Exhibit 10.3

                            ADMINISTRATION AGREEMENT

         This Administration Agreement, dated as of April __, 2001, is made by
and between PSNH Funding LLC, a Delaware limited liability company (together
with any successor thereto permitted under the Indenture, as hereinafter
defined, the "ISSUER"), and Public Service Company of New Hampshire, a New
Hampshire corporation, as Administrator (together with its permitted successors
or assigns as administrator hereunder, the "ADMINISTRATOR").

                                    RECITALS

         A. WHEREAS, the Issuer is issuing the Bonds pursuant to the Indenture
dated as of the date hereof (as amended, modified or supplemented from time to
time in accordance with the provisions thereof, the "Indenture"; capitalized
terms used herein and not defined herein shall have the meanings assigned such
terms in the Indenture), between the Issuer and The Bank of New York, as Trustee
(in such capacity, together with its successors and assigns permitted under the
Indenture, the "TRUSTEE").

         B. WHEREAS, the Issuer has entered into certain agreements in
connection with the issuance of the Bonds, including (i) a Purchase and Sale
Agreement dated as of the date hereof (as amended, modified or supplemented from
time to time in accordance with the provisions thereof, the "SALE AGREEMENT"),
between the Issuer and Public Service Company of New Hampshire, as Seller (in
such capacity, the "SELLER"), (ii) a Servicing Agreement dated as of the date
hereof (as amended, modified or supplemented from time to time in accordance
with the provisions thereof, the "SERVICING AGREEMENT"), between the Issuer and
Public Service Company of New Hampshire, as Servicer (in such capacity, together
with its successors and assigns permitted under the Servicing Agreement, the
"SERVICER"), (iii) an Underwriting Agreement dated as of April __, 2001 (as
amended, modified or supplemented from time to time in accordance with the
provisions thereof, the "UNDERWRITING AGREEMENT"), among the Issuer, Public
Service Company of New Hampshire, and the Underwriters named therein, (iv) the
Indenture, (v) a Fee and Indemnity Agreement dated as of the date hereof (as
amended, modified or supplemented from time to time in accordance with the
provisions thereof, the "FEE AGREEMENT") between the Trustee and the Issuer (the
Sale Agreement, the Servicing Agreement, the Underwriting Agreement, the
Indenture, and the Fee Agreement are hereinafter referred to collectively as the
"RELATED AGREEMENTS");

         C. WHEREAS, pursuant to the Related Agreements, the Issuer is required
to perform certain duties in connection with the Bonds and the collateral
therefor pledged pursuant to the Indenture (the "COLLATERAL") and to maintain
its existence and comply with applicable laws;

         D. WHEREAS, the Issuer has no employees and does not intend to hire any
employees, and consequently desires to have the Administrator perform certain
duties of the Issuer referred to in the preceding clause, and to provide such
additional services consistent with the terms of this Agreement and the Related
Agreements as the Issuer may from time to time request; and
<PAGE>

         E. WHEREAS, the Administrator has the capacity to provide the services
and the facilities required hereby and is willing to perform such services and
provide such facilities for the Issuer on the terms set forth herein;

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:

                                   ARTICLE I.

                             DUTIES OF ADMINISTRATOR

         Section 1.01. APPOINTMENT OF ADMINISTRATOR: ACCEPTANCE OF APPOINTMENT.
The Issuer hereby appoints the Administrator, and the Administrator hereby
accepts such appointment, to perform the Administrator's obligations pursuant to
this Agreement on behalf of and for the benefit of the Issuer in accordance with
the terms of this Agreement and applicable law.

         Section 1.02. DUTIES WITH RESPECT TO THE RELATED AGREEMENTS.

              (a) The Administrator agrees to perform all its duties as
Administrator hereunder in accordance with the terms of this Agreement and
applicable law. In addition, the Administrator shall consult with the Issuer
regarding the Issuer's duties under the Related Agreements. Unless otherwise
notified in writing by the Issuer, the Administrator shall prepare for execution
by the Issuer, or shall cause the preparation by other appropriate Persons of
all such documents, reports, filings, instruments, certificates and opinions as
it shall be the duty of the Issuer to prepare, file, obtain or deliver pursuant
to any Related Agreement. In furtherance of the foregoing, the Administrator
shall take all appropriate action that it is the duty of the Issuer to take
pursuant to the Indenture including, without limitation, such of the foregoing
as are required with respect to the following matters under the Indenture
(references are to sections of the Indenture):

              (1) the preparation of or obtaining of the Bonds and of any other
         Issuer documents and instruments required for authentication of the
         Bonds, if any, and delivery of the same to the Trustee for
         authentication (Sections 2.03 and 2.10);

              (2) the duty to cause the Register to be kept and, during any
         period of time when the Trustee is not the Registrar, to give the
         Trustee notice of any appointment of a new Registrar and the location,
         or change in location, of the Register (Section 2.05);

              (3) the fixing or causing to be fixed of any special record date
         and the notification of each affected Bondholder with respect to
         special record dates, payment dates, and the amount of defaulted
         interest (plus interest on such defaulted interest) to be paid, if any
         (Section 2.08(c));

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              (4) the preparation, obtaining or filing of the instruments,
         opinions and certificates and other documents required for the release
         of collateral (Section 2.12);

              (5) the duty to cause each newly appointed Paying Agent (other
         than the Trustee), if any, to deliver to the Trustee the instrument
         specified in the Indenture regarding its agreement with the Trustee
         (Section 3.03);

              (6) the direction to any Paying Agent to pay to the Trustee all
         sums held in trust by such Paying Agent (Section 3.03);

              (7) the preparation and filing of all documents and instruments
         necessary to maintain the Issuer's existence, rights and franchises as
         a limited liability company under the laws of the State of Delaware
         (unless the Issuer becomes, or any successor Issuer under the Indenture
         is or becomes, organized under the laws of any other State or of the
         United States of America, in which case the Administrator will prepare
         and file all documents and instruments necessary to maintain such
         Issuer's existence, rights and franchises under the laws of such other
         jurisdiction) (Section 3.04);

              (8) the obtaining and preservation of the Issuer's qualification
         to do business in each jurisdiction in which such qualification is or
         shall be necessary to protect the validity and enforceability of the
         Indenture, the Bonds, the Collateral and each other instrument or
         agreement included in the Collateral (Section 3.04);

              (9) the preparation of all supplements and amendments to the
         Indenture, filings with the NHPUC pursuant to the Statute, financing
         statements, continuation statements, instruments of further assurance
         and other instruments, in accordance with Section 3.05 of the
         Indenture, necessary to protect the Collateral (Section 3.05);

              (10) the obtaining of the Opinions of Counsel and the delivery of
         such Opinions of Counsel, in accordance with Section 3.06 of the
         Indenture, as to the Collateral (Section 3.06);

              (11) the identification to the Trustee in an Officer's Certificate
         of any Person (other than the Administrator and the Servicer) with whom
         the Issuer has contracted to perform its duties under the Indenture
         (Section 3.07(b));

              (12) the preparation and filing of all documents required under
         the Statute and the applicable Uniform Commercial Code relating to the
         transfer of the ownership or security interest in the RRB Property
         other than those required to be made by the Seller pursuant to the
         Related Agreements (Section 3.07(i));

              (13) the annual preparation and delivery of an Officer's
         Certificate to the Trustee and the Rating Agencies as to compliance
         with conditions and covenants under the Indenture (Section 3.09);

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              (14) the preparation and obtaining of documents and instruments
         required for the release of the Issuer from its obligations under the
         Indenture (Section 3.11(b));

              (15) promptly after an Authorized Officer of the Administrator has
         actual knowledge thereof, the delivery of written notice to the Trustee
         and the Rating Agencies of each Event of Default under the Indenture,
         each Servicer Default by the Servicer under and as defined in the
         Servicing Agreement and each default by the Seller of its obligations
         under the Sale Agreement (Sections 3.07(d) and 3.20);

              (16) the preparation of or obtaining of an Officer's Certificate,
         an Opinion of Counsel and Independent Certificate relating to (i) the
         satisfaction and discharge of the Indenture under Section 4.01 of the
         Indenture or (ii) the exercise of the Legal Defeasance Option or the
         Covenant Defeasance Option under Section 4.02 of the Indenture
         (Sections 4.01 and 4.02);

              (17) during any period when the Trustee is not the Registrar, the
         furnishing to the Trustee of a list of the names and addresses of
         Bondholders as required of the Issuer under Section 7.01 of the
         Indenture (Section 7.01);

              (18) to the extent not required to be performed by the Servicer,
         the preparation and, after execution by the Issuer or the Trustee (as
         the case may be), the filing with the Securities and Exchange
         Commission (the "SEC") and the Trustee of the annual reports and of the
         information, documents and other reports required to be filed on a
         periodic basis with, and summaries thereof as may be required by rules
         and regulations prescribed by, the SEC and the transmission of such
         summaries, as necessary, to the Trustee (Sections 3.07(h) and 7.03);

              (19) the notification of the Trustee if and when the Bonds are
         listed on any stock exchange (Section 7.04);

              (20) the opening of one or more segregated trust accounts in the
         Trustee's name, the preparation of Issuer Orders, and the obtaining of
         Opinions of Counsel and the taking of all other actions necessary with
         respect to investment and reinvestment of funds in the Collection
         Account, the making of written requests to the Trustee for Operating
         Expenses due and payable before any Payment Date and the making of
         Issuer Requests to obtain the release of excess funds from the Capital
         Subaccount (Sections 8.02 and 8.03);

              (21) the preparation of Issuer Requests and Officers' Certificates
         and the obtaining of an Opinion of Counsel and Independent
         Certificates, if necessary, for the release of the Collateral (Sections
         8.05 and 8.06);

              (22) the preparation of Issuer Orders and the obtaining of
         Officers' Certificates with respect to the execution of supplemental
         indentures (Sections 9.01 and 9.02);

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              (23) if required by the Trustee or the Issuer, the preparation of
         new Bonds conforming to any supplemental indenture (Section 9.04);

              (24) the preparation and delivery of the written notification of
         the Issuer or, if requested by the Trustee, to be given by the Trustee
         of any redemption of the Bonds as required under Section 10.01 or 10.04
         of the Indenture (Sections 10.01 and 10.04);

              (25) the preparation of all Officer's Certificates and obtaining
         of all Opinions of Counsel and Independent Certificates, if necessary,
         with respect to any requests by the Issuer to the Trustee to take any
         action under the Indenture (Section 11.01(a));

              (26) the preparation or obtainment and delivery of Officers'
         Certificates and Independent Certificates, if necessary, in connection
         with the deposit of any property with the Trustee that is to be made
         the basis for the release of property from the lien of the Indenture
         (Section 11.01(b));

              (27) the recording of the Indenture, if applicable, and the
         obtaining of an Opinion of Counsel in connection therewith (Section
         11.15); and

              (28) the obtaining of evidence that the Rating Agency Condition
         shall have been satisfied whenever required to be obtained under the
         Indenture or other Related Agreement.

         (b) The Administrator shall also take all appropriate action that it is
the duty of the Issuer to take pursuant to the Underwriting Agreement including,
without limitation, the following matters (references are to sections of the
Underwriting Agreement):

              (1) to the extent not already delivered, the delivery to the
         Representatives (as defined in the Underwriting Agreement) and counsel
         for the Underwriters under the Underwriting Agreement (the
         "Underwriters"), of copies of the Registration Statement (as defined in
         the Underwriting Agreement) (Section 5(a)(iv));

              (2) so long as delivery of a prospectus by an Underwriter or
         dealer may be required by the Act, the delivery to the Representatives
         and counsel for the Underwriters of as many copies of any Preliminary
         Final Prospectus and the Final Prospectus and any supplement thereto as
         the Representatives may reasonably request (Section 5(a)(iv));

              (3) to the extent not required to be performed by the Servicer,
         the preparation and, after execution by the Issuer, the filing with the
         SEC of reports on Form SR as required by Rule 463 under the Act, and
         the delivery of such reports on Form SR, as filed with the SEC, to the
         Representatives (Section 5(a)(iv));

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              (4) the preparation and, after execution by the Issuer, the filing
         of all documents and instruments necessary to qualify the Bonds for
         sale under the laws of such jurisdictions as the Representatives may
         designate, and the maintenance of such qualifications in effect so long
         as required for the distribution of the Bonds, subject to the
         qualifications, limitations and exceptions set forth in the
         Underwriting Agreement (Section 5(a)(v));

              (5) the arrangement for the determination of the legality of the
         Bonds for purchase by institutional investors (Section 5(a)(v));

              (6) to the extent not already performed by the Servicer, the
         delivery to the Representatives of the annual statements of compliance
         and the annual independent auditor's servicing reports furnished to the
         Issuer or the Trustee pursuant to the Servicing Agreement or the
         Indenture (Section 5(a)(vii));

              (7) so long as any of the Bonds are outstanding, and to the extent
         not already performed by the Servicer, the delivery to the
         Representatives of (i) a copy of any filings with the NHPUC pursuant to
         the Finance Order including, but not limited to, any Issuance Advice
         Letters and (ii) from time to time, any information concerning the
         Issuer to the extent readily available, that the Representatives may
         reasonably request (Section 5(a)(viii)); and

              (8) to the extent, if any, that any rating necessary to satisfy
         the condition set forth in Section 6(l) of the Underwriting Agreement
         is conditioned upon the furnishing of documents or the taking of other
         actions by the Issuer on or after the Closing Date (as defined in the
         Underwriting Agreement), the delivery of such documents and the taking
         of such actions (Section 5(a)(ix)).

         Section 1.03. ADDITIONAL DUTIES.

              (a) In addition to the duties of the Administrator set forth
above, the Administrator shall perform such calculations and shall prepare for
execution by the Issuer or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer to prepare, file, obtain or
deliver pursuant to the Related Agreements, and at the request of the Issuer
shall take all appropriate action that it is the duty of the Issuer to take
pursuant to the Related Agreements. Subject to Section 5.01 of this Agreement,
and in accordance with the directions of the Issuer, the Administrator shall
administer, perform or supervise the performance of such other activities in
connection with the Collateral and the Related Agreements as are not covered by
any of the foregoing provisions and as are expressly requested by the Issuer and
are reasonably within the capability of the Administrator.

              (b) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into transactions
with or otherwise deal with any of its Affiliates; provided, however, that the
terms of any such transactions or dealings shall be, in the Administrator's

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reasonable opinion, no less favorable to the Issuer than would be available from
unaffiliated parties.

         Section 1.04. NON-MINISTERIAL MATTERS.

              (a) With respect to matters that in the reasonable judgment of the
Administrator are non-ministerial, the Administrator shall not take any action
unless the Administrator shall have notified the Issuer of the proposed action
and the Issuer shall have consented. For the purpose of the preceding sentence,
"non-ministerial matters" shall include, without limitation:

              (1) the amendment of, or any supplement to, the Indenture;

              (2) the initiation of any claim or lawsuit by the Issuer and the
         compromise of any action, claim or lawsuit brought by or against the
         Issuer (other than in connection with the collection of the RRB
         Charge);

              (3) the amendment, change or modification of the Related
         Agreements;

              (4) the appointment of successor Registrars, successor Paying
         Agents and successor Trustees pursuant to the Indenture or the
         appointment of successor Administrators or successor Servicers, or the
         consent to the assignment by the Registrar, Paying Agent or Trustee of
         its obligations under the Indenture; and

              (5) the removal of the Trustee.

              (b) Notwithstanding anything to the contrary in this Agreement,
the Administrator shall not be obligated to, and hereby agrees that it shall
not, take any action that the Issuer directs the Administrator not to take on
its behalf.

         Section 1.05. RECORDS. The Administrator shall maintain appropriate
books of account and records relating to services performed hereunder, which
books of account and records shall be accessible for inspection by the Issuer
and the Trustee at any time during normal business hours.

                                  ARTICLE II.

                                   FACILITIES

         Section 2.01. FACILITIES. During the term of this Agreement, the
Administrator shall make available to or provide the Issuer with such facilities
as are necessary to conduct the business of the Issuer and to comply with the
terms of the Related Agreements. Such facilities shall include office space to
serve as the principal place of business of the Issuer. Initially such office
space will be located at 1000 Elm Street, Manchester, New Hampshire 03105-0330.
All facilities provided to the Issuer hereunder shall be provided without
warranty of any kind.

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                                  ARTICLE III.

                                  COMPENSATION

         Section 3.01. COMPENSATION. As compensation for the performance of the
Administrator's obligations under this Agreement, including the provision of
facilities pursuant to Section 2.01, the Administrator shall be entitled to an
annual fee of $52,500, payable quarterly on each Payment Date as defined in
Section 1.01(a) of the Indenture. In addition, the Issuer shall reimburse the
Administrator for all filing fees and expenses and all reasonable legal fees,
fees of outside auditors and other out-of-pocket expenses incurred by the
Administrator in the course of performing its duties hereunder. The
Administrator's compensation and other expenses payable hereunder shall be paid
from the Collection Account pursuant to Section 8.02(d) of the Indenture, and
the Administrator shall have no recourse against the Issuer for payment of such
amounts other than in accordance with Section 8.02 of the Indenture.

                                  ARTICLE IV.

                             ADDITIONAL INFORMATION

         Section 4.01. ADDITIONAL INFORMATION TO BE FURNISHED TO ISSUER. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.

                                   ARTICLE V.

                            MISCELLANEOUS PROVISIONS

         Section 5.01. INDEPENDENCE OF ADMINISTRATOR. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer with respect to the manner in which it
accomplishes the performance of its obligations hereunder. Unless expressly
authorized by the Issuer, the Administrator shall have no authority to act for
or represent the Issuer in any way and shall not otherwise be deemed an agent of
the Issuer.

         Section 5.02. NO JOINT VENTURE. Nothing contained in this Agreement
shall (a) constitute the Administrator and the Issuer as members of any
partnership, joint venture, association, syndicate, unincorporated business or
other separate entity, (b) be construed to impose any liability as such on any
of them or (c) be deemed to confer on any of them any express, implied or
apparent authority to incur any obligation or liability on behalf of the others.

         Section 5.03. OTHER ACTIVITIES OF ADMINISTRATOR. Nothing herein shall
prevent the Administrator or its Affiliates from engaging in other businesses
or, in its sole discretion, from acting in a similar capacity as an
administrator for any other Person even though such Person may engage in
business activities similar to those of the Issuer.

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         Section 5.04. TERM OF AGREEMENT: RESIGNATION AND REMOVAL OF
ADMINISTRATOR.

              (a) This Agreement shall continue in force for one year and one
day after the retirement of all Bonds issued pursuant to the Indenture.

              (b) Subject to Sections 5.04(e) and 5.04(f), the Administrator may
resign its duties hereunder by providing the Issuer with at least 60 days prior
written notice.

              (c) Subject to Sections 5.04(e) and 5.04(f), the Issuer may remove
the Administrator without cause by providing the Administrator with at least 60
days prior written notice.

              (d) Subject to Sections 5.04(e) and 5.04(f), at the sole option of
the Issuer, the Administrator may be removed immediately upon written notice of
termination from the Issuer to the Administrator if any of the following events
shall occur:

              (1) the Administrator shall default in the performance of any of
         its duties under this Agreement and, after notice of such default,
         shall not cure such default within ten days (or, if such default is
         curable but cannot be cured in such time, shall not give within ten
         days such assurance of cure as shall be reasonably satisfactory to the
         Issuer);

              (2) a court having jurisdiction in the premises shall enter a
         decree or order for relief, and such decree or order shall not have
         been vacated within 60 days, in respect of the Administrator in any
         involuntary case under any applicable bankruptcy, insolvency or other
         similar law now or hereafter in effect or appoint a receiver,
         liquidator, assignee, custodian, trustee, sequestrator or similar
         official for the Administrator or any substantial part of its property
         or order the winding-up or liquidation of its affairs; or

              (3) the Administrator shall commence a voluntary case under any
         applicable bankruptcy, insolvency or other similar law now or hereafter
         in effect, shall consent to the entry of an order for relief in an
         involuntary case under any such law, or shall consent to the
         appointment of a receiver, liquidator, assignee, trustee, custodian,
         sequestrator or similar official for the Administrator or any
         substantial part of its property, shall consent to the taking of
         possession by any such official of any substantial part of its
         property, shall make any general assignment for the benefit of
         creditors or shall fail generally to pay its debts as they become due.

The Administrator agrees that if any of the events specified in clause (2) or
(3) of this Section shall occur, it shall give written notice thereof to the
Issuer and the Trustee within seven days after the happening of such event.

              (e) No resignation or removal of the Administrator pursuant to
this Section 5.04 shall be effective until (1) a successor Administrator shall

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have been appointed by the Issuer and (2) such successor Administrator shall
have agreed in writing to be bound by the terms of this Agreement in the same
manner as the Administrator is bound hereunder.

              (f) The appointment of any successor Administrator shall be
effective only after satisfaction of the Rating Agency Condition with respect to
the proposed appointment.

         Section 5.05. ACTION UPON TERMINATION, RESIGNATION OR REMOVAL. Promptly
upon the effective date of termination of this Agreement pursuant to Section
5.04(a) or the resignation or removal of the Administrator pursuant to Sections
5.04(b), 5.04(c), or 5.04(d), respectively, the Administrator shall be entitled
to be paid all fees accruing to it and expenses accrued by it in the performance
of its duties hereunder through the date of such termination, resignation or
removal, to the extent permitted under Article III. The Administrator shall
forthwith upon such termination pursuant to Section 5.04(a) deliver to the
Issuer all property and documents of or relating to the Collateral then in the
custody of the Administrator. In the event of the resignation or removal of the
Administrator pursuant to Sections 5.04(b), 5.04(c), or 5.04(d), respectively,
the Administrator shall cooperate with the Issuer and take all reasonable steps
requested to assist the Issuer in making an orderly transfer of the duties of
the Administrator.

         Section 5.06. NOTICES. Unless otherwise specifically provided herein,
all notices, directions, consents and waivers required under the terms and
provisions of this Administration Agreement shall be in English and in writing,
and any such notice, direction, consent or waiver may be given by United States
mail, courier service, facsimile transmission or electronic mail (confirmed by
telephone, United States mail or courier service in the case of notice by
facsimile transmission or electronic mail) or any other customary means of
communication, and any such notice, direction, consent or waiver shall be
effective when delivered, or if mailed, three days after deposit in the United
States mail with proper postage for ordinary mail prepaid:

              (a) if to the Issuer, to

                           PSNH Funding LLC

                           c/o Public Service Company of New Hampshire
                           1000 Elm Street
                           Manchester, NH
                           Facsimile: (860) 665-5457
                           Telephone: (860) 665-3258
                           E-Mail:    shoopra@nu.com (email)

                           with a copy to:

                           Public Service Company of New Hampshire
                           c/o Northeast Utilities Service Company
                           if by U.S. Mail:
                           P.O. Box 270
                           Hartford, CT  06141-0270

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                           if by courier:

                           107 Selden Street
                           Berlin, CT  06037

                           Attention:  Assistant Treasurer - Finance
                           Facsimile:  (860) 665-5457
                           Telephone:  (860) 665-3258
                           E-Mail:     shoopra@nu.com


              (b) if to the Administrator, to

                           Public Service Company of New Hampshire
                           1000 Elm Street

                           Manchester, NH
                           Facsimile:  (860) 665-5457
                           Telephone:  (860) 665-3258
                           E-Mail:     shoopra@nu.com (email)

                           with a copy to:
                           Public Service Company of New Hampshire
                           c/o Northeast Utilities Service Company

                           if by U.S. Mail:

                           P.O. Box 270
                           Hartford, CT  06141-0270

                           if by courier:

                           107 Selden Street
                           Berlin, CT  06037

                           Attention:  Assistant Treasurer - Finance
                           Facsimile:  (860) 665-5457
                           Telephone:  (860) 665-3258
                           E-Mail:     shoopra@nu.com

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              (c) if to the Trustee, to

                           The Bank of New York
                           101 Barclay Street
                           Floor 12 East
                           New York, NY 10286
                           Attention: ABS Unit
                           Facsimile:  (212) 815-5563
                           Telephone:  (212) 815-5368

or to such other address as any party shall have provided to the other parties
in writing.

         Section 5.07. AMENDMENTS. This Agreement may be amended in writing by
the Administrator and the Issuer, and with the prior written consent of the
Trustee (which consent shall not unreasonably be withheld), but without the
consent of any of the Bondholders (notwithstanding any provision of any other
document that would otherwise require such consent as a precondition of Trustee
consent), to cure any ambiguity, to correct or supplement any provisions in this
Agreement or for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions in this Agreement or of modifying in
any manner the rights of the Bondholders; provided, however, that such action
shall not, as evidenced by an Officer's Certificate delivered to the Trustee,
adversely affect in any material respect the interests of any Bondholder.

         This Agreement may also be amended in writing from time to time by the
Administrator and the Issuer with the written consent of the Trustee and the
written consent of the Holders of Bonds evidencing not less than a majority of
the Outstanding Amount of the Bonds, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Bondholders; provided, however,
that no such amendment shall increase or reduce in any manner the amount of, or
accelerate or delay the timing of, RRB Charge Collections without the consent of
the Holders of all the outstanding Bonds.

         If the written consent of Bondholders is required in connection with an
amendment hereof, approval by Bondholders of the substance of any proposed
amendment or consent shall constitute sufficient consent of the Bondholders
pursuant to this Section, and it shall not be necessary that Bondholders approve
of the particular form of any amendment or consent.

         Promptly after the execution of any such amendment and the requisite
consents, if any, the Administrator shall furnish written notification of the
substance of such amendment to the Trustee and each of the Rating Agencies.

         Prior to its consent to any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
such amendment is authorized or permitted by this Agreement. The Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Trustee's own rights, duties or immunities under this Agreement or otherwise.

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         Section 5.08. SUCCESSORS AND ASSIGNS. This Agreement may not be
assigned by the Administrator unless such assignment is previously consented to
in writing by the Issuer and the Trustee and is subject to the satisfaction of
the Rating Agency Condition in respect thereof. An assignment with such consent
and satisfaction, if accepted by the assignee, shall bind the assignee hereunder
in the same manner as the Administrator is bound hereunder. Notwithstanding the
foregoing, this Agreement may be assigned by the Administrator without the
consent of the Issuer and the Trustee to a corporation or other organization
that is a successor (by merger, consolidation or purchase of assets) to the
Administrator, provided that such successor organization executes and delivers
to the Issuer and the Trustee an agreement in which such corporation or other
organization agrees to be bound hereunder by the terms of said assignment in the
same manner as the Administrator is bound hereunder and the Rating Agency
Condition is satisfied. Subject to the foregoing, this Agreement shall bind any
successors or assigns of the parties hereto.

         Section 5.09. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Administrator, the Issuer, the
Trustee, the Bondholders, the State of New Hampshire and the Treasurer of the
State of New Hampshire (the "STATE TREASURER"). The Bondholders shall be
entitled to enforce their rights and remedies against the Administrator under
this agreement solely through a cause of action brought for their benefit by the
Trustee and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
claim in the RRB Property or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein, except for the indemnities
specifically provided in Section 5.15. The Persons listed in this section as
having the benefit of this Agreement and the Indemnified Persons listed in
Section 5.15 shall have rights of enforcement with respect to their respective
rights in, to and under this Agreement.

         Section 5.10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW HAMPSHIRE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

         Section 5.11. HEADINGS. The section headings hereof have been inserted
for convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.

         Section 5.12. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when so executed shall together constitute but one
and the same agreement.

         Section 5.13. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the

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<PAGE>

remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

         Section 5.14. NONPETITION COVENANTS. Notwithstanding any prior
termination of this Agreement or the Indenture, but subject to the NHPUC's right
to order the sequestration and payment of revenues arising with respect to the
RRB Property notwithstanding any bankruptcy, reorganization or other insolvency
proceedings with respect to the Seller of the RRB Property pursuant to RSA
369-B:7, VI and RSA 369-B:7, VIII, the Administrator shall not, prior to the
date which is one year and one day after the termination of the Indenture with
respect to the Issuer, petition or otherwise invoke or cause the Issuer to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of the property of the Issuer, or ordering the
winding up or liquidation of the affairs of the Issuer.

         Section 5.15. INDEMNIFICATION. The Administrator shall indemnify the
Issuer, the Trustee, the State of New Hampshire, the State Treasurer, agencies
of the State of New Hampshire and their respective officials, officers,
directors, managers, employees, consultants, counsel and agents (each an
"INDEMNIFIED PERSON") for, and defend and hold harmless each such Person from
and against, any and all liabilities, obligations, actions, suits, claims,
losses, actual damages, payments, costs or expenses of any kind whatsoever
("LOSSES") that may be imposed on, incurred by or asserted against any such
Person as a result of the Administrator's willful misconduct or negligence in
the performance of its duties or observance of its covenants under this
Agreement; provided, however, that the Administrator shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of such
Indemnified Person. The Bondholders shall be entitled to enforce their rights
and remedies against the Administrator under this indemnification solely through
a cause of action brought for their benefit by the Trustee. The Administrator
shall not be required to indemnify an Indemnified Person for any amount paid or
payable by such Indemnified Person in the settlement of any action, proceeding
or investigation without the written consent of the Administrator, which consent
shall not be unreasonably withheld. Promptly after receipt by an Indemnified
Person of notice of its involvement in any action, proceeding or investigation,
such Indemnified Person shall, if a claim for indemnification in respect thereof
is to be made against the Administrator under this Section 5.15, notify the
Administrator in writing of such involvement. Failure by an Indemnified Person
to so notify the Administrator shall relieve the Administrator from the
obligation to indemnify and hold harmless such Indemnified Person under this
Section 5.15 only to the extent that the Administrator suffers actual prejudice
as a result of such failure. With respect to any action, proceeding or
investigation brought by a third party for which indemnification may be sought
under this Section 5.15, the Administrator shall be entitled to assume the
defense of any such action, proceeding or investigation. Upon assumption by the
Administrator of the defense of any such action, proceeding or investigation,
the Indemnified Person shall have the right to participate in such action or
proceeding and to retain its own counsel. The Administrator shall be entitled to
appoint counsel of the Administrator's choice at the Administrator's expense to
represent the Indemnified Person in any action, proceeding or investigation for

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<PAGE>

which a claim of indemnification is made against the Administrator under this
Section 5.15 (in which case the Administrator shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by the
Indemnified Person except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the Indemnified Person.
Notwithstanding the Administrator's election to appoint counsel to represent the
Indemnified Person in an action, proceeding or investigation, the Indemnified
Person shall have the right to employ separate counsel (including local
counsel), and the Administrator shall bear the reasonable fees, costs and
expenses of such separate counsel if (i) the use of counsel chosen by the
Administrator to represent the Indemnified Person would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the Indemnified Person and the
Administrator and the Indemnified Person shall have reasonably concluded that
there may be legal defenses available to it that are different from or
additional to those available to the Administrator, (iii) the Administrator
shall not have employed counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person within a reasonable time after notice
of the institution of such action or (iv) the Administrator shall authorize the
Indemnified Person to employ separate counsel at the expense of the
Administrator. Notwithstanding the foregoing, the Administrator shall not be
obligated to pay for the fees, costs and expenses of more than one separate
counsel for the Indemnified Persons (in addition to local counsel). The
Administrator will not, without the prior written consent of the Indemnified
Person, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought under this Section 5.15 (whether
or not the Indemnified Person is an actual or potential party to such claim or
action) unless such settlement, compromise or consent includes an unconditional
release of the Indemnified Person from all liability arising out of such claim,
action, suit or proceeding. The indemnities contained in this Section 5.15 shall
survive the resignation or removal of the Trustee or the termination of this
Agreement.

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

                                   PSNH FUNDING LLC, as Issuer


                                   By:
                                      ------------------------------------------
                                      Name:   Randy A. Shoop
                                      Title:  President


                                   PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE, as
                                   Administrator


                                   By:
                                      ------------------------------------------
                                      Name:   Randy A. Shoop
                                      Title:  Assistant Treasurer - Finance


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