Exhibit 4-10



                         PAYMENT AND GUARANTEE AGREEMENT


          THIS PAYMENT AND GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as
of December 19, 1995, is executed and delivered by PECO Energy Company, a
Pennsylvania corporation (the "Guarantor"), for the benefit of the Holders (as
defined below) of the Series B Preferred Securities (as defined below) of PECO
Energy Capital, L.P., a Delaware limited partnership ("PECO Energy Capital"),
the general partner of which is PECO Energy Capital Corp. (the "General
Partner"), a Delaware corporation and a wholly owned subsidiary of the
Guarantor.

          WHEREAS, PECO Energy Capital is issuing on the date hereof $78,104,575
aggregate stated liquidation preference of limited partner interests of a series
designated the 8.72% Cumulative Monthly Income Preferred Securities, Series B
(the "Series B Preferred Securities"), and the Guarantor desires to enter into
this Guarantee Agreement for the benefit of the Holders, as provided herein;

          WHEREAS, the Guarantor will issue Series B Subordinated Debentures (as
defined below) in accordance with the Indenture (as defined below) to PECO
Energy Capital in an amount equal to the aggregate stated liquidation preference
of the Series B Preferred Securities and the capital contribution of the General
Partner to PECO Energy Capital (the "G.P. Capital Contribution"); and

          WHEREAS, the Guarantor desires to irrevocably and unconditionally
agree to the extent set forth herein to pay to the Holders the Guarantee
Payments (as defined below) and to make certain other undertakings on the terms
and conditions set forth herein.

          NOW, THEREFORE, in consideration of the premises and other
consideration, receipt of which is hereby acknowledged, the Guarantor, intending
to be legally bound hereby, agrees as follows:

                                    ARTICLE I

          As used in this Guarantee Agreement, each term set forth below, unless
the context otherwise requires, shall have the following meaning. Each
capitalized term used but not otherwise defined herein shall have the meaning
assigned to such term in the Amended and Restated Limited Partnership Agreement
of PECO Energy Capital dated as of July 25, 1994 (as amended from time to time,
the "Limited Partnership Agreement").


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          "Guarantee Payments" shall mean the following payments, without
duplication, to the extent not paid by PECO Energy Capital: (i) any accumulated
and unpaid monthly distributions on the Series B Preferred Securities out of
moneys legally available therefor held by PECO Energy Capital, (ii) the
Redemption Price (as defined below) payable with respect to any Series B
Preferred Securities called for redemption by PECO Energy Capital out of moneys
legally available therefor held by PECO Energy Capital, (iii) upon liquidation
of PECO Energy Capital, the lesser of (a) the Liquidation Distribution (as
defined below) and (b) the amount of assets of PECO Energy Capital available for
distribution to the Holders in liquidation of PECO Energy Capital and (iv) a
cash distribution at the rate of 7.96% per annum of the stated liquidation
preference of $25 per Series B Preferred Security accumulating from November 1,
1995 through but not including December 19, 1995.

          "Holders" shall mean the persons or entities in whose name any Series
B Preferred Securities are registered on the registration books maintained by
PECO Energy Capital; provided, however, that in determining whether the Holders
of the requisite percentage of Series B Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any entity owned more than 50% by the Guarantor, either directly or
indirectly.

          "Indenture" shall mean the Indenture, dated as of July 1, 1994 (the
"Original Indenture"), as supplemented by the Supplemental Indenture, between
the Guarantor and Meridian Trust Company, pursuant to which the Guarantor has
issued and will issue its Deferrable Interest Subordinated Debentures in series.

          "Liquidation Distribution" shall mean the aggregate of the stated
liquidation preference of $25 per Series B Preferred Security and all
accumulated and unpaid distributions to the date of payment.

          "Preferred Trust Receipts" shall mean the trust receipts issued by the
Trust each representing a Series B Preferred Security.

          "Redemption Price" shall mean the aggregate of $25 per Series B
Preferred Security and all accumulated and unpaid distributions to the date
fixed for redemption.

          "Special Representative" shall mean any representative of the Holders
appointed pursuant to Section 13.02(d) of the Limited Partnership Agreement.

          "Supplemental Indenture" shall mean the First Supplemental Indenture,
dated as of December 19, 1995, between

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the Guarantor and Meridian Trust Company, pursuant to which the Guarantor has
issued its 8.72% Deferrable Interest Subordinated Debentures, Series B (the
"Series B Subordinated Debentures") in an amount equal to the aggregate stated
liquidation preference of the Series B Preferred Securities and the G.P. Capital
Contribution.

          "Trust" shall mean PECO Energy Capital Trust I, a Delaware business
trust.

          "Trust Agreement" shall mean the Amended and Restated Trust Agreement
of PECO Energy Capital Trust I, as amended from time to time, among PECO Energy
Capital, L.P., as Grantor and PNC Bank, Delaware, as Trustee, dated as of
December 19, 1995.

          "Trustee" shall mean PNC Bank, Delaware or a successor trustee under
the Trust Agreement.


                                   ARTICLE II

          SECTION 2.01. The Guarantor hereby irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments, as and when due
(except to the extent paid by PECO Energy Capital), to the fullest extent
permitted by law, regardless of any defense, right of set-off or counterclaim
which the Guarantor may have or assert against PECO Energy Capital, the General
Partner, the Trust or the Trustee. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment by the Guarantor to the
Holders or by payment of such amounts by PECO Energy Capital to the Holders.
Notwithstanding anything to the contrary herein, the Guarantor retains all of
its rights under Section 4.01(b) of the Indenture to extend the interest payment
period on the Series B Subordinated Debentures and the Guarantor shall not be
obligated hereunder to pay during an Extension Period any monthly distributions
on the Series B Preferred Securities which are not paid by PECO Energy Capital
during such Extension Period.

          SECTION 2.02. The Guarantor hereby waives notice of acceptance of this
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.

          SECTION 2.03. Except as otherwise set forth herein, the obligations,
covenants, agreements and duties of the Guarantor under this Guarantee Agreement
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:


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               (a) the release or waiver, by operation of law or otherwise, of
the performance or observance by PECO Energy Capital of any express or implied
agreement, covenant, term or condition relating to the Series B Preferred
Securities to be performed or observed by PECO Energy Capital;

               (b) the extension of time for the payment by PECO Energy Capital
of all or any portion of the distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Series B Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Series B Preferred Securities;

               (c) any failure, omission, delay or lack of diligence on the part
of the Holders or the Special Representative to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Holders or the Special
Representative pursuant to the terms of the Series B Preferred Securities, or
any action on the part of PECO Energy Capital granting indulgence or extension
of any kind;

               (d) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, PECO Energy Capital or any of the assets of PECO
Energy Capital;

               (e) any invalidity of, or defect or deficiency in, any of the
Series B Preferred Securities; or

               (f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred.

There shall be no obligation to the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the occurrence of any of the
foregoing.

          SECTION 2.04. The Guarantor expressly acknowledges that (i) this
Guarantee Agreement will be deposited with the General Partner to be held for
the benefit of the Holders; (ii) in the event of the appointment of a Special
Representative, the Special Representative may enforce this Guarantee Agreement
for such purpose; (iii) if no Special Representative has been appointed, the
General Partner has the right to enforce this Guarantee Agreement on behalf of
the Holders; (iv) the holders of Preferred Trust Receipts, together with the
holders of the Series B Preferred Securities other than the Trust, representing
not less than 10% in aggregate stated liquidation preference of the Series B
Preferred Securities have the right to direct the time,

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method and place of conducting any proceeding for any remedy available in
respect of this Guarantee Agreement including the giving of directions to the
General Partner or the Special Representative as the case may be; and (v) if the
General Partner or the Special Representative fails to enforce this Guarantee
Agreement as above provided, any holder of Preferred Trust Receipts representing
Series B Preferred Securities may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against PECO Energy Capital or any other
person or entity.

          SECTION 2.05. This is a guarantee of payment and not of collection.
The General Partner or Special Representative may enforce this Guarantee
Agreement directly against the Guarantor, and the Guarantor will waive any right
or remedy to require that any action be brought against PECO Energy Capital or
any other person or entity before proceeding against the Guarantor. The
Guarantor agrees that this Guarantee Agreement shall not be discharged except by
payment of the Guarantee Payments in full (to the extent not paid by PECO Energy
Capital) and by complete performance of all obligations of the Guarantor
contained in this Guarantee Agreement.

          SECTION 2.06. The Guarantor will be subrogated to all rights of the
Holders against PECO Energy Capital in respect of any amounts paid to the
Holders by the Guarantor under this Guarantee Agreement and shall have the right
to waive payment by PECO Energy Capital pursuant to Section 2.01; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of a payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts remain due and unpaid under this Guarantee Agreement.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to pay over such amount to the Holders.

          SECTION 2.07. The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of PECO Energy Capital with respect
to the Series B Preferred Securities and that the Guarantor shall be liable as
principal and sole debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (f), inclusive, of Section 2.03 hereof.

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                                   ARTICLE III

          SECTION 3.01. So long as any Series B Preferred Securities remain
outstanding, neither the Guarantor nor any majority-owned subsidiary of the
Guarantor shall declare or pay any dividend on, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock (other than
dividends by a wholly owned subsidiary) if at such time the Guarantor shall be
in default with respect to its payment or other obligations hereunder or there
shall have occurred any event that, with the giving of notice or the lapse of
time or both, would constitute an Event of Default under the Indenture. The
Guarantor shall take all actions necessary to ensure the compliance of its
subsidiaries with this Section 3.01.

          SECTION 3.02. So long as any Series B Preferred Securities are
outstanding, the Guarantor agrees to maintain its corporate existence; provided
that the Guarantor may consolidate with or merge with or into, or sell, convey,
transfer or lease all or substantially all of its assets (either in one
transaction or a series of transactions) to, any person, corporation,
partnership, limited liability company, joint venture association, joint stock
company, trust or unincorporated association if such entity formed by or
surviving such consolidation or merger or to which such sale, conveyance,
transfer or lease shall have been made, if other than the Guarantor, (i) is
organized and existing under the laws of the United States of America or any
state thereof or the District of Columbia, and (ii) shall expressly assume all
the obligations of the Guarantor under this Guarantee Agreement.

          SECTION 3.03. This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all general liabilities of the Guarantor.


                                   ARTICLE IV

          This Guarantee Agreement shall terminate and be of no further force
and effect upon full payment of the Redemption Price of all Series B Preferred
Securities or upon full payment of the amounts payable to the Holders upon
liquidation of PECO Energy Capital; provided, however, that this Guarantee
Agreement shall continue to be effective or shall be reinstated, as the case may
be, if at any time the Holders must restore payments of any sums paid under the
Series B Preferred Securities or under this Guarantee Agreement for any reason
whatsoever.


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<PAGE>

                                    ARTICLE V

          SECTION 5.01. All guarantees and agreements contained in this
Guarantee Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders.
Except as provided in Section 3.02, the Guarantor may not assign its obligations
hereunder without the prior approval of the Holders of not less than 662/3% of
the aggregate stated liquidation preference of all Series B Preferred Securities
then outstanding.

          SECTION 5.02. This Guarantee Agreement may only be amended by a
written instrument executed by the Guarantor; provided that, so long as any of
the Series B Preferred Securities remain outstanding, any amendment that
materially adversely affects the Holders, any termination of this Guarantee
Agreement and any waiver of compliance with any covenant hereunder shall be
effected only with the prior approval of the holders of Preferred Trust Receipts
together with the holders of Series B Preferred Securities other than the Trust,
representing not less than 662/3% of the aggregate liquidation preference of all
Series B Preferred Securities then outstanding.

          SECTION 5.03. All notices, requests or other communications required
or permitted to be given hereunder to the Guarantor shall be deemed given if in
writing and delivered personally or by recognized overnight courier or express
mail service or by facsimile transmission (confirmed in writing) or by
registered or certified mail (return receipt requested), addressed to the
Guarantor at the following address (or at such other address as shall be
specified by like notice to the Holders):

                           PECO Energy Company
                           2301 Market Street
                           P.O. Box 8699
                           Philadelphia, Pennsylvania  19101

                           Facsimile No.: (215) 841-5743
                           Attention:  Treasurer

          All notices, requests or other communications required or permitted to
be given hereunder to the Holders shall be deemed given if in writing and
delivered by the Guarantor in the same manner as notices sent by PECO Energy
Capital to the Holders.

          SECTION 5.04. This Guarantee Agreement is solely for the benefit of
the Holders and is not separately transferable from the Series B Preferred
Securities.


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          SECTION 5.05. This Guarantee Agreement shall be governed by and
construed and interpreted in accordance with the laws of the Commonwealth of
Pennsylvania without giving effect to the conflict of law principles thereof.

          THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.

                                        PECO ENERGY COMPANY


                                        By:    /s/ J. Barry Mitchell
                                           -----------------------------
                                               J. Barry Mitchell
                                               Vice President - Finance



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