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                                                                    EXHIBIT 4.21


                     1994 HOUSTON INDUSTRIES INCORPORATED
                     LONG-TERM INCENTIVE COMPENSATION PLAN

                                First Amendment
                                ---------------

        Houston Industries Incorporated, a Texas corporation (the "Company"), 
having established the 1994 Houston Industries Incorporated Long-Term Incentive 
Compensation Plan, effective January 1, 1994 (the "Plan"), and having reserved 
the right under Section 12.1 thereof to amend the Plan, does hereby amend the 
Plan, as follows:

        1. Section 2.1(c) of the Plan is hereby amended in its entirety to read
as follows:

        "(c) 'Committee' means the Compensation Committee or such other
     committee appointed by the Board to administer this Plan pursuant to
     Article XI."

        2.   The first two sentences of Section 3.2 of the Plan are hereby 
amended to read as follows:

        "The aggregate number of shares of Common Stock which may be issued 
     under this Plan shall not exceed Eight Million (8,000,000) shares, subject
     to adjustment as hereinafter provided. All or any part of such Eight
     Million shares may be issued pursuant to Stock Awards."

        3.   Section 3.2 of the Plan is hereby amended by adding the following 
paragraph to the end thereof:

        "Notwithstanding anything herein to the contrary, no Key Employee may 
     be granted, during any calendar year, (i) Options (including Stock
     Appreciation Rights) covering, in the aggregate, more than 50,000 shares of
     Common Stock authorized under the Plan or (ii) Restricted Stock Awards
     (including 'opportunity shares') covering, in the aggregate, more than
     50,000 shares of Common Stock authorized under the Plan, in each case
     subject to adjustment in the same manner provided in Section 13.3."


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        4.   The last sentence of Section 5.1(a) of the Plan is hereby amended 
to read as follows:

        "Restricted Stock Awards and the allocation of 'opportunity shares' 
     related to such Restricted Stock Awards shall be made not later than 90
     days following the commencement of a Performance Cycle; provided, however,
     the Committee shall retain discretion to name as a Key Employee to whom a
     Stock Incentive shall be granted an Employee hired or promoted after the
     commencement of the Performance Cycle."

        5.   Section 5.2 of the Plan is hereby amended in its entirety to read 
as follows:

             "5.2 Performance Objectives: Each Restricted Stock Award shall be
     subject to the achievement of Performance Objectives by the Company during
     the Performance Cycle with respect to which the Restricted Stock Award is
     made. The Committee shall specify in writing the Performance Objectives
     which are to apply for that Performance Cycle prior to the earlier of (i)
     90 days after the commencement of the Performance Cycle or (ii) the elapse
     of 25% of the Performance Cycle, and in any event, while the outcome is
     substantially uncertain. Performance Objectives may vary among Key
     Employees and from Performance Cycle to Performance Cycle; provided,
     however, that the Performance Objectives established in connection with a
     Restricted Stock Award made after May 9, 1997, shall be based upon targets
     established by the Committee with respect to one or more of the following
     financial factors; earnings per share growth, total return ranking among
     S&P 500 Electric Utilities Panel, and cash return on capitalization ranking
     among S&P 500 Electric Utilities Panel. The degree to which the Company
     achieves such Performance Objectives shall serve as the basis for the
     Committee's determination of the portion of a Key Employee's Restricted
     Stock Award which shall become vested by reason of the lapse of the
     restrictions set forth in Article VI and the number of 'opportunity
     shares,' if any, which shall be awarded.

             The Committee will certify in writing, prior to payment of the
     Restricted Stock Awards, that the applicable Performance Objectives and any
     other material terms were satisfied. The Committee in its sole discretion
     may decrease a Restricted Stock Award, but in no event shall the Committee
     have discretion to increase a Restricted Stock Award in a manner such that
     the exception for qualified performance-based compensation under Code
     Section 162(m). In interpreting Plan provisions applicable to Performance
     Objectives and Restricted Stock Awards, it is the intent of the Plan to
     conform with the standards of Code Section 162(m) applicable to qualified
     performance-based compensation, and the Committee in establishing such
     goals and interpreting the Plan shall be guided by such provisions."

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        6. The first sentence of Section 11.1 of the Plan is hereby amended to 
read as follows and the second sentence of such Section is deleted:

        "This Plan shall be administered solely by the Compensation Committee of
    the Board of Directors or such other committee of the Board as the Board
    shall designate to administer the Plan."

        IN WITNESS WHEREOF, the Company has caused these presents to be executed
by its duly authorized officers, the 5th day of June, 1997, but effective as of 
May 9, 1997.

                                     HOUSTON INDUSTRIES INCORPORATED


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

ATTEST:

/s/ RICHARD B. DAUPHIN
-------------------------------
Richard B. Dauphin
Assistant Corporate Secretary


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