<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>5
<FILENAME>file005.txt
<DESCRIPTION>EX A-4 BY-LAWS OF BHE
<TEXT>

Exhibit A-4

                                     BY-LAWS
                                       OF

                          BANGOR HYDRO-ELECTRIC COMPANY





































                                        As amended through June 16, 1994



<PAGE>





                                     BY-LAWS

                                       OF

                          BANGOR HYDRO-ELECTRIC COMPANY


                         ARTICLE I. Location of Offices

     The principal office of this corporation  shall be at such place within the
State of Maine as the Board of Directors  may from time to time  designate,  and
the Company shall have and maintain such other offices as the Board of Directors
may deem expedient.

                           ARTICLE II. Corporate Seal

     The corporation shall have a seal with the name of the Company in a circle,
and the word  "Seal" or such  suitable  device as the Board of  Directors  shall
determine, in the center of the space thus enclosed. The seal of the corporation
upon a certificate of stock,  corporate bond or other corporate  obligations for
the  payment  of  money  may be  facsimile,  engraved  or  printed,  where  such
certificate  is signed by a Transfer Agent or Transfer Clerk and by a Registrar,
and where such bond or obligation is certified by a Trustee.

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<PAGE>


                      ARTICLE III. Meetings of Stockholders

     Section 1. The  Annual  Meeting  of the  Stockholders  shall be held on the
fourth Tuesday in April of each year, or within sixty days thereafter, upon such
date as the Board of  Directors  of the  Company may  designate,  in the City of
Bangor,  Maine,  or at such  other  place  within  the  State of Maine as may be
designated by the Board of Directors of the Company, for the election of a Board
of Directors and for the  transaction  of any other business that may be brought
before such  meeting.  In case of the failure for any cause to hold such meeting
and election on said fourth Tuesday in April or within sixty days  thereafter as
above  provided,  said  election  may be  held  at any  special  meeting  of the
Stockholders called for the purpose.

     Section 2. Unless  waived in the manner  prescribed  by the Maine  Business
Corporation  Act, written notice of the Annual Meeting or any special meeting of
Stockholders  stating  the place,  day and hour  thereof,  shall be given in the
manner prescribed by the Maine Business Corporation Act.

     Section 3. Special  meetings of the  Stockholders may be called at any time
by order of the Board of Directors or by written  direction of a majority of the
Board of Directors,  or of Stockholders  representing not less than one-fifth of
the capital stock of the Company issued and outstanding.  Such meetings shall be
in Bangor,  Maine,  or at such other  place  within the State of Maine as may be
designated by the Board of Directors of the Company.

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     Section 4. The holders of one third of the stock of the Company  issued and
outstanding  shall  constitute a quorum for the  transaction  of business at any
meeting, but a less number may convene any meeting and may adjourn the same from
time to time until a quorum shall be present,  and no notice of such adjournment
shall be  necessary.  If  Stockholders  are to consider the number of authorized
shares of common  stock at any meeting,  50% of the stock of the Company  issued
and outstanding shall constitute a quorum for the transaction of such business.

     Section 5. Stockholders entitled to vote at any meeting of Stockholders may
vote  either in person or by proxy  granted  not more than sixty days before the
meeting, the date of which shall be named therein, and said proxies shall not be
valid after a final adjournment thereof. Stockholders may also be represented by
a general  power of  attorney  produced  at the  meeting  and valid  until it is
revoked. At any meeting of Stockholders, each holder of Common Stock entitled to
vote thereat shall be entitled to cast  one-twelfth  of a vote for each share of
Common Stock held,  and each holder of Preferred  Stock entitled to vote thereat
shall be entitled to cast one vote for each share of such Preferred  Stock held.
Except as may  otherwise be required by law or by the Articles of  Incorporation

                                       3

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and except as the Board of  Directors  may  otherwise  fix and  determine in the
By-Laws with respect to any class or series of  Preferred  Stock having  special
voting powers, a majority of the total votes cast at any meeting of Stockholders
shall be sufficient for the adoption or rejection of any question presented.

     Section 6. The stock  transfer  books of the  Company  may be closed by the
order of the Board of  Directors  for such  period,  not to exceed  sixty  days,
previous to any meeting of the  Stockholders,  or previous to the payment of any
dividend upon the stock of the Company,  or for any other purpose,  as the Board
may  determine,  during  which  time no  transfer  of stock on the  books of the
Company  shall be made;  and said books shall be re-opened the day following the
date fixed for such  meeting  or for the  payment  of such  dividend  or for the
accomplishment of such purpose.

     The Board of Directors may from time to time determine the date as of which
Stockholders  shall be  entitled  to  notice  of and to vote at any  regular  or
special meeting of the Stockholders,  but such date shall not be more than sixty
days nor less than ten days prior to the date upon  which such  meeting is to be
held. The date so determined shall be specified in the notice of the meeting.

                                       4
<PAGE>



                        ARTICLE IV. Election of Directors

     Section  1.  Directors  shall be  elected  in the  manner  set forth in the
Articles of Incorporation. Directors must be and remain Stockholders.

                        ARTICLE V. Meetings of Directors

     Section 1. Regular meetings of the Board of Directors shall be held at such
times and places as may from time to time be fixed by  resolution  of the Board.
No notice shall be required for regular meetings,  the times and places of which
have been fixed by resolution. Special meetings of the Board of Directors may be
held at any time or place upon the call of the Clerk or  Assistant  Clerk  under
the direction of the Chairman of the Board, the President,  or any two Directors
then in office,  of which  meetings  reasonable  notice in writing or  otherwise
shall be  given to each  director  or sent to his or her  residence  or place of
business,  the time and place for holding the  meeting to be  designated  in the
notice.

     Unless otherwise  indicated in the notice calling the meeting,  any and all
business may be transacted at any such special meeting.

     Section 2. A meeting of the Board of Directors for organization may be held
without notice  immediately  after the meeting of the Stockholders at which such

                                       5

<PAGE>



Board of Directors is elected,  at which meeting  officers of the Company may be
chosen,  but no other business shall be transacted,  unless every director shall
be present.

     Section 3. At the  meetings  of the Board of  Directors,  a majority  shall
constitute a quorum,  but a less number may convene and adjourn any such meeting
from time to time until a quorum is present, of which adjournment no notice need
be given.  All  questions  coming before any meeting of a Board of Directors for
action  shall be  decided by a majority  vote of the  Directors  present at such
meeting, unless otherwise provided in these By-Laws.

                              ARTICLE VI. Officers

     Section  1.  Directors  shall  elect  from  their own number a Chair of the
Board;  shall appoint a President,  a Treasurer and a Clerk; and may appoint one
or more Vice  Presidents  and such  other  officers  as the  Directors  may deem
necessary or  desirable in order to conduct the business of the Company.  If the
offices  of the  Chair of the  Board  and the  President  are not  vested in one
person, the Directors shall designate one of them as the chief executive officer
of  the  Company.  In the  absence  of a  valid  designation  of  the  foregoing

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functions,  the President shall be the chief executive  officer.  If the offices
and functions of the Chair of the Board,  the President and the chief  executive
officer are vested in one person, then in the event of accident or disability or
other  circumstances  that render such person incapable of performing his or her
duties,  the Chair of the Executive  Committee of the Board of Directors (or, if
there be no such Chair,  the  Director  of the longest  tenure of service on the
Board  who is not an  employee  of the  Company)  shall  assume  the  duties  as
temporary,  acting  Chair of the Board,  and he or she shall  promptly  appoint,
subject  to  ratification  by the full  Board at its  earliest  convenience,  an
officer of the Company to be the temporary,  acting chief executive officer. The
services  of these  temporary  officers  shall  continue  until the Chair of the
Board,  President and chief executive  officer has resumed his or her duties, or
until the Directors shall otherwise determine.

     If the offices and  functions of the Chair of the Board,  the President and
the chief executive  officer are not vested in one person,  then in the event of
accident,  disability  or other  circumstances  that render the chief  executive
officer  incapable of  performing  his or her duties (1) if the chief  executive
officer  is the Chair of the Board,  the  President  shall  assume the duties as
temporary,  acting  chief  executive  officer  and the  Chair  of the  Executive
Committee  of the Board (or,  if there be no such  Chair,  the  Director  of the
longest  tenure of service on the Board who in not an employee  of the  Company)

                                       7

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shall assume the duties of temporary,  acting Chair of the Board,  or (2) if the
chief  executive  officer is the President,  the Chair of the Board shall assume
the duties as temporary,  acting chief  executive  officer,  and he or she shall
promptly  appoint,  subject to  ratification  by the full Board at its  earliest
convenience,  an officer of the Company to be the temporary,  acting  President.
The services of these temporary,  acting officers shall continue until the chief
executive  officer has resumed his or her duties,  or until the Directors  shall
otherwise determine.

        In the event of accident,  disability or other circumstances that render
the Chair of the Board  incapable of performing  his or her duties and the Chair
of the  Board is not the chief  executive  officer,  the Chair of the  Executive
Committee of the Board of Directors (or, if there be no such Chair, the Director
of the  longest  tenure of  service on the Board who in not an  employee  of the
Company) shall assume the duties as temporary,  acting Chair of the Board, until
the Chair of the  Board has  resumed  his or her  duties or until the  Directors
shall otherwise determine.

     Notwithstanding  the  foregoing,  the Directors  may by  resolution  make a
different  provision in any year for the assumption of  responsibilities  of the
Chair of the Board,  the chief executive  officer and the President in the event
of their inability to serve as aforesaid,  which  resolution  shall be effective
until the next meeting at which officers are appointed.

     A majority vote of the whole Board of Directors  shall be necessary for the
election of officers. All such officers shall hold office for one year and until
their successors are chosen and duly qualified,  provided however that the Board

                                       8

<PAGE>


of  Directors  shall  have power at any time to remove  from  office any of such
officers as well as any other agent or employee of the Company,  with or without
cause.

            ARTICLE VII. Powers and Duties of Directors and Officers


     Section 1. The Board of  Directors  shall have and  exercise all the powers
and authority granted by law in order to carry out its  responsibility to manage
and control the  business,  property  and affairs of the  Company.  The Board of
Directors  shall be vested with all the powers and authority of the  corporation
itself,  except in such matters as may be especially excepted by the Articles of
Incorporation  or By-Laws  of the  Company or by the laws of the State of Maine.
Subject to any contrary  provisions  of law, the  Articles of  Incorporation  or
these By-Laws,  the Board of Directors shall have power to delegate from time to
time such  authority as it may deem  necessary to any one or more members of the
Board  acting as a  committee,  in order that the business of the Company may be
transacted with promptness and dispatch.

     Section 2. The Board of Directors by a resolution  adopted by a majority of
the full Board of Directors  then in office may designate from among its members
an Executive Committee consisting of two or more Directors,  and may delegate to
such  Executive  Committee  all the  authority  of the Board of Directors in the
management of the corporation's  business and affairs,  except as limited by law

                                       9

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(including  without  limitation  the Maine  Business  Corporation  Act),  or the
resolution  establishing  the Executive  Committee or any resolution  thereafter
adopted by the Board of Directors.  Vacancies in the membership of the Executive
Committee shall be filled by resolution  adopted by a majority of the full Board
of Directors then in office. The Executive  Committee shall keep regular minutes
of its proceedings and report the same to the Board of Directors. Members of the
Executive  Committee  may be removed  from  office,  with or without  cause,  by
resolution  adopted by a majority of the full Board of Directors then in office.
So far as practicable,  the provisions of these By-Laws relating to the calling,
noticing  and  conduct of meetings of the Board of  Directors  shall  govern the
calling, noticing and conduct of meetings of the Executive Committee.

     The Board of  Directors,  by a  resolution  adopted  by a  majority  of the
Directors  who are not  employees  of the  Company,  shall  establish  an  Audit
Committee and a  Compensation  Committee,  the membership of each of which shall
consist of Directors who are not employees of the Company.  The Audit  Committee
shall review the adequacy of the  Company's  financial  reporting  processes and
internal  controls and conduct such other  business as may be delegated to it by
the Board of Directors. The Compensation Committee shall review and recommend to
the Board of  Directors  the  compensation  and  benefits of the  Directors  and
officers of the Company and the  Company's  overall  compensation  and  benefits

                                       10

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policies and conduct such other  business as may be delegated to it by the Board
of Directors.

     The  Board  of  Directors,  by  resolution  adopted  by a  majority  of the
Directors,  may  establish  such  other  committees  as it  deems  necessary  or
desirable  in order to conduct the  business  and  affairs of the  Company  with
dispatch, and, to the extent permitted by law, empower such committees with such
authority as the Board of Directors deems appropriate.

     Except as otherwise  provided by law, the Articles of Incorporation,  these
By-Laws  or a  majority  of the Board of  Directors,  the Chair of the Board may
appoint members and chairs of committees of the Board, and shall ex officio be a
member of all committees.

     Section 3. The Chair of the Board of Directors shall be responsible for the
conduct of the business and functions of the Board of  Directors,  except to the
extent that specific functions may be otherwise governed by law, the Articles of
Incorporation,  these By-Laws or resolution of the Board of Directors. He or she
shall  establish  the schedule and agendas for and shall  preside at meetings of
the  Stockholders  and the Board of  Directors,  and shall  attend to such other
business as the Board of Directors may from time to time direct.

     Section 4. The President, in the capacity of chief executive officer of the
Company,  shall  implement  the overall  direction  and policies of the Board of

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Directors,  and supervise  and direct  generally the business and affairs of the
Company. The President may sign any deeds, mortgages, bonds, contracts, or other
instruments  that the Board of Directors has authorized  for  execution,  except
when the signing and execution thereof has been expressly delegated by the Board
of Directors or these  By-Laws to some other  officer or agent of the Company or
is required by law to be otherwise signed or executed.  The President shall also
make  reports  to the Board of  Directors  and the  shareholders  and  generally
perform all duties  incident to the office of President and such other duties as
may be prescribed by the Board of Directors.

     In the  event  the  President  is not the chief  executive  officer  of the
Company,  unless the Board of Directors shall otherwise  specify,  the foregoing
powers  and duties  shall  appertain  to the chief  executive  officer,  and the
President  shall have such  powers and  duties as the Board of  Directors  shall
determine.

     Section 5. Vice Presidents shall have such  responsibilities  and duties as
may  be  prescribed  by  the  President,  and in  the  absence  of any  specific
delegation   of   responsibilities   shall   have  such   powers,   duties   and
responsibilities  as may  reasonably  be implied by their titles as necessary to
the routine  operation of the  functions for which they are  responsible  in the
normal course of the business of the Company.

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     Section 6. The  Treasurer  or his or her  designate  shall  receive  and be
responsible for all cash, notes and securities of the Company, and is authorized
to give  receipts  for all moneys due and payable to the Company  from  whatever
source, and to endorse checks, drafts and warrants in the name of the Company in
banks and  other  financial  institutions.  All  funds of the  Company  shall be
deposited to the credit of the Company. They may be invested, and if so, must be
invested  pursuant  to  guidelines  issued  from  time to time by the  Board  of
Directors.  He or she shall affix the seal of the Company to such instruments as
it is necessary and proper to execute under seal and attest the same,  and he or
she shall  discharge  such other duties as pertain to this office,  or as may be
assigned to him from time to time by the Board of Directors or by the President.

     Section 7. The Clerk shall be a resident  of the State of Maine,  and shall
be sworn to a faithful discharge of his duties. He or she shall keep a record of
all votes of the  Stockholders  and  Directors and record all the minutes of the
meetings  of the  Stockholders  and  Directors  in a book  to be kept  for  that
purpose.  He or she shall keep a book containing a true and complete list of all
Stockholders,  their residences, and the amount of stock held by each, and shall
keep such other  books and  perform  such other  duties as pertain to his or her
office  or as may be  assigned  to him or her from  time to time by the Board of

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Directors or by the  President.  In the absence or  disability  of the Clerk and
Assistant Clerk, the President may appoint a Clerk pro tempore.

        Section  8. The  compensation  and  benefits  of the  officers  shall be
established by the Board of Directors. The compensation and benefits of officers
who are Directors  shall be  established by a majority vote of Directors who are
not employees of the Company.

     The   compensation  and  benefits  of  the  Board  of  Directors  shall  be
established by a majority vote of the full Board of Directors. Directors who are
employees of the Company  shall  receive no  compensation  for their  service as
Directors.

     Section  9. The  Treasurer  shall  give,  and other  officers,  agents  and
employees of the Company may be required to give, at the expense of the Company,
bonds in such amount and form with such  sureties as the Board of Directors  may
require  and  approve,  for  the  faithful  discharge  of the  duties  of  their
respective offices and positions.

     Section 10. Any current or former Director,  officer or employee who was or
is a party or is  threatened  to be made a party to any  threatened,  pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative,  by  reason  of the  fact  that  he or she is or was a  Director,
officer or employee of the  Company,  or is or was serving at the request of the
Company as a Director, officer, trustee, partner,  fiduciary,  employee or agent


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of another  corporation,  partnership,  joint venture,  trust,  pension or other
employee benefit plan or other  enterprise,  shall be indemnified by the Company
against expenses,  including attorney's fees, judgments,  fines and amounts paid
in settlement  actually and reasonably incurred by him or her in connection with
such action, suit or proceeding to the full extent permitted by Maine law.

     Expenses  incurred  in  defending  a  civil,  criminal,  administrative  or
investigative  action,  suit or proceeding  shall in all cases be authorized and
paid by the Company in advance of the final disposition of such action,  suit or
proceeding upon receipt by the Company of:

         (1) A written  undertaking by or on behalf of the officer,  director or
         employee to repay that amount if he or she is finally adjudicated:

               (A) Not to have acted honestly or in the  reasonable  belief that
               his or her action was in or not opposed to the best  interests of
               the  Company  or its  shareholders  or,  in the  case of a person
               serving as a fiduciary of an employee  benefit plan or trust,  in
               or not opposed to the best interests of such plan or trust or its
               participants or beneficiaries;


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<PAGE>


               (B) With respect to any criminal  action or  proceeding,  to have
               had  reasonable  cause to  believe  that his or her  conduct  was
               unlawful; or

               (C) With  respect to any claim,  issue or matter  asserted in any
               action,  suit or  proceeding  brought  by or in the  right of the
               Company,  to be liable to the Company,  unless the court in which
               that   action,   suit   or   proceeding   was   brought   permits
               indemnification   in  accordance  with  subsection  (2)  of  13-A
               M.R.S.A. ss.719; and

         (2) A written affirmation by the officer,  Director or employee that he
         or she has met the standard of conduct necessary for indemnification by
         the Company as authorized by this section.

     The undertaking  required by subparagraph (1) shall be an unlimited general
obligation of the person seeking the advance, but need not be secured and may be
accepted without reference to financial ability to make the repayment.

             ARTICLE VIII. Checks, Drafts and Negotiable Instruments

     All checks,  drafts,  or other orders for the payment of money,  notes,  or
other evidences of indebtedness  issued in the name of the corporation  shall be

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<PAGE>

signed by such officer or officers,  agent or agents of the  corporation  and in
such manner as shall from time to time be  determined by resolution of the Board
of Directors.

                             ARTICLE IX. Fiscal Year

     The fiscal year of the Company  shall  commence on the first day of January
and end on the last day of December in each year.

                                ARTICLE X. Stock

     Section  1.  The   authorized   capital  stock  of  the  Company  shall  be
$110,000,000  represented by 600,000 shares of Preferred  Stock of the par value
of $100 each, and 10,000,000 shares of Common Stock of the par value of $5 each.

        Section 2. The 600,000 shares of Preferred  Stock shall be available for
classification and  reclassification in different classes or series from time to
time.  Subject to  reclassification  upon retirement by redemption or otherwise,
25,000 shares shall be 7% Preferred  Stock,  17,500 shares shall be 4% Preferred
Stock,  Series A, 4,840  shares  shall be 4 1/4%  Preferred  Stock,  and 150,000
shares shall be 8.76% Preferred Stock.

     The remaining  shares,  402,660 in number,  plus additional shares equal in
number to any shares now outstanding or hereafter issued which may be retired by

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<PAGE>

redemption  or  otherwise  may be  issued as  additional  shares of any class or
series heretofore or hereafter  authorized,  or may be issued in one or more new
classes or series  which  (subject  to the  provisions  hereof)  shall have such
designations,  preferences and voting powers,  or restrictions or qualifications
thereof  as shall be fixed  and  determined  by the  Board of  Directors  in the
By-Laws,   including  provisions  (among  others)  with  respect  to  dividends;
redemption,  conversion  rights,  if any; sinking fund, if any;  restrictions or
limitations,  if any, upon the payment of dividends,  issuance of capital stock,
incurring of  indebtedness  and such other matters as the Board of Directors may
determine; and voting powers, if any, which voting powers, if any, may be either
general voting powers or special voting powers, or both.

     In fixing and  determining the special voting powers of any class or series
of Preferred Stock, the Board of Directors is specifically authorized to provide
that if at any time dividends or required  sinking fund payments  payable on the
Preferred  Stock  shall be in  default  in any  amount  to be  specified  in the
By-Laws,  then,  until all  dividends or required  sinking  fund  payments so in
default shall have been paid or declared and set apart for payment,  the holders
of shares of  Preferred  Stock of each and every  class or  series,  voting as a
single  class,  shall  be  entitled  to  elect in such  manner  as the  Board of
Directors may provide,  the smallest number of Directors necessary to constitute

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<PAGE>


a majority of the full Board of  Directors,  the balance of the  Directors to be
elected by the holders of shares  having  general  voting  powers.  The Board of
Directors is further  specifically  authorized so to provide with respect to any
class or series of  Preferred  Stock  hereafter  authorized  that the holders of
shares of such class or series,  either  separately or together with the holders
of all other classes and series of Preferred Stock, shall have the right to vote
with  respect to or to  consent or object to such other  matters as may be fixed
and determined by the Board of Directors in the By-Laws.

     Except as  hereinabove  provided,  each class or series of Preferred  Stock
shall be  identical  with each other class or series of  Preferred  Stock.  Each
share of Preferred Stock of any particular class or series shall be identical in
all  respects  with every  other share of  Preferred  Stock of the same class or
series.

     Section 3. The holders of the Preferred  Stock,  of each and every class or
series, are entitled to receive, when and as declared, out of the surplus or net
profits of the Company,  dividends at the rate  applicable  to their  respective
shares,  payable as the Board of Directors may  determine,  before any dividends
shall be set apart for or paid upon the Common Stock or before the Company shall
purchase any of its Common Stock.  The dividends upon the Preferred  Stock shall
be cumulative and accumulations of dividends shall not bear interest.  Except as

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<PAGE>

provided  in  paragraph  (b) of Section 6, the Board of  Directors  may  declare
dividends  upon the Common  Stock,  provided the  dividends  upon the  Preferred
Stock,  with  all  accumulations,  including  accrued  dividends  to the date of
payment of the Common Stock  dividends,  shall have been paid in full,  or a sum
sufficient  for the payment  thereof shall have been set apart for that purpose,
but not otherwise. Except as provided in paragraph (b) of Section 6, the holders
of the Common  Stock are  entitled  to  receive  all  additional  surplus or net
profits  which the  Directors  may order  distributed  in  dividends,  after the
dividends above provided for shall have been paid or set apart.

     Section 4. (a) If any dividend is declared on the Preferred Stock at a rate
less than  sufficient to pay the full  dividend  called for by all the Preferred
Stock  outstanding,  the distribution of the dividend shall be pro rata, so that
all holders of Preferred  Stock shall  receive the same  proportion  of the full
dividend called for by their stock.

     (b) If at any time  dividends  payable on the  Preferred  Stock shall be in
default in an amount equal to or exceeding four quarterly dividend payments,  or
if the  Company  shall fail to make any  required  sinking  fund  payment on the
Preferred  Stock,  then,  until all  dividends  or sinking  fund  payments so in
default  have been paid or declared  and set apart for  payment,  the holders of
shares of Preferred Stock of each and every class or series,  voting as a single

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<PAGE>

class,  shall be  entitled,  at any annual  meeting  during  which  dividends or
sinking  fund  payments  are so in  default,  to elect  the  smallest  number of
Directors necessary to constitute a majority of the full Board of Directors, the
balance of the Directors to be elected by the holders of shares  having  general
voting powers.

     (c)  Notwithstanding  the  provisions  of Section 5 of Article III of these
By-Laws,  except as provided in paragraph  (b) of this Section 4, the holders of
the 8.76%  Preferred  Stock  shall not be  entitled  to vote at any  meeting  of
Stockholders.

     Section  5. In case of  liquidation  or  dissolution  of the  Company,  the
assets,  irrespective  of  whether  they  shall  consist  of  capital  assets or
accumulated earnings,  shall be distributed as follows: All holders of Preferred
Stock shall be  entitled to be paid in full both the par amount of their  shares
and an amount equal to the unpaid dividends accumulated and accrued thereon and,
in the case of the 8.76% Preferred  Stock, if such liquidation or dissolution is
voluntary,  an amount  equal to the  premium  specified  in Section  6(a) below,
before any amount shall be paid to the holders of the Common Stock,  and in case
the assets shall not be sufficient to pay in full all of the Preferred Stock and
dividends  accumulated and accrued  thereon,  and applicable  premium,  then the
principal  thereof  shall  first  be  paid  pro  rata,  thereafter  a  pro  rata
distribution  of any  excess  shall  be  made  on  account  of  the  accumulated

                                       21

<PAGE>

dividends, based on the total amount of unpaid dividends accumulated and accrued
thereon,  and thereafter a pro rata  distribution of any excess shall be made on
account of applicable premium,  based on the total amount of applicable premium,
but after such  payment to the holders of the  Preferred  Stock,  the  remaining
assets and funds shall be paid to the holders of the Common Stock,  according to
their respective shares.

     Section 6. (a) The 7% Preferred  Stock shall bear  dividends at the rate of
7% per annum and shall not be  redeemable.  The 4%  Preferred  Stock,  Series A,
shall bear dividends at the rate of 4% per annum and shall be redeemable at 112%
if called on or prior to October 1, 1950; at 111% thereafter  through October 1,
1951; and after October 1, 1951 at 110%,  plus accrued  dividends in every case.
The 4 1/4% Preferred  Stock shall bear dividends at the rate of 4 1/4% per annum
and shall be  redeemable at 102% if called on or prior to April 1, 1954; at 101%
thereafter  through April 1, 1959; and after April 1, 1959 at 100%; plus accrued
dividends in every case.  Except as provided in Section 6(d) through  6(o),  the
8.76%  Preferred  Stock shall bear  dividends at the rate of 8.76% per annum and
shall not be  redeemable  prior to December  27,  1994.  Dividends  on the 8.76%
Preferred  Stock shall be cumulative  and paid quarterly no later than the first
business day  following  each January 19, April 19, July 19, and October 19. The
8.76%  Preferred  Stock  shall be  redeemable  at the  option of the  Company as
follows:

                                       22

<PAGE>
               At 105.63% if called on or prior to December 27, 1995;

               At 105.01% if called on or prior to December 27, 1996;

               At 104.38% if called on or prior to December 27, 1997;

               At 103.75% if called on or prior to December 27, 1998;

               At 103.13% if called on or prior to December 27, 1999;

               At 102.50% if called on or prior to December 27, 2000;

               At 101.88% if called on or prior to December 27, 2001;

               At 101.25% if called on or prior to December 27, 2002;

               At 100.63% if called on or prior to December 27, 2003;

               and after December 27, 2003 at 100%;

               plus accrued dividends in every case.

Preferred Stock,  which is the subject of redemption,  may be called in whole or
in part upon any dividend payment date by appropriate  resolution adopted by the
Board of  Directors  at any  regular or special  meeting  upon 60 days'  written
notice to the  owners  thereof  of record to be given by  mailing  copies of the
notice  of  redemption,  postage  prepaid,  addressed  to such  owners  at their
addresses  as  shown  on the  books of the  Company.  In the  case of the  8.76%
Preferred  Stock,  notice of redemption to the owners thereof of record shall be
by certified mail,  postage  prepaid,  or by a nationally  recognized  overnight
delivery  service.  If less than all of the  outstanding  shares of any class or
series of  Preferred  Stock shall be  redeemed  at any time,  the stock to be so
redeemed  shall be  determined  by lot, in such manner as the Board of Directors
may determine and prescribe, except that the shares of the 8.76% Preferred Stock
shall be redeemed pro rata.

                                       23

<PAGE>


     (b) The 8.76% Preferred  Stock shall also be subject to redemption  through
the  operation of a sinking fund  (hereinafter  called the Sinking  Fund) at the
redemption price of $100 per share plus an amount equal to the dividends accrued
and unpaid  thereon to the  redemption  date,  whether or not earned or declared
(the Sinking Fund Redemption  Price).  For the purposes of the Sinking Fund, out
of any net assets of the Company legally available therefor remaining after full
cumulative dividends upon all Preferred Stock then outstanding to the end of the
current  dividend period therefor shall have been paid or declared and set apart
for payment, the Company shall set aside in cash annually on December 27 in each
year  commencing  with December 27, 1995, an amount  sufficient to redeem at the
Sinking Fund Redemption  Price,  15,000 shares of the 8.76% Preferred Stock. The
Sinking  Fund shall be  cumulative  so that if on any such  December  27 the net
assets of the Company legally available therefor shall be insufficient to permit
any such amount to be set aside in full,  or if for any other reason such amount
shall not have been set aside in full, the amount of the deficiency shall be set
aside, but without interest,  before any dividend shall be paid or declared,  or
any  distribution  made,  on any  junior  shares or any junior  shares  shall be
purchased,  redeemed,  or otherwise acquired by the Company, or any moneys shall
be paid to or set aside for the  purchase or  redemption  of any junior  shares.

                                       24

<PAGE>


Notwithstanding the foregoing,  the Company may at any time (1) pay dividends in
junior  shares or (2)  purchase,  redeem or otherwise  acquire  junior shares in
exchange for, or out of the proceeds from the  concurrent  sale of, other junior
shares.  As used herein the term "junior  shares" shall mean Common Stock or any
other shares ranking junior to the 8.76%  Preferred Stock either as to dividends
upon liquidation, dissolution or winding up. Moneys in the Sinking Fund shall be
applied (and  disbursed)  on such December 27 to redemption of the shares of the
8.76%  Preferred  Stock.  The Company  shall,  prior to each such  Sinking  Fund
redemption,  give notice of  redemption,  as specified in subsection (a) of this
Section  6, of such  number of shares  of the  8.76%  Preferred  Stock as may be
required to satisfy the Sinking Funds.

        (c) In addition,  the Company  shall have the right,  at its option,  to
redeem at the Sinking  Fund  Redemption  Price on  December  27, 1995 and on any
December 27  thereafter an  additional  number of shares of the 8.76%  Preferred
Stock  up to but not  exceeding  15,000  shares,  provided,  however,  that  the
aggregate  number of shares of the 8.76%  Preferred  Stock which may be redeemed
pursuant to this Section 6(c) may not exceed 30,000  shares.  Notice of any such
redemption  shall be as  specified  in  subsection  (a) of this Section 6. These
rights shall not be  cumulative  and shall be lost to the extent not  exercised.
Any redemption of shares of the 8.76%  Preferred  Stock pursuant to this Section
6(c)  shall not  operate to reduce  the  number of shares  which the  Company is
obligated to redeem pursuant to Section 6(b).

                                       25

<PAGE>


     (d) At all times that  dividends on the 8.76%  Preferred  Stock are payable
pursuant to these By-laws,  the Company will treat the 8.76%  Preferred Stock as
stock and not as indebtedness  and will treat the dividends paid with respect to
the 8.76% Preferred Stock as dividends (within the meaning of Section 316 of the
Internal  Revenue Code of 1986, as amended (the  "Code")) to the maximum  extent
permitted under the Code.

     (e) At all times that  dividends on the 8.76%  Preferred  Stock are payable
pursuant to these By-laws, the Company will not:

              (1) take any action  which would  require or permit the Company to
         treat the dividends paid with respect to the 8.76%  Preferred  Stock as
         interest  for any  purpose  or to treat  the 8.76%  Preferred  Stock as
         indebtedness for any purpose;

              (2)  exercise  any  option  or  election  that  may at any time be
         available  under the Code or  otherwise  to  deduct  all or part of the
         dividends  paid with respect to the 8.76%  Preferred  Stock if so doing
         would  reduce  the  after-Federal  income  tax  yield per annum on such
         dividends to any corporate holder of the 8.76% Preferred Stock;

              (3) change its place of incorporation,  by merger or otherwise, to
         a  jurisdiction  other than the  District  of Columbia or one of the 50
         states of the United States; or

              (4)   otherwise   take  any   action   which   would   cause   the
         Dividend-Received  Deduction  contained  in Section  243 of the Code to

                                       26

<PAGE>

         cease to be available with regard to dividends paid with respect to the
         8.76%  Preferred  Stock to a corporate  holder of 8.76% Preferred Stock
         otherwise eligible to claim the Dividend-Received Deduction.

     (f) In the event that the Company shall fail to take the action required in
subsection  (d) of this Section 6, or shall take any of the actions  referred to
in subsection (e) of this Section 6, then the Company will pay to each corporate
holder of 8.76%  Preferred  Stock,  in addition to all dividends  required to be
paid on the 8.76%  Preferred  Stock,  such  amount as is  necessary  so that the
after-Federal  income tax yield per annum  from  dividends  and such  additional
payments  on the 8.76%  Preferred  Stock is 7.8665% (or 7.5538% in the case of a
corporate holder subject to Section 832(b) of the Code) to such corporate holder
at a Federal  income tax rate equal to 34%.  Payments  pursuant to the preceding
sentence  shall be made to the  extent  necessary  with  respect  to any and all
dividends on the 8.76%  Preferred Stock (whether such dividends are paid before,
at the same time as or after the action or failure  to act);  provided,  that no
such payments  pursuant to this  subsection  (f) shall be made to any particular
corporate  holder  until such  corporate  holder has provided the Company with a
written notice  specifying (1) that such holder requires  indemnification  under
this  subsection  (f),  (2) the amount to be paid by the Company to such holder,
and (3) supporting  calculations  and that in the event that a corporate  holder
makes a written demand for indemnification  pursuant to this subsection (f), the

                                       27

<PAGE>

Company shall  thereafter,  on each date subsequent to the date of the action or
failure to act giving  rise to such  demand on which  dividends  are paid on the
8.76% Preferred  Stock,  in addition to such  dividends,  pay to such holder the
amount set forth in the demand for indemnification  previously  furnished to the
Company  until such time as such  holder  furnishes  written  notice,  including
supporting  calculations,  to the  Company  that  indemnification  is  required,
whether pursuant to this subsection,  subsection (h) or otherwise,  at a greater
or lesser rate.

     (g) If the Company  shall pay a dividend in respect of the 8.76%  Preferred
Stock which  constitutes,  in whole or in part,  a return of capital for Federal
income tax purposes not eligible for the Dividend-Received  Deduction,  then the
Company will pay to each corporate  holder of 8.76% Preferred Stock, in addition
to all dividends  required to be paid on the 8.76%  Preferred  Stock,  an amount
(the "Indemnity  Amount") as is necessary so that the  after-Federal  income tax
yield per annum from such non-qualifying  dividends and such additional payments
on the 8.76%  Preferred  Stock is 7.8665% (or 7.5538% in the case of a corporate
holder subject to Section  832(b) of the Code).  For the purposes of calculating
the Indemnity  Amount it will be assumed that each  corporate  holder is subject
to, and pays,  Federal  income tax at the highest  marginal  rate in the case of
"ordinary  income"  and  the  highest  marginal  rate in the  case of  long-term

                                       28

<PAGE>

"capital  gains," in the year in which the Indemnity  Amount is paid;  provided,
that no such Indemnity  Amount shall be paid to any particular  corporate holder
until the earlier of (1) the time of the sale, exchange or redemption (including
a sinking fund purchase or redemption) of the 8.76% Preferred  Stock, or (2) the
time additional Federal income taxes,  including estimated taxes, resulting from
the payment of dividends on the 8.76% Preferred Stock in any calendar year which
constitute,  in whole or in part,  a return of capital  for  Federal  income tax
purposes  not eligible for the  Dividend-Received  Deduction,  are paid or would
have been paid if the  corporate  holder  were  liable for  Federal  income tax;
provided, further, that in the case of a sale or exchange of the 8.76% Preferred
Stock,  such  Indemnity  Amount shall be paid at the later of (1) fourteen  (14)
days  after  notice of such sale or  exchange  is given to the  Company  by such
corporate holder, or (2) the occurrence of such sale or exchange;  and provided,
further,  that if such Indemnity  Amount cannot be determined at the time of the
sale,  exchange or  redemption  (i.e.,  the sale,  exchange or redemption of the
8.76% Preferred Stock occurs in a year in which the  distributions  on the 8.76%
Preferred  Stock are, in whole or in part, a return of capital) then the Company
shall pay such Indemnity Amount at the earlier of (1) forty-five (45) days after
the end of the calendar  year, or (2) the time when the Indemnity  Amount can be
determined.

                                       29

<PAGE>

     (h) In the event that,  after  December 27, 1989,  Federal  legislation  is
enacted  (whether in the form of an  amendment of the Code or  otherwise)  which
(whether  by the  terms  of such  legislation  or by U.S.  Treasury  regulations
promulgated  thereunder or a ruling  published by the Internal  Revenue Service)
(1) causes or makes any corporate  holder of 8.76% Preferred Stock ineligible to
claim the  Dividend-Received  Deduction in connection with dividends paid on the
8.76%  Preferred  Stock or (2) reduces the effective  rate,  either  directly or
indirectly  (such as by taking into  account any  proration  required by Section
832(b) of the Code),  of the  Dividend-Received  Deduction  which any  corporate
holder of 8.76%  Preferred  Stock may claim in connection with dividends paid on
the 8.76% Preferred Stock,  the Company will pay to each such corporate  holder,
in addition to all dividends  required to be paid on the 8.76% Preferred  Stock,
such amount as is necessary so that the after-Federal income tax yield per annum
from  dividends and such  additional  payments on the 8.76%  Preferred  Stock is
7.8665% (or 7.5538% in the case of a corporate  holder subject to Section 832(b)
of the Code) to such  corporate  holder based on an assumed  Federal  income tax
rate of 34%.  Payments  pursuant to the preceding  sentence shall be made to the
extent  necessary  with respect to any and all dividends on the 8.76%  Preferred
Stock (whether such dividends are paid before,  at the same time as or after the
enactment of such  legislation  or the issuance of such  regulations or ruling);
provided, that no such payments shall be made to any particular corporate holder
until such holder has provided the Company  with a written  notice,  at any time

                                       30

<PAGE>

subsequent to the effective date of such legislation,  regulations or ruling, as
the case may be, specifying (i) that such holder requires  indemnification  from
the  Company  for  the  amount  of  loss  incurred  by the  holder  due to  such
legislation,  regulations  or ruling,  as the case may be, (ii) the amount to be
paid by the  Company to such holder so that the  after-Federal  income tax yield
per annum from  dividends and such  additional  payments on the 8.76%  Preferred
Stock is  7.8665%  (or  7.5538%  in the case of a  corporate  holder  subject to
Section 832(b) of the Code) to such corporate holder based on an assumed Federal
income tax rate of 34% and (iii)  supporting  calculations.  In the event that a
corporate holder makes a written demand for indemnification pursuant hereto, the
Company shall thereafter,  on each date subsequent to the effective date of such
legislation,  regulations or ruling,  as the case may be, on which dividends are
paid on the 8.76% Preferred  Stock,  in addition to such dividends,  pay to such
holder  the  amount  set  forth in the  demand  for  indemnification  previously
furnished  to the  Company  until  such time as such  holder  furnishes  written
notice, including supporting  calculations,  to the Company that indemnification
is  required,  whether  pursuant  to  this  subsection  (h),  subsection  (f) or
otherwise,  at a greater or lesser rate. In the event that further  legislation,
U.S. Treasury  regulations or rulings published by the Internal Revenue Service,
if any, further limit the eligibility to claim the  Dividend-Received  Deduction
in connection  with dividends paid with respect to the 8.76%  Preferred Stock by
any  corporate  holder  thereof or  further  reduce  the  effective  rate of the

                                       31

<PAGE>

Dividend-Received  Deduction which any corporate holder of 8.76% Preferred Stock
may claim in connection with dividends paid on the 8.76% Preferred  Stock,  then
any such corporate holder may deliver another notice pursuant to this subsection
(h) requesting a new payment amount.

     (i) In the event that the Company shall become  obligated to make a payment
to any  holder of 8.76%  Preferred  Stock  pursuant  to  subsection  (h) of this
Section 6, then the  Company  shall have the right at its option  within 30 days
after  receipt of notice  from any holder  seeking  indemnification  pursuant to
subsection  (h) (but not at a time  thereafter  that the  Company  is no  longer
obligated  to make such a payment),  to  purchase  all or a portion of the 8.76%
Preferred Stock held by such holder at $100 per share plus accrued  dividends to
the date of purchase;  provided,  that,  the Company shall have no obligation to
make a payment  pursuant to  subsection  (h) and shall have no right to purchase
the 8.76%  Preferred  Stock of a holder  pursuant to this subsection (i) if such
holder  waives the Company's  obligation to make payment  pursuant to subsection
(h) within 60 days after receipt of the Company's notice exercising its right to
purchase 8.76%  Preferred  Stock pursuant to this  subsection (i); and provided,
further, that if the Company becomes obligated (and such obligation has not been
waived) to make payments  pursuant to such  subsection  (h) to holders of 50% or

                                       32

<PAGE>

more of the  then  outstanding  8.76%  Preferred  Stock,  the  Company  shall be
entitled  to so  purchase  all,  but not  part,  of the then  outstanding  8.76%
Preferred  Stock; and provided,  further,  that in no event shall the Company be
relieved of its  obligation to make any payment  required  under  subsection (h)
with respect to any dividends  payable,  prior to the actual date of purchase by
the  Company of 8.76%  Preferred  Stock,  to any  corporate  holder  whose 8.76%
Preferred Stock is purchased by the Company pursuant to this Section 6.

     (j) In  calculating  the  payments to be made to a corporate  holder  under
subsections  (f),  (g) or (h),  such holder  shall take into account any and all
payments  (including,  without limitation,  taxes,  interest and penalties) that
such holder is required to make as a result of the event or events that resulted
in the demand for  indemnification  pursuant  to such  subsections.  All amounts
payable under subsections (f), (g) and (h) of this Section 6 shall be considered
contract   claims   taxable   as   ordinary   income   not   eligible   for  the
Dividend-Received Deduction.

     (k) In computing  "after-Federal  income tax yield" to any corporate holder
of 8.76% Preferred Stock in any particular taxable year from dividends paid with
respect to the 8.76%  Preferred  Stock for  purposes of this Section 6, (1) only
Federal  income  taxes  shall  be  considered,  (2)  the  effective  rate of the
Dividend-Received  Deduction  available to a corporate holder of 8.76% Preferred
Stock in any particular  taxable year shall be determined by taking into account

                                       33

<PAGE>

any applicable  provision of the Code (including,  without  limitation,  Section
832(b)) that reduces or enlarges the amount of any other deduction, exclusion or
adjustment  that would  otherwise  be  available to such holder for such taxable
year,  if such  reduction  or  enlargement  is required to be made  because such
holder is entitled to the  benefits of the  Dividend-Received  Deduction  and by
taking into account any reduction or  enlargement  in the effective  rate of the
Dividend-Received  Deduction  required  to be made  because  such  holder or any
income or loss of such holder is subject to any applicable provision of the Code
other than Section  243(a)(1),  (3) except to the extent  provided in clause (2)
above,  the  Dividend-Received  Deduction  for the 1990  calendar  year shall be
deemed to be 70%, (4) for the purposes of subsection  (j), the maximum  marginal
rate applicable to dividends  received by corporations in the first full taxable
year in which  the 8.76%  Preferred  Stock is issued  and  outstanding  shall be
deemed to be 34%, (5) except to the extent  required by the provisions of clause
(2) above,  the dividends  paid with respect to the 8.76%  Preferred  Stock to a
corporate  holder thereof in such particular  taxable year shall be deemed to be
the only item of income for such particular taxable year of such holder, (6) the
Dividend-Received   Deduction,   if   actually   available   (disregarding   any
disallowance  pursuant to Code Section 246A) to such holder for such  particular
taxable year, and only to the extent actually  available to such holder for such
particular  taxable year, as detailed in clause (2) above, shall be deemed to be
the only  deduction or exclusion  available to such holder,  except as otherwise

                                       34

<PAGE>

provided in clause (2) above,  and (7) for the purposes of  subsection  (j), the
rate of Federal  income tax  imposed  with  respect to the  receipt of  ordinary
income (i.e.,  contract  claims) shall be deemed to be the maximum marginal rate
applicable  to ordinary  income  received  by  corporations  in such  particular
taxable year. In the case of a holder of 8.76%  Preferred  Stock who did not own
any 8.76% Preferred  Stock for the 1990 calendar year, the computation  shall be
made as though such holder has owned 8.76% Preferred Stock in such taxable year.

     (l) Any references to the after-Federal income tax yield per annum referred
to in this Section 6 shall be adjusted in accordance with subsection (o) of this
Section 6.

     (m) As referred to in Note 5 to the Company's financial statements included
in its Quarterly  Report on Form 10-Q for the quarter ended  September 30, 1989,
an  adjustment  in the  Federal  income tax  liability  of the  Company has been
proposed by the Internal Revenue Service.  Such proposed  adjustment  relates to
the Company's Federal income tax treatment of certain issues which relate to the
Company's  ownership and subsequent sale of its interest in the Seabrook project
and the Company's abandonment of Seabrook Unit 2.

                                       35

<PAGE>


        (n) In the event that, as a result of the proposed  adjustment  asserted
in the Internal Revenue Service Audit described in subsection (m) above,

          (1)  the Company  shall  reduce or be required by  generally  accepted
               accounting  principles,  the Federal Energy Regulatory Commission
               or the Maine Public  Utilities  Commission to reduce its Retained
               Earnings  in the  cumulative  amount,  including  tax  liability,
               interest and penalties, of $15 million or more; and

          (2)  during the  twelve-month  period  subsequent  to the reduction or
               required reduction in Retained Earnings referred to in subsection
               (n)(1) above,  the holders of the 8.76% Preferred Stock shall not
               have received written  notification,  addressed to them and dated
               after the date of the reduction or required reduction in Retained
               Earnings  referred to in  subsection  (n)(1)  above,  from either
               Moody's  Investors  Service,  Inc.  ("Moody's")  or Standard  and
               Poor's  Corporation  ("S&P") that the 8.76% Preferred Stock has a
               rating of at least "baa3" from Moody's or "BBB-" from S&P; and

          (3)  any holder provides written notice to the Company, within 30 days
               after the beginning of each of the fifth through twelfth quarters
               following the reduction in Retained  Earnings or  requirement  to

                                       36

<PAGE>

               reduce Retained  Earnings referred to in subsection (n)(1) above,
               that it elects to receive an increased dividend rate on the 8.76%
               Preferred Stock held by it pursuant to this subsection (n);

then  commencing at the  beginning of the first quarter  during which the notice
referred to in subsection (n)(3) above is provided, the dividend rate payable on
such 8.76% Preferred  Stock for that quarter and each  subsequent  quarter shall
increase  by 50 basis  points  per  quarter to a maximum  increase  of 300 basis
points  (an  11.76%  dividend  rate per  annum);  provided,  that so long as the
Company  is  obligated  to pay an  increased  dividend  rate  pursuant  to  this
subsection (n), the Company shall have the right at its option to purchase, upon
30 days'  written  notice to each  holder of 8.76%  Preferred  Stock as to which
notice referred to in subsection (n)(3) above has been given, all, but not part,
of such 8.76% Preferred Stock held by such holder at $100 per share plus accrued
dividends  to  the  date  of  purchase;   provided,   further,   that  under  no
circumstances  shall  the  Company  be  relieved  of  its  obligation  to pay an
increased  dividend  pursuant to this subsection (n) prior to the actual date of
purchase by the Company of the 8.76%  Preferred  Stock;  and provided,  further,
that if subsequent to the receipt of the notice referred to in subsection (n)(3)
above, the Company shall receive notification from Moody's or S&P that the 8.76%
Preferred Stock has a rating of at least "baa3" from Moody's or "BBB-" from S&P,
then (i) the Company shall give notice to each holder of 8.76%  Preferred  Stock

                                       37

<PAGE>

entitled to an increased  dividend  rate pursuant to this  subsection  (n) that,
commencing  with the  beginning  of the  quarter  following  the mailing of such
notification,  the dividend rate payable on such 8.76%  Preferred Stock shall be
reduced to 8.76% per annum,  and (ii) the Company shall have no further right to
purchase the 8.76% Preferred Stock pursuant to this subsection (n).

     (o) So long as the Company is required to pay any holder of 8.76% Preferred
Stock an increased  dividend rate pursuant to subsection (n), the  after-Federal
income tax yield  applicable to any payments to be made pursuant to  subsections
(f), (g) and (h) of this Section 6 shall be increased as follows:


                                              After-Federal
         Increase in        After-Federal     Income Tax Yield
         Dividend Rate      Income Tax        to Holder Subject
         (Basis Points)     Yield             to Section 832(b)

               50               8.3155             7.9849
              100               8.7645             8.4161
              150               9.2135             8.8472
              200               9.6625             9.2784
              250              10.1115             9.7095
              300              10.5605            10.1407



                                       38

<PAGE>

     Section 7. The Board of Directors, by resolution adopted prior to the issue
of any stock having voting rights, shall determine whether the holders of any of
the classes or series of the  Preferred  Stock  and/or the holders of the Common
Stock may have or may not have the  preemptive  right to subscribe  for and take
shares of such  stock so to be issued.  Except to the  extent  that the Board of
Directors  shall  determine as above  provided,  no right to subscribe for or to
take any stock,  whether  Preferred or Common, at any time issued by the Company
shall appertain to any of the stock of this Company.

     Section  8. All  certificates  of stock  shall be  signed  by,  or bear the
facsimile  signatures  of, the President or any Vice President and the Treasurer
or Assistant  Treasurer,  and shall have affixed  thereto the corporate  seal or
bear a facsimile thereof.

     Section  9. The Board of  Directors  shall  provide  for the  transfer  and
registration of the shares of the Company's capital stock in such city or cities
as it from time to time deems  necessary or  advisable.  Said Board of Directors
shall  appoint  such  transfer  agents,   co-transfer  agents,   registrars  and
co-registrars  as are  required for the  foregoing  purpose.  All capital  stock
certificates  shall be countersigned by a transfer agent or co-transfer agent so
appointed, and by a registrar or co-registrar so appointed.

                                       39

<PAGE>

        Section 10. Shares of stock of the Company shall be transferable only on
the books of the  Company  by the holder  thereof  in  person,  or by his or her
attorney  duly  authorized  thereto  in  writing,  and  upon the  surrender  and
cancellation of the certificate therefor duly endorsed.

                             ARTICLE XI. Amendments

     Section 1. These By-Laws may be amended,  altered or repealed at any annual
meeting of the  Stockholders  of the Company by a vote of a majority in interest
of the  Stockholders  present.  These  By-Laws may also be  amended,  altered or
repealed at any special  meeting of the  Stockholders  by a like vote,  provided
notice of the proposed amendment,  alteration or repeal shall have been given in
the notice of the meeting.

     Section 2. These  By-Laws may also be  amended,  altered or repealed by the
Board of Directors  by a vote of a majority of all the  Directors of the Company
given at any  regular  or  special  meeting,  provided  notice of such  proposed
amendment or alteration shall have been given by resolution adopted at a meeting
of the Board of Directors  held not less than two weeks  previous  thereto and a
copy of such  resolutions  shall have been sent to each  member of the Board not
less than one week prior to the meeting at which such amendment or alteration is
acted upon. Any amendment to these By-Laws  adopted by the Board of Directors as
herein  provided shall be reported to the  Stockholders at the annual meeting of
the Company.

                                       40

<PAGE>


    I, Andrew  Landry,  hereby  certify that I am the duly elected and qualified
Clerk of Bangor Hydro-Electric Company, and that the foregoing is a true copy of
the _________???

                                       41
</TEXT>
</DOCUMENT>
