EXECUTIVE LONG-TERM INCENTIVE
                                COMPENSATION PLAN

                  COMMUNITY ENERGY ALTERNATIVES INCORPORATED

                                 January 1, 1994


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                                TABLE OF CONTENTS
                                                                        Page No.

1.    Purposes....................................................         1

2.    Definitions.................................................         1

3.    Eligibility.................................................         3

4.    Administration..............................................         4

5.    Determination of Award Year.................................         4

6.    Determination of Target Incentive Award.....................         5

7.    Determination of Performance Objectives.....................         5

8.    Determination of Achievement of Performance Objectives......         6

9.    Determination of Final Incentive Awards.....................         6

10.   Deferral of Final Incentive Award...........................         7

11.   Election to Defer Award.....................................         7

12.   Hardship Distribution.......................................         9

13.   Participant Deferral Accounts...............................         9

14.   Termination.................................................         11

15.   Assignment..................................................         12

16.   Plan Does Not Constitute an Employment Agreement............         12

17.   Amendment or Termination of the Plan by the Company.........         12

18.   What Constitutes Notice.....................................         13

19.   Advance Disclaimer of Any Waiver............................         13

20.   Effect on Invalidity of Any Part of the Plan................         14

21.   Plan Binding on Any Successor Owner.........................         14

22.   Laws Governing This Plan....................................         14

23.   Miscellaneous...............................................         14

24.   Withholding.................................................         14

25.   Effective Date..............................................         15


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                  COMMUNITY ENERGY ALTERNATIVES INCORPORATED

                          EXECUTIVE LONG-TERM INCENTIVE
                                COMPENSATION PLAN

                                 January 1, 1994

1.    Purposes
            The  purposes  of  this  Plan  are  to  foster  attainment  of the
long-term  financial  and  operating  objectives  of the Company by  providing
incentive to members of the senior  management  of this Company tied  strictly
to the achievement of those long-term objectives;  to supplement the Company's
salary and benefit  programs so as to provide  overall  compensation  for such
executives which is competitive with  corporations with which the Company must
compete for  executive  talent;  and to assist the Company in  attracting  and
retaining  executives who can materially influence its long-term financial and
operating results.
2.    Definitions
            As used in this Plan, the following words and phrases shall have the
following meanings unless the context clearly requires otherwise:
            (a)   "Account" - an Account established  pursuant to Paragraph 13
      of this Plan.
            (b)  "Award  Cycle" - a period of three  consecutive  Plan  Years as
      designated by the Committee.
            (c) "Award Year" - a Plan Year with respect to which Final Incentive
      Awards to Participants in the Plan are approved by the Committee.
            (d)  "Base   Salary"  -  a  sum  equal  to  the  annual  rate  of  a
      Participant's base compensation as of the first day of any Award Cycle.
            (e)  "Committee"  - the  Compensation  Committee  of  the  Board  of
      Directors of the Company.
            (f)   "Company" - Community Energy Alternatives Incorporated.


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            (g)  "Disability" - any physical or mental condition which renders a
      Participant  incapable of performing further work for the Company and that
      results in termination of such Participant's employment.
            (h) "Distribution Date" - a date for distribution established by the
      Committee pursuant to Paragraph 10(b) of this Plan.
            (i) "Enterprise" - Public Service Enterprise Group Incorporated, the
      ultimate  parent  corporation of the controlled  group of  corporations of
      which the Company is a member.
            (j) "Enterprise Common Stock" - the Common Stock, without par value,
      of Enterprise.
            (k) "Final Incentive Award" - the amount awarded to a Participant in
      accordance with Paragraph 9 of this Plan.
            (l)  "Participant"  -  such  employees  of  the  Company  as  may be
      designated by the Committee to participate in this Plan.
            (m)  "Plan"  -  this  Community  Energy  Alternatives   Incorporated
      Executive Long-Term Incentive Compensation Plan.
            (n) "Plan Year" - the calendar year.
            (o) "Retirement" - termination of employment with the Company (i) at
      or  after  the  age  of 62  or  (ii)  under  circumstances  entitling  the
      Participant to an immediately


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      payable  retirement  benefit under the Public  Service  Electric and Gas
      Company Pension Plan.
            (p)  "Subsidiary"  - a corporation at least 80% of the voting shares
      of which are owned by this Company.
            (q)   "Target  Incentive  Award"  - the  amount  determined  under
      Paragraph 6 of this Plan.
3.    Eligibility
            (a)  The Committee may select such employees of the Company and its
subsidiaries  (individually  or by position) for  participation in the Plan upon
such terms as it deems appropriate,  due to the employee's  responsibilities and
opportunity  to  contribute  substantially  to the  attainment  of the long-term
financial and operating  objectives of the Company. A determination with respect
to participation  for any particular Award Cycle shall be made no later than the
beginning of the Award  Cycle,  except that  designation  of  Participants  with
respect to the first  Award Cycle  following  adoption of the Plan shall be made
within 30 days of the initial  adoption of this Plan and  selection of new hires
for participation shall be made within 30 days of hire.  Further,  the Committee
may adjust a Final  Incentive Award of any Participant if the Committee deems it
appropriate  to so do reflect a change which may have  occurred  during an Award
Cycle in such Participant's position or responsibilities.
            (b)  Participation  in the Plan in one Plan  Year or Award  Cycle
shall not guarantee  participation  in any other Plan Year or Award Cycle. The
Committee  shall  have  sole  discretion  with  respect  to the  selection  of
Participants  or whether to  suspend  operation  of the Plan for any period of
time.
4.    Administration
            (a)  The Plan shall be  administered  by the Committee.  Subject to
the provisions of the Plan, the Committee shall have full and final authority to
select   Participants,   to  designate  the  Target  Incentive  Award  for  each
Participant,  to  determine  Performance  Objectives  for  an  Award  Cycle,  to
determine the amount of all Final Incentive Awards and to determine  whether any
such awards shall be paid in cash or in shares of Enterprise  Common Stock.  The
Committee shall also have, subject to the provisions of the Plan, full and final
authority to interpret the Plan, to establish and revise rules,  regulations and
guides   relating  to  the  Plan,  to  entertain   appeals  of  Participants  or
beneficiaries  regarding  alleged adverse  determinations  under the Plan and to
make any other  determinations  that it believes  necessary or advisable for the
administration of the Plan.
            (b)  All decisions and  determinations  by the Committee shall be
final and binding  upon all  parties,  including  shareholders,  Participants,
beneficiaries and other employees.
5.    Determination of Award Year
            Not later  than 120 days after the close of each  Award  Cycle,  the
Committee shall, in its sole discretion, determine whether any Participant shall
be granted a Final Incentive Award  Performance  Unit with respect to such Award
Cycle.


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6.    Determination of Target Incentive Award
            Prior to each Award Cycle,  or in the case of the first Award Cycle,
within 30 days after the  initial  adoption  of the Plan and, in the case of new
hires  selected  for  participation,  within 30 days from the date of hire,  the
Committee shall approve a Target Incentive Award for each Participant based upon
the Participant's  position and potential to contribute to the attainment of the
Company's  long-term  financial and operating  objectives.  The Target Incentive
Award shall be expressed as a whole dollar  amount equal to a percentage  of the
Participant's Base Salary. 
7. Determination of Performance Objectives
            (a)   Concurrent  with the approval of Target  Incentive  Awards for
Participants,  the Committee  shall  establish  Performance  Objectives  for the
Company for the related Award Cycle. The Company's actual  performance during an
Award Cycle will be compared to these Performance  Objectives in determining the
amount,  if any,  of  each  Participant's  Final  Incentive  Award.  Performance
Objectives  shall be measurable  criteria  regarding  the  Company's  quality of
earnings, earnings growth, capacity growth and/or such other indicators selected
by the  Committee to reflect the  Company's  business plan for the related Award
Cycle.
            (b)   At the time that it approves  Performance  Objectives for an
Award  Cycle,  the  Committee  shall  assign to each a  relative  weight to be
afforded the  accomplishment of such Performance  Objective in calculating the
Final Incentive Award of each Participant.
8.    Determination of Achievement of Performance Objectives
            Within 90 days of the end of each Award Cycle,  the Committee  shall
certify  the extent to which the Company has  achieved  the several  Performance
Objectives which have been established for such Award Cycle. Certification shall
be by resolution of the Committee,  which  resolution shall state the percentage
of achievement of each respective  Performance  Objective.  The determination of
such  achievement  shall be by  reference  to the  Company's  audited  financial
statements.
9. Determination of Final Incentive Awards
            To  determine  each  Participant's  Final  Incentive  Awards,  the
Participant's  Target  Incentive  Award shall be  multiplied  by an applicable
percentage   based  upon  the  Committee's   certification  of  the  Company's
achievement  of its  Performance  Objectives  for  the  Award  Cycle  and  the
following chart:

================================================================================
            Weighted Average                    Final Incentive Award* as
             Achievement of                        a Percent of Target
         Performance Objectives                      Incentive Award
--------------------------------------------------------------------------------
                 > 150%                                    200%
                 -
--------------------------------------------------------------------------------
                   125%                                    150%
--------------------------------------------------------------------------------
                   100%                                    100%
--------------------------------------------------------------------------------
                   75%                                     50%
--------------------------------------------------------------------------------
                 < 50%                                      0%
                 -
--------------------------------------------------------------------------------

      *Awards for weighted  average  achievement  of  Performance  Objectives at
levels above 50% and below 150%, but not shown above, are to be interpolated.

================================================================================
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10.   Payment of Final Incentive Award
            Unless the  Participant  has elected,  pursuant to Paragraph  11, to
defer receipt of his/her Final Incentive  Award,  payment of such award shall be
made within 30 days of the date that the  Committee  approves the amount of such
award. The Committee shall determine,  in its sole discretion,  whether any such
payment shall be paid in cash by check or in shares of Enterprise  Common Stock.
If the payment shall be made in shares of Enterprise Common Stock, the number of
shares to be distributed shall be determined by dividing the amount of the Final
Incentive  Award  (less any  withholding  required by law) by the average of the
high  and low sale  prices  of  Enterprise  Common  Stock on the New York  Stock
Exchange on the date of distribution.
11. Election to Defer Award
            (a) A  Participant  may elect to defer receipt of all or any portion
of a Final  Incentive  Award  for an Award  Cycle by so  electing  to make  such
deferral  prior to the beginning of such Award Cycle.  For the Award Cycle which
includes the calendar year that the Plan is adopted,  each Participant may elect
to defer any portion of his or her Final  Incentive  Award for that Award Cycle,
but only if such  election is made within 30 days after the initial  adoption of
the Plan.  Further, an employee who becomes a Participant after the commencement
of an Award  Cycle  must make any  election  to defer any  portion of his or her
Final  Incentive  Award for such Award Cycle within 30 days of first  becoming a
Participant in the Plan. An election to defer the  distribution of any part of a
Participant's  Final  Incentive  Award with  respect to an Award  Cycle shall be
irrevocable after the commencement of such Award Cycle,  except in the case of a
hardship distribution under Paragraph 12.

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            (b)   If a Participant  elects a deferral  under this  Paragraph 11,
the Participant  shall also elect to have the related  distribution  from his or
her  Account  commence  either  (1)  within  30  days  after  the  date  of  the
Participant's termination of employment with the Company or, in the alternative,
(2) in the month of  January of any  calendar  year  following  the Plan Year in
which the amount so deferred is determined as elected by the Participant, but in
no event later than the later of (a) the January of the year  following the year
of the  Participant's  70th  birthday,  or (b) the January of the year following
termination  of  employment.  Any  such  election  to defer  receipt  of a Final
Incentive  Award with respect to an Award Cycle shall be  irrevocable  after the
commencement of such Award Cycle, except in the case of a hardship  distribution
under Paragraph 12.
            (c)   If a Participant  elects a deferral  under this  Paragraph 11,
the Participant  shall also elect to receive the related  distribution  from his
Account in the form of (1) one  lump-sum  payment,  or (2) annual  distributions
over a period of years up to 10 years. Any such election regarding  distribution
with respect to an Award Cycle shall be irrevocable  after the  commencement  of
such Award Cycle, except in the case of a hardship  distribution under Paragraph
12.
            (d)   Except  as provided in Paragraph  11(c) hereof,  at the end of
the deferral period, the appropriate  amount in the Participant's  Account shall
be distributed as a lump sum.
            (e)   All deferral  elections shall comply with such further rules
and procedures as may be established by the Committee.

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12.   Hardship Distribution
            A Participant  or legal  representative  may request a change in the
timing of a distribution  which has been deferred under Paragraph 11 by filing a
written  request  therefor with the  Committee.  The Committee  may, in its sole
discretion,  grant  such  request  only  if the  Committee  determines  that  an
emergency beyond the control of the Participant exists and which would cause the
Participant  severe  financial  hardship if the payment of such amounts were not
approved.  Any such  distribution  for  hardship  shall be limited to the amount
needed to meet such emergency. Any distribution under this Paragraph 12 shall be
in a lump sum and shall be made within 30 days after the  Committee  grants such
request for hardship distribution.
13. Participant Deferral Accounts
            Where the  Participant  has  elected  to defer  all or a portion  of
his/her Final Incentive Award, in lieu of distribution thereof:
            (a)   There shall be established an Account for each Participant for
each Award Year which  shall be  credited  with the amount of the  Participant's
Final Incentive  Award.  The Plan shall be unfunded.  It is the intention of the
Company that the Plan be unfunded for the purposes of the Internal  Revenue Code
of 1986, as amended, and the Employee Retirement Income Security Act of 1974, as
amended.  The Company shall not be required to segregate any amounts credited to
any Participant's  Account,  which shall be established  merely as an accounting
convenience.  Title to and  beneficial  ownership  of any amounts  credited to a
Participant's  Account  shall  at  all  times  remain  in  the  Company,  and no
Participant  or beneficiary  shall have any interest  whatsoever in any specific
assets of the Company.  All amounts credited to  Participant's  Account shall at
all times remain solely the property of the Company subject to the claims of its
general  creditors and  available  for the  Company's  use for whatever  purpose
desired.
            (b) The amount credited to a Participant's Account shall be treated
for valuation purposes as if it had been used to  purchase  shares of Enterprise
Common Stock on the date it is credited to the Participant's  Account at a price
equal to the average of the high and low sale prices of Enterprise  Common Stock
on the New York  Stock  Exchange  on such  date.  For the  purpose  of valuing a
Participant's  Account,  the  equivalent  shares so credited to a  Participant's
Account shall be treated as if they were to accrue dividends at the same rate as
actual shares of such Enterprise  Common Stock,  and such  equivalent  dividends
were used to purchase additional shares of such Common Stock at a price equal to
the average of the high and low sale prices of such  Enterprise  Common Stock on
the New York Stock Exchange on the dividend payment date.
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            (c)   When  a  distribution   or  partial   distribution   from  a
Participant's  Account is to be made, such distribution  shall be in money, by
check.  The  amount  distributed  shall be equal to the  equivalent  number of
shares  otherwise  distributable  times the  average  of the high and low sale
prices of Enterprise  Common Stock on the New York Stock  Exchange on the date
of distribution.
14.   Termination
            (a) If the  employment of a Participant by the Company is terminated
on account of the  Participant's  death,  Disability  or  Retirement  after such
Participant  shall  have  completed  at least  one year of an Award  Cycle,  the
Committee shall, if it determines that a Final Incentive Award may be earned for
any such Award Cycle(s) which include the Plan Year of termination,  prorate the
Final  Incentive  Award(s)  for that  part of such  Award  Cycles  in which  the
Participant was  participating  prior to such  termination and the Company shall
pay  the  prorated  Final   Incentive   Award  as  soon  as  practicable   after
determination, unless otherwise determined by the Committee.
            (b)   If the  employment  of a  Participant  is  terminated  for any
reason other than death,  Disability or Retirement,  the  Participant  shall not
receive  any  Final  Incentive  Award  for that  part of any  uncompleted  Award
Cycle(s) in which the Participant was participating at the time of termination.
            (c)   If a Participant  becomes a Participant during an Award Cycle,
any Final  Incentive Award to the Participant  shall be  appropriately  prorated
from the time the Participant entered the Plan to the end of the Award Cycle.
            (d)   In the case of a Participant's  death, payment of the entire
value  of the  Participant's  Account  under  the  Plan  shall  be made to the
Participant's  Estate.  Such  payment  shall  be made as a lump sum as soon as
practicable after the Participant's death.
15.   Assignment
            No  benefit  under the Plan  shall in any manner or to any extent be
assigned,  alienated or transferred by any Participant under the Plan or subject
to attachment, garnishment or other legal process.

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16.   Plan Does Not Constitute an Employment Agreement
            This  Plan  shall  not  constitute  a  contract  for  the  continued
employment of any Participant by the Company.  The Company reserves the right to
modify a  Participant's  compensation  at any  time and from  time to time as it
considers  appropriate  and to terminate any  Participant's  employment  for any
reason at any time  notwithstanding  this Plan.
17.  Amendment or Termination of the Plan by the Company
            The Board of Directors  of the Company may, in its sole  discretion,
amend,  modify or terminate this Plan at any time,  provided,  however,  that no
such amendment,  modification or termination  shall materially  adversely affect
the right of a  Participant  in respect of a previously  earned Final  Incentive
Award  which has not been  paid,  unless  such  Participant  or his or her legal
representative  shall consent to such change.  If this Plan is terminated during
any Award Cycle in which  Participants  have been selected to  participate,  the
Board of Directors may authorize the Committee to prorate and make provision for
payment of Final Incentive Awards for such a period.
18. What Constitutes Notice
            Any  notice to a  Participant  or legal  representative  hereunder
shall be given  either by  delivering  it, or by  depositing  it in the United
States mail, postage prepaid,  addressed to such person's  last-known address.
Any notice to the Company or the Committee  hereunder shall be given either by
delivering  it, or depositing it in the United States Mail,  postage  prepaid,
to the Secretary,  Community Energy Alternatives Incorporated,  80 Park Plaza,
T4B, P. O. Box 1171, Newark, New Jersey 07101.
19.   Advance Disclaimer of Any Waiver
            Failure  by the  Company  or the  Committee  to insist  upon  strict
compliance  with any of the terms,  covenants or conditions  hereof shall not be
deemed a waiver of any such term, covenant or condition, nor shall any waiver or
relinquishment  of any  right or  power  hereunder  at any one or more  times be
deemed a waiver or  relinquishment  of any such right or power at any other time
or times.
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20.   Effect on Invalidity of Any Part of the Plan
            The invalidity or  unenforceability  of any provision hereof shall
in no way affect the validity or enforceability of any other provision.
21.   Plan Binding on Any Successor Owner
            Except as otherwise provided herein,  this Plan shall inure to the
benefit  of and be binding  upon the  Company,  its  successors  and  assigns,
including  but  not  limited  to any  corporation  which  may  acquire  all or
substantially  all of the Company's  assets and business or with or into which
the Company may be consolidated or merged.
22.   Laws Governing This Plan
            Except to the  extent  federal  law  applies,  this Plan  shall be
governed by the laws of the State of New Jersey.
23.   Miscellaneous
            The masculine  pronoun shall also mean the feminine and vice versa
wherever appropriate.
24.   Withholding
            The Company shall have the right to deduct from any payment any sums
required  to be  withheld  by  federal,  state,  or local  tax law.  There is no
obligation  hereunder that any Participant or other person be advised in advance
of the existence of the tax or the amount so required to be withheld.

25.   Effective Date
            This Plan shall be effective as of January 1, 1994.  Notwithstanding
anything to the contrary contained herein, no distributions  shall be made under
the Plan prior to April 1, 1997.