EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into as of March 31, 2005, by and between Northeast Utilities Service Company, a Connecticut corporation ("NUSCO"), with its principal office in Berlin, Connecticut, and David R. McHale, a resident of Burlington, Connecticut ("Executive").

WHEREAS, Executive will be employed as Senior Vice President and Chief Financial Officer of Northeast Utilities ("NU") and holds senior executive positions with certain of the subsidiaries of NU (NU and the Affiliates, as such term is defined in Section 6.1(a), of NU being referred to collectively herein as the "Company") and both parties desire to enter into an agreement to reflect Executive's contribution to the Company's business in Executive's executive capacities and to provide for Executive's continued employment by the Company, upon the terms and conditions set forth herein:

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

1.

Employment.  The Company hereby agrees to continue the employment of Executive, and Executive hereby accepts such employment and agrees to perform Executive's duties and responsibilities, in accordance with the terms, conditions and provisions hereinafter set forth.

1.1.

Employment Term.  The term of Executive's employment under this Agreement shall commence as of March 31, 2005 (the "Effective Date") and shall continue until December 31, 2006, unless sooner terminated in accordance with Section 5 or Section 6 hereof, and shall automatically renew for periods of one year unless one party gives written notice to the other, at least sixty days prior to December 31, 2006 or at least sixty days prior to the end of any one-year renewal period, that the Agreement shall not be further extended.  The period commencing as of the Effective Date and ending on the date on which the term of Executive's employment under the Agreement shall terminate is hereinafter referred to as the "Employment Term".

1.2.

Duties and Responsibilities.  Executive shall serve in such senior positions as directed by NUSCO's Board of Directors (the "Board") or the Board of Trustees (the "Trustees") of NU that provide Executive with duties and compensation that are substantially equivalent to Executive's current position in terms of duties and responsibilities.  During the Employment Term, Executive shall perform all duties and accept all responsibilities incident to such positions as may be assigned to Executive by the Board.

1.3.

Extent of Service.  During the Employment Term, Executive agrees to use Executive's best efforts to carry out Executive's duties and responsibilities under Section 1.2 hereof and, consistent with the other provisions of this Agreement, to devote substantially all Executive's business time, attention and energy thereto.  Except as provided in Section 3 hereof, the foregoing shall not be construed as preventing Executive from making minority investments in other businesses or enterprises provided that Executive agrees not to become engaged in any other business activity which, in the reasonable judgment of the Board, is likely to interfere with Executive's ability to discharge Executive's duties and responsibilities to the Company.

1.4.

Base Salary.  For all the services rendered by Executive hereunder, NUSCO shall pay Executive a base salary ("Base Salary"), commencing on the Effective Date, at the annual rate then being paid to Executive by NUSCO, payable in installments at such times as NUSCO customarily pays its other senior level executives (but in any event no less often than monthly).  Executive's Base Salary shall be reviewed annually for appropriate adjustment (but shall not be reduced below that in effect on the Effective Date without Executive's written consent) by the Trustees pursuant to its normal performance review policies for senior level executives.  Executive's annual Base Salary shall not be reduced below $275,000 without Executive's written consent.

1.5.

Retirement and Benefit Coverages.  During the Employment Term, Executive shall be entitled to participate in all (a) employee pension and retirement plans and programs ("Retirement Plans") and (b) welfare benefit plans and programs ("Benefit Coverages"), in each case made available to the Company's senior level executives as a group or to its employees generally, as such Retirement Plans or Benefit Coverages may be in effect from time to time, including, without limitation, the Company's Supplemental Executive Retirement Plan for Officers (the "Supplemental Plan"), both as to the Make-Whole Benefit and the Target Benefit.

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