EXHIBIT 99(c)
                      PART II.  OTHER INFORMATION
ITEM 1.   LEGAL PROCEEDINGS.

               For a description of legal proceedings affecting the
          Company and its subsidiaries, including HL&P, reference is
          made to the information set forth in Item 3 of the 1993
          Combined Form 10-K and Notes 9, 10 and 11 to the Company's
          Consolidated and HL&P's Financial Statements in Item 8 of
          the 1993 Combined Form 10-K, which information, as qualified
          and updated by the description of developments in regulatory
          and litigation matters contained in Notes 10, 11 and 12 of
          the Notes to the Company's Consolidated and HL&P's Financial
          Statements included in Part I of this Form 10-Q, is
          incorporated herein by reference.

               In April 1994, two former employees of HL&P filed a
          lawsuit against the Company, HL&P and certain executive
          officers and directors of the Company and HL&P.  In this
          lawsuit (PACE AND FUENTEZ V. THE COMPANY, HL&P, ET AL.), the
          former employees alleged that certain officers and directors
          of the Company and HL&P had engaged in various acts of
          mismanagement.  The lawsuit, which purports to have been
          filed as a class action and shareholder derivative suit on
          behalf of all shareholders of the Company, is pending in the
          212th Judicial District Court of Galveston County, Texas.
          Management believes that the suit is without merit.

               In April 1994, the state district judge of the 268th
          Judicial District Court, Fort Bend County, Texas, dismissed
          for lack of subject matter jurisdiction a suit (PACE AND
          SCOTT V. HL&P) filed by two former employees of HL&P, who
          alleged that HL&P was charging illegal rates.  The claim was
          based on the argument that the Utility Commission had failed
          to allocate to ratepayers the alleged tax benefits accruing
          to the Company and HL&P by virtue of the fact that HL&P's
          federal income taxes are paid as part of a consolidated
          group.

               In March 1994, the United States District Court for the
          Southern District of Texas granted summary judgment in favor
          of the Company and HL&P and dismissed a lawsuit filed by
          former HL&P employees who claimed that their employment had
          been terminated in violation of the WORKER ADJUSTMENT AND
          RETRAINING NOTIFICATION ACT (WARN). In a separate order,
          another judge of the United States District Court for the
          Southern District of Texas granted summary judgment in favor
          of the Company and HL&P on the validity of releases executed
          by most of the employees who had been terminated in the 1992
          reduction which gave rise to the claims under the WARN Act. The
          question of the validity of those releases in the WARN Act case
          and in other pending cases involving that staff reduction was
          consolidated for decision. Notices of appeal to the United States
          Court of Appeals for the Fifth Circuit have been filed from both
          decisions. Other legal proceedings, which the Company and HL&P
          believe to be immaterial and without merit, have been filed by
          former employees of HL&P seeking damages alleged to have been
          caused by that staff reduction. Although there can be no assurance
          that additional proceedings asserting labor related claims will not

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          be filed, the Company and HL&P believe that the resolution
          of these claims will not have a material adverse effect on
          the Company's or HL&P's results of operations.