<PAGE 1>
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 September 30, 1997
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 2-30057
CANAL ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Massachusetts 04-1733577
(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 November 1, 1997
Common Stock, $25 par value 1,523,200 shares
The Company meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q 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
CANAL ELECTRIC COMPANY
CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
ASSETS
(Dollars in thousands)
September 30, December 31,
1997 1996
(Unaudited)
PROPERTY, PLANT AND EQUIPMENT, at original cost $465,615 $464,003
Less - Accumulated depreciation and
amortization 195,036 179,307
270,579 284,696
Add - Construction work in progress 4,207 943
Nuclear fuel in process 180 1,597
274,966 287,236
INVESTMENTS
Equity in corporate joint venture 3,300 3,321
CURRENT ASSETS
Cash 13 12
Accounts receivable-
Affiliated companies 9,505 10,294
Other 13,006 12,390
Electric production fuel oil 863 979
Prepaid taxes -
Income - 64
Property 1,260 795
Other 2,418 3,087
27,065 27,621
DEFERRED CHARGES
Regulatory assets 18,375 19,859
Other 9,534 5,486
27,909 25,345
$333,240 $343,523
See accompanying notes.
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CANAL ELECTRIC COMPANY
CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
CAPITALIZATION AND LIABILITIES
(Dollars in thousands)
September 30, December 31,
1997 1996
(Unaudited)
CAPITALIZATION
Common Equity -
Common stock, $25 par value -
Authorized - 2,328,200 shares
Outstanding - 1,523,200 shares,
wholly-owned by Commonwealth
Energy System (Parent) $ 38,080 $ 38,080
Amounts paid in excess of par value 8,321 8,321
Retained earnings 56,252 52,620
102,653 99,021
Long-term debt, including premiums, less
current sinking fund requirements 83,917 83,618
186,570 182,639
CAPITAL LEASE OBLIGATIONS 11,448 11,878
CURRENT LIABILITIES
Interim Financing -
Notes payable to banks 10,075 26,550
Advances from affiliates 2,395 7,250
12,470 33,800
Other Current Liabilities -
Current sinking fund requirements 350 350
Accounts payable -
Affiliated companies 1,171 1,347
Other 21,511 18,123
Accrued taxes -
Income 1,226 -
Local property and other 1,479 795
Capital lease obligations 574 576
Accrued interest and other 6,612 3,986
32,923 25,177
45,393 58,977
DEFERRED CREDITS
Accumulated deferred income taxes 71,271 71,550
Unamortized investment tax credits and other 18,558 18,479
89,829 90,029
COMMITMENTS AND CONTINGENCIES
$333,240 $343,523
See accompanying notes.
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<PAGE 4>
CANAL ELECTRIC COMPANY
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Dollars in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
1997 1996 1997 1996
ELECTRIC OPERATING REVENUES
Sales to affiliated companies $33,075 $27,627 $ 95,382 $ 77,592
Sales to non-affiliated companies 22,162 20,161 66,089 58,192
55,237 47,788 161,471 135,784
OPERATING EXPENSES
Fuel used in production 30,510 21,453 85,562 59,355
Electricity purchased for resale 1,488 2,624 5,467 5,716
Other operation and maintenance 9,183 10,126 27,476 29,374
Depreciation 5,065 4,546 15,196 13,638
Taxes -
Income 2,418 2,277 7,438 7,761
Local property 693 652 2,123 1,885
Payroll and other 190 170 642 593
49,547 41,848 143,904 118,322
OPERATING INCOME 5,690 5,940 17,567 17,462
OTHER INCOME 123 284 361 2,577
INCOME BEFORE INTEREST CHARGES 5,813 6,224 17,928 20,039
INTEREST CHARGES
Long-term debt 1,979 1,983 5,933 6,038
Other interest charges 279 567 1,003 1,574
Allowance for borrowed funds
used during construction (38) (25) (103) (80)
2,220 2,525 6,833 7,532
NET INCOME 3,593 3,699 11,095 12,507
RETAINED EARNINGS -
Beginning of period 56,314 52,089 52,620 52,070
Dividends on common stock (3,655) (3,808) (7,463) (12,597)
End of period $56,252 $51,980 $ 56,252 $ 51,980
See accompanying notes.
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<PAGE 5>
CANAL ELECTRIC COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Dollars in thousands)
(Unaudited)
1997 1996
OPERATING ACTIVITIES
Net income $ 11,095 $ 12,507
Effects of noncash items -
Depreciation and amortization 17,736 17,227
Deferred income taxes and investment
tax credits, net (844) (1,312)
Earnings from corporate joint venture (339) (380)
Dividends from corporate joint venture 360 331
Change in working capital, exclusive of cash
and interim financing 8,303 (1,587)
All other operating items (3,212) 644
Net cash provided by operating activities 33,099 27,430
INVESTING ACTIVITIES
Additions to property, plant and equipment
(exclusive of AFUDC) (3,852) (10,328)
Allowance for borrowed funds used
during construction (103) (80)
Net cash used for investing activities (3,955) (10,408)
FINANCING ACTIVITIES
Payment of short-term borrowings (16,475) (8,175)
Payment of dividends (7,463) (12,597)
Advances from (payments to) affiliates (4,855) 8,700
Long-term debt issue refunded - (3,420)
Sinking fund payments (350) (710)
Net cash used for financing activities (29,143) (16,202)
Net increase in cash 1 820
Cash at beginning of period 12 12
Cash at end of period $ 13 $ 832
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest (net of capitalized amounts) $ 6,172 $ 7,117
Income taxes $ 6,952 $ 10,781
See accompanying notes.
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CANAL ELECTRIC COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
(1) General Information
Canal Electric Company (the Company) is a wholly-owned subsidiary of
Commonwealth Energy System. The parent company is referred to in this
report as the "System" and together with its subsidiaries is collectively
referred to as "the system." The System is an exempt public utility
holding company under the provisions of the Public Utility Holding
Company Act of 1935 and, in addition to its investment in the Company,
has interests in other utility and several nonregulated companies.
The Company has 106 regular employees including 81 (76%) represented
by a collective bargaining agreement that was scheduled to expire in May
1997. During the first quarter of 1997, a new agreement was reached that
will remain in effect through May 31, 2001. Employee relations have
generally been satisfactory.
During the second quarter of 1997, the system initiated a voluntary
personnel reduction program. For additional information, see the
"Personnel Reduction Program" section under Management's Discussion and
Analysis of Results of Operations.
The Company is a wholesale power company and operates two generating
units under life-of-the-unit power contracts on file with the Federal
Energy Regulatory Commission (FERC). The price of power is based on a
two-part rate consisting of a demand charge and an energy charge. The
demand charge covers all expenses except fuel costs and includes the re-
covery of the original investment. It also provides for any adjustments
to that investment over the economic lives of the units. The energy
charge is based on the cost of fuel and is billed to each purchaser in
proportion to its purchase of power. Purchasers are billed monthly.
The Company also procures bulk electric power at the request of and
for its affiliates thereby securing cost savings for their respective
customers by planning for a power supply on a single system basis.
(2) Significant Accounting Policies
(a) Principles of Accounting
Generally, expenses which benefit more than one interim period are
allocated to other periods to more appropriately match revenues and
expenses. Income tax expense is recorded using the statutory rates in
effect applied to book income subject to tax recorded in the interim
period.
The unaudited financial statements for the periods ended September
30, 1997 and 1996, reflect, in the opinion of the Company, all adjust-
ments (consisting of only normal recurring accruals) necessary to
summarize fairly the results for such periods. In addition, certain
prior period amounts are reclassified from time to time to conform with
the presentation used in the current period's financial statements.
The Company's significant accounting policies are described in Note 2
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CANAL ELECTRIC COMPANY
of Notes to Financial Statements included in its 1996 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.
(b) Regulatory Assets
The Company is regulated as to rates, accounting and other matters by
various authorities, including the FERC and the Massachusetts Department
of Public Utilities (DPU).
Based on the current regulatory framework, the Company accounts for
the economic effects of regulation in accordance with the provisions of
Statement of Financial Accounting Standards (SFAS) No. 71, "Accounting
for the Effects of Certain Types of Regulation." The Company has
established various regulatory assets in cases where the FERC has
permitted or is expected to permit recovery of specific costs over time.
Effective January 1, 1996, the Company adopted SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of." SFAS No. 121 imposes stricter criteria for regulatory
assets by requiring that such assets be probable of future recovery at
each balance sheet date. SFAS No. 121 did not have an impact on the
Company's financial position upon adoption. This result may change as
modifications are made to the current regulatory framework due to ongoing
electric utility restructuring efforts in Massachusetts. For additional
information relating to electric industry restructuring, see Management's
Discussion and Analysis of Results of Operations.
The principal regulatory assets included in deferred charges were as
follows:
September 30, December 31,
1997 1996
(Dollars in thousands)
Deferred income taxes $13,720 $13,597
Seabrook related costs 4,655 6,262
Total regulatory assets $18,375 $19,859
(3) Commitments and Contingencies
Construction
The Company is engaged in a continuous construction program presently
estimated at $68.2 million for the five-year period 1997 through 2001.
Of that amount, $20 million is estimated for 1997. As of September 30,
1997, construction expenditures, including an allowance for funds used
during construction, amounted to approximately $4 million. A $12 million
project, of which $9.5 million was scheduled to be expended in 1997, was
deferred. 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 factors. The Company expects to finance these
expenditures with internally generated funds and short-term borrowings.
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CANAL ELECTRIC COMPANY
Item 2. Management's Discussion and Analysis of Results of Operations
The following is a discussion of major 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 nine months ended
September 30, 1997 and 1996 and unit sales for these periods is shown below:
Three Months Ended Nine Months Ended
September 30, September 30,
1997 and 1996 1997 and 1996
Increase (Decrease)
(Dollars in thousands)
Electric Operating Revenues $ 7,449 15.6% $ 25,687 18.9%
Operating Expenses -
Fuel used in production 9,057 42.2 26,207 44.2
Electricity purchased for resale (1,136) (43.3) (249) (4.4)
Other operation and maintenance (943) (9.3) (1,898) (6.5)
Depreciation 519 11.4 1,558 11.4
Taxes -
Federal and state income 141 6.2 (323) (4.2)
Local property and other 61 7.4 287 11.6
7,699 18.4 25,582 21.6
Operating Income (250) (4.2) 105 0.6
Other Income (161) (56.7) (2,216) (86.0)
Income Before Interest Charges (411) (6.6) (2,111) (10.5)
Interest Charges (305) (12.1) (699) (9.3)
Net Income $ (106) (2.9) $(1,412) (11.3)
Unit Sales (megawatthours or MWH) 393,766 41.4 1,254,858 52.4
The following is a summary of unit sales (in MWH) for the periods
indicated:
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Canal Unit 1 885,529 628,128 2,393,398 1,682,838
Canal Unit 2 323,818 147,320 879,452 282,414
Seabrook 1 88,697 90,429 215,649 254,967
Purchased for Resale 46,506 84,907 159,914 173,336
1,344,550 950,784 3,648,413 2,393,555
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CANAL ELECTRIC COMPANY
Revenue, Fuel and Purchased Power
Operating revenues for the three and nine months ended September 30, 1997
increased approximately $7.4 million or 15.6% and $25.7 million or 18.9%,
respectively, due primarily to a significant increase in unit sales during
both periods, reflecting increased availability of Units 1 and 2. Also
affecting unit sales in the current nine-month period was a lower level of
power from Seabrook resulting from a refueling outage that occurred during the
second quarter of 1997. The decline in purchases made on behalf of affiliated
retail distribution companies was due to greater sales from the Canal Units
resulting in reduced requirements from other sources.
The significant increase in fuel used in production during the current
three and nine-month periods reflects the increased availability of Units 1
and 2. Fuel, purchased power and transmission costs for the current three and
nine-month periods represented approximately 58% and 59%, respectively, of
operating revenues and averaged 2.56 cents and 2.44 cents per KWH, respective-
ly, as compared to 2.82 cents and 2.62 cents per KWH for the same periods of
1996.
Other Operating Expenses
During the current quarter and first nine months of 1997, other operation
and maintenance decreased by $.9 million or 9.3% and $1.9 million or 6.5%,
respectively, due primarily to the absence of amortization related to postre-
tirement benefit costs ($542,000 and $1,597,000, respectively). Also affect-
ing the change in other operation and maintenance during both periods was
lower maintenance related to Unit 2, offset by an increase in maintenance
related to Unit 1 and Seabrook. Depreciation expense increased in both
current periods due to higher levels of plant-in-service reflecting the costs
associated with the converting of Unit 2 to burn natural gas as well as oil.
Federal and state income taxes decreased 4.2% in the nine-month period due to
a lower level of pretax income. The increase in local property and other
taxes reflects changes in property assessments.
Other Income and Interest Charges
The significant decrease in other income during the first nine months of
1997 was primarily due to the absence of the 1996 reversal of a reserve for
costs associated with postretirement benefits (approximately $1.8 million)
following Federal Energy Regulatory Commission acceptance of rate schedules
that provided for the recovery of these costs over a six-month period that
began in March 1996.
Total interest charges decreased for the current quarter and first nine
months of 1997 by 12.1% and 9.3%, respectively, due to a lower average level
of short-term borrowings, and additionally in the nine-month period, lower
long-term interest costs reflecting the retirement of Series A First Mortgage
Bonds during the second quarter of 1996.
Personnel Reduction Program
As initially discussed in the Company's 1996 Annual Report on Form 10-K
filed with the Securities and Exchange Commission, the Company announced the
details of a system-wide voluntary Personnel Reduction Program (PRP) in May
1997. The goal of the PRP is to achieve a reduced, more efficient and more
productive workforce in response to the significant regulatory changes facing
the System. This action followed the consolidation of the system's electric
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CANAL ELECTRIC COMPANY
and gas operations. The expectation is that the system's workforce will be
reduced by 15% to 20%.
The PRP was offered to substantially all regular and part-time employees
of the system. Eligibility for employees covered by collective bargaining
agreements was subject to negotiation. The system reserves the right to limit
the number of participants to 300; however, the system expects the final
participation level to exceed this count.
The program provides severance based on years of service, the continuation
of certain health and dental insurance for specified periods and limited
reimbursement for certain educational and/or outplacement services.
To date, approximately 8% of the Company's employees have voluntarily
terminated employment with the Company as a result of the PRP. The Company
estimates that the cost of termination benefits, as described above, will
approximate $2.7 million. These costs have been deferred and will be ad-
dressed separately as part of the industry restructuring process.
Electric Industry Restructuring
On December 30, 1996 the DPU issued a final order announcing its "Model
Rules and Legislative Proposal" as a guide in the creation of a competitive
market for electric generation in Massachusetts. Legislative proposals
concerning electric industry restructuring were filed by the Governor of the
Commonwealth of Massachusetts on February 24, 1997, and by the Massachusetts
Legislature's Joint Committee on Electric Utility Restructuring on March 20,
1997 that ultimately evolved into the proposal issued on August 4, 1997 by the
Senate Chairman of the Joint Committee on Government Regulations. Additional-
ly, during the past year, three Massachusetts electric utilities announced
negotiated restructuring settlements with the Massachusetts Attorney General.
Generally, these original proposals and settlement agreements included, among
other things, provisions for a 10% reduction in customer charges, divestiture
of non-nuclear generating assets, recovery of stranded costs through a non-
bypassable access charge and an implementation date of January 1, 1998.
Subsequently, on October 3, 1997, the House Chairman of the Joint Commit-
tee on Government Regulations issued another proposal that included, among
other things, a provision calling for a 15% reduction in rates for customers
taking standard offer service from the utility over a seven-year period, the
establishment of an auditing board within the DPU that would review the
stranded costs that would be included in each company's non-bypassable access
charge, unbundled rates as of January 1, 1998 and implementation of customer
choice of energy supplier by March 1, 1998.
On October 29, 1997, a joint proposal was filed by the chairpersons of the
Joint Committee on Government Regulations which essentially reflected the
provisions previously proposed. This proposal was then forwarded to the Ways
and Means Committee of the House of Representatives for further review and
amendment. The House Ways and Means Committee then sent the amended legisla-
tive proposal to the House of Representatives (the House). On November 10,
1997, after a considerable number of additional amendments were made by
members of the House, the legislation was passed in the House by a vote of 157
to 3. Provisions of this legislation include, among other things, a 10%
discount on standard offer service and retail choice of energy supplier
effective March 1, 1998, with a subsequent increase in the discount on
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CANAL ELECTRIC COMPANY
standard offer service to 15% upon completion of divestiture of non-nuclear
generating assets and securitization of net non-mitigable stranded costs
(which, for the system, are primarily the result of above-market purchased
power contracts with non-utility generators); and, recovery of stranded costs
subject to review and an audit process. A Senate version of electric industry
restructuring legislation is expected shortly.
The proposed legislation is lengthy, complex and subject to change before
it is finalized. The system cannot yet determine the final impact on its
operations and financial condition. The final legislation must also be
approved by the Massachusetts House and Senate and signed by the Governor of
Massachusetts. While the system is encouraged by the legislation's treatment
of stranded cost recovery, the mandated customer discount could have a
significant impact on future cash flows. The system is preparing a restruc-
turing plan in anticipation of final legislation being enacted.
Auction Process
On March 31, 1997, the system submitted a report to the DPU which detailed
the proposed auction process for selling its electric generation assets
(including the Company's Units 1 and 2) and entitlements. The process
includes a standard, sealed-bid auction for generation assets and purchased
power contracts. The auction process would provide a market-based approach to
maximizing stranded cost mitigation and minimizing the access charges that
ratepayers will have to pay for stranded cost recovery. A request for bids
from interested parties was issued during August and in October an Offering
Memorandum was issued. The system expects that the final bidders will be
chosen by year-end and that the entire process, including regulatory approv-
als, will be completed no later than the end of 1998.
Environmental Matters
The Company is subject to laws and regulations administered by federal,
state and local authorities relating to the quality of the environment. These
laws and regulations affect, among other things, the siting and operation of
electric generating and transmission facilities and can require the installa-
tion of expensive air and water pollution control equipment. These regula-
tions have had an impact on the Company's operations in the past and will
continue to have an impact on future operations, capital costs and construc-
tion schedules of major facilities.
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CANAL ELECTRIC COMPANY
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
Filed herewith as Exhibit 1 is the Financial Data Schedule for the
nine months ended September 30, 1997.
Filed herewith as Exhibit 2 is the restated Financial Data Schedule
for the nine months ended September 30, 1996.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended
September 30, 1997.
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CANAL ELECTRIC COMPANY
SIGNATURE
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.
CANAL ELECTRIC COMPANY
(Registrant)
Principal Financial Officer:
JAMES D. RAPPOLI
James D. Rappoli,
Financial Vice President
and Treasurer
Date: November 14, 1997
<PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheet, statement of income, statement of retained earnings and
statement of cash flows contained in Form 10-Q of Canal Electric Company for
the nine months ended September 30, 1997 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000016906
<NAME> CANAL ELECTRIC COMPANY
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<PERIOD-TYPE> 9-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 274,966
<OTHER-PROPERTY-AND-INVEST> 3,300
<TOTAL-CURRENT-ASSETS> 27,065
<TOTAL-DEFERRED-CHARGES> 27,909
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 333,240
<COMMON> 38,080
<CAPITAL-SURPLUS-PAID-IN> 8,321
<RETAINED-EARNINGS> 56,252
<TOTAL-COMMON-STOCKHOLDERS-EQ> 102,653
0
0
<LONG-TERM-DEBT-NET> 83,917
<SHORT-TERM-NOTES> 12,470
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 350
0
<CAPITAL-LEASE-OBLIGATIONS> 11,448
<LEASES-CURRENT> 574
<OTHER-ITEMS-CAPITAL-AND-LIAB> 121,828
<TOT-CAPITALIZATION-AND-LIAB> 333,240
<GROSS-OPERATING-REVENUE> 161,471
<INCOME-TAX-EXPENSE> 7,438
<OTHER-OPERATING-EXPENSES> 136,466
<TOTAL-OPERATING-EXPENSES> 143,904
<OPERATING-INCOME-LOSS> 17,567
<OTHER-INCOME-NET> 361
<INCOME-BEFORE-INTEREST-EXPEN> 17,928
<TOTAL-INTEREST-EXPENSE> 6,833
<NET-INCOME> 11,095
0
<EARNINGS-AVAILABLE-FOR-COMM> 11,095
<COMMON-STOCK-DIVIDENDS> 7,463
<TOTAL-INTEREST-ON-BONDS> 5,933
<CASH-FLOW-OPERATIONS> 33,099
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains restated summary financial information extracted from
the balance sheet, statement of income, statement of retained earnings and
statement of cash flows contained in Form 10-Q of Canal Electric Company for
the nine months ended September 30, 1996 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<RESTATED>
<CIK> 0000016906
<NAME> CANAL ELECTRIC COMPANY
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<PERIOD-TYPE> 9-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 275,614
<OTHER-PROPERTY-AND-INVEST> 3,421
<TOTAL-CURRENT-ASSETS> 24,633
<TOTAL-DEFERRED-CHARGES> 26,671
<OTHER-ASSETS> 12,692
<TOTAL-ASSETS> 343,031
<COMMON> 38,080
<CAPITAL-SURPLUS-PAID-IN> 8,321
<RETAINED-EARNINGS> 51,980
<TOTAL-COMMON-STOCKHOLDERS-EQ> 98,381
0
0
<LONG-TERM-DEBT-NET> 83,611
<SHORT-TERM-NOTES> 29,815
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 350
0
<CAPITAL-LEASE-OBLIGATIONS> 12,114
<LEASES-CURRENT> 578
<OTHER-ITEMS-CAPITAL-AND-LIAB> 118,182
<TOT-CAPITALIZATION-AND-LIAB> 343,031
<GROSS-OPERATING-REVENUE> 135,784
<INCOME-TAX-EXPENSE> 7,761
<OTHER-OPERATING-EXPENSES> 110,561
<TOTAL-OPERATING-EXPENSES> 118,322
<OPERATING-INCOME-LOSS> 17,462
<OTHER-INCOME-NET> 2,577
<INCOME-BEFORE-INTEREST-EXPEN> 20,039
<TOTAL-INTEREST-EXPENSE> 7,532
<NET-INCOME> 12,507
0
<EARNINGS-AVAILABLE-FOR-COMM> 12,507
<COMMON-STOCK-DIVIDENDS> 12,597
<TOTAL-INTEREST-ON-BONDS> 6,038
<CASH-FLOW-OPERATIONS> 27,430
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
