<PAGE> 1
File No. 69-249
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-3A-2
For the Year Ended December 31, 1995
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"), Bay State
Energy Enterprises, Inc. ("BSEE"), and Energy Asset Funding, Inc. ("EAF"), are
Massachusetts corporations with offices in Westborough, Massachusetts, are
wholly owned subsidiaries of Granite and are not gas utilities as defined in the
Act. Natural Gas Development Corp. ("NGDC"), a Maine corporation with offices in
Portland, Maine, 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, 1995, Bay State furnished
gas service to a total of approximately 253,000 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 serving 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 approximately 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 out of state sales
for resale for the twelve months ended December 31, 1995 were $6,889,000. Total
gas sales for Bay State to all customers in Massachusetts were $331,200,000.
Total revenues from transportation only customers in Massachusetts were
$3,428,000.
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 capacity contracts to it's distribution system from the
producing areas of North America. 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 capacities 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 the Algonquin Gas Transmission Company, Tennessee Gas
Pipeline Company, National Fuel Gas Supply Corporation, and CNG 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, 1995, Northern furnished gas service to a
total of approximately 43,000 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
capacity contracts to Northern's distribution system from the producing areas of
North America. Northern distributes some Canadian pipeline natural gas purchased
from 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 MMBtu 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 Limited 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 Pipe Line Corporation ("PPLC"). Granite
receives natural gas at its take station located in Massachusetts, at the
US/Canadian border where gas enters the PPLC 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.
<TABLE>
For Twelve Months Ended December 31, 1995
-----------------------------------------
<S> <C>
Bay State Massachusetts
- -----------------------
(a) MCF of gas distributed at retail 53,418,000
(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 2,411,000
(d) MCF of gas purchased outside Massachusetts,
or at the Massachusetts state line 55,923,000
Northern
- --------
(a) MCF of gas distributed at retail 11,969,000
(b) MCF of gas distributed at retail outside of New Hampshire 5,332,000
(c) MCF of gas sold at wholesale outside New Hampshire,
or at the New Hampshire state line -0-
(d) MCF of gas purchased outside New Hampshire, or at the
New Hampshire state line 13,724,000
</TABLE>
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<TABLE>
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 24,877,000
(d) MCF of gas purchased outside New Hampshire, or at the
New Hampshire state line 24,875,000
</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 29th day of February, 1996.
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. MacGillivray
- -------------------------------
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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<TABLE>
SCHEDULE A
BAY STATE GAS COMPANY
PROPANE AIR GAS FACILITIES
<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 320,429 118,194
------- -------
NORTHERN:
Portsmouth 9,357 4,080
Portland 16,376 10,000
------- -------
Total Northern 25,733 14,080
------- -------
Grand Total 346,162 132,274
======= =======
</TABLE>
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<TABLE>
SCHEDULE B
BAY STATE GAS COMPANY
LNG FACILITIES
<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
<PAGE> 2
<TABLE>
BAY STATE GAS COMPANY
CONSOLIDATING BALANCE SHEET
At December 31, 1995 with comparative amounts for 1994
(Unaudited, in thousands)
<CAPTION>
Granite Consolidated 1995 1994
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:
Plant, at cost $542,800 $112,616 $13,090 $ 0 $668,506 $651,574
Accumulated depreciation & amortization 153,169 23,426 7,422 0 184,017 170,380
- -----------------------------------------------------------------------------------------------------------------------------------
Net plant 389,631 89,190 5,668 0 484,489 481,194
- -----------------------------------------------------------------------------------------------------------------------------------
Investments in energy ventures 58,692 2 11,312 (58,660) 11,346 6,133
Prepaid benefit plans 22,409 2,281 148 0 24,838 21,843
Other long-term assets 8,427 655 240 0 9,322 10,507
Current assets:
Cash and temporary cash investments 4,279 625 278 0 5,182 4,220
Accounts receivable, net 41,288 10,755 165 0 52,208 46,589
Accounts receivable associated companies 3,693 523 7,445 (11,661) 0 0
Unbilled revenues 10,609 1,536 0 0 12,145 9,953
Deferred gas costs 10,453 3,779 0 0 14,232 21,720
Inventories, at average cost 15,140 1,877 664 0 17,681 23,729
Other 5,417 762 62 0 6,241 5,624
- -----------------------------------------------------------------------------------------------------------------------------------
Total current assets 90,879 19,857 8,614 (11,661) 107,689 111,835
- -----------------------------------------------------------------------------------------------------------------------------------
Regulatory assets:
Income taxes 4,643 7,295 407 0 12,345 11,067
Other 12,694 2,017 916 0 15,627 12,302
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $587,375 $121,297 $27,305 ($70,321) $665,656 $654,881
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITALIZATION & LIABILITIES:
Common stock equity:
Common stock $ 44,558 $ 1 $ 30 (31) $ 44,558 $ 44,459
Paid in capital 100,695 12,688 7,846 (20,534) 100,695 100,083
Retained earnings 84,319 36,630 1,465 (38,095) 84,319 77,476
- -----------------------------------------------------------------------------------------------------------------------------------
Total common stock equity 229,572 49,319 9,341 (58,660) 229,572 222,018
- -----------------------------------------------------------------------------------------------------------------------------------
Cumulative preferred stock:
Non-redeemable 2,572 0 0 0 2,572 2,572
Redeemable 2,572 0 0 0 2,572 2,721
- -----------------------------------------------------------------------------------------------------------------------------------
Total cumulative preferred stock 5,144 0 0 0 5,144 5,293
- -----------------------------------------------------------------------------------------------------------------------------------
Long term debt:
Revolving credit agreements 0 13,000 0 0 13,000 20,000
Notes 173,500 28,000 0 0 201,500 173,000
- -----------------------------------------------------------------------------------------------------------------------------------
Total long term debt 173,500 41,000 0 0 214,500 193,000
- -----------------------------------------------------------------------------------------------------------------------------------
Total capitalization 408,216 90,319 9,341 (58,660) 449,216 420,311
- -----------------------------------------------------------------------------------------------------------------------------------
Long-term liabilities:
Deferred taxes 64,494 11,561 2,324 0 78,379 72,210
Other long-term liabilities 12,660 1,430 1,238 0 15,328 13,721
- -----------------------------------------------------------------------------------------------------------------------------------
Total long-term liabilities 77,154 12,991 3,562 0 93,707 85,931
- -----------------------------------------------------------------------------------------------------------------------------------
Commitments and contingencies
Current Liabilities:
Short-term debt 22,500 4,750 6,700 0 33,950 53,625
Accounts payable 33,554 4,733 5,509 0 43,796 36,302
Accounts payable to associated companies 6,932 2,442 2,287 (11,661) 0 0
Fuel purchase commitments 13,067 1,098 0 0 14,165 20,500
Refunds due customers 13,876 2,282 0 0 16,158 24,097
Deferred and accrued taxes 5,830 1,227 (97) 0 6,960 6,921
Other 6,246 1,455 3 0 7,704 7,194
- -----------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 102,005 17,987 14,402 (11,661) 122,733 148,639
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Total Capitalization & Liabilities $587,375 $121,297 $27,305 ($70,321) $665,656 $654,881
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
<TABLE>
BAY STATE GAS COMPANY
CONSOLIDATING STATEMENT OF INCOME AND RETAINED EARNINGS
For the twelve months ended December 31, 1995 with comparative amounts for 1994
(Unaudited, in thousands)
<CAPTION>
Granite Consolidated 1995 1994
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>
Operating Revenues
Local Transportation $134,010 $26,778 $ 6,985 $ 0 $167,773 $162,559
Energy products and services:
Natural gas sales 207,506 40,061 57,764 (66,235) 239,096 260,468
Other energy products and services 20,170 4,133 1,560 (1,175) 24,688 20,222
---------------------------------------------------------------------------------------------------------------------------------
Total energy products and services 227,676 44,194 59,324 (67,410) 263,784 280,690
---------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 361,686 70,972 66,309 (67,410) 431,557 443,249
---------------------------------------------------------------------------------------------------------------------------------
Operating expenses
Recovered natural gas costs 207,506 40,061 57,764 (66,235) 239,096 260,468
Operations 69,490 13,915 5,111 (1,175) 87,341 87,135
Maintenance 7,327 1,076 369 0 8,772 8,774
Depreciation and amortization 21,064 3,840 952 0 25,856 24,477
Other taxes, principally property taxes 9,098 2,314 398 0 11,810 11,456
---------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 314,485 61,206 64,594 (67,410) 372,875 392,310
---------------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 47,201 9,766 1,715 0 58,682 50,939
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Other income (expense)
Income(loss) from investments in
energy ventures 0 0 296 0 296 188
Interest income and other 7,469 395 217 (6,186) 1,895 1,932
Interest expense (14,157) (2,887) (100) 19 (17,125) (15,323)
---------------------------------------------------------------------------------------------------------------------------------
Total other income (expense) (6,688) (2,492) 413 (6,167) (14,934) (13,203)
---------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 40,513 7,274 2,128 (6,167) 43,748 37,736
---------------------------------------------------------------------------------------------------------------------------------
Federal and state taxes on income 13,484 2,401 834 0 16,719 14,572
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Net income 27,029 4,873 1,294 27,029 23,164
---------------------------------------------------------------------------------------------------------------------------------
Retained earnings, beginning of period 77,476 31,757 171 (31,928) 77,476 73,539
Dividends declared (20,186) 0 0 0 (20,186) (19,417)
Unrestriction of common stock 0 0 0 0 0 190
---------------------------------------------------------------------------------------------------------------------------------
Retained earnings, end of period $ 84,319 $36,630 $ 1,465 ($31,928) $ 84,319 $ 77,476
---------------------------------------------------------------------------------------------------------------------------------
</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-31-1995 DEC-31-1995 DEC-31-1995
<PERIOD-START> JAN-01-1995 JAN-01-1995 JAN-01-1995
<PERIOD-END> DEC-31-1995 DEC-31-1995 DEC-31-1995
<BOOK-VALUE> PER-BOOK PER-BOOK PER-BOOK
<TOTAL-ASSETS> 665,656 121,297 $27,305
<TOTAL-OPERATING-REVENUES> 431,557 70,972 66,309
<NET-INCOME> 27,029 4,873 1,294
</TABLE>
