SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934

Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) of
Section 240.14a 12

Public Service Company of Colorado
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________
Name of Person(s) Filing Proxy Statement

Payment of Filing Fee (check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6 (i)(2).
( ) $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.

1) Title of each class of securities to which
transaction applies:
__________________________
2) Aggregate number of securities to which transaction
applies:
__________________________
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11, (1)

4) Proposed maximum aggregate value of transaction:
__________________________
(1) Set forth amount on which the filing fee is calculated
and state how it was determined.

( ) Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

1) Amount previously paid:
2) Form, Schedule or Registration Statement No:
3) Filing Party:
4) Date Filed:

April 10, 1995

Dear Shareholder:

You are invited to attend the Annual Meeting of Shareholders (the
"Meeting") of Public Service Company of Colorado (the "Company"). The
1995 Meeting will be held:

DATE: May 11, 1995
TIME: 10:00 A.M., Denver time
PLACE: Adam's Mark Hotel, 1550 Court Place
Grand Ballroom - Lobby Level
Denver, Colorado

The attached Notice of Annual Meeting and Proxy Statement cover the
formal business of the Meeting. The Meeting will consider the election
of Directors and the approval of independent public accountants. The
accompanying Proxy Statement contains discussion of the matters to be
considered. At the Meeting, your management will report on the
operations of the Company, and Directors and officers of the Company
will respond to questions that shareholders may have.

The Board of Directors encourages you to promptly complete, date,
sign and return your Proxy Card. Return of the Proxy Card indicates
your interest in the Company's affairs. If you attend the Meeting and
wish to vote your shares personally, you may revoke your proxy at that
time.

Sincerely yours,

/s/D. D. Hock

Chairman of the Board

Notice of Annual Meeting of Shareholders
May 11, 1995

To the Shareholders of the Company:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of Public Service Company of Colorado (the "Company") will be
held on the 11th day of May, 1995, at the Adam's Mark Hotel, Grand
Ballroom, 1550 Court Place, Denver, Colorado, at 10:00 A.M., Denver
time, for the purposes of (1) electing a Board of Directors for the
ensuing year, (2) approving the appointment of Arthur Andersen & Co. as
independent public accountants for the 1995 calendar year, and (3)
transacting such other business as may properly come before the Meeting
or any adjournment or adjournments thereof.

The holders of record of Common Stock at the close of business on
March 24, 1995, will be entitled to vote at the Meeting and at any
adjournments thereof. Proxy soliciting material is being mailed to
shareholders commencing on April 10, 1995.

By order of the Board of Directors.

Dated: April 10, 1995.

W. WAYNE BROWN
Corporate Secretary

The shareholders of the Company are urged to attend the Meeting, if
possible. Please complete, date and sign the enclosed form of proxy now
and mail it promptly in the self-addressed, postage paid envelope
enclosed for that purpose, even if you presently plan to attend the
Meeting. Any shareholder present at the Meeting may nevertheless vote
personally on all matters with respect to which such shareholder is
entitled to vote.

PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation by and on behalf of the Board of Directors of Public
Service Company of Colorado, a Colorado corporation (the "Company"), of
proxies to be voted at the Annual Meeting of Shareholders (the
"Meeting") of the Company to be held on May 11, 1995, at the time and
place and for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders and at any and all adjournments of the
Meeting.

A form of proxy for use at the Meeting is enclosed. Any shareholder
signing a proxy has the power to revoke the same in writing, addressed
to the Secretary of the Company, or in person at the Meeting at any time
before the proxy is exercised.

The entire cost of the solicitation of proxies will be borne by the
Company. Solicitations will be made by the Company primarily by use of
the mails. Additional solicitation of proxies of brokers, banks,
nominees and institutional investors will be made pursuant to the
special engagement of Beacon Hill Partners, Inc., at a cost to the
Company of approximately $3,500, plus out-of-pocket expenses. If
necessary to obtain reasonable representation of shareholders at the
Meeting, solicitations by the Company may also be made by telephone,
facsimile, or personal interview. The Company will request brokers,
banks, or other persons holding stock in their names or in the names of
their nominees to forward proxy material to the beneficial owners of
such stock or request authority for the execution of the proxies and
will reimburse such brokers or other persons for their expenses in so
doing.

At March 24, 1995, the Company had outstanding 62,692,927 shares of
Common Stock, par value $5 per share, entitled to one vote per share.
In lieu of closing the stock transfer books of the Company, the Board of
Directors fixed March 24, 1995, as the record date for the determination
of shareholders entitled to vote at the Meeting and at any and all
adjournments thereof. Colorado Law and the By-laws of the Company
provide that a majority of the shares entitled to vote shall constitute
a quorum at a meeting of shareholders of the Company.

The Annual Report to shareholders for the year ended December 31,
1994, which is not a part of this Proxy Statement, was mailed commencing
on March 24, 1995, under separate cover to shareholders of record.

The Board of Directors urges shareholders to complete, date, sign
and return their proxies promptly.

ELECTION OF DIRECTORS

A board of fourteen Directors of the Company (the "Directors") is to
be elected at the Meeting. These Directors will hold office until the
next annual election and until their successors shall be duly elected
and qualified.

The nominees below will be elected Directors of the Company if they
each receive the affirmative vote of a majority of the shares
represented at the Meeting and entitled to vote. The indication of a
"withholding" of a vote on a nominee will have the same effect as a vote
against the particular nominee. The Restated Articles of Incorporation
of the Company do not permit cumulative voting.

Shares represented by an executed proxy in the form enclosed will be
voted for the election of the following nominees as Directors of the
Company, unless otherwise directed:

WAYNE H. BRUNETTI
Wayne H. Brunetti is president and chief operating
officer of Public Service Co. of Colorado. Since
assuming this position in July 1994, he is responsible
[PHOTO] for managing all operating functions within the
company. Mr. Brunetti is the former president and
chief executive officer of Management Systems
International, a Florida management consulting firm
that he founded in 1991. Prior to that, he was
executive vice president of Florida Power & Light
Company, where he had responsibility for more than
half of that company's operations. Mr. Brunetti began
Age 52 his business career in 1964 in Florida Power & Light's
Director since 1994 treasury department. He worked his way through
positions including assistant comptroller, assistant
to the vice president of public affairs, vice
president of energy management and group vice
president. His career at Florida Power & Light
spanned nearly 28 years before he left the company to
form his own consulting business. Mr. Brunetti has
been active in various professional and civic groups,
including serving on numerous committees with the
Electric Power Research Institute and the Edison
Electric Institute. He holds a B.S. in Business
Administration from the University of Florida, and he
is a graduate of the Harvard Business School's Program
for Management Development.

COLLIS P. CHANDLER, JR. (g)
Collis P. Chandler, Jr. is chairman and chief
executive officer of Chandler & Associates, Inc.
Chandler & Associates, Inc. is engaged in the oil and
[PHOTO] gas exploration and production business with emphasis
in the Rocky Mountain region. He is also president of
Chandler-Simpson, Inc. Mr. Chandler founded the
Chandler Companies in 1955. He received a B.S. in
Mechanical Engineering from Purdue University in 1948
and is a Registered Professional Engineer in Colorado.
Mr. Chandler is a member of the National Petroleum
Council and served as its chairman from 1976 to 1979.
Age 68 In 1979, he received the Secretary of Energy's
Director since 1985 Distinguished Service Medal for his service as
chairman of the Council. He is a director of the
American Petroleum Institute, and in 1994 was the
recipient of its highest award, the Gold Medal for
Distinguished Achievement. He is a former director of
the Gas Research Institute and a past chairman of the
Natural Gas Supply Committee, a Washington, D. C.-
based committee of large and small producers of
natural gas. He is a past president of the Purdue
University Alumni Association and a former member of

the Purdue Foundation Board of Governors. He is also
a member of the Rocky Mountain Association of
Geologists, the American Association of Petroleum
Landsmen and the Society of Petroleum Engineers.

DR. DORIS M. DRURY (a)(h)
Dr. Doris M. Drury is the John J. Sullivan Professor
[PHOTO] of Free Enterprise Economics at Regis University, a
position she has held since January 1990. She was
also executive director of the MBA Program until July
1993 when Dr. Drury became special assistant to the
president of Regis University. Prior to her
positions with Regis University, she was a professor
of economics at the University of Denver for 24 years.
She is also president of the Center for Business and
Age 68 Economic Forecasting, Inc. Dr. Drury is a director of
Director since 1975 Equitable of Iowa Companies and Blue Cross/Blue Shield
of Colorado. She served on the Colorado Bankers
Association's Project Consensus Task Force and on the
Governor's Management and Efficiency Study Committee.
Dr. Drury was previously chairperson of the Board of
Directors of the Federal Reserve Bank of Kansas City,
Missouri, and chairperson of the Department of
Economics and Public Affairs Program and director of
the Division of Research at the University of Denver.

THOMAS T. FARLEY (c)
Thomas T. Farley is a senior partner in the law firm
[PHOTO] of Petersen & Fonda, P.C. in Pueblo, Colorado, which
he joined in 1974. He received his LL.B. from the
University of Colorado and a B.S. in Economics from
the University of Santa Clara, where he is now a
member of its Board of Regents. He was formerly
president of the governing boards of Colorado State
University, the University of Southern Colorado and
Ft. Lewis College, and he served as chairman of the
Age 60 Colorado Wildlife Commission. He also served as
Director since 1983 Minority Leader of the Colorado House of
Representatives from 1967 to 1975. Mr. Farley is a

recipient of distinguished service awards from the
Board of Regents of the University of Colorado and the
University of Southern Colorado, as well as the
Foremost Among Fifty Award from Sierra Club
International. He is a director of Health Systems
International, Inc. (f\k\a Qual-Med, Inc.), a publicly
traded, multi-state health maintenance organization
and a member of its Executive and Audit Committees.
He is also a community director of Norwest Pueblo and
Norwest Sunset, and a member of Norwest Bank
Colorado's statewide Community Reinvestment Committee.
He is a member of the Colorado Forum and is a trustee
of the Farley Foundation and the Great Outdoors
Colorado Trust Fund.

GAYLE L. GREER (c)
Gayle L. Greer is vice president of Time Warner Cable
(successor to American Television & Communications
Corporation) and group vice president for Time Warner
[PHOTO] Cable's National Division. She has held such
positions since 1984. Prior to 1984, she was manager,
director and vice president of new market development
for Time Warner Cable. Ms. Greer serves on the
Community Board of Bank One-Denver and is a director
for Blue Cross/Blue Shield of Colorado. She is a
Age 53 member of the Executive Committee of Mile High United
Director since 1986 Way, The Women's Forum of Denver, the National
Association of Minorities in Cable Foundation, the
Women in Cable Foundation and Ocean Journey Aquarium.
She is a recipient of the INROADS Corporate Achiever
Award, the Martin Luther King Social Responsibility
Award and the National Cable Television Association's
Vanguard Award for Leadership. Ms. Greer received a
B.S. in Political Science and Sociology and a Masters
in Social Work from the University of Houston.

A. BARRY HIRSCHFELD (e)
A. Barry Hirschfeld is president of A. B. Hirschfeld
[PHOTO] Press, Inc., a commercial printing company. He has
held this position since 1984. He is the third
generation to head this family-owned business, which
was founded in 1907. Mr. Hirschfeld is also founder
and co-owner of Colorado Carphone Corporation, which
was organized in 1983. He received his M.B.A. from
the University of Denver and a B.S. in Business
Administration from California State Polytechnic
Age 52 University. Mr. Hirschfeld and his wife received the
Director since 1988 1991 University of Denver Alumni Association award for
community service. Mr. Hirschfeld serves on the
boards of directors of the Boettcher Foundation;
Mountain States Employers Council, where he serves as
vice chairman/chairman elect; the Colorado Business

Committee for the Arts; the Rocky Mountain Multiple
Sclerosis Center; the National Conference of
Christians and Jews; the Allied Jewish Federation
Endowment Fund; the Boy Scouts of America; the Cherry
Creek Arts Festival; and the National Jewish Center,
where he serves as vice president of the board. He is
also a member of the Scientific and Cultural
Facilities District Board for Colorado and a member of
the KUSA 9Who Care Board of Governors. Mr. Hirschfeld
is past chairman of the Denver Metro Convention and
Visitors Bureau and the Denver Art Museum; past
president of the Metro Denver Executive Club; past
vice president of Graland Country Day School and a
past board member of the Allied Jewish Federation.

D. D. HOCK (b)
D. D. Hock is chairman and chief executive officer of
[PHOTO] Public Service Co. of Colorado. He began his career
with Public Service Co. in 1962 as director of
auditing. In 1973, he was elected assistant vice
president of accounting and controller, in 1976 he
became vice president of accounting and secretary, and
in 1985 he was elected senior vice president of
utility services and to the board of directors. Mr.
Hock became president and chief operating officer in
Age 59 1986 and assumed the position of president and chief
Director since 1985 executive officer in October 1988. In December 1988,
he was elected chairman of the board effective
February 1989. Mr. Hock received a B.S. in Accounting
from the University of Colorado, Boulder. He serves
on the board of trustees for Mile High United Way and
on its campaign cabinet. He also serves on the boards
of the Denver Area Council/Boy Scouts of America; the
Committee for Economic Development; the Colorado
Business Alliance for Youth; the University of
Colorado President's Business Council; the University
of Colorado Foundation; and the Economic Club of
Colorado. He also serves as director of the Stapleton
Redevelopment Foundation, the Greater Denver
Corporation, and the Mountain States Employers
Council. He is on the boards of directors of the
Edison Electric Institute, Electric Power Research
Institute, the Western Energy Supply and Transmission
(WEST) Associates, and the Association of Edison
Illuminating Companies. He also serves on the Western
Regional Council Board of Trustees. Mr. Hock is a
member of the Colorado Forum, Colorado Society and
American Institute of Certified Public Accountants,
the Western Stock Show Association Board of Directors
and The Rotary Club of Denver.

GEORGE B. McKINLEY (a)(g)
George B. McKinley is active in the banking,
[PHOTO] investment and cattle businesses. Mr. McKinley is
chairman and chief executive officer of First National
Banks in Evanston and Kemmerer, Wyoming, and he is a
director and president of First McKinley Corporation,
a bank holding company. He served as president and
chief executive officer of C.C.B., Inc., and of the
Central Bancorporation, Inc. (Denver), until November
1985. Mr. McKinley is active in the American,
Age 67 Colorado and Wyoming bankers associations and is a
Director since 1976 former director of the Wyoming Bankers Association.

WILL F. NICHOLSON, JR. (a)(g)
Will F. Nicholson, Jr. is chairman of Rocky Mountain
[PHOTO] Bank Card System Inc., a credit card company. On
February 28, 1995, he retired as chairman, director,
chief executive officer and president of Colorado
National Bankshares, Inc., a bank holding company. He
was elected president of Colorado National Bankshares,
Inc. in 1975 and chairman and chief executive officer
in 1985. Mr. Nicholson serves as chairman of the
Greater Denver Corporation and as a director of First
Age 65 Bank System, Inc.; Boys and Girls Clubs of Metro
Director since 1981 Denver; HealthONE; the Colorado Golf Association; the
National Western Stock Show Association; Downtown
Denver, Inc.; the Greater Denver Chamber of Commerce;
and the U.S. Chamber of Commerce. He is chairman of
Visa, U.S.A., Inc. and a director of Visa
International. Mr. Nicholson has participated in many
civic and charitable enterprises, including the Denver
Urban Renewal Authority, the Denver Board of Water
Commissioners, the Judicial Selection Committee for
the Second Judicial District, the United States Golf
Association and Mile High United Way.

J. MICHAEL POWERS (d)
J. Michael Powers has been president of Powers Brick &
[PHOTO] Tile of Cheyenne and Fort Collins and of Powers
Products Co., a specialty construction company in
Cheyenne and Denver, since 1974. A native of
Cheyenne, Wyoming, Mr. Powers is a director of the
American National Bank - Cheyenne. He is past
chairman of Cheyenne LEADS, an economic development
organization, and has also served as president of the
Age 52 Cheyenne Chamber of Commerce. Mr. Powers is a 1965
Director since 1978 graduate of the University of Arizona.

THOMAS E. RODRIGUEZ (c)
[PHOTO] Thomas E. Rodriguez is a CPA in Colorado and has been
president and general manager of Thomas E. Rodriguez &
Assoc., P.C., a certified public accounting firm,
since 1985. Mr. Rodriguez served as a director and
president of Rodriguez, Roach & Assoc., P.C. from 1982
to 1985. He is a director of Mercy Housing, Inc. and
Accurate Machining, Inc. He is a trustee of the
Colorado Historical Foundation and the American Tax
Policy Institute in Washington, D. C., as well as
Age 50 president of the Colorado Association of Hispanic CPAs
Director since 1986 and the Archdiocesan Finance Council of Denver. Mr.
Rodriguez has served since 1982 as an Appeals Court
Judge for the Selective Service System. Until 1993,
he served as a director of the Federal Reserve Bank in
Kansas City, and in 1985 he was president of the
National Association of Hispanic CPAs. Mr. Rodriguez
is a past president of the Latin Chamber of Commerce;
and a past director of the Executive Committee of the
SBA in Washington, D. C., the Denver Chamber of
Commerce and Skyline Office Products. He has also
served as chairman of the Leadership Denver Selection
Committee and was a member of the Colorado Hispanic
Advisory Council, the Minority Energy Task Force for
Colorado, and the Colorado Small Business Council. He
was named Colorado Accountant Advocate of the Year in
1983 and Colorado Small Businessman of the Year in
1982. Mr. Rodriguez was also named one of the 10
outstanding business and professional leaders by the
publishers of the Minority Business and Professional
Directory. He received a B.S. in Business and
Accounting from Colorado State University.

[PHOTO] RODNEY E. SLIFER (e)
Rodney E. Slifer is a partner in Slifer, Smith &
Age 60 Frampton/Vail Associates LLC, a diversified real
Director since 1988 estate company. He served as president of Slifer &

Company from 1968 until 1989. He is currently a
director of Alpine Banks of Colorado, a position he
has held since 1983. Mr. Slifer is vice president and
a board member of the Vail Valley Foundation and co-
founder and director of the Jerry Ford Invitational
Golf Tournament. Mr. Slifer has served as mayor and a
member of the Town Council for the Town of Vail; a
board member of Colorado Open Lands, a member of the
Urban Land Institute and a board member of the
University of Colorado Real Estate Council.

W. THOMAS STEPHENS (f)(g)
W. Thomas Stephens is chairman, president and chief
executive officer of Manville Corporation, an
[PHOTO] international manufacturing and natural resources
company. Mr. Stephens began his career with Manville
Corporation in 1963. In October 1982, he was elected
president of Manville Forest Products Corporation, a
subsidiary of Manville Corporation. He was elected
chief financial officer and executive vice president
of Manville Corporation in December 1984, president in
Age 52 April 1986, and chief executive officer in September
Director since 1989 1986. He has been a member of the Manville
Corporation Board since March 1986, and became its
chairman in June 1990. Mr. Stephens serves on the
boards of directors of Riverwood Corporation and Ball
Corporation. He is also a member of The Business
Roundtable and The Conference Board. Mr. Stephens
received his B.S. and M.S. degrees in Industrial
Engineering from the University of Arkansas.

ROBERT G. TOINTON (a)(g)
Robert G. Tointon is president and chief executive
[PHOTO] officer of Phelps-Tointon, Inc., a position he assumed
in June 1989. Phelps-Tointon, Inc. is a specialty
construction contractor formed by Mr. Tointon in June
1989 as a spin-off of certain assets of Phelps, Inc.,
where he served as president since 1982. Phelps-
Tointon, Inc. has four operating divisions: Rocky
Mountain Prestress, Southern Steel Company, Phelps-
Tointon Millwork and Armor Safe Corporation. Prior to
Age 61 1982, Mr. Tointon was president of Hensel Phelps
Director since 1988 Construction Company. Mr. Tointon is a director of
the Writer Corporation and a former director of
Mountain Bell and Bank One of Colorado. Mr. Tointon
is chairman of Agenda 21 and a member of the Greeley
Rotary Club and the Colorado Forum.

NOTES
The age of each Director is as of December 31, 1994.

(a) Member of Executive Committee.
(b) Chairperson of Executive Committee.
(c) Member of Audit Committee.
(d) Chairperson of Audit Committee.
(e) Member of Pension Investment Committee.
(f) Chairperson of Pension Investment Committee.
(g) Member of Compensation Committee.
(h) Chairperson of Compensation Committee.

If, at the time of the Meeting, any of these nominees will be unable
to serve in the capacity for which he or she is nominated or will not be
a candidate, an event which the Board of Directors does not anticipate,
it is the intention of the persons designated as proxies to vote, in
their discretion, for other nominees.

The Company has a standing Executive Committee which exercises,
subject to limitations provided by law, all the authority of the Board
of Directors in the management of the Company between the meetings of
the Board of Directors. The Executive Committee met two times during
1994.

The Company has a standing Audit Committee, which held nine meetings
during 1994. The functions of the Audit Committee are to select and
recommend to the Board of Directors a firm of independent public
accountants to audit annually the books and records of the Company and
its consolidated subsidiary companies; to review the scope of such
audit; to receive and review the audit reports and recommendations; to
transmit such audit reports and recommendations to the Board of
Directors; to review the internal control procedures of the Company and
its consolidated subsidiary companies and recommend to the Board of
Directors any changes deemed necessary in such procedures; and to
perform such other functions as the Board of Directors from time to time
may delegate to the Audit Committee.

The Company has a standing Pension Investment Committee, which
provides investment oversight for the assets of the Company's Employees'
Retirement Plan and the Employees' Savings and Stock Ownership Plan.
The Pension Investment Committee appoints executives responsible for
the management of pension plan assets, and approves investment
objectives and policy guidelines for them to follow. The Pension
Investment Committee receives regular reports on the status of pension
plan and savings plan assets and reports at least annually to the Board
of Directors. The Pension Investment Committee held two meetings in
1994.

The Company has a standing Compensation Committee, which reviews
performance of and recommends salaries and other forms of compensation

for executive officers. The Compensation Committee annually reviews the
process of establishing salaries and wages of Company employees; reviews
the process of management development and long-range planning for
Company development; and reviews and makes recommendations regarding
fees and other compensation for Directors. In addition, the
Compensation Committee is responsible for the oversight of the Omnibus
Incentive Plan, the appointment of an executive officer responsible for
day to day management of such plan, and the approval of the guidelines
for the granting of awards under the Omnibus Incentive Plan. The
Compensation Committee met eight times during 1994.

Sixteen meetings of the Board of Directors were held during 1994.
All incumbent Directors attended 75% or more of the aggregate of the
meetings of the Board and the committees on which they served in 1994.
The Company does not have a nominating committee, but the Executive
Committee functions in that capacity. Shareholders wishing to nominate
candidate(s) for future consideration by the Executive Committee may do
so by writing to the Secretary of the Company, at the address shown on
the cover of this proxy, giving the candidate's name, biographical data
and qualifications. Nominations must be received by September 30 of the
year preceding the annual meeting date.

Security Ownership of Management and Directors
as of January 31, 1995

Title of Class Name of Beneficial Owner Amount and nature % of class
of (d)
(a) beneficial ownership
(c)

Common Stock Wayne H. Brunetti 4,000
Common Stock Collis P. Chandler, Jr. (1) 7,201
Common Stock Dr. Doris M. Drury 1,608
Common Stock Thomas T. Farley (2) 3,085
Common Stock Gayle L. Greer 579
Common Stock A. Barry Hirschfeld (3) 4,329
Common Stock Delwin D. Hock (4) 39,891(e)
Common Stock George B. McKinley 1,000
Common Stock Will F. Nicholson (5) 2,110
Common Stock J. Michael Powers (6) 5,284
Common Stock Thomas E. Rodriguez (7) 1,701
Common Stock Rodney E. Slifer 7,661
Common Stock W. Thomas Stephens 2,023
Common Stock Robert G. Tointon (8) 5,000
Common Stock Richard C. Kelly (9) 8,868(e)
Common Stock A. Clegg Crawford 3,892(e)
Common Stock Marilyn E. Taylor 4,037(e)
Common Stock Directors & Executive Officers 122,424(e)
as a Group (b)
Preferred Stock Directors & Executive Officers 0
as a Group (b)
Notes

(a) Common Stock listed in the table represents the Company's Common Stock,
$5 par value; Preferred Stock listed in the table represents the
Company's Cumulative Preferred Stock, $100 par value.

(b) There are a total of 23 Executive Officers and Directors.

(c) The common shares represented above include those shares, if any, held
under the Company's Employees' Savings and Stock Ownership Plan (the
"Savings Plan").

(d) On January 31, 1995, the percentage of shares beneficially owned by any
Director or named Executive Officer, or by all Directors and Executive
Officers as a group, does not exceed one percent of each class of
securities described above.

(e) The number of shares includes those which the following have the right to
acquire as of February 22, 1995 through the exercise of vested options
granted under the Omnibus Incentive Plan: Mr. Hock, 17,285 shares; Mr.
Brunetti, 0 shares; Mr. Kelly, 6,200 shares; Mr. A. Clegg Crawford, 3,273
shares; Ms. Taylor, 2,893 shares; and all executive officers as a group,
39,294 shares.

Unless otherwise specified, each Director and named Executive Officer has
sole voting and sole investment power with respect to the shares indicated.

(1) Mr. Chandler's wife owns 300 of these shares, ownership of which Mr.
Chandler disclaims. In addition, Mr. Chandler shares investment power
with Chandler-Simpson, Inc., of which he is President, with respect to
4,597 of these shares.

(2) Included in the total amount are 2,565 common shares held in a family
trust of which Mr. Farley is beneficiary. Mr. Farley has no voting power
but shares investment power with respect to these shares.

(3) Mr. Hirschfeld's wife owns 1,231 of these shares; Mr. Hirschfeld
disclaims ownership of these shares.

(4) Mr. Hock shares voting and investment power with his wife with respect to
18,954 of these shares.

(5) Mr. Nicholson's wife owns 500 of these shares; Mr. Nicholson disclaims
ownership of these shares.

(6) Mr. Powers' son owns 500 of these shares; Mr. Powers disclaims ownership
of these shares.

(7) Mr. Rodriguez's wife is custodian and has sole investment and voting
power for their minor children with regard to 901 of these shares. Also,
Mr. Rodriguez's wife owns 331 of these shares. Mr. Rodriguez disclaims
ownership of these 1,232 shares.

(8) Mr. Tointon shares voting and investment power with respect to these
shares with Phelps-Tointon, Inc., of which he is President and Chief
Executive Officer.

(9) Mr. Kelly's wife owns 263 of these shares; Mr. Kelly disclaims ownership
of these shares.

Compliance With Section 16(a) of the Securities Exchange Act

Based solely upon a review of Forms 3, 4 and 5 and written representation
furnished to the Company, the Company believes that all Directors and officers
filed in a timely manner their reports required under Section 16(a) of the
Securities Exchange Act of 1934, as amended.

COMPENSATION OF EXECUTIVE OFFICERS
AND DIRECTORS

Report of the Compensation Committee on Executive Compensation

The Compensation Committee of the Board of Directors (the "Committee")
is composed entirely of independent outside Directors. The Board has delegated
to the Committee the responsibility for establishing and administering the
Company's base salary system, executive annual and long-term incentive
compensation plans, and benefit programs.

A primary objective of the Committee regarding executive compensation is
to provide a total compensation package which, as a whole, will enable the
Company to attract, retain and motivate a high-quality executive management
team that will be focused on enhancing shareholder value.

A guiding principle used in the development and administration of the
Company's executive compensation plans is to align the interests of executive
management with those of shareholders and customers. One of the ways this is
achieved is by establishing plans that compensate executives on the basis of
corporate, business unit, and individual performance goals. The plans include
equity-based incentives so that the executives are motivated on an annual and
long-term basis to respond to business challenges and opportunities as owners,
not just as employees.

Each year, the Committee reviews the total executive compensation
program (which includes base salaries, annual and long-term incentives,
benefits and perquisites). This review is conducted with the assistance of
independent outside experts, including compensation consultants. In
establishing compensation policies and levels, the Committee considers all
elements of total compensation.

The Omnibus Budget Reconciliation Act was passed by the U.S. Congress
during 1993. Several provisions of the Act impact executive compensation. One
of the provisions resulted in the enactment of Section 162(m) of the Internal
Revenue Code of 1986, as amended. This section generally limits the corporate
deduction for compensation paid during a year to any executive officer named
in the proxy statement to $1 million, unless the compensation is performance
based. The Committee, along with the Company's independent auditors, legal
counsel, and compensation consultants, have conducted an in-depth review of
the potential impact of these provisions of the Act on the Company. Aggregate
compensation levels in 1994 did not exceed $1 million and are not expected to
in 1995 for any executive officer named in the proxy statement. Therefore, we
believe Section 162(m) will not impact the Company's tax deduction for 1994 or
1995 compensation.

Base Salaries

Base salaries for executives are reviewed by the Committee annually. In
determining appropriate base salary levels, the Committee considers factors
such as responsibilities, experience, individual performance, internal equity,
and pay practices of other companies in the utility industry. Formal
weightings are not assigned to these factors. In general, base salaries are
targeted at or near the 50th percentile for the utility industry. We believe
this objective allows the Company to attract and retain top quality executive
talent, and the continuity of management enhances the Company's ability to
achieve strategic objectives designed to benefit shareholders and customers.
Overall, 1994 base salaries for all executives, including Mr. Hock, were in
line with the 50th percentile.

For compensation comparison purposes, data was collected from public and
private surveys composed of utility companies which are similar to the Company
in terms of sales volumes, lines of business, employment levels, customer mix,
and service areas. The primary survey group of over 100 utilities includes
almost all of the companies included in the S&P Electric Power Group, which is
depicted in the Cumulative Five-Year Total Return Graph, as well as other
utilities. We believe the S&P Electric Power Group is a representative cross
section of the survey companies used for compensation comparisons and is
appropriate for inclusion in the graph.

Annual Incentives

Executives have the opportunity to earn annual incentive awards under
the Omnibus Incentive Plan. The purpose of these awards is to promote the
achievement of Company financial and strategic objectives which are designed
to benefit shareholders and customers, focus executive attention on pre-
established goals, and recognize individual performance while fostering team
performance. The Committee believes that annual incentive awards serve to
communicate Company goals to the executives and motivate executives not only
to achieve but also potentially to exceed these goals. The Committee further
believes that having a significant portion of executive compensation at risk
fosters meeting these goals.

In 1994, target awards were set for 15 executive officers, including all
named executive officers. Target awards are expressed as a percentage of base
salary, which in 1994 was 40% for Mr. Hock and ranged from 25% to 35% for all
other named executive officers. Target awards for Mr. Hock and the other
named executive officers are equivalent to average levels in the utility
industry.

Each executive earns the right to receive an award if pre-established
corporate goals (based on earnings per share) are met. In addition, the

Committee may adjust these awards based on its subjective assessment of
business unit and individual performance. This assessment focuses on factors
such as customer service, actual resource allocations relative to budget,
other strategic business unit factors, and individual performance; however,
formal weightings are not assigned to these factors. Achievement of 100
percent of goals would result in the target amount, with achievement of
between 90 and 110 percent of goals resulting in a lesser or greater award.
Actual awards are payable in cash or a combination of restricted stock (one-
third) and cash (two-thirds). The Committee believes paying bonuses partially
in restricted stock reinforces the Company's principal business objective of
enhancing shareholder value as it aligns the interests of executives with
those of shareholders. Actual annual incentive awards for 1994 for Mr. Hock
and the named executive officers were calculated based on corporate
performance that was between 95 percent and 100 percent of the earnings per
share goal.

Stock Options

Stock options were granted in 1994 to 15 executives, including Mr. Hock
and the named executive officers. The grants are made under the Omnibus
Incentive Plan and are designed to link the interests of executives to
improvement in long-term shareholder value. Award levels have been targeted
at or below the 50th percentile in the utility industry.

Stock options vest ratably during the three-year period immediately
following the date of grant. If vested, they may be exercised any time during
the ten-year period following the date of grant. The stock option grants made
to Mr. Hock and the executive officers are based on the value of the stock on
the date of grant, competitive practices, and individual contributions. No
formal weightings have been established for these criteria.

Dividend Equivalents

To further strengthen the tie between executive compensation and
shareholder value, the 15 executives who received stock options were granted a
target number of dividend equivalents under the Omnibus Incentive Plan.
Payment of the dividend equivalents is subject to the achievement of earnings
per share goals over a three-year performance period. The goals are
established on an annual basis and are the same as those used for annual
incentive awards. Attainment of 90 percent of the earnings per share goals
represents the threshold at which 50 percent of the awarded dividend
equivalents can be earned. Attainment of the target earnings per share goals
(100%) will result in the executive earning 100 percent of the dividend
equivalents awarded for that particular performance period. The maximum amount
of dividend equivalents (150%) will be earned if at least 110 percent of the
earnings per share goals are attained. Performance is assessed each year, and

based on the schedule described above, a percentage award is calculated.
Payment of dividend equivalents is dependent upon the average of the annual
percentage awards during the entire performance period. In determining the
average for the three-year period, any year in which the minimum performance
(threshold) is not achieved, the percentage award is included as zero.
Although the Company's achievement of between 95 and 100 percent of the
established goal in 1994 resulted in an annual award, the actual percentage of
dividend equivalents granted in 1994 which will be paid is dependent on
performance during each year of the entire 1994 to 1996 performance period.

The amounts to be paid in early 1995, which are reported in the Summary
Compensation Table, reflect performance during 1992, 1993, and 1994. Average
performance during those years was below target and resulted in awards of
between 50 and 60 percent of target. This award level is slightly above the
minimum level.

The number of dividend equivalents granted to Mr. Hock and the executive
officers was based on the number of unvested stock options from 1993 and 1994,
as well as dividend-equivalent awards in 1992. Stock option and dividend
equivalent grants for 1994 for the Chief Executive Officer and the named
executive officers as a group remained below the 50th percentile.

Compensation Committee Members
Dr. Doris M. Drury, Chairman
Collis P. Chandler, Jr.
George B. McKinley
Will F. Nicholson, Jr.
W. Thomas Stephens
Robert G. Tointon

Summary Compensation Table
Annual Compensation Long-term Compensation
Awards All other
Name and principal position compen-
Year Awards Payouts sation
Salary ($) Bonus ($) Other Restricted Securities LTIP ($) (d)
(a) annual stock Underlying payouts
compen- awards Options/ ($)
sation ($)(c) SAR's (#)
($) (b)

Delwin D. Hock 1994 $428,014 $197,648 $0 22,700 $17,160 $19,260
Chairman of the Board, 1993 425,012 53,035 26,265 14,578 21,376
President and 1992 410,027 50,000 41,045
Chief Executive Officer

Wayne H. Brunetti 1994 148,320 58,251 123,085 17,000 0 0
President and Chief Operating 1993
Officer 1992

Richard C. Kelly 1994 215,005 49,970 24,756 8,200 5,631 10,362
Sr. V.P. Finance, 1993 211,674 27,108 13,292 5,200 11,113
Administration and 1992 194,217 20,000 9,426
Chief Financial Officer

A. Clegg Crawford 1994 167,000 27,165 13,335 4,200 3,175 4,755
V.P. Electric Production 1993 165,513 15,509 7,491 2,810 5,265
1992 158,077 10,000 1,135

Marilyn E. Taylor 1994 150,007 24,424 11,998 3,700 2,789 6,750
V.P. Human Resources 1993 148,339 11,826 5,674 2,489 6,300
1992 139,337 6,120

(a) The amounts shown in the "Bonus" column for 1994 represent the cash
awards earned under the Omnibus Incentive Plan for financial performance in
1994. These awards were made in February 1995. In accordance with the plan
guidelines, the entire award amount can be paid in cash or two-thirds of the
award may be paid in cash and one-third in the form of restricted stock. At
the election of each executive officer, all or a portion of the award may be
deferred into the Executive Savings Plan. Mr. Hock's award was $131,497 and
2,164 shares ($65,731) of restricted stock. However, Mr. Hock elected to
defer the value of the entire award into the Executive Savings Plan.
Accordingly, both the cash portion and the value of the restricted stock
portion of Mr. Hock's 1994 award are reflected in the "Bonus" column. Mr.

Brunetti's reported bonus amount also includes a hiring bonus of $25,000. In
addition, Mr. Hock and each of the named executive officers, except Mr.
Brunetti, received a bonus of $420 under the 1994 Employee Incentive Plan.

(b) Perquisites and other personal benefits do not exceed the lesser of
either $50,000 or 10% of the total annual salary and bonus reported for the
named executive officers.

(c) The amounts shown in the "Restricted Stock Awards" column for 1994
reflect the value (as of the date of grant in February 1995) of the restricted
stock awards made under the Omnibus Incentive Plan described in footnote (a).
The restricted stock amount reported for Mr. Brunetti also includes a hiring
bonus of 4,000 shares (valued at $106,500 as of the date of grant) of
restricted stock.

Aggregate restricted stock holdings as of the February 1995 grant are as
follows: Mr. Hock held 824 ($24,205) shares of restricted stock; Mr. Brunetti
held 4,546 ($133,539) shares of restricted stock; Mr. Kelly held 1,232
($36,190) shares of restricted stock; Mr. Crawford held 674 ($19,799) shares
of restricted stock; and Ms. Taylor held 573 ($16,832) shares of restricted
stock. The value of the shares reported in this paragraph were calculated
using the Company's 1994 year end stock price of $29.375.

Dividends are paid on restricted stock when and as paid on the Company's
Common Stock. Restrictions lapse two years from the date of grant, except for
the shares granted to Mr. Brunetti as part of his hiring bonus. The
restrictions on those shares lapse three years from the date of grant.

(d) The amounts represented in the "All Other Compensation" column reflect
the total of the matching contributions made under the Employees' Savings and
Stock Ownership Plan (the "ESOP") and the matching contributions provided by
the Executive Savings Plan. The Executive Savings Plan allows the named
executives to receive credits for Company contributions to which they would be
entitled under the ESOP if pre-tax deferral contributions were not limited by
federal income tax laws. In accordance with the provisions of the Executive
Savings Plan, the 1992, and in the case of Mr. Kelly, the 1993 and 1994
amounts also include Company contributions for the years 1989, 1990 and 1991.
In 1994, the value of contributions made under the ESOP to Messrs. Hock,
Brunetti, Kelly, Crawford and Ms. Taylor were $6,750, $0, $6,750, $4,755 and
$6,750 respectively. The value of the contributions made under the Executive
Savings Plan in 1994 to Messrs. Hock, Brunetti, Kelly, Crawford and Ms. Taylor
were $12,510, $0, $3,612, $0 and $0 respectively.

Options/SAR Grants in Last Fiscal Year
Individual Grants
Name Number of
securities
underlying % of Total
options/ options/SARS Exercise
SARS granted to or base Grant date
granted employees in price Expiration present value
(#)(a) fiscal year ($/Sh) Date ($)(b)

Delwin D. Hock 22,700 15.16% $29.000 2/22/04 $84,104
Wayne H. Brunetti 17,000 11.36% $26.625 7/18/04 $48,229
Richard C. Kelly 8,200 5.48% $29.000 2/22/04 $30,381
A. Clegg Crawford 4,200 2.81% $29.000 2/22/04 $15,561
Marilyn E. Taylor 3,700 2.47% $29.000 2/22/04 $13,709

(a) All options were granted to executive officers by the Compensation
Committee of the Board of Directors on February 22, 1994, except in the case
of Mr. Brunetti whose options were granted on July 18, 1994. The options vest
and may be exercisable only to the extent of 33 1/3% on the first anniversary
date of the grant and to the same extent on the second anniversary and third
anniversary. Such rights to exercise will be cumulative to the extent not
exercised. All options expire 10 years from the date of grant.

(b) These amounts represent a theoretical present valuation based on the
Black Scholes Option Pricing Model as adjusted for dividends. The values in
the column are estimated based on an option price of $3.71 for messers. Hock,
Kelly, Crawford, and Ms. Taylor and $2.84 for Mr. Brunetti. The option prices
were derived using the following assumptions:

1. the time to exercise is the option life of 10 years;
2. the risk free rate is 6.13% (6.21% in the case of Mr. Brunetti), the
interest rate on 10-year treasury strips on January 3, 1994;
3. the option strike price is $29; ($26.625 in the case of Mr. Brunetti)
4. the stock price at grant date is $29; ($26.625 in the case of Mr.
Brunetti)
5. the standard deviation of PSCo Common Stock, which is a measure of the
volatility of the stock, is 16.97%; and
6. future dividends were assumed to stay constant at $2.00 and were
discounted at a rate of 10.13% (10.21% in the case of Mr. Brunetti).

Executives may not sell or assign these options, which have value only to the
extent of future stock price appreciation. These amounts or any of the
assumptions should not be used to predict future performance of stock price or
dividends.

Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values

Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options/SARS
Options/SARs at FY-End ($)
at FY-End (#) (a)

Name Shares Value Realized Exercisable/ Exercisable/
Acquired on ($) Unexercisable Unexercisable
Exercise (#)

Delwin D. Hock 0 $0 4,859/ $6,074/
32,419 20,661

Wayne H. Brunetti 0 0 0/ 0/
17,000 46,750

Richard C. Kelly 0 0 1,733/ 2,167/
11,667 7,408

A. Clegg Crawford 0 0 937/ 1,171/
6,073 3,917

Marilyn E. Taylor 0 0 830/ 1,037/
5,359 3,462

(a) Option values were calculated with the closing stock price on December
31, 1994, of $29.375.

Long-Term Incentive Plans - Awards in Last Fiscal Year

Name Number Performance Estimated future payouts under
of or other non-stock price-based plans
shares, period until
units or maturation
other or payout Threshold Target Maximum
right (a) ($ or #) ($ or #) ($ or #)
(#)

Delwin D. Hock 37,572 1/1/94
thru $37,572 $75,144 $112,716
12/31/96

Wayne H. Brunetti 17,000 1/1/94
thru $17,000 $34,000 $51,000
12/31/96

Richard C. Kelly 13,358 1/1/94
thru $13,358 $26,716 $40,074
12/31/96

A. Clegg Crawford 7,027 1/1/94
thru $7,027 $14,054 $21,081
12/31/96

Marilyn E. Taylor 6,196 1/1/94
thru $6,196 $12,392 $18,588
12/31/96

(a) Dividend equivalents are granted under the Omnibus Incentive Plan.
Dividend equivalents entitle the recipient to the cash amount equal to
$2.00 multiplied by the number of units granted. Dividend equivalents
are earned, if at all, at the end of a three-year performance period
depending upon achievement of Earnings Per Share (EPS) goals over the
performance period. The target level represents the amount to be
awarded if 100% attainment of the goal is achieved. Threshold
represents the amount to be awarded if 90% of the goal is achieved, and
Maximum represents the amount to be awarded if 110% of the goal is
attained. Additional dividend equivalents may be granted each year.
Dividend equivalents vest immediately upon a change in control.

The following table shows the estimated pension benefits payable to a covered
participant at normal retirement age under the Employees' Retirement Plan
("Retirement Plan") and the Supplemental Executive Retirement Plan ("SERP").

Pension Plan Table

Remuneration Years of Service
15 20 25 or more years

$100,000 $54,375 $65,000 $65,000
125,000 67,969 81,250 81,250
150,000 81,562 97,500 97,500
175,000 93,750 113,750 113,750
200,000 105,938 130,000 130,000
225,000 118,125 146,250 146,250
250,000 130,313 162,500 162,500
300,000 154,688 195,000 195,000
400,000 203,438 260,000 260,000
450,000 227,813 292,500 292,500
500,000 252,188 325,000 325,000
600,000 300,938 390,000 390,000

The Retirement Plan portion of the amounts listed in the table is
calculated based on the following formula: 1.5% of average final compensation
multiplied by years of credited service.

Average final compensation is the highest average monthly compensation
based on the compensation for any five 12-month periods which yield the
highest total compensation. Federal regulations require that for the 1994
plan year no more than $150,000 in compensation be considered for the
calculation of retirement benefits from the Retirement Plan, and the maximum
amount paid from a qualified defined benefit plan cannot exceed $120,000, as
of January 1, 1995. Benefits are calculated on a straight life annuity basis.
The benefit amounts under the Retirement Plan are not subject to any deduction
for Social Security benefits or other offset amounts.

The number of years of service credited under the Retirement Plan as of
December 31, 1994, were 32 years for Mr. Hock, 26 years for Mr. Kelly, 7 years
for Ms. Taylor , 6 years for Mr. Crawford, and 0 years for Mr. Brunetti (see
"Employment Contracts and Change-in-Control Arrangements" for Mr. Crawford and
Mr. Brunetti). Mr. Crawford is not a member of the SERP. There is no maximum
number of years of credited service for calculation of benefits under the
Retirement Plan.

The SERP is a non-qualified supplemental pension plan for designated
executive officers that provides increased benefits including those that would
otherwise be denied because of certain Internal Revenue Code limitations on
qualified benefit plans. As of December 31, 1994, there were 10 executive
officers participating in the SERP, including the named executive officers
(with the exception of Mr. Crawford). Benefits under the SERP are calculated
such that, when added to the maximum benefits payable under the Retirement
Plan, benefits will equal 65% of the participant's base salary at the
participant's normal retirement date (age 65 or such earlier date as the
participant is eligible and elects to retire with full benefits under the
Retirement Plan). For executives who became participants in the SERP after
March 26, 1991, the SERP benefits accrue over a 20-year period. Benefits are
paid for 20 years with a 50% survivor benefit if death occurs sooner. The
benefit amounts under the SERP are not subject to any deduction for Social
Security benefits or other offset amounts.

Compensation of Directors

Each Director who is not an officer is currently paid a fee of $24,000
per annum. Effective January 1, 1994, each non-officer Director is paid an
additional attendance fee of $500 for each Board and committee meeting that
such Director attends, with committee chairpersons receiving $750 per meeting
of their respective committees that they attend. In remaining consistent with
the Company's effort to reduce overall operating costs, the Board of Directors
took a voluntary 10% pay cut for 1994. Therefore, actual fees paid to
Directors in 1994 were $21,600 plus attendance fees of $450 for each Board and
committee meeting attended, with committee chairpersons receiving $675 per
meeting of their respective committees that they attended.

Effective January 26, 1988, the Company adopted a modified tenure policy
for Directors. The primary purpose of the policy is to assure the continued
availability to the Company of the varied experience of the Directors after
their retirement. Under the provisions of the policy, and in consideration of
the Directors' agreement to provide advice and counsel to the Board as
requested, all Directors retiring after January 26, 1988, will be paid a
monthly retainer equal to the base fee being paid to outside Directors at the
time of their retirement. This retainer will be paid for 10 years or life,
whichever is less. In addition, any outside Director who has served as a
Director for a minimum of 10 years and who does not seek re-election for
reasons other than physical or mental disability, the press of other duties,
or similar reasons, shall also be paid this retainer.

On January 1, 1994, the "Directors' Voluntary Deferral Plan" became
effective. This non-qualified plan allows Directors to defer receipt of
retention fees and/or meeting fees on a pre-tax basis. Messrs. McKinley,
Nicholson, Rodriguez, and Tointon have elected to participate.

Employment Contracts and Change-in-Control Arrangements

The Company has entered into severance agreements with certain key
employees, including those listed in the Summary Compensation Table (each, an
"Employee"). The agreements were effective as of November 26, 1991, (except
in the case of Mr. Brunetti, whose severance agreement was effective as of
July 18, 1994) and will continue until (i) 24 full calendar months following
an occurrence of a change in control of the Company, or (ii) the Employee
attains age 65 following the date of an occurrence of a change in control of
the Company, whichever occurs first.

During the time periods referenced above, the agreements provide that in
the event the employment of the Employee is terminated for any reason other
than cause, death or disability, or the employee is constructively discharged,
as defined by the agreements, the Employee is entitled to receive (A) accrued
but unpaid salary and accrued but unused vacation; (B) a lump sum payment
equal to three times the Employee's compensation, including certain
compensation under the Omnibus Incentive Plan and the Company matching
contributions allocated to the Employees' Savings Plan and Executive Savings
Plan accounts for the calendar year preceding the change in control; and (C)
all benefits under the Company's welfare benefit plans until the first to
occur of 36 months following termination or the attainment of age 65.

In the event the Employee is age 62 or older, the lump sum severance
benefit shall be multiplied by a fraction, the numerator of which is the
number of months (including fractions of a month) from the date of termination
of employment to the date of the first day of the calendar month coincident
with or next following the date the Employee will have attained age 65, and
the denominator of which is 36. In the event payments made to the Employee
would be subject to an excise tax imposed under Section 4999 of the Internal
Revenue Code of 1986, as amended, such payments shall be reduced to an amount,
and only to the extent necessary, so that such payments would not be subject
to the excise tax.

The Company has entered into an agreement with Mr. Crawford, under which
the Company will make additional benefit payments to him such that his total
benefit payments under the Retirement Plan and such agreement will be equal to
40% of his salary at the time of termination if said termination occurs after
the attainment of age 62. Accordingly, the estimated annual benefit for Mr.
Crawford if termination occurs at age 65 is $66,800. This payment will be
made for a period of 20 years. If Mr. Crawford's death occurs prior to the
termination of his employment, his beneficiary will receive reduced benefits
for a period of 20 years. Pursuant to this agreement, Mr. Crawford will be
entitled to receive severance pay in an amount equal to 26 weeks of pay at his
then current rate if he is terminated because his position has been
eliminated.

The Company has entered into an employment agreement with Mr. Hock for a
term ending January 31, 1997. The agreement provides for a base salary of not
less than $428,000 plus an annual target bonus opportunity of not less than
40% of his base salary and an annual stock option award opportunity of not
less than 160% of his base salary. Upon termination after a change in
control, Mr. Hock would receive the greater of payments he would otherwise be
entitled to receive under this agreement, which includes tax free
reimbursement of any excise taxes paid thereunder, and the payments provided
for in his severance agreement discussed above. If the Company terminates Mr.
Hock's employment without cause, or if Mr. Hock terminates for good reason
(each as defined in the agreement), Mr. Hock shall receive his base salary for
the remainder of the term of the agreement, the greater of target or actual
annual bonus paid for that year continued for the term of the agreement and an
immediate vesting of all outstanding incentive awards (including dividend
equivalents) plus the economic equivalent of any long-term awards he would
have received for the remainder of the term (including dividend equivalents).

The Company has entered into an employment agreement with Mr. Brunetti
for a term ending July 17, 1997. The agreement provides for a single lump sum
cash sign-on bonus in the gross amount of $25,000 in addition to the issuance
of 4,000 shares restricted stock of the Company. Each of the sign-on bonuses
are outlined in the Summary Compensation Table. The agreement also provides
for a base salary of not less than $325,000 plus an annual target bonus
opportunity of not less than 35% of his base salary and an annual stock option
award opportunity of not less than 140% of his base salary. Upon the
commencement of his employment with the Company, Mr. Brunetti was also issued
stock options for 17,000 shares of stock of the Company. Upon termination
after a change in control, Mr. Brunetti would receive the greater of payments
he would otherwise be entitled to receive under this agreement, which includes
tax free reimbursement of any excise taxes paid thereunder, or the payments
provided for in his severance agreement discussed above. If the Company
terminates Mr. Brunetti's employment without cause, or if Mr. Brunetti
terminates for good reason (each as defined in the agreement), Mr. Brunetti
shall receive his base salary for the remainder of the term of the agreement,
the greater of target or actual annual bonus paid for that year continued for
the term of the agreement, an immediate vesting of all outstanding incentive
awards (including dividend equivalents) plus the economic equivalent of any
long-term awards he would have received for the remainder of the term
(including dividend equivalents). The agreement also provides that Mr.
Brunetti will participate in the SERP and will be entitled to full benefits
upon retirement at age 65.

TOTAL RETURN GRAPH

Compensation Committee Interlocks and Insider Participation

During 1994, the following Directors served on the Compensation
Committee: Dr. Doris M. Drury, Collis P. Chandler, Jr., George B. McKinley,
Will F. Nicholson, Jr., W. Thomas Stephens and Robert G. Tointon. None of
these Directors are or have been an officer or employee of the Company or any
of its subsidiaries. Mr. Tointon, however, was involved in the following
transactions with a subsidiary of the Company.

During 1990, Fuel Resources Development Co. (Fuelco), a wholly-owned
subsidiary of the Company, entered into an agreement with The San Juan Basin
Consortium, Ltd. (of which Mr. Tointon and his affiliates were members) to
purchase various ownership interests in proven acreage and further develop 40
net gas wells and the related gas gathering and water disposal systems. During
1992, Fuelco received $95,793 from The San Juan Basin Consortium in settlement
of the final outstanding issues relating to the 1990 purchase of the San Juan
Basin properties. By the end of 1991, 47 gross wells (completing Fuelco's 40
net well obligation) had been drilled. The wells are in various stages of
production, dewatering or completion and the gathering and water disposal
facilities serving several groups of wells have been completed. Fuelco's
working interests in the properties range from 50% to 100% before, and 30% to
87% after, termination of the carried interest and payout.

Prior to 1990, The San Juan Basin Consortium had invested $9,700,000 in
this project. The working interest of the Consortium members ranged from 10%
to 48% before payout, and from 8% to 26% after payout. Expenses related to
such interests were carried by Fuelco during 1990 and 1991. Fuelco's
obligation for payment of expenses related to such carried interests were to
terminate on September 30, 1992, with respect to 33 gross wells. Due to a
delay in development of these projects, however, Mr. Tointon and his
affiliates agreed with Fuelco to extend the termination date as follows: (i)
Fuelco continued to pay all expenses for the carried interest of Mr. Tointon
and such affiliates through July 1, 1993, with respect to the wells and
certain water disposal and gathering facilities and (ii) thereafter, Fuelco
agreed to pay certain additional expenses with respect to these projects until
completion thereof which occurred in 1994. Such expenses paid by Fuelco and
attributed to the interests of Mr. Tointon and his affiliates aggregated
$407,687 and $60,894 in 1993 and 1994 respectively. The terms and conditions
of this transaction are substantially similar to those which would have been
effected with unrelated parties.

In addition, the Company paid Rocky Mountain Prestress, of which Mr.
Tointon is CEO and President, the sum of $1,250,948 for construction services
during 1994. Such services were provided upon terms and conditions
substantially similar to those which would have been effected with unrelated
parties.

CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

During 1994, the Company received $63,774 from Chandler & Associates,
Chandler-Simpson, Inc., and related companies for natural gas transportation
to Northwest Pipeline Corporation. Mr. Chandler is sole owner, President and
a Director of Chandler & Associates and Chandler-Simpson, Inc. The terms and
conditions of the transactions between the companies with which Mr. Chandler
is associated and the Company and are substantially similar to those which
would have been effected with unrelated parties.

During 1994, the Company paid A.B. Hirschfeld Press, Inc., of which Mr.
Hirschfeld is President, the sum of $199,945 for printing services. Such
services were provided upon terms and conditions substantially similar to
those which would have been effected with unrelated parties.

APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS

Subject to approval by the holders of Common Stock at the Meeting, the
Board of Directors has appointed Arthur Andersen & Co. as the independent
public accountants to audit the accounts of the Company and its consolidated
subsidiaries for the 1995 calendar year. The firm audited the Company's
accounts in 1994. A representative of Arthur Andersen & Co. is expected to
be present at the Meeting, will be provided the opportunity to make a
statement if such representative desires to do so, and is expected to be
available to respond to appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
APPOINTMENT OF ARTHUR ANDERSEN & CO. AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE
1994 CALENDAR YEAR.

TRANSACTION OF OTHER BUSINESS

The Board of Directors does not intend to bring before the Meeting any
matters other than (1) the election of Directors and (2) the approval of the
appointment of the Company's independent public accountants and has no present
knowledge that any other matter will or may be brought before such Meeting by
others. However, if any other matter properly comes before the Meeting, it is
the intention of the persons named in the form of proxy to vote the proxies in
accordance with their judgment on such matter.

SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING

Shareholder proposals intended to be presented at the 1996 Annual
Meeting must be received by the Company no later than December 12, 1995, in
order to be eligible for inclusion in the Company's proxy statement and form
of proxy relating to that meeting.

By order of the Board of Directors.
Dated: April 10, 1995.

W. WAYNE BROWN
Corporate Secretary

ALL SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE, AND SIGN THE ENCLOSED
FORM OF PROXY AND RETURN IT IN THE SELF-ADDRESSED, POSTAGE PAID ENVELOPE,
WHETHER OR NOT THEY PLAN TO ATTEND THE MEETING. ANY SHAREHOLDER PRESENT AT
THE MEETING MAY, NEVERTHELESS, VOTE PERSONALLY ON ALL MATTERS WITH RESPECT TO
WHICH SUCH SHAREHOLDER IS ENTITLED TO VOTE.