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File No. 1-2301
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-3A-2
Statement by Holding Company Claiming Exemption Under
Rule U-3A-2 from the Provisions of the Public Utility
Holding Company Act of 1935
BOSTON EDISON COMPANY
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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. In support of such claim for
exemption the following information is submitted:
1. Boston Edison Company (the "Company") is a Massachusetts electric utility
company and a holding company organized in Massachusetts with its
principal office at 800 Boylston Street, Boston, Massachusetts. One of
its wholly owned subsidiaries is Harbor Electric Energy Company (HEEC), a
Massachusetts electric utility company which also has its principal office
at 800 Boylston Street, Boston, Massachusetts. Boston Energy Technology
Group, Inc. (BETG), is also a wholly owned subsidiary of the Company, and
neither it nor its subsidiaries engage in regulated utility activities.
BETG has four wholly owned subsidiaries, Boston Edison Services, Inc.,
BecoCom, Inc., Coneco Corporation and RZT Corporation. In addition, BETG
owns 75% of Northwind Boston, L.L.C., Boston Edison Services, Inc. owns
50% of EnergyVision, L.L.C., and BecoCom, Inc. owns 49% of RCN-BecoCom,
L.L.C.
The Company engages principally in the generation, purchase, transmission,
distribution and sale of electric energy. HEEC was formed to engage
principally in the distribution of electric energy from the Company to a
large retail electric customer of the Company, the Massachusetts Water
Resources Authority, for use in the construction and operation of its
wastewater treatment facilities located on Deer Island in Boston,
Massachusetts. HEEC may in the future engage in the generation,
transmission, distribution or sale of electric energy and steam.
The Company is in the process of obtaining the regulatory and other
approvals necessary to reorganize itself as a subsidiary of a holding
company. As part of the revised structure, both Boston Edison Company and
BETG would become subsidiaries of the holding company, BEC Energy. HEEC
would remain a subsidiary of Boston Edison Company, and BETG's various
subsidiaries will remain direct or indirect subsidiaries of BETG as noted
above. To date, the Company's plan of reorganization has been approved by
the Company's common shareholders, the Federal Energy Regulatory
Commission and the Nuclear Regulatory Commission. The Company has applied
for the approval of the Massachusetts Department of Telecommunications and
Energy (DTE) and expects to receive the Department's ruling on its
application in March 1998. Approval of the Securities and Exchange
<PAGE> 2
Commission is pending. The Company anticipates consummating the
reorganization in the second quarter of 1998.
2. Properties Used for Generation
------------------------------
Within Massachusetts, the properties of the Company used for the
generation of electric energy as of December 31, 1997, which are 100%
owned, include three steam-electric generating stations, one of which is
nuclear (678,000 kilowatts (kW)) and two of which are fueled by oil and
natural gas (total 1,803,530 kW), and ten combustion turbine generators
(total 238,944 kW). The Company's total generating capability within
Massachusetts is 2,720,474 kW.
The Company has a 5.8881% joint ownership interest in Wyman Unit #4
operated by Central Maine Power Company and located in Yarmouth, Maine.
Through this interest, the Company's generating capability outside
Massachusetts as of December 31, 1997 is 37,300 kW.
Including the power contract with Wyman Unit #4, the Company's total
generating capability is 2,757,774 kW, of which 98.6% is intrastate and
1.4% is located outside Massachusetts.
On December 10, 1997, the Company entered into a purchase and sale
agreement with Sithe Energies, Inc., a privately held company
headquartered in New York, to purchase its non-nuclear generating
assets. The Company anticipates finalization of the divestiture in
mid-1998.
Properties Used for Transmission
--------------------------------
The Company's transmission system as of December 31, 1997, consists of
362 miles of overhead circuits operating at 115,000 volts, 230,000 volts
and 345,000 volts and 156 miles of underground circuits operating at
115,000 volts and 345,000 volts. All 518 miles of circuits and the
Company's substations are located within Massachusetts. The Company has
an 80% joint ownership interest with another electric utility in the
Medway-Card Street line which is 16 miles of circuits extending from West
Medway, Massachusetts to the Massachusetts-Rhode Island border, at which
point the Company's ownership terminates. This 16-mile circuit is
included in the total amount of overhead circuits described above and
constitutes only 3.1% of the Company's entire transmission system as
measured in miles of circuit. The Company also has a 5.8881% interest
in a transmission substation located in Yarmouth, Maine as part of its
ownership interest in the Wyman Unit #4 generating station discussed
above.
The Company owns 4.5% of the voting shares and has a 6.55% non-voting
interest in the New England Hydro-Transmission Electric Company, Inc., a
Massachusetts corporation which owns the Massachusetts portions of the
high voltage direct current (HVDC) interconnection which extends to the
Canadian border. The Company also owns 4.5% of the voting shares and has
a 6.55% non-voting interest in the New England Hydro-Transmission
Corporation, a New Hampshire corporation which owns the New Hampshire
portion of the HVDC interconnection.
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Properties Used for Distribution
--------------------------------
All properties of the Company used for the distribution of electric
energy, including circuits, substations, and stations, are located within
Massachusetts.
HEEC's distribution system at December 31, 1997, consists principally of a
4.09 mile 115,000 volt (submarine cable) distribution line and a
substation located on Deer Island in Boston, Massachusetts. HEEC's entire
distribution system is located in Massachusetts.
3. Boston Edison Company. In the year ended December 31, 1997, the Company:
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(a) - (c) Sold at retail (including unbilled kilowatt-hours (kWh))
13,156,541,000 kWh of electric energy all within Massachusetts
as the Company is permitted to make retail sales only in its
franchise area which is the city of Boston and 39 surrounding
cities and towns in Massachusetts. Sold wholesale
4,285,143,000 kWh of electric energy mostly to customers
located inside Massachusetts of which 38% was sold to the New
England Power Exchange (NEPEX) headquartered in Massachusetts;
26% was sold to municipal electric systems and public
authorities located within Massachusetts; 22% was sold to
public utility companies headquartered in Massachusetts; 13.9%
was sold to United Illuminating and Northeast Utilities
(headquartered in Connecticut), and 0.1% was sold to other
utilities outside Massachusetts. Electric energy sold to
utility companies outside of Massachusetts was delivered at
tie points between the Company and other utilities located
within Massachusetts and represented 3.5% of the Company's
total sales (both wholesale and retail) of 17,441,684,000 kWh.
(d) Purchased 6,901,458,000 kWh of electric energy. 23% was
purchased from outside Massachusetts. 46% was purchased from
public authorities and non-utility generators located in
Massachusetts. The remaining purchases consisted of 13% from
NEPEX and 19% from Canal Electric Company, New England Power
Company and Commonwealth Electric, all of which are located in
Massachusetts.
Harbor Electric Energy Company. In the year ended December 31, 1997,
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HEEC:
(a) - (d) did not sell electric energy at wholesale or retail either
within Massachusetts or outside of the state and did not
purchase any electric energy from outside of Massachusetts.
4. Not applicable
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Exhibit A
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A consolidating statement of income and retained earnings of Boston Edison
Company and its subsidiaries for the year ended December 31, 1997 and a
consolidating balance sheet as of December 31, 1997 are also filed herewith.
Boston Edison Company has caused this statement to be duly executed on its
behalf by an authorized officer on this day.
Boston Edison Company
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Claimant
/s/ Robert J. Weafer, Jr.
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Robert J. Weafer, Jr.
Vice President - Finance,
Controller and Chief Accounting
Officer - Boston Edison Company
and Assistant Treasurer -
Harbor Electric Energy Company
February 27, 1998
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Date
Exhibit C
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Not applicable
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<TABLE>
BOSTON EDISON COMPANY
Consolidating Statement of Income and Retained Earnings
For the year ended December 31, 1997
(in thousands, except earnings per share)
<CAPTION>
Boston Harbor Electric Boston Energy Eliminating
Edison Co. Energy Co. Technology Group Entries Consolidated
---------- --------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Operating revenues $1,768,712 $7,521 $ 0 $1,776,233
Operating expenses:
Fuel and purchased power 679,131 0 0 679,131
Operations and maintenance 413,933 846 0 414,779
Depreciation and amortization 186,934 1,753 0 188,687
Demand side management programs 29,790 0 0 29,790
Taxes - property and other 106,560 1,415 0 107,975
Income taxes 94,531 490 0 95,021
---------- ------ -------- ----------
Total operating expenses 1,510,879 4,504 0 1,515,383
---------- ------ -------- ----------
Operating income 257,833 3,017 0 260,850
Other income (expense), net (1,705) 303 (9,096) (10,498)
---------- ------ -------- ----------
Operating and other income 256,128 3,320 (9,096) 250,352
Interest charges:
Long-term debt 89,936 2,553 0 92,489
Other 14,403 7 0 14,410
Allowance for borrowed funds
used during construction (1,189) 0 0 (1,189)
---------- ------ -------- ----------
Total interest charges 103,150 2,560 0 105,710
---------- ------ -------- ----------
Net income (loss) 152,978 760 (9,096) 144,642
Preferred stock dividends 13,149 0 0 13,149
---------- ------ -------- ------ ----------
Earnings available for common
shareholders $ 139,829 $ 760 $(9,096) $ 0 $ 131,493
========== ====== ======== ====== ==========
Common shares outstanding
(weighted average) 48,515
Earnings per share of common
stock - basic and diluted $2.71
==========
Retained Earnings:
- -----------------
Balance at beginning of year $ 290,865 $2,750 $(5,524) $4,100 $ 292,191
Net income (loss) 152,978 760 (9,096) 0 144,642
---------- ------ -------- ------ ----------
Subtotal 443,843 3,510 (14,620) 4,100 436,833
Dividends declared:
Preferred stock 13,149 0 0 13,149
Common stock 91,208 1,100 0 (1,100) 91,208
---------- ------ -------- ------ ----------
Subtotal 104,357 1,100 0 (1,100) 104,357
---------- ------ -------- ------ ----------
Provision for preferred stock
redemptions and issuance costs 3,674 0 0 0 3,674
---------- ------ -------- ------ ----------
Balance at end of year $ 335,812 $2,410 $(14,620) $5,200 $ 328,802
========== ====== ======== ====== ==========
</TABLE>
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<TABLE>
BOSTON EDISON COMPANY
Consolidating Balance Sheet
For the year ended December 31, 1997
(in thousands)
<CAPTION>
Boston Eliminating
Boston Harbor Energy Entries
Edison Electric Technology ----------------
Co. Energy Co. Group Total Dr. Cr. Consolidated
---------- ---------- ---------- ----------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Plant investment $4,416,816 $40,245 $ 806 $4,457,867 $4,457,867
Construction work in progress 33,291 770 7,342 41,403 41,403
Accumulated depreciation (1,703,281) (9,786) (11) (1,713,078) (1,713,078)
---------- ------- ------- ---------- ----------
Net plant 2,746,826 31,229 8,137 2,786,192 2,786,192
---------- ------- ------- ---------- ----------
Nuclear fuel, net 67,935 0 0 67,935 67,935
Nuclear decommissioning trust 151,634 0 0 151,634 151,634
Investment in Harbor Electric
Energy Co. 2,101 0 0 2,101 $ 2,101 0
Investment in Boston Energy
Technology Group 12,729 0 0 12,729 12,729 0
Equity investments 23,326 0 12,129 35,455 35,455
Other investments 7,107 0 0 7,107 7,107
Due from affiliates 23,338 0 0 23,338 23,338 0
Current assets:
Cash and cash equivalents 1,955 328 1,857 4,140 4,140
Accounts receivable 181,790 1,239 9,191 192,220 192,220
Accrued unbilled revenues 30,048 0 0 30,048 30,048
Fuel, materials and
supplies 58,911 0 1,923 60,834 60,834
Prepaids and other 31,214 21 48 31,283 31,283
---------- ------- ------- ---------- ----------
Total current assets 303,918 1,588 13,019 318,525 318,525
---------- ------- ------- ---------- ----------
Deferred debits:
Regulatory assets 220,403 0 0 220,403 220,403
Other 30,414 2 4,680 35,096 35,096
---------- ------- ------- ---------- ------- ------- ----------
Total assets $3,589,731 $32,819 $37,965 $3,660,515 $ 0 $38,168 $3,622,347
========== ======= ======= ========== ======= ======= ==========
CAPITALIZATION AND LIABILITIES
Common stock equity $1,085,664 $ 4,511 $(1,891) $1,088,284 $14,830 $1,073,454
Cumulative preferred stock 161,093 0 0 161,093 161,093
Long-term debt 1,030,000 27,076 0 1,057,076 1,057,076
---------- ------- ------- ---------- ------- ----------
Total capitalization 2,276,757 31,587 (1,891) 2,306,453 14,830 2,291,623
---------- ------- ------- ---------- ------- ----------
Current liabilities:
Due to affiliates 0 145 23,193 23,338 23,338 0
Long-term debt/preferred
stock due within one year 102,000 667 0 102,667 102,667
Notes payable 129,500 0 7,513 137,013 137,013
Accounts payable 80,352 0 6,663 87,015 87,015
Other 173,883 2,155 1,060 177,098 177,098
---------- ------- ------- ---------- ------- ----------
Total current liabilities 485,735 2,967 38,429 527,131 23,338 503,793
---------- ------- ------- ---------- ------- ----------
Deferred credits:
Accumulated deferred
income taxes 486,536 (735) (63) 485,738 485,738
Accumulated deferred
investment tax credits 60,736 0 0 60,736 60,736
Power contracts 71,445 0 0 71,445 71,445
Nuclear decommissioning
liability 155,182 0 0 155,182 155,182
Other 53,340 (1,000) 1,490 53,830 53,830
---------- ------- ------- ---------- ------- ------- ----------
Total capitalization and
liabilities $3,589,731 $32,819 $37,965 $3,660,515 $38,168 $ 0 $3,622,347
========== ======= ======= ========== ======= ======= ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR3
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> $3,622,347
<TOTAL-OPERATING-REVENUES> $1,776,233
<NET-INCOME> $144,642
</TABLE>
