Exhibit 4(b)


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                         THIRTY-FOURTH SUPPLEMENTAL INDENTURE
                              Dated as of August 1, 1998
                                     ------------
                            TUCSON ELECTRIC POWER COMPANY
                                          to

                              THE CHASE MANHATTAN BANK,
                                             AS TRUSTEE

                                     ------------


                    Creating a New Issue of First Mortgage Bonds,
                              Collateral Series due 2008

                                     ------------



               Supplemental to Indenture dated as of April 1, 1941, of
            The Tucson Gas, Electric Light and Power Company (predecessor
            to Tucson Electric Power Company), to The Chase National Bank
                 of the City of New York, as Trustee (predecessor to
                              The Chase Manhattan Bank).


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          <PAGE>


               THIRTY-FOURTH SUPPLEMENTAL INDENTURE, dated as of August 1,
          1998, made by and between Tucson Electric Power Company
          ("Company"), a corporation organized and existing under the laws
          of the State of Arizona, having its principal place of business
          at 220 West Sixth Street, in the City of Tucson, Arizona, party
          of the first part, and The Chase Manhattan Bank, trustee
          ("Trustee"), a banking corporation organized and doing business
          under the laws of the State of New York, having its principal
          corporate trust office at 450 W. 33rd Street, New York, N.Y., as
          Trustee, party of the second part.

               WHEREAS, The Tucson Gas, Electric Light and Power Company,
          predecessor of the Company and herein called the "Predecessor
          Company", heretofore executed and delivered to The Chase National
          Bank of the City of New York, as Trustee ("Predecessor Trustee"),
          its Indenture dated as of April 1, 1941 ("Original Indenture") to
          secure its First Mortgage Bonds, issuable in series; and

               WHEREAS, on March 31, 1955 The Chase National Bank of the
          City of New York was merged into President and Directors of the
          Manhattan Company under the name of The Chase Manhattan Bank, and
          The Chase Manhattan Bank became the successor Trustee under the
          Original Indenture as supplemented and amended; and

               WHEREAS, on February 20, 1964 the Predecessor Company was
          merged with and into the Company and the Company assumed and
          agreed to pay the principal of and premium, if any, and interest
          on all bonds then issued and outstanding under the Indenture,
          also agreeing to perform and fulfill all the covenants and
          conditions of the Indenture binding upon the Predecessor Company,
          and also agreeing that the Company succeed and be substituted for
          the Predecessor Company under the Indenture; and

               WHEREAS, on September 9, 1965 The Chase Manhattan Bank
          became The Chase Manhattan Bank (National Association) and the
          continuity of the business of The Chase Manhattan Bank including
          its business of acting as corporate trustee, and its corporate
          existence, was not affected, so that The Chase Manhattan Bank
          (National Association) was vested with all the trusts, powers,
          discretions, immunities, privileges and all other matters as were
          vested in the Predecessor Trustee under the Indenture, with like
          effect as if originally named as Trustee therein; and

               WHEREAS, on July 14, 1996 The Chase Manhattan Bank (National
          Association) merged with and into Chemical Bank and the surviving
          corporation was renamed The Chase Manhattan Bank, and The Chase
          Manhattan Bank thereby became the successor Trustee under the
          Indenture so that The Chase Manhattan Bank is vested with all the
          trusts, powers, discretions, immunities, privileges and all other
          matters as were vested in the Predecessor Trustee under the
          Indenture, with like effect as if originally named as Trustee
          therein; and 

               WHEREAS, the Company (or the Predecessor Company) has
          heretofore executed and delivered to the Trustee (or the
          Predecessor Trustee) the Original Indenture and the indentures
          supplemental thereto, and has issued the series of bonds, set
          forth below:

                        Indenture or        Date
                        Supplemental     ---------            Series
                         Indenture                           of Bonds
                        ------------                         --------
                      Original        Apr. 1, 1941    3 1/2% Series due 1966
                 1    First           Oct. 1, 1946         None
                      Second          Oct, 1, 1947    3 1/8% Series due 1977
             2,4,5    Third           Apr. 1, 1949    3 1/8% Series due 1979
               4,5    Fourth          Dec. 1, 1952    3 5/8% Series due 1982
               4,5    Fifth           Jan. 1, 1955    3 1/4% Series due 1985
               4,5    Sixth           Jan. 1, 1958    4 5/8% Series due 1988
             1,4,5    Seventh         Nov. 1, 1959    5 3/8% Series due 1989
             1,4,5    Eighth          Nov. 1, 1961    4.70%  Series due 1991
                 6    Ninth           Feb. 20, 1964        None
             1,4,5    Tenth           Feb. 1, 1965    4.55%  Series due 1995
             1,4,5    Eleventh        Feb. 1, 1966    4 7/8% Series due 1996
           2,3,4,5    Twelfth         Nov. 1. 1969    8 1/2% Series due 1999
                 2    Thirteenth      Jan. 20. 1970        None
             2,4,5    Fourteenth      Sept. 1, 1971   8 1/8% Series due 2001
               4,5    Fifteenth       Mar. 1, 1972    7.55%  Series due 2002
               4,5    Sixteenth       May 1, 1973     7.65%  Series due 2003
             1,4,5    Seventeenth     Nov. 1, 1975    10 1/2% Series due 2005
                 1    Eighteenth      Nov. 1, 1975    Poll. Control Series A
                      Nineteenth      July 1, 1976    Poll. Control Series B
             1,2,4    Twentieth       Oct. 1, 1977    8 1/2% Series due 2009
                      Twenty-First    Nov. 1, 1977    Poll. Control Series C
                      Twenty-Second   Jan. 1, 1978    Poll. Control Series D
                      Twenty-Third    July 1, 1980    Poll. Control Series E
                      Twenty-Fourth   Oct. 1, 1980    Poll. Control Series F
                 2    Twenty-Fifth    Apr. 1, 1981    Poll. Control Series A
                 1    Twenty-Sixth    Apr. 1, 1981    Poll. Control Series B
               1,2    Twenty-Seventh  Oct. 1, 1981    Poll. Control Series G
                 7    Twenty-Eighth   June 1, 1990    12.22% Series due 2000
                      Twenty-Ninth    Dec. 1, 1992    Poll. Control Series H
                      Thirtieth       Dec. 1, 1992    Ind. Develop. Series C
                      Thirty-First    May 1, 1996     Poll. Control Series I
                      Thirty Second   May 1, 1996     Poll. Control Series J
                 8    Thirty-Third    May 1, 1998     12.22% Exch. Series due
                                                      2000


                        Indenture or      Principal         Principal
                        Supplemental       Amount          Amount Out-
                         Indenture          Issued           standing  
                        ------------      ---------        -----------
                      Original         $ 3,500,000                 None
                 1    First                   None                 None
                      Second               750,000                 None
             2,4,5    Third              3,500,000                 None
               4,5    Fourth             5,000,000                 None
               4,5    Fifth              3,500,000                 None
               4,5    Sixth              7,500,000                 None
             1,4,5    Seventh            7,500,000                 None
             1,4,5    Eighth            10,000,000                 None
                 6    Ninth                   None                 None
             1,4,5    Tenth             16,000,000                 None
             1,4,5    Eleventh          10,000,000                 None
           2,3,4,5    Twelfth           15,000,000           15,000,000
                 2    Thirteenth              None                 None
             2,4,5    Fourteenth        25,000,000           25,000,000
               4,5    Fifteenth         25,000,000           25,000,000
               4,5    Sixteenth         40,000,000           40,000,000
             1,4,5    Seventeenth       50,000,000                 None
                 1    Eighteenth        15,700,000                 None
                      Nineteenth        25,000,000           23,500,000
             1,2,4    Twentieth         60,000,000           57,900,000
                      Twenty-First      32,500,000                 None
                      Twenty-Second     40,000,000           40,000,000
                      Twenty-Third      16,300,000                 None
                      Twenty-Fourth    100,000,000                 None
                 2    Twenty-Fifth     126,000,000                 None
                 1    Twenty-Sixth     163,000,000                 None
               1,2    Twenty-Seventh   100,000,000                 None
                 7    Twenty-Eighth     96,000,000           31,872,000
                      Twenty-Ninth       3,561,644                 None
                      Thirtieth         20,722,222.22              None
                      Thirty-First      18,347,124                 None
                      Thirty Second     16,149,864                 None
                 8    Thirty-Third      46,878,000           46,878,000

          -------------------
          1    Contains amendatory provisions relating to specific series.
          2    Contains general amendatory provisions.
          3    Contains general amendatory provisions required by the Trust
               Indenture Act of 1939, as amended.
          4    Incorporates covenant regarding replacement reserve (Section
               9, Article IV, of Original Indenture).
          5    Contains (or incorporates) Covenant regarding distributions
               on and acquisitions of stock (Article V of Third
               Supplemental Indenture).
          6    Contains assumption provisions.
          7    Contains modified covenant regarding distributions on and
               acquisitions of stock and negative covenants regarding
               liens, businesses other than the Utility Business and
               Investments.
          8    Contains modified covenant regarding distributions on and
               acquisitions of stock and negative covenants regarding
               businesses other than the Utility Business and a limitation
               on the aggregate principal amount of bonds which may be
               issued under the Indenture.(the Original Indenture, the
               Supplemental Indentures listed above and this Supplemental
               Indenture being herein collectively referred to as the
               "Indenture"); and

               WHEREAS, the Predecessor Company covenanted in and by the
          Original Indenture to execute and deliver such further
          instruments and do such further acts as may be necessary or
          proper to carry out more effectually the purposes of the Original
          Indenture and to make subject to the lien thereof property
          acquired after the execution and delivery of the Original
          Indenture; and

               WHEREAS, the Company proposes to create a new series of
          First Mortgage Bonds, to mature August 1, 2008, to be designated
          as First Mortgage Bonds, Collateral Series due 2008 (hereinafter
          sometimes called the "Bonds" or "Bonds of the 2008 Series"), and
          to be issued and delivered to the trustee under the 1998
          Indenture (as hereinafter defined) as the basis for the
          authentication and delivery under the 1998 Indenture of G series
          of securities, all as hereinafter provided, and to vary in
          certain respects the provisions contained in Article V of the
          Original Indenture, to the extent that such provisions apply to
          the Bonds; and

               WHEREAS, the Company, pursuant to the provisions of the
          Original Indenture, has, by appropriate corporate action, duly
          resolved and determined to execute this Supplemental Indenture
          for the purpose of providing for the creation of said Bonds of
          the 2008 Series and of specifying the form, provisions and
          particulars thereof as in said Original Indenture provided or
          permitted and of giving to the Bonds of the 2008 Series the
          protection and security of the Indenture, and of further
          confirming the lien of the Indenture upon the additional
          properties hereinafter described; and

               WHEREAS, the text of the Bonds of the 2008 Series is to be
          substantially in the form set forth on Exhibit A to this
          Supplemental Indenture; and

               WHEREAS, all acts and proceedings required by law and by the
          charter and by-laws of the Company, including all action
          requisite on the part of its shareholders, directors and officers
          necessary to make the Bonds of the 2008 Series, when executed by
          the Company, authenticated and delivered by the Trustee and duly
          issued, the valid, binding and legal obligations of the Company,
          and to constitute this Supplemental Indenture a valid, binding
          and legal indenture supplemental to the Original Indenture, in
          accordance with its and their terms, have been done and taken;
          and the execution and delivery of this Supplemental Indenture
          have been in all respects duly authorized;

               NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That
          Tucson Electric Power Company, the Company herein named, in
          consideration of the premises and of One Dollar ($1.00) to it
          duly paid by the Trustee at or before the ensealing and delivery
          of these presents, the receipt whereof is hereby acknowledged,
          and in order to secure the payment of the principal of and
          interest and premium, if any, on all bonds from time to time
          outstanding under the Indenture, according to the terms of said
          bonds and of the coupons, if any, attached thereto, and to
          further secure the performance and observance of all the
          covenants and conditions contained in said bonds and in the
          Indenture (except any covenant of the Company with respect to the
          refund or reimbursement of taxes, assessments or other
          governmental charges on account of the ownership of the bonds of
          any series or the income derived therefrom, for which the holders
          of the bonds shall look only to the Company and not to the
          property hereby mortgaged or pledged), has granted, bargained,
          sold, released, conveyed, assigned, transferred, mortgaged,
          pledged, set over and confirmed, and by these presents doth
          grant, bargain, sell, release, convey, assign, transfer,
          mortgage, pledge, set over and confirm unto THE CHASE MANHATTAN
          BANK, as Trustee, and its successor or successors in the trust
          and its assigns forever, with the same force and effect and
          subject to the same reservations, exceptions, limitations,
          restrictions, servitudes, easements, rights and privileges as
          contained in the original Indenture and to "permitted
          encumbrances" as defined in the Original Indenture, as though
          specifically described in the granting clauses of the Original
          Indenture, all and singular the premises, property, assets,
          rights and franchises of the Company (except as in the Original
          Indenture expressly excepted), whether now or hereafter owned,
          constructed or acquired, of whatever character and wherever
          situated, including, among other things (but reference to or
          enumeration of any particular kinds, classes or items or property
          shall not be deemed to exclude from the operation and effect of
          the Indenture any kind, class or item not so referred to or
          enumerated), all right, title and interest of the Company in and
          to all plants for the generation of electricity by water, steam
          and/or other power; all power houses, gas plants, gas holders,
          substations, transmission lines, distributing systems; all
          offices, buildings and structures, and the equipment thereof; all
          machinery, engines, boilers, dynamos, machines, regulators,
          meters, transformers, generators and motors; all appliances
          whether electrical, gas or mechanical, conduits, cables and
          lines; all mains and pipes, service pipes, fittings, valves and
          connections, poles, wires, tools, implements, apparatus,
          furniture, and chattels; all municipal franchises and other
          franchises; all lines for the transmission and/or distribution of
          electric current, or gas, including towers, poles, wires, cables,
          pipes, conduits, street lighting systems and all apparatus for
          use in connection therewith; all real estate, lands, leaseholds;
          all easements, servitudes, licenses, permits, rights, powers,
          franchises, privileges, rights of way and other rights in or
          relating to real estate or the occupancy of the same and all the
          right, title and interest of the Company in and to all other
          property of any kind or nature appertaining to and/or used and/or
          occupied and/or enjoyed in connection with any property
          hereinbefore described; it being the intention of the parties
          that all property of every kind, real, personal or mixed, other
          than excepted property, which may be acquired by the Company
          after the date hereof, shall, immediately upon the acquisition
          thereof by the Company, to the extent of such acquisition, and
          without any further conveyance or assignment, become and be
          subject to the direct lien on the Indenture as fully and
          completely as though now owned by the Company and specifically
          described in the Indenture.

               TOGETHER WITH all and singular the tenements, hereditaments
          and appurtenances belonging or in any wise appertaining to the
          aforesaid premises, property, assets, rights and franchises or
          any part thereof, with the reversion and reversions, remainder
          and remainders, and all the estate, right, title and interest and
          claim whatsoever, at law as well as in equity, which the Company
          now has or may hereafter acquire in and to the aforesaid
          premises, property, assets, rights and franchises and every part
          and parcel thereof.

               And the Company, for itself and its successors, does hereby
          covenant and agree to and with the Trustee and its successors in
          the trust under the Indenture, for the benefit of those who shall
          hold the bonds and coupons, or any of them, to be issued
          hereunder and thereunder, as follows:

                                      ARTICLE I.

                CREATION AND DESCRIPTION OF BONDS OF THE 2008 SERIES.

               SECTION 1. A new series of bonds to be issued under and
          secured by the Indenture is hereby created, to be designated as
          First Mortgage Bonds, Collateral Series due 2008.  The Bonds of
          the 2008 Series shall be limited to an aggregate principal amount
          of One Hundred Forty Million Dollars ($140,000,000), excluding
          any Bonds of the 2008 Series which may be authenticated in
          exchange for or in lieu of or in substitution for or on transfer
          of other Bonds of the 2008 Series pursuant to any provisions of
          the Original Indenture or of this Supplemental Indenture.  Said
          Bonds shall be substantially in the form set forth in Exhibit A
          to this Supplemental Indenture.

               All Bonds of the 2008 Series shall mature August 1, 2008. 
          The Bonds of the 2008 Series shall not bear interest.  The
          principal of the Bonds shall be payable at the office or agency
          of the Company in the Borough of Manhattan, The City of New York,
          or in the City of Tucson, upon presentation thereof, in coin or
          currency of the United States of America which at the time of
          payment shall be legal tender for the payment of public and
          private debts.  

               The Bonds of the 2008 Series shall be issued and delivered
          by the Company to Bank of Montreal Trust Company, as trustee
          under the Indenture, to be dated as of August 1, 1998, as
          supplemented (the "1998 Indenture"), of the Company to such
          trustee (the "1998 Indenture Trustee"), as the basis for the
          authentication and delivery of securities under the 1998
          Indenture.  As provided in the 1998 Indenture, the Bonds of the
          2008 Series, when so issued and delivered, will be registered in
          the name of the 1998 Indenture Trustee or its nominee and will be
          owned and held by the 1998 Indenture Trustee, subject to the
          provisions of the 1998 Indenture, for the benefit of the holders
          of all securities from time to time outstanding under the 1998
          Indenture, and the Company shall have no interest therein.  The
          Bonds of the 2008 Series shall not be transferable except as
          required to effect transfer to any successor trustee under the
          1998 Indenture.


               Anything herein to the contrary notwithstanding, any payment
          by the Company under the 1998 Indenture of the principal of the
          securities which shall have been authenticated and delivered
          under the 1998 Indenture on the basis of the delivery to the 1998
          Indenture Trustee of Bonds of the 2008 Series (other than by the
          application of the proceeds of a payment in respect of such Bonds
          of the 2008 Series) shall, to the extent thereof, be deemed to
          satisfy and discharge the obligation of the Company, if any, to
          make a payment of principal of such Bonds of the 2008 Series
          which is then due.

               The Trustee shall be entitled to presume that the obligation
          of the Company to pay the principal of the Bonds of the 2008
          Series as the same shall become due and payable, whether at
          maturity, upon redemption or otherwise, shall have been fully
          satisfied and discharged unless and until it shall have received
          a written notice from the 1998 Indenture Trustee, signed by an
          authorized officer thereof, stating that the principal of
          specified Bonds of the 2008 Series has become due and payable and
          has not been fully paid, and specifying the amount of funds
          required to make such payment.

               Each Bond shall be dated as provided in SECTION 4 of Article
          II of the Original Indenture and the Bonds of the 2008 Series
          shall be issued in fully registered form only, in denominations
          of $1,000 and multiplies thereof.

               The Bonds of the 2008 Series shall be registrable and
          exchangeable at the office or agency of the Company in the
          Borough of Manhattan, The City of New York in the manner and upon
          the terms set forth in SECTION 5 of Article II of the Original
          Indenture, without payment of any charge.  

               SECTION 2. The Bonds of the 2008 Series may be executed by
          the Company and delivered to the Trustee and, upon compliance
          with all applicable provisions and requirements of the Original
          Indenture in respect thereof, shall be authenticated by the
          Trustee and delivered (without awaiting the filing or recording
          of the Supplemental Indenture) in accordance with the written
          order or orders of the Company.


                                     ARTICLE II.

                      REDEMPTION OF THE BONDS OF THE 2008 SERIES

               SECTION 1. The Bonds of the 2008 Series shall be  redeemable
          prior to maturity at the option of the Company, as a whole at any
          time, or in part from time to time, upon at least 30 days' prior
          notice, all as provided in the Indenture, at the principal amount
          of Bonds so to be redeemed.

               SECTION 2. In the event that all or substantially all of the
          electric utility properties of the Company at the time subject to
          the lien of the Indenture shall be sold, taken by eminent domain
          or otherwise disposed of, as an entirety or substantially as an
          entirety, and shall be released from the lien of the Indenture,
          the entire award or other cash proceeds of such sale, taking or
          other disposition, together with any other Available Moneys (as
          defined in SECTION 11 of Article VII of the Original Indenture),
          if any, then held by the Trustee, shall, to the extent and in the
          manner provided in SECTION 11 of Article VII of the Original
          Indenture, be applied to the pro rata payment or redemption of
          the bonds of all series then outstanding under the Indenture, all
          as more fully provided in the Original Indenture, and the Bonds
          of the 2008 Series shall, in such event, become subject to such
          redemption or payment.  All such redemptions of the Bonds of the
          2008 Series shall be at a redemption price equal to the principal
          amount thereof.

               SECTION 3. All of the provisions of Article V of the
          Original Indenture, other than SECTIONs 2 and 3 thereof and the
          fourth paragraph of SECTION 4 thereof, shall be applicable to the
          redemption of Bonds of the 2008 Series; and the "Available
          Moneys", as defined in SECTION 11 of Article VII of the Original
          Indenture, apportioned to Bonds of the 2008 Series, shall be
          applied by the Trustee to the payment of the redemption price
          thereof, or if such apportioned Available Moneys are insufficient
          for such full payment, then, upon notice similar to that provided
          in the fourth paragraph of said SECTION 11 in respect of the
          bonds referred to therein, first to the payment of the unpaid
          interest accrued to the date fixed for payment and the balance to
          the payment of the then applicable redemption price (exclusive of
          such interest), to the extent that such moneys shall suffice, pro
          rata, as provided in SECTION 11 of Article VII of the Original
          Indenture, upon presentation and stamping in a manner similar to
          that provided by SECTION 11 of Article VII of the Original
          Indenture for the bonds referred to therein and the coupons
          appurtenant thereto.   Until the full amount then due and owing
          on all Bonds of the 2008 Series shall have been paid, no such
          partial payment shall discharge the obligation of the Company on
          such Bonds, except to the extent of such partial payment; and the
          balance of principal, if any, remaining after such payment shall
          thereafter constitute the unpaid obligation of the Company upon
          the Bonds of the 2008 Series.

               SECTION 4. The holder of each and every Bond of the 2008
          Series issued hereunder hereby agrees to accept payment thereof
          prior to maturity on the terms and conditions provided for in
          this Article II.


                                     ARTICLE III.

                                     THE TRUSTEE

                    The Trustee hereby accepts the trusts created by this
          Supplemental Indenture upon the terms and conditions in the
          Original Indenture as modified and amended and in this
          Supplemental Indenture set forth.  The Trustee shall not be
          responsible in any manner whatsoever for or in respect of the
          validity or sufficiency of this Supplemental Indenture or of the
          due execution hereof by the Company, or for or in respect of the
          recitals contained herein, all of which recitals are made by the
          Company solely.  In general, each and every term and condition
          contained in Article XII of the Original Indenture shall apply to
          this Supplemental Indenture with the same force and effect as if
          the same were herein set forth in full, with such omissions,
          variations and modifications thereof as may be appropriate to
          make the same conform to this Supplemental Indenture.



                                     ARTICLE IV.

                               MISCELLANEOUS PROVISIONS

               SECTION 1.  Subdivision (9) of SECTION 6 of Article III of
          the Original Indenture is hereby amended to read as follows:

                    (9)  An Engineer's Certificate, made and dated not more
               than 10 days prior to the date of such application, stating
               that the signers have no knowledge of and do not believe
               that there have been, since the close of the period covered
               by the Engineer's Certificate specified in subdivision (3)
               above, property retirements in an amount which (after
               reduction of such amount by amounts of the character
               referred to in Clause (D) of subdivision 3 in respect of
               such property retirements) exceeds the amount of property
               additions since the close of such period by more than the
               amount of the unapplied balance of property additions
               calculated to be remaining upon the granting of the
               application (before any reduction of such unapplied balance
               of property additions by any amount of net property
               additions applied to the withdrawal of cash deposited with
               the Trustee in connection with such property retirements).

               SECTION 2.  SECTION 1 of Article VIII of the Original
          Indenture is hereby amended to:

               (a)  insert ";or" at the end of clause (f) therein; and

               (b)  add immediately following clause (f) the following:

                         "(g) so long as the trustee under the Indenture,
                    dated as of August 1, 1998 as the same may be amended
                    and supplemented (the '1998 Indenture'), from the
                    Company to Bank of Montreal Trust Company, trustee (the
                    '1998 Indenture Trustee'), shall hold any bond
                    outstanding hereunder which were delivered to the 1998
                    Indenture Trustee as the basis for the authentication
                    and delivery of securities under the 1998 Indenture
                    which remain outstanding thereunder, an 'Event of
                    Default' under the 1998 Indenture; provided, however,
                    that, anything in this Indenture to the contrary
                    notwithstanding, the waiver or cure of such 'Event of
                    Default' and the rescission and annulment of the
                    consequences thereof shall constitute a cure of the
                    corresponding default under this Indenture and a
                    rescission and annulment of the consequences thereof."


               SECTION 3.  The holders of the Bonds of the 2008 Series
          shall be deemed to have consented to the execution and delivery
          of a supplemental indenture containing one or more, or all, of
          the amendments to the Original Indenture set forth on Exhibit B
          to this Supplemental Indenture.

               SECTION 4.  Subject to the variations contained in Article
          II of this Supplemental Indenture and the amendments heretofore
          made or contemplated in this Article IV, the Original Indenture,
          as heretofore modified, amended and supplemented, is in all
          respect ratified and confirmed, and the Original Indenture, this
          Supplemental Indenture and all other indentures supplemental to
          the Original Indenture shall be read, taken and construed as one
          and the same instrument.  Neither the execution of this
          Supplemental Indenture nor anything herein contained shall be
          construed to impair the lien of the Indenture on any of the
          property subject thereto, and such lien shall remain in full
          force and effect as security for all Bonds now outstanding or
          hereinafter issued under the Indenture.  All terms defined in
          Article I of the Original Indenture, as heretofore supplemented
          and amended, shall, for all purposes of this Supplemental
          Indenture, have the meanings in said Article I specified, unless
          the context otherwise requires.

               SECTION 5. If the date for making any payment or the last
          date for performance of any act or the exercising of any right,
          as provided in this Supplemental Indenture, shall be a legal
          holiday or a day on which banking institutions in The City of New
          York are authorized by law to remain closed, such payment may be
          made or act performed or right exercised on the next succeeding
          day not a legal holiday or a day on which such banking
          institutions are authorized by law to remain closed, with the
          same force and effect as if done on the nominal date provided in
          this Supplemental Indenture, and no interest shall accrue for the
          period after such nominal date.

               SECTION 6. This Supplemental Indenture may be executed in
          any number of counterparts, and all said counterparts executed
          and delivered, each as an original, shall constitute but one and
          the same instrument.


               IN WITNESS WHEREOF, Tucson Electric Power Company has caused
          its corporate name to be hereunto affixed, and this instrument to
          be signed by its President or a Vice President, and its corporate
          seal to be hereunto affixed and attested by its Secretary or an
          Assistant Secretary for and in its behalf; and The Chase
          Manhattan Bank has caused its corporate name to be hereunto
          affixed, and this instrument to be signed by its President, a
          Vice President or any Assistant Vice President and its corporate
          seal to be hereunto affixed and attested by its Secretary or a
          Trust Officer, for and in its behalf, all as of the day and year
          first above written. 

                                             Tucson Electric Power
                                                 Company

          Attest:                            By:
                 -----------------------        ---------------------------

                 Assistant Secretary               Vice President

          Signed, sealed and delivered
          by Tucson Electric Power
          Company in the presence of:

                                             The Chase Manhattan Bank,
                                                as Trustee
          -----------------------------


          Attest:                            By:
                 -----------------------        ---------------------------

                 Trust Officer                    Assistant Vice President

          Signed, sealed and delivered
          by The Chase Manhattan Bank
          in the presence of:

                                       
          -----------------------------


          <PAGE>


          STATE OF ARIZONA         )
                                   ): ss.:
          COUNTY OF PIMA           )

               On this 31st day of July, 1998, before me personally
          appeared Kevin P. Larson, who acknowledged himself to be a Vice
          President and duly authorized agent of Tucson Electric Power
          Company, an Arizona corporation, and that he, as such Vice
          President being authorized so to do, executed the foregoing
          instrument for the purposes therein contained, by signing the
          name of the corporation by himself as a Vice President.

               The foregoing instrument was also acknowledged before me by
          said Kevin P. Larson, Vice President of Tucson Electric Power
          Company, an Arizona corporation, on behalf of said corporation.

               IN WITNESS WHEREOF, I have hereunto set my hand and official
          seal.


                                        -------------------------------
                                        Notary Public

                                        My commission expires:


          <PAGE>


          STATE OF NEW YORK        )
                                   ): ss.:
          COUNTY OF NEW YORK       )

               On this 3rd day of August, 1998, before me personally
          appeared                         ,   such officer acknowledged
          himself to be a                           and duly authorized
          agent of The Chase Manhattan Bank, a corporation, and that he, as
          such officer being authorized so to do, executed the foregoing
          instrument for the purposes therein contained, by signing the
          name of the corporation by himself as such officer.

               The foregoing instrument was also acknowledged before me by
          said                       , a                           of The
          Chase Manhattan Bank, a corporation, on behalf of said
          corporation.

               IN WITNESS WHEREOF, I have hereunto set my hand and official
          seal.


                                         -------------------------------
                                         Notary Public

                                         My commission expires:


          <PAGE>


                                                                  EXHIBIT A

                                    [Form of Bond]

                     This bond is not transferable, except to a 
                     successor trustee under the 1998 Indenture 
                                 (as defined herein)

          No.                                           $                  
              -------------------------                  ------------------

                            TUCSON ELECTRIC POWER COMPANY
                   FIRST MORTGAGE BOND, COLLATERAL SERIES DUE 2008
                                 DUE AUGUST 1, 2008

               TUCSON ELECTRIC POWER COMPANY, a corporation of the State of
          Arizona (hereinafter sometimes called the Company), for value
          received, promises to pay to                                      
                                                 , or registered assigns,
          the principal sum of
                                                                    DOLLARS

          on August 1, 2008, in coin or currency of the United States of
          America which at the time of payment  shall be legal tender for
          the payment of public and private debts, at the office or agency
          of the Company in the Borough of Manhattan, The City of New York,
          or in the City of Tucson.  This bond shall not bear interest.

             This bond is one of an issue of bonds of the Company, issued
          and to be issued in one or more series under and equally and
          ratably secured (except as any sinking, amortization,
          improvement, renewal or other fund, established in accordance
          with the provisions of the indenture hereinafter mentioned, may
          afford additional security for the bonds of any particular
          series) by a certain mortgage and deed of trust (which, together
          with all indentures supplemental thereto, including the Thirty-
          Fourth Supplemental Indenture, dated as of August 1, 1998, is
          hereinafter called the "Indenture"), dated as of April 1, 1941,
          made by The Tucson Gas, Electric Light and Power Company (Tucson
          Electric Power Company, successor by merger) to The Chase
          National Bank of the City of New York (The Chase Manhattan Bank,
          successor by merger), now The Chase Manhattan Bank, as Trustee
          (hereinafter called the "Trustee"), to which Indenture reference
          is hereby made for a description of the property mortgaged and
          pledged, the nature and extent of the security provided by the
          Indenture, the rights and limitations of rights of the Company,
          the Trustee and the holders of said bonds with respect to the
          security provided by the Indenture, the powers, duties and
          immunities of the Trustee, the terms and conditions upon which
          said bonds are and are to be secured, and the circumstances under
          which additional bonds may be issued, to all of which provisions
          the holder, by accepting this bond, assents.  To the extent
          permitted by and as provided in the Indenture, the rights and
          obligations of the Company and the rights of the holders of said
          bonds may be changed and modified, with the consent of the
          Company, by the affirmative vote of the holders of at least 75%
          in aggregate principal amount of the bonds then outstanding
          (excluding bonds disqualified from voting by reason of the
          Company's interest therein as provided in the Indenture), or by
          the affirmative vote of the holders of at least 75% in aggregate
          principal amount of the bonds of any one or more series then
          outstanding and entitled to vote and affected by such
          modification or alteration in case one or more but less than all
          of the series of bonds then outstanding under the Indenture are
          so affected, or in either case by the written consent of the
          holders of such percentage of bonds; provided, that without the
                                               --------
          consent of the holder hereof no such modification or alteration
          shall be made which will permit the extension of the time of
          payment of the principal of or the interest on this bond or a
          reduction in the principal amount hereof, or premium, if any, or
          rate of interest hereon or any other modification of the terms of
          payment of such principal, premium or interest or will deprive
          the holder of any lien provided by the Indenture upon the
          mortgaged property or reduce the percentage of bonds required for
          the aforesaid action under the Indenture.  The Company has
          reserved the right to amend the Indenture without any consent or
          other action by holders of any series of bonds created after
          July 31, 1976 (including this series) so as to change 75% in the
          foregoing sentence to 60%.  This bond is one of a series of bonds
          designated as the First Mortgage Bonds, Collateral Series due
          2008 of the Company.

             The bonds of this series are being issued and delivered by
          the Company to Bank of Montreal Trust Company, as trustee under
          the Indenture, dated as of August 1, 1998, as supplemented (the
          "1998 Indenture"), of the Company to such trustee (the "1998
          Indenture Trustee"), as the basis for the authentication and
          delivery of securities under the 1998 Indenture.  As provided in
          the 1998 Indenture, the bonds of this series are to be registered
          in the name of the 1998 Indenture Trustee or its nominee and will
          be owned and held by the 1998 Indenture Trustee, subject to the
          provisions of the 1998 Indenture, for the benefit of the holders
          of all securities from time to time outstanding under the 1998
          Indenture, and the Company shall have no interest therein.  The
          bonds of this series shall not be transferable except as required
          to effect transfer to any successor trustee under the 1998
          Indenture.

             Anything herein to the contrary notwithstanding, any payment
          by the Company under the 1998 Indenture of the principal of the
          securities which shall have been authenticated and delivered
          under the 1998 Indenture on the basis of the delivery to the 1998
          Indenture Trustee of bonds of this series (other than by the
          application of the proceeds of a payment in respect of such bonds
          of this series) shall, to the extent thereof, be deemed to
          satisfy and discharge the obligation of the Company, if any, to
          make a payment of principal of such bonds of this series which is
          then due.

             The bonds of this series are redeemable prior to maturity at
          the option of the Company, as a whole at any time, or in part
          from time to time, upon at least 30 days' prior notice (which may
          be conditioned upon the deposit of the redemption moneys with the
          Trustee before the redemption date), all as provided in the
          Indenture, at the principal amount of bonds so to be redeemed. 

             In the event that all or substantially all of the electric
          utility properties of the Company at the time subject to the lien
          of the Indenture shall be sold, taken by eminent domain or
          otherwise disposed of, as an entirety or substantially as an
          entirety, and shall be released from the lien of the Indenture,
          the entire award or other cash proceeds of such sale, taking or
          other disposition, together with certain moneys, if any, then
          held by the Trustee, shall, to the extent and in the manner
          provided in the Indenture, be applied to the pro rata payment or
          redemption of the bonds of all series then outstanding under the
          Indenture, all as more fully provided therein, and this bond
          shall, in such event, become subject to such redemption or
          payment.  Any such redemption of this bond shall be at a
          redemption price equal to its principal amount.

             The principal of this bond may become or be declared due and
          payable before the maturity hereof, on the conditions, in the
          manner and at the times set forth in the Indenture, upon the
          happening of a default as therein provided.

             This bond is non-transferable except as required to effect
          transfer to any successor trustee under the 1998 Indenture, any
          such transfer to be made, at the office or agency of the Company
          in the Borough of Manhattan, The City of New York upon surrender
          and cancellation of this bond, and upon any such transfer a new
          bond of this series, for the same aggregate principal amount,
          will be issued to the transferee in exchange herefor. The Company
          and the Trustee may deem and treat the person in whose name this
          bond is registered as the absolute owner hereof for the purpose
          of receiving payment and for all other purposes.  This bond,
          alone or with other bonds of this series, may in like manner be
          exchanged at such office or agency for one or more new bonds of
          this series of the same aggregate principal amount, all as
          provided in the Indenture.

             No recourse shall be had for the payment of the principal of
          this bond, or for any claim based hereon or otherwise in respect
          hereof or of the Indenture, against any incorporator,
          shareholder, director or officer, as such, past, present or
          future, of the Company or of any predecessor or successor
          corporation, either directly or through the Company or any
          predecessor or successor corporation, whether by virtue of any
          constitution, statute or rule of law, or by the enforcement of
          any assessment or penalty or by any legal or equitable proceeding
          or otherwise howsoever (including, without limiting the
          generality of the foregoing, any proceeding to enforce any
          claimed liability of shareholders of the Company, based upon any
          theory of disregarding the corporate entity of the Company or
          upon any theory that the Company was acting as the agent or
          instrumentality of the shareholders); all such liability being,
          by the acceptance hereof and as a part of the consideration for
          the issuance hereof, expressly waived and released by every
          holder hereof, and being likewise waived and released by the
          terms of the Indenture under which this bond is issued, as more
          fully provided in said Indenture.

             This bond shall not be valid or become obligatory for any
          purpose until the certificate of authentication hereon shall have
          been signed by The Chase Manhattan Bank, or its successor, as
          Trustee under said Indenture.


             IN WITNESS WHEREOF, the Company has caused this bond to be
          signed in its name by the manual or facsimile signature of its
          President or one of its Vice Presidents, and its corporate seal,
          or a facsimile thereof, to be impressed or imprinted hereon and
          attested by the manual or facsimile signature of its Secretary or
          one of its Assistant Secretaries.

             Dated                    
                   -------------------
                                        TUCSON ELECTRIC POWER COMPANY

                                        By
                                          ---------------------------------
                                                   President


          Attest:


          --------------------------
              Secretary


          <PAGE>


                  [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]

               This is one of the bonds, of the series designated therein,
          described in the within-mentioned Indenture.

                                   THE CHASE MANHATTAN BANK, as Trustee

                                   By:
                                      -------------------------------


          <PAGE>


                                                                  EXHIBIT B

                       MODIFICATIONS OF THE ORIGINAL INDENTURE

               1. (a) The modification of the introductory paragraph to the
          definition of "property additions" contained in Section 4 of
          Article I of the Original Indenture to read as follows:

                    "'Property additions' shall mean any new or additional
               property (including separate and distinct units, plants,
               systems and properties), and improvements, extensions or
               additions to or about the property of the Company, in every
               case properly chargeable to the utility plant accounts of
               the Company, purchased, constructed or otherwise acquired by
               the Company and used or useful or to be used in the Utility
               Business; provided, however, that"

                                                                       ;and

               (b) The modification of subdivision (b) in the definition of
          "property additions" contained in Section 4 of Article I of the
          Original Indenture by:

                    (i)  deleting the period at the end of clause (7) of
               said subdivision (b) and replacing such period by a semi-
               colon; and

                    (ii) adding to said subdivision (b) a new clause (8)
               reading as follows:

                    "(8) Any property (other than space satellites) which
                  is located outside the territorial limits of the United
                  States of America and its coastal waters and the Dominion
                  of Canada and its coastal waters [and the United Mexican
                  States and its coastal waters]<FN1>.  'Space satellites',
                  shall mean any form of space satellites, space stations
                  and other analogous facilities (including without
                  limitation solar power satellites, stations and other
                  analogous facilities), whether or not in the Earth's
                  atmosphere."

                                                                       ;and

               (c)  The modification of the definition of "Utility
          Business" contained in Section 2 of Article I of the Original
          Indenture to read as follows:



          --------------------

               * Note: The holders of the Bonds of the 2008 Series
          shall be deemed to have consented to the modification described
          in paragraph l(b) whether or not the bracketed language is
          contained therein.


          <PAGE>


                  "'Utility Business' shall mean the business of producing,
          generating, manufacturing, transporting, transmitting,
          distributing or supplying energy or fuel in any form, including
          without limitation electricity, gas (natural or artificial) or
          solar or geothermal energy, or water or steam, for any and all
          purposes."

                                                                       ;and

               (d)  The modification of Clause (A) of subdivision 3 of
          Section 6 of Article III of the Original Indenture to read as
          follows:

                  "(A) showing the amount, if any, of the unapplied balance
               of property additions included in the most recent
               certificate, if any, theretofore filed with the Trustee,
               whether pursuant to this subdivision (3), or pursuant to
               Section 9 of this Article, or pursuant to Section 9 of
               Article VII;"

               (e)  The modification of Clause (E) of subdivision 3 of
          Section 6 of Article III of the Original Indenture to read as
          follows: 

                  "(E) showing the amount of the net property additions
               available as a basis for the authentication and delivery of
               bonds pursuant to Section 4 of this Article, which amount
               shall be determined as follows: To the amount shown in
               Clause (A) of this subdivision (3), there shall be added the
               amount of the cost or fair value, whichever shall be the
               less (such cost and/or fair value to be in all cases taken
               at the lowest amounts shown by any of the certificates
               delivered pursuant to this Section) of the property
               additions included in Clause (B) of this subdivision (3);
               and from the aggregate amount so arrived at there shall be
               deducted the amount by which the aggregate amount of the
               property retirements shown pursuant to Clause (C) of this
               subdivision (3) shall exceed the aggregate of the amounts
               shown pursuant to Clause (D) of this subdivision (3);"

               2.  The modification of Sections 2 and 5 of Article I of the
          Original Indenture by deleting the words "and verified" following
          the word "signed" from the definitions of "engineer's
          certificate", "Treasurer's certificate" and "net earnings
          certificate".

               3.  The deletion of all of the following, and any and all
          references thereto, which shall be in force and effect at the
          date of any meeting or meetings of bondholders under the Original
          Indenture: Article V of the supplemental indentures to the
          Original Indenture dated, respectively, as of April 1, 1949,
          December 1, 1952, January 1, 1955, January 1, 1958, November 1,
          1959, November 1, 1961, February 1, 1965, February 1, 1966,
          November 1, 1969, September 1, 1971, March 1, 1972, May 1, 1973
          and November 1, 1975.

               4.  (a)  The deletion of all of the following, and any and
          all references thereto, which shall be in force and effect at the
          date of any meeting or meetings of bondholders under the Original
          Indenture: Section 9 of Article IV of the Original Indenture,
          Article III of the supplemental indenture to the Original
          Indenture, dated as of October 1, 1947, and Article IV of the
          supplemental indentures to the Original Indenture, dated,
          respectively, as of April 1, 1949, December 1, 1952, January 1,
          1955, January 1, 1958, November 1, 1959, November 1, 1961,
          February 1, 1965, February 1, 1966, November 1, 1969, September
          1, 1971, March 1, 1972, May 1, 1973, November 1, 1975 and October
          1, 1977;

          or, in the alternative

               (b)  The modification of the first two paragraphs of Section
          9 of Article IV of the Original Indenture to read as follows:

                  "Section 9. So long as any of the bonds of the Series due
          1966 shall remain outstanding (unless and except to the extent
          that a regulatory body having jurisdiction shall direct a lesser
          amount), the Company will (subject to the provisions of Section 4
          of Article XI) for each calendar year, charge against income or
          earned surplus and credit to replacement reserve in respect of
          its property pertaining to the Utility Business or other reserve
          for the write-down or write-off of such property, amounts which
          shall aggregate not less than (a) ten per centum (10%) of
          its gross operating revenues from the Utility Business during
          such year remaining after deducting from such gross operating
          revenues (i) an amount equal to the cost to the Company during
          each such year of fuel in any form used or to be used in the
          Utility Business, including the cost of acquisition and
          transportation thereof, and (ii) an amount equal to the cost to
          the Company during such year of electricity and gas purchased for
          resale or exchange, less (b) the amounts expended during such
          year for maintenance of the property of the Company pertaining to
          the Utility Business.


          --------------------

               *  Note:  The holders of the Bonds of the 2008 Series
          shall be deemed to have consented to the modification described
          in paragraph 4(b) either with the percentage shown above or with
          any higher percentage.


          <PAGE>


                  Within two calendar months after December 31 of each
               year, the Company shall file with the Trustee a Treasurer's
               certificate stating:

                    (a)  The amount of its gross operating revenues from
                  the Utility Business during the next preceding year
                  remaining after deducting from such gross revenues (i)
                  the cost during such year of fuel in any form used or to
                  be used in the Utility Business, including the cost of
                  acquisition and transportation thereof, and (ii) the cost
                  during such year of electricity and gas purchased for
                  resale or exchange;

                    (b)  The amounts expended by the Company during said
                  year for maintenance of the property of the Company
                  pertaining to the Utility Business;

                    (c)  The amounts charged against income or earned
                  surplus and credited to replacement reserve in respect of
                  its property pertaining to the Utility Business or other
                  reserve for the write down or write-off of such property,
                  by the Company during such year; and

                    (d)  That the Company has complied, if such be the
                  case, with the covenant in this Section 9 contained."

          or, in the alternative

               (c)  The modification of the first two paragraphs of Section
          9 of Article IV of the Original Indenture to read as follows:

                    "Section 9. So long as any of the bonds of the Series
                  due 1966 shall remain outstanding (unless and except to
                  the extent that a regulatory body having jurisdiction
                  shall direct a lesser amount), the Company will (subject
                  to the provisions of Section 4 of Article XI) for each
                  calendar year, charge against income or earned surplus
                  and credit to replacement reserve in respect of its
                  property pertaining to the Utility Business or other
                  reserve for the write-down or write-off of such property,
                  amounts which shall aggregate not less than the lower of
                  (a)(i) two per centum (2%)<FN3> of the cost of the
                  depreciable property of the Company subject to the lien
                  of this Indenture less (ii) the amounts expended during
                  each such year for maintenance of the property of the
                  Company pertaining to the Utility Business or (b)(i) ten
                  per centum (10%)<FN4> of its gross operating revenues
                  from the Utility Business, during such year remaining
                  after deducting from such gross operating revenues (A) an
                  amount equal to the cost to the Company during such year,
                  of fuel in any form used or to be used in the Utility
                  Business, including the cost of acquisition and
                  transportation thereof, and (B) an amount equal to the
                  cost to the Company during such year of electricity and
                  gas purchased for resale or exchange less (ii) the
                  amounts expended during each such year for maintenance of
                  the property of the Company pertaining to the Utility
                  Business.


          --------------------

               *   Note:  The Trustee shall vote in favor of, or
          consent to, the modification described in paragraph 4(c) with the
          percentages shown above or with any higher percentage in either
          instance or both instances.

               

          <PAGE>


                    Within two calendar months after December 31 of each
                  year, the Company shall file with the Trustee a
                  Treasurer's certificate stating:

                     (a)  The cost of the depreciable property of the
                    Company subject to the lien of this Indenture;

                     (b)  The amount of its gross operating revenues from
                    the Utility Business during the next preceding year
                    remaining after deducting from such gross revenues (i)
                    the cost during such year of fuel in any form used or
                    to be used in the Utility Business, including the cost
                    of acquisition and transportation thereof, and (ii) the
                    cost during such year of electricity and gas purchased
                    for resale or exchange;

                     (c)  The amounts expended by the Company during said
                    year for maintenance of the property of the Company
                    pertaining to the Utility Business;

                     (d)  The amounts charged against income or earned
                    surplus and credited to replacement reserve in respect
                    of its property pertaining to the Utility Business or
                    other reserve for the write down or write-off of such
                    property, by the Company during such year; and

                     (e)  That the Company has complied, if such be the
                    case, with the covenant in this Section 9 contained".


          <PAGE>


               5.  The modification of clause (e) in subdivision (7) of
          Section 6 of Article III of the Original Indenture to read as
          follows:

                  "(e) that the Company has corporate authority and all
               necessary permission from governmental authorities to
               acquire and own such property additions;"

               6.  The modification of Clause (A) of Section 5 of Article I
          of the Original Indenture by inserting after the term "gross
          operating revenues" the parenthetical phrase "(whether or not
          collected by the Company subject to refund at a future date)".

               7.  The modification of Clause (A) of Section 5 of Article I
          of the Original Indenture by inserting after the term "net non-
          operating income", the first time it appears, the parenthetical
          phrase "(which shall be deemed to include, without limitation, an
          amount equal to the total amount of the allowance for funds used
          during construction, or any similar or analogous amount, included
          in the utility plant accounts of the Company as part of the cost
          of construction)".

               8.  The modification of Clause (A) of Section 5 of Article I
          of the Original Indenture by changing the percentage set forth in
          the proviso thereto from 15% to 25% or any percentage less than
          25%.

               9.  The modification of Section 5 of Article III of the
          Company Mortgage to read as follows:

                  "Section 5. No bonds shall be authenticated and delivered
          upon the basis of property additions unless as shown by a net
          earnings certificate the net earnings of the Company for the
          period therein referred to shall have been in the aggregate
          either (a) at least equivalent to two times the annual interest
          requirements as shown by such net earnings certificate or (b) at
          least equivalent to fifteen per centum (15%) of the
          aggregate principal amount of bonds and other indebtedness the
          annual interest requirements in respect of which are shown in
          such net earnings certificate."

               10.  The modification of the first paragraph of Section 6 of
          Article IV of the Original Indenture to read as follows:


          --------------------

               *  Note:  The holders of the Bonds of the 2008 Series
          shall be deemed to have consented to the modification described
          in paragraph 9 either with the percentage shown above or with any
          higher percentage.


          <PAGE>


                  "Section 6. That it will keep the mortgaged property
          insured against fire and other risks to the extent usually
          insured against by companies owning and operating similar
          property, by reputable insurance companies or, at the Company's
          election, with respect to all or any part of the property, by
          means of an adequate insurance fund set aside and maintained by
          it out of its own earnings or in conjunction with other companies
          through an insurance fund, trust or other agreement (the adequacy
          of such insurance fund, trust or other agreement, to be evidenced
          by a certificate to be filed with the Trustee of an independent
          actuary or other qualified person selected by the Company and
          satisfactory to the Trustee).  Any insurance policy may contain
          deductible provisions in a dollar amount per occurrence equal to
          the deductible amount usually contained in insurance policies or
          other arrangements for insurance of other companies owning and
          operating similar property, provided that the dollar amount of
          such deductible provisions may in any event be at least equal to
          5% of the aggregate principal amount of bonds outstanding
          hereunder.  Any loss from fire and such other risks, except any
          loss of merchandise, materials and supplies and except any other
          loss less than an amount equal to 5%<FN6> of the aggregate
          principal amount of bonds outstanding hereunder, shall be made
          payable to the Trustee as its interest may appear, unless
          required by the terms of any prior lien to be paid to the trustee
          or other holder thereof, as evidenced by an opinion of counsel. 
          If the Company shall insure such property in whole or in part
          through an insurance fund, trust or other agreement, it hereby
          covenants and agrees to pay to the Trustee the amount of all
          losses, except in respect of any particular loss less than
          5%<FN6> of the aggregate principal amount of bonds outstanding
          hereunder, to the extent that such amounts shall not be payable
          by insurance companies, and the amounts so required to be paid to
          the Trustee (as well as the amounts of all losses permitted to be
          retained by the Company because not in excess of 5% of the
          aggregate principal amount of bonds outstanding hereunder) shall
          be deemed to constitute proceeds of insurance for all purposes of
          this Indenture.  All moneys received by the Trustee as proceeds
          of insurance against loss or damage shall be held and applied as
          hereinafter provided.  On or prior to September 15 in each year,
          and at any other time upon the written request of the Trustee,
          the Company will furnish to the Trustee a Treasurer's certificate
          stating in substance that the Company has complied with all the
          terms and conditions of this Section, containing a detailed
          statement of the insurance then in effect upon the property of
          the Company on a date therein specified (which date shall be
          within 30 days of the filing of such certificate) and, except in
          respect of property insured by means of an insurance fund, trust
          or other agreement as permitted by this Section, showing the
          numbers of the policies of insurance in effect and the names of
          the issuing companies, the amounts of such policies, the
          deductible provisions of such policies and the property covered
          by such policies; and, in case any of the property shall at the
          time be insured by means of an insurance fund, trust or other
          agreement, as permitted by this Section, the Company shall, at
          the time of furnishing each such Treasurer's certificate, also
          furnish to the Trustee a certificate, as described above, with
          respect to the adequacy of such insurance fund, trust or other
          arrangement.  Subject to the provisions of Section 2 of Article
          XII hereof, the Trustee shall be entitled to accept any such
          Treasurer's certificate, and, if required, any such other
          certificate above described, as satisfactory evidence of
          compliance by the Company with the provisions of this Section,
          and shall be under no duty with respect to any such Treasurer's
          certificate or any such other certificate, except to exhibit the
          same to any bondholder upon request."


          --------------------

               *  Note:  The holders of the Bonds of the 2008 Series
          shall be deemed to have consented to the modification contained
          in paragraph 10 either with the percentages shown above or, in
          any instance, a lower percentage.


          <PAGE>


               11.  The modification of Section 4 of Article VII of the
          Original Indenture to read as follows:

                  "Section 4. Unless a default as defined in Section 1 of
          Article VIII hereof shall have happened and shall be continuing,
          the Trustee shall, whenever from time to time requested by the
          Company, and after being furnished with a certificate and opinion
          of counsel that all conditions precedent to the release in this
          Section provided for have been complied with, and without
          requiring compliance with any of the foregoing provisions of
          Section 3 of this Article (but subject to the requirements of
          Section 19 of Article IV hereof), release from the lien hereof
          any property (except cash, obligations or other personal property
          deposited or pledged or required to be deposited or pledged with
          the Trustee) which, as set forth in the certificate or opinion of
          an engineer, appraiser, or other expert furnished to the Trustee
          pursuant to Section 19 of Article IV hereof, is of a value not
          exceeding, in the aggregate in any period of 12 consecutive
          calendar months the greater of the sum of $25,000 or 1% of the
          aggregate principal amount of bonds at the time outstanding.  The
          Company covenants that it will forthwith deposit with the Trustee
          the consideration received by it from the disposition of any
          property so released, to be held and applied as a part of the
          mortgaged property, in the manner provided in Section 9 of this
          Article, or with the trustee or other holder of a prior lien, if
          required by the terms thereof, as evidenced by an opinion of
          counsel."


               12.  The modification of the first proviso of Section 5 of
          Article IV of the Original Indenture to read as follows:

                  "provided, however, that nothing in this Section 5
               contained shall require the Company to observe or conform to
               any requirement of governmental authority or to pay, or
               cause to be paid or discharged, or make provision for, any
               such tax, assessment, lien or charge, (a) so long as the
               validity thereof shall be contested in good faith and by
               appropriate proceedings or (b) with respect to any such
               requirement of governmental authority, so long as the
               Company shall be in good faith doing all things
               technologically and economically feasible and prudent on its
               part to observe or conform to such requirement, unless, in
               any case, any part of the mortgaged property will thereby be
               lost or forfeited;"

               13.  (a) The modification of the first sentence of Section 3
          of Article VII of the Original Indenture to read as follows:

                  "Section 3. The Company shall have the right (in addition
               to the rights conferred by Sections 2, 4 and 5 of this
               Article) at any time and from time to time, unless a default
               as defined in Section 1 of Article VIII hereof shall have
               happened and shall be continuing, to sell, dispose of or
               exchange any part of the mortgaged property (other than any
               cash, obligations or other personal property deposited or
               pledged with or required to be deposited or pledged with the
               Trustee) the ownership of which by the Company shall no
               longer be desirable in the judicious management and
               maintenance of the mortgaged property or in the conduct of
               the business of the Company, or which the Company shall have
               been directed to sell or dispose of by order of any
               governmental authority having jurisdiction in the premises,
               or shall desire to sell or dispose of in reasonable
               anticipation of the making of such an order."

                                                                      ; and

               (b)  The modification of Clause (C)(1) of Section 3 of
          Article VII of the Original Indenture to read as follows:

                  "(1) that the Company has sold, disposed of or exchanged
               or has contracted to sell, dispose of or exchange the
               property so to be released for a consideration described, in
               reasonable detail, in said certificate, and either (a) that
               such sale or exchange is desirable in the conduct of the
               business of the Company, and that the ownership by the
               Company of the property to be released is no longer
               desirable in the judicious management and maintenance of the
               mortgaged property or in the conduct of the business of the
               Company, or (b) that such sale or disposition is made to
               comply with an order or orders of a designated governmental
               authority having jurisdiction to require such sale or
               disposition, or in reasonable anticipation of the making of
               such an order;".

               14.  The amendment of Section 2 of Article I of the Original
          Indenture to add thereto a definition of the term "fair value"
          substantially to the following effect:

                  "Fair value", with respect to property, shall mean the
               fair value of such property as may be determined by
               reference to (a) the amount which would be likely to be
               obtained in an arm's-length transaction with respect to such
               property between an informed and willing buyer and an
               informed and willing seller, under no compulsion,
               respectively, to buy or sell, (b) the amount of investment
               with respect to such property which, together with a
               reasonable return thereon, would be likely to be recovered
               through ordinary business operations or otherwise, (c) the
               cost, accumulated depreciation and replacement cost with
               respect to such property and/or (d) any other relevant
               factors; provided, however, that (x) the fair value of
               property shall be determined without deduction for any prior
               liens on such property (except as otherwise provided in
               clause (2) of subparagraph (C) of Section 3 of Article VII
               and (y) the fair value to the Company of property additions
               shall not reflect any reduction relating to the fact that
               such property additions may be of less value to a person
               which is not the owner or operator of the mortgaged property
               or any portion thereof than to a person which is such owner
               or operator. Fair value may be determined, without physical
               inspection, by the use of accounting and engineering records
               and other data maintained by the Company or otherwise
               available to the engineer certifying the same.

               15.  The amendment of Section 2 of Article I of the Original
          Indenture to add thereto definitions of the terms "purchase money
          mortgage" and "purchase money obligations" substantially to the
          following effect:

                  "Purchase money mortgage" means, with respect to any
               property being acquired or disposed of by the Company or
               being released from the lien of this Indenture, a lien on
               such property which

                    (a)  is taken or retained by the transferor of such
                  property to secure all or part of the purchase price
                  thereof;

                    (b)  is granted to one or more persons other than the
                  transferor which, by making advances or incurring an
                  obligation, give value to enable the grantor of such lien
                  to acquire rights in or the use of such property;

                    (c)  is granted to any other person in connection with
                  the release of such property from the lien of this
                  Indenture on the basis of the deposit with the Trustee or
                  the trustee or other holder of a prior lien of
                  obligations secured by such lien on such property (as
                  well as any other property subject thereto);

                    (d)  is held by a trustee or agent for the benefit of
                  one or more persons described in clause (a), (b) and/or
                  (c) above, provided that such lien may be held, in
                  addition, for the benefit of one or more other persons
                  which shall have theretofore given, or may thereafter
                  give, value to or for the benefit or account of the
                  grantor of such lien for one or more other purposes; or

                    (e)  otherwise constitutes a purchase money mortgage or
                  a purchase money security interest under applicable law;

               and, without limiting the generality of the foregoing, for
               purposes of this Indenture, the term shall be deemed to
               include any lien described above whether or not such lien
               (x) shall permit the issuance or other incurrence of
               additional indebtedness secured by such lien on such
               property, (y) shall permit the subjection to such lien of
               additional property and the issuance or other incurrence of
               additional indebtedness on the basis thereof and/or (z)
               shall have been granted prior to the acquisition,
               disposition or release of such property, shall attach to or
               otherwise cover property other than the property being
               acquired, disposed of or released and/or shall secure
               obligations issued prior and/or subsequent to the issuance
               of the obligations delivered in connection with such
               acquisition, disposition or release.  The term "purchase
               money obligation" shall mean an obligation secured by a
               purchase money mortgage.

               16.  The amendment of clause (b) in subdivision (1) of
          Section 9 of Article VII or the Original Indenture to read as
          follows:

                    (b)  in an amount equal to 166 2/3% of the principal
                  amount of bonds to the authentication and delivery of
                  which the Company shall be entitled under the provisions
                  of Section 7 of Article III hereof.

               17.  The amendment of the first paragraph of Section 3 of
          Article VII of the Original Indenture to:

                  (i)         to delete therefrom the proviso in the second
               sentence of such paragraph or to provide that such proviso
               may be disregarded upon specified conditions; or

                  (ii)   to delete from such proviso the phrase "15% of";
               or

                  (iii)  to change the term 15% in such proviso therein to
               any higher percentage not exceeding one hundred per centum
               (100%).

               18.  The amendment of Section 7 of Article III of the
          Original Indenture change the semi-colon at the end of clause (4)
          in the first paragraph thereof to a period and to delete the
          remainder of said first paragraph.