Exhibit 99

                    PUC Docket No. 24469
                 Memorandum of Understanding



1)   Open  access  delayed effective January 1, 2002,  until
     September   15,   2002,  subject   to   the   following
     provisions.

2)   Additional capacity auction suspended.

3)   The current pilot project is continued and caps are  to
     be addressed.

4)   Complete  the PTB fuel factor and PTB base rate  cases.
     Resulting   rates  to  be  "put  on  the   shelf"   and
     implemented when retail competition begins.  No interim
     escalation  of  the PTB fuel factor  during  the  delay
     period.

5)   The parties agree that programs contemplated under PURA
     Section 39.904 and 39.905 should move forward in  SERC.
     Expenses incurred implementing these procedures  should
     be reflected in the Company's annual report.

6)   A  collaborative process is to be initiated to  develop
     market  protocols and structures for  approval  by  the
     Commission, including independence issues.

7)   The  parties  acknowledge that the PUC is the  ultimate
     arbiter of whether EGS goes to full retail competition.
     In  making  that  determination,  the  Commission  will
     evaluate the ability of the OATT under which EGSI  will
     operate to support retail competition.

8)   An  appropriate  process  will  be  instituted  at  the
     Commission,   which  will  not  be  incompatible   with
     activities before the FERC, to evaluate the ability  of
     the  OATT  under  which EGSI will  operate  to  support
     retail competition.

9)   The  parties  acknowledge that the FERC  has  exclusive
     jurisdiction  over  the  OATT  under  which  EGSI  will
     operate.

10)  In   the  event  the  parties  conclude  that  a  fully
     functional RTO is not likely to be achieved in the 2002
     time frame, parties will endeavor to develop an interim
     structure  to  implement retail competition  no  sooner
     than September 15, 2002, pending the establishment of a
     functional RTO.

11)  Current  rates  and  the Docket No. 20150  fuel  factor
     methodology  will  continue until the  commencement  of
     retail  competition  unless addressed  in  the  interim
     solution referenced in 10) above.

12)  The  Company  will  discontinue the imputation  of  the
     revenues  associated  with  current  rates,  with   the
     exception of the IHE rate.

13)  If  a  party  initiates a rate case during  the  freeze
     period, then EGSI may recover transition to competition
     costs  incurred through December 31, 2001, only to  the
     extent necessary to maintain current rate levels.

14)  EGSI may file a good cause exception to seek an out-of-
     period surcharge, which application shall not be denied
     on the basis that the request for the surcharge was not
     filed  within the time frame prescribed by PUC Sub.  R.
     25.237(d).

15)  The  Company  will  continue to  seek  the  appropriate
     approvals pursuant to the Company's report of August 7,
     2001  to  the Commission Staff and OPC with respect  to
     the  business  separation  of  EGSI.   Actual  business
     separation will not occur until the eve of competition.

16)  The  parties will negotiate in good faith to  file  the
     Settlement  Agreement  document  consistent  with   the
     principles set forth above by October 19, 2001.