1
               SUBSEQUENT EVENTS

    (8)        In April 1997, HL&P redeemed all outstanding shares of its
               $9.375 cumulative preferred stock in satisfaction of mandatory
               sinking fund requirements.

               In April 1997, a subsidiary of Houston Industries Energy, Inc.
               (HI Energy) borrowed

               $167.5 million under a five-year term loan facility. The
               proceeds of the loan, net of a $17.5 million debt reserve
               account established for the benefit of the lenders, were used to
               refinance a portion of the acquisition costs of Light-Servicos
               de Eletricidade S.A. (Light).  The loan, which is non-recourse
               to the Company and HL&P, restricts payments of dividends if
               Light fails to meet certain financial covenants.  The loan is
               secured by, among other things, a pledge of the shares of Light.
               HI Energy acquired an 11.35 percent interest in Light in May
               1996 for $392 million.

               In February 1996, three Texas cities filed a lawsuit against
               HL&P and Houston Industries Finance, Inc., formerly a
               wholly-owned subsidiary of the Company, seeking recovery of
               unspecified damages relating to the alleged underpayment of
               municipal franchise fees.  In April 1997, the plaintiffs amended
               their pleadings to assert damages alleged to exceed $250
               million.  The Company and HL&P believe that the lawsuit is
               without merit.  The Company and HL&P cannot estimate a range of
               possible losses, if any, from this lawsuit, nor can any
               assurance be given as to its ultimate outcome.  For additional
               information regarding this lawsuit, reference is made to Note
               11(c) to the financial statements included in the Form 10-K,
               which Note is incorporated herein by reference.

               In May 1997, the Company sold in open market transactions 550,000
               shares of Time Warner Inc. (Time Warner) common stock for
               approximately $25 million, representing an average sales price of
               $45.49 per share, net of fees and other commissions .  For
               information regarding the Company's investment in Time Warner
               securities, see Notes 1(j) and 13 to the financial statements
               included in the Form 10-K.