COLLATERAL ASSIGNMENT LIFE INSURANCE PROGRAM

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                                                                   Exhibit 10(z)

                      NEW ENGLAND ELECTRIC SYSTEM COMPANIES

                     LIFE INSURANCE PROGRAM FOR EXECUTIVES I

                                       FOR

                                CHERYL A. LAFLEUR

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                                TABLE OF CONTENTS

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Section 1.  The Program..................................................     1
Section 2.  Prior Insurance Program......................................     2
Section 3.  Vesting and Forfeiture.......................................     2
Section 4.  Life Insurance Policy........................................     2
Section 5.  Death Benefit................................................     4
Section 6.  Termination of Agreement.....................................     4
Section 7.  Benefits Upon Termination of Employment During
            the Executive's Lifetime.....................................     5
Section 8.  Policy Premiums..............................................     6
Section 9.  Return of Premiums...........................................     7
Section 10. Withdrawals from Policy; Release of Assignment...............     7
Section 11. Liability and Limitation of obligation.......................     7
Section 12. Named Fiduciary, Determination of Benefits, Claims Procedure
            and Administration...........................................     8
Section 13. Notices......................................................    10
Section 14. Binding Effect...............................................    11
Section 15. Governing Law................................................    11
Section 16. Further Documentation........................................    11
Section 17. Amendments and Transfers Within the New England
            Electric System-Companies....................................    11
Section 18. Interpretation of Agreement..................................    11
Section 19. No Implied Right to Employment...............................    12
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                              COLLATERAL ASSIGNMENT

                             LIFE INSURANCE PROGRAM

     Agreement entered into as of the 1st day of January, 1996, between New
England Power Service Company, a Massachusetts corporation (the Company), and
Cheryl A. LaFleur (the Executive).

     Section 1. The Program

     The program provides the Executive death benefits and post-retirement
ownership of the cash assets of the related policy. The program is designed with
a goal of three times the Executive's base pay (rounded up to the nearest even
whole thousand) at the time of death (the Target Benefit). During employment,
the first $50,000 of the coverage is to be provided by the Company's group term
life insurance policy.

     For the purposes of this Agreement, "annual base pay" means the annualized
compensation being paid to the Executive on the day of determination (or, if
greater, the highest compensation paid to the Executive during any 12-month
period of employment), including compensation deferred under other plans but
excluding bonuses (including NEES Goals) and contributions made by the Company
to or under any form of employee benefit program and employer contributions
under the New England Electric System Companies incentive Thrift Plan, and
"final annual base pay" means the Executive's annualized base pay on the last
day of employment (or, if greater, the highest compensation paid to the
Executive during any 12-month period of employment).

     Section 2. Prior Insurance Program

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     The Executive hereby waives the benefits under the Company's group
term-life insurance policy, and the New England Electric System Companies Life
Insurance Program for Executive II to the extent that the benefit provided to
the Executive's beneficiaries, in accordance with Section 5, from the Policy (as
hereinafter defined) equals the Target Benefit. This waiver does not extend to
any optional benefits under the group term-life policy. To the extent that such
waiver is ineffective, the amount of the death benefit provided under the
Policy and otherwise payable hereunder to the beneficiary or beneficiaries
designated by the Executive shall be correspondingly reduced and the amount
payable to the Company shall be correspondingly increased.

     Section 3. Vesting and Forfeiture

     Subject to the provisions of Section 6, the Executive is 100% vested in his
benefits under this Program.

     Section 4. Life Insurance Policy

     One or more split-dollar life insurance policies listed in Exhibit A hereto
(the Policy) have been or will be purchased on the life of the Executive by the
Company. The issuer or issuers of the Policy are hereinafter referred to as the
Insurer. Purchase of insurance policies either now or at later dates may require
proof of insurability at that time.

     To the extent that necessary insurance policies are not reasonably
available at a later date, benefits will be provided under the Company's group
term-life insurance policy so that the total death benefit to the Executive's
beneficiaries during his employment is three times base pay.

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     (a) Interest in the Policy

     The Executive shall be the sole owner of the Policy and may exercise all
ownership rights granted to the owner thereof by the terms of the Policy,
except as may otherwise be provided herein.

     Except as otherwise provided herein, the Executive shall not sell, assign,
transfer, borrow against, surrender, or cancel the Policy, change the
beneficiary designation provision, or terminate the dividend election without
the express written consent of the Company.

     (b) Collateral Assignment

     To secure the right of the Company to the Excess Value and/or the Company's
Cost (both as hereafter defined), the Executive will, contemporaneously
herewith, assign the Policy to the Company as collateral, using a form
substantially similar to that attached hereto as Exhibit B. The collateral
assignment of the Policy to the Company hereunder shall not be terminated,
altered, or amended by the Executive, without the express written consent of the
Company.

     (c) Assignment of Executive's Interest

     The Executive shall have the right to make an absolute assignment of his
entire interest, or any portion thereof, in the Policy at any time to any person
or persons, subject to the collateral assignment of the policy to the Company
pursuant to subsection (b) hereof. Upon delivery of a signed copy of such
assignment to the Company, all, or such portion, of the rights, obligations, and
duties of the Executive thereunder (subject to the collateral assignment of the
Company) and hereunder shall pass to and be binding upon such assignee

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(including the right to make further assignments) and the Executive shall have
no further interest whatsoever in the Policy, or such portions.

     (d) Company's Cost

     For the purposes of this Agreement, the Company's Cost means the amount of
the premiums on the Policy paid by it hereunder, less any withdrawals by the
Company from the Policy in accordance with Section 10.

     (e) Dividends

     Any dividend declared on the Policy shall be applied to purchase paid-up
additional insurance on the life of the Executive. The dividend election
provisions of the Policy shall conform to the provisions hereof.

     Section 5. Death Benefit

     Upon the death of the Executive, the beneficiary or beneficiaries
designated by the Executive shall be paid directly, in the manner and in the
amount or amounts provided in the beneficiary designation provision of the
Policy, a death benefit equal to the smaller of (a) the death benefit payable
under the Policy or (b) the Target Benefit. After such payment to such
beneficiary, the balance, if any, of the Policy death benefit (the Excess Value)
shall be paid to the Company.

     Section 6. Termination of Agreement

     (a) This Agreement shall terminate during the Executive's lifetime, without
notice, upon the occurrence of any of the following events:

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          (i)  total cessation of the Company's business;

          (ii) bankruptcy, receivership, or dissolution of the Company;

          (iii) termination for cause of the Executive's employment by the
               Company or by any direct or indirect subsidiary of the New
               England Electric System or

          (iv) payment of the Company's Cost by the Executive to the Company.

     (b) After termination of this Agreement under this section 6, the Executive
will not be permitted to re-enroll in the program. Upon such termination, the
Company may immediately withdraw its Cost from the Policy. The Executive will
receive no life insurance coverage under the New England Electric System
companies' group life insurance plan.

     Section 7. Benefits Upon Termination of Employment During the Executive's
                Lifetime.

     (a) If the Executive has Retired from the Company before the tenth
anniversary of a Policy, the Company will continue to pay premiums on that
Policy in accordance with section 8 until such tenth anniversary. On or after
such tenth anniversary, the Company may withdraw from the Policy amounts equal
to the Company's Cost. The Company may delay withdrawals from the Policy in
order to preserve the Policy's tax treatment.

          For the purposes of this Agreement, the Executive will be considered
to have Retired from the Company if the termination of employment occurs (i) at
age 61 or older with a minimum of 10 years of service (as defined in Final
Average Pay Pension Plan I) or (ii) at age 55 or older with age plus years of
service equal to at least 85.

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     (b) If the Executive terminated employment but has not Retired from the
Company before the tenth anniversary of the first Policy, the Company may
immediately withdraw its Cost from the Polic