-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NkPe88RXnrXVjW4L8cuWFerX0D2F3jCcsf9FHHFzK/v/s9/hZYUD6r21wmEQb647 YKSRUnWPLOC+FcLgNJnZwg== 0000071297-97-000059.txt : 19970912 0000071297-97-000059.hdr.sgml : 19970911 ACCESSION NUMBER: 0000071297-97-000059 CONFORMED SUBMISSION TYPE: U-9C-3 PUBLIC DOCUMENT COUNT: 20 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970828 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-9C-3 SEC ACT: SEC FILE NUMBER: 074-00009 FILM NUMBER: 97671493 BUSINESS ADDRESS: STREET 1: 25 RESEARCH DR CITY: WESTBOROUGH STATE: MA ZIP: 01581 BUSINESS PHONE: 5083669011 U-9C-3 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM U-9C-3 QUARTERLY REPORT PURSUANT TO RULE 58 FOR THE QUARTER ENDED JUNE 30, 1997 NEW ENGLAND ELECTRIC SYSTEM 25 Research Drive, Westborough, MA 01582
NEW ENGLAND ELECTRIC SYSTEM For The Quarter Ended June 30, 1997 ITEM 1 - ORGANIZATION CHART Percentage Energy or State of voting Name of Reporting Gas-Related Date of of Securities Company Company Organization Organization Held Nature of Business - ----------------- ----------- ------------ ------------ ----------- -------------------------------------- New England Energy, Energy 11/20/72 MA 100 New England Energy, Inc. is engaged Inc./New England in various activities relating to fuel Electric System supply for the System. These activities primarily include participation (principally through a partnership with a nonaffiliated oil company) in domestic oil and gas exploration, development, and production and the sale to NEP of fuel purchased in the open market. Granite State Energy, Energy 04/22/96 NH 100 Granite State Energy provides a range Inc./New England of energy and related services, Electric System including but not limited to sales of electric energy, audits, power quality, fuel supply, repair, maintenance, construction, design, engineering, and consulting. AllEnergy Marketing Energy 09/18/96 MA 50 AllEnergy's principal purpose is to sell Co., L.L.C./NEES energy and provide a range of energy- Energy, Inc./New related services, including but not England Electric limited to, marketing, brokering and System sales of energy, audits, fuel supply, repair, maintenance, construction, operation, design, engineering, and consulting, to customers in the competitive market in New England and New York. Texas Liquids, Energy 12/19/96 MA 44.5 Texas Liquids, L.L.C. engages in L.L.C./All Energy purchasing, marketing, selling, Marketing Co., L.L.C./ and distributing energy NEES Energy, Inc./ commodities and related products New England Electric and services. System
NEW ENGLAND ELECTRIC SYSTEM For The Quarter Ended June 30, 1997 Item 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS (expressed in millions, rounded to hundred thousands of dollars) Type of Principal Issue Cost Person to Collateral Consideration Security Amount of or of Whom Security Given with Received for Company Issuing Security Issued Security Renewal Capital Was Issued Security Each Security - ------------------------ -------- --------- ------- ------- -------------- ----------- ------------- N/A
NEW ENGLAND ELECTRIC SYSTEM For The Quarter Ended June 30, 1997 (cont'd.) Item 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS (expressed in millions, rounded to hundred thousands of dollars) Company Company Amount of Contributing Receiving Capital Capital Capital Contribution ------------ --------- ------------ NEES Trust Granite State Energy * NEES Energy, Inc. AllEnergy Marketing Co., LLC 2.0 * Amounts are less than $100,000
NEW ENGLAND ELECTRIC SYSTEM For The Quarter Ended June 30, 1997 Item 3 - ASSOCIATE TRANSACTIONS (expressed in millions, rounded to hundred thousands of dollars) Part I - Transactions performed by reporting companies on behalf of associate companies Direct Indirect Total Reporting Company Associate Company Types of Services Costs Costs Cost of Amount Rendering Services Receiving Services Rendered Charged Charged Capital Billed ------------------ ------------------ ----------------- ------- ------- ------- ------ New England Energy, Inc. New England Power Co. Miscellaneous (1) (1) (1) Part II - Transactions performed by associate companies on behalf of reporting companies Direct Indirect Total Associate Company Reporting Company Types of Services Costs Costs Cost of Amount Rendering Services Receiving Services Rendered Charged Charged Capital Billed ------------------ ------------------ ----------------- ------- ------- ------- ------ Massachusetts Electric Granite State Energy, Miscellaneous (4) (1) (1) (1) Company Inc. New England Power Co. New England Energy, Inc. Miscellaneous (1) (1) (1) New England Power Co. New England Energy, Inc. Fuel Purchase $11.8 $11.8 New England Power Co. AllEnergy Marketing Power purchase (1) (1) (1) Co., LLC New England Power Co. Granite State Energy, Power purchase (1) (1) (1) Inc. New England Power New England Energy, Inc. Info Services 0.1 (1) $0.1 Service Co. New England Power New England Energy, Inc. Miscellaneous (2) $0.1 $0.1 Service Co. New England Power Granite State Energy, Miscellaneous (3) (1) (1) (1) Service Co. Inc. New England Power AllEnergy Marketing Sales Planning $0.1 $0.1 Service Co. Co., LLC New England Power AllEnergy Marketing Service Co. Co., LLC Miscellaneous $0.1 $0.1 (1) Amounts are below $100,000 (2) Represents 10 types of services with each type of service totaling less than $100,000. (3) Represents 15 types of services with each type of service totaling less than $100,000. (4) The customer service portion of the service agreement between Granite State Energy Company and New England Power Service Company has been assigned to Massachusetts Electric Company, in accordance with its terms.
NEW ENGLAND ELECTRIC SYSTEM For The Quarter ended June 30, 1997 ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT (expressed in millions rounded to hundred thousands of dollars) Investment in energy-related companies: Total consolidated capitalization as of June 30, 1997 (1) $3,636.5 line 1 Total capitalization multiplied by 15 percent 545.5 line 2 (line 1 multiplied by 0.15) Greater of $50 million or line 2 545.5 line 3 Total current aggregate investment: (categorized by major line of energy- related business) Power marketing and other 2.0 ------- Total current aggregate investment 2.0 line 4 --- Difference between the greater of $50 million or 15 percent of capitalization and the total aggregate investment of the registered holding company system (lines 3 less line 4) $543.5 line 5 (1) Consolidated capitalization includes total common equity, cumulative preferred stock, long-term debt (including long-term debt due within one year), and short-term debt.
NEW ENGLAND ELECTRIC SYSTEM For The Quarter Ended June 30, 1997 ITEM 5 - OTHER INVESTMENTS Reason for Major Line Other Other Difference or Energy-Related Investment in Investment in Other Business Last U-9C-3 Report in U-9C-3 Report Investment - ----------------- ------------------ ---------------- ---------- N/A NEW ENGLAND ELECTRIC SYSTEM For The Quarter Ended June 30, 1997 ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS (A) Exhibits 10(a) Service Contract between New England Power Service Company and New England Energy Incorporated dated December 31, 1996 10(b)(i) Service Contract between New England Power Service Company and Granite State Energy, Inc. dated December 31, 1996 10(b)(ii) Service Agreement between New England Power Service Company and Granite State Energy, Inc. dated July 1, 1996 10(b)(iii) Confidential Information Non-Disclosure Agreement between New England Power Company and Granite State Energy, Inc. dated May 21, 1996 10(b)(iv) Confirmation Letter between New England Power Company and Granite State Energy, Inc. dated May 21, 1996 10(b)(v) Confirmation Letter between New England Power Company and Granite State Energy, Inc. dated July 11, 1996 10(c) Confirmation Letter between New England Power Company and NEES Energy, Inc. dated August 5, 1996 10(d)(i) Service Agreement by and between New England Power Service Company and AllEnergy Marketing Company, LLC dated January 1, 1997 10(d)(ii) Capital and Liquidity Support Agreement among Eastern Enterprises, AllEnergy Marketing Company, Inc., New England Electric System, NEES Energy, Inc., and AllEnergy Marketing Company, LLC dated May 27, 1997 10(d)(iii) Service Contract between New England Power Service Company and AllEnergy Marketing Company, LLC. dated December 31, 1996 10(e) New England Power Company and New England Energy Incorporated Fuel Purchase Contract dated July 26, 1979 and Amendment dated August 26, 1981 (Exhibit 10(f)(iii) to NEES' 1981 Form 10-K, File No. 1-3446); Amendment dated March 26, 1985, and Amendment effective January 1, 1984 (Exhibit 10(e)(iii) to NEES' 1985 Form 10-K, File No. 1-3446); Amendment dated as of April 28, 1989 (Exhibit 10(e)(iii) to NEES' 1989 Form 10-K, File No. 1-3446.) A certificate stating that a copy of the report for the previous quarter has been filed with interested state commissions is not being provided with this filing. This requirement is not applicable for the current quarter's report since this is the first ever filing of this report by New England Electric System. (B) Financial Statements 1-A New England Electric System Consolidated Income Statement for the quarter and six months ended June 30, 1997 1-B New England Electric System Consolidated Balance Sheet As of June 30, 1997 2-A New England Energy, Inc. Income Statement for the quarter and six months ended June 30, 1997 2-B New England Energy, Inc. Balance Sheet as of June 30, 1997 3-A Granite State Energy, Inc. Income Statement for the quarter and six months ended June 30, 1997 3-B Granite State Energy, Inc. Balance Sheet as of June 30, 1997 4-A AllEnergy Marketing Company, LLC Consolidated Income Statement for the quarter and six months ended June 30, 1997 4-B AllEnergy Marketing Company, LLC Consolidated Balance Sheet as of June 30, 1997 SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned company has duly caused this report to be signed on its behalf by the undersigned officer thereunto duly authorized. NEW ENGLAND ELECTRIC SYSTEM s/Michael E. Jesanis _______________________________ Michael E. Jesanis, Treasurer August 28, 1997 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 ---------- ------------------------------------ -------------- 10(a) Service Contract between New Filed Herewith England Power Service Company and New England Energy Incorporated dated December 31, 1996 10(b)(i) Service Contract between New England Filed Herewith Power Service Company and Granite State Energy, Inc. dated December 31, 1996 10(b)(ii) Service Agreement between New England Filed Herewith Power Service Company and Granite State Energy, Inc. dated July 1, 1996 10(b)(iii) Confidential Information Non-Disclosure Filed Herewith Agreement between New England Power Company and Granite State Energy, Inc. dated May 21, 1996 10(b)(iv) Confirmation Letter between New England Filed Herewith Power Company and Granite State Energy, Inc. dated May 21, 1996 10(b)(v) Confirmation Letter between New England Filed Herewith Power Company and Granite State Energy, Inc. dated July 11, 1996 10(c) Confirmation Letter between New England Filed Herewith Power Company and NEES Energy, Inc. dated August 5, 1996 10(d)(i) Service Agreement by and between New Filed Herewith England Power Service Company and AllEnergy Marketing Company, LLC dated January 1, 1997 10(d)(ii) Capital and Liquidity Support Agreement Filed Herewith among Eastern Enterprises, AllEnergy Marketing Company, Inc., New England Electric System, NEES Energy, Inc., and AllEnergy Marketing Company, LLC dated May 29, 1997 10(d)(iii) Service Contract between New England Filed Herewith Power Service Company and AllEnergy Marketing Company, LLC. dated December 31, 1996 10(e) New England Power Company and New Incorporated England Energy Incorporated Fuel by Reference Purchase Contract dated July 26, 1979 and Amendments thereto Financial Statement No. Description Page --------- ------------------------------------- -------------- 1-A New England Electric System Filed Herewith Consolidated Income Statement for the quarter and six months ended June 30, 1997 1-B New England Electric System Filed Herewith Consolidated Balance Sheet As of June 30, 1997 2-A New England Energy, Inc. Income Filed Herewith Statement for the quarter and six months ended June 30, 1997 2-B New England Energy, Inc. Balance Filed Herewith Sheet as of June 30, 1997 3-A Granite State Energy, Inc. Income Filed Herewith Statement for the quarter and six months ended June 30, 1997 3-B Granite State Energy, Inc. Balance Filed Herewith Sheet as of June 30, 1997 4-A AllEnergy Marketing Company, LLC Filed Herewith Consolidated Income Statement for the quarter and six months ended June 30, 1997 4-B AllEnergy Marketing Company, LLC Filed Herewith Consolidated Balance Sheet as of June 30, 1997 EX-10 3 EXHIBIT 10(A) Exhibit 10(a) NEW ENGLAND POWER SERVICE COMPANY 25 Research Drive Westborough, Massachusetts 01582 SERVICE CONTRACT December 31, 1996 New England Energy Incorporated 25 Research Drive Westborough, MA 01582 New England Power Service Company (hereinafter called Service Company) is a company engaged primarily in the rendering of services to companies in the New England Electric System holding-company system. The organization, conduct of business and method of cost allocation of the Service Company are designed to meet the requirements of Section 13 under the Public Utility Holding Company Act of 1935 and the rules and regulations promulgated thereunder to the end that services performed by the Service Company for said associate companies will be rendered to them at cost, fairly and equitably allocated. Services will be rendered by Service Company only upon receipt from time to time of specific or general request therefor. Said requests may always be modified or cancelled by you at your discretion. The parties hereto agree as follows: 1. The Service Company agrees to furnish you upon the terms and conditions herein set forth such of the services described in Schedule 1 hereto as you may from time to time request. Service Company will also furnish, if available, such services not described in Schedule 1 as you may request. Notwithstanding the foregoing the Service Company shall not furnish under this agreement any engineering, construction, or maintenance services for a nuclear generating plant. 2. The Service Company has and will maintain a staff trained and experienced in the engineering, construction, operation, maintenance and management of public utility properties. In addition to the services of its own staff, Service Company will, after consultation with you concerning services to be rendered pursuant to your request, arrange for services of non-affiliated experts, consultants, accountants and attorneys. 3. All of the services rendered under this agreement will be at actual cost thereof. Direct charges will be made for services where a direct allocation of cost is possible. The methods of determining such costs and the allocation thereof are set forth in Schedule II hereto. These methods are reviewed annually and more frequently, if appropriate. Such methods may be modified or changed by Service Company without the necessity of an amendment of this agreement provided that in each instance all services rendered hereunder will be at actual cost thereof, fairly and equitably allocated, and all in accordance with the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations and orders thereunder. You will be advised from time to time of any material changes in such methods. -2- 4. Bills will be rendered during the first week of each month covering amounts due for the month calculated on an estimated basis using the actual expenses incurred during the previous month. This estimated amount would be adjusted on the bill to be rendered during the first week of the following month. Any amount remaining unpaid after fifteen days following receipt of the bill shall bear interest thereon from the date of the bill at an annual rate of 2% above the lowest interest rate then being charged by the First National Bank of Boston on 90 day commercial loans. Services will be performed hereunder for not more than one year commencing January 1, 1997, and continuing through December 31, 1997, unless terminated at an earlier date by either party giving thirty days' written notice to the other of such termination at the end of any month. 5. This agreement will be subject to termination or modification at any time to the extent its performance may conflict with any federal or state law or any rule, regulation or order of a federal or state regulatory body having jurisdiction. The agreement shall be subject to approval of any federal or state regulatory body whose approval is a legal prerequisite to its execution and delivery or performance. NEW ENGLAND POWER SERVICE COMPANY s/Michael E. Jesanis By: Treasurer Accepted , 19 New England Energy Incorporated By s/Alfred D. Houston SCHEDULE I Description of Services Available from New England Power Service Company Accounting: The keeping of accounts and collateral activities, including billing, payroll and customer relations; preparation of reports and preservation of records. Auditing: Periodic audits by Service Company auditors and the furnishing of reports and recommendations. Construction: Labor and equipment for construction and maintenance of electric properties. Assistance in obtaining and supervision of, non-affiliated contractors. Corporate and Corporate Records: Cooperation with attorneys, officers and special counsel of associate companies on corporate matters, financing, regulation, contracts, claims and litigation. Services in connection with stockholders' and directors' meetings and keeping of corporate records. Customers Services: Services re policy development and functional direction of field business service departments, including rate application and training, plus specialized residential, commercial and industrial services. Emergencies: Assistance in emergency maintenance and restoration of utility service and in mobilization of personnel and equipment. Employee Relations: Service re labor relations, personnel, wage and salary schedules, employee training and safety and medical programs. Engineering: Civil, mechanical, electrical, and other engineering services; technical advice, design, installation, supervision, planning, research, testing, operation of communications, including microwave, and operation and maintenance of specialized technical equipment. Executive and Administrative: Consultation and services in management and administration of all aspects of electric utility business. Information Systems: Maintenance and operation of information systems and equipment for accounting, engineering, administration and other functions. Insurance: Development, placement and administration of insurance coverages and employee benefit programs, including group insurance and retirement annuities; property inspections and valuations for insurance. Intellectual Property: Filing applications, owning, licensing, and holding licenses for copyrights, patents, servicemarks, and trademarks for associated companies. Properties: Services re acquisition and disposition of properties; cooperation with attorneys of associate companies in title examination and conveyancing; maintenance of property records; and making property inventories and valuations. Power Supply: Planning and other services for supply of electric power, and negotiation of contracts therefore. Public Information and Relations: Services re information to and relations with the public, including customers, security holders, employees, financial analysts, rating agencies and investment firms. Purchasing and Stores: Services re purchase and storing of materials, supplies and equipment. Rates: Review, design, interpretation, analysis and other services re rates and special contracts for sale of electricity. Regulation: Analysis of laws, rules and regulations and recommendations for action hereunder; handling of matters with regulatory and governmental authorities; preparation of applications and registrations. Systems: Establishing of accounting and other procedures and standards. Taxes: Service re federal, state and municipal taxes, preparation of returns and handling of audits and claims by taxing authorities. Treasury and Statistical: Services re financing of associate companies, both short and long-term, determination of capital needs, and preparation of financial and statistical reports. SCHEDULE II Determination of Cost of Service and Allocation Thereof Cost of service will be determined in accordance with the Public Utility Holding Company Act of 1935 and the rules and regulations and orders thereunder, and will include all costs of doing business incurred by the Service Company. Records will be maintained for each Department and Division of the Service Company in order to accumulate all costs of doing business and to determine the cost of service. These costs will include wages and salaries of employees and related expenses such as insurance, taxes, pensions and other employee welfare expenses, and rent, light, heat, telephone, supplies, and other housekeeping costs. In addition, records will be maintained of general administrative expenses, which will include the costs of operating the Service Company as a corporate entity. Charges for services rendered and related expenses and non- personal expenses (e.g., use of automotive equipment, etc.) will be billed directly to the serviced companies, either individually or, when the services performed are for a group for a group of companies, by means of an equitable allocation formula. Each formula will have an appropriate basis such as customers, meters, employees, plant investments, inventories or operating revenues. Charges for services will be determined from the time sheets of employees and will be computed on the basis of each employee's hourly rate plus a percentage factor to cover related expenses and general administrative expenses. Records of such related expenses and general administrative expenses will be maintained and subjected to periodic review. Out-of-pocket expenses which are incurred for the serviced companies will be billed at cost. Charges for non-personal expenses, such as for use of automobiles, trucks and heavy equipment, will normally be computed on the basis of costs per hour or per mile. EX-10 4 EXHIBIT 10(B)(I) Exhibit 10(b)(i) NEW ENGLAND POWER SERVICE COMPANY 25 Research Drive Westborough, Massachusetts 01582 SERVICE CONTRACT December 31, 1996 Granite State Energy, Inc. 4 Park Street Concord, NH 03302 New England Power Service Company (hereinafter called Service Company) is a company engaged primarily in the rendering of services to companies in the New England Electric System holding-company system. The organization, conduct of business and method of cost allocation of the Service Company are designed to meet the requirements of Section 13 under the Public Utility Holding Company Act of 1935 and the rules and regulations promulgated thereunder to the end that services performed by the Service Company for said associate companies will be rendered to them at cost, fairly and equitably allocated. Services will be rendered by Service Company only upon receipt from time to time of specific or general request therefor. Said requests may always be modified or cancelled by you at your discretion. The parties hereto agree as follows: 1. The Service Company agrees to furnish you upon the terms and conditions herein set forth such of the services described in Schedule 1 hereto as you may from time to time request. Service Company will also furnish, if available, such services not described in Schedule 1 as you may request. Notwithstanding the foregoing the Service Company shall not furnish under this agreement any engineering, construction, or maintenance services for a nuclear generating plant. 2. The Service Company has and will maintain a staff trained and experienced in the engineering, construction, operation, maintenance and management of public utility properties. In addition to the services of its own staff, Service Company will, after consultation with you concerning services to be rendered pursuant to your request, arrange for services of non-affiliated experts, consultants, accountants and attorneys. 3. All of the services rendered under this agreement will be at actual cost thereof. Direct charges will be made for services where a direct allocation of cost is possible. The methods of determining such costs and the allocation thereof are set forth in Schedule II hereto. These methods are reviewed annually and more frequently, if appropriate. Such methods may be modified or changed by Service Company without the necessity of an amendment of this agreement provided that in each instance all services rendered hereunder will be at actual cost thereof, fairly and equitably allocated, and all in accordance with the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations and orders thereunder. You will be advised from time to time of any material changes in such methods. -2- 4. Bills will be rendered during the first week of each month covering amounts due for the month calculated on an estimated basis using the actual expenses incurred during the previous month. This estimated amount would be adjusted on the bill to be rendered during the first week of the following month. Any amount remaining unpaid after fifteen days following receipt of the bill shall bear interest thereon from the date of the bill at an annual rate of 2% above the lowest interest rate then being charged by the First National Bank of Boston on 90 day commercial loans. Services will be performed hereunder for not more than one year commencing January 1, 1997, and continuing through December 31, 1997, unless terminated at an earlier date by either party giving thirty days' written notice to the other of such termination at the end of any month. 5. This agreement will be subject to termination or modification at any time to the extent its performance may conflict with any federal or state law or any rule, regulation or order of a federal or state regulatory body having jurisdiction. The agreement shall be subject to approval of any federal or state regulatory body whose approval is a legal prerequisite to its execution and delivery or performance. NEW ENGLAND POWER SERVICE COMPANY s/Michael E. Jesanis By: Treasurer Accepted 1/7/97 By: s/John H. Dickson SCHEDULE I Description of Services Available from New England Power Service Company Accounting: The keeping of accounts and collateral activities, including billing, payroll and customer relations; preparation of reports and preservation of records. Auditing: Periodic audits by Service Company auditors and the furnishing of reports and recommendations. Construction: Labor and equipment for construction and maintenance of electric properties. Assistance in obtaining and supervision of, non-affiliated contractors. Corporate and Corporate Records: Cooperation with attorneys, officers and special counsel of associate companies on corporate matters, financing, regulation, contracts, claims and litigation. Services in connection with stockholders' and directors' meetings and keeping of corporate records. Customers Services: Services re policy development and functional direction of field business service departments, including rate application and training, plus specialized residential, commercial and industrial services. Emergencies: Assistance in emergency maintenance and restoration of utility service and in mobilization of personnel and equipment. Employee Relations: Service re labor relations, personnel, wage and salary schedules, employee training and safety and medical programs. Engineering: Civil, mechanical, electrical, and other engineering services; technical advice, design, installation, supervision, planning, research, testing, operation of communications, including microwave, and operation and maintenance of specialized technical equipment. Executive and Administrative: Consultation and services in management and administration of all aspects of electric utility business. Information Systems: Maintenance and operation of information systems and equipment for accounting, engineering, administration and other functions. Insurance: Development, placement and administration of insurance coverages and employee benefit programs, including group insurance and retirement annuities; property inspections and valuations for insurance. Intellectual Property: Filing applications, owning, licensing, and holding licenses for copyrights, patents, servicemarks, and trademarks for associated companies. Properties: Services re acquisition and disposition of properties; cooperation with attorneys of associate companies in title examination and conveyancing; maintenance of property records; and making property inventories and valuations. Power Supply: Planning and other services for supply of electric power, and negotiation of contracts therefore. Public Information and Relations: Services re information to and relations with the public, including customers, security holders, employees, financial analysts, rating agencies and investment firms. Purchasing and Stores: Services re purchase and storing of materials, supplies and equipment. Rates: Review, design, interpretation, analysis and other services re rates and special contracts for sale of electricity. Regulation: Analysis of laws, rules and regulations and recommendations for action hereunder; handling of matters with regulatory and governmental authorities; preparation of applications and registrations. Systems: Establishing of accounting and other procedures and standards. Taxes: Service re federal, state and municipal taxes, preparation of returns and handling of audits and claims by taxing authorities. Treasury and Statistical: Services re financing of associate companies, both short and long-term, determination of capital needs, and preparation of financial and statistical reports. SCHEDULE II Determination of Cost of Service and Allocation Thereof Cost of service will be determined in accordance with the Public Utility Holding Company Act of 1935 and the rules and regulations and orders thereunder, and will include all costs of doing business incurred by the Service Company. Records will be maintained for each Department and Division of the Service Company in order to accumulate all costs of doing business and to determine the cost of service. These costs will include wages and salaries of employees and related expenses such as insurance, taxes, pensions and other employee welfare expenses, and rent, light, heat, telephone, supplies, and other housekeeping costs. In addition, records will be maintained of general administrative expenses, which will include the costs of operating the Service Company as a corporate entity. Charges for services rendered and related expenses and non- personal expenses (e.g., use of automotive equipment, etc.) will be billed directly to the serviced companies, either individually or, when the services performed are for a group for a group of companies, by means of an equitable allocation formula. Each formula will have an appropriate basis such as customers, meters, employees, plant investments, inventories or operating revenues. Charges for services will be determined from the time sheets of employees and will be computed on the basis of each employee's hourly rate plus a percentage factor to cover related expenses and general administrative expenses. Records of such related expenses and general administrative expenses will be maintained and subjected to periodic review. Out-of-pocket expenses which are incurred for the serviced companies will be billed at cost. Charges for non-personal expenses, such as for use of automobiles, trucks and heavy equipment, will normally be computed on the basis of costs per hour or per mile. EX-10 5 EXHIBIT 10(B)(II) Exhibit 10(b)(ii) SERVICE AGREEMENT BY AND BETWEEN NEW ENGLAND POWER SERVICE COMPANY AND Granite State Energy -------------------- This Agreement is made and entered into as of the 1st day of July, 1996 (this "Agreement") by and between Granite State Energy, Inc. ("Client" or "GSEnergy") having offices at 25 Research Drive Westborough, Massachusetts and NEW ENGLAND POWER SERVICE COMPANY ("NEPSCo") having offices at 25 Research Drive Westborough, Massachusetts. Section 1: Description of Services NEPSCo will provide Client with billing related services described in Exhibit A and certain customer services (the "Services"). The descriptions of the Services to be provided the client are incorporated (Exhibit A) herein and made a part hereof. Section 2: Extent of Agreement NEPSCo shall exercise all reasonable skill, care and diligence in carrying out the Services, shall carry out its duties in accordance with recognized professional standards and shall provide everything reasonably necessary to complete the Services in accordance with the requirements of this Agreement. Section 3: Term This Agreement shall be in effect as of the date hereof and through the final billing cycle for each Customer (as defined in Exhibit A) following termination of the NH Pilot (as defined in Exhibit A), unless earlier terminated by the parties as provided herein. Either party may terminate this Agreement by providing 90 days written notice. Notwithstanding anything to the contrary herein, the obligation to pay the other party money due under this Agreement shall survive expiration and termination of this Agreement. Further, the obligations of the parties in this Agreement shall remain in effect to the extent necessary to comply herewith. Section 4: Payment Terms Payment terms are set forth in Exhibit B, attached hereto and made a part hereof. 2 Section 5: Limitation of Liability In no event shall either party be liable to the other party or to any other third party for any indirect, reliance, multiple, incidental, special, consequential, or punitive damages connected with or arising out of the Agreement, including, but not limited to, from NEPSCo's performance of any Services hereunder, whether or not either party was advised of the possibility of such damages. In no event shall NEPSCo be liable in contract, tort, NHRSA 358-A, or otherwise (including negligence, warranty, or strict liability) for amounts in excess of the total of all amounts earned by NEPSCo in connection with this Agreement, whether or not NEPSCo was advised of the possibility of such damages. Section 6: Warranties NEPSCo and its affiliates, successors and assigns make no WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE with respect to the Services. Section 7: Indemnification To the fullest extent permitted by law, Client shall indemnify and hold harmless, and at NEPSCo's option, defend NEPSCo and its affiliates, and their officers, directors, employees, agents, servants, and assigns (collectively, "NEPSCO Parties") from and against any and all claims and/or liability for losses, expenses, damage to property, injury to or death of any person, including, but not limited to, Client's employees, NEPSCo's and its affiliates' employees, subcontractors and subcontractors' employees, or any other liability incurred by NEPSCo or its affiliates, including expenses, legal or otherwise, caused wholly or in part by any act or omission, negligent or otherwise of Client, its officers, directors, employees, agents, servants, or assigns arising out of this Agreement, except to the extent caused by any act or omission, negligent or otherwise, of the NEPSCo Parties. Section 8: Assignment and Subcontracting NEPSCo shall not assign or subcontract the Services or any part thereof without Client's written consent, which Client shall not unreasonably withhold. Section 9: Independent Contractor NEPSCo is, and shall at all times remain, an independent contractor. Section 10: Entire Agreement This Agreement constitutes the entire Agreement between the parties with respect to the Services and all previous representations, either written or oral, are hereby annulled and 3 superseded. No modification of any of the provisions of this Agreement shall be binding unless agreed to in writing and signed by a duly authorized representative of each party hereto. Section 11: No Third Party Beneficiaries The work performed by NEPSCo under this Agreement is for Client's use and benefit only, and not for the use and benefit of any other person, party, or entity. Any use of or reliance upon the work product provided under or in connection with this Agreement by any party other than Client shall be at the sole risk of such party. NEPSCo shall have no liability under contract, third party beneficiary theory, tort, strict liability, or otherwise for any third party's use or reliance upon work performed pursuant to this Agreement. Section 12: Confidentiality NEPSCo agrees to take reasonable measures to hold in confidence all pricing related information provided and specifically designated by Client as Confidential Information, other than that of a clearly public nature or that which Client has acquired from other sources, and except as otherwise required to be disclosed by law, regulation or judicial or administrative order. Section 13: Force Majeure NEPSCo shall not be considered in default under this Agreement or responsible in tort, strict liability, contract or other legal theory to Client for damages of any description for any interruption or failure of service or deficiency in the quality or quantity of service, or any other failure to perform if such failure is caused by factors beyond NEPSCo's reasonable control, including without limitation, storm, flood, lightning, earthquake, fire, explosion, equipment failure, civil disturbance, labor dispute, act of God or the public enemy, action of a court or public authority, scheduled or unscheduled withdrawal of facilities from operation for maintenance or repair, or any other cause beyond the reasonable control of NEPSCo; provided, however, that NEPSCo shall use reasonable efforts to remedy or correct any such failure or interruption as soon as reasonably possible. Section 14: Amendments, Modifications and Assignments Except as provided in Section 8 above, this Agreement may not be assigned, amended, modified, superseded, or waived, in whole or in part, except by a written instrument signed by authorized representatives of each of the parties hereto. A waiver in one or more instances of any rights under this Agreement shall not constitute a waiver of such rights for other or future instances. 4 Section 15: Enforceability Should any portion of this Agreement be judicially declared invalid, unenforceable, or void, such decision shall not have the effect of invalidating or voiding the remainder of this Agreement, and the parties hereto agree that the portion or portions of this Agreement so held to be invalid, unenforceable, or void shall be deemed to have been stricken and the remainder shall have the same force and effect as if said portions or portions had never been included herein. Section 16: Headings Headings are provided herein for the convenience of the parties and shall not be construed to explain or modify any part of this Agreement. Section 17: Notices Except as otherwise provided in this Agreement, any notices under this Agreement shall be in writing and shall be sufficient if delivered by (i) hand, (ii) U. S. Mail, first class postage pre-paid, or (iii) facsimile, with confirmation of receipt to the parties as follows: For NEW ENGLAND POWER SERVICE COMPANY: John G. Cochrane Vice President 25 Research Drive Westborough, Massachusetts 01582 Phone: (508) 389-2174 Facsimile: (508) 836-4560 For GSEnergy Arthur Pearson Marketing Manager 25 Research Drive Westborough, Massachusetts 01582 Phone: (508) 389-2122 Section 18: Applicable Law This Agreement shall be governed by, and construed in accordance with, the laws of the State of New Hampshire without regard to the principles of conflict of laws contained therein. 5 IN WITNESS WHEREOF, each party hereto has caused this Agreement to be executed by its duly authorized representative as of the day and the year first set forth above. GSEnergy By: s/John H. Dickson Title: President NEW ENGLAND POWER SERVICE COMPANY By: s/John G. Cochrane Title: Vice President EXHIBIT A SERVICES GSEnergy has requested that NEPSCo provide it with billing related services for retail customer sales within Granite State Electric Company's franchise territory under the New Hampshire Public Utilities Commission's ("Commission") Retail Competition Pilot Program ("NH Pilot"), which services will be provided consistent with the Commission's rules and orders under Docket No. 95-250. GSEnergy will supply the NEPSCo with rates to be implemented for designed customer classes. NEPSCo will utilize the supplied rates and usage information to calculate the supplier portion of customer bills, then integrate this billing option with Transmission, Distribution and Stranded Cost components (T/D/S) of Granite State Electric's bill in a single mailing to the customer. Billing services include a single price among all customers within a class on the following rate/pricing structure: Rate Class Structure Pricing Schedule - -------------------- ---------------- Residential Flat Energy Residential- Time of Use On/Off Peak Energy Residential- High Use (greater than 25 KWH year) Flat Energy Residential- Aggregated (GAC) Flat Energy Small C&I- Energy Only Flat Energy Small C&I- Demand Flat Energy & Demand Large C&I- Demand On/Off Peak Energy & Demand The initial establishment of rates will be at no additional cost provided there is only one per Rate Class Structure (e.g. one price option per rate structure). Requests to change the pricing on an existing Rate Class Structure or to add multiple rates within a structure must be submitted in writing at least five business days prior to the requested implementation date. Multiple pricing among customers within a Rate Class Structure will result in the additional charges set forth in Exhibit B. Definition of Billing Demand: - ---------------------------- Billing Demand shall be the greater of: 1) The greatest fifteen-minute peak usage occurring during the On-Peak hours period during the month as measured in kilowatts for each Account, or 2) 90% of the greatest fifteen-minute peak usage occurring during On-Peak hours period during the month as measured in kilovolt-amperes for each Account where kilowatt Demand exceeds 75 kilowatts, or 3) 80% of the greatest Billing Demand as so determined above during the preceding eleven months. Note: On-Peak denotes the hours of 8:00 am - 9:00 pm, Monday thru Friday, except holidays. Off-Peak periods are 9:00 pm - 8:00 am, Monday thru Friday and all day Saturdays, Sundays, and holidays. Holidays are New Years Day; Presidents Day; Memorial Day; Independence Day; New Hampshire Day; Columbus Day; Thanksgiving Day; and Christmas Day. Customer Payment: - ---------------- Upon receipt of payments by Granite State Electric Company ("GSEC") for customers purchasing electric energy from GSEnergy ("Customer"), NEPSCo will ensure that the portion of revenue attributable to sales of electric energy by GSEnergy is forwarded to GSEnergy, including, without limitation, GSEnergy's proportionate share of any Service Fees (as defined below) received by midnight of the business day following receipt of payment by GSEC, e.g., payments received on Monday will be forwarded to GSEnergy by midnight on Tuesday. Payments made to GSEnergy will be made in a lump sum representing all Customer revenue received on behalf of GSEnergy for a given day. These lump sum payments to GSEnergy will be made via an Automated Clearinghouse (ACM) transaction and credited to a pre-determined GSEnergy bank account. GSEnergy must provide NEPSCo with the name of the receiving Bank routing and transit number (ABA number) and Bank account number to facilitate this transfer. The GS Energy credited amount will be accompanied by an electronic file which provides a detailed payment summary for each individual Customer. If GSEnergy is credited with a customer payment under the immediate preceding paragraph hereof and the Customer's payment is not honored for any reason by the Customer's bank, then the amount credited to GSEnergy for such Customer's electric energy will be charged back to GSEnergy and included in the nightly transmission of customer payment records. Existing service fees ("Service Fees"), such as interest charges for unpaid balances, shall remain in effect and be assessed, as applicable, to each Customer account. The cash posting sequence for Customer payments is detailed below: Cash Posting: - ------------ The following cash posting sequence will be in effect upon receipt of a Customer's payment. A. Granite State Cash Posting: -------------------------- 1) Rental Arrears 2) Arrears 120 Days and Greater 3) Arrears, 90 Days 4) Arrears, 60 Days 5) Arrears, 30 Days 6) Rental Current 7) Net Current Balance 8) Miscellaneous Arrears 9) Miscellaneous Current 10) Charge off Transfer Balance Note: Following the Granite State Electric Cash posting sequence outlined above, remaining dollars will be credited to GSEnergy as follows: B. GSEnergy Cash Posting: --------------------- 1) Arrears 120 Days and Greater 2) Arrears, 90 Days 3) Arrears, 60 Days 4) Arrears, 30 Days 5) Net Current Balance Note: Following the GSEnergy cash posting sequence outlined above, any remaining dollars i.e credit balance, will be held and applied to the Granite State Electric net current balance. Collection of Final Billed Accounts: - ----------------------------------- If GSEnergy or a Customer terminates service for any reason, NEPSCO will issue a final bill to the Customer. If after 21 billing cycles a balance remains outstanding, we will issue a reminder bill and message to the Customer. This process will be repeated after 42 billing cycles if necessary. If after 63 billing cycles a Customer's balance remains unpaid, NEPSCo will remove this Customer from our billing records and forward to GSEnergy a hard copy report of any uncollected balance for further collection action if so desired. Collection Notices: - ------------------ NEPSCo has created three levels of collection bill messages to print on an GSEnergy customer's bill. NEPSCo will work with GSEnergy to modify the wording and dollar parameters used to generate a message on a customer's bill. Requests to amend any notice or dollar parameter used to generate such notices will result in additional charges in accordance with Exhibit B. Reporting: - --------- NEPSCo has the ability to develop customized reports outlining pertinent information such as: sales, cash receipts and aging of accounts receivables for all of GSEnergy's customers. Requests to create a customized report will result in additional charges in accordance with Exhibit B. Billing Adjustments: - ------------------- NEPSCo will make its Customer Service staff available to GSEnergy on a requested basis and at additional cost for the purpose of applying general adjustments to the GSEnergy portion of a customer's account. Charges for such services are set forth in Exhibit B. Customer Service: - ---------------- NEPSCo has the ability, knowledge and resources to provide optional Customer Services to GSEnergy. These services include but are not limited to, providing customer service representatives to answer phone calls from GSEnergy's customers. NEPSCo will provide GSEnergy with a unique 800 phone number printed on the supplier portion of your customer's bill. Phones will be answered using GSEnergy's name and our representatives will be trained to respond to a wide variety of call types. Charges for such services are set forth in Exhibit B. Notice of Modifications: - ----------------------- GSEnergy shall submit all requests for modification to services via certified mail to the following: Massachusetts Electric Customer Service & Operations Center c/o David A. Falkowski Manager - Billing & Systems 55 Bearfoot Road Northboro, MA 01532 EXHIBIT B PRICING Charges for Billing of Supplier Use: - ----------------------------------- The costs outlined below apply to all standard billing related services set forth in Exhibit A, but does not include non-standard services specifically excluded under Exhibit A that result in additional charges. The following fee schedule applies on a per bill generated basis. Rate Class Billing Cost - ---------- ------------ D-1 $1.42 D-20 $1.62 T-1 $1.54 G-6 $1.77 G-7 $1.55 G-8 $1.33 V-1 $1.41 Requests for multiple pricing within a Rate Class Structure will result in additional charges based upon an hourly rate of $65.00. Requests for making general billing adjustments will be serviced at a charge of $5.00 per customer adjustment. Invoices/Payment Terms: - ---------------------- GSEnergy will receive a monthly invoice from NEPSCo. Payment is due upon receipt. Upon the expiration or termination of the parties' obligations under this Agreement, any monies or other charges due to either party to this Agreement shall be paid within 30 days; provided, however, any refund that arises under Price Adjustment below shall be payable from NEPSCO within 30 days from the date that it has the necessary information to calculate the true up pricing. Bills not paid within the 30 days by either party shall bear interest at the rate of 1-1/2% per month on any unpaid balance. Collection Notices: - ------------------ GSEnergy will be charged on a time and expense basis at actual cost to amend any notice or dollar parameter used to generate such notices. Reporting: - --------- NEPSCo will review any request to create a customized report and charge GSEnergy on a time and expense basis at actual cost to develop such reports. Charges For Optional Customer Service: - ------------------------------------- Optional customer service support will be charged on a time and expense basis at actual cost. Additionally, GSEnergy will be invoiced for any incremental phone company charges incurred as a direct result of GSEnergy's customer service phone number. Price Adjustment: - ---------------- The charges for customer service and billing related services set forth herein will be adjusted to reflect actual costs incurred by NEPSCo based upon the Public Utility Holding Company Act of 1935 and SEC regulations and orders. Said adjustments will be calculated annually following the close of each calendar year applicable to this Agreement. Tax Implications: - ---------------- As a supplier, GSEnergy will be responsible to collect and pay all applicable State and/or Federal taxes associated with this pilot. EX-10 6 EXHIBIT 10(B)(III) Exhibit 10(b)(iii) CONFIDENTIAL INFORMATION NON-DISCLOSURE AGREEMENT This Agreement, dated as of May 21, 1996 is between Granite State Energy, Inc., with offices at 25 Research Drive, Westboro, MA, ("GSEnergy") and New England Power Company, with offices at 25 Research Drive, Westborough, MA ("Company"). WHEREAS, the Company and GSEnergy wish to discuss a prospective purchase of power for purposes of the New Hampshire Retail Competition Pilot Program (the "Prospective Purchase"); FOR GOOD AND VALUABLE CONSIDERATION, GSEnergy and the Company agree as follows: 1. In connection with the Prospective Purchase, the Company will provide GSEnergy with certain proprietary and commercially sensitive information and develop further such information with GSEnergy (all of the foregoing hereinafter referred to as "Information") which it wishes GSEnergy to maintain as confidential. GSEnergy agrees that it will safeguard such Information maintaining it confidential and not using it except for the purposes of such review and analysis. The term "Information" shall mean and includes all information in whatever form, provided for the purpose of GSEnergy's review and analysis, but is not information which: (a) is in the public domain at the time of disclosure to GSEnergy; or (b) enters the public domain after disclosure to GSEnergy, except where such entry is the result of a breach by GSEnergy of this Agreement; or (c) was already in the possession of GSEnergy prior to disclosure to GSEnergy and was not then subject to an obligation of confidence; or (d) is rightfully disclosed to GSEnergy by a third person. 2. GSEnergy agrees to maintain all Information in secrecy and confidence for a period of seven (7) years from the date of disclosure thereof, using the same degree of care as is used to protect its own Information. In no event will this degree of care be less than a reasonable degree of care. 3. If GSEnergy desires to use individuals not employed by GSEnergy, GSEnergy shall not disclose Information to these individuals without obtaining prior written approval from the Company and having appropriate non-disclosure agreements signed in form and substance satisfactory to the Company. - 2 - 4. It will not constitute a violation of this Agreement for GSEnergy to disclose Information as required by a governmental body or a court of competent jurisdiction or as otherwise required by law, provided that the Company has been given notice of such requirement and been afforded a reasonable opportunity to contest it, if applicable. 5. If any provision of this Agreement is or becomes or is deemed invalid, illegal or unenforceable in any jurisdiction, such provision shall be deemed amended to conform to applicable laws so as to be valid and enforceable or, if it cannot be so amended without materially altering the intention of the parties, it shall be stricken, and the remainder of this Agreement shall remain in full force and effect. 6. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Massachusetts. 7. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute together but one and the same document. 8. All notices from GSEnergy hereunder shall be in writing and delivered to the attention of Mr. Michael J. Hager, New England Power Company, 25 Research Drive, Westborough, MA 01582. All notices from the Company hereunder shall be in writing and delivered to GSEnergy at the above address. IN WITNESS WHEREOF, GSEnergy and the Company have caused this Agreement to be executed by their authorized representatives. GRANITE STATE ENERGY, INC. By: s/John H. Dickson Title: President NEW ENGLAND POWER COMPANY By: s/Jeffrey Tranen Title: President EX-10 7 EXHIBIT 10(B)(IV) Exhibit 10(b)(iv) New England Power A NEES company May 21, 1996 Mr. John H. Dickson President Granite State Energy, Inc. 25 Research Drive Westboro, MA 01582 CONFIRMATION LETTER This letter shall confirm the agreement reached on May 21, 1996, between New England Power Company ("NEP") and Granite State Energy, Inc. ("Buyer") regarding the sale/purchase of energy under the following terms and conditions: Buyer to purchase and receive; NEP to sell and deliver: CONTRACT Exclusive, all-requirements service, as QUANTITY: needed to support contracts between Buyer and its retail customers. DELIVERY (1) For service to retail customers served POINT(S): by Granite State Electric Company, a point or points on the NEP transmission system; or (2) For service to retail customers served by Public Service Company of New Hampshire ("PSNH"), a point or points on the NEP transmission system border with PSNH; or (3) For service to retail customers served by UNITIL/Concord, a point or points on the NEP transmission system border with PSNH; or (4) For service to retail customers served by UNITIL/Exeter&Hampton, a point or points on the NEP transmission system border with PSNH; or (5) For service to retail customers served by the New Hampshire Electric Cooperative, Inc. ("NHEC") which are served off of the PSNH transmission system, a point or points on the PSNH transmission system border with NHEC; or (6) For service to retail customers served by NHEC which are served off of the Central Vermont Public Service Company ("CVPS") transmission system, a point or points on the CVPS transmission system border with NHEC; or 25 Research Drive Westborough, MA 01582-0010 Telephone: 508-389-2000 Granite State Energy, Inc. Confirmation Letter page 2 (7) For service to retail customers served by NHEC which are served off of the NEP transmission system, a point or points on the NEP transmission system; or (8) For service to retail customers served by Connecticut Valley Electric Company ("CVEC"), a point or points on the CVPS transmission system border with CVEC; or (9) Such other points as otherwise agreed between NEP and Buyer. In the event that NHEC obtains transmission service for its retail customers across the PSNH transmission system then the Delivery Point for point 5 above shall be a point or points on the NEP transmission system border with PSNH. CONTRACT The Energy Charge Rate for energy delivered PRICE: during On-Peak hours (as defined below) shall be as follows: June '96 - Oct '96: $26.00 per MWh Nov '96 - May '97: $26.80 per MWh June '97 - Oct '97: $24.55 per MWh Nov '97 - May '98: $25.25 per MWh The Energy Charge Rate for energy delivered during Off-Peak hours (as defined below) shall be as follows: June '96 - Oct '96: $19.90 per MWh Nov '96 - May '97: $21.00 per MWh June '97 - Oct '97: $19.90 per MWh Nov '97 - May '98: $19.55 per MWh A Reservation Charge Rate of $2.50 per MWh shall apply to each MWh delivered during On-Peak and Off-Peak hours; provided, however, that the Reservation Charge Rate will be $1.25 per MWh, during periods when NEP is the sole supplier of energy to Buyer, should Buyer add language in a form acceptable to NEP on Buyer's promotional and/or billing materials indicating that Granite State Energy, Inc. Confirmation Letter page 3 NEP is Buyer's supplier of energy for the New Hampshire Pilot Program. On-Peak hours shall be from 7:01 AM to 10:00 PM, Monday through Friday, excluding holidays. All other hours shall be considered Off-Peak hours. The above Energy Charge Rates and Reservation Charge Rates are applicable only to (i) contracts between Buyer and its retail customers which are executed on or before July 15, 1996 and (ii) a maximum of 50 MW of hourly energy for such contracts. Contracts between Buyer and its retail customers which are executed after July 15, 1996 or which exceed the 50 MW limit will be served under a separate agreement between NEP and Buyer. PERIOD OF For all sales from Buyer to its retail DELIVERY: customers, commencing with the start of service under the New Hampshire Retail Pilot Program and ending upon the termination of service under the New Hampshire Retail Pilot Program. Buyer may terminate service under this Confirmation prior to June 1, 1997; provided, however (i) Buyer provides NEP with thirty days written notice prior to such termination; (ii) following termination, Buyer utilizes its own own-load dispatch at NEPOOL to account for its load and resources; (iii) NEP provides 100% of the energy and capacity needed to meet Buyer's own-load requirements from termination through May 31, 1997 ("Period A"); and (iv) NEP provides a minimum of 50% of the energy and capacity needed to meet Buyer's own-load requirements from June 1, 1997 through May 31, 1998 ("Period B"). The rates and terms under which NEP will provide such energy and capacity will be established under separate agreement, such agreement to be negotiated in good faith between NEP and Buyer; provided, however (i) the energy and reservation rates Granite State Energy, Inc. Confirmation Letter page 4 rates during Period A shall not exceed the rates contained in this Confirmation plus any incremental costs incurred by NEP, if any, to provide such service; (ii) the reservation rates during Period B shall not exceed the rate contained in this Confirmation; and (iii) the average annual energy rate during Period B shall not exceed the following: Energy Price = (A x Oil Price) + (B x Gas Price) + C where: A, B are constants, expressed in million Btu per MWh. "A" shall equal 4.74 during On-Peak hours and 1.76 during Off-Peak hours. "B" shall equal 4.74 during On-Peak hours and 1.76 during Off-Peak hours; C is a constant, expressed in $ per MWh, and shall equal 2.61 during On-Peak hours and 10.22 during Off-Peak hours; Oil Price is the average of the daily low quotations for cargo delivery of 1.0% sulphur #6 residual fuel oil into New York Harbor, as reported during the billing period by Platt's Market Scan, expressed in $ per million Btu; and Gas Price is the arithmetic average of the daily settlement prices for the last three days that the NYMEX Contract for the month of delivery trades, as reported in the Wall Street Journal, expressed in $ per million Btu. NYMEX Contract shall mean the New York Mercantile Exchange Natural Gas Futures Contract as approved by the Commodity Futures Trading Commission for the purchase and sale of natural gas at Henry Hub. Granite State Energy, Inc. Confirmation Letter page 5 OTHER: The following condition(s) precedent must be satisfied prior to the effectiveness of this Confirmation (i) Buyer and NEP have obtained all necessary regulatory approvals including, but not limited to, approvals from the Securities and Exchange Commission under the Public Utility Holding Company Act and the Federal Energy Regulatory Commission, and (ii) the start of service from Buyer to its retail customers prior to September 1, 1996. For purposes of calculating the Energy and Reservation Charges, the number of MWh's delivered during On-Peak hours shall be determined by summing all of the hourly loads assigned to Buyer by the various distribution companies during On-Peak hours plus Buyer's allocation of transmission losses, if any, which were provided by NEP. For purposes of calculating the Energy and Reservation Charges, the number of MWh's delivered during Off-Peak hours shall be determined by summing all of the hourly loads assigned to Buyer by the various distribution companies during Off-Peak hours plus Buyer's allocation of transmission losses, if any, which were provided by NEP. Buyer shall provide NEP with copies of all of the load reports it receives from each distribution company which indicate the hourly loads assigned by each distribution company to Buyer. The Contract Price shown above does not include any costs for transmission from NEP's generation sources to the Delivery Points. NEP will be responsible for making any necessary transmission arrangements and for supplying any losses from its generation source(s) to the Delivery Point(s). In addition to the above Energy and Reservation Charges, Buyer shall reimburse NEP for the costs incurred for such transmission service. Granite State Energy, Inc. Confirmation Letter page 6 Notwithstanding anything to the contrary herein, to the extent that the costs incurred in delivering energy under this Agreement later change due to the use of formula rates, governmental order, or as a result of actions otherwise beyond the reasonable control of NEP, NEP shall bill and Buyer shall pay any such incremental costs incurred by NEP. This Confirmation Letter is being provided pursuant to and in accordance with the New England Power Company FERC Electric Tariff Original Volume No. 5 Waiver and Service Agreement to Implement Retail Sales Under New Hampshire Pilot Program filed with the Federal Energy Regulatory Commission on April 16, 1996 in Docket No. ER96-1585-000, ("Agreement") between NEP and Buyer, and constitutes part of and is subject to all of the terms and provisions of such Agreement. Terms used but not defined herein shall have the meanings ascribed to them in the Agreement. Please confirm that the terms stated herein accurately reflect the agreement reached NEP and Buyer by returning an executed copy of this letter to Buyer. Your response should reflect the appropriate Party in your organization who has the authority to enter into this Transaction. GRANITE STATE ENERGY, INC. s/John H. Dickson Title: President NEW ENGLAND POWER COMPANY s/Jeffrey Tranen Title: President EX-10 8 EXHIBIT 10(B)(V) Exhibit 10(b)(v) New England Power A NEES company July 11, 1996 Mr. John H. Dickson President Granite State Energy, Inc. 25 Research Drive Westboro, MA 01582 CONFIRMATION LETTER This letter shall confirm the agreement reached on July 11, 1996, between New England Power Company ("NEP") and Granite State Energy, Inc. ("Buyer") regarding the sale/purchase of energy under the following terms and conditions: Buyer to purchase and receive, NEP to sell and deliver: CONTRACT Exclusive, all-requirements service, as QUANTITY: needed to support contracts between Buyer and its retail customers which are executed after July 15, 1996 through October 15, 1996. DELIVERY (1) For service to retail customers POINT(S): served by Granite State Electric Company, a point or points on the NEP transmission system; or (2) For service to retail customers served by Public Service Company of New Hampshire ("PSNH"), a point or points on the NEP transmission system border with PSNH; or (3) For service to retail customers served by UNITIL/Concord, a point or points on the NEP transmission system border with PSNH; or (4) For service to retail customers served by UNITIL/Exeter & Hampton, a point or points on the NEP transmission system border with PSNH; or (5) For service to retail customers served by the New Hampshire Electric Cooperative, Inc. ("NHEC") which are served off of the PSNH transmission system, a point or points on the PSNH transmission system border with NHEC; or (6) For service to retail customers served by NHEC which are served off of the Central Vermont Public Service Company ("CVPS") transmission system, a point or points on the CVPS transmission system border with NEP; or 25 Research Drive Westborough, MA 01582-0010 Telephone: 508-389-2000 Granite State Energy, Inc. Confirmation Letter page 2 (7) For service to retail customers served by NHEC which are served off of the NEP transmission system, a point or points on the NEP transmission system; or (8) For service to retail customers served by Connecticut Valley Electric Company ("CVEC"), a point or points on the CVPS transmission system border with NEP; or (9) Such other points as otherwise agreed between NEP and Buyer. In the event that NHEC obtains transmission service for its retail customers across the PSNH transmission system then the Delivery Point for point 5 above shall be a point or points on the NEP transmission system border with PSNH. CONTRACT The Energy Charge Rate for energy PRICE: delivered during On-Peak hours (as defined below) shall be as follows: Aug '96 - Oct '96: $28.25 per MWh Nov '96 - May '97: $28.00 per MWh June '97 - Oct '97: $26.25 per MWh Nov '97 - May '98: $27.25 per MWh The Energy Charge Rate for energy delivered during Off-Peak hours (as defined below) shall be as follows: Aug '96 - Oct '96: $21.10 per MWh Nov '96 - May '97: $22.25 per MWh June '97 - Oct '97: $21.50 per MWh Nov '97 - May '98: $21.50 per MWh A Reservation Charge Rate of $2.50 per MWh shall apply to each MWh delivered during On-Peak and Off-Peak hours; provided, however, that the Reservation Charge Rate will be $1.25 per MWh, during periods when NEP is the sole supplier of energy to Buyer, should Buyer add language in a form acceptable to NEP on Buyer's promotional and/or billing materials indicating that NEP is Granite State Energy, Inc. Confirmation Letter page 3 Buyer's supplier of energy for the New Hampshire Pilot Program. On-Peak hours shall be from 7:01 AM to 10:00 PM, Monday through Friday, excluding holidays. All other hours shall be considered Off-Peak hours. The above Energy Charge Rates and Reservation Charge Rates are applicable only to contracts between Buyer and its retail customers which are executed after July 15, 1996. Contracts between Buyer and its retail customers which were entered into on or before July 15, 1996 are subject to the agreement between NEP and Buyer dated May 21, 1996 ("May 21 Agreement"). Should the total sales under this agreement and the May 21 Agreement exceed 20 MW of energy in any hour, then the excess energy will be served under a separate agreement between NEP and Buyer. PERIOD OF For all sales from Buyer to its retail DELIVERY: customers, commencing with the start of service under the New Hampshire Retail Pilot Program and ending upon the termination of service under the New Hampshire Retail Pilot Program. Buyer may terminate service under this Confirmation prior to June 1, 1997; provided, however (i) Buyer provides NEP with thirty days written notice prior to such termination; (ii) following termination, Buyer utilizes its own own- load dispatch at NEPOOL to account for its load and resources; (iii) NEP provides 100% of the energy and capacity needed to meet Buyer's own-load requirements from termination through May 31, 1997 ("Period A"); and (iv) NEP provides a minimum of 50% of the energy and capacity needed to meet Buyer's own- load requirements from June 1, 1997 through May 31, 1998 ("Period B"). The rates and terms under which NEP will provide such energy and capacity will be established under separate agreement, such agreement to be negotiated in good faith between NEP and Buyer; provided, Granite State Energy, Inc. Confirmation Letter page 4 however (i) the energy and reservation rates during Period A shall not exceed the rates contained in this Confirmation plus any incremental costs incurred by NEP, if any, to provide such service; (ii) the reservation rates during Period B shall not exceed the rate contained in this Confirmation; and (iii) the average annual energy rate during Period B shall not exceed the following: Energy Price = (A x Oil Price) + (B x Gas Price) + C where: A, B are constants, expressed in million Btu per MWh. "A" shall equal 4.74 during On-Peak hours and 1.76 during Off-Peak hours. "B" shall equal 4.74 during On-Peak hours and 1.76 during Off-Peak hours; C is a constant, expressed in $ per MWh, and shall equal 2.61 during On-Peak hours and 10.22 during Off-Peak hours; Oil Price is the average of the daily low quotations for cargo delivery of 1.0% sulphur #6 residual fuel oil into New York Harbor, as reported during the billing period by Platt's Market Scan, expressed in $ per million Btu; and Gas Price is the arithmetic average of the daily settlement prices for the last three days that the NYMEX Contract for the month of delivery trades, as reported in the Wall Street Journal, expressed in $ per million Btu. NYMEX Contract shall mean the New York Mercantile Exchange Natural Gas Futures Contract as approved by the Commodity Futures Trading Commission Granite State Energy, Inc Confirmation Letter page 5 for the purchase and sale of natural gas at Henry Hub. OTHER: For purposes of calculating the Energy and Reservation Charges, the number of MWh's delivered during On-Peak hours shall be determined by summing all of the hourly loads assigned to Buyer by the various distribution companies during On-Peak hours, including reconciliations, if any, plus Buyer's allocation of transmission losses, if any, which were provided by NEP. For purposes of calculating the Energy and Reservation Charges, the number of MWh's delivered during Off-Peak hours shall be determined by summing all of the hourly loads assigned to Buyer by the various distribution companies during Off-Peak hours, including reconciliations, if any, plus Buyer's allocation of transmission losses, if any, which were provided by NEP. Buyer shall provide NEP with copies of all of the load reports it receives from each distribution company which indicate the hourly loads assigned by each distribution company to Buyer. In order to determine the load served under this agreement and the load served under the May 21 Agreement, Buyer shall provide NEP with a report, by the last day of each calendar month, which indicates the total number of customers Buyer has contracted with, as of the fifteenth day of such month, by rate category (Residential, Small Commercial and Industrial and Large Commercial and Industrial). The hourly load served under the May 21 Agreement shall be determined as follows: HLA=(A/B)x Load where: Granite State Energy, Inc. Confirmation Letter page 6 A is the value of TCL, as defined below, as of July 15, 1996; B is the value of TCL, as defined below, as of the fifteenth day of the current billing month (ie., as of August 15 for sales during the month of August); provided, however, that the value of B shall not be less than the value of A; HLA is the hourly load served under the May 21 Agreement; and Load is Buyer's total hourly load for the hour which is served under this agreement and the May 21 Agreement. The hourly load served under this agreement shall be determined as follows: HLB = ((B-A)/B) x Load where: A, B are as defined above; HLB is the hourly load served under this agreement; and Load is Buyer's total hourly load for the hour which is served under this agreement and the May 21 Agreement. The value of TCL shall be determined as follows: TCL=(N x 1.61)+(M x 3.54)+(0 x 84.18) where: N is the number of customers in the Residential rate category; Granite State Energy, Inc. Confirmation Letter page 7 M is the number of customers in the Small Commercial and Industrial rate category; and O is the number of customers in the large Commercial and Industrial rate category. The Contract Price shown above does not include any costs for transmission from NEP's generation sources to the Delivery Points. NEP will be responsible for arranging network integration transmission service and for supplying any losses from its generation source(s) to the Delivery Point(s). In addition to the above Energy and Reservation Charges, Buyer shall reimburse NEP for the costs incurred for such transmission service. Notwithstanding anything to the contrary herein, to the extent that the costs incurred in delivering energy under this Agreement later change due to the use of formula rates, governmental order, or as a result of actions otherwise beyond the reasonable control of NEP, NEP shall bill and Buyer shall pay any such incremental costs incurred by NEP. This Confirmation Letter is being provided pursuant to and in accordance with the New England Power Company FERC Electric Tariff Original Volume No. 5 Waiver and Service Agreement to Implement Retail Sales Under New Hampshire Pilot Program filed with the Federal Energy Regulatory Commission on April 16, 1996 in Docket No. ER96-1585-000, ("Agreement") between NEP and Buyer, and constitutes part of and is subject to all of the terms and provisions of such Agreement. Terms used but not defined herein shall have the meanings ascribed to them in the Agreement. Please confirm that the terms stated herein accurately reflect the agreement reached between NEP and Buyer by returning an executed copy of this letter to Buyer. Your response should reflect the appropriate Party in your organization who has the authority to enter into this Transaction. Granite State Energy, Inc. Confirmation Letter page 8 GRANITE STATE ENERGY, INC. s/John H. Dickson - ------------------------- Title: President - ------------------------- NEW ENGLAND POWER COMPANY s/John F. Malley - ------------------------- Title: Vice President - ------------------------- EX-10 9 EXHIBIT 10(C) Exhibit 10(c) NEES Companies February 5, 1997 Mr. John F. Malley, Vice President New England Power Company 25 Research Drive Westborough, MA 01582 Dear Mr. Malley: This letter will serve as an assignment of the Tariff 5 Service Agreement, effective as of July 1, 1996 (the "Service Agreement"), between NEES Energy and New England Power Company for the Massachusetts Electric retail electric pilot programs, confirmed by Confirmation Letter dated August 5, 1996. NEES Energy hereby assigns all benefits and obligations under the Service Agreement to its subsidiary, AllEnergy Marketing Company, L.L.C., Three University Office Park, 95 Sawyer Road, Waltham, Massachusetts 02158. Any notices to AllEnergy should be directed to John H. Dickson, President, at that address. Please confirm your acceptance of this assignment by returning an executed copy of this letter to me. NEES ENERGY, INC. s/Alfred D. Houston Alfred D. Houston Vice President NEW ENGLAND POWER COMPANY s/John F. Malley John F. Malley Vice President New England Power A NEES company August 5, 1996 Mr. John H. Dickson President NEES Energy, Inc. 25 Research Drive Westboro, MA 01582 CONFIRMATION LETTER This letter shall confirm the agreement reached on August 5, 1996, between New England Power Company ("NEP") and NEES Energy, Inc. ("Buyer") regarding the sale/purchase of energy under the following terms and conditions: Buyer to purchase and receive; NEP to sell and deliver: CONTRACT All-requirements service, as needed to QUANTITY: support contracts between Buyer and its retail customers in the Massachusetts Electric Company Retail Pilot Program. DELIVERY A point or points on NEP's transmission POINT(S): system which shall be at the interconnection(s) between NEP's system resources and the NEP transmission system. CONTRACT The Energy Charge Rate for energy PRICE: delivered during On-Peak hours (as defined below) shall be as follows: Jan '97 - Jan '98: $24.75 per MWh The Energy Charge Rate for energy delivered during Off-Peak hours (as defined below) shall be as follows: Jan '97 - Jan '98: $20.25 per MWh A Reservation Charge Rate of $2.50 per MWh shall apply to each MWh delivered during On-Peak and Off-Peak hours; provided, however, that the Reservation Charge Rate will be $1.25 per MWh, during periods when NEP is the sole supplier of energy to Buyer, should Buyer add CONFIDENTIAL 25 Research Drive Westborough, MA 01582-0010 Telephone: 508-389-2000 NEES Energy, Inc. Confirmation Letter page 2 language in a form acceptable to NEP on Buyer's promotional and/or billing materials indicating that NEP is Buyer's supplier of energy. On-Peak hours shall be from 7:01 AM to 10:00 PM, Monday through Friday, excluding holidays. All other hours shall be considered Off-Peak hours. Period of For all sales from Buyer to its retail Delivery: customers, commencing with the start of service under Massachusetts Electric Company's Retail Pilot Program and ending upon the termination of service under such program. Other: The following condition(s) precedent must be satisfied prior to the effectiveness of this Confirmation (i) the proposal submitted by Buyer in response to the Pilot Program RFP must be selected by the Administrator and (ii) customers must elect to take service from Buyer. For purposes of calculating the Energy and Reservation Charges, the number of MWh's delivered during On-Peak hours shall be determined by summing all of the hourly loads assigned to Buyer by Massachusetts Electric Company during On- Peak hours. For purposes of calculating the Energy and Reservation Charges, the number of MWh's delivered during Off-Peak hours shall be determined by summing all of the hourly loads assigned to Buyer by Massachusetts Electric Company during Off-Peak hours. Buyer shall provide NEP with copies of all of the load reports it receives from Massachusetts Electric Company which indicate the hourly loads assigned by Massachusetts Electric Company to Buyer. CONFIDENTIAL NEES Energy, Inc. Confirmation Letter page 3 Transmission from the Delivery Point(s) to ultimate retail customers will be provided via network transmission service which is purchased by Massachusetts Electric Company. Notwithstanding anything to the contrary herein, to the extent that the costs incurred in delivering energy under this Agreement later change due to the use of formula rates, governmental order, or as a result of actions otherwise beyond the reasonable control of NEP, NEP shall bill and Buyer shall pay any such incremental costs incurred by NEP. This Confirmation Letter is being provided pursuant to and in accordance with the New England Power Company FERC Electric Tariff Original Volume No. 5 Waiver and Service Agreement to Implement Retail Sales Under Massachusetts Electric Company's Pilot Program filed with the Federal Energy Regulatory Commission in Docket No. ER96-1626-000, ("Agreement") between NEP and Buyer, and constitutes part of and is subject to all of the terms and provisions of such Agreement. Terms used but not defined herein shall have the meanings ascribed to them in the Agreement. Please confirm that the terms stated herein accurately reflect the agreement reached on August 5, 1996, between NEP and Buyer by returning an executed copy of this letter to Buyer. Your response should reflect the appropriate Party in your organization who has the authority to enter into this Transaction, and should be received by Buyer no later than August 8, 1996. NEES ENERGY, INC. s/John H. Dickson - -------------------- Title: President NEW ENGLAND POWER COMPANY s/John F. Malley - --------------------------- Title: Vice President Generation Marketing CONFIDENTIAL New England Power A NEES company July 31, 1996 Mr. John H. Dickson President Granite State Energy, Inc. 25 Research Drive Westboro, MA 01582 CONFIRMATION LETTER Please refer to the Confirmation Letter dated July 11, 1996, between New England Power Company ("NEP") and Granite State Energy, Inc. ("Buyer") regarding the sale/purchase of energy. NEP and Buyer agree that the Energy Charge Rates shall be deleted in their entirety and replaced with the following: CONTRACT PRICE: The Energy Charge Rate for energy delivered during On-Peak hours (as defined below) shall be as follows: Aug '96 - Oct '96: $26.00 per MWh Nov '96 - May '97: $26.80 per MWh June '97 - Oct '97: $24.55 per MWh Nov '97 - May '98: $25.25 per MWh The Energy Charge Rate for energy delivered during Off-Peak hours (as defined below) shall be as follows: Aug '96 - Oct '96: $19.90 per MWh Nov '96 - May '97: $21.00 per MWh June '97 - Oct '97: $19.90 per MWh Nov '97 - May '98: $19.55 per MWh Please acknowledge your agreement with the above by signing below. GRANITE STATE ENERGY, INC. NEW ENGLAND POWER COMPANY s/John H. Dickson s/John F. Malley - -------------------------- -------------------------- Title: President Title: Vice President 25 Research Drive Westborough, MA 01582-0010 Telephone: 508-389-2000 EX-10 10 EXHIBIT 10(D)(I) Exhibit 10(d)(i) SERVICE AGREEMENT BY AND BETWEEN NEW ENGLAND POWER SERVICE COMPANY AND AllEnergy Marketing Company, LLC This Agreement is made and entered into as of the 1st day of January, 1997 (this "Agreement") by and between AllEnergv Marketing Company, LLC.("Client") having offices at Three University Office Park, 95 Sawyer Road, Waltham, MA 02154 and NEW ENGLAND POWER SERVICE COMPANY ("NEPSCo") having offices at 25 Research Drive Westborough, MA 01582. Section 1: Description of Services NEPSCo will provide Client with billing related services described in Exhibit A (the "Services"). The descriptions of the Services in Exhibit A are incorporated herein and made a part hereof. Section 2: Extent of Agreement NEPSCo shall exercise all reasonable skill, care and diligence in carrying out the Services, shall carry out its duties in accordance with recognized professional standards and shall provide everything reasonably necessary to complete the Services in accordance with the requirements of this Agreement. Section 3: Term This Agreement shall be in effect as of the date hereof and through the final billing cycle for each Customer (as defined in Exhibit A) following termination of the Mass. Electric Pilot (as defined in Exhibit A), unless earlier terminated by the parties as provided herein. Either party may terminate this Agreement for cause by providing 90 days written notice. Notwithstanding anything to the contrary herein, the obligation to pay the other party money due under this Agreement shall survive expiration and termination of this Agreement. Further, upon expiration or termination of this Agreement the parties shall cooperate with each other in order to complete all outstanding matters related to this Agreement in a timely and orderly manner. Section 4: Payment Terms Payment terms are set forth in Exhibit B, attached hereto and made a part hereof. 2 Section 5: Limitation of Liability In no event shall either party be liable to the other party or to any other third party for any indirect, reliance, multiple, incidental, special, consequential, or punitive damages (including those which arise under M.G.L. c. 93A) connected with or arising out of the Agreement, including, but not limited to, from NEPSCo's performance of any Services hereunder, whether or not either party was advised of the possibility of such damages. In no event shall NEPSCo be liable in contract, tort, or otherwise (including negligence, warranty, or strict liability) for amounts in excess of the total of all amounts earned by NEPSCo in connection with this Agreement, whether or not NEPSCo was advised of the possibility of such damages. Section 6: Warranties NEPSCo and its affiliates, successors and assigns make no WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE with respect to the Services. Section 7: Indemnification To the fullest extent permitted by law, Client shall indemnify and hold harmless, and at NEPSCo's option, defend NEPSCo and its affiliates, and their officers, directors, employees, agents, servants, and assigns (collectively, "NEPSCo Parties") from and against any and all claims and/or liability for losses, expenses, damage to property, injury to or death of any person, including, but not limited to, Client's employees, NEPSCo's and its affiliates' employees, subcontractors and subcontractors' employees, or any other liability incurred by NEPSCo or its affiliates, including expenses, legal or otherwise, caused wholly or in part by any negligent, grossly negligent or willful, act or omission of Client, its officers, directors, employees, agents, servants, or assigns arising out of this Agreement, except to the extent caused by any negligent, grossly negligent or willful, act or omission of the NEPSCo Parties. Section 8: Assignment and Subcontracting NEPSCo shall not assign or subcontract the Services or any part thereof without Client's written consent, which Client shall not unreasonably withhold. Client may not assign its rights or obligations under this Agreement except with the written consent of NEPSCo. Section 9: Independent Contractor NEPSCo is, and shall at all times remain, an independent contractor. 3 Section 10: Entire Agreement This Agreement constitutes the entire Agreement between the parties with respect to the Services and all previous representations, either written or oral, are hereby annulled and superseded. Section 11: No Third Party Beneficiaries The work performed by NEPSCo under this Agreement is for Client's use and benefit only, and not for the use and benefit of any other person, party, or entity. Any use of or reliance upon the work product provided under or in connection with this Agreement by any party other than Client shall be at the sole risk of such party. NEPSCo shall have no liability under contract, third party beneficiary theory, tort, strict liability, or otherwise for any third party's use or reliance upon work performed pursuant to this Agreement. Section 12: Confidentiality NEPSCo agrees to take reasonable measures to hold in confidence all pricing related information provided and specifically designated by Client as Confidential Information, other than that of a clearly public nature or that which Client has acquired from other sources and except as otherwise required to be disclosed by law, regulation or judicial or administrative order. Section 13: Force Majeure NEPSCo shall not be considered in default under this Agreement or responsible in tort, strict liability, contract or other legal theory to Client for damages of any description for any interruption or failure of service or deficiency in the quality or quantity of service, or any other failure to perform if such failure is caused by factors beyond NEPSCo's reasonable control, including without limitation, storm, flood, lightning, earthquake, fire, explosion, equipment failure, civil disturbance, labor dispute, act of God or the public enemy, action of a court or public authority, scheduled or unscheduled withdrawal of facilities from operation for maintenance or repair, or any other cause beyond the reasonable control of NEPSCo; provided however that NEPSCo shall use reasonable efforts to remedy or correct any such failure or interruption as soon as reasonably possible. Section 14: Amendments and Modifications This Agreement may not be amended, modified, superseded, or waived, in whole or in part, except by a written instrument signed by authorized representatives of each of the parties hereto. A waiver in one or more instances of any rights under this Agreement shall not constitute a waiver of such rights for other or future instances. 4 Section 15: Enforceability Should any portion of this Agreement be judicially declared invalid, unenforceable, or void, such decision shall not have the effect of invalidating or voiding the remainder of this Agreement, and the parties hereto agree that the portion or portions of this Agreement so held to be invalid, unenforceable, or void shall be deemed to have been stricken and the remainder shall have the same force and effect as if said portions or portions had never been included herein. Section 16: Headings Headings are provided herein for the convenience of the parties and shall not be construed to explain or modify any part of this Agreement. Section 17: Notices Except as otherwise provided in this Agreement, any notices under this Agreement shall be in writing and shall be sufficient if delivered by (i) hand, (ii) U. S. Mail, first class postage pre-paid, or (iii) facsimile, with confirmation of receipt to the parties as follows: For NEW ENGLAND POWER SERVICE COMPANY: John G. Cochrane Vice President 25 Research Drive Westborough, Massachusetts 01582 Phone: (508) 389-2174 Facsimile: (508) 836-4560 For AllEnergy Marketing Company, LLC: Marcy Reed Vice President and Treasurer Three University Office Park 95 Sawyer Road Waltham, MA 02154 Phone: (617)642-9502 Fax: (617)642-9504 Section 18: Applicable Law This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts without regard to the principles of conflict of laws contained therein. 5 IN WITNESS WHEREOF, each party hereto has caused this Agreement to be executed by its duly authorized representative as of the day and the year first set forth above. AllEnergy Marketing Company, LLC By: s/Marcy L. Reed Title: Vice President and Treasurer NEW ENGLAND POWER SERVICE COMPANY By: s/John G. Cochrane Title: Vice President EXHIBIT A SERVICES Client has requested that NEPSCo provide it with billing related services for retail customer sales within Massachusetts Electric Company's service territory under the Massachusetts Electric Company Choice: New England Pilot Program ("Mass. Electric Pilot"), which services will be provided consistent with the pilot program design, its administrator's rules, and the DPU approval dated April 3, 1996. Client will supply the NEPSCo with rates to be implemented for designed customer classes. NEPSCo will utilize the supplied rates and usage information to calculate the supplier portion of customer bills, then integrate this billing option with Transmission, Distribution and Stranded Cost components (T/D/S) of Massachusetts Electric's bill in a single mailing to the customer. Billing services include a single price among all customers within a class on the following rate/pricing structure: Rate Class Structure Pricing Schedule - -------------------- ---------------- Residential Flat Energy Residential- Low Income Flat Energy Residential- Time of Use On/Off Peak Energy Small C&I- Energy Only Flat Energy Small C&I- Demand Flat Energy & Demand The initial establishment of rates will be at no additional cost provided there is only one per Rate Class Structure (e.g. one price option per rate structure). Requests to change the pricing on an existing Rate Class Structure or to add multiple rates within a structure must be submitted in writing at least five business days prior to the requested implementation date. Multiple pricing among customers within a Rate Class Structure will result in the additional charges set forth in Exhibit B. Definition of Billing Demand: - ---------------------------- Billing Demand shall be the greater of: 1) The greatest fifteen-minute peak usage occurring during the On-Peak hours period during the month as measured in kilowatts for each Account, or 2) 90% of the greatest fifteen-minute peak usage occurring during On-Peak hours period during the month as measured in kilovolt-amperes for each Account where kilowatt Demand exceeds 75 kilowatts, or 3) 5 Kilowatts/G7 only On-Peak/Off-Peak periods apply only to residential rate R7 for the Pilot. The On-Peak/Off-Peak periods shall be as defined in MECO's applicable tariff on file with MDPU. At the present time, On-Peak periods are from 8:00 AM to 9:00 PM, Monday through Friday, except holidays. Off-Peak periods are 9:00 PM to 8:00 AM, Monday through Friday and all day on Saturday, Sunday, and holidays. Holidays are New Year's Day, Presidents Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. All holidays are on the day of national observance. Customer Payment: - ---------------- Upon receipt of payments by Massachusetts Electric Company ("MECO") for customers purchasing electric energy from Client, NEPSCo will ensure that the portion of revenue attributable to sales of electric energy by Client is forwarded to Client, including, without limitation, Client's proportionate share of any Service Fees (as defined below). Notification of said revenues will be forwarded by midnight of the business day following receipt of payment by MECO, e.g., notification of payments received on Monday will be forwarded to Client by midnight on Tuesday. Payments made to Client will be made in a lump sum representing all customer revenue received on behalf of Client for a given day. These lump sum payments to Client will be made via an Automated Clearinghouse (ACM) transaction and credited to a pre-determined Client bank account. Client must provide NEPSCo with the name of the receiving bank, routing and transit number (ABA number) and bank account number to facilitate this transfer. The Client credited amount will be accompanied by an electronic file which provides a detailed payment summary for each individual Client customer. If Client is credited with a customer payment under the immediate preceding paragraph hereof and the customer's payment is not honored for any reason by the MECO's bank, then the amount credited to Client for such customer's electric energy will be charged back to Client and included in the nightly transmission of customer payment records. Existing service fees ("Service Fees"), such as interest charges for unpaid balances, shall remain in effect and be assessed, as applicable, to each customer account. The cash posting sequence for customer payments is detailed below: Cash Posting: - ------------ The following cash posting sequence will be in effect upon receipt of a customer's payment. A. MECO Cash Posting: ----------------- 1) Rental Arrears 2) Arrears 120 Days and Greater 3) Arrears, 90 Days 4) Arrears, 60 Days 5) Arrears, 30 Days 6) Rental Current 7) Net Current Balance 8) Miscellaneous Arrears 9) Miscellaneous Current 10) Charge off transfer Balance Note: Following the MECO Cash posting sequence outlined above, remaining dollars will be credited to Client as follows: B. Client Cash Posting: ------------------- 1) Arrears 120 Days and Greater 2) Arrears, 90 Days 3) Arrears, 60 Days 4) Arrears, 30 Days 5) Net Current Balance Note: Following the Client cash posting sequence outlined above, any remaining dollars i.e credit balance, will be held and applied to the MECO net current balance. Collection of Final Billed Accounts: - ----------------------------------- If Client or a Client's customer terminates service for any reason, NEPSCo will issue a final bill to the customer(s). If after 21 billing cycles a balance remains outstanding, NEPSCo will issue a reminder bill and message to the customer. This process will be repeated after 42 billing cycles if necessary. If after 63 billing cycles a customer's balance remains unpaid, NEPSCo will remove this customer from its billing records and forward to Client a hard copy report of any uncollected balance for further collection action if so desired. Collection Notices: - ------------------ NEPSCo has created three levels of collection bill messages to print on a Client customer's bill. NEPSCo will work with Client to modify the wording and dollar parameters used to generate a message on a customer's bill. Requests to amend any notice or dollar parameter used to generate such notices will result in additional charges in accordance with Exhibit B. Reporting: - --------- NEPSCo has the ability to develop customized reports outlining pertinent information such as: sales, cash receipts and aging of accounts receivables for all of Client's customers. Requests to create a customized report will result in additional charges in accordance with Exhibit B. Billing Adjustments: - ------------------- NEPSCo will make its customer service staff available to Client on a requested basis and at additional cost for the purpose of applying general adjustments to the Client portion of a customer's account. Charges for such services are set forth in Exhibit B. Notice of Modifications: - ----------------------- Client shall submit all requests for modification to services via certified mail to the following: Massachusetts Electric Customer Service & Operations Center c/o Patrick J. Connelly Director, Customer Service Center 55 Bearfoot Road Northboro, MA 01532 EXHIBIT B PRICING Charges for Billing of Supplier Use: - ----------------------------------- The costs outlined below apply to all standard billing related services set forth in Exhibit A, but does not include non-standard services specifically excluded under Exhibit A that result in additional charges. The following fee schedule applies on a per bill generated basis. Rate Class Billing Cost - ---------- ------------ R-5 $1.27 R-6 $1.27 R-7 $1.26 G-6 $1.49 G-7 $1.57 Requests for multiple pricing within a Rate Class Structure will result in additional charges based upon an hourly rate of $65.00. Requests for making general billing adjustments will be serviced at a charge of $5.00 per customer adjustment. Invoices/Payment Terms: - ---------------------- Client will receive a monthly invoice from NEPSCo. Payment is due upon receipt. Upon the expiration or termination of the parties' obligations under this Agreement, any monies or other charges due to either party to this Agreement shall be paid within 30 days; provided, however, any refund that arises under Price Adjustment below shall be payable from NEPSCo within 30 days from the date that it has the necessary information to calculate the true up pricing. Bills not paid within the 30 days by either party shall bear interest at the rate of 1-1/2% per month on any unpaid balance. Collection Notices: - ------------------ Client will be charged on a time and expense basis at actual cost to amend any notice or dollar parameter used to generate such notices. Reporting: - --------- NEPSCo will review any request to create a customized report and charge Client on a time and expense basis at actual cost to develop such reports. Price Adjustment: - ---------------- The charges for billing related services set forth herein will be adjusted to reflect actual costs incurred by NEPSCo based upon the Public Utility Holding Company Act of 1935 and SEC regulations and orders. Said adjustments will be calculated annually following the close of each calendar year applicable to this Agreement. Tax Implications: - ---------------- It is Client's or its customer's responsibility to identify and request any exemption from the collection of the tax by filing appropriate documentation with NEPSCo or MECO. To the extent that the Client or customer has not forwarded the appropriate exemption documentation, NEPSCo will collect on behalf of the Client any sales tax imposed by governmental authorities with respect to the sale of electricity to its customers. Client shall be responsible, however, to pay all applicable state, local and/or Federal taxes associated with Client's purchase and/or sale of electricity under the Pilot, and shall indemnify NEPSCo against all such obligations. EX-10 11 EXHIBIT 10(D)(II) Exhibit 10(d)(ii) CAPITAL AND LIQUIDITY SUPPORT AGREEMENT This CAPITAL AND LIQUIDITY SUPPORT AGREEMENT, is made and entered into as of the 29th day of May, 1997 by and among Eastern Enterprises ("Eastern "), a Massachusetts voluntary association, AllEnergy Marketing Company, Inc., ("AMCI"), a wholly owned subsidiary of Eastern, New England Electric System ("NEES"), a Massachusetts voluntary association, NEES Energy Inc., ("NEI"), a wholly owned subsidiary of NEES, and AllEnergy Marketing Company, L.L.C. ("AllEnergy"), a Massachusetts limited liability company. WITNESSETH WHEREAS, AMCI and NEI each own fifty percent (50%) of the equity of AllEnergy; and WHEREAS, AllEnergy intends to incur "Fleet Debt" (as that term hereinafter is defined) for the purposes of carrying on its business; and WHEREAS, Eastern, AMCI, NEES, and NEI desire to take certain actions to support the financial condition of AllEnergy as hereinafter set forth in order to assure its ability to incur Fleet Debt; NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto agree as follows: 1. Stock Ownership. So long as there shall remain unpaid any Fleet Debt which AllEnergy may have incurred, each of AMCI and NEI shall own fifty percent (50%) of all the outstanding equity of AllEnergy; provided, however that, upon prior written notice to Fleet National Bank, each of AMCI and NEI may transfer some or all of its equity in AllEnergy to the other party. As used herein, the term "Fleet Debt" shall mean all obligations of AllEnergy for borrowed money and in respect of letters of credit issued for the account of AllEnergy, including but not limited to repayment of principal, accrued unpaid interest, fees, penalties, and other costs, pursuant to a promissory note and letter agreement, each dated May 1997, with Fleet National Bank, ("Fleet Credit Agreement") under which AllEnergy may borrow or request that Fleet National Bank issue its letter or letters of credit, which borrowings and/or letters of credit may not exceed Ten Million ($10,000.00) Dollars outstanding at any one time. 2. Maintenance of Net Worth. While any Fleet Debt is outstanding, each of AMCI and NEI, severally and not jointly, shall take all action necessary to ensure that the "Net Worth" (as that term hereinafter is defined) of AllEnergy is maintained at not less than One Dollar ($1.00). As used herein the term "Net Worth" shall mean the excess of assets over liabilities as determined in accordance with generally accepted accounting principles as used by the United States Financial Accounting Standards Board, as in effect from time to time, consistently applied. 3. Maintenance of Liquidity. Each of AMCI and NEI, severally and not jointly, shall, from time to time, make contributions to AllEnergy of cash or other liquid assets sufficient to permit AllEnergy to pay and satisfy its Fleet Debt promptly following written notice from AllEnergy or Fleet National Bank to AMCI and NEI of any lack of AllEnergy's ability to satisfy such requirements on its own. 4. Payments by AMCI and NEI. In the event that AllEnergy's Net Worth is less than One Dollar ($1.00) (a "Net Worth Deficiency"), or in the event that AllEnergy does not have sufficient cash or other liquid assets to permit it to pay and satisfy the Fleet Debt as any such Fleet Debt becomes due (a "Liquidity Deficiency"), each of AMCI and NEI immediately shall, upon notice from AllEnergy or Fleet National Bank, pay to AllEnergy an amount equal to the product of (i) the amount of the Net Worth Deficiency or Liquidity Deficiency, as the case may be and (ii) their respective percentage ownership interests in the equity of AllEnergy provided, however, in no event shall the aggregate of percentage interests described in clause (ii) be less than 100% and provided further , however, AMCI and NEI may, in lieu of payment to AllEnergy, elect to directly payoff and retire all outstanding Fleet Debt and terminate the Fleet Credit Agreement in accordance with its terms. Eastern and NEES agree to, severally (as determined by the percentage ownership interest of their respective subsidiaries in AllEnergy which at all times shall equal 100% in the aggregate) and not jointly, provide the necessary funds to AMCI and NEI, respectively, to meet their payment commitments under sections 2, 3, and 4 hereof. 5. No Guarantee of Indebtedness. This Agreement is not, and nothing herein contained, and no action taken pursuant hereto by Eastern, AMCI, NEES, or NEI shall be construed as, or deemed to constitute, a direct or indirect guarantee by Eastern, AMCI, NEES, NEI, or any one or more of them, to any person or entity of the payment of Fleet Debt or any other indebtedness, or of any liability or obligation of any kind or character whatsoever of AllEnergy or any subsidiary of AllEnergy; provided, however, that AllEnergy may deliver copies of this Agreement to Fleet National Bank who shall be entitled to rely thereon in extending credit to AllEnergy under the Fleet Credit Agreement. 6. Waivers. None of the parties hereto shall be relieved of any of its obligations or duties hereunder due to the failure or delay on the part of AllEnergy in asserting or enforcing any of its rights, or in making any claims or demands, hereunder. 7. Amendments and Termination. This Agreement may be amended or modified at any time by the parties hereto; provided, however, that no such amendment or modification which adversely affects the holders of Fleet Debt outstanding at the time of execution thereof shall be binding on or in any manner become effective with respect to such Fleet Debt except with the prior written consent of the holders of not less than a majority in principal amount of Fleet Debt at the time outstanding. This Agreement shall automatically terminate on the second anniversary of the date hereof and may be terminated by any party hereto upon 30 days prior written notice to the other parties; provided, however, that this Agreement shall not terminate until such time as all Fleet Debt outstanding on or prior to the date of the giving of notice of termination shall have been paid in full. 8. Successors. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and is also intended for the benefit of the holders from time to time of the Fleet Debt and, notwithstanding that such holders are not parties hereto, each such holder shall be entitled to the full benefits of this Agreement and to enforce the covenants and agreements contained therein. This Agreement is not intended for the benefit of any person other than the holders of Fleet Debt, and shall not confer or be deemed to confer upon other such person any benefits, rights or remedies hereunder. 9. Governing Law. This Agreement shall be governed by the Laws of The Commonwealth of Massachusetts. 10. Reference is hereby made to the declaration of trust establishing Eastern Enterprises (formerly Eastern Gas and Fuel Associates) dated July 18, 1929, as amended, a copy of which is on file in the office of the Secretary of the Commonwealth of Massachusetts. The name "Eastern Enterprises" refers to the trustees under said declaration of trustees and not personally; and no trustee, shareholder, officer or agent of Eastern Enterprises shall be held to any personal liability in connection with the affairs of said Eastern Enterprises, but the trust estate only is liable. 11. 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. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as an instrument under seal by their respective officers thereunto duly authorized as of the date and year first written above. ALLENERGY MARKETING COMPANY, L.L.C. By: s/Marcy L. Reed Its: Vice President and Treasurer EASTERN ENTERPRISES NEW ENGLAND ELECTRIC SYSTEM By: By: s/Alfred D. Houston Its: Its: Executive Vice President ALLENERGY MARKETING NEES ENERGY, INC. COMPANY, INC. By: By: s/John G. Cochrane Its: Its: Treasurer EX-10 12 EXHIBIT 10(D)(III) Exhibit 10(d)(iii) NEW ENGLAND POWER SERVICE COMPANY 25 Research Drive Westborough, Massachusetts 01582 SERVICE CONTRACT December 31, 1996 AllEnergy Marketing Company, L.L.C. Three University Office Park 95 Sawyer Road Waltham, MA 02154 New England Power Service Company (hereinafter called Service Company) is a company engaged primarily in the rendering of services to companies in the New England Electric System holding- company system. The organization, conduct of business and method of cost allocation of the Service Company are designed to meet the requirements of Section 13 under the Public Utility Holding Company Act of 1935 and the rules and regulations promulgated thereunder to the end that services performed by the Service Company for said associate companies will be rendered to them at cost, fairly and equitably allocated. Services will be rendered by Service Company only upon receipt from time to time of specific or general request therefor. Said requests may always be modified or cancelled by you at your discretion. The parties hereto agree as follows: 1. The Service Company agrees to furnish you upon the terms and conditions herein set forth such of the services described in Schedule 1 hereto as you may from time to time request. Service Company will also furnish, if available, such services not described in Schedule 1 as you may request. Notwithstanding the foregoing the Service Company shall not furnish under this agreement any engineering, construction, or maintenance services for a nuclear generating plant. 2. The Service Company has and will maintain a staff trained and experienced in the provision of services of a general and administrative nature. In addition to the services of its own staff, Service Company will, after consultation with you concerning services to be rendered pursuant to your request, arrange for services of non-affiliated experts, consultants, accountants and attorneys. 3. All of the services rendered under this agreement will be at actual cost thereof. Direct charges will be made for services where a direct allocation of cost is possible. The methods of determining such costs and the allocation thereof are set forth in Schedule II hereto. These methods are reviewed annually and more frequently, if appropriate. Such methods may be modified or changed by Service Company without the necessity of an amendment of this agreement provided that in each instance all services rendered hereunder will be at actual cost thereof, fairly and equitably allocated, and all in accordance with the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations and orders thereunder. You will be advised from time to time of any material changes in such methods. 4. Bills will be rendered during the first week of each month covering amounts due for the month calculated on an estimated basis using the actual expenses incurred during the previous month. This estimated amount would be adjusted on the bill to be rendered during the first week of the following month. Any amount remaining unpaid after fifteen days following receipt of the bill shall bear interest thereon from the date of the bill at an annual rate of 2% above the lowest interest rate then being charged by the First National Bank of Boston on 90 day commercial loans. Services will be performed hereunder for not more than one year commencing January 1, 1997, and continuing through December 31, 1997, unless terminated at an earlier date by either party giving thirty days' written notice to the other of such termination at the end of any month. 5. This agreement will be subject to termination or modification at any time to the extent its performance may conflict with any federal or state law or any rule, regulation or order of a federal or state regulatory body having jurisdiction. The agreement shall be subject to approval of any federal or state regulatory body whose approval is a legal prerequisite to its execution and delivery or performance. NEW ENGLAND POWER SERVICE COMPANY s/Michael E. Jesanis By: Treasurer Accepted 1/16/97 By: s/John H. Dickson SCHEDULE I Description of Services Available from New England Power Service Company Accounting: The keeping of accounts and collateral activities, including billing, payroll and customer relations; preparation of reports and preservation of records. Auditing: Periodic audits by Service Company auditors and the furnishing of reports and recommendations. Corporate and Corporate Records: Cooperation with attorneys, officers and special counsel of associate companies on corporate matters, financing, regulation, contracts, claims and litigation. Services in connection with stockholders' and directors' meetings and keeping of corporate records. Employee Relations: Service re labor relations, personnel, wage and salary schedules, employee training and safety and medical programs. Engineering: Civil, mechanical, electrical, and other engineering services; technical advice, design, installation, supervision, planning, research, testing, operation of communications, including microwave, and operation and maintenance of specialized technical equipment. Executive and Administrative: Consultation and services in management and administration of all aspects of electric utility business. Information Systems: Maintenance and operation of information systems and equipment for accounting, engineering, administration and other functions. Insurance: Development, placement and administration of insurance coverages and employee benefit programs, including group insurance and retirement annuities; property inspections and valuations for insurance. Intellectual Property: Filing applications, owning, licensing, and holding licenses for copyrights, patents, servicemarks, and trademarks for associated companies. Properties: Services re acquisition and disposition of properties; cooperation with attorneys of associate companies in title examination and conveyancing; maintenance of property records; and making property inventories and valuations. Power Supply: Planning and other services for supply of electric power, and negotiation of contracts therefore. Public Information and Relations: Services re information to and relations with the public, including customers, security holders, employees, financial analysts, rating agencies and investment firms. Purchasing and Stores: Services re purchase and storing of materials, supplies and equipment. Regulation: Analysis of laws, rules and regulations and recommendations for action hereunder; handling of matters with regulatory and governmental authorities; preparation of applications and registrations. Systems: Establishing of accounting and other procedures and standards. Taxes: Service re federal, state and municipal taxes, preparation of returns and handling of audits and claims by taxing authorities. Treasury and Statistical: Services re financing of associate companies, both short and long-term, determination of capital needs, and preparation of financial and statistical reports. SCHEDULE II Determination of Cost of Service and Allocation Thereof Cost of service will be determined in accordance with the Public Utility Holding Company Act of 1935 and the rules and regulations and orders thereunder, and will include all costs of doing business incurred by the Service Company. Records will be maintained for each Department and Division of the Service Company in order to accumulate all costs of doing business and to determine the cost of service. These costs will include wages and salaries of employees and related expenses such as insurance, taxes, pensions and other employee welfare expenses, and rent, light, heat, telephone, supplies, and other housekeeping costs. In addition, records will be maintained of general administrative expenses, which will include the costs of operating the Service Company as a corporate entity. Charges for services rendered and related expenses and non- personal expenses (e.g., use of automotive equipment, etc.) will be billed directly to the serviced companies, either individually or, when the services performed are for a group for a group of companies, by means of an equitable allocation formula. Each formula will have an appropriate basis such as customers, meters, employees, plant investments, inventories or operating revenues. Charges for services will be determined from the time sheets of employees and will be computed on the basis of each employee's hourly rate plus a percentage factor to cover related expenses and general administrative expenses. Records of such related expenses and general administrative expenses will be maintained and subjected to periodic review. Out-of-pocket expenses which are incurred for the serviced companies will be billed at cost. Charges for non-personal expenses, such as for use of automobiles, trucks and heavy equipment, will normally be computed on the basis of costs per hour or per mile. EX-99 13 FINANCIAL STATEMENT 1-A NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES Statements of Consolidated Income Period Ended June 30, 1997 (expressed in millions, rounded to hundred thousands of dollars) (Unaudited, subject to adjustment)
Quarter Six Months ------- ---------- Operating revenue $577.6 $1,215.8 ------ -------- Operating expenses: Fuel for generation 85.8 185.1 Purchased electric energy 127.2 271.7 Other operation 141.1 265.0 Maintenance 39.5 70.5 Depreciation and amortization 59.1 125.1 Taxes, other than income taxes 36.2 76.0 Income taxes 22.1 60.8 ------ -------- Total operating expenses 511.0 1,054.2 ------ -------- Operating income 66.6 161.6 Other income: Equity in income of generating companies 2.4 5.1 Other income (expense), net (3.1) (4.8) ------ -------- Operating and other income 65.9 161.9 ------ -------- Interest: Interest on long-term debt 26.8 54.3 Other interest 3.8 7.6 Allowance for borrowed funds used during construction (.4) (1.0) ------ -------- Total interest 30.2 60.9 ------ -------- Income after interest 35.7 101.0 Preferred dividends of subsidiaries 1.8 3.6 Minority interests 1.7 3.3 ------ -------- Net income $ 32.2 $ 94.1 ====== ========
EX-99 14 FINANCIAL STATEMENT 1-B NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES Consolidated Balance Sheet At June 30, 1997 (expressed in millions, rounded to hundred thousands of dollars) (Unaudited, subject to adjustment)
ASSETS ------ Utility plant, at original cost $5,783.9 Less accumulated provisions for depreciation and amortization 1,921.9 -------- 3,862.0 Construction work in progress 50.2 -------- Net utility plant 3,912.2 -------- Oil and gas properties, at full cost 1,291.3 Less accumulated provision for amortization 1,114.4 -------- Net oil and gas properties 176.9 -------- Investments: Nuclear power companies, at equity 49.5 Other subsidiaries, at equity 43.2 Other investments 103.1 -------- Total investments 195.8 -------- Current assets: Cash 4.0 Accounts receivable, less reserves of $20,793,000 229.6 Unbilled revenues 63.1 Fuel, materials, and supplies, at average cost 80.3 Prepaid and other current assets 78.2 -------- Total current assets 455.2 -------- Deferred charges and other assets 403.6 -------- $5,143.7 ======== CAPITALIZATION AND LIABILITIES ------------------------------ Capitalization: Common share equity: Common shares, par value $1 per share: Authorized - 150,000,000 shares Outstanding - 64,969,652 shares $ 65.0 Paid-in capital 736.8 Retained earnings 904.8 Treasury stock - 149,238 shares (5.2) Unrealized gain on securities, net 2.7 -------- Total common share equity 1,704.1 Minority interests in consolidated subsidiaries 46.2 Cumulative preferred stock of subsidiaries 126.2 Long-term debt 1,484.5 -------- Total capitalization 3,361.0 -------- Current liabilities: Long-term debt due within one year 104.7 Short-term debt 170.8 Accounts payable 127.8 Accrued taxes 25.4 Accrued interest 24.6 Dividends payable 37.4 Other current liabilities 132.4 -------- Total current liabilities 623.1 -------- Deferred federal and state income taxes 724.7 Unamortized investment tax credits 90.7 Other reserves and deferred credits 344.2 -------- $5,143.7 ========
EX-99 15 FINANCIAL STATEMENT 2-A NEW ENGLAND ENERGY INCORPORATED Statements of Income Period Ended June 30, 1997 (expressed in millions, rounded to hundred thousands of dollars) (Unaudited, Subject to Adjustment)
Quarter Six Months ------- ---------- Operating revenue: Sales of fuel to an affiliate $ 11.8 $ 27.4 Loss passed on to an affiliate (6.6) (15.9) Accrued loss to be passed on to an affiliate 7.4 14.0 Sales to nonaffiliates: Oil 1.2 2.8 Gas 7.5 20.8 ------ ------ Total operating revenue 21.3 49.1 ------ ------ Operating expenses: Purchases of fuel for an affiliate 5.2 11.5 Amortization of cost of fuel reserves 14.9 35.3 Production costs 1.2 2.4 ------ ------ Total operating expenses 21.3 49.2 ------ ------ Operating income/(loss) - (0.1) Other income/(expense): Interest expense (0.5) (1.2) State taxes (0.8) (1.6) ------ ------ Operating and other income/(loss) (1.3) (2.8) ------ ------ Federal income taxes: Current federal income taxes (0.3) 9.5 Deferred federal income taxes (0.7) (11.6) ------ ------ Net federal income taxes (1.0) (2.1) ------ ------ Net income $ (0.3) $ (0.7) ====== ======
EX-99 16 FINANCIAL STATEMENT 2-B NEW ENGLAND ENERGY INCORPORATED Balance Sheet At June 30, 1997 (expressed in millions, rounded to hundred thousands of dollars) (Unaudited, Subject to Adjustment)
ASSETS ------ Current assets: Cash, including temporary cash investments of $3,500,000 with affiliated companies $ 3.7 Accounts receivable: Accrued loss to be passed on to affiliate 16.9 Prepaid expenses 0.4 --------- Total current assets 21.0 --------- Property at cost: Cost of fuel reserves: Exploration and development costs: Samedan 749.0 Dorchester 67.4 Cost of capital 453.7 Other 38.7 --------- 1,308.8 Less-accumulated amortization (1,114.3) --------- Net cost of fuel reserves 194.5 Work in process - Samedan 0.9 --------- Total property 195.4 --------- $ 216.4 ========= LIABILITIES AND PARENT COMPANY'S INVESTMENT ------------------------------------------- Current liabilities: Accrued exploration and development costs $ 18.4 Accounts payable 2.0 Accrued interest 0.3 Accrued taxes 9.6 --------- Total current liabilities 30.3 --------- Deferred income taxes 61.0 --------- Deferred credit 2.2 --------- Notes payable to banks under credit agreement 126.0 --------- Parent company's investment: Subordinated notes payable to parent 22.1 Common stock, par value $1 per share, and other paid-in capital 0.2 Accumulated deficit (25.4) --------- Total parent company's investment (3.1) --------- $ 216.4 ========= Accrued exploration and development costs: Total (All Samedan) ------------- Exploration $11.8 Development 6.5 Work in process (0.5) Advance 0.6 ------ $18.4 ======
EX-99 17 FINANCIAL STATEMENT 3-A GRANITE STATE ENERGY, INC. Statements of Income (expressed in millions, rounded to hundred thousands of dollars) Period Ended June 30, 1997 (Unaudited, subject to adjustment)
Quarter Six Months ------- ---------- Operating revenue $0.2 $ 0.3 ---- ----- Operating expenses: Purchased electric energy 0.2 0.3 Other operating expenses - 0.1 ---- ----- Total operating expenses 0.2 0.4 ---- ----- Net loss $0.0 $(0.1) ==== =====
EX-99 18 FINANCIAL STATEMENT 3-B GRANITE STATE ENERGY, INC. Balance Sheet At June 30, 1997 (expressed in millions, rounded to hundred thousands of dollars) (Unaudited, subject to adjustment)
ASSETS ------ Current assets: Customer accounts receivable and unbilled revenue $ 0.1 Prepaid taxes 0.1 ----- Total assets $ 0.2 ===== LIABILITIES AND PARENT COMPANY'S INVESTMENT ------------------------------------------- Parent company's investment: Common stock, par value $1 per share, and subordinated notes payable to parent $ 0.4 Accumulated deficit (0.2) ----- Total liabilities and parent company's investment $ 0.2 =====
EX-99 19 FINANCIAL STATEMENT 4-A ALLENERGY MARKETING COMPANY, LLC Consolidated Income Statements Period Ended June 30, 1997 (expressed in millions, rounded to hundred thousands of dollars) (Unaudited, subject to adjustment)
Quarter Six Months ------- ---------- Revenues $ 9.0 $30.5 ----- ----- Operating expenses Cost of sales 8.7 29.3 Selling, general and administrative 3.5 6.1 Consulting 0.3 0.8 Member service charges 0.1 0.3 ----- ----- Total operating expenses 12.6 36.5 ----- ----- Operating loss (3.6) (6.0) Interest income 0.1 0.1 ----- ----- Net loss $(3.5) $(5.9) ===== =====
EX-99 20 FINANCIAL STATEMENT 4-B ALLENERGY MARKETING COMPANY, LLC Consolidated Balance Sheet At June 30, 1997 (expressed in millions, rounded to hundred thousands of dollars) (Unaudited, subject to adjustment)
Assets ------ Cash $ 3.0 Accounts receivable 3.6 Accounts receivable - members 0.1 Inventory 4.1 Prepaid expenses 0.2 Other current assets 0.8 ----- Total current assets 11.8 Fixed assets 0.9 Goodwill 0.3 ----- Total assets $13.0 ===== Liabilities and Members' Equity ------------------------------- Accounts payable $ 0.6 Accounts payable - members 0.2 Accrued expenses 2.8 Unearned revenue 0.5 Other current liabilities 0.2 ----- Total current liabilities 4.3 Capital lease obligation 0.1 ----- Total liabilities 4.4 Members' equity 8.6 ----- Total liabilities and members' equity $13.0 =====
-----END PRIVACY-ENHANCED MESSAGE-----