LONG ISLAND LIGHTING CO, S-3, 1994-04-04

LONG ISLAND LIGHTING CO
S-3, 1994-04-04
ELECTRIC & OTHER SERVICES COMBINED

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 4, 1994

REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------

LONG ISLAND LIGHTING COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------

<TABLE>
<S> <C>
NEW YORK 11-1019782
(State or other jurisdiction) (I.R.S. Employer
of incorporation or organization) Indentification No.)
</TABLE>

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175 East Old Country Road, Hicksville, New York 11801
516-755-6650
(Address and telephone number of principal executive offices)
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ANTHONY NOZZOLILLO, Senior Vice President and Chief Financial Officer
or
HERBERT M. LEIMAN, Assistant Corporate Secretary
LONG ISLAND LIGHTING COMPANY
175 East Old Country Road
Hicksville, New York 11801
516-755-6650
(Name, address and telephone number of agents for service)
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Copies to:
GEORGE J. FORSYTH, ESQ.
MILBANK, TWEED, HADLEY & McCLOY
1 Chase Manhattan Plaza
New York, New York 10005
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
------------------

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /X/

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
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- ------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT* OFFERING PRICE* REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debentures, General and Refunding Bonds,
Preferred Stock and Common Stock....... $500,000,000 100% $500,000,000 $172,414
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</TABLE>

* Estimated solely for the purpose of calculating the registration fee.

The prospectus, included in this Registration Statement is a combined
prospectus as permitted by Rule 429 under the Securities Act of 1933 and
includes $299,550,000 of securities previously registered and unissued under
Registration Statement No. 33-60744. In addition, if the Securities are issued
as General and Refunding Bonds, the prospectus will also cover $4,000,000 of
General and Refunding Bonds previously registered and unissued under
Registration Statement No. 33-45834.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION DATED APRIL 4, 1994

PROSPECTUS

$803,550,000

LONG ISLAND LIGHTING COMPANY
SECURITIES
------------------------------

Long Island Lighting Company (the "Company") may offer from time to time,
in one or more series, Debentures or General and Refunding Bonds (the "Debt
Securities") or Preferred Stock or Common Stock (the "Equity Securities")
(collectively, the "Securities"), on terms to be determined at the time of
offering. The aggregate offering price of the Securities will not exceed
$803,550,000. The form in which the Securities are to be issued, their specific
designation, aggregate principal amount or aggregate initial offering price,
maturity, if any, rate and times of payment of interest or dividends, if any,
redemption and sinking fund terms, if any, and other specific terms in respect
of which this Prospectus is being delivered will be set forth in a Prospectus
Supplement, together with the terms of offering of such Securities.

------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

------------------------------

The Securities will be sold through underwriters, including the underwriter
listed below (the "Underwriters"). The Prospectus Supplement applicable to each
sale of Securities hereunder will set forth the names of each such Underwriter,
the proposed amounts to be purchased by the Underwriters and the compensation of
such Underwriters. Pricing information and net proceeds to the Company from
the sale of such Securities will also be set forth in such Prospectus
Supplement. See "Plan of Distribution" herein.

------------------------------

LEHMAN BROTHERS
, 1994
<PAGE> 3
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

----------------

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports and other information with the Securities
and Exchange Commission (the "SEC"). Information as of particular dates
concerning Directors and Officers of the Company, their remuneration and any
material interest of such persons in transactions with the Company is disclosed
in proxy statements distributed to shareowners of the Company and filed with
the SEC. Such reports, proxy statements and other information can be inspected
and copied at the public reference facilities of the SEC at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's regional
offices at 500 West Madison Street, Chicago, Illinois 60661 and at 7 World
Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the SEC at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition,
certain securities of the Company are listed on the New York Stock Exchange and
the Pacific Stock Exchange where reports, proxy statements and other
information concerning the Company may be inspected.
<PAGE> 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

There are hereby incorporated by reference in this Prospectus the
following documents heretofore filed with the SEC pursuant to the Exchange Act:

1. The Company's Annual Report on Form 10-K for the Year Ended
December 31, 1993.

2. The Company's Current Reports on Form 8-K dated January 21,
1994 and February 7, 1994.

3. The description of the Common Stock, $5 Par Value, of the
Company contained in a registration statement filed under
Section 12 of the Exchange Act.

All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Securities hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part thereof from the
date of filing of such documents.

THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON
TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, UPON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS AND EXHIBITS
REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED BY REFERENCE IN THIS
PROSPECTUS. Exhibits not specifically incorporated herein by reference will be
furnished upon payment of 25 cents per page. Requests for such copies should
be directed to Investor Relations, Long Island Lighting Company, 175 East Old
Country Road, Hicksville, New York 11801, telephone number (516) 933-4914.

2
<PAGE> 5
THE COMPANY

The Company supplies electric and gas service in Nassau and Suffolk
Counties and to the Rockaway Peninsula in Queens County, all on Long Island,
New York. The principal executive offices of the Company are located at 175
East Old Country Road, Hicksville, New York 11801 and the general telephone
number is (516) 755-6650.

The Company's service territory covers an area of approximately 1,230
square miles. The population of the service area, according to the Company's
1993 estimate, is approximately 2.7 million persons, reflecting a .14% increase
since the 1990 census. This is a larger population than in each of 20 of the
50 states and includes approximately 98,000 persons who reside in Queens County
within the City of New York. The area served is predominantly residential, but
the Company receives approximately one-half of its electric revenues from
commercial and industrial customers. Although electronics and aerospace are
the largest manufacturing industries in the area, about 88% of total employment
is non-manufacturing. Industrialization is gradually increasing in Suffolk
County which, with three times the land area, has only one-third the population
density of Nassau County.

The percentages of total revenues and operating income before income
taxes derived from electric and gas operations for each of the last three years
ended December 31 are shown in the following table:

<TABLE>
<CAPTION>
Percentage of Percentage of Operating
Total Revenue Income*
------------- ------
Electric Gas Electric Gas
-------- --- -------- ---
<S> <C> <C> <C> <C>
1991 86 14 98 2
1992 84 16 92 8
1993 82 18 89 11
</TABLE>

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* Before income taxes.
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USE OF PROCEEDS

Unless otherwise set forth in the applicable Prospectus Supplement,
the Company plans to use the net proceeds from the sale of the Securities to
refund high-cost, long-term debt or Preferred Stock, to satisfy maturing debt
obligations, and to provide funds for working capital and for general corporate
purposes.

3
<PAGE> 6

RATIOS OF EARNINGS

Ratio of Earnings to Fixed Charges

The Company's ratios of earnings to fixed charges, including AFC and
RMC (as defined below), for each of the last five years ended December 31 were
as follows:

Year Ended December 31,

For purposes of computing the ratio of earnings to fixed charges for
rate-regulated public utilities, earnings represent principally net income
before the deduction of fixed charges and federal income taxes. Fixed charges
during the period include an interest factor and an amortization factor. The
interest factor includes the interest charges on long-term and short-term debt
and the portion of rentals deemed representative of the interest factor. The
amortization factor includes the amortization of debt expenses and discounts or
premiums related to any indebtedness.

Generally, the decrease in the ratio of earnings to fixed charges
since 1990 reflects many factors, including among others, decreases in the
Company's net income which have resulted from a lower allowed rate of return on
common equity and increases in total interest charges.

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* For the year ended December 31, 1989, earnings were inadequate to cover
fixed charges. To attain a one-to-one coverage, earnings were deficient by
approximately $1.1 billion as a result of the Company having recorded in
June 1989 the effects of two agreements: (1) an agreement among the
Company and the State of New York entered into in 1989 (the "1989
Settlement") settling certain issues relating to the Company and providing,
among other matters, for the transfer of the Shoreham Nuclear Power Station
("Shoreham") to the Long Island Power Authority, an entity of the State,
and (2) an agreement among the Company, certain of its former officers and
the class of ratepayers acting through counsel for the class entered into
in 1989 (the "Class Settlement") settling a lawsuit brought against the
Company under the federal Racketeer Influenced and Corrupt Organizations
Act (the "RICO Act"). Had the Company computed the ratio of earnings to
fixed charges without giving effect to the discontinuance of accruing
Allowance for Funds used during Construction ("AFC") on Shoreham and the
losses resulting from the 1989 Settlement and the Class Settlement, the
resulting ratio would have been 1.85.
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4
<PAGE> 7

Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends

The Company's ratio of earnings to combined fixed charges and
Preferred Stock dividends, including AFC and RMC (as defined below), for each
of the last five years ended December 31 were as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------

1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
1.61 1.59 1.60 1.64 *
</TABLE>

For purposes of computing the ratio of earnings to combined fixed
charges and Preferred Stock dividends for rate-regulated public utilities,
earnings represent principally net income before the deduction of fixed charges
and federal income taxes. Fixed charges during the period represent the
portion of rentals deemed representative of the interest factor, the interest
charges during the period on long-term and short-term debt and the amortization
of debt expenses and discounts or premiums related to any indebtedness.
Preferred Stock dividend requirements are computed by increasing Preferred
Stock dividends by an amount representing the pre-tax earnings which would be
required to cover such Preferred Stock dividend requirements.

- ---------------
* For the year ended December 31, 1989, earnings were inadequate to cover
combined fixed charges and Preferred Stock dividends. To attain a
one-to-one coverage, earnings were deficient by approximately $1.3 billion
as a result of the Company having recorded in June 1989 the 1989 Settlement
and the Class Settlement. Had the Company computed the ratio of earnings to
combined fixed charges and Preferred Stock dividends without giving effect
to the discontinuance of accruing AFC on Shoreham and the losses resulting
from the 1989 Settlement and the Class Settlement, the resulting ratio would
have been 1.42.
- ---------------

5
<PAGE> 8
Additional Information Concerning the Ratios of Earnings

The Company's ratios of earnings reflect certain accounting and
regulatory aspects of the utility industry and the Company's experience with
Shoreham.

Because of long-lead times in the construction of major capital
projects, utility ratemaking and accounting practices provide for the
recognition of AFC, a non-cash credit to income that represents the net cost of
borrowed funds for construction purposes and a reasonable rate of return upon a
utility's other funds when so used. The amount of AFC fluctuates from period
to period with changes in the cost of money, the level of construction
activity, the amount of construction work in progress included in rate base and
modifications in regulatory policy and the effect of regulatory disallowances.
AFC is traditionally recovered from customers over the service life of the
project through revenues when the project is completed and included in rate
base.

Generally accepted accounting principles ("GAAP") recognize that a
regulatory agency may take actions that create future economic benefits--the
essence of an asset--known as a regulatory asset. In considering the rate
relief to be granted to the Company upon the effectiveness of the 1989
Settlement, the Public Service Commission of the State of New York (the "PSC")
created such a regulatory asset, the Financial Resource Asset (the "FRA"), to
provide the Company with sufficient cash flows to assure its financial
recovery. The FRA is embodied in the Rate Moderation Agreement (the "RMA")
which is one of the constituent documents of the 1989 Settlement.

The FRA consists of two components, the Base Financial Component (the
"BFC") and the Rate Moderation Component (the "RMC"). The RMA provides that
the Company amortize the BFC over a forty-year period beginning July 1, 1989
and permits a full return on the unamortized balance. The BFC, as initially
established, represents the present value of the future net-after-tax cash
flows which were provided to the Company for its financial recovery and are
included in the Company's electric rates through an amortization over forty
years on a straight-line basis. The RMC reflects the difference between the
Company's revenue requirements under conventional ratemaking and revenues
resulting from the implementation of the rate moderation plan provided in the
RMA. This rate moderation plan is designed to hold electric rate increases to
the levels provided for in the RMA, subject to adjustments provided therein.
The Company's revenue requirements are those revenues needed to recover (i) the
rate of return allowed by the PSC and (ii) all other elements of its allowed
costs.

6
<PAGE> 9
DESCRIPTION OF THE SECURITIES

The Company will issue the Securities from time to time in one or more
series either as General and Refunding Bonds (the "New Bonds"), as Debentures
(the "New Debentures"), as Preferred Stock (the "New Preferred Stock") or as
Common Stock, par value $5 per share (the "New Common Stock"). The following
descriptions of the terms of such Securities set forth certain general terms
and provisions. The particular terms of the Securities offered by any
Prospectus Supplement (the "Offered Securities") will be described therein.

The statements herein do not purport to be complete and are qualified
in their entirety by express reference to the G&R Mortgage, the First Mortgage,
the Debenture Indentures, and the Restated and Amended Certificate of
Incorporation (the "Certificate of Incorporation") (each as defined below) and
to the definitions therein of the terms used herein.

Reference is made to the Prospectus Supplement relating to a
particular series of Securities offered thereby for, among other things, the
following terms or additional provisions of the Offered Securities: (1) the
form of the Offered Securities; (2) the title of the Offered Securities; (3)
any limit on the aggregate principal amount or number of shares of the Offered
Securities; (4) the price (expressed as a percentage of the aggregate principal
amount or price per share thereof) at which the Offered Securities will be
offered; (5) if applicable, the date or dates on which the Offered Securities
will mature; (6) if applicable, the rate or rates per annum at which the
Offered Securities will bear interest; (7) if applicable, the date from which
such interest on the Offered Securities will accrue, the dates on which such
interest will be payable and the record dates of any interest payment dates;
(8) if applicable, the date after which and the price or prices at which the
Offered Securities may, pursuant to any redemption or sinking fund provisions,
be redeemed by the Company and the other detailed terms of such redemptions;
(9) if applicable, the dividend rate (or method of calculation thereof); (10)
if applicable, the dividend payment dates and the date on which dividends will
commence being paid and (11) any additional terms of the Offered Securities.

Unless otherwise provided in a Prospectus Supplement relating thereto,
application will be made to list the Securities on the New York Stock Exchange.
Listing will be subject to meeting the requirements of the New York Stock
Exchange, including those relating to distribution.

General and Refunding Bonds

New Bonds and the G&R Mortgage

General: The New Bonds are to be issued under the General and
Refunding Indenture, dated as of June 1, 1975, between the Company and United
States Trust Company of New York, as Trustee (the "Trustee" or "G&R Trustee"),
as heretofore supplemented and amended and as hereinafter to be further

7
<PAGE> 10
supplemented in connection with the sale of each series of New Bonds (the "G&R
Mortgage"). Chemical Bank is Authenticating Agent and Paying Agent for the New
Bonds. All bonds (including the New Bonds) which may from time to time be
issued and outstanding under the G&R Mortgage are herein referred to as "G&R
Bonds."

Form and Exchange: Unless otherwise provided in a Prospectus
Supplement relating thereto, the New Bonds will be registered G&R Bonds,
without coupons, issuable in denominations of $1,000 and any integral multiple
thereof. The New Bonds may be exchanged for other New Bonds of the same series
of different authorized denominations and may be transferred at Chemical Bank
without charge to the holders thereof other than for applicable taxes or other
governmental charges.

Interest and Payment: Unless otherwise provided in a Prospectus
Supplement relating thereto, checks for the payment of interest will be mailed
to the registered holders. Principal is payable at the principal corporate
trust office of Chemical Bank located at 450 West 33rd Street, New York, New
York 10001.

Redemption Provisions: The New Bonds may not be redeemed prior to the
date set forth in the applicable Prospectus Supplement relating to a series of
New Bonds, except as set forth below under the heading "Extraordinary
Redemption." On or after such date, the New Bonds of such series may be
redeemed, as a whole or in part, at any time or times, upon at least 30 days'
notice, upon payment of the relevant percentage of the principal amount so
redeemed set forth in the applicable Prospectus Supplement (1) under the
heading "Special Redemption Price" in case of redemption from cash deposited
pursuant to the provisions of the G&R Mortgage relating to either the Sinking
and Improvement Fund or the Maintenance Fund as required in the G&R Mortgage
and (2) under the heading "Regular Redemption Price" in case of any other
redemption at the option of the Company, together, in each case, with interest
accrued thereon to the redemption date. For information regarding the
circumstances under which cash may be deposited pursuant to the provisions
relating to the Sinking and Improvement Fund and the Maintenance Fund, see the
discussion below under the headings "Sinking and Improvement Fund" and
"Maintenance Fund," respectively.

At the Company's election, any notice of redemption may provide that
it is subject to the deposit of the required redemption funds with the Trustee
before the date fixed for such redemption and will be of no effect if such
deposit is not made.

Extraordinary Redemption: The New Bonds may be redeemed at 100% of
their principal amount, together with interest accrued thereon to the
redemption date, upon at least 30 days' notice, as a whole, (i) at the
Company's election within 120 days of the acquisition date if all of the
Company's Common Stock is acquired by a governmental body or instrumentality,
or (ii) at any time that all or substantially all of the Company's property is
released from the lien of the G&R Mortgage.

8
<PAGE> 11
Issuance of Additional G&R Bonds: The G&R Mortgage provides that, so
long as the Company is not in default in the performance of any covenant to be
performed by it under the G&R Mortgage and obtains all requisite authorizations
of governmental bodies, it may issue additional G&R Bonds thereunder to the
extent of any one or more of the following: (1) 60% of the Bondable Value of
Property Additions ("BVPA"); (2) the amount of Refundable Prior Lien Bonds
theretofore or then retired or deposited with the Trustee or the trustee under
a Prior Lien (including bonds, other than Pledged Bonds, issued under the
Company's Indenture of Mortgage and Deed of Trust dated as of September 1,
1951, as supplemented and as to be further supplemented (the "First
Mortgage")), as provided in the G&R Mortgage; (3) the amount of certain G&R
Bonds theretofore or then retired or (4) the amount of cash deposited with the
Trustee against the issuance of G&R Bonds. Currently, for the reasons set
forth below, the Company is unable to issue G&R Bonds pursuant to (1) above.
However, based upon Refundable Prior Lien Bonds and retired G&R Bonds available
as a basis for issuance of New Bonds, as of December 31, 1993, the Company was
able to issue approximately $707 million of additional G&R Bonds.

Generally, when issuing G&R Bonds, the Company must satisfy a mortgage
interest coverage requirement (the "G&R Mortgage Interest Coverage"). The G&R
Mortgage Interest Coverage requires that the Net Earnings available for
interest for any twelve consecutive calendar months within the fifteen
consecutive calendar months preceding the issuance of the G&R Bonds be equal to
at least two times the stated annual interest payable on the G&R Bonds to be
outstanding and on Prior Lien Bonds (other than Pledged Bonds) to be
outstanding. Based upon earnings for the year ended December 31, 1993 and
after giving effect to the issuance of $707 million of New Bonds with an
assumed interest rate of 9% per annum, but without giving effect to the
redemption of any series of G&R Bonds or First Mortgage Bonds with the proceeds
of the New Bonds, the G&R Mortgage Interest Coverage would be 4.90.

The Company is unable at this time to issue additional G&R Bonds
pursuant to (1) above. When Property Additions are to be used as a basis for
the issuance of G&R Bonds, the G&R Mortgage requires recognition of any
depreciation, retirement or adjustment, such as the write-downs made pursuant
to the Financial Accounting Standards Board Statement of Financial Accounting
Standards ("SFAS") No. 90, Regulated Enterprises-Accounting for Abandonments
and Disallowances of Plant Costs and the retirement of Shoreham following the
effectiveness of the 1989 Settlement. Although the Company has had Property
Additions since the effectiveness of the 1989 Settlement and expects to
continue to do so in the future, the write-downs associated with SFAS No. 90,
retirements and other adjustments in 1988 and the retirement of Shoreham in
1989 resulted in a "deficit" in the BVPA which, at December 31, 1993, was $202
million. The existence of this deficit precludes the issuance of any G&R Bonds
on the basis of Property Additions at this time. However, the deficit is
expected to be eliminated by the end of 1994 allowing the Company to issue G&R
Bonds again on the basis of Property Additions beginning in 1995. There are no
other restrictions on the Company's ability to issue G&R Bonds on the basis of
Property Additions.

9
<PAGE> 12
Security and Priority: The New Bonds are to be secured together with
all other G&R Bonds, whenever issued, by a lien on substantially all of the
Company's property. Excluded from the lien of the G&R Mortgage are cash,
securities, contracts, accounts receivable, property owned by the Company
located outside the State of New York, products held for sale in the ordinary
course of business and all fuel (including nuclear fuel), materials and
supplies and other personal property which are consumable (otherwise than by
ordinary wear and tear) in their use in the operation of the plants of the
Company (unless and until such excepted property is expressly subjected by the
Company to the lien of the G&R Mortgage). The lien of the G&R Mortgage is
subject to Excepted Encumbrances (including the lien of the First Mortgage) and
certain minor restrictions. The G&R Mortgage contains provisions subjecting
after-acquired property to the lien thereof (subject to pre-existing liens)
except in the case of a consolidation or merger in connection with which
arrangements are made whereby no additional G&R Bonds are to be issued other
than for refunding purposes.

The lien of the G&R Mortgage, which is currently subordinate to the
lien of the First Mortgage, will become the Company's most senior mortgage lien
upon the Company's properties in 1997, the year in which the last of the
currently outstanding bonds under the First Mortgage ("First Mortgage Bonds")
matures. As of December 31, 1993, there were $1.7 billion of G&R Bonds
outstanding under the G&R Mortgage. The aggregate principal amount of First
Mortgage Bonds outstanding at December 31, 1993, exclusive of Pledged Bonds,
was $125 million maturing at various dates through 1997. At December 31, 1993,
the G&R Trustee held $1.0 billion of Pledged Bonds. Pledged Bonds are First
Mortgage Bonds which have been deposited with the Trustee under the G&R
Mortgage as additional security for the payment of the obligations represented
by the G&R Bonds. In connection with the issuance of the New Bonds, the
Company expects to issue, concurrently with the New Bonds, additional Pledged
Bonds. No other material Prior Liens exist at present. As the bonds currently
outstanding under the First Mortgage mature or are redeemed, such bonds will
represent a decreasing share of the security afforded by the lien of the First
Mortgage and to the extent that such bonds mature or are redeemed or additional
Pledged Bonds are issued, the Pledged Bonds will represent an increasing share
of the lien of the First Mortgage. When all outstanding bonds issued under the
First Mortgage (other than the Pledged Bonds) have been purchased, redeemed or
have matured, the Pledged Bonds will be surrendered and the First Mortgage
discharged.

Highly Leveraged Transaction Protection: The provisions in the G&R
Mortgage affording debt holders some protection in the event of a highly
leveraged transaction are those described under this heading and under the
headings "New Bonds and the G&R Mortgage -- Redemption Provisions," "Issuance
of Additional G&R Bonds" and "Security and Priority." In addition, in New York
State, the issuance of most debt securities, the acquisition by another
corporation of significant percentages of the corporate stock of a utility
company and generally the repurchase of a utility company's securities by that
company require the approval of the PSC.

10
<PAGE> 13
The G&R Mortgage provides that no merger or acquisition and no
transfer of all or substantially all of the Company's properties shall impair
the lien and security of the G&R Mortgage. The G&R Mortgage requires any
successor to the Company to expressly assume the obligations to the holders of
G&R Bonds. The provisions protecting the holders of G&R Bonds may be waived
only by those holders that are adversely affected. The percentage of any vote
required to carry any direction, waiver or consent depends upon the issue being
voted on. No proposal can be adopted with the vote of less than a majority of
the aggregate principal amount of outstanding G&R Bonds.

Pledged Bonds: The Company has agreed (except as indicated below)
that so long as any of the bonds now outstanding under the First Mortgage
remain outstanding, whenever it issues G&R Bonds (or withdraws, on the basis of
Property Additions, cash deposited with the Trustee which was the basis for the
authentication and delivery of G&R Bonds), it will also (to the extent
permitted by the terms of the First Mortgage, other than on the basis of the
deposit of cash, and applicable law and regulations) issue to and deposit or
pledge with the Trustee additional bonds under the First Mortgage to be held as
additional security for the G&R Bonds. Other than these Pledged Bonds, the
Company will not issue any additional bonds under the First Mortgage. Such
Pledged Bonds will be issued in a principal amount as near as may be equal to,
to the nearest $1,000,000 but not in excess of, the principal amount of G&R
Bonds then outstanding and then to be issued, less the principal amount of
Pledged Bonds then held by the Trustee. Except during the continuance of a
Completed Default hereafter described, no payment by way of principal, interest
or otherwise shall be made on any of the Pledged Bonds, and at their respective
maturities they are to be canceled. The G&R Mortgage provides that the Pledged
Bonds may not be sold by the Trustee. The Trustee may exercise, in its
absolute discretion without the consent of the Company, any and all rights of a
bondholder with respect to the Pledged Bonds then held by the Trustee and
participate in any bondholder proceedings relating to the First Mortgage.

All of the holders of the G&R Bonds share, equally and ratably, in the
benefits of the lien of the First Mortgage resulting from the issuance and
deposit of all Pledged Bonds. The total principal amount of such Pledged Bonds
will vary from time to time, depending principally upon the ability of the
Company to meet the tests for issuance of additional bonds under the First
Mortgage. Accordingly, the interest of the holders of G&R Bonds in the lien of
the First Mortgage through the Pledged Bonds may increase or decrease with each
new issue of G&R Bonds. The deposit of Pledged Bonds with the Trustee as
described above does not increase the total amount of property in which holders
of G&R Bonds have a direct or indirect security interest since the G&R Mortgage
constitutes a junior lien on substantially the same property that is subject to
the first lien of the First Mortgage.

The principal benefit to holders of G&R Bonds provided by the Pledged
Bonds is that the Pledged Bonds will provide such holders a means of
participating indirectly in the lien of the First Mortgage. If, for example,
in the event of a reorganization or insolvency, values allocated to the

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holders of bonds under both Mortgages were less than the principal amount of
and interest on bonds then outstanding under the First Mortgage, including the
Pledged Bonds, then the allocation to the holders of G&R Bonds would be
increased by reason of their participation with all other First Mortgage Bonds
through the Pledged Bonds, pari passu, in the lien of the First Mortgage.
Pledged Bonds issued and held by the G&R Trustee currently represent 89% of all
First Mortgage Bonds, including Pledged Bonds. The issuance of Pledged Bonds
in connection with the issuance of G&R Bonds is largely dependent upon the
availability of Property Additions and the use of available Property Additions
and retired First Mortgage Bonds to satisfy the Depreciation Fund and Sinking
Fund requirements under the First Mortgage.

For information respecting the amount of Pledged Bonds which the
Company is currently able to issue, see the discussion below under the heading
"Pledged Bonds and the First Mortgage -- Issuance of Pledged Bonds."

Sinking and Improvement Fund: The G&R Mortgage requires the Company
to make annual Sinking Fund deposits on or before June 30 of each year. The
amount to be deposited is to be equal to 1% of the principal amount of any G&R
Bonds issued thereunder (except G&R Bonds issued against retired G&R Bonds, G&R
Bonds retired with certain cash held by the Trustee and G&R Bonds issued to
secure other indebtedness) and of outstanding bonds (other than Pledged Bonds)
issued under the First Mortgage, in each case as of December 31 of the prior
year. Deposits are to be made in cash, reduced by credits elected by the
Company for (i) 60% of the BVPA, (ii) the principal amount of Refundable Prior
Lien Bonds and certain G&R Bonds previously issued and retired and (iii) cash
previously or concurrently deposited with the Trustee under the First Mortgage
pursuant to its Sinking Fund provisions and not withdrawn. Cash deposited
under the G&R Mortgage pursuant to this requirement may, during the next
succeeding three years, be withdrawn upon the same basis that a credit may be
taken as set forth in (i) and (ii) above, or may be applied to the payment,
purchase or redemption of G&R Bonds, including G&R Bonds subject to a mandatory
Retirement Fund. The 1993 Sinking Fund requirement, due on or before June 30,
1994, is expected to be approximately $24 million.

Sinking Fund cash amounting to $100,000 or more which has been held by
the Trustee for more than three years must be applied to the retirement of G&R
Bonds. Whenever cash held by the Trustee in the Sinking Fund is used by the
Trustee to purchase G&R Bonds and such G&R Bonds are purchased at less than the
principal amount thereof, an amount equal to the discount is to be paid to the
Company.

Maintenance Fund: The Maintenance Fund covenant under the G&R
Mortgage requires that the aggregate amount of Property Additions added
subsequent to December 31, 1974 must be, as of the end of each calendar year
subsequent to 1974, at least equal to the cumulative Provision for Depreciation
(as defined in the G&R Mortgage) from December 31, 1974. The Company is
required to satisfy Maintenance Fund obligations through the deposit of cash
or, in lieu of such deposit, through certification of retired G&R Bonds or
retired First Mortgage Bonds, if Property Additions cumulative from December
31, 1974 do not

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<PAGE> 15
equal or exceed the cumulative Provision for Depreciation. Currently, such
cumulative Property Additions exceed the cumulative Provision for Depreciation.
As of December 31, 1993, the amount of such cumulative Property Additions
calculated pursuant to the G&R Mortgage was approximately $9.4 billion,
including approximately $5.5 billion of Property Additions attributable to
Shoreham. Also, as of December 31, 1993, the amount of the cumulative
Provision for Depreciation, similarly calculated, was approximately $1.4
billion. The Company anticipates that the aggregate amount of cumulative
Property Additions will continue to exceed the cumulative Provision for
Depreciation and therefore deposits of cash or certifications of retired G&R
Bonds or retired First Mortgage Bonds will not be required to satisfy the
requirements of the Maintenance Fund.

Modification or Amendment of the G&R Mortgage: The rights of the
bondholders may be modified with the consent of the holders of 66-2/3% of the
principal amount of the G&R Bonds of all series affected. Notwithstanding the
foregoing, no modification is effective against any bondholder without his
consent if such modification would (a) alter the terms of payment of principal,
premium, if any, or of interest, (b) permit creation of additional prior or
parity liens other than Excepted Encumbrances, (c) reduce the percentage of the
principal amount of G&R Bonds required for modification or (d) reduce
materially the bondholders' security by depriving them in any respect of the
lien of the G&R Mortgage.

Default and Notice Thereof: Completed Defaults include (a) default in
the payment of principal of and premium, if any, on any of the G&R Bonds, (b)
default for 30 days in payment of interest on any of the G&R Bonds, (c) default
in the payment of principal or interest continued beyond the period of grace on
any Prior Lien Bonds (except Pledged Bonds), (d) default under the First
Mortgage continued beyond the period of grace specified therein, (e)
bankruptcy, insolvency or reorganization (under certain circumstances) of the
Company, (f) default in the performance of the covenant with respect to merger
or consolidation and (g) default, for 60 days after notice, in the performance
of any other covenant, agreement or condition in the G&R Mortgage. The holders
of 10% or more in principal amount of the outstanding G&R Bonds may give notice
of certain defaults. Holders of not less than 25% in principal amount of
outstanding G&R Bonds or the Trustee may declare the principal of and accrued
interest on all outstanding G&R Bonds due upon the occurrence of a Completed
Default. Under certain circumstances, including the curing of such Completed
Default, the holders of a majority in principal amount of the outstanding G&R
Bonds may annul any such declaration.

Holders of not less than a majority in principal amount of G&R Bonds
may direct the Trustee as to the time, method and place of enforcing the lien
of the G&R Mortgage, but the Trustee may decline to follow such direction
should its responsible officers determine that the directed action would
involve the Trustee in personal liability or would be unjustly prejudicial to
the rights of non-assenting holders of G&R Bonds.

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<PAGE> 16
The Trustee may require reasonable indemnification before being
required to enforce the lien of the G&R Mortgage.

Evidence as to Compliance with the Mortgage Provisions: On or before
June 30 of each year, certificates of Company Officers are required to be
furnished to the Trustee with respect to the BVPA and the absence of defaults
under the G&R Mortgage.

Pledged Bonds and the First Mortgag

General: The G&R Mortgage prohibits the issuance of additional bonds
under the First Mortgage except as Pledged Bonds. Upon the maturity on April
1, 1997 of the last series of non-pledged First Mortgage Bonds, the Company
will be able to remove the First Mortgage as a lien upon its properties and
will no longer be required to issue First Mortgage Bonds as Pledged Bonds.
Until that time, however, the Company anticipates that it will issue additional
Pledged Bonds concurrently with the issuance of each series of the New Bonds.
For a description of the circumstances under which additional Pledged Bonds of
the same and other series of First Mortgage Bonds are required to be issued and
a description of the new Pledged Bonds, see the discussion under the heading
"New Bonds and the G&R Mortgage -- Pledged Bonds" above and "Interest and
Payment" and "Issuance of Pledged Bonds" below, respectively.

IBJ Schroder Bank & Trust Company is the trustee under the First
Mortgage. Citibank, N.A. ("Citibank") is Paying Agent and Authenticating Agent
of the First Mortgage Bonds (including the Pledged Bonds). Citibank, in
addition, provides the Company with depository and other normal banking
services (including participation in the Company's bank credit facilities).

The statements herein concerning the First Mortgage, and the bonds
issued thereunder, do not purport to be complete and are qualified in their
entirety by express reference to the First Mortgage and to the definitions
therein of the terms used herein. The particular terms of the Pledged Bonds
issued concurrently with the issuance of the New Bonds will be described in the
Prospectus Supplement relating to such Bonds.

Interest and Payment: In connection with the issuance of each series
of New Bonds, the Company will, as required by the G&R Mortgage and to the
extent permitted by the First Mortgage, issue First Mortgage Bonds to be
pledged with the G&R Trustee. See the discussion under the heading "New Bonds
and the G&R Mortgage -- Pledged Bonds." The Pledged Bonds, to be issued
pursuant to a supplemental indenture to the First Mortgage, will mature on the
date set forth in an applicable Prospectus Supplement and will bear interest at
the rate shown in their title until maturity.

At a later date, the Company may issue and pledge additional First
Mortgage Bonds up to a principal amount equal to the principal amount of G&R
Bonds then outstanding. In the event of default, the Pledged Bonds will bear
interest at the rate of 6% per annum thereafter. However, the G&R Mortgage

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<PAGE> 17
provides that, except during the continuance of a Completed Default under the
G&R Mortgage, no payment by way of interest, principal or otherwise shall be
demanded or received on any Pledged Bonds.

Issuance of Pledged Bonds: Pledged Bonds may be issued (1) on the
basis of and in an amount up to 60% of Net Bondable Additions or (2) on the
basis of and in the amount of retired First Mortgage Bonds (initially issued on
the basis of Property Additions) only if Gross Income for twelve consecutive
months within the preceding fifteen months equals at least two times annual
interest charges on all bonds to be outstanding under the First Mortgage and
all prior lien obligations (the "First Mortgage Interest Coverage"). In this
calculation, the stated interest rate on Pledged Bonds is included even though
no interest is payable thereon except during the continuance of a Completed
Default under the G&R Mortgage. Gross Income is the sum of Utility Operating
Income and Other Income. Utility Operating Income is equal to the Company's
gross operating revenues less related expenses and deductions, taxes other than
income taxes and Minimum Depreciation. Minimum Depreciation is the greater of
(a) the amount actually charged on the Company's books as a utility operating
revenue deduction for the preceding calendar year for depreciation, depletion,
obsolescence, retirements and amortization of the Company's Utility Plant
("Book Depreciation") or (b) an amount equal to (i) 15% of gross operating
revenues (less the cost of electricity and gas purchased for resale) from
Utility Plant for such year less (ii) the amount actually expended for
maintenance of Utility Plant used during such year ("Revenue Depreciation").
Other Income is equal to the Company's gross non-operating revenues less
related expenses and deductions, up to an amount not to exceed 5% of Utility
Operating Income.

Based upon earnings for the year ended December 31, 1993, and after
giving effect to the Depreciation Fund and Sinking Fund requirements under the
First Mortgage, the Company will be able to issue concurrently with the
issuance of New Bonds approximately $234 million of Pledged Bonds with an
assumed average interest rate of 9% per annum. However, the maximum amount of
First Mortgage Bonds that the Company will be able to issue as Pledged Bonds
concurrently with the New Bonds will depend upon the amount of Net Bondable
Additions and the amount of retired First Mortgage Bonds then available.

Depreciation Fund: The Depreciation Fund covenant of the First
Mortgage requires that the Company pay to the Trustee under the First Mortgage,
by June 30 of each year, cash (which may be withdrawn up to the amount of Gross
Bondable Additions and First Mortgage Bonds made the basis for such withdrawal)
equal to Minimum Depreciation which is described above. Since the oil crisis
of the 1970s, Revenue Depreciation in each year has been greater than Book
Depreciation for such year. Under the First Mortgage, the Company may satisfy
this requirement with cash or through the delivery of First Mortgage Bonds or
through the certification of retired First Mortgage Bonds or Gross Bondable
Additions. Prior to the issuance in 1994 of any New Bonds, the Company intends
to satisfy the 1993 Depreciation Fund requirement with unused

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<PAGE> 18
Property Additions and retired First Mortgage Bonds. The 1993 Depreciation
Fund requirement, due on or before June 30, 1994, is approximately $216
million.

Assuming the Company's expenditures for capital improvements are
approximately $250 million annually, the Company expects that it will have
sufficient Property Additions and sufficient retired First Mortgage Bonds,
including Pledged Bonds, in 1995 and 1996, to satisfy the remaining annual
Depreciation Fund requirements under the First Mortgage. If the Company is
required to deposit any cash on any June 30 to satisfy in part or in full the
Depreciation Fund or Sinking Fund requirements of the First Mortgage, the
Company expects that it will be able to withdraw all or substantially all of
such cash on the basis of Net Bondable Additions or retired First Mortgage
Bonds.

Sinking Fund: The First Mortgage requires the Company to pay the
Trustee under the First Mortgage, by June 30 of each year, cash equal to 1% of
all previously issued First Mortgage Bonds (excluding bonds issued on the basis
of retired bonds). The 1993 Sinking Fund requirement due on or before June 30,
1994 is estimated to be $18 million. The annual Sinking Fund requirement will
increase upon the issuance of additional First Mortgage Bonds as Pledged Bonds
concurrently with the issuance of New Bonds. Thereafter, the annual Sinking
Fund requirement is not expected to change unless, when additional G&R Bonds
are issued, additional First Mortgage Bonds to be pledged are issued on the
basis of Net Bondable Additions. The Company expects that it will be able to
satisfy the remaining annual Sinking Fund requirements from its available
Property Additions and with retired First Mortgage Bonds which become available
through scheduled maturities.

Security and Priority: Bonds (including Pledged Bonds) issued or to
be issued under the First Mortgage are and will be secured by a direct first
lien on substantially all of the Company's properties (except cash, contracts,
accounts receivable and products held for sale or consumable in the ordinary
course of business), subject to Permitted Encumbrances and certain minor
restrictions. The First Mortgage contains provisions subjecting after-acquired
property (subject to pre-existing liens) to the lien thereof. There are no
securities or debt of senior rank (except those secured by Permitted
Encumbrances) and none of equal rank except bonds of other series outstanding
under the First Mortgage.

Defaults and Notice Thereof: Events of Default include default in the
payment of principal or satisfaction of any Sinking Fund obligation, default
for 30 days in payment of interest, default in performance of certain specified
covenants, default for 30 days after notice in performance of any other
covenant and certain events in bankruptcy, insolvency or reorganization. The
Trustee is required to give bondholders notice of defaults known to it within
90 days of the occurrence thereof, unless remedied before the giving of such
notice. The Trustee may withhold notice to bondholders of default (except in
payment of principal, interest or sinking or depreciation fund

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<PAGE> 19
obligations) if its responsible Officers think it in the interest of the
bondholders. The holders of 25% in amount of the Bonds or the Trustee may
accelerate maturity upon an Event of Default, and the holders of 10% in amount
of the Bonds may give notice of certain defaults. The holders of not less than
66-2/3% in principal amount of all Bonds of all series then outstanding
(excluding Bonds disqualified from participating) may on behalf of the holders
of all such Bonds waive any past default under the First Mortgage and its
consequences, except a default in the payment of the principal of, or premium
or interest on, any of the Bonds as and when the same shall become due by the
terms of such Bonds or upon a call for redemption. The holders of a majority
in amount of the Bonds may require the Trustee to proceed to enforce the
Mortgage and, with certain exceptions, may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee. The Company
is required to file annually with the Trustee a certificate as to existence or
nonexistence of defaults and as to compliance with certain terms of the
Mortgage.

Debentures

New Debentures and the Debenture Indenture

General: The New Debentures are to be issued either under the
Indenture, dated as of November 1, 1986, between the Company and The
Connecticut Bank and Trust Company, National Association, (predecessor in
interest to State Street Bank and Trust Company), as Trustee, as supplemented,
or under the Indenture, dated as of November 1, 1992, between the Company and
Chemical Bank, as Trustee, as supplemented. Both indentures are herein
referred to individually or collectively, as the case may be, as the "Debenture
Indenture." Likewise, State Street Bank and Trust Company and Chemical Bank
are herein referred to individually or collectively, as the case may be, as the
"Trustee." All debentures, including the New Debentures, which may from time
to time be issued and outstanding under the Debenture Indenture are herein
sometimes referred to as "Debentures."

The Debenture Indenture does not limit the amount of Debentures which
may be issued thereunder and provides that Debentures may be issued thereunder
up to the aggregate principal amount which may be authorized from time to time.
The New Debentures may be issued from time to time in one or more series. The
New Debentures will be unsecured obligations of the Company and will rank on a
parity with all other unsecured and unsubordinated indebtedness of the Company.

The New Debentures will be subordinate to the indebtedness outstanding
under the Company's two mortgages, each of which is a lien on substantially all
of the Company's properties, and to the indebtedness under the Company's
Revolving Credit Agreement, dated as of June 27, 1989, as amended (the "1989
Credit Agreement"), which is secured by a first lien on the Company's accounts
receivable and fuel oil inventory.

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The Company's senior mortgage is its First Mortgage. The lien of the
G&R Mortgage is subordinate to the lien of the First Mortgage. For a
description of the G&R Mortgage and the First Mortgage, see the discussion
above under the headings "New Bonds and the G&R Mortgage -- Security and
Priority" and "Pledged Bonds and the First Mortgage -- Security and Priority."
G&R Bonds are currently the only debt senior to the New Debentures which the
Company may issue. See "New Bonds and the G&R Mortgage -- Issuance of
Additional G&R Bonds."

In addition, the Company currently has outstanding $3.7 billion of
unsecured debt (including $2.9 billion of Debentures, and $817 million of
Electric Facilities Revenue Bonds, Pollution Control Revenue Bonds and
Industrial Development Revenue Bonds) with which all of the Company's
debentures, including the New Debentures, rank pari passu.

Form and Exchange: Unless otherwise provided in a Prospectus
Supplement relating thereto, the New Debentures will be issued only in fully
registered form, without coupons, in denominations of $1,000 and any integral
multiple thereof. The New Debentures may be presented for exchange or transfer
at the corporate trust office of the Trustee. No service charge will be made
for any transfer or exchange of the New Debentures, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

Interest and Payment: Unless otherwise provided in a Prospectus
Supplement relating thereto, checks for the payment of interest will be mailed
to the registered holders. Principal and premium, if any, will be payable at
the principal corporate trust office of the Trustee.

Modification of the Debenture Indenture: The Debenture Indenture and
the rights of the holders may be modified or amended by the Company with the
consent of the holders of not less than 66-2/3% in principal amount of
Outstanding Debentures of all series affected by the modification (voting as a
class). Notwithstanding the foregoing, no modification or amendment altering
the terms of payment of principal, premium, if any, or interest, changing the
place or medium of payment of principal, premium, if any, or interest,
impairing the rights of holders to institute suit for payment or reducing the
percentage required for certain modifications or waivers will be effective
against any holder without his consent. Under certain circumstances, the
Debenture Indenture may be modified without the consent of the holders.

Merger and Consolidation: The Debenture Indenture provides that the
Company may, without the consent of the holders of Debentures, consolidate with
or merge into any other corporation or convey, transfer or lease its assets
substantially as an entirety to any person, permit any person to consolidate
with or merge into the Company or acquire or lease the assets of any person
substantially as an entirety, provided that (i) the successor corporation (if
not the Company) shall be a domestic corporation and shall assume by a
supplemental indenture the Company's obligations under the Debenture Indenture,
(ii) immediately after giving effect to the transaction,

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<PAGE> 21
no Event of Default (as defined below), and no event which, after notice or
lapse of time or both, would become an Event of Default shall have occurred and
be continuing and (iii) certain other conditions shall have been met. Upon
compliance with these provisions by a successor corporation, except in the case
of a lease, the Company will be relieved of its obligations under the Debenture
Indenture.

Highly Leveraged Transaction Protection: Unless otherwise indicated
in a Prospectus Supplement, certain of the covenants described herein would not
necessarily afford debt holders protection in the event of a highly leveraged
transaction involving the Company. However, in New York State, the issuance of
most debt securities, the acquisition by another corporation of significant
percentages of the corporate stock of a utility company and generally the
repurchase of a utility company's securities by that company require the
approval of the PSC.

Events of Default: The Debenture Indenture defines an Event of
Default with respect to the Debentures of any series as being any one of the
following events: (a) default for 30 days in any payment of interest on that
series when due, (b) default in any payment of principal (or premium, if any)
on that series when due, (c) default in any payment of any sinking fund
installment on that series when due, (d) default for 60 days after the
appropriate notice in the performance of any other covenant in the Debentures
of that series or in the Debenture Indenture (other than a covenant included in
the Debenture Indenture solely for the benefit of any series of Debentures
other than that series), (e) default under any indebtedness for money borrowed
by the Company resulting in such indebtedness becoming due prior to maturity,
without such acceleration having been rescinded within 10 days after due notice
of such default as provided in the Debenture Indenture, (f) certain events in
bankruptcy, insolvency or reorganization of the Company or (g) any other Event
of Default provided with respect to Debentures of such series. In case an
Event of Default shall occur and be continuing with respect to the Debentures
of any series, the Trustee or the holders of not less than 25% in aggregate
principal amount of the Debentures then outstanding of that series may declare
the principal of the Debentures of such series (or, if the Debentures of that
series were issued as discounted Debentures, such portion of the principal as
may be specified in the terms of that series) to be due and payable. Any Event
of Default with respect to the Debentures of any series which has been cured
may be waived by the holders of a majority in aggregate principal amount of the
Debentures of that series then outstanding.

The Debenture Indenture requires the Company to file annually with the
Trustee a written statement signed by an Officer of the Company as to
compliance with all conditions and covenants under the Debenture Indenture.
The Debenture Indenture provides that the Trustee may withhold notice to the
holders of any default (except in payment of principal or premium, if any, or
interest or in payment of any sinking fund installment) if it considers it in
the interest of the holders to do so.

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<PAGE> 22
Subject to the provisions of the Debenture Indenture relating to the
duties of the Trustee in case an Event of Default shall occur and be
continuing, the Debenture Indenture provides that the Trustee shall be under no
obligation to exercise any of its rights or powers under the Debenture
Indenture at the request, order or direction of holders unless such holders
shall have offered to the Trustee reasonable indemnity. Subject to such
provisions for indemnification and certain other rights of the Trustee, the
Debenture Indenture provides that the holders of a majority in principal amount
of the Debentures of any series then outstanding shall have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee.

Defeasance Provisions: If, among other things, the Company deposits
irrevocably with the Trustee, in trust specifically for the benefit of the
holders of Debentures of a particular series, money and/or U.S. Governmental
Obligations which through the payment of interest thereon and principal thereof
in accordance with their terms will provide money in an amount sufficient to
pay (a) all of the principal of, premium, if any, and interest on the
Debentures of such series on the dates such payments are due in accordance with
the terms of such Debentures through their maturity or earlier redemption date
and upon satisfaction of certain other conditions set forth in the Debenture
Indenture, and (b) any mandatory sinking fund payments applicable to the
Debentures of such series on the day on which such payments are due and payable
in accordance with the terms of the Debenture Indenture and of the Debentures
of such series; at the Company's option, either: (i) the Company will be
discharged from any and all obligations in respect of such series of Debentures
or (ii) the Company will cease to be under any obligation to comply with
certain restrictive covenants contained in the Debenture Indenture. To
exercise any such option, the Company is required to meet certain conditions,
including delivering to the Trustee an opinion of counsel to the effect that
the Company has received from or there has been published by the Internal
Revenue Service a ruling to the effect that the deposit and related defeasance
would not cause the holders of the Debentures to recognize income, gain or loss
for federal income tax purposes as a result of such deposit, defeasance and
discharge.

If the Company elects to defease a series of Debentures pursuant to
its option (i) described above, it is possible that holders would be required
for federal income tax purposes to treat the defeasance as a taxable exchange
of that series of Debentures for interests in the trust, notwithstanding the
opinion of counsel. In that event, (1) a holder would recognize gain or loss
upon the defeasance in an amount equal to the difference between the holder's
tax basis for the holder's defeased Debentures and the value of the holder's
interest in the trust and (2) the trust should be treated as a trust for
federal income tax purposes, in which case each holder would report its
proportionate share of the income, gains, deductions and losses of the trust.
Purchasers of the New Debentures should consult their own advisers with

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respect to the tax consequences to them of such deposit and discharge,
including the applicability and effect of tax laws of taxing jurisdictions
other than the United States Government.

Relationship with Trustee: Chemical Bank, or its affiliates, is a
potential lender under the Company's Revolving Credit Agreement and
participates on a regular basis in various general financing and banking
transactions for the Company.

Equity Securities

For the year 1992, the Company reported to its shareowners that 100%
of Common Stock dividends and 100% of Preferred Stock dividends were to be
treated as a return of capital rather than ordinary income. However, for the
year 1993 the Company reported to its shareowners that 100% of Common Stock
dividends and 100% of Preferred Stock dividends were to be treated as ordinary
income rather than return of capital. Whether or not any portion of the
dividends, if any, in future years will constitute a return of capital or
taxable gain and, therefore, not be treated as ordinary dividend income is
dependent upon the current and accumulated earnings and profits of the Company
and the shareowner's tax basis for his shares. Whether the Company has current
or accumulated earnings and profits will depend upon a number of factors
including, but not limited to, the net operating loss carryforward, future rate
relief, the resultant earnings of the Company, the size of the Company's
construction program and changes in income tax laws. Furthermore, earnings and
profits are attributable to Preferred Stock dividends before they are
attributable to Common Stock dividends. The calculation to determine the
amount of dividends considered a return of capital is subject to audit by the
Internal Revenue Service.

Preferred Stock

General: The Company is authorized to issue 7,000,000 shares of $100
Par Value Preferred Stock and 30,000,000 shares of $25 Par Value Preferred
Stock, issuable in series, each with such serial designation, dividend rate,
redemption prices, sinking fund provisions and conversion privileges as the
Board of Directors may by resolution fix and determine prior to issuance of a
particular series. At December 31, 1993, 1,515,375 shares of $100 Par Value
Preferred Stock were issued and outstanding. At that date, 22,658,000 shares
of $25 Par Value Preferred Stock were issued and outstanding. Any shares of
Preferred Stock that are redeemed, converted or otherwise acquired by the
Company, including shares of Preferred Stock redeemed with the proceeds of the
New Preferred Stock and shares of Preferred Stock held as treasury shares that
will be used to satisfy the requirements of sinking funds, may be restored to
the status of authorized but unissued shares.

The New Preferred Stock will be fully paid and nonassessable and will
have no preemptive rights. Each series of the New Preferred Stock will rank on
a parity with each other series of Preferred Stock as to receipt of

21
<PAGE> 24
dividends and liquidating distributions. The rights of the holders of each
series of New Preferred Stock will be subordinate to those of the Company's
general creditors.

Issuance of Additional Preferred Stock: The Certificate of
Incorporation provides that the Company may issue Preferred Stock if, for any
twelve consecutive calendar months within the fifteen calendar months
immediately preceding the calendar month within which such additional shares
are to be issued, the net earnings of the Company available for the payment of
interest charges on its interest-bearing debt, determined after provision for
depreciation and all taxes and in accordance with sound accounting practice,
shall have been at least 1.5 times the aggregate of the annual interest charges
on the interest-bearing debt of the Company and annual dividend requirements on
all shares of, or ranking on a parity with, Preferred Stock to be outstanding
immediately after the proposed issue of such shares of, or ranking on a parity
with, the Preferred Stock (the "Earnings Ratio"). When interest-bearing
indebtedness or shares of Preferred Stock are to be retired with the proceeds
of a new series of Preferred Stock, there shall be excluded from the
computation of the Earnings Ratio the interest charges on such interest-bearing
indebtedness and the annual dividend requirements on such shares of Preferred
Stock. Currently, the Company cannot meet the Earning Ratio and therefore is
unable to issue any Preferred Stock at this time except as indicated in the
following two sentences. When the Earnings Ratio cannot be met, the
Certificate of Incorporation permits Preferred Stock to be issued in connection
with the purchase, redemption or other acquisition of outstanding Preferred
Stock if the aggregate annual dividend requirement and the aggregate amount
payable in a voluntary liquidation of the Preferred Stock to be issued do not
exceed the respective amounts for the Preferred Stock which is to be purchased,
redeemed or otherwise acquired. Preferred Stock may also be issued beyond
amounts permitted under the Earnings Ratio with the approval of at least
two-thirds of the votes entitled to be cast by the holders of the total number
of shares of outstanding Preferred Stock.

Dividend Rights: The Company's ability to pay dividends on its
Preferred Stock is dependent upon, among other factors, action by the Company's
Board of Directors, the Company's financial condition, its ability to comply
with provisions of the Certificate of Incorporation and the availability of
retained earnings, future earnings and cash. Dividends on each series of the
New Preferred Stock will be payable quarterly at the annual rate set forth in
their title, accruing from the date of original issue, on the dates set forth
in the Prospectus Supplement relating to such series of New Preferred Stock.
Dividends on the shares of all series of Preferred Stock are cumulative,
payable in cash, when and if declared by the Board of Directors out of funds
legally available therefor, in preference to dividends on the Common Stock or
any other stock ranking junior to the Preferred Stock. If stated dividends are
not paid in full, the shares of all series of Preferred Stock share ratably in
the payment of dividends. The Company's First Mortgage restricts dividends and
other distributions on, and certain purchases and redemptions of, capital stock
to an amount no greater than Net Income (as defined therein) since June 30,
1950.

22
<PAGE> 25
Conversion Rights: The New Preferred Stock will not have any
conversion rights. The only outstanding series of Preferred Stock which has
conversion rights is the Series I Convertible Preferred Stock.

Liquidation Rights: Unless otherwise set forth in the applicable
Prospectus Supplement, upon voluntary dissolution, liquidation or winding up of
the Company, the holders of the New Preferred Stock are entitled to receive an
amount equal to the applicable optional redemption price of each share plus
accrued dividends. Upon involuntary dissolution, liquidation or winding up of
the Company, the holders of the New Preferred Stock are entitled to receive an
amount equal to the par value of each share plus accrued dividends, in either
case in preference to any stock ranking junior to it. If amounts payable on
either voluntary or involuntary liquidation are not paid in full, the shares of
all series of Preferred Stock share ratably in any distribution of assets.

Optional Redemption: Unless otherwise set forth in the applicable
Prospectus Supplement, the New Preferred Stock will be redeemable at the
optional redemption price or prices and on the date or dates set forth in the
applicable Prospectus Supplement, plus, in each case, accrued dividends to the
date of redemption, on not less than 30 nor more than 60 days' notice. If less
than all of the shares of any series of the New Preferred Stock are to be
redeemed, the shares to be redeemed shall be selected pro rata among the
holders thereof or by lot, as determined by the Company's Board of Directors.

At the option of the Company, the Preferred Stock of all currently
outstanding series may be redeemed or refunded at any time, in whole or in part
(except that the Series L, R, AA, CC, GG, NN, QQ and UU Preferred Stock are
subject to certain restrictions regarding redemption). The Certificate of
Incorporation and existing law do not restrict the redemption or purchase of
Preferred Stock by reason of any default in dividends, except for the
provisions mentioned above requiring ratable dividend and liquidation payments
on Preferred Stock, and except that no partial redemption of Series L, R, NN
and UU Preferred Stock may be made unless full cumulative dividends on such
series of Preferred Stock have been paid or declared and set apart for payment.

Restrictions on Payments on Junior Stock and Sinking Fund Payments on
Other Stock: The Company may not declare or pay any dividend on, or make any
other payment or distribution in respect of, the Company's Common Stock or any
other stock ranking junior to the Preferred Stock, unless full cumulative
required sinking fund redemptions of the Preferred Stock have been made. No
redemptions or purchases of shares of any other series of Preferred Stock or
other shares ranking on a parity with the New Preferred Stock may be made
pursuant to any sinking or analogous fund requirement if any required
redemption of the New Preferred Stock is in arrears unless the redemptions or
purchases of the New Preferred Stock and such other shares are made pro rata
according to the amounts in arrears in redemptions or purchases required for
the respective requirements.

23
<PAGE> 26
The only series of previously issued Preferred Stock entitled to a
sinking fund are the Series L, R, NN and UU Preferred Stock.

Voting Rights: Except as indicated below or provided by applicable
law, holders of Preferred Stock have no voting rights.

The consent of two-thirds of the votes entitled to be cast by holders
of the outstanding Preferred Stock is required for (a) amending the Certificate
of Incorporation in a manner adversely affecting the Preferred Stock otherwise
than by increasing the authorized number of shares thereof, but, if less than
all the series of Preferred Stock are affected, only the consent of two- thirds
of the votes entitled to be cast by holders of shares of all affected series is
required; (b) creating any class of stock, or securities convertible into
shares of stock, senior to the Preferred Stock or (c) with certain exceptions,
issuing any shares of, or ranking on a parity with, the Preferred Stock unless
the Earnings Ratio is met.

The consent of a majority of the votes entitled to be cast by holders
of the outstanding Preferred Stock is required to (1) sell, lease, exchange,
assign, transfer or convey all or substantially all the property or business of
the Company or, unless the status and preferences of the Preferred Stock
survive, to merge or consolidate into or with any other company or (2) increase
the authorized number of shares thereof.

If and when any four quarterly dividends on any Preferred Stock are in
default, and until all dividends in default have been paid or declared and set
aside for payment, the holders of the Preferred Stock are entitled, as a class,
to elect the smallest number of Directors constituting a majority of the full
Board of Directors. The terms of office of all persons who may be Directors of
the Company will terminate upon the election of a majority of the Board of
Directors by the holders of the Preferred Stock and the holders of the
Company's Common Stock will have the right to elect the remaining Directors of
the Company. If and when all dividends then in default on the shares of
Preferred Stock then outstanding shall be paid or declared and set aside for
payment, the right of the holders of the Preferred Stock to elect Directors
will terminate, subject to the future vesting of such right if dividends on any
shares of Preferred Stock are in default as set forth above. Upon the
termination of any such special voting right, the terms of the Directors
elected by the holders of the Preferred Stock will terminate and the resulting
vacancies will be filled by the vote of a majority of the remaining Directors.

Whenever holders of Preferred Stock vote as a class, the holders of
the $100 Par Value Preferred Stock are entitled to one vote for each share held
and the holders of the $25 Par Value Preferred Stock are entitled to
one-quarter of one vote for each share held.

Income Tax: Dividends on the New Preferred Stock will be eligible for
the dividends-received deduction afforded to corporate holders by Section 243
of the Internal Revenue Code as presently in effect, to the extent that the

24
<PAGE> 27
dividends are paid from the "current or accumulated earnings and profits" of
the Company for federal income tax purposes. For additional income tax
information, see the previous discussion under the heading "Equity Securities".

Transfer Agent and Registrar: The transfer agent and registrar for
the New Preferred Stock will be The Bank of New York, Shareholder Services
Dept., 11th Floor, 101 Barclay Street, New York, New York 10286-1258.

Common Stock

General: The Company is presently authorized under the Certificate of
Incorporation to issue 150,000,000 shares of Common Stock. Of those authorized
shares, 112,332,490 shares of Common Stock were issued and outstanding at
December 31, 1993.

Dividends: The Company has paid dividends on its Common Stock in each
quarter beginning October 1, 1989. Dividends per share declared on the Common
Stock during the last five years were as follows:

Although the Company contemplates the continuation of quarterly
dividend payments, the payment of future dividends is dependent upon, among
other factors, action by the Company's Board of Directors, the Company's
financial condition, future earnings and the availability of cash.

Dividend Limitations: No dividends may be declared on Common Stock
unless all past and current dividends on outstanding Preferred Stock and
Preference Stock have been paid or declared and set apart for payment and all
requisite sinking fund redemptions have been made on the Series L, R, NN and UU
Preferred Stock. There are presently no shares of Preference Stock
outstanding. Other Common Stock dividend limitations contained in the First
Mortgage securing the First Mortgage Bonds are not material.

For information regarding the treatment for federal income tax
purposes of dividends either as ordinary income or return of capital, see the
discussion above under the heading "Description of the Securities -- Equity
Securities."

Voting Rights: Ordinarily, the holders of the Company's Common Stock
have sole voting power to elect Directors based on the cumulative voting
method. The Company's Certificate of Incorporation provides, however, that
when dividends payable on any series of Preferred Stock shall be in default in
an amount equivalent to or exceeding four full quarterly dividends, the holders
of shares of Preferred Stock, voting separately as a class and regardless of
series, are entitled to elect at a Special Meeting called upon demand of a
holder of Preferred Stock and at each Annual Meeting thereafter

25
<PAGE> 28
until Preferred Stock dividends are paid or declared and funds set aside for
payment, the smallest number of Directors necessary to constitute a majority of
the full Board of Directors. For a further discussion of voting rights of
holders of Preferred Stock, see "Description of the Securities -- Preferred
Stock Voting Rights."

In addition, the assent of varying proportions of the votes which the
holders of the Preference Stock are entitled, as a class, to elect two
Directors to the Board of Directors, which right does not terminate until full
dividends have been provided for all past periods and for the current period.
In addition, the assent of varying proportions of the votes which the holders
of shares of Preference Stock are entitled to cast is required for certain
action: (i) two-thirds to amend the Certificate of Incorporation adversely to
the Preference Stock; (ii) two-thirds to create a class of shares or securities
convertible into shares senior to Preference Stock and (iii) a majority to
increase the authorized number of shares of Preference Stock. None of the
7,500,000 authorized shares of Preference Stock are outstanding.

Preemptive Rights: Holders of the Company's Common Stock do not have
preemptive rights to purchase additional shares of Common Stock or securities
convertible into such shares. From time to time, however, the Company may, at
its option, offer shares of Common Stock in a rights offering so that
shareowners may purchase additional shares of Common Stock in amounts
proportionate to their holdings.

Other Rights: In the event of liquidation, the holders of the Common
Stock are entitled to all assets that remain after satisfaction of creditors
and the liquidation preferences of outstanding Preferred Stock and, if any,
outstanding Preference Stock. The outstanding shares of Common Stock are, and
the additional shares of Common Stock which may be offered hereby upon issuance
will be, fully paid and non-assessable.

The number, designation, relative rights, preferences and limitations
of the shares of the Preferred Stock (including the adjustment provisions of
the Convertible Preferred Stock), of the Preference Stock, if any, and of the
Common Stock of the Company are stated in full in the Company's Certificate of
Incorporation.

Transfer Agent and Registrar: Unless otherwise provided in a
Prospectus Supplement relating thereto, the transfer agent and registrar for
the Common Stock is The Bank of New York, Shareholder Services Dept., 11th
Floor, 101 Barclay Street, New York, New York 10286-1258.

26
<PAGE> 29
EXPERTS

The financial statements of the Company appearing in the Company's
Annual Report on Form 10-K for the year ended December 31, 1993 have been
audited by Ernst & Young, Independent Auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.

None of the experts or counsel referred to herein as having prepared
or certified any part of the Registration Statement was employed on a
contingent basis or, at the time of such preparation or certification or at any
time thereafter, had or has a substantial interest in the Company or its
subsidiaries or was or is connected with the Company or its subsidiaries as a
promoter, underwriter, voting trustee, director, officer or employee, except
Robert J. Grey, Esq., General Counsel. At February 28, 1994, Mr. Grey owned
55 shares of the Common Stock of the Company.

Mr. Grey is an indemnitee of the Company, being a party to an
Indemnification Agreement. Under the provisions of that agreement, Mr. Grey is
indemnified for any losses associated with rendering the legality opinion
referred to under the heading "Legality" to the extent permitted under Section
721 of the New York Business Corporation Law (the "BCL").

LEGALITY

Legal matters in connection with the issuance of the Securities
offered hereby will be passed upon for the Company by Mr. Grey and for the
Underwriters by Milbank, Tweed, Hadley & McCloy, New York, New York.

27
<PAGE> 30
PLAN OF DISTRIBUTION

The Securities will be sold through underwriters, including Lehman
Brothers Inc., pursuant to one or more Underwriting Agreements.

Each Underwriting Agreement will provide that the obligations of the
Underwriters are subject to certain conditions precedent, and that the
Underwriters will be obligated to purchase all of the Securities offered by any
Prospectus Supplement if any of the Securities are purchased, provided that
under certain circumstances involving defaults of one or more of the
Underwriters which aggregate in excess of ten percent of the aggregate
principal amount or the number of shares of such Securities, the Company may
either terminate such Underwriting Agreement or require each non-defaulting
Underwriter to purchase the amount of Debt Securities or the number of shares
of Equity Securities set forth in such Prospectus Supplement plus an amount
equal to one-ninth thereof, in which case less than all of the Securities may
be sold.

The Company has been advised that the several Underwriters propose
initially to offer the Securities to the public at the public offering price
set forth on the cover page of the applicable Prospectus Supplement, and to
certain dealers at such price less a concession to be set forth in such
Prospectus Supplement. Underwriters may allow, and such dealers may re-allow,
a concession to be set forth in such Prospectus Supplement to certain other
dealers. After the initial public offering of the Securities, the public
offering price and concessions may be changed.

Each Underwriting Agreement will provide that the Company indemnify
the several Underwriters against certain civil liabilities including
liabilities arising under the Securities Act of 1933, as amended.

Lehman Brothers Inc. has served as managing underwriter for public
offerings of securities of the Company on numerous occasions since 1981. In
addition, during the past seven years such firm has performed financial
advisory services for the Company, including acting as its financial advisor in
the 1988 and 1989 Settlements, and has served as Remarketing Agent of certain
long-term tax-exempt securities of the New York State Energy Research and
Development Authority, the proceeds of which have been used for Company
projects.

28
<PAGE> 31
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

<TABLE>
<S> <C>
Filing Fees -- Securities and Exchange Commission.......... $ 172,414
*Accounting Fees............................................ 200,000
*Fees of Trustee, and their counsel......................... 310,000
*Fees of Rating Agencies.................................... 338,000
*Printing Expenses.......................................... 213,000
*Miscellaneous Expenses..................................... 200,000
----------
*SubTotal Expenses........................................ 1,433,414
**Mortgage Recording Tax and related fees.................... 5,850,000
***New York Stock Exchange listing fees....................... 32,200
***Organizational taxes....................................... 115,000
----------
*Total Expenses........................................... $7,430,614
- ------------------ ==========
</TABLE>

* Estimated.
** Required only if the Securities are issued as New Bonds.
*** Required only if Equity Securities are issued.
- ------------------

Item 15. Indemnification of Directors and Officers.

Sections 721-726 of Article 7 of the BCL provide for the
indemnification and advancement of expenses to officers and directors. Section
721 provides that indemnification and advancement pursuant to the BCL are not
exclusive of any other rights an officer or director may be entitled to,
provided that no indemnification may be made to or on behalf of any director or
officer if a judgment or other final adjudication adverse to the director or
officer establishes that his acts were committed in bad faith or were the
result of active and deliberate dishonesty and were material to the cause of
action so adjudicated, or that he personally gained in fact a financial profit
or other advantage to which he was not legally entitled. Section 722 provides
that a corporation may indemnify an officer or director, in the case of third
party actions, against judgments, fines, amounts paid in settlement and
reasonable expenses and, in the case of derivative actions, against amounts
paid in settlement and reasonable expenses, provided that the director or
officer acted in good faith, for a purpose which he reasonably believed to be
in the best interests of the corporation and, in the case of criminal actions,
had no reasonable cause to believe his conduct was unlawful. In addition,
statutory indemnification may not be provided in derivative actions (i) which
are settled or otherwise disposed of or (ii) in which the director or officer
is adjudged liable to the corporation, unless and only to the extent a court
determines that the person is fairly and reasonably entitled to indemnity.
Section 723 provides that statutory indemnification is mandatory where the
director or officer has been successful, on the merits or otherwise, in the
defense of a civil or criminal action or proceeding. Section 723 also provides
that expenses of defending a civil or criminal action or proceeding

II-1
<PAGE> 32
may be advanced by the corporation upon receipt of an undertaking to repay them
if and to the extent the recipient is ultimately found not to be entitled to
indemnification. Section 725 provides for repayment of such expenses when the
recipient is ultimately found not to be entitled to indemnification. Section
726 provides that a corporation may obtain indemnification insurance
indemnifying itself and its directors and officers. The Company has in effect
insurance policies providing both directors and officers liability coverage and
corporate reimbursement coverage.

Section 402(b) of the BCL provides that a corporation may include in
its certificate of incorporation a provision limiting or eliminating, with
certain exceptions, the personal liability of directors to a corporation or its
shareowners for damages for any breach of duty in such capacity. The
shareowners approved an amendment to the Company's Certificate of Incorporation
eliminating the personal liability of Directors to the extent permitted by New
York law.

The Company's By-laws provide generally that the Company shall, except
to the extent expressly prohibited by the BCL, indemnify each of its officers
and directors made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that such person
is or was a director or officer of the Company against judgments, fines,
penalties, amounts paid in settlement and reasonable expenses, including
attorney's fees, incurred in connection with such action or proceeding, or any
appeal therein. The Company's By-laws further provide for advancement and
reimbursement of such expenses incurred by an officer or director in defending
any action or proceeding in advance of the final disposition thereof upon
receipt of an undertaking by such person to repay such amount if, and to the
extent that, such person is ultimately found not to be entitled to
indemnification. The Company's By-laws also provide that the Company may enter
into agreements with its officers and directors with respect to indemnification
and advancement of expenses, and the Company has entered into such agreements
with its directors and certain of its officers. The agreements provide for
indemnification and advancement of expenses to the extent provided for in the
Company's By-laws. The Company has established a grantor trust to fund the
Company's obligations under the agreements.

Item 16. List of Exhibits. (See "Exhibit Index")

Item 17. Undertakings.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each report filed
by the Company pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-2
<PAGE> 33
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the SEC such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered under
this Registration Statement, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

II-3
<PAGE> 34
SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN HICKSVILLE, IN THE TOWN OF OYSTER
BAY AND THE STATE OF NEW YORK, ON THE 4TH DAY OF APRIL 1994.

<TABLE>
<S> <C>
LONG ISLAND LIGHTING COMPANY

By ANTHONY NOZZOLILLO+
------------------------
ANTHONY NOZZOLILLO
(Senior Vice President,
Chief Financial Officer)
</TABLE>

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
WILLIAM J. CATACOSINOS Principal Executive Officer )
- ------------------------------- and Director )
*WILLIAM J. CATACOSINOS )
(Chairman of the Board, Chief )
Executive Officer, President) )
)
ANTHONY NOZZOLILLO+ Principal Financial Officer )
- ------------------------------ )
ANTHONY NOZZOLILLO )
(Senior Vice President, )
Chief Financial Officer) )
)
/s/THOMAS J. VALLELY, III Principal Accounting Officer )
- ------------------------------- )
THOMAS J. VALLELY, III )
(Controller) )
) April 4, 1994
)
A. JAMES BARNES, GEORGE BUGLIARELLO, )
RENSO L. CAPORALI, PETER O. CRISP, )
WINFIELD E. FROMM, VICKI L. FULLER, )
KATHERINE D. ORTEGA, BASIL A. )
PATERSON, RICHARD L. SCHMALENSEE, *Directors )
GEORGE J. SIDERIS, JOHN H. TALMAGE, )
PHYLLIS S. VINEYARD )
)
)
By ANTHONY NOZZOLILLO+ )
------------------------------ )
*ANTHONY NOZZOLILLO (Attorney- )
in-fact for each of the )
persons indicated) )

/s/ANTHONY NOZZOLILLO
---------------------------------
+ANTHONY NOZZOLILLO (On behalf of
the issuer, individually, as an
officer and as attorney-in-fact
for each of the persons indicated)
--------------------------

</TABLE>
ORIGINAL POWERS OF ATTORNEY, AUTHORIZING KATHLEEN A. MARION, ANTHONY
NOZZOLILLO AND ROBERT J. GREY AND EACH OF THEM, TO SIGN THE REGISTRATION
STATEMENT AND ANY AMENDMENTS THERETO, AS ATTORNEY-IN-FACT FOR THE DIRECTORS AND
OFFICERS OF THE COMPANY, AND A CERTIFIED COPY OF THE RESOLUTION OF THE BOARD OF
DIRECTORS OF THE COMPANY AUTHORIZING SAID PERSONS AND EACH OF THEM TO SIGN THE
REGISTRATION STATEMENT AND AMENDMENTS THERETO AS ATTORNEY-IN-FACT FOR ANY
OFFICERS SIGNING ON BEHALF OF THE COMPANY, ARE BEING FILED OR WILL BE FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION.

II-4
<PAGE> 35
EXHIBIT INDEX

<TABLE>
<S> <C>
*1(a) Form of Underwriting Agreement for General and Refunding Bonds.

*1(b) Form of Underwriting Agreement for Debentures.

*1(c) Form of Underwriting Agreement for Common Stock.

*1(d) Form of Underwriting Agreement for Preferred Stock.

3(a) Restated Certificate of Incorporation of the Company dated November 11, 1993 (filed as an Exhibit to the Company's
Form 10-K for the Year Ended December 31, 1993 and incorporated herein by reference).

*3(b) Proposed form of Certificate of Amendment of the Restated Certificate of Incorporation of the Company for the New
Preferred Stock.

4(a) General and Refunding Indenture dated as of June 1, 1975 (G&R Indenture), and First through Twenty-first supplements
thereto (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1987), Twenty-second
supplement (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1990), Twenty-third
supplement and Twenty-fourth supplement (filed as Exhibits to the Company's Form 10-K for the Year Ended December 31,
1991), and Twenty-fifth supplement and Twenty-sixth supplement (filed as Exhibits to the Company's Form 10-K for the
Year ended December 31, 1992), all of which are incorporated herein by reference, as follows:

G&R Indenture dated as of June 1, 1975.

First Supplemental Indenture to G&R Indenture dated as of June 1, 1975.

Second Supplemental Indenture to G&R Indenture dated as of September 1, 1975.

Third Supplemental Indenture to G&R Indenture dated as of June 1, 1976.

Fourth Supplemental Indenture to G&R Indenture dated as of December 1, 1976.

Fifth Supplemental Indenture to G&R Indenture dated as of May 1, 1977.
</TABLE>

- ----------------------------------
*Filed herewith.

EI-1
<PAGE> 36
<TABLE>
<S> <C>
Sixth Supplemental Indenture to G&R Indenture dated as of April 1, 1978.

Seventh Supplemental Indenture to G&R Indenture dated as of March 1, 1979.

Eighth Supplemental Indenture to G&R Indenture dated as of February 1, 1980.

Ninth Supplemental Indenture to G&R Indenture dated as of March 1, 1981.

Tenth Supplemental Indenture to G&R Indenture dated as of July 1, 1981.

Eleventh Supplemental Indenture to G&R Indenture dated as of July 1, 1981.

Twelfth Supplemental Indenture to G&R Indenture dated as of December 1, 1981.

Thirteenth Supplemental Indenture to G&R Indenture dated as of December 1, 1981.

Fourteenth Supplemental Indenture to G&R Indenture dated as of June 1, 1982.

Fifteenth Supplemental Indenture to G&R Indenture dated as of October 1, 1982.

Sixteenth Supplemental Indenture to G&R Indenture dated as of April 1, 1983.

Seventeenth Supplemental Indenture to G&R Indenture dated as of May 1, 1983.

Eighteenth Supplemental Indenture to G&R Indenture dated as of September 1, 1984.

Nineteenth Supplemental Indenture to G&R Indenture dated as of October 1, 1984.

Twentieth Supplemental Indenture to G&R Indenture dated as of June 1, 1985.

Twenty-first Supplemental Indenture to G&R Indenture dated as of April 1, 1986.

Twenty-second Supplemental Indenture to G&R Indenture dated as of February 1, 1991.

Twenty-third Supplemental Indenture to G&R Indenture dated as of May 1, 1991.
</TABLE>

EI-2
<PAGE> 37
<TABLE>
<S> <C>
Twenty-fourth Supplemental Indenture to G&R Indenture dated as of July 1, 1991.

Twenty-fifth Supplemental Indenture to G&R Indenture dated as of May 1, 1992.

Twenty-sixth Supplemental Indenture to G&R Indenture dated as of July 1, 1992.

*Form of Supplemental Indenture to G&R Indenture.

4(b) Indenture of Mortgage and Deed of Trust dated as of September 1, 1951 (Indenture of Mortgage) and First through Forty-
fourth Supplements (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1987) and Forty-
fifth through Forty-seventh Supplements (filed as an Exhibit to the Company's Form 10-K for the Year Ended December
31, 1991) and Forty-eighth through Forty-ninth Supplements (filed as an Exhibit to the Company's Form 10-K for the
Year Ended December 31, 1992), all of which are incorporated herein by reference, as follows:

Indenture of Mortgage dated as of September 1, 1951.

First Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1951.

Second Supplemental Indenture to the Indenture of Mortgage dated as of October 1, 1952.

Third Supplemental Indenture to the Indenture of Mortgage dated as of September 1, 1953.

Fourth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1954.

Fifth Supplemental Indenture to the Indenture of Mortgage dated as of November 1, 1955.

Sixth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1956.

Seventh Supplemental Indenture to the Indenture of Mortgage dated as of May 1, 1958.

Eighth Supplemental Indenture to the Indenture of Mortgage dated as of July 1, 1959.

Ninth Supplemental Indenture to the Indenture of Mortgage dated as of August 1, 1961.

Tenth Supplemental Indenture to the Indenture of Mortgage dated as of April 1, 1963.
</TABLE>

- ----------------------------------
*Filed herewith.

EI-3
<PAGE> 38
<TABLE>
<S> <C>
Eleventh Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1964.

Twelfth Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1965.

Thirteenth Supplemental Indenture to the Indenture of Mortgage dated as of March 1, 1966.

Fourteenth Supplemental Indenture to the Indenture of Mortgage dated as of April 1, 1967.

Fifteenth Supplemental Indenture to the Indenture of Mortgage dated as of September 1, 1969.

Sixteenth Supplemental Indenture to the Indenture of Mortgage dated as of September 1, 1970.

Seventeenth Supplemental Indenture to the Indenture of Mortgage dated as of April 1, 1971.

Eighteenth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1971.

Nineteenth Supplemental Indenture to the Indenture of Mortgage dated as of September 1, 1972.

Twentieth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1973.

Twenty-first Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1974.

Twenty-second Supplemental Indenture to the Indenture of Mortgage dated as of November 1, 1974.

Twenty-third Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1975.

Twenty-fourth Supplemental Indenture to the Indenture of Mortgage dated as of September 1, 1975.

Twenty-fifth Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1976.

Twenty-sixth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1976.

Twenty-seventh Supplemental Indenture to the Indenture of Mortgage dated as of May 1, 1977.

Twenty-eighth Supplemental Indenture to the Indenture of Mortgage dated as of April 1, 1978.

Twenty-ninth Supplemental Indenture to the Indenture of Mortgage dated as of March 1, 1979.
</TABLE>

EI-4
<PAGE> 39
<TABLE>
<S> <C>
Thirtieth Supplemental Indenture to the Indenture of Mortgage dated as of February 1, 1980.

Thirty-first Supplemental Indenture to the Indenture of Mortgage dated as of March 1, 1981.

Thirty-second Supplemental Indenture to the Indenture of Mortgage dated as of July 1, 1981.

Thirty-third Supplemental Indenture to the Indenture of Mortgage dated as of July 1, 1981.

Thirty-fourth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1981.

Thirty-fifth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1981.

Thirty-sixth Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1982.

Thirty-seventh Supplemental Indenture to the Indenture of Mortgage dated as of October 1, 1982.

Thirty-eighth Supplemental Indenture to the Indenture of Mortgage dated as of April 1, 1983.

Thirty-ninth Supplemental Indenture to the Indenture of Mortgage dated as of May 1, 1983.

Fortieth Supplemental Indenture to the Indenture of Mortgage dated as of February 29, 1984.

Forty-first Supplemental Indenture to the Indenture of Mortgage dated as of September 1, 1984.

Forty-second Supplemental Indenture to the Indenture of Mortgage dated as of October 1, 1984.

Forty-third Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1985.

Forty-fourth Supplemental Indenture to the Indenture of Mortgage dated as of April 1, 1986.

Forty-fifth Supplemental Indenture to the Indenture of Mortgage dated as of February 1, 1991.

Forty-sixth Supplemental Indenture to the Indenture of Mortgage dated as of May 1, 1991.

Forty-seventh Supplemental Indenture to the Indenture of Mortgage dated as of July 1, 1991.

Forty-eighth Supplemental Indenture to the Indenture of Mortgage dated as of May 1, 1992.
</TABLE>

EI-5
<PAGE> 40
<TABLE>
<S> <C>
Forty-ninth Supplemental Indenture to the Indenture of Mortgage dated as of July 1, 1992.

*Form of Supplemental Indenture to the Indenture of Mortgage (included as an Exhibit to and filed with 4(a)).

4(c) Debenture Indenture dated as of November 1, 1986 by and between Long Island Lighting Company and The Connecticut Bank
and Trust Company, National Association, as Trustee, and First Supplement (filed as an Exhibit to the Company's Form
10-K for the Year Ended December 31, 1986), Second through Third Supplements (filed as an Exhibit to the Company's
Form 10-K for the Year Ended December 31, 1989), Fourth through Fifth Supplements (filed as an Exhibit to the
Company's Form 10-K for the Year Ended December 31, 1992), and Sixth through Seventh Supplements (filed as an Exhibit
to the Company's Form 10-K for the Year Ended December 31, 1993), all of which are incorporated herein by reference,
as follows:

First Supplemental Indenture dated as of November 1, 1986.

Second Supplemental Indenture dated as of April 1, 1989.

Third Supplemental Indenture dated as of July 1, 1989.

Fourth Supplemental Indenture dated as of July 1, 1992.

Fifth Supplemental Indenture dated as of November 1, 1992.

Sixth Supplemental Indenture dated as of June 1, 1993.

Seventh Supplemental Indenture dated as of July 1, 1993.

*Form of Supplemental Indenture to Debenture Indenture.

4(d) Debenture Indenture dated as of November 1, 1992 by and between Long Island Lighting Company and Chemical Bank, as
Trustee, and First through Fourth Supplements (filed as Exhibits to the Company's Form 10-K for the Year Ended
December 31, 1992), all of which are incorporated herein by reference, as follows:

First Supplemental Indenture dated as of January 1, 1993.
</TABLE>

- ----------------------------------
*Filed herewith.

EI-6
<PAGE> 41
<TABLE>
<S> <C>
Second Supplemental Indenture dated as of March 1, 1993.

Third Supplemental Indenture dated as of March 1, 1993.

Fourth Supplemental Indenture dated as of March 1, 1993.

*Form of Supplemental Indenture to Debenture Indenture (included as an Exhibit to and filed with 4(c)).

*5 Opinion of Robert J. Grey, Esq., General Counsel of the Company, with respect to the legality of the securities being
registered.

*12(a) Computation of Ratio of Earnings to Fixed Charges.

*12(b) Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.

*12(c) Computation of Interest Coverage computed pursuant to the Company's General and Refunding Indenture.

*23 Consent of Ernst & Young, Independent Auditors.

*24(a) Powers of Attorney executed by certain Directors and Officers of the Company.

*24(b) Certificate as to Corporate Power of Attorney.

*24(c) Certified copy of Resolutions of Board of Directors authorizing signature pursuant to Power of Attorney.

24(d) Certified copy of Resolutions of Board of Directors authorizing signature pursuant to Power of Attorney (filed as an
Exhibit to the Company's Registration Statement on Form S-3 (File No. 33-60744) and incorporated herein by reference).

24(e) Certified copy of Resolutions of Board of Directors authorizing signature pursuant to Power of Attorney (filed as an
Exhibit to the Company's Registration Statement on Form S-3 (File No. 33-45834) and incorporated herein by reference).

*25(a) Form T-1 with respect to General and Refunding Bonds with United States Trust Company of New York, as Trustee.

*25(b) Form T-1 with respect to Debentures with State Street Bank and Trust Company, as Trustee.

*25(c) Form T-1 with respect to Debentures with Chemical Bank, as Trustee.
</TABLE>

- ----------------------------------
*Filed herewith.

EI-7

<PAGE> 1
Exhibit 1(a)

$__,000,000

LONG ISLAND LIGHTING COMPANY

General and Refunding Bonds

UNDERWRITING AGREEMENT

____________, 199_

Lehman Brothers Inc.
[Names of other Representatives]
As Representatives of the several
Underwriters
c/o Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285-1100

Dear Sirs:

The undersigned, Long Island Lighting Company (the "Company"), hereby
confirms its agreement with each of the several underwriters, hereinafter
named, as follows:

1. Underwriters and Representatives. The term "Underwriters" as
used herein shall be deemed to mean the several firms or corporations named in
Schedule II hereto and any underwriter substituted as provided in Section 6.
The term "Representatives" as used herein shall be deemed to mean Lehman
Brothers Inc., [names of other Representatives] who represent that they have
been authorized by the Underwriters to execute this Agreement on their behalf
and to act for them in the manner herein provided. All obligations of the
Underwriters hereunder are several and not joint. Any action under or in
respect of this Agreement taken by the Representatives will be binding upon all
the Underwriters.

2. Description of General and Refunding Bonds. The Company proposes
to issue and sell to the Underwriters the principal amount of its General and
Refunding Bonds identified in Schedule I hereto (the "Bonds") in one or more
series under a General and Refunding Indenture, dated as of June 1, 1975, as
amended and supplemented by ___________ indentures supplemental thereto and as
to be amended and supplemented by a ____________ Supplemental Indenture
thereto, dated as of ___________, (the "Indenture"), between the Company and
United States Trust Company of New York, as successor Trustee (the "Trustee").
The Company is obligated to issue and deposit with the Trustee pursuant to
Section 5.14 of the Indenture certain First Mortgage Bonds ("Pledged Bonds")
under an Indenture of Mortgage and Deed of
<PAGE> 2
2

Trust, dated as of September 1, 1951, as amended and supplemented by
___________ indentures supplemental thereto and as to be amended and
supplemented by a ____________ Supplemental Indenture thereto, dated as of
___________, (the "First Mortgage Indenture"), between the Company and IBJ
Schroder Bank & Trust Company, as successor Trustee.

3. Representations and Warranties of the Company. The Company
represents and warrants to each of the Underwriters, as of the date hereof and
as of the Closing Date (as hereinafter defined), that:

(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
33-_____) under the Securities Act of 1933, as amended (the "Act"), for
the registration of the Bonds under the Act. The various parts of such
registration statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained therein at the time
such part of the registration statement became effective but excluding
Form T-1, each as amended at the time such part of the registration
statement became effective, is hereinafter called the "Registration
Statement" and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any document filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective
date of the Registration Statement that is incorporated by reference in
the Registration Statement. The Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered or
to be delivered to the Representatives and, excluding exhibits to the
Registration Statement, to the Representatives for each of the other
Underwriters, if any, have been declared effective by the Commission in
such form. No other document with respect to the Registration Statement
or document incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission. Any preliminary prospectus included in the Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the
rules and regulations of the Commission under the Act is hereinafter
called a "Preliminary Prospectus"; the prospectus relating to the Bonds,
in the form in which it has most recently been filed, or transmitted for
filing, with the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the
<PAGE> 3
3

case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to the Prospectus as amended or supplemented shall be deemed to
refer to the Prospectus as amended or supplemented in relation to the
Bonds in the form in which it is filed with the Commission pursuant to
Rule 424(b) under the Act, including any documents incorporated by
reference therein as of the date of such filing. The Company will not
file any amendment to the Registration Statement or any amendment or
supplement to any Preliminary Prospectus or Prospectus, or file any
document under the Exchange Act before the termination of the offering of
the Bonds by the Underwriters if such document would be deemed to be
incorporated by reference into such Preliminary Prospectus or Prospectus,
of which the Representatives shall not previously have been advised and
provided with a copy or to which the Representatives shall reasonably
object in writing or which shall be disapproved by Messrs. Milbank, Tweed,
Hadley & McCloy, who are acting as counsel on behalf of the Underwriters.

(b) The Registration Statement and the Prospectus and any amendment
or supplement thereto as of their respective effective or issue dates, and
as of the closing date, (1) contained or will contain, as applicable, all
statements of material fact required to be stated therein in accordance
with the Act and the Rules and Regulations (as defined below); (2)
conformed or will conform, as applicable, in all material respects to the
requirements of the Act and the Rules and Regulations and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules, regulations and releases of the Commission thereunder; and (3) do
not and will not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, except that the foregoing does
not apply to statements or omissions in such documents based upon written
information furnished to the Company by any Underwriter specifically for
use therein or to any statements in or omissions from the statement of
eligibility and qualification on Form T-1, or amendments thereto, of the
Trustee under the Indenture. Any reference to "Rules and Regulations"
shall mean the rules, regulations and releases adopted by the Commission
under either the Act or the Exchange Act, as applicable.

incorporated by reference in the Registration Statement or Prospectus as
amended or supplemented present fairly the financial condition and
operations of the Company at the respective dates or for the respective
periods to which they apply except as otherwise indicated in the
Registration Statement or Prospectus as amended or supplemented; such
financial statements have been prepared in each case in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved except as otherwise indicated in the Registration
Statement and Prospectus as amended or supplemented. Ernst & Young, who
have examined the audited financial statements and schedules (including
the related notes and supporting schedules) included or incorporated by
reference in the Registration Statement or Prospectus as amended or
supplemented and whose report appears or is incorporated by reference in
the Prospectus as amended or supplemented, are independent public
accountants as required by the Act and the Rules and Regulations.

(d) Except as reflected in, or contemplated by, the Registration
Statement and the Prospectus as amended or supplemented, since the
respective most recent dates as of which information is given in the
Registration Statement and the Prospectus as amended or supplemented,
there has not been any material adverse change in the business, properties
or financial condition or results of operation of the Company, and since
such dates there has not been any material transaction entered into by the
Company other than transactions contemplated by the Registration Statement
and Prospectus as amended or supplemented and transactions in the ordinary
course of business. The Company has no material contingent obligation
which is not disclosed in the Registration Statement and Prospectus as
amended or supplemented.

(e) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof on the part of the Company to be fulfilled
have been duly authorized by all necessary corporate action of the Company
in accordance with the provisions of its Restated and Amended Certificate
of Incorporation (the "Charter") and by-laws and applicable law, and the
Bonds, when issued and delivered as provided herein, and the Pledged
Bonds, if any, when issued and deposited pursuant to the Indenture, will
constitute legal, valid and binding obligations of the Company enforceable
in accordance with their terms except as limited by bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles. The Bonds and the Pledged Bonds conform to the description
thereof contained in the Registration Statement and the Prospectus as
amended or supplemented.
<PAGE> 5
5

(f) The issuance and sale of the Bonds, the consummation of the
transactions herein contemplated, the fulfillment of the terms hereof and
the compliance by the Company with all the terms and provisions of the
Indenture and the First Mortgage Indenture will not result in a breach of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or instrument to
which the Company is now a party.

(g) The documents which are incorporated by reference in the
Prospectus as amended or supplemented or from which information is so
incorporated by reference, when they became effective or were filed with
the Commission, as the case may be, complied in all material respects with
the requirements of the Act or the Exchange Act, as applicable, and the
Rules and Regulations, and any documents so filed and incorporated by
reference subsequent to the effective date of the Registration Statement
shall, when they are filed with the Commission, conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the Rules and Regulations.

(h) The conditions for use of Form S-3, set forth in the General
Instructions thereto, have been satisfied.

4. Purchase and Sale. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each of the Underwriters, and
each such Underwriter agrees, severally and not jointly, to purchase from the
Company, at the purchase price set forth in Schedule I hereto, the principal
amount of the Bonds set forth opposite the name of such Underwriter in Schedule
II hereto.

5. Reoffering by Underwriters. Subject to the terms and conditions
of this Agreement, it is understood that the Underwriters propose to make a
bona fide public offering of the Bonds as soon as practicable after the
execution of this Agreement.

6. Time and Place of Closing. Delivery of the Bonds and payment
therefor shall be made at the offices of Milbank, Tweed, Hadley & McCloy, 1
Chase Manhattan Plaza, New York, New York at _____ A.M., New York Time, on
____________, 199__, or such other place, time and date as the Representatives
and the Company may agree upon. The hour and date of such delivery and payment
are herein called the "Closing Date". Payment for the Bonds shall be by
certified or official bank check payable to the order of the Company in New
York Clearing House (next day) funds. The Bonds shall be delivered to the
Representatives for the respective accounts of the Underwriters registered in
such names and in such authorized denominations as the Representatives may
<PAGE> 6
6

reasonably request in writing not later than 12:30 P.M., New York Time, on the
third business day prior to the Closing Date, or, to the extent not so
requested, registered in the names of the respective Underwriters in such
authorized denominations as the Company shall determine. For the purpose of
expediting the checking of the Bonds by the Representatives on behalf of the
Underwriters, the Company agrees to make such Bonds available to the
Representatives for such purposes at the corporate trust office of
[Manufacturers Hanover Trust Company] not later than 2:00 P.M., New York Time,
on the business day preceding the Closing Date, or at such other time and place
as may be agreed upon by the Company and the Representatives.

If any Underwriter or Underwriters default in its or their
obligations to purchase the Bonds which it or they have agreed to purchase
hereunder and the aggregate principal amount of Bonds which such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent or
less of the aggregate principal amount of Bonds set forth in Schedule II
hereto, the other Underwriters shall be obligated severally, in proportion to
their respective commitments to purchase Bonds hereunder, to purchase the Bonds
which such defaulting Underwriter or Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
principal amount of Bonds with respect to which such default or defaults occur
is more than ten percent of the aggregate principal amount of Bonds set forth
in Schedule II hereto and arrangements satisfactory to you and the Company for
the purchase of such Bonds by other persons are not made within thirty-six
hours after such default, the Company may, at its option, either (a) terminate
this Agreement without liability on the part of any non-defaulting Underwriter
or the Company, except for expenses to be paid or reimbursed by the Company
pursuant to Section 7, or (b) require each non-defaulting Underwriter to
purchase the aggregate principal amount of Bonds which such Underwriter
otherwise agreed to purchase plus an amount equal to one-ninth thereof. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section.

The respective commitments of the several Underwriters for purposes
of this paragraph shall be determined without regard to reduction in the
respective Underwriters' obligations to purchase the principal amount of Bonds
set forth opposite their names in Schedule II hereto. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
<PAGE> 7
7

7. Covenants of the Company. The Company agrees that:

(a) The Company will prepare the Prospectus as amended or
supplemented in a form approved by the Representatives and will file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 424(b). The Company will at or prior to
the Closing Date deliver to each of the Representatives and to counsel for
the Underwriters one signed copy of the Registration Statement as
originally filed and of all amendments or supplements thereto (including
conformed copies of any document filed under the Exchange Act and deemed
to be incorporated by reference into the Prospectus as amended or
supplemented), heretofore or hereafter made, including any post-effective
amendment (in each case including all exhibits filed therewith, except
exhibits incorporated by reference unless specifically requested),
including a signed copy of each consent and certificate included therein
or filed as an exhibit thereto. As soon as the Company is advised
thereof, it will advise the Representatives orally (i) when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed with
the Commission and (ii) of the issuance of any stop order under the Act
with respect to the Registration Statement or any suspension of the
qualification of the Bonds in any jurisdiction, or the institution of any
proceedings therefor of which the Company shall have received notice, and
will use its best efforts to prevent the issuance of any such stop order
or suspension and to secure the prompt removal thereof if issued. The
Company will deliver to the Underwriters, in accordance with the
Representatives' instructions, as many copies of the Prospectus as amended
or supplemented as the Representatives may reasonably request for the
purposes contemplated by the Act, and will deliver to the Representatives
as soon as practicable sufficient conformed copies of the Registration
Statement (including conformed copies of any document filed under the
Exchange Act and deemed to be incorporated by reference into the
Prospectus as amended or supplemented) and of all amendments thereto (in
each case without exhibits) for distribution of one to each Underwriter.

(b) The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Underwriters
for any expenses up to $9,000 (including fees and disbursements of
counsel) incurred by them in connection with qualification of the Bonds
for sale and the preparation of memoranda as to Blue Sky qualifications
and exemptions and as to eligibility of the Bonds for investment under the
laws of such jurisdictions as
<PAGE> 8
8

you designate. The Company shall not, however, be required to pay any
amount for any expenses of the Representatives or any of the Underwriters
except as provided in paragraph 4 hereof and except, that in the event
this Agreement shall be terminated in accordance with the provisions of
paragraph 8 or 9 hereof, the Company will pay the fees and disbursements
of counsel for the Underwriters, whose fees and disbursements the
Underwriters agree to pay in any other event. The Company shall not in
any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits.

(c) If at any time when a prospectus relating to the Bonds is
required to be delivered under the Act, any event relating to or affecting
the Company, or of which the Company shall be advised in writing by the
Representatives, shall occur, which in the opinion of the Company should
be set forth in a supplement to or an amendment of the Prospectus in order
to make the Prospectus as amended or supplemented not misleading in the
light of the circumstances when it is delivered, or which, in your
opinion, may be necessary in connection with the distribution of the
Bonds, the Company will forthwith at its expense prepare and furnish to
the Representatives a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Prospectus as amended or
supplemented which will supplement or amend the Prospectus as amended or
supplemented or file such documents so that the Prospectus as amended or
supplemented will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Prospectus as amended
or supplemented is delivered, not misleading. The Company will continue
to prepare and file with the Commission in a timely manner all documents
required to be filed pursuant to the requirements of the Exchange Act and
the Rules and Regulations.

(d) The Company will make generally available to its security
holders (and shall deliver to the Representatives), as soon as practicable
but in any event not later than 45 days after the end of its fiscal
quarter in which the first anniversary date of the effective date of the
Registration Statement (as such term is defined in Rule 158 under the Act)
(the "Effective Date") occurs, an earnings statement (which need not be
audited, unless required so to be under Section 11(a) of the Act) of the
Company in reasonable detail covering a period of at least twelve
consecutive months beginning after the Effective Date.

(e) The Company will use its best efforts promptly to do and perform
all things to be done and performed by it
<PAGE> 9
9

hereunder prior to the Closing Date and to satisfy all conditions
precedent to the delivery by it of the Bonds.

(f) The Company will use its best efforts to qualify the Bonds for
offer and sale under the Blue Sky laws of such states as the
Representatives may designate and will file such statements or reports as
are or may be reasonably required by the laws of such states; provided,
however, that the Company in complying with this paragraph need not
qualify to do business in any state nor execute a general consent to
service of process.

(g) The Company will effect such filing and recordation with respect
to the ____________ Supplemental Indenture to the Indenture and the
__________ Supplemental Indenture to the First Mortgage Indenture, at or
as soon as practicable after the Closing Date in all places required by
law as shall be necessary in order to secure fully the Bonds and the
Pledged Bonds under the lien of the Indenture and the First Mortgage
Indenture and to furnish the Representatives with an opinion of counsel
that such filing and recordation with respect to such indentures have been
effected without the intervention of any prior liens, charges or
encumbrances except (a) Excepted Encumbrances, as defined in the
Indenture, and Permitted Encumbrances, as defined in the First Mortgage
Indenture, (b) minor restrictions, exceptions and reservations in
conveyances and minor defects of title, which are of the nature ordinarily
found in properties of similar character and which do not interfere
adversely with the operation of the business of the Company or in any
substantial way impair the security afforded by the Indenture and the
First Mortgage Indenture, and (c) any lien against property of the Company
as to which cash sufficient to pay indebtedness secured by such lien is
held irrevocably in trust for such purpose by the trustee under the First
Mortgage Indenture.

(h) The Company will apply the proceeds of the sale of the Bonds,
exclusive of accrued interest, if any, for the purposes set forth in the
Prospectus as amended or supplemented.

8. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase and pay for the Bonds shall be subject to the
accuracy of, and compliance with, the representations and warranties of the
Company contained herein, to the performance by the Company of its obligations
to be performed hereunder prior to the Closing Date, and to the following
further conditions:

(a) The Prospectus as amended or supplemented in relation to the
Bonds shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable
<PAGE> 10
10

time period prescribed for such filing by the Rules and Regulations; and
no stop order suspending the effectiveness of the Registration Statement
shall be in effect on the Closing Date and no proceedings for that purpose
shall be pending before, or threatened by, the Commission on the Closing
Date. The Representatives shall have received, prior to payment for the
Bonds, a certificate dated the Closing Date and signed by the President,
any Vice President or the Treasurer of the Company to the effect that no
such stop order is in effect and that no proceedings for such purpose are
pending before, or to the knowledge of the Company threatened by, the
Commission.

(b) On the Closing Date there shall be in full force and effect an
order of the Public Service Commission of the State of New York
authorizing the issuance and sale of debt securities, including the Bonds,
and the issuance and deposit of the Pledged Bonds which shall not contain
any provision mutually unacceptable to the Representatives and the Company
by reason of being materially adverse, it being understood that no order
in effect at the date of this Agreement contains any such unacceptable
provision.

(c) At the Closing Date, the Representatives shall receive a
favorable opinion from either Robert J. Grey, Esq., General Counsel of the
Company, or Herbert M. Leiman, Esq., Assistant General Counsel of the
Company, which opinion shall be satisfactory in form and substance to
Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, to
the effect that

(i) The Company is a corporation duly organized and validly
existing, in good standing under the laws of the State of New York,
and has power and authority (corporate and other) to own its
property, to carry on its business and to issue the Bonds and the
Pledged Bonds;

(ii) The Agreement has been duly authorized, executed and
delivered by the Company;

(iii) An order has been adopted by the New York Public Service
Commission authorizing the issuance and sale of the Bonds, and the
issuance and deposit of the Pledged Bonds and the transactions
related thereto as contemplated by the Agreement and said order is
still in full force and effect; and no further approval,
authorization, consent or other order of any public board or body is
legally required for the authorization of the issuance and sale by
the Company of the Bonds and the issuance and deposit of the Pledged
Bonds under the terms of this Agreement except compliance with the
provisions of securities or Blue Sky laws of certain
<PAGE> 11
11

states in connection with the sale of the Bonds to the public in such
states;

(iv) The execution, delivery and performance of this Agreement,
the Indenture, the First Mortgage Indenture, the Bonds and the
Pledged Bonds by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby will not conflict
with or result in a breach or violation by the Company of any of the
terms or provisions of, constitute a default by the Company under, or
result in the creation or imposition of any lien, charge, security
interest or encumbrance upon any of the assets of the Company
pursuant to the terms of, (A) any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument known to such
counsel to which the Company is a party or to which it or any of its
properties is subject, (B) the Charter or by-laws of the Company or
(C) any statute, rule or regulation or, to the best of such counsel's
knowledge, any judgment, decree or order of any court or governmental
agency or body applicable to the Company or any of its properties;

(v) The Indenture and the First Mortgage Indenture conform to
the statements with respect thereto contained in the Registration
Statement and Prospectus as amended or supplemented, have been duly
authorized by the Company and duly executed and delivered, and are
legal, valid and binding agreements of the Company enforceable in
accordance with their terms, subject, however, to the qualification
that certain of the remedial provisions thereof may be limited by the
laws of New York (but such laws do not make the remedies afforded
inadequate for the realization of the benefits of the security
provided thereby) and, with respect to atomic energy facilities, by
the Atomic Energy Act of 1954 and regulations thereunder, and as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles. The First Mortgage Indenture, as
supplemented by the first ___________ supplemental indentures, and
the Indenture, as supplemented by the first ___________ supplemental
indentures, have been duly filed for record and recorded under the
laws of New York as mortgages of real and personal property in each
proper office in all counties or other recording districts in New
York in which the properties subject to the lien of the First
Mortgage Indenture and the Indenture are located, and all necessary
filings to date have been made under the New York Uniform Commercial
Code, in order to perfect
<PAGE> 12
12

and preserve the lien of the First Mortgage Indenture and the
Indenture upon the properties intended to be covered thereby, and all
mortgage recording or other taxes (other than statutory recording
fees and Federal taxes) required to be paid in connection therewith
have been paid. Subject to the due recordation of the ____________
Supplemental Indenture to the First Mortgage Indenture and the
____________ Supplemental Indenture to the Indenture and payment of
the New York mortgage recording tax, the First Mortgage Indenture and
the Indenture constitute, respectively, a valid and enforceable first
mortgage lien and a valid and enforceable mortgage lien junior to the
lien of the First Mortgage Indenture upon the properties intended to
be subject thereto, subject to no liens, charges or encumbrances
except (a) Permitted Encumbrances, as defined in the First Mortgage
Indenture, and Excepted Encumbrances, as defined in the Indenture,
(b) minor restrictions, exceptions and reservations in conveyances
and minor defects of title, which are of the nature ordinarily found
in properties of similar character and which do not interfere
adversely with the operation of the business of the Company or in any
substantial way impair the security afforded by the First Mortgage
Indenture and the Indenture and (c) any lien against property of the
Company as to which cash sufficient to pay indebtedness secured by
such lien is held irrevocably in trust for such purpose by the
trustee under the First Mortgage Indenture. The Indenture has been
duly qualified under the Trust Indenture Act;

(vi) The Bonds conform to the terms of this Agreement and to the
statements with respect thereto contained in the Registration
Statement and Prospectus as amended or supplemented and have been
duly authorized; the Bonds have been duly executed, authenticated and
delivered and are legal, valid and binding obligations of the Company
enforceable in accordance with their terms and are entitled to the
benefits and security afforded by the Indenture in accordance with
the terms of such Indenture and such Bonds;

(vii) The Pledged Bonds conform to the terms of this Agreement
and to the statements with respect thereto contained in the
Registration Statement and Prospectus as amended or supplemented and
have been duly authorized, and, when duly executed, authenticated,
issued and deposited with the Trustee pursuant to the Indenture as
security for Bonds issued and to be issued thereunder, will be,
except as limited by certain terms of the Indenture, entitled to the
<PAGE> 13
13

security afforded by the First Mortgage Indenture in accordance with
the terms of the First Mortgage Indenture and the terms of the
Pledged Bonds;

(viii) The Company has good and marketable title in fee simple
absolute to all the parcels of real property described in the
Indenture and the First Mortgage Indenture as being subject thereto,
except such parcels as may have been released or are in process of
being released pursuant to the terms thereof, and good title to all
other property owned by the Company (other than rights of way for
transmission and distribution lines and mains located either within
the limits of public highways, or on private property pursuant to
easements from apparent owners containing in some instances removal
and relocation provisions and time limits, or on private property
without easements where such lines and mains, with minor exceptions,
are being maintained without objection from the owners of such
property) in each case free and clear of all liens, charges and
encumbrances except (a) the lien of the Indenture and Excepted
Encumbrances as defined therein, and the lien of the First Mortgage
Indenture and Permitted Encumbrances as defined therein, (b) minor
restrictions, exceptions and reservations in conveyances and minor
defects of title, which are of the nature ordinarily found in
properties of similar character and which do not interfere adversely
with the operation of the business of the Company or in any
substantial way impair the security afforded by the Indenture or the
First Mortgage Indenture and (c) any lien against property of the
Company as to which cash sufficient to pay indebtedness secured by
such lien is held irrevocably in trust for such purpose by the
Trustee under the Indenture or by the trustee under the First
Mortgage Indenture. The properties described in the Indenture and
the First Mortgage Indenture are adequately described to constitute
the Indenture and the First Mortgage Indenture liens thereon;

(ix) The Company, to the best of such counsel's knowledge,
possesses all franchises, licenses, permits, consents and orders of
governmental and regulatory authorities and political subdivisions
required for the maintenance and operation of its properties and
business substantially as now conducted and as described in the
Registration Statement and the Prospectus as amended or supplemented;
or, if the Company does not possess all of such franchises, licenses,
permits, consents and orders, the absence of such thereof as the
Company does not possess will not, to the best of such counsel's
knowledge, affect the
<PAGE> 14
14

maintenance and operation of such properties and business as a whole
substantially as now conducted; and

(x) The Registration Statement has become effective under the
Act and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
are pending or contemplated under the Act, the Registration Statement
and the Prospectus, and each amendment or supplement thereto
(including any document incorporated by reference into the Prospectus
as amended or supplemented), as of their respective effective or
issue dates, complied as to form in all material respects with the
requirements of the Act, the Exchange Act and the Trust Indenture Act
and the applicable rules and regulations of the Commission
thereunder; the conditions for use of Form S-3, set forth in the
General Instructions thereto, have been satisfied; such counsel has
no reason to believe that either the Registration Statement or the
Prospectus, or any such amendment or supplement (including any
document filed under the Exchange Act and deemed to be incorporated
by reference into the Prospectus as amended or supplemented),
considered as a whole on the effective date of the Registration
Statement and on the date hereof, contained or contain any untrue
statement of material fact or omitted or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading; the descriptions in the
Registration Statement and the Prospectus as amended or supplemented
of statutes, legal and governmental proceedings and contracts and
other documents are accurate and fairly present the information
required to be shown; and such counsel does not know of any legal or
governmental proceedings required to be described in the Prospectus
as amended or supplemented (or required to be filed under the
Exchange Act if upon such filing they would be incorporated, in whole
or in part, by reference in the Prospectus as amended or
supplemented) which are not described as required, nor of any
contracts or documents of a character required to be described in the
Registration Statement or Prospectus as amended or supplemented or to
be filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such
counsel need express no opinion as to the financial statements or
other financial data contained or incorporated by reference in the
Registration Statement or the Prospectus as amended or supplemented.
<PAGE> 15
15

(d) At the Closing Date, the Representatives shall receive from
Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters,
such opinion or opinions with respect to the valid existence of the
Company, the validity of the Bonds and the Pledged Bonds (if any are to be
issued concurrently with the Bonds), the Registration Statement, the
Prospectus as amended or supplemented, and other related matters as you
may require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.

(e) On the date of this Agreement and on the Closing Date the
Representatives shall have received from Ernst & Young a letter (with
copies thereof for each of the Underwriters), which letter shall be
reasonably satisfactory in form and substance to the Representatives and
Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters,
confirming that they are independent auditors with respect to the Company
within the meaning of the Act and the applicable published rules and
regulations thereunder, and stating in effect that:

(i) in their opinion, the audited financial statements and
schedules incorporated by reference into the Registration Statement
and the Prospectus as amended or supplemented audited by them comply
as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the
applicable published rules and regulations of the Commission
thereunder with respect to a registration statement on Form S-3;

(ii) they have read the minutes of the meetings of the
stockholders and the Board of Directors of the Company, as set forth
in the minute books or, if not set forth therein, in the form
prepared by the Secretary of the Company, through a specified date
not more than five business days prior to the date of the closing,
read the unaudited financial statements, if any, incorporated by
reference into the Registration Statement and Prospectus as amended
or supplemented and also the latest available unaudited interim
financial statements of the Company and inquired of certain officials
of the Company responsible for financial and accounting matters, and
that such officials have stated that:

requirements of the Act and the Exchange Act and the published
rules and regulations of the Commission thereunder, and are in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the most recent
audited financial statements included or incorporated by
reference therein,

(B) at the date of the latest available balance sheet
read by such accountants, there was no change in the capital
stock (including Common Stock, Preferred Stock and Premium on
Capital Stock but excluding Capital Stock Expense) or long-term
debt of the Company or any decrease in net current assets or
Common Shareowners' Equity as compared with amounts shown on the
latest balance sheet included or incorporated by reference in
the Registration Statement and Prospectus as amended or
supplemented, except in all instances (i) for changes or
decreases that the Registration Statement and Prospectus as
amended or supplemented discloses have occurred or may occur,
(ii) for payment of maturing installments of long-term debt,
(iii) for conversions of convertible preferred stock, (iv) for
shares of common stock issued pursuant to the Company's Employee
Stock Purchase Plan, (v) for amounts withheld from employees in
connection with the Employee Stock Purchase Plan, (vi) for the
acquisition of long-term debt for sinking fund purposes, (vii)
for shares of preferred stock redeemed by way of sinking funds,
or (viii) for changes or decreases which are described in such
letter, identifying the same and specifying the amount thereof,
or

(C) for the twelve months ending on the date of the
latest available unaudited interim financial statements of the
Company, there were no decreases, as compared with the twelve
months ending on the date of the latest audited financial
statements in total revenues, operating income, income before
interest charges, or in the total amount of net income, except
in all instances for decreases which the Registration Statement
and Prospectus as amended or supplemented discloses have
occurred or may occur, or which are described in such letter,
identifying the same and specifying the amount thereof;

(iii) they have performed more limited procedures than those
set forth in the foregoing clause (ii), consisting merely of the
reading of the minutes
<PAGE> 17
17

referred to in said clause and inquired of certain officials of the
Company responsible for financial and accounting matters, and that
such officials have stated that, with respect to the period from the
date of the latest available financial statements of the Company to a
specified date not more than five business days prior to the date of
such letter, there was no change in the capital stock (including
Common Stock, Preferred Stock and Premium on Capital Stock but
excluding Capital Stock Expense) or long-term debt of the Company or
any decrease in net current assets or Common Shareowners' Equity as
compared with the amounts shown in the latest financial statements
included or incorporated by reference in the Registration Statement
and Prospectus as amended or supplemented, except in all instances
(i) for changes or decreases that the Registration Statement and
Prospectus as amended or supplemented discloses have occurred or may
occur, (ii) for payment of maturing installments of long-term debt,
(iii) for conversions of convertible preferred stock, (iv) for shares
of common stock issued pursuant to the Company's Employee Stock
Purchase Plan, (v) for amounts withheld from employees in connection
with the Employee Stock Purchase Plan, (vi) for the acquisition of
long-term debt for sinking fund purposes, (vii) for purchase of
preferred shares for series scheduled to be redeemed by way of
sinking funds, or (viii) for changes or decreases which are described
in such letter, identifying the same and specifying the amount
thereof; and

(iv) they have compared certain dollar amounts (and percentages
and other financial data derived from such dollar amounts) disclosed
in, or incorporated by reference into, the Registration Statement and
Prospectus as amended or supplemented or in Exhibits to the
Registration Statement, with such dollar amounts, percentages and
other financial information contained in the general accounting
records of the Company or derived directly from such records by
analysis or computation, and have found such dollar amounts,
percentages and other financial information to be in agreement
therewith, except as otherwise specified in such letter.

(including any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus as amended or supplemented),
and since such dates and up to the Closing Date there shall have been no
material transaction entered into by the Company other than transactions
disclosed by the Registration Statement and the Prospectus, and any
amendments or supplements thereto (including any documents filed under the
Exchange Act and deemed to be incorporated by reference into the
Prospectus as amended or supplemented), and transactions in the ordinary
course of business; and at the Closing Date the Representatives shall have
received a certificate to such effect, signed by the President, any Vice
President or the Treasurer of the Company.

(g) All legal proceedings to be taken in connection with the
issuance and sale of the Bonds shall have been satisfactory in form and
substance to Messrs. Milbank, Tweed, Hadley & McCloy.

In case any of the conditions specified above in this Section 8 shall
not have been fulfilled at the Closing Date, this Agreement may be terminated
by the Representatives, with the consent of the Underwriters including
yourselves who have agreed to purchase in the aggregate fifty percent or more
of the Bonds, by mailing or delivering written notice thereof to the Company.
Any such termination shall be without liability of any party to any other party
except as otherwise provided in Section 7 hereof.

9. Conditions of the Obligation of the Company. The obligation of
the Company to deliver the Bonds shall be subject to the conditions set forth
in the second clause of the first sentence of paragraph (a) of Section 8 hereof
and in paragraph (b) of Section 8 hereof. In case any of the conditions
specified in this Section 9 shall not have been fulfilled, this Agreement may
be terminated by the Company by mailing or delivering written notice thereof to
the Representatives. Any such termination shall be without liability of any
party to any other party except as otherwise provided in Section 7 hereof.

any untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented or any
amendment or supplement thereto (if any amendments or supplements thereto shall
have been furnished) or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the indemnity agreement
contained in this paragraph shall not apply to any such losses, claims,
damages, liabilities, expenses or actions arising out of or based upon any such
untrue statement or alleged untrue statement or any such omission or alleged
omission, if such statement or omission was made in reliance upon information
furnished herein or in writing to the Company by or on behalf of any
Underwriter, through the Representatives, expressly for use in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented or any amendment or supplement
thereto; and provided, further, that the Company shall not be liable in any
case relating to any Preliminary Prospectus or any preliminary prospectus
supplement to the extent that any such loss, claim, damage, liability, expense
or action arises out of or is based upon the failure of any Underwriter in
connection with a sale of any of the Bonds to any person to send or give a copy
of the Prospectus, as the same may then be supplemented or amended, to such
person with or prior to the written confirmation of the sale involved so long
as the Company shall have fully complied with the last sentence of Section 7(a)
hereof. The indemnity agreement of the Company contained in this paragraph and
the representations and warranties of the Company contained in Section 3 hereof
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or any such controlling
person, and shall survive the delivery of the Bonds. The Underwriters agree
promptly to notify the Company of the commencement of any litigation or
proceedings against them or any of them, or any such controlling person, in
connection with the sale of the Bonds or with any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented or any amendment or supplement thereto.

are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented or any amendment or supplement thereto (if any amendments or
supplements thereto shall have been furnished) or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such statement or
omission was made in reliance upon information furnished herein or in writing
to the Company by or on behalf of such Underwriter, through the
Representatives, expressly for use in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented or any amendment or supplement thereto. The
indemnity agreement of the respective Underwriters contained in this paragraph
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Company, or any such other
Underwriter or any such controlling person, and shall survive the delivery of
the Bonds. The Company agrees promptly to notify the Representatives of the
commencement of any litigation or proceedings against the Company or any of its
officers or directors or against any such controlling person in connection with
the sale of the Bonds or with any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented or any amendment or supplement thereto.

(c) The Company and each of the Underwriters agree that, upon
receipt of notice of the commencement of any action against the Company or any
person controlling the Company, or against such Underwriter or any person
controlling such Underwriter, in respect of which indemnity may be sought on
account of any indemnity agreement contained herein, it will promptly give
written notice of the commencement thereof to the party or parties against whom
indemnity shall be sought hereunder, but the omission so to notify such
indemnifying party or parties of any such action shall not relieve such
indemnifying party or parties from any liability which it or they may have to
the indemnified party (i) to the extent the indemnifying party was not
materially prejudiced by such omission or (ii) otherwise than on account of
such indemnity agreement. In case such notice of any such action shall be so
given such indemnifying party shall be entitled to participate at its own
expense in the defense or, if it so elects, to assume (in conjunction with any
other indemnifying parties) the defense of such action, in which event such
defense shall be conducted by counsel chosen by such indemnifying party (or
parties) and satisfactory to the indemnified party or parties who shall be
defendant or defendants in such action; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other
<PAGE> 21
21

indemnified parties which are different from or additional to those available
to the indemnifying party, the indemnified party or parties shall have the
right to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not
be liable to such indemnified party under this Section 10 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation unless
(i) the indemnified party shall have employed such counsel in connection with
the assumption of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel,
approved by the Representatives in the case of paragraph (a) of this Section
10, representing the indemnified parties under paragraph (a) or (b) of this
Section 10, as the case may be, who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense
of the indemnifying party.

(d) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to an indemnified party under paragraphs (a) or (b)
of this Section 10 in respect of any loss, claim, damage or liability, or any
action in respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company
on the one hand and the Underwriters on the other from the offering of the
Bonds or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and the Underwriters on the other with respect
to the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other with respect to such offering shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Bonds (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by the
Underwriters with respect to such offering, in each case
<PAGE> 22
22

as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 10 were to be determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 10
shall be deemed to include, for purposes of this Section 10, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Bonds
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
becomes liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this paragraph (d) are several in proportion to their respective underwriting
obligations and not joint.

(e) The agreements contained in this Section 10, the representations
and warranties of the Company in Section 3 hereof and the agreements of the
Company in Section 7 hereof shall survive the delivery of the Bonds. The
agreements contained in this Section 10, the representations and warranties of
the Company in Section 3 hereof and the agreements of the Company in Section
7(b) hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or
on behalf of any indemnified party.

established by the New York Stock Exchange or the American Stock Exchange or by
the Commission or by any federal or state agency or by the decision of any
court any limitation on prices for such trading or any restrictions on the
distribution of securities, (d) a banking moratorium shall have been declared
either by federal or New York State authorities, (e) an outbreak or escalation
of hostilities involving the United States shall have occurred or there shall
have been a declaration by the United States of a national emergency or war or
(f) there shall have occurred such a material adverse change in general
economic, political or financial conditions, or the effect of international
conditions on the financial markets in the United States is such, as to make it
impracticable or inadvisable, in the judgment of a majority in interest of the
Underwriters, to proceed with the delivery of the Bonds. Any termination
hereof pursuant to this Section 11 shall be without liability of any party to
any other party except as otherwise provided in Section 7 hereof.

12. Information Furnished by Underwriters. The statements set forth
in the last paragraph on the cover page, the paragraph containing stabilization
information on the inside front cover page and the statements under the caption
"Underwriting" in any Prospectus as amended or supplemented constitute the only
written information furnished by or on behalf of any Underwriter referred to in
paragraph (b) of Section 3 hereof and in paragraphs (a) and (b) of Section 10
hereof.

13. Miscellaneous. The validity and interpretation of this
Agreement shall be governed by the laws of the State of New York. This
Agreement shall inure to the benefit of the Company, the Underwriters and, with
respect to the provisions of Section 10 hereof, each controlling person
referred to in said Section 10, and their respective successors, assigns,
executors and administrators. Nothing in this Agreement is intended or shall
be construed to give to any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provisions herein contained. The term "successors" as used in this Agreement
shall not include any purchaser, as such purchaser, of any of the Bonds from
any of the Underwriters.

14. Notices. All communications hereunder shall be in writing or by
telegram and, if to the Underwriters, shall be mailed or delivered to the
Representatives c/o Lehman Brothers Inc., 3 World Financial Center, New York,
New York 10285-1100, attention: Syndicate Department; if to the Company, shall
be mailed or delivered to it at 175 East Old Country Road, Hicksville, New York
11801, attention: Treasurer.
<PAGE> 24
24

Please sign and return to us ____ counterparts of this letter,
whereupon this letter will become a binding agreement between the Company and
the Underwriters in accordance with its terms.

Very truly yours,

LONG ISLAND LIGHTING COMPANY

By:
------------------------

The foregoing agreement is
hereby confirmed and
accepted, as of the
date first above written.

LEHMAN BROTHERS INC.
[Names of other Representatives]
As Representatives of the several Underwriters

By: LEHMAN BROTHERS INC.

By:
-----------------------------
<PAGE> 25
25

SCHEDULE I

Title, Purchase Price and Description

Title: General and Refunding Bonds, ____% Series Due ____ (the "Bonds")

Principal amount: $__,000,000

Purchase price: ______% of the aggregate principal amount of the Bonds

Underwriters' discount: $_______, being .___% of the aggregate principal
amount of the Bonds

Concession to Certain Securities Dealers: .___% of the aggregate
principal amount of the Bonds

Re-allowance to Brokers and Dealers: .___% of the aggregate principal
amount of the Bonds

Maturity:

Interest Rate:

Interest Payment Dates:

Redemption Provisions:
<PAGE> 26
26

SCHEDULE II

<TABLE>
<CAPTION>
Principal
Amount of
____ Series
Underwriter Bonds
- ----------- -----------
<S> <C>
Lehman Brothers Inc. . . . . . . . . . . . $
[Names of other Representatives] . . . . . $

Total $
</TABLE>

<PAGE> 1
Exhibit 1(b)

$___,000,000

LONG ISLAND LIGHTING COMPANY

Debentures

UNDERWRITING AGREEMENT

______________, 199_

Lehman Brothers Inc.
[Names of other Representatives]
As Representatives of the several
Underwriters
c/o Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285-1100

Dear Sirs:

The undersigned, Long Island Lighting Company (the "Company"), hereby
confirms its agreement with each of the several underwriters, hereinafter
named, as follows:

1. Underwriters and Representatives. The term "Underwriters" as
used herein shall be deemed to mean the several firms or corporations named in
Schedule II hereto and any underwriter substituted as provided in Section 6.
The term "Representatives" as used herein shall be deemed to mean Lehman
Brothers Inc., [Names of other Representatives], who represent that they have
been authorized by the Underwriters to execute this Agreement on their behalf
and to act for them in the manner herein provided. All obligations of the
Underwriters hereunder are several and not joint. Any action under or in
respect of this Agreement taken by the Representatives will be binding upon all
the Underwriters.

2. Description of Debentures. The Company proposes to issue and
sell to the Underwriters the principal amount of its Debentures identified in
Schedule I hereto (the "Debentures") in one or more series under an Indenture,
dated as of __________, ____, as amended and supplemented by _____ indentures
supplemental thereto and as to be amended and supplemented by a ______
Supplemental Indenture thereto, dated as of _______, 199_ (the "Indenture"),
between the Company and [Chemical Bank] [State Street Bank and Trust Company
(the successor in interest to the
<PAGE> 2
2

Connecticut Bank and Trust Company, National Association)], as Trustee (the
"Trustee").

3. Representations and Warranties of the Company. The Company
represents and warrants to each of the Underwriters, as of the date hereof and
as of the Closing Date (as hereinafter defined), that:

(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
33-_____) under the Securities Act of 1933, as amended (the "Act"), for
the registration of the Debentures under the Act. The various parts of
such registration statement, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained therein at
the time such part of such registration statement became effective but
excluding Form T-1, each as amended at the time such part of the
registration statement became effective, is hereinafter called the
"Registration Statement" and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any
document filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement. The Registration
Statement and any post-effective amendment thereto, each in the form
heretofore delivered or to be delivered to the Representatives and,
excluding exhibits to the Registration Statement, to the Representatives
for each of the other Underwriters, if any, have been declared effective
by the Commission in such form. No other document with respect to the
Registration Statement or document incorporated by reference therein has
heretofore been filed or transmitted for filing with the Commission, no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission. Any preliminary prospectus included in the
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"; the prospectus relating to
the Debentures, in the form in which it has most recently been filed with
the Commission on or prior to the date of this Agreement, is hereinafter
called the "Prospectus"; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the applicable
form under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any documents filed after the date of
<PAGE> 3
3

such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the Debentures in the form in which it is
filed with the Commission pursuant to Rule 424(b) under the Act, including
any documents incorporated by reference therein as of the date of such
filing. The Company will not file any amendment to the Registration
Statement or any amendment or supplement to any Preliminary Prospectus or
Prospectus, or file any document under the Exchange Act before the
termination of the offering of the Debentures by the Underwriters if such
document would be deemed to be incorporated by reference into such
Preliminary Prospectus or Prospectus, of which the Representatives shall
not previously have been advised and provided with a copy or to which the
Representatives shall reasonably object in writing or which shall be
disapproved by Messrs. Milbank, Tweed, Hadley & McCloy, who are acting as
counsel on behalf of the Underwriters.

financial condition and operations of the Company at the respective dates
or for the respective periods to which they apply except as otherwise
indicated in the Registration Statement or Prospectus as amended or
supplemented; such financial statements have been prepared in each case in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved except as otherwise indicated in
the Registration Statement and Prospectus as amended or supplemented.
Ernst & Young, who have examined the audited financial statements and
schedules (including the related notes and supporting schedules) included
or incorporated by reference in the Registration Statement or Prospectus
as amended or supplemented and whose report appears or is incorporated by
reference in the Prospectus as amended or supplemented, are independent
public accountants as required by the Act and the Rules and Regulations.

(e) The consummation of the transactions herein contemplated and
the fulfillment of the terms hereof on the part of the Company to be
fulfilled have been duly authorized by all necessary corporate action of
the Company in accordance with the provisions of its Restated and Amended
Certificate of Incorporation (the "Charter") and by-laws and applicable
law, and the Debentures, when issued and delivered as provided herein,
will constitute legal, valid and binding obligations of the Company
enforceable in accordance with their terms except as limited by
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles. The Debentures conform to the description thereof
contained in the Registration Statement and the Prospectus as amended or
supplemented.

(f) The issuance and sale of the Debentures, the consummation of
the transactions herein contemplated, the
<PAGE> 5
5

fulfillment of the terms hereof and the compliance by the Company with all
the terms and provisions of the Indenture will not result in a breach of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or instrument to
which the Company is now a party.

(h) The conditions for use of Form S-3, set forth in the General
Instructions thereto, have been satisfied.

4. Purchase and Sale. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each of the Underwriters, and
each such Underwriter agrees, severally and not jointly, to purchase from the
Company, at the purchase price set forth in Schedule I hereto, the principal
amount of the Debentures set forth opposite the name of such Underwriter in
Schedule II hereto.

5. Reoffering by Underwriters. Subject to the terms and conditions
of this Agreement, it is understood that the Underwriters propose to make a
bona fide public offering of the Debentures as soon as practicable after the
execution of this Agreement.

6. Time and Place of Closing. Delivery of the Debentures and
payment therefor shall be made at the offices of Milbank, Tweed, Hadley &
McCloy, 1 Chase Manhattan Plaza, New York, New York at _____ A.M., New York
Time, on ________, 199_, or such other place, time and date as the
Representatives and the Company may agree upon. The hour and date of such
delivery and payment are herein called the "Closing Date". Payment for the
Debentures shall be by certified or official bank check payable to the order of
the Company in New York Clearing House (next day) funds. The Debentures shall
be delivered to the Representatives for the respective accounts of the
Underwriters registered in such names and in such authorized denominations as
the Representatives may reasonably request in writing not later than 12:30
P.M., New York Time, on the third business day prior to the
<PAGE> 6
6

Closing Date, or, to the extent not so requested, registered in the names of
the respective Underwriters in such authorized denominations as the Company
shall determine. For the purpose of expediting the checking of the Debentures
by the Representatives on behalf of the Underwriters, the Company agrees to
make such Debentures available to the Representatives for such purposes at the
corporate trust office of [Chemical Bank] [State Street Bank and Trust Company]
not later than 2:00 P.M., New York Time, on the business day preceding the
Closing Date, or at such other time and place as may be agreed upon by the
Company and the Representatives.

If any Underwriter or Underwriters default in its or their
obligations to purchase the Debentures which it or they have agreed to purchase
hereunder and the aggregate principal amount of Debentures which such
defaulting Underwriter or Underwriters agreed but failed to purchase is ten
percent or less of the aggregate principal amount of Debentures set forth in
Schedule II hereto, the other Underwriters shall be obligated severally, in
proportion to their respective commitments to purchase Debentures hereunder, to
purchase the Debentures which such defaulting Underwriter or Underwriters
agreed but failed to purchase. If any Underwriter or Underwriters so default
and the aggregate principal amount of Debentures with respect to which such
default or defaults occur is more than ten percent of the aggregate principal
amount of Debentures set forth in Schedule II hereto and arrangements
satisfactory to you and the Company for the purchase of such Debentures by
other persons are not made within thirty-six hours after such default, the
Company may, at its option, either (a) terminate this Agreement without
liability on the part of any non-defaulting Underwriter or the Company, except
for expenses to be paid or reimbursed by the Company pursuant to Section 7, or
(b) require each non-defaulting Underwriter to purchase the aggregate principal
amount of Debentures which such Underwriter otherwise agreed to purchase plus
an amount equal to one-ninth thereof. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section.

The respective commitments of the several Underwriters for purposes
of this paragraph shall be determined without regard to reduction in the
respective Underwriters' obligations to purchase the principal amount of
Debentures set forth opposite their names in Schedule II hereto. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
<PAGE> 7
7

7. Covenants of the Company. The Company agrees that:

(a) The Company will prepare the Prospectus as amended or
supplemented in a form approved by the Representatives and will file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 424(b). The Company will at or prior to
the Closing Date deliver to each of the Representatives and to counsel for
the Underwriters one signed copy of the Registration Statement as
originally filed and of all amendments or supplements thereto (including
conformed copies of any document filed under the Exchange Act and deemed
to be incorporated by reference into the Prospectus as amended or
supplemented), heretofore or hereafter made, including any post-effective
amendment (in each case including all exhibits filed therewith, except
exhibits incorporated by reference unless specifically requested),
including a signed copy of each consent and certificate included therein
or filed as an exhibit thereto. As soon as the Company is advised
thereof, it will advise the Representatives orally (i) when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed with
the Commission and (ii) of the issuance of any stop order under the Act
with respect to the Registration Statement or any suspension of the
qualification of the Debentures in any jurisdiction, or the institution of
any proceedings therefor of which the Company shall have received notice,
and will use its best efforts to prevent the issuance of any such stop
order or suspension and to secure the prompt removal thereof if issued.
The Company will deliver to the Underwriters, in accordance with the
Representatives' instructions, as many copies of the Prospectus as amended
or supplemented as the Representatives may reasonably request for the
purposes contemplated by the Act, and will deliver to the Representatives
as soon as practicable sufficient conformed copies of the Registration
Statement (including conformed copies of any document filed under the
Exchange Act and deemed to be incorporated by reference into the
Prospectus as amended or supplemented) and of all amendments thereto (in
each case without exhibits) for distribution of one to each Underwriter.

(b) The Company will pay all expenses incident to the performance
of its obligations under this Agreement and will reimburse the
Underwriters for any expenses up to $9,000 (including fees and
disbursements of counsel) incurred by them in connection with
qualification of the Debentures for sale and the preparation of memoranda
as to Blue Sky qualifications and exemptions and as to eligibility of the
<PAGE> 8
8

Debentures for investment under the laws of such jurisdictions as you
designate. The Company shall not, however, be required to pay any amount
for any expenses of the Representatives or any of the Underwriters except
as provided in paragraph 4 hereof and except, that in the event this
Agreement shall be terminated in accordance with the provisions of
paragraph 8 or 9 hereof, the Company will pay the fees and disbursements
of counsel for the Underwriters, whose fees and disbursements the
Underwriters agree to pay in any other event. The Company shall not in
any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits.

(c) If at any time when a prospectus relating to the Debentures is
required to be delivered under the Act, any event relating to or affecting
the Company, or of which the Company shall be advised in writing by the
Representatives, shall occur, which in the opinion of the Company should
be set forth in a supplement to or an amendment of the Prospectus in order
to make the Prospectus as amended or supplemented not misleading in the
light of the circumstances when it is delivered, or which, in your
opinion, may be necessary in connection with the distribution of the
Debentures, the Company will forthwith at its expense prepare and furnish
to the Representatives a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Prospectus as amended or
supplemented which will supplement or amend the Prospectus as amended or
supplemented or file such documents so that the Prospectus as amended or
supplemented will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Prospectus as amended
or supplemented is delivered, not misleading. The Company will continue
to prepare and file with the Commission in a timely manner all documents
required to be filed pursuant to the requirements of the Exchange Act and
the Rules and Regulations.

(e) The Company will use its best efforts promptly to do and
perform all things to be done and performed by it hereunder prior to the
Closing Date and to satisfy all conditions precedent to the delivery by it
of the Debentures.

(f) The Company will use its best efforts to qualify the Debentures
for offer and sale under the Blue Sky laws of such states as the
Representatives may designate and will file such statements or reports as
are or may be reasonably required by the laws of such states; provided,
however, that the Company in complying with this paragraph need not
qualify to do business in any state nor execute a general consent to
service of process.

(g) The Company will apply the proceeds of the sale of the
Debentures, exclusive of accrued interest, if any, for the purposes set
forth in the Prospectus as amended or supplemented.

8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase and pay for the Debentures shall be
subject to the accuracy of, and compliance with, the representations and
warranties of the Company contained herein, to the performance by the Company
of its obligations to be performed hereunder prior to the Closing Date, and to
the following further conditions:

(a) The Prospectus as amended or supplemented in relation to the
Debentures shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by the
Rules and Regulations; and no stop order suspending the effectiveness of
the Registration Statement shall be in effect on the Closing Date and no
proceedings for that purpose shall be pending before, or threatened by,
the Commission on the Closing Date. The Representatives shall have
received, prior to payment for the Debentures, a certificate dated the
Closing Date and signed by the President, any Vice President or the
Treasurer of the Company to the effect that no such stop order is in
effect and that no proceedings for such purpose are pending before, or to
the knowledge of the Company threatened by, the Commission.

(b) On the Closing Date there shall be in full force and effect an
order of the Public Service Commission of the State of New York
authorizing the issuance and sale of debt securities, including the
Debentures, which shall not contain any provision mutually unacceptable to
the Representatives and the Company by reason of being materially adverse,
it being understood that no order in
<PAGE> 10
10

effect at the date of this Agreement contains any such unacceptable
provision.

(ii) The Agreement has been duly authorized, executed and
delivered by the Company;

(iii) An order has been adopted by the New York Public Service
Commission authorizing the issuance and sale of the Debentures and
the transactions related thereto as contemplated by the Agreement
and said order is still in full force and effect; and no further
approval, authorization, consent or other order of any public board
or body is legally required for the authorization of the issuance
and sale by the Company of the Debentures under the terms of this
Agreement except compliance with the provisions of securities or
Blue Sky laws of certain states in connection with the sale of the
Debentures to the public in such states;

(iv) The execution, delivery and performance of this Agreement,
the Indenture and the Debentures by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby
will not conflict with or result in a breach or violation by the
Company of any of the terms or provisions of, constitute a default
by the Company under, or result in the creation or imposition of any
lien, charge, security interest or encumbrance upon any of the
assets of the Company pursuant to the terms of, (A) any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument known to such counsel to which the Company is a party or
to which it or any of its properties is subject, (B) the Charter or
by-laws of the Company or (C) any statute, rule or regulation or, to
the best of such counsel's knowledge, any judgment, decree or order
of any court or governmental agency or body applicable to the
Company or any of its properties;
<PAGE> 11
11

(v) The Indenture conforms to the statements with respect
thereto contained in the Registration Statement and Prospectus as
amended or supplemented, has been duly authorized by the Company and
duly executed and delivered, and is a legal, valid and binding
agreement of the Company enforceable in accordance with its terms,
subject, however, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
The Indenture has been duly qualified under the Trust Indenture Act;

(vi) The Debentures conform to the terms of this Agreement and
to the statements with respect thereto contained in the Registration
Statement and Prospectus as amended or supplemented and have been
duly authorized; the Debentures have been duly executed,
authenticated and delivered and are legal, valid and binding
obligations of the Company enforceable in accordance with their
terms and are entitled to the benefits and security afforded by the
Indenture in accordance with the terms of such Indenture and such
Debentures;

(vii) The Company, to the best of such counsel's knowledge,
possesses all franchises, licenses, permits, consents and orders of
governmental and regulatory authorities and political subdivisions
required for the maintenance and operation of its properties and
business substantially as now conducted and as described in the
Registration Statement and the Prospectus as amended or
supplemented; or, if the Company does not possess all of such
franchises, licenses, permits, consents and orders, the absence of
such thereof as the Company does not possess will not, to the best
of such counsel's knowledge, affect the maintenance and operation of
such properties and business as a whole substantially as now
conducted; and

(viii) The Registration Statement has become effective under the
Act and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
are pending or contemplated under the Act, the Registration
Statement and the Prospectus, and each amendment or supplement
thereto (including any document incorporated by reference into the
Prospectus as amended or supplemented), as of their respective
effective or issue dates, complied as to form in all material
respects with the requirements of the Act, the
<PAGE> 12
12

Exchange Act and the Trust Indenture Act and the applicable rules
and regulations of the Commission thereunder; the conditions for use
of Form S-3, set forth in the General Instructions thereto, have
been satisfied; such counsel has no reason to believe that either
the Registration Statement or the Prospectus, or any such amendment
or supplement (including any document filed under the Exchange Act
and deemed to be incorporated by reference into the Prospectus as
amended or supplemented), considered as a whole on the effective
date of the Registration Statement and on the date hereof, contained
or contain any untrue statement of material fact or omitted or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; the
descriptions in the Registration Statement and the Prospectus as
amended or supplemented of statutes, legal and governmental
proceedings and contracts and other documents are accurate and
fairly present the information required to be shown; and such
counsel does not know of any legal or governmental proceedings
required to be described in the Prospectus as amended or
supplemented (or required to be filed under the Exchange Act if upon
such filing they would be incorporated, in whole or in part, by
reference in the Prospectus as amended or supplemented) which are
not described as required, nor of any contracts or documents of a
character required to be described in the Registration Statement or
Prospectus as amended or supplemented or to be filed as exhibits to
the Registration Statement which are not described and filed as
required; it being understood that such counsel need express no
opinion as to the financial statements or other financial data
contained or incorporated by reference in the Registration Statement
or the Prospectus as amended or supplemented.

(d) At the Closing Date, the Representatives shall receive from
Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters,
such opinion or opinions with respect to the valid existence of the
Company, the validity of the Debentures, the Registration Statement, the
Prospectus as amended or supplemented, and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.

in form and substance to the Representatives and Messrs. Milbank, Tweed,
Hadley & McCloy, counsel for the Underwriters, confirming that they are
independent auditors with respect to the Company within the meaning of the
Act and the applicable published rules and regulations thereunder, and
stating in effect that:

(ii) they have read the minutes of the meetings of the
stockholders and the Board of Directors of the Company, as set forth
in the minute books or, if not set forth therein, in the form
prepared by the Secretary of the Company, through a specified date
not more than five business days prior to the date of the closing,
read the unaudited financial statements, if any, incorporated by
reference into the Registration Statement and Prospectus as amended
or supplemented and also the latest available unaudited interim
financial statements of the Company and inquired of certain
officials of the Company responsible for financial and accounting
matters, and that such officials have stated that:

(A) any unaudited Balance Sheet, Statement of Income and
Statement of Cash Flows included or incorporated by reference in
the Registration Statement and Prospectus as amended or
supplemented complies as to form in all material respects with
the applicable accounting requirements of the Act and the
Exchange Act and the published rules and regulations of the
Commission thereunder, and are in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the most recent audited financial
statements included or incorporated by reference therein,

net current assets or Common Shareowners' Equity as compared
with amounts shown on the latest balance sheet included or
incorporated by reference in the Registration Statement and
Prospectus as amended or supplemented, except in all instances
(i) for changes or decreases that the Registration Statement and
Prospectus as amended or supplemented discloses have occurred or
may occur, (ii) for payment of maturing installments of
long-term debt, (iii) for conversions of convertible preferred
stock, (iv) for shares of common stock issued pursuant to the
Company's Employee Stock Purchase Plan, (v) for amounts withheld
from employees in connection with the Employee Stock Purchase
Plan, (vi) for the acquisition of long-term debt for sinking
fund purposes, (vii) for shares of preferred stock redeemed by
way of sinking funds, or (viii) for changes or decreases which
are described in such letter, identifying the same and
specifying the amount thereof, or

(C) for the twelve months ending on the date of the latest
available unaudited interim financial statements of the Company,
there were no decreases, as compared with the twelve months
ending on the date of the latest audited financial statements,
in total revenues, operating income, income before interest
charges, or in the total amount of net income, except in all
instances for decreases which the Registration Statement and
Prospectus as amended or supplemented discloses have occurred or
may occur, or which are described in such letter, identifying
the same and specifying the amount thereof;

reference in the Registration Statement and Prospectus as amended or
supplemented, except in all instances (i) for changes or decreases
that the Registration Statement and Prospectus as amended or
supplemented discloses have occurred or may occur, (ii) for payment
of maturing installments of long-term debt, (iii) for conversions of
convertible preferred stock, (iv) for shares of common stock issued
pursuant to the Company's Employee Stock Purchase Plan, (v) for
amounts withheld from employees in connection with the Employee
Stock Purchase Plan, (vi) for the acquisition of long-term debt for
sinking fund purposes, (vii) for purchase of preferred shares for
series scheduled to be redeemed by way of sinking funds, or (viii)
for changes or decreases which are described in such letter,
identifying the same and specifying the amount thereof; and

(iv) they have compared certain dollar amounts (and percentages
and other financial data derived from such dollar amounts) disclosed
in, or incorporated by reference into, the Registration Statement
and Prospectus as amended or supplemented or in Exhibits to the
Registration Statement, with such dollar amounts, percentages and
other financial information contained in the general accounting
records of the Company or derived directly from such records by
analysis or computation, and have found such dollar amounts,
percentages and other financial information to be in agreement
therewith, except as otherwise specified in such letter.

(f) Since the respective most recent dates of which information is
given in the Registration Statement and Prospectus as amended or
supplemented and up to the Closing Date, there shall have been no material
adverse change in the business, properties or financial condition or
results of operation of the Company, except as reflected in or
contemplated by the Registration Statement and the Prospectus, and any
amendments or supplements thereto (including any documents filed under the
Exchange Act and deemed to be incorporated by reference into the
Prospectus as amended or supplemented), and since such dates and up to the
Closing Date there shall have been no material transaction entered into by
the Company other than transactions disclosed by the Registration
Statement and the Prospectus, and any amendments or supplements thereto
(including any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus as amended or supplemented),
and transactions in the ordinary course of business; and at the Closing
Date the Representatives shall have received a certificate to such
<PAGE> 16
16

effect, signed by the President, any Vice President or the Treasurer of
the Company.

(g) All legal proceedings to be taken in connection with the
issuance and sale of the Debentures shall have been satisfactory in form
and substance to Messrs. Milbank, Tweed, Hadley & McCloy.

In case any of the conditions specified above in this Section 8
shall not have been fulfilled at the Closing Date, this Agreement may be
terminated by the Representatives, by mailing or delivering written notice
thereof to the Company. Any such termination shall be without liability of any
party to any other party except as otherwise provided in Section 7 hereof.

9. Conditions of the Obligation of the Company. The obligation of
the Company to deliver the Debentures shall be subject to the conditions set
forth in the second clause of the first sentence of paragraph (a) of Section 8
hereof and in paragraph (b) of Section 8 hereof. In case any of the conditions
specified in this Section 9 shall not have been fulfilled, this Agreement may
be terminated by the Company by mailing or delivering written notice thereof to
the Representatives. Any such termination shall be without liability of any
party to any other party except as otherwise provided in Section 7 hereof.

information furnished herein or in writing to the Company by or on behalf of
any Underwriter, through the Representatives, expressly for use in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented or any amendment or
supplement thereto; and PROVIDED, FURTHER, that the Company shall not be liable
in any case relating to any Preliminary Prospectus or any preliminary
prospectus supplement to the extent that any such loss, claim, damage,
liability, expense or action arises out of or is based upon the failure of any
Underwriter in connection with a sale of any of the Debentures to any person to
send or give a copy of the Prospectus, as the same may then be supplemented or
amended, to such person with or prior to the written confirmation of the sale
involved so long as the Company shall have fully complied with the last
sentence of Section 7(a) hereof. The indemnity agreement of the Company
contained in this paragraph and the representations and warranties of the
Company contained in Section 3 hereof shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or any such controlling person, and shall survive the delivery of
the Debentures. The Underwriters agree promptly to notify the Company of the
commencement of any litigation or proceedings against them or any of them, or
any such controlling person, in connection with the sale of the Debentures or
with any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented or any
amendment or supplement thereto.

(b) Each Underwriter agrees to indemnify and hold harmless the
Company, its officers and directors, each other Underwriter, and each person
who controls any thereof within the meaning of Section 15 of the Act, against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them become subject under the Act or any other statute or common
law and to reimburse each of them for any legal or other expenses (including,
to the extent hereinafter provided, reasonable counsel fees) incurred by them
in connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or are
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented or any amendment or supplement thereto (if any amendments or
supplements thereto shall have been furnished) or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such statement or
omission was made in reliance upon information furnished herein or in writing
to the Company by or on behalf of such Underwriter, through the
<PAGE> 18
18

Representatives, expressly for use in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented or any amendment or supplement thereto. The
indemnity agreement of the respective Underwriters contained in this paragraph
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Company, or any such other
Underwriter or any such controlling person, and shall survive the delivery of
the Debentures. The Company agrees promptly to notify the Representatives of
the commencement of any litigation or proceedings against the Company or any of
its officers or directors or against any such controlling person in connection
with the sale of the Debentures or with any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented or any amendment or supplement thereto.

subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation unless (i) the indemnified
party shall have employed such counsel in connection with the assumption of
legal defenses in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by the
Representatives in the case of paragraph (a) of this Section 10, representing
the indemnified parties under paragraph (a) or (b) of this Section 10, as the
case may be, who are parties to such action), (ii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.

(d) If the indemnification provided for in this Section 10 shall
for any reason be unavailable to an indemnified party under paragraphs (a) or
(b) of this Section 10 in respect of any loss, claim, damage or liability, or
any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the offering
of the Debentures or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
with respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Debentures (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by
the Underwriters with respect to such offering, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if
<PAGE> 20
20

contributions pursuant to this Section 10 were to be determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 10
shall be deemed to include, for purposes of this Section 10, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Debentures underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
paid or becomes liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this paragraph (d) are several in proportion to their respective underwriting
obligations and not joint.

(e) The agreements contained in this Section 10, the
representations and warranties of the Company in Section 3 hereof and the
agreements of the Company in Section 7 hereof shall survive the delivery of the
Debentures. The agreements contained in this Section 10, the representations
and warranties of the Company in Section 3 hereof and the agreements of the
Company in Section 7(b) hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.

11. Termination. This Agreement may be terminated at any time
prior to the Closing Date by the Representatives with the consent of a majority
in interest of the Underwriters including yourselves upon notice thereof to the
Company, if prior to such time (a) the Company has failed, refused or been
unable to perform any agreement on its part to be performed hereunder, (b) any
other condition of the Underwriters' obligations hereunder is not fulfilled,
(c) there shall have occurred any general suspension of trading in securities
on the New York Stock Exchange or the American Stock Exchange or there shall
have been established by the New York Stock Exchange or the American Stock
Exchange or by the Commission or by any federal or state agency or by the
decision of any court any limitation on prices for such trading or any
restrictions on the distribution of securities, (d) a banking moratorium shall
have been declared either by federal or New York State authorities, (e) an
outbreak or escalation of hostilities involving the United States shall have
<PAGE> 21
21

occurred or there shall have been a declaration by the United States of a
national emergency or war or (f) there shall have occurred such a material
adverse change in general economic, political or financial conditions, or the
effect of international conditions on the financial markets in the United
States is such, as to make it impracticable or inadvisable, in the judgment of
a majority in interest of the Underwriters, to proceed with the delivery of the
Debentures. Any termination hereof pursuant to this Section 11 shall be
without liability of any party to any other party except as otherwise provided
in Section 7 hereof.

12. Information Furnished by Underwriters. The statements set
forth in the last paragraph on the cover page, the paragraph containing
stabilization information on the inside front cover page and the statements
under the caption "Underwriting" in any Prospectus as amended or supplemented
constitute the only written information furnished by or on behalf of any
Underwriter referred to in paragraph (b) of Section 3 hereof and in paragraphs
(a) and (b) of Section 10 hereof.

14. Notices. All communications hereunder shall be in writing or
by telegram and, if to the Underwriters, shall be mailed or delivered to the
Representatives c/o Lehman Brothers Inc., 3 World Financial Center, New York,
New York 10285-1100, attention: Syndicate Department; if to the Company, shall
be mailed or delivered to it at 175 East Old Country Road, Hicksville, New York
11801, attention: Treasurer.
<PAGE> 22
22

Please sign and return to us _______ counterparts of this letter,
whereupon this letter will become a binding agreement between the Company and
the Underwriters in accordance with its terms.

Very truly yours,

LONG ISLAND LIGHTING COMPANY

By:
-------------------------

The foregoing agreement is
hereby confirmed and
accepted, as of the
date first above written.

LEHMAN BROTHERS INC.
[Names of other Representatives]
As Representatives of the several Underwriters

By: LEHMAN BROTHERS INC.

By:
-------------------------------
<PAGE> 23
SCHEDULE I

____ Series Debentures

Title: Debentures, ____% Series Due ____
(the "____ Series Debentures")

Aggregate principal
amount: $___________

Price to Public: ______% of the aggregate principal
amount ofthe ____ Series Debentures

Underwriting Discounts
and Commissions: $_________, being ____% of the aggregate principal
amount of the ____ Series Debentures

Concession to Certain
Securities Dealers: .__% of the aggregate principal amount of the ____
Series Debentures

Re-allowance to Brokers
and Dealers: .__% of the aggregate principal amount of the ____
Series Debentures

Maturity:

Interest Rate:

Interest Payment Dates:

Redemption Provisions:

Sinking Fund Provisions:
<PAGE> 24
SCHEDULE II

<TABLE>
<CAPTION>
Principal
Amount of
____ Series
Underwriter Debentures
- ----------- -----------
<S> <C>
Lehman Brothers Inc. . . . . . . . . . . . . . . . . . . . $
[Names of other Representatives] . . . . . . . . . . . . . $

Total $
</TABLE>

<PAGE> 1
Exhibit 1(c)

_______ Shares

LONG ISLAND LIGHTING COMPANY

Common Stock
(Par Value $5 per share)

UNDERWRITING AGREEMENT

_______, 199_

Lehman Brothers Inc.
[Names of other Representatives]
As Representatives of the several
Underwriters
c/o Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285-1100

Dear Sirs:

The undersigned, Long Island Lighting Company (the "Company"), hereby
confirms its agreement with each of the several underwriters, hereinafter
named, as follows:

2. Description of Common Stock. The Company proposes to issue and
sell to the Underwriters certain shares (the "Firm Stock") of its Common Stock,
par value $5 per share (the "Common Stock"). In addition, the Company proposes
to grant to the Underwriters an option to purchase up to an additional _____
shares of the Common Stock on the terms and for the purposes set forth in
Section 4 (the "Option Stock"). The Firm Stock and the
<PAGE> 2
2

Option Stock, if purchased, are hereinafter collectively called the "Stock."
Schedule I hereto specifies the aggregate number of shares of the Stock, the
initial per share public offering price of the Stock, the per share purchase
price to the Underwriters, any concession from the initial public offering
price to be allowed to dealers or to brokers and any additional terms of the
Stock.

3. Representations and Warranties of the Company. The Company
represents and warrants to each of the Underwriters, as of the date hereof and
as of each Delivery Date (as hereinafter defined), that:

(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
33-_____) under the Securities Act of 1933, as amended (the "Act"), for
the registration of the Stock under the Act. The various parts of such
registration statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained therein at the time
such part of the registration statement became effective, each as amended
at the time such part of the registration statement became effective, is
hereinafter called the "Registration Statement" and any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any document filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement that
is incorporated by reference in the Registration Statement. The
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered or to be delivered to the Representatives
and, excluding exhibits to the Registration Statement, to the
Representatives for each of the other Underwriters, if any, have been
declared effective by the Commission in such form. No other document with
respect to the Registration Statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing with
the Commission, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission. Any preliminary
prospectus included in the Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the Rules and Regulations (as
defined below) of the Commission under the Act is hereinafter called a
"Preliminary Prospectus"; the prospectus relating to the Stock, in the
form in which it has most recently been filed, or transmitted for filing,
with the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such
<PAGE> 3
3

Preliminary Prospectus or Prospectus, as the case may be; any reference to
any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the Stock in the form
in which it is filed with the Commission pursuant to Rule 424(b) under the
Act, including any documents incorporated by reference therein as of the
date of such filing). Any reference to "Rules and Regulations" shall mean
the rules, regulations and releases adopted by the Commission under either
the Act or the Exchange Act, as applicable.

The Company will not file any amendment to the Registration Statement
or any amendment or supplement to any Preliminary Prospectus or
Prospectus, or file any document under the Exchange Act before the
termination of the offering of the Stock by the Underwriters if such
document would be deemed to be incorporated by reference into such
Preliminary Prospectus or Prospectus, of which the Representatives shall
not previously have been advised and provided with a copy or to which the
Representatives shall reasonably object in writing or which shall be
disapproved by Messrs. Milbank, Tweed, Hadley & McCloy, who are acting as
counsel on behalf of the Underwriters.

(b) The Registration Statement and the Prospectus and any amendment
or supplement thereto as of their respective effective or issue dates or
the date on which they were filed with the Commission, as the case may be,
and as of each Delivery Date (1) contained or will contain, as applicable,
all statements of material fact required to be stated therein in
accordance with the Act and the Rules and Regulations (as defined below);
(2) conformed or will conform, as applicable, in all material respects to
the requirements of the Act and the Rules and Regulations; and (3) do not
and will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, except that the foregoing does not
apply to statements or omissions in such documents based upon written
information furnished to the Company by any Underwriter specifically for
use therein.

(c) The Company and each of its subsidiaries (as defined in Section
20) have been duly incorporated and are validly existing as corporations
in good standing under the
<PAGE> 4
4

laws of their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign corporations
in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold
their respective properties and to conduct the businesses in which they
are engaged; and none of the subsidiaries of the Company is a "significant
subsidiary", as such term is defined in Rule 405 of the Rules and
Regulations.

(d) The Company has and will have an authorized capitalization as
set forth in the Prospectus and the Prospectus as amended or supplemented,
and all of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, are fully paid and nonassessable
and conform to the description thereof contained in the Prospectus; and
all of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable and (except for directors' qualifying shares) are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.

(e) The financial statements and schedules (including the related
notes and supporting schedules) included or incorporated by reference in
the Registration Statement or Prospectus as amended or supplemented
present fairly the financial condition and operations of the Company at
the respective dates or for the respective periods to which they apply
except as otherwise indicated in the Registration Statement or Prospectus
as amended or supplemented; such financial statements have been prepared
in each case in accordance with generally accepted accounting principles
consistently applied throughout the periods involved except as otherwise
indicated in the Registration Statement and Prospectus as amended or
supplemented. Ernst & Young, who have examined the audited financial
statements and schedules (including the related notes and supporting
schedules) included or incorporated by reference in the Registration
Statement or Prospectus as amended or supplemented and whose report
appears or is incorporated by reference in the Prospectus as amended or
supplemented, are, and were during the periods covered by the financial
statements on which they reported, independent public accountants as
required by the Act and the Rules and Regulations.

(f) Except as reflected in, or contemplated by, the Registration
Statement and the Prospectus as amended or supplemented, since the
respective most recent dates as of which information is given in the
Registration Statement and the Prospectus as amended or supplemented,
there has not
<PAGE> 5
5

been any material adverse change in the business, properties or financial
condition or results of operation of the Company, and since such dates
there has not been any material transaction entered into by the Company
other than transactions contemplated by the Registration Statement and
Prospectus as amended or supplemented and transactions in the ordinary
course of business, and (ii) there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a
party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company
or any of its subsidiaries might have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries; and
to the best of the Company's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others. The
Company has no material contingent obligation which is not disclosed in
the Registration Statement and Prospectus as amended or supplemented.

(g) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof on the part of the Company to be fulfilled
have been duly authorized by all necessary corporate action of the Company
in accordance with the provisions of its Restated and Amended Certificate
of Incorporation (the "Charter") and by-laws and applicable law, and the
shares of Stock have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and nonassessable and will have the rights set
forth in the Charter. The Stock when issued will conform to the
description thereof contained in the Registration Statement and the
Prospectus as amended or supplemented.

(h) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of the Charter or
by-laws of the Company or any of its subsidiaries or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets; and except for the order of the Public Service
Commission of the
<PAGE> 6
6

State of New York which has been received by the Company, the registration
of the Stock under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act
and applicable state securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court
or governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby.

(i) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by the
Company under the Act.

(j) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations which have not been
described in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by the Rules
and Regulations.

(k) The documents which are incorporated by reference in the
Prospectus as amended or supplemented or from which information is so
incorporated by reference, when they became effective or were filed with
the Commission, as the case may be, conformed in all material respects
with the requirements of the Act or the Exchange Act, as applicable, and
the Rules and Regulations, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any documents so filed and incorporated by reference
subsequent to the effective date of the Registration Statement shall, when
they are filed with the Commission, conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
Rules and Regulations and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.

(l) The conditions for use of Form S-3, set forth in the General
Instructions thereto, have been satisfied.
<PAGE> 7
7

4. Purchase and Sale. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each of the Underwriters, and
each such Underwriter agrees, severally and not jointly, to purchase from the
Company, at the purchase price set forth in Schedule I hereto, the number of
shares of Firm Stock set forth opposite the name of such Underwriter in
Schedule II hereto.

In addition, the Company grants to the Underwriters an option to
purchase the number of shares of Option Stock set forth in Schedule I hereto.
Such option is granted solely for the purpose of covering over-allotments in
the sale of Firm Stock and is exercisable as provided in Section 6 hereof.
Shares of Option Stock shall be purchased severally for the account of the
Underwriters in proportion to the number of shares of Firm Stock set forth
opposite the name of such Underwriters in Schedule II hereto. The respective
purchase obligations of each Underwriter with respect to the Option Stock shall
be adjusted by the Representatives so that no Underwriter shall be obligated to
purchase Option Stock other than in 100 share amounts. The purchase price of
both the Firm Stock and any Option Stock is set forth in Schedule I hereto.

The Company shall not be obligated to deliver any of the Stock to be
delivered on the First Delivery Date or the Second Delivery Date (as
hereinafter defined) except upon payment for all the Stock to be purchased on
such Delivery Date as provided herein.

5. Offering of Stock by Underwriters. Subject to the terms and
conditions of this Agreement, it is understood that the Underwriters propose to
make a bona fide public offering of the Stock as soon as practicable after the
execution of this Agreement.

6. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm Stock shall be made at the office of Lehman Brothers Inc.,
[address], at 10:00 A.M., New York City time, on the fifth full business day
following the date of this Agreement or at such other date or place as shall be
determined by agreement between the Representatives and the Company. This date
and time are sometimes referred to as the "First Delivery Date." On the First
Delivery Date, the Company shall deliver or cause to be delivered certificates
representing the Firm Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the Company of the purchase
price by certified or official bank check or checks payable in New York
Clearing House (next-day) funds. Time shall be of the essence, and delivery at
the time and place specified pursuant to this Agreement is a further condition
of the obligation of each Underwriter hereunder. Upon delivery, the Firm Stock
shall be registered in such names and in such denominations as the
<PAGE> 8
8

Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking
and packaging of the certificates for the Firm Stock, the Company shall make
the certificates representing the Firm Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.

At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 4 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate number of shares of Option Stock as to which the option is being
exercised, the names in which the shares of Option Stock are to be registered,
the denominations in which the shares of Option Stock are to be issued and the
date and time, as determined by the Representatives, when the shares of Option
Stock are to be delivered; provided, however, that this date and time shall not
be earlier than the First Delivery Date nor earlier than the second business
day after the date on which the option shall have been exercised nor later than
the fifth business day after the date on which the option shall have been
exercised or at such other date or place as shall be determined by agreement
between the Representatives and the Company. The date and time the shares of
Option Stock are delivered are sometimes referred to as the "Second Delivery
Date" and the First Delivery Date and the Second Delivery Date are sometimes
each referred to as a "Delivery Date".

Delivery of and payment for the Option Stock shall be made at the
office of Lehman Brothers Inc., [address] (or at such other place as shall be
determined by agreement between the Representatives and the Company) at 10:00
A.M., New York City time, on the Second Delivery Date. On the Second Delivery
Date, the Company shall deliver or cause to be delivered the certificates
representing the Option Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the Company of the purchase
price by certified or official bank check or checks payable in New York
Clearing House (next-day) funds. Time shall be of the essence, and delivery at
the time and place specified pursuant to this Agreement is a further condition
of the obligation of each Underwriter hereunder. Upon delivery, the Option
Stock shall be registered in such names and in such denominations as the
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Stock, the Company shall make the certificates representing the Option Stock
available for inspection by the Representatives in New York, New York, not
later than 2:00 P.M., New York City time, on the business day prior to the
Second Delivery Date.
<PAGE> 9
9

If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
forth opposite the name of each remaining non-defaulting Underwriter in
Schedule II hereto bears to the total number of shares of the Firm Stock set
forth opposite the names of all the remaining non-defaulting Underwriters in
Schedule II hereto; provided, however, that the remaining non-defaulting
Underwriters shall not be obligated to purchase any of the Stock on such
Delivery Date if the total number of shares of the Stock which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such date exceeds
9.09% of the total number of shares of the Stock to be purchased on such
Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 4.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on
such Delivery Date, this Agreement (or, with respect to the Second Delivery
Date, the obligation of the Underwriters to purchase, and of the Company to
sell the Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Section 7(b). As used in this Agreement, the term "Underwriter" includes, for
all purposes of this Agreement unless the context requires otherwise, any party
not listed in Schedule II hereto who, pursuant to this Section, purchases Stock
which a defaulting Underwriter agreed but failed to purchase.

Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the First Delivery Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel
for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
<PAGE> 10
10

7. Covenants of the Company. The Company agrees that:

(a) The Company will prepare the Prospectus as amended or
supplemented in a form approved by the Representatives and will file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 424(b). The Company will at or prior to
the First Delivery Date deliver to each of the Representatives and to
counsel for the Underwriters one signed copy of the Registration Statement
as originally filed and of all amendments or supplements thereto
(including conformed copies of any document filed under the Exchange Act
and deemed to be incorporated by reference into the Prospectus as amended
or supplemented), heretofore or hereafter made, including any
post-effective amendment (in each case including all exhibits filed
therewith, except exhibits incorporated by reference unless specifically
requested), including a signed copy of each consent and certificate
included therein or filed as an exhibit thereto. As soon as the Company
is advised thereof, it will advise the Representatives orally (i) when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed with the Commission and (ii) of the issuance of any stop
order under the Act with respect to the Registration Statement or any
suspension of the qualification of the Common Stock in any jurisdiction,
or the institution of any proceedings therefor of which the Company shall
have received notice, and will use its best efforts to prevent the
issuance of any such stop order or suspension and to secure the prompt
removal thereof if issued. The Company will deliver to the Underwriters,
in accordance with the Representatives' instructions, as many copies of
the Prospectus as amended or supplemented as the Representatives may
reasonably request for the purposes contemplated by the Act, and will
deliver to the Representatives as soon as practicable sufficient conformed
copies of the Registration Statement (including conformed copies of any
document filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus as amended or supplemented) and of all
amendments thereto (in each case without exhibits) for distribution of one
to each Underwriter.

(b) The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Underwriters
for any expenses up to $9,000 (including fees and disbursements of
counsel) incurred by them in connection with qualification of the Stock
for sale and the preparation of memoranda as to Blue Sky
<PAGE> 11
11

qualifications and exemptions and as to eligibility of the Stock for
investment under the laws of such jurisdictions as you designate. The
Company shall not, however, be required to pay any amount for any expenses
of the Representatives or any of the Underwriters except as provided in
paragraph 4 hereof and except, that in the event this Agreement shall be
terminated in accordance with the provisions of Section 8 or 9 hereof, the
Company will pay the fees and disbursements of counsel for the
Underwriters, whose fees and disbursements the Underwriters agree to pay
in any other event. The Company shall not in any event be liable to any
of the several Underwriters for damages on account of loss of anticipated
profits.

(c) If at any time when a prospectus relating to the Stock is
required to be delivered under the Act, any event relating to or affecting
the Company, or of which the Company shall be advised in writing by the
Representatives, shall occur, which in the opinion of the Company should
be set forth in a supplement to or an amendment of the Prospectus in order
to make the Prospectus as amended or supplemented not misleading in the
light of the circumstances when it is delivered, or which, in your
opinion, may be necessary in connection with the distribution of the
Stock, the Company will forthwith at its expense prepare and furnish to
the Representatives a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Prospectus as amended or
supplemented which will supplement or amend the Prospectus as amended or
supplemented or file such documents so that the Prospectus as amended or
supplemented will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Prospectus as amended
or supplemented is delivered, not misleading. The Company will continue
to prepare and file with the Commission in a timely manner all documents
required to be filed pursuant to the requirements of the Exchange Act and
the Rules and Regulations.

(e) For a period of 180 days from the date of the Prospectus as
amended or supplemented, the Company will not offer for sale, sell or
otherwise dispose of, directly or indirectly, any shares of Common Stock
(other than the Stock and shares issued pursuant to the Company's Employee
Stock Purchase Plan, Automatic Dividend Reinvestment Plan, employee
benefit plans, qualified stock option plans or other employee compensation
plans existing on the date hereof or pursuant to currently outstanding
options, warrants or rights), or sell or grant options, rights or warrants
with respect to any shares of Common Stock (other than the grant of
options pursuant to options plans existing on the date hereof), without
the prior written consent of the Representatives.

(f) The Company will use its best efforts promptly to do and perform
all things to be done and performed by it hereunder prior to each Delivery
Date and to satisfy all conditions precedent to the delivery by it of the
Stock.

(g) The Company will use its best efforts to qualify the Stock for
offer and sale under the Blue Sky laws of such states as the
Representatives may designate and will file such statements or reports as
are or may be reasonably required by the laws of such states; provided,
however, that the Company in complying with this paragraph need not
qualify to do business in any state nor execute a general consent to
service of process.

(h) The Company will apply the proceeds of the sale of the Stock for
the purposes set forth in the Prospectus as amended or supplemented.

8. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase and pay for the Stock shall be subject to the
accuracy, when made and on each Delivery Date, of, and compliance with, the
representations and warranties of the Company contained herein, to the
performance by the Company of its obligations to be performed hereunder prior
to each Delivery Date, and to the following further terms and conditions:

Statement or the Prospectus or otherwise shall have been complied with.

The Representatives shall have received, prior to any payment for the
Stock, a certificate dated the respective Delivery Date and signed by the
President, any Vice President or the Treasurer of the Company to the
effect that no such stop order is in effect and that no proceedings for
such purpose are pending before, or to the knowledge of the Company
threatened by, the Commission.

(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of Milbank, Tweed, Hadley
& McCloy, counsel for the Underwriters, is material or omits to state a
fact which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to make the statements therein not
misleading.

(c) On each Delivery Date there shall be in full force and effect an
order of the Public Service Commission of the State of New York
authorizing the issuance and sale of the Stock which shall not contain any
provision mutually unacceptable to the Representatives and the Company by
reason of being materially adverse, it being understood that no order in
effect at the date of this Agreement contains any such unacceptable
provision.

(d) At each Delivery Date, the Representatives shall receive a
favorable opinion from either Robert J. Grey, Esq., General Counsel of the
Company, or Herbert M. Leiman, Esq., Assistant General Counsel of the
Company, which opinion shall be satisfactory in form and substance to
Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, to
the effect that --

(i) The Company and each of its subsidiaries is a corporation
duly organized and validly existing, in good standing under the laws
of the State of New York, are duly qualified to do business and are
in good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the conduct
of their business requires such qualifications, with power and
authority (corporate and other) to own their property, to carry on
their business and to issue the Stock;

(ii) The Agreement has been duly authorized, executed and
delivered by the Company;
<PAGE> 14
14

(iii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of
the Company, including the shares of Stock being delivered on such
Delivery Date, have been duly and validly authorized and issued, are
fully paid and nonassessable and conform to the description thereof
contained in the Registration Statement and the Prospectus as amended
or supplemented;

(iv) There are no preemptive or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any
shares of the Stock pursuant to the Company's Charter or by-laws or
any agreement or other instrument known to such counsel;

(v) An order has been adopted by the Public Service Commission
of the State of New York authorizing the issuance and sale of the
Stock and the transactions related thereto as contemplated by the
Agreement and said order is still in full force and effect; and no
further approval, authorization, consent or other order of any court,
governmental agency, public board or body is legally required for the
authorization of the issuance and sale by the Company of the Stock
under the terms of this Agreement except compliance with the
provisions of securities or Blue Sky laws of certain states in
connection with the sale of the Stock to the public in such states;

(vi) The Company has good and marketable title in fee simple to
all real property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such
property and do not materially interfere with the use made and
proposed to be made of such property by the Company; and all real
property and buildings held under lease by the Company are held by
them under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the
Company. In giving the above opinion, such counsel may state that no
examination of record titles for the purpose of such opinion has been
made, and that he is relying upon a general review of the titles of
the Company, upon opinions of local counsel and abstracts, reports
and policies of title companies rendered or issued at or subsequent
to the time of acquisition of such property by the Company, upon
opinions of counsel to the lessors of such property and, in respect
of matters of fact, upon certificates of officers of the Company,
provided that such counsel
<PAGE> 15
15

shall state that he believes that both the Underwriters and he are
justified in relying upon such opinions, abstracts, reports, policies
and certificates;

(vii) The execution, delivery and performance of this Agreement
and the Stock by the Company and the consummation by the Company of
the transactions contemplated hereby will not conflict with or result
in a breach or violation by the Company of any of the terms or
provisions of, constitute a default by the Company under, or result
in the creation or imposition of any lien, charge, security interest
or encumbrance upon any of the assets of the Company pursuant to the
terms of, (A) any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument known to such counsel to which
the Company is a party or to which it or any of its properties is
subject, (B) the Charter or by-laws of the Company or (C) any
statute, rule or regulation or, to the best of such counsel's
knowledge, any judgment, decree or order of any court or governmental
agency or body applicable to the Company or any of its properties;

(viii) The Company, to the best of such counsel's knowledge,
possesses all franchises, licenses, permits, consents and orders of
governmental and regulatory authorities and political subdivisions
required for the maintenance and operation of its properties and
business substantially as now conducted and as described in the
Registration Statement and the Prospectus as amended or supplemented;
or, if the Company does not possess all of such franchises, licenses,
permits, consents and orders, the absence of such thereof as the
Company does not possess will not, to the best of such counsel's
knowledge, affect the maintenance and operation of such properties
and business as a whole substantially as now conducted; and

(ix) The Registration Statement has become effective under the
Act and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
are pending or contemplated under the Act, the Registration Statement
and the Prospectus, and each amendment or supplement thereto
(including any document incorporated by reference into the Prospectus
as amended or supplemented), as of their respective effective or
issue dates, complied as to form in all material respects with the
requirements of the Act and the Exchange Act and the Rules and
Regulations; the conditions for use of Form S-3, set forth in the
General Instructions thereto, have been satisfied; such
<PAGE> 16
16

counsel has no reason to believe that either the Registration
Statement or the Prospectus, or any such amendment or supplement
(including any document filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus as amended or
supplemented), considered as a whole on the effective date of the
Registration Statement and on the date hereof, contained or contain
any untrue statement of material fact or omitted or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; the descriptions in the
Registration Statement and the Prospectus as amended or supplemented
of statutes, legal and governmental proceedings and contracts and
other documents are accurate and fairly present the information
required to be shown; and such counsel does not know of any legal or
governmental proceedings required to be described in the Prospectus
as amended or supplemented (or required to be filed under the
Exchange Act if upon such filing they would be incorporated, in whole
or in part, by reference in the Prospectus as amended or
supplemented) which are not described as required, nor of any
contracts or documents of a character required to be described in the
Registration Statement or Prospectus as amended or supplemented or to
be filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such
counsel need express no opinion as to the financial statements or
other financial data contained or incorporated by reference in the
Registration Statement or the Prospectus as amended or supplemented;

[(x) The statements contained in the Prospectus under the
caption ___, insofar as they describe federal statutes, rules and
regulations, constitute a fair summary thereof and the opinion of
such counsel filed as Exhibit 8 to the Registration Statement is
confirmed and the Underwriters may rely upon such opinion as if it
were addressed to them;] and

(xi) To the best of such counsel's knowledge, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file
a registration statement under the Act with respect to any securities
of the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
<PAGE> 17
17

(e) At each Delivery Date, the Representatives shall receive from
Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters,
such opinion or opinions with respect to the valid existence of the
Company, the validity of the Stock, the Registration Statement, the
Prospectus as amended or supplemented, and other related matters as you
may require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.

(f) On the date of this Agreement and on each Delivery Date the
Representatives shall have received from Ernst & Young a letter (with
copies thereof for each of the Underwriters), which letter shall be
reasonably satisfactory in form and substance to the Representatives and
Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters,
confirming that they are independent auditors with respect to the Company
within the meaning of the Act and the applicable published rules and
regulations thereunder, and stating in effect that:

(ii) they have read the minutes of the meetings of the
stockholders and the Board of Directors of the Company, as set forth
in the minute books or, if not set forth therein, in the form
prepared by the Secretary of the Company, through a specified date
not more than five business days prior to the Delivery Date, read the
unaudited financial statements, if any, incorporated by reference
into the Registration Statement and Prospectus as amended or
supplemented and also the latest available unaudited interim
financial statements of the Company and inquired of certain officials
of the Company responsible for financial and accounting matters, and
that such officials have stated that:

the published rules and regulations of the Commission
thereunder, and are in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the most recent audited financial
statements included or incorporated by reference therein,

(B) at the date of the latest available balance sheet read
by such accountants, there was no change in the capital stock
(including Common Stock, Preferred Stock and Premium on Capital
Stock but excluding Capital Stock Expense) or long-term debt of
the Company or any decrease in net current assets or Common
Shareowners' Equity as compared with amounts shown on the latest
balance sheet included or incorporated by reference in the
Registration Statement and Prospectus as amended or
supplemented, except in all instances (i) for changes or
decreases that the Registration Statement and Prospectus as
amended or supplemented discloses have occurred or may occur,
(ii) for payment of maturing installments of long-term debt,
(iii) for conversions of convertible preferred stock, (iv) for
shares of common stock issued pursuant to the Company's Employee
Stock Purchase Plan, (v) for amounts withheld from employees in
connection with the Employee Stock Purchase Plan, (vi) for the
acquisition of long-term debt for sinking fund purposes, (vii)
for shares of preferred stock redeemed by way of sinking funds,
or (viii) for changes or decreases which are described in such
letter, identifying the same and specifying the amount thereof,
or

(C) for the twelve months ending on the date of the latest
available unaudited interim financial statements of the Company,
there were no decreases, as compared with the twelve months
ending on the date of the latest audited financial statements,
in total revenues, operating income, income before interest
charges, or in the total amount of net income, except in all
instances for decreases which the Registration Statement and
Prospectus as amended or supplemented discloses have occurred or
may occur, or which are described in such letter, identifying
the same and specifying the amount thereof;

officials of the Company responsible for financial and accounting
matters, and that such officials have stated that, with respect to
the period from the date of the latest available financial statements
of the Company to a specified date not more than five business days
prior to the date of such letter, there was no change in the capital
stock (including Common Stock, Preferred Stock and Premium on Capital
Stock but excluding Capital Stock Expense) or long-term debt of the
Company or any decrease in net current assets or Common Shareowners'
Equity as compared with the amounts shown in the latest financial
statements included or incorporated by reference in the Registration
Statement and Prospectus as amended or supplemented, except in all
instances (i) for changes or decreases that the Registration
Statement and Prospectus as amended or supplemented discloses have
occurred or may occur, (ii) for payment of maturing installments of
long-term debt, (iii) for conversions of convertible preferred stock,
(iv) for shares of common stock issued pursuant to the Company's
Employee Stock Purchase Plan, (v) for amounts withheld from employees
in connection with the Employee Stock Purchase Plan, (vi) for the
acquisition of long-term debt for sinking fund purposes, (vii) for
purchase of preferred shares for series scheduled to be redeemed by
way of sinking funds, or (viii) for changes or decreases which are
described in such letter, identifying the same and specifying the
amount thereof; and

(g) Since the respective most recent dates as of which information
is given in the Registration Statement and Prospectus as amended or
supplemented and up to such Delivery Date, there shall have been no
material adverse change in the business, properties or financial condition
or results of operation of the Company, except as reflected in or
contemplated by the Registration Statement and the Prospectus, and any
amendments or supplements thereto (including any documents filed under the
Exchange Act and deemed to be incorporated by reference into the
Prospectus as amended or supplemented), and since such dates and up to
such Delivery Date there shall have been no material transaction entered
into by the Company other than transactions disclosed by the Registration
Statement and the Prospectus, and any amendments or supplements thereto
(including any documents filed under the Exchange Act and
<PAGE> 20
20

deemed to be incorporated by reference into the Prospectus as amended or
supplemented), and transactions in the ordinary course of business; and at
such Delivery Date the Representatives shall have received a certificate
to such effect, signed by the President, any Vice President or the
Treasurer of the Company.

(h) Subsequent to the execution and delivery of this Agreement and
prior to each Delivery Date (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) of the Rules and
Regulations and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities or
preferred stock.

(i) All legal proceedings to be taken and all opinions, letters,
evidence and certificates mentioned above or elsewhere in this Agreement
in connection with the issuance and sale of the Stock shall have been
satisfactory in form and substance to Messrs. Milbank, Tweed, Hadley &
McCloy.

In case any of the conditions specified above in this Section 8 shall
not have been fulfilled at each Delivery Date, this Agreement may be terminated
by the Representatives, with the consent of the Underwriters including
yourselves who have agreed to purchase in the aggregate fifty percent or more
of the Stock, by mailing or delivering written notice thereof to the Company.
Any such termination shall be without liability of any party to any other party
except as otherwise provided in Section 7 hereof.

9. Conditions of the Obligation of the Company. The obligation of
the Company to deliver the Stock shall be subject to the conditions set forth
in the second clause of the first sentence of paragraph (a) of Section 8 hereof
and in paragraph (c) of Section 8 hereof. In case any of the conditions
specified in this Section 9 shall not have been fulfilled, this Agreement may
be terminated by the Company by mailing or delivering written notice thereof to
the Representatives. Any such termination shall be without liability of any
party to any other party except as otherwise provided in Section 7 hereof.
<PAGE> 21
21

10. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person who controls any Underwriter within
the meaning of Section 15 of the Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act or any other statute or common law and to
reimburse, as incurred each such Underwriter and controlling person for any
legal or other expense (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them in connection with investigating any
such losses, claims, damages or liabilities or in connection with preparing to
defend or defending any actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented or any amendment or
supplement thereto (if any amendments or supplements thereto shall have been
furnished) or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the indemnity agreement contained in
this paragraph shall not apply to any such losses, claims, damages,
liabilities, expenses or actions arising out of or based upon any such untrue
statement or alleged untrue statement or any such omission or alleged omission,
if such statement or omission was made in reliance upon information furnished
herein or in writing to the Company by or on behalf of any Underwriter, through
the Representatives, expressly for use in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented or any amendment or supplement thereto; and
provided, further, that the Company shall not be liable in any case relating to
any Preliminary Prospectus or any preliminary prospectus supplement to the
extent that any such loss, claim, damage, liability, expense or action arises
out of or is based upon the failure of any Underwriter in connection with a
sale of any of the Stock to any person to send or give a copy of the
Prospectus, as the same may then be supplemented or amended, to such person
with or prior to the written confirmation of the sale involved so long as the
Company shall have fully complied with the last sentence of Section 7(a)
hereof. The indemnity agreement of the Company contained in this paragraph and
the representations and warranties of the Company contained in Section 3 hereof
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or any such controlling
person, and shall survive the delivery of the Stock. The Underwriters agree
promptly to notify the Company of the commencement of any litigation or
proceedings against them or any of them, or any such controlling person, in
connection with the sale of the Stock or with any Preliminary Prospectus, any
preliminary prospectus supplement,
<PAGE> 22
22

the Registration Statement, the Prospectus as amended or supplemented or any
amendment or supplement thereto.

(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, its officers and directors, each other
Underwriter, and each person who controls any thereof within the meaning of
Section 15 of the Act, against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them become subject
under the Act or any other statute or common law and to reimburse each of them
for any legal or other expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them in connection with investigating any
such losses, claims, damages or liabilities or in connection with defending any
actions, insofar as such losses, claims, damages, liabilities, expenses or
actions arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented or any amendment or supplement thereto
(if any amendments or supplements thereto shall have been furnished) or (ii)
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
if such statement or omission was made in reliance upon information furnished
herein or in writing to the Company by or on behalf of such Underwriter,
through the Representatives, expressly for use in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented or any amendment or supplement thereto.
The indemnity agreement of the respective Underwriters contained in this
paragraph shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of the Company, or any such other
Underwriter or any such controlling person, and shall survive the delivery of
the Stock. The Company agrees promptly to notify the Representatives of the
commencement of any litigation or proceedings against the Company or any of its
officers or directors or against any such controlling person in connection with
the sale of the Stock or with any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented or any amendment or supplement thereto.

party or parties of any such action shall not relieve such indemnifying party
or parties from any liability which it or they may have to the indemnified
party (i) to the extent the indemnifying party was not materially prejudiced by
such omission or (ii) otherwise than on account of such indemnity agreement.
In case such notice of any such action shall be so given such indemnifying
party shall be entitled to participate at its own expense in the defense or, if
it so elects, to assume (in conjunction with any other indemnifying parties)
the defense of such action, in which event such defense shall be conducted by
counsel chosen by such indemnifying party (or parties) and satisfactory to the
indemnified party or parties who shall be defendant or defendants in such
action; provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section 10 for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation unless (i) the indemnified party shall have employed such counsel
in connection with the assumption of legal defenses in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a)
of this Section 10, representing the indemnified parties under paragraph (a) or
(b) of this Section 10, as the case may be, who are parties to such action),
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense
of the indemnifying party.

hand and the Underwriters on the other from the offering of the Stock or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other with respect to such offering shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Stock (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by the
Underwriters with respect to such offering, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 10 were to be determined by pro rata allocation or by
any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 10 shall be deemed
to include, for purposes of this Section 10, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 10, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Stock underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise paid or becomes liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this paragraph (d) are several in
proportion to their respective underwriting obligations and not joint.

Section 7(b) hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or
on behalf of any indemnified party.

11. Termination. This Agreement may be terminated at any time prior
to each Delivery Date by the Representatives with the consent of a majority in
interest of the Underwriters including yourselves upon notice thereof to the
Company, if prior to such time (a) the Company has failed, refused or been
unable to perform any agreement on its part to be performed hereunder, (b) any
other condition of the Underwriters' obligations hereunder is not fulfilled,
(c) there shall have occurred any general suspension of trading in securities
on the New York Stock Exchange or the American Stock Exchange or there shall
have been established by the New York Stock Exchange or the American Stock
Exchange or by the Commission or by any federal or state agency or by the
decision of any court any limitation on prices for such trading or any
restrictions on the distribution of securities, (d) a banking moratorium shall
have been declared either by federal or New York State authorities, (e) an
outbreak or escalation of hostilities involving the United States shall have
occurred or there shall have been a declaration by the United States of a
national emergency or war or (f) there shall have occurred such a material
adverse change in general economic, political or financial conditions, or the
effect of international conditions on the financial markets in the United
States is such, as to make it impracticable or inadvisable, in the judgment of
a majority in interest of the Underwriters, to proceed with the delivery of the
Stock. Any termination hereof pursuant to this Section 11 shall be without
liability of any party to any other party except as otherwise provided in
Section 7 hereof.

purchaser, as such purchaser, of any of the Stock from any of the Underwriters.

14. Notices. All communications hereunder shall be in writing or by
telegram or telecopy and, if to the Underwriters, shall be mailed or delivered
to the Representatives c/o Lehman Brothers Inc., 3 World Financial Center, New
York, New York 10285-1100, Attention: Syndicate Department (Fax:
212-528-8822); if to the Company, shall be mailed or delivered to it at 175
East Old Country Road, Hicksville, New York 11801, Attention: Treasurer.

Please sign and return to us _____ counterparts of this letter,
whereupon this letter will become a binding agreement between the Company and
the Underwriters in accordance with its terms.

Very truly yours,

LONG ISLAND LIGHTING COMPANY

By:
------------------------

The foregoing agreement is
hereby confirmed and
accepted, as of the
date first above written.

LEHMAN BROTHERS INC.
[Names of other Representatives]
As Representatives of the several Underwriters

By: LEHMAN BROTHERS INC.

By:
------------------------------
<PAGE> 27
27

SCHEDULE I

Purchase Price and Description of Stock

Aggregate Number of Firm Shares: _______

Aggregate Number of Option Shares: _______

Initial Per Share Public Offering Price: $___ per share

Per Share Purchase Price
to the Underwriters: $______ per share

Allowance to Certain Securities Dealers: __c.

Allowance to Brokers and Dealers: __c.

Additional Terms:
<PAGE> 28
28

SCHEDULE II

<TABLE>
<CAPTION>
Number of
Underwriter Firm Shares
----------- -----------
<S> <C>
Lehman Brothers Inc. . . . . . . . . . .
[Names of other Representatives] . . . .
-----------

Total ===========
</TABLE>

<PAGE> 1
Exhibit 1(d)

_________ Shares

LONG ISLAND LIGHTING COMPANY

Preferred Stock, ____%, Series __
(Cumulative, Par Value $__ Per Share)

UNDERWRITING AGREEMENT

____________, 199_

Lehman Brothers Inc.
[Names of other Representatives]
As Representatives of the several
Underwriters
c/o Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285-1100

Dear Sirs:

The undersigned, Long Island Lighting Company (the "Company"), hereby
confirms its agreement with each of the several underwriters, hereinafter
named, as follows:

1. Underwriters and Representatives. The term "Underwriters" as
used herein shall be deemed to mean the several firms or corporations named in
Schedule II hereto and any underwriter substituted as provided in Section 6.
The term "Representatives" as used herein shall be deemed to mean Lehman
Brothers Inc., [Names of other Representatives], who represent that they have
been authorized by the Underwriters to execute this Agreement on their behalf
and to act for them in the manner herein provided. All obligations of the
Underwriters hereunder are several and not joint. Any action under or in
respect of this Agreement taken by the Representatives will be binding upon all
the Underwriters.

2. Description of Preferred Stock. The Company proposes to issue
and sell to the Underwriters certain shares of its Preferred Stock (the
"Stock"). Schedule I hereto specifies the title of the Stock, the dividend
rate of the Stock, the aggregate number of shares of the Stock, the initial per
share public offering price of the Stock, the per share purchase price to the
Underwriters, any concession from the initial public offering price to be
allowed to dealers or to brokers and any additional terms of the Stock.
<PAGE> 2
2

3. Representations and Warranties of the Company. The Company
represents and warrants to each of the Underwriters, as of the date hereof and
as of the Closing Date (as hereinafter defined), that:

(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
33-_____) under the Securities Act of 1933, as amended (the "Act"), for
the registration of the Stock under the Act. The various parts of such
registration statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained therein at the time
such part of such registration statement became effective, each as
amended at the time such part of the registration statement became
effective, are hereinafter called the "Registration Statement"; any
reference to any amendment to the Registration Statement shall be deemed
to refer to and include any document filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration
Statement). The Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to the Registration Statement, to
the Representatives for each of the other Underwriters, if any, have been
declared effective by the Commission in such form. No other document
with respect to the Registration Statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing
with the Commission, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in the Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the prospectus relating to the Stock, in the form in which
it has most recently been filed with the Commission on or prior to the
date of this Agreement, is hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to the applicable form under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any documents
filed after the date of such Preliminary Prospectus or Prospectus, as the
case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or
<PAGE> 3
3

supplemented in relation to the Stock in the form in which it is filed
with the Commission pursuant to Rule 424(b) under the Act, including any
documents incorporated by reference therein as of the date of such
filing). The Company will not file any amendment to the Registration
Statement or any amendment or supplement to any Preliminary Prospectus or
Prospectus, or file any document under the Exchange Act before the
termination of the offering of the Stock by the Underwriters if such
document would be deemed to be incorporated by reference into such
Preliminary Prospectus or Prospectus, of which the Representatives shall
not previously have been advised and provided with a copy or to which the
Representatives shall reasonably object in writing or which shall be
disapproved by Messrs. Milbank, Tweed, Hadley & McCloy, who are acting as
counsel on behalf of the Underwriters.

(b) The Registration Statement and the Prospectus and any amendment
or supplement thereto as of their respective effective or issue dates,
and as of the closing date, (1) contained or will contain, as applicable,
all statements of material fact required to be stated therein in
accordance with the Act and the Rules and Regulations (as defined below);
(2) conformed or will conform, as applicable, in all material respects to
the requirements of the Act and the Rules and Regulations; and (3) do not
and will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, except that the foregoing
does not apply to statements or omissions in such documents based upon
written information furnished to the Company by any Underwriter
specifically for use therein. Any reference to "Rules and Regulations"
shall mean the rules, regulations and releases adopted by the Commission
under either the Act or the Exchange Act, as applicable.

(c) The financial statements and schedules (including the related
notes and supporting schedules) included or incorporated by reference in
the Registration Statement or Prospectus as amended or supplemented
present fairly the financial condition and operations of the Company at
the respective dates or for the respective periods to which they apply
except as otherwise indicated in the Registration
<PAGE> 4
4

Statement or Prospectus as amended or supplemented; such financial
statements have been prepared in each case in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved except as otherwise indicated in the Registration
Statement and Prospectus as amended and supplemented. Ernst & Young, who
have examined the audited financial statements and schedules (including
the related notes and supporting schedules) included or incorporated by
reference in the Registration Statement or Prospectus as amended or
supplemented and whose report appears or is incorporated by reference in
the Prospectus as amended or supplemented, are independent public
accountants as required by the Act and the Rules and Regulations.

(d) Except as reflected in, or contemplated by, the Registration
Statement and the Prospectus as amended or supplemented, since the
respective most recent dates as of which information is given in the
Registration Statement and the Prospectus as amended or supplemented,
there has not been any material adverse change in the business,
properties or financial condition or results of operation of the Company,
and since such dates there has not been any material transaction entered
into by the Company other than transactions contemplated by the
Registration Statement and Prospectus as amended or supplemented and
transactions in the ordinary course of business. The Company has no
material contingent obligation which is not disclosed in the Registration
Statement and Prospectus as amended or supplemented.

(f) The issuance and sale of the Stock, the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof
will not result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is now a party, or the
Charter.

(g) [The aggregate amount of annual dividends payable on shares of
the Stock to be issued and the aggregate amount payable on such shares in
the case of voluntary dissolution shall not exceed said respective
amounts payable on shares of the preferred stock of the Company which are
to be purchased, redeemed or otherwise acquired with the proceeds of the
Stock.] [The net earnings of the Company available for the payment of
interest charges on the Company's interest bearing indebtedness,
determined after provision for depreciation and all taxes, and in
accordance with sound
<PAGE> 5
5

accounting practice, was at least one and one-half times the aggregate of
the annual interest charges on the interest bearing indebtedness of the
Company and annual dividend requirements on all shares of, or ranking on
a parity with, Preferred Stock to be outstanding immediately after the
proposed issue of the Stock, for twelve consecutive calendar months
within the fifteen calendar months immediately preceding the month within
which the Stock shall be issued.]

(h) The documents which are incorporated by reference in the
Prospectus as amended or supplemented or from which information is so
incorporated by reference, when they became effective or were filed with
the Commission, as the case may be, complied in all material respects
with the requirements of the Act or the Exchange Act, as applicable, and
the Rules and Regulations, and any documents so filed and incorporated by
reference subsequent to the effective date of the Registration Statement
shall, when they are filed with the Commission, conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the Rules and Regulations.

(i) The conditions for use of Form S-3, set forth in the General
Instructions thereto, have been satisfied.

4. Purchase and Sale. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each of the Underwriters, and
each such Underwriter agrees, severally and not jointly, to purchase from the
Company, at the purchase price set forth in Schedule I hereto, the number of
shares of Stock set forth opposite the name of such Underwriter in Schedule II
hereto.

5. Reoffering by Underwriters. Subject to the terms and conditions
of this Agreement, it is understood that the Underwriters propose to make a
bona fide public offering of the Stock as soon as practicable after the
execution of this Agreement.

6. Time and Place of Closing. Delivery of the certificates
representing the Stock (the "Certificates") and payment therefor shall be made
at the offices of Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New
York, New York at _____ A.M., New York Time, on _______, 199_, or such other
place, time and date as the Representatives and the Company may agree upon.
The hour and date of such delivery and payment are herein called the "Closing
Date". Payment for the Stock shall be by certified or official bank check
payable to the order of the Company in New York Clearing House (next day)
funds. The Certificates shall be delivered to the Representatives for the
respective accounts of the Underwriters registered in such names and in such
authorized denominations as the Representatives may
<PAGE> 6
6

reasonably request in writing not later than 12:30 P.M., New York Time, on the
third business day prior to the Closing Date, or, to the extent not so
requested, registered in the names of the respective Underwriters in such
authorized denominations as the Company shall determine. For the purpose of
expediting the checking of the Certificates by the Representatives on behalf of
the Underwriters, the Company agrees to make the Certificates available to the
Representatives for such purposes at the office of The Bank of New York not
later than 2 P.M., New York Time, on the business day preceding the Closing
Date, or at such other time and place as may be agreed upon by the Company and
the Representatives.

If any Underwriter or Underwriters default in its or their
obligations to purchase the Stock which it or they have agreed to purchase
hereunder and the aggregate number of shares of Stock which such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent or
less of the aggregate number of shares of Stock set forth in Schedule II
hereto, the other Underwriters shall be obligated severally, in proportion to
their respective commitments to purchase Stock hereunder, to purchase the Stock
which such defaulting Underwriter or Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
number of shares of Stock with respect to which such default or defaults occur
is more than ten percent of the aggregate number of shares of Stock set forth
in Schedule II hereto and arrangements satisfactory to you and the Company for
the purchase of such Stock by other persons are not made within thirty-six
hours after such default, the Company may, at its option, either (a) terminate
this Agreement without liability on the part of any non-defaulting Underwriter
or the Company, except for expenses to be paid or reimbursed by the Company
pursuant to Section 7, or (b) require each non-defaulting Underwriter to
purchase the aggregate number of shares of Stock which such Underwriter
otherwise agreed to purchase plus an amount equal to one-ninth thereof. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section.

The respective commitments of the several Underwriters for purposes
of this paragraph shall be determined without regard to reduction in the
respective Underwriters' obligations to purchase the number of shares of Stock
set forth opposite their names in Schedule II hereto. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
<PAGE> 7
7

7. Covenants of the Company. The Company agrees that:

(a) The Company will prepare the Prospectus as amended or
supplemented in a form approved by the Representatives and will file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 424(b). The Company will at or prior to
the Closing Date deliver to each of the Representatives and to counsel
for the Underwriters one signed copy of the Registration Statement as
originally filed and of all amendments or supplements thereto (including
conformed copies of any document filed under the Exchange Act and deemed
to be incorporated by reference into the Prospectus as amended or
supplemented), heretofore or hereafter made, including any post-effective
amendment (in each case including all exhibits filed therewith, except
exhibits incorporated by reference unless specifically requested),
including a signed copy of each consent and certificate included therein
or filed as an exhibit thereto. As soon as the Company is advised
thereof, it will advise the Representatives orally (i) when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
with the Commission and (ii) of the issuance of any stop order under the
Act with respect to the Registration Statement or any suspension of the
qualification of the Stock in any jurisdiction, or the institution of any
proceedings therefor of which the Company shall have received notice, and
will use its best efforts to prevent the issuance of any such stop order
or suspension and to secure the prompt removal thereof if issued. The
Company will deliver to the Underwriters, in accordance with the
Representatives' instructions, as many copies of the Prospectus as
amended or supplemented as the Representatives may reasonably request for
the purposes contemplated by the Act, and will deliver to the
Representatives as soon as practicable sufficient conformed copies of the
Registration Statement (including conformed copies of any document filed
under the Exchange Act and deemed to be incorporated by reference into
the Prospectus as amended or supplemented) and of all amendments thereto
(in each case without exhibits) for distribution of one to each
Underwriter.

(b) The Company will pay all expenses incident to the performance
of its obligations under this Agreement and will reimburse the
Underwriters for any expenses up to $9,000 (including fees and
disbursements of counsel) incurred by them in connection with
qualification of the Stock for sale and the preparation of memoranda as
to Blue Sky qualifications and exemptions and as to eligibility of the
Stock for investment under the laws of such jurisdictions as
<PAGE> 8
8

(c) If at any time when a prospectus relating to the Stock is
required to be delivered under the Act, any event relating to or
affecting the Company, or of which the Company shall be advised in
writing by the Representatives, shall occur, which in the opinion of the
Company should be set forth in a supplement to or an amendment of the
Prospectus in order to make the Prospectus as amended or supplemented not
misleading in the light of the circumstances when it is delivered, or
which, in your opinion, may be necessary in connection with the
distribution of the Stock, the Company will forthwith at its expense
prepare and furnish to the Representatives a reasonable number of copies
of a supplement or supplements or an amendment or amendments to the
Prospectus as amended or supplemented which will supplement or amend the
Prospectus as amended or supplemented or file such documents so that the
Prospectus as amended or supplemented will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances when the Prospectus as amended or supplemented is
delivered, not misleading. The Company will continue to prepare and file
with the Commission in a timely manner all documents required to be filed
pursuant to the requirements of the Exchange Act and the Rules and
Regulations.

(d) The Company will make generally available to its security
holders (and shall deliver to the Representatives), as soon as
practicable but in any event not later than 45 days after the end of its
fiscal quarter in which the first anniversary date of the effective date
of the Registration Statement (as such term is defined in Rule 158 under
the Act) (the "Effective Date") occurs, an earnings statement (which need
not be audited, unless required so to be under Section 11(a) of the Act)
of the Company in reasonable detail covering a period of at least twelve
consecutive months beginning after the Effective Date.

(e) The Company will use its best efforts promptly to do and
perform all things to be done and performed by it
<PAGE> 9
9

hereunder prior to the Closing Date and to satisfy all conditions
precedent to the delivery by it of the Stock.

(f) The Company will use its best efforts to qualify the Stock for
offer and sale under the Blue Sky laws of such states as the
Representatives may designate and will file such statements or reports as
are or may be reasonably required by the laws of such states; provided,
however, that the Company in complying with this paragraph need not
qualify to do business in any state nor execute a general consent to
service of process.

(g) The Company will apply the proceeds of the sale of the Stock
for the purposes set forth in the Prospectus as amended or supplemented.

8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase and pay for the Stock shall be
subject to the accuracy of, and compliance with, the representations and
warranties of the Company contained herein, to the performance by the Company
of its obligations to be performed hereunder prior to the Closing Date, and to
the following further conditions:

(a) The Prospectus as amended or supplemented in relation to the
Stock shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed for such filing by the Rules
and Regulations; and no stop order suspending the effectiveness of the
Registration Statement shall be in effect on the Closing Date and no
proceedings for that purpose shall be pending before, or threatened by,
the Commission on the Closing Date. The Representatives shall have
received, prior to payment for the Stock, a certificate dated the Closing
Date and signed by the President, any Vice President or the Treasurer of
the Company to the effect that no such stop order is in effect and that
no proceedings for such purpose are pending before, or to the knowledge
of the Company threatened by, the Commission.

(b) On the Closing Date there shall be in full force and effect an
order of the Public Service Commission of the State of New York
authorizing the issuance and sale of the Stock which shall not contain
any provision mutually unacceptable to the Representatives and the
Company by reason of being materially adverse, it being understood that
no order in effect at the date of this Agreement contains any such
unacceptable provision.

opinion shall be satisfactory in form and substance to Messrs. Milbank,
Tweed, Hadley & McCloy, counsel for the Underwriters, to the effect
that --

(i) The Company is a corporation duly organized and validly
existing, in good standing under the laws of the State of New York,
with power and authority (corporate and other) to own its property,
to carry on its business and to issue the Stock;

(ii) The Agreement has been duly authorized, executed and
delivered by the Company;

(iii) The Stock has been duly authorized and issued, is fully
paid and nonassessable and conforms to the description thereof
contained in the Registration Statement and the Prospectus as
amended or supplemented;

(iv) An order has been adopted by the Public Service Commission
of the State of New York authorizing the issuance and sale of the
Stock and the transactions related thereto as contemplated by the
Agreement and said order is still in full force and effect; and no
further approval, authorization, consent or other order of any
public board or body is legally required for the authorization of
the issuance and sale by the Company of the Stock under the terms of
this Agreement except compliance with the provisions of securities
or Blue Sky laws of certain states in connection with the sale of
the Stock to the public in such states;

(v) The execution, delivery and performance of this Agreement
and the Stock by the Company and the consummation by the Company of
the transactions contemplated hereby will not conflict with or
result in a breach or violation by the Company of any of the terms
or provisions of, constitute a default by the Company under, or
result in the creation or imposition of any lien, charge, security
interest or encumbrance upon any of the assets of the Company
pursuant to the terms of, (A) any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument known
to such counsel to which the Company is a party or to which it or
any of its properties is subject, (B) the Restated and Amended
Certificate of Incorporation or By-laws of the Company or (C) any
statute, rule or regulation or, to the best of such counsel's
knowledge, any judgment, decree or order of any court or
governmental agency or body applicable to the Company or any of its
properties;
<PAGE> 11
11

(vi) The Company, to the best of such counsel's knowledge,
possesses all franchises, licenses, permits, consents and orders of
governmental and regulatory authorities and political subdivisions
required for the maintenance and operation of its properties and
business substantially as now conducted and as described in the
Registration Statement and the Prospectus as amended or
supplemented; or, if the Company does not possess all of such
franchises, licenses, permits, consents and orders, the absence of
such thereof as the Company does not possess will not, to the best
of such counsel's knowledge, affect the maintenance and operation of
such properties and business as a whole substantially as now
conducted; and

(vii) The Registration Statement has become effective under the
Act and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
are pending or contemplated under the Act, the Registration
Statement and the Prospectus, and each amendment or supplement
thereto (including any document incorporated by reference into the
Prospectus as amended or supplemented), as of their respective
effective or issue dates, complied as to form in all material
respects with the requirements of the Act and the Exchange Act and
the Rules and Regulations; the conditions for use of Form S-3, set
forth in the General Instructions thereto, have been satisfied; such
counsel has no reason to believe that either the Registration
Statement or the Prospectus, or any such amendment or supplement
(including any document filed under the Exchange Act and deemed to
be incorporated by reference into the Prospectus as amended or
supplemented), considered as a whole on the effective date of the
Registration Statement and on the date hereof contained or contain
any untrue statement of material fact or omitted or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading; the descriptions in the
Registration Statement and the Prospectus as amended or supplemented
of statutes, legal and governmental proceedings and contracts and
other documents are accurate and fairly present the information
required to be shown; and such counsel does not know of any legal or
governmental proceedings required to be described in the Prospectus
as amended or supplemented (or required to be filed under the
Exchange Act if upon such filing they would be incorporated, in
whole or in part, by reference in the Prospectus as amended or
supplemented) which are not described as required, nor of any
contracts or
<PAGE> 12
12

documents of a character required to be described in the
Registration Statement or Prospectus as amended or supplemented or
to be filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such
counsel need express no opinion as to the financial statements or
other financial data contained or incorporated by reference in the
Registration Statement or the Prospectus as amended or supplemented.

(d) At the Closing Date, the Representatives shall receive from
Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters,
such opinion or opinions with respect to the valid existence of the
Company, the validity of the Stock, the Registration Statement, the
Prospectus as amended or supplemented, and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.

(ii) they have read the minutes of the meetings of the
stockholders and the Board of Directors of the Company, as set forth
in the minute books or, if not set forth therein, in the form
prepared by the Secretary of the Company, through a specified date
not more than five business days prior to the date of the closing,
read the unaudited financial statements, if any, incorporated by
reference into the Registration Statement and Prospectus as amended
or supplemented and also the latest available unaudited interim
financial statements of the Company and inquired of certain
officials of the Company responsible for financial and
<PAGE> 13
13

accounting matters, and that such officials have stated that:

(A) any unaudited Balance Sheet, Statement of Income and
Statement of Cash Flows included or incorporated by reference
in the Registration Statement and Prospectus as amended or
supplemented complies as to form in all material respects with
the applicable accounting requirements of the Act and the
Exchange Act and the published rules and regulations of the
Commission thereunder, and are in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the most recent audited financial
statements incorporated by reference therein,

(B) at the date of the latest available balance sheet read
by such accountants, there was no change in the capital stock
(including Common Stock, Preferred Stock and Premium on Capital
Stock but excluding Capital Stock Expense) or long-term debt of
the Company or any decrease in net current assets or Common
Shareowners' Equity as compared with amounts shown on the
latest balance sheet included or incorporated by reference in
the Registration Statement and Prospectus as amended or
supplemented, except in all instances (i) for changes or
decreases that the Registration Statement and Prospectus as
amended or supplemented discloses have occurred or may occur,
(ii) for payment of maturing installments of long-term debt,
(iii) for conversions of convertible preferred stock, (iv) for
shares of common stock issued pursuant to the Company's
Employee Stock Purchase Plan, (v) for amounts withheld from
employees in connection with the Employee Stock Purchase Plan,
(vi) for the acquisition of long-term debt for sinking fund
purposes, (vii) for shares of preferred stock redeemed by way
of sinking funds, or (viii) for changes or decreases which are
described in such letter, identifying the same and specifying
the amount thereof, or

decreases which the Registration Statement and Prospectus as
amended or supplemented discloses have occurred or may occur,
or which are described in such letter, identifying the same and
specifying the amount thereof;

(iii) they have performed more limited procedures than those
set forth in the foregoing clause (ii), consisting merely of the
reading of the minutes referred to in said clause and inquired of
certain officials of the Company responsible for financial and
accounting matters, and that such officials have stated that, with
respect to the period from the date of the latest available
financial statements of the Company to a specified date not more
than five business days prior to the date of such letter, there was
no change in the capital stock (including Common Stock, Preferred
Stock and Premium on Capital Stock but excluding Capital Stock
Expense) or long-term debt of the Company or any decrease in net
current assets or Common Shareowners' Equity as compared with the
amounts shown in the latest balance sheet included or incorporated
by reference in the Registration Statement and Prospectus as amended
or supplemented, except in all instances (i) for changes or
decreases that the Registration Statement and Prospectus as amended
or supplemented discloses have occurred or may occur, (ii) for
payment of maturing installments of long-term debt, (iii) for
conversions of convertible preferred stock, (iv) for shares of
common stock issued pursuant to the Company's Employee Stock
Purchase Plan, (v) for amounts withheld from employees in connection
with the Employee Stock Purchase Plan, (vi) for the acquisition of
long-term debt for sinking fund purposes, (vii) for purchase of
preferred shares for series scheduled to be redeemed by way of
sinking funds, or (viii) for changes or decreases which are
described in such letter, identifying the same and specifying the
amount thereof; and

(iv) they have compared certain dollar amounts (and
percentages and other financial data derived from such dollar
amounts) disclosed in, or incorporated by reference into, the
Registration Statement and Prospectus as amended or supplemented or
in Exhibits to the Registration Statement, with such dollar amounts,
percentages and other financial information contained in the general
accounting records of the Company or derived directly from such
records by analysis or computation, and have found such dollar
amounts, percentages and other financial information to be in
agreement therewith, except as otherwise specified in such letter.
<PAGE> 15
15

(f) Since the respective most recent dates as of which information
is given in the Registration Statement and Prospectus as amended or
supplemented and up to the Closing Date, there shall have been no
material adverse change in the business, properties or financial
condition or results of operation of the Company, except as reflected in
or contemplated by the Registration Statement and the Prospectus, and any
amendments or supplements thereto (including any documents filed under
the Exchange Act and deemed to be incorporated by reference into the
Prospectus as amended or supplemented), and since such dates and up to
the Closing Date there shall have been no material transaction entered
into by the Company other than transactions disclosed by the Registration
Statement and the Prospectus, and any amendments or supplements thereto
(including any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus as amended or
supplemented), and transactions in the ordinary course of business; and
at the Closing Date the Representatives shall have received a certificate
to such effect, signed by the President, any Vice President or the
Treasurer of the Company.

(g) All legal proceedings to be taken in connection with the
issuance and sale of the Stock shall have been satisfactory in form and
substance to Messrs. Milbank, Tweed, Hadley & McCloy.

9. Conditions of the Obligation of the Company. The obligation of
the Company to deliver the Stock shall be subject to the conditions set forth
in the second clause of the first sentence of paragraph (a) of Section 8 hereof
and in paragraph (b) of Section 8 hereof. In case any of the conditions
specified in this Section 9 shall not have been fulfilled, this Agreement may
be terminated by the Company by mailing or delivering written notice thereof to
the Representatives. Any such termination shall be without liability of any
party to any other party except as otherwise provided in Section 7 hereof.

person for any legal or other expense (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by them in connection with
investigating any such losses, claims, damages or liabilities or in connection
with preparing to defend or defending any actions, insofar as such losses,
claims, damages, liabilities, expenses or actions arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented or any
amendment or supplement thereto (if any amendments or supplements thereto shall
have been furnished) or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that the indemnity agreement
contained in this paragraph shall not apply to any such losses, claims,
damages, liabilities, expenses or actions arising out of or based upon any such
untrue statement or alleged untrue statement or any such omission or alleged
omission, if such statement or omission was made in reliance upon information
furnished herein or in writing to the Company by or on behalf of any
Underwriter, through the Representatives, expressly for use in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented or any amendment or supplement
thereto; and PROVIDED, FURTHER, that the Company shall not be liable in any
case relating to any Preliminary Prospectus or any preliminary prospectus
supplement to the extent that any such loss, claim, damage, liability, expense
or action arises out of or is based upon the failure of any Underwriter in
connection with a sale of any of the Stock to any person to send or give a copy
of the Prospectus, as the same may then be supplemented or amended, to such
person with or prior to the written confirmation of the sale involved so long
as the Company shall have fully complied with the last sentence of Section 7(a)
hereof. The indemnity agreement of the Company contained in this paragraph and
the representations and warranties of the Company contained in Section 3 hereof
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or any such controlling
person, and shall survive the delivery of the Stock. The Underwriters agree
promptly to notify the Company of the commencement of any litigation or
proceedings against them or any of them, or any such controlling person, in
connection with the sale of the Stock or with any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented or any amendment or supplement thereto.

or common law and to reimburse each of them for any legal or other expenses
(including, to the extent hereinafter provided, reasonable counsel fees)
incurred by them in connection with investigating any such losses, claims,
damages or liabilities or in connection with defending any actions, insofar as
such losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented or any amendment or supplement thereto (if any amendments or
supplements thereto shall have been furnished) or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such statement or
omission was made in reliance upon information furnished herein or in writing
to the Company by or on behalf of such Underwriter, through the
Representatives, expressly for use in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented or any amendment or supplement thereto. The
indemnity agreement of the respective Underwriters contained in this paragraph
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Company, or any such other
Underwriter or any such controlling person, and shall survive the delivery of
the Stock. The Company agrees promptly to notify the Representatives of the
commencement of any litigation or proceedings against the Company or any of its
officers or directors or against any such controlling person in connection with
the sale of the Stock or with any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented or any amendment or supplement thereto.

indemnified party or parties who shall be defendant or defendants in such
action; provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section 10 for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation unless (i) the indemnified party shall have employed such counsel
in connection with the assumption of legal defenses in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a)
of this Section 10, representing the indemnified parties under paragraph (a) or
(b) of this Section 10, as the case may be, who are parties to such action),
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense
of the indemnifying party.

the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters with respect to such
offering, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 10 were to
be determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above in
this Section 10 shall be deemed to include, for purposes of this Section 10,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Stock underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise paid or becomes liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this paragraph (d) are several in proportion to their respective
underwriting obligations and not joint.

(e) The agreements contained in this Section 10, the
representations and warranties of the Company in Section 3 hereof and the
agreements of the Company in Section 7 hereof shall survive the delivery of the
Stock. The agreements contained in this Section 10, the representations and
warranties of the Company in Section 3 hereof and the agreements of the Company
in Section 7(b) hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or
on behalf of any indemnified party.

to perform any agreement on its part to be performed hereunder, (b) any other
condition of the Underwriters' obligations hereunder is not fulfilled, (c)
there shall have occurred any general suspension of trading in securities on
the New York Stock Exchange or the American Stock Exchange or there shall have
been established by the New York Stock Exchange or the American Stock Exchange
or by the Commission or by any federal or state agency or by the decision of
any court any limitation on prices for such trading or any restrictions on the
distribution of securities, (d) a banking moratorium shall have been declared
either by federal or New York State authorities, (e) an outbreak or escalation
of hostilities involving the United States shall have occurred or there shall
have been a declaration by the United States of a national emergency or war or
(f) there shall have occurred such a material adverse change in general
economic, political or financial conditions, or the effect of international
conditions on the financial markets in the United States is such, as to make it
impracticable or inadvisable, in the judgment of a majority in interest of the
Underwriters, to proceed with the delivery of the Stock. Any termination
hereof pursuant to this Section 11 shall be without liability of any party to
any other party except as otherwise provided in Section 7 hereof.

12. Information Furnished by Underwriters. The statements set
forth in the last paragraph on the cover page, the paragraph containing
stabilization information on the inside front cover page and the statements
under the caption "Underwriting" in any Prospectus as amended or supplemented
constitute the only written information furnished by or on behalf of any
Underwriter referred to in paragraph (b) of Section 3 hereof and in paragraphs
(a) and (b) of Section 10 hereof.

14. Notices. All communications hereunder shall be in writing or
by telegram and, if to the Underwriters, shall be mailed or delivered to the
Representatives c/o Lehman Brothers Inc., 3 World Financial Center, New York,
New York 10285-1100, attention: Syndicate Department; if to the Company, shall
be mailed or delivered to it at 175 East Old Country Road, Hicksville, New York
11801, attention: Treasurer.
<PAGE> 21
21

Please sign and return to us ______ counterparts of this letter,
whereupon this letter will become a binding agreement between the Company and
the Underwriters in accordance with its terms.

Very truly yours,

LONG ISLAND LIGHTING COMPANY

By:
------------------------

The foregoing agreement is
hereby confirmed and
accepted, as of the
date first above written.

LEHMAN BROTHERS INC.
[Names of other Representatives]
As Representatives of the several Underwriters

By: LEHMAN BROTHERS INC.

By:
------------------------------
<PAGE> 22
22

SCHEDULE I

Title, Purchase Price and Description of Preferred Stock, ____%, Series __

Title: Preferred Stock, ____%, Series __ (Cumulative, Par Value $__ Per
Share)

Aggregate Number of Shares: _________

Initial Per Share Public Offering Price: $_____ per share

Per Share Purchase Price
to the Underwriters: $________ per share, plus accrued dividends, if
any, from the date of original issue to the date
of delivery

Allowance to Certain Securities Dealers: __c.

Allowance to Brokers and Dealers: __c.

Redemption: [The Stock will be redeemable at the option of the Company
at any time on not less than 30 days' notice at $_____ per
share on or before ____________; at $_______ per share
thereafter and on or before _____________; at $_____ per
share thereafter and on or before _____________; at $____
per share thereafter and on or before ____________; and at
$____ per share thereafter, plus, in each case, accrued
dividends to the date of redemption.

The Stock will be fully redeemed on or before __________.]

[The Stock will not be redeemable.]
<PAGE> 23
23

SCHEDULE II

<TABLE>
<CAPTION>
Underwriter Number of Shares
- ----------- ----------------
<S> <C>
Lehman Brothers Inc. . . . . . . . . . . . . .
[Names of other Representatives] . . . . . . .
-----------

Total ===========
</TABLE>

<PAGE> 1

Filed in the Office of the Secretary of State on , 199

CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

LONG ISLAND LIGHTING COMPANY

UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW

We, and , [Vice] President and [Assistant]
Secretary, respectively, of LONG ISLAND LIGHTING COMPANY, a New York
corporation, DO HEREBY CERTIFY that:

FIRST. The name of the Corporation is LONG ISLAND LIGHTING COMPANY,
under which name it was formed.

SECOND. The Certificate of Incorporation was filed in the Office of
the Secretary of State on December 31, 1910.

THIRD. The Certificate of Incorporation, as amended and supplemented
by any certificate filed pursuant to law, is hereby further amended by the
addition of provisions stating the number, designation, relative rights,
preferences and limitations of the shares of a series (to consist of
shares) of the Preferred Stock of the par value of $ per share of the
Corporation, as fixed by the Board of Directors of the Corporation before
issuance of such series as follows:

"( ) SERIES PREFERRED STOCK

(1) NUMBER AND DESIGNATION OF SERIES. A series consisting
initially of shares of the Preferred Stock of the par value of $
per share is designated `Preferred Stock, $ , Series '
(hereinafter called the `Series Preferred Stock').

(2) DIVIDEND RATE. The dividend rate per annum of the shares
of Series Preferred Stock is $ per share. Dividends shall be
calculated on the basis of a 30-day month and a year of 360 days.

(3) DIVIDEND PAYMENT DATES. The dividend payment dates for
the shares of Series Preferred Stock are the days of , ,
and ; the initial dividend period for such shares shall
commence on the day when such shares are issued and thereafter the
dividend periods for such shares shall be the quarterly periods
beginning on such dates commencing , 199 .
<PAGE> 2
2

(4) OPTIONAL REDEMPTION. [The Series Preferred Stock will
not be subject to optional redemption.] [Subject to the restrictions
set forth in section (6) of this subdivision ( ), at the option of
the Board of Directors of the Corporation, the Corporation may redeem
the whole or any part of the Series Preferred Stock at any time
outstanding, at any time or from time to time, at the then applicable
optional redemption price (hereinafter called the "optional redemption
price"), plus accrued and unpaid dividends to the date of redemption.
The optional redemption price at which Series Preferred Stock shall
be redeemable is $ per share if redeemed on or before , 19
; $ per share if redeemed thereafter and on or before , 19
; $ per share if redeemed thereafter and on or before , 19
; $ per share if redeemed thereafter and on or before , 19
; and $ per share if redeemed thereafter. The applicable optional
redemption price at which the shares of Series Preferred Stock
shall be redeemable as specified in this section (4) shall be deemed
to be the "applicable redemption price" of Series Preferred Stock
payable to the holders thereof for the purposes of optional
redemptions, as specified in paragraph (d) of Subparagraph "2" of
Subdivision "A" of Section "III" of Paragraph "FIFTH" of the Restated
Certificate of Incorporation.]

(5) [MANDATORY REDEMPTION. [The Series Preferred Stock
will not be subject to mandatory redemption.] Subject to the
restrictions set forth in section (6) of this subdivision ( ), the
Corporation shall redeem on or before , , at such time or times as
the Corporation shall determine, all of the outstanding shares of
Series Preferred Stock at the redemption price or prices which
would be applicable at the date of redemption to optional redemptions
pursuant to section (4) of this subdivision ( ), plus accrued and
unpaid dividends to the date of redemption. In the case of a
redemption of Series Preferred Stock as specified in this section
(5), the Company shall take the action and provide the notice
specified in paragraph (d) of Subparagraph "2" of Subdivision "A" of
Section "III" of Paragraph "FIFTH" of the Restated Certificate of
Incorporation, with respect to optional redemption of Preferred
Stock.]

[SINKING FUND. [The Series Preferred Stock will not be
subject to a sinking fund]. As a sinking fund for the redemption of
Series Preferred Stock, subject to the provisions of section (6) of
this subdivision ( ), on , and on each thereafter, the
Corporation shall redeem shares of the Series Preferred
Stock (or the number of shares of the Series Preferred Stock then
outstanding if less than ), in each case at a price of $
per share, plus, in each case,
<PAGE> 3
3

accrued and unpaid dividends to the date of redemption.
Notwithstanding the provisions of section (6) of this subdivision ( ),
the foregoing obligation of the Corporation to redeem Series
Preferred Stock annually shall be cumulative. In addition, the
Corporation shall have the noncumulative option on or
any thereafter, to increase by up to the number
of shares of Series Preferred Stock otherwise required by this
section (5) of this subdivision ( ) to be redeemed on such
. At its option, the Corporation may credit against any sinking fund
redemption required by this section (5) of this subdivision ( ) any
shares of Series Preferred Stock redeemed pursuant to section (4) of
this subdivision ( ), redeemed pursuant to the next preceding sentence
or acquired pursuant to section (10) of this subdivision ( ) below.
All shares of Series Preferred Stock redeemed pursuant to section
(4) of this subdivision ( ) or this section (5) of this subdivision (
) and all shares of Series Preferred Stock credited against any
sinking fund redemption obligation pursuant to this Section (5) of
this subdivision ( ) shall be cancelled.]

[(6) RESTRICTIONS ON OPTIONAL [AND MANDATORY]
REDEMPTION [AND SINKING FUND REDEMPTION].
Unless full cumulative dividends for all past dividend periods and for
the then current dividend period shall have been paid or declared and
set apart for payment on the then outstanding Series Preferred
Stock other than shares of Series Preferred Stock previously or
then to be called for redemption, the Corporation shall not redeem
pursuant to section[s] (4) [or (5)] of this subdivision ( ) less than
all of the then outstanding shares of Series Preferred Stock.

The obligation of the Corporation to redeem shares as provided
in section [(5)] of this subdivision ( ) shall be subject to any
restrictions now existing in the Corporation's Indenture of Mortgage
and Deed of Trust dated as of September 1, 1951, as heretofore
supplemented (including any extension of said existing restrictions in
said Indenture of Mortgage and Deed of Trust for the benefit of any
series of Bonds hereafter issued thereunder) and to any applicable
restrictions of law.]

[(7)] RESTRICTIONS ON PAYMENTS ON JUNIOR STOCK. The
Corporation shall not declare or pay or set apart any dividend for the
Common Stock or any other class of stock ranking junior to the Series
Preferred Stock, or make any payment on account of, or set apart money
for a sinking or analogous fund for, the purchase, redemption or other
retirement of the Common Stock or any other class of stock ranking
junior to the Series Preferred Stock, or make any distribution in
respect thereof, either directly or indirectly, and whether in cash or
property or obligations or stock of the Corporation,
<PAGE> 4
4

unless at the date of declaration in the case of any such dividend, or
at the date of any such other payment, setting apart or distribution,
full cumulative dividends for all past dividend periods and for the
then current dividend period shall have been paid or declared and set
apart for payment on the then outstanding Series Preferred Stock,
other than shares of Series Preferred Stock previously or then to
be called for redemption.

[(8)] [Conversion Rights. The Series Preferred Stock will
not be convertible into shares of any other class or series of stock
of the Corporation.]

[(9)] RESTRICTIONS ON SINKING FUND PAYMENTS ON OTHER STOCK.
The Corporation shall not redeem or purchase any shares ranking on a
parity with the Series Preferred Stock as to assets or dividends,
pursuant to any sinking fund requirement (which terms shall include
any analogous requirement) for the redemption or purchase of such
shares, and shall not set apart money for any such requirement, at any
time when the redemption required by section [(5)] of this subdivision
( ) shall be in arrears; except that, at any time when the redemption
required by section [(5)] [(6)] of this subdivision ( ) shall be in
arrears and when arrears exist in respect of any sinking fund or
analogous requirement for any shares ranking as aforesaid on a parity
with the Series Preferred Stock, the Corporation may redeem or
purchase for the respective requirements shares of Series
Preferred Stock and such other shares, pro rata, as nearly as
practicable, according to the amounts in dollars of the arrears in the
redemptions or purchases required for the respective requirements.

[(10)] ACQUISITION OF SERIES PREFERRED STOCK. Except as
hereinbefore provided, the Corporation may, at its option, purchase,
redeem or otherwise acquire any shares of Series Preferred Stock.

[(11)] REDEMPTION UPON VOLUNTARY DISSOLUTION,
LIQUIDATION, OR WINDING UP OF THE CORPORATION. The applicable
redemption price payable upon any voluntary dissolution,
liquidation, or winding up of the Corporation as specified in the
second paragraph of paragraph (c) of Subparagraph "2" of
Subdivision "A" of Section "III" of Paragraph "FIFTH" of the
Restated Certificate of Incorporation shall be the par value of the
Series Preferred Stock.

FOURTH. This amendment was authorized by the Board of
Directors of the Corporation at a meeting duly held.
<PAGE> 5
5

IN WITNESS WHEREOF, we have made and subscribed this Certificate and
affirm the same as true under the penalties of perjury this day of
199 .

---------------------
[Vice] President

---------------------
[Assistant] Secretary

<PAGE> 1
================================================================================

LONG ISLAND LIGHTING COMPANY

UNITED STATES TRUST COMPANY
OF NEW YORK,

SUCCESSOR TRUSTEE

---------

SUPPLEMENTAL INDENTURE

DATED AS OF 1,

---------

SUPPLEMENTAL

TO THE

GENERAL AND REFUNDING INDENTURE

DATED AS OF JUNE 1, 1975

---------

GENERAL AND REFUNDING BONDS

================================================================================
<PAGE> 2
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

SUPPLEMENTAL INDENTURE, dated as of 1, , betweenLONG ISLAND
LIGHTING COMPANY, a New York corporation (hereinafter called the "Company"),
having its principal office at 175 East Old Country Road in Hicksville, County
of Nassau, State of New York, and UNITED STATES TRUST COMPANY OF NEW YORK, a
national banking association (hereinafter called the "Trustee" or the
"Successor Trustee"), having its principal corporate trust office at 114 West
47th Street in the City, County and State of New York.

WHEREAS, the Company has executed and delivered to Manufacturers
Hanover Trust Company, as Trustee (hereinafter called the "Original Trustee"),
a General and Refunding Indenture dated as of June 1, 1975 (hereinafter called
the "Original General and Refunding Indenture"), securing the principal of and
the interest and premium (if any) on the Company's General and Refunding Bonds
(the "Bonds") at any time issued and Outstanding thereunder, to declare the
terms and conditions upon which Bonds are to be issued thereunder and to
subject to the Lien thereof certain property therein described;

WHEREAS, the Company has also executed and delivered to the Original
Trustee supplemental indentures dated as of the dates set forth below, creating
series of General and Refunding Bonds and, in each instance, subjecting to the
Lien of the Original General and Refunding Indenture certain property of the
Company, as follows:

<TABLE>
<S> <C>
DATED AS OF SERIES CREATED
----------- --------------
</TABLE>

<TABLE>
<S> <C> <C>
Original Indenture . . . . . . . . . . . . June 1, 1975
Supplemental Indentures:
First . . . . . . . . . . . . . . . . . . June 1, 1975 91/4 Due 1983
Second . . . . . . . . . . . . . . . . . Sept. 1, 1975 97/8% Due 1984
Third . . . . . . . . . . . . . . . . . . June 1, 1976 95/8% Due 2006
Fourth . . . . . . . . . . . . . . . . . Dec. 1, 1976 85/8% Due 2006
Fifth . . . . . . . . . . . . . . . . . . May 1, 1977 85/8% Due 2007
Sixth . . . . . . . . . . . . . . . . . . April 1, 1978 9.20% Due 2008
Seventh . . . . . . . . . . . . . . . . . March 1, 1979 9.75% Due 1999
Eighth . . . . . . . . . . . . . . . . . Feb. 1, 1980 141/4% Due 2010
Ninth . . . . . . . . . . . . . . . . . . March 1, 1981 153/4% Due 1991
Tenth . . . . . . . . . . . . . . . . . . July 1, 1981 173/8% Due 2011
Eleventh . . . . . . . . . . . . . . . . July 1, 1981 163/4% Due 1991
Twelfth . . . . . . . . . . . . . . . . . Dec. 1, 1981 18% Due 2011
</TABLE>
<PAGE> 3
2
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

<TABLE>
<CAPTION>
DATED AS OF SERIES CREATED
----------- --------------
<S> <C> <C>
Supplemental Indentures:
Thirteenth . . . . . . . . . . . . . . . Dec. 1, 1981 17% Due 1991
Fourteenth . . . . . . . . . . . . . . . June 1, 1982 17 1/8 Due 2012
Fifteenth . . . . . . . . . . . . . . . . Oct. 1, 1982 15 1/4% Due 2012
Sixteenth . . . . . . . . . . . . . . . . April 1, 1983 12 5/8% Due 1992
Seventeenth . . . . . . . . . . . . . . . May 1, 1983 13 1/2% Due 2013;

</TABLE>

WHEREAS, the Original General and Refunding Indenture and the
aforesaid Supplemental Indentures have been recorded as follows:

<TABLE>
<CAPTION>
IN THE OFFICE OF
IN THE NASSAU THE REGISTER OF
COUNTY CLERK'S THE CITY OF
OFFICE NEW YORK
-------------- (QUEENS COUNTY)
---------------

LIBER OF
MORTGAGES PAGE REEL PAGE
--------- ---- ---- ----
<S> <C> <C> <C> <C>
Original Indenture . . . . . . . . . . . 9517 1 840 761
Supplemental Indentures:
First . . . . . . . . . . . . . . . . . 9517 462 840 1224
Second . . . . . . . . . . . . . . . . 9570 407 862 546
Third . . . . . . . . . . . . . . . . . 9675 1 911 495
Fourth . . . . . . . . . . . . . . . . 9778 1 953 460
Fifth . . . . . . . . . . . . . . . . . 9814 493 985 707
Sixth . . . . . . . . . . . . . . . . . 9919 1 1063 1052
Seventh . . . . . . . . . . . . . . . . 10032 1 1143 1060
Eighth . . . . . . . . . . . . . . . . 10169 1 1239 1751
Ninth . . . . . . . . . . . . . . . . . 10285 1 1323 762
Tenth . . . . . . . . . . . . . . . . . 10322 1 1351 186
Eleventh . . . . . . . . . . . . . . . 10322 67 1351 254
Twelfth . . . . . . . . . . . . . . . . 10379 1 1392 1675
Thirteenth . . . . . . . . . . . . . . 10379 113 1392 1629
Fourteenth . . . . . . . . . . . . . . 10423 106 1432 1137
Fifteenth . . . . . . . . . . . . . . . 10471 407 1466 1713
Sixteenth . . . . . . . . . . . . . . . 10542 705 1518 884
Seventeeth . . . . . . . . . . . . . . 10571 1 1537 720
</TABLE>
<PAGE> 4
3
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

<TABLE>
<CAPTION>
IN THE SUFFOLK IN THE OFFICE OF
COUNTY CLERK'S THE REGISTRAR OF
OFFICE SUFFOLK COUNTY
-------------- ------------------

LIBER OF
MORTGAGES PAGE DOCUMENT NO.
--------- ---- ------------
<S> <C> <C> <C>
Original Indenture . . . . . . . . . 7358 1 231529
Supplemental Indentures:
First . . . . . . . . . . . . . . . 7358 461 231530
Second . . . . . . . . . . . . . . 7445 82 234029
Third . . . . . . . . . . . . . . . 7622 87 239417
Fourth . . . . . . . . . . . . . . 7773 55 244097
Fifth . . . . . . . . . . . . . . . 7882 500 247932
Sixth . . . . . . . . . . . . . . . 8149 58 256464
Seventh . . . . . . . . . . . . . . 8402 1 263861
Eighth . . . . . . . . . . . . . . 8688 530 271652
Ninth . . . . . . . . . . . . . . . 8950 66 278933
Tenth . . . . . . . . . . . . . . . 9034 465 281159
Eleventh . . . . . . . . . . . . . 9034 408 281158
Twelfth . . . . . . . . . . . . . . 9169 50 284685
Thirteenth . . . . . . . . . . . . 9169 122 284687
Fourteenth . . . . . . . . . . . . 9271 285 287512
Fifteenth . . . . . . . . . . . . . 9374 235 290221
Sixteenth . . . . . . . . . . . . . 9519 516 293587
Seventeenth . . . . . . . . . . . . 9578 231 294811;

</TABLE>

WHEREAS, the Company and Manufacturers Hanover Trust Company, as
Original Trustee, pursuant to Article Nine of the Uniform Commercial Code, have
executed a Financing Statement which was filed in the State of New York on June
19, 1975, in the Department of State of the State of New York as File No.
51,391 and a Continuation Statement executed by Manufacturers Hanover Trust
Company has been filed in the State of New York on May 23, 1980, in the
Department of State of the State of New York as File No. 73,661;

WHEREAS, the Original General and Refunding Indenture, as the same has
been or may be amended or supplemented from time to time by indentures
supplemental thereto, is hereinafter referred to as the "General and Refunding
Indenture;"

WHEREAS, an Instrument of Resignation, Appointment and Acceptance
dated as of April 19, 1984, pursuant to which Manufacturers Hanover Trust
Company resigned as Trustee, the Company appointed Sterling National Bank &
Trust Company of New York as Successor Trustee under the General and Refunding
Indenture and Sterling National Bank & Trust Company of New York accepted such
<PAGE> 5
4
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

appointment, has been executed by the Company, Manufacturers Hanover Trust
Company and Sterling National Bank & Trust Company of New York and recorded as
follows: In the Nassau County Clerk's office in Liber 9549 of Deeds, Page 523
on April 23, 1984; in the Office of the Register of The City of New York
(Queens County) on Reel 1671, Page 702 on April 24, 1984; in the Suffolk County
Clerk's Office in Liber 9550 of Deeds, Page 87 on April 24, 1984; and in the
Office of the Registrar of Suffolk County as Document No. 302443 on April 24,
1984;

WHEREAS, Sterling National Bank & Trust Company of New York, as
Successor Trustee, pursuant to Article Nine of the Uniform Commercial Code, has
executed an Assignment Statement which was filed in the State of New York on
April 27, 1984, in the Department of State of the State of New York as File No.
92,389;

WHEREAS, the Company has executed and delivered to Sterling National
Bank & Trust Company of New York supplemental indentures dated as of the dates
set forth below, creating series of General and Refunding Bonds and, in each
instance, subjecting to the lien of the Original General and Refunding
Indenture certain property of the Company, as follows:

<TABLE>
<CAPTION>
DATED AS OF SERIES CREATED
----------- --------------

Supplemental Indentures:
<S> <C> <C>
Eighteenth . . . . . . . . . . . . September 1, 1984 17 1/2% Due 1989
Nineteenth . . . . . . . . . . . . October 1, 1984 1/2% Due 1993
Twentieth . . . . . . . . . . . . . June 1, 1985 13 1/4% Due 1995
Twenty-first . . . . . . . . . . . April 1, 1986 11 1/4% Due 1996
11 7/8% Due 2015;
</TABLE>
<PAGE> 6
5
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

WHEREAS, the aforesaid Supplemental Indentures have been recorded as
follows:

<TABLE>
<CAPTION>
IN THE OFFICE OF
THE REGISTER OF
IN THE THE CITY OF
NASSAU COUNTY NEW YORK
CLERK'S OFFICE (QUEENS COUNTY)
-------------- ---------------

LIBER OF
MORTGAGES PAGE REEL PAGE
--------- ---- ---- ----
<S> <C> <C> <C> <C>
Supplemental Indentures:
Eighteenth . . . . . . . . . . . . . 10945 550 1742 623
Nineteenth . . . . . . . . . . . . . 10988 696 1772 1416
Twentieth . . . . . . . . . . . . . . 11159 1 1877 684
Twenty-first . . . . . . . . . . . . 11487 1 2072 1946
</TABLE>

<TABLE>
<CAPTION>
IN THE IN THE OFFICE OF
SUFFOLK COUNTY THE REGISTRAR OF
CLERK'S OFFICE SUFFOLK COUNTY
-------------- ----------------

LIBER OF
MORTGAGES PAGE DOCUMENT NO.
--------- ---- ------------

<S> <C> <C> <C>
Eighteenth . . . . . . . . . . . . . . 10356 301 306373
Nineteenth . . . . . . . . . . . . . . 10465 1 307995
Twentieth . . . . . . . . . . . . . . . 10849 81 313989
Twenty-first . . . . . . . . . . . . . 11550 95 323438

</TABLE>

<TABLE>
<CAPTION>
IN THE
OSWEGO COUNTY
CLERK'S OFFICE
--------------

BOOK OF
MORTGAGES PAGE
--------- ----
<S> <C> <C>
Twenty-first . . . . . . . . . . . . . 869 27;

</TABLE>

WHEREAS, Sterling National Bank & Trust Company of New York, as
Successor Trustee, pursuant to Article Nine of the Uniform Commercial Code, has
executed a Continuation Statement which was filed in the State of New York on
May 28, 1985, in the Department of State of the State of New York as File No.
123,587, and an Amendment thereto as File No. 123,588;

WHEREAS, an Instrument of Resignation, Appointment and Acceptance
dated as of January 16, 1987, pursuant to which Sterling National Bank & Trust
Company
<PAGE> 7
6
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

of New York resigned as Successor Trustee, the Company appointed United States
Trust Company of New York as Successor Trustee under the General and Refunding
Indenture and United States Trust Company of New York accepted such
appointment, has been executed by the Company, Sterling National Bank & Trust
Company of New York and United States Trust Company of New York and recorded as
follows: In the Oswego County Clerk's Office in Book 935 of Mortgages, Pages
295 to 308 on March 5, 1987; in the Office of the Register of The City of New
York for the County of Queens in Reel 2320P of Records, Pages 663 to 682 on
March 18, 1987; in the Suffolk County Clerk's Office in Liber 10285 of Deeds,
Pages 296 to 307A on April 2, 1987; in the Office of the Registrar of Suffolk
County as Document No. 347901 on December 18, 1987; and in the Nassau County
Clerk's Office in Liber 9809 of Deeds, Pages 582 to 594 on May 1, 1987;

WHEREAS, Sterling National Bank & Trust Company of New York, as
Successor Trustee, pursuant to Article Nine of the Uniform Commercial Code, has
executed an Assignment Statement which was filed in the State of New York on
January 26, 1987, in the Department of State of the State of New York as File
No. 24,939;

WHEREAS, United States Trust Company of New York, as Successor
Trustee, pursuant to Article Nine of the Uniform Commercial Code, has executed
a Continuation Statement which was filed in the State of New York on April 23,
1990, in the Department of State of the State of New York as File No. 83,191;

WHEREAS, the Company has executed and delivered to United States Trust
Company of New York supplemental indentures dated as of the dates set forth
below, creating series of General and Refunding Bonds and, in each instance,
subjecting to the lien of the Original General and Refunding Indenture certain
property of the Company, as follows:

<TABLE>
<CAPTION>
DATED AS OF SERIES CREATED
----------- --------------
<S> <C> <C>
Supplemental Indentures:
Twenty-second . . . . . . . . . . . . . . February 1, 1991 83/4% Due 1997
Twenty-third . . . . . . . . . . . . . . May 1, 1991 83/4% Due 1996
93/4% Due 2021
Twenty-fourth . . . . . . . . . . . . . . July 1, 1991 95/8% Due 2024
Twenty-fifth . . . . . . . . . . . . . . May 1, 1992 7.85% Due 1999
8.50% Due 2006
Twenty-sixth . . . . . . . . . . . . . . July 1, 1992 7.90% Due 2008;

</TABLE>

WHEREAS, the aforesaid Supplemental Indentures have been recorded as follows:
<PAGE> 8
7
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

<TABLE>
<CAPTION>
IN THE OFFICE OF
THE REGISTER OF
IN THE THE CITY OF
NASSAU COUNTY NEW YORK
CLERK'S OFFICE (QUEENS COUNTY)
-------------- ---------------

LIBER OF
MORTGAGES PAGE REEL PAGE
--------- ---- ---- ----
<S> <C> <C> <C> <C>
Supplemental Indentures:
Twenty-second . . . . . . . . . . . . . 13715 1 3121 1938
Twenty-third . . . . . . . . . . . . . 13782 1 3149 500
Twenty-fourth . . . . . . . . . . . . . 13859 1 3185 1109
Twenty-fifth . . . . . . . . . . . . . 14060 1 3319 2396
Twenty-sixth . . . . . . . . . . . . . 14113 1 3365 649

</TABLE>

<TABLE>
<CAPTION>
IN THE IN THE OFFICE OF
SUFFOLK COUNTY THE REGISTRAR OF
CLERK'S OFFICE SUFFOLK COUNTY
-------------- ----------------

LIBER OF
MORTGAGES PAGE DOCUMENT NO.
--------- ---- ------------
<S> <C> <C> <C>
Twenty-second . . . . . . . . . . . . . 16594 498 388388
Twenty-third . . . . . . . . . . . . . 16737 25 390446
Twenty-fourth . . . . . . . . . . . . . 16923 154 392729
Twenty-fifth . . . . . . . . . . . . . 17664 77 401507
Twenty-sixth . . . . . . . . . . . . . 17933 80 404358

</TABLE>

<TABLE>
<CAPTION>
IN THE
OSWEGO COUNTY
CLERK'S OFFICE
--------------

BOOK OF
MORTGAGES PAGE
--------- ----
<S> <C> <C>
Twenty-second . . . . . . . . . . . . . . 1227 19
Twenty-third . . . . . . . . . . . . . . 1242 49
Twenty-fourth . . . . . . . . . . . . . . 1264 24
Twenty-fifth . . . . . . . . . . . . . . 1334 130
Twenty-sixth . . . . . . . . . . . . . . 1357 116;

</TABLE>

WHEREAS, the Company, in accordance with the provisions of the
Original General and Refunding Indenture, desires by this Supplemental
Indenture to create one series of Bonds to be issued under the Original General
and Refunding Indenture (such series to be designated as "General and Refunding
Bonds, % Series Due " and being hereinafter sometimes referred to as "
Series") and to describe, insofar as the same is permitted by the Original
General and Refunding Indenture, the form of and certain other matters with
respect to the series of Bonds (hereinafter
<PAGE> 9
8
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

sometimes called " Series Bonds"), and to provide for the issue thereof as
fully registered bonds without coupons;

WHEREAS, by the provisions of Article XVII of the Original General and
Refunding Indenture, indentures supplemental to the Original General and
Refunding Indenture may be executed and delivered for the purpose of setting
forth the terms, provisions and form of additional series of Bonds and
supplementing the Original General and Refunding Indenture in a manner which is
not inconsistent with the provisions thereof and does not adversely affect the
interests nor modify the rights of Outstanding Bonds and for the other purposes
therein more fully set forth;

WHEREAS, the Company desires to subject specifically to the Lien of
the General and Refunding Indenture certain property of the Company;

WHEREAS, as required by Section 5.14 of the Original General and
Refunding Indenture, the Company is creating one series of its First Mortgage
Bonds to be issued pursuant to a Supplemental Indenture to the
Indenture of Mortgage and Deed of Trust dated as of September 1, 1951, between
the Company and the Trustee thereunder (said Indenture of Mortgage and Deed of
Trust, as the same may be amended or supplemented from time to time by
indentures supplemental thereto, is hereinafter referred to as the "First
Mortgage Bond Indenture"), which Supplemental Indenture is to be substantially
in the form set forth as Exhibit 1 hereto;

WHEREAS, by the provisions of Article XVII of the Original General and
Refunding Indenture, indentures supplemental to the Original General and
Refunding Indenture may be executed and delivered for any purpose which is not
inconsistent with the provisions of the Original General and Refunding
Indenture and which shall not adversely affect the interests of the Holders of
the Bonds;

WHEREAS, the Company, in the exercise of the powers and authority
conferred upon and reserved to it under the provisions of the Original General
and Refunding Indenture and pursuant to appropriate action of its Board of
Directors, has fully resolved and determined to make, execute and deliver to
the Trustee this Supplemental Indenture in the form hereof for
the purposes herein provided; and

WHEREAS, the Company represents that all conditions and requirements
necessary to make this Supplemental Indenture, in the form and
upon the terms hereof, a valid, binding and legal instrument, in accordance
with its terms, and for the purposes herein expressed, have been done,
performed and fulfilled, and the execution and delivery hereof, in the form and
upon the terms hereof, have been in all respects duly authorized;
<PAGE> 10
9
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

NOW, THEREFORE, in consideration of the premises and of the sum of $1
paid to the Company by the Trustee at or before the execution and delivery
hereof, the receipt whereof is hereby acknowledged and of other good and
valuable considerations, the Company does hereby acknowledge and confirm that
it has granted, bargained, sold, released, conveyed, assigned, transferred,
mortgaged, pledged and confirmed, and by these presents the Company does hereby
grant, bargain, sell, release, convey, assign, transfer, mortgage, pledge and
confirm unto the Trustee all property, real, personal or mixed, rights,
privileges and franchises (other than Excepted Property), of every kind and
description and wheresoever situate, as specified in Granting Clauses First,
Second, Third and Fourth of the Original General and Refunding Indenture.

TO HAVE AND TO HOLD all such property, rights, privileges and
franchises as part of the Mortgaged Property with like effect as though
originally included therein.

SUBJECT, HOWEVER, to the restrictions, exceptions, reservations,
conditions, limitations, interests and other matters, if any, referred to in
the Original General and Refunding Indenture, including, without limitation,
the Prior Lien of the First Mortgage Bond Indenture given to secure the
Company's First Mortgage Bonds issued thereunder, to the extent that such First
Mortgage Bond Indenture covers property hereby mortgaged, and other Excepted
Encumbrances.

IN TRUST NEVERTHELESS for the same purposes and upon the same terms,
trusts and conditions, and subject to and with the same provisos and covenants,
as are set forth in the Original General and Refunding Indenture, with the same
force and effect as though such property had been particularly described in the
Granting Clauses of the Original General and Refunding Indenture.

The Company does hereby covenant and agree with the Trustee as follows:

ARTICLE I

CREATION, DESCRIPTION AND FORM OF THE SERIES BONDS.

SECTION 1.01. The Company hereby creates a series of Bonds to be
issued under and secured by the General and Refunding Indenture, which shall be
designated as "General and Refunding Bonds, % Series Due " and which
shall be executed, authenticated and delivered in accordance with the
provisions of and shall in all respects be subject to all the terms, conditions
and covenants of the General and Refunding Indenture.
<PAGE> 11
10
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

SECTION 1.02. An aggregate principal amount of Million Dollars
($ ,000,000) of Series Bonds may forthwith be executed by the Company and
delivered to the Trustee and shall be authenticated by the Trustee and
delivered (either before or after the filing or recording hereof) to or upon
the order of the designated officer or officers of the Company upon receipt by
the Trustee of the cash, resolutions, certificates, opinions and documents
required to be delivered upon the issue of Bonds as provided in the General and
Refunding Indenture.

SECTION 1.03. Each Series Bond shall be dated the date of its
authentication and shall bear interest at the rate of per centum ( %) per
annum, from the date specified in such Bond as below provided as the
commencement date of the first interest period, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
payable semi-annually on and in each year, commencing on , , until
its Maturity according to its terms or on prior redemption or by declaration or
otherwise, and at the same rate, from such date of Maturity until paid or the
payment thereof shall have been duly provided for, and any overdue installment
of interest shall (to the extent that payment of such interest is enforceable
under applicable law) bear interest at the same rate.

The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will be paid to the Person in whose name a particular
Series Bond (or any Series Bond evidencing the same debt) is registered at
the close of business on the Regular Record Date for such interest which shall
be the first day (whether or not a business day) of or in each
year. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the registered Holder on such Regular Record
Date, and may be paid to the Person in whose name a particular Series Bond
(or any Series Bond evidencing the same debt) is registered at the close
of business on a Special Record Date for the payment of such defaulted interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Series Bonds not less than 10 days prior to such Special Record Date, or may be
paid, at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Series Bonds may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in Section 2.02 of the Original General and Refunding Indenture.
Payments of principal thereon shall be made at the office or agency of the
Company in the Borough of Manhattan, The City of New York, and such payments
shall be made in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Checks for the payment of interest thereon shall be mailed to the registered
Holder at the address shown in the Bond register or registers of the Company.
<PAGE> 12
11
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

SECTION 1.04. The Series Bonds may not be redeemed prior to ,
, except as provided in Section 1.05 below. On or after , , the Series
Bonds may be redeemed, at the option of the Company, as a whole or from time to
time in part, after notice given as provided in Section 8.02 of the Original
General and Refunding Indenture not less than thirty days and not more than
sixty days before such redemption date, at the redemption prices (expressed in
percentages of the principal amount) specified in the form set forth herein for
the Series Bonds under "Regular Redemption Price," together with accrued
interest to the date of redemption.

SECTION 1.05. The Series Bonds may be redeemed on any date prior
to Maturity, as a whole but not in part, after notice given as provided in
Section 8.07 of the Original General and Refunding Indenture not less than
thirty days and not more than ninety days before such redemption date, at a
redemption price of one hundred per centum (100%) of the then principal amount,
together with accrued interest to the date of redemption, in the event (a) that
all the outstanding common stock of the Company shall be acquired by some
governmental body or instrumentality and the Company shall elect to redeem all
the Bonds of all series, the redemption date in any such event to be not more
than one hundred twenty days after the date on which all said stock is so
acquired, or (b) that all or substantially all of the Mortgaged Property
constituting Bondable Property which at the time shall be subject to the Lien
of the General and Refunding Indenture shall be released from the Lien of the
General and Refunding Indenture pursuant to Section 9.04 or Section 9.05
thereof, or both, and available moneys in the hands of the Trustee, including
any moneys deposited by the Company for the purpose, are sufficient to redeem
all the Bonds of all series at the redemption prices (together with accrued
interest to the date of redemption) specified therein applicable to the
redemption thereof upon the happening of such event.

SECTION 1.06. The Series Bonds shall be issuable only as fully
registered Bonds in denominations of $1,000 and any integral multiple of
$1,000. The Series Bonds shall be exchangeable (upon payment of any tax or
taxes or other governmental charges payable under Section 2.04 of the Original
General and Refunding Indenture) at the option of the Holders thereof, for a
like aggregate principal amount of Series Bonds of other authorized
denominations.
<PAGE> 13
12
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

SECTION 1.07. The Series Bonds shall be substantially in the
following form:

[FORM OF FACE OF SERIES BONDS]

LONG ISLAND LIGHTING COMPANY

(Incorporated under the laws of the State of New York)
GENERAL AND REFUNDING BOND
% SERIES DUE

Number . . . . . . . . $ . . . . . . . .

LONG ISLAND LIGHTING COMPANY, a corporation organized and existing
under the laws of the State of New York (hereinafter called the "Company"), for
value received, hereby promises to pay to
or registered assigns, Dollars on , and to pay interest hereon at
the rate of per centum ( %) per annum, from the date of the initial
issuance of the General and Refunding Bonds of this Series, or from the most
recent interest payment date to which interest has been paid or duly provided
for, semi-annually on the day of and in each year,
commencing on , , until this bond shall mature, according to its
terms or on prior redemption or by declaration or otherwise, and at the same
rate, from such date of maturity of this bond until this bond shall be paid or
the payment hereof shall have been duly provided for, and (to the extent that
payment of such interest is enforceable under applicable law) to pay interest
on any overdue installment of interest at the same rate. The interest so
payable, and punctually paid or duly provided for, on any interest payment date
will, as provided in the General and Refunding Indenture hereinafter
mentioned, be paid to the person in whose name this bond (or any bond or bonds
evidencing the same debt) is registered at the close of business on the regular
record date for such interest which shall be the first day (whether or not a
business day) of or in each year. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the registered
holder on such regular record date, and may be paid to the person in whose name
this bond (or any bond or bonds evidencing the same debt) is registered at the
close of business on a special record date for the payment of such defaulted
interest to be fixed by the Trustee, notice whereof shall be given to holders
of bonds not less than 10 days prior to such special record date, or may be
paid, at any time, in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the bonds may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in the General and Refunding Indenture hereinafter mentioned. Payments
of principal hereon shall be made at the office or agency of the Company in the
Borough of Manhattan, The City of New York, and such payments
<PAGE> 14
13
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

shall be made in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Checks for the payment of interest hereon shall be mailed to the registered
holder at the address shown in the bond register or registers of the Company.

Reference is hereby made to the further provisions of this bond set
forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.

The lien on the properties of the Company provided by the General and
Refunding Indenture hereinafter mentioned is subject to certain liens prior to
the lien of the General and Refunding Indenture hereinafter mentioned,
including the lien of the Company's Indenture of Mortgage and Deed of Trust
dated as of September 1, 1951, as supplemented, securing the First Mortgage
Bonds of the Company issued thereunder.

This bond shall not become valid or obligatory for any purpose until
United States Trust Company of New York, or its successor, as Trustee under the
General and Refunding Indenture hereinafter mentioned, or an authenticating
agent appointed by the Trustee, shall have signed the certificate of
authentication endorsed hereon.

IN WITNESS WHEREOF, LONG ISLAND LIGHTING COMPANY has caused this bond
to be duly executed under its corporate seal.

Dated:

LONG ISLAND LIGHTING COMPANY

By
-------------------------
President

Attest:

------------------------
Secretary
<PAGE> 15
14
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]

This is one of the General and Refunding Bonds described in the within
mentioned General and Refunding Indenture.

UNITED STATES TRUST
COMPANY OF NEW YORK,
as Successor Trustee

By
---------------------------
Authorized Officer
[or

By
---------------------------
As Authenticating Agent
for the Trustee

By
---------------------------
Authorized Officer]*

* To be used if Trustee appoints an
authenticating agent or agents pursuant
to Section 14.23 of the General and
Refunding Indenture.
<PAGE> 16
15
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

[FORM OF REVERSE SIDE OF SERIES BONDS]

LONG ISLAND LIGHTING COMPANY
(Incorporated under the laws of the State of New York)

GENERAL AND REFUNDING BOND
% SERIES DUE

This bond is one of an issue of bonds of the Company (herein referred
to as the "General and Refunding Bonds"), not limited in principal amount
except as provided in the General and Refunding Indenture hereinafter
mentioned, issuable in series, which different series may mature at different
times, may bear interest at different rates, and may otherwise vary as provided
in the General and Refunding Indenture hereinafter mentioned, and is one of a
series known as its General and Refunding Bonds, % Series Due , created
by a Supplemental Indenture dated as of 1, , all General and Refunding
Bonds of all series issued and to be issued under and being equally and ratably
secured (except in so far as any sinking or analogous fund, established in
accordance with the provisions of the General and Refunding Indenture
hereinafter mentioned, may afford additional security for the General and
Refunding Bonds of any particular series) by a General and Refunding Indenture
dated as of June 1, 1975, executed and delivered by the Company and
Manufacturers Hanover Trust Company, Trustee (hereinafter referred to as the
"Trustee" which term includes any successor trustee) (hereinafter, together
with all indentures supplemental thereto, including the Supplemental Indenture
hereinabove referred to, called the "General and Refunding Indenture") to which
General and Refunding Indenture reference is made for a description of the
property mortgaged, the nature and the extent of the security, the rights of
the holders of the General and Refunding Bonds and of the Company in respect
thereof, the rights, duties and immunities of the Trustee, and the terms and
conditions upon which the General and Refunding Bonds are, and are to be,
issued and secured.

The General and Refunding Indenture contains provisions permitting the
holders of not less than a majority in principal amount of all the General and
Refunding Bonds at the time outstanding, determined and evidenced as provided
in the General and Refunding Indenture, on behalf of the holders of all the
General and Refunding Bonds, to waive any past default under the General and
Refunding Indenture and its consequences except a completed default, as defined
in the General and Refunding Indenture, in respect of the payment of the
principal of, premium, if any, or interest on any General and Refunding Bond or
except a default arising from the creation of any lien, other than those
permitted by the General and Refunding Indenture, ranking prior to or equal
with the lien of the General and Refunding Indenture on any of the mortgaged
property.
<PAGE> 17
16
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

The General and Refunding Indenture also contains provisions
permitting the Company and the Trustee, with the consent of the holders of not
less than the specified percentages described below in principal amount of the
General and Refunding Bonds at the time outstanding, in each case determined
and evidenced as provided in the General and Refunding Indenture, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the General and Refunding Indenture or
modifying in any manner the rights of the holders of the General and Refunding
Bonds, subject, however, to certain limitations described below. With respect
to any of the foregoing, there shall be required the consent of the holders of
not less than sixty-six and two-thirds per centum (662/3%) in principal amount
of all the General and Refunding Bonds at the time outstanding; however, in
case the rights under the General and Refunding Indenture of the holders of
General and Refunding Bonds of one or more, but less than all, of the series of
General and Refunding Bonds outstanding shall be similarly affected, then the
consent of the holders of not less than sixty-six and two-thirds per centum
(662/3%) in principal amount of the outstanding General and Refunding Bonds of
such one or more series affected is required, except that if any such action
would similarly affect the General and Refunding Bonds of two or more series,
the holders of not less than sixty-six and two-thirds per centum (662/3%) in
principal amount of outstanding General and Refunding Bonds of such two or more
series, which need not include sixty-six and two-thirds per centum (662/3%) in
principal amount of each of such series, is required. No such supplemental
indenture shall, however, (i) extend the fixed maturity of any General and
Refunding Bonds, or reduce the rate or extend the time of payment of interest
thereon, or any premium payable on redemption thereof, or reduce the principal
amount thereof, or, subject to the provisions of the General and Refunding
Indenture, limit the right of a bondholder to institute suit for the
enforcement of payment of principal, premium, if any, or interest in accordance
with the terms of the General and Refunding Bonds, without the consent of the
holder of each General and Refunding Bond so affected, or (ii) reduce the
aforesaid percentage of General and Refunding Bonds, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all General and Refunding Bonds then outstanding, or (iii)
permit the creation of any lien, other than those permitted by the terms of the
General and Refunding Indenture, ranking prior to or equal with the lien of the
General and Refunding Indenture on any of the mortgaged property without the
consent of the holders of all General and Refunding Bonds then outstanding, or
(iv) in any respect materially reduce his security and deprive the holder of
any outstanding General and Refunding Bond of the lien of the General and
Refunding Indenture on any of the mortgaged property without his consent. Any
such waiver or consent by the holder of this General and Refunding Bond (unless
effectively revoked as provided in the General and Refunding Indenture) shall
be conclusive and binding upon such holder and upon all future holders of this
General and Refunding Bond, or General and Refunding Bonds issued in exchange
for or upon the transfer
<PAGE> 18
17
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

of this General and Refunding Bond, irrespective of whether or not any notation
of such waiver or consent is made upon this General and Refunding Bond.

No reference herein to the General and Refunding Indenture and no
provision of this General and Refunding Bond or of the General and Refunding
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this General and Refunding Bond at the time and place and at the
rate and in the coin or currency herein prescribed.

The General and Refunding Bonds of this Series are issuable only as
fully registered bonds in denominations of $1,000 and any integral multiple of
$1,000. General and Refunding Bonds of this Series may be exchanged for a like
aggregate principal amount of General and Refunding Bonds of this Series of
other authorized denominations without charge except for any tax or taxes or
other governmental charges incident to such exchange, such exchange to be made
at any office or agency to be maintained by the Company for such purposes and
in the manner and subject to the limitations provided in the General and
Refunding Indenture.

The General and Refunding Bonds of this Series may not be redeemed
prior to , , except as herein provided. On or after , , the
General and Refunding Bonds of this Series may be redeemed, at the option of
the Company, during the periods provided below, as a whole, or from time to
time in part, after the notice given as provided in the General and Refunding
Indenture not less than thirty days and not more than sixty days before such
redemption date, at the redemption prices (expressed in percentages of the
principal amount) set forth in the following table under "Regular Redemption
Price," together with accrued interest to the date of redemption:

<TABLE>
<S> <C> <C> <C> <C> <C>
IF REDEEMED IF REDEEMED
DURING DURING
12 MONTH 12 MONTH
PERIOD REGULAR SPECIAL PERIOD REGULAR SPECIAL
BEGINNING REDEMPTION REDEMPTION BEGINNING REDEMPTION REDEMPTION
, PRICE % PRICE % , PRICE % PRICE %
----------- ---------- ---------- ----------- ---------- ----------

</TABLE>

<PAGE> 19
18
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

Redemption as a whole of the General and Refunding Bonds of this
Series, but not in part, may be effected prior to maturity, after notice given
as provided in the General and Refunding Indenture not less than thirty days
and not more than ninety days before such redemption date, at a redemption
price of one hundred per centum (100%) of the then principal amount, together
with accrued interest to the date of redemption, as more fully provided in
Section 8.07 of the General and Refunding Indenture, in the event (a) that all
the outstanding common stock of the Company shall be acquired by some
governmental body or instrumentality and the Company elects to redeem all the
General and Refunding Bonds of all series, the redemption date in any such
event to be not more than one hundred twenty days after the date on which all
said stock is so acquired, or (b) that all or substantially all of the
mortgaged property which at the time shall be subject to the lien of the
General and Refunding Indenture shall be released from the lien of the General
and Refunding Indenture pursuant to the provisions thereof, and available
moneys in the hands of the Trustee, including any moneys deposited by the
Company for the purpose, are sufficient to redeem all the General and Refunding
Bonds of all series at the redemption prices (together with accrued interest to
the date of redemption) specified therein applicable to the redemption thereof
upon the happening of such event.

The General and Refunding Indenture provides that any notice of
redemption of General and Refunding Bonds may state that it is subject to the
receipt of the redemption moneys by the Trustee before the date fixed for
redemption and such notice shall be of no effect unless such moneys are
received before such date.

The General and Refunding Indenture provides that if the Company shall
deposit with the Trustee, in trust for the purpose, funds sufficient to pay the
principal of all the General and Refunding Bonds of any series, or such of the
General and Refunding Bonds of any series as have been or are to be called for
redemption (including any portions, constituting $1,000 or an integral multiple
thereof, of fully registered General and Refunding Bonds of this Series) and
premium, if any, thereon, and all interest payable on such General and
Refunding Bonds (or portions) to the date on which they become due and payable
at maturity or upon redemption or otherwise, and complies with the other
provisions of the General and Refunding Indenture in respect thereof, then from
the date of such deposit such General and Refunding Bonds (or portions) shall
no longer be secured by the lien of the General and Refunding Indenture.

The General and Refunding Indenture provides that, upon any partial
redemption of a fully registered General and Refunding Bond, and upon surrender
thereof, new General and Refunding Bonds of the same series and of authorized
denominations in principal amount equal to the unredeemed portion of such fully
registered General and Refunding Bond will be delivered without charge in
exchange therefor.
<PAGE> 20
19
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

The principal hereof may be declared or may become due prior to the
express date of the maturity hereof on the conditions, in the manner and at the
time set forth in the General and Refunding Indenture, upon the occurrence of a
completed default as provided in the General and Refunding Indenture.

This General and Refunding Bond is transferable in the manner and
subject to the limitations prescribed in the General and Refunding Indenture by
the registered holder hereof in person, or by his duly authorized attorney, at
the principal corporate trust office of the Trustee or at such other office or
agency established for that purpose, upon surrender of this General and
Refunding Bond, and upon payment, if the Company shall require it, of any tax
or taxes or other governmental charges incident to such exchange or transfer,
payable in connection therewith, and thereupon, a new General and Refunding
Bond or Bonds of authorized denominations of the same series and for the same
aggregate principal amount will be issued to the transferee in exchange herefor
as provided in the General and Refunding Indenture. Except as otherwise
provided herein with respect to the payment of interest, the Company and the
Trustee, any paying agent, any bond registrar and any other of the Company's
agents may deem and treat the person in whose name this General and Refunding
Bond is registered as the absolute owner hereof, whether or not this General
and Refunding Bond shall be overdue, for the purpose of receiving payment and
for all other purposes and neither the Company nor the Trustee nor any paying
agent nor any bond registrar nor any other of the Company's agents shall be
affected by any notice to the contrary.

No recourse under or upon any obligation, covenant or agreement
contained in the General and Refunding Indenture, or in any General and
Refunding Bond thereby secured, or because of any indebtedness thereby secured,
shall be had against any incorporator, or against any past, present or future
shareholder, officer or director, as such, of the Company or of any successor
corporation under any rule of law, statute or constitution, or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise; it being expressly agreed and understood that the General and
Refunding Indenture, and the obligations thereby secured, are solely corporate
obligations, and that no personal liability whatever shall attach to, or be
incurred by, such incorporators, shareholders, officers or directors, as such,
of the Company or of any successor corporation, or any of them because of the
incurring of the indebtedness thereby authorized or under or by reason of any
of the obligations, covenants or agreements contained in the General and
Refunding Indenture or in any of the General and Refunding Bonds thereby
secured, or implied therefrom.

[END OF REVERSE SIDE OF FORM OF SERIES BONDS]
<PAGE> 21
20
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

ARTICLE II

CONCERNING THE TRUSTEE.

SECTION 2.01. The Trustee shall not be responsible in any manner for
or with respect to the validity or sufficiency of this Supplemental
Indenture, or the due execution hereof by the Company, or for or with
respect to the recitals and statements made solely by the Company.

SECTION 2.02. The Trustee hereby accepts the properties hereby
mortgaged and conveyed to it upon the trusts hereinbefore referred to and
agrees to perform the same upon the terms and conditions set forth in the
General and Refunding Indenture.

ARTICLE III

MISCELLANEOUS.

SECTION 3.01. For all purposes hereof, except as the content may
otherwise require, (a) all terms contained herein shall have the meanings given
such terms in, and (b) all references herein to sections of the Original
General and Refunding Indenture shall be deemed to be to such sections of, the
Original General and Refunding Indenture as the same heretofore has been or
hereafter may be amended by an indenture or indentures supplemental thereto.

SECTION 3.02. This Supplemental Indenture may be
executed in several counterparts, and all such counterparts executed and
delivered, each as an original, shall constitute but one and the same
instrument.

SECTION 3.03. Attached hereto as Exhibit 1 is the form of the
Supplemental Indenture to the First Mortgage Bond Indenture providing for the
issuance of First Mortgage Bonds in accordance with the provisions of Section
5.14 of the Original General and Refunding Indenture.

Pursuant to Section 259 of the Tax Law of the State of New York, the
Company hereby states that the amount which, at the time of the execution and
delivery of this Supplemental Indenture, including Exhibit 1
hereto, has been advanced or has accrued hereon or has become and is secured
hereby is the sum of $ ,000,000.
<PAGE> 22
21
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

IN WITNESS WHEREOF, LONG ISLAND LIGHTING COMPANY has caused this
instrument to be signed in its corporate name by its President or a Vice
President and its corporate seal to be hereunto affixed and attested by its
Secretary or an Assistant Secretary and, in token of its acceptance of the
Trusts created hereunder, UNITED STATES TRUST COMPANY OF NEW YORK has caused
this instrument to be signed in its corporate name by one of its Vice
Presidents and Trust Officers and its corporate seal to be affixed and attested
by one of its authorized officers, all as of the day and year first above
written.

LONG ISLAND LIGHTING COMPANY

[CORPORATE SEAL] By
-------------------------
ANTHONY NOZZOLILLO
Senior Vice President and
Chief Financial Officer

Attest:

- ------------------------
KATHLEEN A. MARION
Corporate Secretary

UNITED STATES TRUST COMPANY
OF NEW YORK

[CORPORATE SEAL] By
-------------------------
LOUIS P. YOUNG
Assistant Vice President

Attest:

- ------------------------
Assistant Vice President
<PAGE> 23
22
Long Island Lighting Company - Supplemental Indenture to the General and
Refunding Indenture

STATE OF NEW YORK)
) SS.
COUNTY OF NASSAU )

On the day of , in the year , before me personally
came ANTHONY NOZZOLILLO, to me known, who, being by me duly sworn, did depose
and say that he resides at ; that he is
a Senior Vice President and Chief Financial Officer of LONG ISLAND LIGHTING
COMPANY, one of the corporations described in and which executed the above
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by order of
the Board of Directors of said corporation; and that he signed his name thereto
by like order.

---------------------------
Notary Public

STATE OF NEW YORK )
) SS.
COUNTY OF NEW YORK)

On the day of , in the year , before me personally
came LOUIS P. YOUNG, to me known, who, being by me duly sworn, did depose and
say that he resides at 6 Island Street, Plainview, New York 11803; that he is
an Assistant Vice President of UNITED STATES TRUST COMPANY OF NEW YORK, one of
the corporations described in and which executed the above instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.

---------------------------
Notary Public

<PAGE> 24
23

EXHIBIT 1

SUPPLEMENTAL INDENTURE, dated as of 1, , between LONG ISLAND
LIGHTING COMPANY, a New York corporation ("the Company"), having its principal
office at 175 East Old Country Road, in Hicksville, County of Nassau, State of
New York, and IBJ SCHRODER BANK & TRUST COMPANY, a bank and trust company
organized under the laws of the State of New York (hereinafter called "the
Trustee" or "the Successor Trustee"), having its corporate trust office at One
State Street, in the Borough of Manhattan, City, County and State of New York.

WHEREAS, the Company has executed and delivered to City Bank Farmers
Trust Company (subsequently converted into First National City Trust Company,
which was merged into First National City Bank, now named Citibank, N.A.), as
Trustee (hereinafter called "the Original Trustee"), an Indenture of Mortgage
and Deed of Trust dated as of September 1, 1951 ("the Original Indenture")
securing the Company's First Mortgage Bonds ("the Bonds"), unlimited in
aggregate principal amount except as therein otherwise provided, and creating
the Company's First Mortgage Bonds, Series A, B and C; and

WHEREAS, thereafter the Company executed and delivered to the Trustee,
or its predecessor as Trustee, a First Supplemental Indenture, dated as of
December 1, 1951, a Second Supplemental Indenture, dated as of October 1, 1952,
a Third Supplemental Indenture, dated as of September 1, 1953, a Fourth
Supplemental Indenture, dated as of December 1, 1954, a Fifth Supplemental
Indenture, dated as of November 1, 1955, a Sixth Supplemental Indenture, dated
as of December 1, 1956, a Seventh Supplemental Indenture, dated as of May 1,
1958, an Eighth Supplemental Indenture, dated as of July 1, 1959, a Ninth
Supplemental Indenture, dated as of August 1, 1961, a Tenth Supplemental
Indenture, dated as of April 1, 1963, an Eleventh Supplemental Indenture, dated
as of June 1, 1964, a Twelfth Supplemental Indenture, dated as of June 1, 1965,
a Thirteenth Supplemental Indenture, dated as of March 1, 1966, a Fourteenth
Supplemental Indenture, dated as of April 1, 1967, a Fifteenth Supplemental
Indenture, dated as of September 1, 1969, creating the Company's First Mortgage
Bonds, Series D, E, F, G, H, I, J, K, L, M, N, O, P, Q and R, a Sixteenth
Supplemental Indenture, dated as of September 1, 1970, creating the Company's
First Mortgage Bonds, Series S and T, a Seventeenth Supplemental Indenture,
dated as of April 1, 1971, an Eighteenth Supplemental Indenture, dated as of
December 1, 1971, a Nineteenth Supplemental Indenture, dated as of September 1,
1972, a Twentieth Supplemental Indenture, dated as of December 1, 1973, a
Twenty-first Supplemental Indenture, dated as of June 1, 1974, a Twenty-second
Supplemental Indenture, dated as of November 1, 1974, a Twenty-third
Supplemental Indenture, dated as of June 1, 1975, a Twenty-fourth
<PAGE> 25
24

Supplemental Indenture, dated as of September 1, 1975, a Twenty-fifth
Supplemental Indenture, dated as of June 1, 1976, a Twenty-sixth
Supplemental Indenture, dated as of December 1, 1976, a Twenty-seventh
Supplemental Indenture, dated as of May 1, 1977, a Twenty-eighth
Supplemental Indenture, dated as of April 1, 1978, a Twenty-ninth
Supplemental Indenture, dated as of March 1, 1979, a Thirtieth
Supplemental Indenture, dated as of February 1, 1980, a Thirty-first
Supplemental Indenture, dated as of March 1, 1981, a Thirty-second
Supplemental Indenture, dated as of July 1, 1981, a Thirty-third
Supplemental Indenture, dated as of July 1, 1981, a Thirty-fourth
Supplemental Indenture, dated as of December 1, 1981, a Thirty-fifth
Supplemental Indenture, dated as of December 1, 1981, a Thirty-sixth
Supplemental Indenture, dated as of June 1, 1982, a Thirty-seventh
Supplemental Indenture, dated as of October 1, 1982, a Thirty-eighth
Supplemental Indenture, dated as of April 1, 1983, and a Thirty-ninth
Supplemental Indenture, dated as of May 1, 1983, creating the Company's
First Mortgage Bonds, Series U, V, W, X, Y, Z, AA, BB, CC, DD, EE, FF, GG, HH,
II, JJ, KK, LL, MM, NN, OO, PP and QQ, and confirming the lien of the
Indenture on certain property, rights, privileges and franchises acquired since
the execution and delivery of the Original Indenture; and

WHEREAS, the Original Indenture and the aforesaid Supplemental
Indentures have been recorded as follows:

<TABLE>
<CAPTION>
IN THE OFFICE OF
THE REGISTER OF
IN THE NASSAU THE CITY OF
COUNTY CLERK'S NEW YORK
OFFICE (QUEENS COUNTY)
-------------- ---------------

Liber of Liber of
Mortgages Page Mortgages Page
--------- ---- --------- ----
<S> <C> <C> <C> <C>
Original Indenture . . . . 4450 1 6475 1
Supplemental Indentures:
First . . . . . . . . . . 4464 69 6484 377
Second . . . . . . . . . 4724 389 6638 171
Third . . . . . . . . . . 5041 428 6799 141
Fourth . . . . . . . . . 5405 370 6966 422
Fifth . . . . . . . . . . 5703 64 7110 648
Sixth . . . . . . . . . . 6007 521 7273 281
Seventh . . . . . . . . . 6273 326 7451 458
</TABLE>
<PAGE> 26
25

<TABLE>
<CAPTION>
IN THE OFFICE OF
THE REGISTER OF
IN THE NASSAU THE CITY OF
COUNTY CLERK'S NEW YORK
OFFICE (QUEENS COUNTY)
-------------- ---------------

Liber of Liber of
Mortgages Page Mortgages Page
--------- ---- --------- ----
<S> <C> <C> <C> <C>
Supplemental Indentures:
Eighth . . . . . . . . . 6532 251 7612 211
Ninth . . . . . . . . . . 6950 79 7884 530
Tenth . . . . . . . . . . 7322 1 8158 387
Eleventh . . . . . . . . 7538 61 8416 388
Twelfth . . . . . . . . . 7717 342 8639 323
Thirteenth . . . . . . . 7872 464 55* 90
Fourteenth . . . . . . . 8079 364 383* 438
Fifteenth . . . . . . . . 8529 283 349** 429
Sixteenth . . . . . . . . 8671 129 427** 242
Seventeeth . . . . . . . 8744 104 468** 1768
Eighteenth . . . . . . . 8889 237 535** 1618
Nineteenth . . . . . . . 9027 144 601** 1250
Twentieth . . . . . . . . 9291 274 725** 1786
Twenty-first . . . . . . 9365 240 766** 1373
Twenty-second . . . . . . 9439 30 799** 1072
Twenty-third . . . . . . 9517 524 840** 1275
Twenty-fourth . . . . . . 9570 458 862** 584
Twenty-fifth . . . . . . 9675 63 911** 544
Twenty-sixth . . . . . . 9778 58 953** 505
Twenty-seventh . . . . . 9814 558 985** 759
Twenty-eighth . . . . . . 9919 64 1063** 1103
Twenty-ninth . . . . . . 10032 78 1143** 1125
Thirtieth . . . . . . . . 10169 75 1239* 1812
Thirty-first . . . . . . 10285 74 1323** 816
Thirty-second . . . . . . 10322 44 1351** 230
Thirty-third . . . . . . 10322 105 1351** 293
Thirty-fourth . . . . . . 10379 68 1392** 1729
Thirty-fifth . . . . . . 10379 172 1392** 1604
Thirty-sixth . . . . . . 10423 170 1432** 1106
Thirty-seventh . . . . . 10471 471 1466** 1683
Thirty-eighty . . . . . . 10542 769 1518** 938
Thirty-ninth . . . . . . 10571 57 1537** 767

- ---------------
</TABLE>

*Liber of Records.
**Reel.
<PAGE> 27
26

<TABLE>
<CAPTION>
IN THE SUFFOLK IN THE OFFICE OF
COUNTY CLERK'S THE REGISTRAR OF
OFFICE SUFFOLK COUNTY
-------------- -----------------

LIBER OF
MORTGAGES PAGE DOCUMENT NO.
--------- ---- ------------
<S> <C> <C> <C>
Original Indenture . . . . . . . 1884 1 29050
Supplemental Indentures:
First . . . . . . . . . . . . 1889 569 29279
Second . . . . . . . . . . . . 2006 74 35843
Third . . . . . . . . . . . . . 2143 211 43709
Fourth . . . . . . . . . . . . 2326 488 52211
Fifth . . . . . . . . . . . . . 2539 317 59824
Sixth . . . . . . . . . . . . . 2773 327 68422
Seventh . . . . . . . . . . . . 3015 86 78200
Eighth . . . . . . . . . . . . 3251 5 88155
Ninth . . . . . . . . . . . . . 3678 380 106597
Tenth . . . . . . . . . . . . . 4081 14 122751
Eleventh . . . . . . . . . . . 4390 72 134155
Twelfth . . . . . . . . . . . . 4664 366 143894
Thirteenth . . . . . . . . . . 4890 405 151648
Fourteenth . . . . . . . . . . 5130 543 160481
Fifteenth . . . . . . . . . . . 5682 431 179778
Sixteenth . . . . . . . . . . . 5891 14 187577
Seventeenth . . . . . . . . . . 6006 544 191628
Eighteenth . . . . . . . . . . 6236 195 198008
Nineteenth . . . . . . . . . . 6473 299 204868
Twentieth . . . . . . . . . . . 6956 378 219354
Twenty-first . . . . . . . . . 7104 80 223591
Twenty-second . . . . . . . . . 7221 17 226961
Twenty-third . . . . . . . . . 7358* 510 231531
Twenty-fourth . . . . . . . . . 7445* 120 234028
Twenty-fifth . . . . . . . . . 7622* 61 239418
Twenty-sixth . . . . . . . . . 7773* 100 244098
Twenty-seventh . . . . . . . . 7882* 552 247933
Twenty-eighth . . . . . . . . . 8149* 30 256465
Twenty-ninth . . . . . . . . . 8401* 574 263862
Thirtieth . . . . . . . . . . . 8689 1 271653

- ---------------
</TABLE>

* Volume of Mortgages.
<PAGE> 28
27

<TABLE>
<CAPTION>
IN THE SUFFOLK IN THE OFFICE OF
COUNTY CLERK'S THE REGISTRAR OF
OFFICE SUFFOLK COUNTY
-------------- ------------------

LIBER OF
MORTGAGES PAGE DOCUMENT NO.
--------- ---- ------------
Supplemental Indentures:
<S> <C> <C> <C>
Thirty-first . . . . . . . . 8950 38 278932
Thirty-second . . . . . . . . 9034 385 281160
Thirty-third . . . . . . . . 9034 446 281157
Thirty-fourth . . . . . . . . 9169 97 284686
Thirty-fifth . . . . . . . . 9169 161 284688
Thirty-sixth . . . . . . . . 9271 423 287513
Thirty-seventh . . . . . . . 9374 279 290222
Thirty-eighth . . . . . . . . 9519 563 293588
Thirty-ninth . . . . . . . . 9578 272 294810;

</TABLE>

WHEREAS, the Company and First National City Bank (now Citibank,
N.A.), as Trustee, pursuant to Article Nine of the Uniform Commercial Code,
have executed a Financing Statement which was filed in the State of New York on
June 2, 1965, in the Department of State of the State of New York as File No.
65-124,203, and Continuation Statements numbered 48,738, 40,081, 73,660 and
123,589, which were filed, respectively, in the State of New York on April 21,
1970, May 15, 1975, May 23, 1980 and May 28, 1985, in the Department of State
of the State of New York; and

WHEREAS, a Fortieth Supplemental Indenture, dated as of February 29,
1984, wherein the Company accepts the resignation of Citibank, N.A., as
Original Trustee under the Indenture, appoints J. Henry Schroder Bank & Trust
Company as Successor Trustee under the Indenture and J. Henry Schroder Bank &
Trust Company accepts such appointment, has been executed by the Company,
Citibank, N.A. and J. Henry Schroder Bank & Trust Company and recorded as
follows: In the Nassau County Clerk's Office in Liber 9538 of Deeds, Page 581
on March 1, 1984; in the Office of the Register of The City of New York (Queens
County) on Reel 1647, Page 40 on March 5, 1984; in the Suffolk County Clerk's
Office in Liber 9992 of Mortgages, Page 418 on March 5, 1984; and in the Office
of the Registrar of Suffolk County as Document No. 301270 on March 5, 1984; and

WHEREAS, the Company and First National City Bank (now Citibank,
N.A.), as Trustee, pursuant to Article Nine of the Uniform Commercial Code,
have executed an Amendment to the Financing Statement which was filed in
<PAGE> 29
28

the State of New York on May 28, 1985, in the Department of State of the State
of New York as File No. 123,590, and an Assignment Statement on May 28, 1985
numbered 123,591 to J. Henry Schroder Bank & Trust Company, and on April 23,
1990 the Company and J. Henry Schroder Bank & Trust Company filed a
Continuation Statement numbered 83,189 and an Amendment Statement numbered
83,190; and

WHEREAS, thereafter the Company executed and delivered to the
Successor Trustee a Forty-first Supplemental Indenture, dated as of September
1, 1984, a Forty-second Supplemental Indenture, dated as of October 1, 1984, a
Forty-third Supplemental Indenture, dated as of June 1, 1985, a Forty-fourth
Supplemental Indenture, dated as of April 1, 1986, a Forty-fifth Supplemental
Indenture, dated as of February 1, 1991, a Forty-sixth Supplemental Indenture,
dated as of May 1, 1991, a Forty-seventh Supplemental Indenture, dated as of
July 1, 1991, a Forty-eighth Supplemental Indenture, dated as of May 1, 1992,
and a Forty-ninth Supplemental Indenture dated as of July 1, 1992, creating the
Company's First Mortgage Bonds, Series RR, SS, TT, UU, VV, WW, XX, YY, ZZ, AAA,
BBB and CCC, respectively, and confirming the lien of the Indenture on certain
property, rights, privileges and franchises acquired since the execution and
delivery of the Original Indenture; and

WHEREAS, the aforesaid Supplemental Indentures have been recorded as
follows:

<TABLE>
<CAPTION>
IN THE OFFICE OF
THE REGISTER OF
IN THE THE CITY OF
NASSAU COUNTY NEW YORK
CLERK'S OFFICE (QUEENS COUNTY)
-------------- ---------------

LIBER OF
MORTGAGES PAGE REEL PAGE
--------- ---- ---- ----
<S> <C> <C> <C> <C>
Supplemental Indentures:
Forty-first . . . . . . . . . . 10945 622 1742 680
Forty-second . . . . . . . . . 10988 758 1772 1463
Forty-third . . . . . . . . . . 11159 60 1877 735
Forty-fourth . . . . . . . . . 11487 95 2073 1
Forty-fifth . . . . . . . . . . 13715 178 3121 1996
Forty-sixth . . . . . . . . . . 13782 196 3149 569
Forty-seventh . . . . . . . . . 13859 167 3185 1156
Forty-eighth . . . . . . . . . 14060 193 3319 2469
Forty-ninth . . . . . . . . . . 14113 170 3365 698
</TABLE>
<PAGE> 30
29

<TABLE>
<CAPTION>
IN THE IN THE OFFICE OF
SUFFOLK COUNTY THE REGISTRAR OF
CLERK'S OFFICE SUFFOLK COUNTY
-------------- ---------------

LIBER OF
MORTGAGES PAGE DOCUMENT NO.
--------- ---- ------------
<S> <C> <C> <C>
Supplemental Indentures:

Forty-first . . . . . . . . . . . 10357 1 306374
Forty-second . . . . . . . . . . 10465 165 307994
Forty-third . . . . . . . . . . . 10849 202 313990
Forty-fourth . . . . . . . . . . 11550 227 323439
Forty-fifth . . . . . . . . . . . 16595 1 388389
Forty-sixth . . . . . . . . . . . 16737 201 390447
Forty-seventh . . . . . . . . . . 16923 299 392730
Forty-eighth . . . . . . . . . . 17664 247 401508
Forty-ninth . . . . . . . . . . . 17933 227 404359

</TABLE>
<TABLE>
<CAPTION>
IN THE
OSWEGO COUNTY
CLERK'S OFFICE
--------------

BOOK OF
-------
MORTGAGES PAGE
--------- ----
<S> <C> <C>
Supplemental Indentures:

Forty-fourth . . . . . . . . . . 869 106
Forty-fifth . . . . . . . . . . . 1227 77
Forty-sixth . . . . . . . . . . . 1242 85
Forty-seventh . . . . . . . . . . 1264 71
Forty-eighth . . . . . . . . . . 1334 168
Forty-ninth . . . . . . . . . . . 1357 175; and

</TABLE>

WHEREAS, the Organization Certificate of J. Henry Schroder Bank &
Trust Company, filed in the Office of the Superintendent of Banks of the State
of New York, was amended, effective January 1, 1987, to provide that J. Henry
Schroder Bank & Trust Company be named IBJ Schroder Bank & Trust Company; and

WHEREAS, the Original Indenture, together with the aforesaid
forty-nine supplemental indentures and this Supplemental Indenture, is
hereinafter called "the Indenture;" and
<PAGE> 31
30

WHEREAS, as required by Section 5.14 of the General and Refunding
Indenture dated as of June 1, 1975 between the Company and Manufacturers
Hanover Trust Company, as Trustee ("the General and Refunding Indenture"), the
Company desires by this Supplemental Indenture to create one series of
Bonds to be issued under the Indenture, to designate or otherwise distinguish
such series, to specify the particulars necessary to describe and define the
same, and to specify such other terms, provisions and agreements in respect
thereto as are in the Indenture provided or permitted; and

WHEREAS, since the execution and delivery of the Original Indenture,
the Company has acquired certain property, rights, privileges and franchises
which by the terms of the Original Indenture are subject to the lien of the
Indenture, and the Company desires to confirm the lien of the Indenture on said
property, rights, privileges and franchises so acquired in accordance with the
provisions of the Indenture; and

WHEREAS, all the conditions and requirements necessary to make this
Supplemental Indenture when duly executed a valid, binding and legal instrument
in accordance with its terms and for the purposes herein expressed have been
done, performed and fulfilled, and the execution and delivery of this
Supplemental Indenture have in all respects been duly authorized by resolution
of the Board of Directors of the Company;

NOW, THEREFORE, in consideration of the premises and of the sum of $1
paid to the Company by the Trustee at or before the execution and delivery
hereof, the receipt whereof is hereby acknowledged, and of other good and
valuable considerations, the Company does hereby acknowledge and confirm that
it has granted, bargained, sold, released, conveyed, assigned, transferred,
mortgaged, pledged and confirmed, and by these presents the Company does hereby
grant, bargain, sell, release, convey, assign, transfer, mortgage, pledge and
confirm unto the Trustee all property, real, personal or mixed, rights,
privileges and franchises (other than Excepted Property as defined in the
Indenture), of every kind and description and wheresoever situate, acquired by
the Company since the execution and delivery of the Original Indenture.

TO HAVE AND TO HOLD all such property, rights, privileges and
franchises as part of the Trust Estate (as defined in the Indenture) with like
effect as though originally included therein.

IN TRUST NEVERTHELESS for the same purposes and upon the same terms,
trusts and conditions, and subject to and with the same provisos and
<PAGE> 32
31

covenants, as are set forth in the Indenture, with the same force and effect as
though such property had been particularly described in the Granting Clauses of
the Original Indenture.

The Company does hereby covenant and agree with the Trustee as follows:

ARTICLE I

FIRST MORTGAGE BONDS, SERIES DUE

SECTION 1. There is hereby created a series of Bonds to be issued
under and secured by the Indenture to be designated as "First Mortgage Bonds,
Series % Due " of the Company ("the Bonds of Series "), and the
form thereof shall be substantially as hereinafter recited. The principal
amount of Bonds of Series which may be authenticated and delivered under
this Supplemental Indenture shall be limited to Million Dollars ($
,000,000), except for Bonds of Series authenticated and delivered upon
transfer of, or in exchange for, or in lieu of other Bonds of Series
pursuant to the provisions of the Original Indenture, as from time to time
amended and supplemented, or of this Supplemental Indenture. An aggregate
principal amount of Million Dollars ($ ,000,000) of the Bonds of
Series may forthwith be executed by the Company and delivered to the
Trustee for authentication and delivery. From time to time, so long as the
aggregate principal amount of the Bonds of Series authenticated and
delivered does not exceed the limitation hereinabove set forth, and subject to
the terms and conditions of the Indenture relative to the authentication and
delivery of Bonds, Bonds of Series additional to the initial issue thereof
may be executed by the Company and delivered to the Trustee for authentication
and delivery. The Bonds of Series shall be registered Bonds without coupons in
denominations of $1,000 or any multiple thereof, and of such amount of each
denomination as may be executed by the Company and delivered to the Trustee for
authentication and delivery. The Bonds of Series shall mature ,
and shall bear interest at the rate of per centum ( %) per annum, payable
semi-annually on and in each year, commencing on the date
specified in such Bond as below provided as the commencement date of the first
interest period, until the principal thereof shall have become due and payable.
Interest shall be payable on overdue principal of the Bonds of
<PAGE> 33
32

Series and (to the extent that payment of such interest is enforceable
under applicable law) on overdue instalments of interest of Bonds of Series
at the rate of six per centum (6%) per annum. Both the principal of and
interest on the Bonds of Series shall be paid at the office or agency of
the Company in the Borough of Manhattan in The City of New York, in any coin or
currency of the United States of America which at the time of payment shall be
legal tender for public and private debts.

SECTION 2. The provisions of the second paragraph of Section 2.05 of
the Indenture shall not be applicable to the Bonds of Series . All Bonds of
Series shall be dated the date of their authentication, and shall bear
interest from the date specified in such Bond as below provided as the
commencement of the first interest period, or from the most recent interest
date to which interest has been paid or duly provided for. Interest on any Bond
of Series which is payable, and is punctually paid or duly provided for, on
any interest date shall be paid to the person in whose name that Bond (or one
or more Bonds of Series evidencing all or a portion of the same debt) is
registered at the close of business on the Regular Record Date for such
interest which shall be the day of or , as the case may be,
next preceding such interest date whether or not such day of or
is a day which is not a day on which banking institutions in The City of New
York are authorized or required by law or executive order to be closed
(hereinafter a "Business Day").

SECTION 3. Any interest on any Bond of Series which is payable,
but is not punctually paid or duly provided for, on any interest date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered holder on the relevant Regular Record Date by virtue of having been
such holder; and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or Clause (2) below:

(1) The Company may elect to make payment of any
Defaulted Interest to the persons in whose names the Bonds of Series
(or the respective Bonds of Series evidencing all or a portion of
the same debt) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on
each Bond of Series and the date of the proposed payment, and at
the same time the Company shall make arrangements satisfactory to the
Trustee for the deposit with the Trustee of an amount of money equal
to the aggregate amount proposed to be paid in respect of such
Defaulted Interest prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the
persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest
<PAGE> 34
33

which shall be not more than 15 nor less than 5 days prior to the date
of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first class postage prepaid, to each
holder of a Bond of Series at his address as it appears in the
Bond register, not less than 10 days prior to such Special Record
Date. The Trustee may, in its discretion, in the name and at the
expense of the Company, cause a similar notice to be published at
least once in a daily newspaper in the Borough of Manhattan in The
City of New York, but such publication shall not be a condition
precedent to the establishment of such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the persons in whose names the Bonds of Series
(or the respective Bonds of Series evidencing all or a portion of the
same debt) are registered on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2).

(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Bonds of Series
may be listed, and upon such notice as may be required by such
exchange, if after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such payment shall be deemed
practicable by the Trustee.

SECTION 4. The Bonds of Series shall be redeemable at a
redemption price of one hundred per centum (100%) of their principal amount,
together with accrued interest thereon from the interest date to which interest
has previously been paid or made available for payment to the date fixed for
redemption, upon the application of Trust Moneys pursuant to the last paragraph
of Section 9.04, and Sections 9.10 and 9.11 of the Indenture.

Bonds of Series shall be redeemed in accordance with their terms
and Article Eleven of the Indenture.

SECTION 5. In order to prevent the application of the provisions of
Section 9.10 of the Indenture requiring the redemption of Bonds pursuant to
said Section, the Company shall use its best efforts to take such action as may
be necessary so that at no time shall there have been on deposit at all times
during the preceding three years Trust Moneys in an amount in excess of
$25,000.
<PAGE> 35
34

The Company shall, in the manner provided in Sections 9.04A and 12.01
of the Indenture, use its best efforts to make alternative directions and
designations so that it shall not be required by the provisions of said
Sections to purchase or redeem any Bonds of Series .

SECTION 6. No payment by way of principal or interest on any Bond of
Series shall be made if the Trustee shall have received written notice
signed on behalf of the registered holder of such Bond of Series stating
that the same has been waived by such registered holder and such waiver shall
not have been revoked, all in the manner and at the times hereinafter
specified. With respect to principal of any Bond of Series becoming due and
payable on any date, said notice shall be on file with the Trustee at the close
of business on said due date if said due date is a Business Day, or, if said
due date is not a Business Day, then on the Business Day next following said
due date. With respect to any instalment of interest on any Bond of Series
, said notice shall be on file with the Trustee at the close of business on the
date which is the 30th day after the date fixed for payment of such instalment
or, if said 30th day is not a Business Day, on the Business Day next preceding
said 30th day. The above-mentioned notices of waiver may be revoked by written
notice signed and filed with the Trustee in the same manner specified herein
for a notice of waiver.

Unless a waiver is so revoked, (a) at the close of business on the
date when any principal of any Bond of Series with respect to which a
waiver was on file with the Trustee as aforesaid shall become due and payable
or, if said due date is not a Business Day, on the Business Day next following
said due date, such principal shall cease to be payable, and interest shall
thereupon cease to accrue thereon, and (b) at the close of business on the date
which is the 30th day after the date fixed for payment of any instalment of
interest with respect to which a waiver was on file with the Trustee as
aforesaid or, if said 30th day is not a Business Day, on the Business Day next
preceding said 30th day, such instalment shall cease to be payable.

Said notice shall specify the certificate numbers and denominations of
Bonds of Series to which it applies and the principal or instalments of
interest being thereby waived and shall state that the person signing or on
whose behalf it is signed is the registered holder of said Bonds of Series ,
that said Bonds of Series are in said registered holder's possession and,
if required by the Trustee, will be promptly produced for inspection by the
Trustee, that payment of the principal of or instalments of interest specified
therein are thereby waived, that said notice is being delivered to the Trustee
for the purpose of being relied on by the Trustee in the administration of the
trust under the Indenture, that the Trustee may so rely and that the person(s)
signing are thereunto duly authorized.
<PAGE> 36
35

Where the person on whose behalf a notice is given is a corporation,
said notice shall be signed by the President or any Vice President, Cashier,
Controller, Treasurer, Trust Officer or Assistant Vice President, and by an
Assistant Cashier, Assistant Controller, Assistant Treasurer or Assistant Trust
Officer.

The Trustee shall be entitled to rely upon and shall be fully
protected in relying upon written notices delivered to it in accordance with
this Section 6.

SECTION 7. The Company covenants that the annual interest charges on
the Bonds of Series which would be payable except for the waiver of such
payment described in Section 6 hereof shall be included as annual interest
charges upon the Company's Secured Debt (as defined in the Indenture) for the
purpose of any Gross Income Certificate under the Indenture.

SECTION 8. All Bonds of Series shall, upon surrender to the
Trustee at its corporate trust office, be exchangeable for other Bonds of
Series of a different authorized denomination or denominations, as
requested by the holder surrendering the same, but of a like aggregate
principal amount. The Company will execute and the Trustee shall authenticate
and deliver registered Bonds of Series whenever the same shall be required
for any such exchange.

For any exchange of Bonds of Series (other than exchanges
expressly provided in the Indenture to be made at the Company's own expense or
without expense or without charge to Bondholders) or for any transfer of any
Bond of Series , the Company, at its option, may require the payment by the
Bondholder of a sum sufficient to reimburse it for any stamp tax and/or any
other governmental charge incident thereto, but, notwithstanding the provisions
of the last paragraph of Section 2.08 of the Indenture, no other charge shall
be made by the Company for any such exchange or transfer.

The right reserved by the Company in the first paragraph of Section
2.06 of the Indenture not to make any transfers or exchanges of Bonds for a
period of 10 days next preceding any interest payment date shall not be
applicable to transfers or exchanges of Bonds of Series .

Except as hereinabove provided in this Section, exchanges of Bonds of
Series shall be subject to Sections 2.06 and 2.08 of the Indenture.

The Trustee is hereby appointed Registrar of the Bonds of Series
for the purpose of registering and transferring Bonds of Series as provided
in the Indenture.
<PAGE> 37
36

SECTION 9. The form of the Bonds of Series and the certificate of
authentication of the Trustee to be executed thereon are to be substantially in
the following forms, respectively, with such variations as are permitted in the
Indenture for registered Bonds without coupons:

[FORM OF BONDS OF SERIES FACE SIDE]

LONG ISLAND LIGHTING COMPANY

Registered Registered

FIRST MORTGAGE BOND

SERIES % DUE

$ $

NUMBER
<PAGE> 38
37

LONG ISLAND LIGHTING COMPANY, a corporation of the State of New York
(hereinafter called "the Company"), for value received, hereby promises to pay
to or registered assigns, at the
close of business on , , if said due date is a day (herein called a
"Business Day") which is not a day on which banking institutions in The City of
New York are authorized or required by law or executive order to be closed, or,
if said due date is not a Business Day, then on the Business Day next following
said due date, Dollars, and to pay interest
thereon from the date of the initial issuance of the Bonds of this Series, or
from the most recent interest date to which interest has been paid or duly
provided for, at the rate of per centum ( %) per annum,
semi-annually at the close of business on and in each year,
commencing on , or, if said or is not a Business Day, on
the Business Day next following said date, until the principal hereof shall
have become due and payable, and to pay interest on any overdue principal and
(to the extent enforceable under applicable law) on any overdue instalment of
interest at the rate of six per centum (6%) per annum. The principal hereof and
interest hereon shall be payable at the office or agency of the Company in the
Borough of Manhattan in The City of New York, in any coin or currency of the
United States of America which at the time of payment shall be legal tender for
public and private debts.

The provisions of this Bond are continued on the reverse hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.

This Bond shall not be valid until the certificate of authentication
hereon shall have been signed by the Trustee under the Indenture hereinafter
mentioned.
<PAGE> 39
38

IN WITNESS WHEREOF, LONG ISLAND LIGHTING COMPANY has caused this Bond
to be executed in its corporate name with the facsimile signature of its
President or one of its Vice Presidents and its corporate seal, or a facsimile
thereof, to be impressed or imprinted hereon, attested by the facsimile
signature of its Secretary or of an Assistant Secretary.

Dated:

LONG ISLAND LIGHTING COMPANY

By
-------------------------------
President

Attest:
- ----------------------------------------------
Secretary

[Form of the Trustee's Certificate of
Authentication]

This is one of the Bonds, of the Series designated therein, described
in the within mentioned Indenture.

IBJ SCHRODER BANK & TRUST COMPANY, AS
TRUSTEE

By
-------------------------------
Authorized Officer
<PAGE> 40
39

[FORM OF BOND OF SERIES -- REVERSE SIDE]

LONG ISLAND LIGHTING COMPANY

FIRST MORTGAGE BOND

SERIES % DUE

(Continued)

The interest so payable, and punctually paid or duly provided for, on
any interest date will, as provided in the Indenture hereinafter mentioned, be
paid to the person in whose name this Bond (or any Bond or Bonds evidencing all
or a portion of the same debt) is registered at the close of business on the
Regular Record Date for such interest which shall be the day of
or , as the case may be (whether or not a Business Day), next preceding
such interest date. Any such interest not punctually paid or duly provided for
shall forthwith cease to be payable to the registered holder on such Regular
Record Date, and may be paid to the person in whose name this Bond (or any Bond
or Bonds evidencing all or a portion of the same debt) is registered at the
close of business on a Special Record Date for the payment of such defaulted
interest to be fixed by the Trustee, notice whereof shall be given to the
registered holder hereof not less than 10 days prior to such Special Record
Date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which this Bond may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided for in the Indenture hereinafter mentioned.

If an Event of Default, as defined in the Indenture hereinafter
mentioned, shall occur, the principal of this Bond may become or be declared
due and payable, in the manner and with the effect provided in the Indenture
hereinafter mentioned.

This Bond is one of an authorized issue of Bonds of the Company known
as its "First Mortgage Bonds", not limited in principal amount except as in the
Indenture hereinafter mentioned provided, issued and to be issued in one or
more series under, and all equally and ratably secured (except as any sinking
or other fund may afford additional special security for the Bonds of any
particular series) by, an Indenture of Mortgage and Deed of Trust dated as of
September 1, 1951, executed by the Company to City Bank Farmers Trust Company
(subsequently converted into First National City Trust Company, which was
merged into First National City Bank, now named Citibank, N.A.), as Trustee
(hereinafter referred to as "the Trustee" which term includes any successor
trustee) (herein, together
<PAGE> 41
40

with all indentures supplemental thereto, called "the Indenture") to which
Indenture reference is hereby made for a description of the properties thereby
mortgaged and conveyed, the nature and extent of the security, the rights of
the holders of said Bonds and of the Trustee and of the Company in respect of
such security, and the terms upon which said Bonds are and are to be
authenticated and delivered.
As provided in the Indenture, said Bonds are issuable in series which
may vary as to maturity, interest and otherwise as in the Indenture provided or
permitted. This Bond is one of a series entitled "First Mortgage Bonds, Series
% Due " created by a Supplemental Indenture dated as of , as
provided for in the Indenture.

As provided in, and to the extent permitted by, the Indenture, the
rights and obligations of the Company and of the holders of said Bonds may be
modified by the Company with the consent of the holders of not less than
seventy-five per centum (75%) in principal amount of all the Bonds of all
series then outstanding which are affected by such modification (excluding
Bonds disqualified from voting by reason of the Company's interest therein as
provided in the Indenture). The Indenture provides, among other things, that,
without the consent of the holder hereof, no such modification shall effect the
reduction, or the extension of the stated time of payment, of the principal
hereof, or of the interest hereon, or permit the creation of any lien on the
properties so mortgaged and conveyed prior to or on a parity with the lien of
the Indenture (except as therein expressly permitted) or deprive the holder
hereof of the lien created by the Indenture on said properties. The holders of
not less than sixty-six and two-thirds per centum (662/3%) in principal amount
of all Bonds of all series then outstanding (excluding Bonds disqualified as
aforesaid) may on behalf of the holders of all such Bonds waive any past
default under the Indenture and its consequences, except a default in the
payment of the principal of, or premium or interest on, any of the Bonds as and
when the same shall become due by the terms of such Bonds or a call for
redemption.

No recourse shall be had for the payment of the principal of or the
interest or premium on this Bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture, against any incorporator, stockholder,
director or officer, as such, past, present or future, of the Company or of any
predecessor or successor corporation, either directly or through the Company or
any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or by any legal or equitable proceeding or otherwise howsoever; all
such liability being, by the acceptance hereof and as a part of the
consideration for the issuance hereof, expressly waived and released by every
holder hereof; provided, however, that nothing herein or in the Indenture
contained shall be taken to prevent recourse to and the enforcement of the
liability, if any, of any stockholder or subscriber to capital stock upon or in
respect of shares of capital stock not fully paid.
<PAGE> 42
41

This Bond is transferable by the registered owner hereof, in person or
by attorney authorized in writing, at the corporate trust office of the
Trustee, and at such other offices or agencies as may be required to be
maintained for such purpose to comply with the rules of any securities exchange
on which the Bonds of this Series may at the time be listed, upon surrender of
this Bond, and upon any such transfer of a new Bond or Bonds, of the same
series for the same aggregate principal amount, will be issued to the
transferee in exchange herefor, without payment of any charge other than stamp
taxes and other governmental charges incident thereto. The Company and the
Trustee may deem and treat the person in whose name this Bond is registered as
the absolute owner hereof, whether or not this Bond shall be overdue, for the
purpose of receiving payment as herein provided and for all other purposes.

The Bonds of this Series are issuable as registered Bonds without
coupons in denominations of $1,000 and/or any multiple thereof authorized by
the Company. As provided in the Indenture, Bonds of this Series are
exchangeable for other Bonds of this Series of a different authorized
denomination or denominations, as requested by the holder surrendering the
same, without payment of any charge other than stamp taxes and other
governmental charges incident thereto.

The Company shall not be required to make any transfer or exchange of
this Bond for a period of 10 days next preceding the mailing of notice of
redemption of any Bonds of this Series.

The Bonds of this Series are subject to redemption upon prior notice
given as provided in the Indenture, upon payment of one hundred per centum
(100%) of the principal amount so redeemed together with interest accrued
thereon to the date fixed for redemption in the event that all or substantially
all of the Electric Property or all or substantially all of the Gas Property of
the Company shall be released or substantially all of the Trust Estate (with
certain exceptions) shall be taken by eminent domain or sold in anticipation of
such taking.

Bonds for whose redemption and payment provision is made in accordance
with the Indenture shall thereupon cease to be entitled to the lien of the
Indenture and shall cease to bear interest from and after the date fixed for
redemption.
<PAGE> 43
42

[END OF REVERSE SIDE OF FORM OF BOND OF SERIES ]

ARTICLE II

THE TRUSTEE

The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Supplemental Indenture
or the due execution hereof by the Company; or for or in respect of the
recitals and statements contained herein, all of which recitals and statements
are made solely by the Company.

ARTICLE III

MISCELLANEOUS PROVISIONS

SECTION 1. Except insofar as herein otherwise expressly provided, all
the provisions, terms and conditions of the Original Indenture as heretofore
supplemented shall be deemed to be incorporated in, and made a part of, this
Supplemental Indenture; and the Original Indenture as heretofore
supplemented by this Supplemental Indenture is in all respects
ratified and confirmed; and the Original Indenture as heretofore supplemented
and this Supplemental Indenture shall be read, taken and construed as one and
the same instrument.

SECTION 2. This Supplemental Indenture may be executed in
any number of counterparts, and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts, or as many of
them as the Company and the Trustee shall preserve undestroyed, shall together
constitute but one and the same instrument.
<PAGE> 44
43

IN WITNESS WHEREOF, LONG ISLAND LIGHTING COMPANY has caused this
Supplemental Indenture to be signed in its corporate name by its President or a
Vice President and its corporate seal to be hereunto affixed and attested by
its Secretary or an Assistant Secretary and, in token of its acceptance of the
trusts created hereunder, IBJ SCHRODER BANK & TRUST COMPANY, as Trustee as
aforesaid, has caused this Supplemental Indenture to be signed in its
corporate name by a Vice President or an Assistant Vice President and its
corporate seal to be affixed and attested by a Secretary or an Assistant
Secretary, all as of the day and year first above written.

LONG ISLAND LIGHTING COMPANY

[CORPORATE SEAL] BY
-------------------------

Attest:

- ----------------------------

IBJ SCHRODER BANK
& TRUST COMPANY,
as Trustee as aforesaid

[CORPORATE SEAL] By
-------------------------

Attest:

- ----------------------------

<PAGE> 45
44

STATE OF NEW YORK)
) SS.
COUNTY OF NASSAU )

On the day of , in the year , before me personally came
, to me known, who being by me duly sworn, did depose and say that he resides
at , New York ; that he is a of LONG ISLAND
LIGHTING COMPANY, one of the corporations described in and which executed the
above instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his
name thereto by like order.

---------------------
NOTARY PUBLIC

STATE OF NEW YORK)
) SS.
COUNTY OF )

On the day of , in the year , before me personally came
, to me known, who being by me duly sworn, did depose and say that she resides
at ; that she is a
of IBJ SCHRODER BANK & TRUST COMPANY, one of the corporations described in and
which executed the above instrument; that she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that she signed her name thereto by like authority.

---------------------
NOTARY PUBLIC

<PAGE> 46
44

STATE OF NEW YORK)
) SS.
COUNTY OF NASSAU )

----------------------
NOTARY PUBLIC

STATE OF NEW YORK)
) SS.
COUNTY OF )

----------------------
NOTARY PUBLIC

<PAGE> 47
45

RECORDING DATA

The Supplemental Indenture to the General and Refunding
Indenture was filed for record and recorded in the State of New York
on , as follows: In the Office of the County Clerk of Nassau
County in Liber of Mortgages, Page ; in the Office of the County
Clerk of Suffolk County in Liber of Mortgages, Page ; in the
Office of the Registrar of Suffolk County as Document No. ; in
the Office of the Register of the City of New York for the County of
Queens with Document No. in Reel of Records, Page ; and
in the Office of the County Clerk of Oswego County on ,
in Book of Mortgages, Page .
<PAGE> 48
================================================================================

LONG ISLAND LIGHTING COMPANY

and

[CHEMICAL BANK/STATE STREET BANK
AND TRUST COMPANY]

as Trustee

--------------------

DEBENTURES

Series Due
-----% ----

--------------------

Supplemental Indenture
----------

Dated as of , 199--
----------

------------------

================================================================================
<PAGE> 49
---------- SUPPLEMENTAL INDENTURE, dated as of ----------,
199-- (herein called the "---------- Supplemental Indenture"), between LONG
ISLAND LIGHTING COMPANY, a corporation duly organized and existing under the
laws of the State of New York (hereinafter called the "Company"), party of the
first part, and [CHEMICAL BANK/STATE STREET BANK AND TRUST COMPANY], a
corporation duly organized and existing under the laws of the [State of New
York/State of Massachusetts (the successor in interest to the Connecticut Bank
and Trust Company, National Association)], as Trustee under the Original
Indenture referred to below (hereinafter called the "Trustee"), party of the
second part.
WITNESSETH:
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an Indenture, dated as of [November 1, 1992/November 1, 1986]
(hereinafter called the "Original Indenture"; the Original Indenture, as
supplemented or amended from time to time, including by this ----- Supplemental
Indenture, is hereinafter sometimes referred to as the "Indenture"), to provide
for the issuance from time to time of certain of its unsecured debentures,
notes or other evidences of indebtedness (hereinafter called the "Securities"),
the form and terms of which are to be established as set forth in Sections 201
and 301 of the Original Indenture; and
WHEREAS, Section 901 of the Original Indenture provides, among
other things, that the Company and the Trustee
<PAGE> 50
2

may enter into indentures supplemental to the Original Indenture for, among
other things, the purpose of establishing the form and terms of the Securities
of any series as permitted in Sections 201 and 301 of the Original Indenture;
and
WHEREAS, the Company desires to create a series of the
Securities in an aggregate principal amount of up to $------------ to be
designated the "Debentures, -----% Series Due ----" (the "Debentures") and all
action on the part of the Company necessary to authorize the issuance of the
Debentures under the Original Indenture and this ---------- Supplemental
Indenture has been duly taken; and
WHEREAS, all acts and things necessary to make the Debentures
when executed by the Company and completed, authenticated and delivered by the
Trustee as in the Original Indenture and this ---------- Supplemental Indenture
provided, the valid and binding obligations of the Company and to constitute
these presents a valid and binding supplemental indenture and agreement
according to its terms, have been done and performed;
NOW, THEREFORE, THIS ---------- SUPPLEMENTAL INDENTURE
WITNESSETH:

That in consideration of the premises and of the acceptance and
purchase of the Debentures by the holders thereof,
<PAGE> 51
3

and of the acceptance of this trust by the Trustee, the Company covenants and
agrees with the Trustee, for the equal benefit of holders of the Debentures, as
follows:

ARTICLE ONE
DEFINITIONS

The use of the terms and expressions herein is in accordance
with the definitions, uses and constructions contained in the Original
Indenture and the form of Debenture attached hereto as Exhibit A.

ARTICLE TWO
TERMS AND ISSUANCE OF THE DEBENTURES

Section 201. Issue of Debentures. A series of Securities
which shall be designated the "Debentures, -----% Series Due ----" shall be
executed, authenticated and delivered in accordance with the provisions of, and
shall in all respects be subject to, the terms, conditions and covenants of the
Original Indenture and this ---------- Supplemental Indenture (including the
form of Debenture set forth in Exhibit A hereto). The aggregate principal
amount of Debentures of the series created hereby which may be authenticated
and delivered under the Indenture shall not, except as permitted by the
provisions of the Indenture, exceed $------------.
<PAGE> 52
4

Section 202. Form of Debentures; Incorporation of Terms.
The form of the Debentures shall be substantially in the form of Exhibit A
attached hereto, the terms of which are herein incorporated by reference and
which are part of this ---------- Supplemental Indenture.
Section 203. Place of Payment. The Place of Payment will
be initially the office of [Chemical Bank in New York City which, at the date
hereof, is located at 450 West 33rd Street, New York, New York 10001/State
Street Bank and Trust Company, National Association in New York City which, at
the date hereof, is located at 61 Broadway, Concourse Level, 15th Floor, New
York, New York 10006.]
ARTICLE THREE
MISCELLANEOUS

Section 301. Execution as Supplemental Indenture. This
- ---------- Supplemental Indenture is executed and shall be construed as an
indenture supplemental to the Original Indenture and, as provided in the
Original Indenture, this ---------- Supplemental Indenture forms a part
thereof.
Section 302. Conflict With Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust
<PAGE> 53
5

Indenture Act of 1939, as amended, such imposed duties shall control.
Section 303. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the construction
hereof.
Section 304. Successors and Assigns. All covenants and
agreements in this ---------- Supplemental Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
Section 305. Separability Clause. In case any provision
in this ---------- Supplemental Indenture or in the Debentures shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 306. Benefits of Supplemental
Indenture. Nothing in this ---------- Supplemental Indenture or in the
Debentures, express or implied, shall give to any person, other than the
parties hereto and their successors hereunder and the holders, any benefit or
any legal or equitable right, remedy or claim under this ----------
Supplemental Indenture.
Section 307. Governing Law. This ---------- Supplemental
Indenture and each Debenture shall be deemed to be a contract made under the
laws of the State of New York, and for
<PAGE> 54
6

all purposes shall be governed by and construed in accordance with the laws of
said State.
Section 308. Execution and Counterparts. This ----------
Supplemental Indenture may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
<PAGE> 55
7

IN WITNESS WHEREOF, the parties hereto have caused this
- ---------- Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, all as of the day and year
first above written.

[Corporate Seal] LONG ISLAND LIGHTING COMPANY

By: ------------------------
[Name:]
[Title:]

Attest:

- ----------------------
[Title:]

[Corporate Seal] [CHEMICAL BANK/STATE STREET BANK
AND TRUST COMPANY], as Trustee

By: ------------------------
[Name:]
[Title:]

Attest:

- ----------------------
[Title:]
<PAGE> 56
STATE OF --------- )
) ss.:
COUNTY OF -------- )

On the ---- day of ----------, 199--, before me personally came
- -----------------, to me known, who, being by me duly sworn, did depose and say
that he is a ------------------ of Long Island Lighting Company, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.

--------------------------------
Notary Public

STATE OF ------------ )
) ss.:
COUNTY OF ----------- )

On the ---- day of -----------, 199--, before me personally came
- -----------------, to me known, who, being by me duly sworn, did depose and say
that he is a --------------------- of Chemical Bank, one of the corporations
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation, and that he signed his name thereto by like authority.

--------------------------------
Notary Public
<PAGE> 57
EXHIBIT A

[Form of Face of Security]

LONG ISLAND LIGHTING COMPANY

DEBENTURE

------% Series Due ----

No. ---------- $----------

LONG ISLAND LIGHTING COMPANY, a corporation duly organized and
existing under the laws of the State of New York (herein called the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to
- ---------------------- -----------------------------------, or registered
assigns, the principal sum of ---------------------------------- Dollars on
- -------------- [If the Security is to bear interest prior to Maturity, insert
- --, and to pay interest thereon from the date of the initial issuance or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on -------------- and -------------- in each year,
commencing --------------, at the rate per annum provided in the title hereof,
until the principal hereof is paid or made available for payment [If
applicable, insert --, and, subject to the terms of the Indenture, at the rate
per annum provided in the title hereof on any overdue principal and premium, if
any, and (to the extent that the payment of such interest shall be legally
enforceable) on any overdue installment of interest]. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest payment, which shall be the
- -------------- or -------------- (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, in which event notice whereof
shall be given to Holders of Securities of this series not less than 10
<PAGE> 58
2

days prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said
Indenture].

[If the Security is not to bear interest prior to Maturity,
insert -- The principal of this Security shall not bear interest except in the
case of a default in payment of principal or premium, if any, upon
acceleration, upon redemption or at Stated Maturity and in such case the
overdue principal and premium, if any, of this Security shall bear interest at
the rate of [yield to maturity]% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date
of such default in payment to the date payment of such principal and premium,
if any, has been made or duly provided for. Interest on any overdue principal
and premium, if any, shall be payable on demand. Any such interest on any
overdue principal and premium, if any, that is not so paid on demand shall bear
interest at the rate of [yield to maturity]% per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such demand for payment to the date payment of such interest has
been made or duly provided for, and such interest shall also be payable on
demand.]

Payment of the principal of (and premium, if any) and
interest, if any, on this Security will be made at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.

Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof, or an Authenticating
Agent, by manual signature of one of its authorized officers, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
<PAGE> 59
3

IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.

Dated: ------------

[Seal] LONG ISLAND LIGHTING COMPANY

By: ------------------------------
[Title:]

[Form of Trustee's Certificate of Authentication]

This is one of the Securities of the series designated herein
and referred to in the within-mentioned Indenture.

[CHEMICAL BANK/STATE STREET BANK
AND TRUST COMPANY], as Trustee

By: ----------------------------------
[Title:]
<PAGE> 60
4

[Form of Reverse of Security]

LONG ISLAND LIGHTING COMPANY

DEBENTURE

------% Series Due ----

This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of [November 1, 1992/November 1,
1986] (herein called the "Indenture"), between the Company and Chemical Bank,
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof, limited in aggregate principal
amount to $-----------.

[If applicable, insert -- [The Securities of this series are
not subject to any sinking fund.] [The Securities of this series may not be
redeemed at the option of the Company prior to Maturity.]]

[If applicable, insert -- [The Securities of this series are
subject to redemption upon not less than 30 nor more than 60 days' notice by
mail to the Holders of such Securities at their addresses in the Security
Register for such series, [if applicable, insert -- (1) on ---------- in any
year commencing with the year ----- and ending with the year ----- through
operation of the sinking fund for this series at a Redemption Price equal to
100% of the principal amount, and (2)] at any time [on or after ----------,
19--], as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount):

If redeemed [on or before ------------, ----%, and if
redeemed] during the 12-month period beginning -------------,

<TABLE>
<S> <C> <C> <C>
Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
</TABLE>
<PAGE> 61
5

and thereafter at a Redemption Price equal to ----% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued and unpaid
interest to the Redemption Date, but interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.]

[If applicable, insert -- [The Securities of this series are
subject to redemption upon not less than 30 nor more than 60 days' notice by
mail to the Holders of such Securities at their addresses in the Security
Register for such series, (1) on ---------- in any year commencing with the
year ----- and ending with the year ----- through operation of the sinking fund
for this series at the Redemption Prices for redemption through operation of
the sinking fund (expressed as percentages of the principal amount) set forth
in the table below, and (2) at any time [on or after ----------, 19--], as a
whole or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below:

If redeemed during the 12-month period beginning
- --------------,

<TABLE>
<S> <C> <C>
Redemption Price
For Redemption Redemption Price for
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ----------------- ----------------------

</TABLE>

and thereafter at a Redemption Price equal to ----% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued and unpaid interest to the Redemption
Date, but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at
<PAGE> 62
6

the close of business on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture.]

[Notwithstanding the foregoing, the Company may not, prior to
- -------------, redeem any Securities of this series as contemplated by [Clause
(2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than ----% per annum.]

[The sinking fund for this series provides for the redemption
on ------------ in each year beginning with the year ---- and ending with the
year ---- of [not less than] ------------ [("mandatory sinking fund") and, at
the option of the Company, not more than ------------] aggregate principal
amount of Securities of this series. [Securities of this series acquired or
redeemed by the Company otherwise than through [mandatory] sinking fund
payments may be credited against subsequent [mandatory] sinking fund payments
otherwise required to be made in the order in which they become due.]]

[In the event of redemption of this Security in part only, a
new Security or Securities of this series for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]

Interest payments for this Security will be computed on the
basis of a 360-day year of twelve 30-day months. If an Interest Payment Date
falls on a day that is not a Business Day, such Interest Payment Date will be
the following day that is a Business Day.

In certain circumstances described in the Indenture, the
Company's obligations in respect of the Securities of this series or in respect
of certain covenants made for the benefit of Securities of this series, may be
discharged prior to payment, upon the deposit with the Trustee of cash and/or
U.S. Government Obligations in the required amount and upon compliance with
certain other provisions of the Indenture.

[If the Security is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.]
<PAGE> 63
7

[If the Security is an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, an amount of principal of the Securities of this
series (the "Acceleration Amount") may be declared due and payable in the
manner and with the effect provided in the Indenture. In case of a declaration
of acceleration on or before -----------, ---- or on ------------- in any year,
the Acceleration Amount per -------- principal amount at Stated Maturity of the
Securities shall be equal to the amount set forth in respect of such date
below:

Acceleration Amount
per --------
principal amount
Date of declaration at Stated Maturity
- ------------------- -------------------

and in case of a declaration of acceleration on any other date, the
Acceleration Amount shall be equal to the Acceleration Amount as of the next
preceding date set forth in the table above, plus accrued original issue
discount (computed in accordance with generally accepted accounting principles
in effect on -----------) from such next preceding date to the date of
declaration at the yield to maturity. For the purpose of this computation the
yield to maturity is ----%. Upon payment (i) of the Acceleration Amount so
declared due and payable and (ii) of interest on any overdue principal, overdue
premium, if any, and overdue interest (in each case to the extent that the
payment of such interest shall be legally enforceable), all of the Company's
obligations in respect of the payment of the principal of, premium, if any, and
interest, if any, on the Securities of this series shall terminate.]

The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of 66-2/3% in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company
<PAGE> 64
8

with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest, if any, on this Security at the times, place and
rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of (and premium, if any) and interest, if any, on this Security are
payable, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed
by, the Holder hereof or his attorney duly authorized in writing, and thereupon
one or more new Securities of this series, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated
transferee or transferees.

The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series of a different
authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
<PAGE> 65
9

No recourse for the payment of the principal of (and premium,
if any) or interest, if any, on this Security, or for any claim based hereon or
otherwise in respect hereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in the Indenture or any indenture
supplemental thereto or in any Security, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.

This Security shall be governed by and construed in accordance
with the laws of the State of New York.

All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

<PAGE> 1
Exhibit 5

[LONG ISLAND LIGHTING COMPANY LETTERHEAD]

April 4, 1994

Long Island Lighting Company
175 East Old Country Road
Hicksville, New York 11801

Re: Debt and Equity Securities

Gentlemen:

As General Counsel for Long Island Lighting Company (the "Company"), I
am familiar with the proposed issuance by the Company of General & Refunding
Bonds, Debentures, Preferred Stock and Common Stock in the aggregate principal
amount of up to $803,550,000 (the "Securities"). This amount includes
$299,550,000 of Securities previously registered and unissued under
Registration No. 33-60744 and $4,000,000 of General and Refunding Bonds
previously registered and unissued under Registration No. 33-45834. In
connection with the proceedings before the Securities and Exchange Commission
with respect hereto, I submit this opinion and hereby consent to its use as
Exhibit 5 to the Shelf Registration Statement on Form S-3 for the issuance of
up to an additional $500,000,000 of Securities proposed to be filed by the
Company under the Securities Act of 1933, as amended (the "New Registration
Statement"), and to the use of my name herein and in the Prospectus forming a
part thereof (the "Prospectus").

I have examined and am familiar with (i) the Restated Certificate of
Incorporation and By-laws of the Company, the Registration Statement and the
Prospectus and (ii) with the Petitions dated October 7, 1991, January 22, 1993,
and January 6, 1994 that have been filed by the Company with the Public Service
Commission of the State of New York (the "PSC") requesting authority to sell
and issue the Securities (the "Petitions"); and I have reviewed the proceedings
taken with respect to the authorization, issuance and sale of the Securities.

Based upon the foregoing and upon my general familiarity with the
affairs of the Company, I advise you that in my opinion:

I. The Company is a corporation duly organized and validly existing
under the laws of the State of New York.

II. No State regulatory body or agency, other than the PSC, has
jurisdiction over the transactions proposed by the Company or any part thereof.
<PAGE> 2
2

III. No federal commission or agency other than the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, has jurisdiction over
the transactions proposed by the Company or any part thereof.

IV. All action necessary to make valid the sale and issuance of the
Securities will have been taken when (a) the New Registration Statement
relating thereto (and any amendments, post-effective amendments, the Prospectus
or any prospectus supplements) shall have become effective; (b) orders have
been issued by the PSC authorizing the relief requested in the Petition; (c)
the Board of Directors of the Company shall have taken appropriate action to
authorize the execution, delivery, issuance and sale of the Securities; (d) if
the Securities are issued as General and Refunding Bonds, the proposed
Supplemental Indenture to the G&R Indenture shall have been qualified under the
Trust Indenture Act of 1939 and duly executed and delivered; (e) if the
Securities are issued as Debentures, the proposed Supplemental Indenture to the
appropriate Debenture Indenture shall have been qualified under the Trust
Indenture Act of 1939 and duly executed and delivered; (f) the Securities shall
have been executed by the Company, and, if applicable, authenticated by the
Trustee and delivered for value; (g) if the Securities are issued as Preferred
Stock, the Company shall have filed with the State of New York, a Certificate
of Amendment to the Company's Restated Certificate of Incorporation stating the
number, designation, relative rights, preference and limitations of such series
of the Preferred Stock with the consent and approval of the PSC endorsed
thereunder; and (h) if the Securities are issued as either Preferred Stock or
Common Stock, the Company shall have received the full consideration (not less
than the par value thereof) for each share.

V. When the foregoing steps shall have been taken with respect to the
Securities and the Securities have been sold, the Securities will be legally
issued, fully paid and non-assessable and will constitute legal, valid and
binding obligations of the Company enforceable in accordance with their terms.

Very truly yours,

/s/ ROBERT J. GREY

Robert J. Grey
General Counsel

/jc
[ex5shelf.ds]

<PAGE> 1
EXHIBIT 12 (a)

LONG ISLAND LIGHTING COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In Thousands of Dollars)

<TABLE>
<CAPTION>
For the Year Ended December 31,
--------------------------------------------------------------------------
1993 1992 1991 1990 1989
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Income/(Loss)
per Statement of Income $296,563 $301,974 $305,538 $319,637 a ($95,803)

Less:
Equity in earnings/loss of less
than 50% owned subsidiary
companies (731) (470) 87 86 80

Add:
Distributed income of less
than 50% owned subsidiary
companies 58 87 58 58 58
----------- ----------- ----------- ----------- -----------
297,352 302,531 305,509 319,609 (95,825)

Add:
Federal income tax 172,276 160,962 181,653 183,281 (1,037,412)

Appropriate portion of rentals 4,552 3,504 2,751 2,343 2,730

Interest on long term-debt 466,538 450,621 472,974 467,700 453,267

Amortization of debt discount,
expense and premium 52,863 41,950 30,186 24,231 14,743

Other interest 14,671 20,276 20,656 16,379 17,040
----------- ----------- ----------- ----------- -----------
NET INCOME/(LOSS) AS ADJUSTED $1,008,252 $979,844 $1,013,729 $1,013,543 a ($645,457)
=========== =========== =========== =========== ===========

Fixed Charges:

Appropriate portion of rentals $4,552 $3,504 $2,751 $2,343 $2,730

Interest on long term-debt 466,538 450,621 472,974 467,700 453,267

Amortization of debt discount,
expense and premium 52,863 41,950 30,186 24,231 14,743

Other interest 14,671 20,276 20,656 16,379 17,040
----------- ----------- ----------- ----------- -----------
Total $538,624 $516,351 $526,567 $510,653 $487,780
=========== =========== =========== =========== ===========
Ratio of earnings to fixed
charges 1.87 1.90 1.93 1.98 b
</TABLE>

- ----------------------
a Before cumulative effect of accounting change for unbilled gas revenue.

b For the year ended December 31, 1989 earnings were inadequate to cover
fixed charges. To attain a one-to-one coverage earnings were deficient by
approximately $1.1 billion, primarily due to the discontinuance of
accruing AFC and the loss in June 1989 resulting from the effectiveness
of the 1989 Settlement and the approval of the Class Settlement.

<PAGE> 1

EXHIBIT 12 (b)

LONG ISLAND LIGHTING COMPANY
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(In thousands of Dollars)