PUBLIC ELECTRICITY
                                 SUPPLY LICENCE
                                       for
                          SOUTH WESTERN ELECTRICITY plc



South Western Electricity plc                                  September 1999


<PAGE>


                                     PREFACE

1.       This document illustrates the licence obligations which presently apply
         under the Public Electricity Supply Licence held by South Western
         Electricity plc. The document comprises conditions contained in the
         original Licence granted on 26 March 1990 and subsequent modifications
         made to that Licence.

2.       OFFER wishes to make clear that this is not legally binding document
         but has been produced as a working copy of South Western Electricity
         plc's PES licence. It is hoped that this document accurately reflects
         the present Licence, but it is not a substitute for the original
         Licence and the subsequent schedules of modifications issued to South
         Western Electricity plc and held by OFFER's library.


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<TABLE>
<CAPTION>

                                                           TABLE OF CONTENTS

                                                                                                        Page

<S>                                                                                                       <C>
PART I. TERMS OF THE LICENCE                                                                              1

PART II. THE CONDITIONS                                                                                   2

INTERPRETATION                                                                                            2

1.                Definitions and interpretation                                                          2

SECTION A. DISTRIBUTION BUSINESS OBLIGATIONS                                                             21

2.                Availability of Distribution Business resources                                        21

3.                Distribution Charge restriction conditions: definitions                                23

3A.               Restriction of distribution charges                                                    29

3B.               Restriction of distribution charges: adjustments                                       37

3C.               Information to be provided to the Director in connection with the distribution
                  charge restriction conditions                                                          51

3D.               Distribution Business allowance in respect of security costs                           56

3E.               Duration of distribution charge restriction conditions                                 60

4.                Prohibition of cross-subsidies                                                         62

5.                Basis of charges for use of system, connection to system and Metering and
                  Data Services: requirements for transparency                                           63

5A.               Non-discrimination in the provision of use of system, connection to system
                  and Metering and Data Services                                                         69

5B.               Requirement to offer terms for use of system, connection and the provision
                  of Metering and Data Services                                                          71

5C.               Requirement to offer Standard Terms of Connection                                      78

5D.               Functions of the Director                                                              80

6.                Distribution system planning standard and quality of service                           82

7.                Security and Safety of Supplies Enquiry Service                                        83

8.                Provision of information about theft, damage and meter interference                    85

9.                Provisions relating to the connection of metering equipment                            86

10.               Generation Security Standard                                                           88

11.               Distribution Code                                                                      91

12.               The Metering Point Administration Service and the Master Registration
                  Agreement                                                                              95



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13.               Establishment of a Data Transfer Service                                               98

14.               Restriction on use of certain information and independence of the
                  Distribution Business                                                                 101

14A.              Appointment of Compliance Officer                                                     106

15.               Requirement to facilitate competition in the Generation and Supply of
                  Electricity                                                                           110

16.               Compliance with the Grid Code                                                         111

17.               Security arrangements                                                                 112

18.               Conditions affecting customers' statutory rights                                      113

19.               Licensee's apparatus on customers' side of meter                                      115

20.               Provision of distribution services for persons who are of pensionable age or
                  disabled or chronically sick                                                          116

21.               Code of practice on procedures with respect to site access                            117

22.               Standards of performance for the Distribution Business                                118

23.               Distribution Business complaint handling procedure                                    119

24.               Preparation, review of and compliance with customer service codes                     120

25.               Record of and report on Distribution Business performance                             122

26.               Publication of supply numbers                                                         124

27.               Relations with the Relevant Consumers' Committee                                      125

28.               Health and safety of employees                                                        126

SECTION B. SUPPLY BUSINESS OBLIGATIONS                                                                  127

Sub-Section (1) General Obligations                                                                     127

29.               Supply charge restriction conditions: definitions                                     127

29A.              Restriction on Supply Charges                                                         132

29B.              Restriction of supply charges: adjustments                                            140

29C.              Information to be provided to the Director in connection with the supply
                  charge restriction conditions                                                         188

29D.              Supply Business allowance in respect of security costs                                191

29E.              Duration of supply charge restriction conditions                                      195

30.               Prohibition of cross-subsidies and of discrimination in electricity sale
                  contracts                                                                             197

31.               Prohibition of discrimination in supply                                               198

31A.              Duration of discrimination conditions                                                 204

32.               Obligation on economic purchasing                                                     206

33.               Tariffs                                                                               209

34.               Arrangements for informing customers on revocation of Licence                         210

35.               Basis of charges for top-up and standby supplies or sales of electricity,
                  exempt supply services and prepayment meter services:
                   requirements for transparency                                                        212

35A.              Non-discrimination in the provision of top-up or standby supplies or sales of
                  electricity, exempt supply services and prepayment meter services                     215

35B.              Requirement to offer terms for top-up and standby, exempt supply services
                  and prepayment meter services                                                         217

35C.              Arrangements in respect of Standard Terms of Connection                               221

35D.              Functions of the Director                                                             222

36.               Provision of information to customers about security and safety of
                  supplies                                                                              224

37.               Procedures for the detection and prevention of theft, damage and meter
                  interference                                                                          226

38.               Agreements for the provision of meters                                                227

39.               Generation Security Standard                                                          228

40.               The Master Registration Agreement                                                     231

41.               Restriction on use of certain information                                             232

42.               Compliance with the Grid Code                                                         233

43.               Security arrangements                                                                 234

44.               Pooling and Settlement Agreement                                                      235

45.               Conditions of supply affecting customers' statutory rights                            236

46.               Code of practice on payment of bills and guidance for dealing with
                  customers in difficulty                                                               237

47.               Provision of supply services for persons who are of pensionable age or
                  disabled or chronically sick                                                          239

48.               Code of practice on procedures with respect to site access                            241

49.               Supply Business standards of performance                                              242

50.               Efficient use of electricity                                                          243

51.               Supply Business complaint handling procedure                                          245

52.               Preparation, review of and compliance with customer service codes                     246

53.               Record of and report on Supply Business performance                                   248

54.               Information given to Designated Customers                                             250

55.               Publication of information to customers                                               251

56.               Relations with the Relevant Consumers' Committee                                      252

57.               Health and safety of employees                                                        253

58.               Designated Premises                                                                   254

59.               Terms for supply of electricity incompatible with Licence Conditions                  256

60.               Limitation on requirements for termination fees                                       257

61.               Revision of the Contract Terms Conditions                                             258

Sub-Section (2)  The Contract Terms Conditions                                                          262

62.               Designated Supply Contracts                                                           262

63.               Contractual terms                                                                     264

64.               Notification of terms                                                                 266

65.               Security deposits                                                                     268

66.               Termination of contracts on notice                                                    270

67.               Termination of contracts in specified circumstances                                   272

68.               Assignment of outstanding charges                                                     274

69.               Modification of provisions under Conditions 66 and 68                                 276

70.               Marketing of electricity to Designated Customers                                      278

SECTION C. COMMON OBLIGATIONS                                                                           284

71.               Separate accounts for Separate Businesses                                             284

72.               Restriction on activity and financial ring fencing                                    290

73.               Availability of resources                                                             293

74.               Credit rating of Licensee                                                             297

75.               Restriction on own generation capacity                                                298

76.               Restrictions relating to Embedded Generation                                          305

77.               Disposal of relevant assets                                                           306

78.               Provision of information to the Director                                              311

79.               Payment of fees                                                                       313

80.               Arrangements for provision of services by the Agent                                   315

Schedule 1. Description of authorised area                                                              317

Schedule 2. Terms as to revocation                                                                      319

Schedule 3A. Supplementary provisions of the distribution charge restriction conditions                 322

Part A. Principles for Attribution                                                                      322

Part B. EHV premises                                                                                    324

Part C. Excluded services                                                                               325

Part D. Regulated distribution unit categories                                                          329

Part E. Calculation of factor in respect of distribution losses                                         331

Schedule 3B. Supplementary provisions of the supply charge restriction conditions                       335

Part A. Principles for Attribution                                                                      335

Part B. Excluded services                                                                               338


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<PAGE>




                          PART I. TERMS OF THE LICENCE

 1.      The Secretary of State, in exercise of the power conferred by Section
         6(1)(c), and Section 6(6) and Section 7 of the Electricity Act 1989
         (hereinafter referred to as the "Act") hereby licenses South Western
         Electricity plc (registered in England and Wales under number 2366894)
         as public electricity supplier to supply electricity to any premises in
         the authorised area designated in Schedule 1 below during the period
         specified in paragraph 3 below, subject to the Conditions set out in
         Part II and Schedule 3 below (hereinafter referred to as the
         "Conditions").

     2.   The Conditions are subject to modification or amendment in accordance
          with their terms or with Sections  11,  14 or 15 of the Act. This
          Licence is further subject to the terms as to revocation  specified in
          Schedule 2.


 3.      This Licence shall come into force on the transfer date appointed under
         Section 65 of the Act and unless revoked in accordance with the
         provisions of Schedule 2 shall continue until determined by not less
         than 25 years' notice in writing given by the Secretary of State to the
         Licensee, such notice not to be served earlier than a date being 10
         years after the Licence comes into force.




                                                 JOHN WAKEHAM
26th March 1990                              Secretary of State for Energy


<PAGE>


                             PART II. THE CONDITIONS

                                 INTERPRETATION

Condition 1. Definitions and interpretation

1.       Unless the contrary intention appears, words and expressions used in
         the Conditions shall be construed as if they were in an Act of
         Parliament and the Interpretation Act 1978 applied to them and
         references to an enactment shall include any statutory modification or
         re-enactment thereof after the date when this Licence comes into force.

2.       Any word or expression defined for the purposes of any provision of
         Part 1 of the Act shall, unless the contrary intention appears, have
         the same meaning when used in the Conditions.

3.       In the Conditions unless the context otherwise requires:


         "Act"                            means the Electricity Act 1989.

         "affiliate"                      in relation to the Licensee
                                          means any holding company of
                                          the Licensee, any subsidiary
                                          of the Licensee or any
                                          subsidiary of a holding
                                          company of the Licensee.

         "Agent"                          has the meaning given in Condition 80.

         "Auditors"                       means the Licensee's
                                          auditors for the time being
                                          holding office in accordance
                                          with the requirements of the
                                          Companies Act 1985.

         "authorised"                     in relation to any business
                                          or activity means authorised
                                          by licence granted under
                                          Section 6 or by exemption
                                          granted under Section 5 of
                                          the Act.
<PAGE>

         "authorised area"               means the area from time to time
                                         comprised in  Schedule  1 to
                                         this Licence.

         "Authorised Electricity         means any person (other than the
                                         Licensee) who is authorised Operator"
                                         to generate, transmit or supply
                                         electricity and for the purposes of
                                         Condition 5A to 5C inclusive shall
                                         include any person who has made an
                                         application to be so authorised which
                                         has not been refused and any person
                                         transferring electricity to or from
                                         England and Wales across an
                                         interconnector or who has made an
                                         application for use of interconnector
                                         which has not been refused.

         "Condition"                     means a condition set out in this Part
                                         of this Licence.

         "connection charges"            means charges made or levied or to be
                                         made or levied  for the
                                         carrying out (whether before
                                         or after the date on which
                                         the Licence comes into
                                         force) of works and
                                         provision and installation
                                         of electrical plant,
                                         electric lines and ancillary
                                         meters in constructing or
                                         modifying entry and exit
                                         points on the Licensee's
                                         Distribution System together
                                         with charges in respect of
                                         maintenance and repair of
                                         such items in so far as not
                                         otherwise recoverable as use
                                         of system charges and in
                                         respect of disconnection and
                                         the removal of electrical
                                         plant, electric lines and
                                         ancillary meters following
                                         disconnection, all as more
                                         fully described in
                                         paragraphs 4 and 7 of
                                         Condition 5, whether or not
                                         such charges are annualised.
<PAGE>

         "contract"                      in relation to the supply of
                                         electricity by the Licensee
                                         to a customer at premises,
                                         means a special agreement in
                                         accordance with section 22
                                         of the Act.

         "Contract Terms Conditions"     means, as
                                         the context requires, either
                                         the Conditions contained in
                                         Sub-section (2) of Section B
                                         of this Licence or those
                                         Conditions together with the
                                         equivalent Conditions
                                         contained in the licences of
                                         all other Electricity
                                         Suppliers.

         "customer"                      means any person supplied or
                                         requiring to be supplied
                                         with electricity at premises
                                         within the authorised area
                                         whether by the Licensee
                                         (including any affiliate or
                                         related undertaking of the
                                         Licensee) or, where the
                                         context requires, by another
                                         Electricity Supplier, but
                                         shall not include any
                                         Authorised Electricity
                                         Operator in its capacity as
                                         such.

         "data aggregation services"     has the meaning given at sub-paragraph
                                         3(e) of Condition 5B.

         "data processing services"      has the meaning given at sub-paragraph
                                         3(d) of Condition 5B.

         "data retrieval services"       has the meaning given at sub-paragraph
                                         3(c) of Condition 5B.

         "Data Transfer Catalogue"       has the meaning given at sub-paragraph
                                         6(c) of Condition 12.

        "Data Transfer Service"          means the service to be established,
                                         operated and  maintained by the
                                         Licensee, in conjunction and
                                         co-operation with all other public
                                         electricity suppliers, in accordance
                                         with Condition 13.


<PAGE>


         "data transfer services"        means the services of the Data
                                         Transfer Service established
                                         in accordance with Condition
                                         13.

         "date of the contract"          means, in respect of any contract,
                                         the date on which  that
                                         contract is entered into.

         "Declared                       Net Capacity" means, in
                                         relation to generation
                                         plant, the highest
                                         generation of electricity at
                                         the main alternator
                                         terminals which can be
                                         maintained for an indefinite
                                         period of time without
                                         causing damage to the plant,
                                         less so much of that
                                         capacity as is consumed by
                                         the plant.

         "deposit"                       means a deposit of money by way of
                                         security  for the payment of
                                         charges for the supply of electricity.

         "Designated Customer"           means a customer
                                         supplied or requiring to be
                                         supplied with electricity at
                                         Designated Premises (but
                                         excluding such customer in
                                         so far as he is supplied or
                                         requires to be supplied at
                                         premises other than
                                         Designated Premises).

         "Designated Premises"           has the meaning determined in
                                         accordance with Condition 58.

         "Designated Supply Contract"    has the meaning given in Condition 62.

         "Distribution Business"         means the business of the Licensee or
                                         any affiliate or related
                                         undertaking comprising or ancillary to:

<PAGE>

                                         (a)   the distribution
                                               (whether for its own
                                               account or that of
                                               third parties) of
                                               electricity through
                                               the Licensee's
                                               Distribution System,
                                               including any business
                                               in providing
                                               connections to such
                                               system; and

                                           (b) the provision of Metering and
                                               Data Services (other than
                                               prepayment meter services).

         "Distribution Code"               means the Distribution
                                           Code required to be prepared
                                           pursuant to Condition 11 and
                                           approved by the Director, as
                                           from time to time revised
                                           with the approval of the
                                           Director.

         "Domestic Customer"               means a customer
                                           supplied or requiring to be
                                           supplied with electricity at
                                           Domestic Premises (but
                                           excluding such customer in
                                           so far as he is supplied or
                                           requires to be supplied at
                                           premises other than Domestic
                                           Premises).

         "Domestic Premises"               means premises at
                                           which a supply is taken
                                           wholly or mainly for
                                           domestic purposes.

         "electricity purchase contract"   includes
                                           any contract or arrangement,
                                           other than for the supply of
                                           electricity to a customer at
                                           premises, under which
                                           provision is made for the
                                           making or receipt of
                                           payments by reference to the
                                           difference between
<PAGE>

                                           (a)   an amount specified or
                                                 ascertainable under the terms
                                                 of such contract or
                                                 arrangement; and


                                           (b)   the price at which electricity
                                                 is sold or purchased unde  the
                                                 Pooling and Settlement
                                                 Agreement or any component of
                                                 either of such prices;


                                           and

         "electricity sale contract"       shall be construed accordingly.

         "Electricity                      Supplier" means either a
                                           Second Tier Supplier or a
                                           public electricity supplier.

         "equivalent megawatt"             in circumstances  where demand is
                                           measured only in megavolt amperes
                                           means megavolt amperes converted into
                                           megawatts using for this purpose a
                                           power factor of 0.9 megawatts per
                                           megavolt ampere or such other factor
                                           as may with the approval of the
                                           Director be taken as being
                                           appropriate having regard to
                                           electrical characteristics of the
                                           supply, and cognate expressions
                                           shall be construed accordingly.

         "established connection"          means, in relation to any premises,
                                           an existing connection to the
                                           Licensee's  Distribution System
                                           which does not require modification,
                                           or a new or modified  connection  to
                                           such system in respect of which all
                                           works  have been completed, such that
                                           in  either case electricity is
                                           able to be supplied to the premises
                                           in accordance with the terms of the
                                           relevant supply agreement.
<PAGE>

         "Exempt Supplier"                 means a person who
                                           is authorised to supply
                                           electricity by virtue of an
                                           exemption granted under
                                           Section 5 of the Act.

         "exempt supply services"          means the
                                           services detailed at
                                           paragraph 2 of Condition
                                           35B, as provided by the
                                           Licensee to Exempt Suppliers
                                           in respect of premises
                                           within the authorised area.

         "Existing Generation Business"    means
                                           the Generation Business as
                                           carried on on 30 September
                                           1999 pursuant to
                                           arrangements in place on
                                           that date and which involves
                                           own-generation sets at that
                                           date or generation sets in
                                           which there is an
                                           accountable interest at that
                                           date.

         "financial year"                  bears the meaning given to it at
                                           paragraph 1 of Condition 71.

         "fixed term period"               means,  in  relation  to  any
                                           Designated  Supply  Contract,   a
                                           specified period of more
                                           than 12 months during which
                                           the Principal Terms of that
                                           contract may not be varied
                                           by the Licensee other than
                                           by agreement with the
                                           customer.

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

         "Generation Business"             means the business
                                           (if any) in the generation
                                           of electricity, being a
                                           business involving
                                           own-generation sets or in
                                           which there is an
                                           accountable interest in
                                           generation sets, as defined
                                           for the purposes of
                                           Condition 75.
<PAGE>

         "generation set"                  means any plant or
                                           apparatus for the production
                                           of electricity and shall
                                           where appropriate include a
                                           generating station
                                           comprising more than one
                                           generation set.

         "goods or services"               includes
                                           electric lines and electric
                                           plant, and goods or services
                                           designed or calculated to
                                           promote the efficient use of
                                           electricity, but excludes
                                           meters, meter operation and
                                           prepayment systems, and data
                                           retrieval and related
                                           services.

         "Grid Code"                       means the Grid Code
                                           required to be prepared by
                                           the Transmission Company and
                                           approved by the Director as
                                           from time to time revised
                                           with the approval of the
                                           Director.

         "Grid Supply Point"               means any
                                           point at which electricity
                                           is delivered to the
                                           Licensee's Distribution
                                           System from the Transmission
                                           System.

         "half-hourly  metering            means
           equipment"                       metering equipment which is
                                           configured to record the
                                           quantity of electricity (to
                                           be calculated in kWh)
                                           supplied to premises during
                                           each half hour period of
                                           supply

                                           and  "non-half-hourly  metering
                                           equipment"  shall be construed
                                           accordingly.

         "holding company"                 means a holding
                                           company within the meaning
                                           of Sections 736, 736A and
                                           736B of the Companies Act
                                           1985.
<PAGE>

         "interconnectors"                 means the electric lines and
                                           electrical plant and meters
                                           owned or operated by the
                                           Transmission Company solely
                                           for the transfer of
                                           electricity to or from the
                                           Transmission System into or
                                           out of England and Wales.

         "Licensee"                        means South Western
                                           Electricity plc (registered
                                           in England and Wales under
                                           number 2366894) and (where
                                           the context so requires)
                                           shall include any Area Board
                                           in respect of which the
                                           Licensee is the successor
                                           company.

         "Licensee's Distribution          means the system of electric  lines
           System"                         situated  wholly or partly
                                           within the  authorised  area owned
                                           or operated by the  Licensee for the
                                           distribution  of  electricity
                                           between the Grid Supply Points or
                                           generation  sets or other entry
                                           points and the points where it is
                                           delivered to  customers or
                                           Authorised Electricity Operators,
                                           and includes any Remote Transmission
                                           Assets owned by the Transmission
                                           Company operated by the Licensee and
                                           any electrical plant and meters
                                           owned or operated by the Licensee
                                           in connection with the distribution
                                           of electricity, and references to the
                                           distribution system of any Authorised
                                           Electricity Operator shall be
                                           construed accordingly.

         "Master Registration
           Agreement"                      means the agreement of that
                                           title to be prepared by the
                                           Licensee, in conjunction and
                                           co-operation with all other
                                           public electricity
                                           suppliers, in accordance
                                           with and comprising such
                                           matters as are set out in
                                           Condition 12.

<PAGE>


         "megawatt" or "MW"                includes an equivalent megawatt.

         "meter operation services"        has the meaning given at
                                           sub-paragraph 3(b) of Condition 5B.

         "meter provision services"        has the meaning given at
                                           sub-paragraph 3(a) of Condition 5B.

         "Metering and Data Services"      has the meaning given in Condition
                                           5B.

         "metering equipment"              includes any meter and any
                                           associated equipment which materially
                                           affects the operation of that meter.

         "Metering Point Administration
           Service"                        means the service
                                           to be established, operated
                                           and maintained by the
                                           Licensee in accordance with
                                           Condition 12.

         "metering point administration
          services"                        means the services
                                           of the Metering Point
                                           Administration Service
                                           established in accordance
                                           with Condition 12 or, where
                                           the context requires, means
                                           the equivalent services
                                           provided by any other public
                                           electricity supplier in
                                           accordance with the
                                           provisions of its public
                                           electricity supply licence.

         "New Generation Business"         means any Generation Business other
                                           than the  Existing Generation
                                           Business.

         "notice"                          means (unless  otherwise  specified)
                                           notice given in writing or
                                           by any other reasonable means.
<PAGE>

         "participating interest"          bears the meaning ascribed to that
                                           expression by Section 260 of the
                                           Companies Act 1985.

         "Permitted Purpose"               means the purpose of all or any of
                                           the following:


                                          (a)      the Supply  Business,  the
                                                   Second Tier Supply Business,
                                                   the Distribution Business or
                                                   any business or activity
                                                   within the limits of
                                                   paragraph 4 of Condition 72;


                                          (b)      the Existing Generation
                                                   Business until (but not
                                                   after) 30 September 2000;

                                          (c)      any business
                                                   conducted or
                                                   activity carried on
                                                   (other than the
                                                   Generation
                                                   Business) on 17
                                                   September 1995 by
                                                   the Licensee or by
                                                   a company which was
                                                   an affiliate or
                                                   related undertaking
                                                   of the Licensee on
                                                   that date; and

                                          (d)      without prejudice
                                                   to the generality
                                                   of paragraphs (a)
                                                   and (c), any
                                                   payment or
                                                   transaction
                                                   lawfully made or
                                                   undertaken by the
                                                   Licensee for a
                                                   purpose within
                                                   sub-paragraphs (i)
                                                   to (vii) of
                                                   paragraph 5(b) of
                                                   Condition 77

         "Pooling and Settlement
          Agreement"                       means the agreement of that
                                           title approved by the
                                           Secretary of State as from
                                           time to time amended with
                                           the approval of the Director
                                           (where so required pursuant
                                           to its terms).

         "prepayment meter services"       has the meaning given at paragraph 3
                                           of Condition 35B.
<PAGE>

         "Principal Terms"                 means,  in respect of any form of
                                           Designated  Supply  Contract,
                                           those terms which relate to:


                                           (a)      charges for the supply of
                                                    electricity;


                                           (b)      any requirement to pay
                                                    charges for the supply by
                                                    prepayment through a
                                                    prepayment meter;


                                           (c)      any requirement for a
                                                    security deposit;

                                           (d)      the duration of the
                                                    contract;


                                           (e)      the rights to terminate the
                                                    contract (including any
                                                    obligation to pay a
                                                    termination fee); and


                                           (f)      the obligation to enter
                                                    into an agreement on the
                                                    Standard Terms of
                                                    Connection,


                                                    and such other terms as may
                                                    reasonably be considered
                                                    significantly to affect the
                                                    evaluation of the contract.

         "related undertaking"             in relation to the Licensee means
                                           any undertaking in which the
                                           Licensee has a participating
                                           interest.

         "Relevant Consumers' Committee"   means the committee appointed by
                                           the Director under Section 2
                                           of the Act for the area in
                                           respect of which the
                                           Licensee is the public
                                           electricity supplier.

         "relevant premises"               in relation to a
                                           Designated Supply Contract,
                                           means any premises supplied
                                           with electricity under the
                                           terms of the contract.

<PAGE>


         "Remote Transmission Assets"      means any electric lines,
                                           electrical plant or meters
                                           owned by the Transmission
                                           Company which:

                                          (a)     are embedded in the
                                                  distribution system
                                                  of the Licensee or
                                                  any Authorised
                                                  Electricity Operator
                                                  other than the
                                                  Transmission Company
                                                  and are not directly
                                                  connected by lines
                                                  or plant owned by
                                                  the Transmission
                                                  Company to a
                                                  sub-station owned by
                                                  the Transmission
                                                  Company; and

                                          (b)     are by agreement
                                                  between the
                                                  Transmission Company
                                                  and the Licensee or
                                                  such Authorised
                                                  Electricity Operator
                                                  operated under the
                                                  direction and
                                                  control of the
                                                  Licensee or such
                                                  Authorised
                                                  Electricity
                                                  Operator.

         "representation"                  includes any objection or any other
                                           proposal made in writing.

         "Retail Price Index"              means the general index of retail
                                           prices published  by the
                                           Office for National Statistics each
                                           month in respect of all items or:

                                           (a)      if 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, such index
                                                    for such month or
                                                    months as the
                                                    Director may after
                                                    consultation with
                                                    the Licensee
                                                    determine to be
                                                    appropriate in the
                                                    circumstances; or

<PAGE>


                                           (b)      if there is a
                                                    material change in
                                                    the basis of the
                                                    index, such other
                                                    index as the
                                                    Director may after
                                                    consultation with
                                                    the Licensee
                                                    determine to be
                                                    appropriate in the
                                                    circumstances.

         "Second Tier Supplier"            means a person authorised to supply
                                           electricity pursuant to
                                           Section 6(2) of the Act.

         "Second Tier Supply Business"     means the authorised business (if
                                           any) of the Licensee or any
                                           affiliate or related
                                           undertaking as a private
                                           electricity supplier.

         "Settlement Agreement for
          Scotland"                        means the agreement of that
                                           title to be prepared in
                                           accordance with, and
                                           comprise such matters as are
                                           set out in, Condition 24 of
                                           Part V of the Scottish
                                           Generation, Transmission and
                                           Public Electricity Supply
                                           Licences.

         "settlement purposes"            means for the purposes of settlement
                                          as set out in the Pooling
                                          and Settlement Agreement or the
                                          Settlement Agreement for Scotland.

         "Separate Business"              means each of the Distribution,
                                          Supply, Second Tier Supply and
                                          Generation Businesses taken
                                          separately from one another and
                                          from any other business of the
                                          Licensee,  but so that where all
                                          or any part of such  business is
                                          carried on by an  affiliate or
                                          related undertaking of the Licensee
                                          such part of the business as is
                                          carried on by that affiliate or
                                          related undertaking shall be
                                          consolidated  with any other such
                                          business of the Licensee (and of any
                                          other affiliate or related
                                          undertaking) so as to form a single
                                          Separate Business.
<PAGE>

         "Standard Terms of Connection"   means the terms approved by the
                                          Director, in accordance with
                                          Condition 5C, for the
                                          retention of an established
                                          connection to the Licensee's
                                          Distribution System.

         "standby"                        means the periodic or intermittent
                                          supply or sale of electricity:


                                          (a)      to an Authorised
                                                   Electricity
                                                   Operator to make
                                                   good any shortfall
                                                   in the availability
                                                   of electricity to
                                                   that operator for
                                                   the purposes of its
                                                   supply of
                                                   electricity to
                                                   persons seeking
                                                   such supply; or

                                          (b)      to a customer of
                                                   the Licensee to
                                                   make good any
                                                   shortfall between
                                                   the customer's
                                                   total supply
                                                   requirements and
                                                   that met either by
                                                   its own generation
                                                   or by electricity
                                                   supplied by an
                                                   Authorised
                                                   Electricity
                                                   Operator other than
                                                   the Licensee

                                          such standby supply or sale
                                          being provided at such entry
                                          or exit point on the
                                          Licensee's Distribution
                                          System as the operator or
                                          customer may request.

         "subsidiary"                     means a subsidiary  within the
                                          meanings of Sections  736,  736A
                                          and 736B of the Companies Act 1985.

         "Supply  Business"               means the authorised business of the
                                          Licensee as public
                                          electricity supplier in the
                                          authorised area, but shall
                                          not include any activities
                                          forming part of the
                                          Distribution Business.
<PAGE>


         "termination  fee"               means any sum of money
                                          or other penalty (whether
                                          financial or otherwise)
                                          which may be demanded of a
                                          customer solely in
                                          consequence of the
                                          termination of a contract to
                                          supply electricity to
                                          premises.

         "top-up"                         means the  supply or sale of
                                          electricity  on a  continuing  or
                                          regular basis:


                                          (a)      to an Authorised
                                                   Electricity
                                                   Operator to make
                                                   good any shortfall
                                                   in the availability
                                                   of electricity
                                                   (including, where
                                                   that operator is
                                                   using the
                                                   Licensee's
                                                   Distribution
                                                   System, to make
                                                   good any
                                                   distribution losses
                                                   on that system) to
                                                   that operator for
                                                   the purposes of its
                                                   supply of
                                                   electricity to
                                                   persons seeking
                                                   such supply; or

                                          (b)      to a customer of
                                                   the Licensee to
                                                   make good any
                                                   shortfall between
                                                   the customer's
                                                   total supply
                                                   requirements and
                                                   that met either by
                                                   its own generation
                                                   or by electricity
                                                   supplied by an
                                                   Authorised
                                                   Electricity
                                                   Operator other than
                                                   the Licensee

                                          such top-up supply or sale
                                          being provided at such entry
                                          or exit point on the
                                          Licensee's Distribution
                                          System as the operator or
                                          customer may request.

         "Transfer Date"                  means such date as may
                                          be appointed by the
                                          Secretary of State by order
                                          under Section 65 of the Act.
<PAGE>

         "Transmission Company"           means The National
                                          Grid Company plc or any
                                          other holder for the time
                                          being of a Licence to
                                          transmit electricity in
                                          England and Wales under
                                          Section 6(1)(b) of the Act.

         "Transmission System"            means the system consisting (wholly
                                          or mainly) of high voltage electric
                                          lines owned or operated by the
                                          Transmission  Company and used for
                                          the transmission of electricity from
                                          one generating station to a
                                          sub-station or to another generating
                                          station, or between sub-stations or to
                                          any interconnector,  and includes any
                                          electrical plant and meters owned or
                                          operated by the Transmission Company
                                          in connection with the transmission
                                          of  electricity  but shall not
                                          include any Remote Transmission
                                          Assets.

         "ultimate holding company"       Means


                                          (i)   a holding company of the
                                                Licensee  which is not itself
                                                a subsidiary of another company;


                                          (ii)  where a holding
                                                company of the
                                                Licensee which is not
                                                a subsidiary of
                                                another company has
                                                entered into an
                                                agreement affecting
                                                the exercise of voting
                                                rights in or the
                                                appointment or removal
                                                of directors of the
                                                Licensee or any
                                                company of which the
                                                Licensee is a
                                                subsidiary, every
                                                party to that
                                                agreement; and

                                          (iii) where the exercise of
                                                voting rights in or
                                                the appointment or
                                                removal of directors
                                                of a holding company
                                                of the Licensee which
                                                is not a subsidiary of
                                                another company is
                                                controlled by an
                                                agreement, every party
                                                to that agreement.
<PAGE>


         "undertaking"                     bears the meaning ascribed to that
                                           expression  by Section 259
                                           of the Companies Act 1985.

         "unmetered supply"                means a supply of
                                           electricity to premises
                                           which is not, for the
                                           purpose of calculating the
                                           charges for electricity
                                           supplied to the customer at
                                           such premises, measured by
                                           metering equipment.

         "use of system"                   means use of the
                                           Licensee's Distribution
                                           System for the distribution
                                           of electricity by the
                                           Licensee for the Supply
                                           Business or for any other
                                           Authorised Electricity
                                           Operator.

         "use of system charges"           means charges made or levied or to
                                           be made or levied by the Licensee for
                                           the provision of services as part of
                                           the Distribution Business to any
                                           Authorised Electricity Operator
                                           or to the Licensee for the purposes
                                           of its Supply Business or Second
                                           Tier Supply Business as more fully
                                           described at paragraph 3 of
                                           Condition 5 and at paragraph C2 of
                                           Part C of Schedule 3A to this
                                           Licence;  but shall not include
                                           connection charges.

         "valid notice of termination"     has the meaning given in Condition
                                           66.

<PAGE>


4.       Unless otherwise specified, any reference to a numbered Condition (with
         or without a suffix letter) or Schedule is a reference to the Condition
         or Schedule bearing that number in this Licence, and any reference to a
         numbered paragraph (with or without a suffix letter) is a reference to
         the paragraph bearing that number in the Condition or Schedule in which
         the reference occurs.

5.       In construing  the provisions of this Licence, the heading or title of
         any Part,  Section,  Condition,  Schedule or paragraph
         shall be disregarded.


6.       Where any obligation of the Licensee is required to be performed by a
         specified date or within a specified period, and where the Licensee has
         failed so to perform, such obligation shall continue to be binding and
         enforceable after the specified date or after the expiry of the
         specified period (but without prejudice to all rights and remedies
         available against the Licensee by reason of the Licensee's failure to
         perform by that date or within that period).

7.       The provisions of Section 109 of the Act shall apply for the purposes
         of the delivery or service of any documents, directions or notices to
         be delivered or served pursuant to any Condition or Schedule, and
         directions issued by the Director pursuant to any Condition or Schedule
         shall be delivered or served as aforesaid.


<PAGE>



                  SECTION A. DISTRIBUTION BUSINESS OBLIGATIONS

Condition 2. Availability of Distribution Business resources

1.       The Licensee shall at all times act in a manner calculated to secure
         that it has sufficient management resources, financial resources and
         financial facilities to enable it:

(a)      to carry on the Distribution Business; and


(b)      to comply with such of its obligations under the Act and this Licence
         as apply to the Distribution Business.


2.       The Licensee shall submit a certificate addressed to the Director,
         approved by a resolution of the board of directors of the Licensee and
         signed by a director of the Licensee pursuant to that resolution. Such
         certificate shall be submitted in June of each year. Each certificate
         shall be in one of the following forms:

(a)               "After making enquiries, the directors of the Licensee have a
                  reasonable expectation that the Licensee will have available
                  to it, after taking into account in particular (but without
                  limitation) any dividend or other distribution which might
                  reasonably be expected to be declared or paid, sufficient
                  financial resources and financial facilities to enable the
                  Licensee to carry on the Distribution Business for a period of
                  12 months from the date of this certificate."


(b)               "After making enquiries, the directors of the Licensee have a
                  reasonable expectation, subject to what is said below, that
                  the Licensee will have available to it, after taking into
                  account in particular (but without limitation) any dividend or
                  other distribution which might reasonably be expected to be
                  declared or paid, sufficient financial resources and financial
                  facilities to enable the Licensee to carry on the Distribution
                  Business for a period of 12 months from the date of this
                  certificate. However, they would like to draw attention to the
                  following factors which may cast doubt on the ability of the
                  Licensee to carry on the Distribution Business ...."

<PAGE>


(c)               "In the opinion of the directors of the Licensee, the Licensee
                  will not have available to it sufficient financial resources
                  and financial abilities to enable the Licensee to carry on the
                  Distribution Business for a period of 12 months from the date
                  of this certificate."

3.       The Licensee shall submit to the Director with that certificate a
         statement of the main factors which the directors of the Licensee have
         taken into account in giving that certificate.

4.       The Licensee shall inform the Director in writing immediately if the
         directors of the Licensee become aware of any circumstance which causes
         them no longer to have the reasonable expectation expressed in the then
         most recent certificate given under paragraph 2.

5.       The Licensee shall use its best endeavours to obtain and submit to the
         Director with each certificate provided for in paragraph 2 a report
         prepared by its Auditors and addressed to the Director stating whether
         or not the Auditors are aware of any inconsistencies between, on the
         one hand, that certificate and the statement submitted with it and, on
         the other hand, any information which they obtained during their audit
         work.


<PAGE>



Condition 3. Distribution Charge restriction conditions: definitions

1.       In this Condition, in Conditions 3A to 3E and in Schedule 3A:


          "attributed"                     means, when used in relation to the
                                           fossil fuel levy or payments in lieu
                                           thereof or transmission
                                           connection point charges or remote
                                           transmission asset rentals or
                                           distribution losses or
                                           transmission costs or allowed
                                           distribution costs, attributed in
                                           accordance with the principles set
                                           out in Part A of Schedule 3A and
                                           attribute, attributed, attributable
                                           and attribution shall be
                                           construed accordingly.

          "average charge per unit
           distributed"                    means the distribution revenue in
                                           the relevant year divided by the
                                           regulated quantity
                                           distributed in that year.

         "average                          specified rate" means the
                                           average of the daily base
                                           rates of Barclays Bank plc
                                           current from time to time
                                           during the period in
                                           respect of which the
                                           calculation falls to be made.

          "distribution charge restriction  means Conditions  3 to 3E  together
            conditions"                     with Schedule 3A to this Licence,
                                            as from time to time modified or
                                            replaced in accordance therewith or
                                            pursuant to Sections 11, 14 or 15
                                            of the Act.

          "distribution losses"             means units
                                            unaccounted for on the
                                            Licensee's Distribution
                                            System, measured as being
                                            the difference between the
                                            units metered on entry
                                            into the system and the
                                            units metered on leaving
                                            the system.
<PAGE>

          "distribution revenue"            means the revenue
                                            (measured on an accruals
                                            basis) derived by the
                                            Licensee from the
                                            provision of distribution
                                            services in the relevant
                                            year, after deduction of:

                                            (i)     an  amount equal to such
                                                    part of the  total  amount
                                                    payable in that relevant
                                                    year to the Transmission
                                                    Company (measured on an
                                                    accruals basis) in respect
                                                    of transmission connection
                                                    point charges and remote
                                                    transmission asset rentals
                                                    and which would otherwise
                                                    be included in distribution
                                                    revenue by reason of being
                                                    recovered in that relevant
                                                    year by the Licensee in its
                                                    use of system charges, as
                                                    falls to be attributed  to
                                                    the  regulated quantity
                                                    distributed in that relevant
                                                    year; and


                                            (ii)    value added tax (if any)
                                                    and any other  taxes  based
                                                    directly on the amounts so
                                                    derived.

         "distribution services"           means all services provided by the
                                           Licensee as part of its
                                           Distribution Business
                                           other than excluded
                                           services.

          "EHV premises"                   means those premises to which units
                                           are delivered by the
                                           Licensee which fall to be
                                           treated as EHV premises in
                                           accordance with Part B of
                                           Schedule 3A.

          "EHV units"                      means units distributed by the
                                           Licensee which are
                                           delivered or deemed to be
                                           delivered to EHV premises.

          "excluded services"              means those services provided by the
                                           Licensee which in
                                           accordance with the
                                           principles set out in Part
                                           C of Schedule 3A fall to
                                           be treated as excluded
                                           services.

<PAGE>


          "HV units"                       means units (other
                                           than EHV units)
                                           distributed by the
                                           Licensee which are
                                           delivered to premises
                                           connected to the
                                           Licensee's Distribution
                                           System at a voltage at or
                                           higher than 1000 volts.

          "LV units"                       means units
                                          distributed by the
                                          Licensee which are
                                          delivered to premises
                                          connected to the
                                          Licensee's Distribution
                                          System at a voltage less
                                          than 1000 volts.

          "LV1 units"                     means LV units which are distributed
                                          by the Licensee outside
                                          night-time periods to  Domestic
                                          Premises or small premises (other
                                          than Domestic Premises) where the
                                          appropriate use of system charges
                                          apply different rates in night-time
                                          periods as opposed to other times of
                                          day,  for the avoidance of doubt
                                          including the use of system charges
                                          under the tariffs specified in
                                          paragraph D2 of Part D of Schedule 3A.

          "LV2 units"                     means LV units
                                          which are distributed by
                                          the Licensee to Domestic
                                          Premises or small premises
                                          (other than Domestic
                                          Premises):

                                          (a)     during night-time  periods,
                                                  where the appropriate use
                                                  of system charges apply
                                                  different rates in night-time
                                                  periods as opposed to other
                                                  times of the day; or


                                          (b)     where the appropriate use of
                                                  system charges are
                                                  incorporated into tariffs
                                                  which restrict availability
                                                  of supply to specified
                                                  off-peak periods,
<PAGE>


                                          for the avoidance of doubt
                                          including the use of
                                          system charges under the
                                          tariffs specified in
                                          paragraph D3 of Part D of
                                          Schedule 3A.

          "LV3 units"                     means LV units
                                          other than LV1 and LV2
                                          units, for the avoidance
                                          of doubt including units
                                          distributed under the
                                          tariffs specified in
                                          paragraph D4 of Part D of
                                          Schedule 3A.

          "maximum average charge per     means the charge  calculated in
           unit distributed"              accordance  with the formula in
                                          paragraph 1 of Condition 3A.

          "metered"                       means, in relation to any quantity
                                          distributed,  as measured by
                                          a meter installed for such
                                          purpose or (where no such
                                          meter is installed or it
                                          is not reasonably
                                          practicable to measure the
                                          quantity by such meter) as
                                          otherwise reasonably
                                          calculated.


          "0.1 MW customer"               means any customer other than an over
                                          0.1 MW  customer in its capacity as
                                          such.

          "0.1 MW premises"               means any premises other than over
                                          0.1 MW premises.

         "over 0.1 MW customer"           means a customer supplied at over 0.1
                                          MW premises,  but shall not include
                                          such customer insofar as supplied at
                                          0.1 MW premises.

          "over 0.1 MW premises"          means premises at which the average
                                          of the maximum  monthly demands in
                                          the three months of highest maximum
                                          demand in any period of twelve
                                          consecutive months commencing on or
                                          after January 1993 exceeds one tenth
                                          of a megawatt.
<PAGE>


          "regulated distribution
           unit category"                 means as the
                                          case may be HV units or
                                          LV1 units or LV2 units or
                                          LV3 units.

          "regulated quantity             means the aggregate quantity of units
           distributed"                   distributed  (both for the Supply
                                          Business of the Licensee and on
                                          behalf of third parties under use of
                                          system) by the Licensee through  the
                                          Licensee's  Distribution  System in
                                          relevant year t metered at
                                          exit points on leaving the Licensee's
                                          Distribution System but excluding for
                                          this purpose:


                                          (a)     units distributed for the
                                                  purpose of supply to premises
                                                  outside the Licensee's
                                                  authorised area; and


                                          (b)      EHV units.

          "relevant year"                 means a financial year commencing on
                                          or after 1st April 1990.

          "relevant year t"               means that relevant year for the
                                          purposes of which any
                                          calculation falls to be
                                          made; "relevant year t-1"
                                          means the relevant year
                                          preceding relevant year t
                                          or, in respect of the
                                          period prior to 1st April
                                          1990, the period of 12
                                          calendar months commencing
                                          on 1st April 1989; and
                                          similar expressions shall
                                          be construed accordingly.

<PAGE>


          "remote transmission asset
           rental"                        means any rent or other
                                          periodic payment payable
                                          by the Distribution
                                          Business of the Licensee
                                          to the Transmission
                                          Company in respect of
                                          remote transmission assets
                                          forming part of the
                                          Licensee's Distribution
                                          System.

          "sixth relevant year"           means the relevant year commencing
                                          1st April 1995.

          "transmission connection
          point charges"                  means charges levied by the
                                          Transmission Company as connection
                                          charges by direct
                                          reference to the number or
                                          nature of the connections
                                          between the Licensee's
                                          Distribution System and
                                          the transmission system
                                          and payable by the
                                          Distribution Business of
                                          the Licensee.

          "unit"                          means a kilowatt hour.



<PAGE>



Condition 3A. Restriction of distribution charges

Basic Formula

 1.      Without prejudice to Condition 3D the Licensee shall in setting its
         charges for the provision of distribution services use its best
         endeavours to ensure that in any relevant year the average charge per
         unit distributed shall not exceed the maximum average charge per unit
         distributed calculated in accordance with the following formula:

                                [OBJECT OMITTED]


2.       For the purposes of paragraph 1, Mdt means the maximum average charge
         per unit distributed in relevant year t.


Formula for Pdt as used in paragraph 1

3.       For the purposes of paragraph 1, Pdt is derived from the following
         formula:


                        Pdt =  ( (PU+PM). GRt.PIDt) + (PL.(ALt-Lt).PILt)
                                 ------------------------------------------
                                                Dt




         where:


         PU     means the amount set against that term in the part of Annex A
                to this  Condition  that applies to the Licensee.


         PM     means the amount set against  that term in the part of Annex A
                to this  Condition  that  applies to the Licensee.


         GRt    is derived from the following formula:



                       [GRAPHIC OMITTED]




<PAGE>



                  where for the relevant year beginning 1st
                  April 1995 GRt-1 equals 1.

         (SIGMA) means the summation across all regulated distribution unit
                 categories i.

         Poi    means in respect of each regulated
                distribution unit category i set out in
                column 1 under that term in the part of
                Annex A to this Condition that applies to
                the Licensee the value opposite that
                category in column 2.

         Dit    means that number of units in each regulated distribution unit
                category i distributed in relevant  year t.


         Dit-1  means that number of units in each regulated  distribution
                unit category i distributed in relevant year t-1.


         Cdt    means a notional figure, representing the
                number of customers in the authorised area
                defined (for the purpose of this term Cdt
                only) for each relevant year, given in the
                table appearing under that term in the part
                of Annex A to this Condition that applies to
                the Licensee.

         Cdt-1 means the number equal to Cdt in relevant year t-1.

         PIDt  is derived from the following formula:






                                           [GRAPHIC OMITTED]



<PAGE>


                                    where, for the relevant year beginning 1st
                                    April 1995, PIDt-1 equals 1.

         RPIt                       means the percentage change (whether of a
                                    positive or a negative value) in the
                                    arithmetic average of the Retail Price Index
                                    numbers published or determined with respect
                                    to each of the six months July to December
                                    (inclusive) in relevant year t-1 and the
                                    arithmetic average of the Retail Price Index
                                    numbers published or determined with respect
                                    to the same months in relevant year t-2.

         Xdt                        for any relevant year beginning on or afte
                                    1 April 1997, shall equal 3.


         PL                         means an amount equal to 3.0656p.


         ALt                        means an amount (in units) representing
                                    allowed  distribution losses in relevant
                                    year t, being the allowed percentage of the
                                    adjusted  units  distributed (calculated as
                                    provided in paragraph E5 of Part E of
                                    Schedule  3A) where in respect of each
                                    relevant  year t, the allowed  percentage
                                    shall equal that percentage which the
                                    aggregate of adjusted distribution losses
                                   (calculated as provided in paragraphs E2 to
                                    E5 of Part E of Schedule 3A) over the
                                    preceding  relevant  years  (commencing
                                    with the  twelve-month  period from 1st
                                    April 1989,  or, if the number of preceding
                                    relevant years exceeds nine, relevant year
                                    t-10) bears to the aggregate of adjusted
                                    units distributed  (calculated
                                    as  aforesaid)  over  the  corresponding
                                    relevant years:  save  that for this
                                    purpose adjusted distribution  losses in
                                    respect of the twelve-month period from 1st
                                    April 1989 shall be derived by applying the
                                    initial  relevant loss  percentage
                                    (calculated  as provided in paragraphs E6
                                    to E8 of Part E of Schedule 3A) to the
                                    adjusted units distributed in that period.


                                       5
<PAGE>

         Lt                         means in respect of relevant year t,
                                    adjusted grid supply point purchases less
                                    adjusted units distributed (calculated as
                                    provided in paragraphs E2 to E5 of Part E of
                                    Schedule 3A).

         PILt                       is derived from the following formula:



                                           [GRAPHIC OMITTED]



                                    where, for the relevant year beginning 1st
                                    April 1995, PILt-1 equals 1.

         Dt                         means the regulated quantity distributed in
                                    relevant year t.

Formula for PNdt as used in paragraph 1

4.       For the purposes of Paragraph 1, in the ninth and subsequent relevant
         years the term PNdt shall be calculated in accordance with the
         following formula:

                                [OBJECT OMITTED]


         and for each relevant year t prior to the ninth relevant year PNdt
shall be 0.

          where:




<PAGE>


         PS                         means an amount equal to (pound)4.87 million
                                    for each of the ninth to the thirteenth
                                    relevant years, and thereafter shall be 0.

         PR                         means, in the ninth and all subsequent
                                    relevant years, the amount given under that
                                    heading in Annex B to this Condition.


         PIRt                       is derived from the following formula:


                                [OBJECT OMITTED]


                                    where for the ninth relevant year PIRt-1
                                    equals 1


         TAdt in respect of any relevant year t, is derived from the following
formula:

                                [OBJECT OMITTED]


                                    save that TA shall be a figure not less than
                                    0, and shall for each relevant year t prior
                                    to the ninth relevant year be 0.

         where:


         [OBJECT OMITTED]           means a summation across all the months Mx
                                    to My in each relevant year.


         Mx                         means, in the ninth relevant year, the month
                                    commencing 1st July 1998, and means in each
                                    subsequent relevant year the month
                                    commencing 1st April in such relevant year.


<PAGE>

         My                         means, in each relevant year, the mont
                                    commencing 1st March in such relevant year.


         Psd means the amount given under that heading in Annex B to this
Condition.

         Cmn                        means, in respect of each month Mx to My in
                                    the ninth and each subsequent relevant year,
                                    a proportion of the total number of 0.1MW
                                    customers within the authorised area
                                    (expressed as a figure => -1 and <= 1) to be
                                    calculated by reference to the first day of
                                    such month in accordance with the following
                                    formula:

                                [OBJECT OMITTED]


         where:


         N                        means a figure equal to:


                                  (a)    in respect of the months commencing
                                         1st July 1998, 1st August 1998 and
                                         1st September 1998, the amount given
                                         under that heading in Annex B to
                                         this Condition;

                                  (b)   in respect of the months commencing
                                        1st October 1998, 1st November 1998
                                        and 1st December 1998, 0.5; and


                                  (c)   in respect of the month commencing 1st
                                        January 1999 and all subsequent
                                        months, 1.


         SC                         in respect of the first day of each relevant
                                    month, means a proportion of the total
                                    number of 0.1MW customers within the
                                    authorised area (expressed as a figure => 0
                                    and <= 1), being customers who may be
                                    supplied by a Second Tier Supplier on such
                                    date in accordance with any direction or
                                    variation of a direction issued by the
                                    Director (and not subsequently withdrawn or
                                    varied) pursuant to condition 3 of that
                                    Supplier's licence to supply electricity.

<PAGE>

         GAdt                       shall in the ninth relevant year, where the
                                    earliest date specified (and not
                                    subsequently withdrawn or varied to a later
                                    date) in any direction or variation of a
                                    direction issued by the Director, pursuant
                                    to condition 3 of the licence held by any
                                    Second Tier Supplier, in relation to the
                                    supply of electricity to any premises:

                                    (a)      is in April 1998, be 0;


                                    (b)      is in May 1998, be the amount
                                             given for that month under the
                                             heading GAdt in Annex B to this
                                             Condition;


                                    (c)      is in June 1998, be the amount
                                             given for that month under that
                                             heading; or


                                    (d)      is in July 1998 or any subsequent
                                             month, be the amount given for
                                             July under that heading,


                                    and shall in each relevant year t other than
                                    the ninth relevant year be 0.

Formula for Kdt as used in Paragraph 1

5.       For the purposes of paragraph 1, Kdt means the correction factor per
         unit (whether of a positive or a negative value) to be applied to the
         average charge per unit distributed in relevant year t (subject to
         paragraph 3 of Condition 3B) and is derived from the following formula:

<PAGE>


                                [GRAPHIC OMITTED]



         provided that:     notwithstanding the above, the value of Kdt
                            for the sixth relevant year shall be that
                            value required by Condition 3A in the
                            licence in the form in force on 31 March
                            1995.


         where:


         Rdt-1              means the distribution revenue in relevant year t-1.

         Dt-1               means the regulated quantity distributed in relevant
                            year t-1.

         Mdt-1              means maximum average charge per unit distributed
                            in relevant year t-1.

         Idt                means that interest rate in relevant year t
                            which is equal to, where Kdt (taking no
                            account of Id for this purpose) has a
                            positive value, the average specified rate
                            plus 4, or where Kdt (taking no account of
                            Id for this purpose) has a negative value,
                            the average specified rate.

6.       In this Condition, any term defined for the purposes of paragraph 1
         shall have the same meaning in all paragraphs of this Condition.





<PAGE>


ANNEX A to Condition 3A

Distribution values specific to individual companies

EASTERN ELECTRICITY plc

                                                     (pound)m

         PU                                          327.4
         PM                                          36.0
         Cdt

                                                     '000s

         relevant year beginning on

                  1 April 1994                       3073
                  1 April 1995                       3107
                  1 April 1996                       3152
                  1 April 1997                       3196
                  1 April 1998                       3241
                  1 April 1999                       3286
         every subsequent relevant year     3286
P0i

                  1                                  2
         unit category i                             value (p)
         ---------------                             ---------
                  LV1                                2.0009
                  LV2                                0.3031
                  LV3                                1.3431
                  HV                                 0.4584


<PAGE>

EAST MIDLANDS ELECTRICITY plc

                                                     (pound)m

         PU                                          271.6
         PM                                          30.2
         Cdt

                                                     '000s

         relevant year beginning on

                  1 April 1994                       2248
                  1 April 1995                       2272
                  1 April 1996                       2297
                  1 April 1997                       2321
                  1 April 1998                       2346
                  1 April 1999                       2371
         every subsequent relevant year     2371
P0i

                  1                                  2
         unit category i                             value (p)
         ---------------                             ---------
                  LV1                                1.6131
                  LV2                                0.5557
                  LV3                                1.5711
                  HV                                 0.6350

                                       11
<PAGE>

LONDON ELECTRICITY plc

                                                     (pound)m

         PU                                          260.9
         PM                                          31.0
         Cdt

                                                     '000s

         relevant year beginning on

                  1 April 1994                       1955
                  1 April 1995                       1974
                  1 April 1996                       1986
                  1 April 1997                       1998
                  1 April 1998                       2010
                  1 April 1999                       2022
         every subsequent relevant year     2022
P0i

                  1                                  2
         unit category i                             value (p)
         ---------------                             ---------
                  LV1                                2.2073
                  LV2                                0.4057
                  LV3                                1.5912
                  HV                                 0.5932

                                       12
<PAGE>

MANWEB plc

                                                     (pound)m

         PU                                          178.2
         PM                                          21.6
         Cdt

                                                     '000s

         relevant year beginning on

                  1 April 1994                       1354
                  1 April 1995                       1366
                  1 April 1996                       1378
                  1 April 1997                       1391
                  1 April 1998                       1403
                  1 April 1999                       1415
         every subsequent relevant year     1415
P0i

                  1                                  2
         unit category i                             value (p)
         ---------------                             ---------
                  LV1                                2.1041
                  LV2                                0.4323
                  LV3                                1.7558
                  HV                                 0.5097



<PAGE>


MIDLANDS ELECTRICITY plc

                                                     (pound)m

         PU                                          267.2
         PM                                          31.2
         Cdt

                                                     '000s

         relevant year beginning on

                  1 April 1994                       2210
                  1 April 1995                       2231
                  1 April 1996                       2251
                  1 April 1997                       2271
                  1 April 1998                       2291
                  1 April 1999                       2311
         every subsequent relevant year     2311
P0i

                  1                                  2
         unit category i                             value (p)
         ---------------                             ---------
                  LV1                                1.9729
                  LV2                                0.3966
                  LV3                                1.6108
                  HV                                 0.5992

NORTHERN ELECTRIC plc

                                                     (pound)m

         PU                                          176.2
         PM                                          22.2
         Cdt


<PAGE>

                                                     '000s

         relevant year beginning on

                  1 April 1994                       1446
                  1 April 1995                       1456
                  1 April 1996                       1466
                  1 April 1997                       1476
                  1 April 1998                       1486
                  1 April 1999                       1496
         every subsequent relevant year     1496
P0i

                  1                                  2
         unit category i                             value (p)
         ---------------                             ---------
                  LV1                                2.0911
                  LV2                                0.3273
                  LV3                                1.9284
                  HV                                 0.4723

NORWEB plc

                                                     (pound)m

         PU                                          254.5
         PM                                          28.8
         Cdt

                                                     '000s


<PAGE>

         relevant year beginning on

                  1 April 1994                       2170
                  1 April 1995                       2182
                  1 April 1996                       2196
                  1 April 1997                       2209
                  1 April 1998                       2223
                  1 April 1999                       2236
         every subsequent relevant year     2236
P0i

                  1                                  2
         unit category i                             value (p)
         ---------------                             ---------
                  LV1                                2.1750
                  LV2                                0.2821
                  LV3                                1.6304
                  HV                                 0.5335

SEEBOARD plc

                                                     (pound)m

         PU                                          203.0
         PM                                          29.2
         Cdt

                                                     '000s


<PAGE>

         relevant year beginning on

                  1 April 1994                       1982
                  1 April 1995                       1997
                  1 April 1996                       2031
                  1 April 1997                       2030
                  1 April 1998                       2046
                  1 April 1999                       2062
         every subsequent relevant year     2062
P0i

                  1                                  2
         unit category i                             value (p)
         ---------------                             ---------
                  LV1                                1.8735
                  LV2                                0.3213
                  LV3                                1.4098
                  HV                                 0.5892

SOUTHERN ELECTRIC plc

                                                     (pound)m

         PU                                          304.4
         PM                                          35.7
         Cdt



<PAGE>

                                                     '000s

         relevant year beginning on

                  1 April 1994                       2576
                  1 April 1995                       2602
                  1 April 1996                       2633
                  1 April 1997                       2664
                  1 April 1998                       2695
                  1 April 1999                       2727
         every subsequent relevant year     2727
P0i

                  1                                  2
         unit category i                             value (p)
         ---------------                             ---------
                  LV1                                2.0600
                  LV2                                0.3816
                  LV3                                1.4815
                  HV                                 0.5560

SOUTH WALES ELECTRICITY plc

                                                     (pound)m

         PU                                          142.2
         PM                                          17.6
         Cdt

                                                     '000s

<PAGE>

         relevant year beginning on

                  1 April 1994                       952
                  1 April 1995                       959
                  1 April 1996                       966
                  1 April 1997                       974
                  1 April 1998                       982
                  1 April 1999                       990
         every subsequent relevant year     990
P0i

                  1                                  2
         unit category i                             value (p)
         ---------------                             ---------
                  LV1                                2.4442
                  LV2                                0.3641
                  LV3                                2.2009
                  HV                                 0.7272

SOUTH WESTERN ELECTRICITY plc

                                                     (pound)m

         PU                                          186.3
         PM                                          22.4
         Cdt

                                                     '000s


<PAGE>

         relevant year beginning on

                  1 April 1994                       1287
                  1 April 1995                       1299
                  1 April 1996                       1313
                  1 April 1997                       1327
                  1 April 1998                       1341
                  1 April 1999                       1355
         every subsequent relevant year     1355
P0i

                  1                                  2
         unit category i                             value (p)
         ---------------                             ---------
                  LV1                                2.3889
                  LV2                                0.6679
                  LV3                                1.8707
                  HV                                 0.5072

YORKSHIRE ELECTRICITY GROUP plc

                                                     (pound)m

         PU                                          249.7
         PM                                          27.9
         Cdt

                                                     '000s


<PAGE>

         relevant year beginning on

                  1 April 1994                       2036
                  1 April 1995                       2051
                  1 April 1996                       2065
                  1 April 1997                       2080
                  1 April 1998                       2094
                  1 April 1999                       2109
         every subsequent relevant year     2109
P0i

                  1                                  2
         unit category i                             value (p)
         ---------------                             ---------
                  LV1                                1.9497
                  LV2                                0.3271
                  LV3                                1.6654


<PAGE>

<TABLE>
<CAPTION>

ANNEX B to Condition 3A

Values for paragraph 4 of this Condition


                       R(pound)M        Psd(pound)M  N-1.7.98       GAdt(pound)M         GAdt(pound)M    GAdt(pound)M
                                                     to 1.9.98      May             June                 July

<S>                          <C>           <C>           <C>              <C>            <C>                        <C>
EASTERN                      4.46          0.99          0.105            0.21           0.78                       1.78
EAST MIDLANDS                3.53          0.67          0.106            0.15           0.57                       1.29
LONDON                       3.21          0.63          0.108            0.13           0.49                       1.12
MANWEB                       2.53          0.43          0.086            0.09           0.34                       0.77
MIDLANDS                     3.51          0.70          0.091            0.15           0.56                       1.28
NORTHERN                     2.64          0.42          0.101            0.10           0.36                       0.83
NORWEB                       3.42          0.67          0.081            0.15           0.54                       1.23
SEEBOARD                     3.23          0.60          0.106            0.14           0.50                       1.14
SOUTHERN                     3.96          0.85          0.107            0.18           0.67                       1.52
SWALEC                       2.07          0.31          0.109            0.06           0.23                       0.53
SOUTH WESTERN                2.48          0.48          0.107            0.09           0.33                       0.74
YORSHIRE                     3.28          0.57          0.105            0.14           0.51                       1.16
SCOTTISH POWER               3.01          0.67          0.096            0.12           0.45                       1.02
HYDRO-ELECTRIC               1.74          0.29          0.162            0.04           0.16                       0.36

</TABLE>


<PAGE>



Condition 3B. Restriction of distribution charges: adjustments

1.       If, in respect of any relevant year, the average charge per unit
         distributed exceeds the maximum average charge per unit distributed by
         more than 3 per cent, the Licensee shall furnish an explanation to the
         Director and in the next following relevant year the Licensee shall not
         effect any increase in charges unless it has demonstrated to the
         reasonable satisfaction of the Director that the average charge per
         unit distributed would not be likely to exceed the maximum charge per
         unit distributed in that next following relevant year.

2.       If, in respect of any two successive relevant years, the sum of the
         amounts by which the average charge per unit distributed has exceeded
         the maximum average charge per unit distributed is more than 4 per
         cent, then in the next following relevant year the Licensee shall, if
         required by the Director, adjust its charges such that the average
         charge per unit distributed would not be likely, in the judgment of the
         Director, to exceed the maximum average charge per unit in that next
         following relevant year.

3.       If, in respect of two successive relevant years, the average charge per
         unit distributed is less than 90 per cent of the maximum average charge
         per unit distributed, the Director, after consultation with the
         Licensee, may direct that in calculating Kdt for the purposes of
         paragraph 1 of Condition 3A in respect of the next following relevant
         year, there shall be substituted for Rdt-1 in the formula at paragraph
         5 of Condition 3A such figure as the Director may specify being not
         less than Rdt-1 and not more than 0.90 (Dt-1.Mdt-1).


<PAGE>



Condition 3C. Information to be provided to the Director in connection with the
distribution charge restriction conditions
-------------------------------------------------------------------------------


1.       Where the Licensee is intending to make any change in charges for the
         provision of distribution services regulated under Condition 3A the
         Licensee shall (unless otherwise agreed by the Director) not later than
         the date of publication of such charges provide the Director with:

(a)               a written forecast of the maximum average charge per unit
                  distributed, together with its components, in respect of the
                  relevant year t in which such a change is to take effect and
                  in respect of the next following relevant year t+1; and

(b)               a written estimate of the maximum average charge per unit
                  distributed, together with its components, in respect of the
                  relevant year t-1 immediately preceding the relevant year in
                  which the change is to take effect unless a statement
                  complying with paragraph 7 in respect of relevant year t-1 has
                  been furnished to the Director before the publication of the
                  proposed change.

2.       Where, at any time during the eighth relevant year, the Licensee
         intends to change the principles of attribution or any provisional
         attribution specified in a statement already made to the Director, the
         change or the provisional attribution shall be specified in a written
         statement signed by a person authorised to sign the statement by the
         directors of the Licensee which statement shall not provide for a
         retrospective change of principles or for any re-attribution of
         payments already made or any payment where the event giving rise to
         that payment has already occurred.

3.       If within three months of the commencement of any relevant year t the
         Licensee has not made any such change in charges as is referred to in
         paragraph 1, the Licensee shall provide the Director with a written
         forecast of the maximum average charge per unit distributed, together
         with its components, in respect of the relevant year t.



<PAGE>

4.       The Director may issue directions providing that any forecast or
         estimate provided in accordance with paragraphs 1, 2 or 3 shall be
         accompanied by such information as regards the assumptions underlying
         the forecast or estimate as may be necessary to enable the Director to
         be satisfied that the forecast or estimate has been properly prepared
         on a consistent basis.

5.       Subject as provided in sub-paragraph (b) below, not later than six
         weeks after the commencement of each relevant year t, the Licensee
         shall send to the Director a statement as to:

(a)               whether or not the provisions of Condition 3B are likely to be
                  applicable in consequence of the average charge per unit
                  distributed in the preceding relevant year t-1 or the two
                  preceding relevant years t-1 and t-2; and

(b)               its best estimate as to the relevant correction factor Kdt to
                  be applied in calculating the maximum average charge per unit
                  distributed in respect of the relevant year t.

6.       Not later than 15 January in the ninth and tenth relevant years the
         Licensee shall send to the Director a written estimate of the value of
         the term TA for that year (TAdt), together with an estimate of the
         value of each of its component parts, as detailed in paragraph 4 of
         Condition 3A.

7.       Not later than three months after the end of a relevant year the
         Licensee shall send the Director a statement, in respect of that
         relevant year, showing the specified items referred to in paragraph 9.

8.       The statement referred to in the preceding paragraph shall be:


        (a)       accompanied by a report from the Auditors that in their
                  opinion (i) such statement fairly presents each of the
                  specified items referred to in paragraph 9 in accordance with
                  the requirements of the distribution charge restriction
                  conditions and (ii) the amounts shown in respect of each of
                  those specified items are in accordance with the Licensee's
                  accounting records which have been maintained in respect of
                  each of the relevant Separate Businesses in accordance with
                  Condition 71; and
<PAGE>


        (b)       certified by a director of the Licensee on behalf of the
                  Licensee that to the best of his knowledge, information and
                  belief having made all reasonable enquiries:

                  (i) there is no amount included in its calculations under
                      Condition 3A and Schedule 3A which represents other than:

                      (aa)   bona fide consideration for the provision of
                             distribution services in the course of its
                             Distribution Business; or


                      (bb)   an amount permitted under the distribution charge
                             restriction conditions to be so included;


                (iii)      there is no amount included in its calculations of
                           allowed security costs under Condition 3D which
                           represents other than an amount permitted under the
                           distribution charge restriction conditions to be so
                           included;

                (iv)        no service has been treated as an excluded service
                           which was not properly so treated and no amount
                           included in the revenues in respect thereof
                           represents other than bona fide consideration for the
                           provision of the excluded service to which it
                           relates; and

                (v)        all amounts which should properly be taken into
                           account for the purposes of the distribution charge
                           restriction conditions have been taken into account.

9.       The specified items to be contained in the statement referred to in
          paragraph 7 shall be the following:


         (a)    the regulated quantity distributed;

<PAGE>

         (b)    the quantity distributed in each regulated distribution unit
                category;


        (c)    the average charge per unit distributed;


        (d)    the amount in respect of the Terms ALt and Lt, in paragraph 3 of
               Condition 3A calculated as therein provided;


        (e)    the value of the term TAdt,  together with the value of each of
               its component  parts,  as detailed in paragraph 4 of Condition
               3A;

        (f)     the information referred to at paragraph 8 of Condition 3D; and


        (g)      the statements and information referred to in paragraph A5,
                 B2, D1 and E10 of Schedule 3A


         provided that the statement to be provided in the ninth relevant year
         in respect of the immediately preceding relevant year shall contain the
         information required by paragraph 10 of Condition 3E of the Licence in
         the form in force on 31 March 1998.

10.      Where the Director issues directions in accordance with paragraph 9 of
         Condition 3D or paragraphs A6, B3, C8, D5 or E11 of Schedule 3A then
         such directions shall not have effect from a date earlier than the
         commencement of the relevant year to which the statement last furnished
         to the Director pursuant to paragraph 7 prior to the issue of the
         directions related, unless such statement (or the accompanying report
         or certificate under paragraph 8) or any statement, report or
         certificate in respect of an earlier relevant year was incorrect or was
         misleading in any material respect.

11.      Where the Director issues such directions as are referred to in the
         preceding paragraph the Director may require the Licensee to provide a
         revised statement in respect of such of the specified items as may be
         affected by the directions, and the Licensee shall comply with such
         request.


<PAGE>



Condition 3D. Distribution Business allowance in respect of security costs

1.       At any time during a security period, the Licensee may give notice in
         writing to the Director suspending, with effect from the date of
         receipt of the notice by the Director, application of such of the
         distribution charge restriction conditions as may be specified in the
         notice for the unexpired term of the security period.

2.       At any time during a security period, the Director may (having regard
         to his duties under the Act) by means of directions:


(a)      suspend or modify for the unexpired term of the security period the
         distribution charge restriction conditions or any part or parts
         thereof; or


(b)      introduce for the unexpired term of the security period new
         distribution charge restriction conditions


        in either case, so as to make such provision as in the opinion
        or estimation of the Director is requisite or appropriate:

        (i)       to enable the Licensee to recover by means of
                  increased charges an amount estimated as being equal
                  to the Licensee's allowed security costs during such
                  period; and

        (ii)      to ensure that such part of the amount referred to in
                  sub-paragraph (i) above as is estimated as being
                  equal to the allowed security costs incurred by the
                  Licensee as costs in its Distribution Business are
                  recovered by means of appropriate equitable increases
                  on the charges made by the Licensee in its
                  Distribution Business

       and the Licensee shall comply with the terms of any directions so issued.

<PAGE>

3.       At any time following a security period, the Director may (following
         such consultation with the Licensee and others as the Director may
         consider appropriate) issue directions suspending or modifying the
         distribution charge restriction conditions or any part or parts thereof
         or replacing such directions as may have been made during the security
         period and introducing such new distribution charge restriction
         conditions as in the opinion of the Director are appropriate in all the
         circumstances (including at the Director's discretion an appropriate
         adjustment having regard to any profit gained or foregone by the
         Licensee during the security period), and the Licensee shall comply
         with any directions so issued.

4.       At any time within three months after the issue of directions by the
         Director under paragraph 3, the Licensee may serve on the Director a
         disapplication request in respect of such of the distribution charge
         restriction conditions or any part or parts thereof as are specified in
         the request.

5.       If within three months of the receipt by the Director of the
         disapplication request referred to in paragraph 4, the Director has
         either not agreed in writing to such disapplication request or has not
         made a reference to the Competition Commission under Section 12 of the
         Act relating to the modification of the distribution charge restriction
         conditions, the Licensee may deliver one month's written notice to the
         Director terminating the application of the distribution charge
         restriction conditions (or any part or parts thereof) as were specified
         in the disapplication request.

6.       Subject to paragraphs 7 and 9, the Licensee shall in any relevant year
         be entitled to recover an aggregate amount equal to its allowed
         security costs in that year or (insofar as not previously recovered)
         any previous year, by means of appropriate equitable increases on the
         charges made by the Licensee in its Distribution Business.

7.       Paragraph 6 shall not apply in so far as such allowed security costs:


        (a)      were otherwise recovered by the Licensee; or

<PAGE>

(b)               were taken into account by the Director in setting
                  distribution charge restriction conditions by means of
                  directions issued under paragraph 3.

8.       The Licensee shall following the end of each relevant year provide to
         the Director, as being one of the specified items to be contained in
         the statement referred to at paragraph 8 of Condition 3C, details in
         respect of that relevant year of:

        (a)      the amount of the Licensee's allowed security costs; and

        (b)      the aggregate amounts charged under paragraph 6 on account of
                 the Licensee's allowed security costs; and


        (c)      the bases and calculations  underlying  the increases in
                 charges made by the Licensee in its  Distribution  Business
                 under paragraph 6.


9.       Where the Director is satisfied that the Licensee has recovered amounts
         in excess of the allowed security costs, the Director may issue
         directions requiring the Licensee to take such steps as may be
         specified to reimburse purchasers from the Distribution Business for
         the excess amounts charged to them, and the Licensee shall comply with
         any directions so issued provided that if the excess amounts relate to
         allowed security costs paid to any authorised electricity operator, the
         Licensee shall not be obliged to make any such reimbursement unless and
         until it has recovered such costs from the relevant authorised
         electricity operator.

10.      No amounts charged by the Licensee under this Condition (whether or not
         subsequently required to be reimbursed) shall be taken into account for
         the purpose of applying the distribution charge restriction provisions
         of Condition 3A.

11.      In this Condition:


         "allowed security cost"  shall have the meaning ascribed to that
                                  term in the Fuel Security Code.
<PAGE>


         "security period"       means a period commencing on the date on which
                                 any direction issued by the Secretary of State
                                 under Section  34(4)(b) of the Act enters
                                 effect and terminating on the date (being not
                                 earlier than the date such direction, as
                                 varied,  is revoked or expires) as the
                                 Director,  after  consultation  with
                                 such persons  (including without  limitation,
                                 licence holders liable to be principally
                                 affected) as he shall consider appropriate,
                                 may with the consent of the Secretary of State
                                 by  notice to all licence holders determine
                                 after having regard to the views of
                                 such persons.



<PAGE>



Condition 3E. Duration of distribution charge restriction conditions

1.       The distribution charge restriction conditions shall apply so long as
         this licence continues in force but shall cease to have effect (in
         whole or in part, as the case may be) if the Licensee delivers to the
         Director a disapplication request made in accordance with paragraph 2
         and:

        (a)    the Director agrees in writing to the disapplication request; or


        (b)    their application (in whole or in part) is terminated by notice
               given by the Licensee in accordance  with either  paragraph 4
               or paragraph 5.


2.       A disapplication request pursuant to this Condition shall (a) be in
         writing addressed to the Director, (b) specify the distribution charge
         restriction conditions (or any part or parts thereof) to which the
         request relates and (c) state the date from which the Licensee wishes
         the Director to agree that the specified charge restriction conditions
         shall cease to have effect.

3.       Save where the Director otherwise agrees, no disapplication following
         delivery of a disapplication request pursuant to this Condition shall
         have effect earlier than that date which is the later of:

        (a)    a date being not less than 18 months after delivery of the
               disapplication request; and


        (b)    31 March 2000.


4.       If the Director has not made a reference to the Competition Commission
         under Section 12 of the Act relating to the modification of the
         distribution charge restriction conditions before the beginning of the
         period of 12 months which will end with the disapplication date, the
         Licensee may deliver written notice to the Director terminating the
         application of such charge restriction conditions (or any part or parts
         thereof) as are specified in the disapplication request with effect
         from the disapplication date or a later date.

<PAGE>


5.       If the Competition Commission makes a report on a reference made by the
         Director relating to the modification of the distribution charge
         restriction conditions (or any part or parts thereof) specified in the
         disapplication request and such report does not include a conclusion
         that the cessation of such charge restriction conditions, in whole or
         in part, operates or may be expected to operate against the public
         interest, the Licensee may within 30 days after the publication of the
         report by the Director in accordance with Section 13 of the Act deliver
         to him written notice terminating the application of such charge
         restriction conditions with effect from the disapplication date or
         later.

6.       A disapplication request or notice served under this Condition may be
         served in respect of a specified geographic area.





<PAGE>



Condition 4. Prohibition of cross-subsidies

1.       The Licensee shall procure that the Distribution Business does not give
         any cross-subsidy to, or receive any cross-subsidy from, any other
         business of the Licensee or an affiliate or related undertaking of the
         Licensee (whether or not a Separate Business).


<PAGE>



Condition 5. Basis of charges for use of system, connection to system and
Metering and Data Services: requirements for transparency
-----------------------------------------------------------------------------

1.       The Licensee shall as soon as practicable prepare statements in a form
         approved by the Director setting out the basis upon which charges will
         be made for the provision of:

        (a)      use of system; and


        (b)      connections to the Licensee's Distribution System


         in each case in such form and with such detail as shall be necessary to
         enable any person to make a reasonable estimate of the charges to which
         he would become liable for the provision of such services, and (without
         prejudice to the foregoing) including the information set out in
         paragraphs 3 and 4 respectively.

2.       The Licensee shall as soon as practicable prepare statements in a form
         approved by the Director setting out the basis upon which charges will
         be made for the provision of each of the Metering and Data Services, in
         each case in such form and with such detail as shall be necessary to
         enable any person to make a reasonable estimate of the charges to which
         he would become liable for the provision of such service and of the
         other terms, likely to have a material impact on the conduct of his
         business, upon which the service would be provided and (without
         prejudice to the foregoing) including the information set out in
         paragraph 5.

3.       The statement referred to at sub-paragraph 1(a) shall include:


        (a)      a schedule of charges for the distribution of electricity
                 under use of system;

        (b)      a schedule of adjustment factors to be made in respect of
                 distribution losses,  in the form of additional supplies
                 required to cover those distribution losses;

<PAGE>

        (c)      the methods by which and the  principles  on which the charges
                 (if any) for  availability  of  distribution  capacity on the
                 Licensee's Distribution System will be made; and


        (d)      save to the extent that such matters are included in any
                 statement prepared in accordance with paragraph 2:


                (i)      a schedule of charges in respect of meter reading,
                         accounting and administrative services; and


                (ii)       a schedule of the charges (if any) which may be made
                           for the provision and installation of any meters or
                           electrical plant at entry or exit points, the
                           provision and installation of which is ancillary to
                           the grant of use of system, and for the maintenance
                           of such meters or electrical plant.

4.       The statement referred to at sub-paragraph 1(b) shall include (save to
         the extent that such matters are included in any statement prepared in
         accordance with paragraph 2):

        (a)       a schedule listing those items (including the carrying out of
                  works and the provision and installation of electric lines or
                  electrical plant or meters) of significant cost liable to be
                  required for the purpose of connection (at entry or exit
                  points) to the Licensee's Distribution System for which
                  connection charges may be made or levied and including (where
                  practicable) indicative charges for each such item and (in
                  other cases) an explanation of the methods by which and the
                  principles on which such charges will be calculated;

        (b)       the methods by which and the principles on which any charges
                  will be made in respect of extension or reinforcement of the
                  Licensee's Distribution System rendered (in the Licensee's
                  discretion) necessary or appropriate by virtue of providing
                  connection to or use of system to any person seeking
                  connection;
<PAGE>

        (c)       the methods by which and the principles on which connection
                  charges will be made in circumstances where the electric lines
                  or electrical plant to be installed are (at the Licensee's
                  discretion) of greater size or capacity than that required for
                  use of system by the person seeking connection;

        (d)       the methods by which and the principles on which any charges
                  (including any capitalised charge) will be made for
                  maintenance, repair, and replacement required of electric
                  lines, electrical plant or meters provided and installed for
                  making a connection to the Licensee's Distribution System;

        (e)       the methods by which and principles on which any charges will
                  be made for the provision of special metering or telemetry or
                  data processing equipment by the Licensee for the purposes of
                  enabling any person which is party to the Pooling and
                  Settlement Agreement to comply with its obligations in respect
                  of metering thereunder, or for the performance by the Licensee
                  of any service in relation thereto; and

        (f)       the methods by which and principles on which any charges will
                  be made for disconnection from the Licensee's Distribution
                  System and the removal of electrical plant, electric lines and
                  ancillary meters following disconnection.

5.       The statements referred to at paragraph 2 shall include a schedule of
         charges for each of the Metering and Data Services, together with an
         explanation of the methods by which and the principles on which such
         charges will be calculated.

6.       Use of system charges for those items referred to in paragraph 3 shall
         be determined on the same basis as is applied by the Licensee when
         determining the use of system element of tariffs fixed pursuant to
         Section 18 of the Act and Condition 33.

7.       Connection  charges for those  items  referred  to in  paragraph  4
         shall be set at a level which will enable the  Licensee to
         recover:

<PAGE>

        (a)       the appropriate proportion of the costs directly or indirectly
                  incurred in carrying out any works, the extension or
                  reinforcement of the Licensee's Distribution System or the
                  provision and installation, maintenance, repair, and
                  replacement or (as the case may be) removal following
                  disconnection of any electric lines, electrical plant or
                  meters; and

        (b)      a reasonable rate of return on the capital represented by such
                 costs.


8.       The Director may, upon the written request of the Licensee, issue a
         direction relieving the Licensee of its obligations under paragraph 2
         to such extent and subject to such terms and conditions as he may
         specify in that direction.

9.       The Licensee shall not in setting its charges for or in setting the
         other terms that will apply to the provision of any of the Metering and
         Data Services restrict, distort or prevent competition in the
         generation, distribution or supply of electricity or in the provision
         of meter operation, data retrieval, data processing or data aggregation
         services.

10.      If so requested and subject to paragraphs 11 and 16, the Licensee
         shall, as soon as practicable and in any event within 28 days (or where
         the Director so approves such longer period as the Licensee may
         reasonably require having regard to the nature and complexity of the
         request) after the date referred to in paragraph 17 give or send to any
         person making such request a statement showing present and future
         circuit capacity, forecast power flows and loading on the part or parts
         of the Licensee's Distribution System specified in the request and
         fault levels for each distribution node covered by the request and
         containing:

        (a)       such further information as shall be reasonably necessary to
                  enable such person to identify and evaluate the opportunities
                  available when connecting to and making use of the part or
                  parts of the Licensee's Distribution System specified in the
                  request; and

        (b)       if so requested, a commentary prepared by the Licensee
                  indicating the Licensee's views as to the suitability of the
                  part or parts of the Licensee's Distribution System specified
                  in the request for new connections and the distribution of
                  further quantities of electricity.
<PAGE>


11.      The Licensee shall include in every  statement  given or sent under
         paragraph 10 the  information  required by that paragraph
         except that the Licensee may:


        (a)       with the prior consent of the Director omit from any such
                  statement any details as to circuit capacity, power flows,
                  loading or other information, disclosure of which would, in
                  the view of the Director, seriously and prejudicially affect
                  the commercial interests of the Licensee or any third party;
                  and

        (b)       omit information the disclosure of which would place the
                  Licensee in breach of Condition 14.


12.      The Licensee may periodically review the information set out in and,
         with the approval of the Director, alter the form of the statements
         prepared in accordance with paragraphs 1 and 2 and shall, at least once
         in every year this Licence is in force, make any necessary revisions to
         such statements in order that the information set out in the statements
         shall continue to be accurate in all material respects.

13.      The Licensee shall send a copy of the statements prepared in accordance
         with paragraphs 1 and 2, and of each revision of such statements in
         accordance with paragraph 12, to the Director.

14.      The Licensee shall give or send a copy of the statements prepared in
         accordance with paragraphs 1 and 2, or (as the case may be) of the
         latest revision of such statements in accordance with paragraph 12, to
         any person who requests a copy of such statement or statements.

15.      The Licensee may make a charge for any statement given or sent pursuant
         to paragraph 14 of an amount which shall not exceed the amount
         specified in directions issued by the Director for the purposes of this
         Condition based on the Director's estimate of the Licensee's reasonable
         costs of providing such a statement.

<PAGE>


16.      The Licensee may within 10 days after receipt of the request provide an
         estimate of its reasonable costs in the preparation of any statement
         referred to in paragraph 10, and its obligation to provide such
         statement shall be conditional on the person requesting such statement
         agreeing to pay the amount estimated or such other amount as the
         Director may, upon application of the Licensee or the person requesting
         such statement, direct.

17.      For the purposes of paragraph 10, the date referred to shall be the
         latest of:


        (a)      the date of receipt of the request referred to in paragraph
                 10; or


        (b)       the date on which the Licensee receives agreement from the
                  person making the request to pay the amount estimated or such
                  other amount as is determined by the Director (as the case may
                  be) under paragraph 16.

18.      The Licensee shall, not less than 5 months prior to the date on which
         it proposes to amend its use of system charges in respect of any
         agreement for use of system, send to the Director a notice setting out
         the Licensee's proposals in relation to such amendment together with an
         explanation of the proposed amendment (including a statement of any
         assumptions on which such proposals are based), and the Licensee shall
         send a copy of such notice to any person who has entered into an
         agreement for use of system under Condition 5B.

19.      Except with the prior consent of the Director, the Licensee shall not
         amend its use of system charges in respect of any agreement for use of
         system save to the extent that it has given prior notice of the
         amendment in accordance with paragraph 18 and such amendment reflects
         the proposals made in the notice (subject only to revisions consequent
         upon material changes in the matters which were expressed, in the
         statement which accompanied the notice, to be assumptions on which the
         proposals were based).


<PAGE>



Condition 5A. Non-discrimination in the provision of use of system, connection
to system and Metering and Data Services
----------------------------------------------------------------------------



1.       In the carrying out of works for the purpose of connection to the
         Licensee's Distribution System, in providing for the retention of a
         connection to its Distribution System, or in the provision of any of
         the Metering and Data Services, the Licensee shall not discriminate:

        (a)      between any persons or class or classes of persons; or


        (b)       as between the Licensee (in the provision of connections or
                  Metering and Data Services by the Licensee as part of its
                  Distribution Business to itself for the purpose of its Supply
                  or Second Tier Supply Business) and any person or class or
                  classes of persons.

2.       In the provision of use of system the Licensee shall not discriminate:


        (a)      between any Authorised Electricity Operators or class or
                 classes thereof; or


        (b)       as between the Licensee (in the provision of use of system by
                  the Licensee as part of its Distribution Business to itself
                  for the purpose of its Supply or Second Tier Supply Business)
                  and any Authorised Electricity Operator or class or classes
                  thereof.

3.       Without prejudice to paragraphs 1 and 2, and subject to the provisions
         of Condition 5,  the Licensee shall not:


        (a)       make charges for the provision of use of system to any
                  Authorised Electricity Operator or class or classes thereof
                  which differ from the charges for such provision:

                 (i)     to any other Authorised Electricity Operator or to any
                         class or classes thereof; or

<PAGE>

                (ii)     to the Licensee (in the  provision of use of system
                         by the Licensee as part of its Distribution Business
                         to itself for the purposes of the Supply Business or
                         the Second Tier Supply Business); or


        (b)       make charges for the provision of any of the Metering and Data
                  Services to any person or class or classes thereof which
                  differ from the charges for such provision:

                (i)      to any other person or class or classes of person; or


                (ii)       to the Licensee (in the provision of such Metering
                           and Data Services by the Licensee as part of its
                           Distribution Business to itself for the purposes of
                           the Supply Business or the Second Tier Supply
                           Business)

        except in so far as such differences reasonably reflect differences in
        the costs associated with such provision.

4.      The Licensee shall not in setting its charges for use of system
        restrict,  distort or prevent competition in the generation,
        distribution or supply of electricity.





<PAGE>



Condition 5B. Requirement to offer terms for use of system, connection and the
provision of Metering and Data Services
-------------------------------------------------------------------------------



1.       On application  made by any Authorised  Electricity  Operator the
         Licensee shall (subject to paragraph 10) offer to enter into
         an agreement for use of system:


        (a)    to accept into the Licensee's Distribution System at such
               entry point or points and in such quantities as may be
               specified in the application, electricity to be provided by or
               on behalf of such Authorised Electricity Operator; and/or

        (b)    to distribute such quantities of electricity as are referred
               to in sub-paragraph (a) (less any distribution losses) at such
               exit point or points on the Licensee's Distribution System and
               to such person or persons as the Authorised Electricity
               Operator may specify; and

        (c)   containing (where appropriate) the provisions referred to in
              paragraph 2 of Condition 22;


        (d)    including terms requiring and entitling the Authorised
               Electricity Operator to act (where appropriate) as agent of
               the Licensee in order to procure an agreement on the Standard
               Terms of Connection between the Licensee and each customer of
               the Authorised Electricity Operator at premises which are to
               be supplied with electricity through an established
               connection; and

        (e)    where the applicant is an Exempt Supplier, requiring such
               Exempt Supplier either to enter into an agreement with the
               Licensee for exempt supply services or to enter into an
               equivalent agreement with another Electricity Supplier.

2.       On application made by any person, the Licensee shall (subject to
         sub-paragraphs 10(a) and (b)) offer to enter into an agreement for the
         provision of a connection or for the modification of an existing
         connection to the Licensee's Distribution System and such offer shall
         make detailed provision regarding:
<PAGE>


        (a)       the carrying out of works (if any) required to connect the
                  Licensee's Distribution System to any other system for the
                  transmission or distribution of electricity, and for the
                  obtaining of any consents necessary for such purpose;

        (b)       the carrying out of works (if any) in connection with the
                  extension or reinforcement of the Licensee's Distribution
                  System rendered (in the Licensee's discretion) appropriate or
                  necessary by reason of making the connection or modification
                  to an existing connection and for the obtaining of any
                  consents necessary for such purpose;

        (c)      (save to the extent that such matters are included in any
                  agreement offered in accordance with paragraph 3) the
                  installation of appropriate meters (if any) required to enable
                  the Licensee to measure electricity being accepted into the
                  Licensee's Distribution System at the specified entry point or
                  points or leaving such system at the specified exit point or
                  points; and

        (d)       the installation of such switchgear or other apparatus (if
                  any) as may be required for the interruption of supply where
                  the person seeking connection or modification of an existing
                  connection does not require the provision by the Licensee of
                  top-up or standby supplies or sales of electricity;

        (e)       (save to the extent that such matters are included in any
                  agreement offered in accordance with paragraph 3) the
                  installation of special metering, telemetry or data processing
                  (if any) for the purpose of enabling any person which is party
                  to the Pooling and Settlement Agreement to comply with its
                  obligations in respect to metering or the performance by the
                  Licensee of any service in relation to such metering
                  thereunder.
<PAGE>

3.       On application made by any private electricity supplier, or in the case
         of sub-paragraphs (a) and (b) by any person, the Licensee shall
         (subject to sub-paragraph 10(a)) offer to enter into an agreement for
         the provision within its authorised area of such of the following
         services as may be required:

        (a)      the  provision  of metering equipment whether, at the
                 discretion  of the  Licensee, by way of sale, hire or loan
                 ("meter provision services");


        (b)      the installation, commissioning, testing, repair and
                 maintenance of metering equipment ("meter operation services");


        (c)      the retrieval and verification of meter reading data from
                 electricity meters and the delivery of such data to any
                 relevant person for the purpose of data processing ("data
                 retrieval services");

        (d)      the:


                (i)     processing, validation and (where necessary) estimation
                        of meter reading data; and


                (ii)    creation, processing and validation of data in respect
                        of the consumption  of  electricity at premises which
                        receive an unmetered supply,


                  and in each case the  delivery  of such data to any relevant
                  person  for the  purpose  of data  aggregation  ("data
                  processing services"); and


        (e)        the collation and summation of meter reading data (whether
                  actual or estimated) and of data in respect of the consumption
                  of electricity at premises which receive an unmetered supply,
                  and the delivery of such data to any relevant person for
                  settlement purposes ("data aggregation services").

<PAGE>


4.       On application made by any Electricity Supplier the Licensee shall
         (subject to sub-paragraph 10(a)) offer to provide metering point
         administration services within its authorised area pursuant to and in
         accordance with the Master Registration Agreement.

5.       On application made by any person the Licensee shall (subject to
         sub-paragraph 10(a)) offer to enter into an agreement for the provision
         of data transfer services.

6.       In making an offer pursuant to this Condition to enter into any
         agreement, the Licensee shall set out:


        (a)      the date by which:


                (i)     in the case of an agreement under paragraph 3, 4 or 5,
                        the services required shall be provided; or


                (ii)     in the case of an agreement under paragraph 2, any
                         works required to permit access to the Licensee's
                         Distribution System (including for this purpose any
                         works to reinforce or extend the Licensee's
                         Distribution System) shall be completed

                (in each case, unless otherwise agreed between parties, time
                 being of the essence);


        (b)      the charges to be paid in respect of the services required,
                 such charges (unless manifestly inappropriate):


                (i)      to be presented in such a way as to be referable to
                         the statements prepared in accordance with paragraphs
                         1 and 2 of Condition 5 or any revision thereof;


                (ii)     to be set in conformity with the requirements of
                         Condition 5; and

<PAGE>

                (iii)    in the case of an agreement under paragraph 2,
                         additionally to be set in conformity with the
                         requirements of paragraph 7; and


        (c)      such other detailed terms in respect of each of the services
                 required as are or may be appropriate for the purpose of the
                 agreement.


7.       For the purpose of determining an appropriate proportion of the costs
         directly or indirectly incurred in carrying out works under an
         agreement for making a connection or modification to an existing
         connection, the Licensee shall have regard to:

        (a)       the benefit (if any) to be obtained or likely in the future to
                  be obtained by the Licensee or any other person as a result of
                  the carrying out of such works whether by reason of the
                  reinforcement or extension of the Licensee's Distribution
                  System or the provision of additional entry or exit points on
                  such system or otherwise;

        (b)       the ability or likely future ability of the Licensee to
                  recoup a proportion of such costs from third parties; and


        (c)       the principles that:


                (i)        no charge will normally be made for reinforcement of
                           the existing Distribution System if the new or
                           increased load requirement does not exceed 25 per
                           cent of the existing effective capacity at the
                           relevant points on the system; and

                (ii)       charges will not generally take into account system
                           reinforcement carried out at more than one voltage
                           level above the voltage of connection.

8.       The Licensee shall offer terms for agreements in accordance with
         paragraphs 1 to 5 as soon as practicable and (save where the Director
         consents to a longer period) in any event not more than the period
         specified in paragraph 9 after receipt by the Licensee (or its agent)
         from any person of an application containing all such information as
         the Licensee may reasonably require for the purpose of formulating the
         terms of the offer.

<PAGE>


9.       For the purposes of paragraph 8, the period specified shall be:


        (a)      in the case of persons seeking the provision of any service
                 under paragraphs 3 to 5, or use of system only, 28 days;


        (b)      in the case of persons seeking connection or a modification to
                 an existing connection, 3 months; and


        (c)      in the case of persons seeking use of system in conjunction
                 with connection, 3 months.


10.      The Licensee shall not be obliged pursuant to this Condition to offer
          to enter or to enter into any agreement:


        (a)      under paragraphs 1 to 5, if to do so would be likely to
                 involve the Licensee being:


(i)      in breach of its duties under section 9 of the Act;


                (ii)       in breach of the Electricity Supply Regulations 1988
                           or of any regulations made under section 29 of the
                           Act or of any other enactment relating to safety or
                           standards applicable in respect to the Distribution
                           Business;

                (iii)      in breach of the Grid Code or the Distribution Code;
                           or


                (iv)       in breach of the Conditions;


        (b)       under paragraph 1 or 2, if the person making the application
                  does not undertake to be bound, in so far as applicable, by
                  the terms of the Distribution Code or the Grid Code from time
                  to time in force; or
<PAGE>

        (c)      under paragraph 1, if the person making the application
                 ceases to be an Authorised Electricity Operator.


11.      The Licensee shall within 28 days following receipt of a request from
         any person, give or send to such person such information in the
         possession of the Licensee as may be reasonably required by such person
         for the purpose of completing paragraph 8 of Part 1 and paragraphs 2(v)
         and (vi) of Part 2 of Schedule 2 to The Electricity (Application for
         Licences and Extensions of Licences) Regulations 1990 or such
         provisions to like effect contained in any further regulations then in
         force made pursuant to sections 6(3), 60 and 64(1) of the Act.

12.      The Licensee shall undertake each of the services referred to in
         paragraphs 3 to 5 in the most efficient and economic manner practicable
         having regard to the alternatives available and the other requirements
         of this Licence and of the Act in so far as they relate to the
         provision of those services.

13.      In the provision of any of the services  referred to in paragraphs 3
         to 5 the Licensee shall not restrict,  distort or prevent
         competition in the supply of electricity.


14.      The services referred to in paragraphs 3 to 5 shall collectively be
         described as Metering and Data Services.





<PAGE>



Condition 5C. Requirement to offer Standard Terms of Connection

1.       The Licensee shall, within 28 days after this Condition has come into
         force, prepare and submit to the Director for his approval the standard
         terms of an agreement (the "Standard Terms of Connection") to provide,
         as between the Licensee and any customer, for the retention of an
         established connection at premises which are to be supplied with
         electricity through such a connection.

2.       The Licensee may, subject to the approval of the Director, prepare
         different Standard Terms of Connection for different cases or classes
         of customer or premises, clearly identifying the criteria used to
         distinguish between such cases or classes.

3.       The Licensee shall from time or time, and whenever requested to do so
         by the Director, review the Standard Terms of Connection with a view to
         determining whether any revision should be made to such terms, and in
         the course of the review the Licensee shall consult with the Relevant
         Consumers' Committee, all other public electricity suppliers and all
         Second Tier Suppliers which supply electricity within the authorised
         area.

4.       At the conclusion of any review in accordance with paragraph 3 the
         Licensee shall submit to the Director:


        (a)       a proposal for the revision of the Standard Terms of
                  Connection (or, where the Licensee considers it appropriate in
                  all the circumstances, a proposal that no revision should be
                  made to the Standard Terms of Connection); and

        (b)       the reasons for its proposal, together with a summary of
                  responses received from such parties as were consulted by the
                  Licensee.

5.       A proposal made by the Licensee in accordance with paragraph 4 shall
         require to be approved by the Director and, following such approval in
         writing, the Licensee shall accordingly revise (or, as the case may be,
         shall make no revision to) the Standard Terms of Connection.

<PAGE>


6.       The Licensee shall, in such manner as will in the opinion of the
         Licensee secure adequate publicity therefor:


        (a)      publish,  no later than 31 December  1997,  the  Standard
                 Terms of  Connection  approved by the Director in  accordance
                 with paragraph 1; and


        (b)       publish, within 21 days after receiving the approval of the
                  Director, any revision to the Standard Terms of Connection in
                  accordance with paragraph 5.

7.       The Licensee may at any time agree with any person (by way of variation
         to the Standard Terms of Connection) terms for the retention of a
         particular established connection which differ from the Standard Terms
         of Connection where such different terms are appropriate in all the
         circumstances.

8.       The Licensee shall not do anything to prevent the conclusion of an
         agreement on the Standard Terms of Connection between itself and a
         customer of any Authorised Electricity Operator which is acting as
         agent for the Licensee in accordance with an agreement for use of
         system.


<PAGE>



Condition 5D. Functions of the Director

1.       If, after a period which appears to the Director to be reasonable for
         the purpose, the Licensee has failed to enter into an agreement with
         any person entitled or claiming to be entitled thereto pursuant to a
         request under Condition 5B or Condition 5C, the Director may, on the
         application of such person or the Licensee, settle any terms of the
         agreement in dispute between the Licensee and that person in such
         manner as appears to the Director to be reasonable having (in so far as
         relevant) regard in particular to the following considerations:

        (a)      that such person should pay to the Licensee:


                (i)      in the case of provision of use of system,  the use of
                         system charges  determined in accordance with
                         paragraph 6 of Condition 5; and

                (ii)     in the case of provision of a connection or a
                         modification to an existing connection to the system,
                         the whole or an appropriate proportion (as determined
                         in accordance with paragraph 7 of Condition 5B) of
                         the costs referred to in sub-paragraph 7(a) of
                         Condition 5, together with a reasonable rate of
                         return on the capital represented by such costs;

                (iii)    in the case of provision of any of the Metering and
                         Data Services, the whole or the appropriate
                         proportion of such sum as is determined in accordance
                         with paragraph 9 of Condition 5;

        (b)      that the performance by the Licensee of its  obligations
                 under the  agreement should not cause it to be in breach of
                 those provisions referred to at sub-paragraph 10(a) of
                 Condition 5B;
<PAGE>


        (c)       that any methods by which the Licensee's Distribution System
                  is connected to any other system for the transmission or
                  distribution of electricity accord (in so far as applicable to
                  the Licensee) with the Distribution Code and with the Grid
                  Code; and

        (d)       that the terms and conditions of the agreement so settled by
                  the Director and of any other agreements entered into by the
                  Licensee pursuant to a request under Condition 5B or Condition
                  5C should be, so far as circumstances allow, in as similar a
                  form as is practicable.

2.       In so far as any person entitled or claiming to be entitled to an offer
         under Condition 5B or Condition 5C wishes to proceed on the basis of
         the agreement as settled by the Director, the Licensee shall forthwith
         enter into and implement such agreement in accordance with its terms.

3.       If either party to such agreement proposes to vary the contractual
         terms of any agreement for use of system, for the provision of a
         connection or for the modification of an existing connection to the
         Licensee's Distribution System, for the retention of an established
         connection to such Distribution System, or for the provision of any of
         the Metering and Data Services entered into pursuant to Condition 5B,
         Condition 5C or this Condition in any manner provided for under such
         agreement, the Director may, at the request of that party, settle any
         dispute relating to such variation in such manner as appears to the
         Director to be reasonable.

4.       The Director may (following consultation with the Licensee) issue
         directions relieving the Licensee of its obligations under Condition 5B
         relating to Metering and Data Services in respect of such parts of that
         Condition and to such extent as may be specified in the directions.


<PAGE>



Condition 6. Distribution system planning standard and quality of service

1.       The Licensee shall plan and develop the Licensee's Distribution System
         in accordance with a standard not less than that set out in Engineering
         Recommendation P.2/5 (October 1978 revision) of the Electricity Council
         Chief Engineers' Conference in so far as applicable to it or such other
         standard of planning as the Licensee may, following consultation (where
         appropriate) with the Transmission Company and any other Authorised
         Electricity Operator liable to be materially affected thereby and with
         the approval of the Director, adopt from time to time.

2.       The Licensee shall within 3 months after this Licence enters into force
         draw up and submit to the Director for his approval a statement setting
         out criteria by which the quality of performance of the Licensee in
         maintaining distribution system security and availability and quality
         of service may be measured.

3.       The Licensee shall within 2 months after the end of each financial year
         submit to the Director a report providing details of the performance of
         the Licensee during the previous financial year against the criteria
         referred to in paragraph 2.

4.       The Director may (following consultation with the Licensee and, where
         appropriate, with the Transmission Company and any other Authorised
         Electricity Operator liable to be materially affected thereby) issue
         directions relieving the Licensee of its obligation under paragraph 1
         in respect of such parts of the Licensee's Distribution System and to
         such extent as may be specified in the directions.


<PAGE>



Condition 7. Security and Safety of Supplies Enquiry Service

1.       The Licensee shall establish and operate an enquiry service for use by
         any person for the purposes of receiving reports and offering
         information, guidance or advice about any matter or incident that:

        (a)       causes danger or requires urgent attention, or is likely to
                  cause danger or require urgent attention, in relation to the
                  supply or distribution of electricity in the Licensee's
                  authorised area; or

        (b)      affects or is likely to affect  the  maintenance  of the
                 security,  availability  and  quality  of service of the
                 Licensee's Distribution System.


2.       The service established by the Licensee in accordance with paragraph 1
         shall:


        (a)      be provided without charge by the Licensee to the user at the
                 point of use;


        (b)      ensure that all reports and enquiries are processed in a
                 prompt and  efficient  manner  whether made by telephone, in
                 writing or in person;


        (c)      be available to receive and process telephone reports and
                 enquiries at all times on every day of each year; and


        (d)      be operational no later than 31 March 1998.


3.       In the establishment and operation of the enquiry service in accordance
         with paragraph 1 the Licensee shall not discriminate:


(a)      between any persons or class or classes thereof; or
<PAGE>


        (b)       between the Licensee (in the provision of such services by the
                  Licensee as part of its Distribution Business to itself for
                  the purpose of its Supply Business) and any private
                  electricity supplier or any customer thereof.

4.       In the establishment and operation of the enquiry service in accordance
         with paragraph 1 the Licensee shall not restrict, distort or prevent
         competition in the supply of electricity.

5.       The Licensee shall by 1 January 1998 prepare and submit to the Director
         for his approval a statement setting out details of the service to be
         provided in accordance with paragraph 1, and the Licensee shall,
         following the Director's approval, give or send a copy of such
         statement to any person requesting it.

6.       The Licensee shall give to the Director notice of any amendments it
         proposes to make to the statement prepared under paragraph 5, and shall
         not make such amendments until either:

        (a)      a period of one month from the date of the notice has expired;
                 or


        (b)      prior to the expiry of such period, the Licensee has obtained
                 the written approval of the Director to the amendments.


7.       The Licensee shall take steps to inform each Authorised Electricity
         Operator which uses the service of any change to the address or
         telephone number of the service established in accordance with
         paragraph 1 as soon as is practicable prior to such change becoming
         effective.


<PAGE>



Condition 8. Provision of information about theft, damage and meter interference

1.       Where a person other than the Licensee is the owner of any electrical
         plant, electric lines or meter the Licensee shall, as soon as is
         reasonably practicable, inform that person of any incident where it has
         reason to believe:

        (a)      there has been damage to such electrical plant, electric line
                 or meter; or


        (b)       there has been interference with the meter to alter its
                  register or prevent it from duly registering the quantity of
                  electricity supplied.

2.       Where the Licensee, in the course of providing services on behalf of
         its Distribution Business to any other person supplying electricity to
         premises within the authorised area, has reason to believe that:

        (a)      there has been  damage to any  electrical  plant,  electric
                 line or meter  through  which such premises are supplied with
                 electricity; or


        (b)       there has been interference with the meter through which such
                  premises are supplied to alter its register or prevent it from
                  duly registering the quantity of electricity supplied

the Licensee shall, as soon as reasonably practicable, inform that person of the
incident in question.


<PAGE>



Condition 9. Provisions relating to the connection of metering equipment

1.       On application made by any person the Licensee shall, subject to
         paragraph 5, offer to enter into an agreement authorising that person
         to connect metering equipment to the Licensee's Distribution System.

2.       In making an offer to enter into an agreement specified in paragraph 1,
         the Licensee shall set out:


        (a)      the date from which the applicant is authorised to undertake
                 connections;


        (b)      the procedures to be adopted by the applicant when making
                 connections,  with  particular  regard to those relating to
                 safety; and

        (c)      such other detailed terms as are or may be appropriate for the
                 purposes of the agreement.


3.       The Licensee shall offer terms for agreements in accordance with
         paragraph 1 as soon as practicable and (save where the Director
         consents to a longer period) in any event not more than 28 days after
         receipt by the Licensee from any person of an application containing
         all such information as the Licensee may reasonably require for the
         purpose of formulating the terms of the offer.

4.       In the offering of the terms in accordance with paragraph 1, the
         Licensee shall not show undue preference to or exercise undue
         discrimination against any person or class of persons.

5.       The Licensee shall not be obliged pursuant to this Condition to offer
         to enter or to enter into any agreement:

<PAGE>

        (a)      (in respect of non-half-hourly metering equipment) which comes
                 into effect prior to 1 April 2000; or


        (b)      where to do so would be likely to cause the Licensee to be in
                 breach of those provisions  referred to at sub-paragraph 10(a)
                 of Condition 5B.


6.       If, after a period which appears to the Director to be reasonable for
         the purpose, the Licensee has failed to enter into an agreement with
         any person entitled or claiming to be entitled thereto pursuant to a
         request under this Condition, the Director may, on the application of
         such person or the Licensee, settle any terms of the agreement in
         dispute between the Licensee and that person in such manner as appears
         to the Director to be reasonable.

7.       In so far as any person entitled or claiming to be entitled to an offer
         under this Condition wishes to proceed on the basis of the agreement as
         settled by the Director, the Licensee shall forthwith enter into and
         implement such agreement in accordance with its terms.

8.       If the Licensee or other party to such agreement proposes to vary the
         terms of any agreement entered into pursuant to this Condition in any
         manner provided for under such agreement, the Director may, at the
         request of the Licensee or other party to such agreement, settle any
         dispute relating to such variation in such manner as appears to the
         Director to be reasonable.


<PAGE>



Condition 10. Generation Security Standard

1.       The Licensee shall make arrangements sufficient to meet the generation
         security standard.


2.       The duty imposed by paragraph 1 shall be discharged either by the
         Licensee complying with the provisions of paragraph 3 below or by the
         making by the Licensee of such other arrangements as may have been
         previously approved in writing for the purpose by the Director.

3.       The Licensee may discharge the duty imposed by paragraph 1 by for so
         long as the relevant condition is met, and save by reason of planned
         maintenance undertaken on the Licensee's Distribution System or in
         circumstances of force majeure affecting either the Licensee's
         Distribution System or the quantities of electricity delivered into
         that system, not:

        (a)      making voltage reductions outside statutory limits; or


        (b)      interrupting or reducing supplies to any qualifying customer


         otherwise than as instructed pursuant to the Grid Code by the
         Transmission Company or in accordance with the Distribution Code.

4.       The relevant condition referred to in paragraph 3 is that there should
         at any relevant time be electricity available to be purchased under the
         terms of the Pooling and Settlement Agreement at a price less than the
         ceiling price.

5.       The Licensee shall upon request by the Director provide to the Director
         such information as the Director may require for the purpose of
         monitoring compliance with this Condition and to enable the Director
         (having regard to his statutory duties) to review the operation of the
         generation security standard.
<PAGE>

6.       The  provisions  of this  Condition  are  without prejudice to the
         duties of the  Licensee  under the  Electricity  Supply
         Regulations 1988.


7.       In this Condition:


         "ceiling                                  price" means such price as
                                                   would be equal to the Pool
                                                   Selling Price in
                                                   circumstances where the
                                                   corresponding Pool Purchase
                                                   Price was an amount equal to
                                                   the Value of Lost Load.

         "generation security standard"            means such standard of
                                                   generation security as will
                                                   ensure that:

                                                   (a)      the supply of
                                                            electricity to
                                                            qualifying customers
                                                            will not be
                                                            discontinued in
                                                            more than 9 years in
                                                            any 100 years; and

                                                   (b)      the voltage or
                                                            frequency of
                                                            electricity supplied
                                                            to qualifying
                                                            customers will not
                                                            be reduced below
                                                            usual operational
                                                            limits in more than
                                                            30 years in any 100
                                                            years

                                                   by reason of insufficiency of
                                                   electricity generation
                                                   available for the purposes of
                                                   supply by the Licensee to its
                                                   qualifying customers at times
                                                   of annual system peak demand.

         "Pool Purchase Price" and "Pool Selling
                                                   shall each have the meaning
                                                   from time to time ascribed
                                                   Price" to them in Schedule 9
                                                   to the Pooling and Settlement
                                                   Agreement.

<PAGE>


         "qualifying customer"                     means any purchaser
                                                   from the Licensee entitled
                                                   and requiring at any time to
                                                   be supplied by the Licensee
                                                   at premises within the
                                                   authorised area of the
                                                   Licensee but shall exclude:

                                                   (a)      a contract purchaser
                                                            under an
                                                            interruptible
                                                            contract or a
                                                            contract containing
                                                            load management
                                                            terms to the extent
                                                            that supplies to
                                                            that purchaser may
                                                            be interrupted or
                                                            reduced in
                                                            accordance with the
                                                            terms of that
                                                            contract; and

                                                   (b)      a tariff customer on
                                                            special tariffs
                                                            which restrict
                                                            supplies to
                                                            particular time
                                                            periods to the
                                                            extent that supplies
                                                            to that customer may
                                                            be interrupted or
                                                            reduced in
                                                            accordance with such
                                                            tariff.

         "Value of Lost Load"                      means in respect of the first
                                                   financial  year,  the sum
                                                   of(pound)2  per kWh  and, in
                                                   respect of each  succeeding
                                                   financial year, the sum which
                                                   corresponds to(pound)2 per
                                                   kWh as adjusted to reflect
                                                   the percentage change in the
                                                   Retail  Price Index between
                                                   the index published or
                                                   determined in respect to the
                                                   December  prior  to the
                                                   start of that financial year
                                                   and the index  published or
                                                   determined for December 1989.



<PAGE>



Condition 11. Distribution Code

1.       The Licensee shall in consultation with Authorised Electricity
         Operators liable to be materially affected thereby prepare and at all
         times have in force and shall implement and (subject to paragraph 10 of
         this Condition) comply with a Distribution Code:

        (a)       covering all material technical aspects relating to
                  connections to and the operation and use of the Licensee's
                  Distribution System or (in so far as relevant to the operation
                  and use of the Licensee's Distribution System) the operation
                  of electric lines and electrical plant connected to the
                  Licensee's Distribution System or the distribution system of
                  any Authorised Electricity Operator and (without prejudice to
                  the foregoing) making express provision as to the matters
                  referred to in paragraph 5 below; and

        (b)      which is designed so as:


                (i)      to permit the development, maintenance and operation
                         of an efficient, co-ordinated and economica  system
                         for the distribution of electricity; and


                (ii)     to facilitate competition in the generation and supply
                         of electricity.


2.       The Distribution Code in force at the date this Licence enters force
         shall be sent to the Director for his approval. Thereafter the Licensee
         shall (in consultation with Authorised Electricity Operators liable to
         be materially affected thereby) periodically review (including upon the
         request of the Director) the Distribution Code and its implementation.
         Following any such review, the Licensee shall send to the Director:

        (a)      a report on the outcome of such review; and

<PAGE>

        (b)       any proposed revisions to the Distribution Code from time to
                  time as the Licensee (having regard to the outcome of such
                  review) reasonably thinks fit for the achievement of the
                  objectives referred to in sub-paragraph 1 (b); and

        (c)       any written representations or objections from Authorised
                  Electricity Operators (including any proposals by such
                  operators for revisions to the Distribution Code not accepted
                  by the Licensee in the course of the review) arising during
                  the consultation process and subsequently maintained.

3.       Revisions to the  Distribution  Code  proposed by the Licensee and
         sent to the Director  pursuant to paragraph 2 shall require
         to be approved by the Director.


4.       Having regard to any written representations or objections referred to
         in sub-paragraph (c) of paragraph 2, and following such further
         consultation (if any) as the Director may consider appropriate, the
         Director may issue directions requiring the Licensee to revise the
         Distribution Code in such manner as may be specified in the directions,
         and the Licensee shall forthwith comply with any such directions.

5.       The Distribution Code shall include:


        (a)      a distribution planning and connection code containing:


                (i)        connection conditions specifying the technical,
                           design and operational criteria to be complied with
                           by any person connected or seeking connection with
                           the Licensee's Distribution System; and

                (ii)       planning conditions specifying the technical and
                           design criteria and procedures to be applied by the
                           Licensee in the planning and development of the
                           Licensee's Distribution System and to be taken into
                           account by persons connected or seeking connection
                           with the Licensee's Distribution System in the
                           planning and development of their own plant and
                           systems; and
<PAGE>

        (b)       a distribution operating code specifying the conditions under
                  which the Licensee shall operate the Licensee's Distribution
                  System and under which persons shall operate their plant
                  and/or distribution systems in relation to the Licensee's
                  Distribution System, in so far as necessary to protect the
                  security and quality of supply and safe operation of the
                  Licensee's Distribution System under both normal and abnormal
                  operating conditions.

6.       The Licensee shall give or send a copy of the Distribution Code (as
         from time to time revised) to the Director.


7.       The Licensee  shall  (subject to paragraph 8) give or send a copy of
         the  Distribution  Code (as from time to time revised) to
         any person requesting the same.


8.       The Licensee may make a charge for any copy of the Distribution Code
         (as from time to time revised) given or sent pursuant to paragraph 7 of
         an amount which will not exceed any amount specified for the time being
         for the purposes of this Condition in directions issued by the
         Director.

9.       In preparing, implementing and complying with the Distribution Code
         (including in respect of the scheduling of maintenance of the
         Licensee's Distribution System), the Licensee shall not unduly
         discriminate against or unduly prefer:

        (a)      any one or any group of persons; or


        (b)      the Licensee in the conduct of any business other than the
                 Distribution Business


         in favour of or as against any one other or any other group of persons.


10.      The Director may (following consultation with the Licensee) issue
         directions relieving the Licensee of its obligations under the
         Distribution Code in respect of such parts of the Licensee's
         Distribution System and to such extent as may be specified in the
         directions.

11.      Compliance with this Condition shall not require the Licensee to impose
         any contractual obligation on tariff customers to comply with the
         Distribution Code (as from time to time revised).


<PAGE>



Condition 12. The Metering Point Administration Service and the Master
Registration Agreement

1.       The Licensee  shall  establish,  and shall  subsequently  operate and
         maintain,  a service to be known as the Metering  Point
         Administration Service.


2.       The Metering Point Administration Service shall, within the authorised
         area, fulfil the following functions:


        (a)       the maintenance of such a register of technical and other data
                  as is necessary to facilitate supply by any Electricity
                  Supplier or Exempt Supplier to all premises within the
                  authorised area and to meet the reasonable requirements of
                  Electricity Suppliers in respect of such premises for
                  information for settlement purposes, including (where so
                  required):

                (i)      the identity of the Electricity Supplier responsible
                         under the Pooling & Settlement  Agreement for the
                         supply to each such premises;


                (ii)     the type of metering equipment installed at each such
                         premises; and


                (iii)    the address of each such premises;


        (b)      the amendment of the register  maintained in accordance  with
                 sub-paragraph  (a) to reflect changes of supplier in respect of
                 any premises;


        (c)      the provision,  in a timely and efficient manner, of such data
                 contained  in the register as is  reasonably  required and
                 requested to:


                (i)      any Electricity Supplier or agent thereof;

<PAGE>

                (ii)     any person identified in the Pooling and Settlement
                         Agreement  as an  appropriate person for the receipt
                         of data for settlement purposes; and


                (iii)      any person identified in the Master Registration
                           Agreement as entitled to such data for the purpose of
                           facilitating changes of supplier in respect of any
                           premises; and

        (d)       the maintenance of an enquiry service for the provision to any
                  customer of an Electricity Supplier, on request and free of
                  charge to that customer, of such data contained in the
                  register as is relevant to the supply of electricity to
                  premises which are (or are to be) owned or occupied by the
                  customer, and the taking of such steps as will in the opinion
                  of the Licensee secure adequate publicity for the operation of
                  the enquiry service.

3.       In fulfilling its obligation in accordance with paragraph 1 the
         Licensee shall not restrict, distort or prevent competition in the
         provision of meter operation, data retrieval, data processing, data
         aggregation or prepayment meter services.

4.       The Licensee shall use its best endeavours, in conjunction and
         co-operation with all other public electricity suppliers, to prepare a
         form of agreement to be known as the Master Registration Agreement.

5.       The Master Registration Agreement shall be an agreement made between:


        (a)      on the one part,  the Licensee and all other public
                 electricity  suppliers in their capacity as providers of
                 metering point administration services; and


        (b)       on the other part, all Electricity Suppliers who require the
                  provision of metering point administration services from at
                  least one public electricity supplier, together with such
                  other persons as are, for settlement purposes, appropriate
                  parties to the agreement
<PAGE>

         and shall comprise all the matters set out at paragraph 6.


6.       The Master Registration Agreement shall comprise:


        (a)       terms for the provision of metering point administration
                  services in accordance with the requirements of paragraph 2
                  and the equivalent requirements in the licences of all other
                  public electricity suppliers;

        (b)       provisions to facilitate,  and procedures and practices to be
                  followed by  Electricity  Suppliers in relation to changes of
                  Electricity Supplier in respect of any premises;


        (c)       a catalogue of definitions, flows and forms of such data as
                  may require to be transferred by or to parties to the Master
                  Registration Agreement, or as between any persons for
                  settlement purposes or for any related purposes (the "Data
                  Transfer Catalogue");

        (d)       arrangements for  the variation of the Master Registration
                  Agreement following consultation  with  the  parties,  or
                  representatives of the parties, to that agreement;


        (e)       provisions (which shall require to be approved in advance by
                  the Director) by virtue of which the whole or specified parts
                  of the Master Registration Agreement shall not be capable of
                  variation without the prior approval of the Director; and

        (f)       such other matters as are or may be appropriate for the
                  development, maintenance and operation of an efficient,
                  co-ordinated and economical system for the supply of
                  electricity and for the purpose of facilitating competition in
                  electricity supply.

7.       The Licensee shall be a party to and shall comply with the provisions
         of the Master Registration Agreement.





<PAGE>



Condition 13. Establishment of a Data Transfer Service

1.       The Licensee shall use its best endeavours, in conjunction and
         co-operation with all other public electricity suppliers:


        (a)      to establish, or to procure the establishment by a third party
                 of, a service to be known as the Data Transfer Service; and


        (b)       subsequently to operate and maintain, or to procure the
                  subsequent operation and maintenance by a third party of such
                  Data Transfer Service in accordance with the provisions of
                  this Condition.

2.       The Data Transfer Service shall:


        (a)      provide a network over which may be made all of the electronic
                 data transfers specified at paragraph 3;


        (b)      operate and maintain that network; and


        (c)       provide a connection to that network, on request, to any
                  person who is or will be a party to any of the electronic data
                  transfers specified at paragraph 3.

3.       The electronic data transfers specified at this paragraph are those
         which are reasonably required for any of the purposes set out at
         paragraph 4 and which are made between:

        (a)      a Metering Point  Administration  Service (MPAS)  Operator and
                 an Electricity  Supplier  (including the Licensee acting in the
                 course of its Supply Business) or any agent thereof;

<PAGE>

        (b)      an MPAS Operator and any person identified in the Pooling and
                 Settlement Agreement or the Settlement Agreement for Scotland
                 as an appropriate person for the receipt of data from the MPAS
                 Operator for settlement purposes;

        (c)      the Electricity Pool of England and Wales or Scottish
                 Electricity  Settlements  Limited  (or any agent  thereof)
                 and an Electricity Supplier (or any agent thereof);


        (d)      an Electricity Supplier (or any agent thereof) and another
                 Electricity Supplier (or any agent thereof);


        (e)      an Electricity Supplier and any of its agents;


        (f)      different agents of the same Electricity Supplier;


        (g)      public  electricity  suppliers  (or their  agents)  and
                 generators (or their  agents)  which are  parties to the
                 Settlement Agreement for Scotland; and


        (h)      Scottish Electricity Settlements Limited (or any agent
                 thereof) and generators which are parties to the Settlement
                 Agreement for Scotland.


4.       The purposes of this paragraph are:


        (a)      meeting obligations with respect to the transfer of data for
                 settlement purposes;


        (b)      communicating meter reading and meter standing data;


        (c)      facilitating the provision of metering point administration
                 services;


        (d)      communicating distribution use of system information; and


        (e)       fulfilling such other requirements relating to the transfer of
                  data as may be requisite for the supply of electricity to
                  customers and compliance by Electricity Suppliers with the
                  Master Registration Agreement.


<PAGE>

5.       The Data Transfer Service shall, where relevant, transmit data in a
         form which complies with the provisions of the Data Transfer Catalogue.

6.       In fulfilling its obligation under paragraph 1 the Licensee shall not,
         or (if appropriate) shall ensure that the third party shall not,
         restrict, distort or prevent competition in the provision of meter
         operation, data retrieval, data processing, data aggregation or
         prepayment meter services.

7.       Any obligation placed on the Licensee under Condition 5 to 5B and
         Condition 5D in respect of the provision of data transfer services
         shall (for the purposes of those Conditions) be treated as a
         requirement on the Licensee to use its best endeavours, in conjunction
         and co-operation with all other public electricity suppliers, to fulfil
         that obligation or to procure the fulfilment of that obligation by a
         third party, and Condition 5 to 5B and Condition 5D shall apply mutatis
         mutandis to the provision of data transfer services.

8.       Further, in relation to the provision of data transfer services the
         reference at paragraph 1 of Condition 5D to the Licensee failing to
         enter into an agreement shall be a reference to the Licensee, in
         conjunction with all other public electricity suppliers, failing to
         enter into or failing to procure that a third party enters into an
         agreement.

9.       In this Condition:


         "Metering Point Administration Service      means the Licensee or any
          (MPAS) Operator"                           other public electricity
                                                     supplier in its capacity
                                                     as a provider of metering
                                                     point administration
                                                     services.



<PAGE>




Condition 14. Restriction on use of certain information and independence of the
Distribution Business
-------------------------------------------------------------------------------

1.       Any information relating to or deriving from the management or
         operation of the Distribution Business shall, for the purposes of this
         Condition, be treated as confidential information.

2.       The Licensee shall not (and shall procure that its affiliates and
         related undertakings shall not) disclose or authorise access to
         confidential information:

        (a)       save to the extent provided by sub-paragraphs 3(b) to (d), to
                  such of its (or its affiliates' or related undertakings')
                  employees, agents, advisers, consultants or contractors as are
                  engaged in, or in respect of, the management or operation of
                  the Supply Business; or

        (b)      save to the extent permitted by paragraph 3, to any other
                 person.


3.       The Licensee shall (and shall procure that its affiliates and related
         undertakings shall) disclose or authorise access to confidential
         information only:

        (a)       to such of its (or its affiliates' or related undertakings')
                  employees, agents, advisers, consultants or contractors as are
                  engaged in, or in respect of, the management or operation of
                  the Distribution Business and require access to the
                  information for that purpose;

        (b)       where the  Licensee (or any  affiliate or related undertaking
                  of the  Licensee)  is required or permitted to disclose such
                  information by virtue of:


                (i)       any requirement of a Competent Authority;

<PAGE>

                (ii)      the conditions of any licence granted under the Act
                          or any document referred to in such a licence with
                          which it is required by virtue of the Act or that
                          licence to comply;

                (iii)     any other requirement of law; or


                (iv)      the rules of the Electricity Arbitration Association
                          or of any judicial or other arbitral  process or
                          tribunal of competent jurisdiction;


        (c)      where such information was provided by or relates to any
                 person who has notified (or otherwise agreed with) the
                 Licensee that it need not be treated as confidential; or


        (d)      where such information,  not being  information  provided by
                 or relating to any person other than the Licensee, is placed by
                 the Licensee in the public domain


         and in each case the Licensee shall disclose or authorise access to the
         confidential information only insofar as is necessary or appropriate in
         all the circumstances.

4.       The Licensee shall use all reasonable endeavours to ensure that any
         person who is in possession of or has access to confidential
         information in accordance with sub-paragraph 3(a) shall use such
         information only for the purposes of the Distribution Business.

5.       For the purpose of facilitating its compliance with paragraphs 1 to 4,
         the Licensee shall establish and shall thereafter maintain the full
         managerial and operational independence of the Distribution Business
         from:

        (a)      each other business (whether or not a Separate Business) of
                 the Licensee and of its affiliates and related undertakings;
                 and


        (b)      each other business of the Agent and of its affiliates and
                 related undertakings.

<PAGE>

6.       In order to facilitate its compliance with paragraphs 1 to 5, the
         Licensee shall ensure that:


        (a)       the Distribution Business is provided with such premises,
                  systems, equipment, facilities, property, personnel, data and
                  management resources as are necessary for the efficient and
                  effective management and operation of the Business;

        (b)       no business of the Licensee or the Agent (or of any affiliate
                  or related undertaking of the Licensee or the Agent), other
                  than the Distribution Business, may use or have access to:

                  (i)      premises  or parts of  premises  occupied  by
                           persons  engaged  in, or in respect  of, the
                           management  or  operation  of the
                           Distribution Business;


                  (ii)     systems for the recording, processing or storage of
                           data to which persons engaged in, or in respect of,
                           the management or operation of the Distribution
                           Business also have access;

                (iii)      equipment, facilities or property employed for the
                           management or operation of the Distribution
                           Business; or


                (iv)       the services of persons who are (whether or not as
                           their  principal occupation) engaged in, or in
                           respect of, the management or operation of the
                           Distribution Business; and


        (c)       it can and does, insofar as is legally possible, prevent any
                  person who has ceased to be engaged in, or in respect of, the
                  management or operation of the Distribution Business from
                  being engaged in, or in respect of, the activities of any
                  other business of the Licensee or the Agent (or of any
                  affiliate or related undertaking of the Licensee or the Agent)
                  until the expiry of an appropriate time from the date on which
                  he ceased to be engaged by the Distribution Business.
<PAGE>

7.       The Director may, upon the written request of the Licensee, issue a
         direction relieving the Licensee of its obligations under paragraphs 1
         to 6 - to such extent and subject to such terms and conditions as he
         may specify in that direction - where:

        (a)      it is not reasonably practicable for the Licensee to comply
                 with any aspect of those obligations;


        (b)      in the case of paragraphs 2 to 4, a failure to comply with
                 any aspect of those obligations would be of a trivial nature;
                 or


        (c)       in the case of paragraph 5 and sub-paragraph 6(b), any
                  arrangements for the use of or access to premises, systems,
                  equipment, facilities, property or personnel by both the
                  Distribution Business and any other business of the Licensee
                  or the Agent (or of any affiliate or related undertaking of
                  the Licensee or the Agent):

                (i)     do not involve a cross-subsidy being either given to
                        the Distribution Business by such other business or
                        received from the Distribution Business by such other
                        business;

                (ii)    obtain for the Distribution Business, in the most
                        efficient and economical manner possible, the use of
                        the relevant premises, systems, equipment,
                        facilities, property or personnel; and


                (iii)   do not restrict, distort or prevent competition in the
                        generation or supply of electricity.


8.       Where, subsequent to the issue of a direction pursuant to paragraph 7,
         the criteria set out at sub-paragraph 7(a), (b) or (c) cease to be
         satisfied, the Director may withdraw the direction or modify any terms
         and conditions which may be specified in it.

<PAGE>


9.       For the purposes of paragraphs 7 and 8 the Director shall, following
         consultation with the Licensee, determine any question as to whether
         the criteria set out at sub-paragraph 7(a), (b) or (c) are or continue
         to be satisfied.

10.      In this Condition:



        "appropriate time"                      means 3 months, or such
                                                shorter period as the Director
                                                may approve in respect of any
                                                person or class of persons.

        "Competent Authority"                   means the Secretary of State,
                                                the Director, the Compliance
                                                Officer,  the Stock Exchange,
                                                the Panel on Take-overs and
                                                Mergers, or any local or
                                                national agency, regulatory
                                                body, 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.

        "confidential information"              bears the meaning given at
                                                paragraph 1.

        "Electricity Arbitration                means the unincorporated
          Association"                          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.


<PAGE>



Condition 14A.  Appointment of Compliance Officer

1.       The Licensee shall no later than 30 November 1999 prepare a statement
         in a form approved by the Director setting out the practices,
         procedures and systems which the Licensee has adopted (or intends to
         adopt) to ensure its compliance with the Relevant Duties.

2.       The Licensee may periodically revise the information set out in and,
         with the approval of the Director, alter the form of the statement
         prepared in accordance with paragraph 1 and shall, at least once every
         year during which this Licence is in force, review such statement in
         order that the information set out therein shall continue to be
         accurate in all material respects.

3.       The Licensee shall send a copy of the statement prepared in accordance
         with paragraph 1, and of each revision of such statement in accordance
         with paragraph 2, to the Director.

4.       The Licensee shall, following consultation with the Agent and the
         Director, appoint a competent person (who shall be known as the
         "Compliance Officer") for the purpose of facilitating compliance by the
         Licensee with the Relevant Duties.

5.       The Licensee shall at all times engage the services of the Compliance
         Officer for the performance of such duties and tasks as the Licensee
         considers it appropriate to assign to him for the purposes specified at
         paragraph 4, which duties and tasks shall include those set out at
         paragraph 8.

6.       The Licensee shall procure that the Compliance Officer:


        (a)      is provided with such staff, premises, equipment, facilities
                 and other resources; and


        (b)      has such access to its premises, systems, information and
                 documentation

<PAGE>

         as, in each case, he might reasonably expect to require for the
         fulfilment of the duties and tasks assigned to him.

7.       The Licensee shall make available to the Compliance Officer a copy of
         any complaint or representation received by it from any person in
         respect of a matter arising under or by virtue of Condition 14 or in
         relation to any of the practices, procedures and systems adopted by the
         Licensee in accordance with the statement referred to at paragraph 1.

8.       The duties and tasks assigned to the Compliance Officer shall include:


        (a)      providing relevant advice and information to th  Licensee for
                 the purpose of ensuring  its  compliance  with the Relevant
                 Duties;


        (b)      monitoring  the  effectiveness  of the  practices,  procedures
                 and systems  adopted by the  Licensee in  accordance  with the
                 statement referred to at paragraph 1;


        (c)       advising whether, to the extent that the implementation of
                  such practices, procedures and systems requires the
                  co-operation of the Agent, they are designed so as reasonably
                  to admit of the required co-operation;

        (d)      investigating any complaint or representation made available
                 to him in accordance with paragraph 7;


        (e)      recommending and advising upon the remedial action which any
                 such investigation has demonstrated to be necessary or
                  desirable;


        (f)      providing relevant advice and information to the Licensee for
                 the purpose of ensuring its effective implementation of:


                (i)      the practices, procedures and systems adopted in
                         accordance with the statement referred to at paragraph
                         1; and
<PAGE>


                (ii)     any remedial action recommended in accordance with
                         sub-paragraph (d); and


        (g)       reporting annually to the directors of the Licensee - in
                  respect of the year ending 31 December 1999 and of each
                  subsequent year - as to his activities during the period
                  covered by the report, including the fulfilment of the other
                  duties and tasks assigned to him by the Licensee.

9.       As soon as is reasonably  practicable  following  each annual report
         of the Compliance  Officer,  the Licensee shall produce a
         report:


        (a)      as to its compliance during the relevant year with the
                 Relevant Duties; and


        (b)      as to its  implementation  of the practices,  procedures and
                 systems adopted in accordance with the statement referred to at
                  paragraph 1.


10.      The report produced in accordance with paragraph 9 shall in particular:


        (a)      detail the activities of the Compliance Officer during the
                 relevant year;


        (b)       refer to such other matters as are or may be appropriate in
                  relation to the implementation of the practices, procedures
                  and systems adopted in accordance with the statement referred
                  to at paragraph 1; and

        (c)      set out the details of any investigations conducted by the
                 Compliance Officer, including:


                (i)   the number, type and source of the complaints or
                      representations on which such investigations were based;


                (ii)   the outcome of such investigations; and
<PAGE>



                (iii)  any remedial action taken by the Licensee following such
                       investigations.


11.      The Licensee shall submit to the Director a copy of the report produced
         in accordance with paragraph 9, and shall give or send a copy of the
         report to any person who requests such a copy.

12.      In this Condition:


         "Relevant Duties"                         means the obligations
                                                   set out at Condition 14 and
                                                   the terms and conditions of
                                                   any direction issued pursuant
                                                   to paragraph 7 of Condition
                                                   14.


<PAGE>



Condition 15. Requirement to facilitate competition in the Generation and
Supply of Electricity
------------------------------------------------------------------------------


1.       The Licensee shall, in pursuance of its authorised activities, conduct
         its Distribution Business so as to facilitate:


        (a)      competition in the generation of electricity; and


        (b)      competition in the supply of electricity within the authorised
                 area.

<PAGE>



Condition 16. Compliance with the Grid Code

1.       The Licensee shall comply with the provisions of the Grid Code in so
         far as applicable to it.


2.       The Director may (following consultation with the Transmission Company)
         issue directions relieving the Licensee of its obligation under
         paragraph 1 in respect of such parts of the Grid Code and to such
         extent as may be specified in those directions.


<PAGE>



Condition 17. Security arrangements

1.       The Licensee shall comply with the provisions of the Fuel Security Code
         and such provisions shall have effect as if they were set out in this
         Licence.


<PAGE>



Condition 18. Conditions affecting customers' statutory rights

1.       The Licensee shall not include in or send with any notice given under
         Section 16(3) of the Act, or any form provided to customers for use in
         giving notice under Section 16(2) of the Act, or any notice sent to
         customers prior to their entering into a tariff or special agreement,
         an invitation to agree to anything which, by virtue of the Act, may
         only be done or (as the case may be) not done:

        (a)      with the agreement of that customer; or


        (b)       in any case where that customer withholds his agreement or
                  makes that agreement subject to terms and conditions to which
                  the Licensee objects, with the approval or consent or by order
                  of the Secretary of State

         unless the form and terms of such invitation have first been submitted
         to and approved by the Director.

2.       Nothing in paragraph 1 shall prevent the Licensee from:


        (a)      including  in any such notice any  provision  or  condition
                 which the  Licensee is required or  permitted  to include in
                 such notice by virtue of Section 16(4) of the Act; or


        (b)      including in any such notice concerning the provision of a
                 supply to premises:


                (i)      not previously supplied by the Licensee; or


                (ii)     where any modification is required to any electric
                         line, electrical plant or electric meter through
                         which such premises are supplied, or where any change
                         is required to the location thereof

                  an invitation to any customer to agree to any provision or
                  condition concerning the installation or location of any or
                  all of an electric line, electrical plant or an electric meter

         in any such case without having submitted the form and terms of such
agreement or notice to the Director.


<PAGE>



Condition 19. Licensee's apparatus on customers' side of meter

1.       This Condition applies where the Licensee, whether on its own behalf or
         as a provider of meter operation services to another Electricity
         Supplier, installs a second meter or other apparatus for the purpose of
         ascertaining or regulating the amount of electricity supplied, the
         period of supply, or any other quantity or time connected with the
         supply on the customer's side of non half-hourly metering equipment
         registering the quantity of the supply to that customer.

2.       Any second meter or other apparatus installed by the Licensee in the
         position and for a purpose described in paragraph 1 shall be such that
         the power consumed by it, when aggregated with the power consumed by
         any other meter or apparatus installed by the Licensee in the like
         position and for a like purpose in relation to the customer, does not
         exceed 10 watts except where otherwise agreed with the customer.


<PAGE>



Condition 20. Provision of distribution services for persons who are of
pensionable age or disabled or chronically sick
---------------------------------------------------------------------------


1.       The Licensee shall, no later than 1 January 1998, prepare and submit to
         the Director for his approval a code of practice detailing the special
         services the Licensee will make available for Domestic Customers who
         are of pensionable age or disabled or chronically sick.

2.       The code of practice shall include arrangements by which the Licensee
         will where appropriate, in respect of its customers, provide special
         means of identifying persons acting on behalf of the Licensee.

3.       The code of practice shall further include arrangements whereby the
         Licensee will:


        (a)       take reasonable steps to draw the attention of customers to
                  the existence of a register of customers who may be expected,
                  by virtue of being of pensionable age or disabled or
                  chronically sick, to require:

                (i)      information and advice in respect of the matter set
                         out at paragraph 2; or


                (ii)     advance notice of interruptions to the supply of
                         electricity;


        (b)       maintain such a register, comprising the relevant details of
                  each customer who requests (or, in the case of a customer
                  supplied by a private electricity supplier, whose supplier
                  requests) his inclusion on it; and

        (c)       give to all customers so registered, in respect of
                  interruptions to the supply of electricity, such information
                  and advice as may be appropriate and is of such nature as
                  shall be set out in the code of practice.

4.       This Condition is subject to the provisions of Condition 24.





<PAGE>



Condition 21. Code of practice on procedures with respect to site access

1.       The Licensee shall, no later than 1 January 1998, prepare and submit to
         the Director for his approval a code of practice setting out the
         principles and procedures the Licensee will follow in respect of any
         person acting on its behalf who requires access to customers' premises.

2.       The code of practice shall include  procedures  calculated to ensure
         that persons  visiting  customers'  premises on behalf of
         the Licensee:


                (a)      possess the skills necessary to perform the required
                         duties;


                (b)      are readily identifiable to members of the public;


                (c)      use passwords provided for vulnerable customers;


                (d)      are appropriate persons to visit and enter customers'
                         premises; and


                (e)      are able to inform customers, on request, of a contact
                         point for help and advice they may require in relation
                         to the supply of electricity.

3.       This Condition is subject to the provisions of Condition 24.





<PAGE>



Condition 22. Standards of performance for the Distribution Business

1.       The Licensee shall conduct its Distribution Business in the manner
         which it reasonably considers to be best calculated to achieve any
         standards of overall performance as may be determined by the Director
         pursuant to Section 40 of the Act.

2.       The Licensee shall not enter into a use of system agreement with any
         Electricity Supplier that does not provide for the Licensee to make
         payments in respect of the performance of the Distribution Business to
         the Electricity Supplier for the benefit of any customer of that
         Electricity Supplier equivalent to such sums as would have been paid
         pursuant to the standards of performance prescribed by the Director in
         accordance with regulations made under Section 39 of the Act had that
         customer been a tariff customer of the Licensee in those situations
         where the Licensee would have been obliged to make such a payment.

3.       In making  payments in accordance  with any standards of performance
         or in accordance with paragraph 2, the Licensee shall not
         discriminate:


        (a)      between any persons or class or classes thereof; or


        (b)      as between the Licensee and any persons or class or classes
                 thereof.





<PAGE>



Condition 23. Distribution Business complaint handling procedure

1.       The Licensee shall, no later than 1 January 1998, prepare and submit to
         the Director for his approval a code of practice detailing the
         procedure for handling complaints from customers about the manner in
         which the Licensee conducts its Distribution Business.

2.       Any procedure established in accordance with this Condition shall
         specify the periods within which it is intended that different
         descriptions of complaint should be processed and resolved.

3.       This Condition is subject to the provisions of Condition 24.





<PAGE>



Condition 24. Preparation, review of and compliance with customer service codes

1.       This Condition applies to any code of practice required to be prepared
         by the Licensee pursuant to Condition 20, Condition 21 and Condition 23
         of this Licence.

2.       In first preparing such a code the Licensee shall, prior to submitting
         that code to the Director, consult the Relevant Consumers' Committee
         and shall have regard to any representations made by the committee
         about such code or the manner in which it is likely to be operated.

3.       Where before the expiry of 30 days of the Licensee first submitting
         such code to the Director for his approval the Director notifies the
         Licensee that the Director considers the code is not sufficient for the
         purposes of meeting the requirements of this Licence the Licensee shall
         forthwith make such changes as the Director may require.

4.       The Licensee shall, whenever requested to do so by the Director, review
         such code and the manner in which it has been operated, with a view to
         determining whether any modification should be made to it or to the
         manner of its operation.

5.       In carrying out any such review the Licensee shall consult the Relevant
         Consumers' Committee and shall have regard to any representations made
         by it about such code or the manner in which it is likely to be or (as
         the case may be) has been operated.

6.       The Licensee shall submit any revision of such code which, after
         consulting the Relevant Consumers' Committee in accordance with
         paragraph 5, it wishes to make, to the Director for his approval and
         following his approval in writing shall then revise the code.
<PAGE>

7.       The Licensee shall:


        (a)       as soon as practicable following the preparation of any code
                  or any revision made to it send to the Director and the
                  Relevant Consumers' Committee a copy of such code or such
                  revision (in each case in the form approved by the Director);

        (b)       draw the attention of those of its customers to whom such code
                  applies to the existence of the code and of each substantive
                  revision of it and to the means by which they may inspect a
                  copy of such code in its latest form; and

        (c)       give or send free of charge a copy of such code (as from time
                  to time revised) to any person who requests it.

8.       No changes may be made to any code otherwise than in accordance with
         the foregoing procedures.


9.       The Licensee shall ensure, so far as reasonably practicable, that it
         complies with such arrangements or procedures (as the case may be) as
         are contained in or described by any code to which this condition
         applies and approved by the Director or any revision to such code
         approved by the Director.


<PAGE>



Condition 25. Record of and report on Distribution Business performance

 1.      The Licensee shall keep a record of its general operation of the
         arrangements mentioned in Condition 20 to 23 and if the Director so
         directs in writing, of its operation of any particular cases specified,
         or of a description specified, by him.

 2.      The Licensee shall keep a statistical record of the performance of the
         Distribution Business in relation to the provision of services to its
         Designated Customers under the terms of contracts or in accordance with
         tariffs fixed under Section 18 of the Act, including services relating
         to:

        (a)      the holding of security deposits;


        (b)      the offering of appointments and the making of visits to
                 customers' premises;


        (c)       payments made to customers and to suppliers pursuant to the
                  standards of performance prescribed by the Director in
                  accordance with regulations made under Section 39 of the Act
                  or in accordance with paragraphs 2 and 3 of Condition 22.

 3.      The Licensee shall, from time to time as required by the Director,
         provide to the Director and to the Relevant Consumers' Committee such
         of the information contained in the records prepared in accordance with
         paragraphs 1 and 2 as the Director may request in writing.

 4.      As soon as is reasonably practicable after the end of each calendar
         year, the Licensee shall submit to the Director and the Relevant
         Consumers' Committee a report dealing with the matters mentioned in
         paragraphs 1 and 2 in relation to that year and shall:

        (a)      publish the report so submitted in such manner as will in the
                 reasonable  opinion of the Licensee secure adequate publicity
                 for it; and
<PAGE>


        (b)      send a copy of it free of charge to any person requesting one,


         except that, in performing its obligations under sub-paragraphs 4(a)
         and (b), the Licensee shall exclude from the report such information as
         appears to it to be necessary or expedient to ensure that, save where
         they consent, individual Designated Customers referred to therein
         cannot readily be identified.

 5.      The report shall be presented,  so far as is  reasonably  practicable,
         in a standard form  designated by the Director for the
         purposes of this Condition.





<PAGE>



Condition 26. Publication of supply numbers

 1.      Subject to paragraph 4, the Licensee shall by 31 December 1997 inform
         each customer of a number or numbers ("the Supply Number(s)") relevant
         to the registration, under the Master Registration Agreement, of a
         supplier of electricity to the premises owned or occupied by such
         customer.

 2.      The Licensee shall, at the same time as it informs a customer of the
         relevant Supply Number in accordance with paragraph 1, send to that
         customer a statement in writing which provides a clear and sufficient
         explanation of the nature and function of the Supply Number, such
         statement having received the prior approval of the Director.

 3.      The Supply Number shall consist of a number of data items, each of
         which shall be represented by a numerical identifier which shall:

        (a)      have the number of digits specified in a direction issued by
                 the Director;


        (b)      be approved by the Director; and


        (c)      be used by the Licensee in common with all Electricity
                 Suppliers.


 4.      The  Director  may issue a direction  relieving  the Licensee of its
         obligation  under  paragraphs 1 and 3 to such extent and
         subject to such terms and conditions as he may specify in that
         direction.





<PAGE>



Condition 27. Relations with the Relevant Consumers' Committee

1.       The Licensee shall meet with the Relevant Consumers' Committee whenever
         requested to do so by that committee, up to a maximum of six times in
         every year during the period of this Licence.

2.       Without prejudice to paragraph 1, the Licensee shall meet the Relevant
         Consumers' Committee at least once in every year during the period of
         this Licence.

3.       In at least one meeting with the Relevant Consumers' Committee in every
         year during the period of this Licence, the Licensee shall be
         represented by one or more directors of the Licensee.


<PAGE>



Condition 28. Health and safety of employees

1.       The Licensee shall, together with all other licensees, consult with
         appropriate representatives of persons employed by itself and by those
         licensees in order to establish and maintain an appropriate machinery
         or forum for the joint consideration of matters of mutual concern in
         respect of the health and safety of such persons.

2.       In this Condition:


         "licensees"    means all holders of  licences  granted  under  Section
                        6(1)(a), 6(1)(b), 6(1)(c) and 6(2) of the Act.



<PAGE>



                     SECTION B. SUPPLY BUSINESS OBLIGATIONS

                       Sub-Section (1) General Obligations

Condition 29. Supply charge restriction conditions: definitions
---------------------------------------------------------------

1.       In this Condition, in Condition 29A to 29E and in Schedule 3B:


          "attributed"                     means when used in relation to the
                                           fossil fuel levy or payments in lieu
                                           thereof or transmission connection
                                           point charges or remote transmission
                                           asset rentals or distribution
                                           losses or transmission costs or
                                           allowed  distribution costs, or
                                           in  relation  to  attributing
                                           electricity  purchase  or  sale
                                           contracts and electricity purchase
                                           costs  to  regulated
                                           customers and other customers,
                                           attributed in accordance  with
                                           the principles set out in Part A of
                                           Schedule 3A and attribute,
                                           attributed,  attributable  and
                                           attribution  shall be construed
                                           accordingly.

          "average charge per unit         means the supply  revenue in the
           supplied"                       year divided by the  quantity
                                           supplied in that year.

          "average charge per regulated    means the regulated supply revenue
           unit supplied"                  in the relevant year divided by the
                                           regulated quantity supplied in that
                                           year.

          "average specified rate"         means the average of the daily base
                                           rates of Barclays  Bank plc
                                           current from time to time
                                           during the period in
                                           respect of which the
                                           calculation falls to be
                                           made.


<PAGE>

          "distribution services"         means all services provided by the
                                          Licensee as part of its
                                          Distribution Business
                                          other than excluded
                                          services.

          "electricity purchase costs"    means the
                                          Licensee's purchase costs
                                          of electricity calculated
                                          in accordance with the
                                          principles in Part F of
                                          Schedule 3 of this Licence
                                          as in force on 31 March
                                          1998.

          "excluded services"             means those
                                          services provided by the
                                          Licensee which in
                                          accordance with the
                                          principles set out in Part
                                          C of Schedule 3A fall to
                                          be treated as excluded
                                          services.

          "interconnector charges"        means charges
                                          levied by the
                                          Interconnectors Business
                                          of the Transmission
                                          Company and payable by the
                                          Supply or Second Tier
                                          Supply Business of the
                                          Licensee in respect of use
                                          of interconnector for the
                                          transfer of electricity
                                          into England and Wales.

          "maximum average charge per
          regulated  unit supplied"       means the charge  calculated in
                                          accordance  with the formula in
                                          paragraph 4 of Condition 29A.

          "metered"                       means, in relation to any quantity
                                          supplied,  as measured by ameter
                                          installed for suchpurpose or (where
                                          no such meter is installed or it
                                          is not reasonably
                                          practicable to measure the
                                          quantity by such meter) as
                                          otherwise reasonably
                                          calculated.

          "0.1 MW customer"               means any  customer  other than an
                                          over 0.1 MW  customer in its
                                          capacity as such.
<PAGE>


          "0.1 MW premises"               means any premises other than over
                                          0.1 MW premises.

          "over 0.1 MW customer"          means a customer  supplied at over
                                          0.1 MW  premises,  but shall
                                          not  include  such  customer  insofar
                                          as  supplied  at  0.1 MW premises.

          "over 0.1 MW premises"          means premises at which the average
                                          of the  maximum monthly demands in the
                                          three months of highest maximum
                                          demand in any period of twelve
                                          consecutive months commencing on or
                                          after January 1993 exceeds one tenth
                                          of a megawatt.

          "quantity supplied"             means the
                                          aggregate quantity of
                                          units supplied by the
                                          Licensee in the relevant
                                          year metered at the points
                                          of supply (whether or not
                                          in the authorised area of
                                          the Licensee).

          "regulated customer"            means a person
                                          other than the Licensee
                                          who in the calendar year
                                          ending in relevant year
                                          t-1 was supplied at 0.1 MW
                                          premises.

          "relevant year"                 means a financial year commencing on
                                          or after 1st April 1990.

          "relevant year t"               means  that relevant year  for  the
                                          purposes  of  which any calculation
                                          falls to be made; "relevant year t-1"
                                          means the relevant year
                                          preceding relevant year t
                                          or, in respect of the
                                          period prior to 1st April
                                          1990, the period of 12
                                          calendar months commencing
                                          on 1st April 1989; and
                                          similar expressions shall
                                          be construed accordingly.
<PAGE>


          "remote transmission asset
           rentals"                       means any rent or
                                          other periodic payment
                                          payable by the
                                          Distribution Business of
                                          the Licensee to the
                                          Transmission Company in
                                          respect of remote
                                          transmission assets
                                          forming part of the
                                          Licensee's Distribution
                                          System.

          "sixth relevant year"           means the relevant year commencing
                                          1st April 1995.

          "supply"                        includes  supply  outside  the
                                          authorised  area,  standby and top-up
                                          supply and sale and
                                          any other sales of
                                          electricity by the
                                          Licensee to persons other
                                          than customers; and
                                          "supplied" and similar
                                          expressions shall be
                                          construed accordingly.

          "supply charge restriction
           conditions"                    means
                                          Condition 29 to 29E
                                          together with Schedule 3B
                                          to this Licence, as from
                                          time to time modified or
                                          replaced in accordance
                                          therewith or pursuant to
                                          Sections 11, 14 or 15 of
                                          the Act.

          "supply charges"                means all charges
                                          (including charges for the
                                          provision of distribution
                                          services and standing
                                          charges) made by the
                                          Licensee in respect of
                                          electricity supplied by
                                          the Licensee other than
                                          charges for the provision
                                          of excluded services by
                                          the Licensee.

          "supply revenue"                means the revenue
                                          (measured on an accruals
                                          basis) derived by the
                                          Licensee from supply
                                          charges after deduction of
                                          value added tax (if any)
                                          and any other taxes based
                                          directly on the amounts so
                                          derived.

<PAGE>


          "transmission charges"          means charges
                                          levied by the Transmission
                                          Company payable by the
                                          Supply or the Second Tier
                                          Supply Business of the
                                          Licensee in respect of the
                                          transmission of
                                          electricity, but for the
                                          avoidance of doubt shall
                                          exclude transmission
                                          connection point charges
                                          and remote transmission
                                          asset rentals.

          "transmission connection point
          charges"                        means charges levied by
                                          the Transmission Company
                                          as connection charges by
                                          direct reference to the
                                          number or nature of the
                                          connections between the
                                          Licensee's Distribution
                                          System and the
                                          transmission system and
                                          payable by the
                                          Distribution Business of
                                          the Licensee.

          "unit"                          means a kilowatt hour.



<PAGE>



Condition 29A. Restriction on Supply Charges

Continuation Of Tariffs

1.1      Save where the Director consents in writing to a tariff being
         discontinued, the Licensee shall continue to make available to
         customers at Designated Premises the tariffs listed under the
         Licensee's name in Annex A to this Condition.

1.2      Where a customer at Designated Premises was supplied at the end of the
         eighth relevant year on a tariff listed under the Licensee's name in
         Annex B to this Condition, the Licensee shall continue to offer that
         tariff to that customer at those premises unless the Director consents
         in writing to the Licensee's not doing so.

1.3      The Licensee shall not, without the consent in writing of the Director,
         change the terms (other than price, which shall be regulated in
         accordance with this Condition) of any tariff described in the second
         column of the Table; and the terms to which this prohibition applies
         include, for example, the hours between which particular prices apply
         and the level of consumption at which prices change.

New Tariffs

2.       The Licensee shall not offer to supply any customer at Designated
         Premises on a tariff not shown in the Table unless the terms of that
         tariff have been approved by the Director.

The Price Restraint

3.       Without prejudice to Condition 29D, the prices in the tariffs which
         apply at the beginning of the ninth relevant year to supplies to
         Designated Customers shall be set at or below the limit imposed by
         paragraph 4 and in addition at or below each of the limits imposed by
         paragraph 5 and (where those paragraphs apply) by paragraphs 6 and 7.

<PAGE>


4.       The prices  referred to in paragraph 3 shall be so set that they do
         not cause the value of composite term [OBJECT  OMITTED] to
         exceed the value of the formula

                  [OBJECT OMITTED]
                  where,
                  n
                  (SIGMA)  means the summation across all tariffs; and
                  1

                  [OBJECT OMITTED] has the value given against the Licensee's
name in Annex C to this Condition.

5.1      Without prejudice to Condition 29D, at the beginning of the ninth
         relevant year the Licensee shall so set its prices to Designated
         Customers supplied on the tariff numbered 1 in the Table that the total
         charge for that year for a Designated Customer supplied on such a
         tariff who consumes 3300 units in that year shall not exceed

                           [OBJECT OMITTED]
                           where

                           [OBJECT OMITTED] has the value given against the
Licensee's name in Annex C to this Condition.

5.2      Without prejudice to Condition 29D, at the beginning of the ninth
         relevant year, the prices to Designated Customers on each of the
         domestic tariffs in the Table other than the tariff numbered 1 shall be
         so set that, when used to determine the value of the terms PUit and
         PSit, they do not cause the value of the composite term [OBJECT
         OMITTED]to exceed the value of the formula

                  [OBJECT OMITTED]


                           where Xb has the value of 3.

<PAGE>

5.3      Without prejudice to Condition 29D, at the beginning of the ninth
         relevant year, the prices to Designated Customers on each of the
         non-domestic tariffs in the Table shall be so set that, when used to
         determine the value of the terms PUit and PSit, they do not cause the
         value of the composite term [OBJECT OMITTED] , when applied to that
         tariff, to exceed the value of the formula

                           [OBJECT OMITTED].


6.        Without prejudice to Condition 29D, in the case of any tariff
          described as domestic in column 3 of the Table, the standing charge to
          a Designated Customer at the beginning of the ninth relevant year
          shall not exceed the standing charge given for that tariff in column 5
          of the Table multiplied by

         [OBJECT OMITTED].





7.1      Without  prejudice  to  Condition  29D,  in the case of any  tariff
         described  in column 2 of the Table  which is a  domestic
         prepayment tariff,
<PAGE>


        (a)       the standing charge and the unit charge at the beginning of
                  the ninth relevant year shall each be lower than the standing
                  charge and unit charge respectively set against that tariff in
                  column 5 of the Table by the same proportion as the standing
                  charge and the unit charge at the beginning of the ninth
                  relevant year of the nearest equivalent domestic tariff (not
                  being a prepayment tariff) are lower than the standing charge
                  and unit charge respectively of that nearest equivalent
                  domestic charge shown against them in column 5 of the Table
                  (and in this sub-paragraph the standing charge shall be
                  exclusive of any prepayment surcharge); and

        (b)       there shall at no time be any increase in the amount by which
                  the standing charge (including any prepayment meter surcharge)
                  for any domestic prepayment tariff exceeds the standing charge
                  for the nearest comparable domestic tariff (not being a
                  prepayment tariff).

7.2      The Director may direct which tariff is the nearest equivalent
         domestic tariff for the purpose of this paragraph.


8.1      Without prejudice to paragraph 9 and Condition 29D, no price (whether a
         standing charge or a unit charge) in any tariff shall be increased
         during the ninth relevant year above the price which applies at the
         beginning of the ninth relevant year, unless the Director has consented
         in writing.

8.2      In giving consent the Director shall have regard in particular but not
         exclusively to the impact of significant movements in costs outside the
         Licensee's control, and shall consider whether such movements in costs
         justify an increase in all tariffs, a differential increase in tariffs
         or an increase in some tariffs only.

9.       If any change is made to the rate of the Fossil Fuel Levy between 1
         August 1997 and 2 April 1998, and whenever any change is made to that
         rate thereafter, every price limit set pursuant to paragraphs 4, 5, 6
         and 7.1(a) shall be multiplied by the following factor

                  [OBJECT OMITTED] .

<PAGE>

10.1     Where, after the end of the eighth relevant year, the Director is
         satisfied that in the eighth relevant year the average charge per unit
         supplied differed from the maximum average charge per unit supplied
         assumed for the purpose of setting the prices in column 5 of the Table,
         the Director may give a direction to the Licensee stipulating the
         prices to be charged for any (or all) of the tariffs described in
         column 2 of the Table.

10.2     Before giving any such direction, the Director shall consult the
         Licensee.


10.3     In considering  whether to give any such direction,  and in
         considering the content of any such direction,  the Director shall
         have regard


        (a)       to the extent to which the regulated supply revenue for the
                  eighth relevant year assumed for the purpose of setting the
                  prices in column 5 of the Table differs from the actual
                  regulated supply revenue for that year adjusted

                (i)      to reflect what the regulated  supply revenue would
                         have been if the tariffs in force on 1 August 1997 had
                         remained unchanged until the end of the eighth
                         relevant year; and


                (ii)       by adding any rebates or discounts to Regulated
                           Customers in respect of the period from 1 August 1997
                           to the end of the eighth relevant year, being rebates
                           or discounts not included in the tariffs in force on
                           1 August 1997;

        (b)      to any representations made by the Licensee; and


        (c)      to the cost to the Licensee of changing any tariff.


11.1     Where, for relevant year t, the terms TAdt or GAdt (or both of them) in
         paragraph 4 of Condition 3A have a value greater than 0, the Director
         may give a direction to the Licensee stipulating the prices to be
         charged, in that or any subsequent relevant year, for any (or all) of
         the tariffs described in Column 2 of the Table.
<PAGE>

11.2     Before giving any such direction, the Director shall consult the
         Licensee.


11.3     In considering  whether to give any such direction,  and in
         considering the content of any such direction,  the Director shall
         have regard


        (a)       to the extent by which the charges made by the Distribution
                  Business to the Supply Business have been reduced on account
                  of the terms TAdt or GAdt (or both of them) having a greater
                  value than 0;

        (b)      to any representation made by the Licensee; and


        (c)      to the cost to the Licensee of changing any tariff.


12.1     Without prejudice to paragraph 9 and Condition 29D, for the tenth and
         every subsequent relevant year, unless the Director has consented in
         writing, each component of each tariff described in column 2 of the
         Table or approved for the purpose of paragraph 2 shall have a price no
         greater than the price at the end of the immediately preceding relevant
         year, in each case multiplied by the formula

                  [OBJECT OMITTED]


         where Xc has the value of 3 for the tenth relevant year and the value
         of 0 for every subsequent relevant year.

12.2     In giving consent the Director shall have regard in particular but not
         exclusively to the impact of significant movements in costs outside the
         Licensee's control, and shall consider whether such movements in costs
         justify an increase in all tariffs, a differential increase in tariffs
         or an increase in some tariffs only.
<PAGE>

Interpretation

13.      In this Condition:

        (a)      all prices and revenue shall exclude value added tax (if any);
                 and


        (b)       any reference to the first relevant year shall be a reference
                  to the relevant year commencing on 1 April 1990, and any
                  reference to the second financial year and so on shall be
                  construed accordingly;

        (c)      in respect of any tariff described in column 2 of the Table
                 the following terms have the following meanings:


                  PSit     is the standing charge (or each of them) for that
                           tariff for the ninth relevant year t;


                  PSi0     is the standing charge (or each of them) for that
                           tariff given in column 5 of the Table;


                  QSi0     is the number in column 6 of the Table set against
                           that standing charge;


                  PUit     is the unit charge (or each of them) for that tariff
                           for the ninth relevant year t;


                  PUi0     is the unit charge (or each of them) for that tariff
                           given in column 5 of the Table;


                  QUi0     is the number in column 6 of the Table set against
                           that unit charge (or each of them);


                   u
                  (SIGMA)  means the summation across all unit charges for that
                          tariff;

<PAGE>


                  (SIGMA)  means the summation across all standing charges for
                   1       that tariff;


                  NC       means the number given against tariff in column 7 of
                           the Table; and


         (d)      the following terms shall have the following meanings:


                  Ft       means the rate of the Fossil Fuel Levy applicable
                           from time to time during relevant year t;


                  Fd       has the value of 2.2;


                  RPIt     means the percentage change (whether of a positive or
                           a negative value) in the arithmetic average of the
                           Retail Price Index numbers published or determined
                           with respect to each of the six months July to
                           December (inclusive) in relevant year t-1 and the
                           arithmetic average of the Retail Price Index numbers
                           published or determined with respect to the same
                           months in relevant year t-2; and

                  the Table means the table given under the Licensee's name in
                  Annex D to this Condition.


<PAGE>


ANNEX A to Condition 29A

Tariffs Generally Available

EASTERN ELECTRICITY Plc

Tariff No.                 Tariff
      1               Domestic General Table 2
      2               Domestic General Table 1
      3               Domestic General Prepayment
      4               Domestic General Prepayment - Lock Off Meter
      5               Domestic Economy 7 Table 1
      6               Domestic Economy 7 Table 2
      7               Domestic Economy 7 Prepayment
      8               Domestic Night/Day Table 1
      9               Domestic Night/Day Table 2
      10              Domestic Low User Tariff Table 1
      11              Domestic Low User Tariff Table 2
      12              Domestic Economy 10 Table 1
      13              Domestic Economy 10 Table 2
      14              Restricted Hours 1 - Table 1
      15              Restricted Hours 1- Table 2
      16              Restricted Hours 2 - Table 1
      17              Restricted Hours 2 - Table 2
      18              Restricted Hours 3 - Table 1
      19              Restricted Hours 3 - Table 2
      20,21           Business & Enterprise General Table 1
      22,23           Business & Enterprise General Table 2
      24              Business & Enterprise General Prepayment
      25,26           Business & Enterprise Economy 7 Table 1
      27,28           Business & Enterprise Economy 7 Table 2
      29              Business & Enterprise Economy 7 Prepayment
      30,31           Business & Enterprise Evening Weekend Economy 7 Table 1
      32,33           Business & Enterprise Evening Weekend Economy 7 Table 2
      34,35           Business & Enterprise Night/Day Table 1
      36,37           Business & Enterprise Night/Day Table 2
      38,39           Business & Enterprise Evening/Weekend Table 1
      40,41           Business & Enterprise Evening/Weekend Table 2

EAST MIDLANDS ELECTRICITY Plc

Tariff No.                 Tariff

      1                    Domestic Standard
      2                    Domestic Economy 7
      3                    Cardmeter Domestic
      4                    Domestic Heatwise
      5                    Restricted Hours Tariff 1 - Domestic
      6                    Restricted Hours Tariff 2 - Domestic
      7                    Restricted Hours Tariff 3 - Domestic
      8,16                 Direct Debit Discount
      9                    Non-Domestic Block
      10                   Non-Domestic Economy 7 Block
      11                   Non-Domestic Evening & Weekend
      12                   Non-Domestic Evening & Weekend Economy 7
      13                   Restricted Hours Tariff 1 - Non-Domestic
      14                   Restricted Hours Tariff 2 - Non-Domestic
      15                   Restricted Hours Tariff 3 - Non-Domestic
<PAGE>

LONDON ELECTRICITY Plc

Tariff No.                 Tariff

      1                    Domestic General - Quarterly
      2                    Domestic General - Powerkey
      3                    Domestic General - Direct Debit
      4                    Domestic Economy 7 - Quarterly
      5                    Domestic Economy 7 - Powerkey
      6                    Domestic Economy 7 - Direct Debit
      7                    Domestic Economy 9 - Quarterly
      8                    Domestic Economy 9 - Direct Debit
      9                    White Meter Tariff
      10                   Off Peak Rate 4
      11                   Off Peak Rate 5
      12                   Off Peak Rate 6
      13                   Domestic Unpublished Supplies
      14                   Business Standard - Quarterly
      15                   Business Standard - Powerkey
      16                   Business Standard - Direct Debit
      17                   Business Economy 7 - Quarterly
      18                   Business Economy 7 - Powerkey
      19                   Business Economy 7 - Direct Debit
      20                   Business Evening/Weekend - Quarterly
      21                   Business Evening/Weekend - Powerkey
      22                   Business Evening/Weekend - Direct Debit
      23                   Off Peak Rate 7
      24                   Off Peak Rate 8
      25                   Off Peak Rate 9
      26                   Business Unmetered supplies
      27,28                Business Staircase
      29                   Catering

MANWEB Plc

Tariff No.                 Tariff
      1                    Domestic `S'
      2                    Select
      3,16                 Prepayment
      4                    Economy 7
      5                    Off Peak
      6                    White Meter
      7                    Option 14
      8                    3S
      9                    3T
      10                   3E
      11                   M3
      12                   4S
      13                   4T
      14                   4E
      15                   M4
      17                   Direct Debit
<PAGE>

MIDLANDS ELECTRICITY Plc

Tariff No.                 Tariff

      1                    D1 - Domestic Credit Meter Tariff
      2                    D1 DD - Domestic Direct Debit Tariff
      3                    D8 - Domestic Token Meter Tariff
      4                    D5 - Domestic Economy 7
      5                    D5 DD - Domestic Economy 7 Direct Debit Tariff
      6                    D6 - Domestic Economy 7 Token Meter Tariff
      7                    OP1 - Off Peak Tariff
      8                    OP2 - Off Peak Tariff
      9                    OP3 - Off Peak Tariff
      10                   S - Small Supplies Tariff
      11                   S DD - Small Supplies Direct Debit Tariff
      12                   S1 - Small Supplies Economy 7 Tariff
      13                   S1 DD - Small Supplies Economy 7 Direct Debit Tariff
      14                   W - Weekend Supplies
      15                   W DD - Weekend Supplies Direct Debit Tariff
      16                   OP1 - Off Peak Non-Domestic Tariff
      17                   OP2 - Off Peak Non-Domestic Tariff
      18                   OP3 - Off Peak Non-Domestic Tariff

NORTHERN ELECTRICITY Plc

Tariff No.                 Tariff
      1                    D1 Unrestricted
      2                    D1T Economy 7
      3                    Small Domestic Users tariff
      4                    K1 Prepayment
      5                    K1T Prepayment Economy 7
      6                    Super Tariff
      7                    RH1 - Off Peak
      8                    RH2 - Off Peak
      9                    RH3 & RHB - Off Peak
      10                   Staff Tariff
      11                   Heat Plan
      12                   Non-Domestic Evening & Weekend
      13                   Evening & Weekend Small Users

      14                   Q1
      15                   Q1T Economy 7
      16                   Super Tariff - Business
      17                   RH1 - Off Peak
      18                   RH2 - Off Peak
      19                   RH3 & RHB - Off Peak
      20                   C7 Catering Tariff
      21                   Premier Payment Plan
      22                   Prompt Payment Discount


<PAGE>

NORWEB Plc

Tariff No.                 Tariff

      1                    D13 Domestic Tariff
      2                    D11 Domestic Monthly Budget Scheme
      3                    D11 Domestic Prepayment
      4                    D56 Domestic Economy 7 Tariff
      5                    D22 Domestic Economy 7 Monthly Budget Scheme
      6                    D22 Domestic Economy 7 Prepayment
      7                    D92 Domestic Smart 7 Tariff
      8                    R16 7 Hour Off Peak Tariff
      9                    R11 Tariff
      10                   R21 Domestic Tariff
      11                   G13 All Purpose Quarterly Tariff
      12                   G11 All Purpose Monthly Budget Scheme
      13                   G15 Combined Premises Quarterly
      14                   G16 Combined Premises Monthly
      15                   G63 All Purpose Economy 7 Quarterly Tariff
      16                   G66 All Purpose Economy 7 Monthly Tariff
      17                   G65 Combined Premises Economy 7 Quarterly Tariff
      18                   G67 Combined Premises Economy 7 Monthly Tariff
      19                   G71 Evening & Weekend Tariff
      20                   G61 Economy 7 Evening/Weekend Quarterly Tariff
      21                   G54 Economy 7 Evening/Weekend Monthly Tariff
      22                   R31 Non-Domestic
      23                   R41 Tariff
      24                   R42 Tariff
      25                   R43 Tariff
      26                   R51 Floor Warming Tariff
      27                   Q64 Farm Crop-Drying Tariff

SEEBOARD Plc

Tariff No.                 Tariff
      1                    Domestic Standard
      2                    Domestic Economy 7
      3                    Domestic White Meter
      4                    Warmwise
      5                    Business Standard
      6                    Business Economy 7
      7                    Business White Meter
      8                    Business Evening/Weekend/Night
      9                    Off Peak
      10,11,12             Prepayment
      13                   Direct Debit Discount



<PAGE>


SOUTHERN ELECTRIC Plc

Tariff No.                 Tariff

      1                    General Domestic (Quarterly)
      2                    General Domestic (Keypayment)
      3                    General Domestic (Direct Debit)
      4                    Flexiheat
      5                    Flexiheat (Direct Debit)
      6                    Super Deal
      7                    Super Deal (Direct Debit)
      8                    Economy 7 (Quarterly)
      9                    Economy 7 (Direct Debit)
      10                   Economy 7 (Keypayment)
      11                   Domestic White Meter
      12                   Domestic White Meter (Direct Debit)
      13,23                Restricted Hours
      14,24                Restricted Hours (Direct Debit)
      15                   Q1 Block
      16                   Q1 Block (Direct Debit)
      17                   Q2 Day/Night
      18                   Q2 Day/Night (Direct Debit)
      19                   Q3 Evening/Weekend
      20                   Q3 Evening/Weekend (Direct Debit)
      21                   Q4 Night/Evening/Weekend
      22                   Q4 Night/Evening/Weekend (Direct Debit)
      25                   3 Phase Meter

SOUTH WALES ELECTRICITY Plc

Tariff No.                 Tariff

      1                    Domestic Basic Tariff - Credit
      2                    Domestic Basic Tariff - Direct Debit
      3                    Domestic Restricted Hours Tariff - Credit
      4                    Domestic Restricted Hours Tariff - Direct Debit
      5                    Domestic White Meter Tariff - Credit
      6                    Domestic White Meter Tariff - Direct Debit
      7                    Domestic Economy 7 Tariff - Credit
      8                    Domestic Economy 7 Tariff - Direct Debit
      9                    Domestic Winter Warmth
      10                   Domestic Prepayment Meter Surcharge
      11                   Domestic Basic Tariff - Token Meter
      12                   Domestic Economy 7 Tariff - Token Meter
      13                   Farm Domestic Basic Tariff - Credit
      14                   Farm Domestic Basic Tariff - Direct Debit
      15                   Farm Domestic White Meter Tariff - Credit
      16                   Farm Domestic White Meter Tariff - Direct Debit
      17                   Farm Domestic Economy 7 - Credit
      18                   Farm Domestic Economy 7 - Direct Debit
      19                   Farm Basic Tariff - Credit
      20                   Farm Basic Tariff - Direct Debit
      21                   Commercial Standard Tariff - Credit
      22                   Commercial Standard Tariff - Direct Debit
      23                   Commercial S/A - Credit
      24                   Combined Standard Tariff - Credit
      25                   Combined Standard Tariff - Direct Debit


<PAGE>

SOUTH WALES ELECTRICITY Plc

Tariff No.                 Tariff

      26                   Small Industrial Tariff - Credit
      27                   Small Industrial Tariff - Direct Debit
      28                   Farm Economy 7 - Credit
      29                   Farm Economy 7 - Direct Debit
      30                   Commercial Day/Night Tariff - Credit
      31                   Commercial Day/Night Tariff - Direct Debit
      32                   Commercial 17/7 Tariff - Credit
      33                   Commercial 17/7 Tariff - Direct Debit
      34                   Industrial Day/Night Tariff - Credit
      35                   Industrial Day/Night Tariff - Direct Debit
      36                   Industrial 17/7 Tariff - Credit
      37                   Industrial 17/7 Tariff - Direct Debit
      38,39                Industrial Unmetered Supplies
      40                   Commercial Evening/Weekend Tariff - Credit
      41                   Commercial Evening/Weekend Tariff - Direct Debit
      42                   Industrial Evening/Weekend Tariff - Credit
      43                   Industrial Evening/Weekend Tariff - Direct Debit
      44                   Farm Restricted Hours Tariff - Credit
      45                   Farm Restricted Hours Tariff - Direct Debit
      46                   Commercial Restricted Hours Tariff - Credit
      47                   Commercial Restricted Hours Tariff - Direct Debit
      48                   Industrial Restricted Hours Tariff - Credit
      49                   Industrial Restricted Hours Tariff - Direct Debit

SOUTH WESTERN ELECTRCITY Plc

Tariff No.                 Tariff
      1                    Domestic Tariff
      2                    Key Meter Domestic
      3                    Economy 7
      4                    Key Meter Economy 7
      5                    Domestic Night/Day (LA)
      6                    3 Rate Heating Tariff
      7                    Domestic Seasonal Tariff
      8                    Off Peak (7 hour) Tariff (LA)
      9                    Off Peak (Night Only) Tariff (LA)
      10                   Off Peak (LA) Tariff
      11                   Block Tariff
      12                   Key Meter Block Tariff
      13                   Economy 7 Block Tariff
      14                   Key Meter Economy 7 Block Tariff
      15                   Non-Domestic Seasonal
      16                   Economy 7 Day/Night
      17                   Day and Night Tariff (LA)
      18                   Flat Rate (LA)
      19                   Farm Tariff
      20                   Farm Economy 7 Tariff
      21                   Farm Day/Night Tariff (LA)
      22                   Off Peak (7 hour) Tariff
      23                   Off Peak (Night Only) Tariff
      24                   Off Peak (LA) Tariff
      25                   Direct Debit Discount
<PAGE>

YORKSHIRE ELECTRICITY GROUP Plc

Tariff No.                 Tariff
      1                    Domestic Unrestricted
      2                    Economy 7
      3                    Domestic Off-Peak
      4                    Prepayment
      5                    Prompt Payment
      6                    Automated Payment
      7                    General Quarterly
      8                    Economy 7 Quarterly
      9                    Evening/Weekend Quarterly
      10                   Evening/ Weekend E7 Quarterly
      11                   Farm Off-Peak
      12                   Commercial 2 Rate Tariff
      13                   Commercial Off Peak
      14                   Industrial Off Peak Tariff
      15                   Prompt Payment
      16                   Automated Payment





<PAGE>


ANNEX B to Condition 29A

Preserved Tariffs

EASTERN ELECTRICITY Plc

Tariff No,                 Tariff

      4                    Domestic General Prepayment - Lock Off Meter
      8                    Domestic Night/Day Table 1
      9                    Domestic Night/Day Table 2
      13                   Restricted Hours 1 - Table 1
      14                   Restricted Hours 1- Table 2
      15                   Restricted Hours 2 - Table 1
      16                   Restricted Hours 2 - Table 2
      17                   Restricted Hours 3 - Table 1
      18                   Restricted Hours 3 - Table 2
      33,34                Business & Enterprise Night/Day Table 1
      35,36                Business & Enterprise Night/Day Table 2
      37 ,38               Business & Enterprise Evening/Weekend Table 1
      39,40                Business & Enterprise Evening/Weekend Table 2

EAST MIDLANDS ELECTRICITY Plc

Tariff No.                 Tariff

      5                    Restricted Hours Tariff 1 - Domestic
      6                    Restricted Hours Tariff 2 - Domestic
      7                    Restricted Hours Tariff 3 - Domestic
      13                   Restricted Hours Tariff 1 - Non-Domestic
      14                   Restricted Hours Tariff 2 - Non-Domestic
      15                   Restricted Hours Tariff 3 - Non-Domestic

LONDON ELECTRICITY Plc

Tariff No.                 Tariff
      10                   Off Peak Rate 4
      11                   Off Peak Rate 5
      12                   Off Peak Rate 6
      13                   Domestic Unpublished Supplies
      23                   Off Peak Rate 7
      24                   Off Peak Rate 8
      25                   Off Peak Rate 9
      26                   Business Unmetered supplies
      27,28                Business Staircase
      29                   Catering

MANWEB Plc

Tariff No.                 Tariff
      5                    Off Peak
      6                    White Meter
      9                    3T
      12                   4S
      13                   4T
      14                   4E
      15                   M4


<PAGE>

MIDLANDS ELECTRICITY Plc

Tariff No.                 Tariff
      7                    OP1 - Off Peak Tariff
      8                    OP2 - Off Peak Tariff
      9                    OP3 - Off Peak Tariff
      16                   OP1 - Off Peak Non-Domestic Tariff
      17                   OP2 - Off Peak Non-Domestic Tariff
      18                   OP3 - Off Peak Non-Domestic Tariff

NORTHERN ELECTRIC Plc

Tariff No.                 Tariff

      10                   Staff Tariff
      11                   Heat Plan

NORWEB Plc

Tariff No.                 Tariff
      8                    R16 7 Hour Off Peak Tariff
      9                    R11 Tariff
      10                   R21 Domestic Tariff
      22                   R31 Non-Domestic
      23                   R41 Tariff
      24                   R42 Tariff
      25                   R43 Tariff
      26                   R51 Floor Warming Tariff

SEEBOARD Plc

Tariff No.                 Tariff

      3                    Domestic White Meter
      7                    Business White Meter
      9                    Off Peak

SOUTHERN ELECTRIC Plc

Tariff No.                 Tariff

      11                   Domestic White Meter
      12                   Domestic White Meter (Direct Debit)
      13,23                Restricted Hours
      14,24                Restricted Hours (Direct Debit)

SOUTH WALES ELECTRICITY Plc

Tariff No.                 Tariff

      3                    Domestic Restricted Hours Tariff - Credit
      4                    Domestic Restricted Hours Tariff - Direct Debit
      5                    Domestic White Meter Tariff - Credit
      6                    Domestic White Meter Tariff - Direct Debit
      15                   Farm Domestic White Meter Tariff - Credit
      16                   Farm Domestic White Meter Tariff - Direct Debit
      30                   Commercial Day/Night Tariff - Credit
      31                   Commercial Day/Night Tariff - Direct Debit
      34                   Industrial Day/Night Tariff - Credit
      35                   Industrial Day/Night Tariff - Direct Debit
      44                   Farm Restricted Hours Tariff - Credit
      45                   Farm Restricted Hours Tariff - Direct Debit
      46                   Commercial Restricted Hours Tariff - Credit
      47                   Commercial Restricted Hours Tariff - Direct Debit
      48                   Industrial Restricted Hours Tariff - Credit
      49                   Industrial Restricted Hours Tariff - Direct Debit


<PAGE>

SOUTH WESTERN ELECTRICITY Plc

Tariff No.                 Tariff
      5                    Domestic Day/Night (LA)
      8                    Off Peak (7 hour) Tariff (LA)
      9                    Off Peak Night Only Tariff  (LA)
      10                   Off Peak (LA) Tariff
      17                   Day and Night Tariff (LA)
      18                   Flat Rate (LA)
      21                   Farm Day/Night Tariff (LA)
      22                   Off Peak (7 hour) Tariff (LA)
      23                   Off Peak Night Only Tariff (LA)
      24                   Off Peak (LA) Tariff

YORKSHIRE ELECTRICITY GROUP Plc

Tariff No.                 Tariff
      3                    Domestic Off-Peak
      11                   Farm Off-Peak
      12                   Commercial 2 Rate Tariff
      13                   Commercial Off Peak
      14                   Industrial Off Peak Tariff



<PAGE>




ANNEX C to Condition 29A

Value of Xa

EASTERN ELECTRICITY Plc                     Xa                8.9

EAST MIDLANDS ELECTRICITY Plc               Xa                6.3

LONDON ELECTRICITY Plc                      Xa                11.8

MANWEB Plc                                  Xa                5.8

MIDLANDS ELECTRICITY Plc                    Xa                7.1

NORTHERN ELECTRICITY Plc                    Xa                4.2

NORWEB Plc                                  Xa                3.4

SEEBOARD Plc                                 Xa                6.0

SOUTHERN ELECTRIC Plc                        Xa                3.2

SWALEC Plc                                   Xa                8.5

SOUTH WESTERN ELECTRICITY Plc               Xa                6.6

YORKSHIRE ELECTRICITY GROUP Plc             Xa                3.7




<PAGE>

<TABLE>
<CAPTION>



ANNEX D TO CONDITION 29A

                                    THE TABLE

EASTERN ELECTRICITY PLC

-----------------------------------------------------------------------------------------------------------------------------------
     Number         Description of Tariff          Category             Component           Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                               GWh)
----------------------------------------------------------------------------------------------------------------------------------

       <S>     <C>                             <C>                  <C>                       <C>          <C>           <C>
        1       Domestic General Table 2           Domestic          Standing Charge             2548          1146144     1146144
                                                                       Primary Unit              7.15         27799.08
                                                                     Additional Unit             6.70          1245.83

        2       Domestic General Table 1           Domestic          Standing Charge             2444          530239       530239
                                                                       Primary Unit              7.02          1338.23
                                                                     Additional Unit             6.57          594.54

        3       Domestic General Prepayment        Domestic          Standing Charge             3744          118172       118172
                                                                       Primary Unit              7.15          404.80
        4       Domestic General Prepayment        Domestic          Standing Charge             3640           4543         4543
                Lock-Off Meter                                         Primary Unit              7.15           14.23
                                                                      Addition Unit              6.70           6.33

        5       Domestic Economy 7 Table 1         Domestic          Standing Charge             3692          287625       287625
                                                                    Primary Day Units            7.22          670.21
                                                                   Additional Day Units          7.02          298.30
                                                                       Night Units               2.51          800.30

        6       Domestic Economy 7 Table 2         Domestic          Standing Charge             3796          466260       466260
                                                                    Primary Day Units            7.35          1133.43
                                                                   Additional Day Units          7.15          504.47
                                                                       Night Units               2.55          1558.10

        7       Domestic Economy 7 PPM             Domestic          Standing Charge             4992          244936       244936
                                                                    Primary Day Units            7.35          678.09
                                                                       Night Units               2.55          385.90

        8       Domestic Night/Day Tariff          Domestic          Standing Charge             3692           14259       14259
                Table 1                                                 Day Units                8.23           46.33
                                                                   Primary Night Units           3.59           25.30
                                                                  Additional Night Units         3.19           11.26

        9       Domestic Night/Day Tariff          Domestic          Standing Charge             3796           33932       33932
                Table 2                                                 Day Units                8.36           108.5
                                                                   Primary Night Units           3.64           76.23
                                                                  Additional Night Units         3.24           33.93

       10       Domestic Low User Tariff           Domestic             Unit Rate                9.55           0.07          83
                Table 1

       11       Domestic Low User Tariff           Domestic             Unit Rate                9.70           0.15         167
                Table 2

<PAGE>

     Number         Description of Tariff          Category             Component           Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   -------------------------------------------------------------------------------------------------------------------------------
          12       Domestic Economy 10 Table 1        Domestic          Standing Charge          3692           7660         7660
                                                                    Primary Day Units            7.22           19.24
                                                                     Additional Units            7.02           8.56
                                                                       Night Units               3.23           3.70
                                                                      Heating Units              3.23           90.70

       13       Domestic Economy 10 Table 2        Domestic          Standing Charge             3796           14825       14825
                                                                    Primary Day Units            7.35           33.7
                                                                     Additional Units            7.15           15.00
                                                                       Night Units               3.27           10.40
                                                                      Heating Units              3.27           94.81

       14       Restricted Hours Tariff 1          Domestic          Standing Charge              832           4173         4173
                Table 1                                                 Unit Rate                4.06           1.86

       15       Restricted Hours Tariff 1          Domestic          Standing Charge              884           12164       12164
                Table 2                                                 Unit Rate                4.11           82.50

       16       Restricted Hours Tariff 2          Domestic          Standing Charge              832           1532         1532
                Table 1                                                 Unit Rate                4.50           0.83

       17       Restricted Hours Tariff 2          Domestic          Standing Charge              884           3355         3355
                Table 2                                                 Unit Rate                4.55           27.64

       18       Restricted Hours Tariff 3          Domestic          Standing Charge              832            495         495
                Table 1                                                 Unit Rate                3.23           0.10

       19       Restricted Hours Tariff 3          Domestic          Standing Charge              884           1562         1562
                Table 2                                                 Unit Rate                3.27           11.79

       20       Business & Enterprise General    Non-Domestic    Stdg Chrg - Single Phase        2444           6795         6795
                Table1                                              Bus. Primary Units           7.32           11.49
                                                                  Bus. Additional Units          7.07           5.12
                                                                    Dom. Primary Units           7.02           1.06
                                                                  Dom. Additional Units          6.57           0.47

       21       Business & Enterprise General   Non - Domestic   Stdg Chrg - Three Phase         4940           3989         3989
                Table1                                              Bus. Primary Units           7.32           17.44
                                                                  Bus. Additional Units          7.07           7.76

       22       Business & Enterprise General   Non - Domestic   Stdg Chrg - Single Phase        2548           52511       52511
                Table 2                                             Bus. Primary Units           7.45           95.23
                                                                  Bus. Additional Units          7.20          218.95
                                                                    Dom. Primary Units           7.15           3.52
                                                                  Dom. Additional Units          6.70           1.57

       23       Business & Enterprise General   Non - Domestic   Stdg Chrg - Three Phase         5044           18189       18189
                Table 2                                             Bus. Primary Units           7.45           72.21
                                                                  Bus. Additional Units          7.20           32.14


<PAGE>


----------------------------------------------------------------------------------------------------------------------------------
     Number         Description of Tariff          Category             Component           Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   --------------------------------------------------------------------------------------------------------------------------------
       24       Business & Enterprise General   Non - Domestic          Stdg Chrg                4888            330         330
                Prepayment                                          Bus. Primary Units           7.45           1.06

       25       Business & Enterprise Economy   Non - Domestic   Stdg Chrg - Single Phase        3692           1336         1336
                7 Table 1                                           Bus. Primary Units           7.47           4.54
                                                                  Bus. Additional Units          7.22           2.02
                                                                        Bus. Night               2.51           3.30
                                                                    Dom. Primary Units           7.22           1.15
                                                                  Dom. Additional Units          7.02           0.51
                                                                      Domestic Night             2.51           0.54

       26       Business & Enterprise Economy   Non- Domestic    Stdg Chrg - Three Phase         4940           2953         2953
                7 Table 1                                           Bus. Primary Units           7.47           12.88
                                                                  Bus. Additional Units          7.22           5.73
                                                                       Night Units               2.51           9.97

       27       Business & Enterprise Economy   Non- Domestic    Stdg Chrg - Single Phase        3796           6253         6253
                7 Table 2                                           Bus. Primary Units           7.60           15.16
                                                                  Bus. Additional Units          7.35           6.75
                                                                     Bus. Night Units            2.55           10.52
                                                                    Dom. Primary Units           7.35           2.44
                                                                  Dom. Additional Units          7.15           1.09
                                                                     Dom. Night Units            2.55           2.03

       28       Business & Enterprise Economy   Non - Domestic   Stdg Chrg - Three Phase         5044           7167         7167
                7 Table 2                                           Bus. Primary Units           7.60           33.00
                                                                  Bus. Additional Units          7.35           14.69
                                                                       Night Units               2.55           20.00

       29       Business & Enterprise Economy   Non - Domestic          Stdg Chrg                6136           1066         1066
                7 Prepayment                                        Bus. Primary Units           7.60           0.98
                                                                       Night Units               2.55           0.45

       30       B & E Evening/Weekend           Non - Domestic   Stdg Chrg - Single Phase        3692            893         893
                E7 Table 1                                            Primary Units              9.26           2.44
                                                                     Additional Units            9.01           1.09
                                                                         WE Units                4.55           2.44
                                                                       Night Units               2.51           2.89

       31       B & E Evening/Weekend E7        Non - Domestic   Stdg Chrg - Three Phase         4940           1497         1497
                Table 1                                               Primary Units              9.26           4.52
                                                                     Additional Units            9.01           2.01
                                                                         WE Units                4.55           3.95
                                                                       Night Units               2.51           4.06

       32       B & E Evening/Weekend E7        Non - Domestic   Stdg Chrg - Single Phase        3796           1782         1782
                Table 2                                               Primary Units              9.40           5.77
                                                                     Additional Units            9.15           2.57
                                                                         WE Units                4.60           4.99
                                                                       Night Units               2.55           3.54

       33       B & E Evening/Weekend E7        Non - Domestic   Stdg Chrg - Three Phase         5044           3152         3152
                Table 2                                               Primary Units              9.40           11.01
                                                                     Additional Units            9.15           4.90
                                                                         WE Units                 4.6           8.57
                                                                       Night Units               2.55           6.31

       34       B & E Night/Day Tariff Table 1  Non - Domestic   Stdg Chrg - Single Phase        3692           3440         3440
                                                                        Day Units                8.58           0.96
                                                                       Night Units               3.59           1.19

       35       B & E Night/Day Tariff Table 1  Non - Domestic   Stdg Chrg - Three Phase         4940            360         360
                                                                        Day Units                8.58           1.98
                                                                       Night Units               3.59           1.56

       36       B & E Night/Day Tariff Table 2  Non - Domestic   Stdg Chrg - Single Phase        3796           5765         5765
                                                                        Day Units                8.72           3.20
                                                                       Night Units               3.64           2.74

       37       B & E Night/Day Tariff Table 2  Non - Domestic   Stdg Chrg - Three Phase         5044           1466         1466
                                                                        Day Units                8.72           6.41
                                                                       Night Units               3.64           5.25

       38       B & E Evening/Weekend Table 1   Non - Domestic   Stdg Chrg - Single Phase        3692           1501         1501
                                                                    Primary Day Units            9.26           4.13
                                                                     Additional Units            9.01           1.84
                                                                      Weekend Units              4.35           7.00

       39       B & E Evening/Weekend Table 1   Non - Domestic   Stdg Chrg - Three Phase         4940           3472         3472
                                                                    Primary Day Units            9.26           10.73
                                                                     Additional Units            9.01           4.78
                                                                      Weekend Units              4.35           18.87

       40       B & E Evening/Weekend           Non - Domestic   Stdg Chrg - Single Phase        3796           5881         5881
                Table 2                                             Primary Day Units            9.40           9.30
                                                                     Additional Units            9.15           4.13
                                                                      Weekend Units              4.40           15.33

       41       B & E Evening/Weekend Table 2   Non - Domestic   Stdg Chrg - Three Phase         5044           5353         5353
                                                                    Primary Day Units            9.40           16.74
                                                                     Additional Units            9.15           7.45
                                                                      Weekend Units              4.40           28.51



<PAGE>


EAST MIDLANDS ELECTRICITY PLC

   -------------------------------------------------------------------------------------------------------------------------------
     Number         Description of Tariff          Category             Component           Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   --------------------------------------------------------------------------------------------------------------------------------
        1       Standard                           Domestic          Standing Charge             3372          1061207     1061207
                                                                        Unit Rate                6.69          3015.13

        2       Economy 7                          Domestic          Standing Charge             5040          1054502     1054502
                                                                        Day Units                6.88          3319.00
                                                                       Night Units               2.45          2094.04

        3       Card Meter                         Domestic          Standing Charge             2144          279957       279957

        4       Heatwise                           Domestic          Standing Charge             1524           44022       44022
                                                                     Night/Eve Units             2.67          170.43
                                                                     Afternoon Units             2.67           97.11
                                                                       Boost Units               6.88           1.09

        5       Restricted Hour Tariff 1           Domestic          Standing Charge             1368            678         678
                                                                       Unit Charge               3.25           2.47

        6       Restricted Hour Tariff 2           Domestic          Standing Charge             1368           3364         3364
                                                                       Unit Charge               3.77           16.35

        7       Restricted Hour Tariff 3           Domestic          Standing Charge             1368           2357         2357
                                                                       Unit Charge               4.09           10.89

        8       Direct Debit Discount              Domestic      Standing Charge Discount        -500          707301       707301

        9       Block                           Non - Domestic       Standing Charge             4896           61113       61113
                                                                      Primary Units              8.64          111.69
                                                                     Secondary Units             6.69          100.36

       10       Economy 7 Block                 Non - Domestic       Standing Charge             6612           25149       25149
                                                                      Primary Units              8.64           55.53
                                                                     Secondary Units             6.84           44.84
                                                                       Night Units               2.45           44.07

       11       Evening and Weekend             Non - Domestic       Standing Charge             6612           1877         1877
                                                                      Primary Units              10.07          2.70
                                                                     Secondary Units             8.55           0.78
                                                                        EWE Units                3.13           5.37

       12       Evening and Weekend Economy 7   Non - Domestic       Standing Charge             7164           4344         4344
                                                                      Primary Units              10.07          6.47
                                                                     Secondary Units             8.55           1.70
                                                                        EWE Units                3.32           8.30
                                                                       Night Units               2.45           4.97

       13       Restricted Hour Tariff 1        Non - Domestic       Standing Charge             1368            182         182
                                                                       Unit Charge               3.25           0.49

<PAGE>

   --------------------------------------------------------------------------------------------------------------------------------
     Number         Description of Tariff          Category             Component           Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

       14       Restricted Hour Tariff 2        Non - Domestic       Standing Charge             1368            407         407
                                                                       Unit Charge               3.77           0.98

       15       Restricted Hour Tariff 3        Non - Domestic       Standing Charge             1368            333         333
                                                                       Unit Charge               4.09           0.72

       16       Direct Debit Discount           Non - Domestic   Standing Charge Discount        -1200          17299       17299



<PAGE>


LONDON ELECTRICITY PLC

   --------------------------------------------------------------------------------------------------------------------------------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ------------------------------------------------------------------------------------------------------------------
        1       Domestic General Purpose Rate -       Domestic         Standing Charge          4635.5         897732       897732
                Quarterly Bill
                Domestic General Purpose Rate -       Domestic            Unit Rate              6.83          2942.00
                Quarterly Bill

        2       Domestic General Purpose Rate -       Domestic         Standing Charge          6533.5         361274       361274
                Powerkey Meter
                Domestic General Purpose Rate -       Domestic            Unit Rate              6.60          1071.00
                Powerkey Meter

        3       Domestic General Purpose Rate -       Domestic         Standing Charge           4453          333211       333211
                Direct Debit
                Domestic General Purpose Rate -       Domestic            Unit Rate              6.55          1278.00
                Direct Debit

        4       Domestic Economy 7 Rate -             Domestic         Standing Charge          5803.5          76096       76096
                Quarterly Bill
                Domestic Economy 7 Rate -             Domestic            Day Units              7.40          238.00
                Quarterly Bill
                Domestic Economy 7 Rate -             Domestic           Night Units             2.70          303.00
                Quarterly Bill

        5       Domestic Economy 7 Rate -             Domestic         Standing Charge           7300           31495       31495
                Powerkey Meter
                Domestic Economy 7 Rate -             Domestic            Day Units              7.15           87.00
                Powerkey Meter
                Domestic Economy 7 Rate -             Domestic           Night Units             2.61           97.00
                Powerkey Meter

        6       Domestic Economy 7 Rate - Direct      Domestic         Standing Charge          5584.5          39528       39528
                Debit
                Domestic Economy 7 Rate - Direct      Domestic            Day Units              7.10          137.00
                Debit
                Domestic Economy 7 Rate - Direct      Domestic           Night Units             2.59          161.00
                Debit

        7       Domestic Economy 9 Rate -             Domestic         Standing Charge           6205            608         608
                Quarterly Bill
                Domestic Economy 9 Rate -             Domestic            Day Units              7.40           2.00
                Quarterly Bill
                Domestic Economy 9 Rate -             Domestic           Night Units             2.99           2.00
                Quarterly Bill

        8       Domestic Economy 9 Rate - Direct      Domestic         Standing Charge          5949.5           209         209
                Debit
                Domestic Economy 9 Rate - Direct
                Debit                                 Domestic            Day Units              7.10           1.00
                Domestic Economy 9 Rate - Direct
                Debit                                 Domestic           Night Units             2.87           1.00
<PAGE>

   --------------------------------------------------------------------------------------------------------------------------------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ -------------------------------------------------------------------------------------------------------------------
        9       White Meter Rate                      Domestic         Standing Charge          5803.5          3667         3667
                White Meter Rate                      Domestic            Day Units              7.40           12.00
                White Meter Rate                      Domestic           Night Units             3.25           12.00

       10       Rate D4                               Domestic         Standing Charge           1168           1545         1545
                Rate D4                               Domestic            Unit Rate              3.25           7.00

       11       Rate D5                               Domestic         Standing Charge           1168           6016         6016
                Rate D5                               Domestic            Unit Rate              3.91           29.00

       12       Rate D6                               Domestic         Standing Charge           1168           2117         2117
                Rate D6                               Domestic            Unit Rate              4.38           16.00

       13       Domestic Unpublished                  Domestic         Standing Charge           8852           2190         2190
                Domestic Unpublished                  Domestic            Unit Rate              7.68           8.00

       14       Business Standard Rate -           Non - Domestic      Standing Charge          5000.5          45867       45867
                Quarterly Bill                     Non - Domestic
                Business Standard Rate -           Non - Domestic     Primary Unit Rate          8.16          136.00
                Quarterly Bill
                Business Standard Rate -                             Secondary Unit Rate         6.79           33.00
                Quarterly Bill

       15       Business Standard Rate -           Non - Domestic      Standing Charge           6862           4058         4058
                Powerkey Meter                     Non - Domestic
                Business Standard Rate -                                  Unit Rate              7.68           14.00
                Powerkey Meter

       16       Business Standard Rate - Direct    Non - Domestic      Standing Charge           4818           12007       12007
                Debit                              Non - Domestic
                Business Standard Rate - Direct    Non - Domestic     Primary Unit Rate          7.83           38.00
                Debit
                Business Standard Rate - Direct                      Secondary Unit Rate         6.52           9.00
                Debit

       17       Business Economy 7 Rate -          Non - Domestic      Standing Charge           6205           2644         2644
                Quarterly Bill                     Non - Domestic
                Business Economy 7 Rate -          Non - Domestic     Primary Unit Rate          8.51           8.00
                Quarterly Bill                     Non - Domestic
                Business Economy 7 Rate -                            Secondary Unit Rate         7.35           0.00
                Quarterly Bill
                Business Economy 7 Rate -                                Night Units             2.70           6.00
                Quarterly Bill

       18       Business Economy 7 Rate -          Non - Domestic      Standing Charge          7701.5           54           54
                Powerkey Meter                     Non - Domestic
                Business Economy 7 Rate -          Non - Domestic     Primary Unit Rate          8.03           0.13
                Powerkey Meter
                Business Economy 7 Rate -                                Night Units             2.61           0.09
                Powerkey Meter
<PAGE>

   --------------------------------------------------------------------------------------------------------------------------------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ -------------------------------------------------------------------------------------------------------------------
       19       Business Economy 7 Rate - Direct   Non - Domestic      Standing Charge          5949.5          1479         1479
                Debit                              Non - Domestic
                Business Economy 7 Rate - Direct   Non - Domestic     Primary Unit Rate          8.16           4.00
                Debit                              Non - Domestic
                Business Economy 7 Rate - Direct                     Secondary Unit Rate         7.06           0.00
                Debit
                Business Economy 7 Rate - Direct                         Night Units             2.59           2.00
                Debit

       20       Business Evening/Weekend Rate -    Non - Domestic      Standing Charge          6314.5          1346         1346
                Quarterly Bill                     Non - Domestic
                Business Evening/Weekend Rate -    Non - Domestic     Primary Unit Rate          10.29          2.00
                Quarterly Bill                     Non - Domestic
                Business Evening/Weekend Rate -                      Secondary Unit Rate         8.80           0.00
                Quarterly Bill
                Business Evening/Weekend Rate -                          Other Units             3.83           5.00
                Quarterly Bill

       21       Business Evening/Weekend Rate -    Non - Domestic      Standing Charge           7811             7           7
                Powerkey Meter                     Non - Domestic
                Business Evening/Weekend Rate -    Non - Domestic     Primary Unit Rate          9.71           0.01
                Powerkey Meter
                Business Evening/Weekend Rate -                          Other Units             3.71           0.02
                Powerkey Meter

       22       Business Evening/Weekend Rate -    Non - Domestic      Standing Charge           6059           1525         1525
                Direct Debit                       Non - Domestic
                Business Evening/Weekend Rate -    Non - Domestic     Primary Unit Rate          9.88           2.00
                Direct Debit                       Non - Domestic
                Business Evening/Weekend Rate -                      Secondary Unit Rate         8.45           0.00
                Direct Debit
                Business Evening/Weekend Rate -                          Other Units             3.68           5.00`
                Direct Debit

       23       Business Tariff D7                 Non - Domestic      Standing Charge           1168            477         477
                                                   Non - Domestic
                Business Tariff D7                                        Unit Rate              3.25           2.00

       24       Business Tariff D8                 Non - Domestic      Standing Charge           1168            91           91
                                                   Non - Domestic
                Business Tariff D8                                        Unit Rate              3.99           0.38

       25       Business Tariff D9                 Non - Domestic      Standing Charge           1168            164         164
                                                   Non - Domestic
                Business Tariff D9                                        Unit Rate              4.38           1.00

<PAGE>

   --------------------------------------------------------------------------------------------------------------------------------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ -------------------------------------------------------------------------------------------------------------------
       26       Business Unmetered Supplies        Non - Domestic         Unit Rate              6.73           0.00

       27       Business Staircase Rate            Non - Domestic      Standing Charge          2956.5          3454         3454
                                                   Non - Domestic
                Business Staircase Rate            Non - Domestic     Primary Unit Rate          8.16           1.00

                Business Staircase Rate                              Secondary Unit Rate         6.79           0.00

       28       Business Staircase Rate            Non - Domestic      Standing Charge          2956.5          4001         4001
                                                   Non - Domestic
                Business Staircase Rate            Non - Domestic     Primary Unit Rate          7.83           2.00

                Business Staircase Rate                              Secondary Unit Rate         6.52           0.00

       29       Business Catering Rate             Non - Domestic         Unit Rate              7.68           1.00

   --------------------------------------------------------------------------------------------------------------------------------



<PAGE>


MANWEB PLC

   --------------------------------------------------------------------------------------------------------------------------------
     Number         Description of Tariff          Category             Component           Price PO (Unit   Quantity QO      NC
                                                                                             Rate in pence    (Unit rate
                                                                                               per kWh)        in GWh)

   --------------------------------------------------------------------------------------------------------------------------------
        1       Domestic                           Domestic          Standing Charge             4621          1117013      1117013
                                                                        Unit Rate                6.97          3981.00

        2       Select                             Domestic             Unit Rate                11.42           5.00

        3       Prepayment                         Domestic          Standing Charge             2121           270000      270000

        4       Economy 7                          Domestic          Standing Charge             5920           99740        99740
                                                                        Day Units                7.31           269.00
                                                                       Night Units               2.71           572.00

        5       Off Peak                           Domestic          Standing Charge             1299           17345        17345
                                                                         `A' Unit                3.99           11.00
                                                                         `C' Unit                3.15           25.00
                                                                         `D' Unit                3.76           21.00
                                                                         `E' Unit                2.72           44.00
                                                                         `S' Unit                4.73            3.00

        6       White Meter                        Domestic          Standing Charge             5920            2118        2118
                                                                        Day Units                8.02            7.00
                                                                       Night Units               3.15            8.00

        7       Option 14                          Domestic          Standing Charge             6643            1234        1234
                                                                        Peak Units               8.49            3.00
                                                                        Day Units                3.25            8.00

        8       3S                              Non - Domestic       Standing Charge             6752           48424        48424
                                                                        Unit Rate                6.98           217.87
        9       3T                              Non - Domestic       Standing Charge             14636            70          70
                                                                        Peak Units               22.53           0.02
                                                                       Other Units               6.08            0.47

       10       3E                              Non - Domestic       Standing Charge             8067            4005        4005
                                                                        Day Units                7.36           14.85
                                                                       Night Units               2.57            9.31

       11       M3                              Non - Domestic       Standing Charge             8431            863          863
                                                                      Weekday Units              9.00            2.07
                                                                         Evenings                4.40            0.67
                                                                         Weekends                4.40            1.12
                                                                          Night                  2.34            1.14

       12       4S                              Non - Domestic       Standing Charge             6752             79          79
                                                                        Unit Rate                6.89            0.42

       13       4T                              Non - Domestic       Standing Charge             14636            1            1
                                                                       Other Units               6.03            0.00
                                                                        Peak Units               22.54           0.00

<PAGE>
      Number      Description of Tariff      Category                Component            Price PO (Unit    Quantity        NC
                                                                                           Rate in pence    QO (Unit
                                                                                             per kWh)        rate in
                                                                                                              GWh)

   --------------------------------------------------------------------------------------------------------------------------------
        14        4E                      Non - Domestic          Standing Charge              8067             2            2
                                                                     Day Units                 7.17           0.01
                                                                    Night Units                2.53           0.01

        15        M4                      Non - Domestic          Standing Charge              8431            12           12
                                                                      Weekday                  7.88           0.02
                                                                      Evening                  4.28           0.00
                                                                       Night                   4.28           0.01
                                                                        Peak                   2.33           0.01
                                                                                               21.64          0.00

        16        Prepayment                 Domestic                 Discount                -481.5         270000       270000

        17        Direct Debit               Domestic                 Discount                 -1000         330000       330000


<PAGE>


MIDLANDS ELECTRICITY PLC

      Number         Description of Tariff          Category             Component           Price PO (Unit   Quantity QO      NC
                                                                                             Rate in pence    (Unit rate
                                                                                               per kWh)        in GWh)

   --------------------------------------------------------------------------------------------------------------------------------
        1       D1                                 Domestic          Standing Charge             3172           967658      967658
                                                                          Units                  6.84          3366.48

        2       D1 DD                              Domestic          Standing Charge             3172           478000      478000
                                                                          Units                  6.61          1685.00

        3       D8                                 Domestic          Standing Charge             4120           253000      253000
                                                                          Units                  6.84           930.00

        4       D5                                 Domestic          Standing Charge             4568           200612      200612
                                                                        Day Units                7.41           607.74
                                                                       Night Units               2.75           789.00

        5       D5 DD                              Domestic          Standing Charge             4568           105500      105500
                                                                        Day Units                7.15           369.00
                                                                       Night Units               2.75           406.00

        6       D6                                 Domestic          Standing Charge             6252           61250        61250
                                                                        Day Units                7.41           190.00
                                                                       Night Units               2.75           212.00

        7       OP1                                Domestic          Standing Charge             1132            9617        9617
                                                                          Units                  3.17           32.79

        8       OP2                                Domestic          Standing Charge             1132           13020        13020
                                                                          Units                  3.52           62.23

        9       OP3                                Domestic          Standing Charge             1132           12368        12368
                                                                          Units                  3.77           35.87

       10       S                               Non - Domestic       Standing Charge             3516           71937        71937
                                                                          Units                  7.16           255.63

       11       S DD                            Non - Domestic       Standing Charge             3516           14630        14630
                                                                          Units                  7.16           52.60

       12       S1                              Non - Domestic       Standing Charge             5060            8129        8129
                                                                          Units                  7.70           20.86
                                                                       Night Units               2.75           23.05

       13       S1 DD                           Non - Domestic       Standing Charge             5060            1215        1215
                                                                       Day 7 Units               7.55            2.90
                                                                       Night Units               2.75            3.76

       14       W                               Non - Domestic       Standing Charge             5060            2366        2366
                                                                      Weekday Units              9.27            2.43
                                                                       Other Units               4.35            5.67

<PAGE>

      Number      Description of Tariff      Category                Component            Price PO (Unit    Quantity        NC
                                                                                           Rate in pence    QO (Unit
                                                                                             per kWh)        rate in
                                                                                                              GWh)

   --------------------------------------------------------------------------------------------------------------------------------
        15        W DD                    Non - Domestic          Standing Charge              5060            292          292
                                                                   Weekday Units               9.09           0.31
                                                                    Other Units                4.35           0.73

        16        OPI                     Non - Domestic          Standing Charge              1132           1797         1797
                                                                       Units                   3.17           6.62

        17        OP2                     Non - Domestic          Standing Charge              1132            899          899
                                                                       Units                   3.52           3.55
        18        OP3                      Non- Domestic          Standing Charge              1132            403          403
                                                                       Units                   3.77           1.66

   -------------------------------------------------------------------------------------------------------------------------------



<PAGE>


NORTHERN ELECTRIC PLC

   -------------------------------------------------------------------------------------------------------------------------------
     Number         Description of Tariff          Category             Component           Price PO (Unit   Quantity QO      NC
                                                                                             Rate in pence    (Unit rate
                                                                                               per kWh)        in GWh)

   ------------ ------------------------------------------------------------------------------------------------------------------
        1       D1 Unrestricted                    Domestic          Standing Charge             4372          1040796      1040796
                D1 Unrestricted                    Domestic               Units                  7.20          2361.33
                D1 Unrestricted                    Domestic               Units                  6.46          1068.50

        2       D1T E7                             Domestic          Standing Charge             5464           72971        72971
                D1T E7                             Domestic             Day Units                 7.5           102.07
                D1T E7                             Domestic             Day Units                6.75           125.84
                D1T E7                             Domestic            Night Units               2.45           344.26

        3       SUD (Small Users Dom.)             Domestic               Units                  9.90            0.40         403


        4       K1 Prepayment                      Domestic          Standing Charge             6560           110061      110061
                K1 Prepayment                      Domestic               Units                  6.82           289.83

        5       KIT E7 Prepayment                  Domestic          Standing Charge             7648            7908        7908
                KIT E7 Prepayment                  Domestic             Day Units                7.32           21.63
                KIT E7 Prepayment                  Domestic            Night Units               2.45           34.68

        6       Super Tariff                       Domestic          Standing Charge             6112           23860        23860
                Super Tariff                       Domestic             Day Units                7.20           61.38
                Super Tariff                       Domestic            Night Units               3.08           13.13
                Super Tariff                       Domestic             Heat Units               2.34           172.96

        7       RH1 Off-Peak                       Domestic           Off-Peak Units             3.03            2.44

        8       RH2 Off-Peak                       Domestic           Off-Peak Units             3.73           19.54

        9       RH3 & RHB Off-Peak                 Domestic           Off-Peak Units             4.05            4.91

       10       Staff Rates                        Domestic               Units                  7.00            0.14

       11       Heatplan                           Domestic               Units                  2.60            0.52

       12       Evening & Weekend               Non -Domestic        Standing Charge             5764            686          686
                                                Non -Domestic
                                                Non - Domestic    Weekday Daytime Units          10.41           1.77

                                                                 Evening & Weekend Units         4.90           0.10.

       13       EWS (EW small user)             Non - Domestic       Standing Charge             4372            0.00          0
                EWS                             Non - Domestic
                                                                          Units                  9.90            0.00
<PAGE>


   --------------------------------------------------------------------------------------------------------------------------------
      Number      Description of Tariff      Category                Component            Price PO (Unit    Quantity        NC
                                                                                           Rate in pence    QO (Unit
                                                                                             per kWh)        rate in
                                                                                                              GWh)

   --------------------------------------------------------------------------------------------------------------------------------
        14        Q1                      Non - Domestic          Standing Charge              4636           52714        52714
                  Q1                      Non - Domestic            Units < 6000               8.30           89.45
                  Q1                      Non - Domestic            Units >6000                7.60          104.60

        15        Q1T                     Non - Domestic          Standing Charge              5752           2293         2293
                  Q1T                     Non - Domestic          Day Units <6000              8.60           2.13
                  Q1T                     Non - Domestic          Day Units >6000              7.90           7.32
                  Q1T                     Non - Domestic            Night Units                2.51           2.75


        16        Super Tariff Business   Non - Domestic          Standing Charge              1880            381          381
                  Super Tariff Business
                  Super Tariff Business   Non - Domestic            Normal Units               7.60           0.89

                                          Non - Domestic             Heat Units                2.34           2.62
        17        RH1 Off-Peak            Non - Domestic           Off-Peak Units              3.03           1.76

        18        RH2 Off-Peak            Non - Domestic           Off-Peak Units              3.73           1.76

        19        RH3 & RHB Off-Peak      Non - Domestic           Off-Peak Units              4.05           0.27

        20        C7 Catering Tariff      Non - Domestic               Units                   6.45           5.23         1400

                  Discount Schemes

        21        Premier Payment Plan       Domestic                 Discount                 -866          358077       358077

        22        Prompt Payment             Domestic         Standing Charge Discount         -400          585766       585766
                  Discount



<PAGE>


NORWEB PLC

   --------------------------------------------------------------------------------------------------------------------------------
     Number           Description of Tariff           Category            Component         Price PO (Unit   Quantity QO      NC
                                                                                             Rate in pence    (Unit rate
                                                                                               per kWh)        in GWh)

   -------------------------------------------------------------------------------------------------------------------------------
        1       D13 Domestic Tariff                   Domestic         Standing Charge           3432           939533      939533
                D13 Domestic Tariff                   Domestic              Units                6.50          2797.29

        2       D11 Domestic Monthly Budget           Domestic         Standing Charge           3332           630329      630329
                Scheme
                D11 Domestic Monthly Budge Scheme     Domestic              Units                6.28          2693.28

        3       D11 Domestic Prepayment               Domestic         Standing Charge           5804           202371      202371
                D11 Domestic Prepayment               Domestic              Units                6.28           705.41

        4       D56 Economy 7 Tariff                  Domestic         Standing Charge           4740           127586      127586
                D56 Economy 7 Tariff                  Domestic            Day Units              7.04           345.05
                D56 Economy 7 Tariff                  Domestic           Night Units             2.46           649.17

        5       D22 Domestic Economy 7 Monthly        Domestic         Standing Charge           4640           82326        82326
                Budget Scheme
                D22 Domestic Economy 7 Monthly        Domestic            Day Units              6.83           320.05
                Budget Scheme
                D22 Domestic Economy 7 Monthly        Domestic           Night Units             2.46           508.39
                Budge Scheme

        6       D22 Domestic Economy 7 Prepayment     Domestic         Standing Charge           7112           21931        21931
                D22 Domestic Economy 7 Prepayment
                D22 Domestic Economy 7 Prepayment     Domestic            Day Units              6.83           71.92

                                                      Domestic           Night Units             2.46           117.90

        7       D92 Domestic Smart 7 Tariff           Domestic         Standing Charge           5268            332         332
                D92 Domestic Smart 7 Tariff           Domestic            Day Units              8.79           0.42
                D92 Domestic Smart 7 Tariff           Domestic      Evening/Weekend Units        4.58           0.93
                                                                         Night Units

                D92 Domestic Smart 7 Tariff           Domestic                                   2.33           3.15

        8       R16 7 Hour Off Peak Tariff            Domestic         Standing Charge           1308           14498       14498
                R16 7 Hour Off Peak Tariff            Domestic            Unit Rate              2.46           60.48

        9       R11 Tariff                            Domestic         Standing Charge           1308            501         501
                R11 Tariff                            Domestic            Unit Rate              2.98           2.83

       10       R21 Domestic                          Domestic         Standing Charge           1308           10551       10551
                R21 Domestic                          Domestic            Unit Rate              3.31           34.45

<PAGE>

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
       11       G13 All Purpose Quarterly Tariff   Non - Domestic      Standing Charge           4436           55505       55505
                G13 All Purpose Quarterly Tariff   Non - Domestic
                G13 All Purpose Quarterly Tariff   Non - Domestic       Primary Units            7.90           58.80

                                                                       Secondary Units           6.08          158.90
       12       G11 All Purpose Monthly Budget     Non - Domestic      Standing Charge           4400           9450         9450
                Scheme Tariff                      Non - Domestic
                G11 All Purpose Monthly Budget     Non - Domestic       Primary Units            7.89           19.70
                Scheme Tariff
                G11 All Purpose Monthly Budget                         Secondary Units           5.96           55.32
                Scheme Tariff

       13       G15 Combined Premises Quarterly    Non - Domestic      Standing Charge           4436           9963         9963
                G15 Combined Premises Quarterly    Non - Domestic
                G15 Combined Premises Quarterly    Non - Domestic       Primary Units            7.90           16.85

                                                                       Secondary Units           5.96           24.59
       14       G16 Combined Premises Monthly      Non - Domestic      Standing Charge           4400           1898         1898
                G16 Combined Premises Monthly      Non - Domestic
                G16 Combined Premises Monthly      Non - Domestic       Primary Units            7.89           4.19

                                                                       Secondary Units           5.96           7.18


       15       G63 Economy 7 All Purpose          Non - Domestic      Standing Charge           5744           2874         2874
                Quarterly Tariff                   Non - Domestic
                G63 Economy 7 All Purpose          Non - Domestic       Primary Units            8.26           3.86
                Quarterly Tariff                   Non - Domestic
                G63 Economy 7 All Purpose                              Secondary Units           6.51           11.42
                Quarterly Tariff
                G63 Economy 7 All Purpose                                Night Units             2.46           10.30
                Quarterly Tariff

       16       G66 Economy 7 All Purpose          Non - Domestic      Standing Charge           5708            644         644
                Monthly Tariff                     Non - Domestic
                G66 Economy 7 All Purpose          Non - Domestic       Primary Units            8.17           0.81
                Monthly Tariff                     Non - Domestic
                G66 Economy 7 All Purpose                              Secondary Units           6.38           2.56
                Monthly Tariff
                G66 Economy 7 All Purpose                                Night Units             2.46           2.20
                Monthly Tariff
<PAGE>

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
       17       G65 Economy 7 Combined Premises    Non - Domestic      Standing Charge           5744            980         980
                Quarterly
                                                   Non - Domestic

                G65 Economy 7 Combined Premises                         Primary Units            8.26           0.57
                Quarterly                          Non - Domestic

                G65 Economy 7 Combined Premises    Non - Domestic      Secondary Units           6.51           0.96
                Quarterly

                G65 Economy 7 Combined Premises                          Night Units             2.46           2.12
                Quarterly

       18       G67 Economy 7 Combined Premises    Non - Domestic      Standing Charge           5708            195         195
                Monthly
                                                   Non - Domestic

                G67 Economy 7 Combined Premises                         Primary Units            8.17           0.14
                Monthly                            Non - Domestic

                G67 Economy 7 Combined Premises    Non - Domestic      Secondary Units           6.38           0.25
                Monthly

                G67 Economy 7 Combined Premises                          Night Units             2.46           0.48
                Monthly


       19       G71 Evening & Weekend Tariff       Non - Domestic      Standing Charge           5796           2780         2780
                                                   Non - Domestic
                G71 Evening & Weekend Tariff       Non - Domestic       Primary Units            9.83           2.91
                                                   Non - Domestic
                G71 Evening & Weekend Tariff                           Secondary Units           7.94           2.29

                G71 Evening & Weekend Tariff                        Evening/Weekend Units        4.09           8.55

       20       G61 Economy 7 Evening/Weekend      Non - Domestic      Standing Charge           6488            390         390
                Quarterly
                                                   Non - Domestic

                G61 Economy 7 Evening/Weekend                           Primary Units            9.83           0.32
                Quarterly                          Non - Domestic

                G61 Economy 7 Evening/Weekend      Non - Domestic      Secondary Units           7.94           0.65
                Quarterly
                                                   Non - Domestic

                G61 Economy 7 Evening/Weekend                       Evening/Weekend Units        4.09           1.31
                Quarterly

                G61 Economy 7 Evening/Weekend                            Night Units             2.46           0.67
                Quarterly

<PAGE>

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
       21       G54 Economy 7 Evening/Weekend      Non - Domestic      Standing Charge           6424            26           26
                Monthly
                                                   Non - Domestic

                G54 Economy 7 Evening/Weekend                           Primary Units            9.76           0.02
                Monthly                            Non - Domestic

                G54 Economy 7 Evening/Weekend      Non - Domestic      Secondary Units           7.88           0.05
                Monthly
                                                   Non - Domestic

                G54 Economy 7 Evening/Weekend                       Evening/Weekend Units        4.07           0.10
                Monthly

                G54 Economy 7 Evening/Weekend                            Night Units             2.46           0.05
                Monthly

       22       R31 Non Domestic                   Non - Domestic      Standing Charge           1308            169         169
                                                   Non - Domestic
                R31 Non Domestic                                          Unit Rate              3.42           0.70

       23       R41 Tariff                         Non - Domestic      Standing Charge           1308           3679         3679
                                                   Non - Domestic
                R41 Tariff                                                Unit Rate              3.59           13.97

       24       R42                                Non - Domestic      Standing Charge           1308            43           43
                                                   Non - Domestic
                R42                                                       Unit Rate              4.02           0.16
       25       R43                                Non - Domestic      Standing Charge           1308            61           61
                                                   Non - Domestic

                R43                                                       Unit Rate              4.17           0.34
       26       R51 Floor Warming Tariff           Non - Domestic      Standing Charge           1308           5732         5732
                                                   Non - Domestic

                R51 Floor Warming Tariff                                  Unit Rate              3.59           16.91

       27       Q64 Farm Crop Drying Tariff        Non - Domestic      Standing Charge           1308            96           96
                                                   Non - Domestic
                Q64 Farm Crop Drying Tariff                               Unit Rate              5.34           0.33


<PAGE>


SEEBOARD PLC

   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------
     Number         Description of Tariff          Category             Component           Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

        1       Domestic Standard                  Domestic               Units                  7.14          4526.00     1244349
                                                                     Standing Charge             1300          1244349

        2       Domestic Economy                   Domestic             Day Units                7.14          1962.00      562551
                                                                       Night Units               2.66          1488.00
                                                                     Standing Charge             2100          562551

        3       Domestic White Meter               Domestic             Day Units                7.73           47.00       13735
                                                                       Night Units               3.35           37.00
                                                                     Standing Charge             2100           13735

        4       Warm Wise                          Domestic             Day Units                8.03           16.00       11232
                                                                       Night Units               2.96           10.00
                                                                     Standing Charge             2920           11232
                                                                      Heating Units              2.46           98.00
                                                                     Evening/Weekend             6.36           18.00

        5       Business Standard                Commercial/              Units                  7.14          215.17       77916
                                                     Ind.            Standing Charge             1300           77916

        6       Business Economy                 Commercial/            Day Units                7.14           89.00       14766
                                                     Ind.              Night Units               2.66           30.00
                                                                     Standing Charge             2100           14766

        7       Business White Meter             Commercial/            Day Units                7.73           1.29         434
                                                     Ind               Night Units               3.35           0.86
                                                                     Standing Charge             2100            434

        8       Business Evening/Weekend/Night   Commercial/            Day Units                9.40           3.51         1313
                                                     Ind             Evening/Weekend             4.30           4.06
                                                                       Night Units               2.66           2.14
                                                                     Standing Charge             2560           1313

        9       Off Peak                          Domestic/           Average Units              4.12           18.58        5258
                                                  Commercial         Standing Charge              688           5258

       10       Prepayment Meter                   Domestic       Standing Charge - Coin         2540            60           60

       11       Prepayment Meter                   Domestic      Standing Charge - Budget        2200          215000       215000

       12       Prepayment Meter                   Domestic              Discount                -800          215060       215060

       13       Direct Debit Discount              Domestic      Standing Charge Discount        -800          685000       685000


<PAGE>


SOUTHERN ELECTRIC PLC

   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------
     Number         Description of Tariff          Category             Component           Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------
        1       General Domestic (Qtrly)           Domestic          Standing Charge             3720          1383722     1383722
                                                                          Units                  6.31          4847.43

        2       General Domestic (Keypayment)      Domestic               Units                  6.23          722.30       228166
                                                                     Standing Charge             3720          228166
                                                                   Keyprepayment Charge          1800          228166

        3       General Domestic (DD)              Domestic          Standing Charge             3720          456719       456719
                                                                          Units                  6.16          2455.82

        4       Flexiheat                          Domestic             Day Units                9.51           4.43         1294
                                                                       Other Units               4.43           2.07
                                                                        Heat Units               2.14           8.27
                                                                     Standing Charge             4720           1294
                                                                       Meter Charge              1000           1294

        5       Flexiheat (DD)                     Domestic             Day Units                9.28           1.94         431
                                                                       Other Units               4.32           0.90
                                                                        Heat Units               2.09           3.61
                                                                     Standing Charge             4720            431
                                                                       Meter Charge              1000            431

        6       Super Deal                         Domestic             Day Units                7.02           51.72       19658
                                                                       Other Units               3.45           17.33
                                                                        Heat Units               2.14           55.70
                                                                     Standing Charge             4720           19658
                                                                       Meter Charge              1000           19658

        7       Super Deal (DD)                    Domestic             Day Units                6.85           22.64        6553
                                                                       Other Units               3.37           7.56
                                                                        Heat Units               2.09           24.30
                                                                     Standing Charge             4720           6553
                                                                       Meter Charge              1000           6553

        8       Economy 7                          Domestic             Day Units                7.02          417.44       154649
                                                                       Night Units               2.38          831.70
                                                                     Standing Charge             4720          154649

        9       Economy 7 (DD)                     Domestic             Day Units                6.85          258.72       72271
                                                                       Night Units               2.32          474.42
                                                                     Standing Charge             4720           72271

       10       Economy 7 (Keypayment)             Domestic             Day Units                6.93          169.32       51051
                                                                       Night Units               2.35          244.27
                                                                     Standing Charge             4720           51051
                                                                     Meter Surcharge             1800           51051
<PAGE>

   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------
     Number         Description of Tariff          Category             Component           Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------
       11       White Meter                        Domestic             Day Units                7.18           9.71         3014
                                                                       Night Units               2.77           12.42
                                                                     Standing Charge             4720           3014

       12       White Meter (DD)                   Domestic             Day Units                7.01           4.24         952
                                                                       Night Units                2.7           5.37
                                                                     Standing Charge             4720            952

       13       Restricted Hour                    Domestic             `A' Units                3.88           16.62       51152
                                                                        `B' Units                 4.3           9.55
                                                                        `Bx' Units               4.19           32.57
                                                                        `E' Units                2.71          133.32
                                                                        `F' Units                3.81           30.85
                                                                        `Fx' Units               3.62           90.75
                                                                     Standing Charge             1080           51152

       14       Resticted Hour (DD)                Domestic             `A' Units                3.79           7.27        17050
                                                                        `B' Units                 4.2           4.18
                                                                        `Bx' Units               4.09           14.23
                                                                        `E' Units                2.65           58.03
                                                                        `F' Units                3.72           13.47
                                                                        `Fx' Units               3.53           39.51
                                                                     Standing Charge             1080           17050

       15       Q1 Block                        Non - Domestic            Units                  6.61          341.13       85282
                                                                     Standing Charge             4520           85282
       16       Q1 Block (DD)                   Non - Domestic            Units                  6.45          113.71       28644
                                                                     Standing Charge             4520           28644

       17       Q2 Day/Night                    Non - Domestic          Day Units                7.17           20.5         6197
                                                                       Night Units               2.38           12.04
                                                                     Standing Charge             5520           6197

       18       Q2 Day/Night (DD)               Non - Domestic          Day Units                  7            6.79         2052
                                                                       Night Units               2.32           3.99
                                                                     Standing Charge             5520           2052

       19       Q3Evening/                      Non - Domestic          Day Units                8.31           3.87         1602
                Weekend                                              Evening/Weekend             3.84           4.54
                                                                     Standing Charge             5520           1602

       20       Q3 Evening/Weekend (DD)         Non - Domestic         Other Units               8.11           1.29         534
                                                                     Evening/Weekend             3.75           1.51
                                                                     Standing Charge             5520            534

       21       Q4 Night/Evening/               Non - Domestic         Other Units               8.31           2.07         1124
                Weekend                                                Night Units               2.38           1.83
                                                                     Evening/Weekend             4.35           2.01
                                                                     Standing Charge             6240           1124
<PAGE>

   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------
     Number         Description of Tariff          Category             Component           Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------
       22       Q4 Night/Evening/               Non - Domestic          Day Units                8.11           0.69         375
                Weekend (DD)                                           Night Units               2.32           0.61
                                                                     Evening/Weekend             4.25           0.67
                                                                     Standing Charge             6240            375

       23       Restricted Hour                 Non - Domestic          `Ac' Units               3.88            3.7         4993
                                                                        `Bc' Units                4.3           2.86
                                                                        `Ec' Units               2.71           8.25
                                                                        `Fc' Units               3.81           2.02
                                                                     Standing Charge             1080           4993

       24       Restricted Hour (DD)            Non - Domestic          `Ac' Units               3.79           1.25         1664
                                                                        `Bc' Units                4.2           0.97
                                                                        `Ec' Units               2.65           2.78
                                                                        `Fc' Units               3.72           0.68
                                                                     Standing Charge             1080           1664

       25       3 Phase Meter                                           Surcharge                1240           5930         5930

   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------



<PAGE>


SOUTH WALES ELECTRICITY PLC

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------- --------
     Number           Description of Tariff           Category            Component         Price PO (Unit   Quantity QO      NC
                                                                                             Rate in pence    (Unit rate
                                                                                               per kWh)        in GWh)

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------- --------
        1       Domestic Basic Tariff - Credit        Domestic         Standing Charge           4400           446472      446472
                Domestic Basic Tariff - Credit        Domestic            Unit Rate              7.82          1214.05

        2       Domestic Basic Tariff - Direct        Domestic         Standing Charge           4288           220382      220382
                Debit
                Domestic Basic Tariff - Direct        Domestic            Unit Rate              7.62           807.92
                Debit

        3       Domestic Restricted Hours Tariff      Domestic            Unit Rate              4.33            6.87
                - Credit

        4       Domestic Restricted Hours Tariff      Domestic            Unit Rate              4.22            3.83
                - Direct Debit

        5       Domestic White Meter Tariff -         Domestic         Standing Charge           5536            371          371
                Credit
                Domestic White Meter Tariff -         Domestic            Day Units              8.71            1.27
                Credit
                Domestic White Meter Tariff           Domestic           Night Units             3.78            1.16
                Credit

        6       Domestic White Meter Tariff -         Domestic         Standing Charge           5396            229          229
                Direct Debit
                Domestic White Meter Tariff -         Domestic            Day Units              8.49            0.63
                Direct Debit
                Domestic White Meter Tariff -         Domestic           Night Units             3.69            0.84
                Direct Debit

        7       Domestic Economy 7 Tariff -           Domestic         Standing Charge           5536           40037        40037
                Credit
                Domestic Economy 7 Tariff -           Domestic            Day Units              8.26           103.78
                Credit
                Domestic Economy 7 Tariff -           Domestic           Night Units             2.91           197.46
                Credit

        8       Domestic Economy 7 Tariff -           Domestic         Standing Charge           5396           22609       22609
                Direct Debit
                Domestic Economy 7 Tariff -           Domestic            Day Units              8.05           80.76
                Direct Debit
                Domestic Economy 7 Tariff -           Domestic           Night Units             2.83          138.10
                Direct Debit

        9       Domestic Winter Warmth Tariff         Domestic          Winter Warmth            3.17           0.79

       10       Domestic Prepayment Meter             Domestic        Token/PP Surcharge         3220          158000       158000
                Surcharge

<PAGE>

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
       11       Domestic Basic Tariff - Token         Domestic         Standing Charge           4332          147446       147446
                Meter
                Domestic Basic Tariff - Token         Domestic            Unit Rate              7.70          483.03
                Meter

       12       Domestic Economy 7 - Token Meter      Domestic         Standing Charge           5452           10554       10554
                Domestic Economy 7 - Token Meter
                Domestic Economy 7 - Token Meter      Domestic            Day Units              8.14           31.66

                                                      Domestic           Night Units             2.87           49.34
       13       Farm Domestic Basic Tariff -          Domestic         Standing Charge           4400           5927         5927
                Credit
                Farm Domestic Basic Tariff -          Domestic            Unit Rate              7.82           27.78
                Credit

       14       Farm Domestic Basic Tariff -          Domestic         Standing Charge          4288.00         1273         1273
                Direct Debit
                Farm Domestic Basic Tariff -          Domestic            Unit Rate              7.62           6.32
                Direct Debit

       15       Farm Domestic White Meter Tariff      Domestic         Standing Charge           5536            30           30
                - Credit
                Farm Domestic White Meter Tariff      Domestic            Day Units              8.71           0.17
                - Credit
                Farm Domestic White Meter Tariff      Domestic           Night Units             3.78           0.16
                - Credit

       16       Farm Domestic White Meter Tariff      Domestic         Standing Charge           5396             7           7
                - Direct Debit
                Farm Domestic White Meter Tariff      Domestic            Day Units              8.49           0.03
                - Direct Debit
                Farm Domestic White Meter Tariff      Domestic           Night Units             3.69           0.04
                - Direct Debit

       17       Farm Domestic Economy 7 Tariff -      Domestic         Standing Charge           5536           1407         1407
                Credit
                Farm Domestic Economy 7 Tariff -      Domestic            Day Units              8.26           8.74
                Credit
                Farm Domestic Economy 7 Tariff -      Domestic           Night Units             2.91           8.44
                Credit

       18       Farm Domestic Economy 7 Tariff -      Domestic         Standing Charge           5396            393         393
                Direct Debit
                Farm Domestic Economy 7 Tariff -      Domestic            Day Units              8.05           2.36
                Direct Debit
                Farm Domestic Economy 7 Tariff -      Domestic           Night Units             2.83           2.66
                Direct Debit


<PAGE>

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
       19       Farm Basic Tariff - Credit         Non - Domestic      Standing Charge           5232           2000         2000
                                                   Non - Domestic
                Farm Basic Tariff - Credit                                Unit Rate              7.82           8.90

       20       Farm Basic Tariff - Direct Debit   Non - Domestic      Standing Charge           5100            200         200
                                                   Non - Domestic
                Farm Basic Tariff - Direct Debit                          Unit Rate              7.62           0.80


       21       Commercial Standard Tariff -       Non - Domestic      Standing Charge           5232           27500       27500
                Credit                             Non - Domestic
                Commercial Standard Tariff -       Non - Domestic       Primary Units            9.20           66.50
                Credit
                Commercial Standard Tariff -                           Secondary Units           7.82           33.60
                Credit

       22       Commercial Standard Tariff -       Non - Domestic      Standing Charge           5100           4400         4400
                Direct Debit                       Non - Domestic
                Commercial Standard Tariff -       Non - Domestic       Primary Units            8.97           8.00
                Direct Debit
                Commercial Standard Tariff -                           Secondary Units           7.62           5.00
                Direct Debit

       23       Commercial S/A - Credit            Non - Domestic         Unit Rate              7.82           0.40

       24       Combined Standard Tariff - Credit  Non - Domestic      Standing Charge           5232           1408         1408
                Combined Standard Tariff - Credit  Non - Domestic
                Combined Standard Tariff - Credit  Non - Domestic       Primary Units            9.20           4.60

                                                                       Secondary Units           7.82           2.70
       25       Combined Standard Tariff -         Non - Domestic      Standing Charge           5100            400         400
                Direct Debit                       Non - Domestic
                Combined Standard Tariff -         Non - Domestic       Primary Units            8.97           1.30
                Direct Debit
                Combined Standard Tariff -                             Secondary Units           7.62           0.80
                Direct Debit

       26       Small Industrial Tariff - Credit   Non - Domestic      Standing Charge           5232           2700         2700
                                                   Non - Domestic
                Small Industrial Tariff - Credit   Non - Domestic       Primary Units            9.20           5.90

                Small Industrial Tariff - Credit                       Secondary Units           7.82           4.60

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------




<PAGE>

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
       27       Small Industrial Tariff - Direct   Non - Domestic      Standing Charge           5100            400         400
                Debit                              Non - Domestic
                Small Industrial Tariff - Direct   Non - Domestic       Primary Units            8.97           0.70
                Debit
                Small Industrial Tariff - Direct                       Secondary Units           7.62           0.60
                Debit

       28       Farm Economy 7 - Credit            Non - Domestic      Standing Charge           6368           1200         1200
                                                   Non - Domestic
                Farm Economy 7 - Credit            Non - Domestic         Day Units              8.26           7.70

                Farm Economy 7 - Credit                                  Night Units             2.91           4.70

       29       Farm Economy 7 - Direct Debit      Non - Domestic      Standing Charge           6208            200         200
                                                   Non - Domestic
                Farm Economy 7 - Direct Debit      Non - Domestic         Day Units              8.05           1.20

                Farm Economy 7 - Direct Debit                            Night Units             2.83           0.70

       30       Commercial Day/Night Tariff -      Non - Domestic      Standing Charge           6368            112         112
                Credit                             Non - Domestic
                Commercial Day/Night Tariff -      Non - Domestic       Primary Units            9.75           0.40
                Credit                             Non - Domestic
                Commercial Day/Night Tariff -                          Secondary Units           8.09           0.10
                Credit
                Commercial Day/Night Tariff -                            Night Units             3.78           0.30
                Credit

       31       Commercial Day/Night Tariff -      Non - Domestic      Standing Charge           6208            15           15
                Direct Debit                       Non - Domestic
                Commercial Day/Night Tariff -      Non - Domestic       Primary Units            9.51           0.10
                Direct Debit                       Non - Domestic
                Commercial Day/Night Tariff -                          Secondary Units           7.89           0.00
                Direct Debit
                Commercial Day/Night Tariff -                            Night Units             3.69           0.00
                Direct Debit

       32       Commercial 17/7 Tariff - Credit    Non - Domestic      Standing Charge           6368           1800         1800
                                                   Non - Domestic
                Commercial 17/7 Tariff - Credit    Non - Domestic       Primary Units            9.75           4.60
                                                   Non - Domestic
                Commercial 17/7 Tariff - Credit                        Secondary Units           7.95           1.50

                Commercial 17/7 Tariff - Credit                          Night Units             3.19           5.50

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------




<PAGE>

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
       33       Commercial 17/7 Tariff - Direct    Non - Domestic      Standing Charge           6208            337         337
                Debit                              Non - Domestic
                Commercial 17/7 Tariff - Direct    Non - Domestic       Primary Units            9.51           0.80
                Debit                              Non - Domestic
                Commercial 17/7 Tariff - Direct                        Secondary Units           7.75           0.10
                Debit
                Commercial 17/7 Tariff - Direct                          Night Units             3.11           1.00
                Debit

       34       Industrial Day/Night Tariff -      Non - Domestic      Standing Charge           6368            37           37
                Credit                             Non - Domestic
                Industrial Day/Night Tariff -      Non - Domestic       Primary Units            9.75           0.10
                Credit                             Non - Domestic
                Industrial Day/Night Tariff -                          Secondary Units           8.09           0.20
                Credit
                Industrial Day/Night Tariff -                            Night Units             3.78           0.10
                Credit

       35       Industrial Day/Night Tariff -      Non - Domestic      Standing Charge           6208             0          0.00
                Direct Debit                       Non - Domestic
                Industrial Day/Night Tariff -      Non - Domestic       Primary Units            9.51           0.00
                Direct Debit                       Non - Domestic
                Industrial Day/Night Tariff -                          Secondary Units           7.89           0.00
                Direct Debit
                Industrial Day/Night Tariff -                            Night Units             3.69           0.00
                Direct Debit

       36       Industrial 17/7 Tariff - Credit    Non - Domestic      Standing Charge           6368            201         201
                                                   Non - Domestic
                Industrial 17/7 Tariff - Credit    Non - Domestic       Primary Units            9.75           0.50
                                                   Non - Domestic
                Industrial 17/7 Tariff - Credit                        Secondary Units           7.95           0.10

                Industrial 17/7 Tariff - Credit                          Night Units             3.19           1.30

       37       Industrial 17/7 Tariff - Direct    Non - Domestic      Standing Charge           6208            35           35
                Debit                              Non - Domestic
                Industrial 17/7 Tariff - Direct    Non - Domestic       Primary Units            9.51           0.03
                Debit                              Non - Domestic
                Industrial 17/7 Tariff - Direct                        Secondary Units           7.75           0.27
                Debit
                Industrial 17/7 Tariff - Direct                          Night Units             3.11           0.10
                Debit

       38       Industrial Unmetered Supplies      Non - Domestic         Day Units              9.75           0.39

       39       Industrial Unmetered Supplies      Non - Domestic        Night Units             3.19           0.91

<PAGE>

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
       40       Commercial Evening/Weekend         Non - Domestic      Standing Charge           6368           1500         1500
                Tariff - Credit                    Non - Domestic
                Commercial Evening/Weekend         Non - Domestic       Primary Units            13.32          2.50
                Tariff - Credit                    Non - Domestic
                Commercial Evening/Weekend                             Secondary Units           9.42           0.20
                Tariff - Credit
                Commercial Evening/Weekend                               Night Units             4.57           4.90
                Tariff - Credit

       41       Commercial Evening/Weekend         Non - Domestic      Standing Charge           6208            525         525
                Tariff - Direct Debit              Non - Domestic
                Commercial Evening/Weekend         Non - Domestic       Primary Units            12.99          0.80
                Tariff - Direct Debit              Non - Domestic
                Commercial Evening/Weekend                             Secondary Units           9.18           0.00
                Tariff - Direct Debit
                Commercial Evening/Weekend                               Night Units             4.45           1.60
                Tariff - Direct Debit

       42       Industrial Evening/Weekend         Non - Domestic      Standing Charge           6368            72           72
                Tariff - Credit                    Non - Domestic
                Industrial Evening/Weekend         Non - Domestic       Primary Units            13.32          0.08
                Tariff - Credit                    Non - Domestic
                Industrial Evening/Weekend                             Secondary Units           9.42           0.00
                Tariff - Credit
                Industrial Evening/Weekend                               Night Units             4.57           0.10
                Tariff - Credit

       43       Industrial Evening/Weekend          Non- Domestic      Standing Charge           6208             2           2
                Tariff - Direct Debit               Non- Domestic
                Industrial Evening/Weekend          Non- Domestic       Primary Units            12.99          0.00
                Tariff - Direct Debit               Non- Domestic
                Industrial Evening/Weekend                             Secondary Units           9.18           0.01
                Tariff - Direct Debit
                Industrial Evening/Weekend                               Night Units             4.45           0.01
                Tariff - Direct Debit

       44       Farm Restricted Hours Tariff -     Non - Domestic         Unit Rate              4.19           0.70
                Credit

       45       Farm Restricted Hours Tariff -     Non - Domestic         Unit Rate              4.09           0.10
                Direct Debit

       46       Commercial Restricted Hours        Non - Domestic         Unit Rate              4.23           2.00
                Tariff - Credit

       47       Commercial Restricted Hours        Non - Domestic         Unit Rate              4.12           0.10
                Tariff - Direct Debit

       48       Industrial Restricted Hours             Non -             Unit Rate              3.52           0.20
                Tariff - Credit                       Domestic
<PAGE>

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
     Number           Description of Tariff           Category            Component         Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------
       49       Industrial Restricted Hours        Non - Domestic         Unit Rate              3.44           0.00
                Tariff - Direct Debit

   ------------ ---------------------------------- ---------------- ----------------------- ---------------- ------------ ---------


<PAGE>


SOUTH WESTERN ELECTRICITY PLC

   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------
     Number         Description of Tariff          Category             Component           Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------
        1       Domestic Tariff                    Domestic          Standing Charge             3420          801437       801437
                                                                        Unit Rate                7.26          2917.35

        2       Keymeter Domestic Tariff           Domestic          Standing Charge             5020          147134       147134
                                                                        Unit Rate                7.11          556.96

        3       Economy 7                          Domestic          Standing Charge             4640          194900       194900
                                                                        Day Units                7.79          596.06
                                                                       Night Units               2.67          1045.74

        4       Key Meter Economy 7                Domestic          Standing Charge             6220           46812       46812
                                                                        Day Units                7.63          155.65
                                                                       Night Units               2.62          189.48

        5       Domestic Night/Day (LA)            Domestic          Standing Charge             4640           2561         2561
                                                                        Day Units                7.79           11.00
                                                                       Night Units               3.47           10.10

        6       3 Rate Heating Tariff              Domestic          Standing Charge             5040            164         164
                                                                        Day Units                10.13          0.22
                                                                      Weekend Units              5.44           0.27
                                                                       Night Units               2.67           0.60

        7       Domestic Seasonal Tariff           Domestic          Standing Charge             5040            104         104
                                                                       Summer Units              4.21           0.26
                                                                       Winter Units              11.72          0.07
                                                                       Night Units               2.67           0.22

        8       Off Peak (7hrs) Tariff (LA)        Domestic          Standing Charge             1220           19583       19583
                                                                        Unit Rate                2.67          104.04

        9       Off Peak Night Only Tariff         Domestic          Standing Charge             1220           2767         2767
                (LA)                                                    Unit Rate                3.47           11.72

       10       Off Peak (LA) Tariff               Domestic          Standing Charge             1220           22832       22832
                                                                      `A' Unit Rate              4.03          112.24
                                                                   `B(i) Primary Units           4.28           0.14
                                                                 `B(i)' Additional Units         3.47           0.01
                                                                  `B(ii)' Primary Units          4.41           9.76
                                                                 `B(ii)' Additional Units        4.03           0.74

       11       Block Tariff                    Non - Domestic       Standing Charge             3960           53893       53893
                                                                      Primary Units              10.05         116.02
                                                                     Additional Units            7.26           82.37

       12       Key Meter Block Tariff          Non - Domestic       Standing Charge             5540            682         682
                                                                      Primary Units              9.85           0.52
                                                                     Additional Units            7.11           1.12
<PAGE>


   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------
     Number         Description of Tariff          Category             Component           Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

    ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ --------
       13       Economy 7 Block Tariff          Non - Domestic       Standing Charge             5180           5658         5658
                                                                    Primary Day Units            10.58          12.46
                                                                   Additional Day Units          7.79           4.50
                                                                       Night Units               2.67           17.88

       14       Key Meter E7 Block Tariff       Non - Domestic       Standing Charge             6740            57           57
                                                                      Primary Units              10.37          0.07
                                                                   Additional Day Units          7.63           0.03
                                                                       Night Units               2.62           0.01

       15       Non - Domestic Seasonal         Non - Domestic       Standing Charge             5580            240         240
                                                                   Primary Summer Units          7.00           0.10
                                                                 Additional Summer Units         4.21           0.60
                                                                   Primary Winter Units          14.31          0.10
                                                                 Additional Winter Units         11.72          0.10
                                                                       Night Units               2.67           0.20

       16       Economy 7 Day & Night           Non - Domestic       Standing Charge             5580            234         234
                                                                        Day Units                11.32          0.44
                                                                      Weekend Units              5.28           0.56
                                                                       Night Units               2.67           0.36

       17       Day & Night Tariff (LA)         Non - Domestic       Standing Charge             5180           1040         1040
                                                                        Day Units                11.32          0.87
                                                                       Night Units               4.82           1.59

       18       Flat Rate (LA)                  Non - Domestic            Rate 1                 19.6           0.60
                                                                          Rate 2                 7.26           6.80
                                                                      Primary Rate 3             9.22           0.10
                                                                    Additional Rate 3            8.39           0.27

       19       Farm Tariff                     Non - Domestic       Standing Charge             5280           6930         6930
                                                                        Units Rate               7.26           15.95

       20       Economy 7 Farm Tariff           Non - Domestic       Standing Charge             6500           1778         1778
                                                                        Day Units                7.79           5.47
                                                                       Night Units               2.67           5.77

       21       Farm Day/Night Tariff (LA)      Non - Domestic       Standing Charge             6500            31           31
                                                                        Day Units                7.79           0.10
                                                                       Night Units               3.47           0.08

       22       Off-Peak (7Hrs) Tariff          Non - Domestic       Standing Charge             1220           1358         1358
                                                                          Units                  2.67           4.84
       23       Off-Peak Night Only Tariff      Non - Domestic       Standing Charge             1220            355         355
                (LA)                                                      Units                  3.47           0.56

       24       Off Peak (LA)                   Non - Domestic       Standing Charge             1220            702         702
                                                                         A Units                 4.03           2.58

       25       Direct Debit Discount              Domestic              Discount                -787          317743       317743
   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------


<PAGE>




YORKSHIRE ELECTRICITY PLC

   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------
     Number         Description of Tariff          Category             Component           Price PO (Unit    Quantity        NC
                                                                                             Rate in pence    QO (Unit
                                                                                               per kWh)        rate in
                                                                                                                GWh)

   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------
        1       Domestic UR                        Domestic          Standing Charge             4000          1702844     1702844
                                                                       Unit Charge               6.19          5774.61

        2       Economy 7                          Domestic          Standing Charge             5200          162799       162799
                                                                        Day Units                6.56          516.67
                                                                       Night Units               2.49          798.21

        3       Domestic Off Peak                  Domestic          Standing Charge             1200           34147       34147
                                                                          Units                  3.82          146.53

        4       Prepayment                         Domestic          Standing Charge             2360          248125       248125

        5       Prompt Payment                                   Standing Charge Discount          0           361700       361700

        6       Automated Payment                  Domestic      Standing Charge Discount        -1200         533512       533512

        7       General Quarterly               Non - Domestic       Standing Charge             5200           60745       60745
                                                                      1st 1000 Units             6.96          157.60
                                                                       Excess Units              6.37           89.77

        8       Economy 7 Quarterly             Non - Domestic       Standing Charge             6400           6076         6076
                                                                       Night Units               2.49           16.71
                                                                   First 1000 Day Units          7.33           15.34
                                                                     Excess Day Units            6.74           5.10

        9       Weekend/Evening Quarterly       Non - Domestic       Standing Charge             6400           1224         1224
                                                                         WE Units                3.60           3.20
                                                                     First 1000 Units            9.31           1.94
                                                                       Excess Units              8.72           0.16

       10       Weekend/Evening E7 Quarterly    Non - Domestic       Standing Charge             7200            939         939
                                                                       Night Units               2.49           1.40
                                                                        WE7 Units                3.60           2.17
                                                                     First 1000 Units            9.31           1.93
                                                                       Excess Units              8.72           0.10

       11       Farm Off Peak                   Non - Domestic       Standing Charge             1200            509         509
                                                                          Units                  4.32           4.57
       12       Commercial `2 Rate Tar'         Non - Domestic            Units                  3.48           0.78

       13       Commercial Off Peak             Non - Domestic       Standing Charge             1200           1428         1428
                                                                          Units                  3.64           7.01

       14       Industrial Off Peak             Non - Domestic       Standing Charge             1200            89           89
                                                                          Units                  4.05           0.50

       15       Prompt Payment                                   Standing Charge Discount        0.00           32132       32132

       16       Automated Payment                 Automated      Standing Charge Discount       -1296.2         15430       15430
                                                   Payment
   ------------ ------------------------------- --------------- --------------------------- ---------------- ------------ ---------

</TABLE>



<PAGE>



Condition 29B. Restriction of supply charges: adjustments

1.       If, in respect of the eighth relevant year, the average charge per
         regulated unit supplied exceeds the maximum average charge per
         regulated unit supplied, but by not more than 1 1/2 per cent, the
         Licensee shall ensure that the excess above the maximum average charge
         per regulated unit supplied, with interest thereon at a rate 2 per cent
         above the average specified rate, shall be paid to all 0.1 MW customers
         who continue to be supplied by the Licensee in the ninth relevant year.

2.       If, in respect of the eighth relevant year, the average charge per
         regulated unit supplied exceeds the maximum average charge per
         regulated unit supplied by more than 1 1/2 per cent, the Licensee shall
         use all reasonable endeavours to return the excess above the maximum
         average charge per unit supplied, with interest thereon at a rate 4 per
         cent above the average specified rate, during the ninth relevant year
         to all 0.1 MW customers supplied by the Licensee in the eighth relevant
         year.

3.       For the purpose of Condition 29A, no sum payable under paragraphs 1 or
         2 shall be regarded as paid or payable under a tariff applicable to the
         ninth relevant year or any subsequent relevant year.

4.       No later than three months after the end of the eighth relevant year,
         the Licensee shall send to the Director a statement accompanied by such
         forecasts, estimates and calculations as may be necessary, showing the
         basis by which the Licensee intends to comply with paragraphs 1 to 3.

5.       The powers exercisable under paragraphs F6 and F8 of Part F of Schedule
         3 in the form of licence in force on 31 March 1998 shall continue to be
         exercisable after that date, but only in respect of a relevant year
         ending before 1 April 1998.


<PAGE>



Condition 29C. Information to be provided to the Director in connection with
the supply charge restriction conditions
------------------------------------------------------------------------------


1.       Where, at any time during the eighth relevant year, the Licensee
         intends to change the principles of attribution or any provisional
         attribution specified in a statement already made to the Director or to
         purchase or sell an electricity sale contract, the change or the
         provisional attribution in relation to the purchase or sale shall be
         specified in a written statement signed by a person authorised to sign
         the statement by the directors of the Licensee which statement shall
         not provide for a retrospective change of principles or for any
         re-attribution of payments already made or any payment where the event
         giving rise to that payment has already occurred.

2.       The Director may issue directions providing that any forecast or
         estimate provided in accordance with paragraph 1 shall be accompanied
         by such information as regards the assumptions underlying the forecast
         or estimate as may be necessary to enable the Director to be satisfied
         that the forecast or estimate has been properly prepared on a
         consistent basis.

3.       Not later than three months after the end of a relevant year the
         Licensee shall send the Director a statement, in respect of that
         relevant year, showing the specified items referred to in paragraph 5.

4.       The statement referred to in the preceding paragraph shall be:


        (a)       accompanied by a report from the Auditors that in their
                  opinion (i) such statement fairly presents each of the
                  specified items referred to in paragraph 5 in accordance with
                  the requirements of the supply charge restriction conditions
                  and (ii) the amounts shown in respect of each of those
                  specified items are in accordance with the Licensee's
                  accounting records which have been maintained in respect of
                  each of the relevant Separate Businesses in accordance with
                  Condition 71; and
<PAGE>


        (b)       certified by a director of the Licensee on behalf of the
                  Licensee that to the best of his knowledge, information and
                  belief having made all reasonable enquiries:

                (i)       (in respect of the eight relevant year only) there is
                           no amount included in its calculations under
                           Condition 29A and Schedule 3 (in each case in the
                           form of licence in force on 31 March 1998) which
                           represents other than:

                        (aa)     bona fide  consideration  for  electricity
                                 supplied to regulated  customers (as defined
                                 in the form of licence in force on 31
                                 March 1998); or

                        (bb)     an amount permitted under the supply charge
                                 restriction conditions to be so included;


        (ii)               there is no amount included in its calculations of
                           allowed security costs under Condition 29D which
                           represents other than an amount permitted under the
                           supply charge restriction conditions to be so
                           included;

        (iii)              no service has been treated as an excluded service
                           which was not properly so treated and no amount
                           included in the revenues in respect thereof
                           represents other than bona fide consideration for the
                           provision of the excluded service to which it
                           relates;

        (iv)               all amounts which should properly be taken into
                           account for the purposes of the supply charge
                           restriction conditions have been taken into account;
                           and

        (v)                (in respect of the eighth relevant year only) there
                           is no amount included in its calculations under
                           Condition 29A and Schedule 3B in respect of
                           electricity purchase or sale costs which does not
                           result from an attribution or method of attribution
                           contained in the statement under either paragraph
                           2(a) or paragraph 2(b) in the form of licence in
                           force on 31 March 1998.
<PAGE>


5.       The specified items to be contained in the statement referred to in
         paragraph 3 shall be the following:


        (a)      the information referred to at paragraph 8 of Condition 29D;


        (b)      the statements and information referred to in paragraph A4 and
                 B2 of Schedule 3B; and


        (c)      in respect of the eighth relevant year only, the statements
                 and information referred to in paragraph F7 of Schedule 3 of
                 the Licence in the form in force on 31 March 1997

         provided that the statement to be provided in the ninth relevant year
         in respect of the immediately preceding relevant year shall contain the
         information required by paragraph 10 of Condition 3E of the Licence in
         the form in force on 31 March 1998.

6.       Where the Director issues directions in accordance with paragraph 9 of
         Condition 29D or paragraphs A5 and B3 of Schedule 3B then such
         directions shall not have effect from a date earlier than the
         commencement of the relevant year to which the statement last furnished
         to the Director pursuant to paragraph 3 prior to the issue of the
         directions related, unless such statement (or the accompanying report
         or certificate under paragraph 4) or any statement, report or
         certificate in respect of an earlier relevant year was incorrect or was
         misleading in any material respect.

7.       Where the Director issues such directions as are referred to in the
         preceding paragraph the Director may require the Licensee to provide a
         revised statement in respect of such of the specified items as may be
         affected by the directions, and the Licensee shall comply with such
         request.


<PAGE>



Condition 29D. Supply Business allowance in respect of security costs

1.       At any time during a security period, the Licensee may give notice in
         writing to the Director suspending, with effect from the date of
         receipt of the notice by the Director, application of such of the
         supply charge restriction conditions as may be specified in the notice
         for the unexpired term of the security period.

2.       At any time during a security period, the Director may (having regard
         to his duties under the Act) by means of directions:


        (a)      suspend or modify for the  unexpired  term of the security
                 period the supply  charge  restriction  conditions  or any
                 part or parts thereof; or


        (b)      introduce for the unexpired term of the security period new
                 supply charge restriction conditions


        (c)      in either case, so as to make such provision as in the opinion
                 or estimation of the Director is requisite or appropriate:


                (i)        to enable the Licensee to recover by means of
                           increased charges an amount estimated as being equal
                           to the Licensee's allowed security costs during such
                           period; and

                (ii)       to ensure that such part of the amount referred to in
                           sub-paragraph (i) above as is estimated as being
                           equal to the allowed security costs incurred by the
                           Licensee as costs in its Supply Business and its
                           Second-Tier Supply Business respectively are
                           recovered by appropriate equitable increases in the
                           charges made by the Licensee in those Businesses

         and the Licensee shall comply with the terms of any directions so
         issued.
<PAGE>


3.       At any time following a security period, the Director may (following
         such consultation with the Licensee and others as the Director may
         consider appropriate) issue directions suspending or modifying the
         supply charge restriction conditions or any part or parts thereof or
         replacing such directions as may have been made during the security
         period and introducing such new supply charge restriction conditions as
         in the opinion of the Director are appropriate in all the circumstances
         (including at the Director's discretion an appropriate adjustment
         having regard to any profit gained or foregone by the Licensee during
         the security period), and the Licensee shall comply with any directions
         so issued.

4.       At any time within three months after the issue of directions by the
         Director under paragraph 3, the Licensee may serve on the Director a
         disapplication request in respect of such of the supply charge
         restriction conditions or any part or parts thereof as are specified in
         the request.

5.       If within three months of the receipt by the Director of the
         disapplication request referred to in paragraph 4, the Director has
         either not agreed in writing to such disapplication request or has not
         made a reference to the Competition Commission under Section 12 of the
         Act relating to the modification of the supply charge restriction
         conditions, the Licensee may deliver one month's written notice to the
         Director terminating the application of the supply charge restriction
         conditions (or any part or parts thereof) as were specified in the
         disapplication request.

6.       Subject to paragraphs 7 and 9, the Licensee shall in any relevant year
         be entitled to recover an aggregate amount equal to its allowed
         security costs in that year or (insofar as not previously recovered)
         any previous year, by means of appropriate equitable increases on the
         charges made by the Licensee in each of its Supply and Second-Tier
         Supply Businesses.

7.       Paragraph 6 shall not apply in so far as such allowed security costs:


        (a)      were otherwise recovered by the Licensee; or

<PAGE>

        (b)       were taken into account by the Director in setting supply
                  charge restriction conditions by means of directions issued
                  under paragraph 3 above.

8.       The Licensee shall following the end of each relevant year provide to
         the Director, as being one of the specified items to be contained in
         the statement referred to at paragraph 4 of Condition 29C, details in
         respect of that relevant year of:

        (a)      the amount of the Licensee's allowed security costs; and


        (b)      the aggregate amounts charged under paragraph 6 on account of
                 the Licensee's allowed security costs; and


        (c)       the bases and calculations underlying the increases in charges
                  made by the Licensee in its Supply and Second-Tier Supply
                  Businesses under paragraph 6.

9.       Where the Director is satisfied that the Licensee has recovered amounts
         in excess of the allowed security costs, the Director may issue
         directions requiring the Licensee to take such steps as may be
         specified to reimburse customers of the Supply and Second-Tier Supply
         Business for the excess amounts charged to them, and the Licensee shall
         comply with any directions so issued provided that if the excess
         amounts relate to allowed security costs paid to any authorised
         electricity operator, the Licensee shall not be obliged to make any
         such reimbursement unless and until it has recovered such costs from
         the relevant authorised electricity operator.

10.      No amounts charged by the Licensee under this Condition (whether or not
         subsequently required to be reimbursed) shall be taken into account for
         the purpose of applying the supply charge restriction provisions of
         Condition 29A.

11.      In this Condition:


         "allowed security cost"    shall have the  meaning  ascribed  to that
                                    term in the Fuel Security Code.
<PAGE>


         "security period"          means a period  commencing on the  date on
                                    which any direction issued by the Secretary
                                    of State under Section  34(4)(b)  of  the
                                    Act enters effect and terminating  on the
                                    date (being not earlier than the
                                    date such direction, as varied,  is revoked
                                    or expires)  as the  Director,  after
                                    consultation with such persons (including
                                    without limitation, licence holders liable
                                    to be principally affected) as he
                                    shall  consider  appropriate,  may with the
                                    consent of the Secretary of State by notice
                                    to all licence holders determine after
                                    having regard to the views of such persons.



<PAGE>



Condition 29E. Duration of supply charge restriction conditions

1.       The supply charge restriction conditions shall apply so long as this
         licence continues in force but shall cease to have effect (in whole or
         in part, as the case may be) if the Licensee delivers to the Director a
         disapplication request made in accordance with paragraph 2 and:

        (a)      the Director agrees in writing to the disapplication request;
                 or


        (b)      their  application (in whole or in part) is terminated by
                 notice given by the Licensee in accordance  with either
                 paragraph 4 or paragraph 5.


2.       A disapplication request pursuant to this Condition shall (a) be in
         writing addressed to the Director, (b) specify the supply charge
         restriction conditions (or any part or parts thereof) to which the
         request relates and (c) state the date from which the Licensee wishes
         the Director to agree that the specified charge restriction conditions
         shall cease to have effect.

3.       Save where the Director otherwise agrees, no disapplication following
         delivery of a disapplication request pursuant to this Condition shall
         have effect earlier than that date which is the later of:

        (a)      a date being not less than 18 months after delivery of the
                 disapplication request; and


        (b)      31st March 2000.


4.       If the Director has not made a reference to the Competition Commission
         under Section 12 of the Act relating to the modification of the supply
         charge restriction conditions before the beginning of the period of 12
         months which will end with the disapplication date, the Licensee may
         deliver written notice to the Director terminating the application of
         such charge restriction conditions (or any part or parts thereof) as
         are specified in the disapplication request with effect from the
         disapplication date or a later date.
<PAGE>

5.       If the Competition Commission makes a report on a reference made by the
         Director relating to the modification of the supply charge restriction
         conditions (or any part or parts thereof) specified in the
         disapplication request and such report does not include a conclusion
         that the cessation of such charge restriction conditions, in whole or
         in part, operates or may be expected to operate against the public
         interest, the Licensee may within 30 days after the publication of the
         report by the Director in accordance with Section 13 of the Act deliver
         to him written notice terminating the application of such charge
         restriction conditions with effect from the disapplication date or
         later.

6.       A disapplication request or notice served under this Condition may be
         served in respect of a specified geographic area.





<PAGE>



Condition 30. Prohibition of cross-subsidies and of discrimination in
electricity sale contracts
----------------------------------------------------------------------------


1.       The Licensee shall procure that the Supply Business does not give any
         cross-subsidy to, or receive any cross-subsidy from, any other business
         of the Licensee or an affiliate or related undertaking of the Licensee
         (whether or not a Separate Business).

2.       The Licensee shall not, and shall procure that any affiliate or related
         undertaking of the Licensee shall not, sell or offer to sell
         electricity under any electricity sale contract to any one relevant
         purchaser or person seeking to become a relevant purchaser on terms as
         to price which are materially more or less favourable than those on
         which it sells or offers to sell electricity under any electricity sale
         contract to comparable relevant purchasers. For these purposes, due
         regard shall be had to the circumstances of sale to such purchasers
         including (without limitation) volumes, load factors, conditions of
         interruptibility and the dates and duration of the relevant agreements.

3.       For the purposes of paragraph 2:


         "relevant purchaser"                      means any
                                                   purchaser of electricity from
                                                   the Licensee or any affiliate
                                                   or related undertaking of the
                                                   Licensee under an electricity
                                                   purchase contract.


<PAGE>



Condition 31. Prohibition of discrimination in supply

1.       This  Condition  applies where the Licensee is in a dominant position
         in a market for the supply of  electricity to customers
         at premises.


2.       Where this Condition applies the Licensee shall not supply or offer to
         supply electricity to customers in any market in which it is dominant
         on terms which are predatory.

3.       Where this Condition applies, but subject to paragraph 4, the Licensee
         (taken together with its affiliates and related undertakings) shall
         not, in supplying or offering terms for the supply of electricity to
         customers in any market in which it is dominant:

        (a)      show undue preference to any person (or class of persons)
                 within such market;


        (b)      exercise undue discrimination between any persons (or classes
                 of person) within such market; or


        (c)      set terms which are unduly onerous.


4.       Nothing in paragraph 3 shall prohibit the Licensee, within any area or
         class of customers (the "relevant area or class") in respect of which
         there is established competition in the supply of electricity, from
         supplying or offering to supply electricity on terms which are
         reasonably necessary to meet that competition, save that the Licensee
         (taken together with its affiliates and related undertakings) shall
         not, in supplying or offering terms for the supply of electricity:

        (a)       show undue preference to any person (or class of persons) or
                  exercise undue discrimination between any persons (or classes
                  of person) within the relevant area or class of customers; or
<PAGE>

        (b)       set terms in respect of any person (or class of persons) in a
                  market in which the Licensee is dominant, save such persons
                  who are within the relevant area or class of customers, which
                  are unduly onerous.

5.       For the purposes of this  Condition,  terms are unduly  onerous if the
         revenue from the supply of  electricity to customers on
         those terms:


        (a)      significantly exceeds the costs of that supply; and


        (b)       exceeds such costs to a significantly greater degree than the
                  revenue from supply to all other customers of the Licensee
                  (and of its affiliates and related undertakings) within the
                  same market exceeds the costs of supply to those customers.

6.       For the purposes of this Condition, a market may be defined by
         reference to a geographical area, or to a class of customer or both,
         save that no market defined by reference to Designated Customers shall
         comprise fewer than 50,000 such customers.

7.       In determining, for the purposes of this Condition, whether any persons
         constitute a class of person, due regard shall be had to the
         circumstances of supply to such persons including (without limitation)
         volumes, load factors, conditions of interruptibility, location of
         premises being supplied and date and duration of the supply contract.

8.       For the purposes of this Condition, the Director shall determine any
         question as to:


        (a)      whether any area or class of customers constitutes a market
                 for the supply of electricity;


        (b)      whether the Licensee is dominant in any market for the supply
                 of electricity;


        (c)      whether there is  established  competition  in respect of the
                 supply of  electricity in any area or to any class of
                 customers; and
<PAGE>

        (d)      whether any terms are predatory, having due regard to whether
                 such terms:


                (i)      incorporate  charges which do not reasonably cover the
                         avoidable costs incurred in consequence of supplying
                         the customers in question; and


                (ii)     are intended or are likely to restrict, distort or
                         prevent competition in the supply of electricity.


9.       The Director may determine that the Licensee is dominant in a
         specified market:


        (a)      at any time prior to this Condition coming into force; or


        (b)       having first consulted with the Licensee and such other
                  persons as he considers appropriate (and having taken into
                  account any representations made to him), at any time after
                  this Condition has come into force,

         and where the Director does make such a determination he shall
immediately notify the Licensee.

10.      Where the Director has notified the Licensee of his determination in
         accordance with paragraph 9 that it is dominant in a specified market,
         the provisions of paragraphs 11 to 16 shall apply in respect of that
         market.

11.      Where this paragraph applies the Licensee shall, prior to supplying or
         offering to supply electricity under a tariff or Designated Supply
         Contract on any new terms, give to the Director at least 28 days'
         notice in writing of its intention to supply on such terms.

12.      For the purposes of this Condition, a tariff or Designated Supply
         Contract is on "new terms" if:


        (a)      it is a form of tariff or  Designated Supply Contract under
                 which the  Licensee has not  previously  supplied or offered to
                 supply electricity;
<PAGE>


        (b)      it is a tariff or Designated Supply Contract in respect of
                 which the Licensee is varying the terms as to price; or


        (c)       it is a tariff or Designated Supply Contract in respect of
                  which the Licensee is varying any other terms in such a manner
                  as to significantly affect the evaluation of that tariff or
                  contract.

13.      Where the Licensee has given notice to the Director of its intention to
         supply on new terms it shall not supply or offer to supply electricity
         on such terms until either the period of notice given to the Director
         has expired and:

        (a)      the Director has not given or sent to the Licensee a
                 counter-notice  (the  "counter-notice")  in accordance with
                 paragraph 14;  or

        (b)       prior to the expiry of such period, the Director has informed
                  the Licensee that he will not issue a counter-notice in
                  respect of such terms.

14.      The Director may issue a counter-notice where, having considered the
         new terms and having had regard to the likely effects of issuing such
         counter-notice (including, but not limited to, the likely effect upon
         the business of the Licensee), he determines that further consideration
         is required to assess whether such terms are in breach of the
         provisions of this Condition.

15.      Where the Director issues a counter notice in respect of any new terms
         the Licensee shall not supply or offer to supply electricity on such
         terms until either:

        (a)      a period of 3 months from the date of the counter-notice has
                 expired; or


        (b)       prior to the expiry of such period, the Director indicates to
                  the Licensee that he has no present intention of taking
                  enforcement action under Section 25 of the Act in respect of
                  such terms.
<PAGE>

16.      Where the Director issues a counter-notice he may:


        (a)      give or send a copy of that counter-notice to any Interested
                 Person;


        (b)      invite representations from Interested Persons as to the
                 matters to which the counter-notice relates; and


        (c)       require the Licensee, within a reasonable period determined by
                  the Director, to provide him with such further information
                  relating to the new terms as he may specify (save that he may
                  not by virtue of this paragraph require the Licensee to
                  furnish him with information for the purpose of exercising his
                  functions under Section 48 of the Act),

         and the Director shall take into account any representations made to
him by the Licensee in respect of such terms.

17.      The Director may, at any time after notifying the Licensee of his
         determination in accordance with paragraph 9 that it is dominant in a
         specified market, determine that the Licensee is no longer dominant in
         that market, and where he does make such a determination:

        (a)      the Director shall immediately notify the Licensee; and


        (b)      the provisions of paragraphs 11 to 16 shall cease to apply in
                 respect of the specified market.


18.      For the purposes of this Condition, any reference to the Licensee being
         dominant in a market for the supply of electricity shall be treated as
         a reference to the Licensee, taken together with its affiliates and
         related undertakings, being so dominant.
<PAGE>

19.      In this Condition:


         "Interested Persons"       means all Electricity Suppliers which
                                    supply  electricity within the market or
                                    area or to the class of  customers  in
                                    question,  the Relevant Consumers'
                                    Committee and such other persons or bodies
                                    as in the opinion of the Director  have a
                                    legitimate  interest in the terms on which
                                    the Licensee supplies electricity.

         "terms"                    means all the terms on
                                    which a supply of
                                    electricity is offered or
                                    provided which
                                    significantly affect the
                                    evaluation of that supply,
                                    and shall include all terms
                                    as to price.


<PAGE>



Condition 31A. Duration of discrimination conditions

1.       Condition 31 shall cease to have effect (in whole or in part, as the
         case may be) if the Licensee makes a disapplication request in
         accordance with this Condition and:

        (a)      the Director agrees in writing to that request; or


        (b)       the application of Condition 31 (in whole or in part) is
                  terminated by notice given by the Licensee in accordance with
                  paragraph 4 or 5 of this Condition.

2.       A disapplication request pursuant to this Condition may be made by the
         Licensee only where the Director has notified it, in accordance with
         paragraph 9 of Condition 31, of his determination that the Licensee is
         dominant in a specified market, and any such request shall:

        (a)      be made in writing to the Director;


        (b)      specify whether the request relates to the whole of Condition
                 31 or any part or parts thereof; and


        (c)       state the date (the "disapplication date") from which the
                  Licensee wishes the specified provisions of Condition 31 to
                  cease to have effect, which date shall be in accordance with
                  paragraph 3 and not earlier than 12 months after the date on
                  which the request is made.

3.       Where the Licensee was notified by the Director prior to this Condition
         coming into force of his determination that the Licensee is dominant in
         a specified market, no disapplication request made by the Licensee
         shall be effective to disapply any of the provisions of Condition 31
         prior to 31 March 2000.

<PAGE>


4.       If the Director has not by the date which is 6 months prior to the
         disapplication date made a reference to the Competition Commission
         (under Section 12 of the Act) relating to the modification of Condition
         31, the Licensee may give to the Director a notice in writing
         terminating the application of such of the provisions of Condition 31
         as are specified in the disapplication request with effect from the
         disapplication date or from any later date specified in the notice.

5.       If the Competition Commission reports on a reference made by the
         Director relating to the modification of Condition 31 and does not
         conclude that the disapplication of any of the provisions of that
         Condition (being provisions specified in the disapplication request)
         would or may be expected to operate against the public interest, the
         Licensee may within 30 days of the publication of the report under
         Section 13 of the Act give to the Director notice in writing
         terminating the application of such provisions with effect from the
         disapplication date or any later date specified in the notice.


<PAGE>



Condition 32. Obligation on economic purchasing

1.       Subject to paragraph 6, the  provisions  of paragraph 2 shall apply
         separately in relation to purchases of  electricity  from
         the following sources:


        (a)      qualifying renewable generation;


        (b)      qualifying non-fossil generation; and


        (c)      generation from any source other than as referred to in
                 sub-paragraphs (a) and (b) above.


2.       In respect of each category referred to in paragraph 1 above, and
         subject to paragraph 4 below, the Licensee shall:


        (a)      itself purchase;


        (b)      procure any affiliate of the Licensee to purchase; and


        (c)      in so far as it is able through the exercise of voting rights
                 or otherwise to do so, procure any related undertaking of the
                 Licensee or any defined undertaking to purchase


         electricity at the best effective price reasonably obtainable having
         regard to the sources available.

3.       In determining the effective price at which electricity is purchased by
         the Licensee or any affiliate or related undertaking of the Licensee or
         any defined undertaking, regard shall be had to any payments made or
         received or to be made or received for the grant of or pursuant to any
         electricity purchase contract.
<PAGE>


4.       In the discharge of its obligations under paragraph 2 above, the
         Licensee may additionally have regard to any considerations liable to
         affect its ability and that of any affiliate of the Licensee to
         discharge its obligations under this Condition in the future, including
         the future security, reliability and diversity of sources of
         electricity available for purchase.

5.       In this Condition (and subject to paragraph 6) references to qualifying
         renewable generation and to qualifying non-fossil generation shall
         refer to generation from capacity of that description which:

        (a)       has been contracted by the Licensee or any defined undertaking
                  under an arrangement certified by the Secretary of State under
                  Section 32(7) of the Act which was entered into prior to the
                  date this Licence enters force; or

        (b)       is available to be contracted under arrangements to be
                  produced to the Director in satisfaction of an obligation
                  imposed on the Licensee by Order made under Section 32 of the
                  Act after this Licence enters force.

6.       Notwithstanding that generation may previously have been contracted as
         being qualifying renewable generation or qualifying non-fossil
         generation (as the case may be), it shall cease to be so treated to the
         extent that:

        (a)      the Licensee (or any affiliate or related  undertaking of the
                 Licensee or any defined  undertaking) enjoys contractual
                 freedom to vary or discontinue its obligation to purchase such
                 generation; and


        (b)       capacity from which qualifying renewable or non-fossil
                  generation (as the case may be) is otherwise contracted by the
                  Licensee or any affiliate or related undertaking of the
                  Licensee or any defined undertaking is equal to or exceeds the
                  aggregate capacity specified in any Orders previously made
                  under Section 32 of the Act and continuing in force, as being
                  required to be available to the Licensee at that time or in
                  respect of any future period covered by such Orders.
<PAGE>

7.       Paragraphs 2, 3 and 4 of this Condition shall apply mutatis mutandis
         where the Licensee exercises a discretion or (by agreement or
         otherwise) varies the terms of an existing contract (whether or not
         entered into prior to the date of entry into force of this Licence) in
         such a manner as to alter the effective price under such contract.

8.       In this Condition:


         "defined undertaking"                     means Non-Fossil
                                                   Purchasing Agency Limited or
                                                   other entity through which
                                                   the Licensee enters into
                                                   qualifying arrangements
                                                   within the meaning of Section
                                                   33 of the Act.

         "purchase"                                includes the acquisition of
                                                   electricity from sources
                                                   falling to be treated as
                                                   own-generation for the
                                                   purpose of Condition 75, and
                                                   the purchase of electricity
                                                   under electricity purchase
                                                   contracts.

         "qualifying non-fossil generation"        shall
                                                   include generation from
                                                   renewable sources which for
                                                   the time being has not been
                                                   contracted as being
                                                   qualifying renewable
                                                   generation.


<PAGE>



Condition 33. Tariffs

1.       The Licensee shall ensure that any tariffs fixed under Section 18 of
         the Act shall be so framed as separately to identify:


        (a)      the use of system element in the Licensee's charges; and


        (b)      the charges in respect of the supply of electricity to tariff
                 customers.


2.       Where the Director considers that by reason of the complexity of any
         such tariffs fixed by the Licensee, simplified explanatory statements
         are required or expedient for the understanding of tariff customers,
         the Director may direct the Licensee to draw up such explanatory
         statements and thereafter to publish them with the tariffs to which
         they relate.


<PAGE>



Condition 34. Arrangements for informing customers on revocation of Licence

1.       The Licensee shall comply with a direction from the Director in the
         following terms where the Director:


        (a)       is, or is aware that the Secretary of State is, about to
                  revoke a Licence granted to another Electricity Supplier to
                  supply electricity (in this Condition known as the "First
                  Supplier"); and

        (b)       considers that the Licensee is able to supply electricity to
                  the customers of the First Supplier without significantly
                  prejudicing the supplies of electricity which the Licensee
                  makes or is contracted to make.

2.       The Director shall only issue a direction in accordance with paragraph
         1 when the Secretary of State or, as the case may be, the Director has
         served the First Supplier with a notice that he is revoking the First
         Supplier's Licence to supply electricity in accordance with the terms
         of the First Supplier's Licence, or such earlier date as the Director
         may agree with the First Supplier.

3.       A direction issued in accordance with paragraph 1 shall require that
         the Licensee shall, within the period specified by the Director, send a
         written notice in a form approved by the Director to each of the
         persons or premises specified or described in the direction:

        (a)       informing the customer in question that, notwithstanding any
                  contract he may have with the First Supplier, the First
                  Supplier is no longer supplying him with electricity and has
                  not done so since the revocation took effect or, where the
                  notice has been sent before the revocation has taken effect,
                  will be no longer supplying him with electricity when it takes
                  effect;

        (b)       informing the customer that the customer must from the moment
                  the revocation takes effect enter into a new contract for
                  supply with another Electricity Supplier of the customer's
                  choice, and that he is free to request a supply from the
                  Licensee; and

        (c)      setting out the terms upon which the Licensee is prepared to
                 supply electricity if requested.





<PAGE>



Condition 35. Basis of charges for top-up and standby supplies or sales of
electricity, exempt supply services and prepayment meter services:
requirements for transparency
---------------------------------------


1.       The Licensee shall as soon as practicable prepare statements in a form
         approved by the Director setting out the basis upon which charges will
         be made for the provision of:

        (a)      top-up and standby supplies or sales of electricity; and


        (b)      exempt supply services


         in each case in such form and with such detail as shall be necessary to
         enable any person to make a reasonable estimate of the charges to which
         he would become liable for the provision of such services, and (without
         prejudice to the foregoing) including the information set out in
         paragraphs 3 and 4 respectively.

2.       The Licensee shall as soon as practicable prepare a statement in a form
         approved by the Director setting out the basis upon which charges will
         be made for the provision of prepayment meter services, which statement
         shall be in such form and with such detail as shall be necessary to
         enable any person to make a reasonable estimate of the charges to which
         he would become liable for the provision of such service and of the
         other terms, likely to have a material impact on the conduct of his
         business, upon which the service would be provided and (without
         prejudice to the foregoing) including the information set out in
         paragraph 5.

3.       The statement referred to at sub-paragraph 1(a) shall set out the
         methods by which and the principles on which the charges for the
         provision of each of top-up supplies or sales and standby supplies or
         sales will be made.

4.       The statement referred to at sub-paragraph 1(b) shall set out the
         methods by which and the principles on which charges for the provision
         of such services will be made.


<PAGE>

5.       The statement referred to at paragraph 2 shall include a schedule of
         charges for prepayment meter services, together with an explanation of
         the methods by which and the principles on which such charges will be
         calculated.

6.       The basis on which charges for the provision of top-up and standby
         supplies or sales of electricity shall be set shall reflect the costs
         directly incurred in the provision thereof, together with a reasonable
         rate of return on the capital represented by such costs.

7.       The basis on which charges for the provision of exempt supply services
         shall be set shall reflect the costs directly incurred in the provision
         thereof, together with a reasonable rate of return on the capital
         represented by such costs.

8.       The Director may, upon the written request of the Licensee, issue a
         direction relieving the Licensee of its obligations under paragraph 2
         to such extent and subject to such terms and conditions as he may
         specify in that direction.

9.       The Licensee shall not in setting its charges for or in setting the
         other terms that will apply to the provision of prepayment meter
         services restrict, distort or prevent competition in the generation,
         distribution or supply of electricity or in the provision of meter
         operation, data retrieval, data processing or data aggregation
         services.

10.      The Licensee may periodically review the information set out in and,
         with the approval of the Director, alter the form of the statements
         prepared in accordance with paragraphs 1 and 2 and shall, at least once
         in every year this Licence is in force, make any necessary revisions to
         such statements in order that the information set out in the statements
         shall continue to be accurate in all material respects.

11.      The Licensee shall send a copy of the statements prepared in accordance
         with paragraphs 1 and 2, and of each revision of such statements in
         accordance with paragraph 10, to the Director.


<PAGE>


12.      The Licensee shall give or send a copy of the statements prepared in
         accordance with paragraphs 1 and 2, or (as the case may be) of the
         latest revision of such statements in accordance with paragraph 10, to
         any person who requests a copy of such statement or statements.

13.      The Licensee may make a charge for any statement given or sent pursuant
         to paragraph 12 of an amount which shall not exceed the amount
         specified in directions issued by the Director for the purposes of this
         Condition based on the Director's estimate of the Licensee's reasonable
         costs of providing such a statement.


<PAGE>



Condition 35A. Non-discrimination in the provision of top-up or standby
supplies or sales of electricity, exempt supply services and prepayment meter
services


1.       In the  provision of top-up or standby  supplies or sales of
         electricity  the  Licensee  shall not  discriminate  between any
         persons or class or classes of person.


2.       In the  provision of exempt supply  services the Licensee  shall not
         discriminate  between any Exempt Suppliers or class or classes thereof.


3.       In the provision of prepayment meter services the Licensee shall not
         discriminate:


        (a)      between any persons or class or classes of person; or


        (b)       as between the Licensee (in the provision of such services by
                  the Licensee to itself for the purpose of its Supply or Second
                  Tier Supply Business) and any persons or class or classes of
                  person.

4.       Without prejudice to paragraphs 1, 2 and 3, and subject to the
         provisions of Condition 35, the Licensee shall not:


        (a)       make charges for the provision of top-up or standby supplies
                  or sales of electricity to any person or class or classes of
                  person which differ from the charges for such provision to any
                  other person or class or classes of person;

        (b)       make charges for the provision of exempt supply services to
                  any Exempt Supplier or class or classes thereof which differ
                  from the charges for such provision to any other Exempt
                  Supplier or class or classes thereof; or

        (c)       make charges for the provision of prepayment meter services to
                  any person or class or classes of person which differ from the
                  charges for such provision:
<PAGE>

                (i)      to any other person or class or classes of person; or


                (ii)     to the Licensee  (in the  provision of such services
                         by the Licensee to itself for the purpose of its
                         Supply or Second Tier Supply Business)


         except in so far as such differences reasonably reflect differences in
the costs associated with such provision.

5.       The Licensee shall not in setting its charges for provision of top-up
         or standby supplies or sales of electricity, or for exempt supply
         services, restrict, distort or prevent competition in the generation,
         distribution or supply of electricity.


<PAGE>



Condition 35B. Requirement to offer terms for top-up and standby, exempt supply
services and prepayment meter services


1.       On application made by any person the Licensee shall (subject to
         sub-paragraphs 7(a) and (b)) offer to enter into an agreement to
         provide top-up or standby supplies or sales of electricity.

2.       On application made by any Exempt Supplier the Licensee shall (subject
         to paragraph 7) offer to enter into an agreement for exempt supply
         services within its authorised area and such offer shall make detailed
         provision regarding:

        (a)       the making, maintenance and termination by the Licensee of
                  registrations under and in accordance with the Master
                  Registration Agreement in relation to premises to which the
                  Exempt Supplier supplies or is required to supply electricity;

        (b)       the exchange between the Licensee and Exempt Supplier of such
                  information  as is required  for the  performance  of the
                  Licensee's obligations in accordance with sub-paragraph (a);


        (c)       the appointment by the Exempt Supplier of an appropriate
                  provider of meter operation, data retrieval, data processing
                  and data aggregation services in relation to premises to which
                  it supplies electricity;

        (d)       the apportionment and settlement by the Licensee of charges
                  incurred by it by virtue of registrations under the Master
                  Registration Agreement which are made, maintained and
                  terminated in accordance with sub-paragraph (a);

        (e)       the reimbursement  by the Exempt Supplier (by way of
                  indemnity)  of all  charges  incurred  by the  Licensee by
                  virtue of registrations made and maintained in accordance
                  with sub-paragraph (a);

<PAGE>

        (f)      the  provision  by the Exempt  Supplier to the  Licensee of
                 reasonable security or collateral for the performance of its
                 obligations under the agreement; and


        (g)       the varying of the agreement, including the making of
                  amendments necessary to give effect to any determination made
                  by the Director in respect of the agreement.

3.       On application made by any private electricity supplier the Licensee
         shall (subject to sub-paragraph 7(a)) offer to enter into an agreement
         for the provision within its authorised area of access to a system
         which supports the supply of electricity to Designated Customers with
         prepayment meters ("prepayment meter services"), such system providing
         as may be reasonably appropriate for prepayment meters which require
         tokens, cards or keys for their operation and comprising facilities
         for:

        (a)    (where requested) the purchase by private electricity suppliers
                 and/or encoding with data of tokens, cards or keys;

        (b)    the use by customers of local outlets for the purchase of tokens
               and the crediting with value of cards or keys;


        (c)    the making of payments to suppliers in respect of sums received
               by the Licensee on behalf of customers; and


        (d)    where relevant, the transfer of customer data to private
               electricity suppliers.


4.       In making an offer to enter into any agreement specified in paragraphs
         1 to 3, the Licensee shall set out:


        (a)    the date by which the services required shall be provided
               (time  being of the essence  unless  otherwise  agreed  between
               parties);


        (b)    the charges to be paid in respect of the services required, such
               charges (unless manifestly inappropriate):

<PAGE>

                (i)      to be presented in such a way as to be referable to
                         the statements prepared in accordance with paragraph 1
                         of Condition 35 or any revision thereof; and

                (ii)     to be set in conformity with the requirements of
                         Condition 35; and


        (c)      such other detailed terms in respect of each of the services
                 required as are or may be  appropriate  for the purpose of the
                 agreement.


5.       The Licensee shall offer terms for agreements in accordance with
         paragraphs 1 to 3 as soon as practicable and (save where the Director
         consents to a longer period) in any event not more than the period
         specified in paragraph 6 after receipt by the Licensee (or its agent)
         from any person of an application containing all such information as
         the Licensee may reasonably require for the purpose of formulating the
         terms of the offer.

6.       For the purpose of paragraph 5, the period specified shall be:


        (a)       in the case of persons seeking exempt supply services,
                  prepayment meter services or top-up or standby supplies or
                  sales of electricity only, 28 days; or

        (b)      in the case of persons seeking top-up or standby supplies or
                 sales of electricity in conjunction with connection, 3 months.


7.       The Licensee shall not be obliged pursuant to this Condition to offer
         to enter or to enter into any agreement:


        (a)      under paragraphs 1 to 3, if to do so would be likely to
                 involve the Licensee being:


                (i)     in breach of its duties under section 9 of the Act;

<PAGE>

                (ii)    in breach of the Electricity Supply Regulations 1988
                        or of any regulations made under section 29 of the
                        Act or of any other enactment relating to safety or
                        standards applicable in respect to the Distribution
                        Business;

                (iii)   in breach of the Grid Code or the Distribution Code; or


                (iv)    in breach of the Conditions;


        (b)       under paragraph 1 or 2, if the person making the application
                  does not undertake to be bound, in so far as applicable, by
                  the terms of the Distribution Code or the Grid Code from time
                  to time in force;

        (c)      under paragraph 2, if the person making application ceases to
                 be an Exempt Supplier.


8.       The Licensee shall undertake the provision of prepayment meter services
         in the most efficient and economic manner practicable having regard to
         the alternatives available and the other requirements of this Licence
         and of the Act in so far as they relate to the provision of those
         services.

1.


<PAGE>



Condition 35C. Arrangements in respect of Standard Terms of Connection

1.       The Licensee shall not enter into a contract with a customer for the
         supply of electricity to premises which are to be supplied through an
         established connection without at the same time (in respect of such
         premises and for the benefit of the Distribution Business) entering
         into an agreement with the customer on the Standard Terms of
         Connection.



<PAGE>



Condition 35D. Functions of the Director

1.       If, after a period which appears to the Director to be reasonable for
         the purpose, the Licensee has failed to enter into an agreement with
         any person entitled or claiming to be entitled thereto pursuant to a
         request under Condition 35B, the Director may, on the application of
         such person or the Licensee, settle any terms of the agreement in
         dispute between the Licensee and that person in such manner as appears
         to the Director to be reasonable having (in so far as relevant) regard
         in particular to the following considerations:

        (a)      that such person should pay to the Licensee:


                (i)      in the case of the provision of top-up or standby
                         supplies or sales of electricity,  such sum as is
                         determined in accordance  with paragraph 6 of
                         Condition 35;


                (ii)     in the case of exempt supply services, such sum as is
                         determined in accordance with paragraph 7 of Condition
                         35; and


                (iii)     in the case of prepayment meter services, the whole
                          or the appropriate proportion of such sum as is
                          determined in accordance with paragraph 9 of
                          Condition 35;

        (b)      that the performance  by the Licensee of its obligations under
                 the agreement should not cause it to be in breach of those
                  provisions referred to at sub-paragraph 7(a) of Condition 35B;


        (c)        that the terms and conditions of the agreement so settled by
                  the Director and of any other agreements entered into by the
                  Licensee pursuant to a request under Condition 35B should be,
                  so far as circumstances allow, in as similar a form as is
                  practicable; and
<PAGE>

        (d)       in the case of exempt supply services, that the agreement for
                  the provision of exempt supply services should make provision
                  for all the matters set out at paragraph 2 of Condition 35B.

2.       In so far as any person entitled or claiming to be entitled to an offer
         under Condition 35B wishes to proceed on the basis of the agreement as
         settled by the Director, the Licensee shall forthwith enter into and
         implement such agreement in accordance with its terms.

3.       If either party to such agreement proposes to vary the contractual
         terms of any agreement for exempt supply services or for prepayment
         meter services entered into pursuant to Condition 35B or this Condition
         in any manner provided for under such agreement, the Director may, at
         the request of that party, settle any dispute relating to such
         variation in such manner as appears to the Director to be reasonable.

4.       The Director may (following consultation with the Licensee) issue
         directions relieving the Licensee of its obligations under Condition
         35B relating to prepayment meter services in respect of such parts of
         that Condition and to such extent as may be specified in the
         directions.


<PAGE>



Condition 36. Provision of information to customers about security and safety
of supplies
-------------------------------------------------------------------------------

1.       The Licensee shall make arrangements to keep each of its customers
         informed of the postal address and telephone number of an enquiry
         service established and operated for use by any person for the purposes
         of receiving reports and offering information, guidance or advice about
         any matter or incident that:

        (a)      causes danger or requires  urgent  attention,  or is likely to
                 cause danger or require  urgent  attention,  in relation to the
                 supply or distribution of electricity; or


        (b)      affects or is likely to affect the maintenance of the security,
                 availability  and  quality  of service of the  Licensee's
                 Distribution System.


2.       The enquiry service referred to at paragraph 1 must be such a service
         as shall:


        (a)      be provided without charge to the user at the point of use;


        (b)      be available to receive and process telephone reports and
                 enquiries at all time on every day of each year; and

        (c)      be operational no later than 31 March 1998.


3.       The Licensee may discharge the duty imposed by paragraph 1 by
         providing the requisite information to each of its customers:


        (a)      on the occasion of the customer first commencing to take a
                 supply from the Licensee; and


        (b)      either:

<PAGE>

                (i)        where bills or statements in respect of charges for
                           the supply of electricity are rendered to the
                           customer, on a quarterly basis (it being sufficient
                           that the information is included on or with any bill
                           or statement); or

                (ii)     where no bills or statements in respect of charges for
                         the supply of  electricity  are rendered to the
                         customer,  on an annual basis

         and by publishing such information in such manner as will in the
opinion of the Licensee secure adequate publicity for it.

4.       The Licensee shall, in so far as is practicable, take steps to inform
         each of its customers of any change to the address or telephone number
         of the service referred to at paragraph 1 prior to such change becoming
         effective.


<PAGE>



Condition 37. Procedures for the detection and prevention of theft, damage and
meter interference
-------------------------------------------------------------------------------


1.       The Licensee shall (and shall ensure that its agents) take all
         reasonable steps to detect and prevent:


        (a)      the theft of electricity at premises which are supplied by it;

        (b)      damage to any electrical plant, electric line or electricity
                 meter through which such premises are supplied; and

        (c)      interference with any electricity meter through which such
                 premises are supplied.


2.       Where a person other than the Licensee is the owner of any electrical
         plant, electric lines or meter through which the Licensee supplies
         electricity to premises, the Licensee shall, as soon as is reasonably
         practicable, inform that person of any incident where it has reason to
         believe:

        (a)      there has been damage to such electrical plant, electric line
                 or meter; or


        (b)       there has been interference with the meter to alter its
                  register or prevent it from duly registering the quantity of
                  electricity supplied.


<PAGE>



Condition 38. Agreements for the provision of meters

1.       The Licensee shall not, in the course of its Supply Business, enter
         into an agreement with any person for the provision of an electricity
         meter at any premises (whatever the nature of that agreement) which is
         intended or is likely to restrict, distort or prevent competition in
         the supply of electricity.


<PAGE>



Condition 39. Generation Security Standard

1.       The Licensee shall make arrangements sufficient to meet the generation
         security standard.


2.       The duty imposed by paragraph 1 shall be discharged either by the
         Licensee complying with the provisions of paragraph 3 below or by the
         making by the Licensee of such other arrangements as may have been
         previously approved in writing for the purpose by the Director.

3.       The Licensee may discharge the duty imposed by paragraph 1 by, for so
         long as the relevant condition is met, purchasing as a pool member
         under the terms of the Pooling and Settlement Agreement quantities of
         electricity which are at all times sufficient to meet the demands of
         all qualifying customers of the Licensee.

4.       The relevant condition referred to in paragraph 3 is that there should
         at any relevant time be electricity available to be purchased under the
         terms of the Pooling and Settlement Agreement at a price less than the
         ceiling price.

5.       The Licensee shall upon request by the Director provide to the Director
         such information as the Director may require for the purpose of
         monitoring compliance with this Condition and to enable the Director
         (having regard to his statutory duties) to review the operation of the
         generation security standard.

6.       The  provisions  of this  Condition  are  without  prejudice  to the
         duties  of the  Licensee  under the  Electricity  Supply
         Regulations 1988.


7.       In this Condition:


         "ceiling price"                           means such price as
                                                   would be equal to the Pool
                                                   Selling Price in
                                                   circumstances where the
                                                   corresponding Pool Purchase
                                                   Price was an amount equal to
                                                   the Value of Lost Load.


<PAGE>


         "generation security standard"            means  such standard  of
                                                   generation security  as will
                                                   ensure that:

                                                   (a)      the  supply  of
                                                            electricity  to
                                                            qualifying
                                                            customers will not
                                                            be discontinued in
                                                            more than 9 years
                                                            in any 100 years;
                                                            and

                                                   (b)      the voltage or
                                                            frequency of
                                                            electricity supplied
                                                            to qualifying
                                                            customers will not
                                                            be reduced below
                                                            usual operational
                                                            limits in more than
                                                            30 years in any 100
                                                            years

                                                   by reason of insufficiency of
                                                   electricity generation
                                                   available for the purposes of
                                                   supply by the Licensee to its
                                                   qualifying customers at times
                                                   of annual system peak demand.

         "Pool Purchase Price" and                 shall each have the meaning
          "Pool Selling  Price"                    from time to time ascribed to
                                                   them in Schedule 9 to the
                                                   Pooling and Settlement
                                                   Agreement.

         "qualifying customer"                     means any purchaser
                                                   from the Licensee entitled
                                                   and requiring at any time to
                                                   be supplied by the Licensee
                                                   at premises within the
                                                   authorised area of the
                                                   Licensee but shall exclude:

                                                   (a)      a contract purchaser
                                                            under an
                                                            interruptible
                                                            contract or a
                                                            contract containing
                                                            load management
                                                            terms to the extent
                                                            that supplies to
                                                            that purchaser may
                                                            be interrupted or
                                                            reduced in
                                                            accordance with the
                                                            terms of that
                                                            contract; and
<PAGE>

                                                   (b)      a tariff customer on
                                                            special tariffs
                                                            which restrict
                                                            supplies to
                                                            particular time
                                                            periods to the
                                                            extent that supplies
                                                            to that customer may
                                                            be interrupted or
                                                            reduced in
                                                            accordance with such
                                                            tariff.

         "Value of Lost Load"                means in respect of the first
                                             financial  year,  the sum
                                             of(pound)2  per  kWh  and,  in
                                             respect  of  each  succeeding
                                             financial year, the sum which
                                             corresponds to(pound)2 per kWh
                                             as adjusted  to reflect the
                                             percentage  change in the
                                             Retail  Price  Index  between  the
                                             index  published  or
                                             determined  in  respect  to the
                                             December  prior  to the
                                             start of that financial year and
                                             the index  published or
                                             determined for December 1989.



<PAGE>



Condition 40. The Master Registration Agreement

1.       The Licensee shall be a party to and shall comply with the provisions
         of the Master Registration Agreement.




<PAGE>



Condition 41. Restriction on use of certain information

1.       Any information relating to or deriving from the management or
         operation of the Distribution Business shall, for the purposes of this
         Condition, be treated as confidential information.

2.       The Licensee shall (and shall procure that its affiliates and related
         undertakings shall) ensure that any of its (or its affiliates' or
         related undertakings') employees, agents, advisers, consultants or
         contractors who:

(a)      is engaged in the management or operation of the Supply Business; and


(b)      is in possession of or has access to confidential information


         shall not use such information in a manner which may obtain for the
         Licensee (or any affiliate or related undertaking of the Licensee) any
         commercial advantage in the operation of the Supply Business or the
         Second Tier Supply Business.

3.       In this Condition:


        "confidential information"      bears the meaning given at paragraph 1.



<PAGE>



Condition 42. Compliance with the Grid Code

1.       The Licensee shall comply with the provisions of the Grid Code in so
         far as applicable to it.


2.       The Director may (following consultation with the Transmission Company)
         issue directions relieving the Licensee of its obligation under
         paragraph 1 in respect of such parts of the Grid Code and to such
         extent as may be specified in those directions.


<PAGE>



Condition 43. Security arrangements

1.       The Licensee shall comply with the provisions of the Fuel Security Code
         and such provisions shall have effect as if they were set out in this
         Licence.


<PAGE>



Condition 44. Pooling and Settlement Agreement

1.       The Licensee shall be a pool member under, and comply with the
         provisions of, the Pooling and Settlement Agreement.





<PAGE>



Condition 45. Conditions of supply affecting customers' statutory rights

1.       The Licensee shall not include in or send with any notice given under
         Section 16(3) of the Act, or any form provided to customers for use in
         giving notice under Section 16(2) of the Act, or any notice sent to
         customers prior to their entering into a tariff or special agreement,
         an invitation to agree to anything which, by virtue of the Act, may
         only be done or (as the case may be) not done:

        (a)      with the agreement of that customer; or


        (b)       in any case where that customer withholds his agreement or
                  makes that agreement subject to terms and conditions to which
                  the Licensee objects, with the approval or consent or by order
                  of the Secretary of State

         unless the form and terms of such invitation have first been submitted
to and approved by the Director.

2.       Nothing in paragraph 1 shall prevent the Licensee from:


        (a)      inviting or requiring a customer to take a supply of
                 electricity under a special agreement in accordance with
                 Section 22 of the Act; or

        (b)       including in any such notice any provision or condition which
                  the Licensee is required or permitted to include in such
                  notice by virtue of Section 16(4) of the Act.

3.       The Licensee shall include in any form provided to a customer for use
         in giving notice under Section 16(2) of the Act a prominent statement
         of the right of such customer to apply to the Director for the
         determination of any dispute arising out of the proposed terms of
         supply.


<PAGE>



Condition 46. Code of practice on payment of bills and guidance for dealing
with customers in difficulty
------------------------------------------------------------------------------


1.       The Licensee shall, no later than 1 January 1998, prepare and submit to
         the Director for his approval a code of practice concerning the payment
         of electricity bills by its Domestic Customers, including appropriate
         guidance for the assistance of such customers who, through misfortune
         or inability to cope with electricity supplied on credit terms, may
         have difficulty in paying such bills.

2.       The code of practice shall include procedures by which the Licensee can
         distinguish customers in difficulty (the "relevant customers") from
         others in default and can:

        (a)      provide general information as to how relevant customers might
                 reduce their bills in the future by the more efficient use of
                 electricity;


        (b)       where such a facility is available, accept in payment for
                  electricity supplied sums which are deducted at source from
                  social security benefits payable to relevant customers;

        (c)      detect failures  by relevant customers to comply with
                 arrangements  entered  into for paying by  instalments
                 charges for electricity supplied;


        (d)      make such arrangements so as to take into account the
                 customers' ability to comply with them;


        (e)      ascertain with the assistance of other persons or
                 organisations, the ability of customers to comply with such
                 arrangements;


        (f)       provide for customers who have failed to comply with such
                  arrangements, or procure for them the provision of, a
                  prepayment meter (where safe and practicable to do so); and
<PAGE>

        (g)       arrange for the calibration of any prepayment meter so
                  provided so as to take into account the customers' ability to
                  pay any of the charges due from them under such arrangements
                  in addition to the other charges lawfully being recovered
                  through the prepayment meter.

3.       In formulating the procedures referred to at paragraph 2 the Licensee
         shall have particular regard:


        (a)      to the  purpose of  avoiding,  in so far as is  practicable,
                 the  disconnection of premises occupied by relevant customers
                 otherwise than following compliance by the Licensee with such
                 procedures; and


        (b)       to the interests of relevant customers who are of pensionable
                  age or disabled or chronically sick and to the purpose of
                  avoiding, in so far as is practicable, the disconnection of
                  premises occupied by such customers during the winter months
                  of each year,

         and the procedures shall be designed for the achievement of such
         purposes.


4.       This Condition is subject to the provisions of Condition 52.





<PAGE>



Condition 47. Provision of supply services for persons who are of pensionable
age or disabled or chronically sick
-----------------------------------------------------------------------------


1.       The Licensee shall, no later than 1 January 1998, prepare and submit to
         the Director for his approval a code of practice detailing the special
         services the Licensee will make available for Domestic Customers who
         are of pensionable age or disabled or chronically sick.

2.       The code of practice shall include arrangements by which the License
         will where appropriate, in respect of its customers:


        (a)       provide where practicable special controls and adaptors for
                  electrical appliances and meters (including prepayment meters)
                  and reposition meters (and shall set out any charges to be
                  made for the provision of such services);

        (b)      provide special means of identifying persons acting on behalf
                 of  the Licensee;


        (c)      give advice on the use of electricity;


        (d)       send bills in respect of the supply of electricity to a
                  customer to any person who is willing to be sent such bills
                  and is nominated by that customer (without prejudice, however,
                  to the right of the Licensee to send such bills both to the
                  customer and to the nominated person where that appears
                  appropriate to the Licensee);

        (e)       make available (free of charge) to blind and partially sighted
                  customers, by telephone or other appropriate means,
                  information concerning the details of any bill relating to the
                  supply of electricity to them and a facility for enquiring or
                  complaining in respect of any such bill or any service
                  provided by the Licensee; and

        (f)       make available (free of charge) to deaf and hearing impaired
                  customers, being in possession of appropriate equipment,
                  facilities to assist them in enquiring or complaining about
                  any bill relating to the supply of electricity to them or any
                  service provided by the Licensee.
<PAGE>

3.       The code of practice shall further include arrangements whereby the
         Licensee will:


        (a)       take reasonable steps to draw the attention of its customers
                  to the existence of a register of customers who may be
                  expected, by virtue of being of pensionable age or disabled or
                  chronically sick, to require:

                (i)     information and advice in respect of the matters set
                         out at paragraph 2; or


                (ii)    advance notice of interruptions to the supply of
                        electricity;


        (b)      maintain such a register, comprising the relevant details of
                 each customer who requests his inclusion on it; and


        (c)       give to those customers so registered such information and
                  advice in respect of the matters set out at paragraph 2 or in
                  respect of interruptions to the supply of electricity as may
                  be appropriate and is of such nature as shall be set out in
                  the code of practice.

4.       This Condition is subject to the provisions of Condition 52.





<PAGE>



Condition 48. Code of practice on procedures with respect to site access

1.       The Licensee shall, no later than 1 January 1998, prepare and submit to
         the Director for his approval a code of practice setting out the
         principles and procedures the Licensee will follow in respect of any
         person acting on its behalf who requires access to customers' premises.

2.       The code of practice shall include procedures calculated to ensure that
         persons  visiting  customers'  premises on behalf of
         the Licensee:


        (a)      possess the skills necessary to perform the required duties;


        (b)      are readily identifiable to members of the public;


        (c)      use passwords provided for vulnerable customers;


        (d)      are appropriate persons to visit and enter customers'
                 premises; and


        (e)       are able to inform customers, on request, of a contact point
                  for help and advice they may require in relation to the supply
                  of electricity.

3.       This Condition is subject to the provisions of Condition 52.





<PAGE>



Condition 49. Supply Business standards of performance

1.       The Licensee shall conduct its Supply Business in the manner which it
         reasonably considers to be best calculated to achieve any standards of
         overall performance or standards of performance in connection with the
         promotion of the efficient use of electricity by customers, as may be
         determined by the Director pursuant to Sections 40 and 41 respectively
         of the Act.

2.       In making payments in accordance with any standards of performance the
         Licensee shall not discriminate:


        (a)      between any persons or class or classes thereof; or


        (b)      as between the Licensee and any persons or class or classes
                 thereof.





<PAGE>



Condition 50. Efficient use of electricity

1.       The Licensee shall, no later than 1 January 1998, prepare and submit to
         the Director for his approval a code of practice setting out the ways
         in which the Licensee will make available to customers such guidance on
         the efficient use of electricity as will, in the opinion of the
         Licensee, enable them to make informed judgments on measures to improve
         the efficiency with which they use the electricity supplied to them.
         Such code of practice shall include, but shall not be limited to:

        (a)       the preparation and making available free of charge to any
                  customer who requests it of a statement, in a form approved by
                  the Director, setting out information and advice for the
                  guidance of customers in the efficient use of electricity
                  supplied to them;

        (b)       the making of arrangements for maintaining sources from which
                  customers may obtain further information about the efficient
                  use of electricity supplied to them, including the maintenance
                  of a telephone information service; and

        (c)        the preparation and making available free of charge to any
                  customer who requests it of a statement or statements of
                  sources (to the extent that the Licensee is aware of the same)
                  outside the Licensee's organisation from which customers may
                  obtain additional information or assistance about measures to
                  improve the efficiency with which they use the electricity
                  supplied to them, such statement or statements to include
                  basic information which is publicly available on financial
                  assistance towards the costs of such measures available from
                  Central or Local Government or through bodies in receipt of
                  financial support from Government in connection with measures
                  to promote the efficiency of energy use.

2.       Where the Director (who may have regard to the need for economy,
         efficiency and effectiveness before giving directions under this
         paragraph) gives directions to do so, the Licensee shall:
<PAGE>

        (a)      review and prepare a revision of the code of practice;


        (b)      take steps to bring to the attention of customers information
                 on the efficient use of electricity supplied to them; and


        (c)      send to each customer a copy of any information published by
                 the Director pursuant to Section 48 of the Act


         in such manner and at such times as will comply with those directions.


3.       This Condition is subject to the provisions of Condition 52.





<PAGE>



Condition 51. Supply Business complaint handling procedure

1.       The Licensee shall, no later than 1 January 1998, prepare and submit to
         the Director for his approval a code of practice detailing the
         procedure for handling complaints from customers about the manner in
         which the Licensee conducts its Supply Business.

2.       Any procedure established in accordance with this Condition shall
         specify the periods within which it is intended that different
         descriptions of complaint should be processed and resolved.

3.       This Condition is subject to the provisions of Condition 52.





<PAGE>



Condition 52. Preparation, review of and compliance with customer service codes

1.       This  Condition  applies to any code of practice  required to be
         prepared by the  Licensee  pursuant to Condition 46 to 48 and
         Condition 50 to 51 of this Licence.


2.       In first preparing such a code the Licensee shall, prior to submitting
         that code to the Director, consult the Relevant Consumers' Committee
         and shall have regard to any representations made by the committee
         about such code or the manner in which it is likely to be operated.

3.       Where before the expiry of 30 days of the Licensee first submitting
         such code to the Director for his approval the Director notifies the
         Licensee that the Director considers the code is not sufficient for the
         purposes of meeting the requirements of this Licence the Licensee shall
         forthwith make such changes as the Director may require.

4.       The Licensee shall, whenever requested to do so by the Director, review
         such code and the manner in which it has been operated, with a view to
         determining whether any modification should be made to it or to the
         manner of its operation.

5.       In carrying out any such review the Licensee shall consult the Relevant
         Consumers' Committee and shall have regard to any representations made
         by it about such code or the manner in which it is likely to be or (as
         the case may be) has been operated.

6.       The Licensee shall submit any revision of such code which, after
         consulting the Relevant Consumers' Committee in accordance with
         paragraph 5, it wishes to make, to the Director for his approval and
         following his approval in writing shall then revise the code.
<PAGE>

7.       The Licensee shall:


        (a)       as soon as practicable following the preparation of any code
                  or any revision made to it send to the Director and the
                  Relevant Consumers' Committee a copy of such code or such
                  revision (in each case in the form approved by the Director);

        (b)       draw the attention of those of its customers to whom such code
                  applies to the existence of the code and of each substantive
                  revision of it and to the means by which they may inspect a
                  copy of such code in its latest form; and

(c) give or send free of charge a copy of such code (as from time to time
revised) to any person who requests it.

8.       No changes may be made to any code otherwise than in accordance with
         the foregoing procedures.


9.       The Licensee shall ensure, so far as reasonably practicable, that it
         complies with such arrangements or procedures (as the case may be) as
         are contained in or described by any code to which this condition
         applies and approved by the Director or any revision to such code
         approved by the Director.


<PAGE>



Condition 53. Record of and report on Supply Business performance

1.       The Licensee shall keep a record of its general operation of the
         arrangements mentioned in Condition 46 to 51 and if the Director so
         directs in writing, of its operation of any particular cases specified,
         or of a description specified, by him.

2.       The Licensee shall keep a statistical record of the performance of the
         Supply Business in relation to the provision of electricity supply to
         its Designated Customers under the terms of contracts or in accordance
         with tariffs fixed under Section 18 of the Act, including services
         relating to:

        (a)      the amounts of electricity  supplied and the recovery of
                 electricity  charges for each of the principal  payment
                 methods and for each set of the contract or tariff terms
                 offered;

        (b)      the disconnection of customers for non-payment of bills and
                 breach of payment arrangements agreed following such
                 non-payment;

        (c)      the holding of security deposits;

        (d)      the installation of prepayment meters calibrated to recover
                 customer debts;

        (e)      the offering of appointments and the making of visits to
                 customers' premises;

        (f)      the response made to enquiries concerning electricity supply
                 matters;


        (g)      the nature of guidance  as to the  efficient  use of
                 electricity  given and the  measures  to improve  the
                 efficient  use of electricity introduced by the Licensee; and

<PAGE>

        (h)       payments made to customers pursuant to the standards of
                  performance prescribed by the Director in accordance with
                  regulations made under Section 39 of the Act or in accordance
                  with paragraph 2 of Condition 22.

3.       The Licensee shall, from time to time as required by the Director,
         provide to the Director and to the Relevant Consumers' Committee such
         of the information contained in the records prepared in accordance with
         paragraphs 1 and 2 as the Director may request in writing.

4.       As soon as is reasonably practicable after the end of each calendar
         year, the Licensee shall submit to the Director and the Relevant
         Consumers' Committee a report dealing with the matters mentioned in
         paragraphs 1 and 2 in relation to that year and shall:

        (a)      publish the report so submitted in such manner as will in the
                 reasonable  opinion of the Licensee secure adequate publicity
                 for it; and


        (b)      send a copy of it free of charge to any person requesting one,


         except that, in performing its obligations under sub-paragraphs 4(a)
         and (b), the Licensee shall exclude from the report such information as
         appears to it to be necessary or expedient to ensure that, save where
         they consent, individual Designated Customers referred to therein
         cannot readily be identified.

5.       The report shall be presented,  so far as is  reasonably  practicable,
         in a standard form  designated by the Director for the
         purposes of this Condition.



<PAGE>



Condition 54. Information given to Designated Customers

1.       The Licensee shall keep each of its Designated Customers (save insofar
         as he receives an unmetered supply) informed of the amount of
         electricity which, since he was last informed, its records show as
         having been consumed by that customer:

        (a)      according to the meter through which he is supplied; or


        (b)      where no meter reading is available, according to the estimate
                 of the Licensee.


2.       The Licensee shall keep each of its Designated Customers informed:


        (a)      that the  Relevant  Consumers'  Committee  or the  Director
                 can assist in resolving complaints which the Licensee has not
                 resolved to the customer's satisfaction; and


        (b)      of how the appropriate office of the Committee or the Director
                 can be contacted.


3.       The Licensee may discharge its duties under paragraphs 1 and 2 by
         providing the relevant information on or with each bill or statement
         given to a customer in respect of charges for the supply of
         electricity, and annually to each customer to whom no such bills or
         statements are rendered.


<PAGE>



Condition 55. Publication of information to customers

1.       Subject to paragraph 3, the Licensee shall inform each of its customers
         of a number or numbers ("the Supply Number(s)") relevant to the
         registration, under the Master Registration Agreement, of a supplier of
         electricity to the premises owned or occupied by such customer:

        (a)      in a form in  accordance  with the  terms of a  direction
                 issued by the  Director,  on each  bill or  statement given to
                 the  customer in relation to the supply of electricity; and


        (b)      annually where the customer does not receive such a bill or
                 statement.


2.       The Supply Number shall consist of a number of data items, each of
         which shall be represented by a numerical identifier which shall:

        (a)      have the number of digits specified in a direction issued by
                 the Director;


        (b)      be approved by the Director; and


        (c)      be used by the Licensee in common with all Electricity
                 Suppliers.


3.       The  Director  may issue a direction  relieving  the Licensee of its
         obligation  under  paragraphs 1 and 2 to such extent and
         subject to such terms and conditions as he may specify in that
         direction.





<PAGE>



Condition 56. Relations with the Relevant Consumers' Committee

1.       The Licensee shall meet with the Relevant Consumers' Committee whenever
         requested to do so by that committee, up to a maximum of six times in
         every year during the period of this Licence.

2.       Without prejudice to paragraph 1, the Licensee shall meet the Relevant
         Consumers' Committee at least once in every year during the period of
         this Licence.

3.       In at least one meeting with the Relevant Consumers' Committee in every
         year during the period of this Licence, the Licensee shall be
         represented by one or more directors of the Licensee.


<PAGE>



Condition 57. Health and safety of employees

1.       The Licensee shall, together with all other licensees, consult with
         appropriate representatives of persons employed by itself and by those
         licensees in order to establish and maintain an appropriate machinery
         or forum for the joint consideration of matters of mutual concern in
         respect of the health and safety of such persons.

2.       In this Condition:


         "licensees"          means  all  holders  of  licences granted under
                              Section 6(1)(a), 6(1)(b), 6(1)(c) and 6(2) of the
                              Act.



<PAGE>



Condition 58. Designated Premises

1.       For the purposes of this Licence, the question whether any premises are
         "Designated Premises" shall be determined in accordance with the
         provisions of this Condition.

2.       Premises are Designated Premises if they are either:


        (a)      Domestic Premises; or

        (b)       premises at which, in the reasonable expectation of the
                  Licensee at the time of entering into a contract for the
                  supply of electricity to such premises, the normal annual
                  consumption of electricity will amount to no more than 12,000
                  kWh,

         but excluding premises referred to at sub-paragraph (b) which receive
         an unmetered supply, or which are supplied through half-hourly or
         maximum demand metering equipment or under the terms of a multi-site
         contract.

3.       For the purposes of this Condition, a "multi-site contract" is a
         contract for the supply of electricity both to any premises which do
         not fall within the terms of sub-paragraphs 2(a) or (b) and to one or
         more other premises (not being Domestic Premises), all of which
         premises are owned or occupied by:

        (a)      the same person or body of persons whether corporate or
                 unincorporate; or


        (b)       an undertaking (the "principal undertaking") and any holding
                  company, subsidiary, or subsidiary of the holding company of
                  that principal undertaking, or any other undertaking in which
                  the principal undertaking has a participating interest.

4.       Any premises supplied by the Licensee which (in accordance with
         paragraphs 1 to 3) were not Designated Premises at the time at which
         the Licensee entered into a contract for their supply shall,
         notwithstanding subsequent changes to the nature or level of the
         consumption of electricity at those premises, not become Designated
         Premises for the purposes of this Licence prior to the time at which
         they cease to be supplied by the Licensee.
<PAGE>

5.       Any premises supplied by the Licensee which (in accordance with
         paragraphs 1 to 3) were Designated Premises at the time at which the
         Licensee entered into a contract for their supply shall cease to be
         Designated Premises for the purposes of this Licence where:

        (a)      they have been continuously supplied by the Licensee for a
                 period of at least 12 months and:


                (i)      they are not, or are no longer, Domestic Premises; and


                (ii)     it is reasonably to be expected that the normal annual
                         consumption  of  electricity  at the premises will
                         amount to more than  12,000 kWh; or


        (b)       (not being, or being no longer, Domestic Premises) the
                  premises commence receipt of an unmetered supply or a supply
                  through half-hourly or maximum demand metering equipment or
                  under the terms of a multi-site contract.

6.       In this Condition:


         "maximum demand metering
         equipment"                                  means metering equipment
                                                     which is capable of
                                                     recording the demand for
                                                     electricity supplied to
                                                     premises during the half
                                                     hour of maximum demand in
                                                     any period of supply.


<PAGE>



Condition 59. Terms for supply of electricity incompatible with Licence
Conditions

1.       Without prejudice to its rights and obligations under the Act, the
         Licensee shall not enter into, offer to enter into or enter into a
         variation of any contract for the supply of electricity to a customer
         at Designated Premises otherwise than on terms which comply with the
         Licensee's obligations under this Licence.

2.       The Licensee shall not enforce or take advantage of any term of a
         contract for the supply of electricity to a customer at Designated
         Premises if the inclusion of that term was in breach of the provisions
         of this Licence.

3.       The Licensee shall not take advantage of the omission of any term from
         a contract for the supply of electricity to a customer at Designated
         Premises if the omission of that term was in breach of the provisions
         of this Licence.


<PAGE>



Condition 60. Limitation on requirements for termination fees

1.       Where the Licensee enters into any Designated Supply Contract in the
         circumstances set out at paragraph 2 it may not in such contract
         provide for the payment of any termination fee by the Designated
         Customer.

2.       Paragraph 1 applies in respect of any Designated Supply Contract
         entered into prior to the date which is 90 days following the earliest
         date specified (and not subsequently withdrawn or varied to a later
         date) in any direction or variation of a direction issued by the
         Director, pursuant to condition 3 of the licence held by any Second
         Tier Supplier, in relation to the supply of electricity to all premises
         within the authorised area.


<PAGE>



Condition 61. Revision of the Contract Terms Conditions

1.       The Director, in accordance with the provisions of this Condition, may
         from time to time review (in whole or in part) the provisions and
         operation of the Contract Terms Conditions in the licences of all
         Electricity Suppliers with a view to establishing whether any revision
         should be made to the Contract Terms Conditions in all such licences.

2.       At the commencement of any review by the Director, the Director shall:


        (a)       give to all Relevant Parties a notice in writing which sets
                  out the terms of the review and of any proposals in connection
                  therewith and which invites the submission of any
                  representations by a specified date (being not less than 28
                  days after the date of the notice); and

        (b)        publish such notice or an accurate summary of it in a manner
                  which will, in the opinion of the Director, secure adequate
                  publicity for it.

3.       On receiving from the Director notice of such a review the Licensee may
         submit any representations on matters within the terms of the review by
         the date specified in the notice.

4.       As soon as practicable following the completion of any such review, the
         Director shall send to each Relevant Party, and to any person who has
         made representations to him by virtue of the notice published under
         sub-paragraph 2(b), a copy of:

        (a)      a report on the outcome of such review;


        (b)       any revisions which he proposes to make, having regard to any
                  representations received during such review, to the Contract
                  Terms Conditions in the licences of all Electricity Suppliers;
<PAGE>

        (c)      a statement of his reasons for proposing those revisions; and


        (d)       a notice specifying the time (being not less than 28 days from
                  the date the Director issues the notice) within which
                  Electricity Suppliers which are entitled to supply electricity
                  to Designated Premises shall state whether or not they consent
                  to the proposed revisions to the Contract Terms Conditions in
                  their licences.

5.       A revision proposed to be made by the Director to the Contract Terms
         Conditions of all Electricity Suppliers may be made only where the
         Director is satisfied that the figures determined in accordance with
         paragraphs 6 and 7 (expressed as a percentage) are each not less than
         90 per cent.

6.       The figure determined in accordance with this paragraph shall be
         calculated under the following formula:


                                          C   x 100
                                         ---
                                        C+N

         where:


         C =      the number of Designated Premises supplied on contract by
                  consenting  Electricity Suppliers; and


         N =      the number of Designated Premises supplied on contract by
                  non-consenting Electricity Suppliers


         as estimated (in each case) by the Director on the basis of the
information most recently available to him.

7.       The figure determined in accordance with this paragraph shall be
         calculated under the following formula:


                                        __C__ _  x 100
                                        C+N

         where:


         C =      the number of consenting Electricity Suppliers; and


         N =      the number of non-consenting Electricity Suppliers.

<PAGE>

8.       In paragraphs 6 and 7 the expressions "consenting" and "non-consenting"
         refer (as the case may be) to the consent or otherwise of Electricity
         Suppliers which are entitled to supply electricity to Designated
         Premises to the proposed revision to the Contract Terms Conditions in
         their licences.

9.       Where the Director is satisfied that the figures determined in
         accordance with paragraphs 6 and 7 (expressed as a percentage) are each
         not less than 90 per cent the Director may amend the Contract Terms
         Conditions of the Licensee in accordance with the proposed revision.

10.      No revision made to the Contract Terms Conditions by virtue of this
         Condition may introduce an obligation in respect of any matter other
         than one which:

        (a)       is provided for, or is reasonably ancillary to a matter
                  provided for, under the Contract Terms Conditions on the date
                  on which such Conditions come into force;

        (b)       concerns  the terms of  contracts  offered  or entered into
                  by the  Licensee for the supply of electricity to Designated
                  Premises; or

        (c)       concerns any dealings with customers by or on behalf of the
                  Licensee prior to and for the purpose of offering or entering
                  into contracts for the supply of electricity to Designated
                  Premises.
<PAGE>

11.      In this Condition:


         "Relevant Parties"                         means the Licensee,
                                                    all other Electricity
                                                    Suppliers, the Electricity
                                                    Consumers' Committees and
                                                    such other persons or bodies
                                                    as in the opinion of the
                                                    Director are representative
                                                    of those likely to be
                                                    affected by a revision to
                                                    the Contract Terms
                                                    Conditions.


<PAGE>



                  Sub-Section (2) The Contract Terms Conditions

Condition 62. Designated Supply Contracts

1.       A Designated Supply Contract is a contract for the supply of
         electricity to Designated Premises, as varied from time to time, which
         complies with the provisions of this Condition.

2.       Without prejudice to its rights and obligations under the Act, the
         Licensee shall not supply electricity to Designated Premises on
         contract except under a Designated Supply Contract.

3.       A Designated Supply Contract shall:


        (a)      be in a standard form, save that there may be different forms
                 for different areas, cases and circumstances;


        (b)      set out all the terms and  conditions,  including  terms as to
                 price,  on which the Licensee will supply  electricity  in the
                 relevant case; and


        (c)      contain terms reflecting the termination provisions of
                 Condition 66 and 67.


4.       Any Designated Supply Contract for both the supply of electricity and
         the provision of goods or services shall identify separately the charge
         for that supply from the charge for the goods or services.

5.       Where a Designated Supply Contract may be terminated by a customer by
         virtue of any provision included in that contract in compliance with
         Condition 66 and 67, the Licensee may at its discretion accept a lesser
         period of notice than is specified in that provision.

6.       Nothing in this Licence shall prevent the Licensee from entering into a
         Designated Supply Contract which contains provisions for its
         termination that are additional to and do not derogate from those set
         out at Condition 66 and 67.

<PAGE>



Condition 63. Contractual terms

1.       Where the Licensee offers to supply electricity to Domestic Premises
         under Designated Supply Contracts, it shall have available forms of
         Designated Supply Contract which provide for the payment of charges for
         electricity supplied to Domestic Premises:

        (a)      by prepayment through a prepayment meter;


        (b)      by different methods, including:


                (i)      by cash, at such places and to such persons as are
                         reasonable in all the circumstances; and


                (ii)     by cheque, and


        (c)      at a reasonable range of different intervals, including:


                (i)      paying monthly a predetermined sum; and


                (ii)     paying quarterly in arrears.


2.       Before entering into any contract to supply electricity to Domestic
         Premises (other than through a prepayment meter) the Licensee shall
         inform the customer of and offer to enter into Designated Supply
         Contracts which comply with sub-paragraphs 1(b) and (c).

3.       The Licensee shall process all requests for a supply of electricity to
         Designated  Premises  without undue preference or undue
         discrimination.

4.       The Licensee shall send copies of each of the forms of Designated
         Supply Contract (as revised from time to time) under which it supplies
         or offers to supply electricity:
<PAGE>

        (a)      on receipt of a request, to any person; and


        (b)        not later than the date on which it first offers to supply
                  electricity under each such form of Designated Supply Contract
                  (or revision thereof), to the Director.

5.       The Licensee shall prepare, in respect of each form of Designated
          Supply Contract:


        (a)      a document which sets out an accurate summary of the Principal
                 Terms of that form of Designated Supply Contract; and


        (b)       particulars of inducements offered to any person entering into
                  such a contract which might reasonably be expected materially
                  to influence the decision whether or not to enter into it.

6.       The Licensee shall publish the documents and particulars referred to at
         paragraph 5 in a manner that will in the opinion of the Licensee secure
         adequate publicity for them, and shall send copies of them to the
         Director no later than the date on which they are published.



<PAGE>



Condition 64. Notification of terms

1.       Before entering into any Designated Supply Contract the Licensee shall
         take all reasonable steps to draw the attention of the customer to the
         Principal Terms of the contract.

2.       Where the Licensee has entered into a Designated Supply Contract it
         shall (except where it has already done so) provide the customer within
         2 working days of the date of the contract with a copy of its full
         terms and conditions.

3.       Subject to paragraph 4 the Licensee shall, at least 30 days before any
         Designated Supply Contract to supply electricity for a specified period
         is due to expire, send to the customer:

        (a)       a written offer to enter into a new contract for supply from
                  the date of expiry of the existing contract, drawing the
                  attention of the customer to the Principal Terms relevant to
                  that offer;

        (b)      an accurate summary of the Principal Terms of other contracts
                 which the Licensee will make available to the customer; and


        (c)      details of how the customer can obtain continuity of supply
                 from the Licensee.


4.       Paragraph 3 shall not apply where:


        (a)      the  customer has informed the Licensee that he does not
                 wish to continue to be supplied by it after the expiry of the
                 existing contract; or


        (b)       it is not reasonable in all the circumstances for the Licensee
                  to be required to continue to supply that customer and the
                  Licensee has (at least 30 days before the contract was due to
                  expire) both notified the customer to that effect and informed
                  him that he must make arrangements to obtain a supply from
                  another Electricity Supplier.

<PAGE>


5.       Where a Designated Supply Contract allows for its unilateral variation
         (in any respect) by the Licensee and is so varied to the significant
         disadvantage of the customer, the Licensee shall within 10 days of the
         variation give to the customer written notice:

        (a)      of the variation;


        (b)      of the customer's right to terminate the contract; and


        (c)      of the effect of paragraph 6.


6.       Where a customer gives to the Licensee a valid notice of termination
         within 14 days of receiving notice under paragraph 5, the Licensee
         shall treat the variation as ineffective and shall neither enforce nor
         take advantage of it.

7.       Where the Licensee believes that any of its customers no longer
         occupies or is about to vacate Designated Premises to which it supplies
         electricity, it shall as soon as reasonably practicable provide any new
         occupier of those premises with an accurate summary of the Principal
         Terms of contracts it will make available to him.


<PAGE>



Condition 65. Security deposits

1.       The Licensee shall not, in respect of the supply of electricity under
         any Designated Supply Contract, require a deposit:


        (a)        where the customer is prepared to be supplied through a
                  prepayment meter and it is reasonably practicable in all the
                  circumstances (including in particular the risk of loss or
                  damage) for the Licensee to provide such a meter; or

        (b)       where it is otherwise unreasonable in all the circumstances to
                  do so.


2.       Any deposit required of a Designated Customer may be 1 1/2 times the
         value of the average quarterly consumption of electricity reasonably
         expected at the relevant premises, or more if that is reasonable in all
         the circumstances.

3.       Where the Licensee requires a deposit of a Designated Customer it shall
         at the same time inform that customer of the effect of paragraphs 5 and
         7.

4.       Where the Licensee holds any deposit it shall pay interest, at a rate
         it shall fix from time to time with the approval of the Director, on
         every sum of 50p deposited for every 3 months during which that sum is
         held.

5.       Subject to paragraph 6, any deposit given by a Designated Customer
         shall be repaid (with interest) by the Licensee:


        (a)      within 14 days where,  in the previous 12 months,  the
                 customer has paid all charges for electricity supplied within
                 28 days of each written demand made; or


        (b)       as soon as reasonably practicable, and in any event within 1
                  month, where the Licensee has ceased to supply the customer
                  and the customer has paid all charges for electricity
                  supplied.


<PAGE>

6.       Sub-paragraph 5(a) shall not apply where it is reasonable in all the
         circumstances for the Licensee to retain the deposit.


7.       Any dispute arising under this Condition between the Licensee and a
         Designated Customer may be referred by either party to the Director.
         The Director shall determine any such dispute, following such practice
         and procedure as he considers appropriate.


<PAGE>



Condition 66. Termination of contracts on notice

1.       Each Designated Supply Contract shall contain a term allowing the
         customer to terminate such contract at any time by:


        (a)      giving to the Licensee a valid notice of termination; and


        (b)      subject to paragraph 6, paying to the Licensee on demand a
                 termination fee.


2.       A notice of termination is valid where it is given at least 28 days in
         advance of the date on which it is to take effect and where, not later
         than that date, the requirements of paragraphs 3 and (unless the
         Licensee expressly agrees to waive it) 4 are satisfied.

3.       The requirement of this paragraph is that either:


        (a)      another Electricity Supplier commences a supply of
                 electricity to the relevant premises; or

        (b)      the relevant premises are cut off because the customer at
                 those premises has ceased to require a supply.


4.       The requirement of this paragraph is that no charges for electricity
         supplied to the customer (whether at the relevant premises or at any
         premises previously occupied by him), having been demanded in writing
         prior to the notice of termination being given, remain owing to the
         Licensee more than 28 days after that demand was made.

5.       Each Designated Supply Contract shall provide that a notice of
         termination which is not valid shall not be effective to terminate such
         contract.

6.       A termination fee shall not be demanded of a customer where:
<PAGE>


        (a)      the contract was terminated under any provision of Condition
                 67;


        (b)      the contract was a contract of indefinite length, and was
                 terminated other than during a fixed term period;


        (c)       the Licensee notified the customer, under paragraph 5 of
                  Condition 64, of a unilateral variation of the contract and
                  the customer gave notice of termination in accordance with
                  paragraph 6 of that Condition; or

        (d)       the contract was a contract to which paragraph 4 of Condition
                  67 applied and the Licensee did not, before entering into it,
                  take all reasonable steps to draw the attention of the
                  customer to the effect of the term set out at that paragraph.

7.       Where a  termination fee is payable, it shall be of an amount not
         greater than that which the  Licensee  may in all the
         circumstances reasonably require.


<PAGE>



Condition 67. Termination of contracts in specified circumstances

1.       Each Designated Supply Contract shall provide that the contract will
         terminate:


        (a)      on the date on which the customer ceases to own or occupy the
                 relevant  premises,  having  given the  Licensee  at least 2
                  working days' notice of that date; or


        (b)      where the customer has ceased to own or occupy the premises
                 without  giving the Licensee at least 2 working days' notice,
                 on  the first in time of:


                (i)      the second working day after he has given notice to
                         the Licensee;


                (ii)     the next day on which the meter is due to be read; and


                (iii)     the date on which any subsequent owner or occupier
                          enters into a contract or tariff agreement for the
                          supply of electricity to the premises.

2.       Each Designated Supply Contract shall provide that where it is
         terminated by virtue of a term included in the contract in compliance
         with paragraph 1, the customer shall remain liable for any charges for
         the supply of electricity until the date of termination.

3.       Each Designated Supply Contract shall provide that it may be terminated
         immediately by either party at any time after the Director or the
         Secretary of State has revoked this Licence.

4.       Any Designated Supply Contract which:


        (a)      provides for the Licensee to supply electricity for a
                 specified period of more than 12 months; or


        (b)      contains an initial fixed term period,

<PAGE>

shall provide that it may be terminated immediately by the customer at any time
within 5 working days of the date of the contract.

5.       Where a Designated Supply Contract is for both the supply of
         electricity and the provision of goods or services:


        (a)      any reference in the Contract Terms  Conditions to its
                 termination is a reference to its termination in respect of
                 the supply of electricity alone; and

        (b)       on its termination by virtue of any provision of the Contract
                  Terms Conditions, the Licensee may require the customer to
                  give any reasonable security for his future compliance with
                  the contract for the provision of goods or services.



<PAGE>



Condition 68. Assignment of outstanding charges

1.       This Condition shall apply where:


        (a)      the Licensee has  commenced  the supply of  electricity  to
                 Domestic  Premises at which a supply was  previously  given to
                 its customer by the Previous Supplier;


        (b)       the customer has failed to pay, within 28 days of receiving a
                  demand in writing, any charges due from him to the Previous
                  Supplier for the supply of electricity at those premises;

        (c)      that failure  occurred  after either the  Previous  Supplier
                 was informed of the change of supplier or the Licensee
                 commenced supply to the premises (whichever is the earlier);


        (d)       the Previous Supplier has given written notice to the customer
                  that it proposes to assign the debt to the Licensee, which may
                  be entitled to reclaim from him its costs in recovering the
                  debt; and

        (e)      the Licensee has received from the Previous Supplier a notice
                 in accordance with paragraph 2.


2.       A notice in accordance with this paragraph is one which:


        (a)      is given at least 14 days after the notice  referred to at
                 sub-paragraph  1(d) and is received by the Licensee within
                 90 days of it commencing a supply to the premises;


(b)      specifies the amount of the debt which remains unpaid;

<PAGE>

        (c)      states that the Previous  Supplier has used all reasonable
                 endeavours to recover the debt,  which remains unpaid at least
                 42 days after being demanded in writing; and


        (d)       states that the Previous Supplier intends to assign to the
                  Licensee the debt, up to a maximum sum of one-third of the
                  value (calculated in accordance with the charges of the
                  Previous Supplier to the customer immediately before it ceased
                  to supply him) of the average annual consumption reasonably
                  expected of the customer.

3.       Where this Condition applies the Licensee shall, within 60 days of
         receiving a notice under paragraph 2 and in consideration of the
         assignment of the debt, pay to the Previous Supplier the sum specified
         under sub-paragraph 2(d) (less, where they cannot be reclaimed from the
         customer, its reasonable costs of recovering that debt).

4.       For the purposes of this Condition, a customer shall not be regarded as
         being in debt to the Previous Supplier to the extent to which that debt
         is genuinely in dispute.

5.       In this Condition:


         "Previous Supplier"                      means, in relation
                                                   to any premises, the
                                                   Electricity Supplier which
                                                   supplied electricity to those
                                                   premises immediately prior to
                                                   the commencement of supply by
                                                   the Licensee.


<PAGE>



Condition 69. Modification of provisions under Condition 66 and 68

1.       In this  Condition,  the  "relevant  provisions"  are the  provisions
         of paragraph 4 of Condition 66 and Condition 68 of this
         Licence (or any of them).


2.       Where the Director considers (having regard to any representations made
         to him) that in any specified class of cases the relevant provisions do
         not fulfil the requirements of paragraph 4, he may direct that they
         shall cease to have effect in that class of cases.

3.       Where a direction under paragraph 2 has been made and the Director
         considers (having regard to any representations made to him) that in
         the specified class of cases the relevant provisions would fulfil the
         requirements of paragraph 4, he may direct that they shall again have
         effect in those cases.

4.       The requirements of this paragraph are that, in the specified class of
         cases, the operation of the relevant provisions:


        (a)      significantly reduces the number of unrecovered debts
                 otherwise to be expected; or


        (b)      involves expenditure in debt recovery which is less than the
                 reduction in the value of unrecovered debts which it achieves.

5.       Any direction under paragraphs 2 or 3 shall be made by a notice given
         to the Relevant Parties which shall specify:


        (a)      the relevant provisions to which it applies;


        (b)      the class of cases to which it applies; and

<PAGE>

        (c)      the date on which it shall have  effect  (being,  in a
                 direction  under  paragraph  3, at least 3 months  after the
                 notice is given).


6.       In this Condition:


         "Relevant Parties"             means the Licensee,
                                        all other Electricity
                                        Suppliers, the Electricity
                                        Consumers' Committees and
                                        such other persons or bodies
                                        as in the opinion of the
                                        Director are representative
                                        of those likely to be
                                        affected by a revision to
                                        the relevant provisions.


<PAGE>



Condition 70.  Marketing of electricity to Designated Customers

1.       This  Condition  applies to the  marketing  activities  of the
         Licensee  in respect of the supply or the  proposed  supply of
         electricity to the Designated Premises.


2.       This Condition shall cease to have effect on a date (the "termination
         date") which shall be 31 March 2000, provided that:


        (a)       if the Director, after consultation with the Licensee, all
                  other Electricity Suppliers, the electricity consumers'
                  committees and such other persons or bodies as in the opinion
                  of the Director are representative of those likely to be
                  affected, gives notice for the purposes of this Condition
                  generally:

                (i)      by  publishing  the notice in such a manner as the
                         Director  considers  appropriate  for the  purpose of
                         bringing  it to the attention of persons likely to be
                         affected by it; and


                (ii)     by sending a copy of the notice to all Electricity
                         Suppliers and electricity consumers' committees,


                  that he considers that the development of competition in
                  electricity supply is such as to require the continuation of
                  any part of this Condition until such date - not later than
                  two years from the termination date - as may be specified in
                  the notice (the "new termination date"), then such part of
                  this Condition as may be specified in the notice shall
                  continue to apply as if for the termination date there were
                  substituted the new termination date; and

        (b)      notice under sub-paragraph (a) may be given on more than one
                 occasion.


<PAGE>


The Licensee shall:


        (a)       set up appropriate procedures for the selection of staff
                  employed or engaged in roles the principal duties of which
                  involve oral communication with Designated Customers for the
                  purposes of the marketing activities of the Licensee;

        (b)      take all reasonable steps to ensure that each such person is
                 trained so as to have a sufficient understanding of:


                (i)      the arrangements for competition in electricity supply
                         in England & Wales; and


                (ii)     the Principal Terms of Designated Supply Contracts
                         made available by the Licensee;


                  such that any relevant advice given by him to Designated
                  Customers is not misleading;


        (c)      take all reasonable steps to ensure that:


                (i)      a Designated Customer may readily identify the
                         Licensee whenever he is contacted by a representative
                         of the Licensee; and


                (ii)     any unsolicited contact made on behalf of the Licensee
                         with any  Designated Customer takes place at a
                         reasonable time; and


        (d)       take all reasonable steps to ensure that any agents or
                  sub-contractors of the Licensee set up equivalent procedures
                  and take equivalent steps to those set out at sub-paragraphs
                  (a), (b) and (c).

4.       Where a contract has been entered into by a Designated Customer in the
         course either of a visit to his premises by a representative of the
         Licensee or of a telephone conversation between him and a
         representative of the Licensee, the Licensee shall, through a
         representative who is not engaged in activities leading to the making
         of contracts between the Licensee and customers, and not less than 24
         hours nor more than 14 days after the date of the contract:
<PAGE>

        (a)      use its reasonable endeavours to contact the customer by
                 telephone or by letter seeking his confirmation that:


                (i)      he understands that he has entered into an electricity
                         supply contract;


                (ii)     he is content to have entered into that contract; and


                (iii)    he is content with the way in which the marketing
                         activities of the Licensee were conducted;


        (b)       if in the course of such telephone contact, or within a
                  reasonable period of the despatch of such a letter, the
                  customer indicates that he is not content to have entered into
                  the contract and wishes to terminate it, take all reasonable
                  steps to ensure that the contract is terminated and, where
                  reasonably practicable, that the Licensee does not commence a
                  supply to the customer; and

        (c)       if the response of the customer, alone or when considered with
                  the responses of other customers, suggests weaknesses in the
                  methods, systems or personnel employed or engaged by the
                  Licensee or its agents or sub-contractors for the purpose of
                  its marketing activities, ensure that all reasonable steps to
                  remedy the matter are taken.

5.       Where, by virtue of any Designated Supply Contract, electricity is not
         to be supplied to premises before the expiry of 60 days after the date
         of the contract, the Licensee shall take reasonable steps during the
         period after that date and prior to the commencement of supply to keep
         the customer informed that he has entered into an electricity supply
         contract with the Licensee.

<PAGE>


6.       The complaint handling procedures to be established by the Licensee in
         accordance with Condition 51 shall provide in appropriate cases for the
         payment of compensation to Designated Customers adversely affected by
         failure by the Licensee to perform its obligations under this
         Condition.

7.       The Licensee shall keep a record of its compliance with its
         obligations under this Condition including-

        (a)  the contacting of customers in pursuance of sub-paragraph 4(a) and
             the response of customers to such contact;


        (b)  the termination of contracts in pursuance of sub-paragraph 4(b);
             and


        (c)   compensation paid in pursuance of paragraph 6.


8.       Except as the Director may for the purposes of this Condition
         determine, as soon as reasonably practicable after the end of each
         period of three months ending on 31 March, 30 June, 30 September and 31
         December in every year, the Licensee shall submit to the Director and
         to all Relevant Electricity Consumers' Committees a report dealing with
         the matters specified in paragraph 7 in that period and shall:

        (a)      publish the report so submitted in such manner as will in the
                 opinion of the Licensee secure adequate publicity for it; and


        (b)      send a copy of it free of charge to any person requesting one,


         except that, in performing its obligations under sub-paragraphs (a) and
         (b), the Licensee shall exclude from the report such information as
         appears to it to be necessary or expedient to ensure that, save where
         they consent, individual customers referred to therein cannot readily
         be identified.
<PAGE>

9.       Reports in pursuance of paragraph 8 shall be presented by the Licensee,
         in so far as is reasonably practicable, in a standard format submitted
         to and approved by the Director for the purposes of this Condition.

10.      Except as the Director may approve:


        (a)      for the purpose of protecting the interests of any Designated
                 Customer who, prior to the date on which this Condition came
                 into force, may have made a payment in advance with a view to
                 arranging a supply of electricity; or

        (b)      where any payment in advance is wholly or mainly for services
                 other than arranging the supply of energy,


         the Licensee shall not enter into any commercial relations connected
         with the supply of electricity to Designated Premises with any person
         who has sought, after the coming into force of this Condition, payment
         in advance (other than a security deposit) from any Designated Customer
         with a view to arranging a supply of electricity, and the Licensee
         shall not enter into a contract for the supply of electricity to any
         such customer made through the agency (either for the Licensee or for
         any customer) of such a person.

11.      In this Condition:


         "marketing activities"                        means any
                                                       activities of the
                                                       Licensee directed at or
                                                       incidental to the
                                                       identification of and
                                                       communication with
                                                       Designated Customers
                                                       supplied or to be
                                                       supplied with electricity
                                                       by the Licensee, and
                                                       includes entering into
                                                       contracts with such
                                                       customers.

         "representative"                              in relation to the
                                                       Licensee, means any
                                                       person directly or
                                                       indirectly authorised to
                                                       represent the Licensee in
                                                       its dealings with
                                                       customers.


<PAGE>



                          SECTION C. COMMON OBLIGATIONS

Condition 71. Separate accounts for Separate Businesses

1.       The first financial year of the Licensee shall run from 1st April 1990
         to 31st March 1991, and thereafter each financial year of the Licensee
         shall run from 1st April to the following 31st March.

2.       The remaining paragraphs of this Condition apply for the purpose of
         ensuring that the Licensee (and any affiliate or related undertaking)
         maintains accounting and reporting arrangements which enable separate
         accounts to be prepared for each Separate Business and showing the
         financial affairs of each such Separate Business.

3.       The Licensee shall in respect of each Separate Business:


        (a)       keep or cause to be kept for the period referred to in Section
                  222(5)(b) of the Companies Act 1985 and in the manner referred
                  to in that section such accounting records in respect of each
                  Separate Business as would by Section 221 of the Companies Act
                  1985 be required to be kept in respect of each such business
                  if it were carried on by a separate company, so that:

                (i)        the revenues, costs, assets, liabilities, reserves
                           and provisions of, or reasonably attributable to,
                           each Separate Business are separately identifiable in
                           the books of the Licensee (and any affiliate or
                           related undertaking) from those of any other
                           business; and

                (ii)       the revenues, costs, assets, liabilities, reserves
                           and provisions of, or reasonably attributable to, the
                           Existing Generation Business and the New Generation
                           Business are separately identifiable from each other
                           in the books of the Licensee (and any affiliate or
                           related undertaking).
<PAGE>

        (b)      prepare on a consistent basis from such accounting records in
                 respect of:


                (i)        each financial year, accounting statements comprising
                           a profit and loss account, a balance sheet and a cash
                           flow statement, together with notes thereto, and
                           showing separately in respect of each Separate
                           Business and in appropriate detail the amounts of any
                           revenue, cost, asset, liability, reserve or provision
                           which has been either:

                        (aa)     charged from or to any other business (whether
                                 or not a Separate  Business)  together with a
                                 description of the basis of that charge; or


                        (bb)      determined by apportionment or allocation
                                  between any Separate Business and any other
                                  business (whether or not a Separate
                                  Business) together with a description of the
                                  basis of the apportionment or allocation;
                                  and

                (ii)     the first six months of each financial year, an
                         interim profit and loss account;


        (c)       procure, in respect of the accounting statements prepared in
                  accordance with this Condition in respect of a financial year,
                  a report by the Auditors and addressed to the Director stating
                  whether in their opinion those statements have been properly
                  prepared in accordance with this Condition and give a true and
                  fair view of the revenues, costs, assets, liabilities,
                  reserves and provisions of, or reasonably attributable to, the
                  Separate Business to which the statements relate; and

        (d)       deliver to the Director a copy of the account referred to in
                  sub-paragraph (b)(ii), the Auditors' report referred to in
                  sub-paragraph (c) and the accounting statements referred to in
                  sub-paragraph (b)(i) as soon as reasonably practicable, and in
                  any event not later than three months after the end of the
                  period to which it relates in the case of the account referred
                  to in sub-paragraph (b)(ii) and six months after the end of
                  the financial year to which they relate in the case of the
                  accounting statements and Auditors' report referred to in
                  sub-paragraphs (b)(i) and (c).


<PAGE>

4.       Unless the Director so specifies in directions issued for the purposes
         of this Condition or with his prior written approval the Licensee shall
         not in relation to the accounting statements in respect of a financial
         year change the bases of charge or apportionment or allocation referred
         to in sub-paragraph 3(b)(i) from those applied in respect of the
         previous financial year.

5.       Where, in relation to the accounting statements in respect of a
         financial year, the Licensee has changed such bases of charge or
         apportionment or allocation from those adopted for the immediately
         preceding financial year, the Licensee shall, if so directed in
         directions issued by the Director, in addition to preparing accounting
         statements on those bases which it has adopted, prepare such accounting
         statements on the bases which applied in respect of the immediately
         preceding financial year.

6.       Accounting statements in respect of a financial year prepared under
         sub-paragraph 3(b)(i) shall, so far as reasonably practicable and
         unless otherwise approved by the Director having regard to the purposes
         of this Condition:

        (a)       have the same content and format (in relation to each Separate
                  Business) as the annual accounts of the Licensee prepared
                  under Section 226 and, where appropriate, Section 227 of the
                  Companies Act 1985 and conform to the best commercial
                  accounting practices including all relevant accounting
                  standards issued by the member bodies of the Consultative
                  Committee of Accounting Bodies currently in force;

        (b)      state the accounting policies adopted; and


        (c)       (with the exception of the part of such statement which shows
                  separately the amounts charged, apportioned or allocated and
                  describes the bases of charge or apportionment or allocation
                  respectively and with the exception of the accounting
                  statements relating to the Second Tier Supply Business), be
                  published with the annual accounts of the Licensee.


<PAGE>

7.       Unless the accounting statements prepared under sub-paragraph 3(b)(i)
         are prepared on the current cost basis as provided by the alternative
         accounting rules, the Licensee shall, unless otherwise agreed by the
         Director, in addition to preparing those accounting statements under
         that paragraph, prepare accounting statements for each Separate
         Business covering the same period, which shall comprise and show
         separately:

        (a)     a profit and loss account, a balance sheet and a cash flow
                statement, together with notes thereto, which shall:

                (i)      include in respect of current  cost  assets  amounts
                         determined  on the current  cost basis as  provided
                         by the  alternative accounting rules; and


                (ii)      show or disclose the information and other matters
                          required by the alternative accounting rules to be
                          shown or disclosed in accounts where the amounts
                          included in respect of assets covered by any items
                          shown in those accounts have been determined on any
                          basis mentioned in paragraph 31 of Section C of Part
                          II of Schedule 4 to the Companies Act 1985;

        (b)       in respect of each Separate Business the adjusted amount of
                  any such provision for depreciation as is referred to in
                  paragraph 32(2) of Section C of Part II of Schedule 4 to the
                  Companies Act 1985 and the items shown in the profit and loss
                  account of the Separate Business for the relevant period which
                  are affected by the determination of amounts on the current
                  cost basis as provided by the alternative accounting rules,
                  including the profit (or loss) before taxation; and

        (c)      such other current cost information as is referred to in the
                 Handbook as the Director may reasonably require


         and shall deliver the same, together with an Auditors' report prepared
         in relation to the current cost basis accounting statements in the form
         referred to in sub-paragraph 3(c), to the Director within the time
         limit referred to in sub-paragraph 3(d), and shall (with the exception
         of the part of such statement which shows separately the amounts

<PAGE>

         charged, apportioned or allocated and describes the bases of charge or
         apportionment or allocation respectively and with the exception of the
         accounting statements relating to the Second Tier Supply Business)
         publish the same with the annual accounts of the Licensee.

8.       References in this Condition to costs or liabilities of, or reasonably
         attributable to, any Separate Business shall be construed as excluding
         taxation, capital liabilities which do not relate principally to a
         particular Separate Business, and interest thereon; and references to
         any profit and loss account shall be construed accordingly.

9.       Without prejudice to paragraph 1 of Condition 1, references in this
         Condition to sections of the Companies Act 1985 are references to those
         provisions as amended, substituted or inserted by the relevant
         provisions of the Companies Act 1989 and if such provisions of the
         Companies Act 1989 are not in force at the date of grant of this
         Licence shall be construed as if such provisions were in force at such
         date.

10.      For the purposes of paragraph 7:


         "alternative accounting rules"             means the rules set out in
                                                    Section C of Part II of
                                                    Schedule 4 to the Companies
                                                    Act 1985.

         "current cost assets"                      means means
                                                    assets of any description
                                                    mentioned in paragraph 31 of
                                                    Section C of Part II of
                                                    Schedule 4 to the Companies
                                                    Act 1985.

         "the Handbook"                             means the handbook issued
                                                    by the Accounting  Standards
                                                    Committee of the
                                                    Consultative Committee of
                                                    Accounting Bodies (CCAB
                                                    Limited) or any successor
                                                    body entitled
                                                    "Accounting for the effects
                                                    of changing prices:  a
                                                    Handbook" in its current
                                                    edition for the time being
                                                    or in the event that no
                                                    such handbook shall be in
                                                    issue such guidance or
                                                    publication as may be
                                                    issued in replacement or
                                                    substitution therefor.


<PAGE>



Condition 72. Restriction on activity and financial ring fencing

1.       Save as provided by paragraphs 3 and 4, the Licensee shall not conduct
         any business or carry on any activity other than the Supply Business,
         the Second Tier Supply Business and the Distribution Business.

2.       The Licensee shall not without the written  consent of the Director
         acquire  shares in any affiliated or related  undertaking
         except:


        (a)      shares in any body  corporate  which was a  subsidiary  of the
                  Licensee  on 17  September  1995 other  than a body  corporate
                  carrying on the Generation Business;


        (b)      shares in a body corporate which conducts business only for a
                 Permitted Purpose; or


        (c)       shares acquired in order to avoid dilution of a shareholding
                  in a body corporate in which the Licensee holds shares in
                  conformity with this Licence.

3.       Nothing in this Condition shall prevent:


        (a)      any affiliate or related undertaking from conducting any
                 business or carrying on any activity;


        (b)       the Licensee from holding shares as, or performing the
                  supervisory or management functions of, an investor in respect
                  of any body corporate in which it holds an interest
                  consistently with the provisions of this Licence;

        (c)      the Licensee from performing the supervisory or management
                 functions of a holding company in respect of any subsidiary; or


        (d)      the Licensee  from  carrying on any business or conducting
                 any activity  to which the  Director  has given his consent in
                 writing.

<PAGE>

4.       Nothing in this Condition shall prevent the Licensee conducting
         ancillary business as defined in this paragraph so long as the
         limitations specified in this paragraph are complied with.

        (a)       For the purpose of this paragraph "ancillary business" means
                  any business or activity carried on by the Licensee other than
                  the Supply Business, the Second Tier Supply Business and the
                  Distribution Business .

        (b)      The Licensee may carry on ancillary business provided that
                 neither of the following limitations is exceeded, namely:


                (i)        the aggregate turnover of all the ancillary business
                           of the Licensee does not in any period of twelve
                           months commencing on 1 April of any year exceed 5% of
                           the aggregate turnover of the Supply Business, the
                           Second Tier Supply Business and the Distribution
                           Business (excluding the turnover on transactions
                           which the Supply Business, the Second Tier Supply
                           Business and the Distribution Business make with each
                           other) as shown by its most recent audited accounting
                           statements produced under sub-paragraphs (b)(i) and
                           (c) of paragraph 3 of Condition 71; and

                (ii)       the aggregate amount (determined in accordance with
                           sub-paragraph (d) below) of all investments by the
                           Licensee in all its ancillary business does not at
                           any time after 17 September 1999 exceed 5% of the sum
                           of share capital in issue, share premium and
                           consolidated reserves of the Licensee as shown by its
                           most recent audited historic cost financial
                           statements then available.

        (c)        For the purpose of sub-paragraph (b) of this paragraph,
                  "investment" means any form of financial support or assistance
                  given by or on behalf of the Licensee for the ancillary
                  business whether on a temporary or permanent basis including
                  (without limiting the generality of the foregoing) any
                  commitment to provide any such support or assistance in the
                  future.


<PAGE>

        (d)       At any relevant time, the amount of an investment shall be the
                  sum of (i) the value at which such investment was included in
                  the audited historic cost balance sheet of the Licensee as at
                  the latest accounting reference date to have occurred prior to
                  17 September 1999 (or, where the investment was not so
                  included, zero), (ii) the aggregate gross amount of all
                  expenditure (whether of a capital or revenue nature) howsoever
                  incurred by the Licensee in respect of such investment in all
                  completed accounting reference periods since such accounting
                  reference date and (iii) all commitments and liabilities
                  (whether actual or contingent) of the Licensee relating to
                  such investment outstanding at the end of the most recently
                  completed accounting reference period.


<PAGE>



Condition 73. Availability of resources

1.       The Licensee shall at all times act in a manner calculated to secure
         that it has available to it sufficient management resources, financial
         resources and financial facilities to enable it:

        (a)      to carry on the Supply Business; and


        (b)      to comply with such of its obligations under the Act and this
                 Licence as apply to the Supply Business.


2.       The Licensee shall submit a certificate addressed to the Director,
         approved by a resolution of the board of directors of the Licensee and
         signed by a director of the Licensee pursuant to that resolution. Such
         certificate shall be submitted in June of each year. Each certificate
         shall be in one of the following forms:

        (a)      "After making enquiries, the directors of the Licensee have a
                  reasonable expectation that the Licensee will have available
                  to it, after taking into account in particular (but without
                  limitation) any dividend or other distribution which might
                  reasonably be expected to be declared or paid, sufficient
                  financial resources and financial facilities to enable the
                  Licensee to carry on the Supply Business for a period of 12
                  months from the date of this certificate."

        (b)      "After making enquiries, the directors of the Licensee have a
                  reasonable expectation, subject to what is said below, that
                  the Licensee will have available to it, after taking into
                  account in particular (but without limitation) any dividend or
                  other distribution which might reasonably be expected to be
                  declared or paid, sufficient financial resources and financial
                  facilities to enable the Licensee to carry on the Supply
                  Business for a period of 12 months from the date of this
                  certificate. However, they would like to draw attention to the
                  following factors which may cast doubt on the ability of the
                  Licensee to carry on the Supply Business...."
<PAGE>

        (c)      "In the opinion of the directors of the Licensee, the Licensee
                  will not have available to it sufficient financial resources
                  and financial facilities to enable the Licensee to carry on
                  the Supply Business for a period of 12 months from the date of
                  this certificate."

3.       The Licensee shall submit to the Director with that certificate a
         statement of the main factors which the directors of the Licensee have
         taken into account in giving that certificate.

4.       The Licensee shall inform the Director in writing immediately if the
         directors of the Licensee become aware of any circumstance which causes
         them to no longer have the reasonable expectation expressed in the then
         most recent certificate given under paragraph 2.

5.       The Licensee shall use its best endeavours to obtain and submit to the
         Director with each certificate provided for in paragraph 2 a report
         prepared by its auditors and addressed to the Director stating whether
         or not the auditors are aware of any inconsistencies between, on the
         one hand, that certificate and the statement submitted with it and, on
         the other hand, any information which they obtained during their audit
         work.

6.       The Licensee shall procure from each company or other person which is
         at any time an ultimate holding company of the Licensee a legally
         enforceable undertaking in favour of the Licensee in the form specified
         by the Director that that ultimate holding company ("the Covenantor")
         will refrain from any action, and will procure that every subsidiary of
         the Covenantor (other than the Licensee and its subsidiaries) will
         refrain from any action, which would then be likely to cause the
         Licensee to breach any of its obligations under the Act or this
         Licence. Such undertaking shall be obtained within 7 days of the
         company or other person in question becoming an ultimate holding
         company and shall remain in force for as long as the Licensee remains
         the holder of this Licence and the Covenantor remains an ultimate
         holding company of the Licensee.
<PAGE>

7.       The Licensee shall:


        (a)       deliver to the Director evidence (including a copy of each
                  such undertaking) that the Licensee has complied with its
                  obligation to procure undertakings pursuant to paragraph 6;
                  and

        (b)       inform the Director immediately in writing if the directors of
                  the Licensee become aware that any such undertaking has ceased
                  to be legally enforceable or that its terms have been
                  breached.

8.       The directors of the Licensee shall not declare or recommend a
         dividend, nor shall the Licensee make any other form of distribution
         within the meaning of Section 263 of the Companies Act 1985, unless
         prior to the declaration, recommendation or making of the distribution
         (as the case may be) the Licensee shall have issued to the Director a
         certificate complying with the following requirements of this
         paragraph.

        (a)      The certificate shall be in the following form:


         "After making enquiries, the directors of the Licensee are satisfied:

                (i)        that the Licensee is in compliance in all material
                           respects with all obligations imposed on it by
                           Condition 2, Condition 72, Condition 73, Condition
                           74, paragraph 5 of Condition 77 and paragraph 2 of
                           Condition 78 of its public electricity supply
                           licence; and

                (ii)       that the making of a distribution of [ ] on [ ] will
                           not, either alone or when taken together with other
                           circumstances reasonably foreseeable at the date of
                           this certificate, cause the Licensee to be in breach
                           to a material extent of any of these obligations in
                           the future."

        (b)       The certificate shall be signed by a director of the Licensee
                  and approved by a resolution of the board of directors of the
                  Licensee passed not more than 14 days before the date on which
                  the declaration, recommendation or payment will be made.

        (c)       Where the certificate has been issued in respect of the
                  declaration or recommendation of a dividend, the Licensee
                  shall be under no obligation to issue a further certificate
                  prior to payment of that dividend.


<PAGE>



Condition 74. Credit rating of Licensee

1.       The Licensee shall use all reasonable endeavours to ensure that:


        (a)       any corporate debt of the Licensee in issue at 17 September
                  1999 which had an investment grade credit rating at that date
                  maintains an investment grade credit rating throughout the
                  period during which such debt remains outstanding, and

        (b)       any corporate debt, other than corporate debt issued by way of
                  negotiated private placement, issued by the Licensee on or
                  after the 17 September 1999 has and maintains an investment
                  grade credit rating throughout the period during which such
                  debt remains outstanding.

2.       For the purpose of paragraph 1:


        (a)      "corporate debt" means any unsecured and unsubordinated
                 borrowing of money having an initial maturity of five years or
                 more, and


        (b)      "investment grade credit rating" means:


                           a rating of not less than BBB- by Standard & Poor's
                           Ratings Group or any of its subsidiaries or not less
                           than Baa3 by Moody's Investors Service, Inc. or any
                           of its subsidiaries or such higher rating as shall be
                           specified by either of them from time to time as the
                           lowest investment grade credit rating, or

                           an equivalent rating from any other reputable credit
                           rating agency which has comparable standing in the UK
                           and the USA.


<PAGE>



Condition 75. Restriction on own generation capacity

1.       The Licensee shall:


        (a)       procure that by 1 October 2000 the Existing Generation
                  Business shall be transferred to, and following such transfer
                  it shall be held by, an affiliate of the Licensee in which the
                  Licensee has no shareholding interest of any kind, whether
                  direct or indirect; and

        (b)       procure that with effect from 30 September 1999 any New
                  Generation Business is held by an affiliate of the Licensee in
                  which the Licensee has no shareholding interest of any kind,
                  whether direct or indirect.

2.       Save with the prior written consent of the Director or in the
         circumstances described in paragraph 3 below, the Licensee shall at all
         times ensure that the sum of the amounts in megawatts (calculated as
         provided under paragraphs 4 and 5 below) represented by the declared
         net capacity of the Licensee's own-generation sets and the appropriate
         share of the declared net capacity of generation sets in which the
         Licensee has an accountable interest shall not exceed 400 megawatts.

3.       Where the Licensee is in breach of paragraph 2 by reason of the
         acquisition of own-generation sets or an accountable interest in other
         generation sets in consequence of the occurrence of a specified event
         affecting the operator or any third party, the Licensee shall forthwith
         notify the Director for the purpose of obtaining such consent as is
         specified in paragraph 2.

4.       For the purposes of  calculating  the limit under  paragraph 2 and
         subject to paragraph  5, there shall be  attributed  to the
         Licensee:
<PAGE>


        (a)      the whole of the declared net capacity represented by
                 own-generation sets; and


        (b)       the appropriate share (namely the share representing the
                  Licensee's economic interest therein) of the declared net
                  capacity of generation sets in which it has an accountable
                  interest, ascertained in such manner as the Licensee with the
                  approval of the Director may determine.

5.       Where the  Director  is  satisfied  that by virtue of the  Licensee's
         economic  interest  (ascertained  in such manner as the
         Director may determine) therein:


        (a)      generation  sets in which the Licensee has only an accountable
                 interest  should more  properly be treated as  own-generation
                 sets; or


        (b)      own-generation sets should more properly be treated as sets in
                 which the Licensee only has an accountable interest; or


        (c)      own-generation  sets, or generation sets in which the Licensee
                 has an accountable  interest,  should not be treated as falling
                 in either category; or


        (d)      generation sets not declared as sets in which the Licensee has
                 an accountable interest, should be treated as generation sets
                 in which the Licensee has an accountable interest


         the Director may issue directions to that effect.


6.       For the purposes of this Condition and subject to paragraphs 5 and 9,
         the Licensee shall have an accountable interest in a generation set in
         circumstances where (such generation set not being an own-generation
         set of the Licensee):

        (a)      the operator is a related undertaking of the Licensee or any
                 affiliate of the Licensee; or
<PAGE>


        (b)       the Licensee or any affiliate of the Licensee 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

        (c)      the Licensee or any affiliate of the Licensee both


                (i)      has (directly or indirectly):


                        (aa)   any beneficial shareholding interest in the
                               operator; or


                        (bb)   any beneficial underlying interest in the
                               generation set; or


                        (cc)   provided or agreed to provide finance to the
                               operator otherwise than on arm's length terms; or


                        (dd)    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
                                generation sets

                           and

                (ii)     is entitled under a contract of not less than 5 years'
                         duration:


                        (aa)     to a share of the declared net capacity of the
                                 generation set; or


                        (bb)      to a share of the declared net capacity of a
                                  generation set being the own-generation set
                                  of another Authorised Electricity Operator
                                  or in which such Authorised Electricity
                                  Operator has an accountable interest, under
                                  arrangements for the exchange of capacity
                                  entitlement or supplies of electricity
                                  representing such entitlement between the
                                  Licensee or its affiliate and such
                                  Authorised Electricity Operator.

<PAGE>


7.       Paragraph 6 shall be applied in relation to the calculation of an
         accountable interest in generation sets of any other Authorised
         Electricity Operator as if the references therein to the Licensee were
         replaced by references to such Authorised Electricity Operator.

8.       References in paragraph 6 to contracts giving entitlements to a share
         of declared net capacity shall include electricity sale or purchase
         contracts where rights under such contract are exercisable by reference
         to an identified generation set or to amounts generated at such set.

9.       The Licensee shall not be deemed to have an accountable interest in a
         generation set where:


        (a)       such generation set is owned and operated by the National Grid
                  Company plc or a wholly-owned subsidiary thereof under a
                  licence granted pursuant to Section 6 of the Act; or

        (b)       the Licensee's interest arises wholly under the terms of the
                  Pooling and Settlement Agreement or (other than as provided in
                  paragraph 8) under any electricity purchase or sale contract;
                  or

        (c)       the Licensee's interest arises solely by virtue of
                  arrangements for the sharing with the operator of any
                  generation set of the risks associated with changes in the
                  price of fuel used by the generation set during the term of
                  any such contract as is referred to in paragraph 6 or 8 above.

10.      The Licensee shall, on each such occasion as it provides to the
         Director separate accounts for the Generation Business pursuant to
         paragraph 3(b)(i) of Condition 71 and at any other time upon request of
         the Director, provide to the Director a statement:

        (a)      confirming  compliance  with  paragraphs 1, 2 and 3 above as
                 at the date of the statement and throughout the period since
                 the last such statement; and

<PAGE>

        (b)       identifying (in such detail and with such supporting documents
                  or information as the Director may require) the amount of
                  capacity in megawatts represented by the declared net capacity
                  of own-generation sets attributable to the Licensee and the
                  appropriate share of the Licensee in the declared net capacity
                  of generation sets in which the Licensee has an accountable
                  interest, as at the date of the statement.

11.      Where the Director is satisfied that the basis of calculation used by
         the Licensee is not in conformity with paragraphs 4 and 5 above, the
         Director may issue directions specifying an alternative basis of
         calculation, and the basis of calculation by the Licensee 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.

12.      In this Condition:


         "operator"                                 means, in relation to any
                                                    generation set, the
                                                    Authorised Electricity
                                                    Operator or any person for
                                                    the time being responsible
                                                    (under contract or
                                                    otherwise) for the
                                                    generation or sale of
                                                    electricity from such plant.

         "own-generation set"                       means  any  generation  set
                                                    the  majority beneficial
                                                    ownership  of which is
                                                    vested  in the  Licensee or
                                                    an affiliate  of the
                                                    Licensee  or in respect of
                                                    which the Licensee  or an
                                                    affiliate  of  the Licensee
                                                    is the operator  and
                                                    references to own-generation
                                                    sets of another Authorised
                                                    Electricity Operator shall
                                                    be construed as if the
                                                    references herein to the
                                                    Licensee were replaced by
                                                    references to that
                                                    Authorised Electricity
                                                    Operator.

         "specified event"                          means any such event
                                                    as is described in paragraph
                                                    (1)(f) of Schedule 2 to this
                                                    Licence but for this purpose
                                                    as if references to the
                                                    Licensee were replaced by
                                                    references to the operator
                                                    or third party in question.
<PAGE>

         "underlying interest"                      in relation to any
                                                    generation set means any
                                                    interest arising by reason
                                                    of the Licensee or affiliate
                                                    or any related undertaking
                                                    of the Licensee or affiliate
                                                    (whether alone or with
                                                    others):

                                                    (a)      holding  or  being
                                                             entitled  to
                                                             acquire  an
                                                             interest  in the
                                                             land on which the
                                                             generation
                                                             set, 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
                                                             generation set, or
                                                             any part thereof,
                                                             is built;

                                                    (c)      owning any
                                                             electrical plant
                                                             situated on or
                                                             operated as a unit
                                                             with the generation
                                                             set (and for such
                                                             purpose, any
                                                             electrical  plant
                                                             or equipment to the
                                                             possession of which
                                                             the Licensee,
                                                             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
                                                             generation set by
                                                             reason only of
                                                             connections
                                                             with any other
                                                             system for the
                                                             transmission or
                                                             distribution of
                                                            electricity; or

<PAGE>

                                                    (d)      having obtained any
                                                             consent under
                                                             Section 36 of the
                                                             Act required for
                                                             the construction or
                                                             extension of the
                                                             generation set or
                                                             any part thereof.


<PAGE>



Condition 76. Restrictions relating to Embedded Generation

1.       The Licensee shall not, and shall procure that any affiliate or related
         undertaking of the Licensee shall not, without the prior written
         consent of the Director.

        (a)      construct or operate any embedded generation plant of the type
                 specified at paragraph 2; or


        (b)      own or acquire any such embedded generation plant or any
                 interest in the assets of any such embedded generation plant.


2.       A generation set is "embedded  generation  plant" for the purposes of
         paragraph 1 if it is a generation set which is connected
         to the Licensee's Distribution System.





<PAGE>



Condition 77. Disposal of relevant assets

1.       The Licensee shall not dispose of or relinquish operational control
         over any relevant asset otherwise than in accordance with the following
         paragraphs of this Condition.

2.       Save as provided in paragraph 3, the Licensee shall give to the
         Director not less than two months' prior written notice of its
         intention to dispose of or relinquish operational control over any
         relevant asset, together with such further information as the Director
         may request relating to such asset or the circumstances of such
         intended disposal or relinquishment of control or to the intentions in
         regard thereto of the person proposing to acquire such asset or
         operational control over such asset.

3.       Notwithstanding paragraphs 1 and 2, the Licensee may dispose of or
         relinquish operational control over any relevant asset:


        (a)      where:


                (i)      the Director has issued  directions for the purposes of
                         this Condition  containing a general consent  (whether
                         or not subject to conditions) to:


                        (aa)     transactions of a specified description; or


                        (bb)     the disposal of or relinquishment of
                                 operational control over relevant assets of a
                                 specified description; and


                (ii)       the transaction or the relevant assets are of a
                           description to which such directions apply and the
                           disposal or relinquishment is in accordance with any
                           conditions to which the consent is subject;

        (b)      where the disposal or relinquishment of operational control in
                 question is required by or under any enactment or subordinate
                 legislation.
<PAGE>


4.       Notwithstanding paragraph 1, the Licensee may dispose of or relinquish
         operational control over any relevant asset as is specified in any
         notice given under paragraph 2 in circumstances where:

        (a)       the Director confirms in writing that he consents to such
                  disposal or relinquishment (which consent may be made subject
                  to the acceptance by the Licensee or any third party in favour
                  of whom the relevant asset is proposed to be disposed or
                  operational control is proposed to be relinquished of such
                  conditions as the Director may specify); or

        (b)        the Director does not inform the Licensee in writing of any
                  objection to such disposal or relinquishment of control within
                  the notice period referred to in paragraph 2.

5.       Without  prejudice to  paragraphs 1 to 4, the Licensee  shall not
         after 17 September  1999 without the written  consent of the
         Director after the disclosure of all material facts;


        (a)       create any mortgage, charge, pledge, lien or other form of
                  security or encumbrance whatsoever, undertake any indebtedness
                  to any other person or enter into any guarantee or any
                  obligation otherwise than:

                (i)      on an arm's length basis;


                (ii)     on normal commercial terms;


                (iii)    for a Permitted Purpose; and


                (iv)     (if the transaction is within the ambit of paragraph
                         1) in accordance with paragraphs 3 and 4;


        (b)       transfer, lease, license or lend any sum or sums, asset, right
                  or benefit to any affiliate or related undertaking of the
                  Licensee otherwise than by way of:
<PAGE>

                (i)      a dividend or other distribution out of distributable
                         reserves;


                (ii)     repayment of capital;


                (iii)    payment properly due for any goods, services or assets
                         provided on an arm's length basis and on normal
                         commercial terms;

                (iv)     a transfer, lease, licence or loan of any asset, right
                         or benefit on an arm's length basis and on normal
                         commercial terms;


                (v)      repayment of or payment of interest on a loan not
                         prohibited by sub-paragraph (a);


                (vi)     payments for group corporation tax relief or for the
                         surrender  of  Advance Corporation Tax calculated on a
                         basis not exceeding the value of the benefit received;


                (vii)    an  acquisition of shares in conformity with paragraph
                         2 of  Condition  72 made on an arm's  length basis and
                         on normal commercial terms.


        (c)      enter into an agreement or incur a commitment incorporating a
                 cross-default obligation; or


        (d)       continue or permit to remain in effect any agreement or
                  commitment incorporating a cross-default obligation subsisting
                  at 17 September 1999 save that the Licensee may permit any
                  cross-default obligation in existence at that date to remain
                  in effect for a period not exceeding twelve months from that
                  date, provided that the cross-default obligation is solely
                  referable to an instrument relating to the provision of a loan
                  or other financial facilities granted prior to that date and
                  the terms on which those facilities have been made available
                  as subsisting on that date are not varied or otherwise made
                  more onerous.


<PAGE>

(e)               the provisions of sub-paragraphs (c) and (d) of this paragraph
                  shall not prevent the Licensee from giving any guarantee
                  permitted by and compliant with the requirements of
                  sub-paragraph (a) of this paragraph.

6.       In this Condition:


         "cross-default obligation"                 means a term of any
                                                    agreement or  arrangement
                                                    whereby the Licensee's
                                                    liability  to pay or repay
                                                    any debt or other sum
                                                    arises or is increased or
                                                    accelerated  or is capable
                                                    of arising,  increasing or
                                                    of acceleration  by
                                                    reason of a default
                                                    (howsoever such default may
                                                    be described or defined) by
                                                    any person other than the
                                                    Licensee, unless:
                                                    (i)     that liability can
                                                            arise only as the
                                                            result of a default
                                                            by a subsidiary of
                                                            the Licensee,
                                                            and

                                                    (ii)    the Licensee holds a
                                                            majority of the
                                                            voting rights in
                                                            that subsidiary and
                                                            has the right to
                                                            appoint or remove a
                                                            majority of its
                                                            board of
                                                            directors, and
                                                    (iii)   that subsidiary
                                                            carries on business
                                                            only for a purpose
                                                            within
                                                            sub-paragraphs (a)
                                                            or (c) of the
                                                            definition of
                                                            Permitted Purpose.

         "disposal"                                 includes any sale, gift,
                                                    lease, licence, loan,
                                                    mortgage, charge or the
                                                    grant of any other
                                                    encumbrance or the
                                                    permitting of any
                                                    encumbrance to subsist or
                                                    any other disposition to a
                                                    third party, and "dispose"
                                                    shall be construed
                                                    accordingly.


<PAGE>

         "indebtedness"                             means all liabilities now or
                                                    hereafter due, owing or
                                                    incurred, whether actual or
                                                    contingent, whether solely
                                                    or jointly with any other
                                                    person and whether as
                                                    principal or surety,
                                                    together with any interest
                                                    accruing thereon and all
                                                    costs, charges, penalties
                                                    and expenses incurred in
                                                    connection therewith.

         "relevant asset"                           means any asset for
                                                    the time being forming part
                                                    of the Licensee's
                                                    Distribution System, any
                                                    control centre for use in
                                                    conjunction therewith and
                                                    any legal or beneficial
                                                    interest in land upon which
                                                    any of the foregoing is
                                                    situate.


<PAGE>



Condition 78. Provision of information to the Director

1.       Subject to paragraphs 6 and 7, the Licensee shall furnish to the
         Director, in such manner and at such times as the Director may require,
         such information and shall procure and furnish to him such reports, as
         the Director may consider necessary in the light of the Conditions or
         as he may require for the purpose of performing:

(a)      the functions assigned to him by or under the Act; and


(b)      any functions transferred to him under the Act.


2.      The Licensee  shall procure from each company or other person which is
        at any time an  ultimate  holding  company  of the  Licensee a legally
        enforceable  undertaking  in  favour  of  the  Licensee  in  the  form
        specified by the Director  that that  ultimate  holding  company ("the
        Covenantor")  will give to the  Licensee,  and will  procure that each
        subsidiary  of  the  Covenantor  (other  than  the  Licensee  and  its
        subsidiaries)  will give to the Licensee,  all such information as may
        be  necessary  to  enable  the  Licensee  to  comply  fully  with  the
        obligation  imposed on it in  paragraph 1. Such  undertaking  shall be
        obtained  within 7 days of the company or the other person in question
        becoming an ultimate  holding company of the Licensee and shall remain
        in  force  for so long as the  Licensee  remains  the  holder  of this
        Licence and the Covenantor  remains an ultimate holding company of the
        Licensee.


3.       The Licensee shall deliver to the Director evidence (including a copy
         of each such undertaking) that the Licensee has complied with the
         obligation to procure undertakings pursuant to paragraph 2.

4.       The Licensee shall not, save with the consent in writing of the
         Director, enter (directly or indirectly) into any agreement or
         arrangement with any ultimate holding company of the Licensee or any of
         the subsidiaries of such ultimate holding company (other than the
         subsidiaries of the Licensee) at a time when:


<PAGE>

               (i)  an undertaking complying with paragraph 2 is not in place in
                    relation to that ultimate holding company: or


               (ii) there is an unremedied breach of such undertaking.


5.       Without prejudice to the generality of paragraph 1, the Director may
         call for the furnishing of accounting information which is more
         extensive than or differs from that required to be prepared and
         supplied to the Director under Condition 71.

6.       The Licensee may not be required by the Director to furnish him under
         this Condition with information for the purpose of the exercise of his
         functions under Section 48 of the Act.

7.       The Licensee may not be required by the Director to furnish him under
         this Condition with any information in relation to an enforcement
         matter which the Licensee could not be compelled to produce or give
         under Section 28(3) of the Act.

8.       The power of the Director to call for information under paragraph 1 is
         in addition to the power of the Director to call for information under
         or pursuant to any other Condition.


9.       The Licensee shall, if so requested by the Director, give reasoned
         comments on the accuracy and text of any information and advice (so far
         as relating to the Supply and Distribution Businesses) which the
         Director proposes to publish pursuant to Section 48 of the Act.

10.      In this Condition "information" shall include any documents, accounts,
         estimates, returns or reports (whether or not prepared specifically at
         the request of the Director) of any description specified by the
         Director.


<PAGE>



Condition 79. Payment of fees

1.       The  Licensee  shall,  at  the  times  stated  hereunder,  pay  to the
         Secretary  of State fees of the  amount  specified  in, or  determined
         under, this Condition.


2.       In respect of the year beginning on 1 April 1991 and in each subsequent
         year, the Licensee shall pay to the Secretary of State a fee which is
         the aggregate of the following amounts:

          (a)  an amount which is a proportion as determined by the Director of
               the amount estimated by the Director, according to a method which
               has  previously  been  disclosed in writing to the  Licensee,  as
               likely to be his total costs during the coming year;

          (b)  the  amount (or,  where the  Relevant  Consumers' Committee  in
               question  is the  consumers' committee for more than one public
               electricity  supplier,  the  amount which  is  a proportion  as
               determined  by the  Director, according  to a method  which  has
               previously  been  disclosed in writing to the Licensee,  of such
               amount) estimated by the Director (having regard to any statement
               under paragraph 8(2) of Schedule 2 to the Act) as being likely to
               be the costs  during the coming year of the  Relevant  Consumers'
               Committee in the exercise of the  functions  assigned to it by or
               under the Act and any other such  functions as it has been or may
               be required to exercise by the Director;

          (c)  an amount which is a proportion as determined by the Director
               of the amount estimated by the Director (in consultation with
               the Competition Commission) as having been incurred in the
               calendar year immediately preceding the 1st April in question
               by the Competition Commission in connection with references
               made to it under section 12 of the Act with respect to this
               Licence or any other licence issued under section 6(1)(c) of
               the Act; and

          (d)  the difference (being a positive or a negative  amount),  if any,
               between:
<PAGE>


               (i)  the amount of the fee paid by the Licensee in respect of the
                    year immediately preceding the 1st April in question; and


               (ii) the amount which that fee would have been in respect of that
                    year had the amounts  comprised  therein been  calculated by
                    reference to:

                    (aa) in the case of  sub-paragraph  2(a),  the actual  total
                         costs  of  the  Director   during  that  year  and  the
                         proportion thereof attributable to the Licensee; and


                    (bb) in the case of  sub-paragraph  2(b),  the actual  total
                         costs of the Relevant Consumers'  Committee during that
                         year and  where  appropriate,  the  proportion  thereof
                         attributable to the Licensee,

                    (such costs being apportioned in each case as
                    determined by the Director according to a method
                    previously disclosed in writing to the Licensee),

         and the fee shall be paid by the Licensee to the Secretary of State
         within one month of the Director giving notice to the Licensee of its
         amount if that notice is given within 6 months of the beginning of the
         year in respect of which the fee is payable.


<PAGE>



Condition 80.  Arrangements for provision of services by the Agent

1.       This Condition shall continue in force until:


          (a)  the arrangements contemplated by the Memorandum of Understanding
               are terminated or cease to have effect; and


          (b)  the Director  directs in writing that, from such date and subject
               to such terms and  conditions as he may specify in his direction,
               this Condition shall no longer be in force.

2.       For the avoidance of doubt, where the Agent has fully complied with any
         obligation placed upon the Licensee under or by virtue of any Relevant
         Provision, its compliance shall be regarded for the purposes of this
         Licence as compliance by the Licensee and nothing in this Licence shall
         require the Licensee to take any further steps to comply with that
         obligation.

3.       The exercise by the Agent of any Relevant Power shall, insofar as the
         Agent can lawfully exercise that power, be deemed to be made with the
         necessary authorisation of the Licensee and shall be treated by the
         Director, for the purposes of this Licence and of the Act, as the
         exercise of such Power by the Licensee.

4.       The service on the Director by the Agent of any application, consent,
         representation, notice, request or other communication given in
         accordance with or by virtue of any of the Relevant Provisions shall be
         treated as the service of such document on the Director by the
         Licensee.

5.       The service by the Director on the Agent of any direction, consent,
         determination, derogation, consultation or other communication given in
         accordance with or by virtue of any of the Relevant Provisions shall be
         treated as the service of such document by the Director on the
         Licensee.


<PAGE>

6.       In this Condition:


         "Agent"                                    means London Energy Company
                                                    Ltd. registered in England
                                                    & Wales under company
                                                    number 2228297.

         "Memorandum of Understanding"              means the
                                                    document dated 30 September
                                                    1999 and setting out the
                                                    basis of arrangements for
                                                    the operation and management
                                                    of the Supply Business by
                                                    the Agent.

         "Relevant Power"                           means a power, right
                                                    or capacity granted to the
                                                    Licensee, for the purpose of
                                                    performing its authorised
                                                    activities, under or by
                                                    virtue of any Relevant
                                                    Provision.

         "Relevant Provision"                       means the
                                                    Conditions of Section B of
                                                    this Licence and such
                                                    provisions of the Act as, in
                                                    the reasonable opinion of
                                                    the Director, apply to the
                                                    Supply Business.


<PAGE>



Schedule 1. Description of authorised area

The authorised area shall comprise that area which is outlined on the attached
map and shall additionally include those premises listed in List A (the
"Additional Premises") but shall not include those premises listed in List B
(the "Excluded Premises").

A:       ADDITIONAL PREMISES

B:       EXCLUDED PREMISES


<PAGE>





Schedule 2. Terms as to revocation

1.   The Secretary of State may at any time revoke this Licence by not less than
     30 days' notice in writing to the Licensee:


     (a)  if the  Licensee  agrees in writing  with the  Secretary of State that
          this Licence should be revoked;


     (b)  if any amount  payable  under  Condition 79 is unpaid 30 days after it
          has  become due and  remains  unpaid for a period of 14 days after the
          Secretary of State has given the  Licensee  notice that the payment is
          overdue.  Provided that no such notice shall be given earlier than the
          sixteenth day after the day on which the amount payable became due;

     (c)  if the Licensee fails to comply with a final order (within the meaning
          of  Section 25 of the Act) or with a  provisional  order  (within  the
          meaning of that section) which has been  confirmed  under that section
          and (in either case) such failure is not rectified to the satisfaction
          of the  Secretary of State within three months after the  Secretary of
          State has given notice of such failure to the Licensee.  Provided that
          no such notice  shall be given by the  Secretary  of State  before the
          expiration of the period within which an application  under Section 27
          of the Act  could be made  questioning  the  validity  of the final or
          provisional  order or  before  the  proceedings  relating  to any such
          application are finally determined;

     (d)  if the Licensee  fails to comply with any order made by the  Secretary
          of State under  Section 56, 73, 74 or 89 of the Fair  Trading Act 1973
          or under Section 10(2)(a) of the Competition Act 1980;


     (e)  if  the  Licensee  ceases  to  carry  on  its  business  as  a  public
          electricity supplier:


     (f)  if the Licensee:

<PAGE>

          (i)  is unable to pay its debts (within the meaning of Section  123(1)
               or (2) of the  Insolvency Act 1986, but subject to paragraph 2 of
               this  Schedule)  or any  voluntary  arrangement  is  proposed in
               relation  to it under  Section 1 of that Act or if it 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 Secretary
               of State);

          (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;

          (iii)has an  administration order under Section 8 of the Insolvency
               Act 1986 made in relation to it;


          (iv) passes any  resolution for winding-up other than a resolution
               previously approved in writing by the Secretary of State; or


          (v)  becomes subject to an order by the High Court for winding-up; or


     (g)  if the  Licensee is convicted  of having  committed  an offence  under
          Section 59 of the Act in making its application for this Licence.


2.       For the purposes of paragraph 1(f)(i) of this Schedule Section
         123(1)(a) of the Insolvency Act 1986 shall have effect as if for
         "(pound)750" there was substituted "(pound)250,000" or such higher
         figure as the Director may from time to time determine by notice in
         writing to the Secretary of State and the Licensee.

3.       The Licensee shall not be deemed to be unable to pay its debts for the
         purposes of paragraph 1(f)(i) of this Schedule if any such demand as is
         mentioned in Section 123(1)(a) of the Insolvency Act 1986 is being
         contested in good faith by the Licensee with recourse to all
         appropriate measures and procedures or if any such demand is satisfied
         before the expiration of such period as may be stated in any notice
         given by the Secretary of State under paragraph 1 of the Schedule.

4.       The provisions of Section 109 of the Act shall apply for the purposes
         of the service of any notice under this Schedule.




<PAGE>



Schedule 3A. Supplementary provisions of the distribution charge restriction
conditions

Part A. Principles for Attribution

General Principles

 A1.     Where for the purposes of the distribution charge restriction
         conditions, a share of costs borne by the Licensee requires to be
         attributed to any part of the market, the Licensee shall make that
         attribution on a basis which ensures that no more than a fair
         proportion of those costs, reflecting the costs incurred by the
         Licensee in supplying that part of the market, are so attributed.

 A2.    The following  paragraphs  of this Part of  Schedule  3A are  without
        prejudice to paragraph A1.


Transmission connection point charges and remote transmission asset rentals
---------------------------------------------------------------------------


 A3.     The transmission connection point charges and remote transmission asset
         rentals requiring to be attributed between the regulated quantity
         distributed and other quantities distributed shall be attributed in
         proportion to the transmission connection point and remote transmission
         asset capacity required for the purpose of distributing those
         quantities.

Distribution losses

 A4.     Where an amount (in units) in respect of distribution losses requires
         to be calculated and attributed in respect of EHV units and units
         distributed by the Licensee for the purpose of supply to premises
         outside the licensee's authorised area, such calculation and
         attribution shall be made consistently with the principles underlying
         the schedule of adjustment factors referred to at sub-paragraph (b) of
         paragraph 3 of Condition 5.
<PAGE>

Information to be provided by Licensee

 A5.     The Licensee shall following the end of each relevant year furnish to
         the Director, as being one of the specified items to be included in the
         statement referred to at paragraph 7 of Condition 3C, a statement that
         the attribution of the transmission connection point charges, the
         remote transmission asset rentals and distribution losses was made in
         accordance with the provisions of this Part of Schedule 3, accompanied
         (where appropriate) by:

         (a)  a  statement  of  the  total  amounts   attributed  to  regulated
               Designated Customers and other customers; and


          (b)  copies of statements  prepared under  paragraph 2 of Condition 3C
               and an explanation of the basis therefor.


 A6.     Where the Director is satisfied that the basis of calculation or
         attribution (as the case may be) used by the Licensee is not in
         conformity with paragraph A1, the Director may issue directions
         specifying an alternative basis of calculation or attribution, and the
         basis of calculation or attribution by the Licensee (as the case may
         be) shall be adjusted accordingly with effect from the date of issue of
         the directions or (subject to paragraph 10 of Condition 3C) such other
         date as may be specified in those directions.



<PAGE>



Part B. EHV premises

B1.      EHV premises shall comprise:


          (a)  in relation to premises connected to the Licensee's  Distribution
               System as at the date  this  licence  enters  into  force,  those
               premises  specified  in the  list  of EHV  premises  notified  in
               writing to the Director by the Licensee within  twenty-eight days
               after this licence enters into force; and

          (b)  in relation to premises connected to the Licensee's  Distribution
               System  which  are  either   first   connected  or  (having  been
               previously  connected)  have  had  their  connections  materially
               altered following the date this licence enters into force,  means
               premises  connected to the  Licensee's  Distribution  System at a
               voltage at or higher than 22 kilovolts or at a sub-station with a
               primary voltage of 66 kilovolts or above.

B2.      The Licensee shall following the end of each relevant year furnish to
         the Director, as being one of the specified items to be included in the
         statement referred to at paragraph 7 of Condition 3C, a statement
         listing any changes in the premises falling to be treated as EHV
         premises.

B3.      Where the Director is satisfied that any premises treated by the
         Licensee as EHV premises should not in conformity with sub-paragraph
         B1(b) above be so treated, the Director may issue directions to that
         effect, and such premises shall cease to be treated as EHV premises
         from the date of issue of the directions or (subject to paragraph 11 of
         Condition 3C) such other date as may be specified in those directions.


<PAGE>



Part C. Excluded services

C1.  There may be treated as excluded services provided by the Licensee in its
     Distribution  Business such services in respect of which charges are made
     which:


     (a)  do not fall within paragraph C2 of this Part; and


     (b)  may (subject to paragraph C8) be determined by the Licensee as falling
          under one of the  principles  set out in  paragraphs  C3 to C6 of this
          Part.

C2.      No service provided by the Licensee as part of its Distribution
         Business shall be treated as an excluded service in so far as it
         consists of the provision of services remunerated under the use of
         system charges in accordance with paragraph 3 of Condition 5 including
         (without prejudice to the foregoing):

          (i)  (subject  to  paragraph  C3  of  this  Part)  the   transport  of
               electricity;


          (ii) the carrying out of works for the  installation of electric lines
               or  electrical  plant  (not  otherwise  payable  in the  form  of
               connection charges);


          (iii)the carrying  out of works or the  provision  of  maintenance  or
               repair or other services for the purpose of enabling the Licensee
               to comply with  Condition  6, 11 and 16, the  Electricity  Supply
               Regulations  1988 or any regulations made under Section 29 of the
               Act or any  other  enactment  relating  to  safety  or  standards
               applicable in respect of the Distribution Business; and
<PAGE>

          (iv) (subject  to  paragraph  C5 of this Part) the  provision,
               installation  and maintenance of any meters, switchgear or other
               electrical plant (not being part of connection charges).

C3.  The Licensee may treat as being an excluded service for the purposes of its
     Distribution Business the transport of:


     (a)  units of electricity not consumed in the licensee's  authorised  area;
          or


     (b)  EHV units.


C4.   Charges of the type described in paragraph 3 of Condition 5 and borne
      in accordance with the principles set out in paragraph 7 of Condition 5
      by any person as connection charges, and charges in respect of the
      statements referred to in paragraph 10 of Condition 5, may each be
      treated as excluded services for the purposes of the Distribution
      Business.

C5.   A service provided by the Licensee as part of its Distribution Business
      may be treated as an excluded service in so far as it consists in the
      provision of services (including metering, electric lines or electrical
      plant) for the specific benefit of any third party requesting the same
      and not made available by the Licensee as a normal part of its
      Distribution Business remunerated by use of system charges including
      (without prejudice to the foregoing):

          (i)  special metering (including "time of day" metering) to facilitate
               energy saving programmes for the benefit of customers  requesting
               the same;


          (ii) charges for moving mains,  services or meters forming part of the
               Licensee's   Distribution   System  to   accommodate   extension,
               re-design or re-development of any premises on which the same are
               located or to which they are connected;
<PAGE>

          (iii)the provision of electric lines and electrical  plant (a) insofar
               as the same are required for the specific purpose of enabling the
               provision of top-up or standby  supplies or sales of  electricity
               or (b) to provide a higher  degree of  security  than is required
               for the purposes of complying with Condition 6;

          (iv) the  amount by which  charges  for the  provision  of  prepayment
               meters to customers  exceed charges for the provision of standard
               meters for such customers; and


          (v)  special  metering or telemetry or data  processing  equipment for
               the  purposes  of  enabling  any  person  which is a party to the
               Pooling and Settlement  Agreement to comply with its  obligations
               in respect of metering thereunder,  or for the performance by the
               Licensee of any service in relation thereto.

C6.      There may be treated as an excluded service for the purposes of the
         Distribution Business, charges for the relocation of electric lines or
         electrical plant and the carrying out of works associated therewith
         pursuant to a statutory obligation (other than under Section 9(1) or
         Section 16 of the Act) imposed on the Licensee.

Information to be provided to the Director

C7.      The Licensee shall following the end of each relevant year furnish to
         the Director, as being one of the specified items to be included in the
         statement referred to at paragraph 7 of Condition 3C, details
         specifying separately the nature of all services provided as part of
         its Distribution Business by the Licensee and treated as excluded
         services by the Licensee during the course of such year and stating the
         revenues derived by the Licensee in respect of each such service so
         treated.
<PAGE>

Directions

C8.      Where the Director is satisfied that in light of the principles set out
         in paragraphs C2 to C7 inclusive any service treated by the Licensee as
         an excluded service should not be so treated, the Director shall issue
         directions to that effect, and the service or services specified in the
         directions shall cease to be treated as excluded services from the date
         of issue of the directions or (subject to paragraph 10 of Condition 3C)
         such other date as may be specified in the directions.


<PAGE>



Part D. Regulated distribution unit categories

 D1.     The Licensee shall following the end of each relevant year furnish to
         the Director, as being one of the specified items to be included in the
         statement referred to at paragraph 7 of Condition 3C, details
         specifying separately those use of system charges in respect of which
         the Licensee has during the course of such year treated the units
         distributed as falling within the definition of each of LV1 units and
         LV2 units and LV3 units respectively.

D2.     The definition  of LV1 units  includes  units  distributed  under the
        following tariffs:


            E7DT/90           Economy Seven Tariff  (day units)
            WMT/LA/90         Domestic Day/Night (Limited Application)-
                              The White Meter Tariff (day units)
            E7BT/90           Economy 7 Block Tariff (day units)
            E7DNT/90          Economy 7 Day and Night Tariff
                              (all non-night units)
            E7FT/90           Economy 7 Farm Tariff (day units)
            FDNT/90           Farm Day/Night (Limited Application)Tariff
                              (day units)


 D3.     The definition of LV2 units includes units distributed under the
         following tariffs:

            E7DT/90           Economy 7 Tariff, (night units)
            WMT/LA/90         Domestic Day/Night-The White Meter Tariff
                              (night units)
            OP7T/LA/90        The Off Peak (7hr) (Limited Application) Tariff
            OPT/N/LA/90       Off-peak night only (Limited Application) Tariff
            OPT/LA/90         Off-peak (Limited Application) Tariff
            E7BT/90           Economy 7 Block tariff (night units)
            E7DNT/90          Economy 7 Day and Night tariff (night units)
            E7DNT/90          Economy 7 Farm Tariff night units)
            FDNT/90           Farm Day/Night (Limited Application) Tariff
                              (night units)
            Tariff Codes      201-214 Assorted Non-standard off-peak tariffs,
<PAGE>


 D4.     The definition of LV3 units includes units distributed under the
         following tariffs:


            DT/90             Domestic Tariff
            BT/90             Block Tariff

            FRT/LA/90         Flat Rate (limited application) tariff.
            FT/90             Farm Tariff
            AFT/LA/90         Alternative Farm (limited application) tariff.
            NT/90             Day and Night (limited application) tariff
            MSTA/90           Supply Tariff A (Scales B and C)
            MNT/LA/90         Demand Day/Night (limited application) tariff
                              (scales B and C)
            Public lighting terms
            LV STOD Terms

            All other LV tariffs and variants of tariffs not included in LV (1)
            or LV (2)


 D5.     Notwithstanding the provisions of paragraphs D2 to D4 above, where the
         Director is satisfied that a tariff or tariffs in respect of which the
         Licensee has treated the units distributed as falling within one of the
         categories in paragraphs D2 to D4 above should not be so treated, the
         Director shall issue directions to that effect and the tariff or
         tariffs specified in the directions shall cease to be so treated from
         the date of issue of the directions or (subject to paragraph 10 of
         Condition 3C) such other date as may be specified in the directions and
         shall with effect from such date be treated in such manner as may be
         specified in the directions.


<PAGE>



Part E. Calculation of factor in respect of distribution losses

E1.      For the purposes of calculation of the terms ALt and Lt as used in
         paragraph 3 of Condition 3A shall each be determined for relevant years
         commencing on or after the1st April 1995 using the consistent
         methodological basis set out in paragraphs E2 to E5 below.

Consistent methodological basis for determination of ALt and Lt


E2.      Adjusted distribution  losses shall  be determined as being the
         difference  between  adjusted grid supply point purchases and adjusted
         units distributed.


E3.      Units  metered on entry to the Licensee's Distribution System shall be
         adjusted  to obtain  adjusted  grid  supply  point purchases by:


          (a)  excluding that number of units which is equal to the sum of:


               (i)  EHV units; and


               (ii) units  distributed by the Licensee for the purpose of supply
                    to premises outside the licensee's authorised area; and


               (iii)an amount in  respect of  distribution  losses  between  the
                    grid  supply  point and the exit point  attributable  to the
                    units  referred to in (i) and (ii) above,  as  determined in
                    accordance with paragraph A4 in Part A of Schedule 3A; and

          (b)  including an amount (in units) to  represent  the effect of units
               entering the  Licensee's  Distribution  System  otherwise than at
               grid supply points,  being the  difference  between the number of
               units so  entering  and the  number of units that would have been
               required to have entered at grid supply  points in their  absence
               (such latter number of units being calculated  consistently  with
               the principles  underlying the schedule of adjustment  factors in
               respect of distribution  losses referred to at sub-paragraph  (b)
               of paragraph 3 of Condition 5).
<PAGE>

E4.  For so long as units are  metered on entry to the  Licensee's  Distribution
     System at bulk supply points instead of at grid supply  points,  such units
     shall be calculated by:


     (a)  applying the procedures in paragraph E3 as if all references to units
          metered at grid  supply points were to units metered at bulk supply
          points; and


     (b)  grossing-up units metered at the bulk supply points by the relevant
          grid supply point conversion factor being either:

          (i)  0.5 per cent of the units metered at the bulk supply points; or


          (ii) such other factor to take account of losses occurring between the
               grid supply points and the bulk supply points as the Licensee may
               with the prior approval of the Director determine to be
               appropriate.

E5.      Adjusted units distributed shall be obtained by:


          (a)  calculating all units distributed by the Licensee metered at exit
               points on leaving the Licensee's Distribution System;


          (b)  deducting  therefrom  EHV  units and  units  distributed  for the
               purpose of supply to premises  outside the licensee's  authorised
               area; and

<PAGE>

          (c)  adding  thereto  an  amount  equal to the units  consumed  on the
               licensee's  premises  in  the  authorised  area  (insofar  as not
               otherwise  taken into account in  determining  units  distributed
               under sub-paragraph (a) above).

Initial relevant loss percentage in the term Alt

E6.      In the first relevant year, the initial relevant loss percentage in the
         term ALt shall (consistently with the methodology set out in paragraphs
         E2 to E5 above) be determined as being:

                  adjusted GSP purchase units less adjusted units distributed
                                    adjusted units distributed

         where adjusted GSP purchase units are calculated as provided in
         paragraph E7 and adjusted units distributed are calculated as provided
         in paragraph E8.

E7.  Adjusted GSP purchase  units shall be  calculated  in  accordance with the
     procedures successively described in the following sub-paragraphs:


     (a)  the actual  losses in each of  relevant  years  t-1,  t-2 and t-3 (the
          "historic  losses")  shall be calculated as the  difference in each of
          those years between units  purchased at entry points to the Licensee's
          Distribution System and units sold;

     (b)  the historic loss  percentage  shall be  calculated as the  proportion
          (expressed as a percentage)  which the aggregate  historic losses were
          of the  aggregate  units  purchased at entry points to the  Licensee's
          Distribution System, in each case over the three relevant years t-1 to
          t-3;
<PAGE>

     (c)  the total  number of units sold in relevant  year t-1 shall be grossed
          up by the historic loss percentage ("BSP purchase units"); and


     (d)  the figure for BSP purchase  units  resulting from  sub-paragraph  (c)
          shall be adjusted to obtain  adjusted GSP purchase units in accordance
          with the provisions of paragraphs E3 and E4 above.

E8.  Adjusted units  distributed shall be calculated by applying the methodology
     of paragraph E5 in respect of those units referred to in sub-paragraphs (a)
     to (c) of paragraph E5 in relevant year t-1.


Information to be provided to the Director

E9.      The Licensee shall within three months after the entry into force of
         this licence furnish to the Director a statement showing the initial
         relevant loss percentage and the underlying calculations.

E10.     The Licensee shall, following the end of each relevant year, furnish to
         the Director, as being one of the specified items to be included in the
         statement referred to at paragraph 7 of Condition 3C, a statement
         showing adjusted distribution losses for that relevant year,
         accompanied by the underlying calculations and (where appropriate) an
         explanation of any changes in the basis of calculation or estimation
         thereof.

E11.     Where the Director is satisfied that any statement or underlying
         calculation provided has not been drawn up in conformity with
         paragraphs E2 to E8 above, the Director may issue directions, and the
         statement or underlying calculation shall be adjusted with effect from
         the date of issue of the directions or (subject to paragraph 10 of
         Condition 3C) such other date as may be specified in the directions.


<PAGE>



Schedule 3B. Supplementary provisions of the supply charge restriction
conditions

Part A. Principles for Attribution

General Principles

 A1.     Where for the purposes of the supply charge restriction conditions, a
         share of costs borne by the Licensee requires to be attributed to any
         part of the market, the Licensee shall make that attribution on a basis
         which ensures that no more than a fair proportion of those costs,
         reflecting the costs incurred by the Licensee in supplying that part of
         the market, are so attributed.

 A2.     The following paragraphs of this Part of Schedule 3B are without
         prejudice to paragraph A1.


Fossil Fuel Levy and payments in lieu thereof

 A3.     The fossil fuel levy requiring to be attributed to supplies to
         Designated Customers shall be attributed on the basis of the amount of
         the levy incorporated in the prices actually charged or to be charged
         by the Licensee on supplies to such customers in the relevant year in
         respect of which the attribution falls to be made. Amounts in lieu of
         the fossil fuel levy in respect of purchases of electricity other than
         leviable electricity requiring to be calculated and then attributed to
         supplies to Designated Customers in any relevant year for the purposes
         of Condition 29A shall:

          (a)  be  calculated  as being such amounts as correspond to the lesser
               of:


               (i)  the premium actually payable (measured on an accruals basis)
                    by the  Licensee  during the  relevant  year on purchases of
                    electricity other than leviable  electricity as representing
                    the  benefit  to the  Licensee  of being  able to treat such
                    electricity as being other than leviable electricity for the
                    purposes   of  Section   33  of  the  Act  and   Regulations
                    thereunder; and

<PAGE>


               (ii) the additional amount that would have been payable (measured
                    on an  accruals  basis) by the  Licensee  in  respect of the
                    fossil fuel levy pursuant to Regulations  made under Section
                    33  of  the  Act  had   such   electricity   been   leviable
                    electricity; and

          (b)  be attributed to supplies to Designated Customers pro rata to the
               amount which the quantity supplied to Designated  Customers bears
               to the total quantity supplied (in each case in the relevant year
               in respect of which the  attribution  falls to be made) or on the
               basis of the amount referred to in paragraph (a)  incorporated in
               the prices  actually  charged or to be charged by the Licensee on
               supplies to such  customers  in the  relevant  year in respect of
               which the attribution  falls to be made or on such other basis of
               attribution as the Licensee shall previously have agreed with the
               Director.

Information to be provided by Licensee

 A4.     The Licensee shall following the end of each relevant year furnish to
         the Director, as being one of the specified items to be included in the
         statement referred to at paragraph 3 of Condition 29C, a statement of
         the actual attribution of electricity purchase costs between regulated
         and other customers and reconciling the attribution with any statements
         made in respect of the relevant year under paragraph 1 of Condition
         29C, and a statement confirming that the calculation of amounts in lieu
         of the fossil fuel levy and the attribution of the fossil fuel levy and
         amounts in lieu thereof was made in accordance with the provisions of
         this Part of Schedule 3B, accompanied (where appropriate) by:
<PAGE>

          (a)  a  statement  of  the  total  amounts   attributed  to  regulated
               Designated Customers and other customers; and


          (b)  copies of statements  prepared under paragraph 1 of Condition 29C
               and an explanation of the basis therefor.


 A5.     Where the Director is satisfied that the basis of calculation or
         attribution (as the case may be) used by the Licensee is not in
         conformity with paragraph A1, the Director may issue directions
         specifying an alternative basis of calculation or attribution, and the
         basis of calculation or attribution by the Licensee (as the case may
         be) shall be adjusted accordingly with effect from the date of issue of
         the directions or (subject to paragraph 6 of Condition 29C) such other
         date as may be specified in those directions.


<PAGE>



Part B. Excluded services

B1.      Subject to paragraph B3, a service provided by the Licensee as part of
         its Supply Business may be treated as an excluded service in so far as
         it consists of the provision of services for the specific benefit of
         customers requesting the same and not made available by the Licensee as
         a normal part of such Business. For the avoidance of doubt, the
         provision of facilities for prepayment may not be treated as an
         excluded service except the provision of prepayment meters as an
         excluded service by the Distribution Business.

Information to be provided to the Director

B2.      The Licensee shall following the end of each relevant year furnish to
         the Director, as being one of the specified items to be included in the
         statement referred to at paragraph 3 of Condition 29C, details
         specifying separately the nature of all services provided as part of
         its or Supply Business by the Licensee and treated as excluded services
         by the Licensee during the course of such year and stating the revenues
         derived by the Licensee in respect of each such service so treated.

Directions

B3.      Where the Director is satisfied that in light of the principles set out
         in paragraph B1 any service treated by the Licensee as an excluded
         service should not be so treated, the Director shall issue directions
         to that effect, and the service or services specified in the directions
         shall cease to be treated as excluded services from the date of issue
         of the directions or (subject to paragraph 6 of Condition 29C) such
         other date as may be specified in the directions.