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                                                                    Exhibit 10.2

                                AQUASOURCE, INC.


                                  March 4, 2003


Philadelphia Suburban Corporation
762 West Lancaster Avenue
Bryn Mawr, PA 19010
Attn: Nicholas DeBenedictis

Aqua Acquisition Corporation
762 West Lancaster Avenue
Bryn Mawr, PA 19010
Attn: Nicholas DeBenedictis

     Re: Amendment No. 1 to the Purchase Agreement
         -----------------------------------------

Dear Mr. DeBenedictis:

     Reference is made to that certain Purchase Agreement, dated July 29, 2002,
by and between AquaSource, Inc. (the "Seller") and DQE, Inc. ("DQE"), on the one
hand, and Philadelphia Suburban Corporation ("PSC") and Aqua Acquisition
Corporation ("Acquisition" and, together with PSC, the "Buyer"), on the other
hand (the "Purchase Agreement"). Capitalized terms that are used but not
otherwise defined herein shall have the meanings ascribed to such terms in the
Purchase Agreement.

     As a means of simplifying the process of transferring certain of the
Integrated Assets to the Buyer, the parties have agreed that (i) the Seller
would cause to be incorporated AquaSource Operations, Inc., a Delaware
corporation ("Operations"), (ii) the Seller would transfer certain of the
Integrated Assets to Operations prior to the Closing, and (iii) at the Closing,
PSC would acquire from the Seller all of the outstanding shares of capital stock
of Operations. In furtherance of the foregoing, the parties to the Purchase
Agreement, hereby amend the Purchase Agreement as follows:

     1.   The following recital is added to the Purchase Agreement as the fourth
          recital:

          WHEREAS, the Seller owns all of the issued and outstanding shares of
          common stock (the "Operations Shares") of AquaSource Operations, Inc.,
          a Delaware corporation ("Operations");

     2.   The last recital of the Purchase Agreement is hereby amended by
          restating clause (i) of said recital in its entirety to read as
          follows:

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          (i) the Utility Shares, the Utility Preferred Shares, the Development
          Shares, the Reynolds Shares and the Operations Shares (collectively,
          the "Shares") by PSC, or, with respect to the Operations Shares only,
          by Acquisition, and

     3.   Section 1.1(a) of the Purchase Agreement is hereby amended by (i)
          replacing the word "purchases" in clause (iii) thereof with the words
          "purchases or owns" and (ii) by adding three new sentences at the end
          of said section, which three sentences shall read in their entirety as
          follows:

               Notwithstanding the foregoing, (i) the Seller will have performed
               its obligations under this Section 1.1(a) with respect to any
               particular Integrated Asset set forth on Section 1.1(a) of the
               Seller Disclosure Schedule if, prior to the Closing, the Seller
               shall have transferred, or caused to be transferred, such
               Integrated Asset to Operations, and (ii) the Buyer will have
               performed its obligations under this Section 1.1(a) with respect
               to any Integrated Asset so transferred to Operations if, at the
               Closing, PSC or Acquisition shall purchase and accept from the
               Seller the Operations Shares (as defined in Section 3.3). In
               addition, the Parties expressly agree that at the Closing, the
               Seller shall sell, convey, assign, transfer and deliver to PSC or
               Acquisition, and PSC or Acquisition shall purchase and accept
               from the Seller, the Operations Shares, provided, however, that
               the Operations Shares shall be treated as an Integrated Asset for
               all purposes whatsoever under this Purchase Agreement, including,
               without limitation, for purposes of any indemnity obligations in
               respect of Integrated Assets and Integrated Liabilities contained
               herein. For the avoidance of doubt, the Parties agree that the
               transfer of certain Integrated Assets to Operations and the
               purchase of the Operations Shares by PSC or Acquisition, as
               contemplated above, is for the convenience of the Seller and is
               not intended to affect any Party's rights, obligations or
               interests with respect to such Integrated Assets as originally
               set forth in the Purchase Agreement.

     4.   Section 1.1(b) of the Purchase Agreement is hereby amended by
          restating said section in its entirety to read as follows:

               The "Integrated Assets" shall mean all of those assets set
               forth in Section 1.1 of the Seller Disclosure Schedule (as
               defined in Section 3.1) and the Operations Shares (as defined in
               Section 3.3).

     5.   Section 1.1(c) of the Purchase Agreement is hereby amended by
          restating said section in its entirety to read as follows:

               The "Integrated Liabilities" shall mean (i) all of the
               performance obligations of the Seller and any Subsidiary of the
               Seller (including Operations) which relate to the Contracts
               included among the Integrated

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               Assets (including any Contracts assigned to Operations as
               contemplated by Section 1.1(a) hereof), and (ii) all of the
               liabilities of the Seller and any Subsidiary of the Seller
               (including Operations), direct or indirect, known or unknown,
               absolute or contingent, which relate to the Contracts included
               among the Integrated Assets (including any Contracts assigned to
               Operations as contemplated by Section 1.1(a) hereof) and which
               arise on or after the Closing Date (as defined in Section 2.1).

     6.   Section 2.2(a)(i) of the Purchase Agreement is hereby amended by
          adding a new sentence at the end of said section, which sentence shall
          read in its entirety as follows:

               Notwithstanding the foregoing, if prior to the Closing PSC
               shall have directed the Seller, in writing, to deliver the
               Operations Shares to Acquisition instead of PSC, then, at the
               Closing, the Seller shall not deliver the Operations Shares to
               PSC as contemplated by the immediately preceding sentence, but
               instead shall, at the Closing, deliver to Acquisition, free and
               clear of any Encumbrances, except for Permitted Encumbrances,
               certificates representing the Operations Shares, each such
               certificate to be duly and validly endorsed in favor of
               Acquisition or accompanied by a separate stock power duly and
               validly executed by the Seller and otherwise sufficient to vest
               in Acquisition good title to the Operations Shares.

     7.   Each of Sections 3.1, 3.4, 3.6, 3.7, 3.8, 3.10, 3.11, 3.12, 3.15,
          3.16, 3.17 and 3.18 shall be amended by (i) replacing the phrase
          "Utility, Development and Reynolds" each time it appears in each such
          Section with the phrase "Utility, Development, Reynolds and
          Operations", (ii) replacing the phrase "Utility, Development or
          Reynolds" each time it appears in each such Section with the phrase
          "Utility, Development, Reynolds or Operations", and (iii) replacing
          the phrase "Utility, Development nor Reynolds" each time it appears in
          each such Section with the phrase "Utility, Development, Reynolds nor
          Operations."

     8.   Section 3.3 of the Purchase Agreement is hereby amended by adding
          thereto a new Section 3.3(f), which shall read in its entirety as
          follows:

               (f) As of the date hereof, (i) the authorized capital stock
               of Operations consists of 100 shares of common stock, no par
               value (the "Operations Stock"), (ii) all 100 shares of Operations
               Stock (the "Operations Shares") have been validly issued to the
               Seller and are fully paid and nonassessable, (iii) the Seller
               owns all of the Operations Shares free and clear of any
               Encumbrances, except for Permitted Encumbrances, and (iv) there
               are no options, warrants, calls, rights, commitments or
               agreements (other than this Agreement) of any character to which
               the Seller or Operations is a party or by which the Seller or
               Operations is bound obligating the Seller or Operations to issue,
               deliver or sell, or cause to be issued, delivered or sold,

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               additional shares of capital stock of Operations, or obligating
               the Seller or Operations to grant, extend or enter into any such
               option, warrant, call, right, commitment or agreement.

     9.   Section 5.5 of the Purchase Agreement is hereby amended by adding
          thereto a new Section 5.5(c), which shall read in its entirety as
          follows:

               (c) PSC is acquiring, or is causing Acquisition to acquire,
               the Operations Shares for investment and not with a view toward,
               or for sale in connection with, any distribution thereof, nor
               with any present intention of distributing or selling the
               Operations Shares. PSC and Acquisition acknowledge that the
               Operations Shares have not been registered under the Securities
               Act and agree that the Operations Shares may not be sold,
               transferred, offered for sale, pledged, hypothecated or otherwise
               disposed of without registration under the Securities Act and any
               applicable state securities laws, except pursuant to an exemption
               from such registration under the Securities Act and any
               applicable state securities laws. Each of PSC and Acquisition is
               able to bear the economic risk of holding the Operations Shares
               for an indefinite period, and has knowledge and experience in
               financial and business matters such that it is capable of
               evaluating the risks of the investment in the Operations Shares.

     10.  Section 6.1 of the Purchase Agreement is hereby amended by adding to
          said section a new Section 6.1(o), which shall read in its entirety as
          follows:

               (o) Operations shall not (i) amend its articles of
               incorporation or by-laws, (ii) split, combine or reclassify its
               outstanding shares of capital stock, (iii) declare set aside or
               pay any dividend payable in cash, stock or property in respect of
               any of its capital stock, except for dividends of Excluded Assets
               to the Seller as contemplated by Section 6.3, or (iv) issue,
               pledge, dispose of or encumber any shares of its capital stock.

     11.  Section 10.5 of the Purchase Agreement is hereby amended by (i)
          restating clause (b) to read in its entirety "(b) upon delivery by
          reputable overnight courier service", (ii) replacing both of
          AquaSource, Inc.'s and DQE, Inc.'s telephone number and contact person
          with Telephone No: 412-393-1140 and Attention: General Counsel,
          respectively, and (iii) replacing the counsel who is to receive a copy
          of notices for both of PSC and Acquisition with Piper Rudnick LLP,
          3400 Two Logan Square, 18th and Arch Streets, Philadelphia, PA 19103,
          Telecopier No.: (215) 656-3301, Telephone No.: (215) 656-3341,
          Attention: Peter J. Tucci, Esq.

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     If the foregoing accurately reflects our agreement, please so indicate by
causing a duly authorized officer of PSC and Acquisition to sign in the spaces
provided below.

                                        Very truly yours,


                                        AQUASOURCE, INC.


                                        By: /s/  Frank A. Hoffmann
                                           -------------------------------------
                                             Frank A. Hoffmann
                                             President


                                        DQE, INC.


                                        By: /s/  Frank A. Hoffmann
                                           -------------------------------------
                                             Frank A. Hoffmann
                                             Executive Vice President


AGREED AS OF THE DATE
FIRST ABOVE WRITTEN:

PHILADELPHIA SUBURBAN CORPORATION


By:  /s/  Roy H. Stahl
   --------------------------------
     Roy H. Stahl
     Executive Vice President


AQUA ACQUISITION CORPORATION


By:  /s/  Roy H. Stahl
    -------------------------------
     Roy H. Stahl
     Vice President


cc:    Peter J. Tucci, Esq.
       Erica Ward, Esq.
(412779)

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