Dear Shareholder:

         Our industry  continues to grab headlines around the country as changes
in regulation bring increased  competition and customer  choice.  This move to a
competitive  electric  industry also creates  significant new  opportunities for
energy service  providers,  like Boston Edison,  in new  businesses.  Pursuit of
these new opportunities is a key element of our strategy for long-term growth to
benefit our  shareholders,  customers and employees.  This strategy is described
more fully in the Annual Report you received in April.

         Recently  you  received  a proxy  statement  asking  you to vote  for a
proposal to form a holding company for Boston Edison, to be called BEC Energy. I
want to  emphasize  again the  importance  of this  proposal to the  Company.  A
holding  company  structure  will provide  increased  financial,  managerial and
flexibility to operate effectively in this changing environment.  This structure
will also allow the  Company to  separate  regulated  and  unregulated  lines of
business consistent with principles outlined by the Massachusetts  Department of
Public Utilities.

         For these reasons,  the  management  and Board of Directors  consider a
holding company  structure to be in the best interest of shareholders.  Although
the formal legal structure will change, our current operations will not. We will
have the same assets,  customers,  revenues and the same  management  will be in
place. Your Proxy  Statement/Prospectus  contains a more extensive discussion of
the proposal. Your vote, regardless of the number of shares you own, is critical
to achieving a successful  outcome.  We have  retained D.F. King to assist us in
this important proxy solicitation  effort. If you have any questions  concerning
your proxy vote, please call 1-800-859-8508.

         The remainder of this report describes other important  developments at
Boston Edison during the first quarter.





Thomas J. May
Chairman, President and Chief Executive Officer
April 18, 1997