<PAGE>
  
  
  
  
  
  
  
                                                Exhibit 10(m)
  
  
  
  
  
  
  
                NEW ENGLAND ELECTRIC COMPANIES'
  
                   DEFERRED COMPENSATION PLAN
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
               Executed June 15-18, 1979
               Amended October 12, 1982
               Amended July 31, 1984
               Amended May 13, 1985
               Amended December 8, 1986
               Amended November 24, 1992
               Amended January 1, 1995
               Amended October 24, 1995
               Amended October 15, 1996
               Amended November 26, 1996
  
    <PAGE>
                       TABLE OF CONTENTS
                       -----------------
  
                                                           Page
                                                           ----
  
  I.      PURPOSE; EXISTING BENEFITS . . . . . . . . . . . . .1
  
  II.     DEFINITIONS. . . . . . . . . . . . . . . . . . . . .1
   2.01   Actuarial Value. . . . . . . . . . . . . . . . . . .1
   2.02   Beneficial Owner . . . . . . . . . . . . . . . . . .2
   2.03   Beneficiary. . . . . . . . . . . . . . . . . . . . .2
   2.04   Benefits Committee . . . . . . . . . . . . . . . . .2
   2.05   Board. . . . . . . . . . . . . . . . . . . . . . . .2
   2.06   Cash Account . . . . . . . . . . . . . . . . . . . .2
   2.07   Cash Account Balance . . . . . . . . . . . . . . . .3
   2.08   Change in Control. . . . . . . . . . . . . . . . . .3
   2.09   Chief Executive Officer. . . . . . . . . . . . . . .4
   2.10   Compensation . . . . . . . . . . . . . . . . . . . .4
   2.11   Compensation Committee . . . . . . . . . . . . . . .5
   2.12   Deferral Agreement . . . . . . . . . . . . . . . . .5
   2.13   Deferred Compensation. . . . . . . . . . . . . . . .5
   2.14   Deferred Compensation Account. . . . . . . . . . . .5
   2.15   Deferral Match . . . . . . . . . . . . . . . . . . .5
   2.16   Deferral Unit. . . . . . . . . . . . . . . . . . . .5
   2.17   Disability . . . . . . . . . . . . . . . . . . . . .5
   2.18   Dividend . . . . . . . . . . . . . . . . . . . . . .6
   2.19   Dividend Reinvestment Plan . . . . . . . . . . . . .6
   2.20   Election Period. . . . . . . . . . . . . . . . . . .6
   2.21   Employer . . . . . . . . . . . . . . . . . . . . . .6
   2.22   Incentive Plans. . . . . . . . . . . . . . . . . . .7
   2.23   Incentive Shares . . . . . . . . . . . . . . . . . .7
   2.24   Incentive Thrift Plan. . . . . . . . . . . . . . . .7
   2.25   Interest . . . . . . . . . . . . . . . . . . . . . .7
   2.26   A Major Transaction. . . . . . . . . . . . . . . . .7
   2.27   New England Electric System. . . . . . . . . . . . .9
   2.28   Other Plans. . . . . . . . . . . . . . . . . . . . .9
   2.29   Participant. . . . . . . . . . . . . . . . . . . . 10
   2.30   Performance Shares . . . . . . . . . . . . . . . . 10
   2.31   Performance Share Plan . . . . . . . . . . . . . . 10
   2.32   Person . . . . . . . . . . . . . . . . . . . . . . 10
   2.33   Plan Year. . . . . . . . . . . . . . . . . . . . . 11
   2.34   Qualified Plan . . . . . . . . . . . . . . . . . . 11
   2.35   Related Plan Year. . . . . . . . . . . . . . . . . 11
   2.36   Shares . . . . . . . . . . . . . . . . . . . . . . 11
   2.37   Share Account. . . . . . . . . . . . . . . . . . . 11
   2.38   Share Account Balance. . . . . . . . . . . . . . . 11
   2.39   Share Price. . . . . . . . . . . . . . . . . . . . 12
   2.40   Subsidiary . . . . . . . . . . . . . . . . . . . . 13
   2.41   Termination of Service . . . . . . . . . . . . . . 13
   2.42   Vested . . . . . . . . . . . . . . . . . . . . . . 13
    <PAGE>
   
  
  III.    ADMINISTRATION . . . . . . . . . . . . . . . . . . 14
   3.01   Benefits Committee . . . . . . . . . . . . . . . . 14
   3.02   Liability for Acts . . . . . . . . . . . . . . . . 14
   3.03   Minors, Etc. . . . . . . . . . . . . . . . . . . . 14
   3.04   Proof. . . . . . . . . . . . . . . . . . . . . . . 15
   3.05   Denied Claims. . . . . . . . . . . . . . . . . . . 15
   3.06   Participant List . . . . . . . . . . . . . . . . . 17
  
  IV.  OPERATION OF THE PLAN . . . . . . . . . . . . . . . . 17
   4.01   Deferral Election. . . . . . . . . . . . . . . . . 17
            (A) Form of Election . . . . . . . . . . . . . . 17
            (B) Time of Election . . . . . . . . . . . . . . 18
     4.02   Deferral Match . . . . . . . . . . . . . . . . . 19
     4.03   Deferred Compensation Accounts . . . . . . . . . 20
            (A) Cash Account . . . . . . . . . . . . . . . . 20
            (B) Share Account. . . . . . . . . . . . . . . . 21
     4.04   Payment of Balances. . . . . . . . . . . . . . . 22
            (A) Election of Time of Payment. . . . . . . . . 22
            (B) Payments After Ten Years . . . . . . . . . . 22
            (C) Payments at Retirement . . . . . . . . . . . 22
            (D) Payments Upon Termination of Service.. . . . 23
            (E) Hardship Payments. . . . . . . . . . . . . . 23
            (F) Dissolution of Employer; A Major
                Transaction; Change in Control . . . . . . . 24
            (G) Death or Disability. . . . . . . . . . . . . 25
            (H) Form of Payments . . . . . . . . . . . . . . 25
            (I) Distributed Shares.. . . . . . . . . . . . . 26
            (J) Taxes. . . . . . . . . . . . . . . . . . . . 28
     4.05   No Segregation of Assets . . . . . . . . . . . . 28
     4.06   Failure of Payments. . . . . . . . . . . . . . . 29
  
  V. AMENDMENT OR TERMINATION. . . . . . . . . . . . . . . . 30
     5.01   Right to Amend or Terminate. . . . . . . . . . . 30
  
    <PAGE>
  VI.       GENERAL PROVISIONS . . . . . . . . . . . . . . . 31
     6.01   Nonalienation of Benefits. . . . . . . . . . . . 31
     6.02   No Implied Rights. . . . . . . . . . . . . . . . 31
     6.03   Effectuation of Interest . . . . . . . . . . . . 31
     6.05   Headings . . . . . . . . . . . . . . . . . . . . 32
     6.06   Gender and Number. . . . . . . . . . . . . . . . 32
     6.07   Separability . . . . . . . . . . . . . . . . . . 32
     6.08   Applicability. . . . . . . . . . . . . . . . . . 33
     6.09   Governing Law. . . . . . . . . . . . . . . . . . 33
     6.10   Effective Date . . . . . . . . . . . . . . . . . 33
  
  SIGNATURE. . . . . . . . . . . . . . . . . . . . . . . . . 33
  
  APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . 34
  
    <PAGE>
                NEW ENGLAND ELECTRIC COMPANIES'
  
                   DEFERRED COMPENSATION PLAN
                  --------------------------
  
  
  I.      PURPOSE; EXISTING BENEFITS
   --------------------------
  
   The purpose of the Deferral Plan (the Plan) is to enable
  executives to better plan the timing of their receipt of income
  by deferring cash compensation and bonus shares, in accordance
  with federal tax statutes.  The Plan was first executed in June
  of 1979, and has been amended on several occasions since.
   The Plan is being further amended effective as of
  October 24, 1995, in order to reflect changes in executive
  benefit plans and to permit additional participations. 
  Deferrals made under previous versions of the Plan are to
  receive benefits and are controlled by the terms of such
  versions, except that subsection 4.04(F) will be controlling in
  the event of a Change in Control or Major Transaction.  Any
  deferral elections in effect shall continue through December
  31, 1995.
  
  II.     DEFINITIONS
   -----------
   2.01   Actuarial Value will be established using the most
  recent assumptions established by the Benefits Committee for
  the Qualified Plan.
  
   2.02   Beneficial Owner shall have the meaning defined in
  Rule 13d-3 under the Securities Exchange Act of 1934.
    <PAGE>
   2.03   Beneficiary means any person designated in writing
  by a Participant (which designation may be changed from time to
  time) to receive benefits under the Plan payable upon death of
  the Participant.  Unless otherwise designated, the Beneficiary
  will be the beneficiary under the Participant's Group Life
  Insurance enrollment and insurance provided, in whole or in
  part, by the Employer.  If there is no designated Beneficiary
  alive when the Participant dies, the benefit shall be paid to
  the estate of the Participant. 
  
   2.04   Benefits Committee means the Benefits Committee
  established in accordance with the Qualified Plan.
  
   2.05   Board means the Board of Directors of the New
  England Electric System.
  
   2.06   Cash Account means the account established for
  Participants in accordance with subsection 4.03(A). 
  
   2.07   Cash Account Balance means the amount deferred by
  the Participant in his or her Cash Account and Interest
  thereon, all as provided in subsection 4.03(A), less any
  payments or reductions made in accordance with Sections 4.04
  and 4.06.
    <PAGE>
   2.08   Change in Control occurs when the conditions set
  forth in either of the following paragraphs shall have been
  satisfied:
  
   (a)    any Person is or becomes the Beneficial Owner,
            directly or indirectly, of securities of New
            England Electric System (not including in the
            securities beneficially owned by such Person any
            securities acquired directly from New England
            Electric System or its affiliates) representing 20%
            or more of the combined voting power of New England
            Electric System's then outstanding securities; or
   (b)    during any period of not more than two consecutive
            years after January 1, 1995, individuals who at the
            beginning of such period constitute the Board and
            any new director (other than a director designated
            by a Person who has entered into an agreement with
            New England Electric System to effect a transaction
            described in clause (a) of this Section) whose
            election by the Board or nomination for election by
            New England Electric System's shareholders was
            approved or recommended by a vote of at least two-
          thirds of the directors then still in office who
            either were directors at the beginning of the
            period or whose election or nomination for election
    <PAGE>
          was previously so approved or recommended, cease
            for any reason to constitute a majority of the
            Board.
  
   2.09   Chief Executive Officer means the Chief Executive
  Officer of the New England Electric System.
  
   2.10   Compensation means
   (a)    the monthly base pay (including any amount deferred
            hereunder) of a Participant,
   (b)    any Incentive Compensation,
   (c)    any Incentive and Performance Shares, and
   (d)    any other bonuses specifically designated by the
            Employer at the time of the award as being deferred
            under the terms of this Plan.
  
   2.11   Compensation Committee means the Compensation
  Committee of the Board.
   
   2.12   Deferral Agreement means the share deferral
  agreement, if any, made by the Participant and the Company in
  December 1994.
  
   2.13   Deferred Compensation means the Compensation of a
  Participant deferred in accordance with the terms of this Plan.
    <PAGE>
   2.14   Deferred Compensation Account means the special
  memorandum account(s) established for a Participant on the
  books of his Employer pursuant to Section 4.03.
  
   2.15   Deferral Match means the amount contributed by the
  Employer pursuant to Section 4.02.
  
   2.16   Deferral Unit means an insurance related investment
  unit established under prior provisions of the Plan.
  
   2.17   Disability means a physical or mental condition of
  the Participant which, based on satisfactory medical evidence,
  is believed to be permanent and to render the Participant unfit
  to perform duties for an Employer.
  
   2.18   Dividend has the meaning set out in subsection
  4.03(B).
  
   2.19   Dividend Reinvestment Plan means the New England
  Electric System Dividend Reinvestment and Common Share Purchase
  Plan, as amended from time to time.
  
   2.20   Election Period is the 365-day period following:
   (a)    the mailing of the notice to the Participant of his
            or her eligibility to make an election due to a
            Change of Control or a Major Transaction, or
    <PAGE>
   (b)    Termination of Service, as applicable.
  
   2.21   Employer is the company within the New England
  Electric System holding company system which pays the base pay
  or fees of the Participant.
  
   2.22   Incentive Plans means:
   (a)    New England Electric Companies' Senior Incentive
            Compensation Plan,
  
   (b)    New England Electric Companies' Incentive
            Compensation Plan I,
  
   (c)    New England Electric Companies' Incentive
            Compensation Plan II, and
  
   (d)    New England Electric Companies' Incentive
            Compensation Plan III,
  
   as they may be amended from time to time.
  
  
  
   2.23   Incentive Shares mean annual incentive share awards
  under the New England Electric Companies' Incentive Share Plan,
  as it may be amended from time to time.
  
   2.24   Incentive Thrift Plan means The New England
  Electric System Companies Incentive Thrift Plan as amended from
  time to time.
  
   2.25   Interest means the factor described in Subsection
  4.03(A).
    <PAGE>
   2.26   A Major Transaction shall be deemed to have
  occurred if the conditions set forth in any one of the
  following paragraphs shall have been satisfied:
   (a)    the shareholders of New England Electric System
            approve a merger or consolidation with any
            corporation or business trust, other than (i) a
            merger or consolidation which would result in the
            individuals who prior to such merger or
            consolidation constitute the Board constituting at
            least two-thirds of the board of directors of New
            England Electric System or the surviving or
            succeeding entity immediately after such merger or
            consolidation, or (ii) a merger or consolidation
            effected to implement a recapitalization (or
            similar transaction) in which no Person acquires
            more than 20% of the combined voting power of New
            England Electric System's then outstanding
            securities;
   (b)    the shareholders of New England Electric System
            approve a plan of complete liquidation thereof; or
   (c)    the shareholders of New England Electric System
            approve an agreement for the sale or disposition of
            all or substantially all of New England Electric
            System's assets, other than a sale or disposition
            which would result in the individuals who prior to
            such sale or disposition constitute the Board
    <PAGE>
          constituting at least two-thirds of the board of
            directors of the Person purchasing such assets
            immediately after such sale or disposition.
  
   2.27   New England Electric System means the trustee or
  trustees for the time being (as trustee or trustees but not
  personally) under an agreement and declaration of trust dated
  January 2, 1926, as amended, which is hereby referred to, and a
  copy of which as amended has been filed with the Secretary of
  The Commonwealth of Massachusetts.  Any agreement, obligation,
  or liability made, entered into or incurred by or on behalf of
  New England Electric System binds only its trust estate, and no
  shareholder, director, trustee, officer, or agent thereof
  assumes or shall be held to any liability therefor.
  
   2.28   Other Plans means the New England Electric
  Companies' Executive Supplemental Retirement Plan, the New
  England Electric System Companies Retirement Supplement Plan,
  the New England Electric System Directors Deferred Compensation
  Plan, New England Electric Companies' Senior Incentive
  Compensation Plan, New England Electric Companies' Incentive
  Compensation Plan I, New England Electric Companies' Incentive
  Compensation Plan II, New England Electric Companies' Incentive
  Compensation Plan III, or New England Electric Companies Long-
  term Performance Share Award Plan.
    <PAGE>
   2.29   Participant means a Participant in one of the
  Incentive Plans.
  
   2.30   Performance Shares means the potential share grants
  awarded under the Performance Share Plan.
  
   2.31   Performance Share Plan means the New England
  Electric Companies Long-term Performance Share Award Plan.
  
   2.32   Person shall have the meaning given in Section
  3(a)(9) of the Exchange Act, as modified and used in Sections
  13(d) and 14(d) thereof; however, a Person shall not include
  (i) New England Electric System or any subsidiary thereof, (ii)
  a trustee or other fiduciary holding securities under an
  employee benefit plan of New England Electric System or any
  subsidiary thereof, (iii) an underwriter temporarily holding
  securities pursuant to an offering of such securities, or (iv)
  a corporation owned, directly or indirectly, by the
  shareholders of New England Electric System in substantially
  the same proportions as their ownership of shares of New
  England Electric System.
  
   2.33   Plan Year means a calendar year.
  
   2.34   Qualified Plan means the New England Electric
  System Companies' Final Average Pay Pension Plan I.
    <PAGE>
   2.35   Related Plan Year means, for deferrals under
  subsection 4.01(A)(i), the Plan Year in which the Compensation
  was earned; for deferrals under subsection 4.01(A)(ii) or
  (iii), the Plan Year for which performance is awarded by the
  Incentive Compensation or Incentive Shares; and for deferrals
  under subsection 4.01(A)(iv), the last year of the Performance
  Cycle.
  
   2.36   Shares means common shares of New England Electric
  System.  After a merger, consolidation, or other similar
  restructuring of New England Electric System, Shares shall mean
  the common shares of the new entity.
  
   2.37   Share Account means the account established for
  Participants in accordance with subsection 4.03(B).
  
   2.38   Share Account Balance means the amount deferred by
  the Participant in his or her Share Account and Dividends
  thereon, all as provided in subsection 4.03(B), less any
  payments or reductions made in accordance with Sections 4.04
  and 4.06.
  
   2.39   Share Price for purchases shall be determined using
  as a proxy the price of Shares being acquired by the New
  England Electric System Dividend Reinvestment Plan during the 
  time period when the Shares for this Plan would be acquired
    <PAGE>
were this Plan a participant in that plan.  The Share Price for
  Shares being liquidated shall be determined by using the price
  actually received by the Rabbi Trust on a sale of Shares
  related hereto or by using as a proxy the price received for
  those Shares sold by the Dividend Reinvestment Plan next
  following the date of determination.
  
   For a Change in Control or Major Transaction, the cash
  value of Shares will be established using the highest average
  of the high and low prices on the New York Stock Exchange
  Composite Transaction as reported in the Wall Street Journal
  for any five consecutive trading days in the 60 days preceding
  the Change in Control or Major Transaction.  If there is no
  trading in the Shares on the New York Stock Exchange for a
  substantial amount of time during the five-day period, or if
  publication by The Wall Street Journal of reports of Share
  transactions for any day in the five-day period does not take
  place or is subject to reporting error, the value of Shares
  shall be determined by the Benefits Committee on the basis of
  such market quotations or other method as the Benefits
  Committee shall deem appropriate.
  
    2.40  Subsidiary means a company five per centum or more
  of whose outstanding voting securities or partnership or
  membership interests are owned, controlled, or held with power
  to vote, directly or indirectly, by New England Electric System
  or any subsidiary thereof.
    <PAGE>
   2.41   Termination of Service shall occur when the
  Participant is neither (i) employed by a Subsidiary nor (ii) a
  member of the board of directors of New England Electric System
  or any Subsidiary.
  
   2.42   Vested - a Participant will be Vested under the
  Qualified Plan when they satisfy the requirements for 100%
  vesting in their accrued benefits under that plan.
  
  III.    ADMINISTRATION
   --------------
   3.01   Benefits Committee.  This Plan shall be
  administered by the Benefits Committee, and interpretations of
  the Plan by the Benefits Committee shall be final and binding
  on all parties.
  
   3.02   Liability for Acts.  Neither the Compensation
  Committee, the Benefits Committee, nor the Employers, nor the
  members, officers, directors, agents, or employees of any of
  the foregoing shall be liable for any error of omission or
  commission unless such error results from its, his, or her own
  gross negligence, willful misconduct, or lack of good faith;
  nor shall any such party be liable for any act of gross
  negligence, willful misconduct, or lack of good faith of any
  other such party.
    <PAGE>
   3.03   Minors, Etc.  If a minor, person declared
  incompetent, or person incapable of handling the disposition of
  his or her property is entitled to receive a benefit, make an
  application, or make an election hereunder, the Benefits
  Committee may direct that such benefits be paid to, or such
  application or election be made by, the guardian, legal
  representative, or person having the care and custody of such
  minor, incompetent, or incapable person.  Any payment made,
  application allowed, or election implemented in accordance with
  this Section shall completely discharge the Plan, the
  Compensation Committee, the Benefits Committee, the Employers,
  and New England Electric System from all liability with respect
  thereto.
  
   3.04   Proof.  The Benefits Committee may require proof of
  the death, Disability, incompetency, minority, or incapacity of
  any Participant or Beneficiary, and of the right of a person to
  receive any benefit or make any application or election.
  
   3.05   Denied Claims.  The procedures when a claim under
  this Plan is denied are as follows:
  
   (A)    The Benefits Committee shall:
    <PAGE>
          (i)     notify the claimant within a reasonable
                    time of such denial, setting forth the
                    specific reasons therefor; and
          (ii)    afford the claimant a reasonable
                    opportunity for a review of the decision.
  
   (B)    The notice of such denial shall set forth, in
  addition to the specific reasons for the denial, the following:
          (i)     identification of pertinent provisions of
                    this Plan;
          (ii)    such additional information as may be
                    relevant to denial of claim; and 
          (iii)   an explanation of the claims review
                    procedure; and advice that the claimant may
                    request an opportunity to submit a
                    statement of issues and comments.
  
   (C)    Within sixty days following advice of denial of a
  claim, upon request made by the claimant, the Benefits
  Committee shall take appropriate steps to review its decision
  in light of any further information or comments submitted by
  the claimant.  The Benefits Committee may hold a hearing at
  which the claimant may present the basis of any claim for
  review.
  
   (D)    The Benefits Committee shall render a decision
  within a reasonable time (not in excess of 120 days) after the
    <PAGE>
claimant's request for review and shall advise the claimant in
  writing of its decision, specifying the reasons and identifying
  the appropriate provisions of this Plan.
   (E)    The Benefits Committee shall report to the
  Compensation Committee any denials of claims, requests for
  review, and actions taken in response to such requests.  The
  Compensation Committee may review such denials and actions and
  may affirm, modify, or reverse same.
  
   3.06   Participant List.  The Chief Executive Officer
  shall be responsible for maintaining an up-to-date list of the
  Participants with copies to Compensation Committee and Benefits
  Committee members.
  
  IV.  OPERATION OF THE PLAN
   ---------------------
  
   4.01   Deferral Election.
          ------------------
   (A)    Form of Election.  For elections made after
  September 1, 1995, a Participant may elect to defer
  Compensation as follows:
  
          (i)     A Participant may elect to have his or her
                    2.09(a) Compensation reduced by any
                    percentage - not exceeding 15 percent. 
    <PAGE>
          (ii)    A Participant may elect to defer any whole
                    percentage of his or her Incentive
                    Compensation.
  
          (iii)   A Participant may elect to defer all of his
                    or her Incentive Shares.
  
          (iv)    A Participant may elect to defer all of his
                    or her Performance Shares.
  
  The amount of deferrals under (i) and (ii) may be reduced by
  the amount of the Participant's salary reduction contribution
  under the Incentive Thrift Plan.  These elections are not
  exclusive and a Participant may elect one, or any combination
  thereof.
  
   (B)    Time of Election.  Except as provided in this
  section, elections for deferrals under subsection 4.01(A)(i)
  shall be made prior to commencement of the Plan Year in which
  the Compensation is to be earned; elections for deferrals under
  subsections 4.01(A)(ii) or (iii) shall be made prior to the
  Plan Year, the performance in which is rewarded by the
  Incentive Compensation or Incentive Shares; elections for
  deferrals under subsection 4.01(A)(iv) shall be made prior to
  commencement of the third year of the performance cycle as
  defined in the Performance Share Plan.
    <PAGE>
   If any individual becomes a Participant or qualifies for a
  new form of bonus during a Plan Year, he or she may, at that
  time, elect prior to receipt of the related 2.10(a)
  Compensation, award of Incentive Compensation or Incentive
  Shares, or allocation of Performance Shares to defer
  Compensation received or earned in that or a succeeding Plan
  Year.
  
   An election once made shall be effective for each
  succeeding year until a superseding election is made or until
  it is cancelled.  Any superseding election shall be effective
  for each Plan Year subsequent to the year in which it was made.
  
   Each Participant qualifying for participation on
  December 11, 1995, may elect, prior to December 31, 1995, to
  make a 4.01(A)(ii) or (iii) deferral with respect to bonuses
  rewarding performance in 1995.
  
   4.02   Deferral Match.  The Employer shall add to a
  Participant's Share Account an amount equal to the difference
  between the employer contributions actually made on behalf of
  the Participant under the Incentive Thrift Plan and the amount
  that would have been made had the Participant's compensation
  under that plan not been restricted under Section 4.01(a)(17)
  of the Internal Revenue Code.  Deferred Match contributions
    <PAGE>
will be made at such time or times as the monies would
  otherwise have been paid as employer contributions under the
  Thrift Plan.
  
   4.03   Deferred Compensation Accounts.  Deferrals shall be
  allocated to either a Cash Account or a Share Account. 
  Deferral Match contributions shall be allocated to the
  Participant's Share Account.  Other deferrals shall be
  allocated to the account selected by the Participant at the
  time he or she makes an election for the related deferral. 
  Cash or Share values are to be determined by the Share Price on
  the date the cash or Shares would otherwise have been paid to
  the Participant.  Once a deferral is allocated to the Cash or
  Share Account, it may not be reallocated.  The Deferred
  Compensation Accounts for each Participant shall continue to
  reflect amounts deferred under the prior provisions of the
  Incentive Plans and any Deferral Agreement.  
   (A)    Cash Account.  The Cash Account for each
  Participant shall be credited with an amount of Deferred
  Compensation as of the date the equivalent cash payment would
  otherwise have been made, Incentive Shares awarded, or
  Performance Shares first allocated to the Participant
  (converting Shares to Cash at the Share Price on said date). 
  All Cash Accounts shall be increased by a factor (the Interest)
  as follows:  As of the last day of each Plan Year, the Employer
  shall credit to each such account interest on the balance in
  such account computed with regard to the amount of time during
    <PAGE>
the Plan Year that such amount has been credited to such
  account.  The rate of interest shall be the twelve-month
  average for the Plan Year of the monthly base rates on prime
  corporate loans at the principal office of The First National
  Bank of Boston in effect on the last day of each month.
  
   (B)    Share Account.  The Share Account for each
  Participant shall be credited with an amount of Deferred
  Compensation as of the date the equivalent cash payment would
  otherwise have been made (at the Share Price on the next
  investment date), Incentive Shares awarded, or Performance
  Shares finally awarded to the Participant.  Upon each
  declaration of cash dividends on Shares, the Participant's
  Share Account shall be increased by the number of Shares
  equivalent to the dividend declared on a Share (the Dividend)
  multiplied by the number of Shares credited to the
  Participant's Share Account on the date of record calculated as
  if the Shares in the Account had participated in the Dividend
  Reinvestment Plan.
  
   4.04   Payment of Balances.
  
   (A)    Election of Time of Payment.  At the time of
  electing to defer Compensation, in accordance with subsection
  4.01(A), the Participant shall also elect whether to receive
  payment after ten years or upon Termination of Service on or
    <PAGE>
after the date when the Participant could first commence
  receiving benefits under the Qualified Plan.
  
   (B)    Payments After Ten Years.  If the Participant has
  elected payment after ten years, the full related Cash and
  Share Account Balances shall be paid as soon as practicable
  after the close of the tenth anniversary of the close of the
  Related Plan Year.
   (C)    Payments at Retirement.  If the Participant has
  elected payment on the date when the Participant could first
  commence receiving benefits under the Qualified Plan, the
  Participant's full Cash and Share Account Balances shall be
  paid in ten annual payments commencing at such date.
  
   (D)    Payments Upon Termination of Service.
          Regardless of the payment election previously made
  by the Participant, the full Cash and Share Account balances of
  a Participant who is not Vested under the Qualified Plan shall
  be paid as soon as practicable after a Termination of Service.
   Regardless of the payment election previously made by the
  Participant, within the Election Period following Termination
  of Service, a Participant who is Vested in the Qualified Plan
  may elect to receive as soon as practical payment of his full
  Cash and Share Account balances, less 10%.
  
   (E)    Hardship Payments.  Prior to a Participant's
  Termination of Service (or completion of a subsection 4.04(C)
    <PAGE>
payment stream, if applicable), the Benefits Committee shall
  have the power and discretion to make a payment to such
  Participant from his or her Deferred Compensation Account at
  any time if the Benefits Committee determines that the
  Participant is suffering from a serious financial emergency
  resulting from circumstances beyond the Participant's control
  which would cause a hardship to the Participant unless such
  payment was made.  Payments will be made first from the Cash
  Account, to the extent not in Deferral Units, secondly from the
  Share Account, and thirdly from Deferral Units.  Benefits
  otherwise payable from a partially liquidated Deferral Unit
  shall then be actuarially adjusted, using the most recent
  assumptions established by the Benefits Committee for the
  Qualified Plan, for the payment made.  No payments will be made
  on account of Deferral Units for which a split-dollar option
  has been elected under prior provisions of the Plan.
   Any such hardship payment will be in a lump sum and will
  not exceed the lesser of (i) the amount necessary to satisfy
  the hardship situation or (ii) the balance of the Participant's
  Deferred Compensation Accounts.
  
   (F)    Dissolution of Employer; A Major Transaction;
  Change in Control.  In the event of dissolution, liquidation,
  or winding up of the business of the Employer or the New
  England Electric System, whether voluntary or involuntary, the
  Participant shall receive, at the time of such event, a lump
    <PAGE>
sum payment equal to the balance in his Cash and Share Accounts
  and the Actuarial Value of the maximum value of future benefits
  from Deferral Units, unless the New England Electric System has
  assumed all the rights, duties, and obligations of the Employer
  hereunder.
   In the event of a Major Transaction or a Change in
  Control, any Participant, whether terminated or active, may
  elect at any time during the Election Period to receive, in
  lieu of any future benefits hereunder, a lump sum payment equal
  to the balance of his Cash and Share Accounts and the Actuarial
  Value of the maximum value of future benefits from Deferral
  Units, all less 10%.  The Employer of each Participant at the
  time (or at termination, if applicable) shall, as soon as
  practicable after a Major Transaction or a Change in Control
  advise the Participant of his rights under this paragraph.
  
   (G)    Death or Disability.  In the event of the
  Participant's death, the full Cash and Share Account Balances
  shall be distributed to the Beneficiary as soon as practicable.
   At the request of the Participant following his
  Disability, the full Cash and Share Account Balances shall be
  distributed to the Participant as soon as practicable.
  
   (H)    Form of Payments.  Except as provided herein, any
  distribution from a Cash Account will be in cash.  Any
  distribution from a Share Account will be in the form of
  Shares; however, the Participant may elect, before the 30th day
    <PAGE>
preceding the tenth anniversary or Termination of Service, as
  the case may be, to receive cash in lieu of Shares for any
  percentage up to 100% of said distribution.  
   All distributions on account of Hardship, death,
  Disability, dissolution, Change in Control, Major Transaction,
  or Failure of Payments shall be in cash.
  
   (I)    Distributed Shares.  The date of determination for
  the Share Price of Shares distributed or converted hereunder
  shall be:
          (i)     for payments under 4.04(B), December 31 of
                    the concluding year;
          (ii)    for payments under 4.04(C) and the first
                    paragraph of 4.04(D), the last day of the
                    month prior to the payment date;
          (iii)   for payments under 4.04(E), the last
                    trading date of the month prior to the
                    month in which the Benefits Committee
                    authorizes the distribution;
          (iv)    for payments under the first paragraph of
                    4.04(F), the last trading date of the month
                    preceding the triggering event;
          (v)     for payments under the second paragraph of
                    4.04(F), the highest average of the high
                    and low prices on the New York Stock
                    Exchange Composite Transaction as reported
                    in the Wall Street Journal for any five
    <PAGE>
                  consecutive trading days in the 60 days
                    preceding the Change in Control or Major
                    Transaction (if there is no trading in the
                    Shares on the New York Stock Exchange for a
                    substantial amount of time during the five-
                  day period, or if publication by The Wall
                    Street Journal of reports of Share
                    transactions for any day in the five-day
                    period does not take place or is subject to
                    reporting error, the value of Shares shall
                    be determined by the Benefits Committee on
                    the basis of such market quotations or
                    other method as the Benefits Committee
                    shall deem appropriate);
          (vi)    for payments under 4.04(G), the last day of
                    the month following the triggering event;
          (vii)   for elections made during an election
                    period other than under the second
                    paragraph of 4.04(F), the last day of the
                    month following filing of the election with
                    the Company; and
          (viii)  for payments made under 4.06, the last day
                    of the month preceding the triggering
                    event.
    <PAGE>
   Shares to be distributed shall be purchased on the open
  market, unless an officer of the New England Electric System
   determines otherwise; provided, however, if the Employer has
  placed an appropriate number of Shares in the Rabbi Trust for
  the benefit of the Participant, the Employer may satisfy the
  requirement by distribution of said Shares.
  
   (J)    Taxes.  If a distribution is to be made solely in
  Shares, the Employer may withhold from such distribution an
  amount equal to its withholding obligations under state and
  Federal tax laws.
   4.05   No Segregation of Assets.  The Employer shall not
  be required to set aside or segregate any assets of any kind to
  meet any obligations under this Plan.  All obligations of the
  Employer shall be reflected by bookkeeping entries only.  The
  Participants shall have no rights under this Plan to any
  specific assets of the Employer (including any Shares purchased
  by the Employer to reflect its obligation hereunder) and
  ownership of any insurance policies relating to Deferral Units
  shall remain with the Employer.  The rights of a Participant
  under this Plan shall be those of a general, unsecured creditor
  of the Employer.  
  
   4.06   Failure of Payments.  Any provision of this Plan to
  the contrary notwithstanding, if (i) an Employer shall fail to
  make any payment to any Participant when due under this Plan or
    <PAGE>
(ii) any employer or company shall fail to make any payments to
  any Participant due under any of the Other Plans, each
  Participant will be paid immediately a lump sum payment equal
  to the balance of his Cash and Share Accounts (and the
  Actuarial Value of the maximum value of future benefits from
  Deferral Units).  If any employer or company shall fail to make
  a payment as provided in (i) or (ii) due to inadvertence or a
  good faith delay to permit processing and shall immediately
  upon discovery of such failure or delay make such payment in
  full, the original failure to make the payment or payments
  shall not, for the purposes of this paragraph, be a failure to
  make a payment.  If any employer or company shall, in good
  faith, contest a claim by a participant under this Plan or any
  of the other above-listed plans, the failure to make the
  contested payment or payments shall not, for the purpose of
  this paragraph, be a failure to make a payment.
   Subject to any necessary regulatory approvals, if the
  Employer does not make the aforesaid payment, New England
  Electric System will make the payment.
  
  V.      AMENDMENT OR TERMINATION
   ------------------------
  
   5.01   Right to Amend or Terminate.  The Compensation
  Committee may amend or terminate this Plan at any time;
  provided, however, that no such action shall affect any right
  or obligation with respect to any Compensation previously
    <PAGE>
earned; provided, further, that, if the Compensation Committee,
  in its sole discretion, determines that (a) changes in Federal
  income tax statutes, rules, or regulations, (b) changes in the
  Federal tax rate paid by the Employers, or (c) the application
  or potential application to the Plan of Section 406 of Title I
  of the Employee Retirement Income Security Act of 1974 make it
  advisable, existing Deferral Units may be modified or canceled;
  and provided further, no amendment or discontinuance in any
  manner adverse to a Participant with respect to benefit formula
  or optional form of payment may be made for three years
  following a Change in Control or a Major Transaction.  No such
  modification or cancellation shall affect any Participant's
  Cash or Share Account Balance.  No such modification may reduce
  the then established retirement income or death benefit of a
  Participant who has had a Termination of Service, but it may
  reduce or eliminate any subsequent increases in either or both.
  
  VI.     GENERAL PROVISIONS
   ------------------
  
   6.01   Nonalienation of Benefits.  Except as provided in
  the split-dollar option under prior provisions of the Plan, a
  Participant shall not have the right to commute, sell, assign,
  transfer, or otherwise convey the right to receive any payments
  under this Plan, which payments and the right thereto shall be
  nonassignable and nontransferable, whether voluntarily or
  involuntarily.
    <PAGE>
   6.02   No Implied Rights.  Neither this Plan nor the
  making of payments or purchases of insurance by an Employer
  shall be construed to create any obligation upon an Employer to
  continue the Plan or to continue purchases of insurance or to
  give any present or future employee any right to continued
  employment.
  
   6.03   Effectuation of Interest.  In the event it should
  become impossible for New England Electric System, the
  Employers, the Compensation Committee, or the Benefits
  Committee to perform any act required by the Plan, New England
  Electric System, the Employers, the Compensation Committee, or
  the Benefits Committee may perform such other act as it in good
  faith determines will most nearly carry out the intent and
  purpose of the Plan.
  
   6.04   Copy of Plan.  An executed copy of the Plan shall
  be available for inspection by Participants or other persons
  entitled to benefits under the Plan at reasonable times at the
  Personnel Offices of the Employers.
  
   6.05   Headings.  The headings of articles and sections of
  the Plan are for convenience of reference only.
  
   6.06   Gender and Number.  Unless the context requires
  otherwise, the singular shall include the plural; the masculine
  gender shall include the feminine; and such words as "herein",
    <PAGE>
"hereinafter", "hereof", and "hereunder" shall refer to this
  instrument as a whole and not merely to the subdivision in
  which such words appear.
  
   6.07   Separability.  If any term or provision of this
  Plan, as presently in effect or as amended from time to time,
  or the application thereof to any payments or circumstances,
  shall to any extent be invalid or unenforceable, the remainder
  of this Plan and the application of such term or provision to
  payments or circumstances other than those as to which it is
  invalid or unenforceable shall not be affected thereby, and
  each term or provision of this Plan shall be valid and enforced
  to the fullest extent permitted by law.
  
   6.08   Applicability.  All provisions of this Plan shall
  be uniformly applicable to all Participants.
  
   6.09   Governing Law.  Except as otherwise required by
  law, this Plan and all matters arising thereunder shall be
  governed by the laws of The Commonwealth of Massachusetts.
   6.10   Effective Date.  This Amendment shall be effective
  October 24, 1995.
  Dated:  February 24, 1997
                            s/George M. Sage
  SIGNATURE              ______________________________
                         Chairman
                         Pursuant to Vote of October 24,
                         1995, of the Compensation
                         Committee
  
    <PAGE>
                          APPENDIX A
                                
                      ADDITIONAL DEFERRALS
                                
                                 
  
   1.   By vote of the Compensation Committee of October 15,
  1996, certain individuals were granted special performance
  bonuses of share grants, said bonuses to be deferred to the
  individual's Share Account under the Plan and subject to all
  the benefits and limitations of the Plan, except that the
  provision for payments after ten years will not apply.
  
   2.   By vote of the NEES Board of Directors on November
  26, 1996, John W. Rowe was granted a special performance bonus
  of 6,000 shares, said bonus to be deferred to his Share Account
  under the Plan and subject to all the benefits and limitations
  of the Plan, except that the Share Account balance relating to
  the 6,000 shares shall no longer be deferred but shall be paid
  as soon as practical after a Termination of Service.