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                                                                   EXHIBIT 10.12
                                                 IAN CARTER EMPLOYMENT AGREEMENT

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of
January 1, 2000, between Commonwealth Energy Corporation, a California
corporation (the reference herein to the "Company" includes all subsidiary
companies owned or controlled now or hereafter by Commonwealth Energy
Corporation, including but not limited to electricAMERICA, electric.com and any
and all other entities formed as a result of expanding the business of
Commonwealth Energy Corporation) and Ian B. Carter ("Employee"), with reference
to the following:

         A. Employee has been a principal stockholder, director, officer and
employee of the Company and has rendered valuable services to the Company.

         B. The Company and Employee desire to enter into this Agreement to
assure the Company of the continued services of Employee on the terms provided
herein.

         NOW, THEREFORE, in consideration of the various covenants and
agreements hereinafter set forth, the parties hereto agree as follows:

         1. Term of Employment. The Company hereby employs Employee and Employee
accepts such employment for a term of 61 months, commencing on January 1, 2000
and terminating on January 31, 2005, unless sooner terminated as hereinafter
provided.

         2. Titles and Responsibilities. Employee shall serve as Chairman and
Chief Executive Officer of the Company and in the performance of such duties
shall report directly to (and only to) the Board of Directors of the Company
(the "Board"). Employee shall also serve as director and chairman of affiliated
companies as the Board may desire. Subject to applicable law and the overall
policy directives of the Board, Employee shall have complete autonomy with
respect to the day to day management of the business and affairs of the Company
and shall have all executive powers and authority which are necessary to enable
him to discharge his duties as Chairman and Chief Executive Officer of the
Company and which are commonly incident to such office. Employee's office
location shall at all times be in the Orange County Area, California provided
that Employee may be required to travel outside such area from time to time to
the extent reasonably necessary to the performance of his duties hereunder.
During the term hereof, the Company shall not employ or otherwise retain any
other person who reports directly to the Board, who is afforded aggregate
compensation greater than that of Employee or who is afforded executive
responsibilities greater than those of Employee. In addition, during the term
hereof, the Company shall include Employee as a qualified candidate on any slate
of nominees for directors presented by management for proxy or for appointment
or to any shareholders for consideration and vote to the end that Employee shall
at all times be and remain a member of the Board and shall be member of any
Executive Committee, provided however that nothing herein shall override the
legal requirements regarding nonparticipation and/or non voting in matters
involving conflicts of interest that may come before a committee or before the
Board.

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         Employee shall in good faith and consistent with his ability,
experience and talent perform the duties set forth in this Section 2, and shall
devote all of his productive time and efforts to the performance of such duties;
provided, however, that Employee may devote time to personal and family
investments to the extent that such investments do not materially conflict with
the discharge of his duties hereunder.

         3. Compensation and Benefits. The Company shall pay and/or provide the
following compensation and benefits to Employee during the term hereof, and
Employee shall accept the same as payment in full for all services rendered by
Employee to or for the benefit of the Company:

                  3.1 Base Salary. A salary of $ 275,000 per annum for the first
twelve months of the term of this Agreement, $ 325,000 per annum for the second
twelve months of the term, 375,000 per annum for the third twelve months of the
term, $ 425,000 per annum for the fourth twelve months of the term, and $
500,000 per annum for the fifth twelve months of the term (the "Base Salary").
The Base Salary shall be subject to review from time to time (not less
frequently than at the end of each fiscal year of the Company) and, as a result
thereof, may be increased (but not decreased) at the discretion of the Board. In
determining such increases in the Base Salary, if any, the Board shall take into
account, among other things, the Company's Business Plan and the Company's
results of operations. The Base Salary shall be payable in accordance with the
payroll practices of the Company in effect from time to time.

                  3.2 Bonus. In the event that the Company achieves in any year
during the term hereof an increase of fifty thousand (50,000) or more new
customers (a new customer is defined as an additional meter being served and the
Increase in the Customer Count means the increase if any in comparing the
Customer Count at the beginning of the year with the Customer Count at the end
of said year, taking into account any loss of customers to arrive at the
aggregate or net Customer Count) Employee shall receive one dollar per new
customer up to $50,000 maximum in the first year, up to $75,000 in the second
year, and up to $100,000 per year in the third, fourth and fifth years. The
bonus shall be due and payable no later than thirty (30) days following the
determination by the Company's independent certified public accountants, or,
certified by the Chief Financial Officer . If such results are achieved Employee
shall also be eligible for an additional discretionary bonus to be determined by
the Board taking into account, among other things, the Business Plan and the
Company's results of operations for the completed fiscal year. The bonus
provided herein shall cease if and when the Company, or any affiliated company
makes an initial public offering. As used herein, "initial public offering"
means new shares are marketed and sold to the public pursuant to a contract with
an underwriter who commits to create a market for the IPO shares on NASDAQ or
the American Stock Exchange or the New York Stock Exchange.

                           (a) Bonus Upon Sale of Assets or Control of the
Company. If during the term of this Agreement all or substantially all of the
assets of the Company or more than fifty percent (50%) of the issued and
outstanding voting shares of the Company are, in any transaction or series of
transactions, acquired by any one person or entity not then affiliated with the
Company, then the Company shall pay to Employee a bonus equal to eight (8) times
the annual Base Salary due the Employee plus the amount of I.R.S. Code 280 G
taxes, payable by Employee. In addition all stock options due the Employee shall
be immediately earned and issued as non-restricted options. The bonus shall be
paid to Employee within sixty (60) days after the Closure date of such purchase
of assets or stock, and the payment of the bonus shall be accompanied by a
summary statement or accounting of the computation thereof. The bonus shall be
payable to Employee whether or not Employee elects to terminate this Agreement
pursuant to Section 7.3 below.

                           (b) Participation in Public Offering. If during the
term of this Agreement the Company makes a public offering of shares of its
voting common stock, or any other class securities with substantially similar
terms and preferences, ("Common Stock"). Employee shall have the right and
option to purchase shares of Common Stock from the Company prior to the public
offering on the following terms and subject to the following conditions:

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                                    (i) Employee shall be entitled to purchase
from the Company prior to the public offering three hundred thousand (300,000)
shares of restricted Common Stock immediately prior to the public offering and
shall be entitled to purchase the shares of Common Stock at a purchase price of
$2.50 for each share. These shares shall be allowed to be sold with the public
stock in the Public Offering at the discretion of the Employee.

                                    (ii) If any holder of Common Stock of the
Company (hereinafter a "Selling Shareholder") is permitted by the Company and
the Company's underwriters to have any of his Common Stock registered and sold
with the Common Stock issued by the Company in the public offering, the Common
Stock so purchased by Employee shall be included in the Common Stock registered
and sold by the Selling Shareholders, on the same basis as that afforded to the
other Selling Shareholders;

                                    (iii) Except with respect to shares of
Common Stock registered and sold by Employee pursuant to Section (ii) above, (i)
Employee acknowledges that the shares of stock so purchased by him will be
registered under the Securities Act or any applicable state securities laws;
(ii) Employee represents and warrants to the Company that all such stock will be
held by him for his account for investment purposes only; (iii) Employee
acknowledges and agrees that no stock so acquired by him may be transferred
unless and until (A) counsel for the Company shall have determined, at the
Company's sole cost and expense, that the intended transfer does not violate the
Securities Act of 1933 (the "Securities Act") or the rules and regulations
promulgated thereunder or any applicable state securities laws, or (B) the
shares have been validly registered under the Securities Act and all applicable
state securities law; and

                                    (iv) Except with respect to shares of Common
Stock registered and sold by Employee pursuant to Section (ii) above, all shares
of stock so purchased by Employee shall be subject to a Shareholders Agreement
among the Company, Employee and the other controlling shareholders of the
Company substantially similar in form and substance to such Shareholders
Agreement, if any, as may then be in effect among the Company and its employee
Shareholders. If no such shareholders Agreement then exists among the Company
and its employee Shareholders, Employee need not enter into any Shareholders
Agreement restricting his transfer of the shares of Common Stock so purchased by
him.

                           (c) Bonus for Successful Initial Public Offering
("IPO"). This stock option bonus shall be deemed earned by the Employee for
increasing the capitalized value of the Company or any related entity which is
the subject of the IPO. Capitalized value shall be calculated by taking the
initial value placed on one share of stock or the value of one share of stock
thirty (30) days after the date of the IPO, whichever is higher, and multiply
said value per one share by the total number of shares and options outstanding.
(For example, if the stock is priced at $10.00 per share either on the date of
the IPO or thirty (30) days thereafter and the total number of outstanding
shares and options is forty million (40,000,000), the capitalized value shall be
$400,000,000). The options shall be earned as follows: at a capitalized value
with a floor of $100,000,000 or less, the Employee is granted 100,000 options.
For each increase of $11,000,000 in capitalized value, the Employee is granted
an additional 25,000 options up to a maximum of 2,000,000 options. At an
increase of $11,000,000 increments, the Employee shall cap out at 2,000,000
options at a capitalized value of $936,000,000, or greater. These bonus options
shall have Demand Registration rights for the Employee and shall be subject to
the same terms as described in paragraph 3.2 (b) (i). Said options shall have a
ten-year period before expiring.

                  3.3 Employee Stock Option Plan. Concurrently herewith, the
Company shall grant to Employee for signing this agreement, a stock option to
purchase three hundred thousand (300,000) shares. For the balance of the term of
this agreement there shall be four additional stock option periods to purchase
one hundred thousand (100,000) shares in each one year period of the Company's
capital stock on the terms outlined in paragraph 3.2 (b) (i). (Said four stock
option issuances shall be earned upon each anniversary thereafter). These four
options shall be considered as part of the salary package. In addition,
concurrently with these four options there shall be four additional options of
three hundred thousand (300,000) shares each. These four options shall be earned
by Employee if the Customer Count grows or increases a minimum of twenty percent
(20%) annually over the 1999 year, non compounded, Customer Count. The Customer
Count is defined as the aggregate customer base or customer count at the end of

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1999 minus all industrial customers and all commercial customers signed with the
Company. The Employee at his discretion may place the allowed amount of these
options into the Company's Incentive Stock Option Plan. Said options shall have
a ten year period to expiration, unless the Stock Option Plan does not authorize
same. Any shares of capital stock so purchased by Employee shall be entitled to
participate, on the same basis as those owned by any other shareholders, in any
selling shareholder allotment afforded to the Company's other shareholders in
connection with any and all public offerings of the Company's capital stock
hereafter effected. Any shares issued under this bonus shall have Demand
registration rights and shall be subject to the terms of paragraph 3.2 (b) (i).
These options shall be afforded the same privileges as shares. For example, the
options will initially be issued in Commonwealth Energy Corporation, with the
understanding that should the IPO be a separate entity other than Commonwealth
Energy Corporation, the same number of options will be issued to the Employee in
the IPO entity -- for example, electric.com. In this case, the option price for
each share will be the same price as the price at which the shares are initially
offered, or $2.50, whichever is lower.

                  3.4 Other Fringe Benefits. Employee shall be entitled to
participate in all of the Company's incentive and benefit plans and
arrangements, including, without limitation, all employee incentive and benefit
plans or arrangements made available in the future by the Company to its senior
executives, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements, but on a basis no less
favorable than that afforded to any other director, officer or employee of the
Company. The Company shall also provide to Employee and his spouse and any
family members under the age of majority at the Company's expense reasonable
health insurance coverage as given to other senior management employees of the
Company, as approved by the Board, and life and disability insurance in amounts
and types of coverage as approved by the Board.

                  3.5 Expenses. The Company shall promptly reimburse Employee
for all out-of-pocket expenses actually incurred by him in connection with the
performance of his duties hereunder, subject to Employee's furnishing the
Company with evidence in the form of receipts satisfactory to the Company
substantiating the claimed expenditures (such expenses being commensurate with
the office and executive position of Employee hereunder, and including first
class hotel and travel arrangements). Employee's right to be reimbursed for
expenses incurred prior to the termination of this Agreement shall survive
termination of this Agreement.

                  3.6 Vacation. Employee shall be entitled to the number of paid
vacation days in each calendar year which shall not be aggregated or carried
forward, as determined by the Board from time to time for the Company's senior
executive officers, but not less than 30 business days in any calendar year.
Employee shall also be entitled to all paid holidays given to the Company's
senior executive officers.

                  3.7 Automobile; Telephone; etc. During the term hereof the
Company shall make payments of One Thousand Three Hundred Dollars ($1,300.00)
per month to the manufacturer or dealer or other person or entity as designated
by the Employee for an automobile of the Employee's choice. At the time of
termination of this agreement the Employee shall assume the responsibility of
any such payments. In addition, the Company shall provide an automobile
telephone, a home telecopy machine and an answering service and shall reimburse
Employee for all charges incurred by him in connection with the use thereof
related to the performance of his duties hereunder. In addition, the Company
shall pay the reasonable cost for insurance coverage for liability and property
damage, and also comprehensive and collision coverage for the automobile.

                  3.8 Withholding and other Deductions. All compensation payable
to Employee hereunder shall be subject to such deductions as the Company is from
time to time required to make pursuant to law, governmental regulation or order.

         4. Representations and Warranties. Employee represents and warrants to
the Company that (a) Employee is under no contractual or other restriction or
obligation which is inconsistent with the execution of this Agreement, the
performance of his duties hereunder, or the other rights of the Company
hereunder and (b) Employee is under no physical or mental disability that would
hinder the performance of his duties under this Agreement. The Company
represents and warrants to Employee that (a) the execution

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and delivery of this Agreement by the Company and the performance of its
obligations hereunder have been duly authorized by the Board and no further
corporate action on the Company's part is necessary to authorize this Agreement
and the performance of such obligations, and (b) this Agreement constitutes the
valid and binding obligation of the Company, enforceable by Employee against the
Company strictly in accordance with its terms (subject to laws in effect with
respect to creditors' rights generally and applicable principles relating to
equitable remedies).

         5. Confidential Information. Employee acknowledges that the nature of
Employee's engagement by the Company is such that Employee will have access to
Confidential Information (as hereinafter defined) which has value to the
Company. During the term of this Agreement and at all times thereafter, Employee
shall keep all of the Confidential Information in confidence and shall not
disclose any of the same to any other person, except the Company's personnel
entitled thereto and other persons designated in writing by the Company or
except as otherwise required by law. Employee shall not use the Confidential
Information for Employee's personal gain or benefit outside the scope of
Employee's engagement by the Company. The term "Confidential Information," as
used herein, means all information or material not generally known by
non-Company personnel which (a) gives the Company some competitive business
advantage or the opportunity of obtaining such advantage or the disclosure of
which could be materially detrimental to the interests of the Company; (b) which
is owned by the Company or in which the Company has an interest and (c) which is
either (i) marked "Confidential Information," "Proprietary Information" or other
similar marking, (ii) known by Employee to be considered confidential and
proprietary by the Company or (iii) from all the relevant circumstances should
reasonably be assumed by Employee to be confidential and proprietary to the
Company.

         Employee agrees that upon termination of employment, unless retained by
the Company in some other capacity, Employee will not, for a period of two (2)
years after such termination:

         (a) Use or assist others in using Confidential Information for any
purpose competitive with the business of the Company or any affiliated company;
or

         (b) Solicit or induce, or attempt to solicit or induce any officer or
Senior manager who is a key "man" employee of the Company, provided further that
this provision shall not be deemed to be breached in any such employee hired by
Employee states that he or she voluntarily quit the Company without being
induced by an offer by Employee to quit and accept a salary higher than his or
her existing salary.

         6. Insurance and Indemnification.

                  6.1 "Key-Man" Insurance. The Company shall have the right to
purchase "key-man" life insurance covering Employee, in the name and for the
benefit of the Company and at the Company's expense in any amount not exceeding
$2,000,000. Furthermore, so long as it does not adversely affect Employee's
ability to obtain life insurance in the general market at prevailing rates, the
Company may take out additional "key-man" life insurance with respect to
Employee at the Company's cost and for its benefit. Employee shall cooperate in
all reasonable respects with the Company's efforts to obtain such insurance and
shall submit to any required medical or other examination; provided; however,
that if such medical or other examination cannot be conducted by Employee's
personal physician, then Employee shall have the right to have his personal
physician attend the examination. Upon the termination of his employment
hereunder, Employee may acquire any such life insurance policy upon paying the
Company an amount equal to the insurance policy's cash surrender value, if any,
at the time of termination and reimbursing the Company for the pro rata portion
of any premium paid applicable to periods subsequent to the termination.

                  6.2 Insurance Covering Employee. The Company shall, at its
cost, provide insurance coverage to Employee to the same extent as other senior
executives and directors of the Company, with respect to (i) director's and
officer's liability, (ii) errors and omissions and (iii) general liability. At
no time will the director's and officer's liability and errors and omissions
insurance coverage

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fall below $10,000,000. As the company grows, appropriate adjustments to the
levels of coverage will be in full force and effect.

                  6.3 Indemnification. The Company shall indemnify Employee and
hold him harmless from and against any and all costs, expenses, losses, claims,
damages, obligations or liabilities (including actual attorneys fees and
expenses) arising out of or relating to any acts, or omissions to act, made by
Employee on behalf of or in the course of performing services for the Company to
the full extent permitted by the Bylaws of the Company as in effect on the date
of this Agreement, or, if greater, as permitted by applicable law, provided that
the indemnity afforded by the Company's Bylaws shall never be greater than that
permitted by applicable law. To the extent a change in applicable law permits
greater indemnification than is now afforded by the Bylaws and a corresponding
amendment shall not be made in said Bylaws, it is the intent of the parties
hereto that Employee shall enjoy the greater benefits so afforded by such
change. If any claim, action, suit or proceeding is brought, or claim relating
thereto is made, against Employee with respect to which indemnity may be sought
against the Company pursuant to this section, Employee shall notify the Company
in writing thereof, and the Company shall have the right to participate in, and
to the extent that it shall wish, in its discretion, assume and control the
defense thereof, with counsel satisfactory to Employee.

                  6.4 Rights Not Exclusive. The foregoing rights conferred upon
Employee shall not be exclusive of any other right which Employee may have or
hereafter acquire under any statute, provision of the Articles of Incorporation
or Bylaws, agreement, vote of shareholders or disinterested directors or
otherwise, and such provisions shall survive the termination or expiration of
this Agreement for any reason whatsoever.

         7. Termination.

                  7.1 Death or Total Disability of Employee. If Employee dies,
Employee's employment hereunder shall automatically terminate. If Employee
becomes totally disabled during the term of this Agreement, this Agreement may
be terminated at the option of the Company. For these purposes Employee shall be
deemed totally disabled if Employee becomes physically or mentally incapacitated
or disabled or otherwise unable to discharge Employee's duties hereunder for a
period of one hundred twenty (120) consecutive calendar days or for one hundred
fifty (150) calendar days (whether or not consecutive) in any one hundred eighty
(180) calendar day period. Prior to termination of this Agreement as a result of
disability, and notwithstanding any failure or inability of Employee to render
services hereunder, the Company shall continue to pay and/or provide to Employee
the compensation and benefits specified in Section 3 hereof. Furthermore, in the
event that this Agreement automatically terminates as a result of the death of
Employee, or in the event that this Agreement is terminated by the Company as a
result of the total disability of Employee, the Company shall continue to pay
Employee (or, in the event of Employee's death, Employee's estate, heirs or
personal representative), when otherwise due, for a period of one year
thereafter or until expiration of the term hereof, whichever occurs first, the
Base Salary and bonus specified in Sections 3.1 and 3.2 hereof. .

                  7.2 Termination by the Company for Cause. Except as set forth
in Section 7.1, the Company may terminate this Agreement only for cause, which
shall be limited to any one of the following:

                           (a) Employee's conviction by, or entry of a plea of
guilty or nolo contendere in, a court of competent and final jurisdiction for
any felony which would materially and adversely interfere with Employee's
ability to perform his services under this Agreement

                           (b) In no event whatsoever shall the Company's
failure to meet the projections set forth in the Business Plan be grounds for
the Company's termination of this Agreement.

                           (c) Upon termination of this Agreement by the Company
for cause, Employee shall be entitled to receive all compensation and other
benefits payable to him pursuant to Section 3 hereof accrued through the
effective date of termination.

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                  7.3 Termination by Employee for Cause. Employee may terminate
this Agreement only for cause, which shall be limited to any one of the
following:

                           (a) The sale of all or substantially all of the
Company's assets to a person unaffiliated with the Company or the occurrence of
a Change of Control, in either case without Employee's prior written consent,
which consent may be given or withheld by Employee in his sole and arbitrary
discretion.

                           (b) The Company's material breach of any of the terms
and conditions of this Agreement, provided that termination pursuant to this
subsection (b) shall not constitute a valid termination for cause unless the
Board shall have first received written notice from Employee stating with
specificity the nature of such material breach and affording the Company at
least thirty (30) days to cure the material breach alleged.

                  Upon any termination of this Agreement by Employee for cause,
Employee shall not be required to render or to provide any further services
pursuant to this Agreement and shall be entitled to receive in one lump sum
within fifteen (15) days following notice of such termination, a termination
payment equal, in the case of termination under (a) above, to eight (8) times
the Base Salary then being paid to Employee hereunder, and equal, in the case of
termination under (b) above, to the monetary value (not discounted to present
value) of all of the compensation, including all the options, and other benefits
payable to Employee pursuant to this Agreement for the remainder of the term
hereof. Such compensation shall be in addition to, and not in lieu of, any other
damages to which Employee may otherwise be entitled.

                  7.4 Stock Repurchase Option. In the event that the Company
should terminate this agreement early, Employee shall have the absolute right,
to be exercised in his sole and absolute discretion and in addition to any other
compensation or benefits payable to him hereunder, to require the Company to
repurchase from him all capital stock and stock options of the Company then
owned by him at an aggregate repurchase price equal to 100% of then aggregate
price value of the Company's capital stock. Such right may be exercised by
notice from Employee to the Company, and the closing of the repurchase shall
take place at a time and place to be agreed upon by Employee and the Company,
but not to be more than thirty (30) days following the Company's receipt of the
notice. At the closing Employee shall sell and the Company shall purchase the
capital stock and stock options, without any representation or warranty by
Employee other than that he has good title thereto free of all liens,
encumbrances and adverse interests, by Employee's delivery to the Company of a
certificate or certificates representing such capital stock and stock options,
in each case duly endorsed for transfer or accompanied by appropriate stock
powers, and by the Company's delivery to Employee of a certified check
representing payment of the purchase price in full.

                  7.5 No Mitigation. Employee shall have no duty or obligation
to mitigate damages hereunder, and if Employee does choose to accept employment
elsewhere after any breach or improper termination of this Agreement by the
Company, then any income and other employment benefits received by Employee by
virtue of his employment by, or rendition of services for or on behalf of, any
person or entity other than the Company after such breach or improper
termination shall not reduce the Company's obligation to make payments and
afford benefits hereunder.

                  7.6 No Offset. The Company shall have no right to offset
against any payments or other benefits due to Employee under this Agreement the
amount of any claims it may have against Employee by reason of any breach or
alleged breach of this Agreement by Employee; provided, however, that the
Company shall have the right to offset any amounts due the Company from Employee
pursuant to any judgment (after exhaustion of all appeals) rendered by a court
of competent jurisdiction in connection with any breach or alleged breach of
this Agreement by Employee.

                  7.7 SEC Filings. The Company or its counsel engaged to advise
the Company with respect to filings with the SEC shall give timely notice and
advice to Employee, to the extent the Company has or is given information that
should so indicate to the Company or its counsel, of any requirement that
Employee make filings with the SEC or any other governmental agency having
jurisdiction by reason of

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Employee's position with the Company and/or Employee's transactions in
securities of the Company.

         8. Failure to Extend Term. If at the expiration of the term of this
Agreement the Company has met or exceeded the projections set forth in the
Business Plan and the Company does not offer to extend Employee's employment on
terms no less favorable than those stated herein but at his then current level
of compensation and other benefits (subject to upward adjustment to reflect
increases, if any, in the cost of living during the term hereof as reflected in
the level of the Consumer Price Index-All Items for the Los Angeles Metropolitan
Area, promulgated by the Bureau of Labor Statistics of the United States
Department of Labor), the Company shall upon such expiration pay Employee a sum
of $100,000 for a period of ten (10) years. Employee agrees to consult to the
company during that period and shall be Vice-Chairman of the Board.

         9. General Relationship. Employee shall be considered an employee of
the Company within the meaning of all federal, state and local laws and
regulations including, but not limited to, laws and regulations governing
unemployment insurance, workers' compensation, industrial accident, labor and
taxes.

         10. Miscellaneous.

                  10.1 Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.

                  10.2 No Assignment. This Agreement may not be assigned by the
Company or Employee without the prior written consent of the other (which
consent may be granted or withheld by such party in its sole and absolute
discretion), and any attempt to assign rights and duties without such written
consent shall be null and void and of no force and effect. Subject to the
preceding sentence, this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns.

                  10.3 Survival. The covenants, agreements, representations and
warranties contained in or made pursuant to this Agreement shall survive
Employee's termination of employment, irrespective of any investigation made by
or on behalf of any party.

                  10.4 Third Party Beneficiaries. This Agreement does not
create, and shall not be construed as creating, any rights enforceable by any
person not a party to this Agreement.

                  10.5 Waiver. The failure of either party hereto at any time to
enforce performance by the other party of any provision of this Agreement shall
in no way affect such party's rights thereafter to enforce the same, nor shall
the waiver by either party of any breach of any provision hereof be deemed to be
a waiver by such party of any other breach of the same or any other provision
hereof.

                  10.6 Section Headings. The headings of the several sections in
this Agreement are inserted solely for the convenience of the parties and are
not a part of and are not intended to govern, limit or aid in the construction
of any term or provision hereof.

                  10.7 Notices. All notices and other communications required or
permitted under this Agreement shall be in writing, served personally on,
telecopied, sent by courier or other express private mail service, or mailed by
certified, registered or express United States mail postage prepaid, and shall
be deemed given upon receipt if delivered personally, telecopied, or sent by
courier or other express private mail service, or if mailed when actually
received as shown on the return receipt. Notices shall be addressed as follows:

                           (a)      If to the Company, to:
                                    Commonwealth Energy Corporation
                                    15901 Red Hill Avenue

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                                    Suite 100
                                    Tustin, CA 92780

                           (b)      If to Employee, to:
                                    Ian B. Carter
                                    19392 Lemon Hill Drive
                                    Santa Ana, CA 92705

Either party may change its address for purposes of this Section by giving to
the other, in the manner provided herein, a written notice of such change.

                  10.8 Severability. All sections, clauses and covenants
contained in this Agreement are severable, and in the event any of them shall be
held to be invalid by any court, this Agreement shall be interpreted as if such
invalid sections, clauses or covenants were not contained herein.

                  10.9 Applicable Law. This Agreement is made with reference to
the laws of the State of California, shall be governed by and construed in
accordance therewith, and any court action brought under or arising out of this
Agreement shall be brought in any competent court within the State of
California, County of Orange.

                  10.10 Attorneys' Fees. If any legal action, arbitration or
other proceeding is brought for the enforcement of this Agreement, or because of
any alleged dispute, breach, default or misrepresentation in connection with
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs it incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.

                  10.11 Gender. Where the context so requires, the use of the
masculine gender shall include the feminine and/or neuter genders and the
singular shall include the plural, and vice versa, and the word "person" shall
include any corporation, firm, partnership or other form of association.

                  10.12 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.

                  10.13 Option Rights. All stock options shall vest immediately,
except as otherwise set forth in Section 3.3. All stock option rights, including
grants, or bonuses, or rights to stock options shall include the right in favor
of Employee, that in the event of any stock splits or option splits, Employee's
options and rights shall also be included and split, and the Company agrees to
take all appropriate action to accomplish this commitment. Any options owned by
Employee shall in no event be subject to forfeiture or termination in the event
that Employee's status as an employee should terminate or expire.

                  10.15 Right of Employee to Terminate. Employee has the right,
after thirty months of the term of this agreement, and at his sole discretion,
to terminate this agreement. All options and funds earned at that point shall
accrue to the benefit of the Employee In order for the Employee to exercise this
option, the Company or an affiliated company has to have completed an IPO.

                  10.15 Guarantee. In the event a separate entity takes control
of the operation of the Company for any reason whatsoever, the Company
represents and agrees that this Employment Agreement, and all obligations of the
Company to Employee shall become the obligations of any such successor company
or entity. This successor obligation by any such company or entity or related
company includes but is not limited to electricAMERICA or electric.com in the
event Commonwealth becomes insolvent, or is dissolved and/or becomes a
subsidiary of either named company, or any other related company.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date hereinabove set forth.

                                       9
<PAGE>   10
                                         Commonwealth Energy Corp.,
                                         a California corporation

                                         By: /s/ John A. Barthrop
                                             ----------------------------------
                                         John A. Barthrop
                                         Its:  General Counsel

                                         EMPLOYEE

                                         /s/ Ian B. Carter
                                         --------------------------------------
                                         Ian B. Carter

                                       10
<PAGE>   11
                                    EXHIBIT A

                            INDEMNIFICATION AGREEMENT

                  THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and
entered into and is effective as of November 1, 2000, by and between
COMMONWEALTH ENERGY CORPORATION, a California corporation (the "Corporation"),
and IAN B. CARTER, an individual ("Indemnitee").

                                R E C I T A L S:

                  A. Indemnitee performs a valuable service to the Corporation
in his capacity as an officer and a director of the Corporation.

                  B. The shareholders of the Corporation have adopted Bylaws
(the "Bylaws") providing for the indemnification of the officers, directors,
employees and other agents of the Corporation as authorized by the California
Corporations Code, as amended (the "Code").

                  C. The Bylaws and the Code, by their non-exclusive nature,
permit contracts between the Corporation and its directors, officers, employees
and other agents with respect to indemnification of such persons.

                  D. In accordance with the authorization provided by the Bylaws
and the Code, the Corporation is entitled to purchase a policy or policies of
Directors' and Officers' Liability Insurance ("Insurance") covering certain
liabilities which may be incurred by its directors and officers in the
performance of their duties to the Corporation.

                  E. As a result of developments affecting the terms, scope and
availability of Insurance, there exists general uncertainty as to the extent of
protection afforded such persons by such Insurance and by statutory and bylaw
indemnification provisions.

                  F. In order to induce Indemnitee to continue to serve as an
officer of the Corporation, the Corporation has determined and agreed to enter
into this Agreement with Indemnitee.

                  NOW, THEREFORE, the parties hereto agree as follows:

1. Services to the Corporation. Indemnitee will serve, at the will of the
Corporation or under separate contract, if any such contract exists, as an
officer of the Corporation or as a director, officer or other fiduciary of the
Corporation or an affiliate of the Corporation (including any employee benefit
plan of the Corporation) faithfully and to the best of his ability so long as he
is duly elected and qualified in accordance with the provisions of the Bylaws,
other applicable constitutive documents of the Corporation or such affiliate, or
other separate contract, if any such contract exists; provided, however, that
Indemnitee may at any time and for any reason resign from such position (subject
to any contractual obligation that Indemnitee may have assumed apart from this
Agreement) and that the Corporation or any affiliate shall have no obligation
under this Agreement to continue Indemnitee in any such position.

2. Indemnity of Indemnitee. The Corporation shall hold harmless, indemnify and
advance expenses to Indemnitee as provided in this Agreement and to the fullest
extent authorized, permitted or required by the provisions of the Bylaws and the
Code, as the same may be amended from time to time (but, only to the extent that
such amendment permits the Corporation to provide broader indemnification rights
than were permitted by the Bylaws or the Code prior to adoption of such
amendment). The rights of Indemnitee provided under the preceding sentence shall
include, but shall not be limited to, the rights set forth in the other sections
of this Agreement.

                                       11
<PAGE>   12
3. Additional Indemnity. In addition to and not in limitation of the
indemnification otherwise provided for herein, and subject only to the
exclusions set forth in Section 4 hereof, the Corporation hereby further agrees
to hold harmless and indemnify Indemnitee:

         (a) Against any and all expenses (including reasonable attorneys'
fees), witness fees, damages, judgments, fines and amounts paid in settlement
and any other amounts that Indemnitee becomes legally obligated to pay because
of any claim or claims made against or by him in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
arbitrative, administrative or investigative (including an action by or in the
right of the Corporation) to which Indemnitee is, was or at any time becomes a
party, or is threatened to be made a party, by reason of the fact that
Indemnitee is, was or at any time becomes a director, officer, employee or other
agent of the Corporation, or is or was serving or at any time serves at the
request of the Corporation as a director, officer, employee or other agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise; and

         (b) Otherwise to the fullest extent as may be provided to Indemnitee by
the Corporation under the non-exclusivity provisions of the Code.

4. Limitations on Additional Indemnity. No indemnity pursuant to Section 3
hereof shall be paid by the Corporation:

         (a) On account of any claim against Indemnitee for an accounting of
profits made from the purchase or sale by Indemnitee of securities of the
Corporation pursuant to the provisions of Section 16(b) of the Securities
Exchange Act of 19' )4 and amendments thereto or similar provisions of any
federal, state or local statutory law;

         (b) On account of Indemnitee's conduct that was knowingly fraudulent or
deliberately dishonest, or that constituted willful misconduct;

         (c) On account of Indemnitee's conduct that constituted a breach of
Indemnitee's duty of loyalty to the Corporation or resulted in any personal
profit or advantage to which Indemnitee was not legally entitled;

         (d) For which payment has actually been made to Indemnitee under a
valid and collectible insurance policy or under a valid and enforceable
indemnity clause, bylaw or agreement, except in respect of any excess beyond
payment under such insurance, clause, bylaw or agreement;

         (e) If indemnification is not lawful (and, in this respect, both the
Corporation and Indemnitee have been advised that the Securities and Exchange
Commission believes that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication) or is prohibited by any applicable state
securities laws with respect to any violation of applicable federal or state
securities laws; or

         (f) In connection with any proceeding (or part thereof) initiated by
Indemnitee, or any proceeding by Indemnitee against the Corporation or its
directors, officers, employees or other agents, unless (i) such indemnification
is expressly required to be made by law, (ii) the proceeding was authorized by
the Board of Directors of the Corporation, (iii) such indemnification is
provided by the Corporation, in its sole discretion, pursuant to the powers
vested in the Corporation under the Code, or (iv) the proceeding is initiated
pursuant to Section 9 hereof.

5. Continuation of Indemnity. All agreements and obligations of the Corporation
contained herein shall continue during the period Indemnitee is a director,
officer, employee or other agent of the Corporation (or is or was severing at
the request of the Corporation as a director, officer, employee or other agent
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise) and shall continue thereafter so long as Indemnitee shall
be subject to any possible claim or threatened, pending or completed action,
suit or proceeding, whether civil, criminal, arbitrative, administrative or
investigative, by reason of the fact that Indemnitee was a director of the
Corporation or serving in any other capacity referred to herein.

                                       12
<PAGE>   13
6. Partial Indemnification. Indemnitee shall be entitled under this Agreement to
indemnification by the Corporation for a portion of the expenses (including
attorneys' fees), witness fees, damages, judgments, fines and amounts paid in
settlement and any other amounts that Indemnitee becomes legally obligated to
pay in connection with any action, suit or proceeding referred to in Section 3
hereof even if not entitled hereunder to indemnification for the total amount
thereof, and the Corporation shall indemnify Indemnitee for the portion thereof
to which Indemnitee is entitled.

7. Notification and Defense of Claim. Not later than thirty (30) days after
receipt by Indemnitee of notice of the commencement of any action, suit or
proceeding, Indemnitee will, if a claim in respect thereto is to be made against
the Corporation under this Agreement, notify the Corporation of the commencement
thereof, but tile omission so to notify the Corporation will not relieve it from
any liability which is may have to Indemnitee otherwise than under this
Agreement. With respect to any such action, suit or proceeding as to which
Indemnitee notifies the Corporation of the commencement thereof.

         (a) The Corporation will be entitled to participate therein at its own
expense;

         (b) Except as otherwise provided below, the Corporation may, at its
option and jointly with any other indemnifying party similarly notified and
electing to assume such defense, assume the defense thereof, with counsel
reasonably satisfactory to Indemnitee. After notice from the Corporation to
Indemnitee of its election to assume the defense thereof, the Corporation will
not be liable to Indemnitee under this Agreement for any legal or other expenses
subsequently incurred by Indemnitee in connection with the defense thereof
except for reasonable costs of investigation or otherwise as provided below.
Indemnitee shall have the right to employ separate counsel in such action, suit
or proceeding but the fees and expenses of such counsel incurred after notice
from the Corporation of its assumption of the defense thereof shall be at the
expense of Indemnitee unless (i) the employment of counsel by Indemnitee has
been authorized by the Corporation, (ii) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Corporation and
Indemnitee in the conduct of the defense of such action, or (iii) the
Corporation shall not in fact have employed counsel to assume the defense of
such action, in each of which cases the fees and expenses of Indemnitee's
separate counsel shall be at the expense of the Corporation. The Corporation
shall not be entitled to assume the defense of any action, suit or proceeding
brought by or on behalf of the Corporation or as to which Indemnitee shall have
made the conclusion provided for in (ii) above; and

         (c) The Corporation shall not be liable to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent, which shall not be unreasonably withheld.
The Corporation shall be permitted to settle any action except that it shall not
settle any action or claim in any manner which would impose any penalty or
limitation on Indemnitee without Indemnitee's written consent which may be given
or withheld in Indemnitee's sole discretion.

8. Expenses. The Corporation shall advance, prior to the final disposition of
any proceeding, promptly following request therefor, all expenses incurred by
Indemnitee in connection with such proceeding upon receipt of an undertaking by
or on behalf of Indemnitee to repay said amounts it if shall be determined
ultimately that Indemnitee is not entitled to be indemnified under the
provisions of this Agreement, the Bylaws, the Code or otherwise.

9. Enforcement. Any right to indemnification or advances granted by this
Agreement to Indemnitee shall be enforceable by or on behalf of Indemnitee in
any court of competent jurisdiction if (i) the claim for indemnification or
advances is denied, in whole or in part, or (ii) no disposition of such claim is
made within ninety (90) days of request therefor. Indemnitee, in such
enforcement action, if successful in whole or in part, shall be entitled to be
paid also the expense of prosecuting his claim. It shall be a defense to any
action for which a claim for indemnification is made under Section 3 hereof
(other than an action brought to enforce a claim for advancement of expenses
pursuant to Section 8 hereof, provided that the required undertaking has been
tendered to the Corporation) that Indemnitee is not entitled to indemnification
because of the limitations set forth in Section 4 hereof, but the burden of
proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors or its shareholders) to have made
a determination prior to the commencement of such enforcement action that
indemnification of Indemnitee is proper in the circumstances, nor an actual
determination by the Corporation (including its Board of Directors or its

                                       13
<PAGE>   14
shareholders) that such indemnification is improper, shall be a defense to the
action or create a presumption that Indemnitee is not entitled to
indemnification under this Agreement or otherwise.

10. Subrogation. In the event of payment under this Agreement, the Corporation
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.

11. Non-Exclusivity of Rights. The rights conferred on Indemnitee by this
Agreement shall not be exclusive of any other right which Indemnitee may have or
hereafter acquire under any statute, provision of the Articles of Incorporation,
the Bylaws, agreement, vote of shareholders or directors or otherwise, both as
to action in his/her official capacity and as to action in another capacity
while holding office.

12. Survival of Rights.

         (a) The rights conferred on Indemnitee by this Agreement shall continue
after Indemnitee has ceased to be a director, officer, employee or other agent
of the Corporation or to serve at the request of tile Corporation as a director,
officer, employee or other agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise and shall inure to the
benefit of Indemnitee's heirs, executors and administrators.

         (b) The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Corporation, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform if no such succession
had taken place.

13. Separability. Each of the provisions of this Agreement is a separate and
distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof. Furthermore, if this Agreement shall be invalidated in its
entirety on any ground, then the Corporation shall nevertheless indemnify
Indemnitee to the fullest extent provided by the Bylaws, the Code or any other
applicable law.

14. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of California.

15. Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.

16. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute but one and the same Agreement. Only
one such counterpart need be produced to evidence the existence of this
Agreement.

17. Headings. The headings of the sections of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction hereof.

18. Notices. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given (i) upon
delivery if delivered by hand to the party to whom such notice or other
communication shall have been directed, or (ii) if mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:

         (a) If to Indemnitee, to:

                  Mr. Ian B. Carter

                                       14
<PAGE>   15
                  19392 Lemon Hill Drive

                  Santa Ana, CA 92705

         (b) If to the Corporation, to:

                  Commonwealth Energy Corporation

                  15901 Redhill Avenue

                  Tustin, CA 92780

                  Attn: Chairman of the Board

or to such other address(es) as may have been furnished to/by Indemnitee to/by
the Corporation.

                  IN WITNESS WHEREOF, the parties hereto have duly executed this
Indemnification Agreement as of the day and year first above written.

                               CORPORATION

                               COMMONWEALTH ENERGY CORPORATION,
                               a California corporation

                               By: /s/ John A. Barthrop
                                   --------------------------------------------
                                   John A. Barthrop, Secretary to the Board and
                                   General Counsel to the Corporation

                               INDEMNITEE

                               By: /s/ Ian B. Carter
                                   --------------------------------------------
                                   Ian B. Carter

                                       15
<PAGE>   16
                        ADDENDUM TO EMPLOYMENT AGREEMENT

                  THIS ADDENDUM is entered into as of November 1, 2000 and shall
modify, change and clarify, as specified herein, that EMPLOYMENT AGREEMENT by
and between Commonwealth Energy Corporation, a California Corporation and Ian B.
Carter ("Employee"), said agreement was entered into as of January 1, 2000. This
ADDENDUM shall be made a part thereof and shall be attached thereto the
referenced EMPLOYMENT AGREEMENT.

                  Paragraph 3.2. Bonus shall be deleted in its entirety and
shall be replaced with the folio-wing paragraph. "Employee is entitled to a cash
bonus based on the Company's results in a given calendar year. Said cash bonus
shall be based on the Company's results of operation for the completed fiscal
year. One measurement shall be the performance of the company versus the
Business Plan. By meeting the requirements for this bonus the Employee shall be
entitled to one hundred thousand ($100,000.00) dollars as a cash bonus for that
calendar year. The Compensation Committee shall determine this bonus and any
additional discretionary cash bonus. This bonus shall be due and payable no
later than thirty (30) days following the determination by the Compensation
Committee.

                  Paragraph 3.2(a). Bonus Upon Sale of Assets or Control of the
Company shall be deleted in its entirety and shall be replaced with the
following paragraph: "If during the term of the Agreement (i) all or
substantially all of the assets of the Company or more than fifty percent (50%)
of the issued and outstanding voting shares of the Company are, in any
transaction or series of transactions, acquired by any one person or entity not
then affiliated with the Company, or (ii) control of the Company is taken over
by a group of shareholders when no significant change of ownership has taken
place, or (iii) a liquidity event such as a merger, acquisition, strategic
alliance or any other event that could bring substantial capital into the
company and any of these events listed require that the Employee be terminated,
leave the company, replaced or any other event that no longer allows or requires
the Employee to remain with the Company, then the Company shall pay to Employee
a bonus equal to eight (8) times the annual Base Salary due the Employee plus
the amount of I.R.S. Code 280 G taxes, payable by Employee. In addition all
stock options referred to in this Agreement, whether earned or unearned shall be
deemed to be valued at 2 times the then aggregate price value of the Company's
capital stock (See paragraph 3.9). The bonus shall be paid to the Employee and
the options purchased from the Employee prior to the Closure date of such an
event taking place. The bonus shall be payable to Employee whether or not
Employee elects to terminate this Agreement pursuant to Section 7.3 below."

                  Paragraph 3.2(b). Participation in Public Offering. Change the
first sentence of this paragraph to read: "If during the term of this Agreement
the Company makes a public offering of shares of its voting common stock, or any
other class securities with substantially similar terms and preferences,
("Common Stock") or if the company supports any other form of liquidity event
such as a merger, acquisition, strategic alliance, etc. . . then all stock
options referred to in this entire paragraph whether earned or not shall
immediately be considered vested prior to the public offering, or other such
liquidity event, on the following terms and conditions:

                  Paragraph 3.2(c). Bonus for Successful Initial Public Offering
("IPO"). This paragraph shall be deleted in its entirety and shall be replaced
with the following paragraph:

                  Paragraph 3.2(c). Specific Event Bonus Options. These bonus
options shall be earned by the Employee for successfully completing specific
events, which are:

<TABLE>
<CAPTION>
                              Event                              Options Earned
<S>                                                              <C>
                    Completion of the Audit                         500,000
                    Settlement with DOC                             250,000
                    Settlement with CPUC                            500,000
                    Complete Liquidity Event                        750,000
</TABLE>

These bonus options shall have Demand Registration rights for the Employee and
shall be subject to the same terms as described in paragraph 3.2(b)(i). Said
options shall have a ten-year period before expiring.

                                       1
<PAGE>   17
                  Paragraph 3.3 Employee Stock Option Plan: Delete the part of
the paragraph starting with the words, "In addition, concurrently" and ending
with the words "signed with the Company". Replace the deleted sentences with the
following: "In addition, the Employee may earn additional options by meeting or
exceeding the financial aspects of the Business Plan as approved by the
Compensation Committee. For meeting the Business Plan in any calendar year the
Employee shall earn and additional 100,000 options; if the Company exceeds the
Business Plan by 5% or more the Employee shall earn an additional 100,000
options, for a total of 200,000 options; and if the Company exceeds the Business
by 10% or more the Employee shall earn an additional 100,000 options, for a
total of 300,000 options.

Add the following sentence to Paragraph 3.4 Other Fringe Benefits: For a period
of ten years, whether the Employee is employed or not, the company agrees to pay
for a term life insurance policy for the Employee in an amount of one million
and five hundred thousand ($1,500,000) dollars.

Add the following two paragraphs:

                  3.9 Stock Repurchase Option: In the event the company should
terminate this agreement early, or the company is taken over through any event
that takes control of the company itself or by taking control of the Board of
Directors, or a sale of assets as defined herein. Whether such a takeover is
considered non-consensual or not; hostile or not: all financial payments due to
the Employee and all options due to the Employee, at the sole discretion of the
employee, shall be considered due and owing and shall be considered earned as
shown in the following paragraphs 3.1, 3.2, 3.2(a), 3.2(b), 3.2(c), 3.3, 3.4,
and 3.7. Employee shall have the absolute right, subject to applicable State and
Federal securities laws, to be exercised in his sole discretion and in addition
to any other compensation or benefits payable to Employee hereunder, to require
the Company to repurchase from Employee all capital stock and stock options of
the Company then earned or to be earned by Employee at an aggregate repurchase
price (see definition below) equal to two (2) times the then aggregate price
value of the Company's capital stock. The employee, in the employee's sole and
absolute discretion, may exercise such right twenty-four (24) hours prior to the
closing of such an event. Prior to the closing, as defined herein, the Employee
may elect to sell all or some of the Employee's stocks and/or stock options and
the Company shall agree to purchase the same capital stock and stock options
earned or to be earned by the Employee, at the Employee's sole discretion. The
Employee without any representation or warranty by Employee may exercise this
option; other than the Employee has good title thereto free of all liens,
encumbrances and adverse interests. By Employee delivering to the Company a
certificate or certificates representing such capital stock and stock options,
or this employment agreement, in each case duly endorsed for transfer or
accompanied by appropriate stock powers, and or notice of the exercise of the
right to have the Company repurchase the Employee's options and or stock. In
which case the Company shall be obligated to immediately deliver to the Employee
certified funds representing payment of the purchase price in full for all of
the stock, and with regard to the options an amount equal to the difference
between the exercise price owed by the Employee for the options and the above
referenced repurchase price payable by the Company for the shares that would
otherwise be issued in relation to the Employee's options being repurchased by
the Company. The term "aggregate price value" shall mean the value of the
optioned shares as set forth by the Company for the purposes of calculating the
withholding taxes for the applicable issuance period of the options being
repurchased. It is acknowledged that any options which vest due to the Change of
Control shall be deemed to have been issued on the date of vesting and thus the
latest stock price for such options shall be the price used to determine the
value for such accelerated vested options. This clause may be invoked by the
Employee in the case of any takeover or any Change of Control.

                  6.5 Term Life Insurance: The Company agrees to pay for a term
life insurance policy for the Employee in the amount of $1,500,000 for a period
of ten years starting as soon as the Employee qualifies for said insurance. Said
annual payments shall not exceed $5,000 per year and shall be made either
annually in advance or if the insurance company desires the total amount for the
ten year period will be placed into an escrow account controlled by the
insurance company. This term life insurance policy shall have a beneficiary
designated by the Employee and shall be an obligation of the company whether or
not the Employee is employed over the next ten years.

                                       2
<PAGE>   18
An Attachment A, an Indemnification Agreement for Directors and Officers shall
be -attached hereto and made a part hereof.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date hereinabove set forth.

Commonwealth Energy Corporation            Employee
A California Corporation
By:  /s/ John Barthrop                     By:  /s/ Ian B. Carter
   -------------------------------            ---------------------------------
     John Barthrop                               Ian B. Carter
     General Counsel

By:  /s/ Robert C. Perkins
   -------------------------------
     Robert C. Perkins, Director
     Compensation Committee

                                       3<PAGE>   1
                                                                   EXHIBIT 10.13
                                            RICHARD PAULSEN EMPLOYMENT AGREEMENT

                              EMPLOYMENT AGREEMENT

            THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of
November 1, 2000 between Commonwealth Energy Corporation, a California
corporation (the "Company") and Richard L. Paulsen ("Employee"), with reference
to the following:

            A.    Employee has heretofore acted as a Consultant to the
Company, and in that capacity has rendered valuable services to the Company.

            B.    The Company and Employee desire that Employee continue to
provide services to the Company as an employee of the Company on the terms
provided herein.

            NOW, THEREFORE, in consideration of the various covenants and
agreements hereinafter set forth, the parties hereto agree as follows:

1. Term of Employment. The Company hereby employs Employee and Employee accepts
such employment for a term of fifty-two (52) months, commencing on November 1,
2000 and terminating on December 31, 2004 (the "Initial Term"); notwithstanding
the foregoing, however, the term of this Agreement is subject to earlier
termination as provided in Section 7 below.

2. Title and Responsibilities. During the term of this Agreement, Employee shall
serve as Chief Operating Officer of the Company and President of the Company's
subsidiary Utilihost. In the performance of such duties Employee shall report
directly to (and only to) the Chief Executive Officer of the Company (the "CEO")
and shall, subject to the reasonable supervision and control of the CEO, have
the duties, responsibilities and authority commensurate with such positions in
companies comparable to the Company and Utilihost. Employee's office location
shall at all times be in offices of the Company located in Orange County,
California. Employee may be required to travel from time to time to the extent
reasonably necessary to the performance of his duties hereunder.

      Employee shall in good faith and consistent with his ability, experience
and talent perform the duties set forth in this Section 2, and shall devote
substantially all of his productive time and efforts to the performance of such
duties; provided, however, that Employee may participate in civic, charitable,
and other not-for-profit activities and manage personal and family investments
to the extent that the same does not materially conflict with the discharge of
his duties hereunder.

3. Compensation and Benefits. The Company shall pay and/or provide the following
compensation and benefits to Employee during the term hereof, and Employee shall
accept the same as payment in full for all services rendered by Employee to or
for the benefit of the Company:

      3.1 Base Salary. The Company shall pay Employee a salary of $275,000 per
annum for the first twelve months of the term of this Agreement, $325,000 per
annum for the second twelve months of the term, $375,000 per annum for the third
twelve months of the term, and $425,000 per annum thereafter (the "Base
Salary"). Notwithstanding the foregoing, the Base Salary shall be subject to
review from time to time (not less frequently than at the end of each fiscal
year of the Company) and, as a result thereof, may be increased (but not
decreased) at the discretion of the CEO and the Compensation Committee of the
Company's Board of Directors. In determining such increases in the Base Salary,
if any, the CEO and the Compensation Committee of the Company's Board of
Directors shall take into account, among other things, the Company's achievement
of the objectives set forth in its business plan and the Company's results of

                                       1
<PAGE>   2
operations. The Base Salary shall be payable in accordance with the payroll
practices of the Company in effect from time to time.

      3.2 Bonus Based Upon Meters Under Contract. Employee shall be paid a cash
bonus with respect to the calendar year ending December 31, 2001 provided that,
as of the last day of that calendar year, the number of meters under contract
for billing purposes under the TRIUMPH system is not less than 1,000,000.
Employee shall be paid a cash bonus with respect to each calendar year
thereafter in the amount indicated opposite that calendar year in the table
below, provided that, as of the last day of that calendar year, the Company has
increased the number of meters under contract for billing purposes under the
TRIUMPH system from the last day of the immediately preceding calendar year, on
a net basis, by a number of meters which is not less than the number of meters
indicated opposite that fiscal year:

<TABLE>
<CAPTION>
       Year Ending             Minimum No. of Meters         Bonus
       -----------             ---------------------         -----
<S>                            <C>                           <C>
       December 31, 2002       1,500,000                     $ 75,000
       December 31, 2003       2,000,000                     $100,000
       December 31, 2004       2,500,000                     $100,000
       Each year thereafter    1,000,000 more than the       $100,000
                               immediately preceding year
</TABLE>

            The bonus with respect to each calendar year shall be due and
payable no later than thirty (30) days following the last day of that year. In
addition, the Company has to show net income from operations for the year in
which the bonus was earned, except in the case of an expansion year, in which
case the bonus will be at the discretion of the Company's Board of Directors.
For purposes of this Section 3.2, "meters under contract for billing purposes
under the TRIUMPH h system" shall include all such meters of the Company's
customers, and all meters of any other company utilizing the TRIUMPH system.

      3.3 Bonus Upon Change in Control of the Company. If during the term of
this Agreement there is a Change in Control (as defined below), then the Company
shall pay to Employee, concurrently with such Change in Control, a cash bonus in
an amount equal to the sum of (a) eight times the Employee's then current annual
Base Salary; and (b) the amount of taxes payable by Employee under Internal
Revenue Code Section 280G with respect to the bonus contemplated by this Section
3.3. The bonus contemplated by this Section 3.3 shall be paid to Employee
whether or not Employee elects to terminate this Agreement pursuant to any of
the terms of this Agreement. For purposes of this Agreement, a "Change in
Control" shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), other than a trustee or other fiduciary holding
securities of the Company under an employee benefit plan of the Company, becomes
the "beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of (A) the outstanding shares of common stock of the Company, or (B) the
combined voting power of the Company's then-outstanding securities entitled to
vote generally in the election of directors; (ii) during any period of not more
than two consecutive years, not including any period prior to the date of this
Agreement, individuals who at the beginning of such period constitute the Board,
and any new director (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction described in
clause (iii) below) whose election by the Board or nomination by the Company's
shareholders was approved by a vote of at least a majority of the directors
still in office who either were in office at the beginning of such period or
whose election or nomination for election was previously so approved, ceases for
any reason to constitute a majority of the Board; or (iii) the Company is a
party to a merger or consolidation which results in the holders of voting
securities of the Company outstanding immediately prior thereto failing to
continue to represent (either by remaining outstanding or being converted into
voting securities of the surviving entity) at least 50% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the Company sells
or disposes of all or substantially all of the Company's assets or any
transaction having similar effect is consummated; or the Company is subject to a
hostile takeover in the form of a proxy fight or any other means that allows the
company to be controlled by a material change in the Board of Directors. In the
event the company is taken

                                       2
<PAGE>   3
over, whether hostile or otherwise, all financial payments and options, earned
or otherwise, shall be considered due and owing and shall be considered earned
as shown in the following paragraphs 3.1, 3.2, 3.3, 3.4, and 3.5. All payments
shall be made to the Employee prior to the changeover date of the event that
would take over the company.

      3.4 Stock Option Plan. Concurrently herewith, the Company shall grant to
Employee stock options entitling Employee to purchase 900,000 shares of the
Company's common stock, with an exercise price of $2.75 per share (the
"Options"). The right to exercise the Options shall be vested as to 225,000
shares covered thereby immediately upon the grant of the Options. The Options
shall vest as to an additional 225,000 shares on each of December 31, 2001,
December 31, 2002 and December 31, 2003; provided, however, that the Options
shall vest in full immediately prior to the consummation of any Change in
Control. The Options shall have a term of seven years (regardless of any
termination of Employee's employment, except as required by Section 422 of the
Internal Revenue Code with respect to those of the Options that are "incentive"
stock options within the meaning of that Section), and shall, to the maximum
extent permitted by law, be "incentive" stock options within the meaning of
Section 422 of the Internal Revenue Code. Employee shall be entitled to include
the shares purchased or purchasable upon exercise of the Options in any
registration statement hereafter filed by the Company under the Securities Act
of 1933, as amended, on a basis which is no less favorable to Employee than the
basis on which any other shareholder of the Company is entitled to include such
shareholder's shares in such registration statement.

      3.5 Stock Repurchase Option: In the event the company is taken over
through any event that takes control of the company itself or by taking control
of the Board of Directors, or a sale of assets as defined herein. Whether such a
takeover is considered non-consensual or not; hostile or not: all financial
payments due to the Employee and all options due to the Employee, at the sole
discretion of the employee, shall be considered due and owing and shall be
considered earned as shown in the following paragraphs 3.1, 3.2, 3.3, and 3.4.
Employee shall have the absolute right, subject to applicable State and Federal
securities laws, to be exercised in his sole discretion and in addition to any
other compensation or benefits payable to Employee hereunder, to require the
Company to repurchase from Employee all capital stock and stock options of the
Company then earned or to be earned by Employee at an aggregate repurchase price
(see definition below) equal to two (2) times the then aggregate price value of
the Company's capital stock; not to exceed a total price of $10.00 per share.
The employee, in the employee's sole and absolute discretion, may exercise such
right twenty-four (24) hours prior to the closing of such an event. Prior to the
closing, as defined herein, the Employee may elect to sell all or some of the
Employee's stocks and/or stock options and the Company shall agree to purchase
the same capital stock and stock options earned or to be earned by the Employee,
at the Employee's sole discretion. The Employee without any representation or
warranty by Employee may exercise this option; other than the Employee has good
title thereto free of all liens, encumbrances and adverse interests. By Employee
delivering to the Company a certificate or certificates representing such
capital stock and stock options, or this employment agreement, in each case duly
endorsed for transfer or accompanied by appropriate stock powers, and or notice
of the exercise of the right to have the Company repurchase the Employee's
options and or stock. In which case the Company shall be obligated to
immediately deliver to the Employee certified funds representing payment of the
purchase price in full for all of the stock, and with regard to the options an
amount equal to the difference between the exercise price owed by the Employee
for the options and the above referenced repurchase price payable by the Company
for the shares that would otherwise be issued in relation to the Employee's
options being repurchased by the Company. The term "aggregate price value" shall
mean the value of the optioned shares as set forth by the Company for the
purposes of calculating the withholding taxes for the applicable issuance period
of the options being repurchased. It is acknowledged that any options which vest
due to the Change of Control shall be deemed to have been issued on the date of
vesting and thus the latest stock price for such options shall be the price used
to determine the value for such accelerated vested options. This clause may be
invoked by the Employee in the case of any takeover or any Change of Control.

      3.6 Other Fringe Benefits. Employee shall be entitled to participate in
all of the Company's incentive and benefit plans and arrangements, including,
without limitation, all bonus, compensation and other incentive and benefit
plans or arrangements made available now or in the future by the Company to

                                       3
<PAGE>   4
its senior executives, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements, but on a
basis no less favorable than that afforded to any other director, officer or
employee of the Company. The Company shall also provide to Employee at the
Company's expense all health, medical, hospitalization, life and disability
insurance provided to other senior executives of the Company.

      3.7 Expenses. The Company shall promptly reimburse Employee for all
out-of-pocket expenses actually incurred by him in connection with the
performance of his duties hereunder, subject to Employee's furnishing the
Company with evidence in the form of receipts satisfactory to the Company
substantiating the claimed expenditures (such expenses being commensurate with
the office and executive position of Employee hereunder, and including first
class hotel and travel arrangements). Employee's right to be reimbursed for
expenses incurred prior to the termination of this Agreement shall survive
termination of this Agreement.

      3.8 Vacation. Employee shall be entitled to the number of paid vacation
days in each calendar year determined by the Board from time to time for the
Company's senior executive officers, but not less than twenty (20) business days
in any calendar year. Employee shall also be entitled to all paid holidays given
to the Company's senior executive officers.

      3.9 Automobile; Telephone; Etc. During the term hereof the Company shall
provide Employee $800 per month for the purposes of the Employee paying for an
automobile and related expenses. In addition, the Company shall provide a cell
phone and shall reimburse Employee for all charges incurred by him in connection
with the use thereof related to the performance of his duties hereunder.

      3.10 Withholding and other Deductions. All compensation payable to
Employee hereunder shall be subject to such deductions as the Company is from
time to time required to make pursuant to law, governmental regulation or order.

4. Representations and Warranties. Employee represents and warrants to the
Company that (a) Employee is under no contractual or other restriction or
obligation which is inconsistent with the execution of this Agreement, the
performance of his duties hereunder, or the other rights of the Company
hereunder; and (b) Employee is under no physical or mental disability that would
hinder the performance of his duties under this Agreement. The Company
represents and warrants to Employee that (i) the execution and delivery of this
Agreement by the Company and the performance of its obligations hereunder have
been duly authorized by the Board and no further corporate action on the
Company's part is necessary to authorize this Agreement and the performance of
such obligations; and (ii) this Agreement constitutes the valid and binding
obligation of the Company, enforceable by Employee against the Company strictly
in accordance with its terms (subject to laws in effect with respect to
creditors' rights generally and applicable principles relating to equitable
remedies).

5. Confidential Information. Employee acknowledges that the nature of Employee's
engagement by the Company is such that Employee will have access to Confidential
Information (as hereinafter defined) which has value to the Company. During the
term of this Agreement and at all times thereafter, Employee shall keep all of
the Confidential Information in confidence and shall not disclose any of the
same to any other person, except the Company's personnel entitled thereto and
other persons designated in writing by the Company or except as otherwise
required by law. Employee shall not use the Confidential Information for
Employee's personal gain or benefit outside the scope of Employee's engagement
by the Company. The term "Confidential Information," as used herein, means all
information or material not generally known by non-Company personnel which (a)
gives the Company some competitive business advantage or the opportunity of
obtaining such advantage or the disclosure of which could be materially
detrimental to the interests of the Company; (b) which is owned by the Company
or in which the Company has an interest; and (c) which is either (i) marked
"Confidential Information," "Proprietary Information" or other similar marking,
(ii) known by Employee to be considered confidential and proprietary by the
Company, or (iii) from all the relevant circumstances should reasonably be
assumed by Employee to be confidential and proprietary to the Company.

                                       4
<PAGE>   5
6. "Key Man" Insurance. The Company shall have the right to purchase "key-man"
life insurance covering Employee, in the name and for the benefit of the Company
and at the Company's expense in any amount not exceeding $2,000,000. Employee
shall cooperate in all reasonable respects with the Company's efforts to obtain
such insurance and shall submit to any required medical or other examination;
provided; however, that if such medical or other examination cannot be conducted
by Employee's personal physician, then Employee shall have the right to have his
personal physician attend the examination. Upon the termination of his
employment hereunder, Employee may acquire any such life insurance policy upon
paying the Company an amount equal to the insurance policy's cash surrender
value, if any, at the time of termination and reimbursing the Company for the
pro rata portion of any premium paid applicable to periods subsequent to the
termination.

7. Termination; Separation Compensation.

      7.1 Termination. Notwithstanding Section 1 above, Employee's employment
with the Company shall terminate upon the earliest to occur of any of the
following:

the death of Employee;

the "total disability" of Employee (as hereinafter defined);

the expiration of ten (10) days after the receipt by Employee of written notice
of termination executed by the Company if Employee willfully breaches or
habitually neglects the duties which he is required to perform under the terms
of this Agreement (unless caused by Employee's disability), provided that such
termination is approved by not less than a majority of the then current members
of the Company's Board of Directors;

the expiration of ten (10) days after the receipt by Employee of written notice
of termination executed by the Company if Employee shall make any intentional
material misrepresentation to the Company's Board of Directors, commit fraud,
embezzlement, misappropriation or any felony or other criminal act with respect
to Company, and/or any affiliates thereof, whether or not a criminal or civil
charge is filed in connection therewith, provided that such termination is
approved by not less than a majority of the then current members of the
Company's Board of Directors;

the expiration of one hundred eighty (180) days after receipt by the Company
of written notice of termination executed by Employee;

the expiration of ten (10) days after receipt by the Company of written notice
of termination executed by Employee if, without Employee's written consent,
there shall have been any adverse change in Employee's status, title, position,
duties, responsibilities or authorities contemplated by this Agreement; or

the expiration of ten (10) days after receipt by the Company of written notice
of termination executed by Employee if there shall have been a material breach
by the Company of any of its obligations under this Agreement, which default is
not cured within such ten day period.

      7.2 Definition of Total Disability. For purposes of this Agreement,
Employee shall be deemed to have suffered a "total disability" if he is unable
to perform substantially all of the duties theretofore performed by him under
this Agreement by reason of any medically determinable physical or mental
impairment which has lasted for not less than one hundred twenty (120)
consecutive calendar days or for one hundred fifty (150) calendar days (whether
or not consecutive) in any one hundred eighty (180) calendar days. Prior to
termination of this Agreement as a result of total disability, and
notwithstanding any failure or inability of Employee to render services
hereunder, the Company shall continue to pay and/or provide to Employee the
compensation and benefits specified in Section 3 hereof.

      7.3 Separation Compensation. If Employee's employment terminates pursuant
to Section 7.1(a), (b), (c), (d) or (e) of this Agreement, Employee shall be
entitled to receive the Base Salary and other

                                       5
<PAGE>   6
compensation and benefits provided for under this Agreement through the date of
termination, but shall not be entitled to receive any severance pay or
non-vested employment benefits or options, or any other termination benefits,
except to the extent otherwise required to be paid under applicable California
law. If Employee's employment terminates for any reason other than pursuant to
the provisions of this Agreement referred to in the immediately preceding
sentence, then Employee shall be entitled to receive (i) the Base Salary and
other compensation and benefits provided for under this Agreement through the
date of termination, and (ii) an amount equal to one and one-half times
Employee's then current annual Base Salary. The amount specified in clause (ii)
above shall be payable in eighteen (18) equal monthly installments, commencing
immediately following the termination of Employee's employment. The Company and
Employee both agree that the amount of the severance payment specified by the
immediately preceding sentence is reasonable under the circumstances existing at
the time of the execution of this Agreement.

      7.4 Mitigation. Employee shall not be required to mitigate the amount of
any payment provided for in this Section 7 by seeking other employment or
otherwise, and the amount of any payment or benefit provided in this Section 7
shall not be reduced by any compensation earned by Employee as a result of
employment by another employer or by any other benefits.

8. General Relationship. Employee shall be considered an employee of the Company
within the meaning of all federal, state and local laws and regulations
including, but not limited to, laws and regulations governing unemployment
insurance, workers' compensation, industrial accident, labor and taxes.

9. Indemnification Agreement. As a material inducement to Employee to execute
and deliver this Agreement, concurrently with the execution and delivery of this
Agreement, the Company and Employee have executed and delivered an
Indemnification Agreement in the form attached to this Agreement as Exhibit A.

10. Miscellaneous.

      10.1 Entire Agreement. This Agreement sets forth the entire understanding
of the parties with respect to the subject matter hereof, supersedes all
existing agreements between them concerning such subject matter, and may be
modified only by a written instrument duly executed by each party.

      10.2 No Assignment. This Agreement may not be assigned by the Company or
Employee without the prior written consent of the other (which consent may be
granted or withheld by such party in its sole and absolute discretion), and any
attempt to assign rights and duties without such written consent shall be null
and void and of no force and effect. Subject to the preceding sentence, this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns.

      10.3 Survival. The covenants, agreements, representations and warranties
contained in or made pursuant to this Agreement shall survive Employee's
termination of employment, irrespective of any investigation made by or on
behalf of any party.

      10.4  Third Party Beneficiaries.  This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not
a party to this Agreement.

      10.5 Waiver. The failure of either party hereto at any time to enforce
performance by the other party of any provision of this Agreement shall in no
way affect such party's rights thereafter to enforce the same, nor shall the
waiver by either party of any breach of any provision hereof be deemed to be a
waiver by such party of any other breach of the same or any other provision
hereof.

      10.6 Section Headings. The headings of the several sections in this
Agreement are inserted solely for the convenience of the parties and are not a
part of and are not intended to govern, limit or aid in the construction of any
term or provision hereof.

                                       6
<PAGE>   7
      10.7 Notices. All notices and other communications required or permitted
under this Agreement shall be in writing, served personally on, telecopied, sent
by courier or other express private mail service, or mailed by certified,
registered or express United States mail postage prepaid, and shall be deemed
given upon receipt if delivered personally, telecopied, or sent by courier or
other express private mail service, or if mailed when actually received as shown
on the return receipt. Notices shall be addressed as follows:

            (a)   If to the Company, to:

                        Commonwealth Energy Corporation
                        15901 Red Hill Avenue
                        Suite 100
                        Tustin, CA  92780

If to Employee, to:

                        Richard L. Paulsen
                        30842 Steeplechase Drive
                        San Juan Capistrano, CA 92675

            Either party may change its address for purposes of this Section by
giving to the other, in the manner provided herein, a written notice of such
change.

      10.8 Severability. All sections, clauses and covenants contained in this
Agreement are severable, and in the event any of them shall be held to be
invalid by any court, this Agreement shall be interpreted as if such invalid
sections, clauses or covenants were not contained herein.

      10.9 Applicable Law. This Agreement is made with reference to the laws of
the State of California, shall be governed by and construed in accordance
therewith, and any court action brought under or arising out of this Agreement
shall be brought in any competent court within the State of California, County
of Orange.

      10.10 Attorneys' Fees. If any legal action, arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of any
alleged dispute, breach, default or misrepresentation in connection with this
Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs it incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.

      10.11 Gender. Where the context so requires, the use of the masculine
gender shall include the feminine and/or neuter genders and the singular shall
include the plural, and vice versa, and the word "person" shall include any
corporation, firm, partnership or other form of association.

      10.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date hereinabove set forth.

<TABLE>
<S>                                                 <C>
      COMMONWEALTH ENERGY CORP.                     EMPLOYEE

      By:    /s/ Ian B. Carter                      /s/ Richard L. Paulsen
             ------------------------------         ----------------------------
             Ian B. Carter, Chairman of the         Richard L. Paulsen
             Board and CEO

      By:    /s/ Robert C. Perkins
             ------------------------------
             Robert C. Perkins, Director
             Compensation Committee
</TABLE>

                                       7
<PAGE>   8
Exhibit A - Indemnification Agreement, attached hereto and made a part hereof

                                       8

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