<PAGE> 1
File No. 69-249
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-3A-2
For the Year Ended December 31, 1996
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"), Natural Gas Development Inc. ("NGDI"), and
EnergyUSA, Inc. ("EUSA"), are Massachusetts corporations with offices in
Westborough, Massachusetts, are wholly owned subsidiaries of Granite and are not
gas utilities 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 pipelines
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, 1996, 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, 1996 were $12,141,000. Total
gas sales for Bay State to all customers in Massachusetts were $325,094,000.
Total revenues from transportation only customers in Massachusetts were
$6,193,000.
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, Texas Eastern
Corporation, 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, 1996, Northern furnished gas service to a
total of approximately 43,000 customers in 41 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 22
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 a Portland, Lewiston and Auburn and 15
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
9,908 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 16,761 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, 1996
-----------------------------------------
<CAPTION>
Bay State Massachusetts
- -----------------------
<S> <C>
(a) MCF of gas distributed at retail 47,789,000
(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 3,247,000
(d) MCF of gas purchased outside Massachusetts,
or at the Massachusetts state line 48,995,000
Northern
- --------
(a) MCF of gas distributed at retail 9,952,000
(b) MCF of gas distributed at retail outside of New Hampshire 5,722,000
(c) MCF of gas sold at wholesale outside New Hampshire, 239,000
or at the New Hampshire state line
(d) MCF of gas purchased outside New Hampshire, or at the
New Hampshire state line 10,704,000
</TABLE>
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Granite State
- -------------
(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 24,875,000
(d) MCF of gas purchased outside New Hampshire, or at the
New Hampshire state line 24,875,000
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 28th day of February, 1997.
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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SCHEDULE A
BAY STATE GAS COMPANY
<TABLE>
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 320,249 118,194
------- -------
NORTHERN:
Portsmouth 9,908 4,080
Portland 16,761 10,000
------- -------
Total Northern 26,669 14,080
------- -------
Grand Total 346,918 132,274
======= =======
</TABLE>
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SCHEDULE B
BAY STATE GAS COMPANY
<TABLE>
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
Portland 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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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-31-1996 DEC-31-1996 DEC-31-1996
<PERIOD-START> JAN-01-1996 JAN-01-1996 JAN-01-1996
<PERIOD-END> DEC-31-1996 DEC-31-1996 DEC-31-1996
<BOOK-VALUE> PER-BOOK PER-BOOK PER-BOOK
<TOTAL-ASSETS> 658,608 138,570 40,162
<TOTAL-OPERATING-REVENUES> 355,283 77,065 84,136
<NET-INCOME> 25,897 3,832 2,483
</TABLE>
<PAGE> 1
EXHIBIT 99.1
<PAGE> 2
BAY STATE GAS COMPANY
<TABLE>
CONSOLIDATING STATEMENT OF INCOME AND RETAINED EARNINGS
For the twelve months ended December 31, 1996 with comparative amounts for 1995
(Unaudited, in thousands)
<CAPTION>
Granite Consolidated 1996 1995
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 $355,283 $77,065 $84,136 $(83,441) $433,043 $431,572
Operating Expenses
Recovered natural gas costs 195,962 43,338 71,889 (81,198) 229,991 238,793
Operations 74,868 16,431 9,000 (2,243) 98,056 87,435
Maintenance 8,949 1,232 794 0 10,975 8,772
Depreciation and amortization 21,329 4,435 833 0 26,597 26,076
Other taxes, principally property taxes 10,093 2,367 427 0 12,887 11,814
- ------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 311,201 67,803 82,943 (83,441) 378,506 372,890
- ------------------------------------------------------------------------------------------------------------------------------
Operating income 44,082 9,262 1,193 0 54,537 58,682
- ------------------------------------------------------------------------------------------------------------------------------
Other income (expense)
Income from investments 0 0 1,347 0 1,347 296
AFUDC and other 7,212 200 1,110 (6,315) 2,207 1,271
- ------------------------------------------------------------------------------------------------------------------------------
Income before interest and taxes 51,294 9,462 3,650 (6,315) 58,091 60,249
- ------------------------------------------------------------------------------------------------------------------------------
Interest income (230) (217) 5 0 (442) (624)
Interest expense 13,116 3,731 (598) 0 16,249 17,125
Federal and state taxes on income 12,511 2,116 1,760 0 16,387 16,719
- ------------------------------------------------------------------------------------------------------------------------------
Net income 25,897 3,832 2,483 (6,315) 25,897 27,029
Retained earnings, beginning of period 84,319 36,630 1,466 (38,096) 84,319 77,476
Dividends declared (20,820) 0 0 0 (20,820) (20,186)
- ------------------------------------------------------------------------------------------------------------------------------
Retained earnings end of period $ 89,396 $40,462 $ 3,949 $(44,411) $ 89,396 $ 84,319
==============================================================================================================================
</TABLE>
<PAGE> 3
BAY STATE GAS COMPANY
<TABLE>
CONSOLIDATING BALANCE SHEET
At December 31, 1996 with comparative amounts for 1995
(Unaudited, in thousands)
<CAPTION>
Granite Consolidated 1996 1995
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 $574,575 $125,874 $14,005 $ 0 $714,454 $668,506
Accumulated depreciation & amortization 168,541 26,856 8,472 0 203,869 184,017
- ------------------------------------------------------------------------------------------------------------------------------
Net plant 406,034 99,018 5,533 0 510,585 484,489
- ------------------------------------------------------------------------------------------------------------------------------
Investment 64,933 2 19,406 (64,900) 19,441 11,346
Prepaid benefit plans 17,361 2,272 41 0 19,674 24,838
Other long-term assets 8,696 689 781 (457) 9,709 9,322
Current assets:
Cash and temporary cash investment 5,422 660 1,071 0 7,153 5,004
Accounts receivable, net 48,846 12,632 337 0 61,815 52,386
Accounts receivable associated companies 4,978 1,072 9,843 (15,893) 0 0
Unbilled revenues 9,031 1,412 0 0 10,443 12,145
Deferred gas costs 36,501 5,577 0 0 42,078 14,232
Inventories, at average cost 25,214 2,400 93 0 27,707 17,681
Other 4,430 616 225 0 5,271 6,241
- ------------------------------------------------------------------------------------------------------------------------------
Total current assets 134,422 24,369 11,569 (15,893) 154,467 107,689
- ------------------------------------------------------------------------------------------------------------------------------
Regulatory assets:
Income taxes 4,408 6,279 372 0 11,059 12,345
Other 22,754 5,941 2,460 0 31,155 15,627
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $658,608 $138,570 $40,162 $(81,250) $756,090 $665,656
==============================================================================================================================
CAPITALIZATION & LIABILITIES:
Common stock equity:
Common stock $ 44,812 $ 1 $ 30 $ (31) $ 44,812 $ 44,558
Paid in capital 102,089 12,688 7,770 (20,458) 102,089 100,695
Retained earnings 89,396 40,462 3,949 (44,411) 89,396 84,319
- ------------------------------------------------------------------------------------------------------------------------------
Total common stock equity 236,297 53,151 11,749 (64,900) 236,297 229,572
- ------------------------------------------------------------------------------------------------------------------------------
Cumulative preferred stock:
Non-redeemable 2,572 0 0 0 2,572 2,572
Redeemable 2,438 0 0 0 2,438 2,572
- ------------------------------------------------------------------------------------------------------------------------------
Total cumulative preferred stock 5,010 0 0 0 5,010 5,144
- ------------------------------------------------------------------------------------------------------------------------------
Long term debt:
Revolving credit agreements 0 18,000 0 0 18,000 13,000
Notes 188,500 28,000 0 0 216,500 201,500
- ------------------------------------------------------------------------------------------------------------------------------
Total long term debt 188,500 46,000 0 0 234,500 214,500
Less current maturities of long-term debt 0 (18,000) 0 0 (18,000) --
- ------------------------------------------------------------------------------------------------------------------------------
Long-term debt, net 188,500 28,000 0 0 216,500 214,500
- ------------------------------------------------------------------------------------------------------------------------------
Total capitalization 429,807 81,151 11,749 (64,900) 457,807 449,216
- ------------------------------------------------------------------------------------------------------------------------------
Long-term liabilities:
Deferred taxes 66,051 11,658 3,475 0 81,184 78,379
Other long-term liabilities 11,797 2,658 3,165 (457) 17,163 15,328
- ------------------------------------------------------------------------------------------------------------------------------
Total long-term liabilities 77,848 14,316 6,640 (457) 98,347 93,707
- ------------------------------------------------------------------------------------------------------------------------------
Commitments and contingencies
Current Liabilities:
Short-term debt 64,175 10,500 11,825 0 86,500 33,950
Current maturities of long-term debt 0 18,000 0 0 18,000 --
Accounts payable 34,653 5,801 7,329 0 47,783 43,917
Accounts payable to associated companies 9,441 3,365 3,087 (15,893) 0 --
Fuel purchase commitments 21,071 1,917 0 0 22,988 14,165
Refunds due customers 9,107 755 0 0 9,862 16,158
Deferred and accrued taxes 6,538 1,201 (470) 0 7,269 6,839
Other 5,968 1,564 2 0 7,534 7,704
- ------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 150,953 43,103 21,773 (15,893) 199,936 122,733
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITALIZATION & LIABILITIES $658,608 $138,570 $40,162 ($81,250) $756,090 $665,656
==============================================================================================================================
</TABLE>
