0000071297-95-000063.txt : 19950828
0000071297-95-000063.hdr.sgml : 19950828
ACCESSION NUMBER: 0000071297-95-000063
CONFORMED SUBMISSION TYPE: U-1
PUBLIC DOCUMENT COUNT: 7
FILED AS OF DATE: 19950825
SROS: BSE
SROS: NYSE
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: NEW ENGLAND ELECTRIC SYSTEM
CENTRAL INDEX KEY: 0000071297
STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [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: 070-08679
FILM NUMBER: 95567262
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
(the Act)
GRANITE STATE ELECTRIC COMPANY (Granite)
MASSACHUSETTS ELECTRIC COMPANY (Mass. Electric)
THE NARRAGANSETT ELECTRIC COMPANY (Narragansett)
NARRAGANSETT ENERGY RESOURCES COMPANY (NERC)
NEW ENGLAND ELECTRIC TRANSMISSION CORPORATION (NEET)
NEW ENGLAND ENERGY INCORPORATED (NEEI)
NEW ENGLAND HYDRO-TRANSMISSION ELECTRIC COMPANY, INC.
(Mass. Hydro)
NEW ENGLAND HYDRO-TRANSMISSION CORPORATION (NH Hydro)
NEW ENGLAND POWER COMPANY (NEP)
NEW ENGLAND POWER SERVICE COMPANY (NEPSCO)
and
NEW ENGLAND ELECTRIC SYSTEM (NEES)
(Names of companies filing this statement)
25 Research Drive, Westborough, Massachusetts 01582
33 West Lebanon Road, Lebanon, NH 03766 (Granite)
280 Melrose Street, Providence, RI 02901 (Narragansett)
(Address of principal executive offices)
NEW ENGLAND ELECTRIC SYSTEM
(Name of top registered holding company parent
of the participating companies herein)
Michael E. Jesanis Robert King Wulff
Treasurer Corporation Counsel
25 Research Drive 25 Research Drive
Westborough, MA 01582 Westborough, MA 01582
(Names and addresses of agents for service)
Item 1. Description of Proposed Transactions
---------------------------------------------
This Application/Declaration relates to short-term borrowing by certain
subsidiaries of NEES, for the period from November 1, 1995, through October
31, 1997. Granite, Mass. Electric, Narragansett, NEET, Mass. Hydro, NH Hydro,
NEP, and NEPSCO (the Borrowing Companies) seek authority to borrow money from
the NEES Money Pool (the Money Pool), and/or banks, and/or in the cases of
Mass. Electric, Narragansett, and NEP, to issue commercial paper, up to the
maximum amounts requested herein. Each of the companies listed on the cover
hereof, including NEES, (the Participating Companies) seeks authority to lend
money in the Money Pool under the current terms of the Money Pool (approved by
the Commission in its File No. 70-7765). The Commission's most recent order
in File No. 70-7765 was HCAR No. 35-25772, dated March 29, 1993. NEES has
filed an Application/Declaration with the Commission requesting approval for
its proposed acquisition of the Nantucket Electric Company (File No. 70-8675)
and as part of that Application/Declaration requests that Nantucket Electric
Company become a member of the Money Pool.
The Borrowing Companies currently have authority through October 31,
1995, to borrow up to the amounts shown in the table below. Each of the
Participating Companies currently has authority to participate as a lender in
the Money Pool through October 31, 1995 (File No. 70-8261).
During the period from November 1, 1995, through October 31, 1997, the
Borrowing Companies request borrowing authority up to the maximum outstanding
amounts shown below:
Borrowing Company Borrowing Authority
----------------- -------------------
Current Requested
------- ---------
Granite $ 10,000,000 $ 10,000,000
-------
Mass. Electric $150,000,000 $150,000,000
--------------
Narragansett $100,000,000 $100,000,000
------------
NEET $ 10,000,000 $ 10,000,000
----
Mass. Hydro $ 25,000,000 $ 25,000,000
-----------
NH Hydro $ 25,000,000 $ 25,000,000
--------
NEP $375,000,000 $375,000,000
---
NEPSCO $ 12,000,000 $ 25,000,000
------
The proceeds from the proposed borrowings are to be used (i) to pay then
outstanding notes initially issued to banks and/or dealers in commercial paper
and/or borrowings from the Money Pool, (ii) to provide new money for
capitalizable expenditures and/or to reimburse the treasury therefor, and
(iii) for other corporate purposes relating to ordinary business operations,
including working capital and the financing of construction and property
acquisitions.
The Financial Statements 3(a) through 3(h), Sources and Applications of
Funds and Capitalization, show the expected short-term borrowing requirements
for the Borrowing Companies through December 31, 1997. In addition to the
expected short-term borrowing requirements shown in the Sources and
Applications of Funds and Capitalization, NEET, Mass. Hydro, and NH Hydro are
special purpose companies formed to own and operate the electric transmission
interconnection with Hydro Quebec and may need additional short-term borrowing
authority so that they may act quickly in response to unexpected emergencies
such as catastrophic damage to the transmission facilities. Therefore, NEET,
Mass. Hydro and NH Hydro request continued authorization to borrow amounts not
exceeding $10 million, $25 million and $25 million, respectively, to be
outstanding at any one time.
NEPSCO proposes to increase its current authorization of $12 million to
$25 million. This increase is necessary to provide flexibility in the
issuance of short-term debt which will become necessary when NEPSCO expends
its existing cash surplus to fund heretofore unfunded long-term employee
retirement benefits. NEPSCO's short term borrowing reached a maximum level of
$11,125,000 in 1994 and $10,950,000 in 1995. As a result of such funding and
based on past seasonal borrowing needs of NEPSCO, it is anticipated that
NEPSCO could experience short-term borrowing in the $25 million range after
such funding.
Neither NEES nor any subsidiary has 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, neither New England Electric
System nor any subsidiary is a party to, or has any rights under, a service,
sales, or construction agreement with an EWG or a FUCO. Although neither New
England Electric System nor any subsidiary has any current intention to secure
an ownership interest in an EWG or FUCO, NEES and NEP wish to retain the
flexibility to invest up to a total of $100 million in one or more EWGs or
FUCOs, subject to such further Commission rules and regulations and approvals
as may then be required.
As shown by the balance sheets of NEES and NEP (Financial Statements No.
1), NEES and NEP had $784,549,000 and $368,443,000 in retained earnings,
respectively, at June 30, 1995. Fifty percent of said amounts are
$392,275,000 and $184,222,000, respectively. Excluding the amount of the
maximum investment, the retained earnings would be $684,549,000 and
$268,443,000, respectively.
Borrowings from the Money Pool
------------------------------
The Borrowing Companies propose to reduce their need for outside
borrowing through the continued use of the Money Pool. Under the Money Pool,
surplus funds that may be available from day to day in the treasuries of the
Participating Companies are used to make loans to the Borrowing Companies in
need of short-term funds. The rate will be 108% of the monthly average of the
rate for high grade 30-day commercial paper sold through dealers by major
corporations as published in the "Wall Street Journal". Although there are no
stated maturities, the loans made by the Money Pool are payable on demand, and
may be prepaid by the borrower without penalty. Borrowings may, but need not
be, evidenced by notes. Borrowings will be available first to the wholly
owned subsidiaries of NEES (The Group I Borrowers). Thereafter, if the Money
Pool still has additional funds, these will be available to the non-wholly
owned subsidiaries of NEES (The Group II Borrowers) before external
investments are made. All funds borrowed by the Group II Borrowers will be
used for their own internal financing and will not be loaned to stockholders.
Each member determines each day, on the basis of cash flow projections, the
amount of surplus funds it has available for contribution to the Money Pool.
The surplus funds are transferred to an account of NEPSCO, which administers
and maintains as agent the Money Pool for the member companies. The current
terms of the Money Pool (authorized in Commission's File No. 70-7765) are
shown in Exhibit G.
Borrowings from Banks
---------------------
The proposed borrowings by the Borrowing Companies from banks will be
evidenced by notes maturing in less than one year from the date of issuance.
The Borrowing Companies will negotiate with the banks the interest costs of
such borrowings. The Borrowing Companies pay 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. Based on the current base
lending rate of 8.75% and an equivalent or lower high federal funds rate, the
effective interest costs of such a borrowing today would not exceed 9.75% per
annum.
Certain of such borrowings may be without prepayment privileges.
Payment of any short-term promissory notes prior to maturity will be made on
the basis most favorable to the Borrowing Companies, taking into account fixed
maturities, interest rates, and any other relevant financial considerations.
The Borrowing Companies have made arrangements with certain banks for
lines of credit, for various purposes, including support of commercial paper.
Sale of Commercial Paper to Dealers
-----------------------------------
Mass. Electric, Narragansett, and NEP propose to issue and sell
commercial paper directly to one or more nationally recognized commercial
paper dealers (CP Dealer). Initially the CP Dealer will be CS First Boston
Corporation and/or Merrill Lynch Money Markets Incorporated, but this may
change as warranted.
The commercial paper so issued and sold will satisfy the requirements of
Section 3(a)(3) of the Securities Act of 1933 and be in the form of unsecured
promissory notes having varying maturities of not in excess of 270 days.
Actual maturities will be determined by market conditions, the effective
interest cost to the issuer, and the issuer's cash requirements at the time of
issuance. The commercial paper will be in denominations of not less than
$50,000. The terms of the commercial paper will not provide for prepayment
prior to maturity. The commercial paper will be purchased by the CP Dealer
from the issuer at a discount which will not be in excess of the discount then
prevailing for commercial paper of comparable quality and maturity which is
sold by public utility issuers to commercial paper dealers. The CP Dealer
will initially reoffer the commercial paper at a discount rate not more than
1/8 of 1% per annum less than the prevailing discount rate to the issuer.
The effective interest cost to the issuer of commercial paper will
generally not exceed the effective interest cost of the base lending rate at
The First National Bank of Boston. However, the effective interest cost of
such paper is based on the supply of, and demand for, that and similar paper
at the time of sale. Specifically, on several previous occasions short-term
money markets have become very volatile during brief periods of extraordinary
demand, and the interest costs of commercial paper have exceeded bank base
rates. Bank borrowing agreements, under which the Borrowing Companies must
borrow as an alternative to selling commercial paper, generally provide that
the interest rate of such borrowings shall be the then current money market
rate. Although under the described circumstances the interest cost of
commercial paper may exceed the bank base rate, it may still be less than the
alternative money market rates at which the Borrowing Companies would
otherwise then be forced to borrow. Likewise, the Borrowing Companies may be
able to negotiate a shorter borrowing period in the commercial paper market
than from banks. Because such volatile market conditions usually exist for
brief periods, it is not anticipated that any sale of commercial paper with
interest costs in excess of bank base rates would have a significant marginal
impact on the annual interest cost of the Borrowing Companies. Therefore,
while it is not anticipated that the effective annual cost of borrowing
through commercial paper will exceed the annual base rate borrowing from the
First National Bank of Boston, in order to obtain maximum flexibility during
the periods described above, commercial paper may be issued with a maturity of
not more than 90 days with an effective cost in excess of the then-existing
lending rate.
Mass. Electric, Narragansett, and NEP will issue commercial paper or
borrow from banks if there are not sufficient surplus funds available from the
Money Pool to meet their needs. The decision to borrow from banks or issue
commercial paper will be based on the cost of such funds and their
availability for the anticipated borrowing period.
Filing of Certificates of Notification
--------------------------------------
Within 45 days after the end of each calendar quarter, the Participating
Companies will file a certificate of notification covering the transactions
effected pursuant to the authority requested herein during such quarter. Such
certificate will show the names of the borrowers, and for each borrower, the
dates and amounts of all new money borrowings, whether by issuance of notes to
banks, or by sale of commercial paper (including money borrowed from banks to
pay the Money Pool or CP Dealers, or borrowed from the Money Pool to pay banks
or CP Dealers, or borrowed by sale of commercial paper to pay the Money Pool
or banks), the names of the lenders, the maximum concurrent amount of notes
outstanding to banks, the Money Pool and CP Dealers, the aggregate total
outstanding at any one time, and the aggregate total outstanding at the end of
such quarter. Each certificate will include, with respect to the issue and
sale of commercial paper, the effective interest cost for such promissory note
issued as commercial paper. In addition, such certificate shall include a
statement of whether any of the funds borrowed under this Order were paid by a
subsidiary company to NEES through dividends for the purpose of NEES acquiring
an interest in an exempt wholesale generator or foreign utility company. The
amount of such dividend payment must be given. The final certificate of
notification will be accompanied by the required past tense opinion of
counsel.
Item 2. Fees, Commissions and Expenses
---------------------------------------
Based upon the existing lines of credit at June 30, 1995, the
annualized cost of the fees to banks described in "Borrowings from Banks",
above, would be $479,000. If the same lines were maintained over the two year
requested authority, the total of these fees would be $958,000. There are no
other fees or commissions, other than filing fees, to be paid in connection
with the proposed transactions; incidental services will be performed by
NEPSCO at the actual cost thereof. NEPSCO is an affiliated service company
operating pursuant to Section 13 of the Act and the Commission's rules
thereunder. The cost of such services is estimated not to exceed $550 for
each of the parties to this Application/Declaration or an aggregate of
approximately $6,000, of which it is estimated $1,000 will be incurred by the
Executive and Administrative Department, $2,500 by the Corporate Department
(including attorneys), and $2,500 by the Treasury Department (including
accountants). The only other expense to be borne by each of the companies is
their pro rata share of the $2,000 filing fee under the Act. Based on the
foregoing assumptions, the total fees, commissions, and expenses will be
$966,000.
Item 3. Applicable Statutory Provisions
----------------------------------------
(1) The issuance of notes by the Borrowing Companies to banks: Sections
6(a) and 7 of the Act.
(2) The issue and sale of notes by Mass. Electric, Narragansett, and NEP
to CP Dealers: Section 6(a) and 7 of the Act.
(3) Borrowings from the Money Pool: Sections 6(a), 7, 9(a), 10, and 12 of
the Act and Rules 43 and 45.
(4) Loans to the Money Pool: Section 9(a), 10, and 12 of the Act; and
exempted from Rule 45(a) by subparagraph (b) (1) thereof.
(5) Investments by the Money Pool: Section 9(a), 10, and 12 of the Act.
(6) The payment of indebtedness is exempted from Sections 9(a) and 12 and
Rule 42(a) by subparagraph (b)(2) of the Rule.
Item 4. Regulatory Approval
----------------------------
The New Hampshire Public Utilities Commission (NHPUC) has jurisdiction
over the proposed issuance of short-term promissory notes by Granite, NEP,
NEET, and NH Hydro. The NHPUC has authorized Granite, NEP, NEET, and NH Hydro
to incur short-term indebtedness in amounts not exceeding $10 million, $375
million, $10 million and $25 million outstanding at any one time,
respectively.
The Massachusetts Department of Public Utilities (MDPU) has
jurisdiction over the lending of funds by Mass. Electric, Mass. Hydro, and
NEP. Mass. Electric, Mass. Hydro, and NEP have been authorized by the MDPU to
participate in the Money Pool on its current terms.
No other state or Federal commission (other than the Securities and
Exchange Commission) has jurisdiction over the proposed transactions.
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
allowing this Application/Declaration to become effective on October 22, 1995,
or as soon as practicable.
The companies (i) do not request a recommended decision by an
administrative law judge, (ii) do not request a recommended decision by any
other responsible officer of the Commission, (iii) hereby specify that the
Division of Investment Management may assist in the preparation of the
Commission's decision, and (iv) hereby request 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
D-1(a) Petition of Mass. Electric, Mass. Hydro, and NEP to the
Massachusetts Department of Public Utilities.
Incorporated herein by reference to Exhibit D-1(a) (2)
(File No. 70-7765).
D-1(b) Petition of Granite to the New Hampshire Public
Utilities Commission
Incorporated herein by reference to Exhibit D-1(b) (1)
(File No. 70-7535).
D-1(c) Petition of NEP to the New Hampshire Public Utilities
Commission.
Incorporated herein by reference to Exhibit D-1(c)(ii)
(File No. 70-8261).
D-1(d) Petition of NEET to the New Hampshire Public Utilities
Commission.
Incorporated herein by reference to Exhibit D-1
(File No. 70-7213).
D-1(e) Petition of NH Hydro to the New Hampshire Public
Utilities Commission
Incorporated herein by reference to Exhibit D-2(a)
(File No. 70-7821).
D-2(a) Certified copy of the order of the Massachusetts
Department of Public Utilities with respect to Mass.
Electric, Mass. Hydro and NEP.
Incorporated herein by reference to Exhibit D-2(a)(2)
(File No. 70-7765).
D-2(b) Certified copy of the order of the New Hampshire Public Utilities
Commission with respect to Granite.
Incorporated herein by reference to Exhibit D-2(b)(1)
(File No. 70-7535).
D-2(c) Certified copy of the order of the New Hampshire Public
Utilities Commission with respect to NEP.
Incorporated herein by reference to Exhibit D-2(c)(ii)
(File No. 70-8261)
D-2(d) Certified copy of the order of the New Hampshire Public
Utilities Commission with respect to NEET.
Incorporated herein by reference to Exhibit D-2
(File No. 70-7213).
D-2(e) Certified copy of the order of the New Hampshire Public
Utilities Commission with respect to NH Hydro.
Incorporated herein by reference to Exhibit D-2
(File No. 70-7839).
*F Opinion of Counsel.
G Current Terms of the NEES Money Pool.
Incorporated herein by reference to Exhibit G-1
(File No. 70-7765).
H Proposed Form of Notice
*To be supplied by amendment.
(b) Financial Statements
1 Balance Sheets of NEES and of NEES and Subsidiaries Consolidated,
Granite, Mass. Electric, Narragansett, NERC, NEET, NEEI, Mass. Hydro,
NH Hydro, NEP, and NEPSCO as of June 30, 1995.
The proposed transactions will have no material effect on the Balance
Sheets of NEES or of NEES and Subsidiaries Consolidated, Granite,
Mass. Electric, Narragansett, NERC, NEET, NEEI, Mass. Hydro, NH Hydro,
NEP, and NEPSCO; pro forma statements, therefore, are omitted.
2 Statements of Income and Retained Earnings of NEES and NEES and
Subsidiaries Consolidated, Granite, Mass. Electric, Narragansett,
NERC, NEET, NEEI, Mass. Hydro, NH Hydro, NEP,NEPSCO for the twelve
months ended June 30, 1995 on an actual basis.
Because the amount of short-term debt fluctuates widely during any
period, it is not practicable to give the pro forma effect of the
proposed transactions.
3 Estimated Sources and Applications of Funds and Capitalization for
each of the Borrowing Companies:
3(a) Granite
3(b) Mass. Electric
3(c) Narragansett
3(d) NEET
3(e) NEP
3(f) Mass. Hydro
3(g) NH Hydro
3(h) NEPSCO
Since the date of the Balance Sheets, there have been no material
changes which were not in the ordinary course of business.
Financial Data Schedules are being filed for each company.
Item 7. Information as to Environmental Effects
------------------------------------------------
The proposed transactions do not involve a major Federal action
significantly affecting the quality of the human environment.
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, each undersigned company has duly caused this statement to be signed
on its behalf, as indicated, by the undersigned officers thereunto duly
authorized by each such company.
NEW ENGLAND ELECTRIC SYSTEM
MASSACHUSETTS ELECTRIC COMPANY
NEW ENGLAND POWER COMPANY
NEW ENGLAND POWER SERVICE COMPANY
s/Michael E. Jesanis
By
Michael E. Jesanis, Treasurer
NARRAGANSETT ENERGY RESOURCES COMPANY
NEW ENGLAND ELECTRIC TRANSMISSION CORPORATION
NEW ENGLAND ENERGY INCORPORATED
NEW ENGLAND HYDRO-TRANSMISSION ELECTRIC COMPANY, INC.
NEW ENGLAND HYDRO-TRANSMISSION CORPORATION
s/John G. Cochrane
By
John G. Cochrane, Treasurer
GRANITE STATE ELECTRIC COMPANY
s/Marcy L. Reed
By
Marcy L. Reed, Assistant Treasurer
THE NARRAGANSETT ELECTRIC COMPANY
s/John G. Cochrane
By
John G. Cochrane, Assistant Treasurer
DATE: August 25, 1995
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 No. Description Page
----------- --------------------------- --------------
D-1(a) Petition of Mass. Electric, Incorporated
Mass. Hydro. and NEP to the by reference
Massachusetts Department of
Public Utilities.
D-1(b) Petition of Granite to the Incorporated
New Hampshire Public Utilities by reference
Commission.
D-1(c) Petition of NEP to the New Incorporated
Hampshire Public Utilities by reference
Commission
D-1(d) Petition of NEET to the New Incorporated
Hampshire Public Utilities by reference
Commission
D-1(e) Petition of NH Hydro to the Incorporated
New Hampshire Public Utilities by reference
Commission
D-2(a) Certified copy of the order of Incorporated
the Massachusetts Department of by reference
Public Utilities with respect to
Mass. Electric, Mass. Hydro and NEP
D-2(b) Certified copy of the order of Incorporated
the New Hampshire Public Utilities by reference
Commission with respect to Granite
D-2(c) Certified copy of the order of Incorporated
the New Hampshire Public Utilities by reference
Commission with respect to NEP
D-2(d) Certified copy of the order of Incorporated
the New Hampshire Public Utilities by reference
Commission with respect to NEET
D-2(e) Certified copy of the order of Incorporated
the New Hampshire Public Utilities by reference
Commission with respect to NH Hydro
F Opinion of Counsel To be filed
by amendment
G Current Terms of the NEES Money Incorporated
Pool by reference
H Proposed Form of Notice Filed herewith
Financial
Statement No. Description Page
------------- --------------------------------- ---------------
1 Balance Sheets of NEES and of Filed herewith
NEES and Subsidiaries Consolidated,
Granite, Mass. Electric, Narragansett,
NERC, NEET, NEEI, Mass. Hydro, NH Hydro,
NEP, and NEPSCO as of June 30, 1995.
2 Statements of Income and Retained Filed herewith
Earnings of NEES and NEES and
Subsidiaries Consolidated, Granite,
Mass. Electric, Narragansett, NERC,
NEET, NEEI, Mass. Hydro, NH Hydro,
NEP, NEPSCO for the twelve months
ended June 30, 1995 on an actual basis.
3 Estimated Sources and Applications Filed herewith
of Funds and Capitalization for each
of the Borrowing Companies:
3(a) Granite
3(b) Mass. Electric
3(c) Narragansett
3(d) NEET
3(e) NEP
3(f) Mass. Hydro
3(g) NH Hydro
3(h) NEPSCO
27 Financial Data Schedule for NEES Filed herewith
and NEES and Subsidiaries Consolidated,
Granite, Mass. Electric, Narragansett,
NERC, NEET, NEEI, Mass. Hydro, NH Hydro,
NEP, and NEPSCO
EX-99
3
EXHIBIT H
Exhibit H
PROPOSED FORM OF NOTICE
New England Electric System ("NEES"), a registered holding company,
and ten of its subsidiaries, Granite State Electric Company ("Granite"),
Massachusetts Electric Company ("Mass. Electric"), The Narragansett
Electric Company ("Narragansett"), Narragansett Energy Resources Company
("NERC"), New England Electric Transmission Corporation ("NEET"), New
England Energy Incorporated ("NEEI"), New England Hydro-Transmission
Electric Company, Inc. ("Mass. Hydro"), New England Hydro Transmission
Corporation ("NH Hydro"), New England Power Company ("NEP") and New
England Power Service Company ("NEPSCO"), 25 Research Drive, Westborough,
Massachusetts 01582, have filed an application/declaration with this
Commission pursuant to Sections 6(a), 7, 9(a), 10, and 12 of the Public
Utility Holding Company Act of 1935 ("Act") and Rules 42, 43, and 45
thereunder.
Granite, Mass. Electric, Narragansett, NEET, Mass. Hydro, NH Hydro,
NEP, and NEPSCO (the "Borrowing Companies") propose, through October 31,
1997, to borrow from NEES Money Pool and/or banks and, in the cases of
Mass. Electric, Narragansett, and NEP, to issue commercial paper, up to
the following maximum outstanding amounts: Granite - $10,00,000; Mass.
Electric - $150,000,000; Narragansett - $100,000,000; NEET - $10,000,000;
Mass. Hydro - $25,000,000; NH Hydro - $25,000,000; NEP - $375,000,000; and
NEPSCO - $25,000,000. The proceeds of the proposed borrowings are to be
used (i) to pay then outstanding notes initially issued to banks and/or
dealers in commercial paper and/or borrowings from the Money Pool, (ii) to
provide new money for capitalizable expenditures and/or to reimburse the
treasury therefor, and (iii) for other corporate purposes.
The Borrowing Companies propose to reduce their need for outside
borrowing through the continued use of the NEES Money Pool. Under the
Money Pool, surplus funds that may be available from day to day in the
treasuries of NEES and certain of the NEES subsidiaries are used to make
loans to subsidiaries in need of the short-term funds. The rate will be
108% of the monthly average of the rate for high grade 30-day commercial
paper sold through dealers by major corporations as published in the Wall
Street Journal.
The proposed borrowings by the Borrowing Companies from banks will be
evidenced by notes maturing in less than one year from the date of
issuance. The Borrowing Companies will negotiate with the banks the
interest costs of such borrowings. The Borrowing Companies pay 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. Based on the current base lending rate of 8.75% and an
equivalent or lower high federal funds rate, the effective interest costs
of such borrowing today would not exceed 9.75% per annum.
The commercial paper proposed to be issued and sold by Mass.
Electric, Narragansett, and NEP will be in the form of unsecured
promissory notes having varying maturities of not in excess of 270 days.
EX-99
4
FINANCIAL STATEMENT 1
NEW ENGLAND ELECTRIC SYSTEM
(Parent Company Only)
Balance Sheet
At June 30, 1995
(Unaudited)
ASSETS
------
(In Thousands)
Investments:
Common stocks of subsidiaries, at equity $1,521,928
Notes of subsidiaries 55,885
Other investments 2,326
----------
Total investments 1,580,139
----------
Current assets:
Cash 111
Temporary cash investments - subsidiary company 5,850
Interest and dividends receivable of subsidiaries 40,859
Other current assets 41
----------
Total current assets 46,861
----------
Deferred federal income taxes 2,241
----------
$1,629,241
==========
CAPITALIZATION AND LIABILITIES
------------------------------
Common share equity:
Common shares, par value $1 per share:
Authorized - 150,000,000 shares
Issued - 64,969,652 shares $ 64,969
Paid-in capital 736,567
Retained earnings (including $564,569,000 of
undistributed subsidiary earnings) 784,549
----------
Total common share equity 1,586,085
----------
Current liabilities:
Accounts payable (including $50,000 to subsidiaries) 1,159
Other accrued expenses 1,622
Dividends payable 34,341
----------
Total current liabilities 37,122
----------
Deferred credits 6,034
----------
$1,629,241
==========
NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES
Consolidated Balance Sheet
At June 30, 1995
(Unaudited)
ASSETS
------
(In Thousands)
Utility plant, at original cost $5,007,112
Less accumulated provisions for depreciation and
amortization 1,672,143
----------
3,334,969
Net investment in Seabrook 1 under rate settlement 22,814
Construction work in progress 450,375
----------
Net utility plant 3,808,158
----------
Oil and gas properties, at full cost 1,257,126
Less accumulated provision for amortization 1,001,275
----------
Net oil and gas properties 255,851
----------
Investments:
Nuclear power companies, at equity 46,669
Other subsidiaries, at equity 41,070
Other investments, at cost 53,476
----------
Total investments 141,215
----------
Current assets:
Cash 4,103
Accounts receivable, less reserves of $17,716,000 258,587
Unbilled revenues 46,900
Fuel, materials, and supplies, at average cost 107,734
Prepaid and other current assets 77,649
---------
Total current assets 494,973
---------
Accrued Yankee Atomic costs 107,769
Deferred charges and other assets 319,251
---------
$5,127,217
==========
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 784,549
----------
1,586,342
Less 44,448 shares of treasury stock, at cost 1,490
----------
Total common share equity 1,584,852
Minority interests in consolidated subsidiaries 52,357
Cumulative preferred stock of subsidiaries 147,016
Long-term debt 1,630,248
----------
Total capitalization 3,414,473
----------
Current liabilities:
Long-term debt due within one year 32,520
Short-term debt 226,180
Accounts payable 130,665
Accrued taxes 13,118
Accrued interest 28,453
Dividends payable 38,435
Other current liabilities 95,525
----------
Total current liabilities 564,896
----------
Deferred federal and state income taxes 749,811
Unamortized investment tax credits 93,583
Accrued Yankee Atomic costs 107,769
Other reserves and deferred credits 196,685
----------
$5,127,217
==========
GRANITE STATE ELECTRIC COMPANY
Balance Sheet
At June 30, 1995
(Unaudited)
ASSETS
------
(In Thousands)
Utility plant, at original cost $61,999
Less accumulated provisions for depreciation 16,373
-------
45,626
Construction work in progress 911
-------
Net utility plant 46,537
-------
Current assets:
Cash and temporary cash investments 135
Accounts receivable:
From sales of electric energy 5,478
Other (including $113,000 from affiliates) 380
Less reserves for doubtful accounts 285
-------
5,573
Materials and supplies, at average cost 383
Prepaid and other current assets 346
-------
Total current assets 6,437
-------
Deferred charges and other assets 2,467
-------
$55,441
=======
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock, par value $100 per share, authorized
and outstanding 60,400 shares $ 6,040
Other paid-in capital 4,000
Retained earnings 8,430
-------
Total common equity 18,470
Long-term notes 11,000
-------
Total capitalization 29,470
-------
Current liabilities:
Long-term notes due within one year 1,000
Short-term debt to affiliates 6,175
Accounts payable (including $6,822,000 to affiliates) 7,294
Other accrued expenses 4,181
Customer deposits 678
Dividends payable 60
-------
Total current liabilities 19,388
-------
Deferred federal income taxes 3,649
Unamortized investment tax credits 1,056
Other reserves and deferred credits 1,878
-------
$55,441
=======
MASSACHUSETTS ELECTRIC COMPANY
Balance Sheet
At June 30, 1995
(Unaudited)
ASSETS
------
(In Thousands)
Utility plant, at original cost $1,382,933
Less accumulated provisions for depreciation 387,618
----------
995,315
Construction work in progress 23,396
----------
Net utility plant 1,018,711
----------
Current assets:
Cash 1,171
Accounts receivable:
From sales of electric energy 155,239
Other (including $1,065,000 from affiliates) 10,142
Less reserves for doubtful accounts 11,991
----------
153,390
Unbilled revenues 34,700
Materials and supplies, at average cost 11,273
Prepaid and other current assets 21,572
----------
Total current assets 222,106
----------
Deferred charges and other assets 58,167
----------
$1,298,984
==========
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock, par value $25 per share, authorized
and outstanding 2,398,111 shares $ 59,953
Premiums on capital stocks 45,862
Other paid-in capital 141,309
Retained earnings 134,654
----------
Total common equity 381,778
Cumulative preferred stock 50,000
Long-term debt 333,327
----------
Total capitalization 765,105
----------
Current liabilities:
Long-term debt due within one year 10,000
Short-term debt (including $2,700,000 to affiliates) 70,275
Accounts payable (including $156,162,000 to affiliates) 164,553
Accrued liabilities:
Taxes 922
Interest 9,052
Other accrued expenses 30,975
Customer deposits 4,895
Dividends payable 3,177
----------
Total current liabilities 293,849
----------
Deferred federal and state income taxes 173,900
Unamortized investment tax credits 18,250
Other reserves and deferred credits 47,880
----------
$1,298,984
==========
THE NARRAGANSETT ELECTRIC COMPANY
Balance Sheet
At June 30, 1995
(Unaudited)
ASSETS
------
(In Thousands)
Utility plant, at original cost $640,456
Less accumulated provisions for depreciation 168,083
--------
472,373
Construction work in progress 44,472
--------
Net utility plant 516,845
--------
Current assets:
Cash 1,106
Accounts receivable:
From sales of electric energy 55,407
Other (including $4,871,000 from affiliates) 13,063
Less reserves for doubtful accounts 5,440
--------
63,030
Unbilled revenues 12,200
Fuel, materials and supplies, at average cost 6,448
Prepaid and other current assets 16,007
--------
Total current assets 98,791
--------
Deferred charges and other assets 57,204
--------
$672,840
========
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock, par value $50 per share,
authorized and outstanding 1,132,487 shares $ 56,624
Premiums on preferred stocks 170
Other paid-in capital 60,000
Retained earnings 97,345
--------
Total common equity 214,139
Cumulative preferred stock 36,500
Long-term debt 203,827
--------
Total capitalization 454,466
--------
Current liabilities:
Short-term debt (including $17,750,000 to affiliates) 27,850
Accounts payable (including $44,518,000 to affiliates) 50,453
Accrued liabilities:
Taxes 711
Interest 6,018
Other accrued expenses 23,288
Customer deposits 5,396
Dividends payable 3,933
--------
Total current liabilities 117,649
--------
Deferred federal income taxes 73,509
Unamortized investment tax credits 8,267
Other reserves and deferred credits 18,949
--------
$672,840
========
NARRAGANSETT ENERGY RESOURCES COMPANY
Balance Sheet
At June 30, 1995
(Unaudited)
ASSETS
------
(In Thousands)
Equity investments $37,210
-------
Current assets:
Cash 12
Temporary cash investments - affiliated companies 2,375
Interest receivable (including $12,000 from affiliates) 13
Prepayments 8
-------
Total current assets 2,408
-------
$39,618
=======
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock and related premium, par value $1 per share,
authorized 8,000 shares, outstanding 25 shares $ 25
Other paid-in capital 33,140
Retained earnings 446
-------
Total common equity 33,611
-------
Current liabilities:
Accrued taxes 142
Dividends payable 1,250
-------
Total current liabilities 1,392
-------
Deferred federal income taxes 1,512
Unamortized investment tax credits 2,017
Other deferred credits 1,086
-------
$39,618
=======
NEW ENGLAND ELECTRIC TRANSMISSION CORPORATION
Balance Sheet
At June 30, 1995
(Unaudited)
ASSETS
------
(In Thousands)
Utility plant, at original cost $91,168
Less accumulated provisions for depreciation 40,377
-------
Net utility plant 50,791
-------
Current assets:
Cash and temporary cash investments with affiliates 250
Accounts receivable from affiliates 2
Materials and supplies, at average cost 153
Other current assets 35
-------
Total current assets 440
-------
Deferred charges and other assets 444
-------
$51,675
=======
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock and related premium, par value $5 per share
Authorized - 300 shares
Outstanding - 150 shares $ 150
Other paid-in capital 3,600
Retained earnings 109
-------
Total common equity 3,859
Long-term debt 28,096
-------
Total capitalization 31,955
-------
Current liabilities:
Long-term debt due within one year 4,324
Accounts payable (including $486,000 to affiliates) 930
Accrued taxes 185
Accrued interest 119
Other accrued expenses 17
Dividends payable 247
-------
Total current liabilities 5,822
-------
Deferred federal and state income taxes 8,244
Unamortized investment tax credits 4,403
Other reserves and deferred credits 1,251
-------
$51,675
=======
NEW ENGLAND ENERGY INCORPORATED
Balance Sheet
At June 30, 1995
(Unaudited)
ASSETS
------
(In Thousands)
Current assets:
Cash $ 31
Temporary cash investments - affiliated companies 12,875
Accounts receivable from affiliates 31,071
Other current assets 342
----------
Total current assets 44,319
----------
Proved oil and gas properties, at full cost 1,255,893
Unproved properties 1,233
----------
1,257,126
Less accumulated provision for amortization 1,001,275
----------
Net oil and gas properties 255,851
----------
$ 300,170
==========
LIABILITIES AND PARENT COMPANY'S INVESTMENT
--------------------------------------------
Current liabilities:
Accounts payable (including $4,000 to affiliates) $ 5,306
Accrued interest 1,851
Accrued taxes 7,511
----------
Total current liabilities 14,668
----------
Deferred income taxes 89,272
Other deferred credits 6,152
----------
Total deferred credits 95,424
----------
Notes payable to banks under credit agreement 193,000
----------
Parent company's investment:
Common stock, par value $1 per share (authorized
250,000 shares; outstanding 2,500 shares) 2
Paid-in capital 248
Accumulated deficit (22,643)
Subordinated notes payable to parent 19,471
----------
Total parent company's investment (2,922)
----------
$ 300,170
==========
NEW ENGLAND HYDRO-TRANSMISSION ELECTRIC COMPANY, INC.
Balance Sheet
At June 30, 1995
(Unaudited)
ASSETS
------
(In Thousands)
Utility plant, at original cost $221,842
Less accumulated provision for depreciation 39,506
--------
Net utility plant 182,336
--------
Current assets:
Cash, and temporary cash investments (including
$3,725,000 with affiliated companies) 3,730
Accounts receivable (including $14,000 from affiliates) 198
Materials and supplies, at average cost 3,609
Other current assets 106
--------
Total current assets 7,643
--------
Investment in New England Hydro Finance
Company, Inc., at cost 5
Deferred charges 8,904
--------
$198,888
========
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock and related premium, par value $1 per share,
Authorized - Class A - 13,705,000 shares,
- Class B - 295,000 shares
Outstanding - Class A - 3,737,972 shares,
- Class B - 262,028 shares $ 40,000
Other paid-in capital 16,384
Retained earnings 7,049
--------
Total common equity 63,433
Long-term debt - affiliated company 95,010
--------
Total capitalization 158,443
--------
Current liabilities:
Long-term debt due in one year - affiliated company 6,960
Accounts payable (including $1,868,000 to affiliates) 1,913
Accrued liabilities:
Interest - affiliated company 388
Taxes
Other accrued expenses 720
Dividends payable 4,000
--------
Total current liabilities 13,981
--------
Deferred federal and state income taxes 22,627
Unamortized investment tax credits 3,837
--------
$198,888
========
NEW ENGLAND HYDRO-TRANSMISSION CORPORATION
Balance Sheet
At June 30, 1995
(Unaudited)
ASSETS
------
(In Thousands)
Utility plant, at original cost $177,532
Less accumulated provision for depreciation 26,126
--------
Net utility plant 151,406
--------
Current assets:
Cash and temporary cash investments (including
$2,375,000 with affiliated companies) 2,502
Accounts receivable (including $37,000 from affiliates) 51
Materials and supplies, at average cost 346
Other current assets 40
--------
Total current assets 2,939
--------
Investment in New England Hydro Finance
Company, Inc., at cost 5
Deferred charges 7,569
--------
$161,919
========
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock and related premium, par value $5 per share
Authorized - Class A - 88,000 shares
- Class B - 2,000 shares
Outstanding - Class A - 21,493 shares
- Class B - 1,507 shares $ 23,000
Other paid-in capital 18,949
Retained earnings 247
--------
Total common equity 42,196
Long-term debt - affiliated company 58,760
--------
Total capitalization 100,956
--------
Current liabilities:
Long-term debt due in one year - affiliated company 4,560
Accounts payable (including $2,952,000 to affiliates) 2,938
Accrued liabilities:
Interest - affiliated company 240
Taxes 638
Other accrued expenses 1,436
Dividends payable 1,610
--------
Total current liabilities 11,422
--------
Deferred federal and state income taxes 17,071
Unamortized investment tax credits 2,081
Obligation under capital lease excluding current portion 30,389
--------
$161,919
========
NEW ENGLAND POWER COMPANY
Balance Sheet
At June 30, 1995
(Unaudited)
ASSETS
------
(In Thousands)
Utility plant, at original cost $2,556,429
Less accumulated provisions for depreciation and
amortization 1,034,436
----------
1,521,993
Net investment in Seabrook 1 under rate settlement 22,814
Construction work in progress 381,589
----------
Net utility plant 1,926,396
----------
Investments:
Nuclear power companies, at equity 46,669
Nonutility property and other investments, at cost 23,194
----------
Total investments 69,863
----------
Current assets:
Cash 1,093
Accounts receivable, principally from sales of electric
energy:
Affiliated companies 210,838
Others 41,650
Fuel, materials and supplies, at average cost 85,659
Prepaid and other current assets 31,002
----------
Total current assets 370,242
----------
Accrued Yankee Atomic costs 107,769
Deferred charges and other assets 196,750
----------
$2,671,020
==========
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock, par value $20 per share,
authorized and outstanding 6,449,896 shares $ 128,998
Premiums on capital stocks 86,829
Other paid-in capital 288,000
Retained earnings 368,443
----------
Total common equity 872,270
Cumulative preferred stock, par value $100 per share 60,516
Long-term debt 735,325
----------
Total capitalization 1,668,111
----------
Current liabilities:
Long-term debt due in one year 10,000
Short-term debt (including $17,375,000 to affiliates) 165,880
Accounts payable (including $37,154,000 to affiliates) 138,793
Accrued liabilities:
Taxes 2,744
Interest 10,930
Other accrued expenses 10,700
Dividends payable 30,637
----------
Total current liabilities 369,684
----------
Deferred federal and state income taxes 376,340
Unamortized investment tax credits 58,064
Accrued Yankee Atomic costs 107,769
Other reserves and deferred credits 91,052
----------
$2,671,020
==========
NEW ENGLAND POWER SERVICE COMPANY
Balance Sheet
At June 30, 1995
(Unaudited)
ASSETS
------
(In Thousands)
Property under capital leases $28,965
Other service company property 138
Less accumulated provisions for depreciation 138
-------
Net service company property -
-------
Investments 15,793
Current assets:
Cash 360
Temporary cash investments 16,550
Accounts receivable from associated companies 2,422
Other accounts receivable 1,915
Miscellaneous current and accrued assets 8,094
-------
Total current assets 29,341
-------
Deferred federal income taxes 5,823
Miscellaneous deferred debits 1,927
-------
$81,849
=======
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock, par value $25 per share
authorized 4,000 shares, outstanding 3 shares
Miscellaneous paid-in capital $ 1,350
Retained earnings 79
-------
Total capitalization 1,429
-------
Current liabilities:
Accounts payable 7,808
Miscellaneous current and accrued liabilities 17,940
-------
Total current liabilities 25,748
-------
Accumulated deferred investment tax credits 13
Other reserves and deferred credits 54,659
-------
$81,849
=======
EX-99
5
FINANCIAL STATEMENT 2
NEW ENGLAND ELECTRIC SYSTEM
(Parent Company Only)
Statement of Income
Twelve Months Ended June 30, 1995
(Unaudited)
(In Thousands)
Equity in earnings of subsidiaries $ 180,978
Interest income - subsidiaries 456
---------
Total income from subsidiaries 181,434
Other income 123
---------
Total income 181,557
Corporate and fiscal expenses (includes $1,833,000 for cost
of services billed by an affiliated company) 3,229
Federal income taxes 342
---------
Income before interest 177,986
Interest 224
---------
Net income $ 177,762
=========
Statement of Retained Earnings
Retained earnings at beginning of period $ 757,192
Net income 177,762
Dividends declared on common shares (150,405)
---------
Retained earnings at end of period $ 784,549
=========
NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES
Statement of Consolidated Income
Twelve Months Ended June 30, 1995
(Unaudited)
(In Thousands)
Operating revenue $2,240,908
----------
Operating expenses:
Fuel for generation 212,605
Purchased electric energy 559,903
Other operation 500,030
Maintenance 164,546
Depreciation and amortization 285,712
Taxes, other than income 126,884
Income taxes 111,044
----------
Total operating expenses 1,960,724
----------
Operating income 280,184
Other income:
Allowance for equity funds used during
construction 10,869
Equity in income of generating companies 9,826
Other income (expense) - net (1,849)
----------
Operating and other income 299,030
----------
Interest
Interest on long-term debt 101,411
Other interest 15,069
Allowance for borrowed funds used during
construction (11,574)
----------
Total interest 104,906
----------
Income after interest 194,124
Preferred dividends of subsidiaries 8,689
Minority interests 7,673
----------
Net income $ 177,762
==========
Statement of Retained Earnings
Retained earnings at beginning of period $ 757,192
Net income 177,762
Dividends declared on common shares (150,405)
---------
Retained earnings at end of period $ 784,549
=========
GRANITE STATE ELECTRIC COMPANY
Statement of Income
Twelve Months Ended June 30, 1995
(Unaudited)
(In Thousands)
Operating revenue $64,580
-------
Operating expenses:
Purchased electric energy, principally from
New England Power Company, an affiliate 46,134
Other operation 9,618
Maintenance 1,790
Depreciation 2,018
Taxes, other than federal income 1,743
Federal income taxes 553
-------
Total operating expenses 61,856
-------
Operating income 2,724
Other income (expense) - net, including related taxes (99)
-------
Operating and other income 2,625
-------
Interest:
Interest on long-term notes 1,241
Other interest 468
Allowance for borrowed funds used during construction -
(credit) (18)
-------
Total interest 1,691
-------
Net income $ 934
=======
Statement of Retained Earnings
Retained earnings at beginning of period $ 7,859
Net income 934
Dividends declared on common stock (363)
-------
Retained earnings at end of period $ 8,430
=======
MASSACHUSETTS ELECTRIC COMPANY
Statement of Income
Twelve Months Ended June 30, 1995
(Unaudited)
(In Thousands)
Operating revenue $1,488,995
----------
Operating expenses:
Purchased electric energy, principally from
New England Power Company, an affiliate 1,097,275
Other operation 212,679
Maintenance 35,203
Depreciation 44,055
Taxes, other than income taxes 28,826
Income taxes 15,945
----------
Total operating expenses 1,433,983
----------
Operating income 55,012
Other income (expense) - net (46)
----------
Operating and other income 54,966
----------
Interest:
Interest on long-term debt 23,382
Other interest 7,382
Allowance for borrowed funds used during
construction - credit (430)
----------
Total interest 30,334
----------
Net income $ 24,632
==========
Statement of Retained Earnings
Retained earnings at beginning of period $ 138,317
Net income 24,632
Dividends declared on cumulative preferred stock (3,114)
Dividends declared on common stock (25,181)
----------
Retained earnings at end of period $ 134,654
==========
THE NARRAGANSETT ELECTRIC COMPANY
Statement of Income
Twelve Months Ended June 30, 1995
(Unaudited)
(In Thousands)
Operating revenue $493,854
--------
Operating expenses:
Purchased electric energy, principally from
New England Power Company, an affiliate 301,616
Other operation 73,672
Maintenance 11,106
Depreciation 26,496
Taxes, other than federal income taxes 36,265
Federal income taxes 7,760
--------
Total operating expenses 456,915
--------
Operating income 36,939
Other income:
Allowance for equity funds used
during construction 838
Other income (expense) - net (270)
--------
Operating and other income 37,507
--------
Interest:
Interest on long-term debt 15,590
Other interest 3,331
Allowance for borrowed funds used during
construction - credit (1,526)
--------
Total interest 17,395
--------
Net income $ 20,112
========
Statement of Retained Earnings
Retained earnings at beginning of period $ 84,755
Net income 20,112
Dividends declared on cumulative preferred stock (2,143)
Dividends declared on common stock (5,379)
--------
Retained earnings at end of period $ 97,345
========
NARRAGANSETT ENERGY RESOURCES COMPANY
Statement of Income
Twelve Months Ended June 30, 1995
(Unaudited)
(In Thousands)
Income:
Equity in income of generating companies $ 7,233
Other income (expenses) - net 85
-------
Total income 7,318
-------
Expenses:
Operation expenses 73
Taxes, other than income 26
Income taxes 2,384
-------
Total expenses 2,483
-------
Net income $ 4,835
=======
Statement of Retained Earnings
Retained earnings at beginning of period $ 361
Net income 4,835
Dividends declared on common stock (4,750)
-------
Retained earnings at end of period $ 446
=======
NEW ENGLAND ELECTRIC TRANSMISSION CORPORATION
Statement of Income
Twelve Months Ended June 30, 1995
(Unaudited)
(In Thousands)
Operating revenue $12,802
-------
Operating expenses:
Operation 2,428
Maintenance 272
Depreciation and amortization 4,687
Taxes, other than income 1,068
Income taxes 199
------
Total operating expenses 8,654
------
Operating income 4,148
Other income (expense) - net 8
------
Operating and other income 4,156
------
Interest:
Interest on long-term debt 3,097
Other interest 22
------
Total interest 3,119
------
Net income $1,037
======
Statement of Retained Earnings
Retained earnings at beginning of period $ 251
Net income 1,037
Dividends declared on common stock (1,139)
Other charges (40)
------
Retained earnings at end of period $ 109
======
NEW ENGLAND ENERGY INCORPORATED
Statement of Operations and Accumulated Deficit
Twelve Months Ended June 30, 1995
(Unaudited)
(In Thousands)
Operating revenue:
Sales to non-affiliates:
Oil $ 5,519
Gas 27,101
Accrued revenue due from an affiliate 41,041
----------
Total operating revenue 73,661
----------
Operating expenses:
Amortization 72,280
Production costs 4,584
Other expenses 231
----------
Total operating expenses 77,095
----------
Operating loss (3,434)
Other income (expense):
Interest income 4
Interest expense (2,357)
----------
Loss before income taxes (5,787)
Income tax benefit 4,124
----------
Net loss (1,663)
Accumulated deficit at beginning of period (20,980)
----------
Accumulated deficit at end of period $ (22,643)
==========
NEW ENGLAND HYDRO-TRANSMISSION ELECTRIC COMPANY, INC.
Statement of Income
Twelve Months Ended June 30, 1995
(Unaudited)
(In Thousands)
Operating revenue $42,601
-------
Operating expenses:
Operation 5,053
Maintenance 971
Depreciation and amortization 8,728
Taxes, other than income 2,508
Income taxes 6,126
-------
Total operating expenses 23,386
-------
Operating income 19,215
Other income 18
-------
Operating and other income 19,233
-------
Interest:
Interest on long-term debt - affiliated company 9,655
Other interest 202
-------
Total interest 9,857
-------
Net income $ 9,376
=======
Statement of Retained Earnings
Retained earnings at beginning of period $10,673
Net income 9,376
Dividends declared on common stock (13,000)
-------
Retained earnings at end of period $ 7,049
=======
NEW ENGLAND HYDRO-TRANSMISSION CORPORATION
Statement of Income
Twelve Months Ended June 30, 1995
(Unaudited)
(In Thousands)
Operating revenue $35,363
-------
Operating expenses:
Operation 10,255
Maintenance 306
Depreciation 5,868
Taxes, other than income 3,013
Income taxes 3,871
-------
Total operating expenses 23,313
-------
Operating income 12,050
Other income 97
-------
Operating and other income 12,147
-------
Interest:
Interest on long-term debt - principally affiliated company 6,001
Other interest 44
-------
Total interest 6,045
-------
Net income $ 6,102
=======
Statement of Retained Earnings
Retained earnings at beginning of period $ 355
Net income 6,102
Dividends declared on common stock (6,210)
-------
Retained earnings at end of period $ 247
=======
NEW ENGLAND POWER COMPANY
Statement of Income
Twelve Months Ended June 30, 1995
(Unaudited)
(In Thousands)
Operating revenue, principally from affiliates $1,553,990
----------
Operating expenses:
Fuel for generation 253,868
Purchased electric energy 559,375
Other operation 208,358
Maintenance 115,170
Depreciation and amortization 126,267
Taxes, other than income taxes 54,398
Income taxes 81,555
----------
Total operating expenses 1,398,991
----------
Operating income 154,999
Other income:
Allowance for equity funds used during construction 10,033
Equity in income of nuclear power companies 4,976
Other income (expense) - net 1,578
----------
Operating and other income 171,586
----------
Interest:
Interest on long-term debt 43,222
Other interest 5,292
Allowance for borrowed funds used during construction -
credit (9,601)
----------
Total interest 38,913
----------
Net income $ 132,673
==========
Statement of Retained Earnings
Retained earnings at beginning of period $ 374,651
Net income 132,673
Dividends declared on cumulative preferred stock (3,433)
Dividends declared on common stock (135,448)
----------
Retained earnings at end of period $ 368,443
==========
NEW ENGLAND POWER SERVICE COMPANY
Statement of Income
Twelve Months Ended June 30, 1995
(Unaudited)
(In Thousands)
Income:
Services rendered to associated companies $227,192
Services rendered to nonassociated companies 2,109
Interest income - associated companies 620
--------
Total income 229,921
--------
Expenses:
Salaries and wages 92,664
General and administrative expenses 128,372
Taxes, other than income taxes 7,779
Income taxes (361)
Interest expense 1,309
--------
Total expenses 229,763
--------
Net income $ 158
========
Statement of Retained Earnings
Retained earnings at beginning of period $ 79
Net income 158
Dividends declared on common stock (158)
--------
Retained earnings at end of period $ 79
========
EX-99
6
FINANCIAL STATEMENT 3
Financial Statement 3(a)
GRANITE STATE ELECTRIC COMPANY
SOURCES AND APPLICATIONS OF FUNDS AND CAPITALIZATION
(Millions of Dollars)
Actual Estimated
--------------- ---------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
Beginning STD/
(Temporary Investment) 3.2 .3 2.5 2.8 3.9
Sources of Funds
----------------
Internal Funds* 3.2 3.2 2.1 4.4 3.8
External Funds:
Long-Term Debt 5.0 - 5.0 - 5.0
Common Equity - - 1.0 - -
---- ---- ---- ---- ----
Total External 5.0 - 6.0 - 5.0
---- ---- ---- ---- ----
Total Sources 8.2 3.2 8.1 4.4 8.8
Application of Funds
--------------------
Construction 3.9 4.0 5.0 4.5 4.5
Retirement of Debt 1.4 1.4 3.4 1.0 -
---- ---- ---- ---- ----
Total Applications 5.3 5.4 8.4 5.5 4.5
Change in S.T. Debt/ ---- ---- ---- ---- ----
(Temporary Investment) (2.9) 2.2 .3 1.1 (4.3)
Ending S.T. Debt/
(Temporary Investment) .3 2.5 2.8 3.9 (.4)
Short-Term Debt High Point 4.0 2.5 6.0 8.0 1.0
Short-Term Debt High Point
(without financing) - - 11.0 13.0 12.0
Capitalization @ 12/31
----------------------
Amount:
Short-Term Debt .3 2.5 2.8 3.9 (0.4)
Long-Term Debt 15.8 14.4 16.0 15.0 20.0
Common Equity 17.3 18.0 20.2 21.6 23.1
---- ---- ---- ---- ----
Total 33.4 34.9 39.0 40.5 42.7
Ratio:
Short-Term Debt .9 7.2 7.2 9.6 (0.9)
Long-Term Debt 47.3 41.3 41.0 37.0 46.8
Common Equity 51.8 51.5 51.8 53.4 54.1
----- ----- ----- ----- -----
100.0% 100.0% 100.0% 100.0% 100.0%
*Net of changes in working capital and other balance sheet items.
Financial Statement 3(b)
MASSACHUSETTS ELECTRIC COMPANY
SOURCES AND APPLICATIONS OF FUNDS AND CAPITALIZATION
(Millions of Dollars)
Actual Estimated
------------- ------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
Beginning STD/
(Temporary Investment) 46 38 82 75 54
Sources of Funds
----------------
Internal Funds* 38 14 57 81 78
External Funds:
Long-Term Debt 116 36 90 20 50
Preferred Stock 35 - - - -
Common Equity 51 - - 15 10
----- ----- ----- ----- -----
Total External 202 36 90 35 60
----- ----- ----- ----- -----
Total Sources 240 50 147 116 138
Application of Funds
--------------------
Construction 80 94 105 95 95
Retirement of Debt 117 - 35 - 30
Redemption of Preferred
Stock 35 - - - -
----- ----- ----- ----- -----
Total Applications 232 94 140 95 125
Change in S.T. Debt/ ----- ----- ----- ----- -----
(Temporary Investment) (8) 44 (7) (21) (13)
Ending S.T. Debt/
(Temporary Investment) 38 82 75 54 41
Short-Term Debt High Point 78 82 107 77 59
Short-Term Debt High Point
(without financing) - - 197 187 219
Capitalization @ 12/31
----------------------
Amount:
Long-Term Debt 266 302 357 377 397
Preferred Stock 50 50 50 50 50
Common Equity 382 384 394 429 459
----- ----- ----- ----- -----
Total 698 736 801 856 906
Ratio:
Long-Term Debt 38.1 41.0 44.6 44.0 43.8
Preferred Stock 7.2 6.8 6.2 5.8 5.5
Common Equity 54.7 52.2 49.2 50.2 50.7
----- ----- ----- ----- -----
100.0% 100.0% 100.0% 100.0% 100.0%
*Net of changes in working capital and other balance sheet items.
Financial Statement 3(c)
NARRAGANSETT ELECTRIC COMPANY
SOURCES AND APPLICATIONS OF FUNDS AND CAPITALIZATION
(Millions of Dollars)
Actual Estimated
------------- ------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
Beginning STD/
(Temporary Investment) 4 20 30 20 18
Sources of Funds
----------------
Internal Funds* 25 35 20 32 36
External Funds:
Long-Term Debt 27 33 25 10 40
Preferred Stock 20 - - - -
Common Equity - 15 20 10 10
----- ----- ----- ----- -----
Total External 47 48 45 20 50
----- ----- ----- ----- -----
Total Sources 72 83 65 52 86
Application of Funds
--------------------
Construction 63 93 55 50 40
Retirement of Debt 15 - - - 33
Redemption of Preferred
Stock 10 - - - -
----- ----- ----- ----- -----
Total Applications 88 93 55 50 73
Change in S.T. Debt/ ----- ----- ----- ----- -----
(Temporary Investment) 16 10 (10) (2) (13)
Ending S.T. Debt/
(Temporary Investment) 20 30 20 18 5
Short-Term Debt High Point 24 38 39 35 10
Short-Term Debt High Point
(without financing) - - 64 70 85
Capitalization @ 12/31
----------------------
Amount:
Long-Term Debt 157 190 215 225 232
Preferred Stock 37 37 37 37 37
Common Equity 184 209 236 253 270
----- ----- ----- ----- -----
Total 378 436 488 515 539
Ratio:
Long-Term Debt 41.5 43.6 44.1 43.7 43.0
Preferred Stock 9.8 8.5 7.6 7.2 6.9
Common Equity 48.7 47.9 48.3 49.1 50.1
----- ----- ----- ----- -----
100.0% 100.0% 100.0% 100.0% 100.0%
*Net of changes in working capital and other balance sheet items.
Financial Statement 3(d)
NEW ENGLAND ELECTRIC TRANSMISSION
SOURCES AND APPLICATIONS OF FUNDS AND CAPITALIZATION
(Millions of Dollars)
Actual Estimated
------------- ------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
Beginning STD/
(Temporary Investment) .5 .6 (.3) 0 (.1)
Sources of Funds
----------------
Internal Funds* 4.3 5.3 4.5 4.5 4.5
External Funds:
Long-Term Debt - - - - -
Common Equity (.4) (.4) (.8) (.4) (.4)
----- ----- ----- ----- -----
Total External (.4) (.4) (.8) (.4) (.4)
----- ----- ----- ----- -----
Total Sources 3.9 4.9 3.7 4.1 4.1
Application of Funds
--------------------
Construction - - - - -
Retirement of Debt 4.0 4.0 4.0 4.0 4.0
----- ----- ----- ----- -----
Total Applications 4.0 4.0 4.0 4.0 4.0
Change in S.T. Debt/ ----- ----- ----- ----- -----
(Temporary Investment) .1 (.9) .3 (.1) (.1)
Ending S.T. Debt/
(Temporary Investment) .6 (.3) 0 (.1) (.2)
Short-Term Debt High Point 1.3 1.3 2.0 2.0 2.0
Capitalization @ 12/31
----------------------
Amount:
Long-Term Debt 39.4 35.4 31.4 27.4 23.4
Common Equity 4.7 4.3 3.5 3.1 2.7
----- ----- ----- ----- -----
Total 44.1 39.7 34.9 30.5 26.1
Ratio:
Long-Term Debt 89.3 89.2 90.0 89.8 89.7
Common Equity 10.7 10.8 10.0 10.2 10.3
----- ----- ----- ----- -----
100.0% 100.0% 100.0% 100.0% 100.0%
*Net of changes in working capital and other balance sheet items.
Financial Statement 3(e)
NEW ENGLAND POWER COMPANY
SOURCES AND APPLICATIONS OF FUNDS AND CAPITALIZATION
(Millions of Dollars)
Actual Estimated
------------- ------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
Beginning STD/
(Temporary Investment) 18 51 146 147 125
Sources of Funds
----------------
Internal Funds* 149 106 109 147 128
External Funds:
Long-Term Debt 224 28 60 - -
Preferred Stock - - - - -
Common Equity - - - - -
----- ----- ----- ----- -----
Total External 224 28 60 0 0
----- ----- ----- ----- -----
Total Sources 373 134 169 147 128
Application of Funds
--------------------
Construction 157 229 160 115 80
Retirement of Debt 224 - 10 10 3
Redemption of Preferred
Stock 25 - - - -
----- ----- ----- ----- -----
Total Applications 406 229 170 125 83
Change in S.T. Debt/ ----- ----- ----- ----- -----
(Temporary Investment) 33 95 1 (22) (45)
Ending S.T. Debt/
(Temporary Investment) 51 146 147 125 80
Short-Term Debt High Point 85 146 206 175 112
Short-Term Debt High Point
(without financing) - - 266 235 172
Capitalization @ 12/31
----------------------
Amount:
Long-Term Debt 670 698 748 738 735
Preferred Stock 61 61 61 61 61
Common Equity 850 877 907 907 907
----- ----- ----- ----- -----
Total 1,581 1,636 1,716 1,706 1,703
Ratio:
Long-Term Debt 42.4 42.7 43.6 43.3 43.2
Preferred Stock 3.8 3.7 3.6 3.6 3.6
Common Equity 53.8 53.6 52.8 53.1 53.2
----- ----- ----- ----- -----
100.0% 100.0% 100.0% 100.0% 100.0%
*Net of changes in working capital and other balance sheet items.
Financial Statement 3(f)
NEW ENGLAND HYDRO-TRANSMISSION ELECTRIC COMPANY
SOURCES AND APPLICATIONS OF FUNDS AND CAPITALIZATION
(Millions of Dollars)
Actual Estimated
------------- ------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
Beginning STD/
(Temporary Investment) (10) (14) (4) (1) (1)
Sources of Funds
----------------
Internal Funds* 12 9 4 7 8
External Funds:
Long-Term Debt - - - - -
Common Equity - - - - -
----- ----- ----- ----- -----
Total External - - - - -
----- ----- ----- ----- -----
Total Sources 12 9 4 7 8
Application of Funds
--------------------
Construction 1 12 - - -
Retirement of Debt 7 7 7 7 7
Return of Capital - - - - 1
----- ----- ----- ----- -----
Total Applications 8 19 7 7 8
Change in S.T. Debt/ ----- ----- ----- ----- -----
(Temporary Investment) (4) 10 3 0 0
Ending S.T. Debt/
(Temporary Investment) (14) (4) (1) (1) (1)
Short-Term Debt High Point 0 11 2.0 2.0 2.0
Capitalization @ 12/31
----------------------
Amount:
Long-Term Debt 112 105 98 91 84
Common Equity 70 67 64 59 55
----- ----- ----- ----- -----
Total 182 172 162 150 139
Ratio:
Long-Term Debt 61.5 61.0 60.5 60.7 60.4
Common Equity 38.5 39.0 39.5 39.3 39.6
----- ----- ----- ----- -----
100.0% 100.0% 100.0% 100.0% 100.0%
*Net of changes in working capital and other balance sheet items.
Financial Statement 3(g)
NEW ENGLAND HYDRO-TRANSMISSION CORPORATION
SOURCES AND APPLICATIONS OF FUNDS AND CAPITALIZATION
(Millions of Dollars)
Actual Estimated
------------- ------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
Beginning STD/
(Temporary Investment) (2) (2) 1 0 (2)
Sources of Funds
----------------
Internal Funds* 5 8 6 9 8
External Funds:
Long-Term Debt - - - - -
Common Equity - - - - -
----- ----- ----- ----- -----
Total External - - - - -
----- ----- ----- ----- -----
Total Sources 5 8 6 9 8
Application of Funds
--------------------
Construction - 6 - - -
Retirement of Debt 5 5 5 4 5
Return of Capital - - - 3 3
----- ----- ----- ----- -----
Total Applications 5 11 5 7 8
Change in S.T. Debt/ ----- ----- ----- ----- -----
(Temporary Investment) 0 3 (1) (2) 0
Ending S.T. Debt/
(Temporary Investment) (2) 1 0 (2) (2)
Short-Term Debt High Point 1 1 2 2 2
Capitalization @ 12/31
----------------------
Amount:
Long-Term Debt 70 65 60 56 51
Common Equity 42 43 41 38 35
----- ----- ----- ----- -----
Total 112 108 101 94 86
Ratio:
Long-Term Debt 62.5 60.2 59.4 59.6 59.3
Common Equity 37.5 39.8 40.6 40.4 40.7
----- ----- ----- ----- -----
100.0% 100.0% 100.0% 100.0% 100.0%
*Net of changes in working capital and other balance sheet items.
Financial Statement 3(h)
NEW ENGLAND POWER SERVICE COMPANY
SOURCES AND APPLICATIONS OF FUNDS AND CAPITALIZATION
(Millions of Dollars)
Actual Estimated
------------- ------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
Beginning STD/
(Temporary Investment) (5) (12) 5 0 0
Sources of Funds
----------------
Cash from Billings 198.3 220.6 246.0 242.0 254.0
Common Equity - - 15.0 - -
Application of Funds
--------------------
Payment of Expenses
and Salaries 191.3 237.6 256 242 254
Change in S.T. Debt/ ----- ----- ----- ----- -----
(Temporary Investment) (7) 17 (5) - -
Ending S.T. Debt/
(Temporary Investment) (12) 5 - - -
Short-Term Debt High Point 12 11 20 20 20
Capitalization @ 12/31
----------------------
Common Equity 1.3 1.3 16.3 16.3 16.3
EX-27
7
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
UT
1,000
DEC-31-1995
JUN-30-1995
12-MOS
PER-BOOK
0
1,580,139
46,861
2,241
0
1,629,241
64,969
736,567
784,549
1,586,085
0
0
0
0
0
0
0
0
0
0
43,156
1,629,241
0
342
3,229
3,571
(3,571)
181,557
177,986
224
177,762
0
177,762
150,405
0
171,912
0
0
UT