Exhibit 10.48

   

AMENDMENT TO GAS PURCHASE AND SALES AGREEMENT

THIS AMENDMENT TO GAS PURCHASE AND SALES AGREEMENT (this "Amendment"), dated as
of August 20, 2003, is by and between Public Service Electric and Gas Company
("PSE&G"), a New Jersey corporation, and North Jersey Energy Associates, A
Limited Partnership ("NJEA"), a New Jersey limited partnership (each a "Party",
and collectively the "Parties").

WITNESSETH:

WHEREAS, NJEA owns a nominal 300 MW natural gas-fired electricity and steam
generating plant located in the borough of Sayreville, New Jersey (the
"Facility");

WHEREAS, NJEA and Jersey Central Power & Light Company ("JCP&L") entered into a
Power Purchase Agreement dated as of October 22, 1987, as amended to date ("the
Existing PPA"), pursuant to which the Facility requires up to 57,500 dekatherms
per day of natural gas to generate the electric power and steam required to meet
NJEA's contractual sales obligations thereunder;

WHEREAS, NJEA and PSE&G entered into a Gas Purchase and Sales Agreement dated as
of May 4, 1989, as amended to date (the "Gas Purchase Agreement"), which
provides, among other things, for (1) PSE&G to provide gas transportation
service to NJEA over the PSE&G system in order to deliver gas that NJEA has
procured for the Facility, (2) the sale of gas to PSE&G by NJEA on certain peak
days for PSE&G's system supply and (3) the purchase by NJEA of a portion of its
gas requirements for the Facility from PSE&G;

WHEREAS, NJEA and JCP&L have entered into an Amended and Restated Power Purchase
Agreement dated as of May 16, 2003 (the "Amended and Restated Power Purchase
Agreement"), that amends the Existing PPA and alters NJEA's gas supply
requirements for the Facility;

WHEREAS, NJEA is a party to the firm gas transportation and gas storage
contracts listed on Exhibit 1 hereto (collectively, the "Transportation and
Storage Contracts");

WHEREAS, in anticipation of the effectiveness of the Amended and Restated Power
Purchase Agreement, NJEA and PSE&G seek to amend the Gas Purchase Agreement to
provide for, among other things, the supply of NJEA's total fuel requirements
for the Facility; and

WHEREAS, NJEA and PSEG Energy Resources and Trade, LLC ('ERT") intend to enter
into an agreement (the "Capacity Transfer Agreement") providing for the
permanent release, assignment or other transfer of NJEA's rights and obligations
under the Transportation and Storage Contracts to ERT.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree to amend
the Agreement as follows:

Section 1. Conditions Precedent.

Section 1.1. The rights and obligations of NJEA and PSE&G under this Amendment
are expressly made subject to the following conditions precedent:

(A) Approval by the New Jersey Board of Public Utilities of this Amendment in a
final and non-appealable written order that is acceptable to each of NJEA and
PSE&G in its sole discretion;

(B) The Amended and Restated Power Purchase Agreement shall have become
effective in accordance with the terms set forth therein which terms include New
Jersey Board of Public Utilities approval acceptable to NJEA in its sole
discretion;

(C) NJEA's receipt of all approvals, ratings, affirmations, certifications,
confirmations, waivers or other acknowledgements from or in respect of its third
party lenders that NJEA, in its sole discretion, determines are necessary for it
to undertake amendment of the Gas Purchase Agreement as provided for in this
Amendment without violating or causing a default under any of the agreements
currently in place with respect to financing relating to the Facility;

(D) NJEA shall have obtained all necessary partnership approvals for this
Amendment; and

(E) The Capacity Transfer Agreement, with terms and conditions acceptable to
each of NJEA and ERT, shall have become effective in accordance with the terms
set forth therein as determined by each of NJEA and PSE&G in its sole
discretion.

If the conditions specified above are not satisfied or waived by the Party or
Parties entitled to the benefit thereof by December 15, 2003, then this
Amendment may be terminated by either Party on thirty (30) days written notice
delivered to the other Party at the address specified in Section 14.6 of the Gas
Purchase Agreement with each Party retaining their rights to take any actions
they believe necessary to protect their interests. Provided, however, that if
during such 30-day notice period all of the conditions precedent described in
the immediately preceding sentence are satisfied or waived by both Parties, such
termination shall not be effective. NJEA and PSE&G will use reasonable
commercial efforts to satisfy the conditions stated in Sections 1(A) and 1(E),
including, without limitation, the filing of a petition, within five (5)
Business Days from the date first above written, with the NJBPU by PSE&G seeking
approval of this Amendment. NJEA will use reasonable commercial efforts to
satisfy the conditions stated in Section 1(B), 1(C) and 1(D).

Section 2. Amendment to Article I - Definitions. The definitions set forth in
Article 1 of the Gas Purchase Agreement are hereby amended as follows:

(A) Add "Additional Service Charge" means an additional fixed monthly charge
payable by NJEA to PSE&G for a one (1) year period commencing on each
anniversary of the Effective Date based on the total volumes of gas NJEA
utilizes pursuant to Sales Service, Extended Gas Service and/or Redelivery
Service (due to an interruption pursuant to Section 7) during the immediately
preceding one (1) year period or during any successive one (1) year period
through the term of the Agreement equal to the amounts set forth in Schedule 1
hereto; provided, however, that such amounts shall be pro rated for any partial
calendar month.

(B) Add "Business Day" means any day other than a Saturday, a Sunday or a day on
which commercial banks in New Jersey are required or authorized to be closed.

(C) Add "Capacity Transfer Agreement" means the Capacity Transfer Agreement
between ERT and NJEA, dated as of August, 2003, as amended to date.

(D) Add "Daily Nomination Quantity" means the daily quantity of gas specified in
NJEA's notice to PSE&G pursuant to Section 4.4.1., adjusted as provided in
Section 4.4.2.

(E) Add "Eastern Prevailing Time" means either Eastern Standard Time or Eastern
Daylight Savings Time, as in effect from time to time.

(F) Add "Effective Date" means the date specified as the Effective Date in a
written notice delivered by NJEA to PSE&G which date shall not occur prior to,
nor more than 60 days following, the date on which each of the conditions
precedent set forth in Section 1 of the Amendment to the Gas Purchase Agreement
dated as of August 20, 2003, have been satisfied or waived by both parties.

(G) Add "ERT" means PSEG Energy Resources and Trade, LLC, and its successors and
permitted assigns under the Capacity Transfer Agreement.

(H) Add "Excess Amount" has the meaning given in Section 9.6(a).

(I) Add "Exposure" means, as of any Business Day (i) the total of amounts
currently accrued, owing and not yet paid from NJEA to PSE&G pursuant to this
Agreement, less (ii) NJEA Exposure.

(J) Add "Gas Daily Price" means, for any Day, the arithmetic average of (i) the
daily "Midpoint" gas prices published by Platts in The Gas Daily Price Guide
"Daily Price Survey" under "City Gates", "Texas Eastern, zone M-3" and (ii) the
daily "Midpoint" gas prices published by Platts in The Gas Daily Price Guide
"Daily Price Survey" under "City Gates", "Transco, zone 6 N.Y."

(K) Add "Gas Day" means a period of consecutive hours beginning 10:00 a.m.
(Eastern Prevailing Time) and ending 10:00 a.m. (Eastern Prevailing Time) the
following calendar day.

(L) Add "NJBPU" means the New Jersey Board of Public Utilities.

(M) Add "NJEA Exposure" means, as of any Business Day (i) the total of amounts
currently accrued, owing and not yet paid from PSE&G to NJEA pursuant to this
Agreement.

(N) Add "NJEA Guarantee(s)" means one or several documents reasonably acceptable
to PSE&G that guarantees NJEA's performance under this Agreement.

(O) Add "NJEA Guarantor" means an entity that provides an NJEA Guarantee.

(P) Add "NJEA Threshold" means, as of any Business Day the total aggregate limit
of liability in force and effect as of such Business Day with NJEA Guarantors,
plus $1,000,000. In the event the credit rating of an NJEA Guarantor falls below
that of investment grade by a major rating agency, or if PSE&G has reasonable
grounds for insecurity as to the ability of an NJEA Guarantor to perform its
obligations under the NJEA Guarantee it has issued, the NJEA Threshold shall be
decreased by the amount of the guaranty provided by said NJEA Guarantor.

(Q) Add "Performance Assurance" means (i) cash, or (ii) letters of credit from a
Qualified Institution and in a form reasonably acceptable to PSE&G, or (iii)
additional guarantees or other performance assurances reasonably acceptable to
PSE&G.

(R) Add "Qualified Institution" means a commercial bank or trust company
organized under the laws of the United States or a political subdivision
thereof, having assets of at least $10 billion and a minimum "A" senior
unsecured debt rating (or, if unavailable, corporate issuer rating discounted
one notch) from S&P or "A2" from Moody's.

(S) Add "Texas Eastern" has the meaning given in Section 6.1.3.

(T) Add "Transco" has the meaning given in Section 6.1.3.

(U) Add "Transfer Deadline" means (i) with respect to a demand for posting or
return of Performance Assurance received on or before 1 p.m. (Eastern Prevailing
Time), the close of the next following Business Day, and (ii) with respect to a
demand for posting or return of Performance Assurance received after 1 p.m.
(Eastern Prevailing Time), the close of the second Business Day following the
date of the demand.

(V) Delete the following definitions: 1.1. CIG Tariff; 1.2. Commercial Date;
1.7. Facility Test Date; 1.8. Firm Supply Demand Charge Per Dekatherm; 1.9. Firm
Supply Component Quantity; 1.10. Fuel Oil Cost Per Dekatherm; 1.12. Interim
Period; 1.13. Interim Sales Service; 1.14. Maximum Daily Interim Sales Quantity;
1.16. Maximum Daily Transportation Quantity; 1.17. Maximum Daily Winter-Seasonal
Sales Quantity; 1.18 Maximum Daily Winter-Seasonal Transportation Quantity; 1.21
Peak Gas Service Credit; 1.27. Storage Component Quantity; 1.28. Storage-related
Demand Charge Per Dekatherm; 1.29. Test Period; 1.30. Test Period Sales Service;
1.31. Transportation Service; 1.32. Winter-Seasonal Sales Service; and 1.33
Winter-Seasonal Transportation Service.

(W) Amend and restate the definition of "Extended Gas Service" as follows:
"Extended Gas Service" means the sale and delivery of gas to NJEA by PSE&G on
days when the Sales Service is interrupted by PSE&G under Section 7.1.

(X) Amend the definition of "Extended Gas Service Charge" by deleting the words
will be $0.80 per dekatherm in 1988 and substituting therefor the words was
$1.4840 per dekatherm in 2001.

(Y) Amend the definition of "Maximum Daily Sales Quantity" by adding the words
and shall be equal to 57,500 dekatherms per day at the end of the sentence.

(Z) Amend the definition of "Month" by deleting the number 8:00 twice and
substituting therefor the number 10:00.

(AA) Amend and restate the definition of "Redelivery Service" as follows:
"Redelivery Service" means the service under which PSE&G will redeliver to NJEA
any gas delivered to PSE&G by NJEA up to the Maximum Daily Sales Quantity (or as
otherwise mutually agreed to by the parties on a case-by-case basis) pursuant to
Section 4.2.2. on days when Extended Gas Service is interrupted by PSE&G under
Section 7.2. or pursuant to Section 14.9.

(BB) Amend the definition of "Sales Service" by deleting the words after the
Commercial Date.

(CC) Amend and restate the definition of "Service Charge" as follows: "Service
Charge" means, for any Month, a charge payable by NJEA to PSE&G in an amount
equal to $200,000.00, provided, however, that such amount shall be pro rated for
any partial calendar month.

Section 3. Amendments to Article II - Conditions Precedent and Article III - Gas
Supply.

Section 3.1. Article II is amended and restated as follows:

Article II - [RESERVED]

Section 3.2. Article III is amended and restated as follows:

Article III - [RESERVED]

Section 4. Amendments to Article IV - Service Obligations.

Section 4.1. Section 4.1.1. is amended and restated as follows:

4.1.1. Commencing on the Effective Date, or such other date as may be agreed to
by PSE&G and NJEA, and on each day thereafter during the term of this Agreement,
PSE&G agrees to deliver and sell the Daily Nomination Quantity, but in no event
more than the Maximum Daily Sales Quantity, all in accordance with the terms of
this Agreement.

Section 4.2. Section 4.1.2. is hereby amended by deleting the words consistent
with efficiently meeting the needs of its other customers and adding the word
then before the words PSE&G agrees to sell.

Section 4.3. Section 4.1.3. is hereby amended and restated as follows:

4.1.3. The price for the Sales Service will be determined in accordance with
Section 6.1. Sales Service will be subject to interruption only as provided in
Section 7.1.

Section 4.4. Section 4.2. Transportation Service is deleted. Section 4.3. Test
Period Sales Service is deleted. Section 4.4. Interim Sales Service and
Redelivery Service is deleted. Section 4.6. Winter-Seasonal Services is deleted.

Section 4.5. Section 4.5. Extended Gas Service is renumbered Section 4.2. and
amended and restated as follows:

4.2. Extended Gas Service

4.2.1. For the full remaining term of this Agreement, NJEA hereby elects to take
Extended Gas Service for each winter season (which winter season commences on
November 1 of a calendar year and continues through March 31 of the next
calendar year). The Extended Gas Service will be at the price specified in
Section 6.2., and will be subject to interruption only as provided in Section
7.2. The daily quantity that PSE&G is obligated to deliver of Extended Gas
Service will be equal to the Daily Nomination Quantity, but in no event greater
than the Maximum Daily Sales Quantity.

4.2.2. If PSE&G interrupts Extended Gas Service on any Day pursuant to Section
7.2., PSE&G will use reasonable efforts to provide Redelivery Service to NJEA
and such Redelivery Service shall be included in the applicable Service Charge
or Additional Service Charge (if applicable at the time). Unless agreed to
otherwise by PSE&G, Redelivery Service due to an interruption pursuant to
Section 7 will be limited to gas supplied and delivered by or on behalf of NJEA
to PSE&G at Transco's Sayreville Metering and Regulating Station in Sayreville,
New Jersey. NJEA affirms that PSE&G has no obligation to effect such Redelivery
Service if, in PSE&G's sole judgment, such redelivery shall have an adverse
effect on PSE&G, its operations, or its other customers.

Section 4.6. Section 4.7. Delivery Parameters is renumbered Section 4.3.

Section 4.7. Section 4.7.1. is renumbered Section 4.3.1. and amended by deleting
the words sold or in the second sentence. Section 4.7.2. is renumbered Section
4.3.2.

Section 4.8. Section 4.7.3. is renumbered Section 4.3.3. and amended by (A)
inserting the words or on behalf of immediately following the words Gas
delivered to PSE&G by in the first sentence, (B) deleting the words under the
Transportation Service and substituting therefor the words pursuant to Section
4.2.2. in the first sentence and (C) deleting the word facility and substituting
therefor the words Facility in the last sentence.

Section 4.9. Section 4.8. is renumbered Section 4.4., re-title Scheduling of
Service. and amended as follows:

(A) Section 4.8.1. is renumbered Section 4.4.1. and amended and restated as
follows:

4.4.1. By 10:00 a.m. (Eastern Prevailing Time) on the Business Day immediately
preceding any Gas Day, NJEA will provide notice to PSE&G of (i) the Daily
Nomination Quantity for such Gas Day and (ii) the estimated hourly usage
schedule for such Gas Day.

(B) Section 4.8.2. is renumbered Section 4.4.2. and amended and restated as
follows:

4.4.2. By 6:00 p.m. (Eastern Prevailing Time) on the day immediately preceding
any Gas Day, NJEA will provide notice to PSE&G if NJEA elects to increase or
decrease the Daily Nomination Quantity provided pursuant to Section 4.4.1. The
parties acknowledge that such election is afforded to NJEA to accommodate NJEA's
good faith predictions regarding Facility operations (including, without
limitation, the outcome of the Facility bid) for such Gas Day. Accordingly,
PSE&G shall have the right to reject an election by NJEA pursuant to this
Section 4.4.2. if, in PSE&G's reasonable judgment, NJEA has demonstrated a
frequent abuse of such election by consistently nominating a Daily Nomination
Quantity pursuant to Section 4.4.1. and subsequently altering the amount of such
Daily Nomination Quantity pursuant to this Section 4.4.2. without regard to
Facility operations (including, without limitation, the outcome of the Facility
bid) for such Gas Day. If NJEA elects to increase the Daily Nomination Quantity,
then PSE&G shall use commercially reasonable efforts to obtain the increased
amount of gas.

(C) Section 4.8.3. is deleted.

Section 4.10. A new Section 4.5. entitled Daily and Monthly Imbalances and
Penalties is added to read as follows:

4.5.1. Notwithstanding the Daily Nomination Quantity for any Gas Day, the
quantity of gas reflected in PSE&G's meter data for the Facility for such Gas
Day may vary from such amount and any such variance or imbalance may result in
gas imbalances as described below. Daily gas imbalance charges shall be
calculated as follows:

4.5.1.1. If on any Gas Day the quantity of gas reflected in PSE&G's meter data
for the Facility is less than ninety percent (90%) of the Daily Nomination
Quantity for such Gas Day, then NJEA shall pay PSE&G an amount equal to (i) the
difference between ninety percent (90%) of the Daily Nomination Quantity for
such Gas Day and the quantity of gas reflected in PSE&G's meter data for the
Facility for such Gas Day multiplied by (ii) ten percent (10%) of the Gas Daily
Price. The parties acknowledge that NJEA shall not be obligated to pay the per
dekatherm charge under Section 6.1.1. for any gas that is not reflected in
PSE&G's meter data for the Facility.

4.5.1.2. If on any Gas Day the quantity of gas reflected in PSE&G's meter data
for the Facility is greater than one hundred ten percent (110%) of the Daily
Nomination Quantity for such Gas Day, then NJEA shall pay PSE&G an amount equal
to (i) the difference between the quantity of gas reflected in PSE&G's meter
data for the Facility for such Gas Day and one hundred ten percent (110%) of the
Daily Nomination Quantity for such Gas Day multiplied by (ii) ten percent (10%)
of the Gas Daily Price.

4.5.2. Any amounts payable by NJEA to PSE&G pursuant to application of Sections
4.5.1.1. and 4.5.1.2. shall be added to the amounts payable by NJEA hereunder as
described in Section 6.1.4.

4.5.3. If NJEA is utilizing Redelivery Service due to an interruption pursuant
to Section 7, then NJEA shall deliver (or arrange for delivery of) a quantity of
gas to PSE&G that is sufficient to accommodate the quantity of gas that NJEA is
taking pursuant to Redelivery Service. If NJEA fails to deliver (or arrange for
delivery of) such quantity of gas to PSE&G, then PSE&G may suspend deliveries of
gas to the Facility until such time as the delivery of such quantity of gas to
PSE&G commences.

4.5.4. If at any time NJEA is utilizing gas at the Facility at a rate other than
a uniform hourly rate and PSE&G determines, in its reasonable discretion based
upon good gas industry practices, that the integrity of all or a portion of its
gas distribution system is being jeopardized because of such utilization, or one
of the transporters delivering gas to PSE&G enforces uniform hourly take
restrictions, then PSE&G may limit the amount of gas redelivered to the Facility
each hour to one twenty-fourth (1/24th) of the Daily Nomination Quantity or the
gas NJEA is delivering to PSE&G.

4.5.5. During periods when Sales Service is being utilized or Redelivery Service
pursuant to Section 14.9. is being utilized, if after receiving notice of a
suspension or limitation in accordance with this Agreement NJEA continues to
utilize a quantity of gas which is inconsistent with such suspension or
limitation during the duration of any such suspension or limitation, then NJEA
shall be subject to a penalty equal to ten dollars ($10) per dekatherm
multiplied by the difference between the actual gas utilization by NJEA and the
volume of gas that is allowed for utilization by NJEA consistent with such
suspension or limitation during such time period. During periods when Redelivery
Service due to an interruption pursuant to Section 7 is being utilized or
Extended Gas Service is being utilized, if after receiving notice of a
suspension or limitation in accordance with this Agreement NJEA continues to
utilize a quantity of gas which is inconsistent with such suspension or
limitation during the duration of any such suspension or limitation, NJEA shall
be subject to a penalty equal to twenty-five dollars ($25) per dekatherm
multiplied by the difference between the actual gas utilization by NJEA and the
volume of gas that is allowed for utilization by NJEA consistent with such
suspension or limitation during such time period. In addition to the foregoing
penalties, NJEA shall be responsible for any penalties assessed on or against
PSE&G by an interstate pipeline serving the PSE&G system due to NJEA's refusal
to reduce gas usage after notification or suspension.

4.5.6. Notwithstanding any provision in this Agreement to the contrary, NJEA
shall be excused from accepting gas due to a force majeure pursuant to Article
XIII and the quantity of gas that NJEA does not accept due to force majeure
shall be deemed to have not been included in any Daily Nomination Quantities
relating to the Gas Day on which such force majeure occurs or is continuing. In
addition, the quantity of any gas deliveries that are curtailed, adjusted or
suspended by PSE&G pursuant to this Agreement or that are not delivered to NJEA
due to a PSE&G default shall be deemed to have not been included in any Daily
Nomination Quantity relating to the Gas Day on which such curtailment,
adjustment, suspension or default occurs.

Section 5. Amendments to Article V - Quantities.

Section 5.1. Article V is amended and restated as follows:

Article V - [RESERVED]

Section 6. Amendments to Article VI - Price.

Section 6.1. Section 6.1. is re-titled Sales Service, Extended Gas Service and
Service Charge.

Section 6.2. Section 6.1.1. is amended and restated as follows:

6.1.1. Subject to Sections 4.5. and 6.1.2., the per dekatherm charge to NJEA for
Sales Service for the quantity of gas reflected in PSE&G's meter data for the
Facility on any Gas Day is an amount equal to the Gas Daily Price. Subject to
Sections 4.5. and 6.1.2., the monthly charge to NJEA for Sales Service will be
the sum of the daily quantities of gas reflected in PSE&G's meter data for the
Facility multiplied by the respective Gas Daily Price.

Section 6.3. Section 6.1.2. is amended and restated as follows:

6.1.2. Upon at least ten (10) Business Days' notice to PSE&G before the
beginning of any Month, NJEA may elect to purchase a fixed amount of the Sales
Service gas during such Month at a price equal to the arithmetic average of (i)
the monthly gas "Index Price" published in Inside FERC "Gas Market Report" under
"Market Center Spot-Prices", "Northeast", "Texas Eastern, zone M-3" and (ii) the
monthly gas "Index Price" published in Inside FERC "Gas Market Report" under
"Market Center Spot-Prices", "Northeast", "Transco, zone 6 N.Y.", each published
on or about the fifth Business Day of each month. Upon PSE&G's receipt of such
notice, NJEA shall be obligated to purchase the elected fixed amount of Sales
Service gas at the monthly price described in the preceding sentence at an equal
daily amount for the respective Month. All Sales Service gas purchased in excess
of the elected portion shall be purchased at the Gas Daily Price described in
Section 6.1.1.

Section 6.4. A new Section 6.1.3. is added as follows:

6.1.3. The gas indices described in this Section 6.1. are intended by the
parties to reflect the market price of natural gas delivered to PSE&G at its
city gate interconnection with Transcontinental Gas Pipeline ("Transco") and
Texas Eastern Transmission Corporation ("Texas Eastern"). In the event any index
ceases to be published, ceases to be determined substantially as such index is
determined on the Effective Date or ceases to be representative of the market
price of natural gas delivered to PSE&G at its city gate interconnection with
Transco and Texas Eastern, then the parties shall meet as soon thereafter as
possible to identify a replacement index or indices (as the case may be) with
the intent of such replacement(s) being to represent the market price of natural
gas delivered to PSE&G at its city gate interconnection with Transco and Texas
Eastern.

Section 6.5.

A new Section 6.1.4. is added as follows:

6.1.4. The monthly charge to NJEA for the Sales Service and Extended Gas Service
shall be adjusted to reflect any amount payable by NJEA pursuant to Section 4.5.

Section 6.6. Section 6.2. is deleted in its entirety.

Section 6.7. Section 6.4. Winter-Seasonal Service is deleted in its entirety.
Section 6.5. Redelivery Service is deleted in its entirety. Section 6.6. Charges
for Gas Retained by PSE&G is deleted in its entirety.

Section 6.8. Section 6.3. is renumbered Section 6.2. and amended and restated as
follows:

6.2. The monthly charge to NJEA for Extended Gas Service will be the quantity of
gas reflected in PSE&G's meter data for the Facility under such service
multiplied by the Extended Gas Service Charge.

Section 6.9. A new Section 6.3. is added as follows:

6.3. Service Charge

Commencing on the Effective Date and continuing for the remainder of the term of
this Agreement, NJEA shall pay PSE&G (a) a monthly Service Charge that is a
fixed amount per Month regardless of the amount of gas or service provided by
PSE&G hereunder and (b) a monthly Additional Service Charge as set forth in
Schedule 1 hereto, as applicable.

Section 7. Amendments to Article VII - Interruption of Service.

Section 7.1. Section 7.1. is deleted. Section 7.3. is deleted.

Section 7.2. Section 7.2. is renumbered Section 7.1. and amended and restated as
follows:

7.1. The Sales Service for any Day will be subject to interruption by PSE&G if
PSE&G notifies NJEA that the Mean Daily Temperature Forecast for Newark, New
Jersey (issued within twenty four (24) hours of the notice of interruption and
based on the then most current readings and data) is equal to or less than 22
degrees Fahrenheit. PSE&G will provide NJEA with as much notice as possible but
no less than eight (8) hours notice of any interruption of service to the
Facility pursuant to this Section 7.1. Any deliveries of gas during interruption
of Sales Service pursuant to this Section 7.1. will be delivered by PSE&G to
NJEA under Extended Gas Service pursuant to Section 4.2.1. In no event shall
NJEA have the obligation to obtain or procure gas from any other source in the
event of an interruption to Gas Service pursuant to this Section 7.1.

Section 7.3. Section 7.4. is renumbered Section 7.2. and amended and restated as
follows:

7.2 Extended Gas Service for any Day will be subject to interruption by PSE&G if
PSE&G notifies NJEA that the Mean Daily Temperature Forecast for Newark, New
Jersey (issued within twenty four (24) hours of the notice of interruption and
based on the then most current readings and data) is 14 degrees Fahrenheit or
below. PSE&G will provide NJEA with as much notice as possible but no less than
eight (8) hours notice of any interruption of service to the Facility pursuant
to this Section 7.2. Any deliveries of gas during interruption of Extended Gas
Service pursuant to this Section 7.2. may be replaced with gas delivered by NJEA
to PSE&G and transported and delivered by PSE&G to NJEA pursuant to Redelivery
Service as provided in Section 4.2.2. In no event shall NJEA have the obligation
to obtain or procure replacement gas from any source in the event of an
interruption to Extended Gas Service pursuant to this Section 7.2.

Section 8. Amendments to Article VIII - Facilities.

Section 8.1. Section 8.2. is deleted. Section 8.3. is deleted. Section 8.4. is
deleted. Section 8.5. is deleted.

Section 8.2. Section 8.6. is renumbered Section 8.2. and amended by deleting the
words New Jersey Board of Public Utilities and substituting therefor the word
NJBPU.

Section 9. Amendments to Article IX - Accounting.

Section 9.1. Section 9.1.1(a) is deleted. Section 9.1.1(b) is deleted. Section
9.1.1(f) is deleted. Section 9.1.1(g) is deleted. Section 9.1.1(h) is deleted.

Section 9.2. Section 9.1.1(c) is renumbered Section 9.1.1(a).

Section 9.3. Section 9.1.1(d) is renumbered Section 9.1.1(c) and amended and
restated as follows:

(c) the Service Charge and the Additional Service Charge, as applicable,
determined in accordance with Section 6.3., for the preceding month; plus

Section 9.4. Section 9.1.1(e) is renumbered Section 9.1.1(b) and amended by
deleting the number 6.3 and substituting therefor the number 6.2.

Section 9.5. Section 9.1.1(i) is renumbered Section 9.1.1(d).

Section 9.6. Section 9.1.1(j) is renumbered Section 9.1.1(e).

Section 9.7. Section 9.1.2(a) is deleted. Section 9.1.2(b) is deleted.

Section 9.8. Section 9.1.2(c) is renumbered Section 9.1.2(a).

Section 9.9. Section 9.1.2(d) is renumbered Section 9.1.2(b).

Section 9.10. Section 9.1.5. is amended by: (A) deleting both references to
9.1.1(i) and substituting therefor the number 9.1.1(d) and (B) deleting 10.4 and
substituting therefor the number 10.3.

Section 9.11. Section 9.2. is amended by deleting the words Facility Test Date
and substituting therefor the words Effective Date.

Section 9.12. Section 9.4 is amended by deleting the third sentence in its
entirety and substituting therefor the following: If any such failure to pay
continues for 15 days after written protest by the party to whom such amount is
due, such party may suspend performance under this Agreement and take any action
provided in Section 9.6. upon notice to the other party; provided, however, that
if either party in good faith disputes the amount of any such bill or any part
thereof, and pays to the other party such amount as it concedes to be correct,
and at any time thereafter within 15 days of a demand by the billing party,
furnishes good and sufficient Performance Assurance, guaranteeing payment to the
billing party of the amount ultimately found to be due under such bill after a
final determination, reached either by agreement, arbitration or judgment of a
court, then the billing party will not be able to suspend performance under this
Agreement or seek other action provided in Section 9.6.

Section 9.13. A new Section 9.6. is added to read as follows:

9.6 Performance Assurance

(a) If, on any Business Day, the Exposure of PSE&G exceeds the NJEA Threshold,
PSE&G may demand that NJEA deliver Performance Assurance to PSE&G in an amount
equal to the amount by which such Exposure exceeds the NJEA Threshold (such
amount hereinafter the "Excess Amount"). NJEA grants to PSE&G a first priority
security interest in any and all Performance Assurance held by such other party
from time to time. If, as of any Business Day, the aggregate amount of
Performance Assurance held by PSE&G exceeds the Excess Amount by an amount
greater than $250,000, PSE&G shall return Performance Assurance to NJEA in an
amount such that, after giving effect to any such return, PSE&G holds
Performance Assurance in an amount equal to not more than the sum of the Excess
Amount plus $250,000, provided, however, that if PSE&G's Exposure is less than
the NJEA Threshold, PSE&G shall return all Performance Assurance then held by it
or its designee to NJEA.

(b) The act of posting or returning of Performance Assurance may only be
requested on a Business Day, and the party receiving such request, if obliged to
post or return Performance Assurance pursuant to Section 9.6(a) above, shall
post or return such Performance Assurance by the Transfer Deadline. All deposits
of Performance Assurance shall be rounded up to the nearest integral multiple of
$250,000 and all returns of Performance Assurance shall be rounded down to the
nearest integral multiple of $250,000.

(c) In the event that NJEA fails to post the Performance Assurance pursuant to
this Section 9.6. by the Transfer Deadline, then an event of default shall be
deemed to occur and PSE&G shall be entitled to suspend provision of Sales
Service, Extended Gas Service, and Redelivery Service, as applicable, until such
time that such default has been cured.

(d) In the event that NJEA fails to pay amounts owed to PSE&G under this
Agreement when due, PSE&G may setoff such amounts owed against amounts held by
PSE&G as Performance Assurance and/or PSE&G may proceed to collect on any NJEA
Guarantee(s); provided, however, that with respect to any such setoff, PSE&G
shall provide NJEA with written notification of such setoff, and the obligations
so setoff shall be deemed satisfied and discharged in full for all purposes
under this Agreement.

(e) In the event that PSE&G fails to comply with this Section 9.6. by complying
with a proper request by NJEA pursuant to Section 9.6(a) to return amounts held
by PSE&G as Performance Assurance, NJEA shall be entitled to set off any and all
amounts due and owing under this Agreement against such Performance Assurance;
provided, however, that with respect to any such setoff, NJEA shall provide
PSE&G with written notification of such setoff, and the obligations so setoff
shall be deemed discharged in full for all purposes under this Agreement.

(f) The costs of posting and maintaining Performance Assurance in the form of a
letter of credit shall be borne by NJEA. Performance Assurance held by PSE&G in
the form of cash will accrue interest for the benefit of NJEA at the average
Federal Funds Effective Rate for the period of time the funds are on deposit.
The Federal Funds Effective Rate is published daily on the Federal Reserve
website (http://www.federalreserve.gov/releases/h15/update/). Upon receipt of
NJEA's interest invoice, PSE&G will deliver to NJEA not later than the third
Business Day after such receipt, all such interest accruing in the previous
calendar month, except to the extent that any such transfer would result in
PSE&G being entitled to a call for Performance Assurance from NJEA hereunder.

(g) The credit requirements contained in this Section 9.6. shall continue in
force and effect in the event this Agreement is assigned pursuant to Section
14.5. unless the parties agree otherwise in writing.

Section 10. Amendments to Article X - Term.

Section 10.1. Section 10.1. is amended and restated as follows:

10.1. The term of this Agreement will expire on August 13, 2011. During the Term
of this Agreement, NJEA and PSE&G agree that the Sales Services, Extended Gas
Service and Redelivery Service provided under this Agreement will be the sole
sources of gas supply for the Facility.

Section 10.2. Section 10.1.1. is deleted. Section 10.1.2. is deleted. Section
10.1.3. is deleted. Section 10.2. is deleted.

Section 10.3. Section 10.3. is renumbered Section 10.2. and amended by (A)
deleting the words New Jersey Board of Public Utilities and substituting
therefor the word NJBPU and (B) deleting the number 1.26 and substituting
therefor the number 1.35.

Section 10.4. Section 10.4. is renumbered Section 10.3. and is amended by (A)
deleting the words subject to the limitations specified in subsections a), b),
and c) of this Section 10.4 in the second sentence, (B) deleting all text after
the words tax is applicable will terminate in the third sentence and (C) adding
the following sentence to the end: NJEA agrees that notwithstanding anything
contained herein to the contrary, the Service Charge and the Additional Service
Charge, as applicable, will continue to accrue on a monthly basis and NJEA will
not be excused from paying such amounts due to a termination pursuant to this
Section 10.3. for two (2) years following the effective date of such
termination.

Section 10.5. Section 10.5. is deleted.

Section 11. Amendments to Article XI - Regulatory Approvals.

Section 11.1. Section 11.1. is amended by (A) deleting the word approval in the
second sentence and substituting therefor the word jurisdiction and (B) deleting
the words New Jersey Board of Public Utilities in the first sentence and
substituting therefor the word NJBPU.

Section 11.2. Section 11.1.1. is deleted.

Section 12. Amendments to Article XII - Possession, Title and Warranty.

Section 12.1. Section 12.1. is deleted.

Section 12.2. Section 12.2. is renumbered Section 12.1.

Section 12.3. Section 12.3. is renumbered Section 12.2. and amended by: (A)
adding the word and before the words their successors and assigns in the first
sentence and (B) adding the words and its successors and assigns before the
words harmless from all suits in the second sentence.

Section 13. Amendments to Article XIII - Force Majeure.

Section 13.1. Section 13.1. is amended by (A) deleting the words or NJEA before
the words to acquire gas in (h) and renumbering (h) to (j), (B) renumbering (i)
to (k) and (C) adding a new (h) and (i) to read:

(h) a partial or full interruption in the generating capability of the Facility
due to any unplanned component failure (immediate, delayed, postponed, or
startup failure) or any other condition that requires the applicable unit to be
removed from service, or prevents the unit from going into service, including
(without limitation) (1) any inability to successfully start-up and commence
generation following a period during which the Facility has not been operational
for any reason and (2) any unplanned or planned interruption in the generating
capability of the Facility in order to conduct repair, replacement, maintenance
or diagnostic activity to avoid loss or serious injury or damage to persons or
property that NJEA reasonably expects to occur within ten (10) days after the
beginning of the interruption if the repair, replacement, maintenance or
diagnostic activity is not performed;

(i) the existence of a physical or operational condition and/or the occurrence
of an event on the PSE&G system which in PSE&G's reasonable judgment: (i) is
imminently likely to endanger life or property or (ii) impairs and/or imminently
will impair: (a) PSE&G's ability to discharge its statutory obligation(s) to
provide safe, adequate and proper service to its customers and/or (b) the safety
and/or reliability of PSE&G's system;

Section 13.2. Section 13.2. is amended by adding the following sentence to the
end: NJEA agrees that notwithstanding anything contained herein to the contrary,
the Service Charge and the Additional Service Charge, as applicable, will
continue to accrue on a monthly basis and NJEA will be not be excused from
paying such amounts by reason of a force majeure.

Section 14. Amendments to Article XIV - Miscellaneous.

Section 14.1. Section 14.3. is amended by deleting the words including, without
limitation of the foregoing, the Precedent Agreement between the parties.

Section 14.2. Section 14.5.1(c) deleted.

Section 14.3. A new Section 14.5.1(c) is added to read as follows:

(c) NJEA, its successor or permitted assignee may assign any of its rights,
titles and interests hereunder to existing and future lenders secured, in whole
or in part, by interests in the Facility or NJEA or affiliates of NJEA; and

Section 14.4.

A new Section 14.5.6. is added to read as follows:

14.5.6. An entity that assumes the obligations of the assigning party in Section
14.5.1(a) or (d) shall be required to satisfy the reasonable credit standards of
the non-assigning party before the assignment may become effective.

Section 14.5. Section 14.6. is amended by adding the words demands for posting
or other correspondence related to Performance Assurance pursuant to Section
9.6., before the words written notices and invoices. NJEA's address in Section
14.6. is amended and restated as follows:

To NJEA:

North Jersey Energy Associates, A Limited Partnership
c/o Northeast Energy, LP
c/o ESI Northeast Energy GP, Inc., Its General Partner
700 Universe Blvd.
P.O. Box 14000
Juno Beach, FL 33408
Attention: Business Manager
Facsimile: (561) 304-5161

Section 14.6. PSE&G's address in Section 14.6. is amended and restated as
follows:

To PSE&G:

Public Service Electric & Gas Company
80 Park Plaza
PO Box 570-14
Newark, New Jersey 07107
Attention: Peter Collette
Facsimile: (973) 430-5519

Section 14.7. Section 14.7. is amended by (A) deleting the words pipeline rate
schedule, after the words event that a and (B) deleting the words rate schedule,
after the words upon a replacement.

Section 14.8.

A new Section 14.9. is added to read as follows:

Redelivery Service Due to PSE&G Default

14.9. Upon the occurrence of any default by PSE&G in the performance of its
Sales Service and Extended Gas Service obligations hereunder, NJEA shall be
entitled to mitigate its damages resulting therefrom by obtaining gas from a
third party and causing such gas to be delivered to PSE&G at any location where
PSE&G is authorized to receive gas deliveries (subject to capacity availability
and PSE&G's ability to receive gas at such point(s) at that time) and PSE&G
shall transport and deliver such gas utilizing Redelivery Service. All
quantities of gas obtained by NJEA from third parties pursuant to this Section
14.9. shall not be included in the calculation of the total volumes of gas NJEA
utilizes for purposes of calculating any applicable Additional Service Charge.

Section 15. Miscellaneous.

(a) Capitalized terms used herein not otherwise defined in this Amendment shall
have the meaning ascribed to them in the Gas Purchase Agreement.

(b) This Amendment contains the entire agreement and understanding between PSE&G
and NJEA as to the subject matter of this Amendment and supersedes all prior
agreements, representations and discussions between them concerning the subject
matter of this Amendment. PSE&G and NJEA each represents and warrants to the
other that in entering into this Amendment, it has not relied on any promise,
inducement, representation, warranty, agreement or statement not set forth in
this Amendment.

(c) After the Effective Date and upon the request of either Party, the Parties
shall use reasonable and good faith efforts to agree upon, execute and deliver a
consolidated Amended and Restated Gas Purchase Agreement reflecting the terms of
the Gas Purchase Agreement as amended by this Amendment.

(d) The Parties hereby acknowledge and agree that any conflicts or disputes
arising between them with respect to the Gas Purchase Agreement relating to (1)
events or circumstances occurring prior to the Effective Date shall be resolved
by reference to the provisions of the Gas Purchase Agreement as in effect prior
to the Effective Date and without reference to this Amendment or (2) events or
circumstances occurring on or after the Effective Date shall be resolved by
reference to the provisions of the Gas Purchase Agreement as amended by this
Amendment, in each case irrespective of when the claim related thereto is first
asserted.

(e) This Amendment may not be altered or modified by either PSE&G or NJEA except
by instrument in writing executed by both of them.

(f) PSE&G and NJEA each represents and warrants to the other that the person who
signs below on its behalf has authority to execute this Amendment on its behalf
without the further concurrence or approval of any person, entity or court, and
that all requisite approvals to enter into, and bind PSE&G and NJEA, as
applicable, to this Amendment have been obtained as of the date of such
execution on behalf of such Party.

(g) This Amendment may be executed in counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the same
agreement.

IN WITNESS WHEREOF the parties have caused this Amendment to be executed by
their duly authorized officers or agents, as applicable, as of the day and year
first above written.

 

PUBLIC SERVICE ELECTRIC AND GAS COMPANY

 

By:

FREDERICK W. LARK

   

Name: Frederick W. Lark
Title: Vice President - Business Analysis

 

NORTH JERSEY ENERGY ASSOCIATES,
A LIMITED PARTNERSHIP

 

By:  Northeast Energy, LP, its general partner

 

By:  ESI Northeast Energy GP, Inc., Its
       administrative general partner

 

By:

NATHAN E. HANSON

   

Nathan E. Hanson
Director

 

 

EXHIBIT 1

TRANSPORTATION AND STORAGE CONTRACTS

1.

Firm Transportation Service Agreement dated as of February 28, 1994, by and
between CNG Transmission Corporation, a Delaware Corporation, (now Dominion
Transmission Corporation) and NJEA.

2.

Service Agreement Applicable to the Storage of Natural Gas under Rate Schedule
GSS dated as of September 30, 1993 and amended November 1, 1998, by and between
CNG Transmission Corporation, a Delaware corporation, (now Dominion Transmission
Corporation) and NJEA.

3.

Service Agreement Applicable to the Transportation of Natural Gas under Rate
Schedule FT-GSS dated as of September 30, 1993 and amended November 1, 1998, by
and between CNG Transmission Corporation, a Delaware corporation, (now Dominion
Transmission Corporation) and NJEA.

4.

Service Agreement for Rate Schedule FTS-5 dated February 16, 1994, by and
between Texas Eastern Transmission Corporation, a Delaware corporation, and
NJEA.

5.

Firm Transportation Service Agreement dated as of February 1, 2003, by and
between Transcontinental Gas Pipe Line Corporation, a Delaware Corporation, and
NJEA.

 

 

SCHEDULE 1

ADDITIONAL SERVICE CHARGE

The Additional Service Charge shall be calculated as follows:

OVERAGE

 

ADDITIONAL SERVICE CHARGE

Volumes of gas NJEA utilizes above 6 bcf/year but less than or equal to 10
bcf/year pursuant to:

 

$60,000/Month

-

Sales Service

   

-

Extended Gas Service and/or

   

-

Redelivery Service due to an interruption pursuant to Section 7

   

Volumes of gas NJEA utilizes above 10 bcf/year pursuant to:

 

$100,000/Month

-

Sales Service

   

-

Extended Gas Service and/or

   

-

Redelivery Service due to an interruption pursuant to Section 7