Document:

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________________________________________________________________________________

                                                                   EXHIBIT 10.25

                             CONSENT AND AGREEMENT
                         (Asset Management Agreement)

                         Dated as of December 6, 1999

                                      by

                     NIAGARA MOHAWK ENERGY MARKETING, INC.

________________________________________________________________________________
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                             CONSENT AND AGREEMENT
                         (Asset Management Agreement)

     1.   NIAGARA MOHAWK ENERGY MARKETING, INC., a Delaware corporation (the
"Undersigned") hereby acknowledges that pursuant to the Security Agreement dated
as of December 6, 1999 ("Security Agreement"), between Project Orange
Associates, L.P., a Delaware limited partnership (the "Borrower"), and U.S. Bank
Trust National Association, as collateral agent ("Agent") for the benefit of the
Secured Parties, and that Indenture dated as of December 6, 1999 (the "Financing
Agreement"), between Borrower and U.S. Bank Trust National Association, as
Trustee (the "Trustee") on behalf of and for the benefit of the holders of the
Borrower's 10.5% Senior Secured Notes due 2007 (the "Holders" and, together with
the Trustee, the "Secured Parties"), Borrower has assigned its interest under
that certain Asset Management Letter Agreement, dated as of December 6, 1999
(the "Contract"), between the Undersigned and Borrower, to the Agent for the
benefit of the Secured Parties. The Undersigned consents to such assignment and
agrees with the Agent as follows:

          (a) Unless otherwise defined, all terms used herein which are defined
     in the Security Agreement or, if not defined therein, in the Financing
     Agreement, shall have their respective meanings as defined therein.

          (b) The Undersigned agrees that the Agent shall be entitled to
     exercise all rights and to cure any defaults of the Borrower under the
     Contract. Upon receipt of notice from the Agent, the Undersigned agrees to
     accept such exercise and cure by the Agent and to render all performance
     due by it under the Contract and this Consent and Agreement to the Agent.
     The Undersigned agrees to make all payments (if any) to be made by it under
     the Contract directly to Agent upon receipt of Agent's written
     instructions.

          (c) The Undersigned will not, without the prior written consent of the
     Agent (such consent not to be unreasonably withheld), (i) cancel or
     terminate the Contract except as provided in the Contract and, with respect
     to any termination on account of any default or breach by Borrower, in
     accordance with paragraph l(d) hereof, or consent to or accept any
     cancellation or termination thereof by the Borrower, (ii) sell, assign
     (except as authorized under the Contract with respect to assignments of the
     Contract to an affiliate of the Undersigned or payments to a third party
     agent for financing collateral purposes) or otherwise dispose (by operation
     of law or otherwise) of any part of its interest in the Contract, or (iii)
     amend or modify the Contract in any material respect. The Undersigned will
     deliver duplicates or copies of all notices delivered under or pursuant to
     the Contract to the Agent promptly upon receipt thereof and will advise the
     Agent of any material amendments to the Contract.

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          (d) The Undersigned will not terminate the Contract on account of any
     default or breach of Borrower thereunder without written notice to the
     Agent and first providing to the Agent (i) forty-five (45) days from the
     date on which notice of default or breach is delivered to Agent to cure
     such default if such default is the failure to pay amounts to the
     Undersigned which are due and payable under the Contract or (ii) a
     reasonable time as is necessary to cure such default if the breach or
     default cannot be cured by the payment of money to the Undersigned so long
     as they have commenced to cure the default within a ninety (90) day period
     from the date on which notice of default or breach is delivered to Agent
     and either Borrower or Agent thereafter diligently pursues such cure to
     completion and continues to perform any monetary obligations under the
     Contract and all other obligations under the Contract are performed by the
     Borrower or the Agent. If possession of the Project is necessary to cure
     such breach or default, and the Agent declares Borrower in default and
     commences foreclosure proceedings, the Agent will be allowed a reasonable
     period to complete such proceedings. If the Agent is prohibited by any
     court order or bankruptcy or insolvency proceedings from curing the default
     or from commencing or prosecuting foreclosure proceedings, the foregoing
     time periods shall be extended until such prohibition is removed and Agent
     is permitted to cure the default or foreclosure, but in no event for longer
     than one hundred and twenty (120) days. The Undersigned consents to the
     transfer of Borrower's interest under the Contract to the Agent, for the
     benefit of the Secured Parties, or a purchaser or grantee at a foreclosure
     sale by judicial or nonjudicial foreclosure and sale or by a conveyance by
     Borrower in lieu of foreclosure and agrees that upon such foreclosure, sale
     or conveyance, the Undersigned shall recognize the Agent or any other
     purchaser or grantee as the applicable party under the Contract so long as
     there are no uncured defaults.

          (e) In the event that the Contract is rejected by a trustee or debtor-
     in-possession in any bankruptcy or insolvency proceeding, or if the
     Contract is terminated for any reason other than a default which could have
     been but was not cured by the Agent as provided in paragraph l(d) above,
     and if, within forty-five (45) days after such termination, the Agent or
     its successors or assigns shall so request, the Undersigned will execute
     and deliver to the Agent a new Contract, which Contract shall be on the
     same terms and conditions as the original Contract for the remaining term
     of the Contract before giving effect to such termination and shall only
     take effect once properly authorized by the trustee in bankruptcy or
     debtor-in-possession.

          (f) In the event Agent or its designee or assignee elect to perform
     Borrower's obligations under the Contract or to enter into a new Contract
     as provided in subparagraph (d) or (e) respectively above, the Agent, the
     Secured Parties, their designees and assignees, shall not have personal
     liability to the Undersigned for the performance of such obligations, and
     the sole recourse of the Undersigned in seeking

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     the enforcement of such obligations shall be to such parties' interest in
     the Project. In the event Agent succeeds to the Borrower's interest under
     the Contract, or performs any of Borrower's obligations under the Contract,
     Agent shall cure any defaults for failure to pay amounts owed under the
     Contract within the time periods specified in paragraph 1(d), but shall not
     otherwise be required to perform (or be subject to any defenses or offsets
     by reason of) any of the Borrower's other obligations under the Contract
     that were unperformed at such time. Agent shall have the right to assign
     all or part of its interest in the Contract or a new Contract entered into
     pursuant to subparagraph (e) to a person or entity to whom the Project is
     transferred, provided such transferee assumes the obligations of the
     Borrower (or the Agent) under the Contract and has a financial capability
     at least equivalent to that of Borrower on the date hereof. Upon such
     assignment, the Agent (including its agents, employees and contractors)
     shall be released from any further liability thereunder to the extent of
     the interest assigned.

          (g) The Undersigned hereby acknowledges and agrees that its rights to
     receive payment of the fees, expenses and other amounts under the Contract
     are subordinate in right of payment to the rights of the Secured Parties
     under the Financing Agreement and that payments of such fees and expenses
     shall be made from time to time (but no more frequently than monthly)
     solely out of, and shall be due and payable only to the extent of, proceeds
     held in the Subordinated Asset Management Fee Account of Borrower created
     under Section 2.02 of the Depositary Agreement, to the extent such proceeds
     are available after the application of project revenues to waterfall items
     (1) through (6) (Capital Expenditure Reserve Account) under Section 3.01(c)
     of the Depositary Agreement; provided that the Undersigned shall receive
     written notice of any modifications or additions to such waterfall
     provisions.

     2.   The Undersigned hereby represents and warrants that (a) the execution,
delivery and performance by the Undersigned of the Contract and this Consent and
Agreement have been duly authorized by all necessary corporate action, and do
not and will not require any further consents or approvals which have not been
obtained, or violate any provision of any law, regulation, order, judgment,
injunction or similar matters or materially breach any agreement presently in
effect with respect to or binding on the Undersigned; (b) this Consent and
Agreement and the Contract are legal, valid and binding obligations of the
Undersigned enforceable against the Undersigned; (c) all government approvals
necessary for the execution, delivery and performance by the Undersigned of its
obligations under the Contract have been obtained and are in full force and
effect; (d) as of the date hereof, the Contract is in full force and effect, has
not been amended, supplemented or modified and the Undersigned has no reason to
expect that any necessary governmental approvals required in the future may not
be obtained without undue delay or expense; and (e) to the best of the
Undersigned's knowledge Borrower has fulfilled all of its obligations under the
Contract, and there are no breaches or

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unsatisfied conditions presently existing (or which would exist after the
passage of time and/or giving of notice) under the Contract.

     3.   All Notices required or permitted hereunder shall be in writing and
shall be effective (i) upon receipt if hand delivered, (ii) when the appropriate
answer back is received if sent by telex and (iii) if otherwise delivered, upon
the earlier of receipt or two (2) Business Days after being sent registered or
certified mail, return receipt requested, with proper postage affixed thereto,
or by private courier or delivery service with charges prepaid, and addressed as
specified below:

     If to the Undersigned:

     Niagara Mohawk Energy Marketing, Inc.
     507 Plum Street
     Syracuse, NY 13204
     Attn:  Vice President, Business Development
     FAX:  (315) 460-3005

     If to Agent:

     U.S. Bank Trust National Association
     100 Wall Street, Suite 1600
     New York, NY  10005
     Attn: Corporate Trust Administration
     FAX:  (212) 809-5459

     4.   This Consent and Agreement shall be binding upon and benefit the
successors and assigns of the Undersigned, the Borrower, the Agent, and their
respective successors, transferees and assigns. No termination, amendment,
variation or waiver of any provisions of this Consent and Agreement shall be
effective unless in writing and signed by the Undersigned, the Agent and the
Borrower. This Consent and Agreement shall be governed by the laws of the State
of New York.

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     IN WITNESS WHEREOF, the Undersigned by its officer thereunto duly
authorized, has duly executed this Consent and Agreement as of the date set
forth below.

Dated: December 6, 1999

                                  NIAGARA MOHAWK ENERGY MARKETING, INC.,
                                   a New York corporation

                                  By: /s/ James Cifaratta
                                      ________________________________
                                  Name: James Cifaratta
                                  Title: Vice President

Accepted:

U.S. BANK TRUST NATIONAL ASSOCIATION,
 for itself and as Agent for the benefit of
 the Secured Parties

By: /s/ Ward A. Spooner
   ________________________________________
   Name:
   Title:

PROJECT ORANGE ASSOCIATES, L.P.,
 a Delaware limited partnership

By: G.A.S. ORANGE ASSOCIATES, L.L.C.
    a Delaware limited liability company

By: /s/ Adam Victor
   ________________________________________
Name: Adam Victor
Title: President

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                                                                   Exhibit 10.26
                                AGENCY AGREEMENT
                                ----------------

     THIS AGENCY AGREEMENT ("Agreement") is made effective as of the 14th day
of January 2000 by and between NIAGARA MOHAWK ENERGY MARKETING, INC., a New York
business corporation ("NMEM") and PROJECT ORANGE ASSOCIATES LP, a Delaware
limited partnership ("POA").

                              W I T N E S S E T H:
     WHEREAS, POA and NMEM have entered into a certain Asset Management
Agreement dated December 6, 1999 ("Asset Management Agreement"); and

     WHEREAS, in order to assist NMEM in the discharge of its obligations under
the Asset Management Agreement, POA and NMEM desire to enter into this Agreement
upon the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the premises, the terms, conditions,
covenants and agreements hereinafter set forth, the parties hereto agree that:

     1.   Appointment; Acceptance.  POA hereby appoints NMEM as its exclusive
          -----------------------
agent for the purposes contained herein, and NMEM hereby accepts its designation
as agent of POA hereunder.  The duties of POA shall expressly include, but not
be limited to,  the following:

          (a) Tendering payments from POA's designated account,

          (b) Accepting and disbursing funds though a POA bank account, limited
to the purposes of administering the POA Contracts (as defined in the Asset
Management Agreement);

          (c) Entering into contracts or agreements as POA's attorney-in-fact,
provided (i) such contracts or agreements are consistent with the objectives of
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the Asset Management Agreement and the Contract Optimization Agreement between
POA and NMEM; (ii) such contracts or agreements, and the obligations of POA
thereunder, are within the parameters of POA's present and previously approved
budget; and (iii) the obligations of POA under such contracts or agreements do
not exceed Fifty Thousand dollars ($50,000.00) individually or One Hundred
Thousand dollars ($100,000.00) in the aggregate for any calendar year; and

          (d) Executing additional contracts and agreements from time to time
which are not within the scope of subparagraph "(c)" above as POA's attorney-in-
fact, provided NMEM has obtained the prior written direction of POA to execute
such contracts or agreements.  POA shall make a representative available for
NMEM so that decisions can be made on a timely basis.

          (e)  Notwithstanding the monetary limitations set forth in
subparagraph (c) above, negotiating and executing contracts and agreements for
the sale of natural gas or purchase of energy, provided such contracts and
agreements are in compliance with Section 4.18 of a certain Indenture among POA,
Project Orange Capital Corp. and U.S. Bank Trust National Association, dated
December 6, 1999.  In addition, NMEM shall not enter into any contracts and
agreements regarding the sale of natural gas or purchase of energy which extend
in duration for a period of excess of six (6) months without the prior

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written direction of POA.

     2.   Discharge of Duties; Standard of Care; Personnel of NMEM.
          --------------------------------------------------------
          (a)  To the extent NMEM will manage funds of POA, NMEM shall manage
such funds with the same standard of care that it would use in managing its own
assets.
          (b) NMEM hereby agrees to provide the services of qualified personnel
to satisfy its obligations under this Agreement ("NMEM Personnel").

     3.   Consideration.  As full and complete consideration for this Agreement
          -------------
(and no independent consideration separate and apart from the Asset Management
Agreement), POA shall pay to NMEM the fees due pursuant to paragraph "6" of  the
Asset Management Agreement.

     4.   Term.  The term of this Agreement shall commence on the date hereof
          ----
and continue in effect until the first of the following to occur:
          (a) Termination of the Asset Management Agreement;

          (b) Termination by the mutual agreement of POA and NMEM; or

          (c) Termination by either party upon written notice, in which case
NMEM agrees to immediately return all originals and copies of this Agreement to
POA.

     5.   Place for Performance of Services.  Except as may otherwise be
          ---------------------------------
provided herein, NMEM shall perform its services under this Agreement at NMEM's
offices.  On reasonable notice from POA, and at POA's expense, NMEM shall make
NMEM Personnel available from time to time at other reasonable locations as POA
may request.

     6.   Expenses.  POA shall reimburse NMEM for the reasonable and necessary
          --------

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expenses incurred by NMEM in connection with the performance of its services
under this Agreement.

     7.   Assignability.  NMEM may not assign its rights hereunder without the
          -------------
prior written consent of POA.  POA may not assign its rights hereunder without
the prior written consent of NMEM.

     8.   Indemnification.
          ---------------

          (a)  To the fullest extent permitted by law, POA agrees to defend,
indemnify and hold NMEM, its directors, officers, employees and representatives
harmless from and against any and all damages, costs, expenses, including
reasonable attorney's fees claims or liabilities arising out of or based on
POA's failure to perform or performance under this Agreement to the extent that
such damages, costs, expenses, claims or liabilities are not caused solely by
the negligence or willful misconduct of NMEM.

          (b) To the fullest extent permitted by law, NMEM agrees to defend,
indemnify and hold POA, its partners, directors, officers, employees or
representatives harmless from and against any and all damages, costs, expenses,
including reasonable attorney's fees, claims or liabilities arising out of or
based on NMEM's failure to perform or performance under this Agreement, except
to the extent that such damages, costs, expenses, claims or liabilities are not
caused solely by the negligence or willful misconduct of  POA.

          (c) A party seeking indemnification ("Indemnitee") shall notify, by
certified mail

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return receipt requested, the party from whom indemnification is sought
("Indemnitor") promptly after discovery of any fact or circumstance on which it
could claim indemnification pursuant to this Agreement. The notice shall
describe the nature of the claim and the amount of the claim. Indemnitee shall
use its best efforts to minimize the amounts of its loss or injury for which it
shall be entitled to indemnification pursuant to this Agreement, but it shall
not be required to institute legal or other proceedings to do so. If Indemnitee
is involved in any legal action, the outcome of which could give rise to
Indemnitee seeking indemnification from Indemnitor pursuant to this Agreement,
it shall immediately notify Indemnitor in writing, and Indemnitor shall have the
right to elect to control any such legal action and proceeding through its own
counsel, although Indemnitee may, at its election, continue to participate in
any such legal action at its sole cost and expense and without any right to
indemnification for such cost and expense. If Indemnitor shall fail to assume
the defense of any such legal action, then Indemnitee may continue to defend,
through counsel of its own choice, such claim, action or suit and, in such
event, Indemnitee shall be entitled to indemnification for any such costs and
expenses (including reasonable attorneys' fees).

          (d)  No claim, action or suit for which indemnification is asserted
pursuant to this Agreement shall be settled or compromised by a party without
the prior written consent of other party hereto.

          (e)  All claims for indemnification under this Agreement shall be paid
within thirty (30) days following receipt of written demand therefor, after such
claim has been finally determined.  A claim shall be deemed to be "finally
determined" when (A) the parties have so determined by mutual agreement; or (B)
if a claim is disputed by any party to this Agreement,

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when a non-appealable final order of a court of competent jurisdiction has been
entered.

     9.   Amendment.  Any waiver, alteration or modification of any provision of
          ---------
this Agreement or cancellation or replacement of this Agreement shall not be
valid unless in writing and signed by the parties.

     10.  Notices.  Any and all notices referred to herein shall be sufficient
          -------
if furnished in writing, sent by first class mail, to the representative parties
hereto at their last known address, or other address as may be designated by
notice in accordance with this Paragraph.

     11.  Entire Agreement.  This Agreement is the sole and entire agreement by
          ----------------
and between the parties relating to its subject matter and shall, as of the date
of its execution, supersede any and all other agreements between the parties.
If any provision of this Agreement is held to be invalid, the remainder of this
Agreement shall not be affected thereby.

     12.  Governing Law.  This Agreement, having been made and duly executed
          -------------
within the State of New York, shall be construed and regulated in all respects
in accordance with and pursuant to the laws of New York.

     13.  Further Documents.  The parties hereto agree that they will at any
          -----------------
time, and from time to time, from the date hereof and upon request of the other
party, execute, acknowledge and deliver any further assignments, transfers and
conveyances and perform any further acts that may be reasonably required in
accordance with this Agreement to more fully effect the purposes set forth
herein.

     14.  Counterparts.  This Agreement may be executed in one or more
          ------------
counterparts, each of which shall be deemed to be an original hereof.

     IN WITNESS WHEREOF, the parties hereto have set their hands as of the day
and year

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first above written.

               NIAGARA MOHAWK ENERGY MARKETING, INC.

                    By: /s/ James Cifaratta
                       ------------------------------------
                       James Cifaratta, Vice President
                       Business Development

               PROJECT ORANGE ASSOCIATES LP

                    by: G.A.S. ORANGE ASSOCIATES, L.L.C., it general partner

                    by: /s/ Adam H. Victor
                       ------------------------------------
                       Adam H. Victor, President

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