Exhibit 10-36

SEPARATION AGREEMENT, GENERAL RELEASE AND WAIVER

          This Separation Agreement, General Release and Waiver is made and
entered into as of the 7th day of April, 2003 by and among RALPH R. TEDESCO
(hereinafter referred to as "Employee"), NEW YORK STATE ELECTRIC & GAS
CORPORATION (hereinafter referred to as "NYSEG") and ENERGY EAST MANAGEMENT
CORPORATION (hereinafter referred to as "EEMC").

W I T N E S S E T H :

          WHEREAS, Employee has been employed by NYSEG as President; and

          WHEREAS, NYSEG and Employee are parties to an Employee Invention and
Confidentiality Agreement - Existing Executive dated as of May 28, 1997 and
amended by Agreement dated as of July 1, 1997 (hereinafter collectively referred
to as "Employee Invention and Confidentiality Agreement"); and

          WHEREAS, NYSEG and Employee are parties to a Severance Agreement dated
January 1, 2001 (hereinafter referred to as "Severance Agreement"); and

          WHEREAS, Employee's position with NYSEG as President and his
employment by NYSEG shall terminate effective midnight April 30, 2003; and

          WHEREAS, contemporaneously with the execution of this Separation
Agreement, General Release and Waiver, Employee and NYSEG have agreed to amend
the Employee Invention and Confidentiality Agreement; and

          WHEREAS, Employee and NYSEG desire to settle fully and finally all
rights and obligations between them including, but in no way limited to, any
rights and obligations that might arise out of the Severance Agreement and
Employee's employment with NYSEG, and the termination thereof;

          NOW, THEREFORE, in consideration of the premises and mutual promises
herein contained, it is agreed as follows:

          1.     Employee understands, acknowledges and agrees that his
employment as President will terminate effective midnight April 30, 2003. A copy
of his resignation is attached hereto as Exhibit "A".

          2.     The effective date ("Effective Date") of this Agreement shall
be the eighth (8th) day after Employee delivers a fully executed original copy
of this Agreement to Richard Benson, Vice President Human Resources, Energy East
Management Corporation, Box 3287, Ithaca-Dryden Road, Ithaca, New York 14852,
provided that he has not revoked it as permitted under Paragraph "14", below.
Provided the Employee has not revoked this Agreement as permitted under
Paragraph "14", below, NYSEG shall pay Employee the sum of One Million One
Hundred Ninety-Five Thousand and 00/100 Dollars ($1,195,000.00), which payment
is not otherwise owed to Employee and which Employee acknowledges exceeds any
payment or benefit to which Employee might otherwise be entitled. The payment
provided for in this Paragraph shall be made on or before May 15, 2003, and
shall be subject to withholding for federal and state income taxes, FICA, and
such other and further deductions as may be required by law. In addition to the
payment provided by this Paragraph NYSEG will make outplacement services
available to the Employee until April 30, 2004 with the firm of Lee Hecht
Harrison. The outplacement services provided pursuant to this Separation
Agreement, General Release and Waiver shall not exceed a cost of Fifty Thousand
Dollars ($50,000.00) and shall be paid directly by NYSEG to Lee Hecht Harrison.
Employee shall not have any right to secure outplacement services through any
firm or individual other than Lee Hecht Harrison at NYSEG's expense. To the
extent Employee does not utilize the entire Fifty Thousand Dollars ($50,000.00)
for outplacement services by April 30, 2004, the remaining amount is waived by
the Employee.

          3.     In addition to the consideration provided in Paragraph "2",
Employee shall be entitled to the payment and benefits provided in the Employee
Invention and Confidentiality Agreement, as amended. Employee acknowledges and
reaffirms that he will comply with the terms of the Employee Invention and
Confidentiality Agreement, as amended.

          4.     The Severance Agreement shall terminate as of the Effective
Date. Employee acknowledges and agrees that he will not receive any payments or
benefits under the Severance Agreement.

          5.     Except as otherwise expressly provided for in this Agreement,
Employee acknowledges and agrees that NYSEG owes Employee no wages, bonuses,
sick time, personal time, holidays, severance pay, vacation pay, incentive
compensation, stock options or other compensation, benefits, or payments of any
kind or nature.

          6.     Employee has returned, or will return to NYSEG prior to May 1,
2003 all NYSEG information and related reports, files, memoranda, records,
employee identification badges or cards, keys, computer access codes, software
and other property which Employee received or prepared or helped prepare in
connection with his employment with NYSEG; and Employee has not retained and
will not retain any copies, duplicates, reproductions or excerpts thereof.

          7.     Employee shall not publish or disclose, directly or indirectly,
or authorize anyone else to publish or disclose, directly or indirectly, any
confidential matters relating to any aspect of NYSEG's or its corporate parent
Energy East Corporation's operations, Employee's association therewith or other
private matters. Employee shall not divulge, furnish or make accessible to
anyone any knowledge, information, know-how or techniques relating to the
functions or operations of NYSEG or Energy East Corporation and shall for all
time and for all purposes regard the foregoing matters relating to the
activities of NYSEG and Energy East Corporation as private and strictly
confidential.

          8.     As material inducement to NYSEG to enter into this Agreement,
Employee, for himself, his heirs, executors, administrators, successors, assigns
and trustees (collectively "Releasors"), releases and forever discharges NYSEG,
its corporate parent Energy East Corporation, the subsidiaries and related
entities of Energy East Corporation, and the directors, trustees, officers,
employees, agents, attorneys, successors, and assigns of Energy East
Corporation, its subsidiaries and related entities, and all persons acting by,
through, under, or in concert with any of them (collectively the "Releasees"),
from all actions, causes of action, suits, debts, charges, complaints, claims,
obligations, promises, agreements, controversies, damages, judgements, rights,
costs, losses, expenses, liabilities and demands of any nature, whether known or
unknown, whether actual or potential, whether specifically mentioned herein or
not, in law or equity, whether statutory or common law, whether federal, state,
local, or otherwise, including, but not limited to, any claims relating to or
arising out of any aspect of the Severance Agreement or Employee's employment
with NYSEG, including but not limited to:

     (a)     Any and all claims of wrongful discharge or breach of contract, any
and all claims for equitable estoppel, any and all claims for employee benefits,
including, but not limited to, any and all claims under the Employee Retirement
Income Security Act of 1974, as amended, and any and all claims of employment
discrimination on any basis, including, but not limited to, any and all claims
under Title VII of the Civil Rights Act of 1964, as amended, under the Age
Discrimination in Employment Act of 1967, as amended, under the Civil Rights Act
of 1866, 42 U.S.C. Section 1981, under the Civil Rights Act of 1991, as amended,
under the Americans with Disabilities Act of 1990, as amended, under the Family
and Medical Leave Act of 1993, under the Immigration Reform and Control Act of
1986, as amended, under the Fair Labor Standards Act, as amended, 29 U.S.C.
Section 201 et seq. and under the New York Human Rights Law;

     (b)     Any and all claims under any other federal, state, or local labor
law, civil rights law, fair employment practices law, or human rights law;

     (c)     Any and all claims of slander, liable, defamation, invasion of
privacy, intentional or negligent infliction of emotional distress, intentional
or negligent misrepresentation, fraud, and prima facie tort; and

     (d)     Any and all claims for monetary recovery, including but not limited
to, back pay, front pay, liquidated, compensatory, and punitive damages, and
attorneys' fees, experts' fees, disbursements and costs which against the
Releasees or any of the them, Releasors ever had, now have, or hereafter can,
shall, or may have, for, upon, or by reason of any matter, cause, or thing
whatsoever from the beginning of time to the date of Employee's execution of
this Agreement.

          9.     The General Release and Waiver set forth above specifically
excludes any claim for any vested monies or other benefits to which Employee may
be entitled under any existing pension plan, deferred compensation plan,
restricted stock plan, and/or stock option plan. Employee's entitlement to
benefits under such plans shall be determined in accordance with the provisions
of such plans. The General Release and Waiver also specifically excludes any
claims under the Employee Invention and Confidentiality Agreement, as amended.

          10.     NYSEG does hereby release, acquit and forever discharge and
agree not to sue the Employee, his heirs, executors, administrators, agents,
servants, successors, and assigns and all persons acting on, through, or under
or in concert with any of them or any of them, from any and all charges,
complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of actions, suits, rights, demands,
costs, losses, debts and expenses (including attorneys' fees and costs actually
incurred), up to and including the date of this Agreement, of any nature
whatsoever, known or unknown, suspected or unsuspected arising out of or in
connection with the Employee's employment relationship with NYSEG. Expressly
excluded from the release provided in this Paragraph is any claim or obligation
under this Separation Agreement General Release and Waiver and the Employee
Invention and Confidentiality Agreement, as amended. Also specifically excluded
from this release are any claims which NYSEG and/or its related entities may
have against the Employee that arise or are alleged to arise out of criminal
conduct on the part of the Employee.

          11.     Employee understands and agrees that he will not be
re-employed by NYSEG, its parent, Energy East Corporation, or subsidiaries or
related companies of Energy East Corporation. Employee agrees that he will never
seek employment or re-employment with NYSEG, Energy East Corporation, or
subsidiaries or related companies of Energy East Corporation. This Agreement in
no way prevents Employee from retaining employment with a business, company or
enterprise that is not currently a parent, subsidiary or related company of the
Employer or Energy East Corporation, but which may in the future acquire, or be
acquired by Employer or Energy East Corporation, its subsidiaries or related
companies.

          12.     Employee represents and agrees that he will keep the terms,
amount and fact of this Agreement, completely confidential, and that he will not
disclose any information concerning this Agreement, except as may be required by
law, to anyone except his immediate family and his private attorney(s) and tax
advisors; provided, that they agree to keep said information confidential and
not disclose it to others. Employee and his immediate family

agree to refrain from criticizing or making disparaging or derogatory comments
about NYSEG and/or Energy East Corporation, its subsidiaries and related
entities and the officers, directors, employees, agents, products or services of
NYSEG and/or Energy East Corporation, its subsidiaries and related entities. The
officers and directors of NYSEG and the Releasees shall not make or publish any
statements that disparage, denigrate, or are otherwise critical of Employee.

          13.     After May 1, 2003, Employee shall reasonably cooperate with
NYSEG and Energy East Corporation and its subsidiaries and related entities in
connection with business activities in which Employee was involved or had
knowledge. Such cooperation shall include, but not be limited to, reasonably
requested sworn testimony. After May 1, 2003, Employee shall be compensated by
NYSEG and/or Energy East Corporation for his time at the rate of $300.00/hr.,
plus reimbursement for all ordinary, necessary and reasonable expenses,
including but not limited to, meals, travel, lodging and attorneys fees.

          14.     Employee expressly acknowledges, represents, and warrants that
the terms and provisions of this Agreement herein stated are the only
consideration for signing this Agreement; that no other promise or agreement of
any kind has been made to or with any person or entity whatsoever to cause the
signing of this Agreement; and that, in executing this Agreement, Employee does
not rely and has not relied on any representation or statement made by any of
the Releasees or by any of the Releasees' agents, representatives, or attorneys
with regard to the subject matter, basis, or effect of this Agreement or
otherwise. Notwithstanding any other provision of this Agreement to the
contrary:

     (a)     Employee, in consideration of the monies paid by NYSEG and the
outplacement benefit provided by NYSEG, as described in Paragraph "2" of this
Agreement (which payment Employee agrees constitutes consideration in addition
to anything of value to which Employee is already entitled), agrees that this
Agreement constitutes a knowing and voluntary waiver of all rights or claims
Employee may have against the Releasees, or any of them, including, but not
limited to, all rights or claims as more fully set forth in Paragraph "8" of
this Agreement;

     (b)     NYSEG and Employee agree that, by entering into this Agreement,
Employee does not waive rights or claims that may arise after the date this
Agreement is executed;

     (c)     NYSEG and Employee agree that this Separation Agreement, General
Release and Waiver shall not affect the rights and responsibilities of the U.S.
Equal Employment Opportunity Commission (hereinafter "EEOC") to enforce the Age
Discrimination in Employment Act of 1967, as amended and other laws. In
addition, NYSEG and Employee agree that this Separation Agreement, General
Release and Waiver shall not be used to justify interfering with Employee's
protected right to file a charge or participate in an investigation or
proceeding conducted by the EEOC. NYSEG and Employee further agree that the
Employee knowingly and voluntarily waives all rights or claims (that arose prior
to Employee's execution of this Separation Agreement, General Release and
Waiver) Employee may have against the Releasees, or any of them, to receive any
benefit or remedial relief (including, but not limited to, reinstatement, back
pay, front pay, damages, attorneys' fees, experts' fees) as a consequence of any
investigation or proceeding conducted by the EEOC and any litigation concerning
any facts alleged in any such charge;

     (d)     NYSEG and Employee agree that, for a period of seven (7) days
following the execution of this Agreement, Employee has the right to revoke this
Agreement by written notice of his revocation delivered to Richard R. Benson,
Vice President - Human Resources, Energy East Management Corporation, Box 3287,
Ithaca-Dryden Road, Ithaca, New York 14852. NYSEG and Employee further agree
that this Agreement shall not become effective or enforceable until the eighth
(8th) day after the execution of this Agreement; and that in the event that
Employee revokes this Agreement prior to the eighth (8th) day after execution of
this Agreement, this Agreement and the promises contained herein shall
automatically be deemed null and void.

     (e)     NYSEG hereby advises and urges Employee in writing to consult with
an attorney prior to executing this Agreement. Employee represents and warrants
that NYSEG has advised and urged Employee in writing, as specifically stated in
this written Agreement, to consult with an attorney prior to executing this
Agreement. Employee further represents and warrants that NYSEG gave Employee a
period of at least twenty-one (21) days in which to consider this Agreement.

     (f)     Employee's acceptance of any of the monies paid by NYSEG, as
described in Paragraph "2" of this Agreement, at any time more than seven (7)
days after the execution of this Agreement shall constitute an admission by
Employee that Employee did not revoke this Agreement during the revocation
period of seven (7) days; and shall further constitute an admission by Employee
that this Agreement has become effective and enforceable.

     (g)     If Employee executed this Agreement at any time prior to the end of
the at least twenty-one (21) day period that NYSEG gave Employee in which to
consider this Agreement, such early execution was a knowing and voluntary waiver
of Employee's right to consider this Agreement for at least twenty-one (21) days
and was due to Employee's belief that Employee had ample time in which to
consider and understand this Agreement, and in which to review this Agreement
with an attorney.

          15.     Employee understands and acknowledges that this Agreement,
General Release and Waiver shall not in any way be construed as an admission of
wrongdoing or liability on the part of NYSEG or any other person.

          16.     This Agreement shall be governed by, construed, interpreted,
performed and enforced under the laws of the United States and the State of New
York without giving effect to the conflicts of law principles.

          17.     This Agreement, General Release and Waiver sets forth the
entire agreement between the parties hereto, and fully supersedes any and all
prior agreements or understanding between the parties hereto pertaining to the
subject matter hereof.

          IN WITNESS WHEREOF, the parties have executed this Separation
Agreement, General Release and Waiver as of the date and year written above.

Dated:          4-8-03                     

  /s/Ralph R. Tedesco                       

      Ralph R. Tedesco

Dated:          4-8-03                      

NEW YORK STATE ELECTRIC & GAS
CORPORATION

By: /s/Elaine T. DuBrava                      

Dated:                                           

ENERGY EAST MANAGEMENT
CORPORATION

By   /s/Richard R. Benson                   
            Richard R. Benson

 

AMENDMENT

          Amendment Number Two (2) to Employee Invention and Confidentiality
Agreement - Existing Executive, by and between, NEW YORK STATE ELECTRIC & GAS
CORPORATION (the "Company") and RALPH R. TEDESCO ("me" or "I") is made and
entered into this 7th day of April, 2003.

          WHEREAS, the Company and I are parties to a certain Employee Invention
and Confidentiality Agreement - Existing Executive dated as of May 28, 1997 (the
"Agreement"), which was amended by Agreement dated as of July 1, 1997; and

          WHEREAS, the Company and I now wish to amend that Agreement to modify
the provisions relating to Consideration and Wage Maintenance; and to otherwise
modify the Agreement to reflect the termination of my employment effective May
1, 2003.

          NOW, THEREFORE, it is agreed as follows:

     1.     Section "10", Consideration and Wage Maintenance, of the Employee
Invention and Confidentiality Agreement is amended to read as follows:

     10.1     In consideration for my agreements as contained herein, the
Company agrees to pay me a one-time cash payment of One Thousand Five Hundred
Dollars ($1,500.00), which I acknowledge that I have already received.

     10.2     Deleted.

     10.3     As additional consideration for entering into this Agreement,
should the Company terminate my employment for any or no reason or upon my
resignation, the Company will pay me severance benefits in the total amount of
Three Hundred Thousand and 00/100 Dollars ($300,000.00) (the "Separation
Payment"). The Separation Payment will be paid on or about May 15, 2003, subject
to withholding for federal and state income taxes, FICA, and such other and
further deductions as may be required by law.

     10.3.1     The Company shall pay my health insurance premiums under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (hereinafter
"COBRA") until October 31, 2004. I shall be entitled to any additional rights
guaranteed by COBRA. After October 31, 2004, premiums and other payments
required for any further continued coverage, in accordance with COBRA, shall be
my sole responsibility.

     10.3.2 Delete.
     10.3.3 Delete.
     10.3.4 Delete.
     10.3.5 Delete.

     Appendices "C" and "D" of the Agreement are deleted.
     If I should die, the balance of the payments not yet made under this
     Agreement shall be payable to my wife, Mary Jane Tedesco, if
     living, if not, to my estate.

          2.     Except as herein modified, all other terms and conditions of
the Employee Invention and Confidentiality Agreement remain unchanged. This
Amendment will be effective as of the date first set forth above.

          3.     This Amendment shall automatically terminate and no party
hereto shall have any rights against the other pursuant to this Amendment if the
Employee revokes that certain Separation Agreement, General Release and Waiver
between the Company and the Employee bearing date even herewith (the "Separation
Agreement") as provided in paragraph "14" of the Separation Agreement.

Dated:          4-8-03                     

  /s/Ralph R. Tedesco                       

      Ralph R. Tedesco

Dated:          4-8-03                     

  /s/Elaine T. DuBrava                       

NEW YORK STATE ELECTRIC & GAS
CORPORATION

By: /s/Richard R. Benson                    

Title                                             

 

April 8, 2003

Energy East Management Corporation
New York State Electric & Gas Corporation
Corporate Drive
Kirkwood Industrial Park
P.O. Box 5224
Binghamton, New York 13902-5224

Ladies and Gentlemen:

          I hereby resign effective May 1, 2003 as President of New York State
Electric & Gas Corporation, and all other offices, directorships, similar
positions and other affiliations I hold with New York State Electric & Gas
Corporation and any subsidiary or related entity of Energy East Corporation.

Sincerely yours,

/s/Ralph R. Tedesco
Ralph R. Tedesco