FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
-------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------ ------
Commission File Number 0-7624
------
WESTERN MASSACHUSETTS ELECTRIC COMPANY
--------------------------------------
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1961130
------------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
174 BRUSH HILL AVENUE, WEST SPRINGFIELD, MASSACHUSETTS (01090-0010)
- -------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(413) 785-5871
--------------
(Registrant's telephone number, including area code)
Not Applicable
--------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
___ ___
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at July 29, 1994
----- ----------------------------
Common Shares, $25.00 par value 1,072,471 shares
WESTERN MASSACHUSETTS ELECTRIC COMPANY
TABLE OF CONTENTS
Page No.
--------
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets - June 30, 1994
and December 31, 1993 2
Statements of Income - Three and Six
Months Ended June 30, 1994 and 1993 4
Statements of Cash Flows -
Six Months Ended June 30, 1994 and 1993 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8
Part II. Other Information
Item 1. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of
Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
PART I. FINANCIAL INFORMATION
WESTERN MASSACHUSETTS ELECTRIC COMPANY
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
------------ ------------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
- ------
Utility Plant, at original cost:
Electric................................................ $ 1,199,416 $ 1,183,410
Less: Accumulated provision for depreciation......... 412,312 395,190
------------ ------------
787,104 788,220
Construction work in progress........................... 20,976 23,790
Nuclear fuel, net....................................... 36,954 35,727
------------ ------------
Total net utility plant............................. 845,034 847,737
------------ ------------
Other Property and Investments:
Nuclear decommissioning trusts, at market (Note 2)<F2>.. 54,303 49,155
Investments in regional nuclear generating
companies, at equity................................... 14,818 14,633
Other, at cost.......................................... 3,840 3,840
------------ ------------
72,961 67,628
------------ ------------
Current Assets:
Cash and special deposits............................... 116 185
Receivables, net........................................ 35,592 36,437
Accounts receivable from affiliated companies........... 5,998 4,972
Accrued utility revenues................................ 15,931 17,362
Fuel, materials, and supplies, at average cost.......... 5,639 7,057
Recoverable energy costs, net........................... 5,266 -
Prepayments and other................................... 7,244 9,613
------------ ------------
75,786 75,626
------------ ------------
Deferred Charges:
Deferred charges--SFAS 109.............................. 90,357 94,414
Amortizable property investment--Millstone 3............ 22,401 28,001
Deferred costs--Millstone 3............................. 15,399 22,667
Unrecovered contract obligation--YAEC................... 22,262 24,150
Deferred DOE assessment................................. 8,247 8,908
Unamortized debt expense................................ 1,846 1,842
Other................................................... 38,280 33,669
------------ ------------
198,792 213,651
------------ ------------
Total Assets........................................ $ 1,192,573 $ 1,204,642
============ ============
</TABLE>
See accompanying notes to financial statements.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
------------ ------------
(Thousands of Dollars)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock--$25 par value.
Authorized and outstanding 1,072,471 shares............ $ 26,812 $ 26,812
Capital surplus, paid in................................ 149,464 149,319
Retained earnings....................................... 110,110 97,627
------------ ------------
Total common stockholder's equity.............. 286,386 273,758
Preferred stock not subject to mandatory redemption..... 73,500 73,500
Preferred stock subject to mandatory redemption......... 24,000 25,500
Long-term debt.......................................... 379,752 393,232
------------ ------------
Total capitalization........................... 763,638 765,990
------------ ------------
Obligations Under Capital Leases.......................... 25,832 24,014
------------ ------------
Current Liabilities:
Notes payable to banks.................................. 7,500 6,000
Notes payable to affiliated company..................... 4,500 -
Long-term debt and preferred stock--current
portion................................................ 1,500 1,500
Obligations under capital leases--current
portion................................................ 12,781 12,888
Accounts payable........................................ 15,216 17,493
Accounts payable to affiliated companies................ 6,973 12,016
Accrued taxes........................................... 6,148 7,022
Accrued interest........................................ 6,243 6,478
Refundable energy costs................................. - 8,676
Refundable conservation costs, net...................... 7,388 2,610
Other................................................... 7,651 9,117
------------ ------------
75,900 83,800
------------ ------------
Deferred Credits:
Accumulated deferred income taxes....................... 252,253 253,547
Accumulated deferred investment tax credits............. 35,458 36,083
Deferred contract obligation--YAEC...................... 22,262 24,150
Deferred DOE obligation................................. 6,608 7,268
Other................................................... 10,622 9,790
------------ ------------
327,203 330,838
------------ ------------
Commitments and Contingencies (Note 3)<F3>
------------ ------------
Total Capitalization and Liabilities........... $ 1,192,573 $ 1,204,642
============ ============
</TABLE>
See accompanying notes to financial statements.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
1994 1993 1994 1993
--------- --------- --------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Operating Revenues............................. $101,188 $ 92,383 $214,172 $201,333
--------- --------- --------- ---------
Operating Expenses:
Operation --
Fuel, purchased and net interchange power. 8,811 12,104 25,918 30,562
Other..................................... 31,334 32,261 66,725 67,007
Maintenance.................................. 8,071 7,812 17,217 16,044
Depreciation................................. 8,655 8,846 18,055 18,056
Amortization of regulatory assets............ 7,303 7,309 14,144 14,828
Federal and state income taxes............... 11,193 5,606 21,801 13,990
Taxes other than income taxes................ 4,553 4,916 9,576 9,658
--------- --------- --------- ---------
Total operating expenses............... 79,920 78,854 173,436 170,145
--------- --------- --------- ---------
Operating Income............................... 21,268 13,529 40,736 31,188
--------- --------- --------- ---------
Other Income:
Deferred Millstone 3 return--other funds..... 213 380 466 795
Equity in earnings of regional nuclear
generating companies....................... 528 378 995 769
Other, net................................... 745 460 930 1,280
Income taxes--credit......................... 126 (72) 537 94
--------- --------- --------- ---------
Other income, net...................... 1,612 1,146 2,928 2,938
--------- --------- --------- ---------
Income before interest charges......... 22,880 14,675 43,664 34,126
--------- --------- --------- ---------
Interest Charges:
Interest on long-term debt................... 6,947 7,145 14,044 15,439
Other interest............................... 57 495 (28) 532
Deferred Millstone 3 return--borrowed funds.. (159) (281) (348) (589)
--------- --------- --------- ---------
Interest charges, net.................. 6,845 7,359 13,668 15,382
--------- --------- --------- ---------
Income before cumulative effect of
accounting change............................ 16,035 7,316 29,996 18,744
Cumulative effect of accounting change......... - - - 3,922
--------- --------- --------- ---------
Net Income..................................... $ 16,035 $ 7,316 $ 29,996 $ 22,666
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------
1994 1993
---------- ----------
(Thousands of Dollars)
<S> <C> <C>
Cash Flows From Operations:
Net Income .............................................. $ 29,996 $ 22,666
Adjusted for the following:
Depreciation .......................................... 18,055 18,056
Deferred income taxes and investment tax credits, net.. 7,640 (2,342)
Deferred nuclear plants return, net of amortization.... 6,567 5,955
Deferred energy costs, net of amortization............. (13,942) 7,956
Other sources of cash.................................. 6,666 13,793
Other uses of cash..................................... (11,476) (287)
Changes in working capital:
Receivables and accrued utility revenues............... 1,250 (2,943)
Fuel, materials, and supplies.......................... 1,418 1,186
Accounts payable....................................... (7,320) (11,667)
Accrued taxes.......................................... (874) (6,314)
Other working capital (excludes cash).................. 5,446 (2,147)
---------- ----------
Net cash flows from operations............................. 43,426 43,912
---------- ----------
Cash Flows Used For Financing Activities:
Long-term debt........................................... 90,000 60,000
Net increase (decrease) in short-term debt............... 6,000 (9,000)
Reacquisitions and retirements of long-term debt
and preferred stock.................................... (105,069) (60,900)
Cash dividends on preferred stock........................ (2,799) (2,761)
Cash dividends on common stock........................... (14,714) (14,392)
---------- ----------
Net cash flows used for financing activities............... (26,582) (27,053)
---------- ----------
Investment Activities:
Investment in plant:
Electric utility plant................................. (14,800) (13,470)
Nuclear fuel........................................... 1,742 175
---------- ----------
Net cash flows used for investments in plant............. (13,058) (13,295)
Other investment activities, net......................... (3,855) (3,553)
---------- ----------
Net cash flows used for investments........................ (16,913) (16,848)
---------- ----------
Net Increase (Decrease) In Cash for the Period............. (69) 11
Cash-beginning of period................................... 185 165
---------- ----------
Cash-end of period......................................... $ 116 $ 176
========== ==========
</TABLE>
See accompanying notes to financial statements.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
<F1>1. General
The accompanying unaudited financial statements should be read in conjunction
with the Annual Report of Western Massachusetts Electric Company (the company
or WMECO) on Form 10-K for the year ended December 31, 1993 (1993 Form 10-K).
In the opinion of the company, the accompanying financial statements contain
all adjustments necessary to present fairly the financial position as of June
30, 1994, the results of operations for the three and six months ended June
30, 1994 and 1993, and the statements of cash flows for the six months ended
June 30, 1994 and 1993. The results of operations for the three and six
months ended June 30, 1994 and 1993 are not necessarily indicative of the
results expected for a full year.
Certain amounts in the accompanying financial statements of the company for
the period ended June 30, 1993 have been reclassified to conform with the
June 30, 1994 presentation.
<F2>2. Changes in Accounting Principles
Statement of Financial Accounting Standards No. 115 (SFAS 115): In May 1993,
the Financial Accounting Standards Board issued SFAS 115, "Accounting for
Certain Investments in Debt and Equity Securities." SFAS 115 addresses the
accounting and reporting for certain investments in debt and equity
securities, and expands the use of fair value accounting for these
securities. SFAS 115 is applicable to WMECO with respect to its investments
in nuclear decommissioning trusts.
SFAS 115 requires investments in decommissioning trusts to be presented at
fair value and was adopted by WMECO on a prospective basis in the first
quarter of 1994.
As a result of the adoption of SFAS 115, WMECO increased its investment in
nuclear decommissioning trusts by approximately $1.3 million as of June 30,
1994, with a corresponding offset to the accumulated provision for
depreciation. The $1.3 million increase represents cumulative gross
unrealized holding gains of $2.7 million, offset by cumulative gross
unrealized holding losses of $1.4 million. There was no increase in funding
of the trusts, nor any impact on earnings as a result of the adoption of SFAS
115.
<F3>3. Commitments and Contingencies
Construction Program: For information regarding WMECO's construction
program, see the Notes to Financial Statements in WMECO's 1993 Form 10-K.
Nuclear Performance: For further information regarding Nuclear Performance,
see Management's Discussion and Analysis of Financial Condition and Results
of Operations and Part II, Item 1 - Legal Proceedings in this Form 10-Q,
WMECO's March 31, 1994 Form 10-Q and the Notes to Financial Statements in
WMECO's 1993 Form 10-K.
Environmental Matters: For information regarding Environmental Matters, see
Part II, Item 5 - Other Information in this Form 10-Q and the Notes to
Financial Statements in WMECO's 1993 Form 10-K.
Nuclear Insurance Contingencies: For information regarding Nuclear Insurance
Contingencies, see the Notes to Financial Statements in WMECO's 1993 Form 10-
K.
Financing Arrangements for the Regional Nuclear Generating Companies: For
information regarding Financing Arrangements for the Regional Nuclear
Generating Companies, see the Notes to Financial Statements in WMECO's 1993
Form 10-K.
Purchased Power Arrangements: For information regarding Purchased Power
Arrangements, see the Notes to Financial Statements in WMECO's 1993 Form 10-
K.
Hydro-Quebec: For information regarding Hydro-Quebec, see the Notes to
Financial Statements in WMECO's 1993 Form 10-K.
Property Taxes: For information regarding Property Taxes, see the Notes to
Financial Statements in WMECO's 1993 Form 10-K.
<F4>4. Subsequent Event
On August 2, 1994, the Federal Energy Regulatory Commission (FERC) approved a
Bulk Power Supply Service Contract (the contract) between The Connecticut
Light and Power Company (CL&P), a wholly-owned subsidiary of NU, and WMECO,
and the Town of Madison Department of Electric Works (MEW), a former
wholesale customer of Central Maine Power Company (CMP). This contract will
commence on September 1, 1994 and is expected to generate revenues
aggregating approximately $140 million to CL&P and WMECO over the nine year
and four month contract term.
The FERC has also concurrently approved a settlement agreement between CL&P
and WMECO, MEW, and CMP. This settlement agreement resolves all outstanding
issues between the parties related to the contract. As part of the
settlement agreement, WMECO will make settlement payments to CMP of
approximately $1.43 million over a seven-year period.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
Management's Discussion and Analysis of Financial
Condition and Results of Operations
This section contains management's assessment of Western Massachusetts
Electric Company's (WMECO or the company) financial condition and the
principal factors having an impact on the results of operations. The company
is a wholly-owned subsidiary of Northeast Utilities (NU). This discussion
should be read in conjunction with the company's financial statements and
footnotes and the 1993 Form 10-K and the First Quarter 1994 Form 10-Q.
FINANCIAL CONDITION
Overview
The company's net income increased to $30 million for the six months ended
June 30, 1994, from approximately $23 million for the same period in 1993.
Net income in 1993 reflects the cumulative effect of a change in the method
of accounting for Connecticut municipal property tax expense adopted by the
company in the first quarter of 1993. This change resulted in a one-time
contribution to 1993 net income of approximately $4 million. Net income
increased to $16 million for three months ending June 30, 1994, from
approximately $7 million for the same period in 1993.
The increases in earnings from 1993 for the three- and six-month periods,
before the effect of the one-time accounting change, are primarily
attributable to one-time benefits from a settlement agreement approved in May
1994 which will be offset by costs over the remainder of the year, higher
retail sales resulting from a colder winter and an unusually hot June in 1994
and lower interest costs.
Regulatory Matters
The ability of a retail customer to select an electricity supplier other than
a local electric company and then use the local electric utility to transmit
the power to the customer's site is known as "retail wheeling." While
wholesale wheeling is mandated by the Energy Policy Act of 1992 under certain
circumstances, retail wheeling is generally not required. In Massachusetts,
bills being reviewed by certain legislative committees would permit limited
retail wheeling in economically distressed areas and to municipal and state-
owned facilities as well as increased opportunities for self-generation.
Massachusetts
On May 26, 1994, the Massachusetts Department of Public Utilities (DPU)
approved a settlement agreement between WMECO and the Attorney General of the
Commonwealth of Massachusetts under which WMECO's customers will receive a
base rate reduction of approximately $13 million over a 20-month period
effective June 1, 1994, and a guarantee of no general base rate increases
before February 1996. This agreement also terminated, without findings, all
performance review proceedings regarding the treatment of replacement power
costs incurred by WMECO during outages at Millstone nuclear units from mid-
1987 through mid-1993 and approved the amortization of previously deferred
expenses for postretirement benefits beginning in July 1994. In addition,
under the agreement, large-use customers (1,000 kWs or more of demand) will
be offered discounts on their electric bills in return for providing WMECO
with five years' notice of any plans to self-generate or purchase electricity
from a different provider. The combined base rate reduction and service
extension discounts will total five percent for those larger customers. The
agreement settled a number of issues, some of which benefited earnings and
others of which imposed costs, but on balance over 1994 the agreement is not
expected to have a significant impact on WMECO's earnings.
Nuclear Performance
The composite capacity factor of the five nuclear generating units that the
NU System operates (including the Connecticut Yankee nuclear unit (CY)) was
61.0 percent for the six months ended June 30, 1994, as compared with 86.6
percent for the same period in 1993. The lower 1994 capacity factor was
primarily the result of extended refueling and maintenance outages for
Millstone 1 and Seabrook. CY, Seabrook and Millstone 2 were also out of
service for varying lengths of time in the first six months of 1994 because
of some unexpected technical and operating difficulties.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operations and cash flows used for financing and investment
activities are approximately the same for the first six months of 1994 and
1993.
The company's construction program expenditures amounted to approximately $15
million for the first six months of 1994, as compared to approximately $13
million during the same period in 1993. The higher construction expenditures
resulted primarily from the replacement of the condenser and turbine rotor
and other improvements during the Millstone 1 outage.
RESULTS OF OPERATIONS
Comparison of the Second Quarter of 1994 with the Second Quarter of 1993
- ------------------------------------------------------------------------
Operating revenues increased approximately $9 million in the second quarter
of 1994, as compared with 1993. The components of the change in operating
revenues are as follows:
Changes in Operating Revenues Increase
- ----------------------------- -------------------
(Millions of Dollars)
Fuel and purchased power cost recoveries $ 6
Sales volume 3
---
Total revenue change $ 9
===
Fuel and purchased power cost recoveries increased primarily because of
higher interchange revenues in 1994. Sales volume increased primarily as a
result of higher retail sales due to an unusually hot June in 1994.
Fuel, purchased, and net interchange power expense decreased approximately $3
million in the second quarter of 1994, as compared with 1993, primarily as a
result of a one-time benefit from the WMECO settlement agreement and lower
nuclear fuel expense, partially offset by a higher level of energy purchases
from other utilities.
Federal and state income taxes increased approximately $5 million in the
second quarter of 1994, as compared with 1993, primarily because of higher
book taxable income.
Comparison of the First Six Months of 1994 with the First Six Months
- --------------------------------------------------------------------
of 1993
- -------
Operating revenues increased approximately $13 million in the first six
months of 1994, as compared with 1993. The components of the change in
operating revenues are as follows:
Changes in Operating Revenues Increase
- ----------------------------- -------------------
(Millions of Dollars)
Fuel and purchased power cost recoveries $ 6
Sales volume 7
---
Total revenue change $13
===
Fuel and purchased power cost recoveries increased primarily because of
higher interchange revenues in 1994. Sales volume increased primarily as a
result of higher retail sales from a colder winter and an unusually hot June
in 1994. Retail sales increased 2.8 percent for the first six months of
1994, as compared with 1993.
Fuel, purchased, and net interchange power expense decreased approximately $5
million in the first six months of 1994, as compared with 1993, primarily as
a result of a one-time benefit from the WMECO settlement agreement and lower
nuclear fuel expense, partially offset by a higher level of energy purchases
from other utilities.
Interest charges decreased approximately $2 million in the first six months
of 1994, as compared with 1993, primarily because of lower average interest
rates as a result of the company's refinancing activities.
Federal and state income taxes increased approximately $7 million in the
first six months of 1994, as compared with 1993, primarily because of higher
book taxable income.
The cumulative effect of the accounting change of approximately $4 million in
1993 represents the one-time change in the method of accounting for
Connecticut municipal property tax expense recognized in the first quarter of
1993.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
1. WMECO's 1993 Form 10-K incorrectly reported that Northeast Nuclear
Energy Company (NNECO), a wholly-owned subsidiary of NU that acts as agent
for the NU System and other utilities in operating the Millstone generating
units, had been informed by the Nuclear Regulatory Commission (NRC) that the
agency did not plan to take enforcement action against NNECO with respect to
apparent violations of NRC requirements arising from 1989 events involving
the operability of a safety related system at Millstone Unit 1. This
information, contained in correspondence from the NRC dated March 17, 1994,
pertained to another matter involving two employees who raised safety
concerns and was incorrectly reported in the 1993 Form 10-K as relating to
the 1989 Millstone Unit 1 operability event. On July 13, 1994, NNECO was
notified that the NRC had issued a Notice of Violation (NOV) and proposed to
assess civil penalties in the amount of $220,000 for this matter. The first
violation, for which a civil penalty of $120,000 was assessed, concerned the
apparent untimeliness of the operability assessment. The second violation,
and its associated civil penalty of $100,000, concerned discriminatory
treatment of an employee involved in the operability determination by a
manager at the plant. In addition, the NRC also requested that NNECO provide
information which will be used to determine whether the manager should be
involved in NRC licensed activities. Unless the response time is extended by
the NRC, NNECO has 30 days to respond to the NOV and information request.
2. On September 30, 1993, 29 participants in the New England Power Pool
(NEPOOL) (including the NU system operating companies) filed the 30th
Amendment to the NEPOOL Agreement (Amendment) at the Federal Energy
Regulatory Commission (FERC). Massachusetts Municipal Wholesale Electric
Company and several other electric utilities moved to intervene and protest
the Amendment, claiming that it discriminates against transmission dependent
utilities.
On April 11, 1994, the FERC issued an order setting the Amendment for a
"paper hearing" in May 1994, which date was subsequently extended to
August 9, 1994. The order stated that FERC intends to address whether the
Amendment eliminates transmission access and the discounted rates for pool-
planned units. FERC also broadened the proceeding to consider whether
NEPOOL's activities in this are consistent with the standards of the Federal
Power Act. On July 25, 1994 the sponsors of the Amendment and the protesting
municipal utilities jointly filed a motion requesting that FERC suspend the
procedural schedule because they had reached an understanding of the terms of
a settlement that would resolve the FERC proceeding, including the withdrawal
of the Amendment. On August 3, 1994, FERC granted this motion and suspended
the procedural schedule for a period of 45 days.
For additional information on this matter, see WMECO's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994 under the caption "Part II.
Other Information - Item 1 - Legal Proceedings.
3. On May 26, 1994, the Massachusetts Department of Public Utilities (DPU)
approved a settlement agreement (Agreement) between WMECO and the
Massachusetts Attorney General under which WMECO's customers will receive a
base rate reduction of approximately $13.3 million over a 20-month period
effective June 1, 1994, and a guarantee of no general base rate increases
before February 1996. This Agreement also settles a number of outstanding
issues including termination, without findings, of all performance review
proceedings regarding the treatment of replacement power costs incurred by
WMECO during outages at Millstone nuclear units from mid-1987 through mid-
1993. In addition, under the Agreement, large-use customers (1,000 kWs or
more of demand) will be offered discounts on their electric bills in return
for providing WMECO with five-years notice of any plans to self-generate or
purchase electricity from a different provider. The combined base rate
reduction and service extension discounts will total five percent for those
larger customers. The Agreement is not expected to have a significant
adverse impact on WMECO's 1994 earnings. Several appeals requesting reversal
of the DPU's approval of the settlement and a stay of the agreement filed
with the Massachusetts Supreme Judicial Court were withdrawn on August 1,
1994.
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders of WMECO held on March 2, 1994,
stockholders voted to fix the number of directors for the ensuing year at
ten. The vote fixing the number of directors at ten was 1,072,471 shares in
favor, representing 100 percent of the issued and outstanding shares of
common stock of WMECO.
At the Annual Meeting, the following ten directors were elected, each by a
vote of 1,072,471 shares in favor, to serve on the Board of Directors for the
ensuing year: Robert G. Abair, Robert E. Busch, John P. Cagnetta, William B.
Ellis, Bernard M. Fox, William T. Frain, Jr., Cheryl W. Grise, John B. Keane,
Hugh C. MacKenzie, and John F. Opeka.
At the Annual Meeting, the following individuals were elected to their
respective positions: John B. Keane as Treasurer of the Company; and Janice
P. Jacque as Clerk of the Company.
Item 5. Other Information
1. The Department of Public Utility Control (DPUC) and the DPU have joined
with the Connecticut and Massachusetts Attorneys General and eighteen other
states in a lawsuit filed in federal court against the Department of Energy
(DOE), seeking a declaratory judgment that DOE has a statutory obligation to
take high-level nuclear waste from utilities in 1998 and to establish
judicially administered milestones to enforce that obligation. NU and its
affiliates have not joined a companion lawsuit filed by fourteen utilities
seeking similar relief.
2. As of July 1, 1994, the Barnwell, South Carolina low-level radioactive
waste (LLRW) facility is no longer available for the disposal of LLRW from
states situated outside its compact region. The NU System is currently
implementing plans for the temporary on-site storage of LLRW generated at its
nuclear facilities. The costs associated with temporary on-site storage of
LLRW are not material. The NU System has plans that will allow for the
storage of LLRW until permanent storage becomes available.
For additional information on this matter, see the 1993 Form 10-K, under the
caption "Item 1. Business - Electric Operations - Nuclear Generation - Low-
Level Radioactive Wastes."
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during this reporting period.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
--------------------------------------
Registrant
Date August 10, 1994 By /s/ Bernard M. Fox
-------------------- ------------------------------
Bernard M. Fox
Vice Chairman and Director
Date August 10, 1994 By /s/ John W. Noyes
-------------------- ------------------------------
John W. Noyes
Vice President and
Controller
