EMPLOYMENT AGREEMENT

Exhibit 10-17

EMPLOYMENT AGREEMENT

          This AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of December 31, 2006 (the "Agreement"), by and among Energy East Corporation, a New York corporation (the "Company"), Energy East Management Corporation, a Delaware corporation ("EEMC"), and Wesley W. von Schack (the "Executive"), amends and restates that certain Employment Agreement dated as of May 19, 2000, as amended by Agreement dated as of August 1, 2001, as amended and restated by Agreement dated February 8, 2002, and as amended and restated by Agreement dated as of July 1, 2004 between the Company and the Executive.

          The Executive has reached retirement age under the terms of the Employment Agreement dated as of May 19, 2000, as amended by Agreement dated as of August 1, 2001, as amended and restated by Agreement dated February 8, 2002, and as amended and restated by Agreement dated as of July 1, 2004. The independent members of the Board of Directors of the Company (the "Board") and the Board of Directors of EEMC have determined that it is in the best interests of the Company and the shareholders that the Executive continue his employment as a member of the management of the Company and of EEMC.

          The Executive is willing to commit himself to serve the Company and EEMC, on the terms and conditions herein provided.

          In order to effect the foregoing, the Company, EEMC and the Executive wish to enter into an employment agreement on the terms and conditions set forth below. Accordingly, in consideration of the premises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

          1.      Defined Terms . The definitions of capitalized terms used in this Agreement, unless otherwise defined herein, are provided in the last Section hereof.

          2.      Employment . EEMC hereby agrees to employ the Executive, and the Executive hereby agrees to serve the Company and EEMC, on the terms and conditions set forth herein, during the term of this Agreement (the "Term").

          3.      Term of Agreement . The Term commenced on July 1, 2004 and ends on June 30, 2007, unless further extended as hereinafter provided. Commencing on July 1, 2007 and each July 1, thereafter, the Term of this Agreement shall automatically be extended for one (1) additional year unless, not later than the May 1, immediately preceding each such July 1, the Company (upon authorization by the Board) or the Executive shall have given notice not to extend this Agreement.

          4.      Position and Duties . The Executive shall serve as Chairman, President and Chief Executive Officer of the Company and President and Chief Executive Officer of EEMC and shall have such responsibilities, duties and authority that are consistent with such positions as may from time to time be assigned to the Executive by the Board. In addition, the Executive shall serve as Chairman of the NYSEG Board until removed or not re-elected. The Executive shall devote substantially all his working time and efforts to the business and affairs of the Company and its subsidiaries; provided, however, that the Executive may also serve on the boards of directors or trustees of other companies and organizations, as long as such service does not substantially interfere with the performance of his duties hereunder, and are consistent with the Company's Corporate Governance Guidelines.

          5.       Compensation and Related Matters .

                  5.1      Base Salary . EEMC shall pay the Executive a base salary ("Base Salary") during the period of the Executive's employment hereunder, which shall be at an initial rate of Nine Hundred Thousand Dollars ($900,000.00) per annum. The Base Salary shall be paid in substantially equal bi-weekly installments, in arrears. The Base Salary may be discretionarily increased by the Board from time to time as the Board deems appropriate in its reasonable business judgment. The Base Salary in effect from time to time shall not be decreased during the Term. During the period of the Executive's employment hereunder, the Board shall conduct an annual review of the Executive's compensation.

                  Compensation of the Executive by Base Salary payments shall not be deemed exclusive and shall not prevent the Executive from participating in any other compensation or benefit plan of the Company. The Base Salary payments (including any increased Base Salary payments) hereunder shall not in any way limit or reduce any other obligation of the Company or EEMC hereunder, and no other compensation, benefit or payment hereunder shall in any way limit or reduce the obligation of EEMC to pay the Executive's Base Salary hereunder.

                  5.2      Benefit and Incentive Plans . The Executive shall be entitled to participate in or receive compensation and/or benefits, as applicable, under all "employee benefit plans" (as defined in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended from time to time ("ERISA")), all incentive compensation plans, and all employee benefit arrangements made available by the Company now or during the period of the Executive's employment hereunder to its executives and key management employees of its subsidiaries, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements; provided, however, that there shall be no duplication of the compensation and benefits created by this Agreement. The Executive's participation in such plans and arrangements shall be on an appropriate level, as determined by the Board.

                  Notwithstanding any provision of the Company's Supplemental Executive Retirement Plan (or any successor plan) that may be to the contrary, if the Executive's employment with the Company and EEMC terminates for any reason subsequent to July 1, 2004, there shall instead be paid to the Executive under Section 6 of the Company's Supplemental Executive Retirement Plan (or any successor plan) an amount that shall be determined by (i) giving the Executive, for purposes of that plan, service credit for 40 years of service, (ii) deeming the Executive to be a "Key Person" as defined in, and for all purposes under, that plan and (iii) deeming the Executive's "highest three consecutive years of earnings within the last five years of employment" for purposes of that plan to be equal to the Executive's Base Salary at the rate in effect at the time his employment terminates plus the average of the highest three consecutive incentive compensation awards earned by the Executive within the last five years of employment under the AEIP (as hereinafter defined), or any successor annual executive incentive compensation plan.

                  The following provisions shall apply in determining the Executive's lump sum benefit payable under Section 6(C) of the Company's Supplemental Executive Retirement Plan (or any successor plan):

• • • • (A)     The lump sum benefit under Section 6(C) of the Company's Supplemental Executive Retirement Plan (or any successor plan) shall be determined by employing the annual rate of interest on 30-year Treasury securities in effect as of (i) December 31, 2003 (i.e. 5.07%), or (ii) the last day of the year preceding the year of distribution, whichever is lower.

        (B)     The sum of (x) the lump sum the Executive is eligible to receive under any defined benefit plan adopted or sponsored by NYSEG, as determined pursuant to the terms of that plan, (y) the present value of any Social Security benefits which the Executive is eligible or expected to become eligible to receive (calculated by employing the interest rate set forth in paragraph A, above), and (z) the lump sum benefit under Section 6(C) of the Company's Supplemental Executive Retirement Plan (or any successor plan) (calculated by employing the interest rate set forth in paragraph A, above) at the time of termination of employment shall be no less than the sum of the amounts described in (x), (y) and (z) that the Executive would have received had he retired on May 1, 2004.

        (C)     Should the Executive die while an active employee of the Company, his estate will receive a lump sum amount under Section 6(C) of the Company's Supplemental Executive Retirement Plan (or any successor plan) equal to the lump sum amount he would have received under the Company's Supplemental Executive Retirement Plan (or any successor plan) if he had retired from the Company on the day prior to his death (calculated by employing the interest rate set forth in paragraph A, above). This benefit shall be in lieu of any benefits that would otherwise be payable to the Executive's surviving spouse pursuant to Section 6 (B) of the Company's Supplemental Executive Retirement Plan (or any successor plan).

                  5.3      Expenses . Upon presentation of reasonably adequate documentation to EEMC, the Executive shall receive prompt reimbursement from EEMC for all reasonable and customary business expenses incurred by the Executive in accordance with EEMC policy in performing services hereunder. EEMC agrees to reimburse the Executive for any expenses he incurs in moving himself and his family from New York, NY to any state in the Northeast.

                  5.4      Vacation . The Executive shall be entitled to five (5) weeks of vacation during each year of this Agreement, or such greater period as the Board shall approve, without reduction in salary or other benefits.

                  5.5      Restricted Stock Plan . If the Executive is an active employee of the Company on the dates set forth on the schedule included as part of this Section 5.5, he will receive shares of restricted stock under the Company's Restricted Stock Plan (or any successor plan) as described in the schedule. The shares received by the Executive pursuant to this Section 5.5 will be governed by the terms of the Company's Restricted Stock Plan (or any successor plan), including but not limited to the vesting and transfer of such shares.

          6.       Compensation Related to Disability . During the Term of this Agreement, during any period that the Executive fails to perform the Executive's full-time duties with the Company and EEMC as a result of incapacity due to physical or mental illness, EEMC shall pay the Executive's Base Salary to the Executive at the rate in effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period, until the Executive's employment is terminated by the Company for Disability; provided, however, that such Base Salary payments shall be reduced by the sum of the amounts, if any, payable to the Executive at or prior to the time of any such Base Salary payment under disability benefit plans of the Company or under the Social Security disability insurance program, which amounts were not previously applied to reduce any such Base Salary payment. Subject to Section 8 and the second and third paragraphs of Section 5.2 hereof, after completing the expense reimbursements required by Section 5.3 hereof and making the payments and providing the benefits required by this Section 6, the Compa