-----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, Wd15v5vezJ40naX2yuY00c1oUx/c3ijAo/CDnZ6p8AGXa0ao87afwmMnWIOuWlD5 sbVyAx3xChsiCMPAMn25nQ== 0000072741-01-500114.txt : 20010828 0000072741-01-500114.hdr.sgml : 20010828 ACCESSION NUMBER: 0000072741-01-500114 CONFORMED SUBMISSION TYPE: U-9C-3 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHEAST UTILITIES SYSTEM CENTRAL INDEX KEY: 0000072741 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 042147929 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-9C-3 SEC ACT: 1935 Act SEC FILE NUMBER: 074-00011 FILM NUMBER: 1723485 BUSINESS ADDRESS: STREET 1: 174 BRUSH HILL AVE CITY: WEST SPRINGFIELD STATE: MA ZIP: 01090-0010 BUSINESS PHONE: 4137855871 MAIL ADDRESS: STREET 1: 107 SELDON ST CITY: BERLIN STATE: CT ZIP: 06037-1616 U-9C-3 1 formu9c3june01.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 FORM U-9C-3 QUARTERLY REPORT PURSUANT TO RULE 58 For the quarterly period ended June 30, 2001 Northeast Utilities ----------------------------------- (Name of registered holding company) 107 Selden Street, Berlin, CT 06037 ----------------------------------- (Address of principal executive offices) Name and telephone number of officer to whom inquiries concerning this report should be directed: John J. Roman, Vice President and Controller Telephone number: 860-665-5000 GENERAL INSTRUCTIONS A. Use of Form 1. A reporting company, as defined herein, shall file a report on this form within 60 days after the end of each of the first three quarters, and within 90 days after the end of the fourth quarter, of the fiscal year of the registered holding company. The period beginning on the date of effectiveness of rule 58 and ending at the end of the quarter following the quarter in which the rule becomes effective shall constitute the initial period for which any report shall be filed, if applicable. 2. The requirement to provide specific information by means of this form supersedes any requirement by order of the Commission to provide identical information by means of periodic certificates under rule 24; but does not so supersede and replace any requirement by order to provide information by means of an annual report on Form U-13-60. 3. Information with respect to reporting companies that is required by Form U-13-60 shall be provided exclusively on that form. 4. Notwithstanding the specific requirements of this form, this Commission may informally request such further information as, in its opinion, may be necessary or appropriate. B. Statements of Monetary Amounts and Deficits 1. Amounts included in this form and in related financial statements may be expressed in whole dollars, thousands of dollars or hundred thousands of dollars. 2. Deficits and other similar entries shall be indicated by either brackets or parentheses. An explanation should be provided by footnote. C. Formal Requirements This form, including exhibits, shall be filed with Commission electronically pursuant to Regulation S-T (17 CFR 232.10 et seq.). A conformed copy of each such report shall be filed with each state commission having jurisdiction over the retail rates of a public utility company that is an associate company of a reporting company. Each report shall provide the name and telephone number of the person to whom inquiries concerning the report should be directed. D. Definitions As used in this form, the word "reporting company" means an energy-related company or gas-related company, as defined in rule 58(b). All other words and terms have the same meaning as in the Public Utility Holding Company Act of 1935, as amended, and the rules and regulations thereunder. ITEM 1 - ORGANIZATION CHART - ----------------------------------------------------------------------- Instructions - ----------------- 1. Complete Item 1 only for the first three calendar quarters of the fiscal year of the registered holding company. 2. Under the caption "Name of Reporting Company," list each energy-related and gas-related company and each system company that directly or indirectly holds securities thereof. Add the designation "(new)" for each reporting company of which securities were acquired during the period, and the designation"(*)" for each inactive company. 3. Under the caption "Percentage of Voting Securities Held," state the aggregate percentage of the outstanding voting securities of the reporting company held directly or indirectly by the registered holding company at the end of the quarter. 4. Provide a narrative description of each reporting company's activities during the reporting period.
- ------------------------------------------------------------------------------------------------ Percentage Activities Energy of Voting reported Name of or Gas Date of State of Securities Nature of during the Reporting Co. Related Organization Organization Held Business period - ----------------- ------- ------------ ------------- ----------------- -------------- ---------- NU Holding 1/4/99 Connecticut 100% by Unregulated (A) Enterprises, Inc. Northeast businesses Utilities holding company Select Energy 9/26/96 Connecticut 100% by Invest in (B) Energy, Inc. NU energy-related Enterprises, Inc. activities * Select Energy 3/17/99 Connecticut 100% by Invest in (C) Energy NU energy-related Portland Enterprises, Inc. activities Pipeline, Inc. Northeast Energy 1/4/99 Connecticut 100% by Invest in (D) Generation NU energy-related Services Enterprises, Inc. activities Company Select Energy Energy 6/19/90 Massachusetts 100% by Invest in (E) Services, Inc. NU energy-related Enterprises, Inc. activities Reeds Ferry Energy 7/15/64 New 100% by Invest in (F) Supply Co., Inc. Hampshire Select Energy energy-related Services, Inc. activities HEC/Tobyhanna Energy 9/28/99 Massachusetts 100% by Invest in (G) Energy Project, Select Energy energy-related Inc. Services, Inc. activities Select Energy Energy 10/12/94 Massachusetts 100% by Invest in (H) Contracting, Inc. Select Energy energy-related Services, Inc. activities Yankee Energy Holding 2/15/00 Connecticut 100% by Public (I) System, Inc. Northeast Utility Utilities Holding Company Yankee Energy Energy 7/2/93 Connecticut 100% by Invest in (J) Services Company Yankee Energy energy-related System, Inc. activities Housatonic Energy 10/16/87 Connecticut 100% by Invest in (K) Corporation Yankee Energy energy-related System, Inc. activities R.M. Energy 11/22/94 Connecticut 10% by Invest in (L) Services, Inc. Yankee Energy energy-related System, Inc. activities Acumentrics Energy 09/13/00 Massachusetts 5% by Invest in (M) Corporation NU energy-related Enterprises, Inc. activities ERI/HEC Energy 09/30/00 Delaware 50% by Invest in (N) EFA-Med, LLC Select Energy energy-related Services, Inc. activities E.S. Boulos Energy 01/19/01 Connecticut 100% by Invest in (O) Company Northeast energy-related Generation activities Services Company NGS Mechanical Energy 01/24/01 Connecticut 100% by Provide (P) Company Northeast mechanical Generation construction Services Company and maintenance services HEC/CJTS Energy Energy 03/02/01 Delaware 100% by Facilitate (Q) Center LLC Select Energy construction Services, Inc. financing
* Sold in June 2001. (A) NU Enterprises, Inc. is not the "reporting company" but is included in this Item 1 because it holds, directly or indirectly, voting securities issued by reporting companies as indicated above. (B) Select Energy, Inc. (Select Energy) provides both wholesale and retail energy services. Specifically, Select Energy participates in open-access retail electricity markets in New England, New York and the Mid-Atlantic regions. Select Energy markets and sells electricity, natural gas, oil, and energy- related products and services. Select Energy is a licensed retail electricity supplier in the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, and Rhode Island. Select Energy is a registered gas marketer with local gas distribution companies in the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, and Rhode Island. (C) Select Energy Portland Pipeline, Inc. (SEPPI) acquired a 5% interest in Portland Natural Gas Transmission System partnership in March 1999. (D) Effective January 4, 1999, Northeast Generation Services Company (NGS) was established to provide a full range of energy-related operation and maintenance services for large industrial, institutional and power generation customers throughout the 11-state Northeast area. NGS' current business segments focus on providing turnkey Manage and Operate Services (MOS) and also a full range of Industrial Services (IS) and Consulting Services (CS). MOS is a service that is designed for generation asset owners. NGS has the ability to offer station management and operation services with a focus on optimizing the value of that specific asset with the owner. Within the IS platform, its offerings include mechanical and electrical construction and maintenance services, as well as environmental maintenance/compliance services. Within the CS platform, the product and service offerings include engineering and environmental consulting services, with an emphasis on power plant system design. (E) Select Energy Services, Inc. is not the "reporting company" but is included in this item 1 because it holds, directly or indirectly, voting securities issued by reporting companies as indicated above. (F) Reed's Ferry Supply Corporation was purchased by Select Energy Services, Inc. in August 1999 as an equipment wholesaler to purchase equipment on behalf of Select Energy Contracting, Inc. (G) Effective September 30, 1999, HEC/Tobyhanna Energy Project, Inc. was established as a special purpose entity to manage the assets of an Energy Savings Performance Contract (ESPC) project at the Tobyhanna Army Depot. (H) Select Energy Contracting, Inc. designs, manages and directs the construction of, and/or installing of mechanical, water, and electrical systems, energy and other resource consuming equipment. (I) Yankee Energy System, Inc. is not the "reporting company" but is included in this item 1 because it holds, directly or indirectly, voting securities issued by reporting companies as indicated above. (J) Yankee Energy Services Company (YESCO) provides a wide range of energy- related services for its customers. The YESCO controls division provides comprehensive building automation with engineering, installation and maintenance of building control systems. (K) Housatonic Corporation is not a "reporting company" but is included in this item 1 because it holds, directly or indirectly, voting securities issued by reporting companies as indicated above. (L) R. M. Services, Inc. provides consumer collection services for companies throughout the United States. (M) Acumentrics Corporation develops, manufactures and distributes advanced power generation, power quality and power protection devices including a high-speed flywheel and advanced technology fuel cells. (N) ERI/HEC EFA-Med, LLC is a Delaware limited liability company that was formed by Select Energy Services, Inc., and ERI Services, Inc. to enter into an indefinite delivery/indefinite quantity contract with the U.S. Navy. Under the contract, the Navy will issue Delivery Orders for energy services work at U.S. Government facilities located in Bahrain, Greece, Egypt, Italy, Spain, Turkey, and the United Kingdom. The LLC will designate either ERI or Select Energy Services, Inc. to perform each of the Delivery Orders. The LLC will also act as the conduit for any project-related financing. ERI Services, Inc. and Select Energy Services, Inc. each own 50% of the LLC. (O) E.S. Boulos Company (Boulos) is a Connecticut corporation that was formed by NGS to acquire the assets of electrical construction companies located in Maine. Boulos is registered to do business initially in Maine, Massachusetts, New Hampshire, and Vermont. NGS owns 100% of the corporation. (P) NGS Mechanical Company (NGSM) is a Connecticut corporation that was formed by NGS to perform mechanical construction and maintenance services to customers contracted with to provide such services. NGSM is registered to do business initially in Massachusetts, New Hampshire, Maine, Vermont, Rhode Island, and New York. NGS owns 100% of the corporation. (Q) HEC/CJTS Energy Center LLC (HEC/CJTS) is a Delaware limited liability company that was formed by Select Energy Services, Inc. to facilitate the financing of the construction of the Connecticut Juvenile Training School in Middletown, Connecticut. HEC/CJTS will not have any employees nor will it conduct any other activities other than those related to accepting the assignment of the lease. Select Energy Services, Inc. owns 100% of the LLC. ITEM 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS - ------------------------------------------------------------------------------- Instruction - ----------- With respect to a transaction with an associate company, report only the type and principal amount of securities involved. - -------------------------------------------------------------------------------
Person Company Type of Principal to Whom Collateral Consideration Company Amount of Issuing Security Amount of Issue or Cost of Security Given With Received for Contributing Capital Security Issued Security Renewal Capital Was Issued Security Each Security Capital Contribution - -------------- ------------ ------------- -------- ------- ---------- ---------- ------------- ------------ ------------ Select Energy, Inc. No transactions this quarter. Northeast Generation NU Services Enterprises, Company N/A N/A N/A N/A N/A N/A N/A Inc. $7,500,000 Select Energy Contracting, Inc. No transactions this quarter. Reeds Ferry Supply Co., Inc. No transactions this quarter. HEC/Tobyhanna Energy Project, Inc. No transactions this quarter. Yankee Energy Services Company No transactions this quarter. Northeast Utilities R.M. Service Services, Inc. N/A N/A N/A N/A N/A N/A N/A Company $4,500,000 Acumentrics Corporation No transactions this quarter. ERI/HEC EFA-Med, LLC No transactions this quarter. E.S. Boulos Company No transactions this quarter. NGS Mechanical Company No transactions this quarter. HEC/CJTS Energy Center LLC No transactions this quarter.
ITEM 3 - ASSOCIATE TRANSACTIONS - ------------------------------------------------------------------------------- Instructions - ------------ 1. This item is used to report the performance during the quarter of contracts among reporting companies and their associate companies, including other reporting companies, for service, sales and construction. A copy of any such contract not filed previously should be provided as an exhibit pursuant to Item 6.B. 2. Parts I and II concern transactions performed by reporting companies on behalf of associate companies, and transactions performed by associate companies on behalf of reporting companies, respectively. - ------------------------------------------------------------------------------- Part I - Transactions performed by reporting companies on behalf of associate companies.
Total Amount Billed* Reporting Associate Company Company Types of Three months Rendering Receiving Services ended Services Services Rendered June 30, 2001 - ----------------------- ------------------- -------------- ------------------ (Thousands of Dollars) Northeast Select Generation Energy, Inc. Electrical and Services Mechanical services $ 19 Company ================== Northeast The Generation Connecticut Services Light & Power Electrical and Company Company Mechanical services $ 9 ================== Northeast Public Service Generation Company of Electrical and Services New Hampshire Mechanical services $ 227 Company ================== Northeast Holyoke Water Generation Power Company Electrical and Services Mechanical services $3,829 Company ================== Northeast Northeast Generation Generation Electrical and Services Company Mechanical services $4,218 Company ================== Wholesale Reeds Ferry Select Energy Purchasing Supply Co., Inc. Contracting, Inc. Services $ 295 ================== Phone Center R.M. Services, Inc. Yankee Gas Management Services Company Services $ 519 ================== Northeast North Atlantic Generation Energy Service Electrical and Services Corporation Mechanical services $ 30 Company ================== Northeast Generation Yankee Energy Electrical and Services Service Company Mechanical services $ 7 Company ================== Northeast Northeast Generation Utilities Services Service Electrical and Company Company Mechanical services $ 12 ==================
Part II - Transactions performed by associate companies on behalf of reporting companies.
Total Amount Billed* Associate Reporting Company Company Types of Three months Rendering Receiving Services ended Services Services Rendered June 30, 2001 - ----------------------- ------------------- -------------- ------------------ (Thousands) Public Service Company Select of New Hampshire Energy, Inc. Miscellaneous $ 11 ================== Select Energy Select Engineering Services Services, Inc. Energy, Inc. $ 14 ================== * 'Total Amount Billed' is direct costs only.
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT Investments in energy-related companies: - ---------------------------------------- (Thousands of Dollars) Total consolidated capitalization as of 06/30/01 $6,767,169 line 1 Total capitalization multiplied by 15% (line 1 multiplied by .15) 1,015,075 line 2 Greater of $50 million or line 2 $1,015,075 line 3 Total current aggregate investment: (categorized by major line of energy-related business): Select Energy, Inc. $699,569 Northeast Generation Services Company 22,010 Select Energy Contracting, Inc. 26,185 Reeds Ferry Supply Co., Inc. 7 HEC/Tobyhanna Energy Project, Inc. - Yankee Energy Services Company 9,882 R.M. Services, Inc. 13,799 E.S. Boulos Company 7,539 NGS Mechanical Company 10 Acumentrics Corporation 10,000 ERI/HEC EFA-Med, LLC 1 HEC/CJTS Energy Center LLC - ----------- Total current aggregate investment 789,002 line 4 ----------- Difference between the greater of $50 million or 15% of capitalization and the total aggregate investment of the registered holding company system $226,073 line 5 =========== ITEM 5 - OTHER INVESTMENTS - ----------------------------------------------------------------------------- Instruction - ----------- This item concerns investments in energy-related and gas-related companies that are excluded from the calculation of aggregate investment under rule 58. - ----------------------------------------------------------------------------- Major Line Other Other of Energy- Investment Investment Related in Last in This Reason for Difference Business U-9C-3 Report U-9C-3 Report in Other Investment - ------------- ------------- ------------- ------------------------ NONE ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS - ----------------------------------------------------------------------------- Instructions - ------------ A. Financial Statements 1. Financial statements are required for reporting companies in which the registered holding company system has at least 50% equity or other ownership interest. For all other rule 58 companies, the registered holding company shall make available to the Commission such financial statements as are available to it. 2. For each reporting company, provide a balance sheet as of the end of the quarter and income statements for the three-month and year-to-date periods ending as of the end of the quarter, together with any notes thereto. Financial statements shall be for the first three quarters of the fiscal year of the registered holding company. 3. If a reporting company and each of its subsidiaries engage exclusively in a single category of energy-related or gas-related activity, consolidated financial statements may be filed. 4. Separate financial statements need not be filed for inactive companies or for companies engaged solely in the ownership of interests in energy-related or gas-related companies. B. Exhibits 1. Copies of contracts required to be provided by Item 3 shall be filed as exhibits. 2. A certificate stating that a copy of the report for the previous quarter has been filed with interested state commissions shall be filed as an exhibit. The certificate shall provide the names and addresses of the state commissions. - ----------------------------------------------------------------------------- A. Financial Statements Select Energy, Inc.: Balance Sheet - As of June 30, 2001 Income Statement-Three months and six months ended June 30, 2001 Northeast Generation Services Company: Balance Sheet - As of June 30, 2001 Income Statement-Three months and six months ended June 30, 2001 Select Energy Contracting, Inc.: Balance Sheet - As of June 30, 2001 Income Statement-Three months and six months ended June 30, 2001 Reeds Ferry Supply Co., Inc.: Balance Sheet - As of June 30, 2001 Income Statement-Three months and six months ended June 30, 2001 HEC/Tobyhanna Energy Project, Inc.: Balance Sheet - As of June 30, 2001 Income Statement-Three months and six months ended June 30, 2001 Yankee Energy Services Company: Balance Sheet - As of June 30, 2001 Income Statement-Three months and six months ended June 30, 2001 ERI/HEC EFA-Med, LLC: Not Available as of June 30, 2001 E.S. Boulos Company: Balance Sheet - As of June 30, 2001 Income Statement-Three months and six months ended June 30, 2001 NGS Mechanical Company: Balance Sheet - As of June 30, 2001 Income Statement-Three months and six months ended June 30, 2001 HEC/CJTS Energy Center LLC: Not Available as of June 30, 2001 Northeast Utilities (PARENT): Balance Sheet - As of June 30, 2001 Income Statement-Three months and six months ended June 30, 2001 B. Exhibits Exhibit No. Description - ----------- ----------- 6.B.1.1 Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.2 Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.3a Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.3b Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.4 Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.5a Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.5b Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.6a Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.6b Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.6c Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.7a Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.7b Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.8a Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.8b Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.8c Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9a Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9b Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9c Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9d Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9e Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9f Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9g Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9h Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9i Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9j Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9k Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9l Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9m Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9n Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9o Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9p Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9q Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9r Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9s Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9t Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9u Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9v Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9w Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9x Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9y Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9z Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.1.9aa Copy of contract required by Item 3-filed under confidential treatment pursuant to Rule 104(b). 6.B.2.1 The company certifies that a conformed copy of Form U-9C-3 for the previous quarter was filed with the following state commissions: Ms. Louise E. Rickard Acting Executive Secretary Department of Public Utility Control 10 Franklin Square New Britain, CT 06051 Ms. Mary L. Cottrell, Secretary Massachusetts Department of Telecommunications and Energy 100 Cambridge Street Boston, MA 02202 Mr. Thomas B. Getz Executive Director and Secretary State of New Hampshire Public Utilities Commission 8 Old Suncook Road, Building One Concord, NH 03301-7319 SELECT ENERGY, INC. BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Accounts receivable, including unbilled revenues, net $ 261,270 Accounts receivable from affiliated companies 110,549 Taxes receivable 428 Special deposits 39,095 Unrealized gains on mark-to-market transactions 68,297 Prepaid wholesale power purchases 11,202 Prepayments and other 4,751 -------------- Total current assets 495,592 -------------- Deferred Charges: Intangibles, net 20,963 Accumulated deferred income taxes 17,971 Prepaid pensions 2,097 Other 7,474 -------------- Total deferred charges 48,505 -------------- Long-Lived Assets: Software 10,350 Other 1,062 -------------- 11,412 Less: Accumulated provision for depreciation 2,784 -------------- 8,628 Capital additions in progress 241 -------------- Total long-lived assets 8,869 -------------- Total Assets $ 552,966 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY, INC. BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current Liabilities: Notes payable to affiliated companies $ 164,700 Accounts payable 309,003 Accounts payable to affiliated companies 17,743 Accrued taxes 18,174 Other 64,721 -------------- Total current liabilities 574,341 -------------- Stockholders' Equity: Common stock, $1 par value - 100 shares authorized and outstanding - Capital surplus, paid in 92,592 Retained deficit (113,967) -------------- Total stockholders' equity (21,375) -------------- Total Liabilities and Stockholders' Equity $ 552,966 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY, INC. INCOME STATEMENT (Unaudited) Three Months Six Months Ended Ended June 30, June 30, 2001 2001 -------------- -------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ 639,739 $ 1,236,483 -------------- -------------- Operating Expenses: Purchased power, net interchange power and capacity 628,161 1,226,704 Depreciation 1,236 2,428 Other 9,476 24,095 Taxes other than income taxes 3,117 6,882 -------------- -------------- Total operating expenses 641,990 1,260,109 -------------- -------------- Operating Loss (2,251) (23,626) -------------- -------------- Other (Loss)/Income (64) 177 -------------- -------------- Interest and financing costs 2,679 5,140 -------------- -------------- Loss before income taxes (4,994) (28,589) -------------- -------------- Income Tax Benefit: Federal and state income taxes, net 1,988 11,307 -------------- -------------- Loss before cumulative effect of accounting change (3,006) (17,282) -------------- -------------- Cumulative effect of accounting change, net of tax benefit of $14,611 - (21,985) -------------- -------------- Net Loss $ (3,006) $ (39,267) ============== ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. NORTHEAST GENERATION SERVICES COMPANY BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 1,329 Accounts receivable 21,562 Accounts receivable from affiliated companies 1,674 Fuel, materials and supplies, at average cost 434 Prepayments and other 1,672 -------------- Total current assets 26,671 -------------- Other Investments: Other investments, at cost 16 -------------- Total other investments 16 -------------- Deferred Charges: Other 6,172 -------------- Total deferred charges 6,172 -------------- Long-Lived Assets: Other 2,992 -------------- 2,992 Less: Accumulated provision for depreciation 1,248 -------------- 1,744 Capital additions in progress 1,764 -------------- Total long-lived assets 3,508 -------------- Total Assets $ 36,367 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. NORTHEAST GENERATION SERVICES COMPANY BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current Liabilities: Notes payable to affiliated companies $ 10,100 Accounts payable 8,890 Accounts payable to affiliated companies 4,185 Accrued taxes 2,076 Other 270 -------------- Total current liabilities 25,521 -------------- Deferred Credits: Other 1,326 -------------- Total deferred credits 1,326 -------------- Stockholders' Equity: Common stock, $1 par value - authorized and outstanding 100 shares - Capital surplus, paid in 9,510 Retained earnings 10 -------------- Total stockholders' equity 9,520 -------------- Total Liabilities and Stockholders' Equity $ 36,367 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. NORTHEAST GENERATION SERVICES COMPANY INCOME STATEMENT (Unaudited) Three Months Six Months Ended Ended June 30, June 30, 2001 2001 -------------- -------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ 27,121 $ 52,549 -------------- -------------- Operating Expenses: Operation 12,549 26,259 Maintenance 13,912 24,375 Depreciation 108 200 Federal and state income taxes 742 741 Taxes other than income taxes 68 330 -------------- -------------- Total operating expenses 27,379 51,905 -------------- -------------- Operating (Loss)/Income (258) 644 -------------- -------------- Other Income 697 1,062 -------------- -------------- Interest and financing costs 172 321 -------------- -------------- Net Income $ 267 $ 1,385 ============== ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY CONTRACTING, INC. BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 437 Accounts receivable 11,653 Other material and supplies 386 Prepayments and other 53 -------------- Total current assets 12,529 -------------- Long-Lived Assets: Other 23,141 -------------- 23,141 Less: Accumulated provision for depreciation 2,578 -------------- Total long-lived assets 20,563 -------------- Total Assets $ 33,092 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY CONTRACTING, INC. BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current Liabilities: Accounts payable $ 6,410 Accounts payable to affiliated companies 9,258 Accrued taxes 831 -------------- Total current liabilities 16,499 -------------- Long-term Liabilities: Deferred taxes 184 Other 1,000 -------------- Total long-term liabilities 1,184 -------------- Stockholders' Equity: Common stock, $1 par value - 100 shares authorized and outstanding - Capital surplus, paid in 14,910 Retained earnings 499 -------------- Total stockholders' equity 15,409 -------------- Total Liabilities and Stockholders' Equity $ 33,092 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY CONTRACTING, INC. INCOME STATEMENT (Unaudited) Three Months Six Months Ended Ended June 30, June 30, 2001 2001 -------------- -------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ 14,499 $ 27,162 -------------- -------------- Operating Expenses: Operation 13,042 24,463 Maintenance 61 123 Depreciation 348 849 Taxes other than income taxes 98 295 -------------- -------------- Total operating expenses 13,549 25,730 -------------- -------------- Operating Income 950 1,432 -------------- -------------- Other Income 8 27 -------------- -------------- Interest and financing costs 182 393 -------------- -------------- Income before income taxes 776 1,066 -------------- -------------- Income Tax Expense: Federal and state income taxes, net 303 426 -------------- -------------- Net Income $ 473 $ 640 ============== ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. REEDS FERRY SUPPLY CO., INC. BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 7 Accounts receivable 52 -------------- Total current assets 59 -------------- Long-Lived Assets: Organization costs, net 258 -------------- Total long-lived assets 258 -------------- Total Assets $ 317 ============== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current Liabilities: Accounts payable $ 53 Accounts payable to affiliated companies 295 -------------- Total current liabilities 348 -------------- Stockholders' Equity: Common stock, $0 par value - authorized and outstanding 100 shares 4 Capital surplus, paid in 3 Retained deficit (38) -------------- Total stockholders' equity (31) -------------- Total Liabilities and Stockholders' Equity $ 317 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. REEDS FERRY SUPPLY CO., INC. INCOME STATEMENT (Unaudited) Three Months Six Months Ended Ended June 30, June 30, 2001 2001 -------------- -------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ 295 $ 562 -------------- -------------- Operating Expenses: Other 295 562 Amortization 5 10 -------------- -------------- Total operating expenses 300 572 -------------- -------------- Operating Loss (5) (10) -------------- -------------- Net Loss $ (5) $ (10) ============== ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. HEC/TOBYHANNA ENERGY PROJECT, INC. BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 2,420 Accounts receivable 417 -------------- Total current assets 2,837 -------------- Long-Lived Assets: Other 714 -------------- 714 Less: Accumulated provision for depreciation 57 -------------- 657 Contracts receivable 27,136 -------------- Total long-lived assets 27,793 -------------- Total Assets $ 30,630 ============== CAPITALIZATION AND LIABILITIES - ------------------------------------ Capitalization: Common stock, $1 par value - authorized and outstanding 100 shares $ - Retained earnings 189 -------------- Total common stockholder's equity 189 Long-term debt 26,446 -------------- Total capitalization 26,635 -------------- Current Liabilities: Accounts payable to affiliated companies 2,880 Accrued interest 756 Accrued taxes 1 -------------- Total current liabilities 3,637 -------------- Long-term Liabilities: Other 358 -------------- Total long-term liabilities 358 -------------- Total Capitalization and Liabilities $ 30,630 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. HEC/TOBYHANNA ENERGY PROJECT, INC. INCOME STATEMENT (Unaudited) Three Months Six Months Ended Ended June 30, June 30, 2001 2001 -------------- -------------- (Thousands (Thousands of Dollars) of Dollars) Other Income $ 514 $ 1,058 -------------- -------------- Interest and Financing Costs 512 1,025 -------------- -------------- Income Tax Expense 22 27 -------------- -------------- Net (Loss)/Income $ (20) $ 6 ============== ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. YANKEE ENERGY SERVICES COMPANY BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) ASSETS - ------ Other Property and Investments: Nonutility property, at cost $ 1,045 Investment in subsidiary company, at equity 2 -------------- Total other property and investments 1,047 -------------- Current Assets: Cash 299 Accounts receivable 4,801 Accounts receivable from affiliated companies 1,709 Taxes receivable 2,153 -------------- Total current assets 8,962 -------------- Deferred Charges: Accumulated deferred income taxes 1,562 Goodwill 416 -------------- Total deferred charges 1,978 -------------- Total Assets $ 11,987 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. YANKEE ENERGY SERVICES COMPANY BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current Liabilities: Notes payable to affiliated companies $ 5,033 Accounts payable to affiliated companies 240 Other 158 -------------- Total current liablilities 5,431 -------------- Deferred Credits: Other 437 -------------- Total deferred credits 437 -------------- Stockholders' Equity: Common stock, $0 par value - 10,000 shares authorized and 200 shares outstanding 1 Capital surplus, paid in 7,881 Retained deficit (1,763) -------------- Total stockholders' equity 6,119 -------------- Total Liabilities and Stockholders' Equity $ 11,987 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. YANKEE ENERGY SERVICES COMPANY INCOME STATEMENT (Unaudited) Three Months Six Months Ended Ended June 30, June 30, 2001 2001 -------------- -------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ 31 $ 149 -------------- -------------- Operating Expenses: Other 402 603 Depreciation 41 152 Amortization 1 11 Federal and state income taxes (375) (375) -------------- -------------- Total operating expenses 69 391 -------------- -------------- Operating Loss (38) (242) -------------- -------------- Interest and financing costs 126 334 -------------- -------------- Net Loss $ (164) $ (576) ============== ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. E.S. BOULOS COMPANY BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 1,073 Accounts receivable 11,679 Materials and supplies, at average cost 107 Prepayments and other 988 -------------- Total current assets 13,847 -------------- Other Investments: Other investments, at cost 16 -------------- Total other investments 16 -------------- Deferred Charges: Other 5,614 -------------- Total deferred charges 5,614 -------------- Long-Lived Assets: Other 425 -------------- 425 Less: Accumulated provision for depreciation 35 -------------- Total long-lived assets 390 -------------- Total Assets $ 19,867 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. E.S. BOULOS COMPANY BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) LIABILITIES AND STOCKHOLDER'S EQUITY - ------------------------------------ Current Liabilities: Accounts payable $ 5,307 Accrued taxes 793 Other 3,466 -------------- Total current liabilities 9,566 -------------- Deferred Credits: Other 1,289 -------------- Total deferred credits 1,289 -------------- Stockholder's Equity: Common stock, $1 par value - 100 shares authorized and outstanding - Capital surplus, paid in 7,539 Retained earnings 1,473 -------------- Total stockholder's equity 9,012 -------------- Total Liabilities and Stockholder's Equity $ 19,867 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. E.S. BOULOS COMPANY INCOME STATEMENT (Unaudited) Three Months Six Month Ended Ended June 30, June 30, 2001 2001 -------------- ----------- (Thousands (Thousand of Dollars) of Dollar Operating Revenues $ 11,782 $ 18,732 -------------- ----------- Operating Expenses: Operation 10,729 17,332 Depreciation 88 160 Federal and state income taxes 793 793 -------------- ----------- Total operating expenses 11,610 18,285 -------------- ----------- Operating Income 172 447 -------------- ----------- Other Income 757 1,026 -------------- ----------- Income before income taxes 929 1,473 -------------- ----------- Income Tax Expense: Federal and state income taxes, net - - -------------- ----------- Net Income $ 929 $ 1,473 ============== =========== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. NGS MECHANICAL COMPANY BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Accounts receivable $ 10 -------------- Total current assets 10 -------------- Total Assets $ 10 ============== LIABILITIES AND STOCKHOLDER'S EQUITY - ------------------------------------ Current Liabilities: Accounts payable to affiliated companies $ 1 -------------- Total current liabilities 1 -------------- Stockholder's Equity: Common stock, $0 par value - authorized and outstanding 100 shares - Capital surplus, paid in 10 Retained deficit (1) -------------- Total stockholder's equity 9 -------------- Total Liabilities and Stockholder's Equity $ 10 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. NGS MECHANICAL COMPANY INCOME STATEMENT (Unaudited) Three Months Six Months Ended Ended June 30, June 30, 2001 2001 -------------- ------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ - $ - -------------- ------------- Operating Expenses: Other - 1 -------------- ------------- Total operating expenses - 1 -------------- ------------- Operating Loss Before Income Taxes - (1) -------------- ------------- Income Tax Expense: Federal and state income taxes, net - - -------------- ------------- Net Loss $ - $ (1) ============== ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. NORTHEAST UTILITIES (PARENT) BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) ASSETS - ------ Other Property and Investments: Investments in subsidiary companies, at equity........ $ 2,323,712 Investments in transmission companies, at equity...... 15,026 Other, at cost........................................ 14 -------------- 2,338,752 -------------- Current Assets: Cash.................................................. 18,973 Notes receivable from affiliated companies............ 204,800 Notes and accounts receivable......................... 591 Accounts receivable from affiliated companies......... 2,060 Taxes receivable...................................... 20,062 Prepayments........................................... 983 -------------- 247,469 -------------- Deferred Charges: Unamortized debt expense.............................. 815 Other................................................. 591 -------------- 1,406 -------------- Total Assets...................................... $ 2,587,627 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. NORTHEAST UTILITIES (PARENT) BALANCE SHEET (Unaudited) June 30, 2001 -------------- (Thousands of Dollars) CAPITALIZATION AND LIABILITIES - ------------------------------ Capitalization: Common shares, $5.00 par value - Authorized 225,000,000 shares; 148,888,790 shares issued and 133,864,193 shares outstanding...................... $ 744,444 Capital surplus, paid in............................. 902,562 Deferred contribution plan - employee stock ownership plan...................................... (108,122) Retained earnings.................................... 610,248 Accumulated other comprehensive income............... (26,470) -------------- Total common shareholders' equity.................. 2,122,662 Long-term debt....................................... 374,000 -------------- Total capitalization.......................... 2,496,662 -------------- Current Liabilities: Accounts payable to affiliated companies............. 18 Long-term debt - current portion..................... 21,000 Accrued taxes........................................ 44,996 Accrued interest..................................... 2,769 Other................................................ 17,326 -------------- 86,109 -------------- Accumulated deferred income taxes...................... 4,856 -------------- 4,856 -------------- Total Capitalization and Liabilities............. $ 2,587,627 ============== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. NORTHEAST UTILITIES (PARENT) STATEMENT OF INCOME (Unaudited)
Three Months Six Months Ended Ended June 30, June 30, 2001 2001 -------------- -------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues.................................. $ - $ - -------------- -------------- Operating Expenses: Operation expense................................. 1,588 3,280 Federal and state income taxes.................... 101 (7,823) Taxes other than income taxes..................... 13 35 -------------- -------------- Total operating expenses..................... 1,702 (4,508) -------------- -------------- Operating (Loss)/Income............................. (1,702) 4,508 -------------- -------------- Other Income/(Loss): Equity in earnings of subsidiaries................ 37,065 101,922 Equity in earnings of transmission companies...... 615 1,211 Gain related to Millstone sale.................... - 146,844 Loss on share repurchase contracts................ 8,049 (35,394) Other, net........................................ 2,416 4,162 Income taxes...................................... 7,203 (45,304) -------------- -------------- Other income, net............................ 55,348 173,441 -------------- -------------- Income before interest charges............... 53,646 177,949 -------------- -------------- Interest Charges: Interest on long-term debt........................ 7,241 11,735 Other interest.................................... (327) 7,319 -------------- -------------- Interest charges............................ 6,914 19,054 -------------- -------------- Net Income for Common Shares........................ $ 46,732 $ 158,895 ============== ============== Basic and Diluted Earnings per Common Share......... $ 0.35 $ 1.14 ============== ============== Basic Common Shares Outstanding (average)........... 133,908,739 138,910,719 ============== ============== Diluted Common Shares Outstanding (average)......... 134,149,873 139,256,968 ============== ==============
Note: In the opinion of the Company, all adjustments necessary for a fair presentation of the results of operations for the period shown have been made. See accompanying notes to financial statements. Northeast Utilities Select Energy, Inc. Northeast Generation Services Company and Subsidiaries E.S. Boulos Company NGS Mechanical, Inc. Select Energy Contracting, Inc. Reeds Ferry Supply Co., Inc. HEC/Tobyhanna Energy Project, Inc. HEC/CJTS Energy Center, LLC ERI/HEC EFA-Med, LLC Yankee Energy Services Company Acumentrics Corporation Notes to Financial Statements (Unaudited) 1. About Northeast Utilities Northeast Utilities (NU) is the parent company of the Northeast Utilities system (NU system). The NU system's regulated utilities furnish franchised retail electric service in Connecticut, New Hampshire and western Massachusetts through three wholly owned subsidiaries: The Connecticut Light and Power Company (CL&P), Public Service Company of New Hampshire (PSNH) and Western Massachusetts Electric Company (WMECO). Another wholly owned subsidiary, North Atlantic Energy Corporation, sells all of its entitlement to the capacity and output of the Seabrook Station nuclear unit (Seabrook) to PSNH under the terms of two life-of-unit, full cost recovery contracts. A fifth wholly owned subsidiary, Holyoke Water Power Company, also is engaged in the production and distribution of electric power. Several wholly owned subsidiaries of NU provide support services for the NU system companies and, in some cases, for other New England utilities. Northeast Utilities Service Company provides centralized accounting, administrative, engineering, financial, information resources, legal, operational, planning, purchasing, and other services to the NU system companies. North Atlantic Energy Service Corporation has operational responsibility for Seabrook. Three other subsidiaries construct, acquire or lease some of the property and facilities used by the NU system companies. NU Enterprises, Inc. (NUEI) is a wholly owned subsidiary of NU and acts as the holding company for certain of NU's competitive energy subsidiaries. Northeast Generation Company (NGC) was formed to acquire and manage generation facilities. Select Energy, Inc. (Select Energy), Northeast Generation Services Company and its subsidiaries (NGS), Select Energy Services, Inc., (formerly HEC Inc.) and its subsidiaries (Select Energy Services), and Mode 1 Communications, Inc., engage in a variety of energy-related and telecommunications activities, as applicable, primarily in the competitive energy retail and wholesale commodity, marketing and services fields. E.S. Boulos Company (Boulos) and NGS Mechanical, Inc. (NGS Mechanical) are wholly owned subsidiaries of NGS. Select Energy Contracting, Inc. (Select Energy Contracting), Reeds Ferry Supply Co., Inc. (Reeds Ferry), HEC/Tobyhanna Energy Project, Inc., (HEC/Tobyhanna), and HEC/CJTS Energy Center, LLC (HEC/CJTS) are wholly owned subsidiaries of Select Energy Services. Another company, ERI/HEC EFA-Med, LLC (ERI/HEC), is 50 percent owned by Select Energy Services. Yankee Energy System, Inc. maintains certain wholly owned subsidiaries including Yankee Energy Services Company (YESCO). On September 26, 2000, NUEI invested $10 million in Acumentrics Corporation (Acumentrics) in return for a 5 percent ownership share of that company. Select Energy, NGS, Boulos, NGS Mechanical, Select Energy Contracting, Reeds Ferry, HEC/Tobyhanna, HEC/CJTS, ERI/HEC, YESCO, and Acumentrics are "energy- related companies" under Rule 58. 2. About Select Energy Select Energy provides both wholesale and retail energy services. Specifically, Select Energy participates in open-access retail electricity markets in New England, New York and the Mid-Atlantic regions. Select Energy markets and sells electricity, natural gas, oil and energy-related products and services. Select Energy is a licensed retail electricity supplier in the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, and Rhode Island. Select Energy is a registered gas marketer with local gas distribution companies in the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, and Rhode Island. Beginning in January 2000, Select Energy's contract with NGC, to purchase 1,289 megawatts (MW) of capacity and energy significantly reduced the load-following risk and allowed Select Energy to better manage its portfolio profitability. On January 1, 2000, Select Energy began serving one-half of CL&P's standard offer requirement for a 4-year period. Select Energy's obligation to service this load requirement was approximately 2,000 MW beginning in July 2000, when 100 percent of CL&P's customers were able to choose their electric supplier. In addition, beginning in January 2000, Select Energy assumed responsibility for serving 30 market based wholesale contracts, totaling approximately 500 MW, throughout New England with electric energy supply that was previously provided by CL&P and WMECO. 3. About NGS NGS was formed to provide management, operation and maintenance services to the electric generation market, as well as to large industrial customers in the Northeast. NGS also provides consulting services which include engineering services, construction management, permitting, and compliance management. 4. About Boulos On January 19, 2001, NGS completed the acquisition of Boulos, an electrical construction company which specializes in high voltage electrical construction and maintenance in Maine, Massachusetts and New Hampshire. Boulos is wholly owned by NGS. 5. About NGS Mechanical In January 2001, NGS formed a new subsidiary, NGS Mechanical, to provide mechanical services initially in the New England states. NGS Mechanical is wholly owned by NGS. 6. About Select Energy Contracting Select Energy Contracting, formerly known as HEC International Corporation, designs, manages, and directs the construction of, and/or installation of mechanical, water and electrical systems, energy and other resource consuming equipment. 7. About Reeds Ferry Reeds Ferry was acquired by Select Energy Services in August 1999 as an equipment wholesaler to purchase equipment on behalf of Select Energy Contracting. 8. About HEC/Tobyhanna Effective September 30, 1999, HEC/Tobyhanna was established as a special purpose entity to manage the assets of an Energy Savings Performance Contract at the Tobyhanna Army Depot. 9. About HEC/CJTS HEC/CJTS was formed on March 2, 2001, as a special purpose entity to facilitate the financing of Select Energy Services' construction of the Connecticut Juvenile Training School in Middletown, Connecticut. HEC/CJTS is wholly owned by Select Energy Services. 10. About ERI/HEC ERI/HEC was established on September 30, 2000, by Select Energy Services and ERI Services, Inc. to enter into an indefinite delivery/indefinite quantity contract with the United States Navy. ERI/HEC is 50 percent owned by Select Energy Services. 11. About YESCO YESCO provides a wide range of energy-related services for its customers. The YESCO controls division provides comprehensive building automation with engineering, installation and maintenance of building control systems. 12. About Acumentrics On September 26, 2000, NUEI invested $10 million in Acumentrics in return for a 5 percent ownership share of that company. Acumentrics is a privately owned producer of advanced power generation and power protection technologies applicable to homes, telecommunications, commercial businesses, industrial facilities, and the auto industry. 13. Public Utility Regulation NU is registered with the Securities and Exchange Commission (SEC) as a holding company under the Public Utility Holding Company Act of 1935 (1935 Act), and the NU system is subject to the provisions of the 1935 Act. Arrangements among the NU system companies, outside agencies and other utilities covering interconnections, interchange of electric power and sales of utility property are subject to regulation by the Federal Energy Regulatory Commission (FERC) and/or the SEC. The operating subsidiaries are subject to further regulation for rates, accounting and other matters by the FERC and/or applicable state regulatory commissions. 14. Presentation The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 15. Market Risk And Risk Management Instruments Select Energy provides both firm requirement energy services to its customers and performs energy trading and marketing activities. Select Energy manages its exposure to risk from existing contractual commitments and provides risk management services to its customers through forward contracts, futures, over-the-counter swap agreements, and options (commodity derivatives). Select Energy has utilized the sensitivity analysis methodology to disclose the quantitative information for the commodity price risks. Sensitivity analysis provides a presentation of the potential loss of future earnings, fair values or cash flows from market risk-sensitive instruments over a selected time period due to one or more hypothetical changes in commodity prices, or other similar price changes. Commodity Price Risk - Trading Activities: As a market participant in the Northeast area of the United States, Select Energy conducts commodity-trading activities in electricity and its related products, natural gas and oil and therefore experiences net open positions. Select Energy manages these open positions with strict policies which limit its exposure to market risk and require daily reporting to management of potential financial exposure. Commodity derivatives utilized for trading purposes are accounted for using the mark-to-market method, under Emerging Issues Task Force Issue No. 98-10, "Accounting for Energy Trading and Risk Management Activities." Under this methodology, these instruments are adjusted to market value, and the unrealized gains and losses are recognized in income in the current period. The mark-to- market position at June 30, 2001, was a positive $68 million. Under sensitivity analysis, the fair value of the portfolio is a function of the underlying commodity, contract prices and market prices represented by each derivative commodity contract. For swaps, forward contracts and options, market value reflects management's best estimates considering over-the-counter quotations, time value and volatility factors of the underlying commitments. Exchange-traded futures and options are recorded at market, based on closing exchange prices. As of June 30, 2001, Select Energy has calculated the market price resulting from a 10 percent unfavorable change in forward market prices. That 10 percent change would result in approximately a $4 million decline in the fair value of the Select Energy trading portfolio. In the normal course of business, Select Energy also faces risks that are either nonfinancial or nonquantifiable. Such risks principally include credit risk, which is not reflected in the sensitivity analysis above. Commodity Price Risk - Nontrading Activities: Select Energy utilizes derivative financial and commodity instruments (derivatives), including futures and forward contracts, to reduce market risk associated with fluctuations in the price of electricity, natural gas and oil sold under firm commitments with certain customers. Select Energy also utilizes derivatives, including price swap agreements, call and put option contracts, and futures and forward contracts, to manage the market risk associated with a portion of its anticipated supply requirements. These derivative instruments have been designated as cash flow hedging instruments. When conducting sensitivity analysis of the change in the fair value of Select Energy's electricity, natural gas and oil nontrading portfolio, which would result from a hypothetical change in the future market price of electricity, natural gas and oil, the fair value of the contracts are determined from models which take into account estimated future market prices of electricity, natural gas and oil, the volatility of the market prices in each period, as well as the time value factors of the underlying commitments. In most instances, market prices and volatility are determined from quoted prices on the futures exchange. Select Energy has determined a hypothetical change in the fair value for its nontrading electricity, natural gas and oil contracts, assuming a 10 percent unfavorable change in forward market prices. As of June 30, 2001, an unfavorable 10 percent change in forward market price would have resulted in a decrease in fair value of approximately $17 million. The impact of a change in electricity, natural gas and oil prices on Select Energy's nontrading contracts on June 30, 2001, is not necessarily representative of the results that will be realized when these contracts are physically delivered. Select Energy also maintains natural gas service agreements with certain customers to supply gas at fixed prices for terms extending through 2003. Select Energy has hedged its gas supply risk under these agreements through NYMEX contracts. Under these contracts, the purchase price of a specified quantity of gas is effectively fixed over the term of the gas service agreements, which extend through 2003. As of June 30, 2001, the NYMEX contracts had a notional value of $75.2 million and a negative mark-to-market position of $17.2 million. Derivative Cash Flow Hedge Accounting: Derivative instruments recorded which were effective cash flow hedges resulted in an increase in other comprehensive income of $14.1 million upon the adoption of Statement of Financial Accounting Standards No. 133, "Accounting For Derivative Instruments and Hedging Activities," as amended. During the first six months of 2001, $13.4 million was reclassified from other comprehensive income upon the conclusion of these hedged transactions and recognized in earnings. An additional $1 million was recognized in earnings for those derivatives that were determined to be ineffective. Also, during the second quarter of 2001, new cash flow hedge transactions were entered into which hedge cash flows through 2005. As a result of these new transactions and market value changes since January 1, 2001, other comprehensive income decreased by $28.6 million. Accumulated other comprehensive income at June 30, 2001 was a negative $27 million (decrease to equity) relating to hedged transactions and it is estimated that $19.8 million will be reclassified as a charge to earnings within the next twelve months. Cash flows from the hedge contracts are reported in the same category1 as cash flows from the hedged assets. These estimates do not include certain long-term energy and option-type contracts which management believes represent "normal purchases and sales." The accounting for these types of contracts has been cleared by the Financial Accounting Standards Board (FASB) in the second quarter of 2001 and will be implemented in the third quarter of 2001. Management does not believe that the recording of these transactions in accordance with the aforementioned FASB guidelines will have a material effect on the financial statements. 16. Special Deposits Special deposits include cash collateral posted in connection with various power purchase and sales agreements. QUARTERLY REPORT OF SELECT ENERGY, INC. SIGNATURE CLAUSE Pursuant to the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations of the Securities and Exchange Commission issued thereunder, the undersigned company has duly caused this report to be signed on its behalf by the undersigned officer thereunto duly authorized. NORTHEAST UTILITIES ----------------------------- (Registered Holding Company) By: /s/ John J. Roman ----------------------------- (Signature of Signing Officer) John J. Roman ----------------------------- Vice President and Controller ----------------------------- Date: August 24, 2001 ----------------------------- -----END PRIVACY-ENHANCED MESSAGE-----