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                         AMENDMENT NO. 2

                               TO

                PENNSYLVANIA POWER & LIGHT COMPANY

                   INCENTIVE COMPENSATION PLAN

	WHEREAS, Pennsylvania Power & Light Company ("Company") has 
adopted the Pennsylvania Power & Light Company Incentive Compen-
sation Plan ("Plan") effective January 1, 1987; and
	WHEREAS, the Plan was amended and restated effective July 1, 
1992, and subsequently amended by Amendment No. 1; and
	WHEREAS, the Company desires to further amend the Plan;
	NOW, THEREFORE, the Plan is hereby amended as follows:
  I.   Effective January 1, 1996, the following sections are 
amended to read:
SECTION 1.  PURPOSE OF THE PLAN. 

	The purpose of the Incentive Compensation Plan (the "Plan") 
is to provide a method whereby officers and other key employees 
of Pennsylvania Power & Light Company (the "Company") and Affili-
ated Companies may be awarded additional remuneration for per-
formance in meeting specific Company objectives in a form that 
increases their ownership interest and encourages them to remain 
in the employ of the Company or an Affiliated Company.

SECTION 2.  DEFINITIONS.

	"Affiliated Company" or "Affiliated Companies" shall mean 
any parent or subsidiaries of the Company (or companies under 
common control with the Company) which are members of the same 
controlled group of corporations (within the meaning of Section 
1563(a) of the Code) as the Company.

	"Cause" for termination by the Company or an Affiliated 
Company of Participant's employment means (i) the willful and 
continued failure by Participant to substantially perform Partic-
ipant's duties with the Company or an Affiliated Company (other 
than any such failure resulting from Participant's incapacity due 
to physical or mental illness) after a written demand for sub-
stantial performance is delivered to Participant by the Board of 
Directors of PP&L, which demand specifically identifies the man-
ner in which the Board of Directors of PP&L believes that Par-
ticipant has not substantially performed Participant's duties, or 
(ii) the willful engaging by Participant in conduct which is 
demonstrably and materially injurious to the Company or an Affil-
iated Company, monetarily or otherwise.  For purposes of clauses 
(i) and (ii) of this definition, no act or failure to act, on 
Participant's part shall be deemed "willful" unless done, or 
omitted to be done, by Participant not in good faith and without 
reasonable belief that Participant's act, or failure to act, was 
in the best interest of the Company or an Affiliated Company.  In 
no event shall the termination of employment of any Participant 
be deemed to have been for Cause unless a copy of a resolution 
duly adopted by the affirmative vote of not less than three quar-
ters (3/4) of the entire membership of the Board of Directors of 
PP&L at a meeting of the Board of Directors of PP&L which was 
called and held for the purpose of considering such termination 
(after reasonable notice to Participant and an opportunity for 
Participant, together with Participant's counsel, to be heard 
before the Board of Directors of PP&L) that, in the good faith 
opinion of the Board of Directors of PP&L, Participant was guilty 
of conduct set forth in clauses (i) or (ii) of this definition, 
and specifying the particulars thereof in detail, is delivered to 
the executive. 

	If at the time of determination, Participant is employed by 
an Affiliated Company, for purposes of this definition, the board 
of directors of such Affiliated Company shall be substituted for 
the Board of Directors of PP&L.

	"Change in Control" means the occurrence of any one of the 
following events:  (a) any change in the control of Resources of 
a nature that would be required to be reported in response to 
Item 1(a) of Form 8-K under the Securities Exchange Act of 1934, 
as amended (the "Exchange Act"); (b) during any period of not 
more than two consecutive years, individuals who at the beginning 
of such period constitute the Board and any new director (other 
than a director designated by a Person who has entered into an 
agreement with Resources to effect a transaction described in 
clause (a), (c) or (d) of this paragraph) whose election by the 
Board or nomination for election by Resources' shareowners was 
approved or recommended by a vote of at least two-thirds (2/3) of 
the directors then still in office who either were directors at 
the beginning of the period or whose election or nomination for 
election was previously so approved or recommended, cease for any 
reason to constitute at least a majority thereof; (c) any Person 
becomes the beneficial owner, directly or indirectly, of securi-
ties of Resources representing 20% or more of the combined voting 
power of Resources' then outstanding securities entitled to vote 
generally in the election of directors; (d) the approval by the 
shareowners of Resources of any merger or consolidation of Re-
sources with any other corporation or a plan of complete liquida-
tion of Resources or the sale or other disposition of all or 
substantially all of the assets of Resources to any other person 
or persons unless, after giving effect thereto, (1) holders of 
Resources' then outstanding securities entitled to vote generally 
in the election of directors will own a majority of the outstand-
ing stock entitled to vote generally in the election of directors 
of the continuing, surviving or transferee corporation or any 
parent (within the meaning of Rule 12b-2 under the Exchange Act) 
thereof and (2) the incumbent members of the Board as constituted 
immediately prior thereto shall constitute at least a majority of 
the directors of the continuing, surviving or transferee corpora-
tion and any parent thereof; or (e) the Board adopts a resolution 
to the effect that a "Change in Control" has occurred or is an-
ticipated to occur.

	"Eligible Employee" means any person employed by the Compa-
ny, or an Affiliated Company on a regularly scheduled basis dur-
ing any portion of a period for which an Award is made and who 
satisfies all of the requirements of Section 6.

	"Fair Market Value" means the average of the high and low 
sale prices of the Common Stock in regular way New York Stock 
Exchange Composite Transactions on the day immediately preceding 
the date as of which Fair Market Value is being determined or, if 
no Common Stock is traded on the date immediately preceding the 
date as of which Fair Market Value is being determined, Fair 
Market Value shall be the average of the high and low sale prices 
of the Common Stock in regular way New York Stock Exchange Com-
posite Transactions on the next preceding day on which the Common 
Stock was traded.

	"Good Reason" for termination of Participant's employment 
with the Company or an Affiliated Company by such Participant 
means the occurrence (without Participant's express written con-
sent) of any one of the following acts by the Company or an 
Affiliated Company:

	     (a)  the assignment to Participant of any duties incon-
sistent with Participant's status as an executive officer or 
key employee of the Company or an Affiliated Company or a 
substantial adverse alteration in the nature or status of 
Participant's responsibilities from those in effect imme-
diately prior to a Change in Control;

	     (b)  a reduction by the Company or Affiliated Company 
of Participant's annual base salary as in effect on the 
Effective Date of this restated Plan, or as the same may be 
increased from time to time;

	     (c)  the relocation of the Participant's principal work 
location to a location more than 30 miles from such work 
location immediately prior to a Change in Control;

	     (d)  the failure by the Company or Affiliated Company 
to pay to Participant any portion of Participant's current 
compensation or to pay to Participant any portion of an in-
stallment of deferred compensation under any deferred com-
pensation program of the Company or Affiliated Company, 
within seven (7) days of the date such compensation is due;

	     (e)  the failure by the Company or Affiliated Company 
to continue in effect any compensation or benefit plan in 
which Participant participates immediately prior to a Change 
in Control which is material to Participant's total com-
pensation, or any substitute plans adopted prior to a Change 
in Control, unless an equitable arrangement (embodied in an 
ongoing substitute or alternative plan) has been made with 
respect to such plan, or the failure by the Company or 
Affiliated Company to continue Participant's participation 
therein (or in such substitute or alternative plan) on a 
basis not materially less favorable, both in terms of the 
amount of benefits provided and the level of Participant's 
participation relative to other participants, as existed at 
the time of a Change in Control, or

	     (f)  the failure by the Company or Affiliated Company 
to continue to provide Participant with benefits substan-
tially similar to those enjoyed by Participant under any of 
the Company's or Affiliated Company's pension, retirement, 
savings, life insurance, medical, health and accident, or 
disability plans in which Participant was participating 
immediately prior to a Change in Control, the taking of any 
action by the Company or Affiliated Company which would 
directly or indirectly materially reduce any of such bene-
fits or deprive Participant of any material fringe benefit 
enjoyed by Participant immediately prior to a Change in 
Control, or the failure by the Company or Affiliated Company 
to provide Participant with the number of paid vacation days 
to which Participant is entitled on the basis of years of 
service with the Company or Affiliated Company in accordance 
with the Company's or Affiliated Company's normal vacation 
policy in effect immediately prior to a Change in Control.

	     Participant's right to terminate his or her employment 
with the Company or Affiliated Company for Good Reason shall 
not be affected by Participant's incapacity due to physical 
or mental illness.  Participant's continued employment shall 
not constitute consent to, or a waiver of rights with 
respect to, any act or failure to act constituting Good 
Reason hereunder.

	"Termination" means resignation or discharge from employment 
with the Company and all Affiliated Companies except in the event 
of death, Disability or Retirement.

SECTION 6.  ELIGIBILITY. 

	Officers and other key employees of the Company or an 
Affiliated Company (including officers or employees who are 
members of the Board or the Board of Directors of the Company 
and/or any Affiliated Company, but excluding directors who are 
not officers or employees) who, in the opinion of the Committee, 
are mainly responsible for the continued growth, development and 
financial success of the Company or an Affiliated Company shall 
be eligible to be granted Awards under the Plan.  Subject to the 
provisions of the Plan, the Committee shall from time to time 
select from such eligible persons those to whom Awards shall be 
granted and determine the amount of such Award.  No officer or 
employee of the Company or an Affiliated Company shall have any 
right to be granted an Award under the Plan. 

SECTION 7.  RESTRICTED STOCK. 

	C.  Forfeiture or Payout of Award.  Restricted Stock Awards 
are subject to forfeiture or payout (i.e., removal of restric-
tions) as follows:

	(i)  Termination - the Restricted Stock Award will be com-
pletely forfeited, provided, however, that the Restriction Period 
shall be eliminated and the entire Restricted Stock Award will be 
paid to a Participant whose employment with the Company or an 
Affiliated Company is terminated either (A) by the Company or an 
Affiliated Company for any reason other than for Cause or 
Disability, or (B) by Participant for Good Reason, in either case 
within three (3) years following a Change in Control.  
Participant's employment shall be deemed to have been terminated 
following a Change in Control without Cause or by Participant for 
Good Reason if Participant's employment is terminated prior to a 
Change in Control without Cause at the direction of a Person who 
has entered into an agreement with Resources the consummation of 
which will constitute a Change in Control or if Participant 
terminated his employment with Good Reason prior to a Change in 
Control (determined by treating a Potential Change in Control as 
a Change in Control in applying the definition of Good Reason) if 
the circumstance or event which constitutes Good Reason occurs at 
the direction of such Person.

	(ii)  Retirement - payout of the Restricted Stock Award will 
be prorated for service during the restriction period.

	(iii)  Early Retirement - payout of the Restricted Stock 
Award will be prorated for service during the restriction period.

	(iv)  Disability - payout of the Restricted Stock Award will 
be prorated as if the Participant had maintained active employ-
ment until the Normal Retirement Date.

	(v)  Death - payout of the Restricted Stock Award will be 
prorated as if the Participant had maintained active employment 
until the Normal Retirement Date.

	In any instance where payout of a Restricted Stock Award is 
to be prorated, the Committee may choose to provide the Partici-
pant (or the Participant's estate) with the entire Award rather 
than the prorated portion thereof.

	Any Restricted Stock which is forfeited will be transferred 
to Resources.

SECTION 10.  MISCELLANEOUS PROVISIONS. 

	B.  No Employment Right.  Neither this Plan nor any action 
taken hereunder shall be construed as giving any right to be 
retained as an employee of the Company or any Affiliated Company.

	C.  Tax Withholding.  Participants may be required to pay to 
the Company or an Affiliated Company the amount of any Federal, 
state or local taxes which the Company or an Affiliated Company 
is required to withhold with respect to an Award.  At the request 
of a Participant, or as required by law, such sums as may be 
required for the payment of any estimated or accrued income tax 
liability may be withheld by the Company or an Affiliated Company 
and paid over to the governmental entity entitled to receive the 
same.  The Committee, in its sole discretion, may permit a 
Participant to satisfy all or part of such Participant's 
withholding tax obligation incident to the vesting of Restricted 
Stock by having the Company or an Affiliated Company withhold a 
portion of the shares of Restricted Stock that otherwise would be 
issued to the Participant.  Such shares shall be valued at their 
Fair Market Value on the date when taxes otherwise would be 
withheld in cash.  The payment of withholding taxes by 
surrendering shares to the Company or an Affiliated Company, if 
permitted by the Committee, shall be subject to such restrictions 
as the Committee may impose, including any restrictions required 
by the rules of the Securities and Exchange Commission.

 II. Except as provided for in this Amendment No. 2, all other 
provisions of the Plan shall remain in full force and 
effect.
	IN WITNESS WHEREOF, this Amendment No. 2 is executed this 
3rd day of June, 1996.
                               PENNSYLVANIA POWER & LIGHT COMPANY



                               By:/s/ John M. Chappelear_________
                                  John M. Chappelear
                                  Chairman
                                  Employee Benefit Plan Board