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                                                               EXHIBIT 10(hh)(2)

                               NORAM ENERGY CORP.
                    DEFERRED COMPENSATION PLAN FOR DIRECTORS

                                 First Amendment

         Arkla, Inc., a Delaware corporation (now known as NorAm Energy Corp.
and hereinafter referred to as "NorAm" or the "Company"), adopted the Arkla,
Inc. Deferred Compensation Plan for Directors, effective November 10, 1988, now
known as the NorAm Deferred Compensation Plan for Directors (the "Plan"), to
provide for the deferral of compensation of members of its Board of Directors
and members of Advisory Boards of Directors of divisions of the Company and
reserved the right to amend the Plan under Paragraph 8 thereof. On August 6,
1997, as a result of the merger by and among NorAm, Houston Industries
Incorporated ("HI"), Houston Lighting & Power Company ("HL&P"), and HI Merger
Inc., NorAm. was merged into HI Merger Inc. and became a wholly owned subsidiary
of Houston Industries Incorporated ("Houston"), the corporation formed by the
merger of HI and HL&P. As a result of the merger, Houston assumes sponsorship of
the Plan, effective August 6, 1997. Accordingly, NorAm does hereby amend the
Plan, effective August 6, 1997, as follows:

         1. The name of the Plan is hereby changed from the "Arkla, Inc.
Deferred Compensation Plan for Directors" to the "NorAm Energy Corp. Deferred
Compensation Plan for Directors."

         2. The first paragraph of the Plan is hereby amended in its entirety to
read as follows:

                  "NorAm Energy Corp. and any successor thereto (hereinafter
         referred to as the 'Company'), maintains the following plan. The
         Company, formerly known as Arkla, Inc., established the Arkla, Inc.
         Deferred Compensation Plan for Directors, which has been subsequently
         renamed the NorAm Energy Corp. Deferred Compensation Plan for Directors
         (the 'Plan'). The Plan is effective as of November 10, 1988, and all
         deferrals hereunder shall cease effective as of August 6, 1997. In all
         other respects, the Plan shall continue until the liability for all
         amounts credited to the participating Directors'


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         Deferred Compensation Accounts hereunder has been discharged, at which
         time the Plan shall automatically terminate."

         3. Paragraph 3 of the Plan is hereby amended by the addition of the
following sentence, which will appear at the end of such Paragraph:

         "Notwithstanding the foregoing, deferrals under the terms of this Plan
         will cease effective as of August 6, 1997, the effective date of the
         merger by and among Houston Industries Incorporated, Houston Lighting &
         Power Company, HI Merger, Inc. and NorAm Energy Corp."

         4. Section 8 of the Plan is hereby amended in its entirety to read as
follows:

         "8. Amendment or Termination of the Plan. The Board of Directors of
         Houston Industries Incorporated may terminate the Plan at any time and
         may amend or modify the terms of the Plan at any time and from time to
         time; provided, however, that the amendment or termination of this Plan
         shall in no way affect the rights of participating Directors or their
         designated beneficiaries or estates to the receipt of payments of
         benefits, to the extent of the aggregate amount credited to the
         Deferred Compensation Account of each participating Director at the
         time of such amendment or termination plus amounts credited thereafter
         to such account pursuant to Subparagraph (c) of Paragraph 4 hereof."

         IN WITNESS WHEREOF, NorAm Energy Corp. and Houston Industries
Incorporated have caused these presents to be executed by their duly authorized
officers in a number of copies, all of which shall constitute one and the same
instrument, which may be sufficiently evidenced by any executed copy hereof,
this 10th day of March, 1998, but effective as of August 6, 1997.

                                 NORAM ENERGY CORP.


                                 By   /s/ R. S. LETBETTER
                                      -----------------------------------------
                                      Name:    R. S. Letbetter
                                      Title:   President and Chief
                                               Operating Officer

ATTEST:


/s/ RUFUS S. SCOTT
---------------------------------



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                                 HOUSTON INDUSTRIES INCORPORATED


                                 By   /s/ LEE W. HOGAN
                                      -----------------------------------------
                                      Name:    Lee W. Hogan
                                      Title:   Executive Vice President

ATTEST:


/s/ RUFUS S. SCOTT
---------------------------------



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