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                                                                    EXHIBIT 10.7


                         EXECUTIVE EMPLOYMENT AGREEMENT



         THIS AGREEMENT (the "Agreement") is entered into as of the 1st day of
April, 2004, by and among COMMONWEALTH ENERGY CORPORATION ("Commonwealth"),
COMMERCE ENERGY GROUP, INC. ("CEG," and together with Commonwealth, the
"Company")and RICHARD L. BOUGHRUM, an individual (the "Executive")(hereinafter
collectively referred to as "the parties").

                                    PREAMBLE

         The Company desires to employ Executive and Executive desires to be
employed by the Company, all pursuant to the terms and conditions hereinafter
set forth.

         NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:

         1. Term. The initial term of this Agreement shall be for the period
commencing on April 1, 2004 (the "Start Date"), and ending on the third
anniversary of the Start Date (the "Initial Term"), provided, however, that the
term of this Agreement shall be automatically extended for successive one (1)
year periods thereafter (each, a "Renewal Period") unless either the Company or
Executive shall have given written notice to the other party at least ninety
(90) days prior to the end of the Term of Agreement (as hereinafter defined),
that the Term of Agreement shall not be so extended. The Initial Term together
with each Renewal Period, if any, are collectively referred to herein as the
"Term of Agreement". Executive's employment hereunder shall be coterminous with
the Term of Agreement, unless sooner terminated as provided in Section 5 hereof.

         2. Employment. During the term of Executive's employment under this
Agreement and subject to the terms and conditions of this Agreement, Executive
shall be employed as Senior Vice President and Chief Financial Officer of
Commonwealth and CEG. Executive agrees to discharge all of the duties normally
associated with such positions, to faithfully and to the best of his abilities
perform such other services consistent with his position as a senior executive
as may from time to time be assigned to him by the Company's Chief Executive
Officer, and to devote all of his business time, skill and attention to such
services. Executive agrees that he will be present in California during each
regular business week except for vacation, except to the extent of Company
business related travel and except as otherwise approved by the Company's Chief
Executive Officer. Executive shall have the duties and authority that are
customary for the position in corporations of similar size, type and nature as
Commonwealth and CEG, as applicable. Executive agrees that he shall not engage
in any other business activities of any kind which would give rise to a conflict
of interest for Executive with respect to his duties and obligations to the
Company.

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         3. Compensation. During the term of Executive's employment under this
Agreement:

                  (a) Base Salary. The Company agrees to pay or cause to be paid
to Executive during the Term of Agreement a base salary at the rate of $350,000
per annum or such increased amount as the Company's Board of Directors (the
"Board") or the Compensation Committee of the Board (the "Committee") may from
time to time determine (hereinafter referred to as the "Base Salary"). Such Base
Salary shall be payable in accordance with the Company's customary practices
applicable to its executives. Such Base Salary shall be reviewed at least
annually by the Board or the Committee and may be further increased (but not
decreased) in such amounts as the Board or the Committee in its discretion may
decide.

                  (b) Bonus. The Executive shall be eligible to participate in
the Company's bonus program at the discretion of the Board on the same basis and
terms as are applicable to other senior executives of the Company.

                  (c) Stock Option. On or prior to the date hereof, Commonwealth
shall grant to Executive a non-qualified stock option (the "Stock Option") to
purchase Five Hundred Thousand (500,000) shares of common stock, par value $.01
per share, of Commonwealth (the "Common Stock") pursuant to the terms of the
Commonwealth Energy Corporation 1999 Incentive Plan, as amended (the "Plan"), a
copy of which is attached hereto as Exhibit A. The Stock Option shall become
exercisable as follows: 125,000 shares shall be immediately vested and fully
exercisable as of the Start Date and 125,000 shares shall become vested and
fully exercisable on each of the first, second and third anniversaries of the
Start Date. The exercise price per share shall be $1.92. In the event
Executive's employment is terminated for any reason other than cause (as such
term is defined in the Plan and not in this Agreement), Executive may exercise
the Stock Option with respect to vested shares of Common Stock until the one
year anniversary of the date of termination of employment. The Stock Option
shall be evidenced by an agreement in customary form for grants of stock options
under the Plan to executive officers of the Company, in substantially the same
form as attached hereto as Exhibit B, consistent with the terms and conditions
of this Agreement.

                  (d) Stock Purchase. The Company shall offer Executive the
right to purchase up to 150,000 shares of Common Stock (the "Shares") for a
purchase price of $1.92 per share. Such Shares , if any, shall be purchased by
Executive no later than 10 days after the closing of the Company's
reorganization. The shares of Common Stock so purchased shall not be subject to
the risk of forfeiture or any vesting schedule.

                  (e) Restricted Stock Grant. The Company shall grant to
Executive, under the Plan, a restricted stock award of One Hundred and Fifty
Thousand (150,000) shares of Common Stock. Such shares shall be subject to
repurchase by the Company, and shall vest with respect to 50,000 shares on each
of the first three anniversaries of the Start Date. The restricted stock grant
shall be evidenced by an agreement in customary form for grants of restricted
stock under the Plan to executive officers of the Company, consistent with the
terms and conditions of this Agreement.


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         4. Other Benefits. During the term of Executive's employment under this
Agreement:

                  (a) Employee Benefits. Executive shall be entitled to
participate in all employee benefit plans, practices and programs maintained by
the Company and made available to employees generally including, without
limitation, all pension, retirement, profit sharing, savings, medical,
hospitalization, disability, dental, life or travel accident insurance benefit
plans. Executive's participation in such plans, practices and programs shall be
on the same basis and terms as are applicable to employees of the Company
generally.

                  (b) Executive Benefits. Executive shall be entitled to
participate in all executive benefit or incentive compensation plans now
maintained or hereafter established by the Company for the purpose of providing
compensation and/or benefits to executives of the Company including, but not
limited to, any supplemental retirement, salary continuation, stock option,
deferred compensation, supplemental medical or life insurance or other bonus or
incentive compensation plans. Unless otherwise provided herein, Executive's
participation in such plans shall be on the same basis and terms, as other
senior executives of the Company. No additional compensation provided under any
of such plans shall be deemed to modify or otherwise affect the terms of this
Agreement or any of Executive's entitlements hereunder.

                  (c) Relocation Costs; Temporary Housing; Travel. Executive
shall be entitled to receive prompt reimbursement, in each case upon submission
of properly documented receipts, for the following:

                        (i) (A) real estate commissions paid by Executive in
connection with the sale of the Connecticut residence owned by Executive, and
closing costs for the purchase by Executive of a primary residence in Southern
California (it being understood that this is not intended to cover the
condominium Executive intends to purchase for temporary living prior to July 31,
2005) and (B) up to an aggregate of $75,000 for moving and storage expenses for
Executive's home furnishings and two cars from Connecticut to Southern
California.

                        (ii) rent for temporary housing in Southern California
and a standard rental car, in each case until the earlier of three months from
the Start Date or the date on which Executive closes on the purchase of a
residence in Southern, California

                        (iii) reasonable costs associated with round trip travel
by Executive, his spouse and one additional family member from his Connecticut
residence to Southern California, not to exceed three round trips, incurred
prior to July 31, 2005.

                        (iv) a personal travel allowance to be used in the
discretion of Executive of up to $2,000 per month (not to exceed $30,000 in the
aggregate) until Executive purchases his permanent residence no later than July
31, 2005 to defray Executive's costs of personal travel to the east coast.

                  (d) Business Expenses. Upon submission of proper invoices in
accordance with the Company's normal procedures, Executive shall be entitled to
receive prompt


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reimbursement of all reasonable out-of-pocket business, entertainment and travel
expenses incurred by him in connection with the performance of his duties
hereunder or for promoting, pursuing or otherwise furthering the business or
interest of the Company.

                  (e) Vacation and Sick Leave. Executive shall be entitled to
annual vacation in accordance with the policies as periodically established by
the Board for similarly situated executives of the Company, which shall in no
event be less than five weeks per year. Executive shall be entitled to sick
leave (without loss of pay) in accordance with the Company's policies as in
effect from time to time.

         5. Termination. Executive's employment hereunder may be terminated
under the following circumstances:

                  (a) Death. Executive's employment shall be terminated as of
the date of Executive's death and Executive's beneficiaries shall be entitled to
the benefits provided in Section 7(b) hereof.

                  (b) Disability. The Company may terminate Executive's
employment after having established Executive's Disability, subject to the
payment by the Company to Executive of the benefits provided in Section 7(b)
hereof. For purposes of this Agreement, "Disability" shall mean Executive's
inability to substantially perform his duties and responsibilities hereunder by
reason of any physical or mental incapacity for two or more periods of ninety
(90) consecutive days each in any three hundred and sixty (360) day period, as
determined by a physician with no history of prior dealings with the Company or
Executive, as reasonably agreed upon by the Company and Executive.

                  (c) Cause. The Company may terminate Executive's employment
for "Cause", effective as of the date of the Notice of Termination (as defined
in Section 6 below), subject to the payment by the Company to Executive of the
benefits provided in Section 7(a) hereof. A termination for Cause is a
termination made because Executive has (A) committed an act of fraud or
embezzlement against the Company or any affiliate thereof, a knowing and willful
unauthorized disclosure of Confidential Information (as defined in Section 9
below) of the Company which disclosure results in material damage to the
Company, or a breach of the duty to the Company not to engage in self-dealing
with respect to the Company's assets, properties or other business opportunities
which continues after written notice thereof specifying the particular events or
conditions which constitute the alleged breach and the specific cure requested
by the Company and a reasonable opportunity to cure (at least 30 days):; or (B)
been convicted (or entered a plea of nolo contendere) for the commission of (1)
a felony or (2) a crime involving fraud, dishonesty or moral turpitude; or (C)
engaged in intentional misconduct as an employee of the Company, which
misconduct or violation results in material damage to the Company or its
reputation and continues after written notice thereof specifying the particular
events or conditions which constitute the alleged misconduct or violation and
the specific cure requested by the Company and a reasonable opportunity to cure
(at least 30 days) (if such misconduct is susceptible to cure by Executive),
including, but not limited to (1) intentional violations by Executive of written
policies of the Company , which policies are not illegal (or do not involve
illegal conduct) and do not require Executive to violate reasonable business
ethical standards, or


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(2) intentional violations of the Company's code of corporate conduct; or (D)
except in the case of Disability, failed, after 30 days written notice from the
Company to render services to the Company in accordance with this Agreement or
Executive's position and responsibilities with the Company in a manner that
amounts to gross neglect in the performance of his duties to the Company. The
Company may suspend Executive, without pay, upon Executive's indictment for the
commission of (1) a felony or (2) a crime involving fraud, dishonesty or moral
turpitude. Such suspension may remain effective until such time as the
indictment is either dismissed or a verdict of not guilty has been entered, at
which time Executive shall be reinstated with the Company. Upon such
reinstatement, Executive shall be entitled to payment by the Company of all Base
Salary to which Executive would have otherwise been entitled to during the
period of such suspension.

                  (d) Without Cause. The Company may terminate Executive's
employment without Cause. The Company shall deliver to Executive a Notice of
Termination (as defined in Section 6 below) not less than sixty (60) days prior
to the termination of Executive's employment without Cause and the Company shall
have the option of terminating Executive's duties and responsibilities (but not
his employment) prior to the expiration of such sixty-day notice period, subject
to the payment by the Company of the benefits provided in Section 7(c) hereof.

                  (e) Good Reason. Executive may terminate his employment for
"Good Reason" (as defined below) by delivering to the Company a Notice of
Termination no less than sixty (60) days prior to the termination of Executive's
employment for Good Reason. The Company shall have the option of terminating
Executive's duties and responsibilities (but not his employment) prior to the
expiration of such sixty-day notice period, subject to the payment by the
Company of the benefits provided in Section 7(c) hereof. For purposes of this
Agreement, Good Reason shall mean the occurrence of any of the events or
conditions described in subsections (i) through (iii) hereof which are not cured
by the Company within a reasonable time after the Company has received written
notice from Executive specifying the particular events or conditions which
constitute Good Reason and the specific cure requested by Executive. For
purposes of this Agreement, "Good Reason" means any of the following events: (i)
failure to pay Executive's salary or bonus, if any, when due; (ii) any material
breach of this Agreement by the Company; or (iii) any requirement that Executive
relocate his place of employment by more than seventy-five (75) miles from
Executive's then current office, provided such relocation is effected by the
Company without Executive's written consent.

                  (f) Voluntary Resignation. Executive may terminate his
employment without Good Reason by delivering to the Company a Notice of
Termination not less than sixty (60) days prior to the termination of
Executive's employment and the Company shall have the option of terminating
Executive's duties and responsibilities (but not his employment) prior to the
expiration of such sixty-day notice period, subject to the payment by the
Company to Executive of the benefits provided in Section 7(a) hereof through the
last day of such notice period.

                  (g) Non-Renewal of Term of Agreement. Either party may elect
not to extend the Term of Agreement pursuant to Section 1 hereof.


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         6. Notice of Termination. Any purported termination by the Company or
by Executive shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice which indicates a termination date, the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated. For purposes of this
Agreement, no such purported termination of Executive's employment hereunder
shall be effective without such Notice of Termination. A Notice of Termination
shall only be delivered by the Company to Executive upon approval by a majority
of the Compensation Committee.

         7. Compensation Upon Termination. Upon termination of Executive's
employment during the Term of Agreement, Executive shall be entitled to the
following benefits:

                  (a) Termination by the Company for Cause or by Executive
Without Good Reason. If Executive's employment is terminated by the Company for
Cause or Executive without Good Reason the Company shall pay Executive all
amounts earned hereunder through the termination date, including:

                        (i) any accrued and unpaid Base Salary;

                        (ii) reimbursement for any and all monies advanced by
Executive or expenses incurred in connection with Executive's employment for
reasonable and necessary expenses incurred by Executive on behalf of the Company
for the period ending on the termination date;

                        (iii) any accrued and unpaid vacation pay;

                        (iv) any earned (as determined by the Compensation
Committee) but unpaid bonus as of the date of termination of employment; and

                        (v) any accrued medical, retirement or other benefits
(the foregoing items in Section 7(a)(i) through 7(a)(v) being collectively
referred to as the "Accrued Compensation").

                  (b) Termination Upon Death or Disability. If Executive's
employment is terminated by the Company upon Executive's Disability or by reason
of Executive's death, the Company shall pay Executive (or his beneficiaries, as
applicable) any Accrued Compensation through the date of termination of
employment. Executive's entitlement to any other compensation or benefits
hereunder shall be determined in accordance with the Company's benefit plans and
other applicable programs and practices then in effect.

                  (c) Termination by the Company Without Cause or by Executive
for Good Reason. If Executive's employment by the Company shall be terminated by
the Company without Cause or by Executive for Good Reason, then:

                        (i) Executive shall be entitled to any Accrued
Compensation through the date of termination of employment; and


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                        (ii) If Executive voluntarily elects and agrees not to
engage in Prohibited Activities (as hereinafter defined) for a period of six (6)
months after the date of such termination of employment, the Company shall pay
Executive as additional compensation for the periods subsequent to the
termination date, an amount in cash equal to the greater of (A) one (1) or (B) a
fraction, the numerator of which is the number of whole months remaining in the
Term and the denominator of which is 12, times Executive's annual Base Salary at
the highest rate in effect at any time within the ninety (90) day period ending
on the date the Notice of Termination is delivered, payable in accordance with
the Company's normal payroll practices for senior executives. If Executive does
not so voluntarily elect and agree or otherwise engages in such Prohibited
Activities, then Executive's eligibility to receive the post-employment benefits
provided for in this Section 7(c)(ii) shall immediately thereafter terminate.
For purposes of this Agreement, "Prohibited Activities" shall mean directly or
indirectly engaging as an owner, employee, consultant or agent of any retail
commodity marketing entity or entity that markets energy efficient products or
back office services;

                        (iii) All restrictions on any outstanding awards granted
by the Company or any subsidiaries or parent of the Company (including
restricted stock awards) granted to Executive shall lapse and such awards shall
become fully (100%) and immediately vested, and all stock options granted to
Executive shall become fully (100%) and immediately exercisable; and

                        (iv) the Company shall make COBRA payments on behalf of
Executive with respect to health benefits existing on the date of termination
for a period of one year following termination of employment.

Executive's entitlement to any other compensation or benefits hereunder shall be
determined in accordance with the Company's benefit plans and other applicable
programs and practices then in effect.

                  (d) Voluntary Resignation by Executive Following a Change in
Control. If Executive voluntarily resigns for any reason within six (6) months
following a Change in Control (as defined in Section 8 below), then in addition
to the amounts due under Section 7(c) above, if Executive voluntarily elects and
agrees not to engage in Prohibited Activities for a period of six (6) months
after the date of such termination of employment, all restrictions on any
outstanding awards granted by the Company or any subsidiaries or parent of the
Company (including restricted stock awards) granted to Executive shall lapse and
such awards shall become fully (100%) and immediately vested, and all stock
options and stock appreciation rights granted to Executive shall become fully
(100%) and immediately exercisable. If Executive does not so voluntarily elect
and agree or otherwise engages in such Prohibited Activities, then Executive's
eligibility to continue to receive the post-employment benefits provided for in
this paragraph shall immediately thereafter terminate.

                  (e) No Mitigation. Executive shall not be required to mitigate
the amount of any payment provided for under this Section 7 by seeking other
employment and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Executive in any subsequent employment.


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         8. Change in Control. For purposes of this Agreement, a "Change in
Control" shall mean any of the following events:

                  (a) the acquisition by any person (as such term is defined in
Section 13(c) or 14(d) of the Securities Exchange Act of 1934, as amended (the
"1934 Act")), other than (i) a trustee or other fiduciary holding securities of
the Company under an employee benefit plan of the Company or (ii) an entity in
which the Company directly or indirectly beneficially owns 50% or more of the
voting securities of such entity (an "Affiliate"), of any securities of the
Company, immediately after which such person has beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the 1934 Act) of fifty percent (50%)
or more of (i) the outstanding shares of Common Stock of the Company or (ii) the
combined voting power of the Company's then outstanding securities entitled to
vote generally in the election of directors;

                  (b) the Company is a party to a merger or consolidation with a
person other than an Affiliate which results in the holders of voting securities
of the Company outstanding immediately before such merger or consolidation
failing to continue to represent (either by remaining outstanding or being
converted into voting securities of the surviving entity) at least 50% of the
combined voting power of the then outstanding voting securities of the
corporation resulting from such merger or consolidation; or

                  (c) all or substantially all of the assets of the Company are,
in any transaction or series of transactions, sold or otherwise disposed of
(other than to an Affiliate);

provided, however, that in no event shall a "Change in Control" be deemed to
have occurred for purposes of this Agreement (i) solely because the Company
engages in an internal reorganization, which may include a transfer of assets
to, or a merger or consolidation with, one or more Affiliates, creation of a
holding company structure or a reincorporation, or (ii) as a result of any
transaction or series of transactions that has been approved by the Board or the
board of directors of CEG; and provided, further that for purposes of this
definition of "Change in Control" only, the term "Company" shall refer to (A)
Commonwealth from the date hereof through the date immediately prior to the
closing of the Reorganization and (B) if the Reorganization is consummated, CEG,
from and after the date of closing the Reorganization.

         9. Records and Confidential Data; Proprietary Inventions.

                  (a) Executive acknowledges that in connection with the
performance of his duties during the Term of Agreement the Company will make
available to Executive, or Executive will have access to, certain Confidential
Information (as defined below) of the Company and its affiliates. Executive
acknowledges and agrees that any and all Confidential Information learned or
obtained by Executive during the course of his employment by the Company or
otherwise, whether developed by Executive alone or in conjunction with others or
otherwise, shall be and is the property of the Company and its affiliates.

                  (b) The Confidential Information will be kept confidential by
Executive, will not be used in any manner which is detrimental to the Company,
will not be used other than in


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connection with Executive's discharge of his duties hereunder, and will be
safeguarded by Executive from unauthorized disclosure.

                  (c) For the purposes of this Agreement, "Confidential
Information" shall mean all confidential and proprietary information of the
Company and its affiliates that has been created, discovered or developed or has
otherwise become known to the Company (including, without limitation,
information created, discovered, developed or made known by or to Executive
during the period of or arising out of his employment hereunder) or in which
property rights have been assigned or otherwise conveyed to the Company, which
information has commercial value in the business in which the Company is
engaged; by way of illustration and not by limitation, Confidential Information
includes information derived from reports, investigations, experiments,
research, work in progress, drawing, designs, plans, proposals, codes, marketing
and sales programs, client lists, client mailing lists, supplier lists,
financial projections, cost summaries, pricing formula, marketing studies
relating to prospective business opportunities and all other concepts, ideas,
materials, or information prepared or performed for or by the Company or its
affiliates. For purposes of this Agreement, the Confidential Information shall
not include and Executive's obligation's shall not extend to (i) information
which is or becomes, without violation by Executive of this Agreement, generally
available to the public and (ii) information obtained by Executive other than
pursuant to or in connection with this employment. Notwithstanding the
foregoing, if Executive is required by law or legal process to disclose the
Confidential Information, Executive shall provide the Company with prompt notice
so that the Company may seek a protective order or other appropriate remedy
and/or waive compliance with this Section 9. If, in the absence of a protective
order or other remedy or the receipt of a waiver by the Company, Executive is
nonetheless, in the opinion of counsel, legally compelled to disclose the
Confidential Information, Executive may, without liability hereunder, disclose
only that portion of the Confidential Information which such counsel advises is
legally required to be disclosed, provided, however, that Executive exercise
reasonable efforts to preserve the confidentiality of the Confidential
Information, including without limitation, cooperating with the Company to
obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded the Confidential Information.

                  (d) Executive hereby assigns to the Company any rights he may
acquire during his employment hereunder in all Confidential Information and
agrees that all Inventions (as defined below) will be the sole property of the
Company and its assigns, and the Company and its assigns will be the sole owner
of all the patents and other rights in connection therewith. Executive hereby
assigns to the Company any rights he may acquire during the period of his
employment hereunder in all Inventions and agrees to assist the Company in every
proper way (but at the Company's expense) to obtain and from time to time
enforce patents on Inventions in any and all countries. Executive shall execute
all documents for use in applying for and obtaining such patents thereon and
enforcing same, as the Company may desire, together with any assignments thereof
to the Company or persons designated by it. Executive's obligation to assist the
Company in obtaining and enforcing patents for Inventions in any and all
countries will continue beyond the termination of employment hereunder, but the
Company will compensate Executive at a reasonable rate after such termination
for time actually spent by him at the Company's request on such assistance.
Executive acknowledges that, in accordance with


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Section 2872 of the California Labor Code, the assignment provisions in this
paragraph (d), do not apply to Inventions for which no equipment, supplies,
facility, or trade secret information of the Company was used, which were
developed entirely on Executive's own time, and (i) which do not relate (a) to
the business of the Company or (b) to the Company's actual or demonstrably
anticipated research or development or (ii) which do not result from any work
performed by Executive for the Company. Executive has identified on Schedule I
hereto all inventions or improvements relevant to the subject matter of
Executive's employment hereunder which have been made or conceived or first
reduced to practice by Executive alone or jointly with others prior to the date
hereof which Executive desires to remove from the operation of this Agreement;
and Executive represents that such list is complete. If there is no such list on
Schedule I, Executive represents that he has made no such inventions and
improvements as of the date hereof.

                  (e) For purposes of this Agreement, "Inventions" shall mean
all improvements, inventions, formulae, processes, techniques, know-how and data
whether or not patentable, made or conceived or reduced to practice or learned
by Executive, either alone or jointly with others, during Executive's employment
hereunder which are related to or useful in the business of the Company, or
result from tasks assigned Executive by the Company, or result from use of
premises owned, leased or contracted for by the Company.

                  (f) Executive's obligations under this Section 9 shall survive
the termination of the Term of Agreement.

         10. Covenant Not to Solicit.

                  (a) Covenant Not to Solicit. To protect the Confidential
Information and other trade secrets of the Company, Executive agrees, during the
term of this Agreement and for a period of twelve months after Executive's
cessation of employment with the Company, not to solicit or participate in or
assist in any way in the solicitation of any employees or consultants of the
Company. For purposes of this covenant, "solicit" or "solicitation" means
directly or indirectly influencing or attempting to influence employees or
consultants of the Company to become employed with any other person,
partnership, firm, corporation or other entity. Executive agrees that the
covenants contained in this Section 10 are reasonable and desirable to protect
the Confidential Information of the Company.

                  (b) It is the intent and desire of Executive and the Company
that the restrictive provisions of this Section 10 be enforced to the fullest
extent permissible under the laws and public policies as applied in each
jurisdiction in which enforcement is sought. If any particular provision of this
Section 10 shall be determined to be invalid or unenforceable, such covenant
shall be amended, without any action on the part of either party hereto, to
delete therefrom the portion so determined to be invalid or unenforceable, such
deletion to apply only with respect to the operation of such covenant in the
particular jurisdiction in which such adjudication is made.

                  (c) Executive's obligations under this Section 10 shall
survive the termination of the Term of Agreement.


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         11. Remedies for Breach of Obligations under Sections 9 or 10 hereof.
Executive acknowledges that the Company will suffer irreparable injury, not
readily susceptible of valuation in monetary damages, if Executive breaches his
obligations under Sections 9 or 10 hereof. Accordingly, Executive agrees that
the Company will be entitled, in addition to any other available remedies, to
seek injunctive relief against any breach or prospective breach by Executive of
his obligations under Sections 9 or 10 hereof. The Company shall seek such
relief in any Federal or state court where venue would be appropriate based upon
Executive's principal residence or his principal place of business. Executive
hereby submits to the non-exclusive jurisdiction of all those courts for the
purposes of any actions or proceedings instituted by the Company to obtain that
injunctive relief, and Executive agrees that process in any or all of those
actions or proceedings may be served by registered mail, addressed to the last
address provided by Executive to the Company, or in any other manner authorized
by law. Notice in such proceedings shall be given in the manner required by law.
Executive further agrees that, in addition to any other remedies available to
the Company by operation of law or otherwise, in the event Executive willfully
and materially breaches any of his obligations under Sections 9 or 10 hereof, he
shall not be entitled to any amounts which may otherwise be payable under the
terms of Sections 7(C) and 7(d) hereof and under the terms of the benefit plans
of the Company in which he participates and to which he might otherwise then be
entitled by virtue hereof. Nothing in Sections 9 or 10 shall operate as a
diminution of Executive's obligations under the Company's standard agreements
pertaining to the subject matter of such sections.

         12. Skipping Stone Acquisition.

         Nothing in this Agreement shall prohibit Executive from continuing in
good faith his activities with and on behalf of SSI prior to the closing of the
Acquisition.

         13. Insurance and Indemnification.

                  (a) Insurance Covering Executive. The Company shall, at its
cost, provide insurance coverage to Executive at least to the same extent as
other senior executives and directors of Commonwealth or CEG, as applicable,
with respect to (i) director's and officer's liability, (ii) errors and
omissions and (iii) general liability.

                  (b) Indemnification. The Company shall indemnify Executive and
hold him harmless from and against any and all costs, expenses, losses, claims,
damages, obligations or liabilities (including actual attorneys fees and
expenses) arising out of or relating to any acts, or omissions to act, made by
Executive on behalf of or in the course of performing services for the Company
to the fullest extent permitted by the Delaware General Corporation Law or other
applicable law and by the Company's certificate of incorporation or bylaws as in
effect on


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<PAGE>

the date hereof, and at least to the same extent as other senior executives and
directors of Commonwealth or CEG, as applicable. To the extent a change in
applicable law permits greater indemnification than is now afforded by the
certificate of incorporation or bylaws as in effect on the date hereof and a
corresponding amendment shall not be made therein, it is the intent of the
parties hereto that Executive shall enjoy the greater benefits so afforded by
such change. Without limiting the foregoing, the Company, to the full extent
permitted by the DGCL or other applicable law, will periodically advance
expenses as incurred with respect to the foregoing to the fullest extent
permitted thereunder, provided that the Executive provides an undertaking to
repay such advances if it is ultimately determined that he is not entitled to
indemnification.

                  (c) Rights Not Exclusive. The foregoing rights conferred upon
Executive shall not be exclusive of any other right which Executive may have or
hereafter acquire under any statute, provision of the certificate of
incorporation or bylaws of the Company, agreement, vote of shareholders or
disinterested directors or otherwise, and such provisions shall survive the
termination or expiration of this Agreement for any reason whatsoever.

         14. Miscellaneous.

                  (a)

                  (b) Successors and Assigns.

                        (i) This Agreement shall be binding upon and shall inure
to the benefit of the Company, its successors and assigns and the Company shall
require any successor or assign to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession or assignment had taken place. The
term "the Company" as used herein shall mean a corporation or other entity
acquiring all or substantially all the assets and business of the Company
(including this Agreement) whether by operation of law or otherwise.

                        (ii) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by Executive, his beneficiaries or
legal representatives, except by will or by the, laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
Executive's legal personal representatives.

                  (c) Notice. For the purposes of this Agreement, notices and
all other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by Certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Company shall be directed to the
attention of the Chairman of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to have been received on
the date of delivery thereof or on the third business day after the mailing
thereof, except that notice of change of address shall be effective only upon
receipt.

                  (d) Withholding. The Company shall be entitled to withhold the
amount, if any, of all taxes of any applicable jurisdiction required to be
withheld by an employer with respect to any amount paid to Executive hereunder.
The Company, in its sole and absolute


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<PAGE>

discretion, shall make all determinations as to whether it is obligated to
withhold any taxes hereunder and the amount hereof.

                  (e) Release of Claims. The Company may condition payment of
the cash termination benefits described in Sections 7(c) and 7(d) of this
Agreement upon the delivery by Executive of a signed release of claims in a form
customarily employed by the Company.

                  (f) Modification. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.

                  (g) Arbitration. If any legally actionable dispute arises
under this Agreement or otherwise which cannot be resolved by mutual discussion
between the parties, then the Company and Executive each agree to resolve that
dispute by binding arbitration before an arbitrator experienced in employment
law. Said arbitration will be conducted in accordance with the rules applicable
to employment disputes of the Judicial Arbitration and Mediation Services
("JAMS") and the law applicable to the claim. The parties shall have 30 calendar
days after notice of such arbitration has been given to attempt to agree on the
selection of an arbitrator. In the event the parties are unable to agree in such
time, JAMS will provide a list of nine available arbitrators and an arbitrator
will be selected from such nine-member panel provided by JAMS by the parties
alternately striking out one name of a potential arbitrator until only one name
remains. The party entitled to strike an arbitrator first shall be selected by a
toss of a coin. The parties agree that this agreement to arbitrate includes any
such disputes that the Company may have against Executive, or Executive may have
against the Company and/or its related entities and/or employees, arising out of
or relating to this Agreement, or Executive's employment or Executive's
termination including, but not limited to, any claims of discrimination or
harassment in violation of applicable law and any other aspect of Executive's
compensation, employment, or Executive's termination. The parties further agree
that arbitration as provided for in this Section 14(f) is the exclusive and
binding remedy for any such dispute and will be used instead of any court
action, which is hereby expressly waived, except for any request by either party
for temporary or preliminary injunctive relief pending arbitration in accordance
with applicable law or for breaches by Executive of Executive's obligations
under Sections 9 or 10 above or an administrative claim with an administrative
agency. The parties agree that the arbitration provided herein shall be
conducted in Orange County, California unless otherwise mutually agreed or
unless Executive's primary place of employment hereunder is a different
location. The parties agree to pay their own fees and expenses with respect to
any arbitration brought pursuant to this paragraph.

                  (h) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California
applicable to contracts executed in and to be performed entirely within such
State, without giving effect to the conflict of law principles thereof.


                                       13
<PAGE>

                  (i) No Conflicts. Executive represents and warrants to the
Company that he is not a party to or otherwise bound by any agreement or
arrangement (including, without limitation, any license, covenant, or commitment
of any nature), or subject to any judgment, decree, or order of any court or
administrative agency, that would conflict with or will be in conflict with or
in any way preclude, limit or inhibit Executive's ability to execute this
Agreement or to carry out his duties and responsibilities hereunder.

                  (j) Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof

                  (k) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.



                            [SIGNATURE PAGE FOLLOWS]


                                       14
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.

                                   COMMONWEALTH ENERGY CORPORATION



                                   By: /s/ IAN B. CARTER
                                       -----------------------------------------
                                       Name: Ian B. Carter
                                       Title: Chairman & Chief Executive
                                              Officer


                                   By: /s/ ROBERT PERKINS
                                       -----------------------------------------
                                       Name: Robert Perkins
                                       Title: Chairman of Compensation Committee


                                   COMMERCE ENERGY GROUP, INC.



                                   By: /s/ IAN B. CARTER
                                       -----------------------------------------
                                       Name: Ian B. Carter
                                       Title: Chairman & Chief Executive
                                              Officer


                                   EXECUTIVE



                                   By: /s/ RICHARD L. BOUGHRUM
                                       -----------------------------------------
                                       Name: RICHARD L. BOUGHRUM




                                       15