Washington Gas Light Company
Washington                                          1100 H Street, N.W.
Gas                                                 Washington, D.C. 20080

                                                    Direct Dial (202 -624-6116)




                                February 28, 1997

BY FAX
Ms. Eileen Stanek
Atlanta Gas Light Company
303 Peachtree Street, N.E.
Atlanta, Georgia 30308

             Re:     Amendment No. 1 to Displacement Service Agreement

Dear Eileen:

      Attached is a copy of a fully executed  agreement  between  Washington Gas
and  Atlanta  Gas Light  Company.  A hard copy will be sent out today by Federal
Express.

                                                         Sincerely,

                                                         /s/ Mac

                                                         Telemac N. Chryssikos






                                 AMENDMENT NO. 1
                         DISPLACEMENT SERVICE AGREEMENT

          This  Amendment  No. 1 , made  and  effective  as of this  14th day of
February 1997,  reflects the agreement of the parties to amend the  Displacement
Service Agreement  (Agreement) dated April 4, 1996 between  Washington Gas Light
Company (Seller) and Atlanta Gas Light Company (Buyer).

          Buyer and Seller agree to an extended  term of the  Agreement  through
April 15,  2001.  Effective  April 15, 1997,  the parties  agree that Article II
shall be replaced by the following provision:

          "II. Term. The parties agree to extend the Term of this Agreement
          to be effective  December 15, 1997 for four consecutive winter periods
          (Decmber 1 through the  following  April 15) through  April 15,  2001.
          Thereafter,  the Agreement shall continue in full force and effect for
          the same periods in subsequent years, on a year-to-year  basis, unless
          terminated  by either  party upon  written  notice given to the other,
          non-terminating  party no less than one hundred and twenty  (120) days
          prior to the commencement of the ensuing winter period."

          In all other  aspects,  the  Agreement  shall remain in full force and
effect.

          IN WITNESS  WHEREOF,  the parties have caused this Supplement No. 1 to
executed by their duly authorized officers, as of the day and year first written
above.

                                            Seller:

                                            WASHINGTON GAS LIGHT COMPANY
Witness:
By:  /s/Kathy McKee                         By: /s/J.M. Schepis
     Admin. Associate                           SVP
          (Title)                                       (Title)

                                            Buyer:

                                            ATLANTA GAS LIGHT COMPANY
Witness:
By:  /s/Eileen G. Stanek                    By: /s/Thomas H. Benson
     Director                                   Executive Vice President
          (Title)                                     (Title)