-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, eJe11Gn+fk0irvDPY5Ir6o+CVODbjjdC5E/qMQi8cfGA/OU3N04BQ3Q7iz3VCbdU y5F+9wOIrUxvfs4qikUnCQ== 0000071297-94-000034.txt : 19940815 0000071297-94-000034.hdr.sgml : 19940815 ACCESSION NUMBER: 0000071297-94-000034 CONFORMED SUBMISSION TYPE: U-1 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19940812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ENGLAND ELECTRIC SYSTEM CENTRAL INDEX KEY: 0000071297 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 041663060 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1 SEC ACT: 1935 Act SEC FILE NUMBER: 070-08453 FILM NUMBER: 94543298 BUSINESS ADDRESS: STREET 1: 25 RESEARCH DR CITY: WESTBOROUGH STATE: MA ZIP: 01581 BUSINESS PHONE: 5083669011 U-1 1 File No. 70- SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM U-1 APPLICATION/DECLARATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 NEW ENGLAND ELECTRIC SYSTEM 25 Research Drive Westborough, Massachusetts 01582 (Name of company filing this statement and address of principal executive office) NEW ENGLAND ELECTRIC SYSTEM (Name of top registered holding company parent of applicant) Michael E. Jesanis Robert King Wulff Treasurer Corporation Counsel 25 Research Drive 25 Research Drive Westborough, Massachusetts 01582 Westborough, Massachusetts 01582 (Names and addresses of agents for service) Item 1. Description of Proposed Transaction ____________________________________________ New England Electric System (NEES) is a voluntary association created in Massachusetts by an Agreement and Declaration of Trust dated January 2, 1926, as amended, and is a registered holding company under the Public Utility Holding Company Act of 1935 (the Act). Pursuant to Commission's order in File No. 70-8043, NEES is authorized to issue and sell short-term promissory notes to banks up to a maximum aggregate principal amount outstanding at any time not exceeding $100 million. This borrowing authority expires October 31, 1994. By this Application/Declaration, NEES proposes that it be granted authority to issue and sell short-term promissory notes to banks from time to time between November 1, 1994, and October 31, 1996 The maximum aggregate principal amount of such notes to be outstanding will not at any one time exceed $100 million. NEES currently does not expect to incur short-term borrowings during the applicable period. Nevertheless, NEES believes the requested short-term borrowing authority is necessary in order for it to be prepared for unforeseen events. Without this modest level of short-term borrowing authority in place, NEES will lose the ability to act quickly in response to an emergency affecting one or more of its subsidiaries. NEES does not have an ownership interest in an exempt wholesale generator (EWG) or foreign utility company (FUCO) as defined in Sections 32 and 33 of the Act. Additionally, NEES is not a party to, nor has any rights under, a service, sales, or construction agreement with an EWG or a FUCO. Although NEES does not have any current intention to secure an ownership interest in an EWG or FUCO, it wishes to retain the flexibility to invest up to a total of $100 million in one or more EWG's or FUCO's, subject to such Commission rules and regulations and approvals as may then be required. Borrowings from Banks _____________________ The proposed borrowings from banks by NEES will be evidenced by notes payable maturing in less than one year from the date of issuance. NEES will negotiate with banks the interest costs of such borrowings. NEES pays fees to the banks in lieu of compensating balance arrangements. The effective interest cost of borrowings from a bank will not exceed the greater of the bank's base or prime lending rate, or the rate published in the Wall Street Journal as the high federal funds rate, plus, in either case, one percent. Certain of such borrowings may be without prepayment privileges. Based on the current base lending rate of 7.25% and an equivalent or lower high federal funds rate, the effective interest costs of such borrowing would not exceed 8.25% per annum. Payment of any short-term promissory notes prior to maturity will be made on the basis most favorable to NEES, taking into account fixed maturities, interest rates, and any other relevant financial consideration. Filing of Certificates of Notification ______________________________________ Within 45 days after the end of each calendar quarter, NEES will file a certificate of notification covering the transactions effective pursuant to the authority requested hereby during such quarter. Such certificates will show the dates and amounts of all new money borrowings, the names of the lenders, the maximum amount of notes outstanding at any one time during the quarter, and the total amount of notes outstanding at the end of such quarter. The final certificate of notification will be accompanied by the required past tense opinion of counsel. Item 2. Fees, Commissions and Expenses _______________________________________ No underwriters' fees or commissions are to be paid with respect to the proposed transactions. Certain services are to be performed at the actual cost by New England Power Service Company, (NEPSCO) an affiliated service company, operating pursuant to the provisions of Section 13 of the Act and the Commission's rules thereunder. The services of NEPSCO will consist principally of services performed by the Executive and Administrative Department, the Corporate Department (including attorneys), the Treasury Department (including accountants and financial analysts), and the Office Service Department, and are estimated not to exceed $1,000. The only other expense to be borne by NEES will be the fee for filing under the Act of $2,000. Total estimated expenses in connection with the proposed transactions are $3,000. Item 3. Applicable Statutory Provisions ________________________________________ Sections 6(a) and 7 of the Act are applicable to the issue and sale of notes by NEES to banks. The payment of note of indebtedness from the proceeds of the proposed borrowings is exempted from Sections 9(a) and 12 of the Act by Rule 42. Item 4. Regulatory Approval ____________________________ No state commission and no Federal commission (other than the Securities and Exchange Commission) has jurisdiction over the issue and sale of the notes by NEES. Item 5. Procedure __________________ It is requested that the Commission take action with respect to this Application/Declaration without a hearing being held and that an order be issued allowing this Application/Declaration to become effective on or before October 15, 1994 or as soon as practicable. NEES (i) does not request a recommended decision by an administrative law judge, (ii) does not request a recommended decision by any other responsible officer of the Commission, (iii) hereby specifies that the Division of Investment Management may assist in the preparation of the Commission's decision, and (iv) hereby requests that there be no 30-day waiting period between the date of issuance of the Commission's order and the date on which it is to become effective. Item 6. Exhibits and Financial Statements __________________________________________ (a) Exhibits *F Opinion of Counsel G Proposed Form of Notice *To be supplied by amendment. (b) Financial Statements 1 Balance Sheets of NEES and of NEES and Subsidiaries Consolidated, as of March 31, 1994, on an actual basis. (1) 2 Statements of Income and Retained Earnings of NEES and of NEES and Subsidiaries Consolidated for the twelve months ended March 31, 1994. (1) The proposed transactions will have no material effect on the Balance Sheets of NEES or of NEES and Subsidiaries Consolidated; therefore, pro forma statements are omitted. Since the date of the balance sheets, there have been no material changes which were not in the ordinary course of business. Item 7. Information as to Environmental Effects ________________________________________________ The proposed transaction does not involve a major Federal action significantly affecting the quality of the human environment. SIGNATURE _________ Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned company has duly caused this statement to be signed on its behalf by the undersigned officer thereunto duly authorized. NEW ENGLAND ELECTRIC SYSTEM By: s/Michael E. Jesanis ___________________________ Michael E. Jesanis Treasurer Date: August 12, 1994 The name "New England Electric System" means the trustee or trustees for the time being (as trustee or trustees but not personally) under an agreement and declaration of trust dated January 2, 1926, as amended, which is hereby referred to, and a copy of which as amended has been filed with the Secretary of The Commonwealth of Massachusetts. Any agreement, obligation or liability made, entered into or incurred by or on behalf of New England Electric System binds only its trust estate, and no shareholder, director, trustee, officer or agent thereof assumes or shall be held to any liability therefor. EX-99 2 Exhibit Index _____________ Exhibit Description Page _______ ___________ ____ G Proposed Form of Notice Filed herewith 1 Balance Sheets of NEES and Filed herewith of NEES and Subsidiaries Consolidated, as of March 31, 1994, on an actual basis 2 Statements of Income and Filed herewith Retained Earnings of NEES and of NEES and Subsidiaries Consolidated for the twelve months ended March 31, 1994 EX-99 3 EXHIBIT G Proposed Form of Notice _______________________ New England Electric System ("NEES"), 25 Research Drive, Westborough, Massachusetts 01582, a registered holding company, has filed an application/declaration with this Commission pursuant to Sections 6(a) and 7 of the Public Utility Holding Company Act of 1935 ("Act"). NEES proposes to issue and sell up to a maximum aggregate outstanding principal amount of $100,000,000 of short-term notes to banks from time to time through October 31, 1996. The notes will mature in less than one year from the date of issuance. The effective interest cost of borrowings will not exceed the effective interest cost of borrowings at the greater of the bank's base or prime lending rate, or the rate published by the Wall Street Journal as the high federal funds rate plus, in either case, 1%. NEES pays fees to the banks in lieu of compensating balance arrangements. Based upon the current base lending rate of 7.25% and an equivalent or lower federal funds rate, the effective interest cost would not exceed 8.25% per annum. NEES believes the requested short-term borrowing authority is necessary in order to be prepared for unforeseen events, including the ability to respond to the emergency needs of its subsidiaries. EX-99 4 Financial Statement 1 NEW ENGLAND ELECTRIC SYSTEM (Parent Company Only) Balance Sheet At March 31, 1994 (Unaudited)
ASSETS ------ (In Thousands) Investments: Common stocks of subsidiaries, at equity $1,507,269 Notes of subsidiaries 53,538 Other investments 657 ---------- Total investments 1,561,464 ---------- Current assets: Cash 46 Temporary cash investments - subsidiary company 2,650 Interest, dividends and accounts receivable from subsidiaries 35,954 Other current assets 170 ---------- Total current assets 38,820 ---------- Deferred federal income taxes 2,245 ---------- $1,602,529 ========== CAPITALIZATION AND LIABILITIES ------------------------------ Common share equity: Common shares, par value $1 per share: Authorized - 150,000,000 shares Outstanding - 64,969,652 shares $ 64,970 Paid-in capital 736,567 Retained earnings (including $564,119,000 of undistributed subsidiary earnings) 760,965 ---------- Total common share equity 1,562,502 ---------- Current liabilities: Accounts payable (including $519,000 to subsidiaries) 1,519 Other accrued expenses 1,037 Dividends payable 31,563 ---------- Total current liabilities 34,119 ---------- Deferred credits 5,908 ---------- $1,602,529 ==========
Financial Statement 1 NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES Consolidated Balance Sheet At March 31, 1994 (Unaudited)
ASSETS ------ (In Thousands) Utility plant, at original cost $4,697,392 Less accumulated provisions for depreciation and amortization 1,540,179 ---------- 3,157,213 Net investment in Seabrook 1 under rate settlement 87,725 Construction work in progress 287,022 ---------- Net utility plant 3,531,960 ---------- Oil and gas properties, at full cost 1,224,849 Less accumulated provision for amortization 909,301 ---------- Net oil and gas properties 315,548 ---------- Investments: Nuclear power companies, at equity 46,559 0ther subsidiaries, at equity 44,371 Other investments, at cost 32,599 ---------- Total investments 123,529 ---------- Current assets: Cash 4,447 Accounts receivable, less reserves of $16,288,000 273,481 Unbilled revenues 37,400 Fuel, materials, and supplies, at average cost 88,966 Prepaid and other current assets 64,491 ---------- Total current assets 468,785 ---------- Accrued Yankee Atomic costs 96,284 Deferred charges and other assets 293,875 ---------- $4,829,981 ========== CAPITALIZATION AND LIABILITIES ------------------------------ Capitalization: Common share equity: Common shares, par value $1 per share: Authorized - 150,000,000 shares Outstanding - 64,969,652 shares $ 64,970 Paid-in capital 736,823 Retained earnings 760,965 ---------- Total common share equity 1,562,758 Minority interests in consolidated subsidiaries 55,092 Cumulative preferred stock of subsidiaries 147,528 Long-term debt 1,509,306 ---------- Total capitalization 3,274,684 ---------- Current liabilities: Long-term debt due within one year 22,920 Short-term debt 60,370 Accounts payable 122,890 Accrued taxes 45,208 Accrued interest 19,138 Dividends payable 35,544 Other current liabilities 152,626 ---------- Total current liabilities 458,696 ---------- Deferred federal and state income taxes 700,723 Unamortized investment tax credits 98,713 Accrued Yankee Atomic costs 96,284 Other reserves and deferred credits 200,881 ---------- $4,829,981 ==========
EX-99 5 Financial Statement 2 NEW ENGLAND ELECTRIC SYSTEM (Parent Company Only) Statement of Income Twelve Months Ended March 31, 1994 (Unaudited)
(In Thousands) Equity in earnings of subsidiaries $ 200,798 Interest income - subsidiaries 307 --------- Total income from subsidiaries 201,105 Other income 110 --------- Total income 201,215 Corporate and fiscal expenses (includes $1,924,000 for cost of services billed by an affiliated company) (9,033) Federal income taxes 4,206 --------- Income before interest 206,042 Interest 132 --------- Net income $ 205,910 ========= Statement of Retained Earnings Retained earnings at beginning of period $ 702,635 Net income 205,910 Dividends declared on common shares (145,533) Premium on redemption of preferred stock of subsidiaries (2,047) --------- Retained earnings at end of period $ 760,965 =========
Financial Statement 2 NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES Statement of Consolidated Income Twelve Months Ended March 31, 1994 (Unaudited)
(In Thousands) Operating revenue $2,231,395 ---------- Operating expenses: Fuel for generation 226,928 Purchased electric energy 521,739 Other operation 473,235 Maintenance 143,921 Depreciation and amortization 296,051 Taxes, other than income taxes 122,620 Income taxes 132,808 ---------- Total operating expenses 1,917,302 ---------- Operating income 314,093 Other income: Allowance for equity funds used during construction 5,092 Equity in income of generating companies 10,556 Other income (expense) - net (2,362) ---------- Operating and other income 327,379 ---------- Interest: Interest on long-term debt 97,059 Other interest 9,819 Allowance for borrowed funds used during construction (3,490) ---------- Total interest 103,388 ---------- Income after interest 223,991 Preferred dividends of subsidiaries 10,122 Minority interests 7,959 ---------- Net income $ 205,910 ========== Statement of Consolidated Retained Earnings Retained earnings at beginning of period $ 702,635 Net income 205,910 Dividends declared on common shares (145,533) Premium on redemption of preferred stock of subsidiaries (2,047) ---------- Retained earnings at end of period $ 760,965 ==========
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