ENERGYNORTH, INC.
                   1998 STOCK OPTION PLAN
     
     
1.        Purposes

     The purposes of the 1998 Stock Option Plan (the "Plan") are
to encourage eligible officers, directors, and employees of
EnergyNorth, Inc. (the "Company") and its Subsidiaries to
increase their efforts to make the Company and each Subsidiary
more successful, to provide an additional inducement for such
individuals to remain with the Company or a Subsidiary, to reward
such individuals by providing the opportunity to acquire the
Common Stock, $1.00 par value, of the Company (the "Common
Stock") on favorable terms, and to provide a means through which
the Company may attract able persons to enter the employ of the
Company or its Subsidiaries.

2.   Administration

     The Plan shall be administered by the Compensation Committee
of the Board of Directors of the Company (the "Compensation
Committee"), so long as it is comprised of two or more non-
employee Directors, provided that no option shall be granted
without the approval of the Board of Directors.
     
     The Committee shall interpret the Plan and prescribe such
rules, regulations, and procedures in connection with the Plan as
it shall deem to be necessary or advisable for the administration
of the Plan consistent with the purposes of the Plan.  The
Committee shall keep records of actions taken at its meetings.
     
3.  Eligibility

     Officers, and directors, of the Company or any Subsidiary
and those employees ("Key Employees") of the Company  or any
Subsidiary who share the primary responsibility for the
management, growth, or protection of the business of the Company
or any Subsidiary shall be eligible to receive stock options as
described herein. Only Key Employees shall be eligible to receive
incentive stock options.
     
     Subject to the provisions of the Plan and the approval of
the Board of Directors, the Committee shall have authority to
grant stock options as described herein and, in its discretion,
to determine the individuals to whom stock options shall be
granted (an "Optionee") and the number of shares to be covered by
each stock option.  In determining the eligibility of any
individual, as well as in determining the number of shares
covered by each stock option, the Committee shall consider the
position and the responsibilities of the individual being
considered, the nature and value to the Company or a Subsidiary
of his or her services, his or her present and/or potential
contribution to the success of the Company or a Subsidiary, and
such other factors as the Committee may deem relevant.

4.   Shares Available for Stock Options

     The aggregate number of shares of the Common Stock which may
be issued or delivered under the Plan is 200,000 shares, subject
to adjustment and acceleration as set forth in Section 7.  If any
stock option granted under the Plan is canceled in full or
expires before exercise, the shares subject to such stock option
shall again be available for the purposes of the Plan.
     
5.   Grant of Stock Options

     The Committee shall have the authority, in its discretion,
to grant "incentive stock options" pursuant to Section 422 of the
Internal Revenue Code of 1986, as the same may from time to time be

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amended, (the "Code") and to grant "nonstatutory stock
options" (stock options which do not qualify under Section 422 of
the Code).  The aggregate fair market value, determined as of the
date of grant and as set forth in Section 6.G., of all shares
issuable upon exercise of all incentive stock options which
become exercisable by a Key Employee for the first time during
any calendar year under all plans of the corporation employing
such Key Employee, any  parent or subsidiary corporations of such
corporation and any predecessor corporation of any such
corporation, shall not exceed $100,000.
     
6.   Terms and Conditions of Stock Options

     Stock options granted under the Plan shall be subject to the
following terms and conditions and such other terms and
conditions as the Committee shall deem advisable:

     A.  Purchase Price.  The purchase price at which each stock
option may be exercised (the "option price") shall be such price
(either greater than, the same as, or less than the fair market
value per share of the Common Stock on the date of grant) as the
Committee, in its discretion, shall determine but (i) in the case
of incentive stock options, shall not be less than one hundred
percent (100%) of the fair market value per share of the shares
of Common Stock covered by the stock option on the date of grant
and (ii) in the case of incentive stock options granted to a Key
Employee who together with the members of his immediate family
owns, or may be deemed to own, beneficially, more than 10% of the
outstanding voting securities of the Company (as the terms
"immediate family" and "beneficial ownership" are defined under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and such other terms and conditions as the Committee shall
deem advisable (such a Key Employee is referred to as a
"Principal Shareholder"), shall not be less than one hundred and
ten percent (110%) of the fair market value per share of the
shares of Common Stock covered by the stock option on the date of
grant.  In exercising its discretion, the Committee shall take
into account the nature and value to the Company of the
recipient's service, and such other factors as the Committee may
deem relevant. For purposes of this Section 6.A., fair market
value shall be determined as set forth in Section 6.G.

     B.  Payment.  The option price is to be paid in full in cash
upon the exercise of a stock option; provided, however, that in
lieu of cash an individual may, if authorized by the Committee,
exercise a stock option by tendering to the Company shares of
Common Stock owned by the individual and having a fair market
value on the date of exercise, determined as set forth in Section
6(G), equal to the option price. The provisions of this Section
6.B. shall not preclude the payment of the option price of a
stock option by any other legally permissible method specifically
approved by the Committee. No shares shall be issued or delivered
upon exercise of a stock option until payment of the option price
in full has been made. When payment of the option price in full
has been made, the Optionee shall be considered for all purposes
to be the owner of the shares with respect to which payment has
been made.
     
     C.  Restrictions on Exercise.  No incentive stock option or
nonstatutory stock option shall be exercisable after the
expiration of ten years from the date of grant or, in the case of
an incentive stock option or nonstatutory stock option granted to
a Principal Shareholder, five years from the date of grant.
Except as provided in this Section 6.C. and in Section 6.E.,
stock options may be exercised at such times, in such amounts and
subject to such restrictions as shall be determined by the
Committee.
     
     D.  Transfer.  No stock option shall be transferable other
than by will by the laws of descent and distribution, and each
stock option shall be exercisable during the lifetime of an
Optionee only by the Optionee.
     
     E.  Retirement, Termination, Disability, Death.  If a Key
Employee Retires (as defined below) or if  the employment of a
Key Employee who is disabled within the meaning of Section
422(c)(6) of the Code ("Disabled Optionee") is voluntarily
terminated with the consent of the Company or a Subsidiary, any
then outstanding stock option held by such Key Employee shall
become immediately exercisable by such Key Employee at any time
prior to the stock option expiration date or within three years
after the

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date of termination of employment, whichever is the
shorter period.  "Retires" shall mean retirement on or after date
of Normal Retirement, or on any earlier date such that the
employee's benefits are not reduced, under the Company's
retirement plan.  Whether termination of employment is a
voluntary termination with consent and whether a Key Employee is
disabled within the meaning of Section 422(c)(6) of the Code
shall be determined in each case by the Committee, and any such
determination by the Committee shall be final and binding.
     
     If the service of an Optionee who is a director is
terminated because such Optionee cannot at his or her age stand
for re-election to the Committee, any then outstanding stock
option held by such Optionee shall continue to be exercisable and
shall expire in accordance with its terms.
     
     Following the death of an Optionee, any outstanding stock
option held by any such recipient at the time of death shall be
exercisable in full (whether or not so exercisable on the date of
the recipient's death, but subject to such other restrictions on
the exercise of incentive stock options as are set forth in
Section 6(C)) by the person or persons entitled to do so under
the recipient's will, or, if the recipient shall fail to make
testamentary disposition of such stock option  or shall die
intestate, by the recipient's legal representative, in either
case at any time prior to the expiration date of such stock
option or within one year after the date of death, whichever is
the shorter period.
     
     In the event of termination of the employment of an employee
or the service of any other Optionee for any reason other than as
set forth in this Section 6.E., the rights of such Optionee under
any then outstanding stock option shall terminate at the date of
such termination of employment except as otherwise provided in
the stock option agreement entered in accordance with
Section 6.F.
     
     F.  Stock Option Agreement.  Each stock option shall be
confirmed by a stock option agreement which shall be executed by
the Chairman of the Committee or the President on behalf of the
Company and by the person to whom such stock option is granted.

     G.  Valuation.  The fair market value of the Common Stock
shall be the average of the closing price of the Common Stock, as
reported on the New York Stock Exchange, during the ten trading
days immediately preceding the date of grant.
     

7.   Adjustment and Acceleration of Shares

     If a dividend or other distribution shall be declared upon
the Common Stock payable in shares of the Common Stock, the
number of shares of the Common Stock then subject to any
outstanding stock option and the number of shares which may be
issued or delivered under the Plan but are not then subject to an
outstanding stock option shall be adjusted by adding thereto the
number of shares which would have been distributable thereon if
such shares had been outstanding on the date fixed for
determining the shareholders entitled to receive such stock
dividend or distribution.
     
     If the outstanding shares of the Common Stock shall be
changed into or exchangeable for a different number or kind of
shares of stock or other securities of the Company or another
corporation, whether through reorganization, reclassification,
recapitalization, stock split-up, combination of shares, merger
or consolidation, then there shall be substituted for each share
of the Common Stock subject to any then outstanding stock option
and for each share of the Common Stock which may be issued or
delivered under the Plan but are not then subject to an
outstanding stock option, the number and kind of shares of stock
or other securities into which each outstanding share of the
Common Stock shall be so changed or for which each such share
shall be exchangeable; or, alternatively the Committee, or the
governing body of any successor entity, shall make an appropriate
and equitable adjustment in the number and kind of option shares
as to which the option is then unexercised in order that, after
such event, the option shares as to which the option is then
unexercised shall represent the same potential

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ownership interest in the company (or that part of a successor
entity which consists of the company) immediately after such event
as they represent immediately before such event.

     Each outstanding stock option shall become immediately and
fully exercisable for a period of six months following the date
of the following occurrences:  (i)  if any person (including a
group as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934) becomes directly or indirectly the beneficial owner
of 20% or more of the Common Stock; (ii) as a result of or in
connection with any cash tender offer, exchange offer, merger or
other business combination, sale of assets or contested election,
or combination of the foregoing, the persons who were directors
of the Company just prior to such event cease to constitute a
majority of the Company's Committee of Directors; or (iii) the
stockholders of the Company approve an agreement providing for a
transaction in which the Company will cease to be an independent
publicly-owned corporation or a sale or other disposition of all
or substantially all of the assets of the Company occurs.

     In case of any adjustment or acceleration as provided for in
this Section 7,  the aggregate option price for all shares
subject to each then outstanding stock option prior to such
adjustment or acceleration shall be the aggregate option price
for all shares of stock or other securities (including any
fraction) to which such shares shall have been adjusted or which
shall have been substituted for such shares.
     
     All references in this Plan to shares shall, where the
context so requires, be deemed to be references to such shares as
adjusted pursuant to this Section 7. If any such adjustment to
the number of shares subject to the grant of stock options
requires the approval of stockholders in order to enable the
Company to issue incentive stock options then no such adjustment
shall be made without the approval of the stockholders.
Notwithstanding the foregoing, in the case of incentive stock
options, if the effect of any adjustment or acceleration is to
cause the stock option to fail to continue to qualify as an
incentive stock option or to cause a modification, extension, or
renewal of such stock option within the meaning of Section 424(h)
of the Code, the Committee of Directors may elect not to make
such adjustment or acceleration but rather shall use reasonable
efforts to effect such other adjustment of each then outstanding
stock option as the Committee of Directors in its sole discretion
shall deem equitable and which will not result in any
disqualification, modification, extension, or renewal (within the
meaning of Section 424(h) of the Code) of such stock option.

8.   Effect of the Plan on the Rights of Directors or Employees

     Neither the adoption of the Plan nor any action of the
Committee or the Board of Directors pursuant to the Plan shall be
deemed to give any person any right to be granted a stock option
under the Plan, and nothing in the Plan or in any stock option
agreement shall confer upon any person any right to continue to
serve the Company or any Subsidiary as an employee, officer,
director, consultant, or otherwise, or interfere in any way with
the rights of the Company or any Subsidiary to terminate the
service or employment of any person at any time.
     
9.   Amendment

     The right to alter and amend the Plan at any time and from
time to time and the right to revoke or terminate the Plan are
hereby specifically reserved to the Board of Directors; provided
always that no such revocation or termination shall terminate any
outstanding stock option previously granted under the Plan; and
provided further that no such alteration or amendment of the Plan
shall, without prior shareholder approval, (i) increase the total
number of shares which may be issued or delivered under the Plan,
(ii) make any changes in the class of eligible officers,
directors, or employees, or (iii) extend the periods set forth in
the Plan during which stock options may be granted. No
alteration, amendment, revocation, or termination of the Plan
shall, without the written consent of the holder of a stock
option previously granted under the Plan, adversely affect the
rights of such holder with respect to such stock option.
     
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10.  Effective Date and Duration of Plan
     
     The date of adoption of the Plan shall be November 19, 1998
provided that the Plan is ratified and approved by shareholders
of the Company at a meeting of such holders held on or prior to
November 18, 1999. No stock option granted under the Plan may be
exercised until after such ratification and approval. No stock
option may be granted under the Plan subsequent to November 18,
2008.