Exhibit 10-B-7


             AMENDMENT TO SERVICE AGREEMENT UNDER RATE SCHEDULE ESS

         THIS  AMENDMENT is made and entered into  effective as of the first day
of  December,  1994 by and between  PUBLIC  SERVICE  COMPANY OF NORTH  CAROLINA,
hereinafter   referred  to  as  "Buyer,"  and  TRANSCONTINENTAL  GAS  PIPE  LINE
CORPORATION, hereinafter referred to as "Seller."

                              W I T N E S S E T H:
         WHEREAS, Buyer and Seller entered into an Agreement under Seller's Rate
Schedule ESS effective as of November 1, 1993, (Agreement); and

         WHEREAS, Buyer and Seller amended this Agreement on December 1,1993, in
order to provide for the increased capacity and  deliverability  attributable to
Phase I (as described in Seller's Eminence  Expansion  Application in Docket No.
CP90-2230-000)  of Seller's  Eminence  Storage Field  Expansion  approved by the
Federal Energy Regulatory  Commission  (Commission) on April 18,1991,  in Docket
No.  CP90-2230-000,  and the  allocation  of such  increased  deliverability  in
accordance with the  Commission's  Order on October 4,1993,  in Docket No. RS92-
86-004, et. al., (October 4 Order); and

         WHEREAS,  Buyer and Seller  desire to further  amend this  Agreement to
provide for the increased capacity and  deliverability  attributable to Phase II
(as described in Seller's amended Eminence  Expansion  Application in Docket No.
CP90-2230-005)  of Seller's  Eminence Storage Field Expansion in order to comply
with the allocation authorized by the October 4 Order; and

         WHEREAS,  Buyer and Seller intend that the  Agreement  shall be further
amended  effective  as of the  in-service  date of Phase  III (as  described  in
Seller's amended Eminence Expansion  Application in Docket No. CP90-2230-005) of
Seller's  Eminence  Storage  Field  Expansion  to  provide  for  any  applicable
revisions to the level of Storage Injection Quantity and Storage Demand Quantity
compared to Buyer's Storage Injection Quantity and Storage Demand Quantity as of
the effective date of Phase 11 in order to comply with the allocation authorized
by the October 4 Order.

         NOW THEREFORE,  in  consideration  of the premises and mutual covenants
hereinafter contained, the parties amend the Agreement as follows:

1. Article I is hereby  deleted in its entirety  effective  December 1, 1994 and
the following Article I, substituted therefor for the period extending until the
in-service date of Phase Ill of Seller's Eminence Storage Field Expansion:

ARTICLE I
SERVICE TO BE RENDERED

1. Subject to the terms and  provisions  of this  agreement and of Seller's Rate
Schedule ESS,  Seller agrees to inject into storage for Buyer's  account,  store
and withdraw from storage, quantities of natural gas as follows:

         To withdraw from storage up to a maximum  quantity on any day of 57,031
         Mcf, which quantity shall be Buyer's Storage Demand  Quantity,  or such
         greater daily quantity,  as applicable  from time to time,  pursuant to
         the terms and conditions of Seller's Rate Schedule ESS.









         To inject  into  storage a maximum  quantity  on any day of 3,802  Mcf,
         which quantity shall be Buyer's  Storage  Injection  Quantity,  or such
         greater daily quantity,  as applicable  from time to time,  pursuant to
         the terms and conditions of Seller's Rate Schedule ESS.

         To receive and store up to a total  quantity at any one time of 459,044
         Mcf, which quantity shall be Buyer's Storage Capacity Quantity.

2. Article I is hereby  deleted in its entirety  effective  upon the in- service
date of Phase 111 of Seller's Eminence Storage Field Expansion and the following
Article I substituted therefor:

         1.  Subject  to the  terms  and  provisions  of this  agreement  and of
         Seller's Rate  Schedule  ESS,  Seller agrees to inject into storage for
         Buyer's account, store and withdraw from storage, quantities of natural
         gas as follows:

         To withdraw from storage up to a maximum  quantity on any day of 45,625
         Mcf, which quantity shall be Buyer's Storage Demand  Quantity,  or such
         greater daily quantity,  as applicable  from time to time,  pursuant to
         the terms and conditions of Seller's Rate Schedule ESS.

         To inject  into  storage a  minimum  quantity  on any day 3,042 of Mcf,
         which quantity shall be Buyer's  Storage  Injection  Quantity,  or such
         greater daily quantity,  as applicable  from time to time,  pursuant to
         the terms and conditions of Seller's Rate Schedule ESS.

         To receive and store up to a total  quantity at any one time of 459,044
         Mcf, which quantity shall be Buyer's Storage Capacity Quantity.

Seller shall notify  Buyer of the  in-service  date of Phase 111 at least thirty
(30) days Prior to such

4.       Except as hereinabove amended, the Agreement shall remain in full force
and effect as written.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment.

                           TRANSCONTINENTAL GAS PIPE LINE CORPORATION
                           By /s/Frank J. Ferazzi
                           ----------------------
                           Vice President
                           Customer Service

                           PUBLIC SERVICE COMPANY NORTH CAROLINA,INC.
                           By /s/Franklin H. Yoho
                           ----------------------
                           Name Franklin H. Yoho
                           Title Sr. Vice President -
                           Marketing & Gas Supply