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                                                                   Exhibit 10.62


                                                                  EXECUTION COPY


             FIRST AMENDMENT TO OPERATION AND MAINTENANCE AGREEMENT
             ------------------------------------------------------

         This FIRST AMENDMENT TO OPERATION AND MAINTENANCE AGREEMENT (this
"Amendment") dated December 22, 1995 by and between Buzzard Power Corporation
("Lessee") and U.S. Operating Services Company ("Operator").

                                    PREMISES:
                                    --------

         WHEREAS, Scrubgrass Generating Company, L.P. ("Lessor") entered into
that certain Operation and Maintenance Agreement (the "Original Agreement")
dated as of December 21, 1990 with Bechtel Power Corporation ("BPC");

         WHEREAS, BPC assigned all of its right, title and interest in and to
the Original Agreement to Operator, and Operator assumed all of BPC's
obligations with respect to the Original Agreement, pursuant to an Assignment
and Assumption Agreement dated as of January 1, 1992 (the Original Agreement,
after giving effect to such assignment and assumption and as in effect on the
date hereof, the "Agreement");

         WHEREAS, in accordance with the terms of an Amended and Restated Lease
Agreement dated December 22, 1995 between Lessor and Lessee, Lessor has assigned
all of its right title and interest in and to the Agreement to Lessee:

         WHEREAS, Lessor, Operator, U.S. Generating Company, Environmental Power
Corporation and Lessee have entered into a certain Agreement dated December 22,
1995 (the "Settlement Agreement"); and

         WHEREAS, in connection with the Settlement Agreement, Lessee and
Operator desire to amend the Agreement in certain respects as more fully set
forth in this Amendment.


         NOW THEREFORE, in consideration of the foregoing premises and the
mutual promises contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby mutually agree as follows:

         1.       Definitions.
                  -----------

         Capitalized terms used herein but not defined herein have the
respective meanings given such terms in the Agreement.
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         2.       Amendments to the Agreement.
                  ---------------------------

                  (a) Article V of the Agreement is hereby amended by inserting
the following sentence at the end of such Article V:

         Notwithstanding anything in this Agreement to the contrary, only during
         the Contract Years corresponding to Calendar Years 1996 and 1997, the
         Bonus Fee, Employee Incentive Payment and Employee Safety Bonus which
         are earned by Operator during each such Contract Year shall be paid to
         Operator only if and to the extent that the aggregate of the Bonus Fee,
         Employee Incentive Payment and Employee Safety Bonus earned by Operator
         during each such Contract Year exceeds Two Hundred Forty Thousand
         Dollars ($240,000).

                  (b) Section 9.1.1 of the Agreement is hereby deleted in its
entirety and replaced with the following:

         9.1.1    Worker's Compensation Insurance (including employer's
                  -------------------------------
                  liability insurance of not less than $1,000,000) for all of
                  Operator's employees (and Operator shall require and be
                  reasonably satisfied that all subcontractors of Operator
                  engaged in or with respect to work on or about the Facility
                  shall have obtained such insurance) in such amount as is
                  required by all applicable laws, rules and regulations of the
                  Commonwealth of Pennsylvania, which policy shall contain "all
                  states", "voluntary compensation", "amended notice of
                  occurrence", "amended knowledge of occurrence", and
                  "unintentional errors or omissions" endorsements to the extent
                  permitted by such laws, rules and regulations and available on
                  commercially reasonable terms.

         3.       Ratification and Confirmation.
                  -----------------------------

         Except as amended hereby, the terms and provisions of the Agreement
remain unchanged, and the Agreement, as amended by this Amendment, is hereby
ratified and confirmed in all respects and remains in full force and effect.


         4.       Counterparts.
                  ------------

         This Amendment may be executed in separate counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

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         5.       Governing Law.
                  -------------

         This Amendment shall be governed by and construed under the laws of the
Commonwealth of Pennsylvania.


         6.       Captions.
                  --------

         Titles or captions of sections and paragraphs contained in this
Amendment are inserted as a matter of convenience only, and in no way define,
limit, extend, describe or otherwise affect the scope or meaning of this
Amendment or the intent of any provision hereof.


         7.       Binding Effect, Successors and Assigns.
                  --------------------------------------

         This Amendment shall be binding upon and shall inure to the benefit of
the successors and permitted assigns of the parties.


         8.       Invalid Provisions.
                  ------------------

         The invalidity or unenforceability of any provision of this Amendment
shall be determined only by a court of competent jurisdiction, and the parties
hereby agree to negotiate an equitable adjustment to any invalid or
unenforceable provisions with a view toward effecting the purposes of this
Amendment; provided, however, that the validity or enforceability of the
           --------  -------
remaining provisions of this Amendment, or any portions or applications thereof,
shall not be affected thereby.

         9.       Assignment.
                  ----------

         Except as is otherwise specifically provided herein, neither party to
this Amendment shall assign this Amendment in whole or in part without the prior
written consent of the other party hereto. Notwithstanding anything in this
Amendment to the contrary, Lessee or Operator may assign this Amendment in
connection with and to the same extent as an assignment by such party of the
Agreement which is permitted pursuant to Section 14.2 of the Agreement.


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         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officer or representative as of the day and
year first written above,


                                   BUZZARD POWER CORPORATION


                                   By:   /s/ Joseph E. Cresci
                                         --------------------------------
                                   Name: 
                                         --------------------------------
                                   Title:
                                         --------------------------------



                                   U.S. OPERATING SERVICES COMPANY


                                   By:    /s/ Earl H. Franklin
                                          --------------------------------
                                   Name:  Earl H. Franklin
                                          --------------------------------
                                   Title: President and Chief Executive Officer
                                          --------------------------------

                       [First Amendment to O&M Agreement]