southern Chile. The SAESA Group companies (subsidiaries of PSEG Global) are major electric distribution and transmission businesses with 638,000 customers and a total of 118 MWs of wind, hydro, diesel and gas electric generation capacity. PSEG also announced that it has engaged Credit Suisse to act as an advisor to PSEG in the sale of SAESA.

SAESA is Chile's second largest electric distribution company in terms of geographical coverage with a total franchise area 390,000 square kilometers. The SAESA group serves 26 percent of Chile's population, providing electric service to more than 2.6 million inhabitants.

The principal companies that make up the SAESA Group include: -- SAESA (Sociedad Austral de Electricidad S.A.), an electric distribution company in Chile's IX and X Regions, serving 310,000 customers; -- Frontel (Empressa Electrica de las Frontera S.A.), an electric distribution company operating in Chile's VIII and IX Regions, serving 276,000 customers; -- Edelaysen (Empressa Electrica de Aisen S.A.), a vertically integrated generation (41MW), transmission and distribution company operating in Chile's XI Region, serving 35,000 customers; -- STS, a transmission company that owns, operates and maintains 949 kilometers of transmission lines in Chile's VII, IX and X Region; -- Luz Osorno, an electric distribution company in Chile's X Region with 17,000 customers; and -- PSEG Generacion, an electric generation company with approximately 70 MWs of diesel and natural gas powered capacity.

"The SAESA Group of companies has grown rapidly and we are pleased with the dramatic improvement in operations over the last two years in particular. These are very good companies in high growth areas. The market today is providing attractive valuations for quality Latin American electric distribution companies," said Matthew McGrath, president PSEG Global.

SAESA's results for all of 2007 (approximately $0.19 per share) will be reported in Discontinued Operations. Despite this loss of earnings, strong performance from the balance of its portfolio could allow PSEG's operating earnings for 2007 to fall in the middle of the company's 2007 guidance of $5.15 to $5.45 per share. PSEG is also reiterating its 2008 guidance for operating earnings of $5.60 - $6.10 per share. On a full year basis, the sale of SAESA could result in dilution of $0.07-$0.08 per share. The impact on 2008, however, should be greater than this amount given that the net sale proceeds will only be available for a portion of the year.

PSEG Energy Holdings, in conjunction with the recent closing of other asset sales in Latin America, plans to use some of its cash on hand to call $200 million of PSEG Energy Holdings' 10% Senior Notes due 10/1/09. The call will be in compliance with the terms of the bond indenture with final pricing established 3 days prior to expiration of the 30 day call notice period. Thomas O'Flynn, president, PSEG Energy Holdings and executive vice president and CFO, PSEG said that, "the redemption is in keeping with the long-term financial goals of Energy Holdings; the sale of assets provides cash for dividend distribution to the parent company to further enhance its strong financial position, allows for a balanced reduction in debt at the subsidiary level and further increases our ability to pursue growth opportunities in our core U.S. markets."

PSEG Global's primary investments include 100 percent ownership in two 1,000-mw electric generation plants in Texas, and partial ownership of a number of smaller plants in California, Hawaii and New Hampshire. PSEG Global also has small investments in electric generation plants in Italy, India and Venezuela.

PSEG Global is a subsidiary of PSEG Energy Holdings and an indirect subsidiary of PSEG . PSEG is a diversified energy company based in Newark, New Jersey. Its other main subsidiaries include PSEG Power, a merchant generation company and PSE&G, an electric and gas distribution company in New Jersey.

FORWARD-LOOKING STATEMENT

Readers are cautioned that statements contained in this press release about our and our subsidiaries' future performance, including future revenues, earnings, strategies, prospects and all other statements that are not purely historical, are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance they will be achieved. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the effects of weather; the performance of generating units and transmission systems; the availability and prices for oil, gas, coal, nuclear fuel, capacity and electricity; changes in the markets for electricity and other energy-related commodities; changes in the number of participants and the risk profile of such participants in the energy marketing and trading business; the effectiveness of our risk management and internal controls systems; the effects of regulatory decisions and changes in law; changes in competition in the markets we serve; the ability to recover regulatory assets and other potential stranded costs; the outcomes of litigation and regulatory proceedings or inquiries; the timing and success of efforts to develop generation, transmission and distribution projects; continued market based rate authority, including any necessary mitigation; environmental regulations and responses to global climate change; ability to realize tax benefits and favorably resolve tax audit claims; conditions of the capital markets and equity markets; advances in technology; changes in accounting standards; changes in interest rates and in financial and foreign currency markets generally; the economic and political climate and growth in the areas in which we conduct our activities; and changes in corporate strategies. For further information, please refer to our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. These documents address in further detail our business, industry issues and other factors that could cause actual results to differ materially from those indicated in this release. In addition, any forward-looking statements included herein represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if our estimates change, unless otherwise required by applicable securities laws.