Exhibit 10.3







THIS AGREEMENT is made on 30th March, 1990

BETWEEN:-

(1)  THE PERSONS  whose names, registered  numbers and  registered or principal
     offices are set out in Part I of Schedule 1;

(2)  THE PERSONS  whose names, registered  numbers and  registered or principal
     offices are set out in Part II of Schedule 1;

(3)  ENERGY  SETTLEMENTS AND INFORMATION  SERVICES  LIMITED  (registered number
     2444282) whose registered  office is situate at Fairham House,  Green Lane,
     Clifton, Nottingham NG11 9LN as Settlement System Administrator;

(4)  ENERGY POOL FUNDS ADMINISTRATION  LIMITED (registered number 2444187) whose
     registered  office is  situate at 185 Park  Street,  London SE1 9DY as Pool
     Funds Administrator;

(5)  THE NATIONAL GRID COMPANY plc (registered  number 2366977) whose registered
     office is situate at National Grid House,  Kirby Corner Road,  Coventry CV4
     8JY
         as Grid Operator and Ancillary Services Provider;

(6)  SCOTTISH POWER plc  (registered  number 117120) whose  principal  office is
     situate  at 1 Atlantic  Quay,  Glasgow G2 8SP,  Scotland  as an  Externally
     Interconnected Party;

(7)  ELECTRICITE DE FRANCE,  SERVICE  NATIONAL whose principal office is situate
     at 3 Rue de Messine,  75008 Paris,  France as an Externally  Interconnected
     Party; and

(8)  THE OTHER  PARTIES  whose  names,  registered  numbers  and  registered  or
     principal offices are set out in Schedule 2.

WHEREAS:-

(A)      it is a Condition of the NGC Transmission Licence that, subject to its
         removal or resignation as Settlement System Administrator hereunder,
         NGC shall implement, maintain and operate a settlement system which
         will provide inter alia for the calculation of any payments which
         become due to or owing by Authorised Electricity Operators in respect
         of sales and purchases of electricity under the terms of this Agreement
         and such Licence further provides that NGC may comply with its said
         obligations by participation in this Agreement in the manner provided
         in such Licence;

(B)      it is a Condition of the Generation Licence granted to each of the
         Founder Generators in England and Wales requiring such a Licence that
         the licensee shall be a party to and a pool member under, and shall
         comply with the provisions of, this Agreement insofar as the same shall
         apply to it in its capacity as a party to this Agreement and/or as a
         pool member being a generator of electricity as the case may be;

(C)       it is a Condition of the PES  Licence  granted to each of the Founder
          Suppliers  whose names are set out in Part A of Part II of Schedule 1
          that the licensee  shall be a pool member  under,  and comply with the
          provisions of, this Agreement;

(D)      it is a Condition of the Second Tier Supply Licence granted to each of
         the Founder Suppliers whose names are set out in Part B of Part II of
         Schedule 1 that the licensee shall be a pool member under, and comply
         with the provisions of, this Agreement insofar as the same shall apply
         to it in its capacity as a private electricity supplier (as that
         expression is defined in section 17(1) of the Act);

(E)      this Agreement sets out, inter alia, the rules and procedures for the
         operation of an electricity trading pool and for the operation of a
         settlement system (including the calculation of payments due) and in
         compliance with the conditions of their respective Licences those
         parties subject to such conditions have agreed to become parties hereto
         with the intent that this Agreement shall be and shall remain approved
         by the Director;

(F)      in addition to the rules and procedures set out herein, payments to the
         Grid Operator connected with the Transmission Services Activity (as
         that term is defined in the Transmission Licence) are dealt with
         pursuant to specific arrangements between the Grid Operator and certain
         parties to this Agreement; and

(G)      in relation to this  Agreement  each of the Secretary of State and the
         Director enjoys the rights,  powers and authorities conferred upon him
         inter alia by the Act and the Licences.

NOW IT IS HEREBY AGREED as set out on the following pages of this Agreement.



<PAGE>


                                                                 PART I

                                                                PRELIMINARY

1.       DEFINITIONS AND INTERPRETATION

1.1       Definitions:  In this  Agreement  (including  the  Recitals  and  the
          Schedules), except where the context otherwise requires:-

         "Accession Agreement" means an accession agreement in or substantially
         in the form set out in Schedule 3 or in such other form (to which the
         Settlement System Administrator has no reasonable objection) as the
         Executive Committee may for the time being and from time to time
         approve;

        Accountable Interest" has the meaning given to that term in Schedule 20;

        "Accounting Date" means,  in relation to any  Accounting  Period,  the
        last day of such Accounting Period;

         "Accounting Period" means each successive period of 12 months beginning
         on 1st April in each year or of such other length and/or beginning on
         such other date as may be determined in accordance with the terms
         hereof, provided that the first such period shall begin on and include
         31st March, 1990 and shall end on and include 31st March, 1991;

         "Act" means the Electricity Act 1989;

         "Active Energy" means the electrical energy produced, flowing or
         supplied by an electric circuit during a time interval, and being the
         integral with respect to time of the instantaneous power, measured in
         units of watt-hours or standard multiples thereof, that is:-

                  1000Wh = 1kWh 1000kWh = 1MWh 1000MWh = 1GWh 1000GWh = 1TWh;

         "Active Power" means the product of voltage and the in-phase component
         of alternating current measured in units of watts and standard
         multiples thereof, that is:-

                  1000 Watts  = 1kW
                  1000kW       = 1MW
                  1000MW      = 1GW
                  1000GW       = 1TW;

         "Admission Application" means an application in or substantially in the
         form set out in Schedule 5 or in such other form as the Executive
         Committee may for the time being and from time to time approve;

         "Agreed Procedure" means each of the agreed procedures specified in the
         Agreed Procedures Index and which is agreed to be treated as an Agreed
         Procedure for the purposes of this Agreement either:-

         (a)      by the Executive Committee and the Settlement System
                  Administrator and (where the agreed procedure imposes
                  obligations on the Grid Operator) the Grid Operator; or

         (b)      where such agreed procedure concerns the duties and
                  responsibilities of the Pool Funds Administrator, by the
                  Executive Committee and the Pool Funds Administrator

         as the same

         (i)      may be amended or substituted from time to time by the
                  Executive Committee with the prior written consent of the
                  Settlement System Administrator and (where such Agreed
                  Procedure imposes obligations on the Grid Operator) the Grid
                  Operator (in each case, such consent not to be unreasonably
                  withheld or delayed); or

         (ii)     shall be amended or substituted from time to time by the
                  Executive Committee at the request of the Settlement System
                  Administrator and with the prior written consent of the
                  Executive Committee and (where such Agreed Procedure imposes
                  obligations on the Grid Operator) the Grid Operator (in each
                  case, such consent not to be unreasonably withheld or
                  delayed),

         Provided that the reference to the Grid Operator in this definition
         shall be construed as if it were a reference to such term prior to the
         creation of Meter Operator Parties and the associated amendments to
         this Agreement, but this shall be without limitation to any right to
         agree any adoption, amendment or substitution under this definition;

         "Agreed Procedures Index" means an index of agreed procedures agreed to
         be treated as Agreed Procedures in accordance with and for the purposes
         of this Agreement;

         "Agreement" means this Agreement (including the Schedules), as amended,
         varied, supplemented, modified or suspended from time to time in
         accordance with the terms hereof;

          "Allocated  Generating  Unit"  has the  meaning  given to that term in
           Clause 11.2.2(a);

          "Ancillary  Service"  means  a  System  Ancillary   Service  and/or  a
           Commercial Ancillary Service, as the case may be;

         "Ancillary Services Agreement" means an agreement between a User and
         the Ancillary Services Provider for the payment by the Ancillary
         Services Provider to that User in respect of the provision by such User
         of Ancillary Services;

          "Ancillary Services Business" means the business relating to Ancillary
           Services carried on by the Ancillary Services Provider;

         "Ancillary Services Provider" means the person who for the time being
         and from time to time is required by the terms of a Transmission
         Licence to contract for Ancillary Services;

         "Annual Conference" has the meaning given to that term in Clause 9.6.1;

         "Apparatus" means all equipment in which  electrical  conductors  are
          used or supported or of which they may form a part;

          "Approved Recommendation" has the meaning given to that term in Clause
           5.8;

         "ASP Accounting Procedure" means the accounting procedure set out in
         Schedule 18, as amended, varied or substituted from time to time in
         accordance with the terms hereof;

         "Authorised Electricity Operator" means any person who is authorised
         under the Act to generate, transmit or supply electricity and shall
         include any person transferring electricity to or from England and
         Wales across an interconnector (as such term is used in the NGC
         Transmission Licence), other than the Grid Operator in its capacity as
         operator of the NGC Transmission System;

         "Banking System" has the meaning  given to that term in Section 1.1 of
          Schedule 11;

         "Billing System" has the meaning  given to that term in Section 1.1 of
          Schedule 11;

          "BPS Goal"  has the meaning  given  to that  term  in  Appendix  2 to
          Schedule 9;

         "British Grid Systems Agreement" means the agreement of that name made
         or to be made between NGC, Scottish Hydro-Electric PLC and Scottish
         Power plc inter alia regulating the relationship between their
         respective grid systems;

         "Bulk Supply Point" means any or (as the context may require) a
         particular point of supply where Metering Equipment for the purposes of
         the Bulk Supply Tariff is or would have been located and, in the event
         of any dispute as to location, as determined in accordance with Clause
         83;

         "Bulk Supply Tariff" means the basis of payment for Active Energy as
          levied by the Generating Board prior to the Effective Date;

         "Central Despatch" means the process of Scheduling and issuing direct
         instructions by the Grid Operator referred to in paragraph 1 of
         Condition 7 of the NGC Transmission Licence and "Centrally Despatched"
         shall be construed accordingly;

         "Change Management Policies" means the policies, procedures and
         guidelines for the co-ordination by the Settlement System Administrator
         of the implementation of changes to the Settlement System entitled
         respectively "Change Management Policy", "Settlement Change
         Co-ordinator Operating Procedures" and "Change Management
         Implementation Guidelines" in the form initialled for the purposes of
         identification as at 29th November, 1991 by or on behalf of the
         Executive Committee and the Settlement System Administrator, as the
         same have been or may be amended from time to time in accordance with
         the terms of the Initial Settlement Agreement or this Agreement;

         "Charging Procedure" means the charging procedure set out in the
         Appendix to Schedule 4, as amended, varied or substituted from time to
         time in accordance with the terms hereof;

         "Chief Executive" has the meaning given to that term in Clause 17.1.1;

         "Chief  Executive's  Office" means the Chief  Executive,  the Contract
          Manager and the personnel referred to in Clause 17.2.1;

         "Code of Practice" means each of the codes of practice in relation to
         any Metering Equipment or any part or class thereof which are specified
         in the Synopsis of Metering Codes, as the same may be amended or
         substituted from time to time by the Executive Committee with the
         agreement or approval of:-

          (i)  in the  case of any  Code of  Practice in  respect of Metering
               Equipment  in  respect  of  which  it is the  Operator,  the Grid
               Operator;

          (ii) in the  case of any  Code of  Practice  in  respect  of Metering
               Equipment  relating to Reactive  Energy,  the Ancillary Services
               Provider; and

         (iii)    in the case of any change to any Code of Practice prior to 1st
                  April, 1998 in respect of standards of accuracy of Metering
                  Equipment required for Second Tier Customers up to (and
                  including) 100kW or Non-Pooled Generators, the Suppliers in
                  separate general meeting,

         (provided that, prior to the date on which the transitional
         arrangements regarding metering of Reactive Power at Grid Supply Points
         are brought into effect (the "RP Date") in the case of a Code of
         Practice or part thereof which relates to Reactive Power metering at
         Grid Entry Points, such Code or part thereof may only be amended or
         substituted by agreement between the Ancillary Services Provider and
         all Committee Members), and any other code of practice which is agreed
         from time to time to be treated as a Code of Practice for the purposes
         of this Agreement by the Executive Committee (or, where appropriate,
         prior to the RP Date all Committee Members) and, where appropriate, the
         Grid Operator and/or the Ancillary Services Provider and/or the
         Suppliers;

          "Commercial Ancillary Services" means Ancillary Services, other than
         System Ancillary Services, utilised by the Grid Operator in operating
         the Total System if a User has agreed to provide them under a
         Supplemental Agreement with payment being dealt with under an Ancillary
         Services Agreement or, in the case of Externally Interconnected Parties
         or External Pool Members, under any other agreement;

         "Commissioned" means (i) in relation to any Plant or Apparatus
         connected to the NGC Transmission System or to any External
         Interconnection or any Distribution System, commissioned for the
         purposes of the Connection Agreement relating to such Plant or
         Apparatus; or (ii) in relation to any Metering System or Metering
         Equipment, commissioned in accordance with the relevant Code of
         Practice;

          "Committee Member" means a member of the Executive Committee appointed
          in accordance with the provisions of Part IV;

         "Communications Equipment" means, at or relating to any Site, in
         respect of any Metering Equipment (i) the terminating equipment (which
         may include a modem) necessary to convert data from such Metering
         Equipment into a state for transmission to the Settlement System
         Administrator; and (ii) in the case of Sites which are not 1993/1994
         Tariff Qualifying Sites (as defined in the Tariff which is entitled
         Tariff for 1993/1994 Sites) the exchange link which is dedicated to
         that terminating equipment, but (iii) it shall not include an
         Outstation;

         "Competent Authority" means the Secretary of State, the Director and
         any local or national agency, authority, department, inspectorate,
         minister, ministry, official or public or statutory person (whether
         autonomous or not) of, or of the government of, the United Kingdom or
         the European Community;

         "Computer Systems" means all and any computer systems used by the
         Settlement System Administrator and required in connection with the
         operation of the Settlement System;

         "Connection Agreements" means the Master Connection and Use of System
         Agreement, the Supplemental Agreements, the Supplier's Connection
         Agreements, the Supplier's Use of System Agreements and the
         Interconnection Agreements, and "Connection Agreement" means any or (as
         the context may require) a particular one of them;

          "Connection Point" means a Grid Supply Point or Grid Entry Point,  as
          the case may be;

         "Constituent" has the meaning given to that term in Clause 23.6.5;

          "Consumer Metered Demand" has the meaning given to that term in Part I
          of Appendix 1 to Schedule 9;

          "Contract Management  Rules"  has the  meaning  given to that term in
           sub-section 1.1 of Schedule 4;

          "Contract Manager" has the meaning  given to that term in  sub-section
          1.1 of Schedule 4;

         "Contributory Share" means, in relation to any Pool Member, the
         Contributory Share for the time being and from time to time of such
         Pool Member calculated in accordance with Schedule 13;

          "Control" has the meaning  set out in  section  840 of the Income and
          Corporation  Taxes Act 1988 and  "Controlled"  shall be construed
          accordingly;

         "Custodian" has the meaning given to that term in Clause 45.1;

          "Customer"  means  a  person  to whom  electrical  power  is  provided
          (whether or not he is the provider of such electrical power);

         "De-energisation" means the movement of any isolator, breaker or switch
         or the removal of any fuse whereby no electricity can flow to or from
         the relevant User System through the User's Plant or Apparatus
         connected to such User System and, in relation to any External Pool
         Member, the termination of such External Pool Member's rights to use
         any relevant External Interconnection;

          "Default Calling  Creditor"  means any Pool  Creditor,  the Settlement
           System Administrator and the Pool Funds Administrator;

          "Default Interest Rate" has the meaning given to that term in Section
               1.1 of Schedule 11;

          "Defaulting Pool Member" has the meaning  given to that term in Clause
          66.3.1;

         "Despatch" means the issue by the Grid Operator of instructions for
         Generating Plant and/or Generation Trading Blocks to achieve specific
         Active Power (and, in relation to Generating Plant, Reactive Power or
         target voltage) levels within their Generation Scheduling and Despatch
         Parameters or Generation Trading Block Scheduling and Despatch
         Parameters, as the case may be, and by stated times;

         "Development Policies" means the policies, procedures and practices for
         the development of the Computer Systems in the forms initialled for the
         purposes of identification as at 29th November, 1991 by or on behalf of
         the Executive Committee and the Settlement System Administrator, as the
         same have been or may be amended from time to time in accordance with
         the terms of this Agreement;

         "Directive" includes any present or future directive, requirement,
         instruction, direction or rule of any Competent Authority (but only, if
         not having the force of law, if compliance with the Directive is in
         accordance with the general practice of persons to whom the Directive
         is addressed) and includes any modification, extension or replacement
         thereof then in force;

         "Director" means the Director General of Electricity  Supply appointed
         for the time being pursuant to section 1 of the Act;

         "Distribution Code" means the Distribution Code required to be drawn up
         by each Public Electricity Supplier and approved by the Director, as
         from time to time revised with the approval of the Director;

         "Distribution System" means the system consisting (wholly or mainly) of
         electric lines owned or operated by a Public Electricity Supplier and
         used for the distribution of electricity from Grid Supply Points or
         Generating Units or other entry points to the point of delivery to
         Customers or other Users and includes any Remote Transmission Assets
         (as defined in the Grid Code) operated by such Public Electricity
         Supplier and any Plant and Apparatus and meters owned or operated by
         such Public Electricity Supplier in connection with the distribution of
         electricity, but does not include any part of the NGC Transmission
         System;

         "EdF Documents" means any agreement for the time being and from time to
         time made between NGC and Electricite de France, Service National
         relating to the use or operation of the relevant External
         Interconnection;

         "Effective Date" means 2400 hours on 30th March, 1990;

         "electricity" means Active Energy and Reactive Energy;

         "Electricity Arbitration Association" means the unincorporated members'
         club of that name formed inter alia to promote the efficient and
         economic operation of the procedure for the resolution of disputes
         within the electricity supply industry by means of arbitration or
         otherwise in accordance with its arbitration rules;

         "Embedded" means having a direct connection to a Distribution System or
         the System of any other User to which Customers and/or Power Stations
         are connected, such connection being either a direct connection or a
         connection via a busbar of another User or of NGC (but with no other
         connection to the NGC Transmission System);

         "Embedded Non-Franchise Site" means:-

          (i)  a Site which is Embedded and which is at the point of connection
               to a Second Tier Customer; or

         (ii)     a site which is Embedded where the customer to which that site
                  is at a point of connection is eligible to receive supplies
                  from a Second Tier Supplier in the period between 1st April,
                  1994 and 31st March, 1998;

          "Equipment Owner" means, in relation to a Metering System, the person
               which is the owner of that Metering System;

          "ERS"means  the  electronic registration   system  operated  by  the
               Settlement System Administrator in accordance with Clause 60.5;

         "ERS First Tier Customer" means a Customer with a demand greater than
         100kW, other than a Second Tier Customer, of a Public Electricity
         Supplier in respect of whom that Public Electricity Supplier has
         registered in ERS the Metering System which is associated with supplies
         to that Customer;

         "Escrow Agreement" has the meaning given to that term in Clause 45.1;

         "ESIS" means Energy Settlement and Information Systems Limited
         (registered number 2444282) whose registered office is at Fairham
         House, Green Lane, Clifton, Nottingham NG11 9LN;

          "Event of Default" means any event declared as such pursuant to Clause
          66.1.1 or 66.2.1, as the case may be;

          "Executive  Committee"  means the committee  established  pursuant to
               Clause 14;

         "Export" means, in respect of any Party, a flow of electricity from the
         Plant or Apparatus of such Party to the Plant or Apparatus of another
         Party and, in relation to any Party which is an External Pool Member,
         the External Interconnection in respect of which that Party has the
         right to deliver or take electricity to or from the NGC Transmission
         System shall be treated as the Plant or Apparatus of such Party and the
         verb "Export" and its respective tenses shall be construed accordingly;

          "External Interconnection"  means  Apparatus for the  transmission of
          electricity to or from the NGC Transmission System into or out of
          an External System;

         "Externally Interconnected Party" means a person operating an External
         System which is connected to the NGC Transmission System by an External
         Interconnection (which person may or may not also be an External Pool
         Member);

         "External Pool Member" means a Party supplying electricity to or taking
         electricity from the NGC Transmission System through an External
         Interconnection and which has been or (where appropriate) is to be
         admitted as a Pool Member in the capacity of a Generator and/or a
         Supplier;

         "External System" means, in relation to an Externally Interconnected
         Party, the transmission or distribution system which it owns or
         operates and any Apparatus or Plant which connects that system to the
         External Interconnection and which is owned or operated by such
         Externally Interconnected Party;

         "Final Metering Scheme" means a national metering scheme to be
         installed in accordance with the relevant Codes of Practice and to come
         into effect on the FMS Date;

          "First Quarter"  means, in respect of any year, the months of January,
          February and March;

         "FMS Codes of Practice" means the Codes of Practice B, C, E, J, K1 and
         K2 and, to the extent that they relate to Metering Equipment the data
         derived from which was not used as Settlement Metering Data immediately
         prior to the FMS Date, F and G, and Codes of Practice 1, 2, 3, 4 and 5;

         "FMS Date" means 1st April, 1993;

         "FMS Metering Equipment" means Metering Equipment comprising a Metering
         System at or in relation to the commercial boundary in accordance with
         paragraph 7.1.2 of Schedule 21 in relation to the requirements to be
         met from the FMS Date;

         "FMS Trading Date"  means 10th January, 1994;

          "Following Quarter"  means,  in respect of any Quarter Day or Quarter,
          the period of three months immediately following such Quarter Day
          or Quarter;

         "Force Majeure" means, in relation to any Party, any event or
         circumstance which is beyond the reasonable control of such Party and
         which results in or causes the failure of that Party to perform any of
         its obligations under this Agreement including act of God, strike,
         lockout or other industrial disturbance, act of the public enemy, war
         declared or undeclared, threat of war, terrorist act, blockade,
         revolution, riot, insurrection, civil commotion, public demonstration,
         sabotage, act of vandalism, lightning, fire, storm, flood, earthquake,
         accumulation of snow or ice, lack of water arising from weather or
         environmental problems, explosion, fault or failure of Plant and
         Apparatus (which could not have been prevented by Good Industry
         Practice), governmental restraint, Act of Parliament, other
         legislation, bye-law and Directive (not being any order, regulation or
         direction under section 32, 33, 34 or 35 of the Act) provided that lack
         of funds shall not be interpreted as a cause beyond the reasonable
         control of that Party. For the avoidance of doubt, Force Majeure shall
         not apply in respect of the Settlement System Administrator where and
         to the extent that the Settlement System Administrator can perform its
         obligations under this Agreement by using the back-up arrangements
         required by Service Line 6 (Off-Site Security) or by acting in
         accordance with Clause 52 or Section 31 of Schedule 9;

          "Founder Generators"  means the parties to this Agreement of the first
          part at 30th March, 1990;

          "Founder Suppliers"  means the parties to this Agreement of the second
          part at 30th March, 1990;

          "Fourth Quarter" means, in respect of any year, the months of October,
           November and December;

         "Fuel Security Code" means the document of that title designated as
          such by the Secretary of State, as from time to time amended;

          "Funds  Transfer  Agreement"  has the  meaning  given to that  term in
           Section 1.1 of Schedule 11;

          "Funds  Transfer  Business"  has the  meaning  given  to that  term in
           Section 1.1 of Schedule 11;

          "Funds  Transfer  Hardware"  has the  meaning  given  to that  term in
          Section 1.1 of Schedule 15;

          "Funds  Transfer  Software"  has the  meaning  given  to that  term in
           Section 1.1 of Schedule 15;

          "Funds Transfer  System" has the meaning given to that term in Section
           1.1 of Schedule 11;

         "the Generating Board" has the meaning given to that term in the Act;

         "Generating Plant" means a Power Station subject to Central Despatch;

          "Generating Unit" means any Apparatus which produces  electricity and,
           in respect of an External Pool Member, means a Generation Trading
           Block;

          "Generation  Licence"  means a licence  granted or to be granted under
           section 6(1)(a) of the Act;

          "Generation Scheduling and Despatch Parameters" means those parameters
           listed in Appendix A1 to SDC1;

         "Generation Trading Block" means a notional Centrally Despatched
         Generating Unit of an External Pool Member treated as such for the
         purposes of the Grid Code;

         "Generation Trading Block  Scheduling and Despatch  Parameters"  means
          those  parameters  listed  in  Appendix  A1 to SDC1  relating  to
          Generation Trading Blocks;

         "Generator" means:-

          (i)  a person who generates  electricity  under  licence or exemption
               under the Act; or

          (ii) a person who is an External Pool Member who delivers  electricity
               or  on  whose  behalf   electricity   is  delivered  to  the  NGC
               Transmission System; or

          (iii)a person  who is acting as the agent for any such  person  who is
               referred to in paragraph (i) or (ii) above,

         and, in any such case, for the time being party to this Agreement,
 and:-

         (a)      who is a Founder Generator; or

         (b)      who was admitted as a Party in the capacity of a Generator; or

         (c)  who, in accordance  with Clause 3.10,  has changed  capacity(ies)
               such  that  it  participates  as a  Party  in the  capacity  of a
               Generator,

         and, where the expression is used in Part III or Part IV, who is also
or (where appropriate) is to become a Pool Member;

          "Generator Weighted Vote" has the meaning given to that term in Clause
               11.2.1;

          "Generic  Dispensation"  shall have the  meaning  ascribed  thereto in
               paragraph 14.1(b) of Schedule 21;

          "Genset Metered Generation" has the meaning given to that term in Part
               I of Appendix 1 to Schedule 9;

         "Gigawatt" means 1000MW;

         "GOALPOST" has the meaning given to that term in the Pool Rules;

         "Good Industry Practice" means, in relation to any undertaking and any
         circumstances, the exercise of that degree of skill, diligence,
         prudence and foresight which would reasonably and ordinarily be
         expected from a skilled and experienced operator engaged in the same
         type of undertaking under the same or similar circumstances;

         "Grid Code" means the Grid Code drawn up pursuant to the Transmission
Licence, as from time to time revised in accordance with the Transmission
Licence;

          "GridCode  Review  Panel"  has the  meaning  given to that term in the
           Grid Code;

         "Grid Entry Point" means the point at which a Power Station which is
not Embedded connects to the NGC Transmission System;

         "Grid Operator" means the person who for the time being and from time
         to time is required by the terms of a Transmission Licence, inter alia,
         to implement the Grid Code;

         "Grid Supply Point" means the point of supply from the NGC Transmission
         System to Public Electricity Suppliers or to other Users with User
         Systems with Customers connected to them or Non-Embedded Customers;

         "GW" means Gigawatt;

         "GWh" means Gigawatt-hour;

         "Hardware" means at any time the computer equipment and accessories
         used by the Settlement System Administrator on or in connection with
         which the Software functions or is intended to function at such time
         (other than Second Tier Hardware) and for the avoidance of doubt the
         Hardware at 1st April, 1996 is specified in version 1.0 of the Contract
         Management Rules;

         "Host PES" means, in respect of a Metering System, either:-

          (i)  the Public Electricity Supplier to whose Distribution System such
               Metering System is connected; or

         (ii)     where such Metering System is connected directly to the NGC
                  Transmission System, the Public Electricity Supplier whose
                  Consumer Metered Demand determined in accordance with the Pool
                  Rules is calculated by the Settlement System Administrator
                  using data from such Metering System;

         "Identified Pool Member" has the meaning given to that term in Clause
11.2.2(a) or, as the context may require, paragraph 2(A) of Schedule 13;

         "Import" means, in respect of any Party, a flow of electricity to the
         Plant or Apparatus of such Party from the Plant or Apparatus of another
         Party and, in relation to any Party which is an External Pool Member,
         the External Interconnection in respect of which it has the right to
         deliver or take electricity to or from the NGC Transmission System
         shall be treated as the Plant or Apparatus of such Party and the verb
         "Import" and its respective tenses shall be construed accordingly;

         "Independent Generators" means Generators other than:-
         (i)      the Founder Generators;

         (ii)     any Generator which is an External Pool Member; and

         (iii)    any Generator which is an affiliate or related undertaking of
                  (a) any person referred to in paragraph (i) or (ii) above, (b)
                  any person referred to in paragraph (i) of the definition of
                  Independent Suppliers, or (c) any Public Electricity Supplier;

         "Independent Suppliers" means Suppliers other than:-

         (i)      Eastern Group plc, East Midlands Electricity plc, London
                  Electricity plc, Manweb plc, Midlands Electricity plc,
                  Northern Electric plc, NORWEB plc, SEEBOARD plc, Southern
                  Electric plc, South Wales Electricity plc, South Western
                  Electricity plc, Yorkshire Electricity Group plc, National
                  Power PLC, PowerGen plc, Nuclear Electric plc, British Nuclear
                  Fuels plc, Electricite de France, Service National, Scottish
                  Power plc and Scottish Hydro-Electric PLC;

         (ii)     Public Electricity Suppliers;

         (iii) any Supplier which is an External Pool Member; and

         (iv) any Supplier which is an affiliate or related undertaking of any
person referred to in paragraph (i), (ii) or (iii) above;

          "Information Systems" has the meaning given to that term in Section
           1.1 of Schedule 11;

         "Initial Settlement Agreement" means the agreement of even date
         herewith made between the Parties as at such date modifying and
         suspending the provisions of this Agreement for an initial period and
         setting out inter alia the rules and procedures for the operation of
         the electricity trading pool referred to in Recital (E) and for the
         operation of a settlement system and the procedures for the development
         of the phases and pool rules during such initial period, as amended,
         varied, supplemented, modified or suspended from time to time;

         "Interconnection Agreement" means an agreement between NGC and an
         Externally Interconnected Party and/or an External Pool Member relating
         to an External Interconnection and/or an agreement under which an
         External Pool Member can use an External Interconnection;

          "IS  Committee  Member" means an RS Committee  Member elected in order
           to  represent  the  interests  of  Independent  Suppliers  on the
           Executive Committee;

         "IS Nominee" has the meaning given to that term in Clause 15.6.4(c);

          "IS Preference List" has the meaning  given to that term in Clause
           15.6.4(i);

         "IS Pool Member" means an Independent Supplier:-

                  (i)     which is not a Public Electricity Supplier;

                  (ii) which is not in the same Pool  Member's  Group as an MP
                         Pool Member; and

                  (iii) whose Weighted Votes constitute one per cent. or less of
the Total Weighted Votes;

         "kVAr" means kilovoltamperes reactive;

         "kW" means kilowatt;

         "kWh" means kilowatt-hour;

         "Licences" means all Generation Licences, PES Licences, Second Tier
         Supply Licences and Transmission Licences and "Licence" means any or
         (as the context may require) a particular one of them;

         "lost opportunity costs" means, in relation to any Generator, the
         profit foregone by such Generator in respect of a Generating Unit
         during a period when it is out of service for the purposes of
         maintenance, repair, modification, renewal or replacement needed to
         comply with a proposal made by such Generator to restore the Generating
         Unit's Reactive Power capability to that required by the Grid Code or,
         where relevant, the applicable Supplemental Agreement, whichever
         capability is lower provided that:-

         (i)      the period when it is taken out of service is:-

                  (a)     outside the period identified for the Generating Unit
                          concerned pursuant to Section OC2 of the Grid Code as
                          at the time when the failure to have Reactive Power
                          capability was notified or determined; and

                  (b)     approved by the Grid Operator; and

         (ii) the  Generator  gives credit for any savings in loss of profit by
               carrying out other repair work at the same time as that required
               for the purposes of Reactive Power;

          "MainSite" means those sites  specified in  paragraphs (i),  (ii) and
           (v) of the definition of Site;

         "Majority Default Calling Creditors" means:-

         (i)      in respect of each calendar quarter other than the first, any
                  single or group of Default Calling Creditors to whom, in
                  respect of the aggregate of (a) all Notified Payments payable
                  on the last five Business Days of the immediately preceding
                  calendar quarter and (b) all sums due to the Settlement System
                  Administrator, the Pool Funds Administrator and the Ancillary
                  Services Provider and outstanding under this Agreement on the
                  last Business Day of such immediately preceding calendar
                  quarter, more than 50 per cent. of the total amount of all
                  such Notified Payments and such other sums were due; and

         (ii) in respect of the first calendar quarter, all Pool Members other
than the Defaulting Pool Member;

          "Master Connection  and Use of System  Agreement"  means the agreement
           envisaged in Condition 10B of the NGC Transmission Licence;

         "Membership Vote" has the meaning given to that term in Clause 11.1;

          "Meter" means a device for measuring  Active  Energy  and/or  Reactive
           Energy;

         "Meter Operator Party" means each person admitted in the capacity as
         such and for the time being and from time to time party to Schedule 21
         in accordance with the provisions thereof, and shall include any
         successor(s) in title to, or permitted assign(s) of, such person;

         "Meter Operator Party Accession Agreement" means an accession agreement
         in or substantially in the form set out in Annex 3 to Schedule 21 or in
         such other form (to which the Settlement System Administrator has no
         reasonable objection) as the Executive Committee may for the time being
         and from time to time approve;

         "Meter Operator Party Admission Application" means an application in or
         substantially in the form set out in Annex 1 to Schedule 21 or in such
         other form as the Executive Committee may for the time being and from
         time to time approve;

         "Meter Operator Party Resignation Notice" means a resignation notice in
         or substantially in the form set out in Annex 2 to Schedule 21 or in
         such other form as the Executive Committee may for the time being and
         from time to time approve;

         "Metering Equipment" means Meters, measurement transformers (voltage,
         current or combination units), metering protection equipment including
         alarms, circuitry, their associated Communications Equipment and
         Outstations, and wiring which are part of the Active Energy and/or
         Reactive Energy measuring and transmitting equipment at or relating to
         a Site;

         "Metering System" means all or that part of the Commissioned Metering
         Equipment at or relating to a Site linked to a single Outstation at or
         relating to that Site and includes, for the avoidance of doubt, such
         Outstation. Without prejudice to the generality of the foregoing, a set
         of non-exhaustive diagrammatic representations of Metering Systems is
         contained in Annex 5 to Schedule 21;

         "Moderator" means a person nominated for the time being and from time
         to time by the Pool Chairman (failing whom, by the Chief Executive) to
         perform certain obligations pursuant to Clause 15;

         "MP Committee Member" has the meaning given to that term in Clause
 15.5;

         "MP Nominee" has the meaning given to that term given in Clause 15.5.1;

         "MP Nominee List" has the meaning given to that term in Clause 15.5.2;

         "MP Pool Member" means a Pool Member which is neither an Independent
          Supplier nor a Small Generator but shall include:

         (i)      a Pool Member which is an Independent Supplier if:

                  (a)     it is a Public Electricity Supplier; or

                  (b)  its Weighted Votes  constitute  more than one per cent.
                         of the Total Weighted Votes; and

         (ii)     a Pool Member which is an Independent Supplier or Small
                  Generator which is a member of a Pool Member's Group in which
                  there is at least one other Pool Member which is neither:

                    (a)  an Independent Supplier (not being a Public Electricity
                         Supplier)  with  Weighted  Votes  constituting one per
                         cent. or less of the Total Weighted Votes; or

                    (b)  a Small Generator;

         "MP  Preference  List"  has the  meaning  given to that term in Clause
               15.5.3(f);

         "MVAr" means megavar;

         "MVArh" means megavar-hours;

         "MW" means megawatt;

         "MWh" means megawatt-hours;

         "NGC" means the National Grid Company plc (registered number 2366977)
         whose registered office is situate at National Grid House, Kirby Corner
         Road, Coventry CV4 8JY;

         "NGC Site" means a site owned (or occupied pursuant to a lease, licence
         or other agreement) by NGC at which there is a Connection Point and,
         for the avoidance of doubt, a site owned by a User but occupied by NGC
         as aforesaid is an NGC Site;

          "NGC Transmission  Licence" means the Transmission  Licence granted or
           to be granted to NGC;

        "NGC Transmission System" means the system consisting (wholly or
         mainly) of high voltage electric lines owned or operated by NGC and
         used for the transmission of electricity from one Power Station to a
         sub-station or to another Power Station or between sub-stations or to
         or from any External Interconnection and includes any Plant and
         Apparatus and meters owned or operated by NGC in connection with the
         transmission of electricity but does not include any Remote
         Transmission Assets (as defined in the Grid Code);

         "Non-Embedded Customer" means any Customer, other than a PES, receiving
         electricity direct from the NGC Transmission System irrespective of
         from whom it is supplied;

         "Non-Pooled Generation" means generation from any site which is
         directly connected to the Distribution System of a Public Electricity
         Supplier where (i) the output is accounted for in Settlement and (ii)
         the Generator owning such site:-

         (a)      is exempted from holding a Generation Licence; or

         (b) would be exempted from holding a Generation Licence if such site
             were the only site owned by that Generator;

         "Non-Pooled Generation System" means any Metering System of a
         Non-Pooled Generator which has been registered with the Settlement
         System Administrator by a Second Tier Supplier or Public Electricity
         Supplier and from which the Settlement System Administrator or any
         Second Tier Agent is required to collect, aggregate, adjust or transmit
         data for the purposes of taking a supply of electricity;

         "Non-Pooled Generator" means a Generator who produces Non-Pooled
         Generation, provided that a Generator shall be a Non-Pooled Generator
         only to the extent that it owns sites which produce Non-Pooled
         Generation;



         "Non-Second Tier System" means a metering system at premises eligible
         for supply under a Second Tier Supply Licence in the authorised area of
         a Supplier holding a PES Licence but not being a Metering System in
         respect of which a Second Tier Supplier is the Registrant;

         "Notified  Payment" has the meaning  given to that term in Section 1.1
          of Schedule 11;

         "Operator" means, in relation to any Metering System:-

         (i)      used to measure the supply to a Second Tier Customer or from a
                  Non-Pooled Generator, the Meter Operator Party who is
                  appointed as such by the Second Tier Customer, the Non-Pooled
                  Generator or by the Registrant (with the consent of that
                  Second Tier Customer or, as the case may be, Non-Pooled
                  Generator) and who agrees to act as Operator in relation to
                  such Metering System; or

         (ii)     not within (i) above or (iii) to (v) below, the Meter Operator
                  Party who is appointed as such by the Registrant of such
                  Metering System and who agrees to act as Operator in relation
                  to such Metering System; or

          (iii)where  new  Metering  Equipment  is to be  added  to an  existing
               Metering System,  the Operator of such existing  Metering System;
               or

          (iv) the Meter  Operator  Party  which  continues  as the  Operator in
               accordance  with  the transitional   arrangements  set  out  in
               paragraph 23 of Schedule 21; or

          (v)  the Party who is deemed  to be the  Operator  and Meter  Operator
               Party in respect  thereof in accordance  with the terms of Clause
               60.4.4;

          "Outgoing  Committee  Member"  has the  meaning  given to that term in
               Clause 15.12;

         "Outstation" means equipment which receives and stores data from a
         Meter(s) for the purpose, inter alia, of transfer of that metering data
         to the Settlement System Administrator and which may perform some
         processing before such transfer. This equipment may be in one or more
         separate units or may be integral with the Meter; "Party" means each
         person for the time being and from time to time party to this Agreement
         acting in a capacity, or deemed to be acting in a capacity, other than
         that of Operator or Meter Operator Party, and shall include any
         successor(s) in title to, or permitted assign(s) of, such person;

          "Period Metered  Demand" has the meaning  given to that term in Part I
               of Appendix 1 to Schedule 9;

          "PES Licence" means a licence  granted or to be granted under section
               6(1)(c) of the Act;

          "PFA Accounting  Procedure"  means the  procedure  for the recovery of
               certain moneys set out in Section 20 of Schedule 15;

         "Plant" means fixed and moveable items used in the generation and/or
supply and/or transmission of electricity, other than Apparatus;

         "Pool Auditor" means the firm of accountants appointed for the time
being and from time to time pursuant to Clause 47.1;

          "PoolAuditor's  Report" has the  meaning  given to that term in Clause
               9.7.1;

          "PoolBanker"  has the  meaning  given to that term in  Section  1.1 of
               Schedule 11;

         "Pool Chairman" has the meaning given to that term in Clause 16.1;

          "PoolCreditor"  has the  meaning  given to that term in Section 1.1 of
               Schedule 11;

          "Pool Funds  Administrator"  means the  person for the time being and
          from time to time  appointed  pursuant to Schedule 15 to act as
          Pool Funds Administrator;

         "Pool Member" means each of the Founder Generators and Founder
         Suppliers and any other person who is admitted to pool membership in
         accordance with Clause 8.2, in each case until it shall have resigned
         from pool membership or otherwise ceased to be a member in accordance
         with this Agreement, and "Pool Membership" shall be construed
         accordingly;

         "PoolMember's  Group" in relation  to any Pool Member  means that Pool
          Member and any  affiliate  (as  defined in Clause  1.2.3) of that
          Pool Member;

         "Pool Membership Application" means an application in or substantially
         in the form set out in Schedule 6 or in such other form as the
         Executive Committee may for the time being and from time to time
         approve;

         "Pool Rules" means the rules referred to in Clause 7.4 and set out in
         Schedule 9, as amended, varied or substituted from time to time in
         accordance with the terms hereof;

          "PORTHOLE" means the database which allows the transfer of operational
          information  from  the Grid  Operator  to the  Settlement  System
          Administrator;

          "Potential  Operator"  means a Meter Operator Party which is appointed
          as the operator pursuant to an agreement or arrangement:-

          (i)  in respect of a Metering  System or Metering  Equipment at a Site
               or Sites but which is not yet  registered  as Operator in respect
               of that Metering System; or

          (ii) in respect of Metering  Equipment  where such Metering  Equipment
               has not been registered as comprising a Metering System;

         "Power Station" means an installation comprising one or more Generating
         Units (even where sited separately), other than an External
         Interconnection, owned and/or controlled by the same Generator, which
         may reasonably be considered as being managed as one Power Station;

          "Preferred IS Nominee" has the  meaning  given to that term in Clause
               15.6.4(e);

          "Preferred MP Nominee"  has the  meaning  given to that term in Clause
               15.5.3(b);

          "Preferred RS Nominees"  has the meaning  given to that term in Clause
               15.6.4(e);

          "Preferred SG Nominee"  has the  meaning  given to that term in Clause
               15.6.4(d);

         "Public Electricity Supplier" or "PES" means a person for the time
         being party to this Agreement who is a public electricity supplier (as
         that expression is defined in the Act) and, in relation to Clauses 15.4
         and 15.5 and Schedules 14 and 22, means a person for the time being
         party to this Agreement who is a public electricity supplier in England
         and Wales;

         "Qualifying Site" means an Embedded Non-Franchise Site qualifying in
         accordance with the terms of the relevant Tariff for payments to be
         made for the provision of installation and maintenance services;

          "Quarter"  means the period of three  calendar  months  ending on a
               Quarter Day;

          "Quarter Day" means 31st March,  30th June,  30th  September  and 31st
               December;

          "Reactive  Energy"  means the  integral  with  respect  to time of the
               Reactive Power;

         "Reactive Power" means the product of voltage and current and the sine
         of the phase angle between them measured in units of voltamperes
         reactive and standard multiples thereof, that is:-

                  1000VAr   =  1kVAr
                  1000kVAr =  1MVAr;

          "Redistributed  Votes" has the  meaning  given to that term in Clause
               11.4.3(a);

          "Register"  means the register  to be  maintained  by the  Settlement
          System Administrator pursuant to Clause 60.5;

          "Registered Capacity"  has the meaning given to that term in the Grid
               Code;

          "Registrant" means, in relation to a Metering System at or in relation
           to any Site which is:-

         (i)      a Grid Entry Point,

         the Pool Member which operates Generating Plant at such Site; or

         (ii)     a Grid Supply Point or Bulk Supply Point,

         the Pool Member whose System is directly connected to the NGC
Transmission System at or in relation to such Grid Supply Point or Bulk Supply
Point; or

         (iii) the point of connection of a Customer of a Supplier and the NGC
Transmission System,

         the Supplier which is the supplier to that Customer; or

          (iv) the point of connection to a  Distribution  System of a Generator
               which is  Embedded  or of a Second  Tier  Supplier or of a Second
               Tier Customer or of an ERS First Tier Customer,

         the Party which is such Generator which is Embedded or such Second Tier
         Supplier or the Second Tier Supplier in respect of such Second Tier
         Customer or the Public Electricity Supplier in respect of such ERS
         First Tier Customer, as the case may be; or

          (v)  the  point  of  connection   of  a  Non-Pooled   Generator  to  a
               Distribution System,

         the party which is the Supplier or Second Tier Supplier, as the case
may be, in respect of such Metering System of such Non-Pooled Generator; or

         (vi)     the point of connection of two or more Distribution Systems,

          the  Authorised  Electricity  Operator  of  one of  such  Distribution
               Systems which is nominated in accordance  with the  provisions of
               this Agreement; or

         (vii) the point of connection of an External Interconnection to the NGC
Transmission System or a Distribution System,

         the Externally Interconnected Party;

          "Resignation Notice" means a resignation notice in or substantially in
               the form set out in Schedule 10;

          "RP  Date" has the meaning  given to that term in the  definition  of
               Code of Practice;

         "RS Committee Member" means a member of the Executive Committee elected
by RS Pool Members in accordance with provisions of Clause 15.6;

         "RS Nominee" has the meaning given to that term in Clause 15.6.1;

         "RS Nominee List" has the meaning given to that term in Clause 15.6.2;

          "RS  Pool Member" means an IS Pool Member or a SG Pool Member,  as the
               context may require;

          "Schedule  Day"  has  the  meaning  given  to  that  term in Part I of
           Appendix 1 to Schedule 9;

          "Scheduling"  means the process of compiling  and issuing a Generation
           Schedule (as that expression is defined in the Grid Code), as set
           out in SDC1;

         "Scheduling and Despatch Code" or "SDC" means that portion of the Grid
Code which is identified as such in the Grid Code;

         "Scheme" means the scheme set out in Clause 53 and, separately, each
further scheme implemented pursuant to Clause 56.2;

         "Scheme Admission Application" means an application form setting out
         the Scheme Admission Conditions and requiring such information as the
         Executive Committee may consider necessary to enable it to consider the
         application, in such form as the Executive Committee may from time to
         time determine;

          "Scheme Admission  Conditions"  means the conditions set out in Clause
           54;

          "Scheme Genset" means a Centrally Despatched  Generating Unit which is
           admitted to a Scheme under Clause 53.3;

          "Scheme Planned  Availability"  or "SPA" has the meaning given to that
           term in Clause 55;

         "Scheme Year" means, in respect of each Scheme Genset, each successive
period of twelve months, the first such period commencing on 1st April, 1990;

          "Second Quarter"  means,  in respect of any year, the months of April,
               May and June;

         "Second Tier Agent" means an agent appointed pursuant to Clause 
60.16.1;

         "Second Tier Computer Systems" means all and any computer systems used
         by any Second Tier Agent in connection with the operation of the Second
         Tier Data Collection System operated by such Second Tier Agent;

          "Second Tier  Customer"  means a person who is  supplied  with or sold
           electricity by a Second Tier Supplier;

         "Second Tier Data Collection System" means those parts of the
         Settlement System which relate to the obligations of the Settlement
         System Administrator under this Agreement in relation to collecting,
         estimating and aggregating data as may be required for the proper
         functioning of Settlement from Metering Systems at the point of
         connection between the Distribution System of a Public Electricity
         Supplier and:-

          (i)  a Second Tier Customer,  an ERS First Tier Customer or Non-Pooled
               Generator;

         (ii) the System of an Authorised Electricity Operator other than the
Public Electricity Supplier;

         (iii) an Embedded Generator not subject to Central Despatch; and

         (iv) the Distribution System of another Public Electricity Supplier,

         and providing such data to the Settlement System Administrator;

         "Second Tier Hardware" means at any time the computer equipment and
         accessories used by any Second Tier Agent on or in connection with
         which the Second Tier Software functions or is intended to function at
         such time;

         "Second Tier Software" means at any time the computer programs and
         codes and associated documents and materials which are used by any
         Second Tier Agent in connection with the operation of the Second Tier
         Data Collection System operated by such Second Tier Agent;

         "Second Tier Supplier" means a person for the time being party to this
Agreement who is the holder of a Second Tier Supply Licence;

         "Second Tier Suppliers' Non-Pooled Generation System Charge" means the
amount determined by the Executive Committee for the purposes of Clause 34A.3;

          "Second Tier Suppliers'  System Charge" means the amount determined by
               the Executive Committee for the purposes of Clause 34A.2;

          "Second Tier Supply  Licence" means a licence granted or to be granted
               under section 6(2)(a) of the Act;

         "Second Tier System" means any Metering System from which the
         Settlement System Administrator or any Second Tier Agent is required to
         collect, aggregate, adjust or transmit data for the purposes of a
         supply pursuant to a Second Tier Supply Licence;

          "Secretary"  means the person for the time being and from time to time
          holding office as secretary of the Executive Committee;

         "Secretary of State" has the meaning given to that term in the Act;

          "Security Cover" has the meaning  given to that term in Section 1.1 of
          Schedule 11;

          "Security  Period"  has the  meaning  given  to that  term in the Fuel
          Security Code;

          "Service Line" has the  meaning  given to that term in Section  1.1 of
          Schedule 4;

          "Settlement" means the operation of the  Settlement  System under this
           Agreement;

          "Settlement Account" has the meaning given to that term in Section 1.1
          of Schedule 11;

          "Settlement  Day"  has the  meaning  given  to that  term in Part I of
           Appendix 1 to Schedule 9;

         "Settlement GOAL" has the meaning given to that term in Appendix 2 to
         Schedule 9; "Settlement Metering Data" shall mean Metered Data as
         defined in, and used in accordance with Section 3 of Schedule 9 and
         relevant metered data in accordance with Appendix 6 to Schedule 9 of
         this Agreement, which is used for the purposes of Settlement;

          "Settlement  Period" has the  meaning  given to that term in Part I of
          Appendix 1 to Schedule 9;

         "Settlement System" means those assets, systems and procedures for the
         calculation in accordance with the Pool Rules of payments which become
         due thereunder, as modified from time to time;

         "Settlement System Administrator" means ESIS in its capacity as
         Settlement System Administrator or any replacement therefor as
         Settlement System Administrator from time to time appointed pursuant to
         this Agreement;

         "Settlements  Business"  means the business of the  Settlement  System
          Administrator  in  operating  the  Settlement  System  under this
          Agreement;

          "SG  Committee  Member" means an RS Committee  Member elected in order
          to represent the  interests of Small  Generators on the Executive
          Committee;

         "SG Nominee" has the meaning given to that term in clause 15.6.4(b);

          "SG  Pool  Member"  means a Small  Generator  which is not in the same
          Pool Member's Group as an MP Pool Member;

        "SG Preference List" has the meaning given to that term in Clause
15.6.4(h);

         "Site" means:-

         (i)      a Grid Entry Point;

         (ii)     a Grid Supply Point or Bulk Supply Point;

         (iii)    the point of connection to a Distribution System or the NGC
                  Transmission System of a Generator which is Embedded or of a
                  Second Tier Supplier or of a Second Tier Customer or of an ERS
                  First Tier Customer, or the point of connection of a
                  Non-Pooled Generator to a Distribution System;

         (iv)     the point of connection of two Distribution Systems; or

          (v)  the point of connection of an External Interconnection to the NGC
               Transmission System;

         "Small Generator" means any Independent Generator with Generating Units
        the aggregate Registered Capacity of which does not exceed 100MW;

         "Software" means at any time all the computer programs, codes and
         associated documents and materials which are at such time used by or on
         behalf of the Settlement System Administrator and required in the
         operation of the Settlement System;

         "Specification" means at any time the computer specification(s) giving
         effect to the Pool Rules and such other matters as may be agreed
         between the Executive Committee and the Settlement System Administrator
         at the time;

          "SSA Arrangements" means this Agreement, the Service Lines, the Agreed
           Procedures and the Codes of Practice;

         "SSA System" means all operating systems, compilers and other software
         necessary to or used for the operation or testing of the Hardware and
         the Settlement System (excluding, for the avoidance of doubt, Developed
         Application Software and Licensed Application Software, each as defined
         in sub-section 10.1 of Schedule 4);

         "Supplemental Agreement" means any agreement entered or to be entered
         into between NGC and any User party to the Master Connection and Use of
         System Agreement and expressed to be supplemental thereto;

         "Supplier" means a person for the time being party to this Agreement:-

         (i)      who is a Founder Supplier; or

         (ii)     who was admitted as a Party in the capacity of a Supplier; or

         (iii) who, in accordance with Clause 3.10, has changed capacity(ies)
such that it participates as a Party in the capacity of a Supplier,

         and, where the expression is used in Part III, Part IV or Part XI or
Schedule 14 or 18, who is also or (where appropriate) is to become a Pool
Member;

          "Supplier Weighted  Vote" has the meaning given to that term in Clause
           11.2.2;

         "Supplier's Connection Agreement" means the agreement for connection to
         any User System envisaged in Condition 8B of a PES Licence and
         Condition 3 of a Second Tier Supply Licence;

          "Supplier's  System  Charge"  means  the  amount   determined  by  the
         Executive  Committee in accordance  with the provisions of Clause
         34A.4;

         "Supplier's Use of System Agreement" means the agreement for use of
         system envisaged in Condition 8B of a PES Licence and Condition 3 of a
         Second Tier Supply Licence;

         "Synopsis of Metering Codes" means a synopsis maintained and updated as
         necessary by the Executive Committee listing each Code of Practice
         approved as such from time to time in accordance with this Agreement;

          "System" means any User System or the NGC Transmission  System, as the
          case may be;

         "System Ancillary Services" means Ancillary Services which are required
         for System reasons and which must be provided by Users (but in some
         cases only if a User has agreed to provide the same under a
         Supplemental Agreement);

         "Tariff" for any period of one year in respect of any Site (which
         whenever used in this definition shall include all Qualifying Sites)
         means the tariff approved by the Director and published by the
         Executive Committee on or before that tariff becomes effective and
         providing for amounts payable to Tariff Operators of certain Sites in a
         class of which that Site is a member in respect of the provision of
         installation and maintenance services in respect of Communications
         Equipment; and the "relevant Tariff" in respect of any Site (or
         Metering Equipment or Metering System in respect of a Site) shall be
         the Tariff which is so expressed by its terms to apply to that class of
         Sites to which such Site so belongs;

         "Tariff Operator" means a Meter Operator Party which is an Operator or
         which is appointed as the operator pursuant to an agreement or an
         arrangement in respect of Metering Equipment at a Qualifying Site;

          "Third Quarter"  means,  in  respect of any year,  the months of July,
          August and September;

         "Total Second Tier System Charges" means, in respect of any Specified
         Accounting Period (as defined in Clause 34A.1), the aggregate of the
         costs, expenses and charges incurred by all Second Tier Agents in
         respect of the relevant Specified Accounting Period and relating to the
         collection, aggregation, adjustment and transmission of data from
         Second Tier Systems, Non-Pooled Generation Systems and any other
         Metering Systems registered in ERS pursuant to any requirement of this
         Agreement, or when the collection, aggregation, adjustment and the
         transmission of data from Second Tier Systems, Non-Pooled Generation
         Systems and any other Metering Systems registered in ERS pursuant to
         any requirement of this Agreement is performed by the Settlement System
         Administrator the costs, expenses and charges directly incurred by the
         Settlement System Administrator plus the deficit (if any) or (as the
         case may be) less the surplus (if any) in the amount of Total Second
         Tier System Charges recovered for the immediately preceding Specified
         Accounting Period carried forward in accordance with the provisions of
         Clause 34A.5;

          "Total System" means the NGC Transmission  System and all User Systems
          in England and Wales;

         "Total Weighted Votes" means at any time the aggregate number of
         Weighted Votes to which all Pool Members (in whatever capacity) are
         entitled at such time before the application of Clause 11.4;

         "Trading Site" shall be determined in accordance with Schedule 17;

         "Transferee Pool Member" has the meaning given to that term in Clause
11.2.2(a) or, as the context may require, paragraph 2(A) of Schedule 13;

         "Transmission Licence" means a licence granted or to be granted under
         section 6(1)(b) of the Act, the authorised area of which is England and
         Wales or any part of either thereof;

          "Transport Uplift" has the meaning given to that term in Appendix 1 to
           Schedule 9;

         "TW" means terrawatt;

         "TWh" means terrawatt-hours;

         "undertaking" has the meaning given to that term by section 259 of the
         Companies Act 1985 as substituted by section 22 of the Companies Act
         1989 and, if that latter section is not in force at the date of this
         Agreement, as if such latter section were in force at such date;

         "User" means a term utilised in various sections of the Grid Code to
         refer to a person using the NGC Transmission System and includes an
         Externally Interconnected Party, all as more particularly identified in
         each section of the Grid Code concerned;

         "User Site" means a site owned (or occupied pursuant to a lease,
licence or other agreement) by a User in which there is a Connection Point;

         "User System" means:-

         (i)      other than in relation to an External Pool Member or an
                  Externally Interconnected Party, any system owned or operated
                  by a User comprising Generating Units and/or Distribution
                  Systems (and/or other systems consisting, wholly or mainly, of
                  electric lines which are owned or operated by a person other
                  than a PES) and Plant and/or Apparatus connecting Generating
                  Units, Distribution Systems (and/or other systems consisting,
                  wholly or mainly, of electric lines which are owned or
                  operated by a person other than a PES) or Non-Embedded
                  Customers to the NGC Transmission System or (except in the
                  case of Non-Embedded Customers) to the relevant other User
                  System, as the case may be, including any Remote Transmission
                  Assets (as defined in the Grid Code) operated by such User or
                  other person and any Plant and/or Apparatus and meters owned
                  or operated by the User or other person in connection with the
                  distribution of electricity, but does not include any part of
                  the NGC Transmission System; and

         (ii)     in relation to an External Pool Member or an Externally
                  Interconnected Party, the External System connected to the
                  relevant External Interconnection;

         "VAr" means voltamperes reactive;

         "Votes Calculation Period" means:-

          (i)  in relation to the First  Quarter in any year,  the Third Quarter
               in the immediately preceding year;

         (ii) in relation to the Second Quarter in any year, the Fourth Quarter
in the immediately preceding year;

         (iii) in relation to the Third Quarter in any year, the First Quarter
of the same year; and

         (iv) in relation to the Fourth Quarter in any year, the Second Quarter
in the same year;

         "Voting Paper" has the meaning given to that term in Clause  15.5.3(a)
          or (as the context may require) Clause 15.6.4(a);

         "Weighted Vote" means a Generator Weighted Vote or a Supplier Weighted
Vote or the sum of the two for each Pool Member, as the context may require;

         "Weighted Votes" means, in relation to a Pool Member, the number of
votes to which such Pool Member is entitled pursuant to Clause 11.2;

         "Wh" means watt-hours;

         "working day" has the meaning given to that term in the Act; and

          "Works Programme Manager" has the meaning given to that term in Clause
               5.13.

          1.2  Construction of certain references:  In this  Agreement,  except
               where the context otherwise requires, any reference to:-

         1.2.1    an Act of Parliament or any Part or section or other provision
                  of, or Schedule to, an Act of Parliament shall be construed,
                  at the particular time, as including a reference to any
                  modification, extension or re-enactment thereof then in force
                  and to all instruments, orders or regulations then in force
                  and made under or deriving validity from the relevant Act of
                  Parliament;

         1.2.2    another agreement or any deed or other instrument shall be
                  construed as a reference to that other agreement, deed or
                  other instrument as the same may have been, or may from time
                  to time be, amended, varied, supplemented or novated;

         1.2.3    an "affiliate" means, in relation to any person, any holding
                  company or subsidiary of such person or any subsidiary of a
                  holding company of such person, in each case within the
                  meaning of sections 736, 736A and 736B of the Companies Act
                  1985 as substituted by section 144 of the Companies Act 1989
                  and, if that latter section is not in force at the date of
                  this Agreement, as if such latter section were in force at
                  such date;

          1.2.4 a "Business Day" means any week day (other than a Saturday)  on
               which banks are open for domestic business in the City of London;
               ------------

          1.2.5 a "day" means a period of 24 hours (or such other number  of
               hours as may be  relevant  in the case of  changes for daylight
               saving) ending at 12.00 --- midnight;

          1.2.6 a "holding company" means, in relation to any person  a holding
               company of such person  within the meaning  given to that term in
               Clause 1.2.3; ---------------

         1.2.7    a "month" means a calendar month;

         1.2.8    a "person" includes any individual, partnership, firm,
                  company, corporation, joint venture, trust, association,
                  organisation or other entity, in each case whether or not
                  having separate legal personality;

         1.2.9    a "related undertaking" means, in relation to any person, any
                  undertaking in which such person has a participating interest
                  as defined by section 260(1) of the Companies Act 1985 as
                  substituted by section 22 of the Companies Act 1989 and, if
                  that latter section is not in force at the date of this
                  Agreement, as if such latter section were in force at such
                  date;

         1.2.10 a "subsidiary"  means, in relation to any person,  a subsidiary
               of such person  within the  meaning  given to that term in Clause
               1.2.3; and ----------

         1.2.11   a "year" means a calendar year.

         For all purposes of this Agreement no Party shall be an associate or a
         related undertaking of any other Party only by reason of all or any of
         the share capital of any Party being owned directly or indirectly by
         the Secretary of State.

1.3      Interpretation:

         1.3.1    In this Agreement:-

                  (a)     references to the masculine shall include the feminine
                          and references in the singular shall include
                          references in the plural and vice versa;

                  (b)  references to the word "include" or "including"  are to
                         be construed without limitation;

                  (c)     references to time are to London time;

                  (d)     except where the context otherwise requires,
                          references to a particular Part, Clause, sub-clause,
                          paragraph, sub-paragraph or Schedule shall be a
                          reference to that Part, Clause, sub-clause, paragraph,
                          sub-paragraph or Schedule in or to this Agreement;

                  (e)     except where the context otherwise requires,
                          references in a Schedule to a particular Section,
                          sub-section, Annex or Appendix shall be a reference to
                          that Section, sub-section, Annex or Appendix in or to
                          that Schedule; and

                  (f)     the table of contents, the headings to each of the
                          Parts, Clauses, sub-clauses, paragraphs,
                          sub-paragraphs, Schedules, Sections, sub-sections,
                          Annexes and Appendices are inserted for convenience
                          only and shall be ignored in construing this
                          Agreement.

            1.3.2 With respect to Part XV of and Schedule 21 to this Agreement
                    (but not elsewhere or otherwise):-

                  (a)     in the event that any person is required to give or is
                          entitled to withhold its consent or approval to terms
                          and conditions of this Agreement or an Agreed
                          Procedure or Code of Practice or to any other act,
                          matter or thing under or referred to in this Agreement
                          or has agreed to revise such terms and conditions or
                          an Agreed Procedure or Code of Practice or any
                          dispensation therefrom, such person shall act in good
                          faith and be reasonable in giving or withholding of
                          such consent or approval or in imposing conditions to
                          such consent or approval or in agreeing revised terms
                          and conditions of Part XV of or Schedule 21 to this
                          Agreement or any Agreed Procedure or Code of Practice;
                          and

                  (b)     where any person is required to perform any act or
                          give any consent or notification or do any other
                          thing, it shall, in the absence of any specified time
                          limit, perform, give or do or (as the case may be)
                          notify its withholding of its consent or approval to
                          the same as soon as is reasonably practicable in all
                          the circumstances.

1.4      Hierarchy: If the provisions of an Agreed Procedure, a Code of
         Practice, a Service Line or the Development Policies are inconsistent
         with the provisions of this Agreement, the provisions of this Agreement
         shall prevail to the extent of such inconsistency. If the provisions of
         a Service Line are inconsistent with the provisions of an Agreed
         Procedure or a Code of Practice, the provisions of the Service Line
         shall prevail to the extent of such inconsistency.

1.5               (a) The Parties undertake to review the Agreed Procedures, the
                  Codes of Practice and the Service Lines by no later than the
                  date (the "Review End Date") falling 30 days after the date on
                  which this Clause 1.5 takes effect in accordance with a
                  workplan in form and content agreed by the Executive Committee
                  and the Settlement System Administrator as at the date on
                  which this Clause 1.5 takes effect, such workplan to include
                  the principle that ESIS will provide discussion drafts of the
                  Service Lines to the Executive Committee and that these
                  redrafts will then be the subject of the joint review by ESIS
                  and the Executive Committee.

               (b)  In reviewing  the Agreed  Procedures,  the Codes of Practice
                    and the Service Lines:-

                  (i)     the product of each Service Line shall remain
                          unaltered and if any Agreed Procedure or Code of
                          Practice shall have a product which is part of the
                          current working practice of ESIS but which is not
                          currently in a Service Line, that product shall be
                          incorporated into the relevant Service Line;

                  (ii)    subject to (i) above, each of the Agreed Procedures,
                          the Codes of Practice and the Service Lines shall be
                          brought into line with Parties' working practices
                          current at the date on which this Clause 1.5 takes
                          effect and made consistent inter se.

         (c)      Each of the Parties undertakes to comply at all times with its
                  obligations under or pursuant to the Service Lines
                  notwithstanding that the same are being reviewed as provided
                  in this Clause 1.5.

               (d)  (i) Each of the  Parties  undertakes  to comply at all times
                    with the Agreed Procedures and the Codes of Practice insofar
                    as applicable to such Party provided that:-

                          (A)      subject to (B) below, pending completion of
                                   the review of the Agreed Procedures and Codes
                                   of Practice pursuant to this Clause 1.5, if
                                   Parties' working practices current at the
                                   date on which this Clause 1.5 takes effect
                                   are inconsistent with the terms of any Agreed
                                   Procedure or Code of Practice, such working
                                   practices shall prevail (but without
                                   prejudice and subject to the requirements of
                                   Clause 1.5(b)(i)); and

                          (B)      if the review of a Service Line, Agreed
                                   Procedure or Code of Practice pursuant to
                                   this Clause 1.5 is not completed by the
                                   Review End Date then, until it is completed,
                                   the Parties shall continue to comply with the
                                   Parties' working practices then current.

                  (ii) The Executive Committee shall provide copies of the
Agreed Procedures and Codes of Practice to a Party upon request.

         (e)      Nothing in this Clause 1.5 shall affect Clause 1.4 or any
                  other review of Agreed Procedures, Codes of Practice or
                  Service Lines required or permitted elsewhere pursuant to this
                  Agreement.

1.6      Obligation on Generators with respect to Availability Declarations: In
         respect of each of its Centrally Despatched Generating Units a
         Generator shall submit an Availability Declaration or a re-declared
         Availability Declaration to ensure that its Genset Offered Availability
         and Genset Re-Offered Availability do not exceed at any time the
         maximum Gross/Net generation which it, acting as a prudent operator
         using Good Industry Practice, would reasonably expect to achieve if
         such Centrally Despatched Generating Unit were to be despatched at that
         level. In this Clause 1.6 capitalised terms not defined in Clause 1.1
         shall have the respective meanings given to them in the Pool Rules.

1.7      1998: The provisions of Schedules 22, 23, 24 and 25 shall have effect.

1.8      1998 Framework Agreement: The Parties and the Meter Operator Parties
         agree that, to accommodate the removal of the franchise limit generally
         contained in Condition 2 of the Second Tier Supply Licences scheduled
         for 31st March, 1998 (the "1998 Programme"), changes may be needed to
         this Agreement. The Parties and Meter Operator Parties therefore
         authorise the Chief Executive to maintain a document (the "1998
         Framework Agreement") which shall contain points of principle and text
         relating to the implementation of the 1998 Programme which have been
         approved in principle by either the Executive Committee or Pool Members
         in general meeting. It is the intention of Pool Members that the 1998
         Framework Agreement will be revised as further principles and/or text
         are agreed by the Executive Committee or Pool Members in general
         meeting so that, in good time before 31st March, 1998, the 1998
         Framework Agreement will contain all text necessary to be included in
         this Agreement in order to implement the 1998 Programme.
         Notwithstanding the Agreement of Pool Members or the Executive
         Committee to the inclusion of such principles and/or text in the 1998
         Framework Agreement, it is agreed by the Parties and Meter Operator
         Parties that no part of the 1998 Framework Agreement shall have effect
         or shall alter, amend or replace any part of this Agreement until
         included in this Agreement by way of a supplemental agreement hereto
         and the process in this Clause 1.8 shall not bind or commit any Party
         or Meter Operator Party or otherwise affect in any way the rights and
         discretions of any Party or Meter Operator Party to withhold or qualify
         its agreement to any supplemental agreement to this Agreement.

2.       THE EFFECTIVE DATE

          Commencement:  The rights and  obligations of each of the Parties
          under this Agreement shall commence on the Effective Date.

3.       ADDITIONAL PARTIES

3.1      General: Subject to the following provisions of this Clause 3, the
         Parties shall admit as an additional party to this Agreement any person
         (the "New Party") (not, for the avoidance of doubt, being a successor
         Settlement System Administrator, Pool Funds Administrator, Grid
         Operator or Ancillary Services Provider, to which the provisions of
         Clause 3.11, 3.12, 3.13 or, as the case may be, 3.14 apply) who applies
         to be admitted, in the capacity or, as the case may be, capacities
         requested by the New Party.

3.2      Admission Application: A New Party wishing to be admitted as an
         additional party to this Agreement shall complete an Admission
         Application and shall deliver it to the Executive Committee together
         with the fee (which shall be non-refundable) and other documents (if
         any) therein specified.

3.3      Executive Committee response:

         3.3.1    Upon receipt of any Admission Application duly completed the
                  Executive Committee shall notify (for information only) all
                  Parties and the Director of such receipt and of the name of
                  the New Party.

         3.3.2    Within 60 days after receipt of a duly completed Admission
                  Application from a New Party the Executive Committee shall
                  notify the New Party and the Director either:-

               (a)  that the New Party shall be  admitted  as a Party,  in which
                    event the provisions of Clause 3.6 shall apply; or

               (b)  that  the  Executive  Committee  requires  the New  Party to
                    produce  evidence  satisfactory  to the Executive  Committee
                    ("Additional   Evidence")   demonstrating  the  New  Party's
                    fulfilment  of the admission  conditions  relevant to it set
                    out  in  its  Admission  Application,  in  which  event  the
                    provisions of Clause 3.4 shall apply.

                  If the Executive Committee shall fail so to notify the New
                  Party and the Director, the New Party may within 28 days after
                  the expiry of the said 60 day period refer the matter to the
                  Director pursuant to Clause 3.5, in which event the provisions
                  of that Clause shall apply.

               3.4  Additional  Evidence:  Within 28 days (or such longer period
                    as the Executive  Committee in its absolute  discretion  may
                    allow)  after  the  Executive  Committee  has  given  notice
                    pursuant to Clause 3.3.2(b) the New Party shall:-

               3.4.1provide  the  Executive   Committee   with  the   Additional
                    Evidence,  in which event the provisions of Clause 3.6 shall
                    apply; or

         3.4.2 refer the matter to the Director pursuant to Clause 3.5, in which
event the provisions of that Clause shall apply,

         failing which the New Party's application for admission shall lapse and
         be of no effect and the New Party shall not be, and shall not be
         entitled to be, admitted as a Party consequent upon such application
         (but without prejudice to any new application for admission it may make
         thereafter).

3.5      Reference to the Director:

         3.5.1    If:-

                  (a)     any dispute shall arise between the Executive
                          Committee and a New Party over whether the New Party
                          has fulfilled the admission conditions relevant to it;
                          or

               (b)  the Executive  Committee shall have failed to notify the New
                    Party as  provided  in Clause  3.3  within the 60 day period
                    therein specified,

                  the issue of whether the New Party has fulfilled the admission
                  conditions relevant to it may be referred by way of written
                  application of the New Party, copied to the Executive
                  Committee, to the Director for determination. The
                  determination of the Director, which shall be made within 28
                  days after receipt of the said written application and shall
                  be to the effect set out in paragraph (a) or (b) of Clause
                  3.5.2, shall be final and binding for all purposes. The
                  Director shall publish reasons supporting his determination.

         3.5.2            (a) If the determination is to the effect that the New
                          Party has fulfilled the said admission conditions, the
                          New Party shall be admitted and the provisions of
                          Clause 3.6 shall apply.

                  (b)     If the determination is to the effect that the New
                          Party has not fulfilled the said admission conditions,
                          the New Party's application for admission shall lapse
                          and be of no effect and the New Party shall not be,
                          and shall not be entitled to be, admitted as a Party
                          consequent upon such application (but without
                          prejudice to any new application it may make
                          thereafter).

3.6      Admission: If:-

         3.6.1 the Executive Committee shall notify the New Party and the
Director as provided in Clause 3.3.2(a); or

         3.6.2    following a request for Additional Information pursuant to
                  Clause 3.3.2(b), the New Party provides the same within the
                  period specified in Clause 3.4; or

         3.6.3    the New Party is to be admitted as a Party pursuant to 
Clause 3.5,

         the Executive Committee shall forthwith prepare or cause to be prepared
         an Accession Agreement. Subject to the Executive Committee making all
         notifications and filings (if any) required of it for regulatory
         purposes and obtaining all regulatory consents and approvals (if any)
         required to be obtained by it, the Executive Committee shall instruct
         the Chief Executive or another person authorised by the Executive
         Committee for the purpose to prepare an Accession Agreement and to sign
         and deliver the Accession Agreement on behalf of all Parties other than
         the New Party and the New Party shall also execute and deliver the
         Accession Agreement and, on and subject to the terms and conditions of
         the Accession Agreement, the New Party shall become a Party for all
         purposes of this Agreement with effect from the date specified in such
         Accession Agreement (and, if no such date is so specified, the date of
         such Accession Agreement). The New Party shall pay all costs and
         expenses associated with the preparation, execution and delivery of its
         Accession Agreement. Each Party hereby authorises and instructs the
         Chief Executive and each person authorised for the purpose by the
         Executive Committee to sign on its behalf Accession Agreements and
         undertakes not to withdraw, qualify or revoke such authority and
         instruction at any time. The Executive Committee shall promptly notify
         all Parties and the Director of the execution and delivery of each
         Accession Agreement.

3.7      Additional Agreements: Upon and as a condition of admission as a Party,
         a New Party shall execute and deliver such further agreements and
         documents and shall do all such other acts, matters and things as the
         Executive Committee may reasonably require.

3.8      Application fees: All fees received by the Executive Committee in
         respect of any application by a New Party to become a Party shall be
         used to defray the costs and expenses of the Executive Committee and
         shall be paid to such account as the Executive Committee may direct.
         The application fee shall be (pound)250 or such other amount as the
         Executive Committee may, with the prior approval of the Director, from
         time to time prescribe.

3.9      Compliance: Each Party shall procure that for so long as it is a Party
         it shall at all times satisfy or otherwise comply with the admission
         conditions set out in its Admission Application applicable to it
         (and/or such further or other conditions as the Executive Committee may
         from time to time reasonably specify) and upon request from time to
         time shall promptly provide the Executive Committee with evidence
         reasonably satisfactory to the Executive Committee of such satisfaction
         and compliance.

3.10     Change of capacities:

         3.10.1   Any Founder Generator, any Founder Supplier, any Externally
                  Interconnected Party and any Party admitted as an additional
                  party to this Agreement pursuant to this Clause 3 may, upon
                  application to the Executive Committee and satisfaction of
                  such conditions (if any) as the Executive Committee may
                  reasonably require, change the capacity(ies) in which it
                  participates as a Party.

         3.10.2 If upon receipt of any Admission Application the Executive
Committee shall consider that the New Party should either:-

               (a)  not be admitted  as a Party in the  capacity in which it has
                    applied so to be admitted  but should be admitted in another
                    capacity; or

               (b)  be admitted  both in the capacity in which it has applied so
                    to be admitted and in another capacity,

                  then the Executive Committee shall within the period specified
                  in Clause 3.3.2 notify the New Party and the Director
                  accordingly and shall specify what, if any, additional
                  evidence the Executive Committee requires the New Party to
                  produce to demonstrate its fulfilment of the admission
                  conditions relevant to its admission in such other
                  capacity(ies). The provisions of Clauses 3.4, 3.5 and 3.6
                  shall apply mutatis mutandis but as if the references therein
                  to Additional Evidence were read and construed as references
                  to the said additional evidence.

3.11     Successor Settlement System Administrator: Any successor Settlement
         System Administrator requiring to be admitted as a Party in that
         capacity shall, upon application to the Executive Committee, be so
         admitted by way of Accession Agreement modified insofar as is necessary
         to take account of the capacity in which such successor is to be
         admitted. The provisions of Clause 3.6 shall apply mutatis mutandis to
         any such admission.

3.12 Successor Pool Funds Administrator:  Any successor Pool Funds Administrator
     appointed  in  accordance  with  the  provisions  of  Schedule  15 shall be
     admitted  as a Party in that  capacity  at such time and on such  terms and
     conditions as the Executive Committee may reasonably require.

3.13     Successor Grid Operator: Any successor Grid Operator requiring to be
         admitted as a Party in that capacity shall, upon application to the
         Executive Committee, be so admitted by way of Accession Agreement
         modified insofar as is necessary to take account of the capacity in
         which such successor is to be admitted. The provisions of Clause 3.6
         shall apply mutatis mutandis to any such admission.

3.14     Successor Ancillary Services Provider: Any successor Ancillary Services
         Provider requiring to be admitted as a Party in that capacity shall,
         upon application to the Executive Committee, be so admitted by way of
         Accession Agreement modified insofar as is necessary to take account of
         the capacity in which such successor is to be admitted. The provisions
         of Clause 3.6 shall apply mutatis mutandis to any such admission.



<PAGE>


                                     PART II

                          OBJECTS, REVIEW AND PRIORITY

4.       OBJECTS AND PURPOSE OF THE AGREEMENT

4.1 Principal objects and purpose: The principal objects and purpose of this
Agreement are:-

         4.1.1    to provide a set of rules which, when implemented, will
 quantify:-

                  (a)     the financial obligations owed by certain Pool Members
                          to other Pool Members in respect of the former Pool
                          Members' purchases of electricity produced or
                          delivered by such other Pool Members;

                  (b)     the financial obligations owed by the Grid Operator to
                          the Ancillary Services Provider in respect of the
                          purchase of Ancillary Services; and

                  (c)     the financial obligations owed by the Grid Operator to
                          certain Pool Members in respect of Transport Uplift
                          (exclusive of any element thereof relating to
                          Ancillary Services);

         4.1.2    to establish, maintain and operate efficiently computer and
                  other systems (whether or not computer related) which will
                  implement the rules referred to in Clause 4.1.1; and

         4.1.3    by following the procedures for amending this Agreement set
                  out or referred to herein, to keep under review and promote
                  the implementation, administration and development of the
                  systems referred to in Clause 4.1.2 in a way which takes into
                  account, and balances, the respective interests of actual and
                  potential generators and suppliers of electricity and of
                  consumers of electricity and providers of Ancillary Services.

4.2  Interpretation:  In the construction and  interpretation  of this Agreement
     due regard  shall be had to the  principal  objects  and purpose set out in
     Clause 4.1.

4.3      Exercise of rights: In exercising its rights under this Agreement, each
         Party shall exercise and enforce such rights and perform its
         obligations in good faith having due regard both to its own legitimate
         commercial interests and the principal objects and purpose set out in
         Clause 4.1.

5.       TRANSITIONAL ARRANGEMENTS AND REVIEWS

5.1      [Not used].

         Transitional Arrangements

5.2      Transitional Arrangements: The Parties acknowledge and agree that the
         arrangements described or referred to in the first column of Schedule
         12 ("Transitional Arrangements") have been designed as transitional
         arrangements only. The Parties undertake with each other to use all
         reasonable endeavours (including, where appropriate, through their
         representation on the Executive Committee) to give effect to the
         principle (the "New Principle") set opposite the relevant Transitional
         Arrangement in the second column of Schedule 12 by the date set
         opposite such Transitional Arrangement in the third column of that
         Schedule. Clauses 5.9 to 5.14 (inclusive) shall have effect in relation
         to all Transitional Arrangements.

         Regular Reviews

5.3      Conduct of reviews: Within a period (the "Review Period") of six months
         beginning on each of the dates referred to in Clause 5.5 (the "Review
         Dates") the Executive Committee shall review in consultation with the
         Settlement System Administrator and the Pool Auditor the operation in
         practice of this Agreement and the Settlement System to assess whether
         the principal objects and purpose set out in Clause 4.1 are being or
         could be better achieved. In carrying out each such review the
         Executive Committee shall give due consideration to any matter referred
         to it by any Party, the Pool Auditor, the Director or the Secretary of
         State. Clauses 5.5 to 5.15 (inclusive) shall have effect in relation to
         the reviews described in this Clause 5.3, and such reviews shall be in
         addition to the reviews associated with the Transitional Arrangements.

5.4      [Not used].

5.5      Review Dates: The Review Dates are:-

5.5.1 those dates falling 12 and 24 months after the Effective Date;

5.5.2those  dates  falling  on the last  day of each  successive  period  of two
     years, the first such period beginning on 30th March, 1992; and

         5.5.3 such other date(s) as the Pool Members in general meeting may
from time to time determine.

5.6      Reports: Promptly (and in any event within one month) after the end of
         each Review Period the Executive Committee shall prepare or cause to be
         prepared a written report of its review containing such matters as are
         referred to in Clause 5.7 and a copy of such report shall be sent to
         each Party, the Pool Auditor, the Director and the Secretary of State.

5.7      Content of reports: Each report referred to in Clause 5.6 shall set
 out:-

         5.7.1    the scope of the review conducted;

         5.7.2    the matters reviewed and the investigations and enquiries 
made;

         5.7.3    the findings of such review;

         5.7.4    the recommendations (if any) as to the changes to be made to
                  this Agreement and the Settlement System so as to achieve or
                  better to achieve the principal objects and purpose set out in
                  Clause 4.1;

         5.7.5    the effect which any such recommendation referred to in Clause
                  5.7.4 would, if implemented, have on the role of the Pool
                  Auditor under this Agreement and any comments of the Pool
                  Auditor thereon;

         5.7.6 the financial effects (if any) which any such recommendation
referred to in Clause 5.7.4 would, if implemented, have on Pool Members; and

         5.7.7 such other matters as the Executive Committee shall consider
appropriate.

         If any Committee Member shall disagree with any of the recommendations
         made in any such report, such report shall set out the reasons for such
         disagreement and any alternative proposals of such Committee Member.

5.8      General Meeting approval: Within two months after the end of each
         Review Period the Executive Committee shall convene an extraordinary
         general meeting of Pool Members to consider and, if thought fit,
         approve (in whole or in part) the recommendations (the
         "Recommendations") made in the report referred to in Clause 5.6. If any
         Recommendation is so approved (an "Approved Recommendation") then,
         subject to Clause 13.5, the provisions of Clauses 5.9 to 5.14
         (inclusive) shall have effect in relation thereto. If any
         Recommendation is not so approved, no further action shall be taken in
         respect thereof arising from such report.

         Works Programme

5.9  Works  Programme:  In respect  of each  Transitional  Arrangement  and each
     Approved Recommendation the Executive Committee shall:-

         5.9.1 in the case of a Transitional Arrangement, by the date set
opposite such Transitional Arrangement in the fourth column of Schedule 12; and

         5.9.2    in the case of an Approved Recommendation, by the date
                  stipulated by the Pool Members in general meeting or (if no
                  date is stipulated) within a reasonable time,

         prepare (or cause to be prepared) in consultation with the Pool Auditor
         a programme (the "Works Programme", which expression shall include any
         associated documentation hereinafter referred to in this Clause 5.9)
         which programme shall (unless otherwise resolved by the Executive
         Committee after consultation with those Parties not being Pool Members
         who might reasonably be expected to be affected by the Works Programme)
         include:-

         (a)      a detailed timetable for the implementation of the New
                  Principle or (as the case may be) the Approved Recommendation,
                  including (where appropriate) a series of milestone and/or
                  target dates for the achievement of specified parts of such
                  programme;

         (b)      a full explanation of how such New Principle or Approved
                  Recommendation is to be implemented, including a detailed
                  analysis of such New Principle or Approved Recommendation and
                  the objectives which it is intended to achieve, the work
                  involved, the resources required and the amendments likely to
                  be required to this Agreement, the Specification and to any
                  other relevant agreement or document and of any changes
                  required to be made to the Software or the Hardware; and

         (c)      an estimate of the cost of such implementation supported by a
                  breakdown of such cost and a detailed commentary on each
                  element thereof together with proposals for the recovery of
                  such cost,

         and (unless otherwise resolved by the Executive Committee after
         consultation with those Parties not being Pool Members who might
         reasonably be expected to be affected by the Works Programme) shall be
         supported by:-

(i)  any draft legal  documentation  required  to give effect to the  amendments
     referred to in paragraph (b) above; and

(ii) the outline form of agreement  appointing  the Works  Programme  Manager as
     project manager for the  implementation  of the Works Programme (which form
     shall,  where the Settlement  System  Administrator is or, in the Executive
     Committee's  opinion,  is likely to be the Works Programme Manager or where
     the Works Programme  involves changes to the Specification or the Software,
     be prepared in consultation with the Settlement System Administrator).

5.10     Review: The Executive Committee shall arrange for a copy of each Works
         Programme to be sent to each Party, the Pool Auditor and the Director
         for review under cover of a letter setting a deadline for receipt of
         comments on such Works Programme (being no earlier than one month and
         no later than two months after the date of despatch of copies of the
         Works Programme for comment) and indicating to whom such comments
         should be addressed. Within such time as is reasonable after the
         deadline set for receipt of comments but, in any event, within two
         months thereafter, the Executive Committee shall revise (or cause to be
         revised) the Works Programme to take into account (so far as it
         considers desirable) the comments received from the Parties, the Pool
         Auditor and the Director.

5.11     General Meeting referral: As soon as a Works Programme has been revised
         as provided in Clause 5.10 (or, if the Executive Committee considers no
         such revision desirable, within one month after the deadline set under
         Clause 5.10 for receipt of comments on such Works Programme), the
         Executive Committee shall convene an extraordinary general meeting of
         Pool Members to consider and, if thought fit, approve such Works
         Programme (with or without amendment).

5.12     Approval of the Works Programme:

         5.12.1   A Works Programme shall not be given effect to unless and
                  until approved by the Pool Members in general meeting.
                  Additionally, if a Works Programme or any part thereof shall
                  involve a matter requiring the approval of Generators or
                  Suppliers in separate general meeting under Clause 13.2 (a
                  "Class Issue"), then such Works Programme shall not be given
                  effect to unless and until approved by the relevant class of
                  Pool Members.
                           -----------
                  If a Works Programme shall not be duly approved (with or
                  without amendment), then the Executive Committee shall revise
                  (or cause to be revised) the same to take account of the
                  wishes of the Pool Members in general meeting and/or (as the
                  case may be) in separate general meeting and thereafter such
                  revised Works Programme shall be re-submitted to the Pool
                  Members in general meeting and, if such revised Works
                  Programme or any part thereof shall involve a Class Issue, to
                  the relevant Pool Members in separate general meeting, in each
                  case for approval (with or without amendment). This revision
                  and re-submission procedure shall be repeated as often as may
                  be required until such time as the Pool Members in general
                  meeting and, as necessary, in separate general meetings
                  approve the Works Programme.

         5.12.2   Notwithstanding the provisions of Clause 5.12.1, the Executive
                  Committee and each Party shall be entitled at any time prior
                  to the approval of a Works Programme by the Pool Members in
                  general meeting and (where required under Clause 5.12.1) by
                  the relevant class of Pool Members in separate general meeting
                  to apply to the Director requesting that the implementation of
                  the New Principle or (as the case may be) the Approved
                  Recommendation should not proceed or should not proceed in the
                  manner set out by such Works Programme and, in such event,
                  effect shall not be given to the Works Programme pending the
                  determination of the Director and then (subject as provided in
                  Clause 5.14) only to the extent (if at all) that the Director
                  in his absolute discretion shall approve.

5.13     Implementation: The implementation of all Works Programmes shall be
         project managed by the Settlement System Administrator or (if the
         Settlement System Administrator is unable or unwilling so to project
         manage) such other person as the Executive Committee shall nominate
         (the "Works Programme Manager") upon and subject to such terms and
         conditions as are agreed by the Executive Committee with the Works
         Programme Manager and the cost thereof recovered in accordance with the
         terms of the relevant Works Programme. Cost overruns, liquidated
         damages and all other financing costs, incentives and penalties shall
         be financed, levied and/or paid at the times and in the manner provided
         for in such Works Programme. Costs incurred by the Settlement System
         Administrator shall be recovered in accordance with the Charging
         Procedure. The Executive Committee shall require the Works Programme
         Manager to prepare and submit to the Executive Committee no less
         frequently than quarterly a written report giving a detailed commentary
         on the progress of implementing each Works Programme, including a
         comparison of actual progress made against the timetable set by such
         Works Programme and of actual costs incurred against budgeted costs.

5.14     Pool Auditor's approval: At the completion of the work required by each
         Works Programme but prior to effect being given to the New Principle or
         (as the case may be) the Approved Recommendation the Executive
         Committee shall request the Pool Auditor to issue an opinion in form
         and content satisfactory to the Executive Committee confirming to all
         Parties and the Director that the Pool Auditor has inspected and tested
         the arrangements giving effect to the New Principle or (as the case may
         be) the Approved Recommendation and is satisfied (without qualification
         or reservation) that such arrangements do give effect to the New
         Principle or Approved Recommendation in the manner required by the
         Works Programme. The Executive Committee shall use all reasonable
         endeavours to make (or procure to be made) such modifications to such
         arrangements as are necessary to enable the Pool Auditor to give its
         opinion without qualification or reservation, and the costs of any such
         modification shall be recovered in accordance with the relevant Works
         Programme. If the Pool Auditor's opinion can be given only with
         qualification or reservation, the Executive Committee shall convene an
         extraordinary general meeting of Pool Members and, where required under
         Clause 5.12.1, a separate general meeting of Generators and/or (as the
         case may be) Suppliers to consider and, if thought fit, approve such
         arrangements in the knowledge that the Pool Auditor's opinion can be
         given only with qualification or reservation. Subject to the provisions
         of Clause 6, each of the Parties undertakes with each of the other
         Parties promptly following the issue of the Pool Auditor's opinion
         (but, where such opinion has a qualification or reservation, only after
         approval as aforesaid by the Pool Members in general meeting and, where
         required under Clause 5.12.1, by the relevant class of Pool Members in
         separate general meeting) to execute and deliver any amending agreement
         or other documents and to take such other action as may reasonably be
         required of it to give effect to such arrangements, in any such case at
         its own cost and expense.

5.15 Secretary  of State's  approval:  In respect  of the  Secretary  of State's
     decision  as set out in his  letter  of 11th  December,  1991 to the  Chief
     Executive  concerning the selling of the output of plant by Generators with
     on-site demand under this Agreement:-

         5.15.1   each of the Parties undertakes with each of the other Parties
                  forthwith to take all such steps (including as to the
                  execution of any document) as may be required to give full
                  force and effect to the decision of the Secretary of State.
                  Each of the Parties shall take all such steps at its own cost
                  and expense except that the Settlement System Administrator,
                  the Pool Funds Administrator and the Ancillary Services
                  Provider shall be entitled to recover any such costs and
                  expenses in accordance with the terms of this Agreement; and

         5.15.2   each of the Parties acknowledges and agrees that damages would
                  not be an adequate remedy for any failure by it to give in
                  accordance with Clause 5.15.1 full force and effect to the
                  decision of the Secretary of State pursuant to this Clause
                  5.15 and that, accordingly, each of the other Parties and the
                  Director shall be entitled to the remedies of injunction,
                  specific performance and other equitable relief for any
                  threatened or actual such failure and that no proof of special
                  damages shall be necessary for enforcement.

5.16     Director's modifications:

5.16.1 Where the  Monopolies  and  Mergers  Commission  has issued a report on a
     reference under section 12 of the Act which:-

                  (a)     includes conclusions to the effect that any of the
                          matters specified in the reference operate, or may be
                          expected to operate, against the public interest;

                  (b) specifies effects adverse to the public interest which
those matters have or may be expected to have;

                  (c)     includes conclusions to the effect that those effects
                          could be remedied or prevented by modifications of the
                          conditions of any Licence and such modifications would
                          require a change to the Pooling and Settlement
                          Agreement; and

                  (d)  specifies modifications by which those effects could be
                         remedied or prevented,

                  the Director may, subject to the following provisions of this
                  Clause, require such modifications to this Agreement as are
                  requisite for the purpose of remedying or preventing the
                  adverse effect specified in the report.

         5.16.2   Before requiring modifications to be made pursuant to this
                  Clause, the Director shall have regard to the modifications
                  specified in the report. Further, the Director shall not, and
                  shall not be entitled to, require a modification to be made to
                  this Agreement which modification could not have been achieved
                  lawfully through a modification of one or more Licences
                  consequent upon the report (but as if, for this purpose, only
                  those Parties who are holders of Licences were parties to this
                  Agreement).

         5.16.3 Before requiring modifications to be made pursuant to this
Clause, the Director shall give notice:-

                    (a)  stating that he proposes to make the  modifications and
                         setting out their effect;

                    (b)  stating  the  reasons  why  he  proposes  to  make  the
                         modifications; and

                    (c)  specifying the period (not being less than 28 days from
                         the date of  publication  of the notice)  within  which
                         representations  or  objections  with  respect  to  the
                         proposed modifications may be made,

                  and shall consider any representations or objections from any
person which are duly made and not withdrawn.

         5.16.4   A notice under Clause 5.16.3 shall be given:-

                  (a)     by publishing the notice in such manner as the
                          Director considers appropriate for the purpose of
                          bringing the matters to which the notice relates to
                          the attention of persons likely to be affected by the
                          making of the modifications; and

                  (b) by serving a copy of the notice on each Party, the
Executive Committee and the Pool Auditor.

         5.16.5   After considering any representations or objections which are
                  duly made and not withdrawn pursuant to Clause 5.16.3, the
                  Director may by notice published as provided in Clause
                  5.16.4(a) and served on those referred to in Clause 5.16.4(b)
                  specify the modifications to this Agreement which he requires
                  to be made and the date upon which such modifications are to
                  take effect and each of the Parties undertakes with each other
                  of the Parties promptly to take all such steps as may be
                  necessary to give full force and effect to the modifications
                  so required. Any costs incurred by the Settlement System
                  Administrator in giving effect to such modifications shall be
                  recovered in accordance with the Charging Procedure.

6.       ENTRENCHED PROVISIONS, INCONSISTENCIES AND CONFLICTS

         Entrenched Provisions

6.1      Secretary of State's consent: The Parties acknowledge and agree that,
         notwithstanding any other provision of this Agreement, no amendment to
         or variation of any of the matters dealt with in any of the following
         provisions of this Agreement shall take effect without the prior
         written consent of the Secretary of State:-

         6.1.1    Clause 5.15, Part XIV and Section 28 of Schedule 9; and

         6.1.2    this Clause 6.1.

6.2      Director's consent: The Parties acknowledge and agree that,
         notwithstanding any other provision of this Agreement, no amendment to
         or variation of any of the matters dealt with in any of the following
         provisions of this Agreement shall take effect without the prior
         written consent of the Director:-

         6.2.1(a) Clauses 3.5, 4, 5.12.2, 5.15, 5.16, 6.11, 11, 13, 15.6, 53.6,
         67.3,  67.4,  83,  84 and 85 and  Section  8 of  Schedule  14 and
         Section 7 of Schedule 20;

          (b)  sub-section 19.1 of Schedule 14; and

          (c)  paragraphs 1.4, 2.2.3,  3.3, 3.4, 3.7, 4.4.1,  6.4, 6.5, 17.3 and
               22.5 of Schedule 21;

         6.2.2 without prejudice to Clause 6.2.3, the Pool Rules or any of them,
other than an amendment or variation which:-

          (a)  involves  only a change of a  technical  nature  in the  systems,
               rules and procedures contemplated by this Agreement; and

          (b)  will not  increase  the  liability  or decrease the rights of any
               Party under this Agreement beyond what may reasonably be regarded
               as de minimis in relation to such Party,

                  but in any event including Section 22 thereof;

         6.2.3    any provision of this Agreement which requires or permits any
                  matter to be referred to the Director for approval, consent,
                  direction or decision or confers any rights or benefits upon
                  the Director; and

         6.2.4    this Clause 6.2.

6.3      Settlement System Administrator's consent: The Parties acknowledge and
         agree that, notwithstanding any other provision of this Agreement,
         insofar as directly affects in any material respect the rights,
         benefits, duties, responsibilities, liabilities and/or obligations of
         the Settlement System Administrator no amendment to or variation of any
         of the matters dealt with in any of the following provisions of this
         Agreement shall take effect:-

          6.3.1without  the  prior  written  consent  of the  Settlement  System
               Administrator:-

          (a)  the  definitions in Clause 1.1 of "Agreed  Procedure",  "Charging
               Procedure",  "Code of Practice",  "Force Majeure", "Good Industry
               Practice", "Hardware", "SSA Arrangements" and "SSA System";

          (b)  Clauses 6.9, 7.3, 7.6, 9.5, 10.9, 10.10,  19.4, 34.1, 34.2, 35.3,
               35.6, 36.2, 37, 66, 68, 69, 74 and 78.2;

          (c)  Schedule 4;

          (d)  Sections  1.6  (and  its  application  to any  other  Section  of
               Schedule 9), 1.7 and 3 of Schedule 9; and

          (e)  this Clause 6.3;

         6.3.2 without the prior written consent of the Settlement System
Administrator (such consent not to be unreasonably withheld or delayed):-

          (a)  Clauses 18.1.2,  18.1.4,  19.5, 41, 45, 47.1,  47.3,  48.1, 48.2,
               48.9, 60, 70, 71.1, 71.4 and 71.5;

          (b)  Part XXII (other than Clauses 74 and 78.2);

          (c)  Section 30 of, and Appendix 4 to, Schedule 9;

          (d)  Section 2(b) of Part C to Schedule 17; and

          (e)  paragraphs 4 to 16 (inclusive), 18, 19, 21 and 22 of Schedule 21.

          6.4  Pool Funds Administrator's  consent: The prior written consent of
               the Pool Funds  Administrator may be needed to certain amendments
               to or variations of this Agreement, as provided in Schedule 15.

6.5      Grid Operator's consent: The Parties acknowledge and agree that,
         notwithstanding any other provision of this Agreement, insofar as
         directly affects in any material respect the rights, benefits, duties,
         responsibilities, liabilities and/or obligations of the Grid Operator,
         no amendment to or variation of any of the matters dealt with in any of
         the following provisions shall take effect:-

         6.5.1    without the prior written consent of the Grid Operator:-

          (a)  Clauses 6.9, 7.3, 7.6, 9.5, 10.9, 10.10, 19.4, 25, 37.3, 47 to 50
               (inclusive), 66, 68, 69, 72, 74 and 78.2;

          (b)  sub-section 3.1 of Appendix 2 to Schedule 9; and

          (c)  this Clause 6.5; and

         6.5.2    without the prior written consent of the Grid Operator (such
                  consent not to be unreasonably withheld or delayed), any other
                  provision of this Agreement,

         Provided that the references to Parties and to the Grid Operator in
         this Clause 6.5 shall be construed as if they were references to such
         terms prior to the creation of Meter Operator Parties and the
         associated amendments to this Agreement, but this shall be without
         limitation to any right of the Grid Operator to consent to any
         amendment or variation to this Agreement under this Clause 6.5.

6.6      Ancillary Services Provider's consent: The Parties acknowledge and
         agree that, notwithstanding any other provision of this Agreement,
         insofar as directly affects in any material respect the rights,
         benefits, duties, responsibilities, liabilities and/or obligations of
         the Ancillary Services Provider, no amendment to or variation of any of
         the following provisions shall take effect:-

          6.6.1 without  the prior  written  consent of the Ancillary Services
               Provider:-

          (a)  Clauses 6.9, 7.3, 7.6, 9.5, 10.9, 10.10,  19.4, 25, 52.3, 66, 68,
               69, 72, 74 and 78.2;

          (b)  Part XI and the  provisions  expressly  incorporated  therein by
               reference;

          (c)  Sections 1.8, 23, 24.8 and 28 of Schedule 9; and

          (d)  this Clause 6.6; and

         6.6.2    without the prior written consent of the Ancillary Services
                  Provider (such consent not to be unreasonably withheld or
                  delayed), any other provision of this Agreement.

6.7      Amendments generally:

         6.7.1    The following provisions of this Clause 6.7 are without
                  prejudice to the rights, powers and privileges of the
                  Secretary of State and the Director under the Act or any
                  Licence or otherwise howsoever.

         6.7.2    In relation to Schedule 4 (including its Appendix), and save
                  as provided in Clause 6.7.3, where that Schedule provides for
                  an amendment to the SSA Arrangements, the Menus of Prices or
                  the Variation Menus (or any or any part thereof) to be agreed
                  between certain designated persons and those persons agree in
                  writing the amendment to be made, then the SSA Arrangements,
                  the Menu of Prices or, as the case may be, the Variation Menus
                  (or the relevant one or part thereof) shall be so amended
                  without the need for any other Party to execute or deliver any
                  amending or confirmatory document and each Party hereby
                  consents to such amendments being made in such a manner and
                  undertakes not to withdraw that consent.

         6.7.3 In the following cases the amendment procedure set out in Clause
6.7.2 shall itself be modified as hereinafter provided:-

          (a)  if Schedule 4 refers to "formal  documentation"  being  agreed to
               give effect to the amendment,  an amending  agreement executed by
               all Parties shall be required;

          (b)  if the consent of a particular  person is required to be obtained
               under Clauses 6.1 to 6.6  (inclusive),  the  amendment  shall not
               take effect until that consent has been obtained.

         6.7.4    Subject to:-

          (a)  any consent of a particular  person required to be obtained under
               Clauses 6.1 to 6.6 (inclusive) being obtained;

          (b)  the requirements of Clauses 6.7.5 and 13.2,

                  and save as provided otherwise in this Agreement, any
                  amendment to or variation of this Agreement shall be effective
                  if approved by Pool Members in general meeting pursuant to
                  Clause 13.1 or 13.2 and all Parties agree promptly to execute
                  and deliver all agreements and other documentation and to do
                  all such other acts, matters and things as may be necessary to
                  give effect to such amendment or variation.

          6.7.5 Where any change is proposed to be made to this Agreement which,
               if made:-

                  (a) would introduce provisions dealing with matters not then
dealt with in or expressly contemplated by this Agreement; and

                  (b)     would in any material respect directly affect the
                          rights, benefits, duties, responsibilities,
                          liabilities and/or obligations under this Agreement of
                          the Settlement System Administrator, the Grid
                          Operator, the Ancillary Services Provider and/or any
                          Externally Interconnected Party,

                  such change shall not be made without the prior written
                  consent of the relevant one of them (in each case not to be
                  unreasonably withheld or delayed) provided that the reference
                  to the Grid Operator in this Clause 6.7.5 shall be construed
                  as if it was a reference to such term prior to the creation of
                  Meter Operator Parties and the associated amendments to this
                  Agreement, but this shall be without limitation to any right
                  to consent to any amendment or variation of this Agreement
                  under this Clause 6.7.5.

         Inconsistencies and Conflicts

          6.8  Internal inconsistencies  and  conflicts:  In the  event  of any
               inconsistency or conflict:-

         6.8.1 the Pool Rules shall prevail over the other provisions of this
Agreement (except Clause 4);

          6.8.2 the  provisions  of  this Agreement shall  prevail  over  the
               Specification; and

         6.8.3    the Specification shall prevail over the Software,

         and the Parties shall use all reasonable endeavours promptly to secure
the elimination of such inconsistency or conflict.

6.9      External inconsistencies and conflicts:

         6.9.1    Each of the Parties hereby acknowledges and agrees the
                  desirability of achieving and maintaining consistency and
                  absence of conflict between the provisions of this Agreement
                  and the Grid Code but recognises that, due principally to the
                  different functions and objectives of this Agreement and the
                  Grid Code, the fact that there may be Parties who are not
                  bound by the Grid Code and the different procedures in this
                  Agreement and the Grid Code for review of their respective
                  terms, it will not in all circumstances be possible to avoid
                  inconsistency or conflict.

         6.9.2    Where at the Effective Date there is an inconsistency or
                  conflict between the provisions of this Agreement and the Grid
                  Code the Executive Committee shall first consider the matter
                  and make recommendations and thereafter the Parties shall
                  negotiate in good faith to eliminate such inconsistency and/or
                  conflict having regard to the different functions and
                  objectives of the Grid Code and this Agreement.

         6.9.3    Each of the Parties shall use its reasonable endeavours to
                  ensure that where any change to this Agreement is proposed to
                  be made which may reasonably be expected to require a change
                  to the Grid Code (or vice versa) such change is brought by the
                  Executive Committee to the attention of the Grid Code Review
                  Panel in good time to enable it to consider what corresponding
                  change, if any, should be made to the Grid Code or (as the
                  case may be) this Agreement. In any such consideration, the
                  Parties acknowledge and agree that it would be desirable in
                  the event of any inconsistency or conflict between the
                  provisions of this Agreement and the Grid Code if regard were
                  had by the Grid Code Review Panel to the principles set out in
                  Clause 6.9.4.

         6.9.4    The principles referred to in Clause 6.9.3 are that:-

                  (a)     where by reason of any inconsistency or conflict the
                          security, quality of supply and/or safe operation of
                          the NGC Transmission System under both normal and/or
                          abnormal operating conditions would necessarily be
                          compromised and/or the Grid Operator would necessarily
                          be in breach of its obligations under the Act or its
                          Transmission Licence, the provisions of this Agreement
                          should be made to conform (to the extent of such
                          inconsistency or conflict) to those of the Grid Code;
                          and

                  (b)     in any other case, where by reason of such
                          inconsistency or conflict there is or is likely to be
                          a material financial effect on any class of Pool
                          Members or on all or a significant number of Pool
                          Members, the provisions of the Grid Code should be
                          made to conform (to the extent of such inconsistency
                          or conflict) to those of this Agreement.

         6.9.5 The Parties acknowledge that changes to the Grid Code are
required to be approved by the Director.

         6.9.6    Where there is any conflict or inconsistency between the Grid
                  Code and the Pool Rules, no Party shall be liable hereunder or
                  under the Grid Code as a result of complying with its
                  obligations under this Agreement or under the Grid Code.

          6.10 Breaches  of the Pool  Rules:  If at any time any Party  believes
               that there has been a breach of the Pool Rules,  such Party shall
               promptly report the same in writing to the Executive Committee.

6.11     Director's requests: The Executive Committee shall:-

          (i)  give due and prompt consideration to any matter referred to it in
               writing by the Director;

         (ii) advise the Director in writing of any decision or action of the
Executive Committee in relation to such matter;

         (iii) provide the Director in writing with an explanation in reasonable
detail of the reasons for such decision or action; and

         (iv)     if reasonably requested by the Director (having regard, in
                  particular, to the resources available to the Executive
                  Committee), in relation to any proposal by the Director for a
                  change to any provision of this Agreement provide or procure
                  the provision of advice and assistance to the Director as soon
                  as reasonably practicable as to the implications of the change
                  and the actions necessary to implement it (including any
                  relevant feasibility study).



<PAGE>


                                    PART III

                      POOL MEMBERSHIP AND GENERAL MEETINGS

7.       INTRODUCTION

          7.1  Obligations  contractually binding: Each Pool Member acknowledges
               and agrees that it is bound to each other Pool Member as a matter
               of  contract  and will  comply  with its  obligations  under this
               Agreement.

7.2      Externally Interconnected Parties: Each Externally Interconnected Party
         acknowledges and agrees that it is bound to each Pool Member as a
         matter of contract and undertakes to comply with the Pool Rules so far
         as they may be applicable to it and each Pool Member acknowledges and
         agrees that it is bound to each Externally Interconnected Party as a
         matter of contract and will comply with its obligations under this
         Agreement.

7.3      Parties not Pool Members: The Settlement System Administrator, the Pool
         Funds Administrator, the Grid Operator and the Ancillary Services
         Provider shall not be Pool Members and shall not be bound as against
         other Pool Members or the Executive Committee except as expressly
         provided for in this Agreement, the Escrow Agreement and the Funds
         Transfer Agreement in their respective roles as Settlement System
         Administrator, Pool Funds Administrator, Grid Operator and Ancillary
         Services Provider.

7.4      Pool Rules:

         7.4.1    The Pool Rules as at 1st April, 1996 are set out in Schedule
                  9. The Settlement System calculations shall be carried out on
                  the basis of the Settlement System and the Pool Rules.

         7.4.2    The Pool Rules shall be developed under the control of the
                  Executive Committee. Subject to Clause 6, the Executive
                  Committee may at any time and from time to time change all or
                  any of the Pool Rules upon notification to all Parties and
                  Meter Operator Parties, and any such change shall be binding
                  on all Parties and Meter Operator Parties without further
                  action being required on the part of any person.

7.5      Pool Member's obligations:

         7.5.1    Save as otherwise expressly provided in this Agreement, the
                  obligations of each Pool Member under this Agreement are
                  several and a Pool Member shall not be responsible for the
                  obligations or liabilities of any other Pool Member. The
                  failure of any Pool Member to carry out all or any of its
                  obligations under this Agreement shall not relieve any other
                  Pool Member of all or any of its obligations hereunder.

         7.5.2    In respect of those obligations of a Pool Member (the
                  "Indemnifying Pool Member") under this Agreement which are
                  expressed to be several, the Indemnifying Pool Member shall
                  indemnify and keep indemnified each other Pool Member from and
                  against all losses, costs (including legal costs) and expenses
                  which such other Pool Member may suffer or incur as a result
                  of being held liable by operation of law (or contesting any
                  such liability) for the performance or non-performance of all
                  or any of such obligations of the Indemnifying Pool Member.

7.6      Information: In respect of all data and other information which a Pool
         Member or an Externally Interconnected Party (not being a Pool Member)
         is required to notify to the Settlement System Administrator under or
         pursuant to this Agreement (other than (i) Metered Data (as defined in
         paragraph 3.1.2 of Schedule 9) and (ii) pursuant to paragraph 2.3.2 of
         Schedule 9, the relevant Pool Member or (as the case may be) Externally
         Interconnected Party shall use all reasonable endeavours to ensure that
         all such data and other information is complete and accurate in all
         material respects.

8.       POOL MEMBERSHIP

8.1  Initial  Pool  Members:  The  initial  Pool  Members  shall be the  Founder
     Generators and the Founder Suppliers.

8.2      Additional Pool Members:

         8.2.1    Subject to the following provisions of this Clause 8.2 and
                  Clause 8.13 and to the fulfilment by the Party concerned of
                  the conditions set out or referred to in Clause 8.3 (the "Pool
                  Membership Conditions"), any Party shall, upon application to
                  the Executive Committee, be admitted as a Pool Member.

         8.2.2    For the purposes of this Clause 8, "Party" shall include any
                  person who is applying to be admitted as a Party pursuant to
                  Clause 3 contemporaneously with being admitted as a Pool
                  Member but shall exclude the Settlement System Administrator,
                  the Pool Funds Administrator, the Grid Operator and the
                  Ancillary Services Provider.

         8.2.3    Subject to Clause 8.2.4, the admission of a Party as a Pool
                  Member shall take effect on the date (the "Admission Date")
                  specified by the Executive Committee (with the prior agreement
                  of the Settlement System Administrator) in a notice given by
                  the Executive Committee to the relevant Party no later than 28
                  days after the Satisfaction Date, provided that the Admission
                  Date shall be a date falling no earlier than the Satisfaction
                  Date and (unless otherwise agreed by the Executive Committee,
                  the Settlement System Administrator and such Party) no later
                  than 90 days after the Satisfaction Date. In default of such
                  notification being given by the Executive Committee within the
                  said 28 days, the admission shall take effect on the day
                  falling 35 days after the Satisfaction Date. For the purposes
                  of this Clause, the "Satisfaction Date" shall be the day on
                  which the last of the Pool Membership Conditions required to
                  be fulfilled by such Party shall have been fulfilled by it.

         8.2.4    No person shall be admitted as a Pool Member unless prior to
                  or contemporaneously with such admission it shall have been or
                  (as the case may be) shall be admitted as a Party.

         8.2.5    Prior to a Party's admission as a Pool Member the Executive
                  Committee shall, where appropriate, determine and notify the
                  relevant Party of the amount of Security Cover (if any) to be
                  provided by such Party.

8.3      Pool Membership Conditions:

         8.3.1    Where a person has been admitted as a Party pursuant to Clause
                  3 otherwise than contemporaneously with being admitted as a
                  Pool Member pursuant to Clause 8, the Pool Membership
                  Conditions applicable to it shall (unless otherwise determined
                  by the Director upon the application of such person or the
                  Executive Committee) be those that would have been applicable
                  to it if it had applied to be admitted as a Pool Member at the
                  date of its admission as a Party and, subject as aforesaid,
                  such person shall not be required to fulfil any further or
                  other Pool Membership Conditions introduced after such date
                  unless the applicant notifies the Executive Committee in
                  writing prior to or contemporaneously with its application for
                  admission as a Pool Member that it wishes such further or
                  other conditions to apply, in which case the Pool Membership
                  Conditions applicable to it shall (subject as aforesaid) be
                  those applicable on the date of its application for admission
                  as a Pool Member.

         8.3.2 The Pool Membership Conditions required to be fulfilled by a
Party prior to its admission as a Pool Member are:-

               (a)  the due  completion  by the  Party and the  delivery  to the
                    Executive Committee of a Pool Membership Application;


               (b)  in respect of any Metering  System required to be taken into
                    account for the purposes of Settlement  and which relates to
                    the Party, the provision of evidence reasonably satisfactory
                    to the Executive Committee that:-

                    (i)  there is a Registrant and an Operator for such Metering
                         System;

                          (ii)     such Registrant has provided to the
                                   Settlement System Administrator the
                                   information required for standing data
                                   purposes as required by this Agreement or the
                                   relevant Agreed Procedure; and

                          (iii)    such Metering System conforms with the
                                   requirements of Part XV, all relevant Agreed
                                   Procedures and all Codes of Practice and is
                                   compatible with the Settlement System;

                  (c)     the Party has entered into and has in full force and
                          effect all appropriate Connection Agreements or, if
                          the Party is applying to be admitted as an External
                          Pool Member, that all appropriate Connection
                          Agreements with the relevant Externally Interconnected
                          Party in relation to the relevant Interconnection are
                          in full force and effect;

                  (d)     the provision of such information as the Executive
                          Committee may reasonably require to enable the
                          Executive Committee to ascertain whether any of the
                          provisions of Clause 11.4 are applicable to that
                          Party, to determine whether that Party is an
                          Independent Generator, Small Generator and/or
                          Independent Supplier and to calculate the initial
                          Weighted Votes and Points of that Party as a Pool
                          Member under Clause 11.3 and Schedule 13 respectively;

                    (e)  the  provision  of such  information  as the  Executive
                         Committee may reasonably require:-

                          (i)      to enable the Executive Committee to
                                   ascertain whether (and, if so, on what basis)
                                   that Party is entitled to take the benefit of
                                   any exception in Clause 8.5 claimed by it;
                                   and

                    (ii) to  assist  the  Executive   Committee  in  making  any
                         determination under Clause 8.5 relevant to that Party;

                  (f)     if the Party is a Generator (other than an External
                          Pool Member), the provision of evidence reasonably
                          satisfactory to the Executive Committee that the Party
                          operates or has under its control one or more
                          Generating Units, which Generating Unit(s) has (have)
                          provided electricity to the Total System or will be
                          capable of so providing electricity within such period
                          as the Executive Committee may specify; and

                  (g)     if the Party is an External Pool Member, the provision
                          of evidence reasonably satisfactory to the Executive
                          Committee that the Party has the right to use one or
                          more Generation Trading Blocks and/or the right to
                          take electricity across an External Interconnection
                          under an Interconnection Agreement then in full force
                          and effect.

                    8.4  Compliance: Each Pool Member shall procure that for so
                         long  as it is a Pool Member  it  shall  at all  times
                         satisfy or otherwise comply with those Pool Membership
                         Conditions (whether set out in this Agreement or in its
                         Pool Membership  Application)  applicable to it (and/or
                         such  further  or  other  conditions  as the Executive
                         Committee  may from time to time  reasonably  specify).
                         Each Pool Member  shall upon  request from time to time
                         promptly  provide  the  Executive  Committee with such
                         information  as the Executive  Committee may reasonably
                         require  (i)  to  enable  the  Executive Committee  to
                         ascertain whether (and, if so, on what basis) that Pool
                         Member is entitled to take the benefit of any exception
                         in Clause  8.5  claimed  by it, and (ii) to assist the
                         Executive  Committee in making any determination  under
                         Clause 8.5  relevant  to that Party,  and further  with
                         evidence  reasonably   satisfactory  to  the  Executive
                         Committee of such satisfaction and compliance.

8.5      Restrictions applicable to Pool Members:

         8.5.1    At each of its Sites, or where any such Site forms part of a
                  Trading Site, such Trading Site, each Generator shall sell its
                  entire Exports of electricity to Pool Members pursuant to this
                  Agreement except:-

                  (a)     for its Exports of electricity from any generating
                          station in respect of which (but for other generating
                          stations owned or operated by it) it would not be
                          required to hold a Generation Licence, being Exports
                          at any Site or, as the case may be, Trading Site for
                          which the Generator is not required to complete a
                          Supplemental Agreement to the Master Connection and
                          Use of System Agreement

                  Provided that the Generator has given the Executive Committee
                  either on the Effective Date or not less than 10 Business Days
                  before that Site or, as the case may be, Trading Site is
                  withdrawn from the requirements of this provision, written
                  notice that the circumstances described in sub-paragraph (a)
                  apply; or

                  (b)     for the output of electricity from any of its
                          Generating Units in circumstances which the Executive
                          Committee resolves by a vote passed by 80 per cent. or
                          more of the votes of all Committee Members (after
                          consultation with the Director) are exceptional.

         8.5.2    In respect of all its requirements for electricity which a
                  Supplier wishes to purchase from Pool Members, the Supplier
                  shall purchase the same pursuant to this Agreement, provided
                  that nothing in this Agreement shall prevent or restrict the
                  purchase by a Supplier otherwise than pursuant to this
                  Agreement:-

                  (a)     in circumstances where the Supplier is acting
                          otherwise than in its capacity as a consumer, of all
                          or part of that output of electricity from any
                          Generating Unit which is not required to be sold to
                          Pool Members pursuant to Clause 8.5.1 or of
                          electricity which has been purchased by an External
                          Pool Member at its associated External Interconnection
                          as an export from the NGC Transmission System pursuant
                          to this Agreement; or

                    (b)  in  circumstances  where the  Supplier is acting in its
                         capacity as a consumer:-

                    (i)  of  electricity  from any Supplier which has purchased
                         that electricity pursuant to this Agreement; or

                    (ii) of such  output of  electricity  as is  referred  to in
                         paragraph (a) above; or

                  (c)     in circumstances where the Supplier is a Supplier
                          holding a PES Licence and is acting in its capacity as
                          a PES, of electricity from any Supplier which is a
                          Supplier holding a PES Licence, which operates a
                          Distribution System directly connected to the
                          Distribution System operated by the Supplier first
                          mentioned in this paragraph (c) and which has
                          purchased that electricity pursuant to this Agreement;
                          or

                    (d)  in circumstances which the Executive Committee resolves
                         by a vote  passed by 80 per cent.  or more of the votes
                         of all Committee  Members (after  consultation with the
                         Director) are exceptional, from any person.

                  For the purposes of this Clause 8.5.2 a "consumer" means a
                  person who purchases electricity from a Supplier for its own
                  consumption at premises owned or occupied by that person.

8.6  Restrictions applicable to non-Pool Members:  Save as otherwise  expressly
     provided, a Party which is not a Pool Member  shall not be entitled to any
     of the rights and benefits accorded to Pool Members under this Agreement.

8.7      Resignation: Subject as provided in Clause 8.8:-

         8.7.1    a Party (other than the Settlement System Administrator, the
                  Pool Funds Administrator, the Grid Operator, the Ancillary
                  Services Provider and each Externally Interconnected Party)
                  shall be entitled at any time to resign as a Party by
                  delivering a Resignation Notice to the Secretary; and

         8.7.2such  resignation  shall take effect 28 days after receipt of the
               Resignation Notice by the Secretary.

         Promptly after receipt of a duly completed Resignation Notice from a
         Party, the Secretary shall notify (for information only) all of the
         other Parties, the Executive Committee and the Director of such receipt
         and of the name of the Party wishing to resign.

          8.8  Restrictions on resignation:  A Party may not resign as a Party
               (and any Resignation  Notice  delivered  pursuant to Clause 8.7.1
               shall lapse and be of no effect) unless:-

         8.8.1    as at the date its resignation would otherwise become
                  effective all sums due from such Party to the Executive
                  Committee or any other Party under (a) this Agreement, (b) the
                  Funds Transfer Agreement or (c) any agreement entered into
                  pursuant to this Agreement (whether by or on behalf of such
                  Party) and notified for the purposes of this Clause 8.8 by the
                  Executive Committee to such Party prior to the date of its
                  resignation, have been paid in full; and

         8.8.2 it would not be a breach of any Licence condition applicable to
such Party so to resign.

8.9      Release as a Party: Without prejudice to Clause 66.7 and its accrued
         rights and liabilities and its rights and liabilities which may accrue
         in relation to the period during which it was a Party under this
         Agreement, the Funds Transfer Agreement or any agreement referred to in
         Clause 8.8.1(c), upon a Party's resignation becoming effective in
         accordance with Clause 8.7:-

         8.9.1 such Party (if it is a Pool Member) shall cease automatically to
be a Pool Member;

         8.9.2    such Party shall be automatically released and discharged from
                  all its obligations and liabilities under this Agreement, the
                  Funds Transfer Agreement and any agreement referred to in
                  Clause 8.8.1(c); and

         8.9.3    each of the other Parties shall be automatically released and
                  discharged from its obligations and liabilities to such Party
                  under this Agreement, the Funds Transfer Agreement and any
                  agreement referred to in Clause 8.8.1(c).

         Each Party shall promptly at its own cost and expense execute and
         deliver all agreements and other documentation and do all such other
         acts, matters and things as may be necessary to confirm such cessation,
         release and discharge.

8.10     Withdrawal as a Party: If a Party (the "Withdrawing Party") shall apply
         on three occasions to be admitted as a Pool Member pursuant to this
         Clause 8 and on each such occasion it is not so admitted by reason of
         its failure to fulfil the relevant Pool Membership Conditions then with
         effect from the date the Withdrawing Party is deemed to receive
         notification from the Executive Committee pursuant to Clause 75 that it
         has failed for the third time to fulfil such conditions, without
         prejudice to Clause 66.7 and its accrued rights and liabilities, and
         its rights and liabilities which may accrue in relation to the period
         during which it was a Party, under any agreement entered into pursuant
         to this Agreement (whether by or on behalf of the Withdrawing Party)
         and notified to it for the purposes of this Clause 8.10 by the
         Executive Committee prior to the date of its cessation as a Party:-

         8.10.1   the Withdrawing Party shall automatically cease to be a Party
                  and shall be automatically released and discharged from all
                  its obligations and liabilities under this Agreement and any
                  such agreement;

         8.10.2   each of the other Parties shall be automatically released and
                  discharged from its obligations and liabilities to the
                  Withdrawing Party under this Agreement and any such agreement;
                  and

         8.10.3   each Party shall promptly, at the cost and expense of the
                  Withdrawing Party, execute and deliver all agreements and
                  other documentation and do all such other acts, matters and
                  things as may be necessary to confirm such cessation, release
                  and discharge.

8.11 External Pool Members:  A person who has been admitted as an External Pool
     Member shall  immediately  cease to be a Pool Member (such  cessation to be
     without prejudice to Clause 66.7) upon either:-

         8.11.1   all of its rights under an Interconnection Agreement to use
                  the relevant External Interconnection(s) for taking or
                  delivering electricity from or to the NGC Transmission System
                  having permanently ceased; or

         8.11.2 the relevant External Interconnection(s) permanently ceasing to
be connected to the NGC Transmission System.

8.12     Change of capacities: Any Pool Member may, upon application to the
         Executive Committee and satisfaction of those of the Pool Membership
         conditions relevant to its new capacity and such other conditions (if
         any) as the Executive Committee may reasonably require, change the
         capacity(ies) in which it participates as a Pool Member and any Pool
         Member who acquires an additional capacity in which it participates as
         a Pool Member shall be deemed to have been admitted as a new Pool
         Member pursuant to Clause 8.2 in that additional capacity.

8.13     Saving: The Executive Committee shall have the right to waive
         compliance by a Party with all or any of the Pool Membership Conditions
         either absolutely or on terms if, in the opinion of the Executive
         Committee, this is necessary to ensure or help ensure that the
         Settlement process operates efficiently or that the interests of other
         Pool Members are safeguarded.

9.       GENERAL MEETINGS

9.1      Annual general meeting: Once in, and no later than 31st March of, each
         year Pool Members shall hold a general meeting as their annual general
         meeting in addition to any other meetings of Pool Members in that year,
         and notices calling such general meeting shall specify it as the annual
         general meeting. At each annual general meeting the Pool Members shall
         be required to consider and, where appropriate, resolve upon the
         following, namely:-

         9.1.1    a business plan prepared by the Executive Committee for the
                  next following Accounting Period and the four Accounting
                  Periods thereafter (or for such shorter period as the Pool
                  Members in general meeting shall from time to time determine)
                  in relation to the operation of the Settlement System and the
                  Funds Transfer System and all other matters which are the
                  subject of this Agreement;

         9.1.2   a report prepared by the Executive Committee,  which report
                 shall include:-

                  (a)     a review against the business plan prepared by the
                          Executive Committee for the current Accounting Period
                          including a reconciliation based on the then latest
                          available figures against budget for all items within
                          such business plan for that Accounting Period;

                  (b) a review of the operation of the Settlement System and the
Funds Transfer System during that Accounting Period;

          (c)  a  report   on  the   performance   by  the   Settlement   System
               Administrator of its obligations under Schedule 4 and the related
               Service Lines during that Accounting Period;

          (d)  a report on the  performance by the Pool Funds  Administrator  of
               its obligations  under Schedules 11 and 15 during that Accounting
               Period;

                  (e) a report on the performance of the Chief Executive's
Office (taken as a whole) during that Accounting Period; and

                  (f)     such other information or matters as the Executive
                          Committee shall consider appropriate (including any
                          proposed revision to this Agreement);

         9.1.3    the appointment of Committee Members pursuant to Clause 15;

         9.1.4    the election of the Pool Chairman pursuant to Clause 16;

         9.1.5    such matters as any Pool Member present in person may wish to
                  raise at such meeting, notice of which has been given to the
                  Secretary no later than seven days before the date of such
                  meeting, it being acknowledged and agreed that failure by a
                  Pool Member so to notify shall not prejudice the right of any
                  Pool Member to ask questions at such meeting on any matter
                  then before such meeting; and

         9.1.6 such other matters as the Executive Committee sees fit to propose
and of which notice has been given in accordance with Clause 9.4.1.

          9.2  General meetings: All general meetings of Pool Members other than
               annual general meetings shall be extraordinary general meetings.

          9.3  Calling  meetings:  All general meetings of Pool Members shall be
               called by 14 days' notice in writing at the least,  provided that
               a general meeting of Pool Members shall,  notwithstanding that it
               is called by shorter  notice,  be deemed to have been duly called
               if it is so agreed by a  majority  in number of the Pool  Members
               having  a right  to  attend  and  vote at such  meeting,  being a
               majority in number together holding not less than 95 per cent. of
               the Total Weighted Votes.

9.4      Convening meetings:

         9.4.1    An annual general meeting shall be convened by the Secretary
                  on the instructions of the Executive Committee and any notice
                  convening such a meeting shall set out or append details of
                  any such matters as are referred to in Clause 9.1.6 and shall
                  be accompanied by a copy of the business plan referred to in
                  Clause 9.1.1 and of the report referred to in Clause 9.1.2.
                  The Secretary shall use its reasonable endeavours to notify
                  the Pool Chairman and Pool Members in advance of the relevant
                  annual general meeting of any such matters referred to in
                  Clause 9.1.6 of which the Secretary has received notice in
                  accordance with that Clause.

         9.4.2    Extraordinary general meetings shall be convened:-

          (a)  by the Secretary on the  instructions of the Executive  Committee
               or of any one or more Committee  Members pursuant to Clause 13.4;
               or

          (b)  by the  Executive  Committee,  forthwith  upon  receipt of a Pool
               Members'  requisition being a requisition of Pool Members holding
               together at the date of the deposit of the  requisition  not less
               than  two per  cent.  of the  Total  Weighted  Votes  of all Pool
               Members; or

          (c)  by the Secretary on the instructions of the Pool Chairman.

         9.4.3    A Pool Members' requisition shall state the objects of the
                  meeting and must be signed by or on behalf of the
                  requisitionists and deposited at the office of the Secretary,
                  and may consist of several documents in like form each signed
                  by one or more requisitionists. If the Executive Committee
                  does not within 21 days from the date of the deposit of the
                  requisition proceed duly to convene an extraordinary general
                  meeting for a date not later than two months after the said
                  date of deposit, the requisitionists may themselves convene a
                  meeting, but any meeting so convened shall not be held after
                  the expiration of three months from such date. A meeting
                  convened under this Clause 9.4 by requisitionists shall be
                  convened in the same manner, as nearly as possible, as that in
                  which meetings are to be convened by the Executive Committee.

          9.5  Notice of general  meetings:  Any notice  convening  any  general
               meeting of Pool Members shall be exclusive of the day on which it
               is served  or deemed to be served  and of the day for which it is
               given,  and shall specify the place,  the day and the hour of the
               meeting and the general  nature of the  business of such  meeting
               and shall be given to all Parties,  all  Committee  Members,  the
               Pool Chairman, the Chief Executive (if any), the Pool Auditor and
               the Director. The accidental omission to give notice of a meeting
               to, or the  non-receipt  of notice of a meeting  by,  any  person
               entitled to receive notice shall not  invalidate the  proceedings
               at that  meeting.  In every such notice  there shall  appear with
               reasonable  prominence a statement that a Pool Member entitled to
               attend and vote is entitled  to appoint a proxy to attend,  speak
               and  (subject to Clause  12.1) vote in its place and that a proxy
               need not also be a Pool Member.

9.6      Annual conference:

         9.6.1    In each year, on a date falling as near as practicable to, but
                  in any event not later than, eight months after the
                  immediately preceding annual general meeting, a meeting of
                  Pool Members shall be convened and held which shall not be the
                  annual general meeting but which may (but need not) be
                  convened as an extraordinary general meeting (the "Annual
                  Conference").

         9.6.2    At the Annual Conference a report shall be presented by the
                  Executive Committee on the matters referred to in Clause
                  9.1.2, such report to cover the period commencing on the day
                  after the immediately preceding annual general meeting and
                  ending on the day falling one calendar month before the date
                  for which the Annual Conference has been convened. In
                  addition, the Executive Committee shall arrange for such other
                  matters to be discussed, presentations to be made and Pool
                  Member activities to be organised at the Annual Conference as
                  it may resolve to be appropriate.

9.7      Pool Auditor's Report:

         9.7.1    The Secretary shall provide to all Pool Members annually by
                  the last day of the first Quarter following the end of the
                  then most recent Accounting Period a copy of a report prepared
                  by the Pool Auditor on the Settlement System and its operation
                  during such Accounting Period (the "Pool Auditor's Report").

         9.7.2 The Pool Auditor's Report shall include:

          (i)  a summary of the audits, reviews, tests and/or checks referred to
               in Part IX carried out by the Pool Auditor during that Accounting
               Period;

          (ii) any  recommendation   which  the  Pool  Auditor  wishes  to  make
               regarding the operation of the  Settlement  System,  the Charging
               Procedure,  the PFA  Accounting  Procedure,  the  ASP  Accounting
               Procedure and/or the Funds Transfer System; and

          (iii)such other  information or matters which the Executive  Committee
               may  reasonably  require  or  the  Pool  Auditor  shall  consider
               appropriate.

          9.7.3 If the Executive Committee so  resolves,  the  Secretary  shall
               convene a meeting of all Pool  Members  in order to  discuss  the
               Pool Auditor's Report.

10.      PROCEEDINGS AT GENERAL MEETINGS

          10.1 General:  Save as  provided  in  Clause  12.8 and  Part  IV,  all
               business of Pool Members shall be transacted at general  meetings
               of Pool Members, the proceedings for the conduct of which are set
               out in this Clause 10.

          10.2 Quorum: No business shall be transacted at any general meeting of
               Pool  Members  unless a quorum of Pool  Members is present at the
               time  when the  meeting  proceeds  to  business.  Save as  herein
               otherwise  provided,  a quorum shall be Pool  Members  present in
               person representing:-

          10.2.1 50 per cent. or more of the aggregate number of Weighted Votes
               to which all Generators are entitled under Clause 11.2.1; and

          10.2.2 50 per cent. or more of the aggregate  number of Weighted Votes
               to which all Suppliers are entitled under Clause 11.2.2.

10.3     Lack of quorum: If within half an hour from the time appointed for the
         general meeting a quorum is not present, the meeting shall stand
         adjourned to the same day in the next week, at the same time and place
         or to such other day and at such other time and place as the Executive
         Committee may determine and, if at the adjourned meeting a quorum is
         not present within half an hour from the time appointed for the
         meeting, the Pool Member(s) present shall be a quorum.

          10.4 Chairman:  The Pool  Chairman  shall preside as chairman at every
               general  meeting and  separate  general  meeting of Pool  Members
               (other than one convened to consider his removal) or, if there is
               no Pool Chairman or if he shall not be present  within 15 minutes
               after the time  appointed  for the  holding of the  meeting or is
               unwilling to act or if the relevant  meeting has been convened to
               consider the removal of the Pool  Chairman,  the Chief  Executive
               (if any) shall  preside as  chairman  or, if the Chief  Executive
               shall not be present or is  unwilling  to act or if the  relevant
               meeting has been  convened  to consider  the removal of the Chief
               Executive,  the Pool  Members  present  shall choose one of their
               number to be chairman of the meeting.

10.5     Adjournments: The chairman of the meeting may, with the consent of any
         general meeting of Pool Members at which a quorum is present (and shall
         if so directed by the meeting) adjourn the meeting from time to time
         and from place to place, but no business shall be transacted at any
         adjourned meeting other than the business left unfinished at the
         meeting from which the adjournment took place. When a meeting is
         adjourned for 30 days or more, notice of the adjourned meeting shall be
         given as in the case of an original meeting. Save as aforesaid, it
         shall not be necessary to give any notice of an adjournment or of the
         business to be transacted at an adjourned meeting.

10.6 Demand for a poll: At any general  meeting of Pool Members a resolution put
     to the vote of the  meeting  shall be decided  on a show of hands  unless a
     poll is (before or on the  declaration  of the result of the show of hands)
     demanded:-

         10.6.1   by the chairman of the meeting; or

         10.6.2   by at least two Pool Members present in person or by proxy; or

         10.6.3 by any Pool  Member  present in person or by proxy and  holding
               not less than two per cent.  of the Total  Weighted  Votes of all
               Pool Members.

                  Unless a poll be so demanded a declaration by the chairman of
                  the meeting that a resolution has on a show of hands been
                  carried or carried unanimously, or by a particular majority,
                  or lost and an entry to that effect in the book containing
                  minutes of the proceedings of general meetings shall be
                  conclusive evidence of the fact without proof of the number or
                  proportion of the votes recorded in favour of or against such
                  resolution. The demand for a poll may be withdrawn.

10.7     Timing of poll: Except as hereinafter provided in this Clause 10.7, if
         a poll is duly demanded it shall be taken in such manner as the
         chairman of the meeting directs, and the result of the poll shall be
         deemed to be the resolution of the meeting at which the poll was
         demanded. A poll demanded on the election of the chairman of the
         meeting or on a question of adjournment shall be taken forthwith. A
         poll demanded on any other question shall be taken at such time as the
         chairman of the meeting directs, and any business other than that upon
         which a poll has been demanded may be proceeded with pending the taking
         of the poll.

10.8     No casting vote: In the case of an equality of votes, whether on a show
         of hands or on a poll, the chairman of the meeting at which the show of
         hands takes place or at which the poll is demanded, shall not be
         entitled to a second or casting vote.

10.9     Representation of non-Pool Members: Each of the Chief Executive (if
         any) or his duly appointed representative, the Settlement System
         Administrator, the Pool Funds Administrator, the Grid Operator and the
         Ancillary Services Provider shall be obliged to attend, and each other
         Party, each Committee Member, the Pool Auditor and the Director (or its
         or his duly appointed representative) shall have the right to attend,
         at each general meeting of Pool Members, and each of them shall have
         the right to speak (but not to vote) thereat.

10.10    Minutes: The Secretary shall prepare minutes of all general meetings of
         Pool Members and shall circulate copies thereof to all Parties, each
         Committee Member, the Pool Chairman, the Chief Executive (if any), the
         Pool Auditor and the Director as soon as practicable (and in any event
         within ten working days) after the relevant meeting has been held.

11.      VOTING

          11.1 Membership  Votes: Each Pool Member shall be entitled to one vote
               by  reason  of  its  Pool  Membership  (its  "Membership  Vote").
               ---------------

          11.2 Weighted Votes:  Subject as provided in the following  provisions
               of this Clause 11, in respect of any Quarter:-

          11.2.1 each Pool Member which is a Generator shall be entitled in that
               capacity to one vote (each such vote a "Generator Weighted Vote")
               for each GWh of Genset  Metered  Generation  of all its Allocated
               Generating Units for all Settlement  Periods falling in the Votes
               Calculation  Period relative to such Quarter,  as determined from
               the final run of Settlement for each such  Settlement  Period and
               with the  number  of GWh  being  rounded  up or down  (0.5  being
               rounded upwards) to the nearest whole number;

         11.2.2   the number of votes (each a "Supplier Weighted Vote") to which
                  a Pool Member which is a Supplier shall be entitled in that
                  capacity shall be calculated in accordance with the following
                  formula:-

                                            GWV  x    SV
                                                     (SIGMA) SV

                          where:

                          SV       is equal to the total GWh of Consumer Metered
                                   Demand taken by the relevant Pool Member in
                                   all Settlement Periods falling in the Votes
                                   Calculation Period relative to the relevant
                                   Quarter, as determined from the final run of
                                   Settlement for each such Settlement Period
                                   and with the number of GWh being rounded up
                                   or down (0.5 being rounded upwards) to the
                                   nearest whole number;

                    GWV  is the total number of Generator  Weighted Votes of all
                         Pool Members for the relevant Quarter; and

                    (SIGMA) means  summed over the total SV of all Pool  Members
                         for the relevant Quarter,

                  provided that the total number of Supplier Weighted Votes
                  shall at all times equal the total number of Generator
                  Weighted Votes and if, as a result of the foregoing, such
                  would not be the case, the Pool Member with the greatest
                  number of Generator Weighted Votes or of Supplier Weighted
                  Votes calculated as aforesaid shall have deducted that number
                  of Weighted Votes of the relevant class as will ensure that
                  the total number of Supplier Weighted Votes equals the total
                  number of Generator Weighted Votes.

                  For the purposes of this Clause 11.2:-

                  (a)      a Generating Unit shall be an Allocated Generating
                           Unit of a Pool Member (in this Clause, the
                           "Identified Pool Member") if it belongs to the
                           Identified Pool Member as of the date on which the
                           Executive Committee calculates the Weighted Votes of
                           Pool Members for the relevant Quarter pursuant to
                           Clause 11.3.2. If at any time during such Quarter an
                           Allocated Generating Unit shall belong to another
                           Pool Member (in this Clause, the "Transferee Pool
                           Member"), the Weighted Votes attributed to the
                           Identified Pool Member for such Quarter by reason of
                           the Allocated Generating Unit belonging to it shall
                           (subject to Clause 11.4) be transferred to the
                           Transferee Pool Member as of the date on which such
                           Allocated Generating Unit first belongs to the
                           Transferee Pool Member (and the Identified Pool
                           Member and the Transferee Pool Member shall jointly
                           notify the Executive Committee in writing of such
                           date in good time before its occurrence);

                  (b)      a Generating Unit shall belong to a Pool Member if it
                           is owned by that Pool Member and not leased to
                           another person or if it is leased by that Pool Member
                           from another person;

                  (c)      a Pool Member shall notify the Executive Committee
                           promptly on request of its Allocated Generating Units
                           and the Executive Committee and each other Party may
                           rely on the information in that notification and in
                           any notification under paragraph (a) above without
                           further enquiry or need to verify that information;

                  (d)      in determining the meaning of "good time" for the
                           purposes of paragraph (a) above one factor to be
                           taken into account is that the Settlement System
                           Administrator must be allowed sufficient time to
                           effect the necessary changes in Settlement associated
                           with the transfer of the relevant Allocated
                           Generating Unit; and

                  (e)      the Executive Committee may, upon application of any
                           Pool Member involved in any transfer of assets
                           between Pool Members during any Quarter, adjust as
                           between the Pool Members involved in such transfer,
                           the number of Points and/or Weighted Votes to which
                           they in their capacities as Suppliers are entitled in
                           respect of the remaining part of that Quarter and/or
                           one or both of the two immediately succeeding
                           Quarters if, in the opinion of the Executive
                           Committee, such adjustment would help accommodate the
                           consequences of such a transfer and not prejudice the
                           interests of any other Pool Member in any material
                           respect.

                    11.3 Calculation of Weighted  Votes:  Subject as provided in
                         the following provisions of this Clause 11:-

         11.3.1   New Pool Members:

                  (a)     until the third Quarter Day next falling after the
                          date of its admission as a Pool Member, any Party who
                          is admitted as a Pool Member pursuant to Clause 8.2
                          shall have that number of Weighted Votes as fall to be
                          determined in accordance with the following provisions
                          of this Clause 11.3.1. Thereafter, such Pool Member's
                          Weighted Votes shall be calculated in accordance with
                          Clause 11.2;

                  (b)     until the third Quarter Day next falling after the
                          date of admission of the relevant Pool Member as a
                          Pool Member, such Pool Member shall have that number
                          of Generator Weighted Votes and/or Supplier Weighted
                          Votes as are accorded to it upon its admission as a
                          Pool Member by the Executive Committee (which the
                          Executive Committee shall do prior to the date of such
                          admission) who shall have regard to the factors listed
                          in paragraphs (c), (d) and/or (as the case may be) (e)
                          below or as are determined by the Director in
                          accordance with Clause 11.5;

                    (c)  the factors  referred to in paragraph  (b) shall in the
                         case of a Generator include:-

                    (i)  the Registered Capacity of all Generating Units of such
                         Generator;

                          (ii)     the Executive Committee's assessment of the
                                   likely availability of all such Generating
                                   Units for the period from the date of
                                   admission of such Pool Member as a Pool
                                   Member to the third Quarter Day next falling
                                   after such date, having regard to the
                                   registered Generation Scheduling and Despatch
                                   Parameters or (as the case may be) Generation
                                   Trading Block Scheduling and Despatch
                                   Parameters for such Generating Units;

                          (iii)    the Executive Committee's assessment of the
                                   likely output of all such Generating Units
                                   during such period having regard to the
                                   output of Generating Units which in the
                                   Executive Committee's opinion most nearly
                                   correspond to such Generating Units;

                          (iv)     the Executive Committee's assessment of the
                                   likely daily station load associated with the
                                   Power Stations of which such Generating Units
                                   form part during such period; and

                          (v)      where a Generating Unit of an existing Pool
                                   Member is transferred to, and then belongs
                                   to, such Generator at or soon after the time
                                   of such Generator's admission as a Pool
                                   Member, the Generator Weighted Votes most
                                   recently attributed to that existing Pool
                                   Member by reason of that Generating Unit
                                   shall be attributed to such Generator as if
                                   such Generator were a Transferee Pool Member
                                   under the provisions of paragraph (a) of
                                   Clause 11.2;

                  (d)     the factors referred to in paragraph (b) above shall
                          in the case of a Supplier be the total GWh which would
                          be supplied by the relevant Supplier in the period
                          from the date of admission of such Pool Member as a
                          Pool Member to the third Quarter Day next falling
                          after such date on the basis of its Customers' metered
                          demand or, where such metered information is not
                          available, the load profiles of its Customers used for
                          the purposes of estimating the consumption of Second
                          Tier Customers; and

                  (e)     the factors referred to in paragraph (b) above shall
                          in the case of an External Pool Member be whichever
                          one or more of those factors referred to in paragraph
                          (c) above and those referred to in paragraph (d) above
                          as the Executive Committee considers to be most
                          readily applicable to the Generating Units (if any) of
                          such Pool Member and to the level of demand for Active
                          Energy of that Pool Member across the relevant
                          External Interconnection but as if the references to
                          Customers in paragraph (d) were references to that
                          Pool Member's own requirements;

                    11.3.2  Calculation:  on or prior to each Quarter Day and on
                         each admission,  resignation or removal of a Party as a
                         Pool  Member  or  change  in the  capacity  in which it
                         participates  as a Pool Member the Executive  Committee
                         shall,  on the basis of  information  to be supplied by
                         the Settlement System  Administrator in accordance with
                         Service  Line 10  (Service  to CEO and  Pool  Members),
                         calculate  the number of  Weighted  Votes to which each
                         Pool Member whose  Weighted  Votes are to be calculated
                         in  accordance  with  Clause  11.2 is  entitled  in its
                         capacity as a Generator or a Supplier for the Following
                         Quarter (or, in the case of an  admission,  resignation
                         or removal  of a Party as a Pool  Member or a change in
                         the capacity in which it participates as a Pool Member,
                         for the  remainder  of the then current  Quarter),  and
                         shall  notify  each Pool  Member  and the  Director  in
                         writing of the number of Generator  Weighted  Votes and
                         Supplier  Weighted  Votes of all Pool Members  (whether
                         calculated in  accordance  with Clause 11.2 or 11.3.1).
                         Subject to Clauses 11.5 and 11.6, the  determination of
                         the  Executive  Committee as to the number of Generator
                         Weighted Votes and Supplier Weighted Votes of each Pool
                         Member  shall (in the  absence  of  manifest  error) be
                         final and binding for all purposes of this Agreement;

                    11.3.3  Attribution: if a Pool Member shall not receive any
                         Weighted  Vote by  reason  of the  calculations  under
                         Clause 11.2 or the foregoing provisions of this Clause
                         11.3,  such Pool Member shall nevertheless be accorded
                         one   Generator   Weighted Vote  and/or  one  Supplier
                         Weighted Vote, depending on the capacity(ies) in which
                         it is participating as a Pool Member; and

         11.3.4   Additional capacity: for the purposes of this Clause 11 any
                  Pool Member who acquires an additional capacity in which it
                  participates as a Pool Member shall be deemed to have been
                  admitted as a new Pool Member pursuant to Clause 8.2 in that
                  additional capacity and until the third Quarter Day next
                  falling after the date such Pool Member's application to the
                  Executive Committee pursuant to Clause 8.12 is approved, it
                  shall have that number of Weighted Votes in that additional
                  capacity as fall to be determined in accordance with the
                  provisions of Clause 11.3.1. Thereafter, such Pool Member's
                  Weighted Votes shall be calculated in accordance with Clause
                  11.2.

11.4     Cap on Weighted Votes:

          11.4.1 The aggregate  number of Weighted  Votes to which a Pool Member
               shall be entitled (in whatever  capacity)  under Clauses 11.2 and
               11.3  shall  not at any time  exceed  15 per  cent.  of the Total
               Weighted Votes.

         11.4.2   The aggregate number of Weighted Votes to which all Pool
                  Members which are members of the same Pool Member's Group are
                  entitled (in whatever capacity) under Clauses 11.2 and 11.3
                  shall not at any time exceed 15 per cent. of the Total
                  Weighted Votes.

         11.4.3   If, by virtue of the number of Weighted Votes accorded to a
                  Pool Member or to Pool Members which are members of the same
                  Pool Member's Group pursuant to Clauses 11.2 and/or 11.3, a
                  Pool Member or Pool Members would in the absence of this
                  Clause 11.4.3 be in breach of Clause 11.4.1 or 11.4.2, the
                  number of Weighted Votes to which that Pool Member or (as the
                  case may be) those Pool Members which are members of the same
                  Pool Member's Group shall be entitled shall be determined as
                  follows:-

                  (a)     in the case of a Pool Member which would otherwise be
                          in breach of Clause 11.4.1, the aggregate number of
                          Weighted Votes to which that Pool Member shall be
                          entitled shall be reduced by such number (in this
                          paragraph (a) the "Redistributed Votes") as will
                          ensure that, after redistribution of its Weighted
                          Votes in accordance with Clause 11.4.5, such Pool
                          Member shall have as nearly as practicable (but not in
                          excess of) 15 per cent. of the Total Weighted Votes.
                          The Redistributed Votes shall:-

                    (i)  consist of that number of  Weighted  Votes in excess of
                         15 per cent. of the Total  Weighted  Votes to which the
                         relevant Pool Member is entitled; and

                    (ii) comprise Generator Weighted Votes and Supplier Weighted
                         Votes in the same proportion (as nearly as practicable)
                         as the total  number of  Generator  Weighted  Votes and
                         Supplier  Weighted  Votes of that Pool  Member  (before
                         such redistribution) bear one to the other;

                  (b)     in the case of Pool Members which are members of the
                          same Pool Member's Group and which would otherwise be
                          in breach of Clause 11.4.2, the aggregate number of
                          Weighted Votes to which those Pool Members shall be
                          entitled shall be reduced by such number (in this
                          paragraph (b), the "Redistributed Votes") as will
                          ensure that, after redistribution of their Weighted
                          Votes in accordance with Clause 11.4.6, such Pool
                          Members shall together have as nearly as practicable
                          (but not in excess of) 15 per cent. of the Total
                          Weighted Votes. The Redistributed Votes shall:-

                          (i)      consist of that number of Weighted Votes in
                                   excess of 15 per cent. of the Total Weighted
                                   Votes to which all Pool Members which are
                                   members of that Pool Member's Group are, in
                                   aggregate, entitled;

                          (ii)     comprise Generator Weighted Votes and
                                   Supplier Weighted Votes in the same
                                   proportion (as nearly as practicable) as the
                                   total number of Generator Weighted Votes and
                                   Supplier Weighted Votes of all Pool Members
                                   which are members of that Pool Member's Group
                                   (before such redistribution) bear one to the
                                   other; and

                          (iii)    be taken from each Pool Member which is a
                                   member of that Pool Member's Group (in the
                                   case of Redistributed Votes which are
                                   Generator Weighted Votes) in the proportion
                                   (as nearly as practicable) which that Pool
                                   Member's Generator Weighted Votes (if any)
                                   bear to the total number of Generator
                                   Weighted Votes of all Pool Members which are
                                   members of that Pool Member's Group and (in
                                   the case of Redistributed Votes which are
                                   Supplier Weighted Votes) in the proportion
                                   (as nearly as practicable) which that Pool
                                   Member's Supplier Weighted Votes (if any)
                                   bear to the total number of Supplier Weighted
                                   Votes of all Pool Members which are members
                                   of that Pool Member's Group; and

                  (c)     in the case where both paragraphs (a) and (b) above
                          apply in respect of a Pool Member, the provisions of
                          paragraph (a) above shall be applied before those of
                          paragraph (b) above.

         11.4.4   Subject to Clause 11.4.7, where more than one Pool Member or
                  Pool Member's Group would, in the absence of Clause 11.4.3, be
                  in breach of Clause 11.4.1 or (as the case may be) 11.4.2, the
                  redistribution of Weighted Votes pursuant to Clause 11.4.5 or
                  (as the case may be) 11.4.6 shall commence with the Pool
                  Member or Pool Member's Group that has the greatest percentage
                  of Total Weighted Votes, shall continue with the Pool Member
                  or Pool Member's Group with the next greatest percentage and
                  so on, and the process of redistributing Weighted Votes in
                  accordance with such Clauses shall continue until such time as
                  no Pool Member or Pool Member's Group is in breach of Clause
                  11.4.1 or 11.4.2.

         11.4.5 Where Clause 11.4.3(a) applies, the Redistributed Votes shall
(subject as provided in Clauses 11.4.7 and 11.4.8) be allocated as follows:-

                  (a)     the Redistributed Votes which are Generator Weighted
                          Votes shall be allocated across all other Pool Members
                          in the proportions (as nearly as practicable) which
                          their respective Generator Weighted Votes bear to each
                          other (such proportions to be calculated before any
                          redistribution of Weighted Votes pursuant to this
                          Clause 11.4); and

                  (b)     the Redistributed Votes which are Supplier Weighted
                          Votes shall be allocated across all other Pool Members
                          in the proportions (as nearly as practicable) which
                          their respective Supplier Weighted Votes bear to each
                          other (such proportions to be calculated before any
                          redistribution of Weighted Votes pursuant to this
                          Clause 11.4).

         11.4.6 Where Clause 11.4.3(b) applies, the Redistributed Votes shall
(subject as provided in Clauses 11.4.7 and 11.4.8) be allocated as follows:-

                  (a)     the Redistributed Votes which are Generator Weighted
                          Votes shall be allocated across all other Pool Members
                          which are not members of the relevant Pool Member's
                          Group in the proportions (as nearly as practicable)
                          which their respective Generator Weighted Votes bear
                          to each other (such proportions to be calculated
                          before any redistribution of Weighted Votes pursuant
                          to this Clause 11.4); and
                  (b)     the Redistributed Votes which are Supplier Weighted
                          Votes shall be allocated across all other Pool Members
                          which are not members of the relevant Pool Member's
                          Group in the proportions (as nearly as practicable)
                          which their respective Supplier Weighted Votes bear to
                          each other (such proportions to be calculated before
                          any redistribution of Weighted Votes pursuant to this
                          Clause 11.4).

         11.4.7   Redistributed Votes shall not be allocated pursuant to Clause
                  11.4.5 or 11.4.6 to any Pool Member which before such
                  allocation is or, but for Clause 11.4.3, would be in breach of
                  Clause 11.4.1 or 11.4.2.

         11.4.8   Any allocation of Redistributed Votes in accordance with the
                  foregoing provisions of this Clause 11.4 shall not be effected
                  in the case of votes amounting to fractions of whole numbers
                  and any Redistributed Votes which are incapable of allocation
                  as a result of this or any other provision of this Clause 11.4
                  ("Fractional Redistributed Votes") shall, in the case of
                  Generator Weighted Votes, be allocated automatically to the
                  largest Generator in terms of Genset Metered Generation for
                  the relevant Quarter or, in the case of Supplier Weighted
                  Votes, to the largest Supplier in terms of Consumer Metered
                  Demand for the relevant Quarter, to the extent that this does
                  not cause a breach of Clause 11.4.1 or Clause 11.4.2.
                  Thereafter, any unallocated Fractional Redistributed Votes
                  shall be allocated in accordance with this Clause 11.4.8 to
                  the next such largest Generator and/or Supplier and the
                  process shall continue until all Fractional Redistributed
                  Votes have been so allocated.

11.5     New Pool Member's reference to the Director: If any Pool Member
         referred to in Clause 11.3.1(a) shall dispute the calculation of or the
         number of Weighted Votes accorded to it in accordance with Clause
         11.3.1, such Pool Member may refer such dispute to the Director for
         determination, whose determination as to the calculation of or the
         number of Weighted Votes to which such person shall be entitled shall
         be final and binding for all purposes of this Agreement.

11.6     Alteration of Weighted Votes: The Director may at any time by notice to
         the Executive Committee alter the calculation of Weighted Votes set out
         in Clauses 11.2.1 and 11.2.2 and/or the caps on Weighted Votes set out
         in Clauses 11.4.1 and 11.4.2 if, in his opinion, such alteration is
         required to achieve fair representation for all Pool Members.

11.7     Pool Member Group Information: Each Pool Member shall provide the
         Executive Committee with such details of its Pool Member Group as the
         Executive Committee may at any time and from time to time reasonably
         require for the purposes of this Clause 11 and such Pool Member shall
         be deemed to warrant to all other Pool Members that all such details
         are true and accurate in all material respects as at the date they are
         provided to the Executive Committee.
         The Executive Committee may rely on such details without further
enquiry or need to verify them.

11.8     [Not used]

11.9     Records: The Executive Committee shall maintain, and retain for a
         period of not less than eight years, a register recording the Generator
         Weighted Votes and Supplier Weighted Votes of each Pool Member, which
         register shall be open for inspection by any Party at the office of the
         Secretary during normal business hours.

11.10    Voting  on a show of  hands:  On a show of  hands  every  Pool  Member
         present in person  shall have only its  Membership  Vote (that is, one
         vote).

11.11  Voting on a poll:  On a poll  every  Pool  Member  shall have only its
       Weighted Votes.  On a poll votes may be given either  personally or by
       proxy.

11.12    Objections: No objection shall be raised to the qualification of any
         voter except at the meeting or adjourned meeting at which the vote
         objected to is given or tendered, and every vote not disallowed at such
         meeting shall be valid for all purposes. Any such objection made in due
         time shall be referred to the chairman of the meeting whose decision
         shall be final and conclusive.

11.13    Scrutiny: At each meeting at which a Pool Member casts a vote, the
         Secretary or another person specifically appointed for the purpose by
         the Secretary shall ensure that proper scrutiny of all such votes takes
         place, such that he is entirely satisfied that every vote cast was so
         cast properly and in accordance with all relevant provisions of this
         Agreement and any other applicable agreement between all Pool Members
         or rules or regulations governing such votes.

12.      PROXIES

12.1     Authority: Any Pool Member entitled to attend and vote at any general
         meeting of Pool Members shall be entitled to appoint another person
         (whether a Pool Member or not) as its proxy to attend, speak and vote
         in its place, save that a proxy shall not be entitled to vote except on
         a poll.

12.2      Authentication of proxy: The instrument appointing a proxy shall be in
          writing  either under seal or under the hand of an officer or attorney
          duly authorised. A proxy need not be a Pool Member.

12.3     Deposit of proxy: The instrument appointing a proxy and the power of
         attorney or other authority, if any, under which it is signed or a
         certified copy of that power or authority shall be deposited at the
         office of the Secretary or at such other place within the United
         Kingdom as is specified for that purpose in the notice convening the
         relevant general meeting of Pool Members, not less than 48 hours before
         the time for holding the meeting or adjourned meeting, at which the
         person named in the instrument proposes to vote, or, in the case of a
         poll, not less than 24 hours before the time appointed for the taking
         of the poll, and in default the instrument of proxy shall not be
         treated as valid.

12.4     Form of proxy (1): An  instrument  appointing  a proxy shall be in the
         following form or a form as near thereto as circumstances admit:-

         "POOLING AND  SETTLEMENT  AGREEMENT  FOR THE  ELECTRICITY  INDUSTRY IN
          ENGLAND AND WALES dated 30th March, 1990

          We,  , of , being a Pool  Member (as  defined  in the  above-mentioned
          Agreement),  hereby appoint of or, failing him, of , as our proxy
          to vote for us on our behalf at the [annual or extraordinary,  as
          the case may be] general  meeting of Pool Members,  to be held on
          the day of 19 , and at any adjournment thereof.

          Signed this day of 19 ."

12.5 Form  of  proxy  (2):  Where  it is  desired  to  afford  Pool  Members  an
     opportunity of voting for or against a resolution the instrument appointing
     a proxy  shall  be in the  following  form or a form  as  near  thereto  as
     circumstances admit:-

"POOLING AND SETTLEMENT  AGREEMENT FOR THE  ELECTRICITY INDUSTRY IN ENGLAND AND
     WALES dated 30th March, 1990

We,  , of , being a Pool Member (as defined in the  above-mentioned  Agreement),
     hereby  appoint of or, failing him, of , as our proxy to vote for us on our
     behalf at the [annual or extraordinary, as the case may be] general meeting
     of Pool  Members,  to be  held  on the  day of 19 , and at any  adjournment
     thereof.

         Signed this              day of             19   .

         This form is to be used in favour of the resolution.
                                                  against

         Unless otherwise instructed, the proxy will vote as he thinks fit.

         Strike out whichever is not desired."

12.6 Authority  to demand a poll:  The  instrument  appointing  a proxy shall be
     deemed to confer authority to demand or join in demanding a poll.

12.7     Proxy valid: A vote given in accordance with the terms of an instrument
         of proxy shall be valid notwithstanding the previous revocation of the
         proxy or of the authority under which the proxy was executed, provided
         that no intimation in writing of such revocation shall have been
         received by the Secretary at his office before the commencement of the
         meeting or adjourned meeting at which the proxy is used.

12.8     Resolution in writing: A resolution in writing signed by all the Pool
         Members for the time being entitled to receive notice of and to attend
         and vote at general meetings of Pool Members (or by their duly
         authorised representatives) shall be as valid and effective as if the
         same had been passed at a general meeting of Pool Members duly convened
         and held and may consist of several instruments in like form and
         executed by or on behalf of one or more Pool Members.

12.9     Corporations acting by representatives at meetings: Any company,
         corporation, partnership, firm, joint venture, trust, association or
         other organisation which is a Pool Member may by resolution of its
         directors or other governing body authorise such person as it thinks
         fit to act as its representative at any general meeting of Pool
         Members, and references in this Agreement to a Pool Member acting in
         person (howsoever expressed) shall be deemed to include Pool Members
         acting by their duly authorised representatives.

13.      MATTERS RESERVED TO THE GENERAL MEETING: CLASS RIGHTS

13.1     Matters reserved generally:

         13.1.1   As between the Pool Members each of the matters referred to in
                  Clause 13.1.2 shall require the prior approval of Pool Members
                  in general meeting before effect is given to the same, such
                  approval to be (subject as provided in Sections 15, 16 and 17
                  of Schedule 4) by resolution of Pool Members passed by not
                  less than 65 per cent. of the Membership Votes or (as the case
                  may be) Weighted Votes of such Pool Members as (being entitled
                  to do so) vote in person or by proxy at a general meeting of
                  Pool Members of which notice specifying the intention to
                  propose the resolution has been duly given.

         13.1.2   The matters referred to in Clause 13.1.1 are:-

                  (a)     the removal of the Settlement System Administrator;

                  (b)     the appointment and removal of the Pool Auditor;

                  (c)     any amendment to or variation of this Agreement (other
                          than any amendment or variation referred to in Clause
                          13.2.1, 13.2.2 or 13.2.3 or any amendment of or
                          variation to Schedule 9 (including any amendment
                          thereto made pursuant to Clause 56.2) or to Schedule
                          15);

                 (d)  the   approval pursuant to Clause 5.8   of  any
                         Recommendation and pursuant to Clause 5.11 of any Works
                         Programme and any approval pursuant to Clause 5.14;

                  (e)     the removal of the Pool Chairman; and

                  (f)     such other matters (not being matters referred to in
                          Clause 9.1.8) which are otherwise designated under
                          this Agreement for reference to the Pool Members in
                          general meeting.

13.2     Matters reserved to particular classes of Pool Members:

         13.2.1 As between the Pool  Members any  amendment  to or variation of
               this  Clause  13.2  shall  require  the  prior  approval  of  the
               Generators in separate general meeting.

         13.2.2 As between the Pool Members each of the following matters shall
require the prior approval of the Suppliers in separate general meeting:-

          (a)  any change prior to 1st April, 1998 to the standards of accuracy
               of Metering  Equipment required for Second Tier  Customers up to
               (and including) 100kW or required for Non-Pooled Generators;

          (b)  any amendment to or variation of Part XI and/or Schedule 18; and

          (c)  any amendment to or variation of this Clause 13.2.

         13.2.3   As between the Pool Members any amendment to or variation of
                  Clauses 10.2, 10.6, 13.4, 13.5, 15, 16.2, 19.2, 22 or 83, or
                  this Clause 13.2 shall, in addition to the applicable
                  requirements of Clauses 13.2.1 and 13.2.2, require the prior
                  approval of Pool Members in general meeting, such approval to
                  be by resolution of Pool Members passed by not less than 84
                  per cent. of the Membership Votes or (as the case may be)
                  Weighted Votes of such Pool Members as (being entitled to do
                  so) vote in person or by proxy at a general meeting of Pool
                  Members of which notice specifying the intention to propose
                  the resolution has been duly given.

         13.2.4   To every separate general meeting referred to in this Clause
                  13.2 the provisions of this Part III relating to general
                  meetings of Pool Members (other than Clause 10.9, save in
                  respect of the attendance by the Pool Auditor or the Director
                  or its or his duly appointed representative) shall apply
                  mutatis mutandis but so that:-

                    (a)  in the case of the  Generators,  the  necessary  quorum
                         shall be two Pool Members of that class;

                  (b) in the case of the Suppliers, the necessary quorum shall
be eight Pool Members of that class; and

                  (c) notice of any such separate general meeting need be given
only to those entitled to attend the same,

                  and any resolution put to any such separate general meeting
                  shall, to be passed, require (in the case of the Generators)
                  75 per cent. and (in the case of the Suppliers) a simple
                  majority of the Membership Votes or (as the case may be)
                  Weighted Votes of such Pool Members as (being entitled to do
                  so) vote in person or by proxy at such separate general
                  meeting of which notice specifying the intention to propose
                  the resolution has been duly given provided that any such
                  resolution shall be deemed passed if it would have been passed
                  but for the resolution being opposed by a single Pool Member
                  or one or more Pool Members of a single Pool Member's Group.

13.2A    As between the Pool Members any amendment to or variation of Schedule
         22 shall require the approval of the Public Electricity Suppliers in
         separate general meeting in accordance with the provisions of that
         Schedule.

13.3 Provisions  cumulative:  The  provisions  of  Clauses  13.1  and  13.2 are
     cumulative and not exclusive one of the other.

13.4     Executive Committee's referral: in the event of receipt by the
         Secretary from one or more of the Committee Members of a request that
         any matter resolved upon on a poll by the Executive Committee (or upon
         which it has been unable or has refused to resolve other than where the
         taking of a vote has been deferred pursuant to Clause 22.1) be remitted
         to the Pool Members in general meeting, such request having been
         received no later than five working days after the date on which the
         results of such poll were notified to Committee Members (exclusive of
         the date on which notice was given) (or, as the case may be, the date
         of its failure or refusal so to resolve), the matter the subject of the
         relevant resolution shall be remitted to the Pool Members in general
         meeting and, pending the decision of Pool Members in general meeting,
         such resolution shall not have effect. The provisions of this Clause
         13.4 are subject to the provisions of Clause 61.9.

13.5     Dissentient Pool Member's right of appeal:-

         13.5.1   Any Pool Member who:-

          (a)  voted  against a  resolution  passed or in favour of a resolution
               not passed by Pool Members in general meeting; or

          (b)  voted  against a  resolution  passed or in favour of a resolution
               not passed by  Generators  or (as the case may be)  Suppliers  in
               separate general meeting; or

          (c)  is directly affected by Pool Creditors passing or failing to pass
               a resolution of Pool  Creditors  (but only where such  resolution
               does  not  concern  the  enforcement  or  non-enforcement  of any
               payment obligation),

                  and each Externally Interconnected Party (not being a Pool
                  Member) (each such Pool Member a "Dissentient Pool Member",
                  which expression shall include each such Externally
                  Interconnected Party) shall be entitled within ten working
                  days after the date of such resolution to apply in writing to
                  the Director seeking a ruling that the relevant resolution
                  shall or shall not have effect on the grounds that either:-

                          (i)      the interests of a group of Pool Members
                                   (including the Dissentient Pool Member) or of
                                   the Dissentient Pool Member under this
                                   Agreement have been, are or will be unfairly
                                   prejudiced by the passing of or the failure
                                   to pass such resolution; or

                          (ii)     such resolution will breach, or will cause
                                   the Dissentient Pool Member to be in breach
                                   of, one or more provisions of this Agreement
                                   or of its Licence or of the Act.

                          Any such application shall give detailed reasons and
                          evidence in support and shall be copied to the
                          Executive Committee. The Dissentient Pool Member shall
                          be entitled to mark all or any part of such
                          application as confidential and the Executive
                          Committee shall give such weight as it sees fit to
                          such marking in the copying of such application to
                          those persons to whom it is obliged to copy such
                          application. The Executive Committee shall promptly
                          notify all other Pool Members, each Externally
                          Interconnected Party (not being a Pool Member), the
                          Pool Chairman, the Settlement System Administrator and
                          the Pool Funds Administrator of receipt of such
                          application. At the same time as the Executive
                          Committee shall notify all such other Pool Members,
                          each Externally Interconnected Party (not being a Pool
                          Member), the Pool Chairman, the Settlement System
                          Administrator and the Pool Funds Administrator of such
                          receipt, the Executive Committee shall send each of
                          them a copy of the relevant application (amended, if
                          appropriate, to take account of any such marking where
                          the Executive Committee shall have seen fit so to do).
                          The Executive Committee, each Pool Member, each
                          Externally Interconnected Party (not being a Pool
                          Member), the Pool Chairman, the Settlement System
                          Administrator and the Pool Funds Administrator and (if
                          invited by the Director) the Pool Auditor shall each
                          be entitled to make representations to the Director.
                          If the Pool Auditor shall be so invited to make any
                          such representations, the Executive Committee will
                          provide it with a copy of the relevant application
                          (amended, if appropriate, as aforesaid).

         13.5.2   Any determination of the Director in respect of any such
                  application as is referred to in Clause 13.5.1 shall be final
                  and binding. Pending any determination of the Director in
                  respect of any such application, the relevant resolution (if
                  passed) shall not have effect provided that, if the Director
                  shall decline to accept a reference or to make a determination
                  (in either case, for whatsoever reason), such resolution shall
                  take effect from the date that the Director notifies the
                  Executive Committee that he declines to accept the reference
                  or to make the determination.

13.5.3            The Parties acknowledge and agree that the satisfaction of
                  either of the grounds referred to in Clause 13.5.1(i) or (ii)
                  shall not of itself entitle the Dissentient Pool Member to a
                  determination by the Director in its favour.


<PAGE>


                                     PART IV

                             THE EXECUTIVE COMMITTEE

14.      ESTABLISHMENT OF THE EXECUTIVE COMMITTEE

          Establishment:   The  Pool  Members  hereby  establish  the  Executive
          Committee  upon the terms and subject to the  conditions  of this
          Agreement.

15.      MEMBERSHIP OF THE EXECUTIVE COMMITTEE

15.1     Number of the Committee Members: The maximum number of Committee
         Members shall not at any time exceed twelve or such lesser number
         (subject to a minimum of six) as Pool Members may decide in general
         meeting not later than 90 days before each annual general meeting of
         Pool Members. Any such lesser number so decided upon prior to an annual
         general meeting of Pool Members shall be the maximum number of
         Committee Members during the entire term of office (according to Clause
         15.4) of those Committee Members elected at that annual general meeting
         (or, as the case may be, a subsequent extraordinary general meeting).
         On the expiry of that term of office, the maximum number of Committee
         Members shall be twelve unless a lesser number shall have been decided
         upon in accordance with the procedures set out in this Clause 15.1.

15.2 Maximum  number of Committee  Members  fewer than  twelve:  If Pool Members
     decide on a maximum  number  of  Committee  Members  fewer  than  twelve in
     accordance with Clause 15.1, then:-

         15.2.1   The number of Committee Members to be appointed in accordance
                  with the provisions of Clause 15.5 shall be two fewer than the
                  agreed maximum number of Committee Members and the number of
                  Committee Members to be appointed in accordance with Clause
                  15.6 shall be two; and

         15.2.2   The references to "ten" and its derivatives in Clauses
                  15.5.3(g) and 15.5.3(i) shall be substituted by the number
                  that is two fewer than the maximum number of Committee Members
                  agreed by Pool Members and the references to "nine" and
                  "eleven" (and their respective derivatives) in Clause
                  15.5.3(i) shall be correspondingly altered.

15.3 Appointment and Removal: As from 1st April, 1997 and subject as provided in
     Clauses 15.2 and 15.8, ten Committee Members shall be appointed and removed
     in  accordance  with the  provisions  of  Clauses  15.5 and  15.10  and two
     Committee  Members shall be appointed  and removed in  accordance  with the
     provisions of Clauses 15.6 and 15.10.

15.4     Term of Office: Subject to Clause 15.11, the term of office of
         Committee Members shall be from 1st April in the year of appointment to
         31st March in the next following year provided that, if the meeting at
         which any Committee Member is appointed is held after 1st April, his
         term of office shall commence from the time of his appointment. A
         Committee Member whose term of office has expired or is to expire shall
         be eligible for re-election.

15.5 MP Committee  Member  election  procedure:  The  procedures set out in this
     Clause 15.5 shall apply to the election of those Committee  Members who are
     not RS Committee Members ("MP Committee Members"):- --------------------

         15.5.1   Each MP Pool Member shall be entitled, by notice to the
                  Executive Committee given no earlier than 90 days and no later
                  than 30 days before each annual general meeting of Pool
                  Members or, failing election of any MP Committee Members at
                  such meeting, no later than 15 days before an extraordinary
                  general meeting convened for such purpose to propose, one
                  individual (an "MP Nominee") to be an MP Committee Member. The
                  MP Nominee need not be an officer or employee of a Pool Member
                  but shall not be the Chief Executive or Pool Chairman or any
                  then current nominee for the position of Chief Executive or
                  Pool Chairman. Any such proposal to be valid shall be
                  accompanied by a written statement from the MP Nominee stating
                  that he is aware of the proposal and would be prepared to
                  serve as a Committee Member if elected.

         15.5.2   No later than 10 days before the date of the annual general
                  meeting (or, as the case may be, extraordinary general
                  meeting) the Executive Committee shall circulate (or cause to
                  be circulated) to all Pool Members and the Director a list of
                  all the names of the MP Nominees and of the Pool Members who
                  proposed them (the "MP Nominee List"). The MP Nominee List
                  shall also be circulated at the annual general meeting or, as
                  the case may be, extraordinary general meeting to all Pool
                  Members present in person; and

         15.5.3   At the annual general meeting or extraordinary general meeting
                  (as the case may be) of Pool Members held to appoint Committee
                  Members the following procedures shall be applied in
                  sequence:-

                  (a)     each MP Pool Member shall be given a voting paper (in
                          this Clause 15.5, a "Voting Paper") with the name of
                          every MP Nominee who appears on the MP Nominee List;

                  (b)     subject to paragraphs (c) and (d) below, an MP Pool
                          Member shall rank each MP Nominee on its Voting Paper
                          in order of preference by marking the MP Nominee which
                          is its first choice for membership of the Executive
                          Committee (its "Preferred MP Nominee") with the number
                          "1" and continuing numbering sequentially in order of
                          preference until it is indifferent as to the
                          preference it accords to any remaining MP Nominees;

                  (c)     if an MP Pool Member has proposed an MP Nominee in
                          accordance with Clause 15.5.1, then such MP Pool
                          Member must choose that MP Nominee as its Preferred MP
                          Nominee;

                  (d)  all MP Pool  Members  that are members of the same Pool
                         Member's  Group  shall be  obliged  to rank the same MP
                         Nominees in the same order of preference;

                  (e)     the Moderator shall collect in all Voting Papers and
                          for each Preferred MP Nominee shall calculate the
                          number of Weighted Votes cast by those MP Pool Members
                          in his favour and for this purpose each MP Pool Member
                          shall be deemed to have cast all its Weighted Votes in
                          favour of its Preferred MP Nominee;

                  (f)     the Moderator shall prepare a list (the "MP Preference
                          List") ranking the Preferred MP Nominees in order
                          according to the number of Weighted Votes cast for
                          each such Preferred MP Nominee, with the Preferred MP
                          Nominee with the most number of Weighted Votes being
                          at the head of the list;

                  (g)     when there are more than ten MP Nominees on the MP
                          Preference List then, if the MP Nominee ranked tenth
                          on the MP Preference List has more Weighted Votes cast
                          in his favour than the sum of all Weighted Votes cast
                          for all those MP Nominees ranked below him on the MP
                          Preference List, those MP Nominees ranked first to
                          tenth on the MP Preference List shall be elected as
                          Committee Members and the voting procedure in this
                          Clause 15.5.3 shall terminate;

                    (h)  if  the   condition  in  paragraph  (g)  above  is  not
                         satisfied,  the MP Nominee  whose name  appears last on
                         the MP  Preference  List shall be  removed  from the MP
                         Preference  List and shall take no further  part in the
                         election  process for the MP Committee  Members and the
                         Moderator  shall  transfer  the  Weighted  Votes of all
                         those MP Pool  Members who voted for that MP Nominee to
                         the  MP  Nominee(s)  who  is  their  respective  second
                         preference.  The Moderator shall then prepare a revised
                         MP Preference  List to which  paragraph (g) above shall
                         be applied and the procedure set out in this  paragraph
                         (h)  shall be  repeated  as  often as may be  necessary
                         until the condition in paragraph (g) above is satisfied
                         (on each  occasion  the MP Nominee  whose name  appears
                         last on the MP  Preference  List being  removed from it
                         and the Moderator  transferring  the Weighted  Votes of
                         all  those  MP  Pool  Members  attributable  to that MP
                         Nominee  to  the  MP  Nominee(s)   who  is  their  next
                         respective preference); and

                          (i)      if the provisions of paragraph (h) above have
                                   been followed with the result that only
                                   eleven MP Nominees appear on the MP
                                   Preference List, and if the MP Nominee ranked
                                   tenth has more Weighted Votes cast in his
                                   favour than the MP Nominee ranked eleventh,
                                   then those MP Nominees ranked first to tenth
                                   on the MP Preference List shall be elected as
                                   Committee Members. If, however, the Weighted
                                   Votes cast in favour of the MP Nominees
                                   ranked tenth and eleventh on the MP
                                   Preference List are equal, then those MP
                                   Nominees ranked first to ninth on the MP
                                   Preference List shall be elected as Committee
                                   Members and the selection of the tenth
                                   Committee Member from the tenth and eleventh
                                   MP Nominee on the MP Preference List shall be
                                   decided by the drawing of lots in a manner to
                                   be determined by the Pool Chairman.

     15.6 RS Committee  Member  election  procedures:  The procedures set out in
          this  Clause  15.6 shall  apply to the  election  of the RS  Committee
          Members:-

         15.6.1   Each RS Pool Member shall be entitled, by notice to the
                  Executive Committee given no earlier than 90 days and no later
                  than 30 days before each annual general meeting of Pool
                  Members or, failing election of either RS Committee Member at
                  such meeting, no later than 15 days before an extraordinary
                  general meeting convened for such purpose to propose one
                  individual (a "RS Nominee") to be a RS Committee Member. The
                  RS Nominee need not be an officer or employee of a Pool Member
                  but shall not be the Chief Executive or Pool Chairman or any
                  then current nominee for the position of Chief Executive or
                  Pool Chairman. Any such proposal to be valid shall be
                  accompanied by a written statement from the RS Nominee stating
                  that he is aware of the proposal and would be prepared to
                  serve as a Committee Member if elected and identifying whether
                  he is standing for the position of SG Committee Member or IS
                  Committee Member;

         15.6.2   No later than 10 days before the annual general meeting (or,
                  as the case may be, the extraordinary general meeting) the
                  Executive Committee shall circulate (or cause to be
                  circulated) to all Pool Members and the Director a list of all
                  the names of the RS Nominees and of the Pool Members who
                  nominated them (the "RS Nominee List"). The Director may
                  object to any RS Nominee by notice to the Executive Committee
                  no later than 5 working
                                       ---------------
                  days before the annual general meeting on the grounds that
                  such RS Nominee could not reasonably be expected to represent
                  the interests of Small Generators or (as the case may be)
                  Independent Suppliers on the Executive Committee. Any RS
                  Nominee to whom the Director so objects shall not be eligible
                  for election at the relevant meeting of Pool Members as an RS
                  Committee Member and his name shall be deleted from the RS
                  Nominee List. The RS Nominee List (amended, if necessary, to
                  take account of the Director's objections) shall be circulated
                  at the annual general meeting or, as the case may be,
                  extraordinary general meeting to all Pool Members present in
                  person and (if practicable) to all Pool Members in advance of
                  such meeting;

         15.6.3   If there is no RS Nominee or no RS Nominee eligible for
                  election as the SG Committee Member or (as the case may be)
                  the IS Committee Member, the Director shall be entitled to
                  appoint and remove an individual to serve in that capacity for
                  the term of office referred to in Clause 15.4 and the
                  procedures in Clause 15.6.4 shall not apply to the election of
                  such RS Nominee;

         15.6.4   At the annual general meeting or extraordinary general meeting
                  (as the case may be) of Pool Members the following procedures
                  shall be applied (subject to Clause 15.6.5) in sequence first
                  for the election of the SG Committee Member and, secondly, for
                  the election of the IS Committee Member immediately following
                  the conclusion of the election procedures for the MP Committee
                  Members in Clause 15.5:-

                  (a)     each RS Pool Member shall be given a voting paper (in
                          this Clause 15.6, a "Voting Paper") with the name of
                          every RS Nominee who appears on the RS Nominee List
                          (amended, if appropriate, in accordance with Clause
                          15.6.2);

                  (b)     SG Pool Members shall be entitled to vote only for RS
                          Nominees nominated by SG Pool Members and whose names
                          appear on the Voting Paper ("SG Nominees");

                  (c)     IS Pool Members shall be entitled to vote only for RS
                          Nominees nominated by IS Pool Members and whose names
                          appear on the Voting Paper ("IS Nominees");

                  (d)     in the case of the election of the SG Committee
                          Member, each SG Pool Member shall rank each SG Nominee
                          on its Voting Paper in order of preference by marking
                          the SG Nominee which is its first choice for
                          membership of the Executive Committee (its "Preferred
                          SG Nominee") with the number "1" and continuing
                          numbering sequentially in order of preference until it
                          is indifferent as to the preference it accords to any
                          remaining SG Nominees;

                  (e)     in the case of the election of the IS Committee
                          Member, each IS Pool Member shall rank each IS Nominee
                          on its Voting Paper in order of preference by marking
                          the IS Nominee which is its first choice for
                          membership of the Executive Committee (its "Preferred
                          IS Nominee") with the number "1" and continuing
                          numbering sequentially in order of preference until it
                          is indifferent as to the preference it accords to any
                          remaining IS Nominees. Preferred SG Nominees and
                          Preferred IS Nominees are, for the purposes of this
                          Clause 15.6, known as the "Preferred RS Nominees";

                  (f)     if a RS Pool Member has proposed a SG Nominee or an IS
                          Nominee in accordance with Clause 15.6.1, then such RS
                          Pool Member must choose that SG Nominee or (as the
                          case may be) IS Nominee as its Preferred RS Nominee;

                  (g)     the Moderator shall collect in all Voting Papers and
                          for each SG Nominee and each IS Nominee shall
                          calculate the number of Weighted Votes cast by RS Pool
                          Members in his favour and for this purpose each RS
                          Pool Member shall be deemed to have cast all its
                          Weighted Votes in favour of its Preferred RS Nominee;

                  (h)     the Moderator shall prepare a list (the "SG Preference
                          List") ranking the Preferred SG Nominees in order
                          according to the number of Weighted Votes cast for
                          each such Preferred SG Nominee, with the Preferred SG
                          Nominee with the most number of Weighted Votes being
                          at the head of the list;

                  (i)     the Moderator shall prepare a list (the "IS Preference
                          List") ranking the Preferred IS Nominees in order
                          according to the number of Weighted Votes cast for
                          each such Preferred IS Nominee, with the Preferred IS
                          Nominee with the most number of Weighted Votes being
                          at the head of the list;

                  (j)     if the RS Nominee ranked first on the SG Preference
                          List or (as the case may be) IS Preference List has
                          more Weighted Votes cast in his favour than the sum of
                          all Weighted Votes cast for all those RS Nominees
                          ranked below him on the same list, the RS Nominee
                          ranked first on the relevant list shall be elected as
                          the SG Committee Member or (as the case may be) IS
                          Committee Member and the voting procedure in this
                          Clause 15.6.4 shall terminate; and

                    (k)  if  the   condition  in  paragraph  (j)  above is  not
                         satisfied,  the RS Nominee  whose name appears last on
                         the SG  Preference  List  or (as  the case  may be) IS
                         Preference  List  shall be  removed from that list and
                         shall take no further part in the election process for
                         the  relevant RS  Committee  Members and the Moderator
                         shall transfer the Weighted Votes of all those RS Pool
                         Members  who  voted  for  that  RS  Nominee to  the RS
                         Nominee(s) who is their respective  second preference.
                         The   Moderator  shall  then   prepare a  revised  SG
                         Preference  List or (as the case may be) IS Preference
                         List in each case to which paragraph (j) above shall be
                         applied and the procedure set out in this paragraph (k)
                         shall be  repeated as often as may be  necessary  until
                         the  condition in  paragraph (j) above is satisfied in
                         relation to the relevant  list (on each occasion the RS
                         Nominee  whose name appears  last on the SG  Preference
                         List or (as the case may be) IS  Preference  List being
                         removed  from it and  the  Moderator  transferring  the
                         Weighted   Votes   of  all   those   RS  Pool   Members
                         attributable  to that RS Nominee  to the RS  Nominee(s)
                         who is their next respective preference); and

         15.6.5   If a SG Pool Member is a member of a Pool Member's Group of
                  which an IS Pool Member is also a member (or vice versa) and
                  there are no MP Pool Members in that Pool Member's Group, the
                  SG Pool Member and the IS Pool Member shall jointly notify the
                  Secretary upon receipt of the RS Nominee List at the annual
                  general meeting or, as the case may be, extraordinary general
                  meeting whether the SG Pool Member will participate in the
                  election of the SG Committee Member or the IS Pool Member will
                  participate in the election of the IS Committee Member. In the
                  former case, the IS Pool Member shall not have the right to
                  participate in the election of either RS Nominee and, in the
                  latter case, the SG Pool Member shall not have the right to
                  participate in the election of either RS Nominee. If no such
                  notification is received by the Secretary before the election
                  procedure for the RS Nominees begins, the votes of both the SG
                  Pool Member and the IS Pool Member shall be discounted and
                  ignored.

15.7 Spoilt papers:  If any Voting Paper is  incorrectly completed or otherwise
     spoilt,  the Moderator shall take no account of it or of the Weighted Votes
     purported  to be cast by it in the  conduct  of the procedures  set out in
     Clause 15.5 and/or 15.6.

15.8     Default appointment: If the procedures set out in Clause 15.5 or 15.6
         (other than Clause 15.6.3) shall result in less than the prescribed or
         (as the case may be) agreed maximum number of Committee Members
         permitted under Clause 15.1 being appointed (including where there are
         insufficient nominees nominated to fill the seats), the Director shall
         have the right to appoint and remove individuals to the Executive
         Committee as Committee Members in such numbers as may be necessary to
         provide for such maximum number of Committee Members until such time as
         another election pursuant to Clause 15.5.3 or (as the case may be)
         15.6.4 takes place. Any Committee Member appointed pursuant to this
         Clause 15.8 shall, for the purposes of Clause 23.6, represent the
         interests of all Pool Members for the time being and from time to time.

15.9 Notification of Committee Members:  The Secretary shall promptly notify all
     Pool  Members  and the  Director  of the  appointment  and  removal  of any
     Committee Member.

15.10    Removal of Committee Members:

         15.10.1  A Committee Member may be removed by vote of all those Pool
                  Members whose Weighted Votes were cast in favour of that
                  Committee Member in his election pursuant to Clause 15.5 or
                  Clause 15.6, such vote to be passed requiring a majority of 65
                  per cent. of the total number of Weighted Votes of all such
                  Pool Members (after deduction of any Weighted Votes of persons
                  who were Pool Members at the time of his election and who
                  voted in favour of him but who are no longer Pool Members).
                  For the purposes of such vote, relevant Pool Members may cast
                  only that number of Weighted Votes which they cast in favour
                  of such Committee Member in his election pursuant to Clause
                  15.5 or 15.6.

         15.10.2  A separate general meeting of those Pool Members entitled to
                  vote may be convened for the purpose of removing a Committee
                  Member and to every such separate general meeting the
                  provisions of Part III relating to general meetings of Pool
                  Members (other than Clause 10.9, save in respect of the
                  attendance by the Pool Auditor or the Director or its or his
                  duly appointed representative) shall apply mutatis mutandis
                  but so that:-

                  (a)  the necessary  quorum shall be one Pool Member entitled
                         to vote thereat; and

                  (b) notice of any such separate general meeting need be given
only to those entitled to attend the same.

  15.11  Vacation  of office by  Committee  Members:  The office of a Committee
         Member shall be vacated if:-

  15.11.1   He resigns his office by notice delivered to the Secretary; or

  15.11.2 He becomes bankrupt or compounds with his creditors generally; or

  15.11.3 He becomes of unsound mind or a patient for any purpose of any
statute relating to mental health; or

  15.11.4 He and his  alternate  fail to attend  more than three  consecutive
          meetings of the Executive Committee; or

         15.11.5   He dies; or

         15.11.6 He is removed from office pursuant to Clause 15.10.


15.12    Election of replacement Committee Members: At the time of the vacation
         of office of a Committee Member (for the purposes of this Clause 15.12
         an "Outgoing Committee Member") or as soon as is reasonably practicable
         thereafter , a replacement Committee Member shall be elected following
         the procedures set out in, in the case of an MP Committee Member,
         Clause 15.5 or, in the case of an RS Committee Member, Clause 15.6,
         provided that :-

     (a)  only Pool  Members  whose  Weighted  Votes  were cast in favour of the
          Outgoing  Committee  Member in an election  pursuant to Clause 15.5 or
          15.6 and who were, at the time of his vacation of office,  represented
          by him pursuant to Clause 23.6.1 or 23.6.2; and

     (b)  only those  persons who have become Pool  Members in the period of the
          Outgoing  Committee  Member's term of office and who were, at the time
          of his  vacation  of office,  represented  by him  pursuant  to Clause
          23.6.4

         may take part in the election of a replacement Committee Member
pursuant to this Clause 15.12.

15.13    Alternates:

     15.13.1 Each  Committee  Member  shall have the power to appoint any person
          (who may be an existing  Committee Member) to be his alternate and may
          at his discretion  remove an alternate  Committee Member so appointed.
          Any appointment or removal of an alternate  Committee  Member shall be
          effected by notice in writing  executed by the appointor and delivered
          to the  Secretary  who shall  forthwith  notify  all  other  Committee
          Members  of  such  appointment.  If  his  appointor  so  requests,  an
          alternate  Committee Member shall be entitled to receive notice of all
          meetings of the Executive Committee or of sub-committees or sub-groups
          of which his  appointor is a member and to receive a voting paper on a
          poll  instead of the  appointor.  He shall also be entitled to attend,
          speak and vote as a Committee  Member at any such meeting at which the
          Committee Member  appointing him is not personally  present and at the
          meeting to exercise and discharge all the functions, powers and duties
          of his  appointor  as a Committee  Member and for the  purposes of the
          proceedings  at the meeting the provisions of this Part IV shall apply
          as if he were a Committee  Member. He shall also be entitled to demand
          a poll  (whether at or after the meeting)  pursuant to Clause 22.3, to
          carry out consultations with Pool Members  contemplated by Clause 22.8
          insofar  as his  appointor  shall be  unable  to do so,  to act on the
          instructions  of Pool Members duly given to his appointor or to him on
          behalf of his appointor and to complete his  appointor's  voting paper
          on a poll on behalf of his appointor.

         15.13.2    Except on a poll, every person acting as an alternate
                    Committee Member shall have one vote for each Committee
                    Member for whom he acts as alternate, in addition to his own
                    vote if he is also a Committee Member. On a poll, an
                    alternate Committee Member shall be entitled (if his
                    appointor is unable to do so) to exercise (on behalf of his
                    appointor and by completion of the appointor's separate
                    voting paper) all of the votes which his appointor is
                    entitled to cast, in addition to any votes which the
                    alternate is entitled to cast in his own capacity if he is
                    also a Committee Member. Execution by an alternate Committee
                    Member of any resolution in writing of the Executive
                    Committee shall, unless the notice of his appointment
                    provides to the contrary, be as effective as execution by
                    his appointor.

         15.13.3    An alternate Committee Member shall ipso facto cease to be
                    an alternate Committee Member if his appointor ceases for
                    any reason to be a Committee Member.

         15.13.4 References in this Agreement to a Committee Member shall,
unless the context otherwise requires, include his duly appointed alternate.

16.      POOL CHAIRMAN

     16.1 Pool  Chairman:  There shall at all times be a Chairman of the pooling
          and settlement  arrangements  for the electricity  industry in England
          and  Wales  established  by  this  Agreement  (the  "Pool  Chairman").
          -------------

16.2     Appointment and Term:

         16.2.1   The election of a Pool Chairman shall take place either:-

                          (i)      at the annual general meeting or (as the case
                                   may be) an extraordinary general meeting of
                                   Pool Members convened for that purpose (where
                                   practicable) held not less than three months
                                   before the end of the term of the then
                                   current Pool Chairman; or

                          (ii)     should the Executive Committee so decide, by
                                   a postal vote in accordance with Clause 16.4,
                                   such postal vote to have a closing date which
                                   (where practicable) is not less than three
                                   months before the end of the term of the then
                                   current Pool Chairman.

     16.2.2 Subject to Clause  16.2.4,  the term of office of the Pool  Chairman
          shall be from 1st April in the year of his  election to the 31st March
          falling two years thereafter provided that:-

                          (i)      where the Pool Chairman is to be elected at
                                   an annual general meeting or (as the case may
                                   be) an extraordinary general meeting of Pool
                                   Members, if the meeting at which he is
                                   elected is held after 1st April, his term of
                                   office shall commence from such date as the
                                   Pool Members in general meeting shall resolve
                                   (being no earlier than the date of such
                                   meeting);

                          (ii)     where the Pool Chairman is to be elected by
                                   postal vote, if the closing date of such
                                   postal vote is after 1st April, his term of
                                   office shall commence from such date as shall
                                   be set out in the notice of postal vote which
                                   shall have been sent to all Pool Members by
                                   the Chief Executive in accordance with Clause
                                   16.4; and

                          (iii)    his term of office shall expire before 31st
                                   March if he resigns or is unable for whatever
                                   reason to continue to act or if a successor
                                   Pool Chairman is elected with a term of
                                   office which Pool Members either in general
                                   meeting or (as the case may be) by the terms
                                   of a postal vote resolve is to commence
                                   before that date.

         16.2.3   The appointment of the Pool Chairman shall be on such terms
                  and conditions (including, but not limited to, terms and
                  conditions in relation to reimbursement, hours of work and
                  removal (subject to Clause 13.1.2)) as have been approved by
                  Pool Members in general meeting. Any amendment to those terms
                  and conditions shall require the prior approval of Pool
                  Members in general meeting.

         16.2.4   Not later than three months prior to the end of the two year
                  term of the then current Pool Chairman, Pool Members may
                  either (i) call and hold a general meeting or (ii) call and
                  hold a postal vote and, if the Pool Chairman agrees, may
                  resolve to extend the term of appointment of the Pool Chairman
                  by one year. If the resolution is approved in accordance with
                  the terms of this Agreement then the term of appointment shall
                  be so extended provided that under no circumstances shall the
                  term of appointment exceed three years.

         16.2.5   If at any time the Pool Chairman shall resign or be unable for
                  whatever reason to continue to act, an extraordinary general
                  meeting shall be called in accordance with Clause 9.4 or a
                  postal vote shall be called in accordance with Clause 16.4 for
                  the purposes of electing a successor Pool Chairman. Unless
                  that successor Pool Chairman himself is removed, resigns or is
                  unable for whatever reason to continue to act, he shall hold
                  office until the 31st March falling closest to the date two
                  years after the date of his election and his appointment may
                  be extended in accordance with Clause 16.2.4.

     16.3 Transitional  Provisions:  The  appointment of the Pool Chairman whose
          two year term of office starts on 1st April,  1996 is hereby  ratified
          and confirmed by all Pool Members.

     16.4 Election  procedure (postal vote): The Executive  Committee may (where
          practicable)  resolve to call a postal vote to elect a Pool  Chairman.
          Where the Executive  Committee so resolves,  such postal vote shall be
          held in accordance with the following principles:-

     16.4.1 The Executive  Committee  shall  instruct the Chief  Executive,  who
          shall send a notice to Pool  Members,  stating  that a postal vote has
          been called and inviting nominations to be sent to the Chief Executive
          within a period of not less than 21 days from the date of such notice;

     16.4.2 Once such  period for  nomination  has closed,  the Chief  Executive
          shall send to all Pool Members a ballot paper containing a list of all
          eligible  nominees  and a closing  date for the  receipt  by the Chief
          Executive of completed ballot papers,  such date being no less than 21
          days from the date of such ballot paper; and

     16.4.3 Each Pool Member shall have one vote and the successor Pool Chairman
          shall be elected by single  transferable  vote in accordance  with the
          procedures approved by the Executive Committee.

16.5     Election procedure (general meeting):

         16.5.1   Where any successor Pool Chairman is to be elected at an
                  annual general meeting or (as the case may be) extraordinary
                  general meeting, nominations shall be delivered no later than
                  21 days prior to the relevant annual general meeting or (as
                  the case may be) extraordinary general meeting.

         16.5.2   At the relevant annual general meeting or (as the case may be)
                  extraordinary general meeting, all eligible nominees shall be
                  proposed by the Pool Chairman (failing whom, the Chief
                  Executive). Each Pool Member shall have one vote and the
                  successor Pool Chairman shall be elected by single
                  transferable vote in accordance with the procedures approved
                  by the Executive Committee.

16.6     Nominations: Any Pool Member can nominate any one person, whether or
         not an employee of a Pool Member, to be Pool Chairman. Nominations made
         pursuant to this Clause 16.6 shall be delivered in writing to the Chief
         Executive within any time period specified pursuant to Clause 16.4 or
         (as the case may be) Clause 16.5. Any such nomination shall only be
         valid where accompanied by a written statement from the nominee stating
         that he is aware of the proposal and would be prepared to serve as Pool
         Chairman in accordance with this Agreement and the relevant terms and
         conditions if elected.

16.7     Functions: The Pool Chairman shall have and carry out only such duties
         and responsibilities and exercise such powers as are expressly provided
         in this Agreement and in his terms of reference approved by the
         Executive Committee from time to time. The Pool Chairman shall exercise
         impartially all such duties, responsibilities and powers.

     16.8 No voting  rights:  The Pool Chairman in his capacity as Pool Chairman
          shall have no voting rights under this Agreement.

     16.9 Indemnity: The Pool Chairman shall be indemnified and kept indemnified
          jointly and  severally by all Pool Members  (and,  as between the Pool
          Members,   rateably  in  the   proportion   which   their   respective
          Contributory  Shares  bear one to the other at the time of  receipt of
          the  request for  indemnification)  from and against any and all costs
          (including  legal  costs),   charges,   expenses,   damages  or  other
          liabilities  properly  incurred  or suffered by him in relation to his
          office as Pool  Chairman  or the due  exercise  by him of his  powers,
          duties and  responsibilities as Pool Chairman and all claims,  demands
          or  proceedings  arising out of or in connection  with the same except
          any such costs, charges,  expenses, damages or other liabilities which
          are suffered or incurred or  occasioned  by the wilful  default or bad
          faith of, or breach of duty or trust by, the Pool  Chairman.  The Pool
          Members shall, upon request,  provide the Pool Chairman with a written
          deed of indemnity to that effect.


<PAGE>


17.      CHIEF EXECUTIVE, SECRETARIAT AND SECRETARY

17.1     Chief Executive:

         17.1.1   Subject to Clause 15.7.4, a chief executive of the Executive
                  Committee (the "Chief Executive") shall be appointed and be
                  subject to removal and replacement by resolution of the
                  Executive Committee passed by 70 per cent or more of the votes
                  of all Committee Members (after consultation with the Pool
                  Chairman). The Chief Executive shall be appointed on such
                  terms and conditions as they see fit.

         17.1.2   The Chief Executive shall undertake such duties and
                  responsibilities and exercise such powers in relation to the
                  Executive Committee and its activities as the Executive
                  Committee may from time to time assign to or vest in him.

         17.1.3   The Chief Executive shall have the right and shall be obliged
                  to attend all meetings of the Executive Committee and all
                  meetings of the Pool Members in general meeting. The Chief
                  Executive in his capacity as Chief Executive shall have no
                  voting rights under this Agreement. If for any reason the
                  Chief Executive is unable to attend any such meeting, he shall
                  nominate a representative to attend in his place.

         17.1.4   The Executive Committee shall make arrangements for the
                  remuneration of the Chief Executive and the payment of his
                  costs and expenses and the same shall be recovered in
                  accordance with the PFA Accounting Procedure or as otherwise
                  directed by the Executive Committee from time to time.

17.2     Secretariat:

         17.2.1   The Executive Committee may from time to time appoint and
                  remove, or make arrangements for the appointment and removal
                  of, such personnel as the Executive Committee requires to
                  assist the Executive Committee, any sub-committee of the
                  Executive Committee, the chairman of the Executive Committee
                  or any such sub-committee, the Pool Chairman, the Chief
                  Executive or the Secretary in the proper performance of its or
                  his duties and responsibilities, in each such case upon such
                  terms and conditions as the Executive Committee sees fit.

         17.2.2   Any personnel referred to in Clause 17.2.1 shall undertake
                  such duties and responsibilities and exercise such powers as
                  the Executive Committee may from time to time assign to or
                  vest in him, it or them.

         17.2.3   The Executive Committee shall make arrangements for the
                  remuneration of such personnel as are referred to in Clause
                  17.2.1 and the payment of their costs and expenses and the
                  same shall be recovered in accordance with the PFA Accounting
                  Procedure or as otherwise directed by the Executive Committee
                  from time to time.

17.3     Secretary:

         17.3.1   The Executive Committee may from time to time appoint and
                  remove, or make arrangements for the appointment and removal
                  of, the Secretary on such terms and conditions as it sees fit.

         17.3.2 The Secretary in his capacity as Secretary shall have no voting
rights under this Agreement.

         17.3.3   The Secretary shall have and carry out only such duties and
                  responsibilities as are expressly provided in this Agreement
                  and such other reasonable secretarial and administrative
                  duties and responsibilities as may from time to time be
                  delegated to it by the Executive Committee. If at any time
                  there is no Secretary, the responsibilities and duties of the
                  Secretary under this Agreement shall become those of the Chief
                  Executive or, if there shall be no Chief Executive, the
                  Executive Committee until such time as a Secretary is
                  appointed pursuant to Clause 17.3.1 or a Chief Executive is
                  appointed pursuant to Clause 17.1.1 (and notices to the
                  Secretary under this Agreement shall be re-addressed
                  accordingly).

         17.3.4   The Secretary shall be entitled to receive such remuneration
                  (if any) as the Executive Committee may from time to time
                  approve, such remuneration to be paid to it at such times and
                  in such manner as the Executive Committee shall from time to
                  time direct and to be recovered in accordance with the PFA
                  Accounting Procedure or as otherwise directed by the Executive
                  Committee from time to time. Further, the Secretary shall be
                  paid its reasonable travelling, hotel and incidental expenses
                  of attending and returning from meetings of the Executive
                  Committee or any sub-committee thereof and any general
                  meetings and separate general meetings of Pool Members and all
                  costs and expenses properly and reasonably incurred by it in
                  the performance of its duties and responsibilities under this
                  Agreement. All such costs and expenses shall be recovered in
                  accordance with the PFA Accounting Procedure or as otherwise
                  directed by the Executive Committee from time to time.

17.4     Indemnity:

     17.4.1 All Pool Members  shall  jointly and  severally  indemnify  and keep
          indemnified the Chief Executive,  the Contract Manager,  the personnel
          referred to in Clause  17.2.1,  the  Secretary  and each member of any
          sub-committee   of  the  Executive   Committee  or  of  any  sub-group
          established by any such sub-committee  (other than a Committee Member,
          but without  prejudice  to Clause  23.3.4)  (and,  as between the Pool
          Members, according to their respective Contributory Shares at the time
          of receipt of the  request for  indemnification)  from and against any
          and all costs (including legal costs), charges,  expenses,  damages or
          other liabilities properly incurred or suffered by the Chief Executive
          in relation to his office as Chief  Executive  or (as the case may be)
          the  Secretary  in  relation  to its  office as  Secretary  or the due
          exercise  by the  Chief  Executive,  the  Contract  Manager,  the said
          personnel,  the  Secretary  or (as the case may be) any such member of
          his,  their or its  powers,  duties  and  responsibilities  under this
          Agreement and all claims,  demands or proceedings arising out of or in
          connection  with the same  except any such costs,  charges,  expenses,
          damages  or other  liabilities  which  are  suffered  or  incurred  or
          occasioned  by the  wilful  default  or bad  faith  of,  or  breach of
          obligation  by,  the  Chief  Executive,  the  Contract  Manager,  such
          personnel, the Secretary or (as the case may be) any such member.

         17.4.2   The Pool Members undertake to enter into an indemnity in
                  favour of any employer of the Chief Executive, any personnel
                  referred to in Clause 17.2.1, the Secretary or (as the case
                  may be) any such member of any sub-committee of the Executive
                  Committee or of any sub-group established by any such
                  sub-committee as is referred to in Clause 17.4.1 under which
                  they shall jointly and severally indemnify and keep
                  indemnified any such employer in respect of all acts and
                  omissions of the Chief Executive, the Contract Manager, such
                  personnel, the Secretary or (as the case may be) any such
                  member in the performance of his, their or its rights, powers,
                  duties and responsibilities under this Agreement (and, as
                  between the Pool Members, according to their respective
                  Contributory Shares at the time of receipt of the request for
                  indemnification under the relevant indemnity).

18.      PROCEEDINGS OF THE EXECUTIVE COMMITTEE

18.1     Meetings:

         18.1.1   Meetings of the Executive Committee (other than special
                  meetings referred to in Clause 18.1.3) shall be held at least
                  quarterly (or at such shorter regular intervals as may be
                  agreed from time to time by the Executive Committee) at such
                  time and place in any jurisdiction in which any Pool Member is
                  incorporated or has its principal place of business as may be
                  agreed from time to time by the Executive Committee (or, in
                  default of agreement, as stipulated by the Pool Chairman).

         18.1.2   Meetings of the Executive Committee shall be convened by the
                  Secretary upon giving to the Committee Members, the Pool
                  Chairman, the Chief Executive (if any), the Settlement System
                  Administrator, the Director and the Pool Auditor and (where
                  matters the subject of the agenda referred to in Clause 18.1.4
                  concern directly the functions, duties or responsibilities of
                  any Externally Interconnected Party (not being a Pool Member),
                  the Pool Funds Administrator, the Grid Operator and/or the
                  Ancillary Services Provider) the relevant one(s) of them at
                  least five working days' notice of the place, the day and the
                  hour of the relevant meeting.

     18.1.3 Special  meetings of the Executive Committee shall be convened upon
          the request of any  Committee Member,  the Pool Chairman or the Chief
          Executive  Such request shall be made in writing to the Secretary and
          shall state the matters to be considered at that special meeting. Upon
          receipt of such request the Secretary shall convene in accordance with
          Clause 18.1.2 without delay such special  meeting for a date occurring
          as soon as practicable thereafter but not less than five nor more than
          ten working days after receipt of such request. If the Secretary shall
          fail so to convene a special  meeting the Committee Member which made
          such  request,  the Pool  Chairman  or (as the case may be) the Chief
          Executive may himself  convene a special meeting,  but any meeting so
          convened shall not be held after the expiration of two months from the
          date of such request.  A special meeting  convened  under this Clause
          18.1.3 by a Committee Member, the Pool Chairman or the Chief Executive
          shall be convened in the same manner,  as nearly as possible, as that
          in which meetings of the Executive Committee are to be convened by the
          Secretary pursuant to Clause 18.1.2.

     18.1.4 Any notice given under  Clause  18.1.2 shall be exclusive of the day
          on which it is served or deemed to be served  and of the day for which
          it is given and shall be accompanied by an agenda of the matters to be
          considered  at the  relevant  meeting  together  with  any  supporting
          documents or papers then  available to the  Secretary.  Any  Committee
          Member may advise additional  matters which he wishes to be considered
          at such  meeting by notice to all other  Committee  Members,  the Pool
          Chairman, the Chief Executive (if any), the Secretary,  the Settlement
          System  Administrator,  the  Director  and the Pool Auditor and (where
          such  additional  matters  concern  directly the functions,  duties or
          responsibilities of any Externally  Interconnected  Party (not being a
          Pool Member), the Pool Funds  Administrator,  the Grid Operator and/or
          the Ancillary  Services Provider) the relevant one(s) of them given no
          later than three  working days before the date of such  meeting.  Only
          matters  identified in such agenda or so advised shall be discussed or
          resolved upon at such meeting.  The accidental omission to give notice
          of a meeting or accompanying agenda or supporting  documents or papers
          to, or the non-receipt of notice of a meeting or  accompanying  agenda
          or supporting  documents or papers by, any person  entitled to receive
          notice shall not invalidate the proceedings at that meeting.

         18.1.5   For any meeting of the Executive Committee, the periods and
                  methods of notice referred to in the foregoing provisions of
                  this Clause 18 may be waived prospectively or retrospectively
                  with the consent in writing of all such persons as are
                  entitled to attend the relevant meeting.

     18.1.6 The Secretary shall prepare minutes of all meetings of the Executive
          Committee and shall provide copies thereof to all such persons as were
          entitled to attend the relevant meeting as soon as practicable (and in
          any event within ten working days) after the relevant meeting has been
          held.  Each person who attended such meeting shall notify his approval
          or disapproval  of the minutes  thereof to the Secretary no later than
          ten working days after  receipt  thereof and, if he fails to do so, he
          or it shall be deemed to have approved the same.  The Secretary  shall
          record any such  disapproval in the minutes unless the same shall have
          been  withdrawn  or the  minutes  amended  with the  agreement  of the
          Executive Committee.  The Secretary shall provide copies of minutes of
          meetings  of the  Executive  Committee  to any  other  Party  within a
          reasonable time after request therefor provided that the said time for
          approving or disapproving the same has expired. Further, the Secretary
          shall provide  copies of such minutes to such persons as the Executive
          Committee may from time to time direct within a reasonable  time after
          receipt of such direction.

19.      CONDUCT OF EXECUTIVE COMMITTEE MEETINGS

19.1     General: Chairman:

         19.1.1   Subject as provided in Clauses 13, 18 and 22 and this Clause
                  19, the Executive Committee may meet for the transaction of
                  business, and adjourn and otherwise regulate its meetings, as
                  it shall see fit.

         19.1.2 The Pool Chairman shall preside as chairman at every meeting of
the Executive Committee provided that:-

                  (a)     if the Pool Chairman is unable to attend any meeting,
                          he shall nominate another individual to preside as
                          chairman at that meeting in his place. Such individual
                          shall be a director or senior executive of one of the
                          Pool Members but shall not be a Committee Member or an
                          alternate for any Committee Member; and

                  (b)     if there is no Pool Chairman or the Pool Chairman or
                          his duly appointed nominee shall not be present within
                          15 minutes after the time appointed for the holding of
                          the meeting or the Pool Chairman is unwilling to act,
                          the Committee Members present may appoint one of their
                          number to be chairman of the meeting.

         19.1.3 The chairman of the meeting in his capacity as chairman shall
not have any vote at meetings of the Executive Committee.

19.2     Quorum: No business shall be transacted at a meeting of the Executive
         Committee unless a quorum is present throughout that meeting. Six
         Committee Members present in person or by their respective alternates
         shall constitute a quorum.

19.3     Lack of Quorum: If, within half an hour from the time appointed for
         holding any meeting of the Executive Committee, a quorum is not
         present, the meeting shall be adjourned to the same day in the next
         week at the same time and place and if at the adjourned meeting a
         quorum is not present within half an hour from the time appointed for
         holding the meeting, those present shall constitute a quorum.

     19.4 Representation of non-Committee Members: Each of the Settlement System
          Administrator,  the Pool  Chairman,  the Director and the Pool Auditor
          (or its or his duly appointed  representative) shall have the right to
          attend  and  speak  (but  not to vote) at  meetings  of the  Executive
          Committee.  Each  Externally  Interconnected  Party  (not being a Pool
          Member) and each of the Pool Funds  Administrator,  the Grid  Operator
          and  the   Ancillary   Services   Provider  (or  its  duly   appointed
          representative)  shall be  entitled to attend and speak (but not vote)
          at meetings of the Executive  Committee  only where  matters  directly
          concerning  its  functions,   duties  or  responsibilities  have  been
          identified  or advised as provided in Clause 18.1.4 or if so requested
          by the Executive Committee. The Chief Executive (or his duly appointed
          representative)  shall  have the  right to attend  and speak  (but not
          vote) at meetings of the  Executive  Committee and shall be obliged so
          to attend. With the exception of attendances by the Pool Chairman, the
          Chief Executive and the Pool Auditor,  no payment shall be made to any
          person  who has the  right by  virtue  of this  Clause  19.4 to attend
          Executive Committee meetings in respect of any such attendance.

19.5     Written resolutions: A resolution in writing, executed by or on behalf
         of each Committee Member, shall be as valid and effectual as if it had
         been passed at a meeting of the Executive Committee duly convened and
         held and may consist of several instruments in like form and executed
         by or on behalf of one or more of such Committee Members. Any proposed
         resolution in writing shall be circulated to all those persons who
         would have been entitled to attend a meeting of the Executive Committee
         at which such resolution could properly have been passed.

19.6     Default in appointment: All acts done by any meeting of the Committee
         Members or of a sub-committee of the Executive Committee shall,
         notwithstanding that it be afterwards discovered that there was some
         defect in the appointment of such Committee Member, be as valid as if
         such person had been duly appointed.

20.      DELEGATION

20.1 Sub-committees: The Executive Committee may establish sub-committees. Each
sub-committee:-

         20.1.1   Shall be composed of such persons (whether or not Committee
                  Members) and shall discharge such rights, powers, duties and
                  responsibilities as from time to time the Executive Committee
                  considers desirable to delegate to it; and

         20.1.2   In the exercise of its rights and powers and the performance
                  of its duties and responsibilities delegated to it by the
                  Executive Committee shall at all times conduct itself and its
                  affairs in a manner which it considers best designed to give
                  effect to the principal objects and purpose set out in Clause
                  4.1.2 and to promote, and not obstruct, the fair and efficient
                  operation of the procedures referred to in Clause 4.1.3 so
                  that the objectives set out in Clause 4.1.3 are thereby
                  achieved; and

         20.1.3   Shall be given written terms of reference and, unless
                  otherwise varied by the Executive Committee, the provisions of
                  Clauses 18 and 19 shall apply mutatis mutandis to meetings of
                  such sub-committee and the provisions of Clauses 19.4, 23.3.1,
                  23.3.2 and 23.3.3 shall apply mutatis mutandis in relation to
                  any such sub-committee and the members thereof; and

         20.1.4   May establish sub-groups to assist in the discharge of the
                  rights, powers, duties and responsibilities of such
                  sub-committee, each of which sub-groups shall be given written
                  terms of reference and, unless otherwise varied by the
                  Executive Committee or any sub-committee acting on the
                  authority of the Executive Committee, the provisions of
                  Clauses 18 and 19 shall apply mutatis mutandis to meetings of
                  such sub-groups and the provisions of Clauses 23.3.1, 23.3.2,
                  and 23.3.3 shall apply mutatis mutandis in relation to each
                  such sub-group and the members thereof.

20.2     Nominees: Upon written request of the Executive Committee or, in the
         case of the Settlement System Administrator, Order issued by the
         Contract Manager under Schedule 4, each Pool Member and the Settlement
         System Administrator shall:-

         20.2.1   Nominate one or more persons knowledgeable in the matters
                  referred to, or the subject of consideration by, the relevant
                  sub-committee to attend at meetings of, and otherwise
                  participate as a member of, any sub-committee established by
                  the Executive Committee; and

         20.2.2 Procure that such nominee(s) shall so attend and participate at
such time or times as the Executive Committee or such sub-committee may require,

         provided that a Pool Member shall not be required in any period of 12
         months to make available nominees for more than 60 days in aggregate.
         Save as provided by Clause 23.5 no payment shall be made to Pool
         Members in respect of any such attendance or participation.

20.3     Member's responsibilities: To the extent not inconsistent with the
         provisions of Clauses 20.1.1, 20.1.2 and 20.1.3 a member of any
         sub-committee established by the Executive Committee shall be free to
         represent the interests of the person or persons which nominated him to
         that sub-committee but each such person acknowledges and agrees the
         subordination of those interests to the responsibilities of such
         sub-committee under Clause 20.1.2.

20.4     Chief Executive: The Executive Committee may from time to time delegate
         all or any of its rights, powers, duties and responsibilities under
         this Agreement to the Chief Executive upon such terms and conditions as
         the Executive Committee thinks fit.

20.5     Effect of decisions: Resolutions of sub-committees shall not have
         binding effect (a) unless and then only to the extent that the
         Executive Committee shall have delegated the relevant decision-making
         powers to the sub-committee, or (b) unless approved by resolution of
         the Executive Committee (and then subject to Clause 13). Meetings of
         such sub-committees shall, so far as possible, be arranged so that
         minutes of such meetings can be circulated to each Committee Member in
         sufficient time for consideration before the next following regular
         meeting of the Executive Committee. Resolutions of sub-groups shall not
         have binding effect. The Executive Committee shall remain at all times
         responsible for the actions of all its sub-committees and sub-groups.

20.6     Other delegation: Subject to any direction to the contrary by Pool
         Members in general meeting but without prejudice to the Executive
         Committee's rights under Clauses 20.1 and 20.4, the Executive Committee
         may from time to time delegate in any particular case all or any of its
         rights, powers, duties and responsibilities under this Agreement,
         including any decision-making powers and the conduct of any review or
         consultation and the preparation and submission of any report required
         of it under this Agreement, to such person or persons as it thinks fit
         and on such terms and conditions as it thinks fit and shall require
         that, in the performance of the delegated duties, such person or
         persons shall conform to any regulations that may be imposed on it or
         them by the Executive Committee.

21.      [Not used].

22.      VOTING

22.1     Voting: The chairman of the relevant meeting of the Executive Committee
         and any Committee Member may demand that any question or matter arising
         at a meeting of the Executive Committee be put to a vote of Committee
         Members. Any vote so demanded shall be taken forthwith or at such other
         time as such chairman directs not being later than the date of the next
         meeting of the Executive Committee. Any demand for a vote may, before
         the vote is taken, be withdrawn.

22.2     Simple majority: Subject as provided in the following provisions of
         this Clause 22, any question or matter arising at a meeting of the
         Executive Committee shall be decided by a simple majority of the votes
         cast at the meeting by Committee Members. On any such question or
         matter each Committee Member shall be entitled to one vote. In the
         event of an equality of votes on any resolution put to the Executive
         Committee, the matter the subject of the relevant resolution shall be
         remitted to the Committee Members for decision on a poll.

     22.3 Demand for a poll:  In respect of any matter or question  which is put
          to a vote of Committee Members a poll may be demanded (before or after
          the simple majority vote) either:-

         22.3.1 At the meeting at which the simple majority vote takes place, by
the chairman of the meeting or by any Committee Member; or

         22.3.2   By no later than five working days after such meeting, by
                  notice in writing to the Chief Executive by any Committee
                  Member (whether or not present at the relevant meeting).

22.4     Effect of decision: A decision duly made at a meeting of the Executive
         Committee shall (unless otherwise determined by the Executive Committee
         or otherwise provided by the terms of the decision) have immediate
         effect, unless a poll be duly demanded in accordance with Clause 22.3,
         in which case, pending the outcome of the vote on a poll, the decision
         shall cease to or shall not have effect.

22.5     Withdrawal of demand: Any demand for a poll may be withdrawn by the
         person who made it at any time provided that notice of withdrawal is
         received by the Chief Executive by no later than the seventh working
         day following the date of the Executive Committee meeting at which the
         vote took place. The Chief Executive shall as soon as reasonably
         practicable notify all Parties and all other persons entitled or
         required to attend general meetings of Pool Members of receipt of any
         such notice of withdrawal.

22.6     Conduct of a poll: The Secretary shall without delay following the
         demand for, or the remittance of a matter for decision on, a poll
         despatch to each Committee Member a voting paper in such form as shall
         be agreed by the chairman of the Executive Committee meeting at which
         the matter in question was considered or (failing him) the Chief
         Executive but which shall in any event set out the full text of the
         resolution in respect of which the poll is required (which shall be the
         same as the resolution which was put to a simple majority vote), shall
         provide for each Committee Member to cast votes for or against the
         resolution and shall specify the date by which votes must be lodged by
         Committee Members. The Secretary shall at the same time give notice to
         all Parties that a poll has been demanded and shall specify in such
         notice the resolution on which the poll has been called (if
         applicable), the identity of the person (or persons) who has demanded
         the poll and the date by which votes must be lodged by the Committee
         Members. The accidental omission to issue a voting paper or to give
         notice of a poll, or the non-receipt of a voting paper or such a notice
         by, any person entitled to receive the voting paper or (as the case may
         be) the notice shall not invalidate the conduct of the poll or the
         result thereof.

22.7     Votes on a poll: on a vote on a poll:-

         22.7.1   The Committee Members shall in aggregate be entitled to a
                  number of votes equal to the number of votes which the Pool
                  Members would have been entitled to cast on a poll at a
                  general meeting if such meeting had taken place on the day of
                  the Executive Committee meeting at which the matter in
                  question was considered;

         22.7.2   Each Committee Member shall have the votes attributable to his
                  Constituents and shall cast such votes in accordance with the
                  individual written instructions of each such Constituent, but
                  so that no Constituent shall be entitled to instruct that the
                  votes attributable to it be cast more than once;

     22.7.3 In the absence of any written  instructions from any Constituent,  a
          Committee  Member shall not be entitled to cast any votes on behalf of
          that Constituent;

         22.7.4 A Constituent may instruct the relevant Committee Member to
abstain from casting any or a specified number of votes on its behalf;

         22.7.5   The votes cast by a Committee Member shall not be valid
 unless:-

                  (a)     the relevant voting paper shall have been received by
                          the Secretary on or before the date falling 10 working
                          days after the date on which the voting papers were
                          despatched to Committee Members and the votes cast in
                          such voting paper accord with the written instructions
                          referred to in paragraph (b) below;

                    (b)   accompanied by a copy of the written instructions
                          given by or on behalf of the Constituent(s) whose
                          votes the Committee Member is entitled to cast;

                    (c)   the Committee Member in other respects shall have
                          complied with the procedures for votes on a poll (if
                          any) from time to time established by the Executive
                          Committee;

         22.7.6   Any Constituent on whose instructions a Committee Member is
                  required to act in accordance with the foregoing provisions
                  shall be entitled to make arrangements with any other
                  Constituent on whose instructions that same Committee Member
                  is required to act for the requisite written instructions to
                  be given on its behalf by that other Constituent. Details of
                  any such arrangement shall promptly be given to the Secretary.

22.8     65 per cent. majority: A resolution on a poll shall be decided by a
         majority of not less than 65 per cent. of the votes duly cast. The
         Secretary shall as soon as reasonably practicable after the expiry of
         the 10 working day period for return of voting papers referred to in
         Clause 22.7.5(a) ascertain the results of the poll in consultation with
         the Pool Chairman or (failing him) the Chief Executive and the Chief
         Executive or (failing him) the Secretary shall as soon as practicable
         thereafter notify all Parties and all other persons entitled or
         required to attend general meetings of Pool Members of the outcome of
         the poll. The result of the poll shall be deemed to be the resolution
         of the meeting at which or after which the poll was demanded.

22.9     Responsibilities of Committee Members: The Committee Members shall
         consult the Pool Members whose votes they are entitled to cast as soon
         as reasonably practicable following the demand for a poll and shall be
         required to cast, or to refrain from casting, the votes of such Pool
         Members in accordance with their individual instructions. The
         provisions of Clause 23.1 shall not apply in respect of any vote
         conducted on a poll.

22.10    Referral to general  meetings:  The  provisions  of this Clause 22 are
         subject to the requirements of referral to the Pool Members in general
         meeting described in Clause 13.4.

22.11   Civil  emergencies:  The  provisions  of this Clause 22 are subject to
         the provisions of Clause 61.9.

     23.  COMMITTEE  MEMBERS'  RESPONSIBILITIES  AND  PROTECTIONS;  POOL  MEMBER
          REPRESENTATION

23.1     Executive Committee's responsibilities: In the exercise of its powers
         and the performance of its duties and responsibilities under this
         Agreement the Executive Committee shall at all times conduct itself and
         its affairs in a manner which it considers best designed to give effect
         to the principal objects and purpose set out in Clause 4.1.2 and to
         promote, and not obstruct, the fair and efficient operation of the
         procedures referred to in Clause 4.1.3 so that the objectives set out
         in Clause 4.1.3 are thereby achieved. To the extent not inconsistent
         with the responsibilities of the Executive Committee under this Clause
         23.1 a Committee Member shall be free to give effect to his
         responsibilities under Clause 23.2 but each of the Pool Members whom
         such Committee Member represents acknowledges and agrees the
         subordination of such Committee Member's responsibilities under Clause
         23.2 to the responsibilities of the Executive Committee under this
         Clause 23.1.

23.2     Committee Members' responsibilities: In the exercise of his powers and
         the performance of his duties and responsibilities as a Committee
         Member under this Agreement a Committee Member shall represent those
         Pool Members which he is required to represent from time to time in
         accordance with the provisions of Clause 23.6.

23.3     Protections:

         23.3.1   The Executive Committee, each Committee Member, the Pool
                  Chairman, the Chief Executive, the Contract Manager and the
                  Secretary shall be entitled to rely upon any communication or
                  document reasonably believed by it or him to be genuine and
                  correct and to have been communicated or signed by the person
                  by whom it purports to be communicated or signed and shall not
                  be liable to any of the Parties for any of the consequences of
                  such reliance.

         23.3.2   The Executive Committee, each Committee Member, the Pool
                  Chairman, the Chief Executive, the Contract Manager and the
                  Secretary may in relation to any act, matter or thing
                  contemplated by this Agreement act on the opinion or advice
                  of, or any information from, any lawyer, banker, valuer,
                  broker, accountant or any other specialist or professional
                  adviser given within the field of expertise usually ascribed
                  to persons of such description or the specialist field of
                  expertise for which he has been retained and duly instructed
                  so to act by the Executive Committee, and shall not be liable
                  for the consequences of so acting. The appointment of any such
                  adviser to the Executive Committee shall be approved by the
                  Executive Committee before any such cost is charged to the PFA
                  Accounting Procedure.

         23.3.3   In the event of any conflict or inconsistency, any directions
                  and instructions of the Director (which the Director is
                  entitled under his statutory or regulatory powers to issue or
                  give) shall prevail over the duties and responsibilities of
                  the Executive Committee or the Secretary under this Agreement
                  and no liability whatsoever shall attach to the Executive
                  Committee or any Committee Member or the Pool Chairman or the
                  Chief Executive or the Contract Manager or the Secretary (as
                  the case may be) as a result of due compliance by it or him
                  with any such directions and instructions.

     23.3.4 Each  Committee  Member shall be  indemnified  and kept indemnified
          jointly and  severally  by all Pool  Members and, as between all Pool
          Members,   rateably  in  the   proportion  which   their   respective
          Contributory  Share  bear one to the other at the time of  receipt of
          the  request  for indemnification  from and against any and all costs
          (including  legal  costs), charges,  expenses,   damages  or  other
          liabilities  properly incurred  or suffered by him in relation to the
          Executive  Committee or his office  as  Committee  Member or the due
          exercise  by him of  his  powers,  duties  and  responsibilities as a
          Committee Member and all claims, demands or proceedings arising out of
          or in  connection  with the same  except any such costs and  expenses
          referred to in Clause 23.4 which have been  recovered  in accordance
          with  the PFA  Accounting Procedure  and any  such  costs,  charges,
          expenses, damages or other liabilities which are suffered or incurred
          or occasioned by the wilful default or bad faith of, or breach of duty
          or trust by, such Committee Member.

         23.3.5 The Pool Funds Administrator acknowledges and agrees that it
holds the benefit of Clause 23.3.4 as trustee and agent for each Committee
Member.

     23.3.6 Each Pool  Member  shall,  upon  request  by any  Committee  Member,
          provide that Committee  Member with a written deed of indemnity in the
          terms set out in Clause 23.3.4.

23.4     Committee Members' costs and expenses: Each Committee Member and each
         member of any sub-committee or sub-group of the Executive Committee may
         be paid his reasonable travelling, hotel and incidental expenses of
         attending and returning from meetings of the Executive Committee or any
         such sub-committee or sub-group and shall be paid all expenses properly
         and reasonably incurred by him in the conduct of the business of the
         Executive Committee or the relevant sub-committee or sub-group or in
         the discharge of his duties as a Committee Member or (as the case may
         be) a member of the relevant sub-committee or sub-group. All such
         expenses shall be recovered in accordance with the PFA Accounting
         Procedure.

23.5     Committee's costs and expenses: The Executive Committee and each of its
         sub-committees and sub-groups shall be entitled to recover all its
         costs and expenses properly incurred in accordance with the PFA
         Accounting Procedure. For this purpose, the costs and expenses of the
         Executive Committee shall include properly incurred costs, expenses and
         liabilities of or associated with any business accommodation and
         services required by the Executive Committee, the Chief Executive, the
         Secretary or the personnel referred to in Clause 17.2.1 and the
         properly incurred costs and expenses of any consultant or adviser
         retained by the Executive Committee or any such person in the proper
         performance of its or his duties and responsibilities.

     23.6 Pool Member  representation:  Each Pool Member will be represented on
          the Executive Committee as follows:-

         23.6.1   Subject as provided in Clause 23.6.3, if the first preferred
                  MP Nominee or RS Nominee of a Pool Member is elected to the
                  Executive Committee pursuant to Clause 15.5 or 15.6, that MP
                  Nominee or RS Nominee in its capacity as a Committee Member
                  will represent the interests of that Pool Member;

         23.6.2   If the first preferred MP Nominee or RS Nominee of a Pool
                  Member is not elected to the Executive Committee pursuant to
                  Clause 15.5 or 15.6, or if a Pool Member did not vote in any
                  such election, then that Pool Member shall within five working
                  days after the relevant meeting of Pool Members at which the
                  Committee Members are elected notify the Secretary of the
                  identity of the Committee Member whom it wishes to represent
                  its interests on the Executive Committee and, subject to
                  Clause 23.6.3, such Committee Member will represent those
                  interests;

         23.6.3   Subject to the prior written agreement of the Committee Member
                  concerned (such agreement not to be unreasonably withheld or
                  delayed) and to the relevant Pool Member having first
                  consulted the Pool Chairman, a Pool Member may by written
                  notice to the Secretary elect, on no more than two occasions
                  during the Committee Members' term of office, to have its
                  interests on the Executive Committee represented by a
                  Committee Member other than the Committee Member referred to
                  in Clause 23.6.1 or 23.6.2 (as the case may be);

         23.6.4   A person becoming a Pool Member during the Committee Members'
                  term of office shall be represented by the Committee Member of
                  their choice, such choice to be notified in writing to the
                  Director and the Secretary within five working days of that
                  person becoming a Pool Member. That person shall continue to
                  be represented by his chosen Committee Member (or his
                  successor) until the expiry of that Committee Member's term of
                  office (or, if earlier, its ceasing to be a Pool Member) and
                  will not during that period be entitled to the benefit of
                  Clause 23.6.3; and

         23.6.5   A Pool Member will be a Constituent of the Committee Member
                  representing its interests on the Executive Committee for the
                  time being and from time to time.

23.7     Notification: The Secretary shall notify all Pool Members and the
         Director promptly after the meeting of Pool Members at which Committee
         Members are elected of the Pool Members and their respective Committee
         Member representatives and of any subsequent nomination or change of
         representation during the term of office of the Committee Members.

24.      POWERS OF THE EXECUTIVE COMMITTEE

24.1     General power: Subject as otherwise provided in this Agreement, the
         Executive Committee shall, as between itself and the Pool Members in
         general meeting, exercise overall supervision of the Settlement System
         and its operations.

24.2     Specific powers: Subject as otherwise provided in this Agreement, the
         powers, duties and responsibilities of the Executive Committee shall,
         as between itself and the Pool Members in general meeting, include:-

     24.2.1 The specific powers, duties and responsibilities set out in the Pool
          Rules;

     24.2.2 Monitoring on a regular basis the Settlement System Administrator in
          its operation of the Settlement System (including deciding whether to
          propose to the Pool Members in general  meeting for their approval the
          removal of the Settlement System Administrator);

     24.2.3 The power to appoint and remove the Pool Funds Administrator and to
          carry out the other  functions ascribed to it in  Schedules 11 and 15
          and to  enter  into  on  behalf of  Pool  Members  any  agreement or
          arrangement with the Pool Funds Administrator (or successor Pool Funds
          Administrator) in substitution for that set out in Schedule 15;

         24.2.4     Monitoring on a regular basis each of the Grid Operator and
                    the Ancillary Services Provider in the performance of its
                    obligations under this Agreement;

     24.2.5 Considering applications by New Parties to be admitted as parties to
          this  Agreement  under  Clause 3 and of Parties to be admitted as Pool
          Members under Clause 8;

     24.2.6 Considering, amending, substituting, approving and disapproving all
          Agreed Procedures,  Codes of Practice (including commissioning reviews
          thereof by the Pool  Auditor in  accordance  with Clause  47.1.5 or by
          other technical experts) and Service Lines;

     24.2.7 The specific powers, duties and responsibilities set out in Schedule
          4;

     24.2.8 The specific powers, duties and responsibilities set out in Schedule
          15;

     24.2.9 Appointing and removing the Pool Auditor,  and  instructing the Pool
          Auditor  to  conduct  audits,   reviews,  tests  and  checks  and  the
          monitoring and review thereof, all in accordance with Part IX;

         24.2.10 Opening, maintaining and closing bank accounts for its own
purposes and crediting and debiting sums thereto;

         24.2.11    Controlling the development of the Pool Rules and
                    considering and approving or disapproving amendments to the
                    Pool Rules in accordance with Clause 7.4.2;

         24.2.12 Commissioning independent reviews of the Scheme and its
operation in accordance with Part XIII;

         24.2.13 Conducting reviews, preparing Works Programmes and implementing
Transitional Arrangements, all in accordance with Clause 5;

         24.2.14    Preparing the reports referred to in Clause 9.1.2 and the
                    business plan referred to in Clause 9.1.1 and preparing and
                    despatching regular quarterly reports to the Parties (with a
                    copy to the Director) in relation to all matters which are
                    the subject of this Agreement and in such reports reviewing
                    performance over the immediately preceding Quarter against
                    the business plan referred to in Clause 9.1.1;

         24.2.15    Considering any representation from any Pool Member in
                    relation to any regular quarterly report prepared pursuant
                    to Clause 24.2.14 above or otherwise relating to any matter
                    which is the subject of this Agreement;

         24.2.16    Overseeing the standards of Metering Equipment and the Codes
                    of Practice, agreeing in accordance with paragraph 14 of
                    Schedule 21 dispensations therefrom and reviewing the need
                    for new standards for Metering Equipment and, where it
                    considers such new standards are required, adopting such
                    standards in accordance with the requirements for adoption
                    of Codes of Practice (as contained in the definition of Code
                    of Practice) and in accordance with the provisions of
                    Schedule 21;

         24.2.17 Dealing promptly and efficiently with any dispute referred to
it concerning Settlement or its operation (including with respect to data);

     24.2.18 Convening in  accordance  with Clause 9.4 general  meetings of Pool
          Members or classes of Pool Members;

         24.2.19    Appointing, remunerating and removing the Chief Executive in
                    accordance with Clause 17.1 and, where permitted by the
                    terms of this Agreement, giving directions and instructions
                    to the Chief Executive, the Contract Manager, the Settlement
                    System Administrator, the Pool Funds Administrator, the Grid
                    Operator, the Ancillary Services Provider, Externally
                    Interconnected Parties (not being Pool Members) and other
                    persons to carry into effect the decisions of the Executive
                    Committee or Pool Members in general meeting or separate
                    general meeting;

         24.2.20    If requested by the Director, conveying any direction or
                    request of the Director to the Settlement System
                    Administrator, the Pool Funds Administrator, the Grid
                    Operator, the Ancillary Services Provider or any other Party
                    or the Pool Auditor;

         24.2.21    Appointing, remunerating and removing in accordance with the
                    Grid Code one or more persons to represent the Executive
                    Committee on the Grid Code Review Panel;

         24.2.22    Appointing, remunerating and removing lawyers, bankers,
                    valuers, brokers, accountants and other professional and
                    specialist advisers to assist the Executive Committee or any
                    of its sub-committees in the performance of its duties and
                    responsibilities under this Agreement;

         24.2.23    Subject to any applicable confidentiality provisions,
                    monitoring any litigation, arbitration or other proceedings
                    affecting or which may affect the Settlement System;

         24.2.24    Subject to any applicable confidentiality provisions,
                    advising Pool Members, Externally Interconnected Parties
                    (not being Pool Members), the Settlement System
                    Administrator, the Pool Funds Administrator, the Grid
                    Operator and the Ancillary Services Provider of decisions of
                    the Executive Committee applicable to them or the relevant
                    one(s) of them and liaising with all such persons on an
                    ongoing and regular basis;

         24.2.25    Advising each of the Pool Auditor and the Director of
                    decisions of the Executive Committee and of Pool Members in
                    general meeting or separate general meeting and liaising
                    with each of the Pool Auditor and the Director on an ongoing
                    and regular basis;

         24.2.26    Investigating any complaints made by any Pool Member
                    concerning the Settlement System, the Funds Transfer System
                    (or any part or aspect of any thereof), the Settlement
                    System Administrator, the Pool Funds Administrator, the Grid
                    Operator, the Ancillary Services Provider, the Pool Auditor,
                    the Pool Banker or the Custodian;

         24.2.27 Approving the Pool Banker and giving instructions for, or
consenting to, the removal of the same;

         24.2.28 Reviewing and approving or disapproving the Procedures Manual
in accordance with Clause 64;

         24.2.29    Considering and dealing with any other matter relating to
                    the Settlement System, the Funds Transfer System (or any
                    part or aspect of any thereof) or its or their operation
                    referred to the Executive Committee by the Pool Members in
                    general meeting or separate general meeting, any Pool
                    Member, the Pool Chairman, the Pool Auditor or the Director
                    and any other matter which is otherwise designated under
                    this Agreement for reference to it; and

         24.2.30 Determining the amount of the Second Tier Suppliers' System
Charge.

24.3     Exclusion of general meeting powers: Pool Members in general meeting
         shall have no powers in relation to the matters expressly reserved
         under this Agreement to the Executive Committee except to the extent
         that such matters are remitted to the Pool Members in general meeting
         under Clause 13.4.".





<PAGE>


                                     PART V

                             LIMITATION OF LIABILITY

25.      LIMITATION OF LIABILITY

25.1     Limitation of liability: Subject to Clause 25.2 and save where any
         provision of this Agreement provides for an indemnity, each Party
         agrees and acknowledges that no Party (excluding for this purpose the
         Settlement System Administrator) (the "Party Liable") or any of its
         officers, employees or agents shall be liable to any of the other
         Parties for loss arising from any breach of this Agreement other than
         for loss directly resulting from such breach and which at the date of
         this Agreement was reasonably foreseeable as not unlikely to occur in
         the ordinary course of events from such breach in respect of:-

         25.1.1 physical damage to the property of any of the other Parties or
its or their respective officers, employees or agents; and/or

     25.1.2 the  liability  of any such other Party to any other person for loss
          in respect of physical damage to the property of any other person.

25.2     Death and personal injury: Nothing in this Agreement shall exclude or
         limit the liability of the Party Liable for death or personal injury
         resulting from the negligence of the Party Liable or any of its
         officers, employees or agents and the Party Liable shall indemnify and
         keep indemnified each of the other Parties, its officers, employees or
         agents from and against all such and any loss or liability which any
         such other Party may suffer or incur by reason of any claim on account
         of death or personal injury resulting from the negligence of the Party
         Liable or any of its officers, employees or agents.

25.3     Exclusion of certain types of loss: Subject to Clause 25.2 and save
         where any provision of this Agreement provides for an indemnity,
         neither the Party Liable nor any of its officers, employees or agents
         shall in any circumstances whatsoever be liable to any of the other
         Parties for:-

         25.3.1 any loss of profit, loss of revenue, loss of use, loss of
contract or loss of goodwill; or

         25.3.2   any indirect or consequential loss; or

     25.3.3 loss resulting  from the  liability of any other Party to any other
          person  howsoever and  whensoever  arising save as provided in Clauses
          25.1.2 and 25.2.

     25.4 Trust:  Each  Party  acknowledges  and  agrees  that each of the other
          Parties  holds the benefit of Clauses  25.1,  25.2 and 25.3 for itself
          and as trustee and agent for its officers, employees and agents.

25.5     Survival: Each of Clauses 25.1, 25.2, 25.3 and 25.4 shall:-

         25.5.1     be construed as a separate and severable contract term, and
                    if one or more of such Clauses is held to be invalid,
                    unlawful or otherwise unenforceable the other or others of
                    such Clauses shall remain in full force and effect and shall
                    continue to bind the Parties; and

         25.5.2    survive termination of this Agreement.

     25.6 Saving:  For the  avoidance  of  doubt,  nothing  in this Part V shall
          prevent or restrict  any Party  enforcing  any  obligation  (including
          suing for a debt) owed to it under or pursuant to this Agreement.

25.7     Full negotiation: Each Party acknowledges and agrees that the foregoing
         provisions of this Part V have been the subject of discussion and
         negotiation and are fair and reasonable having regard to the
         circumstances as at the date of this Agreement.





<PAGE>


                                    PART VII

             THE SETTLEMENT SYSTEM ADMINISTRATOR'S RESPONSIBILITIES

29.      RESPONSIBILITIES

     Responsibilities:  Without  prejudice  to the  generality  of  the  duties,
     responsibilities    and   obligations   of   the   Settlement   System
     Administrator provided elsewhere in the SSA Arrangements:-

29.1     Provision of information: The Settlement System Administrator shall
         upon request provide each Pool Member, the Ancillary Services Provider
         and the Grid Operator with a certified copy of such records, data and
         other information concerning amounts payable by or to such Pool Member,
         the Ancillary Services Provider and the Grid Operator as such Pool
         Member, the Ancillary Services Provider or the Grid Operator may
         reasonably request for the purpose of establishing the amounts which
         are owed to or by such Pool Member, the Ancillary Services Provider or
         the Grid Operator in accordance with this Agreement, and in any event
         with such information as any Pool Member, the Ancillary Services
         Provider or the Grid Operator may request from the Settlement System
         Administrator in order to establish or prove a claim to any amounts due
         or claimed to be due. The Settlement System Administrator shall provide
         such information forthwith upon request or (if so required by the
         Settlement System Administrator) upon delivery of a certificate from
         the Pool Member's, the Ancillary Service Provider's or the Grid
         Operator's counsel certifying that such information is required for
         such purpose. Each of the Parties agrees to the release of all such
         records, data and other information in the circumstances described in
         this Clause 29.1.

29.2     Arrangements with the Grid Operator and Ancillary Services Provider:
         Each of the Settlement System Administrator, the Grid Operator and the
         Ancillary Services Provider shall make and maintain arrangements with
         each other whereby such data and other information as may be collected
         or received by any of them or necessary for the purposes of the
         Settlement System, the Ancillary Services Business or (as the case may
         be and subject to Clause 69) the operation of the NGC Transmission
         System or the performance by the Grid Operator of its obligations under
         the NGC Transmission Licence shall be provided to such other(s) to the
         extent necessary to enable such other(s) to perform its or their
         respective obligations under this Agreement, the Grid Code, any
         Ancillary Services Agreement and/or the NGC Transmission Licence. Each
         of the Parties agrees to the release of all such data and other
         information in the circumstances described in this Clause 29.2.

29.3 Arrangements  with the Pool  Funds  Administrator:  The  Settlement  System
     Administrator  and the Pool Funds  Administrator  shall  make and  maintain
     arrangements with each other whereby:-

         (a)        sufficient data and other information is provided by the
                    Settlement System Administrator to the Pool Funds
                    Administrator as to enable the Pool Funds Administrator to
                    perform its obligations under this Agreement and the Funds
                    Transfer Agreement; and

         (b)        sufficient data and other information is provided by the
                    Pool Funds Administrator to the Settlement System
                    Administrator as to enable the Settlement System
                    Administrator to perform its obligations under this
                    Agreement.

         Each of the Parties agrees to the release of all such data and other
information in the circumstances described in this Clause 29.3.

30.      [Not used].

31.      [Not used].

32.      [Not used].

33.      [Not used].

34.      COSTS, FEES AND EXPENSES

34.1     Schedule 4: The provisions of Schedule 4 shall have effect.

34.2     Fees:

         34.2.1     Each Party which is not a Pool Member (other than the
                    Settlement System Administrator, the Pool Funds
                    Administrator, the Grid Operator and the Ancillary Services
                    Provider) shall pay the Settlement System Administrator a
                    fee as provided in Section 8 of Part G of the Appendix to
                    Schedule 4 in respect of the provision to such Party of all
                    data and other information which is required by the terms
                    and conditions of Service Line 10 (Service to CEO and Pool
                    Members) to be made available to it by the Settlement System
                    Administrator.

         34.2.2     A Party may at any time by notice in writing to the
                    Settlement System Administrator elect not to be provided
                    with all or some of the data and other information to which
                    it is entitled from the Settlement System Administrator
                    under this Agreement and may change such election at any
                    time upon further written notice to the Settlement System
                    Administrator.

34.3 Charges: The Executive Committee shall be entitled to require that a fee or
     other charge (not  exceeding(pound)500 per dispute or such other sum as the
     Pool Members in general meeting may from time to time approve) be levied on
     and paid by a Party in respect of any dispute concerning  Settlement or its
     operation  (including  with  respect  to data)  referred  by such Party for
     determination to the Executive Committee or any sub-committee thereof. Such
     fee or other charge shall be levied,  paid and collected in such manner and
     at such time as the Executive Committee shall direct and the relevant Party
     hereby  undertakes to pay any such fee or other charge so levied.  Any such
     fee or other charge shall at the option of the  Executive  Committee (i) be
     refunded in whole or in part to the Party  which paid the same,  or (ii) be
     applied  against  the  administration  costs of  whatsoever  nature  of the
     Executive Committee or the relevant sub-committee.

34.4     Externally Interconnected Parties' costs:

         34.4.1     An Externally Interconnected Party shall be entitled to
                    recover in accordance with this Clause 34.4 its costs and
                    expenses reasonably incurred in acting in accordance with
                    this Agreement as the Externally Interconnected Party for
                    its Corresponding External Pool Members (as defined in the
                    Pool Rules).

          34.4.2 Not later than 30 days after the  beginning of each  Accounting
               Period  (commencing with the Accounting Period beginning in 1992)
               each Externally  Interconnected  Party shall submit in writing to
               the  Executive  Committee for approval  (such  approval not to be
               unreasonably  withheld)  reasonable  details  of  the  costs  and
               expenses  anticipated  as  likely  to be  incurred  by it in  its
               capacity as an Externally Interconnected Party in that Accounting
               Period and (commencing  with the Accounting  Period  beginning in
               1993) of the actual  costs and  expenses so incurred by it in the
               immediately  preceding  Accounting  Period.  If  approved  by the
               Executive  Committee,  all  such  costs  and  expenses  shall  be
               recovered  by  an  Externally   Interconnected   Party  from  its
               Corresponding  External  Pool Members in  accordance  with Clause
               34.4.3. If not so approved,  the Externally  Interconnected Party
               shall revise and  resubmit to the  Executive  Committee  the said
               details  as often as may be  required  in  order to  obtain  such
               approval.

         34.4.3     Each Corresponding External Pool Member shall reimburse its
                    Externally Interconnected Party its due proportion of all
                    its Externally Interconnected Party's approved costs and
                    expenses within 28 days after receipt of an invoice from its
                    Externally Interconnected Party. The Externally
                    Interconnected Party shall issue invoices in respect of each
                    Quarter on or after the Quarter Day relating thereto.
                    Invoices shall be based on approved anticipated costs and
                    expenses for the relevant Accounting Period and the first
                    invoice for each Accounting Period (commencing with the
                    Accounting Period beginning in 1993) shall include any
                    correction that may be necessary on account of the approved
                    actual costs and expenses being different from the approved
                    anticipated costs and expenses for the immediately preceding
                    Accounting Period.

         34.4.4     For the purposes of this Clause 34.4 a Corresponding
                    External Pool Member's due proportion of its Externally
                    Interconnected Party's approved costs and expenses for each
                    Quarter shall be calculated as follows:-

                    (a) the aggregate of the Externally Interconnected Party's
approved costs and expenses shall be divided by two;

                    (b)   as to one half of such approved costs and expenses,
                          the Corresponding External Pool Member's due
                          proportion shall be the proportion which the sum of
                          (i) the number of its Generation Trading Blocks and
                          (ii) one (representing the notional Consumer referred
                          to in paragraph 26.5.2(d) of the Pool Rules) bears to
                          the sum of (a) the total number of the Generation
                          Trading Blocks of all Corresponding External Pool
                          Members the Externally Interconnected Party of which
                          is the same as that for the Corresponding External
                          Pool Member in question and (b) the number of all such
                          Corresponding External Pool Members, and each such
                          Corresponding External Pool Member shall for this
                          purpose be allocated at least one Generation Trading
                          Block; and

                    (c)   as to the other half of such approved costs and
                          expenses, the Corresponding External Pool Member's due
                          proportion shall be the proportion which its Gross
                          Traded Energy for the Quarter in question bears to the
                          aggregate of the Gross Traded Energy for that Quarter
                          of all Corresponding External Pool Members the
                          Externally Interconnected Party of which is the same
                          as that for the Corresponding External Pool Member in
                          question, and for this purpose "Gross Traded Energy"
                          in respect of any Quarter and any Corresponding
                          External Pool Member shall be the aggregate amount of
                          Active Energy (measured in kWh) bought and sold
                          pursuant to this Agreement by such Corresponding
                          External Pool Member in its capacity as such in that
                          Quarter.

         34.4.5     The foregoing provisions of this Clause may be amended or
                    varied in respect of an Externally Interconnected Party and
                    its Corresponding External Pool Members (or any of them) by
                    prior written agreement of that Externally Interconnected
                    Party, all its Corresponding External Pool Members and the
                    Executive Committee.

34A.     SECOND TIER SYSTEM CHARGES

34A.1    The following provisions of this Section 34A shall apply in respect of
         each of the Accounting Periods beginning on 1st April, 1994, 1st April,
         1995, 1st April, 1996 and 1st April, 1997 (each a "Specified Accounting
         Period").

34A.2    Subject to Section 34A.6, the Second Tier Suppliers' System Charge for
         a Specified Accounting Period shall be determined by the Executive
         Committee as the amount per annum to be charged to each Second Tier
         Supplier in respect of each Second Tier System supplied by such
         Supplier.

34A.3    Subject to Section 34A.6, the Second Tier Suppliers' Non-Pooled
         Generation System Charge for a Specified Accounting Period shall be
         determined by the Executive Committee as the amount per annum to be
         charged to each Supplier in respect of each Non-Pooled Generator for
         whose Metering System such Supplier is the Registrant.

34A.4    Subject to Section 34A.6, the Suppliers' System Charge for a Specified
         Accounting Period shall be determined by the Executive Committee as the
         amount per annum to be charged to each Supplier (other than a Second
         Tier Supplier) in respect of each Non-Second Tier System in that
         Supplier's authorised area.

          34A.5The second  tier system  charge  payable by a Supplier in respect
               of each calendar month in a Specified  Accounting Period shall be
               calculated as follows:-

               (a)  in respect of each Second Tier Supplier,  in accordance with
                    the following formula:-

                          Second Tier Suppliers' System Charge x NOSP
     
                 where NOSP is the total number of Second Tier Systems supplied
by such Supplier at the beginning of the relevant calendar month;

         (b) in respect of each Supplier and in addition to the charge in
Section 34A.5(a), in accordance with the following formula:-

                                [OBJECT OMITTED]

                  where NNPG is the total number of Metering Systems of
                  Non-Pooled Generators for which such Supplier is the
                  Registrant at the beginning of the relevant calendar month;

         (c) in respect of each Supplier (other than a Second Tier Supplier), in
accordance with the following formula:-

                          Suppliers' System Charge x NMS
                                            12

                  where NMS is the total number of Non-Second Tier Systems in
that Supplier's authorised area as at the beginning of that month;

         (d)      for these purposes, the numbers of Second Tier Systems and of
                  Non-Second Tier Systems as at the beginning of each calendar
                  month shall be as notified to the Settlement System
                  Administrator (who shall then notify the Director) by the
                  relevant Suppliers (and the Settlement System Administrator
                  being entitled, in the absence of any notification to the
                  contrary, to rely on the last such notification and other
                  information in its possession) and, in the event of any
                  dispute between the Parties, shall be as determined by the
                  Director (whose determination shall be final and binding); and

         (e)      only those Second Tier Systems in respect of which data
                  collection costs are incurred by Second Tier Agents or the
                  Settlement System Administrator shall be used in determining
                  the number of Second Tier Systems.

34A.6    If in respect of any Specified Accounting Period (other than the one
         beginning on 1st April, 1997) the aggregate of all second tier system
         charges payable pursuant to Sections 34A.5(a), 34A.5(b) and 34A.5(c)
         and received by the Settlement System Administrator is less than or (as
         the case may be) more than the Total Second Tier System Charges for
         such Specified Accounting Period the deficit or (as the case may be)
         the surplus shall be carried forward to the immediately succeeding
         Specified Accounting Period and shall be included in the calculation of
         the Total Second Tier System Charges therefor.

34A.7    The Executive Committee will use its reasonable endeavours to ensure
         that the aggregate of all second tier system charges payable pursuant
         to Sections 34A.5(a), 34A.5(b) and 34A.5(c) and received by the
         Settlement System Administrator in respect of the Accounting Period
         beginning on 1st April, 1997 meets the Total Second Tier System Charges
         specified for that Accounting Period. There shall be no carry forward
         of any such deficit or surplus arising in respect of the Specified
         Accounting Period beginning on 1st April, 1997.



<PAGE>


                                    PART VIII

                  THE SETTLEMENT SYSTEM AND COMPUTER OPERATIONS

35.      DEVELOPMENT OF THE SETTLEMENT SYSTEM

35.1     Development: The Settlement System shall be developed under the overall
         control of the Executive Committee. All developments of and changes to
         the Computer Systems shall be made in accordance with the terms of the
         Development Policies.

35.2     Delegation: Save as provided by the Development Policies, the Executive
         Committee shall be entitled to delegate all or any of its rights,
         powers and duties under Clause 35.1 and the Development Policies to
         such person(s) and on such terms and conditions as from time to time it
         may see fit.

35.3     Development Policies:

         35.3.1           (a) The matters addressed by the Development Policies
                          are set out in the list of contents in the Development
                          Policies. These general headings define the scope of
                          the Development Policies.

                    (b)   The scope of the Development Policies may be amended
                          at any time and from time to time by written agreement
                          of the Executive Committee and the Settlement System
                          Administrator.

                    (c)   Any amendment to any of the matters addressed by the
                          Development Policies or any addition or substitution
                          to the Development Policies which does not extend or
                          restrict (other than in a way or to an extent which
                          can reasonably be regarded as de minimis) the scope of
                          the Development Policies may be made at any time and
                          from time to time, and shall be effective if so made,
                          by the Executive Committee after consultation with the
                          Settlement System Administrator unless such matter is
                          one covered by the headings in Schedule 16 in which
                          event such amendment, addition or substitution may be
                          made and shall be effective only by written agreement
                          of the Executive Committee and the Settlement System
                          Administrator.

         35.3.2     Without prejudice to Clause 35.3.1(c), Schedule 16 may be
                    changed at any time and from time to time by written
                    agreement of the Executive Committee and the Settlement
                    System Administrator.

         35.3.3     Each of the Parties undertakes to comply with (and the Pool
                    Members undertake to ensure that the Executive Committee
                    complies with) the Development Policies.

35.4.    SSA's comments: The Executive Committee or the particular sub-committee
         or sub-group in respect of any development of the Settlement System
         shall take into account all reasonable comments of the Settlement
         System Administrator in relation to the specification, design, testing
         and implementation requirements of any development of the Settlement
         System where such comments relate to the operational compatibility or
         consistency with the Settlement System or the ability of the Settlement
         System Administrator to comply with this Agreement, the Act or NGC's
         Transmission Licence.

35.5     Provision of data and information: Each Party shall ensure that all
         data and information necessary to enable any testing of the Settlement
         System or any development thereof or change thereto required under the
         Development Policies and which is permitted to be released by the
         Settlement System Administrator under the Pool Rules or as otherwise
         expressly provided herein is supplied to the Executive Committee or as
         it may direct and to the Settlement System Administrator, and each
         Party shall use all reasonable endeavours to co-operate with and
         support any such testing.

35.6     Provision of data and information to authorised persons: The Parties
         shall provide or ensure that the Settlement System Administrator
         provides all data and information required under Clause 35.5 to such
         persons as may from time to time be authorised by the Executive
         Committee to receive the same provided that such persons shall have
         executed a confidentiality undertaking in such form as the Executive
         Committee may from time to time determine. If the Settlement System
         Administrator is not permitted or required to release any data and
         information by reason only of the confidential nature of such data and
         information it shall and may provide representative data to the extent
         required for such testing.

35.7     Inconsistencies and conflicts: In the event of any inconsistency or
         conflict between the provisions of this Agreement and the provisions of
         the Development Policies, the provisions of this Agreement shall
         prevail.

36.      CHANGE MANAGEMENT

36.1     Change Management Policies: In order to ensure that developments of and
         changes to the Settlement System are brought into effect in an ordered
         and controlled manner, each of the Parties undertakes to comply with
         the Change Management Policies.

36.2 Amendments:  The Change Management Policies may be amended at any time and
     from time to time by the Executive Committee after  consultation  with the
     Settlement System Administrator.

37.      SOFTWARE

37.1     [Not used].

37.2     Warranties: Without prejudice to Service Line 19 (System Integration)
         and Section 9 of Schedule 4, nothing in this Agreement shall imply or
         impose any requirement on the Settlement System Administrator to give
         any warranty with respect to any Software.

37.3 No  liability:   Each  Party  acknowledges  that  neither  NGC  nor Energy
     Settlements  and Information  Services  Limited shall have any liability in
     respect of any software developed before the Effective Date.

38.      [Not used].

39.      [Not used].

40.      [Not used].

41.      NOTIFICATION OF DEFECTS BY POOL MEMBERS

         Each Pool Member undertakes to the Settlement System Administrator and
         each other Pool Member promptly to notify the Settlement System
         Administrator and the Executive Committee in writing of any defects of
         which it is or becomes aware in the Software or its operation and to
         provide such further information as may reasonably be required by the
         Settlement System Administrator to identify, isolate and correct such
         defect.

42.      [Not used].

43.      [Not used].

44.      [Not used].

45.      ESCROW ARRANGEMENTS

45.1     Escrow Agreement: On 17th March, 1992 the Settlement System
         Administrator (for itself and on behalf of the Pool Members acting
         through the Executive Committee) entered into an escrow agreement (the
         "Escrow Agreement") in the form set out in schedule 7 with The National
         Computing Centre Limited (the "Custodian"). The Settlement System
         Administrator has deposited or will deposit as soon as it comes into
         existence:-

         45.1.1     a copy of the source code and load (machine executable)
                    modules relating to all Developed Application Software (as
                    defined in Schedule 4) together with all job control
                    language and licensed software system tables, each in a
                    machine readable form and the source code and job control
                    language in a hard copy form; and

          45.1.2  a  copy  of  all   related   manuals   and  other associated
               documentation, including:-

          (a)  any user  requirement  documents,  together  with all associated
               authorised change requests;

          (b)  any  functional  specification  documents associated  with those
               documents  described in paragraph  (a) above,  together with all
               authorised   change   requests   associated   with  the  relevant
               functional specification;

          (c)  to the extent available to the Settlement  System Administrator,
               any  design   specification   documents  associated  with  those
               documents  described in  paragraphs  (a) and (b) above,  together
               with all authorised change requests  associated with the relevant
               design specification;

          (d)  any  program  and/or  user  guides  prepared  to assist  in  he
               day-to-day  operation  and  future  development  of the  computer
               programs  (including  records  of test  cases  together  with the
               associated  test  input  and  output  data  used  for  validation
               purposes);

          (e)  any  relevant  test  strategy   schedules  and  acceptance test
               schedules as specified for functional and  operational end to end
               testing;

          (f)  any relevant  test  acceptance  certificates and reports for all
               tests recording comments and observations made on the appropriate
               tests where such tests are commissioned by the Settlement  System
               Administrator;

          (g)  any relevant client  acceptance  certificates and Pool Auditor's
               reports,  together with any reports  recording  such clients' and
               the Pool Auditor's observations and comments on the tests;

          (h)  any  relevant   compilation  or  detailed  operating  procedures
               required in  connection  with any of the relevant  paragraphs in
               this Clause 45.1.2;

          (i)  all  Software  licences  for  Licensed  Application Software (as
               defined in Schedule 4); and

          (j)  a list  detailing all versions of Licensed  Application Software
               (including operating systems and compilers) used in creating each
               version of the object code detailing the version numbers used and
               any program temporary fixes or equivalent mode,

                    (together the "Material").

          If,  after consultation with the Settlement System Administrator,  the
               Executive Committee shall so request:-

         (A)        the Settlement System Administrator shall use its reasonable
                    endeavours (which may include the payment of a fee or
                    further fee recoverable through the Charging Procedure) to
                    procure that any licence for any Licensed Application
                    Software is on terms or amended terms that permit the
                    deposit of such Licensed Application Software with a
                    reputable software escrow agent approved by the Executive
                    Committee on the terms of an escrow agreement approved by
                    the Executive Committee and the Settlement System
                    Administrator (in the case of the Settlement System
                    Administrator such approval not to be unreasonably
                    withheld); and

         (B)        NGC shall use its reasonable endeavours to procure that any
                    licence for any Licensed Application Software licensed by it
                    to the Settlement System Administrator is on terms or
                    amended terms that permit the deposit of such Licensed
                    Application Software with a reputable software escrow agent
                    approved by the Executive Committee on the terms of an
                    escrow agreement approved by the Executive Committee and NGC
                    (in the case of NGC such approval not to be unreasonably
                    withheld).

45.2     Updating: The Settlement System Administrator shall ensure that the
         Material deposited with the Custodian is kept fully up-to-date and
         reflects all Modifications (as defined in the Escrow Agreement) and
         shall deposit a copy of all Modifications with the Custodian as soon as
         the same are available, all in accordance with the terms and subject to
         the conditions of the Escrow Agreement.

45.3 Notification to Executive  Committee:  The Settlement System Administrator
     shall  notify the  Executive  Committee  promptly of the  delivery of each
     Modification to the Custodian.

45.4     Amendments: Any amendment to or variation of the Escrow Agreemen shall
         be made in accordance with its terms provided that the Settlement
         System Administrator shall not make or agree to any such amendment or
         variation without the prior written consent of the Executive Committee.

46.      [Not used].



<PAGE>


                                     PART IX

              THE POOL AUDITOR AND SCHEDULING AND DESPATCH REVIEWS

47.      THE POOL AUDITOR AND SCHEDULING AND DESPATCH REVIEWS

47.1 Appointment and removal: The Executive Committee shall (after consultation
     with the Settlement System Administrator) from time to time appoint a firm
     of accountants of internationally recognised standing to carry out:-

         47.1.1 audits of the calculations and allocations performed by the
Settlement System, such audits to be carried out annually;

47.1.2 audits of the Funds  Transfer  System,  such  audits  to be  carried out
     annually;

         47.1.3    tests and/or checks on new items or versions of Software;

         47.1.4 reviews of Agreed Procedures and Codes of Practice, as required
from time to time by the Executive Committee; and

         47.1.5     audits, reviews, tests and/or checks of such other matters
                    as are otherwise designated under this Agreement for
                    reference to it and, where not so designated, such other
                    audits, reviews, tests and/or checks as the Executive
                    Committee may from time to time reasonably require (having
                    regard, in particular, to the disruptive effect of the same
                    on the business and operations of the Parties),

         and to assist, upon request of the Executive Committee, in the
preparation of Works Programmes pursuant to Clause 5.9.

         The Executive Committee shall have the right at any time and from time
         to time (after consultation with the Settlement System Administrator)
         to remove from office as Pool Auditor any firm of accountants so
         appointed by it, but the Executive Committee shall ensure that there
         shall at all times be a Pool Auditor.

47.2     Scheduling and Despatch Review:

         47.2.1     The Grid Operator shall (after consultation with the
                    Executive Committee) decide upon the appointment from time
                    to time of such firm of accountants of internationally
                    recognised standing as the Executive Committee shall approve
                    (such approval not to be unreasonably withheld or delayed)
                    to carry out reviews ("Scheduling and Despatch Reviews") of
                    the Scheduling and Despatch processes under the Grid Code,
                    such reviews to be carried out, until the first anniversary
                    of the Effective Date, at such time or times as shall be
                    agreed between the Grid Operator and the Executive Committee
                    and, thereafter, annually. The objective and scope of each
                    such review is set out in Schedule 19.

         47.2.2     The Grid Operator shall have the right at any time and from
                    time to time (after consultation with the Executive
                    Committee) to decide upon the removal from office of the
                    firm of accountants so appointed by it with the consent of
                    the Executive Committee (such consent not to be unreasonably
                    withheld or delayed).

         47.2.3 The auditor carrying out the Scheduling and Despatch Review
shall report to the Grid Operator.

47.3     Scope of work:

         47.3.1     The terms of engagement and scope of the work to be carried
                    out by the Pool Auditor shall be in accordance with the
                    terms of this Agreement and as determined from time to time
                    by the Executive Committee (after consultation with the Pool
                    Auditor and, where appropriate, the Settlement System
                    Administrator or the Pool Funds Administrator) and the Pool
                    Auditor shall report to the Executive Committee. The
                    Executive Committee shall, upon request, provide each Pool
                    Member, the Director, any Party which has applied pursuant
                    to Clause 8.2 to become a Pool Member and (as appropriate)
                    the Settlement System Administrator or the Pool Funds
                    Administrator with a copy of such terms of engagement.

         47.3.2     Any opinion or report of the auditor carrying out the
                    Scheduling and Despatch Review shall be addressed to the
                    Grid Operator (for its own benefit) and a copy thereof shall
                    be sent to the Executive Committee and to each Pool Member,
                    the Director, the Settlement System Administrator and the
                    Pool Funds Administrator (each of whom shall be entitled to
                    rely on it).

47.4     Notification of disputes: Upon written request of the Pool Auditor or,
         where the dispute relates to Scheduling and Despatch, the auditor
         carrying out the Scheduling and Despatch Review, a Party shall promptly
         provide the Pool Auditor or (as the case may be) the auditor carrying
         out the Scheduling and Despatch Review with a written statement of all
         disputes under or in connection with this Agreement or any Ancillary
         Services Agreement which are then outstanding and which involve such
         Party or which the relevant Party believes may arise and are likely to
         involve such Party, and (subject to any supervening obligations of
         confidentiality binding on such Party) such statement shall include
         reasonable details of each such dispute.

48.      AUDIT INSTRUCTIONS

48.1     Frequency:

         48.1.1     Audits, tests, reviews and checks pursuant to Clause 47.1
                    shall be carried out at such time or times as the Executive
                    Committee shall determine (after consultation with the Pool
                    Auditor and, where appropriate, the Settlement System
                    Administrator or the Pool Funds Administrator) and any such
                    audit, test, review or check shall relate to such period(s)
                    as the Executive Committee and the Pool Auditor shall agree.

         48.1.2     The review pursuant to Clause 47.2 shall be carried out at
                    such time or times as the Grid Operator shall determine and
                    the Executive Committee shall approve (such approval not to
                    be unreasonably withheld or delayed).

         48.1.3 In good time before each annual general meeting of Pool
Members:-

                    (a) the Executive Committee shall instruct the Pool Auditor
to prepare the report referred to in Clause 9.1.2; and

                    (b)   the Grid Operator shall instruct the auditor carrying
                          out the Scheduling and Despatch Review to prepare the
                          report referred to in Clause 47.2.3.

48.2     Opinions and reports: Any opinion or report of the Pool Auditor
         required by the Executive Committee shall be addressed to the Executive
         Committee for the benefit of all Pool Members and to such other
         person(s) as the Executive Committee may direct and a copy thereof
         shall be sent by the Executive Committee to each Pool Member and the
         Director and, if requested and the Executive Committee approves, the
         Settlement System Administrator and the Pool Funds Administrator (and
         the Settlement System Administrator and the Pool Funds Administrator
         shall be entitled to rely upon the same in any legal proceedings
         (including arbitration)).

48.3     Concerns and recommendations:

48.3.1 In instructing the Pool Auditor in respect of any of the matters referred
     to in Clause 47.1 the Executive Committee shall require the Pool Auditor:-

                  (a) forthwith to report any material concerns with respect to
matters the subject of the relevant audit, test, review and/or check; and

                  (b) to make such recommendations as to changes in the
procedures, controls and/or audit coverage as the Pool Auditor considers
appropriate.

                    Upon receipt of any such report or recommendation the
                    Executive Committee shall, after consultation with the
                    Settlement System Administrator or (in the case of the
                    review referred to in Clause 47.1.2) the Pool Funds
                    Administrator, prepare and send or cause to be prepared and
                    sent a report to Pool Members, the Pool Auditor and the
                    Director and the Settlement System Administrator or (as the
                    case may be) the Pool Funds Administrator enclosing a copy
                    of the Pool Auditor's report or recommendation. The
                    Executive Committee shall instruct the Settlement System
                    Administrator or (as the case may be) the Pool Funds
                    Administrator to carry out such corrective action as the
                    Pool Members in general meeting may approve or (where such
                    approval is not required by the terms of this Agreement) as
                    the Executive Committee may resolve consequent upon receipt
                    of the Executive Committee's report (which the Settlement
                    System Administrator and the Pool Funds Administrator
                    undertake promptly to do).

         48.3.2     In instructing the auditor in respect of the Scheduling and
                    Despatch Review the Grid Operator shall require the auditor
                    to make the reports and recommendations referred to in
                    Clauses 48.3.1(a) and (b). Upon receipt of a copy of any
                    such report or recommendation the Executive Committee shall,
                    after consultation with the Settlement System Administrator
                    and the Grid Operator, prepare or send or cause to be
                    prepared and sent a report to Pool Members, the auditor
                    carrying out the Scheduling and Despatch Review and the
                    Settlement System Administrator enclosing a copy of the
                    report or recommendation. The Executive Committee may
                    instruct the Grid Operator to carry out such corrective
                    action as may be reasonable and practicable in all the
                    circumstances and which is consistent with the Grid Code
                    which the Pool Members in general meeting shall approve.

48.4     Access:

         48.4.1     To the extent that the Pool Auditor reasonably requires in
                    order to be satisfied that the Pool Funds Administrator is
                    complying with its obligations under this Agreement and the
                    Agreed Procedures, the Pool Funds Administrator shall permit
                    the Pool Auditor unrestricted access to its operation of the
                    Funds Transfer System, the Funds Transfer Hardware and the
                    Funds Transfer Software and all data used, information held
                    and records kept by the Pool Funds Administrator or its
                    agents in the conduct of that operation and shall make
                    available members of its staff to explain such operation and
                    such other issues as the Pool Auditor considers relevant.

         48.4.2     The Grid Operator shall permit the auditor carrying out the
                    Scheduling and Despatch Review unrestricted access to that
                    part of its business as relates to Scheduling and Despatch
                    and the operation of BPS GOAL and all data used, information
                    held and records kept by the Grid Operator in the conduct of
                    such business and shall make available members of its staff
                    to explain such operations and such other issues as the
                    auditor considers relevant.

48.5     Costs:

         48.5.1     The costs of any corrective action on the part of the
                    Settlement System Administrator pursuant to Clause 48.3.1
                    shall be as agreed between the Pool Auditor and the
                    Executive Committee (after consultation with the Settlement
                    System Administrator) and shall be borne in accordance with
                    the PFA Accounting Procedure.

         48.5.2     The costs of any audit, test, review or check pursuant to
                    Clause 47.1.1 to 47.1.5 (inclusive) and any corrective
                    action on the part of the Pool Funds Administrator pursuant
                    to Clause 48.3.1 shall be as agreed between the Pool Auditor
                    and the Executive Committee (after consultation with the
                    Pool Funds Administrator in the case of any such corrective
                    action) and shall be borne by the Pool Funds Administrator
                    and recovered by it in accordance with the PFA Accounting
                    Procedure.

48.5.3 The costs of any review pursuant to Clause 47.2 and any corrective action
     on the part of the Grid  Operator  pursuant to Clause 48.3.2 shall be borne
     by the Grid Operator.

48.6 Conflict:  The Executive  Committee  shall require the Pool Auditor and the
     auditor  carrying out the Scheduling and Despatch Review to disclose to the
     Executive  Committee the existence and nature of all audit assignments with
     any Party.

48.7     Own auditors' review: Each Pool Member may request of the Executive
         Committee that its own external auditors be permitted to liaise with
         the Pool Auditor and the auditor carrying out the Scheduling and
         Despatch Review in accordance with normal professional standards,
         including provision of access to working papers. The Executive
         Committee shall take such steps as may reasonably be required of it to
         ensure that each of the Pool Auditor and the auditor carrying out the
         Scheduling and Despatch Review co-operates accordingly (subject to
         Clause 48.9).

48.8     Pool Auditor's rights: The Pool Auditor shall be entitled to attend and
         speak at meetings of the Executive Committee and at general meetings
         and separate general meetings of Pool Members. The Pool Auditor shall
         be entitled to resign upon giving prior notice to the Executive
         Committee (the period of such notice (if any) to be as set out in the
         terms of its appointment). Should the Pool Auditor resign, be removed
         from office or not be reappointed the Pool Auditor shall have the right
         to communicate directly with Pool Members if it believes there are
         matters which should be brought to their attention.

48.9     Confidentiality:

         48.9.1     The Pool Auditor shall as a condition precedent to its
                    appointment execute a confidentiality undertaking in favour
                    of each of the Settlement System Administrator, the Pool
                    Funds Administrator, the Grid Operator and the Ancillary
                    Services Provider and the Executive Committee on behalf of
                    all Pool Members in such form as may be reasonably required
                    from time to time by the Executive Committee.

         48.9.2     The auditor carrying out the Scheduling and Despatch Review
                    shall as a condition precedent to its appointment execute a
                    confidentiality undertaking in such form as may be
                    reasonably required from time to time by the Grid Operator
                    and which shall be approved by the Executive Committee (such
                    approval not to be unreasonably withheld or delayed).

         48.9.3     If requested by the Settlement System Administrator, the
                    Pool Funds Administrator, the Grid Operator or the Ancillary
                    Services Provider, the auditor carrying out the Scheduling
                    and Despatch Review shall execute a confidentiality
                    undertaking in favour of the relevant one of them in such
                    form as the Executive Committee may from time to time
                    approve (such approval not to be unreasonably withheld or
                    delayed).

48.10    Scheduling and Despatch Auditor: The auditor appointed to carry out the
         Scheduling and Despatch Review shall be entitled to attend and speak at
         meetings of the Executive Committee and at general meetings and
         separate general meetings of Pool Members where matters relating to
         Scheduling and Despatch are to be discussed or considered. The auditor
         shall be entitled to resign upon giving prior notice to the Grid
         Operator (who shall send a copy forthwith to the Executive Committee)
         (the period of such notice, if any, to be as set out in the terms of
         its appointment). Should the auditor resign, be removed from office or
         not be reappointed it shall have the right to communicate directly with
         Pool Members if it believes that there are matters which should be
         brought to their attention.





<PAGE>


                                     PART X


                      THE GRID OPERATOR'S RESPONSIBILITIES


49.      RESPONSIBILITIES


         The Grid Operator shall have the following duties, responsibilities and
obligations under this Agreement:-

49.1 PORTHOLE:  Ensuring  that,  insofar as  relevant  to the  operation  of the
     Settlement System and the Pool Rules, PORTHOLE will in its operation comply
     with its user and functional specifications.


         49.2       Services: Making available to any successor Settlement
                    System Administrator those services necessary for the proper
                    functioning of the Settlement System which the Grid Operator
                    made available to the incumbent Settlement System
                    Administrator at any time in the twelve month period prior
                    to the resignation or removal of such incumbent Settlement
                    System Administrator, in any such case upon such terms as
                    may be agreed between the Grid Operator, such successor
                    Settlement System Administrator and the Executive Committee.


         49.3 Generally: Such other duties, responsibilities and obligations as
are set out in this Agreement.


50.      STANDARD OF CARE

50.1     Standard of care: In the exercise of its duties and responsibilities
         under this Agreement the Grid Operator shall exercise that degree of
         care, diligence, skill and judgment which would ordinarily be expected
         of a reasonably prudent operator of the NGC Transmission System taking
         into account the circumstances actually known to the Grid Operator, its
         officers and employees at the relevant time or which ought to have been
         known to it or them had it or they made such enquiries as were
         reasonable in the circumstances.


50.2     Miscellaneous:

         50.2.1           (a) The Grid Operator shall be entitled to rely upon
                          any direction or instruction of the Executive
                          Committee or the Chief Executive (if any) if the same
                          is signed by way of authority in accordance with
                          Clause 50.2.4 on behalf of two or more Committee
                          Members or on behalf of the Chief Executive and shall
                          not be obliged to comply with any direction or
                          instruction of any sub-committee of the Executive
                          Committee or any delegate of the Executive Committee
                          other than the Chief Executive (unless such direction
                          or instruction is shown as having been ratified by the
                          Executive Committee).

                  (b)     The Grid Operator shall be entitled to rely upon any
                          communication or document reasonably believed by it to
                          be genuine and correct and to have been communicated
                          or signed by the person by whom it purports to be
                          communicated or signed and shall not be liable to any
                          of the Parties for any of the consequences of such
                          reliance.


         50.2.2   Compliance with the Director's directions: No liability
                  whatsoever shall attach to the Grid Operator as a result of
                  due compliance by it with any directions and instructions of
                  the Director, provided that in complying with such directions
                  and instructions the Grid Operator is at all times acting in
                  good faith.


         50.2.3   Prior approval: Where by the terms of this Agreement the Grid
                  Operator is required to obtain the prior directions,
                  instructions, approval or consent of the Executive Committee
                  or the Chief Executive, the Grid Operator shall have no
                  authority to, and shall not, act unless the requisite
                  directions, instructions, approval or consent have first been
                  obtained. Notwithstanding the foregoing sentence, nothing in
                  this Agreement shall prevent the Executive Committee from
                  ratifying any act of the Grid Operator.

         50.2.4   Express authority: All directions and instructions of the
                  Executive Committee or the Chief Executive to the Grid
                  Operator shall, as between the Grid Operator and the Pool
                  Members, be deemed to have the express authority of, and shall
                  be binding without reservation upon, all Pool Members.

         50.2.5   Authority of Pool Members: The Grid Operator shall not be
                  bound to act in accordance with the directions or instructions
                  of the Pool Members unless the Pool Members act through the
                  Executive Committee.

         50.2.6   General Meetings: The Grid Operator shall not be obliged to
                  take any steps to ascertain whether any resolution of Pool
                  Members in general meeting or of any class of Pool Members in
                  separate general meeting which it is advised by the Executive
                  Committee or the Chief Executive as having been passed was in
                  fact passed or passed by the requisite majority and until the
                  Grid Operator shall have express written notice to the
                  contrary from the Executive Committee or the Chief Executive
                  it shall be entitled to assume that the relevant resolution
                  was passed or (as the case may be) the relevant requisite
                  majority was obtained.

         50.2.7   Exceptions: Notwithstanding the foregoing provisions of this
                  sub-clause 50.2, in the performance of its duties and
                  responsibilities under this Agreement the Grid Operator shall
                  not be bound to act in accordance with the directions or
                  instructions of the Executive Committee or the Chief Executive
                  if:-


               (a)  to do so would cause the Grid  Operator to breach any of its
                    obligations under the Act or its Transmission Licence; or


                  (b)     the Grid Operator has reasonable grounds for believing
                          that it would so breach any of such obligations and
                          has consulted the Director and:-


               (i)  the Director has not indicated that in his view it would not
                    involve any such breach; or


                          (ii)     the Director has indicated that,
                                   notwithstanding any such actual or potential
                                   breach, the Director would not be minded to
                                   enforce compliance with those obligations and
                                   the Grid Operator has received an indemnity
                                   reasonably satisfactory to it in respect of
                                   its acting in accordance with such directions
                                   and instructions.



                  In any such event the Grid Operator shall promptly notify the
Executive Committee.



               50.2.8  Reference  to the  Director:  If at  any  time the  Grid
                    Operator  has a concern  which is  properly and  reasonably
                    founded that, in acting in accordance with any direction or
                    instruction   of  the  Executive   Committee or  the  Chief
                    Executive,  it will  breach  one or more of its obligations
                    under the Act or its Transmission Licence,  then, if having
                    discussed the matter with the Executive Committee the matter
                    remains  unresolved,  the Grid Operator shall either comply
                    with such  direction or  instruction or by notice in writing
                    refer the same to the  Director,  such notice to set out in
                    full  the  directions  or  instructions  given  to the Grid
                    Operator  and the grounds for such concern and to be copied
                    to the  Executive  Committee.  Pending any guidance from the
                    Director  in response to any such  reference  and,  provided
                    that the  Director  shall  not  express  any view  that such
                    reference  is  misconceived,  vexatious  or in respect of an
                    improperly  or  unreasonably   founded  concern,   the  Grid
                    Operator shall not be liable to any of the other Parties for
                    refusing to act in accordance with the relevant direction or
                    instruction.  If the Director shall express such a view, the
                    Grid Operator shall be so liable.



<PAGE>

                                     PART XI


                           ANCILLARY SERVICES AND THE


                           ANCILLARY SERVICES PROVIDER



51.      ANCILLARY SERVICES

               51.1 Obligations:  The  obligations  of  the  Ancillary  Services
                    Provider  and the Grid  Operator  pursuant to this Clause 51
                    shall be owed to each and every Supplier.


               51.2 Obligations of Ancillary  Services  Provider:  The Ancillary
                    Services Provider shall:-


         51.2.1     implement, maintain and operate all such systems as are
                    necessary to enable it properly to carry on the Ancillary
                    Services Business in accordance with the Transmission
                    Licence;

               51.2.2 operate the  Ancillary  Services  Business in an efficient
                    and economic manner;

         51.2.3     maintain such records, data and other information as the
                    Pool Auditor may from time to time by notice in reasonable
                    detail to the Ancillary Services Provider reasonably require
                    for the purposes of this Part XI or as may otherwise be
                    reasonably necessary to enable the Ancillary Services
                    Provider to comply promptly and fully with its obligations
                    under this Agreement;

         51.2.4     retain in electronic or machine readable form for a period
                    of not less than eight years (or such longer period as the
                    Pool Auditor may from time to time reasonably require),
                    copies of all records, data and information referred to in
                    Clause 51.2.3 in respect of the Ancillary Services;

         51.2.5     provide to the Settlement System Administrator who shall
                    promptly provide the same to each Supplier monthly and
                    annual statements giving aggregate payment details
                    separately in respect of each of the following items:-

                    (a)   Reactive Energy;

                    (b)   frequency control;

                    (c) Black Start Capability (as defined in the Grid Code);

                    (d)   lost opportunity costs;

                    (e)   supplies of Ancillary Services to Externally
                          Interconnected Parties;

                    (f) adjustments for disputes which have been settled or
                        otherwise determined; and

                    (g)   the Ancillary Services Provider's business charges,
                    together with a statement of the sum of all such items, and
                    each of the Parties agrees to such information being so
                    provided;


         51.2.6     not transfer or seek to transfer any of its duties or
                    responsibilities as Ancillary Services Provider save to
                    NGC's successor as Grid Operator where NGC is removed as
                    Grid Operator (but not further or otherwise);


         51.2.7     upon a successor Grid Operator being appointed (so far as it
                    is able), transfer to such successor all data, records,
                    other information, assets, equipment, facilities, rights and
                    know-how which it has (excluding freehold and leasehold real
                    property) and which are necessary to carry out the duties
                    and responsibilities of the Ancillary Services Provider and
                    which are not otherwise readily obtainable by such successor
                    including all original and copy material relating to the
                    same and, in consideration for such transfer, the Suppliers
                    shall jointly and severally pay to the Ancillary Services
                    Provider a reasonable sum to reflect the costs of, and the
                    costs of transferring, such material, such sum to be
                    determined pursuant to Clause 83 in default of agreement
                    between the Suppliers and Ancillary Services Provider; and


         51.2.8     ensure that all agreements or arrangements for the provision
                    of Ancillary Services to Externally Interconnected Parties
                    are on the best commercial terms reasonably available.


51.3     Obligations of Suppliers: Each Supplier shall pay the Ancillary
         Services Provider the amount allocated to such Supplier for Ancillary
         Services in any Settlement Period for Ancillary Services in accordance
         with this Agreement.

51.4     Obligation of Grid Operator: The Grid Operator shall enforce the Master
         Connection and Use of System Agreement and each Supplemental Agreement
         (insofar as it concerns the provision of Ancillary Services) in
         accordance with their respective terms in all circumstances in which it
         is reasonable to do so having regard to its obligations under the Act,
         the Transmission Licence and the Grid Code.


51.5     Audit of Ancillary Services:

         51.5.1     The Suppliers may require the Pool Auditor to carry out
                    audits, tests, checks or reviews in relation to the
                    operation by the Ancillary Services Provider of the
                    Ancillary Services Business as Suppliers may from time to
                    time reasonably require (having regard, in particular, to
                    the disruptive effect of the same on the business and
                    operations of the Ancillary Services Provider). The terms of
                    engagement for any such audit, test, check or review shall
                    be made available to the Ancillary Services Provider.


         51.5.2 The Suppliers shall not require more than two audits, tests,
checks and reviews pursuant to Clause 51.5.1 in any Accounting Period.


         51.5.3 On instructing the Pool Auditor pursuant to Clause 51.5.1, the
Supplier(s) concerned may require the Pool Auditor:-


                    (a) forthwith to report any material concerns with respect
to matters the subject of the relevant audit, test, check or review; and


                    (b)   to make such recommendations as to changes in the
                          procedures, controls and/or audit coverage of the
                          Ancillary Services Business as the Pool Auditor
                          considers appropriate.


         51.5.4     The Ancillary Services Provider shall permit the Pool
                    Auditor such access to its Ancillary Services' operations
                    and all records, documents, data and other information
                    (other than Excluded Information) held by the Ancillary
                    Services Provider in the conduct of such operations in each
                    case as the Pool Auditor may reasonably require and shall
                    make available members of its staff to explain such
                    operations and such other issues as the Pool Auditor
                    considers relevant. The Pool Auditor shall not disclose and
                    shall not be obliged to disclose to any Supplier details of
                    prices paid to each Generator by the Ancillary Services
                    Provider.

                    In this Clause 51.5 "Excluded Information" means all
                    records, documents, data and other information provided in
                    the course of the discussions or negotiations with any
                    person with whom the Ancillary Services Provider contracts
                    or considers contracting for the provision of Ancillary
                    Services other than as stated in any Ancillary Services
                    Agreement whether such discussions or negotiations take
                    place before contracting or as part of any price review
                    during the term of any Ancillary Services Agreement.

         51.5.5     The Pool Auditor shall report to the Suppliers and a copy of
                    any report by the Pool Auditor relating to an audit, test,
                    check or review pursuant to Clause 51.5.1 shall be provided
                    to the Ancillary Services Provider. The Pool Auditor shall
                    owe a duty of confidentiality to the Ancillary Services
                    Provider save to the extent necessary to carry out the
                    particular audit, test, check or review provided that any
                    matter or thing set out in any report to the Suppliers shall
                    not be subject to any such obligation and provided always
                    that nothing in this Clause 51.5.5 shall prevent the
                    disclosure of any information pursuant to Clause 69. The
                    Ancillary Services Provider shall be entitled to rely on any
                    such report in any legal proceedings (including
                    arbitration).

         51.5.6     If the Suppliers so resolve, the Ancillary Services Provider
                    shall promptly implement any recommendations made by the
                    Pool Auditor in a report relating to an audit, test, check
                    or review pursuant to Clause 51.5.1 and, in the event of any
                    dispute, such dispute shall be referred to arbitration in
                    accordance with Clause 83.

         51.5.7     The cost of any audit, test, check or review pursuant to
                    Clause 51.5.1 shall be borne by the requisitioning
                    Supplier(s). The costs of implementing any recommendations
                    pursuant to Clause 51.5.6 may be recovered by the Ancillary
                    Services Provider in accordance with the ASP Accounting
                    Procedure.

51.6     Basis of Payment: The Ancillary Services Provider shall calculate the
         total amount payable under Ancillary Services Agreements in respect of
         each Settlement Day together with any amendments to calculations made
         for previous Settlement Days based upon information derived from the
         Grid Operator and the Settlement System Administrator. The charges to
         Suppliers for Ancillary Services shall comprise the costs so calculated
         together with the charges of the Ancillary Services Provider calculated
         in accordance with Schedule 18. The Ancillary Services Provider shall
         notify a provisional sum to the Settlement System Administrator within
         three working days after receipt of such information from the Grid
         Operator and the Settlement System Administrator so as to be despatched
         by the Settlement System Administrator to Suppliers in accordance with
         the relevant Agreed Procedure to enable the Settlement System
         Administrator to apportion this sum to the sale of Active Energy
         according to the Pool Rules. The Ancillary Services Provider shall
         notify a final sum to the Settlement System Administrator by such time
         as will enable the Settlement System Administrator to take into account
         the final Settlement Run for each Settlement Day. Any unresolved amount
         shall be included in the final Settlement Run on an interim basis
         pending resolution. Thereafter it may be included (together with any
         errors or omissions subsequently arising) in any appropriate Settlement
         Run.

51.7     Lost opportunity costs:

         51.7.1     Subject to Clause 51.6, where the Ancillary Services
                    Provider pays any Generator an amount in respect of lost
                    opportunity costs the Ancillary Services Provider shall use
                    reasonable endeavours to include any such amounts in its
                    Ancillary Service charge to Suppliers in the Settlement Day
                    on which it arises or as soon as possible thereafter.

         51.7.2     As soon as the Ancillary Services Provider is notified by
                    any Generator that any obligation to pay any lost
                    opportunity costs may arise it shall consult the Suppliers
                    and, without prejudice to the Ancillary Services Provider's
                    right to recover such lost opportunity costs from Suppliers,
                    if requested by the Suppliers shall recover such lost
                    opportunity costs over such a period as may be agreed
                    between the Ancillary Services Provider and the Suppliers
                    and, in default of agreement, over such period as the
                    Ancillary Services Provider considers to be reasonable.


51.8     Independent Contractor: The Ancillary Services Provider shall act as an
         independent contractor in carrying out its duties pursuant to this
         Agreement and (unless expressly authorised to the contrary) shall
         neither act nor hold itself out nor be held out as acting as agent for
         any of the Other Parties.

51.9     Standard of care: In the exercise of its duties and responsibilities
         under this Agreement the Ancillary Services Provider shall exercise
         that degree of care, diligence, skill and judgment which would
         ordinarily be expected of a reasonably prudent operator of the
         Ancillary Services Business taking into account the circumstances
         actually known to the Ancillary Services Provider, its officers and
         employees at the relevant time or which ought to have been known to it
         or them had it or they made such enquiries as were reasonable in the
         circumstances.


51.10    Miscellaneous:

         51.10.1                   (a) The Ancillary Services Provider shall be
                                   entitled to rely upon any direction or
                                   instruction of the Executive Committee or the
                                   Chief Executive (if any) if the same is
                                   signed by way of authority in accordance with
                                   Clause 51.10.4 on behalf of two or more
                                   Committee Members or on behalf of the Chief
                                   Executive and shall not be obliged to comply
                                   with any direction or instruction of any
                                   sub-committee of the Executive Committee or
                                   any delegate of the Executive Committee other
                                   than the Chief Executive (unless such
                                   direction or instruction is shown as having
                                   been ratified by the Executive Committee);

                          (b)      The Ancillary Services Provider shall be
                                   entitled to rely upon any communication or
                                   document reasonably believed by it to be
                                   genuine and correct and to have been
                                   communicated or signed by the person by whom
                                   it purports to be communicated or signed and
                                   shall not be liable to any of the Parties for
                                   any of the consequences of such reliance.

         51.10.2          Compliance with the Director's directions: No
                          liability whatsoever shall attach to the Ancillary
                          Services Provider as a result of due compliance by it
                          with any directions and instructions of the Director,
                          provided that in complying with such directions and
                          instructions the Ancillary Services Provider is at all
                          times acting in good faith.

         51.10.3          Prior approval: Where by the terms of this Agreement
                          the Ancillary Services Provider is required to obtain
                          the prior directions, instructions, approval or
                          consent of the Executive Committee or the Chief
                          Executive, the Ancillary Services Provider shall have
                          no authority to, and shall not, act unless the
                          requisite directions, instructions, approval or
                          consent have first been obtained. Notwithstanding the
                          foregoing sentence, nothing in this Agreement shall
                          prevent the Executive Committee from ratifying any act
                          of the Ancillary Services Provider.

         51.10.4          Express authority: All directions and instructions of
                          the Executive Committee or the Chief Executive to the
                          Ancillary Services Provider shall, as between the
                          Ancillary Services Provider and the Pool Members, be
                          deemed to have the express authority of, and shall be
                          binding without reservation upon, all Pool Members.

         51.10.5          Authority of Pool Members: The Ancillary Services
                          Provider shall not be bound to act in accordance with
                          the directions or instructions of the Pool Members
                          unless the Pool Members act through the Executive
                          Committee.

         51.10.6          General Meetings: The Ancillary Services Provider
                          shall not be obliged to take any steps to ascertain
                          whether any resolution of Pool Members in general
                          meeting or of any class of Pool Members in separate
                          general meeting which it is advised by the Executive
                          Committee or the Chief Executive as having been passed
                          was in fact passed or passed by the requisite majority
                          and until the Ancillary Services Provider shall have
                          express written notice to the contrary from the
                          Executive Committee or the Chief Executive it shall be
                          entitled to assume that the relevant resolution was
                          passed or (as the case may be) the relevant requisite
                          majority was obtained.

         51.10.7          Exceptions: Notwithstanding the foregoing provisions
                          of this sub-clause 51.10, in the performance of its
                          duties and responsibilities under this Agreement the
                          Ancillary Services Provider shall not be bound to act
                          in accordance with the directions or instructions of
                          the Executive Committee or the Chief Executive if:-

               (a)  to do so would  cause the  Ancillary  Services  Provider  to
                    breach  any  of  its  obligations   under  the  Act  or  its
                    Transmission Licence; or

                          (b)      the Ancillary Services Provider has
                                   reasonable grounds for believing that it
                                   would so breach any of such obligations and
                                   has consulted the Director and:-



               (i)  the Director has not indicated that in his view it would not
                    involve any such breach; or



                                   (ii)     the Director has indicated that,
                                            notwithstanding any such actual or
                                            potential breach, the Director would
                                            not be minded to enforce compliance
                                            with those obligations and the
                                            Ancillary Services Provider has
                                            received an indemnity reasonably
                                            satisfactory to it in respect of its
                                            acting in accordance with such
                                            directions and instructions.



                          In any such event the Ancillary Services Provider
shall promptly notify the Executive Committee.



                    51.10.8  Reference  to  the  Director:  If at any  time  the
                         Ancillary  Services  Provider  has a  concern  which is
                         properly  and  reasonably  founded  that,  in acting in
                         accordance  with any  direction or  instruction  of the
                         Executive  Committee  or the Chief  Executive,  it will
                         breach one or more of its obligations  under the Act or
                         its Transmission Licence, then, if having discussed the
                         matter with the Executive  Committee the matter remains
                         unresolved,   the  Ancillary  Services  Provider  shall
                         either comply with such  direction or instruction or by
                         notice in writing refer the same to the Director,  such
                         notice   to  set  out  in  full   the   directions   or
                         instructions  given to the Ancillary  Services Provider
                         and the  grounds  for such  concern and to be copied to
                         the Executive Committee.  Pending any guidance from the
                         Director  in  response  to  any  such   reference  and,
                         provided  that the Director  shall not express any view
                         that such  reference is  misconceived,  vexatious or in
                         respect  of  an  improperly  or  unreasonably   founded
                         concern,  the Ancillary  Services Provider shall not be
                         liable to any of the other  Parties for refusing to act
                         in   accordance   with  the   relevant   direction   or
                         instruction. If the Director shall express such a view,
                         the Ancillary Services Provider shall be so liable.



                    51.11Suppliers'  Resolutions:  Where any matter is  reserved
                         under this Part XI or Schedule 18 for the  Suppliers to
                         resolve,  that  matter  shall  be  decided  upon by the
                         majority vote of the Suppliers'  representatives on the
                         Executive Committee.



51A.     TRANSMISSION SERVICES



         It is expressly acknowledged by the Parties that neither (i) the
         termination or expiry of the provisions of Clause 51A, 51B or 51C of
         this Agreement as in force immediately prior to the coming into effect
         of this Clause 51A, including the Transmission Services Scheme ("TSS")
         (as therein defined) and/or any addition to or amendment of any other
         provision of this Agreement effected pursuant to those Clauses whilst
         in force nor (ii) the termination or expiry of previous clauses in this
         Agreement which related to UMIS2 (as was therein defined) shall
         prejudice any Consumer's (as defined in the Pool Rules) or the Grid
         Operator's (acting through its agent the Ancillary Services Provider)
         accrued rights and liabilities under each of UMIS2 and/or TSS at the
         date of such termination or expiry which accrued rights shall include,
         for the avoidance of doubt, the ability to adjust sums calculated under
         UMIS2 and/or TSS in respect of disputes arising after such termination
         or expiry in respect of periods falling before such termination or
         expiry.



51B.     TRANSMISSION SERVICES SCHEME 2



         General:



51B.1    Notwithstanding any other provision of this Agreement, the provisions
         of this Clause shall govern the rights and obligations of the Parties
         in relation to the Transmission Services Scheme 2.



51B.2    In Recital (G), this Clause 51B, Schedule 9 and Schedule 11, for so
         long as amended by the provisions of Clause 51B.4, the term
         "Transmission Services Scheme 2" means the scheme to provide an
         incentive for the Grid Operator to minimise (taking into account other
         associated costs) a proportion of the costs arising under this
         Agreement and/or resulting from the operation of the NGC Transmission
         System including those arising from the acquisition of Ancillary
         Services, and more particularly:-



         (a) which provides for payments between the Grid Operator (acting
through its agent the Ancillary Services Provider) and Consumers in relation
to:-



                    (i)  the   Transmission   Services  Uplift  Payment,   which
                         comprises a Reactive Power Daily  Payment,  a Transport
                         Uplift  Daily   Payment  and  an  Energy  Uplift  Daily
                         Payment; and



                  (ii)    the Transmission Losses Daily Payment; and



                    (b)  which  provides for an adjustment in relation to out of
                         merit costs,



         in the form agreed pursuant to Clause 51B.6 as the same may be amended
from time to time in accordance with the terms of that Clause.



51B.3    The Transmission Services Scheme 2:



         (a)      The Parties agree (and agree that they will procure that the
                  Executive Committee will so agree) that in the period from
                  00.00 hours on 1st April, 1996 to 24.00 hours on 31st March,
                  1997 the Transmission Services Scheme 2, the amendments and/or
                  additions to the Pool Rules to implement the Transmission
                  Services Scheme 2 and the provisions of this Clause, shall
                  apply. This Clause 51B.3(a) may not be amended without the
                  prior written consent of all Parties.



         (b)      As indicated in Clause 51B.3(a), the provisions of Clause 51B,
                  the Transmission Services Scheme 2 and any addition to or
                  amendment of any other provisions of this Agreement or the
                  Pool Rules effected pursuant to this Clause 51B shall
                  terminate at 24.00 hours on 31st March, 1997, except for any
                  provision, addition or amendment which is required to continue
                  beyond that date to give effect to the operation of the
                  Transmission Services Scheme 2 in respect of any period before
                  that date.



51B.4    The Parties agree:-



     (a)  to be bound by the  terms,  conditions  and  other  provisions  of the
          Transmission Services Scheme 2;



     (b)  that the  Grid  Operator  (acting  through  its  agent  the  Ancillary
          Services  Provider) and each Consumer  shall make such payments as are
          required and  determined by the  provisions of the  amendments  and/or
          additions to the Pool Rules to  implement  the  Transmission  Services
          Scheme 2;



     (c)  that for the  period  during  which  this  Clause  51.B  applies,  the
          following changes shall be made to the provisions of this Agreement:-



          (i)  in  paragraphs  1,  5.4,  5.14,  17.5  and  17.6 of  Schedule  11
               references to the Ancillary  Services Provider shall be deemed to
               be  references  to itself and as agent for the Grid  Operator  in
               relation to the Transmission Services Scheme 2;



          (ii) in paragraph  2.1 of Schedule 11 the words "and the  Transmission
               Services  Scheme 2" shall be inserted after the words  "Ancillary
               Services";



          (iii)in paragraph  5.14 of Schedule 11 the words "or in respect of the
               Transmission Services Scheme 2" shall be inserted after the first
               reference to "Ancillary Services" and the words "or in respect of
               the Transmission  Services Scheme 2 for the relevant payment day"
               shall  be  inserted  after  the  words  "that  same  day"  and in
               paragraph  5.15  of  Schedule  11 the  words  "or  the  Ancillary
               Services  Provider"  shall be  inserted  after  the  words  "Pool
               Member" wherever they occur in that paragraph; and



          (iv) in Part 4 of Schedule 11, references to information in respect of
               Ancillary  Services  shall be deemed to  include  information  in
               respect of the Transmission  Services Scheme 2, in paragraph 17.5
               the  information  required shall include the total amount payable
               by the Ancillary  Services Provider  (exclusive of United Kingdom
               Value Added Tax) pursuant to the  Transmission  Services Scheme 2
               in respect of each  Settlement  Day, in  paragraph  17.6 the Pool
               Funds  Administrator shall include in its verification the amount
               shown to be payable by the Ancillary  Services  Provider pursuant
               to  the  Transmission  Services  Scheme  2  in  respect  of  each
               Settlement  Day and in paragraph  22.4 the  Confirmation  Notices
               shall include the total amount payable by the Ancillary  Services
               Provider  pursuant  to  the  Transmission  Services  Scheme  2 in
               respect of each Settlement Day.



51B.5    The Suppliers and the Grid Operator may request the Parties and the
         Executive Committee promptly (and in any event before the date the
         Transmission Services Scheme 2 is to take effect) to execute and do all
         such acts, matters and things (including effecting amendments to the
         Pool Rules) as may be necessary to give effect to the Transmission
         Services Scheme 2. The Parties shall not refuse (and agree that they
         will procure that the Executive Committee shall not refuse) any such
         request on the grounds of any objections to any provisions of any of
         the Annexes of Appendix 3 to the Pool Rules as agreed from time to time
         between the Suppliers and the Grid Operator.



51B.6    Effectiveness:



         Neither this Clause 51B (other than Clauses 51B.2, 51B.5 and this
         Clause 51B.6), nor the Transmission Services Scheme 2, nor any
         amendment, variation or replacement of either of them, nor any
         amendment, variation or replacement to the Pool Rules relating to the
         Transmission Services Scheme 2, may become effective except with the
         prior agreement of the Suppliers (which agreement shall be given by the
         passing of a resolution in a separate class meeting) and the prior
         written agreement of the Grid Operator.



51B.7    Survival:



         (a)      Termination or expiry of the provisions of this Clause 51B,
                  the Transmission Services Scheme 2 and/or any addition to or
                  amendment of any other provision of this Agreement effected
                  pursuant to this Clause shall not prejudice any Consumer's or
                  the Grid Operator's accrued rights and liabilities under the
                  Transmission Services Scheme 2 at the date of such termination
                  or expiry, which accrued rights shall, for the avoidance of
                  doubt, include the ability to adjust sums calculated under the
                  Transmission Services Scheme 2 in respect of disputes arising
                  after such termination or expiry in respect of periods falling
                  before such termination or expiry; and



         (b) the provisions of this sub-Clause 51B.7 and Clause 51B.3(b) shall
survive the termination of the Transmission Services Scheme 2.



51B.8    Definitions:



         In, and in relation to, this Clause 51B "Consumer" shall bear the
meaning given to that term in the Pool Rules.





<PAGE>




                                    PART XII

                               SETTLEMENT RE-RUNS

52.      SETTLEMENT RE-RUNS

          52.1 Re-runs:  The  Parties  acknowledge  and agree  that there may be
               occasions  following any final run of Settlement  (as referred to
               in  paragraph  D(3) of the  Preamble  to  Schedule  9) when it is
               necessary  in respect of a  Settlement  Day (or part  thereof) to
               re-determine the trades of electricity pursuant to this Agreement
               and the provision of Ancillary  Services (whether to take account
               of  oversight  or error,  malfunction  of the  Settlement  System
               operation in accordance with Grid Operator Despatch  instructions
               issued under emergency  circumstances,  award of an arbitrator(s)
               pursuant to Clause 83, court order or otherwise  howsoever).  The
               Executive  Committee,  in consultation with the Settlement System
               Administrator,  the Pool Funds Administrator and the Pool Auditor
               and, where  appropriate,  the Ancillary Services Provider and the
               Grid Operator,  shall decide how such  re-determination  is to be
               effected, the re-allocation of moneys and the period of time over
               which any such  re-allocation is to take place, any such decision
               to take account and give effect, as nearly as practicable, to the
               principles and procedures set out in this Agreement  (and,  where
               relevant, the award of the said arbitrator(s) or court order). In
               particular,  but  without  prejudice  to  the  generality  of the
               foregoing,  the  Executive  Committee  may require  following any
               relevant  final run of  Settlement  (and shall take due notice of
               any  request  from the  Ancillary  Services  Provider or the Grid
               Operator to this effect) the Settlement  System  Administrator to
               re-run,  and the Settlement  System  Administrator  shall re-run,
               Settlement  in respect of any  Settlement  Day (or relevant  part
               thereof) using the software and data  originally  used in respect
               of such  Settlement Day (or relevant part thereof) but subject to
               such changes,  amendments or additional inputs as may be required
               by the Executive  Committee (in  consultation  with the Ancillary
               Services Provider, the Grid Operator or any other relevant party)
               or by (as the case may be) such  arbitrator(s) or court. Any such
               re-run  shall  hereafter  in this  Clause 52 be  referred to as a
               "Re-run".

52.2     Timing: The Settlement System Administrator shall arrange for any
         Re-run to be carried out as soon as is reasonably practicable following
         request by the Executive Committee subject to the availability of
         computer time, compatible software, appropriate data and other
         resources.

52.3     Ancillary Services Provider: The Ancillary Services Provider shall have
         the right to incorporate any delayed or disputed amount in respect of
         the provision of Ancillary Services into Settlement without requiring a
         Re-run.

52.4     Notification: The Executive Committee shall promptly notify each Party,
         the Pool Auditor and the Director of each occasion on which it requires
         the Settlement System Administrator to carry out any Re-run, the
         reasons for such requirement, the timing thereof and the period to be
         covered thereby and shall provide each Party with such information
         about any Re-run as is relevant to such Party and shall provide the
         Pool Auditor and the Director with full details of any Re-run.

52.5     Proviso: The foregoing provisions of this Clause 52 are subject to the
         proviso that no Re-run shall be carried out, and neither the Executive
         Committee nor any Party shall be entitled to require that a Re-run be
         carried out, in respect of a Settlement Day or any part thereof after
         the first anniversary of such Settlement Day, but so that this proviso
         shall not restrict the right of any Party to claim or recover any
         moneys properly due and owing to it under this Agreement.



<PAGE>


                                    PART XIII

                             RISK MANAGEMENT SCHEME

53.      APPLICATION

          53.1 Request:  The  Executive  Committee  shall send any Pool Member a
               Scheme  Admission  Application  within 28 days after receipt of a
               request for the same from that Pool Member.

          53.2 Scheme  Admission  Application:  Any Pool Member may apply to the
               Executive Committee to have any Centrally  Despatched  Generating
               Unit admitted to the Scheme by completing  and  submitting to the
               Executive Committee a duly completed Scheme Admission Application
               not less than 40 days before the  proposed  date of  admission to
               the Scheme of that Centrally Despatched Generating Unit.

          53.3 Admission:  The  Executive  Committee  shall admit any  Centrally
               Despatched  Generating Unit to the Scheme in respect of which all
               Scheme Admission Conditions are met.

          53.4 Notification (1): If the Executive Committee  determines that, in
               respect of any Centrally  Despatched  Generating Unit, the Scheme
               Admission  Conditions have been met it shall forthwith and in any
               event  within  40 days  after  receipt  of the  Scheme  Admission
               Application  notify the relevant  Pool Member and the  Settlement
               System Administrator accordingly.

          53.5 Notification (2): If the Executive Committee  determines that, in
               respect of any Centrally  Despatched  Generating Unit, the Scheme
               Admission  Conditions have not been met it shall forthwith and in
               any event  within 40 days after  receipt of the Scheme  Admission
               Application  notify the  relevant  Pool Member of the reasons why
               the Scheme Admission Conditions have not been met.

53.6     Reference to the Director: In the event of any dispute between the
         Executive Committee and the relevant Pool Member over whether such Pool
         Member has fulfilled the Scheme Admission Conditions the same may be
         referred by the Executive Committee or the relevant Pool Member to the
         Director for determination, whose determination shall be final and
         binding for all purposes.

54.      SCHEME ADMISSION CONDITIONS

         The Scheme Admission Conditions are that:-

         54.1       No person has an Accountable Interest in the Centrally
                    Despatched Generating Unit which is the subject of the
                    Scheme Admission Application which, when added to the
                    Accountable Interests of that person in other Generating
                    Units (whether situate within England and Wales or
                    elsewhere), exceeds in aggregate 1500MW;

         54.2       The Pool Member does not have an Accountable Interest
                    (excluding any Accountable Interest of less than 10MW) in
                    more than four Generating Units (whether situate within
                    England and Wales or elsewhere). For the avoidance of doubt
                    a combined cycle module shall be deemed for these purposes a
                    single Generating Unit;

          54.3 The Centrally Despatched  Generating Unit which is the subject of
               the  Scheme  Admission  Application  has  not at the  date of the
               Scheme Admission Application been Commissioned;

          54.4 The Centrally  Despatched  Generating  Unit shall be admitted for
               seven calendar years from the date of its admission to the Scheme
               specified in the Scheme Admission Application; and

          54.5 The Pool Member shall specify in the Scheme Admission Application
               the proposed  Scheme  Planned  Availability  for each  Settlement
               Period  in the  proposed  first  Scheme  Year  for the  Centrally
               Despatched Generating Unit.

55.      RIGHTS AND OBLIGATIONS OF POOL MEMBERS

55.1     Notification of unavailability: In respect of each Scheme Year for each
         Scheme Genset (other than the first) the Pool Member shall not later
         than 28 days before the start of that Scheme Year for each Scheme
         Genset notify the Executive Committee of all Settlement Periods in that
         Scheme Year during which the Scheme Genset is intended to be
         unavailable.

          55.2 Scheme  Planned  Availability:  All  Settlement  Periods  in that
               Scheme  Year other than those  notified  under  Clause 55.1 shall
               together constitute the Scheme Planned Availability in respect of
               that Scheme Genset for that Scheme Year.

55.3     Failure to notify: If the Pool Member fails to notify the Executive
         Committee in accordance with Clause 55.1 of the Scheme Planned
         Availability in respect of that Scheme Genset for the following Scheme
         Year, the Scheme Planned Availability shall be deemed to be the same as
         the Scheme Planned Availability for the current Scheme Year.

          55.4 No amendment: The Scheme Planned Availability for any Scheme Year
               notified in  accordance  with Clause 55.1 or deemed in accordance
               with Clause 55.3 may not be amended.

          55.5 Payment  rights:  The Pool  Member  shall make or be  entitled to
               receive  payments in respect of each Scheme  Genset as determined
               in accordance with Section 27 of Schedule 9  notwithstanding  the
               expiry of the period referred to in Clause 50.4.

          55.6 No withdrawal: The Pool Member may not withdraw any Scheme Genset
               from the  Scheme  during any period  referred  to in Clause  50.4
               applicable to that Scheme Genset.

55.7     Actual planned availability: In respect of each Scheme Genset, the Pool
         Member shall use all reasonable endeavours to ensure that the Scheme
         Planned Availability for each Scheme Year is the actual planned
         availability of such Scheme Genset.

56.      REVIEW

56.1     Review: Within two months after the end of the third Scheme Year in
         respect of which the first Scheme Genset has been admitted to the
         Scheme and each subsequent anniversary of that date the Executive
         Committee shall (with the consent of the Director) appoint an
         independent firm of accountants of internationally recognised standing
         to review the Scheme to establish whether or not any element of the
         Scheme (or the Scheme taken as a whole) gives rise to a systematic
         imbalance which is likely to prevent the payments to the Scheme
         balancing payments from the Scheme and to submit to the Executive
         Committee and the Director a report setting out details of any such
         imbalance and his findings and recommendations for amending the Scheme
         designed to correct any such imbalance.

56.2     Amendments: The Executive Committee may make such amendments to the
         provisions of Section 27 of Schedule 9 as are required to implement the
         recommendations referred to in Clause 56.1. Any such amendments shall
         apply in respect of any Scheme Admission Application received after the
         date such amendments become effective and shall constitute a new
         Scheme.

56.3     Existing rights and obligations continue: Any Pool Member shall remain
         entitled to the benefits and subject to the obligations of the Scheme
         with respect to any Scheme Genset in effect at the time of admission of
         that Scheme Genset to the Scheme.





<PAGE>


                                    PART XIV

                                  FUEL SECURITY

57.      DEFINITIONS

         Definitions: In this Part XIV:-

         "Fuel Security Interest" in relation to a particular Payment
         Instruction, means the interest (if any) accruing on the Fuel Security
         Payment or Fuel Security Reimbursement specified in that Payment
         Instruction pursuant to sub-clause 2.08 of Part 5 of the Fuel Security
         Code;

         "Fuel Security Ledger" means any ledger required to be maintained by
the Pool Funds Administrator in accordance with Clause 59;

         "Fuel Security Payment" means the amount specified in a Payment
         Instruction which a Generator is entitled to recover from those persons
         specified in that Payment Instruction (excluding Fuel Security
         Interest, if any, in relation thereto);

         "Fuel Security Reimbursement" means the amount specified in a Payment
         Instruction which a Generator is liable to reimburse to those persons
         specified in that Payment Instruction (excluding Fuel Security
         Interest, if any, in relation thereto); and

         "Payment Instruction" means an instruction which has been duly
         authorised and delivered by a Generator to whom the Fuel Security Code
         applies to the Pool Funds Administrator in the form, and in the manner,
         specified in the Fuel Security Code.

58.      PAYMENT INSTRUCTIONS

          58.1 Effect of a Payment Instruction:  Following delivery of a Payment
               Instruction to the Pool Funds Administrator:-

         58.1.1     any Fuel Security Payment specified in that Payment
                    Instruction (together with any Fuel Security Interest in
                    relation thereto) shall be treated as an amount which is due
                    to that Generator from those persons specified in that
                    Payment Instruction and which is payable on the basis
                    provided in that Payment Instruction; and

         58.1.2     any Fuel Security Reimbursement specified in that Payment
                    Instruction (together with any Fuel Security Interest in
                    relation thereto) shall be treated as an amount which is due
                    from that Generator to those persons specified in that
                    Payment Instruction and which is payable on the basis
                    provided in that Payment Instruction; and

         58.1.3     subject to Clauses 58.2 and 58.3, the Pool Funds
                    Administrator shall arrange for such Fuel Security Payment
                    or such Fuel Security Reimbursement (together with any Fuel
                    Security Interest in relation thereto) to be paid to or, as
                    the case may be, paid by that Generator by or, as the case
                    may be, to those persons specified in that Payment
                    Instruction in accordance with the provisions of such
                    Payment Instruction; and

         58.1.4     such Payment Instruction (including any calculation,
                    determination or other matter stated or specified therein)
                    shall, save in the case of fraud, be conclusive and binding
                    upon all Parties.

58.2     Clarification: If the Pool Funds Administrator considers either that
         the basis of payment of a Fuel Security Payment or a Fuel Security
         Reimbursement provided for in a Payment Instruction is unclear,
         contradictory or incomplete or that it is impossible to implement in
         full the basis of payment provided for in a Payment Instruction, then
         the Pool Funds Administrator must, promptly on becoming aware of the
         same, notify the Director in reasonable detail of the same and, until
         that matter is clarified, the Pool Funds Administrator shall only be
         obliged to implement the payment specified in that Payment Instruction
         to the extent that without clarification such implementation is
         possible.

58.3     Failure to specify or clarify: If a Payment Instruction fails to
         specify the basis upon which the Fuel Security Payment or a Fuel
         Security Reimbursement specified in that Payment Instruction must be
         paid or if the Director fails to clarify any matter notified to it in
         accordance with Clause 58.2 within ten Business Days of such
         notification then the Pool Funds Administrator shall arrange for the
         relevant payment to be made on such basis as the Executive Committee
         shall, with the written approval of the Director, determine to be
         appropriate.

59.      RECORD KEEPING AND PAYMENTS

59.1     Fuel Security Ledgers:

         59.1.1     Following delivery of a Payment Instruction to the Pool
                    Funds Administrator, the Pools Funds Administrator shall, if
                    he has not already done so, open and thereafter maintain a
                    Fuel Security Ledger in the name of that Generator and shall
                    record therein all amounts (together with any Fuel Security
                    Interest in relation thereto) due to and from that Generator
                    that are specified in Payment Instructions and shall also
                    record therein all transactions arranged by the Pool Funds
                    Administrator for payments to be made to and from that
                    Generator in accordance with the provisions of Payment
                    Instructions.

         59.1.2     The Pool Funds Administrator shall from the time that a Fuel
                    Security Ledger is opened until it records a nil balance
                    provide to each Generator and to each Supplier on the last
                    Business Day of each calendar month a statement reflecting
                    all entries recorded in the Fuel Security Ledger of that
                    Generator over the course of the previous month.

          59.1.3 The Fuel  Security  Ledger  of a  Generator  shall,  except  as
               required  by Clause  59.2.2 or Part IX, be kept  confidential  in
               accordance with Part XX.

         59.1.4     Each monthly statement provided under Clause 59.2.2 shall,
                    save in the case of manifest error, be deemed prima facie
                    evidence of the contents of that part of the Fuel Security
                    Ledger to which it relates.

         59.1.5     Each Party shall promptly review each monthly statement
                    provided to it under Clause 59.2.2 and shall (without
                    prejudice to any of its rights under this Agreement) where
                    practicable within ten Business Days after receiving each
                    such statement notify the Pool Funds Administrator of any
                    inaccuracies in such statement of which it is aware.

         59.1.6     If the Pool Funds Administrator at any time receives from a
                    Generator or any Supplier a notice disputing the accuracy of
                    the Fuel Security Ledger of that Generator, the Pool Funds
                    Administrator shall consult with the Party giving the notice
                    and use all reasonable endeavours to rectify any inaccuracy.
                    In the event that any inaccuracy in a Fuel Security Ledger
                    of a Generator is rectified, the Pool Funds Administrator
                    shall advise that Generator and the Suppliers of the
                    inaccuracy that was rectified.

59.2     Fuel Security Payments: Following delivery to the Pool Funds
         Administrator of a Payment Instruction specifying a Fuel Security
         Payment, the Pool Funds Administrator shall enter in the Fuel Security
         Ledger of that Generator as a credit (a) the amount of the Fuel
         Security Payment, and (b) thereafter, any Fuel Security Interest in
         relation thereto.

59.3     Fuel Security Reimbursements: Following delivery to the Pool Funds
         Administrator of a Payment Instruction specifying a Fuel Security
         Reimbursement, the Pool Funds Administrator shall enter in the Fuel
         Security Ledger of that Generator as a debit (a) the amount of the Fuel
         Security Reimbursement, and (b) thereafter, any Fuel Security Interest
         in relation thereto.

59.4     Other Entries: Any amount paid to or, as the case may be, paid by a
         Generator in accordance with the provisions of a Payment Instruction
         shall be entered as a debit or, as the case may be, a credit in the
         Fuel Security Ledger of that Generator.

59.5     Set off: The Pool Funds Administrator shall, unless it reasonably
         believes that it would be unlawful to do so, from time to time where
         possible set off any amounts shown as credits in the Fuel Security
         Ledger of a Generator against any amounts shown as debits in the Fuel
         Security Ledger of that Generator in the order in which they were
         entered. Any balance shown in the Fuel Security Ledger of a Generator
         shall, if it is a credit, be paid to or, if it is a debit, be paid by
         that Generator to the extent that it relates to a Payment Instruction
         on the basis provided for in that Payment Instruction. The entitlements
         and liabilities of a Generator (and the corresponding liabilities and
         entitlements of the respective debtors and creditors of that Generator)
         shall, to the extent that they have been set off as aforesaid, be
         deemed satisfied and extinguished.

59.6     Schedule 11: All payments made to or by any Generator in accordance
         with the provisions of a Payment Instruction shall, subject to any
         contrary instruction contained in the provisions of a Payment
         Instruction, be effected by the Pool Funds Administrator through the
         Banking System and the Billing System established in accordance with
         Schedule 11.



<PAGE>


                                     PART XV

                                    METERING

60.      METERING

60.1     Introduction: The rights and obligations of each Party to this
         Agreement which enable the accurate measurement of Energy traded for
         the purposes of this Agreement by appropriate metering installations
         are as set out in this Part XV and also in Schedule 21, and the
         provisions of Schedule 21 shall have effect and apply in the same
         manner as the remaining provisions of this Agreement apply with respect
         to each such Party.

60.2     General:

         60.2.1     For the purposes of this Agreement the quantities of Active
                    Energy and Reactive Energy Exported or Imported by Parties
                    shall be measured and recorded through Metering Equipment
                    installed, operated and maintained and otherwise provided
                    for as set out in this Part XV and in Schedule 21. Each
                    Generating Unit (excluding for this purpose Generation
                    Trading Blocks) which is subject to Central Despatch shall
                    have separate Metering Equipment.

         60.2.2     Each Party is required to register or procure that there is
                    registered with the Settlement System Administrator the
                    Metering System at each Site where such Party Exports or
                    Imports electricity except where such electricity is not
                    sold or purchased in accordance with the Pool Rules.

60.3     Registrants:

         60.3.1     A Metering System shall have a Registrant and Operator (and
                    shall be commissioned in accordance with the relevant Code
                    of Practice) before the Settlement System Administrator is
                    required to take such Metering System and the data derived
                    therefrom into account for the purposes of Settlement.

         60.3.2     Each Metering System (and the identities of its respective
                    Registrant and Operator) which the Settlement System
                    Administrator shall take into account for the purposes of
                    Settlement shall be as set out, for the time being and from
                    time to time, in the Register.

         60.3.3 A Registrant's role in relation to a Metering System under this
Agreement shall continue until:-

                    (i)   such Registrant ceases to be a Party or another Party
                          complying with the definition of Registrant accepts
                          such role as Registrant in accordance with the
                          provisions of this Agreement by service of a duly
                          completed notice in the form prescribed by the
                          relevant Agreed Procedure (but without prejudice to
                          any accrued liabilities of the previous Registrant);
                          or

                    (ii)  the Plant or Apparatus of the Registrant, in respect
                          of such Metering System, ceases to be connected at the
                          relevant Site (as indicated in the notification to the
                          Settlement System Administrator in the form prescribed
                          by the relevant Agreed Procedure); or

                    (iii) in the case of a Registrant of a Metering System which
                          is at the point of connection between a Public
                          Electricity Supplier's Distribution System and a
                          Second Tier Customer, the Registrant ceases to act as
                          Second Tier Supplier in relation to the same at such
                          point of connection; or

                    (iv)  in the case of a Registrant of a Metering System which
                          is at the point of connection between a Public
                          Electricity Supplier's Distribution System and an ERS
                          First Tier Customer, the Registrant ceases to act as
                          Supplier in relation to the same at such point of
                          connection; or

                    (v)   in the case of a Registrant of a Metering System which
                          is at the point of connection between a Public
                          Electricity Supplier's Distribution System and a
                          Non-Pooled Generator, the Registrant ceases to act as
                          Supplier purchasing generation from such Non-Pooled
                          Generator in relation to the same at such point of
                          connection.

         60.3.4 The Settlement System Administrator shall inform the relevant
Host PES of:-

                    (i)   the identity of any new Registrant; and

                    (ii)  any change in the identity of any existing Registrant,

                    of a Metering System in respect of which that Public
                    Electricity Supplier is Host PES, after such change is
                    notified to the Settlement System Administrator in
                    accordance with the terms of this Agreement.

         60.3.5     There must always be one and, at any point in time, no more
                    than one Registrant for each Metering System which is
                    registered with the Settlement System Administrator.

         60.3.6     Any notice of a new, or of a change in an existing,
                    Registrant, Equipment Owner Operator, Second Tier Customer,
                    ERS First Tier Customer, Non-Pooled Generator or Host PES or
                    any Form of Acknowledgement required under this Part XV or
                    Schedule 21 shall be in such form and given to such person
                    at such time(s) and accompanied by payment of such fees (if
                    any) as is prescribed by the relevant Agreed Procedures.

         60.3.7     If a Metering System ceases to have a Registrant who is not
                    replaced as Registrant in relation to the relevant Metering
                    Equipment, the Settlement System Administrator shall not be
                    obliged to take the relevant Metering System into account
                    for the purposes of Settlement.

         60.3.8 A Registrant may not resign or retire as Registrant except in
accordance with Clause 60.3.3.

         60.3.9     The Registrant in respect of any Metering System shall
                    provide to the Settlement System Administrator such
                    information as may be required by the relevant Agreed
                    Procedures.

         60.3.10    The Settlement System Administrator shall not enter on the
                    Register a Registrant in respect of which evidence of
                    consent of the Equipment Owner has not been provided in
                    accordance with the relevant Agreed Procedure.

         60.3.11    Where a Metering System at the point of connection of two or
                    more Distribution Systems is to be registered with the
                    Settlement System Administrator, all interested Parties
                    shall agree upon and nominate the Registrant by means of a
                    duly completed nomination to the Settlement System
                    Administrator in the form prescribed by the relevant Agreed
                    Procedure.

         60.3.12    A Metering System for recording the output of a Non-Pooled
                    Generator must be capable of being identified separately for
                    the purposes of Settlement from any Metering System
                    recording demand. For the avoidance of doubt, it is
                    acknowledged that one set of Metering Equipment may comprise
                    more than one separately-identified Metering System.

60.4     Operators:

         60.4.1     There must always be one and, at any point in time, no more
                    than one Operator for each Metering System which is
                    registered with the Settlement System Administrator. A
                    replacement Operator of such Metering System may be
                    appointed from time to time in accordance with the
                    provisions of this Part XV, Schedule 21 and the relevant
                    Agreed Procedure.

          60.4.2 All  Metering  Systems at the site of a  Non-Pooled  Generator,
               which contain all or any part of the same Metering Equipment must
               have the same Operator.

         60.4.3     Any notice of a new Operator or of a change in Operator
                    (including upon resignation, removal or cessation in
                    accordance with the provisions of Schedule 21) or any Form
                    of Acknowledgement required under this Part XV or Schedule
                    21 shall be in such form and given to such person at such
                    time(s) and accompanied by payment of such fees (if any) as
                    is prescribed by the relevant Agreed Procedures. Where any
                    Meter Operator Party has not acknowledged its appointment as
                    Operator the Settlement System Administrator shall notify
                    the Registrant in accordance with the relevant Agreed
                    Procedure.

         60.4.4     The Registrant in respect of a Metering System shall ensure
                    that there is appointed from time to time an Operator, which
                    is a Meter Operator Party, in accordance with, and for the
                    purposes of, Schedule 21 as Operator in respect of that
                    Metering System.

         60.4.5     If a person which is an Operator in respect of any Metering
                    System ceases to be an Operator in respect thereof for
                    whatever reason (including upon removal or resignation) or
                    ceases to be a Meter Operator Party (including upon removal
                    or resignation) and there has not been appointed, at that
                    time, a replacement Operator in respect of the relevant
                    Metering System(s) in accordance with the provisions of this
                    Part XV and Schedule 21, such person's responsibilities as
                    Operator of such Metering Equipment shall upon such
                    cessation be assumed by the Registrant in respect of such
                    Metering Equipment who shall be deemed to be the Operator
                    therefor (notwithstanding that it shall not be registered as
                    such by the Settlement System Administrator) in accordance
                    with the provisions of this Clause (the "deemed Operator").

         60.4.6     If a person which is an Operator in respect of any Metering
                    System at the site of a Non-Pooled Generator ceases to be an
                    Operator in respect thereof for whatever reason (including
                    upon removal or resignation) or ceases to be a Meter
                    Operator Party (including upon removal or resignation) and
                    there has not been appointed, at that time, a replacement
                    Operator in respect of the relevant Metering System(s) in
                    accordance with the provisions of this Part XV and Schedule
                    21, such person's responsibilities as Operator of the
                    relevant Metering Equipment shall upon such cessation be
                    assumed by the Registrant of the Metering System registered
                    for supply with respect to such Metering Equipment. Such
                    Registrant shall be deemed to be the Operator therefor
                    (notwithstanding that it shall not be registered as such by
                    the Settlement System Administrator) in accordance with the
                    provisions of this Clause (the "Deemed Operator").

         60.4.7     As soon as any Registrant has reasonable grounds to believe
                    that an Operator of any Metering System in respect of which
                    it is the Registrant has ceased to act as Operator therefor
                    in accordance with substantially all of its responsibilities
                    as set out in Schedule 21 it shall remove such Operator in
                    respect of such Metering System in accordance with paragraph
                    6.1 of Schedule 21.

         60.4.8     If the Settlement System Administrator has reasonable
                    grounds to believe that an Operator of any Metering System
                    has ceased to act as Operator therefor in accordance with
                    substantially all of its responsibilities as set out in
                    Schedule 21 the Settlement System Administrator shall notify
                    the Registrant in accordance with the relevant Agreed
                    Procedure.

         60.4.9     Any Registrant which is deemed to be the Operator of a
                    Metering System pursuant to the provisions of Clause 60.4.5
                    shall, subject to Clauses 60.4.10 and 60.4.11, continue to
                    act as the Operator in respect of any Metering System to
                    which that Clause applies, or shall appoint an agent or
                    contractor which shall continue to act as the Operator in
                    respect of such Metering System, for a period of 10 Business
                    Days (which shall commence at the time of the cessation
                    referred to in Clause 60.4.4) or, if a new Operator is
                    registered in respect of that Metering System prior to the
                    expiry of that period, for a period ending on the date of
                    such registration.

         60.4.10    If a Registrant to which Clause 60.4.9 applies does not act
                    as Operator in accordance with the provisions thereof or
                    does not appoint an agent or contractor who shall act as
                    Operator, or if the 10 Business Day period referred to in
                    Clause 60.4.9 shall expire without a replacement Operator
                    being registered with the Settlement System Administrator in
                    respect of that Metering System in accordance with paragraph
                    4 of Schedule 21, that Registrant shall:-

                    (i)   undertake to cease forthwith to supply or to generate
                          or to take a supply of electricity for the purposes of
                          the sale or acquisition of electricity pursuant to
                          this Agreement at the site where such supply or
                          generation is measured, recorded and communicated to
                          the Settlement System Administrator by that Metering
                          System; and

                    (ii) notify the Settlement System Administrator in
accordance with the relevant Agreed Procedure of that fact.

         60.4.11    During the period in which a Registrant is the deemed
                    Operator in accordance with this Clause it shall be required
                    (save only as expressly provided to the contrary in this
                    Agreement) to comply with the requirements of this Part XV
                    and Schedule 21 as Operator provided that, but without
                    prejudice to any liability to pay for Active or Reactive
                    Energy traded by it, such Registrant as deemed Operator:-

                    (i)   shall not be required to be registered as Operator
                          with the Settlement System Administrator nor to comply
                          with the prescribed conditions for registration as
                          Operator from time to time in accordance with the
                          provisions of Schedule 21; and

                    (ii)  shall not at any time when it is the deemed Operator
                          be required to incur significant capital expenditure
                          in the fulfilment of obligations contained in this
                          Part XV or Schedule 21 where:-

                          (a)    the Metering Equipment shall have become
                                 defective, inaccurate or in want of repair (the
                                 "defective Metering Equipment") as a direct
                                 consequence of the act or omission of any
                                 previous Operator;

                          (b)    the Registrant shall upon becoming aware of the
                                 same have taken all steps to cease forthwith to
                                 supply or to generate electricity for the
                                 purposes of the sale or acquisition of
                                 electricity pursuant to this Agreement at or in
                                 relation to the site where such supply or
                                 generation is measured, recorded and
                                 communicated to the Settlement System
                                 Administrator by the defective Metering
                                 Equipment; and

                          (c)    the Registrant shall have notified the
                                 Settlement System Administrator in accordance
                                 with the relevant Agreed Procedure of the fact
                                 that the supply or generation has ceased.

                            Where (x) the Settlement System Administrator
                            proposes to exercise its right under paragraph 18 of
                            Schedule 21 to replace, renew or repair the
                            defective Metering Equipment (the "remedial work");
                            (y) the exercise of such right would result in the
                            incurring of significant capital expenditure; and
                            (z) the Register indicates that such Registrant is
                            acting as deemed Operator, the Settlement System
                            Administrator shall notify the Registrant before
                            undertaking such remedial work and shall give such
                            Registrant the opportunity to comply with (ii) (b)
                            and (c) above before commencing such remedial work.

60.5     Maintenance of Register and documents:

         60.5.1    The Settlement System Administrator shall keep a register 
recording:-

          (i)  each  Metering  System  which is accepted for the purposes of the
               Settlement System;

          (ii) the respective identities in respect of each such Metering System
               of:-

                          (a)      the Registrant;

                          (b)      the Operator;

                          (c)      the Equipment Owner;

                          (d)      the Host PES (where applicable);

                          (e)      any Second Tier Customer, ERS First Tier
                                   Customer or Non-Pooled Generator in respect
                                   of a supply to which that Metering System is
                                   being used; and

                          (f)      any agent which may be appointed from time to
                                   time by the Settlement System Administrator
                                   for the purpose of data collection or, where
                                   appropriate, of any Second Tier Agent in
                                   respect of such Metering System or, where the
                                   Settlement System Administrator does not
                                   appoint or have currently appointed such
                                   agent or Second Tier Agent in respect of a
                                   Metering System, a note to this effect;

          (iii) loss adjustment details whether by meter biasing or by software;

          (iv) whether the Metering  Equipment  comprising a Metering  System is
               the subject of a dispensation agreed in accordance with paragraph
               14 of Schedule 21; and

                    (v) the relevant Code(s) of Practice in respect of such
Metering System.
         60.5.2     For the purposes of this Agreement, the Settlement System
                    Administrator shall refer only to the Register to identify
                    the Registrant, Operator, Equipment Owner, Host PES, Second
                    Tier Customer, ERS First Tier Customer, Non-Pooled
                    Generator, agent or Second Tier Agent referred to in Clause
                    60.5.1 relating to each Metering System and shall not be
                    obliged to acknowledge or be bound by any other agreement or
                    arrangement entered into by any Registrant, Operator,
                    Equipment Owner, Host PES, Second Tier Customer, ERS First
                    Tier Customer or Non-Pooled Generator.

         60.5.3     The Settlement System Administrator shall keep the Register
                    up to date, noting changes to Registrants, Operators,
                    Equipment Owners, Host PESs, Second Tier Customers, ERS
                    First Tier Customers, Non-Pooled Generators, Metering
                    Equipment, dispensations and any Site disconnections as
                    notified to it pursuant to this Agreement and any changes to
                    any agent or Second Tier Agent. The Settlement System
                    Administrator shall also record in the Register any other
                    information regarding each Metering System as may be
                    reasonably required by the Executive Committee.

60.6     Communication links and central collector stations:

         60.6.1     The Settlement System Administrator shall collect (or
                    procure the collection of) and estimate data relating to
                    quantities of Active and Reactive Power Imported or Exported
                    by any Party as may be required for the proper functioning
                    of Settlement in accordance with the provisions of this
                    Clause 60.6.

         60.6.2     The Settlement System Administrator shall collect or procure
                    the collection of all such data referred to in Clause 60.6.1
                    as is available from Outstations either by means of remote
                    interrogation or by means of manual on-site interrogation.

         60.6.3           (a) For the purposes of remote interrogation the
                          Settlement System Administrator shall enter into,
                          manage and monitor contracts or other arrangements to
                          provide for the maintenance of all communication links
                          by which information is passed from Outstations to the
                          Settlement System Administrator or its agent other
                          than exchange links which form part of Communications
                          Equipment.

                    (b)   In the event of any fault or failure of any
                          communication link or any error or omission in such
                          data or all necessary data not being available from
                          Outstations the Settlement System Administrator shall
                          collect or procure the collection of such data by
                          manual on-site interrogation in accordance with the
                          relevant Agreed Procedures.

         60.6.4 The Settlement System Administrator shall be responsible for the
installation and maintenance of central collector stations.

         60.6.5     The Settlement System Administrator shall collect or procure
                    the collection of data for the purposes of the Settlement
                    System from Embedded Generators, Second Tier Suppliers,
                    Second Tier Customers, ERS First Tier Customers, Non-Pooled
                    Generators and inter-Distribution System connections in
                    accordance with the relevant Agreed Procedures.

         60.6.6     The obligation to maintain communications links in respect
                    of Metering Equipment shall not apply where and with effect
                    from the date on which a person receiving a supply of or
                    generating electricity recorded by such Metering Equipment
                    ceases to be a Second Tier Customer or an ERS First Tier
                    Customer, a Non-Pooled Generator, a Generator or a PES.

60.7     Class rights:

         60.7.1     The levels of accuracy for Metering Equipment at points of
                    connection of Second Tier Customers taking up to (and
                    including) 100kW of demand and at new points of connection
                    between two or more Distribution Systems were not set as at
                    1st April, 1993 and shall be as specified by the Executive
                    Committee subject to the consent of any relevant class of
                    Pool Members.

         60.7.2     The levels of accuracy for Metering Equipment at points of
                    connection of Non-Pooled Generators shall be as specified by
                    the Executive Committee subject to the consent of any
                    relevant class of Pool Members.

         60.7.3     Any change to the standards of accuracy of Metering
                    Equipment required for Second Tier Customers up to (and
                    including) 100kW before 31st March, 1998 shall be a change
                    to the class rights of Suppliers.

         60.7.4     Any change to the standards of accuracy of Metering
                    Equipment required for Non-Pooled Generators shall be a
                    change to the class rights of Suppliers.

          60.8 Sealing:  Metering Equipment shall be as secure as is practicable
               in all the circumstances and for this purpose:-

          (a)  all Metering  Equipment  shall  comply with the  relevant  Agreed
               Procedure; and

         (b)        the Executive Committee and the Settlement System
                    Administrator shall regularly review Agreed Procedures for
                    security arrangements in relation to Metering Equipment.

          60.9 Discrepancies between meter advance and half hourly value totals:
               The Parties  acknowledge  that,  in  transmitting  metered  data,
               impulses  representing  quantities  of  electricity  may be  lost
               between the  relevant  Meter and the  Outstations  giving rise to
               inaccuracies  in half  hourly  values  notwithstanding  that  the
               Metering  Equipment is complying  with the standards  required by
               this Agreement.  In such  circumstances  any differences  between
               electricity  flows  recorded  on Meters and the total of the half
               hourly values recorded in the Settlement  System will be noted at
               the time that the Meter is inspected  and read by the  Settlement
               System Administrator  pursuant to paragraph 10 of Schedule 21 and
               will be dealt with as provided in the relevant Agreed  Procedure.
               In any other  circumstances  where the Metering  Equipment is not
               complying  with the  standards  required by this  Agreement  such
               difference  will be dealt with in accordance with paragraph 11 of
               Schedule 21.

60.10    Meter Failure:

         60.10.1    If at any time any Metering Equipment ceases to function or
                    is found to be outside the prescribed limits of accuracy
                    referred to in paragraph 7.3.1 of Schedule 21 for whatever
                    reason then, except in the circumstances referred to in
                    Clause 60.10.2:-

                    (a) in the case of Metering Equipment ceasing to function,
during the period from the date of such cessation; or

                    (b)   in any other case, during the period from the time
                          when such inaccuracy first occurred or, if such time
                          is unknown, from the midnight preceding the day during
                          which the disputed reading occurred,

                    until, in either such case, the date of adjustment,
                    replacement, repair or renewal of such Metering Equipment
                    under paragraph 8.4 of Schedule 21, the meter readings shall
                    be deemed to be those calculated pursuant to the relevant
                    Agreed Procedure.

         60.10.2    If at any time a voltage transformer fuse on a circuit
                    supplying a Meter fails with the result that the Metering
                    Equipment is outside the prescribed limits of accuracy
                    referred to in paragraph 7.3.1 of Schedule 21, the meter
                    readings from the time the failure is deemed to have
                    occurred until the voltage transformer circuit is again
                    restored to the Meter shall be deemed to be those calculated
                    pursuant to the relevant Agreed Procedure. A failure shall
                    be deemed to have occurred at the point in time provided for
                    in the relevant Agreed Procedure.

60.11    Disputes:

         60.11.1    Any dispute regarding the accuracy of data recorded or
                    transmitted by Metering Equipment in respect of any
                    Settlement Day which is to be used for the purposes of
                    Settlement and where the purpose of the resolution of such
                    dispute is solely to affect payments arising from a
                    Settlement Run shall, if there is a relevant Agreed
                    Procedure, be dealt with in accordance with such Agreed
                    Procedure. If, having exhausted such Agreed Procedure any
                    Party is not satisfied with the outcome, such Party may
                    refer the matter to the Executive Committee. If there shall
                    be no relevant Agreed Procedure, such dispute shall be
                    referred to the Executive Committee. If, in either case, any
                    Party is not satisfied with the decision of the Executive
                    Committee, the matter may be referred by such Party to
                    arbitration in accordance with Clause 83.

         60.11.2    Any dispute regarding Metering Equipment (other than a
                    dispute referred to in Clause 60.11.1) shall be referred to
                    the Executive Committee. If any Party is not satisfied with
                    the decision of the Executive Committee, the matter may be
                    referred by such Party to arbitration in accordance with
                    Clause 83.

         60.11.3    It is hereby expressly acknowledged and agreed by the
                    Parties that the resolution of any dispute referred to in
                    Clause 60.11.1 or 60.11.2 shall in all cases be without
                    prejudice to the bringing or pursuing of any claim, by or
                    against, or the resolving of any issue between any one or
                    more of such Parties or any other Party arising out of the
                    same facts or circumstances, or facts or circumstances
                    incidental to the facts and circumstances giving rise to
                    such dispute, or upon the basis of which such dispute has
                    been resolved, in favour of, or against, a Meter Operator
                    Party or Meter Operator Parties.

         60.11.4    Upon the request of any Party which is a party to a dispute
                    referred to in Clause 60.11.1 or 60.11.2 any relevant data
                    derived from Metering Equipment may be submitted by the
                    Settlement System Administrator to the body then having
                    jurisdiction in respect of the relevant dispute for the
                    purposes of resolving such dispute.

60.12    Information:

         60.12.1    If a Pool Member or Party intends to make or provide or make
                    a significant alteration to a connection to the NGC
                    Transmission System or to a Distribution System which
                    connection is of 100MW or more in capacity and which may
                    require a new Metering System to be registered into the
                    Settlement System or a significant change to a Metering
                    System to be registered into the Settlement System, the Pool
                    Member or Party shall inform the Settlement System
                    Administrator as soon as possible and, in any event, not
                    later than three months prior to the date on which the Pool
                    Member or Party expects to make or provide the connection or
                    change. Such information will be regarded as confidential to
                    the Pool Member or Party providing it, and will be used by
                    the Settlement System Administrator only for the purpose of
                    preparing the Settlement System to take account of the
                    Metering System when it is registered.

         60.12.2    Any information regarding or data acquired by the Settlement
                    System Administrator or its agent from Metering Equipment at
                    any Site which is a point of connection to a Distribution
                    System shall, and may, be passed by the Settlement System
                    Administrator or its agent to the operator of the relevant
                    Distribution System. The said operator of the relevant
                    Distribution System may only use the same for the purposes
                    of the operation of the Distribution System and the
                    calculation of charges for use of and connection to the
                    Distribution System.

60.13 Ownership of Metering Data, access, use and use of Communications
Equipment:

         60.13.1    The Registrant of any Metering System shall own the data
                    acquired therefrom provided that (and each Registrant hereby
                    expressly agrees and acknowledges that) a Second Tier
                    Customer, ERS First Tier Customer or Non-Pooled Generator of
                    that Registrant in respect of which such data is generated
                    shall be entitled at all times without charge by the
                    Registrant to access, obtain and use such data and provided
                    further that:-

                    (i) such access, obtaining or use, or the method of such
access, obtaining or use, does not interfere with the operation of Settlement;

                    (ii)  nothing in this Clause 60.13.1 shall require the
                          Registrant actively to provide such data to such
                          Second Tier Customer, such ERS First Tier Customer or
                          such Non-Pooled Generator or so to provide such data
                          free of charge; and

                    (iii) such access shall not be by using any communications
                          link used by the Settlement System Administrator for
                          the purposes of Clause 60.6 without the prior written
                          consent of the Settlement System Administrator.

         60.13.2    The Settlement System Administrator and, for the purposes of
                    the performance by the Pool Auditor of its functions under
                    Part IX, the Pool Auditor are hereby authorised to use all
                    data which is owned by the Registrant pursuant to Clause
                    60.13.1 as may be permitted pursuant to this Agreement, and
                    the Settlement System Administrator or, as the case may be,
                    the Pool Auditor may only release such data to others to the
                    extent set out in this Agreement. It is hereby expressly
                    agreed that the Settlement System Administrator is permitted
                    to and shall against request and payment of a reasonable
                    charge therefor release to a Second Tier Customer, ERS First
                    Tier Customer or Non-Pooled Generator such data relating to
                    it as is referred to in Clause 60.13.1.

         60.13.3    Communications Equipment need not be dedicated exclusively
                    to the provision of data to the Settlement System
                    Administrator for the purposes of Settlement provided that
                    any other use shall not interfere at any time with the
                    operation of Settlement and subject also to the relevant
                    provisions (if any) in the Tariff.

60.14    Ancillary Services: Until the RP Date, the Ancillary Services Provider
         shall be entitled at its own cost and expense (which shall not be
         charged or recharged to Pool Members) to prepare and submit to the
         Suppliers in separate class meeting a works programme relating to the
         method of recovery from Pool Members for the supply of Reactive Energy
         by reference to the actual amount of Reactive Energy consumed by Pool
         Members as measured by MVAr Metering Equipment at each relevant Site,
         and, if approved by the Suppliers in separate class meeting, such works
         programme shall be deemed to be an approved Works Programme for all
         purposes of this Agreement and the provisions of Clauses 5.13 and 5.14
         shall apply mutatis mutandis.

60.15    Appointment of Agents by Settlement System Administrator:
         Notwithstanding the provisions of paragraph 7.2.2 of Schedule 4 the
         Settlement System Administrator may appoint one or more agents to
         perform any or all of its obligations under this Part XV and Schedule
         21.

60.16 Appointment of Second Tier Agents by Settlement System Administrator with
effect from 31st March, 1994:

         60.16.1    If, for the purposes of Clause 60.15, the Settlement System
                    Administrator appoints one or more agents for the purpose of
                    carrying out the obligations of the Settlement System
                    Administrator under or in connection with this Part XV or
                    Schedule 21 in relation to Metering Systems at or referable
                    to points of connection relating to Second Tier Customers,
                    ERS First Tier Customers or Non-Pooled Generators as the
                    Settlement System Administrator may direct, then the
                    provisions of Clauses 60.16.1 to 60.16.5 and Clause 60.17
                    shall, inter alia, apply to such arrangements.

         60.16.2    The Settlement System Administrator shall, prior to
                    appointing any Second Tier Agent pursuant to Clause 60.16.1,
                    consult with the Executive Committee as to the
                    appropriateness of the appointment of such Second Tier Agent
                    and the terms upon which, if appropriate, such agent is to
                    be appointed and shall have due regard to the wishes
                    expressed pursuant to this Clause 60.16.2 by the Executive
                    Committee.

         60.16.3    The Settlement System Administrator shall use reasonable
                    endeavours to procure that each Second Tier Agent shall
                    promptly and properly input data and other information as it
                    may receive pursuant to the terms of its appointment into
                    its Second Tier Computer Systems and shall review and
                    validate data and other information in accordance with the
                    relevant Agreed Procedures to establish the completeness
                    thereof and to identify any inconsistencies therein.

         60.16.4    The Settlement System Administrator shall use reasonable
                    endeavours to procure that each Second Tier Agent shall keep
                    secure and confidential and not disclose, during the period
                    of its appointment or following its resignation or removal,
                    information, data and documentation obtained by the Second
                    Tier Agent in such capacity so as to cause a breach by the
                    Settlement System Administrator of its obligations pursuant
                    to Clause 68 or 69 of this Agreement.

         60.16.5    The Settlement System Administrator shall use reasonable
                    endeavours to procure that upon the reasonable request of
                    the Settlement System Administrator and in any event upon
                    the removal or resignation of any Second Tier Agent, such
                    Second Tier Agent shall make over to the Settlement System
                    Administrator or its nominee all such records, manuals and
                    data and other information in the ownership or under the
                    control of the Second Tier Agent and relating to the
                    operation, and necessary for the proper functioning, of the
                    Second Tier Data Collection System.

60.17    Review:

         (a)        As soon as practicable after the third anniversary of the
                    date of this Agreement the Executive Committee, in
                    consultation with the Settlement System Administrator and
                    the Director, shall carry out a full review of the Second
                    Tier Data Collection System and, in consultation with the
                    Director, shall seek to agree with the Settlement System
                    Administrator (the agreement of the Settlement System
                    Administrator not to be unreasonably withheld or delayed)
                    the manner by which the costs of the Second Tier Data
                    Collection System should be recovered, in the Accounting
                    Periods commencing on or after 1st April, 1994.

         (b)        If, and to the extent, deemed necessary by the Executive
                    Committee in consultation with the Settlement System
                    Administrator and the Director, the Executive Committee
                    shall conduct a further review of the Second Tier Data

Collection System and, in consultation with the Director,
                    shall seek to agree with the Settlement System Administrator
                    (the agreement of the Settlement System Administrator not to
                    be unreasonably withheld or delayed), the manner by which
                    the Second Tier Data Collection System should operate, and
                    by which the costs of the same should be recovered, in the
                    Accounting Periods commencing on or after 1st April, 1996
                    such review to commence in due time to enable implementation
                    of any changes to the Second Tier Data Collection System on
                    that date.

         (c)        The Executive Committee, in consultation with the Settlement
                    System Administrator and the Director, shall carry out a
                    further full review of the Second Tier Data Collection
                    System and, in consultation with the Director, shall seek to
                    agree with the Settlement System Administrator (the
                    agreement of the Settlement System Administrator not to be
                    unreasonably withheld or delayed), the manner by which the
                    Second Tier Data Collection System should operate, and by
                    which the costs of the same should be recovered, in the
                    Accounting Periods commencing on or after 1st April, 1998
                    such review to commence in due time to enable implementation
                    of any changes to the Second Tier Data Collection System on
                    that date.

         (d)        In the event of an agreement within (a), (b) or, as the case
                    may be, (c) above, the provisions of this Agreement relating
                    to the Second Tier Data Collection System shall be amended
                    accordingly and, in the event of any failure to agree, the
                    matter shall be referred to arbitration pursuant to the
                    provisions of Clause 83. If such agreement has not been
                    reached or a determination has not been made or a settlement
                    not been reached under any such arbitration prior to:

          (i)  in the case of (a) above,  the fourth  anniversary of the date of
               this Agreement;

                    (ii) in the case of (b) above (where applicable) by 1st
April, 1996; and

                    (iii) in the case of (c) above by 1st April, 1998,

                    the Settlement System Administrator shall, between such date
                    and the date on which agreement is reached or (if
                    applicable) a determination or settlement under such
                    arbitration is made or reached, recover the costs, expenses
                    and charges of the Second Tier Data Collection System in
                    accordance with Clause 34A and paragraph 3 of Part G of the
                    Appendix to Schedule 4.

60.18Software for FMS: The  Settlement  System  Administrator  shall develop and
     implement  appropriate computer software for the purposes of collecting and
     aggregating data following the FMS Date.

60.19    Qualifying Unmetered Supplies:

         60.19.1    Notwithstanding any of the other provisions of this
                    Agreement, including Clause 60 (other than the provisions of
                    this Clause 60.19) and Schedule 21, the provisions of this
                    Clause 60.19 and any Second Tier Unmetered Supplies
                    Procedures shall, to the extent they are supplemental to or
                    conflict with any other provisions of this Agreement, govern
                    the rights and obligations of the Parties (including each
                    Operator and each Meter Operator Party) in relation to
                    Qualifying Unmetered Supplies.

         60.19.2    Neither this Clause 60.19 (save for the requirements set out
                    in this Clause 60.19.2 for the bringing into effect of this
                    Clause 60.19) nor the Second Tier Unmetered Supplies
                    Procedures nor any amendment, variation or replacement of
                    either of them may become effective:

                    (i)   unless and until the Chief Executive shall have given
                          each Public Electricity Supplier, each Second Tier
                          Supplier, the Director (who may consult with such
                          persons as he considers appropriate) and the
                          Settlement System Administrator not less than 14 days'
                          notice that this Clause 60.19 (or any amendment,
                          variation or replacement thereof) and/or the Second
                          Tier Unmetered Supplies Procedures are to become
                          effective, stating the date on which the same are
                          proposed to become effective and having attached
                          thereto a copy of any proposed Second Tier Unmetered
                          Supplies Procedures; and

                    (ii)  so long as none of the recipients of the notice
                          referred to in Clause 60.19.2(i) shall have given a
                          counternotice to the Chief Executive before the date
                          on which this Clause 60.19 and/or the Second Tier
                          Unmetered Supplies Procedures are to become effective
                          stating, on reasonable grounds, an objection to this
                          Clause 60.19 or the Second Tier Unmetered Supplies
                          Procedures becoming effective on the proposed date or
                          at all,

                    in the event that a counternotice shall have been given in
                    accordance with Clause 60.19.2(ii) the Chief Executive
                    shall, as soon as is reasonably practicable, notify the
                    persons referred to in Clause 60.19(i) of that fact.

         60.19.3    Nothing in this Clause 60.19 shall permit the adoption, in
                    the Second Tier Unmetered Supplies Procedures or otherwise,
                    of standards of accuracy of data for Qualifying Unmetered
                    Supplies different from those which apply generally under
                    this Agreement other than during the transitional period
                    expiring on 31st March, 1995.

60.19.4 Except where the context otherwise requires, in this Clause 60.19:-

                    "Qualifying Unmetered Supplies" means unmetered street
                    lighting and related supplies of a type which as at the date
                    this Clause 60.19 becomes effective are permitted to be made
                    by a Second Tier Supplier;

                    "Second Tier Unmetered Supplies Procedures" means the
                    procedures in respect of Qualifying Unmetered Supplies in
                    the form agreed between all Public Electricity Suppliers and
                    the Director (who may consult with such persons as he
                    considers appropriate) as the same may be amended, varied or
                    replaced from time to time with the agreement of such
                    persons.

         60.19.5    The Executive Committee may determine that Agreed Procedures
                    are necessary to implement this Clause 60.19 or the Second
                    Tier Unmetered Supplies Procedures and in such case nothing
                    in this Clause 60.19 or the Second Tier Unmetered Supplies
                    Procedures shall prejudice such determination or the
                    adoption or implementation of such Agreed Procedures,
                    provided that any such Agreed Procedure shall not include
                    matters which would occur on the Second Tier Customer's or
                    ERS First Tier Customer's side of the outstation.

         60.19.6    The Parties accept that modifications to the Settlement
                    System Administrator's rights and obligations under this
                    Agreement may be required under the Second Tier Unmetered
                    Supplies Procedures or otherwise before this Clause 60.19
                    can become effective.

         60.20      Obligation on Suppliers to install half-hourly metering and
                    register above 100 kW customers: Each Supplier shall use all
                    reasonable endeavours to ensure that half-hourly metering
                    and the necessary communications links are installed in
                    respect of all Embedded Non-Franchise Sites in respect of
                    which it is Supplier by no later than 1st October, 1997 and
                    that all Metering Systems associated with such Embedded
                    Non-Franchise Sites are registered in ERS by no later than
                    31st December, 1997, in accordance with the approach
                    specified by the Executive Committee Provided that there
                    shall be no obligation to install metering and
                    communications links in respect of sites relating to
                    Qualifying Unmetered Supplies.



<PAGE>




                                    PART XVI

                             POOL CIVIL EMERGENCIES

61.1     DEFINITIONS

         Definitions: In this Part XVI:-

         "Civil Emergency Pool Credit Facility" shall mean a credit facility to
         be arranged by and for the use of Suppliers upon terms and conditions
         to be set out in Schedule 11 to this Agreement;

         "PoolCivil  Emergency" shall have the meaning ascribed to it in Clause
          61.2.1;

         "Pool Civil Emergency Event" shall mean an event or series of events
which satisfies the conditions set out in Clause 61.3.2;

         "Pool Civil Emergency Period" shall mean a period initiated by the
         Executive Committee after the occurrence of a Pool Civil Emergency
         Event which shall commence, and terminate, in accordance with this
         Part;

         "PoolRules Civil  Emergency  Condition"  shall mean, in respect of any
          Schedule Day, that both:-

          (i)  UMT _ 0.1 (as determined in accordance with paragraph 32.1(a) of
               Schedule 9); and

          (ii) RAPT _ 3 * CAPT  (as  determined  in  accordance  with  paragraph
               32.1(b) of Schedule 9);

         "Pool Rules Civil Emergency Period" shall mean a period which
         commences, and terminates, and in which section 32.3 of Schedule 9 is
         in force, in accordance with this Part; and

         "Relevant Time" in relation to any event, means the time which falls
         two hours prior to the first time at which an Availability Declaration
         must be submitted pursuant to section 6.1 of Schedule 9 on the first
         Settlement Day which commences at least 24 hours after the occurrence
         of such event.

61.2     APPLICATION AND STATEMENT OF INTENT

         61.2.1     General Statement of Intended Application: It is intended
                    that this Part shall apply where there is in existence an
                    event, or series of events which does or do not generally
                    occur as part of normal market operating conditions and
                    which affect(s) the operation of the market for the
                    generation, transmission and/or supply of electricity in
                    England and Wales and which, as a result, cause(s) or is or
                    are likely to cause materially changed pool prices to arise
                    and continue (a "Pool Civil Emergency"). The following
                    conditions set out in this Part are intended to reflect the
                    circumstances in which it is envisaged that it would likely
                    be the case that such event or events shall have so
                    occurred.

         61.2.2     Interrelationship with Act: The Act and the Energy Act 1976
                    contain legislation conferring wide powers upon the
                    Secretary of State to regulate the generation, transmission
                    and/or supply of electricity in an emergency. It is intended
                    that the provisions of this Part shall coexist in
                    application with such legislation.

61.3     CONDITIONS FOR EXISTENCE OF A POOL CIVIL EMERGENCY

         61.3.1     Determination of a Pool Civil Emergency: A Pool Civil
                    Emergency shall exist upon any resolution to that effect
                    passed by the Executive Committee in accordance with the
                    provisions of this Part whereafter, subject to the following
                    provisions of this Part, a Pool Civil Emergency Period shall
                    commence.

         61.3.2     Conditions: The Executive Committee shall resolve that a
                    Pool Civil Emergency exists only if it has formed the
                    opinion that a Pool Civil Emergency Event has occurred. A
                    Pool Civil Emergency Event shall occur whenever:-

                    (a) materially changed pool prices exist or are likely to
exist and, in either case, are likely to continue; and

                    (b) such materially changed pool prices are the direct
result of any one or more of the following:-

          (i)  a major failure  affecting the operation of the NGC  Transmission
               System;

          (ii) a major operational failure of one or more Distribution  Systems;
               or

          (iii)an  inability  of  any  Generator  to  generate  or the  loss  of
               generating plant availability of any Generator; and

          (c)  the event within (i),  (ii),  or as the case may be, (iii) of (b)
               above has itself resulted from any one or more of the following:-

                          (i)      any action taken by or on behalf of Her
                                   Majesty's Government pursuant to and in
                                   accordance with the emergency provisions set
                                   out in sections 1 to 4 of the Energy Act 1976
                                   or section 96 of the Act;

                          (ii)     any act, order, regulation, direction or
                                   directive, legislation or restraint of
                                   Parliament or any governmental authority, or
                                   agent or instrument of the foregoing;

                          (iii)    any act of public enemy or terrorist, act of
                                   war or hostilities (whether declared or
                                   undeclared), threat of war or hostilities,
                                   blockade, revolution, riot, insurrection,
                                   civil commotion or unrest or demonstration;

                          (iv)     any strike, lock-out or other industrial
                                    action;

                          (v)      any act of sabotage or vandalism;

                          (vi)     lightning, earthquake, hurricane, storm,
                                   fire, flood, drought, accumulation of snow or
                                   ice, or any other extreme weather or
                                   environmental condition; or

                          (vii)    any other event provided that in such a case
                                   any resolution of the Executive Committee
                                   determining that a Pool Civil Emergency
                                   exists must be carried by a majority of not
                                   less than 75 per cent. of the Total Weighted
                                   Votes of all Committee Members entitled to
                                   vote at a meeting of the Executive Committee
                                   whether or not present.

61.4     CONDITIONS FOR EXISTENCE OF A POOL RULES CIVIL EMERGENCY PERIOD

         Pool Rules Civil Emergency Period: A Pool Rules Civil Emergency Period
         shall, subject to the following provisions of this Part, commence as
         part of a Pool Civil Emergency Period whenever (i) a Pool Civil
         Emergency Period is current and (ii) the Pool Rules Civil Emergency
         Condition is satisfied and (iii) Section 28 of Schedule 9 hereof is not
         in effect.

61.5   PROCEDURE FOR INITIATION OF A POOL CIVIL EMERGENCY PERIOD AND 
       COMMENCEMENT OF A POOL RULES CIVIL EMERGENCY PERIOD
     
         61.5.1    Right to requisition:

                    (a)   Each Pool Member, the Settlement System Administrator,
                          the Grid Operator, the Director and the Secretary of
                          State shall have the several right to have convened a
                          special meeting of the Executive Committee for it to
                          consider whether a Pool Civil Emergency exists (and
                          accordingly whether a Pool Civil Emergency Period is
                          to commence).

                    (b)   To requisition a meeting of the Executive Committee
                          the relevant Party, the Director or, as the case may
                          be, the Secretary of State shall notify in writing:-

                    (i)  in the case of a Pool Member,  its appointed  Committee
                         Member, the Pool Chairman or the Chief Executive; and

                    (ii) in the case of the Settlement System Administrator, the
                         Grid Operator,  the Director or the Secretary of State,
                         the Pool Chairman or the Chief Executive,

                          that it wishes such a meeting to be convened giving as
                          full an explanation as it is able of the event or
                          events which it believes constitute(s) the relevant
                          Pool Civil Emergency Event.

                    (c)   Upon receipt of a written requisition in accordance
                          with (b), the relevant Committee Member, the Pool
                          Chairman or, as the case may be, the Chief Executive
                          shall convene a special meeting of the Executive
                          Committee in accordance with Clause 18 to take place
                          within 48 hours after receipt of such requisition, and
                          the provisions relating to notice periods in Clause 18
                          shall be varied for the purposes of this Part
                          accordingly.

         61.5.2    Initiation by the Executive Committee:

                    Pool Civil Emergency Period: If the Executive Committee
                    shall resolve that a Pool Civil Emergency exists then,
                    subject to the right of veto in Clause 61.5.7 being
                    exercised, a Pool Civil Emergency Period shall commence upon
                    the expiry of the time limit for the exercise of such veto
                    and shall continue until terminated in accordance with
                    Clause 61.7.

         61.5.3    Pool Rules Civil Emergency Period:

                    (a)   Commencement: A Pool Rules Civil Emergency Period
                          shall, subject to the right of veto in (b) below and
                          in Clause 61.5.7 being exercised, commence in
                          accordance with Clause 61.4 at the expiry of the
                          period for the exercise of the Executive Committee's
                          veto in (b) below and shall continue until terminated
                          in accordance with the provisions of Clause 61.7.

                    (b)   Executive Committee's Right of Veto: The Executive
                          Committee shall have the right to veto the
                          commencement of a Pool Rules Civil Emergency Period by
                          the passing of a resolution to that effect carried by
                          a majority of not less than 65 per cent. of the Total
                          Weighted Votes of all Committee Members entitled to
                          vote at such meeting whether or not present, provided
                          that the Executive Committee shall only be able to
                          exercise such right of veto prior to the Relevant Time
                          relative to the time at which the Secretary receives a
                          notification given by the Settlement System
                          Administrator pursuant to Clause 61.5.4.

                    (c)   Effect of Veto: Where the Executive Committee
                          exercises its right of veto in accordance with (b)
                          above, the relevant Pool Rules Civil Emergency Period
                          shall not commence.

         61.5.4     Settlement System Administrator's Notification: The
                    Settlement System Administrator shall notify forthwith by
                    telephone (and confirm in writing as soon as is practicable
                    thereafter to) the Chief Executive, Pool Chairman,
                    Secretary, Director and Secretary of State whenever it
                    becomes aware that the Pool Rules Civil Emergency Condition
                    is satisfied.

         61.5.5     Reasons: The Executive Committee shall give reasons for the
                    passing of any resolution pursuant to this Clause or the
                    exercising of any right of veto conferred on it by this
                    Clause, to be notified to the relevant parties by the
                    Secretary in accordance with Clause 61.5.6.

         61.5.6 Notification (1): The Secretary shall notify in accordance with
               Clause 75 all Parties, the Director and the Secretary of State:-

                    (a)   of the result of any vote taken on a resolution of the
                          Executive Committee pursuant to this Part, giving
                          reasons in outline explaining such result, immediately
                          following the conclusion of the meeting at which the
                          vote was taken; such notification may be given by
                          telephone or by facsimile transmission. An outline
                          statement of reasons shall be circulated by the
                          Secretary to the same persons as soon as is reasonably
                          practicable thereafter; and

                    (b)   where there has been no exercise within the time limit
                          provided therefor of a right of veto pursuant to
                          either Clause 61.5.3 by the Executive Committee or
                          Clause 61.5.7 by the Director or the Secretary of
                          State, notify all Parties, the Director and the
                          Secretary of State immediately of the commencement of
                          a Pool Rules Civil Emergency Period.

         61.5.7    Right of Veto:

                    (a)   Right of Veto: The Director and the Secretary of State
                          shall each have a several right to veto the
                          commencement of any Pool Civil Emergency Period or, as
                          the case may be, Pool Rules Civil Emergency Period by
                          giving written notice of an exercise of such right of
                          veto addressed to the Executive Committee, the Pool
                          Chairman and the Chief Executive within the time
                          periods specified below. To be validly given, such
                          notice shall specify in sufficient detail (in the case
                          of a Pool Civil Emergency Period) the relevant
                          resolution of the Executive Committee or (in the case
                          of a Pool Rules Civil Emergency Period) the relevant
                          notification of the Settlement System Administrator,
                          in respect of which the right of veto is being
                          exercised.

                    (b)   Effect of Veto: Where the Director or the Secretary of
                          State exercises his veto in accordance with this
                          Clause 61.5.7, the relevant Pool Civil Emergency
                          Period or, as the case may be, Pool Rules Civil
                          Emergency Period shall not commence.

                   (c)  Time Limits: Any veto given by, or on behalf of, either
                         of the  Director or Secretary of State must be received
                         by or on behalf of the Executive Committee:-

                          (i)      in respect of a resolution initiating a Pool
                                   Civil Emergency Period, before the expiry of
                                   a period of 48 hours commencing upon the
                                   receipt by the Director or, as appropriate,
                                   the Secretary of State, of the notification
                                   of the result of the vote upon the relevant
                                   resolution; or

                          (ii)     in the case of a veto in respect of the
                                   commencement of a Pool Rules Civil Emergency
                                   Period, before the expiry of the time for the
                                   exercise of the Executive Committee's right
                                   of veto pursuant to Clause 61.5.3.

                          For the avoidance of doubt, such veto may be given at
any time before the commencement of such period.

                    (d)   Reasons: The Director shall upon exercising a right of
                          veto conferred by this Clause give reasons to the
                          Executive Committee supporting the exercise of that
                          right and the Parties would expect the Secretary of
                          State also to give reasons upon any exercise of his
                          right of veto conferred by this Clause.

                    (e)   Notification (2): Upon receipt by or on behalf of the
                          Executive Committee of a notice of exercise of veto
                          pursuant to this Clause, the Secretary, on behalf of
                          the Executive Committee, shall as soon as is possible
                          thereafter give notice in accordance with Clause 75 of
                          the exercise of such veto.

61.6     EFFECT OF POOL AND POOL RULES CIVIL EMERGENCY PERIODS

         61.6.1    Effect of a Pool Civil Emergency Period:

                    (a) Upon a determination that a Pool Civil Emergency exists
in accordance with Clause 61.2.1 above:-

                    (i)  Suppliers  shall be  entitled  during  the  Pool  Civil
                         Emergency  Period,  for the  purposes of payments to be
                         made by them  pursuant  to this  Agreement  during such
                         period,  to utilise  the Civil  Emergency  Pool  Credit
                         Facility; and

                    (ii) Sections  32.1 and 32.2 of the Pool Rules  shall  enter
                         into force and effect.

                    (b)   The Pool Members expressly acknowledge the fact that
                          during the currency of any Pool Civil Emergency Period
                          Suppliers shall be entitled to operate credit
                          facilities in accordance with and subject to any
                          conditions of their respective Licences (where
                          relevant).

         61.6.2     Effect of a Pool Rules Civil Emergency Period: Upon the
                    commencement of a Pool Rules Civil Emergency Period in
                    accordance with Clause 61.5.3(a), the provisions of Section
                    32.3 of Schedule 9 shall enter into full force and effect
                    and shall continue in full force and effect until such time
                    as that Pool Rules Civil Emergency Period is terminated in
                    accordance with Clause 61.7.

61.7     TERMINATION OF A POOL CIVIL EMERGENCY PERIOD

         61.7.1     Director's determination of end of Pool Civil Emergency
                    Period: A Pool Civil Emergency Period and, where applicable,
                    any concurrent Pool Rules Civil Emergency Period, shall
                    terminate upon any determination of the Director to that
                    effect.

         61.7.2     Consultation: The Director shall only determine that a Pool
                    Civil Emergency Period and, where applicable, any concurrent
                    Pool Rules Civil Emergency Period shall terminate after
                    having fully consulted and taken into consideration the
                    views of all relevant Parties and after having obtained the
                    approval of the Secretary of State.

         61.7.3     Notification (3): The Director shall notify in writing the
                    Secretary, the Pool Chairman and the Chief Executive as soon
                    as is possible of any determination made pursuant to this
                    Clause 61.7 giving reasons for any determination so made and
                    the Secretary shall immediately notify all Parties of such
                    determination upon receipt.

         61.7.4     Confirmation: The Director shall confirm to the Executive
                    Committee upon any determination pursuant to this Clause
                    61.7 that a Pool Civil Emergency Period shall terminate,
                    that he has taken full account of all relevant matters, the
                    views of such relevant Parties and has obtained the approval
                    of the Secretary of State.

         61.7.5 Termination of a Pool Rules Civil Emergency Period within a
continuing Pool Civil Emergency Period:

                    (a)   The Executive Committee may, by resolution carried by
                          a majority of not less than 65 per cent. of the Total
                          Weighted Votes of all Committee Members whether or not
                          present, terminate any current Pool Rules Civil
                          Emergency Period whenever it considers, in its
                          absolute discretion, that the continued application of
                          the modified Pool Rules as set out in Section 32.3 of
                          Schedule 9 to be, in the circumstances, no longer
                          appropriate.

                    (b)   The relevant Pool Rules Civil Emergency Period shall
                          terminate following the passing of that resolution at
                          the Relevant Time relative to the time at which that
                          resolution is passed.

                    (c)   The Secretary, on behalf of the Executive Committee,
                          shall as soon as is possible after the passing of such
                          resolution give notice to all Parties, the Director
                          and the Secretary of State in accordance with Clause
                          75 that the relevant Pool Rules Civil Emergency Period
                          is to so terminate.

                    (d)   Whenever Section 28 of Schedule 9 enters into force
                          and effect, in accordance with this Agreement, any
                          Pool Rules Civil Emergency Period then current shall
                          terminate at the time that such section so enters into
                          force and effect.

         61.7.6    Effect of Termination:

                    (a)   Pool Civil Emergency Period: Upon the termination of
                          any Pool Civil Emergency Period the Civil Emergency
                          Pool Credit Facility shall forthwith cease to be
                          utilised and, where there is a concurrent Pool Rules
                          Civil Emergency Period, the provisions of Section 32
                          of Schedule 9, shall forthwith cease to be effective.

                    (b)   Pool Rules Civil Emergency Period within a current and
                          continuing Pool Civil Emergency Period: Upon the
                          termination of any Pool Rules Civil Emergency Period
                          within a current and continuing Pool Civil Emergency
                          Period the provisions of Section 32.3 of Schedule 9
                          shall forthwith cease to be effective.

61.8     REFERENCE TO DIRECTOR

                    61.8.1 Reference to the Director: If any dispute shall arise
                         between the Executive Committee and any Pool Member:-

                    (a)   as to whether the Executive Committee ought to have
                          concluded that the conditions for the initiation of a
                          Pool Civil Emergency Period in accordance with Clause
                          61.3.2 were satisfied either as a matter of fact or
                          such that there was a Pool Civil Emergency within the
                          spirit of the statement of intent set out at Clause
                          61.2.1; or

                    (b)   as to whether the Executive Committee ought or ought
                          not to have exercised its right of veto pursuant to
                          Clause 61.5.3(b) in respect of the commencement of a
                          Pool Rules Civil Emergency Period; or

                    (c)   as to whether a Pool Rules Civil Emergency Period
                          within a current and continuing Pool Civil Emergency
                          Period ought or ought not to have been terminated by
                          the Executive Committee in accordance with Clause
                          61.7.5 above,

                    the dispute may be referred by notice of the dispute given
                    in writing by the relevant Pool Member to the Director and
                    as if such Pool Member were exercising a Dissentient Pool
                    Member's right of appeal pursuant to Clause 13.5. The
                    Director shall determine the matter within 60 days of
                    receipt of such referral. Notice of any such referral shall
                    be given to the Executive Committee at the same time that
                    the dispute is so referred.

         61.8.2    Content and Effect of Determination:

                    (a)   If the Director shall determine in accordance with
                          Clause 61.8.1 that a Pool Civil Emergency Period or
                          Pool Rules Civil Emergency Period should commence, or
                          as the case may be, resume, then:-

                          (i)      in the case of a Pool Civil Emergency Period,
                                   upon such determination having been notified
                                   to the Secretary in accordance with Clause
                                   61.8.3, a Pool Civil Emergency Period shall
                                   commence or, as the case may be, resume; and

                          (ii)     in the case of a Pool Rules Civil Emergency
                                   Period, such period shall commence at the
                                   Relevant Time relative to the time at which
                                   such determination has been notified to the
                                   Secretary in accordance with Clause 61.8.3;
                                   or

                    (b)   If the Director shall determine in accordance with
                          Clause 61.8.1 that a continuing Pool Civil Emergency
                          Period or Pool Rules Civil Emergency Period should
                          terminate, then:-

                          (i)      in the case of a Pool Civil Emergency Period,
                                   upon such determination having been notified
                                   to the Secretary in accordance with Clause
                                   61.8.3, the then current Pool Civil Emergency
                                   Period shall terminate; and

                          (ii)     in the case of a Pool Rules Civil Emergency
                                   Period, the then current such period shall
                                   terminate at the Relevant Time relative to
                                   the time at which such determination has been
                                   notified to the Secretary in accordance with
                                   Clause 61.8.3.

         61.8.3     Notification (4): The Director shall notify in writing the
                    Secretary, the Pool Chairman and the Chief Executive as soon
                    as is possible of any determination made pursuant to this
                    Clause 61.8 giving reasons for any determination so made and
                    the Secretary shall immediately notify all Parties of such
                    determination upon receipt.

61.9     MODIFICATION OF PROCEDURES

         Modification of Procedures: Neither the procedures for a poll set out
         in Clause 22 nor the provisions of Clause 13.4 shall apply to any
         resolution of the Executive Committee referred to in this Part XVI, and
         there shall be no right of referral of the matter the subject of such
         resolution to the Pool Members in general meeting.



<PAGE>


                                    PART XVII

                                  TRADING SITE

62.      TRADING SITE

Trading Site: The provisions of Schedule 17 shall have effect.



<PAGE>


                                   PART XVIII

              THE POOL FUNDS ADMINISTRATOR, BILLING AND SETTLEMENT

63.      THE POOL FUNDS ADMINISTRATOR

63.1 Responsibilities:  The Pool Funds  Administrator  shall have the  following
     duties, responsibilities and obligations, namely:-

         63.1.1     to comply with all the obligations set out in this Agreement
                    and the Agreed Procedures in respect of the establishment,
                    maintenance and operation of the Funds Transfer System and
                    to carry out its obligations under the Funds Transfer
                    Agreement;

         63.1.2     to keep under review and to make recommendations to the
                    Executive Committee on its own initiative or whenever
                    requested by the Executive Committee concerning:-

                    (a)  any change to the Funds Transfer System (or any part or
                         aspect thereof);

                    (b)   the appointment of a new Pool Banker;

                    (c)   any change to Schedule 11 or 15; and

                    (d)   any change to the Funds Transfer Agreement,

                    which the Pool Funds Administrator may consider desirable.
                    In making such recommendations, the Pool Funds Administrator
                    shall have regard to, and shall provide details of, the cost
                    of implementing such changes (which cost would be charged or
                    recharged to Pool Members) and shall recommend whether, in
                    light of those costs, certain parties or categories of party
                    to the Agreement should be exempted from such changes or
                    whether special provisions for such parties or categories of
                    party should be adopted;

         63.1.3           (a) to maintain such records, data and other
                          information as the Pool Auditor may, after
                          consultation with the Executive Committee, from time
                          to time by notice in writing and in reasonable detail
                          to the Pool Funds Administrator, require for the
                          purposes of Part IX, or as may otherwise be reasonably
                          necessary to enable the Pool Funds Administrator to
                          comply promptly and fully with all its obligations
                          under this Agreement, the Agreed Procedures or the
                          Funds Transfer Agreement, in either such case in such
                          form as the Pool Auditor may from time to time by
                          notice to the Pool Funds Administrator require or (in
                          the absence of such notification) in such form as a
                          reasonably prudent operator of the Funds Transfer
                          System would adopt; and

                    (b)   to maintain such records, data and other information
                          as H.M. Customs and Excise may from time to time
                          require of the Pool Funds Administrator;

         63.1.4     to retain in machine readable form or hard copy form for a
                    period of not less than eight years (or such longer period
                    as any applicable law may require) and in any event in hard
                    copy form (which for these purposes shall include
                    microfiche) for a period of not less than one year copies of
                    the records, data and other information received and
                    processed by the Pool Funds Administrator in connection with
                    its performance of the Services including:-

                    (a)   (to the extent relevant for the performance of the
                          Services) Settlement Runs and Settlement Re-runs;

                    (b)   Advice Notes and Confirmation Notices;

                    (c)   bank statements in respect of the Pool Accounts;

                    (d)   Pool Ledger Accounts;

                    (e)   Payments Calendars;

                    (f)   a record of all Default Interest Rates and Reserve
                          Interest Rates calculated from time to time (including
                          the period to which each interest rate relates);

                    (g)  details of Security  Cover  supplied and to be supplied
                         by each Providing Member (as defined in Schedule 11) or
                         the Grid Operator, as the case may be; and

                    (h)   correspondence between the Pool Funds Administrator,
                          on the one hand, and the Executive Committee, the Pool
                          Chairman, the Chief Executive, any Pool Member, the
                          Pool Banker, any Collection Bank, the Settlement
                          System Administrator, the Ancillary Services Provider,
                          the Director, the Pool Auditor, the Grid Operator and
                          any other relevant bank or institution, on the other
                          hand;

         63.1.5     to provide to the Executive Committee and the Chief
                    Executive upon request records, data and other information
                    concerning the Funds Transfer System (and any part thereof)
                    (unless disclosure would breach any duty of confidentiality
                    imposed on the Pool Funds Administrator) and which the Pool
                    Funds Administrator is required to retain under paragraph
                    63.1.3 or 63.1.4 (and each of the Parties agrees to the
                    release of all such records, data and other information in
                    the circumstances and manner described in this paragraph
                    63.1.5);

         63.1.6     to provide to the Pool Auditor upon request records, data
                    and other information concerning the Funds Transfer System
                    (and any part thereof) and which the Pool Funds
                    Administrator is required to maintain and retain under
                    paragraph 63.1.3 or 63.1.4 (and each of the Parties agrees
                    to the release of all such records, data and other
                    information in the circumstances and manner described in
                    this paragraph 63.1.6);

     63.1.7 subject to the provisions of Part XX, to provide a certified copy of
          such records, data and other information concerning the Funds Transfer
          System (and any part  thereof)  and amounts  payable by or to any Pool
          Member,  the Ancillary  Services  Provider or the Grid Operator as the
          relevant Pool Member,  the Ancillary Services Provider or (as the case
          may be) the Grid  Operator may  reasonably  request for the purpose of
          establishing the amounts which are owed to or by such Pool Member, the
          Ancillary  Services  Provider or the Grid Operator in accordance  with
          this Agreement,  and in any event such information as any Pool Member,
          the Ancillary  Services Provider or the Grid Operator may request from
          the Pool Funds Administrator in order to establish or prove a claim to
          any  amounts  due or claimed to be due.  The Pool Funds  Administrator
          shall  forthwith  upon such  request  provide  such  information  upon
          delivery  (if  so  required  by the  Pool  Funds  Administrator)  of a
          certificate  from the  counsel  of such  Pool  Member,  the  Ancillary
          Services  Provider  or the  Grid  Operator  certifying  that,  in such
          counsel's opinion, such information is required for such purpose;

         63.1.8 to issue Advice Notes and Confirmation Notices within the times
and containing the details required by Schedule 11;

         63.1.9     upon request, promptly to supply on its own behalf and on
                    behalf of Pool Members, the Ancillary Services Provider and
                    the Grid Operator (with a copy to the Pool Member concerned,
                    the Ancillary Services Provider and the Grid Operator) any
                    information (including copies of documents) to H.M. Customs
                    and Excise, and to co-operate in any investigation by H.M.
                    Customs and Excise or H.M. Inspector of Taxes relating to
                    the Funds Transfer System (or any part or aspect thereof);

         63.1.10    in respect of each calendar quarter, to issue to all Pool
                    Members, the Executive Committee, the Chief Executive, the
                    Settlement System Administrator, the Ancillary Services
                    Provider and the Grid Operator no later than the fifth
                    Business Day after each calendar quarter a statement
                    enabling the identification of who may constitute Majority
                    Default Calling Creditors during that calendar quarter (and
                    the Parties hereby agree to such disclosure being made);

         63.1.11    except in respect of moneys received on account of the PFA
                    Operating Costs, the PFA Handling Charge, the Annual Fee or
                    Bank Charges in accordance with the accounting procedure set
                    out in Schedule 15 or the consideration received pursuant to
                    sub-section 5.1 or 5.2 of that Schedule, to pay all moneys
                    received by it from a Pool Member, the Ancillary Services
                    Provider or the Grid Operator in accordance with Schedule 11
                    into a Pool Account to be held in trust in accordance with
                    the provisions of Schedule 11; and

     63.1.12 to  comply  with all its other  obligations  under  this  Agreement
          (including Schedules 11 and 15) and the Agreed Procedures,

         and expressions defined in Schedules 11 and 15 shall have the same
respective meanings when used in this Clause 63.1.

     63.2 Standard of care:  In the exercise of its duties and  responsibilities
          under  this  Agreement  and  the  Agreed  Procedures  the  Pool  Funds
          Administrator shall exercise that degree of care, diligence, skill and
          judgment  which would  ordinarily be expected of a reasonably  prudent
          operator  of  the  Funds  Transfer  System  taking  into  account  the
          circumstances  actually  known to the Pool  Funds  Administrator,  its
          officers and  employees  at the  relevant  time or which ought to have
          been  known to it or them had it or they made such  enquiries  as were
          reasonable in the circumstances.  In particular, but without prejudice
          to the generality of the  foregoing,  in the absence of directions and
          instructions  given  to it  by  the  Executive  Committee  under  this
          Agreement and having due regard to the resources  available to it, the
          Pool Funds Administrator shall at all times conduct itself in a manner
          calculated  to  achieve  the  principal  objects  and  purpose of this
          Agreement set out in Clauses 4.1.2 and 4.1.3.

63.3     UK value added tax indemnity:

     63.3.1  Indemnity  (1):  Without  prejudice  to  paragraph  63.3.2 all Pool
          Members and the Grid Operator  shall  jointly and severally  indemnify
          and keep  indemnified  the Pool  Funds  Administrator,  its  officers,
          employees  and agents (but so that,  as between  Pool  Members and the
          Grid Operator,  their  liability shall be apportioned so that the Grid
          Operator is liable for 5 per cent. of the  indemnified  amount and the
          Pool Members are liable for the balance of such indemnified  amount in
          proportion  to their  respective  Contributory  Shares  at the time of
          receipt of the request  for  indemnification  calculated  on the basis
          that  the  points   allocated  to  the  Pool  Member  in  default  are
          disregarded)  against any liability which the Pool Funds Administrator
          may  incur as a result of the  failure  of any Pool  Member,  the Grid
          Operator  or the  Ancillary  Services  Provider  (as the  case may be)
          properly to account to H.M. Customs & Excise for all amounts of United
          Kingdom  Value Added Tax payable or receivable by it in respect of any
          supplies of electricity, Ancillary Services or Transport Uplift.

         63.3.2     Indemnity (2): If any Pool Member, the Ancillary Services
                    Provider or the Grid Operator shall fail properly to account
                    for any amount of United Kingdom Value Added Tax payable or
                    receivable by it, that person shall indemnify and keep
                    indemnified each non-defaulting Pool Member and (if it is
                    not in default) the Grid Operator (on an after tax basis,
                    but taking account of any tax relief available to the
                    relevant Pool Member or the Grid Operator, as the case may
                    be) against any liability which such non-defaulting Pool
                    Member and (if it is not in default) the Grid Operator shall
                    incur pursuant to paragraph 63.3.1.

63.4     Schedule 15:

         63.4.1     Subject to the rights of each of the Parties under this
                    Agreement, all Parties hereby agree promptly to execute and
                    deliver all agreements and other documentation necessary to
                    give effect to any act, matter or thing done by the
                    Executive Committee in accordance with Schedule 15
                    (including the removal of the incumbent Pool Funds
                    Administrator and the appointment of a successor in
                    accordance with the terms thereof).

         63.4.2     Schedule 15 provides that certain matters may be referred by
                    the Executive Committee to arbitration pursuant to Clause
                    83. In making any such reference or in alleging that any
                    such reference is being made pursuant to Clause 83 the
                    Executive Committee shall act (and is hereby irrevocably
                    authorised by each of the Pool Members to act) as the sole
                    and exclusive representative of all the Pool Members and the
                    Pool Funds Administrator hereby agrees that the Executive
                    Committee shall have the authority so to act.

64.      PROCEDURES MANUAL

64.1     Preparation: Within 28 days after the Effective Date (or such longer
         period as the Executive Committee may approve) the Pool Funds
         Administrator shall prepare, or cause to be prepared, a Procedures
         Manual which it shall submit to the Executive Committee for its review.
         The Executive Committee shall give its comments on the Procedures
         Manual to the Pool Funds Administrator within 28 days after receipt
         thereof and the Pool Funds Administrator shall revise, or cause to be
         revised, the Procedures Manual to the satisfaction of the Executive
         Committee within 21 days after receipt of such comments (or such longer
         period as the Executive Committee may approve). Promptly thereafter the
         Pool Funds Administrator shall provide the Executive Committee with
         sufficient copies of the revised Procedures Manual for distribution by
         the Executive Committee to all Parties, the Pool Auditor, the Pool
         Banker and the Director.

64.2     Amendments: Where from time to time any amendments to the Procedures
         Manual are necessary to reflect changes in the systems and/or
         procedures associated with the Funds Transfer System, the procedure set
         out in Clause 64.1 shall apply mutatis mutandis.

     64.3 Costs:  The costs of producing,  revising and amending the  Procedures
          Manual shall be borne by the Pool Funds Administrator and recovered by
          it in  accordance  with the  provisions  of Schedule 11 as part of its
          charges.

65.      BILLING AND SETTLEMENT

         The provisions of Schedule 11 shall have effect.



<PAGE>


                                    PART XIX

                          DEFAULT, TERM AND TERMINATION

66.      DEFAULT

     66.1 Default  (1):  At any time after the  occurrence  of any of the events
          referred  to in Clause  66.3.1,  66.3.2 or 66.3.3  and so long as such
          event  continues  unremedied or unwaived by Majority  Default  Calling
          Creditors:-

         66.1.1     Majority Default Calling Creditors may, upon reaching a bona
                    fide conclusion that the reason for the failure by the
                    Defaulting Pool Member under Clause 66.3.1, 66.3.2 or 66.3.3
                    is other than administrative or banking error (having taken
                    into account the representations, if any, of the Defaulting
                    Pool Member made within 24 hours after request therefor is
                    made to the Defaulting Pool Member on behalf of the Majority
                    Default Calling Creditors, which request Majority Default
                    Calling Creditors shall be obliged to make), by notice to
                    the Defaulting Pool Member (copied to the Executive
                    Committee and the Director) declare such event an Event of
                    Default;

         66.1.2     at the same time as Majority Default Calling Creditors
                    declare such an Event of Default or at any time thereafter,
                    Majority Default Calling Creditors may by notice to the
                    Executive Committee (copied to the Defaulting Pool Member
                    and the Director) require the Executive Committee to suspend
                    (which the Executive Committee shall forthwith do) all
                    voting rights of the Defaulting Pool Member under this
                    Agreement for a specified period (being not more than 90
                    days) and, upon the Executive Committee giving notice to
                    such effect to the Defaulting Pool Member (copied to the
                    Director), such voting rights (but not any other rights or
                    any liabilities or obligations of the Defaulting Pool
                    Member) shall be suspended for such period; and

         66.1.3    where:-

               (a)  the Defaulting Pool Member is a Public Electricity Supplier,
                    no  earlier  than  28 days  after  the  date  of the  notice
                    referred to in Clause 66.1.1; and

               (b)  in any  other  case,  at the same time as  Majority  Default
                    Calling Creditors declare such an Event of Default or at any
                    time thereafter,

                    Majority Default Calling Creditors may by notice to the
                    Defaulting Pool Member (copied to the Executive Committee,
                    the Settlement System Administrator, the Grid Operator, the
                    Pool Funds Administrator, the Ancillary Services Provider
                    and the Director) require the Defaulting Pool Member to
                    cease to be a Party with effect from the date of its
                    De-energisation and until such date all voting rights of the
                    Defaulting Pool Member under this Agreement (but not any
                    other rights or any liabilities or obligations of the
                    Defaulting Pool Member) shall be automatically suspended.

                    For the avoidance of doubt, Majority Default Calling
                    Creditors shall be at liberty to give notice under Clause
                    66.1.2 and, upon expiry of the specified period referred to
                    therein and subject as provided in the foregoing provisions
                    of this Clause 66.1, to give notice under Clause 66.1.3.

66.2     Default (2): At any time after the occurrence of any of the events
         referred to in Clause 66.3 (other than (a) any of the events referred
         to in Clause 66.3.1, 66.3.2 and 66.3.3 and (b) in the case where the
         Defaulting Pool Member is unable to pay its debts as referred to in
         Clause 66.3.6(a), unless any of the other events referred to in Clause
         66.3 has occurred and is continuing) and so long as such event
         continues unremedied or unwaived by the Pool Members in general meeting
         the Executive Committee may (and shall if so directed by the Pool
         Members in general meeting):-

         66.2.1     by notice to the Defaulting Pool Member (copied to the
                    Director) declare such event an Event of Default and suspend
                    all voting rights of the Defaulting Pool Member under this
                    Agreement for a specified period (being not more than 90
                    days) whereupon such voting rights (but not any other rights
                    or any liabilities or obligations of the Defaulting Pool
                    Member) shall be suspended for such period; and

         66.2.2     upon the expiry of such period by notice to the Defaulting
                    Pool Member (copied to the Settlement System Administrator,
                    the Grid Operator, the Pool Funds Administrator, the
                    Ancillary Services Provider and the Director) require the
                    Defaulting Pool Member to cease to be a party to this
                    Agreement with effect from the date of its De-energisation
                    and until such date all voting rights of the Defaulting Pool
                    Member under this Agreement (but not any other rights or any
                    liabilities or obligations of the Defaulting Pool Member)
                    shall be automatically suspended.

     66.3 Events of Default:  The events referred to in the foregoing provisions
          of this Clause 66 are:-

         66.3.1     the Pool Member in question (the "Defaulting Pool Member")
                    shall fail to provide or maintain or renew in accordance
                    with Schedule 11 the requisite amount of Security Cover
                    determined pursuant to that Schedule; or

         66.3.2     the Defaulting Pool Member shall fail to pay in the manner
                    provided in this Agreement any sum payable by it to any Pool
                    Creditor within three Business Days after its due date; or

         66.3.3     the Defaulting Pool Member shall fail to pay in the manner
                    provided in this Agreement any sum payable by it hereunder
                    to the Settlement System Administrator or the Pool Funds
                    Administrator within 28 days after the Settlement System
                    Administrator or (as the case may be) the Pool Funds
                    Administrator has given notice to it (copied to the
                    Executive Committee and the Director) that payment has not
                    been received and requiring such default to be remedied; or

         66.3.4     the Defaulting Pool Member shall fail to pay in the manner
                    provided in this Agreement any sum payable by it hereunder
                    to the Executive Committee within 28 days after the
                    Executive Committee has given notice to it (copied to the
                    Director) that payment has not been received and requiring
                    such default to be remedied; or

         66.3.5     the Defaulting Pool Member shall fail in any material
                    respect to perform or comply with any of its other
                    obligations under this Agreement and such default (if it is
                    capable of remedy) is not remedied within a reasonable
                    period of time (not exceeding 90 days) after the Executive
                    Committee has given notice to the Defaulting Pool Member
                    (copied to the Director) of the occurrence thereof and
                    requiring the same to be remedied; or

         66.3.6    the Defaulting Pool Member:-

               (a)  is unable to pay its debts  (within  the  meaning of section
                    123(1) or (2) of the  Insolvency  Act 1986,  but  subject as
                    hereinafter  provided  in  this  Clause  66.3.6)  or if  any
                    voluntary  agreement  is  proposed  in  relation to it under
                    section  1  of  that  Act  or  enters  into  any  scheme  of
                    arrangement (other than for the purpose of reconstruction or
                    amalgamation  upon  terms  and  within  such  period  as may
                    previously  have been  approved in writing by the  Executive
                    Committee);

               (b)  has  a  receiver   (which   expression   shall   include  an
                    administrative  receiver within the meaning of section 29 of
                    the  Insolvency  Act 1986) of the whole or any material part
                    of its assets or undertaking appointed;

               (c)  has  an   administration   order  under  section  8  of  the
                    Insolvency Act 1986 made in relation to it;

               (d)  passes any resolution for winding-up other than a resolution
                    previously  approved in writing by the Executive  Committee;
                    or

               (e)  becomes   subject   to  an  order  by  the  High  Court  for
                    winding-up.

                    For the purposes of paragraph (a) above section 123(1)(a) of
                    the Insolvency Act 1986 shall have effect as if for
                    "(pound)750" there was substituted (pound)10,000 and,
                    further, the Defaulting Pool Member shall not be deemed to
                    be unable to pay its debts for the purposes of paragraph (a)
                    above if any such demand as is mentioned in the said section
                    is being contested in good faith by the Defaulting Pool
                    Member with recourse to all appropriate measures and
                    procedures; or

         66.3.7     the Licence (if any) granted to the Defaulting Pool Member
                    is determined or revoked or otherwise ceases to be in force
                    for any reason whatsoever,

         in any such case for whatever reason and whether or not within the
control of the Defaulting Pool Member.

66.4     De-energisation:

         66.4.1     If the Majority Default Calling Creditors shall give notice
                    to a Defaulting Pool Member under Clause 66.1.3 or the
                    Executive Committee shall give notice to a Defaulting Pool
                    Member under Clause 66.2.2 the Defaulting Pool Member shall
                    forthwith, and in compliance with the instructions of the
                    Grid Operator or (in the case of any connection to a User
                    System) the User whose System it is (the "Relevant User"),
                    take all such action as may be necessary to give effect to
                    the relevant De-energisation.

         66.4.2     If the Defaulting Pool Member shall fail to take such action
                    as is referred to in Clause 66.4.1 within 48 hours after the
                    date of any such notice referred to therein, the Grid
                    Operator and/or, as the case may be, the Relevant User
                    undertakes to each of the other Parties and the Executive
                    Committee to use reasonable endeavours to effect or (as the
                    case may be) give instructions to effect such
                    De-energisation as quickly as practicable having regard to
                    all the circumstances affecting such De-energisation
                    (including any operational difficulties and relevant Licence
                    duties).

         66.4.3     Each Pool Member hereby irrevocably and unconditionally
                    consents to its De-energisation by the Grid Operator and/or,
                    as the case may be, the Relevant User in the circumstances
                    set out in Clause 66.4.2.

66.5     Sharing of risk: Where an Event of Default is declared under Clause
         66.1.1 or 66.2.1 in respect of a Defaulting Pool Member which is a
         Public Electricity Supplier, then for the period beginning on the date
         of the notice declaring such Event of Default until the earlier of:-

         66.5.1    the date falling 28 days thereafter; and

         66.5.2     the date on which the Event of Default has been remedied or
                    waived by Majority Default Calling Creditors or (as the case
                    may be) the Pool Members in general meeting,

         (but not further or otherwise) each Pool Member (other than the
         Defaulting Pool Member) shall be severally liable for its Contributory
         Share (calculated on the basis that the Points allocated to the
         Defaulting Pool Member are disregarded) of all sums (including United
         Kingdom Value Added Tax) which such Defaulting Pool Member is required
         under this Agreement to pay in respect of electricity taken by the
         Defaulting Pool Member and Ancillary Services during each complete
         Settlement Day falling within such period and which are not paid on the
         due date therefor by the Defaulting Pool Member. The Defaulting Pool
         Member shall indemnify and keep indemnified each Pool Member on demand
         against all sums properly paid by such Pool Member pursuant to this
         Clause 66.5 together with interest thereon from the date of payment by
         such Pool Member to the date of its reimbursement (as well after as
         before judgment) at the Default Interest Rate.

66.6     Indemnity on De-energisation: Where under Clause 66.4 the Grid Operator
         and/or the Relevant User is required to effect or (as the case may be)
         give instructions to effect a De-energisation the Defaulting Pool
         Member, failing which, each Pool Member (but, in the case of each Pool
         Member, only in respect of its Contributory Share at the time of
         receipt of the request for indemnification, calculated on the basis
         that the Points allocated to the Defaulting Pool Member are
         disregarded) shall indemnify and keep indemnified the Grid Operator
         and/or the Relevant User (as the case may be) on demand against any and
         all liability, loss or damage which it may suffer or incur by reason of
         effecting or giving instructions to effect such De-energisation.

66.7     Accrued rights and liabilities:

         66.7.1     The suspension of a person as a Pool Member and the
                    cessation of a person as a Pool Member and/or a Party for
                    whatever reason shall not prejudice its accrued rights and
                    liabilities under this Agreement as at the date of its
                    suspension or (as the case may be) cessation or its rights
                    and liabilities under this Agreement which may accrue in
                    relation to the period during which it was not so suspended
                    or (as the case may be) it was a Party or any of its
                    obligations under this Agreement which are expressed to
                    continue notwithstanding such suspension or cessation.

         66.7.2     Without prejudice to the generality of Clause 66.7.1, a
                    Defaulting Pool Member shall be liable for all sums
                    (including United Kingdom Value Added Tax) which it is
                    required under this Agreement to pay in respect of
                    electricity taken by it and Ancillary Services pending its
                    De-energisation pursuant to Clause 66.4.

67.      TERM AND TERMINATION

67.1 Term: This Agreement shall have no fixed duration.

67.2 Suspension of Pool Member's  voting rights:  A Pool Member's  voting rights
     shall be suspended only in the circumstances and to the extent specified in
     Clauses 66.1.2 and 66.2.1.

67.3     Termination as a Party: A Pool Member shall cease to be a Party only:-

67.3.1 in the  circumstances  and to the extent specified in Clauses 8.7 to 8.10
     (inclusive);

67.3.2 in the  circumstances  and to the extent  specified in Clauses 66.1.3 and
     66.2.2; or

         67.3.3     if, by unanimous resolution of all Committee Members, the
                    Executive Committee shall so reasonably determine and the
                    prior written consent of the Director shall have been
                    obtained.

67.4     Termination of the Agreement:

         67.4.1     This Agreement may be terminated if a resolution of Pool
                    Members in general meeting is unanimously carried by those
                    Pool Members present in person or by proxy at the relevant
                    general meeting and the prior written consent of the
                    Director has been obtained.

         67.4.2     The termination shall take effect from whichever is the
                    later in time of the date of the resolution referred to in
                    Clause 67.4.1 and the consent in writing of the Director
                    referred to in that Clause.

67.5     Clause exhaustive: The Pool Members agree that the foregoing provisions
         of this Clause 67, when read with the Clauses referred to herein and
         Clause 8.11, are exhaustive of the rights of suspension of a Pool
         Member's voting rights, of termination of Pool Membership, of cessation
         as a Party and of termination of this Agreement.





<PAGE>


                                     PART XX

                                 CONFIDENTIALITY

68.      DEFINITIONS AND INTERPRETATION

68.1 Definitions: In this Part XX, except where the context otherwise requires:-

         "Authorised Recipient" means, in relation to any Protected Information,
         any Business Person who, before the Protected Information had been
         divulged to him by NGC or any subsidiary of NGC, had been informed of
         the nature and effect of Clause 69 and who requires access to such
         Protected Information for the proper performance of his duties as a
         Business Person in the course of Permitted Activities;

         "Business Person" means any person who is a Main Business Person or a
Corporate Functions Person, and "Business Personnel" shall be construed
accordingly;

         "Confidential Information" means all data and other information
         supplied to the Obligor or any nominee of the Obligor appointed
         pursuant to paragraph 10 of Appendix 4 of Schedule 9 by another Party
         under the provisions of this Agreement, and shall include copies of the
         load modules referred to in Service Line 11 (Listings and Load
         Modules);

         "Corporate Functions Person" means any person who:-

         (a)       is a director of NGC; or

         (b)        is an employee of NGC or any of its subsidiaries carrying
                    out any administrative, finance or other corporate services
                    of any kind which in part relate to the Main Business; or

         (c) is engaged as an agent of or an adviser to or performs work in
relation to or services for the Main Business;

 "Generation Business" has the same meaning as in the NGC Transmission Licence;

         "Main Business" means any business of NGC or any of its subsidiaries as
         at the Effective Date or which it is required to carry on under the NGC
         Transmission Licence, other than the Generation Business;

         "Main Business Person" means any employee of NGC or any director or
         employee of its subsidiaries who is engaged solely in the Main
         Business, and "Main Business Personnel" shall be construed accordingly;

         "Obligor" has the meaning given to that term in Clause 70.1;

         "Permitted Activities" means activities carried on for the purposes of
          the Main Business; and

         "Protected Information" means any information relating to the affairs
         of a Party which is furnished to Business Personnel pursuant to this
         Agreement unless, prior to such information being furnished, such Party
         has informed the recipient thereof by notice in writing or by
         endorsement on such information that the said information is not to be
         regarded as Protected Information.

68.2     Interpretation: For the avoidance of doubt, data and other information
         which any Party is permitted or obliged to divulge or publish to any
         other Party pursuant to this Agreement shall not necessarily be
         regarded as being in the public domain by reason of being so divulged
         or published.

69.      CONFIDENTIALITY FOR NGC AND ITS SUBSIDIARIES

69.1     Protection of Protected Information: NGC and its subsidiaries in each
        of their capacities in this Agreement shall secure that Protected
         Information is
         not:-

         69.1.1 divulged by Business Personnel to any person unless that person
is an Authorised Recipient;

         69.1.2 used by Business Personnel for the purposes of obtaining for NGC
or any of its subsidiaries or for any other person:-

                    (a)   any electricity licence; or

                    (b)   any right to purchase or otherwise acquire, or to
                          distribute, electricity (including rights under any
                          electricity purchase contract, as defined in the NGC
                          Transmission Licence); or

                    (c) any contract or arrangement for the supply of
electricity to Customers or Suppliers; or

                    (d) any contract for the use of any electrical lines or
electrical plant belonging to or under the control of a Supplier; or

                    (e) control of any body corporate which, whether directly or
indirectly, has the benefit of any such licence, contract or arrangement; and

         69.1.3 used by Business Personnel for the purpose of carrying on any
activities other than Permitted Activities,

         except with the prior consent in writing of the Party to whose affairs
such Protected Information relates.

69.2     Exceptions: Nothing in this Clause 69 shall apply:-

         69.2.1 to any Protected Information which, before it is furnished to
Business Personnel, is in the public domain; or

69.2.2 to any  Protected  Information  which,  after it is furnished to Business
     Personnel:-

          (a)  is acquired by NGC or any subsidiary of NGC in  circumstances  in
               which this Clause 69 does not apply; or

          (b)  is acquired by NGC or any subsidiary of NGC in  circumstances  in
               which  this  Clause  69 does  apply and  thereafter  ceases to be
               subject to the restrictions imposed by this Clause 69; or

          (c)  enters the public domain,

          and  in any such  case  otherwise  than as a result of (i) a breach by
               NGC or any subsidiary of NGC of its obligations in this Clause 69
               or (ii) a breach  by the  person  who  disclosed  that  Protected
               Information of that person's  confidentiality  obligation and NGC
               or any of its subsidiaries is aware of such breach; or

         69.2.3     to the disclosure of any Protected Information to any person
                    if NGC or any subsidiary of NGC is required or expressly
                    permitted to make such disclosure to such person:-

          (a)  in  compliance  with the duties of NGC or any  subsidiary  of NGC
               under the Act or any other requirement of a Competent  Authority;
               or

          (b)  in compliance with the conditions of the NGC Transmission Licence
               or any document referred to in the NGC Transmission  Licence with
               which NGC or any  subsidiary  of NGC is required by virtue of the
               Act or the NGC Transmission Licence to comply; or

          (c)  in compliance with any other requirement of law; or

          (d)  in response to a requirement  of any stock exchange or regulatory
               authority or the Panel on Take-overs and Mergers; or

          (e)  pursuant to the arbitration rules for the Electricity Arbitration
               Association or pursuant to any judicial or other arbitral process
               or  tribunal  having  jurisdiction  in  relation  to  NGC  or its
               subsidiaries; or

         69.2.4     to any Protected Information to the extent that NGC or any
                    of its subsidiaries is expressly permitted or required to
                    disclose that information under the terms of any agreement
                    or arrangement (including this Agreement, the Grid Code, the
                    Distribution Codes and the Fuel Security Code) with the
                    Party to whose affairs such Protected Information relates;
                    or

         69.2.5     to any Protected Information but only to the extent that it
                    has been properly provided to NGC or any subsidiary of NGC
                    by the Settlement System Administrator pursuant to any
                    provision of the Pool Rules.

          69.3 Use of information by NGC: NGC and each of its  subsidiaries  may
               use all and any information or data supplied to or acquired by it
               from or in relation to the other Parties in performing  Permitted
               Activities including, for the following purposes:-

         69.3.1    the operation and planning of the NGC Transmission System;

         69.3.2 the calculation of charges and preparation of offers of terms
for connection to or use of the NGC Transmission System;

          69.3.3 the operation and planning of the Ancillary  Services  Business
               and the calculation of charges therefor;

         69.3.4    the operation of the Settlements Business;

         69.3.5 the provision of information under the British Grid Systems
Agreement and the EdF Documents,

         and may pass the same to subsidiaries of NGC which carry out such
         activities and the Parties agree to provide all information to NGC and
         its subsidiaries for such purposes.

69.4     Restrictions on Business Personnel: NGC undertakes to each of the other
         Parties that, having regard to the activities in which any Business
         Person is engaged and the nature and effective life of the Protected
         Information divulged to him by virtue of such activities, neither NGC
         nor any of its subsidiaries shall unreasonably continue (taking into
         account any industrial relations concerns reasonably held by it) to
         divulge Protected Information or permit Protected Information to be
         divulged by any subsidiary of NGC to any Business Person:-

         69.4.1     who has notified NGC or the relevant subsidiary of his
                    intention to become engaged as an employee or agent of any
                    other person (other than of NGC or any subsidiary thereof)
                    who is:-

                    (a)  authorised   by  licence  or   exemption  to  generate,
                         transmit or supply electricity; or

                    (b) an electricity broker or who is known to be engaged in
the writing of electricity purchase contracts (as hereinbefore defined); or

                    (c) known to be retained as a consultant to any such person
who is referred to in paragraph (a) or (b) above; or

         69.4.2    who is to be transferred to the Generation Business,

         save where NGC or such subsidiary could not, in all the circumstances,
         reasonably be expected to refrain from divulging to such Business
         Person Protected Information which is required for the proper
         performance of his duties.

69.5     Identification of Protected Information: Without prejudice to the other
         provisions of this Clause 69, NGC shall procure that any additional
         copies made of the Protected Information, whether in hard copy or
         computerised form, will clearly identify the Protected Information as
         protected.

69.6 Corporate Functions Person: NGC undertakes to use all reasonable endeavours
     to procure that no employee is a Corporate Functions Person unless the same
     is necessary for the proper performance of his duties.

69.7     Charge restriction condition variable: Without prejudice to Clause
         69.3, NGC and each of its subsidiaries may use and pass to each other
         all and any Period Metered Demand data supplied to or acquired by it
         and all and any information and data supplied to it pursuant to Section
         OC6 of the Grid Code for the purposes of Demand Control (as defined in
         the Grid Code), but in each case only for the purposes of its
         estimation and calculation from time to time of the variable "system
         maximum ACS demand" (as defined in Condition 4 of the NGC Transmission
         Licence).

69.8     Ancillary Services: NGC shall secure that Protected Information which
         is subject to the provisions of Clause 69.1 and which relates to the
         cost of Reactive Power provided by each individual Generator is not
         divulged to any Business Person engaged in the provision of static
         compensation for use by the Grid Operator.

69.9     Metering data - Distribution System: Any information regarding, or data
         acquired by the Settlement System Administrator or its agent from,
         Metering Equipment at Sites which are a point of connection to a
         Distribution System shall and may be passed by the Settlement System
         Administrator or his agent to the operator of the relevant Distribution
         System. The said operator of the relevant Distribution System may use
         the same only for the purposes of the operation of such Distribution
         System and the calculation of charges for use of and connection to such
         Distribution System.

69.10    Metering data - Qualifying Arrangements: The Settlement System
         Administrator and the Grid Operator shall and may pass any relevant
         information and data relating to the Genset Metered Generation
         (including, for the avoidance of doubt, all relevant Metered Data, as
         defined in paragraph 3.1.2 of Schedule 9) of any of the Generating
         Units which are the subject of qualifying arrangements (as defined in
         section 33 of the Act) to such person as may be specified from time to
         time pursuant to such qualifying arrangements.

70.      CONFIDENTIALITY OTHER THAN FOR NGC AND ITS SUBSIDIARIES

70.1     General obligation: Each Party (other than NGC and its subsidiaries)
         (the "Obligor") hereby undertakes with each other Party (including NGC
         and its subsidiaries) that it shall preserve the confidentiality of,
         and not directly or indirectly reveal, report, publish, disclose or
         transfer or use for its own purposes Confidential Information except:-

         70.1.1    in the circumstances set out in Clause 70.2; or

         70.1.2    to the extent otherwise expressly permitted by this
 Agreement; or

         70.1.3 with the prior consent in writing of the Party to whose affairs
such Confidential Information relates; or

         70.1.4     to the extent that it has been properly provided to the
                    Obligor by the Settlement System Administrator pursuant to
                    any provision of the Pool Rules.

70.2     Exceptions: The circumstances referred to in Clause 70.1.1 are:-

70.2.1  where  the  Confidential  Information,  before  it is  furnished  to the
     Obligor, is in the public domain; or

70.2.2  where  the  Confidential  Information,  after  it is  furnished  to  the
     Obligor:-

     (a)  is acquired by the  Obligor in  circumstances  in which this Clause 70
          does not apply; or

     (b)  is acquired by the  Obligor in  circumstances  in which this Clause 70
          does apply and  thereafter  ceases to be  subject to the  restrictions
          imposed by this Clause 70; or

     (c)  enters the public domain,

                    and in any such case otherwise than as a result of (i) a
                    breach by the Obligor of its obligations in this Clause 70
                    or (ii) a breach by the person who disclosed that
                    Confidential Information of that person's confidentiality
                    obligation and the Obligor is aware of such breach; or

     70.2.3 if the Obligor is required or  permitted to make  disclosure  of the
          Confidential Information to any person:-

                    (a) in compliance with the duties of the Obligor under the
Act or any other requirement of a Competent Authority; or

                    (b)   in compliance with the conditions of any Licence or
                          any document referred to in any Licence with which the
                          Obligor is required to comply; or

                    (c)   in compliance with any other requirement of law; or

                    (d) in response to a requirement of any stock exchange or
regulatory authority or the Panel on Take-overs and Mergers; or

                    (e)   pursuant to the arbitration rules for the Electricity
                          Arbitration Association or pursuant to any judicial or
                          other arbitral process or tribunal having jurisdiction
                          in relation to the Obligor; or

         70.2.4 to the employees, directors, agents, consultants and
professional advisers of the Obligor, in each case on the basis set out in
Clause 70.3.

70.3     Internal procedures: With effect from the date of this Agreement the
         Obligor shall adopt procedures within its organisation for ensuring the
         confidentiality of all Confidential Information which it is obliged to
         preserve as confidential under Clause 70.1. These procedures are:-

         70.3.1 the Confidential Information will be disseminated within the
Obligor only on a "need to know" basis;

         70.3.2     employees, directors, agents, consultants and professional
                    advisers of the Obligor in receipt of Confidential
                    Information will be made fully aware of the Obligor's
                    obligations of confidence in relation thereto; and

         70.3.3     any copies of the Confidential Information, whether in hard
                    copy or computerised form, will clearly identify the
                    Confidential Information as confidential.

71.      RELEASE OF INFORMATION

71.1     Notwithstanding any foregoing provisions of this Part XX, the Parties
         agree that each of them shall be at liberty to provide copies of this
         Agreement and any supplemental agreement to both or either thereof to
         any third party, and each of the Parties consents to disclosure by any
         other Party of the fact that it is a party to this Agreement and, where
         such is the case, a Pool Member.

         71.1.1     The following provisions of this Clause are designed to
                    facilitate the release of certain data and other information
                    to persons who are not Parties. Such provisions are without
                    prejudice to any Party's rights to disclose or use data or
                    information pursuant to the other provisions of this
                    Agreement or otherwise.

         71.1.2     At the request of the Executive Committee or any person who
                    is not a Party and against payment by or on behalf of the
                    person to whom the data or other information is to be
                    released of a fee or charge therefor calculated mutatis
                    mutandis on the basis set out in Clause 34.2, the Settlement
                    System Administrator shall provide to such person(s) as the
                    Executive Committee may nominate or (as the case may be) to
                    the person requesting the same, data and other information
                    received by the Settlement System Administrator in or
                    derived from the operation of the Settlement System provided
                    that:-

               (a)  the Pool Rules  specify that such data or other  information
                    may be so released; or

               (b)  the Party to whose  affairs  such data or other  information
                    relates  has given  its prior  consent  in  writing  to such
                    disclosure.

         71.1.3     Upon request by the Executive Committee, the Settlement
                    System Administrator shall notify the Executive Committee in
                    writing of any request received by it from any person under
                    Clause 71.1.2 and of the name of such person and shall give
                    details of the data and other information provided.

         71.1.4 Each of the Parties agrees to the release of data and other
information in the circumstances described in Clause 71.1.2.

71.2     The Parties acknowledge that, for the Executive Committee and each of
         its sub-committees properly to carry out its duties and
         responsibilities under this Agreement, the Executive Committee may
         decide or be obliged to keep confidential to it (and may instruct its
         sub-committees to keep confidential) matters, reports, data and other
         information produced by or for, made available to or held by, the
         Executive Committee or the relevant sub-committee and, in any such
         case, Committee Members shall neither disclose the same to the Pool
         Member(s) which they represent nor be required by such Pool Member(s)
         so to disclose. Each of the Parties agrees to respect the position of
         the Executive Committee, its sub-committees and the Committee Members
         accordingly.

71.3 Each of the Parties other than the  Settlement  System  Administrator,  the
     Grid  Operator,   the  Ancillary  Services  Provider  and  the  Pool  Funds
     Administrator agrees, subject to any relevant  confidentiality  restriction
     binding on it, to provide the Executive Committee,  the Chief Executive and
     the  personnel  referred  to in  Clause  17.2.1  with all  data  and  other
     information  reasonably  requested by the Executive Committee and necessary
     for the Executive  Committee,  the Chief  Executive or (as the case may be)
     such personnel properly to carry out its or his duties and responsibilities
     under this Agreement. The Grid Operator and the Ancillary Services Provider
     each agree, subject to any relevant confidentiality  restriction binding on
     it,  to  provide  the  Executive  Committee,  the Chief  Executive  and the
     personnel referred to in Clause 17.2.1 with such data and other information
     relating  to  its  duties,   responsibilities  or  obligations  under  this
     Agreement which the Executive  Committee shall reasonably request and which
     is necessary for the Executive  Committee,  the Chief  Executive or (as the
     case  may  be)  such   personnel  to  carry  out  its  or  his  duties  and
     responsibilities under this Agreement.

71.4     Each Party acknowledges and agrees that no Party shall be in breach of
         any obligation of confidentiality owed by it pursuant to this Agreement
         in reporting under Clause 6.10 any breach of the Pool Rules or its
         belief that any such breach has occurred.

71.5 Notwithstanding  any other provision of this  Agreement,  the provisions of
     this Part XX shall continue to bind a person after its cessation as a Party
     for whatever reason.



<PAGE>


                                    PART XXI

                            THE PARTICIPATION OF NGC

72.      THE PARTICIPATION OF NGC

72.1     As Grid Operator: For so long as NGC is the Grid Operator, references
         in this Agreement to the Grid Operator shall be read and construed as
         references to NGC acting in its capacity as Grid Operator, and all
         rights, benefits, duties, responsibilities, liabilities and obligations
         under this Agreement with regard to the Grid Operator shall be those of
         NGC acting in that capacity.

72.2     As Ancillary Services Provider: For so long as NGC is the Ancillary
         Services Provider, references in this Agreement to the Ancillary
         Services Provider shall be read and construed as references to NGC
         acting in its capacity as Ancillary Services Provider, and all rights,
         benefits, duties, responsibilities, liabilities and obligations under
         this Agreement with regard to the Ancillary Services Provider shall be
         those of NGC acting in that capacity. The Ancillary Services Provider
         shall have the benefit of the obligations and undertakings entered into
         by the Settlement System Administrator and Pool Funds Administrator in
         this Agreement.

72.3 As Pool  Member:  The  Parties  acknowledge  that  NGC is not in any of its
     capacities under this Agreement a Pool Member.

72.4     Wholly-owned subsidiary: NGC shall procure that so long as Energy
         Settlements and Information Services Limited is appointed Settlement
         System Administrator it shall at all times remain a wholly-owned
         subsidiary of, and wholly controlled by, NGC.

73.      [Not used.]



<PAGE>


                                    PART XXII

                                  MISCELLANEOUS

74.      FORCE MAJEURE

74.1     Force Majeure: Where the Settlement System Administrator, the Grid
         Operator, the Pool Funds Administrator or the Ancillary Services
         Provider (the "Non-Performing Party") is unable to carry out all or any
         of its obligations under the SSA Arrangements by reason of Force
         Majeure (but subject, in the case of the Settlement System
         Administrator, to Section 33 of Schedule 4):-

         74.1.1    the SSA Arrangements shall remain in effect; but

         74.1.2    (a)    the Non-Performing Party's relevant obligations;

                    (b) the obligations of each of the other Parties owed to the
Non-Performing Party under the SSA Arrangements; and

                    (c)   any other obligations (not being payment obligations)
                          of such other Parties under the SSA Arrangements owed
                          inter se which the relevant Party is unable to carry
                          out directly as a result of the suspension of the
                          Non-Performing Party's obligations

shall be suspended for a period equal to the Force Majeure provided that:-

                    (i) the suspension of performance is of no greater scope and
of no longer duration than is required by the Force Majeure;

                    (ii) no obligations of any Party are excused as a result of
the Force Majeure; and

                    (iii) in respect of the suspension of the Non-Performing
Party's obligations:-

                          (A)      the Non-Performing Party gives the Executive
                                   Committee (which shall promptly inform the
                                   other Parties, the Pool Auditor and the
                                   Director) prompt notice describing the
                                   circumstance of Force Majeure, including the
                                   nature of the occurrence and its expected
                                   duration, and continues to furnish daily
                                   reports with respect thereto during the
                                   period of Force Majeure; and

                          (B) the Non-Performing Party uses all reasonable
efforts to remedy its inability to perform.

74.2     Discussions: As soon as practicable after the occurrence of the Force
         Majeure the Non-Performing Party shall discuss with the Executive
         Committee how best to continue its operations and give effect to its
         obligations so far as possible in accordance with this Agreement.

75.      NOTICES

75.1     Addresses: Save as otherwise expressly provided in the SSA
         Arrangements, any notice or other communication to be given by one
         Party to another under, or in connection with the matters contemplated
         by, the SSA Arrangements shall be addressed to the recipient and sent
         to the address, telex number or facsimile number of such other Party
         given in the SSA Arrangements for the purpose and marked for the
         attention of the person so given or to such other address, telex number
         and/or facsimile number and/or marked for such other attention as such
         other Party may from time to time specify by notice given in accordance
         with this Clause 75 to the Party giving the relevant notice or other
         communication to it.

75.2     Executive Committee: Any notice or other communication to be given to
         the Executive Committee under, or in connection with the matters
         contemplated by, the SSA Arrangements shall be sent to the Secretary at
         the address, telex number or facsimile number given in the SSA
         Arrangements for the purpose or to such other address, telex number or
         facsimile number as the Secretary may from time to time specify by
         notice given in accordance with this Clause 75 to the Parties.

75.3     Deemed receipt: Save as otherwise expressly provided in the SSA
         Arrangements, any notice or other communication to be given by any
         Party to any other Party under, or in connection with the matters
         contemplated by, the SSA Arrangements shall be in writing and shall be
         given by letter delivered by hand or sent by first class prepaid post
         (airmail if overseas) or telex or facsimile, and shall be deemed to
         have been received:-

         75.3.1    in the case of delivery by hand, when delivered; or

         75.3.2     in the case of first class prepaid post, on the second day
                    following the day of posting or (if sent airmail overseas or
                    from overseas) on the fifth day following the day of
                    posting; or

         75.3.3     in the case of telex, on the transmission of the automatic
                    answer-back of the addressee (where such transmission occurs
                    before 1700 hours on the day of transmission) and in any
                    other case on the day following the day of transmission; or

         75.3.4     in the case of facsimile, on acknowledgement by the
                    addressee's facsimile receiving equipment (where such
                    acknowledgement occurs before 1700 hours on the day of
                    acknowledgement) and in any other case on the day following
                    the day of acknowledgement.

76.      ASSIGNMENT

         A Party shall not assign and/or transfer and shall not purport to
         assign and/or transfer any of its rights and/or obligations under the
         SSA Arrangements provided that any Party may assign by way of security
         only all or any of its rights over receivables arising under the SSA
         Arrangements.

77.      COUNTERPARTS

         This Agreement may be executed in any number of counterparts and by the
         different Parties on separate counterparts, each of which when executed
         and delivered shall constitute an original, but all the counterparts
         shall together constitute but one and the same instrument.

78.      WAIVERS; REMEDIES NOT CUMULATIVE

78.1     Waivers: No delay by or omission of any Party in exercising any right,
         power, privilege or remedy under the SSA Arrangements shall operate to
         impair such right, power, privilege or remedy or be construed as a
         waiver thereof. Any single or partial exercise of any such right,
         power, privilege or remedy shall not preclude any other or further
         exercise thereof or the exercise of any other right, power, privilege
         or remedy.

78.2     Remedies not cumulative: The rights and remedies provided by the SSA
         Arrangements to the Parties are exclusive and not cumulative and
         exclude and are in place of all substantive (but not procedural) rights
         or remedies express or implied and provided by common law or statute in
         respect of the subject matter of the SSA Arrangements (other than any
         such rights or remedies provided under section 58 of the Act or any
         directions (if any) issued thereunder), including without limitation
         any rights any Party may possess in tort which shall include actions
         brought in negligence and/or nuisance. Accordingly, each of the Parties
         hereby waives to the fullest extent possible all such rights and
         remedies provided by common law or statute, and releases a Party which
         is liable to another (or others), its officers, employees and agents to
         the same extent from all duties, liabilities, responsibilities or
         obligations provided by common law or statute in respect of the matters
         dealt with in this Agreement and undertakes not to enforce any of the
         same except as expressly provided herein.

78.3     Director's and Secretary of State's rights: For the avoidance of doubt,
         the Parties acknowledge and agree that nothing in the SSA Arrangements
         shall exclude or restrict or otherwise prejudice or affect any of the
         rights, powers, privileges, remedies, duties and obligations of the
         Secretary of State or the Director under the Act or any Licence or
         otherwise howsoever.

79.      SEVERANCE OF TERMS

         If for any reason whatever any provision of the SSA Arrangements is or
         becomes invalid, illegal or unenforceable, or is declared by any court
         of competent jurisdiction or any other Competent Authority to be
         invalid, illegal or unenforceable or if such Competent Authority:-

         (a)      refuses, or formally indicates an intention to refuse,
                  authorisation of, or exemption to, any of the provisions of or
                  arrangements contained in the SSA Arrangements (in the case of
                  a refusal either by way of outright refusal or by way of
                  requiring the amendment or deletion of any provision of the
                  SSA Arrangements and/or the inclusion of any provision in the
                  SSA Arrangements and/or the giving of undertakings or the
                  acceptance of conditions as to future conduct before such
                  authorisation or exemption can be granted); or

         (b)      formally indicates that to continue to operate any provision
                  of the SSA Arrangements may expose the Parties to sanctions
                  under any law, order, enactment or regulation, or requests any
                  Party to give undertakings or to accept conditions as to
                  future conduct in order that such Party may not be subject to
                  such sanctions

         and, in all cases, whether initially or at the end of any earlier
         period or periods of exemption then, in any such case, the Parties will
         negotiate in good faith with a view to agreeing one or more provisions
         which may be substituted for such invalid, unenforceable or illegal
         provision which substitute provision(s) is(are) satisfactory to the
         Competent Authority(ies) and produce(s) as nearly as is practicable in
         all the circumstances the appropriate balance of the commercial
         interests of the Parties.

80.      ENTIRE AGREEMENT

         The SSA Arrangements contain or expressly refer to the entire agreement
         between the Parties with respect to the subject matter hereof and
         expressly exclude any warranty, condition or other undertaking implied
         at law or by custom and supersedes all previous agreements and
         understandings between the Parties with respect thereto and each of the
         Parties acknowledges and confirms that it does not enter into this
         Agreement in reliance on any representation, warranty or other
         undertaking not fully reflected in the terms of the SSA Arrangements.

81.      LANGUAGE

         Each notice, instrument, certificate or other document to be given by
one Party to another hereunder shall be in the English language.

82.      RESTRICTIVE TRADE PRACTICES ACT 1976

         If after the commencement of section 100 of the Act (the "RTP Section")
         this Agreement is subject to registration under the Restrictive Trade
         Practices Act 1976 then NGC undertakes, no earlier than five months but
         no later than six months after the commencement of the RTP Section, to
         furnish to the Director General of Fair Trading particulars of this
         Agreement and of any agreement of which it forms part. Before
         furnishing such particulars NGC will consult with the Founder
         Generators and the Founder Suppliers as to the nature of the
         particulars to be so furnished and will consult with the Founder
         Generators and Founder Suppliers regularly regarding the progress of
         discussions with the Director General of Fair Trading in regard to the
         agreement(s) so furnished.

83.      ARBITRATION

83.1     Referral to arbitration: Save where expressly stated in this Agreement
         to the contrary and subject to any contrary provision of the Act or any
         Licence or the rights, powers, duties and obligations of the Director
         or the Secretary of State under the Act, any Licence or otherwise
         howsoever, any dispute or difference of whatever nature howsoever
         arising under, out of or in connection with the SSA Arrangements
         between any one or more Parties shall be and is hereby referred to
         arbitration pursuant to the arbitration rules of the Electricity
         Arbitration Association in force from time to time.

83.2     Proper law: Whatever the nationality, residence or domicile of any
         Party and wherever the dispute or difference or any part thereof arose
         the law of England shall be the proper law of any reference to
         arbitration hereunder and in particular (but not so as to derogate from
         the generality of the foregoing) the provisions of the Arbitration Acts
         1950 (notwithstanding anything in section 34 thereof) to 1979 shall
         apply to any such arbitration wherever the same or any part of it shall
         be conducted.

83.3     Third Party Claims (1): Subject always to Clause 83.6, if any tariff
         customer (as defined in section 22(4) of the Act) brings any legal
         proceedings in any court (as defined in the Rules of the Supreme Court
         1965 and in the County Courts Act 1984) against one or more persons,
         any of which is a Party (the "Defendant Contracting Party"), and the
         Defendant Contracting Party wishes to make a Third Party Claim (as
         defined in Clause 83.5) against any other Party (a "Contracting Party")
         which would but for this Clause 83.3 have been a dispute or difference
         referred to arbitration by virtue of Clause 83.1 then, notwithstanding
         the provisions of Clause 83.1 which shall not apply and in lieu of
         arbitration, the court in which the legal proceedings have been
         commenced shall hear and completely determine and adjudicate upon the
         legal proceedings and the Third Party Claim not only between the tariff
         customer and the Defendant Contracting Party but also between either or
         both of them and any other Contracting Party whether by way of third
         party proceedings (pursuant to the Rules of the Supreme Court 1965 or
         the County Court Rules 1981) or otherwise as may be ordered by the
         court.

83.4     Third Party Claims (2): Where a Defendant Contracting Party makes a
         Third Party Claim against any Contracting Party and such Contracting
         Party wishes to make a Third Party Claim against a further Contracting
         Party the provisions of Clause 83.3 shall apply mutatis mutandis as if
         such Contracting Party had been the Defendant Contracting Party and
         similarly in relation to any such further Contracting Party.

83.5     Third Party Claims (3): For the purposes of this Clause 83
 "Third Party Claim" shall mean:-

         83.5.1     any claim by a Defendant Contracting Party against a
                    Contracting Party (whether or not already a party to the
                    legal proceedings) for any contribution or indemnity; or

         83.5.2     any claim by a Defendant Contracting Party against such a
                    Contracting Party for any relief or remedy relating to or
                    connected with the subject matter of the legal proceedings
                    and substantially the same as some relief or remedy claimed
                    by the tariff customer; or

         83.5.3     any requirement by a Defendant Contracting Party that any
                    question or issue relating to or connected with the subject
                    matter of the legal proceedings should be determined not
                    only as between the tariff customer and the Defendant
                    Contracting Party but also as between either or both of them
                    and a Contracting Party (whether or not already a party to
                    the legal proceedings).

83.6     Limitation: Clause 83.3 shall apply only if at the time the legal
         proceedings are commenced no arbitration has been commenced between the
         Defendant Contracting Party and another Contracting Party raising or
         involving the same or substantially the same issues as would be raised
         by or involved in the Third Party Claim. The tribunal in any
         arbitration which has been commenced prior to the commencement of legal
         proceedings shall determine the question, in the event of dispute,
         whether the issues raised or involved are the same or substantially the
         same.

84.      JURISDICTION

84.1     Submission to jurisdiction: Subject and without prejudice to Clauses 83
         and 84.4, all the Parties irrevocably agree that the courts of England
         are to have exclusive jurisdiction to settle any disputes which may
         arise out of or in connection with the SSA Arrangements and that
         accordingly any suit, action or proceeding (together in this Clause 84
         referred to as "Proceedings") arising out of or in connection with the
         SSA Arrangements may be brought in such courts.

84.2     Waiver: Each Party irrevocably waives any objection which it may have
         now or hereafter to the laying of the venue of any Proceedings in any
         such court as is referred to in this Clause and any claim that any such
         Proceedings have been brought in an inconvenient forum and further
         irrevocably agrees that a judgment in any Proceedings brought in the
         English courts shall be conclusive and binding upon such Party and may
         be enforced in the courts of any other jurisdiction.

84.3     Agent for service of process: Each Party which is not incorporated in
         any part of England or Wales agrees that if it does not have, or shall
         cease to have, a place of business in England or Wales it will promptly
         and hereby does appoint the Settlement System Administrator (or such
         other person as shall be acceptable to the Executive Committee)
         irrevocably to accept service of process on its behalf in any
         Proceedings in England.

84.4     Arbitration: For the avoidance of doubt nothing contained in the
         foregoing provisions of this Clause 84 shall be taken as permitting a
         Party to commence Proceedings in the courts where this Agreement
         otherwise provides for Proceedings to be referred to arbitration.

85.      GOVERNING LAW

         The SSA Arrangements shall be governed by, and construed in all
respects in accordance with, English law.

IN WITNESS whereof this Agreement has been duly executed the day and year first
above written


CA971150.152



<PAGE>


                                   SCHEDULE 1

            This Schedule reflects the parties as at 30th March, 1990

                             The Founder Generators
<TABLE>
<CAPTION>
<S>                                        <C>             <C>

                                            Registered      Registered or
Name                                        Number          Principal Office
National Power PLC                          2366963         Sudbury House
                                                            15 Newgate Street
                                                            London EC1A 7AU
PowerGen plc                                2366970         53 New Broad Street
                                                            London EC2M 1JJ
Nuclear Electric plc                        2264251         Barnett Way
                                                            Barnwood
                                                            Gloucester GL4 7RS
The National Grid Company plc (Pumped       2366977         National Grid House
Storage Business Division)                                  Sumner Street
                                                            London SE1 9JU
Electricite de France, Service National     -               3 Rue de Messine
                                                            75008 Paris
                                                            France
Scottish Power plc                          117120          Cathcart House
                                                            Spean Street
                                                            Glasgow G44 4BE Scotland
Scottish Hydro-Electric PLC                 117119          16 Rothesay Terrace Edinburgh
                                                            EH3 7SE Scotland
British Nuclear Fuels plc                   1002607         Risley
                                                            Warrington
                                                            Cheshire WA3 6AS
The United Kingdom Atomic Energy Authority  -               11 Charles II Street London
                                                            SW1 4QT
Central Power Limited                       2251099         Mucklow Hill
                                                            Halesowen
                                                            West Midlands B62 8BP
</TABLE>


<PAGE>


                                   SCHEDULE 2

            This Schedule reflects the parties as at 30th March, 1990

                              The Founder Suppliers

                                     Part A

                                                  Public Electricity Suppliers

                                   Registered        Registered or
Name                               Number            Principal Office
Eastern Electricity plc            2366906           Wherstead Park
                                                     Wherstead
                                                     Ipswich
                                                     Suffolk
                                                     IP9 2AQ
East Midlands Electricity plc      2366923           398 Coppice Road
                                                     Arnold
                                                     Nottingham
                                                     NG5 7HX
London Electricity plc             2366852           Templar House
                                                     81-87 High Holborn
                                                     London WC1V 6NU
Manweb plc                         2366937           Sealand Road
                                                     Chester
                                                     CH1 4LR
Midlands Electricity plc           2366928           Mucklow Hill
                                                     Halesowen
                                                     West Midlands
                                                     B62 8BP
Northern Electric plc              2366942           Carliol House
                                                     Market Street
                                                     Newcastle upon Tyne
                                                     NE1 6NE
NORWEB plc                         2366949           Talbot Road
                                                     Manchester M16 6NE
SEEBOARD plc                       2366867           Grand Avenue
                                                     Hove
                                                     East Sussex
                                                     BN3 2LS
Southern Electric plc              2366879           Littlewick Green
                                                     Maidenhead
                                                     Berkshire
                                                     SL6 3QB
South Wales Electricity plc        2366985           Newport Road
                                                     St Mellons
                                                     Cardiff
                                                     CF3 9XW
South Western Electricity plc      2366894           800 Park Avenue
                                                     Aztec West
                                                     Almondsbury
                                                     Bristol
                                                     BS12 4SE
Yorkshire Electricity Group plc    2366995           Wetherby Road
                                                     Scarcroft
                                                     Leeds
                                                     LS14 3HS


<PAGE>


                                                              Part B

                                                      Second Tier Suppliers

                                   Registered        Registered or
Name                               Number            Principal Office
National Power PLC                 2366963           Sudbury House
                                                     15 Newgate Street
                                                     London
                                                     EC1A 7AU
PowerGen plc                       2366970           53 New Broad Street
                                                     London
                                                     EC2M 1JJ
Nuclear Electric plc               2264251           Barnett Way
                                                     Barnwood
                                                     Gloucester
                                                     GL4 7RS
SEEBOARD plc                       2366867           Grand Avenue
                                                     Hove
                                                     East Sussex
                                                     BN3 2LS
British Nuclear Fuels plc          1002607           Risley
                                                     Warrington
                                                     Cheshire
                                                     WA3 6AS




<PAGE>


                                                              Part C

                                                              Others

                                   Registered        Registered or
Name                               Number            Principal Office
Electricite de France, Service National     -           3 Rue de Messine
                                                        75008
                                                        Paris
                                                        France
Scottish Power plc                          117120      Cathcart House
                                                        Spean Street
                                                        Glasgow G44 4BE
                                                        Scotland
Scottish Hydro-Electric PLC                 117119      16 Rothesay Terrace
                                                        Edinburgh EH3 7SE
                                                        Scotland




<PAGE>


                                   SCHEDULE 3

                           Form of Accession Agreement

THIS SUPPLEMENTAL AGREEMENT is made on [                 ] BETWEEN:-

(1)  [ ], a company  incorporated [with limited liability] under the laws of [ ]
     [(registered number [ ])] and having its [registered] [principal] office at
     [ ] (the "New Party"); and

(2)  [ ] (the  "Nominee")  on  behalf  of all the  parties  to the  Pooling  and
     Settlement Agreement referred to below.

WHEREAS:-

(A)      by an agreement dated 30th March, 1990 made between the Founder
         Generators named therein (1), the Founder Suppliers named therein (2),
         NGC Settlements Limited now known as Energy Settlements and Information
         Services Limited as Settlement System Administrator (3), Energy Pool
         Funds Administration Limited as Pool Funds Administrator (4), The
         National Grid Company plc as Grid Operator and Ancillary Services
         Provider (5), and Scottish Power plc and Electricite de France, Service
         National as Externally Interconnected Parties (6) (as amended, varied,
         supplemented, modified or suspended, the "Pooling and Settlement
         Agreement") the parties thereto agreed to give effect to and be bound
         by certain rules and procedures for the operation of an electricity
         trading pool and the operation of a settlement system; and

(B)  the New Party has  requested  that it be  admitted  as a Party  pursuant to
     Clause 3 of the Pooling and  Settlement  Agreement  and each of the Parties
     hereby agrees to such admission.

NOW IT IS HEREBY AGREED as follows:-

1.       Unless the context otherwise requires, words and expressions defined in
         the Pooling and Settlement Agreement shall bear the same meanings
         respectively when used herein.

2.       The Nominee (acting on behalf of each of the Parties) hereby admits the
         New Party as an additional Party under the Pooling and Settlement
         Agreement on the terms and conditions hereof and with effect from
         [insert effective date of admission].

3.       The New Party hereby accepts its admission as a Party and undertakes
         with the Nominee (acting on behalf of each of the Parties) to perform
         and to be bound by the terms and conditions of the Pooling and
         Settlement Agreement as a Party as from the [insert effective date of
         admission].

4.       For all purposes in connection with the Pooling and Settlement
         Agreement the New Party shall as from the [insert effective date of
         admission] be treated as if it had been a signatory of the Pooling and
         Settlement Agreement as a [[Generator]/[Supplier]/[Externally
         Interconnected Party]]*, and as if this Agreement were part of the
         Pooling and Settlement Agreement, and the rights and obligations of the
         Parties shall be construed accordingly.

5.       This Agreement and the Pooling and Settlement Agreement shall be read
         and construed as one document and references in the Pooling and
         Settlement Agreement to the Pooling and Settlement Agreement (howsoever
         expressed) shall be read and construed as references to the Pooling and
         Settlement Agreement and this Agreement.

6.   This  Agreement  shall be  governed  by and  construed  in all  respects in
     accordance  with English law and the provisions of Clauses 83 and 84 of the
     Pooling and Settlement Agreement shall apply hereto mutatis mutandis.

AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first above written

[New Party]

By:

Notice details (Clause 75 of the Pooling and Settlement Agreement)

Address:

Telex number:

Facsimile number:

Attention:

[Nominee]

(for and on  behalf of  each  of the  parties  to the  Pooling  and Settlement
     Agreement)

By:

----------------------------------------------------------------------------

* Delete/complete as appropriate.

Note:this  form  will  require  adaptation  in the  circumstances  described  in
     Clauses 3.11 to 3.14 inclusive.



<PAGE>


                                   SCHEDULE 4

           Terms of Engagement of the Settlement System Administrator

                                    Contents

1.       DEFINITIONS

         1.1      Definitions

         1.2      Executive Committee's and Contract Manager's
                  obligations

2.       ORDERING AND PROVISION OF SERVICES

3.       THE SETTLEMENT SYSTEM ADMINISTRATOR'S CHARGES

4.       STANDARD OF CARE, LIMITATION OF LIABILITY
         AND INDEMNITY

         4.1      Standard of care

         4.2      Service Line

         4.3      Limitation of liability

         4.4      Death and personal injury

         4.5      Exclusion of certain types of loss

         4.6      Trust

         4.7      Survival

         4.8      Saving

         4.9      Full negotiation

         4.10     Indemnity

5.       PERSONNEL

         5.1      Standard of Personnel

         5.2      Account Manager

         5.3      Contract Manager

         5.4      Restriction on recruiting Personnel

6.       DUTIES AND RESPONSIBILITIES OF THE
         SETTLEMENT SYSTEM ADMINISTRATOR

         6.1      The Settlement System

         6.2      Back-up arrangements

         6.3      Metering

         6.4      Works Programmes

         6.5      Recommendations

         6.6      Records

         6.7      Provision of information (1)

         6.8      Provision of information (2)

         6.9      Provision of information (3)

         6.10     Pool Rules

         6.11     Arrangements with the Grid Operator and Ancillary Services
                  Provider

         6.12     Arrangements with the Pool Funds Administrator

         6.13     Notification of arrangements

         6.14     Estimates

         6.15     Advisory obligations

         6.16     Quality management system and procedures

         6.17     Documentation

         6.18     Long term forecasting procedures

         6.19     Provision of Hardware

         6.20     Performance Improvement Programme

         6.21     Data input and validation

7.       PERFORMANCE OF DUTIES

         7.1      Independent contractor

         7.2      Delegation

8.       RESPONSIBILITY FOR THE SSA SYSTEM

         8.1      The SSA System

         8.2      Developed software

         8.3      Licensed software

         8.4      Third party maintenance

         8.5      SSA System changes

         8.6      Maintenance of the SSA System Software

         8.7      Notification of commercial use

9.       SOFTWARE

         9.1      Definitions

         9.2      Representations and Warranties

10.      MAINTENANCE ARRANGEMENTS

11.      AUDIT ACCESS

12.      INSURANCE RESPONSIBILITIES

         12.1     Insurance requirements

         12.2     Application of proceeds

         12.3     Information requirements

         12.4     Default

         12.5     Change in insurance requirements

13.      TERMINATION OF THE APPOINTMENT OF ESIS

         13.1     Termination

         13.2     Termination pursuant to Clause 67.4

14.      RESIGNATION BY ESIS

15.      REMOVAL OF ESIS AFTER 31ST MARCH, 1999

16.      REMOVAL OF ESIS ON OR BEFORE 31ST MARCH, 1999

17.      REMOVAL OF ESIS

         17.1     Breach of obligations capable of remedy

         17.2     Breach of obligations incapable of remedy

         17.3     Insolvency

         17.4     Change of Status

         17.5     Removal Procedure

18.      POWERS OF EXECUTIVE COMMITTEE ON RESIGNATION
         AND REMOVAL

19.      APPOINTMENT OF SUCCESSOR SETTLEMENT SYSTEM
         ADMINISTRATOR

         19.1     Approval of the Director

         19.2     Discharge

20.      CONTINUATION OF SERVICES

         20.1     Continuation of Services

         20.2     Post-Termination Services

         20.3     Extension Period Charges

         20.4     Post-Termination Period Charges

         20.5     Two year limit

         20.6     Full force and effect

21.      TRANSFER OF SERVICES, RESPONSIBILITIES AND ASSETS

         21.1     Transfer of services, responsibilities     and assets

         21.2     Asset Transfer Costs

         21.3     Transition services

         21.4     Disputes

22.      ALLOCATION OF COSTS ON RESIGNATION

23.      ALLOCATION OF COSTS ON REMOVAL AFTER 31ST MARCH, 1999
24.      ALLOCATION OF COSTS ON REMOVAL ON OR BEFORE 31ST MARCH, 1999

25.      ALLOCATION OF COSTS ON REMOVAL

26.      REIMBURSEMENT BY POOL MEMBERS

27.      DIRECTOR'S INVOLVEMENT

28.      POOL MEMBER AND EXECUTIVE COMMITTEE BREACHES

29.      VARIATION OF SERVICE LINES

30.      EXTENSION OF TIME

31.      CONTRACT MANAGEMENT RULES

         31.1     Contract Management Rules

         31.2     Amendments to the Contract Management Rules

32.      GROSS MARGIN

         32.1     Auditor's Report

         32.2     Negotiations

33.      FORCE MAJEURE

34.      CONFIDENTIALITY

35.      NOTICES

APPENDIX





<PAGE>


1.       DEFINITIONS

1.1. Definitions:  In this  Schedule and the Appendix  hereto,  except where the
     context otherwise requires:-

         "Account Manager" means the person or his alternate who has been
         nominated as such by the Settlement System Administrator in accordance
         with sub-section 5.2;

"Anticipated Fixed  Standing  Charges" has the meaning given to that term in the
     Appendix hereto;

"Committed  Additional  Services  Charges" has the meaning given to that term in
     the Appendix hereto;

         "Compensation" means the aggregate of:-

          (a)  75  per  cent.  of  the  Profit  Element   attributable   to  the
               Anticipated Fixed Standing Charges; and

          (b)  the  Profit  Element  attributable  to the  Committed  Additional
               Services Charge;

         "Contract Management Rules" means the procedures of that name in the
agreed form as amended, modified or varied in accordance with sub-section 31.2;

         "Contract Manager" means the person or his alternate who has been
nominated as such by the Executive Committee in accordance with sub-section 5.3;

          "Deferred  Settlement  Project  Expenditure"  has the meaning given to
               that term in the Appendix hereto;

          "Extension Notice" has the meaning given to that term in  sub-section
               20.1;

          "Extension Period" has the meaning  given to that term in  sub-section
               20.1;

         "Gross Margin" means, in respect of each SSA Accounting Period, the
         aggregate of all Total Sums Due invoiced in respect of such SSA
         Accounting Period less those costs which can be directly related to the
         provision of Services hereunder (but disregarding for the purposes of
         such costs, tax, interest charges and Infrastructure Costs);

         "Infrastructure" means those assets and resources which are not
         dedicated to or directly attributable to the provision of part or parts
         of the Services. For the avoidance of doubt, Infrastructure includes
         the general manager, finance staff, personnel staff and procurement
         staff and the buildings (or parts thereof) attributable to such staff;

         "Infrastructure Costs" means those costs incurred by the Settlement
         System Administrator in the provision of Infrastructure. For the
         avoidance of doubt, Infrastructure Costs include the following costs to
         the extent that they are not directly attributable to a part or parts
         of the Services:-

         (a)      legal except where (i) such costs are agreed to be treated as
                  Third Party Costs, or (ii) such costs relate to the third (or
                  more) Supplemental Agreement in an SSA Accounting Period, in
                  which case they shall not be treated as Infrastructure Costs;

         (b)      training;

         (c)      audit;

         (d)      insurance;

         (e)      travelling;

         (f)      public relations;

         (g)      general depreciation; and

         (h)      group charges,

          but  do not include  professional  indemnity  insurance costs or costs
               related to Deferred Settlement Project Expenditure;

         "in the agreed form" means in a form which is agreed on the one hand by
         either the Account Manager or the Settlement System Administrator and
         on the other hand by either the Contract Manager or the Executive
         Committee;

         "Irremediable Removal Notice" means a notice given by the Executive
         Committee to the Settlement System Administrator pursuant to
         sub-section 17.2, 17.3 or (as the context may require) 17.4;

          "Menus of Prices" has the meaning  given to that term in the  Appendix
               hereto;

         "Order" has the meaning given to that term in the Appendix hereto;

         "Outstanding Liabilities" means all liabilities incurred by the
         Settlement System Administrator in providing the Services or to enable
         it to provide the Services and which as at the Termination Date remain
         to be discharged in whole or in part, other than the Pool Agreed
         Liabilities;

         "Performance Improvement Programme" means a programme agreed between
         the Executive Committee and the Settlement System Administrator in
         accordance with Section 10 of Part B of the Appendix hereto to improve
         the cost-effectiveness of Services;

         "Pool Agreed Liabilities" means all liabilities (including Deferred
         Settlement Project Expenditure) incurred by the Settlement System
         Administrator under any contract or arrangement entered into or renewed
         by the Settlement System Administrator at the express written request
         or with the express written approval of the Executive Committee or the
         Contract Manager and which as at the Termination Date remain to be
         discharged in whole or in part;

         "Pool Apportioned Outstanding Liabilities" means all Outstanding
         Liabilities which as at the Termination Date and according to their
         terms at such date fall to be discharged on or before 31st March, 1999
         provided that no such Outstanding Liability may be treated as a Pool
         Apportioned Outstanding Liability:-

         (a)      where the Settlement System Administrator accounts for such
                  Outstanding Liability during the period following the giving
                  of a Removal Notice on a different basis from that used to
                  account for such Outstanding Liability on the date which is 12
                  months prior to such Removal Notice, unless the Executive
                  Committee or the Contract Manager has consented to such
                  different basis (such consent not to be unreasonably withheld)
                  or such different basis of accounting is required by law or
                  applicable accounting standard; or

         (b)      to the extent that the amount of the Outstanding Liability
                  increases in a non-immaterial respect after the giving of a
                  Removal Notice except where such increase is necessary for the
                  Settlement System Administrator to provide Services under an
                  Order;

          "Post-Termination  Period" means a period of up to twelve months after
               the Termination Date;

         "Profit Element" means the Gross Margin for the twelve month period
         ending on the date of the Removal Notice as reported by the Settlement
         System Administrator's auditor pursuant to sub-section 32.1, reduced by
         9.4 per cent. on account of overhead costs;

         "Remediable Removal Notice" means a notice given by the Executive
Committee to the Settlement System Administrator pursuant to sub-section 17.1;

         "Removal Notice" means a notice given by the Executive Committee to the
         Settlement System Administrator pursuant to Section 15 or 16 or (as the
         case may be) sub-section 17.5;

          "Resignation  Notice"  means a notice given by ESIS to the  Executive
               Committee and the Director pursuant to Section 14;

         "Service Line" means a legally binding operating document which is
         agreed for the time being and from time to time by the Settlement
         System Administrator and the Executive Committee to be a Service Line
         in respect of a particular Service;

         "Services" has the meaning given to that term in the Appendix hereto;

         "Sole Supplier Index" has the meaning given to that term in the 
     Appendix hereto;

         "SSA Accounting Period" means each successive period of 12 months
         beginning on 1st April in each year or of such other length and/or
         beginning on such other date as may be agreed between the Settlement
         System Administrator and the Executive Committee. The first SSA
         Accounting Period shall begin on 1st April, 1994;

          "SSA Apportioned   Outstanding   Liabilities"  means  all  Outstanding
               Liabilities   other   than  the  Pool   Apportioned   Outstanding
               Liabilities;

         "Termination Date" means the date upon which the appointment of ESIS as
         Settlement System Administrator is terminated pursuant to Section 13.2,
         14, 15, 16 or (as the context may require) 17, as the same may be
         postponed pursuant to Section 20;

         "Third Party Costs" has the meaning given to that term in the Appendix
               hereto;

         "Total Sums Due" has the  meaning  given to that term in the  Appendix
               hereto; and

         "Transition Costs" means:-

         (a)      the costs incurred by the Settlement System Administrator
                  during the period from the date of the Removal Notice or the
                  Resignation Notice to the Termination Date in providing
                  reasonable training for the person who becomes the successor
                  Settlement System Administrator, such training to be a single
                  programme delivered once and to be to the same standards and
                  to use the same practices and procedures as are then set out
                  in the Service Lines at the date on which the consultation
                  procedure prior to serving a Removal Notice or a Resignation
                  Notice commences;

         (b)      reasonable costs incurred by the Settlement System
                  Administrator in supporting the commissioning and proving of
                  the successor Settlement System such that the successor
                  Settlement System Administrator is capable of operating on the
                  same basis and to the same frequencies as are set out in the
                  Service Lines at the date on which the consultation procedure
                  prior to serving a Removal Notice or a Resignation Notice
                  commences;

         (c)      the costs incurred by the Settlement System Administrator in
                  physically moving, relocating or handing over to the successor
                  Settlement System Administrator the property required to be
                  made available by ESIS (but not, for the avoidance of doubt,
                  the consideration payable therefor);

         (d)      the costs incurred by the Settlement System Administrator in
                  preparing and supplying to the successor Settlement System
                  Administrator procedural or practice documentation not already
                  recorded in writing; and

         (e)      the travelling and accommodation costs of the Settlement
                  System Administrator's employees in attending upon the
                  successor Settlement System Administrator for all or any of
                  the purposes in paragraph (a), (b) or (c) above.

1.2      Executive Committee's and Contract Manager's obligations: Where in this
         Schedule and the Appendix hereto an obligation is expressed to be
         undertaken by the Executive Committee or the Contract Manager, the Pool
         Members shall procure that the Executive Committee or, as the case may
         be, the Contract Manager performs that obligation and any breach,
         failure or action on the part of the Executive Committee or the
         Contract Manager shall be deemed to be a breach, failure or action on
         the part of all Pool Members.

2.       ORDERING AND PROVISION OF SERVICES

         Ordering and provision of Services: Services shall be Ordered and
         provided in accordance with and pursuant to the Appendix hereto and the
         provisions of that Appendix shall have effect.

3.       THE SETTLEMENT SYSTEM ADMINISTRATOR'S CHARGES

         Payment for Services: The Settlement System Administrator shall be
         entitled to recover from the Pool Members and Parties charges in
         accordance with and pursuant to the Appendix hereto.

4.       STANDARD OF CARE, LIMITATION OF LIABILITY AND INDEMNITY

4.1      Standard of care: Subject to sub-section 4.2, in the exercise of its
         duties and responsibilities under the SSA Arrangements the Settlement
         System Administrator shall exercise that degree of care, diligence,
         skill and judgment which would ordinarily be expected of a reasonably
         prudent operator of the Settlement System taking into account the
         circumstances actually known to the Settlement System Administrator,
         its officers and employees at the relevant time or which ought to have
         been known to it or them had it or they made such enquiries as were
         reasonable in the circumstances. In particular, but without prejudice
         to the generality of the foregoing, in the absence of directions and
         instructions given to it by the Executive Committee or the Contract
         Manager under the SSA Arrangements and having due regard to the
         constraints imposed on the Settlement System Administrator by the
         Charging Procedure and the resources available to it, the Settlement
         System Administrator shall at all times conduct itself in a manner
         calculated to achieve the principal objects and purpose of the
         Agreement set out in Clauses 4.1.2 and 4.1.3.

4.2      Service Line: If the standard required of the Settlement System
         Administrator for the performance of a Service is included in the
         Service Line for that Service, such standard shall be deemed to be the
         standard to which the Settlement System Administrator will be required
         to perform to discharge its duty of care under sub-section 4.1 in
         respect of that Service.

4.3      Limitation of liability: Subject to sub-section 4.4 and save where any
         provision of this Agreement provides for an indemnity, each Party
         agrees and acknowledges that neither the Settlement System
         Administrator nor any of its officers, employees or agents shall be
         liable to any of the other Parties for loss arising from any breach of
         the SSA Arrangements other than for loss directly resulting from such
         breach and which at the date of this Agreement was reasonably
         foreseeable as not unlikely to occur in the ordinary course of events
         from such breach in respect of:-

          (i)  physical  damage to the  property of any of the other  Parties or
               its or their respective officers, employees or agents; and/or

          (ii) the  liability  of any such other  Party to any other  person for
               loss in respect of physical  damage to the  property of any other
               person.

4.4      Death and personal injury: Nothing in the SSA Arrangements shall
         exclude or limit the liability of the Settlement System Administrator
         for death or personal injury resulting from the negligence of the
         Settlement System Administrator or any of its officers, employees or
         agents and the Settlement System Administrator shall indemnify and keep
         indemnified each of the other Parties, its officers, employees and
         agents from and against all such and any loss or liability which any
         such other Party may suffer or incur by reason of any claim on account
         of death or personal injury resulting from the negligence of the
         Settlement System Administrator or any of its officers, employees or
         agents.

4.5      Exclusion of certain types of loss: Subject to sub-section 4.4 and save
         where any provision of this Agreement provides for an indemnity,
         neither the Settlement System Administrator nor any of its officers,
         employees or agents shall in any circumstances whatsoever be liable to
         any of the other Parties for:-

          (i)  any  loss of  profit,  loss  of  revenue,  loss  of use,  loss of
               contract or loss of goodwill; or

         (ii)     any indirect or consequential loss; or

         (iii)loss  resulting  from the  liability  of any  other  Party to any
               other person howsoever and whensoever arising save as provided in
               paragraph 4.3(ii) and sub-section 4.4.

          4.6  Trust: Each Party  acknowledges and agrees that each of the other
               Parties  holds the benefit of  sub-sections  4.3, 4.4 and 4.5 for
               itself and as trustee and agent for its  officers,  employees and
               agents.

4.7      Survival: Each of sub-sections 4.3, 4.4, 4.5 and 4.6 shall:-

         (i)      be construed as a separate and severable contract term, and if
                  one or more of such sub-sections is held to be invalid,
                  unlawful or otherwise unenforceable the other or others of
                  such sub-sections shall remain in full force and effect and
                  shall continue to bind the Parties; and

         (ii) survive termination of the appointment of ESIS as Settlement
System Administrator.

         4.8  Saving:  For the  avoidance  of doubt,  nothing in this Section 4
               shall  prevent or restrict  any Party  enforcing  any  obligation
               (including suing for a debt) owed to it under or pursuant to this
               Agreement.

          4.9  Full  negotiation:  Each Party  acknowledges  and agrees that the
               foregoing  provisions  of this Section 4 have been the subject of
               discussion and  negotiation  and are fair and  reasonable  having
               regard to the circumstances as at the date of this Agreement.

4.10     Indemnity:

         (a)      In this sub-section 4.10 "Losses" means all losses, costs,
                  damages, expenses, liabilities and claims suffered or
                  reasonably incurred by the Settlement System Administrator,
                  its officers, employees or agents.

          (b)  Each Pool Member (or, in the case of any  agreement  entered into
               for or on behalf of any class of Pool  Members,  each Pool Member
               of that  class)  shall (but only in  respect of its  Contributory
               Share at the time of receipt of the request for  indemnification)
               severally  indemnify and keep  indemnified the Settlement  System
               Administrator,  its officers,  employees  and agents  against all
               Losses arising  directly or indirectly out of a third party claim
               made against the Settlement System  Administrator,  its officers,
               employees or agents under or pursuant to any agreement  which the
               Settlement System Administrator, against an Order or a request of
               the Executive  Committee issued or made as permitted by Part E of
               the Appendix hereto,  has entered into as agent for, or otherwise
               on behalf of, the Pool  Members  and/or any class of Pool Members
               and/or the Executive Committee (other than any Losses recoverable
               under the Charging  Procedure or arising from the wilful default,
               bad faith or negligence  of, or breach of its  obligations  under
               the SSA Arrangements by, the Settlement System Administrator, its
               officers,   employees  or  agents).  For  the  purposes  of  this
               sub-section  4.10 the Pool  Members in general  meeting  shall be
               deemed to have approved the Escrow  Agreement and each  Accession
               Agreement  executed  prior to 1st October,  1991 and the relevant
               class of Pool Members  which are parties  thereto shall be deemed
               to have approved each deed of indemnity entered into in favour of
               a Pool  Chairman  where  his  period of  appointment  began on or
               before 1st April, 1993.

5.       PERSONNEL

5.1      Standard of Personnel: In and for the performance of the Services the
         Settlement System Administrator shall engage only persons who are to
         the Settlement System Administrator's knowledge suitably qualified,
         skilled and honest and shall (where appropriate) provide such persons
         with the requisite training for the work which they are to perform.

5.2      Account Manager: The Settlement System Administrator:-

         (a)      shall from time to time, after consultation with the Chief
                  Executive, nominate a person with responsibility for liaison
                  with the Contract Manager regarding the provision of the
                  Services;

          (b)  may also from time to time nominate up to two alternates for that
               person; and

         (c)      shall have the right to remove the Account Manager at any time
                  provided that the Settlement System Administrator shall ensure
                  that there shall at all times be an Account Manager.

         The Settlement System Administrator shall notify the Executive
         Committee forthwith in writing of each nomination and removal of an
         Account Manager and shall procure that the Account Manager shall be
         available to be contacted by the Contract Manager at all reasonable
         times during the provision of the Services.

5.3      Contract Manager: The Executive Committee:-

         (a)      shall from time to time, after consultation with the
                  Settlement System Administrator, nominate a person with
                  responsibility for liaison with the Account Manager regarding
                  the provision of the Services;

          (b)  may also from time to time nominate up to two alternates for that
               person; and

         (c)      shall have the right to remove the Contract Manager at any
                  time provided that the Executive Committee shall ensure that
                  there shall at all times be a Contract Manager.

         The Executive Committee shall notify the Settlement System
         Administrator forthwith in writing of each nomination and removal of a
         Contract Manager and shall procure that the Contract Manager shall be
         available to be contacted by the Account Manager at all reasonable
         times.

5.4      Restriction on recruiting Personnel:

         5.4.1    From 1st April, 1994 until the date falling twelve months (or
                  such other period as the Settlement System Administrator and
                  the Executive Committee may agree) after the Termination Date
                  or, if there is a Post-Termination Period, the last day of the
                  Post-Termination Period:-

                  (a)     ESIS shall not without the prior written consent of
                          the Chief Executive employ, solicit or entice or
                          endeavour to solicit or entice away from the Chief
                          Executive's Office any person who at that time is, or
                          was within the previous six months, an employee or
                          member of staff of the Chief Executive's Office or of
                          another person seconded to the Chief Executive's
                          Office; and

                  (b)     Pool Members shall procure that neither the Chief
                          Executive nor any member of the Chief Executive's
                          Office nor any Committee Member shall without the
                          prior written consent of ESIS employ, solicit or
                          entice or endeavour to solicit or entice away from
                          ESIS any person who at that time is, or was within the
                          previous six months, an employee or member of staff of
                          ESIS.

                  Each undertaking contained in this paragraph 5.4.1 shall be
                  construed as a separate undertaking and if one or more of the
                  undertakings is held to be against the public interest or
                  unlawful or in any way an unlawful restraint of trade, the
                  remaining undertakings shall continue to bind the relevant
                  Party.

         5.4.2    Breach by ESIS of its obligations under paragraph 5.4.1(a)
                  above shall not entitle the Executive Committee to terminate
                  the appointment of ESIS as Settlement System Administrator
                  under this Agreement and breach by a Pool Member of its
                  obligations under paragraph 5.4.1(b) above shall not
                  constitute a breach by a Pool Member of its obligations for
                  the purposes of Section 28, but in each case shall only
                  entitle such other party to claim damages or to bring
                  proceedings for an injunction.

6.       DUTIES AND RESPONSIBILITIES OF THE SETTLEMENT SYSTEM ADMINISTRATOR

          Responsibilities:  Without  prejudice to the generality of the duties,
               responsibilities   and  obligations  of  the  Settlement System
               Administrator  provided  elsewhere in the SSA  Arrangements,  the
               Settlement System Administrator shall:-

          6.1  The Settlement System:  Comply with its obligations under the SSA
               Arrangements  in  respect  of  the  day-to-day  operation  of the
               Settlement System;

          6.2  Back-up arrangements: In accordance with Service Line 7 (Disaster
               Recovery),  maintain  back-up  arrangements  for  the  day-to-day
               operation of the Settlement System;

          6.3  Metering:  Comply  with  its  obligations  under  Part  XV of and
               Schedule 21 to this Agreement;

          6.4  Works  Programmes:  Subject  to the  availability  of  resources,
               co-operate in the preparation, finalisation and implementation of
               all Works  Programmes in respect of which the  Settlement  System
               Administrator is not appointed Works Programme Manager;

          6.5  Recommendations:  At the invitation of the Executive Committee or
               of its  own  initiative,  recommend  to the  Executive  Committee
               changes to the Settlement System and the SSA Arrangements;

          6.6  Records:  In accordance with Service Line 6 (Off-site  Security),
               on the  instruction  of the  Executive  Committee  maintain  such
               records,  data and other information as the Pool Auditor may from
               time to time by notice  in  reasonable  detail  to the  Executive
               Committee  require for the purposes of Part IX of this  Agreement
               provided  that  this  obligation  shall  cease  to  apply  to the
               Settlement  System  Administrator  following its  resignation  or
               removal;

          6.7  Provision of information (1): Subject to any statutory or Licence
               obligations,  provide the Executive  Committee  upon request with
               reports,  data and other  information  concerning  the Settlement
               System (other than information which is exclusively  confidential
               to and  the  property  of the  Settlement  System  Administrator)
               required  by the  Executive  Committee  and which the  Settlement
               System Administrator is required to retain under sub-section 6.6.
               Each of the Parties  agrees to the  release of all such  reports,
               data and other information in the circumstances described in this
               sub-section 6.7;

          6.8  Provision  of  information  (2):  Provide the Pool  Auditor  upon
               request with reports,  data and other information  concerning the
               Settlement  System  required  by the Pool  Auditor  and which the
               Settlement  System  Administrator  is  required  to retain  under
               sub-section 6.6. Each of the Parties agrees to the release of all
               such reports,  data and other  information  in the  circumstances
               described in this sub-section 6.8;

          6.9  Provision of  information  (3):  Provide  each Pool  Member,  the
               Ancillary  Services  Provider and the Grid  Operator upon request
               with a certified copy of such records, data and other information
               concerning  amounts  payable  by  or to  such  Pool  Member,  the
               Ancillary  Services  Provider and the Grid Operator in accordance
               with Service Line 10 (Service to CEO and Pool  Members).  Each of
               the Parties  agrees to the release of all such records,  data and
               other  information  in  the   circumstances   described  in  this
               sub-section 6.9;

          6.10 Pool Rules:  Perform those specific  duties and  responsibilities
               ascribed to it in the Pool Rules;

          6.11 Arrangements  with  the  Grid  Operator  and  Ancillary  Services
               Provider:  Make and maintain  arrangements with the Grid Operator
               and the Ancillary  Services  Provider in  accordance  with Clause
               29.2;

          6.12 Arrangements with the Pool Funds Administrator: Make and maintain
               arrangements with the Pool Funds Administrator in accordance with
               Clause 29.3;

         6.13     Notification of arrangements: Provide, upon request, the
                  Executive Committee with details of its arrangements for the
                  time being in effect with each of the Grid Operator, the
                  Ancillary Services Provider and the Pool Funds Administrator
                  referred to in sub-section 6.11 or (as the case may be) 6.12;

         6.14     Estimates: Without prejudice to its obligations under Section
                  17.8 of Schedule 11, where the Settlement System Administrator
                  is unable for whatever reason to provide the Pool Funds
                  Administrator with the actual information required in respect
                  of each Settlement Day for each Pool Member, the Ancillary
                  Services Provider and the Grid Operator, provide the Pool
                  Funds Administrator in accordance with Service Line 2
                  (Settlement Process) with its best estimates of that
                  information by the same time as it is required to provide the
                  actual information;

         6.15     Advisory obligations:

                  6.15.1  Report to the Executive Committee and/or the Contract
                          Manager on those matters set out or referred to in the
                          Service Lines in the manner and within the timescales
                          prescribed thereby;

                  6.15.2  Report promptly in writing to the Executive 
Committee:-

                          (a)      any problem with the Settlement System or its
                                   then current operation that is putting
                                   pressure on the due and punctual performance
                                   by the Settlement System Administrator of any
                                   Service; and

                          (b)      any problem of which the Settlement System
                                   Administrator is or becomes aware about the
                                   likely future operation of the Settlement
                                   System arising out of the way in which the
                                   Settlement System is then currently being
                                   operated;

         6.16     Quality management system and procedures:

                  6.16.1  Establish and keep under review a quality management
                          system that is designed to enable the Settlement
                          System Administrator to meet the standards set out or
                          referred to in sub-sections 4.1 and 4.2 and under that
                          system prepare and keep under review procedures to
                          meet such standards;

                  6.16.2  Provide the Executive Committee on request with copies
                          of such procedures and notify the Executive Committee
                          of any changes made thereto or, where such changes
                          require contribution or input from all or any of the
                          Parties, any proposed changes thereto; and

          6.16.3 Consider  any  comments or any  proposed  changes on or to such
               procedures  made by or on behalf of the Executive  Committee from
               time to time;

         6.17     Documentation: Maintain up-to-date manuals, specifications and
                  similar documentation for the provision of the Services and
                  provide the Executive Committee on request with copies of such
                  manuals, specifications and similar documentation;

          6.18 Long-term forecasting procedures:  Having regard to its knowledge
               of the  requirements  of the  Executive  Committee  and the  Pool
               Members:-

                  (a)     consult the Contract Manager in respect of the
                          Settlement System Administrator's long term planning
                          for the use and allocation of resource cover;

                  (b)     following consultation with the Contract Manager
                          pursuant to paragraph (a) above, plan for anticipated
                          future requirements of the Executive Committee and
                          Pool Members;

                  (c) maintain internal financial controls to ensure that the
objectives of this Schedule and the Appendix hereto are met; and

                  (d)     provide the Executive Committee as appropriate or on
                          request with a report of the results and/or impact of
                          the matters arising from the consultation referred to
                          in paragraph (a) above;

         6.19     Provision of Hardware:

                  6.19.1  Provide Hardware subject to compliance by the
                          Settlement System Administrator with its obligations
                          under the remainder of this sub-section;

                  6.19.2  Be entitled to change the Hardware provided that:-

          (a)  the Settlement  System  Administrator  has given to the Executive
               Committee  reasonable prior notice of the intention to change the
               Hardware;

          (b)  the Settlement  System  Administrator  has given to the Executive
               Committee  reasonable  details of the proposed  change,  together
               with a timetable for implementation,  at the time notice is given
               under paragraph (a) above;

          (c)  the impact (if any) on the Settlement Software is detailed in the
               notice given under paragraph (a) above and, if there shall be any
               such impact, the proposed change to the Settlement Software shall
               proceed in accordance with the Change Management Policies;

          (d)  any such  change  will not  materially  affect the  operation  or
               function of the Settlement System; and

          (e)  all costs  associated  with any such  change  shall be met by the
               Settlement  System  Administrator  (and shall not be recharged to
               Pool Members);

                  6.19.3  Make changes to the Hardware required by Pool Members,
                          acting through the Executive Committee, provided that
                          the Settlement System Administrator shall notify Pool
                          Members in accordance with the Change Management
                          Policies and appropriate changes to the Service Lines
                          and/or the Menus of Prices shall be agreed in
                          accordance with the Appendix hereto;

          6.20 Performance  Improvement  Programme:  Seek to  identify  and give
               support to  initiatives  which may form the basis of  Performance
               Improvement Programmes;

         6.21     Data input and validation:

                  6.21.1 Promptly and properly input such data and other
information as it may receive pursuant to the terms of this Agreement;

                  6.21.2  Review and validate data and other information in
                          accordance with the Agreed Procedures to establish the
                          completeness thereof and to identify any
                          inconsistencies therein.

7.       PERFORMANCE OF DUTIES

7.1      Independent contractor: In carrying out its duties and responsibilities
         under the SSA Arrangements, the Settlement System Administrator shall
         act as an independent contractor and (unless expressly authorised to
         the contrary) shall neither act nor hold itself out nor be held out as
         acting as agent for any of the other Parties.

7.2      Delegation:

         7.2.1    Subject as provided in paragraphs 7.2.2 and 7.2.3, the
                  Settlement System Administrator may delegate the performance
                  of all or any of its duties and responsibilities under the SSA
                  Arrangements to agents or contractors.

         7.2.2    The Settlement System Administrator shall be entitled to
                  delegate the performance of all or any of its duties and
                  responsibilities under the SSA Arrangements provided that they
                  are not duties or responsibilities which are in respect of any
                  significant matter (unless the prior written approval of the
                  Executive Committee under paragraph 7.2.3 has been given).

         7.2.3    In giving any such approval as is referred to in paragraph
                  7.2.2 the Executive Committee shall specify the particular
                  duties and responsibilities which may be delegated and to whom
                  and for what period. On receipt of such approval the
                  Settlement System Administrator may delegate its duties and
                  responsibilities only to the extent of the terms of such
                  approval.

         7.2.4    As between the Settlement System Administrator and the other
                  Parties, no delegation pursuant to this sub-section 7.2 or
                  pursuant to Clause 60.15 nor the terms or conditions of any
                  contract pursuant to which any such delegation is effected
                  shall relieve the Settlement System Administrator of any of
                  its duties or responsibilities under the SSA Arrangements. The
                  Settlement System Administrator shall at all times properly
                  supervise the performance of all such delegates.

         7.2.5For the avoidance of doubt, the term "delegation" as used in this
               sub-section 7.2 includes sub-contracting.

8.       RESPONSIBILITY FOR THE SSA SYSTEM

          8.1  The SSA System:  The Settlement System  Administrator  shall have
               control of the running and development of the SSA System, subject
               to the restrictions set out in this Section 8.

8.2      Developed software:

         (a)      In relation to any Software developed by the Settlement System
                  Administrator, the Settlement System Administrator shall
                  procure that all intellectual property rights shall vest in
                  the Settlement System Administrator absolutely. In the case of
                  Software commissioned from third parties or where rights in
                  Software are purchased, the Settlement System Administrator
                  shall procure that all intellectual property rights are
                  transferred to the Settlement System Administrator. Where the
                  Settlement System Administrator customises, or commissions the
                  customisation of, any Software licensed from any third
                  parties, the Settlement System Administrator shall procure
                  that all intellectual property rights shall vest in the
                  Settlement System Administrator.

         (b)      Pool Members confirm and agree (i) that they have no objection
                  to the intellectual property rights referred to in paragraph
                  (a) above being held in this way and (ii) that the Settlement
                  System Administrator shall have the right of use of such
                  intellectual property rights as an absolute owner.

8.3      Licensed software: In respect of any Software not developed internally,
         purchased or commissioned, the Settlement System Administrator shall
         ensure that it has a fully transferable licence to use the Software,
         together with (unless the Executive Committee otherwise notifies the
         Settlement System Administrator) suitable escrow arrangements for any
         Software for which the source code and full documentation has not been
         provided or which is not freely available. No further fees shall be
         payable in respect of any transfer of the licence to any nominated
         representative of the Executive Committee under Section 21, except to
         the extent that the licensor may continue to charge the same licence
         fees to the transferee.

8.4      Third party maintenance: Except in circumstances beyond the Settlement
         System Administrator's control, the SSA System shall be fully
         maintained, by third party maintenance organisations to the extent that
         the Software is not developed internally, and the SSA System shall be
         fully documented so that it can be operated by any successor to the
         Settlement System Administrator. The Settlement System Administrator
         shall promptly notify the Executive Committee upon the Settlement
         System Administrator becoming aware that the SSA System will cease to
         be maintained by such a third party maintenance organisation.

8.5      SSA System changes: The Settlement System Administrator shall be free
         to make any changes to the SSA System, except to the extent that (a)
         the modification necessitates any change to the Developed Application
         Software or Licensed Application Software, or (b) it detrimentally
         affects the operation of the Settlement System.

8.6      Maintenance of the SSA System Software: Without prejudice to Section
         10, in respect of any Software related to the SSA System which is
         written, commissioned or customised by the Settlement System
         Administrator, the Settlement System Administrator shall maintain
         support for, and where necessary fix any bugs in, such Software from
         the Termination Date until the expiry of the Post-Termination Period,
         if any, and the costs of maintaining that support and fixing the bugs
         shall be as agreed between the Settlement System Administrator and the
         Contract Manager and shall be recovered in accordance with the Charging
         Procedure.

8.7      Notification of commercial use: The Settlement System Administrator
         shall promptly notify the Executive Committee if it uses the Software
         for a purpose other than that envisaged under the SSA Arrangements,
         including its sale, licence, development or otherwise being made
         available howsoever to any other person with such details as the
         Executive Committee may reasonably request.

9.       SOFTWARE

9.1      Definitions: In this Section 9:-

         "Developed Application Software" means those computer programs and
         codes described in the Contract Management Rules from time to time and
         all copyright and other intellectual property rights therein and all
         documents and materials forming part thereof or relating thereto; and

         "Licensed Application Software" means those computer programs and codes
described in the Contract Management Rules from time to time.

9.2      Representations and Warranties:

         9.2.1    The Settlement System Administrator represents, warrants and
                  undertakes to the other Parties as a continuing obligation and
                  the other Parties acknowledge that:-

                  (a)     the Settlement System Administrator has, and for so
                          long as it remains the Settlement System Administrator
                          will have, unencumbered and freely transferable title
                          to Developed Application Software;

                  (b)     the Licensed Application Software is, and for so long
                          as the Settlement System Administrator remains as such
                          will remain, the subject of a non-exclusive licence in
                          favour of the Settlement System Administrator
                          transferable to its successor Settlement System
                          Administrator; and

                 (c)  the Settlement System  Administrator  undertakes to use
                         all reasonable endeavours to:-

                          (i)      assign or novate, or procure the assignment
                                   or novation, of any licence for Licensed
                                   Application Software to the successor
                                   Settlement System Administrator as soon as is
                                   reasonably practicable and to obtain any
                                   consent necessary for that purpose; or

                          (ii)     procure the grant by the relevant licensor to
                                   the successor Settlement System Administrator
                                   of a licence in respect of Licensed
                                   Application Software as soon as is reasonably
                                   practicable,

                          so that the licence held by the successor Settlement
                          System Administrator is on terms no less favourable to
                          it than the terms of the licence held by the
                          Settlement System Administrator and without payment of
                          a fee by Pool Members or the successor Settlement
                          System Administrator (except to the extent that the
                          licensor may continue to charge the same licence fee
                          to the transferee).

         9.2.2    Pool Members confirm and agree (i) that they have no objection
                  to the intellectual property rights referred to in paragraph
                  8.2(a) above being held in this way and (ii) that, as between
                  the Settlement System Administrator and Pool Members, the
                  Settlement System Administrator shall have the right of use of
                  such intellectual property rights as an absolute owner.

10.      MAINTENANCE ARRANGEMENTS

         Maintenance arrangements: The Settlement System Administrator shall:-

         (a)      ensure that at all times it has in full force and effect
                  proper arrangements for the maintenance of (and the prompt
                  rectification of defects in) the Hardware and Software
                  provided that in relation to Developed Application Software
                  such maintenance shall not be required to extend beyond the
                  implementation of a corrective procedure or a remedy to such
                  Software to allow for the continued running of such Software
                  in accordance with its specification;

         (b)      upon reasonable request of the Executive Committee, confirm to
                  the Executive Committee in writing the existence of such
                  maintenance arrangements in respect of the Hardware and the
                  SSA System; and

         (c)      upon reasonable request of the Executive Committee, supply
                  evidence reasonably satisfactory to the Executive Committee of
                  the existence and nature of such maintenance arrangements in
                  respect of the Developed Application Software and the Licensed
                  Application Software.

11.      AUDIT ACCESS

         Access:

         11.1     The Settlement System Administrator shall:-

                  (a)     permit the Pool Auditor unrestricted access to the
                          Settlement System, the Hardware and the Software and
                          all data used, information held and records kept by
                          the Settlement System Administrator or its agent or
                          sub-contractors in operating the Settlement System;

                  (b)     use reasonable endeavours to procure that each Second
                          Tier Agent, each Second Tier Agent's agent (if any)
                          and each Second Tier Agent's sub-contractor (if any)
                          permits the Pool Auditor unrestricted access to the
                          Second Tier Hardware and Second Tier Software, to its
                          agency or sub-contracting operations and to all data
                          used, information held and records kept by each such
                          Second Tier Agent, Second Tier Agent's agent and/or
                          Second Tier Agent's sub-contractor;

                  (c)     make available members of its staff to explain the
                          operation of the Settlement System and such other
                          issues as the Pool Auditor considers relevant; and

                  (d)     use reasonable endeavours to procure that each Second
                          Tier Agent, each Second Tier Agent's agent (if any)
                          and each Second Tier Agent's sub-contractor (if any)
                          makes available members of its staff to explain its
                          operation of its agency or sub-contracting operations,
                          the Second Tier Hardware and the Second Tier Software
                          and such other issues as the Pool Auditor considers
                          relevant.

         11.2     ESIS in its capacity as Settlement System Administrator shall
                  procure that, in addition to ESIS's auditor auditing the
                  annual accounts of ESIS for a particular financial year, that
                  auditor shall report in writing to the Executive Committee the
                  Gross Margin for that financial year and shall deliver that
                  report to the Executive Committee no later than the date upon
                  which such annual accounts are laid before ESIS in general
                  meeting or otherwise published or issued (if earlier).

         11.3     The Settlement System Administrator shall permit an auditor
                  appointed by the Executive Committee access to the operations
                  and business of the Settlement System Administrator to confirm
                  that the quality management procedures and billing practices
                  applied by the Settlement System Administrator under the terms
                  of the SSA Arrangements are being complied with. The terms of
                  reference for each such audit will be agreed by the auditor
                  with ESIS, such agreement not to be unreasonably withheld.

12.      INSURANCE RESPONSIBILITIES

12.1     Insurance requirements: Subject to the availability in the insurance
         market of such insurances, the Settlement System Administrator shall
         effect and maintain in full force and effect with first class insurers
         the following insurances:-

         12.1.1   insurance with respect to (a) physical loss or damage to each
                  of the Hardware (including Second Tier Hardware) and Software
                  (including Second Tier Software) and (b) corruption of the
                  Software (including Second Tier Software) and related computer
                  data, in each case in an amount equivalent to its replacement
                  cost, except, with effect from 1st April, 1994, insofar as
                  concerns any Second Tier Hardware and Second Tier Software
                  owned and/or operated by any particular Second Tier Agent
                  where such Second Tier Agent has agreed with the Settlement
                  System Administrator substantially to the effect, inter alia,
                  that:-

                  (a)     the Second Tier Agent will effect and maintain in full
                          force and effect with first class insurers insurance
                          with respect to (i) physical loss or damage to each of
                          such Second Tier Hardware and Second Tier Software and
                          (ii) corruption of such Second Tier Software and
                          related computer data, in each case in an amount
                          equivalent to its correction cost;

                  (b)     the Second Tier Agent shall promptly on request
                          provide to the Settlement System Administrator an
                          insurance broker's certificate having a form and
                          content as specified in sub-section 12.3 and evidence
                          that the Second Tier Agent has paid the relevant
                          premiums; and

                  (c)     if the Second Tier Agent has not so insured and paid
                          the relevant premiums the Settlement System
                          Administrator shall, on behalf of the Second Tier
                          Agent, take out such insurance and pay such premiums
                          and recover the cost of the same from the Second Tier
                          Agent; and

                  provided that, in the case of (c) above, where:-

                    (i)  the Settlement  System  Administrator is aware that the
                         Second Tier Agent has not so insured in accordance with
                         (a) above; and

                    (ii) a period of fourteen days since the  Settlement  System
                         Administrator  first  became aware that the Second Tier
                         Agent had not insured in accordance  with (a) above has
                         elapsed,  during which period the Second Tier Agent has
                         not so insured in accordance with (a) above,

                  the Settlement System Administrator shall so take out such
                  insurance in the name of such Second Tier Agent unless, after
                  having sought, to the extent that it is able, such information
                  from the Second Tier Agent as is necessary for the purposes of
                  obtaining such insurance, it has failed to obtain such
                  information; and

         12.1.2   professional indemnity insurance as Settlement System
                  Administrator in an amount of not less than (pound)20,000,000
                  any one claim and (pound)20,000,000 all claims in any one year
                  (or such greater amount as may from time to time be reasonably
                  required by the Executive Committee after consultation with
                  the Settlement System Administrator or such lesser amount as
                  may from time to time be agreed between the Executive
                  Committee and the Settlement System Administrator).

     12.2 Application of proceeds: The Settlement System Administrator shall use
          all reasonable endeavours:-

     (a)  in the case of insurance  referred to above where it is the insured to
          make and collect claims promptly; and

     (b)  in the case of  insurance  where its Second Tier Agent is the insured,
          to procure  that such  Second  Tier Agent  makes and  collects  claims
          promptly,

         and shall apply and, as appropriate, shall procure that its Second Tier
         Agent applies, all moneys so received by it in respect of the insurance
         referred to in this Section 12 in or towards making good the loss and
         fully repairing the damage or (as the case may be) satisfying the
         relevant liability in respect of which such moneys were receivable or
         reimbursing the cost of the same.

12.3     Information requirements: The Settlement System Administrator shall
         promptly supply the Executive Committee upon request from time to time
         with an insurance broker's certificate in form and content reasonably
         satisfactory to the Executive Committee confirming that cover has been
         effected, whether by it or its Second Tier Agent, in respect of the
         insurance referred to in sub-section 12.1 and giving reasonable details
         of the terms and conditions of such insurance.

12.4     Default: If the Settlement System Administrator shall default in the
         performance of its obligations under this Section 12, the Executive
         Committee shall have the right (but shall not be obliged) to make the
         appropriate insurance arrangements and shall have the right to recover
         from the Settlement System Administrator any costs incurred (including
         any handling fee).

12.5     Change in insurance requirements:

         12.5.1   If at the request of the Executive Committee the sums insured
                  under the Settlement System Administrator's professional
                  indemnity insurance are increased, the amount of any resultant
                  increase in the insurance premium shall be recovered by the
                  Settlement System Administrator (assuming that it has borne
                  the same) in accordance with the Charging Procedure.

          12.5.2 If at the request of the Executive  Committee the amount of the
               excess or deductible under the Settlement System  Administrator's
               professional  indemnity  insurance  is  increased  and there is a
               resultant  decrease in the insurance premium payable,  the amount
               of such decrease  shall be reimbursed  by the  Settlement  System
               Administrator  to  Pool  Members  under  the  Charging  Procedure
               (assuming  that Pool Members  have  already  paid the  Settlement
               System  Administrator on the basis of a higher premium)  provided
               that  in the  event  of a claim  against  the  Settlement  System
               Administrator  in  respect of which a payment is or (but for such
               increase in the excess or deductible) would have been made to the
               Settlement System Administrator under its professional  indemnity
               insurance  Pool Members  shall be required  themselves to bear in
               aggregate  the first  part of any such  claim up to the amount of
               such increased  excess or deductible and in  satisfaction of that
               obligation  shall  reimburse  the same to the  Settlement  System
               Administrator in accordance with the Charging Procedure.

         12.5.3   If in any other case the sums insured under the Settlement
                  System Administrator's professional indemnity insurance are
                  changed from the amounts referred to in paragraph 12.5.1 or
                  the amount of the excess or deductible thereunder is changed
                  from the amount referred to in paragraph 12.5.2, any resultant
                  increase in the insurance premium payable shall be for the
                  Settlement System Administrator's own account and shall not be
                  recoverable by it from the other Parties.

13.      TERMINATION OF THE APPOINTMENT OF ESIS

          13.1 Termination:   The  appointment  of  ESIS  as  Settlement  System
               Administrator may be terminated either by the resignation of ESIS
               in  accordance  with  Section  14 or by the  removal  of  ESIS in
               accordance with Section 15, 16 or 17.

          13.2 Termination  pursuant  to  Clause  67.4:  If  this  Agreement  is
               terminated pursuant to Clause 67.4 then:-

         (a)      if the effective date of termination of this Agreement is
                  after 31st March, 1999, the Termination Date shall be deemed
                  for the purposes of allocating costs between ESIS and Pool
                  Members to be 31st March, 1999 and the provisions of Section
                  23 shall apply; and

         (b)      if the effective date of termination of this Agreement is on
                  or before 31st March, 1999, the Termination Date shall be
                  deemed for the purposes of allocating costs between ESIS and
                  Pool Members to be 31st March, 1999 and the provisions of
                  Section 24 shall apply.

14.      RESIGNATION BY ESIS

         Resignation procedure: After consultation between the Settlement System
         Administrator and the Executive Committee and the Director having given
         his prior written consent ESIS may give 12 months' notice in writing
         (the "Resignation Notice") to the Executive Committee (which shall
         forthwith notify all Pool Members) and the Director of its intention to
         resign as Settlement System Administrator on a date (in this Section
         14, the "Termination Date") not earlier than 1st April, 1999 and,
         subject to Section 20, the appointment of ESIS as Settlement System
         Administrator shall terminate on the Termination Date.

15.      REMOVAL OF ESIS AFTER 31ST MARCH, 1999

         Removal procedure: After consultation between the Settlement System
         Administrator and the Executive Committee ESIS may be removed as
         Settlement System Administrator at any time after 31st March, 1999
         where:-

         (a) a resolution of the Pool Members in general meeting resolving to
remove ESIS as Settlement System Administrator has been passed by either:-

                  (i)     Pool Members holding not less than 80 per cent. of the
                          Total Votes of Pool Members who are entitled to vote
                          in person or by proxy at a general meeting of Pool
                          Members or deemed effective pursuant to Clause 13.5;
                          or

                  (ii)    Pool Members holding less than 80 per cent. of the
                          Total Votes of Pool Members who are entitled to vote
                          in person or by proxy at a general meeting of Pool
                          Members, but only where there is no more than one
                          dissentient Pool Member;

         (b) the Director has given his prior written consent in the light of
the resolution passed in accordance with paragraph (a) above; and

         (c)      the Executive Committee has given the Settlement System
                  Administrator after such resolution has been passed or deemed
                  effective (which the Executive Committee shall promptly do) 12
                  months' notice in writing (in this Section 15, the "Removal
                  Notice") of such removal (or such longer period of notice as
                  the Director may determine in response to the application made
                  to him for the purposes of paragraph (b) above) to take effect
                  on the date being no earlier than 1st April, 1999 specified in
                  the Removal Notice (in this Section 15, the "Termination
                  Date") and, subject to Section 20, the appointment of ESIS as
                  Settlement System Administrator shall terminate on the
                  Termination Date.

16.      REMOVAL OF ESIS ON OR BEFORE 31ST MARCH, 1999

         Removal procedure: After consultation between the Settlement System
         Administrator and the Executive Committee ESIS may be removed as
         Settlement System Administrator at any time on or before 31st March,
         1999 where:-

         (a) a resolution of the Pool Members in general meeting resolving to
remove ESIS as Settlement System Administrator has been passed by either:-

                  (i)     Pool Members holding not less than 80 per cent. of the
                          Total Votes of Pool Members who are entitled to vote
                          in person or by proxy at a general meeting of Pool
                          Members or deemed effective pursuant to Clause 13.5;
                          or

                  (ii)    Pool Members holding less than 80 per cent. of the
                          Total Votes of Pool Members who are entitled to vote
                          in person or by proxy at a general meeting of Pool
                          Members, but only where there is no more than one
                          dissentient Pool Member;

         (b) the Director has given his prior written consent in the light of
the resolution passed in accordance with sub-paragraph (a) above; and

         (c)      the Executive Committee has given the Settlement System
                  Administrator after such resolution has been passed or deemed
                  effective (which the Executive Committee shall promptly do) 12
                  months' notice in writing (in this Section 16, the "Removal
                  Notice") of such removal (or such longer period of notice as
                  the Director may determine in response to the application made
                  to him for the purposes of paragraph (b) above) to take effect
                  on the date falling before 1st April, 1999 specified in the
                  Removal Notice (in this Section 16, the "Termination Date")
                  and, subject to Section 20, the appointment of ESIS as
                  Settlement System Administrator shall terminate on the
                  Termination Date.

17.      REMOVAL OF ESIS

17.1     Breach of obligations capable of remedy: If the Settlement System
         Administrator fails in any persistent, material respect or in any
         single, major respect to perform or comply with any of the obligations
         expressed to be assumed by it under the SSA Arrangements and such
         failure, in the reasonable opinion of the Executive Committee, is
         capable of remedy, the Executive Committee shall have the right to give
         notice in writing (the "Remediable Removal Notice") to the Settlement
         System Administrator giving details of the relevant failure and
         requiring that such failure be remedied within 30 days (or such longer
         period as may be necessary but in any event within 90 days or any
         longer period as may be reasonable and agreed between the Settlement
         System Administrator and the Executive Committee) from the date of
         receipt by the Settlement System Administrator of the Remediable
         Removal Notice and, if a longer period is reasonable, that within 30
         days from the said date of receipt the Settlement System Administrator
         agree a timetable with the Executive Committee for the remedy of such
         failure (such agreement not to be unreasonably withheld).

17.2     Breach of obligations incapable of remedy: If the Settlement System
         Administrator fails in any persistent, material respect or in any
         single, major respect to perform or comply with any of the obligations
         expressed to be assumed by it under the SSA Arrangements and such
         failure, in the reasonable opinion of the Executive Committee, is
         incapable of remedy, the Executive Committee shall have the right to
         give notice in writing (in this sub-section 17.2, the "Irremediable
         Removal Notice") to the Settlement System Administrator giving details
         of the relevant failure and stating that, in the reasonable opinion of
         the Executive Committee, the Settlement System Administrator is in
         breach of the terms of the SSA Arrangements and such breach is
         incapable of remedy.

17.3     Insolvency: If the Settlement System Administrator:-

         (a)      is unable to pay its debts (within the meaning of section
                  123(1) or (2) of the Insolvency Act 1986, but subject as
                  hereinafter provided in this sub-section 17.3) or if any
                  voluntary agreement is proposed in relation to it under
                  section 1 of that Act or if the Settlement System
                  Administrator enters into any scheme of arrangement (other
                  than for the purpose of reconstruction or amalgamation upon
                  terms and within such period as may previously have been
                  approved in writing by the Executive Committee); or

          (b)  has a receiver (which  expression shall include an administrative
               receiver  within the meaning of section 29 of the  Insolvency Act
               1986)  of the  whole  or any  material  part  of  its  assets  or
               undertaking appointed; or

          (c)  has an administration order under section 8 of the Insolvency Act
               1986 made in relation to it; or

          (d)  passes any  resolution  for  winding-up  other than a  resolution
               previously approved in writing by the Executive Committee; or

          (e)  becomes subject to an order by the High Court for winding-up,

         the Executive Committee shall have the right to give notice in writing
         (in this sub-section 17.3, the "Irremediable Removal Notice") to the
         Settlement System Administrator referring to such event.

         For the purposes of paragraph (a) above section 123(1)(a) of the
         Insolvency Act 1986 shall have effect as if for "(pound)750" there were
         substituted "(pound)250,000" and, further, the Settlement System
         Administrator shall not be deemed to be unable to pay its debts for the
         purposes of paragraph (a) above if any such demand as is mentioned in
         the said section is being contested in good faith by the Settlement
         System Administrator with recourse to all appropriate measures and
         procedures.

17.4     Change of Status: If ESIS ceases to be a wholly-owned subsidiary of NGC
         then, subject to the prior written consent of the Director having been
         obtained, the Executive Committee shall have the right to give notice
         in writing (in this sub-section 17.4, the "Irremediable Removal
         Notice") to the Settlement System Administrator referring to such
         event.

17.5     Removal Procedure: Subject to:-

         (a)      the Executive Committee having given the Settlement System
                  Administrator a Remediable Removal Notice, and either the
                  Settlement System Administrator having been unwilling or
                  unable to remedy the failure within 30 days from the date of
                  receipt of the Remediable Removal Notice (or such longer
                  period as may be permitted under sub-section 17.1) or, as the
                  case may be, within the period provided in the timetable
                  agreed with the Executive Committee for the remedy of such
                  failure; or

          (b)  the  Executive  Committee  having  given  the  Settlement  System
               Administrator an Irremediable Removal Notice,

         ESIS may be removed as Settlement System Administrator where:-

         (i) a resolution of the Pool Members in general meeting resolving to
remove ESIS as Settlement System Administrator has been passed by either:-

                  (a)     Pool Members holding not less than 80 per cent. of the
                          Total Votes of Pool Members who are entitled to vote
                          in person or by proxy at a general meeting of Pool
                          Members or deemed effective pursuant to Clause 13.5;
                          or

                  (b)     Pool Members holding less than 80 per cent. of the
                          Total Votes of Pool Members who are entitled to vote
                          in person or by proxy at a general meeting of Pool
                          Members, but only where there is no more than one
                          dissentient Pool Member;

         (ii) the Director has given his prior written consent in the light of
the resolution passed in accordance with sub-paragraph (i) above; and

         (iii)    the Executive Committee has given the Settlement System
                  Administrator after such resolution has been passed or deemed
                  effective (which the Executive Committee shall promptly do) 12
                  months' notice in writing (in this Section 17, the "Removal
                  Notice") of such removal to take effect on the date specified
                  in the Removal Notice (in this Section 17, the "Termination
                  Date") and, subject to Section 20, the appointment of ESIS as
                  Settlement System Administrator shall terminate on the
                  Termination Date.

18.      POWERS OF EXECUTIVE COMMITTEE ON RESIGNATION AND REMOVAL

         Executive Committee Powers: At any time and from time to time on or
         after a Resignation Notice or a Removal Notice has been given by or on
         behalf of the Executive Committee to the Settlement System
         Administrator, the Executive Committee shall have the right:-

         (a)      subject to all security, safety and operational constraints of
                  the Settlement System Administrator current at the time the
                  Resignation Notice or (as the case may be) the Removal Notice
                  is given, to enter (and any third party reasonably nominated
                  by the Executive Committee shall have the right to enter) upon
                  reasonable notice any premises where the Settlement System
                  Administrator performs any of its functions relating to the
                  Settlement System to inspect any aspect of the Settlement
                  System, to ensure maintenance of service levels and to
                  facilitate the transfer of service, responsibilities and
                  assets pursuant to Section 21; and

         (b)      on such reasonable basis as may be agreed with the Settlement
                  System Administrator (such agreement not to be unreasonably
                  withheld), to communicate with and consult such of the
                  Settlement System Administrator's staff as are available as
                  the Executive Committee reasonably considers to be essential
                  to the Settlement System for a period up to 12 months
                  following the Termination Date.

19.      APPOINTMENT OF SUCCESSOR SETTLEMENT SYSTEM ADMINISTRATOR

          19.1 Approval of the Director:  The Parties  undertake with each other
               that  no  successor  Settlement  System  Administrator  shall  be
               appointed  without the written  approval  of the  Director  first
               having been obtained.

19.2     Discharge: With effect from the Termination Date ESIS in its capacity
         as Settlement System Administrator shall (save as provided in
         sub-sections 5.4, 8.6, 12.2, 20.2 and Section 21 and save as regards
         any rights and liabilities accrued as at the date of its retirement or
         removal) be discharged from any further obligation and shall have no
         further rights under the SSA Arrangements but shall remain entitled to
         the benefit of the provisions of sub-sections 4.3 to 4.9 (inclusive)
         and any other provision of this Agreement providing for an indemnity or
         the payment of other costs or charges in favour of the Settlement
         System Administrator, and its successor and (save as provided in this
         sub-section 19.2) each of the other Parties shall have the same rights
         and obligations amongst themselves as they would have had if such
         successor had been a party to this Agreement in place of ESIS as
         Settlement System Administrator.

20.      CONTINUATION OF SERVICES

20.1     Continuation of Services: Subject to sub-section 20.5, the Executive
         Committee shall have the right to postpone the Termination Date beyond
         its original date on a maximum of four occasions and, on each occasion,
         for a period of three months (each an "Extension Period") and ESIS
         agrees to continue to act as Settlement System Administrator for the
         duration of each Extension Period. The Executive Committee shall
         exercise such right by written notice to the Settlement System
         Administrator specifying the duration of each Extension Period (each an
         "Extension Notice"), and the Termination Date shall thereupon be
         postponed to the last day of the then proposed Extension Period.

20.2     Post-Termination Services: The Contract Manager may, by placing an
         Order, request the Settlement System Administrator to provide such
         training and support services as are set out in the Menu of Consultancy
         Services Prices and the Menu of Development Services Prices (each as
         defined in the Appendix hereto) as the Executive Committee may
         reasonably require for the Post-Termination Period. Any such Order
         shall specify the length of time for which such services are required.
         Subject to sub-section 20.4, the Settlement System Administrator shall
         be entitled to charge for such services in accordance with the Menu of
         Prices current immediately prior to the Termination Date (subject to
         indexation in accordance with the terms of the Appendix hereto) but
         shall only be required to provide such services to the extent that the
         resources are at the time employed by ESIS or were formerly employed by
         ESIS and are at the time employed within the NGC group of companies.

          20.3 Extension  Period Charges:  The Settlement  System  Administrator
               shall have the right to charge for Services  rendered  during the
               Extension  Period in  accordance  with Section 1 of Part H of the
               Appendix hereto.

20.4     Post-Termination Period Charges: The Settlement System Administrator
         shall charge only a nominal sum (being not more than (pound)100 in the
         aggregate) for such training and support services rendered in
         accordance with sub-section 20.2 where the Termination Date is
         referable to a Resignation Notice given by ESIS pursuant to Section 14
         or a Removal Notice given by the Executive Committee pursuant to
         Section 17.

20.5     Two year limit: Notwithstanding any other provision of this Agreement,
         the Executive Committee shall not be entitled to require ESIS to remain
         appointed as Settlement System Administrator after the date falling 24
         months after the date on which:-

          (a)  the Settlement System Administrator gives the Executive Committee
               a Resignation Notice; or (as the case may be)

          (b)  the Executive Committee gives the Settlement System Administrator
               a Removal Notice.

20.6     Full force and effect: All the provisions of this Schedule and the
         Appendix hereto shall remain in full force and effect for the duration
         of the Extension Period (if any) and the Post-Termination Period (if
         any) to the extent necessary to give effect to the terms of this
         Section 20.

21.      TRANSFER OF SERVICES, RESPONSIBILITIES AND ASSETS

          21.1 Transfer  of  services,   responsibilities  and  assets:  Upon  a
               successor  Settlement System  Administrator being appointed under
               Section 19 and accepting such appointment ESIS in its capacity as
               outgoing Settlement System Administrator shall:-

         (a)      grant to a nominee of the Pool Members (who may be the
                  successor Settlement System Administrator) an unrestricted,
                  non-exclusive, perpetual and transferable licence of all
                  Software, all related documentation and other similar
                  intellectual property belonging to the outgoing Settlement
                  System Administrator free of charge, to use, copy, adapt and
                  translate such Software and other property for any purpose
                  related to the operation of the Settlement System;

         (b)      use all reasonable endeavours to novate, or procure the
                  novation of, any licence or other agreement to use and/or
                  maintain the Software to such successor;

         (c)      transfer to such successor all Hardware belonging to the
                  outgoing Settlement System Administrator and essential to such
                  successor to carry out such successor's duties and
                  responsibilities under the SSA Arrangements and which is not
                  otherwise readily obtainable by such successor;

         (d)      make over to such successor copies of all such records,
                  manuals and data and other information not referred to in
                  paragraph 21.1(a) and in the ownership or under the control of
                  the outgoing Settlement System Administrator and relating to
                  the operation, and necessary for the proper functioning of the
                  Settlement System; and

         (e)      without prejudice to the foregoing provisions of this Section
                  21, transfer or otherwise make available to such successor all
                  assets (excluding freehold and leasehold property), equipment,
                  facilities, rights, know-how and transitional assistance which
                  it possesses and which is necessary for such successor to have
                  to operate the Settlement System in accordance with the SSA
                  Arrangements and which is not otherwise readily obtainable by
                  such successor,

         in each case on such reasonable terms (other than as to consideration)
         as may be agreed between ESIS, such successor and the Executive
         Committee (and, in default of agreement, the dispute shall be referred
         to arbitration in accordance with Clause 83) and in consideration of
         the payment of such sums as are referred to in sub-section 21.2. ESIS
         further agrees, in consideration of the payment of such sums as are
         referred to in sub-section 21.2, to co-operate with any such successor
         and the Executive Committee so that the transfer of duties, services,
         responsibilities, assets and know-how to such successor is carried out
         causing as little disruption to the operation of the Settlement System
         and inconvenience to the Parties as is practical in all the
         circumstances.

21.2     Asset Transfer Costs:

         21.2.1   The consideration referred to in sub-section 21.1 is:-

                  (a)     in respect of:-

                          (i)      the right to use all Software, related
                                   documentation and other similar intellectual
                                   property referred to in paragraph 21.1(a), a
                                   peppercorn rental;

                          (ii) all Hardware referred to in paragraph 21.1(c),
the fair market value of the same as at the date of transfer; and

                          (iii) the copies referred to in paragraph 21.1(d), the
cost to the outgoing Settlement System Administrator of making such copies;

                  (b)     in respect of:-

                          (i)      charges to Pool Members which the Executive
                                   Committee has expressly requested ESIS in its
                                   capacity as Settlement System Administrator
                                   to defer and the Deferred Settlement Project
                                   Expenditure, the principal amount deferred
                                   and any interest due and outstanding on that
                                   principal amount and all other amounts
                                   payable in discharging any financing
                                   arrangements undertaken in relation to such
                                   deferred expenditure provided that in the
                                   case of Deferred Settlement Project
                                   Expenditure the consideration shall be the
                                   net book value of the Software at that date;
                                   and

                          (ii)     the co-operation referred to in the last
                                   sentence of sub-section 21.1 and such other
                                   matters as are within sub-section 21.1 (other
                                   than those in paragraph 21.1(b) for which
                                   there shall be no charge made) but not
                                   paragraphs (a) or (b)(i) or (ii) above, a
                                   nominal amount only in respect of the
                                   co-operation (with no additional charge for
                                   matters such as management time expended) and
                                   otherwise at fair market value.

         21.2.2   Any payment made by all or any of the Pool Members to ESIS in
                  its capacity as outgoing Settlement System Administrator under
                  this Section 21 shall be without prejudice to any rights and
                  remedies which the Pool Members (or any of them) may have
                  against ESIS as Settlement System Administrator arising under
                  the SSA Arrangements.

21.3     Transition services: During the period from the date of the Removal
         Notice or, as the case may be, the Resignation Notice to the
         Termination Date or, as the case may be, the last day of the
         Post-Termination Period, the Contract Manager may give the outgoing
         Settlement System Administrator an Order requesting the outgoing
         Settlement System Administrator to:-

          (a)  provide training and systems support for the successor Settlement
               System Administrator;

          (b)  provide  parallel  running with the successor  Settlement  System
               Administrator;

          (c)  move,  relocate or hand over to the successor  Settlement  System
               Administrator the property it is required to transfer pursuant to
               paragraphs 21.1(a) to 21.1(e) (inclusive);

          (d)  supply  to  the   successor   Settlement   System   Administrator
               procedural  or practice  documentation  not  already  recorded in
               writing; and

          (e)  provide employees to attend upon the successor  Settlement System
               Administrator  for  all or any of  the  purposes  referred  to in
               paragraphs (a), (b) or (c) above.

21.4 Disputes:  Any dispute  arising under or in connection with this Section 21
     shall be referred to arbitration in accordance with Clause 83.

22.      ALLOCATION OF COSTS ON RESIGNATION

         Allocation of costs on resignation: Subject to Section 28(b), if the
         appointment of ESIS as Settlement System Administrator shall be
         terminated by the resignation of ESIS in accordance with Section 14:-

(a)  the Pool Members shall reimburse ESIS the Pool Agreed Liabilities; and

(b)  ESIS shall be  responsible  for,  and shall not have  recourse  to any Pool
     Member for all or any part of:-

     (i)  the  Transition  Costs (and shall refund to Pool Members in accordance
          with sub-section 2.7 of Part J of the Appendix hereto any sums already
          received by ESIS on that account); and

     (ii) the Outstanding Liabilities; and

         (c)      the liability of Pool Members for the payment of charges for
                  the provision of Services up to the Termination Date and
                  during the Post-Termination Period shall be as set out
                  elsewhere in this Schedule and the Appendix hereto.

23.      ALLOCATION OF COSTS ON REMOVAL AFTER 31ST MARCH, 1999

         Allocation of costs on removal: Subject to Section 28(b), if the
         appointment of ESIS as Settlement System Administrator shall be
         terminated by the removal of ESIS in accordance with Section 15:-

               (a)  the Pool  Members  shall  reimburse  ESIS  the  Pool  Agreed
                    Liabilities;

               (b)  ESIS shall be  responsible  for, and shall not have recourse
                    to any Pool  Member for all or any part of, the  Outstanding
                    Liabilities; and

               (c)  the liability of Pool Members for the payment of charges for
                    the  provision  of Services up to the  Termination  Date and
                    during  the  Post-Termination  Period  shall  be as set  out
                    elsewhere in this Schedule and the Appendix hereto.

24.      ALLOCATION OF COSTS ON REMOVAL ON OR BEFORE 31ST MARCH, 1999

         Allocation of costs on removal: If the appointment of ESIS as
         Settlement System Administrator shall be terminated by the removal of
         ESIS in accordance with Section 16:-

         (a)      the Pool Members shall reimburse ESIS:-

                  (i)     the Pool Agreed Liabilities;

                  (ii)    the Pool Apportioned Outstanding Liabilities; and

                  (iii)   the Compensation;

         (b)      ESIS shall be responsible for, and shall not have recourse to
                  any Pool Member for all or any part of, the SSA Apportioned
                  Outstanding Liabilities; and

         (c)      the liability of Pool Members for the payment of charges for
                  the provision of Services up to the Termination Date and
                  during the Post-Termination Period shall be as set out
                  elsewhere in this Schedule and the Appendix hereto.

         ESIS shall take all reasonable steps and shall otherwise use all
reasonable endeavours to mitigate the Pool Apportioned Outstanding Liabilities.

25.      ALLOCATION OF COSTS ON REMOVAL

         Allocation of costs on removal: Subject to Section 28(b), if the
         appointment of ESIS as Settlement System Administrator shall be
         terminated by the removal of ESIS in accordance with Section 17:-

               (a)  the Pool  Members  shall  reimburse  ESIS  the  Pool  Agreed
                    Liabilities; and

               (b)  ESIS shall be  responsible  for, and shall not have recourse
                    to any Pool Member for all or any part of:-

                    (i)  the Transition  Costs (and shall refund to Pool Members
                         in  accordance  with  sub-section  2.7 of Part J of the
                         Appendix  hereto any sums  already  received by ESIS on
                         that account);

                    (ii) the Outstanding Liabilities;

          (c)  the  liability of Pool Members for the payment of charges for the
               provision of Services up to the  Termination  Date and during the
               Post-Termination  Period  shall be as set out  elsewhere  in this
               Schedule and the Appendix hereto.

26.      REIMBURSEMENT BY POOL MEMBERS

          Reimbursement by Pool Members:  In respect of any sum to be reimbursed
               by Pool Members to the Settlement System  Administrator  pursuant
               to Section 22, 23, 24 or 25:-

          (a)  ESIS may recover such sum in accordance with sub-paragraph 2.3 of
               Part J of the Appendix hereto;

          (b)  Pool  Members  shall be liable on a several  basis  according  to
               their respective  Contributory  Shares as at the Termination Date
               provided   that,   if  a  Pool  Member  shall  fail  to  pay  its
               Contributory  Share of such sum within 45 days after the due date
               for payment therefor, the other Pool Members shall be jointly and
               severally  liable to pay such  unpaid sum (and  liable as between
               themselves  according to their  respective  Contributory  Shares,
               calculated  on  the  basis  that  the  Points  allocated  to  the
               defaulting Pool Member are disregarded); and

         (c)      any Pool Member (a "non-paying Pool Member") which fails to
                  pay its Contributory Share in the circumstances of Section
                  26(b) shall indemnify and keep indemnified each Pool Member on
                  demand against all sums properly paid by such Pool Member in
                  relation to that non-paying Pool Member's Contributory Share
                  pursuant to Section 26(b).
27.      DIRECTOR'S INVOLVEMENT

         Director's involvement: If, in giving written consent pursuant to
         Section 14, 15(b), 16(b) or 17.5(ii) the Director shall impose
         conditions or qualifications which render it impracticable to give
         effect to the terms of any of Sections 19 to 26 (inclusive) as written,
         ESIS and the Executive Committee shall promptly negotiate in good faith
         to agree amendments to the SSA Arrangements (including, if appropriate,
         to the charging principles) to give effect to the Director's conditions
         or qualifications and, in default of agreement as to such amendments
         within six months after the commencement of such negotiations, the
         Settlement System Administrator or the Executive Committee or any Pool
         Member shall be entitled to refer the dispute to arbitration in
         accordance with Clause 83. In the conduct of such negotiations, ESIS
         and the Executive Committee shall have regard both to the Menus of
         Prices and to the costs which will be incurred by ESIS in continuing to
         provide Services to satisfy the Director's conditions or
         qualifications, it being understood that, where such costs are properly
         incurred, it is the parties' intention that ESIS should be entitled to
         recover the same from Pool Members.

28.      POOL MEMBER AND EXECUTIVE COMMITTEE BREACHES

         Breach by Pool Members and/or Executive Committee: Without prejudice to
         Clause 66 if the Pool Members acting collectively, the Executive
         Committee, the Contract Manager or the Chief Executive's Office fail,
         or any of the same is deemed pursuant to Section 1.2 or Section 29 to
         have failed, in any persistent, material respect or in any single,
         major respect to perform or comply with any of its or their obligations
         under the SSA Arrangements and, if such failure is not capable of
         remedy or is capable of remedy, but is not remedied within 30 days from
         the date of receipt by the Executive Committee of notice from the
         Settlement System Administrator giving details of the relevant failure
         and requiring its remedy (or such longer period as may be necessary but
         in any event within 90 days or any longer period as may be reasonable
         and agreed between the Settlement System Administrator and the
         Executive Committee) and, where such reasonable period is longer than
         30 days, a timetable for the remedy of such failure is not agreed by
         the Executive Committee with the Settlement System Administrator (such
         agreement not to be unreasonably withheld) within 30 days from the said
         date of receipt, then ESIS may(the prior written consent of the
         Director having been obtained):-

         (a)      give not less than 12 months' notice in writing to the
                  Executive Committee (which shall forthwith notify all Pool
                  Members) and the Director of its resignation specifying the
                  date thereof, and the appointment of ESIS as Settlement System
                  Administrator shall terminate on that date and the provisions
                  of Section 24 shall apply as if the appointment of ESIS as
                  Settlement System Administrator shall have been terminated by
                  its removal in accordance with Section 16 (but disregarding
                  for this purpose any requirement to pay Compensation if the
                  appointment of ESIS as Settlement System Administrator in fact
                  terminates after 31st March, 1999); or

         (b)      give notice to all Pool Members, the Executive Committee and
                  the Chief Executive's Office identifying such irremediable
                  breach or failure to remedy or agree a timetable for remedy of
                  a remediable breach and, if at any time after the service of
                  such notice and while such breach is continuing, the
                  Settlement System Administrator resigns or is removed pursuant
                  to Section 14, 15, 16 or 17 then, notwithstanding Sections 22,
                  23 and 25, the provisions of Section 24 shall apply as if the
                  appointment of ESIS as Settlement System Administrator shall
                  have been terminated by its removal in accordance with Section
                  16 (but disregarding for this purpose any requirement to pay
                  Compensation if the appointment of ESIS as Settlement System
                  Administrator in fact terminates after 31st March, 1999).

29.      VARIATION OF SERVICE LINES

         If the Executive Committee engages a person other than the Settlement
         System Administrator to perform a Service contained in a Service Line
         or part thereof which is listed in the Sole Supplier Index there shall
         be deemed to be a failure by the Executive Committee in a single, major
         respect to comply with its obligations under the SSA Arrangements or
         the Settlement System Administrator shall be entitled to insist upon
         due and proper performance of the SSA Arrangements provided that the
         mere variation of any Service Line to a state where no Service is to be
         provided or can be Ordered thereunder shall not be deemed to be such a
         failure.

30.      EXTENSION OF TIME

         If performance of the terms of the SSA Arrangements by the Settlement
         System Administrator is delayed by reason of the act or default of a
         Party or a Meter Operator Party, the Settlement System Administrator
         shall be entitled to a reasonable extension of time for performance and
         to any reasonable additional costs which it can demonstrate to the
         Executive Committee were directly incurred as a result of such delay
         provided always and on condition that the Settlement System
         Administrator shall notify the Executive Committee in writing within a
         reasonable time of the circumstances giving rise to the delay in
         performance.

31.      CONTRACT MANAGEMENT RULES

31.1     Contract Management Rules: The Parties agree that, whilst the Contract
         Management Rules do not constitute or evidence legally binding
         obligations, they are indicative of best practice with respect to
         certain aspects of the day-to-day operation of the SSA Arrangements and
         include practices and procedures which either have been proven or are
         expected to facilitate that day-to-day operation. The Parties agree
         that a failure by a Party to comply with the Contract Management Rules
         shall not of itself constitute a breach of the SSA Arrangements nor
         give rise to any sanction against that Party.

31.2     Amendments to the Contract Management Rules: The Contract Management
         Rules may be amended, modified or varied by agreement between the
         Account Manager and the Contract Manager in accordance with procedures
         to be agreed between themselves from time to time.

32.      GROSS MARGIN

32.1     Auditor's Report: The Settlement System Administrator shall procure
         that its auditor reports to the Executive Committee within one month
         after (a) the signature of the Settlement System Administrator's annual
         accounts and (b) a Removal Notice being given pursuant to Section 16
         the figure that represents the Gross Margin for the financial year in
         respect of which such annual accounts have been prepared or (as the
         case may be) the twelve month period ending on the date of the Removal
         Notice.

32.2     Negotiations:

         32.2.1   If, in respect of the SSA Accounting Period to which the
                  annual accounts referred to in sub-section 32.1 relate, the
                  Gross Margin expressed as a percentage of the aggregate of the
                  Total Sums Due for that period is more than 25 per cent. or
                  less than 15 per cent., Pool Members (acting through the
                  Executive Committee) or the Settlement System Administrator
                  may by notice to the other request that the Menus of Prices be
                  reviewed.

         32.2.2   If notice is given as provided in paragraph 32.2.1 above, the
                  Executive Committee and the Settlement System Administrator
                  may (but shall not be obliged to) agree to conduct such a
                  review of the Menus of Prices but if they do so agree and
                  reach agreement as to the changes in prices, any such price
                  change shall be effective from the beginning of the SSA
                  Accounting Period immediately following the SSA Accounting
                  Period referred to in paragraph 32.2.1 above.

         32.2.3   The provisions of this sub-section 32.2 are without prejudice
                  to any other review or revision of the Menus of Prices
                  required or permitted pursuant to other provisions of this
                  Schedule or the Appendix hereto.

33.      FORCE MAJEURE

         If by reason of Force Majeure the Settlement System Administrator shall
         be unable to carry out all or any of its obligations under this
         Agreement, the provisions of Clause 74 shall have effect provided that
         the Settlement System Administrator shall have the right to recover in
         respect of any period of Force Majeure (to the extent that it would not
         otherwise have been able to recover by reason of the Force Majeure):-

          (a)  the  standing  charge for  Consultancy  Services  referred  to in
               sub-section 4.1 of Part G of the Appendix hereto time-apportioned
               for that period;

          (b)  the  standing  charge for  Development  Services  referred  to in
               sub-section 5.1 of Part G of the Appendix hereto time-apportioned
               for that period;

          (c)  the Monthly  Minimum  Manpower Charge  Commitment  referred to in
               sub-section  10.1 of Part G of the Appendix  hereto (less the sum
               of (a) and (b) above) time-apportioned for that period;

          (d)  to the extent that the sum of (a),  (b) and (c) above falls short
               of the Minimum  Contract Price  time-apportioned  to that period,
               the amount of that shortfall;

         (e)      Deferred Settlement Project Expenditure;

         (f) Third Party Costs invoiced to the Settlement System Administrator
in that period; and

         (g)      the Suppliers Second Tier Charge time-apportioned for that
                  period together with any under-recovery and less any
                  over-recovery on the STSSC Account.

34.      CONFIDENTIALITY

         Pool Members shall jointly and severally procure that the Executive
         Committee, the Chief Executive's Office and the Contract Manager shall
         use all reasonable endeavours to preserve the confidentiality of, and
         not directly or indirectly reveal, report, publish, disclose or
         transfer the Menus of Prices or the Gross Margin, or any part of or any
         information contained in or relating to the Menus of Prices or the
         Gross Margin (the "Relevant Information") except:-

         (a)      where the Relevant Information is in the public domain
                  otherwise than by breach by a Pool Member, the Executive
                  Committee, the Chief Executive's Office or the Contract
                  Manager of this Agreement;

         (b)      to the extent that the Settlement System Administrator gives
                  its prior consent in writing, it being acknowledged that such
                  consent has been given for disclosure of the Relevant
                  Information relating to the Accounting Period beginning on 1st
                  April, 1994;

          (c)  to the  extent  required  by law,  any Act of  Parliament  or any
               Competent Authority;

          (d)  to comply  with the  conditions  of any  Licence or any  document
               referred  to in the  Licence  with which the party is required to
               comply;

          (e)  to the Executive Committee's consultants or professional advisers
               or to the Pool Auditor; or

          (f)  to the extent required by any judicial or arbitral process having
               jurisdiction over the Pool Members, the Executive Committee,  the
               Chief Executive's Office or the Contract Manager, as the case may
               be,

         provided that the Executive Committee and its staff shall be entitled
         to keep on display and make available for inspection to (but not
         copying by) Pool Members (and to notify Pool Members that there is on
         display and available for inspection) at the office of the staff of the
         Executive Committee all Relevant Information.

35.      NOTICES

          Notices: For the purposes of this Schedule 4 and the Appendix  hereto,
               Clause 75 shall apply as if each of the  Account  Manager and the
               Contract  Manager  is a Party  with  the  following  address  and
               facsimile number:-
<TABLE>
<CAPTION>
          <S>   <C>                    <C> 


         (a)      Account Manager:      Energy Settlements and Information Services Limited,
                                        Fairham House,
                                        Green Lane,
                                        Clifton,
                                        Nottingham NG11 9LN

                                        Facsimile number: 0115-945 6807;
         (b)      Contract Manager:     The Electricity Pool of England
                                        and Wales,
                                        2nd Floor,
                                        15 Bloomsbury Square,
                                        London WC1A 2LP

                                        Facsimile number: 0171-831 4813
</TABLE>


<PAGE>


                             APPENDIX TO SCHEDULE 4
                                  THE SERVICES

                                    CONTENTS

PART A - PRELIMINARY

1.       DEFINITIONS AND INTERPRETATION

         1.1      Definitions

         1.2      Interpretation

PART B - THE SERVICES

1.       CATEGORIES OF SERVICES

2.       PRODUCTION SERVICES

         2.1      Production Services

         2.2      Types of Production Services

         2.3      Continuous Production Services

         2.4      Ad Hoc Production Services

         2.5      Limits on Production Services

3.       CONSULTANCY SERVICES

4.       DEVELOPMENT SERVICES

5.       NON-MENU SERVICES

6.       PRICE ON REQUEST ITEMS

7.       SOLE SUPPLIER SERVICES

         7.1      Sole Supplier Services

         7.2      Status of Sole Supplier Services

         7.3      Variations of Sole Supplier Services

         7.4      Review of Sole Supplier Index

8.       MANAGEMENT OF RESOURCES

9.       MARKET TESTS

         9.1      Market Tests

         9.2      Timing

         9.3      Settlement System Administrator's involvement

10.      PERFORMANCE IMPROVEMENT PROGRAMMES

         10.1     Performance Improvement Programmes

         10.2     Close Co-operation

         10.3     Cost-benefit Sharing

         10.4     Procedure

         10.5     Costs of PIPs

         10.6     Division of Cost Savings

         10.7     Cost Savings by Pool Members

         10.8     Non-PIP Modifications

11.      CONTRACT REPORTING

PART C - NEW REQUIREMENTS

1.       CHANGES TO SERVICES

         1.1      Changes to Services

         1.2      Negotiation

         1.3      Agreed Changes to Services

         1.4      Formal documentation

         1.5      Addition to Sole Supplier Index

2.       PRICE ON REQUEST

         2.1      Request for a price

         2.2      Basis of the price

         2.3      Price on Request

         2.4      Amendment Procedure

PART D - VARIATION MECHANICS

1.       INDEXATION

         1.1      Indexation

         1.2      Mechanics

2.       VARIATION MENUS

         2.1      Variation Menus

         2.2      Mechanics

3.       RENT COSTS

         3.1      Changes in rent

         3.2      Mechanics

4.       VOLUME CHANGES

         4.1      Units of Variation

         4.2      Limits

5.       STANDING CHARGES

6.       MONTHLY MINIMUM MANPOWER CHARGE COMMITMENT

         6.1      Monthly Minimum Manpower Charge
                  Commitment

         6.2      Reconciliation

7.       MARKET TESTS AND PERFORMANCE IMPROVEMENT PROGRAMMES

8.       INCONSISTENCIES IN THE SSA ARRANGEMENTS

PART E - ORDERING SERVICES: GENERAL PROVISIONS

1.       GENERAL REQUIREMENT FOR ORDERS

2.       EXCEPTIONS TO THE REQUIREMENT FOR ORDERS

3.       ISSUING, AND COMPLYING WITH, ORDERS AND REQUESTS

         3.1      Entitlement to issue Orders and requests

         3.2      Compliance with Orders and requests

         3.3      Signature of requests

         3.4      Signature of Orders

         3.5      Limited delegation

         3.6      Criteria for Orders

         3.7      Authority of Pool Members, the Executive Committee and the
                  Chief Executive

4.       SETTLEMENT SYSTEM ADMINISTRATOR'S PROTECTIONS

         4.1      Recovery of charges

         4.2      Compliance with the Director's directions

         4.3      Ratification

         4.4      Express authority

         4.5      Reliance on documents believed genuine

         4.6      General meetings

         4.7      Exceptions

         4.8      Reference to the Director

5.       JOB NUMBERS

         5.1      Job Numbers

         5.2      Extensions to Orders

6.       SUPPLEMENTAL PROVISIONS

         6.1      Changing resources

         6.2      Ordering ethos

         6.3      Resource records

         6.4      Dedication of resource

         6.5      Failure to supply resource

PART F - ORDERING SERVICES: SPECIFIC PROVISIONS

1.       ORDERING PRODUCTION SERVICES

         1.1      Continuous Production Services

         1.2      Volume changes

         1.3      Ad Hoc Production Services

2.       ORDERING CONSULTANCY SERVICES

         2.1      Minimum manpower periods

         2.2      Extensions of manpower

         2.3      Short Notice Ordering

3.       ORDERING DEVELOPMENT SERVICES

         3.1      Project Template

         3.2      Minimum manpower periods

         3.3      Extensions of manpower

         3.4      Short Notice Ordering

         3.5      Fixed Price

4.       ORDERING NON-MENU SERVICES

5.       REQUESTS BY DIRECTOR

6.       INDIVIDUAL POOL MEMBER REQUESTS

7.       THIRD PARTY PROCUREMENT

         7.1      Third Party Contract

         7.2      Exceptional circumstances

PART G - CHARGES FOR SERVICES: GENERAL PRINCIPLES

1.       GENERAL

2.       CHARGES FOR PRODUCTION SERVICES

         2.1      Continuous Production Services

         2.2      Ad Hoc Production Services

3.       CHARGES FOR SECOND TIER METERING

         3.1      Charges

         3.2      Separate Account

         3.3      Debits against Account

         3.4      Interest

         3.5      Over-recovery

4.       CHARGES FOR CONSULTANCY SERVICES

         4.1      Standing Charge

         4.2      Manpower Charges

         4.3      Revisions to charges

5.       CHARGES FOR DEVELOPMENT SERVICES

         5.1      Standing Charge

         5.2      Template Charging

         5.3      Manpower Charges

         5.4      Revisions to Charges

         5.5      Fixed Charges

6.       CHARGES FOR NON-MENU SERVICES

7.       THIRD PARTY PROCUREMENT COSTS

8.       POOL DATA CATALOGUE FEES

         8.1      Amount of Pool Data Catalogue Fees

         8.2      Payment of Pool Data Catalogue Fees

         8.3      Disputes

         8.4      Interest on non-payment

         8.5      Absence of Order

9.       SUMMARY OF CHARGES RECOVERABLE

10.      MONTHLY MINIMUM MANPOWER CHARGE COMMITMENT

         10.1     Monthly recovery

         10.2     Reconciliation procedure

11.      MINIMUM CONTRACT PRICE

         11.1     Annual recovery

         11.2     Monthly recovery

         11.3     Minimum Contract Price

PART H - CHARGES FOR SERVICES: EXCEPTIONAL ITEMS

1.       EXTENSION PERIOD CHARGES

2.       BAD DEBTS

3.       NEW TAXES OR NEW LEGISLATION

         3.1      New Taxes

         3.2      New Legislation

4.       EXCEPTIONAL ITEMS

5.       MARKET TEST COSTS

6.       PIP REBATES

PART I - DEFERRED SETTLEMENT PROJECT EXPENDITURE

1.       SOFTWARE EXPENDITURE ALREADY CAPITALISED

2.       EXISTING WORK IN PROGRESS AS AT APRIL, 1994

3.       NEW PROJECTS SINCE APRIL, 1994

PART J - COST RECOVERY

1.       CHARGES RECOVERABLE BY THE SETTLEMENT SYSTEM ADMINISTRATOR

2.       INVOICING

         2.1      Invoice Statement for Prior Charges

         2.2      Content of Invoice Statement

         2.3      Invoice Statement for Post Charges

         2.4      Content of Invoice Statement

         2.5      Disputes

         2.6      Invoices to Pool Members

         2.7      Resignation or removal of the Settlement System
                  Administrator

3.       PAYMENTS

         3.1      Payments by Pool Members

         3.2      Disputes

         3.3      Interest on non-payment

         3.4      Payment of charges

4.       ALLOCATION OF CHARGES

         4.1      Allocation

         4.2      New and former Pool Members

PART K - ALLOCATION OF CHARGES

1.       THE SETTLEMENT SYSTEM ADMINISTRATOR'S CHARGES

         1.1      Payment of Total Sum Due

         1.2      Allocation of Total Sum Due

         1.3      Prima facie evidence

         1.4      Contributory Shares



<PAGE>


                                     PART A

                                   PRELIMINARY

1.       DEFINITIONS AND INTERPRETATION

          1.1  Definitions: In this Appendix, except where the context otherwise
               requires:-

          "Ad  Hoc  Production   Services"  means  those   Production   Services
          described in sub-section 2.4 of Part B;

         "AEI" means, in respect of any SSA Accounting Period, the underlying
         percentage increase in earnings over the previous 12 months ending in
         the October immediately prior to the start of such SSA Accounting
         Period determined by reference to the "Service industries - Divisions
         6-9" indicator in the "Average earnings index: all employees: main
         industrial sectors" published by HMSO in the Employment Gazette or, if
         such index is no longer published in such form or by HMSO, any
         replacement or alternative index therefor which is agreed between the
         Settlement System Administrator and the Executive Committee to be
         appropriate in the circumstances or, if the Settlement System
         Administrator and the Executive Committee cannot reach agreement within
         a reasonable period of time, the replacement or alternative index
         determined by arbitration pursuant to Clause 83 to be appropriate;

          "Anticipated Fixed Standing  Charges" means (without double  counting)
          the aggregate of:-

         (a)      the sum of all charges for (i) all Production Services Ordered
                  and (ii) all Consultancy Services and Development Services
                  Ordered at FSC Rates, as at the date of the Removal Notice;
                  and

         (b)      the sum of all charges for (i) all Production Services and
                  (ii) all Consultancy Services and Development Services at FSC
                  Rates which, taking into account the business plan referred to
                  in Clause 9.1.6 current at the date of the Removal Notice,
                  would have been Ordered for delivery in the period from the
                  Termination Date to 31st March, 1999;

         "ASC Rate" means the price for manpower provided in connection with
         Consultancy Services and Development Services as set out in the Menu of
         Manpower Prices under the title ASC (Additional Standing Charge);

         "Average RPI" means, in respect of any SSA Accounting Period, the
         percentage increase in retail prices over the previous 12 months ending
         in the October immediately prior to the start of such SSA Accounting
         Period determined by reference to the "All items" index (excluding,
         except in relation to the indexation of the Menu of Second Tier
         Metering Prices, mortgage interest) in the Retail Prices Index
         published by the Central Statistical Office or, if such index is no
         longer published in such form or by the Central Statistical Office, any
         replacement or alternative index therefor which is agreed between the
         Settlement System Administrator and the Executive Committee to be
         appropriate in the circumstances or, if the Settlement System
         Administrator and the Executive Committee cannot reach agreement within
         a reasonable period of time, the replacement or alternative index
         determined by arbitration pursuant to Clause 83 to be appropriate;

         "Committed Additional Services Charges" means the sum of all charges
         for all Consultancy Services and Development Services Ordered at ASC
         Rates as at the date of the Removal Notice;

          "Consultancy Services"  means the Services  described as Consultancy
          Services in Section 3 of Part B;

          "Continuous  Production  Services"  means  those Production  Services
               described in sub-section 2.3 of Part B;

        "Deferred Settlement Project Expenditure" means an amount of that name
         which is to be recovered by the Settlement System Administrator as
         charges on a deferred basis pursuant to Part I;

         "Development  Services"  means the Services  described as  Development
         Services in Section 4 of Part B;

         "FSC Rate" means the price for manpower provided in connection with
         Consultancy Services and Development Services as set out in the Menu of
         Manpower Prices under the title FSC (Fixed Standing Charge);

         "Handling Charge" means,  in respect of any item,  such amount as when
          added to the cost of such item is equal to ten per  cent.  of the
         sum of such amount and such cost;

         "Job Number"  means a series of  alpha-numeric  digits  relating to an
          Order;

         "Menu of Consultancy Services Prices" means the most recent document
         with that title setting out prices for certain consultancy services
         which is in the agreed form or which has been revised pursuant to Part
         D;

         "Menu of Development Services Prices" means the most recent document
         with that title setting out prices for certain development services
         which is in the agreed form or which has been revised pursuant to Part
         D;

         "Menu of Manpower Prices" means the most recent document with that
         title setting out prices for manpower which is in the agreed form or
         which has been revised pursuant to Part D;

         "Menu of Production Services Prices" means the most recent document
         with that title setting out prices for certain production services
         which is in the agreed form or which has been revised pursuant to Part
         D;

         "Menus of Prices" means all of:-

         (a)      the Menu of Consultancy Services Prices;

         (b)      the Menu of Development Services Prices;

         (c)      the Menu of Manpower Prices;

         (d) the Menu of Production Services Prices (including as an annex
thereto the Menu of Second Tier Metering Prices); and

         (e)      any other menu of prices in the agreed form;

          "Minimum Contract  Price" has the meaning given to that  expression in
          sub-section 11.3 of Part G;

         "Monthly Minimum Manpower Charge  Commitment" has the meaning given to
          that expression in sub-section 6.1 of Part D;

          "Non-Menu  Services"  means the  Services  referred to in Section 5 of
               Part B;

         "Order" means a request in the agreed form for Services given by the
         Contract Manager to the Account Manager, and "Ordered" and "Ordering"
         shall be construed accordingly;

         "Post Charges" means those charges in respect of which an invoice
statement is issued pursuant to sub-section 2.3 of Part J;

         "Price on Request Items" means the items described as Price on Request
               Items in Section 6 of Part B;

         "Prior Charges" means those charges in respect of which an invoice
statement is issued pursuant to sub-section 2.1 of Part J;

         "Production  Services"  means the  Services  described  as  Production
          Services in sub-section 2.1 of Part B;

         "Project Template" means a modelling tool in the agreed form which is
         used to Order Development Services and which assists in the estimating
         and profiling of manpower commitment;

         "Rate of Inflation" in respect of any SSA Accounting Period, means:-

         (a)      in relation to the Menu of Manpower Prices, the AEI; and

         (b)      in relation to all other Menus of Prices (other than charges
                  for general depreciation, rent and Deferred Settlement Project
                  Expenditure to which the Rate of Inflation shall not apply),
                  the Average RPI (it being acknowledged that, in relation to
                  Service Line 14 (Second Tier Metering), mortgage interest will
                  be included in the calculation of Average RPI);

         "SCR Rate" means the price for manpower provided in connection with
         Consultancy Services and Development Services and set out in the Menu
         of Manpower Prices under the title SCR (Standard Contract Rate);

         "Services" means the services to be provided by the Settlement System
         Administrator pursuant to the SSA Arrangements, the categories of which
         are set out in Section 1 of Part B;

         "Sole Supplier Index" means the index with that title in the form
         agreed by the Settlement System Administrator and the Executive
         Committee setting out those Services or parts thereof which are
         designated as having sole supplier status, as such index may be amended
         or substituted from time to time by written agreement of the Settlement
         System Administrator and the Executive Committee;

         "Sole Supplier Services" means the Services referred to in sub-section
          7.1 of Part B;

         "Third Party  Contract"  has the meaning  given to that  expression in
               Section 7 of Part F;

         "Third Party Costs" means costs under a Third Party Contract which are
         invoiced to the Settlement System Administrator by the third party and
         passed directly through to Pool Members, and shall include those costs
         which are expressly stated in this Schedule to be treated as Third
         Party Costs;

         "Total Sum Due" has the meaning given to that expression in Section 1
           of Part J; and

         "Variation Menus" means the most recent set of documents of that title
         setting out changes in prices for Services which is in the agreed form,
         that set comprising as at the date this Schedule takes effect:-

         (a)      a Continuous Production Services Variation Menu; and

         (b)      a Manpower Variation Menu.

1.2      Interpretation: In this Appendix:-

         (a)      except where the context otherwise requires, references to a
                  particular Part, Section, sub-section or paragraph shall be a
                  reference to that Part of this Appendix or, as the case may
                  be, that Section, sub-section or paragraph of the relevant
                  Part; and

         (b)      where a notice period in relation to the provision of a
                  Service begins upon receipt of an Order therefor, such notice
                  period shall exclude the day upon which the Service is
                  required to be provided and (if received after 12:00 hours on
                  any day) the day upon which notice is deemed to be served.



<PAGE>


                                     PART B

                                  THE SERVICES

1.       CATEGORIES OF SERVICES

         Categories of Services: There are four categories of Services, being:-

         (a)      Production Services;

         (b)      Consultancy Services;

         (c)      Development Services; and

         (d)      Non-Menu Services.

2.       PRODUCTION SERVICES

2.1  Production  Services:  Production  Services are those Services described as
     Production  Services in the Service Lines set out in the Menu of Production
     Services Prices.

2.2  Types of Production  Services:  Production  Services are either  Continuous
     Production Services or Ad Hoc Production Services.

2.3  Continuous  Production Services:  Continuous  Production Services are those
     Production Services which the Settlement System Administrator is to provide
     on a regular basis as described in the relevant Service Line.

2.4  Ad Hoc Production Services: Ad Hoc Production Services are those Production
     Services which the Settlement  System  Administrator is to provide on an ad
     hoc basis as described in the relevant Service Line.

2.5      Limits on Production Services: There are physical constraints on the
         Settlement System which are recognised through the maxima set out in
         the Menu of Production Services Prices. This Appendix provides in
         sub-section 4.2 of Part D how Services are to be Ordered and priced
         outside certain maxima and minima limits.

3.       CONSULTANCY SERVICES

         Consultancy Services are those Services described as Consultancy
Services in the Service Lines set out in the Menu of Consultancy Services
Prices.

4.       DEVELOPMENT SERVICES

         Development Services are those Services described as Development
Services in the Service Lines set out in the Menu of Development Services
Prices.

5.       NON-MENU SERVICES

         Non-Menu Services are those Services which (a) are requested by the
         Executive Committee or the Contract Manager, or are Ordered, to be
         provided by the Settlement System Administrator in its capacity as
         Settlement System Administrator, (b) are not included in a Service
         Line, and (c) if agreed to be provided, will not be included in a
         Service Line or a Menu of Prices but will be provided on stand-alone
         terms and conditions and, for the avoidance of doubt, any service or
         obligation of the Settlement System Administrator pursuant to the SSA
         Arrangements which is not described in a Service Line is a Non-Menu
         Service.

6.       PRICE ON REQUEST ITEMS

         Price on Request Items are those Services designated as Price on
         Request in the Service Lines, being services for which there is a
         general description in one or more of the Service Lines but for which
         there is no corresponding price stated or referred to in any Menu of
         Prices and for which the Settlement System Administrator will quote a
         price in accordance with Section 2 of Part C and which may or may not
         be added to the relevant Menu of Prices.

7.       SOLE SUPPLIER SERVICES

7.1  Sole Supplier Services:  Those Services or parts thereof which for the time
     being and from time to time are listed in the Sole Supplier Index are known
     as Sole Supplier Services.

7.2      Status of Sole Supplier Services: Subject to sub-section 7.2 of
         Schedule 4, Sole Supplier Services may only be provided by the
         Settlement System Administrator. If the Executive Committee shall
         engage a person other than the Settlement System Administrator to
         perform a Sole Supplier Service, there shall be deemed to be a failure
         by the Executive Committee in a single, major respect to comply with
         its obligations under the SSA Arrangements for the purposes of Section
         28 of Schedule 4 or the Settlement System Administrator shall be
         entitled to insist upon due and proper performance by the Executive
         Committee of its obligations under the SSA Arrangements.

7.3      Variations of Sole Supplier Services: The Executive Committee shall
         have the right to vary the volume of Service under any Sole Supplier
         Service to a level where no Service under the relevant Service Line is
         capable of being provided or can be Ordered. Exercise of this right
         will not constitute a failure or deemed failure by the Executive
         Committee to comply with its obligations under the SSA Arrangements.

7.4      Review of Sole Supplier Index: Within a period of six months after 31st
         March, 1999 the Settlement System Administrator shall review the Sole
         Supplier Index in consultation with the Executive Committee to assess
         whether it is appropriate to amend the list of Services which are
         designated as Sole Supplier Services. If as a result of that review or
         at any other time the Settlement System Administrator and the Executive
         Committee shall agree to amend or substitute the list of Services in
         whole or in part, the Sole Supplier Index shall be revised accordingly.

8.       MANAGEMENT OF RESOURCES

         The Settlement System Administrator shall manage and schedule its
         resources and the resources available to it as it sees fit. Neither the
         Contract Manager nor Pool Members shall be entitled to specify that
         particular individuals be provided in relation to Services other than
         named project managers pursuant to Service Line 16 (Management
         Services), but the Contract Manager and Pool Members shall have the
         right to specify skill categories.

9.       MARKET TESTS

9.1  Market  Tests:  The Executive  Committee  shall have the right to carry out
     market  tests of the price of Services  in  accordance  with the  following
     provisions of this Section.

9.2  Timing:  Market tests shall be carried out at the request of the  Executive
     Committee  from time to time and shall be  conducted by or on behalf of the
     Executive Committee.

9.3      Settlement System Administrator's involvement:

         (a)      If the Executive Committee wishes the Settlement System
                  Administrator to take account of a market test, then the
                  Executive Committee shall use its reasonable endeavours to
                  commission a market test on a "like for like" basis for the
                  provision of the Service in question (including as to quality,
                  timeliness and flexibility) from a supplier of equal standing
                  to the Settlement System Administrator agreed between the
                  Executive Committee and the Settlement System Administrator
                  (such agreement not to be unreasonably withheld) and shall
                  permit the Settlement System Administrator to appraise the
                  method and results of the market test and to request
                  clarification of the method and clarification and correction
                  of the results.

         (b)      If the market test shall result in an indication that the
                  Service in question may be obtained at a lower comparable
                  price from another supplier, the Settlement System
                  Administrator shall either demonstrate within a reasonable
                  time why it is unable to adopt the lower comparable price or
                  accept the results of the market test and forthwith adopt the
                  lower comparable price.

         (c)      If the Settlement System Administrator shall seek to
                  demonstrate why it is unable to adopt the lower comparable
                  price rather than accept the results of the market test but
                  the Executive Committee disputes that the Settlement System
                  Administrator either has done so within a reasonable time as
                  required by paragraph (b) above or has adequately demonstrated
                  why it is unable to adopt the lower comparable price, and in
                  either case should therefore accept the results of the market
                  test and adopt the lower comparable price, the Executive
                  Committee may refer the dispute to arbitration in accordance
                  with Clause 83.

10.      PERFORMANCE IMPROVEMENT PROGRAMMES

10.1     Performance Improvement Programmes: The Executive Committee and the
         Settlement System Administrator may from time to time agree to conduct
         programmes designed to improve the cost-effectiveness of the Services.
         All such programmes shall be conducted in accordance with the
         principles set out in the following provisions of this Section and the
         Settlement System Administrator shall be obliged to participate in all
         such programmes.

10.2     Close Co-operation: Performance Improvement Programmes shall require
         close co-operation and an exchange of information between the Executive
         Committee and the Settlement System Administrator to a greater degree
         than is contemplated elsewhere by the terms of this Agreement.

10.3     Cost-benefit Sharing: The purpose of a Performance Improvement
         Programme is to yield cost-benefit sharing and any such programme will
         involve an analysis of actual costs rather than the prices that are
         contained in the Menus of Prices.

10.4     Procedure:  The  procedure for  conducting a  Performance  Improvement
         Programme is set out in the Contract Management Rules.

10.5     Costs of PIPs:  The costs of all  Performance  Improvement  Programmes
         shall  be  borne  by  Pool  Members   according  to  their  respective
         Contributory  Shares and shall be  recovered  in  accordance  with the
         Charging Procedure.

10.6     Division of Cost Savings: If a Performance Improvement Programme shall
         demonstrate a saving in all or any of the costs that are incurred by
         the Settlement System Administrator in providing the Services, then
         that saving shall be shared equally between the Settlement System
         Administrator on the one hand and Pool Members on the other hand at
         that time and in the manner agreed between the Account Manager and the
         Contract Manager from time to time provided that the Pool Members shall
         have the right to receive the entire benefit of that saving until such
         time as they have received in full through that saving an amount equal
         to the costs incurred by them referred to in sub-section 10.5 above.

10.7     Cost Savings by Pool Members: If a Performance Improvement Programme
         shall demonstrate a saving in all or any of the costs that are incurred
         by Pool Members (other than costs payable to the Settlement System
         Administrator under the SSA Arrangements), the relevant Pool Members
         shall have the right to the entire benefit of that saving and shall not
         be required to share all or any part of that benefit.

10.8     Non-PIP Modifications: The following actions with regard to any Service
         provided by the Settlement System Administrator shall not be the
         subject of a Performance Improvement Programme and any cost savings
         caused by such action shall not be dealt with in accordance with the
         principles of the Performance Improvement Programmes:-

         (a)      a change in the volume and/or frequencies of any Service under
                  a Service Line within the maximum and minimum limits stated
                  for that Service in the relevant Menu of Prices;

         (b)      a change in the level of quality, fault tolerance or security
                  for a particular Service where the commercial objectives (as
                  stated in the relevant Service Lines) are not amended in
                  respect of that change;

         (c)  replacement  of any Hardware or Software in the normal  course of
               business;

         (d)      where a Performance Improvement Programme is undertaken in
                  respect of one or more particular Service Lines, any
                  concomitant modification to a Service Line which is not the
                  subject of that particular Performance Improvement Programme;
                  and

         (e)      where the Settlement System Administrator discovers that,
                  through its own efforts, it has performed Services in a more
                  efficient manner than it originally planned.

11.      CONTRACT REPORTING

         Reports: The Settlement System Administrator shall provide the Contract
         Manager with reports in accordance with Service Line 10 (Service to CEO
         and Pool Members).



<PAGE>


                                     PART C

                                NEW REQUIREMENTS

1.       CHANGES TO SERVICES

          1.1  Changes  to  Services:   Without  prejudice  to  Parties'  rights
               generally to amend this Agreement,  the Contract Manager may from
               time to time request the Settlement System Administrator:-

         (a)      to provide a new Service; or

         (b) to amend a Service currently included in a Service Line or to amend
a Non-Menu Service; or

         (c) to delete a Service currently included in a Service Line.

1.2      Negotiation: Upon receipt of any such request the Account Manager will
         negotiate in good faith with the Contract Manager to amend in
         accordance with the Change Management Procedure referred to in Service
         Line 12 (Management of Settlement Change) the applicable Service Line,
         Menu of Prices and Variation Menu (or, if the Service is a Non-Menu
         Service, to agree or amend documentation recording the terms and
         conditions on which the Non-Menu Service is to be provided) and, if
         necessary, to amend other elements of the SSA Arrangements to give
         effect to such request provided that:-

         (a)      neither the Settlement System Administrator nor the Executive
                  Committee nor Pool Members shall be obliged to agree any such
                  amendment or documentation; and

         (b)      there shall be no obligation on the Account Manager or the
                  Contract Manager to continue such negotiations if it is or
                  becomes evident that there is no agreement to provide the
                  Service or make the change referred to in sub-section 1.1
                  above or as to the amendments required to give effect to such
                  new Service or change.

         As part of the negotiations for the provision of a new or amended
         Service, the Account Manager shall provide the Contract Manager with
         (in the case of a new Service) a price for the Service together with a
         statement of the incremental (but not necessarily pro rata) resource
         requirement and an accompanying written explanation, and (in the case
         of an amended Service) a revised price for that Service justified by
         reference to the prices in the relevant Menu of Prices and accompanied
         by a written explanation.

1.3      Agreed Changes to Services: The SSA Arrangements, applicable Service
         Lines, Menus of Prices and Variation Menus (or, if a Non-Menu Service
         is affected, the documentation recording the terms and conditions on
         which the Non-Menu Service is to be provided) shall be amended as
         required to reflect any agreement between the Pool Members and the
         Settlement System Administrator to:-

          (a)  vary  the  SSA   Arrangements,   the  Settlement  System  or the
               Development Policies; or

          (b)  include an Ad Hoc Production Service as a Continuous Production
               Service,

         in accordance, where appropriate, with the Contract Management Rules.

1.4      Formal documentation: Any new Service or change to Service referred to
         in sub-section 1.1 above shall take effect as from the date specified
         in the formal documentation giving effect to such new Service or change
         and in accordance with the terms of such documentation.

1.5      Addition to Sole Supplier Index: Where a new Service Line is created as
         part of the formal documentation giving effect to a new Service or
         change to a Service the Settlement System Administrator and the
         Executive Committee shall consider whether such new Service Line should
         be added to the Sole Supplier Index and, if they so agree, it shall be
         so added.

2.       PRICE ON REQUEST

2.1      Request for a price: The Contract Manager may from time to time request
         the Account Manager on behalf of the Settlement System Administrator to
         quote a price for any Price on Request Item and the Settlement System
         Administrator will within a reasonable time quote such a price.

2.2      Basis of the price: The price quoted by the Settlement System
         Administrator shall be calculated by taking account of the Menu of
         Prices for the category of Services which most closely corresponds to
         the relevant Price on Request Item and, if applicable, to the price
         payable for any third party resources for which the Settlement System
         Administrator will need to contract to provide such Price on Request
         Item.

2.3  Price on Request:  The request and quotation  procedure in sub-sections 2.1
     and 2.2 above is known as the Price on Request procedure.

2.4      Amendment Procedure: Upon receipt of the Settlement System
         Administrator's price the Contract Manager may (but shall not be
         obliged to) agree the price quoted. If the Contract Manager shall
         notify the Account Manager that he agrees the price, the Account
         Manager and the Contract Manager shall ordinarily amend the applicable
         Menu of Prices to include the quoted price and the applicable Variation
         Menu and, if necessary, the applicable Service Line to include more
         detail as to the Service to be provided, unless the Contract Manager
         and the Account Manager agree that the price of a Price on Request Item
         shall not be added to the applicable Menu of Prices in which case such
         Price on Request Item shall remain a Price on Request Item. Upon such
         amendment(s) being made the relevant Price on Request Item shall cease
         to be a Price on Request Item and shall become a Production Service, a
         Development Service or a Consultancy Service (as appropriate) which may
         then be Ordered.



<PAGE>


                                     PART D

                               VARIATION MECHANICS

1.       INDEXATION

1.1  Indexation:  With effect from the first day of each SSA Accounting  Period,
     beginning with the SSA Accounting Period starting in 1995:-

     (a)  the Variation Menus shall be automatically  adjusted by the applicable
          Rate of Inflation; and

     (b)  the Menus of Prices shall be automatically  adjusted by the applicable
          Rate of Inflation,

     but  in each case only where and to the extent  expressly  provided  in the
          relevant Menu.

1.2      Mechanics: No later than two months before the first day of each SSA
         Accounting Period, beginning with the SSA Accounting Period starting in
         1995, the Settlement System Administrator shall prepare and deliver to
         the Contract Manager revised Menus of Prices and Variation Menus
         adjusted in accordance with sub-section 1.1 above and in the case of
         Menus of Prices sub-section 2.1 below together with a report from the
         Settlement System Administrator's auditor confirming that it has
         reviewed the revised Menus of Prices and Variation Menus and that they
         have been correctly adjusted in accordance with such sub-sections.

2.       VARIATION MENUS

2.1      Variation Menus: With effect from the first day of each SSA Accounting
         Period, beginning with the SSA Accounting Period starting in 1995,
         and/or at such other times as may be prescribed in the relevant
         Variation Menu, the Menus of Prices shall be automatically adjusted as
         provided in the Variation Menus, as such Variation Menus have
         themselves first been adjusted as appropriate by the applicable Rate of
         Inflation pursuant to sub-section 2.1 above.

2.2      Mechanics:

         (a)      In the preparation of revised Menus of Prices in accordance
                  with sub-section 1.2 above, the Settlement System
                  Administrator shall ensure that the adjustments to the Menus
                  of Prices prescribed by the Variation Menus as referred to in
                  sub-section 2.1 above are taken fully into account.

         (b)      If an adjustment to a Menu of Prices is prescribed pursuant to
                  sub-section 2.1 above otherwise than with effect from the
                  first day of an SSA Accounting Period, the Settlement System
                  Administrator shall prepare and deliver to the Contract
                  Manager no later than two months before the adjustment is to
                  take effect a revised Menu of Prices.

3.       RENT COSTS

     3.1  Changes in rent: If there shall be a change  (whether an increase or a
          decrease) in the  aggregate  amount of rent payable by the  Settlement
          System  Administrator  for such  premises  occupied by the  Settlement
          System  Administrator  as may be agreed from time to time  between the
          Settlement System  Administrator and the Executive Committee (being in
          any event premises occupied by the Settlement System Administrator for
          the  performance  of the  Services),  the Menu of Production  Services
          Prices shall be  automatically  adjusted  with effect from the date on
          which such change takes effect by the fair allocation of the amount of
          such change across the prices for all Continuous  Production  Services
          provided that in the calculation of the change in the aggregate amount
          of rent payable by the Settlement System Administrator any increase in
          the amount of rent payable in respect of any premises  occupied by the
          Settlement  System  Administrator  shall be taken into account only to
          the  extent  that  the  Settlement  System  Administrator  is  able to
          demonstrate to the reasonable  satisfaction of the Executive Committee
          that the rent for the  relevant  premises as so  increased  is no more
          than the open  market  rack rent for those  premises as at the date of
          such increase.

3.2      Mechanics: If there shall be a change in rent as described in
         sub-section 3.1 above, the Settlement System Administrator shall
         prepare and deliver to the Contract Manager a revised Menu of
         Production Services Prices adjusted in accordance with sub-section 3.1
         above together with a report from the Settlement System Administrator's
         auditor confirming that it has reviewed the revised Menu of Production
         Services Prices and that it has been fairly adjusted in accordance with
         sub-section 3.1 above.

4.       VOLUME CHANGES

4.1      Units of Variation: Menus of Prices may provide for units of variation
         and prices per unit of variation to Services in which case the units of
         variation can be Ordered at the price per unit stated upon the
         requisite period of notice of variation (if any) being given.

4.2      Limits: Menus of Prices may provide maximum and minimum limits of a
         particular Service. Services required in excess of any such maximum
         shall be treated as new Services and Services required below any such
         minimum shall, at the request of the Contract Manager, be provided at a
         revised lower price where determined in accordance with a Performance
         Improvement Programme.

5.       STANDING CHARGES

         The standing charges referred to in sub-sections 4.1 and 5.1 of Part G
         shall be varied automatically at the times and in the manner provided
         in the relevant Service Line.

6.       MONTHLY MINIMUM MANPOWER CHARGE COMMITMENT

     6.1  Monthly Minimum Manpower Charge Commitment: For each Service Line, the
          Monthly  Minimum  Manpower  Charge  Commitment  for any month shall be
          determined in accordance with the following formula:-

         MMMCC    =        C
                                   12

         where:-

     MMMCCis the Monthly  Minimum  Manpower  Charge  Commitment for the month in
          question (expressed in pounds sterling);

          A    is the  minimum  number of  man-days  per  annum  for each  skill
               category as shown in the minimum  manpower  column in the current
               Menu of  Consultancy  Services  Prices  and the  current  Menu of
               Development Services Prices;

          B    is the price at current FSC Rates for the same skill  category as
               shown in the Menu of Manpower Prices; and

          C    is the  aggregate of the sum of (A x B) for all skill  categories
               as so shown.

6.2      Reconciliation: Within 15 working days after (x) the first six month
         period in an SSA Accounting Period and (y) the end of an SSA Accounting
         Period (each an "MMMCC Calculation Period") the Settlement System
         Administrator shall for each Service Line calculate and notify the
         Contract Manager of:-

         (a) the aggregate Monthly Minimum Manpower Charge Commitment for the
six months falling in the MMMCC Calculation Period ("Sum A");

         (b)      the aggregate charges for manpower Ordered for the six months
                  falling in the MMMCC Calculation Period in connection with
                  Consultancy Services and Development Services ("Sum B"); and

         (c)      the aggregate amount invoiced to Pool Members in the MMMCC
                  Calculation Period being for each month the greater of the
                  Monthly Minimum Manpower Charge Commitment or the charge for
                  manpower Ordered ("Sum C").

         The relevant adjustment for the purposes of sub-section 10.2 of Part G
shall always be zero or a credit to Pool Members, shall arise either:-

          (i)  where Sum A is greater  than or equal to Sum B in which event the
               credit  shall be such  amount as is equal to the  amount by which
               Sum C exceeds Sum A; or

          (ii) where Sum A is less than Sum B in which event the credit shall be
               such  amount as is equal to the amount by which Sum C exceeds Sum
               B.

7.       MARKET TESTS AND PERFORMANCE IMPROVEMENT PROGRAMMES

         The Menus of Prices shall be further adjusted following a market test
         or the implementation of a Performance Improvement Programme in
         accordance with the agreement (if any) reached between the Settlement
         System Administrator and the Executive Committee.

8.       INCONSISTENCIES IN THE SSA ARRANGEMENTS

         If there is a change or variation to any part of the SSA Arrangements
         which creates an inconsistency in the obligations to be discharged by
         the Settlement System Administrator under the SSA Arrangements, the
         Settlement System Administrator may request the Contract Manager (in
         the case of a Service Line) or Pool Members, through the Executive
         Committee (in the case of any other part of the SSA Arrangements) to
         make such amendments to the SSA Arrangements as it considers necessary
         to remove such inconsistency and the Contract Manager or, as the case
         may be, the Executive Committee shall act accordingly to make such
         amendments as soon as reasonably possible.



<PAGE>


                                     PART E

                      ORDERING SERVICES: GENERAL PROVISIONS

1.       GENERAL REQUIREMENT FOR ORDERS

         Save as provided in Section 2 below, an Order shall be required to be
         given to the Settlement System Administrator for each and every
         Service. Save as so provided, the Settlement System Administrator shall
         not, and shall not be required to, provide any Service, carry out or
         comply with any request or enter into any contract or other arrangement
         or do any other thing under or pursuant to the SSA Arrangements unless
         an Order is given to and received by the Settlement System
         Administrator in accordance with this Part and (if applicable) Part F.

2.       EXCEPTIONS TO THE REQUIREMENT FOR ORDERS

          No   Order  is  required  to be  received  by  the  Settlement  System
               Administrator in respect of:-

         (a)      Services provided under Service Line 14 (Second Tier Metering)
                  unless and until an ordering procedure is agreed between the
                  Settlement System Administrator and the Executive Committee;

         (b)      Services provided to an individual Pool Member under Service
                  Line 10 (Service to CEO and Pool Members) or Service Line 11
                  (Listing and Load Modules) for which a request is received by
                  the Settlement System Administrator directly from that Pool
                  Member and where the Pool Member is charged directly for those
                  Services;

          (c)  Services  provided to the  Director or his staff in response to a
               request  therefrom  under Service Line 9 (Service to the Director
               General of Electricity Supply);

         (d)      requests of the description in sub-section 3.1(a) below;

         (e)      Services provided or acts carried out where, in the reasonable
                  opinion of the Settlement System Administrator, there will be
                  a breach of NGC's obligations under the Act or NGC's
                  Transmission Licence unless such Services are provided or such
                  acts are carried out by the Settlement System Administrator;

         (f)      Services provided or acts carried out by the Settlement System
                  Administrator in good faith where the Contract Manager or his
                  alternate was unavailable to give an Order and, in the
                  reasonable opinion of the Settlement System Administrator, it
                  was necessary to act without an Order having been received
                  from the Contract Manager in order to ensure the continued
                  provision of the Services under the SSA Arrangements provided
                  that, for the Settlement System Administrator to have the
                  right to charge for such Services or acts, an Order shall be
                  required to be issued after the event and, unless the
                  Settlement System Administrator has not acted in good faith,
                  the Contract Manager shall issue such an Order; and

         (g)      requests from Pool Members, the Executive Committee, the Chief
                  Executive's Office or the Contract Manager for access to
                  persons involved in the provision of Production Services and
                  no charge shall be made where such requests do not exceed the
                  limits set out in the Contract Management Rules.

3.       ISSUING, AND COMPLYING WITH, ORDERS AND REQUESTS

          3.1  Entitlement  to issue  Orders  and  requests:  The  only  persons
               entitled to issue Orders to or to make requests of the Settlement
               System Administrator under the SSA Arrangements are:-

         (a)      if the request has no material cost consequence for the
                  Settlement System Administrator, the Executive Committee
                  (either acting by itself or through the Chief Executive) or
                  the Contract Manager;

         (b) if the request has such a material cost consequence, the Contract
Manager by means of an Order;

          (c)  individual Pool Members by request under Service Line 10 (Service
               to CEO and Pool  Members) or Service  Line 11  (Listing  and Load
               Modules); and

          (d)  the  Director  or his  staff  by  request under  Service Line 9
               (Service to the Director General of Electricity Supply).

3.2      Compliance with Orders and requests: Subject to the other provisions of
         this Section 3, the Settlement System Administrator shall at all times
         observe and comply with all requests made by (a) the Executive
         Committee or the Contract Manager, or (b) individual Pool Members under
         Service Line 10 (Service to CEO and Pool Members) or Service Line 11
         (Listing and Load Modules), or (c) the Director or his staff under
         Service Line 9 (Service to the Director General of Electricity Supply),
         and all Orders which fulfil the criteria set out in sub-section 3.6
         given by the Contract Manager.

          3.3  Signature of requests: The Settlement System Administrator shall
               be entitled to rely upon any request of the  Executive Committee
               if the same is signed  by or on  behalf of two or more Committee
               Members or by or on behalf of the Chief Executive.

          3.4  Signature of Orders: The Settlement System Administrator shall be
               entitled  to rely  upon an  Order if the  same is signed  by the
               Contract Manager.

3.5      Limited delegation: The Settlement System Administrator shall not act
         on the directions or instructions of any sub-committee of the Executive
         Committee or any delegate of the Executive Committee other than the
         Chief Executive or (in the case of Orders) the Contract Manager.

3.6      Criteria for Orders: An Order shall:-

         (a)      be in writing and be clear and unequivocal (and an Order shall
                  be deemed such until such time as the Settlement System
                  Administrator requests any necessary clarification);

         (b) have due regard to the resources of the Settlement System
Administrator available to give effect to such Order;

         (c)      not increase the liabilities of the Settlement System
                  Administrator beyond those contemplated under the SSA
                  Arrangements without proper compensation. For this purpose,
                  without limitation, compensation for increased liabilities
                  shall be proper if an indemnity is given to the Settlement
                  System Administrator which is reasonably satisfactory to it or
                  other compensation reasonably satisfactory to the Settlement
                  System Administrator is provided to it;

         (d)      not conflict with the terms of the SSA Arrangements; and

         (e) not cause the Settlement System Administrator to breach any of
NGC's obligations under the NGC Transmission Licence.

          3.7  Authority of Pool Members,  the Executive Committee and the Chief
               Executive:  Save as provided in sub-section 3.1(a) and in respect
               of  Services  under  Service  Line 10  (Service  to CEO and  Pool
               Members) or Service Line 11 (Listing and Load Modules):-

         (a)      none of the Pool Members, the Executive Committee and the
                  Chief Executive may issue requests or Orders to the Settlement
                  System Administrator; and

         (b)      the Settlement System Administrator shall not act in
                  accordance with any request of the Pool Members, Chief
                  Executive or Executive Committee unless the Pool Members, the
                  Executive Committee or the Chief Executive act through the
                  Contract Manager.

4.       SETTLEMENT SYSTEM ADMINISTRATOR'S PROTECTIONS

4.1      Recovery of charges: Nothing in this Part E and no omission on the part
         of the Contract Manager to issue an Order or to issue an Order for
         sufficient Services to cover the Monthly Minimum Manpower Charge
         Commitment and Minimum Contract Price shall prevent the Settlement
         System Administrator from invoicing and recovering from Pool Members in
         accordance with Parts G and J the Monthly Minimum Manpower Charge
         Commitment, the Minimum Contract Price and the standing charges
         referred to in sub-sections 4.1 and 5.1 of Part G.

4.2      Compliance with the Director's directions: No liability whatsoever
         shall attach to the Settlement System Administrator as a result of due
         compliance by it with any directions and instructions of the Director,
         provided that in complying with such directions and instructions the
         Settlement System Administrator is at all times acting in good faith.

4.3      Ratification: Nothing in the SSA Arrangements shall prevent the
         Executive Committee or the Contract Manager from ratifying any act of
         the Settlement System Administrator such ratification to be, where 
         applicable, by way of an Order.

4.4      Express authority: All requests of the Executive Committee and Orders
         or requests of the Contract Manager to the Settlement System
         Administrator shall, as between the Settlement System Administrator and
         the Pool Members, be deemed to have the express authority of and shall
         be binding without reservation upon all Pool Members.

4.5      Reliance on documents believed genuine: The Settlement System
         Administrator shall be entitled to rely upon any communication or
         document reasonably believed by it to be genuine and correct and to
         have been communicated or signed by the person by whom it purports to
         be communicated or signed and shall not be liable to any of the Parties
         for any of the consequences of such reliance.

4.6      General meetings: The Settlement System Administrator shall not be
         obliged to take any steps to ascertain whether any resolution of Pool
         Members in general meeting or of any class of Pool Members in separate
         general meeting which it is advised by the Executive Committee or the
         Chief Executive as having been passed was in fact passed or passed by
         the requisite majority and until the Settlement System Administrator
         shall have express written notice to the contrary from the Executive
         Committee or the Chief Executive it shall be entitled to assume that
         the relevant resolution was passed or (as the case may be) the relevant
         requisite majority was obtained.

4.7      Exceptions: Notwithstanding the foregoing provisions of Section 3, in
         the performance of its duties and responsibilities under the SSA
         Arrangements the Settlement System Administrator shall not be bound to
         act in accordance with any request of the Executive Committee or the
         Contract Manager or any individual Pool Member under Service Line 10
         (Service to CEO and Pool Members) or Service Line 11 (Listing and Load
         Modules), or an Order if:-

         (a) to do so would cause the Settlement System Administrator to breach
any of NGC's obligations under the Act or NGC's Transmission Licence; or

         (b)      the Settlement System Administrator has reasonable grounds for
                  believing that it would so breach any of such obligations and
                  has consulted the Director and:-

          (i)  the  Director  has not  indicated  that in his view it would  not
               involve any such breach; or

          (ii) the Director has indicated that,  notwithstanding any such actual
               or potential breach,  the Director would not be minded to enforce
               compliance  with  those  obligations  and the  Settlement  System
               Administrator has received an indemnity  reasonably  satisfactory
               to it in respect of its acting in  accordance  with such requests
               or Orders.

         In any such event the Settlement System Administrator shall promptly
notify the Executive Committee.

4.8      Reference to the Director: If at any time the Settlement System
         Administrator has a concern which is properly and reasonably founded
         that, in acting in accordance with any requests of the Executive
         Committee or the Contract Manager or an individual Pool Member or any
         Order, it will breach one or more of NGC's obligations under the Act or
         NGC's Transmission Licence, then, if having discussed the matter with
         the Executive Committee the matter remains unresolved, the Settlement
         System Administrator shall either comply with such request or Order or
         by notice in writing refer the same to the Director, such notice to set
         out in full the request or be accompanied by a copy of the Order (as
         the case may be) given to the Settlement System Administrator and the
         grounds for such concern and to be copied to the Executive Committee
         and (if applicable) the individual Pool Member. Pending any guidance
         from the Director in response to any such reference and, provided that
         the Director shall not express any view that such reference is
         misconceived, vexatious or in respect of an improperly or unreasonably
         founded concern, the Settlement System Administrator shall not be
         liable to any of the other Parties for refusing to act in accordance
         with the relevant request or Order. If the Director shall express such
         a view, the Settlement System Administrator shall be so liable.

5.       JOB NUMBERS

          5.1  Job Numbers:  The Contract  Manager  shall ensure that each Order
               that he issues  shall have a Job  Number and a stated  objective.
               Where Orders issued by the Contract  Manager have a common stated
               objective they will bear a related Job Number.

          5.2  Extensions  to Orders:  Extensions  to Orders may be made only if
               the Order in  respect  of such  extension  bears the same  stated
               objective as the earlier Order.

6.       SUPPLEMENTAL PROVISIONS

6.1      Changing resources: Once the Contract Manager has become aware of the
         identity of a particular person to be allocated to a particular Order
         whose responsibilities include direct communication with the Executive
         Committee or the Contract Manager (as the case may be) in connection
         with that Order, that person shall not be changed without prior
         consultation with and the agreement of the Executive Committee or the
         Contract Manager.

6.2      Ordering ethos: The Executive Committee shall endeavour to place Orders
         that month on month maintain a steady level of resource requirement but
         shall have the right to place Orders at any level that varies
         reasonably from one month to the next provided that nothing in this
         sub-section shall prevent a Service Line being varied to a state where
         no Service is to be provided or can be Ordered thereunder.

          6.3  Resource  records:  The  Settlement  System  Administrator  shall
               maintain a record  showing by Job Number where a Service has been
               Ordered  but no work  delivered  or (as the case may be) no added
               value provided in the provision of that Service.

6.4      Dedication of resource: The resource represented by an Order shall be
         dedicated wholly and exclusively to the provision of the Service
         Ordered and shall not be made available to any third party or for any
         other purpose without the prior written consent of the Contract
         Manager.

6.5      Failure to supply resource: Where a resource has been Ordered but is
         not delivered in accordance with the terms of that Order, that resource
         shall be delivered at no further cost to Pool Members at such time or
         times as may be reasonably required by the Contract Manager and subject
         to such limits as may be agreed from time to time by the Account
         Manager and the Contract Manager.



<PAGE>


                                     PART F

                     ORDERING SERVICES: SPECIFIC PROVISIONS

1.       ORDERING PRODUCTION SERVICES

          1.1  Continuous  Production  Services:  The minimum period for which a
               Continuous Production Service can be Ordered is one month.

1.2      Volume changes: If there shall be a change in the volume of Continuous
         Production Services for which no Order has been given, the Settlement
         System Administrator shall promptly notify the Contract Manager who
         shall promptly issue an Order with retrospective effect for such
         change.

          1.3  Ad Hoc Production  Services:  The Contract Manager shall have the
               right to Order Ad Hoc Production  Services in accordance with the
               Menu of Production Services Prices.

2.       ORDERING CONSULTANCY SERVICES

          2.1  Minimum manpower periods:  The minimum periods for which manpower
               can be Ordered for Consultancy Services are:-

         (a)      if charged at the FSC Rate, one month;

         (b)      if charged at the ASC Rate, four months; and

         (c)      if charged at the SCR Rate, one day.

2.2      Extensions of manpower: If manpower of a particular skill category has
         been Ordered for Consultancy Services and the Contract Manager requires
         further manpower of that skill category for Consultancy Services with
         the same stated objective as the earlier Order, the Contract Manager
         may Order the extension of such manpower requirement:-

         (a)      where the earlier Order is charged at the ASC Rate, for one or
                  more whole months at the same rate upon giving at least one
                  month's prior notice to the Settlement System Administrator;
                  and

         (b)      where the earlier Order is charged at the SCR Rate, for one or
                  more periods of five days at the same rate upon giving at
                  least five working days' prior notice to the Settlement System
                  Administrator.

         Once the stated objective of a Consultancy Service has been achieved or
         otherwise satisfied, there shall be no extension of manpower under this
         sub-section 2.2 in relation to that stated objective.

2.3      Short Notice Ordering: If the Order for Consultancy Services is
         received by the Settlement System Administrator less than three working
         days before the date on which the Consultancy Service is required, the
         Settlement System Administrator shall use all reasonable endeavours to
         provide the necessary manpower but shall have no absolute obligation so
         to do. The Charge for Consultancy Services Ordered on such notice shall
         be the SCR Rate as referred to in sub-section 4.2(c) of Part G.

3.       ORDERING DEVELOPMENT SERVICES

3.1      Project Template: Subject to sub-section 3.5 below, Development
         Services shall be Ordered to a Project Template and the provisions of
         sub-sections 3.2 to 3.4 (inclusive) shall apply to any such Order. The
         Settlement System Administrator shall supply the Contract Manager with
         copies of Project Templates to the values agreed from time to time
         between the Account Manager and the Contract Manager.

          3.2  Minimum manpower periods:  The minimum periods for which manpower
               can be Ordered for Development Services are:-

         (a)      if charged at the FSC Rate, one month;

         (b)      if charged at the ASC Rate, four months; and

         (c)      if charged at the SCR Rate, one day.

3.3      Extensions of manpower: If manpower of a particular skill category has
         been Ordered for Development Services and the Contract Manager requires
         further manpower of that skill category for Development Services with
         the same stated objective as the earlier Order, the Contract Manager
         may Order the extension of such manpower requirement:-

         (a)      where the earlier Order is charged at the ASC Rate, for one or
                  more whole months at the same rate upon giving at least one
                  month's prior notice to the Settlement System Administrator;
                  and

         (b)      where the earlier Order is charged at the SCR Rate, for one or
                  more periods of five days at the same rate upon giving at
                  least five working days' prior notice to the Settlement System
                  Administrator.

         Once the stated objective of a Development Service has been achieved or
         otherwise satisfied, there shall be no extension of manpower under this
         sub-section 3.3 in relation to that stated objective.

3.4      Short Notice Ordering: If the Order for Development Services is
         received by the Settlement System Administrator less than three working
         days before the date on which the Development Service is required, the
         Settlement System Administrator shall use all reasonable endeavours to
         provide the necessary manpower but shall have no absolute obligation so
         to do. The Charge for Development Services Ordered on such notice shall
         be the SCR Rate as referred to in sub-section 5.3(c) of Part G.

3.5      Fixed Price: Notwithstanding the foregoing provisions of this Section
         3, the Contract Manager and the Settlement System Administrator may
         agree from time to time that Development Services shall be Ordered on a
         fixed price basis and, if so agreed, shall record the terms of that
         fixed price agreement (including payment terms) in writing.

4.       ORDERING NON-MENU SERVICES

         A Non-Menu Service may not be Ordered unless and until documentation
         recording the terms and conditions on which it is to be provided has
         been agreed as provided in Section 1 of Part C.

5.       REQUESTS BY DIRECTOR

         The Director or his staff may make requests for Services under and in
         accordance with Service Line 9 (Service to the Director General of
         Electricity Supply).

6.       INDIVIDUAL POOL MEMBER REQUESTS

         Individual Pool Members may make requests for Services under and in
         accordance with Service Line 10 (Service to CEO and Pool Members) or
         Service Line 11 (Listing and Load Modules).

7.       THIRD PARTY PROCUREMENT

7.1      Third Party Contract: Subject to sub-section 7.2 below, upon receipt of
         an Order and on and subject to the terms and conditions thereof, the
         Settlement System Administrator shall enter into or (as the case may
         be) amend, vary or modify (or agree to an amendment, variation or
         modification of) a contract or other arrangement with a third party for
         the provision of a resource to or for the benefit of the Settlement
         System Administrator to enable it to provide a Service the costs of
         which are to be passed directly to Pool Members (a "Third Party
         Contract"), but shall not do any of the foregoing in the absence of
         such an Order.

7.2      Exceptional circumstances:  If by reason of:-

          (a)  a term in any licence of Licensed Software (as defined in Section
               9 of Schedule 4); or

         (b) the Service requiring the provision of skill sets outside the
defined scope of the Manpower Menu of Prices; or

         (c) the Service requiring product knowledge outside the defined scope
of the SSA Arrangements,

         the Settlement System Administrator has no option but to contract with
         a third party for the provision of a resource to or for the benefit of
         the Settlement System Administrator to enable it to provide a Service,
         it shall request the Contract Manager to issue an Order to that effect
         and shall give a written explanation in support of that request and
         allow the Contract Manager sufficient time to consult the Executive
         Committee provided that the Contract Manager shall have no obligation
         to issue any such Order and, if no such Order is issued, the Settlement
         System Administrator shall not enter into any such contract.



<PAGE>


                                     PART G

                    CHARGES FOR SERVICES: GENERAL PRINCIPLES

1.       GENERAL

         The Settlement System Administrator shall have the right to charge Pool
         Members for Services it has provided or is to provide and to recover
         from them the charges set out in this Part G and in Part H upon and
         subject to the terms and conditions set out in such Parts. A summary of
         the charges recoverable by the Settlement System Administrator in
         respect of any month is set out in Section 9 below.

2.       CHARGES FOR PRODUCTION SERVICES

          2.1  Continuous  Production  Services:  The charge for each Continuous
               Production  Service shall be the  corresponding  price set out in
               the Menu of Production Services Prices.

          2.2  Ad Hoc Production Services: The charge for each Ad Hoc Production
               Service shall be the  corresponding  price set out in the Menu of
               Production Services Prices.

3.       CHARGES FOR SECOND TIER METERING

          3.1  Charges: The Settlement System Administrator shall have the right
               to charge  for the  provision  of  Services  in  Service  Line 14
               (Second Tier Metering) in accordance with the Menu of Second Tier
               Metering  Prices  (being  an  annex  to the  Menu  of  Production
               Services Prices).

          3.2  Separate Account:  The Settlement System Administrator shall open
               and maintain a separate account (the "STSSC Account") to which it
               shall  credit  monthly  -------------  the Second Tier  Suppliers
               System Charge received for that month.

          3.3  Debits against Account: The Settlement System Administrator shall
               debit the STSSC  Account  each month  with the amount  that it is
               entitled to charge in accordance  with  sub-section 3.1 above for
               the  provision  of  Services  in  Service  Line 14  (Second  Tier
               Metering).

          3.4  Interest:  Interest shall accrue and be chargeable on credit and
               debit balances on the STSSC Account as follows:-

               (a)  the Settlement System Administrator shall have the right to
                    charge  interest on any debit balance on the STSSC  Account;
                    and

               (b)  the Settlement System  Administrator shall be liable to pay
                    interest on any credit balance on the STSSC Account.

         The rate of interest shall be agreed from time to time between the
         Executive Committee and the Settlement System Administrator and shall
         accrue from day to day on the basis of a 365-day year on the credit or
         debit balances outstanding.

3.5      Over-recovery: If at the end of an Accounting Period there shall be a
         credit balance on the STSSC Account the Settlement System Administrator
         shall account for that balance to such persons as the Executive
         Committee shall direct.

4.       CHARGES FOR CONSULTANCY SERVICES

4.1      Standing Charge: The Settlement System Administrator shall have the
         right to recover in respect of each month the standing charge for
         Consultancy Services set out in the Menu of Consultancy Services
         Prices, whether or not Consultancy Services are Ordered or the volume
         of service under the relevant Service Line has been reduced to zero or
         the relevant Service Line cancelled. It is agreed that standing charges
         for Consultancy Services are applicable only to Service Lines 8
         (Service to Pool Auditor), 10 (Service to CEO and Pool Members), 12
         (Management of Settlement Change) and 13 (Consultancy, Committee
         Support and Training Services).

4.2  Manpower Charges:  The Settlement System Administrator shall have the right
     to charge for manpower provided or to be provided for Consultancy  Services
     at the following rates, subject as provided in sub-section 4.3 below:-

          (a)  if  the  Order  for  Consultancy  Services  is  received  by  the
               Settlement System Administrator 12 months or more before the date
               on which the Consultancy Service is required, the FSC Rate;

          (b)  if  the  Order  for  Consultancy  Services  is  received  by  the
               Settlement System  Administrator two or more months but less than
               12 months  before  the date on which the  Consultancy  Service is
               required, the ASC Rate;

         (c)      if the Order for Consultancy Services is received by the
                  Settlement System Administrator less than two months before
                  the date on which the Consultancy Service is required, the SCR
                  Rate; and

          (d)  if the Order  for  Consultancy  Services  is an  extension  of an
               existing  manpower  commitment in accordance with sub-section 2.2
               of Part F, at the relevant rate provided in that sub-section.

4.3      Revisions to charges: If in connection with Orders for Consultancy
         Services with the same stated objective the total period (being the
         original period and all extensions pursuant to sub-section 2.2 of Part
         F) for which manpower in a particular skill category charged by
         reference to:-

         (a)      the ASC Rate is provided equals or exceeds 12 months then,
                  from the date which is two months after receipt of the Order
                  which extends the total aggregate period for the provision of
                  such manpower up to or beyond 12 months, the Settlement System
                  Administrator shall charge for the provision of such manpower
                  at the FSC Rate provided that in no event shall the FSC Rate
                  apply within the minimum four month period referred to in
                  sub-section 2.1 of Part F; and

         (b)      the SCR Rate is provided equals or exceeds two months then,
                  from the date which is one month after receipt of the Order
                  which extends the total aggregate period for the provision of
                  such manpower up to or beyond two months, the Settlement
                  System Administrator shall charge for the provision of such
                  manpower at the ASC Rate provided that in no event shall the
                  SCR Rate apply within the two month period following the date
                  such manpower was first provided.

5.       CHARGES FOR DEVELOPMENT SERVICES

5.1      Standing Charge: The Settlement System Administrator shall have the
         right to recover in respect of each month the standing charge for
         Development Services set out in the Menu of Development Services
         Prices, whether or not Development Services are Ordered or the volume
         of service under the relevant Service Line has been reduced to zero or
         the relevant Service Line cancelled. It is agreed that standing charges
         for Development Services are applicable only to Service Lines 15
         (Design Authority), 18 (System Development) and 19 (System
         Integration).

5.2      Template Charging: Subject as provided in the following sub-sections of
         this Section 5, the Settlement System Administrator shall charge for
         Development Services Ordered to a Project Template in accordance with
         the terms of that Project Template.

          5.3  Manpower Charges:  The Settlement System Administrator shall have
               the right to charge for  manpower  provided or to be provided for
               Development  Services at the following rates, subject as provided
               in sub-section 5.4 below:-

               (a)  if the Order for  Development  Services  is  received by the
                    Settlement System Administrator 12 months or more before the
                    date on which the Development Services is required,  the FSC
                    Rate;

               (b)  if the Order for  Development  Services  is  received by the
                    Settlement System  Administrator two or more months but less
                    than 12  months  before  the date on which  the  Development
                    Service is required, the ASC Rate;

               (c)  if the Order for  Development  Services  is  received by the
                    Settlement System  Administrator less than two months before
                    the date on which the Development Services is required,  the
                    SCR Rate; and

               (d)  if the Order for Development  Services is an extension of an
                    existing manpower  commitment in accordance with sub-section
                    3.2 of  Part  F,  at the  relevant  rate  provided  in  that
                    sub-section.

5.4      Revisions to Charges: If in connection with Orders for Development
         Services with the same stated objective the total period (being the
         original period and all extensions pursuant to sub-section 3.2 of Part
         F) for which manpower in a particular skill category charged by
         reference to:-

         (a)      the ASC Rate is provided equals or exceeds 12 months then,
                  from the date which is two months after receipt of the Order
                  which extends the total aggregate period for the provision of
                  such manpower up to or beyond 12 months, the Settlement System
                  Administrator shall charge for the provision of such manpower
                  at the FSC Rate provided that in no event shall the FSC Rate
                  apply within the minimum four month period referred to in
                  sub-section 3.1 of Part F; and

         (b)      the SCR Rate is provided equals or exceeds two months then,
                  from the date which is one month after receipt of the Order
                  which extends the total aggregate period for the provisions of
                  such manpower up to or beyond two months, the Settlement
                  System Administrator shall charge for the provision of such
                  manpower at the ASC Rate provided that in no event shall the
                  SCR Rate apply within the two month period following the date
                  such manpower was first provided.

5.5      Fixed Charges: Notwithstanding the provisions of sub-sections 5.2, 5.3
         and 5.4 above, if Development Services have been Ordered on a fixed
         price basis in accordance with sub-section 3.5 of Part F, the
         Settlement System Administrator shall charge for such Development
         Services on the terms of the written fixed price agreement referred to
         in that sub-section and not on the terms of sub-sections 5.2, 5.3 and
         5.4 above (but without prejudice to the Settlement System
         Administrator's right to recover the standing charge referred to in
         sub-section 5.1 above).

6.       CHARGES FOR NON-MENU SERVICES

         The charge for each Non-Menu Service shall be the price set out in the
agreed documentation for the provision of such Non-Menu Service.

7.       THIRD PARTY PROCUREMENT COSTS

         In respect of any Third Party Contract where in accordance with the
         terms of the Order relating thereto the Third Party Costs are to be
         invoiced to the Settlement System Administrator and passed directly
         through to Pool Members, the Settlement System Administrator shall have
         the right to recover the Handling Charge in respect of such Third Party
         Costs.

8.       POOL DATA CATALOGUE FEES

8.1      Amount of Pool Data Catalogue Fees: The fee payable by a Party pursuant
         to Clause 34.2.1 (the "Pool Data Catalogue Fee") shall be determined
         from time to time by the Executive Committee and confirmed by Order,
         but shall not be less than the aggregate of (a) the cost to the
         Settlement System Administrator of providing all such data and other
         information or (as the case may be) such of it as is requested by such
         Party, and (b) the Handling Charge, provided that the Executive
         Committee may, in its discretion, determine that such fee shall be less
         than the aggregate of (a) and (b) but, in such event, such Order shall
         also specify that the difference between such fee and such aggregate
         amount shall be charged to all Pool Members as if it were a Third Party
         Cost.

8.2      Payment of Pool Data Catalogue Fees: The Pool Data Catalogue Fee shall
         be payable in arrears within 15 days after the issue by the Settlement
         System Administrator of an invoice therefor or within such other period
         as may be agreed from time to time by the relevant Party and the
         Settlement System Administrator. All such payments shall be made in
         sterling in cleared funds in full without set-off or counter-claim,
         withholding or deduction of any kind whatsoever but without prejudice
         to any other remedy.

8.3      Disputes: In the event of any dispute regarding payment of the Pool
         Data Catalogue Fee, a Party may not withhold payment of any invoiced
         amount therefor but may refer such dispute to arbitration in accordance
         with Clause 83 following payment.

8.4  Interest on non-payment:  The provisions of sub-section 3.3 of Part J shall
     apply  mutatis  mutandis  to  any  amount  due  to  the  Settlement  System
     Administrator  pursuant to  sub-section  8.2 above which is not received on
     the due date.

8.5      Absence of Order: In the absence of an Order confirming the Pool Data
         Catalogue Fee, the Settlement System Administrator may charge Parties a
         fee pursuant to Clause 34.2.1 equal to the aggregate of (a) the cost to
         the Settlement System Administrator of providing all such data and
         other information or (as the case may be) such of it as is requested by
         the relevant Party and (b) the Handling Charge.

9.       SUMMARY OF CHARGES RECOVERABLE

         In respect of any month the Settlement System Administrator shall have
         the right to recover from all Pool Members the following amounts in
         respect of Services provided or to be provided during that month:-

               (a)  charges for all Continuous  Production  Services provided or
                    to be provided during such month,  determined as provided in
                    sub-section 2.1 above;

               (b)  charges for all Ad Hoc Production Services provided or to be
                    provided  during  such  month,  determined  as  provided  in
                    sub-section 2.3 above;

               (c)  charges for the  provision  of  Services in Service  Line 14
                    (Second  Tier  Metering)  provided or to be provided  during
                    such month, determined as provided in sub-section 3.1 above;

               (d)  the  monthly  standing  charge  for  Consultancy   Services,
                    determined as provided in sub-section 4.1 above;

               (e)  charges  for  all  Consultancy  Services  provided  or to be
                    provided  during  each  month,  determined  as  provided  in
                    sub-section 4.2 above;

               (f)  the  monthly  standing  charge  for  Development   Services,
                    determined as provided in sub-section 5.1 above;

               (g)  charges  for  all  Development  Services  provided  or to be
                    provided  during  such  month,  determined  as  provided  in
                    sub-section 5.2 or 5.5 above;

               (h)  charges for Services  provided or to be provided during such
                    month  requested  by the  Director or his staff  pursuant to
                    Service  Line  9  (Service  to  the   Director   General  of
                    Electricity  Supply) (or a substitute Service Line in agreed
                    form);

               (i)  charges for all Non-Menu Services, determined as provided in
                    Section 6 above;

               (j)  Third Party Costs that have been invoiced to the  Settlement
                    System  Administrator  during such month,  and the  Handling
                    Charge in respect thereof;

               (k)  the  shortfall  (if  any)  in the  Minimum  Manpower  Charge
                    Commitment, determined as provided in Section 10 below; and

               (l)  any  charges  which  are  expressed  in  this  Agreement  as
                    recoverable "in accordance with the Charging Procedure"

         provided that with the exception of:-

               (i)  the  recovery  of  the  standing   charges  for  Consultancy
                    Services and Development Services;

               (ii) until such time as an ordering  procedure is agreed  between
                    the  Settlement  System   Administrator  and  the  Executive
                    Committee,  the recovery of charges for Services referred to
                    in paragraph (c) above;

               (iii)the  recovery  of  charges  for  Services   referred  to  in
                    paragraph (h) above;

               (iv) the  recovery  of  the  Monthly   Minimum   Manpower  Charge
                    Commitment;

               (v)  the recovery of the Minimum Contract Price; and

               (vi) the recovery of charges for Services referred to in Sections
                    (2)(b) and 2(e) of Part E,

         the Settlement System Administrator shall not have the right to recover
         charges in respect of Services provided or to be provided unless an
         Order in respect of those Services has been received by the Settlement
         System Administrator.

               10.  MONTHLY MINIMUM MANPOWER CHARGE COMMITMENT

               10.1 Monthly  recovery:  If in respect of any month the aggregate
                    of the  charges  referred  to in  paragraphs  (e) and (g) of
                    Section  9 above  shall  be less  than the  Monthly  Minimum
                    Manpower   Charge   Commitment,    the   Settlement   System
                    Administrator  shall have the right to recover the amount of
                    such shortfall without an Order.

10.2     Reconciliation procedure: A reconciliation of the Services provided
         against the amounts received on account of the Monthly Minimum Manpower
         Charge Commitment shall be carried out at the times and in the manner
         provided in sub-section 6.2 of Part D, and any resultant adjustment
         shall be taken into account in the next invoice for Post Charges to be
         issued under Part J.

11.      MINIMUM CONTRACT PRICE

11.1     Annual recovery: If in respect of any SSA Accounting Period the
         aggregate of the charges referred to in paragraphs (a), (b), (d), (e),
         (f), (g) and (k) of Section 9 above (but excluding any such charges
         under paragraphs (a), (b), (e) and (g) of Section 9 referable to
         Services provided under Service Lines 9, 11, 14, 16, 17, 18 and 21)
         recovered for all months in such SSA Accounting Period shall be less
         than the Minimum Contract Price, the Settlement System Administrator
         shall have the right to recover the amount of such shortfall without an
         Order in the first monthly invoice to be issued under Part J after the
         end of such SSA Accounting Period.

11.2     Monthly recovery: If in any SSA Accounting Period it appears to the
         Account Manager (acting reasonably) after consultation with the
         Contract Manager and by reference to Orders received that the sum of
         the charges referred to in sub-section 11.1 above for the remainder of
         such SSA Accounting Period when aggregated with the sum of such charges
         already recovered in such SSA Accounting Period will be less than the
         Minimum Contract Price, the amount of such shortfall may be recovered
         without an Order in monthly instalments over the remaining months of
         such SSA Accounting Period, the amount of such instalments being agreed
         in advance by the Contract Manager and the Account Manager, such
         agreement not to be unreasonably withheld.

11.3     Minimum Contract Price: The Minimum Contract Price in respect of any
         SSA Accounting Period shall be the amount set out against such SSA
         Accounting Period in the document entitled Minimum Contract Price Menu
         in the agreed form.



<PAGE>


                                     PART H

                     CHARGES FOR SERVICES: EXCEPTIONAL ITEMS

1.       EXTENSION PERIOD CHARGES

         The Settlement System Administrator shall be entitled to charge in
         accordance with the Charging Procedure for all and any Services
         provided during the Extension Period by the Settlement System
         Administrator as follows:-

         (a) where the first Extension Notice is served on the Settlement System
Administrator at least six months before the Termination Date:-

                  (i)     for the first three months of all Extension Periods
                          (taken together), the Settlement System Administrator
                          shall be entitled to charge for Services in accordance
                          with the appropriate rates for those Services in the
                          relevant Menu of Prices multiplied by 1.0; and

                  (ii)    for the second three months of all Extension Periods
                          (taken together), the Settlement System Administrator
                          shall be entitled to charge for Services in accordance
                          with the appropriate rates for those Services in the
                          relevant Menu of Prices multiplied by 1.1; and

                  (iii)   for any period thereafter, the Settlement System
                          Administrator shall be entitled to charge for Services
                          in accordance with the appropriate rates for those
                          Services in the relevant Menu of Prices multiplied by
                          1.2;

         (b)      where the first Extension Notice is served on the Settlement
                  System Administrator less than six months but more than three
                  months before the Termination Date:-

                  (i)     for the first three months of all Extension Periods
                          (taken together), the Settlement System Administrator
                          shall be entitled to charge for Services in accordance
                          with the appropriate rates for those Services in the
                          relevant Menu of Prices multiplied by 1.1; and

                  (ii)    for any period thereafter, the Settlement System
                          Administrator shall be entitled to charge for Services
                          in accordance with the appropriate rates for those
                          Services in the relevant Menu of Prices multiplied by
                          1.2; and

         (c)      where the first Extension Notice is served on the Settlement
                  System Administrator less than three months before the
                  Termination Date, the Settlement System Administrator shall be
                  entitled to charge for Services in the Extension Period in
                  accordance with the appropriate rates for those Services in
                  the relevant Menu of Prices multiplied by 1.2.

         If the aggregate of any additional or consequential costs (other than
         manpower costs) properly incurred in any Extension Period and reported
         on by the auditor of the Settlement System Administrator exceeds the
         aggregate of the incremental rates charged in any such Extension Period
         in accordance with paragraphs (a) to (c) above the amount of such cost
         shall be recoverable by the Settlement System Administrator.

2.       BAD DEBTS

         The total cost of any bad debts (including interest thereon) of the
         Settlement System Administrator in providing the Services and arising
         in any SSA Accounting Period may be recovered by the Settlement System
         Administrator in any subsequent SSA Accounting Period as if it were a
         Third Party Cost (but the Settlement System Administrator shall not
         have the right to recover the Handling Charge in respect thereof).

3.       NEW TAXES OR NEW LEGISLATION

3.1      New taxes: If by reason of the introduction of a new tax (other than a
         tax on overall net income) the cost to the Settlement System
         Administrator of providing the Services is increased or the amount of
         any payment received or receivable by the Settlement System
         Administrator under the SSA Arrangements for providing the Services is
         reduced, then:-

         (a)      forthwith upon becoming aware of the happening of such event
                  the Settlement System Administrator shall notify the Executive
                  Committee who shall thereupon notify the Pool Members;

         (b)      the Settlement System Administrator shall, as soon as is
                  reasonably practicable, give the Executive Committee (who
                  shall thereupon notify the Pool Members) a certificate giving
                  details of the new tax and the amount of such additional cost
                  or reduction and the calculation thereof and the period to
                  which it applies together with a report from its auditors
                  confirming that they have reviewed the basis of the
                  calculation of the additional cost or reduction and confirming
                  the accuracy of the calculation; and

         (c)      subject to the Settlement System Administrator complying with
                  its obligations under paragraphs (a) and (b) above, the
                  Settlement System Administrator shall have the right to
                  recover from Pool Members the amount of such additional cost
                  or reduction through an adjustment to the Menus of Prices or
                  in such other manner as may be agreed with the Executive
                  Committee as will in either case ensure that the Settlement
                  System Administrator is kept whole in respect of such
                  additional cost or reduction.

3.2      New legislation: If at any time the Settlement System Administrator
         becomes subject to either a new statute passed by the government of the
         United Kingdom or a new European Union regulation which is directly
         applicable, in either case under which the Settlement System
         Administrator is obliged to act in a manner which materially increases
         the cost to it of providing the Services then it shall notify the
         Executive Committee of such a change and if the Executive Committee is
         satisfied, in its sole discretion, that:-

               (a)  the  Settlement  System  Administrator  is obliged to act in
                    accordance with the new legislation; and

               (b)  the cost to the Settlement System Administrator of providing
                    the  Services as a whole will be  materially  increased as a
                    result of complying with such legislation,

         the Executive Committee shall enter into good faith negotiations with
         the Settlement System Administrator to agree (but with no absolute
         obligation on the Executive Committee or the Settlement System
         Administrator to agree) amendments to the Menus of Prices to reflect
         such increased costs.

4.       EXCEPTIONAL ITEMS

         If, where Service Line 21 (Emergency Services) is invoked by the
         Executive Committee, the Settlement System Administrator shall
         necessarily incur additional costs in running the Settlement Business
         during a Security Period, those costs shall be regarded as beyond the
         control of the Settlement System Administrator and the Settlement
         System Administrator may recover the same, together with an
         administration charge of 2.5 per cent., as if they were Third Party
         Costs (but shall not have the right to recover the Handling Charge in
         respect thereof) provided that such costs have been verified as
         additional costs by the Settlement System Administrator's auditors.
         Pool Members shall be obliged to pay the actual amount of such costs
         and all reasonable costs of the Settlement System Administrator's
         auditors in verifying the same.

5.       MARKET TEST COSTS

         Where any market test is commissioned by the Executive Committee, Pool
Members shall be liable according to their Contributory Shares for:-

               (a)  all Third Party Costs (if any) incurred in  contracting  for
                    the market test services; and

               (b)  all costs (if any) directly and properly incurred by ESIS in
                    appraising  the  result  of  a  market  test  of  which  the
                    Settlement  System  Administrator  has  been  asked  to take
                    account  pursuant  to  sub-section  9.3  of  Part  B and  in
                    requesting clarification of the method and clarification and
                    correction of the results thereof.

6.       PIP REBATES

         If as a result of the implementation of a Performance Improvement
         Programme there shall be any rebate due to Pool Members in respect of
         the charges of the Settlement System Administrator for the provision of
         Services, Pool Members will be credited a proportionate sum of such
         rebate according to their Contributory Shares in the next invoice
         issued by the Settlement System Administrator under Part J.



<PAGE>



                                     PART J

                                  COST RECOVERY

1.       CHARGES RECOVERABLE BY THE SETTLEMENT SYSTEM ADMINISTRATOR

         The Settlement System Administrator shall have the right to recover
         from all Pool Members all sums due to it from them under the SSA
         Arrangements provided that such sums are invoiced in accordance with
         this Part. All sums to be recovered must be included in an invoice for
         Prior Charges or an invoice for Post Charges. In respect of any month,
         the amounts invoiced on an invoice for Prior Charges and on an invoice
         for Post Charges shall together be known as the Total Sum Due in
         respect of that month.

2.       INVOICING

2.1      Invoice Statement for Prior Charges: The Settlement System
         Administrator shall send the Contract Manager an invoice statement for
         Prior Charges in the agreed form in respect of each month no later than
         45 days prior to the commencement of such month.

2.2  Content of Invoice  Statement:  Each invoice  statement  for Prior  Charges
     shall  specify the amount due in respect of Services to be provided  during
     the relevant month as follows:-

         (a)      the charge for Continuous Production Services;

         (b)      the monthly standing charge for Consultancy Services;

         (c)      the monthly standing charge for Development Services;

         (d)      the greater of (i) the Monthly Minimum Manpower Charge
                  Commitment and (ii) the charges for manpower Ordered for that
                  month in connection with Consultancy Services and Development
                  Services at the FSC and ASC Rates; and

          (e)  (i)  one-twelfth  of the  Suppliers  Second  Tier Charge for that
               Accounting Period; and

                  (ii)    the anticipated under-recovery (if any) in the
                          Accounting Period to date of charges for the provision
                          of Services in Service Line 14 (Second Tier Metering),
                          plus or minus the interest accrued on the debit or
                          credit balance (as the case may be) on the STSSC
                          Account.

2.3      Invoice Statement for Post Charges: The Settlement System Administrator
         shall send the Contract Manager an invoice statement for Post Charges
         in the agreed form in respect of each month no later than ten days
         after the end of such month.

2.4      Content of Invoice Statement: Each invoice statement for Post Charges
         shall specify the amount due in respect of Services provided during the
         relevant month and not contained in the invoice statement for Prior
         Charges for such month as follows:-

          (a)  the charge for Continuous  Production  Services not charged under
               sub-section 2.2(a) above;

          (b)  the charge for Ad Hoc Production Services;

          (c)  the charge for Consultancy  Services and Development Services not
               charged under sub-section 2.2(d) above;

          (d)  the charge for Non-Menu Services;

          (e)  any Third  Party  Costs  together  with the  associated  Handling
               Charge;

          (f)  any charges for Services  provided during such month requested by
               the  Director or his staff under  Service  Line 9 (Service to the
               Director General of Electricity Supply); and

         (g) any charges for items expressly stated to be otherwise recoverable
"in accordance with the Charging Procedure".

2.5      Disputes: The Contract Manager shall raise, in writing, any concerns in
         relation to any such invoice statements as are referred to in
         sub-section 2.1 or 2.3 above within five working days of receipt of the
         same, but shall not be precluded from raising any such concerns at any
         later stage. If any concerns are not settled by the date the invoices
         are required to be despatched to Pool Members, such invoices may be
         despatched by the Settlement System Administrator on the basis it
         reasonably believes to be correct insofar as they relate to Prior
         Charges or Post Charges which are not disputed by the Contract Manager.
         Any Prior Charges or Post Charges which are believed in good faith to
         be wrong by the Contract Manager and continue to be disputed in good
         faith may not be included in any invoice until the amount outstanding
         has been settled between the Settlement System Administrator and the
         Contract Manager. Where, after investigation, it is agreed between the
         Contract Manager and the Settlement System Administrator that the
         amount disputed has in fact been correctly calculated by the Settlement
         System Administrator, the Settlement System Administrator shall have
         the right to charge interest on such Prior Charges or Post Charges in
         accordance with and on the basis set out in sub-section 3.3 below from
         the date upon which they would have been due for payment if undisputed.
         Any adjustment following settlement of outstanding concerns will be
         made through the next invoice issued under this Part.

2.6  Invoices to Pool Members:  The Settlement System  Administrator  shall send
     each Pool Member an invoice:-

          (a)  in  respect of an invoice  for Prior  Charges,  no later than the
               first day of the month prior to the month in respect of which the
               relevant charges are to be recovered; and

         (b) in respect of an invoice for Post Charges, no later than ten days
after such statement is sent to the Contract Manager,

         in each case for an amount determined in accordance with Part K.

2.7      Resignation or removal of the Settlement System Administrator: Where
         the Settlement System Administrator resigns in accordance with Section
         14 of Schedule 4 or is removed in accordance with Section 17 of
         Schedule 4, the Settlement System Administrator shall be responsible
         for all Transition Costs.
         Accordingly:-

          (a)  Orders placed by Pool Members cannot be used to defray Transition
               Costs; and

         (b) the Settlement System Administrator shall not include any
Transition Costs in any future invoice statements.

3.       PAYMENTS

3.1      Payments by Pool Members: Pool Members shall settle any invoices
 delivered to them pursuant to Section 2 above on, and the due date for payment
 shall be:-

          (a)  in the case of an invoice for Prior Charges, the last working day
               of the month  prior to the month in respect of which the  charges
               relate; and

          (b)  in the case of an invoice for Post Charges,  the last working day
               of the month in which the invoice is delivered to Pool Members.

          All  amounts  shall be paid in sterling  in cleared  funds and in full
               without set-off or counter claim, withholding or deduction of any
               kind  whatsoever but without  prejudice to any other remedy.  All
               charges are  exclusive  of United  Kingdom  Value Added Tax which
               shall be added to such charges, if applicable.

3.2      Disputes: If there is any dispute regarding charges in any month, a
         Pool Member may not withhold payment of any invoiced amount but, for
         the avoidance of doubt, may refer such dispute to arbitration in
         accordance with Clause 83 following payment.

3.3      Interest on non-payment: If any amount due to the Settlement System
         Administrator is not received on the due date the Pool Member is
         required to pay such amount, such Pool Member shall pay interest to the
         Settlement System Administrator on such amount from and including the
         date of default up to but excluding the date of actual payment (after
         as well as before judgment) at the rate which is 4 per cent. per annum
         above the base rate from time to time during each period of default of
         National Westminster Bank plc.

3.4      Payment of charges: Each Pool Member shall pay its due proportion of
 the Settlement System Administrator's charges for each SSA Accounting Period
         determined in accordance with Part K.

4.       ALLOCATION OF CHARGES

4.1      Allocation: The Settlement System Administrator shall allocate its
 charges amongst Pool Members in accordance with Part K.

4.2      New and former Pool Members: Any Pool Member which is a Pool Member for
         part only of any month shall pay charges on an interim basis of such
         amount apportioned on a daily basis for each day that it was a Pool
         Member during that month on the basis of the allocation of charges set
         out in Part K. Adjustments to charges on all Pool Members as a result
         of existing Pool Members leaving or new Pool Members joining will be
         set out in the invoice published for the Post Charges for the relevant
         month whereupon the Pool Members and/or former Pool Members shall be
         required to pay such additional amount or shall be entitled to such
         reimbursement.



<PAGE>


                                     PART K

                              ALLOCATION OF CHARGES

1.       THE SETTLEMENT SYSTEM ADMINISTRATOR'S CHARGES

1.1      Payment of Total Sum Due: Each Pool Member shall be obliged to pay the
         amount allocated to it in accordance with this Part K. The total
         aggregate amount allocated to all Pool Members in respect of any month
         shall equal the Total Sum Due in respect of such month.

1.2      Allocation of Total Sum Due: The Total Sum Due in respect of each
 month shall be allocated amongst Pool Members as follows:-

         (a)      first, each Pool Member:-

                  (i)     shall pay the costs (if any), as detailed in the
                          relevant invoice, associated with any change to the
                          Software necessitated by such Pool Member's request
                          for:-

                          (A) data from Settlement additional to that which is
generally provided to other Pool Members of the same class; or

                          (B)      for reporting of data in a format different
                                   from that in which data are generally
                                   provided to other Pool Members of the same
                                   class

                          (which costs shall, in the first SSA Accounting Period
                          that they are charged to such Pool Member, have added
                          to them a single lump sum payment for maintenance
                          equal to 40 per cent. of the costs of such charge, as
                          reasonably determined by the Settlement System
                          Administrator);

                  (ii)    shall pay the costs (if any and as far as the same are
                          directly referable to such Pool Member) for the use by
                          such Pool Member of electronic mail, the provision and
                          maintenance of telecommunication circuits from data
                          collector outstations and any other services procured
                          or provided by the Settlement System Administrator
                          which are directly referable to such Pool Member; and

                  (iii) if it is a Supplier, shall pay its Supplier's Second
Tier Charge for that month;

         (b)      secondly:-

                  (i)     each Generator shall pay (pound)500 (or such other
                          amount as the Executive Committee and the Settlement
                          System Administrator may agree) for each of its
                          Generating Units in respect of which standing data
                          have been submitted; and

                  (ii)    each Pool Member shall pay (pound)750 (or such other
                          amount as the Executive Committee and the Settlement
                          System Administrator may agree) for each Metering
                          System in respect of which it is the Registrant;

          (c)  thirdly,  but  only  in  respect  of the  first  month in an SSA
               Accounting  Period in which a  Generator  or  Supplier is a Pool
               Member:-

                  (i) subject as provided in paragraphs (ii) to (vii) inclusive
below, each Pool Member shall pay an annual membership fee as follows:-

           Category                                                         Fee
 (A)           Small
 (1)           A Supplier with a maximum demand at any time       (pound) 9,000
               during such year (as reasonably
               determined by the Executive Committee)
               of less than 200MW or a Generator with
               an aggregate Registered Capacity of
               less than 50MW (other than a Supplier
               or Generator referred to in (2) below)
 (2)           A Supplier with a maximum demand at any time       (pound) 2,500
               during such year (as reasonably determined by
               Executive Committee) of less than 200MW or a
               Generator with aggregate Registered Capacity
               of less than 50MW, in either case which
               requires to have delivered to it only its own
               trading information
 (B)           Intermediate
               A Supplier with a maximum demand at
               any time (pound)20,000 during such
               year (as reasonably determined by the
               Executive Committee) of 200MW or more
               up to (but excluding) 2000MW or a
               Generator with aggregate Registered
               Capacity of 50MW or more up to (but
               excluding) 1000MW
 (C)           Large
               A Supplier with a maximum demand at
               any time (pound)45,000 during such
               year (as reasonably determined by the
               Executive Committee) of 2000MW or more
               or a Generator with aggregate
                                 Registered Capacity of 1000MW or more
         (ii)    any Pool Member which is both a Generator and a
                 Supplier shall pay only one membership fee, being that
                 fee which is the greater of its annual membership fee
                 as a Generator and its annual membership fee as a
                 Supplier (and, if both are the same amount, such Pool
                 Member shall pay only its membership fee as a
                 Generator): such fee shall continue to be payable
                 regardless of any change during the relevant year in
                 the capacity(ies) in which such Pool Member
                 participates as a Pool Member;

         (iii)   unless otherwise resolved by the Executive Committee
                 with respect to the relevant Pool Member, a Pool
                 Member with no demand or generation shall not pay any
                 membership fee and, if the Executive Committee shall
                 so resolve, shall pay only that membership fee
                 referable to a Pool Member falling within the relevant
                 sub-category of paragraph (i)(A) above;

         (iv) if, in its reasonable opinion, the Executive Committee
considers:-

                          (A)      any Pool Member (not being a Pool Member
                                   referred to in paragraph (iii) above) to be
                                   insignificant in terms of generation or
                                   demand, it may waive the membership fee for
                                   such Pool Member until further notice; and

                          (B)      if inequitable or otherwise inappropriate to
                                   levy the full amount of the membership fee
                                   that would otherwise be payable by any Pool
                                   Member, it may waive all or part of such fee
                                   on such terms and for such period(s) as it
                                   reasonably sees fit;

                  (v)              (A) any Pool Member falling within
                                   sub-category (2) of paragraph (i)(A) above
                                   which wishes to receive data by electronic
                                   mail shall be required to pay an additional
                                   monthly membership fee of one-twelfth of
                                   (pound)800; and

                          (B)      any Pool Member which wishes to receive data
                                   by courier shall be required to pay an
                                   additional monthly membership fee of
                                   one-twelfth of (pound)1,000;

                  (vi)    the Executive Committee may from time to time amend
                          the categories of membership and the fees (with the
                          consent of the Settlement System Administrator, such
                          consent not to be unreasonably withheld or delayed);

                  (vii)   the charges referred to in paragraph (b) above and in
                          this paragraph (c) shall be adjusted in relation to
                          each Pool Member, Generator or Supplier, as the case
                          may be, by reference to the number of days during each
                          year for which such Party was a Pool Member and (where
                          appropriate) the number of Generating Units or
                          Metering Systems allocated to it during such period;

         (d)      fourthly, 100 per cent. of the balance of the Total Sum Due
                  during any month not recovered pursuant to paragraphs (a) to
                  (c) (inclusive) above shall be allocated amongst all Pool
                  Members during such month by reference to the Contributory
                  Shares of each Pool Member.

                           For this purpose, each Pool Member's due proportion
                  of the charges shall be assessed first by reference to the
                  then latest Contributory Shares of all Pool Members calculated
                  by the Executive Committee for the period and each part
                  thereof to which such charges relate (or, if and to the extent
                  that the charges relate to a period for which no such
                  calculation has yet been made, by reference to the then most
                  recently calculated current Contributory Shares of all Pool
                  Members) and shall thereafter be readjusted from time to time
                  for each day within the relevant period following changes to
                  the Contributory Shares of Pool Members for all or any part of
                  such period or (as the case may be) following the calculation
                  of the Contributory Shares for such period.

                  Provided that, in calculating the balance of the Total Sum Due
                  payable by each Pool Member in any month, the annual
                  membership fee payable by each Pool Member in accordance with
                  paragraph (c) above shall be divided by the number of complete
                  months in the SSA Accounting Period remaining after the date
                  of payment of such annual membership fee and the resultant
                  figure (after rounding to the nearest (pound)1) shall be
                  credited to the relevant Pool Member for offset against its
                  proportionate share of the Total Sum Due for each such
                  remaining month.

          1.3  Prima  facie  evidence:  The  Settlement  System  Administrator's
               determination  of the  allocation  of all costs  during any month
               shall, in the absence of
         manifest error, be prima facie evidence thereof.

          1.4  Contributory  Shares: The Settlement System  Administrator  shall
               advise  each Pool Member of its  Contributory  Share and how such
               Contributory Share is calculated.



<PAGE>


                                   SCHEDULE 5

                          Form of Admission Application

The Executive Committee for the
Pooling and Settlement System in England and Wales

Dear Sir,

1. We [insert full legal name and address of registered/principal office of
applicant] refer to the Pooling and Settlement Agreement for the electricity
industry in England and Wales dated 30th March, 1990 (as amended, varied,
supplemented, modified or suspended, the "Pooling and Settlement Agreement").

2. Unless the context otherwise requires, words and expressions defined in the
Pooling and Settlement Agreement shall bear the same meanings respectively when
used herein.

3.   We hereby  apply to be admitted as an  additional  party to the Pooling and
     Settlement  Agreement pursuant to Clause 3 thereof.  We wish to participate
     as a [[Generator]/[Supplier]/[Externally Interconnected Party]]*.

4.       We confirm that:-

          (A)**(i) we have been  granted  and have in full  force  and  effect a
               Generation   Licence  or  we  have  made  and  have   current  an
               application for such a licence; or

          (ii) we are exempted from the obligation to hold a Generation  Licence
               by reason of an exemption under section 5 of the Act; or

          (iii)we have entered into an Interconnection  Agreement under which we
               will, subject to becoming a Pool Member,  have the right (whether
               alone or together  with others) then or at any time in the future
               to use all or any  part of an  External  Interconnection  for the
               delivery of electricity to the NGC Transmission System; or

          (iv) we are acting as the agent for a person  generating  or proposing
               to generate  electricity  on terms  whereby we have the exclusive
               right to all the  output  of  those  Generating  Unit(s)  of such
               person and in respect of which we have been appointed agent;

          (B)*** (i) we have been  granted  and have in full  force and effect a
               PES Licence or a Second  Tier Supply  Licence or we have made and
               have current an application for such a licence; or

                    (ii)  we are exempted from the obligation to hold a PES
                          Licence or (as the case may be) a Second Tier Supply
                          Licence by reason of an exemption under section 5 of
                          the Act; or

                    (iii) we have entered into an Interconnection Agreement
                          under which we will, subject to becoming a Pool
                          Member, have the right (whether alone or together with
                          others) then or at any time in the future to use all
                          or any part of an External Interconnection for the
                          taking of electricity from the NGC Transmission
                          System;

         (C)              (i) we are [or [ ] (being our agent and a person which
                          the Executive Committee has confirmed in writing to us
                          is acceptable to the Executive Committee, a copy of
                          which confirmation is enclosed) is]* registered for
                          United Kingdom Value Added Tax purposes;

                    (ii)  we have [or our agent has]* so arranged matters that
                          any payment receivable by us under or pursuant to the
                          Pooling and Settlement Agreement will constitute for
                          United Kingdom Value Added Tax purposes the
                          consideration for a taxable supply made in the United
                          Kingdom by us [or our agent]* as a taxable person in
                          the United Kingdom in the course of furtherance of a
                          business;

                    (iii) we have [or our agent has]* so arranged matters that
                          any payment required to be made by us under or
                          pursuant to the Pooling and Settlement Agreement will
                          constitute for United Kingdom Value Added Tax purposes
                          the consideration for a taxable supply made in the
                          United Kingdom to us [or our agent]*; and

                    (iv)  in any case where any electricity has been or will be
                          generated or produced by us outside the United
                          Kingdom, we have [or our agent has]* so arranged
                          matters that any import thereof for the purposes of or
                          otherwise in connection with the Pooling and
                          Settlement Agreement will constitute for United
                          Kingdom Value Added Tax purposes an importation or
                          acquisition of goods solely by us [or our agent]* and
                          so not by any other Party.

5. We hereby represent and warrant to the Executive Committee (for itself and on
behalf of all the Parties) that:-

          (A)  we are duly organised and validly  existing under the laws of the
               jurisdiction of our organisation or incorporation;

          (B)  we have the power to execute and deliver our Accession  Agreement
               and any other  documentation  relating to that  Agreement  or the
               Pooling and Settlement Agreement and such other agreements as are
               required  thereby and to perform  our  obligations  hereunder  or
               thereunder  and we have taken all  necessary  action to authorise
               such execution, delivery and performance; and

          (C)  such  execution,  delivery  and  performance  do not  violate  or
               conflict  with any law  applicable  to us, any  provision  of our
               constitutional  documents,  any order or judgment of any court or
               other agency of government  applicable to us or any of our assets
               or any  contractual  restriction on or affecting us or any of our
               assets.

         We confirm that these representations and warranties will also be true
and correct in all material respects at the date of our admission as a New
Party.

6.       We enclose the application fee of (pound)[   ].****

7.       We accept and agree to be bound by the terms of Clause 3 of the 
         Pooling and Settlement Agreement.

                                                       Yours faithfully,

                                        

                      duly authorised for and on behalf of


-----

*    Complete/delete as appropriate.
**   Include paragraph (A) if applying to be admitted as a Generator.
***  Include paragraph (B) if applying to be admitted as a Supplier.
**** Insert current application fee prescribed by the Executive Committee.



<PAGE>


                                   SCHEDULE 6

                       Form of Pool Membership Application

The Executive Committee for the
Pooling and Settlement System in England and Wales.

Dear Sir,

1. We [insert full legal name and address of registered/principal office of
applicant] refer to the Pooling and Settlement Agreement for the electricity
industry in England and Wales dated 30th March, 1990 (as amended, varied,
supplemented, modified or suspended, the "Pooling and Settlement Agreement").

2. Unless the context otherwise requires, words and expressions defined in the
Pooling and Settlement Agreement shall bear the same meanings respectively when
used herein.

3. We hereby apply to be admitted as a Pool Member pursuant to Clause 8.2 of the
Pooling and Settlement Agreement. We wish to participate as a
[[Generator]/[Supplier]/[and an External Pool Member]]*.

4.       We confirm that:-

          (A)**(i) we have been  granted  and have in full  force  and  effect a
               Generation Licence; or

          (ii) we are exempted from the obligation to hold a Generation  Licence
               by reason of an exemption under section 5 of the Act; or

          (iii)we have entered into an Interconnection  Agreement under which we
               will, subject to becoming a Pool Member,  have the right (whether
               alone or together  with others) then or at any time in the future
               to use all or any  part of an  External  Interconnection  for the
               delivery of electricity to the NGC Transmission System; or

          (iv) we are acting as the agent for a person  generating  or proposing
               to generate  electricity  on terms  whereby we have the exclusive
               right to all the  output  of  those  Generating  Unit(s)  of such
               person and in respect of which we have been appointed agent;

          (B)*** (i) we have been  granted  and have in full  force and effect a
               PES Licence or a Second Tier Supply Licence; or

          (ii) we are exempted from the  obligation to hold a PES Licence or (as
               the case may be) a Second  Tier  Supply  Licence  by reason of an
               exemption under section 5 of the Act; or

          (iii)we have entered into an Interconnection  Agreement under which we
               will, subject to becoming a Pool Member,  have the right (whether
               alone or together  with others) then or at any time in the future
               to use all or any  part of an  External  Interconnection  for the
               taking of electricity from the NGC Transmission System;

          (C)  with effect from the date of our  admission as a Pool Member,  we
               will accede as a party to the Funds Transfer Agreement and to the
               Deed of Indemnity in favour  (inter alia) of the Chief  Executive
               in accordance with their respective terms;

          (D)  on or  before  our  admission  as a Pool  Member,  we will open a
               Settlement   Account  and  comply   with  all  other   applicable
               requirements  of  Schedule  11  to  the  Pooling  and  Settlement
               Agreement;

          (E)  (i) we are [or [ ]  (being  our  agent  and a  person  which  the
               Executive  Committee has confirmed in writing to us is acceptable
               to the  Executive  Committee,  a copy of  which  confirmation  is
               enclosed)  is]*  registered  for United  Kingdom  Value Added Tax
               purposes;

                    (ii)  we have [or our agent has]* so arranged matters that
                          any payment receivable by us under or pursuant to the
                          Pooling and Settlement Agreement will constitute for
                          United Kingdom Value Added Tax purposes the
                          consideration for a taxable supply made in the United
                          Kingdom by us [or our agent]* as a taxable person in
                          the United Kingdom in the course of furtherance of a
                          business;

                    (iii) we have [or our agent has]* so arranged matters that
                          any payment required to be made by us under or
                          pursuant to the Pooling and Settlement Agreement will
                          constitute for United Kingdom Value Added Tax purposes
                          the consideration for a taxable supply made in the
                          United Kingdom to us [or our agent]*; and

                    (iv)  in any case where any electricity has been or will be
                          generated or produced by us outside the United
                          Kingdom, we have [or our agent has]* so arranged
                          matters that any import thereof for the purposes of or
                          otherwise in connection with the Pooling and
                          Settlement Agreement will constitute for United
                          Kingdom Value Added Tax purposes an importation or
                          acquisition of goods solely by us [or our agent]* and
                          so not by any other Party; and

         (F)****

                    Option 1

                    we have entered into and have in full force and effect (or,
                    prior to our admission as a Pool Member, will enter into and
                    have in full force and effect) all appropriate Connection
                    Agreements;

                                      - or -

                    Option 2

          all  appropriate  Connection  Agreements  with [ ], being the relevant
               Externally  Interconnected  Party,  in relation to [ ], being the
               relevant External Interconnection, are in full force and effect.

5.       We enclose:-

         [insert details of evidence in support of fulfilment of the other Pool
         Membership Conditions set out in Clause 8.3 of the Pooling and
         Settlement Agreement].

                                                Yours faithfully,

                                     -------------------------------

                                 duly authorised for and on behalf of
                                  [insert full legal name of the applicant]

---------------------------------------------------------------------------

*        Complete/delete as appropriate.
**       Include paragraph (A) if applying to be admitted as a Generator.
***      Include paragraph (B) if applying to be admitted as a Supplier.
****     Include Option 2 if applying to be admitted as an External Pool
 Member.  Otherwise include Option 1.



<PAGE>


                                   SCHEDULE 7

                            Form of Escrow Agreement

THIS AGREEMENT is made on [                                ]
BETWEEN:-

(1)      NGC SETTLEMENTS LIMITED (registered number 2444282) whose registered
         office is situate at National Grid House, Sumner Street, London SE1 9JU
         for itself and on behalf of the Pool Members (as defined in the Pooling
         and Settlement Agreement hereinafter referred to) acting through the
         Executive Committee (as hereinafter defined) (the "Settlement System
         Administrator", which expression shall include the Settlement System
         Administrator's successors in title); and

(2)  THE NATIONAL  COMPUTING  CENTRE  LIMITED  (registered  number 881195) whose
     registered  office  is  situate  at  Oxford  Road,  Manchester  M1 7ED (the
     "Custodian"). ---------

WHEREAS:-

(A)      by various agreements (the "Pooling and Settlement Arrangements")
         details of which are set out in Schedule A NGC Settlements Limited has
         agreed to act as Settlement System Administrator and operate a
         settlements system requiring the use of certain computer package(s)
         comprising computer programs and related systems;

(B)      certain technical information and documentation describing or otherwise
         relating to the said computer programs and related systems is required
         for the understanding, maintaining, modifying and correcting of the
         said computer programs and related systems; and

(C)      the Settlement System Administrator acknowledges that in certain
         circumstances a successor Settlement System Administrator may require
         possession of the said technical information and documentation,
         up-to-date and in good order,

NOW IT IS HEREBY AGREED as follows:-

1.       DEFINITIONS AND INTERPRETATION

1.1      In this Agreement:-

         "Director" means the Director General of Electricity Supply;

         "Executive Committee" means the Executive Committee established under
         the Pooling and Settlement Arrangements and "Committee Member" means a
         member of the Executive Committee;

         "Material" means the source code and load (machine executable) modules
         and the technical information, manuals and other documentation
         described in Schedule B;

         "Modifications" means the source code and load (machine executable)
         modules and the technical information, manuals and other documentation
         relating to all modifications, updates and changes to the Material as
         accepted from time to time by the Executive Committee for use in the
         settlement process; and

         "Receptacle" means the receptacle to contain a copy of the Material
         pursuant to Clause 2.2 and copies of all Modifications delivered
         pursuant to Clause 3.1.

1.2  Unless the context otherwise requires, words and expressions defined in the
     Pooling  and   Settlement   Arrangements   shall  bear  the  same  meanings
     respectively when used herein.

2.       DEPOSIT

2.1      Forthwith upon execution and delivery of this Agreement, the Settlement
         System Administrator will deposit and the Custodian will accept as
         custodian for the Pool Members (acting through the Executive Committee)
         a copy of the Material.

2.2      The Custodian will place the copy of the Material in the Receptacle.

2.3      The Custodian shall bear no obligation or responsibility to any person
         to determine the existence, relevance, completeness, accuracy or any
         other aspect of the Material and/or Modifications. The Custodian shall
         have no responsibility to determine that whatever is deposited or
         accepted by it for deposit is or is not Material and/or Modifications.

3.       MODIFICATIONS

3.1      Subject to and in accordance with the Pooling and Settlement
         Arrangements, the Settlement System Administrator will deposit a copy
         of all Modifications with the Custodian within 28 days of such
         Modifications being accepted by the Executive Committee.

3.2  The  Custodian   shall  as  soon  as  possible   confirm   receipt  of  all
     Modifications  in writing to the  Executive  Committee  and the  Settlement
     System Administrator.

3.3      The Custodian will place a copy of all Modifications in the Receptacle.

4.       RELEASE

4.1      The Custodian shall forthwith release to any successor Settlement
         System Administrator appointed pursuant to and in accordance with the
         Pooling and Settlement Arrangements the copy(ies) of the Material
         and/or all the Modifications upon the written request of the Executive
         Committee provided that the Settlement System Administrator has
         resigned or has been removed as Settlement System Administrator under
         the Pooling and Settlement Arrangements and has not complied with its
         obligations relevant to the Material under Clauses 28.1.1 and 28.1.4 of
         the Pooling and Settlement Agreement for the Electricity Industry in
         England and Wales dated 30th March, 1990 (as amended, varied,
         supplemented, modified or suspended from time to time, the "Pooling and
         Settlement Agreement").

4.2      Any written request of the Executive Committee referred to in Clause
         4.1 shall be in the form of a statutory declaration by one or more
         Committee Members setting out the grounds on which release is sought
         and exhibiting such documentation in support thereof as the Custodian
         shall reasonably require.

4.3      Where any dispute shall arise as to the occurrence of the event set out
         in Clause 4.1, such dispute will be referred at the instance of either
         the Settlement System Administrator, the Custodian or the Executive
         Committee to the Director whose decision shall be final and binding.

5.       CONFIDENTIALITY

         The Custodian agrees to maintain all information and/or documentation
         coming into its possession or to its knowledge under this Agreement in
         strictest confidence and secrecy, not to make use thereof other than
         for the purposes of this Agreement and not to disclose or release it
         other than in accordance with the terms hereof.

6.       FEES

         The Settlement System Administrator will pay the Custodian's fees as
         detailed in Schedule C as amended from time to time by written
         agreement between the parties. Such fees shall be invoiced monthly and
         paid within one month of the date of the invoice.

7.       TERMINATION

7.1  This Agreement shall terminate upon the release of the copy of the Material
     and copies of all Modifications in accordance with Clause 4.1.

7.2  This  Agreement  may be terminated by the Custodian by giving not less than
     90 days' written notice to both the Executive  Committee and the Settlement
     System Administrator.

7.3      This Agreement may be terminated by the Settlement System Administrator
         giving not less than 90 days' written notice to the Custodian provided
         that it may not terminate this Agreement without the consent of the
         Executive Committee first being given in writing unless it has been
         removed or has resigned as Settlement System Administrator and has
         complied with its obligations relevant to the Material under Clauses
         28.1.1 and 28.1.4 of the Pooling and Settlement Agreement.

7.4      Upon termination under the provisions of Clause 7.2 or 7.3 the
         Custodian will deliver the copy(ies) of the Material and all the
         Modifications to the Settlement System Administrator (unless jointly
         instructed to the contrary by the Settlement System Administrator and
         the Executive Committee).

7.5  Termination  of this  Agreement  for  whatever  reason will not relieve the
     Custodian from the obligations of confidentiality contained in Clause 5.

8.       TESTS

         The Executive Committee shall be entitled to require the Custodian to
         carry out such tests in the presence of the Settlement System
         Administrator which in the reasonable opinion of the Custodian would
         reasonably establish that the Material and Modifications contain true
         and accurate versions of the source codes and load (machine executable)
         modules in use at the time of testing in the settlement process. Any
         reasonable charges and expenses incurred by the Custodian in carrying
         out such tests will be paid by the Settlement System Administrator.

9.       OBSOLETE MATERIAL AND MODIFICATIONS

9.1      The Executive Committee shall be entitled to review from time to time
         the Material and Modifications on deposit with the Custodian. Where the
         Executive Committee is satisfied that any part of the Material or
         Modifications on deposit has ceased to be used in the settlement
         process and will be of no further use, whether directly or indirectly,
         it may request the Custodian to release any such part to the then
         current Settlement System Administrator. Such request shall be in
         writing and identify the part or parts of the Material or Modifications
         to be released by the Custodian and state that the reason for such
         release is that such part or parts is or are no longer of use. The
         Custodian shall release such part or parts to the then current
         Settlement System Administrator as soon as conveniently possible after
         receipt of any such written request from the Executive Committee.

9.2      Notwithstanding the release of any part or parts of the Material or
         Modifications to the Settlement System Administrator pursuant to Clause
         9.1, in the event that any such released Material or Modifications or
         copies thereof are subsequently used in the settlement process such
         Material or Modifications shall be placed on deposit and held in escrow
         pursuant to this Agreement on the same terms and conditions as any
         Modification.

10.      NOTICES

10.1     Any notice or other communication to be given by one person to another
         person under, or in connection with the matters contemplated by, this
         Agreement shall be addressed to the recipient and sent to the address,
         telex number or facsimile number or such other person given in this
         Agreement for the purpose and marked for the attention so given or to
         such other address, telex number and/or facsimile number and/or marked
         for such other attention as such other person may from time to time
         specify by notice given in accordance with this Clause to the person
         giving the relevant notice or other communication to it.

10.2 Any  notice or other  communication  to be given to the  Settlement System
     Administrator shall be given to:-

         Address:               Fairham House,
                                Green Lane,
                                Clifton,
                                Nottingham NG11 9LN
         Telex No:              N/A
         Facsimile No:          0602 456728
         Attention:             General Manager
Any notice or other communication to be given to the Custodian shall be given
 to:-

         Address:               Oxford House,
                                Oxford Road,
                                Manchester M1 7ED
         Telex No:              66 8962
         Facsimile No:          061-228 2579
         Attention:             Legal Department
Any notice or other communication to be given to the Executive Committee shall
be given to:-

         Address:               Chief Executive (Pooling and Settlement)
                                30 Millbank,
                                London SW1P 4RD
         Telex No:              N/A
         Facsimile No:          071-233 8254
         Attention:             Chief Executive
10.3     Any notice or other communication to be given by one person to another
         person under, or in connection with the matters contemplated by, this
         Agreement shall be in writing and shall be given by letter delivered by
         hand or sent by first class prepaid post (airmail if overseas) or telex
         or facsimile, and shall be deemed to have been received:-

         10.3.1   in the case of delivery by hand, when delivered; or

         10.3.2   in the case of first class prepaid post, on the second day
                  following the day of posting or (if sent airmail overseas or
                  from overseas) on the fifth day following the day of posting;
                  or

         10.3.3   in the case of telex, on the transmission of the automatic
                  answer-back of the addressee (where such transmission occurs
                  before 1700 hours on the day of transmission) and in any other
                  case on the day following the day of transmission; or

         10.3.4   in the case of facsimile, on acknowledgement by the
                  addressee's facsimile receiving equipment (where such
                  acknowledgement occurs before 1700 hours on the day of
                  acknowledgement) and in any other case on the day following
                  the day of acknowledgement.

11.      COUNTERPARTS

         This Agreement may be executed in counterpart by the parties on
         separate counterparts each of which when executed and delivered shall
         constitute an original but which shall together constitute one and the
         same instrument.

12.      DISPUTE RESOLUTION

12.1     Save where expressly stated in this Agreement to the contrary, and
         subject to any contrary provision of the Act or any Licence or the
         rights, powers, duties and obligations of the Director or Secretary of
         State under the Act, any Licence or otherwise howsoever, any dispute or
         difference of whatever nature howsoever arising under, out of or in
         connection with this Agreement between the parties shall be and is
         hereby referred to arbitration pursuant to the arbitration rules of the
         Electricity Arbitration Association in force from time to time.

12.2     Whatever the nationality, residence or domicile of either party and
         wherever the dispute or difference or any part thereof arose the law of
         England shall be the proper law of any reference to arbitration
         hereunder and in particular (but not so as to derogate from the
         generality of the foregoing) the provisions of the Arbitration Acts
         1950 (notwithstanding anything in Section 34 thereof) to 1979 shall
         apply to any such arbitration wherever the same or any part of it shall
         be conducted.

13.      GOVERNING LAW

         This Agreement shall be governed by, and construed in all respects in
accordance with, English law.



<PAGE>


                                   SCHEDULE A

               Details of the Pooling and Settlement Arrangements

(A)      Pooling and Settlement Agreement for the Electricity Industry in
         England and Wales dated 30th March, 1990 and made between the Founder
         Generators named therein (1), the Founder Suppliers named therein (2),
         NGC Settlements Limited as Settlement System Administrator (3), Energy
         Pool Funds Administration Limited as Pool Funds Administrator (4), The
         National Grid Company plc as Grid Operator and Ancillary Services
         Provider (5) and Scottish Power plc and Electricite de France, Service
         National as Externally Interconnected Parties(6).

(B)      Initial Settlement Agreement for the Electricity Industry in England
         and Wales dated 30th March, 1990 and made between the Founder
         Generators named therein (1), the Founder Suppliers named therein (2),
         NGC Settlements Limited as Settlement System Administrator (3), Energy
         Pool Funds Administration Limited as Pool Funds Administrator (4), The
         National Grid Company plc as Grid Operator and Ancillary Services
         Provider (5) and Scottish Power plc and Electricite de France, Service
         National as Externally Interconnected Parties (6).

(C)      Two Supplemental Agreements relating to the Initial Settlement
         Agreement and the Pooling and Settlement Agreement for the Electricity
         Industry in England and Wales, each dated as of 30th June, 1990 and
         made between the Founder Generators named therein (1), the Founder
         Suppliers named therein (2), NGC Settlements Limited as Settlement
         System Administrator (3), Energy Pool Funds Administration Limited as
         Pool Funds Administrator (4), The National Grid Company plc as Grid
         Operator and Ancillary Services Provider (5) and Scottish Power plc and
         Electricite de France, Service National as Externally Interconnected
         Parties (6).

(D)      Third Supplemental Agreement relating to the Initial Settlement
         Agreement and the Pooling and Settlement Agreement for the Electricity
         Industry in England and Wales dated as of 15th October, 1990 and made
         between the Founder Generators named therein (1), the Suppliers named
         therein (2), NGC Settlements Limited as Settlement System Administrator
         (3), Energy Pool Funds Administration Limited as Pool Funds
         Administrator (4), The National Grid Company plc as Grid Operator and
         Ancillary Services Provider (5) and Scottish Power plc and Electricite
         de France, Service National as Externally Interconnected Parties (6).

(E)      Fourth Supplemental Agreement relating to the Initial Settlement
         Agreement and the Pooling Settlement Agreement for the Electricity
         Industry in England and Wales dated as of 15th October, 1990 and made
         between the Founder Generators named therein (1), the Suppliers named
         therein (2), NGC Settlements Limited as Settlement System Administrator
         (3), Energy Pool Funds Administration Limited as Pool Funds
         Administrator (4), The National Grid Company plc as Grid Operator and
         Ancillary Services Provider (5) and Scottish Power plc and Electricite
         de France, Service National as Externally Interconnected Parties (6).



<PAGE>


                                   SCHEDULE B

                                  The Material

SYSTEM              REF       ITEM
SMP                 101       Source Code - Hardcopy
                    102       Source Code - Tape
                    103       Executable Code - Tape
                    104       DCL - Hardcopy
                    105       DCL - Tape

                    106       User Requirement Specification
                    107       Design Specification
                    108       Test Plan
                    109       Program Upgrades Test Specification
                    110       Acceptance Test Schedule
                    111       Test Schedule(s)
                    112       Test Specification
                    113       User Guide
                    114       Quality Assurance

                    115       Licensed software list
                    116       Licensed software licences
                    117       Licensed software system tables
                    118       Acceptance certificates

CDCS                201       Source Code - Tape: GRID02
                    202       Source Code - Hardcopy
                    203       Executes clists
                    204       DB2 Database Request Modules
                    205       Declaration Libraries
                    206       Compilation JCL
                    207       Compilation JCL - Hardcopy
                    208       Load Modules
                    209       Menu Library
                    210       Skeleton Execution JCL
                    211       Skeleton Execution JCL - Hardcopy
                    212       Backup JCL and clists

                    213       System Test Specification
                    214       User Acceptance Test Specification
                    215       User Requirement Specification
                    216       Logical Design Specification
                    217       User Guide
                    218       First Line Support Procedures
                    219       Licensed software list
                    220       Licensed software certificates
                    221       Compilation Instructions
                    222       Special Fixes List
                    223       Licensed software system tables
                    224       Acceptance certificates

L&G                 301       Source Code - Hardcopy
                    302       Source Code - 3.5 Diskette
                    303       DOS Batch Files - Hardcopy
                    304       DOS Batch Files - 3.5 Diskette
                    305       Executables - 3.5 Diskette

                    306       System Documentation
                    307       Documentation Source Files (VMS Backup save set)
                    308       Acceptance Test Specification
                    309       Guide for 2nd-line Maintenance
                    310       CEGB(NGD) Power Station Collectors Manual

                    311       Licensed software list
                    312       Licensed software certificates
                    313       Compilation Instructions
                    314       Licensed software system tables
                    315       Acceptance certificates

LOLP                401       Source Code - Hardcopy
                    402       Source Code - Disk
                    403       Object Code - Disk
                    404       Batch Files - Hardcopy
                    405       Batch Files - Disk

                    406       Test Plan and Specification
                    407       Acceptance Test Data Ph1
                    408       Test Schedule FAT Ph1
                    409       Test Schedule SAT Ph1
                    410       Test Schedule SAT Overview Ph1
                    411       Format Spec. LOLP to Sys Ops.
                    412       User Guide
                    413       User Requirements Spec.
                    414       Functional Spec.
                    415       Basic Info. Flow
                    416       Statement of Principles
                    417       Project Report
                    418       Op. Procedures Manual
                    419       Test Plan LOLP 5.0
                    420       System Test Execution Vol. 1-4
                    421       LOLP PEC site Acc. Test Review
                    422       Regression Test Matrix
                    423       Model Parameters - Vesting Day Vals
                    424       Promod Vol. 1-2
                    425       Software Release 4.7
                    426       S/W Install and Update Guidelines
                    427       Software Releases 4.0 to 4.8
                    428       Licensed software list
                    429       Licensed software licences
                    430       Acceptance certificates

SD-SCICON S2/SC1    501       Source Code Fortran, ProFortran, SQL Forms: HCPY
                    502       Source Code Fortran, ProFortran, SQL Forms: TPE
                    503       Executable Fortran, ProFortran, SQL Forms: TPE
                    504       Executable DCL, SQL-PLUS, SQL-RPT: (inc *.MMS)

                    505       Acceptance Test Specification
                    506       Test Schedules
                    507       Test Schedule SAT
                    508       Op Subsystem Design Specification
                    509       CR Subsystem Design Specification
                    510       SY Subsystem Design Specification
                    511       DT Subsystem Design Specification
                    512       Level 1 Design Specification
                    513       CSM Team Guide
                    514       Process Leader User Guide
                    515       Training Course - Input Clerks
                    516       Training Course - Process Leader
                    517       Training Course - Team Leader
                    518       Training Course - Data Trans Clerk
                    519       Input Clerk User Guide
                    520       Team Leader User Guide
                    521       Data Trans Clerk User Guide
                    522       Auditor User Guide
                    523       Work Breakdown Structure
                    524       Functional Specification
                    525       Performance Scoping Study
                    526       Regression Testing Matrix
                    527       Migration From SID to 2.21
                    528       Review of Initial Pool Rules vs Func. Spec.
                    529       PMW Project Standards
                    530       Implementation Guide
                    531       System Build Instructions
                    532       User Requirements Specification

                    533       Acceptance Cert: Functional Spec.
                    534       Acceptance Cert: Acceptance Test Spec.
                    535       Acceptance Cert: Test Schedules and Data

                    536       Licensed software list
                    537       Licensed software certificates

GOALPOST            601       Source Code - Hardcopy
                    602       Source Code - Tape
                    603       Executable - Tape
                    604       Application File (JCL) - Tape
                    605       Test Document
                    606       Module Design Specification
                    607       User Manual
                    608       Quality Assurance Plan
                    609       User Requirements Specification

                    610       Licensed software list
                    611       Licensed software certificates
                    612       Compilation Instructions
                    613       Licensed software system tables
                    614       Acceptance certificates

GOAL                701       Source Code - Hardcopy
                    702       Source Code - Tape
                    703       Executable Code - Tape
                    704       JCL - Hardcopy
                    705       JCL - Tape


<PAGE>


                                   SCHEDULE C

                              The Custodian's fees

1.   Initial fee - (pound)2,000

2.   Annual fee - (pound)500

3.   Release fee - (pound)500 plus reasonable expenses

4.   Storage fee -(pound)20  per cubic foot per annum  (reduced  proportionately
     for part of any year)

5.   Update fee - (pound)100 per update

6.   Additional work (testing, etc.) - normal senior consultancy rates from time
     to time published by the Custodian.

All such fees are exclusive of VAT and are to be specified in reasonable detail
in each invoice by the Custodian.

IN WITNESS whereof this Agreement has been duly executed the day and year first
above written

As Settlement System Administrator
----------------------------------
(for itself and on behalf of the Pool Members
acting through the Executive Committee)
THE COMMON SEAL of                                 )
NGC SETTLEMENTS LIMITED                            )
was hereunto affixed in the                        )
presence of:-                                      )

Director

Director/Secretary


<PAGE>





As Custodian
THE COMMON SEAL of                                 )
THE NATIONAL COMPUTING CENTRE LIMITED was          )
hereunto affixed in the presence of:-              )
                                                   )

Director

Director/Secretary




<PAGE>


                                   SCHEDULE 8

                                   [Not used].



<PAGE>




                                   SCHEDULE 9

                                 The Pool Rules











            The sequential page numbering is suspended for Schedule 9
                           and resumes at Schedule 10



<PAGE>


                                   SCHEDULE 10

                           Form of Resignation Notice

The Secretary of the Executive Committee for the
Pooling and Settlement System in England and Wales

(copied to:

(A)      the Settlement System Administrator; and

(B)      the Pool Funds Administrator).

Dear Sir,

We [insert full legal name and address of registered/principal office of
applicant] refer to the Pooling and Settlement Agreement for the electricity
industry in England and Wales dated 30th March, 1990 as amended, varied,
supplemented, modified or suspended (the "Pooling and Settlement Agreement").

Unless the context otherwise requires, words and expressions defined in the
Pooling and Settlement Agreement shall bear the same meanings respectively when
used herein.

We hereby give notice pursuant to Clause 8.7 of the Pooling and Settlement
Agreement that we are resigning as a Party with effect from the date falling 28
days after receipt by you of this Resignation Notice.

We confirm that, in giving this notice of resignation, we are not and will not
be in breach of any of the restrictions on resignation set out in Clause 8.8 of
the Pooling and Settlement Agreement.

We [enclose]/[confirm that we have already provided]* such notices (if any) as
are required to be given by us pursuant to the provisions of Part XV of the
Pooling and Settlement Agreement.



<PAGE>


We acknowledge that our resignation as a Party is without prejudice to our
accrued rights and liabilities and any rights and liabilities which may accrue
to us in relation to the period during which we were a Party under the Pooling
and Settlement Agreement, the Funds Transfer Agreement or any agreement referred
to in Clause 8.8.1(c) of the Pooling and Settlement Agreement.

                                Yours faithfully,

                           ---------------------------

                      duly authorised for and on behalf of
                        [insert full legal name of Party]



<PAGE>


                                   SCHEDULE 11

                             Billing and Settlement

PART 1: PRELIMINARY

1.       DEFINITIONS AND INTERPRETATION

         1.1       Definitions

         1.2       Interpretation

PART 2: ESTABLISHMENT OF SYSTEMS

2.       PAYMENTS CALENDAR

         2.1       Preparation

         2.2       Principles

         2.3       Form

         2.4       Default

         2.5       Distribution

3.       INFORMATION SYSTEMS

         3.1       Provision of information

         3.2       Communications Equipment

         3.3       Authorised persons

4.       BANKING SYSTEM

         4.1       Funds Transfer Agreement

         4.2       Establishment of Accounts

         4.3       Rights and obligations under Funds Transfer Agreement

         4.4       Settlement Account

         4.5       Further information

         4.6       Change of Settlement Account

         4.7       Maintenance of Settlement Account and Settlement Bank Mandate

         4.8       Details of Accounts

5.       ESTABLISHMENT OF TRUSTS

         5.1     Trusts

         5.2     Trusts in respect of the Credit Facility

         5.3     Rights of Pool Creditors other than the Ancillary Services
                 Provider

         5.4     Rights of Ancillary Services Provider

         5.5     Trusts in respect of Pool Reserve Assets

         5.6     Overdue amounts

         5.7     Shortfall

         5.8     Providing Members' rights to funds

         5.9     Funds not to be withdrawn

         5.10    Providing Members' rights to withdraw funds

         5.11    Waiver of Providing Members' rights

         5.12    Pool Reserve Assets

         5.13    Providing Members' rights and interests in the Pool Reserve
                 Account

         5.14    Overpayments to be held on trust

         5.15    Reimbursement of overpayments

         5.16    Repayment of loans

         5.17    No claim for breach of trust

6.       POOL LEDGER ACCOUNTS

         6.1       Maintenance of Pool Ledger Accounts

         6.2       Ledger extracts

         6.3       Certified copy extracts

         6.4       Confidentiality

         6.5       Information

         6.6       Review of extracts

         6.7       Dispute of accuracy

[Sections 7 to 14 (inclusive) not used]

PART 3: SECURITY COVER AND CREDIT MONITORING

15.      SECURITY COVER

         15.1      Provision of Security Cover

         15.2      Letters of Credit

         15.3      Cash deposit

         15.4      Maintenance of Security Cover

         15.5      Failure to supply Security Cover

         15.6      Substitute Letter of Credit

16.      CREDIT MONITORING

         16.1      Determination of Security Cover

         16.2      Criteria for provision of Security Cover

         16.3      Six monthly variation

         16.4      Review of Security Cover

         16.5      Increase or Decrease of Security Cover

         16.6      Notification in respect of Security Cover

         16.7      Release from Security Cover Obligations

         16.8      No liability for amount of Security Cover

PART 4: BILLING AND PAYMENT PROCEDURES

17.      RECEIPT AND VERIFICATION OF INFORMATION

         17.1      Receipt of Information from Settlement System Administrator

         17.2      Information for each Settlement Day

         17.3      Information - taking of electricity

         17.4      Information - provision of electricity

         17.5      Information - Ancillary Services Provider

         17.6      Verification of Information

         17.7      Deemed Verification

         17.8      Rectification of Errors

         17.9      Amounts in Advice Notes; Adjustments

         17.10     Postponed Payment Date

         17.11     Further notification

         17.12     Payment by Pool Debtor

         17.13     Liability several

18.      ADVICE NOTES

         18.1      Despatch of Advice Notes

         18.2      Method of despatch

         18.3      Content of Advice Notes

         18.4      Interest

19.      PAYMENT PROCEDURE

         19.1      Instructions for payment

         19.2      Pool Funds Administrator's responsibilities

         19.3      Non-payment by Pool Member

         19.4      Excess payments

         19.5      Payment to Pool Creditors

         19.6      Making good the Pool Reserve Account

         19.7      Prohibition on transfers

         19.8      Application of payments

         19.9      Bank contacts

20.      ALTERNATIVE PAYMENT PROCEDURE

         20.1      Alternative Payment procedure

         20.2      Pool Debtor to effect remittance

         20.3      Receipt of remittance

         20.4      Method of remittance

         20.5      Notification of non-payment

         20.6      Payment default

         20.7      Late payment

         20.8      Payments to Pool Creditors

         20.9      Construction

21.      PAYMENT DEFAULT

         21.1      Payment default

         21.2      Amount in default likely to be remedied

         21.3      Loans part of Pool Reserve Assets

         21.4      Repayment of loans

         21.5      Reduction of payments to Pool Creditors

         21.6      Obligation to make calls

         21.7      Indemnification by non-paying Pool Debtor

         21.8      Notification to Pool Creditors

         21.9      Default Interest

         21.10     Application of payments

         21.11     Clearing of Pool Clearing Account

         21.12     Credit Facility

22.      CONFIRMATION NOTICES

         22.1      Despatch of Confirmation Notices

         22.2      Information - taking of electricity

         22.3      Information - supplies of electricity

         22.4      Information - Ancillary Services Provider

         22.5      Interest

23.      PAYMENT ERRORS

         23.1      Overpayments

         23.2      Repayment of overpayment (1)

         23.3      Repayment of overpayment (2)

         23.4      Underpayments

24.      ENFORCEMENT OF CLAIMS

         24.1      Notification of amount in default

         24.2      Duties of Pool Funds Administrator

         24.3      Notice before action

         24.4      Proceedings to Recover Overdue Amounts

25.      CREDIT FACILITY: PAYMENT DEFAULTS

         25.1      Purpose of Credit Facility

         25.2      Modification of other provisions of this Schedule

         25.3      Payment default

         25.4      Amounts in default

         25.5      Application of payments

         25.6      Payments to Facility Bank

         25.7      Reduction in payments to Pool Creditors

         25.8      Enforcement of Claims and other provisions

         25.9      Unavailability of Credit Facility

         25.10     Interpretation

26.      CREDIT FACILITY: GENERAL

         26.1      Notifications to the Executive Committee

         26.2      Notifications to Providing Members

         26.3      Amendment and Cancellation

         26.4      Extension and Renewal

         26.5      Fees not attributable to a particular Providing Member

         26.6      No additional charge

         Annex 1:  Form of Advice Note

         Annex 2:  Form of Confirmation Notice

         Annex 3:  Part 1 -        Form of Settlement Account Designation

                          Part 2   -        Form of Change of Settlement Account

         Annex 4:  Form of Letter of Credit



<PAGE>


                                   SCHEDULE 11

                             Billing and Settlement

                                     PART 1

                                   PRELIMINARY

1.       DEFINITIONS AND INTERPRETATION

1.1      Definitions: In this Schedule, except where the context otherwise 
          requires:-

         "Advice Note" means a statement substantially in the form and
         containing the information set out in Annex 1 (or in such other form or
         containing such further information as may from time to time be
         specified by the Executive Committee) issued in the name of the Pool
         Funds Administrator to a Pool Member, the Ancillary Services Provider
         or the Grid Operator;

         "Approved Credit Rating" means, in relation to a Pool Member or the
         Grid Operator a short-term debt rating of not less than A1 by Standard
         and Poor's Corporation or a rating of not less than P1 by Moody's
         Investors Service or an equivalent rating from any other reputable
         credit rating agency approved by the Executive Committee;

         "Banking System" means the banking system described in Section 4, for
         the transfer of funds from Pool Debtors to Pool Creditors in accordance
         with this Schedule, as amended or replaced from time to time in
         accordance with the provisions of the Agreement;

         "Billing System" means the systems and procedures described in Sections
         18 and 22 for the issuing of Advice Notes and Confirmation Notices by
         the Pool Funds Administrator to Pool Members, the Ancillary Services
         Provider and the Grid Operator, as amended or replaced from time to
         time in accordance with the provisions of the Agreement;

         "CHAPS" means the Clearing House Automated Payments System;

         "Collection Account" means an account denominated in sterling
         maintained by the Pool Funds Administrator at a branch of a Settlement
         Bank, and designated from time to time as a Collection Account in
         accordance with Section 4;

         "Confirmation Notice" means a statement substantially in the form and
         containing the information set out in Annex 2 (or in such other form or
         containing such further information as may from time to time be
         specified by the Executive Committee) issued in the name of the Pool
         Funds Administrator to a Pool Member, the Ancillary Services Provider
         or the Grid Operator;

         "Credit Facility" means the credit facility in a principal amount of up
         to (pound)20,000,000 provided to the Pool Funds Administrator by
         Barclays Bank PLC (acting through its branch at 54 Lombard Street,
         London EC3 9EX) with effect from 1st January, 1993 as from time to time
         extended, renewed or modified and any other facility provided to the
         Pool Funds Administrator by Barclays Bank PLC or any other bank
         (approved by the Executive Committee) whether in substitution for or in
         addition to the same in any such case on terms approved by the
         Executive Committee;

         "Credit Facility Contribution" means a sum equal to 5 per cent. of the
         fees (and any additional amounts payable under the terms of the Credit
         Facility which are not the responsibility of any particular Providing
         Member or the Grid Operator) charged under the Credit Facility to the
         Pool Funds Administrator;

         "Default Interest Rate" means:-

         (i)       a rate per annum determined by the Pool Funds Administrator
                    to be equal to the aggregate of:-

                    (a)   4 per cent. per annum; and

                    (b) the Pool Banker's base lending rate from time to time;
or

         (ii) such other rate as the Executive Committee may from time to time
determine;

         "Facility Bank" means Barclays Bank PLC (acting through its branch at
         54 Lombard Street, London EC3 9EX) or such other bank as may from time
         to time provide a Credit Facility;

         "Funds Transfer Agreement" means the agreement of that name dated 30th
         March, 1990 and made between Energy Pool Funds Administration Limited,
         Barclays Bank PLC, the Pool Members named therein and The National Grid
         Company plc, as amended, varied, supplemented, modified or suspended
         from time to time in accordance with the terms hereof and thereof;

         "Funds Transfer Business" means the business of the Pool Funds
Administrator in operating the Funds Transfer System and providing the Services;

         "Funds Transfer Hardware" has the meaning ascribed to it in Schedule
           15;

         "Funds Transfer Software" has the meaning ascribed to it in Schedule
         15;

         "Funds Transfer  System" means the Banking System,  the Billing System
          and the Information Systems;

         "Information Systems" means the information systems described in
         Section 3 for the transfer of information to be given by or to the Pool
         Funds Administrator in connection with the Funds Transfer Business, as
         amended or replaced from time to time in accordance with the provisions
         of the Agreement;

         "Letter of Credit" means an unconditional irrevocable standby letter of
         credit substantially in the form set out in Annex 4 (or such other form
         as the Executive Committee may approve) issued for the account of a
         Providing Member or the Grid Operator in sterling in favour of the Pool
         Funds Administrator as trustee on the trusts set out in Section 5 by
         any United Kingdom clearing bank or any other bank which has a long
         term debt rating of not less than single A by Standard and Poor's
         Corporation or by Moody's Investors Service, or such other bank as the
         Executive Committee may approve, and which shall be available for
         payment at a branch of the issuing bank;

         "Notification Date" means, in respect of any Settlement Day, the day
         specified in the Payments Calendar as the day on which the Settlement
         Run shall be required to be delivered by the Settlement System
         Administrator to the Pool Funds Administrator for that Settlement Day;

         "Notified Payment" means a payment notified in accordance with Section
         18 by the Pool Funds Administrator to a Pool Member, the Ancillary
         Services Provider or the Grid Operator as being a payment required to
         be cleared through the Pool Clearing Account;

         "Notified Payments System" means the system to be established by
         Section 19 for the settling of Notified Payments, as amended or
         replaced from time to time in accordance with the provisions of the
         Agreement;

         "Payment Date" means, in relation to any Settlement Day, the date fixed
         in accordance with Section 2 upon which Notified Payments in respect of
         supplies of electricity, the provision of Ancillary Services and
         payments due in accordance with the provisions of Clause 49 of the
         Agreement must be settled in accordance with this Schedule;

         "Payments Calendar" means the calendar prepared and issued in
         accordance with Section 2 showing a Notification Date and a Payment
         Date in respect of each Settlement Day;

         "Pool Accounts" means the Pool Clearing Account, the Pool Borrowing
         Account, the Pool Reserve Account and the Collection Accounts and such
         other accounts as may be established in accordance with sub-section
         4.2;

         "Pool Banker" means Barclays Bank PLC or such other person nominated
         from time to time by the Executive Committee as Pool Banker and
         appointed as Pool Banker;

         "Pool Borrowing Account" means the account of that title in the name of
         the Pool Funds Administrator with the Facility Bank which may from time
         to time be opened in respect of the Credit Facility;

         "Pool Clearing Account" means the account in the name of the Pool Funds
         Administrator (holding as trustee on the trusts set out in Section 5)
         with the Pool Banker to which Notified Payments are required to be
         transferred for allocation to Pool Creditors in accordance with their
         respective entitlements;

         "Pool Creditor" means each Pool Member, the Ancillary Services Provider
         and the Grid Operator to whom moneys are payable pursuant to the terms
         of this Schedule, other than a Providing Member or the Grid Operator,
         in respect of (i) amounts standing to the credit of its account with
         the Pool Reserve Account or (ii) amounts owing to it by another
         Providing Member or (as the case may be) the Grid Operator pursuant to
         the operation of sub-section 21.1;

         "Pool Debt" means, in respect of a Pool Member, the Ancillary Services
         Provider or the Grid Operator, the aggregate amount payable by such
         Pool Member, the Ancillary Services Provider or (as the case may be)
         the Grid Operator pursuant to the terms of this Schedule;

         "Pool Debtor" means each Pool Member, the Ancillary Services Provider
         and the Grid Operator, but in any such case only where it is required
         to make payment under this Schedule;

         "Pool Ledger Accounts" means the accounting records required to be
         maintained by the Pool Funds Administrator in accordance with Section 6
         for the recording of transactions settled in accordance with this
         Schedule;

         "Pool Reserve Account" means the account established pursuant to
         sub-section 4.2 for the purpose of holding a cash deposit which may be
         used in or towards clearing the Pool Clearing Account in accordance
         with Section 21;

         "Pool Reserve Assets" has the meaning given to that expression in
 sub-section 5.12;

         "Providing Member" means each Pool Member who may, under the terms of
this Schedule, become at any time a Pool Debtor;

         "Reserve Interest Rate" means the rate of interest payable from time to
         time by the Pool Banker on amounts standing to the credit of the Pool
         Reserve Account;

         "Security Amount" means, in respect of a Providing Member or the Grid
         Operator (as the case may be), the aggregate of available amounts of
         each outstanding Letter of Credit plus the principal amount (if any) of
         cash that such Providing Member or the Grid Operator has paid to the
         credit of the Pool Reserve Account (and which has not been repaid to
         such Providing Member or the Grid Operator) and less the amount of all
         outstanding loans deemed to be made under paragraphs 21.1.3 or 21.1.5
         of this Schedule to such Providing Member or the Grid Operator. For the
         purposes of this definition, in relation to a Letter of Credit,
         "available amount" means the face amount thereof less (i) payments
         already made thereunder and (ii) claims made thereunder but not yet
         paid;

         "Security Cover" means, in respect of each Providing Member and the
         Grid Operator, the aggregate amount for the time being which it shall
         be required by the Executive Committee to provide and maintain by way
         of security in accordance with Part 3;

          "Services" means the services and  responsibilities  to be supplied or
         discharged  by  the  Pool  Funds  Administrator  pursuant  to the
        Agreement;

         "Settlement Account" means, in relation to a Pool Member, the Ancillary
         Services Provider or the Grid Operator, an account maintained at a
         Settlement Bank and designated in accordance with sub-section 4.4;

         "Settlement Account Designation" means a notice substantially in the
         form set out in Part 1 of Annex 3 or in such other form as may be
         specified by the Executive Committee, completed and signed by a Pool
         Member, the Ancillary Services Provider or the Grid Operator
         designating a Settlement Account for the purposes of this Schedule;

         "Settlement Bank" means a bank which:-

         (a) has its head office or a branch situated in the United Kingdom and
which holds sterling denominated accounts at such office or branch;

         (b)        is a settlement member of the Clearing House Automated
                    Payment System ("CHAPS") or is a CHAPS participant by virtue
                    of an agency agreement with a settlement member; and

         (c)       is either:-

                    (i) a European institution under the Banking Coordination
(Second Council Directive) Regulations 1992; or

                    (ii) an authorised institution under the Banking Act 1987;

         "Settlement Bank Mandate" means any mandate referred to in sub-section
         4.7 to be given by the Pool Funds Administrator in favour of a
         Settlement Bank or, as the context may require, a particular one of
         them in such form(s) as the Executive Committee may approve, such
         approval not to be unreasonably withheld, such mandate being given for
         the purpose of establishing and maintaining a Collection Account;

          "Settlement Re-run" means any re-run of Settlement in accordance  with
          Part XII of the Agreement;

         "Settlement Run" means, in respect of transactions occurring on the
         relevant Settlement Day for which payments are to be settled pursuant
         to this Schedule, the data which the Settlement System Administrator is
         required to deliver from time to time to the Pool Funds Administrator
         pursuant to Section 17 in respect of such transactions; and

         "Shortfall" has the meaning given to that expression in sub-section
 5.7.

1.2      Interpretation: In this Schedule, except where the context otherwise
         requires, references to a particular Annex, Part, Section, sub-section,
         paragraph or sub-paragraph shall be a reference to that Annex to or
         Part of this Schedule or, as the case may be, that Section,
         sub-section, paragraph or sub-paragraph in this Schedule and references
         to any amount being exclusive or inclusive of United Kingdom Value
         Added Tax shall mean that that amount is exclusive or inclusive (as the
         case may be) of a sum equal to such amount, if any, of United Kingdom
         Value Added Tax as is properly chargeable on the supply to which the
         first-mentioned amount is attributable as being all or part of the
         consideration for that supply.



<PAGE>


                                     PART 2

                            ESTABLISHMENT OF SYSTEMS

2.       PAYMENTS CALENDAR

2.1      Preparation: No later than 31st January in each year the Pool Funds
         Administrator and the Settlement System Administrator shall agree on a
         Payments Calendar showing for the period from 1st April in that year to
         31st March in the next succeeding year (both dates inclusive) the
         Payment Dates on which payments pursuant to the Agreement in respect of
         supplies of electricity, the provision of Ancillary Services and in
         respect of sums payable by the Grid Operator in relation to Transport
         Uplift on each Settlement Day are required to be settled and showing
         the Notification Dates on which the Settlement Run in respect of such
         supplies shall be delivered by the Settlement System Administrator to
         the Pool Funds Administrator.

          2.2  Principles:  Each  Payments  Calendar  shall  give  effect to the
               following principles:-

         2.2.1      the Settlement Run shall be required to be delivered by the
                    Settlement System Administrator to the Pool Funds
                    Administrator no later than the 24th day after the
                    Settlement Day to which the Settlement Run relates (or, if
                    such day is not a Business Day, the next succeeding day
                    which is a Business Day);

         2.2.2      the Payment Date shall not fall earlier than two clear
                    Business Days after the day on which the Settlement Run is
                    required to be delivered by the Settlement System
                    Administrator to the Pool Funds Administrator;

          2.2.3expressed  as an average  over the entire  period  covered by the
               Payments  Calendar,  the  Payment  Date  shall  fall,  as near as
               practicable,  28  days  after  the  Settlement  Day to  which  it
               relates; and

         2.2.4 each Payment Date shall fall as close as is reasonably
practicable to the 28th day after the Settlement Day to which it relates,

         and shall be prepared in accordance with the relevant Agreed Procedure.

          2.3  Form:  The  Payments  Calendar  shall  be in  such  form  as  the
               Executive Committee shall from time to time prescribe.

2.4      Default: If the Pool Funds Administrator and the Settlement System
         Administrator shall fail to agree a Payments Calendar for any period by
         the date stated in sub-section 2.1 or the Payments Calendar prepared by
         them does not give effect to the principles set out in sub-section 2.2,
         the Executive Committee shall prepare or cause to be prepared a
         Payments Calendar for that period giving effect to the said principles
         and that shall be the Payments Calendar for use for that period.

2.5      Distribution: Any Payments Calendar prepared pursuant to this Section 2
         shall be distributed promptly to each Pool Member, the Ancillary
         Services Provider, the Grid Operator, the Pool Banker, the Pool Auditor
         and the Director and (if prepared by the Pool Funds Administrator and
         the Settlement System Administrator) the Executive Committee and (if
         prepared by or for the Executive Committee) the Pool Funds
         Administrator and the Settlement System Administrator.

3.       INFORMATION SYSTEMS

3.1      Provision of information: Unless otherwise required by the Executive
         Committee, all written information to be given by or to the Pool Funds
         Administrator in connection with the Banking System and the Billing
         System shall be provided in the following manner:-

         3.1.1      for information flowing between the Pool Funds
                    Administrator, the Settlement System Administrator, the
                    Ancillary Services Provider and the Grid Operator by
                    electronic mail as designated from time to time by the
                    recipient in a written notice to the sender of the
                    information or if such electronic mail systems are not
                    operational by the Effective Date then, until such systems
                    are operational, by such means as such parties shall agree;

         3.1.2      for information flowing between the Pool Funds Administrator
                    and the Pool Banker, in the manner prescribed in the Funds
                    Transfer Agreement or in such other manner as may be agreed
                    between the Pool Funds Administrator and the Pool Banker;

         3.1.3      for information flowing between the Pool Funds Administrator
                    and a Settlement Bank, in the manner prescribed in the
                    relevant Settlement Bank Mandate or in such manner as may be
                    agreed between the Pool Funds Administrator and the
                    Settlement Bank;

         3.1.4      for information flowing between the Pool Funds Administrator
                    and any Pool Member who has installed an electronic mail
                    transfer system compatible with the Pool Funds
                    Administrator's electronic mail transfer system, by
                    electronic mail as designated from time to time by the
                    recipient in a written notice to the sender of the
                    information; and

         3.1.5      for information flowing between the Pool Funds Administrator
                    and any other Pool Member, by facsimile transmission and
                    addressed for the attention of the Authorised Person (as
                    defined in sub-section 3.3) for such Pool Member and sent to
                    the then latest facsimile number of such Authorised Person
                    notified to the Pool Funds Administrator pursuant to
                    sub-section 3.3 provided that, if at the relevant time there
                    is no Authorised Person for such Pool Member, such
                    information shall be sent by facsimile transmission and
                    addressed for the attention of the company secretary of such
                    Pool Member and sent to the facsimile number of its
                    registered or principal office.

3.2      Communications Equipment: Each Party undertakes to exercise reasonable
         skill and care to ensure that its communications equipment at all times
         is adequate to transmit and receive information in connection with the
         Banking System and the Billing System. In the case of any breakdown,
         failure or non-availability of the communications or other equipment,
         each Party affected shall use all reasonable efforts to agree promptly
         on the use and implementation of alternative, effective and secure
         means of communication (and, in default of agreement, notices or other
         communications shall be by letter delivered or sent in accordance with
         Clause 75).

3.3      Authorised persons: Upon written request of the Pool Funds
         Administrator each Pool Member shall (and may of its own accord)
         provide the Pool Funds Administrator in writing with the name of, and
         communication details for, one or more individuals ("Authorised
         Persons") who are authorised (and, until it receives written notice to
         the contrary, the Pool Funds Administrator shall be entitled to assume
         that they are authorised) to take action on behalf of such Pool Member
         in respect of all communications and other dealings under this Schedule
         between the Pool Funds Administrator and such Pool Member. Each Pool
         Member shall promptly advise the Pool Funds Administrator in writing of
         any change of any such individual or his communication details. The
         Pool Funds Administrator shall notify all Pool Members and the
         Executive Committee of the names and communication details of all
         Authorised Persons and of any change in any such individual or his
         communication details.

4.       BANKING SYSTEM

4.1  Funds   Transfer   Agreement:   On  the  Effective   Date  the  Pool  Funds
     Administrator,  the Pool Banker,  each Pool Member and NGC (in each case as
     at such date) entered into the Funds Transfer Agreement.

4.2      Establishment of Accounts: The Pool Funds Administrator shall establish
         and operate in accordance with the Agreement and the Funds Transfer
         Agreement a Pool Clearing Account to and from which all payments
         calculated in accordance with this Schedule are to be made, a Pool
         Reserve Account from which any debit balances on the Pool Clearing
         Account at the close of banking business on each Business Day shall be
         settled or reduced in accordance with this Schedule, a Collection
         Account at each bank at which, from time to time, any Pool Member, the
         Ancillary Services Provider or the Grid Operator maintains a Settlement
         Account and such other accounts (including a Pool Borrowing Account on
         which the Pool Funds Administrator may make drawings under the Credit
         Facility) as the Pool Funds Administrator (with the prior written
         consent of the Executive Committee) considers desirable to enable it
         efficiently to perform any obligations imposed on it pursuant to the
         Agreement. Each Pool Account shall be in the name of the Pool Funds
         Administrator and (save for the Pool Borrowing Account) shall be
         designated as being held in trust in accordance with the provisions of
         Section 5. The Pool Funds Administrator shall not commingle any funds
         standing to the credit of any Pool Account with its own personal funds.

4.3      Rights and obligations under Funds Transfer Agreement: The Pool Funds
         Administrator is authorised by the Pool Members, the Ancillary Services
         Provider and the Grid Operator to exercise the rights granted to it
         under, and shall perform its obligations pursuant to, the Funds
         Transfer Agreement except that it shall not remove the Pool Banker
         without the prior written consent of the Executive Committee; and that
         at the request of the Executive Committee it shall remove the Pool
         Banker in accordance with the Funds Transfer Agreement. Subject to the
         agreement of the Pool Banker, the Parties agree promptly to give effect
         to any amendment to the Funds Transfer Agreement as may be required by
         the Executive Committee.

4.4      Settlement Account: Each Pool Member, the Ancillary Services Provider
         and the Grid Operator shall deliver to the Pool Funds Administrator, in
         the case of a Pool Member, not later than the later of the Effective
         Date and 10 Business Days (or such lesser number of Business Days as
         the Executive Committee may, in respect of any Pool Member, by notice
         to such Pool Member and the Pool Funds Administrator specify) before it
         is admitted as a Pool Member, in the case of the Ancillary Services
         Provider, not later than the later of the Effective Date and the date
         of its admission as a Party and, in the case of the Grid Operator, not
         later than the date on which the Grid Operator first becomes a Pool
         Debtor, a duly completed and signed Settlement Account Designation
         providing details of the Settlement Account to which the Pool Funds
         Administrator is instructed to make payments to such person and, if
         such person wishes to designate a second account as its Settlement
         Account from which payments due from such person are to be transferred
         in accordance with this Schedule, providing details of such other
         account.

4.5      Further information: Each Pool Member, the Ancillary Services Provider
         and the Grid Operator shall also supply to the Pool Funds Administrator
         and the Executive Committee such information or (as the case may be)
         further information concerning its Settlement Account as shall be
         reasonably requested by the Executive Committee or the Pool Funds
         Administrator.

4.6      Change of Settlement Account: Each Pool Member, the Ancillary Services
         Provider and the Grid Operator may, in consultation with the Pool Funds
         Administrator and the Pool Banker, change its Settlement Account at any
         time by delivering to the Pool Funds Administrator and the Pool Banker
         a duly completed and signed notice substantially in the form set out in
         Part 2 of Annex 3 (or in such other form as may from time to time be
         specified by the Executive Committee) specifying the effective date of
         the change (which shall be no less than 10 Business Days after the
         notice is received by the Pool Funds Administrator).

4.7      Maintenance of Settlement Account and Settlement Bank Mandate: Each
         Pool Member, the Ancillary Services Provider and the Grid Operator
         shall, unless otherwise agreed by the Executive Committee, at all times
         maintain a Settlement Account and the Pool Funds Administrator shall
         enter into and maintain a Settlement Bank Mandate with each of the
         relevant Settlement Banks.

4.8      Details of Accounts: The Pool Funds Administrator shall supply full
         details to each Pool Member, the Ancillary Services Provider and the
         Grid Operator of the Pool Clearing Account, the Pool Reserve Account
         and any relevant Collection Account and, for so long as it is
         maintained, the Pool Borrowing Account and shall supply the Executive
         Committee with full details of all Pool Accounts and Settlement
         Accounts.

5.       ESTABLISHMENT OF TRUSTS

5.1      Trusts: The Pool Funds Administrator shall hold all moneys deposited
         with or paid to it (other than Pool Reserve Assets) and such rights as
         may from time to time be vested in it with regard to payment by Pool
         Members (apart from fees owed or paid to it for its services in
         accordance with Schedule 15 and any amounts payable to it pursuant to
         that Schedule upon its removal as Pool Funds Administrator or the
         expiry or termination of its appointment as such), by and from each
         Pool Debtor or with regard to the provision of Security Cover by each
         Pool Member or the Grid Operator including:-

         5.1.1      subject as provided in sub-section 5.2, all moneys from time
                    to time standing to the credit of each Pool Account other
                    than the Pool Reserve Account and the Pool Borrowing
                    Account;

          5.1.2all rights of the Pool Funds Administrator to call for payment or
               Security Cover;

         5.1.3      the Letters of Credit and all rights to, and (subject to
                    sub-section 15.5) moneys representing, any proceeds
                    therefrom other than proceeds repayable by loan in
                    accordance with paragraphs 5.12.5 and 5.16; and

         5.1.4 any interest received or receivable in respect of a Pool Debt or
a Pool Account (other than interest on the Pool Reserve Account),

         on trust for Pool Creditors in accordance with their respective
         individual entitlements as they arise in accordance with the Agreement.
         Upon termination of the said trust any residual balance after
         satisfaction of the entitlement of all Pool Creditors shall be held for
         Providing Members, the Ancillary Services Provider and the Grid
         Operator in accordance with their respective individual entitlements as
         they arise in accordance with the Agreement.

5.2      Trusts in respect of the Credit Facility: The Pool Funds Administrator
         shall hold all moneys from time to time standing to the credit of the
         Pool Clearing Account on trust first for the Facility Bank to the
         extent that there is an aggregate amount outstanding under the Credit
         Facility but on terms that no funds shall be withdrawn in favour of the
         Facility Bank except in satisfaction of a payment due to the Facility
         Bank under the terms of the Credit Facility or in accordance with this
         Schedule and on terms that the Pool Funds Administrator will be
         entitled to make payments out of the account to Pool Members and other
         Parties in accordance with the other provisions of this Schedule.

5.3      Rights of Pool Creditors other than the Ancillary Services Provider:
         The respective rights of Pool Creditors other than the Ancillary
         Services Provider to the assets held by the Pool Funds Administrator on
         the trusts set out in sub-section 5.1 shall be determined in accordance
         with the Agreement and in accordance with the following principles:-

         5.3.1      the extent of each Pool Creditor's individual rights shall
                    be deemed to consist of the aggregate of the claims (to the
                    extent not paid or otherwise satisfied) of such Pool
                    Creditor in respect of each Settlement Period; and

         5.3.2      the assets referred to in sub-section 5.1 shall be deemed to
                    consist of a series of funds, each fund representing the
                    rights or moneys owed, paid, held or otherwise attributable
                    to each Settlement Period. The Pool Funds Administrator
                    shall not be obliged to segregate moneys into separate
                    funds.

          5.4  Rights  of  Ancillary  Services  Provider:   The  rights  of  the
               Ancillary  Services  Provider  to assets  held on trust  shall be
               determined in accordance with Section 23 of Schedule 9.

          5.5  Trusts  in  respect  of  Pool  Reserve  Assets:  The  Pool  Funds
               Administrator shall stand possessed of the Pool Reserve Assets on
               the following trusts, that is to say:-

         5.5.1      at any time when no amounts owed by Pool Debtors are
                    overdue, on trust to repay (subject to and in accordance
                    with the provisions of sub-sections 5.8 and 5.9) to each
                    Providing Member and the Grid Operator the respective share
                    of such Providing Member or (as the case may be) the Grid
                    Operator (determined in accordance with sub-section 5.13) of
                    the Pool Reserve Assets; and

         5.5.2      with automatic effect as soon as any amount owed by a Pool
                    Debtor becomes overdue, to hold an amount of the moneys
                    credited from time to time to the Pool Reserve Account equal
                    to the Shortfall or the amount held in the Pool Reserve
                    Account attributable to such Pool Debtor (whichever is less)
                    on the trusts set out in sub-section 5.1 and the balance (if
                    any) shall be held on the trusts set out in paragraph 5.5.1.

5.6      Overdue amounts: In respect of a Pool Debtor and for the purposes of
         sub-section 5.5, an amount shall be deemed to become overdue at the
         time at which the Pool Funds Administrator becomes aware that such Pool
         Debtor has not made or will not make by 12.30 hours payment in full to
         the credit of the Collection Account of such Pool Debtor of such an
         amount as it is required on such day to make and, for as long as the
         Credit Facility remains unconditionally available, the Pool Funds
         Administrator considers in good faith that the amount in default is not
         likely to be remedied on the next Business Day and the amount overdue
         shall be the amount of the Shortfall.

5.7      Shortfall: The term "Shortfall", as used in this Section 5, means the
         amount from time to time of Notified Payments which have become overdue
         by application of the rule set out in sub-section 5.6 and which have
         not subsequently been paid (whether by remittance from a Pool Debtor,
         payment out of the Pool Reserve Account or a call under a Letter of
         Credit). To the extent that the Pool Funds Administrator is unable to
         determine the precise amount of a Shortfall, it shall be deemed to be
         such amount as the Pool Funds Administrator and the Pool Banker shall
         agree, or failing agreement, the entire amount of the Notified Payment.

5.8      Providing Members' and the Grid Operator's rights to funds: Each
         Providing Member and the Grid Operator remitting funds for credit to
         the Pool Reserve Account agrees that the following terms shall apply.
         None of the remittances shall be repayable until a Providing Member has
         ceased to be a Pool Member or (as the case may be) the Grid Operator
         has ceased to be a Party and has paid in full all amounts actually or
         contingently owed by it to any Pool Creditor, the Settlement System
         Administrator or the Pool Funds Administrator. Furthermore, if and to
         the extent that, at any time when an amount would be repayable to a
         Providing Member or the Grid Operator pursuant to this sub-section 5.8,
         all or any part of the Providing Member's or the Grid Operator's
         interest in the Pool Reserve Assets is represented by a loan to a Pool
         Member or the Grid Operator deemed to be made in accordance with
         paragraph 21.1.3 or 21.1.5 the rights of a Providing Member or (as the
         case may be) the Grid Operator as against the Pool Funds Administrator
         to receive a payment of its share in the Pool Reserve Assets (or the
         relevant portion of such share) shall be conditional on repayment in
         full of the relevant loan.
5.9      Funds not to be withdrawn: Each Providing Member and the Grid Operator
         undertakes not to seek withdrawal of any funds to which it may be
         entitled except in the circumstances permitted by sub-section 5.10 or
         16.7. The Pool Funds Administrator shall be entitled to disregard any
         purported notice of withdrawal not complying with this sub-section 5.9.

          5.10 Providing  Members' and Grid Operator's rights to withdraw funds:
               Notwithstanding  sub-sections  5.8 and 5.9, if a Providing Member
               or (as the case may be) the Grid  Operator  is not in  default in
               respect of any amount owed to a Pool Creditor:-

         5.10.1     the Pool Funds Administrator shall transfer to the relevant
                    Providing Member or the Grid Operator quarterly its share of
                    interest credited to the Pool Reserve Account; and

         5.10.2     the Pool Funds Administrator shall transfer to such
                    Providing Member or the Grid Operator within a reasonable
                    time after a written request of such Providing Member or (as
                    the case may be) the Grid Operator therefor any amount of
                    cash which exceeds the amount which such Providing Member or
                    the Grid Operator is required to maintain in the Pool
                    Reserve Account from time to time in accordance with Section
                    16.

5.11     Waiver of Providing Members' and Grid Operator's rights: Each Providing
         Member and the Grid Operator waives any right it might otherwise have
         to set off against any obligation owed to the Pool Funds Administrator,
         the Pool Banker, any Pool Member, the Ancillary Services Provider or
         the Grid Operator any claims such Providing Member or the Grid Operator
         may have to or in respect of the Pool Reserve Assets.

5.12     Pool Reserve Assets: "Pool Reserve Assets" means the aggregate of:-

          5.12.1 amounts from time to time credited to the Pool Reserve Account;

         5.12.2     amounts which any Providing Member or the Grid Operator is
                    from time to time obliged to pay to the Pool Funds
                    Administrator for credit to the Pool Reserve Account and
                    claims in respect of such amounts;

         5.12.3    interest accrued and accruing on the Pool Reserve Account;

          5.12.4 any amounts  credited to the Pool Reserve  Account  pursuant to
               paragraph 15.4.3; and

         5.12.5 any loans deemed to be made from any amounts credited to the
Pool Reserve Account pursuant to paragraph 21.1.3 or 21.1.5.

5.13     Providing Members' and Grid Operator's rights and interests in the Pool
         Reserve Account: At any time when it is necessary to determine the
         respective rights and interests of Providing Members and the Grid
         Operator in and to funds standing to the credit of the Pool Reserve
         Account, such rights shall be determined in accordance with the
         following rules:-

         5.13.1     any amount withdrawn from the Pool Reserve Account following
                    the occurrence of a Shortfall which the Pool Funds
                    Administrator has determined to be attributable to a
                    particular Providing Member or (as the case may be) the Grid
                    Operator (the "Relevant Provider") (irrespective of the
                    existence or otherwise of actual fault on the part of the
                    Relevant Provider) shall in the first instance reduce pro
                    tanto the Relevant Provider's interest in the Pool Reserve
                    Assets;

         5.13.2     if, in any circumstances described in paragraph 5.13.1, the
                    Shortfall exceeds the Relevant Provider's interest in the
                    Pool Reserve Account, then any excess required to be
                    withdrawn from the Pool Reserve Account shall reduce the
                    respective interests of Providing Members and the Grid
                    Operator, other than the Relevant Provider, in proportion to
                    their respective interests in the Pool Reserve Account prior
                    to the withdrawal;

         5.13.3     any proceeds of a Letter of Credit which are to be credited
                    to the Pool Reserve Account pursuant to sub-section 5.16,
                    and any amounts paid by a Relevant Provider to make up a
                    payment out of the Pool Reserve Account, shall be applied in
                    priority in or towards reinstating (rateably among
                    themselves) the respective interests of Providing Members
                    and the Grid Operator other than the Relevant Provider in
                    the Pool Reserve Account;

         5.13.4     subject to the rules set out in paragraphs 5.13.1 to 5.13.3
                    (inclusive), the respective rights of each Providing Member
                    and the Grid Operator in and to funds standing to the credit
                    of the Pool Reserve Account shall be to receive (subject to
                    sub-sections 5.8 and 5.9) an amount equal to the aggregate
                    amounts remitted by the Providing Member and the Grid
                    Operator to the Pool Reserve Account and not subsequently
                    withdrawn, together with a proportionate share of any
                    interest from time to time credited to the Pool Reserve
                    Account; and

         5.13.5     in the absence of a Shortfall, any amounts credited to the
                    Pool Reserve Account following a call under a Letter of
                    Credit pursuant to sub-section 15.5 shall be considered as
                    an interest in the Pool Reserve Assets of the Relevant
                    Provider in respect of the relevant Letter of Credit.

          5.14 Overpayments  to be  held on  trust:  If and to the  extent  that
               payments under this Schedule actually made on any day by the Pool
               Funds  Administrator  to Pool Members or the  Ancillary  Services
               Provider  in  respect  of  supplies  of  electricity   under  the
               Agreement  or  the   provision  of  Ancillary   Services  do  not
               correspond  exactly with their  respective  payment  entitlements
               established  in  accordance  with the  Agreement  in  relation to
               supplies of electricity or the provision of Ancillary Services in
               respect  of  that  same  day,  then  the  person   receiving  any
               overpayment  shall  receive  and be deemed to hold the  amount of
               such overpayment on trust for the Pool Member or rateably for the
               Pool Members, the Ancillary Services Provider or (as the case may
               be) for the Grid Operator  which, in respect of that same day was
               (were)  underpaid  and,  on the written  instruction  of the Pool
               Funds Administrator, shall account in accordance with sub-section
               23.2   to  the   Pool   Funds   Administrator   accordingly   for
               redistribution of the moneys.

5.15     Reimbursement of overpayments: Subject to sub-sections 5.8 and 5.14,
         all payments under this Schedule shall be made on the basis that a Pool
         Member or the Grid Operator shall only be entitled to claim
         reimbursement of an overpayment made by it (whether to the Pool Funds
         Administrator or (through the Pool Funds Administrator) to another Pool
         Member, the Ancillary Services Provider or the Grid Operator) if, and
         then only to the extent that:-

          (a)  the aggregate amounts paid by the Pool Member or (as the case may
               be) the Grid Operator in respect of the relevant Payment Date

         exceed

         (b)        the total amounts payable by that Pool Member or (as the
                    case may be) the Grid Operator to Pool Creditors in respect
                    of that Payment Date together with all amounts (if any)
                    overdue by that Pool Member or (as the case may be) the Grid
                    Operator in respect of periods prior to the relevant Payment
                    Date.

          5.16 Repayment  of loans:  Notwithstanding  their  rights  pursuant to
               sub-section  5.1 in and to  Letters  of Credit  and the  proceeds
               thereof, Pool Creditors agree that if:-

         5.16.1     a payment is received under a Letter of Credit after a sum
                    has been withdrawn from the Pool Reserve Account to make
                    good (in whole or in part) a discrepancy between amounts
                    owed and amounts received by the due time on a particular
                    Payment Date; and

          5.16.2 the  aggregate  of the  amounts  paid out of the  Pool  Reserve
               Account  and paid under the Letter of Credit  exceeds the amounts
               owed in respect of the relevant Payment Date,

         then any excess paid under the Letter of Credit over the amount then
         remaining unpaid in respect of the relevant Payment Date shall be
         credited to the Pool Reserve Account. Where appropriate, any such
         credit shall pro tanto constitute repayment of any loans deemed to be
         made pursuant to paragraphs 21.1.3 or 21.1.5.

5.17     No claim for breach of trust: Provided that the Pool Funds
         Administrator carries out its duties under the Agreement, none of the
         Pool Members, Ancillary Services Provider nor the Grid Operator shall
         have any claim against the Pool Funds Administrator for breach of trust
         or fiduciary duty arising solely out of any discrepancy between
         payments actually made in respect of any day and the entitlement of
         Pool Members, Ancillary Services Provider or the Grid Operator to
         receive payments in respect of that same day.

6.       POOL LEDGER ACCOUNTS

6.1      Maintenance of Pool Ledger Accounts: The Pool Funds Administrator shall
         maintain ledger accounts showing all amounts payable and receivable by
         each Pool Member, the Ancillary Services Provider and the Grid Operator
         according to calculations made and notifications issued by the Pool
         Funds Administrator pursuant to this Schedule.

6.2      Ledger extracts: Each Pool Member, the Ancillary Services Provider and
         the Grid Operator shall be entitled to receive a quarterly extract of
         the ledger account which is relevant to it showing all amounts debited
         and credited to its account provided that, if a Pool Member, the
         Ancillary Services Provider or the Grid Operator so requests of the
         Pool Funds Administrator, it shall be entitled to receive a monthly
         extract of such ledger account.

6.3      Certified copy extracts: Without prejudice to the generality of the
         general duties and responsibilities of the Pool Funds Administrator set
         out in Schedule 15, in the event of any enforcement proceedings being
         brought by a Pool Creditor against a non-paying Pool Member or the Grid
         Operator, the Pool Funds Administrator shall forthwith upon request
         being made to it at the cost of the requesting Pool Creditor provide a
         certified copy of an extract of the ledger accounts sufficient to
         establish the details of each transaction in respect of which the Pool
         Creditor has a claim against the non-paying Pool Member or the Grid
         Operator.

6.4      Confidentiality: The ledger accounts maintained by the Pool Funds
         Administrator shall be kept confidential in accordance with Part XVIII
         of the Agreement from Committee Members and from all Pool Members and
         the Grid Operator (except as required pursuant to Clause 63.1.5 or
         63.1.6 or sub-section 6.2 or 6.3) but the Pool Funds Administrator
         shall disclose such ledger accounts to the Pool Auditor for the purpose
         of any audit requested to be conducted pursuant to Part IX of the
         Agreement.

6.5      Information: Any extract of a ledger account of any other records, data
         or information provided pursuant to Clause 63.1.5 or 63.1.6 or
         sub-section 6.2 (collectively referred to in this Section 6 as the
         "information") shall, save in the case of manifest error, be deemed
         prima facie evidence of its contents.

6.6      Review of extracts: Each Pool Member, the Ancillary Services Provider
         and the Grid Operator shall promptly review all extracts of ledger
         accounts sent to it and shall (without prejudice to any of its rights
         under the Agreement) where practicable within 10 Business Days after
         receiving such information notify the Pool Funds Administrator of any
         errors in such account of which it is aware.

6.7      Dispute of accuracy: If the Pool Funds Administrator at any time
         receives a notice disputing the accuracy of any ledger account,
         records, data or information, it shall consult with the Pool Member who
         gave the notice, the Ancillary Services Provider or (as the case may
         be) the Grid Operator and each shall use all reasonable endeavours to
         agree the information. Promptly after agreement is reached, the Pool
         Funds Administrator shall, if necessary, issue corrected information
         and notifications under the provisions of sub-section 17.8.

[Sections 7 to 14 (inclusive) not used].



<PAGE>


                                     PART 3

                      SECURITY COVER AND CREDIT MONITORING

15.      SECURITY COVER

          15.1 Provision of Security Cover:  Each Providing  Member and the Grid
               Operator  shall  provide  Security  Cover  from  time  to time in
               accordance with the following provisions:-

         15.1.1     each Providing Member and the Grid Operator (with the
                    exception of any entity of or wholly-owned or Controlled by
                    the United Kingdom Government) shall:-

                    (a) deliver to the Pool Funds Administrator evidence
reasonably satisfactory to the Executive Committee that:-

                          (i)      it presently holds an Approved Credit 
                                   Rating; or

                          (ii)     it has provided and is not in default under
                                   alternative or additional security as may be
                                   approved from time to time by unanimous
                                   decision of all Committee Members (Committee
                                   Members being under no obligation to approve
                                   any such security); or

                    (b)   comply with the provisions of paragraph 15.1.3;

          15.1.2 in addition to the  provisions of paragraph  15.1.1 but subject
               as provided in Sections 21.12 and 25:-

                    (a)   each Supplier (including any Supplier which is an
                          entity of or wholly-owned or Controlled by the United
                          Kingdom Government) shall, not later than the date of
                          its admission as a Pool Member, deliver to the Pool
                          Funds Administrator:-

          (i)  a Letter of Credit  (available  for an initial period of not less
               than 12 months); and

          (ii) cash for credit to the Pool Reserve Account,

          in   both cases in such amount as shall be  notified by the  Executive
               Committee in accordance with Section 16; and

                    (b)   each Providing Member, not being a Supplier,
                          (including any entity of or wholly-owned or Controlled
                          by the United Kingdom Government and not referred to
                          in paragraph 15.1.2(a) above) shall, not later than
                          the date of its admission as a Pool Member or 31st
                          March, 1995 (whichever is the later) and the Grid
                          Operator shall, not later than 1st April, 1997,
                          deliver to the Pool Funds Administrator:-

          (i)  a Letter of Credit  (available  for an initial period of not less
               than 12 months); and

          (ii) cash for credit to the Pool Reserve Account,

          in   both cases in such amount as shall be  notified by the  Executive
               Committee in accordance with Section 16;

         15.1.3     each Providing Member and the Grid Operator mentioned in
                    paragraph 15.1.1 to which paragraph (b) of paragraph 15.1.1
                    applies and (if paragraph (b) of paragraph 15.1.1 applies to
                    it) the Grid Operator shall immediately be required (in
                    addition to its obligations, if any, under paragraph 15.1.2)
                    to deliver to the Pool Funds Administrator a Letter of
                    Credit (available for an initial period of not less than 12
                    months) or cash for credit to the Pool Reserve Account in
                    such amount and in such proportions as shall be notified by
                    the Executive Committee in accordance with Section 16.

15.2     Letters of Credit: For the avoidance of doubt nothing in sub-section
         15.1 or 15.6 shall prevent any Providing Member or the Grid Operator
         from delivering a single Letter of Credit in respect of its obligations
         under paragraphs 15.1.2 and 15.1.3.

15.3     Cash deposit: Any cash amount delivered to the Pool Funds Administrator
         for credit to the Pool Reserve Account shall be held on the terms set
         out in Section 5. Amounts standing to the credit of the Pool Reserve
         Account shall bear interest at the Reserve Interest Rate.

15.4     Maintenance of Security Cover: Each Providing Member and the Grid
         Operator shall be required to provide and at all times thereafter
         maintain a Security Amount equal to or more than the Security Cover
         applicable to it in such aggregate amount as shall be set from time to
         time in accordance with this Part 3. Immediately upon any reduction
         occurring in the Security Amount provided by any Providing Member or
         the Grid Operator or any Letter of Credit being for any reason drawn
         down (and including the deemed making of any loan to that Providing
         Member or the Grid Operator under the provisions of paragraph 21.1.3 or
         21.1.5) the Providing Member or (as the case may be) the Grid Operator
         will procure that new Letters of Credit are issued or existing Letters
         of Credit are reinstated (to the satisfaction of the Pool Funds
         Administrator) to their full value or that cash is placed to the credit
         of the Pool Reserve Account in an amount required to restore the
         Security Amount to an amount at least equal to the Security Cover
         applicable to the Providing Member or (as the case may be) the Grid
         Operator and in such proportions of Letters of Credit and cash as this
         Part 3 requires. Not later than 10 Business Days before any outstanding
         Letter of Credit is due to expire, the Providing Member or the Grid
         Operator providing such Letter of Credit shall procure to the
         satisfaction of the Pool Funds Administrator that its required Security
         Amount will be available for a further period of not less than 12
         months which may be done in one of the following ways:-

         15.4.1     (subject to the issuing bank continuing to have the credit
                    rating referred to in sub-section 15.6) provide the Pool
                    Funds Administrator with confirmation from the issuing bank
                    that the validity of the Letter of Credit has been extended
                    for a period of not less than 12 months on the same terms
                    and otherwise for such amount as is required by this Part 3;
                    or

         15.4.2     provide the Pool Funds Administrator with a new Letter of
                    Credit issued by an issuing bank with the credit rating
                    required by this Schedule for an amount at least equal to
                    the required Security Amount applicable to it (less its
                    balance on the Pool Reserve Account) which Letter of Credit
                    shall be available for a period of not less than 12 months;
                    or

         15.4.3     procure such transfer to the Pool Funds Administrator for
                    credit to the Pool Reserve Account as shall ensure that the
                    credit balance applicable to it standing to the credit of
                    the Pool Reserve Account shall be at least equal to the
                    required Security Amount.

15.5     Failure to supply Security Cover: If a Providing Member or the Grid
         Operator fails at any time to provide Security Cover to the
         satisfaction of the Pool Funds Administrator in accordance with the
         provisions of this Section 15, the Pool Funds Administrator may at any
         time while such default continues, and if at such time any Letter of
         Credit forming part of the Security Cover is due to expire within nine
         Business Days it shall immediately, and without notice to such
         Providing Member or (as the case may be) the Grid Operator, demand
         payment of the entire amount of any outstanding Letter of Credit and
         shall credit the proceeds of the Letter of Credit to the Pool Reserve
         Account to be held on the terms and on the trusts set out in Section 5.

15.6     Substitute Letter of Credit: If the bank issuing the Letter of Credit
         of any Providing Member or the Grid Operator ceases to have the credit
         rating as is set out in sub-section 1.1 under "Letter of Credit", such
         Providing Member or (as the case may be) the Grid Operator shall
         forthwith procure the issue of a substitute Letter of Credit by a bank
         that has such credit rating.

16.      CREDIT MONITORING

16.1     Determination of Security Cover: The amount of Security Cover which
         each Providing Member and the Grid Operator shall be required to
         maintain and, in respect of the amounts of Security Cover to be
         provided under paragraph 15.1.2 (so long as applicable) and paragraph
         15.1.3 the proportions as between cash and Letter of Credit that may be
         permitted, shall be determined from time to time by the Executive
         Committee in consultation with the Pool Funds Administrator in
         accordance with this Section 16 and on the basis of the criteria set
         out in sub-section 16.2, and shall be notified to such Providing Member
         or (as the case may be) the Grid Operator, and to the Pool Funds
         Administrator.

16.2     Criteria for provision of Security Cover:

          16.2.1 If  paragraph  (b) of paragraph  15.1.1  applies to a Providing
               Member  or the  Grid  Operator,  the  amount  of  Security  Cover
               required to be provided by such Providing  Member or (as the case
               may be) the Grid Operator in addition to the amounts  referred to
               in paragraph 15.1.2 (so long as applicable)  shall be provided by
               Letter of Credit in an  amount to be  assessed  by the  Executive
               Committee in consultation  with the Pool Funds  Administrator  as
               the aggregate  amounts  payable  pursuant to the Agreement by the
               relevant  Providing  Member  or (as the  case  may  be) the  Grid
               Operator  in  respect  of  purchases  of,  or as the case may be,
               prospective   purchases  of  electricity   (including   Ancillary
               Services) made by the relevant  Providing Member or in respect of
               sums payable in accordance with Clause 49 of the Agreement by the
               Grid  Operator  over  a 28  day  period,  as  determined  by  the
               Executive  Committee  provided  that  with  the  approval  of the
               Executive  Committee,  all or part of the required Security Cover
               may be provided in cash credited to the Pool Reserve Account.

          16.2.2 In respect of all Providing Members and the Grid Operator,  the
               amounts  required  to be  provided  by  each of  them  which  are
               referred to in  paragraph  15.1.2 (so long as  applicable)  shall
               (subject  as  provided  in  sub-section  21.12 and Section 25) be
               initially  as to a  minimum  of 20 per  cent.  in  cash  and  the
               remainder by way of Letter of Credit,  and  thereafter as revised
               by the Executive Committee. Such amounts shall be assessed by the
               Executive   Committee  in   consultation   with  the  Pool  Funds
               Administrator  to cover banking error and to minimise  reductions
               of payments to Pool Creditors.

16.3     Six monthly variation: In respect of paragraphs 16.2.1 and 16.2.2, the
         Executive Committee shall calculate two amounts for the two six-month
         periods commencing 1st April and 1st October in each year and shall
         advise the Pool Funds Administrator and the relevant Providing Members
         or (as the case may be) the Grid Operator accordingly. Such six monthly
         variation shall not apply to paragraph 16.2.2 where Section 25 is
         applicable.

16.4     Review of Security Cover: The Pool Funds Administrator shall keep under
         review the Security Amounts relating to each Providing Member and the
         Grid Operator and shall promptly advise the Executive Committee, the
         relevant Providing Member or (as the case may be) the Grid Operator
         whenever the Security Cover maintained by such Providing Member or (as
         the case may be) the Grid Operator is significantly more or less than
         the amount required to be maintained pursuant to this Part 3.

16.5     Increase or Decrease of Security Cover: If, after considering the
         recommendations of the Pool Funds Administrator and any representations
         which may be made by the relevant Providing Member or (as the case may
         be) the Grid Operator, the Executive Committee determines that the
         Security Cover of a Providing Member or the Grid Operator should be
         increased or decreased, it shall so notify the Providing Member or the
         Grid Operator (as the case may be), the Pool Funds Administrator and
         the Director. If the Executive Committee determines that such Security
         Cover should be decreased, the Providing Member or (as the case may be)
         the Grid Operator consents and the Director so approves, that reduction
         shall take place. The Pool Funds Administrator shall consent to an
         appropriate reduction in the available amount of any outstanding Letter
         of Credit and/or shall repay to the Providing Member or (as the case
         may be) the Grid Operator such part of the deposit held in the Pool
         Reserve Account for the account of such Providing Member or the Grid
         Operator (together with all accrued interest on the part to be repaid)
         sufficient to reduce the Providing Member's or Grid Operator's Security
         Amount to the level of Security Cover applicable to it. If the
         Executive Committee determines that the Providing Member's or the Grid
         Operator's Security Cover should be increased, the relevant Providing
         Member or (as the case may be) the Grid Operator shall, within five
         Business Days of notice as aforesaid, procure an additional or
         replacement Letter of Credit or transfer to the Pool Funds
         Administrator a cash deposit for credit to the Pool Reserve Account in
         an amount sufficient to increase its Security Amount so as to be at
         least equal to the level of Security Cover applicable to it.

16.6     Notification in respect of Security Cover: The Pool Funds
         Administrator shall notify the Executive Committee, the Settlement
          System Administrator and the Director promptly if:-

         16.6.1    a Providing Member or the Grid Operator fails to provide,
         extend or renew a Letter of Credit which it is required to maintain 
         pursuant to Section 15; or

         16.6.2 the Pool Funds Administrator shall make a call under any such
Letter of Credit; or

         16.6.3     the Pool Funds Administrator becomes aware that a Providing
                    Member or the Grid Operator (a) shall cease to retain an
                    Approved Credit Rating, or (b) shall be placed on credit
                    watch by the relevant credit rating agency (or becomes
                    subject to an equivalent procedure) which in any case casts
                    doubt on the Providing Member or the Grid Operator retaining
                    an Approved Credit Rating, or (c) shall be in default under
                    the additional or alternative security referred to in
                    paragraph 15.1.1; or

         16.6.4     the Security Amount in relation to any Providing Member or
                    the Grid Operator is at any time less than the level of its
                    required Security Cover for the time being; or

         16.6.5     the Pool Funds Administrator becomes aware that any bank
                    that has issued a Letter of Credit which has not expired
                    ceases to have the credit rating required by this Schedule.

16.7     Release from Security Cover Obligations: Upon a Providing Member
         ceasing to be a Pool Member or the Grid Operator ceasing to be a Party
         to the Agreement (as the case may be) and provided that all amounts
         owed by the Providing Member or the Grid Operator have been duly and
         finally paid and that it is not otherwise in default in any respect
         under the Agreement, the Providing Member or the Grid Operator shall be
         released from the obligation to maintain Security Cover and the Pool
         Funds Administrator shall consent to the revocation of any outstanding
         Letter of Credit.

16.8     No liability for amount of Security Cover: Any recommendations made by
         the Pool Funds Administrator pursuant to this Section 16 shall be given
         in good faith. Any instructions given by the Executive Committee in
         respect of the amount of Security Cover to be maintained by a Providing
         Member or the Grid Operator if given in good faith shall, insofar as
         applicable in terms of this Schedule, be binding on all Pool Members,
         the Ancillary Services Provider and the Grid Operator and neither the
         Pool Funds Administrator nor any Committee Member shall incur any
         liability by reason of the Security Cover of a Providing Member or the
         Grid Operator proving to be inadequate or excessive.



<PAGE>


                                     PART 4

                         BILLING AND PAYMENT PROCEDURES

17.      RECEIPT AND VERIFICATION OF INFORMATION

17.1     Receipt of Information from Settlement System Administrator: Not later
         than 12.00 hours on the Notification Date the Pool Funds Administrator
         shall require of, and take all steps available to it to procure from,
         the Settlement System Administrator, and the Settlement System
         Administrator shall use its best endeavours to provide to the Pool
         Funds Administrator, the information referred to in sub-sections 17.2
         to 17.5 (inclusive) concerning supplies of electricity, the provision
         of Ancillary Services and the sums payable in relation to Transport
         Uplift in respect of each Settlement Day.

17.2     Information for each Settlement Day: The information required in 
         respect of each Settlement Day is as follows:-

         17.2.1    the Settlement Day;

         17.2.2    the corresponding Payment Date;

         17.2.3    the Settlement Run identification number;

         17.2.4     the total amount owing in accordance with the Agreement
                    (exclusive of United Kingdom Value Added Tax) in respect of
                    electricity supplied and Ancillary Services provided and
                    Transport Uplift due during each Settlement Day; and

         17.2.5 the total amount owing (exclusive of United Kingdom Value Added
Tax) in respect of Ancillary Services provided during each Settlement Day.

17.3     Information - taking of electricity: The information required in
         respect of each Pool Member taking electricity in each Settlement Day
         is as follows:-

         17.3.1    the Pool Member's identification number;

         17.3.2    the Pool Member's name; and

         17.3.3     the total amount owing in accordance with the Agreement
                    (exclusive of United Kingdom Value Added Tax) in respect of
                    electricity taken by such Pool Member during each Settlement
                    Day.

17.4     Information - provision of electricity: The information required in
         respect of each Pool Member providing electricity during each
         Settlement Day is as follows:-

         17.4.1    the Pool Member's identification number;

         17.4.2    the Pool Member's name; and

         17.4.3     the total amount owing in accordance with this Agreement
                    (exclusive of United Kingdom Value Added Tax) in respect of
                    electricity provided by such Pool Member during each
                    Settlement Day.

17.5     Information - Ancillary Services Provider and Grid Operator: The
         information required in relation to the Ancillary Services Provider and
         the Grid Operator in respect of each Settlement Day is the total amount
         receivable in accordance with the Agreement by the Ancillary Services
         Provider (exclusive of United Kingdom Value Added Tax) for the
         provision of Ancillary Services during each Settlement Day and the
         total amount (exclusive of United Kingdom Value Added Tax) payable by
         the Grid Operator in relation to Transport Uplift (including in
         relation to Ancillary Services) during each Settlement Day.

17.6     Verification of Information: Upon receipt of the information supplied
         by the Settlement System Administrator, the Pool Funds Administrator
         shall verify whether, on the basis of such information, the sum of the
         amounts shown to be receivable by each Pool Member in respect of its
         sales of electricity plus the amount shown to be payable to the
         Ancillary Services Provider in respect of its provision of Ancillary
         Services on the relevant Settlement Day is equal to the sum of the
         amounts shown to be payable by each Pool Member in respect of its
         purchases of electricity on the same Settlement Day and by the Grid
         Operator in relation to Transport Uplift.

17.7     Deemed Verification: Unless the Pool Funds Administrator shall, by
         close of business on the Notification Date, otherwise inform the
         Settlement System Administrator, each Pool Member, the Ancillary
         Services Provider and the Grid Operator to the contrary before the
         Payment Date, the information provided by the Settlement System
         Administrator shall be deemed to be verified.

17.8     Rectification of Errors: If the Pool Funds Administrator determines
         that the information provided by the Settlement System Administrator
         cannot be verified in accordance with sub-section 17.6, it shall as
         soon as possible notify the Settlement System Administrator, each Pool
         Member, the Ancillary Services Provider and the Grid Operator
         accordingly and require the Settlement System Administrator to correct
         any errors and obtain the Pool Funds Administrator's verification of
         the corrected information as quickly as possible. As soon as the Pool
         Funds Administrator verifies that the information provided by the
         Settlement System Administrator can be verified in accordance with
         sub-section 17.6, the Pool Funds Administrator shall notify the
         Settlement System Administrator, each Pool Member, the Ancillary
         Services Provider and the Grid Operator of the verified information
         required to be given pursuant to sub-section 17.6. The Settlement
         System Administrator shall use its best endeavours to provide such
         corrected information as may be necessary for the Pool Funds
         Administrator to issue verification.

17.9     Amounts in Advice Notes; Adjustments:

         17.9.1    The amounts to be incorporated in the Advice Notes in
         accordance with sub-section 18.1 (and in all cases together with
         United Kingdom Value
                    Added Tax thereon) shall be:-

                    (a) if verification has been made in accordance with
sub-section 17.6, the full relevant amounts so verified;

                    (b)   to the extent verification can reasonably be made in
                          circumstances where all the information cannot be
                          fully verified as described in sub-section 17.6, those
                          amounts which are shown against the name of each Pool
                          Debtor in such information as is received under the
                          provisions of sub-section 17.1 (whether or not such
                          information is an estimate only) and such amounts will
                          be shared amongst the relevant Pool Creditors in the
                          proportion which the amount shown as due to each of
                          them in such information as aforesaid bears to the
                          amounts which are so shown as due to all of them; and

                    (c)   to the extent that for any reason whatever the amounts
                          to be paid cannot be verified at all (including, but
                          not limited to, application of Force Majeure and
                          failure to provide information on the part of the
                          Settlement System Administrator) or the appropriate
                          calculations to permit payment in accordance with
                          sub-paragraph (b) above cannot properly be made, the
                          same as the amounts calculated as being payable by and
                          to Pool Members, to the Ancillary Services Provider
                          and by the Grid Operator in respect of the last same
                          day of the week in respect of which payments were
                          verified under sub-section 17.6 (provided that any
                          Pool Member who was not at that earlier time a Pool
                          Member, or vice versa, shall be ignored and such
                          adjustment made as the Pool Funds Administrator
                          considers appropriate).

         17.9.2     In the event that payments are made in the circumstances set
                    out in paragraph 17.9.1(b) or (c), the Settlement System
                    Administrator in conjunction with the Pool Funds
                    Administrator shall, as soon as actual verification can
                    thereafter be made, make such adjustments as may be
                    necessary (and, where relevant, apply interest at the
                    Reserve Interest Rate or at such rate as shall be set from
                    time to time by the Executive Committee) to account for any
                    differences between payments made and actual verified
                    payment information.

17.10    Postponed Payment Date: If for any reason beyond the reasonable control
         of the Pool Funds Administrator it is not possible, after application
         of sub-section 17.9, for the Pool Funds Administrator to determine by
         the close of business on the Notification Date the amounts to be
         incorporated in the Advice Notes, the Pool Funds Administrator shall
         inform the Settlement System Administrator, each Pool Member, the
         Ancillary Services Provider and the Grid Operator that the Payment Date
         shall be postponed so that it falls on the second Business Day after
         the day on which the Pool Funds Administrator verifies the information
         provided by the Settlement System Administrator pursuant to sub-section
         17.6 (any such Payment Date being the "Postponed Payment Date" and a
         reference to a Payment Date in this Schedule shall where applicable
         include a reference to a Postponed Payment Date). On the Postponed
         Payment Date, each Pool Member who took electricity on the Settlement
         Day to which the Postponed Payment Date applies and the Grid Operator
         shall pay interest on all such amounts for each day from and including
         the originally scheduled Payment Date to (but excluding) the Postponed
         Payment Date at such rate as shall be set from time to time by the
         Executive Committee or, in the absence of such rate, at the Reserve
         Interest Rate and all Pool Members who supplied electricity and the
         Ancillary Services Provider on such Settlement Day shall be entitled to
         receive in addition to the amounts that they are entitled to receive in
         respect of such supplies, interest on such amounts for each day during
         the same period and at the same rate. Interest shall accrue from day to
         day and shall be calculated by the Pool Funds Administrator on a 365
         day year basis.

17.11    Further notification: Where instructed by the Executive Committee, or
         where there is an award by a Court of competent jurisdiction or an
         arbitrator, or a decision of the Pool Auditor or where rendered
         appropriate by Clause 52, the Pool Funds Administrator shall issue
         further or other notification to the Pool Members, the Ancillary
         Services Provider and the Grid Operator in accordance with the
         provisions of this Section 17; and the Business Day which falls five
         Business Days after the date of such notification or earlier if
         practicable shall be a Payment Date.

17.12    Payment by Pool Debtor: Without prejudice to its obligations in respect
         of supplies of electricity in accordance with the provisions of the
         Agreement, each Pool Debtor shall without defence, set-off or
         counterclaim (but without prejudice to any other rights or remedies
         available to such Pool Debtor) make payment on the relevant Payment
         Date of the full amount (including United Kingdom Value Added Tax) so
         notified as being payable by it for the account of those Pool Members
         and, as the case may be, the Ancillary Services Provider so notified as
         being entitled to receive payments. Payment shall be made in accordance
         with the terms of this Schedule. For the avoidance of doubt no payment
         made shall be treated as being paid on account or subject to any
         condition or reservation, notwithstanding the provisions for the making
         of subsequent adjusting payments provided in this Schedule. The
         provisions of sub-section 5.14 shall apply to any payment insofar as it
         is or may constitute an overpayment.

17.13    Liability several: Save as otherwise expressly provided, the liability
         of each Pool Member and the Grid Operator for amounts payable by it
         pursuant to this Schedule is several and no Pool Member shall be liable
         for the default of any other Pool Member or the Grid Operator and the
         Grid Operator shall not be liable for the default of any Pool Member.

18.      ADVICE NOTES

18.1     Despatch of Advice Notes: Not later than 17.00 hours on the relevant
         Notification Date (and, if this is not practicable, in good time (as
         that expression is explained in more detail in the relevant Agreed
         Procedure) to enable Pool Members, the Ancillary Services Provider and
         the Grid Operator to give all necessary instructions for payments to be
         effected on the relevant Payment Date) the Pool Funds Administrator
         shall:-

         18.1.1     despatch to Pool Members, the Ancillary Services Provider
                    and the Grid Operator Advice Notes showing amounts
                    (inclusive of United Kingdom Value Added Tax) which,
                    according to its calculations, are to be paid by or to each
                    Pool Member, the Ancillary Services Provider and the Grid
                    Operator on each Payment Date in respect of supplies of
                    electricity, the provision of Ancillary Services and sums to
                    be paid in relation to Transport Uplift during each
                    Settlement Day to which that Notification Date relates;

         18.1.2     notify each Settlement Bank of amounts payable by the Pool
                    Members, the Ancillary Services Provider or the Grid
                    Operator maintaining a Settlement Account at the relevant
                    Settlement Bank; and

         18.1.3 notify the Pool Banker of the amount to be remitted to the Pool
Clearing Account by each Settlement Bank.

18.2     Method of despatch: All Advice Notes shall be despatched by the means 
         established in accordance with paragraphs 3.1.1 and 3.1.5, or by such
         other means as the Executive Committee may reasonably direct.

18.3     Content of Advice Notes: All Advice Notes will include an appropriate
         indication if payment is being made under the provisions of paragraph
         17.9.1(b), 17.9.1(c) or 17.9.2.

18.4     Interest: Where interest is payable by or to any Pool Member, the
         Ancillary Services Provider or the Grid Operator pursuant to this
         Schedule, the Pool Funds Administrator shall, at the same time as it
         despatches the Advice Notes, despatch to each Pool Member and the
         Ancillary Services Provider who is required to pay interest and to each
         Pool Member, the Ancillary Services Provider and the Grid Operator who
         is entitled to receive interest a statement showing the amount of
         interest payable or receivable by it, the rate of interest applicable
         thereto and the amount (if any) of tax to be withheld.

19.      PAYMENT PROCEDURE

19.1     Instructions for payment: Each Pool Member, the Ancillary Services
         Provider and the Grid Operator shall, in respect of each Payment Date
         on which it is under an obligation to make a payment under this
         Schedule, make such arrangements as will ensure that such payment is
         credited to the relevant Collection Account in sufficient time to allow
         such Settlement Bank to make irrevocable arrangements to remit to the
         Pool Clearing Account by 12.30 hours the amount payable by that Pool
         Member, the Ancillary Services Provider or (as the case may be) the
         Grid Operator in respect of that Payment Date. Each Pool Member, the
         Ancillary Services Provider and the Grid Operator shall ensure all
         remittances by its bank to the relevant Collection Account shall be
         remittances for value on the relevant Payment Date.

19.2     Pool Funds Administrator's responsibilities:

         19.2.1     As soon as practicable and in any event not later than 13.00
                    hours on each Payment Date the Pool Funds Administrator
                    shall take such action as is required to ensure that all
                    amounts required to be credited to each Collection Account
                    on such Payment Date have been so credited (or if not so
                    credited, the reason therefor established).

         19.2.2     As soon as practicable and in any event not later than 13.30
                    hours on each Payment Date the Pool Funds Administrator
                    shall take such action as is required to ensure that all
                    amounts credited to each Collection Account on such Payment
                    Date in accordance with sub-section 19.1 have been remitted
                    to the Pool Clearing Account.

         19.2.3     As soon as practicable and in any event not later than 14.30
                    hours on each Payment Date the Pool Funds Administrator
                    shall take such action as is required to ensure that it
                    verifies the actual amounts credited to each Collection
                    Account and remitted to the Pool Clearing Account on or
                    before 13.30 hours on that Payment Date and the aggregate of
                    such amounts.

19.3     Non-payment: If a Pool Member or the Grid Operator becomes aware that a
         payment for which it is responsible will not be credited to the
         relevant Collection Account by 12.30 hours on the relevant Payment
         Date, it will immediately notify the Pool Funds Administrator, giving
         all details available to the Pool Member or (as the case may be) the
         Grid Operator. The Pool Funds Administrator shall, as soon as it
         becomes aware that a payment will not be remitted, use its best
         endeavours to establish the cause of non-payment.

19.4     Excess payments: If by 12.30 hours on any Payment Date the Pool Funds
         Administrator is advised by a Settlement Bank that the Settlement Bank
         will be making a payment in excess of the amount notified to the Pool
         Member or the Grid Operator pursuant to sub-section 18.1 in respect of
         that Payment Date, or if the Pool Banker notifies the Pool Funds
         Administrator by 13.30 hours that amounts greater than the amounts
         notified to the Pool Banker pursuant to paragraph 18.1.3 have been
         credited to the Pool Clearing Account, the Pool Funds Administrator
         shall use its best endeavours to ascertain the nature of the excess
         payment, to calculate the entitlement to such payment and to instruct
         the Pool Banker by 14.30 hours that day to credit the appropriate
         Settlement Account(s) with the amount determined by the Pool Funds
         Administrator as falling due to each Pool Creditor in accordance with
         this Schedule provided that, where an External Pool Member makes a
         payment in excess of the amount owing by it on any Payment Date and the
         reason for such overpayment is the difficulty in remitting funds on a
         future Payment Date because of the mismatch of bank and public holidays
         between countries, the Pool Funds Administrator shall instruct the Pool
         Banker to credit the Pool Reserve Account with the amount of the
         excess. Any Pool Member or the Grid Operator who instructs its bank to
         make a payment in excess of the amount owing by that Pool Member or (as
         the case may be) the Grid Operator on any Payment Date shall
         simultaneously with giving such instructions advise the Pool Funds
         Administrator in writing of the amount of the excess payment providing
         a description of what the Pool Member or the Grid Operator considers
         the excess payment relates to.

19.5     Payment to Pool Creditors: The Pool Funds Administrator shall, prior to
         14.30 hours on each day, calculate the amounts available for
         distribution to Pool Creditors on that day. As soon as practicable and
         not later than 14.30 hours on that day the Pool Funds Administrator
         shall give irrevocable instructions to the Pool Banker to remit from
         the Pool Clearing Account to the relevant Settlement Accounts
         maintained by the Pool Creditors the aggregate of amounts determined by
         the Pool Funds Administrator to be available for payment to Pool
         Creditors and, if required, to transfer amounts from the Pool Reserve
         Account or the Pool Borrowing Account to the Pool Clearing Account or
         vice versa.

19.6     Making good the Pool Reserve Account: If the Pool Reserve Account is
         debited or credited in or towards clearing the Pool Clearing Account,
         the Pool Funds Administrator shall as soon as possible thereafter take
         the necessary steps, including making any calculations or taking any
         action in accordance with Section 21, to reverse the debit or credit to
         the Pool Reserve Account and/or to make a call under a Letter of
         Credit.

19.7     Prohibition on transfers: The Pool Funds Administrator shall not at 
         any time instruct the Pool Banker to transfer any sum from a Pool
         Account to another account (not being a Pool Account) unless that 
         account is a Settlement Account.

19.8     Application of payments: Where payments in respect of more than one
         Settlement Day are required to be settled on a Payment Date, payments
         in respect of the longest outstanding Settlement Day shall be, and be
         deemed to be, settled first.

19.9     Bank contacts: Upon written request of the Pool Funds Administrator
         each Pool Member, the Ancillary Services Provider and the Grid Operator
         shall provide the Pool Funds Administrator in writing with the name of,
         and communication details for, one or more individuals at the branch of
         its Settlement Bank from which payments or payment instructions
         required to be made or given by it pursuant to this Schedule originate
         (the "Local Branch") who is (are) familiar with the payment procedures
         set out in this Section 19 applicable to such Pool Member, the
         Ancillary Services Provider or (as the case may be) the Grid Operator,
         and shall promptly advise the Pool Funds Administrator in writing of
         any change of any such individual or his communication details. Each
         Pool Member, the Ancillary Services Provider and the Grid Operator
         hereby authorises the Pool Funds Administrator to contact any such
         individual to enquire in respect of any Payment Date whether and in
         respect of what amount instructions have been given for the remittance
         of any payment required to be made by such Pool Member, the Ancillary
         Services Provider or (as the case may be) the Grid Operator under this
         Schedule and/or whether such payment has been remitted or otherwise
         made as provided for in this Schedule, and undertakes not to withdraw,
         qualify or revoke such authority at any time. Each Pool Member, the
         Ancillary Services Provider and the Grid Operator shall instruct its
         Local Branch to co-operate with the Pool Funds Administrator
         accordingly and to provide the Pool Funds Administrator with all such
         information as is necessary to answer such enquiries. The Pool Funds
         Administrator shall comply with all reasonable security arrangements
         imposed by the relevant Pool Member, the Ancillary Services Provider or
         the Grid Operator or any Local Branch.

20.      ALTERNATIVE PAYMENT PROCEDURE

20.1     Alternative Payment procedure: Without prejudice to other obligations
         in the Agreement not substituted by the provisions of this Section 20,
         the provisions set out in this Section 20 shall apply:-

         20.1.1     if, on the Effective Date, it has not been possible to
                    establish the Notified Payments System (in which case they
                    shall continue to apply until the Notified Payments System
                    is established, or until such other time as the Executive
                    Committee may determine); or

         20.1.2     if, for any reason, it is not possible to apply the
                    procedures contemplated by the Notified Payments System and
                    for so long as it is not possible to apply such procedures.

20.2     Pool Debtor to effect remittance: Each Pool Debtor shall, in respect of
         each Payment Date on which it is under an obligation to make a payment
         under the Agreement, give instructions to its bank, which it undertakes
         not to qualify, withdraw or revoke, to effect remittance to the Pool
         Clearing Account of the amount payable by that Pool Debtor to be
         received on that Payment Date.

20.3     Receipt of remittance: Any remittance must be received by the Pool
         Banker in the Pool Clearing Account no later than 12.30 hours on the
         Payment Date unless arrangements have been made between the Pool Banker
         and the relevant Pool Member or the Grid Operator (as the case may be)
         which shall be notified to the Pool Funds Administrator and which are
         satisfactory to the Pool Banker such that funds will be received for
         value on that Payment Date. The Pool Members and the Grid Operator
         shall ensure that instructions are given to their banks in sufficient
         time to ensure that their respective banks comply with this time limit.

20.4     Method of remittance: The Parties acknowledge and agree that when
         practicable to give effect to sub-section 20.3 a Pool Debtor shall
         cause remittances to be effected through CHAPS but, where not
         practicable or where the amount payable is less than the minimum
         individual amount then processed through CHAPS, the Pool Member and the
         Grid Operator shall ensure by whatever means at their disposal that
         remittance for value on the relevant Payment Date is made for credit to
         the Pool Clearing Account not later than 12.30 hours.

20.5     Notification of non-payment: The Parties acknowledge and agree that if
         a Pool Debtor becomes aware that a payment for which it is responsible
         will not be remitted to the Pool Banker by 12.30 hours on the relevant
         day, and where satisfactory arrangements, as referred to in sub-section
         20.3 have not been made, it shall immediately notify the Pool Funds
         Administrator, giving all details available to that Pool Debtor.

20.6     Payment default: If the Pool Funds Administrator determines at any time
         after 12.30 hours on any day that a remittance which should have been
         credited on that day to the Pool Clearing Account has not been made (or
         that the credit has not been received) (in whole or in part) and where
         satisfactory arrangements, as referred to in sub-section 20.3, have not
         been made, the provisions of Section 21 shall apply mutatis mutandis.

20.7     Late payment: If, after the Pool Funds Administrator has either debited
         the Pool Reserve Account or made a call under a Letter of Credit, the
         Pool Banker receives the remittance which had not been credited to the
         Pool Clearing Account by 12.30 hours, then such remittance shall be
         credited to the Pool Reserve Account.

20.8     Payments to Pool Creditors: The Pool Funds Administrator shall, prior
         to 14.30 hours on each day, calculate the amounts available for
         distribution to Pool Creditors on that day (including amounts resulting
         from the application of sub-section 20.6). Not later than 14.30 hours
         on that day the Pool Funds Administrator shall give instructions to the
         Pool Banker, which it undertakes not to qualify, withdraw or revoke, to
         make same day value remittances to the Pool Creditors.

20.9     Construction: Where the provisions of this Section 20 apply references
         in Sections 5 and 18 and sub-section 21.1 to "Settlement Bank" and 
         "Collection Account" shall be construed as references to "bank" and 
         "Pool Clearing Account" respectively.

21.      PAYMENT DEFAULT

21.1     Payment default: Subject as provided by sub-section 21.12, if, by 12.30
         hours on a Payment Date, the Pool Funds Administrator has been notified
         by a Settlement Bank or it otherwise has reason to believe that a
         Settlement Bank will not remit to the Pool Clearing Account all or any
         part (the "amount in default") of any amount which has been notified
         by the Pool Funds Administrator as being payable by a Pool Debtor (the
         "non-paying Pool Debtor") on the relevant Payment Date in sufficient
         time to ensure that such amount can be cleared through the Pool
         Clearing Account not later than the close of banking business on such
         Payment Date, the Pool Funds Administrator shall act in accordance
         with the following provisions (or whichever of them shall apply) in
         the order in which they appear until the Pool Funds Administrator is
         satisfied that the Pool Clearing Account will clear not later than the
         close of business on the relevant Payment Date:-

         21.1.1     if the Pool Funds Administrator has been able to identify
                    the non-paying Pool Debtor in sufficient time to apply this
                    paragraph 21.1.1 and to the extent that the non-paying Pool
                    Debtor is entitled to receive payment from any Pool Debtor
                    pursuant to this Schedule on the relevant Payment Date, then
                    the Pool Funds Administrator shall (unless it reasonably
                    believes that such set-off shall be unlawful) set off the
                    amount of such entitlement against the amount in default;

         21.1.2     if the Pool Funds Administrator has been able to identify
                    the non-paying Pool Debtor in sufficient time to apply this
                    paragraph 21.1.2, the Pool Funds Administrator shall debit
                    the Pool Reserve Account and credit the Pool Clearing
                    Account with a sum not exceeding the amount of funds
                    standing to the credit of the non-paying Pool Debtor in the
                    Pool Reserve Account;

        21.1.3 subject to sub-section 21.2, the Pool Funds Administrator shall
               debit the Pool  Reserve  Account  and  credit  the Pool  Clearing
               Account  with a sum  not  exceeding  the  amount  of  funds  then
               standing to the credit of the Pool Reserve  Account to the extent
               that they represent  Security  Cover provided in accordance  with
               paragraph  15.1.2,   the  transfer  of  such  amount  as  is  not
               attributable   to  the  funds  standing  to  the  credit  of  the
               non-paying  Pool Debtor  being deemed to give rise to a series of
               loans to the non-paying Pool Debtor by each Providing  Member and
               the Grid  Operator  rateably  according to its share of the funds
               standing to the credit of the Pool Reserve  Account to the extent
               that they represent  Security  Cover provided in accordance  with
               paragraph  15.1.2, at the time immediately prior to the transfer,
               such loans to be repayable on demand and to carry interest at the
               Reserve  Interest  Rate and in any case  repayable not later than
               two  Business  Days after they arise after  which,  to the extent
               that any such loans  remain  outstanding,  such loans shall carry
               interest at the Default  Interest Rate (which  interest  shall be
               credited to the Pool  Ledger  Account of the  relevant  Providing
               Member and (where applicable) the Grid Operator).  Each Providing
               Member and the Grid Operator  hereby  irrevocably  authorises the
               Pool Funds  Administrator  to  advance,  collect  in and  enforce
               payment of such loans for its  account and on its behalf and each
               Pool Member and the Grid Operator hereby irrevocably  consents to
               the making of such loans to the extent  that such Pool  Member or
               (as the case may be) the  Grid  Operator  has a share in the Pool
               Reserve Account;

         21.1.4     if the Pool Funds Administrator has been able to identify
                    the non-paying Pool Debtor in sufficient time to apply this
                    paragraph 21.1.4 and provided that the Pool Funds
                    Administrator is satisfied that the proceeds of a call under
                    the Letter of Credit will be paid into the Pool Clearing
                    Account in sufficient time to ensure that it will clear not
                    later than the close of business on the relevant Payment
                    Date, the Pool Funds Administrator shall make a call under
                    the Letter of Credit supplied by the non-paying Pool Debtor
                    in a sum not exceeding the available amount of such Letter
                    of Credit, and the Pool Funds Administrator shall cause the
                    proceeds of such call to be paid into the Pool Clearing
                    Account;

          21.1.5 subject to  sub-section  21.2 and provided that the Pool Funds
               Administrator  is  satisfied that the proceeds of a call under a
               Letter of Credit will be paid into the Pool Clearing  Account in
               sufficient  time to ensure that it will clear not later than the
               close of business on the relevant Payment  Date,  the Pool Funds
               Administrator  shall  make a call under one or more  Letters  of
               Credit supplied by Pool Members or the Grid Operator (other than
               the  non-paying  Pool  Debtor) in a total sum not exceeding  the
               total  available  amount  of all such  Letters  of Credit to the
               extent that such amount  represents  Security  Cover provided in
               accordance   with   paragraph   15.1.2,  and  the  Pool   Funds
               Administrator shall cause the  proceeds of such call or calls to
               be paid into the Pool Clearing  Account.  The  transfer  of such
               proceeds into the Pool  Clearing Account shall be deemed to give
               rise to a series of loans to the non-paying  Pool Debtor by each
               Providing Member or the Grid Operator whose Letter of Credit was
               called  rateably  according to the  amounts called  under their
               respective Letter of Credit, such loans to be repayable on demand
               and to carry  interest  at the Reserve  Interest Rate and in any
               case  repayable not later than two Business Days after they arise
               after   which,   to  the  extent that  any  such  loans   remain
               outstanding,  such loans  shall carry  interest  at the  Default
               Interest  Rate  (which interest shall be  credited  to the Pool
               Ledger  Account  of the relevant Providing  Member  and  (where
               applicable) the Grid  Operator).  Each Providing  Member and the
               Grid  Operator hereby irrevocably  authorises  the  Pool  Funds
               Administrator to advance, collect in and enforce payment of such
               loans for its account and on its behalf and each Pool Member and
               the Grid Operator hereby irrevocably consents to the making of
               such  loans to the extent that such Pool  Member or (as the case
               may  be)  the  Grid  Operator  has a share  in the  Pool Reserve
               Account; and

         21.1.6     if and to the extent that, notwithstanding application of
                    the foregoing measures, it is not possible to clear the Pool
                    Clearing Account by any of the foregoing means, the Pool
                    Funds Administrator shall reduce payments to all Pool
                    Creditors in proportion to the amounts payable to them on
                    the relevant Payment Date by an aggregate amount equal to
                    the amount necessary to clear the Pool Clearing Account and
                    shall account for such reduction in the Pool Ledger Accounts
                    as amounts due and owing by the non-paying Pool Debtor to
                    each Pool Creditor whose payments were reduced.

21.2     Amount in default likely to be remedied: The Pool Funds Administrator
         shall not apply paragraph 21.1.3 or 21.1.5 unless it considers in good
         faith that the amount in default is likely to be remedied by the
         non-paying Pool Debtor no later than the next Business Day and in such
         a case the Pool Funds Administrator shall only apply paragraphs 21.1.2
         and 21.1.4 to the extent of any amounts provided by way of Security
         Cover pursuant to paragraph 15.1.2.

21.3     Loans part of Pool Reserve Assets: Any loans arising pursuant to
         paragraph 21.1.3 or 21.1.5 shall be deemed to constitute part of the
         Pool Reserve Assets and all repayments of such loans, together with
         interest thereon, shall be paid into the Pool Reserve Account for the
         account of each Providing Member or the Grid Operator who is deemed to
         have made such loan.

21.4     Repayment of loans: If any loans to a non-paying Pool Debtor arising
         pursuant to paragraph 21.1.3 or 21.1.5 shall not have been repaid in
         full (together with interest at the rate or rates specified therein) by
         12.00 hours on the next Business Day after such loan is deemed to have
         arisen, the Pool Funds Administrator shall make a call under the Letter
         of Credit (if any) which shall have been supplied by the non-paying
         Pool Debtor and which remains outstanding in an amount not exceeding
         the amount necessary to repay such loans and all accrued interest in
         full and, if the proceeds of any Letter of Credit are insufficient to
         repay all outstanding loans to the relevant non-paying Pool Debtor,
         such proceeds shall be applied towards repayment of each such
         outstanding loan rateably.

21.5     Reduction of payments to Pool Creditors: If, after the date that any
         loans to a non-paying Pool Debtor arise pursuant to paragraph 21.1.3 or
         21.1.5, the Pool Funds Administrator shall reasonably be of the opinion
         that the non-paying Pool Debtor will not repay forthwith all of such
         loans and all accrued interest in full or the loans have not been
         repaid with all interest within two Business Days after they arose
         (whichever occurs first), the Pool Funds Administrator shall reduce
         payments to all Pool Creditors in proportion to the amounts payable to
         them on the Payment Date to which the default relates and any
         succeeding Payment Dates as may be required by an aggregate amount
         necessary to restore the balance in the Pool Reserve Account to the sum
         for the time being required under this Schedule to be deposited by the
         Pool Members and the Grid Operator other than the non-paying Pool
         Debtor, to the intent that all loans arising under paragraphs 21.1.3
         and 21.1.5 and remaining undischarged after application of the
         non-paying Pool Debtor's Letter of Credit are discharged in full
         together with interest thereon at the Reserve Interest Rate.

          21.6 Obligation  to  make  calls:  If and  whenever  the  Pool  Funds
               Administrator has not applied the provisions of paragraph 21.1.4,
               and has reduced  payments to Pool  Creditors in accordance  with
               paragraph  21.1.6, it shall, on the relevant Payment Date or so
               soon thereafter as the non-paying Pool Debtor has been identified
               (but,  in any event, not later than the close of business on the
               Business Day  following such Payment Date) make a call under the
               Letter of Credit  supplied by the non-paying Pool Debtor in a sum
               sufficient to cover the  reduction  made under paragraph  21.1.6
               (but not exceeding  the  available  amount of all such Letters of
               Credit) and the Pool Funds Administrator shall cause the proceeds
               of such call to be paid forthwith into the Pool Reserve  Account.
               On the next Business Day following receipt of such proceeds, the
               Pool  Funds  Administrator shall pay such  amounts  as have been
               credited to the Pool Reserve Account to the Pool Creditors whose
               payments  were  reduced  in  full  or (as  the  case may  be) in
               proportion to their respective entitlements including interest on
               such amounts at the Reserve Interest Rate.

          21.7 Indemnification  by non-paying  Pool Debtor:  The non-paying Pool
               Debtor shall indemnify and keep indemnified each Pool Member and
               the  Grid  Operator  whose  Letter  of  Credit is  called  under
               paragraph  21.1.5  and/or who is deemed to have made loans under
               paragraph 21.1.3 or 21.1.5 on demand against all costs, expenses
               and losses  (including the costs of management time) suffered or
               incurred  by such  Pool  Member or (as the case may be) the Grid
               Operator  arising  from its  Letter  of  Credit  being so called
               (including the costs of reinstating the same) or such loans being
               deemed to have been made to the extent  that such Pool Member or
               (as the case may be) the Grid Operator is not compensated  under
               this  Section  21.  This indemnity  shall be in addition to and
               without prejudice to the liability of the non-paying Pool Debtor
               to repay the loan,  together with accrued interest, which arises
               pursuant to paragraph 21.1.5.  The Pool Creditors, in proportion
               to the  amounts  payable to them on the  Payment Date to which a
               default relates in respect of which the Pool Funds Administrator
               has operated  sub-section 21.5, and any succeeding Payment Dates
               as may be required,  shall  indemnify and keep indemnified  each
               Pool Member as is referred to in the earlier  provisions of this
               sub-section  21.7  and the Grid  Operator  to the  extent of any
               failure by the non-paying  Pool Debtor to fulfil its  obligations
               under this sub-section 21.7.

21.8     Notification to Pool Creditors: The Pool Funds Administrator shall use
         all reasonable endeavours promptly to notify the relevant Pool
         Creditors whenever it makes any such reduction as is referred to in
         paragraph 21.1.6.

21.9     Default Interest: Save as otherwise provided in the Agreement
         (including where an express rate of interest is provided), if any
         amount payable by any Pool Debtor pursuant to this Schedule is not
         given value for the due date by close of banking business on the due
         date the Pool Debtor shall on written demand by the Pool Funds
         Administrator pay to the Pool Funds Administrator, for the account of
         the person or persons entitled to receive the amount in default,
         interest on such amount from the due date up to the day of actual
         receipt by the Pool Funds Administrator (after as well as before
         judgment) at the Default Interest Rate.

21.10    Application of payments: Any amount received by the Pool Funds
         Administrator from a non-paying Pool Debtor for the credit of any Pool
         Account shall be applied by the Pool Funds Administrator in or towards
         payment of amounts payable by the non-paying Pool Debtor to Pool
         Creditors on each successive Payment Date in respect of which there is
         an outstanding default (with the longest outstanding default being
         settled first).

21.11    Clearing of Pool Clearing Account: All amounts standing to the credit
         of the Pool Clearing Account at the close of business on any Payment
         Date shall be transferred to the Pool Reserve Account so that the
         balance in the Pool Clearing Account shall at the end of such day be
         nil.

21.12    Credit Facility: If and for so long as the Credit Facility remains
         unconditionally available, the provisions of this Section 21 shall
         apply  with the modifications provided by Section 25.

22.      CONFIRMATION NOTICES

22.1     Despatch of Confirmation Notices: Within two Business Days after each
         Payment Date the Pool Funds Administrator shall issue a Confirmation
         Notice to each Pool Member, the Ancillary Services Provider and the
         Grid Operator in respect of the corresponding Payment Date setting out
         the information required in sub-sections 22.2, 22.3 and 22.4.

22.2 Information  -  taking  of  electricity:  The  information required on  a
     Confirmation  Notice in respect of each Pool Member taking electricity on
     each Settlement Day is as follows:-

         22.2.1    the Pool Member's identification number;

         22.2.2    the Pool Member's name;

         22.2.3     the total amount (inclusive of United Kingdom Value Added
                    Tax) received in the Pool Clearing Account on the relevant
                    Payment Date by the Pool Funds Administrator in respect of
                    electricity taken by such Pool Member during the Settlement
                    Day and Ancillary Services attributable thereto;

         22.2.4     the amount received in the Pool Clearing Account on the
                    relevant Payment Date by the Pool Funds Administrator in
                    respect of electricity taken by such Pool Member during the
                    Settlement Day and Ancillary Services attributable thereto,
                    exclusive of United Kingdom Value Added Tax; and

         22.2.5     the amount of United Kingdom Value Added Tax received in the
                    Pool Clearing Account on the Payment Day by the Pool Funds
                    Administrator in respect of electricity taken by such Pool
                    Member during the Settlement Day and Ancillary Services
                    attributable thereto.

22.3 Information  - supplies  of  electricity:  The information  required  on a
     Confirmation Notice in respect of each Pool Member supplying electricity on
     each Settlement Day shall include:-

         22.3.1    the Pool Member's identification number;

         22.3.2    the Pool Member's name;

         22.3.3    the Settlement Run identification number;

         22.3.4     the total amount (inclusive of United Kingdom Value Added
                    Tax) paid out of the Pool Clearing Account on the relevant
                    Payment Date by the Pool Funds Administrator in respect of
                    electricity supplied by such Pool Member during the
                    Settlement Day;

         22.3.5     the amount paid out and the date on which such amount is
                    paid out of the Pool Clearing Account on the relevant
                    Payment Date by the Pool Funds Administrator in respect of
                    electricity supplied by such Pool Member during the
                    Settlement Day exclusive of United Kingdom Value Added Tax
                    and the Settlement Run identification number; and

         22.3.6     the amount of United Kingdom Value Added Tax paid out of the
                    Pool Clearing Account on the relevant Payment Date by the
                    Pool Funds Administrator in respect of electricity supplied
                    by such Pool Member during the Settlement Day.

22.4 Information  -  Ancillary   Services   Provider  and  Grid  Operator:  The
     information  required on a Confirmation Notice in respect of the Ancillary
     Services Provider and the Grid Operator is as follows:-

         22.4.1     the total amount receivable by the Ancillary Services
                    Provider for the provision of Ancillary Services and the
                    total amount payable by the Grid Operator in relation to
                    Transport Uplift (in each case exclusive of United Kingdom
                    Value Added Tax) during the Settlement Day;

         22.4.2     the total amount receivable by the Ancillary Services
                    Provider for the provision of Ancillary Services and the
                    total amount payable by the Grid Operator in relation to
                    Transport Uplift (in each case inclusive of United Kingdom
                    Value Added Tax) during the Settlement Day; and

         22.4.3     the total amount of United Kingdom Value Added Tax
                    receivable by the Ancillary Services Provider for the
                    provision of Ancillary Services and the total amount payable
                    by the Grid Operator in relation to Transport Uplift during
                    the Settlement Day.

22.5     Interest: Where interest has been paid to any Pool Member, the
         Ancillary Services Provider or the Grid Operator, the Pool Funds
         Administrator shall promptly after such payment provide to each Pool
         Member, the Ancillary Services Provider or the Grid Operator (as the
         case may be) a statement showing the amount of interest paid or
         received, the rate of interest applicable thereto and the amount (if
         any) of tax withheld. If applicable, the Pool Funds Administrator shall
         provide to the relevant Pool Member, the Ancillary Services Provider or
         the Grid Operator an appropriate tax deduction certificate in respect
         of any withholding tax.

23.      PAYMENT ERRORS

23.1     Overpayments: If for any reason whatsoever (including the negligence of
         the Pool Banker or the Pool Funds Administrator) a Pool Creditor
         receives on any Payment Date a payment in excess of the amount
         disclosed in the Pool Ledger Account as calculated as being payable to
         it (an "overpayment") (including but not limited to the proceeds of any
         loan made or deemed to be made in accordance with Section 21 or Section
         25 to any non-paying Pool Debtor which becomes insolvent before such
         advance is repaid) the provisions of sub-section 5.15 apply, and the
         Pool Creditor shall forthwith notify the Pool Funds Administrator of
         the amount of the overpayment and shall forthwith pay the overpayment
         into a Pool Account specified by the Pool Funds Administrator.

23.2     Repayment of overpayment (1): If prior to a Pool Creditor notifying the
         Pool Funds Administrator of the overpayment, the Pool Funds
         Administrator receives notice (from the Pool Banker or otherwise) of
         the overpayment, the Pool Funds Administrator shall forthwith require
         (by written notice) that the recipient of the overpayment pay the
         overpayment to a Pool Account specified by the Pool Funds Administrator
         and any Pool Creditor who receives such notice shall forthwith pay the
         amount to an account specified by the Pool Funds Administrator. If the
         overpayment is repaid within two Business Days of receiving the notice,
         the overpayment (or any part not paid) shall bear interest at the
         Reserve Interest Rate or at such rate as shall be set from time to time
         by the Executive Committee from the date the overpayment was received
         up to the date that value is given in a Pool Account by the Pool Funds
         Administrator (after as well as before judgment). Any overpayment (or
         part thereof) not repaid within two Business Days after demand therefor
         in accordance with this Section 23 shall bear interest at the Default
         Interest Rate from the expiry of that period and shall be recoverable
         in accordance with Section 24. The Pool Funds Administrator shall
         account to those entitled to payment by reason of an overpayment.

23.3     Repayment of overpayment (2): Upon receipt of the overpayment
         (including any interest) the Pool Funds Administrator shall (forthwith
         upon entitlement to it being ascertained) pay the amount received to
         the Pool Member, the Ancillary Services Provider or the Grid Operator
         who should have received the payment on the Payment Date.

23.4     Underpayments: If for any reason whatsoever (including the negligence
         of the Pool Banker or the Pool Funds Administrator) a Pool Creditor
         does not receive on the relevant Payment Date the full amount disclosed
         as owing to it pursuant to the Pool Ledger Account (an "underpayment")
         that Pool Creditor shall forthwith notify the Pool Funds Administrator
         of the amount of the underpayment, and the Pool Funds Administrator
         after consultation with the Pool Banker shall use all reasonable
         endeavours to identify such person as shall have received any
         corresponding overpayment and promptly to correct the underpayment. If,
         by reason of negligence, the Pool Funds Administrator holds or has
         under its control amounts which it ought properly to have paid to Pool
         Members, the Ancillary Services Provider or the Grid Operator, such
         Pool Members, the Ancillary Services Provider or the Grid Operator
         shall be entitled to interest on such amounts at the Default Interest
         Rate and for such period as the Pool Funds Administrator improperly
         holds or has such amounts under its control.

24.      ENFORCEMENT OF CLAIMS

24.1     Notification of amount in default: Without prejudice to the provisions
         of Section 21, if a Pool Member or the Grid Operator shall fail to pay
         any amount payable pursuant to this Schedule on the due date, the Pool
         Funds Administrator shall notify the Director, the Executive Committee
         and each Pool Creditor to whom the amount in default is owed pursuant
         to this Agreement of the name of the non-paying Pool Debtor, the
         aggregate amount in default and the amount owed to each Pool Creditor.

24.2     Duties of Pool Funds Administrator: Except as otherwise expressly
         provided in this Schedule, the Pool Funds Administrator shall not be
         required to ascertain or enquire as to the performance or observance by
         any Pool Member, the Ancillary Services Provider or the Grid Operator
         of its obligations under the Agreement and shall have no duty to inform
         the Executive Committee or any Pool Member, the Ancillary Services
         Provider or the Grid Operator of any default, other than a failure to
         pay as may come to its attention.

24.3     Notice before action: Each Pool Creditor shall give notice to the Pool
         Funds Administrator before instituting any action or proceedings in any
         court to enforce payments due to it pursuant to this Schedule. Upon
         receipt of any notice under this sub-section 24.3, the Pool Funds
         Administrator will as soon as practicable notify the Executive
         Committee, all Pool Members, the Settlement System Administrator, the
         Ancillary Services Provider, the Grid Operator and the Director.

24.4     Proceedings to Recover Overdue Amounts: Without prejudice to the right
         of any Pool Member or the Grid Operator to bring such proceedings as it
         sees fit in connection with matters related to the Agreement, the Pool
         Funds Administrator shall, if instructed to do so by the Executive
         Committee, bring proceedings against a Pool Member or the Grid Operator
         (on behalf of those Pool Members and/or (as the case may be) the Grid
         Operator who have (has) indicated their (its) willingness to the
         Executive Committee for the Pool Funds Administrator first so to act)
         for the recovery of any amounts due by that Pool Member or (as the case
         may be) the Grid Operator pursuant to this Schedule so long as the Pool
         Funds Administrator has first reached agreement with the Executive
         Committee, those Pool Members and/or (as the case may be) the Grid
         Operator as to appropriate remuneration, is indemnified to its
         reasonable satisfaction or, if it so requires, provided that it shall
         have received such security as it may reasonably request against all
         costs, claims, expenses (including legal fees) and liabilities which it
         will or may sustain or incur in complying with such instructions. Save
         as provided in the foregoing provisions of this sub-section 24.4, the
         Pool Funds Administrator shall not be obliged to bring any such
         proceedings.

25.      CREDIT FACILITY: PAYMENT DEFAULTS

25.1     Purpose of Credit Facility: It is acknowledged that the Credit Facility
         provides an alternative to the Security Cover referred to in paragraph
         15.1.2 and the Pool Funds Administrator will use the Credit Facility to
         cover banking error and payment error and to minimise reductions of
         payments to Pool Creditors unless it considers in good faith that an
         amount in default is not likely to be remedied by the non-paying Pool
         Debtor no later than the next Business Day.

25.2     Modification of other provisions of this Schedule: If and so long as
         the Credit Facility is unconditionally available to the Pool Funds
         Administrator (whether or not there remains any amount undrawn),
         paragraphs 15.1.2, 21.1.3 and 21.1.5 shall be of no effect and the
         remaining provisions of this Schedule shall be implemented on the basis
         that the following sub-sections apply.

25.3 Payment default:  The Pool Funds  Administrator  shall  operate the Credit
     Facility on the following basis:-

         25.3.1     the Credit Facility may be drawn down by the Pool Funds
                    Administrator if, by 12.30 hours on any Payment Date, there
                    is an amount in default unless the Pool Funds Administrator
                    considers in good faith that the amount in default is not
                    likely to be remedied by the non-paying Pool Debtor no later
                    than the next Business Day;

         25.3.2     if paragraph 25.3.1 applies such that the Credit Facility
                    may be drawn down, the Pool Funds Administrator will first
                    act in accordance with paragraph 21.1.1, will then draw on
                    the Credit Facility for an amount not exceeding the
                    available amount under the Credit Facility (after allowing
                    for any repayment to be made to the Facility Bank under
                    sub-section 25.6) and, if it is not possible to clear the
                    Pool Clearing Account by either or both of those means, it
                    will then act in accordance with paragraph 21.1.6; and

         25.3.3     if paragraph 25.3.1 does not apply, then the Pool Funds
                    Administrator will act in accordance first with paragraph
                    21.1.1, then with paragraph 21.1.2, then with paragraph
                    21.1.4 and only then with paragraph 21.1.6.

25.4 Amounts in default:  Each  non-paying Pool Debtor will be  responsible  in
     relation  to any  amount  in  default in  accordance  with  the  following
     paragraphs:-

         25.4.1     each non-paying Pool Debtor will be responsible for the
                    repayment of all amounts of principal drawn down under the
                    Credit Facility in respect of any amount in default relating
                    to that Pool Debtor as if the Pool Funds Administrator had
                    made a loan to such Pool Debtor of the relevant amount and
                    the amounts so payable are to be paid to, or otherwise made
                    available for credit to, the Pool Clearing Account as soon
                    as possible, but in any event no later than two Business
                    Days after the relevant Payment Date;

         25.4.2     each non-paying Pool Debtor will be responsible also for
                    interest (determined in accordance with paragraph 25.4.4) on
                    all amounts of principal drawn down under the Credit
                    Facility in respect of any amount in default relating to
                    that Pool Debtor as if the Pool Funds Administrator had made
                    a loan to such Pool Debtor of the relevant amount and the
                    amount so payable by way of interest is to be paid to, or
                    otherwise made available for credit to, the Pool Clearing
                    Account by no later than the day notified by the Pool Funds
                    Administrator to such Pool Debtor for payment thereof (being
                    the date which is 2 Business Days prior to the date on which
                    interest is payable under the Credit Facility by the Pool
                    Funds Administrator to the Facility Bank for the month in
                    which the principal amount in question was outstanding);

         25.4.3     each non-paying Pool Debtor will further be responsible for
                    its proportionate share (determined in accordance with
                    paragraph 25.4.5) of any additional sum payable to the
                    Facility Bank pursuant to the terms of the Credit Facility
                    as if the Pool Funds Administrator had made a loan to such
                    Pool Debtor of the relevant amount and the amount so payable
                    is to be paid to, or otherwise made available for credit to,
                    the Pool Clearing Account forthwith on notification thereof
                    by the Pool Funds Administrator to the Pool Debtor in
                    question;

         25.4.4     for the purposes of paragraph 25.4.2, interest is to be
                    calculated using the effective daily rate of interest
                    reasonably determined by the Pool Funds Administrator on the
                    basis of the aggregate interest (including any compound
                    interest) payable under the Credit Facility in relation to
                    any particular day; and

         25.4.5     for the purposes of paragraph 25.4.3, the proportionate
                    share for a particular non-paying Pool Debtor is the amount
                    (if any) which the Pool Funds Administrator reasonably
                    determines (after consultation with the Facility Bank) as
                    being the amount of any additional sum payable in accordance
                    with the terms of the Credit Facility attributable to
                    drawings under the Credit Facility made in respect of that
                    Pool Debtor.

25.5 Application of payments: On the Relevant Date the Pool Funds Administrator
     shall,  if the amount in  question has not been  received in full from the
     non-paying Pool Debtor:-

         25.5.1     first debit the Pool Reserve Account and credit the Pool
                    Clearing Account with a sum not exceeding the amount of
                    funds (if any) standing to the credit of the non-paying Pool
                    Debtor in the Pool Reserve Account;

         25.5.2     if that sum is insufficient to repay in full the amount in
                    question, the Pool Funds Administrator shall call the Letter
                    of Credit (if any) provided by the non-paying Pool Debtor
                    (for an amount not exceeding the available amount) and pay
                    or cause the proceeds thereof to be paid into the Pool
                    Clearing Account; and

         25.5.3     if the amount credited to the Pool Clearing Account after
                    following the foregoing procedure is insufficient, reduce
                    payments to all Pool Creditors in proportion to the amounts
                    payable to them on the Payment Date to which the default
                    relates,

         so that, in any case, the Pool Funds Administrator has available to it
         on the Pool Clearing Account sufficient funds to comply with paragraph
         25.6. For the purposes of this paragraph, the "Relevant Date" is
         whichever of the following is applicable:-

         (a)        in relation to any principal amount for which a non-paying
                    Pool Debtor is responsible under paragraph 25.4.1, the last
                    date specified for payment under paragraph 25.4.1;

         (b)        in relation to any principal amount as referred to in
                    sub-paragraph (a), the first date (if earlier than the date
                    referred to in sub-paragraph (a)) on which the Pool Funds
                    Administrator is reasonably of the opinion that the
                    non-paying Pool Debtor will not repay forthwith all of the
                    amounts of principal in question;

         (c) in relation to payment of interest under paragraph 25.4.2, the last
date for payment thereof; and

         (d) in relation to an additional amount under paragraph 25.4.3 the last
date for payment of this amount.

25.6     Payments to Facility Bank: To the extent of any payment by the
         non-paying Pool Debtor and/or if any of the circumstances described in
         sub-section 25.5 occur, the Pool Funds Administrator will forthwith
         repay to the Facility Bank by credit to the Pool Borrowing Account, if
         applicable, an amount equal, in the former case, to the amount so paid
         and, in the latter case, to the amount which should have been paid by
         the non-paying Pool Debtor.

25.7     Reduction in payments to Pool Creditors: A reduction in payments as
         contemplated by paragraph 25.5.3 will also apply in the event of any
         amounts drawn down under the Credit Facility being required to be
         repaid in accordance with the terms of the Credit Facility and the Pool
         Funds Administrator shall account for such reduction in the Pool Ledger
         Accounts as amounts due and owing by the non-paying Pool Debtor to each
         Pool Creditor whose payments were reduced.

25.8 Enforcement of Claims and other provisions: Sub-sections 21.7, 21.8, 21.9,
     21.10 and Section 24 shall have  effect in  relation to amounts due from a
     non-paying Pool Debtor which arise under the foregoing sub-sections.

25.9     Unavailability of Credit Facility: If at any time the Credit Facility
         ceases to be unconditionally available and paragraph 15.1.2 shall
         thereupon have become effective, the whole or any part of the Security
         Cover thereby required to be provided by each Providing Member or the
         Grid Operator may be provided by a credit to the Pool Reserve Account,
         unless otherwise determined by the Executive Committee. The Executive
         Committee shall from time to time assess (in consultation with the Pool
         Funds Administrator) and determine the amount of Security Cover which
         would be required pursuant to paragraph 15.1.2 as if that paragraph
         were in effect and such assessment and determination shall apply for
         the purposes of paragraph 16.2.2 if paragraph 15.1.2 becomes
         applicable, pending any revised assessment by the Executive Committee.

25.10    Interpretation:  Terms and expressions  used in this Section 25 shall,
         unless the context otherwise  requires,  have the same meanings as are
         given to them for the purposes of Clause 21.

26.      CREDIT FACILITY: GENERAL

26.1     Notifications to the Executive Committee: The Pool Funds Administrator
         shall notify the Executive Committee forthwith:-

         26.1.1     on it becoming aware of any circumstances which might lead
                    to an event under the Credit Facility as a result of which
                    the Credit Facility might cease to be available; and

         26.1.2 upon  receipt  of a  written  demand from  the  Facility  Bank
               pursuant to the terms of the Credit Facility as a result of which
               the Facility ceases to be available; and

         26.1.3     in the event that the Facility Bank requires any additional
                    amount to be paid under the Credit Facility by reason of any
                    increased costs to the Facility Bank or any changes in
                    circumstances.

26.2     Notifications to Providing Members and the Grid Operator: The Pool
         Funds Administrator shall notify the Providing Members and the Grid
         Operator as soon as reasonably practicable after receipt by it of a
         notice from the Facility Bank that an additional amount will or may be
         payable by the Pool Funds Administrator to the Facility Bank under the
         terms of the Credit Facility.

26.3     Amendment and Cancellation:

         26.3.1    The Pool Funds Administrator shall not:-

                    (a)   amend or supplement, or agree to any amendment or
                          supplement to, the terms of the Credit Facility
                          without the approval of the Executive Committee; or

                    (b) cancel the Credit Facility unless either the approval of
the Executive Committee has been obtained or paragraph 26.3.2 applies.

          26.3.2 The Pool Funds Administrat or shall cancel the Credit Facility
               in full at any time if a resolution  to that effect is passed (on
               a simple majority  vote) by the  Providing  Members in  separate
               general meeting and the Grid Operator
               consents or if all Providing Members and the Grid Operator have
               requested such cancellation.

26.4     Extension and Renewal: The Pool Funds Administrator shall negotiate
         with the Facility Bank an extension or renewal of the Credit Facility
         on the instructions of the Executive Committee and, in the absence of
         such instructions, shall begin negotiations with the Facility Bank no
         later than ten weeks before the Credit Facility is due to terminate in
         accordance with its terms, with a view to the extension or renewal of
         the Credit Facility on substantially the same terms for a further year
         and, in any event, to keep the Executive Committee informed on a timely
         basis of the progress of any such negotiations. The Pool Funds
         Administrator shall, however, act only with the approval and consent of
         the Executive Committee in agreeing any extension or renewal of the
         Credit Facility and the Executive Committee shall be responsible for
         deciding whether or not to renew or extend the Credit Facility and, if
         so, on what terms and for what period.

26.5     Fees not attributable to a particular Providing Member or the Grid
         Operator: Any fees (and any additional amounts payable under the terms
         of the Credit Facility which are not the responsibility of any
         particular Providing Member or the Grid Operator) charged under the
         Credit Facility to the Pool Funds Administrator shall be recharged to
         the Providing Members, in accordance with their respective Providing
         Member Contributory Shares (to be calculated on the basis of those
         current on the date on which the relevant fee (or the relevant portion
         thereof) or additional amount is payable by the Pool Funds
         Administrator under the Credit Facility and having deducted the
         relevant Credit Facility Contribution).

26.6     Fees attributable to the Grid Operator: The Grid Operator shall, from
         the date on which it first becomes a Pool Debtor and for the period
         thereafter during which the Credit Facility is in place, pay each year
         to the Pool Funds Administrator the Credit Facility Contribution on a
         date agreed from time to time by the Grid Operator and the Pool Funds
         Administrator (and, failing such agreement, on 31st January in each
         year). If the Credit Facility is available for part of a year only, the
         Credit Facility Contribution shall be adjusted accordingly on a pro
         rata basis.

26.7    No additional  charge: The Pool Funds Administrat or shall not make any
        additional charge for arranging, participating in or administering the
        Credit Facility.



<PAGE>


                                     ANNEX 1

                               Form of Advice Note

                                   ADVICE NOTE

DATE:                                 Energy Pool Funds Administration Ltd
                                      Room 157.2
                                      185 Park Street
                                      London SE1 9DY
                                      TELEPHONE: (0171) 620 9456
                                      FAX NO:        (0171) 401 2799
NAME:
ADDRESS:
                                      ADVICE NOTE:
                                      PAYMENT DATE:
FAX NO:
                            THIS IS NOT A TAX INVOICE

Advice Note issued in accordance with the Pooling and Settlement Agreement for
the Electricity Industry in England and Wales dated 30th March 1990 as amended,
varied or supplemented from time to time.


SETTLEMENT DATE   RUN/TYPE  DESCRIPTION        AMOUNT PAYABLE    AMOUNT PAYABLE
                                                      EXC VAT           INC VAT






                  DO NOT NET YOUR PAYABLES TO YOUR RECEIVABLES

A wholly owned  subsidiary of The National Grid Company plc. Regd. in England
     No. 2444187 VAT No 547 8630 11



<PAGE>


                                     ANNEX 2

                           Form of Confirmation Notice

                               CONFIRMATION NOTICE

DATE:                               Energy Pool Funds Administration Limited
                                    Room 157.2
                                    185 Park Street
                                    London SE1 9DY
TELEPHONE:
FAX NO:
TELEX:
NAME:
ADDRESS:
                                    CONFIRMATION NO:
                                    PAYMENT DATE:
FAX NO:
Confirmation notice issued in accordance with the Pooling and Settlement
Agreement for the Electricity Industry in England and Wales dated 30th March
1990 as amended, varied or supplemented from time to time.

                              THIS IS A TAX INVOICE
<TABLE>
<CAPTION>
<S>             <C>                <C>             <C>        <C>       <C>        <C>         <C>                 
PAYMENT DATE    SETTLEMENT DATE     DESCRIPTION    AMOUNT PAID EXC VAT   VAT RATE   VAT PAID    AMOUNT PAID INC
                                                                                                VAT



A wholly owned subsidiary of The National Grid Company plc.  Regd. in England No 2444187 VAT No 547 8630 11

</TABLE>


<PAGE>


                                     ANNEX 3

                                     Part 1

                     Form of Settlement Account Designation

To:      Energy Pool Funds Administration Limited
         as Pool Funds Administrator
                    and
         Barclays Bank PLC
         54 Lombard Street Branch
         as Pool Banker
                                                   Date:
                                         Settlement Account Designation

1.       [Insert name of Pool Member/Ancillary Service Provider/Grid Operator]
         hereby designates the following account as its Settlement Account to
         which you are instructed to remit all amounts which are payable to us
         through the Pool Clearing Account in accordance with Schedule 11 to the
         Pooling and Settlement Agreement for the Electricity Industry in
         England and Wales dated 30th March, 1990, as amended, varied or
         supplemented from time to time (the "Agreement").
<TABLE>
<CAPTION>
<S>                    <C>                  <C>                 <C>                   <C>

Name of Bank            Branch Address        Sorting Code        Name of Account         Account No.
------------            --------------        ------------        ---------------         -----------


2.       We hereby designate the following account as our Settlement Account 
        from which all payments due from us in accordance with Schedule 11 to
         the Agreement will be remitted.

Name of Bank            Branch Address        Sorting Code        Name of Account         Account No.
------------            --------------        ------------        ---------------         -----------

</TABLE>



Signed by ....................................................

Position .......................................................

For and on behalf of
[Name of Pool Member/Ancillary Services Provider/Grid Operator]



<PAGE>


                                     ANNEX 3

                                     Part 2

                      Form of Change of Settlement Account

To:          Energy Pool Funds Administration Limited
             as Pool Funds Administrator
                          and
             Barclays Bank PLC
             54 Lombard Street Branch
             as Pool Banker
In accordance with sub-section 4.6 of Schedule 11 to the Pooling and Settlement
Agreement [insert name] hereby gives you notice that, with effect from [insert
date] (or 10 Business Days after you receive this notice, whichever is later),
our new Settlement Account [from which payments due from the undersigned/to
which payments due to the undersigned]* will be paid shall be:-

Name of Bank      Branch Address   Sorting Code    Name of Account Account No.
------------      --------------   ------------    --------------- -----------






Yours sincerely,



[                    ]
for and on behalf of
[Name of Pool Member/Ancillary Services Provider/Grid Operator]




*Please complete as appropriate



<PAGE>


                                     ANNEX 4

                            Form of Letter of Credit

To:  Energy Pool Funds Administration Limited as Pool Funds Administrator At the
     request of  [Providing  Member] [the Grid  Operator] we have opened in your
     favour our irrevocable Letter of Credit Number ( ) for(pound)[ ] (amount in
     words).

This Letter of Credit is available against your sight drafts accompanied by a
signed statement either that the applicant has failed to pay to you the amount
you are claiming under the terms of the Pooling and Settlement Agreement for the
electricity industry in England and Wales dated 30th March, 1990 (the
"Agreement") or that the claim is being made under sub-section 15.5 or Section
21 of Schedule 11 to the Agreement. Payments under this Letter of Credit shall
be effected immediately to [insert relevant account details].

Partial drawings are allowed hereunder.

Claims under this Letter of Credit shall be made at the counters of [insert
details of the branch of the issuing bank].

This Letter of Credit expires on [ ].

We waive any right to set off against any amount payable hereunder any claims we
may have against you.

Any demand hereunder must comply with all the above requirements [and signatures
thereon must be confirmed by your Bankers].

This Letter of Credit is subject to Uniform customs and practice for Documentary
Credits (1983 Revision) International Chamber of Commerce.

We undertake that drafts and documents drawn under and in strict conformity with
the terms of this credit will be honoured upon presentation.

This Letter of Credit shall be governed by and construed in accordance with
English law.

For and on behalf of [ ] Bank [Plc].





<PAGE>


                                                       2






                                   SCHEDULE 13

                               Contributory Shares

1.   Contributory  Share:  The  Contributory  Share  of a Pool  Member  shall be
     calculated in accordance with the following provisions of this Schedule.

2.   Points: Subject as provided in Section 3, in respect of each Quarter:-

         2.1      each Pool Member which is a Generator shall receive in that
                  capacity one point (a "Point") for each MWh of Genset Metered
                  Generation of all Allocated Generating Units for all
                  Settlement Periods falling in the Votes Calculation Period
                  relative to such Quarter, as determined from the final run of
                  Settlement for each such Settlement Period; and

         2.2      each Pool Member which is a Supplier shall receive in that
                  capacity such number of points (each a "Point") as is equal to
                  the total MWh of Consumer Metered Demand taken by that Pool
                  Member in all Settlement Periods falling in the Votes
                  Calculation Period relative to such Quarter, as determined
                  from the final run of Settlement for each such Settlement
                  Period.

                  For the purposes of this paragraph 2:-

                  (A)      a Generating Unit shall be an Allocated Generating
                           Unit of a Pool Member (in this paragraph, the
                           "Identified Pool Member") if it belongs to the
                           Identified Pool
                                           ----------------------
                           Member as of the date on which the Executive
                           Committee calculates the Contributory Shares of Pool
                           Members for the relevant Quarter pursuant to
                           paragraph 6. If at any time during such Quarter an
                           Allocated Generating Unit shall belong to another
                           Pool Member (in this paragraph, the "Transferee Pool
                           Member"), the Contributory Shares
                                           ----------------------
                           attributed to the Identified Pool Member for such
                           Quarter by reason of the Allocated Generating Unit
                           belonging to it shall be transferred to the
                           Transferee Pool Member as of the date on which such
                           Allocated Generating Unit first belongs to the
                           Transferee Pool Member (and the Identified Pool
                           Member and the Transferee Pool Member shall jointly
                           notify the Executive Committee in writing of such
                           date in good time before its occurrence);

                  (B)      a Generating Unit shall belong to a Pool Member if it
                           is owned by that Pool Member and not leased to
                           another person or if it is leased by that Pool Member
                           from another person;

                  (C)      a Pool Member shall notify the Executive Committee
                           promptly on request of its Allocated Generating Units
                           and the Executive Committee and each other Party may
                           rely on the information in that notification and in
                           any notification under paragraph (A) above without
                           further enquiry or need to verify that information;

                  (D)      in determining the meaning of "good time" for the
                           purposes of paragraph (A) above one factor to be
                           taken into account is that the Settlement System
                           Administrator must be allowed sufficient time to
                           effect the necessary changes in Settlement associated
                           with the transfer of the relevant Allocated
                           Generating Unit; and

                    (E)  the Executive  Committee  may, upon application of any
                         Pool Member involved in any transfer of assets between
                         Pool Members during any Quarter, adjust as between the
                         Pool Members involved in such transfer,  the number of
                         Points  and/or  Weighted  Votes to which they in their
                         capacities as Suppliers are entitled in respect of the
                         remaining part of that  Quarter  and/or one or both of
                         the two immediately  succeeding  Quarters  if,  in the
                         opinion of the  Executive Committee,  such  adjustment
                         would  help  accommodate the  consequences  of  such a
                         transfer and not prejudice  the interests of any other
                         Pool Member in any material respect.

3.       New Pool Members: Until the third Quarter Day next falling after the
         date of its admission as a Pool Member, any Party which is admitted as
         a Pool Member pursuant to Clause 8.2 shall receive that number of
         Points as is equal to one thousand times the number of Weighted Votes
         to which such Pool Member would have been entitled under Clause
         11.3.1(b) had:-

         3.1       the provisions of Clause 11.3.3 been ignored; and

         3.2      any applicable restrictions under Clause 11.4 been ignored,

         as determined by the Executive Committee. Thereafter, such Pool
         Member's Points shall be calculated in accordance with paragraph 2.

4.   Calculation  of Points:  On or prior to each Quarter Day and at such other
     times as are referred to in paragraph 6 the Executive  Committee shall, on
     the  basis  of  information  to  be  supplied  by  the  Settlement  System
     Administrator as referred to in Clause 11.3.2, calculate for the Following
     Quarter or (as the case may be) the  remainder of the then current Quarter
     the  number of  Points  which  each  Pool  Member  whose  Points are to be
     calculated in accordance  with paragraph 2 shall receive, and shall notify
     each Pool  Member  and the  Director  in  writing  of the number of Points
     received  by all  Pool  Members  (whether  calculated  in accordance  with
     paragraph 2 or 3). The  determination of the Executive Committee as to the
     number of Points of each Pool  Member  shall (in the absence  of  manifest
     error) be final and binding for all purposes of this Agreement.

5.   Contributory  Shares:  The  Contributory  Share of a Pool  Member  shall be
     calculated in accordance with the following formula:-

         CS = X + Y

         Where:-

         X =   A
                2 x B

         Y =   C
                2 x D

         and where:-

          CS   = the  Contributory  Share of such Pool  Member,  expressed  as a
               percentage

          A    = the number of Points for the time being of such Pool  Member in
               its capacity as a Generator

         B                = the number of Points for the time being of all Pool
                          Members which are Generators, in their capacity as
                          such

         C                = the number of Points for the time being of such Pool
                          Member in its capacity as a Supplier

         D                = the number of Points for the time being of all Pool
                          Members which are Suppliers, in their capacity as
                          such.

6.       Calculation of Contributory Shares: On or prior to:-

         6.1       each Quarter Day;

         6.2  each  date  upon  which a New Party is  admitted,  resigns  or is
               removed as a Pool Member; and

         6.3  each date upon which there is a change in the capacity in which a
               Pool Member participates as a Pool Member,

                  the Executive Committee shall calculate for the Following
                  Quarter or (as the case may be) the remainder of the then
                  current Quarter the Contributory Share for the time being of
                  each Pool Member, and shall notify each Pool Member and the
                  Director in writing of the Contributory Share of each of the
                  Pool Members. The determination of the Executive Committee as
                  to the Contributory Share of each Pool Member shall (in the
                  absence of manifest error) be final and binding for all
                  purposes of this Agreement.

7.       Records: The provisions of Clause 11.9 shall apply mutatis mutandis in
         respect of each Pool Member's Points and Contributory Share.

8.       Additional Capacity: For the purposes of Section 3, any Pool Member who
         acquires an additional capacity in which it participates as a Pool
         Member shall be deemed to have been admitted as a new Pool Member
         pursuant to Clause 8.2 in that additional capacity and, until the third
         Quarter Day next falling after the date such Pool Member's application
         to the Executive Committee pursuant to Clause 8.12 is approved, it
         shall receive that number of Points as is equal to one thousand times
         the number of Weighted Votes to which such Pool Member would have been
         entitled under Clause 11.3.1(b) had:-

         8.1       the provisions of Clause 11.3.3 been ignored; and

         8.2       any applicable restrictions under Clause 11.4 been ignored,

         as determined by the Executive Committee. Thereafter, such Pool
         Member's Points shall be calculated in accordance with paragraph 2.



<PAGE>


                                                  SCHEDULE 15

                                    The Pool Funds Administrator's Contract

                                                   Contents

1.       DEFINITIONS AND INTERPRETATION

         1.1       Definitions

         1.2       Incorporation by reference

         1.3       Interpretation

         1.4       Pool Funds Administrator's consent

2.       APPOINTMENT

         2.1       Continuation of Appointment

         2.2       Term

         2.3       Extension of term

         2.4       Wholly-owned subsidiary

         2.5       Independent Contractor

         2.6       Restriction on business

3.       EXPIRY OF TERM AND REMOVAL

         3.1       Expiry of term

         3.2       Removal by Executive Committee

         3.3       Acknowledgement

         3.4       Removal as a Party

4.       APPOINTMENT OF A SUCCESSOR

         4.1       Right to appoint

         4.2       Appointment following removal

         4.3       Tender process

5.       TRANSFER OF RESPONSIBILITIES AND ASSETS

         5.1       Transfer of responsibilities and assets

         5.2       Co-operation

         5.3       PFA Unwinding Costs

         5.4       Without prejudice to rights

         5.5       Reference to Arbitration

6.       SPECIFIC DUTIES AND RESPONSIBILITIES

         6.1       Tests of the Funds Transfer Hardware and Software

         6.2       Insurance

         6.3       Instructions

         6.4       Changes

         6.5       General

7.       FUNDS TRANSFER SOFTWARE

         7.1       Representations and warranties

         7.2       Future Funds Transfer Software

         7.3       Notification

         7.4       Infringement

         7.5       Restrictions

         7.6       Indemnity

         7.7       Maintenance

         7.8       Escrow arrangements

8.       ANNUAL FEE

         8.1       General

         8.2       Calculation of fee

         8.3       Review of fee

9.       PFA BUDGETS AND NOTICES OF ANNUAL FEE

         9.1       PFA Budgets

         9.2       Contents of PFA Budgets

         9.3       Form of PFA Budgets

         9.4       Notice of Annual Fee

10.      STATEMENT OF COSTS AND FEES

         10.1      Statement of Costs and Fees

         10.2      Form of Statement of Costs and Fees

         10.3      Accompanying Report

         10.4      Tender Costs

         10.5      Basis of preparation

         10.6      Accounting Practices

         10.7      Statement of Charges

11.      QUALITY OF SERVICE REVIEW

         11.1      Complaints

         11.2      Report

         11.3      Quality of Service Review

         11.4      Consultants

         11.5      Terms of engagement

         11.6      Review Report

         11.7      Implementation

         11.8      Arbitration

         11.9      Access

         11.10     Confidentiality

         11.11     Additional rights

12.      AUDITORS' OPINION

13.      PFA ACCOUNTING PERIOD

14.      THE POOL FUNDS ADMINISTRATOR'S CHARGES

15.      AMOUNT

         15.1      Annual Charges

         15.2      Recovery of Charges

         15.3      Interest on non-payment

         15.4      Payment of Charges

         15.5      Amount of Charges

         15.6      New and Former Pool Members

16.      BANK CHARGES

17.      ALLOCATION OF CHARGES

         17.1      Total Sum Due

         17.2      Payment of Total Sum Due

         17.3      Allocation of Total Sum Due

         17.4      Prima facie evidence

18.      ADJUSTMENT

19.      ADDITIONAL COMPENSATION

         19.1      General

         19.2      Compensation

         19.3      Reservation

20.      RECOVERY OF POOL ADMINISTRATION COSTS

         20.1      Applicability

         20.2      Approval

         20.3      Payment

         20.4      Recovery

         20.5      Collection procedure

         20.6      Proportionate Share

         20.7      Bad Debts

         Annex 1:  PFA Budget for the 1992 PFA Accounting Period

         Annex 2:  Pro-forma Statement of Charges

         Annex 3:  Pro-forma Statement of Costs and Fees

         Annex 4:  Existing Funds Transfer Software

         Annex 5:  Escrow Arrangements



<PAGE>


1.       DEFINITIONS AND INTERPRETATION

1.1      Definitions: In this Schedule, except where the context otherwise
         requires:-

         "Active Trading Pool Member" means a Pool Member which buys and/or
         sells electricity pursuant to this Agreement on a regular basis or
         which is an Externally Interconnected Party;

         "Active Trading Pool Member Identities" means at any time the sum of:-

         (i)       one; and

         (ii)       the aggregate number of Pool Member identities which at that
                    time have been accorded to all Active Trading Pool Members
                    by the Settlement System Administrator for the purposes of
                    its operation of the Settlement System provided that (unless
                    EPFAL and the Executive Committee shall otherwise agree in
                    writing) for the purposes of this definition a Pool Member
                    shall have no more than one Pool Member identity in each of
                    the following categories applicable to it, namely:-

                    (a)   category 1: a Pool Member which generates electricity;

                    (b)   category 2: a Pool Member which generates electricity
                          and which is also a Consumer (as defined in the Pool
                          Rules);

                    (c)   category 3: a Pool Member which supplies electricity
                          within the meaning of section 4 of the Act; and

                    (d)   category 4: an Externally Interconnected Party;

                    and accordingly may not have more than four Pool Member
                    identities;

         "Annual Fee" has the meaning given to it in Section 8;

         "Bank Charges" has the meaning given to it in Section 16;

         "Base Sum" has the meaning given to it in paragraph 8.2.1;

         "Consultants" means an independent firm of chartered accountants or
         management consultants of international repute selected by the
         Executive Committee in consultation with EPFAL;

         "EPFAL" means Energy Pool Funds Administration Limited (registered
         number 2444187) whose registered office is situate at 185 Park Street,
         London SE1 9DY;

         "Funds Transfer Hardware" means all the computer equipment and
         accessories whether existing or coming into existence in the future
         which are used at any time by EPFAL in connection with the Funds
         Transfer Business;

         "Funds Transfer Software" means all the computer programs and codes
         (both source code and object code) and all documents and materials
         relating thereto or developed therefrom (including those documents and
         materials on which the programs and codes are embodied and all user
         documentation) and whether existing or coming into existence in the
         future which are used at any time by EPFAL in connection with the Funds
         Transfer Business, including (as at the date hereof) the software
         listed in Annex 4;

         "Notice of Annual Fee" means any notice of the Annual Fee prepared by
         EPFAL pursuant to Section 9;

         "PFA Accounting Period" means each successive period of 12 months
         beginning on 1st April in each year or of such other length and/or
         beginning on such other date as may be agreed in writing between EPFAL
         and the Executive Committee;

         "PFA Budget" means any budget prepared by EPFAL pursuant to Section 9
         and, in the case of the PFA Accounting Period beginning in 1992, the
         budget set out in Annex 1;

         "PFA Commencement Date" means 1st April, 1992;

         "PFA Handling Charge" means, in respect of any amount, five per cent.
         of such amount;

         "PFA Operating Costs" means, in respect of any PFA Accounting Period or
         part thereof, the total expenditure properly incurred or accrued by
         EPFAL in such PFA Accounting Period or (as the case may be) the
         relevant part thereof in respect of:-

         (i)       the costs of effecting and maintaining insurance in
                   accordance with the requirements of
                   sub-section 6.2;

         (ii)       the costs of any tests of the Funds Transfer Hardware and
                    Funds Transfer Software under sub-section 6.1;

         (iii)      audit fees for the Funds Transfer Business and the costs and
                    expenses of the Pool Auditor under sub-section 6.1;

         (iv)       bank administration charges levied by the Pool Banker on
                    EPFAL in respect of the operation of the Pool Banker
                    Accounts (as defined in the Funds Transfer Agreement) (and
                    excluding, for the avoidance of doubt, Bank Charges and any
                    interest charges);

         (v)        the fees and expenses of the PFA Custodian (as defined in
                    Annex 5) incurred in respect of the updating of all
                    historical data referred to in paragraph 1.1.3 of Annex 5;
                    and

         (vi)      the costs of the maintenance arrangements referred to in
                   sub-section 7.7;

         together with the total amount of EPFAL's bad debts recognised in such
         PFA Accounting Period and arising from a Pool Member's failure to pay
         its due proportion of EPFAL's charges determined in accordance with
         Section 17; as conclusively certified in the event of any dispute by
         the auditors for the time being of EPFAL, at the cost and expense of
         EPFAL;

         "Quality of Service Review" means a review of the manner and standard
         of performance (both overall and on a day-to-day basis) by EPFAL of
         those of its obligations under the Agreement (including this Schedule)
         and the Agreed Procedures, the performance of which is called into
         question by reason of the notification received by the Executive
         Committee under sub-section 11.1;

         "Retail Price Index" means the general index of retail prices published
         by the Central Statistical Office each month in respect of all items
         provided that if:-

         (i)        the index for any month in any year shall not have been
                    published on or before the last day of the third month after
                    such month; or

         (ii)      there is a material change in the basis of the index,

         the Executive Committee and EPFAL shall agree a substitute index for
         such month or (as the case may be) a substitute index (and, in default
         of agreement, the matter shall be referred to arbitration pursuant to
         Clause 83);

         "Statement of Charges" means the statement of charges required to be
         submitted by EPFAL pursuant to sub-section 10.7 substantially in the
         form set out in Annex 2 (or in such other form as EPFAL and the
         Executive Committee may from time to time agree in writing) showing the
         total charges to be made by EPFAL on all Pool Members in accordance
         with Sections 15 and 16;

         "Statement of Costs and Fees" means any statement of costs and fees
         required to be submitted by EPFAL pursuant to Section 10 which shall be
         substantially in the form set out in Annex 3 or in such other form as
         EPFAL and the Executive Committee may from time to time agree in
         writing; and

         "Total Sum Due" means, in respect of any PFA Accounting Period, the
         total aggregate amount chargeable by EPFAL for that PFA Accounting
         Period in accordance with Sections 15 and 16.

1.2      Incorporation by reference: In this Schedule, the following
         definitions, namely:-

         "Funds Transfer Agreement";

         "Funds Transfer Business";

         "Funds Transfer System";

         "Letter of Credit";

         "Pool Account"; and

         "Pool Banker"

         shall have the meanings respectively ascribed to them in Schedule 11.

1.3      Interpretation: In this Schedule, except where the context otherwise
         requires, references to a particular Annex, Section, sub-section,
         paragraph or sub-paragraph shall be a reference to that Annex to this
         Schedule or, as the case may be, that Section, sub-section, paragraph
         or sub-paragraph in this Schedule.

1.4      Pool Funds Administrator's consent: The Parties acknowledge and agree
         that, notwithstanding any other provision of the Agreement, insofar as
         directly affects in any material respect the rights, benefits, duties,
         responsibilities, liabilities and/or obligations of the Pool Funds
         Administrator, no amendment to or variation of any of the matters dealt
         with in any of the following provisions of the Agreement shall take
         effect:-

          1.4.1without the prior written consent of EPFAL (but only for so long
               as it is the Pool Funds Administrator):-

          (a)  Clauses 7.3, 9.5, 10.9,  19.4, 25, 66, 68, 69, 74 and 78.2 of the
               Agreement; and

          (b)  this sub-section 1.4; and

         1.4.2      without the prior written consent of EPFAL (but only for so
                    long as it is the Pool Funds Administrator), such consent
                    not to be unreasonably withheld or delayed:-

                    (a)   Clauses 18.1.2, 70, 71.5 and 71.6 of the Agreement;
                          and

                    (b)  Part XVI (other than Clause 63.1), Part XX (other than
                         Clauses  74  and  78.2)  of  and  Schedule  11  to the
                         Agreement; and

                    (c) this Schedule.

2.       APPOINTMENT

2.1      Continuation of Appointment: On 30th March, 1990 EPFAL was appointed by
         each Pool Member and the Ancillary Services Provider and agreed to act
         as the Pool Funds Administrator. This Schedule sets out the terms and
         conditions on and subject to which EPFAL shall continue and agrees to
         continue to act as the Pool Funds Administrator for the period referred
         to in sub-section 2.2 (as such period may be extended or further
         extended in accordance with the terms of this Schedule).

2.2      Term: EPFAL's appointment as the Pool Funds Administrator on and
         subject to the terms and conditions set out in this Schedule shall be
         deemed to have commenced on the PFA Commencement Date and, subject as
         hereinafter provided in this Schedule, shall end on 31st March, 1995
         (the period from the PFA Commencement Date to 31st March, 1995 being
         the "Current Term").

2.3      Extension of term: EPFAL's appointment as the Pool Funds Administrator
         may be extended beyond the expiry of the Current Term or (as the case
         may be) any extended or further extended term either:-

         2.3.1      if it successfully tenders pursuant to sub-section 4.3 for
                    continuation of its appointment and then on and subject to
                    the terms and conditions of the tender; or

         2.3.2      if at any time prior to that expiry EPFAL and the Executive
                    Committee so agree in writing and then on and subject to
                    such terms and conditions as are so agreed.

2.4      Wholly-owned subsidiary: NGC shall procure that, so long as EPFAL acts
         or is obliged to act as the Pool Funds Administrator, EPFAL at all
         times remains a wholly-owned subsidiary of NGC.

2.5      Independent Contractor: In carrying out its duties and responsibilities
         and otherwise in acting as the Pool Funds Administrator under the
         Agreement, EPFAL shall act as an independent contractor and (unless
         expressly authorised to the contrary) shall neither act nor hold itself
         out nor be held out as acting as agent for any of the other Parties.

     2.6  Restriction  on  business:  For so long as  EPFAL  is the  Pool  Funds
          Administrator  EPFAL  undertakes  to  each  Party  and  the  Executive
          Committee  that it shall not  render to any  other  Party any  billing
          service or any other service of any nature  whatsoever which is likely
          to give rise to a conflict of interest in the  performance by EPFAL of
          its duties and  responsibilities as the Pool Funds Administrator under
          the  Agreement.  EPFAL  further  undertakes  that if it carries on any
          business other than that of Pool Funds Administrator it shall maintain
          separate accounts and records in respect of any other business.  EPFAL
          acknowledges  and agrees that this undertaking has been the subject of
          discussion and negotiation and is fair and reasonable having regard to
          the revision of the terms and conditions of EPFAL's appointment as the
          Pool Funds Administrator with effect from the PFA Commencement Date.

3.       EXPIRY OF TERM AND REMOVAL

3.1  Expiry of term:  If on expiry of the Current Term (or, if EPFAL's  term of
     appointment  has been  extended  or further extended  in  accordance  with
     paragraph 2.3.1 or 2.3.2, expiry of that extended or further extended term)
     the term of EPFAL's  appointment  as the Pool Funds Administrator  has not
     been or will not be extended  or (as the case may be) further extended in
     accordance  with paragraph  2.3.1 or 2.3.2, EPFAL shall, at the request of
     the Executive Committee, continue to serve as the Pool Funds Administrator
     for such  additional period not exceeding one year from the date of expiry
     of the Current Term) (or, if EPFAL's term of appointment  has been extended
     or further extended in accordance with paragraph 2.3.1 or 2.3.2, expiry of
     that  extended or further extended  term) as the  Executive  Committee may
     request in order to provide an opportunity for a successor to be appointed.
     The Executive Committee shall make such a request as soon as possible after
     becoming aware of the above circumstances  but in any event no later than
     three months (or such other period as EPFAL and the Executive Committee may
     from  time to time  agree in  writing)  before the date of  expiry  of the
     Current Term or (as the case may be) the extended or further extended term.

3.2  Removal by Executive  Committee:  The  Executive  Committee may at any time
     remove EPFAL as the Pool Funds Administrator forthwith or after such period
     of notice as it thinks fit if:-

         3.2.1      EPFAL shall have committed a material breach of any of its
                    obligations as the Pool Funds Administrator under the
                    Agreement or the Agreed Procedures (other than a technical
                    breach of trust covered by the provisions contained in
                    Section 5.16 of Schedule 11) and, if such breach is capable
                    of remedy, shall have failed to remedy such breach within:-

                    (a)   three Business Days (in the case of a failure to make
                          payment (other than where any Pool Member, the
                          Ancillary Services Provider or the Grid Operator is in
                          default which results in EPFAL's inability to make
                          such payment) or a failure to call a Letter of Credit
                          when required);

                    (b) 14 days (in the case of any breach of its undertaking in
sub-section 2.6); or

                    (c) 15 Business Days (in the case of any other default),

                    in any such case after it shall have received written notice
                    from the Executive Committee specifying the breach and
                    requiring it to be remedied; or

         3.2.2     EPFAL:-

                    (i)   is unable to pay its debts (within the meaning of
                          section 123(1) or (2) of the Insolvency Act 1986, but
                          subject as hereinafter provided in this paragraph
                          3.2.2) or if any voluntary agreement is proposed in
                          relation to it under section 1 of that Act or enters
                          into any scheme of arrangement (other than for the
                          purpose of reconstruction or amalgamation upon terms
                          and within such period as may previously have been
                          approved in writing by the Executive Committee); or

                    (ii)  has a receiver (which expression shall include an
                          administrative receiver within the meaning of section
                          29 of the Insolvency Act 1986) of the whole or any
                          material part of its assets or undertaking appointed;
                          or

                    (iii) has an administration order under section 8 of the
                          Insolvency Act 1986 made in relation to it; or

                    (iv)  passes any resolution for winding-up other than a
                          resolution previously approved in writing by the
                          Executive Committee; or

                    (v) becomes subject to an order by the High Court for
                        winding-up.

                    For the purposes of sub-paragraph (i) above section 123(1)
                    of the Insolvency Act 1986 shall have effect as if for
                    "(pound)750" there was substituted "(pound)150,000" and,
                    further, EPFAL shall not be deemed to be unable to pay its
                    debts for the purposes of sub-paragraph (i) above if any
                    such demand as is mentioned in the said section is being
                    contested in good faith by EPFAL with recourse to all
                    appropriate measures and procedures.

3.3      Acknowledgement: EPFAL acknowledges and agrees that, for the purposes
         of paragraph 3.2.1, any breach by it of its undertaking in sub-section
         2.6 shall be deemed to be a material breach of its obligations under
         the Agreement.

3.4      Removal as a Party:

         3.4.1      Upon the expiry or termination for whatever reason of EPFAL
                    as the Pool Funds Administrator each of the Parties shall
                    promptly at its own cost and expense execute and deliver all
                    agreements and other documentation and do all such other
                    acts, matters and things as may be necessary to effect
                    (without prejudice to paragraph 3.4.2) EPFAL's release as
                    the Pool Funds Administrator and (if appropriate) as a
                    Party.

         3.4.2      The expiry or termination for whatever reason of EPFAL's
                    appointment as the Pool Funds Administrator shall be without
                    prejudice to any accrued rights and liabilities of the
                    Parties (including EPFAL as the Pool Funds Administrator)
                    under the Agreement.

4.       APPOINTMENT OF A SUCCESSOR

4.1      Right to appoint: The Executive Committee shall have the right to
         appoint any successor Pool Funds Administrator. In making any such
         appointment the Executive Committee shall take account of the views (if
         any) expressed by any Pool Member, the Ancillary Services Provider or
         the Grid Operator. The appointment of a successor Pool Funds
         Administrator shall take effect upon the removal or, as the case may
         be, expiry of the term of appointment of EPFAL as the Pool Funds
         Administrator.

4.2      Appointment following removal: If EPFAL is removed pursuant to
         sub-section 3.2 the Executive Committee may appoint a successor without
         being obliged to carry out or complete the process set out in
         sub-section 4.3, such appointment to be on and subject to such terms
         and conditions as the Executive Committee sees fit.

4.3      Tender process:

          4.3.1The Executive  Committee  shall invite tenders for appointment as
               successor Pool Funds Administrator:-

                    (a)   not later than one year before the expiry of the
                          Current Term (or, if EPFAL's term of appointment has
                          been extended or further extended in accordance with
                          paragraph 2.3.2, not later than a date agreed between
                          EPFAL and the Executive Committee and falling before
                          the expiry of that extended or further extended term);
                          and

                    (b)   if EPFAL's term of appointment has been extended or
                          further extended in accordance with paragraph 2.3.1 or
                          EPFAL has been requested to continue to serve as the
                          Pool Funds Administrator pursuant to sub-section 3.1,
                          not later than six months (or such other period as
                          EPFAL and the Executive Committee may agree in
                          writing) before the expiry of that extended or further
                          extended term.

          4.3.2 The persons invited to tender and the terms and  conditions  of
               that  invitation, of the tender procedure and of the appointment
               shall be determined by the Executive Committee provided that the
               tender  process shall be completed and the  Executive  Committee
               shall have made its decision as to the successor  (or shall have
               decided  not to  appoint  a  successor from  those  persons  who
               submitted  tenders) no later than the date falling  three months
               before the expiry of the Current Term or (as the case may be) the
               extended or further extended term. The Executive Committee shall
               not be bound to appoint the  successor  Pool Funds Administrator
               from  any of  those  persons  who  have submitted tenders.  The
               Executive Committee shall use its reasonable endeavours to ensure
               that in the  tender  process  the  Executive Committee  does not
               discriminate  unfairly  between  those eligible to tender or the
               tenders received.

5.       TRANSFER OF RESPONSIBILITIES AND ASSETS

5.1      Transfer of responsibilities and assets: Upon a successor Pool Funds
         Administrator being appointed under Section 4 and accepting such
         appointment, EPFAL shall, at the request of such successor:-

         5.1.1     (a)    at EPFAL's option:-

                          (i)      fully and effectively assign, transfer and
                                   deliver to such successor all Funds Transfer
                                   Software (and copies thereof) beneficially
                                   owned by EPFAL together with all rights,
                                   title and interest therein or thereunder
                                   vested in EPFAL; or

                    (ii) irrevocably license  such  successor  to use all Funds
                         Transfer Software beneficially  owned by EPFAL,  which
                         licence shall be on terms enabling  such  successor to
                         grant  sub-licences and permitting the benefit of such
                         licence to be assigned to any further  successor  Pool
                         Funds Administrator and shall include an undertaking by
                         EPFAL  promptly  to provide such  access to source and
                         object codes and other documents and materials thereto
                         relating to the operation of the Funds Transfer System
                         as each such successor may  reasonably require for the
                         purpose of maintaining and enhancing all Funds Transfer
                         Software; and

                    (b)   use its best endeavours to assign or novate or procure
                          the assignment or novation of any licence or other
                          agreement to use any Funds Transfer Software which is
                          not beneficially owned by EPFAL or to such successor
                          and/or to maintain any Funds Transfer Software;

                    (c)   deliver to the successor Pool Funds Administrator two
                          copies of the Funds Transfer Software and any
                          associated documentation at the request of the
                          Executive Committee for use by the successor Pool
                          Funds Administrator;

         5.1.2      make over to such successor all such records, manuals, data
                    and other information which EPFAL is required to retain
                    pursuant to Clause 63.1.3 of the Agreement provided that
                    EPFAL shall be entitled to retain copies of such of those
                    manuals as have been prepared by EPFAL at its own cost and
                    expense (and not recharged to Pool Members pursuant to the
                    Agreement);

         5.1.3      use all reasonable endeavours to novate or procure the
                    novation of the Funds Transfer Agreement and any banking
                    facility or financial accommodation made available to EPFAL
                    as Pool Funds Administrator by the Pool Banker and to
                    transfer all Letters of Credit to such successor and cause
                    to be transferred to such successor to hold in its capacity
                    as Pool Funds Administrator all balances standing to the
                    credit of any Pool Account;

         5.1.4      provide such training, assistance and systems support as
                    such successor may reasonably require and for such period as
                    such successor may reasonably require (not exceeding three
                    months from the date of its removal or expiry of its term as
                    the Pool Funds Administrator) to enable such successor to
                    carry out its duties and responsibilities as successor Pool
                    Funds Administrator;

         5.1.5      use all reasonable endeavours to transfer or otherwise make
                    available to such successor such of the freehold and
                    leasehold property as is owned or occupied by EPFAL and is
                    used by it in its capacity as the Pool Funds Administrator;
                    and

         5.1.6      transfer or otherwise make available to such successor all
                    other assets, equipment (excluding computer hardware),
                    facilities, rights, know-how and transitional assistance
                    which it possesses and which is necessary or desirable for
                    such successor to have in order to enable such successor
                    efficiently to operate the Funds Transfer System in
                    accordance with the Agreement and the Agreed Procedures with
                    effect on and from the time of the removal of EPFAL or
                    expiry of EPFAL's term as the Pool Funds Administrator
                    (unless such removal is without notice in which case so soon
                    thereafter as is reasonably practicable),

         and in any such case on such reasonable terms as may be agreed between
         EPFAL and its successor as Pool Funds Administrator (but only, in the
         case of such successor, after it has itself obtained the written
         consent of the Executive Committee to such terms) within one month
         after the commencement of negotiations (or such longer period as EPFAL,
         such successor and the Executive Committee may agree in writing) and,
         in default of agreement of terms, the dispute shall be referred to
         arbitration in accordance with Clause 83.

5.2  Co-operation: EPFAL further agrees, in consideration of the payment of such
     amount  as may be agreed  between  EPFAL and its  successor  as Pool  Funds
     Administrator (but only, in the case of such successor, after it has itself
     obtained  the written  consent of the  Executive  Committee  to such terms)
     within the period  referred to in the final  paragraph of  sub-section  5.1
     (and,  in default of agreement of terms,  the dispute  shall be referred to
     arbitration  in  accordance  with Clause 83), to  co-operate  with any such
     successor  and the  Executive  Committee  so that the  transfer  of duties,
     responsibilities,  assets and  know-how  to such  successor  is carried out
     causing as little  disruption to the operation of the Funds Transfer System
     and as little  inconvenience  to the Parties as is  practicable  in all the
     circumstances.

5.3      PFA Unwinding Costs: Without prejudice to Section 18, EPFAL's costs and
         expenses of, or directly associated with, its removal or the expiry or
         termination for whatever reason of its appointment as the Pool Funds
         Administrator (including any redundancy or relocation costs or expenses
         and any costs and expenses arising from the vacation or surrender of
         any premises or disposal or its own re-deployment of any plant or
         equipment used in the Funds Transfer Business) shall be borne
         exclusively by EPFAL (and shall not be recharged to Pool Members).

5.4      Without prejudice to rights: Any payment made by all or any of the Pool
         Members to EPFAL under this Section 5 shall be without prejudice to any
         rights and remedies which the Pool Members (or any of them) may have
         against EPFAL in its capacity as the Pool Funds Administrator arising
         under the Agreement.

5.5  Reference to Arbitration: If any matter is referred to arbitration pursuant
     to this  Section  5,  EPFAL  shall not by virtue of the  reference  to such
     arbitration  be entitled to delay in the handing over of the Funds Transfer
     Software and any records, manuals, data or other information referred to in
     sub-section  5.1 and EPFAL shall not be entitled to withhold any  training,
     assistance  and system  support but shall  continue to co-operate  with the
     Executive  Committee and the successor Pool Funds  Administrator  including
     carrying  out  its  obligations  set  out in  sub-sections  5.1 and 5.2 and
     accordingly  EPFAL shall not be entitled to withhold or delay the  carrying
     out of its obligations.

6.       SPECIFIC DUTIES AND RESPONSIBILITIES

6.1      Tests of the Funds Transfer Hardware and Software:

          6.1.1EPFAL  shall,  upon receipt of not less than ten  working  days'
               notice  from the Pool Auditor  and  subject to  availability  of
               computer  time,  arrange for such  tests of the  Funds  Transfer
               Hardware and the Funds Transfer Software as are from time to time
               reasonably  required  by the Pool  Auditor  (either  on its  own
               initiative or on the instructions of the Executive Committee) for
               the  performance of its functions under Part IX of the Agreement.
               EPFAL shall, if so required by the Pool Auditor,  permit the Pool
               Auditor  to carry  out such  tests  provided  that the  person or
               persons  allocated to carry out such tests by the Pool Auditor is
               or are  suitably  qualified in the  operation of  computers  and
               computer  systems to carry out such tests and, in any other case,
               EPFAL shall carry out such tests.

         6.1.2      EPFAL shall give the Pool Auditor reasonable access to the
                    Funds Transfer Hardware and the Funds Transfer Software for
                    the purpose of carrying out and monitoring any test under
                    paragraph 6.1.1.

         6.1.3      The costs of any test under paragraph 6.1.1 shall be borne
                    by EPFAL and recovered by it as part of the PFA Operating
                    Costs in accordance with this Schedule.

6.2      Insurance:

         6.2.1      Subject to the availability in the insurance market of such
                    insurances, EPFAL shall effect and maintain in full force
                    and effect with first class insurers the following
                    insurances:-

                    (a)   professional indemnity insurance as Pool Funds
                          Administrator in an amount of not less than
                          (pound)60,000,000 any one claim and (pound)60,000,000
                          all claims in any one year (or such other amount as
                          may from time to time be reasonably required by the
                          Executive Committee after consultation with EPFAL);
                          and

                    (b) employee fidelity insurance in an amount of
(pound)60,000,000.

         6.2.2      All premia and other sums of money payable in respect of all
                    insurances effected or to be effected pursuant to paragraph
                    6.2.1 shall be borne by EPFAL and recovered by it as part of
                    the PFA Operating Costs in accordance with this Schedule.

         6.2.3      EPFAL shall use all reasonable endeavours to make and
                    collect claims promptly and shall apply all moneys received
                    by it in respect of the insurances referred to in paragraph
                    6.2.1 in or towards making good the loss and fully repairing
                    the damage or (as the case may be) satisfying the relevant
                    liability in respect of which such moneys were receivable or
                    reimbursing the cost of the same.

         6.2.4      EPFAL shall promptly supply the Executive Committee upon
                    request from time to time with an insurance broker's
                    certificate in form and content reasonably satisfactory to
                    the Executive Committee confirming that cover has been
                    effected in respect of the insurances referred to in
                    paragraph 6.2.1 and giving reasonable details of the terms
                    and conditions of such insurances.

6.3      Instructions: Without prejudice to Section 19, EPFAL shall comply with
         all instructions and directions issued by the Executive Committee to
         EPFAL in its capacity as the Pool Funds Administrator unless such
         compliance would cause EPFAL to be in breach of any of its other
         obligations as the Pool Funds Administrator under the Agreement or the
         Agreed Procedures.

6.4      Changes: EPFAL in its capacity as the Pool Funds Administrator shall
         not make any change in its operation of the Funds Transfer System (or
         any part or aspect thereof) which in its reasonable opinion is or may
         (either alone or together with any other change(s)) be material without
         the prior written consent of the Executive Committee. If EPFAL wishes
         to make any such change, it shall promptly notify the Executive
         Committee in writing giving reasonable details of the proposed change.

6.5      General: EPFAL shall have such other duties, responsibilities,
         obligations and liabilities as are attributed to it in the Agreement
         and the Agreed Procedures.

7.       FUNDS TRANSFER SOFTWARE

7.1      Representations and warranties: EPFAL hereby represents and warrants to
         each of the Pool Members and the Executive Committee that:-

         7.1.1      the Funds Transfer Software referred to in Annex 4 (in this
                    Section, "Existing Funds Transfer Software") is all the
                    Funds Transfer Software used by EPFAL in connection with the
                    Funds Transfer Business as at 31st March, 1992;

         7.1.2      it is the sole beneficial owner of the Existing Funds
                    Transfer Software referred to in Part A of Annex 4;

         7.1.3      it is the licensee of the Existing Funds Transfer Software
                    referred to in Part B of Annex 4 and that the details of the
                    licences set out in Part B of Annex 4 are correct;

         7.1.4      the Existing Funds Transfer Software is freely transferable
                    to any successor Pool Funds Administrator pursuant to
                    Section 5;

         7.1.5      the use of the Existing Funds Transfer Software in
                    connection with the Funds Transfer Business does not
                    infringe the rights of any other person and EPFAL is not in
                    breach of any of the terms of the licences referred to in
                    Part B of Annex 4; and

         7.1.6      it has not received any claim or notice challenging its
                    title to, or its right to use, the Existing Funds Transfer
                    Software.

7.2      Future Funds Transfer Software: As from the PFA Commencement Date EPFAL
         shall use its best endeavours to ensure it shall be the sole beneficial
         owner of all Funds Transfer Software used or to be used in the Funds
         Transfer Business after 31st March, 1992 (in this Section, "Future
         Funds
      
          Transfer Software").  In the event that EPFAL is unable to ensure that
               it will be sole beneficial owner of such Future
               Funds  Transfer  Software it shall  use its best  endeavours  to
               ensure  that  it  shall  be the exclusive  licensee  thereof  in
               relation to the Funds Transfer Business or any similar or related
               businesses on terms which enable it to grant sub-licences and the
               benefit of such  licence to be assigned  to any  successor  Pool
               Funds Administrator.

          7.3  Notification:  EPFAL undertakes to notify the Executive Committee
               forthwith in writing in the event that:-

         7.3.1      it is unable to ensure that it is the owner of, or licensee
                    on the terms set out in sub-section 7.2 under, Future Funds
                    Transfer Software; or

         7.3.2      it receives any claim or notice of any alleged infringement
                    of the rights of any other person by its use of any Funds
                    Transfer Software or challenging its title to, or its right
                    to use, any Funds Transfer Software; or

          7.3.3it is or becomes aware of any  infringement by any third party of
               its rights in any Funds Transfer Software,

          and to consult with the  Executive  Committee  as to any steps to be
               taken in respect of any such situation.

7.4      Infringement: EPFAL hereby further represents and warrants to and
         undertakes with each of the Pool Members and the Executive Committee
         that the use of any Future Funds Transfer Software in connection with
         the Funds Transfer Business will not infringe the rights of any other
         person and that it shall not breach any of the terms of any licences
         under Future Funds Transfer Software.

7.5      Restrictions: EPFAL shall not, without the prior written consent of the
         Executive Committee (not be to unreasonably withheld or delayed), grant
         to any person (other than a successor Pool Funds Administrator) any
         right, title or interest to, in or under any Funds Transfer Software or
         give to such person a copy of, or permit such person to use, Funds
         Transfer Software or otherwise derive any benefit or profit therefrom
         (other than by itself using such Funds Transfer Software for the
         purpose of the Funds Transfer Business).

7.6      Indemnity: EPFAL hereby agrees fully and effectively to indemnify and
         keep indemnified each of the Pool Members and the Executive Committee
         from and against any and all loss, liability, damages, costs and
         expenses which it may suffer or incur arising out of or resulting from
         any breach by the Pool Funds Administrator of any of the terms,
         representations, warranties and undertakings contained in this Section
         7 and Annex 5.

7.7      Maintenance: EPFAL shall ensure that at all times it has in full force
         and effect proper arrangements for the maintenance of (and the prompt
         rectification of defects in) the Funds Transfer Hardware and the Funds
         Transfer Software and, upon the reasonable request of the Executive
         Committee, shall supply evidence reasonably satisfactory to the
         Executive Committee of the existence and nature of such arrangements.
         The costs of all such maintenance arrangements shall be borne by EPFAL
         and recovered by it as part of the PFA Operating Costs in accordance
         with this Schedule.

7.8      Escrow arrangements: EPFAL shall comply with the provisions of Annex 5
         which relate to escrow arrangements for the Funds Transfer Software and
         gives the warranties therein stated.

8.       ANNUAL FEE

8.1      General: In consideration of the carrying out by EPFAL of its duties
         and responsibilities as the Pool Funds Administrator as set out in the
         Agreement and the Agreed Procedures (other than in respect of those
         matters for which EPFAL is or will be compensated through the recovery
         of the PFA Operating Costs in accordance with this Schedule) EPFAL
         shall be paid an annual fee as the Pool Funds Administrator (the
         "Annual Fee") calculated in accordance with the following provisions of
         this Section 8.

8.2      Calculation of fee:

         8.2.1      In respect of the PFA Accounting Period beginning on the PFA
                    Commencement Date the Annual Fee for that PFA Accounting
                    Period shall be (pound)1,250,000 (the "Base Sum").

         8.2.2      In respect of each PFA Accounting Period beginning on an
                    anniversary of the PFA Commencement Date the Annual Fee
                    (expressed in pounds sterling) for that PFA Accounting
                    Period shall be calculated in accordance with the following
                    formulae:-

                    (a)   ABS = Base Sum * (1+(RPIp/100))

                          where             RPIp = the percentage change
                                            (whether of a positive or negative
                                            value) in the Retail Price Index
                                            between that published in, or (as
                                            the case may be) the substitute
                                            index for, the third month before
                                            the PFA Commencement Date and that
                                            published in, or the substitute
                                            index for, the third month before
                                            the anniversary from which the
                                            adjusted Annual Fee is to take
                                            effect;

                    (b)   ATPM = Base Sum * (I/100)

                          where             I = the value set out in column 2
                                            below opposite the number of Active
                                            Trading Pool Member Identities set
                                            out in column 1 below as at the
                                            beginning of the third month before
                                            the anniversary from which the
                                            adjusted Annual Fee is to take
                                            effect:-

                                       Column 1                 Column 2
                                       --------                 --------
                              Number of Active Trading           Value
                                Pool Member Identities
                                    0 to 60                          0
                                    61 to 70                         5
                                    71 to 80                        10
                                    81 to 90                        20
                                    91 to 100                       25
                                    101 to 110                      30
                                    111 to 120                      35
                                    121 to 130                      45
                                    131 to 140                      50
                                    141 to 150                      55


                    (c) Annual Fee = ABS + ATPM.

          8.2.3If during any PFA Accounting Period beginning on an anniversary
               of the PFA  Commencement Date the number of Active  Trading Pool
               Member Identities shall change such that, were the Annual Fee for
               that PFA Accounting  Period to be recalculated,  it would yield a
               different  result from that originally  calculated  for that PFA
               Accounting  Period  (or, as the  case  may be,  from  that  most
               recently  recalculated for that PFA Accounting Period pursuant to
               this paragraph 8.2.3) EPFAL shall promptly recalculate the Annual
               Fee and notify the  Executive Committee in writing of the amount
               thereof.  Such  notification shall be accompanied by a statement
               showing in  reasonable  detail the calculation  of such  amount.
               Subject to paragraph 8.3.2(b), such recalculated Annual Fee shall
               take effect for the period from the date falling one month after
               the receipt by the Executive Committee of such notification until
               the end of the then  current PFA  Accounting  Period  (or  until
               further recalculated under this paragraph 8.2.3).

8.3      Review of fee:

         8.3.1      If at any time the total number of Active Trading Pool
                    Member Identities shall exceed 150 EPFAL may request the
                    Executive Committee to review the basis of calculation
                    and/or the amount of the Annual Fee. Upon receipt of such
                    request the Executive Committee and EPFAL shall negotiate in
                    good faith for a period not exceeding three months (or such
                    longer period as EPFAL and the Executive Committee may agree
                    in writing) with a view to agreeing a revised basis of
                    calculation and/or amount of the Annual Fee.

         8.3.2            (a) If EPFAL and the Executive Committee shall agree a
                          revised basis of calculation and/or amount of the
                          Annual Fee, such revisions shall take effect in
                          accordance with the terms of that agreement.

          (b)  If at the end of the negotiation  period referred to in paragraph
               8.3.1 EPFAL and the Executive  Committee  shall not have agreed a
               revised basis of  calculation  and/or amount of the Annual Fee or
               if the Executive  Committee  shall dispute any calculation of the
               Annual Fee made by EPFAL and notified to the Executive  Committee
               pursuant to  sub-section  9.4 or  paragraph  8.2.3,  EPFAL or the
               Executive Committee may refer the dispute to arbitration pursuant
               to Clause 83. Pending the award of the  arbitrator(s)  the Annual
               Fee   current   as  at  the  date  of  EPFAL's   calculation   or
               recalculation shall continue in force.

9.       PFA BUDGETS AND NOTICES OF ANNUAL FEE

9.1      PFA Budgets: Not earlier than three nor later than two months prior to
         the first day of each PFA Accounting Period EPFAL shall prepare and
         submit to the Executive Committee a PFA Budget for such PFA Accounting
         Period. Such PFA Budget shall be indicative only but shall be prepared
         on a best estimates basis. The PFA Budget for the PFA Accounting Period
         beginning in 1992 is set out in Annex 1.

9.2      Contents of PFA Budgets: Each PFA Budget (other than the PFA Budget for
         the PFA Accounting Period beginning in 1992) shall compare each item or
         category of budgeted expenditure shown therein with the forecast
         expenditure in respect of such item or category for the remainder of
         the then current PFA Accounting Period and report any salient
         differences between any such forecast expenditure and the budgeted
         expenditure in respect of each such item or category in the immediately
         preceding PFA Budget.

9.3      Form of PFA Budgets: Each PFA Budget shall be substantially in the form
         of that set out in Annex 1 (or in such other form as EPFAL and the
         Executive Committee may from time to time agree in writing).

9.4      Notice of Annual Fee: Each PFA Budget (other than the PFA Budget for
         the PFA Accounting Period beginning in 1992) shall be accompanied by a
         Notice of Annual Fee prepared by EPFAL stating the Annual Fee for the
         PFA Accounting Period to which such PFA Budget relates and setting out
         in reasonable detail the calculation of the Annual Fee. Subject to
         paragraphs 8.2.3 and 8.3.2, the Annual Fee so stated shall take effect
         for such PFA Accounting Period.

10.      STATEMENT OF COSTS AND FEES

          10.1 Statement of Costs and Fees:  No later than one month  following
               the date in any PFA Accounting Period of the  publication of the
               audited accounts for the Funds Transfer Business for the previous
               PFA  Accounting  Period,  EPFAL shall  prepare and submit to the
               Executive Committee and all Pool Members a Statement of Costs and
               Fees  for  such  previous  PFA Accounting  Period.  The  audited
               accounts  of EPFAL,  the  instruction letter  from  EPFAL to its
               auditors giving  instructions for the auditing of those accounts
               and  the  auditors'  management letter  (to the  extent  that it
               relates to the economy, efficiency, effectiveness and quality of
               service of EPFAL in carrying out its duties and  responsibilities
               as the Pool Funds  Administrator) shall accompany each Statement
               of Costs and Fees for each entire PFA Accounting Period.

          10.2 Form of Statement of Costs and Fees:  The Statement of Costs and
               Fees for any PFA Accounting Period:-

         10.2.1     in relation to the PFA Operating Costs, shall attribute
                    actual and accrued expenditure for such period against,
                    inter alia, each of the categories and sub-categories set
                    out in the corresponding PFA Budget for such PFA Accounting
                    Period; and

         10.2.2     in relation to the Annual Fee, shall state the Annual Fee
                    and any revisions thereto for such PFA Accounting Period and
                    shall set out in reasonable detail the calculation thereof.

10.3     Accompanying Report: Each PFA Budget and Statement of Costs and Fees
         for an entire PFA Accounting Period submitted to the Executive
         Committee and, in the case of the Statement of Costs and Fees, Pool
         Members pursuant to sub-section 9.1 or 10.1 shall be supported by a
         written report of EPFAL commenting in reasonable detail upon the
         matters comprised in the categories of expenditure included in such PFA
         Budget or Statement of Costs and Fees.

10.4     Tender Costs:

          10.4.1  If,  during  any  PFA  Accounting Period,   the  Pool  Funds
               Administrator  reasonably  believes  that any of the  category of
               services  within the definition of PFA Operating Costs are likely
               to exceed the amount of that  expenditure  for that  category  or
               sub-category  or  other  items  of cost  provided  for in the PFA
               Budget by more than 5 per  cent.,  the Pool  Funds  Administrator
               shall notify the Executive Committee  accordingly and explain the
               reasons for the increase. The Executive Committee may require the
               Pool  Funds  Administrator  to  invite  tenders  for  any  of the
               categories  or  sub-categories  or  items  of cost  which  are so
               exceeded, in accordance with sub-section 10.4.3.

         10.4.2     If the Executive Committee considers that the amount
                    budgeted for any category or sub-category or other item of
                    cost in the PFA Budget is unreasonable then the Executive
                    Committee may require the Pool Funds Administrator to invite
                    tenders for any of the categories or sub-categories or other
                    items of cost in the PFA Budget in accordance with
                    sub-section 10.4.3.

          10.4.3 Within  seven  Business  Days after receipt of a notice  given
               pursuant to paragraph 10.4.1 the Executive Committee shall notify
               the Pool Funds  Administrator in  writing  whether it wishes the
               Pool Funds Administrator to seek a further tender for the service
               in  question.  If the  Executive Committee  so notifies the Pool
               Funds  Administrator  that it requires  a  further  tender to be
               sought,  the Pool  Funds  Administrator  shall  obtain a  further
               tender and shall give the Executive Committee  reasonable details
               of that  further  tender and at the same time  shall  notify the
               Executive  Committee of which  tender  it has  chosen  to accept
               together (if applicable) with reasons as to why it has not chosen
               the lowest price tender.

         10.4.4     If the Executive Committee fails to notify the Pool Funds
                    Administrator within the time period referred to in
                    paragraph 10.4.2 or notifies the Pool Funds Administrator
                    that it does not wish it to seek a further tender, the Pool
                    Funds Administrator may accept the original tender.

10.5     Basis of preparation: All Statements of Costs and Fees other than a
         Statement of Costs and Fees in respect of an entire PFA Accounting
         Period shall be unaudited but prepared on a best estimates basis. The
         Statement of Costs and Fees in respect of an entire PFA Accounting
         Period shall be audited by EPFAL's auditors.

          10.6 Accounting Practices: Each PFA Budget and Statement of Costs and
               Fees shall be prepared on the basis of the accounting  principles
               and practices used to draw up the most recent audited accounts of
               EPFAL and  consistently  applied.  If any  Statement of Costs and
               Fees for an entire PFA Accounting  Period is not prepared on such
               basis, EPFAL shall prepare and submit to the Executive  Committee
               and all Pool Members a pro-forma set of its audited  accounts for
               such entire PFA Accounting  Period which is prepared on the basis
               of the  accounting  principles  and practices used to prepare the
               relevant  Statement  of  Costs  and  Fees.  Any  changes  in  the
               accounting   principles   and   practices   or  their  method  of
               application  used to prepare  EPFAL's  audited  accounts shall be
               noted in the next  following PFA Budget or Statement of Costs and
               Fees, as the case may be.

10.7 Statement of Charges: A Statement of Charges shall accompany each Statement
of Costs and Fees.

11.      QUALITY OF SERVICE REVIEW

11.1     Complaints: If the Executive Committee shall receive from any Pool
         Member written notification of a breach or an alleged breach of the
         Agreement or an Agreed Procedure involving EPFAL in its capacity as the
         Pool Funds Administrator it shall promptly notify EPFAL of receipt and
         shall send a copy of such notification to EPFAL.

11.2     Report: Within one month after receipt from the Executive Committee of
         any such notification as is referred to in sub-section 11.1 EPFAL shall
         prepare and submit to the Executive Committee a written report
         explaining in reasonable detail the circumstances which gave rise to,
         and the causes of, the breach (or, if it asserts that there has not
         been a breach, the reasons in support of that assertion), any remedial
         action taken by it and the consequences of such action.

          11.3 Quality  of Service Review:  Promptly  after  receipt of EPFAL's
               written  report referred  to in  sub-section  11.2 (or, if EPFAL
               shall fail to submit a report within the period  referred  to in
               that  sub-section,  promptly after  expiry of that  period)  the
               Executive   Committee  shall determine   whether  it  wishes  to
               commission   a  Quality  of Service   Review.   In  making  such
               determination the Executive Committee shall take into account the
               nature and seriousness of the notified breach (or alleged breach)
               and the said written  report (if any).  The  Executive  Committee
               shall notify EPFAL in writing of any such determination.

11.4     Consultants: If the Executive Committee shall determine to commission a
         Quality of Service Review, it shall instruct the Consultants to conduct
         such review and to report in writing (a "Review Report") to the
         Executive Committee and EPFAL.

11.5     Terms of engagement: The terms of engagement of the Consultants
         (including the objectives and scope of the work to be performed and the
         form of report to be issued) in respect of any Quality of Service
         Review shall (subject to sub-section 11.10) be determined by the
         Executive Committee in consultation with EPFAL.

          11.6 Review  Report:  EPFAL shall be given the opportunity to examine
               and comment on any factual details contained in any Review Report
               before it is submitted in final form.  Such final form shall, if
               the Consultants commissioned to carry out the Quality of Service
               Review shall think fit, take into  consideration the comments of
               EPFAL on any factual  details contained in the Review Report and
               include an  indication  of the response  and proposed  action of
               EPFAL.  A copy of the final  form of the Review Report  shall be
               sent to EPFAL and may be distributed  by the Executive Committee
               to Pool Members and the Director.

11.7     Implementation: Upon receipt of a Review Report, EPFAL shall (if so
         required by and in consultation with the Executive Committee) give
         effect to such recommendations, if any, as are set out in such report
         as soon as is reasonably practicable following the date of receipt by
         EPFAL of such report.

11.8     Arbitration: If EPFAL shall in good faith consider the recommendations
         in any Review Report to be impractical or inappropriate, the same shall
         be referred for resolution to arbitration in accordance with Clause 83.

          11.9 Access: For the purposes of any Review Report, EPFAL shall permit
               the Consultants access to the Funds Transfer Hardware,  the Funds
               Transfer  Software and all data used by EPFAL in the operation of
               the  Funds  Transfer  System  and to such of its  company  books,
               accounts and vouchers as relate to any of the items or categories
               of expenditure  which make up the PFA Operating  Costs and as are
               necessary for the  performance of the Quality of Service  Review.
               The  Consultants  shall also be entitled to require  from EPFAL's
               officers,  employees or agents such  information and explanations
               as are  necessary for the  performance  of the Quality of Service
               Review (but, for the avoidance of doubt,  the  Consultants  shall
               not have  access to any data  used,  information  held or records
               kept in relation to any Pool Member  without  such Pool  Member's
               prior written consent).

11.10    Confidentiality: The terms of engagement of the Consultants
         commissioned to carry out the Quality of Service Review shall include a
         written obligation of the Consultants and signed on their behalf in
         favour of EPFAL to keep confidential information made available by
         EPFAL to the Consultants or to which the Consultants have access for
         the purposes of the Quality of Service Review save that the Consultants
         shall be entitled to disclose any such information:-

         11.10.1    in the Review Report to the extent that the Consultants
                    reasonably consider appropriate (after consultation with
                    EPFAL) for the purposes of that report; or

         11.10.2   with the prior written consent of EPFAL; or

         11.10.3    in compliance with any requirement of law or pursuant to the
                    arbitration rules of the Electricity Arbitration Association
                    or pursuant to any judicial or other arbitral process or
                    tribunal having jurisdiction.

11.11    Additional rights: The provisions of this Section 11 are in addition to
         (and not in substitution for) and shall not prejudice any other rights
         which the Executive Committee or any Pool Member may have in respect of
         any such breach as is referred to in sub-section 11.1.

12.      AUDITORS' OPINION

         The Statement of Costs and Fees in respect of an entire PFA Accounting
         Period to be sent to the Executive Committee and all Pool Members
         pursuant to sub-section 10.1 shall be accompanied by a report from
         EPFAL's auditors considering whether in such auditors' opinion:-

          (a)  the  Statement of Costs and Fees is in  agreement  with  EPFAL's
               underlying books and records;

         (b)        PFA Operating Costs have been properly extracted from
                    EPFAL's audited financial statements; and

         (c)        the calculations in respect of the Annual Fee are in
                    accordance with the formulae set out in sub-section 8.2, and
                    are correct and in agreement with EPFAL's underlying books
                    and records.

13.      PFA ACCOUNTING PERIOD

         Each PFA Accounting Period shall be for a period of 12 months unless
         otherwise agreed in writing by EPFAL and the Executive Committee. If
         EPFAL wishes to change its accounting reference date it shall give due
         notice thereof to the Executive Committee which shall agree to enter
         into an amending agreement to the Agreement in order to give effect to
         the same at EPFAL's cost and expense.

14.      THE POOL FUNDS ADMINISTRATOR'S CHARGES

         EPFAL shall be entitled to recover from all Pool Members the charges
         set out in Sections 15 and 16 in respect of its operation of the Funds
         Transfer Business but, subject to Section 19, shall not be entitled to
         recover any other charges.

15.      AMOUNT

          15.1 Annual Charges: In respect of each PFA Accounting Period,  EPFAL
               shall be entitled to recover from Pool  Members  annual  charges
               equal to the aggregate of the following amounts:-

         15.1.1     PFA Operating Costs for the relevant PFA Accounting Period
                    (as identified by the Statement of Costs and Fees for such
                    period submitted pursuant to Section 10);

         15.1.2 the PFA Handling Charge, calculated on the total amount of the
PFA Operating Costs;

         15.1.3    the Annual Fee for such PFA Accounting Period; and

         15.1.4    the Bank Charges.

15.2     Recovery of Charges:

         15.2.1     The due proportion (determined in accordance with
                    sub-section 15.4) of EPFAL's annual charges referred to in
                    sub-section 15.1 payable by each Pool Member for each PFA
                    Accounting Period shall be recovered by monthly payments in
                    advance from each Pool Member or, where EPFAL and the Pool
                    Member otherwise agree, semi-annually in advance (calculated
                    on a best estimates and reasonable basis to be one twelfth
                    or, as the case may be, one half of the annual charges
                    payable by such Pool Member by reference to the most recent
                    PFA Budget).

         15.2.2     EPFAL shall advise each Pool Member of such amount by
                    invoice despatched to each Pool Member approximately 15 days
                    prior to the first day of each month or, as the case may be,
                    other period. Such invoice shall be paid no later than the
                    first day of such month or such other period. Each Pool
                    Member shall pay the amount advised in the relevant invoice
                    within 15 days after the invoice date.

         15.2.3     Each Pool Member shall pay all amounts due hereunder in
                    sterling in cleared funds in full without set off or
                    counterclaim, withholding or deduction of any kind
                    whatsoever but without prejudice to any other remedy. All
                    charges are exclusive of United Kingdom Value Added Tax
                    which shall be added to such charges, if applicable.

         15.2.4     In the event of any dispute regarding charges in any month
                    or period, no Pool Member may withhold payment of any
                    invoiced amount but may refer such dispute to arbitration in
                    accordance with Clause 83.

15.3     Interest on non-payment: If any amount due to EPFAL in its capacity as
         the Pool Funds Administrator is not received on the due date the Pool
         Member required to pay such amount shall pay interest to EPFAL on such
         amount from and including the date of default to the date of actual
         payment (as well after as before judgment) at the rate which is 4 per
         cent. per annum above the Base Rate from time to time of National
         Westminster Bank PLC during each period of default.

15.4     Payment of Charges: Each Pool Member shall pay its due proportion of
         EPFAL's charges for each PFA Accounting Period determined in accordance
         with Section 17.

          15.5 Amount of  Charges:  The amount of each  such  payment  shall be
               estimated initially by reference to the PFA Budget.  EPFAL shall
               adjust the amount of each such  payment by  reference to the most
               recent Statement of Costs and Fees and so as to take into account
               PFA Operating Costs, the PFA Handling Charge,  the Annual Fee and
               the Bank Charges during the previous PFA  Accounting  Period and
               anticipated costs in respect of the same  during the current PFA
               Accounting Period  and shall  recover  from or, as  appropriate,
               credit to each Pool Member its due proportion of the  difference
               between  actual and  anticipated PFA  Operating  Costs,  the PFA
               Handling Charge, the Annual Fee and the Bank Charges and payments
               received in respect of such costs, fees and charges in each case
               for the  previous  and the current PFA Accounting  Period.  Such
               recovery or credit shall take place by reference to an adjustment
               to each Pool  Member's  charges for the  current  PFA  Accounting
               Period.

          15.6 New and Former  Pool Members:  Any Pool  Member  which is a Pool
               Member  for part only of any PFA  Accounting  Period  shall  pay
               charges  on an interim  basis of such  amount  as the  Executive
               Committee  estimates to be  reasonable  for such PFA  Accounting
               Period  on the basis of the  allocation  of  charges  set out in
               Section  17.  Adjustments to  charges  on all Pool  Members as a
               result of  existing  Pool Members  leaving  or new Pool  Members
               joining  will be made following,  and  shall be set out in,  the
               Statement of Charges submitted  for the relevant PFA  Accounting
               Period  pursuant to sub-section  10.7 whereupon the Pool Members
               and/or  former  Pool Members  shall  be  required  to  pay  such
               additional amount or be entitled to such reimbursement as may be
               determined in  accordance with the Agreement by an adjustment to
               charges in the then current PFA Accounting Period.

16.      BANK CHARGES

         Bank Charges: EPFAL in its capacity as the Pool Funds Administrator
         shall collect from Pool Members the amounts they are obliged to pay by
         way of bank transaction charges towards the costs of the Pool Banker
         and all Settlement Banks ("Bank Charges") and shall account for the
         same to the Pool Banker and such Settlement Banks.

17.      ALLOCATION OF CHARGES

17.1     Total Sum Due: In respect of each PFA Accounting Period, the Total Sum
         Due shall be allocated amongst Pool Members in accordance with the
         following provisions of this Section 17.

17.2     Payment of Total Sum Due: Each Pool Member shall be obliged to pay the
         amount allocated to it in accordance with this sub-section. The total
         aggregate amount allocated to all Pool Members in respect of any PFA
         Accounting Period shall equal the Total Sum Due in respect of such PFA
         Accounting Period.

          17.3 Allocation of Total Sum Due: The Total Sum Due in respect of each
               PFA Accounting  Period shall be allocated amongst Pool Members in
               the following manner:-

         17.3.1     first, in order to recover the discrete costs referable to
                    each Pool Member during any PFA Accounting Period, the costs
                    incurred by EPFAL in its capacity as the Pool Funds
                    Administrator in complying with a request of such Pool
                    Member made pursuant to Clause 63.1.7 or sub-section 6.3 of
                    Schedule 11 which are directly referable to such Pool Member
                    shall, as far as possible, be allocated to such Pool Member;
                    and

          17.3.2  secondly,  100 per cent. of the  balance of the Total Sum Due
               during  any PFA  Accounting Period  not  recovered  pursuant  to
               paragraph  17.3.1  shall be allocated  amongst all Pool  Members
               during such PFA Accounting Period  according to their respective
               Contributory  Shares  or such PFA  Accounting  Period.  For this
               purpose,  each Pool Member's due proportion of the charges shall
               be assessed first by reference to the then latest  Contributory
               Shares of all Pool Members calculated by the Executive  Committee
               for the period and each part thereof to which such charges relate
               (or, if and to the extent that the charges relate to a period for
               which no such  calculation has yet been made, by reference to the
               then most recently calculated current  Contributory Shares of all
               Pool Members) and shall  thereafter  be  readjusted  from time to
               time for each day within the relevant period following changes to
               the  Contributory  Shares of Pool  Members for all or any part of
               such period or (as the case may be) following the  calculation of
               the Contributory Shares for such period.

17.4     Prima facie evidence: EPFAL's determination of the allocation of all
         costs during any PFA Accounting Period shall, in the absence of
         manifest error, be prima facie evidence thereof.

18.      ADJUSTMENT

         If the Executive Committee requests EPFAL to continue to serve as the
         Pool Funds Administrator pursuant to sub-section 3.1 to allow a
         successor to be appointed, EPFAL and the Executive Committee shall
         negotiate in good faith for a period not exceeding six weeks (or such
         longer period as EPFAL and the Executive Committee may agree in
         writing) with a view to agreeing a revision in the amount of the Base
         Sum to be used in the calculation of the Annual Fee for the duration of
         the additional period referred to in sub-section 3.1. If EPFAL and the
         Executive Committee shall agree to revise the amount of the Base Sum,
         such revision (and any consequential revision in the Annual Fee) shall
         take effect in accordance with the terms of that agreement. If no
         agreement is reached within the said negotiation period the Executive
         Committee or EPFAL may refer the dispute to arbitration pursuant to
         Clause 83. Pending any such agreement being reached or any such dispute
         being resolved by arbitration, EPFAL shall continue to serve as the
         Pool Funds Administrator for the additional period referred to in
         sub-section 3.1.

19.      ADDITIONAL COMPENSATION

19.1     General: A direction or instruction of the Executive Committee to EPFAL
         in its capacity as the Pool Funds Administrator shall not materially
         increase the duties, responsibilities or liabilities of EPFAL as the
         Pool Funds Administrator beyond those detailed in the Agreement as at
         the PFA Commencement Date and as detailed in the Agreed Procedures
         without proper compensation.

19.2     Compensation: If the Executive Committee gives a direction or
         instruction to EPFAL in its capacity as the Pool Funds Administrator
         which materially increases the duties, responsibilities or liabilities
         of EPFAL as the Pool Funds Administrator beyond those detailed in the
         Agreement as at the PFA Commencement Date and as detailed in the Agreed
         Procedures, then (subject to sub-section 19.3):-

         19.2.1     EPFAL shall carry out that direction or instruction unless
                    it has reasonable grounds for refusing so to do in which
                    event it shall forthwith notify the Executive Committee in
                    writing of its refusal and its reasons therefor (and, for
                    this purpose, an increase in the duties, responsibilities or
                    liabilities of EPFAL in its capacity as the Pool Funds
                    Administrator shall not of itself constitute reasonable
                    grounds);

         19.2.2     EPFAL and the Executive Committee shall negotiate in good
                    faith for a period not exceeding one month (or such longer
                    period as EPFAL and the Executive Committee may agree in
                    writing) with a view to agreeing an appropriate increase in
                    the Base Sum to reflect such increase in EPFAL's duties,
                    responsibilities and liabilities as the Pool Funds
                    Administrator;

         19.2.3     if EPFAL and the Executive Committee shall agree an increase
                    in the Base Sum, such increase shall take effect in
                    accordance with the terms of that agreement; and

         19.2.4     if there shall be any dispute as to whether that direction
                    or instruction does or did materially increase the duties,
                    responsibilities or liabilities of EPFAL as the Pool Funds
                    Administrator or whether EPFAL has reasonable grounds for
                    refusing to carry out that direction or instruction or if no
                    agreement is reached under paragraph 19.2.2, EPFAL or the
                    Executive Committee may refer the dispute to arbitration in
                    accordance with Clause 83.

          19.3 Reservation:  The  performance  by  EPFAL  of  any  direction  or
               instruction  of the Executive  Committee  shall not prevent EPFAL
               from later claiming that such direction or instruction materially
               increased its duties, responsibilities or liabilities as the Pool
               Funds  Administrator  provided  always  that  EPFAL  shall not be
               entitled  so to  claim  unless  it  gave  written  notice  to the
               Executive Committee promptly (and in any event within seven days)
               after first  becoming  aware that such  direction or  instruction
               materially  increased or was likely  materially  to increase such
               duties,  responsibilities or liabilities,  such notice to contain
               detailed reasons in support of why there has been or is likely to
               be such an increase.

20.      RECOVERY OF POOL ADMINISTRATION COSTS

20.1     Applicability:  The provisions of this Section 20 shall apply to:-

         20.1.1     the costs and expenses (within the extended meaning of that
                    expression in Clause 23.5 of the Agreement) of the Executive
                    Committee, its sub-committees and sub-groups and the
                    personnel referred to in Clause 17.2.1 together with the
                    liabilities (if any) associated with the termination of any
                    lease of any business accommodation required by the
                    Executive Committee, the Chief Executive, the
                    sub-committees, the sub-groups of such personnel;

         20.1.2     the costs and expenses of Committee Members and members of
                    the sub-committees and sub-groups of the Executive
                    Committee;

         20.1.3    the costs and expenses of the Pool Chairman;

         20.1.4 the remuneration,  costs and expenses of the personnel referred
               to in Clause 17.2.1 of the Agreement;

         20.1.5    the remuneration, costs and expenses of the Secretary;

         20.1.6    the costs and expenses of the Pool Auditor;

         20.1.7 the overhead costs of the Electricity Arbitration Association;

         20.1.8     all such other costs, fees, expenses, liabilities, losses
                    and other amounts which are required by the Agreement (or
                    any other agreement, document or arrangement prepared,
                    executed or entered into pursuant to the Agreement and for
                    this purpose approved by the Executive Committee) to be
                    dealt with "in accordance with Section 20 of Schedule 15" or
                    "in accordance with the PFA Accounting Procedure"; and

         20.1.9     any bad debts which are to be treated as Pool Administration
                    Costs pursuant to sub-section 20.7,

         (together "Pool Administration Costs").

20.2     Approval: The Executive Committee (or its delegate) shall approve all
         Pool Administration Costs in advance of submitting the same to EPFAL
         for payment.

20.3     Payment: Upon receipt of an invoice or other statement relating to Pool
         Administration Costs which has been approved by or on behalf of the
         Executive Committee in accordance with sub-section 20.2, EPFAL shall
         pay the amount stated in such invoice or other statement (together with
         Value Added Tax thereon, if applicable) to such person or persons as
         the Executive Committee (or its delegate) shall direct.

20.4     Recovery:

         20.4.1     EPFAL shall collect from Pool Members the amounts which they
                    are obliged to pay towards the Pool Administration Costs and
                    Pool Members shall be obliged to pay in accordance with
                    sub-section 20.6 their respective proportionate share of the
                    Pool Administration Costs (together with Value Added Tax
                    thereon, if applicable) against receipt of an invoice or
                    other statement therefor issued by EPFAL and otherwise in
                    accordance with paragraph 20.5.1;

         20.4.2     EPFAL shall collect from the Grid Operator, and the Grid
                    Operator shall be obliged to pay against receipt of an
                    invoice or other statement therefor issued by EPFAL and
                    otherwise in accordance with paragraph 20.5.2, 10 per cent.
                    of the annual overhead costs of the Electricity Arbitration
                    Association (together with Value Added Tax thereon, if
                    applicable).

20.5     Collection procedure:

         20.5.1     EPFAL shall arrange for collection from Pool Members of
                    their respective proportionate share of the Pool
                    Administration Costs in such manner as may be agreed by
                    EPFAL with the Executive Committee from time to time (which
                    may include collection in advance) and Pool Members shall
                    comply with such collection procedures and, in particular,
                    shall make payment within the time period prescribed by such
                    procedures. The provisions of paragraphs 15.2.3, 15.2.4 and
                    sub-section 15.3 shall in any event apply mutatis mutandis
                    in respect of all payments required to be made by Pool
                    Members pursuant to this Section 20.

         20.5.2     The Grid Operator shall make payment of the amount referred
                    to in paragraph 20.4.2 within 15 days after receipt of the
                    invoice or other statement therefor.

20.6     Proportionate Share: Pool Members shall contribute towards the Pool
         Administration Costs referable to a Quarter in the proportions which
         their respective Contributory Shares bear to each other during such
         Quarter.

20.7     Bad Debts: If in any PFA Accounting Period the Executive Committee
         recognises bad debts arising from a Pool Member's failure to pay its
         due proportion of Pool Administration Costs, the aggregate amount of
         those bad debts shall be carried forward to the immediately succeeding
         PFA Accounting Period and shall form part of the Pool Administration
         Costs for that PFA Accounting Period (spread evenly so far as
         practicable over the four Quarters thereof).



<PAGE>

                                     ANNEX 1

                  PFA Budget for the 1992 PFA Accounting Period

Category/Item                                                  Budgeted Cost
                                                                  (pound)000
Insurance costs                                                        200
Funds Transfer Hardware and Funds Transfer Software testing and
maintenance costs                                                       75
Audit fees                                                              75
Bank administration charges                                            100
Bad debt allowance                                                       0
                                                                =============
Total Sum Due                                                          450
                                                                =============


<PAGE>


                                     ANNEX 2

                         Pro-forma Statement of Charges

-------- -------------------- ---------------------------------- ----------
Name     Contributory Share   Period to which charges relate     Amount
-------- -------------------- ---------------------------------- ----------






<PAGE>


                                     ANNEX 3

                      Pro-forma Statement of Costs and Fees

                                            (A)
                               PFA Operating Costs

                                     Budgeted Cost for      Actual Out-Turn
                                       previous PFA         for previous PFA
                                     Accounting Period     Accounting Period
                                           (pound)000          (pound)000
Insurance costs
Funds Transfer Hardware
and Funds
Transfer Software
testing and maintenance
costs Audit fees Bank
administration charges Bad
debt allowance
                            
Total Sum Due
                             
<TABLE>
<CAPTION>
<S>                                 <C>                           <C> 


                                        (B)
                                          Annual Fee

Annual Fee (initial):             the Annual Fee for the [19  ] PFA Accounting Period was(pound)[           ].
Annual Fee (revisions):           the Annual Fee for the [19  ] PFA Accounting Period was revised as from
                                  [           ] to(pound)[         ] [and as from [            ] to
                            (pound)[         ]].
Calculation of Annual Fee (initial and revisions):

</TABLE>

<PAGE>


                                                    ANNEX 4

                                       Existing Funds Transfer Software

                                                    Part A

                                              Beneficially Owned

Pool Funds Transfer System (PFTS) PHASE 1

System Administration - User Guide (2/5/90)
Clerical Procedures (3/5/90)
Self Study Training Module (4/7/90)
Billing Sub-Project - Test Specification v.1.0 (29/3/90), v.1.1 (3/4/90) Test
Plan - Issue 1.1 (3/4/90) System Testing Log (4/4/90) Quality Assurance Plan
(16/5/90) Test Data (2/4/90) Test Schedules (3/4/90) Implementation Paper
Security Controls (22/3/90)


Pool Funds Transfer System (PFTS) PHASE 1.1

Test Plan Issue 1.0 (18/6/90)
Summary Test Report (13/7/90)

Pool Funds Transfer System (PFTS) PHASE 2.0

Documentation EPFAL PFTS Phase II User Manual Version 1 Documentation EPFAL PFTS
Phase II DBA Guide Version 1 Physical Design Documentation (volumes 1-4)
(22/6/90) Functional Specification - Appendices (April 1990) Addendum to the
Detailed Physical Design (May 1991)



<PAGE>


                                                    Part B

                                                   Licensed
                                        (VMS, unless otherwise stated)

VAX System

VMS Sun Account 3.5.14 purchased 1/7/90.  Licence No. 002505.

Documentation - Standard Reference/Installation/Getting started and Tutorial
manuals.

VMS v.5.4 issued 1/5/90.  Licence pack LP594621 s/no. 01440169.

PCSA/Decnet  v.4 End User  Node  issued  1/5/90.  Licence  pack  LP594624 s/no.
     01440172.

Lotus123 v.2.2 Server Version purchased 1/91 - upgraded to v.3.1+ 18/9/91. Note
     a VMS version.

Oracle RDBMS v.6 purchased 16/5/91 with full set of delivered documentation.

PC based Novell Network

Novell Advanced Network 286 v.2.15 Rec C purchased 3/90 via 3rd party. Full set
Netware documentation Reference Installation/Guides etc.

Sun Account v.3.5.3 purchased via 3rd party 3/90. Full set documentation
-Reference/Installation/Getting started and Tutorials.

Lotus 123 v.3.1 Server purchased 18/9/91. Upgrade from v.2.2 purchased 1/91.



<PAGE>


                                     ANNEX 5

                               Escrow Arrangements

1.1      EPFAL Escrow Agreement

         No later than 1st February, 1993 (or such later date as EPFAL and the
         Executive Committee may agree in writing) EPFAL in its capacity as the
         Pool Funds Administrator (for itself and on behalf of the Pool Members
         acting through the Executive Committee) shall enter into and deliver an
         escrow agreement (the "PFA Escrow Agreement") in the form to be agreed
         between EPFAL and the Executive Committee with a reputable escrow agent
         to be agreed between EPFAL and the Executive Committee (the "PFA
         Custodian"). Forthwith upon entering into the PFA Escrow Agreement
         EPFAL shall deposit with the PFA Custodian to the extent then in
         existence (and, if not in existence, as soon as possible after it comes
         into existence):-

         1.1.1      a copy of the source code and load (machine executable)
                    modules relating to all Funds Transfer Software beneficially
                    owned by it together with all job control language and
                    licensed software system tables, each in a machine readable
                    form and the source code and job control language in a hard
                    copy form;

         1.1.2     a copy of all related manuals and other associated
                  documentation, including:-

                    (a)   any user requirement documents, together with all
                          associated authorised change
                          requests;

                    (b)   any functional specification documents associated with
                          those documents described in sub-paragraph (a) above,
                          together with all authorised change requests
                          associated with the relevant functional specification;

                    (c)   to the extent available to EPFAL, any design
                          specification documents associated with those
                          documents described in sub-paragraphs (a) and (b)
                          above, together with all authorised change requests
                          associated with the relevant design specification;

                    (d)   any program and/or user guides prepared to assist in
                          the day-to-day operation and future development of the
                          computer programs (including records of test cases
                          together with the associated test input and output
                          data used for validation purposes);

                    (e)   any relevant test strategy schedules and acceptance
                          test schedules as specified for functional and
                          operational end to end testing;

                    (f)   any relevant test acceptance certificates and reports
                          for all tests recording comments and observations made
                          on the appropriate tests where such tests commissioned
                          by EPFAL;

                    (g)   any relevant client acceptance certificates and Pool
                          Auditor's reports, together with any reports recording
                          such clients' and the Pool Auditor's observations and
                          comments on the tests;

                    (h)   any relevant compilation or detailed operating
                          procedures required in connection with any of the
                          relevant paragraphs in this paragraph 1.1.2;

                    (i) all software licences for Funds Transfer Software
licensed to EPFAL; and

                    (j)   a list detailing all versions of Funds Transfer
                          Software licensed to EPFAL (including operating
                          systems and compilers) used in creating such versions
                          of the object code detailing the version numbers used
                          and any program temporary fixes or equivalent modes;

         1.1.3      a copy of all historical data (including all transaction,
                    reference and audit data and changes to standing data)
                    relating to the operations of EPFAL in its capacity as Pool
                    Funds Administrator;

         1.1.4      all the material referred to in sub-clauses 1.1.1 to 1.1.3
                    above is hereafter together referred to in this Annex 5 as
                    the "PFA Material".

1.2      Licensed Funds Transfer Software

         If, after consultation with EPFAL, the Executive Committee shall so
         request, EPFAL shall use its reasonable endeavours to procure that the
         owner of any Funds Transfer Software shall permit the deposit of such
         Funds Transfer Software licensed to EPFAL with the PFA Custodian or
         other reputable escrow agent on the terms of the Escrow Agreement or
         similar agreement approved by the Executive Committee.

1.3      Updating

         EPFAL shall ensure that the PFA Material deposited with the PFA
         Custodian is kept fully up-to-date and reflects all Modifications (as
         defined in the PFA Escrow Agreement) and shall deposit a copy of all
         Modifications with the PFA Custodian as soon as the same are available,
         all in accordance with the terms of and subject to the conditions of
         the PFA Escrow Agreement. EPFAL shall notify the Executive Committee
         promptly of the delivery of each Modification to the PFA Custodian.



<PAGE>


                                                  SCHEDULE 16

                                         Matters requiring consent of
                                      the Settlement System Administrator

The Settlement System  Administrator's  membership  of, and the procedures and
powers of, the Project Board

Terms of reference of project managers

Approval of project documents

Quality standards (including  design,  coding,  testing,   implementation  and
documentation)

Role of Pool Auditor in systems development

Components of project life cycle

Ownership and warranties on development

Housekeeping

The Settlement System Administrator's responsibilities and rights

Use of the Settlement System Administrator's resources

Implementability of systems   -   technical compatibility with existing system

                              -   use of the Settlement System Administrator's
                                  facilities for testing

                              -   parallel operation

                              -   migration into production

                              -   configuration control

                              -   implementation planning

Operability of systems        -   operational feasibility

                              -   operational support requirements

                              -   operational testing

                              -   interface design

                              -   performance

                              -   security

                              -   auditability

                              -   reliability

Maintainability of systems    -   design integrity

                              -   design documentation

                              -   adherence to design and coding standards

                              -   reliability

                              -   configuration control



<PAGE>


                                                  SCHEDULE 17

                                                 Trading Sites

                                                    Part A

                                                    General

1.   Introduction: A site shall be identified as a Trading Site for the purposes
     of this  Agreement in  accordance  with the  following  provisions  of this
     Schedule.

2.   Application:  A Party may apply to the Executive Committee for a site to be
     treated as a Trading Site by sending to the  Executive  Committee a written
     application  in the form  prescribed by the relevant  Agreed  Procedure (in
     this  Schedule,  a  "Trading  Site  Application")   stating  the  class  of
     application  and  containing  the other  information  and  supported by the
     documents  and  other  matters  referred  to in Part C and  signed by or on
     behalf of the Generator  concerned and the Supplier  concerned  where there
     exists a Supplier in respect of that site (together in this  Schedule,  the
     "Applicants").

3.       Decision: The Executive Committee shall consider any Trading Site
         Application within 45 days after receipt in accordance with the
         procedures set out in Part B and (subject to paragraph 5 of Part B)
         shall within that period make a determination as to whether the site
         the subject of such application (in this Schedule, the "Nominated
         Site") shall be treated as a Trading Site and shall promptly notify the
         Applicants and the Settlement System Administrator of its
         determination.

                                                    Part B

                                                  Procedures

1.       Classes: Every Trading Site Application shall state whether it is a
         Class 1, Class 2, Class 3 or Class 4 application and the Executive
         Committee shall consider a Trading Site Application by reference to the
         provisions set out in this Part B for the stated class (or, in the case
         of paragraph 5, as provided therein).

2.       Class 1: If the Trading Site Application shall state that it is a Class
         1 application then the Executive Committee shall determine from the
         Trading Site Application and supporting documentation and other matters
         (and any further evidence provided in accordance with paragraph 6) if
         the Nominated Site is a Power Station which is or is to be electrically
         configured in the same manner as is prescribed in one of the line
         diagrams contained in the relevant Agreed Procedure and fulfils all the
         conditions specified in such Agreed Procedure applicable to a Class 1
         application, in which event the Nominated Site shall be treated as a
         Trading Site.

3.       Class 2: If the Trading Site Application shall state that it is a Class
         2 application then the Executive Committee shall determine from the
         Trading Site Application and supporting documentation and other matters
         (and any further evidence provided in accordance with paragraph 6) if
         the generation and demand at the Nominated Site are electrically
         connected solely by Dedicated Assets, in which event the Nominated Site
         shall be treated as a Trading Site.

         In this paragraph, "Dedicated Assets" means assets and equipment which
         are used solely to connect electrically (a) the location at which the
         generation originates with (b) the location at which the demand is
         taken (and no other), and additionally satisfy one of the diagrammatic
         representations of Dedicated Assets contained in the relevant Agreed
         Procedure.

4.       Class 3: If the Trading Site Application shall state that it is a Class
         3 application then the Executive Committee shall determine from the
         Trading Site Application and supporting documentation and other matters
         (and any further evidence provided in accordance with paragraph 6) if
         the generation and demand at the Nominated Site are electrically
         connected by Contiguous Assets, in which event the Nominated Site shall
         be treated as a Trading Site.

         In this paragraph:-

         (a)        "Contiguous Assets" means those Specified Assets and
                    Equipment at a location which connect by one continuous
                    electrical connection the location at which the generation
                    originates with the location at which the demand is taken,
                    which Specified Assets and Equipment are all owned by the
                    Applicants and/or are Specified Assets and Equipment in
                    respect of which a contribution is or will be made by the
                    Applicants to the provision and installation or maintenance
                    and repair costs thereof or where such Specified Assets and
                    Equipment are already provided and installed, the
                    maintenance and repair costs thereof; and

         (b)        "Specified Assets and Equipment" means assets and equipment
                    identified and quoted in the Connection Agreement of either
                    Applicant where such assets and equipment include assets and
                    equipment identified and quoted in the Connection Agreements
                    relating to both Applicants which form part of the
                    continuous electrical connection for the purposes of (a)
                    above.

5. Class 4:

5.1  If  the  Trading  Site  Application  shall  state  that  it is a  Class  4
     application  or  if  the  Executive  Committee  shall  determine that  the
     Nominated  Site the subject of a Class 1, Class 2 or Class 3 Trading  Site
     Application does not satisfy the conditions specified in paragraph 2, 3 or
     (as the case may be) 4, the Executive  Committee shall  determine from the
     Trading Site  Application  and supporting  documentation and other matters
     (and any further evidence  provided in accordance with paragraph 6) if the
     Nominated  Site shall be treated as a Trading  Site  having  regard to the
     criteria set out in paragraph 5.2.

5.2      The criteria referred to in paragraph 5.1 are:-

         (a)        whether special circumstances existed before 30th March,
                    1990 which demonstrate to the reasonable satisfaction of the
                    Executive Committee that the generation and demand were
                    treated as being on a Trading Site;

         (b)        whether special circumstances existed before 11th December,
                    1991 which demonstrate to the reasonable satisfaction of the
                    Executive Committee that the generation and demand should
                    have been treated as on a Trading Site;

         (c)        whether, although not satisfying the conditions applicable
                    to a Class 1, Class 2 or Class 3 Trading Site Application,
                    if, to the reasonable satisfaction of the Executive
                    Committee, the Trading Site Application demonstrates
                    sufficient similarities with sites which would satisfy those
                    conditions such that it would be unreasonable not to treat
                    the Nominated Site as a Trading Site;

         (d)        whether there are any other facts or evidence in support of
                    the Trading Site Application which in the reasonable opinion
                    of the Executive Committee demonstrate that the Nominated
                    Site ought to be treated as a Trading Site.

6.       Further evidence: The Executive Committee may request an Applicant to
         produce such further evidence as the Executive Committee may reasonably
         require in support of its Trading Site Application before the Executive
         Committee makes any determination as to whether the Nominated Site is
         to be treated as a Trading Site, and the Executive Committee shall not
         be bound to make any determination on the issue of whether the
         Nominated Site is a Trading Site pending receipt of such further
         evidence.

7.       Majorities: Any determination of the Executive Committee in favour of
         treating a Nominated Site as a Trading Site shall require a simple
         majority of the votes cast by Committee Members at the relevant meeting
         provided that in the case of a Trading Site Application which falls to
         be considered under paragraph 5 the necessary majority shall be 75 per
         cent. of all the votes cast by Committee Members.

8.       Effect of determination: If the Executive Committee shall determine
         pursuant to paragraph 2, 3, 4 or (as the case may be) 5 that a
         Nominated Site is a Trading Site all metered values of all meters
         associated with the Nominated Site and identified in the Trading Site
         Application shall be aggregated in accordance with the provisions of
         sub-section 3.3 of, and paragraph 2F of Appendix 6 to, Schedule 9.



<PAGE>


                                                    Part C

                                           Trading Site Applications

1.       Every Trading Site Application shall contain the following 
          information:-

         (a)       the name and address of the Applicants;

         (b)       a full description of the Nominated Site;

         (c)        a full description of the Metering Systems (if any) located
                    or to be located at the Nominated Site and of their location
                    together with a full description of the points at which all
                    electricity flows relative to the Nominated Site are to be
                    measured;

         (d)  such other information as may be specified in the relevant Agreed
               Procedure; and

         (e) such other information as the Applicants shall consider relevant to
their application.

2. Every Trading Site Application shall be accompanied by the following
documents and other matters:-

         (a)        line diagrams showing the electrical connections and energy
                    flows at the Nominated Site and the location of Metering
                    Systems (if any) and evidence demonstrating that the assets
                    and equipment electrically connecting the generation and
                    demand are capable of transmitting or distributing the
                    quantity of electricity to be transmitted or distributed to
                    the Nominated Site;

         (b)        confirmation from the Settlement System Administrator,
                    having duly notified the Grid Operator, that it is satisfied
                    that the metering arrangements at the Nominated Site are
                    compatible with the operation of Settlement;

         (c)        in the case of a Class 2 or Class 3 Trading Site
                    Application, other evidence demonstrating the existence of
                    Dedicated Assets or (as the case may be) Contiguous Assets
                    (including any Connection Agreements or relevant parts
                    thereof).



<PAGE>


                                                    Part D

                                             Additional Provisions

1.                  (a) The Settlement System Administrator, the Grid Operator
                    and each Public Electricity Supplier shall co-operate with
                    the Applicants (insofar as is reasonable) to enable them to
                    prepare and deliver a Trading Site Application by making
                    available (upon reasonable notice) line diagrams relevant to
                    the Nominated Site.

         (b)        The Settlement System Administrator and the Grid Operator
                    shall review the Metering Systems relative to the Nominated
                    Site for the purposes of issuing confirmations required by
                    the Executive Committee and, where such confirmations are
                    considered appropriate by the Settlement System
                    Administrator and the Grid Operator, shall issue the
                    requisite confirmations.

         (c)        In relation to (a) and (b), the reasonable costs and
                    expenses of the Settlement System Administrator, the Grid
                    Operator and each relevant Public Electricity Supplier shall
                    be borne by the Applicants.

2.       A Nominated Site which the Executive Committee resolves should be
         treated as a Trading Site (or is otherwise to be so treated) shall
         cease to be treated as a Trading Site if the Executive Committee
         reasonably determines that the site no longer fulfils the conditions
         upon which the approval for it being so treated was based. The
         Generator Applicant shall forthwith notify the Executive Committee if
         the site no longer fulfils such conditions.





<PAGE>


                                                  SCHEDULE 18

                                  The Ancillary Services Accounting Procedure

1.       DEFINITIONS AND INTERPRETATION

1.1      Definitions: In this Schedule, unless the context otherwise requires,
         the words and expressions set out in this Section 1.1 shall bear the
         meanings respectively set out herein:-

         "ASP Budget"  means any  budget  prepared  by the  Ancillary  Services
          Provider pursuant to Section 2.1;

         "Audit Adjustments" means the aggregate value of all changes in the
         Cost Base required to be taken into account by the Ancillary Services
         Provider during any Accounting Period in order to give effect to the
         conclusions resulting from an audit commissioned pursuant to Clause
         51.5;

         "Capital Expenditure" means, in respect of any Accounting Period,
         expenditure by the Ancillary Services Provider on fixed assets required
         for the purposes of the Ancillary Services Business including assets
         acquired on lease which are required by generally accepted accounting
         principles to be capitalised;

         "Cost Base" means, in respect of any Accounting Period, Total Operating
         Costs for such period less Depreciation during such period;

         "Depreciation" means, in respect of any Accounting Period, the
         aggregate value of all depreciation on assets owned or employed by the
         Ancillary Services Provider in the Ancillary Services Business, such
         assets being depreciated in accordance with the accounting policies of
         the Ancillary Services Provider for such period as stated in the
         audited accounts of the Ancillary Services Provider for such period and
         treated as depreciation in accordance with the terms of the Agreement;

         "Efficiencies" means, in respect of any Accounting Period, the amount
         (if any) by which the Cost Base in such Accounting Period is less than
         the Cost Base in the immediately preceding Accounting Period (the
         "First Period") after adjustments on a pound for pound basis to any
         difference between such two Cost Bases to offset movements from the
         Cost Base in the First Period due to the Rate of Inflation, Audit
         Adjustments and any other matters beyond the control of the Ancillary
         Services Provider and changes in the accounting principles or practices
         of the Ancillary Services Provider made during the Accounting Period in
         question;

          "Executive"  means those   members  of  the   Executive   Committee
           representing Suppliers;

         "Individual Limit" means, in respect of Capital Expenditure in any
         Accounting Period, (pound)25,000, as the same may be increased from the
         Effective Date by the Rate of Inflation;

         "Margin" means:-

         (i)        in respect of each of the first three Accounting Periods,
                    such amount as when added to the Total Operating Costs
                    (excluding for this purpose any payments made by the
                    Ancillary Services Provider for Ancillary Services, and the
                    price of any goods and services referred to in Section 6.2
                    if the price exceeds the aggregate cost of supplying such
                    goods and services actually incurred by the relevant
                    affiliate of, or other division of, the company of which the
                    Ancillary Services Provider is a division) in the relevant
                    Accounting Period is equal to 10 per cent. of the sum of
                    such amount and such Total Operating Costs; and

         (ii)       thereafter, such margin as may be agreed between the
                    Executive and the Ancillary Services Provider (or, in
                    default of agreement, such margin as is reasonable in all
                    the circumstances as determined pursuant to Clause 83);

         "Overall Limit" means, in respect of Capital Expenditure in any
         Accounting Period, (pound)100,000, as the same may be increased from
         the Effective Date by the Rate of Inflation;

         "Statement of Charges" means the statement of charges required to be
         submitted by the Ancillary Services Provider pursuant to Section 2.8 in
         the form or substantially in the form set out in Part 3 of the Annex or
         such other form as the Executive and the Ancillary Services Provider
         may agree showing the total charges to be made by the Ancillary
         Services Provider on all Suppliers in accordance with this Schedule;

         "Statement of Costs" means the statement of costs required to be
         submitted by the Ancillary Services Provider pursuant to Section 2.4
         setting out the actual and accrued expenditure incurred by the
         Ancillary Services Provider in any period which shall be substantially
         in the form set out in Part 2 of the Annex or such other form as the
         Executive and the Ancillary Services Provider may agree; and

          "Total Operating Costs" means, in respect of any Accounting Period or
               part thereof:-

         (i)        the total expenditure properly incurred or accrued by or on
                    behalf of the Ancillary Services Provider in operating the
                    Ancillary Services Business in such period or part thereof
                    (other than that referred to in (ii) and (iii) below); plus

         (ii)       all Depreciation in such period on all assets owned and
                    employed by the Ancillary Services Provider in the Ancillary
                    Services Business; plus

         (iii)      all other expenditure properly incurred or accrued during
                    such period which, under this Schedule, is permitted to be
                    included in any Statement of Costs; plus

         (iv)       Efficiencies which are permitted to be included in any
                    Statement of Costs pursuant to Section 5.4.

1.2      Interpretation:

         1.2.1      In this Schedule, except where the context otherwise
                    requires, references to a particular Section, sub-section or
                    paragraph or to the Annex shall be a reference to that
                    Section, sub-section or paragraph of, or the Annex to, this
                    Schedule.

         1.2.2      In this Schedule the expression "Rate of Inflation" shall
                    have the meaning assigned to it in Schedule 4.

2.       ASP BUDGETS, STATEMENTS OF COSTS AND STATEMENTS OF CHARGES

         Budgets

2.1      ASP Budgets: Not earlier than six nor later than three months prior to
         the first day of each Accounting Period (other than the first) the
         Ancillary Services Provider shall prepare and submit to the Suppliers
         an ASP Budget for such Accounting Period. Such ASP Budget shall be
         indicative only but prepared on a best estimates basis. The ASP Budget
         for the first Accounting Period shall be that set out in Part 1 of the
         Annex.

2.2      Contents of ASP Budgets: Each ASP Budget (other than the first) shall
         compare each item or category of budgeted expenditure shown therein
         with the forecast expenditure in respect of such item or category for
         the remainder of the then current Accounting Period and report any
         salient differences between any such forecast expenditure and the
         budgeted expenditure in respect of each such item or category in the
         immediately preceding ASP Budget.

2.3      Form of ASP Budgets: Each ASP Budget shall be substantially in the form
         of that set out in Part 1 of the Annex (or in such other form as the
         Ancillary Services Provider and the Executive may from time to time
         agree).

         Statement of Costs

          2.4  Statement of Costs: No later than one month following the date in
               any Accounting  Period of the publication of the audited accounts
               for the Ancillary  Services Business for the previous Accounting
               Period, the Ancillary Services Provider shall prepare and submit
               to  each Supplier  a  Statement  of  Costs  for  such  previous
               Accounting Period. The audited accounts of the Ancillary Services
               Provider and the auditors'  management  letter,  to the extent it
               relates to the  economy,  efficiency  and  effectiveness  of the
               Ancillary Services  Provider in carrying  out its duties,  shall
               accompany each  Statement  of Costs for each  entire  Accounting
               Period.

2.5      Form of Statement of Costs: The Statement of Costs for any Accounting
         Period shall attribute actual expenditure for such period against,
         inter alia, each of the categories and sub-categories set out in the
         corresponding ASP Budget for such Accounting Period.

          2.6  Accompanying  Report:  Each ASP Budget and Statement of Costs for
               an entire Accounting Period submitted to the Suppliers  pursuant
               to Section 2.1 or 2.4 shall be supported  by a written  report of
               the Ancillary Services Provider  commenting in reasonable detail
               upon the  matters comprised  in the  categories  of  expenditure
               included  in such ASP  Budget  or  Statement  of  Costs  drawing
               attention to and giving  reasons for any unusual  commitment  or
               item of  expenditure  proposed  to be  incurred or which has been
               incurred and, in the case of a Statement of Costs, explaining the
               difference (if material) between:-

         2.6.1     the amount set against each item or category therein; and

         2.6.2      the amount set against each corresponding item or category
                    in the immediately preceding ASP Budget.

          2.7  Accounting  Practices:  Each ASP  Budget and Statement  of Costs
               shall be prepared on the basis of the  accounting principles and
               practices used to draw up the most recent audited accounts of the
               Ancillary  Services  Provider and  consistently applied.  If any
               Statement  of  Costs  for  an  entire  Accounting Period  is not
               prepared on such basis,  the Ancillary  Services Provider  shall
               prepare and submit to the  Suppliers  a pro-forma set of audited
               accounts  of the  Ancillary  Services  Provider for such  entire
               Accounting   Period  which  is  prepared  on  the basis  of  the
               accounting  principles and practices used to prepare the relevant
               Statement of Costs. Any changes in the accounting principles and
               practices or their method of application used to prepare audited
               accounts of the Ancillary Services Provider shall be noted in the
               next following ASP Budget or Statement of Costs,  as the case may
               be.

2.8 Statement of Charges: A Statement of Charges shall accompany each Statement
of Costs.

2.9      Bad debts: The total cost of any bad debts of the Ancillary Services
         Provider arising in any Accounting Period may be taken into account by
         the Ancillary Services Provider in its Statement of Costs for such
         Accounting Period or any subsequent Accounting Period and accordingly
         recovered as part of Total Operating Costs for any such Accounting
         Period.

3.       AUDITORS' OPINION

         The Statement of Costs to be sent to the Suppliers pursuant to Section
         2.4 shall be accompanied by a report from the auditors of the Ancillary
         Services Provider considering whether in such auditors' opinion:-

         3.1        the Statement of Costs is in agreement with the underlying
                    books and records of the Ancillary Services Provider; and

         3.2        Total Operating Costs and Depreciation have been properly
                    extracted from the audited financial statements.

         Such auditors' report shall also contain such other matters as the
         Executive may agree with the auditors of the Ancillary Services
         Provider.

4.       ACCOUNTING PERIOD

         The first Accounting Period shall run from (and including) 31st March,
         1990 to (and including) 31st March, 1991. Thereafter, unless agreed by
         the Ancillary Services Provider and the Executive each Accounting
         Period shall be for a period of twelve months. In the event that the
         Ancillary Services Provider wishes to change its accounting reference
         date it shall give due notice thereof to the Executive which shall
         agree to enter into an amending agreement to give effect to the same at
         the cost and expense of the Ancillary Services Provider.

5.       ANCILLARY SERVICES PROVIDER'S CHARGES

5.1      Ancillary Services Provider's charges: In respect of each Accounting
         Period, the Ancillary Services Provider shall be entitled to recover
         from the Grid Operator in addition to the cost of Ancillary Services
         the aggregate of:-

         5.1.1      Total Operating Costs for the relevant Accounting Period (as
                    identified by the Statement of Costs for such Accounting
                    Period to be submitted pursuant to Section 2.4); and

         5.1.2     the Margin.

5.2      Recovery of Charges: The Ancillary Services Provider's charges in
         respect of any Accounting Period shall be recovered from the Grid
         Operator on a daily basis in accordance with the Pool Rules and by
         reference to the allocation provided therein by:-

         5.2.1      estimating a daily amount necessary to recover the charge by
                    reference to the ASP Budget and, where appropriate, any
                    under- or over-recovery in respect of any previous
                    Accounting Period; and

         5.2.2     adjusting that  amount  by  reference  to  any  subsequent
                    Statement of Costs.

5.3      Revision of Estimates: If the Ancillary Services Provider reasonably
         believes that the amount which will be recovered under Section 5.2 is
         likely to be 10 per cent. more or less than the amount to which it is
         entitled under Section 5.1 it shall, with the consent of the Executive
         (such consent not to be unreasonably withheld or delayed), revise as
         appropriate the estimate made in accordance with Section 5.2.

               5.4  Sharing of Efficiency: The Ancillary Services Provider shall
                    be  entitled  to  the  benefit  of  all  Efficiencies   and,
                    accordingly,  to  charge  Grid  Operator  the  amount of all
                    Efficiencies by including them in ASP Budgets and Statements
                    of  Cost  in  the  following  manner.   The  amount  of  any
                    Efficiency   arising  in  any  Accounting  Period  shall  be
                    identified  in the  Statement  of Costs for such  Accounting
                    Period submitted  pursuant to Section 2.4 and shall be taken
                    into  account  in  the   Statement  of  Costs  for  the  two
                    successive Accounting Periods thereafter.  Accordingly,  the
                    amount of any Efficiency may be included in any Statement of
                    Costs for the two Accounting Periods following that in which
                    the Efficiency is identified.  In the Statement of Costs for
                    the third  consecutive  Accounting  Period and all following
                    Accounting  Periods thereafter the amount of such Efficiency
                    shall be eliminated.

6.       CORPORATE OVERHEAD CHARGES AND PURCHASES

               6.1  Corporate Overhead Charges:  The Ancillary Services Business
                    may take into  account  in any ASP  Budget or  Statement  of
                    Costs  (and  consequently  its  charges  to  Suppliers)  all
                    corporate overhead charges payable by the Ancillary Services
                    Provider  to its  immediate  holding  company  or any  other
                    division of the  company of which it is a division  provided
                    such  corporate  overhead  charges are reasonable and in due
                    proportion  to the  corporate  overhead  charges  payable by
                    other  affiliates  of the  Ancillary  Services  Provider  or
                    divisions  of the  company of which the  Ancillary  Services
                    Provider is a division as reported  upon by the  auditors of
                    the Ancillary Services Provider.

6.2      Goods or services: Purchases of goods or services from affiliates of
         the Ancillary Services Provider shall be on arm's length terms.

7.       FUEL SECURITY

         Except to the extent recoverable under any other provision of this
         Schedule, any additional costs necessarily incurred by the Ancillary
         Services Provider in running the Ancillary Services Business during a
         Security Period shall be regarded as beyond the control of the
         Ancillary Services Provider, which may recover the same in full from
         Suppliers provided such costs have been verified as additional costs by
         the auditors of the Ancillary Services Provider. Suppliers shall be
         obliged to pay the actual amount of such costs and expenses.

8.       CAPITAL EXPENDITURE

8.1      Capital Expenditure (1): The following provisions apply to Capital
         Expenditure by the Ancillary Services Provider in respect of the
         Ancillary Services Business:-

         8.1.1      save as provided below, Capital Expenditure by the Ancillary
                    Services Provider which may be recovered by Depreciation
                    charged to Suppliers shall require the prior approval of the
                    Executive in writing, such approval to take into account an
                    appropriate sharing of the Efficiencies arising from such
                    Capital Expenditure;

         8.1.2      Capital Expenditure which may be recovered by Depreciation
                    charged to Suppliers specified in any ASP Budget shall be
                    regarded as approved by the Executive unless the Executive
                    notifies the Ancillary Services Provider to the contrary
                    within one month after receipt of such ASP Budget;

         8.1.3      in any Accounting Period the Ancillary Services Provider may
                    incur Capital Expenditure which may be recovered by
                    Depreciation charged to Suppliers without the need to
                    consult or obtain the approval of the Suppliers up to a
                    maximum of the Individual Limit for each item of Capital
                    Expenditure and a maximum of the Overall Limit for all items
                    of Capital Expenditure and, in the event of the Ancillary
                    Services Provider incurring such Capital Expenditure, it
                    shall notify the Executive as soon as practicable
                    thereafter; and

         8.1.4      the Ancillary Services Provider shall be entitled to incur
                    Capital Expenditure which may be recovered by Depreciation
                    charged to Suppliers of any amount without the need to
                    obtain the approval of the Executive in circumstances
                    where:-

                    (a)   the Ancillary Services Provider would be in breach of
                          its duties under the NGC Transmission Licence unless
                          such Capital Expenditure were incurred; and

                    (b)   it has not reached agreement with the Executive on
                          such Capital Expenditure within a reasonable period of
                          time.

               8.2  Capital  Expenditure  (2):  Capital  Expenditure not falling
                    within  Section  8.1 may not be charged as  Depreciation  to
                    Suppliers.



<PAGE>


                                                     ANNEX

                                                    Part 1

                                  ASP Budget for the First Accounting Period

                                                     (pound)M
Purchases of Ancillary Services                     85.00
Local Overheads                                      0.81
NGC Corporate Management Charge                      0.48
NGC System Operations Charge                         0.25
NGC Settlement Systems Charge                        0.25
                                                  =============
                                                    86.79
                                                  =============


<PAGE>


                                                    Part 2

                                         Pro-forma Statement of Costs



                                                          (pound)M
Purchases of Ancillary Services
Local Overheads
NGC Corporate Management Charge
NGC System Operations Charge
NGC Settlement Systems Charge


<PAGE>


                                                    Part 3

                                        Pro-forma Statement of Charges



-------- ---------------------------------------------------------------------
 Name    Contributory Share      Period to which charges relate    Amount
-------- ----------------------------------------------------------------------








<PAGE>


                                                  SCHEDULE 19

                                            Objective and Scope of
                                      the Scheduling and Despatch Review

1.   Objective:  The objective of the Scheduling and Despatch  Review will be to
     establish that:-

     1.1  scheduling  and  despatch  is  carried  out  in  accordance  with the
          Scheduling and Despatch Code; and

     1.2  information  is entered  into  PORTHOLE  in  accordance with the Pool
          Rules.

2.       Scope: The scope of the review will be to:-

         2.1        review internal scheduling and despatch operating procedures
                    for consistency with the Scheduling and Despatch Code;

         2.2        review the internal checks that the Grid Operator has
                    established to ensure that the operation of scheduling and
                    despatch has been carried out in accordance with the
                    procedures referred to in Section 2.1;

          2.3  perform  compliance  testing  of the  operation  of the  internal
               checks referred to in Section 2.2;

          2.4  review the operating procedures in relation to the use of the BPS
               GOAL program, including:-

                   (a)    controls over the input of data and the output of data
                          to establish that they are appropriate to ensure an
                          adequate level of control; and

                   (b)    procedures for the retention of records of the nature
                          and extent of and reasons for any manual adjustments
                          to BPS GOAL output or where BPS GOAL is run using
                          non-standard parameters, for consistency with the
                          Scheduling and Despatch Code;

          2.5  perform compliance testing of the operating  procedures referred
               to in Section 2.4;

         2.6        review the operating procedures referred to in Sections 2.1,
                    2.2 and 2.4 to establish that there is no bias in favour of
                    or against any particular Pool Member on the part of the
                    Grid Operator;

         2.7        review the operating procedures relating to the recording of
                    despatch instructions, availability declarations, generation
                    offer prices and the application of reason codes and the
                    entry of data into PORTHOLE for consistency with the Pool
                    Rules;

          2.8  perform compliance testing of the operating  procedures referred
               to in Section 2.7;

         2.9        review the operating procedures referred to in Section 2.1
                    to establish that in the call for the delivery of Ancillary
                    Services by the Grid Operator there is no bias in favour of
                    or against any particular Pool Member on the part of the
                    Grid Operator;

         2.10      review the call for the delivery of Ancillary Services;

         2.11      compare the generation  schedule forecast demand with actual
                   demand; and

         2.12       review the generation schedule forecast demand for
                    consistency with Section OC1 of the Grid Code.





<PAGE>


                                                  SCHEDULE 20

                                             Accountable Interest

1.       Definitions: In this Schedule:-

          "Generating Unit" means any Generating  Unit whether or not situate in
               England or Wales;

         "Operator" means, in relation to any Generating Unit, the Authorised
         Electricity Operator or any other person for the time being responsible
         (under contract or otherwise) for the generation or sale of electricity
         from such unit;

         "Own Generating Unit" means any Generating Unit the majority beneficial
         ownership of which is vested in the person or an affiliate of the
         person or in respect of which the person or an affiliate of the person
         is the Operator; and

         "Underlying Interest" means, in relation to any Generating Unit, any
         interest arising by reason of the person or affiliate or any related
         undertaking of the person or affiliate (whether alone or with others):
          

          (a)  holding or being entitled  to acquire an interest in the land on
               which the Generating Unit, or any part thereof, is built;

         (b)        being in partnership with or party to any arrangement for
                    sharing of profits or cost-savings or any joint venture with
                    any person holding or entitled to acquire an interest in the
                    land on which the Generating Unit, or any part thereof, is
                    built;

         (c)        owning any electrical plant situated on or operated as a
                    unit with the Generating Unit (and for such purpose, any
                    electrical plant or equipment to the possession of which the
                    person, affiliate or related undertaking is entitled under
                    any agreement for hire, hire purchase, conditional sale or
                    loan shall be deemed to be owned by such person) provided
                    always that such electrical plant shall not be deemed to be
                    operated as a unit with any Generating Unit by reason only
                    of connections with any other system for the transmission or
                    distribution of electricity; or

         (d)        having obtained any consent under section 36 of the Act
                    required for the construction or extension of the Generating
                    Unit or any part thereof.

2.       Accountable Interests: The rules for determining whether or not any
         person has an Accountable Interest in any Generating Unit and, if so,
         the MW in respect of which that person shall be treated as having such
         an Accountable Interest shall, subject to the following sections of
         this Schedule, be ascertained in such manner as the Executive Committee
         with the approval of the Director may determine being the appropriate
         share (namely the share representing that person's economic interest
         therein) in the declared net capacity of any Generating Unit.

3.       Net capacity: There shall be attributed to the person the whole of the
         declared net capacity represented by any Own Generating Unit.

4.       Determination of Accountable Interest: For the purposes of this
         Schedule and subject to Section 5, the person shall have an Accountable
         Interest in a Generating Unit (not being an Own Generating Unit) in
         circumstances where:-

          4.1  the  Operator  is a  related  undertaking  of the person  or any
               affiliate of the person; or

         4.2        the person or any affiliate of the person is in partnership
                    with or is party to any arrangement for sharing profits or
                    cost-savings or any joint venture with the Operator or with
                    any third party with regard to the Operator; or

         4.3  the  person or any  affiliate  of the  person  has  (directly  or
               indirectly):-

                   (a)  any beneficial  shareholding  interest in the Operator;
                         or

                    (b)  any  beneficial  Underlying Interest in the Generating
                         Unit; or

                   (c)    provided or agreed to provide finance to the Operator
                          otherwise than on arm's length terms; or

                   (d)    provided or agreed to provide, or has determined or is
                          responsible for determining the price (or other terms
                          affecting the financial value) of, the fuel used in
                          the Generating Unit.

5.   No  Accountable  Interest:  The  person shall  not be  deemed  to  have an
     Accountable Interest in a Generating Unit where:-

         5.1        such Generating Unit is owned and operated by NGC under a
                    licence granted pursuant to section 6 of the Act; or

         5.2        the person's interest arises wholly under the terms of the
                    Agreement or under any electricity purchase or sale
                    contract; or

         5.3        the person's interest arises solely by virtue of
                    arrangements for the sharing with the Operator of any
                    Generating Unit of the risks associated with changes in the
                    price of fuel used by the Generating Unit during the term of
                    any contract for the provision of electricity from the
                    Generating Unit to the person.

6.       Amount of Capacity: The Pool Member submitting an Admission Application
         shall provide to the Executive Committee and the Director a statement
         identifying (in such detail and with such supporting documents or
         information as the Executive Committee or the Director may require) the
         amount of capacity in MW represented by the Registered Capacity of
         Generating Units in which any person who has an Accountable Interest in
         the Generating Unit which is the subject of the Admission Application,
         including the Pool Member, has an Accountable Interest, as at the date
         of the statement.

7.       Alternative Basis of Calculations: Where the Executive Committee or the
         Director is satisfied that the basis of calculation used by the Pool
         Member is not in conformity with this Schedule, the Executive Committee
         or the Director may issue directions specifying an alternative basis of
         calculation, and the basis of calculation provided by the Pool Member
         shall be adjusted accordingly with effect from the date of issue of the
         directions or such other date as may be specified in the directions.



<PAGE>


                                                  SCHEDULE 21

                                            METER OPERATOR SCHEDULE

                                                    PART 1

                                                  PRELIMINARY

1.       INTRODUCTION

1.1  Definitions  and  constructions:  The Parties and Meter  Operator  Parties
     expressly  agree and  acknowledge that the words  and  expressions  listed
     below,  and which are used for the purposes of this Schedule, shall not be
     capable of amendment  without the consent of Meter  Operator Parties,  but
     that any word or expression which is not so listed in this Schedule but is
     a definition  for the purposes of this Agreement and is used primarily for
     parts  of this  Agreement  other  than this  Schedule  shall,  subject  to
     paragraph 2.2.3 and without prejudice to paragraph 2.5, be capable of being
     amended  without such consent notwithstanding  that it may also be used in
     this Schedule:-

         Active Energy;
         Active Power;
         Agreed Procedure;
         Agreed Procedures Index;
         Code of Practice;
         Communications Equipment;
         Embedded Non-Franchise Site;
         Equipment Owner;
         ERS;
         ERS First Tier Customer;
         Exports;
         FMS Codes of Practice;
         FMS Date;
         FMS Metering Equipment;
         FMS Trading Date;
         Force Majeure;
         Generic Dispensations;
         Good Industry Practice;
         Host PES;
         Imports;
         Invitee;
         Licence Restricted Party;
         Meter;
         Metering Equipment;
         Metering System;
         Meter Operator Admission Application; Meter Operator Party; Meter
         Operator Party Accession Agreement; Meter Operator Party Resignation
         Notice; MVAr Metering Equipment; New Meter Operator Party; Non-Pooled
         Generator Operator; Outstation; Potential Operator; Reactive Energy;
         Reactive Power; Register; Registrant; Second Tier Customer; Substantial
         Part; Synopsis of Metering Codes; Tariff or relevant Tariff; Tariff
         Operator; and Third Parties.

1.2      Interpretation: Wherever a reference is made in this Schedule to a
         Meter Operator Party or to an Operator, such reference shall be to a
         Meter Operator Party in its capacity as such Meter Operator Party or,
         where the context so requires, to an Operator in its capacity as
         Operator, but shall not refer to the person which is that Meter
         Operator Party or Operator in, and shall be in all cases without
         prejudice to, any other capacity in which such person may be party to
         this Agreement.

1.3      Agreed Procedures and Codes of Practice:

         1.3.1      Each of the Parties and each of the Meter Operator Parties
                    undertakes to comply with the Agreed Procedures and the
                    Codes of Practice insofar as applicable to it.

         1.3.2      The Settlement System Administrator shall retain copies of
                    all Agreed Procedures and Codes of Practice and of any other
                    documentation referred to in such Agreed Procedures or Codes
                    of Practice and shall provide a copy of all or any thereof
                    to any Party or Meter Operator Party on request and may make
                    a reasonable charge for such provision.

         1.3.3      Notwithstanding the absence from time to time of its express
                    consent, each Meter Operator Party hereby expressly
                    acknowledges and agrees to be bound by the provisions
                    contained in this Agreement which govern the method by which
                    all Agreed Procedures and Codes of Practice may be, from
                    time to time, changed or substituted and which determine the
                    meaning in any given context of the terms the "relevant
                    Agreed Procedure" and the "relevant Code of Practice".

1.4      Agreed Procedures and Codes of Practice: Referral to the Director:

         1.4.1      Without prejudice to paragraph 1.3.3, where any Meter
                    Operator Party considers that any change proposed to be made
                    to any Agreed Procedure or to any Code of Practice would
                    have a material adverse effect on its rights and liabilities
                    as a registered Operator, a Potential Operator or Tariff
                    Operator as set out in this Schedule (the "proposed
                    change"),
             
                    it shall have the right in the prescribed time limits to
                    refer the matter in writing to the Director (such referral
                    to be copied to the Executive Committee) who shall
                    determine, taking into account the views expressed by the
                    Executive Committee and any Parties referred to below in
                    this paragraph, whether such proposed change has such a
                    material adverse effect. The Director's determination shall
                    be final and binding for all purposes.

         1.4.2      For the purposes of enabling any Meter Operator Party to
                    appeal to the Director against a proposed change to any
                    Agreed Procedure or Code of Practice in accordance with
                    paragraph 1.4.1, the Executive Committee shall give all
                    Parties, Meter Operator Parties and the Director notice of
                    the proposed changes at least fourteen clear days prior to
                    the implementation of such proposed change in accordance
                    with the provisions of this Agreement.

         1.4.3      If an appeal to the Director against a proposed change to
                    any Agreed Procedure or Code of Practice is made within 14
                    days after notification by the Executive Committee pursuant
                    to paragraph 1.4.2, the change shall not come into effect
                    until the determination of the Director has been made and
                    then subject to paragraph 1.4.4. If no appeal is made within
                    the said 14 days, the change shall come into effect on the
                    expiry of that period (or such later date as the Executive
                    Committee may determine).

         1.4.4      The Director shall within 28 days of receipt of a referral
                    (or within such extended period as the Director shall have
                    notified to the Executive Committee within that 28 day
                    period as being necessary to enable him to reach a
                    considered determination) pursuant to paragraph 1.4.1 make
                    the determination referred to therein giving supporting
                    reasons and:-

                    (i)   if the determination of the Director is that the
                          proposed change does not have a material adverse
                          effect upon the rights and liabilities as set out in
                          Schedule 21 of the appellant Meter Operator Party as
                          registered Operator, as Potential Operator or as
                          Tariff Operator then the proposed change shall come
                          into effect in accordance with the provisions of this
                          Agreement; and

                    (ii) if  the determination  of the  Director  is  that  the
                         proposed change  does have a material  adverse  effect
                         upon the rights and liabilities as set out in Schedule
                         21 of the appellant Meter Operator Party as registered
                         Operator, as Potential Operator or as Tariff Operator,
                         the Director may require that the proposed  change not
                         come into effect (in which case such  proposed  change
                         shall   not come  into   effect)  or   require   that
                         modifications be made to the proposed change to obviate
                         or mitigate such material adverse effect. In the latter
                         case  the Executive  Committee  and each  Party  whose
                         consent is required to the relevant  amendment to that
                         Agreed  Procedure  or, as the case  may  be,  Code of
                         Practice, shall take all reasonable steps to implement
                         any decision of the Director (for which  reasons shall
                         be given)  requiring changes to be made to such Agreed
                         Procedure  or Code of Practice  with the  purposes  of
                         obviating or, where the Director considers appropriate,
                         mitigating  such material adverse effect on such Meter
                         Operator Party.

2.       AMENDMENTS AND MODIFICATIONS

                    2.1  Obligations:  The  Parties and Meter Operator  Parties
                         expressly   acknowledge   and  agree that  each  Meter
                         Operator  Party  is  bound  only to the extent  of the
                         obligations which are expressly set out or referred to
                         in   this   Schedule    (including   those  provisions
                         incorporated  herein by reference in paragraph 24) and
                         not by any  other  provision  of this  Agreement. Each
                         Meter   Operator   Party  agrees  to  comply with  the
                         provisions of this Schedule (including those provisions
                         of this Agreement  incorporated herein by reference in
                         paragraph 24). The Parties and Meter Operator  Parties
                         further  expressly agree that any Meter Operator Party
                         (in its capacity as such) shall be conferred only with
                         such  rights  in  respect  of  this  Agreement as  are
                         expressed  to be  conferred on it as Operator or Meter
                         Operator  Party   pursuant to  provisions   which  are
                         expressly  set out in this Schedule  (including  those
                         provisions   incorporated  herein  by   reference   in
                         paragraph  24) or are  definitions listed in paragraph
                         1.1.

2.2      Consent:

         2.2.1      The consent or agreement of any Meter Operator Party shall
                    not be required to any modification, abrogation, amendment
                    or suspension of any provision of this Agreement which is
                    not expressly set out in this Schedule (and for this purpose
                    the provisions of this Agreement incorporated herein by
                    reference in paragraph 24 shall be deemed to be not set out
                    in this Schedule) or which is not a definition listed in
                    paragraph 1.1. Each Meter Operator Party hereby irrevocably
                    waives any rights which it might be considered or held to
                    have to consent or agree to any such modification,
                    abrogation, amendment or suspension.

         2.2.2      Where under paragraph 2.2.1 a Meter Operator Party would
                    otherwise have a right to consent or agree to a
                    modification, abrogation, amendment or suspension of a
                    provision of this Agreement then that consent or agreement
                    shall not be required in circumstances where the consent or
                    agreement of any Party (not being the Settlement System
                    Administrator, the Grid Operator, the Ancillary Services
                    Provider or the Pool Funds Administrator) is also not
                    required under this Agreement to such modification,
                    abrogation, amendment or suspension.

                    2.2.3A Meter  Operator Party whose consent or approval need
                         not by virtue of this paragraph 2 be sought or obtained
                         to   any  modification,   abrogation,   amendment   or
                         suspension of any provision of this Agreement may refer
                         the  matter to the Director  as if it were a  referral
                         under and in  accordance  with  paragraph 1.4 (and such
                         that  the provisions  of that  paragraph  shall  apply
                         mutatis mutandis to such  referral)  provided  that in
                         reaching any determination  as to whether the proposed
                         change  shall come  into  effect  the  Director  shall
                         consider the nature of the changes upon Meter  Operator
                         Parties as a class and shall not have  locus  standi to
                         consider  any perceived  or  actual  prejudice  as  an
                         individual Meter Operator Party.

                    2.3  Authorisation to amend: Without prejudice to paragraphs
                         2.1  and  2.2,   each  Meter   Operator   Party  hereby
                         unconditionally   and   irrevocably    authorises   and
                         instructs   the  Chief   Executive   and  each   person
                         authorised  for the purpose by the Executive  Committee
                         to  sign  on its  behalf  amending  agreements  to this
                         Agreement,  to execute any  agreement  which  modifies,
                         abrogates,  amends or suspends  any  provision  of this
                         Agreement in  circumstances  where such Meter  Operator
                         Party's  consent  or  approval  is  not  required,  and
                         undertakes  not to  withdraw,  qualify  or revoke  such
                         authority and instruction at any time.

2.4      Notification: The Executive Committee shall notify each Meter Operator
         Party of all amendments, modifications, abrogations and suspensions
         which are made to this Agreement for which the consent or agreement of
         such Meter Operator Party is not required.

                    2.5  Further rights: The Executive Committee shall from time
                         to  time  consider  any  representations   which  Meter
                         Operator  Parties may make to the effect that there are
                         provisions  set  out in the  Agreement  but not in this
                         Schedule 21 and, accordingly, in respect of which Meter
                         Operator  Parties  are not  conferred  with  rights  by
                         virtue of this  paragraph  2, which are  operating in a
                         manner which is having a material  effect on the rights
                         and  liabilities of such Meter Operator  Parties as set
                         out herein.  The  Executive  Committee  shall  consider
                         whether,  and the  extent  to which  (if at all),  such
                         provisions should be recommended for incorporation into
                         this Schedule 21.



<PAGE>


                                                    PART 2

                                      ADMISSION, RESIGNATION AND REMOVAL

3.       ADMISSION

3.1      General: Subject to the following provisions of this paragraph 3, the
         Parties and the Meter Operator Parties shall admit as an additional
         party for the purposes of this Schedule only, on the terms set out in
         paragraph 2, any person (the "New Meter Operator Party") who applies to
         be admitted in the capacity of Meter Operator Party.

3.2      Procedure for admission: Admission Application: A New Meter Operator
         Party wishing to be admitted as an additional party for the purposes
         only of this Schedule, on the terms set out in paragraph 2 hereof,
         shall complete a Meter Operator Party Admission Application and shall
         deliver it to the Executive Committee together with the fee (which
         shall be non-refundable).

3.3  Procedure  for  admission as Meter  Operator  Party:  Executive  Committee
     response:

         3.3.1      Upon receipt of any Meter Operator Party Admission
                    Application duly completed the Executive Committee shall
                    notify all Parties, Meter Operator Parties and the Director
                    of such receipt and of the name of the New Meter Operator
                    Party.

         3.3.2      Any Pool Member may by written notice to the Executive
                    Committee, stating the grounds for the objection, object to
                    the admission of any person in respect of which a Meter
                    Operator Party Admission Application has been received by
                    the Executive Committee and where any such notice of
                    objection is received the Executive Committee:-

                    (i)   in the case of an application which the Executive
                          Committee considers, taking into account any objection
                          made pursuant to this paragraph, to be frivolous or
                          vexatious, may reject such application and such
                          rejection shall on that application be final and
                          binding and there shall not be conferred upon the
                          relevant New Meter Operator Party, by virtue of such
                          rejection, any further right of appeal to the Director
                          in respect thereof; or

                    (ii)  in the case of an application which the Executive
                          Committee does not consider, taking into account any
                          objection made pursuant to this paragraph, to be
                          frivolous or vexatious, shall refer the matter to the
                          Director for determination and the provisions of
                          paragraph 3.4 shall apply to such determination.

                    Any objection to be effective must be received by the
                    Executive Committee within 7 days of notification by the
                    Executive Committee of the relevant Meter Operator Party
                    Admission Application in accordance with paragraph 3.3.1
                    (the "objection period"), and the Executive Committee shall
                    disregard any notice of objection which is received outside
                    the prescribed period. Any notice of objection shall be
                    copied by the Executive Committee upon its receipt to all
                    Parties, Meter Operator Parties and the Director.

         3.3.3      Within 7 days of the expiry of the objection period (the
                    "consideration period") the Executive Committee shall notify
                    the New Meter Operator Party and the Director either:-

                    (a)   that the New Meter Operator Party shall be admitted as
                          a Meter Operator Party, in which event the provisions
                          of paragraph 3.5 shall apply; or

                    (b)   that the Executive Committee has received an
                          objection, or objections, to the admission of that New
                          Meter Operator Party and, on the basis thereof,
                          considers the application to be frivolous or vexatious
                          and for that reason is rejecting the application
                          without further right of appeal; or

                    (c)   that the Executive Committee has received an
                          objection, or objections, to the admission of that New
                          Meter Operator Party in accordance with paragraph
                          3.3.2 and has referred the matter to the Director in
                          accordance with paragraph 3.4.

                    If the Executive Committee shall fail so to notify the New
                    Meter Operator Party and the Director, the New Meter
                    Operator Party may within 7 days after the expiry of the
                    consideration period refer the matter to the Director
                    pursuant to paragraph 3.4, in which event the provisions of
                    that paragraph shall apply.

3.4      Procedure for application: Reference to the Director:

         3.4.1     If:-

                    (a)   a notice of objection or notices of objection to the
                          admission of the New Meter Operator Party as a Meter
                          Operator Party within the objection period has (or
                          have) been received and the Executive Committee has
                          not notified the New Meter Operator Party that it is
                          rejecting its application on the basis that those
                          objections demonstrate that the relevant application
                          is frivolous or vexatious; or

                    (b)   the Executive Committee shall have failed to notify
                          the New Meter Operator Party as provided in paragraph
                          3.3.3 within the consideration period,

                    the matter may be referred by way of written application of
                    the New Meter Operator Party, copied to the Executive
                    Committee, to the Director for determination. The
                    determination of the Director, which shall be made within 28
                    days after receipt of the said written application and shall
                    be to the effect that the New Meter Operator Party should or
                    should not be admitted as a Meter Operator Party for the
                    purposes of this Schedule, shall be final and binding for
                    all purposes. The Director shall publish reasons supporting
                    his determination.

         3.4.2            (a) If the determination is to the effect that the New
                          Meter Operator Party should be admitted as a Meter
                          Operator Party, the New Meter Operator Party shall be
                          admitted and the provisions of paragraph 3.5 shall
                          apply.

                    (b)   If the determination is to the effect that the New
                          Meter Operator Party should not be admitted as a Meter
                          Operator Party, the New Meter Operator Party's
                          application for admission shall lapse and be of no
                          effect and the New Meter Operator Party shall not be,
                          and shall not be entitled to be, admitted as a Meter
                          Operator Party consequent upon such application (but
                          without prejudice to any new application it may make
                          thereafter).

3.5      Admission: If:-

         3.5.1  the Executive Committee shall notify the New Meter Operator
                Party and the Director as provided in paragraph 3.3.3(a); or

        3.5.2   the  New Meter Operator  Party  is to be  admitted  as a  Meter
               Operator Party pursuant to paragraph 3.4,

         the Executive Committee shall forthwith prepare or cause to be prepared
         a Meter Operator Party Accession Agreement. Subject to the Executive
         Committee making all notifications and filings (if any) required of it
         for regulatory purposes and obtaining all regulatory consents and
         approvals (if any) required to be obtained by it, the Executive
         Committee shall instruct the Chief Executive or another person
         authorised by the Executive Committee for the purpose to prepare a
         Meter Operator Party Accession Agreement and to sign and deliver the
         Meter Operator Party Accession Agreement on behalf of all Parties and
         Meter Operator Parties other than the New Meter Operator Party and the
         New Meter Operator Party shall also execute and deliver the Meter
         Operator Party Accession Agreement and, on and subject to the terms and
         conditions of the Meter Operator Party Accession Agreement, the New
         Meter Operator Party shall become a Meter Operator Party on the terms
         set out in paragraph 2, for the purposes of this Schedule, with effect
         from the date specified in such Meter Operator Party Accession
         Agreement (and, if no such date is so specified, the date of such Meter
         Operator Party Accession Agreement). The New Meter Operator Party shall
         pay all costs and expenses associated with the preparation, execution
         and delivery of its Meter Operator Party Accession Agreement. Each
         Party and Meter Operator Party hereby authorises and instructs the
         Chief Executive and each person authorised for the purpose by the
         Executive Committee to sign on its behalf Meter Operator Party
         Accession Agreements and undertakes not to withdraw, qualify or revoke
         such authority and instruction at any time. The Executive Committee
         shall promptly notify all Parties and Meter Operator Parties and the
         Director of the execution and delivery of each Meter Operator Party
         Accession Agreement.

3.6      Additional Agreements: Upon and as a condition of admission as a Meter
         Operator Party, a New Meter Operator Party shall execute and deliver
         such further agreements and documents and shall do all such other acts,
         matters and things as the Executive Committee may reasonably require.

3.7      Application fees: All fees received by the Executive Committee in
         respect of any application by a New Meter Operator Party to become a
         Meter Operator Party shall be used to defray the costs and expenses of
         the Executive Committee and shall be paid to such account as the
         Executive Committee may direct. The application fee shall be (pound)250
         or such other amount as the Executive Committee may, with the prior
         approval of the Director, from time to time prescribe.

3.8  Acknowledgement  that provisions  not  exhaustive of being  Operator:  The
     compliance  by any person with the  provisions  of this  paragraph  3 with
     regard to its admission as a Meter Operator Party shall not of itself mean
     that all things have been done and agreements  or  arrangements  have been
     entered  into with other  Parties and persons such that the duly  admitted
     Meter  Operator  Party is entitled or enabled to comply as an  operational,
     physical or legal matter with its obligations,  or to enjoy its rights,  as
     an Operator  under this Schedule and the  provisions of this Schedule shall
     always be without  prejudice  to the rights and  obligations  of such Meter
     Operator  Party under any other  agreement or  arrangement  with such other
     Parties or persons.

3.9      Compliance: Each Meter Operator Party shall procure that for so long as
         it is a Meter Operator Party it shall at all times satisfy or otherwise
         comply with the admission conditions set out in its Meter Operator
         Party Admission Application applicable to it (and/or such further or
         other conditions as the Executive Committee may from time to time
         reasonably specify) and upon request from time to time shall promptly
         provide the Executive Committee with evidence reasonably satisfactory
         to the Executive Committee of such satisfaction and compliance.

3.10     Change of capacities:

         3.10.1     Any Meter Operator Party admitted as an additional party
                    pursuant to this paragraph 3 may apply, whether in
                    substitution for or in addition to being a Meter Operator
                    Party, to become a Party to this Agreement in accordance
                    with Clause 3 of this Agreement and, if appropriate, a Pool
                    Member in accordance with Clause 8 of this Agreement. Such
                    Meter Operator Party shall only be entitled to become a
                    Party and, as the case may be, Pool Member in accordance
                    with those provisions of this Agreement.

         3.10.2     Subject to the transitional arrangements set out in
                    paragraph 23, any Party to this Agreement may, upon
                    application to the Executive Committee and satisfaction of
                    such conditions (if any) as the Executive Committee may
                    reasonably require, whether in substitution for or in
                    addition to being a Party, become a Meter Operator Party for
                    the purposes of and on the terms set out in this Schedule.

4.       REGISTRATION OF OPERATORS

4.1      Registration: Subject to Clause 60.4, the identity of the Operator for
         each Metering System which the Settlement System Administrator shall
         take into account for the purposes of Settlement and which shall be the
         Operator for all purposes of this Schedule shall be as notified to the
         Settlement System Administrator in accordance with this Schedule and as
         recorded by it, for the time being and from time to time, in the
         Register.

4.2      Who can be Operator: The operator of any Metering System proposed to be
         registered with the Settlement System Administrator or the new operator
         of any Metering System already so registered shall be either:-

         4.2.1      the Meter Operator Party specified as such in a notice
                    served by it upon the Settlement System Administrator in
                    accordance with the relevant Agreed Procedure and which has
                    acknowledged its appointment therein; or

         4.2.2      where no Meter Operator Party is specified pursuant to
                    paragraph 4.2.1 or such Meter Operator Party has not
                    acknowledged its appointment, the Registrant deemed to be
                    Operator pursuant to Clause 60.4.4 in accordance with the
                    provisions thereof.

4.3  Consents:  Subject to Clause  60.4.9,  no person shall be the Operator of a
     Metering System without the prior written consent of:-

     (i)  the person (if not the  Operator  or  Registrant  in respect  thereof)
          which is at that time the Equipment Owner;

     (ii) in the case of a Metering System to be operated in respect of supplies
          to a Second Tier Customer,  and if different from the Equipment Owner,
          that Second Tier Customer; and

     (iii)in the  case  of a  Metering  System  to be  operated  in  respect  of
          supplies  from a  Non-Pooled  Generator,  and if  different  from  the
          Equipment Owner, that Non-Pooled Generator.

         The Registrant in respect of that Metering System shall provide
         evidence of such consent to the Executive Committee and to the
         Settlement System Administrator at the time of the registration of that
         Meter Operator Party as Operator in respect of such Metering System.
         The Settlement System Administrator shall not register as an Operator
         in respect of such Metering System any person in respect of which
         evidence of consent of the Equipment Owner, and where applicable and
         where different, the relevant Second Tier Customer or Non-Pooled
         Generator, is required but has not been so provided. Where no such
         evidence or insufficient evidence is provided the Settlement System
         Administrator shall notify the relevant Meter Operator Party
         accordingly.

4.4      Power to prescribe new registration conditions:

          4.4.1The Executive  Committee shall have the power to prescribe,  from
               time to time,  such  further  conditions  to be imposed  upon the
               registration  of any Meter  Operator  Party as an Operator  under
               this Schedule as it shall consider  appropriate  with the consent
               of the Meter  Operator  Parties.  In the case of a Meter Operator
               Party, such consent shall not be unreasonably withheld or delayed
               and  notification  of such consent or refusal to consent shall be
               made to the  Executive  Committee  within  7 days of its  consent
               being  requested.  If any Meter Operator Party refuses to consent
               or does not  consent  within the  prescribed  7 day  period,  the
               Director shall  determine  whether such consent was  unreasonably
               withheld.

         4.4.2      The conditions to be imposed pursuant to paragraph 4.4.1
                    shall be as specified from time to time in an Agreed
                    Procedure and each Operator shall be required, upon the
                    bringing into effect of new or revised conditions, to
                    demonstrate to the satisfaction of the Executive Committee
                    in accordance with the provisions of such Agreed Procedure,
                    the ability to comply with the standards laid down therein.

         4.4.3      Any Operator which is not able to demonstrate compliance
                    with such revised standards in accordance with paragraph
                    4.4.2 shall at the time specified in that Agreed Procedure
                    cease to be a Meter Operator Party for the purposes hereof,
                    but such cessation shall be without prejudice to any right
                    to make a future application to become a Meter Operator
                    Party or Operator in accordance with the provisions of this
                    Schedule.

5.       RESIGNATION

5.1      Resignation as Meter Operator Party: Subject as provided in paragraph
 5.2:-

         5.1.1      a Meter Operator Party shall be entitled at any time to
                    resign as a Meter Operator Party by delivering a Meter
                    Operator Party Resignation Notice to the Secretary; and

         5.1.2      such resignation shall take effect 28 days after receipt of
                    the Meter Operator Party Resignation Notice by the
                    Secretary.

         Promptly after receipt of a duly completed Meter Operator Party
         Resignation Notice from a Meter Operator Party, the Secretary shall
         notify (for information only) all of the other Parties, Meter Operator
         Parties, the Executive Committee and the Director of such receipt and
         of the name of the Meter Operator Party wishing to resign.

5.2      Restrictions on resignation: A Meter Operator Party may not resign as a
         Meter Operator Party (and any Meter Operator Party Resignation Notice
         delivered pursuant to paragraph 5.1.1 shall lapse and be of no effect)
         unless:-

         (i)        as at the date its resignation would otherwise become
                    effective all sums due from such Meter Operator Party to the
                    Executive Committee or any other Party or Meter Operator
                    Party under this Agreement or any agreement entered into
                    pursuant to and in accordance with this Agreement (whether
                    by or on behalf of such Meter Operator Party) and notified
                    for the purposes of this paragraph 5.2 by the Executive
                    Committee to such Meter Operator Party prior to the date of
                    its resignation have been paid in full; and

         (ii)       the Meter Operator Party is not registered as the Operator
                    in respect of any Metering System.

5.3      Resignation as an Operator:

         5.3.1      An Operator shall be entitled at any time to resign as
                    Operator of a Metering System by service of a duly completed
                    notice in the form prescribed by the relevant Agreed
                    Procedure upon the Settlement System Administrator.

         5.3.2      Such resignation shall take effect (unless otherwise agreed
                    with the Settlement System Administrator) on the date
                    specified therein which shall be no earlier than the date
                    specified in the relevant Agreed Procedure.

         5.3.3The  Settlement  System  Administrator  shall notify the relevant
               Registrant and, where applicable,  Host PES of receipt by it of a
               notice  pursuant  to this  paragraph  5.3 within one  working day
               following such receipt.

5.4      Release as a Meter Operator Party: Without prejudice to Clause 66.7 as
         incorporated into this Schedule by paragraph 24 hereof and its accrued
         rights and liabilities and its rights and liabilities which may accrue
         in relation to the period during which it was a Meter Operator Party
         under this Schedule pursuant to paragraph 2 hereof or to any agreement
         referred to in paragraph 5.2, upon a Meter Operator Party's resignation
         becoming effective in accordance with paragraph 5.1:-

         5.4.1      such Meter Operator Party shall be automatically released
                    and discharged from all its obligations and liabilities in
                    its capacity as Meter Operator Party under this Schedule and
                    any agreement referred to in paragraph 5.2; and

         5.4.2      each of the other Parties and Meter Operator Parties shall
                    be automatically released and discharged from its
                    obligations and liabilities to such Meter Operator Party in
                    its capacity as Meter Operator Party under this Schedule and
                    any agreement referred to in paragraph 5.2.

         Each Meter Operator Party shall promptly at its own cost and expense
         execute and deliver all agreements and other documentation and do all
         such other acts, matters and things as may be necessary to confirm such
         cessation, release and discharge.

6.       REMOVAL AND CESSATION

6.1  Removal as Operator by  Registrant:  Without  prejudice to any rights under
     any other  agreement  between any Operator and any other person  (which the
     Settlement System  Administrator  shall not be obliged to take into account
     or acknowledge for the purposes of this Agreement) and without prejudice to
     its accrued rights and liabilities and its rights and liabilities which may
     accrue in relation to the period  during which it was Operator  pursuant to
     this  Schedule,  the  Registrant  of any  Metering  System  may  remove the
     Operator of such Metering System upon service of a duly completed notice in
     the form prescribed by the relevant Agreed  Procedure to be served upon the
     Settlement System Administrator (with a copy to be served upon the relevant
     Second  Tier  Customer  (if any) or ERS  First  Tier  Customer  (if any) or
     Non-Pooled  Generator  (if any)) and such  notice  to take  effect  (unless
     otherwise  agreed with the  Settlement  System  Administrator)  on the date
     specified  therein which shall be no earlier than the date specified in the
     relevant Agreed Procedure. The Settlement System Administrator shall notify
     the relevant Operator and, where applicable,  Host PES of the receipt by it
     of a notice pursuant to this paragraph 6.1 following such receipt.

6.2      Removal as Operator or Meter Operator Party for cause: Subject:-

         6.2.1      to good cause for the removal of a Meter Operator Party as
                    (i) Operator in respect of one or more, but not all,
                    Metering Systems in respect of which it is the Operator, or
                    (ii) as Meter Operator Party in respect of all, but not
                    some, Metering Systems in respect of which it is the
                    Operator, having been demonstrated to the satisfaction of
                    the Executive Committee; and

         6.2.2     as provided in paragraphs 6.3 and 6.4,

                    an Operator (where removal is in respect of one or more, but
                    not all, such Metering Systems) or, as the case may be, a
                    Meter Operator Party (where removal is in respect of all
                    such Metering Systems), may at any time be removed by:-

                    (a)   resolution of the Executive Committee passed by a
                          majority of not less than 75% of the total votes of
                          all Committee Members which may be exercised whether
                          or not any such Committee Member is present in
                          accordance with the provisions of this Agreement; and

                    (b)   the giving by the Executive Committee to the Operator
                          or, as the case may be, Meter Operator Party after
                          such resolution has been passed or deemed effective
                          (which the Executive Committee shall promptly do) of
                          not less than 28 days' notice in writing of such
                          removal.

6.3  Good cause for removal:  Good cause for the purposes of paragraph 6.2.1 may
     include the following:-

         6.3.1      the failure by the Operator or Meter Operator Party as
                    Operator in any persistent, material respect or in any
                    single, major respect to perform or comply with any of the
                    obligations expressed to be assumed by it under this
                    Schedule and such default (if capable of remedy) is not
                    remedied within a reasonable period of time after the
                    Executive Committee has given notice to that Operator or, as
                    the case may be, Meter Operator Party of the occurrence
                    thereof and requiring the same to be remedied; and

     6.3.2in the case of  removal  as a  Meter  Operator  Party,  where a Meter
          Operator Party:-

                    (a)   is unable to pay its debts (within the meaning of
                          section 123(1) or (2) of the Insolvency Act 1986) or
                          has any voluntary agreement proposed in relation to it
                          under section 1 of that Act or enters into any scheme
                          of arrangement (other than for the purpose of
                          reconstruction or amalgamation upon terms and within
                          such period as may previously have been approved in
                          writing by the Executive Committee);

                    (b)   has a receiver (which expression shall include an
                          administrative receiver within the meaning of section
                          29 of the Insolvency Act 1986) of the whole or any
                          material part of its assets or undertaking appointed;

                   (c)  has an  administration  order  under  section  8 of the
                         Insolvency Act 1986 made in relation to it;

                    (d)   passes any resolution for winding-up other than a
                          resolution previously approved in writing by the
                          Executive Committee; or

                    (e) becomes subject to an order by the High Court for
winding-up.

                    For the purposes of paragraph (a) above the Meter Operator
                    Party shall not be deemed to be unable to pay its debts if
                    any such demand as is mentioned in the said section is being
                    contested in good faith by the Meter Operator Party with
                    recourse to all appropriate measures and procedures.

         For the avoidance of doubt, the Parties and Meter Operator Parties
         hereby acknowledge and agree that a resolution of the Executive
         Committee to remove the Operator as Operator or a Meter Operator Party
         as Meter Operator Party shall not, of itself, constitute good cause.

6.4      Referral to the Director: An Operator or, as the case may be, a Meter
         Operator Party may in writing within the 28 day period referred to in
         paragraph 6.2(b) refer a decision of the Executive Committee to remove
         it for cause pursuant to paragraph 6.2 to the Director. Where such
         referral is made in accordance with this paragraph 6.4, the removal of
         such Meter Operator Party as Operator or, as the case may be, Meter
         Operator Party for cause shall not become effective until such time as
         the Director determines, in accordance with paragraph 6.5, that good
         cause exists for such removal.

6.5  Determination  by Director:  The  Director,  upon any  referral  being made
     pursuant to paragraph  6.4,  shall  determine  whether  there is good cause
     within  the  meaning  of this  paragraph  6 for the  removal  of such Meter
     Operator Party as Operator or, as the case may be, as Meter Operator Party,
     within 28 days of the  receipt of the written  referral of the  decision of
     the Executive Committee.  Any decision of the Director that there is, or is
     not,  good cause for removal  shall be final and binding on the Parties and
     Meter Operator  Parties.  Where the Director  determines  that there is not
     good cause for the removal of a Meter Operator Party, the relevant decision
     of the Executive  Committee  shall lapse and cease to be effective and such
     Meter  Operator  Party shall not be removed as Operator or, as the case may
     be, Meter Operator Party by virtue of the passing of that resolution.

6.6      Notification of removal: Within 7 days of any Operator or Meter
         Operator Party being removed for cause in accordance with the
         provisions of this paragraph 6, the Secretary shall notify all Parties,
         Meter Operator Parties, relevant Second Tier Customers, relevant ERS
         First Tier Customers, relevant Non-Pooled Generators and the Director
         in accordance with the provisions of this Agreement of the identity of
         the relevant Operator or, as the case may be, Meter Operator Party and
         of the fact of its removal.

6.7      Right to representation: Any Party or Meter Operator Party against whom
         the Executive Committee is considering exercising powers pursuant to
         this paragraph 6 shall have the right to representation at any meeting
         of the Executive Committee which considers the exercise of such powers.

6.8  Cessation as Operator: An Operator of any Metering System shall cease to be
     the  Operator  therefor  when the Plant or  Apparatus  in  respect  of such
     Metering Equipment ceases to be connected at the relevant Site.


6.9  Cessation as Meter Operator  Party:  Without  prejudice to any rights under
     any other  agreement  between an Operator and any other  person  (which the
     Settlement System  Administrator  shall not be obliged to take into account
     or acknowledge for the purposes of this Agreement) and without prejudice to
     its accrued rights and liabilities and its rights and liabilities which may
     accrue in relation to the period during which it was a Meter Operator Party
     under this  Schedule,  an Operator shall cease to be a Meter Operator Party
     where it has not been  registered by the  Settlement  System  Administrator
     (save  in the  case of  manifest  error  or bad  faith  on the  part of the
     Settlement System  Administrator) as an Operator in respect of any Metering
     System  registered  with  the  Settlement  System   Administrator  for  any
     consecutive period of fifteen months.

6.10     Termination of Rights and Obligations under this Agreement: A Meter
         Operator Party shall only cease to be party to this Agreement in the
         capacity as a Meter Operator Party in the circumstances and to the
         extent specified in either paragraph 4, 5 or 6.

6.11     Rights and liabilities as Party: Where any Party which is also a Meter
         Operator Party resigns as, is removed as, or ceases to be, a Meter
         Operator Party for the purposes of, and in accordance with, this
         Schedule, such resignation, removal or cessation shall be without
         prejudice to all past, present and future accrued and accruing rights
         and liabilities of that Party as Party in any capacity whatsoever other
         than as Meter Operator Party.

6.12     Paragraph exhaustive: The Parties and Meter Operator Parties agree that
         the foregoing provisions of this paragraph 6, when read with the
         provisions referred to in this paragraph, are exhaustive of cessation
         as a Meter Operator Party and of cessation of rights and liabilities as
         a Meter Operator Party.



<PAGE>


                                                    PART 3

                                       METER OPERATOR'S RESPONSIBILITIES

7.       OBLIGATION TO ENSURE COMPLIANT METERING EQUIPMENT

7.1      General Obligation and Commercial Boundary:

         7.1.1      There must always be one and, at any point in time, no more
                    than one Operator for each Metering System which is
                    registered with the Settlement System Administrator.

         7.1.2      All Metering Systems at the site of a Non-Pooled Generator,
                    which are part of the same Metering Equipment, must have the
                    same Operator.

         7.1.3Each Operator  shall ensure there is installed a Metering  System
              complying  with the  provisions  of this  Schedule and Part XV of
              this Agreement which meets the required levels of accuracy at the
              commercial boundary at each Site for which it is the Operator and
              which is as close as reasonably  practicable  to that  commercial
              boundary taking into account relevant  financial  considerations.
              The Parties and Meter Operator Parties acknowledge and agree that
              Metering  Equipment at Power  Stations  either  existing or under
              construction  at the Effective  Date might not be situated at the
              commercial  boundary.  In such cases, loss adjustment factors may
              be  applied  after  the  Effective   Date  subject  to  it  being
              demonstrated  to the  reasonable  satisfaction  of the Settlement
              System  Administrator that such loss adjustment factors have been
              correctly derived.

          7.1.4To the extent that the  required  levels of accuracy  referred to
               in  paragraph  7.1.3 depend upon  associated  current and voltage
               transformers  which are not in the  ownership  or  control of the
               relevant  Operator,  the relevant  Equipment Owner agrees to take
               reasonable  steps to assist the  Operator in  complying  with its
               obligations  under  paragraph 7.1.3 by the maintenance and repair
               of such current and voltage  transformers  in accordance with the
               provisions of this Schedule  provided that this  paragraph  7.1.4
               shall be  without  prejudice  to any right to charge for the same
               and  provided  further  that  an  Equipment  Owner  shall  not be
               required by this paragraph  7.1.4 to take steps which would cause
               it to be in breach of its  obligations  under  its  Licence,  its
               Nuclear Site Licence (as defined in paragraph 21.9(a)),  the Grid
               Code or any Distribution Code.

7.2      Description of Metering Equipment:

         7.2.1      Metering Equipment and its component parts shall comply, as
                    a minimum, with the requirements referred to or set out in
                    any relevant Code of Practice or shall be the subject of,
                    and comply with, a dispensation agreed in accordance with
                    paragraph 14.

         7.2.2      Metering Equipment comprising a Metering System shall use
                    such communication protocols selected, with the approval of
                    the Settlement System Administrator, as appropriate for that
                    Metering Equipment from a list of communication protocols
                    approved and maintained from time to time by the Settlement
                    System Administrator.

7.3      Accuracy of Metering Equipment:

         7.3.1      The Metering Equipment comprising any Metering System shall
                    be accurate within the prescribed limits for such Metering
                    Equipment referred to or set out in the relevant Code of
                    Practice except only in the case where such Metering
                    Equipment is the subject of, and complies with, a
                    dispensation relevant to those prescribed limits agreed in
                    accordance with paragraph 14.

         7.3.2      The accuracy limits referred to in the relevant Code of
                    Practice shall be applied after adjustments have been made
                    to Metering Equipment to compensate for any errors due to
                    measuring transformers and connections thereto. Beyond the
                    ranges specified in the relevant Code of Practice and power
                    factors other than unity or zero (as the case may be) limits
                    of accuracy will depend on the characteristics of the
                    individual meters and measuring transformers specified for
                    the Metering Equipment. Such levels of accuracy will, in the
                    event of any uncertainty or dispute, be specified by the
                    Executive Committee.

          7.4  Calibration  of Metering  Equipment:  Each Operator  shall ensure
               that  all  Metering   Equipment  which  is  registered  with  the
               Settlement  System  Administrator  pursuant to this Agreement and
               for  which it is  Operator  pursuant  to this  Schedule  shall be
               calibrated in order to meet the accuracy requirements referred to
               in paragraph  7.3.1 and otherwise in accordance with the relevant
               Code of Practice or, where appropriate, any relevant dispensation
               agreed in accordance  with paragraph 14. Subject to paragraph 21,
               the Settlement System Administrator and the Pool Auditor shall be
               granted access to all such Metering Equipment and any other Plant
               or  Apparatus  on any Site in order to  inspect  the basis of any
               adjustments made to Metering Equipment.

8.       MAINTENANCE OF METERING EQUIPMENT

8.1      Proper order: Each Operator shall at its own cost and expense (but
         without prejudice to its right to charge any other person for such
         service pursuant to another agreement or arrangement) keep in good
         working order, repair and condition all Metering Equipment in respect
         of which it is the Operator to the extent necessary to allow the
         correct registration, recording and transmission of the requisite
         details of the quantity of Active Energy and/or Reactive Energy
         measured by the relevant Meter.

8.2      Inspection and Testing:

          8.2.1No less  frequently  than such period as may be  specified in the
               relevant Code of Practice each Operator shall carry out a routine
               test of the  accuracy  of all  Metering  Equipment  in respect of
               which it is the  Operator.  The  Operator  shall also carry out a
               test of the  accuracy  of all  Metering  Equipment  in respect of
               which  it  is  the  Operator  and  which  replaces  defective  or
               inaccurate   Metering   Equipment   as  soon  as  is   reasonably
               practicable after its  installation.  Such Operator will give the
               Settlement  System  Administrator  and the Registrant at least 15
               days' prior written notice of the date, time, place and nature of
               every such test and the Settlement System  Administrator and Host
               PES and the  Registrant  shall have the right to attend such test
               should  it so  require.  Any  such  test  as  envisaged  in  this
               paragraph 8.2.1 shall comply with the relevant Code of Practice.

         8.2.2     If either:-

                    (a)   the Settlement System Administrator has reason to
                          believe that the Metering Equipment which an Operator
                          is required to maintain for the purposes of this
                          Schedule is not performing within the prescribed
                          limits of accuracy referred to in paragraph 7.3.1; or

                    (b)   such Operator or any other Party or Meter Operator
                          Party has reason to believe there is any such failure
                          to so perform,

                    then, in the case of (b), such Operator, such other Party or
                    such Meter Operator Party shall notify the Settlement System
                    Administrator, the Registrant of the relevant Metering
                    System and the Host PES (if any) and, in any case, the
                    Settlement System Administrator:-

                    (i)   shall (if so requested by any Party or Meter Operator
                          Party) and (in any other case) may, without giving
                          notice to the relevant Operator or Registrant, inspect
                          such Metering Equipment and make such tests as the
                          Settlement System Administrator shall deem necessary
                          to determine its accuracy; or

                    (ii)  in any other circumstances require the relevant
                          Operator promptly to test the accuracy of the same but
                          in any event within 24 hours of receiving notification
                          of such requirement pursuant to this paragraph 8.2.2,
                          whereupon the relevant Operator shall carry out such
                          test. Such test shall comply with the relevant Code of
                          Practice and shall take place in the presence of the
                          Settlement System Administrator, if it so requires.

                    Further, if an Operator has reason to believe that the
                    Metering Equipment in respect of which it is the Operator is
                    incorrectly recording data for any reason, it shall notify
                    the Settlement System Administrator, the Registrant in
                    respect of the relevant Metering System and the Host PES (if
                    any).

         8.2.3      Recovery of costs for non-routine testing (1): Subject to
                    paragraph 8.2.4, the costs of any such test referred to in
                    this paragraph 8.2 shall be borne by the Operator
                    responsible for the maintenance of the relevant Metering
                    Equipment (but without prejudice to its right to charge any
                    other person for such service pursuant to another agreement
                    or arrangement), save that the Settlement System
                    Administrator shall bear the costs of its nominee's
                    attendance thereat (subject to its right to recover the same
                    through its charges).

          8.2.4Recovery  of  costs  for  non-routine   testing  (2):  Where  any
               Metering  Equipment  passes all  inspections  and tests  required
               pursuant to paragraph 8.2.2 or the test is in respect of Metering
               Equipment where the Operator is the deemed  Operator  pursuant to
               Clause 60.4.4,  the costs of such inspections and tests shall, in
               the  case of  paragraph  (a) of that  paragraph,  be borne by the
               Settlement System Administrator  (subject to its right to recover
               the same  through  its  charges)  and,  in the case of  paragraph
               8.2.2(i)  where a test is  required  by  another  Party  or Meter
               Operator  Party,  be borne by such other Party or Meter  Operator
               Party which shall  reimburse  the relevant  Operator its costs on
               demand.

          8.3  Sealing:  Metering Equipment shall be as secure as is practicable
               in all the circumstances and for this purpose:-

          (a)  all Metering  Equipment  shall  comply with the  relevant  Agreed
               Procedure; and

          (b)  the Executive  Committee and the Settlement System  Administrator
               shall   regularly   review   Agreed   Procedures   for   security
               arrangements in relation to Metering Equipment.

8.4  Defective Metering Equipment:  If at any time any Metering Equipment or any
     part thereof is destroyed or damaged or otherwise ceases to function, or is
     found to be  outside  the  prescribed  limits of  accuracy  referred  to in
     paragraph  7.3.1, the Operator  therefor shall,  subject to compliance with
     its obligations under paragraph 8.3,  promptly adjust,  renew or repair the
     same or replace any  defective  component so as to ensure that the relevant
     Metering  Equipment is back in service and operating  within the prescribed
     limits of  accuracy  as quickly  as is  reasonably  practicable  in all the
     circumstances.

9.       MAINTENANCE OF RECORDS AND PROVISION OF INFORMATION

9.1      Information:

         9.1.1      An Operator shall inform the Settlement System Administrator
                    of all relevant information relating to the Metering
                    Equipment in respect of which it is the Operator, including
                    any new or substituted Metering Equipment, and as may be
                    required by the relevant Agreed Procedure.

         9.1.2      All Meter Operator Parties shall give to the Settlement
                    System Administrator all such information regarding Metering
                    Equipment as the Settlement System Administrator shall
                    reasonably require for the proper functioning of the
                    Settlement System including information regarding the dates
                    and time periods for installation of new Metering Equipment
                    and the dates and periods when Metering Equipment is out of
                    service.

         9.1.3      All Meter Operator Parties shall give to the Pool Auditor
                    all such information regarding Metering Equipment as the
                    Pool Auditor shall reasonably require for the purposes of
                    carrying out its functions under Part IX of this Agreement
                    including information regarding the dates and time periods
                    for installation of new Metering Equipment and the dates and
                    periods when Metering Equipment is out of service and a copy
                    of any record maintained in accordance with paragraph 9.2.

9.2  Records: Each Operator shall maintain a record in relation to each Metering
     System for which it is the Operator  detailing all relevant  matters as may
     be required by the relevant Code of Practice relating to the calibration of
     the Metering  Equipment  comprising each such Metering System including the
     dates and  results  of any  tests,  readings,  adjustments  or  inspections
     carried  out and the dates on which any seal was  applied  or  broken,  the
     reason for any seal being broken and the persons  attending any such tests,
     readings,  inspections  or sealings.  Such  records  shall also include any
     other  details  as may be  reasonably  required  by the  Settlement  System
     Administrator.  Each Operator shall pass such records or copies of the same
     to its  successor  as Operator in relation to any Metering  Equipment.  Any
     such  records  shall be complete  and accurate and retained for the life of
     the relevant item of Metering  Equipment.  The Registrant in respect of any
     Metering  Equipment shall be entitled to receive copies of all such records
     free of charge.

9.3      A Meter Operator Party shall permit the Pool Auditor unrestricted
         access to Metering Equipment forming part of any Metering System in
         respect of which it is Operator and all data used, information held and
         records kept by it or its agents in operating that Metering Equipment
         and shall make available members of its staff to explain the operation
         of that Metering Equipment and such other issues as the Pool Auditor
         considers relevant.



<PAGE>


                                     PART 4

   RIGHTS AND RESPONSIBILITIES RELATING TO THE SETTLEMENT SYSTEM ADMINISTRATOR

10.      INSPECTIONS AND READINGS

10.1     Inspections: The Settlement System Administrator shall procure that all
         Metering Equipment comprising any Metering System which is registered
         with it for the purposes of the Settlement System is inspected and read
         by it or on its behalf not less than once in every three months for
         general and reconciliation purposes and shall give the Registrant and
         Operator notice thereof in accordance with the relevant Agreed
         Procedure.

10.2     Written reports: The Settlement System Administrator and the Operator
         shall keep written reports of all such inspections and readings as are
         referred to in paragraph 10.1 in accordance with sub-section 6.6 of
         Schedule 4 and the Settlement System Administrator shall provide copies
         in accordance with the relevant Agreed Procedure of such written
         reports to each Registrant whose Consumer Metered Demand determined in
         accordance with the Pool Rules is calculated by the Settlement System
         Administrator using data from such Metering System.

11.      DATA COLLECTION

11.1 Collection,  Retrieval,  Validation and Estimation of Data: The Settlement
     System Administrator will notify the relevant Registrant, Operator and Host
     PES  where,  as  determined  by  the relevant  Agreed  Procedure,  it  has
     reasonable  grounds to believe or has established  that data required from
     any Metering  Equipment for the functioning  of the  Settlement  System in
     accordance  with this Agreement is incomplete,  inaccurate or has not been
     received, such notice to include details of the relevant Metering Equipment
     and  data  which  the  Settlement System  Administrator  believes  or  has
     established  is  incomplete, inaccurate  or has  not  been  received.  The
     Settlement System Administrator shall investigate and remedy the defect in
     accordance  with the relevant  Agreed  Procedure  taking into  account the
     following priorities in the following order:-

         (a)       the need to obtain accurate data;

         (b)       the need to apply verification procedures;

         (c) the need to produce edited or substitute data where it is incorrect
or unavailable.

11.2     Corrected, completed or received data: Once the Settlement System
         Administrator has remedied the defect identified in accordance with
         paragraph 11.1, it will notify the relevant Registrant, Operator and
         Host PES:-

          (a)  in the case of data which it has established was inaccurate,  of
               the validated data; and

         (b)        in the case of data which it has established is incomplete
                    or which has not been received, of the edited or substitute
                    data,

         in each case established according to the relevant Agreed Procedure.

12.      POLICING BY THE SETTLEMENT SYSTEM ADMINISTRATOR

         Policing: The Settlement System Administrator shall make or shall
         procure arrangements for spot visits to metering sites by suitably
         qualified inspectors in order to monitor compliance by Registrants and
         Operators of their obligations under Part XV of this Agreement and this
         Schedule, the appropriate Code of Practice and the Agreed Procedures.
         The sites chosen for, and the conduct of, such policing shall be
         determined by the Settlement System Administrator. The extent of
         policing shall be in accordance with instructions given to the
         Settlement System Administrator from time to time by the Executive
         Committee in accordance with the SSA Arrangements.



<PAGE>


                                                    PART 5

                                      CODES OF PRACTICE AND DISPENSATIONS

13.      CODES OF PRACTICE

13.1 Relevant  Code of Practice:  Subject to  paragraph  13.2 and subject to the
     transitional arrangements described in paragraph 13.4, the relevant Code of
     Practice in respect of Metering  Equipment shall be determined by reference
     to the version of the Code of Practice  which is expressed to be applicable
     to that Metering  Equipment at the time that the Metering System  comprised
     therein is registered  with the  Settlement  System  Administrator  for the
     first time,  and such Metering  Equipment  shall only be required,  save as
     provided in paragraph  13.2, to comply with such Code of Practice,  and not
     with any Code of Practice  which in any respect later  amends,  modifies or
     supersedes  such Code of Practice,  and  references to the relevant Code of
     Practice in Part XV of this  Agreement and this Schedule shall be construed
     accordingly.

13.2     Saving: Notwithstanding the provisions of paragraph 13.1:

         (a)        without prejudice to sub-paragraphs (b) and (c) below, FMS
                    Metering Equipment which is installed, or in the course of
                    being installed, on the FMS Date, shall only be required to
                    comply with the applicable FMS Code of Practice with which
                    it would have been required to comply were this paragraph 13
                    not in effect;

          (b)  where  any  material  change  is made to the Metering  Equipment
               comprising a Metering System,  details of the changes made shall
               be given  immediately by the Operator in respect of that Metering
               System to the Settlement System Administrator (with a copy to the
               Registrant  of that Metering  System) who shall note the same on
               the Register pursuant to Clause 60.5.  The noting of that change
               on the  Register shall be deemed (but no other entry made on the
               Register shall be deemed) to constitute a  registration  of that
               Metering System  comprised in that  Metering  Equipment  for the
               purposes of paragraph  13.1, and the Code of Practice  current at
               the time of that deemed new registration  shall,  from that time,
               be the relevant  Code of  Practice  in respect of that  Metering
               Equipment;

         (c)        in sub-paragraph (b) above, the term "material change" shall
                    mean a change to the Metering Equipment other than:-

                    (i)   a change by way of repair, modification or replacement
                          of any component which is not in the judgement of the
                          Operator, acting as a reasonable Operator in all the
                          circumstances, a substantial part of the Metering
                          Equipment (a "Substantial Part"); and

                    (ii)  a change to another part or other parts of the
                          Metering Equipment, each of which is not of itself
                          (and where taken together with other such changes,
                          these changes together are not) a Substantial Part
                          (determined as in (i) above) of the Metering
                          Equipment, necessitated in the judgement of the
                          Operator, acting as a reasonable Operator in all the
                          circumstances, by any change under (i) above,

                    in each case even where an enhanced or equivalent component
                    is used for the repair, modification or replacement rather
                    than an identical component;

         (d)        Metering Equipment shall at all times comply with the latest
                    version of the Code(s) of Practice which contains the
                    requirements for the calibration, testing and commissioning
                    of Metering Equipment; and

         (e)        in relation to Metering Equipment which is associated with
                    supplies to an ERS First Tier Customer, the relevant Code of
                    Practice shall apply as amended by any modifications made
                    (after the time that the relevant Metering System is
                    registered with the Settlement System Administrator for the
                    first time) solely in connection with the inclusion of ERS
                    First Tier Customers in the definition of Site.

13.3     Record of Codes of Practice: The Executive Committee shall record in
         the Synopsis of Metering Codes each Code of Practice and the date at
         which that Code becomes effective as the relevant Code of Practice in
         respect of Metering Equipment comprising a Metering System registered
         or, in accordance with paragraph 13.2(b), re-registered at that date or
         thereafter.

13.4     FMS Codes of Practice: On or after the FMS Trading Date and in relation
         to any period on or after this date any relevant Code of Practice for
         the purposes of this Agreement shall be an FMS Code of Practice.

14.      DISPENSATIONS

14.1     Dispensations:

          (a)  If for financial reasons or reasons of  practicality  a Metering
               System or Metering Equipment does not comply with some or all of
               the  requirements of  the  relevant  Code  of  Practice  or  the
               requirements in relation to the commercial boundary of paragraph
               7.1.2,  the  Registrant or potential Registrant of such Metering
               System or, as the case may be, Operator or Potential Operator of
               such Metering  Equipment with the consent of such Registrant or,
               in  the  case  of  Potential   Operators   only,  such potential
               Registrant,  may make an application  to the Executive Committee
               for  a  dispensation  from  such   requirements.  The Executive
               Committee  shall consider and agree, on such conditions (if any)
               as it shall deem fit, or dismiss such application  in accordance
               with the relevant Agreed Procedure and this paragraph 14.

         (b)        The Executive Committee shall have the right to agree from
                    time to time, in accordance with the relevant Agreed
                    Procedure, dispensations from the requirements referred to
                    in sub-paragraph (a), on such conditions (if any) as it
                    shall deem fit, attaching generally to any item of Metering
                    Equipment ("Generic Dispensations"). Generic Dispensations
                    may be agreed upon the application of a Party or Meter
                    Operator Party or be initiated by the Executive Committee at
                    its discretion.

         (c)        Before agreeing any dispensation (including any Generic
                    Dispensation), the Executive Committee shall be obliged to
                    seek and to obtain:-

                    (i)   in the case of a dispensation from a Code of Practice,
                          the approval and agreement of those Parties whose
                          approval and agreement is required in accordance with
                          the definition of Code of Practice in respect of an
                          amendment to or substitution of the Code(s) of
                          Practice from which a dispensation is sought;

                    (ii)  the prior written consent (not to be unreasonably
                          withheld or delayed) of the Settlement System
                          Administrator where applicable in accordance with
                          Clause 6.3;

                    (iii) in the case of a dispensation from the requirements of
                          paragraph 7.1.2 relating to the commercial boundary,
                          the prior written consent (not to be unreasonably
                          withheld or delayed) of the Grid Operator where
                          applicable in accordance with Clause 6.5; and

                    (iv)  in the case of a dispensation from the requirements of
                          paragraph 7.1.2 relating to the commercial boundary,
                          the prior written consent (not to be unreasonably
                          withheld or delayed) of the Ancillary Services
                          Provider where applicable in accordance with Clause
                          6.6.

                    Where, in accordance with (i) above, the amendment of the
                    relevant Code of Practice would require the approval of the
                    Suppliers in separate general meeting such approval shall be
                    deemed to be given by a resolution of the Executive
                    Committee to agree the relevant dispensation, save where any
                    representative of any Supplier elects, upon that resolution,
                    to refer the matter to a separate general meeting of
                    Suppliers in which case, such meeting shall be convened and
                    held in accordance with the provisions of Clause 13.2, and
                    shall determine by resolution whether or not the approval
                    and agreement of Suppliers to that dispensation be given in
                    accordance with this paragraph 14.1.

14.2     Record of dispensations: The Executive Committee shall maintain, in
         accordance with the relevant Agreed Procedure, an up-to-date record of
         all dispensations agreed pursuant to this paragraph 14. The Executive
         Committee shall provide a duplicate copy of any such record to the
         Settlement System Administrator and shall provide the Settlement System
         Administrator with details of all amendments made to such record as
         soon as reasonably possible after the making of such amendment.

          14.3 Existing  dispensations:  The Parties acknowledge that, prior to
               1st  April,  1993,  dispensations (within  the  meaning  of this
               paragraph 14) were agreed by the Executive  Committee as if this
               paragraph 14 were at such time in full force and effect and agree
               that the record  identified as such as at 1st April, 1993 is the
               definitive list of such dispensations.  The Parties further agree
               that such  dispensations  shall be deemed,  with  effect from the
               date at which they were agreed,  to have been effectively agreed
               in  accordance  with  the  provisions  of this  paragraph 14 (as
               formerly  incorporated into this Agreement as Clause 60.10) as in
               force as at 1st April,  1993.  This paragraph 14 shall be without
               prejudice to any claim an Operator or person acting as Operator:-

         (i)        may have as at 31st March, 1993 against a Supplier arising
                    out of any agreement between such Operator (or such person
                    acting as Operator) and such Supplier or out of any
                    representation; or

         (ii)       may have against a Supplier arising out of facts and
                    circumstances in existence prior to or as at 31st March,
                    1993,

         which relates to the installation by such Operator or such person
         acting as Operator of any Metering System installed or being installed
         as at the FMS Date or the installation of which was commenced prior to
         the FMS Date, and which relates to a Metering System which, by virtue
         of a dispensation granted pursuant to this paragraph 14, is not
         required by that Supplier.

14.4     Appeals: Any dispensation from the requirements of a Code of Practice
         or from the requirements relating to the commercial boundary of
         paragraph 7.1.2 agreed in accordance with this paragraph 14 shall be
         capable of being appealed in accordance with the provisions of
         paragraph 19.1, provided that no dispensation shall be considered to be
         agreed in accordance with this paragraph upon any appeal being granted
         where the approval and agreement of the relevant Parties as referred to
         in paragraph 14.1(c) has not been obtained.



<PAGE>


                                                    PART 6

                                          FURTHER RIGHTS OF OPERATORS

15.      OWNERSHIP AND USE OF DATA

15.1     Ownership of data: The Registrant of any Metering System shall own the
         data acquired therefrom provided that (and each Registrant hereby
         expressly agrees and acknowledges that) a Second Tier Customer, ERS
         First Tier Customer or Non-Pooled Generator of that Registrant in
         respect of which such data is generated shall be entitled at all times
         without charge by the Registrant to access, obtain and use such data
         and provided further that:-

         (i)        such access, obtaining or use, or the method of such access,
                    obtaining or use, does not interfere with the operation of
                    Settlement;

         (ii)       nothing in this paragraph 15.1 shall require the Registrant
                    actively to provide such data to such Second Tier Customer,
                    ERS First Tier Customer or Non-Pooled Generator or so to
                    provide such data free of charge; and

         (iii)      such access shall not be by using any communications link
                    used by the Settlement System Administrator for the purposes
                    of Clause 60.6 without the prior written consent of the
                    Settlement System Administrator.

15.2 Use of data: The Settlement System  Administrator and the Pool Auditor for
     the purposes of the  performance by the Pool Auditor of its functions under
     Part IX of this  Agreement  are hereby authorised to use all data which is
     owned by the  Registrant pursuant to  paragraph  15.1 as may be  permitted
     pursuant to this Agreement,  and the Settlement System Administrator or, as
     the case may be, the Pool Auditor may only release such data to others to
     the extent set out in this Agreement.  It is hereby  expressly agreed that
     the  Settlement  System  Administrator is permitted  to and shall against
     request and payment of a  reasonable charge  therefor release to a Second
     Tier  Customer,  ERS First Tier Customer or Non-Pooled Generator such data
     relating to it as is referred to in paragraph 15.1.

15.3     Communications Equipment use: Communications Equipment need not be
         dedicated exclusively to the provision of data to the Settlement System
         Administrator for the purposes of Settlement provided that any other
         use shall not interfere at any time with the operation of Settlement
         and subject also to the relevant provisions (if any) in the relevant
         Tariff.

16.      CHANGES OF SUPPLIERS

         Change of Supplier: Where notice is served on the Settlement System
         Administrator in the form prescribed by the relevant Agreed Procedure
         by a proposed Registrant of an existing Site which is the point of
         supply of a Second Tier Supplier or Second Tier Customer or ERS First
         Tier Customer or Non-Pooled Generator, the proposed Registrant and the
         Operator or proposed Operator (where the existing Operator is to be
         replaced) shall confirm that the Metering System required for the
         purposes of this Schedule and Part XV of this Agreement will be
         installed and Commissioned at the Site by the date required by the
         relevant Agreed Procedure.

17.      ATTENDANCE AT MEETINGS AND RIGHTS OF REPRESENTATION

17.1     Attendance at Pool Members meetings:

         17.1.1     Any notice convening any general meeting of Pool Members
                    including any adjournment thereof in accordance with Clause
                    9.5 shall be additionally given to all Meter Operator
                    Parties and be given in accordance with the provisions of
                    that Clause. The accidental omission to give notice of a
                    meeting to any Meter Operator Party entitled to receive
                    notice shall not invalidate the proceedings at that meeting.

         17.1.2     Each Meter Operator Party (or its duly appointed
                    representative) shall have the right to attend at each
                    general meeting of Pool Members and shall have the right to
                    speak (but not to vote) thereat.

         17.1.3     The Secretary shall circulate any minutes circulated in
                    accordance with Clause 10.10 additionally to Meter Operator
                    Parties in accordance with the provisions thereof.

17.2     Attendance at meetings of the Executive Committee, and sub-committees
         and sub-groups of the Executive Committee:

         17.2.1     One representative for all Meter Operator Parties selected
                    in accordance with paragraph 17.3 (a "Meter Operator Party
                    Representative") shall be entitled to attend and speak (but
                             -----------------------------------
                    not to vote) at meetings of the Executive Committee or at
                    meetings of any sub-committee or sub-group of the Executive
                    Committee on behalf of all Meter Operator Parties and shall
                    be entitled to appoint from time to time alternates and
                    delegates to assist him in those functions, where matters
                    directly concerning the functions, duties or
                    responsibilities of Operators, individually or collectively,
                    have been identified or advised in the agenda for that
                    meeting to be circulated pursuant to Clause 18.1.4 or, as
                    the case may be, Clause 20.1.

         17.2.2     Notice of meetings of the Executive Committee or meetings of
                    any sub-committees or sub-group at which the relevant Meter
                    Operator Party Representative is entitled to attend shall be
                    given to him, together with all prescribed accompanying
                    documentation and agendas, in accordance with Clause 18.1
                    or, as the case may be, Clause 20.1. The Meter Operator
                    Party Representative shall as soon as is reasonably
                    practicable copy such notice together with such accompanying
                    documentation to all Meter Operator Parties.

         17.2.3     The relevant Meter Operator Party Representative shall be
                    entitled to receive copies of all minutes of meetings which
                    he was entitled to attend and which the Secretary is
                    required to circulate in accordance with Clause 18.1.6 or,
                    as the case may be, Clause 20.1 in accordance with the
                    provisions thereof. Such Meter Operator Party
                    Representative, if he attended the relevant meeting, shall
                    notify his approval or disapproval of the minutes to the
                    Secretary no later than ten working days after receipt
                    thereof and, if he fails to do so, he shall be deemed to
                    have approved the same.

17.3     Appointment of representative for Meter Operator Parties: The Director
         shall nominate from time to time a representative who shall represent
         the collective and individual interests of Meter Operator Parties under
         this Agreement.

17.4     Class representation: The Executive Committee or any sub-committee or
         sub-group thereof shall be entitled to assume that any Meter Operator
         Party Representative represents the interests of Meter Operator Parties
         as a class and, where appropriate, represents any affected specific
         individual interests and, in considering matters or exercising its
         powers or discretions under this Agreement, the Executive Committee or
         any sub-committee or sub-group thereof shall not be obliged to seek,
         nor to take account of, the views, comments or consent or otherwise of
         any other Meter Operator Party.



<PAGE>


                                                    PART 7

                                        FAILURE TO COMPLY AND DISPUTES

18.      FAILURE TO COMPLY WITH OBLIGATIONS

         Defective Metering Equipment: Subject to the provisions of Clause
         60.4.9, in the event that an Operator cannot or does not comply with
         its obligations to repair, adjust or replace or renew any defective
         component pursuant to paragraph 8.4, the Settlement System
         Administrator shall have the right to carry out or procure there is
         carried out such repair, adjustment, replacement or renewal and to
         recover its own costs, expenses and profit thereon from such Operator
         forthwith on demand or, where the Settlement System Administrator,
         having taken reasonable steps to recover such costs, expenses and
         profit from the relevant Operator is unable so to recover within a
         reasonable period of time, from the Registrant in respect of that
         Operator subject thereto forthwith on demand (such profit to be
         equivalent to the Handling Charge on such costs and expenses, as
         defined in sub-section 1.1 of the Appendix to Schedule 4).

19.      DISPUTES

19.1 Disputes which may involve a Meter Operator  Party:  Any dispute  regarding
     Metering  Equipment  (other than a dispute referred to in Clause 60.11.1 or
     one arising out of any decision  made pursuant to paragraph  6.2,  which in
     the latter case shall be determined in  accordance  with the  provisions of
     that paragraph) shall be referred to the Executive Committee.  If any Party
     or Meter Operator Party is not satisfied with the decision of the Executive
     Committee, the matter may be referred by such Party or Meter Operator Party
     to  arbitration  in  accordance   with  Clause  83  of  this  Agreement  as
     incorporated into this Schedule by paragraph 24.

19.2 Tests to determine disputes:  Any testing of Metering Equipment required to
     settle any dispute  (including a dispute under Clause 60.11.1) will,  prima
     facie,  be carried out by the relevant  Operator on the  relevant  Metering
     Equipment  mounted  in its  operational  position  in the  presence  of the
     Settlement System Administrator acting on behalf of the Executive Committee
     and in the  presence of the Host PES.  All  testing  will be carried out in
     accordance  with the relevant  Code of Practice or, where  applicable,  any
     relevant  dispensation  agreed in accordance  with this Schedule.  The test
     performance  of any Metering  Equipment  shall be compared with  calibrated
     test equipment by one of the following methods:-

         (a)        injecting into the measuring circuits (i.e. excluding the
                    primary current and voltage transformers) and comparing the
                    readings or records over such period as may be required by
                    the relevant Code of Practice or, where applicable, any
                    relevant dispensation agreed in accordance with this
                    Schedule to ensure a reliable comparison; or

         (b)        where practicable, operating the calibrated test equipment
                    from the same primary current and voltage transformers as
                    the Metering Equipment under operating conditions. The
                    readings or recordings of the Metering Equipment and the
                    calibrated test equipment shall be compared over such period
                    as may be required by the relevant Code of Practice or,
                    where applicable, any relevant dispensation agreed in
                    accordance with this Schedule; or

         (c)        in exceptional circumstances, such other method as may be
                    specified by the Settlement System Administrator.

19.3     Laboratory tests: Metering Equipment which fails any test whilst in its
         operational position shall be tested under laboratory conditions in
         accordance with the relevant Code of Practice.

19.4     Witnesses: No more than two persons representing all interested Parties
         or Meter Operator Parties nominated by the Executive Committee
         (including the Host PES) in addition to the Settlement System
         Administrator will be entitled to witness tests taken as a result of a
         dispute, including tests confirming the calibration of test equipment,
         or inspect evidence of valid calibration, or valid calibration
         certificates, as appropriate.

19.5 Saving: It is hereby expressly  acknowledged and agreed by the Parties that
     the  resolution of any dispute  referred to in Clause  60.11.1 shall in all
     cases be without  prejudice to the bringing or pursuing of any claim, by or
     against,  or the  resolving  of any issue  between  any one or more of such
     Parties or any other Party arising out of the same facts or  circumstances,
     or facts or circumstances  incidental to the facts and circumstances giving
     rise to such  dispute  or upon the  basis of which  such  dispute  has been
     resolved,  in  favour  of,  or  against,  a Meter  Operator  Party or Meter
     Operator Parties.

19.6     Release of data: Upon the request of any Party or Meter Operator Party
         which is a party to a dispute referred to in paragraph 19.1 any
         relevant data derived from any Metering System may be submitted by the
         Settlement System Administrator to the body then having jurisdiction in
         respect of the relevant dispute for the purposes of resolving such
         dispute.



<PAGE>


                                                    PART 8

                                            LIMITATION OF LIABILITY

20.      LIMITATION OF LIABILITY

20.1     Limitation of liability: Subject to paragraph 20.2 and save where any
         provision of this Agreement provides for an indemnity, each Party and
         each Meter Operator Party agrees and acknowledges that no Party nor
         Meter Operator Party (excluding for this purpose the Settlement System
         Administrator) (in this paragraph 20, the "Party Liable") or any of its
         officers, employees or agents shall be liable
                                 ------------
         to any of the other Parties or Meter Operator Parties for loss arising
         from any breach of this Schedule or of this Agreement other than for
         loss directly resulting from such breach and which at the date of this
         Agreement was reasonably foreseeable as not unlikely to occur in the
         ordinary course of events from such breach in respect of:-

         20.1.1     physical damage to the property of any of the other Parties
                    or Meter Operator Parties or its or their respective
                    officers, employees or agents; and/or

         20.1.2     the liability of any such other Party or Meter Operator
                    Party to any other person for loss in respect of physical
                    damage to the property of any other person.

20.2 Death and personal injury: Nothing in this Schedule or this Agreement shall
     exclude or limit the  liability  of the Party  Liable for death or personal
     injury  resulting  from the  negligence  of the Party  Liable or any of its
     officers, employees or agents and the Party Liable shall indemnify and keep
     indemnified  each of the  other  Parties  or Meter  Operator  Parties,  its
     officers,  employees  or agents  from and  against all such and any loss or
     liability  which any such other Party or Meter Operator Party may suffer or
     incur by  reason  of any  claim on  account  of  death or  personal  injury
     resulting  from the  negligence of the Party Liable or any of its officers,
     employees or agents.

20.3     Exclusion of certain types of loss: Subject to paragraph 20.2 and save
         where any provision of this Agreement provides for an indemnity,
         neither the Party Liable nor any of its officers, employees or agents
         shall in any circumstances whatsoever be liable to any of the other
         Parties or Meter Operator Parties for:-

         20.3.1 any loss of profit, loss of revenue, loss of use, loss of
contract or loss of goodwill; or

         20.3.2    any indirect or consequential loss; or

         20.3.3     loss resulting from the liability of any other Party or
                    Meter Operator Party to any other person howsoever and
                    whensoever arising save as provided in paragraphs 20.1.2 and
                    20.2.

20.4     Trust: Each Party and each Meter Operator Party acknowledges and agrees
         that each of the other Parties and Meter Operator Parties holds the
         benefit of Clauses 20.1, 20.2 and 20.3 of this Schedule for itself and
         as trustee and agent for its officers, employees and agents.

20.5     Survival: Each of paragraphs 20.1, 20.2, 20.3 and 20.4 shall:-

         20.5.1     be construed as a separate and severable contract term, and
                    if one or more of such paragraphs is held to be invalid,
                    unlawful or otherwise unenforceable the other or others of
                    such paragraphs shall remain in full force and effect and
                    shall continue to bind the Parties and the Meter Operator
                    Parties; and

         20.5.2    survive termination of this Agreement.

20.6     Saving: For the avoidance of doubt, nothing in this Part 8 shall
         prevent or restrict any Party or Meter Operator Party enforcing any
         obligation (including suing for a debt) owed to it under or pursuant to
         this Schedule or this Agreement.

20.7     Full negotiation: Each Party and each Meter Operator Party acknowledges
         and agrees that the foregoing provisions of this Part 8 have been the
         subject of discussion and negotiation and are fair and reasonable
         having regard to the circumstances as at the date this Schedule came
         into effect.



<PAGE>


                                                    PART 9

                                                    ACCESS

21.      ACCESS

21.1     Access to Party's and Meter Operator Party's property: Each Party and
         Meter Operator Party hereby agrees to grant to any Invitee and, in the
         case of a Meter Operator Party, the Registrant of the Metering System
         in respect of the Metering System of which it is Operator, and, in the
         case of a Registrant of a Metering System, the Meter Operator Party
         which is the Operator in respect of that Metering System:-

         (a)        full right during the currency of this Agreement to enter
                    upon and through and remain upon, or do any other act
                    contemplated by this Schedule 21 which would otherwise
                    constitute a trespass upon, any part of such Party's or, as
                    the case may be, Meter Operator Party's, property;

         (b)        in the case of the Operator or the Settlement System
                    Administrator, full right to remove any part of Metering
                    Equipment forming part of such property to a laboratory or
                    test house in accordance with the provisions of this
                    Schedule; and

         (c)        in the case of the Pool Auditor, full right to perform such
                    tasks and to do all such acts and things as are necessary
                    for the purpose of performing audits, tests, reviews and
                    checks under the SSA Arrangements, including full right to
                    carry out such tests on Metering Equipment provided that the
                    person or persons allocated to carry out such tests by the
                    Pool Auditor is or are suitably qualified in the operation
                    of Metering Equipment,

         provided always that such access rights conferred by or pursuant to
         this paragraph shall be granted only to the extent necessary for the
         purposes of this Schedule and shall be subject to the other provisions
         of this paragraph 21.

21.2 Invitees:  An Invitee for the purposes of this  paragraph 21 shall comprise
     any one or more of the following:-

(i)  the Settlement System Administrator acting through any reasonably nominated
     employees, agents or contractors;

     (ii) the  Executive  Committee  acting  through  any  reasonably  nominated
          persons;

         (iii)      the Equipment Owner for the purposes only of fulfilling its
                    obligations under paragraph 7.1.3;

         (iv)      the Pool Auditor acting through any partner or employee;

         (v)        the auditor carrying out the Scheduling and Despatch Review
                    acting through any partner or employee;

         (vi)       the Ancillary Services Provider acting through any
                    reasonably nominated employees, agents or contractors; and

         (vii) the Grid Operator acting through any reasonably nominated
employees, agents or contractors.

21.3     Access to property of Second Tier Customers, ERS First Tier Customers,
         Non-Pooled Generators and Third Parties: The Registrant of a Metering
         System and the Meter Operator Party which is the Operator or Potential
         Operator of that Metering System hereby jointly and severally agree to
         use all reasonable endeavours to, and to co-operate with each other for
         the purpose of procuring for the benefit of each Invitee and for each
         other:-

         (a)        full right to enter upon and through and remain upon, or do
                    any other act contemplated by this Schedule which would
                    otherwise constitute a trespass upon, any part of the
                    property:-

                    (i)   of the Second Tier Customer or ERS First Tier Customer
                          in respect of which that Registrant is the Supplier;

                    (ii) of the Non-Pooled Generator from which that Registrant
receives supply; and

                    (iii) of any other person which is not a party to this
                          Agreement (the "Third Party") but the exercise of
                          whose rights would prevent, in relation to such Second
                          Tier Customer, ERS First Tier Customer, Non-Pooled
                          Generator, the Registrant, the Meter Operator Party or
                          any Invitee from performing its obligations under this
                          Schedule or this Agreement and the existence of whose
                          rights is known to, or ought reasonably be known to,
                          the Registrant or, as the case may be, the Meter
                          Operator Party;

         (b)        in the case of the Operator or the Settlement System
                    Administrator, full right to remove all or any part of
                    Metering Equipment forming part of such property to a
                    laboratory or test house in accordance with the provisions
                    of this Schedule; and

         (c)        in the case of the Pool Auditor, full right to perform such
                    tasks and to do all such acts and things as are necessary
                    for the purpose of performing audits, tests, reviews and
                    checks under the SSA Arrangements, including full right to
                    carry out such tests on Metering Equipment provided that the
                    person or persons allocated to carry out such tests by the
                    Pool Auditor is or are suitably qualified in the operation
                    of Metering Equipment,

         provided always that such access rights conferred by or pursuant to
         this paragraph shall be granted only to the extent necessary for the
         purposes of this Schedule and shall be subject to the other provisions
         of this paragraph 21.

21.4     Failure to procure access: If, after having used all such reasonable
         endeavours to procure access rights in accordance with this paragraph
         21 in respect of a Second Tier Customer, an ERS First Tier Customer, a
         Non-Pooled Generator or Third Party referred to in paragraph 21.3, a
         Registrant and/or Meter Operator Party have been unable to procure any
         such rights the Registrant:-

         (i)        hereby undertakes not to make any future supplies to such
                    Second Tier Customer or ERS First Tier Customer at the Site
                    in respect of which such access rights are required until
                    such access rights have been obtained and if supplying such
                    Second Tier Customer or ERS First Tier Customer at such Site
                    to cease forthwith to supply such Second Tier Customer or
                    ERS First Tier Customer at that Site;

         (ii)       hereby undertakes not to take any future supply of
                    electricity from such Non-Pooled Generator at the Site in
                    respect of which such access rights are required until such
                    access rights have been obtained and if taking a supply of
                    electricity from such Non-Pooled Generator at such Site to
                    cease forthwith to take a supply of electricity from such
                    Non-Pooled Generator at that Site; and

         (iii)      shall notify the Settlement System Administrator in
                    accordance with the relevant Agreed Procedure of that fact.

         The Settlement System Administrator shall be entitled to assume that
         the consents of any Third Parties shall have been obtained in
         accordance with the provisions of this paragraph until such time as it
         is fixed with notice to the contrary.

21.5     Right of access: The right of access provided for in paragraphs 21.1
         and 21.3 shall include the right to bring on to such Meter Operator
         Party's, Party's, Second Tier Customer's, ERS First Tier Customer's,
         Non-Pooled Generator's or Third Party's property such vehicles, plant,
         machinery and maintenance or other materials as shall be reasonably
         necessary for the purposes of this Schedule.

21.6     Authorisation: Each Meter Operator Party or, as the case may be, Party
         shall ensure that any particular authorisation or clearance which is
         required to be given to ensure access to any Invitee, Registrant or
         Meter Operator Party in accordance with this paragraph is available on
         arrival.

21.7 Safety:  Subject to the right of the Settlement  System  Administrator  to
     inspect  without notice pursuant to paragraph  8.2.2,  each Meter Operator
     Party or,  as the case may be,  Party shall  procure  that all  reasonable
     arrangements  and  provisions  are made and/or revised from time to time as
     and when  necessary or desirable to  facilitate  the safe  exercise of any
     right of access granted pursuant to paragraph 21.1 or 21.3 with the minimum
     of  disruption,  disturbance  and  inconvenience.  Such  arrangements  and
     provisions  may, to the  extent  that the same  are  reasonable,  limit or
     restrict the exercise of such right of access and/or  provide for any Meter
     Operator Party or Party to make directions or regulations from time to time
     in  relation  to  a specified  matter.  Matters  to  be  covered  by  such
     arrangements and/or provisions include:-

         (i)       the identification of any relevant Metering Equipment;

         (ii)       the particular access routes applicable to the land in
                    question having particular regard for the weight and size
                    limits on those routes;

         (iii)     any limitations on times of exercise of the right of access;

         (iv)       any requirements as to prior notification and as to
                    authorisation or security clearance of individuals
                    exercising such right of access and procedures for obtaining
                    the same;

         (v)        the means of communication to the Meter Operator Party or,
                    as the case may be, Party (and all employees and/or
                    contractors who may be authorised from time to time to
                    exercise such right of access) of any relevant directions or
                    regulations made by the Meter Operator Party or, as the case
                    may be, Party; and

         (vi)       the identification of and arrangements applicable to
                    personnel exercising the right of access granted by
                    paragraphs 21.1 or 21.3.

                    Each Party or Meter Operator Party shall (and shall procure
                    that all persons exercising any right of access on behalf of
                    such Party or Meter Operator Party) observe and perform any
                    such arrangements and all provisions (or directions or
                    regulations issued pursuant thereto) made from time to time.

21.8     Damage: Each Party or Meter Operator Party shall procure that all
         reasonable steps are taken in the exercise of any right of access by or
         on behalf of such Party or Meter Operator Party to:-

         (a)        avoid or minimise damage in relation to any Meter Operator
                    Party's, Party's, Second Tier Customer's, ERS First Tier
                    Customer's, Non-Pooled Generator's or other Third Party's
                    property; and

         (b)        cause as little disturbance and inconvenience as possible to
                    any Meter Operator Party, Party, Second Tier Customer, ERS
                    First Tier Customer, Non-Pooled Generator or other Third
                    Party or other occupier of such Meter Operator Party's,
                    Party's, Second Tier Customer's, ERS First Tier Customer's,
                    Non-Pooled Generator's or other Third Party's property,

         and shall make good any damage caused to such property in the course of
         exercise of such rights as soon as may be practicable. Subject to this,
         all such rights of access shall be exercisable free of any charge or
         payment of any kind.

21.9     Licence Restricted Parties:

         (a)        This paragraph 21.9 shall apply to any area owned or
                    occupied by any Party, Meter Operator Party or any
                    subsidiary of such Party or Meter Operator Party, Second
                    Tier Customer, ERS First Tier Customer, Non-Pooled Generator
                    or Third Party (each a "Licence Restricted
                               ------------------
                    Party") which is the holder of or subject to a licence
                    granted under the Nuclear Installations Act 1965 (a "Nuclear
                    Site Licence") or subject to restrictions in relation
                              --------------------
                    to a Nuclear Site Licence, where such area is subject to
                    that Nuclear Site Licence but, in respect of Energy
                    Settlements and Information Services Limited, this paragraph
                    21.9 shall apply subject to the provisions of any other
                    agreement between the Licence Restricted Party and NGC (or
                    any of its subsidiaries) imposing restrictions on NGC's (or
                    any of its subsidiaries') right of access to any area owned
                    by the Licence Restricted Party subject to (or subject to
                    restrictions in relation to) a Nuclear Site Licence.

         (b) This paragraph 21.9 shall take precedence over any contrary
provisions of this Schedule.

         (c)        No Party or Meter Operator Party shall enter or attempt to
                    enter or permit or suffer any person to enter or attempt to
                    enter any area owned or occupied by the Licence Restricted
                    Party to which a Nuclear Site Licence applies except
                    strictly in accordance with the provisions, restrictions and
                    conditions of the Nuclear Site Licence.

         (d)        The Licence Restricted Party shall be entitled to take
                    reasonable action of any kind whatsoever relating to or
                    affecting access to its property as it considers on
                    reasonable grounds to be necessary in order to enable the
                    Licence Restricted Party to comply with the provisions,
                    restrictions and conditions of a Nuclear Site Licence or
                    avert or minimise any reasonably anticipated breaches
                    thereof.

21.10    Denial of access: The Settlement System Administrator shall not incur
         any liability under this Schedule or this Agreement in the event it
         cannot perform any of its duties hereunder due to access to Metering
         Equipment being denied to it save that the Settlement System
         Administrator shall inform the Executive Committee thereafter.



<PAGE>


                                                    PART 10

                                           COMMUNICATIONS EQUIPMENT

22.      COMMUNICATIONS EQUIPMENT

22.1 Compatibility:  Communications  Equipment at or relating to any Site (which
     whenever used in this paragraph 22 shall include all Qualifying Sites) must
     be compatible  with the  communications  links  provided by the  Settlement
     System Administrator  pursuant to Clause 60.6.3(a) in respect of that Site.
     Prior to the installation of Communications Equipment at or relating to any
     Site  the  Tariff  Operator  shall  consult  with  the  Settlement   System
     Administrator  to  ensure  that  such  Communications   Equipment  will  be
     compatible with such  communication  links. Where a Tariff Operator becomes
     aware that  Communications  Equipment  at or relating to a Site is used for
     purposes  other than in  connection  with  Settlement,  it shall notify the
     Settlement  System  Administrator of any such use or purposes to which that
     Communications Equipment is put.

22.2     Settlement System Administrator's responsibility in respect of
         communications links: Subject to the requirement of the Settlement
         System Administrator to collect data in accordance with Clause 60.6.1
         and subject to the provisions of paragraph 22.1, the Settlement System
         Administrator shall use all reasonable endeavours to ensure that the
         communications link provided by it (but which, for the avoidance of
         doubt, does not form part of Communications Equipment) to any Site
         pursuant to Clause 60.6.3(a) is of the type requested by the Tariff
         Operator.

22.3     Tariff payments:

         (a)        The Settlement System Administrator shall pay from time to
                    time to each Tariff Operator in respect of a Site for which
                    it is the Tariff Operator, an amount (if any) determined in
                    accordance with the relevant Tariff and payable in respect
                    of Communications Equipment installed and maintained at or
                    relating to such Site by such Tariff Operator for the
                    purposes of this Agreement.

          (b)  The Settlement  System  Administrator shall recover from time to
               time (for credit to Pool Members as the Executive Committee shall
               from time to time direct) from a Tariff  Operator  and a Tariff
               Operator shall pay from time to time (for credit to Pool Members
               as the Executive Committee shall from time to time direct) to the
               Settlement System Administrator in respect of the costs of manual
               on-site interrogation or data estimation costs incurred by it in
               respect  of  each  Site at  which  there  is not  installed and
               maintained   Communications Equipment  in  accordance  with  the
               requirements  of this Schedule, such amounts (if any) determined
               in  accordance  with the relevant  Tariff.  Where the Settlement
               System  Administrator  has received any such payment pursuant to
               this  sub-paragraph  22.3(b) it shall be set off in full against
               amounts  which  may  be  recovered  by  the   Settlement System
               Administrator pursuant to paragraph 22.6 or 22.7.

         (c)        The Settlement System Administrator may, and at the
                    direction of the Executive Committee shall, without notice
                    to the relevant Tariff Operator set off amounts payable to
                    it by that Tariff Operator under the relevant Tariff against
                    amounts payable by the Settlement System Administrator to
                    that Tariff Operator, under the relevant Tariff. Any amounts
                    so set off by the Settlement System Administrator under this
                    paragraph 22.3 shall be deemed to have been received by the
                    Settlement System Administrator for the purposes of
                    paragraph 22.3(b).

         (d)        Notwithstanding the terms of any Tariff, a Tariff Operator
                    shall not be entitled to receive payment of or otherwise
                    recover any sums for or relating to goods or services
                    delivered or provided by it under or for the purposes of
                    this Agreement and invoiced or claimed by the Tariff
                    Operator to or from the Settlement System Administrator or
                    Pool Members more than 90 days after the end of the month in
                    which such goods or services were delivered or provided.

22.4     Refunds: Where a Tariff Operator is removed, resigns or otherwise
         ceases to be Tariff Operator at or relating to any Site it shall pay to
         the Settlement System Administrator such amount (if any) as is set out
         in the relevant Tariff by way of reimbursement of amounts paid to it
         pursuant to paragraph 22.3.

22.5 Additional payments: If a Tariff Operator can demonstrate to the reasonable
     satisfaction  of the  Settlement  System  Administrator  that any  relevant
     payment to be made pursuant to this paragraph 22 and in accordance with the
     relevant  Tariff in respect of any  particular  Site as is described in the
     relevant  Tariff  does not  reflect  the cost to such  Tariff  Operator  of
     providing  in respect of  Communications  Equipment  at or relating to such
     Site  installation  and  maintenance  services in an efficient and economic
     manner then the Settlement System Administrator may negotiate an additional
     payment to such Tariff Operator in respect of  Communications  Equipment at
     or  relating  to such  Site  provided  that the  Tariff  Operator  shall be
     entitled to receive such additional  payment only if and to the extent that
     the  economic  and  efficient  provision of  installation  and  maintenance
     services in respect of the Communications  Equipment at or relating to that
     Site is in fact effected.  If the Tariff Operator and the Settlement System
     Administrator  fail to agree on the amount of an  additional  payment,  the
     Tariff Operator may refer the matter to the Executive Committee which shall
     determine the same.  The relevant  Meter  Operator Party may refer any such
     decision of the  Executive  Committee  to the Director and for the purposes
     thereof shall be deemed to be exercising a Dissentient  Pool Member's right
     of appeal  pursuant to and in accordance  with Clause 13.5.  The Settlement
     System  Administrator  shall  send the  Executive  Committee  on  request a
     written report giving  reasonable  details of any such additional  payments
     made or proposed to be made.

22.6     Costs beyond SSA's control: Payments which are made to Tariff Operators
         in respect of the provision of installation and maintenance services in
         respect of Communications Equipment (whether or not pursuant to or in
         addition to the relevant Tariff) and payments for communications links
         shall be a cost beyond the control of the Settlement System
         Administrator.

22.7 Recovery  of  costs:  All costs  and xpenses relating  to  the  payment
     arrangements referred  to  in  this  Schedule  for the  installation and
     maintenance of Communications Equipment, the relevant Tariff or otherwise,
     including payments which are made to Tariff Operators for the provision of
     installation  and  maintenance services  in  respect of  Communications
     Equipment,  payments for communications links, management time and expenses
     of the Settlement  System  Administrator and the cost of funds borrowed to
     finance such costs, expenses and payments, may be recovered in full by the
     Settlement System Administrator in accordance with the Charging Procedure.

22.8     No agency: No agency relationship (whether express or implied) shall
         be, or be deemed to be, created between any Tariff Operator and the
         Settlement System Administrator or any other person as a result of the
         payments to be made pursuant to this paragraph 22.

22.9     Tariff Operators:

         (a)        There shall at any point in time be no more than one Tariff
                    Operator in respect of each Metering System or Metering
                    Equipment.

         (b)        Each Tariff Operator shall, for so long as it is entitled to
                    receive payments in respect of Communications Equipment at
                    or relating to a Site which is not a 1993/1994 Tariff
                    Qualifying Site (as defined in the Tariff which is entitled
                    the Tariff for 1993/1994 Sites), in respect of that
                    Communications Equipment (but not in respect of any other
                    Metering Equipment which is not Communications Equipment):

                    (i)   ensure there is installed Communications Equipment
                          (including its component parts) which complies with
                          the provisions of this Schedule, Part XV of this
                          Agreement and the relevant Code of Practice or shall
                          be the subject of, and comply with, a dispensation
                          agreed in accordance with paragraph 14, and which uses
                          such communications protocols as may be selected in
                          accordance with paragraph 7.2.2 of this Schedule;

                    (ii)  at its own cost and expense (but without prejudice to
                          its right to charge any other person for such service
                          pursuant to another agreement or arrangement) keep
                          installed, in good working order, repair and condition
                          that Communications Equipment (including its component
                          parts) to allow for the correct transmission of data
                          in accordance with this Agreement (whether or not such
                          data are actually required to be transmitted for the
                          purposes of this Agreement); and

                    (iii) provide to the Settlement System Administrator such
                          information in respect of that Communications
                          Equipment as it would be required to provide pursuant
                          to this Schedule, Part XV of this Agreement and the
                          relevant Agreed Procedure, were it, in respect of that
                          Qualifying Site at or in relation to which that
                          Communications Equipment is installed, an Operator in
                          respect of a Site at the point of connection to a
                          Second Tier Customer or an ERS First Tier Customer for
                          the purposes of the Settlement System Administrator
                          recording and keeping up-to-date details of that
                          Communications Equipment on the Register.

22.10    Transitional Arrangements: It is hereby expressly acknowledged and
         agreed by the Parties and Meter Operator Parties that, with effect from
         the date this provision comes into effect, references in the Tariff,
         which on 22nd April, 1994 became effective as at 1st January, 1994 (if
         not then superseded), to "Potential Operator" shall be read, with
         respect to any obligation then unperformed, or right then unenjoyed, as
         if that reference were a reference to a Tariff Operator.



<PAGE>


                                                    PART 11

                                          TRANSITIONAL ARRANGEMENTS

23.      TRANSITIONAL ARRANGEMENTS

23.1     Transitional Arrangements: With effect from the date this Schedule
came into effect (the "NSD Date")
                                    --------
         each Party which is at that date an Operator or a Potential Operator
         shall be deemed to be a Meter Operator Party (in addition to continuing
         as a Party in any other capacity) and to have complied with all the
         requirements of or referred to in this Schedule 21 relating to
         admission as a Meter Operator Party and as an Operator. Such Parties
         are more particularly described in Annex 4 hereto. The Parties
         acknowledge and confirm that the deemed admission of an existing Party
         as a Meter Operator Party shall not affect that Party's rights and
         obligations under any agreement or arrangement relating to being an
         Operator entered into or existing between the Parties or any of them
         prior to such deemed admission, and that accordingly such agreement or
         arrangement shall continue notwithstanding the change and any reference
         to that Party being an Operator under this Agreement shall be construed
         as being an Operator as a Meter Operator Party.

23.2 Saving:  Notwithstanding  paragraph 23.1, each Party to which this Part 11
     applies expressly acknowledges and agrees that, notwithstanding any deemed
     satisfaction of the conditions which are required to be fulfilled as at the
     NSD Date in accordance with this Schedule for the purposes of admission as
     a Meter Operator Party and as Operator,  it shall be subject (but only with
     prospective  effect; that is to say to the effect that any conditions which
     apply as at the NSD Date are  deemed to be  fulfilled  and need not then be
     fulfilled  as a  continuing  obligation)  to  the  continuing  and  further
     conditions  for  registration  as an Operator  from time to time and to the
     provisions of paragraph 4.4, and that it shall be subject to the provisions
     for the  resignation, removal and  cessation as Operator in respect of any
     Metering  System,  or as Meter Operator  Party,  as the  case  may be,  in
     accordance  with the  provisions of this Schedule as at the date hereof and
     from time to time, and after any such resignation,  removal or cessation as
     a Meter Operator  Party,  it shall be subject in full to the procedures for
     admission  as a Meter  Operator  Party and  Operator as may be set out from
     time to time in this Schedule.



<PAGE>


                                     PART 12

               INCORPORATION OF OTHER PROVISIONS OF THIS AGREEMENT

24.      INCORPORATION BY REFERENCE

         Incorporation by reference: The provisions of Clauses 1.2, 1.3, 8.6,
         34.1, 34.2, 34.3, 37.3, 66.7, 68, 69, 70, 71, 74, 75, 76, 77, 78, 79,
         80, 81, 82, 83, 84 and 85 of the Pooling and Settlement Agreement,
         Sections 4 and 7 of Schedule 4 thereto and Sections 3 and 4 of Part E
         of the Appendix to that Schedule shall be deemed to be incorporated
         into this Schedule 21 mutatis mutandis as if each reference therein to
         the word "Party" were a reference to the words "Party and Meter
         Operator Party" and to the word "Parties" were to the words "Parties
         and Meter Operator Parties".



<PAGE>


                                                    PART 13

                                         QUALIFYING UNMETERED SUPPLIES

25.      QUALIFYING UNMETERED SUPPLIES

         Notwithstanding any of the other provisions of this Schedule, the
         provisions of Clause 60.19 and any Second Tier Unmetered Supplies
         Procedures shall, to the extent they are supplemental to or conflict
         with any other provisions of this Schedule, govern the rights and
         obligations of the Parties (including each Operator and each Meter
         Operator Party) in relation to Qualifying Unmetered Supplies.



<PAGE>


                                                    ANNEX 1

               Form of Meter Operator Party Admission Application

The Executive Committee for the
Pooling and Settlement System in England and Wales

[copy to: the Settlement System Administrator]

                                                           [Date]

Dear Sir,

1. We [insert full legal name and address of registered/principal office of
applicant] refer to Schedule 21 to the Pooling and Settlement Agreement for the
electricity industry in England and Wales dated 30th March, 1990 (as amended,
varied, supplemented, modified or suspended, the "Pooling and Settlement
Agreement").

2. Unless the context otherwise requires, words and expressions defined in the
Pooling and Settlement Agreement for the purposes of Schedule 21 to the Pooling
and Settlement Agreement shall bear the same meanings respectively when used
herein.

3. We hereby apply to be admitted as an additional party in accordance with, and
for the purposes only of, Schedule 21 to the Pooling and Settlement Agreement
pursuant to paragraph 3 and subject to the terms set out in paragraph 2 thereof.
We wish to participate thereunder in the capacity of a Meter Operator Party.

4. We hereby represent and warrant to the Executive Committee (for itself and on
behalf of all the Parties and Meter Operator Parties) that:-

         (A)       we are duly organised and validly existing under the laws 
of the jurisdiction of our
                    organisation or incorporation;

         (B)        we have the power to execute and deliver our Meter Operator
                    Party Accession Agreement and any other documentation
                    relating to that Agreement or the Pooling and Settlement
                    Agreement and such other agreements as are required thereby
                    and to perform our obligations hereunder or thereunder and
                    we have taken all necessary action to authorise such
                    execution, delivery and performance; and

         (C)        such execution, delivery and performance do not violate or
                    conflict with any law applicable to us, any provision of our
                    constitutional documents, any order or judgment of any court
                    or other agency of government applicable to us or any of our
                    assets or any contractual restriction on or affecting us or
                    any of our assets.

         We confirm that these representations and warranties will also be true
and correct in all material respects at the date of our admission as a New Meter
Operator Party.

5. We enclose the application fee of (pound)[ ]*.

6. We accept and agree to be bound by the terms of paragraph 3 of Schedule 21 to
the Pooling and Settlement Agreement.

                                Yours faithfully,

                            -------------------------
                      duly authorised for and on behalf of
            [insert full legal name of the New Meter Operator Party]



*        Insert current application fee prescribed by the Executive Committee.



<PAGE>


                                                    ANNEX 2

                                Form of Meter Operator Party Resignation Notice

The Secretary of the Executive Committee for the
Pooling and Settlement System in England and Wales

[copied to: the Settlement System Administrator]

                                                                  [Date]

Dear Sir,

1. We [insert full legal name and address of registered/principal office of
applicant] refer to Schedule 21 to the Pooling and Settlement Agreement for the
electricity industry in England and Wales dated 30th March, 1990 (as amended,
varied, supplemented, modified or suspended, the "Pooling and Settlement
Agreement").

2. Unless the context otherwise requires, words and expressions defined in the
Pooling and Settlement Agreement for the purposes of Schedule 21 to the Pooling
and Settlement Agreement shall bear the same meanings respectively when used
herein.

3. We hereby give notice pursuant to paragraph 5.1 of Schedule 21 to the Pooling
and Settlement Agreement that we are resigning as a Meter Operator Party with
effect from the date falling 28 days after receipt by you of this Meter Operator
Party Resignation Notice.

4. We confirm that in giving this notice of resignation, we are not and will not
be in breach of the restriction on resignation set out in paragraph 5.2 of
Schedule 21 to the Pooling and Settlement Agreement.

5. We acknowledge that our resignation as a Meter Operator Party is without
prejudice to our accrued rights and liabilities and any rights and liabilities
which may accrue to us in relation to the period during which we were a Meter
Operator Party under Schedule 21 to the Pooling and Settlement Agreement or any
agreement referred to in paragraph 5.2 of Schedule 21 to the Pooling and
Settlement Agreement.

6. We further expressly acknowledge and confirm that our resignation as a Meter
Operator Party pursuant to Schedule 21 to the Pooling and Settlement Agreement
is without prejudice to our past, present and future accrued or accruing rights
and liabilities as a Party

<PAGE>


to the Pooling and Settlement Agreement in any capacity whatsoever other than
that of Meter Operator Party.

                                               Yours faithfully,

                                           -------------------------
                                     duly authorised for and on behalf of
                               [insert full legal name of Meter Operator Party]



<PAGE>


                                                    ANNEX 3

                               Form of Meter Operator Party Accession Agreement

THIS SUPPLEMENTAL AGREEMENT is made on [           ] BETWEEN:-

(1)  [ ], a company  incorporated [with limited liability] under the laws of [ ]
     [(registered number [ ])] and having its [registered] [principal] office at
     [ ] (the "New Meter Operator Party"); and

(2)      [ ] (the "Nominee") on behalf of all the parties to the Pooling and
         Settlement Agreement referred to below.

WHEREAS:-

     (A)  by an  agreement dated 30th  March,  1990 made  between  the  Founder
          Generators named therein (1), the Founder Suppliers named therein (2),
          Energy  Settlements and  Information  Services  Limited  (formerly NGC
          Settlements  Limited) as Settlement System  Administrator  (3), Energy
          Pool Funds Administration Limited as Pool Funds Administrator (4), The
          National  Grid  Company plc as Grid  Operator and  Ancillary  Services
          Provider  (5),  and  Scottish  Power plc and  Electricite  de  France,
          Service National as Externally Interconnected Parties (6) (as amended,
          varied,   supplemented,   modified  or  suspended,  the  "Pooling  and
          Settlement  Agreement")  the parties  thereto agreed to give effect to
          and be bound by certain rules and  procedures  for the operation of an
          electricity trading pool and the operation of a settlement system;

(B)      by paragraph 2 of Schedule 21 to the Pooling and Settlement Agreement
         additional parties may be admitted to that Agreement for the purposes
         of, and only to be bound by and conferred rights in accordance with,
         Schedule 21 thereto in the capacity of Meter Operator Party; and

(C)      the New Meter Operator Party has requested that it be admitted as a
         Meter Operator Party pursuant to paragraph 3 of Schedule 21 to the
         Pooling and Settlement Agreement and each of the Parties and Meter
         Operator Parties hereby agrees to such admission.

NOW IT IS HEREBY AGREED as follows:-

1.       Unless the context otherwise requires, words and expressions defined in
         the Pooling and Settlement Agreement used for the purposes of Schedule
         21 to the Pooling and Settlement Agreement shall bear the same meanings
         respectively when used herein.

2.       The Nominee (acting on behalf of each of the Parties and Meter Operator
         Parties) hereby admits the New Meter Operator Party as an additional
         Meter Operator Party under Schedule 21 to the Pooling and Settlement
         Agreement on the terms and conditions hereof and with effect from
         [insert effective date of admission].

3.       The New Meter Operator Party hereby accepts its admission as a Meter
         Operator Party and undertakes with the Nominee (acting on behalf of
         each of the Parties and Meter Operator Parties) to perform and to be
         bound by the terms and conditions of Schedule 21 to the Pooling and
         Settlement Agreement as a Meter Operator Party as from the [insert
         effective date of admission].

4.       For all purposes in connection with the Pooling and Settlement
         Agreement the New Meter Operator Party shall as from the [insert
         effective date of admission] be treated including for the purposes of
         paragraph 2 of Schedule 21 to the Pooling and Settlement Agreement as
         if it had been a signatory of the Pooling and Settlement Agreement as a
         Meter Operator Party and as if this Agreement were part of the Pooling
         and Settlement Agreement, and the rights and obligations of the Parties
         and Meter Operator Parties shall be construed accordingly.

5.       The New Meter Operator Party, the Parties and the Meter Operator
         Parties expressly acknowledge and confirm that, pursuant to paragraph
         2.1 of Schedule 21 to the Pooling and Settlement Agreement with effect
         from [insert effective date of admission] the New Meter Operator Party
         shall only be bound by, and conferred rights in accordance with,
         Schedule 21 to the Pooling and Settlement Agreement in the sole
         capacity of Meter Operator Party.

6.       The New Meter Operator Party expressly consents to be bound by the
         provisions of paragraphs 2.2 and 2.3 of Schedule 21 to the Pooling and
         Settlement Agreement.

7.       This Agreement and the Pooling and Settlement Agreement shall be read
         and construed as one document and references in the Pooling and
         Settlement Agreement to the Pooling and Settlement Agreement (howsoever
         expressed) shall be read and construed as references to the Pooling and
         Settlement Agreement and this Agreement.

8.       This Agreement shall be governed by and construed in all respects in
         accordance with English law and the provisions of Clauses 83 and 84 of
         the Pooling and Settlement Agreement as incorporated into Schedule 21
         thereto by paragraph 24 thereof shall apply hereto mutatis mutandis.

AS WITNESS the hands of the duly authorised representatives of the parties
hereto the date and year first above written.

[New Meter Operator Party]

By:

Notice details (Clause 75 of the Pooling and Settlement Agreement as
incorporated into Schedule 21 thereto by paragraph 24 thereof)

Address:

Telex number:

Facsimile number:

Attention:

[Nominee]

(for and on behalf of each of the parties  (including Meter Operator Parties) to
     the Pooling and Settlement Agreement)

By:



<PAGE>


                                                    ANNEX 4

                                    List of Existing Meter Operator Parties
                                Qualifying under the Transitional Arrangements

Derwent Cogeneration Limited Eastern Group plc East Midlands Electricity plc Elm
Energy & Recycling (UK) Limited Humber Power Limited Joseph Crosfield & Sons,
Limited London Electricity plc Manweb plc Marc Rich & Co. AG Medway Power
Limited Meter Operators Limited Midlands Electricity plc The National Grid
Company plc National Power PLC Northern Electric plc NORWEB plc Nuclear Electric
plc PowerGen plc Schlumberger Industries Limited Scottish Hydro-Electric PLC
SEEBOARD plc Southern Electric plc South Wales Electricity plc South Western
Electricity plc Teesside Power Limited Yorkshire Electricity Group plc



<PAGE>


                                                    ANNEX 5

                                                   Diagrams



<PAGE>


                                                    ANNEX 6

                                    List of Existing Meter Operator Parties

Control Devices and Services Limited Derwent Cogeneration Limited E Squared
Limited Eastern Group plc East Midlands Electricity plc Elm Energy & Recycling
(UK) Limited Humber Power Limited Joseph Crosfield & Sons, Limited Keadby
Generation Limited London Electricity plc Manweb plc Marc Rich & Co. AG Medway
Power Limited Meter Operators Limited Midlands Electricity plc Mission Energy
Services Limited The National Grid Company plc National Power PLC Northern
Electric plc Northern Energy Services Limited NORWEB plc Nuclear Electric plc
PowerGen plc Powermet Limited Schlumberger Industries Limited Scottish
Hydro-Electric PLC Scottish Power plc SEEBOARD plc Slough Electricity Supplies
Limited Southern Electric plc South Wales Electricity plc South Western
Electricity plc Teesside Power Limited Yorkshire Electricity Group plc




<PAGE>


                                                  SCHEDULE 22

                                   1998 PROGRAMME FUNDING AND COST RECOVERY

1.       DEFINITIONS AND INTERPRETATION

         1.1 Definitions: In this Schedule, except where the context otherwise
requires:

                  "1998 Programme" means the programme of work undertaken by the
                  Pool to establish the systems and processes (including the
                  EAC/AA System, the ISRA System and the NHH Data Aggregation
                  System) to support the trading and settlement system in
                  England and Wales to facilitate the full introduction of a
                  competitive supply market on 1st April, 1998, as described in
                  the Operational Framework;

               "1998 Programme  Costs" means the development and implementation
                    costs  of  the  1998  Programme   comprising the  following
                    (without double-counting):-

                    (a)  the costs and expenses of implementing Approved Funding
                         Tranches    approved   in   the  period until   the
                         Implementation Date; and

                  (b)     Accrued Costs,

                  in so far as such costs relate to the 1998 Programme but, for
                  the avoidance of doubt, shall exclude those costs and charges
                  to be paid by the Scottish PESs or Scottish Settlements
                  pursuant to section 9 of Schedule 23;

                  "1998 Sub-Committees"  means   the   sub-committees,    the
                         Programme  Board and  project  boards  established  to
                         develop and implement the 1998 Programme;

                  "Accrued Costs" means the costs accrued in relation to the
                  1998 Programme prior to 1st April, 1996, which the Pool
                  Members agree amount to (pound)2,878,000 at 1st April, 1996,
                  together with interest calculated at the base rate of Barclays
                  Bank PLC from time to time compounded, with monthly rests,
                  until the date of payment, which costs are repayable in
                  accordance with sub-section 2.4;

                  "Aggregate Charging Limit" or "ACL" means the aggregate amount
                  of 1998 Programme Costs recoverable by the Public Electricity
                  Suppliers pursuant to Section 8;

                  "Approved Funding Tranches" means the Funding Tranches
                  approved by the Steering Group in accordance with sub-section
                  3.4 or by Public Electricity Suppliers in accordance with
                  sub-section 7.2;

                  "EAC/AA System" means the estimation of annual consumption and
                  annualised advance software and systems which are to be
                  developed for the benefit of Pool Members pursuant to the 1998
                  Programme;

                  "EPFAL" means Energy Pool Funds Administration Limited
                  (registered number 2444187) whose registered office is situate
                  at 185 Park Street, London SE1 9DY or such other person as may
                  be appointed as its successor from time to time as Pool Funds
                  Administrator pursuant to Schedule 15;

                  "Financing Costs" or "FC" means the amount of costs to be
                  incurred and recovered by the Public Electricity Suppliers in
                  respect of their financing of 1998 Programme Costs, such
                  amount being equal to interest upon 1998 Programme Costs at
                  the base rate of Barclays Bank PLC from time to time
                  compounded, with monthly rests, accruing from the date of
                  payment by the Public Electricity Suppliers of such 1998
                  Programme Costs, until the date the Public Electricity
                  Suppliers are reimbursed in accordance with Section 8;

                  "Funder" means a person for the time being being party to this
                  Agreement who is a Public Electricity Supplier or a Scottish
                  PES;

                  "Funding Tranches" means individual and groups of work
                  packages submitted for approval by the Steering Group or
                  Public Electricity Suppliers in accordance with sub-section
                  3.4 or, as the case may be, Section 7;

                    "Implementation  Date" means the date on which the first of
                         the following occurs:

                    (a)  a  competitive supply  market  begins  to  operate  in
                         respect of customers below 100kW;

                  (b)     the Executive Committee requires work on the 1998
                          Programme to cease as agreed or sanctioned by the
                          Secretary of State or the Director; and

                  (c)     the systems and processes developed by the Pool
                          required to facilitate the beginning of the
                          competitive supply market in respect of customers
                          below 100kW would be able to operate, as determined by
                          an independent expert jointly appointed by the Public
                          Electricity Suppliers, the Chief Executive and the
                          Director, but are not capable of operating because of
                          other circumstances,

                  but in any event no earlier than 1st April, 1998;

                  "ISRA System" means the initial settlement and reconciliation
                  software and systems for electricity trading in England and
                  Wales which are to be developed for the benefit of Pool
                  Members pursuant to the 1998 Programme;

                  "NHH Data Aggregation System" means the non half hour data
                  aggregation software and systems which are to be developed for
                  the benefit of Pool Members pursuant to the 1998 Programme;

                    "Non-paying Funder" has the meaning ascribed to that term in
                         paragraph 2.3.3;

                  "Operational Framework" means the 1998 Operational Framework
                  of the Pool (Release 4.2) submitted to the Director as of 31st
                  March, 1996;

                    "Other Pool Members" has the meaning  ascribed to that term
                         in Schedule 23;

                  "PES Votes" means, in relation to a Public Electricity
                  Supplier, the number of votes to which such Public Electricity
                  Supplier is entitled from time to time, determined in
                  accordance with Section 6;

                  "Pool" means the Electricity Pool of England and Wales;

                  "Programme Board" means the 1998 Programme Management Board
                  established by the Executive Committee to monitor, review and
                  oversee implementation of the 1998 Programme;

                  "Programme Budget" means an estimate of the overall cost of
                  implementing the 1998 Programme, including detailed cost
                  estimates for each element of the 1998 Programme required to
                  be incurred, each element to be broken down into all
                  identified Funding Tranches with each Funding Tranche to
                  contain the details of the timing of the work, the scope of
                  work and the likely costs and expenses to be incurred in its
                  performance, approved in accordance with Section 5;

                  "Programme Share" means, in relation to a Public Electricity
                  Supplier or a Scottish PES, the share of 1998 Programme Costs
                  of such Public Electricity Supplier or (as the case may be)
                  such Scottish PES, determined in accordance with Section 6;

                  "Requisite Proportion" means, in the case of the approval by
                  Public Electricity Suppliers in writing or in separate meeting
                  of the matters referred to:

                  (a)     in paragraphs 7.2(a) and 7.2(c), 65 per cent.; and

                  (b)     in paragraph 7.2(b), 50 per cent.,

                  in the case of written consent, of the total PES Votes of all
                  Public Electricity Suppliers and, in the case of a separate
                  general meeting, of the total PES Votes of those Public
                  Electricity Suppliers as (being entitled to do so) vote in
                  person or by proxy at the relevant separate general meeting of
                  which notice specifying the intention to propose the
                  resolution has been duly given;

                    "Scottish PES"  means Scottish   Hydro-Electric   PLC  and
                         Scottish Power plc;


                    "Scottish Settlements"    means   Scottish    Electricity
                         Settlements  Limited (registered  in  Scotland  number
                         SC169212);

                  "Steering Group" means the 1998 Programme Steering Group
                  established pursuant to Section 3, save that if the Executive
                  Committee so determines, such Steering Group may be disbanded,
                  in which case the Executive Committee shall act as and have
                  the same rights and obligations as the Steering Group for the
                  purposes of this Schedule, as such rights and obligations are
                  set out in Section 3, and in that event references in this
                  Schedule to a member of the Steering Group appointed by a
                  member of the Executive Committee appointed by Public
                  Electricity Suppliers shall be read as references to any
                  member of the Executive Committee appointed by Public
                  Electricity Suppliers; and

                    "Total 1998 Programme Costs" has the meaning given to it in
                         Section 8.1.3.

         1.2      Interpretation: In the event of any inconsistency or conflict
                  between the provisions of this Schedule and the other
                  provisions of the Agreement in relation to the 1998 Programme
                  Costs or the Operational Framework, the provisions of this
                  Schedule shall, unless otherwise expressly provided, prevail.

2.       PROGRAMME FUNDING

         2.1      Programme Costs: All 1998 Programme Costs shall be paid or
                  reimbursed by Public Electricity Suppliers and the Scottish
                  PESs or by a person or persons on their behalf in accordance
                  with this Schedule.

         2.2      Allocation of 1998 Programme Costs after 1st April, 1996: In
                  respect of each month from (and including) April 1996, the
                  1998 Programme Costs incurred in such month shall be allocated
                  amongst Public Electricity Suppliers and the Scottish PESs
                  according to their respective Programme Shares.

         2.3      Payment and collection:

                  2.3.1   EPFAL shall collect from Public Electricity Suppliers
                          and the Scottish PESs the amounts which they are
                          obliged to pay towards the 1998 Programme Costs and
                          each Public Electricity Supplier and each Scottish PES
                          will be obliged to pay its proportionate share of the
                          1998 Programme Costs (together with Value Added Tax
                          thereon, if applicable) against receipt of any invoice
                          therefor issued by EPFAL.

                  2.3.2   EPFAL shall arrange for collection from each Public
                          Electricity Supplier and each Scottish PES of its
                          proportionate share of the 1998 Programme Costs in
                          such manner as may be agreed by EPFAL with the Public
                          Electricity Suppliers from time to time (which may
                          include collection in advance) and Public Electricity
                          Suppliers and the Scottish PESs shall comply with such
                          collection procedures and, in particular, shall make
                          payment within the time period prescribed by such
                          procedures.

                  2.3.3   If any Public Electricity Supplier or Scottish PES
                          fails to pay an amount properly due under this
                          Schedule within fifteen (15) days of the due date for
                          such payment (such Public Electricity Supplier or
                          Scottish PES being a "Non-paying Funder") each
                                -----------------
                          Pool Member (other than the Non-paying Funder) shall
                          be severally liable for its Contributory Share
                          (calculated on the basis that the Points allocated to
                          the defaulting Non-paying Funder are disregarded) and
                          EPFAL shall accordingly be entitled to recover the due
                          proportion of that amount from each Pool Member (other
                          than the Non-paying Funder). In that event, EPFAL
                          shall advise each Pool Member of the amount payable by
                          invoice despatched to each Pool Member and each Pool
                          Member shall pay the amount advised in the relevant
                          invoice within fifteen (15) days after the invoice
                          date.

                  2.3.4   A Non-paying Funder shall indemnify and keep
                          indemnified each Pool Member on demand against all
                          sums properly paid by such Pool Member pursuant to
                          this sub-section 2.3.

                  2.3.5   Each Pool Member shall give notice to the Pool Funds
                          Administrator before instituting any action or
                          proceedings in any court to enforce payments due to it
                          pursuant to this Schedule. Upon receipt of any notice
                          under this paragraph 2.3.5, the Pool Funds
                          Administrator will as soon as practicable notify the
                          Executive Committee, all Pool Members and the
                          Director. The provisions of sub-section 24.4 of
                          Schedule 11 shall apply mutatis mutandis in respect of
                          any payment due from a Non-paying Funder pursuant to
                          this Schedule.

                  2.3.6   Upon EPFAL becoming aware of a Public Electricity
                          Supplier or a Scottish PES becoming a Non-paying
                          Funder, it shall notify the Executive Committee, the
                          remaining Pool Members and the Director, and the
                          Executive Committee shall convene and cause to be
                          convened a general meeting of Pool Members as soon as
                          possible thereafter, which meeting will determine
                          whether any further 1998 Programme Costs shall be
                          incurred.

                  2.3.7   The provisions of paragraphs 15.2.3, 15.2.4 and
                          sub-section 15.3 of Schedule 15 shall in any event
                          apply mutatis mutandis in respect of all payments
                          required to be made pursuant to this Section 2.

         2.4      Accrued Costs: As soon as reasonably practicable, but in any
                  event no later than 1st April, 1997, the Pool Members will pay
                  each other such sums as will ensure that all Accrued Costs
                  have effectively been paid for or reimbursed only by Public
                  Electricity Suppliers and Scottish PESs and, as between Public
                  Electricity Suppliers and Scottish PESs, according to their
                  respective Programme Shares.

3.       PROGRAMME EXPENDITURE AND THE STEERING GROUP

         3.1      Authority to incur expenditure: No 1998 Programme Costs shall
                  be incurred by 1998 Sub-Committees other than pursuant to
                  Approved Funding Tranches.

         3.2      Establishment: Pool Members hereby establish the Steering
                  Group as a sub-committee of the Executive Committee upon the
                  terms and subject to the conditions of this Schedule 22.

          3.3  Steering Group Members:  Each member of the Executive  Committee
               shall have the right to appoint a member of the Steering Group.

         3.4      Approval of programme expenditure:

                  3.4.1   The Steering Group will notify each 1998 Sub-Committee
                          and such persons as may be nominated by each Public
                          Electricity Supplier in writing to the Steering Group
                          from time to time ("PES Nominees"), no later than 10
                          working days prior to holding any meeting of the date
                          that meeting will be held, save that, if at least 5
                          members of the Steering Group (including at least 3
                          appointed by members of the Executive Committee
                          appointed by Public Electricity Suppliers) consent, a
                          meeting of the Steering Group may be held on 48 hours'
                          notice.

                   3.4.2 Prior to approving any further work packages after
                         15th July, 1996, undertaking or commissioning any work
                         in respect of the 1998  Programme, the Programme Board
                         or any member of the Steering Group shall submit one or
                         more  Funding  Tranches to the Steering  Group (with a
                         copy to all PES  Nominees) at least 5 working  days in
                         advance  of any meeting  of the  teering  Group,  for
                         approval. Each Funding Tranche shall contain details of
                         the scope of the work proposed to be  undertaken  and a
                         budget of all costs associated with that work, together
                         with a  comparison  of all  its  elements  against  the
                         Programme Budget(or, if the Programme Budget shall not
                         then have been agreed, against the planned budget). Any
                         amount to be reimbursed in respect of costs incurred in
                         relation  to work  packages approved  in  the period
                         between 31st March, 1996 and 15th July, 1996 shall also
                         be the subject of a Funding Tranche or Funding Tranches
                         to be submitted to the Steering  Group (with a copy to
                         all PES Nominees) by the Programme Board or any member
                         of the  Steering  Group at least five working  days in
                         advance of a meeting of the Steering Group.  Each such
                         Funding  Tranche shall contain details of the scope of
                         the work undertaken and details of the costs associated
                         with it.

                    3.4.3At each  meeting of the  Steering  Group,  the Steering
                         Group shall resolve whether to approve Funding Tranches
                         duly  submitted  to it  in  accordance  with  paragraph
                         3.4.2, and, subject to any appeal to Public Electricity
                         Suppliers,  any Funding Tranche so approved will become
                         an  Approved  Funding  Tranche.   Notwithstanding   the
                         decision taken, any Public Electricity  Supplier or any
                         member of the Steering  Group  appointed by a member of
                         the Executive Committee appointed by Public Electricity
                         Suppliers may,  within 5 working days of the resolution
                         of the  Steering  Group,  by notice in  writing  to the
                         Steering  Group,  appeal the matter to be considered by
                         Public Electricity  Suppliers under sub-section 7.2. If
                         the  Public  Electricity   Suppliers  then  resolve  to
                         approve  the  Funding  Tranche,   it  shall  become  an
                         Approved  Funding  Tranche.  If  the  matter  has  been
                         appealed  and Public  Electricity  Suppliers  do not so
                         approve  it,  the  Funding  Tranche  shall  not  be  an
                         Approved Funding Tranche.

                    3.4.4As soon as the  Programme  Board becomes aware that the
                         cost of any work  carried out  pursuant to any Approved
                         Funding   Tranche   is  likely  to  exceed  the  budget
                         considered  by the Steering  Group in  paragraph  3.4.2
                         above, it shall forthwith  prepare a revised budget and
                         deliver it to the  Steering  Group,  at which point the
                         Steering   Group   and,   if   necessary,   the  Public
                         Electricity  Suppliers,  will follow the  procedure set
                         out  in  paragraphs  3.4.2  and  3.4.3  in  considering
                         whether to authorise the continuation of work under the
                         Approved  Funding  Tranche,  in  accordance  with  such
                         revised  budget.  If (a) the  Steering  Group  does not
                         resolve to approve the revised  budget,  in  accordance
                         with  paragraph  3.4.2 or (b) after  referral to Public
                         Electricity  Suppliers in accordance  with  sub-section
                         7.2 they  resolve not to approve  the  revised  budget,
                         then the relevant 1998 Sub-Committee shall undertake no
                         work to implement  the Approved  Funding  Tranche which
                         would  lead to the cost of  implementing  the  Approved
                         Funding Tranche  exceeding the original budget.  If the
                         revised budget is approved in accordance with paragraph
                         4.3.2 or, as the case may be, sub-section 7.2, the cost
                         of that  Approved  Funding  Tranche  will  be  adjusted
                         accordingly.

                  3.4.5   Any Steering Group member may by reasonable notice
                          request such information of the Chief Executive or the
                          Programme Board as may be reasonably required to
                          assess the performance of the 1998 Programme against
                          the Programme Budget and Approved Funding Tranches, it
                          being understood that the Chief Executive and the
                          Programme Board shall not be required to comply with
                          any such information request unless it is made by 3 or
                          more members of the Steering Group.

         3.5      Voting: Any question or matter considered by the Steering
                  Group shall be resolved by a simple majority of votes of
                  members of the Steering Group.

4.       THE OPERATIONAL FRAMEWORK

         4.1      Changes to Operational Framework: Subject to sub-section 4.2,
                  any addition to, deletion from or other change to the
                  Operational Framework by or on behalf of Pool Members shall be
                  made only with the prior approval of Pool Members in general
                  meeting.

          4.2  Effect on 1998 Programme Costs: If any addition to, deletion from
               or  other  change  to the  Operational  Framework  may lead to an
               increase in the 1998 Programme Costs then,  unless such addition,
               deletion  or  other  change  has  been  approved  by  the  Public
               Electricity  Suppliers in writing or in separate general meeting,
               the  proposed  addition,  deletion or other change shall not take
               effect  unless  Pool  Members so resolve (in which case any costs
               incurred as a result of the addition, deletion or other change in
               question shall not be 1998 Programme Costs).

5.       PROGRAMME BOARD AND PROGRAMME BUDGET

         5.1      Constitution of the Programme Board: At all times, the
                  Programme Board shall comprise three senior users, one senior
                  technical user (together the "Senior Users") and the Chief
                  Executive. One of the Senior Users shall be an appointee of
                  all Pool Members other than Public Electricity Suppliers, and
                  the other three shall be appointees of the Public Electricity
                  Suppliers.

         5.2      Voting: It is the intention of Pool Members that the Programme
                  Board shall resolve matters by way of consensus.

          5.3  Preparation of the Programme  Budget:  The Programme  Board shall
               prepare and submit a draft programme budget by no later than 15th
               July, 1996 for approval by the Steering Group.  The procedure for
               approval  of the draft  programme  budget  shall  follow that for
               approval of Funding Tranches in paragraphs 3.4.2 and 3.4.3,  save
               that if either the Steering Group or Public Electricity Suppliers
               do not approve the draft programme budget,  they shall notify the
               Programme Board of any areas requiring revision and the Programme
               Board  shall,  as  soon  as  reasonably  practicable  after  such
               notification,   re-submit  the  draft  programme  budget  to  the
               Steering Group.  Once the draft  programme  budget is approved it
               shall be the Programme Budget.

6.       PROGRAMME SHARES AND PES VOTES

         6.1      Programme Shares : The Programme Share of each Public
                  Electricity Supplier and each Scottish PES shall be that set
                  opposite its name in column 2 of the table in sub-section 6.3.

         6.2      PES Votes: The PES Vote of each Public Electricity Supplier
                  shall be that set opposite its name in column 3 of the table
                  in sub-section 6.3.

         6.3      Table:

                                  Column 1           Column 2          Column 3
                               Name of Funder     rogramme Shares     PES Votes
                    Eastern Group plc                 12.64%            13.82%
                    East Midlands Electricity plc     8.79%             9.61%
                    London Electricity plc            7.76%             8.50%
                    Manweb plc                        5.19%             5.71%
                    Midlands Electricity plc          8.81%             9.64%
                    Northern Electric plc             4.97%             5.44%
                    NORWEB Plc                        8.21%             8.99%
                    Scottish Hydro-Electric PLC       2.66%      Not applicable
                    Scottish Power plc                5.97%     Not applicable
                    SEEBOARD PLC                      8.14%             8.91%
                    Southern Electric plc             10.74%            11.75%
                    South Wales Electricity plc       3.34%             3.64%
                    South Western Electricity plc     5.67%             6.21%
                    Yorkshire Electricity Group plc   7.11%             7.78%

          6.4  Reopener:  If the aggregate amount of the 1998 Programme Costs as
               projected under the 1998 Programme at 31st December, 1997 exceeds
               the  budgeted  figure for the  1998 Programme  Costs as at 1st
               January,  1997  (which is  agreed only for  these  purposes  to
               be(pound)58,000,000), the Programme Shares of the Funders shall
               promptly  be  recalculated by or on behalf  of the  Funders  in
               accordance  with the principles set out in the document entitled
               "Costing Estimates for Scottish Contribution to Pool Programme"
               dated 13th December, 1996 (a copy of which has been initialled by
               the Chief Executive for the purposes of identification only), and
               column  2 of the  table  in  sub-section  6.3  shall be amended
               accordingly.

          6.5  Merger and adjustment:  In the event of any merger between one or
               more  Funders  any successor  company  shall have the  aggregate
               Programme Shares and PES Votes of its predecessors. Any successor
               to part only of the authorised  area (as such term is defined in
               its PES Licence) of a Public Electricity  Supplier and the Public
               Electricity Supplier retaining the other part shall have such PES
               Votes and Programme Shares as the Director shall  determine.  Any
               successor  to part only of the  authorised  supply  area (as such
               term is defined in the PES Licence of the relevant  Scottish PES)
               of a Scottish PES and the Scottish PES  retaining  the other part
               shall have such Programme Shares as the Director shall determine.

7.       PES MEETINGS

          7.1  PES Meetings:  The following  provisions of this Section 7 shall
               apply  to  separate general   meetings  of  Public   Electricity
               Suppliers.

         7.2      Requirements for PES Approval: The following matters shall
                  require Public Electricity Suppliers to give their approval by
                  the Requisite Proportion in separate general meeting, or by
                  the Requisite Proportion of Public Electricity Suppliers
                  giving their approval in writing to take effect:

                    (a)  the approval of Funding Tranches by way of appeal under
                         sub-section 3.4;

                  (b)     the approval of any addition to, deletion from or
                          other change to the Operational Framework which may
                          lead to an increase in the 1998 Programme Costs; and

                  (c)     any addition to, deletion from or other change to this
                          Schedule 22 (other than, for the avoidance of doubt,
                          the adoption of detailed drafting of the provisions
                          relating to the recovery of 1998 Programme Costs in
                          accordance with paragraph 8.2.3).

         7.3      General Provisions: The provisions of Part III of the
                  Agreement relating to general meetings of Pool Members shall
                  apply mutatis mutandis to separate general meetings of Public
                  Electricity Suppliers, but so that:-

                  (a)     the necessary requirement for notice in writing to be
                          given of any such separate general meeting shall be 5
                          working days rather than the period in Clause 9.3;

                  (b)     Clause 10.9 shall not apply although the Pool Auditor
                          and the Director or its or his duly authorised
                          representative shall have the right to attend and
                          speak (but not vote) at such separate general
                          meetings;

                  (c)     such separate general meetings shall be convened by
                          the Secretary upon receipt of a request from a Public
                          Electricity Supplier or a member of the Steering Group
                          appointed by an Executive Committee Member appointed
                          by Public Electricity Suppliers;

                  (d)     the necessary quorum shall be 6 or more Public
                          Electricity Suppliers present in person together
                          representing 50 per cent. or more of the aggregate
                          number of PES Votes of all Public Electricity
                          Suppliers and if no quorum is present within half an
                          hour from the time appointed for the separate general
                          meeting, the separate general meeting shall be
                          adjourned until the following working day;

                  (e)     references to Total Weighted Votes shall be
                          substituted by references to PES Votes; and

                  (f)     notice of any such separate general meeting need to be
                          given only to those entitled to attend the same,

                  and any resolution put to any such separate general meeting
                  shall, to be passed, require the Requisite Proportion of votes
                  in favour.

8.       RECOVERY OF 1998 PROGRAMME COSTS

                    8.1  Calculation of Aggregate Charging Limit: The Aggregate
                         Charging  Limit shall be calculated  in the  following
                         manner:-

                  8.1.1 if Total 1998 Programme Costs are less than the Lower
Limit then:

                                   [OBJECT OMITTED]

                  8.1.2   if Total 1998 Programme Costs are equal to or greater
                          than the Lower Limit and less than or equal to the
                          Upper Limit then:

                                   ACL = T1998 PC + FC; and

                  8.1.3 if Total 1998 Programme Costs are greater than the Upper
Limit then:

                                   [OBJECT OMITTED]

                    in   each case,  where,  subject to the provisions  set out
                         below:

                    the  Lower Limit ("LL") = (pound)43,500,000;

                    the  Upper Limit ("UL") = (pound)53,500,000; and

                                  the Total 1998 Programme Costs ("T1998 PC") =
                                  the aggregate amount of 1998 Programme Costs
                                  allocated to Public Electricity Suppliers in
                                  England and Wales according to their
                                  respective Programme Shares,

                          save that if, as a result of any addition to, deletion
                          from or other change to the Operational Framework
                          and/or the adoption of Approved Funding Tranches
                          pursuant to sub-section 3.4 or Section 7 outside the
                          scope of the Operational Framework, the Total 1998
                          Programme Costs are changed by any amount in excess of
                          (pound)50,000 then, subject to prior approval by the
                          Director, both the Lower Limit and the Upper Limit
                          shall be adjusted by the amount of such change.

         8.2 Recovery by Public Electricity Suppliers from under 100kW
customers:

          8.2.1The  ACL  is to be recovered,  with  allowance  being  made  for
               Financing  Costs, over a  maximum  period  of 5 years  from  the
               Implementation Date from all suppliers of customers  below 100kW
               on the basis of a charge per megawatt hour  supplied. The Public
               Electricity  Suppliers  shall be  entitled to recover the ACL in
               proportion to the 1998 Programme  Costs contributed by them (the
               Public  Electricity Suppliers'  proportions being grossed up for
               this purpose to aggregate  100 per cent.). If, for reasons other
               than force  majeure (as defined in paragraph  8.2.2  below), the
               Implementation  Date is later than 1st April,  1998,  the Public
               Electricity  Suppliers or their agents will be able to recover a
               proportionately lesser amount.

                  8.2.2   If, by reason of force majeure (which for these
                          purposes means any delay as a result of the
                          requirements of the Director or the Secretary of State
                          or any exceptional circumstances outside the control
                          of the Pool), the 1998 Programme is delayed or not
                          implemented, full cost recovery of the ACL shall be
                          made.

                  8.2.3   The principles for recovery set out in this
                          sub-section 8.2 require further detailed drafting.
                          Pool Members undertake to use their reasonable
                          endeavours to agree the detailed drafting by 1st June,
                          1997.

         8.3      Recovery by Scottish PESs: Scottish PESs shall be entitled to
                  recover from third parties their respective contributions
                  towards the 1998 Programme Costs in accordance with the terms
                  of their agreement with the Director (if any).

9.       SCHEDULE 22 CEASING TO HAVE EFFECT

         Without prejudice to any accrued rights or liabilities, the provisions
         of this Schedule 22 shall cease to have effect on the date following
         that on which the final payment has been made to the last Public
         Electricity Supplier to be reimbursed its due proportion in respect of
         1998 Programme Costs and Financing Costs pursuant to Section 8.



<PAGE>


                                                  SCHEDULE 23

                                             SCOTTISH SETTLEMENTS

DEFINITIONS AND INTERPRETATION

         1.1      Definitions: In this Schedule and the Scots Subsidiary
                  Documents, except where the context otherwise requires:

                  "1998 Contractor" means for the time being and from time to
                  time a contractor employed or retained by or on behalf of or
                  on the instructions of Pool Members to undertake work or to
                  provide services in relation to the design, development,
                  testing, implementation, operation or maintenance of the 1998
                  Systems (and includes any sub-contractor of such a
                  contractor);

                  "1998 Deliverables" means the work product of a 1998
                  Contractor under its contract or arrangement with Pool Members
                  (or their agent) in relation to the 1998 Programme;

                  "1998 Documentation" means the documentation prepared for the
                  benefit of Pool Members in connection with the 1998 Programme
                  relating to the design, development, testing, implementation,
                  operation and/or maintenance of the Relevant 1998 Systems and
                  for the time being and from time to time listed or referred to
                  in Part B of Scots Subsidiary Document 1;

                  "1998 Programme" has the meaning given to that term in 
                 Schedule 22;

                  "1998 Systems" means the systems and processes (including the
                  ISRA System) supporting the central electricity trading and
                  settlement system in England and Wales which are to be
                  developed for the benefit of Pool Members pursuant to the 1998
                  Programme;

                  "Analysis" has the meaning given to that term in Scots
                 Subsidiary Document 3;

                  "Combined Members" means the members of the Chief Executive's
                  Office, the Executive Committee, the Committee Members and the
                  Other Pool Members;

                  "Developed Material" has the meaning given to that term in 
                  paragraph 4.5(B);

                  "EAC/AA System" has the meaning given to that term in
                   Schedule 22;

                  "Existing Pool Documentation" means the documentation relating
                  to the rules and procedures for the operation of the central
                  electricity trading and settlement system in England and Wales
                  and for the time being and from time to time listed or
                  referred to in Part A of Scots Subsidiary Document 1;

                  "IAR System" means the control system and processes that are
                  necessary to facilitate initial allocation to suppliers in the
                  authorised supply areas of the Scottish PESs (as defined in
                  the PES Licence of the relevant Scottish PES) and
                  reconciliation of all the electricity consumed in those
                  authorised supply areas within a bulk supply point group;

                  "ISRA Documentation" means the documentation prepared for the
                  benefit of Pool Members relating either to the engagement of a
                  1998 Contractor for the initial settlement and reconciliation
                  function contemplated by the 1998 Programme or to the design,
                  development, testing and trialing of the ISRA System, and in
                  each case for the time being and from time to time listed or
                  referred to in Part C of Scots Subsidiary Document 1;

                  "ISRA System" has the meaning given to that term in Schedule
                     22;

                  "Logica" means Logica UK Limited (registered number: 947968);

                  "Logica Contract" means the agreement dated 11th September,
                  1996 and made between Logica and Energy Pool Funds
                  Administration Limited;

                  "NHH Data Aggregation System" means the non half hour data
                  aggregation software and systems which are to be developed for
                  the benefit of Pool Members pursuant to the 1998 Programme;

                  "Other Pool Members" means all the Pool Members other than the
                  Scottish PESs (and, where the context so admits, includes any
                  person acting on their behalf for the purposes of this
                  Schedule and the Scots Subsidiary Documents);

                  "Pool 1998 Software" means the software for the Relevant 1998
                  Systems (excluding all operating system software for all of
                  the 1998 Systems) for the time being and from time to time
                  listed or referred to in Scots Subsidiary Document 2;

                  "Programme Board" has the meaning given to that term in
 Schedule 22;

                  "Programme Liaison Officer" means the 1998 Programme's liaison
                  officer nominated for the time being and from time to time by
                  or on behalf of the Other Pool Members in accordance with
                  Scots Subsidiary Document 4;

                  "Relevant 1998 Systems" means the 1998 Systems other than the
                  EAC/AA System and the NHH Data Aggregation System and
                  excluding all Support Services and all hardware;

                  "Required Documentation" means the 1998 Documentation, the
 Existing Pool Documentation, the
                  ISRA Documentation and the Support Documentation;

                  "Responsible Officers" has the meaning given to that term in 
Scots Subsidiary Document 4;

                  "Scots 1998 Licence" has the meaning given to that term in
 sub-section 4.2;

                  "Scots Contract" has the meaning given to that term in 
sub-section 6.1;

                  "Scots Contractor" has the meaning given to that term in 
paragraph 4.5(B);

                  "Scots Due Date" has the meaning given to that term in
 sub-section 9.3;

                  "Scots Licence-Back" has the meaning given to that term 
in paragraph 4.5(H);

                  "Scots Licensee" has the meaning given to that term in 
sub-section 4.2;

                  "Scots Subsidiary Documents" means each of the documents
                  identified and agreed to be treated as a Scots Subsidiary
                  Document for the purposes of this Schedule by the Scottish
                  PESs and the Executive Committee (or a nominated sub-committee
                  of the Executive Committee), as the same may be amended or
                  substituted from time to time with their prior written
                  consent. Each Scots Subsidiary Document shall be numbered and
                  references in this Schedule to "Scots Subsidiary Document `n'"
                  shall be to the relevant numbered Scots Subsidiary Document;

                  "Scottish PESs" has the meaning given to that term in
 Schedule 22;

                  "Scottish Settlements" means Scottish Electricity Settlements
                  Limited, a private limited liability company incorporated in
                  Scotland with registered number SC169212 jointly owned by the
                  Scottish PESs for the purposes of managing and implementing
                  the Scottish Settlements Arrangements (and includes any
                  successor company);

                  "Scottish Settlements Arrangements" means the business of
                  developing, operating and maintaining systems, processes and
                  arrangements in the authorised supply areas (as defined in the
                  PES Licence of the relevant Scottish PES) of the Scottish PESs
                  pursuant to their obligations as holders of PES Licences, and
                  includes the Scottish Settlements Project;

                  "Scottish Settlements Project" means the project established
                  and managed by Scottish Settlements that will develop systems,
                  processes and arrangements within the scope and as part of the
                  Scottish Settlement Arrangements;

                  "SSP Liaison Officer" means the liaison officer of the
                  Scottish PESs (or, as the case may be, Scottish Settlements)
                  nominated for the time being and from time to time by them in
                  accordance with Scots Subsidiary Document 4;

                  "Support Documentation" means any documentation provided by
                  the Programme Liaison Officer as clarification to any of the
                  1998 Documentation, the Existing Pool Documentation or the
                  ISRA Documentation in response to a request from the SSP
                  Liaison Officer pursuant to Scots Subsidiary Document 4;

                  "Support Services" means:-

                  (A)     support services for systems tests, integration tests
 and trialing;

                  (B)     services for maintenance, error correction, change
                          implementation and new system releases; and

                  (C)     training services;

                  "Systems Requirement Request" has the meaning given to that 
term in Scots Subsidiary
                  Document 3; and

                  "Systems Requirement Response" has the meaning given to that
                  term in Scots Subsidiary Document 3.

               1.2  Interpretation:   In  the event  of  any  inconsistency  or
                    conflict  between the  provisions of this  Schedule and the
                    other  provisions of the Agreement (other than Schedule 22)
                    insofar  as  concerns  the relationship  of  the  Scottish
                    Settlements  Arrangements  to the  1998  Programme  or  the
                    Operational  Framework,  the provisions  of  this  Schedule
                    shall,  unless otherwise expressly stated,  prevail. In the
                    event of any other inconsistency  or  conflict  between the
                    provisions of this Schedule and the other provisions of the
                    Agreement, such other provisions shall prevail.

         1.3      Scots Subsidiary Documents: Each of the Parties undertakes to
                  comply with the Scots Subsidiary Documents insofar as
                  applicable to such Party. The Executive Committee shall
                  provide copies of the Scots Subsidiary Documents to a Party
                  upon request and at such Party's cost.

         1.4      Trusteeship: The Other Pool Members hold the benefit of this
                  Schedule for themselves and as trustee and agent for the
                  Executive Committee, the Committee Members and the members of
                  the Chief Executive's Office.

               1.5  Other  Pool  Members:   Subject  to  sub-section  5.3, the
                    provisions of Part III of the Agreement shall apply mutatis
                    mutandis  to meetings  of and  decisions taken by the Other
                    Pool  Members  save that  neither of the Scottish  PESs nor
                    Scottish  Settlements  (if it is a  Pool Member) shall  be
                    entitled to attend, speak or vote at the relevant meeting or
                    otherwise to  participate in the decision  taking  processes
                    and the voting  procedures shall be adjusted in such manner
                    as the Pool Chairman in his sole discretion shall see fit to
                    make allowance for the prohibition on the Scottish PESs and
                    Scottish Settlements from voting.

PURPOSE

               2.1  Purpose:  This Schedule, when read with Schedule 22 and the
                    Scots   Subsidiary Documents,   sets  out  the  terms  and
                    conditions upon and subject to which the Scottish PESs will
                    be  entitled to have  made  available  to them or  Scottish
                    Settlements for the  purposes of the  Scottish  Settlements
                    Arrangements certain  documentation  and systems written or
                    developed for or provided to Pool Members in connection with
                    the  1998 Programme  and  to  propose  changes  thereto  or
                    undertake customisation  thereof solely for the purposes of
                    the Scottish Settlements Arrangements.

         2.2      Scottish PESs as Pool Members: Save as varied or amended by or
                  pursuant to this Schedule, the Scottish PESs shall continue to
                  have their respective rights, responsibilities, obligations
                  and liabilities as Pool Members in addition to their rights,
                  responsibilities, obligations and liabilities under this
                  Schedule, Schedule 22 and the Scots Subsidiary Documents in
                  their capacity as Scottish PESs.

JOINT VENTURE AND GUARANTEE

               3.1  Scottish Settlements: The Scottish PESs shall be entitled to
                    act for the purpose of the Scottish Settlements Arrangements
                    and this Schedule through Scottish Settlements.  If required
                    by the Executive Committee,  the Scottish PESs shall procure
                    that Scottish  Settlements becomes a party to the Agreement,
                    appoints  an agent for  service of  process  in England  and
                    undertakes   directly   in  form  and   content   reasonably
                    satisfactory  to the Executive  Committee the obligations on
                    its part contained in this Schedule and the Scots Subsidiary
                    Documents.

         3.2      Information on Scottish Settlements: Each of the Scottish PESs
                  and Scottish Settlements shall promptly give the Other Pool
                  Members such information about the shareholdings in and
                  capital structure of Scottish Settlements and its business,
                  operations, assets and financial condition as the Executive
                  Committee may from time to time reasonably require and the
                  Other Pool Members shall keep all such information
                  confidential on and subject to the terms and conditions of
                  Clause 70 of the Agreement.

         3.3      Guarantee: The Scottish PESs hereby jointly and severally and
                  irrevocably and unconditionally:

               (A)  guarantee to  each  of the  Combined  Members  the  due and
                    punctual observance  and  performance  of  all  the  terms,
                    conditions and covenants on the part of Scottish Settlements
                    contained in  this   Schedule  and  the  Scots   Subsidiary
                    Documents and agree to pay to each of the Combined  Members
                    from time to time on  demand  any and  every sum or sums of
                    money which Scottish Settlements shall at any time be liable
                    to pay to such  Combined  Member  under or  pursuant to this
                    Schedule or any of the Scots Subsidiary  Documents and which
                    shall not have  been  paid at the time such  demand is made;
                    and

(B) agree as a primary obligation to indemnify each of the Combined Members from
time to time on demand by the relevant Combined Member from and against any loss
directly incurred by such Combined Member as a result of any of the obligations
of Scottish Settlements under or pursuant to this Schedule or any of the Scots
Subsidiary Documents being or becoming void, voidable, unenforceable or
ineffective as against such Combined Member for any reason whatsoever, whether
or not known to such Combined Member or any other person.
         3.4      Preservation of Rights:

                  3.4.1   The obligations of the Scottish PESs contained in this
                          Section 3 shall be in addition to and independent of
                          every other security which any of the Combined Members
                          may at any time hold in respect of any obligations of
                          Scottish Settlements under the Agreement.

               3.4.2The  obligations of the  Scottish  PESs  contained  in this
                    Section 3 shall constitute  and be  continuing  obligations
                    notwithstanding any settlement of account or other matter or
                    thing whatsoever, and in particular but without limitation
                    shall  not  be considered  satisfied  by  any intermediate
                    payment or satisfaction of all or any of the obligations of
                    Scottish Settlements  under  this  Schedule  or  the  Scots
                    Subsidiary Documents  and shall  continue in full force and
                    effect until final  payment in full of all amounts owing by
                    Scottish Settlements  under this  Schedule  and each of the
                    Scots Subsidiary  Documents and  satisfaction of all actual
                    and contingent  obligations of Scottish  Settlements  under
                    this Schedule and each of the Scots Subsidiary Documents.

                  3.4.3   Neither the obligations of the Scottish PESs herein
                          contained nor the rights, powers and remedies
                          conferred in respect of the Scottish PESs upon the
                          Combined Members by this Schedule or any of the Scots
                          Subsidiary Documents or by law shall be discharged,
                          impaired or otherwise affected by:

                          (A)      the winding-up, dissolution, administration
                                   or re-organisation of Scottish Settlements or
                                   any other person or any change in its status,
                                   function, control or ownership;

                          (B)      any of the obligations of Scottish
                                   Settlements or any other person hereunder or
                                   under any other security taken in respect of
                                   any of its obligations under this Schedule or
                                   any of the Scots Subsidiary Documents being
                                   or becoming illegal, invalid, unenforceable
                                   or ineffective in any respect;

                          (C)      time or other indulgence being granted to
                                   Scottish Settlements in respect of its
                                   obligations under this Schedule or any of the
                                   Scots Subsidiary Documents or under any such
                                   other security;

                          (D)      any amendment to, or any variation, waiver or
                                   release of, any obligation of Scottish
                                   Settlements under this Schedule or any of the
                                   Scots Subsidiary Documents or under any such
                                   other security;

                          (E)      any failure to take, or fully to take, any
                                   security contemplated hereby or otherwise
                                   agreed to be taken in respect of the
                                   obligations of Scottish Settlements under
                                   this Schedule or any of the Scots Subsidiary
                                   Documents;

                          (F)      any failure to realise or fully to realise
                                   the value of, or any release, discharge,
                                   exchange or substitution of, any security
                                   taken in respect of the obligations of
                                   Scottish Settlements under this Schedule or
                                   any of the Scots Subsidiary Documents; or

                          (G)      any other act, event or omission which, but
                                   for this paragraph 3.4.3, might operate to
                                   discharge, impair or otherwise affect any of
                                   the obligations of either of the Scottish
                                   PESs herein contained or any of the rights,
                                   powers or remedies conferred upon the
                                   Combined Members by this Schedule or any of
                                   the Scots Subsidiary Documents or by law.

                    3.4.4Any  settlement or discharge between the Scottish PESs
                         and Scottish  Settlements shall be conditional upon no
                         security or payment to the Combined  Members or any of
                         them by the Scottish PESs or either of them or Scottish
                         Settlements  or  any  other person  on  behalf  of the
                         Scottish  PESs  or,  as  the case  may  be,   Scottish
                         Settlements  being avoided or reduced by virtue of any
                         provisions  or  enactments relating  to   bankruptcy,
                         insolvency,  liquidation or  similar  laws of  general
                         application  for the time being in force  and,  if any
                         such security or payment is so avoided or reduced,  the
                         Combined  Members or the relevant one of them shall be
                         entitled  to  recover  the value  or  amount  of  such
                         security or payment from the Scottish PESs subsequently
                         as if such settlement or discharge had not occurred.

                  3.4.5   None of the Combined Members shall be obliged before
                          exercising any of the rights, powers or remedies
                          conferred upon it in respect of the Scottish PESs by
                          this Schedule or any of the Scots Subsidiary Documents
                          or by law:

                          (A)      to make any demand of Scottish Settlements;

                          (B)               to take any action or obtain
                                            judgment in any court against
                                            Scottish Settlements;

                          (C)      to make or file any claim or proof in a
                                   winding-up or dissolution of Scottish
                                   Settlements; or

                          (D)      to enforce or seek to enforce any other
                                   security taken in respect of any of the
                                   obligations of Scottish Settlements under
                                   this Schedule or any of the Scots Subsidiary
                                   Documents.

                  3.4.6   The Scottish PESs agree that, until all amounts which
                          may be or become payable by Scottish Settlements under
                          or in connection with this Schedule and the Scots
                          Subsidiary Documents have been irrevocably paid in
                          full, neither of the Scottish PESs shall, after a
                          claim has been made or by virtue of any payment or
                          performance by it under this Clause 3:

                          (A)      be subrogated to any rights, security or
                                   moneys held, received or receivable by any of
                                   the Combined Members (or any trustee or agent
                                   on its behalf) or be entitled to any right of
                                   contribution or indemnity in respect of any
                                   payment made or moneys received on account of
                                   the liability of such Scottish PES under this
                                   Clause 3;

                          (B)      claim, rank, prove or vote as a creditor of
                                   Scottish Settlements or its estate in
                                   competition with any of the Combined Members
                                   (or any trustee or agent on its behalf); or

                          (C)      receive, claim or have the benefit of any
                                   payment, distribution or security from or on
                                   account of Scottish Settlements, or exercise
                                   any right of set-off as against Scottish
                                   Settlements.

SCOTS 1998 LICENCE

         4.1      Provision of Required Documentation: Subject to and
                  conditional upon payment and receipt of the sums set out or
                  referred to in sub-section 9.1(A) and to the terms and
                  conditions of the Scots 1998 Licence:

(A)                       the Scottish PESs and Scottish Settlements shall be
                          entitled to receive copies of the Required
                          Documentation; and

(B) Pool Members shall procure that such copies are made available to the
Scottish PESs (or, as the case may be, Scottish Settlements) promptly upon
request.
         4.2      Grant of Scots 1998 Licence:

                  (A)     Subject to and conditional upon payment and receipt of
                          the sum(s) set out or referred to in sub-section
                          9.1(B) and to the extent that Pool Members have the
                          right so to do, Pool Members grant the Scottish PESs
                          and Scottish Settlements (in this Section 4, each a
                          "Scots Licensee"), or shall procure the grant to the
                          Scots Licensee of, a perpetual, non-exclusive and
                          non-transferable licence (the "Scots 1998 Licence") to
                          use the Required Documentation and the Pool 1998
                          Software on the terms and conditions set out in the
                          following provisions of this Section 4.

                    (B)  Pool Members confirm that they have full right to grant
                         the Scots  Licensee  or procure the grant to the Scots
                         Licensee   of   a  perpetual,   non-exclusive    and
                         non-transferable licence  to  use  (i)  such  of  the
                         Required Documentation  and Pool 1998  Software  as is
                         made available  to  Pool  Members  under  the  Logica
                         Contract, excluding  any  software  notified  by or on
                         behalf of the Other Pool Members to the Scots Licensee
                         from time to time as being subject to a requirement for
                         a licence from a third  party,  and (ii) the  Existing
                         Pool  Documentation. Pool Members  confirm that Logica
                         only  has  the  right  under  the Logica  Contract  to
                         incorporate such third party software  where the Pool
                         Members have agreed the terms upon which a licence will
                         be available from the relevant third party.  In respect
                         of  any  other  Required  Documentation  or  Pool  1998
                         Software,  the Pool Members confirm that they shall use
                         reasonable  endeavours  (but without  being  obliged to
                         incur any  material  additional  cost  unless  all such
                         additional  cost is paid or reimbursed on demand by the
                         Scottish PESs or Scottish  Settlements) to acquire in a
                         timely  manner  ownership  of,  or a right  to  grant a
                         licence  to the  Scots  Licensee  in  respect  of,  the
                         intellectual property rights thereto.

4.3  Term of Scots 1998 Licence:  The Scots 1998 Licence will commence as of 1st
     January,  1997  and will  continue  until  terminated  in  accordance  with
     sub-section 4.4.

         4.4      Termination of Scots 1998 Licence:

                  (A)     The Executive Committee shall have the right (without
                          prejudice to any other rights or remedies that the
                          Executive Committee or the Other Pool Members may
                          have) to terminate the Scots 1998 Licence immediately
                          by notice in writing to the Scots Licensee if:-

                          (i)      the Scots Licensee is in material breach of
                                   any of the provisions of Clauses 4.2, 4.5,
                                   4.6, 4.7 and 4.8 and either such breach is
                                   incapable of remedy or the breach continues
                                   for fourteen days after notice in writing
                                   specifying the breach and requiring it to be
                                   remedied; or

                    (ii) an  order is made or a  resolution is  passed  for the
                         winding-up of the Scots  Licensee, or if a provisional
                         liquidator   is  appointed  in  respect  of the Scots
                         an administrative receiver) is appointed in respect of
                         the Scots Licensee  or all or any of its assets or if
                         the Scots Licensee  is unable to pay its debts within
                         the meaning of section 123 of the  Insolvency Act 1986,
                         or if  any  voluntary  arrangement  is  proposed under
                         section 1 of the Insolvency Act 1986 in respect of the
                         Scots Licensee; or

                    (iii anything analogous to any of the events in paragraph
                         (ii) above occurs with respect to the Scots Licensee or
                         its assets in any jurisdiction.

                  (B) If the Scots 1998 Licence is terminated under this
sub-section 4.4:

                    (i)  the Scots Licensees will cease to have the right to use
                         the Required Documentation and the Pool 1998 Software;

                          (ii)     the Scots Licensees shall within 30 days of
                                   termination deliver to the Executive
                                   Committee all the Required Documentation and
                                   the Pool 1998 Software together with all
                                   copies of them in the Scots Licensees'
                                   possession or control and (if any Scots
                                   Licensee fails to do so) the Executive
                                   Committee or its agent shall have the right
                                   to enter such Scots Licensee's premises and
                                   repossess the Required Documentation and the
                                   Pool 1998 Software and any copies of them;
                                   and

                          (iii)    the Scots Licensees will destroy any
                                   programme or other series of instructions
                                   contained in any memory device which is
                                   derived from the Required Documentation
                                   and/or the Pool 1998 Software and is in their
                                   possession or control.

                  (C)     Termination of the Scots 1998 Licence will not release
                          any of the Scots Licensees from any obligations
                          arising prior to termination or which expressly or by
                          implication become effective or continue to be
                          effective on or after the termination of the Scots
                          1998 Licence.

         4.5      Scope of Scots 1998 Licence:

                  (A)     The Scots Licensee shall have the right to use the
                          Required Documentation and the Pool 1998 Software only
                          for the purposes of the Scottish Settlements
                          Arrangements and shall not use the Required
                          Documentation or the Pool 1998 Software in any other
                          way.

                  (B)     The Scots Licensee is licensed to copy, develop, alter
                          or modify the whole or any part of the Required
                          Documentation or Pool 1998 Software or combine it with
                          any other materials, in any such case only for the
                          purposes of the Scottish Settlements Arrangements (the
                          "Developed Material"), but will not permit any other
                          person to do
                                             ------------------
                          so except for a person at any time under contract to
                          the Scots Licensee to do so
                          (the "Scots Contractor").  The Scots Contractor will
                          not have any more extensive
                                ----------------
                          right to use the Required Documentation or the Pool
                          1998 Software than the Scots Licensee has under this
                          Section 4.

                  (C)     The Scots Licensee shall ensure the proper use,
                          supervision, management and control of the Required
                          Documentation and Pool 1998 Software and that the same
                          are properly protected at all times from unauthorised
                          access or use by any person.

                    (D)  The   Scots  Licensee  shall   keep   the   Required
                         Documentation  and Pool 1998 Software confidential and
                         shall only authorise  access or  disclosure to those
                         persons or categories of person for the time being and
                         from  time to  time listed  or  referred  to in  Scots
                         Subsidiary Document 6 and to whom access or disclosure
                         is   strictly  necessary  to  enable  the   Required
                         accordance  with this  Section  4. The Scots Licensee
                         shall ensure  that  each such  person is aware of the
                         confidential  nature of the Required Documentation and
                         Pool 1998 Software and keeps them confidential.  This
                         paragraph shall not apply to any part of the  equired
                         Documentation and Pool 1998 Software which has entered
                         the public domain other than as a result of any breach
                         of agreement or duty.

                  (E) The following obligations apply in relation to the use of
source code:

(i)                                all copies of any source code which is part
                                   of the Required Documentation or Pool 1998
                                   Software will be individually numbered and
                                   the existence and location of each such copy
                                   shall be notified by the Scots Licensee to
                                   the Executive Committee; and

(ii) the Scots Licensee shall notify the Executive Committee of details of each
of its employees and those of any Scots Contractor who will have access to the
source code and, unless otherwise agreed by the Executive Committee, shall
ensure that each such employee will (before access) enter into an individual
confidentiality agreement in a form approved by the Executive Committee. The
Scots Licensee shall provide the Executive Committee with an original copy of
each such agreement and will ensure that, unless otherwise agreed by the
Executive Committee, no employee of the Scots Licensee or any Scots Contractor
has access to the source code except for those employees whose details have been
notified to the Executive Committee and are bound by such agreements.
                  (F)     The Scots Licensee shall immediately bring to the
                          attention of the Executive Committee any infringement
                          or suspected infringement by any third party of any
                          rights in the Required Documentation or the Pool 1998
                          Software of which it becomes aware and shall, at the
                          Executive Committee's request and against payment of
                          its reasonable costs and expenses, take or join Pool
                          Members in taking such action as they may require for
                          the purpose of protecting such rights.

                  (G)     Pool Members are not obliged under the Scots 1998
                          Licence to develop, maintain or enhance the Required
                          Documentation or the Pool 1998 Software.

                  (H)     The Scots Licensees agree to grant Pool Members a
                          perpetual, royalty-free, non-exclusive licence to use
                          and exploit the Developed Material mutatis mutandis on
                          the same terms as the Scots Licence (the "Scots
                          Licence-Back") provided that:

                    (i)  the Scots Licensees shall be entitled by notice to the
                         Executive Committee to designate  particular  parts of
                         the Developed Material as having commercial value where
                         the Scots Licensees decide reasonably and in good faith
                         that a material  cost has been incurred in  developing
                         the same. In any such case the Scots Licence-Back shall
                         be  subject to the  agreement  between  the  Scottish
                         Licensees on the one hand and the Other Pool Members on
                         the other hand of a reasonable royalty  reflecting  an
                         appropriate proportion of such cost (such agreement not
                         to be unreasonably withheld or delayed); and

                          (ii)     the Scots Licensees shall not be obliged to
                                   license any part of the Developed Material
                                   where the Scots Licensees believe reasonably
                                   and in good faith that the same would confer
                                   a significant competitive benefit on the
                                   Other Pool Members and for that reason should
                                   not be licensed to them.

                  (I)     The Scots Licensees shall notify the Executive
                          Committee at least once every six months of all
                          Developed Material that has been produced during the
                          preceding six month period.

         4.6      Reporting requirement: The Scots Licensee shall supply the
                  Executive Committee from time to time on request with a
                  statement signed by a director of the Scots Licensee which
                  certifies that the Required Documentation and Pool 1998
                  Software is being used only in accordance with this Section 4.

         4.7      Access: The Scots Licensee shall grant the Executive Committee
                  or its nominee access upon reasonable prior notice to the
                  Scots Licensee's premises in order to audit the use of the
                  Required Documentation and Pool 1998 Software.

         4.8      Indemnity: The Scottish PESs and Scottish Settlements shall
                  jointly and severally indemnify and keep indemnified the
                  Combined Members and each of them on demand against all direct
                  losses, costs, damages, expenses, liabilities and claims
                  suffered or incurred by any of the Combined Members arising
                  out of or in relation to any Scots Licensee's breach of any of
                  its obligations under this Section 4.

         4.9      Further licences: Pool Members agree that the Scottish PESs
                  and Scottish Settlements shall be entitled to a licence to use
                  the EAC/AA System and the NHH Data Aggregation System on terms
                  and conditions comparable to those on which a licence to use
                  the same is offered to Public Electricity Suppliers generally.

SCOTTISH REQUIREMENTS AND THE RELEVANT 1998 SYSTEMS

         5.1      Change to the Operational Framework: The provisions of
                  Schedule 22 shall govern any addition to, deletion from or
                  other change to the Operational Framework.

         5.2      Change control: Subject to sub-section 5.1, the provisions of
                  Scots Subsidiary Document 3 shall govern the control of a
                  change (which shall include any request by the Scottish PESs
                  or Scottish Settlements for an additional requirement) to the
                  Relevant 1998 Systems insofar as the change concerns a change
                  to the Relevant 1998 Systems requested by the Scottish PESs or
                  Scottish Settlements for the purposes of the Scottish
                  Settlements Project.

          5.3  Disputes over change control: If pursuant to any Scots Subsidiary
               Document this  sub-section  is stated to apply and the relevant
               Systems   Requirement   Request   relates  to  changes  in  the
               functionality of the Relevant 1998 Systems then, notwithstanding
               the provisions of Part III of the Agreement, the determination of
               the Executive Committee in relation to the matter shall be final,
               conclusive and binding and there shall be no right of referral to
               Pool  Members in general  meeting  nor any right of appeal to the
               Director and each Party expressly,  irrevocably  and
               unconditionally waives all such rights of referral and appeal.

          5.4  Other  changes to the 1998 Programme:  Pool Members acknowledge
               that, in respect of any change to the 1998 Programme required by
               the Scottish PESs (or, as the case may be, Scottish Settlements)
               for the purposes of the Scottish  Settlements Arrangements which
               does not fall to be dealt  with by  sub-section 5.1 or 5.2, the
               Scottish  PESs (or, as the case may be,  Scottish Settlements)
               shall have the right,  and shall be  obliged, to use the change
               control  procedure  established under the 1998 Programme and the
               costs of any such change and the change control charges shall be
               borne by the Scottish  PESs  (or, as the case may be, Scottish
               Settlements) as if they were charges under sub-section 9.1 or, as
               the case may be, 9.2.


<PAGE>

1998 CONTRACTORS' SERVICES

         6.1      Retaining 1998 Contractors:

          (A)  If the Scottish PESs (or either of them) or Scottish  Settlements
               wish to employ or retain any 1998 Contractor to undertake work or
               provide services in relation to the Scottish  Settlements Project
               which is or are broadly  equivalent to the work or services which
               any 1998  Contractor is or are performing in relation to the 1998
               Programme for the benefit of all Pool Members (including, for the
               avoidance of doubt,  the development of the EAC/AA  System),  the
               Scottish PESs or (as the case may be, Scottish Settlements) shall
               procure  that,  before  they  or it  enter  into  a  contract  or
               arrangement  with such 1998  Contractor for such work or services
               (the "Scots  Contract"),  the 1998 Contractor (or, where the 1998
               Contractor  is a  sub-contractor,  the principal
               1998 Contractor) shall,  unless the Executive Committee otherwise
               resolves upon  application  made by the Scottish PESs (or, as the
               case may be,  Scottish  Settlements),  confirm in writing to Pool
               Members  (or a nominee  on their  behalf) in the terms set out in
               paragraph 6.1(B).

(B) The terms referred to in paragraph 6.1(A) are that the entry into and
performance of the Scots Contract, either in itself or in conjunction with the
other contracts and arrangements of the relevant 1998 Contractor (including any
contacts or arrangements relating to the 1998 Programme), will not affect
adversely the performance of such 1998 Contractor's obligations to Pool Members
under its contract or arrangement with them (or their nominee) or cause or
otherwise result in such 1998 Contractor being in breach of any of its
obligations to Pool Members under its contract or arrangement with them (or
their nominee), to the intent that such confirmation shall constitute a legally
binding obligation of such 1998 Contractor under such contract or arrangement
with Pool Members (or their nominee).
         6.2      List of 1998 Contractors: The Executive Committee shall
                  provide the Scottish PESs from time to time with an up-to-date
                  list of all the 1998 Contractors and a summary of the work or
                  services that they have been retained to perform.

         6.3      No restriction: Nothing in this Section 6 shall preclude or
                  restrict the Scottish PESs or Scottish Settlements from
                  employing or retaining any person who is not a 1998 Contractor
                  to perform the work or services referred to in sub-section 6.1
                  or from employing or retaining any person who is a 1998
                  Contractor to perform work or services in the period after
                  completion of the 1998 Programme.

         6.4      Liaison: The Scottish PESs (or, as the case may be, Scottish
                  Settlements) and the Other Pool Members (in each case through
                  their appointed representatives) shall liaise on a regular
                  basis (usually monthly) on the planning and manpower
                  requirements for the work and services referred to in
                  sub-section 6.1.

RELATIONSHIPS

         7.1      Expert Groups: The Scottish PESs (or, as the case may be,
                  Scottish Settlements) shall have the right on the terms and
                  subject to the conditions set out in Scots Subsidiary Document
                  5 to attend meetings of those expert and systems delivery user
                  groups established under the 1998 Programme which are of
                  direct relevance to the Scottish Settlements Project.

         7.2      1998 Contractor relationship:

               (A)  The Scottish PESs and Scottish Settlements shall not contact
                    or  communicate directly  with,  or place any order with or
                    give any instruction to, any 1998 Contractor with respect to
                    any matter concerning the 1998 Programme,  the 1998 Systems,
                    the  Required  Documentation  or the Pool 1998  Software but
                    shall  address all  such  communications  to the  Programme
                    Liaison  Officer (in  the  form,  where  appropriate,  of a
                    Systems Requirement Request) provided that the Scottish PESs
                    and Scottish  Settlements shall have the right to contact or
                    communicate directly with (and in the case of (ii) and (iii)
                    below, to place orders with or give  instructions to) a 1998
                    Contractor  with  respect to any such matter (but subject to
                    Section 4):-

(i)                                in the case and for the purposes of an
                                   inspection approved by the Programme Board
                                   (or otherwise determined to be made on appeal
                                   from the decision of the Programme Board) in
                                   accordance with paragraph (C) below;

(ii) in the circumstances and for the purposes described in sub-section 6.1; and
(iii) in the case of a determination of the Executive Committee that, in the
reasonable opinion of the Scottish PESs, is unfavourable to the Scottish PESs
(or, as the case may be, Scottish Settlements) in a significant respect where,
pursuant to sub-section 5.3, the determination of the Executive Committee is
final (but then only in relation to those matters which were the subject of that
determination and on the terms set out in sub-section 6.1),
                          provided that nothing in this paragraph (A) shall
                          prevent or restrict either of the Scottish PESs or
                          Scottish Settlements from contacting or communicating
                          directly with any 1998 Contractor with respect to work
                          or services required for the production of Developed
                          Material.

                  (B)     The Scottish PESs and Scottish Settlements shall not
                          interfere with the performance by any 1998 Contractor
                          of any of its obligations in connection with the 1998
                          Programme.

                  (C)              (i) If the Scottish PESs or Scottish
                                   Settlements have a material concern that the
                                   progress of work on the 1998 Programme is
                                   such as to cause the date for completion of
                                   the Scottish Settlements Project to be
                                   delayed, the Scottish PESs and Scottish
                                   Settlements shall have the right to request
                                   inspection of work on the 1998 Programme in
                                   accordance with paragraphs (C)(ii) and (iii)
                                   below.

               (ii) An  application for  inspection  by the  Scottish  PESs  or
                    Scottish  Settlements referred to in paragraph (C)(i) shall
                    be made to the  Programme Board with reasons in support and
                    details  of  the  form  of inspection  required  (it  being
                    understood   that  any  such inspection  will  normally  be
                    conducted under the supervision of the Programme Board). The
                    Programme  Board  will  give due consideration  to any such
                    application  and will notify the Scottish  PESs (or, as the
                    case  may be,  Scottish  Settlements) of its  determination
                    whether the case for such an  inspection has been made and,
                    if a case for an  inspection  has been made,  the form that
                    such inspection is to take.

                          (iii)    If the Programme Board determines that a case
                                   for an inspection has been made, Pool Members
                                   shall use all reasonable endeavours to
                                   facilitate the carrying out of such
                                   inspection in accordance with the
                                   determination of the Programme Board.

                          (iv)     If the Programme Board determines that a case
                                   for an inspection has not been made, the
                                   Scottish PESs in their capacity as Pool
                                   Members shall have the right to refer the
                                   matter to the Executive Committee for
                                   determination and to appeal such
                                   determination pursuant to the terms of this
                                   Agreement.

                  (D)     The Pool Members shall arrange for the Scottish PESs
                          (or, as the case may be, Scottish Settlements) to
                          receive copies of each 1998 Contractor's periodic
                          progress reports to the Programme Board or the 1998
                          Programme project boards on matters concerning the
                          1998 Programme after deletion of any information in or
                          accompanying any such report which is reasonably
                          considered by those administering the 1998 Programme
                          to be commercially sensitive .

                  (E)     The Scottish PESs (or, as the case may be, Scottish
                          Settlements) shall be entitled at their own cost and
                          expense to attend and witness acceptance testing of
                          the ISRA System and to receive copies of the related
                          test logs as may be reasonably required by the
                          Scottish PESs (or, as the case may be, Scottish
                          Settlements).

NO REPRESENTATION OR LIABILITY

               8.1  No  representation  or warranty:  With the  exception of the
                    confirmations  given  by the  Pool  Members  in  sub-section
                    4.2(B),  none of the  Combined  Members  makes or gives  any
                    representation  or warranty as to the suitability or fitness
                    of the Required  Documentation or the Pool 1998 Software for
                    any particular  purpose and all  conditions,  warranties and
                    representations   whether  express  or  implied  as  to  the
                    Required  Documentation or the Pool 1998 Software (including
                    as to its quality,  fitness,  operation or use) are excluded
                    to the fullest extent permitted by law.

         8.2      No reliance: Each of the Scottish PESs (for itself and on
                  behalf of Scottish Settlements) hereby acknowledges that it
                  has not been induced to enter into the arrangements set out in
                  this Schedule and the Scots Subsidiary Documents by, nor has
                  it placed reliance on any prior representation or statement
                  (whether oral or in writing) made by, any of the Combined
                  Members or the 1998 Contractors.

          8.3  Exclusion of certain  types of loss:  Each of the Scottish  PESs
               (for  itself  and  on  behalf  of  Scottish  Settlements) hereby
               acknowledges  and agrees  that,  save as provided in sub-section
               8.4,  in no  circumstances  will any of the  Combined Members be
               liable to either of the  Scottish  PESs or  Scottish Settlements
               under  this  Schedule or  the  Scots  Subsidiary  Documents  in
               contract, tort (including negligence or breach of statutory duty)
               or  otherwise  for loss  (whether direct or indirect) of profit,
               loss  of  revenue,  loss  of use,  loss  of contract  or loss of
               goodwill  or for any  indirect  or  consequential loss or damage
               whatsoever.

         8.4      No exclusion for death or personal injury: Nothing in this
                  Schedule shall exclude liability for death or personal injury
                  resulting from the negligence of a Party or any of its
                  officers, employees or agents.

         8.5      Reasonableness of exclusion: Each of the Scottish PESs (for
                  itself and on behalf of Scottish Settlements) acknowledges
                  that it is aware of and understands the provisions in relation
                  to liability set out in this Section and in particular that,
                  given the level of charges made for the provision and use of
                  the Required Documentation and Pool 1998 Software, it is
                  reasonable for the Combined Members to exclude their liability
                  as provided for in this Section.

PAYMENTS

         9.1      Charges: The Scottish PESs and Scottish Settlements shall be
                  jointly and severally liable to pay to the Other Pool Members
                  in accordance with sub-section 9.3:-

(A)                       in respect of the provision of the Required
                          Documentation identified within Part A of Subsidiary
                          Document 1, (pound)200,000;

(B) in respect of the grant of the Scots 1998 Licence, (pound)1 (receipt of
which is hereby acknowledged); (C) (without prejudice to paragraph 4.5(H)), in
respect of any maintenance, development or enhancement of the materials which
are the subject of the Scots 1998 Licence, such amount (if any) as may be agreed
from time to time by the Scottish PESs with the Executive Committee; and
                  (D)     against presentation of invoices or such other types
                          of supporting evidence as Pool Members generally
                          receive in respect of Pool costs:-

               (i)  the agreed costs (including legal costs and expenses) of the
                    working group in preparing and negotiating this Schedule;

               (ii) all other costs  incurred in relation to the 1998  Programme
                    in establishing  and operating the  arrangements  set out or
                    referred  to  in  this  Schedule  or  the  Scots  Subsidiary
                    Documents  which would not  otherwise  have been incurred by
                    them including,  without  prejudice to the generality of the
                    foregoing, the costs of any additional staffing for the 1998
                    Programme and the costs of the Programme Liaison Officer and
                    the Responsible Officers; and

(iii) the costs of giving effect to any change to (which shall include any
additional requirement for) the Relevant 1998 Systems requested by the Scottish
PESs or Scottish Settlements.


9.2  Change control charges: Without prejudice to paragraph 9.1(D):-

                  (A)     the Scottish PESs and Scottish Settlements shall be
                          jointly and severally liable to pay all sums incurred
                          in the preparation of a Systems Requirement Request.

                  (B)     the Scottish PESs and Scottish Settlements shall be
                          jointly and severally liable to reimburse the Other
                          Pool Members all sums payable to the relevant 1998
                          Contractor in respect of the preparation of any
                          Analysis and all sums incurred in the preparation of a
                          Systems Requirement Response.

         9.3      Due date for payment: Scottish PESs shall pay all sums payable
                  under sub-sections 9.1 and 9.2 within 30 days of receiving an
                  invoice for the same from the Other Pool Members or from EPFAL
                  or another nominated agent on their behalf (the "Scots Due
                  Date").

         9.4      Charges exclusive of VAT: All sums payable under sub-sections
                  9.1 and 9.2 are exclusive of Value Added Tax which shall be
                  paid by the Scottish PESs (or, as the case may be, Scottish
                  Settlements) at the rate and in the manner prescribed by law
                  from time to time.

         9.5      Default Interest: If the Scottish PESs (or, as the case may
                  be, Scottish Settlements) fail to make payment of any sum
                  payable under sub-section 9.1 or 9.2 by the Scots Due Date
                  therefor, interest shall accrue on the unpaid amount from the
                  Scots Due Date to (and including) the date of payment, at the
                  rate (as well after as before any judgement) of four per cent.
                  above the Pool Banker's base lending rate from time to time.



<PAGE>


THIS SUPPLEMENTAL DEED is made on                   , 1997

BETWEEN:-

(1)      THE PERSONS whose names, registered numbers and registered or principal
         offices are set out in Part I of Schedule 1;

(2)      THE PERSONS whose names, registered numbers and registered or principal
         offices are set out in Part II of Schedule 1;

(3)      ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED (registered number
         2444282) whose registered office is situate at Fairham House, Green
         Lane, Clifton, Nottingham NG11 9LN as Settlement System Administrator;

(4)      ENERGY POOL FUNDS ADMINISTRATION LIMITED (registered number 2444187)
         whose registered office is situate at 185 Park Street, London SE1 9DY
         as Pool Funds Administrator;

(5)      THE NATIONAL GRID COMPANY plc (registered number 2366977) whose
         registered office is situate at National Grid House, Kirby Corner Road,
         Coventry CV4 8JY as Grid Operator and Ancillary Services Provider;

(6)  SCOTTISH POWER plc  (registered  number 117120) whose principal  office is
     situate  at 1 Atlantic  Quay,  Glasgow G2 8SP,  Scotland  as an Externally
     Interconnected Party;

(7)      ELECTRICITE DE FRANCE, SERVICE NATIONAL whose principal office is
         situate at Departement Relations avec l'Etranger, Echanges d'Energie, 2
         Rue Louis Murat, 5eme etage, 75384 Paris, Cedex 08, France as an
         Externally Interconnected Party;

(8)      THE OTHER PARTIES whose names, registered numbers and registered or
         principal offices are set out in Schedule 2; and

(9)      THE METER OPERATOR PARTIES whose names, registered numbers and
         registered or principal offices are set out in Schedule 3.

WHEREAS:-

(A)      by a Pooling and Settlement Agreement for the Electricity Industry in
         England and Wales dated 30th March, 1990 (the "Pooling and Settlement
         Agreement") the parties thereto agreed to give effect to and be bound
         by certain rules and procedures for the operation of an electricity
         trading pool and the operation of a settlement system;

(B)      the Pooling and Settlement Agreement has been amended and/or restated
         by nineteen supplemental agreements, and hereinafter references to the
         Pooling and Settlement Agreement are to that agreement as most recently
         amended and restated; and

(C)      the parties to this Deed (being (i) all the Parties at the date hereof
         and (ii) all the Meter Operator Parties at the date hereof) have agreed
         to amend the Pooling and Settlement Agreement on the terms and subject
         to the conditions set out below.

NOW THIS DEED WITNESSES as follows:-



<PAGE>


12





INTERPRETATION

Except   where defined herein or where the context otherwise requires, words and
         expressions defined in the Pooling and Settlement Agreement shall have
         the same respective meanings when used in this Deed.

11.2 The table of contents and the headings to each of the Clauses are inserted
for convenience only and shall be ignored in construing this Deed.
AMENDMENTS

         The parties hereby agree that with effect on and from midnight on 31st
         July, 1997, the Pooling and Settlement Agreement shall be amended as
         set out in Schedule 4.

CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT

         The Pooling and Settlement Agreement shall remain in full force and
         effect and this Deed and the Pooling and Settlement Agreement shall be
         treated as one document so that, upon the Pooling and Settlement
         Agreement being amended pursuant to Clause 2, all references to the
         Pooling and Settlement Agreement shall be treated as references to that
         agreement as amended by this Deed.

MISCELLANEOUS

         The provisions of Clauses 75 to 79 (inclusive) and 81 to 84 (inclusive)
         of the Pooling and Settlement Agreement shall be deemed to be
         incorporated herein mutatis mutandis.

ENTIRE AGREEMENT

Each     party acknowledges that in entering into this Deed on the terms set out
         herein it is not relying upon any representation, warranty, promise or
         assurance made or given by any other party or any other person, whether
         or not in writing, at any time prior to the execution of this Deed
         which is not expressly set out herein.

15.2 None of the parties shall have any right of action against any other party
     arising out of or in connection with any representation, warranty, promise
     or assurance  referred to in sub-clause  5.1 (except in the case of fraud).
     GOVERNING LAW

         This Deed shall be governed by, and construed in all respects in
accordance with, English law.

IN WITNESS whereof this document has been duly executed and delivered as a deed
the day and year first above written









<PAGE>


                                                  SCHEDULE 1:
                                            Part I: The Generators

Name                                   Registered      Registered or
                                       Number          Principal Office
Anglian Power Generators Limited       2488955         Wherstead Park
                                                       Wherstead
                                                       Ipswich
                                                       Suffolk
                                                       IP9 2AQ
Barking Power Limited                  2354681         Devonshire House
                                                       Mayfair House
                                                       London W1X 5FH
British Nuclear Fuels plc              1002607         Risley
                                                       Warrington
                                                       Cheshire
                                                       WA3 6AS
Celtpower Limited                      2656561         13 Charles II Street
                                                       London
                                                       SW1Y 4QT
Citigen (London) Limited               2427823         100 Thames Valley
                                                       Park Drive
                                                       Reading
                                                       Berkshire
                                                       RG6 1PT
Corby Power Limited                    2329494         Mitchell Road
                                                       Phoenix Parkway
                                                       Corby
                                                       Northamptonshire
                                                       NN17 5QT
Derwent Cogeneration Limited           2703635         Landsdowne House
                                                       Berkeley Square
                                                       London W1X 5DH
Eastern Merchant Generation Limited    3116225         Wherstead Park
                                                       Wherstead
                                                       Ipswich
                                                       Suffolk
                                                       IP9 2AQ
Electricite de France, Service         -               Department Relations 
                                                       avec
National                                               I'Etranger
                                                       Echanges d'Energie
                                                       2 Rue Louis Murat
                                                       5eme etage
                                                       75384 Paris
                                                       Cedex 08
                                                       France
Elm Energy & Recycling (UK) Limited    2516685         Elm Energy House 
                                                       Ettingshall Road
                                                       Wolverhampton
                                                       West Midlands WV2 2LA
Fellside Heat and Power Limited        2614535         Fellside Lodge
                                                       Seascale
                                                       Cumbria CA20 1PG
Fibrogen Limited                       2547498         Astley House
                                                       33 Notting Hill Gate
                                                       London W11 3JQ
Fibropower Limited                     2234141         Astley House
                                                       33 Notting Hill Gate
                                                       London W11 3JQ
First Hydro Company                    2444277         Bala House
                                                       Lakeside Business Village
                                                       St. David's Park
                                                       Deeside
                                                       Flintshire
                                                       CH5 3XJ
Humber Power Limited                   2571241         18 Savile Row
                                                       London
                                                       W1X 1AE
Indian Queens Power Company Limited    2928100         1 Northumberland Avenue
                                                       London
                                                       WC2N 5BW
Independent Energy UK Limited          3033406         2nd Floor, Park House
                                                       Park Street
                                                       Maidenhead
                                                       Berkshire
                                                       SL6 1SL
Keadby Generation Limited              2729513         P O Box 89, Keadby
                                                       Scunthorpe, North
                                                       Lincolnshire
                                                       DN17 3AZ
Lakeland Power Limited                 2355290         Roosecote Power Station
                                                       Roosecote Marsh
                                                       Barrow-in-Furness
                                                       Cumbria LA13 OPQ
Magnox Electric plc                    2264251         Berkeley Centre
                                                       Berkeley
                                                       Gloucestershire  GL13 9PB
Medway Power Limited                   2537903         Boston House
                                                       The Little Green
                                                       Richmond TW9 1QE
Midlands Power (UK) Limited            2251099         Mucklow Hill
                                                       Halesowen
                                                       West Midlands B62 8BP
National Power plc                     2366963         Windmill Hill Business
                                                       Park
                                                       Whitehill Way
                                                       Swindon
                                                       Wiltshire
                                                       SN5 6PB
Nuclear Electric Limited               3076445         Barnett Way
                                                       Barnwood
                                                       Gloucester
                                                       GL4 3RS
Peterborough Power Limited             2353599         Storeys Bar Road
                                                       Peterborough PE1 5NT
PowerGen plc                           2366970         53 New Broad Street
                                                       London EC2M 1JJ
Regional Power Generators Limited      2352390         Wetherby Road
                                                       Scarcroft,
                                                       Leeds LS14 3HS
Rocksavage Power Company Limited       18868           20 St. James's Street
                                                       London SW10 4UJ
Scottish Hydro-Electric plc            117119          10 Dunkeld Road
                                                       Perth PH1 5WA
Scottish Power plc                     117120          1 Atlantic Quay
                                                       Glasgow G2 8SP
Slough Energy Supplies Limited         2474514         234 Bath Road
                                                       Slough SL1 4EE
Teesside Power Limited                 2464040         4 Millbank
                                                       London SW1P 3ET
Winterton Power Limited                3001798         800 Park Avenue
                                                       Aztec West
                                                       Almondsbury
                                                       Bristol  BS12 4SE




<PAGE>


                                            Part II: The Suppliers

Name                                   Registered           Registered or
                                Number               Principal Office
British Gas Trading Ltd         3078711              Charter Court
                                                     50 Windsor Road
                                                     Slough
                                                     Berkshire SL1 2HA
British Nuclear Fuels plc       1002607              Risley
                                                     Warrington
                                                     Cheshire WA3 6AS
Candecca Resources Limited      953066               Welton Gathering Centre
                                                     Barfield Lane
                                                     Off Wragby Road
                                                     Sudbrooke
                                                     Lincoln LN2 2QU
Citigen (London) Limited        2427823              100 Thames Valley
                                                     Park Drive
                                                     Reading
                                                     Berkshire
                                                     RG6 1PT
Crosfield Limited               48745                Bank Quay
                                                     PO Box 26
                                                     Warrington
                                                     Cheshire WA5 1AB
Eastern Electricity plc         2366906              Wherstead Park
                                                     PO Box 40
                                                     Wherstead
                                                     Ipswich
                                                     Suffolk IP9 2AQ
East Midlands Electricity plc   2366923              PO Box 444
                                                     Woodyard Lane
                                                     Wollaton
                                                     Nottingham  NG8 1EZ
Electricite de France, Service  -                    Department Relations avec
National                                             l'Etranger
                                                     Echanges d'Energie
                                                     2 Rue Louis Murat
                                                     5eme etage
                                                     75384 Paris
                                                      Cedex 08
Energy Supply Contracts Limited        172268         The Havens
                                                      Ransomes Europark
                                                      Ipswich
                                                      Suffolk IP3 9SJ
Enron Capital and Trade Resources      3003823        4 Millbank
Limited                                               London SW1P 3ET
Impkemix Energy Limited                2076043        The Heath
                                                      Runcorn
                                                      Cheshire WA7 4QF
Independent Energy UK Limited          3033406        2nd Floor Park House
                                                      Park Street  Maidenhead
                                                      Berkshire SL6 1SL
London Electricity plc                 2366852        Templar House
                                                      81-87 High Holborn
                                                      London WC1V 6NU
Magnox Electric plc                    2264251        Berkeley Centre
                                                      Berkeley
                                                      Gloucestershire GL13 9PB
Manweb plc                             2366937        Manweb House
                                                      Chester Business Park
                                                      Chester CH4 9RF
Midlands Electricity plc               2366928        Mucklow Hill
                                                      Halesowen
                                                      West Midlands B62 8BP
National Power plc                     2366963      Windmill Hill Business Park
                                                      Whitehill Way
                                                      Swindon
                                                      Wiltshire
                                                      SN5 6PB
Norsk Hydro (UK) Limited               841421         Bridge House
                                                      69 London Road
                                                      Twickenham
                                                      Middlesex TW1 3RH
Northern Electric plc                  2366942        Carliol House
                                                      Market Street
                                                    Newcastle upon Tyne NE1 6NE
NORWEB plc                             2366949        PO Box 14
                                                      410 Birchwood Boulevard
                                                      Birchwood
                                                      Warrington WA3 7GA
Nuclear Electric Limited               3076445        Barnett Way
                                                      Barnwood
                                                      Gloucester
                                                      GL4 3RS
PowerGen plc                           2366970        53 New Broad Street
                                                      London EC2M 1JJ
Scottish Hydro-Electric plc            117119         10 Dunkeld Road
                                                      Perth PH1 5WA
Scottish Power plc                     117120         1 Atlantic Quay
                                                      Glasgow G2 8SP
SEEBOARD plc                           2366867        Forest Gate
                                                      Brighton Road
                                                      Crawley
                                                      West Sussex RH11 9BH
Shell Power Limited                    2559630        Rowlands Way
                                                      Withenshawe
                                                      Manchester M22 5SB
Slough Energy Supplies Limited         2474514        234 Bath Road
                                                      Slough  SL1 4EE
Southern Electric plc                  2366879        Westacott Way
                                                      Littlewick Green
                                                      Maidenhead
                                                      Berkshire SL6 3QB
South Wales Electricity plc            2366985        Newport Road
                                                      St. Mellons
                                                      Cardiff CF3 9XW
South Western Electricity plc          2366894        800 Park Avenue
                                                      Aztec West
                                                      Almondsbury
                                                      Bristol BS12 4SE
The Renewable Energy Company Limited   3043412        Stroud House
                                                      Russell Street
                                                      Stroud
                                                      Gloucestershire
                                                      GL5 3AN
UK Electric Power Limited              2844010        21 St. Thomas Street
                                                      Bristol BS1 6US
UML Limited                            661900         PO Box 115
                                                      Port Sunlight
                                                      Wirral
                                                      Merseyside
                                                      L62 4ZL
Yorkshire Electricity Group plc        2366995        Wetherby Road
                                                      Scarcroft
                                                      Leeds LS14 3HS


<PAGE>


                                                  SCHEDULE 2:
                                               The Other Parties

Name                                     Registered       Registered or
                                         Number           Principal Office
Accord Energy Limited                    2877398          Rivermill House
                                                          152 Grosvenor Road
                                                          London SW1V 3JL
AES Barry Limited                        3135522          Burleigh House
                                                          17-19 Worpe Way
                                                          Richmond
                                                          Surrey TW10 6AG
Alcan Aluminium UK Limited               750143           Chalfont Park
                                                          Gerrards Cross
                                                          Buckinghamshire
                                                          SL9 0QB
BG plc                                   2006000          100 Thames Valley
                                                          Park Drive
                                                          Reading
                                                          Berkshire RG6 1PT
Cabah Energy Limited                     2759706          190 Strand
                                                          London WC2R 1JN
Electricity Direct (UK) Limited          3174056          78 High Street
                                                          Lewes
                                                          East Sussex BN7 1XF
Enfield Energy Centre Limited            2796628          Concorde House
                                                          Concorde Way
                                                          Stockton on Tees
                                                          Cleveland
                                                          TS18 3RB
Fibrowatt Thetford Limited               3057688          Astley House
                                                          33 Notting Hill Gate
                                                          London W11 3JQ
Hydro Electric Energy Limited            2487475          Royex House
                                                          Aldermanbury Square
                                                          London EC2V 7LD
Keadby Power Limited                     2548042          PO Box 89  Keadby
                                                          Scunthorpe  North
                                                          Lincolnshire DN17 3AZ
Kingsnorth Power Limited                 2656343          Chancery House
                                                          53-64 Chancery Lane
                                                          London WC2A 1QU
Meter Operators Limited                  2841018          Lynton House
                                                          7-12 Tavistock Square
                                                          London WC1H 9BQ
Pentex (East Midlands) Limited           2275006          Union Buildings
                                                          15 Union Street
                                                          Aberdeen AB1 2BU
Seabank Power Limited                    2591188          Severn Road  Hallen
                                                          Bristol BS10 7SP
Spalding Energy Company Limited          19668            20 St. James's Street
                                                          London SW1A 1ES




<PAGE>


                                                  SCHEDULE 3:
                                The Meter Operator Parties who are not Parties

Name                                   Registered        Registered or
                                       Number            Principal Office
Control Devices and Systems Limited    1242585           PO Box 56
                                                         101 Mill Lane
                                                         Newbury
                                                         Berkshire
                                                         RG14 5RE
Datum Solutions Limited                2815238           185 Park Street
                                                         London
                                                         SE1 9DY
DrakMarn O&M Ltd                       3124701           53 New Broad Street
                                                         London  EC2M 1JJ
E. Squared Limited                     2674129           Almac House
                                                         Church Lane
                                                         Bisley
                                                         Surrey
                                                         GU24 9DR
Northern Energy Services Limited       2868141           5 Derwent Place
                                                         Spotborough
                                                         Doncaster
                                                         DN5 7PN
PowerMet Limited                       2877912           3 Park Place
                                                         London SW1A 1LP
Schlumberger Industries Limited        534821            1 Kingsway
                                                         London WC2B 6XH
Stanor National Contracts Limited      2769170           7-12 Tavistock Square
                                                         London WC1H 9BQ
The Challenge Group                    -                 22 Tally Road
                                                         Oxted
                                                         Surrey  RH8 0TG




<PAGE>


                                                      17





<PAGE>


                                   SCHEDULE 4:
               Amendments to the Pooling and Settlement Agreement

         The Pooling and Settlement Agreement shall be amended as follows:-

Operative Provisions

By   the deletion of existing Clause 1.7 and by the  insertion of the following
     new Clause in substitution therefor:-

"1.7 1998: The provisions of Schedules 22, 23, 24 and 25 shall have effect.".

By       the deletion of the word "and" at the end of paragraph (j) of Clause
         15.6.4 and by the insertion of the following new paragraph immediately
         after paragraph (k) of Clause 15.6.4:-

                  "(l)    if (where applicable, after the provisions of
                          paragraph (k) above have been followed) only two RS
                          Nominees appear on the SG Preference List or (as the
                          case may be) the IS Preference List and the Weighted
                          Votes cast in favour of both such RS Nominees are
                          equal then the selection of the SG Committee Member or
                          (as the case may be) the IS Committee Member shall be
                          decided by the drawing of lots in a manner to be
                          determined by the Pool Chairman; and".

By       the deletion of the word "and" at the end of Clause 24.2.29, by the
         deletion of the full stop at the end of Clause 24.2.30 and the
         subsitution therefor of the text "; and", and by the insertion of the
         following Clause immediately after Clause 24.2.30:-

         "24.2.31         Acting as, and performing the functions of, the
                          Accreditation Authority (as defined in Schedule 25) on
                          the terms and subject to the conditions of that
                          Schedule.".

By  the deletion of the heading of Clause 47.3 and the substitution therefor of
     the following:-

"47.3    Terms of engagement - scope of work:".

By       the renumbering of Clause 47.3.1 as Clause 47.3.1(a) and by the
         insertion of the following paragraphs immediately after such Clause
         47.3.1(a):-

                   "(b)   The exclusions from and limitations of liability of
                          the Pool Auditor shall be as set out in its terms of
                          engagement and shall apply to this Agreement as if the
                          same were set out in full herein.

                    (c)  Each Pool Member shall  comply  with any arrangements
                         made  from  time to time  by the Executive Committee
                         relating  to the making  of  claims against the Pool
                         Auditor and to the sharing of any  recoveries from the
                         Pool Auditor the amount of which may be affected by any
                         limitations of liability of  the  Pool  Auditor  as
                         referred to in paragraph (b) above. In particular, each
                         Pool Member shall notify the Executive Committee of any
                         claim  brought by it against the Pool Auditor where it
                         is not practicable for the claim to be conducted by the
                         Executive Committee on its  behalf and shall keep the
                         Executive Committee fully informed as to the conduct of
                         such a claim.".

By the insertion of the following new Clause immediately after Clause 48.10:-

"48.11   Certification Agent:

         48.11.1          If, and for so long as, the Pool Auditor is also
                          appointed as the Certification Agent, the Executive
                          Committee may agree with the Accreditation Authority
                          that the terms of engagement of the Certification
                          Agent shall be incorporated in the terms of engagement
                          and scope of work to be carried out by the Pool
                          Auditor, in which event the terms of engagement of the
                          Certification Agent shall be agreed, amended and
                          substituted by the Executive Committee instead of the
                          Accreditation Authority.

         48.11.2          In its capacity as Certification Agent, the Pool
                          Auditor shall not be required to comply with the
                          provisions of Clauses 48.2 or 48.3 and the provisions
                          of Clause 48.7 shall not apply.

         48.11.3 In this Clause 48.11, terms defined in Schedule 25 shall have
the same meaning.".

Schedule 4

By       the insertion, in Part A of the Appendix to Schedule 4, of the
         following definitions in the correct alphabetical order:-

     ""Ad Hoc Consultancy Services" means those Consultancy Services described
          in sub-section 3.2 of Part B;"; and

         ""Ad Hoc Development Services" means those Development Services
         described in sub-section 4.2 of Part B;".

By       the deletion of the existing Section 3 of Part B of the Appendix to
         Schedule 4 and by the insertion of the following new Section in
         substitution therefor:-

"3.      CONSULTANCY SERVICES

3.1      Consultancy Services: Consultancy Services are those Services described
         as Consultancy Services in the Service Lines set out in the Menu of
         Consultancy Services Prices.

3.2      Ad Hoc Consultancy Services: Ad Hoc Consultancy Services are those
         Consultancy Services which the Settlement System Administrator is to
         provide on an ad hoc basis as described in the relevant Service Line.".

By       the deletion of the existing Section 4 of Part B of the Appendix to
         Schedule 4 and by the insertion of the following new Section in
         substitution therefor:-

"4.      DEVELOPMENT SERVICES

4.1      Development Services: Development Services are those Services described
         as Development Services in the Service Lines set out in the Menu of
         Development Services Prices.

4.2      Ad Hoc Development Services: Ad Hoc Development Services are those
         Development Services which the Settlement System Administrator is to
         provide on an ad hoc basis as described in the relevant Service Line.".

By       the insertion of the following new sub-section immediately after
         sub-section 2.3 of Part F of the Appendix to Schedule 4:-

"2.4 Ad Hoc Consultancy  Services: the Contract Manager shall have the right to
     Order  Ad  Hoc  Consultancy  Services  in  accordance with  the  Menu  of
     Consultancy Services Prices.".

By       the insertion of the following new sub-section immediately after
         sub-section 3.5 of Part F of the Appendix to Schedule 4:-

"3.6 Ad Hoc Development Services:  the Contract Manager shall have the right to
     Order  Ad  Hoc  Development Services  in  accordance  with  the  Menu  of
     Development Services Prices.".

By       the insertion of the following new sub-section immediately after
         sub-section 4.3 of Part G of the Appendix to Schedule 4:-

"4.4 Ad Hoc  Consultancy  Services: The  charge  for  each  Ad Hoc  Consultancy
     Services  shall  be  the corresponding  price  set  out  in  the  Menu  of
     Consultancy Services Prices.".

By       the insertion of the following new sub-section immediately after
         sub-section 5.5 of Part G of the Appendix to Schedule 4:-

"5.6 Ad Hoc Development Services: The charge for each Ad Hoc Development Service
     shall  be the  corresponding price  set  out in the  Menu  of  Development
     Services Prices.".

By       the deletion of paragraph (b) from Section 9 of Part G of the Appendix
         to Schedule 4 and the substitution therefor of the following new
         paragraph:-

         "(b)     charges for all Ad Hoc Production Services, Ad Hoc Consultancy
                  Services and Ad Hoc Development Services provided or to be
                  provided during such month, determined as provided in
                  sub-sections 2.2, 4.4 or 5.6 above (as the case may be);".

By       the deletion of paragraph (b) from sub-section 2.4 of Part J of the
         Appendix to Schedule 4 and the substitution therefor of the following
         new paragraph:-

     "(b) the charge for Ad Hoc Production Services, Ad Hoc Consultancy Services
          and Ad Hoc Development Services;".

By       the deletion from sub-paragraphs (c)(i)(A)(1), (A)(2) and (B) of
         sub-section 1.2 of Part K of the Appendix to Schedule 4 of all
         references to "50MW" and by the substitution therefor of references to
         "100MW".

Schedule 22

By the deletion from the last sentence of paragraph 3.4.4 of Schedule 22 of the
reference to "paragraph 4.3.2" and by the substitution therefor of the reference
to "paragraph 3.4.2".

New Schedule 24

By the insertion of the following new Schedule 24:-

                                                 "SCHEDULE 24

                                                 [Not used.]"

New Schedule 25

By the insertion of the following new Schedule 25:-

<PAGE>




                                                 "SCHEDULE 25

                                                 Accreditation

                                            PART 1 : INTERPRETATION

1.1 Defnitions: In this Schedule, unless the context otherwise requires:

         "1998 Programme" has the meaning given to that term in Schedule 22;

         "Accreditation" means, subject to sub-section 5.7, written confirmation
         by the Accreditation Authority that an Applicant has, in the opinion of
         the Accreditation Authority, satisfied the relevant Accreditation
         Requirements, and "Accredited" shall be construed accordingly;

         "Accreditation Administrator" means the person (if any) for the time
         being and from time to time appointed pursuant to Part 3 as the
         Accreditation Administrator for the purposes of this Schedule;

         "Accreditation Authority" means the person for the time being and from
         time to time appointed pursuant to Part 2 as the Accreditation
         Authority for the purposes of this Schedule;

         "Accreditation Process" means the process set out in this Schedule and
         Agreed Procedure 531 whereby an Applicant is assessed to determine
         whether it satisfies the Accreditation Requirements;

         "Accreditation Requirements" means, in relation to an Applicant, the
         requirements which that Applicant is required to satisfy in order to
         perform the specific function or functions for which it is applying to
         be Accredited (being one or more of the functions associated with the
         categories referred to in paragraphs (a) to (j) (inclusive) of
         sub-section 2.3), as determined for the time being and from time to
         time by the Accreditation Authority;

         "Agency System" means, in relation to an Applicant, the particular
         systems and procedures of that Applicant (or for which that Applicant
         is responsible) relevant to the specific function for which it is
         applying to be Accredited;

         "Applicant" means a person who falls within one or more of the
         categories referred to in paragraphs (a) to (j) (inclusive) of
         sub-section 2.3 and who, in accordance with this Schedule, applies for
         one or more of its Agency Systems to be Certified and/or for itself to
         be Accredited and, where the context so admits, shall include a person
         applying for re-Certification of any of its Agency Systems in
         accordance with this Schedule;

         "Certification" means written confirmation by the Accreditation
         Authority that a particular Agency System of an Applicant has, in the
         opinion of the Accreditation Authority, satisfied the Certification
         Requirements and, where the context so admits, shall include
         re-Certification of Agency Systems, and "Certify" and "Certified" shall
         be construed accordingly;

         "Certification Agent" means the person for the time being and from time
         to time appointed pursuant to Part 4 as the Certification Agent for the
         purposes of this Schedule;

     "Certification  Documentation"  has  the meaning given to that term in
          paragraph 4.3.1;

          "Certification Process" means the process set out in this Schedule and
         Agreed Procedure 531 whereby a particular Agency System of an Applicant
         is assessed to determine whether it satisfies the Certification
         Requirements;

         "Certification Requirements" means, in relation to any of the Agency
         Systems of an Applicant, the requirements which such Agency System is
         required to satisfy in order to perform the specific function or
         functions for which the Applicant is applying to have such Agency
         System Certified (being one or more of the functions associated with
         the categories referred to in paragraphs (a) to (j) (inclusive) of
         sub-section 2.3), as determined for the time being and from time to
         time by the Accreditation Authority;

         "Interested Person" has the meaning given to that term in section 7;

         "Menu of Certification Fees" means the scale of fees to be charged to
         Applicants in connection with the Certification Process, as set out in
         Agreed Procedure 531; and

         "Pool" has the meaning given to that term in Schedule 22.

1.2 Interpretation: In this Schedule, except where the context otherwise
requires:

         1.2.1    references to any Agency System of an Applicant include any
                  Agency System for which that Applicant is responsible; and

         1.2.2    references to a particular Part, Section, sub-section or
                  paragraph or to any Annex shall be a reference to that Part,
                  Section, sub-section or paragraph of, or Annex to, this
                  Schedule.

                      PART 2 : THE ACCREDITATION AUTHORITY

2.1 Appointment and removal of Accreditation Authority:

         2.1.1       The Executive Committee shall act as, and shall perform the
                     functions of, the Accreditation Authority pursuant to
                     Clause 24.2.31 (and Pool Members shall procure that the
                     Executive Committee so acts and performs) until such time
                     as Pool Members in general meeting otherwise resolve.

         2.1.2       Pool Members in general meeting shall have the right to
                     appoint and remove the Accreditation Authority from time to
                     time and (subject to sub-section 2.4) to agree, amend and
                     substitute the terms of engagement of the Accreditation
                     Authority.

         2.1.3       Unless otherwise determined by Pool Members in general
                     meeting, the costs, fees, expenses, liabilities and losses
                     of, and all other amounts incurred or paid by, the
                     Accreditation Authority shall be dealt with in accordance
                     with the PFA Accounting Procedure.

2.2      Accreditation Authority's functions: The functions of the Accreditation
         Authority shall be confined to the operational requirements of Pool
         Members collectively in their capacity as such and (subject as
         aforesaid) shall be as set out in this Schedule and Agreed Procedure
         531 and shall include such powers and authorities as may be necessary
         or incidental to the performance of such functions.

2.3      Categories of Applicant: On the terms and subject to the conditions of
         this Schedule, the Accreditation Authority shall be responsible for the
         Certification of each of the Agency Systems of, and the Accreditation
         of, Applicants falling within the following categories:

         (a)      PES registration service providers;

         (b)      non half hourly data collectors;

         (c)      non half hourly data aggregators;

         (d)      non half hourly meter operators;

         (e)      half hourly data collectors;

         (f)      half hourly data aggregators;

         (g)      half hourly meter operators;

         (h)      teleswitch operators;

         (i)      meter administrators; and

         (j)      such other categories of person, if any, as the Executive
                  Committee, with the prior written consent of the Director, may
                  determine.

2.4      Executive Committee as Accreditation Authority: The provisions of
         Clauses 16.9, 17.4, 18, 19, 20.4 and 22 to 24 (inclusive) shall apply
         in relation to the Executive Committee, the Committee Members, the Pool
         Chairman, the Chief Executive, the personnel referred to in Clause
         17.2.1 and the Secretary when the Executive Committee is acting as, and
         performing the functions of, the Accreditation Authority provided that:

         2.4.1       notice of meetings of the Accreditation Authority need be
                     given only to the Committee Members, the Pool Chairman, the
                     Chief Executive (if any), the Pool Auditor, the
                     Certification Agent and the Accreditation Administrator
                     and, insofar as concerns the Certification of the Agency
                     System of an Applicant or the Accreditation of an
                     Applicant, that Applicant. Clause 18.1.2 shall be modified
                     accordingly;

         2.4.2       if any Committee Member or the Certification Agent or the
                     Accreditation Administrator wishes to advise additional
                     matters which he or it wishes to be considered at a meeting
                     of the Accreditation Authority he or it shall give notice
                     to all other persons entitled to attend that meeting no
                     later than three working days before the date of the
                     meeting (or such lesser period as the Accreditation
                     Authority may from time to time determine).
                     Clause 18.1.4 shall be modified accordingly;

         2.4.3       minutes of meetings of the Accreditation Authority shall be
                     confidential and copies shall be required to be provided
                     only to those persons who were entitled to attend the
                     relevant meeting and, insofar as concerns the Certification
                     of the Agency System of an Applicant or the Accreditation
                     of an Applicant, that Applicant. Clause 18.1.6 shall be
                     modified accordingly;

         2.4.4       each of the Pool Chairman, the Chief Executive, the Pool
                     Auditor, the Certification Agent and the Accreditation
                     Administrator (or its or his respective duly appointed
                     representative) shall have the right to attend and speak
                     (but not to vote) at meetings of the Accreditation
                     Authority. The Chief Executive (or his duly appointed
                     representative) shall be obliged so to attend. With the
                     exception of the final sentence of Clause 19.4, that Clause
                     shall not apply;

         2.4.5       save for Clause 20.4, Clause 20 shall not apply;

         2.4.6       any question or matter arising at a meeting of the
                     Accreditation Authority shall be decided by a 75 per cent.
                     majority of the votes cast at the meeting by Committee
                     Members entitled to vote in accordance with Section 2.4.10.
                     On any such question or matter each Committee Member shall
                     be entitled to one vote. Clause 22.2 shall not apply;

         2.4.7       a decision duly made at a meeting of the Accreditation
                     Authority shall (unless otherwise determined by the
                     Accreditation Authority or otherwise provided by the terms
                     of the decision) have immediate effect. Clause 22.4 shall
                     not apply;

         2.4.8       Clauses 22.3 and 22.5 to 22.11 (inclusive) shall not apply:
                     in particular, but without prejudice to the generality of
                     the foregoing, no decision of the Accreditation Authority
                     shall be referred to Pool Members in general meeting;

         2.4.9       Clauses 23.1, 23.2, 23.6 and 23.7 shall not apply;

         2.4.10      a Committee Member in his capacity as a member of the
                     Accreditation Authority shall be required to act
                     independently of the interests of his employer and of those
                     Pool Members whose interests he represents when acting as a
                     member of the Executive Committee. In particular, but
                     without prejudice to the generality of the foregoing:

                     (a)      a Committee Member shall not:

                              (i)       participate as a member of the
                                        Accreditation Authority in the
                                        consideration of whether his employer's
                                        Agency Systems should be Certified or
                                        whether his employer should be
                                        Accredited;

                              (ii)      be counted in ascertaining whether a
                                        quorum is present at a meeting of the
                                        Accreditation Authority convened to
                                        consider whether his employer's Agency
                                        Systems should be Certified or whether
                                        his employer should be Accredited; or

                              (iii)     be entitled to receive any working
                                        papers, opinions, reports or other
                                        documentation which have been prepared
                                        for the Accreditation Authority in
                                        connection with the Certification
                                        Process or Accreditation Process of his
                                        employer;

                     (b)      a Committee Member shall not disclose to his
                              employer confidential information which he has
                              received in his capacity as a member of the
                              Accreditation Authority unless:

                    (i)  required to do so by any Competent Authority or by law;
                         (ii) in  order  for his  employer  to  comply  with the
                         conditions  of any Licence  with which his  employer is
                         required to comply;

                    (iii)required to do so by any stock exchange or  regulatory
                         authority or the Panel on Take-overs and Mergers; or

                              (iv) pursuant to the arbitration rules of the
                                   Electricity Arbitration Association or
                                   pursuant to any judicial or other arbitral
                                   process or tribunal having jurisdiction in
                                   relation to him or his employer,

                              in any of which events the Committee Member shall
                              first be required to give written notice of the
                              required disclosure to the Accreditation
                              Authority; and

         2.4.11      references to a Committee Member shall for the purposes of
                     this Schedule include a reference to a Committee Member in
                     his capacity as a member of the Accreditation Authority.

2.5      Delegation:

         2.5.1       The Accreditation Authority shall have the right at any
                     time and from time to time to delegate or procure the
                     delegation of all or any part of the day-to-day
                     administration of the Accreditation Process to the
                     Accreditation Administrator. For the avoidance of doubt,
                     this shall not include the taking of any decision as to
                     whether the Agency Systems of an Applicant (or any of them)
                     should be Certified or the Applicant should be Accredited.

         2.5.2       The Accreditation Authority shall be responsible for every
                     act, breach, omission, neglect and failure of the
                     Accreditation Administrator.

                    2.6  Responsibilities owed to Pool Members alone: In acting
                         as the Accreditation Authority, the Executive Committee
                         shall have due regard to the  collective interests of
                         Pool Members. The responsibilities of the Accreditation
                         Authority under this Schedule are owed  exclusively to
                         Pool Members collectively, and to no other person. In
                         particular, but without prejudice to the generality of
                         the foregoing,  Suppliers shall be required to satisfy
                         themselves as to the financial condition and prospects
                         and  the  management  and  operational  ability of any
                         Accredited  person  and  shall not rely on the fact of
                         Accreditation  (or the lack of Accreditation)  as,  or
                         infer therefrom, any representation, warranty or other
                         statement   or   indication   on  the part of  the
                         Accreditation  Authority,  the  Accreditation
                         Administrator  or  the  Certification  Agent that  the
                         Accredited  person has any or any particular financial
                         condition  or  prospects  or  level  of  management or
                         operational ability.

                                   PART 3 : THE ACCREDITATION ADMINISTRATOR

3.1      Appointment and removal of Accreditation Administrator: The
         Accreditation Administrator shall be appointed and removed from time to
         time by the Accreditation Authority acting on behalf of all Pool
         Members. The Accreditation Authority shall have the right on behalf of
         all Pool Members to agree, amend and substitute the terms of engagement
         of the Accreditation Administrator.

3.2      Pool Members' authorisation: Pool Members hereby irrevocably and
         unconditionally authorise the Accreditation Authority to appoint and
         remove, and to agree, amend and substitute the terms of engagement of,
         the Accreditation Administrator on their behalf and undertake not to
         withdraw or change that authority.

3.3      Functions of Accreditation Administrator:

         3.3.1    The Accreditation Administrator shall perform such functions
                  associated with the day-to-day administration of the
                  Accreditation Process as are delegated to it from time to time
                  by the Accreditation Authority. A copy of any such delegated
                  functions will be made available by the Accreditation
                  Authority to Pool Members on request.

         3.3.2    The Accreditation Administrator shall keep confidential
                  information that it receives in its capacity as Accreditation
                  Administrator on terms agreed from time to time by it with the
                  Accreditation Authority.

                                       PART 4 : THE CERTIFICATION AGENT

4.1      Appointment and removal of Certification Agent: The Accreditation
         Authority shall, from time to time, appoint and remove a Certification
         Agent on behalf of all Pool Members. The first Certification Agent
         shall be Coopers & Lybrand. Subject to Clause 48.11, the Accreditation
         Authority shall have the right on behalf of all Pool Members to agree,
         amend and substitute the terms of engagement of the Certification
         Agent.

4.2      Pool Members' authorisation: Pool Members hereby irrevocably and
         unconditionally authorise the Accreditation Authority to appoint and
         remove, and to agree, amend and substitute the terms of engagement of,
         the Certification Agent on their behalf and undertake not to withdraw
         or change that authority.

4.3      Functions of Certification Agent:  The functions of the Certification
 Agent shall be:

         4.3.1    to prepare the self-assessment certification returns to be
                  completed by each Applicant and the supporting Pool
                  documentation (including guidance notes) to be used by the
                  Certification Agent in the Certification Process (together the
                  "Certification Documentation"), to submit the Certification
                  Documentation to the Accreditation Authority for approval and
                  to revise (and resubmit for approval) the Certification
                  Documentation in accordance with the instructions of the
                  Accreditation Authority from time to time;

         4.3.2    to carry out the Certification Process in accordance with
                  applicable English law, the terms set out in this Schedule and
                  Agreed Procedure 531 and the approved Certification
                  Documentation;

         4.3.3    to exercise the skill, care and diligence in the preparation
                  and revision of the Certification Documentation (recognising
                  that the Certification Agent is required to give effect to the
                  instructions of the Accreditation Authority under paragraph
                  4.3.1) and in the performance of the Certification Process
                  reasonably to be expected of a firm of accountants of
                  internationally recognised standing (or to such other standard
                  of skill, care and diligence as may be agreed by the
                  Accreditation Authority with the Certification Agent from time
                  to time); and

         4.3.4    in respect of each application for Certification, to deliver
                  an opinion of the Certification Agent addressed to the
                  Accreditation Authority (for itself and on behalf of all Pool
                  Members) as to whether the Applicant's Agency System has met
                  the Certification Requirements.

4.4      Responsibilities owed to Accreditation Authority: The responsibilities
         of the Certification Agent under this Schedule are owed exclusively to
         the Accreditation Authority for itself and Pool Members collectively
         and to no other person provided that the Pool Auditor shall be entitled
         to rely on all opinions of the Certification Agent delivered pursuant
         to paragraph 4.3.4.

4.5      Confidentiality undertaking: Before commencing the Certification
         Process with respect to the Agency Systems of any Applicant, the
         Certification Agent shall execute a confidentiality undertaking in
         favour of such Applicant in such form as may from time to time be
         agreed by the Accreditation Authority with the Certification Agent.

          PART 5 : THE CERTIFICATION PROCESS AND ACCREDITATION PROCESS

5.1      The Certification Process and Accreditation Process:

         5.1.1    The Certification Process and the Accreditation Process shall
                  be conducted in accordance with Agreed Procedure 531.

         5.1.2    Agreed Procedure 531 shall not conflict with the provisions of
                  this Schedule and, to the extent of any conflict or
                  inconsistency between the two, the provisions of this Schedule
                  shall prevail.

         5.1.3    The Accreditation Authority shall provide copies of the latest
                  version of this Schedule and Agreed Procedure 531 to
                  Applicants.

         5.1.4    The Accreditation Authority shall, subject to sub-section 6.2,
                  provide each Applicant with a copy of all opinions (whether
                  preliminary or final) of the Certification Agent in relation
                  to the Agency System(s) of that Applicant delivered pursuant
                  to paragraph 4.3.4 at the same time as the Accreditation
                  Authority notifies such Applicant whether its Agency System(s)
                  has (have) been Certified and/or (as the case may be) such
                  Applicant has been Accredited. The Accreditation Authority
                  shall be under no obligation to provide an Applicant with a
                  copy of any such opinion at any time before it gives such
                  notification.

5.2      No Certification: The Accreditation Authority shall not Certify the
         Agency System of any Applicant unless the Certification Agent has
         provided an opinion (not being a disclaimer of opinion, howsoever
         called) in the terms of paragraph 4.3.4 in relation to that Agency
         System.

5.3      Loss of Certified or Accredited status: The Accreditation Authority
         shall have the right at any time and from time to time in accordance
         with Agreed Procedure 531:

         5.3.1    to remove the Certification of all or any of the Agency
                  Systems of any person, whereupon such Agency System(s) shall
                  cease to be Certified; and/or

         5.3.2    to remove the Accreditation of any person, whereupon such
                  person shall cease to be Accredited.

5.4      Re-certification: Each person who has been Accredited shall be required
         to have some or all of its Agency Systems re-Certified in accordance
         with Agreed Procedure 531. If any such Agency System is not so
         re-Certified, such person's Accreditation shall automatically lapse.

5.5      Fees and expenses:

         5.5.1    The Accreditation Authority shall determine and publish to
                  Applicants and to those persons who have been Accredited a
                  Menu of Certification Fees which shall be charged directly to
                  Applicants for the purposes of Certification, and the
                  Accreditation Authority shall have the right to revise such
                  fees from time to time.

         5.5.2    Each Applicant shall pay its own costs and expenses incurred
                  in connection with the Certification Process and the
                  Accreditation Process.

5.6      Applicants bound by this Schedule: Applicants shall agree to be bound
         by the Certification Process, the Accreditation Process, the provisions
         of this Schedule and Agreed Procedure 531 by the execution of a letter
         agreement in form and content satisfactory to the Accreditation
         Authority.

5.7  Appeal procedure: If an Applicant is dissatisfied for any reason (including
     on the grounds that the Applicant disagrees with the final opinion of the
     Certification  Agent in relation to one or more of its Agency Systems) with
     the decision of the  Accreditation Authority as to whether such  Applicant
     shall be Accredited,  the sole and exclusive remedy of the Applicant shall
     be to refer the matter for determination to the Director in accordance with
     Agreed  Procedure  531. The determination  of the Director shall be final,
     conclusive and binding on the Applicant,  the  Accreditation Authority and
     all Pool Members.

5.8      Exclusion of other appeals:

         5.8.1    For the avoidance of doubt, neither Clause 83 nor Clause 84
                  shall apply in the case where an Applicant is dissatisfied for
                  any reason with the decision of the Accreditation Authority as
                  to whether such Applicant shall be Accredited. Sub-section 5.7
                  provides the sole and exclusive remedy of the Applicant.

         5.8.2    Save for any reference to the Director in accordance with
                  sub-section 5.7, in respect of any matter concerning the
                  Certification of any Agency Systems or the Accreditation of
                  any person or the Certification Process or the Accreditation
                  Process generally all reference or appeal procedures in this
                  Agreement to or involving the Director are expressly excluded.

                      PART 6 : APPLICANT'S RESPONSIBILITIES

6.1      Applicant's warranty and undertakings: Each Applicant represents,
         warrants and undertakes to each of the Pool Members (for itself and as
         trustee and agent for the Accreditation Authority, the Accreditation
         Administrator and the Certification Agent) that:

         6.1.1    all information supplied by or on behalf of the Applicant to
                  the Accreditation Authority, the Accreditation Administrator
                  or the Certification Agent in connection with the
                  Certification Process or the Accreditation Process is true,
                  complete and accurate and not misleading because of any
                  omission or ambiguity or for any other reason, subject to
                  disclosure, if any, acceptable to the Accreditation Authority
                  being made in advance of the provision of the relevant
                  information to the Accreditation Authority, the Accreditation
                  Administrator or (as the case may be) the Certification Agent;

         6.1.2            (a) completion of all documentation by or on behalf of
                          the Applicant in connection with the Certification
                          Process or the Accreditation Process is and will
                          remain the sole responsibility of the Applicant;

                  (b)     the Applicant will duly complete all such
                          documentation and provide all the information required
                          thereunder within the time periods prescribed by
                          Agreed Procedure 531; and

                  (c)     the Applicant has had the opportunity to take its own
                          legal and other professional advice regarding the
                          Certification Process and the Accreditation Process;

         6.1.3    it will confirm in writing to the Accreditation Authority (for
                  itself and on behalf of all Pool Members, Accreditation
                  Authority and the Certification Agent) in accordance with
                  Agreed Procedure 531 that each of the other representations,
                  warranties and undertakings in this sub-section 6.1 are true
                  and have been complied with as at the date on which it has
                  been notified that its application(s) for Certification and/or
                  Accreditation will be considered by the Accreditation
                  Authority; and

         6.1.4    the Applicant will co-operate fully with the Accreditation
                  Authority, the Accreditation Administrator and the
                  Certification Agent in the Certification Process and the
                  Accreditation Process and, without prejudice to the generality
                  of the foregoing, shall permit each of them reasonable access
                  to the Applicant's business records, working papers and
                  employees for the purposes of each such process upon not less
                  than three working days' advance notice.

6.2 No reliance by Applicant: The Applicant acknowledges and agrees that:

         6.2.1    it shall not, and shall not be entitled to, place any reliance
                  on any working papers, opinion, report or other documentation
                  prepared by or for (or any oral or written interpretation of,
                  or any oral or written advice given in relation to, any such
                  working papers, opinion, report or other documentation by) the
                  Accreditation Authority, the Accreditation Administrator or
                  the Certification Agent in connection with the Certification
                  Process or the Accreditation Process unless such working
                  papers, opinion, report or other documentation is expressly
                  addressed to such Applicant; and

         6.2.2    it shall keep confidential on the terms set out in Clause 70
                  any working papers, opinions, report or other documentation
                  referred to in paragraph 6.2.1 unless such working papers,
                  opinion, report or other documentation is expressly addressed
                  to such Applicant.

                                       PART 7 : LIMITATION OF LIABILITY

7.1      Limitation of liability: Each Applicant, each person who has (or whose
         Agency Systems have) been Certified or Accredited (or whose
         Certification or Accreditation has been removed) and each Pool Member
         (each an "Interested Person") agrees that:

         7.1.1    the total aggregate liability of the Accreditation Authority
                  and the Accreditation Administrator to any Interested Person
                  whether in contract, tort (including negligence or breach of
                  statutory duty) or otherwise arising directly or indirectly
                  for or in connection with the Certification Process or the
                  Accreditation Process (including the contents of any opinion
                  or report prepared by the Accreditation Authority or the
                  Accreditation Administrator) shall in no circumstances exceed
                  (pound)5,000,000;

         7.1.2    neither the Accreditation Authority nor the Accreditation
                  Administrator shall be liable to any Interested Person for any
                  loss of profit, loss of revenue, loss of contract, loss of
                  goodwill or any indirect or consequential loss arising from or
                  in connection with the Certification Process or the
                  Accreditation Process;

     7.1.3sub-sections  7.1 and 7.2  shall  not  exclude  the  liability of the
          Accreditation Authority or the Accreditation Administrator for fraud;

         7.1.4    the exclusions from and limitations of liability of the
                  Accreditation Authority and the Accreditation Administrator
                  under this section shall not apply to death or personal injury
                  caused by the negligence of the relevant one of the
                  Accreditation Authority or the Accreditation Administrator;

         7.1.5    the exclusions from and limitations of liability of the
                  Accreditation Authority and the Accreditation Administrator
                  under this Section 7 are reasonable because of (amongst other
                  matters) the likelihood that the amount of damages awardable
                  to the Interested Person from the Accreditation Authority or
                  the Accreditation Administrator would otherwise be
                  disproportionate to the charges which it makes in connection
                  with the Certification Process or the Accreditation Process
                  and because of the limited resources and expertise of the
                  Accreditation Authority and the Accreditation Administrator;

         7.1.6    the exclusions from and limitations of liability of the
                  Accreditation Authority and the Accreditation Administrator
                  under this Section 7 shall be considered severally and the
                  invalidity or unenforceability of any one sub-section shall
                  not affect the validity or enforceability of any other
                  sub-section; and

         7.1.7    the exclusions from and limitations of liability of the
                  Certification Agent are set out in the terms of its engagement
                  referred to in sub-section 4.1 and shall apply to this
                  Schedule as if the same were set out in full herein.
  PART 8 : DISAPPLICATION PROVISIONS

8.1      Disapplication:

         8.1.1    Parts III and V of this Agreement shall not apply in or to
                  this Schedule except, in the case of Part III, in respect of
                  any action under this Schedule which Pool Members in general
                  meeting are entitled or required by the terms of this Schedule
                  to take.

         8.1.2    If, and for long as, the Pool Auditor is also appointed as the
                  Certification Agent, the provisions of Clause 48.11 shall
                  apply.".



                                                  SIGNATORIES

THE GENERATORS

Anglian Power Generators Limited

     Address: Kings Lynn Power Station, Willows Business Park, Saddlebow, Kings
          Lynn,  Norfolk PE34 3RD  Facsimile  no: 01733  8e94164  Attention: W.
          Burrough

By:

Barking Power Limited

Address: Barking Power Station, Chequers Lane, Dagenham, Essex RM9 6PF
Facsimile no:     0181 984 5174
Attention:        M.D. Jones

By:

British Nuclear Fuels plc

Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no:     019467 27132
Attention:        P.L. O'Neill, Business Manager, Electricity Generation

By:

CeltPower Limited

Address: Plas Yn Dre Broad Street, Newtown, Powys SY16 2NA
Facsimile no:     01686 629887
Attention:        J. Matthew

By:

Citigen (London) Limited

Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no:     0171 253 9319
Attention:        S.P. Chandler

By:

Corby Power Limited

Address: Mitchell Road, Phoenix Parkway, Corby, Northamptonshire NN17 5QT
Facsimile no:     01536 402619
Attention:        General Manager

By:

Derwent Cogeneration Limited

Address: P.O. Box 489, Spondon, Derby DE21 7ZS
Facsimile no:     01332 669829
Attention:        J. Unwin

By:

Eastern Merchant Generation Limited

Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no:     01473 552941
Attention:        Coral Woodard

By:

Electricite de France, Service National

Address: EDF Production Transport, Department Relations avec l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384, Paris Cedex  
                                 08
Facsimile no:     (00 331) 40 42 63 41
Attention:        P. Gaillet

(copy to:  Associated Electricity Supplies Limited

Address: 53 St George's Road, Wimbledon, London SW19 4EA
Facsimile no:     0181 944 0750
Attention:        P. Clubb)

By:

Elm Energy & Recycling (UK) Limited

Address: Elm Energy House, Ettingshall Road, Wolverhampton, West
Midlands WV2 2LA
Facsimile no:     01902 408517
Attention:        M.D. Wyckoff

By:

Fellside Heat and Power Limited

Address: Fellside Lodge, Seascale, Cumbria CA20 1PG
Facsimile no:     01946 721130
Attention:        J.A. Bartlett

By:

Fibrogen Limited

Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no:     0171 221 8671
Attention:        R. Fraser

By:

Fibropower Limited

Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no:     0171 221 8671
Attention:        R. Fraser

By:

First Hydro Company

Address: Bala House, Lakeside Business Village, St. Davids Park, Deeside,
Flintshire CH5 3XJ
Facsimile no:     01244 520697
Attention:        B. Stalker

By:

Humber Power Limited

Address: South Humber Bank Power Station, South Marsh Road,
                  Stallingborough N.E. Lincs. DN37 8BZ
Facsimile no:     01469 573030
Attention:        P. Evans

By:

Independent Energy UK Limited

Address: St John's Court, 70 St John's Close, Knowle, Solihull, West Midlands 
B93 ONN
Facsimile no:     01564 770010
Attention:        J. Sulley

By:

Indian Queens Power Limited

Address: The Old Chapel Business Centre, Suite 7, Greenbottom, Truro TR4 8QP
Facsimile no:     01872 561050
Attention:        M. Miller

By:

Keadby Generation Limited

Address: c/o Scottish Hydro Electric, Inveralmond House, 200 Dunkeld Road,
Perth PH1 3AQ
Facsimile no:     01738 456227
Attention:        I. Morgan

By:

Lakeland Power Limited

Address: Roosecote Power Station, Roosecote Marsh, Barrow-in-Furness, Cumbria 
                           LA13
0PQ
Facsimile no:     01229 870919
Attention:        Jackie Mahon

By:

Magnox Electric plc

Address: Berkeley Centre, Berkeley, Gloucestershire  GL13 9PB
Facsimile no:     01453 810451
Attention:        Company Secretary

By:

Medway Power Limited

Address: Medway Power Station, Isle of Grain, Rochester, Kent ME3 0AG
Facsimile no:     01634 271666
Attention:        J. McLaren

By:

Midlands Power (UK) Limited

Address: Headquarters, Mucklow Hill, Halesowen, West Midlands
Facsimile no:     0121 423 0261
Attention:        Company Secretary

By:

National Power plc

Address: Windmill Hill Business Park, Whitehill Way, Swindon, Wiltshire
SN5 6PB
Facsimile no:     01793 892061
Attention:        M. Bowden

By:

Nuclear Electric Limited

Address: Barnett Way, Barnwood, Gloucester GL4 3RS
Facsimile no:     01452 653375
Attention:        Company Secretary

By:

Peterborough Power Limited

Address: Storeys Bar Road, Peterborough PE1 5NT
Facsimile no:     01553 667166
Attention:        W. Burrough

By:

PowerGen plc

Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no:     01203 425366
Attention:        S. Skillings

By:

Regional Power Generators Limited

Address: Glanford Brigg Generating Station, Scawby Brook, Brigg, North
 Lincolnshire DN20 9LT
Facsimile no:     01482 495916
Attention:        P. Knight

By:

Rocksavage Power Company Limited

Address: Cow Hay Lane, Runcorn, Cheshire WA7 4FZ
Facsimile no:     01928 565514
Attention:        B. Stewart

By:

Scottish Hydro-Electric plc

Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ
Facsimile no:     01738 456190
Attention:        R. Hackland

By:

Scottish Power plc

Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no:     0141 636 4706
Attention:        B.J.H. Paget

By:

Slough Energy Supplies Limited

Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no:     01753 790038
Attention:        P.N. Jackson

By:

Teesside Power Limited

Address: Four Millbank, London SW1P 3ET
Facsimile no:     0171 316 5322
Attention:        D. Lewis

By:

Winterton Power Limited

Address: 800 Park Avenue, Aztec West, Bristol BS12 4SE
Facsimile no:     01454 616675
Attention:        T. Masood

By:



THE SUPPLIERS

British Gas Trading Ltd

Address: 1st Floor, 31 The Causeway, Staines, Middlesex TW18 3BL
Facsimile no:     01784 413242
Attention:        T. Brookshaw

By:

British Nuclear Fuels plc

Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no:     019467 27132
Attention:        P.L. O'Neill, Business Manager, Electricity Generation

By:

Candecca Resources Limited

Address: Welton Gathering Centre, Barfield Lane, off Wragby Road, Sudbrooke,
Lincoln LN2 2QU
Facsimile no:     01522 754255
Attention:        D. Wood

By:

Citigen (London) Limited

Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no:     0171 253 9319
Attention:        S.P. Chandler

By:

Crosfield Limited

Address: Bank Quay, PO Box 26, Warrington, Cheshire WA5 1AB
Facsimile no:     01925 59828
Attention:        K. Sowley

By:

Eastern Electricity plc

Address: Wherstead Park, PO Box 40, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no:     01473 554393
Attention:        J. Whelan

By:

East Midlands Electricity plc

Address: Phoenix Centre Nuthall, Nottingham NG8 6AT
Facsimile no:     0115 995 5953
Attention:        A. Musto

By:

Electricite de France, Service National

Address: EDF Production Transport, Department Relations avec l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384, Paris,
Cedex 08
Facsimile no:     (010 331) 40 42 6341
Attention:        P. Gaillet

(copy to:  Associated Electricity Supplies Limited

Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no:     0181 944 0750
Attention:        P. Clubb)

By:

Energy Supply Contracts Limited

Address: The Havens, Ransomes Europark, Ipswich, Suffolk IP3 9SJ
Facsimile no:     01473 273871
Attention:        E.C. Cumberland

By:

Enron Capital and Trade Resources

Address: Four Millbank, London SW1P 3ET
Facsimile no:     0171 873 0140
Attention:        D. Gosling

By:

Impkemix Energy Limited

Address: PO Box 90, Wilton Centre, Middlesborough, Cleveland TS90 8JE
Facsimile no:     01642 437838
Attention:        K.J. Green

By:

Independent Energy UK Limited

Address: St. John's Court, St. John's Close, Knowle, West Midlands B93 0NN
Facsimile no:     01564 770010
Attention:        J. Sulley

By:

London Electricity plc

Address: Templar House, 81-87 High Holborn, London WC1V 6NU
Facsimile no:     0171 430 2903
Attention:        M. Holmes

By:

Magnox Electric plc

Address: Berkeley Centre, Berkeley, Gloucestershire  GL13 9PB
Facsimile no:     01453 810451
Attention:        Company Secretary

By:

Manweb plc

Address: Manweb House, Kingsfield Court, Chester Business Park,
                  Chester CH4 9QH
Facsimile no:     0141 568 3393
Attention:        P. Brown, Energy Supply, Cathcart Business Park, Spean
 Street, Glasgow
G44 4BE

By:

Midlands Electricity plc

Address: Mucklow Hill, Halesowen, West Midlands B62 8BP
Facsimile no:     0121 423 2777
Attention:        R. Murray

By:

National Power plc

Address: Windmill Hill Business Park, Whitehill Way, Swindon, Wiltshire SN5 6PB
Facsimile no:     01793 892061
Attention:        M. Bowden

By:

Norsk Hydro (UK) Limited

Address: Bridge House, 69 London Road, Twickenham, Middlesex TW1 3RH
Facsimile no:     0181 892 1686
Attention:        M. Turner

By:

Northern Electric plc

Address: Carliol House, Market Street, Newcastle upon Tyne NE1 6NE
Facsimile no:     0191 210 2295
Attention:        M. Chandler

By:

NORWEB plc

Address: Talbot Road, Manchester M16 0HQ
Facsimile no:     0161 875 7089
Attention:        K. Lee

By:

Nuclear Electric Limited

Address: Barnett Way, Barnwood, Gloucester GL4 3RS
Facsimile no:     01452 653375
Attention:        Company Secretary

By:

PowerGen plc

Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no:     01203 425366
Attention:        S. Skillings

By:

Scottish Hydro-Electric plc

Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ
Facsimile no:     01738 456190
Attention:        R. Hackland

By:

Scottish Power plc

Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no:     0141 636 4706
Attention:        B.J.H. Paget

By:

SEEBOARD plc

Address: PO Box 639, 329 Portland Road, Hove, East Sussex BN3 3SY
Facsimile no:     01273 428404
Attention:        R.A. Page

By:

Shell Power Limited

Address: Delta House, Wavell Road, Wythenshawe, Manchester M22 5SB
Facsimile no:     0161 499 8387
Attention:        John Tucker

By:

Slough Energy Supplies Limited

Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no:     01753 790038
Attention:        P.N. Jackson

By:

Southern Electric plc

Address: Westacott Way, Littlewick Green, Maidenhead, Berkshire SL6 3QB
Facsimile no:     01628 584469
Attention:        J. Sykes

By:

South Wales Electricity plc

Address: Newport Road, St. Mellons, Cardiff CF3 9XW
Facsimile no:     01222 790971
Attention:        M. Mackey

By:

South Western Electricity plc

Address: 800 Park Avenue, Aztec West, Almondsbury, Bristol BS12 4SE
Facsimile no:     01454 616675
Attention:        D.G. Harris

By:

The Renewable Energy Company Limited

Address: Stroud House, Russell Street, Stroud, Glos GL5 3AN
Facsimile no:     01453 756222
Attention:        M. Alder

By:

UK Electric Power Limited

Address: Overdale, Synchant Pass Road, Conwy, Gwynedd LL32 8RE
Facsimile no:     01492 592077
Attention:        N.Bryson

By:

UML Limited

Address: PO Box 115, Port Sunlight, Wirral, Merseyside L62 4ZL
Facsimile no:     0151 643 6299
Attention:        A.R. Stubbs

By:

Yorkshire Electricity Group plc

Address: Wetherby Road, Scarcroft, Leeds LS14 3HS
Facsimile no:     01132 895926
Attention:        Company Secretary

By:



THE OTHER PARTIES

Accord Energy Ltd

Address: Charter Court, 50 Windsor Road, Slough, Berkshire SL1 2HA
Facsimile no:     01753 758010
Attention:        E.F. Pethybridge

By:

AES Barry Limited

Address: Sully Moors Road, Sully, S. Glamorgan CF64 5YU
Facsimile no:     01446 722587
Attention:        P. Norgeot

By:

Alcan Aluminium UK Limited

Address: Lynemouth Power Station, Ashington, Northumberland NE63 9YH
Facsimile no:     01670 393970
Attention:        W.E. Jones

By:

BG plc

Address: 100 Thames Valley Park, Reading, Berkshire, RG6 1PT
Facsimile no:     0118 929 3651
Attention:        C. Alexander

By:

Cabah Energy Limited

Address: c/o ABB ForStar Developments Limited, Tilford House, Farnham Business 
Park, Weydon Lane, Farnham,
                  Surrey  GU9 8QT
Facsimile no:     01252 732110
Attention:        Paul Abbott

By:

Electricity Direct (UK) Limited

Address: 1 Livingstone Road, Hobe, Sussex  BN3 3RS
Facsimile no:     01273 701050
Attention:        G. Mackay

By:

Enfield Energy Centre Limited

Address: Cam Lea Offices, Mollison Avenue, Enfield EN3 7NN
Facsimile no:     01642 678123
Attention:        K. Clarke

By:

Fibrowatt Thetford Limited

Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no:     0171 221 8671
Attention:        Rupert Fraser

By:

Hydro Electric Energy Limited

Address: c/o Scottish Hydro Electric PLC, Inveralmond House, 200 Dunkeld Road,
Perth PH1 3AQ
Facsimile no:     01738 455281
Attention:        Company Secretary

By:

Keadby Power Limited

Address: P.O. Box 89, Keadby, Scunthorpe, North Lincolnshire DN17 3AZ
Facsimile no:     01724 784270
Attention:        Dr. C.K. Stanley

By:

Kingsnorth Power Limited

Address: c/o Budd Martin & Co, Industria House, Red Houses, St. Brelade, Jersey
JE3 8LD
Facsimile no:     01534 44777
Attention:        R. Martin

By:

Meter Operators Limited

Address: Ryden Lane, Charton, Nr. Pershore, Worscester WR10 3LQ
Facsimile no:     01386 861113
Attention:        R. Edmed

By:

Pentex (East Midlands) Limited

Address: Union Buildings, 15 Union Street, Aberdeen AB1 2BU
Facsimile no:     01244 211444
Attention:        H. Jamieson

By:

Seabank Power Limited

Address: Severn Road, Hallen, Bristol BS10 7SP
Facsimile no:     0117 982 0351
Attention:        J.P. Baldry, General Manager

By:

Spalding Energy Company Limited

Address: 20 St. James's Street, London SW1A 1ES
Facsimile no:     0171 839 0905
Attention:        G. Grant



THE METER OPERATOR PARTIES WHO ARE NOT PARTIES

Control Devices and Systems Limited

Address: P.O. Box 56, 101 Mill Lane, Newbury, Berkshire RG14 5RE
Telex no:         849811
Facsimile no:     01635 528224
Attention:        J.W. Dowse

By:

Datum Solutions Limited

Address: Littlebrook Business Centre, Littlebrook Manor Way, Dartford, Kent DA1
5PS
Facsimile no:     01322 295178
Attention:        G. Babbs

By:

DrakMarn O&M Ltd

Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no:     01203 425431
Contact: Company Secretary

By:

E. Squared Limited

Address: 52-54 Southwark Street, London SE1 1UN
Facsimile no:     0171 378 0012
Attention:        Graham Nicholls

By:

Northern Energy Services Limited

Address: 208 Askern Road, Bentley, Doncaster DN5 OEU
Facsimile no:     01302 820790
Attention:        W. Tuczemzkyi

By:

PowerMet Limited

Address: 13 Wimpole Street, London W1M 7AB
Facsimile no:     0171 493 7151
Attention:        M. Rugman

By:

Schlumberger Industries Limited

Address: Langer Road, Felixstowe, Suffolk IP11 8ER
Facsimile no:     01394 276030
Attention:        M. Jones, Marketing Manager

By:

Stanor National Contracts

Address: 71A Mafeking Avenue, Brentford, Middlesex TW8 0NL
Facsimile no:     0181 560 4651
Attention:        A. Yardley

By:

The Challenge Group

Address: 22 Tally Road, Oxted, Surrey  RH8 0TG
Facsimile no:     01883 730543
Attention:        J. Glover

By:



EXTERNAL POOL MEMBERS

British Nuclear Fuels plc

Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no:     019467 27132
Attention:        P.L. O'Neil, Business Manager, Electricity Generation

By:

Electricite de France, Service National

Address: EDF Production Transport, Departement Relations avec l'Etranger,
                  Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384
 Paris,
                  Cedex 08
Telex no:         280098 FRANCE
Facsimile no:     (00 331) 40 42 63 41
Attention:        P. Gaillet

(copy to:         Associated Electricity Supplies Limited

Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no:     0181 944 0750
Attention:        P. Clubb)

By:

Scottish Hydro-Electric plc

Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ
Facsimile no:     01738 456190
Attention:        R. Hackland

By:

Scottish Power plc

Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no:     0141 636 4706
Attention:        B.J.H. Paget

By:



SETTLEMENT SYSTEM ADMINISTRATOR

Energy Settlements and Information Services Limited

Address: Fairham House, Green Lane, Clifton, Nottingham NG11 9LN
Facsimile no:     0115 945 6728
Attention:        G.K. James, General Manager

By:



POOL FUNDS ADMINISTRATOR

Energy Pool Funds Administration Limited

Address: 3rd Floor, 185 Park Street, London SE1 9DY
Facsimile no:     01203 423558
Attention:        A. Marks, Director (National Grid House, 2nd Floor,
             Kirby Corner Road,
                  Coventry CV4 8JY)

By:



GRID OPERATOR

EXECUTED AS A DEED by              )
The National Grid                           )
Company plc by the                          )
affixing of its                             )
common seal in the                          )
presence of:-                               )



MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory



Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY
Telex no:         -
Facsimile no:     01203 423577
Attention:        Company Secretary (copy to:J. Irgin, c/o M.J. Metcalfe,
                  The National Grid Company plc, National Grid House, Kirby
 Corner
Road, Coventry CV4 8JY

ANCILLARY SERVICES PROVIDER

EXECUTED AS A DEED by     )
The National Grid                  )
Company plc by the        )
affixing of its                    )
common seal in the        )
presence of:-                      )



MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory

Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY
Facsimile no:     01203 423577
Attention:        Company Secretary (copy to Mr. Carlton)





<PAGE>


EXTERNALLY INTERCONNECTED PARTIES

Scottish Power plc

Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Telex No:         -
Facsimile No:     0141 636 4706
Attention:        B.J.H. Paget

By:

Electricite de France, Service National

Address: EDF Department Transport, Departement Relations avec l'Etranger,
 Echanges d'Energie, 2 Rue Louis
                  Murat, 5eme etage, 75384 Paris, Cedex 08
Telex no:         280098 FRANCE
Facsimile no:     (00 331) 40 42 63 41
Attention:        P. Gaillet

(copy to:         Associated Electricity Supplies Limited

Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Telex no:         -
Facsimile no:     0181 944 0750
Attention:        P. Clubb)

By:






<PAGE>







                                     DATED                          , 1997



                                                THE GENERATORS
                                                 named herein

                                                    - and -

                                                 THE SUPPLIERS
                                                 named herein

                                                    - and -

               ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
                                      as Settlement System Administrator

                                                    - and -

                                               ENERGY POOL FUNDS
                                            ADMINISTRATION LIMITED
                                          as Pool Funds Administrator

                                                    - and -

                                         THE NATIONAL GRID COMPANY plc
                               as Grid Operator and Ancillary Services Provider

                                                    - and -

                                              SCOTTISH POWER plc
                                                      and
                                    ELECTRICITE DE FRANCE, SERVICE NATIONAL
                                                 as Externally
                                            Interconnected Parties

                                                    - and -

                                               THE OTHER PARTIES
                                                 named herein

                                                     - and -

                                          THE METER OPERATOR PARTIES
                                                 named herein

                                    ---------------------------------------

                                          TWENTIETH SUPPLEMENTAL DEED
                               relating to the Pooling and Settlement Agreement
                                         for the Electricity Industry
                                             in England and Wales
                                    ---------------------------------------



<PAGE>




                                                       2



                          





                                                   CONTENTS

                                                                  Page

1.       INTERPRETATION                                               2

2.       AMENDMENTS                                                   2

3.       CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT         2

4.       MISCELLANEOUS                                                2

5.       ENTIRE AGREEMENT                                             2

6.       GOVERNING LAW                                                3

SCHEDULE 1:       Part I: The Generators                              4

                  Part II: The Suppliers                              8

SCHEDULE 2:       The Other Parties                                   12

SCHEDULE 3:       The Meter Operator Parties who are not Parties      14

SCHEDULE 4:       Amendments to the Pooling and Settlement Agreement  15

SIGNATORIES                                                           31





<PAGE>


THIS SUPPLEMENTAL DEED is made on                   , 1998

BETWEEN:-

(1)      THE PERSONS whose names, registered numbers and registered or principal
         offices are set out in Part I of Schedule 1;

(2)      THE PERSONS whose names, registered numbers and registered or principal
         offices are set out in Part II of Schedule 1;

(3)      ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED (registered number
         2444282) whose registered office is situate at Fairham House, Green
         Lane, Clifton, Nottingham NG11 9LN as Settlement System Administrator;

(4)      ENERGY POOL FUNDS ADMINISTRATION LIMITED (registered number 2444187)
         whose registered office is situate at 185 Park Street, London SE1 9DY
         as Pool Funds Administrator;

(5)      THE NATIONAL GRID COMPANY plc (registered number 2366977) whose
         registered office is situate at National Grid House, Kirby Corner Road,
         Coventry CV4 8JY as Grid Operator and Ancillary Services Provider;

(6)      SCOTTISH POWER plc (registered number 117120) whose principal office 
is situate at 1 Atlantic Quay,
         Glasgow G2 8SP, Scotland as an Externally Interconnected Party;

(7)      ELECTRICITE DE FRANCE, SERVICE NATIONAL whose principal office is
        situate at Departement Relations avec l'Etranger, Echanges d'Energie, 2
         Rue Louis Murat, 5eme etage, 75384 Paris, Cedex 08, France as an
         Externally Interconnected Party;

(8)      THE OTHER PARTIES whose names, registered numbers and registered or
         principal offices are set out in Schedule 2; and

(9)      THE METER OPERATOR PARTIES whose names, registered numbers and
         registered or principal offices are set out in Schedule 3.

WHEREAS:-

(A)      by a Pooling and Settlement Agreement for the Electricity Industry in
         England and Wales dated 30th March, 1990 (the "Pooling and Settlement
         Agreement") the parties thereto agreed to give effect to and be bound
         by certain rules and procedures for the operation of an electricity
         trading pool and the operation of a settlement system;

(B)      the Pooling and Settlement Agreement has been amended and/or restated
         by twenty supplemental agreements, and hereinafter references to the
         Pooling and Settlement Agreement are to that agreement as most recently
         amended and restated; and

(C)      the parties to this Deed (being (i) all the Parties at the date hereof
         and (ii) all the Meter Operator Parties at the date hereof) have agreed
         to amend the Pooling and Settlement Agreement on the terms and subject
         to the conditions set out below.

NOW THIS DEED WITNESSES as follows:-



<PAGE>




INTERPRETATION

Except   where defined herein or where the context otherwise requires, words and
         expressions defined in the Pooling and Settlement Agreement shall have
         the same respective meanings when used in this Deed.

29.2 The table of contents and the headings to each of the Clauses are inserted
for convenience only and shall be ignored in construing this Deed.
AMENDMENTS

         The parties hereby agree that with effect on and from midnight on
                                           , 1998 the Pooling and Settlement
         Agreement shall be amended as set  out in Schedule 4.

CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT

         The Pooling and Settlement Agreement shall remain in full force and
         effect and this Deed and the Pooling and Settlement Agreement shall be
         treated as one document so that, upon the Pooling and Settlement
         Agreement being amended pursuant to Clause 2, all references to the
         Pooling and Settlement Agreement shall be treated as references to that
         agreement as amended by this Deed.

MISCELLANEOUS

         The provisions of Clauses 75 to 79 (inclusive) and 81 to 84 (inclusive)
         of the Pooling and Settlement Agreement shall be deemed to be
         incorporated herein mutatis mutandis.

ENTIRE AGREEMENT

Each     party acknowledges that in entering into this Deed on the terms set out
         herein it is not relying upon any representation, warranty, promise or
         assurance made or given by any other party or any other person, whether
         or not in writing, at any time prior to the execution of this Deed
         which is not expressly set out herein.

     33.2 None of the parties shall have any right of action against any other
          party  arising  out of  or in  connection  with  any  representation,
          warranty,  promise or assurance referred to in sub-clause 5.1 (except
          in the case of fraud). GOVERNING LAW

         This Deed shall be governed by, and construed in all respects in
accordance with, English law.

IN WITNESS whereof this document has been duly executed and delivered as a deed
the day and year first above written









<PAGE>


                                                  SCHEDULE 1:
                                            Part I: The Generators

Name                                   Registered   Registered or
                                       Number       Principal Office
AES Barry Limited                      3135522      AES Barry Power Station
                                                    Sully Moors Road
                                                    Sully
                                                    Vale of Glamorgan
                                                    CF64 5YU
Anglian Power Generators Limited       2488955      Wherstead Park
                                                    Wherstead
                                                    Ipswich
                                                    Suffolk
                                                    IP9 2AQ
Barking Power Limited                  2354681      Devonshire House
                                                    Mayfair House
                                                    London W1X 5FH
British Nuclear Fuels plc              1002607      Risley
                                                    Warrington
                                                    Cheshire
                                                    WA3 6AS
Celtpower Limited                      2656561      13 Charles II Street
                                                    London
                                                    SW1Y 4QT
Citigen (London) Limited               2427823      100 Thames Valley
                                                    Park Drive
                                                    Reading
                                                    Berkshire
                                                    RG6 1PT
Corby Power Limited                    2329494      Mitchell Road
                                                    Phoenix Parkway
                                                    Corby
                                                    Northamptonshire
                                                    NN17 5QT
Derwent Cogeneration Limited           2703635      Landsdowne House
                                                    Berkeley Square
                                                    London W1X 5DH
Eastern Merchant Generation Limited    3116225      Wherstead Park
                                                    Wherstead
                                                    Ipswich
                                                    Suffolk
                                                    IP9 2AQ
Electricite de France, Service         -            Department Relations avec
National                                            I'Etranger
                                                    Echanges d'Energie
                                                    2 Rue Louis Murat
                                                    5eme etage
                                                    75384 Paris
                                                    Cedex 08
                                                    France
Elm Energy & Recycling (UK) Limited  2516685  Elm Energy House Ettingshall Road
                                                    Wolverhampton
                                                    West Midlands WV2 2LA
Fellside Heat and Power Limited        2614535      Fellside Lodge
                                                    Seascale
                                                    Cumbria CA20 1PG
Fibrogen Limited                       2547498      Astley House
                                                    33 Notting Hill Gate
                                                    London W11 3JQ
Fibropower Limited                     2234141      Astley House
                                                    33 Notting Hill Gate
                                                    London W11 3JQ
Fibrothetford Limited                  3057688      Astley House
                                                    33 Notting Hill Gate
                                                    London W11 3JQ
First Hydro Company                    2444277      Bala House
                                                    Lakeside Business Village
                                                    St. David's Park
                                                    Deeside
                                                    Flintshire
                                                    CH5 3XJ
Humber Power Limited                   2571241      18 Savile Row
                                                    London
                                                    W1X 1AE
Indian Queens Power Company Limited    2928100      1 Northumberland Avenue
                                                    London
                                                    WC2N 5BW
Independent Energy UK Limited          3033406      2nd Floor, Park House
                                                    Park Street
                                                    Maidenhead
                                                    Berkshire
                                                    SL6 1SL
Keadby Generation Limited              2729513      P O Box 89, Keadby
                                                 Scunthorpe, North Lincolnshire
                                                    DN17 3AZ
Lakeland Power Limited                 2355290      Roosecote Power Station
                                                    Roosecote Marsh
                                                    Barrow-in-Furness
                                                    Cumbria LA13 OPQ
Magnox Electric plc                    2264251      Berkeley Centre
                                                    Berkeley
                                                    Gloucestershire  GL13 9PB
Medway Power Limited                   2537903      Boston House
                                                    The Little Green
                                                    Richmond TW9 1QE
Midlands Power (UK) Limited            2251099      Mucklow Hill
                                                    Halesowen
                                                    West Midlands B62 8BP
National Power plc                     2366963      Windmill Hill Business Park
                                                    Whitehill Way
                                                    Swindon
                                                    Wiltshire
                                                    SN5 6PB
Nuclear Electric Limited               3076445      Barnett Way
                                                    Barnwood
                                                    Gloucester
                                                    GL4 3RS
Peterborough Power Limited             2353599      Storeys Bar Road
                                                    Peterborough PE1 5NT
PowerGen plc                           2366970      53 New Broad Street
                                                    London EC2M 1JJ
Regional Power Generators Limited      2352390      Wetherby Road
                                                    Scarcroft,
                                                    Leeds LS14 3HS
Rocksavage Power Company Limited       18868        20 St. James's Street
                                                    London SW10 4UJ
Scottish Hydro-Electric plc            117119       10 Dunkeld Road
                                                    Perth PH1 5WA
Scottish Power plc                     117120       1 Atlantic Quay
                                                    Glasgow G2 8SP
Seabank Power Limited                  2591188      Severn Road  Hallen
                                                    Bristol BS10 7SP
Slough Energy Supplies Limited         2474514      234 Bath Road
                                                    Slough SL1 4EE
Teesside Power Limited                 2464040      4 Millbank
                                                    London SW1P 3ET
Winterton Power Limited                3001798      800 Park Avenue
                                                    Aztec West
                                                    Almondsbury
                                                    Bristol  BS12 4SE


                                            Part II: The Suppliers

Name                                   Registered    Registered or
                                       Number        Principal Office
British Gas Trading Ltd                3078711       Charter Court
                                                     50 Windsor Road
                                                     Slough
                                                     Berkshire SL1 2HA
British Nuclear Fuels plc              1002607       Risley
                                                     Warrington
                                                     Cheshire WA3 6AS
Candecca Resources Limited             953066        Welton Gathering Centre
                                                     Barfield Lane
                                                     Off Wragby Road
                                                     Sudbrooke
                                                     Lincoln LN2 2QU
Citigen (London) Limited               2427823       100 Thames Valley
                                                     Park Drive
                                                     Reading
                                                     Berkshire
                                                     RG6 1PT
Crosfield Limited                      48745         Bank Quay
                                                     PO Box 26
                                                     Warrington
                                                     Cheshire WA5 1AB
Eastern Electricity plc                2366906       Wherstead Park
                                                     PO Box 40
                                                     Wherstead
                                                     Ipswich
                                                     Suffolk IP9 2AQ
East Midlands Electricity plc          2366923       PO Box 444
                                                     Woodyard Lane
                                                     Wollaton
                                                     Nottingham  NG8 1EZ
Electricite de France, Service         -             Department Relations avec
National                                             l'Etranger
                                                     Echanges d'Energie
                                                     2 Rue Louis Murat
                                                     5eme etage
                                                     75384 Paris
                                                     Cedex 08
Electricity Direct (UK) Limited        3174056       1 Livingstone Road
                                                     Hove
                                                     East Sussex
                                                     BN3 3WP
Energy Supply Contracts Limited        172268        The Havens
                                                     Ransomes Europark
                                                     Ipswich
                                                     Suffolk IP3 9SJ
Enron Gas and Petrochemicals Trading   3003823       4 Millbank
Limited                                              London SW1P 3ET
Impkemix Energy Limited                2076043       The Heath
                                                     Runcorn
                                                     Cheshire WA7 4QF
Independent Energy UK Limited          3033406       2nd Floor Park House
                                                     Park Street  Maidenhead
                                                     Berkshire SL6 1SL
London Electricity plc                 2366852       Templar House
                                                     81-87 High Holborn
                                                     London WC1V 6NU
Magnox Electric plc                    2264251       Berkeley Centre
                                                     Berkeley
                                                     Gloucestershire GL13 9PB
Manweb plc                             2366937       Manweb House
                                                     Chester Business Park
                                                     Chester CH4 9RF
Midlands Electricity plc               2366928       Mucklow Hill
                                                     Halesowen
                                                     West Midlands B62 8BP
National Power plc                     2366963       Windmill Hill Business Park
                                                     Whitehill Way
                                                     Swindon
                                                     Wiltshire
                                                     SN5 6PB
Norsk Hydro (UK) Limited               841421        Bridge House
                                                     69 London Road
                                                     Twickenham
                                                     Middlesex TW1 3RH
Northern Electric plc                  2366942       Carliol House
                                                     Market Street
                                                     Newcastle upon Tyne NE1 6NE
NORWEB plc                             2366949       PO Box 14
                                                     410 Birchwood Boulevard
                                                     Birchwood
                                                     Warrington WA3 7GA
Nuclear Electric Limited               3076445       Barnett Way
                                                     Barnwood
                                                     Gloucester
                                                     GL4 3RS
PowerGen plc                           2366970       53 New Broad Street
                                                     London EC2M 1JJ
Scottish Hydro-Electric plc            117119        10 Dunkeld Road
                                                     Perth PH1 5WA
Scottish Power plc                     117120        1 Atlantic Quay
                                                     Glasgow G2 8SP
SEEBOARD plc                           2366867       Forest Gate
                                                     Brighton Road
                                                     Crawley
                                                     West Sussex RH11 9BH
Shell Power Limited                    2559630       Rowlands Way
                                                     Withenshawe
                                                     Manchester M22 5SB
Slough Energy Supplies Limited         2474514       234 Bath Road
                                                     Slough  SL1 4EE
Southern Electric plc                  2366879       Westacott Way
                                                     Littlewick Green
                                                     Maidenhead
                                                     Berkshire SL6 3QB
South Wales Electricity plc            2366985       Newport Road
                                                     St. Mellons
                                                     Cardiff CF3 9XW
South Western Electricity plc          2366894       800 Park Avenue
                                                     Aztec West
                                                     Almondsbury
                                                     Bristol BS12 4SE
The Renewable Energy Company Limited   3043412       Stroud House
                                                     Russell Street
                                                     Stroud
                                                     Gloucestershire
                                                     GL5 3AN
UK Electric Power Limited              2844010       21 St. Thomas Street
                                                     Bristol BS1 6US
UML Limited                            661900        PO Box 115
                                                     Port Sunlight
                                                     Wirral
                                                     Merseyside
                                                     L62 4ZL
Yorkshire Electricity Group plc        2366995       Wetherby Road
                                                     Scarcroft
                                                     Leeds LS14 3HS




<PAGE>


                                                  SCHEDULE 2:
                                               The Other Parties

Name                                      Registered     Registered or
                                          Number         Principal Office
Accord Energy Limited                     2877398        Rivermill House
                                                         152 Grosvenor Road
                                                         London SW1V 3JL
AES Partington Limited                    3210149         Burleigh House
                                                          17-19 Worple Way
                                                          Richmond
                                                          Surrey
                                                          TW10 6AG
Alcan Aluminium UK Limited                750143         Chalfont Park
                                                         Gerrards Cross
                                                         Buckinghamshire
                                                         SL9 0QB
BP Chemicals Limited                      194971         Baglan Bay Works
                                                         Port Talbot
                                                         West Glamorgan
                                                         SA12 7BP
BG plc                                    2006000        100 Thames Valley
                                                         Park Drive
                                                         Reading
                                                         Berkshire RG6 1PT
Cabah Energy Limited                      2759706        190 Strand
                                                         London WC2R 1JN
Cottam Development Centre Limited         3273552        c/o PowerGen plc
                                                         Westwood Way
                                                         Westwood Business Park
                                                         Coventry CV4 8LG
Enfield Energy Centre Limited             2796628        Concorde House
                                                         Concorde Way
                                                         Stockton on Tees
                                                         Cleveland
                                                         TS18 3RB
Hydro Electric Energy Limited             2487475        Royex House
                                                         Aldermanbury Square
                                                         London EC2V 7LD
Keadby Power Limited                      2548042        PO Box 89
                                                         Keadby
                                                         Scunthorpe
                                                         North Lincolnshire
                                                         DN17 3AZ
Kingsnorth Power Limited                  2656343        Chancery House
                                                         53-64 Chancery Lane
                                                         London WC2A 1QU
Meter Operators Limited                   2841018        Lynton House
                                                         7-12 Tavistock Square
                                                         London WC1H 9BQ
Pentex (East Midlands) Limited            2275006        Union Buildings
                                                         15 Union Street
                                                         Aberdeen AB1 2BU
Saltend Cogeneration Company Limited      3274929        Britannic House
                                                         1 Finsbury Circus
                                                         London EC2M 7BA
Spalding Energy Company Limited           19668          20 St. James's Street
                                                         London SW1A 1ES




<PAGE>


                                                  SCHEDULE 3:
                                The Meter Operator Parties who are not Parties

Name                                   Registered     Registered or
                                       Number         Principal Office
Control Devices and Systems Limited    1242585        PO Box 56
                                                      101 Mill Lane
                                                      Newbury
                                                      Berkshire
                                                      RG14 5RE
Datum Solutions Limited                2815238        185 Park Street
                                                      London
                                                      SE1 9DY
DrakMarn O&M Ltd                       3124701        53 New Broad Street
                                                      London  EC2M 1JJ
E. Squared Limited                     2674129        Almac House
                                                      Church Lane
                                                      Bisley
                                                      Surrey
                                                      GU24 9DR
Northern Energy Services Limited       2868141        5 Derwent Place
                                                      Spotborough
                                                      Doncaster
                                                      DN5 7PN
PowerMet Limited                       2877912        3 Park Place
                                                      London SW1A 1LP
Schlumberger Industries Limited        534821         1 Kingsway
                                                      London WC2B 6XH
Stanor National Contracts Limited      2769170        7-12 Tavistock Square
                                                      London WC1H 9BQ
The Challenge Group                    -              22 Tally Road
                                                      Oxted
                                                      Surrey  RH8 0TG




<PAGE>


                                                      18





<PAGE>


                                                  SCHEDULE 4:
               Amendments to the Pooling and Settlement Agreement

The Pooling and Settlement Agreement shall be amended:

(i)      by:

         (a)      the deletion of "and" in Clause 6.2.1(b);

         (b)      the addition of "and" after the semi-colon in Clause 6.2.1
(c); and

         (c)      the insertion of the following new Clause 6.2.1(d):

                  "(d)    sub-section 5.7 of Schedule 25;"; and

(ii)     by the deletion of existing Schedule 25 and by the insertion in its
 place of the following new
         Schedule 25:

                                                 "SCHEDULE 25

                                                 Accreditation

                                            PART 1 : INTERPRETATION

Definitions:  In this Schedule, unless the context otherwise requires:

         "1998 Programme" has the meaning given to that term in Schedule 22;

         "Accreditation" means, subject to sub-section 5.7, written confirmation
         by the Accreditation Authority that an Applicant has, in the opinion of
         the Accreditation Authority, satisfied the relevant Accreditation
         Requirements, and "Accredited" shall be construed accordingly;

         "Accreditation Administrator" means the person (if any) for the time
         being and from time to time appointed pursuant to Part 3 as the
         Accreditation Administrator for the purposes of this Schedule;

         "Accreditation Authority" means the person for the time being and from
         time to time appointed pursuant to Part 2 as the Accreditation
         Authority for the purposes of this Schedule;

         "Accreditation Process" means the process set out in this Schedule and
         Agreed Procedure 531 whereby an Applicant is assessed to determine
         whether it satisfies the Accreditation Requirements;

         "Accreditation Requirements" means, in relation to an Applicant, the
         requirements which that Applicant is required to satisfy in order to
         perform the specific function or functions for which it is applying to
         be Accredited (being one or more of the functions associated with the
         categories referred to in paragraphs (a) to (k) (inclusive) of
         sub-section 2.3), as determined for the time being and from time to
         time by Pool Members in general meeting;

         "Agency System" means, in relation to an Applicant, the particular
         systems and procedures of that Applicant (or for which that Applicant
         is responsible) relevant to the specific function for which it is
         applying to be Accredited;

         "Applicant" means a person who falls within one or more of the
         categories referred to in paragraphs (a) to (k) (inclusive) of
         sub-section 2.3 and who, in accordance with this Schedule, applies for
         one or more of its Agency Systems to be Certified and/or for itself to
         be Accredited and, where the context so admits, shall include a person
         applying for re-Certification of any of its Agency Systems in
         accordance with this Schedule;

         "Certification" means written confirmation by the Accreditation
         Authority that a particular Agency System of an Applicant has, in the
         opinion of the Accreditation Authority, satisfied the Certification
         Requirements and, where the context so admits, shall include
         re-Certification of Agency Systems, and "Certify" and "Certified" shall
         be construed accordingly;

         "Certification Agent" means the person for the time being and from time
         to time appointed pursuant to Part 4 as the Certification Agent for the
         purposes of this Schedule;

         "Certification Documentation" has the meaning given to that term in
 paragraph 4.3.1;

          "Certification Process" means the process set out in this Schedule and
         Agreed Procedure 531 whereby a particular Agency System of an Applicant
         is assessed to determine whether it satisfies the Certification
         Requirements;

         "Certification Requirements" means, in relation to any of the Agency
         Systems of an Applicant, the requirements which such Agency System is
         required to satisfy in order to perform the specific function or
         functions for which the Applicant is applying to have such Agency
         System Certified (being one or more of the functions associated with
         the categories referred to in paragraphs (a) to (k) (inclusive) of
         sub-section 2.3), as determined for the time being and from time to
         time by Pool Members in general meeting;

         "Dissatisfied Applicant" has the meaning given to that term in
 paragraph 5.7.1;

         "Interested Person" has the meaning given to that term in section 7;

         "Menu of Certification Fees" means the scale of fees to be charged to
         Applicants in connection with the Certification Process, as set out in
         Agreed Procedure 531; and

         "Pool" has the meaning given to that term in Schedule 22.

Interpretation:  In this Schedule, except where the context otherwise requires:

         1.2.1    references to any Agency System of an Applicant include any
                  Agency System for which that Applicant is responsible; and

         1.2.2    references to a particular Part, Section, sub-section or
                  paragraph or to any Annex shall be a reference to that Part,
                  Section, sub-section or paragraph of, or Annex to, this
                  Schedule.

                                     PART 2 : THE ACCREDITATION AUTHORITY

Appointment, removal and indemnification of Accreditation Authority:

         2.1.1       The Executive Committee shall act as, and shall perform the
                     functions of, the Accreditation Authority pursuant to
                     Clause 24.2.31 (and Pool Members shall procure that the
                     Executive Committee so acts and performs) until such time
                     as Pool Members in general meeting otherwise resolve.

         2.1.2       Pool Members in general meeting shall have the right to
                     appoint and remove the Accreditation Authority from time to
                     time and (subject to sub-section 2.4) to agree, amend and
                     substitute the terms of engagement of the Accreditation
                     Authority.

         2.1.3       Unless otherwise determined by Pool Members in general
                     meeting, the costs, fees, expenses, liabilities and losses
                     of, and all other amounts incurred or paid by, the
                     Accreditation Authority shall be dealt with in accordance
                     with the PFA Accounting Procedure.

         2.1.4       In addition and without prejudice to paragraph 2.1.3, all
                     Pool Members shall jointly and severally indemnify and keep
                     indemnified:

                     (a)    the Executive Committee and each of the Committee
                            Members from and against any and all costs
                            (including legal costs), charges, expenses, damages
                            or liabilities incurred or suffered by it or him in
                            acting as, and in performing the functions of, the
                            Accreditation Authority or (as the case may be) a
                            member of the Accreditation Authority; and

                     (b)    any sub-committee or sub-group of the Executive
                            Committee which provides advice to the Accreditation
                            Authority or the Accreditation Administrator or
                            undertakes work at the request of the Accreditation
                            Authority in connection with the Accreditation
                            Process and/or the Certification Process and each
                            member thereof from and against any and all costs
                            (including legal costs), charges, expenses, damages
                            or liabilities incurred or suffered by it or him in
                            providing such advice or (as the case may be)
                            undertaking such work,

                     and, as between the Pool Members, according to their
                     respective Contributory Shares at the time of receipt of
                     the request for indemnification. The Pool Members shall,
                     upon request, provide the members of the Accreditation
                     Authority and the members of any such sub-committee or
                     sub-group with a written deed of indemnity to that effect.

Accreditation Authority's functions: The functions of the Accreditation
         Authority shall be confined to the operational requirements of Pool
         Members collectively in their capacity as such and (subject as
         aforesaid) shall be as set out in this Schedule and Agreed Procedure
         531 and shall include such powers and authorities as may be necessary
         or incidental to the performance of such functions.

35.3 Categories of Applicant: On the terms and subject to the conditions of this
Schedule, the Accreditation Authority shall be responsible for the Certification
of each of the Agency Systems of, and the Accreditation of, Applicants falling
within the following categories:
         (a)      PES registration service providers;

         (b)      non half hourly data collectors;

         (c)      non half hourly data aggregators;

         (d)      non half hourly meter operators;

         (e)      half hourly data collectors;

         (f)      half hourly data aggregators;

         (g)      half hourly meter operators;

         (h)      teleswitch operators;

         (i)      meter administrators;

         (j)      data transfer service providers; and

         (k)      such other categories of person, if any, as the Executive
                  Committee, with the prior written consent of the Director, may
                  determine.

ExecutiveCommittee as Accreditation Authority: The provisions of Clauses 15.13,
         16.9, 17.4, 18, 19, 20.4 and 22 to 24 (inclusive) shall apply in
         relation to the Executive Committee, the Committee Members, the Pool
         Chairman, the Chief Executive, the personnel referred to in Clause
         17.2.1 and the Secretary when the Executive Committee is acting as, and
         performing the functions of, the Accreditation Authority provided that:

         2.4.1       notice of meetings of the Accreditation Authority need be
                     given only to the Committee Members, the Pool Chairman, the
                     Chief Executive (if any), the Pool Auditor, the
                     Certification Agent and the Accreditation Administrator
                     and, insofar as concerns the Certification of the Agency
                     System of an Applicant or the Accreditation of an
                     Applicant, that Applicant. Clause 18.1.2 shall be modified
                     accordingly;

         2.4.2       if any Committee Member or the Certification Agent or the
                     Accreditation Administrator wishes to advise additional
                     matters which he or it wishes to be considered at a meeting
                     of the Accreditation Authority he or it shall give notice
                     to all other persons entitled to attend that meeting no
                     later than three working days before the date of the
                     meeting (or such lesser period as the Accreditation
                     Authority may from time to time determine).
                     Clause 18.1.4 shall be modified accordingly;

         2.4.3       minutes of meetings of the Accreditation Authority shall be
                     confidential and copies shall be required to be provided
                     only to those persons who were entitled to attend the
                     relevant meeting and, insofar as concerns the Certification
                     of the Agency System of an Applicant or the Accreditation
                     of an Applicant, that Applicant. Clause 18.1.6 shall be
                     modified accordingly;

         2.4.4       each of the Pool Chairman, the Chief Executive, the Pool
                     Auditor, the Certification Agent and the Accreditation
                     Administrator (or its or his respective duly appointed
                     representative) shall have the right to attend and speak
                     (but not to vote) at meetings of the Accreditation
                     Authority. The Chief Executive (or his duly appointed
                     representative) shall be obliged so to attend. With the
                     exception of the final sentence of Clause 19.4, that Clause
                     shall not apply;

         2.4.5       save for Clause 20.4, Clause 20 shall not apply;

         2.4.6       any question or matter arising at a meeting of the
                     Accreditation Authority shall be decided by a 75 per cent.
                     majority of the votes cast at the meeting by Committee
                     Members entitled to vote in accordance with Section 2.4.10.
                     On any such question or matter each Committee Member shall
                     be entitled to one vote. Clause 22.2 shall not apply;

         2.4.7       a decision duly made at a meeting of the Accreditation
                     Authority shall (unless otherwise determined by the
                     Accreditation Authority or otherwise provided by the terms
                     of the decision) have immediate effect. Clause 22.4 shall
                     not apply;

         2.4.8       Clauses 22.3 and 22.5 to 22.11 (inclusive) shall not apply:
                     in particular, but without prejudice to the generality of
                     the foregoing, no decision of the Accreditation Authority
                     shall be referred to Pool Members in general meeting;

         2.4.9       Clauses 23.1, 23.2, 23.3.4, 23.6 and 23.7 shall not apply;

         2.4.10      a Committee Member in his capacity as a member of the
                     Accreditation Authority shall be required to act
                     independently of the interests of his employer and of those
                     Pool Members whose interests he represents when acting as a
                     member of the Executive Committee. In particular, but
                     without prejudice to the generality of the foregoing:

                     (a)      a Committee Member shall not:

                              (i)       participate as a member of the
                                        Accreditation Authority in the
                                        consideration of whether his employer's
                                        Agency Systems should be Certified or
                                        whether his employer should be
                                        Accredited;

                              (ii)      be counted in ascertaining whether a
                                        quorum is present at a meeting of the
                                        Accreditation Authority convened to
                                        consider whether his employer's Agency
                                        Systems should be Certified or whether
                                        his employer should be Accredited; or

                              (iii)     be entitled to receive any working
                                        papers, opinions, reports or other
                                        documentation which have been prepared
                                        for the Accreditation Authority in
                                        connection with the Certification
                                        Process or Accreditation Process of his
                                        employer;

                     (b)      a Committee Member shall not disclose to his
                              employer confidential information which he has
                              received in his capacity as a member of the
                              Accreditation Authority unless:

                              (i)  required to do so by any Competent Authority
or by law;

                              (ii) in order for his employer to comply with the
                                   conditions of any Licence with which his
                                   employer is required to comply;

                              (iii)required to do so by any stock exchange or
                                   regulatory authority or the Panel on
                                   Take-overs and Mergers; or

                              (iv) pursuant to the arbitration rules of the
                                   Electricity Arbitration Association or
                                   pursuant to any judicial or other arbitral
                                   process or tribunal having jurisdiction in
                                   relation to him or his employer,

                              in any of which events the Committee Member shall
                              first be required to give written notice of the
                              required disclosure to the Accreditation
                              Authority; and

         2.4.11      references to a Committee Member shall for the purposes of
                     this Schedule include a reference to a Committee Member in
                     his capacity as a member of the Accreditation Authority.

2.5      Delegation:

         2.5.1       The Accreditation Authority shall have the right at any
                     time and from time to time to delegate or procure the
                     delegation of all or any part of the day-to-day
                     administration of the Accreditation Process to the
                     Accreditation Administrator. For the avoidance of doubt,
                     this shall not include the taking of any decision as to
                     whether the Agency Systems of an Applicant (or any of them)
                     should be Certified or the Applicant should be Accredited.

         2.5.2       The Accreditation Authority shall be responsible for every
                     act, breach, omission, neglect and failure of the
                     Accreditation Administrator.

     2.6  Responsibilities  owed to  Pool  Members  alone:  In  acting  as the
          Accreditation Authority, the Executive Committee shall have due regard
          to the collective interests of Pool Members. The responsibilities of
          the  Accreditation Authority under this Schedule are owed exclusively
          to Pool Members collectively,  and to no other person. In particular,
          but without  prejudice to the generality of the  foregoing, Suppliers
          shall be required to satisfy themselves as to the financial condition
          and  prospects  and the  management  and  operational  ability of any
          Accredited person and shall not rely on the fact of Accreditation (or
          the lack of Accreditation) as, or infer therefrom, any representation,
          warranty  or other  statement  or  indication  on  the  part of  the
          Accreditation Authority,  the  Accreditation   Administrator or  the
          Certification Agent  that  the  Accredited  person  has  any  or any
          particular financial condition or prospects or level of management or
          operational ability.

                                   PART 3 : THE ACCREDITATION ADMINISTRATOR

Appointment and removal of Accreditation Administrator: The Accreditation
         Administrator shall be appointed and removed from time to time by the
         Accreditation Authority acting on behalf of all Pool Members. The
         Accreditation Authority shall have the right on behalf of all Pool
         Members to agree, amend and substitute the terms of engagement of the
         Accreditation Administrator.

36.2 Pool Members' authorisation: Pool Members hereby irrevocably and
unconditionally authorise the Accreditation Authority to appoint and remove, and
to agree, amend and substitute the terms of engagement of, the Accreditation
Administrator on their behalf and undertake not to withdraw or change that
authority. 36.3 Functions of Accreditation Administrator:
         3.3.1    The Accreditation Administrator shall perform such functions
                  associated with the day-to-day administration of the
                  Accreditation Process as are delegated to it from time to time
                  by the Accreditation Authority. A copy of any such delegated
                  functions will be made available by the Accreditation
                  Authority to Pool Members on request.

         3.3.2    The Accreditation Administrator shall keep confidential
                  information that it receives in its capacity as Accreditation
                  Administrator on terms agreed from time to time by it with the
                  Accreditation Authority.

                                       PART 4 : THE CERTIFICATION AGENT

Appointment and removal of Certification Agent: The Accreditation Authority
         shall, from time to time, appoint and remove a Certification Agent on
         behalf of all Pool Members. The first Certification Agent shall be
         Coopers & Lybrand. Subject to Clause 48.11, the Accreditation Authority
         shall have the right on behalf of all Pool Members to agree, amend and
         substitute the terms of engagement of the Certification Agent.

37.2 Pool Members' authorisation: Pool Members hereby irrevocably and
unconditionally authorise the Accreditation Authority to appoint and remove, and
to agree, amend and substitute the terms of engagement of, the Certification
Agent on their behalf and undertake not to withdraw or change that authority.
37.3 Functions of Certification Agent: The functions of the Certification Agent
shall be:
         4.3.1    to prepare the self-assessment certification returns to be
                  completed by each Applicant and the supporting Pool
                  documentation (including guidance notes) to be used by the
                  Certification Agent in the Certification Process (together the
                  "Certification Documentation"), to submit the Certification
                  Documentation to the Accreditation Authority for approval and
                  to revise (and resubmit for approval) the Certification
                  Documentation in accordance with the instructions of the
                  Accreditation Authority from time to time;

         4.3.2    to carry out the Certification Process in accordance with
                  applicable English law, the terms set out in this Schedule and
                  Agreed Procedure 531 and the approved Certification
                  Documentation;

         4.3.3    to exercise the skill, care and diligence in the preparation
                  and revision of the Certification Documentation (recognising
                  that the Certification Agent is required to give effect to the
                  instructions of the Accreditation Authority under paragraph
                  4.3.1) and in the performance of the Certification Process
                  reasonably to be expected of a firm of accountants of
                  internationally recognised standing (or to such other standard
                  of skill, care and diligence as may be agreed by the
                  Accreditation Authority with the Certification Agent from time
                  to time); and

         4.3.4    in respect of each application for Certification, to deliver
                  an opinion of the Certification Agent addressed to the
                  Accreditation Authority (for itself and on behalf of all Pool
                  Members) as to whether the Applicant's Agency System has met
                  the Certification Requirements.

Responsibilities owed to Accreditation Authority: The responsibilities of the
         Certification Agent under this Schedule are owed exclusively to the
         Accreditation Authority for itself and Pool Members collectively and to
         no other person provided that the Pool Auditor shall be entitled to
         rely on all opinions of the Certification Agent delivered pursuant to
         paragraph 4.3.4.

37.5 Confidentiality undertaking: Before commencing the Certification Process
with respect to the Agency Systems of any Applicant, the Certification Agent
shall execute a confidentiality undertaking in favour of such Applicant in such
form as may from time to time be agreed by the Accreditation Authority with the
Certification Agent.
          PART 5 : THE CERTIFICATION PROCESS AND ACCREDITATION PROCESS

The Certification Process and Accreditation Process:

         5.1.1    The Certification Process and the Accreditation Process shall
                  be conducted in accordance with Agreed Procedure 531.

         5.1.2    Notwithstanding paragraph 5.1.1, in reaching its decision as
                  to whether the Agency Systems of an Applicant (or any of them)
                  should be certified or an Applicant should be Accredited, the
                  Accreditation Authority shall be required to give effect to
                  any instruction given to it by Pool Members in general meeting
                  (whether of general application to the Certification Process
                  or the Accreditation Process or specific to one or more Agency
                  Systems or Applicants) and to any determination made by Pool
                  Members in general meeting with respect to the Accreditation
                  Requirements or the Certification Requirements.

         5.1.3    Agreed Procedure 531 shall not conflict with the provisions of
                  this Schedule and, to the extent of any conflict or
                  inconsistency between the two, the provisions of this Schedule
                  shall prevail.

         5.1.4    The Accreditation Authority shall provide copies of the latest
                  version of this Schedule and Agreed Procedure 531 to
                  Applicants.

         5.1.5    The Accreditation Authority shall, subject to sub-section 6.2,
                  provide each Applicant with a copy of all opinions of the
                  Certification Agent in relation to the Agency System(s) of
                  that Applicant delivered pursuant to paragraph 4.3.4 at the
                  same time as the Accreditation Authority notifies such
                  Applicant whether its Agency System(s) has (have) been
                  Certified and/or (as the case may be) such Applicant has been
                  Accredited. The Accreditation Authority shall be under no
                  obligation to provide an Applicant with a copy of any such
                  opinion at any time before it gives such notification.

         5.1.6    The Accreditation Authority shall make available to the
                  Director all information held by the Accreditation Authority
                  which the Director reasonably requires for the purposes of
                  making any determination pursuant to sub-section 5.7.

No       Certification: The Accreditation Authority shall not Certify the Agency
         System of any Applicant unless the Certification Agent has provided an
         opinion (not being a disclaimer of opinion, howsoever called) in the
         terms of paragraph 4.3.4 in relation to that Agency System.

38.3 Loss of Certified or Accredited status: The Accreditation Authority shall
have the right at any time and from time to time in accordance with Agreed
Procedure 531:
         5.3.1    to remove the Certification of all or any of the Agency
                  Systems of any person, whereupon such Agency System(s) shall
                  cease to be Certified; and/or

         5.3.2    to remove the Accreditation of any person, whereupon such
                  person shall cease to be Accredited.

Re-certification: Each person who has been Accredited shall be required to have
         some or all of its Agency Systems re-Certified in accordance with
         Agreed Procedure 531. If any such Agency System is not so re-Certified,
         such person's Accreditation shall automatically lapse.

38.5   Fees and expenses:
         5.5.1    The Accreditation Authority shall determine and publish to
                  Applicants and to those persons who have been Accredited a
                  Menu of Certification Fees which shall be charged directly to
                  Applicants for the purposes of Certification, and the
                  Accreditation Authority shall have the right to revise such
                  fees from time to time.

         5.5.2    Each Applicant shall pay its own costs and expenses incurred
                  in connection with the Certification Process and the
                  Accreditation Process.

Applicants bound by this Schedule: Applicants shall agree to be bound by the
         Certification Process, the Accreditation Process, the provisions of
         this Schedule and Agreed Procedure 531 by the execution of a letter
         agreement in form and content satisfactory to the Accreditation
         Authority.

38.7   Referral to the Director:
         5.7.1    The sole and exclusive remedy of an Applicant who is
                  dissatisfied with the decision of the Accreditation Authority
                  to refuse to Accredit such Applicant (the "Dissatisfied
                  Applicant") shall be to refer the matter to the Director in
                  accordance with this sub-section 5.7 for determination.

         5.7.2 To be a valid referral pursuant to paragraph 5.7.1, the
Dissatisfied Applicant must:

                  (a)     refer the matter for determination to the Director in
                          writing (with a copy to the Accreditation Authority)
                          no later than 14 days after receipt by the
                          Dissatisfied Applicant of the decision of the
                          Accreditation Authority refusing to Accredit it; and

                  (b)     set out in its referral to the Director (with reasons
                          in support) the ground or grounds on which the
                          Dissatisfied Applicant is making its application to
                          the Director which shall be one or more of the
                          following (and no other):

                          (i)      that the Accreditation Authority has not
                                   followed the procedures set out in this
                                   Schedule and Agreed Procedure 531 in
                                   considering whether the Dissatisfied
                                   Applicant should be Accredited; or

                          (ii)     that the Accreditation Authority has given
                                   undue weight to particular evidence submitted
                                   or to the lack of particular evidence in
                                   connection with the Dissatisfied Applicant's
                                   application for Accreditation; or

                          (iii)    that the Accreditation Authority has
                                   misinterpreted all or some of the evidence
                                   submitted in connection with such
                                   application; or

                          (iv)     that, notwithstanding any restrictions that
                                   Pool Members may place on the Accreditation
                                   Authority as to how it is to assess and
                                   decide Applications, the Accreditation
                                   Authority should not have taken into account
                                   the failure by the Dissatisfied Applicant to
                                   satisfy one or more specified Accreditation
                                   Requirements.

         5.7.3    On a valid referral pursuant to paragraph 5.7.1 the Director
                  may either determine the matter himself or, if he thinks fit,
                  refer the matter for determination by an arbitrator appointed
                  by him and, subject to paragraph 5.7.4, the practice and
                  procedure to be followed in connection with any such
                  determination shall be such as the Director may consider
                  appropriate.

         5.7.4    In connection with any referral pursuant to paragraph 5.7.1
                  which the Director determines himself, the Director shall
                  have:

               (a)  the right to engage an  independent  consultant selected by
                    the Director  and to take  and rely on the  advice  of such
                    independent consultant; and

                  (b)     the discretion to make a determination that the
                          Dissatisfied Applicant should be Accredited
                          notwithstanding that the ground on which the
                          Dissatisfied Applicant has applied to the Director is
                          either the wrong ground or has not been proven.

         5.7.5    The determination of the Director or, as the case may be, the
                  arbitrator pursuant to paragraph 5.7.3 shall be final,
                  conclusive and binding on the Dissatisfied Applicant, the
                  Accreditation Authority and all Pool Members and may include a
                  provision as to the payment in respect of the costs and
                  expenses incurred by the person making the determination. The
                  Dissatisfied Applicant, the Accreditation Authority and all
                  Pool Members shall promptly give effect to any such
                  determination.

         5.7.6    For the avoidance of doubt, neither Clause 83 nor Clause 84
                  shall apply in the case where an Applicant is dissatisfied
                  with the decision of the Accreditation Authority to refuse to
                  Accredit such Applicant. This sub-section 5.7 provides the
                  sole and exclusive remedy of a Dissatisfied Applicant. Parties
                  and Applicants shall not use, or seek to use, those Clauses or
                  any other provisions of this Agreement to thwart or challenge
                  referrals to the Director pursuant to paragraph 5.7.1.

Exclusionof other appeals: Save for any reference to the Director in accordance
         with sub-section 5.7, in respect of any matter concerning the
         Certification of any particular Agency Systems or the Accreditation of
         any person all reference or appeal procedures in this Agreement to or
         involving the Director are expressly excluded.

                                     PART 6 : APPLICANT'S RESPONSIBILITIES

Applicant's warranty and undertakings: Each Applicant represents, warrants and
         undertakes to each of the Pool Members (for itself and as trustee and
         agent for the Accreditation Authority, the Accreditation Administrator
         and the Certification Agent) that:

         6.1.1    all information supplied by or on behalf of the Applicant to
                  the Accreditation Authority, the Accreditation Administrator
                  or the Certification Agent in connection with the
                  Certification Process or the Accreditation Process is true,
                  complete and accurate and not misleading because of any
                  omission or ambiguity or for any other reason, subject to
                  disclosure, if any, acceptable to the Accreditation Authority
                  being made in advance of the provision of the relevant
                  information to the Accreditation Authority, the Accreditation
                  Administrator or (as the case may be) the Certification Agent;

         6.1.2            (a) completion of all documentation by or on behalf of
                          the Applicant in connection with the Certification
                          Process or the Accreditation Process is and will
                          remain the sole responsibility of the Applicant;

                  (b)     the Applicant will duly complete all such
                          documentation and provide all the information required
                          thereunder within the time periods prescribed by
                          Agreed Procedure 531; and

                  (c)     the Applicant has had the opportunity to take its own
                          legal and other professional advice regarding the
                          Certification Process and the Accreditation Process;

         6.1.3    it will confirm in writing to the Accreditation Authority (for
                  itself and on behalf of all Pool Members, Accreditation
                  Authority and the Certification Agent) in accordance with
                  Agreed Procedure 531 that each of the other representations,
                  warranties and undertakings in this sub-section 6.1 are true
                  and have been complied with as at the date on which it has
                  been notified that its application(s) for Certification and/or
                  Accreditation will be considered by the Accreditation
                  Authority; and

         6.1.4    the Applicant will co-operate fully with the Accreditation
                  Authority, the Accreditation Administrator and the
                  Certification Agent in the Certification Process and the
                  Accreditation Process and, without prejudice to the generality
                  of the foregoing, shall permit each of them reasonable access
                  to the Applicant's business records, working papers and
                  employees for the purposes of each such process upon not less
                  than three working days' advance notice.

No reliance by Applicant: The Applicant acknowledges and agrees that:

         6.2.1    it shall not, and shall not be entitled to, place any reliance
                  on any working papers, opinion, report or other documentation
                  prepared by or for (or any oral or written interpretation of,
                  or any oral or written advice given in relation to, any such
                  working papers, opinion, report or other documentation by) the
                  Accreditation Authority, the Accreditation Administrator or
                  the Certification Agent in connection with the Certification
                  Process or the Accreditation Process unless such working
                  papers, opinion, report or other documentation is expressly
                  addressed to such Applicant; and

         6.2.2    it shall keep confidential on the terms set out in Clause 70
                  any working papers, opinions, report or other documentation
                  referred to in paragraph 6.2.1 unless such working papers,
                  opinion, report or other documentation is expressly addressed
                  to such Applicant.

                                       PART 7 : LIMITATION OF LIABILITY

         Limitation of liability: Each Applicant, each person who has (or whose
         Agency Systems have) been Certified or Accredited (or whose
         Certification or Accreditation has been removed) and each Pool Member
         (each an "Interested Person") agrees that:

         7.1      the total aggregate liability of the Accreditation Authority
                  and the Accreditation Administrator to any Interested Person
                  whether in contract, tort (including negligence or breach of
                  statutory duty) or otherwise arising directly or indirectly
                  for or in connection with the Certification Process or the
                  Accreditation Process (including the contents of any opinion
                  or report prepared by the Accreditation Authority or the
                  Accreditation Administrator) shall in no circumstances exceed
                  (pound)5,000,000;

         7.2      neither the Accreditation Authority nor the Accreditation
                  Administrator shall be liable to any Interested Person for any
                  loss of profit, loss of revenue, loss of contract, loss of
                  goodwill or any indirect or consequential loss arising from or
                  in connection with the Certification Process or the
                  Accreditation Process;

         7.3      sub-sections 7.1 and 7.2 shall not exclude the liability of
 the Accreditation Authority or
                  the Accreditation Administrator for fraud;

         7.4      the exclusions from and limitations of liability of the
                  Accreditation Authority and the Accreditation Administrator
                  under this section shall not apply to death or personal injury
                  caused by the negligence of the relevant one of the
                  Accreditation Authority or the Accreditation Administrator;

               7.5  the  exclusions from and  limitations  of  liability of the
                    Accreditation Authority and the Accreditation Administrator
                    under this  Section 7 are  reasonable  because of (amongst
                    other  matters)  the  likelihood that the amount of damages
                    awardable to the  Interested Person from the Accreditation
                    Authority or the Accreditation Administrator would otherwise
                    be  disproportionate  to  the  charges  which  it makes in
                    connection   with   the   Certification   Process or   the
                    Accreditation  Process and because of the limited resources
                    and  expertise  of  the  Accreditation   Authority and  the
                    Accreditation Administrator;

         7.6      the exclusions from and limitations of liability of the
                  Accreditation Authority and the Accreditation Administrator
                  under this Section 7 shall be considered severally and the
                  invalidity or unenforceability of any one sub-section shall
                  not affect the validity or enforceability of any other
                  sub-section; and

         7.7      the exclusions from and limitations of liability of the
                  Certification Agent are set out in the terms of its engagement
                  referred to in sub-section 4.1 and shall apply to this
                  Schedule as if the same were set out in full herein.

                                      PART 8 : DISAPPLICATION PROVISIONS

         Disapplication:

         8.1      Parts III and V of this Agreement shall not apply in or to
                  this Schedule except, in the case of Part III, in respect of
                  any action under this Schedule which Pool Members in general
                  meeting are entitled or required by the terms of this Schedule
                  to take.

         8.2      If, and for long as, the Pool Auditor is also appointed as the
                  Certification Agent, the provisions of Clause 48.11 shall
                  apply.".



<PAGE>


                                                  SIGNATORIES

THE GENERATORS

AES Barry Limited

Address: AES Barry Power Station, Sully Moors Road, Sully, Vale of Glamorgan,
 CF64 5YU
Facsimile no:     01222 531714
Attention:        Scott Miller

By:

Anglian Power Generators Limited

Address: Kings Lynn Power Station, Willows Business Park, Saddlebow, Kings
 Lynn, Norfolk PE34 3RD
Facsimile no:     01733 894164
Attention:        W. Burrough

By:

Barking Power Limited

Address: Barking Power Station, Chequers Lane, Dagenham, Essex RM9 6PF
Facsimile no:     0181 984 5174
Attention:        M.D. Jones

By:

British Nuclear Fuels plc

Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no:     019467 27132
Attention:        P.L. O'Neill, Business Manager, Electricity Generation

By:

CeltPower Limited

Address: Plas Yn Dre Broad Street, Newtown, Powys SY16 2NA
Facsimile no:     01686 629887
Attention:        J. Matthew

By:

Citigen (London) Limited

Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no:     0171 253 9319
Attention:        S.P. Chandler

By:

Corby Power Limited

Address: Mitchell Road, Phoenix Parkway, Corby, Northamptonshire NN17 5QT
Facsimile no:     01536 402619
Attention:        General Manager

By:

Derwent Cogeneration Limited

Address: P.O. Box 489, Spondon, Derby DE21 7ZS
Facsimile no:     01332 669829
Attention:        J. Unwin

By:

Eastern Merchant Generation Limited

Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no:     01473 552941
Attention:        Coral Woodard

By:

Electricite de France, Service National

Address: EDF Production Transport, Department Relations avec l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384, Paris Cedex 
                                   08
Facsimile no:     (00 331) 40 42 63 41
Attention:        P. Gaillet

(copy to:  Associated Electricity Supplies Limited

Address: 53 St George's Road, Wimbledon, London SW19 4EA
Facsimile no:     0181 944 0750
Attention:        P. Clubb)

By:

Elm Energy & Recycling (UK) Limited

Address: Elm Energy House, Ettingshall Road, Wolverhampton, West
Midlands WV2 2LA
Facsimile no:     01902 408517
Attention:        M.D. Wyckoff

By:

Fellside Heat and Power Limited

Address: Fellside Lodge, Seascale, Cumbria CA20 1PG
Facsimile no:     01946 721130
Attention:        J.A. Bartlett

By:

Fibrogen Limited

Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no:     0171 221 8671
Attention:        R. Fraser

By:

Fibropower Limited

Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no:     0171 221 8671
Attention:        R. Fraser

By:

Fibrothetford Limited

Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no:     0171 221 8671
Attention:        Rupert Fraser

By:

First Hydro Company

Address: Bala House, Lakeside Business Village, St. Davids Park, Deeside,
Flintshire CH5 3XJ
Facsimile no:     01244 520697
Attention:        B. Stalker

By:

Humber Power Limited

Address: South Humber Bank Power Station, South Marsh Road,
                  Stallingborough N.E. Lincs. DN37 8BZ
Facsimile no:     01469 573030
Attention:        P. Evans

By:

Independent Energy UK Limited

Address: St John's Court, 70 St John's Close, Knowle, Solihull, West Midlands
 B93 ONN
Facsimile no:     01564 770010
Attention:        J. Sulley

By:

Indian Queens Power Limited

Address: The Old Chapel Business Centre, Suite 7, Greenbottom, Truro TR4 8QP
Facsimile no:     01872 561050
Attention:        M. Miller

By:

Keadby Generation Limited

Address: c/o Scottish Hydro Electric, Inveralmond House, 200 Dunkeld Road,
Perth PH1 3AQ
Facsimile no:     01738 456227
Attention:        I. Morgan

By:

Lakeland Power Limited

Address: Roosecote Power Station, Roosecote Marsh, Barrow-in-Furness, Cumbria 
                           LA13
0PQ
Facsimile no:     01229 870919
Attention:        Jackie Mahon

By:

Magnox Electric plc

Address: Berkeley Centre, Berkeley, Gloucestershire  GL13 9PB
Facsimile no:     01453 810451
Attention:        Company Secretary

By:

Medway Power Limited

Address: Medway Power Station, Isle of Grain, Rochester, Kent ME3 0AG
Facsimile no:     01634 271666
Attention:        J. McLaren

By:

Midlands Power (UK) Limited

Address: Headquarters, Mucklow Hill, Halesowen, West Midlands
Facsimile no:     0121 423 0261
Attention:        Company Secretary

By:

National Power plc

Address: Windmill Hill Business Park, Whitehill Way, Swindon, Wiltshire
SN5 6PB
Facsimile no:     01793 892061
Attention:        M. Bowden

By:

Nuclear Electric Limited

Address: Barnett Way, Barnwood, Gloucester GL4 3RS
Facsimile no:     01452 653375
Attention:        Company Secretary

By:

Peterborough Power Limited

Address: Storeys Bar Road, Peterborough PE1 5NT
Facsimile no:     01553 667166
Attention:        W. Burrough

By:

PowerGen plc

Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no:     01203 425366
Attention:        S. Skillings

By:

Regional Power Generators Limited

Address: Glanford Brigg Generating Station, Scawby Brook, Brigg, North
 Lincolnshire DN20 9LT
Facsimile no:     01482 495916
Attention:        P. Knight

By:

Rocksavage Power Company Limited

Address: Cow Hay Lane, Runcorn, Cheshire WA7 4FZ
Facsimile no:     01928 565514
Attention:        B. Stewart

By:

Scottish Hydro-Electric plc

Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ
Facsimile no:     01738 456190
Attention:        R. Hackland

By:

Scottish Power plc

Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no:     0141 636 4706
Attention:        B.J.H. Paget

By:

Seabank Power Limited

Address: Severn Road, Hallen, Bristol BS10 7SP
Facsimile no:     0117 982 0351
Attention:        J.P. Baldry, General Manager

By:

Slough Energy Supplies Limited

Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no:     01753 790038
Attention:        P.N. Jackson

By:

Teesside Power Limited

Address: Four Millbank, London SW1P 3ET
Facsimile no:     0171 316 5322
Attention:        D. Lewis

By:

Winterton Power Limited

Address: 800 Park Avenue, Aztec West, Bristol BS12 4SE
Facsimile no:     01454 616675
Attention:        T. Masood

By:



THE SUPPLIERS

British Gas Trading Ltd

Address: 1st Floor, 31 The Causeway, Staines, Middlesex TW18 3BL
Facsimile no:     01784 413242
Attention:        T. Brookshaw

By:

British Nuclear Fuels plc

Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no:     019467 27132
Attention:        P.L. O'Neill, Business Manager, Electricity Generation

By:

Candecca Resources Limited

Address: Welton Gathering Centre, Barfield Lane, off Wragby Road, Sudbrooke,
Lincoln LN2 2QU
Facsimile no:     01522 754255
Attention:        D. Wood

By:

Citigen (London) Limited

Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no:     0171 253 9319
Attention:        S.P. Chandler

By:

Crosfield Limited

Address: Bank Quay, PO Box 26, Warrington, Cheshire WA5 1AB
Facsimile no:     01925 59828
Attention:        K. Sowley

By:

Eastern Electricity plc

Address: Wherstead Park, PO Box 40, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no:     01473 554393
Attention:        J. Whelan

By:

East Midlands Electricity plc

Address: Phoenix Centre Nuthall, Nottingham NG8 6AT
Facsimile no:     0115 995 5953
Attention:        A. Musto

By:

Electricite de France, Service National

Address: EDF Production Transport, Department Relations avec l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384, Paris,
Cedex 08
Facsimile no:     (010 331) 40 42 6341
Attention:        P. Gaillet

(copy to:  Associated Electricity Supplies Limited

Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no:     0181 944 0750
Attention:        P. Clubb)

By:

Electricity Direct (UK) Limited

Address: 1 Livingstone Road, Hove, East Sussex BN3 3WP
Facsimile no:     01273 233002/3
Attention:        Glenn Mackay

By:

Energy Supply Contracts Limited

Address: The Havens, Ransomes Europark, Ipswich, Suffolk IP3 9SJ
Facsimile no:     01473 273871
Attention:        E.C. Cumberland

By:

Enron Gas and Petrochemicals Trading Limited

Address: Four Millbank, London SW1P 3ET
Facsimile no:     0171 873 0140
Attention:        D. Gosling

By:

Impkemix Energy Limited

Address: PO Box 90, Wilton Centre, Middlesborough, Cleveland TS90 8JE
Facsimile no:     01642 437838
Attention:        K.J. Green

By:

Independent Energy UK Limited

Address: St. John's Court, St. John's Close, Knowle, West Midlands B93 0NN
Facsimile no:     01564 770010
Attention:        J. Sulley

By:

London Electricity plc

Address: Templar House, 81-87 High Holborn, London WC1V 6NU
Facsimile no:     0171 430 2903
Attention:        M. Holmes

By:

Magnox Electric plc

Address: Berkeley Centre, Berkeley, Gloucestershire  GL13 9PB
Facsimile no:     01453 810451
Attention:        Company Secretary

By:

Manweb plc

Address: Manweb House, Kingsfield Court, Chester Business Park,
                  Chester CH4 9QH
Facsimile no:     0141 568 3393
Attention:        P. Brown, Energy Supply, Cathcart Business Park, Spean
 Street, Glasgow
G44 4BE

By:

Midlands Electricity plc

Address: Mucklow Hill, Halesowen, West Midlands B62 8BP
Facsimile no:     0121 423 2777
Attention:        R. Murray

By:

National Power plc

Address: Windmill Hill Business Park, Whitehill Way, Swindon, Wiltshire SN5 6PB
Facsimile no:     01793 892061
Attention:        M. Bowden

By:

Norsk Hydro (UK) Limited

Address: Bridge House, 69 London Road, Twickenham, Middlesex TW1 3RH
Facsimile no:     0181 892 1686
Attention:        M. Turner

By:

Northern Electric plc

Address: Carliol House, Market Street, Newcastle upon Tyne NE1 6NE
Facsimile no:     0191 210 2295
Attention:        M. Chandler

By:

NORWEB plc

Address: Talbot Road, Manchester M16 0HQ
Facsimile no:     0161 875 7089
Attention:        K. Lee

By:

Nuclear Electric Limited

Address: Barnett Way, Barnwood, Gloucester GL4 3RS
Facsimile no:     01452 653375
Attention:        Company Secretary

By:

PowerGen plc

Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no:     01203 425366
Attention:        S. Skillings

By:

Scottish Hydro-Electric plc

Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ
Facsimile no:     01738 456190
Attention:        R. Hackland

By:

Scottish Power plc

Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no:     0141 636 4706
Attention:        B.J.H. Paget

By:

SEEBOARD plc

Address: PO Box 639, 329 Portland Road, Hove, East Sussex BN3 3SY
Facsimile no:     01273 428404
Attention:        R.A. Page

By:

Shell Power Limited

Address: Delta House, Wavell Road, Wythenshawe, Manchester M22 5SB
Facsimile no:     0161 499 8387
Attention:        John Tucker

By:

Slough Energy Supplies Limited

Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no:     01753 790038
Attention:        P.N. Jackson

By:

Southern Electric plc

Address: Westacott Way, Littlewick Green, Maidenhead, Berkshire SL6 3QB
Facsimile no:     01628 584469
Attention:        J. Sykes

By:

South Wales Electricity plc

Address: Newport Road, St. Mellons, Cardiff CF3 9XW
Facsimile no:     01222 790971
Attention:        M. Mackey

By:

South Western Electricity plc

Address: 800 Park Avenue, Aztec West, Almondsbury, Bristol BS12 4SE
Facsimile no:     01454 616675
Attention:        D.G. Harris

By:

The Renewable Energy Company Limited

Address: Stroud House, Russell Street, Stroud, Glos GL5 3AN
Facsimile no:     01453 756222
Attention:        M. Alder

By:

UK Electric Power Limited

Address: Overdale, Synchant Pass Road, Conwy, Gwynedd LL32 8RE
Facsimile no:     01492 592077
Attention:        N.Bryson

By:

UML Limited

Address: PO Box 115, Port Sunlight, Wirral, Merseyside L62 4ZL
Facsimile no:     0151 643 6299
Attention:        A.R. Stubbs

By:

Yorkshire Electricity Group plc

Address: Wetherby Road, Scarcroft, Leeds LS14 3HS
Facsimile no:     01132 895926
Attention:        Company Secretary

By:



THE OTHER PARTIES

Accord Energy Ltd

Address: Charter Court, 50 Windsor Road, Slough, Berkshire SL1 2HA
Facsimile no:     01753 758010
Attention:        E.F. Pethybridge

By:

AES Partington Limited

Address: Burleigh House, 17-19 Worple Way, Richmond, Surrey TW10 6AG
Facsimile no:     0181 332 1849
Attention:        Michael Armstrong

By:

Alcan Aluminium UK Limited

Address: Lynemouth Power Station, Ashington, Northumberland NE63 9YH
Facsimile no:     01670 393970
Attention:        W.E. Jones

By:

BG plc

Address: 100 Thames Valley Park, Reading, Berkshire, RG6 1PT
Facsimile no:     0118 929 3651
Attention:        C. Alexander

By:

BP Chemicals Limited

Address: Baglan Bay Works, Port Talbot, West Glamorgan SA12 7BP
Facsimile no:     01639 823 272
Attention:        Mr. W.G. James

By:

Cabah Energy Limited

Address: c/o ABB ForStar Developments Limited, Tilford House, Farnham Business
 Park, Weydon Lane, Farnham,
                  Surrey  GU9 8QT
Facsimile no:     01252 732110
Attention:        Paul Abbott

By:

Cottam Development Centre Limited

Address: c/o PowerGen plc, Westwood Way, Westwood Business Park, Coventry
CV4 8LG
Facsimile no:     01203 425 484
Attention:        Mr. P. Stanton

By:

Enfield Energy Centre Limited

Address: Cam Lea Offices, Mollison Avenue, Enfield EN3 7NN
Facsimile no:     01642 678123
Attention:        K. Clarke

By:

Hydro Electric Energy Limited

Address: c/o Scottish Hydro Electric PLC, Inveralmond House, 200 Dunkeld Road,
Perth PH1 3AQ
Facsimile no:     01738 455281
Attention:        Company Secretary

By:

Keadby Power Limited

Address: P.O. Box 89, Keadby, Scunthorpe, North Lincolnshire DN17 3AZ
Facsimile no:     01724 784270
Attention:        Dr. C.K. Stanley

By:

Kingsnorth Power Limited

Address: c/o Budd Martin & Co, Industria House, Red Houses, St. Brelade, Jersey
JE3 8LD
Facsimile no:     01534 44777
Attention:        R. Martin

By:

Meter Operators Limited

Address: Ryden Lane, Charton, Nr. Pershore, Worscester WR10 3LQ
Facsimile no:     01386 861113
Attention:        R. Edmed

By:

Pentex (East Midlands) Limited

Address: Union Buildings, 15 Union Street, Aberdeen AB1 2BU
Facsimile no:     01244 211444
Attention:        H. Jamieson

By:

Saltend Cogeneration Company Limited

Address: Britannic House, 1 Finsbury Circus, London EC2M 7BA
Facsimile no:     0171 496 5863
Attention:        Mr. M. Stageman

By:

Spalding Energy Company Limited

Address: 20 St. James's Street, London SW1A 1ES
Facsimile no:     0171 839 0905
Attention:        G. Grant

By:

THE METER OPERATOR PARTIES WHO ARE NOT PARTIES

Control Devices and Systems Limited

Address: P.O. Box 56, 101 Mill Lane, Newbury, Berkshire RG14 5RE
Telex no:         849811
Facsimile no:     01635 528224
Attention:        J.W. Dowse

By:

Datum Solutions Limited

Address: Littlebrook Business Centre, Littlebrook Manor Way, Dartford, Kent DA1
5PS
Facsimile no:     01322 295178
Attention:        G. Babbs

By:

DrakMarn O&M Ltd

Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no:     01203 425431
Contact: Company Secretary

By:

E. Squared Limited

Address: 52-54 Southwark Street, London SE1 1UN
Facsimile no:     0171 378 0012
Attention:        Graham Nicholls

By:

Northern Energy Services Limited

Address: 208 Askern Road, Bentley, Doncaster DN5 OEU
Facsimile no:     01302 820790
Attention:        W. Tuczemzkyi

By:

PowerMet Limited

Address: 13 Wimpole Street, London W1M 7AB
Facsimile no:     0171 493 7151
Attention:        M. Rugman

By:

Schlumberger Industries Limited

Address: Langer Road, Felixstowe, Suffolk IP11 8ER
Facsimile no:     01394 276030
Attention:        M. Jones, Marketing Manager

By:

Stanor National Contracts

Address: 71A Mafeking Avenue, Brentford, Middlesex TW8 0NL
Facsimile no:     0181 560 4651
Attention:        A. Yardley

By:

The Challenge Group

Address: 22 Tally Road, Oxted, Surrey  RH8 0TG
Facsimile no:     01883 730543
Attention:        J. Glover

By:


EXTERNAL POOL MEMBERS

British Nuclear Fuels plc

Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no:     019467 27132
Attention:        P.L. O'Neil, Business Manager, Electricity Generation

By:

Electricite de France, Service National

Address: EDF Production Transport, Departement Relations avec l'Etranger,
                  Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384
 Paris,
                  Cedex 08
Telex no:         280098 FRANCE
Facsimile no:     (00 331) 40 42 63 41
Attention:        P. Gaillet

(copy to:         Associated Electricity Supplies Limited

Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no:     0181 944 0750
Attention:        P. Clubb)

By:

Scottish Hydro-Electric plc

Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ
Facsimile no:     01738 456190
Attention:        R. Hackland

By:

Scottish Power plc

Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no:     0141 636 4706
Attention:        B.J.H. Paget

By:



SETTLEMENT SYSTEM ADMINISTRATOR

Energy Settlements and Information Services Limited

Address: Fairham House, Green Lane, Clifton, Nottingham NG11 9LN
Facsimile no:     0115 945 6728
Attention:        G.K. James, General Manager

By:



POOL FUNDS ADMINISTRATOR

Energy Pool Funds Administration Limited

Address: 3rd Floor, 185 Park Street, London SE1 9DY
Facsimile no:     01203 423558
Attention:        A. Marks, Director (National Grid House, 2nd Floor,  
            Kirby Corner Road,
                  Coventry CV4 8JY)

By:



GRID OPERATOR

EXECUTED AS A DEED by              )
The National Grid                           )
Company plc by the                          )
affixing of its                             )
common seal in the                          )
presence of:-                               )



MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory



Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY
Telex no:         -
Facsimile no:     01203 423577
Attention:        Company Secretary (copy to:J. Irgin, c/o M.J. Metcalfe,
                  The National Grid Company plc, National Grid House, Kirb
 Corner
Road, Coventry CV4 8JY

ANCILLARY SERVICES PROVIDER

EXECUTED AS A DEED by     )
The National Grid                  )
Company plc by the        )
affixing of its                    )
common seal in the        )
presence of:-                      )



MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory

Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY
Facsimile no:     01203 423577
Attention:        Company Secretary (copy to Mr. Carlton)





<PAGE>


EXTERNALLY INTERCONNECTED PARTIES

Scottish Power plc

Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Telex No:         -
Facsimile No:     0141 636 4706
Attention:        B.J.H. Paget

By:

Electricite de France, Service National

Address: EDF Department Transport, Departement Relations avec l'Etranger,
 Echanges d'Energie, 2 Rue Louis
                  Murat, 5eme etage, 75384 Paris, Cedex 08
Telex no:         280098 FRANCE
Facsimile no:     (00 331) 40 42 63 41
Attention:        P. Gaillet

(copy to:         Associated Electricity Supplies Limited

Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Telex no:         -
Facsimile no:     0181 944 0750
Attention:        P. Clubb)

By:





<PAGE>







                                     DATED                          , 1998



                                                THE GENERATORS
                                                 named herein

                                                    - and -

                                                 THE SUPPLIERS
                                                 named herein

                                                    - and -

               ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
                                      as Settlement System Administrator

                                                    - and -

                                               ENERGY POOL FUNDS
                                            ADMINISTRATION LIMITED
                                          as Pool Funds Administrator

                                                    - and -

                                         THE NATIONAL GRID COMPANY plc
                               as Grid Operator and Ancillary Services Provider

                                                    - and -

                                              SCOTTISH POWER plc
                                                      and
                                    ELECTRICITE DE FRANCE, SERVICE NATIONAL
                                                 as Externally
                                            Interconnected Parties

                                                    - and -

                                               THE OTHER PARTIES
                                                 named herein

                                                     - and -

                                          THE METER OPERATOR PARTIES
                                                 named herein

                                    ---------------------------------------

                                        TWENTY-FIRST SUPPLEMENTAL DEED
                               relating to the Pooling and Settlement Agreement
                                         for the Electricity Industry
                                             in England and Wales
                                    ---------------------------------------



<PAGE>




                                                      253



                               

                                                   CONTENTS

                                                                   Page

1.       INTERPRETATION                                               2

2.       AMENDMENTS                                                   2

3.       CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT         2

4.       MISCELLANEOUS                                                2

5.       ENTIRE AGREEMENT                                             2

6.       GOVERNING LAW                                                3

SCHEDULE 1:    Part I: The Generators                                 4

               Part II: The Suppliers                                 8

SCHEDULE 2:    The Other Parties                                      13

SCHEDULE 3:    The Meter Operator Parties who are not Parties        15

SCHEDULE 4:    Amendments to the Pooling and Settlement Agreement    16

SIGNATORIES                                                          31