Mr. R. Lee Haney
5026 Kensington
San Diego, CA 92116
                                          September 2, 1994


Dear Mr. Haney:

I am pleased to present Orange and Rockland's offer of employment to you for
the position of Vice President - Chief Financial Officer effective October 1,
1994 or as soon as you are available.  The general details are as follows:

Position: Vice President - Chief Financial Officer reporting to the CEO

Base Salary: $195,000 per year

Incentive Compensation: Participation in the Orange and Rockland Utilities,
Inc. Incentive Compensation Program in 1994 and beyond at a level of 20% for
the annual program and 20% per year for the long term program.  For 1994,
participation will be prorated for the period you are employed at Orange
Rockland.

Vacation: Four weeks per year upon employment; five weeks after seven years.

Insurance: Eligibility for all insurance programs such as medical, dental,
vision and prescription drugs, and any other benefits afforded to management
employees per plan provisions.  Eligibility will begin on the first of the
month after hire.

Sick Leave: Per Company policy, with immediate participation of five days for 
1994 and 10 days for 1995 recognizing industry standards and taking into
account your seniority and experience as of date of hire.

Severance: Participation in the Company's Severance Policy with the exception
that upon termination by the Company for its convenience other than for cause,
the benefit level will be set at the maximum of 52 weeks.

Management Savings Plan: Eligible for participation after one calendar year of
employment, per plan provisions.

Supplemental Executive Retirement Plan: Eligible for immediate vesting in the
plan and a benefit formula based on the granting of two years of service for
each of the first five years of actual service.  For example, after five years
of service, the benefit formula will be calculated as if you had achieved ten
years.  Regular plan provisions will take effect in the sixth year at which
time a portion of incentive compensation will be included in the calculation
of the retirement benefit.

Employees' Retirement Plan of Orange and Rockland Utilities, Inc.: Eligible
for participation per plan provisions. 


Mr. R. Lee Haney
September 2, 1994
Page 2





Relocation Allowance: The reasonable costs of relocating you and your family
to the Orange and Rockland service territory from San Diego, California. This
will include the following:

      (a) Reasonable costs for you and your family for relocation trips.
      
      (b) Reasonable moving and necessary storage of household goods and 
          temporary housing for you and your family.

      (c) Reasonable selling costs for sale of San Diego home including real  
          estate broker fees and other fees, swing loan interest expense for   
          six months, if necessary, and points and fees for loan on home       
          purchase in the area, as necessary.
      
      (d) Reasonable costs for the possible shipment of up to two vehicles, if
          necessary.
      
      (e) Temporary use of rental and pool vehicle(s) until the arrival of  
          personal vehicle(s).

      (f) Payment of reasonable receipted miscellaneous relocation expenses,  
          as necessary.

Tax Gross-Up: Gross up for taxes on all Relocation Allowances set forth above.

Indemnification: Per Company policy.

D&O Insurance: Per Company policy.

          
Lee, on behalf of the entire Board and management team - Welcome!  I'm
especially glad that you are joining O&R and I look forward to working with
you in the near future.

                                  Sincerely,



                                  D.L. Peoples
                                  Vice Chairman and 
                                  Chief Executive Officer

Agreed:_R. Lee Haney___

Date:__9-4-94__________