Document:

UNITED STATES OF AMERICA
                                   BEFORE THE
                      FEDERAL ENERGY REGULATORY COMMISSION

In the Matter of                            )
                                            )        Docket Nos. RP94-72-009
Iroquois Gas Transmission System, L.P.      )                    FA92-59-007
                                            )                    RP97-126-015
                                            )                and RP97-126-000

                            STIPULATION AND AGREEMENT
                               (December 17, 1999)

         Pursuant to Rule 602 of the Rules of Practice and Procedure of the
Federal Energy Regulatory Commission ("Commission"), 18 C.F.R. ss. 385.602,
Iroquois Gas Transmission System, L.P. ("Iroquois") submits this Stipulation and
Agreement ("Stipulation"), representing the agreement of Iroquois, the
Commission Staff and all active participants in this proceeding. 1 This
Stipulation resolves all issues set for hearing and all issues pending judicial
review of Commission orders in the captioned dockets. The parties urge the
Commission to promptly approve this Stipulation.

------------------------
1        The active participants joining in this Stipulation are Iroquois, the
         Commission Staff, Public Service Commission of the State of New York,
         GASP Coalition, United States Department of Justice, Boston Gas
         Company, Colonial Gas Company, Essex Gas Company, Bay State Gas
         Company, Northern Utilities, Inc., Canadian Association of Petroleum
         Producers and Alberta Department of Resource Development, Connecticut
         Natural Gas Corporation, Yankee Gas Services Company, The Southern
         Connecticut Gas Company, The Brooklyn Union Gas Company and KeySpan Gas
         East Corporation, New York State Electric and Gas Corporation, Central
         Hudson Gas & Electric Corp., New Jersey Natural Gas Company, Public
         Service Electric and Gas Company, Consolidated Edison Company of New
         York, Selkirk Cogen Partners, L.P., MASSPOWER and USGen New England,
         Inc. As used in this Stipulation, the term "participant(s)" shall mean
         the above-listed active participants and the term "party" or "parties"
         shall include all parties as defined by Section 385.102(c) of the
         Commission's regulations.

<PAGE>

                        DESCRIPTION OF THESE PROCEEDINGS

Docket Nos. RP94-72-000 and FA92-59-000

         Iroquois filed its rate case in Docket No. RP94-72-000 on December 1,
1993, as Iroquois' first general rate case following the commencement of service
in December 1991. The Commission suspended Iroquois' revised rates for five
months to become effective on May 1, 1994. 2 By order issued March 23, 1994, the
Commission consolidated Iroquois' rate case with an accounting proceeding in
Docket No. FA92-59-000 and set the consolidated proceedings for hearings. 3

         The participants conducted discovery and filed prepared direct,
answering and rebuttal testimony. The participants also conducted settlement
discussions, which culminated in a March 30, 1995 settlement that resolved all
but two reserved issues. 4 The reserved issues concerned the rate and accounting
treatment of certain legal costs (included within the "Legal Defense Costs", as
defined herein in Section 2.2).

         On April 5, 1995, the Presiding Judge convened a one-day hearing to
address the two reserved issues. On July 19, 1995, the Presiding Judge issued
his initial decision ruling that: (1) the Legal Defense Costs were recoverable
in Iroquois' rates; and (2) for accounting purposes, such costs should be
treated as capital costs.5 The Commission

------------------------
2    Iroquois Gas Transmission Sys., L.P., 65 FERC P. 61,424 (1993).

3    Iroquois Gas Transmission Sys., L.P., 66 FERC P. 61,338, order on reh'g, 68
     FERC P. 61,048 (1994).

4    The Commission approved the settlement by letter order issued on June 19,
     1995. Iroquois Gas Transmission Sys., L.P., 71 FERC P. 61,358 (1995).

5    Iroquois Gas Transmission Sys., L.P., 72 FERC P. 63,004 (1995).

                                       2
<PAGE>

reversed the initial decision, and denied rehearing, by orders issued on
December 20, 1996 and March 3, 1997.6

Docket No. RP97-126-000

         On November 29, 1996, Iroquois filed in Docket No. RP97-126-000 its
second general rate case, which reduced Iroquois' general transportation rates.
By order issued on December 31, 1996, 7 the Commission, inter alia, summarily
ordered Iroquois to remove from its rate base certain Legal Defense Costs. The
Commission also permitted Iroquois' reduced rates (as further reduced for the
summary disposition of certain Legal Defense Costs) to become effective on
January 1, 1997, subject to suspension and a hearing.

         The Presiding Judge issued his initial decision on December 31, 1997. 8
On July 29, 1998, Commission issued an order affirming in part and reversing in
part the initial decision. 9 The Commission granted in part and denied in part
rehearing by order issued March 11, 1999. 10

------------------------
6    Iroquois Gas Transmission Sys., L.P., 77 FERC P. 61,288 (1996), reh'g
     denied, 78 FERCP. 61,216 (1997).

7    Iroquois Gas Transmission Sys., L.P., 77 FERC P. 61,352, at 62,538 (1996),
     order on reh'g, 80 FERCP. 61,199 (1997).

8    Iroquois Gas Transmission Sys., L.P., 81 FERC P. 63,012 (1997).

9    Iroquois Gas Transmission Sys., L.P., 84 FERC P. 61,086 (1998).

10   Iroquois Gas Transmission Sys., L.P., 86 FERC P. 61,261 (1999).

                                       3
<PAGE>

Court Appeals

         Legal Defense Costs: Iroquois filed petitions for review in the United
States Court of Appeals for the District of Columbia Circuit of: (1) the
Commission's orders in Docket Nos. RP94-72, et al., denying recovery of certain
Legal Defense Costs; and (2) the orders in Docket No. RP97-126-000 summarily
removing certain Legal Defense Costs from Iroquois's rates. Those petitions were
consolidated in D.C. Cir. Nos. 97-1276 and 97-1533. On July 21, 1998, the Court
issued a decision remanding those orders. Iroquois Gas Transmission System, L.P.
v. FERC, 145 F.3d 398 (D.C. Cir. 1998) ("Iroquois v. FERC").

         RP97-126 General Rate Issues: On May 10, 1999, in D.C. Cir. No.
99-1175, Iroquois filed a petition for review of the Commission's July 29, 1998
and March 11, 1999 orders addressing the general rate issues in Docket No.
RP97-126-000. Also on May 10, 1999, in D.C. Cir. No. 99-1177, Selkirk Cogen
Partners, L.P. and MASSPOWER filed a petition for review of those same
Commission orders. The Court consolidated those petitions. The Court also
granted the petitioners' joint motion to hold those cases in abeyance pending
the outcome of settlement discussions among the parties.

Remand Proceedings/Settlement

         On remand of Iroquois v. FERC (concerning the recovery of Legal Defense
Costs), the Commission set the matter for further hearings. 11 On July 13, 1999,
the Presiding Judge convened a prehearing conference and adopted a procedural
schedule,

------------------------
11   Iroquois Gas Transmission Sys., L.P., 87 FERC P. 61,295, clarif. granted,
     88 FERC P. 61,236 (1999).

                                       4
<PAGE>

which provided initially for an ADR (alternative dispute resolution)
process, as well as dates for testimony, discovery, and a hearing.

         The participants convened publicly-noticed settlement conferences on
August 11, September 21, October 14, and November 12, 1999. The settlement
discussions expanded to address the pending RP97-126 appeals and Iroquois'
future rates. Thus, the instant Stipulation resolves all issues in these remand
proceedings regarding Legal Defense Costs, as well as the issues on appeal in
D.C. Cir. Nos. 99-1175 and 99-1177, and matters related to Iroquois' future rate
levels. 12

         The Stipulation is based on an "incentive" framework, whereby over the
term of the Stipulation: (1) Iroquois agrees not to seek to recover or to
include in any future rate filing any Legal Defense Costs, as that term is
defined herein in Section 2.2; (2) customers will receive scheduled rate
reductions in the years 2001, 2002, and 2003; (3) there will be a moratorium on
filings under Sections 4 and 5 of the Natural Gas Act ("NGA") to otherwise
increase or reduce Iroquois' rates, subject to the limited exceptions discussed
below; and (4) Iroquois will retain any benefits of revenues associated with any
new services, volumes or facilities over said term. The participants are aware
of no opposition to the settlement.

------------------------
12       In an effort to anticipate any possible opposition to the settlement,
         the public notices of the October 14 and November 12, 1999 settlement
         conferences (issued October 8 and November 5, 1999) explained the
         expanded scope of the settlement negotiations. No one at those
         conferences expressed opposition to the settlement.

                                       5
<PAGE>

                                    ARTICLE I
                                SETTLEMENT RATES

1.1      Schedule of Settlement Rates

         Iroquois' base tariff rates 13 for existing services shall be those
rates as set forth on Appendix A ("Settlement Rates") to be effective for the
respective periods set forth thereon.

1.2      Implementation of Settlement Rates

         Within fifteen (15) days after this Stipulation becomes effective in
accordance with Article V below, Iroquois shall file a Revised Tariff Sheet No.
4 and an Original Tariff Sheet No. 4A reflecting the Settlement Rates and
Revised Tariff Sheet Nos. 5, 14, 15, 29, 30, 75B and 75C reflecting the
elimination of surcharge provisions rendered obsolete by this Stipulation, all
as set forth in the pro forma tariff sheets contained in Appendix B.

1.3      Commission Approval

         The Commission's order approving this Stipulation and making it
effective in accord with Article V below shall constitute (1) approval of the
Settlement Rates without any refund obligation and (2) all necessary authority
to place the Settlement Rates in effect for the respective periods set forth on
Appendix A.

------------------------
13       As used in this Stipulation, the term "base tariff rates" means
         Iroquois' rates for existing services, exclusive of Rate Adjustments
         for: (1) the Gas Research Institute ("GRI") surcharge, the Annual
         Charge Adjustment ("ACA") surcharge, and any other industry-wide
         surcharge or credit imposed by the Commission, except to the extent
         that the costs to be recovered by such new surcharge or credit already
         are being recovered in Iroquois' base tariff rates; (2) the Deferred
         Asset Surcharge ("DAS"); (3) the Measurement Variance/Fuel Use Factor
         ("MV/FU"); and (4) the Transportation Cost Rate Adjustment ("TCRA").

                                       6
<PAGE>

                                   ARTICLE II
                         OTHER PRINCIPLES OF SETTLEMENT

2.1      Withdrawal Of Petitions For Review

         Within 15 days after this Stipulation becomes effective in accord with
Article V below, Iroquois and Selkirk Cogen Partners, L.P. and MASSPOWER shall
file a motion to withdraw their petitions for review of the Commission's orders
of July 29, 1998, and March 11, 1999, in Docket No. RP97-126, which appeals are
pending in Case Nos. 99-1175 and 99-1177 in the United States Court of Appeals
for the District of Columbia Circuit. Pending such withdrawal, Iroquois, with
the concurrence of all of the parties to those appeals, shall continue to seek
to hold those appeals in abeyance. All Parties agree that with respect to the
Commission's Orders which are the subject of Case Nos. 99-1175 and 99-1177, no
filings will be made which would result in vacating and/or modifying, in any
manner, such underlying Commission Orders.

2.2      Legal Defense Costs

         As used herein, the term "Legal Defense Costs" shall mean those past
and future costs or expenses incurred or accrued by Iroquois, its officers,
agents, affiliates, employees, independent contractors, and consultants (a) for
attorneys, witnesses and consultants in defending the following matters or any
appeals or remands thereof, or (b) in seeking to recover from ratepayers any
such attorneys, witnesses and consultants costs or expenses incurred in
defending the following matters or any appeals or remands thereof: the criminal,
civil, and administrative enforcement actions in United States v. Iroquois
Pipeline Operating Co. (N.D.N.Y., 96-CR-166); United States v. Robert Reid
(N.D.N.Y., 96-CR-170); United States v. John Mackenzie (N.D.N.Y. 96-CR-168);
United

                                       7
<PAGE>

States v. Carl Addison (N.D.N.Y., 96-CR-167); United States v. Michael
Saley (N.D.N.Y., 96-CR-169); United States v. Louise Mango, Kenneth Austin,
Kevin Dominske, and Phenix Environmental, Inc. (N.D.N.Y., 96-CR-327; 2d. Cir.
No. 98-1215); United States v. Iroquois Pipeline Operating Co. (N.D.N.Y., Civ.
No. 96-836); United States v. Iroquois Pipeline Operating Co. (D.Conn., Civ. No.
96-926); United States v. Iroquois Pipeline Operating Co. (E.D.N.Y., Civ. No.
96-2613); United States v. Iroquois Pipeline Operating Co. (S.D.N.Y., Civ. No.
96-3909); Iroquois Pipeline Operating Co. (administrative consent decree), 75
FERC P. 61,205 (May 23, 1996); the administrative consent decree with the
Department of Transportation referred to in Paragraph 5(e) of the plea agreement
filed in N.D.N.Y., 96-CR-166; Iroquois Gas Transmission System, L.P. v. FERC
(D.C. Cir. Nos. 97-1276 and 97-1533); Iroquois Gas Transmission System, Docket
Nos. RP94-72-009, FA92-59-007, RP97-126-015 (remand proceedings). Provided,
however, said Legal Defense Costs shall not include costs or expenses incurred
or accrued in defending investigations or claims not raised against Iroquois,
its officers, agents, affiliates, employees, independent contractors, or
consultants as of the date of this Stipulation. Iroquois represents that, as of
the date of this Stipulation, Iroquois is unaware of any such investigation or
unasserted claim which may be raised against Iroquois, its officers, agents,
affiliates, employees, independent contractors, or consultants.

2.3 No Rate Recovery of Legal Defense Costs

         This Stipulation does not provide for the recovery of any Legal Defense
Costs by Iroquois or by any other party, and Iroquois agrees not to seek to
recover or include any Legal Defense Costs in any future rate filing. Iroquois
agrees that all past Legal Defense

                                       8
<PAGE>

Costs have been, or will be, either expensed, booked to a non-recoverable
account, or removed from Iroquois' books and that all Legal Defense Costs
incurred or accrued after the date of this Stipulation will be booked to Account
426.5, Other Deductions. Parties are not waiving the right to contest any legal
costs in any future proceeding.

                                   ARTICLE III
                                RATE MORATORIUM

         3.1 Except to the extent that such rate changes are specifically
provided for in this Stipulation and subject to Section 3.2 below, (1) Iroquois
shall not file pursuant to NGA Section 4 prior to January 1, 2004, to increase
the Settlement Rates; (2) no party (or its successors or assigns) shall seek
pursuant to NGA Section 5 prior to April 1, 2003, to reduce the Settlement
Rates; and (3) no party (or its successors or assigns) will receive any
reduction in the Settlement Rates pursuant to NGA Section 5 prior to January 1,
2004.

         3.2 Specifically excepted from the moratorium on changes to the
Settlement Rates provided for in this Article III are the following:

          1.   any filing to track costs under the Rate Adjustments specified in
               footnote 13;

          2.   any filing to revise the terms and conditions of Iroquois'
               tariff, provided such revision makes no change to the Settlement
               Rates and/or provided such revision does not degrade existing
               firm service as currently specified in Iroquois' Rate Schedule
               RTS;

          3.   any filing for new facilities, services, or rate schedules,
               provided that: (i) no change in the Settlement Rates will result
               during the term of this

                                       9
<PAGE>

               Stipulation as defined in Article IV herein; (ii) parties are not
               precluded from objecting to and/or challenging any proposed rate
               design or rate level and/or future rate treatment of such new
               facilities, services, or rate schedules; and/or (iii) such new
               facilities, services, or rate schedules do not degrade existing
               firm service as currently specified in Iroquois' Rate Schedule
               RTS;

          4.   to the extent allowed by the Commission, any limited filing by
               Iroquois or any other party to raise or remove the maximum rate
               ceiling for secondary market services (i.e., capacity release,
               interruptible or short-term firm services), provided that such
               filing shall not change the Settlement Rates for long-term firm
               services.

Provided, however, the parties reserve their rights to oppose any such filing
permitted by this Section 3.2 on any grounds except to the extent inconsistent
with this Stipulation.

         3.3 Any revenues during the term of this Stipulation associated with
any new volumes, facilities, services, or classes of service which are added
after November 1, 1999, shall be retained by Iroquois and shall not be shared
with, or credited to, Iroquois' customers.

                                   ARTICLE IV
                                      TERM

         This Stipulation, upon becoming effective pursuant to Article V below,
shall be effective for a term beginning on November 1, 1999, and terminating on
the earliest of the date on which new rates become effective (other than as
provided for in Section 3.2 above) pursuant to (i) a superseding general rate
change filing under NGA Section 4

                                       10
<PAGE>

made in accordance with this Stipulation, or (ii) a modification of any of
Iroquois' base tariff rates, on or after January 1, 2004, in a proceeding
instituted by the Commission or any other entity pursuant to NGA Section 5;
provided, however, that Article II and Article VIII will survive and will not be
terminated under the above provision.

                                   ARTICLE V
                                 EFFECTIVENESS

         This Stipulation shall become binding and effective on all parties on
the date that this Stipulation has been approved by a final Commission order as
to all its terms without modification, reservation or condition, or with
modification(s), reservation(s) or condition(s) that are acceptable pursuant to
Article VII. While the participants know of no opposition to this Stipulation,
in the event this Stipulation is opposed, it is the intent of the participants
that the Commission approve this Stipulation and allow its effectiveness for all
Non-Contesting Parties. Approval of this Stipulation in accordance with its
terms shall constitute all Commission authority necessary for Iroquois to revise
its tariff in order to place into effect the Settlement Rates and shall
constitute the final disposition of all issues in these proceedings.

                                   ARTICLE VI
                                     WAIVER

         Approval of this Stipulation shall constitute any and all waivers of
the Commission's rules and regulations that may be necessary to effectuate the
Stipulation in accordance with all of its terms.

                                       11
<PAGE>

                                  ARTICLE VII
                                NONSEVERABILITY

         The various provisions of this Stipulation are not severable, and shall
not become operative unless and until the Commission issues a final order
approving this Stipulation as to all of its terms and conditions without
modification, reservation or condition, or with modification(s), reservation(s)
or condition(s) acceptable to all Non-Contesting Parties.14 Any Non-Contesting
Party that files initial comments supporting the Stipulation or that files no
comments in opposition may not thereafter withdraw its support for the
Stipulation except as specifically provided by this Article VII.

         Should the Commission modify, reserve or condition this Stipulation in
a manner that is materially adverse to a Non-Contesting Party, then it shall be
deemed to have accepted such modification(s), reservation(s) or condition(s)
unless, by written notice filed with the Commission and served on all parties no
later than 14 days after issuance of a final Commission order acting on the
Stipulation, such party states its refusal to accept such modification,
reservation or condition. Should a Non-Contesting Party so state its refusal to
accept the Stipulation as modified, reserved or conditioned by the Commission,
it shall confer with the other Non-Contesting Parties to attempt to resolve said
refusal.

------------------------
14   "Non-Contesting Parties" are those participants that either support or do
     not oppose this Stipulation. Any party suggesting or requesting in any
     manner a modification, reservation or condition to this Stipulation as
     originally filed shall not be a Non-Contesting Party regardless of whether
     such party characterizes its comments as being in support of the
     Stipulation. The provisions of this Article VII shall be subject to waiver
     only by the unanimous agreement of the Non-Contesting Parties.

                                       12
<PAGE>

Unless said refusal is withdrawn within 14 days after notice of such refusal,
this Stipulation shall be null and void for all parties.

                                  ARTICLE VIII
                          RESERVATIONS AND CONDITIONS

         This Stipulation is submitted pursuant to Rule 602 of the Commission's
Rules of Practice and Procedure, 18 C.F.R. ss. 385.602, and, unless it becomes
effective in accord with Article V, shall be privileged and shall not be
admissible in evidence or in any way described or discussed in any proceeding.

         Except for those matters specifically addressed by this Stipulation,
the Participants to this Stipulation shall have the same rights under the NGA
that they would have had absent approval of this Stipulation.

         This Stipulation represents a negotiated settlement in the public
interest with respect to the specific matters referred to herein for the sole
purpose of the settlement of the matters agreed to in this Stipulation. The
Commission's approval of this Stipulation shall constitute a finding that the
Stipulation is fair and reasonable and in the public interest for purposes of
settlement, but shall not be a determination on the merits of the specific
provisions of the Stipulation, either jointly or severally. Neither Iroquois,
the Commission, its Staff, nor any other party or person shall be prejudiced or
bound by this Stipulation in any other proceeding, except as specifically
provided in this Stipulation. Neither Iroquois, the Commission, its Staff, nor
any other participant or person shall be deemed to have approved, accepted,
agreed or consented to any concept, theory or principle underlying or supposed
to underlie any of the matters provided for in this Stipulation.

                                       13
<PAGE>

         The provisions of this Stipulation relate only to the specific matters
referred to in this Stipulation and no party or person waives any claim or right
which it otherwise may have with respect to any matters not expressly provided
for in this Stipulation. Nothing in this Stipulation shall preclude Iroquois
from filing changes in its FERC Gas Tariff which are not inconsistent with its
specific obligations under this Stipulation, and nothing in this Stipulation
shall preclude any party or person from protesting such changes or from seeking
rehearing or a stay of or appealing any adverse Commission order relating to
such changes.

         The resolution of any matter in this Stipulation shall not be deemed to
be a "settled practice" as that term was interpreted and applied in Public
Service Commission of the State of New York v. FERC, 642 F.2d 1335 (D.C. Cir.
1980), and shall not be the basis for any decision with regard to the burden of
proof in any litigation with regard to any such matter.

                                       14
<PAGE>

                                     NOTICE

                            UNITED STATES OF AMERICA
                      FEDERAL ENERGY REGULATORY COMMISSION

In the Matter of                        )
                                        )    Docket Nos. RP94-72-009
Iroquois Gas Transmission System, L.P.  )                FA92-59-007
                                        )                RP97-126-015
                                        )            and RP97-126-000

                        NOTICE OF OFFER OF SETTLEMENT AND
                              REVISED TARIFF SHEETS

         Take notice that on December 17, 1999, Iroquois Gas Transmission
System, L.P. ("Iroquois") filed an offer of settlement in the form of a
Stipulation and Agreement ("Stipulation"), which would resolve all issues in
these proceedings. As part of the Stipulation, Iroquois tendered for filing the
following revised tariff sheets:

                       Twenty-Seventh Revised Sheet No. 4
                       Original Sheet No. 4A
                       Ninth Revised Sheet No. 5
                       Fourth Revised Sheet No. 14
                       Fourth Revised Sheet No. 15
                       Fourth Revised Sheet No. 29
                       Fifth Revised Sheet No. 30
                       Second Revised Sheet No. 75B
                       Third Revised Sheet No. 75C

         The Stipulation resolves: issues regarding the recovery of certain
legal defense costs on remand of Iroquois v. FERC, 145 F.3d 398 (D,C. Cir.
1998); rate case issues from Docket No. RP97-126-000 that are pending appeal in
D.C. Cir. Nos. 99-1175 and 99-1177; and future rate level changes through the
year 2003 and a moratorium on rate changes other than those provided for in the
Stipulation. The Stipulation is supported by Iroquois, the Commission Staff and
all active participants to these proceedings.

         Pursuant to 18 C.F.R. ss. 385.602(f)(2), comments regarding the
Stipulation are due 20 days after this filing, i.e., on January 6, 2000, and
reply comments are due 30 days after this filing, i.e., on January 18, 2000.

         Any person desiring to protest this filing should file a protest with
the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington,
D.C. 20426, in accordance with Section 385.211 of the Commission's Rules and
Regulations. All such protests must be filed as provided in Section 154.210 of
the Commission's Regulations. Protests will be considered by the Commission in
determining the appropriate action to

<PAGE>

be taken, but will not serve to make protestants parties to the proceedings.
Copies of this filing are on file with the Commission and are available for
public inspection in the Public Reference Room. This filing may be viewed on the
web at http://www.ferc.fed.us/online/rims.htm (call 202-208-2222 for
assistance).

                                       2
<PAGE>

                       LETTER ORDER APPROVING SETTLEMENT

                      FEDERAL ENERGY REGULATORY COMMISSION
                             Washington, D.C. 20426

                    (Letter Order Issued ____________, 2000)

Iroquois Gas Transmission System, L.P.
One Corporate Drive, Suite 600
Shelton, CT 06484-6211

Attn: Jeffrey A. Bruner,
      Vice President, General Counsel & Secretary

Reference: Docket Nos. RP94-72-009, FA92-59-007, RP97-126-015, RP97-126-000
           Offer of Settlement and Revised Tariff Sheets

Ladies and Gentlemen:

         On December 17, 1999, Iroquois Gas Transmission System, L.P.
("Iroquois") filed an offer of settlement in the form of a Stipulation and
Agreement ("Stipulation"), which resolves all issues in these proceedings. As
part of the Stipulation, Iroquois filed the following revised tariff sheets:

                       Twenty-Seventh Revised Sheet No. 4
                       Original Sheet No. 4A
                       Ninth Revised Sheet No. 5
                       Fourth Revised Sheet No. 14
                       Fourth Revised Sheet No. 15
                       Fourth Revised Sheet No. 29
                       Fifth Revised Sheet No. 30
                       Second Revised Sheet No. 75B
                       Third Revised Sheet No. 75C

         The Stipulation resolves: issues regarding the recovery of certain
legal defense costs on remand of Iroquois v. FERC, 145 F.3d 398 (D.C. Cir.
1998); rate case issues from Docket No. RP97-126-000 that are pending appeal in
D.C. Cir. Nos. 99-1175 and 99-1177; and future rate level changes through the
year 2003 and a moratorium on rate changes other than those provided for in the
Stipulation. The Stipulation is supported by Iroquois, the Commission Staff and
all active participants to these proceedings.

         The Commission has reviewed the Stipulation and accompanying tariff
sheets. Pursuant to Rule 602(g), the Commission finds that the Stipulation is
fair and reasonable and in the public interest. Accordingly, the Commission
approves the Stipulation and accepts the revised tariff sheets to become
effective in accordance with the Stipulation.

<PAGE>

         This order constitutes final agency action. Requests for rehearing by
the Commission may be filed within 30 days of the date of issuance of this
order, pursuant to 18 C.F.R. ss. 385.713.

                                        By the Commission

cc:  All Parties
     Public Files

<PAGE>

                             CERTIFICATE OF SERVICE

         I hereby certify that I have this day served the foregoing documents
upon each person designated on the official service lists compiled by the
Secretary in these proceedings and on all persons entitled to service of the
filings that initiated these proceedings.

         Dated at Washington, D.C. this 17th day of December, 1999.

                                                --------------------------------
                                                Joseph S. Koury

                                                WRIGHT & TALISMAN, P.C.
                                                1200 G Street, N.W., Suite 600
                                                Washington, D.C. 20005
                                                (202) 393-1200

Of Counsel for

Iroquois Gas Transmission System, L.P.

<PAGE>

                                   APPENDIX A

                                SETTLEMENT RATES

<TABLE>
<CAPTION>

                                                                    RP94-072/RP97-126
[LOGO]        IROQUOIS
      GAS TRANSMISSION SYSTEM                                    SCHEDULE OF SETTLEMENT RATES
      ------------------------
      IROUOIS PIPELINE COMPANY
                     OPERATING COMPANY, OPERATOR

          DEMAND CHARGES:                        Incremental Stepdowns                         Cumulative Stepdowns
------------------------------------ ---------------------------------------------- -------------------------------------------
          EFFECTIVE DATES                Zone 1         Zone 2       Interzone         Zone 1         Zone 2       Interzone
------------------------------------ -------------- ---------------- -------------- -------------- ------------- --------------
<S>                                  <C>            <C>              <C>            <C>            <C>           <C>
1/1/2000 - 12/31/2000                $         -    $         -      $         -    $         -    $         -   $         -
                                     -------------- ---------------- -------------- -------------- ------------- --------------
1/1/2001 - 12/31/2001                $  (0.1947)    $  (0.0973)      $  (0.2920)    $  (0.1947)    $  (0.0973)   $  (0.2920)
                                     -------------- ---------------- -------------- -------------- ------------- --------------
1/2/2002- 12/31/2002                 $  (0.4867)    $  (0.2433)      $  (0.7300)    $  (0.6813)    $  (0.3407)   $  (1.0220)
                                     -------------- ---------------- -------------- -------------- ------------- --------------
1/1/2003 -                           $  (0.2920)    $  (0.1460)      $  (0.4380)    $  (0.9733)    $  (0.4867)   $  (1.4600)
------------------------------------ -------------- ---------------- -------------- -------------- ------------- --------------

------------------------------------ ---------------------------------------------- -------------------------------------------
          COMMODITY CHARGES:                     Incremental Stepdowns                         Cumulative Stepdowns
------------------------------------ ---------------------------------------------- -------------------------------------------
          EFFECTIVE DATES                Zone 1         Zone 2       Interzone         Zone 1         Zone 2       Interzone
------------------------------------ -------------- ---------------- -------------- -------------- ------------- --------------
1/1/2000 - 12/31/2000                $         -    $         -      $         -    $         -    $         -   $         -
                                     -------------- ---------------- -------------- -------------- ------------- --------------
1/1/2001 - 12/31/2001                $         -    $         -      $         -    $         -    $         -   $         -
                                     -------------- ---------------- -------------- -------------- ------------- --------------
1/1/2002- 12/31/2002                 $         -    $         -      $         -    $         -    $         -   $         -
                                     -------------- ---------------- -------------- -------------- ------------- --------------
1/1/2003 -                           $         -    $         -      $         -    $         -    $         -   $         -
------------------------------------ -------------- ---------------- -------------- -------------- ------------- --------------

------------------------------------ ---------------------------------------------- -------------------------------------------
      100% LOAD FACTOR RATES                     Incremental Stepdowns                         Cumulative Stepdowns
------------------------------------ ---------------------------------------------- -------------------------------------------
          EFFECTIVE DATES                Zone 1         Zone 2       Interzone         Zone 1         Zone 2       Interzone
------------------------------------ -------------- ---------------- -------------- -------------- ------------- --------------
1/1/2000 - 12/31/2000                $         -    $         -      $         -    $         -    $         -   $         -
                                     -------------- ---------------- -------------- -------------- ------------- --------------
1/1/2001 - 12/31/2001                $  (0.0064)    $  (0.0032)      $  (0.0096)    $  (0.0064)    $  (0.0032)   $  (0.0096)
                                     -------------- ---------------- -------------- -------------- ------------- --------------
1/1/2002- 12/31/2002                 $  (0.0160)    $  (0.0080)      $  (0.0240)    $  (0.0224)    $  (0.0112)   $  (0.0336)
                                     -------------- ---------------- -------------- -------------- ------------- --------------
1/1/2003 -                           $  (0.0096)    $  (0.0048)      $  (0.0144)    $  (0.0320)    $  (0.0160)   $  (0.0480)
------------------------------------ -------------- ---------------- -------------- -------------- ------------- --------------

</TABLE>

<TABLE>
<CAPTION>
                                                             Privileged
                                                                and
                                                            Confidential
                                                     (For Settlement Purposes)
                                         --------------------------------------------

          DEMAND CHARGES:                              Effective Rates
------------------------------------     --------------------------------------------
          EFFECTIVE DATES                Zone 1     Zone 2    Interzone    Zone 1 MFV
------------------------------------     --------- ---------- ----------- -----------
<S>                                      <C>       <C>        <C>         <C>
1/1/2000 - 12/31/2000                    $ 8.5370  $ 6.9843   $ 14.1750   $ 5.9892
                                         --------- ---------- ----------- -----------
1/1/2001 - 12/31/2001                    $ 8.3423  $ 6.8870   $ 13.8830   $ 5.8635
                                         --------- ---------- ----------- -----------
1/1/2002- 12/31/2002                     $ 7.8557  $ 6.6436   $ 13.1530   $ 5.5493
                                         --------- ---------- ----------- -----------
1/1/2003 -                               $ 7.5637  $ 6.4976   $ 12.7150   $ 5.3607
------------------------------------     --------- ---------- ----------- -----------

------------------------------------     --------------------------------------------
          COMMODITY CHARGES:                           Effective Rates
------------------------------------     --------------------------------------------
          EFFECTIVE DATES                Zone 1     Zone 2    Interzone    Zone 1 MFV
------------------------------------     --------- ---------- ----------- -----------
1/1/2000 - 12/31/2000                    $ 0.0030  $ 0.0024   $ 0.0054    $ 0.1754
                                         --------- ---------- ----------- -----------
1/1/2001 - 12/31/2001                    $ 0.0030  $ 0.0024   $ 0.0054    $ 0.1688
                                         --------- ---------- ----------- -----------
1/1/2002- 12/31/2002                     $ 0.0030  $ 0.0024   $ 0.0054    $ 0.1575
                                         --------- ---------- ----------- -----------
1/1/2003 -                               $ 0.0030  $ 0.0024   $ 0.0054    $ 0.1506
------------------------------------     --------- ---------- ----------- -----------

------------------------------------     --------------------------------------------
      100% LOAD FACTOR RATES                           Effective Rates
------------------------------------     --------------------------------------------
          EFFECTIVE DATES                Zone 1     Zone 2    Interzone    Zone 1 MFV
------------------------------------     --------- ---------- ----------- -----------
1/1/2000 - 12/31/2000                    $ 0.2837  $ 0.2320   $ 0.4714    $ 0.3723
                                         --------- ---------- ----------- -----------
1/1/2001 - 12/31/2001                    $ 0.2773  $ 0.2288   $ 0.4618    $ 0.3616
                                         --------- ---------- ----------- -----------
1/1/2002- 12/31/2002                     $ 0.2613  $ 0.2208   $ 0.4378    $ 0.3399
                                         --------- ---------- ----------- -----------
1/1/2003 -                               $ 0.2517  $ 0.2160   $ 0.4234    $ 0.3268
------------------------------------     --------- ---------- ----------- -----------

</TABLE>

<PAGE>

                                   APPENDIX B

                             REVISED TARIFF SHEETS

                   (See the following Sheets of Exhibit 10.4)

                      o Twenty-Seventh Revised Sheet No. 4
                      o Original Sheet No. 4A
                      o Ninth Revised Sheet No. 5
                      o Fourth Revised Sheet No. 14
                      o Fourth Revised Sheet No. 15
                      o Fourth Revised Sheet No. 29
                      o Fifth Revised Sheet No. 30
                      o Second Revised Sheet No. 75B
                      o Third Revised Sheet No. 75CIROQUOIS GAS TRANSMISSION SYSTEM
                   SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
                                FOR CRAIG R. FREW

         THIS AGREEMENT is made and entered into as of the first day of July,
1997, between IROQUOIS GAS TRANSMISSION LIMITED PARTNERSHIP (the "Company") and
CRAIG R. FREW (Mr. Frew).

         WHEREAS, Mr. Frew is currently serving as President of Iroquois
Pipeline Operating Company ("IPOC"); and

         WHEREAS, the Company highly values the efforts, abilities and
accomplishments of Mr. Frew and desires that he remain in his current position
with IPOC; and

         WHEREAS, in order for Mr. Frew to continue to serve as President of
IPOC, it is necessary for him to terminate his employment with TransCanada
Pipelines, Ltd. ("TransCanada");

         WHEREAS, in order to induce Mr. Frew to continue in his position as
President of IPOC and to relinquish his employment with TransCanada, the
Management Committee of the Company wishes to enter into an unfunded deferred
compensation arrangement upon the terms and conditions hereinafter stated, to
ensure that Mr. Frew will be provided with retirement benefits, from all
qualified and non-qualified sources, that are at least equal in value to those
benefits he would have been entitled to had he remained employed by
TransCanada.

         WHEREAS, Mr. Frew wishes to provide for his retirement and financial
security, and the Management Committee of the Company has approved and
authorized the entry into this Agreement with Mr. Frew.

         NOW THEREFORE, the parties agree as follows:

         1. Retirement Upon Reaching Normal Retirement Date. Mr. Frew shall be
entitled to retire and commence receiving benefits under this Agreement upon
attaining his sixtieth (60th) birthday (his "Normal Retirement Date").

         2. Normal Retirement Benefits. Upon retiring from active service with
IPOC on or after his Normal Retirement Date as defined in this Agreement, Mr.
Frew shall be entitled to receive, beginning on the first day of the month
immediately following Mr. Frew's retirement, and on the first day of each month
thereafter for his life, an amount calculated as a single life annuity payable
at his Normal Retirement Date (or, if later, his actual retirement date), equal
to one-twelfth (1/12) of (a) minus (b):

            (a) Sixty Percent (60%) of his Final Average Earnings (as
     hereinafter defined),

            (b) reduced by the sum of the following:

<PAGE>

               (i) Mr. Frew's accrued benefit based upon credited service
          calculated through June 30, 1997 (i.e., 17.75 years), which would be
          payable to him from the TransCanada Pipelines Limited Executive
          Supplemental Retirement Benefits Plan (the "TransCanada SERP") as of
          his actual retirement date, regardless whether he actually commences
          receiving such accrued benefit, calculated in the form of a single
          life annuity, in accordance with the terms of the TransCanada SERP,
          with such SERP benefit being calculated assuming that the terms of the
          TransCanada SERP provided for an unreduced retirement benefit at age
          60 instead of age 65 or, if earlier, when the sum of his age and
          service equal at least 85; plus

               (ii) Mr. Frew's accrued benefit based on credited service through
          June 30, 1997, which would be payable to him from the Pension Plan for
          Employees of TransCanada Pipelines Limited and Designated or
          Associated, Subsidiary or Affiliated Companies (the "TransCanada
          Registered Pension Plan") as of his actual retirement date, regardless
          whether he actually commences receiving such accrued benefit on such
          date, calculated in the form of a single life annuity, in accordance
          with the terms of the TransCanada Registered Pension Plan and using
          the conversion factors specified therein; plus

               (iii) Mr. Frew's accrued benefit which would be payable to him
          from the Iroquois Pipeline Operating Company Cash Balance Retirement
          Plan (the "Iroquois Qualified Pension Plan" or "IPOC Cash Balance
          Plan") as of his actual retirement date, regardless whether he
          actually commences receiving such accrued benefit, calculated in the
          form of a single life annuity in accordance with the terms of the
          Iroquois Qualified Pension Plan; plus

               (iv) Mr. Frew's supplementary pension benefit which would be
          payable to him from the Iroquois Pipeline Operating Company
          Supplementary Pension Plan based on his Credited Service as of actual
          retirement date (his "IPOC Supplementary Pension Benefit"), regardless
          whether he actually commences receiving such accrued benefit,
          calculated in the form of a single life annuity; plus

               (v) Mr. Frew's 401(k) Employer Contribution Account, which
          Account is calculated to be the Actuarially Equivalent life annuity
          value of an Employer contribution equal to 100% of his salary
          reduction contributions up to five percent (5%) of his base annual
          salary for each year of his participation in the Iroquois Pipeline
          Operating Company Savings Plan and Supplemental Savings Plan (the
          "IPOC 401(k) Plan"), plus the Actuarially Equivalent value of any
          discretionary contributions that may be made on his behalf under the
          IPOC 401(k) Plan, together with interest and earnings actually
          accumulated on such account as of Mr. Frew's actual retirement date;
          plus the Actuarial Equivalent of Mr. Frew's age 62 Primary
          monthly Social Security Benefit based upon Mr. Frew's actual age as of
          the determination of his Accrued Benefit. In the event that Mr. Frew
          terminates service later than age 62, the Actuarial Equivalent of Mr.
          Frew's Primary monthly Social Security benefit payable at his actual
          retirement date shall be used.

                                       2
                                     <PAGE>

               In calculating the benefit to which Mr. Frew is entitled under
          this Agreement, the methodology specified in the Iroquois Gas
          Transmission System Proposed SERF Sample Benefit Illustrations, which
          are attached hereto as Exhibit A, shall be followed.

          (c) For purposes of converting Canadian dollars to U.S. dollars in
     determining the amount of the offsets specified in (i) and (ii)above, the
     exchange rate shall be the rate as announced by Citbank N.A. in effect on
     the last business day prior to the actual retirement of Mr. Frew.

          (d) In calculating the benefit to which Mr. Frew is entitled under
     this Agreement, the following definitions shall have the following
     meanings:

          "Actuarial Equivalence" shall mean

               (a) for purposes of calculating the offsets specified in
          Paragraph 2(b)(iii)-(vi), shall mean a benefit of equivalent current
          value to the benefit to which it is being compared, determined on the
          basis of the definition of "Actuarial Equivalence" contained in the
          IPOC Cash Balance Plan, as those factors may be amended from time to
          time. As of July 1, 1997, the following factors were used:

          (1) the 1983 Group Annuity Mortality Table blended by 50% of the Male
Table and 50% of the Female Table (the "Applicable Mortality Table"); and

          (2) the annual rate of interest on the 30 Year Treasury Bond for the
third month which precedes the commencement of the year containing the
benefit commencement date under this Agreement, for purposes of calculating
lump sums (including the lump sum value of a commuted death benefit); and

          (3) for purposes of converting benefits (including death benefits)
into equivalent forms (other than a lump sum), the Applicable Mortality
Table specified in (1) above in combination with an eight percent (8%)
interest rate; and

               (b) for purposes of calculating the offsets specified in
          Paragraph 2(b)(i)-(ii), the factors for determining actuarial
          equivalence specified in the plan referred to in (b)(i) and (ii) or,
          in the absence of such factors, the definition of Actuarial
          Equivalence specified in (a) above; and

          "Credited Service" for purposes of calculating Mr. Frew's IPOC
          Supplementary Pension Plan Benefit and the benefit under this
          Agreement, Credited Service shall include Mr. Frew's aggregate years
          of employment with IPOC, the Company and TransCanada. Credited Service
          for purposes of determining offsets specified in Paragraph 2(b) hereof
          shall be determined in accordance with the definitions contained in
          the specific benefit plan which is the subject of the offset.

          "Final Average Earnings" shall mean the average of the three highest
          consecutive calendar years of Earnings with IPOC. "Earnings" shall
          mean Mr. Frew's annual base salary, plus the actual annual incentive
          bonus payment paid with respect to a

                                      3
<PAGE>

          calendar year. Final Average Earnings and Earnings shall be calculated
          without regard to the dollar limitations imposed by Section 401(a)(17)
          of the Internal Revenue Code.

          "Primary Social Security Benefit" shall mean (i) Mr. Frew's actual
          Social Security Benefit, he provides evidence of that amount to the
          Company or, in the absence of such amount, (ii) the estimated annual
          amount of benefit under Title II of the Social Security Act that Mr.
          Frew would be entitled to receive as of age 62 (or, his actual
          retirement date, if later), whether or not he applies for or actually
          receives such benefit. For purposes of this Agreement, such estimated
          amount shall be determined on the following basis:

     (1)  the Social Security Act in effect on Mr. Frew's termination of
employment;

     (2)  the rate of past wage increases equal to the rate in increases in the
average national wage as reported by the Social Security Administration;

     (3)  assuming no wages for the period following Mr. Frew's termination of
employment; and

     (4)  assuming no change in the Primary Social Security Benefit amount
occurs after Mr. Frew's termination of employment.

     3.   Early Retirement Benefit. Mr. Frew shall be entitled to retire from
active service with IPOC as of the first day of any month on or after reaching
age fifty-five (55) (his "Early Retirement Date") and shall be entitled to
receive an immediate supplemental pension under this Agreement calculated in the
manner provided in Paragraph 2 above, except that

          (a) the 60% figure provided for in Paragraph 2 above shall be prorated
     by multiplying it by a fraction, the numerator of which is Mr. Frew's
     credited service as of his actual early retirement date, and the
     denominator of which is his credited service had he remained employed by
     IPOC until age 60; and

          (b) the benefit derived under Paragraph 2 shall be further reduced by
     three percent (3%) for each year from ages year from ages 55 through 59, by
     which Mr. Frew's benefit commencement date precedes his Normal Retirement
     Date as defined in this Agreement.

     4.   Benefits Subject to a Substantial Risk of Forfeiture. Mr. Frew shall
be vested in his Accrued Benefit under this Agreement as of July 1, 2002. No
benefits shall be payable if Mr. Frew terminates employment for any reason,
including death, prior to having become vested in his Accrued Benefit.

     5.   Payment of Benefits Upon Termination of Service. If Mr. Frew
terminates service with a vested Accrued Benefit under this Agreement prior to
reaching age fifty-five (55), he may commence payment of his vested Accrued
Benefit under this Agreement, calculated in accordance with Paragraph 2, at any
time on or after having reached age fifty-five (55), provided, however, that:

                                       4

<PAGE>

          (a) the 60% figure provided for in Paragraph 2 above shall be prorated
     by multiplying it by a fraction, the numerator of which is Mr. Frew's
     Credited Service as of his actual termination of service, and the
     denominator of which is the Credited Service he would have had had he
     remained employed until age 60; and

          (b) the benefit derived under Paragraph 2 shall be further reduced by
     five percent (5%) for each year from ages year from ages 55 through 59, by
     which Mr. Frew's benefit commencement date precedes age sixty (60).

     6.   Timing and Forms of Benefit Payment.

          (a) Normal Form of Benefit Payment. The normal form of benefit payment
     under this Agreement shall be an annuity for the life of Mr. Frew.

          (b) Actuarially Equivalent Optional Forms. At least twelve full months
     prior to the commencement of his benefits under this Agreement, Mr. Frew
     may elect to retire and commence benefits under this Agreement in one of
     the following Actuarially Equivalent forms of benefit payments:

          (i) a joint and sixty percent (60%) survivor annuitant with his spouse
     as the joint annuitant; and

          (ii) a joint and fifty percent (50%) survivor annuitant with his
     spouse as the joint annuitant; and

          (iii) a life and ten (10) year certain form of benefit payment with
     his spouse or other Beneficiary.

          (c) Timing of Election of Optional Forms and Commencement Date. At
     least twelve months prior to the date on which benefits otherwise would
     commence hereunder, Mr. Frew may elect to change the commencement date of
     his benefits or elect an Actuarially Equivalent form of benefit payment;
     provided, however, that no election as to the timing of commencement of
     benefits under this Agreement, or the form of benefit payments hereunder,
     shall be given effect if such election is made by Mr. Frew within twelve
     months of his retirement or termination of service from IPOC.

     7. Death Benefits.

     (a) If Mr. Frew had no vested interest in his Accrued Benefit as of his
death, no death benefit shall be payable under this Agreement.

     (b) If Mr. Frew dies after having commenced benefits under this Agreement,
then a death benefit shall be payable to his Spouse or other Beneficiary only if
the form of payment in force for Mr. Frew under this Agreement provides for such
a death benefit.

     (c) If Mr. Frew had a nonforfeitable right to his Accrued Benefit under
this Agreement and dies while employed by IPOC prior to benefit commencement,
then a monthly death benefit shall be payable to his Spouse for her life in an
amount equal to sixty percent

                                       5

<PAGE>
(60%) of the benefit to which Mr. Frew would have been entitled had he retired
or terminated service, survived to the earliest date on which he could commence
benefits under this Agreement, and then commenced benefit payments immediately
before his death. In the sole discretion of the Company, the Actuarially
Equivalent present value of this monthly amount may be paid in a lump sum to Mr.
Frew's surviving spouse as soon as administratively feasible following Mr.
Frew's death.

     (d) Mr. Frew's Spouse shall be his Beneficiary under this Agreement. With
his Spouse's consent, Mr. Frew may designate another Beneficiary to receive
payments in the form of a life and ten year certain form of benefit payment in
accordance with Paragraph 6(c). In such event, Mr. Frew shall file with the
Company a written designation of a Beneficiary on such form as may be prescribed
by the Company. If Mr. Frew fails to designate a Beneficiary or if a
Participant's designation of Beneficiary fails for any reason, then the
Beneficiary or Beneficiaries designated by Mr. Frew, or deemed to have been
designated by Mr. Frew under the Qualified Plan shall be deemed to be the
Participant's Beneficiary.

     8. Unfunded Benefits. The benefits under this Agreement shall be unfunded
and all benefit payments shall be made from the general assets of the Company.
The right of Mr. Frew or his Spouse or other Beneficiary to receive benefits
under this Agreement shall be an unsecured claim against the general assets of
the Company. All benefits accrued under this Agreement shall remain the property
of the Company until paid to Mr. Frew or his spouse or other Beneficiary and
shall be subject only to the claims of the Company's general creditors. The
Company may in its discretion set aside assets, purchase insurance contracts,
and the like to provide a source of funds that the Company may use, in its
discretion, to make payments that become due under the Agreement, however, any
amounts set aside shall remain the general assets of the Company subject to the
claims of the general creditors of the Company.

          (a) Provisions for Rabbi Trust. Notwithstanding the provisions of
     Paragraph 8, the Company may, in its discretion, enter into a trust
     agreement known as a "Rabbi Trust", whereby it contributes to the trust,
     from time to time, such amounts as may be approved by the Management
     Committee of the Company for the purposes of providing benefits under this
     Agreement. The Trust Agreement shall be substantially in the form of the
     model trust agreement set forth in Internal Revenue Procedure 92-64, as
     that may be modified or revised from time to time, and shall include
     provisions that all of the assets of the Trust shall be subject to the
     creditors of the Company in the event of insolvency.

          9.   Administration of this Agreement. The Management Committee of the
Company is appointed to administer the terms of this Agreement. The Committee
shall have the absolute authority and discretion:

               (a) to determine the benefits payable under the Plan;

               (b) to interpret the Agreement, and to decide all matters arising
          under it, including the right to remedy possible ambiguities,
          inconsistencies, and omissions;

                                       6

<PAGE>

               (c) to employ actuaries, attorneys, accountants, and other agents
          and advisors, and to delegate to such persons, and any additional
          persons, such powers and responsibilities as it deems appropriate;

               (d) to establish the basis for actuarial calculations made
          pursuant to the Agreement;

               (e) to direct the Company to make appropriate financial
          arrangements to facilitate the Company's satisfaction of its
          obligations hereunder;

               (f) to delegate allocate the administrative responsibilities as
          they deem appropriate; and

               (g) to maintain all necessary records for the administration of
          the Agreement, and file and distribute all reports that may be
          required by the Internal Revenue Service, Department of Labor, or
          others as required by law.

     10.  Benefit Upon a Change of Control.

     (a)  Lump Sum Payment Upon a Change of Control. Notwithstanding any other
provision of the Agreement, upon a Change in Control, Mr. Frew shall
automatically be paid a lump sum amount in cash by the Company which, together
with the payment, if any, under a Rabbi or other trust arrangement established
by the Company to make payments hereunder in the event of a Change in Control,
would provide Mr. Frew with the same benefit as he would have received under
this Agreement if he terminated service upon the date of the Change of Control,
based on the benefits accrued to the Mr. Frew hereunder as of the date of the
Change in Control. Payment under this Paragraph shall not in and of itself
terminate the Agreement, but such payment shall be taken into account in
calculating benefits under the Agreement which may otherwise become due
thereafter.

     (b)  No Divestment Upon a Change of Control. In no event shall a Change of
Control deprive Mr. Frew of, or adversely affect his right to, any benefit
accrued under this Agreement.

     (c)  Change of Control Define. For purposes of the Agreement, a "Change in
Control" shall be deemed to have occurred if:

          (i) a person, partnership, joint venture, corporation or other entity,
     or two or more of any of the foregoing acting as a group (or a `person'
     within the meaning of Sections 13(d)(3) and 14(d)(2) of the Securities
     Exchange Act of 1934, as amended (the "Act"), other than the Company, a
     majority-owned subsidiary of the Company or an employee benefit plan
     maintained or contributed to by the Company), becomes the `beneficial
     owner' (as defined in Rule 13d-3 of the Act) of more than 65% of the then
     outstanding voting stock of IPOC or more than 65% of the partnership
     interests of IGTS; or

          (ii) the stockholders of IPOC approve a merger or consolidation of
     IPOC with any other corporation, other than (a) a merger or consolidation
     which would result in the voting securities of IPOC outstanding immediately
     prior thereto continuing to represent

                                       7

<PAGE>

     (either by remaining outstanding or by being converted into voting
     securities of the surviving entity) more than 80% of the combined voting
     power of the voting securities of IPOC or such surviving entity outstanding
     immediately after such merger or consolidation, or (b) a merger or
     consolidation effected to implement a recapitalization of IPOC (or similar
     transaction) in which no "person" (as previously defined ) acquires more
     than 65% of the combined voting power of IPOC's then outstanding
     securities; or

          (iii) the stockholders of IPOC (or the partners of IGTS) approve a
     plan of complete liquidation of IPOC or IGTS or an agreement for the sale
     or disposition by IPOC or IGTS of all or substantially all of the IPOC's or
     IGTS's assets.

     (a)  Arbitration. Any dispute or controversy arising under or in connection
with the Agreement subsequent to a Change in Control shall be settled
exclusively by arbitration in Connecticut, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.

     11.  Indemnification. The Company shall indemnify and hold harmless any
member of the Committee from any liability incurred in his or her capacity
as administrator of this Agreement for acts which he or she undertakes in good
faith as a member of such Committee.

     12.  Amendment. This Agreement may be amended or modified only by a writing
signed by both parties thereto.

     13.  Miscellaneous.

     (a)  Anti-alienation. Neither Mr. Frew nor any Beneficiary shall have the
right to assign, transfer, encumber or otherwise subject to any lien any payment
or other interest under this Agreement, nor shall such payment or interest be
subject to attachment, execution or levy of any kind.

     (b)  No Employment Rights. Nothing in this Agreement shall confer any right
upon Mr. Frew to be retained in the service of the Company, IPOC or any of their
Affiliates.

     (c)  Incompetence. In the event that the Committee determines that Mr. Frew
is unable to care for his affairs because of illness or accident or for any
other reason, any amounts payable under this Agreement may be paid to the duly
appointed guardian, conservator or other legal representative or, if none, to
his Spouse or other relative or person deemed by the Committee to be responsible
for Mr. Frew's care, and any such payment shall be in complete discharge of the
liabilities of the Agreement therefor.

     (d)  Governing Law. The Agreement shall be construed and governed in
accordance with the laws of the State of Connecticut to the extent not preempted
by ERISA.

     (e)  Withholding. The Company shall deduct from all amounts paid under this
Agreement any taxes required to be withheld by any federal, state, or local
government tax statutes. Mr. Frew, or if applicable his Spouse or other
Beneficiary or their personal representatives, will be responsible for the
payment of any and federal, foreign, state, local, or other income or other
taxes imposed on amounts paid under this Agreement.

                                       8

<PAGE>

     (f)  Headings. The headings and subheadings of this Agreement have been
inserted for convenience of reference only and shall not be used in the
construction of this Agreement.

                                       9

<PAGE>

Dated as of July 1, 1997            IROQUOIS GAS TRANSMISSION SYSTEM LIMITED
                                    PARTNERSHIP, by its agent IROQUOIS PIPELINE
                                    OPERATING COMPANY

                                    By:/s/Bernie J. Bradley
                                       -------------------------------------
                                          Bernie J. Bradley
                                          Chairman, HR Committee

                                    By:/s/Robert A.M. Young
                                       -------------------------------------
                                          Robert A. M. Young
                                          Chairman, Management Committee

                                      CRAIG R. FREW

                                       /s/Craig R. Frew
                                       --------------------------------------

                                     10

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