Exhibit 10.23.7













                           ISO NEW ENGLAND INC.




                FERC TARIFF FOR TRANSMISSION DISPATCH AND

                       POWER ADMINISTRATION SERVICES






<PAGE>


                         TABLE OF CONTENTS

                                                                   PAGE

     1    Definitions. . . . . . . . . . . . . . . . . . . . . . . . 5
          1.1 Automatic Generation Control Market. . . . . . . . . . 5
          1.2 Calendar Year. . . . . . . . . . . . . . . . . . . . . 5
          1.3 Commission . . . . . . . . . . . . . . . . . . . . . . 5
          1.4 Customer . . . . . . . . . . . . . . . . . . . . . . . 5
          1.5 Designated Agent . . . . . . . . . . . . . . . . . . . 5
          1.6 Effective Date . . . . . . . . . . . . . . . . . . . . 5
          1.7 Energy . . . . . . . . . . . . . . . . . . . . . . . . 5
          1.8 Energy Administration Service (or "EAS") . . . . . . . 5
          1.9 Energy Market. . . . . . . . . . . . . . . . . . . . . 6
          1.10 Financial Assurance Policy. . . . . . . . . . . . . . 6
          1.11 Force Majeure . . . . . . . . . . . . . . . . . . . . 6
          1.12 Installed Capability Market . . . . . . . . . . . . . 6
          1.13 Interest. . . . . . . . . . . . . . . . . . . . . . . 6
          1.14 ISO . . . . . . . . . . . . . . . . . . . . . . . . . 6
          1.15 ISO Agreement . . . . . . . . . . . . . . . . . . . . 7
          1.16 Markets . . . . . . . . . . . . . . . . . . . . . . . 7
          1.17 Monthly RAS Expenses. . . . . . . . . . . . . . . . . 7
          1.18 NEPOOL. . . . . . . . . . . . . . . . . . . . . . . . 7
          1.19 NEPOOL Agreement. . . . . . . . . . . . . . . . . . . 7
          1.20 NEPOOL Control Area . . . . . . . . . . . . . . . . . 7
          1.21 NEPOOL Tariff . . . . . . . . . . . . . . . . . . . . 7
          1.22 Network Customer. . . . . . . . . . . . . . . . . . . 7
          1.23 Operable Capability Market. . . . . . . . . . . . . . 7
          1.24 Operating Reserve Markets . . . . . . . . . . . . . . 8
          1.25 Participant Share . . . . . . . . . . . . . . . . . . 8
          1.26 Parties . . . . . . . . . . . . . . . . . . . . . . .11
          1.27 Policy Statement. . . . . . . . . . . . . . . . . . .11
          1.28 RAS Fee . . . . . . . . . . . . . . . . . . . . . . .11
          1.29 Reliability Administration Service (or "RAS") . . . .11
          1.30 Reliability Markets . . . . . . . . . . . . . . . . .11
          1.31 Sanctions Rule. . . . . . . . . . . . . . . . . . . .11
          1.32 Scheduling, System Control and Dispatch Service (or
               "Scheduling Service") . . . . . . . . . . . . . . . .11
          1.33 Service Agreement . . . . . . . . . . . . . . . . . .12
          1.34 Services. . . . . . . . . . . . . . . . . . . . . . .12
          1.35 System Operator . . . . . . . . . . . . . . . . . . .12
          1.36 Transmission Service Agreement. . . . . . . . . . . .12

     2    Purpose of This Tariff . . . . . . . . . . . . . . . . . .12

     3    Billing and Payment. . . . . . . . . . . . . . . . . . . .14
          3.1 Billing Procedure. . . . . . . . . . . . . . . . . . .14
          3.2 Interest on Unpaid Balances. . . . . . . . . . . . . .15
          3.3 Late Payment Charge. . . . . . . . . . . . . . . . . .15
          3.4 Customer Default . . . . . . . . . . . . . . . . . . .15

     4    Regulatory Filings . . . . . . . . . . . . . . . . . . . .16

     5    Force Majeure and Indemnification. . . . . . . . . . . . .17
          5.1 Force Majeure. . . . . . . . . . . . . . . . . . . . .17
          5.2 Liability. . . . . . . . . . . . . . . . . . . . . . .17
          5.3 Indemnification. . . . . . . . . . . . . . . . . . . .18

     6    Creditworthiness . . . . . . . . . . . . . . . . . . . . .19

     7    Dispute Resolution Procedures. . . . . . . . . . . . . . .19
          7.1 Dispute Resolution Procedures. . . . . . . . . . . . .19
          7.2 Mediation. . . . . . . . . . . . . . . . . . . . . . .20
          7.3 Selection of Arbitrator. . . . . . . . . . . . . . . .20
          7.4 Costs. . . . . . . . . . . . . . . . . . . . . . . . .21
          7.5 Hearing Location . . . . . . . . . . . . . . . . . . .21
          7.6 Rules and Procedures . . . . . . . . . . . . . . . . .21

     8    Direct Billing; Sanctions. . . . . . . . . . . . . . . . .24
          8.1 Transmission Studies . . . . . . . . . . . . . . . . .24
          8.2 Information Requests . . . . . . . . . . . . . . . . .24
          8.3 Sanctions Rule . . . . . . . . . . . . . . . . . . . .24

     9    Metering . . . . . . . . . . . . . . . . . . . . . . . . .25
          9.1 Customer Obligations . . . . . . . . . . . . . . . . .25
          9.2 ISO Access to Metering Data. . . . . . . . . . . . . .25


     Schedule 1
          Scheduling, System Control and Dispatch Service. . . . . .26

     Schedule 2
          Energy Administration Service. . . . . . . . . . . . . . .29

     Schedule 3
          Reliability Administration Service . . . . . . . . . . . .32



     ATTACHMENT A
          Form of Service Agreement. . . . . . . . . . . . . . . . .35

     ATTACHMENT B
          Definitions and Provisions Extracted From NEPOOL
          Agreement and NEPOOL Tariff. . . . . . . . . . . . . . . .37

     ATTACHMENT C
          Financial Assurance Policy . . . . . . . . . . . . . . . .49

     ATTACHMENT D
          RULE 13
          Imposition of Sanctions by the ISO . . . . . . . . . . . .58

     ATTACHMENT E
          Policy Statement . . . . . . . . . . . . . . . . . . . . 101


<PAGE>


     1 Definitions

               Whenever used in this Tariff, in either the singular or

          plural number, capitalized terms shall have the meanings

          specified in Sections 1.1 to 1.36 of this Tariff or in Attachment

          B hereto.  Attachment B consists of definitions and provisions

          extracted from the NEPOOL Agreement and/or the NEPOOL Tariff.

          1.1  Automatic Generation Control Market:  The market for

               Automatic Generation Control ("AGC") administered by the ISO

               in accordance with the NEPOOL Agreement.

          1.2  Calendar Year:  A period of 365 or 366 days, whichever is

               appropriate, commencing on January 1.

          1.3  Commission:  The Federal Energy Regulatory Commission.

          1.4  Customer:  Any Entity taking any of the Services provided

               under this Tariff.

          1.5  Designated Agent:  Any Entity that performs actions or

               functions required under this Tariff on behalf of a

               Customer.

          1.6  Effective Date:  January 1, 1999.

          1.7  Energy:  Power produced in the form of electricity,

               measured in kilowatthours or megawatthours.

          1.8  Energy Administration Service (or "EAS"):  The service

               provided by the ISO, as described in Schedule 2 of this

               Tariff, in order to facilitate:  (1) bilateral Energy

               transactions; (2) self-scheduling of Energy; (3) Interchange

               Transactions in the Energy Market; and (4) Energy Imbalance

               Service under the NEPOOL Tariff.

          1.9  Energy Market:  The NEPOOL market for Energy administered

               by the ISO.

          1.10 Financial Assurance Policy:  The "Financial Assurance

               Policy for NEPOOL Members" adopted by the Participants on

               May 1, 1998, provided as Attachment C hereto, as utilized by

               the ISO, as modified and amended from time to time.

          1.11 Force Majeure:  An event of Force Majeure means any act

               of God, labor disturbance, act of the public enemy, war,

               insurrection, riot, fire, storm or flood, explosion,

               breakage or accident to machinery or equipment, any

               Curtailment, order, regulation or restriction imposed by a

               court or governmental military or lawfully established

               civilian authorities, or any other cause beyond a Party's

               control.  A Force Majeure event does not include an act of

               negligence or intentional wrongdoing.

          1.12 Installed Capability Market:  The NEPOOL market for

               Installed Capability administered by the ISO.

          1.13 Interest:  Interest calculated in the manner specified in

               Section 3.2 hereof.

          1.14 ISO:  ISO New England Inc., the non-profit independent

               system operator that, pursuant to the ISO Agreement and the

               authorization of the Commission:  (i) operates the NEPOOL

               Control Area consistent with proper standards of

               reliability; (ii) administers the NEPOOL Tariff; and (iii)

               administers a power exchange consisting of several markets

               and provides support for bilateral and self-scheduled

               transactions.

          1.15 ISO Agreement:  The Interim Independent System Operator

               Agreement made and entered into as of July 1, 1997, as

               modified from time to time, between the ISO and the

               Participants, acting by and through the NEPOOL Management

               Committee, or any successor agreement thereto.

          1.16 Markets:   Collectively, the Energy Market and the

               Reliability Markets.

          1.17 Monthly RAS Expenses:  For a month, the expenses incurred

               by the ISO during that month for providing RAS, less RAS

               Fees received during that month.

          1.18 NEPOOL:  The New England Power Pool, the power pool

               created under and governed by the NEPOOL Agreement, and the

               Entities collectively participating in the New England Power

               Pool.

          1.19 NEPOOL Agreement:  The New England Power Pool Agreement

               dated as of September 1, 1971, as amended and restated from

               time to time.

          1.20 NEPOOL Control Area:  The Control Area for NEPOOL.

          1.21 NEPOOL Tariff:  The Restated NEPOOL Open Access

               Transmission Tariff and accompanying schedules and

               attachments, as modified and amended from time to time.

          1.22 Network Customer:  An Entity receiving transmission

               service pursuant to the terms of Part II and Part VI of the

               NEPOOL Tariff.

          1.23 Operable Capability Market:  The NEPOOL market for

               Operable Capability administered by the ISO.

          1.24 Operating Reserve Markets:  Collectively, the NEPOOL

               markets for Operating Reserve administered by the ISO, and

               pending the initiation of the market for 10-Minute Spinning

               Reserve, the activities of the ISO supporting the provision

               of such reserve.

          1.25 Participant Share: Each Participant shall have a

               Participant Share in any month which shall be determined in

               accordance with the following formula:


         P          E          C          X          M          R       Y
S=.15833(--)+.15833(--)+.15833(--)+.15833(--)+.15833(--)+.15833(--)+.05(--)
          1          1          1          1          1          1       1
         P          E          C          X          M          R       Y


     in which

          S    =    the Participant Share as a percentage of the aggregate
                    Participant Shares of all Participants;

          P    =    the average for each of the most recently completed
                    twelve months of the Participant's maximum Load during
                    any clock hour in a month;

          P{1} =    the average of the sums for each of the most recently
                    completed twelve months of the noncoincidental maximum Load
                    during any clock hour in a month of all Participants;

          E    =    the average for the most recently completed twelve
                    months of the sum for each month of the Participant's
                    Load for each hour of the month PLUS any kilowatthours
                    delivered during the month to loads classified as
                    interruptible under market operation rules approved by
                    the NEPOOL Regional Market Operations Committee;

          E{1} =    the average for the most recently completed twelve months
                    of the sum for each month of the Loads of all Participants
                    for each hour of the month PLUS any kilowatthours delivered
                    during the month to loads classified as interruptible under
                    market operation rules approved by the NEPOOL Regional
                    Market Operations Committee.

          C    =    the average in megawatts for the most recently
                    completed twelve months of the sum for each month of
                    the Generation Ownership Shares of the Participant;

          C{1} =    the average in megawatts for the most recently completed
                    twelve months of the sum for each month of the Generation
                    Ownership Shares of all Participants;

          X    =    the average for the most recently completed twelve
                    months of the sum for each month of (i) a number of
                    kilowatthours EQUAL TO the Kilowatts of the
                    Participant's Generation Ownership Shares, TIMES the
                    number of hours in the month, PLUS (ii) the number of
                    kilowatthours that the Participant was entitled to
                    receive in each hour with respect to its Energy
                    Entitlements under Unit Contracts or System Contracts
                    TIMES, in the case of each contract, the number of
                    hours the contract was in effect in the month, as
                    computed without giving effect to any resale in whole
                    or part of any such Energy Entitlement;

          X{1} =    the average for the most recently completed twelve months
                    of the sum for each month of (i) a number of kilowatthours
                    EQUAL TO the Kilowatts of the Generation Ownership Shares of
                    all Participants, TIMES the number of hours in the month,
                    PLUS (ii) the number of kilowatthours that all Participants
                    were entitled to receive in each hour with respect to their
                    Energy Entitlements under Unit Contracts or System Contracts
                    TIMES, in the case of each contract, the number of hours the
                    contract was in effect in the month, as computed without
                    giving effect to any resale in whole or part of any such
                    Energy Entitlement;

          M    =    the circuit miles of the Participant's Transmission
                    Ownership Shares of PTF transmission lines TIMES, in
                    the case of each line, the nominal operating voltage of
                    the line;

          M{1} =    the aggregate of the circuit miles of the Transmission
                    Ownership Shares of PTF transmission lines of all
                    Participants TIMES, in the case of each line, the nominal
                    operating voltage of the line;

          R    =    the Annual Transmission Revenue Requirements of the
                    Participant's PTF as of the beginning of the current
                    calendar year as determined in accordance with
                    Attachment F to the NEPOOL Tariff except that 1) such
                    Revenue Requirements shall not be reduced by the
                    transmission support revenue received as described in
                    Section I of that Attachment and 2) such Revenue
                    Requirements shall not include transmission support
                    payments as described in Section J of that Attachment
                    for support arrangements which were entered into after
                    December 31, 1996;

          R{1} =    the aggregate Annual Transmission Revenue Requirements of
                    the PTF of all Participants as of the beginning of the
                    current calendar year as determined in accordance with
                    Attachment F to the NEPOOL Tariff, except that 1) such
                    Revenue Requirements shall not be reduced by the
                    transmission support revenue received as described in
                    Section I of that Attachment and 2) such Revenue
                    Requirements shall not include transmission support payments
                    as described in Section J of that Attachment for support
                    arrangements which were entered into after December 31,
                    1996;

          Y = 1;    and

          Y{1} =    the number of NEPOOL Participants at the beginning of the
                    month;

                    PROVIDED, HOWEVER, that a Participant and its Related
                    Persons may not have aggregate Participant Shares exceeding
                    25% of the aggregate Participant Shares of all Participants.
                    If the aggregate Participant Shares of a Participant and
                    its Related Persons would be in excess of 25% if it were not
                    for this limitation, the remaining Participant Shares which
                    would otherwise be allocated to such Participant and its
                    Related Persons shall be allocated to the other Participants
                    on a pro rata basis.

                    For purposes of the preceding formula (i) if an Entity has
                    been a Participant for less than twelve months, the amounts
                    to be taken into account for purposes of "P", "E", "C" and
                    "X" in the formula shall be for the period during which the
                    Entity has been a Participant; (ii) for purposes of "X" and
                    "X{1}" in the formula, the number of kilowatthours to be
                    taken into account with respect to the HQ Phase II Firm
                    Energy Contract for each Participant which has a share in
                    the HQ Phase II Firm Energy Contract shall be computed on
                    the basis of the number of Kilowatts of its HQ
                    Interconnection Capability Credit, if any, for the month as
                    calculated pursuant to the NEPOOL Agreement; and (iii) for
                    purposes of "X" and "X{1}" in the formula, the number of
                    kilowatthours to be taken into account with respect to an
                    Energy Entitlement under a Unit Contract or System Contract,
                    other than the HQ Phase II Firm Energy Contract, under which
                    a Participant is entitled to receive Energy from outside the
                    NEPOOL Control Area shall be computed on the basis of the
                    number of Kilowatts of Installed Capability credit, or
                    Monthly Peak reduction, for which the Participant is given
                    credit in determining whether it has satisfied its Installed
                    Capability Responsibility pursuant to Section 12 of the
                    NEPOOL Agreement.

          1.26 Parties:  Collectively, the ISO and the Customers; individually,

               a "Party."

          1.27 Policy Statement:  The "Policy Statement for the

               Financial Assurance Requirements and Administration Thereof

               for NEPOOL Open Access Tariff," included as Attachment E to

               this Tariff, as modified from time to time.

          1.28 RAS Fee:  The fee payable pursuant to Schedule 3 hereto

               by Transmission Customers that are not Participants.

          1.29 Reliability Administration Service (or "RAS"):  The

               service provided by the ISO, as described in Schedule 3 of

               this Tariff, in order to administer the Reliability Markets

               and provide other reliability-related and informational

               functions.

          1.30 Reliability Markets:  Collectively, the Automatic

               Generation Control Market, Installed Capability Market, the

               Operable Capability Market, and the Operating Reserve

               Markets.

          1.31 Sanctions Rule:  "Imposition of Sanctions by the ISO," a

               rule administered by the ISO, and included as Attachment D

               to this Tariff.

          1.32 Scheduling, System Control and Dispatch Service (or

               "Scheduling Service"):  The service described in Schedule 1

               of this Tariff.

          1.33 Service Agreement:  An agreement between the ISO and a

               Customer in the form provided in Attachment A hereto.

          1.34 Services:  Collectively, the Scheduling Service, EAS and

               RAS; individually, a "Service."

          1.35 System Operator: ISO New England Inc.

          1.36 Transmission Service Agreement:  The initial agreement

               and any amendments or supplements thereto entered into by

               the Transmission Customer and the ISO on behalf of the

               Participants (or filed in unexecuted form), for service

               under the NEPOOL Tariff.

     2    Purpose of This Tariff

               This Tariff is the means by which the ISO collects the

          revenues necessary to carry out its functions.  This Tariff

          contains rates, charges, terms and conditions for the following

          Services, which together encompass the functions carried out by

          the ISO:  (1) Scheduling, System Control and Dispatch Service

          (Schedule 1 hereto); (2) Energy Administration Service (Schedule

          2 hereto); and (3) Reliability Administration Service (Schedule 3

          hereto).

               The rates and charges for each Service during a Calendar

          Year are based on the allocated portion of that year's budgeted

          total expense (the "Budget Amount"), as adjusted by true-ups

          described herein.  The portion of the Budget Amount allocated to

          a Service consists of:  (1) the direct (E.G., personnel, software

          and equipment) costs of performing the Service; plus (2) in

          general, the percentage of the ISO's general and administrative

          costs determined by dividing the direct costs of providing that

          Service by the direct costs of providing all Services.

               By way of example, the Budget Amount for Calendar Year 1999

          for all Services is $38,415,141.  If the ISO determines during

          Calendar Year 1999 that collections under this Tariff (for all

          Services) will exceed 105 percent of the Budget Amount for 1999,

          the ISO will file with the Commission an amended or superseding

          tariff or rate schedule.

               For the Services described in Schedules 1 and 2, deviations

          between collections under the Tariff and the ISO's actual

          expenses will be reconciled through a year-to-year, prospective

          true-up.  For example, before the close of Calendar Year 1999,

          the ISO will compute the total actual-to-date and projected-to-

          year-end expenses of providing each of those Services, and

          compare these totals with the total charges actually collected

          (and projected to be collected through 1999) under this Tariff

          for each Service during Calendar Year 1999.  Based on these

          comparisons, the ISO will adjust the otherwise-projected revenue

          requirement for Calendar Year 2000 (I.E., the Calendar Year 2000

          Budget Amount) for either or both Services, as needed, downward

          or upward to reflect the expected Calendar Year 1999 surplus or

          deficit, respectively, while preserving a reasonable amount of

          cash working capital.  From these figures the ISO will calculate

          rates for Calendar Year 2000, and make a rate change filing for

          Calendar Year 2000 and succeeding years, as required, to reflect

          the Budget Amount for the applicable Calendar Year and the true-

          ups calculated by means of the foregoing analysis and

          adjustments.  Any deviation between projected and actual true-up

          amounts for Calendar Year 1999 will be reflected in the rate

          changes for Calendar Year 2001.  The ISO will also analyze, as

          necessary, the need for any adjustments to allocation methodology

          or rate design.

               The charges for Schedule 3 consist of actual monthly

          expenses for RAS, and thus are not subject to true-up.  The

          provision noted above limiting total annual collections to 105

          percent of the pertinent Budget Amount (for all Services)

          effectively limits the amounts collected for RAS under Schedule

          3.

               The revenues collected through this Tariff are not

          recovering funding and reimbursement of NEPOOL restructuring

          costs, including the costs relating to the separation of NEPOOL

          staff and costs associated with the design, installation and

          implementation of the Markets, which are to be recovered by the

          NEPOOL Participants through contractual arrangements.  Budget

          Amounts also do not reflect any amounts received by the ISO due

          to indemnification payments.

     3 Billing and Payment

          3.1  Billing Procedure:  By the 15th day of each month, the ISO

               shall submit an invoice to each Customer for the charges for

               all Services furnished under this Tariff during the

               preceding month.  The invoice shall be paid by the Customer

               by 10:00 a.m. Eastern Time on the first business day after

               the 19th day of the calendar month.  All payments shall be

               made by electronic funds transfer to a bank account

               designated by the ISO.  The ISO may bill Participants more

               frequently than monthly, in accordance with the Financial

               Assurance Policy.

          3.2  Interest on Unpaid Balances:  Interest on any unpaid

               amounts (including amounts placed in escrow due to a payment

               dispute as described in Section 3.3 below) shall be

               calculated and payable to the ISO in accordance with the

               methodology specified for interest on refunds in the

               Commission's regulations at 18 C.F.R. <section>

               35.19a(a)(2)(iii); PROVIDED, HOWEVER, that interest due on

               amounts placed in escrow shall be limited to the interest

               actually earned on those amounts while in escrow.  Interest

               on delinquent amounts will be calculated from the due date

               of the bill to the date of payment.

          3.3  Late Payment Charge:  In order to cover ISO expenses

               occasioned by Customers' late payments, if a Customer is

               delinquent two or more times within any period of twelve

               months in paying on time amounts owed to the ISO, the

               Customer shall pay, in addition to interest on each late

               payment, a late payment charge for its second failure to pay

               on time, and for each subsequent failure to pay on time,

               within the same twelve-month period, in an amount equal to

               the greater of (i) two percent (2%) of the total amount of

               such late payment and (ii) $250.00.  Late payment charges

               collected by the ISO will be credited proportionately to the

               revenue requirement for each Service.

          3.4  Customer Default:  In the event a Customer fails, for any

               reason other than a billing dispute as described below, to

               make payment to the ISO on or before the due date as

               described above, and such failure of payment is not

               corrected within thirty (30) calendar days after the ISO

               notifies the Customer to cure such failure, a default by the

               Customer will be deemed to exist.  Upon the occurrence of a

               default, the ISO and NEPOOL may jointly initiate a

               proceeding with the Commission to terminate the Service and

               service under the NEPOOL Agreement and/or NEPOOL Tariff (as

               applicable) but shall not terminate the Service until the

               Commission approves such termination.  In the event of a

               billing dispute between the ISO and the Customer, the

               Service will continue to be provided under the Service

               Agreement as long as the Customer (i) continues to make all

               payments not in dispute, and (ii) pays as of the bill due

               date into an independent escrow account the portion of the

               invoice in dispute, pending resolution of such dispute.  If

               the Customer fails to meet these two requirements for

               continuation of the Service, then the ISO and NEPOOL may

               jointly provide notice to the Customer of their intention to

               suspend service in sixty (60) days or such longer period as

               is provided for in the NEPOOL Agreement, in accordance with

               Commission rules and regulations, and may proceed with such

               suspension.

     4 Regulatory Filings

               Nothing contained in this Tariff or any Service  Agreement

          shall be construed as affecting in any way the right of the ISO

          to file with the Commission under Section 205 of the Federal

          Power Act and pursuant to the Commission's rules and regulations

          promulgated thereunder for a change in any rates, terms and

          conditions, charges, classification of service, Service

          Agreement, rule or regulation.

               Nothing contained in this Tariff or any Service  Agreement

          shall be construed as affecting in any way the ability of any

          Customer receiving a Service under this Tariff to exercise its

          rights under the Federal Power Act and pursuant to the

          Commission's rules and regulations promulgated thereunder.

     5    Force Majeure and Indemnification

          5.1  Force Majeure: Neither the ISO nor a Customer will be

               considered in default as to any obligation under this Tariff

               if prevented from fulfilling the obligation due to an event

               of Force Majeure; provided that no event of Force Majeure

               affecting any Entity shall excuse that Entity from making

               any payment that it is obligated to make hereunder or under

               a Service Agreement.  However, an Entity whose performance

               under this Tariff is hindered by an event of Force Majeure

               shall make all reasonable efforts to perform its obligations

               under this Tariff, and shall promptly notify the ISO or the

               Customer, whichever is appropriate, of the commencement and

               end of each event of Force Majeure .

          5.2  Liability:  The ISO shall not be liable for money damages

               or other compensation to the Customer for actions or

               omissions by the ISO in performing its obligations under

               this Tariff or Service Agreement thereunder, provided it has

               not willfully breached this Tariff or a Service Agreement or

               engaged in willful misconduct.  To the extent the Customer

               has claims against the ISO, the Customer may only look to

               the assets of the ISO for the enforcement of such claims and

               may not seek to enforce any claims against the directors,

               members, officers, employees or agents of the ISO who, the

               Customer acknowledges and agrees, have no personal liability

               for obligations of the ISO by reason of their status as

               directors, members, officers, employees or agents of the

               ISO.  In no event shall either the ISO or any Customer be

               liable for any incidental, consequential, multiple or

               punitive damages, loss of revenues or profits, attorneys

               fees or costs arising out of, or connected in any way with

               the performance or non-performance of this Tariff, any

               Service Agreement thereunder or the ISO Agreement.

          5.3  Indemnification:  Each Customer shall at all times

               indemnify, defend, and save harmless the ISO and its

               directors, officers, members, employees and agents from any

               and all damages, losses, claims and liabilities by or to

               third parties arising out of or resulting from the

               performance by the ISO under this Tariff or Service

               Agreement thereunder, any bankruptcy filings made by a

               Customer, or the actions or omissions of the Customer in

               connection with this Tariff or Service Agreement thereunder,

               except in cases of gross negligence or willful misconduct by

               the ISO or its directors, officers, members, employees or

               agents.  The amount of any indemnity payment hereunder shall

               be reduced (including, without limitation, retroactively) by

               any insurance proceeds or other amounts actually recovered

               by the indemnified party in respect of the indemnified

               action, claim, demand, cost, damage or liability.  The

               obligations of each Customer to indemnify the ISO shall be

               several, and not joint or joint and several.  A Customer's

               obligation to contribute to any indemnity payment hereunder

               shall be limited to a percentage thereof equal to the

               Customer's payments under this Tariff over the twelve (12)

               calendar months preceding the date of payment divided by the

               total payments of all Customers under this Tariff over the

               same period.

     6 Creditworthiness

               For the purpose of determining the ability of a Customer to

          meet its obligations related to a Service hereunder, the ISO will

          apply the Financial Assurance Policy (Attachment C hereto) to

          Participants and the Policy Statement (Attachment E hereto) to

          non-Participant Transmission Customers.  The Customer shall

          comply with the requirements of the Financial Assurance Policy or

          Policy Statement, as applicable.

     7 Dispute Resolution Procedures

          7.1  Dispute Resolution Procedures:  Any dispute between a

               Customer and the ISO involving Service provided under this

               Tariff (excluding applications for rate changes or other

               changes to this Tariff, or to any Service  Agreement entered

               into under this Tariff, which shall be presented directly to

               the Commission for resolution) shall be referred to a

               designated senior representative of the Customer and a

               senior representative of the ISO for resolution on an

               informal basis as promptly as practicable.  In the event the

               designated representatives are unable to resolve the dispute

               within thirty (30) days or such other period as the Parties

               may fix by mutual agreement, a Party may invoke arbitration

               by notice to the other Party and may also (with the

               agreement of the other Party) submit such dispute to

               mediation for resolution in accordance with the procedures

               set forth below.  The arbitration procedure shall not exceed

               90 calendar days from the date of the notice by the Party

               invoking arbitration (the "Aggrieved Party") to the

               arbitrator's decision unless the Parties agree upon a longer

               or shorter time.  All agreements by the ISO and Customer to

               use mediation shall establish a schedule which will control

               unless later changed by mutual agreement.

          7.2  Mediation:  All mediation proceedings are confidential and

               shall be treated as compromise and settlement negotiations

               for purposes of applicable rules of evidence.

               Notwithstanding the initiation of mediation, the arbitration

               proceeding shall proceed concurrently with the selection of

               the arbitrator pursuant to Section 7.3 hereof.

          7.3  Selection of Arbitrator:  The Parties shall attempt to

               choose by mutual agreement a single neutral arbitrator to

               hear the dispute.  If the Parties fail to agree upon a

               single arbitrator within ten calendar days of the giving of

               notice of arbitration, the American Arbitration Association

               shall be asked to appoint an arbitrator.  In either case,

               the arbitrator shall be knowledgeable in matters involving

               the electric power industry, including the operation of

               control areas and bulk power systems, and shall not have any

               substantial business or financial relationships with the

               ISO, NEPOOL or its Participants, or the Customer (other than

               previous experience as an arbitrator) unless otherwise

               mutually agreed by the Parties.

          7.4  Costs:  Each Party shall be responsible for the following

               arbitration costs, if applicable:

               (i)  its own costs incurred during the arbitration process;

                    plus

               (ii) One half of the common costs of the arbitration

                    including, but not limited to, the arbitrator's fee and

                    expenses, the rental charge for a hearing room and, if

                    both Parties agree to the necessity therefor, the cost

                    of a court reporter and transcript.

          7.5  Hearing Location:  Unless otherwise mutually agreed, the

               site for all arbitration hearings shall be Springfield,

               Massachusetts.

          7.6  Rules and Procedures:

               (1)  PROCEDURE AND DISCOVERY:  The procedural rules (if

                    any), the conduct of the arbitration and the

                    availability, extent and duration of pre-hearing

                    discovery (if any), which shall be limited to the

                    minimum necessary to resolve the matters in dispute,

                    shall be determined by the arbitrator in his/her sole

                    discretion at or prior to the initial hearing.  The

                    arbitrator shall provide each of the Parties an

                    opportunity to be heard and, except as otherwise

                    provided herein, shall generally conduct the

                    arbitration in accordance with the COMMERCIAL

                    ARBITRATION RULES OF THE AMERICAN ARBITRATION

                    ASSOCIATION.  In addition, each Party shall designate

                    one or more individuals to be available to answer

                    questions the arbitrator may have on the documents or

                    other materials submitted by that Party.  The answers

                    to all such questions shall be reduced to writing by

                    the Party providing the answer and a copy shall be

                    furnished to the other Party.

               (2)  PRE-HEARING SUBMISSIONS:  The Aggrieved Party shall

                    provide the arbitrator with a brief written statement

                    of its complaint and a statement of the remedy or

                    remedies it seeks, accompanied by copies of any

                    documents or other materials it wishes the arbitrator

                    to review.

               (3)  INITIAL HEARING:  An initial hearing will be held no

                    later than 10 days after the selection of the

                    arbitrator and shall be limited to issues raised in the

                    pre-hearing filings.  The scheduling of further

                    hearings at the request of either Party or on the

                    arbitrator's own motion shall be within the sole

                    discretion of the arbitrator.

               (4)  DECISION:  The arbitrator's decision shall be due,

                    unless the deadline is extended by mutual agreement of

                    the Parties, within thirty days of the initial hearing

                    or within ninety days of the Aggrieved Party's

                    initiation of arbitration, whichever occurs first.  The

                    arbitrator shall be authorized only to interpret and

                    apply the provisions of this Tariff or Service

                    Agreement thereunder (or, to the extent applicable, the

                    NEPOOL Agreement, NEPOOL Tariff or ISO Agreement) and

                    the arbitrator shall have no power to modify or change

                    this Tariff or Service  Agreement (or, to the extent

                    applicable, the NEPOOL Agreement, NEPOOL Tariff or ISO

                    Agreement) thereunder in any manner.  The arbitrator's

                    decision shall be in writing and shall state the basis

                    for the decision.

               (5)  EFFECT OF ARBITRATION DECISION:  The decision of the

                    arbitrator will be conclusive in a subsequent

                    regulatory or legal proceeding as to the facts

                    determined by the arbitrator but will not be conclusive

                    as to the law or constitute precedent on issues of law

                    in any subsequent regulatory or legal proceedings.

                         An Aggrieved Party may initiate a proceeding  with

                    a court or with the Commission with respect to the

                    arbitration or arbitrator's decision only:

                    o    if the arbitration process does not result in a

                         decision within the time period specified and the

                         proceeding is initiated within thirty days after

                         the expiration of such time period; or

                    o    on the grounds specified in Sections 10 and 11

                         of Title 9 of the United States Code for judicial

                         vacation or modification of an arbitration award

                         and the proceeding is initiated within thirty days

                         of the issuance of the arbitrator's decision.

     8 Direct Billing; Sanctions

          8.1  Transmission Studies:  The ISO will conduct and coordinate

               certain System Impact Studies pursuant to, and in accordance

               with, the NEPOOL Tariff and the NEPOOL Agreement.  In

               addition, the ISO will conduct and coordinate certain

               Facilities Studies pursuant to, and in accordance with, the

               NEPOOL Tariff and the NEPOOL Agreement. The costs of System

               Impact Studies and Facilities Studies will be charged

               directly to the pertinent Eligible Customers or

               interconnection applicants.  The ISO will include in a

               separate operating revenue account or subaccount any

               revenues received for System Impact Studies or Facilities

               Studies (excluding the costs of study contractors which are

               directly charged to study requestors) which represent costs

               for ISO staff or related overhead, and these revenues and

               any other miscellaneous revenues will be credited to revenue

               requirements for the Scheduling Service.

          8.2  Information Requests:  In fulfilling information requests

               of a significant and non-routine nature, the ISO will charge

               its associated direct and indirect costs to the requestor.

               Revenue from these charges will be credited to revenue

               requirements for the Service to which the information

               request is most closely related.

          8.3  Sanctions Rule:  Amounts collected by the ISO during a

               month from Participants pursuant to the Sanctions Rule shall

               be a credit to that month's Monthly RAS Expenses; provided,

               however, that a sanctioned Participant shall receive no part

               of such credit attributable to a payment made by such

               sanctioned Participant.  The part of such credit

               attributable to the sanctioned Participant's payment shall

               be allocated among the Participants (excluding the

               sanctioned Participant) on the basis of a recalculation of

               Voting Share (determined in accordance with the NEPOOL

               Agreement) excluding the factors associated with the

               sanctioned Customer.

     9 Metering

          9.1  Customer Obligations:  The Customer shall be responsible

               for compliance with metering requirements under the NEPOOL

               Tariff and any applicable local transmission provider's

               tariff and to communicate the metering information to the

               ISO.

          9.2  ISO Access to Metering Data:  The ISO will have access to

               such metering data as may reasonably be required to

               facilitate measurements and billing under this Tariff and

               Service Agreement, the NEPOOL Agreement, the NEPOOL Tariff,

               or other arrangements for which the ISO is required to bill.


<PAGE>


                                 Schedule 1

               Scheduling, System Control and Dispatch Service



          Scheduling, System Control and Dispatch Service ("Scheduling

     Service") is the service required to schedule at the pool level the

     movement of power through, out of, within, or into the NEPOOL Control

     Area.  It is anticipated that local level service would be provided

     under the Local Network Service tariffs of the individual Transmission

     Providers.  For Transmission Service under the NEPOOL Tariff,

     Scheduling Service is an Ancillary Service that can be provided only

     by the ISO and all Transmission Customers must be Customers under this

     Tariff and purchase this Service from the ISO.  Customers must enter

     into a Service Agreement of the type specified in Attachment A hereto.

     The ISO's charges stated herein for Scheduling Service are based on

     the expenses incurred by the ISO in providing this Service.  In

     addition, the ISO acts as a billing agent for the operators of the

     NEPOOL satellite dispatch centers and certain Participants in order to

     collect their expenses incurred in providing this service pursuant to

     Schedule 1 of the NEPOOL Tariff.

          The ISO's expenses are based on the functions required to provide

     this Service and include, but are not limited to:

          o    Processing and implementation of requests for

               Transmission Service, including support of the NEPOOL OASIS

               node;

          o    Coordination of transmission system operation (including

               administration of reactive power requirements under Schedule

               2 of the NEPOOL Tariff) and implementation of necessary

               control actions by the ISO and support for these functions;

          o    Billing associated with transmission services provided

               under the NEPOOL Tariff;

          o    Transmission system planning which supports this Service;

               and

          o    Administrative costs associated with the aforementioned

               functions.

          The satellite dispatch center expenses and the Participant

     expenses collected pursuant to Schedule 1 of the NEPOOL Tariff are in

     each case an allocated portion of dispatch center expense for the PTF

     dispatch functions performed.

          For the ISO's expenses in providing transmission-related Scheduling

     Service, each Customer that is obligated to pay the Regional Network

     Service rate shall pay each month an amount equal to the product of

     $0.0420 per kilowatt times its Monthly Network Load for that month;

     the annual charge per kilowatt is $0.5036.  Each Customer that is a

     Transmission Customer receiving Point-to-Point Transmission Service

     shall pay each month an amount equal to the product of the

     Transmission Customer's highest amount of Reserved Capacity (expressed

     in kilowatts) for each transaction scheduled to occur during the month

     as Point-to-Point Transmission Service times:

          (1)  for each month of firm annual or monthly service, $0.0420;

          (2)  for each week of firm weekly service, $0.0097;

          (3)  for each day of firm daily service, $0.0019, but the rate
               for 5 to 7 consecutive days may not exceed the per-week
               rate;

          (4)  for each month of non-firm annual or monthly service,
               $0.0420;

          (5)  for each week of non-firm weekly service, $0.0097;

          (6)  for each day of non-firm daily service, $0.0014; and

          (7)  for each hour of non-firm hourly service, $0.0006.

          The ISO shall also collect from each Customer, as billing agent,

     the charges specified in Schedule 1 of the NEPOOL Tariff.

          All general terms and conditions of this Tariff apply to this

     Service.


<PAGE>


                                Schedule 2

                      Energy Administration Service



          Energy Administration Service ("EAS") is the Service provided by

     the ISO to administer the Energy Market and facilitate Interchange

     Transactions, bilateral transactions and self-scheduling in accordance

     with the NEPOOL Agreement and the corresponding rules promulgated

     thereunder.  Each Participant that buys, sells, or produces Energy

     utilizes EAS (even when utilizing bilateral transactions or self-

     scheduling, because the ISO must account for these activities and

     implement them) and must purchase EAS as a Customer hereunder.  Each

     non-Participant Transmission Customer that receives Energy pursuant to

     Schedule 4 of the NEPOOL Tariff (I.E., Energy Imbalance Service)

     utilizes EAS and must purchase EAS as a Customer hereunder.  Each

     Customer must enter into a Service Agreement of the type specified in

     Attachment A hereto.

          The ISO's expenses are based on the functions required to provide

     this Service and include, but are not limited to:

          o    Core operation of the Energy Market;

          o    Generation dispatch related to the Energy Market;

          o    Energy accounting;

          o    Loss determination and allocation;

          o    Billing preparation;

          o    Administration of the Energy Imbalance Service under
               Schedule 4 of the NEPOOL Tariff;

          o    Market power monitoring and mitigation for the Energy
               Market;

          o    Sanctions activities;

          o    Market assessment and reports; and

          o    Formulation of additional market rules and proposals to
               modify existing rules.

          For EAS, each Participant shall pay each month in arrears:  (1)

     an amount equal to the product of $0.0000698 per kilowatt-hour times

     the Customer's total Electrical Load for all hours in that month; and

     (2) an amount equal to the product of $0.0000263 per kilowatt-hour

     times the sum of:  (a) a number of kilowatt-hours equal to the

     kilowatts of the Customer's Generation Ownership Shares for that

     month, times the number of hours in the month, plus (b) the total

     number of kilowatt-hours that the Customer was entitled to receive

     during that month with respect to its Energy Entitlements under Unit

     Contracts or System Contracts (taking into account, in the case of

     each contract, the number of hours the contract was in effect in the

     month), as computed without giving effect to any resale in whole or

     part of any such Energy Entitlement; plus (c) the absolute value of

     the sum of the kilowatt-hours of the Customer's ANI in the hours of

     that month in which the Customer's ANI is a negative number; provided

     that if a Participant has both a Generation Ownership Share in a

     generating unit as the result of its Related Person affiliation with

     the owner of the generating unit and an Energy Entitlement as the

     result of its purchase of Energy from the same generating unit, the

     Participant's Energy Entitlement with respect to such purchase shall

     be excluded from consideration under Part (b) of the formula.  For

     purposes of this paragraph, a Customer's Electrical Load, Generation

     Ownership Shares and Energy Entitlements shall be calculated subject

     to the provisions of NEPOOL Agreement Section 3.2.

          For EAS, a Customer that is not a Participant shall pay each

     month in arrears an amount equal to the product of $0.0000263 per

     kilowatt-hour times the number of kilowatt-hours of Energy Imbalance

     Service taken by the Customer during that month.

          All general terms and conditions of this Tariff apply to this

     Service.


<PAGE>


                               Schedule 3

                   Reliability Administration Service



          Reliability Administration Service ("RAS") is the Service

     provided by the ISO to administer the Reliability Markets (and

     facilitate reliability-associated transactions and arrangements) in

     accordance with the NEPOOL Agreement and the corresponding rules

     promulgated thereunder, and to provide other reliability and

     informational services.  Each Participant (and each Transmission

     Customer that is not a Participant) benefits (as do their respective

     customers) from the reliability ensured by the administration of the

     Reliability Markets and associated services, and therefore must

     purchase RAS as a Customer hereunder.  The Reliability Markets are

     also a means by which certain Ancillary Services are obtained under

     the NEPOOL Tariff.  Each Customer must enter into a Service Agreement

     of the type specified in Attachment A hereto.

          The ISO's administrative expenses are based on the functions

     required to provide this Service and include, but are not limited to:

          o    Generation dispatch associated with Reliability Markets;

          o    Reliability Markets accounting;

          o    Billing preparation;

          o    NEPOOL generation emissions analysis;

          o    Risk profile updates;

          o    Triennial review of resource adequacy;

          o    Preparation of regional reports and load forecasts and
               profiles (CELT, EIA, NERC);

          o    Support of power supply, environmental and market
               reliability planning activities;

          o    Reliability Markets:  market power monitoring, mitigation
               and assessment; and

          o    Formulation of additional Market rules and proposals to

               modify existing rules.

          For RAS:  (1) Each Transmission Customer that is not a

     Participant shall pay each month, in arrears, a RAS Fee (corresponding

     to the Transmission Service taken in that month) in the following

     amounts:

          (a)  Entities required to make a payment for Regional Network
               Service in a month, $500 (whether firm or non-firm);

          (b)  for each month of annual or monthly Point-to-Point
               Transmission Service received, $500;

          (c)  for each week of weekly Point-to-Point Transmission Service
               received (whether firm or non-firm), $115.38;

          (d)  for each day of firm daily Point-to-Point Transmission
               Service received, $23.07, provided that the rate for 5 to 7
               consecutive days may not exceed the "per week" rate;

          (e)  for each day of non-firm daily Point-to-Point Transmission
               Service received, $16.48; and

          (f)  for each hour of non-firm hourly Point-to-Point Transmission
               Service received, $0.69;

     and (2) each Customer that is a Participant shall pay each month in

     arrears, an amount equal to the product of its Participant Share as of

     the end of that month and the Monthly RAS Expenses.


          RAS does not include any amounts paid by the ISO on behalf of the

     Participants to purchase emergency power.  If one or more states

     requires Participants to undertake disclosure or tracking obligations

     that result in the ISO incurring expenses, the ISO will segregate the

     expenses associated with such obligations.

          All general terms and conditions of this Tariff apply to this

     Service.


<PAGE>


                                 ATTACHMENT A

                         Form of Service Agreement


     1.0  This Service Agreement, dated as of __________ , is entered
          into, by and between ISO New England Inc. __________________ (the
          "ISO") and __________ ("Customer") pursuant to the ISO's Tariff
          for Transmission Dispatch and Power Administration Services (the
          "Tariff").

     2.0  Service under this Service Agreement shall commence on the later
          of (1) the requested service commencement date or (2) such other
          date as it is permitted to become effective by the Commission.
          Service under this Service Agreement shall terminate on such date
          as is mutually agreed upon by the parties, except as otherwise
          provided under the Tariff.

     3.0  The ISO agrees to provide, and the Customer agrees to take and
          pay for, Services indicated below in accordance with the
          provisions of the Tariff and this Service Agreement:

          Scheduling, System Control and Dispatch Service (Schedule 1)
          Energy Administration Service (Schedule 2)
          Reliability Administration Service (Schedule 3)

     4.0  Any notice or request made to or by either party regarding this
          Service Agreement shall be made to the representative of the
          other party as indicated below.


      ISO:

               [Title]
               ISO New England Inc.
               One Sullivan Road
               Holyoke, MA 01040-2841


      CUSTOMER:
               ___________________________
               ___________________________
               ___________________________
               ___________________________
               ___________________________


     5.0  The Tariff is incorporated in this Service Agreement and made a
          part hereof.


     IN WITNESS WHEREOF, the Parties have caused this Service Agreement to
     be executed by their respective authorized officials.


          ISO NEW ENGLAND INC.:



          By:___________________ __________ _____________
             Name                Title      Date




          CUSTOMER:



          By:___________________ __________ _____________
             Name                Title      Date


<PAGE>


                                ATTACHMENT B

                  Definitions and Provisions Extracted From
                     NEPOOL Agreement and NEPOOL Tariff


          Adjusted Net Interchange (or "ANI"):  The Adjusted Net
     Interchange of a Participant for an hour is (a) the kilowatts produced
     by or delivered to the Participant from its Energy Entitlements or
     pursuant to arrangements entered into under Section 14.6 of the NEPOOL
     Agreement as adjusted in accordance with uniform market operation
     rules approved by NEPOOL's Regional Market Operations Committee to
     take account of losses, as appropriate, MINUS (b) the sum of (i) the
     Electrical Load of the Participant for the hour, and (ii) the
     kilowatt-hours delivered by such Participant to other Participants
     pursuant to Firm Contracts or System Contracts in accordance with the
     treatment agreed to by the parties thereto and reported to the ISO,
     together with any associated electrical losses.

          Ancillary Services:  Those services that are necessary to support the
     transmission of electric capacity and energy from resources to loads
     while maintaining reliable operation of the NEPOOL Transmission System
     in accordance with Good Utility Practice.

          Automatic Generation Control (or "AGC"):  A measure of the ability of
     a generating unit or portion thereof to respond automatically within a
     specified time to a remote direction from the ISO to increase or
     decrease the level of output in order to control frequency and to
     maintain currently proper power flows into and out of the NEPOOL
     Control Area.

          Control Area:  An electric power system or combination of electric
     power systems to which a common automatic generation control scheme is
     applied in order to:

          (1)  match, at all times, the power output of the generators
               within the electric power system(s) and capacity and energy
               purchased from entities outside the electric power
               system(s), with the load within the electric power
               system(s);
          (2)  maintain scheduled interchange with other Control Areas,
               within the limits of Good Utility Practice;
          (3)  maintain the frequency of the electric power system(s)
               within reasonable limits in accordance with Good Utility
               Practice and the criteria of the applicable regional
               reliability council or the North American Electric
               Reliability Council; and
          (4)  provide sufficient generating capacity to maintain operating
               reserves in accordance with Good Utility Practice.


<PAGE>


          Curtailment:  A reduction in firm or non-firm transmission
     service in response to a transmission capacity shortage as a result of
     system reliability conditions.

          Electrical Load:  Electrical Load (in kilowatts) of a Participant
     during any particular hour is the total during such hour (eliminating
     any distortion arising out of (i) Interchange Transactions, or (ii)
     transactions across the system of such Participant, or (iii)
     deliveries between Entities constituting a single Participant, or (iv)
     other electrical losses, if and as appropriate), of

          (a)  kilowatt-hours provided by such Participant to its retail
               customers for consumption, PLUS
          (b)  kilowatt-hours of use by such Participant, PLUS
          (c)  kilowatt-hours of electrical losses and unaccounted for use
               by the Participant on its system, PLUS
          (d)  kilowatt-hours used by such Participant for pumping Energy
               for its Entitlements in pumped storage hydroelectric
               generating facilities, PLUS
          (e)  kilowatt-hours delivered by such Participant to Non-
               Participants.

          The Electrical Load of a Participant may be calculated in any
     reasonable manner which substantially complies with this definition.

          Eligible Customer: (i) Any Participant that is engaged, or
     proposes to engage, in the wholesale or retail electric power business
     is an Eligible Customer under the NEPOOL Tariff. (ii) Any electric
     utility (including any power marketer), Federal power marketing
     agency, or any other entity generating electric energy for sale for
     resale is an Eligible Customer under the NEPOOL Tariff.  Electric
     energy sold or produced by such entity may be electric energy produced
     in the United States, Canada or Mexico.  However, with respect to
     transmission service that the Commission is prohibited from ordering
     by Section 212(h) of the Federal Power Act, such entity is eligible
     only if the service is provided pursuant to a state requirement that
     the Transmission Provider with which the entity is directly
     interconnected offer the unbundled transmission service, or pursuant
     to a voluntary offer of such service by the Transmission Provider with
     which the entity is directly interconnected.  (iii) Any end user
     taking or eligible to take unbundled transmission service pursuant to
     a state requirement that the Transmission Provider with which that end
     user is directly interconnected offer the transmission service, or
     pursuant to a voluntary offer of such service by the Transmission
     Provider with which that entity is directly interconnected, is an
     Eligible Customer under the NEPOOL Tariff.

          Energy Entitlement:  An Energy Entitlement is (i) a right to
     receive Energy under a System Contract or a Firm Contract, or (ii) a
     right to receive all or a portion of the electric output of a
     generating unit or units to which an Entity is entitled as an owner
     (either sole or in common) or as a purchaser pursuant to a Unit
     Contract, REDUCED BY (iii) any portion thereof which such Entity is
     selling pursuant to a Unit Contract. An Energy Entitlement in a
     generating unit or units may, but need not, be combined with any other
     Entitlements relating to such generating unit or units and may be
     transferred separately from the related Installed Capability
     Entitlement, Operable Capability Entitlement, Operating Reserve
     Entitlements, or AGC Entitlement.

          Entitlement:  An Installed Capability Entitlement, Operable
     Capability Entitlement, Energy Entitlement, Operating Reserve
     Entitlement, or AGC Entitlement.  When used in the plural form, it may
     be any or all such Entitlements or combinations thereof, as the
     context requires.

          Entity:  Any person or organization whether in the United States of
     America or Canada or a state or province or a political subdivision
     thereof or a duly established agency of any of them, a private
     corporation, a partnership, an individual, an electric cooperative or
     any other person or organization recognized in law as capable of
     owning property and contracting with respect thereto that is either:

          (a)  engaged in the electric power business (the
               generation and/or transmission and/or distribution
               of electricity for consumption by the public or
               the purchase, as a principal or broker, of
               Installed Capability, Operable Capability, Energy,
               Operating Reserve, and/or AGC for resale); or

          (b)  an end user of electricity that is taking or eligible to
               take unbundled transmission service pursuant to an effective
               state requirement that the Participant that is the
               Transmission Provider with which that end user is directly
               interconnected offer the transmission service, or pursuant
               to a voluntary offer of unbundled transmission service to
               that end user by the Participant that is the Transmission
               Provider with which that end user is directly
               interconnected.

          Facilities Study:  An engineering study conducted pursuant to the
     NEPOOL Agreement or the NEPOOL Tariff by the ISO and/or one or more
     affected Participants to determine the required modifications to the
     NEPOOL Transmission System, including the cost and scheduled
     completion date for such modifications, that will be required to
     provide a requested transmission service or interconnection.

          Firm Contract:  Any contract, other than a Unit Contract, for the
     purchase of Installed Capability, Operable Capability, Energy,
     Operating Reserves, and/or AGC, pursuant to which the purchaser's
     right to receive such Installed Capability, Operable Capability,
     Energy, Operating Reserves, and/or AGC is subject only to the
     supplier's inability to make deliveries thereunder as the result of
     events beyond the supplier's reasonable control.

          Generator Owner: The owner, in whole or part, of a generating
     unit whether located within or outside of the NEPOOL Control Area.

          Generation Ownership Shares: The Generation Ownership Shares of a
     Customer means and includes:

          (a)  the direct ownership interest which the Customer has as a
               sole or joint owner in the Installed Capability of a
               generating unit which is subject to NEPOOL central dispatch;

          (b)  the indirect ownership interest which the Customer has, as a
               shareholder in Vermont Yankee Nuclear Power Corporation or a
               similar corporation, or as a general or limited partner in
               Ocean State Power or a similar partnership, in the Installed
               Capability of a generating unit which is subject to NEPOOL
               central dispatch, provided the corporation or partnership is
               itself not a Participant;

          (c)  any other interest which the Customer has in the Installed
               Capability of a generating unit which is subject to NEPOOL
               central dispatch, under a lease or other contractual
               arrangement, provided the other party to the arrangement is
               itself not a Participant and the NEPOOL Management Committee
               determines, at the request of the affected Customer, that
               the Customer has benefits and rights, and assumes risks,
               under the arrangement with respect to the unit which are
               substantially equivalent to the benefits, rights and risks
               of an owner; and

          (d)  an interest which the Customer shall be deemed to have in
               the direct ownership interest, or the indirect ownership
               interest as a shareholder or general or limited partner, of
               a Related Person of the Customer in the Installed Capability
               of a generating unit which is subject to NEPOOL central
               dispatch, provided the Related Person is itself not a
               Participant.

          Good Utility Practice:  Any of the practices, methods and acts
     engaged in or approved by a significant portion of the electric
     utility industry during the relevant time period, or any of the
     practices, methods and acts which, in the exercise of reasonable
     judgment in light of the facts known at the time the decision was
     made, could have been expected to accomplish the desired result at a
     reasonable cost consistent with good business practices, reliability,
     safety and expedition.  Good Utility Practice is not intended to be
     limited to the optimum practice, method, or act to the exclusion of
     all others, but rather includes all acceptable practices, methods, or
     acts generally accepted in the region.


<PAGE>


          HQ Phase II Firm Energy Contract:  The Firm Energy Contract dated
     as of October 14, 1985 between Hydro-Quebec and certain of the
     Participants, as it may be amended from time to time.

          Installed Capability: The Installed Capability of an electric
     generating unit or combination of units during the Winter Period is
     the Winter Capability of such unit or units and during the Summer
     Period is the Summer Capability of such unit or units.

          Interchange Transactions:  Transactions deemed to be effected under
     Section 12 of the Prior NEPOOL Agreement (that is, the agreement as in
     effect on December 1, 1996) prior to the Second Effective Date, and
     transactions deemed to be effected under Section 14 of the NEPOOL
     Agreement on and after the Second Effective Date.

          Internal Point-to-Point Service: Point-to-Point Transmission
     Service with respect to a transaction where the Point of Receipt is at
     the boundary of or within the NEPOOL Transmission System and the Point
     of Delivery is within the NEPOOL Transmission System.

          Load:  (in Kilowatts) of a Participant during any particular hour
     is the total during such hour (eliminating any distortion arising out
     of (i) Interchange Transactions, or (ii) transactions across the
     system of such Participant, or (iii) deliveries between Entities
     constituting a single Participant, or (iv) other electrical losses, if
     and as appropriate) of

          (a)  kilowatthours provided by such Participant to its retail
               customers for consumption (excluding any kilowatthours which
               may be classified as interruptible under market operation
               rules approved by the NEPOOL Regional Market Operations
               Committee), PLUS

          (b)  kilowatthours delivered by such Participant pursuant to Firm
               Contracts to its wholesale customers for resale, PLUS

          (c)  kilowatthours of use by such Participant, exclusive of use
               by such Participant for the operation and maintenance of its
               generating unit or units, PLUS

          (d)  kilowatthours of electrical losses and unaccounted for use
               by the Participant on its system.

     The Load of a Participant may be calculated in any reasonable manner
     which substantially complies with this definition.

          For the purposes of calculating a Participant's Monthly Peak, the
     Load of a Participant shall be adjusted to eliminate any distortions
     resulting from voltage reductions.  In addition, upon the request of
     any Participant, the NEPOOL Regional Market Operations Committee shall
     make, or supervise the making of, appropriate adjustments in the
     computation of Load for the purposes of calculating any Participant's
     Annual Peak, Adjusted Monthly Peak, Adjusted Annual Peak and Monthly
     Peak to eliminate any distortions resulting from emergency load
     curtailments which would significantly affect the Load of any
     Participant.

          The definition of the term "Load" is modified as follows when a
     Participant purchases a portion of its requirements of electricity
     from another Participant pursuant to a Firm Contract:

          (a)  If the Firm Contract limits deliveries to a specifically
               stated number of Kilowatts and requires payment of a demand
               charge thereon (thus placing the responsibility for meeting
               additional demands on the purchasing Participant):

               (1)  in computing the ADJUSTED LOAD of the purchasing
                    Participant, the Kilowatts received pursuant to such
                    Firm Contract shall be deemed to be the number of
                    Kilowatts specified in the Firm Contract; and

               (2)  in computing the LOAD of the supplying Participant, the
                    Kilowatts delivered pursuant to such Firm Contract
                    shall be deemed to be the number of Kilowatts specified
                    in the Firm Contract.

          (b)  If the Firm Contract does not limit deliveries to a
               specifically stated number of Kilowatts, but entitles the
               Participant to receive such amounts of electricity as it may
               require to supply its electric needs (thus placing the
               responsibility for meeting additional demands on the
               supplying Participant):

               (1)  the INSTALLED CAPABILITY RESPONSIBILITY of the
                    purchasing Participant shall be EQUAL TO the amount of
                    its Installed Capability Entitlements;

               (2)  in computing the ADJUSTED LOAD of the purchasing
                    Participant, the Kilowatts received pursuant to such
                    Firm Contract shall be deemed to be a quantity R{l};
                    and

               (3)  in computing the LOAD of the supplying Participant, the
                    Kilowatts delivered pursuant to such Firm Contract
                    shall be deemed to be a quantity R{l}.

               The quantity R{l} equals (i) the Load of the purchasing
               Participant less (ii) the amount of the purchasing
               Participant's Installed Capability Entitlements multiplied
               by a fraction  X  wherein:
                             ---
                              Y

               X    is the maximum Load of the purchasing Participant in
                    the month, and

               Y    is the NEPOOL Installed Capability Responsibility
                    multiplied by the purchasing Participant's fraction P
                    determined pursuant to Section 12.2(a)(1) of the NEPOOL
                    Agreement, computed as if the Firm Contract did not
                    exist.

          Local Network:  The transmission facilities, constituting a local
     network, of the following companies:  (i) Bangor Hydro-Electric
     Company; (ii) Boston Edison Company; (iii) Central Maine Power
     Company; (iv) the Commonwealth Energy System companies; (v) the
     Eastern Utility Associates companies; (vi) the New England Electric
     System companies;  (vii) the Northeast Utilities companies; (viii) The
     United Illuminating Company; and (ix) Vermont Electric Power Company
     and the entities which are grouped with it as a single Participant and
     any other local network or change in the designation of a Local
     Network which the NEPOOL Management Committee may designate or approve
     from time to time.  The NEPOOL Management Committee may not
     unreasonably withhold approval of a request by a Participant that it
     effect such a change or designation.

          Local Network Service:  Local Network Service is the service
     provided, under a separate tariff or contract, by a Participant that
     is a Transmission Provider to another Participant, or other Entity
     connected to the Transmission Provider's Local Network to permit the
     other Participant or Entity to efficiently and economically utilize
     its resources to serve its load.

          Monthly Network Load:  A Customer's hourly load (including its
     designated Network Load not physically interconnected with the
     Transmission Provider under Section 43.3 of the NEPOOL Tariff)
     coincident with the coincident aggregate load of the Participants and
     other Network Customers served in each Local Network in the hour in
     which the coincident load is at its maximum for the month ("Monthly
     Peak").

          NEPOOL Agreement Section 3.2:  Subject to the reciprocity
     requirements of the NEPOOL Tariff, if a Participant serves a Load, or
     has rights in supply or demand-side resources or owns transmission
     and/or distribution facilities, located outside of the NEPOOL Control
     Area, such Load and resources shall not be included for purposes of
     determining the Participant's rights, responsibilities and obligations
     under the NEPOOL Agreement, except that the Participant's Entitlements
     in facilities or its rights in demand side-resources outside the
     NEPOOL Control Area shall be included in such determinations if, to
     the extent, and while such Entitlements are used for retail or
     wholesale sales within the NEPOOL Control Area or such Entitlements or
     rights are designated by a Participant for purposes of meeting its
     obligations under Section 12 of the NEPOOL Agreement.

          NEPOOL Management Committee:  The committee established pursuant
     to Section 6 of the NEPOOL Agreement.

          NEPOOL Transmission System:  The PTF transmission facilities.

          Network Integration Transmission Service: Regional Network
     Service which may be used with respect to Network Resources or Network
     Load not physically interconnected with the NEPOOL Transmission
     System.

          Network Load: The load that a Network Customer designates for
     Network Integration Transmission Service under Part II and Part VI of
     the NEPOOL Tariff.  The Network Customer's Network Load shall include
     all load designated by the Network Customer (including losses) and
     shall not be credited or reduced for any behind-the-meter generation.
     A Network Customer may elect to designate less than its total load as
     Network Load but may not designate only part of the load at a discrete
     Point of Delivery.  Where an Eligible Customer has elected not to
     designate a particular load at discrete Points of Delivery as Network
     Load, the Eligible Customer is responsible for making separate
     arrangements under Part III and Part V of the NEPOOL Tariff for any
     Point-to-Point Transmission Service that may be necessary for such
     non-designated load.

          Network Resource: (1) With respect to Participants, (a) any
     generating resource located in the NEPOOL Control Area which has been
     placed in service prior to October 1, 1998 (including a unit that has
     lost its capacity value when its capacity value is restored and a
     deactivated unit which may be reactivated without satisfying the
     requirements of Section 49 of the NEPOOL Tariff in accordance with the
     provisions thereof) until retired; (b) any generating resource located
     in the NEPOOL Control Area which is placed in service after October 1,
     1998 until retired, provided that (i) the Generator Owner has complied
     with the requirements of Section 49 of the NEPOOL Tariff, and (ii) the
     output of the unit shall be limited in accordance with Section 49, if
     required; and (c) any generating resource or combination of resources
     (including bilateral purchases) located outside the NEPOOL Control
     Area for so long as any Participant has an Entitlement in the resource
     or resources which is being delivered to it in the NEPOOL Control Area
     to serve Network Load located in the NEPOOL Control Area or other
     designated Network Loads contemplated by Section 43.3 of the NEPOOL
     Tariff taking Regional Network Service.  (2) With respect to Non-
     Participant Network Customers, any generating resource owned,
     purchased or leased by the Network Customer which it designates to
     serve Network Load.

          Open Access Same-Time Information System (OASIS):  The NEPOOL
     information system and standards of conduct responding to requirements
     of 18 C.F.R. <section>37 of the Commission's regulations and all
     additional requirements implemented by subsequent Commission orders
     dealing with OASIS.

          Operable Capability:  Operable Capability of an electric
     generating unit or units in any hour is the portion of the Installed
     Capability of the unit or units which is operating or available to
     respond within an appropriate period (as identified in market
     operation rules approved by the Regional Market Operations Committee)
     to the ISO's call to meet the Energy and/or Operating Reserve and/or
     AGC requirements of the NEPOOL Control Area during a Scheduled
     Dispatch Period or is available to respond within an appropriate
     period to a schedule submitted by a Participant for the hour in
     accordance with market operation rules approved by the Regional Market
     Operations Committee.

          Operating Reserve:  Any or a combination of 10-Minute Spinning
     Reserve, 10-Minute Non-Spinning Reserve, and 30-Minute Operating
     Reserve, as the context requires.

          Participant:  A Participant is an eligible Entity (or group of
     Entities which has elected to be treated as a single Participant)
     which is a signatory to the NEPOOL Agreement and has become a
     Participant in accordance therewith until such time as such Entity's
     status as a Participant terminates.

          Point-to-Point Transmission Service: The transmission of capacity
     and/or energy on either a firm or non-firm basis from the Point(s) of
     Receipt to the Point(s) of Delivery under the NEPOOL Tariff.  NEPOOL
     Point-to-Point Transmission Service includes both Internal Point-to-
     Point Service and Through or Out Service.

          Pool Transmission Facilities (or "PTF"):  The transmission facilities
     owned by the Participants and their Related Persons which constitute
     PTF pursuant to the NEPOOL Agreement.

          Power Year: The period of twelve months commencing on November 1.

          Regional Market Operations Committee:  The committee established
     pursuant to Section 10 of the NEPOOL Agreement.

          Regional Network Service:  Transmission service provided by the
     Participants pursuant to Part II and Part IV of the NEPOOL Tariff.

          Related Persons:  With respect to a Customer, either (i) a
     corporation, partnership, business trust or other business
     organization 10% or more of the stock or equity interest in which is
     owned directly or indirectly by, or is under common control with, the
     Customer, or (ii) a corporation, partnership, business trust or other
     business organization which owns directly or indirectly 10% or more of
     the stock or other equity interest in the Customer, or (iii) a
     corporation, partnership, business trust or other business
     organization 10% or more of the stock or other equity interest in
     which is owned, directly or indirectly by a corporation, partnership,
     business trust or other business organization which also owns 10% or
     more of the stock or other equity interest in the Customer.


<PAGE>


          Reserved Capacity:  The maximum amount of capacity and energy
     that is committed to the Transmission Customer for transmission over
     the NEPOOL Transmission System between the Point(s) of Receipt and the
     Point(s) of Delivery under Part V of the NEPOOL Tariff.  Reserved
     Capacity shall be expressed in terms of whole kilowatts on a sixty-
     minute interval (commencing on the clock hour) basis.

          Scheduled Dispatch Period:  The shortest period for which the ISO
     performs and publishes a projected dispatch schedule.

          Second Effective Date:  The date on which the provisions of Part
     Three of the NEPOOL Agreement (other than those relating to the
     Installed Capability Market) shall become effective and shall be such
     date as the Commission may fix on its own or pursuant to a request of
     the NEPOOL Management Committee.

          System Contract:  Any contract for the purchase of Installed
     Capability, Operable Capability, Energy, Operating Reserves and/or
     AGC, other than a Unit Contract or Firm Contract, pursuant to which
     the purchaser is entitled to a specifically determined or determinable
     amount of such Installed Capability, Operable Capability, Energy,
     Operating Reserves and/or AGC.

          Summer Capability:  Summer Capability of an electric generating
     unit or combination of units is the maximum dependable load carrying
     ability in Kilowatts of such unit or units (exclusive of capacity
     required for station use) during the Summer Period, as determined by
     the NEPOOL Regional Market Operations Committee.

          Summer Period:  Summer Period in each Power Year is the four-
     month period from June through September.

          System Impact Study:  An assessment of:  (i) the adequacy of the
     NEPOOL Transmission System to accommodate a request for the
     interconnection of a new or materially changed generating unit or a
     new or materially changed interconnection to another Control Area or
     new Regional Network Service, internal Point-to-Point Service or
     Through or Out Service, and (ii) whether any additional costs may be
     required to be incurred in order to provide the interconnection or
     transmission service.

          Through or Out Service: Point-to-Point Transmission Service provided
     by NEPOOL pursuant to Part III of the NEPOOL Tariff with respect to a
     transaction which requires the use of PTF and which goes through the
     NEPOOL Control Area, as, for example, from the Maine Electric Power
     Company line or New Brunswick to New York, or from one point on the
     NEPOOL Control Area boundary with New York to another point on the
     Control Area boundary with New York, or with respect to a transaction
     which goes out of the NEPOOL Control Area from a point in the NEPOOL
     Control Area, as, for example, from Boston to New York.

          Transmission Customer:  Any Eligible Customer that (i) is a
     Participant which is not required to sign a Transmission Service
     Agreement with respect to a service to be furnished to it in
     accordance with Section 48 of the NEPOOL Tariff, or (ii) executes, on
     its own behalf or through its Designated Agent, a Transmission Service
     Agreement, or (iii) requests in writing, on its own behalf or through
     its Designated Agent, that NEPOOL file with the Commission, a proposed
     unexecuted Transmission Service Agreement in order that the Eligible
     Customer may receive transmission service under the NEPOOL Tariff.
     This term is used in Part I of the NEPOOL Tariff to include customers
     receiving transmission service under the NEPOOL Tariff.

          Transmission Ownership Shares:  The Transmission Ownership Shares
     of a Participant means and includes:

          (A)  the direct ownership interest which the Participant has as a
               sole or joint owner of PTF;

          (B)  the indirect ownership interest which the Participant has,
               as a shareholder in a corporation, or as a general or
               limited partner in a partnership, in PTF owned by such
               corporation or partnership, provided the corporation or
               partnership is not itself a Participant;

          (C)  any other interest which the Participant has in PTF under a
               lease or other contractual arrangement, provided the other
               party to the arrangement is not itself a Participant and the
               NEPOOL Management Committee determines, at the request of
               the affected Participant, that the Participant has benefits
               and rights, and assumes risks, under the arrangement with
               respect to the PTF which are substantially equivalent to the
               benefits, rights and risks of an owner; and

          (D)  an interest which the Participant shall be deemed to have in
               the direct ownership interest, or the indirect ownership
               interest as a shareholder or general or limited partner, of
               a Related Person of the Participant in PTF, provided the
               Related Person is itself not a Participant.

          Transmission Provider:  The Participants, collectively, which own
     PTF and are in the business of providing transmission service or
     provide service under a local open access transmission tariff, or in
     the case of a state or municipal or cooperatively-owned Participant,
     would be required to do so if requested pursuant to the reciprocity
     requirements specified in the NEPOOL Tariff, or an individual such
     Participant, whichever is appropriate.

          Unit Contract:  A purchase contract pursuant to which the
     purchaser is in effect currently entitled either (i) to a specifically
     determined or determinable portion of the Installed Capability of a
     specific electric generating unit or units, or (ii) to a specifically
     determined or determinable amount of Operable Capability, Energy,
     Operating Reserve and/or AGC if, or to the extent that, a specific
     electric generating unit or units is or can be operated.

          Winter Capability:  Winter Capability of an electric generating
     unit or combination of units is the maximum dependable load carrying
     ability in Kilowatts of such unit or units (exclusive of capacity
     required for station use) during the Winter Period, as determined by
     the NEPOOL Regional Market Operations Committee.

          Winter Period:  Winter Period in each Power Year is the seven-
     month period from November through May and the month of October.


<PAGE>


                               ATTACHMENT C

                       Financial Assurance Policy


             FINANCIAL ASSURANCE POLICY FOR NEPOOL MEMBERS

     This Financial Assurance Policy for NEPOOL Members ("Policy") shall
     become effective on the Second Effective Date.

     The purpose of this Policy is (i) to establish a financial assurance
     policy for NEPOOL members ("Participants") that includes commercially
     reasonable credit review procedures to assess the financial ability of
     an applicant for membership in NEPOOL ("Applicant") or of a
     Participant to pay for service transactions under the Restated NEPOOL
     Agreement and the NEPOOL Open Access Transmission Tariff (the
     "Tariff") and to pay its share of NEPOOL expenses, including amounts
     owed to ISO New England Inc. under its tariff, (ii) to set forth
     requirements for alternative forms of security that will be deemed
     acceptable to NEPOOL and consistent with commercial practices
     established by the Uniform Commercial Code that protects the
     Participants against the risk of non-payment by other, defaulting
     Participants, (iii) to set forth the conditions under which NEPOOL
     will conduct business so as to avoid the possibility of failure of
     payment for services rendered under the Tariff or the Restated NEPOOL
     Agreement, and (iv) to collect amounts past due, make up shortfalls in
     payments, and terminate membership of defaulting Participants.

     In accordance with Sections 3.5 and 6.14 of the Restated NEPOOL
     Agreement, NEPOOL requires the following procedures and requirements
     to apply to all Applicants and Participants.  Generally, any Applicant
     or Participant that does not have an investment grade rating by either
     Standard & Poor's, Moody's, Duff & Phelps, or Fitch will be required
     to provide financial assurances, as described in detail below.

     GENERAL REQUIREMENTS

     Each Applicant or Participant must comply with the following general
     requirements.

     In the case of a group of members that are treated as a single
     Participant pursuant to Section 4.1 of the Restated NEPOOL Agreement,
     the group members shall be deemed to have elected to be jointly and
     severally liable for all debts to NEPOOL of any of the group members
     unless (i) charges of an individual member can be tracked and
     allocated to the member incurring such charges by the System Operator
     {1} utilizing all information available to the System Operator
     determined by it to be reliable, including information from
     Participants or from a single Participant's representative, (ii) an
     alternate form of financial assurance is provided as set forth below,
     (iii) the group members agree to allocate amongst themselves
     responsibility for payment of group member charges on a percentage
     basis in a manner acceptable to NEPOOL, with additional financial
     assurance to be provided by those members, if any, that do not satisfy
     the minimum corporate debt rating, or (iv) the group members when
     evaluated as a whole (at their expense by one of the above rating
     agencies) satisfy the minimum corporate debt rating requirement set
     forth above and, in addition, provide a corporate guaranty from a
     parent or other responsible affiliate, which parent or affiliate
     satisfies the minimum corporate debt rating.  For the fourth type of
     consolidated Participant, NEPOOL will conduct a financial assurances
     review based on the credit rating of only the rated members of the
     group.

     For the purposes of these financial assurance provisions, the term
     "Participant" shall, in the case of a group of members that are
     treated as a single Participant pursuant to Section 4.1 of the
     Restated NEPOOL Agreement, be deemed to refer to the group of members
     as a whole unless the group members have affirmatively indicated to
     NEPOOL, and NEPOOL has agreed, that they are to be treated pursuant to
     options (i) or (iii) above, in which case the term "Participant" shall
     be deemed to refer to each individual group member and not to the
     aggregate of such group; and the terms "charges" and fees" shall,
     likewise, be deemed to refer to the charges and fees allocable to the
     individual group member as opposed to the aggregate of such group.

     PROOF OF FINANCIAL VIABILITY
     Each Applicant must with its application submit proof of financial
     viability, as described below, satisfying NEPOOL requirements to
     demonstrate the Applicant's ability to meet its obligations, or must
     provide prior to its membership becoming effective financial assurance
     in the form of a cash deposit, letter of credit or performance bond as
     set forth below.  An Applicant that chooses to provide a cash deposit,
     letter of credit or performance bond will not be required to provide
     financial information to NEPOOL.

     Generally, each Applicant must submit a current rating agency report,
     which report must indicate an investment grade rating by either
     Standard & Poor's, Moody's, Duff & Phelps, or Fitch for the Applicant
     to be considered as a candidate for NEPOOL membership without
     furnishing additional financial assurances as described below.

     Current Participants must also provide a current rating agency report
     by the Second Effective Date, as well as any of the financial
     statements and information set forth below if and as requested by
     NEPOOL within ten (10) days of such request.  Those Participants that
     do not satisfy the rating requirement as set forth above must provide
     instead on the Second Effective Date one form of the financial
     assurances set forth below.  A Participant's failure to meet these
     requirements may result in termination proceedings by NEPOOL.

     FINANCIAL STATEMENTS
     Each Applicant must submit, if and as requested by NEPOOL and within
     ten (10) days of such request, audited financial statements for at
     least the immediately preceding three years, or the period of its
     existence, if shorter, including, but not limited to, the following
     information:

                              Balance Sheets
                              Income Statements
                              Statements of Cash Flows
                              Notes to Financial Statements

     Additionally, the following information for at least the immediately
     preceding three years, if available, must be submitted if and as
     requested by NEPOOL and within ten (10) days of such request:

                              Annual and Quarterly Reports
                              10-K, 10-Q and 8-K Reports

     Where the above financial statements are available on the Internet,
     the Applicant may provide instead a letter to NEPOOL stating where
     such statements may be located and retrieved by NEPOOL.

     Each Applicant may also be required to provide at least one bank
     reference and three (3) Utility credit references.  In those cases
     where an Applicant does not have three (3) Utility credit references,
     three (3) trade payable vendor references may be substituted.

     Each Applicant may also be required to include information as to any
     known or anticipated material lawsuits, as well as any prior
     bankruptcy declarations by the Applicant, or by its predecessor(s), if
     any.

     In the case of certain Applicants, some of the above financial
     submittals may not be applicable, and alternate requirements may be
     specified by NEPOOL.

     ONGOING FINANCIAL REVIEW
     Each Participant that has not provided a cash deposit, letter of
     credit, performance bond, or corporate guaranty must submit at least
     annually its current rating agency report promptly upon its issuance,
     and 8-K Reports promptly upon their issuance.

     In addition, each Participant is responsible for informing NEPOOL in
     writing within ten (10) business days of any material change in its
     financial status.  A material change in financial status includes, but
     is not limited to, the following: a downgrade of long or short term
     debt rating by a major rating agency, being placed on credit watch
     with negative implication by a major rating agency, a bankruptcy
     filing, insolvency, a report of a significant quarterly loss or
     decline of earnings, the resignation of key officer(s), and/or the
     filing of a material lawsuit that could materially adversely impact
     current or future financial results.  A Participant's failure to
     provide this information may result in termination proceedings by
     NEPOOL.

     If there is a material adverse change in the financial condition of
     the Participant, NEPOOL may require the Participant to provide one of
     the forms of other financial assurances set forth below.  If the
     Participant fails to do so, NEPOOL may initiate termination
     proceedings in accordance with the procedure set forth in Section
     21.2(d) of the Restated NEPOOL Agreement.

     OTHER FINANCIAL ASSURANCES

     Applicants or Participants that do not satisfy the rating requirement
     or NEPOOL's credit review process must submit instead one of the
     following additional financial assurances, depending on the type of
     transactions they anticipate engaging in as Participants.

     In general, Participants must provide additional financial assurance
     in the following amounts, based on their average or expected monthly
     charges for interchange and transmission service under the Tariff
     (which would include charges for Regional Network Service or Through
     or Out Service) and the Restated NEPOOL Agreement (which would include
     energy and other services received through NEPOOL) and NEPOOL expenses
     for services, including amounts owed to ISO New England Inc. under its
     tariff (collectively the "NEPOOL Charges"):

          MONTHLY NEPOOL CHARGES         FINANCIAL ASSURANCE REQUIREMENT

              $0 - $15,000                  0 months' NEPOOL Charges

              $15,001 - $30,000             1 month's NEPOOL Charges

              $30,001 - $50,000             2 months' NEPOOL Charges


              $50,001 or more               3 1/2  months' NEPOOL Charges


     The three and one-half months is based on the time required for a FERC
     filing made by NEPOOL to suspend service to be effective.

     Therefore, a Participant with $32,000 in monthly NEPOOL Charges that
     does not satisfy the rating requirement or NEPOOL credit review
     process must provide additional financial assurances in the amount of
     $64,000 to NEPOOL.

     In the case of new Participants, the additional financial assurance
     requirement will be based on estimated monthly NEPOOL Charges, which
     estimate NEPOOL has the right to adjust in light of subsequent
     experience as to actual monthly NEPOOL Charges.

     CASH DEPOSIT
     A cash deposit for the full value of the Financial Assurance
     Requirement based on actual or anticipated NEPOOL Charges, as
     determined by NEPOOL, provides an acceptable form of financial
     assurance to NEPOOL.

     If it is necessary to use all or a portion of the deposit to pay the
     Participant's obligation, the deposit must be promptly replenished to
     the required level; otherwise, termination proceedings may be
     initiated.  In the event that actual NEPOOL Charges exceed those
     anticipated, the anticipated charges will be increased accordingly and
     the Participant must augment its cash deposit to reach the required
     level.

     The cash deposit will be invested by NEPOOL in investments as may be
     designated by the Participant in direct obligations of the United
     States or its agencies and interest earned will be paid to the
     Participant.  NEPOOL may sell or otherwise liquidate such investments
     at its discretion to meet the Participant's obligations to NEPOOL.

     The requirement to continue the deposit may be reviewed by NEPOOL
     after one year.  Consideration will be given to replacing the cash
     deposit with a corporate guaranty if certain conditions are met, as
     discussed below in the Corporate Guaranty section.

     LETTER OF CREDIT
     An unconditional and irrevocable standby letter of credit for the full
     value of the Financial Assurance Requirement based on actual or
     anticipated NEPOOL Charges, as determined by NEPOOL, provides an
     acceptable form of financial assurance to NEPOOL.  The letter of
     credit will renew automatically unless the issuing bank provides
     notice to NEPOOL at least ninety (90) days prior to the letter of
     credit's expiration of the bank's decision not to renew the letter of
     credit.

     If the letter of credit amount falls below the required level because
     of a drawing, it must be replenished immediately; otherwise,
     termination proceedings may be initiated by NEPOOL.  If actual NEPOOL
     Charges exceed those anticipated, the Participant must obtain a
     substitute letter of credit that equals the actual NEPOOL Charges.

     The form, substance, and provider of the letter of credit must all be
     acceptable to NEPOOL.  The letter of credit should clearly state the
     full names of the "Issuer," "Account Party" and "Beneficiary"
     (NEPOOL), the dollar amount available for drawings, and should include
     a statement required on the drawing certificate and other terms and
     conditions that should apply.  It should also specify that funds will
     be disbursed, in accordance with the instructions, within one (1)
     business day after due presentation of the drawing certificate.  The
     bank issuing the letter of credit must have a minimum corporate debt
     rating of an "A-" by Standard & Poor's, or "A3" by Moody's, or "A-" by
     Duff & Phelps, or "A-" by Fitch, or an equivalent short term debt
     rating by one of these agencies.

     Please refer to Attachment 1, which provides an example of a generally
     acceptable sample "clean" letter of credit.  All costs associated with
     obtaining financial security and meeting the Policy provisions are the
     responsibility of the Applicant or Participant.

     The requirement to continue to provide a letter of credit may be
     reviewed by NEPOOL after one year.  Consideration will be given to
     replacing the letter of credit with a corporate guaranty if certain
     conditions are met, as discussed below in the Corporate Guaranty
     section.

     PERFORMANCE BOND
     A performance bond complying with the requirements set forth herein
     provides an acceptable form of financial assurance to NEPOOL.  The
     penal sum of such performance bond shall be in an amount equal to the
     full value of the Financial Assurance Requirement based on actual or
     anticipated NEPOOL charges, as determined by NEPOOL, and shall
     automatically be adjusted to reflect any adjustment in such Financial
     Assurance Requirement.  The bond shall permit suit thereunder until
     two years after the date that all of the Applicant's or Participant's
     obligations to NEPOOL expire.

     If the amount of penal sum of the performance bond available to NEPOOL
     falls below the required level because of a payment thereon, it must
     be increased to the required level immediately; otherwise, termination
     proceedings may be initiated by NEPOOL.  If actual NEPOOL Charges
     exceed those anticipated, the Participant must either cause the penal
     sum of such performance bond to be increased accordingly or must
     obtain a substitute performance bond in the appropriate amount.

     The form, substance and provider of the performance bond must be
     acceptable to NEPOOL.  The performance bond should clearly state the
     full names of the "Principal," the "Surety" and the "Obligee" (NEPOOL)
     and the penal sum and should include a clear statement that the surety
     will promptly and faithfully perform the Participant's obligations to
     NEPOOL if the Participant fails to do so.  The insurance company
     issuing the performance bond must be rated "A" or better by A.M. Best
     & Co.

     Please refer to Attachment 2, which provides an example of a generally
     acceptable sample performance bond. All costs associated with
     obtaining financial security and meeting the Policy provisions,
     including without limitation the cost of the premiums for such
     performance bond, are the responsibility of the Applicant or
     Participant.

     The requirement to continue to provide a performance bond may be
     reviewed by NEPOOL after one year.  Consideration will given to
     replacing the performance bond with a corporate guaranty if certain
     conditions are met, as discussed below in the Corporate Guaranty
     section.

     WEEKLY PAYMENTS
     A Participant that does not satisfy the rating requirement may request
     that, in lieu of providing one of the additional financial assurances
     set forth above, a weekly billing schedule be implemented for it.
     NEPOOL may, in its discretion, agree to such a request.

     If NEPOOL agrees to implement a weekly billing schedule for a
     Participant, the Participant shall be billed weekly in arrears on an
     estimated basis for all amounts owed to NEPOOL and the System Operator
     for the week, with an adjustment for each month as part of the regular
     NEPOOL monthly billing to reflect any under or over collection for the
     month.  The Participant shall be obligated to pay each such weekly
     bill within five business days after it is received.

     If a weekly billing schedule is implemented for a Participant in lieu
     of requiring the Participant to provide an additional financial
     assurance, the Participant may be required to provide an additional
     financial assurance at any time if the Participant fails to pay when
     due any weekly bill.

     USE OF TRANSACTION SETOFFS
     Under certain conditions, NEPOOL may be obligated to make payments to
     a Participant.  In this event, the amount of the cash deposit, letter
     of credit or performance bond required for financial assurance for the
     contemplated transactions may be reduced ("setoff") by an amount equal
     to NEPOOL's unpaid balance or expected billing under the other
     transactions.  The terms and the amount of the setoff must be approved
     by NEPOOL.

     CORPORATE GUARANTY
     An unconditional and irrevocable corporate guaranty obtained from a
     Participant's affiliated company ("Guarantor") for the full value of
     the Financial Assurance Requirement based on actual or anticipated
     NEPOOL Charges, as determined by NEPOOL, may provide an acceptable
     form of financial assurance to NEPOOL.

     If actual NEPOOL Charges exceed those anticipated, the Participant
     must provide a substitute corporate guaranty that equals the actual
     NEPOOL Charges.

     A Participant for which a letter of credit, performance bond or cash
     deposit was initially required may have the opportunity to substitute
     a corporate guaranty if the following conditions are met:

     1.   NEPOOL determines that the Participant has satisfactorily met its
          payment obligations in NEPOOL for at least one-year, which one-year
          period may in whole or in part pre-date the Second Effective Date;

     2.   NEPOOL determines that the financial condition of the Guarantor
          meets the requirements of this Policy; and

     3.   The form and substance of the corporate guaranty are acceptable to
          NEPOOL.

Upon NEPOOL's written authorization, the Participant may substitute a
corporate guaranty that is issued by the Guarantor for a cash deposit, bank
letter of credit or performance bond when it has satisfied the conditions
stipulated above.  The corporate guaranty is considered to be a lesser form
of financial assurance than a cash deposit, letter of credit or performance
bond, and therefore is allowed as an acceptable form of financial assurance
only to those Participants that have satisfied their payment obligations to
NEPOOL in a timely manner for at least one year.

The corporate guaranty may only be used if the Participant is affiliated
with a Guarantor that has greater financial assets, a strong balance sheet
and income statements, and at minimum an investment grade rating by either
Standard & Poor's, Moody's, Duff & Phelps, or Fitch.

The corporate guaranty should clearly state the identities of the
"Guarantor," "Beneficiary" and "Obligor," and the relationship between the
Guarantor and the Participant Obligor.  The corporate guaranty must be duly
authorized by the Guarantor, must be signed by an officer of the Guarantor,
and must be furnished with either an opinion satisfactory to NEPOOL of the
Guarantor's counsel with respect to the enforceability of the guaranty or
accompanied by a certificate of corporate guarantee that includes a seal of
the corporation with signature of the corporate secretary.  Additionally,
adequate documentation regarding the signature authority of the person
signing the corporate guaranty must be provided with the corporate
guaranty.

A corporate guaranty must also obligate the Guarantor to submit at least
annually a current rating agency report promptly upon its issuance, to
submit 8-K Reports promptly upon their issuance, to submit financial
reports if and as requested by NEPOOL within ten (10) days of such request,
and to inform NEPOOL in writing within ten (10) business days of any
material change in its financial status.  A material change in financial
status includes, but is not limited to, the following: a downgrade of long
or short term debt by a major rating agency, being placed on credit watch
with negative implication by a major rating agency, a bankruptcy filing,
insolvency, a report of a significant quarterly loss or decline of
earnings, the resignation of key officer(s), and/or the filing of a
material lawsuit that could materially adversely impact current or future
financial results.  A Guarantor's failure to provide this information may
result in proceedings by NEPOOL to terminate the Participant Obligor.  If
there is a material adverse change in the financial condition of the
Guarantor, NEPOOL may require the Participant Obligor to provide another
form of financial assurance, either a cash deposit or a letter of credit or
a performance bond.

NON-PAYMENT OF AMOUNTS DUE
If a Participant does not pay amounts billed when due and as a result a
letter of credit or cash deposit is drawn down or a performance bond is
paid on, then the Participant must immediately replenish the letter of
credit or cash deposit to the required amount or cause the penal sum of the
performance bond to be increased to equal the required amount plus all
amounts paid thereunder.  If a Participant fails to do so, NEPOOL may
initiate termination proceedings against the Participant in accordance with
the procedure set forth in Section 21.2(d) of the Restated NEPOOL
Agreement.

In order to encourage prompt payment by Participants of amounts owed to
NEPOOL and the ISO, if a Participant is delinquent two or more times within
any period of twelve months in paying on time its NEPOOL Charges, the
Participant shall pay, in addition to interest on each late payment, a late
payment charge for its second failure to pay on time, and for each
subsequent failure to pay on time, within the same twelve-month period, in
an amount equal to the greater of (i) two percent (2%) of the total amount
of such late payment and (ii) $250.00.

In the case of a former Participant that applies again for membership in
NEPOOL, a determination of delinquency shall be based on the Participant's
history of payment of its NEPOOL Charges in its last twelve (12) months of
membership.


**FOOTNOTES**

1    The System Operator will act as NEPOOL's agent in managing and
enforcing this Policy with the exception of termination of membership
issues, which are specifically reserved to the NEPOOL Participants and will
be addressed by the NEPOOL Executive Committee Membership Subcommittee,
subject to appeal to the Management Committee.  Accordingly, all financial
information required pursuant to this Policy is to be provided to the
System Operator, which will keep all such information confidential in
accordance with the provisions of Section 2 of NEPOOL Criteria, Rules and
Standards No. 45.


<PAGE>


                           ATTACHMENT D

                              RULE 13
                Imposition of Sanctions by the ISO


13.1 Purpose.

     (a)  This Rule sets forth the procedures and standards under which the

ISO can impose sanctions for certain violations of Participants'

obligations under the NEPOOL Agreement, the Interim Independent System

Operator Agreement dated July 1, 1997 between the Participants and the ISO

(as amended and supplemented, the "ISO Agreement"), the NEPOOL Tariff and

NEPOOL Rules (collectively, "Participant Obligations").  The NEPOOL Rules

embody procedures and standards of conduct that are intended to assure

Short-Term Reliability and the competitiveness and efficiency of the

markets.  The ISO's ability to impose sanctions under this rule is intended

to deter noncompliance by Participants with Participant Obligations that

(i) materially impairs or threatens to materially impair Short-Term

Reliability, (ii) materially impairs or threatens to materially impair the

competitiveness or efficiency of the markets, (iii) involves unexcused

failure to follow certain ISO instructions, or (iv) involves unexcused

failure to provide to the ISO in certain circumstances accurate and timely

information required and requested by the ISO.

     (b)  When in the course of the conduct of system operations or its

normal monitoring of the competitiveness and efficiency of the markets, the

ISO identifies potentially Sanctionable Behavior, the ISO will make inquiry

of the Participant, express the ISO's concerns and allow the Participant to

explain its actions and the circumstances.  If, following its inquiry, the

ISO reasonably concludes that the actions constitute Sanctionable Behavior,

it may (but is not required to) impose sanctions pursuant to this Rule.

     (c)  If the NEPOOL Rules are inadequate to assure Short-Term

Reliability and the efficiency and competitiveness of markets, the ISO is

authorized, with the Regional Market Operations Committee or unilaterally

to the extent permitted under the ISO Agreement, to promulgate new or

changed rules to address the problem.  The sanctions set forth in this Rule

are intended to assure compliance by the Participants with NEPOOL Rules

from time to time in effect, and are not a substitute for the appropriate

modification of NEPOOL Rules.  Where a NEPOOL Rule is ambiguous, it is

expected that the ISO will seek clarification of the rule, and will not

impose sanctions on behavior that a Participant could reasonably believe

was in compliance with Participant Obligations.  Behavior not constituting

a violation by a Participant of its Participant Obligations, and not

otherwise specifically made subject to sanction by another rule, is not

Sanctionable Behavior under this Rule.

     (d)  It is an objective of the NEPOOL Agreement to provide for

equitable sharing of the responsibilities, benefits and costs resulting

from the establishment of markets and the maintenance of proper standards

of reliability for the NEPOOL Control Area.  Each Participant is entitled

to expect performance by other Participants of their Participant

Obligations.  Pursuant to the ISO Agreement, and with the approval of the

FERC, the Participants have delegated to the ISO certain authority to

interpret and implement the NEPOOL Rules on behalf of the Participants.

This Rule is intended to create an efficient deterrent to noncompliance by

Participants of their Participant Obligations.  The ISO will not impose

sanctions if it believes that the consequences of Sanctionable Behavior in

the markets are a sufficient deterrent.

     (e)  In order for this Rule to be an effective deterrent, the

application by the ISO of this Rule must be consistent and non-

discriminatory.

     (f)  This Rule is not intended to sanction any failure by a

Participant to perform any Participant Obligation which occurs

notwithstanding the good faith efforts of the Participants to perform.

Neither this Rule nor the ISO's failure to impose sanctions is intended to

excuse performance by Participants of Participant Obligations.

     (g)  The remaining provisions of this Rule shall be interpreted and

applied consistently with this Section 13.l.

13.2 Definitions.

     13.2.1 Each of the following capitalized terms used in this Rule has

the meaning given to it in Section 1.1 of Market Rule 1 (Market Information):

               Automatic Low Limit
               Desired Dispatch Point
               Dispatchable Load
               Generator
               High Operating Limit
               Installed Capability
               Load Available for Interruption
               NEPOOL Control Area
               Operable Capability
               Operable Capability Entitlement
               Operating Reserve
               Participant
               Redeclaration
               Scheduled Dispatch Period
               Settlement
               Settlement Period
               TMSR or Ten-Minute Spinning Reserve
               TMNSR or Ten-Minute Non-Spinning Reserve
               TMOR or Thirty-Minute Operating Reserve


     13.2.2    Each of the following capitalized terms used in this Rule is

defined as set forth below:

          (a)  ADR and alternate dispute resolution means the dispute
               resolution process described in Section 13.7 or a substitute
               process referred to in Section 13.7.7.

          (b)  ADR Neutral means a person selected and serving pursuant to
               Subsection 13.7.6.3.

          (c)  Administrative Sanction has the meaning set forth in
               paragraph 13.5.1(b).

          (d)  Affiliate means, with respect to any person or entity, a
               person or entity that controls, is controlled by, or is
               under common control with such person or entity.

          (e)  Bid has the meaning set forth in Market Rule 3 (Bidding
               Process) or any successor Rule thereto.

          (f)  Bid Parameter has the meaning set forth in Market Rule 14
               (Resource Performance Monitoring) and any successor Rule
               thereto.

          (g)  FERC means the Federal Energy Regulatory Commission.

          (h)  Force Majeure means any act of God, labor disturbance, act
               of the public enemy, war, insurrection, riot, fire, storm or
               flood, explosion, breakage or accident to machinery or
               equipment not due to lack of proper care or maintenance, any
               order, regulation or restriction imposed by a court or
               governmental military or lawfully established civilian
               authorities, or any other cause or condition beyond a
               party's reasonable control.

          (i)  Formal Warning has the meaning set forth in paragraph
               13.5.l(a).

          (j)  Formula-Based Sanctions has the meaning set forth in
               paragraph 13.5.l(c).

          (k)  Good Utility Practice means any practice, method, or act
               engaged in or approved by a significant portion of the
               electric utility industry during the relevant time period,
               or any practice, method, or act which, in the exercise of
               reasonable judgment in light of the facts known at the time
               the decision was made, could have been expected to
               accomplish the desired result at a reasonable cost
               consistent with good business practices, reliability, safety
               and expedition.  Good Utility Practice is not limited to a
               single, optimum practice, method or act to the exclusion of
               others, but rather is intended to include acceptable
               practices, methods, or acts generally accepted in the
               region.

          (l)  ISO Tariff means the ISO New England Inc. FERC Tariff for
               Transmission Dispatch and Power Administration Service.

          (m)  NEPOOL Agreement means the Restated New England Power Pool
               Agreement as restated as of December 1, 1996 among the
               Participants, as amended from time to time.

          (n)  Market Rule means any one of the Market Rules & Procedures
               adopted by NEPOOL to govern the operation of the NEPOOL
               markets for energy, reserves and capability, as amended from
               time to time.

          (o)  NEPOOL Rules and Rules mean all NEPOOL rules, including the
               Market Rules and the System Rules and Procedures (as defined
               in the ISO Agreement).

          (p)  NEPOOL Tariff means the NEPOOL Open Access Transmission
               Tariff, as amended from time to time.

          (q)  Participant Obligations has the meaning set forth in
               paragraph 13.l(a).

          (r)  Resource has the meaning set forth in Market Rule 14
               (Resource Performance Monitoring) or any successor Rule
               thereto.

          (s)  Sanctionable Behavior has the meaning set forth in Section
               13.4.

          (t)  Short-Term Reliability means real-time preservation of
               system security of the NEPOOL Control Area while minimizing
               involuntary load shedding for the current Scheduled Dispatch
               Period or at any time during the next two weeks.

          (u)  System Emergency means any period (i) during which the ISO
               is taking actions to preserve Short-Term Reliability under
               NEPEX Operating Procedure No. 4 (Action During a Capacity
               Deficiency) (actions 9 through 15), or NEPEX Operating
               Procedure No. 7 (Action in an Emergency), or NEPEX Operating
               Procedure No. 14 (Action During Extremely Light Load
               Conditions) or to preserve transmission security under
               emergency conditions pursuant to CRS 19 (Transmission
               Operations) or any successor Rules thereto or any new
               emergency Rule whether the NEPOOL emergency condition is a
               result of a response to conditions in the NEPOOL Control
               Area or another control area.  When the need to take
               emergency action is confined to a portion of the NEPOOL
               Control Area, and there is no system-wide emergency,
               behavior of a Participant with respect to Resources located
               in the affected area will be considered as occurring during
               a System Emergency.

          (v)  Voting Shares has the meaning set forth in the NEPOOL
               Agreement.

13.3 Application of Sanctions.

     13.3.1 General Rule.

            The ISO may impose sanctions on any Participant that directly

engages in Sanctionable Behavior.

     13.3.2 Control of Resources.

            With respect to a Resource, sanctions may be imposed on the

Participant with operating control of the Resource or Bid authority for the

Resource, as appropriate.  A Participant that has Bid authority with

respect to a Resource as to which its non-Participant Affiliate has

operating control will be deemed to have operating control of such Resource

for purposes of this rule.  An Entitlement that does not provide a right to

operating control or Bid authority for a Resource shall not serve as a

basis for imposition of sanctions except as set forth in Section 13.3.3.

     13.3.3 Special Rule for Contract Rights.

            With respect to (i) a Resource that is a contract

Entitlement for a Generator or Type 3 or 4 Dispatchable Load within the

NEPOOL Control Area that is not subject to the operating control of a

Participant or (ii) a Resource that is an External Contract:

                    (a)  The Participant with Bid authority for such a

Resource is entitled to rely in good faith on Bid Parameters and

information as to Resource availability, capability and operating

conditions supplied by the person with operating control of the Resource

unless the Participant knew, or would have known if it had exercised the

degree of diligence required by Good Utility Practice, that such Bid

Parameters or information as to Resource availability, capability and

operating condition were inaccurate.

                    (b)  A Participant that, 30 days or more after this

Rule is submitted to the FERC, enters into a contract or new transaction

under an existing service agreement which is structured in a way that

provides such Participant Bid authority for such a Resource shall include

in such contract or a supplement thereto the language with respect to

contracts of the type entered into set forth in Appendix B to this Rule.

                    (c)  The Participant with Bid authority for such a

Resource shall use its reasonable efforts to ensure operation of such

Resource in accordance with NEPOOL Rules, consistent with its rights under

its contract.  The Participant with Bid authority shall be subject to

sanction as if it were the Participant with operating control of such

Resource if (i) the person with operating control is not a Participant and

engages in conduct that would be sanctionable if such person were a

Participant and (ii) the Participant with Bid authority fails to use

reasonable efforts, consistent with its rights under its contract, to

prevent operation that would otherwise be sanctionable.

     13.3.4 Transmission Facilities.

            To the extent identified in this Rule, a Participant with

operating control of transmission facilities may be subject to sanction

with respect to operation of such facilities.

13.4  Sanctionable Behavior.

      An act or omission described in any of Sections 13.4.l.1 through

13.4.1.3, 13.4.2.1 through 13.4.2.3, 13.4.3.1 through 13.4.4.5 and 13.4.5

(any such act or omission being referred to as "Sanctionable Behavior") is

subject to sanction under this Rule pursuant to the process and subject to

the standards, exclusions and evaluative factors set forth in Sections 13.4

through 13.6.

     13.4.1 Failure to Perform in Markets.

          13.4.1.1  Failure to Provide Energy.

                    Failure to provide Energy means (i) a shortfall, by

          more than the permitted deviation provided for in Appendix 14-A

          to Market Rule 14, in attaining within the time intervals

          provided in Appendix 14-A to Market Rule 14, in response to

          instructions from the ISO, a Generator's High Operating Limit Bid

          Parameter, or (ii) a shortfall, as measured in a manner

          consistent with Appendix 14-K to Market Rule 14, by more than the

          permitted deviation provided for in Appendix 14-K to Market Rule

          14, in attaining, in response to instruction from the ISO, a Type

          3 or 4 Dispatchable Load's Load Available for Interruption Bid

          Parameter that, in either case, is intentional and is not excused

          under the provisions of Subsection 13.4.1.4 or 13.4.1.5 or

          Section 13.4.6.

          13.4.1.2  Failure to Provide Services.

                    Failure to provide services means a failure, in

          response to instructions from the ISO (i) to begin to move a

          Resource that is on line and operating at or above its Low

          Operating Limit to a new Desired Dispatch Point within the time

          limit specified in Appendix 14-I to Market Rule 14, or (ii) to

          provide AGC by failing, by more than the permitted deviation

          provided for in Appendix 14-C to Market Rule 14, to attain within

          the intervals provided for in Appendix 14-C to Market Rule 14, a

          Resource's Automatic Low Limit or its Automatic High Limit in

          response to AGC signals or by failing to provide AGC Services in

          response to AGC signals at the Automatic Response Rate by more

          than the permitted deviation and within the intervals provided

          for in Appendix 14-D to Market Rule 14 that, in either case, is

          intentional and is not excused under the provisions of Subsection

          13.4.1.4 or 13.4.1.5 or Section 13.4.6.

          13.4.1.3  Failure to Respond to Dispatch Instructions.

                    Failure to Respond to Dispatch Instructions means a

          departure, by more than the permitted deviation provided for in

          the applicable Appendix to Rule 14, in meeting, in response to

          instructions from the ISO, the operating response Bid Parameter

          time for a Resource (i) in starting up a Generator, (ii) in

          shutting down a Generator, (iii) in interrupting a Type 3 or 4

          Dispatchable Load or (iv) in turning on a Type 3 or 4

          Dispatchable Load that, in each case, is intentional and is not

          excused under the provisions of Subsection 13.4.1.4 or  13.4.1.5

          or Section 13.4.6.

          13.4.1.4  Relationship to Rule 14.

                    (a) Failure to perform in markets may be determined

          based on Market Rule 14 audits or on other suitable information

          available to the ISO.

                    (b) Failure to perform in markets is not subject to

          sanction if a Participant makes a timely Redeclaration as

          permitted under Market Rule 14 and performs in accordance with

          such Redeclaration, but if a Participant's Redeclaration

          constitutes a misrepresentation of a Resource's ability to

          perform, this may be subject to sanction under Section 13.4.2.

          13.4.1.5 Other Facility Failures Excluded.

                   Failure to perform in markets does not include the

          effect of any failure or other unavailability of transmission,

          distribution or communications facilities so long as such failure

          or other unavailability is outside the reasonable control of the

          Participant.

     13.4.2 Inaccurate Bid or Operating Information.

          13.4.2.1 Understatement of High Operating Limit.

                   (a) Understatement of High Operating Limit means the

          submission of a High Operating Limit Bid Parameter, including any

          Redeclaration of the High Operating Limit, in circumstances where

          the Participant knew or should have known that the Resource could

          currently attain a High Operating Limit consistent with Good

          Utility Practice that is at least five percent (or 25 MW,

          whichever is less) greater than the High Operating Limit Bid

          Parameter submitted by the Participant, and which submission is

          not excused under the provisions of paragraph (b) of this

          Subsection or Subsection 13.4.2.4 or 13.4.2.5 or Section 13.4.6.

                    (b)  The ability of a Resource to perform for short

          periods during System Emergencies may vary from the long-run

          performance to be expected in accordance with Good Utility

          Practice.  The demonstration that a  Resource is capable of

          higher output on a short-term basis during System Emergencies

          shall not be evidence of the Resource's long-run performance.

          13.4.2.2  Misrepresentation Regarding Operating Conditions.

                    A misrepresentation regarding operating conditions

          means the making by a Participant of any statement to the ISO

          regarding inability or restricted ability of its Resource to

          perform, or the unavailability or restricted availability of its

          transmission facilities, including any statement as to the

          existence of a forced outage, Force Majeure or System Emergency

          affecting its facilities, in circumstances where the Participant

          knew or should have known the statement to be materially

          inaccurate and such misrepresentation is not excused under the

          provisions of Subsection 13.4.2.4 or 13.4.2.5 or Section 13.4.6.

          13.4.2.3  Misrepresentation of Resource Availability.

                    Misrepresentation with respect to Resource availability

          means (i) a failure by a Participant to advise the ISO as soon as

          reasonably practical that a Resource or Type 3 or 4 Dispatchable

          Load which the Participant has Bid for Operating Reserve could

          not respond upon request in accordance with the Bid Parameters

          submitted by the Participant for TMSR, TMNSR, or TMOR, in

          circumstances where the Participant knew or should have known

          such Resource's inability to respond, unless such failure is

          excused under the provisions of Subsection 13.4.2.4 or 13.4.2.5

          or Section 13.4.6, or (ii) a failure by a Participant to advise

          the ISO as soon as reasonably practical that one or more of its

          Resources for which the Participant will receive credit or a

          payment for an hour is not available, in whole or in part, and

          therefore does not meet the criteria for an Operable Capability

          Entitlement in circumstances where the Participant knew or should

          have known that such Resource or Resources fail to meet Operable

          Capability criteria unless such failure to meet Operable

          Capability criteria is excused under the provisions of Subsection

          13.4.2.4 or 13.4.2.5 or Section 13.4.6.

          13.4.2.4  Excuse for Good Faith Description.

                    (a)  Resource performance and availability are subject

          to, among other factors, climatic variations and emissions,

          license and other limitations.  A good faith effort to describe

          in a Bid the technical abilities of equipment in expected

          operating conditions is not subject to sanction if actual

          operating conditions vary.  However, a Participant is still

          expected to provide an appropriate Redeclaration if operating

          conditions vary materially from an applicable Bid.

                    (b) A Participant shall be deemed to have satisfied its

          obligation to deliver accurate information as to operating

          conditions or Resource availability if it had made a good faith

          effort to supply accurate, responsive information; inadvertent

          errors or omissions shall not be Sanctionable Behavior.

          13.4.2.5  Certain Economic Decisions Excused.

                    Participants may make decisions affecting the

          availability of a Resource for reasons relating to the economics

          of operating that Resource.  Such decisions may include, but are

          not limited to, sale of gas available to the Participant as fuel

          for such Resource, reducing output temporarily to defer

          maintenance in response to unanticipated operating difficulties

          or refueling, or shutting down a Resource during a period when

          the Participant does not reasonably expect the Resource-specific

          NEPOOL market revenues to justify operation of the Resource in

          that period.  For such decisions, the Participant shall not be

          subject to sanction under Subsection 13.4.2.1 or 13.4.2.2 so long

          as it provides to the ISO timely information that accurately

          describes the nature of the Participant's decision and result of

          such decision on the performance of such Resource and otherwise

          acts in accordance with the applicable provisions of NEPOOL

          Operating Procedure 5 (Unit Outages) or any other rule that

          provides for the coordination required to minimize the impact of

          Resource unavailability on Short-Term Reliability, including

          obtaining permission to the extent required by Operating

          Procedure 5 or such other rule.  It is not the intent of this

          Subsection's reference to Operating Procedure 5 or other rules to

          require a Participant to provide services from all or a portion

          of a Resource where the Resource-specific NEPOOL market revenues

          derived from the provision of such service do not justify the

          associated operating costs or lost opportunity costs of providing

          such service from such Resource.  It is also not the intent of

          this Subsection to provide a basis for a Participant to

          circumvent the Market Power Mitigation Rule or any other NEPOOL

          Rule.

     13.4.3 Failure to Follow ISO Instructions.

          13.4.3.1  Failure to Follow Scheduling Procedures.

                    Failure to comply with applicable NEPOOL Rules for

          scheduling or rescheduling Resource maintenance, including

          failure to follow an established schedule without rescheduling,

          which failure is intentional on the part of the Participant and

          is not excused under the provisions of Section 13.4.6.

          13.4.3.2  Failure to Follow Transmission Instructions.

                    Failure to follow transmission instructions means (i)

          failure to follow routine ISO transmission dispatch instructions,

          or (ii) failure to follow ISO operating instructions during a

          System Emergency with respect to transmission facilities or (iii)

          failure to comply with applicable NEPOOL Rules for scheduling or

          rescheduling transmission maintenance, including failure to

          follow an established schedule without rescheduling, which

          failure, in any such case, is intentional on the part of the

          Participant and is not excused under the provisions of Section

          13.4.6.

     13.4.4 Failure to Provide Information.

          13.4.4.1  Routine Reports.

                    Failure to provide timely, accurate routine scheduled

          reports, which is not excused by Subsection 13.4.4.6 or Section

          13.4.6.

          13.4.4.2  Emergencies or System Disturbances.

                    Failure to provide timely, accurate information in

          response to ISO inquiries about System Emergencies or

          disturbances in the NEPOOL Control Area, which is not excused by

          Subsection 13.4.4.6(b) or Section 13.4.6.

          13.4.4.3  Special Information Requests.

                    Failure by a Participant to meet an agreed schedule to

          provide information that the ISO needs to perform its obligations

          under the ISO Agreement, for purposes other than current

          operations, that is not contained in routine scheduled reports,

          or to work in good faith to establish such a schedule that is

          reasonable based on the complexity of the information request and

          the urgency of the ISO's need for the information that, in either

          case, is not excused by Subsection 13.4.4.6 or Section 13.4.6.

          13.4.4.4  Market Settlement Information.

                    Failure to provide timely or accurate billing or

          metering information or similar information used in Settlement,

          which is not excused by Subsection 13.4.4.6(b) or Section 13.4.6.


          13.4.4.5  Resource Information

                    Failure to provide, in response to an ISO inquiry,

          pertinent information that a Participant knew or should have

          known about the ability of its Resource to perform, which failure

          is not excused under the provisions of Subsection 13.4.4.6(b) or

          Section 13.4.6.

          13.4.4.6  Timeliness and Accuracy.

                    (a) If a Participant, for good cause, requests an

          extension of time to deliver information subject to a routine

          scheduled report or a special information request, the ISO shall

          grant a reasonable extension, and failure to provide information

          by the original delivery date shall not be Sanctionable Behavior.

                    (b) A Participant shall be deemed to have satisfied its

          obligation to deliver accurate information if it has made a good

          faith effort to supply accurate, responsive information;

          inadvertent errors or omissions shall not be Sanctionable

          Behavior.

     13.4.5 Relationship with and Failure to Comply with Market Mitigation

Rule

               (a)  Certain Participant conduct may be both Sanctionable

Behavior and among the Participant actions identified by the ISO as a basis

for imposing a mitigation remedy under the Market Power Mitigation Rule.

Provided that the ISO makes the necessary findings and follows the

applicable procedures under this Rule, the ISO may impose sanctions under

this Rule for Sanctionable Behavior without regard to whether the ISO also

imposes or seeks to impose any mitigation remedy on the Participant for the

same conduct under the Market Power Mitigation Rule.  In addition, provided

that the ISO makes the necessary findings and follows the applicable

procedures under the Market Power Mitigation Rule, the ISO may impose one

or more mitigation remedies under the Market Power Mitigation Rule without

regard to whether the ISO seeks to impose or imposes sanctions under this

Rule for Sanctionable Behavior that forms the basis for a mitigation

remedy.

               (b)  To the extent that compliance with a Market Power

Mitigation Rule remedy requires specific actions by a Participant, and such

mitigation remedy is not currently the subject of ADR review under that

Rule and has not been removed as the result of ADR review, the ISO may

sanction a Participant under this Rule for a failure by that Participant to

comply with such mitigation remedy whether or not such failure is

intentional, unless such failure is excused under the provisions of Section

13.4.6.

     13.4.6 Certain Behavior Excused.

          13.4.6.1  Force Majeure.

                    No failure by a Participant to perform Participant

          Obligations shall be Sanctionable Behavior to the extent and for

          the period that the Participant's inability to perform is caused

          by an event or condition of Force Majeure affecting the

          Participant; provided that the Participant gives notice to the

          ISO of the event or condition as promptly as possible after it

          knows of the event or condition and makes all reasonable efforts

          to cure, mitigate or remedy the effects of the Force Majeure

          event or condition.



          13.4.6.2  Safety, Licensing or Other Requirements.

                    No failure by a Participant to perform Participant

          Obligations shall be Sanctionable Behavior if the Participant is

          acting in good faith to preserve the safety of persons or the

          safety or integrity of equipment subject to Dispatch Instructions

          or to comply with facility licensing, environmental or other

          requirements of law.

          13.4.6.3  Emergencies.

                    No failure by a Participant to perform Participant

          Obligations shall be Sanctionable Behavior if the Participant is

          acting in good faith and consistent with Good Utility Practice to

          preserve system reliability in a System Emergency or other system

          disturbance; provided that a Participant shall not override

          direct ISO instructions except in cases described in Subsection

          13.4.6.2.

          13.4.6.4  Conflicting Directives.

                    To the extent that any action or omission by a

          Participant is specifically required by the NEPOOL Rules or by

          ISO instructions, such action or omission shall not be

          Sanctionable Behavior.

          13.4.6.5  Time Limitation.

                    No failure by a Participant to perform Participant

          Obligations shall be subject to sanction if the Participant's

          failure occurred more than six months prior to the ISO providing

          written notice to the Participant pursuant to Section 13.6.1 of

          the ISO's belief that such failure may constitute Sanctionable

          Behavior.

     13.4.7 Interpretation.

          13.4.7.1  Intent.

                    Where any subsection of Section 13.4 requires that

          behavior be intentional to constitute Sanctionable Behavior, the

          ISO may make a finding that behavior is intentional if it finds

          (i) direct evidence of intent, (ii) evidence of reckless

          endangerment of Short-Term Reliability or (iii) evidence of a

          pattern of unexcused behavior or circumstances from which the ISO

          may reasonably infer that the behavior was intentional.  In

          making an inference as to intent pursuant to clause (iii) above,

          the ISO shall consider the financial benefits or detriments to

          the Participant of its behavior and the adequacy of any

          alternative explanation provided by the Participant for its

          behavior.  Actions taken by a Participant in good faith shall not

          be viewed as part of a pattern of unexcused behavior or otherwise

          serve as the basis of a finding of intent.  The ISO shall also

          consider the degree to which the Participant's behavior

          materially impaired or threatened to materially impair Short-Term

          Reliability or the competitiveness or efficiency of the markets

          and shall not infer intent pursuant to clause (iii) above unless

          the ISO finds that the Participant's behavior materially impaired

          or threatened to materially impair Short-Term Reliability or the

          competitiveness or efficiency of the markets.  Small variations

          from permitted deviations or specified time limits provided in

          the applicable Appendices to Rule 14 shall be presumed to be

          inadvertent unless there is specific evidence to the contrary.

          Behavior that would materially impair Short-Term Reliability or

          the competitiveness or efficiency of the markets if it were

          engaged in on a widespread basis by other Participants to the

          same degree and at the same time as by the Participant engaging

          in the behavior, shall be deemed to threaten to materially impair

          Short-Term Reliability or the competitiveness or efficiency of

          the markets, as the case may be.

          13.4.7.2  Knowledge.

                    Where any subsection of Section 13.4 requires that the

          ISO determine that a Participant "knew or should have known"

          particular information as an element of a determination that

          Sanctionable Behavior has occurred, the ISO may only make a

          finding based on evidence that the Participant's operating

          personnel, other persons responsible for communicating such

          information to the ISO, or management personnel supervising such

          persons (i) knew the relevant information, (ii) had the relevant

          information readily available to them in normal control room

          displays or operating records or (iii) failed to obtain the

          relevant information, and such information was readily available

          to them from third parties, but only to the extent that failure

          to obtain such third-party information constitutes reckless

          endangerment of Short-Term Reliability.  Failure of a Resource to

          attain one or more Bid Parameters on one or more occasions does

          not constitute evidence that a Participant knew or should have

          known that the Resource could not subsequently attain such Bid

          Parameters.  The ISO may consider a Participant's efforts (or

          lack of efforts) to investigate a Resource's failure to perform,

          its efforts to correct any deficiencies and the Participant's

          conclusions as to whether they have been corrected.  Failure to

          obtain information that is readily available as described in

          clauses (ii) or (iii) above is excused during the continuance of

          the circumstances described in Sections 13.4.6.1 through

          13.4.6.3.

13.5 Sanctions.

     13.5.1    Amount and Nature.

               Appendix A to this Rule sets forth the maximum applicable

sanctions with respect to each category of Sanctionable Behavior set forth

in Section 13.4 subject to potential increase under Section 13.5.3 in

certain circumstances.  In most cases the ISO may impose three categories

of sanctions:

          (a)  FORMAL WARNING.  A Formal Warning consists of written

notification from the ISO to a Participant stating that Sanctionable

Behavior has occurred and directing the Participant not to engage in

further Sanctionable Behavior.

          (b)  ADMINISTRATIVE SANCTIONS.  Administrative Sanctions consist

of fixed, per-event monetary charges set forth in Appendix A imposed on

Sanctionable Behavior.

          (c)  FORMULA-BASED SANCTIONS.  Formula-Based Sanctions are

monetary charges determined by a formula set forth in Appendix A imposed on

Sanctionable Behavior.

          In imposing an Administrative Sanction or a Formula-Based

Sanction, the ISO may impose the sanction in a lesser amount than that

specified in Appendix A if it determines that the lesser amount will have a

sufficient deterrent effect.

     13.5.2    Cumulative Effect.

          (a)  Sanctions imposed under this Rule are in addition to (i) any

consequences for Settlement set forth in Rule 14 and (ii) any mitigation

remedies available to the ISO under the Market Power Mitigation Rule.

          (b)  The ISO may impose both an Administrative Sanction and a

Formula-Based Sanction with respect to the same Sanctionable Behavior if it

believes both sanctions are necessary for appropriate deterrence.

          (c)  If a single event is sanctionable under two different

sections or subsections of this Rule, the ISO may only impose a sanction

under one of such sections or subsections; provided that if an event is

sanctionable under one or more sections or subsections and is also

sanctionable under Section 13.4.5, the ISO may impose Administrative

Sanctions under Section 13.4.5 and a sanction under one other section or

subsection.  For purposes of this Rule an "event" means the facts and

circumstances constituting a single occurrence of behavior, or multiple

occurrences of the same sanctionable behavior within a day, sanctionable

under this rule.  While the ISO may review a pattern of behavior, for

example, to make a finding of intent under Subsection 13.4.7.1, the pattern

of behavior may consist of multiple events, each one of which is subject to

sanction once a finding of intent is made.  With respect to operating

behavior, an event relates to a single operating action.  For example, if

the ISO gives an instruction to ramp up a Resource and the Participant

fails to ramp up, that failure is a single event even if it continues over

several hours and despite repeated instructions.  However, providing

inaccurate information about the Resource to the ISO in response to

questions about the failure to ramp up is a separate event as is failure of

the same Resource to ramp down later in the day.  Failure to provide

information relates to a particular report or a particular request for

information, and separate inaccuracies in the same report or in response to

the same information request are not separate events.

     13.5.3    Increased Sanctions.

               The ISO may increase Administrative Sanctions and Formula-

Based Sanctions to an amount up to triple the base amount of the sanction

in the following circumstances:

          (a)  If Sanctionable Behavior occurs during a System Emergency; or

          (b)  If the ISO determines that the Sanctionable Behavior is part

of a continuing pattern of Sanctionable Behavior for which one or more

monetary sanctions have previously been imposed upon the Participant; or

          (c)  If the Sanctionable Behavior is a failure by a Participant

to comply with any market mitigation remedy the ISO has imposed on such

Participant pursuant to the Market Power Mitigation Rule that is not

currently the subject of ADR review under that Rule and has not been

removed as the result of such ADR review.

     13.5.4    Costs.

               In addition to applicable sanctions, if a monetary sanction

is imposed, the ISO may charge to the sanctioned Participant the reasonable

costs of the ISO's investigation of the Sanctionable Behavior.  Such costs

will be payable after the deadline for requesting ADR has passed and any

requested ADR proceedings are complete and the ADR decision in any such

proceeding sustains the imposition of a monetary sanction.

     13.5.5    Disclosure.

               Except as provided in this Section 13.5.5, the ISO will not

disclose the imposition of particular sanctions on a particular

Participant, but will make periodic reports of sanctions imposed and the

Sanctionable Behavior upon which such sanctions were imposed that do not

identify Participants by name or provide a basis for identifying such

Participants.  However, the ISO may make disclosure of monetary sanctions

imposed on a particular Participant if in the ISO's judgment such

disclosure is warranted by the nature of the Sanctionable Behavior and

monetary sanctions previously imposed on the Participant have been

unsuccessful in deterring repeated Sanctionable Behavior.  The ISO shall

notify the Participant before making disclosure, and the Participant shall

be entitled to obtain ADR review of the proposed disclosure.  No disclosure

of a monetary sanction will be made until after the deadlines for

requesting ADR with respect to the sanction and proposed disclosure have

passed and any requested ADR proceedings are complete and the ADR decision

sustains the ISO's actions.

13.6 Process for Imposing Sanctions.

     13.6.1    Observation and Communication.

               If, in the conduct of system operations or Settlement, in

auditing Resource performance under Rule 14, in making inquiry of

Participants about operating problems, in monitoring the competitiveness

and efficiency of the markets, or otherwise in the receipt of information

relevant to the performance of its duties, the ISO discovers behavior that

it believes may constitute Sanctionable Behavior, the ISO shall:

          (a)  make a record of the information leading to ISO's belief

that Sanctionable Behavior may have occurred; and

          (b)  contact the Participant whose behavior is in question,

inform the Participant of the information leading to the ISO's belief that

Sanctionable Behavior may have occurred, and provide the Participant the

opportunity to discuss the behavior observed or documented by the ISO and

to offer additional facts or explanation of circumstances (i) that tend to

show that no Sanctionable Behavior occurred or (ii) that should be weighed

in determining whether to impose a sanction and, if so, what level of

sanction to impose.

          The ISO may make use of information provided by third parties in

forming the basis for an inquiry to a Participant about possible

Sanctionable Behavior, and is not required to reveal the identity or

existence of such third parties.  However, unsubstantiated statements by

third parties may not serve as the basis for the imposition of sanctions.

     13.6.2 Consideration by ISO.

          13.6.2.1  Occurrence of Sanctionable Behavior.

                    Based upon information in its possession and

          information provided by the Participant, the ISO shall first

          determine if Sanctionable Behavior has occurred.  To conclude

          that Sanctionable Behavior has occurred under any specific

          subsection of Section 13.4, the ISO must make (i) a written

          finding with respect to each element of such Sanctionable

          Behavior, as set forth in the relevant subsection, including the

          basis of any finding as to intent or state of knowledge under

          Section 13.4.7, (ii) a written finding with respect to the

          duration of the Sanctionable Behavior and (iii) a written finding

          that the Sanctionable Behavior is not excused by any specific

          provision of Section 13.4;

          13.6.2.2  Level of Sanction.

                    (a) If the ISO determines that Sanctionable Behavior

          has occurred, the ISO may impose a sanction under Section 13.5.

          In determining which sanction or sanctions to apply, the ISO

          shall consider:

          o    The nature of the Sanctionable Behavior and the degree of

               impact on Short-Term Reliability or the competitiveness and

               efficiency of markets;

          o    The Participant's past history of Sanctionable Behavior

               and the nature of sanctions previously imposed; and

          o    The promptness and effectiveness of the Participant's

               response in correcting the Sanctionable Behavior.

                    (b) Ordinarily, the ISO will issue a Formal Warning

          before imposing a monetary sanction for similar behavior.

          However, in cases of Sanctionable Behavior that materially

          impairs Short-Term Reliability or the competitiveness or

          efficiency of markets, or reflects the sanctioned Participant's

          unexcused failure to obey ISO instructions, the ISO may directly

          impose a monetary sanction.  The ISO has no obligation to

          consider a Formal Warning with respect to sanctions imposed under

          Section 13.4.5.  The ISO will select the level of sanction based

          on its determination of the need for effective deterrence and

          consistency with sanctions imposed in similar circumstances.

                    (c) The ISO shall make (i) a written finding with

          respect to the level of sanction imposed and the factors

          considered by it pursuant to Subsection 13.6.2.2(a), (ii) a

          written finding with respect to the basis of any increased

          sanction pursuant to Section 13.5.3, (iii) a calculation of the

          amount of any monetary sanction, and (iv), if disclosure of a

          sanction is proposed, a written finding as to why disclosure of

          the sanction is appropriate.

     13.6.3    Notice and Payments.

               The ISO shall give written notice to the Participant of the

imposition of any sanction, together with its written findings as required

under Section 13.6.1 and 13.6.2.  The ISO's invoice for the amount of a

sanction will be sent to the sanctioned Participant with the notice of the

sanction.  Payments of sanctions received shall be reflected as a credit to

Schedule 3 charges under the ISO Tariff (allocated on a Voting Share basis)

for Participants other than the sanctioned Participant.  The Participant

shall pay the amount of the sanction to the ISO or post a bond for the

amount of the sanction if the Participant is seeking review of such

sanction under the ADR process of Section 13.7 within 30 days of the date

of the ISO's invoice.

     13.6.4    No Limitations on Other Rights of the ISO.

               Nothing contained in this Rule shall limit the ability of

the ISO to collect information from Participants or to institute new rules

pursuant to Section 6.17 of the ISO Agreement.

13.7 ADR Review of Sanctions.

     13.7.1    Actions That Can Be Reviewed.

               (a)  A Participant may obtain prompt ADR review of any

sanction (other than a formal warning) imposed by the ISO on that

Participant and any proposed disclosure of a sanction.  Actions subject to

review are:

          o     Imposition of a sanction;

          o     Level of sanction imposed;

          o     Increase of a sanction under Section 13.5.3;

          o     Basis of calculation of a Formula-Based Sanction; and

          o     Proposed disclosure of a sanction.

                The Participant must make a written request for ADR review

within 30 days of the delivery of the ISO's notice of imposition of the

sanction and a bill for the amount of the sanction, or the delivery of the

ISO's notice of proposed disclosure of a sanction, if the Participant

proposes to seek ADR review.

          (b)  A Participant may not obtain ADR review of the issuance of a

Formal Warning.  It may, however, deliver to the ISO within 30 days of the

issuance of the Formal Warning a written statement of its reasons for

disputing the imposition of the Formal Warning.  The ISO shall retain any

such written statement with its record of the imposition of the Formal

Warning.  If the ISO relies on its prior imposition of the Formal Warning

as a basis for imposing a more severe sanction for subsequent Sanctionable

Behavior, the written statement shall also be made part of the record in

any ADR proceeding relating to the subsequent Sanctionable Behavior.  The

ISO may, but is not obligated to, reconsider its decision to issue the

Formal Warning upon receipt of the written statement.  If the ISO

determines to withdraw the Formal Warning, it shall so notify the

Participant in writing, and the Formal Warning shall not be referred to in

any subsequent proceeding or report or made the basis for any subsequent

action.

          (c)  A Participant may seek ADR review of the actions described

in Section 13.7.1(a), and any request for ADR review will be deemed to be

properly and timely made, if the Participant (i) timely pays the full

amount of the sanction imposed or (ii) timely posts a bond with the ISO

assuring payment in full of the sanction.  Unless such timely payment or

posting of a bond occurs, the Participant may not obtain ADR review of the

imposition of a monetary sanction.  If the Participant makes payment in

full of the sanction amount, it may, by notice accompanying its payment,

state that it is paying subject to the outcome of the ADR review.  The ISO

will hold in escrow and invest any payment accompanied by such a notice

pending the outcome of the ADR process, and will refund any amount by which

the sanction is reduced or refund the entire amount if the sanction is

removed, in either case, together with interest at the rate specified in

the NEPOOL Tariff, within 30 days of the decision rendered by the ADR

Neutral.

     13.7.2    Factual Basis for ADR Review; Preliminary Meeting.

               (a)  In connection with its request for ADR review, the

Participant shall deliver to the ISO any information that it believes is

pertinent to the ISO's decision that it wishes to submit to the ADR

Neutral.  The ISO will deliver to the Participant within ten business days

thereafter a listing of all information on which it relied in making its

decision and any other information that it intends to provide to the ADR

Neutral, together with copies of any of such information not previously

supplied to the Participant.  The ISO shall provide, together with its

listing of information, a notice setting a date not sooner than five

working days after the date of the notice, for a meeting between the

Participant and the ISO to discuss their differences.  The Participant may

supply prior to the date of the meeting additional information in response

to any new information delivered by the ISO.  If the parties are unable to

resolve their differences at the meeting, an ADR Neutral shall be selected

as provided in Section 13.7.6.3 and the written information from both

parties shall be forwarded to the ADR Neutral.

          (b)  The written record for the ADR review will consist of (i)

all information provided by the Participant to the ISO up to the date of

the meeting held pursuant to paragraph (a) above and identified by the

Participant as relevant to the action of the ISO under review, and (ii) all

information furnished by the ISO to the Participant that supports its prior

written determination, and (iii) position statements by the Participant and

the ISO.  The Participant's statement of position shall include a brief

written statement of its disagreement with the determination of the ISO and

the specific relief that it requests.  The ISO's statement of position may

supplement its written notice given pursuant to Section 13.6.3 and may

specify any change in its position from that notice.  Each party shall

provide the other with copies of all material submitted by it to the ADR

Neutral.

     13.7.3    Nature of Review.

               On the basis of the written record and the presentations of

the ISO and the Participant, the ADR Neutral shall review the facts and

circumstances which relate to the ISO decision and the sanction imposed by

the ISO including any proposed disclosure.  The ADR Neutral shall remove or

reduce the ISO's sanction or prohibit the disclosure if it concludes that

the ISO could not reasonably make its findings with respect to the

occurrence of Sanctionable Behavior pursuant to Section 13.6.2.1 or the

level of the sanction and the appropriateness of a proposed disclosure

pursuant to Section 13.6.2.2 in light of the entire factual record

presented to the ADR Neutral and applicable law.  The ADR Neutral shall

separately consider the ISO's findings as to (i) the occurrence and

duration of the Sanctionable Behavior, (ii) the level of the sanction

imposed, (iii) the basis for an increased sanction imposed pursuant to

Section 13.5.3, (iv) the basis of calculation of any monetary sanction and

(v) the appropriateness of disclosure.

     13.7.4    Parties to ADR Review.

               The ADR review is confidential.  The only parties to an ADR

review are the ISO and the Participant or Participants upon whom the

disputed sanction is imposed.  The ADR review and any record are not open

to nonparties.

     13.7.5    Remedies and Standard of Review.

               (a)  The ADR Neutral shall either affirm, reduce or remove a

sanction and affirm or prohibit disclosure of a sanction.  The ADR Neutral

shall remove the ISO's sanction or prohibit the disclosure if it concludes

that the ISO could not reasonably make its findings with respect to the

occurrence of the Sanctionable Behavior pursuant to Section 13.6.2.1(i) or

(ii) or the appropriateness of a proposed disclosure pursuant to Section

13.5.5 in light of the entire factual record presented to the ADR Neutral

and applicable law.  The ADR Neutral shall reduce a sanction if it

concludes that the ISO could not reasonably make its findings in light of

the entire factual record presented to the ADR Neutral and applicable law

with respect to (i) the duration of the Sanctionable Behavior pursuant to

Section 13.6.2.1(ii), or (ii) the level of the sanction imposed pursuant to

Section 13.6.2.2, or (iii) the basis of any increased sanction pursuant to

Section 13.5.3, or (iv) the calculation of a monetary sanction.  The ADR

Neutral may not compromise or reduce a sanction without a specific

determination respecting one of the four factors above, and any reduction

in the sanction shall specifically identify each finding that could not

reasonably be made in light of the entire factual record presented to the

ADR Neutral and applicable law.  In reaching its decision, the ADR Neutral

shall be entitled to consider the level of sanctions imposed in similar

circumstances as set forth in the ISO's periodic reports.

          (b)  The decision of the ADR Neutral shall be included as a part

of any file or record the ISO maintains concerning the imposition of a

sanction or the disclosure of a sanction for so long as the ISO maintains

such file or record.

     13.7.6 Procedure.

          13.7.6.1  Object.

                    It is the intent of the ADR process that disputes be

          resolved as expeditiously as possible.

          13.7.6.2  Confidentiality.

                    All information disclosed in the course of ADR review

          shall be subject to confidentiality protections that satisfy the

          requirements of the NEPOOL Information Policy.

          13.7.6.3  Selection and Compensation of Neutrals.

                    (a) NEPOOL and the ISO shall identify not fewer than

          three persons who they mutually agree would be appropriate to

          serve as ADR Neutral under this Rule and shall obtain the advance

          consent of such persons to serve as ADR Neutrals for the ADR

          procedure described in this Section.  An appropriate retainer may

          be paid to such persons in return for their agreement to serve,

          which retainer shall be made a part of the ISO's budget.  The ISO

          and NEPOOL may from time to time mutually select additional

          persons to fill vacancies or expand the roster of ADR Neutrals as

          needed.  Each ADR Neutral shall enter into a confidentiality

          agreement with NEPOOL and the ISO.

                    (b) When an ADR Neutral is to be selected from the

          roster pursuant to Section 13.7.2(a), such selection shall be

          made within five business days using the following procedure:

          o    Except as otherwise provided for in Section 13.7.6.7

               below, ADR processes shall be assigned to the ADR Neutral

               whose most recent ADR process handled under this Section

               13.7 was longest ago.

          o    If the schedule of such member of the roster does not

               permit meeting the required schedule for the ADR process,

               that ADR process shall be assigned to the member whose most

               recent ADR process was next longest ago and so forth.

          o    If two or more members of the roster have not handled at

               least one ADR process or handled ADR processes as to which

               hearings were held on the same day, the ADR process shall be

               assigned among such members by lot.

                    The ADR Neutral shall have no financial interest in the

          proceeding and no affiliation with any party that would tend to

          create a conflict of interest.

          13.7.6.4  Hearing.

                    (a) The ADR Neutral who is assigned to an ADR process

          shall receive the complete written record at the time of

          assignment.  The ADR Neutral, in consultation with the parties,

          shall schedule a hearing to be held not later than ten business

          days after the ADR Neutral is selected.  The schedule may be

          altered either by consent of all parties or, if it is clearly not

          possible to provide a fair review within the schedule given the

          complexity of the record, at the direction of the ADR Neutral.

                    (b) After reviewing the written record, the ADR Neutral

          may pose questions in writing or in a conference call with

          representatives of both parties that he or she would like to have

          addressed at the hearing.  All parties shall be copied on any

          written communications between the ADR Neutral and any other

          party.  There shall be no oral communications between the ADR

          Neutral and any party unless all parties have been given notice

          and an opportunity to participate, other than as necessary for

          administrative purposes.

                    (c) At the hearing, each party will have up to four

          hours to present its views regarding the written record and

          applicable law.  A party may, subject to such limitations as the

          ADR Neutral may impose, pose questions to the other party;

          provided that the time spent in responding to questions shall be

          counted against the time limit of the party asking the question.

          A party may reserve time for rebuttal.  There will be no

          witnesses or cross examination, but a party may choose to have

          experts or counsel make all or a portion of its presentation.

          The ADR Neutral is free to question any presenter.

                    (d) The hearing shall be held in Springfield,

          Massachusetts, or such other location as the parties and the ADR

          Neutral may agree.

          13.7.6.5  Decision.

                    The ADR Neutral shall render a reasoned decision in

          writing, stating whether the sanction is affirmed, reduced or

          removed or the proposed disclosure may be made and setting forth

          a statement of reasons for the decision, within five business

          days of the hearing.  Any party may request a meeting with the

          ADR Neutral to discuss the ADR Neutral's decision.

          13.7.6.6  Costs.

                    The costs of the ADR process (including any fees for

          the participation of the ADR Neutral in the specific proceeding

          but not including any retainer for the ADR Neutral) shall be

          assessed to the Participant if the sanction is affirmed, to the

          ISO if the sanction is removed, and apportioned by the ADR

          Neutral among the parties if the sanction is reduced.  Costs

          assessed to the ISO shall be automatically included in the ISO's

          budget.

          13.7.6.7  Related ADR Review.

                    ADR reviews involving the same Resource or Resources or

          Participant or Participants may be determined by the same ADR

          Neutral and may, in appropriate cases, with the consent of all

          parties, be consolidated subject to appropriate confidentiality

          requirements.

          13.7.6.8  Effect of ADR Process, Other Proceedings.

                    The decision of the ADR Neutral is binding on the ISO

          and the Participant except as specifically provided in this

          Section 13.7.6.8.  The ISO may appeal the removal or reduction of

          a sanction to the FERC.  A Participant may appeal the imposition

          of a sanction to the FERC whether or not it has requested an ADR

          process.  Except for this ADR process, a Participant may not seek

          removal or reduction of the sanction in any forum other than the

          FERC.  The ISO may not contest the removal or reduction of a

          sanction in any forum other than the FERC.

     13.7.7    Superseding Agreement.

               The provisions of Section 13.7 of this Rule shall cease to

be in effect at such time as the ISO and the Participants have in effect an

amendment to the ISO Agreement, or an agreement which replaces the ISO

Agreement, which includes ADR provisions and provides that those provisions

are to supersede Section 13.7.


<PAGE>




                                                        APPENDIX A
                                                   SANCTIONABLE EVENTS

<TABLE>
<CAPTION>
 
                     Sanctionable Event                                   Administrative           Formula-Based Sanction*
                                                                             Sanction
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                      <C>

I.   Failure to Perform in Markets as Defined in Section 13.4.1:


     A.   Failure to Provide Energy as defined in Subsection 13.4.1.1:
            Attain High Operating Limit                                   $1000/Event              MW Dev. * 1/2 ECP * Hrs.
            Attain Loan Available for Interruption                        $1000/Event              MW Dev. * 1/2 ECP * Hrs.
 
     B.   Failure to Provide Services as defined in Subsection 13.4.1.2:
            Failure to Move to Desired Dispatch Point                     $1000/Event              MW Dev. * 1/2 ECP * Hrs.
            Activate Operating Reserve                                    $1500/Event              MW Dev. * TMNSR CP * Hrs.
            AGC:                                                          $500/Event

               - Automatic High Limit                                                              MW Dev. * 1/2 ECP * Hrs.
               - Automatic Low Limit                                                               -----
               - Automatic Response Rate                                                           Reg. Dev. * AGC CP * Hrs.

     C.   Failure to Respond to Dispatch Instructions as defined in
          Subsection 13.4.1.3:
            Start-up Generator                                            $500/Event               MW Dev. * TMNSR CP * Hrs.
            Shut-down Generator                                           $500/Event               -----
            Interrupt Dispatchable Load                                   $500/Event               MW Dev. * TMNSR CP * Hrs.
            Turn-On Dispatchable Load                                     $500/Event               MW Dev. * TMNSR CP * Hrs.

</TABLE>


<PAGE>


                                                        APPENDIX A
                                                   SANCTIONABLE EVENTS
<TABLE>
<CAPTION>

 
                     Sanctionable Event                                   Administrative           Formula-Based Sanction*
                                                                             Sanction
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                      <C>

II.  Inaccurate Bid or Operating Information as Defined in
     Section 13.4.2:

     A.   Understatement of High Operating Limit as defined in
          Subsection 13.4.2.1:
            On Bid                                                        $1000/Event              MW Dev. * 1/2 ECP * Hrs.
            On Redeclaration                                              $2000/Event              MW Dev. * 1/2 ECP * Hrs.

     B.   Misrepresentation of Operating Conditions as defined in
          Subsection 13.4.2.2:                                            $5000/Event              MW Dev. * 1/2 ECP * Hrs.

     C.   Misrepresentation of Resource Availability as defined in
          Subsection 13.4.2.3:                                            $1000/Event              MW Dev. * 1/2 CP * Hrs.

III. Failure to Follow ISO Instructions as Defined in Section 13.4.3:

     A.   Failure to Follow Scheduling Procedures as defined in
          Subsection 13.4.3.1:
            Maintenance Scheduling Procedures                             $1000/Event              -----

     B.   Failure to Follow Transmission Instructions as defined in
          Subsection 13.4.3.2:
            Routine Dispatch                                              $1000/Event              -----
            During System Emergency                                       $5000/Event              -----
            Maintenance Scheduling Procedures                             $1000/Event              -----

</TABLE>


<PAGE>


                                                        APPENDIX A
                                                   SANCTIONABLE EVENTS

<TABLE>
<CAPTION>
 
                     Sanctionable Event                                   Administrative           Formula-Based Sanction*
                                                                             Sanction
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                    <C>

IV.  Failure to Provide Information as Defined in Section 13.4.4:                                  N/A

     A.   Routine, Scheduled Reports as defined in Subsection 13.4.4.1:
            Late                                                            $500/Event
            Inaccurate                                                      $1000/Event

     B.   Emergencies or System Disturbances as defined in Subsection
          13.4.4.2:                                                         $2000/Event

     C.   Special Information Requests as defined in Subsection 13.4.4.3:   $1000/Event

     D.   Market Settlement Information as defined in Subsection 13.4.4.4:
            Late                                                            $2000/day
            Inaccurate                                                      $2000/Event

     E.   Resource Information as defined in Section 13.4.4.5               $1500/Event

V.   Disregard of Mitigation Remedies as Defined in Section 13.4.5          $1500/day

</TABLE>


<PAGE>

*    As used in this Appendix A, capitalized terms that are defined in Section
1.1 of Rule 1 (Market Information) are used as defined therein.  The following
capitalized terms or abbreviations used in this Appendix are defined as set
forth below:

MW DEV. - (i) for purposes of Section 13.4.1, the difference in megawatts
between the value fixed by the Participant's Bid for the applicable Resource
and the comparable value actually achieved by the Resource in response to ISO
instructions; (ii) for the purposes of Subsection 13.4.2.1, the difference in
megawatts between the value fixed by a Participant's Bid for the High Operating
Limit of a Resource and the actual High Operating Limit; (iii) for purposes of
Subsection 13.4.2.3, clause (i), the difference in megawatts between the Bid
Parameter fixed by a Participant's Bid for TMSR, TMNSR or TMOR for a Resource
and the actual amount of TMSR, TMNSR or TMOR which the Resource can provide;
and (iv) for purposes of Subsection 13.4.2.3, clause (ii), the number of
megawatts of Operable Capability claimed for an Operable Capability Entitlement
which cannot meet the criteria for an Operable Capability Entitlement.

REG. DEV. - the difference in Reg (a quantity used to represent a Generator's
regulating capability) between the value fixed by the Participant's Bid for the
applicable Resource to provide Automatic Generation Control (AGC) and the
comparable value actually achieved by the Resource.

ECP - the Energy Clearing Price during the hour in which the Sanctionable
Behavior occurs.

CP - the Clearing Price for the applicable market, other than Energy, during
the hour in which the Sanctionable Behavior occurs.

TMNSR CP - the Clearing Price for 10-Minute Non-Spinning Reserve during the
hour in which Sanctionable Behavior occurs.

AGC CP - the Clearing Price for AGC during the hour in which the Sanctionable
Behavior occurs.

HRS. - the number of hours (or fraction thereof) during which Sanctionable
Behavior occurs over a period not earlier than six months prior to the date the
ISO provides written notice to the Participant pursuant to Section 6.1(b).

EVENT - has the meaning specified in Subsection 5.2(c).


<PAGE>
                                   APPENDIX B

Participants shall include language substantially as follows in contracts

for services from entities who are not NEPOOL participants:



"Article X.  Compliance with NEPOOL Market Rules



Seller agrees that it is familiar with the applicable NEPOOL Market Rules

relating to the bidding of its resources into the NEPOOL markets.  Seller

further agrees to comply in all respects with these Rules, and to exercise

the degree of diligence required by Good Utility Practice to assure that

Bid Parameters or information provided to Buyer as to Resource

availability, capability and operating conditions are accurate.  Seller

acknowledges that market settlement consequences and sanctions may be

imposed on Buyer by ISO New England for Seller's failure to meet Bid

Parameters or to respond to operating instructions in accordance with

Section 14 of the market Rules and for Seller's actions that would

constitute Sanctionable Behavior, as defined in Section 13 of the Market

Rules, respectively.  Seller agrees to comply with NEPOOL dispatch

instructions and to provide such information as ISO New England reasonably

requests in order for ISO New England to maintain Short Term Reliability

and determine whether Seller's resource is in compliance with its bid

parameters or whether a Sanctionable Behavior has occurred.


<PAGE>


                            ATTACHMENT E


                         Policy Statement


POLICY STATEMENT FOR THE FINANCIAL ASSURANCE REQUIREMENTS AND
ADMINISTRATION THEREOF FOR NEPOOL OPEN ACCESS TARIFF:

Section 11 of the above Tariff provides that each Transmission Customer
which is not a signatory of the NEPOOL Agreement ("NON-PARTICIPANT") may be
subject to a reasonable credit review by NEPOOL to assure that it has the
financial ability to pay for services provided under the Tariff.  In
addition, Section 31.3 of the Tariff sets forth SPECIFIC REQUIREMENTS FOR
DEPOSITS FOR FIRM POINT-TO-POINT TRANSMISSION SERVICE to be provided at the
time of application regardless of an entity's demonstration to NEPOOL of
its financial ability to pay for services under the Tariff.

The purpose of this policy is (i) to establish for NEPOOL commercially
reasonable credit review procedures to assess the financial ability of a
Non-Participant to pay for services under the Tariff (ii) to set forth
requirements for alternative forms of security that will be deemed
acceptable to NEPOOL and consistent with commercial practices established
by the Uniform Commercial Code that protects the Participants against the
risk of non-payment by Non-Participants, and (iii) to set forth the
conditions under which NEPOOL will conduct business so as to avoid the
possibility of failure of payment for services rendered under the Tariff.

The following procedures and requirements will apply to all Non-
Participants.  Generally, any such Non-Participant whose long-term debt is
not rated at least "A-" or its equivalent by Standard & Poor's (or, if such
debt is not rated by Standard & Poor's, by another nationally recognized
credit rating agency acceptable to NEPOOL), will be required to provide
additional financial assurances, which additional financial assurances may
be in the form of prepayments, cash deposits, letters of credit and
corporate guaranties, as described in detail below.  The requirement to
continue the prepayment, cash deposit or letter or credit may be reviewed
by NEPOOL after one year of providing service to such Non-Participant.

FINANCIAL STATEMENTS
Each Non-Participant applicant for service under the Tariff should submit
proof of financial viability to NEPOOL's satisfaction with its application
to demonstrate the applicant's ability to meet its obligations.

Applicants for Tariffs or their parent company (if applicable) should
submit audited financial statements for at least the immediately preceding
three years including, but not limited to, the following information:

                    Balance Sheets
                    Income Statements
                    Statements of Cash Flows
                    Notes to Financial Statements


Additionally, the following information for at least the immediately
preceding three years, if available, should be included in the application:

                    Annual and Quarterly Reports
                    10-K, 10-Q, and 8-K Reports

Non-Participants should also include at least one back reference and three
(3) Utility credit references.  In those cases where a Non-Participant does
not have three (3) Utility credit references, up to three (3) trade payable
vendor references may be substituted.

Non-Participants must also include any information as to any known or
anticipated material lawsuits, as well as any prior bankruptcy declarations
by the Non-Participant, or by its predecessor(s), if any.

In the case of certain municipals, public power entities or privately owned
companies, some of the above financial submittals may not be applicable.

CHANGE OF FINANCIAL STATUS
Each Non-Participant receiving service under the Tariff is responsible for
informing NEPOOL in writing, within ten (10) business days, of any material
change in its financial status during the period that the Tariff is in
effect.  A material change in financial status includes, but it not limited
to the following: a downgrade of long or short term debt by a major rating
agency, a bankruptcy filing, insolvency, a report of a significant
quarterly loss or decline of earnings, the resignation of key officer(s),
and/or the filing of a material lawsuit that could materially impact
current or future financial results.  NEPOOL will use this information to
evaluate whether a change to the financial assurance requirements is
necessary.

PREPAYMENT
For the Tariff listed above, prepayment of anticipated Tariff charges
provides an acceptable form of financial assurance to NEPOOL.  The
prepayment must be wire transferred to the account of NEPOOL prior to the
start of the transaction.  No interest will be credited by NEPOOL on the
prepayment and any overpayment in excess of the actual billed amount will
be returned.  In the absence of a prepayment, service under the Tariff will
be suspended unless another acceptable form of financial assurance is
provided, as described below.

CASH DEPOSIT
For the Tariff listed above, a cash deposit provides an acceptable form of
financial assurance to NEPOOL.  If the transaction is for three (3) months
or less, the amount of the deposit should equal the contemplated charges
for the transaction.  If the transaction is for greater than three (3)
months, the amount of the deposit must equal at least three and one-half
consecutive months of contemplated charges.  The three and one-half months
is based on the time lag between when service is initially provided and
when NEPOOL can prepare the required FERC filing to suspend service.  If
the deposit amount falls below the required level, it must be replenished;
otherwise, service under the Tariff will be suspended.  For a long-term
contract (greater than one year), the minimum length of time that the
deposit will be required is one year plus three and one-half months
following the effective date of the Tariff agreement.  The requirement to
continue the deposit may be reviewed by NEPOOL after one year of providing
service.  Consideration will be given to replacing the cash deposit with a
corporate guaranty if certain conditions are met, as discussed below in the
Corporate Guaranty section.

LETTER OF CREDIT
An unconditional and irrevocable standby letter of credit may be provided
in lieu of a prepayment or cash deposit for receipt of service under the
Tariff, but is subject to the same conditions as stated above in the
paragraph addressing cash deposits.  A single letter of credit may be
established to provide financial assurance for a customer under multiple
tariffs that are in effect.

Depending on the conditions of the transaction, the duration of the letter
of credit may vary.  For transactions of relatively short duration (i.e., 3
months or less), a separate renewable letter of credit may be prepared for
each transaction.  For transactions of longer duration, the letter of
credit must equal at least three and one-half consecutive months of
anticipated charges for the transaction (for the same reasons stated above
under "Cash Deposit").  In either case, the letter of credit will expire
only when full payment has been received by NEPOOL and NEPOOL has provided
a written release to the financial institution that issued the letter of
credit.  Consideration will be given to replacing the letter of credit with
a corporate guaranty if certain conditions are met, as discussed below in
the Corporate Guaranty section.

The form, substance, and provider of the letter of credit must all be
acceptable to NEPOOL.  The letter of credit should clearly state the full
names of the "Issuer," "Account Party" and "Beneficiary" (NEPOOL), the
dollar amount available for drawings, and should include a statement
required on the drawing certificate and other terms and conditions that
should apply.  It should also specify that funds will be disbursed, in
accordance with the instructions, within one (1) business day after due
presentation of the drawing certificate.  The financial institution issuing
the letter of credit must have a minimum of an "A-" by Standard and Poor's
or equivalent long-term debt rating by either Moody's or one other
nationally recognized rating agency.  Additionally, adequate documentation
regarding the signature authority of the person signing the letter of
credit.

Please refer to Attachment 1, which provides a generally acceptable sample
Letter of Credit.

USE OF TRANSACTION SETOFFS
Under certain conditions, NEPOOL may be involved in other transactions with
a wheeling customer in which NEPOOL is the buyer.  In this event, the
amount of the prepayment, cash deposit or letter of credit required for
financial assurance for the contemplated tariff transactions may be reduced
("setoff") by an amount equal to NEPOOL's unpaid balance or expected
billing under the other transaction.  The terms and the amount of the
setoff must be approved by the Tariff Account Administrator.  The Tariff
Account Administrator handling the tariff transaction is responsible for
monitoring the status of the setoff and ensuring that an adequate financial
assurance balance is maintained at all times until the transaction is
settle.

CORPORATE GUARANTY
A corporate guaranty as a form of financial assurance may be appropriate
for Non-Participants who are owned by a parent company ("Guarantor").  A
company for which a letter of credit, prepayment or cash deposit was
initially required may have the opportunity to substitute to a corporate
guaranty if the following conditions are met:

     1.   NEPOOL determines that the Non-Participant has satisfactorily met
          its payment obligations for service rendered under the Tariff for
          at least one-year;
     2.   NEPOOL determines that there has been no deterioration of the
          financial condition of either the Non-Participant or its
          Guarantor, based on audited financial statements; and
     3.   The form of the corporate guaranty is acceptable to NEPOOL.

Upon NEPOOL's written authorization, the Non-Participant may substitute a
corporate guaranty that is issued by the Guarantor for a cash deposit or
bank letter of credit when it has satisfied the conditions stipulated
above.  The corporate guaranty is considered to be a lesser form of
financial assurance than a cash deposit or letter of credit, and therefore
is allowed as an acceptable form of financial assurance only to those
customers which have satisfied their payment obligations to NEPOOL in a
timely manner for at least one year.

The corporate guaranty may only be used if the customer is a direct or
indirect subsidiary of a larger corporate entity that has greater financial
assets, a strong balance sheet and income statement, and an investment
grade long-term debt rating (Standard & Poor's "A-" or better).  If the
long term credit rating of the Guarantor is not considered to be at least
investment grade, the corporate guaranty may not be used to replace the
Non-Participant's required prepayment cash, deposit or letter of credit.

The corporate guaranty should clearly state the identities of the
"Guarantor," "Beneficiary," and "Obligor," and the relationship between the
Guarantor and the Non-Participant Obligor.  Additionally, it should specify
the term of the guaranty and the conditions under which payment to the
Beneficiary will be made.  The corporate guaranty must be signed by an
officer of the Guarantor.  Additionally, adequate documentation regarding
the signature authority of the person signing the corporate guaranty must
be provided with the corporate guaranty.



<PAGE>

                          SAMPLE LETTER OF CREDIT

Three Riverway, Suite 1700
Houston, Texas 77056
Tel: (713) 629-8666
Fax: (713) 629-7533                                    April 6, 1995
Telex: 6868916, 794538, 794505
Swift: ABNAUS4H

                IRREVOCABLE STANDBY LETTER OF CREDIT NO.

EXPIRY: 15IAN96 AT OUR COUNTERS

WE DO HEREBY ISSUE AN IRREVOCABLE NON-TRANSFERABLE STANDBY LETTER OF CREDIT
BY ORDER OF AND FOR THE ACCOUNT OF            ON BEHALF OF
IN FAVOR OF                         SERVICE COMPANY ("NUSCO") IN AN AMOUNT
NOT EXCEEDING US$400,000.00 (UNITED STATES DOLLARS FOUR HUNDRED THOUSAND
AND 00/100) AGAINST PRESENTATION TO US OF A DRAWING CERTIFICATE SIGNED BY A
PURPORTED OFFICER OR AUTHORIZED AGENT OF NUSCO AND DATED THE DATE OF
PRESENTATION CONTAINING THE FOLLOWING STATEMENT:

     "THE UNDERSIGNED HEREBY CERTIFIES TO ABN AMRO BANK N.V., HOUSTON
     AGENCY ("BANK"), WITH REFERENCE TO IRREVOCABLE NON-TRANSFERABLE
     STANDBY LETTER OF CREDIT NO.           ISSUED BY ABN AMRO BANK N.V.,
     HOUSTON AGENCY IN FAVOR OF
             THAT                                      HAS FAILED TO PAY
     NUSCO IN ACCORDANCE WITH THE TERMS AND PROVISIONS OF THE 1995 POWER 
     PURCHASE AGREEMENT BETWEEN              AND           , AND THUS IS
     DRAWING UPON THE LETTER OF CREDIT IN AN AMOUNT EQUAL TO $__________"

IF PRESENTATION OF ANY DRAWING CERTIFICATE IS MADE ON A BUSINESS DAY AND
SUCH PRESENTATION IS MADE ON OR BEFORE 10:00 A.M. HOUSTON TIME, THE BANK
SHALL SATISFY SUCH DRAWING REQUEST ON THE SAME BUSINESS DAY.  IF THE
DRAWING CERTIFICATE IS RECEIVED AFTER 10:00 A.M. HOUSTON TIME, THE BANK
WILL SATISFY SUCH DRAWING REQUEST ON THE NEXT BUSINESS DAY.  FOR THE
PURPOSES OF THIS SECTION, A BUSINESS DAY MEANS A DAY, OTHER THAN A SATURDAY
OR SUNDAY, ON WHICH COMMERCIAL BANKS ARE NOT AUTHORIZED OR REQUIRED TO BE
CLOSED IN NEW YORK, NEW YORK.

DISBURSEMENTS SHALL BE IN ACCORDANCE WITH THE INSTRUCTIONS OF


THE FOLLOWING TERMS AND CONDITIONS APPLY:

     THIS LETTER OF CREDIT SHALL EXPIRE AT THE CLOSE OF BUSINESS JANUARY
     15, 1996.

     THE AMOUNT WHICH MAY BE DRAWN BY YOU UNDER THIS LETTER OF CREDIT SHALL
     BE AUTOMATICALLY REDUCED BY THE AMOUNT OF ANY DRAWINGS HEREUNDER.  ANY
     NUMBER OF PARTIAL DRAWINGS ARE PERMITTED FROM TIME TO TIME HEREUNDER.

     ALL COMMISSIONS AND CHARGES WILL BE BORNE BY

     THIS LETTER OF CREDIT IS NOT TRANSFERABLE OR ASSIGNABLE.

     THIS LETTER OF CREDIT DOES NOT INCORPORATE AND SHALL NOT BE DEEMED
     MODIFIED, AMENDED OR AMPLIFIED BY REFERENCE TO ANY DOCUMENT,
     INSTRUMENT OR AGREEMENT (A) THAT IS REFERRED TO HEREIN (EXCEPT FOR THE
     UCP, AS DEFINED BELOW) OR (B) IN WHICH THIS LETTER OF CREDIT IS
     REFERRED TO OR TO WHICH THIS LETTER OF CREDIT RELATES.

     THIS LETTER OF CREDIT SHALL BE GOVERNED BY THE UNIFORM CUSTOMS AND
     PRACTICE FOR DOCUMENTARY CREDITS, 1993 REVISION, INTERNATIONAL CHAMBER
     OF COMMERCE PUBLICATION NO. 500 (THE "UCP"), EXCEPT TO THE EXTENT THAT
     TERMS HEREOF ARE INCONSISTENT WITH THE PROVISIONS OF THE UCP,
     INCLUDING BUT NOT LIMITED TO ARTICLES 13(b) AND 17 OF THE UCP, IN
     WHICH CASE THE TERMS OF THE LETTER OF CREDIT SHALL GOVERN.

     THIS LETTER OF CREDIT MAY NOT BE AMENDED, CHANGED OR MODIFIED WITHOUT
     THE EXPRESS WRITTEN CONSENT OF NUSCO,                        AND ABN
     AMRO BANK N.V., HOUSTON AGENCY.

WE HEREBY ENGAGE WITH YOU THAT DOCUMENTS DRAWN UNDER AND IN COMPLIANCE WITH
THE TERMS OF THIS LETTER OF CREDIT SHALL BE DULY HONORED UPON PRESENTATION
AS SPECIFIED.

PRESENTATION OF ANY DRAWING CERTIFICATE UNDER THE STANDBY LETTER OF CREDIT
MAY BE SENT TO ABN AMRO BANK BY COURIER, CERTIFIED MAIL, REGISTERED MAIL,
TELEGRAM, TELEX TO THE ADDRESS SET FORTH BELOW, OR SUCH OTHER ADDRESS AS
MAY HEREAFTER BE FURNISHED BY ABN AMRO BANK.  OTHER NOTICES CONCERNING THIS
STANDBY LETTER OF CREDIT MAY BE SENT BY FACSIMILE OR SIMILAR COMMUNICATIONS
FACILITY TO ITS RESPECTIVE ADDRESS SET FORTH BELOW.  ALL SUCH NOTICES AND
COMMUNICATIONS SHALL BE EFFECTIVE WHEN ACTUALLY RECEIVED BY THE INTENDED
RECIPIENT PARTY.

IF TO THE BENEFICIARY OF THIS LETTER OF CREDIT:




IF TO THE ACCOUNT PARTY:




IF TO ABN AMRO BANK N.V., HOUSTON AGENCY:

     ABN AMRO BANK N.V.
     THREE RIVERWAY, SUITE 1700
     HOUSTON, TEXAS 77056
     ATTN: LETTERS OF CREDIT DEPARTMENT
     FAX: (713) 629-7533
     TELEX: 794538, 794505, OR 6868916


_____________________________           _____________________________
C.A. ISELT                              S.J. JEBAMONY
TRADE SERVICES MANAGER                  TRADE SERVICES MANAGER