<PAGE> 1
File No. 69-249
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-3A-2
For the Year Ended December 31, 1994
STATEMENT BY HOLDING COMPANY CLAIMING EXEMPTION UNDER RULE U-3A-2 FROM
THE PROVISIONS OF THE PUBLIC UTILITY HOLDING
COMPANY ACT OF 1935
To Be Filed Annually Prior to March 1
BAY STATE GAS COMPANY
hereby files with the Securities and Exchange Commission, pursuant to Rule 2,
its statement claiming exemption as a holding company from the provisions of
the Public Utility Holding Company Act of 1935 (the "Act"), and submits the
following information:
1. Name, State of organization, location and nature of business of
claimant and every subsidiary thereof.
Bay State Gas Company ("Bay State"), a Massachusetts corporation with its
principal executive offices in Westborough, Massachusetts, is a gas utility
company and a holding company as defined in the Act.
Northern Utilities, Inc. ("Northern"), a New Hampshire corporation with offices
in Portsmouth, New Hampshire, is a wholly owned subsidiary of Bay State and is
also a gas utility company as defined in the Act. Granite State Gas
Transmission, Inc. ("Granite"), a New Hampshire corporation with offices in
Portsmouth, New Hampshire, is a wholly owned subsidiary of Bay State and is an
interstate gas transmission company, but is not a gas utility company as
defined in the Act. Bay State Energy Development, Inc. ("Energy Development"),
a Massachusetts corporation with offices in Westborough, Massachusetts, is a
wholly owned subsidiary of Granite and is not a gas utility as defined in the
Act. Natural Gas Development Corp. ("NGDC"), a Maine corporation with offices
in Westborough, Massachusetts, is a wholly owned subsidiary of Granite and is
not a gas utility as defined in the Act.
2. A brief description of the properties of claimant and each of its
subsidiary public utility companies used for the generation,
transmission, and distribution of electric energy for sale, or for the
production, transmission, and distribution of natural or manufactured
gas, indicating the location of principal generating plants, and
electric and gas distribution facilities, including all such properties
which are outside the State in which claimant and its subsidiaries are
organized and all transmission or pipe lines which deliver or receive
electric energy or gas at the borders of such State.
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BAY STATE. The Massachusetts service area of Bay State covers approximately
1,344 square miles in Massachusetts and, at December 31, 1990, included a
population of approximately 1,250,000. At December 31, 1994, Bay State
furnished gas service to a total of approximately 249,000 residential,
commercial, industrial and interruptible customers and has franchise rights in
61 communities within Massachusetts.
Bay State's division serving an area covering approximately 839 square miles
in southeastern Massachusetts supplies gas service to the cities of Attleboro,
Brockton and Taunton and 37 surrounding towns (the "Brockton Division"). Bay
State's division servin g an area covering approximately 415 square miles in
western Massachusetts supplies gas service to the cities of Chicopee,
Northampton and Springfield and 14 neighboring towns (the "Springfield
Division"). Bay State's division serving an area covering appr oximately 90
square miles in northeastern Massachusetts supplies gas service to the city of
Lawrence and 3 neighboring towns (the "Lawrence Division"). None of Bay
State's distribution facilities are outside of Massachusetts.
Bay State's Massachusetts operations have made sales for resale to other gas
utilities and marketers of gas, some of which operate in states other than
Massachusetts. Such sales out of state were made pursuant to the provisions of
Section 2.68 of the General Policy and Interpretation of the Natural Gas Act
of the Federal Energy Regulatory Commission. Revenues from such off-system
sales out of state for the twelve months ended December 31, 1994 were
$7,218,000. Total gas sales for Bay State to all customers in Massachusetts
were $346,362,000. Total transporation revenues for Bay State were $2,630,000.
These revenues were generated entirely from serving Massachusetts customers.
The gas distributed by Bay State in Massachusetts is principally pipeline
natural gas purchased under a portfolio of domestic gas supply contracts and
transported under delivery contracts to Bay State's city gates through the
Algonquin Gas Transmission Company ("Algonquin") and Tennessee Gas Pipeline
Company ("Tennessee") pipelines. Bay State distributes some Canadian pipeline
natural gas purchased from Granite.
Bay State produces liquid propane (LP) air gas from LP purchased from several
suppliers. The LP air gas is produced by Bay State's seven propane air gas
plants, all located in the Commonwealth of Massachusetts, which have a combined
storage capacity of 320,249 MMBtu of natural gas equivalent and a combined
rated daily vaporization capability of 118,194 MMBtu. A list of Bay State's
propane air gas plants, indicating the location and capacity of each plant, is
attached hereto as Schedule A.
The Springfield Division has a leased liquefied natural gas (LNG) facility
which consists of liquefaction equipment capable of liquefying 10,000 MMBtu of
natural gas per day, a 1,020,000 MMBtu storage tank and vaporization equipment
capable of vaporizing 55,000 MMBtu per day. The Brockton Division has a leased
LNG facility with a storage capacity of 800,000 MMBtu and a rated daily
vaporization capability of 50,000 MMBtu. Both the Brockton and Lawrence
Divisions have LNG satellite facilities with storage cap acities of 8,000 and
12,800 MMBtu, and daily vaporization capability of 12,000 and 19,200 MMBtu,
respectively. A list of Bay State's LNG facilities, indicating the location
and capacity of each facility, is attached hereto as Schedule B.
Bay State does not own any underground storage facilities; rather, it has
storage contracts with Algonquin, Tennessee, Penn York Energy Corporation and
Consolidated Gas Transmission Corporation.
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NORTHERN. Northern, through its New Hampshire and Maine divisions, is engaged
in the distribution and sale of natural gas to residential, commercial,
industrial and interruptible customers in New Hampshire and Maine.
The service area of Northern covers approximately 808 square miles in New
Hampshire and Maine and, at December 31, 1990, included a population of
approximately 450,000. At December 31, 1994, Northern furnished gas service to
a total of approximately 41,000 customers in 35 communities.
Northern's division serving an area covering approximately 314 square miles in
southeastern New Hampshire supplies gas service to the city of Portsmouth and
20 surrounding cities and towns (the "New Hampshire Division"). Northern's
division serving an area covering approximately 493 square miles in southern
Maine supplies gas service to the cities of Portland, Lewiston and Auburn and
11 neighboring cities and towns (the "Maine Division").
The gas distributed by Northern is principally pipeline natural gas purchased
under a portfolio of gas supply contracts and transported under delivery
contracts to Northern's city gates primarily through the Tennessee pipeline and
Granite.
The New Hampshire Division has one LP air gas plant with a storage capacity of
9,357 MMBtu of natural gas equivalent and rated daily vaporization capability
of 4,080 MMBtu. The Maine Division has one LP air gas plant with a storage
capacity of 16,376 MMBt u of natural gas equivalent and a rated daily
vaporization capability of 10,000 MMBtu (see Schedule A).
The Maine Division has one LNG facility with a storage capability of 13,750
MMBtu and a rated daily vaporization capability of 14,000 MMBtu (see Schedule
B).
GRANITE. Granite is engaged in the transmission of natural gas for Bay State's
Massachusetts operations and Northern's operations in Maine and New Hampshire.
Granite obtains its firm supplies of pipeline natural gas primarily from Shell
Canada Lim ited and Direct Energy Marketing, Limited. Natural gas imported
from Canada is transported via the Iroquois Gas Transmission System and by a
pipeline leased by Granite from the Portland Pipeline Corporation ("PPC").
Granite receives natural gas at its tak e station located in Massachusetts, at
the US/Canadian border where gas enters the PPC pipeline and at off-system
receipt points in Massachusetts and New Hampshire.
Granite is an interstate natural gas pipeline company within the meaning of the
Federal Natural Gas Act of 1938 and is subject to the jurisdiction of the
Federal Energy Regulatory Commission, which has granted certificates of public
convenience and necessity to Granite authorizing the construction and
operation of its facilities. With respect to certain of its activities,
Granite is also subject to the jurisdiction of the New Hampshire Public
Utilities Commission.
Bay State believes there are two bases upon which it is exempt from the Act
under Section 3 (a)(2) thereof. First, Bay State itself is predominantly a
public utility company whose operations as such do not extend beyond
Massachusetts. Second, Bay State's entire operation as a holding company
system only extends to states "contiguous" to Massachusetts: New Hampshire and
Maine. Maine and Massachusetts are "contiguous" under the alternative
definition for that word, "nearby".
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3. The following information for the last calendar year with respect to
claimant and each of its subsidiary public utility companies:
(a) Number of MCF of natural or manufactured gas distributed at
retail.
(b) Number of MCF of natural or manufactured gas distributed at
retail outside the state in which each such company is organized.
(c) Number of MCF of natural or manufactured gas sold at wholesale
outside the state in which each such company is organized, or
at the state line.
(d) Number of MCF of natural or manufactured gas purchased outside
the state in which each such company is organized, or at the
state line.
For Twelve Months Ended December 31, 1994
-----------------------------------------
<TABLE>
<CAPTION>
Bay State Massachusetts
- -----------------------
<S> <C>
(a) MCF of gas distributed at retail 48,849,000
(b) MCF of gas distributed at retail outside of Massachusetts -0-
(c) MCF of gas sold at wholesale outside Massachusetts, or at the
Massachusetts state line 1,865,000
(d) MCF of gas purchased outside Massachusetts, or at the
Massachusetts state line 50,712,000
</TABLE>
<TABLE>
<CAPTION>
Northern
- --------
<S> <C>
(a) MCF of gas distributed at retail 11,865,000
(b) MCF of gas distributed at retail outside of New Hampshire 5,045,000
(c) MCF of gas sold at wholesale outside New Hampshire,
or at the New Hampshire state line 184,000
(d) MCF of gas purchased outside New Hampshire, or at the
New Hampshire state line 12,291,000
</TABLE>
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<TABLE>
<CAPTION>
Granite State
- -------------
<S> <C>
(a) MCF of gas distributed at retail -0-
(b) MCF of gas distributed at retail outside of New Hampshire -0-
(c) MCF of gas sold at wholesale outside New Hampshire,
or at New Hampshire state line 21,445,000
(d) MCF of gas purchased outside New Hampshire, or at the
New Hampshire state line 22,800,000
</TABLE>
4. The following information for the reporting period with respect to
claimant and each interest it holds directly or indirectly in an EWG
or a foreign utility company, stating monetary amounts in United States
dollars:
(a) Name, location, business address and description of the facilities
used by the EWG or foreign utility company for the generation,
transmission and distribution of electric energy for sale or for
the distribution at retail of natural or manufactured gas.
(b) Name of each system company that holds an interest in such EWG or
foreign utility company; and description of the interest held.
(c) Type and amount of capital invested, directly or indirectly, by the
holding company claiming exemption; any direct or indirect
guarantee of the security of the EWG or foreign utility company by
the holding company claiming exemption; and any debt or other
financial obligation for which there is recourse, directly or
indirectly, to the holding company claiming exemption or another
system company, other than the EWG or foreign utility company.
(d) Capitalization and earnings of the EWG or foreign utility company
during the reporting period.
(e) Identify any service, sales or construction contract(s) between the
EWG or foreign utility company and a system company, and describe
the services to be rendered or goods sold and fees or revenues
under such agreement(s).
Items (a through e) are not applicable to registrant because it does not hold
directly or indirectly, any interest in an Exempt Wholesale Generator (EWG) nor
in a foreign utility company. Also, registrant has not included Exhibit C, an
organizational chart , as it has no interest in an EWG or a foreign utility.
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EXHIBIT A
A consolidating statement of income and surplus of the claimant and its
subsidiary companies for the last calendar year, together with a consolidating
balance sheet of claimant and its subsidiary companies as of the close of such
calendar year.
The consolidating statements of income and consolidating balance sheets are
attached hereto as Exhibit 99.1
The above named claimant has caused this statement to be duly executed on its
behalf by its authorized officer on this 27th day of February, 1995.
BAY STATE GAS COMPANY
--------------------------
(Name of Claimant)
By /s/ Thomas W. Sherman
--------------------------
Executive Vice President, Treasurer and Chief
Financial Officer
Corporate seal
By /s/ Stephen J. Curran
--------------------------
Controller
Attest:
/s/ William D. Mac Gillivray
- ----------------------------
Assistant Clerk
Name, title and address of officer to whom notices and correspondence
concerning this statement should be addressed:
Thomas W. Sherman, Executive Vice President, Treasurer and Chief Financial
Officer
Bay State Gas Company
300 Friberg Parkway
Westborough, Massachusetts 01581-5039
EXHIBIT B. FINANCIAL DATA SCHEDULE
The financial data schedule is attached hereto as Exhibit 27.
EXHIBIT C
As discussed under item 4, Exhibit C is not applicable to the registrant as it
has no interest in an EWG or a foreign utility.
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SCHEDULE A
BAY STATE GAS COMPANY
PROPANE AIR GAS FACILITIES
<TABLE>
<CAPTION>
Storage Vaporization
Location Capacity Capability
-------- -------- ------------
(MMBtu) (MMBtu/day)
<S> <C> <C>
BAY STATE:
Brockton 79,592 30,000
Taunton 32,427 11,980
West Medway 20,427 5,273
West Springfield 79,265 24,699
East Longmeadow 59,450 13,414
Northampton 24,544 11,740
Lawrence 24,544 21,088
------- -------
Total Bay State 320,249 118,194
------- -------
NORTHERN:
Portsmouth 9,357 4,080
Portland 16,376 10,000
------- -------
Total Northern 25,733 14,080
------- -------
Grand Total 345,982 132,274
======= =======
</TABLE>
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SCHEDULE B
BAY STATE GAS COMPANY
LNG FACILITIES
<TABLE>
<CAPTION>
Storage Vaporization Liquefaction
Location Capacity Capability Capability
-------- -------- ---------- ----------
MMBtu MMBtu/day MMBtu/day
<S> <C> <C> <C>
BAY STATE:
Ludlow 1,020,000 55,000 10,000
Easton 800,000 50,000 0
Marshfield 8,000 12,000 0
Lawrence 12,800 19,200 0
--------- -------- -------
Total Bay State 1,840,800 136,200 10,000
--------- -------- -------
NORTHERN:
Lewiston 13,750 14,000 0
Portable 0 3,600 0
--------- -------- -------
Total Northern 13,750 17,600 0
--------- -------- -------
Grand Total 1,854,550 153,800 10,000
========= ======== =======
</TABLE>
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EXHIBIT 99.1
BAY STATE GAS COMPANY
<TABLE>
CONSOLIDATING STATEMENT OF INCOME AND RETAINED EARNINGS
For the twelve months ended December 31, 1994 with comparative amounts for 1993
(Unaudited, in thousands)
<CAPTION>
Granite Consolidated 1994 1993
Bay State Northern State Gas Reclassifi- Bay State Gas Bay State Gas
Gas Utilities, Trans., Inc cations and Company Company
Company Inc. Consolidated Eliminations Consolidated Consolidated
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gas revenues $353,580 $69,343 $59,785 $(62,609) $420,099 $405,123
Cost of gas sold 224,749 44,367 59,564 (68,231) 260,449 247,406
- ---------------------------------------------------------------------------------------------------------------------------------
Net gas revenues 128,831 24,976 221 5,622 159,650 157,717
Transportation revenues 2,630 264 5,637 (5,622) 2,909 1,085
Other operating revenues 7,073 603 0 0 7,676 7,366
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Total net operating revenues 138,534 25,843 5,858 0 170,235 166,168
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Operating expenses:
Operations 58,927 11,335 4,763 0 75,025 77,157
Maintenance 7,210 884 230 0 8,324 7,955
Depreciation and amortization 19,904 3,134 743 0 23,781 22,268
Federal and state taxes on income 12,147 2,089 (51) 0 14,185 13,996
Other taxes, principally property
taxes 8,651 2,197 357 0 11,205 10,193
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Total operating expenses 106,839 19,639 6,042 0 132,520 131,569
- ---------------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 31,695 6,204 (184) 0 37,715 34,599
Other income (net of taxes) 4,222 (100) 254 (3,764) 612 172
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Income (loss) before interest expense 35,917 6,104 70 (3,764) 38,327 34,771
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Interest expense:
Long-term debt 12,198 2,334 12 0 14,544 12,987
Other 555 35 245 (216) 619 515
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Total interest expense 12,753 2,369 257 (216) 15,163 13,502
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Net income (loss) 23,164 3,735 (187) (3,548) 23,164 21,269
Retained earnings, beginning of
period 73,539 28,022 358 (28,380) 73,539 70,636
Dividends declared (19,417) 0 0 0 (19,417) (!8,366)
Unrestriction of common stock 190 0 0 0 190 0
- ---------------------------------------------------------------------------------------------------------------------------------
Retained earnings, end of period $ 77,476 $31,757 $ 171 $(31,928) $ 77,476 $ 73,539
=================================================================================================================================
</TABLE>
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<TABLE>
CONSOLIDATING BALANCE SHEET
At December 31, 1994 with comparative amounts for 1993
(Unaudited, in thousands)
<CAPTION>
Granite Consolidated 1994 1993
Bay State Northern State Gas Reclassifi- Bay State Gas Bay State Gas
Gas Utilities, Trans., Inc. cations and Company Company
Company Inc. Consolidated Eliminations Consolidated Consolidated
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Utility plant, at cost $532,595 $ 96,456 $13,104 $ 0 $642,155 $590,471
Accumulated depreciation & amortization 141,830 18,676 6,472 0 166,978 145,319
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Net utility plant 390,765 77,780 6,632 0 475,177 445,152
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Other property and investments, at cost 58,765 3,801 3,128 (52,419) 13,275 13,037
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Current assets:
Cash and temporary cash investments 4,417 (871) 674 0 4,220 2,318
Accounts receivable, net 37,478 9,101 10 0 46,589 56,541
Accounts receivable associated companies 2,125 575 6,065 (8,765) 0 0
Unbilled revenues 8,699 1,254 0 0 9,953 11,386
Deferred gas costs 7,457 3,765 0 0 11,222 23,404
Prepaid & deferred income taxes 2,167 651 148 0 2,966 703
Inventories, at average cost 21,837 1,893 0 0 23,730 25,727
Prepaid benefit plans and other 23,426 3,107 214 0 26,747 16,009
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Total current assets 107,606 19,475 7,111 (8,765) 125,427 136,088
- ----------------------------------------------------------------------------------------------------------------------------------
Deferred debits:
Income taxes 8,659 6,658 475 0 15,792 14,780
Other 18,880 2,656 4,314 0 25,850 20,536
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $584,675 $110,370 $21,660 $(61,184) $655,521 $629,593
==================================================================================================================================
CAPITALIZATION & LIABILITIES:
Common stock equity:
Common stock $ 44,459 $ 1 $ 30 $ (31) $ 44,459 $ 43,265
Paid in capital 100,084 12,689 7,770 (20,460) 100,083 92,860
Retained earnings 77,476 31,757 171 (31,928) 77,476 73,539
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Total common stock equity 222,019 44,447 7,971 (52,419) 222,018 209,664
- ----------------------------------------------------------------------------------------------------------------------------------
Cumulative preferred stock:
Non-redeemable 2,572 0 0 0 2,572 2,572
Redeemable 2,721 0 0 0 2,721 2,820
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Total cumulative preferred stock 5,293 0 0 0 5,293 5,392
- ----------------------------------------------------------------------------------------------------------------------------------
Long term debt:
Revolving credit agreements 0 20,000 0 0 20,000 13,000
Notes 160,000 13,000 0 0 173,000 177,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total long term debt 160,000 33,000 0 0 193,000 190,000
Less current maturities 0 0 0 0 0 (4,000)
- ----------------------------------------------------------------------------------------------------------------------------------
Long term debt, net 160,000 33,000 0 0 193,000 186,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total capitalization 387,312 77,447 7,971 (52,419) 420,311 401,056
- ----------------------------------------------------------------------------------------------------------------------------------
Commitments and contingencies
Current Liabilities:
Short-term debt 41,900 7,150 4,575 0 53,625 61,000
Current maturities of long-term debt 0 0 0 0 0 4,000
Accounts payable 25,056 4,109 5,481 0 34,646 39,666
Accounts payable to associated companies 5,371 3,224 170 (8,765) 0 0
Fuel purchase commitments 19,276 1,224 0 0 20,500 21,984
Refunds due customers 11,802 1,748 103 0 13,653 2,518
Taxes accrued 7,409 1,762 65 0 9,236 5,296
Other 8,600 1,311 2 0 9,913 10,454
- ----------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 119,414 20,528 10,396 (8,765) 141,573 144,918
- ----------------------------------------------------------------------------------------------------------------------------------
Deferred credits:
Deferred income taxes 58,837 9,384 1,995 0 70,216 64,976
Other 19,112 3,011 1,298 0 23,421 18,643
- ----------------------------------------------------------------------------------------------------------------------------------
Total Capitalization & Liabilities $584,675 $110,370 $21,660 $(61,184) $655,521 $629,593
==================================================================================================================================
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR3
<SUBSIDIARY>
<S> <C> <C> <C>
<NUMBER> 1 2 3
<NAME> BAY STATE NORTHERN GRANITE
<MULTIPLIER> 1,000
<PERIOD-TYPE> YEAR YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1994 DEC-31-1994
<PERIOD-START> JAN-01-1994 JAN-01-1994 JAN-01-1994
<PERIOD-END> DEC-31-1994 DEC-31-1994 DEC-31-1994
<BOOK-VALUE> PER-BOOK PER-BOOK PER-BOOK
<TOTAL-ASSETS> 655,521 110,370 21,660
<TOTAL-OPERATING-REVENUES> 430,684 70,210 65,422
<NET-INCOME> 23,164 3,735 (187)
</TABLE>
