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                                                                 Exhibit 10.8.1


                   FIRST AMENDMENT TO THE AMENDED AND RESTATED
                      TAX ALLOCATION AGREEMENT DATED AS OF
                                 JANUARY 1, 1990


         This Amendment, dated as of October 26, 1998, to the Amended and
Restated Tax Allocation Agreement, dated as of January 1, 1990 (the
"Agreement"), is made by and among Northeast Utilities (the "Parent Company")
and The Connecticut Light and Power Company, Western Massachusetts Electric
Company, Holyoke Water Power Company, Northeast Utilities Service Company,
Northeast Nuclear Energy Company, Holyoke Power and Electric Company, The Rocky
River Realty Company, The Quinnehtuk Company, Research Park, Inc., Charter Oak
Energy, Inc., HEC, Inc., Public Service Company of New Hampshire, Properties
Inc., North Atlantic Energy Corporation, North Atlantic Energy Service
Corporation, COE Development Corporation, COE Argentina II Corp., COE Tejona
Corporation, COE Ave Fenix Corporation, HEC International Corporation, Mode I
Communications Inc., Select Energy, Inc., WMECO Receivables Corporation, CL&P
Receivables Corporation and any other corporations that become a member of the
Parent Company's affiliated group, as defined in Section 1504(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Code") and execute a duplicate
copy of the Agreement or consent to be included in a consolidated federal income
tax return that includes the Parent Company (hereinafter collectively
"subsidiaries" and singly "subsidiary") in accordance with Rule 45(c).(1)

         The Agreement is hereby amended as follows:

         1. The first unnumbered paragraph of the Agreement is amended to
include as subsidiaries (as of the date on which each of the following companies
became a member of the Parent Company's affiliated group):

         Properties Inc., COE Development Corporation, COE Argentina II Corp.,
         COE Tejona Corporation, COE Ave Fenix Corporation, HEC International
         Corporation, Mode I Communications Inc., Select Energy, Inc., WMECO
         Receivables Corporation, CL&P Receivables Corporation and any other
         corporations that become a member of the Parent Company's affiliated
         group and execute a duplicate copy of this Agreement or consent to be
         included in a consolidated federal income tax return that includes the
         Parent Company






--------

         (1) References to Rule 45 are to Rule 45 of the Public Utility Holding
Company Act of 1935.


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         2. Paragraph (1)(c) of the Agreement is deleted in its entirety and
replaced with the following:

         Dividends and other transactions with respect to stock, bonds, or other
         obligations of members shall be reflected as provided in Treas.
         Reg. ss. 1.1502-13(f) and -13(g).

         3. Paragraph (1)(f) of the Agreement is deleted in its entirety and
replaced with the following:

         Basis shall be determined under Treas. Reg. ss. 1.1502-31 or
         ss. 1.1502-32.

         4. The second sentence of paragraph (2) of the Agreement is deleted in
its entirety and replaced with the following:

         Subject to the limitation provided in paragraph (10), such consolidated
         federal income tax allocated to a subsidiary, which may be either
         positive or negative, shall be equal to the separate taxable income of
         the subsidiary (after elimination of capital gains and losses)
         multiplied times the highest effective corporate federal income tax
         rate set forth in Section 11 of the Code.

         5. The first sentence of paragraph (4) of the Agreement is deleted in
its entirety and replaced with the following:

         General business credits arising in a particular year shall be
         allocated among the subsidiaries giving rise to such credits by
         multiplying the amount of consolidated general business credits for
         such year utilized by a fraction, the numerator of which is the amount
         of general business credit of the subsidiary for such year and the
         denominator of which is the total amount of general business credit of
         all such subsidiaries for such year.

         6. The first sentence of paragraph (6) of the Agreement is deleted in
its entirety and replaced with the following:

         Should the Parent Company's affiliated group generate a net operating
         loss for a tax year, each company shall first receive an allocation of
         consolidated federal income tax, which may be either positive or
         negative, as provided in paragraph (2); provided, however, a negative
         allocation of the consolidated federal income tax shall be made only to
         the extent that separate taxable income reduces consolidated federal
         income tax for such tax year.

         7. Paragraph (6) is further amended to add the following after the last
sentence:

         For purposes of the consolidated return, the utilization of net
         operating losses carried back or carried over is determined on a
         first-in first-out basis with all net


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         operating losses generated by all subsidiaries in the earliest year
         utilized first before net operating losses generated in a subsequent
         year can be utilized. For purposes of allocating the net operating
         losses pursuant to this Agreement, and in accordance with the separate
         return limitation of Paragraph (10), the net operating losses utilized
         shall be determined on a first-in first-out basis with the net
         operating losses generated by subsidiaries allocated positive taxes in
         Paragraphs (2) and (3) utilized first, for all available vintages,
         before net operating losses generated by subsidiaries allocated
         negative taxes in Paragraphs (2) and (3) are utilized. If the vintages
         of net operating losses utilized pursuant to this Agreement differ from
         those utilized according to the consolidated return for a subsidiary,
         then the vintages of net operating losses utilized pursuant to this
         Agreement shall be exchanged among the affected subsidiaries. Net
         operating loss carryovers that are lost due to reductions, limitations
         and expirations imposed by the Code or the regulations thereunder shall
         be allocated in an appropriate and reasonable manner. See Rule
         45(c)(5).

         8. Paragraph (7) of the Agreement is deleted in its entirety and
replaced with the following:

         ALLOCATION OF ALTERNATIVE MINIMUM TAX OR CREDIT. Any portion of the
         consolidated federal income tax that is attributable to alternative
         minimum tax ("Consolidated AMT") shall be allocated in a positive
         amount to each subsidiary with "tentative minimum tax," as defined in
         Section 55(b)(1) of the Code (determined following the principles used
         to compute each subsidiary's separate return tax), which for purposes
         of this Agreement can be positive or negative, ("Separate Return
         Tentative Minimum Tax"), in excess of the "regular tax," as defined in
         Section 55 (c) of the Code (determined following the principles used to
         compute each subsidiary's separate return tax), allocated to such
         subsidiary in accordance with this Agreement (except paragraph (10)),
         which for purposes of this Agreement can be positive or negative
         ("Separate Return Regular Tax"). Consolidated AMT shall be allocated to
         each such subsidiary by multiplying Consolidated AMT by a fraction the
         numerator of which is the amount by which the subsidiary's Separate
         Return Tentative Minimum Tax exceeds such subsidiary's Separate Return
         Regular Tax and the denominator of which is the sum of the amounts by
         which the Separate Return Tentative Minimum Tax of the Subsidiaries to
         which an allocation of Consolidated AMT is made exceeds the Separate
         Return Regular Tax allocated to such subsidiaries. If the regular tax
         portion of the consolidated federal income tax is reduced by reason of
         a "minimum tax credit," as defined in Section 53 of the Code, the
         benefit of such minimum tax credit shall be allocated to the
         subsidiaries that (by having an alternative minimum tax liability
         allocated to them in a prior year) generated such minimum tax credit,
         with the earliest liabilities being allocated such minimum credit
         first. See Rules 45(c)(3) and 45(c)(5). The allocation of any
         "alternative



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         tax net operating loss deduction," as defined by Section 56(d) of the
         Code, shall follow the principles of paragraph (6).

         9. Paragraph (8) of the Agreement is deleted in its entirety and
replaced with the following:

         OTHER FEDERAL TAXES, BENEFITS AND CREDITS. Taxes, tax benefits and
         credits against consolidated federal income tax that are not
         specifically addressed herein and for which allocation under paragraph
         (2) is not appropriate shall be allocated following the principles set
         forth in paragraphs (3) through (7) in order to allocate the material
         effects of such tax, tax benefit or credit to the subsidiary to which
         it is applicable. See Rule 45(c)(3).

         10. Paragraph (10) of the Agreement is amended to add the following
after the last sentence:

         If the federal income tax otherwise allocated to a subsidiary under
         this Agreement is greater than the federal income tax computed as if
         such subsidiary had always filed a separate return, the Parent Company
         shall be liable for such excess, subject to recovery in later years
         from subsequent consolidated tax benefits.

         11. Paragraph (11) of the Agreement is amended by denoting the current
text thereof as subparagraph (a) and captioning subparagraph (a) as "GENERALLY
AND NEW HAMPSHIRE BUSINESS PROFITS TAX FOR TAX YEARS ENDING ON OR BEFORE
DECEMBER 31, 1997."

         12. Paragraph (11) of the Agreement is amended to add the following
after the last sentence of the current provision:

         (b)      STATES WITH UNITARY REPORTING FOR TAX YEARS BEGINNING AFTER
                  DECEMBER 31, 1997. Notwithstanding the preceding sentence, for
                  purposes of allocating any current state income tax liability
                  that is determined on the basis of unitary reporting and that
                  is associated with a state income tax return involving more
                  than one subsidiary ("Unitary Tax Liability"), any such
                  current Unitary Tax Liability shall be allocated, FIRST, to
                  subsidiaries with a positive income tax liability with
                  respect to such state determined following the principles used
                  to compute the subsidiary's Separate Return Tax ("Separate
                  Unitary Return Tax") in an amount equal to each such
                  subsidiary's Separate Unitary Return Tax; then

                  (i)      if the current Unitary Tax Liability is less than the
                           aggregate Separate Unitary Return Tax of the
                           subsidiaries with positive Separate Unitary Return
                           Tax ("Unitary Tax Benefit"), SECOND, in a negative
                           amount to the Parent Company in an amount
                           equal to the lesser of the Unitary Tax Benefit with
                           respect to such state or the Unitary Tax Detriment
                           (as hereinafter defined) from a prior year



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                           that has not been recovered in a prior year, THIRD,
                           in a negative amount to each subsidiary with a tax
                           credit from such state that was unavailable in
                           determining such subsidiaries' Separate Unitary
                           Return Tax ("Unavailable Credit") (provided, however,
                           that such tax credit was available in such state to
                           the unitary group for such state) in an amount equal
                           to the lesser of the Unitary Tax Benefit (less any
                           amount allocated by clause second of this paragraph
                           (11)(b)) or the sum of the Unavailable Credit of all
                           subsidiaries with Unavailable Credit multiplied by a
                           fraction (A) the numerator of which is the
                           Unavailable Credit of the subsidiary and (B) the
                           denominator of which is the sum of the Unavailable
                           Credits for all subsidiaries with Unavailable Credit;
                           FOURTH, in a negative amount to each subsidiary
                           having negative Separate Unitary Return Tax in an
                           amount equal to the lesser of the Unitary Tax Benefit
                           (less any amounts allocated by clauses second and
                           third of this paragraph (11)(b) or the sum of the
                           Separate Unitary Return Tax of all subsidiaries with
                           negative Separate Unitary Return Tax multiplied by a
                           fraction (A) the numerator of which is the Separate
                           Unitary Return Tax of the subsidiary and (B) the
                           denominator of which is the sum of the Separate
                           Unitary Return Tax of the subsidiaries having
                           negative Separate Unitary Return Tax, and, FIFTH, in
                           a negative amount to each subsidiary having positive
                           Separate Unitary Return Tax in an amount equal to the
                           Unitary Tax Benefit (less any amounts allocated by
                           clauses second, third and fourth of this paragraph
                           (11)(b) multiplied by a fraction (A) the numerator of
                           which is the Separate Unitary Return Tax of the
                           subsidiary and (B) the denominator of which is the
                           sum of the Separate Unitary Return Tax of the
                           subsidiaries having positive separate Unitary Return
                           Tax; or

                  (ii)     if the current Unitary Tax Liability is in excess of
                           the aggregate Separate Unitary Return Tax of the
                           subsidiaries with positive Separate Unitary Return
                           Tax ("Unitary Tax Detriment"); SECOND, to the Parent
                           Company in the amount of the Unitary Tax Detriment,
                           subject to recovery in later years from subsequent
                           Unitary Tax Benefits. (See Rule 45(c)).

         (c)      PAYMENTS FOR ALLOCATIONS OF STATE TAX LIABILITIES. Payments of
                  positive and negative allocations of state income tax
                  liabilities and of net current state income tax liabilities of
                  the Parent Company and the subsidiaries shall follow the
                  principles set forth in paragraph (9).

         13. Paragraph (12) of the Agreement is amended to add the following
after the last sentence:



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<PAGE>


         The Parent Company or designated subsidiary may act as an agent for
         each subsidiary doing business in a state with respect to the payment
         of any liability shown on the state income tax returns of such state.

         14. The last sentence of paragraph (15) of the Agreement is deleted in
its entirety and replaced with the following:

         If at any time any other company becomes a member of the Parent
         Company's affiliated group, the parties hereto agree that such new
         member may become a party to this Agreement by (i) executing a
         duplicate copy of this Agreement or (ii) consenting to be included in a
         consolidated federal income tax return that includes the Parent
         Company.

         The above procedure for apportioning the consolidated annual net
current federal and state income tax liability and expense of the Parent Company
and the subsidiaries have been duly authorized and agreed to by each of the
below listed members of the Parent Company's affiliated group as evidenced by
the signature of a duly authorized officer of each company:

                                   NORTHEAST UTILITIES

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   THE CONNECTICUT LIGHT AND POWER COMPANY

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   WESTERN MASSACHUSETTS ELECTRIC COMPANY

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer



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<PAGE>


                                   HOLYOKE WATER POWER COMPANY

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   NORTHEAST UTILITIES SERVICE COMPANY

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   NORTHEAST NUCLEAR ENERGY COMPANY

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   HOLYOKE POWER AND ELECTRIC COMPANY


                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   THE ROCKY RIVER REALTY COMPANY

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer



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<PAGE>


                                   THE QUINNEHTUK COMPANY

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   RESEARCH PARK, INC.

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   CHARTER OAK ENERGY, INC.

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   HEC, INC.

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer



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<PAGE>


                                   PROPERTIES INC.

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   NORTH ATLANTIC ENERGY CORPORATION

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   NORTH ATLANTIC ENERGY SERVICE CORPORATION

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   COE DEVELOPMENT CORPORATION

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   COE ARGENTINA IL CORP.

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer




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<PAGE>


                                   COE TEJONA CORPORATION

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   COE AVE FENIX CORPORATION

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   HEC INTERNATIONAL CORPORATION

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   MODE I COMMUNICATIONS INC.

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   SELECT ENERGY, INC.

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer




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<PAGE>



                                   WMECO RECEIVABLES CORPORATION

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                   CL&P RECEIVABLES CORPORATION

                                   By:   /s/ David R. McHale
                                         ------------------------------------
                                         Name:  David R. McHale
                                         Title: Vice President and Treasurer


                                    October 26, 1998
                                    ---------------------



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