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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549-1004
Form 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______________ to _______________
Commission file number 2-7909
CAMBRIDGE ELECTRIC LIGHT COMPANY
(Exact name of registrant as specified in its charter)
Massachusetts 04-1144610
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Main Street, Cambridge, Massachusetts 02142-9150
(Address of principal executive offices) (Zip Code)
(617) 225-4000
(Registrant's telephone number, including area code)
(Former name, address and 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.
Outstanding at
Class of Common Stock August 1, 1995
Common Stock, $25 par value 346,600 shares
The Company meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-K as a wholly-owned subsidiary and is therefore filing this
Form with the reduced disclosure format.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CAMBRIDGE ELECTRIC LIGHT COMPANY
CONDENSED BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
ASSETS
(Unaudited)
June 30, December 31,
1995 1994
(Dollars in Thousands)
PROPERTY, PLANT AND EQUIPMENT, at original cost $152 417 $148 855
Less - Accumulated depreciation 57 692 55 618
94 725 93 237
Add - Construction work in progress 2 657 3 541
97 382 96 778
INVESTMENTS
Equity in nuclear electric power companies 9 304 9 164
Other 5 5
9 309 9 169
CURRENT ASSETS
Cash 272 376
Accounts receivable
Affiliates 906 917
Customers 11 393 9 835
Unbilled revenues 3 411 3 088
Prepaid property taxes - 1 702
Inventories and other 1 745 2 111
17 727 18 029
DEFERRED CHARGES
Yankee Atomic purchased power contract 7 186 8 163
Other 6 320 5 570
13 506 13 733
$137 924 $137 709
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CAMBRIDGE ELECTRIC LIGHT COMPANY
CONDENSED BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
CAPITALIZATION AND LIABILITIES
(Unaudited)
June 30, December 31,
1995 1994
(Dollars in Thousands)
CAPITALIZATION
Common Equity -
Common stock, $25 par value -
Authorized and outstanding -
346,600 shares, wholly-owned by
Commonwealth Energy System (Parent) $ 8 665 $ 8 665
Amounts paid in excess of par value 27 953 27 953
Retained earnings 7 547 7 166
44 165 43 784
Long-term debt, including premiums, less
current sinking fund requirements 21 866 42 027
66 031 85 811
CURRENT LIABILITIES
Interim Financing -
Notes payable to banks - 2 175
Maturing long-term debt 20 000 -
Advances from affiliates 7 275 550
27 275 2 725
Other Current Liabilities -
Current sinking fund requirements 160 160
Accounts payable
Affiliates 3 750 4 212
Other 6 392 8 359
Accrued taxes -
Local property and other 24 1 711
Income 147 667
Accrued interest 1 008 994
Other 3 332 1 878
14 813 17 981
42 088 20 706
DEFERRED CREDITS
Accumulated deferred income taxes 12 941 12 639
Unamortized investment tax credits 1 987 2 035
Yankee Atomic purchased power contract 7 186 8 163
Other 7 691 8 355
29 805 31 192
COMMITMENTS AND CONTINGENCIES
$137 924 $137 709
See accompanying notes.
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CAMBRIDGE ELECTRIC LIGHT COMPANY
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
Three Months Ended Six Months Ended
1995 1994 1995 1994
(Dollars in Thousands)
ELECTRIC OPERATING REVENUES $30 787 $31 659 $61 113 $64 880
OPERATING EXPENSES
Electricity purchased for resale,
transmission and fuel 19 217 20 452 40 294 42 634
Other operation and maintenance 6 460 6 163 12 339 12 099
Depreciation 1 038 1 017 2 076 2 034
Taxes -
Income 677 756 772 1 581
Local property 745 713 1 517 1 438
Payroll and other 205 183 462 425
28 342 29 284 57 460 60 211
OPERATING INCOME 2 445 2 375 3 653 4 669
OTHER INCOME 66 45 285 375
INCOME BEFORE INTEREST CHARGES 2 511 2 420 3 938 5 044
INTEREST CHARGES
Long-term debt 945 948 1 891 1 897
Other interest charges 219 62 313 175
Allowance for borrowed funds
used during construction (26) (13) (51) (5)
1 138 997 2 153 2 067
NET INCOME 1 373 1 423 1 785 2 977
RETAINED EARNINGS -
Beginning of period 6 573 7 712 7 166 7 056
Dividends on common stock (399) (1 074) (1 404) (1 972)
RETAINED EARNINGS -
End of period $ 7 547 $ 8 061 $ 7 547 $ 8 061
See accompanying notes.
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CAMBRIDGE ELECTRIC LIGHT COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
(Dollars in Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1 785 $ 2 977
Effects of noncash items -
Depreciation and amortization 2 202 2 177
Deferred income taxes and investment tax
credits, net 7 941
Earnings from corporate joint ventures (542) (577)
Dividends from corporate joint ventures 402 360
Change in working capital, exclusive of cash and
interim financing (2 970) (83)
All other operating items (1 202) (2 603)
Net cash provided by (used for)
operating activities (318) 3 192
CASH FLOWS FOR INVESTING ACTIVITIES
Additions to property, plant and equipment
(exclusive of AFUDC) (2 720) (1 307)
Allowance for borrowed funds used during
construction (51) (5)
Net cash used for investing activities (2 771) (1 312)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of dividends (1 404) (1 972)
Payment of short-term borrowings (2 175) (2 000)
Advances from affiliates 6 725 1 040
Sinking funds payments (161) (162)
Net cash provided by (used for)
financing activities 2 985 (3 094)
Net decrease in cash (104) (1 214)
Cash at beginning of period 376 1 624
Cash at end of period $ 272 $ 410
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest (net of capitalized amounts) $ 2 016 $ 1 893
Income taxes $ 1 492 $ 716
See accompanying notes.
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CAMBRIDGE ELECTRIC LIGHT COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
(1) Accounting Policies
Cambridge Electric Light Company (the Company) is a wholly-owned subsid-
iary of Commonwealth Energy System. The parent company is referred to in
this report as the "System" and together with its subsidiaries is collec-
tively referred to as "the system."
The Company's significant accounting policies are described in Note 1 of
Notes to Financial Statements included in its 1994 Annual Report on
Form 10-K filed with the Securities and Exchange Commission. For interim
reporting purposes, the Company follows these same basic accounting policies
but considers each interim period as an integral part of an annual period
and makes allocations of certain expenses to interim periods based upon
estimates of such expenses for the year.
The Company has established various regulatory assets in cases where the
Massachusetts Department of Public Utilities (DPU) and/or the Federal Energy
Regulatory Commission have permitted or are expected to permit recovery of
specific costs over time. Similarly, certain regulatory liabilities estab-
lished by the Company are required to be refunded to its customers over
time. In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
(SFAS 121). SFAS 121 imposes stricter criteria for regulatory assets by
requiring that such assets be probable of future recovery at each balance
sheet date. Based on the current regulatory framework, the Company accounts
for the economic effects of regulation in accordance with the provisions of
SFAS No. 71, "Accounting for the Effects of Certain Types of Regulation" and
does not expect that SFAS 121, which the Company expects to adopt on January
1, 1996, will have a material impact on its financial position or results of
operations. However, this conclusion may change in the future if changes
are made in the current regulatory framework or as competitive factors
influence wholesale and retail pricing in this industry. The principal
regulatory assets included in deferred charges at June 30, 1995 and December
31, 1994 were as follows:
June 30, December 31,
1995 1994
(Dollars in Thousands)
Yankee Atomic unrecovered plant and
decommissioning costs $ 7 186 $ 8 163
Postretirement benefit costs including
pensions 2 637 2 304
Other 1 223 763
Total regulatory assets $11 046 $11 230
The principle regulatory liabilities, reflected in the accompanying
balance sheets and relating to deferred income taxes were $5 million at June
30, 1995 and $3.7 million at December 31, 1994.
Income tax expense is recorded using the statutory rates in effect
applied to book income subject to tax recorded in the interim period.
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CAMBRIDGE ELECTRIC LIGHT COMPANY
The unaudited financial statements for the periods ended June 30, 1995
and 1994 reflect, in the opinion of the Company, all adjustments (consisting
of only normal recurring accruals) necessary to summarize fairly the results
for such periods. In addition, certain prior period amounts are reclass-
ified from time to time to conform with the presentation used in the current
period's financial statements.
The results for interim periods are not necessarily indicative of
results for the entire year because of seasonal variations in the consump-
tion of energy.
(2) Commitments and Contingencies
(a) Construction Program
The Company is engaged in a continuous construction program presently
estimated at $33.7 million for the five-year period 1995 through 1999. Of
that amount, $9.3 million is estimated for 1995, the majority of which is
scheduled to be expended in the second half of the year. As of June 30,
1995 the Company's actual construction expenditures amounted to $2.8
million, including an allowance for funds used during construction. The
Company expects to finance these expenditures on an interim basis with
internally generated funds and short-term borrowings which are ultimately
expected to be repaid with the proceeds from sales of long-term debt and
equity securities.
The program is subject to periodic review and revision because of
factors such as changes in business conditions, rates of customer growth,
effects of inflation, maintenance of reliable and safe service, equipment
delivery schedules, licensing delays, availability and cost of capital and
environmental regulations.
(b) Decommissioning of Nuclear Power Plants
Yankee Atomic Nuclear Power Plant
In February 1992, the Board of Directors of Yankee Atomic Electric
Company (Yankee Atomic) agreed to permanently discontinue power operation
and decommission the Yankee Nuclear Power Station (the Plant). The Company
has a 2% ownership interest in Yankee Atomic, which provided less than 1% of
the Company's capacity. Presently, purchased power costs, which include a
provision for ultimate decommissioning of the unit, are billed to the
Company and collected from customers. The most recent cost estimate to
permanently shut down the Plant is approximately $396 million. The
Company's share of this liability is $7.2 million and is currently reflected
in the accompanying balance sheets as a liability and corresponding
regulatory asset. The market value of the Company's share of assets in the
Plant's decommissioning fund is approximately $2.2 million.
Other Nuclear Plants
The Company also has equity ownership interests ranging from 2.5% to
4.5% in three operating nuclear generating facilities located in New England
with contract expiration dates ranging from 2007 to 2012. The Company is
obligated to pay its proportionate share of the capacity and energy costs
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CAMBRIDGE ELECTRIC LIGHT COMPANY
associated with these units, which include depreciation, operations and
maintenance, a return on invested capital and the estimated cost of
decommissioning the plants at the end of their estimated service lives. The
Company's estimated total decommissioning cost and associated market value
share of decommissioning trust assets for these units is approximately $36
million and $13.3 million, respectively.
(c) Maine Yankee Nuclear Power Plant
One of the operating nuclear generating facilities that the Company has
an equity ownership interest in, the Maine Yankee Nuclear Power Plant,
operated by Maine Yankee Atomic Power Company (Maine Yankee), has been
experiencing degradation of its steam generator tubes, principally in the
form of circumferential cracking, which until early 1995 was believed to be
limited to a relatively small number of tubes. During a refueling and
maintenance outage that began in early February 1995, Maine Yankee, through
the use of new inspection methods, detected increased degradation involving
approximately 60% of the tubes which was well beyond Maine Yankee's
expectations.
After carefully evaluating alternative courses of action to remedy this
situation, Maine Yankee announced in late May that it will begin repairs by
sleeving all 17,000 steam generator tubes. This repair technique is a
proven safe and technologically sound option commonly used in plants
throughout the United States and the world. The repairs are estimated to
cost approximately $40 million including the Company's share of $1.6
million. Repairs began in June 1995 and are expected to be completed by the
end of this year.
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CAMBRIDGE ELECTRIC LIGHT COMPANY
Item 2. Management's Discussion and Analysis of Results of Operations
The following is a discussion of certain significant factors which have
affected operating revenues, expenses and net income during the periods
included in the accompanying condensed statements of income. This discussion
should be read in conjunction with the Notes to Condensed Financial Statements
appearing elsewhere in this report.
A summary of the period to period changes in the principal items included in
the condensed statements of income for the three and six months ended June 30,
1995 and 1994 and unit sales for these periods is shown below:
Three Months Six Months
Ended June 30, Ended June 30,
1995 and 1994 1995 and 1994
Increase (Decrease)
(Dollars in Thousands)
Electric Operating Revenues $ (872) (2.8)% $(3 767) (5.8)%
Operating Expenses -
Electricity purchased for
resale, transmission and fuel (1 235) (6.0) (2 340) (5.5)
Other operation and maintenance 297 4.8 240 2.0
Depreciation 21 2.1 42 2.1
Taxes -
Local property and other 54 6.0 116 6.2
Federal and state income (79) (10.4) (809) (51.2)
(942) (3.2) (2 751) (4.6)
Operating Income 70 2.9 (1 016) (21.8)
Other Income 21 46.7 (90) (24.0)
Income Before Interest Charges 91 3.8 (1 106) (21.9)
Interest Charges 141 14.1 86 4.2
Net Income $ (50) (3.5) $(1 192) (40.0)
Unit Sales (MWH)
Retail 7 481 2.4 12 533 1.9
Sales for resale (48 497) (64.7) (136 287) (69.3)
Total unit sales (41 016) (10.4) (123 754) (14.6)
The following is a summary of unit sales for the periods indicated:
Unit Sales (MWH)
Three Months Six Months
Period Ended Total Retail Wholesale Total Retail Wholesale
June 30, 1995 351 925 325 507 26 418 722 737 662 311 60 426
June 30, 1994 392 941 318 026 74 915 846 491 649 778 196 713
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CAMBRIDGE ELECTRIC LIGHT COMPANY
Operating Revenues, Electricity Purchased For Resale, Transmission and Fuel
For the first six months of 1995, operating revenues decreased $3.8 million
or 5.8% due primarily to declines in wholesale sales, electricity purchased
for resale, transmission, fuel and conservation and load management (C&LM)
costs offset, in part, by higher retail unit sales. The second quarter
decline in operating revenues of $872,000 or 2.8% was due primarily to a lower
level of wholesale unit sales.
The DPU has granted approval for the Company to recover in revenues certain
current costs associated with the C&LM programs through a Conservation Charge
decimal on a dollar-for-dollar basis. To the extent that these expenses
increase or decrease from period to period based on customer participation, a
corresponding change will occur in revenues. For the first half of 1995,
revenues associated with C&LM charges declined nearly 53% or $333,000.
Historically, revenues collected through base rates have been designed to
reimburse the Company for all costs of operation other than fuel, the energy
portion of purchased power, transmission and C&LM program costs, and provide a
fair return on capital invested in the business. However, as a result of a
DPU-mandated recovery mechanism for capacity-related costs associated with
certain long-term purchased power contracts, the Company has experienced a
revenue excess or short fall when unit sales and/or the costs recoverable in
base rates vary from test-period levels. This issue, which has had a
significant impact on net income, was addressed in a settlement agreement
approved by the DPU in May 1995. (Refer to the "Rate Settlement Agreement"
section for additional details.) During the second quarter of 1995, as a
result of the settlement, the first quarter's undercollection of $634,000 was
deferred for future recovery. The impact of this deferral on net income was
approximately $385,000 compared to an after-tax overcollection of $248,000 in
1994. For the current six-month period, undercollected costs amounted to
$591,000 compared to an overcollection of $1.5 million for the same period in
1994. There was no impact on net income for the current six-month period due
to the deferral mechanism established in the settlement. However, for the
same period in 1994, the overcollection led to an $898,000 after-tax impact on
net income.
Retail unit sales increased during the current quarter by 2.4% and reflect
improvements in the industrial (4.1%), commercial (2.3%) and residential (2%)
sectors. For the current six-month period, retail unit sales increased 1.9%
despite a decline in the residential sector that reflects the extremely mild
weather conditions during the first quarter compared to a colder than normal
first quarter in 1994. The significant decrease in wholesale sales for the
current quarter and six-month period reflects a lower level of sales to the
New England Power Pool due to changes in the Company's capacity needs.
Fluctuations in the level of wholesale sales have little, if any, impact on
net income.
Electricity purchased for resale, transmission and fuel costs decreased by
$1.2 million or 6% and $2.3 million or 5.5% for the respective current quarter
and six-month periods due primarily to a combination of both scheduled and
unscheduled maintenance at affiliate Canal Electric Company's Unit 1, reduced
power purchases from an independent power producer and the unscheduled outage
at Maine Yankee. (See Item 1 of this report.)
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CAMBRIDGE ELECTRIC LIGHT COMPANY
Other Operation and Maintenance
For the first half of 1995 other operation and maintenance increased
$240,000 due to higher labor and benefit costs ($618,000), higher maintenance
costs associated with Kendall Station and the transmission and distribution
system ($181,000), an increase in the provision for bad debts ($38,000) and
higher affiliated services company charges ($28,000). These costs were
partially offset by lower C&LM costs ($508,000) and the absence of a reserve
($110,000) recorded in 1994 for the Company's anticipated share of site clean-
up costs that were associated with certain hazardous wastes. The 4.8%
increase during the second quarter was due primarily to higher labor and
benefit costs ($277,000).
Depreciation and Taxes
For the current quarter and six-month period, depreciation expense increased
2.1% due to higher levels of depreciable plant. For the six-month period, the
significant decline in federal and state income taxes (51.2%) was due to a
lower level of pretax income ($2 million). The 6.2% increase in local
property and other taxes was due to higher rates and assessments ($79,000) and
an increase in payroll-related taxes ($37,000).
Other Income and Interest Charges
Other income declined approximately $90,000 or 24% during the current six-
month period due primarily to a lower level of equity earnings and the timing
of dividend payments associated with the Company's investment in nuclear
generating companies ($77,000) and a lower level of interest relating to a
Massachusetts sales tax abatement ($56,000). This decline was offset, in
part, by the partial reversal of a contingency reserve related to certain
costs associated with the Company's C&LM programs ($47,000), the recovery of
which has since been approved by the DPU.
Interest charges for the current six-month period increased 4.2% due to an
increase in short-term interest expense ($138,000) resulting from a higher
level of short-term borrowings primarily from affiliated companies and higher
interest rates which averaged 6.1% compared to 3.7% for the same period in
1994. This was offset, somewhat, by an increase in the debt component of
allowance for funds used during construction ($46,000) due to a greater level
of construction activity. The 14.4% increase during the current quarter was
due primarily to the higher level of short-term borrowings and higher interest
rates.
Regulatory Matters
(a) Rate Settlement Agreement
On May 1995, the DPU approved a settlement proposal sponsored jointly by the
Company and the Attorney General of Massachusetts which resolved issues
related to cost of service, rates, accounting and generating unit performance
reviews. The Company's settlement:
(1) implements a $1.5 million refund to customers through the Fuel Charge
during the third and fourth quarters of 1995 including its share of
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CAMBRIDGE ELECTRIC LIGHT COMPANY
excess deferred tax reserves related to Seabrook Unit No. 1 ($1.3
million) which Canal refunded to the Company in May;
(2) allows the Company to defer certain long-term purchased power and
transmission capacity costs in excess of the amount of such capacity
costs currently included in the Company's base rates up to an annual
amount of $2 million for recovery in its next general retail base rate
proceeding;
(3) prohibits the Company from seeking recovery of costs it incurred in
realizing costs savings through a 1993 work force reduction and
restructuring, totaling approximately $400,000; and
(4) includes the DPU's withdrawal of all related requests, appeals,
motions or other issues raised by parties regarding certain generating
unit performance reviews.
The Company's management is encouraged by the support provided through the
Office of the Attorney General and believes that this settlement will
eliminate the need for potentially costly litigation and regulatory
proceedings and, by moderating rate impacts and enabling the Company to remain
competitive in a changing environment, is in the best interest of the Company
and its customers.
(b) Rate Tariff Filing
On March 15, 1995, the Company filed four rate tariffs with the DPU to
establish rates for its largest customers should they decide to generate their
own power or purchase from another source while remaining in Cambridge. In an
effort to protect its other customers from increased costs, the Company has
requested that these large customers pay their share of the costs that were
incurred on their behalf to ensure that their energy needs will be met at all
times. These costs include long-term power contracts entered into to meet
projected energy requirements, investments in substations, underground and
overhead lines and current and future decommissioning costs associated with
nuclear plants. A ruling is expected from the DPU in 1995.
Power Contract Arbitration
On June 7, 1995, a three-member panel of arbitrators upheld the
termination by the Company of a power contract with Eastern Energy Corporation
(Eastern), the developer of a proposed 300 MW coal-fired plant. In June 1989,
the Company agreed to buy 11% (33 MW) of the power to be produced by the
proposed plant, originally scheduled to begin operation in January 1992.
However, in May 1994, the Company gave notice of termination of its power
contract with Eastern based upon its failure to meet the permitting, con-
struction or operation milestones established by the contract, obtain the
required permits, commence construction or sell any additional power from the
proposed plant. Efforts to reshape the power contract to provide a
satisfactory arrangement were unsuccessful. In a letter dated June 30, 1994,
Eastern objected to the notice of termination and invoked arbitration seeking
$20.8 million from the Company. The panel's decision is binding and prevents
Eastern from further litigating or contesting the termination of the contract
in any other forum. This action is expected to save the Company's customers
approximately $40 million over the next ten years and as much as $90 million
over twenty years.
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CAMBRIDGE ELECTRIC LIGHT COMPANY
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is subject to legal claims and matters arising from
its course of business, including its participation in a power
contract arbitration proceeding involving the Company's decision to
cancel a power contract with Eastern Energy Corporation which was
upheld by a binding arbitration panel decision in June 1995 (refer
to "Power Contract Arbitration" in Part I, Item 2 - "Management's
Discussion and Analysis of Results of Operations" section of this
report).
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10 - Material Contracts.
10.1.28.2 First Amendment, dated November 7, 1994, to Power Sale
Agreement by and between the Company and Altresco
Pittsfield, L.P. dated February 20, 1992 (Filed herewith
as Exhibit 2).
Exhibit 27 - Financial Data Schedule.
Filed herewith as Exhibit 1 is the Financial Data
Schedule for the six months ended June 30, 1995.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended
June 30, 1995.
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CAMBRIDGE ELECTRIC LIGHT COMPANY
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 thereunto duly authorized.
CAMBRIDGE ELECTRIC LIGHT COMPANY
(Registrant)
Principal Financial Officer:
JAMES D. RAPPOLI
James D. Rappoli,
Financial Vice President
and Treasurer
Principal Accounting Officer:
JOHN A. WHALEN
John A. Whalen,
Comptroller
Date: August 14, 1995
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheet, statement of income and statement of cash flows contained in
Form 10-Q of Cambridge Electric Light Company for the six months ended June
30, 1995 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000016573
<NAME> CAMBRIDGE ELECTRIC LIGHT COMPANY
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<PERIOD-TYPE> 6-MOS
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<TOTAL-NET-UTILITY-PLANT> 97,382
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<TOTAL-ASSETS> 137,924
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<PAGE 1>
EXHIBIT 2
AMENDMENT TO POWER SALE AGREEMENT
BY AND BETWEEN CAMBRIDGE ELECTRIC LIGHT COMPANY
AND ALTRESCO PITTSFIELD, L.P.
AMENDMENT dated as of this 7th day of November 1994, by and between Cambridge
Electric Light Company, a Massachusetts corporation with a usual place of
business at 2421 Cranberry Highway, Wareham, Massachusetts ("Company") and
Altresco Pittsfield, L.P., a Delaware limited partnership with a principal
place of business at One Bowdoin Square, Boston, Massachusetts ("Seller"), to
the Power Sale Agreement dated February 20, 1992 ("Agreement").
WHEREAS the Company, pursuant to the Agreement and subject specifically to the
provisions contained in Article 2.1 of the Agreement, purchases 17.2 percent
of the electricity produced by the Seller's electric cogeneration facility,
which is capable of generating approximately one-hundred sixty (160) megawatts
("MW") of electricity and which is located at a site owned by General Electric
in Pittsfield, Massachusetts (the "Facility" or "Unit"); and
WHEREAS, the Total Purchase Price for electricity purchased by the Company
pursuant to Section 1 of Appendix B of the Agreement includes a component
known as the Monthly Energy Charge, which component is defined in Section 3 of
Appendix B of the Agreement; and
WHEREAS, the Monthly Energy Charge is calculated, in part, by reference to the
Tennessee Gas Pipeline Company's ("Tennessee") Current Average Cost of
Purchased Gas, also known as the Weighted Average Cost of Gas ("WACOG"), or
its successor index, as specified in Tennessee's approved Federal Energy
Regulatory Commission ("FERC") Gas Tariff; and
WHEREAS, Tennessee's WACOG ceased to be available as of July, 1992 as a
consequence of the restructuring of Tennessee's services pursuant to FERC
Order No. 636, and no successor index to Tennessee's WACOG exists; and
WHEREAS, the Company and the Seller have agreed upon the terms of an index to
replace Tennessee's WACOG for purposes of calculating the Monthly Energy
Charge, and desire to execute this Amendment for purposes of memorializing
their agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the
Company and the Seller agree as follows:
1. Unless otherwise defined herein, capitalized terms shall have the same
meaning given to them in the Agreement.
2. For the purposes of determining the Monthly Energy Charge as defined in
Section 3 of Appendix B of the Agreement, the first sentence of said
section shall be deleted in its entirety and the following shall be
substituted in place thereof:
The Monthly Energy Charge shall be equal to the product of (i) the Delivered
Energy and (ii) the Kilowatthour Charge,
where the Kilowatthour Charge is equal to the product of (i) one and
thirty-six hundredths cents per kilowatthour ($0.0136/kWh) and (ii) an
index factor represented by the quantity M/N,
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where M shall be equal to the monthly weighted average sum of the
following three fuel components, each expressed in U.S. dollars per
MMBtu:
(a) 50% weighting for the monthly average of the daily quotes
during the Billing Period for No. 6 residual 2.2% sulfur fuel
oil as listed in Platt's Oilgram under the heading "Estimated
New York Harbor Spot Price," using the low cargo quotation, and
assuming 6.3 MMBtu per barrel; and
(b) 40% weighting for the average of the T2 spot price for each of
the twelve (12) months immediately preceding the Billing Peri-
od, where the T2 spot price for any month shall be equal to the
arithmetic average of the following six indices for such month:
the Louisiana & Offshore (zone 1 ) and Texas (zone 0) indices
for Tennessee and the East Louisiana, West Louisiana, East
Texas and South Texas indices for the Texas Eastern Transmis-
sion Corporation, or their successor indices, each as published
in the first of the month edition of Inside F.E.R.C.'s Gas
Market Report, by reference to the table entitled "Prices of
Spot Gas Delivered to Pipelines...," provided that at least
four of the six indices, or their successor indices, are so
published for any month, and if at least four of the six indi-
ces are not so published for any month, the parties shall
determine mutually acceptable substitute indices to use for the
calculation of the T2 spot price; and
(c) 10% weighting for New England Power Company's weighted average
delivered cost of coal as reported in the most recently submit-
ted FERC Form 423 for New England Power Company from time to
time, and
where N is $1.81/MMBtu.
3. The Company shall submit this Amendment to the Massachusetts Department
of Public Utilities for approval. This Amendment shall become effective
upon the receipt of such approvals in form and substance acceptable to
the Company and the Seller.
4. All other terms and conditions of said Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the Company and the Seller have caused this Amendment to
be duly executed as of the day and year first above written.
CAMBRIDGE ELECTRIC LIGHT COMPANY ALTRESCO PITTSFIELD, L.P.
BY JMC ALTRESCO, INC.
ITS GENERAL PARTNER
By: JAMES J. KEANE By: JAMES A. KELLER
James J. Keane
Title: Vice President Title: Vice President
Power Supply & Transmission
