8-K

 
 
                      SECURITIES AND EXCHANGE COMMISSION 
 
                          Washington, D.C.  20549 
 
 
                                 FORM 8-K 
    
                              CURRENT REPORT 
 
 
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 
 
 
 
 
Date of Report  
(Date of earliest event reported): October 14, 1996 
                                  ----------------- 
 
               Exact name of  
Commission     Registrant                                 IRS Employer    
File           as specified          State of             Identification  
Number         in its charter        Incorporation        Number          
- ----------     --------------        --------------       --------------  
 
1-11439        ENOVA CORPORATION     California           33-0643023      
 
1-3779         SAN DIEGO GAS &                                            
               ELECTRIC COMPANY      California           95-1184800      
 
- ------------------------------------------------------------------------ 
 
 
 
 
101 ASH STREET, SAN DIEGO, CALIFORNIA                               92101 
- ------------------------------------------------------------------------- 
(Address of principal executive offices)                        (Zip Code) 
 
 
                                                           (619) 696-2000 
Registrant's telephone number, including area code----------------------- 
 
 
- ------------------------------------------------------------------------- 
   (Former name or former address, if changed since last report.) 
 
 
 
 
                                   FORM 8-K 
 
Item 5.  Other Events 
On October 14, 1996, Enova Corporation and Pacific  
Enterprises jointly issued a press release, announcing an  
agreement for the combination of the two companies. The  
release is attached as Exhibit 99.1 and is incorporated  
herein by reference. 
 
As a result of the combination, which was unanimously  
approved by the Boards of Directors of both companies, (i)  
each outstanding share of common stock of Enova Corporation  
will be converted into one share of common stock of the new  
company, (ii) each outstanding share of common stock of  
Pacific Enterprises will be converted into 1.5038 shares of  
the new company's common stock and (iii) the preferred stock  
and preference stock of Pacific Enterprises; San Diego Gas &  
Electric, Enova Corporation's operating utility subsidiary;  
and Southern California Gas Company, Pacific Enterprises'  
operating utility subsidiary, will remain outstanding. 
 
Consummation of the combination is conditional upon, among  
other things, the approvals of each company's shareholders,  
the California Public Utilities Commission and various other  
regulatory bodies.  The name of the new company will be  
announced at a later date. 
 
Completion of the combination is expected by the end of  
1997.  Richard Farman, president and chief operating officer  
of Pacific Enterprises, will be the chairman and CEO of the  
new company and Stephen Baum, president and CEO of Enova,  
will be vice-chairman, president and chief operating officer  
of the new company.  Mr. Baum will become CEO of the new  
company within two years of the combination's effective date  
and will add the title of chairman by September 2000, when  
Mr. Farman retires.  Warren Mitchell, president of Southern  
California Gas Company, will become president and the  
principal executive officer of the combined companies' 
regulated operations and Donald Felsinger, president of San  
Diego Gas & Electric, will become president and the  
principal executive officer of the combined companies' 
unregulated operations.  Effective with consummation of the  
combination, these four individuals' employment will be  
subject to employment contracts, copies of which are  
attached as Exhibits 10.2-10.5 and are incorporated herein  
by reference.  Thomas Page, Chairman of Enova and of San  
Diego Gas & Electric, will retire at the end of December  
1997, and Willis Wood, Chairman and CEO of Pacific  
Enterprises, will retire upon completion of the transaction. 
 
The descriptions of the combination agreement and the  
employment agreements set forth above do not purport to be  
complete and are qualified in there entirety by the  
provisions of the combination agreement and the employment  
agreements.  The combination agreement is attached as  
Exhibit 10.1 and its terms are incorporated herein by  
reference. 
 
ITEM 7.	FINANCIAL STATEMENTS AND EXHIBITS. 
 
(c)	Exhibits. 
 
10.1 Agreement and Plan of Merger and Reorganization, dated  
as of October 12, 1996, among Enova Corporation,  
Pacific Enterprises, Mineral Energy Company, G Mineral  
Energy Sub and B Mineral Energy Sub. 
10.2 Employment contract, dated as of October 12, 1996  
between Mineral Energy Company and Stephen L. Baum. 
10.3 Employment contract, dated as of October 12, 1996  
between Mineral Energy Company and Richard D. Farman. 
10.4 Employment contract, dated as of October 12, 1996  
between Mineral Energy Company and Donald E. Felsinger. 
10.5 Employment contract, dated as of October 12, 1996  
between Mineral Energy Company and Warren I. Mitchell. 
99.1	Press release dated October 14, 1996. 
 
 
 
 
                                               SIGNATURE 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the  
registrants have duly caused this report to be signed on its behalf by the  
undersigned thereunto duly authorized. 
 
 
 
                                       ENOVA CORPORATION 
                                               and 
                               SAN DIEGO GAS & ELECTRIC COMPANY  
                                        (Registrants) 
 
 
Date: October 15, 1996	              		By: /s/ F.H. Ault 
      ----------------                   -------------------------- 
                                                  F.H. Ault 
                                         Vice President and Controller 
    
 
 

EX-10

Exhibit 10.1                                                   
CONFORMED COPY




         AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
                                 
                          BY AND AMONG
                                 
                       ENOVA CORPORATION,
                                 
                      PACIFIC ENTERPRISES,
                                 
                     MINERAL ENERGY COMPANY,

                      G MINERAL ENERGY SUB
                                 
                               AND
                                 
                      B MINERAL ENERGY SUB
                                 
                  DATED AS OF OCTOBER 12, 1996
         AGREEMENT AND PLAN OF MERGER AND REORGANIZATION



               AGREEMENT AND PLAN OF MERGER AND 
REORGANIZATION, dated as of October 12, 1996 (this 
"Agreement"), among Enova Corporation, a California 
corporation ("Enova"; provided, however, that references 
in Article IV hereof to "Enova" prior to January 1, 1996 
shall be deemed references to San Diego Gas & Electric, a 
California corporation and, since January 1, 1996, a 
wholly owned subsidiary of Enova ("Enova Sub")), Pacific 
Enterprises, a California corporation ("Pacific"), Mineral 
Energy Company, a California corporation, 50% of whose 
outstanding capital stock is owned by Enova and 50% of 
whose outstanding capital stock is owned by Pacific (the 
"Company"), G Mineral Energy Sub, a California corporation 
and wholly owned subsidiary of the Company ("Newco Enova 
Sub"), and B Mineral Energy Sub , a California corporation 
and wholly owned subsidiary of the Company ("Newco Pacific 
Sub"),

                      W I T N E S S E T H:

 WHEREAS, Enova and Pacific have each determined that, to 
promote the best interests of its shareholders and 
employees and those customers and communities served by 
its utility subsidiaries, it wishes to compete 
aggressively in the rapidly evolving energy marketplace 
and that it may best do so through a combination with the 
other party, and therefore Pacific and Enova have each 
determined to engage in a business combination as peer 
firms in a strategic merger of equals and, accordingly, 
have formed the Company to participate in such business 
combination;

               WHEREAS, in furtherance thereof the 
respective Boards of Directors of Enova, Pacific, the 
Company, Newco Enova Sub and Newco Pacific Sub have 
approved the consummation of the reorganization provided 
for in this Agreement, pursuant to which Newco Enova Sub 
and Newco Pacific Sub will merge with and into Enova and 
Pacific, respectively, all in accordance with the 
California General Corporation Law (the "California Law") 
and on the terms and conditions set forth in this 
Agreement (such transactions are referred to herein 
individually as the "Enova Merger" and the "Pacific 
Merger", respectively, and collectively as the "Mergers"), 
as a result of which the common shareholders of Enova and 
Pacific will together own all of the outstanding shares of 
common stock of the Company (which will, in turn, own all 
of the outstanding shares of common stock of Pacific and 
Enova) and each share of each other class of capital stock 
of Enova and Pacific shall be unaffected and remain 
outstanding;

WHEREAS, Pacific and Enova contemplate forming a joint 
venture (the "Energy Marketing Joint Venture") to pursue 
natural gas and electricity marketing opportunities and 
provide energy management and related energy services, 
which joint venture will be governed by an agreement 
containing substantially the terms set forth in Exhibit A 
hereto (the "Energy Marketing Joint Venture Agreement");

WHEREAS, for federal income tax purposes, it is intended 
that the Mergers shall collectively qualify as a 
transaction described in Section 351 of the Internal 
Revenue Code of 1986, as amended (the "Code"), and that 
the shareholders of Enova and Pacific will recognize no 
gain or loss for federal income tax purposes as a result 
of the consummation of the Mergers, except with respect to 
any cash received; and

WHEREAS, for accounting purposes, it is intended that the 
transactions contemplated hereby shall be accounted for as 
a pooling of interests under United States generally 
accepted accounting principles applied on a consistent 
basis ("GAAP");

NOW, THEREFORE, in consideration of the foregoing and the 
mutual covenants and agreements herein contained, and 
intending to be legally bound hereby, the parties hereto 
hereby agree as follows:


                            ARTICLE I
 
                           THE MERGERS

               SECTION 1.01.  The Mergers.  Upon the terms 
and subject to the conditions of this Agreement:

               (a)At the Enova Effective Time, Newco Enova 
Sub shall be merged with and into Enova (the "Enova 
Merger") in accordance with California Law.  Enova shall 
be the surviving corporation in the Enova Merger and shall 
continue its corporate existence under the laws of the 
State of California.  As a result of the Enova Merger, 
Enova shall become a subsidiary of the Company.  The 
effects and the consequences of the Enova Merger shall be 
as set forth in Section 1.03(a).

               (b)At the Pacific Effective Time, Newco 
Pacific Sub shall be merged with and into Pacific (the 
"Pacific Merger") in accordance with California Law.  
Pacific shall be the surviving corporation in the Pacific 
Merger and shall continue its corporate existence under 
the laws of the State of California.  As a result of the 
Pacific Merger, Pacific shall become a subsidiary of the 
Company.  The effects and the consequences of the Pacific 
Merger shall be as set forth in Section 1.03(b).

               SECTION 1.02.  Effective Time of the 
Mergers; Closing.  (a)  On the Closing Date, (i) with 
respect to the Enova Merger, the parties thereto shall 
file the merger agreement in substantially the form 
attached as Exhibit 1.02(a)(i) with the Secretary of State 
of the State of California in such form as required by, 
and executed in accordance with the relevant provisions 
of, California Law (the "Enova Merger Agreement"), and 
(ii) with respect to the Pacific Merger, the parties 
thereto shall file the merger agreement in substantially 
the form attached as Exhibit 1.02(a)(ii) with the 
Secretary of State of the State of California, in such 
form as required by, and executed in accordance with the 
relevant provisions of, California Law (the "Pacific 
Merger Agreement").  The Enova Merger shall become 
effective at the time specified in the Enova Merger 
Agreement (the "Enova Effective Time"), and the Pacific 
Merger shall become effective at the time specified in the 
Pacific Merger Agreement (the "Pacific Effective Time").  
The effective time specified in the Enova Merger Agreement 
shall also be the effective time specified in the Pacific 
Merger Agreement.  The term "Effective Time" shall mean 
the time and date of the Pacific Effective Time.

               (b)The closing (the "Closing") of the 
Mergers shall take place at the offices of Shearman & 
Sterling, 777 South Figueroa Street, 34th Floor, Los 
Angeles, California 90017-5418 at 10:00 A.M., local time, 
on the second business day immediately following the date 
on which the last of the conditions set forth in Article 
VII hereof is fulfilled or waived, or at such other time 
and date and place as Pacific and Enova shall mutually 
agree (the "Closing Date").

               SECTION 1.03.  Effects of the Mergers.  (a)  
At the Enova Effective Time, (i) the Articles of 
Incorporation of Enova, as in effect immediately prior to 
the Enova Effective Time, shall be the Articles of 
Incorporation of Enova as the surviving corporation in the 
Enova Merger until thereafter amended as provided by law 
and such Articles of Incorporation, and (ii) the Bylaws of 
Enova, as in effect immediately prior to the Enova 
Effective Time, shall be the Bylaws of Enova as the 
surviving corporation in the Enova Merger, until 
thereafter amended as provided by law, the Articles of 
Incorporation of the surviving corporation and such 
Bylaws.  Subject to the foregoing, the additional effects 
of the Enova Merger shall be as provided in the applicable 
provisions of California Law.

               (b)At the Pacific Effective Time, (i) the 
Articles of Incorporation of Pacific, as in effect 
immediately prior to the Pacific Effective Time, shall be 
the Articles of Incorporation of Pacific as the surviving 
corporation in the Pacific Merger until thereafter amended 
as provided by law and such Articles of Incorporation, and 
(ii) the Bylaws of Pacific, as in effect immediately prior 
to the Pacific Effective Time shall be the Bylaws of 
Pacific as the surviving corporation in the Pacific 
Merger, until thereafter amended as provided by law, the 
Articles of Incorporation of the surviving corporation and 
such Bylaws.  Subject to the foregoing, the additional 
effects of the Pacific Merger shall be as provided in the 
applicable provisions of California Law.

               (c)The parties shall take all appropriate 
action so that at the Effective Time, (i) the Articles of 
Incorporation of the Company shall be in such form as 
shall mutually be agreed to by Pacific and Enova prior to 
the Effective Time, and (ii) the Bylaws of the Company 
shall be in such form as shall mutually be agreed to by 
Pacific and Enova prior to the Effective Time.

                                     ARTICLE II

       CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES

               SECTION 2.01.  Conversion of Securities.  
(a)  At the Enova Effective Time, by virtue of the Enova 
Merger and without any action on the part of any holder of 
any capital stock of Enova or Newco Enova Sub:

                              (i)Cancellation of Certain 
Enova Common Stock.  Each share of      Common Stock, no 
par value, of Enova (the "Enova Common Stock") that is 
owned      by subsidiaries of Enova or by Pacific, the 
Company or any of their subsidiaries shall be cancelled 
and cease to exist.

  (ii)Conversion of Enova Common Stock.  Each issued and  
outstanding share of Enova Common Stock (other than shares 
cancelled pursuant to  Section 2.01(a)(i) and Enova 
Dissenting Shares) shall be converted into the right to  
receive 1.00 (the "Enova Ratio") fully paid and non-
assessable share of Common  Stock, no par value, of the 
Company (the "Company Common Stock").  Upon such  
conversion, each holder of a certificate formerly 
representing any such shares shall  cease to have any 
rights with respect thereto, except the right to receive 
the shares of  Company Common Stock to be issued in 
consideration therefor upon the surrender of  such 
certificate in accordance with Section 2.02.

                              (iii)Conversion of Newco 
Enova Sub Common Stock.  The  aggregate of all shares of 
the capital stock of Newco Enova Sub issued and  
outstanding immediately prior to the Enova Effective Time 
shall be converted into the  right to receive that number 
of shares of Enova Common Stock which shall be  equivalent 
to the aggregate number of shares of Enova Common Stock 
outstanding  immediately prior to the Enova Effective 
Time.  

               (b)At the Pacific Effective Time, by virtue 
of the Pacific Merger and without any action on the part 
of any holder of any capital stock of Pacific or Newco 
Pacific Sub:

    (i)Cancellation of Certain Pacific Common Stock.  Each 
share of  Common Stock of Pacific (the "Pacific Common 
Stock"), including any associated  right (the "Pacific 
Right") to receive or purchase shares of the capital stock 
of Pacific  pursuant to the terms of a Rights Agreement, 
dated as of March 7, 1989 between  Pacific and Chemical 
Bank, as successor Rights Agent thereunder (the "Pacific 
Rights  Agreement"), that is owned by subsidiaries of 
Pacific or by Enova, the Company or  any of their 
subsidiaries shall be cancelled and cease to exist.  All 
references in this  Agreement to Pacific Common Stock 
shall be deemed to include the associated Pacific  Rights.

(ii)Conversion of Pacific Common Stock.  Each issued and  
outstanding share of Pacific Common Stock (other than 
shares cancelled pursuant to  Section 2.01(b)(i) and 
Pacific Dissenting Shares) shall be converted into the 
right to  receive 1.5038 (the "Pacific Ratio", and 
together with the Enova Ratio, the  "Exchange Ratios") 
shares of fully paid and non-assessable shares of Company  
Common Stock.  Upon such conversion, each holder of a 
certificate formerly  representing any such shares shall 
cease to have any rights with respect thereto,  except the 
right to receive the shares of Company Common Stock to be 
issued in  consideration therefor upon the surrender of 
such certificate in accordance with  Section 2.02.

  (iii)Conversion of Newco Pacific Sub Common Stock.  The  
aggregate of all shares of the capital stock of Newco 
Pacific Sub issued and  outstanding immediately prior to 
the Pacific Effective Time shall be converted into the  
right to receive that number of shares of Pacific Common 
Stock which shall be  equivalent to the aggregate number 
of shares of Pacific Common Stock outstanding  immediately 
prior to the Pacific Effective Time.  (iv)Pacific 
Preferred Stock to Remain Unchanged.  All issued and  
outstanding shares of Class A Preferred Stock of Pacific 
(the "Pacific Class A  Preferred Stock") and of Preferred 
Stock of Pacific (the "Pacific Preferred Stock")  shall be 
unchanged and shall remain outstanding after the Pacific 
Merger. 

 (c)At the Effective Time, by virtue of the Mergers and 
without any action on the part of any holder of any 
capital stock of Enova, Pacific or the Company, each share 
of Company Common Stock issued and outstanding immediately 
prior to the Effective Time shall be cancelled, and no 
consideration shall be delivered in exchange therefor.

               SECTION 2.02.  Exchange of Certificates.

               (a)Deposit with Exchange Agent.  As soon as 
practicable after the Effective Time, the Company shall 
deposit with such bank or trust company mutually agreeable 
to Pacific and Enova (the "Exchange Agent"), certificates 
representing shares of Company Common Stock required to 
effect the exchanges referred to in Sections 2.01(a)(ii) 
and (b)(ii).

               (b)Exchange Procedures.  As soon as 
practicable after the Effective Time, the Exchange Agent 
shall mail to each holder of record of a certificate or 
certificates which immediately prior to the Effective Time 
represented outstanding shares of Enova Common Stock or 
Pacific Common Stock (the "Certificates") that were 
converted (the "Converted Shares") into the right to 
receive shares of Company Common Stock (the "Company 
Shares") pursuant to Section 2.01, (i) a letter of 
transmittal (which shall specify that delivery shall be 
effected, and risk of loss and title to the Certificates 
shall pass, only upon actual delivery of the Certificates 
to the Exchange Agent) and (ii) instructions for use in 
effecting the surrender of the Certificates in exchange 
for certificates representing Company Shares.  Upon 
surrender of a Certificate to the Exchange Agent for 
cancellation (or to such other agent or agents as may be 
appointed by agreement of Pacific and Enova), together 
with a duly executed letter of transmittal and such other 
documents as the Exchange Agent shall require, the holder 
of such Certificate shall be entitled to receive in 
exchange therefor a certificate representing that number 
of whole Company Shares which such holder has the right to 
receive pursuant to the provisions of this Article II.  In 
the event of a transfer of ownership of Converted Shares 
which is not registered in the transfer records of Enova 
or Pacific, as the case may be, a certificate representing 
the proper number of Company Shares may be issued to a 
transferee if the Certificate representing such Converted 
Shares is presented to the Exchange Agent, accompanied by 
all documents required to evidence and effect such 
transfer and by evidence satisfactory to the Exchange 
Agent that any applicable stock transfer taxes have been 
paid.  Until surrendered as contemplated by this Section 
2.02, each Certificate shall be deemed at any time after 
the Effective Time to represent only the right to receive 
upon such surrender the certificate representing Company 
Shares and cash in lieu of any fractional shares of 
Company Common Stock ("Merger Consideration") as 
contemplated by this Section 2.02. 

               (c)Distributions with Respect to 
Unexchanged Shares.  No dividends or other distributions 
declared or made after the Effective Time with respect to 
Company Shares with a record date after the Effective Time 
shall be paid to the holder of any unsurrendered 
Certificate with respect to the Company Shares represented 
thereby and no cash payment in lieu of fractional shares 
shall be paid to any such holder pursuant to Section 
2.02(d) until the holder of record of such Certificate 
shall surrender such Certificate.  Subject to the effect 
of unclaimed property, escheat and other applicable laws, 
following surrender of any such Certificate, there shall 
be paid to the record holder of the certificates 
representing whole Company Shares issued in exchange 
therefor, without interest, (i) at the time of such 
surrender, the amount of any cash payable in lieu of a 
fractional share of Company Common Stock to which such 
holder is entitled pursuant to Section 2.02(d) and the 
amount of dividends or other distributions with a record 
date after the Effective Time theretofore paid with 
respect to such whole Company Shares and (ii) at the 
appropriate payment date, the amount of dividends or other 
distributions with a record date after the Effective Time 
but prior to surrender and a payment date subsequent to 
surrender payable with respect to such whole Company 
Shares, as the case may be. 

               (d)No Fractional Securities.  
Notwithstanding any other provision of this Agreement, no 
certificates or scrip representing fractional shares of 
Company Common Stock shall be issued upon the surrender 
for exchange of Certificates and such fractional shares 
shall not entitle the owner thereof to vote or to any 
other rights of a holder of Company Common Stock.  Each 
holder of a fractional share interest shall be paid an 
amount in cash representing such holder's proportionate 
interest in the net proceeds from the sale by the Exchange 
Agent on behalf of all such holders of the aggregate of 
the fractions of shares of Company Common Stock that would 
otherwise be issued to such holders ("Excess Shares").  
The sale of the Excess Shares by the Exchange Agent shall 
be executed on the New York Stock Exchange, Inc. (the 
"NYSE") through one or more member firms of the NYSE and 
shall be executed in round lots to the extent practicable.  
Until the net proceeds of such sale or sales have been 
distributed to the former holders of Pacific Common Stock 
and Enova Common Stock, the Company will cause the 
Exchange Agent to hold such proceeds in trust for the 
holders of such fractional share interests (the "Shares 
Trust").  The Company shall pay all commissions, transfer 
taxes and other out-of-pocket transaction costs, including 
the expenses and compensation of the Exchange Agent, 
incurred in connection with such sale of the Excess 
Shares.  The Exchange Agent shall determine the portion of 
the Shares Trust to which each former holder of Pacific 
Common Stock or Enova Common Stock shall be entitled, if 
any, by multiplying the amount of the aggregate net 
proceeds comprising the Shares Trust by a fraction the 
numerator of which is the amount of the fractional shares 
of Company Common Stock to which such former holder of 
Pacific Common Stock or Enova Common Stock is entitled and 
the denominator of which is the aggregate amount of 
fractional share interests to which all holders of Company 
Common Stock are entitled.  As soon as practicable after 
the determination of the amount of cash, if any, to be 
paid to former holders of Pacific Common Stock and Enova 
Common Stock in lieu of any fractional shares of Company 
Common Stock interests, the Exchange Agent shall make 
available such amounts to such former holders of Pacific 
Common Stock and Enova Common Stock without interest.

               (e)Closing of Transfer Books.  From and 
after the Enova Effective Time or the Pacific Effective 
Time, as the case may be, the stock transfer books of 
Enova and Pacific shall be closed and no transfer of any 
capital stock of Enova or Pacific shall thereafter be 
made.  If, after the Effective Time, Certificates are 
presented to the Company, they shall be cancelled and 
exchanged for certificates representing the appropriate 
Company Shares as provided in Section 2.02.

               (f)Termination of Exchange Agent.  Any 
certificates representing Company Shares deposited with 
the Exchange Agent pursuant to Section 2.02(a) and not 
exchanged within one year after the Effective Time 
pursuant to this Section 2.02 shall be returned by the 
Exchange Agent to the Company, which shall thereafter act 
as Exchange Agent.  All funds held by the Exchange Agent 
for payment to the holders of unsurrendered Certificates 
and unclaimed at the end of one year from the Effective 
Time shall be returned to the Company, after which time 
any holder of unsurrendered Certificates shall look as a 
general creditor only to the Company for payment of such 
funds to which such holder may be due, subject to 
applicable law.  The Company shall not be liable to any 
person for such shares or funds delivered to a public 
official pursuant to any applicable unclaimed property, 
escheat or similar law.

               SECTION 2.03.  Dissenting Shares.  (a)  
Notwithstanding any provision of this Agreement to the 
contrary, any shares of capital stock of Pacific or Enova 
held by a holder who has exercised dissenters' rights for 
such shares in accordance with California Law and who, as 
of the Effective Time, has not effectively withdrawn or 
lost such dissenters' rights ("Pacific Dissenting Shares" 
or "Enova Dissenting Shares", as the case may be, and 
collectively "Dissenting Shares"), shall not be converted 
into or represent a right to receive Company Common Stock 
in the Pacific Merger (in the case of Pacific Dissenting 
Shares) or in the Enova Merger (in the case of Enova 
Dissenting Shares), but the holder thereof shall only be 
entitled to such rights as are granted by California Law. 

 (b)Notwithstanding the provisions of subsection (a), if 
any holder of Dissenting Shares shall effectively withdraw 
or lose (through failure to perfect or otherwise) his 
dissenters' rights, then, as of the later of the Pacific 
Effective Time or the Enova Effective Time, as applicable, 
or the occurrence of such event, such holder's shares 
shall automatically be converted into and represent only 
the right to receive the applicable Merger Consideration, 
without interest thereon, upon surrender of the 
certificate or certificates representing such Dissenting 
Shares.

               (c)Enova shall give Pacific and Pacific 
shall give Enova (i) prompt notice of any written demands 
received pursuant to Section 1301 of California Law, 
withdrawals of such demands, and any other instruments 
served pursuant to California Law and received thereby and 
(ii) the opportunity to participate in all negotiations 
and proceedings with respect to such demands.  Neither 
Pacific nor Enova shall, except with the prior written 
consent of the other, voluntarily make any payment with 
respect to any such demands or offer to settle or settle 
any such demands.


                           ARTICLE III

            REPRESENTATIONS AND WARRANTIES OF PACIFIC

               Pacific represents and warrants to Enova as 
follows:

               SECTION 3.01.  Organization and 
Qualification.  Except as set forth in Section 3.01 of the 
Pacific Disclosure Schedule, each of Pacific and its 
subsidiaries is a corporation duly organized, validly 
existing and in good standing under the laws of its state 
of incorporation, has all requisite power and authority, 
and has been duly authorized by all necessary approvals 
and orders, to own, lease and operate its assets and 
properties and to carry on its business as it is now being 
conducted, and is duly qualified and in good standing to 
do business in each jurisdiction in which the nature of 
its business or the ownership or leasing of its assets and 
properties makes such qualification necessary other than 
in such jurisdictions where the failure to be so qualified 
and in good standing will not, when taken together with 
all other such failures, have a material adverse effect on 
the operations, properties, assets, financial condition or 
the results of operations of Pacific and its subsidiaries 
taken as a whole or on the consummation of the 
transactions contemplated by this Agreement (any such 
material adverse effect being hereinafter referred to as a 
"Pacific Material Adverse Effect") or a material adverse 
effect on the ability of the Energy Marketing Joint 
Venture to achieve the business objectives contemplated by 
the Summary of Terms attached as Exhibit A (any such 
material adverse effect being hereinafter referred to as a 
"Joint Venture Material Adverse Effect").
                                   SECTION 3.02.  
Subsidiaries.  Section 3.02 of the Pacific Disclosure 
Schedule sets forth a description as of the date hereof of 
all subsidiaries and joint ventures of Pacific, including 
the name of each such entity and Pacific's interest 
therein, and, as to each subsidiary or joint venture 
identified as a "Material Pacific Entity" in Section 3.02 
of the Pacific Disclosure Schedule, a brief description of 
the principal line or lines of business conducted by each 
such entity.  Except as set forth in Section 3.02 of the 
Pacific Disclosure Schedule, none of such entities is a 
"public utility company", a "holding company", a 
"subsidiary company" or an "affiliate" of any public 
utility company within the meaning of Section 2(a)(5), 
2(a)(7), 2(a)(8) or 2(a)(11) of the Public Utility Holding 
Company Act of 1935, as amended (the "1935 Act"), 
respectively, or a "public utility" within the meaning of 
Section 201(e) of the Federal Power Act (the "Power Act").  
Except as set forth in Section 3.02 of the Pacific 
Disclosure Schedule, all of the issued and outstanding 
shares of capital stock of each subsidiary of Pacific are 
validly issued, fully paid, nonassessable and free of 
preemptive rights, are owned directly or indirectly by 
Pacific free and clear of any liens, claims, encumbrances, 
security interests, equities, charges and options of any 
nature whatsoever ("Encumbrances") and there are no 
outstanding subscriptions, options, calls, contracts, 
voting trusts, proxies or other commitments, 
understandings, restrictions, arrangements, rights or 
warrants, including any right of conversion or exchange 
under any outstanding security, instrument or other 
agreement, obligating any such subsidiary to issue, 
deliver or sell, or cause to be issued, delivered or sold, 
additional shares of its capital stock or obligating it to 
grant, extend or enter into any such agreement or 
commitment. 
               SECTION 3.03.  Capitalization.  

               (a)Pacific.  The authorized capital stock 
of Pacific consists of (i) 600,000,000 shares of Pacific 
Common Stock, (ii) 5,000,000 shares of Pacific Class A 
Preferred Stock and (iii) 10,000,000 shares of Pacific 
Preferred Stock.  As of the close of business on September 
30, 1996, there were issued and outstanding (i) 85,034,885 
shares of Pacific Common Stock, (ii) no shares of Pacific 
Class A Preferred Stock and (iii) 800,253 shares of 
Pacific Preferred Stock consisting of 300,000 shares of a 
series of $4.50 dividend preferred stock, 100,000 shares 
of a series of $4.40 dividend preferred stock, 200,000 
shares of a series of $4.75 dividend preferred stock, 
200,000 shares of a series of $4.36 dividend preferred 
stock and 253 shares of a series of $4.75 dividend 
preferred stock (convertible on or before October 31, 
1996).  All of the issued and outstanding shares of the 
capital stock of Pacific are validly issued, fully paid, 
nonassessable and free of preemptive rights.  Except as 
set forth in Section 3.03(a) of the Pacific Disclosure 
Schedule, as of the date hereof, there are no outstanding 
subscriptions, options, calls, contracts, voting trusts, 
proxies or other commitments, understandings, 
restrictions, arrangements, rights or warrants, including 
any right of conversion or exchange under any outstanding 
security, instrument or other agreement, obligating 
Pacific or any of its subsidiaries to issue, deliver or 
sell, or cause to be issued, delivered or sold, additional 
shares of the capital stock of Pacific or obligating 
Pacific or any of its subsidiaries to grant, extend or 
enter into any such agreement or commitment, other than 
under the Pacific Rights Agreement. 

   (b)Pacific Sub.  The authorized capital stock of 
Southern California Gas Company, a California corporation 
all of whose issued and outstanding common stock is owned 
by Pacific ("Pacific Sub"), consists of (i) 100,000,000 
shares of common stock, no par value (the "Pacific Sub 
Common Stock"), and (ii) shares of preferred and 
preference stock (collectively the "Pacific Sub Preferred 
Stock") consisting of (A) 160,000 shares of Preferred 
Stock, par value $25 each (the "Pacific Sub $25 
Preferred"), (B) 840,000 shares of Preferred Stock, Series 
A, par value $25 each (the "Pacific Sub Series A 
Preferred"), (C) 5,000,000 shares of Series Preferred 
Stock, no par value (the "Pacific Sub Series Preferred"), 
and (D) 5,000,000 shares of Preference Stock (the "Pacific 
Sub Preference Stock").  As of the close of business on 
September 30, 1996, there were issued and outstanding 
91,300,000 shares of Pacific Sub Common Stock, 79,011 
shares of Pacific Sub $25 Preferred, 783,036 shares of 
Pacific Sub Series A Preferred, 3,000,000 shares of 
Pacific Sub Series Preferred and no shares of Pacific Sub 
Preference Stock.  All of the issued and outstanding 
shares of the capital stock of Pacific Sub are validly 
issued, fully paid, nonassessable and free of preemptive 
rights.  Except as set forth in Section 3.03(b) of the 
Pacific Disclosure Schedule, as of the date hereof, there 
are no outstanding subscriptions, options, calls, 
contracts, voting trusts, proxies or other commitments, 
understandings, restrictions, arrangements, rights or 
warrants, including any right of conversion or exchange 
under any outstanding security, instrument or other 
agreement, obligating Pacific or any of its subsidiaries 
to issue, deliver or sell, or cause to be issued, 
delivered or sold, the capital stock of Pacific Sub or 
obligating Pacific or any of its subsidiaries to grant, 
extend or enter into any such agreement or commitment.    

               SECTION 3.04.  Authority; Non-
Contravention; Statutory Approvals; Compliance.

 (a)Authority.  Pacific has all requisite power and 
authority to enter into this Agreement and the Energy 
Marketing Joint Venture Agreement and, subject to the 
applicable Pacific Shareholders' Approval and the 
applicable Pacific Required Statutory Approvals, to 
consummate the transactions contemplated hereby or 
thereby.  The execution and delivery of this Agreement and 
the Energy Marketing Joint Venture Agreement and the 
consummation by Pacific of the transactions contemplated 
hereby and thereby have been duly authorized by all 
necessary corporate action on the part of Pacific, subject 
in the case of this Agreement to obtaining the applicable 
Pacific Shareholders' Approval.  This Agreement has been, 
and the Energy Marketing Joint Venture Agreement upon 
execution and delivery will be, duly and validly executed 
and delivered by Pacific and, assuming the due 
authorization, execution and delivery hereof and thereof 
by Enova, the Company, Newco Enova Sub and Newco Pacific 
Sub, as the case may be, constitutes or will constitute 
the valid and binding obligation of Pacific enforceable 
against it in accordance with its terms.

               (b)Non-Contravention.  Except as set forth 
in Section 3.04(b) of the Pacific Disclosure Schedule, the 
execution and delivery of this Agreement and the Energy 
Marketing Joint Venture Agreement by Pacific do not, and 
the consummation of the transactions contemplated hereby 
or thereby will not (with or without notice or lapse of 
time or both), violate, conflict with, or result in a 
breach of any provision of, or constitute a default under, 
or result in the termination of, or accelerate the 
performance required by, or result in a right of 
termination, cancellation, or acceleration of any 
obligation or the loss of a material benefit under, or 
result in the creation of any Encumbrance upon any of the 
properties or assets (any such violation, conflict, 
breach, default, right of termination, cancellation or 
acceleration, loss or creation, a "Violation") of Pacific 
or any of its subsidiaries or joint ventures pursuant to 
any provisions of (i) the articles of incorporation, by-
laws or similar governing documents of Pacific or any of 
its subsidiaries or joint ventures, (ii) subject to 
obtaining the Pacific Required Statutory Approvals and the 
receipt of the Pacific Shareholders' Approval, any 
statute, law, ordinance, rule, regulation, judgment, 
decree, order, injunction, writ, permit or license of any 
Governmental Authority applicable to Pacific or any of its 
subsidiaries or joint ventures or any of their respective 
properties or assets or (iii) subject to obtaining the 
third-party consents set forth in Section 3.04(b) of the 
Pacific Disclosure Schedule (the "Pacific Required 
Consents"), any note, bond, mortgage, indenture, deed of 
trust, license, franchise, permit, concession, contract, 
lease or other instrument, obligation or agreement of any 
kind to which Pacific or any of its subsidiaries or joint 
ventures is now a party or by which it or any of its 
properties or assets may be bound or affected, excluding 
from the foregoing clauses (ii) and (iii) such Violations 
that would not, in the aggregate, have a Pacific Material 
Adverse Effect or a Joint Venture Material Adverse Effect.

               (c)Statutory Approvals.  Except as set 
forth in Section 3.04(c) of the Pacific Disclosure 
Schedule, no declaration, filing or registration with, or 
notice to or authorization, consent or approval of, any 
court, governmental or regulatory body (including a stock 
exchange or other self-regulatory body) or authority, 
domestic or foreign (each, a "Governmental Authority") is 
necessary for (i) the execution and delivery of this 
Agreement or the Energy Marketing Joint Venture Agreement 
by Pacific or the consummation by Pacific of the 
transactions contemplated hereby or thereby, the failure 
to obtain, make or give which would have, in the 
aggregate, a Pacific Material Adverse Effect or a Joint 
Venture Material Adverse Effect, and (ii) the execution 
and delivery of this Agreement by the Company or the 
consummation by the Company of the transactions 
contemplated hereby, the failure to obtain, make or give 
which would have, in the aggregate, a material adverse 
effect on the operations, properties, assets, financial 
condition or the results of operations of the Company and 
its prospective subsidiaries taken as a whole or on the 
consummation of the transactions contemplated by this 
Agreement (collectively, the "Pacific Required Statutory 
Approvals", it being understood that references in this 
Agreement to "obtaining" such Pacific Required Statutory 
Approvals shall mean making such declarations, filings or 
registrations; giving such notice; obtaining such consents 
or approvals; and having such waiting periods expire as 
are necessary to avoid a violation of law).

               (d)Compliance.  Except as set forth in 
Section 3.04(d) of the Pacific Disclosure Schedule or in 
Section 3.11 of the Pacific Disclosure Schedule, or as 
disclosed in the Pacific SEC Reports, neither Pacific nor 
any of its subsidiaries nor, to the knowledge of Pacific, 
any of its joint ventures, is in violation of or is under 
investigation with respect to, or has been given notice or 
been charged with any violation of, any law, statute, 
order, rule, regulation, ordinance or judgment (including, 
without limitation, any applicable environmental law, 
ordinance or regulation) of any Governmental Authority, 
except for violations which, in the aggregate do not, and 
could not reasonably be expected to, have a Pacific 
Material Adverse Effect or a Joint Venture Material 
Adverse Effect.  Except as set forth in Section 3.04(d) of 
the Pacific Disclosure Schedule or in Section 3.11 of the 
Pacific Disclosure Schedule, Pacific and each of its 
subsidiaries and joint ventures have all permits, 
licenses, franchises and other governmental 
authorizations, consents and approvals necessary to 
conduct their businesses as presently conducted, except 
those which the failure to obtain would not, in the 
aggregate, have a Pacific Material Adverse Effect or a 
Joint Venture Material Adverse Effect.

               SECTION 3.05.  Reports and Financial 
Statements.  The filings required to be made by Pacific 
and its subsidiaries under the Securities Act of 1933, as 
amended (the "Securities Act"), the Securities Exchange 
Act of 1934, as amended (the "Exchange Act"), the 
California Public Utilities Act, the Power Act, the 
Natural Gas Act (the "Gas Act") or the 1935 Act have been 
filed with the Securities and Exchange Commission (the 
"SEC"), the California Public Utilities Commission (the 
"CPUC") or the Federal Energy Regulatory Commission (the 
"FERC"), as the case may be, including all forms, 
statements, reports, agreements (oral or written) and all 
documents, exhibits, amendments and supplements 
appertaining thereto, and Pacific has complied in all 
material respects with all applicable requirements of the 
appropriate act and the rules and regulations thereunder.  
Pacific has made available to Enova a true and complete 
copy of each report, schedule, registration statement and 
definitive proxy statement filed by Pacific with the SEC 
since January 1, 1994 (as such documents have since the 
time of their filing been amended, the "Pacific SEC 
Reports").  As of their respective dates, the Pacific SEC 
Reports did not contain any 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, in light of the circumstances under which they 
were made, not misleading.  The audited consolidated 
financial statements and unaudited interim financial 
statements of Pacific included in the Pacific SEC Reports 
(collectively, the "Pacific Financial Statements") have 
been prepared in accordance with GAAP (except as may be 
indicated therein or in the notes thereto and except with 
respect to unaudited statements as permitted by Form 10-Q 
of the SEC) and fairly present the financial position of 
Pacific as of the dates thereof and the results of its 
operations and cash flows for the periods then ended, 
subject, in the case of the unaudited interim financial 
statements, to normal, recurring audit adjustments.  True, 
accurate and complete copies of the Articles of 
Incorporation and Bylaws of Pacific, as in effect on the 
date hereof, have previously been made available to Enova.

               SECTION 3.06.  Absence of Certain Changes 
or Events; Absence of Undisclosed Liabilities. 

 (a)  Except as set forth in the Pacific SEC Reports or 
Section 3.06 of the Pacific Disclosure Schedule, from 
January 1, 1996 through the date hereof each of Pacific 
and its subsidiaries and joint ventures has conducted its 
business only in the ordinary course of business 
consistent with past practice and there has not been, and 
no fact or condition exists which could reasonably be 
expected to have, a Pacific Material Adverse Effect or a 
Joint Venture Material Adverse Effect. 
               (b)Neither Pacific nor any of its 
subsidiaries has any liabilities or obligations (whether 
absolute, accrued, contingent or otherwise) of a nature 
required by GAAP to be reflected in a consolidated 
corporate balance sheet, except liabilities, obligations 
or contingencies that are accrued or reserved against in 
the consolidated financial statements of Pacific or 
reflected in the notes thereto for the year ended December 
31, 1995, or which were incurred after December 31, 1995 
in the ordinary course of business and would not, in the 
aggregate, have a Pacific Material Adverse Effect or a 
Joint Venture Material Adverse Effect.

               SECTION 3.07.  Litigation.  Except as 
disclosed in the Pacific SEC Reports or as set forth in 
Section 3.07 of the Pacific Disclosure Schedule or in 
Section 3.11 of the Pacific Disclosure Schedule, (i) there 
are as of the date hereof no claims, suits, actions or 
proceedings, pending or, to the knowledge of Pacific, 
threatened, nor are there, to the knowledge of Pacific, 
any investigations or reviews pending or threatened 
against, relating to or affecting Pacific or any of its 
subsidiaries or joint ventures, (ii) there have not been 
any developments since June 30, 1996 with respect to such 
disclosed claims, suits, actions, proceedings, 
investigations or reviews and (iii) there are no 
judgments, decrees, injunctions, rules or orders of any 
court, governmental department, commission, agency, 
instrumentality or authority or any arbitrator applicable 
to Pacific or any of its subsidiaries or joint ventures, 
which, when taken together with any other nondisclosures 
described in clauses (i), (ii) or (iii), could reasonably 
be expected to have a Pacific Material Adverse Effect or a 
Joint Venture Material Adverse Effect.

               SECTION 3.08.  Registration Statement and 
Proxy Statement.  None of the information supplied or to 
be supplied by or on behalf of Pacific for inclusion or 
incorporation by reference in (i) the registration 
statement on Form S-4 to be filed with the SEC by the 
Company in connection with the issuance of shares of 
Company Common Stock in the Mergers (the "Registration 
Statement") will, at the time the Registration Statement 
is filed with the SEC and at the time it becomes effective 
under the Securities Act, contain 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 and (ii) the joint proxy 
statement in definitive form relating to the meetings of 
Pacific and Enova shareholders to be held in connection 
with the Mergers (the "Proxy Statement") will, at the date 
mailed to shareholders of Pacific and Enova and at the 
times of the meetings of shareholders to be held in 
connection with the Mergers, contain any untrue statement 
of a material fact or omit to state any material fact 
required to be stated therein or necessary in order to 
make the statements therein, in light of the circumstances 
under which they are made, not misleading.  The 
Registration Statement and the Proxy Statement will comply 
as to form in all material respects with the provisions of 
the Securities Act and the Exchange Act, respectively, and 
the rules and regulations thereunder.

 SECTION 3.09.  Tax Matters.  

"Taxes", as used in this Agreement, means any U.S. 
federal, state, county, local or foreign taxes, charges, 
fees, levies, or other assessments, including, without 
limitation, all net income, gross income, sales and use, 
ad valorem, transfer, gains, profits, excise, franchise, 
real and personal property, gross receipt, capital stock, 
production, business and occupation, disability, 
employment, payroll, license, estimated, stamp, custom 
duties, severance or withholding taxes or charges imposed 
by any governmental entity, and includes any interest and 
penalties (civil or criminal) on or additions to any such 
taxes and any expenses incurred in connection with the 
determination, settlement or litigation of any Tax 
liability.  "Tax Return", as used in this Agreement, means 
a report, return or other information required to be 
supplied to any governmental entity with respect to Taxes 
including, where permitted or required, combined or 
consolidated returns. 
               (a)Filing of Timely Tax Returns.  Except as 
set forth in Section 3.09(a) of the Pacific Disclosure 
Schedule, Pacific and each of its subsidiaries have filed 
(or there has been filed on their behalf) all Tax Returns 
required to be filed by each of them under applicable law. 
All Tax Returns were in all material respects (and, as to 
Tax Returns not filed as of the date hereof, will be) 
true, complete and correct and filed on a timely basis.

               (b)Payment of Taxes.  Pacific and each of 
its subsidiaries have, within the time and in the manner 
prescribed by law, paid (and until the Closing Date will 
pay within the time and in the manner prescribed by law) 
all Taxes that are currently due and payable except for 
those contested in good faith and for which adequate 
reserves have been taken.

               (c) Tax Reserves.  Pacific and its 
subsidiaries have established (and until the Closing Date 
will maintain) on their books and records reserves 
adequate to pay all Taxes, all deficiencies in Taxes 
asserted or proposed against Pacific or its subsidiaries 
and reserves for deferred income taxes in accordance with 
GAAP.

               (d) Tax Liens.  There are no Tax liens upon 
the assets of Pacific or any of its subsidiaries except 
liens for Taxes not yet due.

               (e) Withholding Taxes.  Pacific and each of 
its subsidiaries have complied (and until the Closing Date 
will comply) in all respects with the provisions of the 
Code relating to the payment and withholding of Taxes, 
including, without limitation, the withholding and 
reporting requirements under Sections 1441 through 1464, 
3401 through 3406, and 6041 and 6049 of the Code, as well 
as similar provisions under any other laws, and have, 
within the time and in the manner prescribed by law, 
withheld from employee wages and paid over to the proper 
governmental authorities all amounts required.

               (f) Extensions of Time for Filing Tax 
Returns.  Except as set forth in Section 3.09(f) of the 
Pacific Disclosure Schedule, neither Pacific nor any of 
its subsidiaries has requested any extension of time 
within which to file any Tax Return, which Tax Return has 
not since been filed.

(g)Waivers of Statute of Limitations.  Except as set forth 
in Section 3.09(g) of the Pacific Disclosure Schedule, 
neither Pacific nor any of its subsidiaries has executed 
any outstanding waivers or comparable consents regarding 
the application of the statute of limitations with respect 
to any Taxes or Tax Returns.

               (h)Expiration of Statute of Limitations.  
Except as set forth in Section 3.09(h) of the Pacific 
Disclosure Schedule, the statute of limitations for the 
assessment of all federal income and California franchise 
Taxes has expired for all related Tax Returns of Pacific 
and each of its subsidiaries or those Tax Returns have 
been examined by the appropriate taxing authorities for 
all periods through the date hereof, and no deficiency for 
any such Taxes has been proposed, asserted or assessed 
against Pacific or any of its subsidiaries that has not 
been resolved and paid in full. 
               (i)Audit, Administrative and Court 
Proceedings.  Except as set forth in Section 3.09(i) of 
the Pacific Disclosure Schedule, no audits or other 
administrative proceedings or court proceedings are 
presently pending with regard to any Taxes or Tax Returns 
of Pacific or any of its subsidiaries, and neither Pacific 
nor any of its subsidiaries has any knowledge of any 
threatened action, audit or administrative or court 
proceeding with respect to any such Taxes or Tax Returns.

               (j)Powers of Attorney.  Except as set forth 
in Section 3.09(j) of the Pacific Disclosure Schedule, no 
power of attorney currently in force has been granted by 
Pacific or any of its subsidiaries concerning any Tax 
matter.

               (k)Tax Rulings.  Except as set forth in 
Section 3.09(k) of the Pacific Disclosure Schedule, 
neither Pacific nor any of its subsidiaries has received a 
Tax Ruling or entered into a Closing Agreement with any 
taxing authority that would have a continuing adverse 
effect after the Closing Date.  "Tax Ruling", as used in 
this Agreement, shall mean a written ruling of a taxing 
authority relating to Taxes.  "Closing Agreement", as used 
in this Agreement, shall mean a written and legally 
binding agreement with a taxing authority relating to 
Taxes.

               (l)Availability of Tax Returns.  Pacific 
and its subsidiaries have made available to Enova complete 
and accurate copies of (i) all Tax Returns, and any 
amendments thereto, filed by Pacific or any of its 
subsidiaries, (ii) all audit reports received from any 
taxing authority relating to any Tax Return filed by 
Pacific or any of its subsidiaries and (iii) any Closing 
Agreements entered into by Pacific or any of its 
subsidiaries with any taxingauthority.

               (m)Tax Sharing Agreements.  Except as set 
forth in Section 3.09(m) of the Pacific Disclosure 
Schedule, no agreements relating to allocating or sharing 
of Taxes exist between or among Pacific and any of its 
subsidiaries.   
             (n)Code Section 341(f).  Neither Pacific nor 
any of its subsidiaries has filed (or will file prior to 
the Closing) a consent pursuant to Section 341(f) of the 
Code or has agreed to have Section 341(f)(2) of the Code 
apply to any disposition of a subsection (f) asset (as 
that term is defined in Section 341(f)(4) of the Code) 
owned by Pacific or any of its subsidiaries.

               (o)Code Section 168.  No property of 
Pacific or any of its subsidiaries is property that 
Pacific or any such subsidiary or any party to this 
transaction is or will be required to treat as being owned 
by another person pursuant to the provisions of Section 
168(f)(8) of the Code (as in effect prior to its amendment 
by the Tax Reform Act of 1986) or is "tax-exempt use 
property" within the meaning of Section 168 of the Code.

               (p)Code Section 481 Adjustments.  Except as 
set forth in Section 3.09(p) of the Pacific Disclosure 
Schedule and except for adjustments that in the aggregate 
could not reasonably be expected to have a Pacific 
Material Adverse Effect, neither Pacific nor any of its 
subsidiaries is required to include in income any 
adjustment pursuant to Section 481(a) of the Code by 
reason of a voluntary change in accounting method 
initiated by Pacific or any of its subsidiaries, and to 
the best of the knowledge of Pacific, the Internal Revenue 
Service (the "IRS") has not proposed any such adjustment 
or change in accounting method.

               (q)Code Sections 6661 and 6662.  All 
transactions that could give rise to an understatement of 
federal income tax (within the meaning of Section 6661 of 
the Code for Tax Returns the due date for which was on or 
before December 31, 1989 and within the meaning of Section 
6662 of the Code for Tax Returns the due date for which 
was after December 31, 1989) that could reasonably be 
expected to result in a Pacific Material Adverse Effect 
have been adequately disclosed (or, with respect to Tax 
Returns filed following the Closing, will be adequately 
disclosed) on the Tax Returns of Pacific and its 
subsidiaries in accordance with Section 6661(b)(2)(B) of 
the Code for Tax Returns the due date for which was on or 
before to December 31, 1989, and in accordance with 
Section 6662(d)(2)(B) of the Code for Tax Returns the due 
date for which was after December 31, 1989. 
               (r)NOLs.  As of the date hereof, Pacific 
and its subsidiaries had net operating loss carryovers 
available to offset future income as set forth in Section 
3.09(r) of the Pacific Disclosure Schedule.  Section 
3.09(r) of the Pacific Disclosure Schedule sets forth the 
amount of and year of expiration of each company's net 
operating loss carryovers.

               (s)Credit Carryover.  As of the date 
hereof, Pacific and its subsidiaries had tax credit 
carryovers available to offset future tax liability as set 
forth in Section 3.09(s) of the Pacific Disclosure 
Schedule.  Section 3.09(s) of the Pacific Disclosure 
Schedule sets forth the amount and year of expiration of 
each company's tax credit carryovers.

               (t)Code Section 338 Elections.  Except as 
set forth in Section 3.09(t) of the Pacific Disclosure 
Schedule, no election under Section 338 of the Code (or 
any predecessor provision) has been made by or with 
respect to Pacific or any of its subsidiaries or any of 
their respective assets or properties. 

               (u)Acquisition Indebtedness.  Except as set 
forth in Section 3.09(u) of the Pacific Disclosure 
Schedule, no indebtedness of Pacific or any of its 
subsidiaries is "corporate acquisition indebtedness" 
within the meaning of Section 279(b) of the Code.

               (v)Intercompany Transactions.  Except as 
set forth in Section 3.09(v) of the Pacific Disclosure 
Schedule, neither Pacific nor any of its subsidiaries has 
engaged in any intercompany transactions within the 
meaning of Section 1.1502-13 of the Treasury Regulations 
for which any income remains unrecognized as of the close 
of the last taxable year prior to the Closing Date.

               (w)Code Section 280G.  Except as set forth 
in Section 3.09(w) of the Pacific Disclosure Schedule, 
neither Pacific nor any of its subsidiaries is a party to 
any agreement, contract, or arrangement that could result, 
on account of the transactions contemplated hereunder, 
separately or in the aggregate, in the payment of any 
"excess parachute payments" within the meaning of Section 
280G of the Code.

               SECTION 3.10.  Employee Matters; ERISA.

               (a)Benefit Plans.  Section 3.10(a) of the 
Pacific Disclosure Schedule contains a true and complete 
list of each material employee benefit plan, program or 
arrangement currently sponsored, maintained or contributed 
to by Pacific or any of its subsidiaries for the benefit 
of employees, former employees or directors and their 
beneficiaries in respect of services provided to any such 
entity, including, but not limited to, any employee 
benefit plans within the meaning of Section 3(3) of the 
Employee Retirement Income Security Act of 1974, as 
amended ("ERISA"), and any material employment, 
consulting, non-compete, severance or change in control 
agreement (collectively, the "Pacific Benefit Plans").  
For the purposes of this Section 3.10 only, the term 
"Pacific" shall be deemed to include predecessors thereof. 
               (b)Contributions.  Except as set forth in 
Section 3.10(b) of the Pacific Disclosure Schedule, all 
material contributions and other payments required to be 
made by Pacific or any of its subsidiaries to any Pacific 
Benefit Plan (or to any person pursuant to the terms 
thereof) have been made or the amount of such payment or 
contribution obligation has been reflected in the Pacific 
Financial Statements.

               (c)Qualification; Compliance.  Except as 
set forth in Section 3.10(c) of the Pacific Disclosure 
Schedule, each of the Pacific Benefit Plans intended to be 
"qualified" within the meaning of Section 401(a) of the 
Code has been determined by the IRS to be so qualified, 
and, to the best knowledge of Pacific, no circumstances 
exist that are reasonably expected by Pacific to result in 
the revocation of any such determination.  Pacific is in 
compliance in all material respects with, and each Pacific 
Benefit Plan is and has been operated in all material 
respects in compliance with, all applicable laws, rules 
and regulations governing such plan, including, without 
limitation, ERISA and the Code.  Each Pacific Benefit Plan 
intended to provide for the deferral of income, the 
reduction of salary or other compensation, or to afford 
other income tax benefits, complies with the requirements 
of the applicable provisions of the Code or other laws, 
rules and regulations required to provide such income tax 
benefits. 
               (d)Liabilities.  With respect to the 
Pacific Benefit Plans individually and in the aggregate, 
no event has occurred, and, to the best knowledge of 
Pacific, there exists no condition or set of circumstances 
that could subject Pacific or any of its subsidiaries to 
any liability arising under the Code, ERISA or any other 
applicable law (including, without limitation, any 
liability to any such plan or the Pension Benefit Guaranty 
Corporation (the "PBGC")), or under any indemnity 
agreement to which Pacific is a party, which liability, 
excluding liability for benefit claims or PBGC premiums 
and funding obligations payable in the ordinary course, 
could reasonably be expected to have a Pacific Material 
Adverse Effect.

               (e)Welfare Plans.  Except as set forth in 
Section 3.10(e) of the Pacific
Disclosure Schedule, none of the Pacific Benefit Plans 
that are "welfare plans", within the
meaning of Section 3(1) of ERISA, provides for any retiree 
benefits other than coverage
mandated by applicable law or benefits the full cost of 
which is borne by the retiree.

               (f)Documents Made Available.  Pacific has 
made available to Enova a true and correct copy of each 
collective bargaining agreement to which Pacific or any of 
its subsidiaries is a party or under which Pacific or any 
of its subsidiaries has obligations and, with respect to 
each Pacific Benefit Plan, (i) such plan and summary plan 
description, (ii) the most recent annual report filed with 
the IRS, (iii) each related trust agreement, insurance 
contract, service provider or investment management 
agreement (including all amendments to each such 
document), (iv) the most recent determination of the IRS 
with respect to the qualified status of such plan and (v) 
the most recent actuarial report or valuation.

               (g)Payments Resulting from Mergers.  Except 
as set forth in Section 3.10(g) of the Pacific Disclosure 
Schedule or specifically provided for herein, neither 
Pacific nor any of its subsidiaries is a party to any 
plan, agreement or arrangement pursuant to the terms of 
which the consummation or announcement of any transaction 
contemplated by this Agreement will (either alone or in 
connection with the occurrence of any additional or 
further acts or events) result in any (A) payment (whether 
of severance pay or otherwise) becoming due from Pacific 
or any of its subsidiaries to any officer, employee, 
former employee or director thereof or to a trustee under 
any "rabbi trust" or similar arrangement, or (B) benefit 
under any Pacific Benefit Plan being established or 
becoming accelerated, or immediately vested or payable.

               (h)Labor Agreements.  As of the date 
hereof, except as set forth in Section 3.10(h) of the 
Pacific Disclosure Schedule, neither Pacific nor any of 
its subsidiaries is a party to any collective bargaining 
agreement or other labor agreement with any union or labor 
organization.  To the best knowledge of Pacific, as of the 
date hereof, except as set forth in Section 3.10(h) of the 
Pacific Disclosure Schedule, there is no current union 
representation question involving employees of Pacific or 
any of its subsidiaries, nor does Pacific know of any 
activity or proceeding of any labor organization (or 
representative thereof) or employee group to organize any 
such employees.  Except as set forth in the Pacific SEC 
Reports or in Section 3.10(h) of the Pacific Disclosure 
Schedule, (i) there is no unfair labor practice, 
employment discrimination or other complaint against 
Pacific pending, or to the best knowledge of Pacific, 
threatened, which has or could reasonably be expected to 
have, a Pacific Material Adverse Effect, (ii) there is no 
strike, dispute, slowdown, work stoppage or lockout 
pending, or to the best knowledge of Pacific, threatened, 
against or involving Pacific or any of its subsidiaries 
which has or could reasonably be expected to have a 
Pacific Material Adverse Effect and (iii) there is no 
proceeding, claim, suit, action or governmental 
investigation pending or, to the best knowledge of 
Pacific, threatened, in respect of which any director, 
officer, employee or agent of Pacific or any of its 
subsidiaries is or may be entitled to claim 
indemnification from Pacific pursuant to their respective 
articles of incorporation or bylaws or as provided in the 
Indemnification Agreements listed in Section 3.10(h) of 
the Pacific Disclosure Schedule.

               SECTION 3.11.  Environmental Protection.

               (a)Compliance.  Except as set forth in the 
Pacific SEC Reports, except as set forth in Section 
3.11(a) of the Pacific Disclosure Schedule and except 
where the failure to be in compliance could not reasonably 
be expected to have a Pacific Material Adverse Effect, (i) 
each of Pacific and its subsidiaries is in compliance with 
all applicable Environmental Laws and (ii) neither Pacific 
nor any of its subsidiaries has received any written 
communication, from any person or Governmental Authority 
that alleges that Pacific or any of its subsidiaries is 
not in such compliance with applicable Environmental Laws.

               (b)Environmental Permits.  Except as set 
forth in the Pacific SEC Reports or as set forth in 
Section 3.11(b) of the Pacific Disclosure Schedule, each 
of Pacific and its subsidiaries has obtained or has 
applied for all environmental, health and safety permits 
and governmental authorizations (collectively, the 
"Environmental Permits") necessary for the construction of 
their facilities or the conduct of their operations, and 
all such permits are in good standing or, where 
applicable, a renewal application has been timely filed 
and is pending agency approval, and Pacific and its 
subsidiaries are in material compliance with all terms and 
conditions of the Environmental Permits, except where the 
failure to obtain or be in compliance with such 
Environmental Permit could not reasonably be expected to 
have a Pacific Material Adverse Effect.

               (c)Environmental Claims.  Except as set 
forth in the Pacific SEC Reports or as set forth in 
Section 3.11(c) of the Pacific Disclosure Schedule, to the 
best knowledge of Pacific, there is no Environmental Claim 
pending (i) against Pacific or any of its subsidiaries or 
joint ventures, (ii) against any person or entity whose 
liability for any Environmental Claim Pacific or any of 
its subsidiaries or joint ventures has retained or assumed 
contractually or (iii) against any real or personal 
property or operations which Pacific or any of its 
subsidiaries or joint ventures owns, leases or manages, in 
whole or in part, which, if adversely determined, could 
reasonably be expected to have, in the aggregate, a 
Pacific Material Adverse Effect.

               (d)Releases.  Except as set forth in the 
Pacific SEC Reports or as set forth in Section 3.11(c) or 
Section 3.11(d) of the Pacific Disclosure Schedule, 
Pacific has no knowledge of any Releases of any Hazardous 
Material that would be reasonably likely to form the basis 
of any Environmental Claim against Pacific or any of its 
subsidiaries or joint ventures, or against any person or 
entity whose liability for any Environmental Claim Pacific 
or any of its subsidiaries or joint ventures has retained 
or assumed contractually, which could reasonably be 
expected to have, in the aggregate, a Pacific Material 
Adverse Effect.

               (e)Predecessors.  Except as set forth in 
the Pacific SEC Reports or as set forth in Section 3.11(e) 
of the Pacific Disclosure Schedule, Pacific has no 
knowledge, with respect to any predecessor of Pacific or 
any subsidiary or joint venture of Pacific, of any 
Environmental Claim pending or threatened, or of any 
Release of Hazardous Materials that would be reasonably 
likely to form the basis of any Environmental Claim, which 
could reasonably be expected to have a Pacific Material 
Adverse Effect. 
               (f)Disclosure.  To Pacific's best 
knowledge, Pacific has disclosed to Enova all material 
facts which Pacific reasonably believes form the basis of 
a Pacific Material Adverse Effect arising from (i) the 
cost of Pacific pollution control equipment currently 
required or known to be required in the future; (ii) 
current Pacific remediation costs or Pacific remediation 
costs known to be required in the future; or (iii) any 
other environmental matter affecting Pacific. 
               (g)Cost Estimates.  To Pacific's best 
knowledge, no environmental matter set forth in the 
Pacific SEC Reports or the Pacific Disclosure Schedule 
could reasonably be expected to exceed the cost estimates 
provided in the Pacific SEC Reports by an amount that 
individually or in the aggregate could reasonably be 
expected to have a Pacific Material Adverse Effect.  

               (h)Certain Definitions.  As used in this 
Agreement:

                              (i)"Environmental Claim" 
means any and all written  administrative, regulatory or 
judicial actions, suits, demands, demand letters,  
directives, claims, liens, investigations, proceedings or 
notices of noncompliance or  violation by any person or 
entity (including any Governmental Authority) alleging  
potential liability (including, without limitation, 
potential liability for enforcement,  investigatory costs, 
cleanup costs, governmental response costs, removal costs,  
remedial costs, natural resources damages, property 
damages, personal injuries, or  penalties) arising out of, 
based on or resulting from (A) the presence, or Release or  
threatened Release into the environment, of any Hazardous 
Materials at any location,  whether or not owned, 
operated, leased or managed by Pacific or any of its  
subsidiaries or joint ventures (for purposes of this 
Section 3.11), or by Enova or any  of its subsidiaries or 
joint ventures (for purposes of Section 4.11); (B) 
circumstances  forming the basis of any violation, or 
alleged violation, of any Environmental Law; or  (C) any 
and all claims by any third party seeking damages, 
contribution,  indemnification, cost recovery, 
compensation or injunctive relief resulting from the  
presence or Release of any Hazardous Materials.  
(ii)"Environmental Laws" means all federal, state, local 
laws,  rules and regulations relating to pollution or 
protection of human health or the  environment (including, 
without limitation, ambient air, surface water, 
groundwater,  land surface or subsurface strata), 
including, without limitation, laws and regulations  
relating to Releases or threatened Releases of Hazardous 
Materials, or otherwise  relating to the manufacture, 
processing, distribution, use, treatment, storage, 
disposal,  transport or handling of Hazardous Materials.  
(iii)"Hazardous Materials" means (A) any petroleum or 
petroleum  products, radioactive materials, asbestos in 
any form that is or could become friable,  urea 
formaldehyde foam insulation, and transformers or other 
equipment that contain  dielectric fluid containing 
polychlorinated biphenyls ("PCBs"); (B) any chemicals,  
materials or substances which are now defined as or 
included in the definition of  "hazardous substances", 
"hazardous wastes", "hazardous materials", "extremely  
hazardous wastes", "restricted hazardous wastes", "toxic 
substances", "toxic  pollutants", or words of similar 
import, under any Environmental Law; and (C) any  other 
chemical, material, substance or waste, exposure to which 
is now prohibited,  limited or regulated under any 
Environmental Law in a jurisdiction in which Pacific  or 
any of its subsidiaries or joint ventures operates (for 
purposes of this Section 3.11)  or in which Enova or any 
of its subsidiaries or joint ventures operates (for 
purposes  of Section 4.11).  (iv)"Release" means any 
release, spill, emission, leaking, injection,  deposit, 
disposal, discharge, dispersal, leaching or migration into 
the atmosphere,  soil, surface water, groundwater or 
property.

               SECTION 3.12.  Regulation as a Utility.  
Pacific Sub is regulated as a public utility by the State 
of California and by no other state.  Except as set forth 
in Section 3.12 of the Pacific Disclosure Schedule, 
neither Pacific nor any "subsidiary company" or 
"affiliate" of Pacific is subject to regulation as a 
public utility or public service company (or similar 
designation) by any other state in the United States or 
any foreign country.  As used in this Section 3.12 and in 
Section 4.12, the terms "subsidiary company" and 
"affiliate" shall have the respective meanings ascribed to 
them in the 1935 Act.  Pacific is an exempt holding 
company under Section 3(a)(1) of the 1935 Act.  Section 
3.12 of the Pacific Disclosure Schedule sets forth each 
"affiliate" and each "subsidiary company" of Pacific which 
may be deemed to be a "public utility company" or a 
"holding company" within the meaning of the 1935 Act.

               SECTION 3.13.  Vote Required.  The approval 
of the Pacific Merger by the affirmative vote of (i) a 
majority of the votes entitled to be cast by all holders 
of Pacific Common Stock and (ii) a majority of the votes 
entitled to be cast by all holders of Pacific Common Stock 
and Pacific Preferred Stock, voting together as a single 
class (the "Pacific Shareholders' Approval"), are the only 
votes of the holders of any class or series of the capital 
stock of Pacific required to approve this Agreement, the 
Mergers and the other transactions contemplated hereby.  
No vote of shareholders of Pacific is required to approve 
the Energy Marketing Joint Venture Agreement. 

               SECTION 3.14.  Accounting Matters.  Neither 
Pacific nor, to its best knowledge, any of its affiliates 
has taken or agreed to take any action that would prevent 
the Company from accounting for the transactions to be 
effected pursuant to Articles I and II of this Agreement 
as a pooling of interests in accordance with GAAP and 
applicable SEC regulations.

               SECTION 3.15.  Opinions of Financial 
Advisors.  Pacific has received the opinion of each of 
Barr Devlin & Co. Incorporated ("Barr Devlin") and Merrill 
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill 
Lynch"), dated October 11, 1996, to the effect that, as of 
such date, the Pacific Ratio is fair from a financial 
point of view to the holders of Pacific Common Stock.  

               SECTION 3.16.  Insurance.  Except as set 
forth on Section 3.16 of the Pacific Disclosure Schedule, 
each of Pacific and its subsidiaries is, and has been 
continuously since January 1, 1993, insured with 
financially responsible insurers in such amounts and 
against such risks and losses as are customary for 
companies conducting the business as conducted by Pacific 
and its subsidiaries during such time period.  Except as 
set forth on Schedule 3.16 of the Pacific Disclosure 
Schedule, neither Pacific nor its subsidiaries has 
received any notice of cancellation or termination with 
respect to any material insurance policy of Pacific or its 
subsidiaries.  The insurance policies of Pacific and each 
of its subsidiaries are valid and enforceable policies in 
all material respects.

               SECTION 3.17.  Pacific Rights Agreement.  
Pacific has delivered to Enova a true and complete copy of 
the Pacific Rights Agreement as in effect on the date 
hereof.  Pacific has taken all necessary action to amend 
the Pacific Rights Agreement so that neither the execution 
of this Agreement nor the consummation of the Mergers will 
(a) cause the Pacific Rights to become exercisable, (b) 
cause Enova or the Company to become an Acquiring Person 
(as such term is defined in the Pacific Rights Agreement) 
or (c) give rise to a Distribution Date, a Stock 
Acquisition Date, a Section 7(a)(iii) Event or a Section 
13 Event (as each term is defined in the Pacific Rights 
Agreement).

SECTION 3.18.  Brokers.  No broker, finder or investment 
banker (other than Barr Devlin and Merrill Lynch) is 
entitled to any brokerage, finder's or other fee or 
commission in connection with the Mergers based upon 
arrangements made by or on behalf of Pacific.  Pacific has 
heretofore furnished to Enova a complete and correct copy 
of all agreements between Pacific and Merrill Lynch or 
Barr Devlin pursuant to which such firm would be entitled 
to any payment relating to the Mergers. 

                           ARTICLE IV
 
             REPRESENTATIONS AND WARRANTIES OF ENOVA

               Enova represents and warrants to Pacific as 
follows:

               SECTION 4.01.  Organization and 
Qualification.  Each of Enova and its subsidiaries is a 
corporation duly organized, validly existing and in good 
standing under the laws of its state of incorporation, has 
all requisite power and authority, and has been duly 
authorized by all necessary approvals and orders, to own, 
lease and operate its assets and properties and to carry 
on its business as it is now being conducted, and is duly 
qualified and in good standing to do business in each 
jurisdiction in which the nature of its business or the 
ownership or leasing of its assets and properties makes 
such qualification necessary other than in such 
jurisdictions where the failure to be so qualified and in 
good standing will not, when taken together with all other 
such failures, have a material adverse effect on the 
operations, properties, assets, financial condition or the 
results of operations of Enova and its subsidiaries taken 
as a whole or on the consummation of the transactions 
contemplated by this Agreement (any such material adverse 
effect being hereinafter referred to as a "Enova Material 
Adverse Effect") or a Joint Venture Material Adverse 
Effect.

               SECTION 4.02.  Subsidiaries.  Section 4.02 
of the Enova Disclosure Schedule sets forth a description 
as of the date hereof of all subsidiaries and joint 
ventures of Enova, including the name of each such entity 
and Enova's interest therein, and, as to each subsidiary 
or joint venture identified as a "Material Enova Entity" 
in Section 4.02 of the Enova Disclosure Schedule, a brief 
description of the principal line or lines of business 
conducted by each such entity.  Except as set forth in 
Section 4.02 of the Enova Disclosure Schedule, none of 
such entities is a "public utility company", a "holding 
company", a "subsidiary company" or an "affiliate" of any 
public-utility company within the meaning of Section 
2(a)(5), 2(a)(7), 2(a)(8) or 2(a)(11) of the 1935 Act, 
respectively, or a "public utility" within the meaning of 
Section 201(e) of the Power Act.  Except as set forth in 
Section 4.02 of the Enova Disclosure Schedule, all of the 
issued and outstanding shares of capital stock of each 
subsidiary of Enova are validly issued, fully paid, 
nonassessable and free of preemptive rights, are owned 
directly or indirectly by Enova free and clear of any 
Encumbrances and there are no outstanding subscriptions, 
options, calls, contracts, voting trusts, proxies or other 
commitments, understandings, restrictions, arrangements, 
rights or warrants, including any right of conversion or 
exchange under any outstanding security, instrument or 
other agreement, obligating any such subsidiary to issue, 
deliver or sell, or cause to be issued, delivered or sold, 
additional shares of its capital stock or obligating it to 
grant, extend or enter into any such agreement or 
commitment.

               SECTION 4.03.  Capitalization.  

               (a)Enova.  The authorized capital stock of 
Enova consists of 300,000,000 shares of Enova Common Stock 
and 30,000,000 shares of Preferred Stock, no par value, of 
Enova ("Enova Preferred Stock").  As of the close of 
business on September 30, 1996, (i) 116,583,358 shares of 
Enova Common Stock and (ii) no shares of Enova Preferred 
Stock were issued and outstanding.  All of the issued and 
outstanding shares of the capital stock of Enova are 
validly issued, fully paid, nonassessable and free of 
preemptive rights.  Except as set forth in Section 4.03(a) 
of the Enova Disclosure Schedule, as of the date hereof, 
there are no outstanding subscriptions, options, calls, 
contracts, voting trusts, proxies or other commitments, 
understandings, restrictions, arrangements, rights or 
warrants, including any right of conversion or exchange 
under any outstanding security, instrument or other 
agreement, obligating Enova or any of its subsidiaries to 
issue, deliver or sell, or cause to be issued, delivered 
or sold, additional shares of the capital stock of Enova 
or obligating Enova or any of its subsidiaries to grant, 
extend or enter into any such agreement or commitment. 

               (b)Enova Sub.  The authorized capital stock 
of Enova Sub consists of (i) 255,000,000 shares of common 
stock, no par value, of Enova Sub ("Enova Sub Common 
Stock"), (ii) 1,375,000 shares of preferred stock, par 
value $20 per share, of Enova Sub (the "Enova Sub Par 
Value $20 Preferred Stock"), and (iii) 10,000,000 shares 
of preference stock, no par value, of Enova Sub (the 
"Enova Sub No Par Preference Stock").  As of the close of 
business on September 30, 1996, there were issued and 
outstanding (i) 116,583,358 shares of Enova Sub Common 
Stock, (ii) 1,373,770 shares of Enova Sub Par Value $20 
Preferred Stock consisting of 375,000 shares of the 5% 
Series, 300,000 shares of the 4.50% Series, 325,000 shares 
of the 4.40% Series and 373,770 shares of the 4.60% 
Series, 1995, and (iii) 3,190,000 shares of Enova Sub No 
Par Preference Stock consisting of 150,000 shares of the 
$7.20 Series, 1,400,000 shares of the $1.70 Series, 
640,000 shares of the $1.82 Series and 1,000,000 shares of 
the $1.7625 Series.  All of the issued and outstanding 
shares of the capital stock of Enova Sub are validly 
issued, fully paid, nonassessable and free of preemptive 
rights.  Except as set forth in Section 4.03(b) of the 
Enova Disclosure Schedule, as of the date hereof, there 
are no outstanding subscriptions, options, calls, 
contracts, voting trusts, proxies or other commitments, 
understandings, restrictions, arrangements, rights or 
warrants, including any right of conversion or exchange 
under any outstanding security, instrument or other 
agreement, obligating Enova or any of its subsidiaries to 
issue, deliver or sell, or cause to be issued, delivered 
or sold, the capital stock of Enova Sub or obligating 
Enova or any of its subsidiaries to grant, extend or enter 
into any such agreement or commitment. 
                                   SECTION 4.04.  
Authority; Non-Contravention; Statutory Approvals;
Compliance.

               (a)Authority.  Enova has all requisite 
power and authority to enter into this Agreement and the 
Energy Marketing Joint Venture Agreement and, subject to 
the applicable Enova Shareholders' Approval and the 
applicable Enova Required Statutory Approvals, to 
consummate the transactions contemplated hereby or 
thereby.  The execution and delivery of this Agreement and 
the Energy Marketing Joint Venture Agreement and the 
consummation by Enova of the transactions contemplated 
hereby and thereby have been duly authorized by all 
necessary corporate action on the part of Enova, subject 
in the case of this Agreement to obtaining of the 
applicable Enova Shareholders' Approval.  This Agreement 
has been, and the Energy Marketing Joint Venture Agreement 
upon execution and delivery will be, duly and validly 
executed and delivered by Enova and, assuming the due 
authorization, execution and delivery hereof and thereof 
by Pacific, the Company, Newco Enova Sub and Newco Pacific 
Sub, as the case may be, constitutes or will constitute 
the valid and binding obligation of Enova enforceable 
against it in accordance with its terms. 
               (b)Non-Contravention.  Except as set forth 
in Section 4.04(b) of the Enova Disclosure Schedule, the 
execution and delivery of this Agreement and the Energy 
Marketing Joint Venture Agreement by Enova do not, and the 
consummation of the transactions contemplated hereby or 
thereby will not (with or without notice or lapse of time 
or both), violate, conflict with, or result in a breach of 
any provision of, or constitute a default under, or result 
in any Violation by Enova or any of its subsidiaries or 
joint ventures pursuant to any provisions of (i) the 
articles of incorporation or by-laws or similar governing 
documents of Enova or any of its subsidiaries or joint 
ventures, (ii) subject to obtaining the Enova Required 
Statutory Approvals and the receipt of the Enova 
Shareholders' Approval, any statute, law, ordinance, rule, 
regulation, judgment, decree, order, injunction, writ, 
permit or license of any Governmental Authority applicable 
to Enova or any of its subsidiaries or joint ventures or 
any of their respective properties or assets, or (iii) 
subject to obtaining the third-party consents set forth in 
Section 4.04(b) of the Enova Disclosure Schedule (the 
"Enova Required Consents"), any note, bond, mortgage, 
indenture, deed of trust, license, franchise, permit, 
concession, contract, lease or other instrument, 
obligation or agreement of any kind to which Enova or any 
of its subsidiaries or joint ventures is now a party or by 
which it or any of its properties or assets may be bound 
or affected, excluding from the foregoing clauses (ii) and 
(iii) such Violations that would not, in the aggregate, 
have a Enova Material Adverse Effect or a Joint Venture 
Material Adverse Effect. 

               (c)Statutory Approvals.  Except as set 
forth in Section 4.04(c) of the Enova Disclosure Schedule, 
no declaration, filing or registration with, or notice to 
or authorization, consent or approval of, any Governmental 
Authority is necessary for (i) the execution and delivery 
of this Agreement or the Energy Marketing Joint Venture 
Agreement by Enova or the consummation by Enova of the 
transactions contemplated hereby or thereby, the failure 
to obtain, make or give which would have, in the 
aggregate, a Enova Material Adverse Effect or a Joint 
Venture Material Adverse Effect, and (ii) the execution 
and delivery of this Agreement by the Company or the 
consummation by the Company of the transactions 
contemplated hereby, the failure to obtain, make or give 
which would have, in the aggregate, a material adverse 
effect on the operations, properties, assets, financial 
condition or the results of operations of the Company and 
its prospective subsidiaries taken as a whole or on the 
consummation of the transactions contemplated by this 
Agreement (collectively, the "Enova Required Statutory 
Approvals", it being understood that references in this 
Agreement to "obtaining" such Enova Required Statutory 
Approvals shall mean making such declarations, filings or 
registrations; giving such notice; obtaining such consents 
or approvals; and having such waiting periods expire as 
are necessary to avoid a violation of law).
 
               (d)Compliance.  Except as set forth in 
Section 4.04(d) of the Enova Disclosure Schedule or in 
Section 4.11 of the Enova Disclosure Schedule or as 
disclosed in the Enova SEC Reports, neither Enova nor any 
of its subsidiaries nor, to the knowledge of Enova, any of 
its joint ventures, is in violation of or is under 
investigation with respect to or has been given notice or 
been charged with any violation of, any law, statute, 
order, rule, regulation, ordinance or judgment (including, 
without limitation, any applicable environmental law, 
ordinance or regulation) of any Governmental Authority, 
except for violations which, in the aggregate do not, and 
could not reasonably be expected to have a Enova Material 
Adverse Effect or a Joint Venture Material Adverse Effect.  
Except as set forth in Section 4.04(d) of the Enova 
Disclosure Schedule or in Section 4.11 of the Enova 
Disclosure Schedule, Enova and each of its subsidiaries 
and joint ventures have all permits, licenses, franchises 
and other governmental authorizations, consents and 
approvals necessary to conduct their businesses as 
presently conducted, except those which the failure to 
obtain would not, in the aggregate, have a Enova Material 
Adverse Effect or a Joint Venture Material Adverse Effect.

               SECTION 4.05.  Reports and Financial 
Statements.  The filings required to be made by Enova and 
its subsidiaries under the Securities Act, the Exchange 
Act, the California Public Utilities Act, the Power Act, 
the Gas Act, the Atomic Energy Act of 1954, as amended 
(the "Atomic Energy Act"), or the 1935 Act have been filed 
with the SEC, the CPUC, the Nuclear Regulatory Commission 
(the "NRC") or the FERC, as the case may be, including all 
forms, statements, reports, agreements (oral or written) 
and all documents, exhibits, amendments and supplements 
appertaining thereto, and Enova has complied in all 
material respects with all applicable requirements of the 
appropriate act and the rules and regulations thereunder.  
Enova has made available to Pacific a true and complete 
copy of each report, schedule, registration statement and 
definitive proxy statement filed by Enova with the SEC 
since January 1, 1994 (as such documents have since the 
time of their filing been amended, the "Enova SEC 
Reports").  As of their respective dates, the Enova SEC 
Reports did not contain any 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, in light of the circumstances under which they 
were made, not misleading.  The audited consolidated 
financial statements and unaudited interim financial 
statements of Enova included in the Enova SEC Reports 
(collectively, the "Enova Financial Statements") have been 
prepared in accordance with GAAP (except as may be 
indicated therein or in the notes thereto and except with 
respect to unaudited statements as permitted by Form 10-Q 
of the SEC) and fairly present the financial position of 
Enova as of the dates thereof and the results of its 
operations and cash flows for the periods then ended, 
subject, in the case of the unaudited interim financial 
statements, to normal recurring audit adjustments.  True, 
accurate and complete copies of the Articles of 
Incorporation and Bylaws of Enova as in effect on the date 
hereof, are included (or incorporated by reference) in the 
Enova SEC Reports. 
               SECTION 4.06.  Absence of Certain Changes 
or Events; Absence of Undisclosed Liabilities.  (a)  
Except as set forth in the Enova SEC Reports or Section 
4.06 of the Enova Disclosure Schedule, from January 1, 
1996 through the date hereof each of Enova and its 
subsidiaries and joint ventures has conducted its business 
only in the ordinary course of business consistent with 
past practice and there has not been, and no fact or 
condition exists which could reasonably be expected to 
have, a Enova Material Adverse Effect or a Joint Venture 
Material Adverse Effect. 
               (b)Neither Enova nor any of its 
subsidiaries has any liabilities or obligations (whether 
absolute, accrued, contingent or otherwise) of a nature 
required by GAAP to be reflected in a consolidated 
corporate balance sheet, except liabilities, obligations 
or contingencies that are accrued or reserved against in 
the consolidated financial statements of Enova or 
reflected in the notes thereto for the year ended December 
31, 1995, or which were incurred after December 31, 1995 
in the ordinary course of business and would not, in the 
aggregate, have a Enova Material Adverse Effect or a Joint 
Venture Material Adverse Effect. 
               SECTION 4.07.  Litigation.  Except as 
disclosed in the Enova SEC Reports or as set forth in 
Section 4.11 of the Enova Disclosure Schedule or in 
Section 4.07 of the Enova Disclosure Schedule, (i) there 
are as of the date hereof no claims, suits, actions or 
proceedings, pending or, to the knowledge of Enova, 
threatened, nor are there, to the knowledge of Enova, any 
investigations or reviews pending or threatened against, 
relating to or affecting Enova or any of its subsidiaries 
or joint ventures, (ii) there have not been any 
developments since June 30, 1996 with respect to such 
disclosed claims, suits, actions, proceedings, 
investigations or reviews and (iii) there are no 
judgments, decrees, injunctions, rules or orders of any 
court, governmental department, commission, agency, 
instrumentality or authority or any arbitrator applicable 
to Enova or any of its subsidiaries or joint ventures, 
which, when taken together with any other nondisclosures 
described in clause (i), (ii) or (iii), could reasonably 
be expected to have a Enova Material Adverse Effect or a 
Joint Venture Material Adverse Effect .
               SECTION 4.08.  Registration Statement and 
Proxy Statement.  None of the information supplied or to 
be supplied by or on behalf of Enova for inclusion or 
incorporation by reference in (i) the Registration 
Statement will, at the time the Registration Statement is 
filed with the SEC and at the time it becomes effective 
under the Securities Act, contain 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 and (ii) the Proxy 
Statement will, at the date mailed to shareholders of 
Pacific and Enova and at the times of the meetings of such 
shareholders to be held in connection with the Mergers, 
contain any untrue statement of a material fact or omit to 
state any material fact required to be stated therein or 
necessary in order to make the statements therein, in 
light of the circumstances under which they are made, not 
misleading.  The Registration Statement and the Proxy 
Statement will comply as to form in all material respects 
with the provisions of the Securities Act and the Exchange 
Act, respectively, and the rules and regulations 
thereunder.

               SECTION 4.09.  Tax Matters.

               (a)Filing of Timely Tax Returns.  Enova and 
each of its subsidiaries have filed (or there has been 
filed on their behalf) all Tax Returns required to be 
filed by each of them under applicable law.  All Tax 
Returns were in all material respects (and, as to Tax 
Returns not filed as of the date hereof, will be) true, 
complete and correct and filed on a timely basis.

               (b)Payment of Taxes.  Enova and each of its 
subsidiaries have, within the time and in the manner 
prescribed by law, paid (and until the Closing Date will 
pay within the time and in the manner prescribed by law) 
all Taxes that are currently due and payable except for 
those contested in good faith and for which adequate 
reserves have been taken.

               (c)Tax Reserves.  Enova and its 
subsidiaries have established (and until the Closing Date 
will maintain) on their books and records reserves 
adequate to pay all Taxes, all deficiencies in Taxes 
asserted or proposed against Enova or its subsidiaries and 
reserves for deferred income taxes in accordance with 
GAAP. 
               (d) Tax Liens.  There are no Tax liens upon 
the assets of Enova or any of its subsidiaries except 
liens for Taxes not yet due. 
               (e)Withholding Taxes.  Enova and each of 
its subsidiaries have complied (and until the Closing Date 
will comply) in all respects with the provisions of the 
Code relating to the payment and withholding of Taxes, 
including, without limitation, the withholding and 
reporting requirements under Sections 1441 through 1464, 
3401 through 3406, and 6041 and 6049 of the Code, as well 
as similar provisions under any other laws, and have, 
within the time and in the manner prescribed by law, 
withheld from employee wages and paid over to the proper 
governmental authorities all amounts required. 

               (f)Extensions of Time for Filing Tax 
Returns.  Except as set forth in Section 4.09(f) of the 
Enova Disclosure Schedule, neither Enova nor any of its 
subsidiaries has requested any extension of time within 
which to file any Tax Return, which Tax Return has not 
since been filed. 
                                   (g)Waivers of Statute 
of Limitations.  Except as set forth in Section 4.09(g) of 
the Enova Disclosure Schedule, neither Enova nor any of 
its subsidiaries has executed any outstanding waivers or 
comparable consents regarding the application of the 
statute of limitations with respect to any Taxes or Tax 
Returns. 
               (h)Expiration of Statute of Limitations.  
Except as set forth in Section 4.09(h) of the Enova 
Disclosure Schedule, the statute of limitations for the 
assessment of all federal income and California franchise 
Taxes has expired for all related Tax Returns of Enova and 
each of its subsidiaries or those Tax Returns have been 
examined by the appropriate taxing authorities for all 
periods through the date hereof, and no deficiency for any 
such Taxes has been proposed, asserted or assessed against 
Enova or any of its subsidiaries that has not been 
resolved and paid in full. 
               (i)Audit, Administrative and Court 
Proceedings.  Except as set forth in Section 4.09(i) of 
the Enova Disclosure Schedule, no audits or other 
administrative proceedings or court proceedings are 
presently pending with regard to any Taxes or Tax Returns 
of Enova or any of its subsidiaries, and neither Enova nor 
any of its subsidiaries has any knowledge of any 
threatened action, audit or administrative or court 
proceeding with respect to any such Taxes or Tax Returns.

               (j)Powers of Attorney.  Except as set forth 
in Section 4.09(j) of the Enova Disclosure Schedule, no 
power of attorney currently in force has been granted by 
Enova or any of its subsidiaries concerning any Tax 
matter.

               (k)Tax Rulings.  Except as set forth in 
Section 4.09(k) of the Enova Disclosure Schedule, neither 
Enova nor any of its subsidiaries has received a Tax 
Ruling or entered into a Closing Agreement with any taxing 
authority that would have a continuing adverse effect 
after the Closing Date.

               (l)Availability of Tax Returns.  Enova and 
its subsidiaries have made available to Pacific complete 
and accurate copies of (i) all Tax Returns, and any 
amendments thereto, filed by Enova or any of its 
subsidiaries, (ii) all audit reports received from any 
taxing authority relating to any Tax Return filed by Enova 
or any of its subsidiaries and (iii) any Closing 
Agreements entered into by Enova or any of its 
subsidiaries with any taxing authority.

               (m)Tax Sharing Agreements.  Except as set 
forth in Section 4.09(m) of the Enova Disclosure Schedule, 
no agreements relating to allocating or sharing of Taxes 
exist between or among Enova and any of its subsidiaries. 

               (n)Code Section 341(f).  Neither Enova nor 
any of its subsidiaries has filed (or will file prior to 
the Closing) a consent pursuant to Section 341(f) of the 
Code or has agreed to have Section 341(f)(2) of the Code 
apply to any disposition of a subsection (f) asset (as 
that term is defined in Section 341(f)(4) of the Code) 
owned by Enova or any of its subsidiaries.
 
               (o)Code Section 168.  No property of Enova 
or any of its subsidiaries is property that Enova or any 
such subsidiary or any party to this transaction is or 
will be required to treat as being owned by another person 
pursuant to the provisions of Section 168(f)(8) of the 
Code (as in effect prior to its amendment by the Tax 
Reform Act of 1986) or is "tax-exempt use property" within 
the meaning of Section 168 of the Code.

               (p)Code Section 481 Adjustments.  Other 
than adjustments that in the aggregate could not 
reasonably be expected to have a Enova Material Adverse 
Effect, neither Enova nor any of its subsidiaries is 
required to include in income any adjustment pursuant to 
Section 481(a) of the Code by reason of a voluntary change 
in accounting method initiated by Enova or any of its 
subsidiaries, and to the best of the knowledge of Enova, 
the IRS has not proposed any such adjustment or change in 
accounting method. 
               (q)Code Sections 6661 and 6662.  All 
transactions that could give rise to an understatement of 
federal income tax (within the meaning of Section 6661 of 
the Code for Tax Returns the due date for which was on or 
before December 31, 1989, and within the meaning of 
Section 6662 of the Code for Tax Returns the due date for 
which was after December 31, 1989) that could reasonably 
be expected to result in a Enova Material Adverse Effect 
have been adequately disclosed (or, with respect to Tax 
Returns filed following the Closing, will be adequately 
disclosed) on the Tax Returns of Enova and its 
subsidiaries in accordance with Section 6661(b)(2)(B) of 
the Code for Tax Returns the due date for which was on or 
before December 31, 1989, and in accordance with Section 
6662(d)(2)(B) of the Code for Tax Returns the due date for 
which was after December 31, 1989.

               (r)NOLs.  As of the date hereof, Enova and 
its subsidiaries had net operating loss carryovers 
available to offset future income as set forth in Section 
4.09(r) of the Enova Disclosure Schedule.  Section 4.09(r) 
of the Enova Disclosure Schedule sets forth the amount of 
and year of expiration of each company's net operating 
loss carryovers.  

               (s) Credit Carryover.  As of the date 
hereof, Enova and its subsidiaries had tax credit 
carryovers available to offset future tax liability as set 
forth in Section 4.09(s) of the Enova Disclosure Schedule.  
Section 4.09(s) of the Enova Disclosure Schedule sets 
forth the amount and year of expiration of each company's 
tax credit carryovers.

               (t)Code Section 338 Elections.  Except as 
set forth in Section 4.09(t) of the Enova Disclosure 
Schedule, no election under Section 338 of the Code (or 
any predecessor provision) has been made by or with 
respect to Enova or any of its subsidiaries or any of 
their respective assets or properties.
 
            (u)Acquisition Indebtedness.  Except as set 
forth in Section 4.09(u) of the Enova Disclosure Schedule, 
no indebtedness of Enova or any of its subsidiaries is 
"corporate acquisition indebtedness" within the meaning of 
Section 279(b) of the Code.

               (v)Intercompany Transactions.  Except as 
set forth in Section 4.09(v) of the Enova Disclosure 
Schedule, neither Enova nor any of its subsidiaries has 
engaged in any intercompany transactions within the 
meaning of Section 1.1502-13 of the Treasury Regulations 
for which any income remains unrecognized as of the close 
of the last taxable year prior to the Closing Date.

               (w)Code Section 280G.  Except as set forth 
in Section 4.09(w) of the Enova Disclosure Schedule, 
neither Enova nor any of its subsidiaries is a party to 
any agreement, contract, or arrangement that could result, 
on account of the transactions contemplated hereunder, 
separately or in the aggregate, in the payment of any 
"excess parachute payments" within the meaning of the 
Section 280G of the Code.

               SECTION 4.10.  Employee Matters; ERISA.

               (a)Benefit Plans.  Section 4.10(a) of the 
Enova Disclosure Schedule contains a true and complete 
list of each material employee benefit plan, program or 
arrangement currently sponsored, maintained or contributed 
to by Enova or any of its subsidiaries for the benefit of 
employees, former employees or directors and their 
beneficiaries in respect of services provided to any such 
entity, including, but not limited to, any employee 
benefit plans within the meaning of Section 3(3) of ERISA 
and any material employment, consulting, non-compete, 
severance or change in control agreement (collectively, 
the "Enova Benefit Plans").  For the purposes of this 
Section 4.10, the term "Enova" shall be deemed to include 
predecessors thereof.

               (b)Contributions.  Except as set forth in 
Section 4.10(b) of the Enova Disclosure Schedule, all 
material contributions and other payments required to be 
made by Enova or any of its subsidiaries to any Enova 
Benefit Plan (or to any person pursuant to the terms 
thereof) have been made or the amount of such payment or 
contribution obligation has been reflected in the Enova 
Financial Statements.

               (c)Qualification; Compliance.  Each of the 
Enova Benefit Plans intended to be "qualified" within the 
meaning of Section 401(a) of the Code has been determined 
by the IRS to be so qualified, and, to the best knowledge 
of Enova, no circumstances exist that are reasonably 
expected by Enova to result in the revocation of any such 
determination.  Enova is in compliance in all material 
respects with, and each Enova Benefit Plan is and has been 
operated in all material respects in compliance with, all 
applicable laws, rules and regulations governing such 
plan, including, without limitation, ERISA and the Code.  
Each Enova Benefit Plan intended to provide for the 
deferral of income, the reduction of salary or other 
compensation or to afford other income tax benefits 
complies with the requirements of the applicable 
provisions of the Code or other laws, rules and 
regulations required to provide such income tax benefits.

               (d)Liabilities.  With respect to the Enova 
Benefit Plans individually and in the aggregate, no event 
has occurred, and, to the best knowledge of Enova, there 
exists no condition or set of circumstances that could 
subject Enova or any of its subsidiaries to any liability 
arising under the Code, ERISA or any other applicable law 
(including, without limitation, any liability to any such 
plan or the PBGC), or under any indemnity agreement to 
which Enova is a party, which liability, excluding 
liability for benefit claims, PBGC premiums and funding 
obligations payable in the ordinary course could 
reasonably be expected to have a Enova Material Adverse 
Effect.

               (e)Welfare Plans.  Except as set forth in 
Section 4.10(e) of the Enova Disclosure Schedule, none of 
the Enova Benefit Plans that are "welfare plans", within 
the meaning of Section 3(1) of ERISA, provides for any 
retiree benefits other than coverage mandated by 
applicable law or benefits the full cost of which is borne 
by the retiree.

               (f)Documents Made Available.  Enova has 
made available to Pacific a true and correct copy of each 
collective bargaining agreement to which Enova or any of 
its subsidiaries is a party or under which Enova or any of 
its subsidiaries has obligations, and with respect to each 
Enova Benefit Plan, (i) such plan and summary plan 
description, (ii) the most recent annual report filed with 
the IRS, (iii) each related trust agreement, insurance 
contract, service provider or investment management 
agreement (including all amendments to each such 
document), (iv) the most recent determination of the IRS 
with respect to the qualified status of such plan, and (v) 
the most recent actuarial report or valuation.

               (g)Payments Resulting from Mergers.  Except 
as set forth in Section 4.10(g) of the Enova Disclosure 
Schedule or specifically provided for herein, neither 
Enova nor any of its subsidiaries is a party to any plan, 
agreement or arrangement pursuant to the terms of which 
the consummation or announcement of any transaction 
contemplated by this Agreement will (either alone or in 
connection with the occurrence of any additional or 
further acts or events) result in any (A) payment (whether 
of severance pay or otherwise) becoming due from Enova or 
any of its subsidiaries to any officer, employee, former 
employee or director thereof or to a trustee under any 
"rabbi trust" or similar arrangement, or (B) benefit under 
any Enova Benefit Plan being established or becoming 
accelerated, or immediately vested or payable.

               (h)Labor Agreements.  As of the date 
hereof, except as set forth in Section 4.10(h) of the 
Enova Disclosure Schedule, neither Enova nor any of its 
subsidiaries is a party to any collective bargaining 
agreement or other labor agreement with any union or labor 
organization.  To the best knowledge of Enova, as of the 
date hereof, there is no current union representation 
question involving employees of Enova or any of its 
subsidiaries, nor does Enova know of any activity or 
proceeding of any labor organization (or representative 
thereof) or employee group to organize any such employees.  
Except as set forth in the Enova SEC Reports or in Section 
4.10(h) of the Enova Disclosure Schedule, (i) there is no 
unfair labor practice, employment discrimination or other 
complaint against Enova pending, or to the best knowledge 
of Enova, threatened, which has or could reasonably be 
expected to have a Enova Material Adverse Effect, (ii) 
there is no strike, dispute, slowdown, work stoppage or 
lockout pending, or, to the best knowledge of Enova, 
threatened, against or involving Enova or any of its 
subsidiaries which has or could reasonably be expected to 
have, a Enova Material Adverse Effect and (iii) there is 
no proceeding, claim, suit, action or governmental 
investigation pending or, to the best knowledge of Enova, 
threatened, in respect of which any director, officer, 
employee or agent of Enova or any of its subsidiaries is 
or may be entitled to claim indemnification from Enova 
pursuant to their respective articles of incorporation or 
by-laws or as provided in the Indemnification Agreements 
listed in Section 4.10(h) of the Enova Disclosure 
Schedule.

               SECTION 4.11.  Environmental Protection.

               (a)Compliance.  Except as set forth in the 
Enova SEC Reports, except as set forth in Section 4.11(a) 
of the Enova Disclosure Schedule and except where the 
failure to be in compliance could not reasonably be 
expected to have a Enova Material Adverse Effect, (i) each 
of Enova and its subsidiaries is in compliance with all 
applicable Environmental Laws, and (ii) neither Enova nor 
any of its subsidiaries has received any written 
communication from any person or Governmental Authority 
that alleges that Enova or any of its subsidiaries is not 
in such compliance with applicable Environmental Laws.

               (b)Environmental Permits.  Except as set 
forth in the Enova SEC Reports or as set forth in Section 
4.11(b) of the Enova Disclosure Schedule, each of Enova 
and its subsidiaries has obtained or has applied for all 
Environmental Permits necessary for the construction of 
their facilities or the conduct of their operations, and 
all such permits are in good standing or, where 
applicable, a renewal application has been timely filed 
and is pending agency approval, and Enova and its 
subsidiaries are in material compliance with all terms and 
conditions of the Environmental Permits, except where the 
failure to obtain or be in compliance with the 
Environmental Permit could not reasonably be expected to 
have a Enova Material Adverse Effect.

               (c)Environmental Claims.  Except as set 
forth in the Enova SEC Reports or as set forth in Section 
4.11(c) of the Enova Disclosure Schedule, to the best 
knowledge of Enova, there is no Environmental Claim 
pending (i) against Enova or any of its subsidiaries or 
joint ventures, (ii) against any person or entity whose 
liability for any Environmental Claim Enova or any of its 
subsidiaries or joint ventures has retained or assumed 
contractually, or (iii) against any real or personal 
property or operations which Enova or any of its 
subsidiaries or joint ventures owns, leases or manages, in 
whole or in part, which if adversely determined, could 
reasonably be expected to have in the aggregate a Enova 
Material Adverse Effect.

                                   (d)Releases.  Except as 
set forth in the Enova SEC Reports or as set forth in 
Section 4.11(c) or Section 4.11(d) of the Enova Disclosure 
Schedule, Enova has no knowledge of any Releases of any 
Hazardous Material that would be reasonably likely to form 
the basis of any Environmental Claim against Enova or any 
of its subsidiaries or joint ventures, or against any 
person or entity whose liability for any Environmental 
Claim Enova or any of its subsidiaries or joint ventures 
has retained or assumed contractually, which could 
reasonably be expected to have, in the aggregate, a Enova 
Material Adverse Effect.

               (e)Predecessors.  Except as set forth in 
the Enova SEC Reports or as set forth in Section 4.11(e) 
of the Enova Disclosure Schedule, Enova has no knowledge, 
with respect to any predecessor of Enova or any subsidiary 
or joint venture of Enova, of any Environmental Claim 
pending or threatened, or of any Release of Hazardous 
Materials that would be reasonably likely to form the 
basis of any Environmental Claim, which could reasonably 
be expected to have a Enova Material Adverse Effect.

               (f)Disclosure.  To Enova's best knowledge, 
Enova has disclosed to Pacific all material facts which 
Enova reasonably believes form the basis of a Enova 
Material Adverse Effect arising from (i) the cost of Enova 
pollution control equipment currently required or known to 
be required in the future; (ii) current Enova remediation 
costs or Enova remediation costs known to be required in 
the future; or (iii) any other environmental matter 
affecting Enova.

               (g)Cost Estimates.  To Enova's best 
knowledge, no environmental matter set forth in the Enova 
SEC Reports or the Enova Disclosure Schedule could be 
reasonably expected to exceed the cost estimates provided 
in the Enova SEC Reports by an amount that individually or 
in the aggregate could reasonably be expected to have a 
Enova Material Adverse Effect.

               SECTION 4.12.  Regulation as a Utility.  
Enova Sub is regulated as a public utility by the State of 
California and by no other state.  Except as set forth in 
Section 4.12 of the Enova Disclosure Schedule, neither 
Enova nor any "subsidiary company" or "affiliate" of Enova 
is subject to regulation as a public utility or public 
service company (or similar designation) by any other 
state in the United States or any foreign country.  Enova 
is an exempt holding company under Section 3(a)(1) of the 
1935 Act.  Section 4.12 of the Enova Disclosure Schedule 
sets forth each "affiliate" and each "subsidiary company" 
of Enova which may be deemed to be a "public utility 
company" or a "holding company" within the meaning of the 
1935 Act.

               SECTION 4.13.  Nuclear Operations.  Except 
as set forth in Section 4.13 of the Enova Disclosure 
Schedule, to the best knowledge of Enova, the operations 
of the San Onofre Nuclear Generating Stations ("SONGS") 
are and have at all times been conducted in material 
compliance with applicable health, safety, regulatory and 
other legal requirements.  To the best knowledge of Enova, 
SONGS maintains emergency plans designed to respond to an 
unplanned release therefrom of radioactive materials into 
the environment and liability insurance to the extent 
required by law, which is consistent with Enova's view of 
the risks inherent in the operation of a nuclear power 
facility.  To the best knowledge of Enova, plans for the 
decommissioning of each of the SONGS facilities and for 
the short-term storage of spent nuclear fuel conform with 
the requirements of applicable regulatory or other legal 
requirement, and such plans have at all times been funded 
to the extent required by law, which is consistent with 
Enova's reasonable budget projections for such plans.

               SECTION 4.14.  Vote Required.  The approval 
of the Enova Merger by the affirmative vote of a majority 
of the votes entitled to be cast by all holders of Enova 
Common Stock (the "Enova Shareholders' Approval") is the 
only vote of the holders of any class or series of the 
capital stock of Enova required to approve this Agreement, 
the Mergers and the other transactions contemplated 
hereby.  No vote of shareholders of Enova is required to 
approve the Energy Marketing Joint Venture Agreement.

               SECTION 4.15.  Accounting Matters.  Neither 
Enova nor, to its best knowledge, any of its affiliates 
has taken or agreed to take any action that would prevent 
the Company from accounting for the transactions to be 
effected pursuant to Articles I and II of this Agreement 
as a pooling of interests in accordance with GAAP and 
applicable SEC regulations.

               SECTION 4.16.  Opinion of Financial 
Advisor.  Enova has received the opinion of Morgan Stanley 
& Co. Incorporated ("Morgan Stanley"), dated October 12, 
1996, to the effect that, as of such date the Enova 
Exchange Ratio is fair to the holders of Enova Common 
Stock.

               SECTION 4.17.  Insurance.  Except as set 
forth on Section 4.17 of the Enova Disclosure Schedule, 
each of Enova and its subsidiaries is, and has been 
continuously since January 1, 1993, insured with 
financially responsible insurers in such amounts and 
against such risks and losses as are customary for 
companies conducting the business as conducted by Enova 
and its subsidiaries during such time period.  Except as 
set forth on Schedule 4.17 of the Enova Disclosure 
Schedule, neither Enova nor its subsidiaries has received 
any notice of cancellation or termination with respect to 
any material insurance policy of Enova or its 
subsidiaries.  The insurance policies of Enova and each of 
its subsidiaries are valid and enforceable policies in all 
material respects. 

               SECTION 4.18.  Ownership of Pacific Common 
Stock.  Enova does not "beneficially own" (as such term is 
defined in the Pacific Rights Agreement) any shares of 
Pacific Common Stock. 
               SECTION 4.19.  Brokers.  No broker, finder 
or investment banker (other than Morgan Stanley) is 
entitled to any brokerage, finder's or other fee or 
commission in connection with the Mergers based upon 
arrangements made by or on behalf of Enova.  Enova has 
heretofore furnished to Pacific a complete and correct 
copy of all agreements between Enova and Morgan Stanley 
pursuant to which such firm would be entitled to any 
payment relating to the Mergers.

               SECTION 4.20.  Tax-Exempt Status.  Except 
as described in Section 4.20(a) of the Enova Disclosure 
Schedule, the execution and delivery of this Agreement and 
the consummation of the transactions contemplated hereby 
will not jeopardize the tax-exempt status of the 
outstanding revenue bonds of Enova or its subsidiaries 
used to finance electric facilities under Section 142(a) 
of the Code or under Section 103(b)(4)(E) of the Internal 
Revenue Code of 1954, as amended, prior to the Tax Reform 
Act of 1986 (the "Bonds").  Except as described in Section 
4.20(b) of the Enova Disclosure Schedule, the execution 
and delivery of the Energy Marketing Joint Venture 
Agreement and the consummation of the transactions 
contemplated thereby will not jeopardize the tax-exempt 
status of the Bonds.  As of the date hereof, except as set 
forth in Section 4.20(c) of the Enova Disclosure Schedule, 
Enova is not aware of any pending or enacted law, rule, 
regulation, administrative order or court decision that 
upon its implementation would jeopardize such tax-exempt 
status. 

                            ARTICLE V
 
             CONDUCT OF BUSINESS PENDING THE MERGERS

               SECTION 5.01.  Conduct of Business Pending 
the Mergers.    Pacific and Enova have each determined to 
enter into the transactions contemplated hereby in order 
to compete as aggressively as possible in the rapidly 
evolving energy marketplace.  Consistent with their mutual 
objectives Pacific and Enova each intend to pursue, 
jointly or independently, strategic opportunities that may 
arise between the date of this Agreement and the Effective 
Time in accordance with the terms of this Article V.  
Consistent with the foregoing, but for the purpose of 
assuring that strategic opportunities are pursued that are 
consistent with each party's objectives, after the date 
hereof and prior to the Effective Time or earlier 
termination of this Agreement, Pacific and Enova each 
agrees as to itself and its subsidiaries, except (x) as 
expressly contemplated or permitted in this Agreement or 
the Energy Marketing Joint Venture Agreement, (y) to the 
extent required by rule, regulation statute or other law 
in connection with California Assembly Bill 1890 (Public 
Utilities:  electrical restructuring) or in connection 
with the CPUC and the FERC industry restructuring 
proceedings, and (z) to the extent the other parties 
hereto shall otherwise consent in writing, to the 
following:
 
               (a)Ordinary Course of Business.  Each party 
hereto shall, and shall cause its respective subsidiaries 
to, carry on their respective businesses in the usual, 
regular and ordinary course in substantially the same 
manner as heretofore conducted and use all commercially 
reasonable efforts to preserve intact their present 
business organizations and goodwill, preserve the goodwill 
and relationships with customers, suppliers and others 
having business dealings with them and, subject to prudent 
management of workforce needs and ongoing programs 
currently in force, keep available the services of their 
present officers and employees. Except as set forth in 
Section 5.01(a) of the Pacific Disclosure Schedule or the 
Enova Disclosure Schedule, respectively, no party shall, 
nor shall any party permit any of its subsidiaries to, 
enter into a new line of business, or make any change in 
the line of business it engages in as of the date hereof 
involving any material investment of assets or resources 
or any material exposure to liability or loss, in the case 
of Pacific, to Pacific and its subsidiaries taken as a 
whole, and in the case of Enova, to Enova and its 
subsidiaries taken as a whole.

               (b)Dividends.  No party shall, nor shall 
any party permit any of its subsidiaries to (i) declare or 
pay any dividends on or make other distributions in 
respect of any of their capital stock other than to such 
party or its wholly-owned subsidiaries and other than 
dividends required to be paid on any series of Pacific 
Preferred Stock, Pacific Sub Preferred Stock, Enova Sub 
Preferred Stock or Califia Company preferred stock in 
accordance with the respective terms thereof, regular 
quarterly dividends on Pacific Common Stock with usual 
record and payment dates not during any fiscal year in 
excess of 110% of the dividends for the prior fiscal year 
and regular quarterly dividends on Enova Common Stock with 
usual record and payment dates not during any fiscal year 
in excess of 110% of the dividends for the prior fiscal 
year; (ii) split, combine or reclassify any of their 
capital stock or issue or authorize or propose the 
issuance of any other securities in respect of, in lieu 
of, or in substitution for, shares of its capital stock, 
except as otherwise provided in this Section 5.01; or 
(iii) redeem, repurchase or otherwise acquire any shares 
of their capital stock, other than (A) redemptions, 
purchases or acquisitions required by the respective terms 
of any series of Pacific Preferred Stock, Pacific Sub 
Preferred Stock or Enova Sub Preferred Stock, (B) in 
connection with refunding of Pacific Preferred Stock, 
Pacific Sub Preferred Stock or Enova Sub Preferred Stock 
with preferred stock or debt at a lower cost of funds or 
in connection with intercompany purchases of capital 
stock, (C) in connection with employee benefit plans, (D) 
by Pacific, subject to paragraph (l) below, the repurchase 
of up to 4,250,000 shares of Pacific Common Stock and the 
expenditure of up to $50,000,000 for the redemption, 
repurchase or other acquisition of shares of Pacific 
Preferred Stock and Pacific Sub Preferred Stock and (E) by 
Enova, subject to paragraph (1) below, the repurchase of 
up to 4,250,000 shares of Enova Common Stock and the 
expenditure of up to $50,000,000 for the redemption, 
repurchase or other acquisition of shares of Enova Sub 
Preferred Stock or Califia preferred stock.  The last 
record date of each of Pacific and Enova on or prior to 
the Effective Time which relates to a regular quarterly 
dividend on Pacific Common Stock or Enova Common Stock, as 
the case may be, shall be the same date and be other than 
the Effective Time. 

               (c)Issuance of Securities.  No party shall, 
nor shall any party permit any of its subsidiaries to, 
issue, agree to issue, deliver or sell, or authorize or 
propose the issuance, delivery or sale of, any shares of 
their capital stock of any class or any securities 
convertible into or exchangeable for, or any rights, 
warrants or options to acquire, any such shares or 
convertible or exchangeable securities, other than:  (i) 
intercompany issuances of capital stock, (ii) issuances in 
connection with transactions contemplated by paragraph (e) 
or paragraph (h) below, (iii) in the case of Pacific and 
its subsidiaries (x) of Pacific Rights issued pursuant to 
the Pacific Rights Agreement in form and substance 
reasonably satisfactory to Enova, provided that the 
Pacific Rights Agreement will be amended to provide that 
the consummation of the transactions contemplated by this 
Agreement will not result in the triggering of any rights 
or entitlements of Pacific shareholders under such Pacific 
Rights Agreement; (y) in connection with refunding 
existing Pacific Preferred Stock and Pacific Sub Preferred 
Stock (or Pacific Preferred Stock and Pacific Sub 
Preferred Stock retired after January 1, 1996 and prior to 
the date hereof and not subsequently refunded) with 
preferred stock or preference stock or debt at a lower 
cost of funds; and (z) subject to Section 5.01(i), shares 
of Pacific Common Stock to be issued pursuant to employee 
benefit plants, stock option and other incentive 
compensation plans, director plans and stock purchase and 
dividend reinvestment plans; (iv) in the case of Enova and 
its subsidiaries (x) in connection with refunding of 
existing Enova Sub Preferred Stock (or Enova Sub Preferred 
Stock retired after January 1, 1996 and prior to the date 
hereof and not subsequently refunded) with preferred stock 
or debt at a lower cost of funds; (y) subject to Section 
5.01(i), shares of Enova Common Stock pursuant to employee 
benefit plans, stock option and other incentive 
compensation plans, director plans and stock purchase and 
dividend reinvestment plans or (z) rights issued pursuant 
to a shareholders rights plan of Enova (if the provisions 
of such rights plan comport with terms analogous to those 
of Section 3.17 (substituting Pacific for Enova therein) 
and are customary for shareholder rights plans); and (v) 
the issuance of capital stock under the Pacific Rights 
Agreement if required by the respective terms thereof.  
The parties shall promptly furnish to each other such 
information as may be reasonably requested including 
financial information and take such action as may be 
reasonably necessary and otherwise fully cooperate with 
each other in the preparation of any registration 
statement under the Securities Act and other documents 
necessary in connection with issuance of securities as 
contemplated by this Section 5.01(c), subject to obtaining 
customary indemnities.

               (d)Charter Documents.  Except as set forth 
in Section 5.01(d) of the Pacific Disclosure Schedule or 
the Enova Disclosure Schedule, no party shall amend or 
propose to amend its respective articles of incorporation 
or by-laws, except as contemplated herein.

               (e)No Acquisitions.  Except as set forth in 
Section 5.01(e) of the Pacific Disclosure Schedule or the 
Enova Disclosure Schedule, and except for acquisitions by 
a party and its subsidiaries of less than $10 million in 
any transaction or series of related transactions, no 
party shall, nor shall any party permit any of its 
subsidiaries to, acquire, or publicly propose to acquire, 
or agree to acquire, by merger or consolidation with, or 
by purchase or otherwise, a substantial equity interest in 
or a substantial portion of the assets of, any business or 
any corporation, partnership, association or other 
business organization or division thereof or otherwise 
acquire or agree to acquire a material amount of assets, 
other than in the ordinary course of business consistent 
with past practice.

               (f)Capital Expenditures (including Emission 
Allowances).  Except as set forth in Section 5.01(f) of 
the Pacific Disclosure Schedule or the Enova Disclosure 
Schedule  or as required by law, no party shall, nor shall 
any party permit any of its subsidiaries to, (i) make 
capital expenditures in excess of $20 million over the 
amount budgeted by such party for capital expenditures on 
the date hereof (as reflected on the capital expenditure 
budgets previously provided by such party to the other) 
through the Effective Time or (ii) enter into written 
commitments with respect to sulfur dioxide emission 
allowances as provided for by the Clean Air Act Amendments 
of 1990, in excess of $100,000.

               (g)No Dispositions.  Except (i) as set 
forth in Section 5.01(g) of the Pacific Disclosure 
Schedule or the Enova Disclosure Schedule and (ii) for 
dispositions by a party and its affiliates of less than 
$10 million in any transaction or series of related 
transactions, no party shall, nor shall any party permit 
any of its subsidiaries to, sell, lease, license, encumber 
or otherwise dispose of, any of its assets, other than 
dispositions in the ordinary course of their business 
consistent with past practice.
 
               (h)Indebtedness.  Except (i) as set forth 
in Section 5.01(h) of the Basalt Disclosure Schedule or 
the Granite Disclosure Schedule, (ii) as contemplated by 
this Agreement, (iii) as budgeted by Enova Financial, Inc. 
on the date hereof through December 31, 1997 or (iv) as 
required by any order, law or regulation of any 
Governmental Authority, no party shall, nor shall any 
party permit any of its subsidiaries to, incur or 
guarantee any indebtedness (including any debt borrowed or 
guaranteed or otherwise assumed, including, without 
limitation, the issuance of debt securities or warrants or 
rights to acquire debt) other than (u) guarantees in favor 
of wholly owned subsidiaries of Pacific or Enova in 
connection with the conduct of the business of such wholly 
owned subsidiaries; (v) short-term indebtedness in the 
ordinary course of business consistent with past practice 
(such as the issuance of commercial paper or the use of 
existing credit facilities); (w) long-term indebtedness 
not aggregating more than $100,000,000 in the case of 
either party and its subsidiaries; (x) in connection with 
the refunding of Pacific Preferred Stock, Pacific Sub 
Preferred Stock or Enova Sub Preferred Stock as permitted 
in Section 5.01(b); (y) in connection with the refunding 
of existing indebtedness at maturity or at a lower cost of 
funds or indebtedness retired after January 1, 1996 and 
prior to the date hereof and not subsequently refunded; or 
(z) refinancing of industrial development bonds for which 
Enova is unable to obtain an opinion of outside counsel as 
to the continuing tax-exempt status of such industrial 
development bonds.  
 
               (i)Compensation, Benefits.  Except (i) as 
set forth in Section 5.01(i) of the Pacific Disclosure 
Schedule or the Enova Disclosure Schedule, (ii) as may be 
required by applicable law or (iii) as expressly 
contemplated by this Agreement, no party shall, nor shall 
any party permit any of its subsidiaries to, (A) enter 
into, adopt or amend or increase the amount or accelerate 
the payment or vesting of any benefit or amount payable, 
or grant any discretionary awards or benefits, under, any 
employee benefit plan or other contract, agreement, 
commitment, arrangement, plan or policy maintained by, 
contributed to or entered into by such party or any of its 
subsidiaries, or increase, or enter into any contract, 
agreement, commitment or arrangement to increase in any 
manner, the compensation or fringe benefits, or otherwise 
to extend, expand or enhance the engagement, employment or 
any related rights, of any director, officer or other 
employee of such party or any of its subsidiaries, except 
for normal promotion and compensation increases, hiring 
and discretionary award grants in the ordinary course of 
business consistent with past practice that, in the 
aggregate, do not result in a material increase in 
benefits or compensation expense to such party or any of 
its subsidiaries or (B) enter into or amend any 
employment, severance, special pay arrangement with 
respect to termination of employment or other similar 
contract, agreement or arrangement with any director or 
officer other than in the ordinary course of business 
consistent with past practice.

               (j)1935 Act.  No party shall, nor shall any 
party permit any of its subsidiaries, except as required 
or contemplated by this Agreement, to engage in any 
activities which would cause a change in its status, or 
that of its subsidiaries, under the 1935 Act, or that 
would impair the ability of Pacific or Enova, 
respectively, to claim an exemption as of right under Rule 
2 of the 1935 Act prior to the Mergers, or that would 
impair the ability of the Company to claim an exemption as 
of right under Rule 2 of the 1935 Act following the 
Mergers, other than the application to the SEC under the 
1935 Act contemplated by this Agreement for approval to 
the extent required of the transactions contemplated 
hereby.

               (k)Accounting.  No party shall, nor shall 
any party permit any of its subsidiaries to, make any 
changes in their accounting methods, except as required by 
law,
rule, regulation or GAAP.
 
               (l)Pooling.  No party shall, nor shall any 
party permit any of its subsidiaries to, take any actions 
which would, or would be reasonably likely to, prevent the 
Company from accounting for the transactions to be 
effected pursuant to Articles I and II of this Agreement 
as a pooling of interests in accordance with GAAP and 
applicable SEC regulations.
 
               (m)Tax-Free Status.  No party shall, nor 
shall any party permit any of its subsidiaries to, take 
any actions which would, or would be reasonably likely to, 
adversely affect the status of the Mergers as tax-free 
transactions (except as to dissenters' rights and 
fractional shares) under Sections 351 of the Code.
 
               (n)Affiliate Transactions.  Except as set 
forth in Section 5.01(n) of the Pacific Disclosure 
Schedule or the Enova Disclosure Schedule and except with 
respect to agreements or arrangements entered into between 
a party and its wholly owned subsidiaries or between 
wholly owned subsidiaries of a party (it being agreed 
that, for purposes of this Section 5.01(n), Pacific Sub 
shall be deemed to be a wholly owned subsidiary of Pacific 
and Enova Sub shall be deemed to be a wholly owned 
subsidiary of Enova), no party shall, nor shall any party 
permit any of its subsidiaries to, enter into any 
agreement or arrangement with any of their respective 
affiliates on terms to such party or its subsidiaries 
materially less favorable than could reasonably be 
expected to have been obtained with an unaffiliated third 
party on an arm's length basis.
 
 (o)Cooperation, Notification.  Each party shall, and 
shall cause its subsidiaries to, (i) confer on a regular 
and frequent basis with one or more representatives of the 
other party to discuss material operational matters and 
the general status of its ongoing operations (including, 
without limitation, the status of the matters set forth in 
Section 5.01(e) of the Pacific Disclosure Schedule and the 
Enova Disclosure Schedule); (ii) promptly notify the other 
party of any significant changes in its properties, 
assets, financial condition or results of operations; 
(iii) advise the other party of any change or event which 
has had or, could reasonably be expected to result in, a 
Pacific Material Adverse Effect or a Enova Material 
Adverse Effect, as the case may be, or a Joint Venture 
Material Adverse Effect; and (iv) promptly provide the 
other party with copies of all material filings made by 
such party or any of its subsidiaries with any state or 
federal court, administrative agency, commission or other 
Governmental Authority in connection with this Agreement 
and the transactions contemplated hereby.
 
               (p)Regulatory Matters.  Except as set forth 
in Section 5.01(p) of the Pacific Disclosure Schedule or 
the Enova Disclosure Schedule, except with regard to those 
specific geographic regions where the parties provide 
overlapping service, and except for filings contemplated 
by the applications filed in FERC Docket Nos. EC96-19-000, 
EL96-48- 000 and ER96-1663-000 and CPUC A.96-06-029, each 
party shall, and shall cause its subsidiaries to, discuss 
with the other party any material changes in its or its 
subsidiaries' material rates or charges (other than pass-
through fuel and gas rates or charges), standards of 
service or accounting from those in effect on the date 
hereof and consult with the other party prior to making 
any filing (or any amendment thereto), or effecting any 
agreement, commitment, arrangement or consent, whether 
written or oral, formal or informal, with respect thereto. 

               (q)Third-Party Consents.  Pacific shall, 
and shall cause its subsidiaries to, use all commercially 
reasonable efforts to obtain all Pacific Required 
Consents.  Pacific shall promptly notify Enova of any 
failure or prospective failure to obtain any such consents 
and, if requested by Enova, shall provide copies of all 
Pacific Required Consents obtained by Pacific to Enova.  
Enova shall, and shall cause its subsidiaries to, use all 
commercially reasonable efforts to obtain all Enova 
Required Consents.  Enova shall promptly notify Pacific of 
any failure or prospective failure to obtain any such 
consents and, if requested by Pacific, shall provide 
copies of all Enova Required Consents obtained by Enova to 
Pacific.

               (r)No Breach, Etc.  No party shall, nor 
shall any party permit any of its subsidiaries to, take 
any action that would or is reasonably likely to result in 
a material breach of any provision of this Agreement or in 
any of its representations and warranties set forth in 
this Agreement being untrue on and as of the Closing Date.  
 
               (s)Company Actions.  Enova and Pacific 
shall cause the Company to take only those actions, from 
the date hereof until the Effective Time, that are 
required or contemplated by this Agreement to be so taken 
by the Company, including, without limitation, the 
declaration, filing or registration with, or notice to or 
authorization, consent or approval of, any Governmental 
Authority, as set forth in Section 3.04(b) of the Pacific 
Disclosure Schedule, Section 3.04(c) of the Pacific 
Disclosure Schedule, Section 4.04(b) of the Enova 
Disclosure Schedule and Section 4.04(c) of the Enova 
Disclosure Schedule.

               SECTION 5.02.  Transition and Strategic 
Opportunity Committees.  (a)  Transition Committee.  A 
committee comprised of  Stephen L. Baum, President and 
Chief Executive Officer of Enova, Donald E. Felsinger, 
President and Chief Executive Officer of Enova Sub, 
Richard D. Farman, President and Chief Operating Officer 
of Pacific, and Warren Mitchell, President of Pacific Sub 
(the "Transition Committee") has been established as of 
the date of this Agreement to examine various alternatives 
regarding the manner in which to best organize, manage and 
integrate the business of the Company after the Effective 
Time.  Stephen L. Baum, the President and Chief Executive 
Officer of Enova, shall chair the Transition Committee and 
coordinate the day-to-day activities of the Transition 
Committee with the concurrence of Richard D. Farman, the 
President and Chief Operating Officer of Pacific.   From 
time to time, the Transition Committee shall report its 
findings to the Board of Directors of each of Pacific and 
Enova.  After the date that each of the Pacific 
Shareholders' Approval and the Enova Shareholders' 
Approval has been obtained and prior to the Effective 
Time, Richard D. Farman,  President and Chief Operating 
Officer of Pacific, shall attend meetings of Enova's Board 
of Directors and Stephen L. Baum, President and Chief 
Executive Officer of Enova, shall attend meetings of 
Pacific's Board of Directors as they deem appropriate in 
consultation with each other and to the extent permitted 
by applicable law.  

               (b)Strategic Opportunity Committee.  A 
committee comprised of Willis B. Wood, Jr., the Chairman 
and Chief Executive Officer of Pacific, Richard D. Farman, 
the President and Chief Operating Officer of Pacific, 
Stephen L. Baum, the President and Chief Executive Officer 
of Enova, and Donald E. Felsinger, the Chief Executive 
Officer of Enova Sub, (the "Strategic Opportunity 
Committee") also has been established to facilitate the 
parties' ability to pursue strategic opportunities that 
would otherwise violate Sections 5.01 (a), (c), (e), (f), 
(g), (h) or (k) (a "New Opportunity") in a manner 
consistent with both the objectives of this Agreement and 
the parties' desires to compete as aggressively as 
possible in the rapidly evolving energy marketplace.  If 
the Strategic Opportunity Committee unanimously approves 
the pursuit of a New Opportunity by Pacific or Enova or 
the two parties acting jointly (no member of the Strategic 
Opportunity Committee to unreasonably withhold such 
approval), then the pursuit of such New Opportunity shall 
not be deemed a breach of such party's or parties' 
obligations under Section 5.01.  The approval of the 
pursuit of a New Opportunity by the Strategic Opportunity 
Committee as provided herein shall be evidenced in 
writing.


                           ARTICLE VI
 
                      ADDITIONAL AGREEMENTS

                           SECTION 6.01.  Access to 
Information; Confidentiality.  (a)  Upon reasonable notice 
and subject to restrictions contained in confidentiality 
agreements to which such party is subject (from which such 
party shall use reasonable efforts to be released), 
Pacific and Enova each shall (and shall cause each of 
their subsidiaries to) afford to the officers, employees, 
accountants, counsel, financial advisors and other 
representatives of the other (collectively, 
"Representatives"), reasonable access, during the period 
prior to the Effective Time, to all its properties, books, 
contracts, commitments and records and, during such 
period, Pacific and Enova each shall (and shall cause each 
of their subsidiaries to) furnish promptly to the other 
(i) all information concerning its business, properties, 
directors, subsidiaries, officers, shareholders, personnel 
and such other matters as such other party may reasonably 
request and (ii) a copy of each material report, schedule 
and other document filed or received by it or any of its 
subsidiaries pursuant to the requirements of the FERC or 
the CPUC and a copy of each report, schedule and other 
document filed or received by it or any of its 
subsidiaries pursuant to the requirements of federal or 
state securities laws or filed with the SEC, the 
Department of Justice, the Federal Trade Commission, the 
NRC, or any other federal, state or local regulatory 
agency or commission, and each party shall make available 
to the other party the appropriate individuals (including 
attorneys, accountants and other professionals) for 
discussion of such party's business, properties, tax 
situation and personnel as the other party may reasonably 
request.  

               (b)Each party shall, and shall cause its 
subsidiaries and Representatives to, keep such information 
confidential in accordance with the terms of the 
Confidentiality Agreement, dated April 4, 1996, between 
Pacific and Enova (the "Confidentiality Agreement").

               SECTION 6.02.  Registration Statement; 
Joint Proxy Statement.

               (a)Preparation and Filing.  The parties 
will prepare and file with the SEC as soon as reasonably 
practicable after the date hereof the Registration 
Statement and the  Proxy Statement (together, the "Joint 
Proxy/Registration Statement").  The parties hereto shall 
each use reasonable efforts to cause the Registration 
Statement to be declared effective under the Securities 
Act as promptly as practicable after such filing.  Each 
party hereto shall also take such action as may be 
reasonably required to cause the shares of Company Common 
Stock issuable in connection with the Mergers to be 
registered or to obtain an exemption from registration 
under applicable state "blue sky" or securities laws; 
provided, however, that no party shall be required to 
register or qualify as a foreign corporation or to take 
other action which would subject it to service of process 
in any jurisdiction where it will not be, following the 
Mergers, so subject.  Each of the parties hereto shall 
furnish all information concerning itself which is 
required or customary for inclusion in the Joint 
Proxy/Registration Statement.  The parties shall use their 
best efforts to cause the shares of Company Common Stock 
issuable in the Mergers to be approved for listing on the 
NYSE upon official notice of issuance.  The information 
provided by any party hereto for use in the Joint 
Proxy/Registration Statement shall be true and correct in 
all material respects without omission of any material 
fact which is required to make such information not false 
or misleading.  No representation, covenant or agreement 
is made by any party hereto with respect to information 
supplied by any other party for inclusion in the Joint 
Proxy Statement/Registration Statement.

               (b)Amendments and Supplements.  No 
amendment or supplement to the Proxy Statement or the 
Registration Statement will be made without the approval 
of all parties.  Each party will advise the others, 
promptly after it receives notice thereof, of the time 
when the Registration Statement has become effective or 
any supplement or amendment has been filed, the issuance 
of any stop order, the suspension, if applicable, of the 
qualification of such party's common stock for sale in any 
jurisdiction, or any request by the SEC for amendment of 
the Proxy Statement or the Registration Statement or 
comments thereon and responses thereto or requests by the 
SEC for additional information.

               (c)Letter of Enova's Accountants.  Enova 
shall use best efforts to cause to be delivered to the 
Company, Pacific, Newco Enova Sub and Newco Pacific Sub a 
letter of Deloitte Touche LLP, dated a date within two 
business days before the date of the Joint 
Proxy/Registration Statement, and addressed to the 
Company, Pacific, Newco Enova Sub and Newco Pacific Sub, 
in form and substance reasonably satisfactory to the 
Company and Pacific and customary in scope and substance 
for "cold comfort" letters delivered by independent public 
accountants in connection with registration statements on 
Form S-4.

               (d)Letter of Pacific's Accountants.  
Pacific shall use best efforts to cause to be delivered to 
the Company, Enova, Newco Enova Sub and Newco Pacific Sub 
a letter of Deloitte Touche LLP, dated a date within two 
business days before the date of the Joint 
Proxy/Registration Statement, and addressed to the 
Company, Enova, Newco Enova Sub and Newco Pacific Sub in 
form and substance satisfactory to the Company and Enova 
and customary in scope and substance for "cold comfort" 
letters delivered by independent public accountants in 
connection with registration statements on Form S-4.

               SECTION 6.03.  Regulatory Matters.
 
               (a)HSR Filings.  Each party hereto shall 
file or cause to be filed with the Federal Trade 
Commission and the Department of Justice any notifications 
required to be filed by their respective "ultimate parent" 
companies under the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976, as amended (the "HSR Act"), and 
the rules and regulations promulgated thereunder with 
respect to the transactions contemplated hereby.  Such 
parties will use all commercially reasonable efforts to 
make such filings promptly and to respond promptly to any 
requests for additional information made by either of such 
agencies.

               (b)Other Regulatory Approvals.  Each party 
hereto shall cooperate and use its best efforts to 
promptly prepare and file all necessary documentation, to 
effect all necessary applications, notices, petitions, 
filings and other documents, and to use all commercially 
reasonable efforts to obtain all necessary permits, 
consents, approvals and authorizations of all Governmental 
Authorities necessary or advisable to (i) consummate the 
transactions contemplated by this Agreement, including, 
without limitation, the Enova Required Statutory Approvals 
and the Pacific Required Statutory Approvals; and (ii) 
allow the Energy Marketing Joint Venture and, at and after 
the Effective Time, the Company's subsidiaries, to market 
and sell electricity and natural gas and related products 
and services as contemplated by the Summary of Terms 
attached as Exhibit A or, after the execution thereof, the 
Energy Marketing Joint Venture Agreement (the "Energy 
Marketing Required Statutory Approvals"), such 
commercially reasonable efforts to include, in the case of 
Pacific, the filing of a notice of cancellation of any 
rate schedule or tariffs applicable to sales of 
electricity by Pacific, or by any affiliate of Pacific, 
that are subject to the jurisdiction of the FERC under the 
Power Act, provided that such notice of cancellation shall 
be filed concurrently with, and the cancellation requested 
therein shall be subject to the grant of, the request for 
approval of the Energy Marketing Required Statutory 
Approvals.  Enova shall have the right to review and 
approve in advance all characterizations of the 
information relating to Enova, on the one hand, and 
Pacific shall have the right to review and approve in 
advance all characterizations of the information relating 
to Pacific, on the other hand, in either case, which 
appear in any filing made in connection with the 
transactions contemplated by this Agreement or the 
Mergers.  Enova and Pacific agree that they will consult 
with each other with respect to the obtaining of all such 
necessary permits, consents, approvals and authorizations 
of Governmental Authorities.  Pacific and Enova shall 
jointly assist the Company in its efforts to obtain any 
necessary approvals from any Governmental Authority.

               SECTION 6.04.  Shareholder Approvals.
 
               (a)Approval of Pacific Shareholders.  
Subject to the terms of Section 6.04(d), Pacific shall, as 
soon as reasonably practicable after the date hereof, (i) 
take all steps necessary duly to call, give notice of, 
convene and hold a special meeting of its shareholders 
(the "Pacific Special Meeting") for the purpose of 
securing the Pacific Shareholders' Approval, (ii) 
distribute to its shareholders the Joint Proxy Statement 
in accordance with applicable Federal and state law and 
with its articles of incorporation and by-laws, (iii) 
subject to the fiduciary duties of its board of directors, 
recommend to its shareholders the approval of the Pacific 
Merger, this Agreement and the transactions contemplated 
hereby and (iv) cooperate and consult with Enova with 
respect to each of the foregoing matters.
 
               (b)Approval of Enova Shareholders.  Subject 
to the terms of Section 6.04(d), Enova shall, as soon as 
reasonably practicable after the date hereof, (i) take all 
steps necessary to call, give notice of, convene and hold 
a special meeting of its shareholders (the "Enova Special 
Meeting" and, together with the Pacific Special Meeting, 
the "Special Meeting") for the purpose of securing the 
Enova Shareholders' Approval, (ii) distribute to its 
shareholders the Joint Proxy Statement in accordance with 
applicable Federal and state law and its articles of 
incorporation, (iii) subject to the fiduciary duties of 
the board of directors of Enova, recommend to its 
shareholders the approval of the Enova Merger, this 
Agreement and the transactions contemplated hereby and 
(iv) cooperate and consult with Pacific with respect to 
each of the foregoing matters.
              (c)Meeting Dates.  Pacific and Enova shall 
use their reasonable best efforts to hold the Special 
Meetings on the same date and at the same time on such 
date.

               (d)Fairness Opinions. It shall be a 
condition to Pacific's obligation to distribute the Joint 
Proxy/Registration Statement to its shareholders and to 
hold the Pacific Special Meeting that the opinions of Barr 
Devlin and Merrill Lynch referred to in Section 3.15 shall 
have been reaffirmed as of the date of the Joint 
Proxy/Registration Statement and shall not have been 
withdrawn on or prior to the date of the Pacific Special 
Meeting.  It shall be a condition to Enova's obligation to 
distribute the Joint Proxy/Registration Statement to its 
shareholders and to hold the Enova Special Meeting that 
the opinion of Morgan Stanley referred to in Section 4.16 
shall have been reaffirmed as of the date of the Joint 
Proxy/Registration Statement and shall not have been 
withdrawn on or prior to the date of the Enova Special 
Meeting.

               SECTION 6.05.  Directors' and Officers' 
Indemnification.
 
               (a)Indemnification.  To the extent, if any, 
not provided by an existing right of indemnification or 
other agreement or policy, from and after the Effective 
Time, the Company shall, to the fullest extent not 
prohibited by applicable law, indemnify, defend and hold 
harmless each person who is now, or has been at any time 
prior to the date hereof, or who becomes prior to the 
Effective Time, an officer or director of any of the 
parties hereto or any of their subsidiaries (each an 
"Indemnified Party" and collectively, the "Indemnified 
Parties") against all losses, expenses (including 
reasonable attorney's fees), claims, damages or 
liabilities or, subject to the proviso of the next 
succeeding sentence, amounts paid in settlement arising 
out of actions or omissions occurring at or prior to the 
Effective Time (whether or not asserted or claimed prior 
to, at or after the Effective Time) that are in whole or 
in part based on, or arising out of the fact that such 
person is or was a director or officer of such party or 
based on or arising out of or pertaining to the 
transactions contemplated by this Agreement.  In the event 
of any such loss, expense, claim, damage or liability 
(whether or not arising before the Effective Time), (i) 
the Company shall pay the reasonable fees and expenses of 
counsel selected by the Indemnified Parties, which counsel 
shall be reasonably satisfactory to the Company, promptly 
after statements therefor are received and otherwise 
advance to such Indemnified Party upon request 
reimbursement of documented expenses reasonably incurred, 
in either case to the extent not prohibited by California 
Law (which consent shall not be unreasonably withheld), 
(ii) the Company will cooperate in the defense of any such 
matter and (iii) any determination required to be made 
with respect to whether an Indemnified Party's conduct 
complies with the standards set forth under California law 
and the Company's Articles of Incorporation or By-Laws 
shall be made by independent counsel mutually acceptable 
to the Company and the Indemnified Party; provided, 
however, that the Company shall not be liable for any 
settlement effected without its written consent (which 
consent shall not be unreasonably withheld). The 
Indemnified Parties as a group may retain only one law 
firm with respect to each related matter except to the 
extent there is, in the sole opinion of counsel to an 
Indemnified Party, under applicable standards of 
professional conduct, a conflict on any significant issue 
between positions of any two or more Indemnified Parties.

               (b)Insurance.  For a period of six years 
after the Effective Time, the Company shall cause to be 
maintained in effect the policies of directors' and 
officers' liability insurance maintained by Pacific and 
Enova; provided, however, that in no event shall the 
Company be required to expend in any one year an amount in 
excess of 200% of the annual premiums currently paid by 
Enova and Pacific for such insurance; and provided further 
that if the annual premiums of such insurance coverage 
exceed such amount, the Company shall be obligated to 
obtain a policy with the greatest coverage available for a 
cost not exceeding such amount.

               (c)Successors.  Neither the Company nor any 
of its successors or assigns shall (i) consolidate with or 
merge into any other person so as not to be the continuing 
or surviving corporation or entity of such consolidation 
or merger or (ii) transfer all or substantially all of its 
properties and assets to any person unless, in either such 
case, proper provisions shall be made so that the 
successors and assigns of the Company shall assume the 
obligations set forth in this Section 6.05.
 
               (d)Survival of Indemnification.  To the 
fullest extent not prohibited by law, from and after the 
Effective Time, all rights to indemnification as of the 
date hereof in favor of the employees, agents, directors 
or officers of Pacific, Enova and their respective 
subsidiaries with respect to their activities as such 
prior to the Effective Time, as provided in their 
respective Articles of Incorporation or By-laws, in effect 
on the date thereof or otherwise in effect on the date 
hereof, shall survive the Mergers and shall continue in 
full force and effect for a period of not less than six 
years from the Effective Time.

               (e)Indemnification Agreements.  Enova, 
Pacific and the Company shall honor and fulfill in all 
respects the obligations of Enova and Pacific pursuant to 
indemnification agreements with Enova's and Pacific's 
officers and directors existing at the Effective Time.

               SECTION 6.06.  Disclosure Schedules.  On or 
before the date hereof, (i) Pacific shall deliver to Enova 
a schedule (the "Pacific Disclosure Schedule"), which 
shall be accompanied by a certificate signed by the chief 
financial officer of Pacific stating the Disclosure 
Schedule is being delivered pursuant to this Section 
6.06(i) and (ii) Enova shall deliver to Pacific a schedule 
(the "Enova Disclosure Schedule"), which shall be 
accompanied by a certificate signed by the chief financial 
officer of Enova stating the Enova Disclosure Schedule is 
being delivered pursuant to this Section 6.06(ii).  The 
Pacific Disclosure Schedule and the Enova Disclosure 
Schedule are collectively referred to herein as the 
"Disclosure Schedules".  The Disclosure Schedules, when so 
delivered, shall be deemed to constitute an integral part 
of this Agreement and to modify the respective 
representations, warranties, covenants or agreements of 
the parties hereto contained herein to the extent that 
such representations, warranties, covenants or agreements 
expressly refer to the Disclosure Schedules.  Anything to 
the contrary contained herein or in the Disclosure 
Schedules notwithstanding, any and all statements, 
representations, warranties or disclosures set forth in 
the Disclosure Schedules delivered on or before the date 
hereof shall be deemed to have been made on and as of the 
date hereof.  From time to time prior to the Closing, the 
parties shall promptly supplement or amend the Disclosure 
Schedules with respect to any matter, condition or 
occurrence hereafter arising which, if existing or 
occurring at the date of this Agreement, would have been 
required to be set forth or described in the Disclosure 
Schedules.  No supplement or amendment shall be deemed to 
cure any breach of any representation or warranty made in 
this Agreement or have any effect for the purpose of 
determining satisfaction of the conditions set forth in 
Section 7.02(b) or Section 7.03(b).

               SECTION 6.07.  Public Announcements.  
Subject to each party's disclosure obligations imposed by 
law, Enova and Pacific will cooperate with each other in 
the development and distribution of all news releases and 
other public information disclosures with respect to this 
Agreement or any of the transactions contemplated hereby 
and shall not issue any such public announcement or 
statement without the consent of the other party (which 
consent shall not be unreasonably withheld).
 
               SECTION 6.08.  Rule 145 Affiliates.  
Pacific shall identify in a letter to Enova, and Enova 
shall identify in a letter to Pacific, all persons who 
are, at the Closing Date, "affiliates" of Pacific and 
Enova, respectively, as such term is used in Rule 145 
under the Securities Act.  Pacific and Enova shall use 
their respective best efforts to cause their respective 
affiliates to deliver to the Company on or prior to the 
Closing Date a written agreement substantially in the form 
attached as Exhibit 6.08 (each, an "Affiliate Agreement").

               SECTION 6.09.  Employee Agreements and 
Workforce Matters.
 
               (a)Certain Employee Agreements.  Subject to 
Section 6.10 and Section 6.15, the Company and its 
subsidiaries shall honor, without modification, all 
contracts, agreements, collective bargaining agreements 
and commitments of the parties prior to the date hereof 
which apply to any current or former employee or current 
or former director of the parties hereto; provided, 
however, that this undertaking is not intended to prevent 
the Company from enforcing such contracts, agreements, 
collective bargaining agreements and commitments in 
accordance with their terms, including, without 
limitation, any reserved right to amend, modify, suspend, 
revoke or terminate any such contract, agreement, 
collective bargaining agreement or commitment.

               (b)Workforce Matters.  Subject to the terms 
of any applicable collective bargaining agreements, for a 
period of three years following the Effective Time, any 
reductions in workforce in respect of employees of the 
Company shall be made on a fair and equitable basis, in 
light of the circumstances and the objectives to be 
achieved, giving consideration to previous work history, 
job experience, and qualifications, without regard to 
whether employment was with Pacific or its subsidiaries or 
Enova or its subsidiaries, and any employees whose 
employment is terminated or jobs are eliminated by the 
Company or any of its subsidiaries during such period 
shall be entitled to participate on a fair and equitable 
basis in the job opportunity and employment placement 
programs offered by the Company or any of its 
subsidiaries.

               SECTION 6.10.  Employee Benefit Plans.

               (a)Maintenance of Pacific and Enova Benefit 
Plans.  Each of the Pacific Benefit Plans and Enova 
Benefit Plans in effect as of the Effective Time, except 
as provided in Section 6.10(b) and Section 6.11, shall be 
maintained in effect with respect to the employees or 
former employees of Pacific and any of its subsidiaries, 
on the one hand, and of Enova and any of its subsidiaries, 
on the other hand, respectively, who are covered by any 
such benefit plan immediately prior to the Closing Date 
until the Company otherwise determines after the Effective 
Time; provided, however, that nothing herein contained 
shall limit any reserved right contained in any such 
Pacific Benefit Plan or Enova Benefit Plan to amend, 
modify, suspend, revoke or terminate any such plan.  Any 
person hired by the Company or any of its subsidiaries 
after the Closing Date who was not employed by any party 
hereto or its subsidiaries immediately prior to the 
Closing Date shall be eligible to participate in such 
benefit plans maintained, or contributed to, by the 
subsidiary, division or operation by which such person is 
employed, provided that such person meets the eligibility 
requirements of the applicable plan.

               (b)Incentive Compensation Plans.  Prior to 
the Effective Time, a committee will be formed for the 
purposes of developing short- and long-term incentive 
compensation arrangements for the Company which are to be 
implemented after the Effective Time and making the 
appropriate adjustments, if any, to the performance goals, 
target awards and any other relevant criteria under the 
incentive compensation plans of Pacific and Enova that are 
in effect as of the Effective Time to take the Mergers 
into account.  In addition, such committee shall conduct a 
review of Enova's and Pacific's respective benefit plans 
following the signing of this Agreement in order to 
coordinate the provision of benefits after the Effective 
Time and to eliminate duplicative benefits, including, 
without limitation, through the establishment by the 
Company of replacement benefit plans (the "Company 
Replacement Plans").  Each participant in any Pacific 
Benefit Plan or Enova Benefit Plan that is replaced by a 
Company Replacement Plan shall receive credit for purposes 
of eligibility to participate, vesting, benefit accrual 
and eligibility to receive benefits under any Company 
Replacement Plan for service credited for the 
corresponding purpose under such benefit plan; provided, 
however, that such crediting of service shall not operate 
to duplicate any benefit to any such participant or the 
funding for any such benefit. 

               (c)Separate Plans.  Pacific and Enova each 
agrees that even in the event that the Pacific and Pacific 
Sub pension plan shares a common or master trust with the 
Enova and Enova Sub pension plan and even if Enova and 
Pacific provide identical benefits the plans shall remain 
legally separate whereby the assets of one plan cannot be 
applied to the liabilities of the other plan.
          SECTION 6.11.  Stock Option and Other Stock 
Plans.

               (a) Amendment of Stock Option Plans and 
Agreements.  (i)  Prior to the Effective Time, Pacific 
shall use its reasonable best efforts to cause each 
individual award agreement entered into under the Pacific 
Employee Stock Option Plan, the Pacific Stock Incentive 
Plan and the Pacific 1979 Stock Option Plan to be amended 
so as to eliminate the rights of the award recipients 
thereunder to receive cash in exchange for such award upon 
a Change in Control (as such term is defined in such 
plans) that are triggered, directly or indirectly, in 
whole or in part, by the Mergers or any transaction or 
event consummated or occurring in connection therewith.

               (ii)Effective as of the Effective Time, 
Pacific shall amend the Pacific Employee Stock Option 
Plan, the Pacific Stock Incentive Plan and the Pacific 
1979 Stock Option Plan and Enova shall amend the 1986 
Long-Term Incentive Plan (as amended and restated 
effective April 25, 1995) and each of Pacific and Enova 
shall amend each underlying award agreement to provide 
that each outstanding award with respect to shares of 
Pacific Common Stock and Enova Common Stock, respectively 
(each, a "Stock Award"), along with any tandem stock 
appreciation right, shall constitute an award with respect 
shares of Company Common Stock, on the same terms and 
conditions as were applicable under such  Stock Award, 
based on the same number of shares of the Company Common 
Stock as the holder of such Stock Award would have been 
entitled to receive pursuant to the Mergers in accordance 
with Article II had such holder exercised such award in 
full immediately prior to the Effective Time.  The number 
of shares, the award price, and the terms and conditions 
of exercise of such award, shall be determined in a manner 
that preserves both (i) the aggregate gain (or loss) on 
the Stock Award immediately prior to the Effective Time 
and (ii) the ratio of the exercise price per share subject 
to the Stock Award to the fair market value (determined 
immediately prior to the Effective Time) per share subject 
to such award; provided, however, that in the case of any 
option to which Section 421 of the Code applies by reason 
of its qualification under any of Sections 422-424 of the 
Code, option price, the number of shares purchasable 
pursuant to such option and the terms and conditions of 
exercise of such option shall be determined in order to 
comply with Section 424(a) of the Code.  Prior to the 
Effective Time, each of Pacific and Enova shall take such 
actions, including using its reasonable best efforts to 
obtain the consent of the awardees, as may be necessary to 
carry out the substitution and exchange contemplated in 
this Section 6.11(a).  At the Effective Time, the Company 
shall assume each award agreement relating to a Stock 
Award, each as amended as previously provided.  As soon as 
practicable after the Effective Time, the Company shall 
deliver to the holders of Stock Awards appropriate notices 
setting forth such holders' rights pursuant to the Company 
stock incentive plan and each underlying award agreement, 
each as assumed by the Company.

               (b)Company Action.  With respect to any 
other Pacific Benefit Plan, Enova Benefit Plan or benefit 
plan of the Company under which the delivery of Pacific 
Common Stock, Enova Common Stock or Company Common Stock, 
as the case may be, is required upon payment of benefits, 
grant of awards or exercise of options (the "Stock 
Plans"), the Company shall take all corporate action 
necessary or appropriate to (i) obtain shareholder 
approval with respect to such plan to the extent such 
approval is required for purposes of the Code or other 
applicable law, or to enable such plan to comply with Rule 
16b-3 promulgated under the Exchange Act, (ii) reserve for 
issuance under such plan or otherwise provide a sufficient 
number of shares of Company Common Stock for delivery upon 
payment of benefits, grant of awards or exercise of 
options under such plan and (iii) as soon as practicable 
after the Effective Time, file registration statements on 
Form S-3 or Form S-8, as the case may be (or any successor 
or other appropriate forms), with respect to the shares of 
Company Common Stock subject to such plan to the extent 
such registration statement is required under applicable 
law, and the Company shall use its best efforts to 
maintain the effectiveness of such registration statements 
(and maintain the current status of the prospectuses 
contained therein) for so long as such benefits and grants 
remain payable and such options remain outstanding.  With 
respect to those individuals who subsequent to the Mergers 
will be subject to the reporting requirements under 
Section 16(a) of the Exchange Act, the Company shall 
administer the Stock Plans, where applicable, in a manner 
that complies with Rule 16b-3 promulgated under the 
Exchange Act.

               SECTION 6.12.  No Solicitations.  No party 
hereto shall, and each such party shall cause its 
subsidiaries not to, permit any of its Representatives to, 
and shall use its best efforts to cause such persons not 
to, directly or indirectly:  initiate, solicit or 
encourage, or take any action to facilitate the making of 
any offer or proposal which constitutes or is reasonably 
likely to lead to any Acquisition Proposal (as defined 
below), or, in the event of an unsolicited Acquisition 
Proposal, except prior to the receipt of the Enova 
Shareholders' Approval and of the Pacific Shareholders' 
Approval to the extent the Board of Directors of the party 
receiving such unsolicited Acquisition Proposal determines 
in good faith after consultation with outside counsel that 
such action is reasonably necessary for such Board of 
Directors to act in a manner consistent with its fiduciary 
duties under applicable law, engage in negotiations or 
provide any confidential information or data to any person 
relating to any Acquisition Proposal.  Each party hereto 
shall notify the other party orally and in writing of any 
such inquiries, offers or proposals, within 48 hours of 
the receipt thereof, shall keep the other party informed 
of the status of any such inquiry, offer or proposal, and 
shall give the other party three days' advance notice of 
any agreement to be entered into with or any information 
to be supplied to any person making such inquiry, offer or 
proposal.  Each party hereto shall immediately cease and 
cause to be terminated all existing discussions and 
negotiations, if any, with any parties conducted 
heretofore with respect to any Acquisition Proposal.  As 
used in this Section 6.12, "Acquisition Proposal" shall 
mean any tender or exchange offer, proposal for a merger, 
consolidation or other business combination involving any 
party or any of its material subsidiaries, or any proposal 
or offer (in each case, whether or not in writing and 
whether or not delivered to the shareholders of a party 
generally) to acquire in any manner, directly or 
indirectly, a substantial equity interest in, or a 
substantial portion of the assets of any party or any of 
its material subsidiaries, other than any of the foregoing 
transactions among the parties hereto or pursuant to the 
transactions contemplated by this Agreement.  Nothing 
contained herein shall prohibit a party from taking and 
disclosing to its shareholders a position contemplated by 
Rule 14e-2(a) under the Exchange Act with respect to a 
Acquisition Proposal by means of a tender offer.

               SECTION 6.13.  Company Board of Directors.  
Enova's and Pacific's Boards of Directors will take such 
action as may be necessary to cause the Board of Directors 
of the Company at the Effective Time to be constituted of 
an equal number of directors designated by each of Enova 
and Pacific.   Among the directors of the Company at the 
Effective Time shall be Richard D. Farman, President and 
Chief Operating Officer of Pacific, who shall be 
designated by Pacific, and Stephen L. Baum, President and 
Chief Executive Officer of Enova, who shall be designated 
by Enova.  Neither Pacific nor Enova shall designate any 
other officer as a director of the Company at the 
Effective Time.  The initial designation of such directors 
among the three classes of the Board of Directors of the 
Company shall be agreed among the parties, the designees 
of each party to be divided as equally as is feasible 
among such classes; provided, however, that if, prior to 
the Effective Time, any of such designees shall decline or 
be unable to serve, the party which designated such person 
shall designate another person to serve in such person's 
stead.  Enova's and Pacific's Boards of Directors will 
also take such action as may be necessary to cause the 
committees of the Board of Directors of the Company at the 
Effective Time to be constituted of an equal number of 
directors of the Company designated by Enova and Pacific.  

               SECTION 6.14.  Company Officers.  At the 
Effective Time, pursuant to and in accordance with the 
terms hereof and of the employment contracts referred to 
in Section 6.15, Richard D. Farman, President and Chief 
Operating Officer of Pacific, shall become Chairman of the 
Board and Chief Executive Officer of the Company, and 
Stephen L. Baum, President and Chief Executive Officer of 
Enova, shall become Vice-Chairman, President and Chief 
Operating Officer of the Company.  If either of such 
persons is unable or unwilling to hold such offices for 
the period set forth in his employment contract, his 
successor shall be selected by the Board of Directors of 
the Company in accordance with its Bylaws.  The Chairman 
of the Board and Chief Executive Officer and the President 
and Chief Operating Officer of the Company shall comprise 
the Office of the Chairman of the Company to which all 
other officers of the Company and, after the Effective 
Time, the Chief Executive Officers of Pacific, Pacific 
Sub, Enova and Enova Sub shall report.  Richard D. Farman, 
President and Chief Operating Officer of Pacific, and 
Stephen L. Baum, President and Chief Executive Officer of 
Enova, shall unanimously recommend to the Board of 
Directors of the Company candidates to serve as the 
officers of the Company who are not otherwise designated 
by this Agreement.  Such officers shall be appointed by 
the Board of Directors of the Company in accordance with 
its By-Laws.

               SECTION 6.15.  Employment Contracts.  The 
Company shall on the date hereof enter into four 
employment contracts in the forms set forth in Exhibit 
6.15.
 
               SECTION 6.16.  Post-Merger Operations.  
Following the Effective Time, the Company shall conduct 
its operations in accordance with the following:  

                                   (a)Principal Corporate 
Offices.  The Company and Enova Sub shall maintain their 
principal corporate offices in San Diego and Pacific Sub 
shall maintain its principal corporate offices in Los 
Angeles.

               (b)Maintenance of Enova Sub and Pacific 
Sub.  Pacific Sub, on the one hand, and Enova Sub, on the 
other hand, shall continue their separate corporate 
existences, operating under the names of "Southern 
California Gas Company" and "San Diego Gas & Electric", 
respectively.

               (c)Charities.  After the Effective Time, 
the Company shall provide charitable contributions and 
community support within the service areas of the parties 
and each of their respective subsidiaries at levels 
substantially comparable to the levels of charitable 
contributions and community support provided by the 
parties and their respective subsidiaries within their 
service areas within the two-year period immediately prior 
to the Effective Time.

               SECTION 6.17.  Expenses.  Subject to 
Section 8.03, all costs and expenses incurred in 
connection with this Agreement and the transactions 
contemplated hereby shall be paid by the party incurring 
such expenses, except that those expenses incurred in 
connection with printing the Joint Proxy Statement and the 
Registration Statement, as well as the filing fees 
relating thereto, and any such filing fees for 
applications to the FERC, the CPUC, the NRC or the SEC 
shall be shared equally by Enova, on the one hand, and 
Pacific, on the other.

               SECTION 6.18.  Energy Marketing Joint 
Venture.  As promptly as practicable following the date 
hereof, each of Pacific and Enova shall use their best 
efforts to negotiate the terms of, and enter into, the 
Energy Marketing Joint Venture Agreement, which agreement 
shall contain substantially the terms contemplated by the 
Summary of Terms attached as Exhibit A.


                           ARTICLE VII

                    CONDITIONS TO THE MERGERS

               SECTION 7.01.  Conditions to the 
Obligations of Each Party.  The respective obligations of 
each party to effect the Mergers shall be subject to the 
satisfaction on or prior to the Closing Date of the 
following conditions, except, to the extent permitted by 
applicable law, that such conditions may be waived in 
writing pursuant to Section 9.05 by the joint action of 
the parties hereto:
 
               (a)Shareholder Approvals.  The Pacific 
Shareholders' Approval and the Enova Shareholders' 
Approval shall have been obtained.

                                   (b)No Injunction.  No 
temporary restraining order or preliminary or permanent 
injunction or other order by any federal or state court 
preventing consummation of the Mergers shall have been 
issued and continuing in effect, and the Mergers and the 
other transactions contemplated hereby shall not have been 
prohibited under any applicable federal
or state law or regulation.

               (c)Registration Statement.  The 
Registration Statement shall have become effective in 
accordance with the provisions of the Securities Act, and 
no stop order suspending such effectiveness shall have 
been issued and remain in effect.

               (d)Listing of Shares.  The shares of 
Company Common Stock issuable in the Mergers pursuant to 
Article II shall have been approved for listing on the 
NYSE upon official notice of issuance.

               (e)Statutory Approvals.  The Enova Required 
Statutory Approvals and the Pacific Required Statutory 
Approvals shall have been obtained at or prior to the 
Effective Time, such approvals shall have become Final 
Orders and neither such Final Orders nor any order, law or 
regulation of any Governmental Authority imposes terms or 
conditions which, in the aggregate, could reasonably be 
expected to have a material adverse effect on (i) the 
ability of the Energy Marketing Joint Venture to achieve 
the business objectives contemplated by the Summary of 
Terms attached as Exhibit A or (ii) the operations, 
properties, assets or financial condition or results of 
operations of the Company and its prospective subsidiaries 
taken as a whole or which would be materially inconsistent 
with the agreements of the parties contained herein.  A 
"Final Order" means action by the relevant regulatory 
authority which has not been reversed, stayed, enjoined, 
set aside, annulled or suspended, with respect to which 
any waiting period prescribed by law before the 
transactions contemplated hereby may be consummated has 
expired, and as to which all conditions to the 
consummation of such transactions prescribed by law, 
regulation or order have been satisfied.

               (f)HSR Act.  All applicable waiting periods 
under the HSR Act shall have
expired.

               (g)Pooling.  Each of Enova and Pacific 
shall have received a letter of its independent public 
accountants, dated the Closing Date, in form and substance 
reasonably satisfactory to Pacific and Enova, stating that 
the transactions effected pursuant to Articles I and II of 
this Agreement will qualify as a pooling of interests 
transaction under GAAP and applicable SEC regulations.

               SECTION 7.02.  Conditions to the 
Obligations of Pacific.  The obligation of Pacific to 
effect the Pacific Merger shall be further subject to the 
satisfaction, on or prior to the Closing Date, of the 
following conditions, except as may be waived by Pacific 
in writing pursuant to Section 9.05:

(a)Performance of Obligations of Enova.  Enova will have 
performed in all material respects its agreements and 
covenants contained in or contemplated by this Agreement 
required to be performed by it at or prior to the 
Effective Time.

               (b)Representations and Warranties.  The 
representations and warranties of Enova set forth in this 
Agreement shall be true and correct in all material 
respects as of the date hereof (representations and 
warranties made as of a specified date which shall be true 
and correct as of such date) and as of the Closing Date as 
if made on and as of the Closing Date, except as otherwise 
contemplated by this Agreement.  
               (c)Closing Certificates.  Pacific shall 
have received a certificate signed by an executive officer 
of Enova, dated the Closing Date, to the effect that, to 
the best of each such officer's knowledge, the conditions 
set forth in Section 7.02(a) and Section 7.02(b) have been 
satisfied.

               (d)Enova Material Adverse Effect.  No Enova 
Material Adverse Effect shall have occurred and there 
shall exist no fact or circumstance which could reasonably 
be expected to have a material adverse effect on the 
operations, properties, assets, financial condition, 
results of operations or prospects of Enova and its 
subsidiaries taken as a whole or on the consummation of 
the transactions contemplated by this Agreement or the 
ability of the Energy Marketing Joint Venture to achieve 
the business objectives contemplated by the Summary of 
Terms attached as Exhibit A.

               (e)Tax Opinion.  Pacific shall have 
received an opinion of Skadden, Arps, Slate, Meagher & 
Flom, in form and substance satisfactory to Pacific, dated 
the Closing Date, to the effect that the Enova Merger, 
taken together with the Pacific Merger, will be treated as 
an exchange under Section 351 of the Code.

               (f)Enova Required Consents.  The Enova 
Required Consents the failure of which to obtain would 
have a Enova Material Adverse Effect or a Joint Venture 
Material Adverse Effect shall have been obtained.

               SECTION 7.03.  Conditions to the 
Obligations of Enova.  The obligations of Enova to effect 
the Enova Merger shall be further subject to the 
satisfaction, prior to the Closing Date, of the following 
conditions, except as may be waived by Enova in writing 
pursuant to Section 9.05:

               (a)Performance of Obligations of Pacific.  
Pacific will have performed in all material respects its 
agreements and covenants contained in or contemplated by 
this Agreement required to be performed at or prior to the 
Effective Time.

               (b)Representations and Warranties.  The 
representations and warranties of Pacific set forth in 
this Agreement shall be true and correct in all material 
respects as of the date hereof (representations and 
warranties made as of a specified date which shall be true 
and correct as of such date) and as of the Closing Date as 
if made on and as of the Closing Date, except as otherwise 
contemplated by this Agreement.

               (c)Closing Certificates.  Enova shall have 
received certificates signed by the chief executive 
officer and chief financial officer of Pacific, dated the 
Closing Date, to the effect that, to the best of such 
officer's knowledge, the conditions set forth in Section 
7.03(a) and Section 7.03(b) have been satisfied.

               (d)Pacific Material Adverse Effect.  No 
Pacific Material Adverse Effect shall have occurred and 
there shall exist no fact or circumstance which could 
reasonably be expected to have a material adverse effect 
on the operations, properties, assets, financial 
condition, results of operations or prospects of Pacific 
and its subsidiaries taken as a whole or on the 
consummation of the transactions contemplated by this 
Agreement or the ability of the Energy Marketing Joint 
Venture to achieve the business objectives contemplated by 
the Summary of Terms attached as Exhibit A.

               (e)Tax Opinion.  Enova shall have received 
an opinion of Shearman & Sterling, in form and substance 
satisfactory to Enova, dated the Closing Date, to the 
effect that the Enova Merger, taken together with the 
Pacific Merger, will be treated as an exchange under 
Section 351 of the Code.

               (f)Pacific Required Consents.  The Pacific 
Required Consents the failure of which to obtain would 
have a Pacific Material Adverse Effect or a Joint Venture 
Material Adverse Effect shall have been obtained.


                          ARTICLE VIII

                TERMINATION, AMENDMENT AND WAIVER

               SECTION 8.01.  Termination.  This Agreement 
may be terminated at any time prior to the Closing Date, 
whether before or after approval by the shareholders of 
the respective parties hereto contemplated by this 
Agreement:  

               (a) by mutual written consent of the Boards 
of Directors of Enova and Pacific; 
               (b)by Pacific or Enova, by written notice 
to the other, if the Effective Time shall not have 
occurred on or before April 30, 1998; provided, however, 
that the right to terminate the Agreement under this 
Section 8.01(b) shall not be available to any party whose 
failure to fulfill any obligation under this Agreement has 
been the cause of, or resulted in, the failure of the 
Effective Time to occur on or before this date;

                  (c)by Pacific or Enova, by written 
notice to the other, if, either the Enova Shareholders' 
Approval or the Pacific Shareholders' Approval, or both, 
shall not have been obtained on or before June 30, 1997; 
provided, however, the right to terminate this Agreement 
under this Section 8.01(c) shall not be available to any 
party whose failure to fulfill any obligations under this 
Agreement has been the cause of, or resulted in, the 
failure of either of such approvals to have been obtained 
on or before such date;

               (d)by Pacific or Enova, if any state or 
federal law, order, rule or regulation is adopted or 
issued, which has the effect, as supported by the written 
opinion of outside counsel for such party, of prohibiting 
the Pacific Merger or the Enova Merger, or by any party 
hereto, if any court of competent jurisdiction in the 
United States or any State shall have issued an order, 
judgement or decree permanently restraining, enjoining or 
otherwise prohibiting the Pacific Merger or the Enova 
Merger, and such order, judgement or decree shall have 
become final and nonappealable;

               (e)by Enova, by written notice to Pacific, 
if there shall have been any material breach of any 
material representation or warranty, or any material 
breach of any covenant or agreement of Pacific hereunder 
and such breach shall not have been remedied within 60 
days after receipt by Pacific of notice in writing from 
Enova, specifying the nature of such breach and requesting 
that it be remedied; 

               (f)by Pacific, by written notice to Enova, 
if there shall have been any material breach of any 
material representation or warranty, or any material 
breach of any covenant or agreement of Enova hereunder and 
such breach shall not have been remedied within 60 days 
after receipt by Enova of notice in writing from Pacific, 
specifying the nature of such breach and requesting that 
it be remedied;

               (g)by Enova, by written notice to Pacific, 
if, prior to the Pacific Special Meeting, the Board of 
Directors of Pacific or any committee thereof (i) shall 
withdraw or modify in any manner adverse to Enova its 
approval or recommendation of this Agreement or the 
Pacific Merger, (ii) shall approve or recommend any 
Acquisition Proposal by a party other than Enova or any of 
its affiliates, or (iii) shall resolve to take any of the 
actions specified in clause (i) or (ii);

               (h)by Pacific, by written notice to Enova, 
if, prior to the Enova Special Meeting, the Board of 
Directors of Enova or any committee thereof (i) shall 
withdraw or modify in any manner adverse to Pacific its 
approval or recommendation of this Agreement or the Enova 
Merger, (ii) shall approve or recommend any Acquisition 
Proposal by a party other than Pacific or any of its 
affiliates, or (iii) shall resolve to take any of the 
actions specified in clause (i) or (ii);

               (i)by Enova at any time prior to the Enova 
Special Meeting, upon two days' prior notice to Pacific, 
if, as a result of an Acquisition Proposal by a party 
other than Pacific or any of its affiliates, the Board of 
Directors of Enova determines in good faith after 
consultation with outside counsel (and after giving effect 
to all concessions which may be offered by Pacific 
pursuant to the proviso set forth below) that acceptance 
of the Acquisition Proposal is reasonably necessary for 
such Board of Directors to act in a manner consistent with 
its fiduciary duties under applicable law; provided, 
however, prior to any such termination, Enova shall, and 
shall cause its respective financial and legal advisors 
to, negotiate with Pacific to make such adjustments in the 
terms and conditions of this Agreement as would enable 
Enova to proceed with the transactions contemplated herein 
on such adjusted terms; or

               (j)by Pacific at any time prior to the 
Pacific Special Meeting, upon two days' prior notice to 
Pacific, if, as a result of an Acquisition Proposal by a 
party other than Enova or any of its affiliates, the Board 
of Directors of Pacific determines in good faith after 
consultation with outside counsel (and after giving effect 
to all concessions which may be offered by Enova pursuant 
to the proviso set forth below) that acceptance of the 
Acquisition Proposal is reasonably necessary for such 
Board of Directors to act in a manner consistent with its 
fiduciary duties under applicable law; provided, however, 
prior to any such termination, Pacific shall, and shall 
cause its respective financial and legal advisors to, 
negotiate with Enova to make such adjustments in the terms 
and conditions of this Agreement as would enable Pacific 
to proceed with the transactions contemplated herein on 
such adjusted terms.       

               SECTION 8.02.  Effect of Termination.  In 
the event of termination of this Agreement by either Enova 
or Pacific pursuant to Section 8.01, there shall be no 
liability on the part of either Enova or Pacific or their 
respective officers or directors hereunder, except (a) 
Sections 6.01(b), 6.17 and 8.03 shall survive the 
termination and (b) nothing herein shall relieve any party 
from liability for any willful breach hereof.

               SECTION 8.03.  Fees and Expenses.

               (a)Expense Reimbursement by Enova.  If this 
Agreement is terminated pursuant to (i) Section 8.01(c) as 
a result of the Enova Shareholders' Approval not being 
obtained and on or prior to the date of the Enova Special 
Meeting Enova has been the subject of a publicly announced 
Acquisition Proposal, (ii) Section 8.01(f), (iii) Section 
8.01(h) or (iv) Section 8.01(i), then Enova, shall 
promptly (but not later than five business days after 
receipt or delivery of notice of such termination, as 
applicable) pay to Pacific cash in an amount equal to the 
greater of (x) $3 million or (y) the lesser of (A) all 
documented out-of- pocket expenses and fees incurred by 
Pacific (including, without limitation, fees and expenses 
payable to all legal, accounting, financial, public 
relations and other professional advisers) arising out of, 
in connection with or related to this Agreement and the 
Energy Marketing Joint Venture Agreement and the 
transactions contemplated herein and therein and (B) $5 
million, in the case of termination on or before February 
12, 1997, or $10 million in the case of termination after 
February 12, 1997 (the "Pacific Out-of-Pocket Expenses"); 
provided, however, that if this Agreement is terminated by 
Pacific pursuant to Section 8.01(f) as a result of a 
willful breach by Enova, Pacific may pursue any remedies 
available to it at law or in equity and shall, in addition 
to the Pacific Out-of-Pocket Expenses, be entitled to 
retain such additional amounts as Pacific may be entitled 
to receive at law or in equity.

               (b)Expense Reimbursement by Pacific.  If 
this Agreement is terminated pursuant to (i) Section 
8.01(c) as a result of the Pacific Shareholders' Approval 
not being obtained and on or prior to the date of the 
Pacific Special Meeting Pacific has been the subject of a 
publicly announced Acquisition Proposal, (ii) Section 
8.01(e), (iii) Section 8.01(g) or (iv) Section 8.01(j), 
then Pacific, shall promptly (but not later than five 
business days after receipt or delivery of notice of such 
termination, as applicable), pay to Enova cash in an 
amount equal to the greater of (x) $3 million or (y) the 
lesser of (A) all documented out-of-pocket expenses and 
fees incurred by Enova (including, without limitation, 
fees and expenses payable to all legal, accounting, 
financial, public relations and other professional 
advisers) arising out of, in connection with or related to 
this Agreement and the Energy Marketing Joint Venture 
Agreement and the transactions contemplated herein and 
therein and (B) $5 million in the case of termination on 
or before February 12, 1997, or $10 million in the case of 
termination after February 12, 1997 (the "Enova Out-of-
Pocket Expenses"); provided, however, that if this 
Agreement is terminated by Enova pursuant to Section 
8.01(e) as a result of a willful breach by Pacific, Enova 
may pursue any remedies available to it at law or in 
equity and shall, in addition to the Enova Out-of-Pocket 
Expenses, be entitled to retain such additional amounts as 
Enova may be entitled to receive at law or in equity.

               (c)Enova Termination Fee.  If (i) this 
Agreement is terminated pursuant to (1) Section 8.01(c) as 
a result of the Enova Shareholders' Approval not being 
obtained and on or prior to the date of the Enova Special 
Meeting Enova has been the subject of a publicly announced 
Acquisition Proposal, (2) Section 8.01(h) or (3) Section 
8.01(i) and (ii) within one year of any such termination 
described in clause (i) above, Enova or any of its 
material subsidiaries accepts a written offer to 
consummate or consummates an Acquisition Proposal, then 
Enova, will, upon the earlier of such acceptance or 
consummation, pay to Pacific a termination fee equal to 
$72 million in cash.

               (d)Pacific Termination Fee.  If (i) this 
Agreement is terminated pursuant to (1) Section 8.01(c) as 
a result of the Pacific Shareholders' Approval not being 
obtained and on or prior to the date of the Pacific 
Special Meeting Pacific has been the subject of a publicly 
announced Acquisition Proposal, (2) Section 8.01(g) or (3) 
Section 8.01(j) and (ii) within one year of any such 
termination described in clause (i) above, Pacific or any 
of its material subsidiaries accepts a written offer to 
consummate or consummates an Acquisition Proposal, then 
Pacific, will, upon the earlier of such acceptance or 
consummation, pay to Enova a termination fee equal to $72 
million in cash.

               (e)Expenses.  The parties agree that the 
agreements contained in this Section 8.03 are an integral 
part of the transactions contemplated by the Agreement and 
constitute liquidated damages and not a penalty.  If one 
party fails to promptly pay to the other any fee due 
hereunder, the defaulting party shall pay the costs and 
expenses (including legal fees and expenses) in connection 
with any action, including the filing of any lawsuit or 
other legal action, taken to collect payment, together 
with interest on the amount of any unpaid fee from the 
date such fee was required to be paid at a rate per annum 
equal at all times to 2% per annum above the rate per 
annum that is the publicly announced prime rate of 
Citibank, N.A.


                           ARTICLE IX

                       GENERAL PROVISIONS

               SECTION 9.01.  Effectiveness of 
Representations, Warranties and Agreements.  Except as 
otherwise provided in this Section 9.01, the 
representations, warranties and agreements of each party 
hereto shall remain operative and in full force and effect 
regardless of any investigation made by or on behalf of 
any other party hereto, any person controlling any such 
party or any of their officers or directors, whether prior 
to or after the execution of this Agreement.  The 
representations, warranties and agreements in this 
Agreement shall terminate at the Effective Time or upon 
the termination of this Agreement pursuant to Section 
8.01, as the case may be, except that the agreements set 
forth in Articles I and II and Sections 6.05, 6.09, 6.10, 
6.11, 6.13, 6.14, 6.15 and 6.16 shall survive the 
Effective Time indefinitely.

               SECTION 9.02.  Notices.  All notices and 
other communications given or made pursuant hereto shall 
be in writing and shall be deemed to have been duly given 
or made as of the date delivered, mailed or transmitted, 
and shall be effective upon receipt, if delivered 
personally, mailed by registered or certified mail 
(postage prepaid, return receipt requested) to the parties 
at the following addresses (or at such other address for a 
party as shall be specified by like change of address) or 
sent by electronic transmission, with confirmation 
received, to the telecopy number specified below:

               (a)If to Enova:

  Enova Corporation
  101 Ash Street
  San Diego, California  92112
  Telecopier No.:  (619) 696-4611
  Attention:  Stephen L. Baum

               With copies to:

  Shearman & Sterling
  599 Lexington Avenue
  New York, New York 10022
  Telecopier No.:  (212) 848-7179
  Attention:David W. Heleniak, Esq.
  and

  Shearman & Sterling
  555 California Street
  San Francisco, California 94104
  Telecopier No.: (415) 616-1199
  Attention:Michael J. Kennedy, Esq.

 (b)If to Pacific:

  Pacific Enterprises
  555 W. 5th Street
  Los Angeles, California  90013
  Telecopier No.:  (213) 244-8292
  Attention:Willis B. Wood, Jr.
  Richard D. Farman

 With copies to:

  Skadden, Arps, Slate, Meagher & Flom
  919 Third Avenue
  New York, New York 10022
  Telecopier No. (212) 735-2000
  Attention:Peter Allan Atkins, Esq.
  Sheldon Adler, Esq.

               SECTION 9.03.  Certain Definitions.  For 
purposes of this Agreement, the term:

               (a)"affiliates" means a person that 
directly or indirectly, through one or more 
intermediaries, controls, is controlled by, or is under 
common control with, the first mentioned person; 
including, without limitation, any partnership or joint 
venture in which the person (either alone, or through or 
together with any other subsidiary) has, directly or 
indirectly, an interest of 5% or more;

               (b)"beneficial owner" with respect to any 
shares, means a person who shall be deemed to be the 
beneficial owner of such shares (i) which such person or 
any of its affiliates or associates beneficially owns, 
directly or indirectly, (ii) which such person or any of 
its affiliates or associates (as such term is defined in 
Rule 12b-2 of the Exchange Act) has, directly or 
indirectly, (A) the right to acquire (whether such right 
is exercisable immediately or subject only to the passage 
of time), pursuant to any agreement, arrangement or 
understanding or upon the exercise of consideration 
rights, exchange rights, warrants or options, or 
otherwise, or (B) the right to vote pursuant to any 
agreement, arrangement or understanding or (iii) which are 
beneficially owned, directly or indirectly, by any other 
persons with whom such person or any of its affiliates or 
person with whom such person or any of its affiliates or 
associates has any agreement, arrangement or understanding 
for the purpose of acquiring, holding, voting or disposing 
of any shares;

               (c)"business day" means any day other than 
a day on which banks in San Diego or Los Angeles are 
required or authorized to be closed;

               (d)"control" (including the terms 
"controlled by" and "under common control with") means the 
possession, directly or indirectly or as trustee or 
executor, of the power to direct or cause the direction of 
the management or policies of a person, whether through 
the ownership of stock, as trustee or executor, by 
contract or credit arrangement or otherwise;

               (e)"joint venture" of a person means any 
corporation or other entity (including partnerships and 
other business associations and joint ventures) in which 
such person or one or more of its subsidiaries owns an 
equity interest that is less than a majority of any class 
of the outstanding voting securities or equity, other than 
equity interests held for passive investment purposes 
which are less than 5% of any class of the outstanding 
voting securities or equity of any such entity;

               (f)"knowledge" of any person means the 
actual knowledge of the executive officers of such person 
and each subsidiary of such person. 
               (g)"person" means an individual, 
corporation, partnership, association, trust, 
unincorporated organization, other entity or group (as 
defined in Section 13(d)(3) of the Exchange Act); and

               (h)"subsidiary" or "subsidiaries" of any 
person means any corporation, partnership, joint venture 
or other legal entity of which such person (either alone 
or through or together with any other subsidiary) owns, 
directly or indirectly, more than 50% of the stock or 
other equity interests the holders of which are generally 
entitled to vote for the election of the board of 
directors or other governing body of such corporation or 
other legal entity.

               SECTION 9.04.  Amendment.  This Agreement 
may be amended by the parties hereto by action taken by or 
on behalf of their respective Boards of Directors at any 
time prior to the Effective Time; provided, however, that, 
after approval hereof by the shareholders of Enova and 
Pacific, no amendment may be made which by law requires 
further approval by such shareholders.  This Agreement may 
not be amended except by an instrument in writing signed 
by the parties hereto.

               SECTION 9.05.  Waiver.  At any time prior 
to the Effective Time, any party hereto may (a) extend the 
time for the performance of any of the obligations or 
other acts of the other parties hereto, (b) waive any 
inaccuracies in the representations and warranties 
contained herein or in any document delivered pursuant 
hereto and (c) waive compliance with any of the agreements 
or conditions contained herein. Any such extension or 
waiver shall be valid if set forth in an instrument in 
writing signed by the party or parties to be bound
thereby.

               SECTION 9.06.  Headings.  The headings 
contained in this Agreement are for reference purposes 
only and shall not affect in any way the meaning or 
interpretation of this Agreement.

               SECTION 9.07.  Severability.  If any term 
or other provision of this Agreement is invalid, illegal 
or incapable of being enforced by any rule of law, or 
public policy, all other conditions and provisions of this 
Agreement shall nevertheless remain in full force and 
effect so long as the economic or legal substance of the 
transactions contemplated hereby is not affected in any 
manner materially adverse to any party.  Upon such 
determination that any term or other provision is invalid, 
illegal or incapable of being enforced, the parties hereto 
shall negotiate in good faith to modify this Agreement so 
as to effect the original intent of the parties as closely 
as possible in an acceptable manner to the end that 
transactions contemplated hereby are fulfilled to the 
extent possible.

               SECTION 9.08.  Entire Agreement.  This 
Agreement (including the documents and instruments 
referred to herein) constitutes the entire agreement and 
supersedes all prior agreements and undertakings (other 
than the Confidentiality Agreement), both written and 
oral, among the parties, or any of them, with respect to 
the subject matter hereof and, except as otherwise 
expressly provided herein, is not intended to confer upon 
any other person any rights or remedies hereunder.

               SECTION 9.09.  Assignment.  This Agreement 
shall not be assigned by operation of law or otherwise.

               SECTION 9.10.  Parties in Interest.  This 
Agreement shall be binding upon and inure solely to the 
benefit of each party hereto, and nothing in this 
Agreement, express or implied, is intended to or shall 
confer upon any other person any right, benefit or remedy 
of any nature whatsoever under or by reason of this 
Agreement, other than Section 6.05 (which is intended to 
be for the benefit of the Indemnified Parties and may be 
enforced by such Indemnified Parties).  Notwithstanding 
the foregoing and any other provision of this Agreement, 
and in addition to any other required action of the Board 
of Directors of the Company (a) a majority of the 
directors (or their successors) serving on the Board of 
Directors of the Company who are designated by Pacific 
pursuant to Section 6.13 shall be entitled during the 
three year period commencing at the Effective Time (the 
"Three Year Period") to enforce the provision of Sections 
6.05, 6.09, 6.10, 6.11, 6.13, 6.14, 6.15 and 6.16 on 
behalf of the Pacific officers, directors and employees, 
as the case may be, and (b) a majority of the directors 
(or their successors) serving on the Board of Directors of 
the Company who are designated by Enova pursuant to 
Section 6.13 shall be entitled during the Three Year 
Period to enforce the provisions of Sections 6.05, 6.09, 
6.10, 6.11, 6.13, 6.14, 6.15 and 6.16 on behalf of the 
Enova officers, directors and employees, as the case may 
be.  Such directors' right and remedies under the 
preceding sentence are cumulative and are in addition to 
any other rights and remedies they may have at law or in 
equity, but in no event shall this Section 9.10 be deemed 
to impose any additional duties on any such directors.   
The Company shall pay, at the time they are incurred, all 
costs, fees and expenses of such directors incurred in 
connection with the assertion of any rights on behalf of 
the persons set forth above pursuant to this Section.

               SECTION 9.11.  Failure or Indulgence Not 
Waiver; Remedies Cumulative.  No failure or delay on the 
part of any party hereto in the exercise of any right 
hereunder shall impair such right or be construed to be a 
waiver of, or acquiescence in, any breach of any 
representation, warranty or agreement herein, nor shall 
any single or partial exercise of any such right preclude 
other or further exercise thereof or of any other right.  
All rights and remedies existing under this Agreement are 
cumulative to, and not exclusive of, any rights or 
remedies otherwise available.

               SECTION 9.12.  Governing Law.  This 
Agreement shall governed by, and construed in accordance 
with, the laws of the State of California.

               SECTION 9.13.  Counterparts.  This 
Agreement may be executed in one or more counterparts, and 
by the different parties hereto in separate counterparts, 
each of which when executed shall be deemed to be an 
original but all of which taken together shall constitute 
one and the same agreement.

               SECTION 9.14.  WAIVER OF JURY TRIAL.  EACH 
OF Enova, Pacific, THE COMPANY, NEWCO Enova SUB AND NEWCO 
Pacific SUB HEREBY IRREVOCABLY WAIVES, TO THE FULLEST 
EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN 
ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED 
UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR 
RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS 
CONTEMPLATED HEREBY.

               SECTION 9.15.  Further Assurances.  Each 
party will execute such further documents and instruments 
and take such further actions as may reasonably be 
requested by any other party in order to consummate the 
transactions contemplated by this Agreement and the Energy 
Marketing Joint Venture Agreement in accordance with the 
terms hereof and thereof.


               IN WITNESS WHEREOF, Enova, Pacific, the 
Company, Newco Enova Sub and Newco Pacific Sub have caused 
this Agreement to be executed as of the date first written 
above by their respective officers thereunto duly 
authorized.


                              ENOVA CORPORATION
By: /s/ Stephen L. Baum
   --------------------
Name: Stephen L. Baum
Title: President & Chief Executive Officer


PACIFIC ENTERPRISES


By:       /s/ Willis B. Wood
  ---------------------------
Name: Willis B. Wood
Title:Chairman & Chief Executive Officer

MINERAL ENERGY COMPANY

  By: /s/ KEVIN C. SAGARA 
   ----------------------- 
  Name:  Kevin C. Sagara
  Title:President

  G MINERAL ENERGY SUB


  By: /s/ KEVIN C. SAGARA
  -----------------------
  Name:  Kevin C. Sagara
  Title: President

B MINERAL ENERGY SUB

  By:/s/ GARY KYLE 
  -----------------
  Name: Gary Kyle
  Title: President

                        TABLE OF CONTENTS


                                 ARTICLE I
 
                           THE MERGERS

SECTION 1.01.  The Mergers                             2
SECTION 1.02.  Effective Time of the Mergers; Closing  2
SECTION 1.03.  Effects of the Mergers                  3

                                ARTICLE II

       CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES

SECTION 2.01.  Conversion of Securities          4
SECTION 2.02.  Exchange of Certificates          5
SECTION 2.03.  Dissenting Shares                 7

                                ARTICLE III

            REPRESENTATIONS AND WARRANTIES OF PACIFIC

SECTION 3.01.  Organization and Qualification       8
SECTION 3.02.  Subsidiaries                         9
SECTION 3.03.  Capitalization                       9
SECTION 3.04.  Authority; Non-Contravention; 
Statutory Approvals; Compliance                     10
SECTION 3.05.  Reports and Financial Statements     12
SECTION 3.06.  Absence of Certain Changes or Events; 
Absence of Undisclosed Liabilities                  12
SECTION 3.07.  Litigation                           13
SECTION 3.08.  Registration Statement and 
Proxy Statement                                     13
SECTION 3.09.  Tax Matters                          14
SECTION 3.10.  Employee Matters; ERISA              17
SECTION 3.11.  Environmental Protection            19
SECTION 3.12.  Regulation as a Utility             21
SECTION 3.13.  Vote Required                       22
SECTION 3.14.  Accounting Matters                  22
SECTION 3.15.  Opinions of Financial Advisors      22
SECTION 3.16.  Insurance                           22
SECTION 3.17.  Pacific Rights Agreement            22
SECTION 3.18.  Brokers                             23


                                ARTICLE IV
 
             REPRESENTATIONS AND WARRANTIES OF ENOVA

SECTION 4.01.  Organization and Qualification   23
SECTION 4.02.  Subsidiaries                     23
SECTION 4.03.  Capitalization                   24
SECTION 4.04.  Authority; Non-Contravention; 
Statutory Approvals; Compliance                 25
SECTION 4.05.  Reports and Financial Statements 26
SECTION 4.06.  Absence of Certain Changes
 or Events; Absence of Undisclosed Liabilities  27
SECTION 4.07.  Litigation                       27
SECTION 4.08.  Registration
 Statement and Proxy Statement                  27
SECTION 4.09.  Tax Matters                      28
SECTION 4.10.  Employee Matters; ERISA          31
SECTION 4.11.  Environmental Protection         33
SECTION 4.12.  Regulation as a Utility          34          
SECTION 4.13.  Nuclear Operations               34
SECTION 4.14.  Vote Required                    35
SECTION 4.15.  Accounting Matters               35              
SECTION 4.16.  Opinion of Financial Advisor     35     
SECTION 4.17.  Insurance                        35
SECTION 4.18.  Ownership of Pacific Common 
                                          Stock 35
SECTION 4.19.  Brokers                          35
SECTION 4.20.  Tax-Exempt Status                36
                                ARTICLE V
 
             CONDUCT OF BUSINESS PENDING THE MERGERS

SECTION 5.01.  Conduct of Business Pending the Mergers 36
SECTION 5.02.  Transition and Strategic Opportunity Committees

                                ARTICLE VI
 
                      ADDITIONAL AGREEMENTS

SECTION 6.01.  Access to Information; Confidentiality 43
SECTION 6.02.  Registration Statement; Joint Proxy 
                                            Statement 43
SECTION 6.03.  Regulatory Matters                     44
SECTION 6.04.  Shareholder Approvals                  45
SECTION 6.05.  Directors' and Officers' Indemnification 46
SECTION 6.06.  Disclosure Schedules             47
SECTION 6.07.  Public Announcements             48
SECTION 6.08.  Rule 145 Affiliates              48
SECTION 6.09.  Employee Agreements 
               and Workforce Matters            48
SECTION 6.10.  Employee Benefit Plans           49
SECTION 6.11.  Stock Option and Other 
                 Stock Plans                    50
SECTION 6.12.  No Solicitations                 51
SECTION 6.13.  Company Board of Directors       52
SECTION 6.14.  Company Officers                 52
SECTION 6.15.  Employment Contracts             52
SECTION 6.16.  Post-Merger Operations           52
SECTION 6.17.  Expenses                         53
SECTION 6.18.  Energy Marketing Joint Venture   53

                                ARTICLE VII

                    CONDITIONS TO THE MERGERS

SECTION 7.01.  Conditions to the Obligations
                of Each Party                   53
SECTION 7.02.  Conditions to the 
               Obligations of Pacific           54
SECTION 7.03.  Conditions to 
                the Obligations of Enova        55

                               ARTICLE VIII

                TERMINATION, AMENDMENT AND WAIVER

SECTION 8.01.  Termination                      56
SECTION 8.03.  Fees and Expenses                58

                                ARTICLE IX

                       GENERAL PROVISIONS

SECTION 9.01.  Effectiveness of Representations, 
Warranties and Agreements                        60
SECTION 9.02.  Notices                          60
SECTION 9.03.  Certain Definitions              61
SECTION 9.04.  Amendment                        62
SECTION 9.05.  Waiver                           62
SECTION 9.06.  Headings                         63
SECTION 9.07.  Severability                     63
SECTION 9.08.  Entire Agreement                 63
SECTION 9.09.  Assignment                       63
SECTION 9.10.  Parties in Interest              63
SECTION 9.11.  Failure or Indulgence Not Waiver;
 Remedies Cumulative                            64
SECTION 9.12.  Governing Law                    64
SECTION 9.13.  Counterparts                     64
SECTION 9.14.  WAIVER OF JURY TRIAL             64
SECTION 9.15.  Further Assurances               64



                            EXHIBITS

Exhibit A Summary of Terms of Energy Marketing Joint 
Venture
Exhibit 1.02(a)(i)Enova Merger Agreement
Exhibit 1.02(a)(ii)Pacific Merger Agreement
Exhibit 6.08   Form of Affiliate Agreement
Exhibit 6.15   Form of Employment Contracts

                     INDEX OF DEFINED TERMS


Term                                                 Page

1935 Act                                               9
Acquisition Proposal                                  53
affiliate                                             22
Affiliate Agreement                                   50
affiliates                                            64
Agreement                                              1
Atomic Energy Act                                     27
Barr Devlin                                           23
beneficial owner                                      64
Bonds                                                 37
business day                                          64
California Law                                         1
Certificates                                           5
Closing Agreement                                     16
Closing                                                3
Closing Date                                           3
Code                                                   2
Company                                                1
Company Common Stock                                   4
Company Replacement Plans                             51
Company Shares                                         6
Confidentiality Agreement                             45
control                                               64
controlled by                                         64
Converted Shares                                       6
CPUC                                                  12
Disclosure Schedules                                  49
Dissenting Shares                                      8
Effective Time                                         3
Encumbrances                                           9
Energy Marketing Joint Venture                         1
Energy Marketing Joint Venture Agreement               1
Energy Marketing Required Statutory Approvals         46
Enova                                                   1
Enova Benefit Plans                                    32
Enova Common Stock                                      4
Enova Disclosure Schedule                              49
Enova Dissenting Shares                                 8
Enova Effective Time                                    3
Enova Financial Statements                             28
Enova Material Adverse Effect                          24
Enova Merger                                         1, 2
Enova Merger Agreement                                  2
Enova Out-of-Pocket Expenses                           61
Enova Preferred Stock                                  25
Enova Ratio                                             4
Enova Required Consents                                26
Enova Required Statutory Approvals                     27
Enova SEC Reports                                      28
Enova Shareholders' Approval                           36
Enova Special Meeting                                  47
Enova Sub                                               1
Enova Sub Common Stock                                 25
Enova Sub Par Value $20 Preferred Stock                25
Enova Sub No Par Preference Stock                      25
Environmental Claim                                    21
Environmental Laws                                     22
Environmental Permits                                  20
ERISA                                                  18
Excess Shares                                           7
Exchange                                                5
FERC                                                   12
Final Order                                            56
GAAP                                                    2
Gas Act                                                12
Governmental Authority                                 12
Hazardous Materials                                    22
HSR Act                                                46
Indemnified Parties                                    48
Indemnified Party                                      48
IRS                                                    17
Joint Proxy/Registration Statement                     45
joint venture                                          64
Joint Venture Material Adverse Effect                   9 
knowledge                                              65
Merger Consideration                                    6
Mergers                                                 1
Merrill Lynch                                          23
Morgan Stanley                                         37
New Opportunity                                        44
Newco Enova Sub                                         1
Newco Pacific Sub                                       1
NRC                                                    27
NYSE                                                    7
Pacific                                                 1
Pacific Benefit Plans                                  18
Pacific Class A Preferred Stock                         5
Pacific Common Stock                                    4
Pacific Disclosure Schedule                            49
Pacific Dissenting Shares                               8
Pacific Effective Time                                  3
Pacific Financial Statements                           13
Pacific Material Adverse Effect                         9
Pacific Merger                                        1, 2 
Pacific Merger Agreement                                 3
Pacific Out-of-Pocket Expenses                          61
Pacific Preferred Stock                                 5
Pacific Ratio                                           5
Pacific Required Consents                               11
Pacific Required Statutory Approvals                    12
Pacific Right                                            4
Pacific Rights Agreement                                 4
Pacific SEC Reports                                     13
Pacific Shareholders' Approval                          23
Pacific Special Meeting                                 47
Pacific Sub                                             10
Pacific Sub Common Stock                                10
Pacific Sub Preference Stock                            10
Pacific Sub Preferred Stock                             10
Pacific Sub Series A Preferred                          10
Pacific Sub Series Preferred                            10
Pacific Sub $25 Preferred                               10
PBGC                                                    19
PCBs                                                    22
person                                                  65
Power Act                                               12
Proxy Statement                                         14
Registration Statement                                  14
Release                                                 22
Representatives                                         44
SEC                                                     12
Securities Act                                          12
Shares Trust                                             7
SONGS                                                   36
Special Meeting                                         47
Stock Award                                             52
Stock Plans                                             52
Strategic Opportunity Committee                         44
subsidiary or subsidiaries                              65
subsidiary company                                     22
Tax Return                                              14
Tax Ruling                                              16
Taxes                                                   14
Three Year Period                                       66
Transition Committee                                    44
under common control with                               64
Violation                                               11

EX-10

Exhibit 10.2

EMPLOYMENT AGREEMENT


   EMPLOYMENT AGREEMENT ("Agreement") made and entered into 
as of the 12th day of October, 1996, by and between Mineral 
Energy Company (the "Company"), a California corporation, 
and Stephen L. Baum (the "Executive");

   WHEREAS, the Executive is currently serving as President 
and Chief Executive Officer of Enova, Inc., a California 
corporation ("Enova"), and the Company desires to secure the 
continued employment of the Executive in accordance
herewith;

   WHEREAS, pursuant to the Agreement and Plan of Merger 
(the "Merger Agreement"), dated as of October 12, 1996, 
among, inter alia, Enova, Pacific Enterprises, a California 
corporation ("Pacific Enterprises"), and the Company, the 
parties thereto have agreed to a merger (the "Merger") 
pursuant to the terms thereof; 

   WHEREAS, the Executive is willing to commit himself to be 
employed by the Company on the terms and conditions herein 
set forth and thus to forego opportunities elsewhere; and

   WHEREAS, the parties desire to enter into this Agreement, 
as of the Effective Date (as hereinafter defined), setting 
forth the terms and conditions for the employment 
relationship of the Executive with the Company during the 
Employment Period (as hereinafter defined),

   NOW, THEREFORE, IN CONSIDERATION of the mutual premises, 
covenants and agreements set forth below, it is hereby 
agreed as follows:

1.  Employment and Term.

   (a)  Employment.  The Company agrees to employ the 
Executive, and the Executive agrees to be employed by the 
Company, in accordance with the terms and provisions of this 
Agreement during the term thereof (as described below).

   (b)  Term.  The term of the Executive's employment under 
this Agreement shall commence (the "Effective Date") as of 
the closing date (the "Closing Date") of the Merger, as 
described in the Merger Agreement, and shall continue until 
the earlier of the Executive's Mandatory Retirement Age (as 
defined herein) or the fifth anniversary of the Effective 
Date (such term being referred to hereinafter as the 
"Employment Period"); provided, however, that commencing on 
the fourth anniversary of the Effective Date (and each 
anniversary of the Effective Date thereafter) the term of 
this Agreement shall automatically be extended for one 
additional year, unless, prior to such date, the Company or 
the Executive shall give written notice to the other party 
that it or he, as the case may be, does not wish to so 
extend this Agreement; and further provided, however, that 
if the Merger Agreement is terminated, then, at the time of 
such termination, this Agreement shall be deemed cancelled 
and of no force or effect and the Executive shall continue 
to be subject to such agreements and arrangements that were 
in effect prior to the Closing Date.  As a condition to the 
Merger, the parties hereto agree that the Company shall be 
responsible for all of the premises, covenants and 
agreements set forth in this Agreement.

   (c)  Mandatory Retirement.  In no event shall the term of 
the Executive's employment hereunder extend beyond the end 
of the month in which the Executive's 65th birthday occurs 
(the "Mandatory Retirement Age").

2.  Duties and Powers of Executive.

   (a)  Position.  

   (i)  Period A.  During the period commencing on the 
Effective Date and ending on the earlier of September 1, 
2000 or the second anniversary of the Effective Date 
("Period A"), the Executive shall serve as the Vice Chairman 
of the Board of Directors of the Company (the "Board"), 
President and Chief Operating Officer of the Company with 
such authority, duties and responsibilities with respect to 
such position as set forth below in subsection(b) hereof.  
In this capacity, the Executive shall be a member of the 
office of
the Chairman (which shall be an office held jointly by the 
Executive and the Chief Executive Officer/Chairman of the 
Board) ("Office of the Chairman")and shall report only to 
the Chief Executive Officer/Chairman of the Board. The 
presidents and principal executive officers of the Company's 
regulated and nonregulated businesses and the senior-most 
person in charge of each of the Company's policy units shall 
report directly to the Office of the Chairman.   

   (ii)  Period B.  During the period, if any, commencing on 
the second anniversary of the Effective Date and ending on 
September 1, 2000("Period B"), the Executive shall be 
nominated to the position of, and if elected shall serve as, 
the Vice Chairman of the Board, Chief Executive Officer and 
President of the Company with such authority, duties and 
responsibilities with respect to such position as set forth 
below.  In this capacity, the Executive shall report only to 
the Board.  The presidents and chief executive officers of 
the Company's regulated and nonregulated businesses and the 
senior-most person in charge of each of the Company's policy 
units shall report directly to the Executive.
 (iii)  Period C.  During the period, if any, commencing 
September 1, 2000 and ending on the expiration date of the 
Agreement ("Period C"),the Executive shall be nominated to 
the position of, and if elected shall serve as, Chairman, 
Chief Executive Officer and President of the Company with 
such authority, duties and responsibilities with respect to 
such position as set forth below.  In this capacity, the 
Executive shall report only to the Board. The presidents and 
chief executive officers of the Company's regulated and 
nonregulated businesses and the senior-most person in charge 
of each of the Company's policy units shall report directly 
to the Executive.  

 (b)  Duties.

   (i)  Chief Executive Officer.  The duties of the Chief 
Executive Officer of the Company shall include but not be 
limited to directing the overall business, affairs and 
operations of the Company, through its officers, all of whom 
shall report directly or indirectly to the Office of the 
Chairman or, if there is no Office of the Chairman, to the 
Chief Executive Officer.   (ii)  Chief Operating Officer.  
The duties of the Chief Operating Officer of the Company 
shall include, but not be limited to, directing the day-to-
day business, affairs and operations of the Company, under 
the supervision of the Chief Executive Officer and (to the 
extent the Chief Executive Officer is not also the 
President) the President.   (iii)  President.  The duties of 
the President of the Company shall include, but not be 
limited to, assisting the Chief Executive Officer (to the 
extent the President is not also the Chief Executive 
Officer) in directing the overall business, affairs and 
operations of the Company.   (iv)  Chairman of the Board.  
The Chairman of the Board shall be a director and shall 
preside at meetings of the Board and meetings of the 
shareholders.  The Chairman shall be responsible for Board 
and shareholder governance and shall have such duties and 
responsibilities as are customarily assigned to such 
positions.  (v)  Vice Chairman of the Board.  The Vice 
Chairman of the Board shall be a director and, in the 
absence of the Chairman, shall preside at meetings of the 
Board and meetings of shareholders.  The Vice Chairman shall 
assist the Chairman in his responsibility for Board and 
shareholder governance and shall have such duties as are 
customarily assigned to such position.

   (c)  Board Membership.  The Executive shall be a member 
of the Board on the first day of the Employment Period, and 
the Board shall propose the Executive for re-election to the 
Board throughout the Employment Period.

   (d)  Attention.  During the Employment Period, and 
excluding any periods of vacation and sick leave to which 
the Executive is entitled, the Executive shall devote full 
attention and time during normal business hours to the 
business and affairs of the Company and, to the extent 
necessary to discharge the responsibilities assigned to the 
Executive under this Agreement, use the Executive's best 
efforts to carry out such responsibilities faithfully and 
efficiently.  It shall not be considered a violation of the 
foregoing for the Executive to serve on corporate, industry, 
civic or charitable boards or committees, so long as such 
activities do not interfere with the performance of the 
Executive's responsibilities as an employee of the Company 
in accordance with this Agreement.
3.  Compensation.

   It is the Board's intention to provide the Executive with 
compensation opportunities that, in total, are at a level 
that is consistent with that provided by comparable 
companies to executives of similar levels of responsibility, 
expertise and corporate and individual performance as 
determined by the compensation committee of the Board.  In 
this regard, the Executive shall receive the following 
compensation for his services hereunder to the Company:

   (a)  Base Salary.  During the Employment Period, the 
Executive's annual base salary ("Annual Base Salary") shall 
be payable in accordance with The Company's general payroll 
practices.  During Period A, the Executive's Annual Base 
Salary shall in no event be less than $645,000.  During 
Period B and Period C, if The Executive is elected to the 
position of Chief Executive Officer, the Executive's Annual 
Base Salary shall in no event be less than the annual base 
salary of the Executive's predecessor as Chief Executive 
Officer of the Company.  Subject to Section 4(d)(ii), the 
Board in its discretion may from time to time direct such 
upward adjustments in the Executive's Annual Base Salary as 
the Board deems to be necessary or desirable, including, 
without limitation, adjustments in order to reflect in-
creases in the cost of living and the Executive's 
performance.  Any increase in Annual Base Salary shall not 
serve to limit or reduce any other obligation of the Company 
under this Agreement.
   (b)  Incentive Compensation.  Subject to Section 
4(d)(ii), during the Employment Period, the Executive shall 
participate in annual incentive compensation plans and long-
term incentive compensation plans of the Company and, to the 
extent appropriate,  the Company's subsidiaries  (which 
long-term incentive compensation plans may include plans 
offering stock options, restricted stock and other long-term 
incentive compensation and all such annual and long-term 
plans to be hereinafter referred to as the "Incentive 
Compensation Plans") and will be granted awards thereunder 
providing him with the opportunity to earn, on a year-by-
year basis, annual and long-term incentive compensation (the 
"Incentive Compensation Awards")at least equal (in terms of 
target, maximum and minimum awards expressed as a percentage 
of Annual Base Salary) to the greater of the Executive's 
opportunities that were in effect prior to the Effective 
Date and the awards granted to the Chief Executive Officer 
of the Company under the Incentive Compensation Plans during 
Period A.  Any equity awards granted to the Executive may be 
granted, at the Executive' selection, to trusts established 
for the benefit of members of the Executive's family. With 
respect to incentive compensation awards granted prior to 
the Effective Date, the Executive shall be entitled to 
retain such awards in accordance with their terms, which 
shall be appropriately adjusted as a result of the Merger. 

   (c)  Retirement and Welfare Benefit Plans.  In addition 
to the benefits provided under Section 3(b), during the 
Employment Period and so long as the Executive is employed 
by the Company, he shall be eligible to participate in all 
other savings, retirement and welfare plans, practices, 
policies and programs applicable generally to employees 
and/or senior executive officers of the Company and its 
domestic subsidiaries, except with respect to any benefits 
under any plan, practice, policy or program to which the 
Executive has waived his rights in writing.  To the extent 
that benefits payable or provided to the Executive under 
such plans are materially less favorable on a benefit by 
benefit basis than the benefits that would have been payable 
or provided to the Executive under comparable Enova tax-
qualified retirement plans, executive retirement plans, 
split dollar and other executive life insurance arrangements 
in which the Executive was a participant (based on the terms 
of such plans as of the Effective Date), the Executive shall 
be entitled to benefits pursuant to the terms of this 
Agreement equal to the excess of the benefits provided under 
the applicable Enova plans over the benefits provided under 
the comparable Company plans.

   (d)  Expenses.  The Company shall reimburse the Executive 
for all expenses, including those for travel and 
entertainment, properly incurred by him in the performance 
of his duties hereunder in accordance with policies 
established from time to time by the Board.
   (e)  Fringe Benefits and Perquisites.  During the 
Employment Period and so long as the Executive is employed 
by the Company, he shall be entitled to receive fringe 
benefits and perquisites in accordance with the plans, 
practices, pro-grams and policies of the Company and, to the 
extent appropriate, the Company's subsidiaries from time to 
time in effect, commensurate with his position.
4.  Termination of Employment.

   (a)  Death or Disability.  The Executive's employment 
shall terminate upon the Executive's death or, at the 
election of the Board or the Executive, by reason of 
Disability (as herein defined) during the Employment Period; 
provided, however, that the Board may not terminate the 
Executive's employment hereunder by reason of Disability 
unless at the time of such termination there is no 
reasonable expectation that the Executive will return to 
work within the next ninety (90) day period.  For purposes 
of this Agreement, disability ("Disability") shall have the 
same meaning as set forth in the Enova long-term disability 
plan or its successor.
   (b)  By the Company for Cause.  The Company may terminate 
the Executive's employment during the Employment Period for 
Cause (as herein defined). For purposes of this Agreement, 
"Cause" shall mean (i) the willful and continued failure by 
the Executive to substantially perform the Executive's 
duties with the Company (other than any such failure 
resulting from the Executive's incapacity due to physical or 
mental illness or any such actual or anticipated failure 
after the issuance of a Notice of Termination for Good 
Reason by the Executive pursuant to Section 4(d))or (ii) the 
Executive's commission of one or more acts of moral 
turpitude that constitute a violation of applicable law 
(including but not limited to a felony) which have or result 
in an adverse effect on the Company, monetarily or otherwise 
or one or more significant acts of dishonesty.  For purposes 
of clause (i) of this definition, no act, or failure to act, 
on the Executive's part shall be deemed "willful" unless 
done, or omitted to be done, by the Executive not in good 
faith and without reasonable belief that the Executive's 
act, or failure to act, was in the best interest of the 
Company.  
   (c)  By the Company without Cause.  Notwithstanding any 
other provision of this Agreement, the Company may terminate 
the Executive's employment other than by a termination for 
Cause during the Employment Period, but only upon the 
affirmative vote of three-fourths (3/4) of the membership of 
the Board.
   (d)  By the Executive for Good Reason.  The Executive may 
terminate his employment during the Employment Period for 
Good Reason (as herein defined). For purposes of this 
Agreement, "Good Reason" shall mean the occurrence without 
the written consent of the Executive of any one of the 
following acts by the Company, or failures by the Company to 
act, unless such act or failure to act is corrected prior to 
the Date of Termination (as hereinafter defined) specified 
in the Notice of Termination (as hereinafter defined) given 
in respect thereof:
 
(i)  an adverse change in the Executive's title, authority, 
duties, responsibilities or reporting lines as specified in 
Section 2(a) and 2(b)of this Agreement;  (ii)  a reduction 
by the Company in (A) the Executive's Annual Base Salary as 
in effect on the date hereof or as the same may be in-
creased from time to time or (B) the Executive's aggregate 
annualized compensation and benefits opportunities, except, 
in the case of both (A) and (B), for across-the-board 
reductions similarly affecting all executives (both of the 
Company and of any Person (as hereinafter defined) then in 
control of the Company) whose compensation is directly 
determined by the compensation committee of the Board (and 
the compensation committee of the board of directors of any 
Person then in control of the Company);  provided that, the 
exception for across-the-board reductions shall not apply 
following a Change in Control (as hereinafter defined);  
(iii)  the relocation of the Executive's principal place of 
employment to a location away from the Company's 
headquarters or a substantial increase in the Executive's 
business travel obligations outside of the Southern 
California area as of the Effective Date, other than any 
such increase that (A) arises in connection with 
extraordinary business activities of the Company and (B) is 
understood not to be part of the Executive's regular duties 
with the Company;  (iv)  the failure by the Company to pay 
to the Executive any portion of the Executive's current 
compensation and benefits or to pay to the Executive any 
portion of an installment of deferred compensation under any 
deferred compensation program of the Company within thirty 
(30) days of the date such compensation is due;  (v)  the 
failure by the shareholders to elect the Executive to the 
Board during the Employment Period;  (vi)  the failure by 
the Board to elect the Executive to the positions of Vice 
Chairman of the Board, President and Chief Executive Officer 
during Period B, or Chairman of the Board, President and 
Chief Executive Officer during Period C;  (vii)  any 
purported termination of the Executive's employment that is 
not effected pursuant to a Notice of Termination satisfying 
the requirements of Section 4(f); for purposes of this 
Agreement, no such purported termination shall be effective;  
(viii)  the failure by the Company to obtain a satisfactory 
agreement from any successor of the Company requiring such 
successor to assume and agree to perform the Company's 
obligations under this Agreement, as contemplated in Section 
11; or  (ix)  the failure by the Company to comply with any 
material provision of this Agreement.    Following a Change 
in Control (as hereinafter defined), the Executive's 
determination that an act or failure to act constitutes Good 
Reason shall be presumed to be valid unless such 
determination is deemed to be unreasonable by an arbitrator. 
The Executive's right to terminate the Executive's 
employment for Good Reason shall not be affected by the 
Executive's incapacity due to physical or mental illness.  
The Executive's continued employment shall not constitute 
consent to, or a waiver of rights with respect to, any act 
or failure to act constituting Good Reason hereunder.  

 (e)Change in Control.  Change in Control shall mean the 
occurrence of any of the following events:   (i)Any Person 
is or becomes the Beneficial Owner, directly or indirectly, 
of securities of the Company (not including in the 
securities beneficially owned by such Person any securities 
acquired directly from the Company or its affiliates other 
than in connection with the acquisition by the Company or 
its affiliates of a business) representing twenty percent 
(20%) or more of the combined voting power of the Company's 
then outstanding securities; or   (ii)  The following 
individuals cease for any reason to constitute a majority of 
the number of directors then serving: individuals who, on 
the date hereof, constitute the Board and any new director 
(other than a director whose initial assumption of office is 
in connection with an actual or threatened election contest, 
including but not limited to a consent solicitation, 
relating to the election of directors of the Company) whose 
appointment or election by the Board or nomination for 
election by the Company's shareholders was approved or 
recommended by a vote of at least two-thirds (2/3) of the 
directors then still in office who either were directors on 
the date hereof or whose appointment, election or nomination 
for election was previously so approved or recommended; or    
(iii)  There is consummated a merger or consolidation of the 
Company or any direct or indirect subsidiary of the Company 
with any other corporation, other than (A) a merger or 
consolidation which would result in the voting securities of 
the Company outstanding immediately prior to such merger or 
consolidation continuing to represent (either by remaining 
outstanding or by being converted into voting securities of 
the surviving entity or any parent thereof), in combination 
with the ownership of any trustee or other fiduciary holding 
securities under an employee benefit plan of the Company or 
any subsidiary of the Company, at least sixty percent (60%) 
of the combined voting power of the securities of the 
Company or such surviving entity or any parent thereof 
outstanding immediately after such merger or consolidation, 
or(B) a merger or consolidation effected to implement a 
recapitalization of the Company (or similar transaction) in 
which no Person is or becomes the beneficial owner, directly 
or indirectly, of securities of the Company (not including 
in the securities beneficially owned by such Person any 
securities acquired directly from the Company or its 
affiliates other than in connection with the acquisition by 
the Company or its affiliates of a business) representing 
twenty percent (20%) or more of the combined voting power of 
the Company's then outstanding securities; or    (iv)  The 
shareholders of the Company approve a plan of complete 
liquidation or dissolution of the Company or there is 
consummated an agreement for the sale or disposition by the 
Company of all or substantially all of the Company's assets, 
other than a sale or disposition by the Company of all or 
substantially all of the Company's assets to an entity, at 
least sixty percent (60%) of the combined voting power of 
the voting securities of which are owned by shareholders of 
the Company in substantially the same proportions as their 
ownership of the Company immediately prior to such sale.   
"Person" shall have the meaning given in section 3(a)(9) of 
the Securities Exchange Act of 1934 (the "Exchange Act"), as 
modified and used in sections 13(d) and 14(d) thereof, 
except that such term shall not include (i) the Company or 
any of its subsidiaries, (ii) a trustee or other fiduciary 
holding securities under an employee benefit plan of the 
Company or any of its affiliates, (iii) an underwriter 
temporarily holding securities pursuant to an offering of 
such securities,(iv) a corporation owned, directly or 
indirectly, by the shareholders of the Company in 
substantially the same proportions as their ownership of 
stock of the Company, or(v) a person or group as used in 
Rule 13d-1(b) under the Exchange Act.   "Beneficial Owner" 
shall have the meaning set forth in Rule 13d-3
under the Exchange Act.

   Notwithstanding the foregoing, any event or transaction 
which would otherwise constitute a Change in Control (a 
"Transaction") shall not constitute a Change in Control for 
purposes of this Agreement if, in connection with the 
Transaction, the Executive participates as an equity 
investor in the acquiring entity or any of its affiliates 
(the "Acquiror").  For purposes of the preceding sentence, 
the Executive shall not be deemed to have participated as an 
equity investor in the Acquiror by virtue of (i) obtaining 
beneficial ownership of any equity interest in the Acquiror 
as a result of the grant to the Executive of an incentive 
compensation award under one or more incentive plans of the 
Acquiror (including, but not limited to, the conversion in 
connection with the Transaction of incentive compensation 
awards of the Company into incentive compensation awards of 
the Acquiror), on terms and conditions substantially 
equivalent to those applicable to other executives of the 
Company immediately prior to the Transaction, after taking 
into account normal differences attributable to job 
responsibilities, title and the like, (ii) obtaining 
beneficial ownership of any equity interest in the Acquiror 
on terms and conditions substantially equivalent to those 
obtained in the Transaction by all other shareholders of the 
Company, or (iii) obtaining beneficial ownership of any 
equity interest in the Acquiror in a manner unrelated to a 
Transaction.

   (f)  Notice of Termination.  During the Employment 
Period, any purported termination of the Executive's 
employment (other than by reason of death)shall be 
communicated by written Notice of Termination from one party 
hereto to the other party hereto in accordance with Section 
12(b).  For purposes of this Agreement, a "Notice of 
Termination" shall mean a notice that shall indicate the 
specific termination provision in this Agreement relied 
upon, if any, and shall set forth in reasonable detail the 
facts and circumstances claimed to provide a basis for 
termination of the Executive's employment under the 
provision so indicated.  Further, a Notice of Termination 
for Cause is required to include a copy of a resolution duly 
adopted by the affirmative vote of not less than three-
fourths (3/4) of the entire membership of the Board at a 
meeting of the Board that was called and held no more than 
ninety (90)days after the date the Board had knowledge of 
the most recent act or omission giving rise to such breach 
for the purpose of considering such termination (after 
reasonable notice to the Executive and an opportunity for 
the Executive, together with the Executive's counsel, to be 
heard before the Board and, if possible, to cure the breach 
that was the basis for the Notice of Termination for Cause) 
finding that, in the good faith opinion of the Board, the 
Executive was guilty of conduct set forth in clause (i)or 
(ii) of the definition of Cause herein, and specifying the 
particulars thereof in detail.  Unless the Board determines 
otherwise, a Notice of Termination by the Executive alleging 
a termination for Good Reason must be made within 180 days 
of the act or failure to act that the Executive alleges to 
constitute Good Reason.   

(g)  Date of Termination.  "Date of Termination," with 
respect to any purported termination of the Executive's 
employment during the Employment Period, shall mean the date 
specified in the Notice of Termination (which, in the case 
of a termination by the Company, for reasons other than 
Cause, shall not be less than thirty (30) days and, in the 
case of a termination by the Executive, shall not be less 
than fifteen (15) days nor more than sixty (60) days), from 
the date such Notice of Termination is given).

5.  Obligations of the Company Upon Termination.

   (a)  Termination Other Than for Cause, Death or 
Disability.  During the Employment Period, if the Company 
shall terminate the Executive's employment(other than for 
Cause, death or Disability) or the Executive shall terminate 
his employment for Good Reason (termination in any such case 
being referred to as "Termination") the Company shall pay to 
the Executive the amounts, and provide the Executive with 
the benefits, described in this Section 5 (hereinafter 
referred to as the "Severance Payments").  Subject to 
Section 5(g), the amounts specified in this Section 5(a) 
shall be paid within thirty (30) days after the Date of 
Termination.

   (i)  Lump Sum Payment.  In lieu of any further payments 
of Annual Base Salary or annual Incentive Compensation 
Awards to the Executive for periods subsequent to the Date 
of Termination, the Company shall pay to the Executive a 
lump sum amount in cash equal to the product of (X) the sum 
of (A) the Executive's Annual Base Salary and (B) the 
greater of the Executive's target bonus for the year of 
termination or the average of the three(3) years' highest 
gross bonus awards, not necessarily consecutive, paid by the 
Company (or its predecessor) to the Executive in the five 
(5) years preceding the year of termination and (Y) the 
number of years remaining in the Employment Period 
(including fractional years), but in no event less than two 
(2);provided, however, that in the event of a Termination 
following a Change in Control such multiplier shall not be 
less than three (3). 

   (ii)  Accrued Obligations.  The Company shall pay the 
Executive a lump sum amount in cash equal to the sum of (A) 
the Executive's Annual Base Salary through the Date of 
Termination to the extent not thereto-fore paid, (B) an 
amount equal to any annual Incentive Compensation Awards 
earned with respect to fiscal years ended prior to the year 
that includes the Date of Termination to the extent not 
theretofore paid and (C) an amount equal to the target 
amount payable under any annual Incentive Compensation 
Awards for the fiscal year that includes the Date of 
Termination or, if greater, the average of the three (3) 
years' highest gross bonus awards, not necessarily 
consecutive, paid by the Company (or its predecessor) to the 
Executive in the five (5) years preceding the year of 
Termination multiplied by a fraction the numerator of which 
shall be the number of days from the beginning of such 
fiscal year to and including the Date of Termination and the 
denominator of which shall be 365, in each case to the 
extent not theretofore paid.  (The amounts specified in 
clauses (A), (B) and (C) shall be hereinafter referred to as 
the "Accrued Obligations.")

   (iii)  Deferred Compensation.  In the event of a 
Termination following a Change in Control, the Company shall 
pay the Executive a lump sum payment in an amount equal to 
any compensation previously deferred by the Executive 
(together with any accrued interest or earnings thereon).

   (iv)  Pension Supplement.  The Company shall provide the 
Executive with such additional years of age and service 
credit for purposes of the calculation of retirement 
benefits under the Enova Supplemental Executive Retirement 
Plan (the "Enova SERP") as if he had remained employed for 
the remainder of the Employment Period, but in no event less 
than two (2) years, provided, however, that there shall be 
no reduction under the Enova SERP for early retirement as 
set forth in paragraph 4.a.ii of the Enova SERP, except for 
the early retirement reduction factor determined in 
accordance with the table in Section 5.4 of the San Diego 
Gas & Electric Company Pension Plan, as adopted by Enova 
(the "Pension Plan"); and provided, further, however, that 
in the event of a Termination following a Change in Control, 
the Company shall pay the Executive a lump sum payment in an 
amount equal to the benefits under the Enova SERP as 
described in paragraph 2.c of the Enova SERP, less the value 
calculated consistently with paragraph 4.b of the SERP of 
the Executive's entitlement under the Pension Plan, such 
payment to be calculated and paid without regard to the 
limitation described in the Enova SERP relating to Section 
280G of the Code and with such additional years of age and 
service credit as if he had remained employed for the 
remainder of the Employment Period, but in no event less 
than two (2) years; and in either case The Executive's 
termination shall be a "Qualifying Termination" as defined 
in the Split Dollar Life Insurance Agreement entered into 
between the Executive and Enova, and where necessary the 
Company shall take such steps, including the payment of 
additional premiums, as may be necessary so that the cash 
value of the policy as of the Date of Termination shall 
reflect the additional age and service credit.

   (v)  Accelerated Vesting and Payment of Long-Term 
Incentive Awards.  All equity-based long-term Incentive 
Compensation Awards held by the Executive under any long- 
term Incentive Compensation Plan maintained by the Company 
or any affiliate shall immediately vest and become 
exercisable as of the Date of Termination, to be exercised 
in accordance with the terms of the applicable plan and 
award agreement; provided, however, that any such awards 
granted on or after the Effective Date shall remain 
outstanding and exercisable until the earlier of (A) 
eighteen (18) months following the Date of Termination or 
(B) the expiration of the original term of such award (it 
being understood that all awards granted prior to the 
Effective Date shall remain outstanding and exercisable for 
a period that is no less than that provided for in the 
applicable agreement in effect as of the date of grant), and 
the Company shall pay to the Executive, with respect to all 
cash-based, long-term Incentive Compensation Awards made to 
the Executive that are outstanding under any long-term 
Incentive Compensation Plan maintained by the Company or any 
affiliate an amount equal to the target amount payable under 
such long-term Incentive Compensation Awards multiplied by a 
fraction, the numerator of which shall be the number of days 
from the beginning of the award cycle to and including the 
Date of Termination, and the denominator of which shall be 
the number of days in the cycle as originally granted.   

(vi)  Continuation of Welfare Benefits.  For (A) the 
remainder of the Employment Period, but in no event less 
than a period of two (2) years or (B) until the Executive is 
eligible for retiree medical benefits, whichever is longer, 
immediately following the Date of Termination, the Company 
shall arrange to provide the Executive and his dependents 
with life, disability, accident and health insurance 
benefits substantially similar to those provided to the 
Executive and his dependents immediately prior to the Date 
of Termination, provided, however, that if the Executive 
becomes employed with another employer and is eligible to 
receive life, disability, accident and health insurance 
benefits under another employer-provided plan, the benefits 
under the Company's plans shall be secondary to those 
provided under such other plan during such applicable period 
of eligibility, and further provided, however, that in the 
event of a termination following a Change in Control such 
period shall not be less than the number of years until the 
Executive reaches normal retirement age as defined under the 
Enova tax-qualified plans.
   (b)  Termination by the Company for Cause or by the 
Executive Other than for Good Reason.  Subject to the 
provisions of Section 6 of this Agreement, if the 
Executive's employment shall be terminated for Cause during 
the Employment Period, or if the Executive terminates 
employment during the Employment Period other than for Good 
Reason, the Company shall have no further obligations to The 
Executive under this Agreement other than the Accrued 
Obligations. 

   (c)  Termination due to Death or Disability.  If the 
Executive's employment shall terminate by reason of death or 
Disability, the Company shall pay the Executive or his 
estate, as the case may be, the Accrued Obligations and, 
solely in the case of termination by reason of Disability, 
the Pension Supplement.  Such payments shall be in addition 
to those rights and benefits to which the Executive or his 
estate may be entitled under the relevant Company plans or 
programs.
   (d)  Code Section 280G.

   (i)  Notwithstanding any other provisions of this 
Agreement, in the event that any payment or benefit received 
or to be received by the Executive (whether pursuant to the 
terms of this Agreement or any other plan, arrangement or 
agreement with (A) the Company, (B) any Person (as defined 
in Section 4(e)) whose actions result in a Change in Control 
or (C) any Person affiliated with the Company or such 
Person) (all such payments and benefits, including the 
Severance Payments, being hereinafter called "Total 
Payments")would not be deductible (in whole or part) by the 
Company, an affiliate or Person making such payment or 
providing such benefit as a result of section 280G of the 
Code, then, to the extent necessary to make such portion of 
the Total Payments deductible (and after taking into account 
any reduction in the Total Payments provided by reason of 
section 280G of the Code in such other plan, arrangement or 
agreement), the cash Severance Payments shall first be 
reduced (if necessary, to zero), and all other Severance 
Payments shall thereafter be reduced (if necessary, to 
zero); provided, however, that the Executive may elect to 
have the noncash Severance Payments reduced (or eliminated) 
prior to any reduction of the cash Severance Payments.

   (ii)  For purposes of this limitation, (A) no portion of 
the Total Payments the receipt or enjoyment of which the 
Executive shall have waived at such time and in such manner 
as not to constitute a "payment" within the meaning of 
section 280G(b) of the Code shall be taken into account, (B) 
no portion of the Total Payments shall be taken into account 
which, in the opinion of tax counsel ("Tax Counsel") 
reasonably acceptable to the Executive and selected by the 
Company's accounting firm which (or, in the case of a 
payment following a Change in Control the accounting firm 
that was, immediately prior to the Change in Control, the 
Company's independent auditor) (the "Auditor"),does not 
constitute a "parachute payment" within the meaning of 
section 280G(b)(2) of the Code, including by reason of 
section 280G(b)(4)(A) of the Code, (C) the Severance 
Payments shall be reduced only to the extent necessary so 
that the Total Payments (other than those referred to in 
clause (A) or(B)) in their entirety constitute reasonable 
compensation for services actually rendered within the 
meaning of section 280G(b)(4)(B) of the Code or are 
otherwise not subject to disallowance as deductions by 
reason of section 280G of the Code, in the opinion of Tax 
Counsel, and (D) the value of any noncash benefit or any 
deferred payment or benefit included in the Total Payments 
shall be determined by the Auditor in accordance with the 
principles of sections 280G(d)(3) and (4) of the Code.
   (e)  Consulting and Non-Competition.   If the Total 
Payments are subject to reduction in accordance with the 
above provisions of Section 5(d), the Executive shall have 
the option, to be exercised within ten (10) days after 
receipt of notice of such reduction from the Company, to 
enter into a consulting and non-competition agreement with 
the Company (the "Consulting and Non-Competition 
Agreement"), which shall (1) provide the Executive with 
payments and benefits, payable over the term of the 
agreement, the present value of which in the aggregate is 
equal to or greater than the present value (determined by 
applying a discount rate equal to the interest rate provided 
in section 1274(b)(2)(B) of the Code) of the balance of the 
payments and benefits otherwise payable to the Executive 
without regard to the provisions of Section 5(d), (2) 
require the Executive to make his services available to the 
Company for no more than twenty (20) hours per month and (3) 
last for a period of not more than two (2) years (unless the 
Executive consents to a longer period).
   (f)  Gross-Up Payment.  In the event that the Executive 
receives a notice from the Internal Revenue Service to the 
effect that the amounts payable under the Consulting and 
Non-Competition Agreement would be subject (in whole or 
part)to the tax (the "Excise Tax") imposed under section 
4999 of the Code, within thirty(30) days after the date the 
Chairman of the Board receives a copy of such notice the 
Company shall pay to the Executive such additional amounts 
(the "Gross-Up Payment") such that the net amount retained 
by the Executive, after deduction of any Excise Tax on the 
Total Payments and any federal, state and local income and 
employment taxes and Excise Tax upon the Gross-Up Payment, 
shall be equal to the Total Payments.  For purposes of 
determining the amount of the Gross-Up Payment, the 
Executive shall be deemed to pay federal income tax at the 
highest marginal rate of federal income taxation in the 
calendar year in which the Gross-Up Payment is to be made 
and state and local income taxes at the highest marginal 
rate of taxation in the state and locality of the 
Executive's residence on the date on which the Gross-Up 
Payment is calculated for purposes of this section, net of 
the maximum reduction in federal income taxes which could be 
obtained from deduction of such state and local taxes.  In 
the event that the Excise Tax is subsequently determined to 
be less than the amount taken into account hereunder, the 
Executive shall repay to the Company, at the time that the 
amount of such reduction in Excise Tax is finally 
determined, the portion of the Gross-Up Payment attributable 
to such reduction (plus that portion of the Gross-Up Payment 
attributable to the Excise Tax and federal, state and local 
income tax imposed on the Gross-Up Payment being repaid by 
the Executive to the extent that such repayment results in a 
reduction in Excise Tax and/or a federal, state or local 
income tax deduction) plus interest on the amount of such 
repayment at the rate provided in section 1274(b)(2)(B) of 
the Code.  In the event that the Excise Taxis determined to 
exceed the amount taken into account hereunder (including by 
reason of any payment the existence or amount of which 
cannot be determined at the time of the Gross-Up Payment), 
the Company shall make an additional Gross-Up Payment in 
respect of such excess (plus any interest, penalties or 
additions payable by the Executive with respect to such 
excess) at the time that the amount of such excess is 
finally determined.  The Executive and the Company shall 
each reasonably cooperate with the other in connection with 
any administrative or judicial proceedings concerning the 
existence or amount of liability for Excise Tax with respect 
to the Total Payments. 
   (g)  Release.  Notwithstanding anything herein to the 
contrary, the Company's obligation to make the payments 
provided for in this Section 5 is expressly made subject to 
and conditioned upon (i) the Executive's prior execution of 
a release substantially in the form attached hereto as 
Exhibit A within forty-five (45)days after the applicable 
Date of Termination and (ii) the Executive's non-revocation 
of such release in accordance with the terms thereof.

6.  Nonexclusivity of Rights.  
   Nothing in this Agreement shall prevent or limit the 
Executive's continuing or future participation in any 
benefit, plan, program, policy or practice provided by the 
Company and for which the Executive may qualify (except with 
respect to any benefit to which the Executive has waived his 
rights in writing), nor shall anything herein limit or 
otherwise affect such rights as the Executive may have under 
any other contract or agreement entered into after the 
Effective Date with the Company.  Amounts which are vested 
benefits or which the Executive is otherwise entitled to 
receive under any benefit, plan, policy, practice or program 
of, or any contract or agreement entered into with, the 
Company shall be payable in accordance with such benefit, 
plan, policy, practice or program or contract or agreement 
except as explicitly modified by this Agreement.

7.  Full Settlement; Mitigation.

   The Company's obligation to make the payments provided 
for in this Agreement and otherwise to perform its 
obligations hereunder shall not be affected by any set-off, 
counterclaim, recoupment, defense or other claim, right or 
action which the Company may have against the Executive or 
others, provided that nothing herein shall preclude the 
Company from separately pursuing recovery from the Executive 
based on any such claim.  In no event shall the Executive be 
obligated to seek other employment or take any other action 
by way of mitigation of the amounts (including amounts for 
damages for breach) payable to the Executive under any of 
the provisions of this Agreement and such amounts shall not 
be reduced whether or not the Executive obtains other 
employment.  

8.  Arbitration.  

   Any dispute about the validity, interpretation, effect or 
alleged violation of this Agreement (an "arbitrable 
dispute") must be submitted to confidential arbitration in 
San Diego, California.  Arbitration shall take place before 
an experienced employment arbitrator licensed to practice 
law in such state and selected in accordance with the Model 
Employment Arbitration Procedures of the American 
Arbitration Association.  Arbitration shall be the exclusive 
remedy of any arbitrable dispute. Should any party to this 
Agreement pursue any arbitrable dispute by any method other 
than arbitration, the other party shall be entitled to 
recover from the party initiating the use of such method all 
damages, costs, expenses and attorneys' fees incurred as a 
result of the use of such method.  Notwithstanding anything 
herein to the contrary, nothing in this Agreement shall 
purport to waive or in any way limit the right of any party 
to seek to enforce any judgment or decision on an arbitrable 
dispute in a court of competent jurisdiction.

9.  Confidentiality.  

   The Executive acknowledges that in the course of his 
employment with the Company, he has acquired non-public 
privileged or confidential information and trade secrets 
concerning the operations, future plans and methods of doing 
business("Proprietary Information") of the Company, its 
subsidiaries and affiliates; and the Executive agrees that 
it would be extremely damaging to the Company, its 
subsidiaries and affiliates if such Proprietary Information 
were disclosed to a competitor of the Company, its 
subsidiaries and affiliates or to any other person or 
corporation.  The Executive understands and agrees that all 
Proprietary Information has been divulged to the Executive 
in confidence and further understands and agrees to keep all 
Proprietary Information secret and confidential (except for 
such information which is or becomes publicly available 
other than as a result of a breach by the Executive of this 
provision) without limitation in time.  In view of the 
nature of the Executive's employment and the Proprietary 
Information the Executive has acquired during the course of 
such employment, the Executive likewise agrees that the 
Company, its subsidiaries and affiliates would be 
irreparably harmed by any disclosure of Proprietary 
Information in violation of the terms of this paragraph and 
that the Company, its subsidiaries and affiliates shall 
therefore be entitled to preliminary and/or permanent 
injunctive relief prohibiting the Executive from engaging in 
any activity or threatened activity in violation of the 
terms of this paragraph and to any other relief available to 
them.  Inquiries regarding whether specific information 
constitutes Proprietary Information shall be directed to the 
Board provided, that the Company shall not unreasonably 
classify information as Proprietary Information.

10.  Non-Solicitation of Employees.  

   The Executive recognizes that he possesses and will 
possess confidential information about other employees of 
the Company, its subsidiaries and affiliates relating to 
their education, experience, skills, abilities, compensation 
and benefits, and inter-personal relationships with 
customers of the Company, its subsidiaries and affiliates.  
The Executive recognizes that the information he possesses 
and will possess about these other employees is not 
generally known, is of substantial value tothe Company, its 
subsidiaries and affiliates in developing their business and 
in securing and retaining customers, and has been and will 
be acquired by him because of his business position with the 
Company, its subsidiaries and affiliates.  The Executive 
agrees that, during the Employment Period and for a period 
of one (1) year thereafter, he will not, directly or 
indirectly, solicit or recruit any employee of the Company, 
its subsidiaries or affiliates for the purpose of being 
employed by him or by any competitor of the Company, its 
subsidiaries or affiliates on whose behalf he is acting as 
an agent, representative or employee and that he will not 
convey any such confidential information or trade secrets 
about other employees of the Company, its subsidiaries and 
affiliates to any other person; provided, however, that it 
shall not constitute a solicitation or recruitment of 
employment in violation of this paragraph to discuss 
employment opportunities with any employee of the Company, 
its subsidiaries or affiliates who has either first 
contacted the Executive or regarding whose employment the 
Executive has discussed with and received the written 
approval of the Chairman of the Board prior to making such 
solicitation or recruitment.  In view of the nature of the 
Executive's employment with the Company, the Executive 
likewise agrees that the Company, its subsidiaries and 
affiliates would be irreparably harmed by any solicitation 
or recruitment in violation of the terms of this paragraph 
and that the Company, its subsidiaries and affiliates shall 
therefore be entitled to preliminary and/or permanent 
injunctive relief prohibiting the Executive from engaging in 
any activity or threatened activity in violation of the 
terms of this paragraph and to any other relief available to 
them.
11. Legal Fees.

   The Company shall pay to the Executive all legal fees and 
expenses(including but not limited to fees and expenses in 
connection with any arbitration)incurred by the Executive in 
disputing in good faith any issue arising under this 
Agreement relating to the termination of the Executive's 
employment or in seeking in good faith to obtain or enforce 
any benefit or right provided by this Agreement, but in each 
case only to the extent the arbitrator or court determines 
that the Executive had a reasonable basis for such claim. 
12.  Successors.

   (a)  Assignment by Executive.  This Agreement is personal 
to the Executive and without the prior written consent of 
the Company shall not be assign-able by the Executive 
otherwise than by will or the laws of descent and 
distribution. This Agreement shall inure to the benefit of 
and be enforceable by the Executive's legal representatives.
   (b)  Successors and Assigns of Company.  This Agreement 
shall inure to the benefit of and be binding upon the 
Company, its successors and assigns.

   (c)  Assumption.  The Company shall require any successor 
(whether direct or indirect, by purchase, merger, 
consolidation or otherwise) to all or substantially all of 
the business and/or assets of the Company to assume 
expressly and agree to perform this Agreement in the same 
manner and to the same extent that the Company would be 
required to perform it if no such succession had taken 
place.  As used in this Agreement, "Company" shall mean the 
Company as hereinbefore defined and any successor to its 
businesses and/or assets as aforesaid that assumes and 
agrees to perform this Agreement by operation of law or 
otherwise.

13.  Miscellaneous.

   (a)  Governing Law.  This Agreement shall be governed by 
and construed in accordance with the laws of the State of 
California, without reference to its principles of conflict 
of laws.  The captions of this Agreement are not part of the 
provisions hereof and shall have no force or effect.  This 
Agreement may not be amended, modified, repealed, waived, 
extended or discharged except by an agreement in writing 
signed by the party against whom enforcement of such 
amendment, modification, repeal, waiver, extension or 
discharge is sought.  No person, other than pursuant to a 
resolution of the Board or a committee thereof, shall have 
authority on behalf of the Company to agree to amend, 
modify, repeal, waive, extend or discharge any provision of 
this Agreement or anything in reference thereto.

   (b)  Notices.  All notices and other communications 
hereunder shall be in writing and shall be given by hand 
delivery to the other party or by registered or certified 
mail, return receipt requested, postage prepaid, addressed, 
in either case, tothe Company's headquarters or to such 
other address as either party shall have furnished to the 
other in writing in accordance herewith.  Notices and 
communications shall be effective when actually received by 
the addressee.   (c)  Severability.  The invalidity or 
unenforceability of any provision of this Agreement shall 
not affect the validity or enforceability of any other 
provision of this Agreement.

   (d)  Taxes.  The Company may withhold from any amounts 
payable under this Agreement such federal, state or local 
taxes as shall be required to be withheld pursuant to any 
applicable law or regulation.

   (e)  No Waiver.  The Executive's or the Company's failure 
to insist upon strict compliance with any provision hereof 
or any other provision of this Agreement or the failure to 
assert any right the Executive or the Company may have 
hereunder, including, without limitation, the right of the 
Executive to terminate employment for Good Reason pursuant 
to Section 4 of this Agreement, or the right of the Company 
to terminate the Executive's employment for Cause pursuant 
to Section 4 of this Agreement, shall not be deemed to be a 
waiver of such provision or right or any other provision or 
right of this Agreement.

   (f)  Entire Agreement.  This instrument contains the 
entire agreement of the Executive, the Company or any 
predecessor or subsidiary thereof with respect to the 
subject matter hereof, and all promises, representations, 
understandings, arrangements and prior agreements are merged 
herein and superseded hereby including, but not limited to, 
that certain employment agreement dated September 18, 1996 
between the Executive and Enova.  Notwithstanding the 
foregoing, the provisions of any employee benefit or 
compensation plan, program or arrangement applicable to the 
Executive, including that certain Incentive Bonus Agreement, 
entered into between the Executive and Enova, shall remain 
in effect, except as expressly otherwise provided herein.   

IN WITNESS WHEREOF, the Executive and, pursuant to due 
authorization from its Board of Directors, the Company have 
caused this Agreement to be executed as of the day and year 
first above written.

MINERAL ENERGY COMPANY


__________________________
Kevin C. Sagara
President



__________________________
Stephen L. Baum

EXHIBIT A

GENERAL RELEASE


This GENERAL RELEASE (the "Agreement"), dated _______, is 
made by and between ___________________, a California 
corporation (the "Company") and _____________ ("you" or 
"your").

   WHEREAS, you and the Company have previously entered into 
that certain Employment Agreement dated _____________, 1996 
(the "Employment Agreement"); and

   WHEREAS, Section 5 of the Employment Agreement provides 
for the payment of severance benefits in the event of the 
termination of your employment under certain circumstances, 
subject to and conditioned upon your execution and non-
revocation of a general release of claims by you against the 
Company and its subsidiaries and affiliates.

   NOW, THEREFORE, in consideration of the premises and the 
mutual covenants herein contained, you and the Company 
hereby agree as follows:

   ONE:  Your signing of this Agreement confirms that your 
employment with the Company shall terminate at the close of 
business on ___________,or earlier upon our mutual 
agreement.

   TWO:  As a material inducement for the payment of 
benefits under Section 5 of that certain Employment 
Agreement between you and the Company, and except as 
otherwise provided in this Agreement, you and the Company 
hereby irrevocably and unconditionally release, acquit and 
forever discharge the other from any and all Claims either 
may have against the other.  For purposes of his Agreement 
and the preceding sentence, the words "Releasee" or 
"Releasees"
and "Claim" or "Claims," shall have the meanings set forth 
below:

   (a)The words "Releasee" or "Releasees" shall refer to the 
you and to the Company and each of the Company's owners, 
stockholders, predecessors, successors, assigns, agents, 
directors, officers, employees, representatives, attorneys, 
advisors, parent companies, divisions, subsidiaries, 
affiliates(and agents, directors, officers, employees, 
representatives, attorneys and advisors of such parent 
companies, divisions, subsidiaries and affiliates), and all 
persons acting by, through, under or in concert with any of 
them.

   (b)The words "Claim" or "Claims" shall refer to any 
charges, complaints, claims, liabilities, obligations, 
promises, agreements, controversies, damages, actions, 
causes of action, suits, rights, demands, costs, losses, 
debts and expenses (including attorneys' fees and costs 
actually incurred)of any nature whatsoever, known or 
unknown, suspected or unsuspected, which you or the Company 
now, in the past or, except as limited by law or regulation 
such as the Age Discrimination in Employment Act (ADEA), in 
the future may have, own or hold against any of the 
Releasees; provided, however, that the word "Claim" or 
"Claims" shall not refer to any charges, complaints, claims, 
liabilities, obligations, promises, agreements, 
controversies, damages, actions, causes of action, suits, 
rights, demands, costs, losses, debts and expenses 
(including attorneys' fees and costs actually incurred) 
arising under [identify severance, employee benefits, stock 
option and other agreements containing duties, rights 
obligations etc. of either party that are to remain 
operative].  Claims released pursuant to this Agreement by 
you and the Company include, but are not limited to, rights 
arising out of alleged violations of any contracts, express 
or implied, any tort, any claim that you failed to perform 
or negligently performed or breached your duties during 
employment at the Company, any legal restrictions on the 
Company's right to terminate employees or any federal, state 
or other governmental statute, regulation, or ordinance, 
including, without limitation: (1) Title VII of the Civil 
Rights Act of l964 (race, color, religion, sex and national 
origin discrimination); (2) 42 U.S.C Sec 1981 
(discrimination); (3) 29 U.S.C. Sec 621-634(age 
discrimination); (4) 29 U.S.C. Sec 206(d)(l) (equal pay); 
(5) 42 U.S.C. Sec 12101, et seq. (disability); (6) the 
California Constitution, Article I, Section 
8(discrimination); (7) the California Fair Employment and 
Housing Act (discrimination, including race, color, national 
origin, ancestry, physical handicap, medical condition, 
marital status, religion, sex or age); (8) California Labor 
Code Section 1102.1 (sexual orientation discrimination); (9) 
Executive Order 11246(race, color, religion, sex and 
national origin discrimination); (10) Executive Order 11141 
(age discrimination); (11) Sec 503 and 504 of the 
Rehabilitation Act of 1973 (handicap discrimination); (12) 
The Worker Adjustment and Retraining Act (WARN Act); (13) 
the California Labor Code (wages, hours, working conditions, 
benefits and other matters); (14) the Fair Labor Standards 
Act (wages, hours, working conditions and other matters); 
the Federal Employee Polygraph Protection Act (prohibits 
employer from requiring employee to take polygraph test as 
condition of employment); and (15) any federal, state or 
other governmental statute, regulation or ordinance which is 
similar to any of the statutes de-scribed in clauses (1) 
through (14).

   THREE:  You and the Company expressly waive and 
relinquish all rights and benefits afforded by any statute 
(including but not limited to Section 1542 of the Civil Code 
of the State of California) which limits the effect of are 
lease with respect to unknown claims.  You and the Company 
do so under-standing and acknowledging the significance of 
the release of unknown claims and the waiver of statutory 
protection against a release of unknown claims(including but 
not limited to Section 1542).  Section 1542 of the Civil 
Code of the State of California states as follows:

 "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE 
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT 
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM 
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE 
DEBTOR."

Thus, notwithstanding the provisions of Section 1542 or of 
any similar statute, and for the purpose of implementing a 
full and complete release and discharge of the Releasees, 
you and the Company expressly acknowledge that this 
Agreement is intended to include in its effect, without 
limitation, all Claims which are known and all Claims which 
you or the Company do not know or suspect to exist in your 
or the Company's favor at the time of execution of this 
Agreement and that this Agreement contemplates the 
extinguishment of all such Claims.

   FOUR:  The parties acknowledge that they might hereafter 
discover facts different from, or in addition to, those they 
now know or believe to be rue with respect to a Claim or 
Claims released herein, and they expressly agree to assume 
the risk of possible discovery of additional or different 
facts, and agree that this Agreement shall be and remain 
effective, in all respects, regardless of such additional or 
different discovered facts.

   FIVE:  You hereby represent and acknowledge that you have 
not filed any Claim of any kind against the Company or 
others released in this Agreement.  You further hereby 
expressly agree never to initiate against the Company or 
others released in this Agreement any administrative 
proceeding, lawsuit or any other legal or equitable 
proceeding of any kind asserting any Claims that are 
released in this Agreement.  

   The Company hereby represents and acknowledges that it 
has not filed any Claim of any kind against you or others 
released in this Agreement. The Company further hereby 
expressly agrees never to initiate against you or others 
released in this Agreement any administrative proceeding, 
lawsuit or any other legal or equitable proceeding of any 
kind asserting any Claims that are released in this 
Agreement.  

   SIX:  You hereby represent and agree that you have not 
assigned or transferred, or attempted to have assigned or 
transfer, to any person or entity, any of the Claims that 
you are releasing in this Agreement.

   The Company hereby represents and agrees that it has not 
assigned or transferred, or attempted to have assigned or 
transfer, to any person or entity, any of the Claims that it 
is releasing in this Agreement.

   SEVEN:  As a further material inducement to the Company 
to enter into this Agreement, you hereby agree to indemnify 
and hold each of the Releasees harmless from all loss, 
costs, damages, or expenses, including without limitation, 
attorneys' fees incurred by Releasees, arising out of any 
breach of this Agreement by you or the fact that any 
representation made in this Agreement by you was false when 
made.  

   EIGHT:  You and the Company represent and acknowledge 
that, in executing this Agreement, neither is relying upon 
any representation or statement not set forth in this 
Agreement or the Severance Agreement.

   NINE:   (a)This Agreement shall not in any way be 
construed as an admission by the Company that it has acted 
wrongfully with respect to you or any other person, or that 
you have any rights whatsoever against the Company, and the 
Company specifically disclaims any liability to or wrongful 
acts against you or any other person, on the part of itself, 
its employees or its agents.  This Agreement shall not in 
any way be construed as an admission by you that you have 
acted wrongfully with respect to the Company, or that you 
failed to perform your duties or negligently performed or 
breached your duties, or that the Company had good cause to 
terminate your employment.   (b)If you are a party or are 
threatened to be made a party to any proceeding by reason of 
the fact that you were an officer [or director] of the 
Company, the Company shall indemnify you against any 
expenses(including reasonable attorney fees provided that 
counsel has been approved by the Company prior to 
retention), judgments, fines, settlements, and other amounts 
actually or reasonably incurred by you in connection with 
that proceeding, provided that you acted in good faith and 
in a manner you reasonably believed to be in the best 
interest of the Company.  The limitations of California 
Corporations Code Section 317 shall apply to this assurance 
of indemnification.    (c) You agree to cooperate with the 
Company and its designated attorneys, representatives and 
agents in connection with any actual or threatened judicial, 
administrative or other legal or equitable proceeding in 
which the Company is or may be become involved.  Upon 
reasonable notice, you agree to meet with and provide to the 
Company or its designated attorneys, representatives or 
agents all information and knowledge you have relating to 
the subject matter of any such proceeding.

   TEN:  This Agreement is made and entered into in 
California. This Agreement shall in all respects be 
interpreted, enforced and governed by and under the laws of 
the State of California.  Any dispute about the validity, 
interpretation, effect or alleged violation of this 
Agreement (an "arbitrable dispute") must be submitted to 
arbitration in [Los Angeles][San Diego], California.  
Arbitration shall take place before an experienced 
employment arbitrator licensed to practice law in such state 
and selected in accordance with the Model Employment 
Arbitration Procedures of the American Arbitration 
Association. Arbitration shall be the exclusive remedy for 
any arbitrable dispute.  The arbitrator in any arbitrable 
dispute shall not have authority to modify or change the 
Agreement in any respect.  You and the Company shall each be 
responsible for payment of one-half the amount of the 
arbitrator's fee(s).  Should any party to this Agreement 
institute any legal action or administrative proceeding 
against the other with respect to any Claim waived by this 
Agreement or pursue any arbitrable dispute by any method 
other than arbitration, the prevailing party shall be 
entitled to recover from the initiating party all damages, 
costs, expenses and attorneys' fees incurred as a result of 
that action. The arbitrator's decision and/or award will be 
fully enforceable and subject to an entry of judgment by the 
Superior Court of the State of California for the County of 
[Los Angeles][San Diego].

   ELEVEN:  Both you and the Company understand that this 
Agreement is final and binding eight days after its 
execution and return.  Should you nevertheless attempt to 
challenge the enforceability of this Agreement as provided 
in Paragraph TEN or, in violation of that Paragraph, through 
litigation, as a further limitation on any right to make 
such a challenge, you shall initially tender to the Company, 
by certified check delivered to the Company, all monies 
received pursuant to Section 5 of the Employment Agreement, 
plus interest, and invite the Company to retain such monies 
and agree with you to cancel this Agreement and void the 
Company's obligations under Section 5 of the Employment 
Agreement.  In the event the Company accepts this offer, the 
Company shall retain such monies and this Agreement shall be 
canceled and the Company shall have no obligation under 
Section 5 of the Employment Agreement.  In the event the 
Company does not accept such offer, the Company shall so 
notify you, and shall place such monies in an interest-
bearing escrow account pending resolution of the dispute 
between you and the Company as to whether or not this 
Agreement and the Company's obligations under Section 5 of 
the Employment Agreement shall be set aside and/or otherwise 
rendered voidable or unenforceable.  Additionally, any 
consulting agreement then in effect between you and The 
Company shall be immediately rescinded with no requirement 
of notice.
   TWELVE:  Any notices required to be given under this 
Agreement shall be delivered either personally or by first 
class United States mail, postage prepaid, addressed to the 
respective parties as follows:

To Company:   [TO COME]

    Attn:  [TO COME]

To You:  
___________________
___________________
___________________

   THIRTEEN:  You understand and acknowledge that you have 
been given a period of 45 days to review and consider this 
Agreement (as well as statistical data on the persons 
eligible for similar benefits) before signing it and may use 
as much of this 45-day period as you wish prior to signing.  
You are encouraged, at your personal expense, to consult 
with an attorney before signing this Agreement.  You 
understand and acknowledge that whether or not you do so is 
your decision.  You may revoke this Agreement within seven 
days of signing it.  If you wish to revoke, the Company's 
Vice President, Human Resources must receive written notice 
from you no later than the close of business on the seventh 
day after you have signed the Agreement.  If revoked, this 
Agreement shall not be effective and enforceable and you 
will not receive payments or benefits under Section 5 of the 
Employment Agreement.

   FOURTEEN:  This Agreement constitutes the entire 
Agreement of the parties hereto and supersedes any and all 
other Agreements (except the Employment Agreement) with 
respect to the subject matter of this Agreement, whether 
written or oral, between you and the Company.  All 
modifications and amendments to this Agreement must be in 
writing and signed by the parties. 

   FIFTEEN:  Each party agrees, without further 
consideration, to sign or cause to be signed, and to deliver 
to the other party, any other documents and to take any 
other action as may be necessary to fulfill the obligations 
under this Agreement.  

   SIXTEEN:  If any provision of this Agreement or the 
application thereof is held invalid, the invalidity shall 
not affect other provisions or applications of the Agreement 
which can be given effect without the invalid provisions or 
application; and to this end the provisions of this 
Agreement are declared to be severable.

   SEVENTEEN:  This Agreement may be executed in 
counterparts.

I have read the foregoing General Release and I accept and 
agree to the provisions it contains and hereby execute it 
voluntarily and with full under-standing of its 
consequences.  I am aware it includes a release of all known 
or unknown claims.

DATED:____________________  
                           _____________________________ 
DATED:____________________  

                            _____________________________
   You acknowledge that you first received this Agreement on 
[date].

                                      
___________________________

EX-10

Exhibit 10.3

EMPLOYMENT AGREEMENT


   EMPLOYMENT AGREEMENT ("Agreement") made and entered into 
as of the 12th day of October, 1996, by and between Mineral 
Energy Company (the "Company"), a California corporation, 
and Richard D. Farman (the "Executive");
   WHEREAS, the Executive is currently serving as President 
and Chief Operating Officer of Pacific Enterprises, a 
California corporation ("Pacific Enterprises"), and the 
Company desires to secure the continued employment of the 
Executive in accordance herewith;
   WHEREAS, pursuant to the Agreement and Plan of Merger 
(the "Merger Agreement"), dated as of October 12, 1996, 
among, inter alia, Pacific Enterprises, Enova, Inc., a 
California corporation ("Enova"), and the Company, the 
parties thereto have agreed to a merger (the "Merger") 
pursuant to the terms thereof;

    WHEREAS, the Executive is willing to commit himself to 
be employed by the Company on the terms and conditions 
herein set forth and thus to forego opportunities 
elsewhere; and

   WHEREAS, the parties desire to enter into this 
Agreement, as of the Effective Date (as hereinafter 
defined), setting forth the terms and conditions for the 
employment relationship of the Executive with the Company 
during the Employment Period (as hereinafter defined).

   NOW, THEREFORE, IN CONSIDERATION of the mutual premises, 
covenants and agreements set forth below, it is hereby 
agreed as follows:  1.  Employment and Term.

(a)  Employment.  The Company agrees to employ the 
Executive, and the Executive agrees to be employed by the 
Company, in accordance with the terms and provisions of 
this Agreement during the term thereof (as described 
below).   

(b)  Term.  The term of the Executive's employment under 
this Agreement shall commence (the "Effective Date") as of 
the closing date (the "Closing Date") of the Merger, as 
described in the Merger Agreement, and shall continue until 
the earlier of the Executive's Mandatory Retirement Age (as 
defined herein) or the fifth anniversary of the Effective 
Date (such term being referred to hereinafter as the 
"Employment Period"); provided, however, that commencing on 
the fourth anniversary of the Effective Date (and each 
anniversary of the Effective Date thereafter) the term of 
this Agreement shall automatically be extended for one 
additional year, unless, prior to such date, the Company or 
the Executive shall give written notice to the other party 
that it or he, as the case may be, does not wish to so 
extend this Agreement; and further provided, however, that 
if the Merger Agreement is terminated, then, at the time of 
such termination, this Agreement shall be deemed cancelled 
and of no force or effect and the Executive shall continue 
to be subject to such agreements and arrangements that were 
in effect prior to the Closing Date.  As a condition to the 
Merger, the parties hereto agree that the Company shall be 
responsible for all of the premises, covenants and 
agreements set forth in this Agreement.
   (c)  Mandatory Retirement.  In no event shall the term 
of the Executive's employment hereunder extend beyond the 
end of the month in which the Executive's 65th birthday 
occurs (the "Mandatory Retirement Age").

  2.  Duties and Powers of Executive.

   (a)  Position.  
   (i)   Period A. During the period commencing on the 
Effective Date and ending on the earlier of September 1, 
2000 or the second anniversary of the Effective Date 
("Period A"), the Executive shall serve as the Chairman of 
the Board of Directors of the Company (the "Board") and 
Chief Executive Officer of the Company with such authority, 
duties and responsibilities with respect to such position 
as set forth below in subsection (b) hereof.  In this 
capacity, the Executive shall be a member of the office of 
the Chairman(which shall be an office held jointly by the 
Executive and the President, Chief Operating Officer and 
Vice Chairman of the Board) ("Office of the Chair-man") and 
shall report only to the Board.  The presidents and 
principal executive officers of the Company's regulated and 
nonregulated businesses and the senior-most person in 
charge of each of the Company's policy units shall report 
directly to the Office of the Chairman. (ii)   Period B. 
During the period, if any, commencing on the second 
anniversary of the Effective Date and ending on September 
1, 2000("Period B"), the Executive shall be nominated to 
the position of, and if elected shall serve as, the 
Chairman of the Board with such authority, duties and 
responsibilities with respect to such position as set forth 
below.  

   (b)  Duties.   (i)  Chief Executive Officer.  The duties 
of the Chief Executive Officer of the Company shall include 
but not be limited to directing the overall business, 
affairs and operations of the Company, through its 
officers, all of whom shall report directly or indirectly 
to the Office of the Chairman.   (ii)  Chairman of the 
Board.  The Chairman of the Board shall be a director and 
shall preside at meetings of the Board and meetings of the 
share-holders.  The Chairman shall be responsible for Board 
and shareholder governance and shall have such duties and 
responsibilities as are customarily assigned to such 
positions. 

   (c)  Board Membership.  The Executive shall be a member 
of the Board on the first day of the Employment Period, and 
the Board shall propose the Executive for re-election to 
the Board throughout the Employment Period.
   (d)  Attention.  During the Employment Period, and 
excluding any periods of vacation and sick leave to which 
the Executive is entitled, the Executive shall devote full 
attention and time during normal business hours to the 
business and affairs of the Company and, to the extent 
necessary to discharge the responsibilities assigned to the 
Executive under this Agreement, use the Executive's best 
efforts to carry out such responsibilities faithfully and 
efficiently.  It shall not be considered a violation of the 
foregoing for the Executive to serve on corporate, 
industry, civic or charitable boards or committees, so long 
as such activities do not interfere with the performance of 
the Executive's responsibilities as an employee of the 
Company in accordance with this Agreement.

3.  Compensation.

   It is the Board's intention to provide the Executive 
with compensation opportunities that, in total, are at a 
level that is consistent with that provided by comparable 
companies to executives of similar levels of 
responsibility, expertise and corporate and individual 
performance as determined by the compensation committee of 
the Board.  In this regard, the Executive shall receive the 
following compensation for his services hereunder to the 
Company:

   (a)  Base Salary.  During the Employment Period, the 
Executive's annual base salary ("Annual Base Salary") shall 
be no less than $760,000 and shall be payable in accordance 
with the Company's general payroll practices.  Subject to 
Section 4(e)(ii), the Board in its discretion may from time 
to time direct such upward adjustments in the Executive's 
Annual Base Salary as the Board deems to be necessary or 
desirable, including, without limitation, adjustments in 
order to reflect in-creases in the cost of living and the 
Executive's performance.  Any increase in Annual Base 
Salary shall not serve to limit or reduce any other 
obligation of the Company under this Agreement.

   (b)  Incentive Compensation.  Subject to Section 
4(e)(ii), during the Employment Period, the Executive shall 
participate in annual incentive compensation plans and 
long-term incentive compensation plans of the Company and, 
to the extent appropriate, the Company's subsidiaries 
(which long-term incentive compensation plans may include 
plans offering stock options, restricted stock and other 
long-term incentive compensation and all such annual and 
long-term plans to be hereinafter referred to as the 
"Incentive Compensation Plans") and will be granted (i) on 
a year-by-year basis, annual compensation providing the 
Executive with an annual bonus opportunity of not less than 
60% of his Annual Base Salary at target and 120% of his 
Annual Base Salary at maximum, and (ii) long-term incentive 
compensation (collectively referred to as "Incentive 
Compensation Awards").  Any equity awards granted to the 
Executive may be granted, at the Executive's election, to 
trusts established for the benefit of members of the 
Executive's family.  With respect to incentive compensation 
awards granted prior to the Effective Date, the Executive 
shall be entitled to retain such awards in accordance with 
their terms, which shall be appropriately adjusted as a 
result of the Merger. 
   (c)  Retirement and Welfare Benefit Plans.  In addition 
to the benefits provided under Section 3(b), during the 
Employment Period and so long as the Executive is employed 
by the Company, he shall be eligible to participate in all 
other savings, retirement and welfare plans, practices, 
policies and programs applicable generally to employees 
and/or senior executive officers of the Company and its 
domestic subsidiaries, except with respect to any benefits 
under any plan, practice, policy or program to which the 
Executive has waived his rights in writing.  To the extent 
that benefits payable or provided to the Executive under 
such plans are materially less favorable on a benefit by 
benefit basis than the benefits that would have been 
payable or provided to the Executive under comparable 
Pacific Enterprises tax-qualified retirement plans, 
executive retirement plans, executive medical plans and 
life insurance arrangements in which the Executive was a 
participant (based on the terms of such plans as of the 
Effective Date), the Executive shall be entitled to 
benefits pursuant to the terms of this Agreement equal to 
the excess of the benefits provided under the applicable 
Pacific Enterprises plans over the benefits provided under 
the comparable Company plans.  
   (d)  Expenses.  The Company shall reimburse the 
Executive for all expenses, including those for travel and 
entertainment, properly incurred by him in the performance 
of his duties hereunder in accordance with policies 
established from time to time by the Board.

   (e)  Fringe Benefits and Perquisites.  During the 
Employment Period and so long as the Executive is employed 
by the Company, he shall be entitled to receive fringe 
benefits and perquisites in accordance with the plans, 
practices, pro-grams and policies of the Company and, to 
the extent appropriate, the Company's subsidiaries from 
time to time in effect, commensurate with his position.

4.  Termination of Employment.

   (a)  Death.  The Executive's employment shall terminate 
upon the Executive's death. 

   (b)  Disability.  The Executive's active employment 
shall terminate at the election of the Board or the 
Executive by reason of Disability (as herein defined)during 
the Employment Period; provided, however, that the Board 
may not terminate the Executive's active employment 
hereunder by reason of Disability unless at the time of 
such termination there is no reasonable expectation that 
the Executive will return to full time responsibilities 
hereunder within the next ninety (90) day period. For 
purposes of the Agreement, disability ("Disability") shall  
have the same meaning as set forth in the Pacific 
Enterprises long-term disability plan or its successor.  
Upon such termination Executive shall continue as a 
participant under the Pacific Enterprises long-term 
disability plan or its successor and under the disability 
provisions of Pacific Enterprises' supplemental executive 
retirement plan or its successor until Executive reaches 
mandatory retirement age, elects to commence retirement 
benefits, becomes employed or ceases to have a Disability.

   (c)  By the Company for Cause.  The Company may 
terminate the Executive's employment during the Employment 
Period for Cause (as herein defined). For purposes of this 
Agreement, "Cause" shall mean (i) the willful and continued 
failure by the Executive to substantially perform the 
Executive's duties with the Company (other than any such 
failure resulting from the Executive's incapacity due to 
physical or mental illness or any such actual or 
anticipated failure after the issuance of a Notice of 
Termination for Good Reason by the Executive pursuant to 
Section 4(d))or (ii) the Executive's commission of one or 
more acts of moral turpitude that constitute a violation of 
applicable law (including but not limited to a felony) 
which have or result in an adverse effect on the Company, 
monetarily or otherwise or one or more significant acts of 
dishonesty.  For purposes of clause (i) of this definition, 
no act, or failure to act, on the Executive's part shall be 
deemed "willful" unless done, or omitted to be done, by the 
Executive not in good faith and without reasonable belief 
that the Executive's act, or failure to act, was in the 
best interest of the Company.

(d)  By the Company without Cause.  Notwithstanding any 
other provision of this Agreement, the Company may 
terminate the Executive's employment other than by a 
termination for Cause during the Employment Period, but 
only upon the affirmative vote of three-fourths (3/4) of 
the membership of the Board. 
 
 (e)  By the Executive for Good Reason.  The Executive may 
terminate his employment during the Employment Period for 
Good Reason (as herein defined). For purposes of this 
Agreement, "Good Reason" shall mean the occurrence without 
the written consent of the Executive of any one of the 
following acts by the Company, or failures by the Company 
to act, unless such act or failure to act is corrected 
prior to the Date of Termination (as hereinafter defined) 
specified in the Notice of Termination (as hereinafter 
defined) given in respect thereof: (i)  an adverse change 
in the Executive's title, authority, duties, 
responsibilities or reporting lines as specified in Section 
2(a) and 2(b)of this Agreement;  (ii) a reduction by the 
Company in (A) the Executive's Annual Base Salary as in 
effect on the date hereof or as the same may be increased 
from time to time or (B) the Executive's aggregate 
annualized compensation and benefits opportunities, except, 
in the case of both (A) and (B), for across-the-board 
reductions similarly affecting all executives (both of the 
Company and of any Person (as hereinafter defined) then in 
control of the Company) whose compensation is directly 
determined by the compensation committee of the Board(and 
the compensation committee of the board of directors of any 
Person then in control of the Company); provided that, the 
exception for across-the-board reductions shall not apply 
following a Change in Control (as hereinafter defined);  
(iii)  the relocation of the Executive's principal place of 
employment to a location away from his principal place of 
employment as of the Effective Date, a substantial increase 
in the Executive's business travel obligations outside of 
the Southern California area as of the Effective Date, 
other than any such increase that (A) arises in connection 
with extraordinary business activities of the Company and 
(B) is understood not to be part of the Executive's regular 
duties with the Company;  (iv)  the failure by the Company 
to pay to the Executive any portion of the Executive's 
current compensation and benefits or to pay to the 
Executive any portion of an installment of deferred 
compensation under any deferred compensation program of the 
Company within thirty (30) days of the date such 
compensation is due;  (v)  the failure by the shareholders 
to elect the Executive to the Board during the Employment 
Period;  (vi)  the failure by the Board to elect the 
Executive to the position of Chairman of the Board during 
Period B;  (vii)  any purported termination of the 
Executive's employment that is not effected pursuant to a 
Notice of Termination satisfying the requirements of 
Section 4(f); for purposes of this Agreement, no such 
purported termination shall be effective;  (viii)  the 
failure by the Company to obtain a satisfactory agreement 
from any successor of the Company requiring such successor 
to assume and agree to perform the Company's obligations 
under this Agreement, as contemplated in Section 11; or 
(ix)  the failure by the Company to comply with any 
material provision of this Agreement.

   Following a Change in Control (as hereinafter defined), 
the Executive's determination that an act or failure to act 
constitutes Good Reason shall be presumed to be valid 
unless such determination is deemed to be unreasonable by 
an arbitrator.  The Executive's right to terminate the 
Executive's employment for Good Reason shall not be 
affected by the Executive's incapacity due to physical or 
mental illness.  The Executive's continued employment shall 
not constitute consent to, or a waiver of rights with 
respect to, any act or failure to act constituting Good 
Reason hereunder.

   (f)   Change in Control.  Change in Control shall mean 
the occurrence of any of the following events: (i)Any 
Person is or becomes the Beneficial Owner, directly or 
indirectly, of securities of the Company (not including in 
the securities beneficially owned by such Person any 
securities acquired directly from the Company or its 
affiliates other than in connection with the acquisition by 
the Company or its affiliates of a business) representing 
twenty percent (20%) or more of the combined voting power 
of the Company's then outstanding securities; or   (ii)  
The following individuals cease for any reason to 
constitute a majority of the number of directors then 
serving: individuals who, on the date hereof, constitute 
the Board and any new director (other than a director whose 
initial assumption of office is in connection with an 
actual or threatened election contest, including but not 
limited to a consent solicitation, relating to the election 
of directors of the Company) whose appointment or election 
by the Board or nomination for election by the Company's 
shareholders was approved or recommended by a vote of at 
least two-thirds (2/3) of the directors then still in 
office who either were directors on the date hereof or 
whose appointment, election or nomination for election was 
previously so approved or recommended; or    (iii)  There 
is consummated a merger or consolidation of the Company or 
any direct or indirect subsidiary of the Company with any 
other corporation, other than (A) a merger or consolidation 
which would result in the voting securities of the Company 
outstanding immediately prior to such merger or 
consolidation continuing to represent (either by remaining 
outstanding or by being converted into voting securities of 
the surviving entity or any parent thereof), in combination 
with the ownership of any trustee or other fiduciary 
holding securities under an employee benefit plan of the 
Company or any subsidiary of the Company, at least sixty 
percent (60%) of the combined voting power of the 
securities of the Company or such surviving entity or any 
parent thereof outstanding immediately after such merger or 
consolidation, or(B) a merger or consolidation effected to 
implement a recapitalization of the Company (or similar 
transaction) in which no Person is or becomes the 
beneficial owner, directly or indirectly, of securities of 
the Company (not including in the securities beneficially 
owned by such Person any securities acquired directly from 
the Company or its affiliates other than in connection with 
the acquisition by the Company or its affiliates of a 
business) representing twenty percent (20%) or more of the 
combined voting power of the Company's then outstanding 
securities; or    (iv)  The shareholders of the Company 
approve a plan of complete liquidation or dissolution of 
the Company or there is consummated an agreement for the 
sale or disposition by the Company of all or substantially 
all of the Company's assets, other than a sale or 
disposition by the Company of all or substantially all of 
the Company's assets to an entity, at least sixty percent 
(60%) of the combined voting power of the voting securities 
of which are owned by shareholders of the Company in 
substantially the same proportions as their ownership of 
the Company immediately prior to such sale.   "Person" 
shall have the meaning given in section 3(a)(9) of the 
Securities Exchange Act of 1934 (the "Exchange Act"), as 
modified and used in sections 13(d) and 14(d) thereof, 
except that such term shall not include (i) the Company or 
any of its subsidiaries, (ii) a trustee or other fiduciary 
holding securities under an employee benefit plan of the 
Company or any of its affiliates, (iii) an underwriter 
temporarily holding securities pursuant to an offering of 
such securities, (iv) a corporation owned, directly or 
indirectly, by the shareholders of the Company in 
substantially the same proportions as their ownership of 
stock of the Company, or(v) a person or group as used in 
Rule 13d-1(b) under the Exchange Act.   "Beneficial Owner" 
shall have the meaning set forth in Rule 13d-3 under the 
Exchange Act. 
 
 Notwithstanding the foregoing, any event or transaction 
which would otherwise constitute a Change in Control (a 
"Transaction") shall not constitute a Change in Control for 
purposes of this Agreement if, in connection with the 
Transaction, the Executive participates as an equity 
investor in the acquiring entity or any of its affiliates 
(the "Acquiror").  For purposes of the preceding sentence, 
the Executive shall not be deemed to have participated as 
an equity investor in the Acquiror by virtue of (i) 
obtaining beneficial ownership of any equity interest in 
the Acquiror as a result of the grant to the Executive of 
an incentive compensation award under one or more incentive 
plans of the Acquiror (including, but not limited to, the 
conversion in connection with the Transaction of incentive 
compensation awards of the Company into incentive 
compensation awards of the Acquiror), on terms and 
conditions substantially equivalent to those applicable to 
other executives of the Company immediately prior to the 
Transaction, after taking into account normal differences 
attributable to job responsibilities, title and the like, 
(ii) obtaining beneficial ownership of any equity interest 
in the Acquiror on terms and conditions substantially 
equivalent to those obtained in the Transaction by all 
other shareholders of the Company, or (iii) obtaining 
beneficial ownership of any equity interest in the Acquiror 
in a manner unrelated to a Transaction.

   (g)  Notice of Termination.  During the Employment 
Period, any purported termination of the Executive's 
employment (other than by reason of death)shall be 
communicated by written Notice of Termination from one 
party hereto to the other party hereto in accordance with 
Section 12(b).  For purposes of this Agreement, a "Notice 
of Termination" shall mean a notice that shall indicate the 
specific termination provision in this Agreement relied 
upon, if any, and shall set forth in reasonable detail the 
facts and circumstances claimed to provide a basis for 
termination of the Executive's employment under the 
provision so indicated.  Further, a Notice of Termination 
for Cause is required to include a copy of a resolution 
duly adopted by the affirmative vote of not less than 
three-fourths (3/4) of the entire membership of the Board 
at a meeting of the Board that was called and held no more 
than ninety (90)days after the date the Board had knowledge 
of the most recent act or omission giving rise to such 
breach for the purpose of considering such termination 
(after reasonable notice to the Executive and an 
opportunity for the Executive, together with the 
Executive's counsel, to be heard before the Board and, if 
possible, to cure the breach that was the basis for the 
Notice of Termination for Cause) finding that, in the good 
faith opinion of the Board, the Executive was guilty of 
conduct set forth in clause (i)or (ii) of the definition of 
Cause herein, and specifying the particulars thereof in 
detail.  Unless the Board determines otherwise, a Notice of 
Termination by the Executive alleging a termination for 
Good Reason must be made within 180 days of the act or 
failure to act that the Executive alleges to constitute 
Good Reason.

   (h)  Date of Termination.  "Date of Termination," with 
respect to any purported termination of the Executive's 
employment during the Employment Period, shall mean the 
date specified in the Notice of Termination (which, in the 
case of a termination by the Company for reasons other than 
Cause, shall not be less than thirty(30) days and, in the 
case of a termination by the Executive, shall not be less 
than fifteen (15) days nor more than sixty (60) days), from 
the date such Notice of Termination is given.

5.  Obligations of the Company Upon Termination.

   (a)  Termination Other Than for Cause, Death or 
Disability.  During the Employment Period, if the Company 
shall terminate the Executive's employment(other than for 
Cause, death or Disability) or the Executive shall 
terminate his employment for Good Reason (termination in 
any such case being referred to as "Termination"), the 
Company shall pay to the Executive the amounts, and provide 
the Executive with the benefits, described in this Section 
5 (hereinafter referred to as the "Severance Payments").  
Subject to Section 5(g), the amounts specified in this 
Section 5(a) shall be paid within thirty (30) days after 
the Date of Termination.   (i)  Lump Sum Payment.  In lieu 
of any further payments of Annual Base Salary or annual 
Incentive Compensation Awards to the Executive for periods 
subsequent to the Date of Termination, the Company shall 
pay to the Executive a lump sum amount in cash equal to the 
product of (X) the sum of (A) the Executive's Annual Base 
Salary and (B) the greater of the Executive's target bonus 
for the year of termination or the average of the three(3) 
years' highest gross bonus awards, not necessarily 
consecutive, paid by the Company (or its predecessor) to 
the Executive in the five (5) years preceding the year of 
termination and (Y) two (2); provided, however, that in the 
event of a Termination following a Change in Control, such 
multiplier shall be three(3).   (ii)  Accrued Obligations.  
The Company shall pay the Executive a lump sum amount in 
cash equal to the sum of (A) the Executive's Annual Base 
Salary through the Date of Termination to the extent not 
thereto-fore paid, (B) an amount equal to any annual 
Incentive Compensation Awards earned with respect to fiscal 
years ended prior to the year that includes the Date of 
Termination to the extent not theretofore paid, and (C) an 
amount equivalent to the target amount payable under any 
annual Incentive Compensation Awards for the fiscal year 
that includes the Date of Termination or if greater, the 
average of the three (3) years' highest gross bonus awards, 
not necessarily consecutive, paid by the Company (or its 
predecessor) to the Executive in the five (5) years 
preceding the year of Termination multiplied by a fraction 
the numerator of which shall be the number of days from the 
beginning of such fiscal year to and including the Date of 
Termination and the denominator of which shall be 365, in 
each case to the extent not theretofore paid.  (The amounts 
specified in clauses (A), (B) and (C) shall be hereinafter 
referred to as the "Accrued Obligations.")   (iii)  
Deferred Compensation.  In the event of a Termination 
following a Change in Control, the Company shall pay the 
Executive a lump sum payment in an amount equal to any 
compensation previously deferred by the Executive (together 
with any accrued interest or earnings thereon).   (iv)  
Pension Supplement.  The Company shall pay the Executive a 
lump sum payment (the "Pension Supplement") in an amount 
equal to the present value (as determined in accordance 
with the terms of Pacific Enterprises' supplemental 
executive retirement plan) of the benefits to which the 
Executive would be entitled under the Company's defined 
benefit pension and retirement plans (the "Pension and 
Retirement Plans") if he had continued working for the 
Company for an additional two (2) years, and had increased 
his age by two (2) years as of the Date of Termination but 
not beyond the Mandatory Retirement Age; provided, however, 
that in the event of a Termination following a Change in 
Control, such number of years shall be three (3)but not 
beyond the Mandatory Retirement Age.   (v)  Accelerated 
Vesting and Payment of Long-Term Incentive Awards.  All 
equity-based, long-term Incentive Compensation Awards held 
by the Executive under any long- term Incentive 
Compensation Plan maintained by the Company or any 
affiliate shall immediately vest and become exercisable as 
of the Date of Termination, to be exercised in accordance 
with the terms of the applicable plan and award agreement; 
provided, however, that any such awards granted on or after 
the Effective Date shall remain outstanding and exercisable 
until the earlier of (A) eighteen (18) months following the 
Date of Termination or (B) the expiration of the original 
term of such award (it being understood that all awards 
granted prior to the Effective Date shall remain 
outstanding and exercisable for a period that is no less 
than that provided for in the applicable agreement in 
effect as of the date of grant), and the Company shall pay 
to the Executive, with respect to all cash-based, long-term 
Incentive Compensation Awards made to the Executive that 
are outstanding under any long-term Incentive Compensation 
Plan maintained by the Company or any affiliate an amount 
equal to the target amount payable under such long-term 
Incentive Compensation Awards multiplied by a fraction, the 
numerator of which shall be the number of days from the 
beginning of the award cycle to and including the Date of 
Termination, and the denominator of which shall be the 
number of days in the cycle as originally granted; and   
(vi)  Continuation of Welfare Benefits.  For a period of 
two (2)years or until the Executive is eligible for retiree 
medical benefits, whichever is longer, immediately 
following the Date of Termination, the Company shall 
arrange to provide the Executive and his dependents with 
life, disability, accident and health insurance benefits 
substantially similar to those provided to the Executive 
and his dependents immediately prior to the Date of 
Termination, provided, however, that in no event shall the 
Executive be entitled to receive disability benefits under 
the Pacific Enterprises long-term disability plan or 
Pacific Enterprises' supplemental executive retirement plan 
after the Executive has become eligible to commence receipt 
of retirement benefits under Pacific Enterprises  
supplemental executive retirement plan, and provided, 
further, that if the Executive becomes employed with 
another employer and is eligible to receive life, 
disability, accident and health insurance benefits under 
another employer-provided plan, the benefits under the 
Company's plans shall be secondary to those provided under 
such other plan during such applicable period of 
eligibility, and further provided, however, that in the 
event of a termination following a Change in Control such 
period shall not be less than three (3) years.    
   (b)  Termination by the Company for Cause or by the 
Executive Other than for Good Reason.  Subject to the 
provisions of Section 6 of this Agreement, if the 
Executive's employment shall be terminated for Cause during 
the Employment Period, or if the Executive terminates 
employment during the Employment Period other than for Good 
Reason, the Company shall have no further obligations to 
The Executive under this Agreement other than the Accrued 
Obligations. 

   (c)  Termination due to Death or Disability.

  If the Executive's employment shall terminate by reason 
of death or Disability, the Company shall pay The Executive 
or his estate, as the case may be, the Accrued Obligations 
and, solely in the case of termination by reason of 
Disability, the Pension Supplement.  Such payments shall be 
in addition to those rights and benefits to which the 
Executive or his estate may be entitled under the relevant 
Company plans or programs.

   (d)  Code Section 280G. 
  (i)  Notwithstanding any other provisions of this 
Agreement, in the event that any payment or benefit 
received or to be received by the Executive (whether 
pursuant to the terms of this Agreement or any other plan, 
arrangement or agreement with (A) the Company, (B) any 
Person (as defined in Section 4(e)) whose actions result in 
a Change in Control or (C) any Person affiliated with the 
Company or such Person) (all such payments and benefits, 
including the Severance Payments, being hereinafter called 
"Total Payments")would not be deductible (in whole or part) 
by the Company, an affiliate or Person making such payment 
or providing such benefit as a result of section 280G of 
the Code, then, to the extent necessary to make such 
portion of the Total Payments deductible (and after taking 
into account any reduction in the Total Payments provided 
by reason of section 280G of the Code in such other plan, 
arrangement or agreement), the cash Severance Payments 
shall first be reduced (if necessary, to zero), and all 
other Severance Payments shall thereafter be reduced (if 
necessary, to zero); provided, however, that the Executive 
may elect to have the noncash Severance Payments reduced 
(or eliminated) prior to any reduction of the cash 
Severance Payments.   (ii)  For purposes of this 
limitation, (A) no portion of the Total Payments the 
receipt or enjoyment of which the Executive shall have 
waived at such time and in such manner as not to constitute 
a "payment" within the meaning of section 280G(b) of the 
Code shall be taken into account, (B) no portion of the 
Total Payments shall be taken into account which, in the 
opinion of tax counsel ("Tax Counsel") reasonably 
acceptable to the Executive and selected by the Company's 
accounting firm which (or, in the case of a payment 
following a Change in Control the accounting firm that was, 
immediately prior to the Change in Control, the Company's 
independent auditor) (the "Auditor"),does not constitute a 
"parachute payment" within the meaning of section 
280G(b)(2) of the Code, including by reason of section 
280G(b)(4)(A) of the Code, (C) the Severance Payments shall 
be reduced only to the extent necessary so that the Total 
Payments (other than those referred to in clause (A) or(B)) 
in their entirety constitute reasonable compensation for 
services actually rendered within the meaning of section 
280G(b)(4)(B) of the Code or are otherwise not subject to 
disallowance as deductions by reason of section 280G of the 
Code, in the opinion of Tax Counsel, and (D) the value of 
any noncash benefit or any deferred payment or benefit 
included in the Total Payments shall be determined by the 
Auditor in accordance with the principles of sections 
280G(d)(3) and (4) of the Code.

   (e)  Consulting and Non-Competition. 

  If the Total Payments are subject to reduction in 
accordance with the above provisions of Section 5(d), the 
Executive shall have the option, to be exercised within ten 
(10) days after receipt of notice of such reduction from 
the Company, to enter into a consulting and non-competition 
agreement with the Company (the  Consulting and Non-
Competition Agreement"), which shall (1) provide the 
Executive with payments and benefits, payable over the term 
of the agreement, the present value of which in the 
aggregate is equal to or greater than the present value 
(determined by applying a discount rate equal to the 
interest rate provided in section 1274(b)(2)(B) of the 
Code) of the balance of the payments and benefits otherwise 
payable to the Executive without regard to the provisions 
of Section 5(d), (2) require the Executive to make his 
services available to the Company for no more than twenty 
(20) hours per month and (3) last for a period of not more 
than two (2) years (unless the Executive consents to a 
longer period).

  (f)  Gross-Up Payment. 

 In the event that the Executive receives a notice from the 
Internal Revenue Service to the effect that the amounts 
payable under the Consulting and Non-Competition Agreement 
would be subject (in whole or part)to the tax (the "Excise 
Tax") imposed under section 4999 of the Code, within 
thirty(30) days after the date the Chairman of the Board 
receives a copy of such notice the Company shall pay to the 
Executive such additional amounts (the "Gross-Up Payment") 
such that the net amount retained by the Executive, after 
deduction of any Excise Tax on the Total Payments and any 
federal, state and local income and employment taxes and 
Excise Tax upon the Gross-Up Payment, shall be equal to the 
Total Payments.  For purposes of determining the amount of 
the Gross-Up Payment, the Executive shall be deemed to pay 
federal income tax at the highest marginal rate of federal 
income taxation in the calendar year in which the Gross-Up 
Payment is to be made and state and local income taxes at 
the highest marginal rate of taxation in the state and 
locality of the Executive's residence on the date on which 
the Gross-Up Payment is calculated for purposes of this 
section, net of the maximum reduction in federal income 
taxes which could be obtained from deduction of such state 
and local taxes.  In the event that the Excise Tax is 
subsequently determined to be less than the amount taken 
into account hereunder, the Executive shall repay to the 
Company, at the time that the amount of such reduction in 
Excise Tax is finally determined, the portion of the Gross-
Up Payment attributable to such reduction (plus that 
portion of the Gross-Up Payment attributable to the Excise 
Tax and federal, state and local income tax imposed on the 
Gross-Up Payment being repaid by the Executive to the 
extent that such repayment results in a reduction in Excise 
Tax and/or a federal, state or local income tax deduction) 
plus interest on the amount of such repayment at the rate 
provided in section 1274(b)(2)(B) of the Code.  In the 
event that the Excise Taxis determined to exceed the amount 
taken into account hereunder (including by reason of any 
payment the existence or amount of which cannot be 
determined at the time of the Gross-Up Payment), the 
Company shall make an additional Gross-Up Payment in 
respect of such excess (plus any interest, penalties or 
additions payable by the Executive with respect to such 
excess) at the time that the amount of such excess is 
finally determined.  The Executive and the Company shall 
each reasonably cooperate with the other in connection with 
any administrative or judicial proceedings concerning the 
existence or amount of liability for Excise Tax with 
respect to the Total Payments. 
   (g)  Release.  Notwithstanding anything herein to the 
contrary, the Company's obligation to make the payments 
provided for in this Section 5 is expressly made subject to 
and conditioned upon (i) the Executive's prior execution of 
a release substantially in the form attached hereto as 
Exhibit A within forty-five (45)days after the applicable 
Date of Termination and (ii) the Executive's non-revocation 
of such release in accordance with the terms thereof.

6.  Nonexclusivity of Rights.  

   Nothing in this Agreement shall prevent or limit the 
Executive's continuing or future participation in any 
benefit, plan, program, policy or practice provided by the 
Company and for which the Executive may qualify (except 
with respect to any benefit to which the Executive has 
waived his rights in writing), nor shall anything herein 
limit or otherwise affect such rights as the Executive may 
have under any other contract or agreement entered into 
after the Effective Date with the Company.  Amounts which 
are vested benefits or which the Executive is otherwise 
entitled to receive under any benefit, plan, policy, 
practice or program of, or any contract or agreement 
entered into with, the Company shall be payable in 
accordance with such benefit, plan, policy, practice or 
program or contract or agreement except as explicitly 
modified by this Agreement.

7.  Full Settlement; Mitigation.

   The Company's obligation to make the payments provided 
for in this Agreement and otherwise to perform its 
obligations hereunder shall not be affected by any set-off, 
counterclaim, recoupment, defense or other claim, right or 
action which the Company may have against the Executive or 
others, provided that nothing herein shall preclude the 
Company from separately pursuing recovery from the 
Executive based on any such claim.  In no event shall the 
Executive be obligated to seek other employment or take any 
other action by way of mitigation of the amounts (including 
amounts for damages for breach) payable to the Executive 
under any of the provisions of this Agreement and such 
amounts shall not be reduced whether or not the Executive 
obtains other employment. 

 8.  Arbitration.

 Any dispute about the validity, interpretation, effect or 
alleged violation of this Agreement (an "arbitrable 
dispute") must be submitted to confidential arbitration in 
Los Angeles, California.  Arbitration shall take place 
before an experienced employment arbitrator licensed to 
practice law in such state and selected in accordance with 
the Model Employment Arbitration Procedures of the American 
Arbitration Association.  Arbitration shall be the 
exclusive remedy of any arbitrable dispute. Should any 
party to this Agreement pursue any arbitrable dispute by 
any method other than arbitration, the other party shall be 
entitled to recover from the party initiating the use of 
such method all damages, costs, expenses and attorneys' 
fees incurred as a result of the use of such method.  
Notwithstanding anything herein to the contrary, nothing in 
this Agreement shall purport to waive or in any way limit 
the right of any party to seek to enforce any judgment or 
decision on an arbitrable dispute in a court of competent 
jurisdiction.

9.  Confidentiality.

The Executive acknowledges that in the course of his 
employment with the Company he has acquired non-public 
privileged or confidential information and trade secrets 
concerning the operations, future plans and methods of 
doing business("Proprietary Information") of the Company, 
its subsidiaries and affiliates; and the Executive agrees 
that it would be extremely damaging to the Company, its 
subsidiaries and affiliates if such Proprietary Information 
were disclosed to a competitor of the Company, its 
subsidiaries and affiliates or to any other person or 
corporation.  The Executive understands and agrees that all 
Proprietary Information has been divulged to the Executive 
in confidence and further understands and agrees to keep 
all Proprietary Information secret and confidential (except 
for such information which is or becomes publicly available 
other than as a result of a breach by the Executive of this 
provision) without limitation in time.  In view of the 
nature of the Executive's employment and the Proprietary 
Information the Executive has acquired during the course of 
such employment, the Executive likewise agrees that the 
Company, its subsidiaries and affiliates would be 
irreparably harmed by any disclosure of Proprietary 
Information in violation of the terms of this paragraph and 
that the Company, its subsidiaries and affiliates shall 
therefore be entitled to preliminary and/or permanent 
injunctive relief prohibiting the Executive from engaging 
in any activity or threatened activity in violation of the 
terms of this paragraph and to any other relief available 
to them.  Inquiries regarding whether specific information 
constitutes Proprietary Information shall be directed to 
the Board, provided that the Company shall not unreasonably 
classify information as Proprietary Information.


10.  Non-Solicitation of Employees.
  
   The Executive recognizes that he possesses and will 
possess confidential information about other employees of 
the Company, its subsidiaries and affiliates relating to 
their education, experience, skills, abilities, 
compensation and benefits, and interpersonal relationships 
with customers of the Company, its subsidiaries and 
affiliates.  The Executive recognizes that the information 
he possesses and will possess about these other employees 
is not generally known, is of substantial value to the 
Company, its subsidiaries and affiliates in developing 
their business and in securing and retaining customers, and 
has been and will be acquired by him because of his 
business position with the Company, its subsidiaries and 
affiliates.  The Executive agrees that, during the 
Employment Period and for a period of one (1) year 
thereafter, he will not, directly or indirectly, solicit or 
recruit any employee of the Company, its subsidiaries or 
affiliates for the purpose of being employed by him or by 
any competitor of the Company, its subsidiaries or 
affiliates on whose behalf he is acting as an agent, 
representative or employee and that he will not convey any 
such confidential information or trade secrets about other 
employees of the Company, its subsidiaries and affiliates 
to any other person; provided, however, that it shall not 
constitute a solicitation or recruitment of employment in 
violation of this paragraph to discuss employment 
opportunities with any employee of the Company, its 
subsidiaries or affiliates who has either first contacted 
the Executive or regarding whose employment the Executive 
has discussed with and received the written approval of the 
Chairman of the Board prior to making such solicitation or 
recruitment.  In view of the nature of the Executive's 
employment with the Company, the Executive likewise agrees 
that the Company, its subsidiaries and affiliates would be 
irreparably harmed by any solicitation or recruitment in 
violation of the terms of this paragraph and that the 
Company, its subsidiaries and affiliates shall therefore be 
entitled to preliminary and/or permanent injunctive relief 
prohibiting the Executive from engaging in any activity or 
threatened activity in violation of the terms of this 
paragraph and to any other relief available to them.

11.  Legal Fees. 
 The Company shall pay to the Executive all legal fees and 
expenses (including but not limited to fees and expenses in 
connection with any arbitration) incurred by the Executive 
in disputing in good faith any issue arising under this 
Agreement relating to the termination of the Executive's 
employment or in seeking in good faith to obtain or enforce 
any benefit or right provided by this Agreement, but in 
each case only to the extent the arbitrator or court 
determines that the Executive had a reasonable basis for 
such claim. 

 12.  Successors.

   (a)  Assignment by Executive.  This Agreement is 
personal to the Executive and without the prior written 
consent of the Company shall not be assign-able by the 
Executive otherwise than by will or the laws of descent and 
distribution. This Agreement shall inure to the benefit of 
and be enforceable by the Executive's legal 
representatives.   

(b)  Successors and Assigns of Company.  This Agreement 
shall inure to the benefit of and be binding upon the 
Company, its successors and assigns.

(c)  Assumption.  The Company shall require any successor 
(whether direct or indirect, by purchase, merger, 
consolidation or otherwise) to all or substantially all of 
the business and/or assets of the Company to assume 
expressly and agree to perform this Agreement in the same 
manner and to the same extent that the Company would be 
required to perform it if no such succession had taken 
place.  As used in this Agreement, "Company" shall mean the 
Company as hereinbefore defined and any successor to its 
businesses and/or assets as aforesaid that assumes and 
agrees to perform this Agreement by operation of law or 
otherwise.

13.  Miscellaneous.

   (a)  Governing Law.  This Agreement shall be governed by 
and construed in accordance with the laws of the State of 
California, without reference to its principles of conflict 
of laws.  The captions of this Agreement are not part of 
the provisions hereof and shall have no force or effect.  
This Agreement may not be amended, modified, repealed, 
waived, extended or discharged except by an agreement in 
writing signed by the party against whom enforcement of 
such amendment, modification, repeal, waiver, extension or 
discharge is sought.  No person, other than pursuant to a 
resolution of the Board or a committee thereof, shall have 
authority on behalf of the Company to agree to amend, 
modify, repeal, waive, extend or discharge any provision of 
this Agreement or anything in reference thereto.

   (b)  Notices.  All notices and other communications 
hereunder shall be in writing and shall be given by hand 
delivery to the other party or by registered or certified 
mail, return receipt requested, postage prepaid, addressed, 
in either case, to the principal corporate offices of 
Pacific Enterprises or to such other address as either 
party shall have furnished to the other in writing in 
accordance herewith.  Notices and communications shall be 
effective when actually received by the addressee.

   (c)  Severability.  The invalidity or unenforceability 
of any provision of this Agreement shall not affect the 
validity or enforceability of any other provision of this 
Agreement.

   (d)  Taxes.  The Company may withhold from any amounts 
payable under this Agreement such federal, state or local 
taxes as shall be required to be withheld pursuant to any 
applicable law or regulation.
 
  (e)  No Waiver.  The Executive's or the Company's failure 
to insist upon strict compliance with any provision hereof 
or any other provision of this Agreement or the failure to 
assert any right the Executive or the Company may have 
hereunder, including, without limitation, the right of the 
Executive to terminate employment for Good Reason pursuant 
to Section 4(d) of this Agreement, or the right of the 
Company to terminate the Executive's employment for Cause 
pursuant to Section 4(b) of this Agreement, shall not be 
deemed to be a waiver of such provision or right or any 
other provision or right of this Agreement.
   (f)  Entire Agreement.  This instrument contains the 
entire agreement of the Executive, the Company or any 
predecessor or subsidiary thereof with respect to the 
subject matter hereof, and all promises, representations, 
understandings, arrangements and prior agreements are 
merged herein and superseded hereby including, but not 
limited to, that certain Severance Agreement, dated October 
11, 1996, between the Executive and Pacific Enterprises.  
Notwithstanding the foregoing, the provisions of any 
employee benefit or compensation plan, program or 
arrangement applicable to the Executive, including that 
certain Incentive Bonus Agreement, entered into between the 
Executive and Pacific Enterprises, shall remain in effect, 
except as expressly otherwise provided herein.

   IN WITNESS WHEREOF, the Executive and, pursuant to due 
authorization from its Board of Directors, the Company have 
caused this Agreement to be executed as of the day and year 
first above written.

MINERAL ENERGY COMPANY


__________________________
Kevin C. Sagara
President

__________________________
Richard D. Farman

EXHIBIT A

GENERAL RELEASE


This GENERAL RELEASE (the "Agreement"), dated _______, is 
made by and between ___________________, a California 
corporation (the "Company") and _____________ ("you" or 
"your").

   WHEREAS, you and the Company have previously entered into 
that certain Employment Agreement dated _____________, 1996 
(the "Employment Agreement"); and

   WHEREAS, Section 5 of the Employment Agreement provides 
for the payment of severance benefits in the event of the 
termination of your employment under certain circumstances, 
subject to and conditioned upon your execution and non-
revocation of a general release of claims by you against the 
Company and its subsidiaries and affiliates.

   NOW, THEREFORE, in consideration of the premises and the 
mutual covenants herein contained, you and the Company 
hereby agree as follows:

   ONE:  Your signing of this Agreement confirms that your 
employment with the Company shall terminate at the close of 
business on ___________,or earlier upon our mutual 
agreement.

   TWO:  As a material inducement for the payment of 
benefits under Section 5 of that certain Employment 
Agreement between you and the Company, and except as 
otherwise provided in this Agreement, you and the Company 
hereby irrevocably and unconditionally release, acquit and 
forever discharge the other from any and all Claims either 
may have against the other.  For purposes of his Agreement 
and the preceding sentence, the words "Releasee" or 
"Releasees"
and "Claim" or "Claims," shall have the meanings set forth 
below:

   (a)The words "Releasee" or "Releasees" shall refer to the 
you and to the Company and each of the Company's owners, 
stockholders, predecessors, successors, assigns, agents, 
directors, officers, employees, representatives, attorneys, 
advisors, parent companies, divisions, subsidiaries, 
affiliates(and agents, directors, officers, employees, 
representatives, attorneys and advisors of such parent 
companies, divisions, subsidiaries and affiliates), and all 
persons acting by, through, under or in concert with any of 
them.

   (b)The words "Claim" or "Claims" shall refer to any 
charges, complaints, claims, liabilities, obligations, 
promises, agreements, controversies, damages, actions, 
causes of action, suits, rights, demands, costs, losses, 
debts and expenses (including attorneys' fees and costs 
actually incurred)of any nature whatsoever, known or 
unknown, suspected or unsuspected, which you or the Company 
now, in the past or, except as limited by law or regulation 
such as the Age Discrimination in Employment Act (ADEA), in 
the future may have, own or hold against any of the 
Releasees; provided, however, that the word "Claim" or 
"Claims" shall not refer to any charges, complaints, claims, 
liabilities, obligations, promises, agreements, 
controversies, damages, actions, causes of action, suits, 
rights, demands, costs, losses, debts and expenses 
(including attorneys' fees and costs actually incurred) 
arising under [identify severance, employee benefits, stock 
option and other agreements containing duties, rights 
obligations etc. of either party that are to remain 
operative].  Claims released pursuant to this Agreement by 
you and the Company include, but are not limited to, rights 
arising out of alleged violations of any contracts, express 
or implied, any tort, any claim that you failed to perform 
or negligently performed or breached your duties during 
employment at the Company, any legal restrictions on the 
Company's right to terminate employees or any federal, state 
or other governmental statute, regulation, or ordinance, 
including, without limitation: (1) Title VII of the Civil 
Rights Act of l964 (race, color, religion, sex and national 
origin discrimination); (2) 42 U.S.C Sec 1981 
(discrimination); (3) 29 U.S.C. Sec 621-634(age 
discrimination); (4) 29 U.S.C. Sec 206(d)(l) (equal pay); 
(5) 42 U.S.C. Sec 12101, et seq. (disability); (6) the 
California Constitution, Article I, Section 
8(discrimination); (7) the California Fair Employment and 
Housing Act (discrimination, including race, color, national 
origin, ancestry, physical handicap, medical condition, 
marital status, religion, sex or age); (8) California Labor 
Code Section 1102.1 (sexual orientation discrimination); (9) 
Executive Order 11246(race, color, religion, sex and 
national origin discrimination); (10) Executive Order 11141 
(age discrimination); (11) Sec 503 and 504 of the 
Rehabilitation Act of 1973 (handicap discrimination); (12) 
The Worker Adjustment and Retraining Act (WARN Act); (13) 
the California Labor Code (wages, hours, working conditions, 
benefits and other matters); (14) the Fair Labor Standards 
Act (wages, hours, working conditions and other matters); 
the Federal Employee Polygraph Protection Act (prohibits 
employer from requiring employee to take polygraph test as 
condition of employment); and (15) any federal, state or 
other governmental statute, regulation or ordinance which is 
similar to any of the statutes de-scribed in clauses (1) 
through (14).

   THREE:  You and the Company expressly waive and 
relinquish all rights and benefits afforded by any statute 
(including but not limited to Section 1542 of the Civil Code 
of the State of California) which limits the effect of are 
lease with respect to unknown claims.  You and the Company 
do so under-standing and acknowledging the significance of 
the release of unknown claims and the waiver of statutory 
protection against a release of unknown claims(including but 
not limited to Section 1542).  Section 1542 of the Civil 
Code of the State of California states as follows:

 "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE 
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT 
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM 
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE 
DEBTOR."

Thus, notwithstanding the provisions of Section 1542 or of 
any similar statute, and for the purpose of implementing a 
full and complete release and discharge of the Releasees, 
you and the Company expressly acknowledge that this 
Agreement is intended to include in its effect, without 
limitation, all Claims which are known and all Claims which 
you or the Company do not know or suspect to exist in your 
or the Company's favor at the time of execution of this 
Agreement and that this Agreement contemplates the 
extinguishment of all such Claims.

   FOUR:  The parties acknowledge that they might hereafter 
discover facts different from, or in addition to, those they 
now know or believe to be rue with respect to a Claim or 
Claims released herein, and they expressly agree to assume 
the risk of possible discovery of additional or different 
facts, and agree that this Agreement shall be and remain 
effective, in all respects, regardless of such additional or 
different discovered facts.

   FIVE:  You hereby represent and acknowledge that you have 
not filed any Claim of any kind against the Company or 
others released in this Agreement.  You further hereby 
expressly agree never to initiate against the Company or 
others released in this Agreement any administrative 
proceeding, lawsuit or any other legal or equitable 
proceeding of any kind asserting any Claims that are 
released in this Agreement.  

   The Company hereby represents and acknowledges that it 
has not filed any Claim of any kind against you or others 
released in this Agreement. The Company further hereby 
expressly agrees never to initiate against you or others 
released in this Agreement any administrative proceeding, 
lawsuit or any other legal or equitable proceeding of any 
kind asserting any Claims that are released in this 
Agreement.  

   SIX:  You hereby represent and agree that you have not 
assigned or transferred, or attempted to have assigned or 
transfer, to any person or entity, any of the Claims that 
you are releasing in this Agreement.

   The Company hereby represents and agrees that it has not 
assigned or transferred, or attempted to have assigned or 
transfer, to any person or entity, any of the Claims that it 
is releasing in this Agreement.

   SEVEN:  As a further material inducement to the Company 
to enter into this Agreement, you hereby agree to indemnify 
and hold each of the Releasees harmless from all loss, 
costs, damages, or expenses, including without limitation, 
attorneys' fees incurred by Releasees, arising out of any 
breach of this Agreement by you or the fact that any 
representation made in this Agreement by you was false when 
made.  

   EIGHT:  You and the Company represent and acknowledge 
that, in executing this Agreement, neither is relying upon 
any representation or statement not set forth in this 
Agreement or the Severance Agreement.

   NINE:   (a)This Agreement shall not in any way be 
construed as an admission by the Company that it has acted 
wrongfully with respect to you or any other person, or that 
you have any rights whatsoever against the Company, and the 
Company specifically disclaims any liability to or wrongful 
acts against you or any other person, on the part of itself, 
its employees or its agents.  This Agreement shall not in 
any way be construed as an admission by you that you have 
acted wrongfully with respect to the Company, or that you 
failed to perform your duties or negligently performed or 
breached your duties, or that the Company had good cause to 
terminate your employment.   (b)If you are a party or are 
threatened to be made a party to any proceeding by reason of 
the fact that you were an officer [or director] of the 
Company, the Company shall indemnify you against any 
expenses(including reasonable attorney fees provided that 
counsel has been approved by the Company prior to 
retention), judgments, fines, settlements, and other amounts 
actually or reasonably incurred by you in connection with 
that proceeding, provided that you acted in good faith and 
in a manner you reasonably believed to be in the best 
interest of the Company.  The limitations of California 
Corporations Code Section 317 shall apply to this assurance 
of indemnification.    (c) You agree to cooperate with the 
Company and its designated attorneys, representatives and 
agents in connection with any actual or threatened judicial, 
administrative or other legal or equitable proceeding in 
which the Company is or may be become involved.  Upon 
reasonable notice, you agree to meet with and provide to the 
Company or its designated attorneys, representatives or 
agents all information and knowledge you have relating to 
the subject matter of any such proceeding.

   TEN:  This Agreement is made and entered into in 
California. This Agreement shall in all respects be 
interpreted, enforced and governed by and under the laws of 
the State of California.  Any dispute about the validity, 
interpretation, effect or alleged violation of this 
Agreement (an "arbitrable dispute") must be submitted to 
arbitration in [Los Angeles][San Diego], California.  
Arbitration shall take place before an experienced 
employment arbitrator licensed to practice law in such state 
and selected in accordance with the Model Employment 
Arbitration Procedures of the American Arbitration 
Association. Arbitration shall be the exclusive remedy for 
any arbitrable dispute.  The arbitrator in any arbitrable 
dispute shall not have authority to modify or change the 
Agreement in any respect.  You and the Company shall each be 
responsible for payment of one-half the amount of the 
arbitrator's fee(s).  Should any party to this Agreement 
institute any legal action or administrative proceeding 
against the other with respect to any Claim waived by this 
Agreement or pursue any arbitrable dispute by any method 
other than arbitration, the prevailing party shall be 
entitled to recover from the initiating party all damages, 
costs, expenses and attorneys' fees incurred as a result of 
that action. The arbitrator's decision and/or award will be 
fully enforceable and subject to an entry of judgment by the 
Superior Court of the State of California for the County of 
[Los Angeles][San Diego].

   ELEVEN:  Both you and the Company understand that this 
Agreement is final and binding eight days after its 
execution and return.  Should you nevertheless attempt to 
challenge the enforceability of this Agreement as provided 
in Paragraph TEN or, in violation of that Paragraph, through 
litigation, as a further limitation on any right to make 
such a challenge, you shall initially tender to the Company, 
by certified check delivered to the Company, all monies 
received pursuant to Section 5 of the Employment Agreement, 
plus interest, and invite the Company to retain such monies 
and agree with you to cancel this Agreement and void the 
Company's obligations under Section 5 of the Employment 
Agreement.  In the event the Company accepts this offer, the 
Company shall retain such monies and this Agreement shall be 
canceled and the Company shall have no obligation under 
Section 5 of the Employment Agreement.  In the event the 
Company does not accept such offer, the Company shall so 
notify you, and shall place such monies in an interest-
bearing escrow account pending resolution of the dispute 
between you and the Company as to whether or not this 
Agreement and the Company's obligations under Section 5 of 
the Employment Agreement shall be set aside and/or otherwise 
rendered voidable or unenforceable.  Additionally, any 
consulting agreement then in effect between you and The 
Company shall be immediately rescinded with no requirement 
of notice.
   TWELVE:  Any notices required to be given under this 
Agreement shall be delivered either personally or by first 
class United States mail, postage prepaid, addressed to the 
respective parties as follows:

To Company:   [TO COME]

    Attn:  [TO COME]

To You:  
___________________
___________________
___________________

   THIRTEEN:  You understand and acknowledge that you have 
been given a period of 45 days to review and consider this 
Agreement (as well as statistical data on the persons 
eligible for similar benefits) before signing it and may use 
as much of this 45-day period as you wish prior to signing.  
You are encouraged, at your personal expense, to consult 
with an attorney before signing this Agreement.  You 
understand and acknowledge that whether or not you do so is 
your decision.  You may revoke this Agreement within seven 
days of signing it.  If you wish to revoke, the Company's 
Vice President, Human Resources must receive written notice 
from you no later than the close of business on the seventh 
day after you have signed the Agreement.  If revoked, this 
Agreement shall not be effective and enforceable and you 
will not receive payments or benefits under Section 5 of the 
Employment Agreement.

   FOURTEEN:  This Agreement constitutes the entire 
Agreement of the parties hereto and supersedes any and all 
other Agreements (except the Employment Agreement) with 
respect to the subject matter of this Agreement, whether 
written or oral, between you and the Company.  All 
modifications and amendments to this Agreement must be in 
writing and signed by the parties. 

   FIFTEEN:  Each party agrees, without further 
consideration, to sign or cause to be signed, and to deliver 
to the other party, any other documents and to take any 
other action as may be necessary to fulfill the obligations 
under this Agreement.  

   SIXTEEN:  If any provision of this Agreement or the 
application thereof is held invalid, the invalidity shall 
not affect other provisions or applications of the Agreement 
which can be given effect without the invalid provisions or 
application; and to this end the provisions of this 
Agreement are declared to be severable.

   SEVENTEEN:  This Agreement may be executed in 
counterparts.

I have read the foregoing General Release and I accept and 
agree to the provisions it contains and hereby execute it 
voluntarily and with full under-standing of its 
consequences.  I am aware it includes a release of all known 
or unknown claims.

DATED:____________________  
                               _____________________________   
DATED:____________________  

                               _____________________________    

   You acknowledge that you first received this Agreement on 
[date].

                                      
___________________________

EX-10

Exhibit 10.4

  EMPLOYMENT AGREEMENT


  EMPLOYMENT AGREEMENT ("Agreement") made and entered 
into as of the 12th day of October, 1996, by and 
between Mineral Energy Company (the
"Company"), a California corporation, and Donald E. 
Felsinger (the "Executive");

  WHEREAS, the Executive is currently serving as 
President and Chief Executive Officer of San Diego Gas 
& Electric Company and Executive Vice President of 
Enova, a California corporation ("Enova"), and the 
Company desires to secure the continued employment of 
the Executive in accordance herewith;

  WHEREAS, pursuant to the Agreement and Plan of Merger 
(the "Merger Agreement"), dated as of October 12, 1996, 
among, inter alia, Enova, Pacific Enterprises, a 
California corporation ("Pacific Enterprises") and the 
Company, the parties thereto have agreed to a merger 
(the "Merger") pursuant to the terms thereof; 

  WHEREAS, the Executive is willing to commit himself 
to be employed by the Company on the terms and 
conditions herein set forth and thus to forego 
opportunities elsewhere; and

  WHEREAS, the parties desire to enter into this 
Agreement, as of the Effective Date (as hereinafter 
defined), setting forth the terms and conditions for 
the employment relationship of the Executive with the 
Company during the Employment Period (as hereinafter 
defined).

  NOW, THEREFORE, IN CONSIDERATION of the mutual 
premises, covenants and agreements set forth below, it 
is hereby agreed as follows:

 1.  Employment and Term.

  (a)  Employment.  The Company agrees to employ the 
Executive, and the Executive agrees to be employed by 
the Company, in accordance with the terms and 
provisions of this Agreement during the term thereof 
(as described below).

  (b)  Term.  The term of the Executive's employment 
under this Agreement shall commence (the "Effective 
Date") as of the closing date (the "Closing Date") of 
the Merger as described in the Merger Agreement and 
shall continue until the earlier of the Executive's 
Mandatory Retirement Age (as defined herein) or the 
fifth anniversary of the Effective Date (such term 
being referred to hereinafter as the "Employment 
Period"); provided, however, that commencing on the 
fourth anniversary of the Effective Date (and each 
anniversary of the Effective Date thereafter), the term 
of this Agreement shall automatically be extended for 
one additional year, unless, prior to such date, the 
Company or the Executive shall give written notice to 
the other party that it or he, as the case may be, does 
not wish to so extend this Agreement; and further 
provided, however, that if the Merger Agreement is 
terminated, then, at the time of such termination, this 
Agreement shall be deemed cancelled and of no force or 
effect and the Executive shall continue to be subject 
to such agreements and arrangements that were in effect 
prior to the Closing Date of the Merger.  As a 
condition to the Merger, the parties hereto agree that 
the Company shall be responsible for all of the 
premises, covenants and agreements set forth in this 
Agreement.

  (c)Mandatory Retirement.  In no event shall the term 
of the Executive's employment hereunder extend beyond 
the end of the month in which the Executive's 65th 
birthday occurs (the "Mandatory Retirement Age").

 2.  Duties and Powers of Executive.

  (a)  Position. During the period commencing on the 
Effective Date the Executive shall serve as President 
and Principal Executive Officer of the businesses of 
the Company and its subsidiaries that are not 
economically regulated by the California Public 
Utilities Commission (the "Unregulated Subsidiaries") 
with such authority, duties and responsibilities with 
respect to such position as set forth in subsection (b) 
hereof.  In this capacity, the Executive shall  report 
to the Office of the Chairman or if the Office of the 
Chairman does not exist, the Chief Executive Officer of 
the Company.  The titles, authority, duties and 
responsibilities set forth in subsection (b) hereof may 
be changed from time to time but only with the mutual 
written agreement of the Executive and the Company.

  (b)Duties of the President and Principal Executive 
Officer.  The duties of the President and Principal 
Executive Officer of the Company's Unregulated 
Subsidiaries shall include but not be limited to 
directing the overall business, affairs and operations 
of the Company's Unregulated Subsidiaries, through the 
officers of such subsidiaries, all of whom shall report 
directly or indirectly to the Executive.

  (c)  Attention.  During the Employment Period, and 
excluding any periods of vacation and sick leave to 
which the Executive is entitled, the Executive shall 
devote full attention and time during normal business 
hours to the business and affairs of the Company and, 
to the extent necessary to discharge the 
responsibilities assigned to the Executive under this 
Agreement, use the Executive's best efforts to carry 
out such responsibilities faithfully and efficiently.  
It shall not be considered a violation of the foregoing 
for the Executive to serve on corporate, industry, 
civic or charitable boards or committees, so long as 
such activities do not interfere with the performance 
of the Executive's responsibilities as an employee of 
the Company in accordance with this Agreement.

 3.  Compensation.

  It is the Board's intention to provide the Executive 
with compensation opportunities that, in total, are at 
a level that is consistent with that provided by 
comparable companies to executives of similar levels of 
responsibility, expertise and corporate and individual 
performance as determined by the compensation committee 
of the Board.  In this regard, the Executive shall 
receive the following compensation for his services 
hereunder to the Company:

  (a)  Base Salary.  During the Employment Period, the 
Executive's annual base salary ("Annual Base Salary") 
shall in no event be no less than $440,000 and shall be 
payable in accordance with the Company's general 
payroll practices. Subject to Section 4(d)(ii), the 
Board in its discretion may from time to time direct 
such upward adjustments in the Executive's Annual Base 
Salary as the Board deems to be necessary or desirable, 
including, without limitation, adjustments in order to 
reflect increases in the cost of living and the 
Executive's performance.  Any increase in Annual Base 
Salary shall not serve to limit or reduce any other 
obligation of the Company under this Agreement.

  (b)  Incentive Compensation.  Subject to Section 
4(d)(ii), during the Employment Period, the Executive 
shall participate in annual incentive compensation 
plans and long-term incentive compensation plans of the 
Company and, to the extent appropriate, the Company's 
Subsidiaries (which long-term incentive compensation 
plans may include plans offering stock options, 
restricted stock and other long-term incentive 
compensation and all such annual and long-term plans to 
be hereinafter referred to as the "Incentive 
Compensation Plans") and will be granted awards 
thereunder providing him with the opportunity to earn, 
on a year-by-year basis, annual and long-term incentive 
compensation (the "Incentive Compensation Awards")at 
least equal (in terms of target, maximum and minimum 
awards expressed as a percentage of Annual Base Salary) 
to the Executive's opportunities that were in effect 
prior to the Effective Date.  Any equity awards granted 
to the Executive may be granted, at the Executive's 
election, to trusts established for the benefit of 
members of the Executive's family.  With respect to 
incentive compensation awards granted prior to the 
Effective Date, the Executive shall be entitled to 
retain such awards in accordance with their terms, 
which shall be appropriately adjusted as a result of 
the Merger. 
  (c)  Retirement and Welfare Benefit Plans.  In 
addition to the benefits provided under Section 3(b), 
during the Employment Period and so long as the 
Executive is employed by the Company, he shall be 
eligible to participate in all other savings, 
retirement and welfare plans, practices, policies and 
programs applicable generally to employees and/or 
senior executive officers of the Company and its 
domestic subsidiaries, except with respect to any 
benefits under any plan, practice, policy or program to 
which the Executive has waived his rights in writing.  
To the extent that benefits payable or provided to the 
Executive under such plans are materially less 
favorable on a benefit by benefit basis than the 
benefits that would have been payable or provided to 
the Executive under comparable Enova tax-qualified 
retirement plans, executive retirement plans, split 
dollar and other life insurance arrangements in which 
the Executive was a participant (based on the terms of 
such plans as of the Effective Date), the Executive 
shall be entitled to benefits pursuant to the terms of 
this Agreement equal to the excess of the benefits 
provided under the applicable Enova plans over the 
benefits provided under the comparable Company plans.  
  (d)  Expenses.  The Company shall reimburse the 
Executive for all expenses, including those for travel 
and entertainment, properly incurred by him in the 
performance of his duties hereunder in accordance with 
policies established from time to time by the Board.
  (e)  Fringe Benefits and Perquisites.  During the 
Employment Period and so long as the Executive is 
employed by the Company, he shall be entitled to 
receive fringe benefits and perquisites in accordance 
with the plans, practices, pro-grams and policies of 
the Company and, to the extent appropriate, the 
Company's subsidiaries from time to time in effect, 
commensurate with his position.

 4.  Termination of Employment.

  (a)  Death or Disability.  The Executive's employment 
shall terminate upon the Executive's death or, at the 
election of the Board or the Executive, by reason of 
Disability (as herein defined) during the Employment 
Period; provided, however, that the Board may not 
terminate the Executive's employment hereunder by 
reason of Disability unless at the time of such 
termination there is no reasonable expectation that the 
Executive will return to work within the next ninety 
(90) day period.  For purposes of this Agreement, 
disability ("Disability") shall have the same meaning 
as set forth in the Enova long-term disability plan or 
its successor.
  (b)  By the Company for Cause.  The Company may 
terminate the Executive's employment during the 
Employment Period for Cause (as herein defined). For 
purposes of this Agreement, "Cause" shall mean (i) the 
willful and continued  failure by the Executive to 
substantially perform the Executive's duties with the 
Company (other than any such failure resulting from the 
Executive's incapacity due to physical or mental 
illness or any such actual or anticipated failure after 
the issuance of a Notice of Termination for Good Reason 
by the Executive pursuant to Section 4(d))or (ii) the 
Executive's commission of one or more acts of moral 
turpitude that constitute a violation of applicable law 
(including but not limited to a felony) which have or 
result in an adverse effect on the Company, monetarily 
or otherwise or one or more significant acts of 
dishonesty .  For purposes of clause (i) of this 
definition, no act, or failure to act, on the 
Executive's part shall be deemed "willful" unless done, 
or omitted to be done, by the Executive not in good 
faith and without reasonable belief that the 
Executive's act, or failure to act, was in the best 
interest of the Company.  

  (c)  By the Company without Cause.  Notwithstanding 
any other provision of this Agreement, the Company may 
terminate the Executive's employment other than by a 
termination for Cause during the Employment Period, but 
only upon the affirmative vote of three-fourths (3/4) 
of the membership of the Board.

  (d)  By the Executive for Good Reason.  The Executive 
may terminate his employment during the Employment 
Period for Good Reason (as herein defined). For 
purposes of this Agreement, "Good Reason" shall mean 
the occurrence without the written consent of the 
Executive of any one of the following acts by the 
Company, or failures by the Company to act, unless such 
act or failure to act is corrected prior to the Date of 
Termination (as hereinafter defined) specified in the 
Notice of Termination (as hereinafter defined) given in 
respect thereof:

    (i)  an adverse change in the Executive's title, 
authority, duties, responsibilities or reporting lines 
as specified in Sections 2(a) and 2(b) of this 
Agreement;

    (ii)  a reduction by the Company in (A) the 
Executive's Annual Base Salary as in effect on the date 
hereof or as the same may be in-creased from time to 
time or (B) the Executive's aggregate annualized 
compensation and benefits opportunities, except, in the 
case of both (A) and (B), for across-the-board 
reductions similarly affecting all executives (both of 
the Company and of any Person (as hereinafter defined) 
then in control of the Company) whose compensation is 
directly determined by the compensation committee of 
the Board (and the compensation committee of the board 
of directors of any Person then in control of the 
Company);  provided that, the exception for across-the-
board reductions shall not apply following a Change in 
Control (as hereinafter defined); 

 (iii)  the relocation of the Executive's principal 
place of employment to a location away from the 
Company's headquarters or a substantial increase in the 
Executive's business travel obligations outside of the 
Southern California area as of the Effective Date, 
other than any such increase that (A) arises in 
connection with extraordinary business activities of 
the Company and (B) is understood not to be part of the 
Executive's regular duties with the Company; (iv)  the 
failure by the Company to pay to the Executive any 
portion of the Executive's current compensation and 
benefits or to pay to the Executive any portion of an 
installment of deferred compensation under any deferred 
compensation program of the Company within thirty (30) 
days of the date such compensation is due;

 (v)  any purported termination of the Executive's 
employment that is not effected pursuant to a Notice of 
Termination satisfying the requirements of Section 
4(f); for purposes of this Agreement, no such purported 
termination shall be effective;

 (vi)  the failure by the Company to obtain a 
satisfactory agreement from any successor of the 
Company requiring such successor to assume and agree to 
perform the Company's obligations under this Agreement, 
as contemplated in Section 11; or

 (vii)  the failure by the Company to comply with any 
material provision of this Agreement.

 Following a Change in Control (as hereinafter 
defined), the Executive's determination that an act or 
failure to act constitutes Good Reason shall be 
presumed to be valid unless such determination is 
deemed to be unreasonable by an arbitrator. The 
Executive's right to terminate the Executive's 
employment for Good Reason shall not be affected by the 
Executive's incapacity due to physical or mental 
illness.  The Executive's continued employment shall 
not constitute consent to, or a waiver of rights with 
respect to, any act or failure to act constituting Good 
Reason hereunder.

 (e)Change in Control.  

 Change in Control shall mean the occurrence of any of 
the following events:

 (i)Any Person is or becomes the Beneficial Owner, 
directly or indirectly, of securities of the Company 
(not including in the securities beneficially owned by 
such Person any securities acquired directly from the 
Company or its affiliates other than in connection with 
the acquisition by the Company or its affiliates of a 
business) representing twenty percent(20%) or more of 
the combined voting power of the Company's then 
outstanding securities; or

 (ii)  The following individuals cease for any reason 
to constitute a majority of the number of directors 
then serving: individuals who, on the date hereof, 
constitute the Board and any new director (other than a 
director whose initial assumption of office is in 
connection with an actual or threatened election 
contest, including but not limited to a consent 
solicitation, relating to the election of directors of 
the Company) whose appointment or election by the Board 
or nomination for election by the Company's share-
holders was approved or recommended by a vote of at 
least two-thirds (2/3) of the directors then still in 
office who either were directors on the date hereof or 
whose appointment, election or nomination for election 
was previously so approved or recommended; or 

 (iii)  There is consummated a merger or consolidation 
of the Company or any direct or indirect subsidiary of 
the Company with any other corporation, other than (A) 
a merger or consolidation which would result in the 
voting securities of the Company outstanding 
immediately prior to such merger or consolidation 
continuing to represent (either by remaining 
outstanding or by being converted into voting 
securities of the surviving entity or any parent 
thereof), in combination with the ownership of any 
trustee or other fiduciary holding securities under an 
employee benefit plan of the Company or any subsidiary 
of the Company, at least sixty percent (60%) of the 
combined voting power of the securities of the Company 
or such surviving entity or any parent thereof 
outstanding immediately after such merger or 
consolidation, or(B) a merger or consolidation effected 
to implement a recapitalization of the Company (or 
similar transaction) in which no Person is or becomes 
the beneficial owner, directly or indirectly, of 
securities of the Company (not including in the 
securities beneficially owned by such Person any 
securities acquired directly from the Company or its 
affiliates other than in connection with the 
acquisition by the Company or its affiliates of a 
business) representing twenty percent (20%) or more of 
the combined voting power of the Company's then 
outstanding securities; or 
 (iv)  The shareholders of the Company approve a plan 
of complete liquidation or dissolution of the Company 
or there is consummated an agreement for the sale or 
disposition by the Company of all or substantially all 
of the Company's assets, other than a sale or 
disposition by the Company of all or substantially all 
of the Company's assets to an entity, at least sixty 
percent (60%) of the combined voting power of the 
voting securities of which are owned by shareholders of 
the Company in substantially the same proportions as 
their ownership of the Company immediately prior to 
such sale.

 "Person" shall have the meaning given in Section 
3(a)(9) of the Securities Exchange Act of 1934 (the 
"Exchange Act"), as modified and used in Sections 13(d) 
and 14(d) thereof, except that such term shall not 
include (i) the Company or any of its subsidiaries, 
(ii) a trustee or other fiduciary holding securities 
under an employee benefit plan of the Company or any of 
its affiliates, (iii) an underwriter temporarily 
holding securities pursuant to an offering of such 
securities,(iv) a corporation owned, directly or 
indirectly, by the shareholders of the Company in 
substantially the same proportions as their ownership 
of stock of the Company, or(v) a person or group as 
used in Rule 13d-1(b) under the Exchange Act.

 "Beneficial Owner" shall have the meaning set forth in 
Rule 13d-3 under the Exchange Act.

 Notwithstanding the foregoing, any event or 
transaction which would otherwise constitute a Change 
in Control (a "Transaction") shall not constitute a 
Change in Control for purposes of this Agreement if, in 
connection with the Transaction, the Executive 
participates as an equity investor in the acquiring 
entity or any of its affiliates (the "Acquiror").  For 
purposes of the preceding sentence, the Executive shall 
not be deemed to have participated as an equity 
investor in the Acquiror by virtue of (i) obtaining 
beneficial ownership of any equity interest in the 
Acquiror as a result of the grant to the Executive of 
an incentive compensation award under one or more 
incentive plans of the Acquiror (including, but not 
limited to, the conversion in connection with the 
Transaction of incentive compensation awards of the 
Company into incentive compensation awards of the 
Acquiror), on terms and conditions substantially 
equivalent to those applicable to other executives of 
the Company immediately prior to the Transaction, after 
taking into account normal differences attributable to 
job responsibilities, title and the like, (ii) 
obtaining beneficial ownership of any equity interest 
in the Acquiror on terms and conditions substantially 
equivalent to those obtained in the Transaction by all 
other shareholders of the Company, or (iii) obtaining 
beneficial ownership of any equity interest in the 
Acquiror in a manner unrelated to a Transaction.

 (f)  Notice of Termination.  During the Employment 
Period, any purported termination of the Executive's 
employment (other than by reason of death)shall be 
communicated by written Notice of Termination from one 
party hereto to the other party hereto in accordance 
with Section 12(b).  For purposes of this Agreement, a 
"Notice of Termination" shall mean a notice that shall 
indicate the specific termination provision in this 
Agreement relied upon, if any, and shall set forth in 
reasonable detail the facts and circumstances claimed 
to provide a basis for termination of the Executive's 
employment under the provision so indicated.  Further, 
a Notice of Termination for Cause is required to 
include a copy of a resolution duly adopted by the 
affirmative vote of not less than three-fourths (3/4) 
of the entire membership of the Board at a meeting of 
the Board that was called and held no more than ninety 
(90)days after the date the Board had knowledge of the 
most recent act or omission giving rise to such breach 
for the purpose of considering such termination (after 
reasonable notice to the Executive and an opportunity 
for the Executive, together with the Executive's 
counsel, to be heard before the Board and, if possible, 
to cure the breach that was the basis for the Notice of 
Termination for Cause) finding that, in the good faith 
opinion of the Board, the Executive was guilty of 
conduct set forth in clause (i)or (ii) of the 
definition of Cause herein, and specifying the 
particulars thereof in detail.  Unless the Board 
determines otherwise, a Notice of Termination by the 
Executive alleging a termination for Good Reason must 
be made within 180 days of the act or failure to act 
that the Executive alleges to constitute Good Reason.

 (g)  Date of Termination.  "Date of Termination," with 
respect to any purported termination of the Executive's 
employment during the Employment Period, shall mean the 
date specified in the Notice of Termination (which, in 
the case of a termination by the Company, shall not be 
less than thirty (30) days for reasons other than cause 
and, in the case of a termination by the Executive, 
shall not be less than fifteen (15) days nor more than 
sixty (60) days) from the date such Notice of 
Termination is given. 

5.  Obligations of the Company Upon Termination.

 (a)  Termination Other Than for Cause, Death or 
Disability.  During the Employment Period, if the 
Company shall terminate the Executive's 
employment(other than for Cause, death or Disability) 
or the Executive shall terminate his employment for 
Good Reason (termination in any such case being 
referred to as "Termination") the Company shall pay to 
the Executive amounts, and provide the Executive with 
the benefits, described in this Section 5 (hereinafter 
referred to as the "Severance Payments").  Subject to 
Section 5(g), the amounts specified in this Section 
5(a) shall be paid within thirty (30) days after the 
Date of Termination.

 (i)  Lump Sum Payment.  In lieu of any further 
payments of Annual Base Salary or annual Incentive 
Compensation Awards to the Executive for periods 
subsequent to the Date of Termination, the Company 
shall pay to the Executive a lump sum amount in cash 
equal to the product of (X) the sum of (A) the 
Executive's Annual Base Salary and (B) the greater of 
the Executive's target bonus for the year of 
termination or the average of the three(3) years' 
highest gross bonus awards, not necessarily 
consecutive, paid by the Company (or its predecessor) 
to the Executive in the five (5) years preceding the 
year of termination and (Y) the number of years 
remaining in the Employment Period (including 
fractional years) but in no event less than two 
(2),provided, however, that in the event of a 
Termination following a Change in Control such 
multiplier shall not be less than three (3).

 (ii)  Accrued Obligations.  The Company shall pay the 
Executive a lump sum amount in cash equal to the sum of 
(A) the Executive's Annual Base Salary through the Date 
of Termination to the extent not thereto-fore paid, (B) 
an amount equivalent to any annual Incentive 
Compensation Awards earned with respect to fiscal years 
ended prior to the year that includes the Date of 
Termination to the extent not theretofore paid, and (C) 
an amount equivalent to the target amount payable under 
any annual Incentive Compensation Awards for the fiscal 
year that includes the Date of Termination or, if 
greater, the average of the three (3) years' highest 
gross bonus awards, not necessarily consecutive, paid 
by the Company (or its predecessor) to the Executive in 
the five (5) years preceding the year of Termination 
multiplied by a fraction the numerator of which shall 
be the number of days from the beginning of such fiscal 
year to and including the Date of Termination and the 
denominator of which shall be 365, in each case to the 
extent not theretofore paid.  (The amounts specified in 
clauses (A), (B) and (C) shall be hereinafter referred 
to as the "Accrued Obligations.")

 (iii)  Deferred Compensation.  In the event of a 
Termination following a Change in Control, the Company 
shall pay the Executive a lump sum payment in an amount 
equal to any compensation previously deferred by the 
Executive (together with any accrued interest or 
earnings thereon). 

 (iv)  Pension Supplement.  The Company shall provide 
the Executive with such additional years of age and 
service credit for purposes of the calculation of 
retirement benefits under the Enova Supplemental 
Executive Retirement Plan (the "Enova SERP") as if he 
had remained employed for the remainder of the 
Employment Period, but in no event less than two (2) 
years, provided, however, that (A) if the Executive has 
not yet then attained age 53 at the time the credit for 
age and service is given, he will be credited with the 
additional amount of age credit as if he had attained 
age 55 and (B) there shall be no reduction under the 
Enova SERP for early retirement as set forth in 
Paragraph 4.a.ii of the Enova SERP, except for the 
early retirement reduction factor as determined in 
accordance with the table in Section 5.4 of the San 
Diego Gas & Electric Company Pension Plan, as adopted 
by Enova (the "Pension Plan"), which factors shall be 
applied to the Executive's age and years of service 
after he is credited with the additional age and 
service described above; and provided, further, 
however, that in the event of a Termination following a 
Change in Control, the Company shall pay the Executive 
a lump sum payment in an amount equal to the benefits 
under the Enova SERP as described in paragraph 2.c of 
the Enova SERP, less the value calculated consistently 
with paragraph 4.b of the SERP of the Executive's 
entitlement under the Pension Plan, such payment to be 
calculated and paid without regard to the limitation 
described in the Enova SERP relating to Section 280G of 
the Code and with such additional years of age and 
service credit as if he had remained employed for the 
remainder of the Employment Period, but in no event 
less than two (2)years, provided that if he has not 
then attained age 53 at the time the credit forage and 
service is given, he will be credited with the 
additional amount of age credit as if he had attained 
age 55; and in either case the Executive's termination 
shall be a "Qualifying Termination" as defined in the 
Split Dollar Life Insurance Agreement entered into 
between the Executive and Enova, and where necessary 
the Company shall take such steps, including the 
payment of additional premiums, as may be necessary so 
that the cash value of the policy as of the Date of 
Termination shall reflect the additional age and 
service credit.

 (v)  Accelerated Vesting and Payment of Long-Term 
Incentive Awards.  All equity-based long-term Incentive 
Compensation Awards held by the Executive under any 
long- term Incentive Compensation Plan maintained by 
the Company or any affiliate shall immediately vest and 
become exercisable as of the Date of Termination, to be 
exercised in accordance with the terms of the 
applicable plan and award agreement; provided, however, 
that any such awards granted on or after the Effective 
Date shall remain outstanding and exercisable until the 
earlier of (A) eighteen (18) months following the Date 
of Termination or (B) the expiration of the original 
term of such award (it being understood that all awards 
granted prior to the Effective Date shall remain 
outstanding and exercisable for a period that is no 
less than that provided for in the applicable agreement 
in effect as of the date of grant), and the Company 
shall pay to the Executive, with respect to all cash-
based, long-term Incentive Compensation Awards made to 
the Executive that are outstanding under any long-term 
Incentive Compensation Plan maintained by the Company 
or any affiliate an amount equal to the target amount 
payable under such long-term Incentive Compensation 
Awards multiplied by a fraction, the numerator of which 
shall be the number of days from the beginning of the 
award cycle to and including the Date of Termination, 
and the denominator of which shall be the number of 
days in the cycle as originally granted.

 (vi)  Continuation of Welfare Benefits.  For (A) the 
remainder of the Employment Period, but in no event 
less than a period of two (2) years or (B) until the 
Executive is eligible for retiree medical benefits, 
whichever is longer, immediately following the Date of 
Termination, the Company shall arrange to provide the 
Executive and his dependents with life, disability, 
accident and health insurance benefits substantially 
similar to those provided to the Executive and his 
dependents immediately prior to the Date of 
Termination, provided, however, that if the Executive 
becomes employed with another employer and is eligible 
to receive life, disability, accident and health 
insurance benefits under another employer-provided 
plan, the benefits under the Company's plans shall be 
secondary to those provided under such other plan 
during such applicable period of eligibility, and 
further provided, however, that in the event of a 
Termination following a Change in Control such period 
shall not be less than the number of years until the 
Executive reaches normal retirement age as defined 
under the Enova tax-qualified plans.

 (b)  Termination by the Company for Cause or by the 
Executive Other than for Good Reason.  Subject to the 
provisions of Section 6 of this Agreement, if the 
Executive's employment shall be terminated for Cause 
during the Employment Period, or if the Executive 
terminates employment during the Employment Period 
other than for Good Reason, the Company shall have no 
further obligations to The Executive under this 
Agreement other than the Accrued Obligations. 

 (c)  Termination due to Death or Disability.  If the 
Executive's employment shall terminate by reason of 
death or Disability, the Company shall pay The 
Executive or his estate, as the case may be, the 
Accrued Obligations and, solely in the case of 
Termination by reason of Disability, the Pension 
Supplement.  Such payments shall be in addition to 
those rights and benefits to which the Executive or his 
estate may be entitled under the relevant Company plans 
or programs.

 (d)  Code Section 280G.

 (i)  Notwithstanding any other provisions of this 
Agreement, in the event that any payment or benefit 
received or to be received by the Executive (whether 
pursuant to the terms of this Agreement or any other 
plan, arrangement or agreement with (A) the Company, 
(B) any Person (as defined in Section 4(e)) whose 
actions result in a Change in Control or (C) any Person 
affiliated with the Company or such Person) (all such 
payments and benefits, including the Severance 
Payments, being hereinafter called "Total 
Payments")would not be deductible (in whole or part) by 
the Company, an affiliate or Person making such payment 
or providing such benefit as a result of section 280G 
of the Code, then, to the extent necessary to make such 
portion of the Total Payments deductible (and after 
taking into account any reduction in the Total Payments 
provided by reason of section 280G of the Code in such 
other plan, arrangement or agreement), the cash 
Severance Payments shall first be reduced (if 
necessary, to zero), and all other Severance Payments 
shall thereafter be reduced (if necessary, to zero); 
provided, however, that the Executive may elect to have 
the noncash Severance Payments reduced (or eliminated) 
prior to any reduction of the cash Severance Payments.

 (ii)  For purposes of this limitation, (A) no portion 
of the Total Payments the receipt or enjoyment of which 
the Executive shall have waived at such time and in 
such manner as not to constitute a "payment" within the 
meaning of section 280G(b) of the Code shall be taken 
into account, (B) no portion of the Total Payments 
shall be taken into account which, in the opinion  of 
tax counsel ("Tax Counsel") reasonably acceptable to 
the Executive and selected by the Company's accounting 
firm which (or, in the case of a payment following a 
Change in Control the accounting firm that was, 
immediately prior to the Change in Control, the 
Company's independent auditor) (the "Auditor"),does not 
constitute a "parachute payment" within the meaning of 
section 280G(b)(2) of the Code, including by reason of 
section 280G(b)(4)(A) of the Code, (C) the Severance 
Payments shall be reduced only to the extent necessary 
so that the Total Payments (other than those referred 
to in clause (A) or(B)) in their entirety constitute 
reasonable compensation for services actually rendered 
within the meaning of section 280G(b)(4)(B) of the Code 
or are otherwise not subject to disallowance as 
deductions by reason of section 280G of the Code, in 
the opinion of Tax Counsel, and (D) the value of any 
noncash benefit or any deferred payment or benefit 
included in the Total Payments shall be determined by 
the Auditor in accordance with the principles of 
sections 280G(d)(3) and (4) of the Code.

  (e)  Consulting and Non-Competition. If the Total 
Payments are subject to reduction in accordance with 
the above provisions of Section 5(d), the Executive 
shall have the option, to be exercised within ten (10) 
days after receipt of notice of such reduction from the 
Company, to enter into a consulting and non-competition 
agreement with the Company (the "Consulting and Non-
Competition Agreement"), which shall (1) provide the 
Executive with payments and benefits, payable over the 
term of the agreement, the present value of which in 
the aggregate is equal to or greater than the present 
value (determined by applying a discount rate equal to 
the interest rate provided in section 1274(b)(2)(B) of 
the Code) of the balance of the payments and benefits 
otherwise payable to the Executive without regard to 
the provisions of Section 5(d), (2) require the 
Executive to make his services available to the Company 
for no more than twenty (20) hours per month and (3) 
last for a period of not more than two (2) years 
(unless the Executive consents to a longer period).
  (f)  Gross-Up Payment.  In the event that the 
Executive receives a notice from the Internal Revenue 
Service to the effect that the amounts payable under 
the Consulting and Non-Competition Agreement would be 
subject (in whole or part)to the tax (the "Excise Tax") 
imposed under section 4999 of the Code, within 
thirty(30) days after the date the Chairman of the 
Board receives a copy of such notice the Company shall 
pay to the Executive such additional amounts (the 
"Gross-Up Payment") such that the net amount retained 
by the Executive, after deduction of any Excise Tax on 
the Total Payments and any federal, state and local 
income and employment taxes and Excise Tax upon the 
Gross-Up Payment, shall be equal to the Total Payments. 
For purposes of determining the amount of the Gross-Up 
Payment, the Executive shall be deemed to pay federal 
income tax at the highest marginal rate of federal 
income taxation in the calendar year in which the 
Gross-Up Payment is to be made and state and local 
income taxes at the highest marginal rate of taxation 
in the state and locality of the Executive's residence 
on the date on which the Gross-Up Payment is calculated 
for purposes of this section, net of the maximum 
reduction in federal income taxes which could be 
obtained from deduction of such state and local taxes.  
In the event that the Excise Tax is subsequently 
determined to be less than the amount taken into 
account hereunder, the Executive shall repay to the 
Company, at the time that the amount of such reduction 
in Excise Tax is finally determined, the portion of the 
Gross-Up Payment attributable to such reduction (plus 
that portion of the Gross-Up Payment attributable to 
the Excise Tax and federal, state and local income tax 
imposed on the Gross-Up Payment being repaid by the 
Executive to the extent that such repayment results in 
a reduction in Excise Tax and/or a federal, state or 
local income tax deduction) plus interest on the amount 
of such repayment at the rate provided in section 
1274(b)(2)(B) of the Code.  In the event that the 
Excise Taxis determined to exceed the amount taken into 
account hereunder (including by reason of any payment 
the existence or amount of which cannot be determined 
at the time of the Gross-Up Payment), the Company shall 
make an additional Gross-Up Payment in respect of such 
excess (plus any interest, penalties or additions 
payable by the Executive with respect to such excess) 
at the time that the amount of such excess is finally 
determined.  The Executive and the Company shall each 
reasonably cooperate with the other in connection with 
any administrative or judicial proceedings concerning 
the existence or amount of liability for Excise Tax 
with respect to the Total Payments. 
  (g)  Release.  Notwithstanding anything herein to the 
contrary, the Company's obligation to make the payments 
provided for in this Section 5 is expressly made 
subject to and conditioned upon (i) the Executive's 
prior execution of a release substantially in the form 
attached hereto as Exhibit A within forty-five (45)days 
after the applicable Date of Termination and (ii) the 
Executive's non-revocation of such release in 
accordance with the terms thereof.

 6.  Nonexclusivity of Rights.  

  Nothing in this Agreement shall prevent or limit the 
Executive's continuing or future participation in any 
benefit, plan, program, policy or practice provided by 
the Company and for which the Executive may qualify 
(except with respect to any benefit to which the 
Executive has waived his rights in writing), nor shall 
anything herein limit or otherwise affect such rights 
as the Executive may have under any other contract or 
agreement entered into after the Effective Date with 
the Company.  Amounts which are vested benefits or 
which the Executive is otherwise entitled to receive 
under any benefit, plan, policy, practice or program 
of, or any contract or agreement entered into with, the 
Company shall be payable in accordance with such 
benefit, plan, policy, practice or program or contract 
or agreement except as explicitly modified by this 
Agreement.
  7.  Full Settlement; Mitigation.

  The Company's obligation to make the payments 
provided for in this Agreement and otherwise to perform 
its obligations hereunder shall not be affected by any 
set-off, counterclaim, recoupment, defense or other 
claim, right or action which the Company may have 
against the Executive or others, provided that nothing 
herein shall preclude the Company from separately 
pursuing recovery from the Executive based on any such 
claim.  In no event shall the Executive be obligated to 
seek other employment or take any other action by way 
of mitigation of the amounts (including amounts for 
damages for breach) payable to the Executive under any 
of the provisions of this Agreement and such amounts 
shall not be reduced whether or not the Executive 
obtains other employment.  

 8.  Arbitration.  

Any dispute about the validity, interpretation, effect 
or alleged violation of this Agreement (an "arbitrable 
dispute") must be submitted to confidential arbitration 
in San Diego, California.  Arbitration shall take place 
before an experienced employment arbitrator licensed to 
practice law in such state and selected in accordance 
with the Model Employment Arbitration Procedures of the 
American Arbitration Association.  Arbitration shall be 
the exclusive remedy of any arbitrable dispute. Should 
any party to this Agreement pursue any arbitrable 
dispute by any method other than arbitration, the other 
party shall be entitled to recover from the party 
initiating the use of such method all damages, costs, 
expenses and attorneys' fees incurred as a result of 
the use of such method.  Notwithstanding anything 
herein to the contrary, nothing in this Agreement shall 
purport to waive or in any way limit the right of any 
party to seek to enforce any judgment or decision on an 
arbitrable dispute in a court of competent 
jurisdiction.

 9.  Confidentiality.  

  The Executive acknowledges that in the course of his 
employment with the Company he has acquired non-public 
privileged or confidential information and trade 
secrets concerning the operations, future plans and 
methods of doing business("Proprietary Information") of 
the Company, its subsidiaries and affiliates; and the 
Executive agrees that it would be extremely damaging to 
the Company, its subsidiaries and affiliates if such 
Proprietary Information were disclosed to a competitor 
of the Company, its subsidiaries and affiliates or to 
any other person or corporation.  The Executive 
understands and agrees that all Proprietary Information 
has been divulged to the Executive in confidence and 
further understands and agrees to keep all Proprietary 
Information secret and confidential (except for such 
information which is or becomes publicly available 
other than as a result of a breach by the Executive of 
this provision) without limitation in time.  In view of 
the nature of the Executive's employment and the 
Proprietary Information the Executive has acquired 
during the course of such employment, the Executive 
likewise agrees that the Company, its subsidiaries and 
affiliates would be irreparably harmed by any 
disclosure of Proprietary Information in violation of 
the terms of this paragraph and that the Company, its 
subsidiaries and affiliates shall therefore be entitled 
to preliminary and/or permanent injunctive relief 
prohibiting the Executive from engaging in any activity 
or threatened activity in violation of the terms of 
this paragraph and to any other relief available to 
them.  Inquiries regarding whether specific information 
constitutes Proprietary Information shall be directed 
to the Company's Senior Vice President, Public 
Policy(or, if such position is vacant, the Company's 
Chief Executive Officer), provided, that the Company 
shall not unreasonably classify information as 
Proprietary Information.

 10.  Non-Solicitation of Employees.  

  The Executive recognizes that he possesses and will 
possess confidential information about other employees 
of the Company, its subsidiaries and affiliates 
relating to their education, experience, skills, 
abilities, compensation and benefits, and inter-
personal relationships with customers of the Company, 
its subsidiaries and affiliates.  The Executive 
recognizes that the information he possesses and will 
possess about these other employees is not generally 
known, is of substantial value to the Company, its 
subsidiaries and affiliates in developing their 
business and in securing and retaining customers, and 
has been and will be acquired by him because of his 
business position with the Company, its subsidiaries 
and affiliates.  The Executive agrees that, during the 
Employment Period and for a period of one (1) year 
thereafter, he will not, directly or indirectly, 
solicit or recruit any employee of the Company, its 
subsidiaries or affiliates for the purpose of being 
employed by him or by any competitor of the Company, 
its subsidiaries or affiliates on whose behalf he is 
acting as an agent, representative or employee and that 
he will not convey any such confidential information or 
trade secrets about other employees of the Company, its 
subsidiaries and affiliates to any other person; 
provided, however, that it shall not constitute a 
solicitation or recruitment of employment in violation 
of this paragraph to discuss employment opportunities 
with any employee of the Company, its subsidiaries or 
affiliates who has either first contacted the Executive 
or regarding whose employment the Executive has 
discussed with and received the written approval of the 
Company's Vice President, Human Resources (or, if such 
position is vacant, the Company's Chief Executive 
Officer), prior to making such solicitation or 
recruitment. In view of the nature of the Executive's 
employment with the Company, the Executive likewise 
agrees that the Company, its subsidiaries and 
affiliates would be irreparably harmed by any 
solicitation or recruitment in violation of the terms 
of this paragraph and that the Company, its 
subsidiaries and affiliates shall therefore be entitled 
to preliminary and/or permanent injunctive relief 
prohibiting the Executive from engaging in any activity 
or threatened activity in violation of the terms of 
this paragraph and to any other relief available to 
them. 

11. Legal Fees.

  The Company shall pay to the Executive all legal fees 
and expenses(including but not limited to fees and 
expenses in connection with any arbitration)incurred by 
the Executive in disputing in good faith any issue 
arising under this Agreement relating to the 
termination of the Executive's employment or in seeking 
in good faith to obtain or enforce any benefit or right 
provided by this Agreement, but in each case only to 
the extent the arbitrator or court determines that the 
Executive had a reasonable basis for such claim.  

 12. Successors.

  (a)  Assignment by Executive.  This Agreement is 
personal to The Executive and without the prior written 
consent of the Company shall not be assign-able by the 
Executive otherwise than by will or the laws of descent 
and distribution. This Agreement shall inure to the 
benefit of and be enforceable by the Executive's legal 
representatives.

  (b)  Successors and Assigns of Company.  This 
Agreement shall inure to the benefit of and be binding 
upon the Company, its successors and assigns.  (c)  
Assumption.  The Company shall require any successor 
(whether direct or indirect, by purchase, merger, 
consolidation or otherwise) to all or substantially all 
of the business and/or assets of the Company to assume 
expressly and agree to perform this Agreement in the 
same manner and to the same extent that the Company 
would be required to perform it if no such succession 
had taken place.  As used in this Agreement, "Company" 
shall mean the Company as hereinbefore defined and any 
successor to its businesses and/or assets as aforesaid 
that assumes and agrees to perform this Agreement by 
operation of law or otherwise.

  13. Miscellaneous.

  (a)  Governing Law.  This Agreement shall be governed 
by and construed in accordance with the laws of the 
State of California, without reference to its 
principles of conflict of laws.  The captions of this 
Agreement are not part of the provisions hereof and 
shall have no force or effect.  This Agreement may not 
be amended, modified, repealed, waived, extended or 
discharged except by an agreement in writing signed by 
the party against whom enforcement of such amendment, 
modification, repeal, waiver, extension or discharge is 
sought.  No person, other than pursuant to a resolution 
of the Board or a committee thereof, shall have 
authority on behalf of the Company to agree to amend, 
modify, repeal, waive, extend or discharge any 
provision of this Agreement or anything in reference 
thereto.

  (b)  Notices.  All notices and other communications 
hereunder shall be in writing and shall be given by 
hand delivery to the other party or by registered or 
certified mail, return receipt requested, postage 
prepaid, addressed, in either case, to the Company's 
headquarters or to such other address as either party 
shall have furnished to the other in writing in 
accordance herewith.  Notices and communications shall 
be effective when actually received by the addressee.  
(c)  Severability.  The invalidity or unenforceability 
of any provision of this Agreement shall not affect the 
validity or enforceability of any other provision of 
this Agreement.

  (d)  Taxes.  The Company may withhold from any 
amounts payable under this Agreement such federal, 
state or local taxes as shall be required to be 
withheld pursuant to any applicable law or regulation.
  (e)  No Waiver.  The Executive's or the Company's 
failure to insist upon strict compliance with any 
provision hereof or any other provision of this 
Agreement or the failure to assert any right the 
Executive or the Company may have hereunder, including, 
without limitation, the right of the Executive to 
terminate employment for Good Reason pursuant to 
Section 4(d) of this Agreement, or the right of the 
Company to terminate the Executive's employment for 
Cause pursuant to Section 4(b) of this Agreement shall 
not be deemed to be a waiver of such provision or right 
or any other provision or right of this Agreement.
  (f)  Entire Agreement.  This instrument contains the 
entire agreement of the Executive, the Company or any 
predecessor or subsidiary thereof with respect to the 
subject matter hereof, and all promises, 
representations, understandings, arrangements and prior 
agreements are merged herein and superseded hereby 
including, but not limited to, that certain employment 
agreement dated September 18, 1996 between the 
Executive and Enova.  Notwithstanding the foregoing, 
the provisions of any employee benefit or compensation 
plan, program or arrangement applicable to the 
Executive, including that certain Incentive Bonus 
Agreement, entered into between the Executive and 
Enova, shall remain in effect, except as expressly 
otherwise provided herein.

  IN WITNESS WHEREOF, the Executive and, pursuant to 
due authorization from its Board of Directors, the 
Company have caused this Agreement to be executed as of 
the day and year first above written.

       MINERAL ENERGY COMPANY


__________________________
Kevin C. Sagara
President

__________________________
Donald E. Felsinger



EXHIBIT A

GENERAL RELEASE


This GENERAL RELEASE (the "Agreement"), dated _______, 
is made by and between ___________________, a 
California corporation (the "Company") and 
_____________ ("you" or "your").

   WHEREAS, you and the Company have previously entered 
into that certain Employment Agreement dated 
_____________, 1996 (the "Employment Agreement"); and

   WHEREAS, Section 5 of the Employment Agreement 
provides for the payment of severance benefits in the 
event of the termination of your employment under 
certain circumstances, subject to and conditioned upon 
your execution and non-revocation of a general release 
of claims by you against the Company and its 
subsidiaries and affiliates.

   NOW, THEREFORE, in consideration of the premises and 
the mutual covenants herein contained, you and the 
Company hereby agree as follows:

   ONE:  Your signing of this Agreement confirms that 
your employment with the Company shall terminate at the 
close of business on ___________,or earlier upon our 
mutual agreement.

   TWO:  As a material inducement for the payment of 
benefits under Section 5 of that certain Employment 
Agreement between you and the Company, and except as 
otherwise provided in this Agreement, you and the 
Company hereby irrevocably and unconditionally release, 
acquit and forever discharge the other from any and all 
Claims either may have against the other.  For purposes 
of his Agreement and the preceding sentence, the words 
"Releasee" or "Releasees"
and "Claim" or "Claims," shall have the meanings set 
forth below:

   (a)The words "Releasee" or "Releasees" shall refer 
to the you and to the Company and each of the Company's 
owners, stockholders, predecessors, successors, 
assigns, agents, directors, officers, employees, 
representatives, attorneys, advisors, parent companies, 
divisions, subsidiaries, affiliates(and agents, 
directors, officers, employees, representatives, 
attorneys and advisors of such parent companies, 
divisions, subsidiaries and affiliates), and all 
persons acting by, through, under or in concert with 
any of them.

   (b)The words "Claim" or "Claims" shall refer to any 
charges, complaints, claims, liabilities, obligations, 
promises, agreements, controversies, damages, actions, 
causes of action, suits, rights, demands, costs, 
losses, debts and expenses (including attorneys' fees 
and costs actually incurred)of any nature whatsoever, 
known or unknown, suspected or unsuspected, which you 
or the Company now, in the past or, except as limited 
by law or regulation such as the Age Discrimination in 
Employment Act (ADEA), in the future may have, own or 
hold against any of the Releasees; provided, however, 
that the word "Claim" or "Claims" shall not refer to 
any charges, complaints, claims, liabilities, 
obligations, promises, agreements, controversies, 
damages, actions, causes of action, suits, rights, 
demands, costs, losses, debts and expenses (including 
attorneys' fees and costs actually incurred) arising 
under [identify severance, employee benefits, stock 
option and other agreements containing duties, rights 
obligations etc. of either party that are to remain 
operative].  Claims released pursuant to this Agreement 
by you and the Company include, but are not limited to, 
rights arising out of alleged violations of any 
contracts, express or implied, any tort, any claim that 
you failed to perform or negligently performed or 
breached your duties during employment at the Company, 
any legal restrictions on the Company's right to 
terminate employees or any federal, state or other 
governmental statute, regulation, or ordinance, 
including, without limitation: (1) Title VII of the 
Civil Rights Act of l964 (race, color, religion, sex 
and national origin discrimination); (2) 42 U.S.C Sec 
1981 (discrimination); (3) 29 U.S.C. Sec 621-634(age 
discrimination); (4) 29 U.S.C. Sec 206(d)(l) (equal 
pay); (5) 42 U.S.C. Sec 12101, et seq. (disability); 
(6) the California Constitution, Article I, Section 
8(discrimination); (7) the California Fair Employment 
and Housing Act (discrimination, including race, color, 
national origin, ancestry, physical handicap, medical 
condition, marital status, religion, sex or age); (8) 
California Labor Code Section 1102.1 (sexual 
orientation discrimination); (9) Executive Order 
11246(race, color, religion, sex and national origin 
discrimination); (10) Executive Order 11141 (age 
discrimination); (11) Sec 503 and 504 of the 
Rehabilitation Act of 1973 (handicap discrimination); 
(12) The Worker Adjustment and Retraining Act (WARN 
Act); (13) the California Labor Code (wages, hours, 
working conditions, benefits and other matters); (14) 
the Fair Labor Standards Act (wages, hours, working 
conditions and other matters); the Federal Employee 
Polygraph Protection Act (prohibits employer from 
requiring employee to take polygraph test as condition 
of employment); and (15) any federal, state or other 
governmental statute, regulation or ordinance which is 
similar to any of the statutes de-scribed in clauses 
(1) through (14).

   THREE:  You and the Company expressly waive and 
relinquish all rights and benefits afforded by any 
statute (including but not limited to Section 1542 of 
the Civil Code of the State of California) which limits 
the effect of are lease with respect to unknown claims.  
You and the Company do so under-standing and 
acknowledging the significance of the release of 
unknown claims and the waiver of statutory protection 
against a release of unknown claims(including but not 
limited to Section 1542).  Section 1542 of the Civil 
Code of the State of California states as follows:

 "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE 
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR 
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY 
HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH 
THE DEBTOR."

Thus, notwithstanding the provisions of Section 1542 or 
of any similar statute, and for the purpose of 
implementing a full and complete release and discharge 
of the Releasees, you and the Company expressly 
acknowledge that this Agreement is intended to include 
in its effect, without limitation, all Claims which are 
known and all Claims which you or the Company do not 
know or suspect to exist in your or the Company's favor 
at the time of execution of this Agreement and that 
this Agreement contemplates the extinguishment of all 
such Claims.

   FOUR:  The parties acknowledge that they might 
hereafter discover facts different from, or in addition 
to, those they now know or believe to be rue with 
respect to a Claim or Claims released herein, and they 
expressly agree to assume the risk of possible 
discovery of additional or different facts, and agree 
that this Agreement shall be and remain effective, in 
all respects, regardless of such additional or 
different discovered facts.

   FIVE:  You hereby represent and acknowledge that you 
have not filed any Claim of any kind against the 
Company or others released in this Agreement.  You 
further hereby expressly agree never to initiate 
against the Company or others released in this 
Agreement any administrative proceeding, lawsuit or any 
other legal or equitable proceeding of any kind 
asserting any Claims that are released in this 
Agreement.  

   The Company hereby represents and acknowledges that 
it has not filed any Claim of any kind against you or 
others released in this Agreement. The Company further 
hereby expressly agrees never to initiate against you 
or others released in this Agreement any administrative 
proceeding, lawsuit or any other legal or equitable 
proceeding of any kind asserting any Claims that are 
released in this Agreement.  

   SIX:  You hereby represent and agree that you have 
not assigned or transferred, or attempted to have 
assigned or transfer, to any person or entity, any of 
the Claims that you are releasing in this Agreement.

   The Company hereby represents and agrees that it has 
not assigned or transferred, or attempted to have 
assigned or transfer, to any person or entity, any of 
the Claims that it is releasing in this Agreement.

   SEVEN:  As a further material inducement to the 
Company to enter into this Agreement, you hereby agree 
to indemnify and hold each of the Releasees harmless 
from all loss, costs, damages, or expenses, including 
without limitation, attorneys' fees incurred by 
Releasees, arising out of any breach of this Agreement 
by you or the fact that any representation made in this 
Agreement by you was false when made.  

   EIGHT:  You and the Company represent and 
acknowledge that, in executing this Agreement, neither 
is relying upon any representation or statement not set 
forth in this Agreement or the Severance Agreement.

   NINE:   (a)This Agreement shall not in any way be 
construed as an admission by the Company that it has 
acted wrongfully with respect to you or any other 
person, or that you have any rights whatsoever against 
the Company, and the Company specifically disclaims any 
liability to or wrongful acts against you or any other 
person, on the part of itself, its employees or its 
agents.  This Agreement shall not in any way be 
construed as an admission by you that you have acted 
wrongfully with respect to the Company, or that you 
failed to perform your duties or negligently performed 
or breached your duties, or that the Company had good 
cause to terminate your employment.   (b)If you are a 
party or are threatened to be made a party to any 
proceeding by reason of the fact that you were an 
officer [or director] of the Company, the Company shall 
indemnify you against any expenses(including reasonable 
attorney fees provided that counsel has been approved 
by the Company prior to retention), judgments, fines, 
settlements, and other amounts actually or reasonably 
incurred by you in connection with that proceeding, 
provided that you acted in good faith and in a manner 
you reasonably believed to be in the best interest of 
the Company.  The limitations of California 
Corporations Code Section 317 shall apply to this 
assurance of indemnification.    (c) You agree to 
cooperate with the Company and its designated 
attorneys, representatives and agents in connection 
with any actual or threatened judicial, administrative 
or other legal or equitable proceeding in which the 
Company is or may be become involved.  Upon reasonable 
notice, you agree to meet with and provide to the 
Company or its designated attorneys, representatives or 
agents all information and knowledge you have relating 
to the subject matter of any such proceeding.

   TEN:  This Agreement is made and entered into in 
California. This Agreement shall in all respects be 
interpreted, enforced and governed by and under the 
laws of the State of California.  Any dispute about the 
validity, interpretation, effect or alleged violation 
of this Agreement (an "arbitrable dispute") must be 
submitted to arbitration in [Los Angeles][San Diego], 
California.  Arbitration shall take place before an 
experienced employment arbitrator licensed to practice 
law in such state and selected in accordance with the 
Model Employment Arbitration Procedures of the American 
Arbitration Association. Arbitration shall be the 
exclusive remedy for any arbitrable dispute.  The 
arbitrator in any arbitrable dispute shall not have 
authority to modify or change the Agreement in any 
respect.  You and the Company shall each be responsible 
for payment of one-half the amount of the arbitrator's 
fee(s).  Should any party to this Agreement institute 
any legal action or administrative proceeding against 
the other with respect to any Claim waived by this 
Agreement or pursue any arbitrable dispute by any 
method other than arbitration, the prevailing party 
shall be entitled to recover from the initiating party 
all damages, costs, expenses and attorneys' fees 
incurred as a result of that action. The arbitrator's 
decision and/or award will be fully enforceable and 
subject to an entry of judgment by the Superior Court 
of the State of California for the County of [Los 
Angeles][San Diego].

   ELEVEN:  Both you and the Company understand that 
this Agreement is final and binding eight days after 
its execution and return.  Should you nevertheless 
attempt to challenge the enforceability of this 
Agreement as provided in Paragraph TEN or, in violation 
of that Paragraph, through litigation, as a further 
limitation on any right to make such a challenge, you 
shall initially tender to the Company, by certified 
check delivered to the Company, all monies received 
pursuant to Section 5 of the Employment Agreement, plus 
interest, and invite the Company to retain such monies 
and agree with you to cancel this Agreement and void 
the Company's obligations under Section 5 of the 
Employment Agreement.  In the event the Company accepts 
this offer, the Company shall retain such monies and 
this Agreement shall be canceled and the Company shall 
have no obligation under Section 5 of the Employment 
Agreement.  In the event the Company does not accept 
such offer, the Company shall so notify you, and shall 
place such monies in an interest-bearing escrow account 
pending resolution of the dispute between you and the 
Company as to whether or not this Agreement and the 
Company's obligations under Section 5 of the Employment 
Agreement shall be set aside and/or otherwise rendered 
voidable or unenforceable.  Additionally, any 
consulting agreement then in effect between you and The 
Company shall be immediately rescinded with no 
requirement of notice.
   TWELVE:  Any notices required to be given under this 
Agreement shall be delivered either personally or by 
first class United States mail, postage prepaid, 
addressed to the respective parties as follows:

To Company:   [TO COME]

    Attn:  [TO COME]

To You:  
___________________
___________________
___________________

   THIRTEEN:  You understand and acknowledge that you 
have been given a period of 45 days to review and 
consider this Agreement (as well as statistical data on 
the persons eligible for similar benefits) before 
signing it and may use as much of this 45-day period as 
you wish prior to signing.  You are encouraged, at your 
personal expense, to consult with an attorney before 
signing this Agreement.  You understand and acknowledge 
that whether or not you do so is your decision.  You 
may revoke this Agreement within seven days of signing 
it.  If you wish to revoke, the Company's Vice 
President, Human Resources must receive written notice 
from you no later than the close of business on the 
seventh day after you have signed the Agreement.  If 
revoked, this Agreement shall not be effective and 
enforceable and you will not receive payments or 
benefits under Section 5 of the Employment Agreement.

   FOURTEEN:  This Agreement constitutes the entire 
Agreement of the parties hereto and supersedes any and 
all other Agreements (except the Employment Agreement) 
with respect to the subject matter of this Agreement, 
whether written or oral, between you and the Company.  
All modifications and amendments to this Agreement must 
be in writing and signed by the parties. 

   FIFTEEN:  Each party agrees, without further 
consideration, to sign or cause to be signed, and to 
deliver to the other party, any other documents and to 
take any other action as may be necessary to fulfill 
the obligations under this Agreement.  

   SIXTEEN:  If any provision of this Agreement or the 
application thereof is held invalid, the invalidity 
shall not affect other provisions or applications of 
the Agreement which can be given effect without the 
invalid provisions or application; and to this end the 
provisions of this Agreement are declared to be 
severable.

   SEVENTEEN:  This Agreement may be executed in 
counterparts.

I have read the foregoing General Release and I accept 
and agree to the provisions it contains and hereby 
execute it voluntarily and with full under-standing of 
its consequences.  I am aware it includes a release of 
all known or unknown claims.

DATED:____________________  
                               
_____________________________   
DATED:____________________  

                               
_____________________________    

   You acknowledge that you first received this 
Agreement on [date].

                                      
___________________________

EX-10

Exhibit 10.5


               EMPLOYMENT AGREEMENT


                    EMPLOYMENT AGREEMENT ("Agreement") made 
and entered into as of the 12th day of October, 1996, by 
and between Mineral Energy Company (the "Company"), a 
California corporation, and Warren I. Mitchell (the 
"Executive");

                    WHEREAS, the Executive is currently 
serving as President of Southern California Gas Company, a 
California corporation and a subsidiary of Pacific Enter- 
prises, a California corporation ("Pacific Enterprises"), 
and the Company desires to secure the continued employment 
of the Executive in accordance herewith;

                    WHEREAS, pursuant to the Agreement and 
Plan of Merger (the "Merger Agreement"), dated as of 
October 12, 1996, among, inter alia, Pacific Enterprises, 
Enova, Inc., a California corporation ("Enova") and the 
Company, the parties thereto have agreed to a merger (the 
"Merger") pursuant to the terms thereof; 
                     WHEREAS, the Executive is willing to 
commit himself to be employed by the Company on the terms 
and conditions herein set forth and thus to forego 
opportunities elsewhere; and

                    WHEREAS, the parties desire to enter 
into this Agreement, as of the Effective Date (as 
hereinafter defined), setting forth the terms and 
conditions for the employment relationship of the Executive 
with the Company during the Employment Period (as 
hereinafter defined).

                    NOW, THEREFORE, IN CONSIDERATION of the 
mutual premises, covenants and agreements set forth below, 
it is hereby agreed as follows:

         1. Employment and Term.

 (a) Employment. The Company agrees to employ the 
Executive, and the Executive agrees to be employed by the 
Company, in accordance with the terms and provisions of 
this Agreement during the term thereof (as described 
below).

 (b) Term. The term of the Executive's employment under 
this Agreement shall commence (the "Effective Date") as of 
the closing date (the "Closing Date") of the Merger as 
described in the Merger Agreement and shall continue until 
the earlier of the Executive's Mandatory Retirement Age (as 
defined herein) or the fifth anniversary of the Effective 
Date (such term being referred to hereinafter as the 
"Employment Period"); provided, however, that commencing on 
the fourth anniversary of the Effective Date (and each 
anniversary of the Effective Date thereafter), the term of 
this Agreement shall automatically be extended for one 
additional year, unless, prior to such date, the Company or 
the Executive shall give written notice to the other party 
that it or he, as the case may be, does not wish to so 
extend this Agreement; and further provided, however, that 
if the Merger Agreement is terminated, then, at the time of 
such termination, this Agreement shall be deemed canceled 
and of no force or effect and the Executive shall continue 
to be subject to such agreements and arrangements that were 
in effect prior to the Closing Date of the Merger. As a 
condition to the Merger, the parties hereto agree that the 
Company shall be responsible for all of the premises, 
covenants and agreements set forth in this Agreement.

 (c)Mandatory Retirement. In no event shall the term of the 
Executive's employment hereunder extend beyond the end of 
the month in which the Executive's 65th birthday occurs 
(the "Mandatory Retirement Age").

           2. Duties and Powers of Executive.

(a) Position. During the period commencing on the Effective 
Date the Executive shall serve as President and Principal 
Executive Officer of the businesses of the Company and its 
subsidiaries that are economically regulated by the 
California Public Utilities Commission (the "Regulated 
Subsidiaries") with such authority, duties and 
responsibilities with respect to such position as set forth 
in subsection (b) hereof. In this capacity, the Executive 
shall report to the Office of the Chairman or if the Office 
of the Chairman does not exist, the Chief Executive Officer 
of the Company. The titles, authority, duties and 
responsibilities set forth in subsection (b) hereof may be 
changed from time to time but only with the mutual written 
agreement of the Executive and the Company.

 (b)Duties of the President and Principal Executive 
Officer. The duties of the President and Principal 
Executive Officer of the Company's Regulated Subsidiaries 
shall include but not be limited to directing the overall 
business, affairs and operations of the Company's Regulated 
Subsidiaries, through the officers of such subsidiaries, 
all of whom shall report directly or indirectly to the 
Executive.

 (c) Attention. During the Employment Period, and excluding 
any periods of vacation and sick leave to which the 
Executive is entitled, the Executive shall devote full 
attention and time during normal business hours to the 
business and affairs of the Company and, to the extent 
necessary to discharge the responsibilities assigned to the 
Executive under this Agreement, use the Executive's best 
efforts to carry out such responsibilities faithfully and 
efficiently. It shall not be considered a violation of the 
foregoing for the Executive to serve on corporate, 
industry, civic or charitable boards or committees, so long 
as such activities do not interfere with the performance of 
the Executive's responsibilities as an employee of the 
Company in accordance with this Agreement.

           3. Compensation.

It is the Board's intention to provide the Executive with 
compensation opportunities that, in total, are at a level 
that is consistent with that provided by comparable 
companies to executives of similar levels of 
responsibility, expertise and corporate and individual 
performance as determined by the compensation committee of 
the Board. In this regard, the Executive shall receive the 
following compensation for his services hereunder to the 
Company:                      

(a) Base Salary. During the Employment Period, the 
Executive's annual base salary ("Annual Base Salary") shall 
in no event be no less than $440,000 and shall be payable 
in accordance with the Company's general payroll practices.  
Subject to Section 4(e)(ii), the Board in its discretion 
may from time to time direct such upward adjustments in the 
Executive's Annual Base Salary as the Board deems to be 
necessary or desirable, including, without limitation, 
adjustments in order to reflect increases in the cost of 
living and the Executive's performance. Any increase in 
Annual Base Salary shall not serve to limit or reduce any 
other obligation of the Company under this Agreement.

                    (b) Incentive Compensation. Subject to 
Section 4(e)(ii), during the Employment Period, the 
Executive shall participate in annual incentive 
compensation plans and long-term incentive compensation 
plans of the Company and, to the extent appropriate, the 
Company's Subsidiaries (which long-term incentive 
compensation plans may include plans offering stock 
options, restricted stock and other long-term incentive 
compensation and all such annual and long-term plans to be 
hereinafter referred to as the "Incentive Compensation 
Plans") and will be granted awards thereunder providing him 
with the opportunity to earn, on a year-by-year basis, 
annual and long-term incentive compensation (the "Incentive 
Compensation Awards") at least equal (in terms of target, 
maximum and minimum awards expressed as a percentage of 
Annual Base Salary) to the Executive's opportunities that 
were in effect prior to the Effective Date. Any equity 
awards granted to the Executive may be granted, at the 
Executive's election, to trusts established for the benefit 
of members of the Executive's family. With respect to 
incentive compensation awards granted prior to the 
Effective Date, the Executive shall be entitled to retain 
such awards in accordance with their terms, which shall be 
appropriately adjusted as a result of the Merger.                        
(c) Retirement and Welfare Benefit Plans. In addition to 
the benefits provided under Section 3(b), during the 
Employment Period and so long as the Executive is employed 
by the Company, he shall be eligible to participate in all 
other savings, retirement and welfare plans, practices, 
policies and programs applicable generally to employees 
and/or senior executive officers of the Company and its 
domestic subsidiaries, except with respect to any benefits 
under any plan, practice, policy or program to which the 
Executive has waived his rights in writing. To the extent 
that benefits payable or provided to the Executive under 
such plans are materially less favorable on a benefit by 
benefit basis than the benefits that would have been 
payable or provided to the Executive under comparable 
Pacific Enterprises tax-qualified retirement plans, 
executive retirement plans, executive medical plans and 
life insurance arrangements in which the Executive was a 
participant (based on the terms of such plans as of the 
Effective Date), the Executive shall be entitled to 
benefits pursuant to the terms of this Agreement equal to 
the excess of the benefits provided under the applicable 
Pacific Enterprises plans over the benefits provided under 
the comparable Company plans. 

                    (d) Expenses. The Company shall 
reimburse the Executive for all expenses, including those 
for travel and entertainment, properly incurred by him in 
the performance of his duties hereunder in accordance with 
policies established from time to time by the Board.

                    (e) Fringe Benefits and Perquisites. 
During the Employment Period and so long as the Executive 
is employed by the Company, he shall be entitled to receive 
fringe benefits and perquisites in accordance with the 
plans, practices, pro- grams and policies of the Company 
and, to the extent appropriate, the Company's subsidiaries 
from time to time in effect, commensurate with his 
position.

         4. Termination of Employment.

                    (a) Death. The Executive's employment 
shall terminate upon the Executive's death. 

                    (b) Disability. The Executive's active 
employment shall terminate at the election of the Board or 
the Executive by reason of Disability (as herein defined) 
during the Employment Period; provided, however, that the 
Board may not terminate the Executive's active employment 
hereunder by reason of Disability unless at the time of 
such termination there is no reasonable expectation that 
the Executive will return to full time responsibilities 
hereunder within the next ninety (90) day period.  For 
purposes of the Agreement, disability ("Disability") shall 
have the same meaning as set forth in the Pacific 
Enterprises long-term disability plan or its successor. 
Upon such termination Executive shall continue as a 
participant under the Pacific Enterprises long-term 
disability plan or its successor and under the disability 
provisions of Pacific Enterprises' supplemental executive 
retirement plan or its successor until Executive reaches 
mandatory retirement age, elects to commence retirement 
benefits, becomes employed or ceases to have a Disability.

                    (c) By the Company for Cause. The 
Company may terminate the Executive's employment during the 
Employment Period for Cause (as herein defined).  For 
purposes of this Agreement, "Cause" shall mean (i) the 
willful and continued failure by the Executive to 
substantially perform the Executive's duties with the 
Company (other than any such failure resulting from the 
Executive's incapacity due to physical or mental illness or 
any such actual or anticipated failure after the issuance 
of a Notice of Termination for Good Reason by the Executive 
pursuant to Section 4(d)) or (ii) the Executive's 
commission of one or more acts of moral turpitude that 
constitute a violation of applicable law (including but not 
limited to a felony) which have or result in an adverse 
effect on the Company, monetarily or otherwise or one or 
more significant acts of dishonesty. For purposes of clause 
(i) of this definition, no act, or failure to act, on the 
Executive's part shall be deemed "willful" unless done, or 
omitted to be done, by the Executive not in good faith and 
without reasonable belief that the Executive's act, or 
failure to act, was in the best interest of the Company. 

                    (d) By the Company without Cause. 
Notwithstanding any other provision of this Agreement, the 
Company may terminate the Executive's employment other than 
by a termination for Cause during the Employment Period, 
but only upon the affirmative vote of three-fourths (3/4) 
of the membership of the Board.

                    (e) By the Executive for Good Reason. 
The Executive may terminate his employment during the 
Employment Period for Good Reason (as herein defined). For 
purposes of this Agreement, "Good Reason" shall mean the 
occurrence without the written consent of the Executive of 
any one of the following acts by the Company, or failures 
by the Company to act, unless such act or failure to act is 
corrected prior to the Date of Termination (as hereinafter 
defined) specified in the Notice of Termination (as 
hereinafter defined) given in respect thereof:    (i) an 
adverse change in the Executive's title, authority, duties, 
responsibilities or reporting lines as specified in 
Sections 2(a) and 2(b) of this Agreement;    (ii) a 
reduction by the Company in (A) the Executive's Annual Base 
Salary as in effect on the date hereof or as the same may 
be in- creased from time to time or (B) the Executive's 
aggregate annualized compensation and benefits 
opportunities, except, in the case of both (A) and (B), for 
across-the-board reductions similarly affecting all 
executives (both of the Company and of any Person (as 
hereinafter defined) then in control of the Company) whose 
compensation is directly determined by the compensation 
committee of the Board (and the compensation committee of 
the board of directors of any Person then in control of the 
Company); provided that, the exception for across-the-board 
reductions shall not apply following a Change in Control 
(as hereinafter defined);      (iii) the Company's 
requiring the Executive to be based  anywhere other than 
the principal place of business of the Regulated Subsidiar- 
ies (or permitted relocation thereof); or a substantial 
increase in the  Executive's business travel obligations 
outside of the Southern California area  as of the 
Effective Date, other than any such increase that (A) 
arises in  connection with extraordinary business 
activities of the Company and (B) is  understood not to be 
part of the Executive's regular duties with the Company; 
(iv) the failure by the Company to pay to the Executive  
any portion of the Executive's current compensation and 
benefits or to pay to  the Executive any portion of an 
installment of deferred compensation under  any deferred 
compensation program of the Company within thirty (30) days 
of  the date such compensation is due;     (v) any 
purported termination of the Executive's employment that is 
not effected pursuant to a Notice of Termination satisfying 
the  requirements of Section 4(f); for purposes of this 
Agreement, no such purported termination shall be 
effective;     (vi) the failure by the Company to obtain a 
satisfactory  agreement from any successor of the Company 
requiring such successor to  assume and agree to perform 
the Company's obligations under this Agreement,  as 
contemplated in Section 11; or     (vii) the failure by the 
Company to comply with any  material provision of this 
Agreement.

Following a Change in Control (as hereinafter defined), the 
Executive's determination that an act or failure to act 
constitutes Good Reason shall be presumed to be valid 
unless such determination is deemed to be unreasonable by 
an arbitrator.  The Executive's right to terminate the 
Executive's employment for Good Reason shall not be 
affected by the Executive's incapacity due to physical or 
mental illness. The Executive's continued employment shall 
not constitute consent to, or a waiver of rights with 
respect to, any act or failure to act constituting Good 
Reason hereunder.

     (f)Change in Control. 

     Change in Control shall mean the occurrence of any of 
the following events:

  (i)Any Person is or becomes the Beneficial Owner,   
directly or indirectly, of securities of the Company (not 
including in the   securities beneficially owned by such 
Person any securities acquired directly   from the Company 
or its affiliates other than in connection with the 
acquisition   by the Company or its affiliates of a 
business) representing twenty percent   (20%) or more of 
the combined voting power of the Company's then outstand- 
ing securities; or      (ii) The following individuals 
cease for any reason to  constitute a majority of the 
number of directors then serving: individuals who,  on the 
date hereof, constitute the Board and any new director 
(other than a  director whose initial assumption of office 
is in connection with an actual or  threatened election 
contest, including but not limited to a consent 
solicitation,  relating to the election of directors of the 
Company) whose appointment or  election by the Board or 
nomination for election by the Company's shareholders was 
approved or recommended by a vote of at least two-thirds 
(2/3) of  the directors then still in office who either 
were directors on the date hereof or  whose appointment, 
election or nomination for election was previously so 
approved or recommended; or  (iii) There is consummated a 
merger or consolidation of the Company or any direct or 
indirect subsidiary of the Company with any   other 
corporation, other than (A) a merger or consolidation which 
would result   in the voting securities of the Company 
outstanding immediately prior to such   merger or 
consolidation continuing to represent (either by remaining 
outstanding or by being converted into voting securities of 
the surviving entity or any   parent thereof), in 
combination with the ownership of any trustee or other   
fiduciary holding securities under an employee benefit plan 
of the Company or   any subsidiary of the Company, at least 
sixty percent (60%) of the combined   voting power of the 
securities of the Company or such surviving entity or any   
parent thereof outstanding immediately after such merger or 
consolidation, or   (B) a merger or consolidation effected 
to implement a recapitalization of the   Company (or 
similar transaction) in which no Person is or becomes the 
beneficial owner, directly or indirectly, of securities of 
the Company (not including in the securities beneficially 
owned by such Person any securities acquired   directly 
from the Company or its affiliates other than in connection 
with the   acquisition by the Company or its affiliates of 
a business) representing twenty   percent (20%) or more of 
the combined voting power of the Company's then   
outstanding securities; or   (iv) The shareholders of the 
Company approve a plan of   complete liquidation or 
dissolution of the Company or there is consummated   an 
agreement for the sale or disposition by the Company of all 
or substantially   all of the Company's assets, other than 
a sale or disposition by the Company   of all or 
substantially all of the Company's assets to an entity, at 
least sixty   percent (60%) of the combined voting power of 
the voting securities of which   are owned by shareholders 
of the Company in substantially the same proportions as 
their ownership of the Company immediately prior to such 
sale. 

"Person" shall have the meaning given in section 3(a)(9) of 
the Securities Exchange Act of 1934 (the "Exchange Act"), 
as modified and used in sections 13(d) and 14(d) thereof, 
except that such term shall not include (i) the Company or 
any of its subsidiaries, (ii) a trustee or other fiduciary 
holding securities under an employee benefit plan of the 
Company or any of its affiliates, (iii) an underwriter 
temporarily holding securities pursuant to an offering of 
such securities, (iv) a corporation owned, directly or 
indirectly, by the shareholders of the Company in 
substantially the same proportions as their ownership of 
stock of the Company, or (v) a person or group as used in 
Rule 13d-1(b) under the Exchange Act.

"Beneficial Owner" shall have the meaning set forth in Rule 
13d-3 under the Exchange Act.

Notwithstanding the foregoing, any event or transaction 
which would otherwise constitute a Change in Control (a 
"Transaction") shall not constitute a Change in Control for 
purposes of this Agreement if, in connection with the 
Transaction, the Executive participates as an equity 
investor in the acquiring entity or any of its affiliates 
(the "Acquiror"). For purposes of the preceding sentence, 
the Executive shall not be deemed to have participated as 
an equity investor in the Acquiror by virtue of (i) 
obtaining beneficial ownership of any equity interest in 
the Acquiror as a result of the grant to the Executive of 
an incentive compensation award under one or more incentive 
plans of the Acquiror (including, but not limited to, the 
conversion in connection with the Transaction of incentive 
compensation awards of the Company into incentive 
compensation awards of the Acquiror), on terms and 
conditions substantially equivalent to those applicable to 
other executives of the Company immediately prior to the 
Transaction, after taking into account normal differences 
attributable to job responsibilities, title and the like, 
(ii) obtaining beneficial ownership of any equity interest 
in the Acquiror on terms and conditions substantially 
equivalent to those obtained in the Transaction by all 
other shareholders of the Company, or (iii) obtaining 
beneficial ownership of any equity interest in the Acquiror 
in a manner unrelated to a Transaction.

 (g) Notice of Termination. During the Employment Period, 
any purported termination of the Executive's employment 
(other than by reason of death) shall be communicated by 
written Notice of Termination from one party hereto to the 
other party hereto in accordance with Section 12(b). For 
purposes of this Agreement, a "Notice of Termination" shall 
mean a notice that shall indicate the specific termination 
provision in this Agreement relied upon, if any, and shall 
set forth in reasonable detail the facts and circumstances 
claimed to provide a basis for termination of the 
Executive's employment under the provision so indicated. 
Further, a Notice of Termination for Cause is required to 
include a copy of a resolution duly adopted by the 
affirmative vote of not less than three-fourths (3/4) of 
the entire membership of the Board at a meeting of the 
Board that was called and held no more than ninety (90) 
days after the date the Board had knowledge of the most 
recent act or omission giving rise to such breach for the 
purpose of considering such termination (after reasonable 
notice to the Executive and an opportunity for the 
Executive, together with the Executive's counsel, to be 
heard before the Board and, if possible, to cure the breach 
that was the basis for the Notice of Termination for Cause) 
finding that, in the good faith opinion of the Board, the 
Executive was guilty of conduct set forth in clause (i) or 
(ii) of the definition of Cause herein, and specifying the 
particulars thereof in detail. Unless the Board determines 
otherwise, a Notice of Termination by the Executive 
alleging a termination for Good Reason must be made within 
180 days of the act or failure to act that the Executive 
alleges to constitute Good Reason.

 (h) Date of Termination. "Date of Termination," with 
respect to any purported termination of the Executive's 
employment during the Employment Period, shall mean the 
date specified in the Notice of Termination (which, in the 
case of a termination by the Company, shall not be less 
than thirty (30) days for reasons other than cause and, in 
the case of a termination by the Executive, shall not be 
less than fifteen (15) days nor more than sixty (60) days) 
from the date such Notice of Termination is given.

        5. Obligations of the Company Upon Termination.

                (a) Termination Other Than for Cause, Death 
or Disability. During the Employment Period, if the Company 
shall terminate the Executive's employment (other than for 
Cause, death or Disability) or the Executive shall 
terminate his employment for Good Reason (termination in 
any such case being referred to as "Termination") the 
Company shall pay to the Executive amounts, and provide the 
Executive with the benefits, described in this Section 5 
(hereinafter referred to as the "Severance Payments"). 
Subject to Section 5(g), the amounts specified in this 
Section 5(a) shall be paid within thirty (30) days after 
the Date of Termination. (i) Lump Sum Payment. In lieu of 
any further payments of   Annual Base Salary or annual 
Incentive Compensation Awards to the Executive for periods 
subsequent to the Date of Termination, the Company shall 
pay   to the Executive a lump sum amount in cash equal to 
the product of (X) the   sum of (A) the Executive's Annual 
Base Salary and (B) the greater of the   Executive's target 
bonus for the year of termination or the average of the 
three   (3) years' highest gross bonus awards, not 
necessarily consecutive, paid by the   Company (or its 
predecessor) to the Executive in the five (5) years 
preceding   the year of termination and (Y) two (2), 
provided, however, that in the event   of a Termination 
following a Change in Control such multiplier shall be 
three   (3).  (ii) Accrued Obligations. The Company shall 
pay the Executive a lump sum amount in cash equal to the 
sum of (A) the Executive's   Annual Base Salary through the 
Date of Termination to the extent not thereto- fore paid, 
(B) an amount equivalent to any annual Incentive 
Compensation   Awards earned with respect to fiscal years 
ended prior to the year that includes   the Date of 
Termination to the extent not theretofore paid, and (C) an 
amount   equivalent to the target amount payable under any 
annual Incentive Compensation Awards for the fiscal year 
that includes the Date of Termination or, if   greater, the 
average of the three (3) years' highest gross bonus awards, 
not   necessarily consecutive, paid by the Company (or its 
predecessor) to the   Executive in the five (5) years 
preceding the year of Termination multiplied by   a 
fraction the numerator of which shall be the number of days 
from the beginning of such fiscal year to and including the 
Date of Termination and the   denominator of which shall be 
365, in each case to the extent not theretofore   paid. 
(The amounts specified in clauses (A), (B) and (C) shall be 
hereinafter   referred to as the "Accrued Obligations.")  
(iii) Deferred Compensation. In the event of a Termination   
following a Change in Control, the Company shall pay the 
Executive a lump   sum payment in an amount equal to any 
compensation previously deferred by   the Executive 
(together with any accrued interest or earnings thereon).   
(iv) Pension Supplement. The Company shall pay the 
Executive a lump sum payment (the "Pension Supplement") in 
an amount equal to   the present value (as determined in 
accordance with the terms of Pacific   Enterprises' 
supplemental executive retirement plan) of the benefits to 
which   the Executive would be entitled under the Company's 
defined benefit pension   and retirement plans (the 
"Pension and Retirement Plans") if he had continued   
working for the Company for an additional two (2) years, 
and had increased   his age by two (2) years as of the Date 
of Termination but not beyond the   Mandatory Retirement 
Age; provided, however, that in the event of a Termi- 
nation following a Change in Control, such number of years 
shall be three (3)   but not beyond the Mandatory 
Retirement Age.  (v) Accelerated Vesting and Payment of 
Long-Term Incentive   Awards. All equity-based, long-term 
Incentive Compensation Awards held by   the Executive under 
any long- term Incentive Compensation Plan maintained   by 
the Company or any affiliate shall immediately vest and 
become exercisable   as of the Date of Termination, to be 
exercised in accordance with the terms of   the applicable 
plan and award agreement; provided, however, that any such   
awards granted on or after the Effective Date shall remain 
outstanding and   exercisable until the earlier of (A) 
eighteen (18) months following the Date of   Termination or 
(B) the expiration of the original term of such award (it 
being   understood that all awards granted prior to the 
Effective Date shall remain   outstanding and exercisable 
for a period that is no less than that provided for   in 
the applicable agreement in effect as of the date of 
grant), and the Company   shall pay to the Executive, with 
respect to all cash-based, long-term Incentive   
Compensation Awards made to the Executive that are 
outstanding under any long-term Incentive Compensation Plan 
maintained by the Company or any   affiliate an amount 
equal to the target amount payable under such long-term   
Incentive Compensation Awards multiplied by a fraction, the 
numerator of   which shall be the number of days from the 
beginning of the award cycle to   and including the Date of 
Termination, and the denominator of which shall be the 
number of days in the cycle as originally granted; and(vi) 
Continuation of Welfare Benefits. For a period of two (2) 
years or until the Executive is eligible for retiree 
medical benefits, whichever is longer, immediately 
following the Date of Termination, the Company shall 
arrange to provide the Executive and his dependents with 
life, disability, accident and health insurance benefits 
substantially similar to those provided to the Executive 
and his dependents immediately prior to the Date of 
Termination, provided, however, that in no event shall the 
Executive be entitled to receive disability benefits under 
the Pacific Enterprises long-term disability plan or 
Pacific Enterprises' supplemental executive retirement plan 
after the Executive has become eligible to commence receipt 
of retirement benefits under Pacific Enterprises' 
supplemental executive retirement plan, and provided, 
further, that if the Executive becomes employed with 
another employer and is eligible to receive life, 
disability, accident and health insurance benefits under 
another employer-provided plan, the benefits under the 
Company's plans shall be secondary to those provided under 
such other plan during such applicable period of 
eligibility, and further provided, however, that in the 
event of a Termination following a Change in Control such 
period shall not be less than three (3) years. 

                (b) Termination by the Company for Cause or 
by the Executive Other Than for Good Reason. Subject to the 
provisions of Section 6 of this Agreement, if the 
Executive's employment shall be terminated for Cause during 
the Employment Period, or if the Executive terminates 
employment during the Employment Period other than for Good 
Reason, the Company shall have no further obligations to 
the Executive under this Agreement other than the Accrued 
Obligations. 
                (c) Termination Due to Death or Disability. 
If the Executive's employment shall terminate by reason of 
death or Disability, the Company shall pay the Executive or 
his estate, as the case may be, the Accrued Obligations 
and, solely in the case of termination by reason of 
disability, the Pension Supplement. Such payments shall be 
in addition to those rights and benefits to which the 
Executive or his estate may be entitled under the relevant 
Company plans or programs.

                (d) Code Section 280G.

                           (i) Notwithstanding any other 
provisions of this Agreement, in the event that any payment 
or benefit received or to be received by the Executive 
(whether pursuant to the terms of this Agreement or any 
other plan, arrangement or agreement with (A) the Company, 
(B) any Person (as defined in Section 4(e)) whose actions 
result in a Change in Control or (C) any Person affiliated 
with the Company or such Person) (all such payments and 
benefits, including the Severance Payments, being 
hereinafter called "Total Payments") would not be 
deductible (in whole or part) by the Company, an affiliate 
or Person making such payment or providing such benefit as 
a result of section 280G of the Code, then, to the extent 
necessary to make such portion of the Total Payments 
deductible (and after taking into account any reduction in 
the Total Payments provided by reason of section 280G of 
the Code in such other plan, arrangement or agreement), the 
cash Severance Payments shall first be reduced (if 
necessary, to zero), and all other Severance Payments shall 
thereafter be reduced (if necessary, to zero); provided, 
however, that the Executive may elect to have the noncash 
Severance Payments reduced (or eliminated) prior to any 
reduction of the cash Severance Payments. 
                           (ii) For purposes of this 
limitation, (A) no portion of the Total Payments the 
receipt or enjoyment of which the Executive shall have 
waived at such time and in such manner as not to constitute 
a "payment" within the meaning of section 280G(b) of the 
Code shall be taken into account, (B) no portion of the 
Total Payments shall be taken into account which, in the 
opinion of tax counsel ("Tax Counsel") reasonably 
acceptable to the Executive and selected by the Company's 
accounting firm which (or, in the case of a payment 
following a Change in Control the accounting firm that was, 
immediately prior to the Change in Control, the Company's 
independent auditor) (the "Auditor"), does not constitute a 
"parachute payment" within the meaning of section 
280G(b)(2) of the Code, including by reason of section 
280G(b)(4)(A) of the Code, (C) the Severance Payments shall 
be reduced only to the extent necessary so that the Total 
Payments (other than those referred to in clause (A) or 
(B)) in their entirety constitute reasonable compensation 
for services actually rendered within the meaning of 
section 280G(b)(4)(B) of the Code or are otherwise not 
subject to disallowance as deductions by reason of section 
280G of the Code, in the opinion of Tax Counsel, and (D) 
the value of any noncash benefit or any deferred payment or 
benefit included in the Total Payments shall be determined 
by the Auditor in accordance with the principles of 
sections 280G(d)(3) and (4) of the Code. 

  (e) Consulting and Non-Competition. If the Total Payments 
are subject to reduction in accordance with the above 
provisions of Section 5(d), the Executive shall have the 
option, to be exercised within ten (10) days after receipt 
of notice of such reduction from the Company, to enter into 
a consulting and non- competition agreement with the 
Company (the "Consulting and Non-Competition Agreement"), 
which shall (1) provide the Executive with payments and 
benefits, payable over the term of the agreement, the 
present value of which in the aggregate is equal to or 
greater than the present value (determined by applying a 
discount rate equal to the interest rate provided in 
section 1274(b)(2)(B) of the Code) of the balance of the 
payments and benefits otherwise payable to the Executive 
without regard to the provisions of Section 5(d), (2) 
require the Executive to make his services available to the 
Company for no more than twenty (20) hours per month and 
(3) last for a period of not more than two (2) years 
(unless the Executive consents to a longer period).

                (f) Gross-Up Payment. In the event that the 
Executive receives a notice from the Internal Revenue 
Service to the effect that the amounts payable under the 
Consulting and Non-Competition Agreement would be subject 
(in whole or part) to the tax (the "Excise Tax") imposed 
under section 4999 of the Code, within thirty (30) days 
after the date the Chairman of the Board receives a copy of 
such notice the Company shall pay to the Executive such 
additional amounts (the "Gross-Up Payment") such that the 
net amount retained by the Executive, after deduction of 
any Excise Tax on the Total Payments and any federal, state 
and local income and employment taxes and Excise Tax upon 
the Gross-Up Payment, shall be equal to the Total Payments. 
For purposes of determining the amount of the Gross-Up 
Payment, the Executive shall be deemed to pay federal 
income tax at the highest marginal rate of federal income 
taxation in the calendar year in which the Gross-Up Payment 
is to be made and state and local income taxes at the 
highest marginal rate of taxation in the state and locality 
of the Executive's residence on the date on which the 
Gross-Up Payment is calculated for purposes of this 
section, net of the maximum reduction in federal income 
taxes which could be obtained from deduction of such state 
and local taxes. In the event that the Excise Tax is 
subsequently determined to be less than the amount taken 
into account hereunder, the Executive shall repay to the 
Company, at the time that the amount of such reduction in 
Excise Tax is finally determined, the portion of the Gross-
Up Payment attributable to such reduction (plus that 
portion of the Gross-Up Payment attributable to the Excise 
Tax and federal, state and local income tax imposed on the 
Gross-Up Payment being repaid by the Executive to the 
extent that such repayment results in a reduction in Excise 
Tax and/or a federal, state or local income tax deduction) 
plus interest on the amount of such repayment at the rate 
provided in section 1274(b)(2)(B) of the Code. In the event 
that the Excise Tax is determined to exceed the amount 
taken into account hereunder (including by reason of any 
payment the existence or amount of which cannot be 
determined at the time of the Gross-Up Payment), the 
Company shall make an additional Gross-Up Payment in 
respect of such excess (plus any interest, penalties or 
additions payable by the Executive with respect to such 
excess) at the time that the amount of such excess is 
finally determined. The Executive and the Company shall 
each reasonably cooperate with the other in connection with 
any administrative or judicial proceedings concerning the 
existence or amount of liability for Excise Tax with 
respect to the Total Payments. 

                (g) Release. Notwithstanding anything 
herein to the contrary, the Company's obligation to make 
the payments provided for in this Section 5 is expressly 
made subject to and conditioned upon (i) the Executive's 
prior execution of a release substantially in the form 
attached hereto as Exhibit A within forty-five (45) days 
after the applicable Date of Termination and (ii) the 
Executive's non-revocation of such release in accordance 
with the terms thereof. 

        6. Nonexclusivity of Rights. 

                Nothing in this Agreement shall prevent or 
limit the Executive's continuing or future participation in 
any benefit, plan, program, policy or practice provided by 
the Company and for which the Executive may qualify (except 
with respect to any benefit to which the Executive has 
waived his rights in writing), nor shall anything herein 
limit or otherwise affect such rights as the Executive may 
have under any other contract or agreement entered into 
after the Effective Date with the Company. Amounts which 
are vested benefits or which the Executive is otherwise 
entitled to receive under any benefit, plan, policy, 
practice or program of, or any contract or agreement 
entered into with, the Company shall be payable in 
accordance with such benefit, plan, policy, practice or 
program or contract or agreement except as explicitly 
modified by this Agreement. 

         7. Full Settlement; Mitigation.

                The Company's obligation to make the 
payments provided for in this Agreement and otherwise to 
perform its obligations hereunder shall not be affected by 
any set-off, counterclaim, recoupment, defense or other 
claim, right or action which the Company may have against 
the Executive or others, provided that nothing herein shall 
preclude the Company from separately pursuing recovery from 
the Executive based on any such claim. In no event shall 
the Executive be obligated to seek other employment or take 
any other action by way of mitigation of the amounts 
(including amounts for damages for breach) payable to the 
Executive under any of the provisions of this Agreement and 
such amounts shall not be reduced whether or not the Execu- 
tive obtains other employment.     

      8. Arbitration. 

                Any dispute about the validity, 
interpretation, effect or alleged violation of this 
Agreement (an "arbitrable dispute") must be submitted to 
confidential arbitration in Los Angeles, California. 
Arbitration shall take place before an experienced 
employment arbitrator licensed to practice law in such 
state and selected in accordance with the Model Employment 
Arbitration Procedures of the American Arbitration 
Association. Arbitration shall be the exclusive remedy of 
any arbitrable dispute.  Should any party to this Agreement 
pursue any arbitrable dispute by any method other than 
arbitration, the other party shall be entitled to recover 
from the party initiating the use of such method all 
damages, costs, expenses and attorneys' fees incurred as a 
result of the use of such method. Notwithstanding anything 
herein to the contrary, nothing in this Agreement shall 
purport to waive or in any way limit the right of any party 
to seek to enforce any judgment or decision on an 
arbitrable dispute in a court of competent jurisdiction.

        9. Confidentiality. 

                The Executive acknowledges that in the 
course of his employment with the Company he has acquired 
non-public privileged or confidential information and trade 
secrets concerning the operations, future plans and methods 
of doing business ("Proprietary Information") of the 
Company, its subsidiaries and affiliates; and the  
Executive agrees that it would be extremely damaging to the 
Company, its subsidiaries and affiliates if such 
Proprietary Information were disclosed to a competitor of 
the Company, its subsidiaries and affiliates or to any 
other person or corporation. The Executive understands and 
agrees that all Proprietary Information has been divulged 
to the Executive in confidence and further understands and 
agrees to keep all Proprietary Information secret and 
confidential (except for such information which is or 
becomes publicly available other than as a result of a 
breach by the Executive of this provision) without 
limitation in time. In view of the nature of the 
Executive's employment and the Proprietary Information the 
Executive has acquired during the course of such 
employment, the Executive likewise agrees that the Company, 
its subsidiaries and affiliates would be irreparably harmed 
by any disclosure of Proprietary Information in violation 
of the terms of this paragraph and that the Company, its 
subsidiaries and affiliates shall therefore be entitled to 
preliminary and/or permanent injunctive relief prohibiting 
the Executive from engaging in any activity or threatened 
activity in violation of the terms of this paragraph and to 
any other relief available to them. Inquiries regarding 
whether specific information constitutes Proprietary 
Information shall be directed to the Company's Senior Vice 
President, Public Policy (or, if such position is vacant, 
the Company's Chief Executive Officer), provided, that the 
Company shall not unreasonably classify information as 
Proprietary Information.

        10. Non-Solicitation of Employees. 

                The Executive recognizes that he possesses 
and will possess confidential information about other 
employees of the Company, its subsidiaries and affiliates 
relating to their education, experience, skills, abilities, 
compensation and benefits, and inter-personal relationships 
with customers of the Company, its subsidiaries and 
affiliates. The Executive recognizes that the information 
he possesses and will possess about these other employees 
is not generally known, is of substantial value to the 
Company, its subsidiaries and affiliates in developing 
their business and in securing and retaining customers, and 
has been and will be acquired by him because of his 
business position with the Company, its subsidiaries and 
affiliates. The  Executive agrees that, during the 
Employment Period and for a period of one (1) year 
thereafter, he will not, directly or indirectly, solicit or 
recruit any employee of the Company, its subsidiaries or 
affiliates for the purpose of being employed by him or by 
any competitor of the Company, its subsidiaries or 
affiliates on whose behalf he is acting as an agent, 
representative or employee and that he will not convey any 
such confidential information or trade secrets about other 
employees of the Company, its subsidiaries and affiliates 
to any other person; provided, however, that it shall not 
constitute a solicitation or recruitment of employment in 
violation of this paragraph to discuss employment 
opportunities with any employee of the Company, its 
subsidiaries or affiliates who has either first contacted 
the Executive or regarding whose employment the Executive 
has discussed with and received the written approval of the 
Company's Vice President, Human Resources (or, if such 
position is vacant, the Company's Chief Executive Officer), 
prior to making such solicitation or recruitment.  In view 
of the nature of the Executive's employment with the 
Company, the  Executive likewise agrees that the Company, 
its subsidiaries and affiliates would be irreparably harmed 
by any solicitation or recruitment in violation of the 
terms of this paragraph and that the Company, its 
subsidiaries and affiliates shall therefore be entitled to 
preliminary and/or permanent injunctive relief prohibiting 
the Executive from engaging in any activity or threatened 
activity in violation of the terms of this paragraph and to 
any other relief available to them.  

        11. Legal Fees.

                The Company shall pay to the Executive all 
legal fees and expenses (including but not limited to fees 
and expenses in connection with any arbitration) incurred 
by the Executive in disputing in good faith any issue 
arising under this Agreement relating to the termination of 
the Executive's employment or in seeking in good faith to 
obtain or enforce any benefit or right provided by this 
Agreement, but in each case only to the extent the 
arbitrator or court determines that the Executive had a 
reasonable basis for such claim.     

      12. Successors.

                (a) Assignment by Executive. This Agreement 
is personal to the Executive and without the prior written 
consent of the Company shall not be assign- able by the 
Executive otherwise than by will or the laws of descent and 
distribution.  This Agreement shall inure to the benefit of 
and be enforceable by the Executive's legal 
representatives.

                (b) Successors and Assigns of Company. This 
Agreement shall inure to the benefit of and be binding upon 
the Company, its successors and assigns. 
                (c) Assumption. The Company shall require 
any successor (whether direct or indirect, by purchase, 
merger, consolidation or otherwise) to all or substan- 
tially all of the business and/or assets of the Company to 
assume expressly and agree to perform this Agreement in the 
same manner and to the same extent that the Company would 
be required to perform it if no such succession had taken 
place. As used in this Agreement, "Company" shall mean the 
Company as hereinbefore defined and any successor to its 
businesses and/or assets as aforesaid that assumes and 
agrees to perform this Agreement by operation of law or 
otherwise. 

        13. Miscellaneous.

                (a) Governing Law. This Agreement shall be 
governed by and construed in accordance with the laws of 
the State of California, without reference to its 
principles of conflict of laws. The captions of this 
Agreement are not part of the provisions hereof and shall 
have no force or effect. This Agreement may not be amended, 
modified, repealed, waived, extended or discharged except 
by an agreement in writing signed by the party against whom 
enforcement of such amendment, modification, repeal, 
waiver, extension or discharge is sought. No person, other 
than pursuant to a resolution of the Board or a committee 
thereof, shall have authority on behalf of the Company to 
agree to amend, modify, repeal, waive, extend or discharge 
any provision of this Agreement or anything in reference 
thereto. 
                  (b) Notices. All notices and other 
communications hereunder shall be in writing and shall be 
given by hand delivery to the other party or by registered 
or certified mail, return receipt requested, postage 
prepaid, addressed, in either case, to the principal 
corporate offices of Pacific Enterprises or to such other 
address as either party shall have furnished to the other 
in writing in accordance herewith. Notices and 
communications shall be effective when actually received by 
the addressee. 
                (c) Severability. The invalidity or 
unenforceability of any provision of this Agreement shall 
not affect the validity or enforceability of any other 
provision of this Agreement.

                (d) Taxes. The Company may withhold from 
any amounts payable under this Agreement such federal, 
state or local taxes as shall be required to be withheld 
pursuant to any applicable law or regulation.

                (e) No Waiver. The Executive's or the 
Company's failure to insist upon strict compliance with any 
provision hereof or any other provision of this Agreement 
or the failure to assert any right the Executive or the 
Company may have hereunder, including, without limitation, 
the right of the Executive to terminate employment for Good 
Reason pursuant to Section 4(d) of this Agreement, or the 
right of the Company to terminate the Executive's 
employment for Cause pursuant to Section 4(b) of this 
Agreement shall not be deemed to be a waiver of such 
provision or right or any other provision or right of this 
Agreement. 

                 (f) Entire Agreement. This instrument 
contains the entire agreement of the Executive, the Company 
or any predecessor or subsidiary thereof with respect to 
the subject matter hereof, and all promises, 
representations, understandings, arrangements and prior 
agreements are merged herein and superseded hereby includ- 
ing, but not limited to, that certain Severance Agreement, 
dated October 11, 1996, between the Executive and Pacific 
Enterprises. Notwithstanding the foregoing, the provisions 
of any employee benefit or compensation plan, program or 
arrangement applicable to the Executive, including that 
certain Incentive Bonus Agreement, entered into between the 
Executive and Pacific Enterprises, shall remain in effect, 
except as expressly otherwise provided herein.

                IN WITNESS WHEREOF, the Executive and, 
pursuant to due authorization from its Board of Directors, 
the Company have caused this Agreement to be executed as of 
the day and year first above written.  MINERAL ENERGY 
COMPANY


  __________________________
  Kevin C. Sagara
  President

  __________________________
  Warren I. Mitchell

EXHIBIT A

GENERAL RELEASE


This GENERAL RELEASE (the "Agreement"), dated _______, is 
made by and between ___________________, a California 
corporation (the "Company") and _____________ ("you" or 
"your").

   WHEREAS, you and the Company have previously entered into 
that certain Employment Agreement dated _____________, 1996 
(the "Employment Agreement"); and

   WHEREAS, Section 5 of the Employment Agreement provides 
for the payment of severance benefits in the event of the 
termination of your employment under certain circumstances, 
subject to and conditioned upon your execution and non-
revocation of a general release of claims by you against the 
Company and its subsidiaries and affiliates.

   NOW, THEREFORE, in consideration of the premises and the 
mutual covenants herein contained, you and the Company 
hereby agree as follows:

   ONE:  Your signing of this Agreement confirms that your 
employment with the Company shall terminate at the close of 
business on ___________,or earlier upon our mutual 
agreement.

   TWO:  As a material inducement for the payment of 
benefits under Section 5 of that certain Employment 
Agreement between you and the Company, and except as 
otherwise provided in this Agreement, you and the Company 
hereby irrevocably and unconditionally release, acquit and 
forever discharge the other from any and all Claims either 
may have against the other.  For purposes of his Agreement 
and the preceding sentence, the words "Releasee" or 
"Releasees"
and "Claim" or "Claims," shall have the meanings set forth 
below:

   (a)The words "Releasee" or "Releasees" shall refer to the 
you and to the Company and each of the Company's owners, 
stockholders, predecessors, successors, assigns, agents, 
directors, officers, employees, representatives, attorneys, 
advisors, parent companies, divisions, subsidiaries, 
affiliates(and agents, directors, officers, employees, 
representatives, attorneys and advisors of such parent 
companies, divisions, subsidiaries and affiliates), and all 
persons acting by, through, under or in concert with any of 
them.

   (b)The words "Claim" or "Claims" shall refer to any 
charges, complaints, claims, liabilities, obligations, 
promises, agreements, controversies, damages, actions, 
causes of action, suits, rights, demands, costs, losses, 
debts and expenses (including attorneys' fees and costs 
actually incurred)of any nature whatsoever, known or 
unknown, suspected or unsuspected, which you or the Company 
now, in the past or, except as limited by law or regulation 
such as the Age Discrimination in Employment Act (ADEA), in 
the future may have, own or hold against any of the 
Releasees; provided, however, that the word "Claim" or 
"Claims" shall not refer to any charges, complaints, claims, 
liabilities, obligations, promises, agreements, 
controversies, damages, actions, causes of action, suits, 
rights, demands, costs, losses, debts and expenses 
(including attorneys' fees and costs actually incurred) 
arising under [identify severance, employee benefits, stock 
option and other agreements containing duties, rights 
obligations etc. of either party that are to remain 
operative].  Claims released pursuant to this Agreement by 
you and the Company include, but are not limited to, rights 
arising out of alleged violations of any contracts, express 
or implied, any tort, any claim that you failed to perform 
or negligently performed or breached your duties during 
employment at the Company, any legal restrictions on the 
Company's right to terminate employees or any federal, state 
or other governmental statute, regulation, or ordinance, 
including, without limitation: (1) Title VII of the Civil 
Rights Act of l964 (race, color, religion, sex and national 
origin discrimination); (2) 42 U.S.C Sec 1981 
(discrimination); (3) 29 U.S.C. Sec 621-634(age 
discrimination); (4) 29 U.S.C. Sec 206(d)(l) (equal pay); 
(5) 42 U.S.C. Sec 12101, et seq. (disability); (6) the 
California Constitution, Article I, Section 
8(discrimination); (7) the California Fair Employment and 
Housing Act (discrimination, including race, color, national 
origin, ancestry, physical handicap, medical condition, 
marital status, religion, sex or age); (8) California Labor 
Code Section 1102.1 (sexual orientation discrimination); (9) 
Executive Order 11246(race, color, religion, sex and 
national origin discrimination); (10) Executive Order 11141 
(age discrimination); (11) Sec 503 and 504 of the 
Rehabilitation Act of 1973 (handicap discrimination); (12) 
The Worker Adjustment and Retraining Act (WARN Act); (13) 
the California Labor Code (wages, hours, working conditions, 
benefits and other matters); (14) the Fair Labor Standards 
Act (wages, hours, working conditions and other matters); 
the Federal Employee Polygraph Protection Act (prohibits 
employer from requiring employee to take polygraph test as 
condition of employment); and (15) any federal, state or 
other governmental statute, regulation or ordinance which is 
similar to any of the statutes de-scribed in clauses (1) 
through (14).

   THREE:  You and the Company expressly waive and 
relinquish all rights and benefits afforded by any statute 
(including but not limited to Section 1542 of the Civil Code 
of the State of California) which limits the effect of are 
lease with respect to unknown claims.  You and the Company 
do so under-standing and acknowledging the significance of 
the release of unknown claims and the waiver of statutory 
protection against a release of unknown claims(including but 
not limited to Section 1542).  Section 1542 of the Civil 
Code of the State of California states as follows:

 "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE 
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT 
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM 
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE 
DEBTOR."

Thus, notwithstanding the provisions of Section 1542 or of 
any similar statute, and for the purpose of implementing a 
full and complete release and discharge of the Releasees, 
you and the Company expressly acknowledge that this 
Agreement is intended to include in its effect, without 
limitation, all Claims which are known and all Claims which 
you or the Company do not know or suspect to exist in your 
or the Company's favor at the time of execution of this 
Agreement and that this Agreement contemplates the 
extinguishment of all such Claims.

   FOUR:  The parties acknowledge that they might hereafter 
discover facts different from, or in addition to, those they 
now know or believe to be rue with respect to a Claim or 
Claims released herein, and they expressly agree to assume 
the risk of possible discovery of additional or different 
facts, and agree that this Agreement shall be and remain 
effective, in all respects, regardless of such additional or 
different discovered facts.

   FIVE:  You hereby represent and acknowledge that you have 
not filed any Claim of any kind against the Company or 
others released in this Agreement.  You further hereby 
expressly agree never to initiate against the Company or 
others released in this Agreement any administrative 
proceeding, lawsuit or any other legal or equitable 
proceeding of any kind asserting any Claims that are 
released in this Agreement.  

   The Company hereby represents and acknowledges that it 
has not filed any Claim of any kind against you or others 
released in this Agreement. The Company further hereby 
expressly agrees never to initiate against you or others 
released in this Agreement any administrative proceeding, 
lawsuit or any other legal or equitable proceeding of any 
kind asserting any Claims that are released in this 
Agreement.  

   SIX:  You hereby represent and agree that you have not 
assigned or transferred, or attempted to have assigned or 
transfer, to any person or entity, any of the Claims that 
you are releasing in this Agreement.

   The Company hereby represents and agrees that it has not 
assigned or transferred, or attempted to have assigned or 
transfer, to any person or entity, any of the Claims that it 
is releasing in this Agreement.

   SEVEN:  As a further material inducement to the Company 
to enter into this Agreement, you hereby agree to indemnify 
and hold each of the Releasees harmless from all loss, 
costs, damages, or expenses, including without limitation, 
attorneys' fees incurred by Releasees, arising out of any 
breach of this Agreement by you or the fact that any 
representation made in this Agreement by you was false when 
made.  

   EIGHT:  You and the Company represent and acknowledge 
that, in executing this Agreement, neither is relying upon 
any representation or statement not set forth in this 
Agreement or the Severance Agreement.

   NINE:   (a)This Agreement shall not in any way be 
construed as an admission by the Company that it has acted 
wrongfully with respect to you or any other person, or that 
you have any rights whatsoever against the Company, and the 
Company specifically disclaims any liability to or wrongful 
acts against you or any other person, on the part of itself, 
its employees or its agents.  This Agreement shall not in 
any way be construed as an admission by you that you have 
acted wrongfully with respect to the Company, or that you 
failed to perform your duties or negligently performed or 
breached your duties, or that the Company had good cause to 
terminate your employment.   (b)If you are a party or are 
threatened to be made a party to any proceeding by reason of 
the fact that you were an officer [or director] of the 
Company, the Company shall indemnify you against any 
expenses(including reasonable attorney fees provided that 
counsel has been approved by the Company prior to 
retention), judgments, fines, settlements, and other amounts 
actually or reasonably incurred by you in connection with 
that proceeding, provided that you acted in good faith and 
in a manner you reasonably believed to be in the best 
interest of the Company.  The limitations of California 
Corporations Code Section 317 shall apply to this assurance 
of indemnification.    (c) You agree to cooperate with the 
Company and its designated attorneys, representatives and 
agents in connection with any actual or threatened judicial, 
administrative or other legal or equitable proceeding in 
which the Company is or may be become involved.  Upon 
reasonable notice, you agree to meet with and provide to the 
Company or its designated attorneys, representatives or 
agents all information and knowledge you have relating to 
the subject matter of any such proceeding.

   TEN:  This Agreement is made and entered into in 
California. This Agreement shall in all respects be 
interpreted, enforced and governed by and under the laws of 
the State of California.  Any dispute about the validity, 
interpretation, effect or alleged violation of this 
Agreement (an "arbitrable dispute") must be submitted to 
arbitration in [Los Angeles][San Diego], California.  
Arbitration shall take place before an experienced 
employment arbitrator licensed to practice law in such state 
and selected in accordance with the Model Employment 
Arbitration Procedures of the American Arbitration 
Association. Arbitration shall be the exclusive remedy for 
any arbitrable dispute.  The arbitrator in any arbitrable 
dispute shall not have authority to modify or change the 
Agreement in any respect.  You and the Company shall each be 
responsible for payment of one-half the amount of the 
arbitrator's fee(s).  Should any party to this Agreement 
institute any legal action or administrative proceeding 
against the other with respect to any Claim waived by this 
Agreement or pursue any arbitrable dispute by any method 
other than arbitration, the prevailing party shall be 
entitled to recover from the initiating party all damages, 
costs, expenses and attorneys' fees incurred as a result of 
that action. The arbitrator's decision and/or award will be 
fully enforceable and subject to an entry of judgment by the 
Superior Court of the State of California for the County of 
[Los Angeles][San Diego].

   ELEVEN:  Both you and the Company understand that this 
Agreement is final and binding eight days after its 
execution and return.  Should you nevertheless attempt to 
challenge the enforceability of this Agreement as provided 
in Paragraph TEN or, in violation of that Paragraph, through 
litigation, as a further limitation on any right to make 
such a challenge, you shall initially tender to the Company, 
by certified check delivered to the Company, all monies 
received pursuant to Section 5 of the Employment Agreement, 
plus interest, and invite the Company to retain such monies 
and agree with you to cancel this Agreement and void the 
Company's obligations under Section 5 of the Employment 
Agreement.  In the event the Company accepts this offer, the 
Company shall retain such monies and this Agreement shall be 
canceled and the Company shall have no obligation under 
Section 5 of the Employment Agreement.  In the event the 
Company does not accept such offer, the Company shall so 
notify you, and shall place such monies in an interest-
bearing escrow account pending resolution of the dispute 
between you and the Company as to whether or not this 
Agreement and the Company's obligations under Section 5 of 
the Employment Agreement shall be set aside and/or otherwise 
rendered voidable or unenforceable.  Additionally, any 
consulting agreement then in effect between you and The 
Company shall be immediately rescinded with no requirement 
of notice.
   TWELVE:  Any notices required to be given under this 
Agreement shall be delivered either personally or by first 
class United States mail, postage prepaid, addressed to the 
respective parties as follows:

To Company:   [TO COME]

    Attn:  [TO COME]

To You:  
___________________
___________________
___________________

   THIRTEEN:  You understand and acknowledge that you have 
been given a period of 45 days to review and consider this 
Agreement (as well as statistical data on the persons 
eligible for similar benefits) before signing it and may use 
as much of this 45-day period as you wish prior to signing.  
You are encouraged, at your personal expense, to consult 
with an attorney before signing this Agreement.  You 
understand and acknowledge that whether or not you do so is 
your decision.  You may revoke this Agreement within seven 
days of signing it.  If you wish to revoke, the Company's 
Vice President, Human Resources must receive written notice 
from you no later than the close of business on the seventh 
day after you have signed the Agreement.  If revoked, this 
Agreement shall not be effective and enforceable and you 
will not receive payments or benefits under Section 5 of the 
Employment Agreement.

   FOURTEEN:  This Agreement constitutes the entire 
Agreement of the parties hereto and supersedes any and all 
other Agreements (except the Employment Agreement) with 
respect to the subject matter of this Agreement, whether 
written or oral, between you and the Company.  All 
modifications and amendments to this Agreement must be in 
writing and signed by the parties. 

   FIFTEEN:  Each party agrees, without further 
consideration, to sign or cause to be signed, and to deliver 
to the other party, any other documents and to take any 
other action as may be necessary to fulfill the obligations 
under this Agreement.  

   SIXTEEN:  If any provision of this Agreement or the 
application thereof is held invalid, the invalidity shall 
not affect other provisions or applications of the Agreement 
which can be given effect without the invalid provisions or 
application; and to this end the provisions of this 
Agreement are declared to be severable.

   SEVENTEEN:  This Agreement may be executed in 
counterparts.

I have read the foregoing General Release and I accept and 
agree to the provisions it contains and hereby execute it 
voluntarily and with full under-standing of its 
consequences.  I am aware it includes a release of all known 
or unknown claims.

DATED:____________________  
                               _____________________________   
DATED:____________________  

                               _____________________________    

   You acknowledge that you first received this Agreement on 
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EX-99

Exhibit 99.1

For more information contact:  
 
ENOVA CORPORATION - Doug Kline or Pat  
Riddle: (619) 696-4292  
 
After-hours pager: (619) 526-9555  
 
Internet: http://www.enova.com  
 
PACIFIC ENTERPRISES - Jeri Love: (213) 244- 
 
 
ENOVA CORPORATION AND PACIFIC ENTERPRISES  
ANNOUNCE 
STRATEGIC COMBINATION OF EQUALS  
 
- -- Combination to Benefit Shareholders and Customers of  
Both Companies --  
 
- -- Combination Builds on Increasing Competitive  
Environment  
 
in Energy and Energy-Related Services in California  
Marketplace --  
 
- -- New Company a "Natural Outgrowth" of California  
Energy  
Industry Restructuring --  
 
SAN DIEGO AND LOS ANGELES, Oct. 14, 1996 -- Enova   
Corporation and Pacific Enterprises today jointly  
announced  an agreement, which both Boards have  
unanimously approved,  for the combination of the two  
companies. This strategic  combination will combine  
Pacific Enterprises, the parent of  Southern California  
Gas Company, the largest natural gas  distribution  
company in the United States, with Enova  Corporation,  
the parent company of San Diego Gas &  Electric, the  
investor-owned utility with the lowest rates  in the  
State of California. The new company, to be   
headquartered in San Diego, will have a combined market   
value of $5.2 billion. 
 
Thomas A. Page, Chairman of Enova Corporation, and   
Willis B. Wood, Chairman and Chief Executive Officer of   
Pacific Enterprises, said, "We are very excited about  
the  company we are creating. The strategic combination  
of  Pacific Enterprises and Enova Corporation grows  
naturally  from the deregulation and electric industry  
restructuring  that is reshaping the energy industry in  
California as well  as throughout the nation. Our  
shareholders, communities and  customers we serve will  
all benefit from this combination.  This transaction  
strategically joins two excellent  companies of similar  
market capitalization, with similar  visions of the  
future of the industry, and with highly  complementary  
operations that are geographically  contiguous. The new  
combined company will pursue  unregulated businesses  
that will focus on providing  customers with new energy  
products and services in the  competitive marketplace  
arising from deregulation. This  will strengthen  
California's economy and spur the move to  an  
increasingly competitive energy industry."  
 
Pacific Enterprises shareholders will receive 1.5038  
shares  of the new parent company's common stock for  
each share of  Pacific Enterprises common stock they  
own, and Enova  Corporation shareholders will receive  
1.0 share of the new  parent company's common stock for  
each share of Enova  Corporation common stock. The  
combination will not amend  any other class of capital  
stock of Pacific Enterprises or  Enova Corporation, or  
their subsidiaries. The exchange of  shares for both  
Pacific Enterprises and Enova Corporation  shareholders  
is expected to be tax free, and the  transaction will  
be a pooling of interests for accounting  purposes.  
Enova Corporation and Pacific Enterprises expect  to  
set the new company's dividend at the rate of $1.56 per   
share, which is currently the dividend paid to Enova   
Corporation shareholders.  
 
Pacific Enterprises and Enova Corporation expect their   
combination to produce cost savings of approximately  
$1.2  billion over the next 10 years through synergies  
and  economies of scale. The cost savings will be  
derived mainly  from combining and reducing management  
and administrative  functions of both companies.  
Shareholders and customers  will share the benefits of  
these savings.  
 
The new company will have approximately 6 million  
utility  customers -- the largest number of customers  
of any  investor-owned energy utility in the United  
States -- with  the size and scope to position the new  
company to be a  prominent competitor in the emerging  
and increasingly  competitive unregulated energy  
services business. Pacific  Enterprises brings  
substantial gas expertise to complement  the gas  
expertise of Enova Corporation, and Enova  Corporation  
brings electric business knowledge to the  combination.  
The new company also will be financially  stronger. It  
will have significant operating cash flows and  a  
solidly capitalized balance sheet. These will enable it   
to be very competitive in pursuing new business   
opportunities in energy services.  
 
Headquarters for the new company will be located in San   
Diego. Pacific Enterprises' operating subsidiaries,   
including Southern California Gas Company, and Enova   
Corporation's operating subsidiaries, including San  
Diego  Gas & Electric, will continue to operate under  
their  existing names. The headquarters of the Southern  
California  Gas Company will stay in Los Angeles and  
the headquarters  of San Diego Gas & Electric will stay  
in San Diego.  
 
The new parent company will combine the high-quality   
management of Pacific Enterprises and Enova  
Corporation.  Richard D. Farman, President and Chief  
Operating Officer of  Pacific Enterprises, will become  
Chairman and Chief  Executive Officer; and Stephen L.  
Baum, President and Chief  Executive Officer of Enova  
Corporation, will become Vice  Chairman, President and  
Chief Operating Officer. Baum will  become CEO two  
years after the effective date of the  merger, and will  
add the title of Chairman by September  2000, when  
Farman retires. Baum will chair a transition  committee  
and coordinate its activities with the  concurrence of  
Farman. Warren Mitchell, President of  Southern  
California Gas Company, will become President and  the  
principal executive officer of the new company's   
regulated operations; and Donald E. Felsinger,  
President  and CEO of San Diego Gas & Electric, will  
become President  and the principal executive officer  
of the unregulated  businesses, both reporting to the  
new Office of the  Chairman which will consist of  
Farman and Baum. Thomas A.  Page, Chairman of Enova  
Corporation, will retire at the end  of December 1997,  
and Willis B. Wood, Chairman and Chief  Executive  
Officer of Pacific Enterprises, will retire upon   
completion of the transaction.  
 
The Board of the new company, which will include Farman  
and  Baum, will have an equal number of outside  
directors from  both companies.  
 
The combination, which is subject to regulatory  
approvals  and the approvals of the shareholders of  
both Enova  Corporation and Pacific Enterprises, is  
expected to close  by the end of 1997, consistent with  
the California Public  Utilities Commission's  
implementation of electric industry  restructuring in  
January 1998. In order to prepare for  competition as  
soon as possible, Pacific Enterprises and  Enova  
Corporation intend to form a new joint venture that   
will use their combined skills, capabilities and  
resources  to provide integrated energy and energy- 
related products  and services to select market  
segments. Headquarters of the  joint venture will be  
located in Los Angeles.  
 
Farman said, "The State of California will be a  
particular  beneficiary of our merger. The new  
California company will  be more competitive. Utility  
customers will directly  benefit through lower costs.  
The combination of the cost- management expertise and  
service-quality-related skills of  the two companies  
will strengthen the combined enterprise  and benefit  
customers and shareholders alike. The new  company will  
be a vigorous competitor with the two giant  utilities  
in the state and their unregulated affiliates, as  well  
as with out-of-state utilities and energy providers.   
Our new, stronger company will ultimately provide new  
jobs  for California in our growth-oriented unregulated   
businesses."  
 
"Companies that will succeed in the future energy  
industry  are those that will be able to deliver energy  
and energy- related services in whichever form  
customers prefer, at the  most competitive prices.  
Through this transaction, we will  create an enterprise  
that can develop and market new  products and services,  
while our utility customers will  continue to do  
business with San Diego Gas & Electric  Company and  
Southern California Gas Company, which they  already  
know and trust. Our companies have achieved an   
outstanding record of customer satisfaction and will   
continue to maintain a strong commitment to safety and   
excellent customer service," said Baum.  
 
On a pro forma basis, the new company will have a   
relatively balanced revenue base from its operations,  
with  about 60% of its revenue from gas operations,  
about 35%  from electric operations, with the rest  
coming from other  operations.  
 
In addition to the cost savings realized by the utility   
subsidiaries, significant incremental revenues for the  
new  company are expected to result from plans of the   
unregulated segment to market competitive products and   
services in California, and grow nationally and   
internationally.  
 
Baum said, "Shareholders of both companies will benefit   
from the long-term growth opportunities and from   
substantial cost savings that the combined entity will   
enjoy. We believe that Enova Corporation shareholders  
will  find the new company's enhanced long-term growth  
potential  particularly attractive, while Pacific  
Enterprises'  shareholders will also benefit from an  
increase in their  dividend."  
 
"Individually, Pacific Enterprises and Enova  
Corporation  are financially strong companies with a  
history of  innovation and customer focus, and a strong  
commitment to  workforce diversity, minority  
procurement and support of  the communities they  
serve," said Farman. "Together, we  will be even  
stronger in all these areas. We look forward  to  
becoming a leading energy company as our industry   
increasingly moves towards deregulation both regionally  
and  nationally. Both companies have begun to offer  
energy- related services in out-of-state markets, and  
in the  international arena, Pacific Enterprises has  
utility  investments in Argentina and the two companies  
are partners  in new energy-distribution ventures in  
Mexico. Our new  joint venture will further our  
combined efforts and shared  vision."  
Pacific Enterprises (NYSE:PET) is a Los Angeles-based   
energy services company whose principal subsidiary is   
Southern California Gas Company, the nation's largest   
natural gas distribution utility.  
 
Founded 110 years ago in San Francisco as the Pacific   
Lighting Corporation, Pacific Enterprises originally   
marketed gas lighting. Over the years, the company  
acquired  several small gas utility systems in Southern  
California,  gradually combining them into Southern  
California Gas  Company. More recently, the company  
strategically realigned  its operations in 1995 to  
focus its people and resources  more closely on  
customer needs to become a more effective  competitor  
in the utility/energy marketplace.  
 
With over 4.7 million meters in 535 communities,  
Southern  California Gas Company's service territory  
covers 23,000  square miles, and a population of 17  
million. It is the  largest of Pacific Enterprises'  
subsidiaries, which include  Pacific Enterprises  
International, and Energy Management  Services. Pacific  
Enterprises has interests in interstate  and offshore  
natural gas pipelines, international utility   
operations, electricity generation through alternative   
energy sources and centralized heating and cooling   
operations for large building complexes.  
 
Pacific Enterprises has $2.3 billion in revenues, a  
market  capitalization of $2.7 billion, and $4.8  
billion in total  assets.  
 
Enova Corporation (NYSE:ENA), based in San Diego, is a   
leading energy management company providing  
electricity,  gas and value-added products and  
services, with $1.87  billion in revenues, $4.7 billion  
in assets and 3,900  employees. Enova Corporation is  
the parent company of San  Diego Gas & Electric (SDG&E)  
and six other U.S.-based  subsidiaries -- Enova Energy,  
Enova International, Enova  Technologies, Enova  
Financial, Califia and Pacific  Diversified Capital.   
 
SDG&E accounted for 97 percent of Enova Corporation's  
1995  revenues. SDG&E is an operating public utility  
that  provides regulated electric service to 1.2  
million  customers in San Diego and southern Orange  
Counties, and  regulated gas service to 700,000  
customers in San Diego  County. The SDG&E service area  
encompasses 4,100 square  miles, covering two counties  
and 25 cities.  
 
SDG&E purchases 62 percent of its power from other   
producers and generates the rest from its two fossil- 
fuel  plants in Carlsbad, Calif., and Chula Vista,  
Calif., and  the San Onofre Nuclear Generating Station  
(SONGS) in San  Clemente, Calif., in which SDG&E owns a  
20-percent stake.  
 
SDG&E is the 37th largest electric and gas utility in  
the  nation in total revenues and the 20th largest in  
total  customers. Enova Corporation is the largest  
public company  in San Diego in terms of both total  
revenues and net  income. ###