SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                   FORM 10-K/A


              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 1996

                          Commission file number 1-3571

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                          LONG ISLAND LIGHTING COMPANY
               Incorporated pursuant to the Laws of New York State

                                   ----------

      Internal Revenue Service - Employer Identification Number 11-1019782
              175 East Old Country Road, Hicksville, New York 11801
                                  516-755-6650

                                   ----------
           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

                       Title of each class so registered:

Common Stock ($5 par)

Preferred Stock ($100 par, cumulative):
Series B, 5.00%        Series E, 4.35%      Series I, 5 3/4%, Convertible
Series D, 4.25%        Series CC, 7.66%

Preferred Stock ($25 par, cumulative):
Series AA, 7.95%       Series GG, $1.67     Series QQ, 7.05%
                       Series NN, $1.95

General and Refunding Bonds:
8 3/4%Series Due 1997    8 5/8% Series Due 2004   9 3/4% Series Due 2021
7 5/8%Series Due 1998    8.50%  Series Due 2006   9 5/8% Series Due 2024
7.85% Series Due 1999    7.90%  Series Due 2008

Debentures:
7.30% Series Due 1999     7.05% Series Due 2003    8.90% Series Due 2019
7.30% Series Due 2000     7.00% Series Due 2004    9.00% Series Due 2022
6.25% Series Due 2001    7.125% Series Due 2005    8.20% Series Due 2023
                          7.50% Series Due 2007

      NAME OF EACH  EXCHANGE  ON WHICH  EACH CLASS IS  REGISTERED:  The New York
Stock  Exchange and the Pacific Stock  Exchange are the only  exchanges on which
the Common Stock is registered. The New York Stock Exchange is the only exchange
on which each of the other securities listed above is registered.

        SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None

      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.

                            Yes |X|       No | |

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|

      The aggregate market value of the Common Stock held by  non-affiliates  of
the Company at December 31, 1996 was $2,672,275,023.  The aggregate market value
of Preferred Stock held by  non-affiliates  of the Company at December 31, 1996,
established  by Lehman  Brothers  based on the average bid and asked price,  was
$675,542,820.

  COMMON STOCK ($5 PAR) - SHARES OUTSTANDING AT DECEMBER 31, 1996: 120,780,792


                                     

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This Form 10-K/A amends Part III,  Items 10, 11, 12, and 13 of Form 10-K for the
Fiscal Year ended December 31, 1996.


                                 PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

DIRECTORS OF THE COMPANY

All Directors are elected annually.  Current information regarding the Company's
Directors follows:

WILLIAM J.  CATACOSINOS:  Chairman of the Board of Directors and Chief Executive
Officer ("CEO") of LILCO since January 1984 and a Director since 1978; President
of LILCO from March 1984 to January  1987 and from March 1994 to December  1996.
Dr. Catacosinos,  66, is a resident of Mill Neck, Long Island. Received bachelor
of science  degree,  masters  degree in business  administration  and a doctoral
degree  in  economics  from New York  University.  Member,  boards of U. S. Life
Corporation;  Long Island  Association;  Business  Alliance for a New, New York;
First  National  Bank of L.I.;  and a member of the  Advisory  Committee  of the
Huntington  Township  Chamber  Foundation.  Former  chairman and chief executive
officer of Applied Digital Data Systems, Inc., Hauppauge,  New York; chairman of
the board and treasurer of Corometric Systems, Inc. of Wallingford, Connecticut;
and assistant director at Brookhaven National Laboratory, Upton, New York.

JOHN H.  TALMAGE:  Director  of LLCO  since  1982.  Graduate  of the  College of
Agriculture and Life Sciences,  Cornell University, Mr. Talmage is 67. President
since 1992 and director since 1960, Friar's Head Farm, Inc.; Chairman,  board of
directors,  H.P. Hood, Inc. of Boston,  Massachusetts,  1980 to 1995;  director,
Agway,  Inc., 1967 to 1995; Curtice Burns Foods, Inc., 1969 to 1984; and Suffolk
County Federal Savings and Loan Association, 1975 to 1982.

BASIL A. PATERSON:  Director of LILCO since 1983.  Received juris doctorate from
St. John's  University  School of Law.  Served as Secretary of State of New York
from 1979 to 1982, as Deputy Mayor of New York City, as a New York State Senator
and as a  commissioner  of the Port  Authority  of New York and New Jersey.  Mr.
Paterson,  70, is a partner in the law firm of Meyer, Suozzi, English and Klein,
P.C., Mineola, New York. Served as a professor at a number of universities, as a
member of the board of  editors of the New York Law  Journal  and as a member of
the New York State Commission on Judicial Nomination.

GEORGE  BUGLIARELLO:  Director of LILCO since 1990.  Received  doctor of science
degree in  engineering  from  Massachusetts  Institute of Technology and several
honorary  degrees  from  other  institutions.  Dr.  Bugliarello,  69,  served as
President of Polytechnic  University from 1973 to July 1994, and presently holds
the position of Chancellor.  Member, board of directors of the Lord Corporation,
Symbol Technologies,  Comtech  Telecommunications  Corp., the Teagle Foundation,
the Jura Corp., the Greenwall Foundation and Spectrum Information  Technologies,
Inc.  Member of the  Council  on  Foreign  Relations  and  National  Academy  of
Engineering.  Fellow,  the  American  Society of Civil  Engineers,  the American
Association for the Advancement of Science and the New York Academy of Medicine.
Chairman, Board of Infrastructure and Constructed Environment, National Research
Council.  Previously  held a NATO Senior  Faculty  Fellowship  at the  Technical
University  of  Berlin  and  the  chairmanship  on  the  Committee  on  Science,
Engineering and Public Policy of the American Association for the Advancement of
Science.  Former  member of the  Scientific  Committee  of the Summer  School on
Environmental Dynamics in Venice.

GEORGE J. SIDERIS:  Director of LILCO since 1991.  Received  bachelors degree in
economics from New York  University.  Mr.  Sideris,  70, joined LILCO in 1984 as
Vice  President  of Finance  and Chief  Financial  Officer.  Became  Senior Vice
President  of Finance in 1987 and  retired in  January  1992.  Member,  board of
directors  of  Utilities  Mutual   Insurance   Company  through  December  1994.
Self-employed as a management and financial  consultant,  1981-1984.  Previously
served as a vice president of Qualpeco  Services,  Inc., and as a vice president
and chairman of the Northeast Operations Group of U.S. Industries, Inc.

A. JAMES BARNES:  Director of LILCO since 1992.  Received  undergraduate  degree
from Michigan State University and juris doctorate from Harvard Law School.  Mr.
Barnes, 54, served as General Counsel of the U.S. Department of Agriculture from
1981 to 1983, as General  Counsel of the U.S.  Environmental  Protection  Agency
from 1983 to 1984 and as Deputy  Administrator  of the Agency from 1985 to 1988.
Previously  was a partner in the law firm of  Beveridge,  Fairbanks and Diamond,
Washington, D.C. and also served with the U.S. Department of Justice. Joined the
Indiana  University  School of Public and  Environmental  Affairs as its Dean in
1988.

                                       1

<PAGE>

RICHARD L. SCHMALENSEE:  Director of LILCO since 1992.  Received doctoral degree
in economics and bachelor of science  degree in economics,  politics and science
from the  Massachusetts  Institute  of  Technology  ("MIT").  Gordon Y.  Billard
Professor of Economics and  Management at MIT's Sloan School since 1988.  Served
as member of the  President's  Council of Economic  Advisors  from 1989 to 1991.
Currently, Deputy Dean of the MIT Sloan School of Management and Director of the
MIT Center for Energy and Environmental Policy Research. Dr. Schmalensee, 53, is
a consultant to a variety of  government  agencies and private firms through the
National  Economic  Research  Associates  Inc.  on a range of  issues  including
aspects of utility regulation.

RENSO L.  CAPORALI:  Director of LILCO since 1992.  Received  doctorate  and two
masters  degrees in  Aeronautical  Engineering  from Princeton  University and a
masters of  mechanical  engineering  degree and  bachelor  of civil  engineering
degree  from  Clarkson  College  of  Technology.  Dr.  Caporali,  63,  served as
President of Grumman  Corporation's  Aircraft  Systems Division since 1985, Vice
Chairman of Corporate  Technology 1988 to 1990 and Chairman and CEO from 1990 to
June   1994.   Consultant   to  and  member  of  the  board  of   directors   of
Northrop-Grumman  from  June  1994  to  March  1995.  Serves  on  two  Princeton
University  Advisory  Councils.  Former  Chairman  of the  Aerospace  Industries
Association's  Board of Governors and Executive  Committee.  Presently corporate
Senior Vice President of Engineering  and Business  Development for the Raytheon
Company. Member of the National Academy of Engineering.

PETER O. CRISP:  Director of LILCO since 1992.  Received  bachelors  degree from
Yale  University  and masters  degree in business  administration  from  Harvard
Business School. General Partner,  Venrock Associates, a venture capital limited
partnership,  since 1969.  Mr.  Crisp,  64, is Chairman  of Venrock,  Inc.,  the
corporation which manages Venrock  Associates,  since 1980. Director of American
Superconductor  Corporation,  Evans & Sutherland  Computer  Corporation,  Thermo
Power  Corporation,  Thermedics Inc.,  Thermo Electron  Corporation,  ThermoTrex
Corporation  and U.S.  Trust  Corporation  as well as a number of other  private
companies.  Member of the boards of the Memorial Sloan  Kettering  Cancer Center
and North Shore University Hospital.

KATHERINE D.  ORTEGA:  Director of LILCO since 1993.  Received  bachelor of arts
degree in business and economics  from Eastern New Mexico  University  and three
honorary  doctor of law degrees and an honorary doctor of social science degree.
Ms.  Ortega,  62,  served as Treasurer  of the United  States from 1983 to 1989.
Served as a  commissioner  of the Copyright  Royalty  Tribunal,  a member of the
President's  Advisory  Committee on Small and Minority Business and an alternate
representative  to the United Nations General  Assembly.  Member of the board of
directors of Diamond Shamrock, Inc., The Kroger Company, Ralston Purina Company,
Rayonier  Inc. and  Catalyst.  Member of the  Comptroller  General's  Consultant
Panel. Advisory Board Member of Washington Mutual Investors Fund.

VICKI L.  FULLER:  Director of LILCO since 1994.  Received  bachelors  degree at
Roosevelt  University  and  masters  degree in  business  administration  at the
University of Chicago and is a Certified  Public  Accountant.  Ms.  Fuller,  39,
served as an associate in Morgan Stanley and Co.'s corporate finance  department
from 1981 to 1983.  Served as a rating officer at Standard & Poor's  Corporation
from 1984 to 1985. Joined Equitable Capital  Management  Corporation  ("ECM") in
1985  as a  senior  investment  manager,  holding  various  positions  including
Managing  Director  from  1989 to  1993.  Vice  President  of  Alliance  Capital
Management  Corporation  ("Alliance"),  which  acquired  ECM, from 1993 to 1994;
currently holds the position of Senior Vice President of Alliance. Member of the
Board of Trustees of North  Carolina  Agricultural & Technology  University.  In
compliance  with  Section  305(b) of the  Federal  Power  Act,  Ms.  Fuller  has
authorization to hold the position of an officer or director of a public utility
and at the same time the  position  of an officer or  director of a firm that is
authorized to underwrite or  participate in the marketing of the securities of a
public utility.

JAMES T. FLYNN: Appointed by the Board of Directors, Mr. Flynn became a Director
in December 1996.  Holds a bachelor of science degree in mechanical  engineering
from Bucknell University and is a Licensed Professional  Engineer.  Joined LILCO
in October 1986 as Vice President of Fossil Production and was promoted to Group
Vice President,  Engineering and Operations in April 1992.  Appointed  Executive
Vice President and Chief  Operating  Officer in March 1994.  Mr. Flynn,  63, has
served as President and Chief Operating Officer since December 1996.


EXECUTIVE OFFICERS OF THE COMPANY

Information  required by Item 10 as to the Company's  Executive  Officers is set
forth  in Item 1,  "Business"  under  the  heading  "Executive  Officers  of the
Company" above.
                                       2
<PAGE>

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

LILCO is required to identify  any  Director,  Officer,  or person who owns more
than ten percent of a class of equity  securities who failed to timely file with
the Securities and Exchange Commission (the "SEC") a required report relating to
ownership  and  changes in  ownership  of LILCO's  equity  securities.  Based on
information  provided to LILCO by such persons, all LILCO Officers and Directors
made all required  filings during the fiscal year ended December 31, 1996. LILCO
does not know of any  person  beneficially  owning  more  than 10% of a class of
equity securities.


ITEM 11.   EXECUTIVE COMPENSATION

COMPENSATION PAID TO DIRECTORS

The 1996  annual  retainer  fee paid to each  Director  was  $12,500 in cash and
$12,500 applied to a deferred stock unit account, except for Dr. Catacosinos and
Mr. Flynn who, as Officers of LILCO, do not receive  compensation for serving as
Directors. The fee paid to each Director who is not also an Officer of LILCO for
attending each meeting of the Board of Directors or of one of its committees was
$500.

Under  the terms of the  Directors'  Stock  Unit  Retainer  Plan (the  "Retainer
Plan"), each non-employee director of LILCO is required to apply at least 50% of
his or her  annual  retainer  to the  purchase  of Common  Stock  units  ("Stock
Units").   Allocation   of  Stock  Units  under  the  Retainer   Plan  are  made
automatically  on the date  during each  fiscal  quarter on which the  quarterly
installment of the annual retainer is paid.

Under the Retainer  Plan,  the value of the units which will be credited to each
non-employee  Director's  account on a  quarterly  basis will be  determined  by
dividing the  aggregate  amount of cash  credited to such account by the closing
price per share of LILCO Common Stock,  as reported on a New York Stock Exchange
listing of  composite  transactions,  on the first  trading day of the  calendar
month in which the  Participant's  retainer  is paid.  The  amounts  accumulated
pursuant to the Retainer  Plan will be held until such time s (i) a  participant
ceases to serve as a  Director  or  Consulting  Director;  (ii) a  participant's
death; or (iii) a "Change in Control" (as defined in the Retainer Plan).

If the Director so elects,  the aggregate  value of the Stock Units  accumulated
pursuant to the Retainer  Plan may be received in  certificated  shares of LILCO
Common  Stock at the time of  distribution.  The Director may elect to receive a
distribution  of  Retainer  Plan  benefits  in a  lump  sum  or  in  ten  annual
installments.  Any such shares shall be purchased by LILCO on the open market or
shall be taken from shares of Common Stock previously acquired by LILCO and held
in its treasury. Prior to distribution, a Director shall have no voting or other
rights  of a  shareholder  with  respect  to such  Stock  Units.  However,  each
Director's  account  will be credited  with an amount equal to the amount of any
dividends  paid on shares of LILCO Common Stock  proportionate  to the number of
Stock Units  accumulated  pursuant to the Retainer  Plan prior to such  dividend
payment  date.  Amounts so credited  shall be applied  toward the purchase of an
additional  number of Stock Units. The transactions  contemplated  with Brooklyn
Union  and/or  LIPA will  result  in a Change in  Control  for  purposes  of the
Retainer Plan.

LILCO has  entered  into a  consulting  agreement  with Eben W.  Pyne,  a former
Director of LILCO, naming him Consulting Director.  This agreement provides that
the  Consulting  Director  will  advise  and  counsel  the  Board and any of its
committees  on various  matters and will  receive an annual  retainer of $25,000
(half of which was  credited to a deferred  stock unit  account  pursuant to the
Retainer  Plan as  discussed  above) plus an  additional  $500 for each Board or
committee  meeting  attended.  A Consulting  Director does not have the right to
vote at meetings of the Board or at meetings of committees of the Board.

Directors  may elect to defer the receipt of any  portion of their  compensation
under the Deferred  Compensation  Plan for  Directors.  Amounts  deferred may be
allocated to a deferred  compensation  account.  Each  participating  Director's
account accrues interest,  compounded quarterly,  at the prime rate of 1/2%. The
Deferred  Compensation Plan for Directors is unfunded and any accounts under the
plan  will be  general  obligations  of  LILCO.  Distributions  from a  deferred
compensation  account  commence upon  termination  of membership on the Board of
Directors,  death  or  disability,  or at a  date  previously  designed  by  the
participating Director. Distributions from the deferred compensation account may
be made by lump-sum  payment or annually over either a five or ten-year  period.
Currently none of the Directors are  participating in the Deferred  Compensation
Plan for Directors.

                                       3
<PAGE>

LILCO has a Retirement  Plan for Directors (the  "Retirement  Plan"),  providing
benefits  to  Directors  who are not or who  have not been  Officers  of  LILCO.
Directors  who have served in that  capacity for more than five years qualify as
participants  under the plan.  The plan provides for a monthly  benefit equal to
one-twelfth  of the highest  annual  retainer paid to each  participant.  A full
benefit is available for  participants  who serve for ten years with a reduction
of one-sixtieth  for each month of service less than ten years.  Under the plan,
payment of benefits is to begin when the Director  ceases to serve as a Director
or  Consulting  Director or reaches age 65,  whichever  is later.  The plan also
provides  that  in the  event  of a  "change  in  control"  (as  defined  in the
Retirement  Plan),  including by virtue of an  acquisition  of LILCO's assets or
stock, the value of vested benefits could be payable immediately. In addition to
Dr.  Bugliarello,  who would be entitled to be paid a reduced  benefit,  Messrs.
Paterson,  Talmage and Pyne would be entitled to be paid full benefits were they
to cease to serve as a  Consulting  Director or Director at this time.  Benefits
are provided on a straight-  life  annuity  basis except that if the Director is
married at the time benefits begin, a joint and 50% survivor benefit may be paid
on an actuarially  equivalent  basis.  The benefits are unfunded and are general
obligations of LILCO. The transactions  contemplated  with Brooklyn Union and/or
LIPA will result in a Change in Control for purposes of the Retirement Plan.

LILCO  entered  into an  agreement  in 1987  with Mr.  Sideris,  while he was an
Officer of LILCO, which provides retirement benefits  supplementing the benefits
to which he is entitled under LILCO's  Retirement  Income Plan and  Supplemental
Death and Retirement  Benefits Plan, both discussed below. LILCO has established
a  trust,  which  is  currently  making  payment  of  the  retirement  benefits.
Notwithstanding  the  creation of the trust,  LILCO  continues  to be  primarily
liable.

Pursuant to the New York Business  Corporation Law and LILCO By-laws,  LILCO has
entered  into  agreements   with  its  Directors  and  Officers   providing  for
indemnification  and  advancement  of expenses in defending  certain  actions or
proceedings in advance of their final disposition  subject to refund if they are
found not to be entitled to indemnification.  LILCO has established a trust, the
Long Island Lighting Company Officers' and Directors'  Protective Trust, to fund
LILCO's obligations under these agreements.

                                       4

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REPORT OF THE COMPENSATION AND MANAGEMENT
APPRAISAL COMMITTEE ON EXECUTIVE COMPENSATION

The disclosure  contained in this section of the Form 10-K/A shall not be deemed
incorporated  by  reference  into any  prior  filing  by LILCO  pursuant  to the
Securities Act of 1933 or the Securities  Exchange Act of 1934 that  incorporate
future filings or portions thereof  (including this Form 10-K/A or any amendment
or any part thereof).

The Compensation and Management  Appraisal  Committee (the  "Committee"),  which
establishes  the  procedures by which  management  compensation  is  determined,
reviews and  recommends  to the Board of Directors  the  compensation  levels of
LILCO's  Officers and administers the Annual Stock Incentive  Compensation  Plan
(the  "Annual  Stock  Incentive  Plan") and the  Long-Term  Incentive  Plan (the
"Long-Term  Incentive  Plan") discussed below. The Committee is made up entirely
of outside  Directors.  Its members  are George  Bugliarello,  A. James  Barnes,
Richard L. Schmalensee and John H. Talmage.

During 1996, the Committee used two outside consultants,  the Hay Group ("Hay"),
to review the  compensation  levels of  LILCO's  officers,  including  the named
executive officers,  and William M. Mercer, Inc.  ("Mercer"),  to provide advice
with respect to incentive  compensation  arrangements.  LILCO's Human  Resources
office also supplied industry compensation comparisons.

EXECUTIVE COMPENSATION PHILOSOPHY

It  is  the  Board's   philosophy   to  use   incentives   and  other   variable
performance-based  pay programs to link executive pay with enhancements to LILCO
performance  and customer  service and to ensure the attraction and retention of
key executives.  To accomplish  these  objectives,  over the past two years, the
Board has  changed  the  executive  compensation  program  from a  program  that
acknowledged  performance  solely  through the  administration  of base pay to a
program that  includes  both the Annual Stock  Incentive  Plan and the Long-Term
Incentive  Plan.  This  performance-based   compensation   philosophy  places  a
significant  emphasis on the achievement of strategic goals related to financial
and  customer  service  performance.  As a result of the  adoption of the Annual
Stock Incentive  Plan,  officer base salaries have been held at their April 1995
level.  However,  even after the  adoption of the Annual Stock  Incentive  Plan,
LILCO's   officer  total   compensation   opportunities   remains  below  median
competitive  levels  among  other  comparable  electric  utilities.  It  is  the
intention  of  the   committee  to  review  with  the  Board  this   competitive
compensation  shortfall on a regular  basis to ensure that LILCO  maintains  its
ability to retain talented and capable executives.

DETERMINATION OF BASE SALARY LEVELS

The Committee  annually  considers  adjustments  to base salary ranges using the
external comparisons to other utility and non-utility  companies.  Specifically,
LILCO studies the average  compensation levels of comparable  executives of four
databases provided by Hay for general industry, metropolitan New York companies,
national utilities and 9 regional utility companies (the "Hay Group Utilities").
Two of the Hay  Group  Utilities  are also  included  in the  Standard  & Poor's
Electric Utility Index shown in the performance graph on page 18. In addition to
compensation  levels among the Hay  databases,  the  Committee  also reviews the
results of the Edison Electric  Institute's  Annual  Compensation  Survey of 118
utilities (the "EEI Utilities") as well as the compensation paid to the officers
of other New York utilities.

Individual  base salary  increases  within  those  ranges are then  subjectively
determined based on several factors.  These factors include the  competitiveness
of the executive's current base salary and potential incentive compensation, the
executive's  individual  accomplishments  during  the year  and the  executive's
length of time in his or her position.  However,  because base salaries have not
been  increased  since April 1995,  the 1996 base  salaries  earned by the named
executive  officers in the Summary  Compensation  Table fell to 8 percent  below
comparable base salaries among the Hay Group Utilities.
 
                                      5
<PAGE>

THE ANNUAL STOCK INCENTIVE COMPENSATION PLAN

Annual  incentive  compensation  is earned under LILCO's Annual Stock  Incentive
Plan. Awards earned under the Plan, less applicable tax withholding, are paid in
Common  Stock  following  the close of a given plan  year.  By making the awards
payable in LILCO Common Stock,  officers'  performance  is more closely  aligned
with shareholder interest.  Officers received payment for the first time in 1996
for the performance achieved during calendar year 1995.

The Annual Stock Incentive Plan is based on the achievement of two  quantifiable
objectives:  reducing expenditures and maintaining or improving critical service
goals. If threshold levels are not achieved for either  objective,  no incentive
is received.  As threshold  levels were exceeded,  the officers were eligible to
receive awards from the Annual Stock Incentive Plan.

The target  incentive  award - the amounts paid if goal  performance  levels are
attained for all program objectives - were 15% for senior officers,  25% for the
CEO and COO and 10% for other  officers,  of the  midpoint  for the base  salary
range of each position for awards paid in 1996 for Plan Year 1995.  The midpoint
for the  base  salary  range is  dependent  upon  the  executive's  level in the
organization.  Seventy-five  percent of each individual's earned incentive award
is based on the  level  of  achievement  of the two  corporate  objectives.  The
balance  of each  award,  which can range  from zero to 50 percent of the earned
incentive award, is then subjectively  determined by the Committee based on each
individual's contribution toward helping LILCO achieve its objectives.  Based on
the  level  of  achievement  for the  budget  savings  and  service  goals,  and
individual  contributions to LILCO, awards under the Annual Stock Incentive Plan
paid  in  1996  for  plan  year  1995  ranged  from  75 to 110  percent  of each
individual's earned incentive award.

The 1996 total annual  compensation  (base  salary plus annual stock  incentive)
earned by the named executive  officers in the Summary  Compensation table was 9
percent below the total annual compensation levels of the comparable  executives
in the Hay Group Utilities.
   

THE OFFICER LONG-TERM INCENTIVE PLAN

In December  1995,  LILCO's Board of Directors  adopted,  and at the 1996 Annual
Meeting the shareholders  approved,  the Long-Term  Incentive Plan. Prior to the
establishment of this plan, LILCO was one of the few utilities in its peer group
without a long-term incentive compensation plan. Consequently,  its total direct
compensation  (base salary plus annual and long-term  incentives) levels fell 28
percent below the total direct  compensation  levels of the comparison  group in
1995. The purpose of the Long-Term Incentive Plan is to motivate the Officers to
meet or exceed LILCO's business goals,  with a particular focus on the long-term
effects of their actions,  and to provide  incentives  for continued  service to
LILCO.

Awards  made  under  the  Long-Term  Incentive  Plan  will be paid only upon the
attainment of financial  performance goals or goals set by the Committee.  These
goals include freezing rates,  improving earnings and reducing O&M expenditures.
In general the goals are to be attained over the period of three calendar years,
with a new cycle beginning every two years (the "Performance Period"). The first
Performance  Period  (1996-1997) will be two years.  Awards will be paid for the
attainment  of  specified  threshold,   target  and  maximum  results  over  the
Performance  Period and are a specified  percentage  per year of the midpoint of
the individual participant's salary range.

Awards will be paid in two  installments,  each of which is  contemplated  to be
made in shares of Company Stock.  Fifty percent of the award will be distributed
in the next  calendar  year  after  the end of the  Performance  Period  and the
remaining  50%  will  be  subject  to  a  mandatory  one-year  deferral  period.
Generally,  an individual must be employed by LILCO on the date each installment
of the award is paid to be eligible to receive the award.

Using the target  awards for  comparison,  the 1996  total  direct  compensation
achievable by the named  executive  officers in the Summary  Compensation  table
fell 14 percent  below the total direct  compensation  levels of the  comparable
executives in the Hay Group Utilities.
 
                                      6
<PAGE>

CEO COMPENSATION

The  compensation  of Dr.  Catacosinos  consists  of base  salary and annual and
long-term  incentives.  For 1996, the Committee did not recommend an increase in
Dr.  Catacosinos'  base salary.  This  treatment is consistent  with the Board's
approach to freezing  the base salary  levels for all  officers and reflects the
Board's philosophy that an increased percentage of the total compensation of the
CEO should be derived from performance-based compensation rather than base pay.

In making its  determination  with  respect  to Dr.  Catacosinos'  Annual  Stock
Incentive Plan award for plan year 1995, the Committee  considered,  among other
things,  the level of  achievement  of the budget  savings and service  goals in
accordance with the Annual Stock Incentive Plan, LILCO's operating results,  the
efficiency  and high level of reliability of LILCO's  electric  system,  and the
effectiveness   of  the  strategies  and  initiatives   being  used  to  address
competitive factors impacting the electric and gas industries. Specifically, the
continuation of LILCO's  aggressive program to contain operating and maintenance
expenses as well as capital  expenses  resulted in a reduction in these expenses
of $159  million.  This  reduction  significantly  enhanced  LILCO's  cash flow,
enabling it to redeem all bonds  outstanding  under its first mortgage with cash
on hand. Based on these achievements,  the Committee approved an incentive award
net of the appropriate  income and employment taxes for Dr. Catacosinos of 5,407
shares of LILCO Common Stock.

Market comparisons showed that Dr.  Catacosinos' total annual compensation (base
salary  and  annual  incentive)  for 1996 was 4 percent  below the total  annual
compensation and 11 percent below the total direct compensation (base salary and
annual and long-term  incentives) of CEO's in Mercer's  databases.  However,  by
establishing  direct  links  between  pay  and  performance,  the  Committee  is
confident  that  LILCO's  compensation   programs  properly  align  management's
interests with the long-term interests of ratepayers and shareholders.


CERTAIN TAX MATTERS

Generally,  Section  162(m) of the  Internal  Revenue  Code of 1986,  as amended
limits tax deductions for executive  compensation to $1 million.  Section 162(m)
was not applicable in 1996 to the  compensation  of the executives  named in the
Summary Compensation Table.



                               George Bugliarello -- Chairman
                               John H. Talmage
                               A. James Barnes
                               Richard L. Schmalensee


                                       7
<PAGE>





STOCK PERFORMANCE GRAPH

Set forth  below is a graph  comparing  the  cumulative  return  of  LILCO,  the
Standard & Poor's 500  Composite  Stock Index  ("S&P 500") and the S&P  Electric
Utilities Index ("S&P ELEC") over the past five-year period. The graph assumes a
$100 initial investment on December 31, 1991, and a reinvestment of dividends in
LILCO and each of the companies reported in the indices.


                         LILCO              S&P 500        S&P ELEC
                         -----              -------        --------
1991                  $ 100.00             $ 100.00       $ 100.00
1992                  $ 112.26             $ 107.62       $ 105.88
1993                  $ 113.49             $ 118.47       $ 119.22
1994                  $  79.16             $ 120.03       $ 103.64
1995                  $  94.16             $ 165.14       $ 135.86
1996                  $ 140.12             $ 203.06       $ 135.64


COMPENSATION PAID TO EXECUTIVE OFFICERS

SUMMARY  COMPENSATION  TABLE:  The following table  illustrates the compensation
paid by LILCO during the past three years to each of its most highly compensated
Executive Officers:

<TABLE>
<CAPTION>
                                               
    
                                        Annual Compensation              Long Term Compensation
                                  ---------------------------------  ------------------------------- 
                                                                     Restricted             Payouts-
                                                                       Stock      Options/  LTIP     All Other
 Name and Principal               Salary      Bonus     Other Annual   Award(s)     SARs    Payouts  Compensation
      Position           Year    ($)(1)      ($)(2)     Compensation     ($)        (#)       ($)      ($)(3)
=============================================================================================================
<S>                      <C>    <C>          <C>             <C>          <C>        <C>       <C>     <C>   
William J. Catacosinos   1996   580,413(4)   153,203         n/a*         0          0         0       18,653
- CEO                    1995   587,976(4)      0            n/a          0          0         0       15,184
                         1994   579,654(4)      0            n/a          0          0         0       12,304
-------------------------------------------------------------------------------------------------------------
James T. Flynn - COO     1996   263,364       90,554         n/a          0          0         0        5,800
President                1995   255,500         0            n/a          0          0         0        3,725
                         1994   235,178         0            n/a          0          0         0        2,116
-------------------------------------------------------------------------------------------------------------
Leonard P. Novello -     1996   236,186       33,693         n/a          0          0         0        1,410
Senior Vice President    1995   176,250(5)      0            n/a          0          0         0          883
and General Counsel      1994     n/a           0            n/a          0          0         0          n/a
-------------------------------------------------------------------------------------------------------------
Edward J. Youngling -    1996   172,358       34,285         n/a          0          0         0          766
Senior Vice President    1995   172,000         0            n/a          0          0         0          650
Engineering and          1994   169,512         0            n/a          0          0         0          591
Construction
-------------------------------------------------------------------------------------------------------------
Anthony Nozzolillo -     1996   170,331       31,672         n/a          0          0         0          574
Senior Vice President    1995   169,083        0             n/a          0          0         0          487
Finance and Chief        1994   157,678        0             n/a          0          0         0          423
Financial Officer
=============================================================================================================
 * n/a - Not Applicable.
</TABLE>



                                   8

<PAGE>





NOTES TO SUMMARY COMPENSATION TABLE:

(1)  LILCO has in place a 401(k) Capital  Accumulation Plan, which qualifies for
     favorable  tax  treatment  under  the  Internal  Revenue  Code of 1986,  as
     amended.   This  plan  is  designed   to  provide   for  salary   reduction
     contributions by participants  under Section 401(k) of the Internal Revenue
     Code of 1986, as amended that permit  employees to defer a portion of their
     current  compensation and therefore a portion of their current federal and,
     in most instances,  state and local income taxes. Although this plan allows
     LILCO to make matching  contributions  to these deferred  amounts,  no such
     matching contributions have been made to date. The amounts shown for annual
     salary  in the  Summary  Compensation  Table  for each  individual  officer
     include amounts deferred by those individuals into this plan.

(2)   Represents  the dollar value of LILCO Common Stock awards under the Annual
      Stock  Incentive  Plan,  including  applicable tax  withholdings.  The net
      amount of the awards were paid in shares of LILCO  Common Stock in 1996 as
      follows:  Dr.  Catacosinos - 5,407 shares,  Mr. Flynn - 3,196 shares,  Mr.
      Novello - 1,189 shares, Mr. Youngling - 1,210 shares, and Mr. Nozzolillo -
      1,117 shares.

(3)  LILCO has a noncontributory Supplemental Death and Retirement Benefits Plan
     for its Officers and certain other senior management employees.  Currently,
     death benefits for the Chairman, CEO, President and Chief Operating Officer
     ("COO") are five times their plan compensation and, for each other Officer,
     three  times  their  plan  compensation.  Compensation  under  this plan is
     defined as the highest salary  including any incentive  earned  pursuant to
     the Annual Stock Incentive Plan. The cost of life insurance,  paid by LILCO
     for coverage  under this plan,  is included in All Other  Compensation  for
     each of the individuals listed. For each year reflected in the Compensation
     Table,  insurance  coverage  for  these  death  benefits  was  provided  by
     split-dollar life insurance  policies on the life of each plan participant.
     The amount shown for each  participant  represents the amount  allocated to
     such participant for income tax purposes.

(4)   A  portion  of Dr.  Catacosinos'  salary  in each of these  years has been
      deferred at his request and is reflected in the amounts shown.

(5)   Leonard P. Novello  assumed duties as General  Counsel  effective April 1,
      1995.  Prior to that date, Mr. Novello was General  Counsel for the public
      accounting firm of KPMG Peat Marwick.


                                 9

<PAGE>



SUPPLEMENTAL  DEATH AND  RETIREMENT  BENEFITS  PLAN:  Officers and certain other
senior  management  employees  eligible to participate  in LILCO's  Supplemental
Death and Retirement  Benefits Plan are provided with death benefits,  generally
funded by life  insurance,  equal to five  times the plan  compensation  for the
Chairman,  CEO, President and COO and three times the plan compensation for each
other Officer. "Plan compensation" is defined in this plan as the highest salary
including  any incentive  earned  pursuant to the Annual Stock  Incentive  Plan.
Prior to  retirement,  participants  elect  either to  receive  continued  death
benefit coverage or to receive monthly retirement  benefits,  a partial lump-sum
distribution,  or a combination  of each.  For a  participant  who retires on or
after age 65 and elects the death  benefit,  the death benefit  coverage will be
continued up to five times plan  compensation for the Chairman,  CEO,  President
and  COO and up to  three  times  plan  compensation  for  each  Officer.  For a
participant  who  retires on or after age 65 and elects the  monthly  retirement
income benefit, the annual retirement benefits payable under the 15-year certain
option  will  be,  for  the  Chairman,  CEO,  President  and  COO,  25% of  plan
compensation   and,  for  each  other  Officer,   15%  of  such  Officer's  plan
compensation,  with other  options  available to make payment on an  actuarially
equivalent basis through a lifetime annuity,  a joint and survivor annuity or an
increasing income annuity. Retirement benefits under this plan are not available
to  participants  who retire prior to age 60. A  participant  will vest upon the
earlier of attainment of age 60 with ten years of service or upon  attainment of
his or her  normal  retirement  date  (i.e.,  age 65).  If a vested  participant
retires prior to age 65, reduced benefits are payable.

The  projected  value  of the  annual  retirement  benefits  payable  under  the
Supplemental  Death and Retirement  Benefits Plan utilizing the 15-year  certain
retirement  income payment  election for each of the  individuals  listed in the
Summary Compensation Table at normal retirement age, 65, based upon compensation
in effect for 1996,  are as  follows:  Dr.  Catacosinos,  $196,753;  Mr.  Flynn,
$97,639;  Mr. Novello,  $41,804;  Mr. Youngling,  $30,943;  and Mr.  Nozzolillo,
$30,251. The terms of Dr. Catacosinos'  employment  agreement,  discussed below,
provide for his continued  employment beyond normal retirement age. In addition,
Dr.  Catacosinos  has made an  assignment  of his rights to death  benefits  and
therefore will not receive the monthly retirement benefits under this plan.

LILCO  recognizes  the cost of  these  benefits,  which  are  borne  by  LILCO's
shareholders,  as an expense on its income  statements for each year.  LILCO has
also  established  a trust to provide  for  payments of its  obligations  to the
participants   in  the   Supplemental   Death  and  Retirement   Benefits  Plan.
Notwithstanding  the  creation of the trust,  LILCO  continues  to be  primarily
liable for the death or retirement  benefits  payable to the participants and is
currently making such payments to such retired participants.

RETIREMENT  INCOME PLAN:  Generally,  all LILCO employees (except certain leased
and part-time  employees)  are eligible for inclusion in the  Retirement  Income
Plan upon  completion of one year of employment  with LILCO. A participant  will
vest  upon  completion  of  five  years  of  service.  This  plan  is  currently
noncontributory and provides fixed-dollar pension benefits.


The  Retirement  Income Plan uses a career  average pay formula which provides a
credit for each year of participation in the retirement plan. For service before
January 1, 1992,  pension  benefits are  determined  based on the greater of the
accrued  benefit as of December 31, 1991, or by  multiplying a moving  five-year
average of plan  compensation,  not to exceed the January 1, 1992  salary,  by a
certain  percentage  determined by years of participation in the retirement plan
at December 31, 1991.  For service after January 1, 1992,  pension  benefits are
equal to 2% of "plan compensation"  through age 49 and 2 1/2% thereafter.  "Plan
compensation"  is  defined  in this  plan as the base  rate of pay in  effect on
January  1 of each  year and may  differ  from the  amounts  reported  under the
heading "Salary" in the Summary  Compensation Table. Any difference is primarily
attributable  to the timing of annual salary  increases for the named  executive
officers  which impacts the amount paid to such officer and reported for a given
year.
  
                                     10

<PAGE>

The following table shows the projected annual  retirement  benefit payable on a
straight-life  annuity basis pursuant to LILCO's  Retirement Income Plan to each
of the individuals listed in the Summary Compensation Table at normal retirement
age  (which  is  the  later  of age  65 or  five  years  of  service),  assuming
continuation  of  employment  to  normal  retirement  date  at the  rate of plan
compensation during 1996:


                           Annual          Credited               Normal
                         Retirement       Service as            Retirement
                         Benefit(1)      of 12/31/96               Date
                         ----------      -----------               ----
William J. Catacosinos   $146,642     12 years 11 months      April 1, 1995(2)
James T. Flynn           $ 66,110     10 years  3 months       January 1, 1999
Leonard P. Novello       $ 73,816       1 year  9 months       January 1, 2006
Edward J. Youngling      $135,805     28 years  9 months        August 1, 2009
Anthony Nozzolillo       $132,683     24 years  6 months     September 1, 2013
                                   


(1)   These Retirement  Income Plan benefits may be limited at retirement by the
      maximum benefit  limitation under Section 415 or the maximum  compensation
      limitation  under  Section  401(a)(17) of the Internal  Revenue Code.  The
      benefits shown have been  calculated  without the  limitations.  LILCO has
      established the Retirement Income Restoration Plan of Long Island Lighting
      Company  to  restore  qualified  plan  benefits  which  have been  reduced
      pursuant to the Code or which may not be includible in the  calculation of
      benefits pursuant to LILCO's Retirement Income Plan. In the event that the
      retirement  benefits  are reduced by  operation  of either  Section 415 or
      401(a)(17)  of  the  Internal  Revenue  Code,  LILCO's  Retirement  Income
      Restoration  Plan would provide payment of plan formula  pension  benefits
      which exceed those payable under the Code's maximum limitations.  For 1996
      the maximum benefit limit set by Section 415 and applicable to the amounts
      shown above was $120,000.  For 1996 the maximum  compensation limit set by
      Section 401(a)(17) and applicable to the amounts shown above was $250,000.
      For 1997 the maximum  benefit limit set by Section 415 is $125,000 and the
      maximum  compensation  limit set by Section  401(a)(17) and to be utilized
      for benefits accrued in 1997 is $160,000.

(2)   Dr. Catacosinos'  employment agreement,  discussed below, provides for his
      continued employment beyond his normal retirement date.

                                       11

<PAGE>

AGREEMENTS  WITH  EXECUTIVES:  LILCO  has  entered  into  individual  employment
agreements  with each of its Officers to provide them with  employment  security
and to minimize distractions  resulting from personal uncertainties and risks of
a change in control of LILCO.  Currently,  the  principal  benefits  under these
agreements,  payable if the Officer's  employment  is terminated  for any reason
(including voluntary  resignation) within three years of a change in control (as
defined in these  agreements),  including by virtue of an acquisition of LILCO's
assets or stock,  prior to December 31, 1999,  are: (i)  severance  pay equal to
three  years'  salary;  (ii)  accelerated  vesting  and  payment of the value of
supplemental  retirement benefits at the time of a change in control,  which are
enhanced by three years of service;  and (iii) continuation of life, medical and
dental  insurance for a period of three years.  The costs  associated with these
arrangements will be borne by LILCO's shareholders. Notwithstanding the creation
of a trust to support payment of its obligations,  LILCO is primarily liable for
the compensation  and retirement  benefits payable to the Officers and the trust
will make such payments only to the extent that LILCO does not. The transactions
contemplated  with Brooklyn Union and/or LIPA will result in a change in control
(as  defined in these  agreements)  and  entitle  each  Officer to the  benefits
payable  under  the  terms  of  the  employment  agreements  if  such  Officer's
employment is terminated for any reason.

Under the terms of an  employment  contract  dated as of January  30,  1984,  as
amended (the  "Contract"),  Dr.  Catacosinos has agreed to serve as CEO of LILCO
until January 31, 2002. The Contract provides for a five-year  consulting period
following the termination of his employment  (other than,  except after a change
in control,  for cause).  His  consulting  compensation  will be 90% of his base
annual salary at his retirement  during the first two years,  75% of such salary
during the third and fourth years and 50% of such salary  during the fifth year.
The  Contract  also  provides  for   supplemental   disability   benefits.   Dr.
Catacosinos'  employment under the Contract may be terminated by LILCO for cause
or for such other reason as the Board of Directors may, in good faith, determine
to be in the best interests of LILCO and by Dr.  Catacosinos if he determines it
to be in the  best  interests  of  LILCO or for any  reason  after a  change  in
control.  The  transactions  contemplated  with Brooklyn  Union and/or LIPA will
result in a change in control under the Contract. The Contract also provides for
vested  Contract   Retirement   Benefits   commencing  at  the  earlier  of  Dr.
Catacosinos'  retirement or death,  payable  monthly to Dr.  Catacosinos and his
wife as a joint and  survivor  annuity with a minimum  guaranteed  period of ten
years. The Contract  Retirement  Benefits in any year will be reduced by monthly
benefits payable under LILCO's other retirement plans. The benefit will be based
upon a formula that considers his age at retirement,  his highest annual salary,
the  highest  bonus he has  received  and the  length  of his  service  to LILCO
including  service as a Director,  employee or  consultant.  The benefit is also
subject to certain annual cost of living adjustments. Assuming, for illustrative
purposes,  his  retirement  at December  31, 1997,  the amount of the  estimated
retirement  benefit payable under the Contract to Dr.  Catacosinos as of January
1, 1998 (assuming  continuation  of his current  salary) would be  approximately
$895,234 LILCO has established trusts to provide for payments of its obligations
under  the  Contract,  the costs of which  are  borne by  LILCO's  shareholders.
Notwithstanding  the  creation of the trusts,  LILCO  continues  to be primarily
liable for all amounts payable to Dr.  Catacosinos and the trusts will make such
payments to the extent that LILCO does not.

The  Officers  have  also  entered  into  indemnification  agreements  that  are
described below under the heading "Transactions with Management and Others."

No  Director  or  Officer  or  associate  of any  Director  or  Officer  has any
arrangement  with any person with respect to any future  employment  by LILCO or
its affiliates other than those described herein.

                                       12

<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Current Ownership of LILCO Common Stock. The following table shows the number of
shares*  of Common  Stock  beneficially  owned,  as of April 15,  1997,  by each
Director,  certain  Officers,  and by all Directors and Officers as a group. The
percentage of shares held by any one person,  or all Directors and Officers as a
group, does not exceed 1% of all outstanding shares of Common Stock. The address
of each of the Directors and Officers is: c/o Long Island Lighting Company,  175
East Old Country Road, Hicksville, New York 11801.

       Name                                       Number of Shares*
       ----                                       -----------------

A. James Barnes...............................................1,473
George Bugliarello............................................1,473
Renso L. Caporali.............................................2,144
William J. Catacosinos.......................................14,707
Peter O. Crisp..................................................973
James T. Flynn................................................5,509
Vicki L. Fuller...............................................1,273
Leonard P. Novello............................................1,189
Anthony Nozzolillo............................................1,301
Katherine D. Ortega...........................................1,801
Basil A. Paterson.............................................2,025
Richard L. Schmalensee........................................1,073
George J. Sideris.............................................4,851
John H. Talmage...............................................1,505
Edward J. Youngling...........................................2,446

All Directors and Officers as a group, including
those named above, a total of 32 persons.................... 56,243


     *The number of shares  includes  whole shares held under LILCO's  Automatic
     Dividend  Reinvestment Plan and for Mr. Talmage includes 287 shares held or
     beneficially  owned by a  spouse,  parent  or child  for  which  beneficial
     ownership is disclaimed.  In addition,  the number of shares shown for each
     Director,  other than Dr.  Catacosinos  and Mr.  Flynn,  includes 678 LILCO
     Common  Stock  units,  which do not  confer  any  voting  rights,  credited
     pursuant to the Retainer Plan.

The following table sets forth certain information with respect to the shares of
Preferred  Stock and Common  Stock owned by each person known by LILCO to be the
beneficial  owner of more than 5% of such Preferred Stock and Common Stock as of
December 31, 1996.


Title of                                                              Percentage
  Class                  Names and Address                Owned        of Class
  -----                  -----------------                -----        --------

Common Stock         The Brooklyn Union Gas Company    23,981,964*       16.6%
                     One MetroTech Center
                     Brooklyn, NY 11201-3850

Common Stock         The Capital Group, Inc.           10,735,000         8.9%
                     333 South Hope Street
                     Los Angeles, CA  90071


      *Represents  the number of shares  that may be  purchased  pursuant to the
      LILCO Stock Option Agreement filed as an Exhibit to LILCO's Current Report
      on Form 8-K filed December 30, 1996.

      LILCO has not been advised,  nor is it aware, of any additional  shares to
      which anyone has the right to acquire beneficial ownership.
  
                                       13


<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS WITH MANAGEMENT AND OTHERS

INDEMNIFICATION  OF  DIRECTORS  AND  OFFICERS:  For  many  years  prior to 1986,
statutory  provisions  of  the  New  York  Business  Corporation  Law  permitted
corporations,  including LILCO,  under certain  circumstances in connection with
litigation in which its Directors  and Officers  were  defendants,  to indemnify
them  for,  among  other  things,  judgments,  amounts  paid in  settlement  and
reasonable  expenses.  To reimburse it when it has indemnified its Directors and
Officers, LILCO began in 1970, pursuant to statutory authorization,  to purchase
Director and Officer  ("D&O")  liability  insurance in each year.  D&O liability
insurance also provides  direct payment to LILCO's  Directors and Officers under
certain  circumstances when LILCO has not previously  provided  indemnification.
LILCO  has D&O  liability  insurance  which  it has  purchased  from  Associated
Electric & Gas  Insurance  Services  Ltd.  ("AEGIS"),  Energy  Insurance  Mutual
("EIM"),  Columbia  Casualty,  Steadfast  Insurance  Company,  A.C.E.  Insurance
Company and XL  Insurance  Company,  all with the  effective  date of August 26,
1996. LILCO also has liability  insurance  effective July 1, 1996 purchased from
AEGIS and EIM,  which  provides  fiduciary  liability  coverage  for LILCO,  its
Directors, Officers and employees for any alleged breach of fiduciary duty under
ERISA. The total annual premium for all these coverages was $1,599,300 in 1996.

The LILCO  By-laws  provide for the mandatory  indemnification  of Directors and
Officers  to the  extent  not  expressly  prohibited  by the New  York  Business
Corporation  Law. In addition,  the Bylaws  authorize  the Board of Directors to
grant indemnity  rights to employees and other agents of LILCO.  Such provisions
are  effective  as to all  claims  for  indemnification,  whether  the  acts  or
omissions  giving  rise to a claim  for  such  indemnification  occurred  or the
expenses  for which  indemnity  is  sought  were  incurred,  before or after the
provisions  of the By-laws were  adopted.  One of the  provisions of the By-laws
authorized the Board of Directors to enter into indemnification  agreements with
any of LILCO's  Directors or Officers  extending rights to  indemnification  and
advancement  of  expenses  to such person to the  fullest  extent  permitted  by
applicable  law.  LILCO has entered into such  agreements,  which are  described
under the heading  "Compensation  Paid to Directors," with each of its Directors
and Officers.  Pursuant to the terms of those  agreements  and the provisions of
the By-laws,  LILCO has also  established  a trust to fund  LILCO's  obligations
under the agreements.

The LILCO Restated Certificate of Incorporation (the "LILCO Certificate") limits
the  personal  liability  of  Directors  for  certain  breaches  of duty in such
capacity  pursuant to provisions of the New York Business  Corporation  Law. The
LILCO  Certificate does not bar litigation  against  Directors but provides that
Directors are still required to defend themselves in litigation in which acts or
omissions to act are alleged for which they might be held  liable.  Furthermore,
the LILCO Certificate  provides protection to Directors only and does not affect
the liability of Officers of LILCO for breaches of the fiduciary  duties of care
and loyalty.

                                       14


<PAGE>




Pursuant  to the  requirements  of the  Securities  Exchange  Act of 1934,  this
amendment  has been  signed  below by the  following  persons  on  behalf of the
registrant and in the capacities and on the dates indicated.

Date  April 30, 1997
    
                               SIGNATURE AND TITLE

                             WILLIAM J. CATACOSINOS*
                             -----------------------
                             William J. Catacosinos,
                        Principal Executive Officer and
                       Chairman of the Board of Directors


                              /s/ JOSEPH E. FONTANA
                              ---------------------
                       Joseph E. Fontana, Vice President,
                  Controller and Principal Accounting Officer

                                A. JAMES BARNES*
                                ----------------
                            A. James Barnes, Director

                               GEORGE BUGLIARELLO*
                               -------------------
                          George Bugliarello, Director

                               RENSO L. CAPORALI*
                               ------------------
                           Renso L. Caporali, Director

                                 PETER O. CRISP*
                                 ---------------
                            Peter O. Crisp, Director

                                VICKI L. FULLER*
                                ----------------
                            Vicki L. Fuller, Director

                              KATHERINE D. ORTEGA*
                              --------------------
                          Katherine D. Ortega, Director

                               BASIL A. PATERSON*
                               ------------------
                           Basil A. Paterson, Director

                             RICHARD L. SCHMALENSEE*
                             -----------------------
                        Richard L. Schmalensee, Director

                   
                               GEORGE J. SIDERIS*
                               ------------------
                           George J. Sideris, Director

                                JOHN H. TALMAGE*
                                ----------------
                            John H. Talmage, Director

                   
                             /s/ ANTHONY NOZZOLILLO
                             ----------------------
                       *Anthony Nozzolillo (Individually,
         as Senior Vice President and Principal Financial Officer and as
                          attorney-in-fact for each of
                             the persons indicated)


                                       15
<PAGE>


                                   SIGNATURES




           Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                            LONG ISLAND LIGHTING COMPANY

Date:  April 30, 1997                       By:  /s/ ANTHONY NOZZOLILLO
                                            ---------------------------
                                            Anthony Nozzolillo
                                            Principal Financial Officer


           Original  powers of  attorney,  authorizing  Kathleen  A.  Marion and
Anthony  Nozzolillo,  and each of them,  to sign this report and any  amendments
thereto,  as  attorney-in-fact  for each of the  Directors  and  Officers of the
Company, and a certified copy of the resolution of the Board of Directors of the
Company  authorizing  said  persons  and each of them to sign  this  report  and
amendments thereto as attorney-in-fact for any Officers signing on behalf of the
Company,  have been filed with the Securities and Exchange Commission as Exhibit
24 to the Company's Form 10-K for the Year Ended December 31, 1996.




                                       16