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                  DEFERRED COMPENSATION AGREEMENT

     THIS AGREEMENT, made as of November 30, 1993, by and between

ENERGYNORTH, INC. ("ENI") a New Hampshire corporation with a

principal place of business in Manchester, New Hampshire, and

Richard P. Demers of Manchester, New Hampshire ("Employee").

                                   W I T N E S S E T H

     WHEREAS, Employee is employed by ENI in an executive position

and performs valuable services to ENI in such position; and

     WHEREAS, Employee possesses great ability in the gas

distribution business, an intimate knowledge of ENI, its operating

methods, personnel and goals; and

     WHEREAS, ENI desires further to compensate Employee for past

services, to secure Employee's future services, to secure

Employee's commitment to furnish advisory services to ENI following

Employee's termination of employment by ENI and to compensate

Employee therefor;

     NOW, THEREFORE, ENI and Employee mutually agree as follows:

     1.   ENI agrees to continue to employ Employee and Employee

agrees to continue to serve ENI devoting Employee's normal

working time to the interests and activities of ENI in the

capacity of Vice President, or such other capacity as the Board

of Directors of ENI from time to time may assign for the period

agreed between Employee and ENI.

      2.  During the term of Employee's employment,

Employee shall devote substantially all of Employee's time,

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attention, skill and efforts to the performance of Employee's

duties for ENI.

      3.  ENI shall pay Employee during the term of Employee's

employment such salary as the Board of Directors shall from time to time

determine, together with the deferred compensation

payable as provided in paragraph 4 below.

      4.       (a)  ENI, on the last day of each month, commencing as of 

           January 1994, shall credit to a book reserve (the "Deferred 

           Compensation Account" or the "Account") in Employee's name 

           established for this purpose, the amount stated on the Deferred 

           Compensation Election Form; the amounts credited under 

           this Section 4(a) shall continue to be credited monthly during the 

           continuance of the Employee's employment hereunder.

                In addition, EnergyNorth, Inc. shall credit to the account a

           percentage or an amount of any cash incentive award paid to Employee

           pursuant to the EnergyNorth, Inc. Key Employee Performance and 

           Equity Incentive Plan earned in connection with the 1994 Plan Year 

           and subsequent Plan Years.

           a.     ENI shall credit to the Deferred Compensation Account at the 

               end of each month during which any balance remains in the 

               Account, whether before or after payments from the Account 

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               have commenced, an amount which shall be the equivalent of 

               interest on the amounts credited to the Account throughout the

               previous month computed at the prime rate reported by the Wall

               Street Journal or, in its absence, an equivalent publication,

               on the last day of each month; provided, however, the rate 

               shall not be less than eight percent (8%) or greater than 

               fifteen percent (15%).

                   (b)  In addition, ENI shall pay to Employee, monthly over

               the same period as specified in Section 6 below, an additional

               amount of money equal to the monthly increase in the qualified 

               pension plan benefits to which Employee would then have been 

               entitled had the amount that was credited to the Deferred

               Compensation Account under Section 4(a) above been paid to 

               Employee and had it qualified as "earnings" as defined in 

               ENI's qualified pension plan.  Such additional payment shall 

               be payable only to the extent that such deferred compensation

               hereunder does not qualify as "earnings" under ENI's qualified 

               pension plan and shall be payable only to the extent Employee

               would otherwise have received greater pension benefits from 

               ENI's qualified pension plan.  Such payments shall commence at

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               the same time as the other payments hereunder.  The amount due 

               shall be computed actuarially using the same assumptions as used 

               in the qualified pension plan.

                    (c)   ENI is not required to fund this Agreement in any 

               way, but if it chooses to set aside funds for the Account, any

               such funds may be kept in cash, or invested in

               mutual funds, stocks, bonds, securities, or any other assets as

               may be selected by the Board of Directors, in its discretion,

               and also may be utilized by ENI from time to time for any other

               purpose.  Title to and beneficial ownership of any funds,

               whether cash or investments, which ENI may earmark to pay the

               contingent deferred compensation obligation hereunder, at all

               times shall remain in ENI, and the Employee and Employee's

               designated beneficiary shall not have any property interest

               whatsoever in any such funds or in any specific assets of ENI.

     5.  Employee may change the amounts of Employee's salary to

be deferred under Section 4(a) above for the ensuing calendar

year by filing in writing with the Board of Directors of ENI


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not less than thirty (30) days prior to the end of the prior

calendar year, the amount of Employee's salary not yet earned

or paid that is to be deferred and credited to Employee's

Deferred Compensation Account.  Employee may change the amounts

of Employee's Cash Incentive Award to be deferred under Section

4(a) above for ensuing plan years by filing in writing with the

Board of Directors of ENI not less than thirty (30) days prior

to the end of that Plan year, the percentage or amount of

Employee's cash incentive award not yet paid that is to be

deferred and credited to the Employee's Deferred Compensation

Account.

     6.  The benefits to be paid as deferred compensation are as follows:

              (a)  If the Employee's employment hereunder is terminated on or

         after the Employee shall have reached the age of 65, ENI shall pay 

         to Employee in 15 annual installments the amount in Employee's 

         Deferred Compensation Account as of such date together with the 

         interest added pursuant to Section 4(b).  The Account shall be 

         valued as of the date the first payment is to be made, one fifteenth

         (1/15th) of that amount shall be paid in the first year and

         that same amount shall be paid in the succeeding fourteen (14)

         years.  In addition, in each of the succeeding fourteen (14)

         years, any interest credited to the Account with respect to the

         previous year shall be paid with each annual payment.  If the

         Employee should die on or after Employee's 65th birthday and

         before the 15 annual payments are made, the unpaid balance will

         continue to be paid in installments for the unexpired portion
 
         of such 15 year period to Employee's designated beneficiary in

         the same amount as set forth above.


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              (b)   If the Employee's employment by ENI is terminated for any

         reason other than death and disability but before the Employee shall

         have reached the age of 65, no payments shall be made until the 

         Employee shall have reached the age of 65 at which time payments 

         shall be made in the same manner and to the same extent as set forth in

         Section 6(a) above. Notwithstanding the foregoing, if prior to reaching

         age 65 the Employee should die, or if prior to reaching age 65

         Employee should become disabled, then payments shall be made in

         the same manner and to the same extent as set forth in Section 6(c),

         below.

              (c)   If the Employee's employment is terminated because of 

         disability or death before the Employee has reached the age of 65 

         and while in the employ of ENI, then ENI, during Employee's 

         disability, shall make annual payments not to exceed fifteen (15) to

         the Employee or, in the event of Employee's death, make fifteen (15) 

         annual payments to Employee's designated beneficiary, all in the same 

         manner and to the same extent as provided herein.

              (d)   If both the Employee and Employee's designated 

         beneficiary should die before a total of fifteen (15) annual 

         payments are made by ENI, then the remaining amount in the

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         Deferred Compensation Account shall be determined as of the date

         of the death of the designated beneficiary and shall be paid, with

         interest accrued to the date of payment, as promptly as possible

         in one lump sum to the Employee's estate.

              (e)   The designated beneficiary (which may include alternate 

         beneficiaries) referred to in this paragraph may be designated or 

         changed by the Employee (without the consent of any prior 

         beneficiary) on a form provided by ENI and delivered by Employee to

         ENI before Employee's death.  If no such beneficiary shall have been

         designated, or if no designated beneficiary shall survive the 

         Employee, the installment payments payable under this paragraph shall 

         be payable to the Employee's estate.

             (f)   For purposes of Section 6(c) above, disability is defined 

         as provided in any long-term disability plan of ENI covering 

         Employee, or, if none, as defined under the EnergyNorth Inc. 

         Retirement Plan for Salaried Employees.

             (g)   The installment payments to be made to the Employee under

         Sections 6(a) and 6(c) above shall commence on the first day of the

         month next following the date of the termination of Employee's 

         employment, and the installment payments to be made to the 

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         Employee under Section 6(b) above shall commence on the first day of

         the month next following the date on which Employee shall have 

         reached the age of 65.  The installment payments to be made to the 

         designated beneficiary under the provisions of this Section 6 shall

         commence on a date to be selected by ENI but within six months from

         the date of death of the Employee.

              (h)   Notwithstanding anything herein contained to the 

         contrary, the Board shall have the right, with the written

         consent of Employee, to vary the manner and time of making the

         installment distributions provided in this paragraph and may make

         such distributions in lump sums or over a shorter period of time

         than 15 years as it may find appropriate, but not over a longer

         period of time than fifteen (15) years or less frequently then

         once per year.

              (i)   The Board may, in its sole discretion, permit a 

         withdrawal of funds from a Participant's Account to meet a severe 

         financial hardship to the Participant resulting from a sudden and 

         unexpected illness or accident of the Participant or of a dependent

         of the Participant, loss of the Participant's property due to 

         casualty, or other similar extraordinary and unforeseeable 

         circumstances arising as a result of events beyond the control of 

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         the Participant (an "Unforeseen Emergency") at such time and under 

         such circumstances as deemed by the Board to be an Unforeseen 

         Emergency.  Distribution of funds from the Participant's Account 

         shall be in an amount sufficient only to meet the Unforeseen Emergency

         presented by the Participant to the Board, and under no 

         circumstances may a participant's withdrawal of funds exceed 

         the amount required to satisfy the Unforeseen Emergency.

     7.  Employee is accorded the right by this Agreement to

defer receipt of compensation and earnings that, but for the

Employee's election, would be paid currently.  The right to receive

payment of the amounts accrued shall vest absolutely and become

nonforfeitable on the crediting of such amount at the end of each

month.  The obligation of ENI to make the payments shall not be excused

by any breach of this Agreement or of any other agreement between

Employee and ENI.

     8.  Nothing contained in this Agreement and no action taken

pursuant to the provisions of this Agreement shall create or be

construed to create a trust of any kind, or a fiduciary

relationship between ENI and the Employee, Employee's designated

beneficiary or any other person.  Any funds that may be invested

under the provision of this Agreement shall continue for all

purposes to be part of the general funds of ENI and no person other

than ENI shall by virtue of the provisions of this Agreement have

any interest in such funds.  To the extent that any person acquires

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a right to receive payments from ENI under this Agreement, such

right shall be no greater than the right of any unsecured general

creditor of ENI.

     9.  The right of the Employee or any other person to the

payment of deferred compensation or other benefits under this

Agreement shall not be assigned, transferred, pledged or encumbered

except by will or by the laws of descent and distribution.

     10.  If the Board shall find that any person to whom any

payment is payable under this Agreement is unable to care for his or

her affairs because of illness or accident, or is a minor, any

payment due (unless a prior claim therefore shall have been made by

a duly appointed guardian, committee or other legal representative)

may be paid to the spouse, a child, a parent, or a brother or

sister, or to any person deemed by the Board to have incurred

expense for such person otherwise entitled to payment, in such

manner and proportions as the Board may determine.  Any such payment

shall be a complete discharge of the liabilities of

ENI under this Agreement.

     11.  Nothing contained herein shall be construed as

conferring upon the Employee the right to continue in the employ

of ENI other than as stated in Section 1; provided, however, this

Agreement shall be construed to be consistent with an employment

agreement entered into between Employee and ENI.

     12.  Any deferred compensation payable under this Agreement

shall be deemed salary or other compensation to the Employee for

the purpose of computing benefits to which the Employee may be

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entitled under any pension plan, life insurance plan, or other

arrangement of ENI for the benefit of its employees, to the extent

allowable under the Internal Revenue Code or other applicable laws

and regulations, and the other plans and arrangements; provided,

however, the payments under Section 4(c) shall be made only to the

extent the deferred compensation may not be deemed salary or

"earnings" or other compensation under the qualified pension plan.

     13.  This Deferred Compensation Agreement constitutes the

entire agreement between the Employee and ENI with respect to its

subject matter and supercedes all previous agreements with respect

to such subject matter.

     14.  This Agreement shall be binding upon and inure to the

benefit of ENI, its successors and assigns, and Employee and

Employee's heirs, executors, administrators and legal

representatives.

     IN WITNESS WHEREOF, ENI has caused this Agreement to be

executed and its seal to be affixed hereto by its agent thereunto

duly authorized, and Employee has signed this Agreement, all as of

the day and year first above written.





                              /s/ Richard. P Demers
                              Richard P. Demers



                              ENERGYNORTH, INC.

                         By:  /s/ Robert R. Giordano
                              Robert R. Giordano
     
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             AMENDMENT TO DEFERRED COMPENSATION
                        AGREEMENT
                  
                  
                  
     Amendment, dated as of October 1, 1996, to Deferred Compensation
Agreement dated as of November 30, 1993, ("Agreement") by and between
Richard P. Demers ("Employee") and ENERGYNORTH, INC. ("Company" or
"ENI").


     1.  Recitals.  The Employee and ENI are parties to the Agreement, and each 
of them desires to amend the Agreement to modify the rate of interest at 
which additional sums are credited to the Deferred Compensation Account as 
defined in the Agreement.

     2.  Amendment.  The Employee and ENI hereby agree to amend Section
4(a)a. by deleting it in its entirety and replacing it with the following:

       a. ENI shall credit to the Deferred Compensation Account at the
end of each month during which any balance remains in the Account, whether
before or after payments from the Account have commenced, an amount which 
shall be the equivalent of interest on the amounts credited to the Account 
throughout the previous month computed at ENI's overall embedded
cost of long-term debt, plus 50 basis points, on the last day of the
preceding fiscal year of ENI; provided, however, the rate shall not be less 
than nine percent (9%) or greater than sixteen percent (16%).

     3.   Confirmation.  Except as amended by this Amendment, the
provisions of the Agreement are ratified and confirmed and shall
remain in full force.


                                       ENERGYNORTH, INC.


                                     By: /s/ Robert R. Giordano
                                        Robert R. Giordano,
                                        duly authorized


                                       EMPLOYEE


                                    By: /s/ Richard P. Demers
                                        Richard P. Demers