SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
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 1-8222
Central Vermont Public Service Corporation
(Exact name of registrant as specified in its charter)
Vermont 03-0111290
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
77 Grove Street, Rutland, Vermont 05701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (802) 773-2711
________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on which
Title of each class registered
Common Stock $6 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements or any amendment to this Form 10-K. [ ]
Cover page
<PAGE>
State the aggregate market value of the voting stock held by non-
affiliates of the registrant: $225,818,327 based upon the closing price
as of January 31, 1994 of Common Stock, $6 Par Value, on the New York
Stock Exchange as reported in the Eastern Edition of the Wall Street
Journal.
Indicate the number of shares outstanding of each of the
registrant's classes of Common Stock: As of January 31, 1994, there
were outstanding 11,580,427 shares of Common Stock, $6 Par Value.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, or indicated portions thereof, have been
incorporated herein by reference:
(1) Portions of the registrant's Annual Report to Stockholders for
the fiscal year ended December 31, 1993 are incorporated by
reference as Exhibit EX-13.
Cover page continued
<PAGE>
Form 10-K - 1993
TABLE OF CONTENTS
Part I
Item 1. Business................................................
Item 2. Properties..............................................
Item 3. Legal Proceedings.......................................
Item 4. Submission of Matters to a Vote of Security Holders.....
Part II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters....................................
Item 6. Selected Financial Data.................................
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................
Item 8. Financial Statements and Supplementary Data.............
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure....................
Part III
Item 10. Directors and Executive Officers of the Registrant......
Item 11. Executive Compensation..................................
Item 12. Security Ownership of Certain Beneficial Owners and
Management.............................................
Item 13. Certain Relationships and Related Transactions..........
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K............................................
Signatures........................................................
<PAGE>
PART I
Item 1. Business.
Overview.
Central Vermont Public Service Corporation (the "Company"),
incorporated under the laws of Vermont on August 20, 1929, is engaged in
the purchase, production, transmission, distribution and sale of
electricity. The Company has various wholly and partially owned
subsidiaries. These subsidiaries are described below.
The Company is the largest electric utility in Vermont and serves
133,658 customers in 175 of the 245 towns in Vermont. This represents
about 50% of the Vermont population. In addition, the Company supplies
electricity at wholesale to one rural cooperative, and one private
utility.
The Company's sales are derived from a diversified customer mix. The
Company's sales to residential, commercial and industrial customers
accounted for 59% of total MWH sales for the year 1993. Sales to the five
largest retail customers receiving electric service from the Company
during the same period constituted about 4.5% of the Company's total
electric revenues for the year. The Company's requirements resale sales
accounted for approximately 6%, entitlement sales accounted for 27% and
other resale sales which include contract sales, opportunity sales and
sales to NEPOOL accounted for approximately 8% of total MWH sales for the
year 1993.
Connecticut Valley Electric Company Inc. ("Connecticut Valley"), a
wholly owned subsidiary of the Company, incorporated under the laws of New
Hampshire on December 9, 1948, distributes and sells electricity in parts
of New Hampshire bordering the Connecticut River. It serves 10,202
customers in 13 communities in New Hampshire. About 2% of the New
Hampshire population resides in its service area. Connecticut Valley's
sales are also derived from a diversified customer mix. Connecticut
Valley's sales to residential, commercial and industrial customers
accounted for 99.5% of total MWH sales for the year 1993. Sales to its
five largest retail customers during the same period equaled about 17% of
Connecticut Valley's total electric revenues for the year.
The Company also owns 56.8% of the common stock and 46.6% of the
preferred stock of Vermont Electric Power Company, Inc. ("VELCO"). VELCO
owns the high voltage transmission system in Vermont. VELCO created a
wholly owned subsidiary, Vermont Electric Transmission Company, Inc.
("VETCO"), to finance, construct and operate the Vermont portion of the
450 KV DC transmission line connecting Quebec with Vermont and New
England. In addition, the Company owns 31.3% of the common stock of
Vermont Yankee Nuclear Power Corporation ("Vermont Yankee"), a nuclear
generating company. The Company also owns 2% of the outstanding common
stock of Maine Yankee Atomic Power Company, 2% of the outstanding common
stock of Connecticut Yankee Atomic Power Company and 3.5% of the
outstanding common stock of Yankee Atomic Electric Company.
The Company has two wholly owned subsidiaries that were created for
the purpose of financing and constructing two hydroelectric facilities in
Vermont: Central Vermont Public Service Corporation - Bradford
Hydroelectric, Inc. ("Bradford"), which became operational December 20,
1982, and Central Vermont Public Service Corporation - East Barnet
<PAGE>
Hydroelectric, Inc. ("East Barnet"), which became operational September 1,
1984. These hydro electric facilities have been leased and operated by
the Company since their respective in-service dates. The Company also has
the following wholly owned non-utility subsidiaries: C.V. Realty Inc., a
real estate company, Catamount Energy Corporation whose purpose is to
invest in energy-related projects, CV Energy Services, Inc. (a), whose
purpose was to provide energy-related services and SmartEnergy Services,
Inc., whose purpose is to cost effectively provide reliable energy
efficient products and services, including the rental of electric water
heaters.
Catamount Energy Corporation has established four wholly owned
subsidiaries: (See "DIVERSIFICATION"); Catamount Rumford Corp., Equinox
Vermont Corporation, Appomattox Vermont Corp. and Catamount Williams Lake
L.P. See Exhibit EX-13 for additional information of the Company's
diversification activities.
REGULATION AND COMPETITION
State Commissions.
The Company is subject to the regulatory authority of the Vermont
Public Service Board ("PSB") with respect to rates, and the Company and
VELCO are subject to PSB jurisdiction respecting securities issues,
construction of major generation and transmission facilities and various
other matters. The Company is subject to the regulatory authority of the
New Hampshire Public Utilities Commission as to matters pertaining to
construction and transfers of utility property in New Hampshire.
Additionally, the Public Utilities Commission of Maine and the Connecticut
Department of Public Utility Control exercise limited jurisdiction over
the Company based on its ownership as a tenant-in-common of Wyman #4 and
Millstone #3, respectively.
Connecticut Valley is subject to the regulatory authority of the New
Hampshire Public Utilities Commission ("NHPUC") with respect to rates,
securities issues and various other matters.
Federal Power Act.
Certain phases of the businesses of the Company and VELCO, including
certain rates, are subject to the jurisdiction of the Federal Energy
Regulatory Commission ("FERC"): the Company as a licensee of
hydroelectric developments under Part I, and the Company and VELCO as
interstate public utilities under Parts II and III, of the Federal Power
Act, as amended and supplemented by the National Energy Act.
The Company has licenses expiring at various times under Part I of
the Federal Power Act for twelve of its hydroelectric plants. The Company
has obtained an exemption from licensing for the Bradford and East Barnet
projects.
Public Utility Holding Company Act of 1935.
Although the Company, by reason of its ownership of utility
subsidiaries, is a holding company, as defined in the Public Utility
Holding Company Act of 1935, it is presently exempt, pursuant to Rule 2,
promulgated by the Commission under said Act, from all the provisions of
<PAGE>
said Act except Section 9(a)(2) thereof relating to the acquisition of
securities of public utility affiliates.
(a) CV Energy Services, Inc. was dissolved effective March 16, 1993.
Environmental Matters.
In recent years, public concern for the physical environment has
resulted in increased governmental regulation of environmental matters.
The Company is subject to these regulations in the licensing and operation
of the generation, transmission, and distribution facilities in which it
has interest, as well as the licensing and operations of the facilities in
which it is a co-licensee. These environmental regulations are
administered by local, state and Federal regulatory authorities and
concern the impact of the Company's generation, transmission,
distribution, transportation and waste handling facilities on air, water,
land and aesthetic qualities.
The Company cannot presently forecast the costs or other effects
which environmental regulation may ultimately have upon its existing and
proposed facilities and operations, because the extent of the
applicability is not known at this time. The Company believes that any
such costs related to its utility operations would be recoverable through
the rate-making process.
Refer to Exhibit EX-13 incorporated herein by reference for
disclosures relating to environmental contingencies, hazardous substance
releases and the control measures related thereto.
Nuclear Matters.
The nuclear generating facilities of Vermont Yankee and the other
nuclear facilities in which the Company has an interest are subject to
extensive regulations by the Nuclear Regulatory Commission ("NRC"). The
NRC is empowered to regulate the siting, construction and operation of
nuclear reactors with respect to public health, safety, environmental and
antitrust matters. Under its continuing jurisdiction, the NRC may, after
appropriate proceedings, require modification of units for which operating
licenses have already been issued, or impose new conditions on such
licenses, and may require that the operation of a unit cease or that the
level of operation of a unit be temporarily or permanently reduced. Refer
to Exhibit EX-13 incorporated herein by reference for disclosures relating
to the shut down of the Yankee Atomic Nuclear Power plant.
Competition.
The Company's retail electric businesses in both Vermont and New
Hampshire are generally free from competition by other electric utilities,
municipalities or other public agencies. Pursuant to Vermont statutes (30
V.S.A. Section 249), the PSB has established as the service area for
Central Vermont the area it now serves. Under 30 V.S.A. Section 251(b) no
other company is legally entitled to serve any retail customers in the
Company's established service area.
However, an amendment to 30 V.S.A. Section 212(a) enacted May 28,
1987 authorizes the Vermont Department of Public Service ("Department") to
purchase and distribute power at retail to all customers of electricity in
Vermont, subject to certain preconditions specified in new sections 212(b)
and 212(c). Section 212(b) provides that a review board consisting of the
<PAGE>
Governor and certain other designated legislative officers review and
approve any retail proposal by the Department if they are satisfied that
the benefits outweigh any potential risk to the State. However, the
Department may proceed to file the retail proposal with the PSB either
upon approval by the review board or the failure of the board to act
within sixty (60) days of the submission. Section 212(c) provides that
the Department shall not enter into any retail sales arrangement before
the PSB determines and approves certain findings. Those findings are (1)
the need for the sale, (2) the rates are just and reasonable, (3) the sale
will result in economic benefit, (4) the sale will not adversely affect
system stability and reliability and (5) the sale will be in the best
interest of ratepayers.
Section 212(d) provides that upon PSB approval of the Department
retail sales proposal, Vermont utilities shall make arrangements for
distributing such electricity on terms and conditions that are negotiated.
Failing such negotiation, the PSB is directed to determine such terms as
will compensate the utility for all costs reasonably and necessarily
incurred to provide such arrangements. See Rate Developments below for
additional details involving retail sales by the Department.
In addition, Chapter 79 of Title 30 authorizes municipalities to
acquire the electric distribution facilities located within their
boundaries. The exercise of such authority is conditioned upon an
affirmative three-fifths vote of the legal voters in an election and upon
the payment of just compensation including severance damages. Once the
price is determined, whether by agreement of the parties or by the PSB, a
second affirmative three-fifths vote of the legal voters is required.
There has been only one instance where Chapter 79 of Title 30 has
been invoked; the Town of Springfield acted to acquire the Company's
distribution facilities in that community pursuant to a vote in 1977.
This action was subsequently discontinued by agreement between Springfield
and the Company in 1985.
No other municipality served by the Company, so far as is known to
the Company, is taking steps in an attempt to establish a municipal
electric distribution system.
For a discussion relating to the Company's wholesale electric
business see "Wholesale Rates" below.
RATE DEVELOPMENTS
Vermont Retail Rates.
From July 1, 1985 through July 31, 1993, a block of energy obtained
by the Department of Public Service (DPS) from the New York Power
Authority (NYPA) and from Ontario Hydro was sold by the DPS directly to
the Company's retail customers. When the DPS's sources were not
sufficient, on a short-term basis, the Company provided back-up energy and
capacity to meet the DPS's block requirements. Under this arrangement,
which became effective July 1, 1989, the Company was reimbursed for all
back-up energy and capacity.
During most of 1989 the DPS's block equaled the first 200 KWH sold to
certain retail customers, but the block was reduced to 120 KWH beginning
with bills rendered on December 1, 1989, to 85 KWH beginning with bills
rendered on January 1, 1990, and to 75 KWH beginning with bills rendered
<PAGE>
on February 3, 1992. Effective February 1, 1993, the DPS block was
reduced to a maximum of 25 KWH from 75 KWH due to the termination of the
Ontario Hydro power contract with the DPS on October 31, 1992. Since the
Company sells to customers all KWH over the DPS's block, the Company's
rates were reduced to provide the same net revenues under the 120, 85, 75,
and 25 KWH blocks as they would have under the 200 KWH block. Effective
February 1, 1992, the PSB allowed the Company to increase its billing and
service fees charged to the DPS from 2.3 cents per KWH to 3.6 cents per
KWH. The PSB subsequently delayed the effective date to December 1, 1992
but allowed the Company to collect the lost revenues plus interest after
November 1, 1992 through a 3.0% surcharge on April and May 1993 bills.
On November 18, 1992, the Company filed with the PSB a tariff in
response to expected and proposed changes to the provision of power by the
DPS. The Company proposed to supply an initial non-seasonally
differentiated block of 150 KWH/month to residential customers in the
Company's service territory. On December 22, 1992, the DPS filed with the
PSB to supply an initial block of 25 KWH/month to the Company's
residential customers, reflecting the expiration, on October 31, 1992, of
the Ontario Hydro power contract. On December 29, 1992, the PSB approved,
on an interim basis pending investigation, a joint DPS-Company block of
150 KWH/month at a non-seasonal uniform rate of 8.4 cents per KWH.
Initially, the DPS would sell the first 25 KWH and the Company would sell
the remaining 125 KWH. The PSB's interim order resulted in a non-seasonal
25 KWH block at 5.2 cents per KWH for the DPS and a non-seasonal 125 KWH
block at 9.0 cents per KWH for the Company. Accordingly, effective
February 1, 1993, the DPS block was reduced to a maximum of 25 KWH from 75
KWH.
The remaining NYPA power allotment, which was the sole remaining
power source of the DPS other than the Company, was reduced substantially
effective July 1, 1993. Effective August 1, 1993, the DPS ceased
altogether selling to the Company's retail customers. That NYPA power
allotment is now sold directly to the Company and the retail sales
formerly made by the DPS are now made by the Company. In addition, the
Company's rates now provide for an initial non-seasonal 250 KWH block of
sales to certain retail customers.
In response to a March 1993 PSB inquiry into the appropriateness of a
general review of the Company's retail rates, in April 1993 the DPS and
the Company entered into a Stipulation that was approved by the PSB in
September 1993. In the Stipulation the Company agreed to a decrease in
its allowed rate of return on common equity from 12.5% to 12.0% for 1993,
to accelerate the recovery of $1.5 million of Conservation and Load
Management ("C&LM") costs deferred in 1993, to not seek recovery of
further C&LM costs deferred in 1993 equal to amounts in excess of the
12.0% rate of return on common equity for 1993, and to not file a general
rate increase that would become effective before August 1, 1994. The PSB
in its September 1993 order also announced the opening of an investigation
on November 16, 1993, the earliest date the Company could file for a rate
increase under the Stipulation, into the Company's cost of service and
resulting rates.
In response to that investigation, on January 18, 1994 the Company
filed a revenue requirement supporting a $16.1 million or 8.0% increase in
retail rates for the year beginning November 1, 1993. The Company noted
in its filing that current rate levels are justified and that the Company
does not want any rate increase to be effective for that period. The
Company also noted in its filing that rate relief would be needed in late
1994.
<PAGE>
<PAGE>
Thus on February 15, 1994, the Company filed for a rate increase of
$17.9 million or 8.9% to become effective November 1, 1994.
The Company anticipates filing for rate increases periodically,
primarily to recover increasing purchased power and other operating costs.
New Hampshire Retail Rates.
Connecticut Valley's retail rate tariffs, approved by the NHPUC,
contain a fuel adjustment clause (FAC) and a purchased power cost
adjustment clause (PPCA). Under these clauses, Connecticut Valley
recovers its estimated annual costs for purchased energy and capacity,
respectively, which are reconciled when actual data is available.
Although the tariffs provide for annual changes of the FAC and PPCA
effective January 1, the Company requested and the NHPUC approved a delay
of the effective date to March 1, 1994. The NHPUC also ordered an interim
increase in the PPCA effective December 1, 1993. On the basis of
estimates of costs for 1994 and reconciliations from 1993, the combined
PPCA and FAC will result in a decrease in revenues of approximately
$16,000 or 0.1% for 1994.
Connecticut Valley filed in 1991 to redesign the revenue recovery
from each rate component within each rate class, as well as from each rate
class, to more accurately reflect the cost of service for each rate
component and rate class. Negotiations with the NHPUC Staff resulted in a
settlement rate design which was approved by the NHPUC effective in two
steps: January 1, 1992 and March 1, 1992. The redesigned rates feature
higher rates during the winter when Connecticut Valley is likely to
experience a peak use of electricity. The settlement also provided for
subsequent phases of rate redesign. Phase 2 resulted in an increase of
the peak to off-peak season price ratio from 1.45 to 1.0 to a ratio of 1.6
to 1.0. This phase of rate redesign caused no change in the overall
revenue requirement or the allocation of the revenue requirement among
rate classes. The NHPUC approved this phase of rate redesign effective
January 1, 1993. The NHPUC approved a delay of the effectiveness of Phase
3 to 1995.
Connecticut Valley's retail rate tariffs, approved by the NHPUC, also
provide for Conservation and Load Management Percentage Adjustments
(C&LMPA) for residential and commercial/industrial customers in order to
collect deferred and forecast C&LM costs. The forecast costs are updated
effective January 1 of each year and are reconciled when actual data are
available. In addition, Connecticut Valley's earnings are made whole
through recovery of lost revenues related to fixed costs which Connecticut
Valley loses as a result of C&LM activities. However, the Company is not
made whole because the fixed costs of the wholesale transaction between
the Company and Connecticut Valley are not recovered when C&LM activities
occur in Connecticut Valley. The C&LMPA further provides for the future
recovery of shareholder incentives related to past C&LM activities.
The filing in September 1993 of the annual update of the 1994 C&LMPA
rates resulted in a delay of the effective date to March 1, 1994 and a
settlement on all issues except for one relating to the basis for
determination of lost revenues. The NHPUC approved 1994 C&LMPA rates
which result in a revenue decrease of $26,000 or 0.2%.
Effective July 1, 1993, the NHPUC allowed a revenue increase of
$127,000 or 0.8% related to Connecticut Valley's adoption of the Statement
<PAGE>
of Financial Accounting Standards No. 106 for Postretirement Benefits
Other Than Pensions and the re-enactment of the New Hampshire Franchise
Tax.
Connecticut Valley also purchases power from several independent
power producers who own qualifying facilities under the Public Utility
Regulatory Practices Act of 1978. Connecticut Valley filed a complaint
with the Federal Energy Regulatory Commission (FERC) informing them of its
concern that a solid waste facility owned and operated by Wheelabrator
Claremont Company, L.P. has not been such a qualifying facility since the
plant began operation. The outcome of this filing is unknown at this
time. Potential outcomes of this filing could result in a refund, with
interest, of past purchased power costs as well as lower future costs.
Any refunds and future lower costs are likely to be reflected in the FAC
when known. Connecticut Valley has petitioned the NHPUC for current
recovery of costs related to pursuing this filing. Connecticut Valley has
also petitioned for a deferral of such costs if a current recovery of
these costs is not allowed by the NHPUC.
Wholesale Rates.
The Company sells firm power to Connecticut Valley under a wholesale
rate schedule based on forecast data for each calendar year which is
reconciled to actual data annually. The Company filed with the FERC for a
revenue increase of $294,300 or 3.2% for 1994 power costs. The rate
schedule provides for an automatic update of annual rates, as well as the
subsequent reconciliation to actual data.
The Company sold firm system capacity to four Vermont village
municipal electric departments ("Municipal Departments") under a wholesale
tariff based on forecast data for each calendar year which is reconciled
to actual data annually. As allowed in the tariff, the Company gave the
Municipal Departments notice of extension of termination date of the
tariff to October 21, 2008 from October 31, 1993. FERC approved the
extension of the termination date. Due to current market conditions, the
Municipal Departments did not opt to purchase power under this tariff
during the period of the extension. Sales under the tariffs terminated
October 31, 1993.
One of the Company's requirements wholesale customers, Woodsville
Fire District Water and Light Department, with a peak of 3.6 MW began
receiving power from the Company under a 15-year contract. The effective
date was May 1, 1993 and the effect was to increase revenues from the
customer.
Another of the Company's requirements wholesale customers, New
Hampshire Electric Cooperative, Inc., with an average monthly peak of 2.8
MW has given the Company notice of termination of service under FERC
Electric Tariff, First Revised Volume No. 1, effective in March 1995. The
Company will continue to provide the transmission service and will enter
into negotiations to supply power under another contract.
POWER RESOURCES
Overview.
The Company's and Connecticut Valley's energy production, which
includes generated and purchased power, required to serve their retail and
firm wholesale customers was 2,414,970 MWH for the year ended December 31,
<PAGE>
1993. The maximum one-hour integrated demand during that period was 418.2
MW, which occurred on December 27, 1993. The Company's and Connecticut
Valley's total production in 1993, including production related to all
resale customers, was 3,651,319 MWH.
<TABLE>
The following tabulation shows the sources of such energy and
capacity available to the Company and Connecticut Valley for the year
ended December 31, 1993 and at the time of the Company's own peak. In
1993, the DPS sold 25,714 MWH of NYPA energy to residential customers in
the Company's service territory.
<CAPTION>
Year Ended December 31, 1993
Effective Generated and
Capability Purchased at
12 Month Generated Time of the
Average and Purchased Company's Peak
MW MWH % MW %
<S> <C> <C> <C> <C> <C>
WHOLLY-OWNED PLANTS:
Hydro....................... 42.2 176,154 4.8 24.2 5.8
Diesel and Gas Turbine..... 28.4 228 - - -
JOINTLY OWNED PLANTS:
Millstone #3................ 19.9 112,823 3.1 19.4 4.6
Wyman #4.................... 11.0 6,736 0.2 5.0 1.2
McNeil...................... 10.5 17,079 0.5 10.3 2.5
EQUITY OWNERSHIP IN PLANTS:
(Purchased)
Vermont Yankee.............. 156.0 1,028,255 28.2 108.0 25.8
Maine Yankee................ 15.7 102,844 2.8 15.3 3.7
Connecticut Yankee.......... 11.6 74,961 2.0 11.4 2.7
MAJOR LONG-TERM PURCHASES:
Hydro-Quebec................ 179.2 853,499 23.4 70.8 16.9
Merrimack #2................ 47.0 300,666 8.2 24.6 5.9
OTHER PURCHASES:
Ontario Hydro............... 24.4 35,655 1.0 - -
Small Power Qualifying...... 33.1 186,900 5.1 12.3 2.9
Unit Purchases.............. 56.2 265,815 7.3 47.3 11.3
Entitlement Purchases....... 0.9 18,082 0.5 - -
System and Other Purchases.. 44.6 212,236 5.8 36.3 8.7
Pumped Storage Hydro........ 1.4 1,365 - - -
NEPEX......................... - 258,021 7.1 33.3 8.0
TOTAL.................... 682.1 3,651,319 100.0 418.2 100.0
</TABLE>
Wholly Owned Plants.
The Company owns and operates 18 hydroelectric generating facilities
in Vermont which have an aggregate nameplate capability of 37.5 MW. It
also leases and operates hydroelectric facilities at Bradford and East
Barnet, Vermont. These two plants have a nameplate capability of 1.5 MW
and 2.2 MW, respectively. In addition, the Company owns and operates
diesel and gas turbine generating facilities on a peaking or standby basis
having a combined nameplate capability of 28.9 MW.
<PAGE>
<TABLE>
Jointly Owned Plants.
The Company has a joint-ownership interest in the following
generating and transmission plants:
<CAPTION>
Net
Fuel MW Generation Load Net Plant
Name Location Type Ownership Entitlement MWH Factor Investment
<S> <C> <C> <C> <C> <C> <C> <C>
Millstone #3 Waterford, Nuclear 1.73% 20 112,823 64% $61,363,376
Connecticut
Wyman #4 Yarmouth, Oil 1.78% 11 6,736 7% $ 1,833,631
Maine
Joseph C. McNeil Burlington, Various 20.00% 10 17,079 19% $10,516,552
Vermont
Highgate Trans- Highgate Springs, 46.08% N/A N/A N/A $ 9,552,092
mission Facility Vermont
</TABLE>
The Company has a 1.73% joint-ownership interest in Millstone #3, an
1149 MW nuclear generating facility located in Waterford, Connecticut,
which commenced commercial operation in April 1986. Under the Millstone
Sharing Agreement, the Company is entitled to receive its share of the
output and capacity of the facility and is responsible for its share of
the operating expenses, including decommissioning.
The Company also has a 1.78% joint-ownership interest in Wyman #4, a
619 MW oil-fired generating facility located in Yarmouth, Maine and a 20%
joint-ownership interest in McNeil, a 53 MW wood, gas and oil-fired
generating facility located in Burlington, Vermont. The Company receives
its share of the output and capacity from these generating plants and is
responsible for its share of the operating expenses of each.
Finally the Company has a 46.08% joint-ownership interest in the
Highgate Convertor, a 200 MW facility located in Highgate Springs,
Vermont. This facility is directly connected to the Hydro-Quebec System
to the north of the Convertor and to the VELCO System for delivery of
power to Vermont Utilities. This facility can deliver power either
direction, but normally delivers power from Hydro-Quebec to Vermont.
Equity Ownership in Plants.
In 1966 the Company purchased 35% of the Vermont Yankee common stock
and was entitled to receive a like percentage of the output of the unit.
In late 1969 and early 1970, the Company sold at cost a combined total of
3.7% of its original equity investment and currently resells at cost 4.7%
of its entitlement. The Company's current equity ownership and net
entitlement percentages are 31.3 and 30.5, respectively.
The Atomic Energy Commission, now the NRC, granted a full-term
(40-year), full power operating license for the Vermont Yankee plant,
which was to expire in December 2007. On December 17, 1990 the NRC issued
an amendment of the operating license extending its term to March 2012.
<PAGE>
Vermont Yankee's net capability is 514 MW of which 156.7 MW (F1) is
the Company's net entitlement. Vermont Yankee's plant performance for the
past five years is shown below:
Availability Capacity
Factor Factor
(F2) (F3)
1989......................... 84.2 80.1
1990......................... 84.4 80.3
1991......................... 93.6 91.2
1992......................... 87.5 82.7
1993......................... 78.3 74.9
As was described in the overview section above, the Company is a
stockholder, together with other New England electric utilities, in the
following three nuclear generating companies: Maine Yankee Atomic Power
Company, Connecticut Yankee Atomic Power Company and Yankee Atomic Electric
Company.
Net Company's
Company Capability Entitlement
Maine Yankee(F4).............. 847 MW 2.0% - 16.9 MW
Connecticut Yankee............ 582 MW 2.0% - 11.6 MW
Yankee Atomic................. (F5) (F5)
The Company is obligated to pay its entitlement percentage of the
operating expenses of Vermont Yankee and the other Yankee companies,
including depreciation and a return on invested capital, whether or not
the plant is operating. The Company is obligated to contribute its
entitlement percentage of the capital requirements of Vermont Yankee and
Maine Yankee and has a similar, but more limited obligation to Connecticut
Yankee. The Company's ownership percentages are identical to the
entitlement percentages. For additional information regarding Equity
Ownership in Plants, refer to Exhibit EX-13 incorporated herein by
reference.
_______________
(FN)
(F1) Currently, the Company resells at cost, through VELCO, 23.2 MW
of its original entitlement to other Vermont utilities.
(F2) "Availability Factor" means the hours that the plant is capable
of producing electricity divided by the total hours in the period.
(F3) "Capacity Factor" means the total net electrical generation
divided by the product of the maximum dependable electrical
capacity multiplied by the total hours in the period.
(F4) Currently, the Company resells at cost 1.8 MW of its entitlement
to certain municipal utilities in Massachusetts.
(F5) Yankee Atomic permanently ceased power operations of the Yankee
Nuclear Power Station. See Decommissioning Expense discussion below.
Decommissioning Expense.
Each of the Yankee Companies has developed its own estimate of the
cost of decommissioning its nuclear generating unit. These estimates vary
<PAGE>
depending upon the method of decommissioning, economic assumptions, site
and unit specific variables, and other factors. Each of the Yankee
Companies includes charges for decommissioning costs in the cost of
capacity, as approved by the FERC.
<TABLE>
The Company's entitlement percentage of decommissioning costs for
Vermont Yankee, Connecticut Yankee, Maine Yankee and Yankee Atomic is as
follows (dollars in millions):
<CAPTION>
CVPS's
Total Share of
Date of Estimated CVPS's Funded
Study Obligation Obligation Obligation
<S> <C> <C> <C> <C>
Nuclear generating companies:
Vermont Yankee 1988 $190 $66.5 $34.6
Maine Yankee 1987 $167 $3.3 $1.9
Connecticut Yankee 1992 $294.2 $5.9 $2.5
Yankee Atomic 1992 $200 $7.0 $3.1
</TABLE>
On February 26, 1992, the Board of Directors of Yankee Atomic decided
to permanently discontinue operation of their plant, and, in time,
decommission the facility. The decision to prematurely retire the plant
was based on continuing regulatory uncertainty and economics.
The Company relied on Yankee Atomic for less than 1.5% of its system
capacity. Presently, purchased power costs billed to the Company by
Yankee Atomic, which include a provision for ultimate decommissioning of
the unit, are being collected from the Company's customers via existing
retail and wholesale rate tariffs.
On March 18, 1993, the FERC approved the settlement agreement
regarding the decommissioning plan, recovery of plant investment and all
issues with respect to prudency of the decision to discontinue operation.
Yankee Atomic has estimated that as of December 31, 1993, its costs of
discontinuing operations are approximately $345 million, which includes
$200 million of decommissioning costs in 1992 dollars.
The Company's total current share of its cost with respect to Yankee
Atomic's decision to discontinue operation is approximately $12 million.
This amount is subject to ongoing review and revision and is reflected in
the accompanying balance sheet both as a regulatory asset and deferred
power contract obligation (current and non-current).
The Company believes that its proportionate share of Yankee Atomic
costs will be recovered through the regulatory process and, therefore, the
ultimate resolution of the premature retirement of the plant will not have
a material adverse effect on the Company's earnings or financial
condition.
Although the estimated costs of decommissioning are subject to change
due to changing technologies and regulations, the Company expects that the
nuclear generating companies' liability for decommissioning, including any
future changes in the liability, will be recovered in their rates over
their operating lives.
In 1982 the State of Maine enacted legislation that requires the
development of a decommissioning trust fund for the Maine Yankee nuclear
plant. This statute also provides that, if the trust has insufficient
<PAGE>
funds to decommission the plant, the licensee, Maine Yankee, is
responsible for the deficiency and, if the licensee is unable to provide
the entire amount, the owners of the licensee are jointly and severally
responsible for the remainder. The definition of owner under the statute
includes the Company. It is expected that any payments required by the
Company under these provisions would be recovered through rates.
Nuclear Fuel.
Vermont Yankee has approximately $165 million of "requirements based"
purchase contracts for nuclear fuel needs to meet substantially all of its
power production requirements through 2002. Under these contracts, any
disruption of operating activity would allow Vermont Yankee to cancel or
postpone deliveries until actually needed.
Vermont Yankee has contracted for uranium enrichment services through
2002. Vermont Yankee also has an enrichment contract with the DOE which
expires in 2001. However, Vermont Yankee has exercised its right to
partially terminate the DOE contract for the period 1990 to 1996.
Vermont Yankee has a contract with the United States Department of
Energy ("DOE") for the permanent disposal of spent nuclear fuel. Under
the terms of this contract, in exchange for the one-time fee discussed
below and a quarterly fee of $.001 per KWH of electricity generated and
sold, the DOE agrees to provide disposal services when a facility for
spent nuclear fuel and other high-level radioactive waste is available,
which is required by current statute to be prior to January 31, 1998.
The DOE contract obligates Vermont Yankee to pay a one-time fee of
$39.3 million for disposal costs for all spent fuel discharged through
April 7, 1983. Although such amount has been collected in rates from the
Sponsors, Vermont Yankee has elected to defer payment of the fee to the
DOE as permitted by the DOE contract. The fee must be paid no later than
the first delivery of spent nuclear fuel to the DOE. Interest accrues on
the unpaid obligation based on the thirteen-week Treasury Bill rate and is
compounded quarterly.
Through 1993 Vermont Yankee deposited approximately $37.5 million,
including $8.2 million in 1993, in an irrevocable trust to be used
exclusively for defeasing this obligation at some future date provided the
DOE complies with the terms of the aforementioned contract. In 1991 and
1992, Vermont Yankee deposited an additional amount of approximately $8.2
and $5.2 million, respectively, into this trust.
On December 31, 1991 the DOE issued a final rule amending the
Standard Contract for Disposal of Spent Nuclear Fuel and/or High-Level
Radioactive Waste. The amended final rule conforms with a March 17, 1989
ruling of the U.S. Court of Appeals for the District of Columbia that the
$.001 per KWH fee in the Standard Contract should be based on net
electricity generated and sold. The impact of the amendment on Vermont
Yankee was to reduce the basis for the fee by 6% on an ongoing basis and
to establish a receivable from the DOE at December 31, 1991 of $2.2
million for previous overbillings and accrued interest. Vermont Yankee
has recognized in its rates the full impact of the amended final rule to
the Standard Contract. The DOE is refunding the overpayments (including
interest) to utilities over the next four year period ending in 1995 via
credits against quarterly payments. Interest is based on the 90-day
Treasury Bill Auction Bond Equivalent and will continue to accrue on
amounts remaining to be credited. At December 31, 1993 and 1992
<PAGE>
approximately $.9 and $1.6 million in principal and interest is reflected
in other accounts receivable in the Vermont Yankee's Balance Sheet.
The average cost to the Company of energy generated at the Vermont
Yankee plant was 4.04, 4.60, 3.69, 4.71 and 5.34 mills per KWH for the
years 1989 through 1993, respectively.
The Company has been advised by the companies operating other nuclear
generating stations in which the Company has an interest that they have
contracted for certain segments of the nuclear fuel production cycle
through various dates. Contracts for the remainder of the fuel cycle will
be required but their availability, prices and terms cannot be predicted.
Nuclear Liability and Insurance.
For a complete disclosure regarding nuclear liability and insurance
see Exhibit EX-13 incorporated herein by reference.
Major long-term purchases.
Canadian Purchases - Under various contracts, the Company purchases from
Hydro-Quebec capacity and associated energy. Under the terms of these
contracts, the Company is required to pay certain fixed capacity costs
whether or not energy purchases above a minimum level described in the
contracts are made. Such minimum energy purchases must be made whether or
not other less expensive energy sources might be available.
The state of Vermont contract, between the Company and the Vermont
Department of Public Service, terminates on September 22, 1995. The
Company receives 69 MW of firm capacity and associated energy delivered at
the Highgate interconnection.
The Company's portion of the 1987 Hydro-Quebec contract consists of:
Schedule A, 25 MW of firm capacity and associated energy to be delivered
at the Highgate interconnection through September 22, 1995. All of this
power is being sold back to Hydro-Quebec for the duration of the contract.
This sell-back of 25 MW continues as Schedule C-1 power at the termination
of the Schedule A contract. This sell-back contract is not cancelable.
Schedule C-1, 31 MW and Schedule C-2, 21 MW of firm capacity and
associated energy are to be delivered at the NEPOOL/Hydro-Quebec (Phase I
and Phase II) interconnection through October 2012. Under a cancelable
contract, the Company is selling back to Hydro-Quebec 30 MW and 20 MW of
its C-1 and C-2 entitlements, respectively, for the period ending October
31, 1996. Under the terms of this agreement, the Company can exercise an
option, on an annual basis, to cancel all or any portion of this sell-back
and resume deliveries of this power under the appropriate C-1 and C-2
schedules. Further agreements allow for the interruption of the
sell-back, and the provision of 50 MW of capacity and delivery of
associated energy for the period March through October of a given year.
The Company must return this energy by the month of March of the following
year or pay Hydro-Quebec 150% of the Schedule C-1 and Schedule C-2 energy
price. Hydro-Quebec has the option under this sell-back agreement to buy
back 50 MW for the period November 1, 1996 through October 31, 2000. This
option must be exercised no later than October 31, 1994. These sell-back
agreements provide the Company with the necessary flexibility to minimize
near-term costs while retaining the long-term benefits of the purchase
contracts. Schedule B, 92 MW of firm capacity and associated energy is
expected to be delivered at the Highgate interconnection for 20-years
beginning September 23, 1995. The Company will sell back 25 MW of
<PAGE>
Schedule B entitlement for the period September 23 through October 31,
1995. Schedule C-4a, 24 MW of firm capacity and associated energy is
expected to be delivered over the NEPOOL/Hydro-Quebec (Phase I and Phase
II) interconnection beginning November 1, 1996 through October 31, 2012.
<TABLE>
Details of these purchases and sell-back contracts are described in the
table that follows (dollars in thousands):
<CAPTION>
State of VT
Contract Schedule A Schedule C-1 Schedule C-2 Schedule B Schedule C-4a
<S> <C> <C> <C> <C> <C> <C>
Capacity in MW 69 25 31 21 92 24
Contract period 1985-1995 1991-1995 1991-2012 1992-2012 1995-2015 1996-2012
Minimum energy capacity factor 50.0% 50.0% 75.0% 75.0% 75.0% 75.0%
Minimum annual energy in MWH 302,746 109,500 201,863 138,141 606,069 155,801
Actual 1993 energy charges $7,760 $3,040 $4,300 $3,130 N/A N/A
Est. 1st year future energy charges $7,370 $3,250 $4,880 $3,340 $15,840 $4,230
Est. avg. % change from 1st yr. future (24.5)% (19.8)% 4.0% 4.0% 4.0% 4.0%
(1994-1995) (1994-1995) (1994-2012) (1994-2012) (1995-2015) (1996-2012)
Actual 1993 annual capacity charge $4,650 $2,510 $7,170 $5,040 N/A N/A
Est. 1st year future capacity charge $4,700 $2,590 $7,270 $5,050 $23,570 $6,300
Est. avg. % change from 1st yr. future (24.5)% (24.5)% - - - -
(1994-1995) (1994-1995) (1993-2012) (1994-2012) (1994-2015) (1996-2012)
Actual 1993 avg. cost in cents/KWH 2.8 5.3 6.2 6.1 N/A N/A
Est. 1st yr. future avg. cost in cents/KWH 2.8 5.3 6.0 6.1 6.5 6.8
Est. avg. % change from 1st yr future 3.5% 7.1% 1.6% 1.6% 1.6% 1.6%
(1994-1995) (1994-1995) (1994-2012) (1994-2012) (1995-2015) (1996-2012)
1993 Sell-back in MW 25 30 20
Actual 1993 sell-back revenues $5,550 $8,790 $6,200
Expected sell-back #1 revenues 25 MW 25 MW 25 MW
100% of costs 100% of costs 100% of costs
Est. 1st year future annual $5,840 $1,650 $1,110
(1994) (1995) (1995)
Est. out-yrs. average annual $4,560 $9,890
Est. average annual % change (21.9)% 1.6%
(1995) (1996-2012)
Expected sell-back #2 revenues up to 30 MH 20 MW
Approx. 78% of costs for period
Estimated average annual $8,530 $6,530
(1994-1995) (1994-1996)
Estimated average annual $1,600
(1996)
</TABLE>
Merrimack #2 - Merrimack #2 is a 320 MW capacity coal-fired steam unit
located in Bow, New Hampshire, and is owned and operated by Public Service
Company of New Hampshire ("PSNH"). In 1968 VELCO contracted with PSNH to
<PAGE>
purchase a block of 100 MW of the plant's output for 30 years and to pay a
proportionate share of the plant's actual capacity and operating costs.
Under an agreement dated February 10, 1968, between the Company and VELCO,
the Company buys from VELCO at VELCO's cost 47.0 MW of that block for a
30-year period commencing May 1, 1968. Northeast Utilities (N.U.) has
acquired all of PSNH's assets including the Merrimack #2 plant, pursuant
to a merger agreement in 1991.
The Merrimack 2 unit is subject to limits on sulfur dioxide ("SO2")
and Nitrogen Oxides ("NOx") starting in 1995, mandated by the Clean Air
Act Amendments ("CAAA"). The CAAA establishes SO2 allowances to reduce
SO2 emissions. PSNH expects to have sufficient SO2 allowances to meet
CAAA SO2 requirements. If any gains are realized from the sale of excess
allowances, the Company will receive its proportionate share from VELCO.
Likewise, the Company will pay its share of any allowances purchased.
The CAAA NOx limits will be specified in Administrative Rules to be
established by the state of New Hampshire. The New Hampshire Air
Resources Division ("NHARD") has a proposed rule which includes
Merrimack 2 NOx limits, that replaces a previous proposed rule submitted
to the U.S. Environmental Protection Agency ("EPA") in 1993. The current
proposed rule must be approved by the NHARD and the EPA, and implement the
NOx reductions by May 31, 1995.
PSNH expects to comply with the current proposed Merrimack 2 NOx
limits by installing Selective Noncatalytic Reduction equipment ("SNCR")
and reducing load at Merrimack 2. Installation of the SNCR will increase
capital and operating costs. PSNH will implement load reductions based on
actual unit operating characteristics and dispatch, to comply with the NOx
rule at the lowest cost. PSNH expects that an average load reduction of
22 per cent will be required for compliance. The Company will share on a
pro-rata basis the SNCR and load reduction costs, based on its share of
the VELCO contract.
Other Purchases.
Cogeneration/Small Power Qualifying - The Company continues to work
with customers exploring the opportunities for either cogeneration by
customers or the purchase by the Company of the output of small power
qualifying. Cogeneration is the production of electricity and usable
thermal energy from the same fuel. A number of small producers using
hydroelectric, biomass, and refuse-burning generation are currently
producing energy that the Company is purchasing. For the year ended
December 31, 1993, the Company received 186,899 MWH from these sources for
which it paid $18,213,351.
New York Power Authority - Prior to July 1, 1985, under agreements
between the State and NYPA, the Department purchased St. Lawrence and
Niagara Project power. The Company in turn contracted with the Department
to purchase the St. Lawrence and Niagara Project power at cost, and
credited the lower cost thereof to certain of the Company's retail
customers.
From July 1, 1985 through July 31, 1993, the St. Lawrence and/or
Niagara Project power was purchased by the DPS and sold directly to
residential customers in the Company's service territory. This power is
expected to be reduced to a minimum level in July 1994 and continue at
that level through October 2003. For additional information regarding the
<PAGE>
DPS's sales to the Company's residential customers see "Vermont Retail
Rates".
The St. Lawrence Project power continues to be available to the
Department but will be reduced each July 1 over a ten-year period until
1994, at which time the State will receive one MW of this power through
2002.
New England Power Pool - The Company, through VELCO, is a participant
in the New England Power Pool ("NEPOOL"), which is open to all
investor-owned, municipal and cooperative utilities in New England under
an agreement in effect since 1971. The NEPOOL Agreement provides for
joint planning and operation of generating and transmission facilities and
also incorporates generating capacity reserve obligations and provisions
regarding the use of major transmission lines and payment for such use.
Because of its participation in NEPOOL, the Company's operating revenues
and costs are affected to some extent by the operations of other
participants in that agreement.
The primary purposes of NEPOOL are to provide energy reliability for
the region, centralized economic dispatch and coordination of generation
planning and construction by the individual participants. The Company's
peak demand for 1993 occurred on December 27, 1993 and equaled 418.2 MW.
At the time of this peak, the Company had a reserve margin of 21%.
NEPOOL's peak for the year occurred on July 8, 1993 and totaled 19,570 MW.
NEPOOL had a 26% reserve margin at the time of its 1993 peak.
Power Resources - Future.
The Company purchases about 90% of the power it needs, including the
power it receives as part owner of the various Yankee nuclear plants. In
1993, about 35% of the Company's purchased power came from renewable
sources, primarily water and wood. The Company's core business has no
plans at this time to build any new generating facilities to supply power,
instead it intends to satisfy customers' energy needs through a
combination of power purchases and energy-efficiency services. Therefore,
the Company uses a process called "integrated resource planning," or IRP,
to help determine the resources necessary to meet future power needs. IRP
is an evolving, on-going process. An interdisciplinary team representing
various functional planning area works together continuously to coordinate
and integrate planning. A Corporate Review Committee provides policy
guidance and reviews resource investment recommendations from the IRP
team. The primary objective of IRP is to provide reliable, least-cost
energy resources consistent with the Company's policy to protect the
environment. The choice of least-cost resources explicitly seeks a
balance between traditional supply resources and energy efficiency
investments with the Company's customers. Flexibility and diversity are
investment guidelines designed to provide least-cost resources over a
broad range of possible futures.
The Company does not currently plan to build generation resources.
The resource plan calls for investments in energy efficiency through the
1990's with additional investments in energy-efficiency programs or power
purchases beginning in the late 1990's. The energy efficiency and power
purchase commitments made in the late 1980's served the Company and its
shareholders well during the recent recessionary downturn. The resources
from developers of cogeneration projects were deferred due to decreased
need. Power purchases from Hydro-Quebec were deferred until the
mid-1990's with the ability to recall on one-year notice. Energy
<PAGE>
efficiency investments associated with new customers and new end-uses
naturally declined during the period of reduced load growth. Thus the
resource investment strategy with inherent flexibility and diversity
provided near-term benefits with unpredictable changing economic
conditions.
Based upon current load forecasts, the Company expects to be able to
satisfy its load requirements into the mid-1990's through its ownership in
various generating facilities and purchases from various other New
England, New York, Canadian utilities, Independent Power Qualifying, and
Conservation and Load Management. Current load and capacity forecasts for
NEPOOL indicate adequate reserves and availability of power for the region
as a whole into the late-1990's.
TRANSMISSION
Vermont Electric Power Company, Inc.
Since 1958 VELCO has been engaged in the operation of a high-voltage
transmission system which interconnects the electric utilities in the
State including the areas served by the Company. VELCO is also engaged in
the business of purchasing bulk power for resale, at cost, to the Company
and the other electric utilities (cooperative, municipal and
investor-owned) in Vermont (the "Vermont utilities") and transmitting such
power for the Vermont utilities. Refer to the notes to financial
statements for a discussion of the 1985 Four Party Agreement between the
Company, VELCO and two other major distribution companies in Vermont.
VELCO provides transmission services for the State of Vermont, acting
by and through the Department, and for all of the electric distribution
utilities in the State of Vermont. VELCO is reimbursed for its costs (as
defined in the agreements relating thereto) for the transmission of power
for such entities. The Company, as the largest electric distribution
utility in Vermont, is the major user of VELCO's transmission system.
The Company owns 34,083 shares (56.8%) of the Class B common stock of
VELCO, the balance being owned by other Vermont utilities. Each share of
Class B common stock has one vote. The Company also owns 46,624 shares
(46.6%) of the Class C preferred stock of VELCO, the balance being owned
by other Vermont utilities. Shares of Class C preferred stock have no
voting rights except the limited right to vote VELCO's shares of common
stock in Vermont Electric Transmission Company, Inc. if certain dividend
requirements are not met.
NEPOOL Arrangements.
VELCO participates for itself and as agent for the Company and
twenty-one other Vermont utilities in NEPOOL (see "Business-New England
Power Pool" for additional details).
Capitalization.
VELCO has authorized 92,000 shares of Class B common stock, $100 par
value, of which 60,000 shares were outstanding on December 31, 1993 and
125,000 shares of Class C preferred stock, of which 100,000 shares were
outstanding at December 31, 1993. On that date there were authorized and
outstanding three issues of First Mortgage Bonds, aggregating $41,263,000,
issued under an Indenture of Mortgage dated as of September 1, 1957, as
amended, between VELCO and Bankers Trust Company, as Trustee (the "VELCO
<PAGE>
Indenture"). The issuance of bonds under the VELCO Indenture is unlimited
in amount but is subject to certain restrictions.
New transmission and associated facilities will be required by VELCO
in 1994 to transmit power to Vermont utilities. The costs of such
facilities are presently estimated at $1,833,000 including allowance for
funds used during construction calculated at a rate of approximately 4.5%.
For a description of VELCO's properties, see "VELCO" under Item 2.
Management.
In 1957 VELCO entered into an agreement (the "Three-Party Agreement")
whereby the Company and Green Mountain agreed that, if VELCO transmits
firm power owned by it (which it does not now do), they would have the
right to purchase all such firm power not sold to others with their
consent and the obligation to pay (in agreed proportions) amounts
sufficient, together with VELCO's revenues from other sources, to pay all
VELCO's operating expenses, debt service and taxes. In connection with
the transfer to VELCO of entitlements of the output of the Vermont Yankee
plant, the Company and Green Mountain entered into a Three-Party
Transmission Agreement, dated November 21, 1969, as amended, whereby they
have agreed to pay transmission charges thereon in an aggregate amount
sufficient, with VELCO's other revenues, to pay all of VELCO's expenses
including capital costs. VELCO's Bonds are secured by a first mortgage on
the major part of VELCO's transmission properties and by the assignment to
the Trustee of the Three-Party Agreement, the Three-Party Transmission
Agreement and certain other contracts as specified in the VELCO Indenture.
Refer to Note 2 to Consolidated Financial Statements incorporated herein
by reference for information relating to the 1985 Four-Party Agreement.
Vermont Electric Transmission Company, Inc.
In connection with the importation of Canadian power, VELCO has
created a wholly owned subsidiary, Vermont Electric Transmission Company,
Inc. ("VETCO"), to construct, finance and operate the Vermont portion of
the transmission line which connects the Hydro-Quebec lines at the
Canadian border to the lines of New England Electric Transmission
Corporation, a subsidiary of New England Electric System, at the New
Hampshire border on the Connecticut River. VETCO has entered into a
Capital Funds Agreement with VELCO pursuant to which VETCO may request up
to $12,500,000 (of which $10,000,000 was contributed as of December 31,
1993) of capital contributions from VELCO and has entered into
Transmission Line Support Agreements with 20 New England utilities,
including VELCO as representative for 15 Vermont utilities, pursuant to
which those utilities have agreed to pay the transmission line costs,
whether or not the line is operational. VELCO, as such representative,
has entered into a similar agreement with New England Electric
Transmission Corporation with respect to the New Hampshire portion of the
DC transmission line and the DC/AC converter station. VELCO has entered
into a Vermont Participation Agreement and a Capital Funds Support
Agreement with 15 Vermont distribution utilities, including the Company,
pursuant to which those utilities assume their pro rata share (based upon
1980 sales) of the benefits and obligations of VELCO under the Support
Agreements and the VETCO Capital Funds Agreement.
VETCO has authorized 10 shares of common stock, $100 par value, all
of which were outstanding on December 31, 1993 and owned by VELCO, with
each share having one vote. During 1986 VETCO paid off its construction
financing by issuing $37,000,000 of secured notes, maturing in 2006, and
<PAGE>
receiving a $9,999,000 equity contribution from VELCO. The notes are
secured by a First Mortgage on the major part of VETCO's transmission
properties and by the assignment of its rights under the Support
Agreements.
Phase I and Phase II.
The Company participated with other electric utilities in the
construction of the Phase I Hydro-Quebec transmission facilities in
northeastern Vermont, which were completed at a total cost of
approximately $140 million. Under a support agreement relating to the
Company's participation in the facilities, the Company is obligated to pay
its 4.42% share of Phase I Hydro-Quebec capital costs over a twenty-year
recovery period through and including 2006. Phase II transmission line
began operation in November 1990. This service increased the maximum
capacity of the Hydro-Quebec 450 KV DC line from 690 MW to 2000 MW and
extended Phase I line from Comerford, New Hampshire to Sandy Pond,
Massachusetts. The Company uses this transmission path to deliver a
portion of the Company's long-term Hydro-Quebec firm power contract. The
project cost approximately $487 million. Under a similar support
agreement, the Company is obligated to pay its 5.132% share of Phase II
Hydro-Quebec capital costs over a 25-year recovery period through and
including 2015. Under the support agreement, the Company is eligible for
savings associated with certain energy transactions by NEPOOL, which will
offset the Company's support cost obligations.
CONSERVATION AND LOAD MANAGEMENT
The primary purpose of Conservation and Load programs is to offset
the need for long-term power supply and delivery resources that are more
expensive to purchase or develop than customer-efficiency programs.
Expenditures in 1992 and 1993 were $4.3 million and $9.5 million,
respectively, and are planned to be approximately $5.4 million in 1994.
The amount of expenditures will be adjusted annually, based on the
cost-effectiveness of programs compared to other options.
The PSB has approved all of the Company's C&LM programs delivered in
Vermont, which include direct utility investments in customer premises to
increase customer participation. In addition, the PSB has approved a
Monitoring and Evaluation Plan utilized to evaluate the continued
cost-effectiveness of the C&LM programs.
In late 1993, the Company filed a Petition to amend and slow the pace
of its C&LM programs in light of the excess capacity in the region which
made some of the C&LM programs less effective in the near-term. The
revised programs focus on improving efficiencies based on lessons learned
in the past several years. In addition, the programs focus on
incorporating efficiencies for new construction and remodeling programs
that have long useful lives. In the Petition, the Company stated it
planned to implement the program amendments with or without PSB approval
starting in 1994. By letter dated January 20, 1994, the PSB indicated it
would not be opening proceedings concerning the Petition at this time.
However, many of the issues raised in the Petition are before the PSB,
along with deferred C&LM expenditures and related lost revenues from 1991
to the present, in the PSB's investigation of our rates.
In addition, in Vermont, the Company is involved in several cases
related to C&LM activities including the role of fuel switching as a C&LM
<PAGE>
measure, the level of externalities for electricity and the role of fuel
choice in new construction.
In an order dated December 29, 1992, the NHPUC approved C&LM programs
of the Company's wholly owned New Hampshire subsidiary, Connecticut Valley
Electric Company Inc. Currently, the NHPUC staff and the Company have
reached agreement on all of the issues but one concerning the 1994 C&LM
expenditures and related lost revenues. These expenditures and lost
revenues are recovered along with shareholder incentives for 1993 program
activity through a C&LM percentage adjustment clause applied March 1, 1994
through the end of 1994. The only issue awaiting clarification by the
NHPUC is the method for calculating lost revenues. The agreement reached
by the Company and the NHPUC staff includes a pilot program through which
costs of C&LM services will be billed directly to customers.
To support delivery and evaluation of the programs, a complex
infrastructure of information systems, technical audit software packages
to estimate savings for efficiency measures and a comprehensive program
tracking system to track all efficiency activity by individual customers
was also put into place in 1992. Additionally, extensive training was
conducted with employees and information programs were directed at
customers throughout 1992.
Competition in the energy services market exists between electricity
and fossil fuels. In the residential and small commercial sectors this
competition is primarily for electric space and water heating from propane
and oil dealers. Competitive issues are price, service, convenience,
cleanliness and safety.
In the large commercial and industrial sectors, cogeneration and
self-generation are the major competitive threats to electric sales.
Competition here is primarily for seasonal, one-shift operations that can
tolerate periodic power outages, and for industrial customers with steady
heat loads where the generator's waste heat can be used in their
manufacturing process. Competitive issues here that favor electricity,
are the cost of back up power sources, space requirements, noise problems,
and maintenance requirements.
The Company provides information to customers to help them use
electricity more efficiently, first by ensuring that the customers are on
the correct rate and have incorporated efficiency and conservation
measures; secondly, by continually evaluating new energy management
systems and other technologies to identify and develop programs to address
new market opportunities and the competitive strengths of electricity.
DIVERSIFICATION
Catamount Energy Corporation (Catamount) was formed for the purpose
of investing in non-regulated energy-related projects. Currently,
Catamount has four wholly owned subsidiaries with interests in four
operating independent power projects located in Rumford, Maine;
East Ryegate, Vermont; Hopewell, Virginia; and Williams Lake,
British Columbia, Canada.
Effective January 1, 1993, the Company formed a new non-utility
subsidiary, SmartEnergy Services, Inc. The purpose of this subsidiary is
to cost effectively provide reliable, energy efficient products and
services, including the rental of electric water heaters. For additional
<PAGE>
information regarding the Company's diversification activities, see
Exhibit EX-13 incorporated herein by reference.
The Company is continually assessing additional diversification
opportunities. Any new investments will be financed primarily through a
combination of debt and equity.
EMPLOYEE INFORMATION
A Local Union No. 300 affiliated with the International Brotherhood
of Electrical Workers represents operating and maintenance employees of
the Company and its wholly owned subsidiaries. At December 31, 1993 the
Company and its wholly owned subsidiaries employed 775 persons, of which
264 are represented by the union. On December 18, 1989, the Company and
its employees represented by the union agreed to a three-year contract,
which provided for annual wage increases of 3%, 3.25% and 4.5% in 1990,
1991 and 1992, respectively. This contract expired on December 31, 1992.
The current contract, which was approved on December 31, 1992 and
effective January 1, 1993, provides for an annual wage increase of 3.95%
for a three year period ending December 31, 1995.
In the first quarter of 1994, the Company offered a Voluntary
Retirement Program (VRP) to eligible employees. Approximately 40
employees accepted the offer. The estimated benefit obligation for 1994
is about $4.4 million. This amount consists of pension benefits and
postretirement medical benefits of $2.2 million and $2.2 million,
respectively. For rate-making purposes, the Company received an
accounting order from the PSB dated March 11, 1994, requiring the Company
to defer these costs and amortize them over a five-year period beginning
June 1, 1994 and ending May 31, 1999. Additionally, the Company also
offered a Voluntary Severance Program (VSP) to certain employees. For
additional information in regard to the VRP and VSP programs, see Exhibit
EX-13 incorporated herein by reference.
SEASONAL NATURE OF BUSINESS
The Company experiences its heaviest loads in the colder months of
the year. Winter recreational activities, longer hours of darkness and
heating loads from cold weather usually cause the Company's peak of
electric MWH sales to occur in January or late December. For additional
information regarding the seasonal nature of business see Exhibit EX-13
incorporated herein by reference.
Item 2. Properties.
The Company. The Company's properties are operated as a single
system which is interconnected by transmission lines of VELCO, New England
Power Company and PSNH. The Company owns and operates 21 small generating
stations with a total current nameplate capability of 66,370 KW, has a
1.78% joint-ownership interest in an oil generating plant in Maine, has a
20% joint-ownership interest in a wood, gas and oil-fired generating plant
in Vermont, has a 1.73% joint-ownership interest in a nuclear generating
plant in Connecticut, has a 46.08% joint-ownership interest in a
transmission interconnection with Hydro-Quebec in Vermont and leases and
operates two hydro generating stations from wholly owned subsidiaries,
Bradford and East Barnet, 1,500 KW and 2,200 KW, respectively.
The electric transmission and distribution systems of the Company
include about 613 miles of overhead transmission lines, about 7,136 miles
<PAGE>
of overhead distribution lines and about 192 miles of underground
distribution lines which are located in Vermont except for about 23 miles
of transmission lines which are located in New Hampshire and about two
miles of transmission lines which are located in New York.
Connecticut Valley. Connecticut Valley's electric properties consist
of two principal systems in New Hampshire which are not interconnected
with each other but each of which is connected directly with facilities of
the Company.
The electric systems of Connecticut Valley include about two miles of
transmission lines and about 422 miles of overhead distribution lines and
about nine miles of underground distribution lines.
All the principal plants and important units of the Company and its
subsidiaries are held in fee. Transmission and distribution facilities
which are not located in or over public highways are, with minor
exceptions, located either on land owned in fee or pursuant to easements
substantially all of which are perpetual. Transmission and distribution
lines located in or over public highways are so located pursuant to
authority conferred on public utilities by statute, subject to regulation
of state or municipal authorities.
VELCO. VELCO's properties consist of about 483 miles of high
voltage overhead transmission lines and associated substations. The lines
connect on the west at the Vermont-New York state line with the lines of
Niagara Mohawk Power Corporation near Whitehall, New York, and Bennington,
Vermont and with the submarine cable of NYPA near Plattsburg, New York; on
the south and east with lines of New England Power Company and PSNH; and
on the south with the facilities of Vermont Yankee.
VETCO. VETCO has approximately 52 miles of high voltage DC
transmission line connecting at the Quebec-Vermont border in the Town of
Norton, Vermont with the transmission line of Hydro-Quebec and connecting
at the Vermont-New Hampshire border near New England Power Company's Moore
hydro-electric generating station with the transmission line of New
England Electric Transmission Corporation, a subsidiary of New England
Electric System.
Item 3. Legal Proceedings.
On December 5, 1991, Bonneville Pacific Corporation (Bonneville)
filed for protection under Chapter 11 of the Bankruptcy Laws. On
August 30, 1993, Bonneville's trustee in bankruptcy filed suit in the
United States Bankruptcy Court in Utah, claiming damages in excess of two
million dollars in connection with two contracts between Bonneville and
the Company concerning the development of a 52 MW co-generation plant in
Vermont and the sale of power from the plant to the Company. The Company
and Bonneville have settled the case and Bonneville's claim has been
dismissed with prejudice.
On March 20, 1992, Sunnyside Cogeneration Associates filed suit in
the United States District Court for the District of Vermont against the
Company, CV Energy Resources, Inc. (CVER) and a subsidiary of CVER
alleging damages in excess of five million dollars resulting from the
parties inability to come to agreement on the terms of CVER's proposed
investment in the plaintiff's waste coal cogeneration facility under
construction in Sunnyside, Utah. The Company has filed an answer denying
<PAGE>
the allegations and does not expect the resolution of the case to have a
material affect on the business or financial condition of the Company.
There are no other material pending legal proceedings, other than
ordinary routine litigation incidental to the business, to which the
Company or any of its subsidiaries is a party or to which any of their
property is subject.
Item 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted to security holders during the fourth
quarter of 1993.
PART II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters.
(a) The Company's common stock is traded on the New York Stock
Exchange ("NYSE") under the trading symbol CV.
The table below shows the high and low sales price of the Company's
common stock, as reported on the NYSE composite tape by The Wall Street
Journal, for each quarterly period during the last two years as follows:
Market Price
High Low
1993
First quarter.............. $ 25 5/8 $ 24 1/8
Second quarter............. 25 1/8 22
Third quarter.............. 24 3/4 23 1/4
Fourth quarter............. 23 3/4 20 1/8
1992(F1)
First quarter.............. $ 22 7/8 $ 19 5/8
Second quarter............. 21 1/4 19 1/2
Third quarter.............. 22 1/2 20 7/8
Fourth quarter............. 25 21 1/8
(FN)
(F1)Retroactively adjusted to reflect the three-for-two
stock split on February 11, 1993.
(b) As of December 31, 1993, there were 16,620 holders of the
Company's common stock, $6 par value.
(c) Common stock dividends have been declared quarterly. Cash
dividends of $.355 per share were paid for all quarters of 1993 and
post-split cash dividends of $.3475 per share were paid for all quarters
of 1992.
So long as any Senior Preferred Stock or Second Preferred Stock is
outstanding, except as otherwise authorized by vote of two-thirds of each
such class, if the Common Stock Equity (as defined) is, or by the
declaration of any dividend will be, less than 20% of Total Capitalization
(as defined), dividends on Common Stock (including all distributions
thereon and acquisitions thereof), other than dividends payable in Common
Stock, during the year ending on the date of such dividend declaration,
shall be limited to 50% of the Net Income Available for Dividends on
Common Stock (as defined) for that year; and if the Common Stock Equity
<PAGE>
is, or by the declaration of any dividend will be, from 20% to 25% of
Total Capitalization, such dividends on Common Stock during the year
ending on the date of such dividend declaration shall be limited to 75% of
the Net Income Available for Dividends on Common Stock for that year. The
defined terms identified above are used herein in the sense as defined in
subdivision 8A of the Company's Articles of Association; such definitions
are based upon the unconsolidated financial statements of the Company. As
of December 31, 1993, the Common Stock Equity of the Company was 52.7% of
total capitalization.
For additional information regarding dividend restrictions see
Exhibit EX-13 incorporated herein by reference.
Item 6. Selected Financial Data.
Information required to be furnished in response to this Item is
submitted as Exhibit EX-13 incorporated herein by reference.
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Information required to be furnished in response to this Item is
submitted as Exhibit EX-13 incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
Information required to be furnished in response to this Item is
submitted as Exhibit EX-13 incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers
of the Registrant.
The Company's Articles of Incorporation and By-Laws provide for the
division of the Board of Directors into three classes having staggered
terms of office. In accordance with the Company's By-Laws, the Board of
Directors has fixed at ten (10) the number of Directors for the ensuing
year. The Directors whose terms will expire at the 1994 Annual Meeting of
Stockholders are Frederic H. Bertrand, Mary Alice McKenzie and Robert D.
Stout. Each of these Directors will stand for re-election to a three-year
term expiring in 1997. Proxies will be voted (unless otherwise
instructed) in favor of the election of the three nominees as indicated in
the table below.
The following table sets forth certain information regarding the
three nominees for Director, as well as all Directors presently serving on
the Board whose terms will expire after the 1994 Annual Meeting. Each of
the individuals listed in the table has been employed by the firm or has
had the occupation set forth under his or her name for the past five
years. In general, the business experience of each of these persons
during this time was typical of a person engaged in the principal
occupation listed for each.
<PAGE>
<PAGE>
Names and Principal Occupation Served as
of Nominees and Directors Age Director Since
Nominees whose terms will expire in 1997:
FREDERIC H. BERTRAND 57 1984
Chairman of the Board and
Chief Executive Officer,
National Life Insurance Co.
Montpelier, Vermont
MARY ALICE MCKENZIE 36 1992
President,
John McKenzie Packing Co., Inc.
Burlington, Vermont
(Manufacturer of Meat Products)
ROBERT D. STOUT 67 1985
Retired President and
Chief Executive Officer,
Putnam Memorial Health Corporation
Bennington, Vermont
Directors whose terms will expire in 1996:
ROBERT P. BLISS, JR. 70 1973
President,
Bob Bliss, Ltd.
St. Albans, Vermont
(Insurance Industry Consultants)
ELIZABETH COLEMAN 56 1990
President,
Bennington College
Bennington, Vermont
PRESTON LEETE SMITH 63 1977
President and Chief Executive Officer,
S-K-I Ltd.
c/o Killington Ltd.
Killington, Vermont
(Ski Business)
THOMAS C. WEBB 59 1986
President and Chief Executive Officer,
Central Vermont Public Service Corporation
Rutland, Vermont
Directors whose terms will expire in 1995:
LUTHER F. HACKETT 60 1979
President,
Hackett, Valine & MacDonald, Inc.
Burlington, Vermont
(Insurance Agents)
<PAGE>
F. RAY KEYSER, JR. 66 1980
Chairman of the Board,
Central Vermont Public
Service Corporation,
Of Counsel, Keyser, Crowley,
Meub, Layden, Kulig &
Sullivan, P.C.
Rutland, Vermont
(Lawyers)
GORDON P. MILLS 57 1980
Chairman,
EHV-Weidmann Industries, Inc.
St. Johnsbury, Vermont
(Manufacturer of Electric
Transformer Insulation)
The following table sets forth the names and ages of all executive
officers of the Company, all positions and offices held within the Company,
as well as work experience and positions held during the past five years.
None of the executive officers of the Company has any family relationship
with any other executive officer of the Company.
Executive Officers of the Registrant:
Name and Age Office Officer Since
Thomas C. Webb, 59 President and Chief
Executive Officer 1985
Robert H. Young, 46 Executive Vice President
and Chief Operating Officer 1987
Steven J. Allenby, 39(F1) Senior Vice President-
Marketing and Customer Services 1985
Robert de R. Stein, 44 Senior Vice President-
Engineering and Energy Resources 1988
Jacquel-Anne Chouinard, 54 Vice President-Human Resources 1986
Thomas J. Hurcomb, 56 Vice President-Marketing and
Public Affairs 1975
Robert G. Kirn, 42 Vice President-Division
Operations 1991
Donald L. Rushford, 63 Vice President and General
Counsel 1972
Patricia A. Wakefield, 51(F1) Vice President-Marketing and
Customer Services 1988
William J. Deehan, 41 Assistant Vice President-Rates
and Economic Analysis 1991
Jonathan W. Booraem, 55 Treasurer 1984
<PAGE>
James M. Pennington, 38 Controller 1993
Joseph M. Kraus, 39 Secretary and General Counsel 1987
Mr. Webb joined the Company in 1985 as Executive Vice President -
Finance and Administration and in 1986 was also designated Chief Operating
Officer. He was elected Director, President and Chief Executive Officer on
July 1, 1986. From 1977 to 1985, Mr. Webb was employed by Central Maine
Power Company as Senior Vice President - Finance and Administration and in
other executive positions.
Mr. Young joined the Company in 1987 as Vice President - Finance and
Administration. Mr. Young was named Senior Vice President - Finance and
Administration in 1988, and in 1993 was elected Executive Vice President
and Chief Operating Officer. During 1985-1986, he served as Senior
Management Consultant for A. D. Little Co.
Mr. Stein joined the Company on June 1, 1988 as Assistant Vice
President - Energy Planning. Mr. Stein was elected Vice President - Energy
Supply Planning and Engineering effective January 1, 1990, and Senior Vice
President - Engineering and Energy Resources in 1993. During the period
1984-1988, he served United Illuminating Company as Manager of Revenue
Requirements and Manager of Generation Planning and Power Contracts.
Ms. Chouinard joined the Company in 1985 as Director - Human
Resources. She was elected Assistant Vice President - Human Resources in
1986 and assumed her present position in 1988.
Mr. Hurcomb joined the Company in 1967 in the Marketing and customer
Service area. He was elected Vice President - External Affairs in 1975,
and Vice President - Marketing and Public Affairs in 1993.
Mr. Kirn joined the Company in 1991 as Vice President - Division
Operations. From 1979 to 1991, he was employed by New York State Electric
& Gas Corporation. He served as Operations Manager of the Lancaster
Division Electric from 1988 until 1991 and as Operating Superintendent of
the Berkshire District from 1985 to 1988.
Mr. Rushford joined the Company in 1972 and has served as Vice
President and General Counsel since that time. Mr. Rushford retired
effective January 1, 1994.
Mr. Deehan joined the Company in 1985. Prior to being elected to his
present position, he served as Director of Rate Administration and
Forecasting since 1987 and as Energy Forecaster from 1985-1987.
Mr. Booraem has been with the Company since 1969. Prior to being
elected Treasurer in 1984, he was Director of Finance & Planning.
Mr. Kraus joined the Company in 1981 as Assistant Corporate Counsel.
He was named Associate Corporate Counsel in 1983 and Senior Corporate
Counsel in 1987. He was also elected Corporate Secretary and Senior
Corporate Counsel in 1987 and Corporate Secretary and General Counsel
effective January 1, 1994.
Mr. Pennington joined the Company in 1989 as Director of Taxes. He
was named Director of Taxes and Plant Accounting in 1990. Mr. Pennington
was designated Acting Controller effective July 19, 1992, and was elected
<PAGE>
Controller and named Principal Accounting Officer in 1993. From 1984 to
1989, he served as Senior Tax Accountant for Northern Indiana Public
Service Company.
(FN)
(F1) Steven J. Allenby and Patricia A. Wakefield resigned from the
Company effective October 31, 1993.
The term of each officer is for one year or until a successor is
elected.
Item 11. Executive Compensation.
The following table sets forth all cash compensation paid or to be
paid by the Company and its subsidiaries, as well as the number of stock
option awards earned during the last three fiscal years by the Company's
Chief Executive Officer and the Company's four other most highly
compensated policy making executive officers ("officer(s)") whose direct
cash compensation for services rendered to the Company and its subsidiaries
in all capacities exceeded $100,000.
<TABLE>
I. SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
(a) (b) (c) (d) (g) (i)
Name and Options/ All Other
Principal Salary Bonus SARs Compensation
Position Year ($)(F1) ($)(F2) (#)(F3) ($)(F4)
<S> <C> <C> <C> <C> <C>
A. Thomas C. Webb 1993 248,755 67,183 8,000/0 12,453
President and CEO 1992 244,694 73,000 6,000/0 17,850
1991 236,966 81,409 6,000/0 17,513
B. Robert H. Young, Jr. 1993 141,769 35,995 6,000/0 4,533
Executive Vice President 1992 130,667 34,073 4,500/0 4,363
and Chief Operating 1991 121,574 35,868 4,500/0 3,942
Officer
C. Robert de R. Stein 1993 114,677 16,804 4,500/0 3,988
Senior Vice President - 1992 105,473 18,728 3,000/0 3,472
Engineering and Energy 1991 97,881 24,126 3,000/0 3,138
Resources
D. Donald L. Rushford 1993 103,794 16,463 3,000/0 6,493
Vice President and 1992 104,001 18,700 3,000/0 4,620
General Counsel 1991 96,318 23,100 3,000/0 4,240
(Retired Effective 1/1/94)
E. Thomas J. Hurcomb 1993 98,382 15,606 3,000/0 4,996
Vice President - 1992 98,649 17,766 3,000/0 4,355
Marketing and 1991 92,863 22,894 3,000/0 3,304
Public Affairs
<PAGE>
(FN)
(F1) - 1993 includes compensation deferred at the election of all executive
officers named and directors' retainers and fees earned from VELCO by Mr. Webb.
- 1992 calendar year includes 53 pay periods.
- Includes compensation for services performed by Mr. Webb for Vermont
Yankee and by Mr. Stein for VELCO for which the Company was reimbursed.
- 1991 includes salary increases earned in 1991 but deferred until 1992 as
follows: For A: $6,966; for B: $3,574; for C: $2,881; for D: $2,753; and for E:
$2,733.
(F2) Includes incentive bonuses awarded by Catamount Energy Corporation in 1992
and 1993 and by CV Energy Resources, Inc. in 1991, both wholly owned subsid
iaries, as follows:
For A: 1993 - $10,000, 1992 - $5,000, 1991 - $12,409; for B: 1993 -$10,000,
1992 - $5,000, 1991 - $6,368; for C: 1991 - $5,126; for D: 1991 - $4,910; and
for E: 1991 - $4,864.
(F3) In 1991, the Board of Directors rescinded provisions of the 1988 Stock
Option Plan for Key Employees permitting grants of SAR's.
(F4) The total amounts shown in this column for the last fiscal year are
comprised as follows:
(i) Company matching contributions to the Employee Savings and Investment
Plan includes for A: $8,185; for B: $4,253; for C: $3,785; for D: $2,784; and
for E: $3,250.
(ii) Premium on executive split-dollar insurance (an insurance plan that
gives both employer and employee an interest in a life insurance policy on the
employee's life) for A: $1,801; for B: $280; for C: $203; for D: $791; and for
E: $494.
(iii) Includes accrued above-market interest on deferred compensation for
A: $2,467; for D: $2,918; and for E: $1,252.
</TABLE>
STOCK OPTIONS
The following table sets forth options granted to the Company's chief
executive officer and the Company's four other most highly compensated
executive officers during 1993 under the Company's 1988 Stock Option Plan.
Under SEC regulations, companies are required to project an estimate of
appreciation of the underlying shares of stock during the option term. The
Company has chosen the Black-Scholes model formula approved by the SEC.
However, the ultimate value will depend on the market value of the
Company's stock at a future date, which may or may not correspond to the
projections below.
<PAGE>
<TABLE>
II. OPTION/SAR GRANTS TABLE
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Grant Date
Individual Grants Value
(a) (b) (c) (d) (e) (f)
% of
Number of Total
Securities Options/
Underlying SARs
Options/ Granted to Exercise Grant
SARs Employees or Base Expira- Date
Granted in Fiscal Price tion Present
Name (#)(F1) Year ($/Sh)(F2) Date Value($)(F3)
<S> <C> <C> <C> <C> <C>
Thomas C. Webb 8,000/0 18.1% $24.375 5/4/03 $19,600
Robert H. Young, Jr. 6,000/0 13.5 24.375 5/4/03 14,700
Robert deR. Stein 4,500/0 10.2 24.375 5/4/03 11,025
Donald L. Rushford 3,000/0 6.8 24.375 5/4/03 7,350
Thomas J. Hurcomb 3,000/0 6.8 24.375 5/4/03 7,350
(FN)
(F1) A total of 44,300 shares were awarded to all plan participants in 1993.
Stock options are exercisable in whole or in part from the date of the grant
for a period of ten years and one day.
(F2) The exercise price reflects the post-split price and unexercised shares
have been adjusted for the 3 for 2 common stock split effective 2/11/93. The
exercise price represents the fair market value of the Company's Common Stock on
the date of the grant.
(F3) Per Black-Scholes model as certified by independent consultant. The
assumptions used for the Model are as follows: Volatility-.18 based on
quarterly prices for the period of 3/31/87 to 12/31/93; Risk free rate of
return-6%; Dividend Yield-6.5% over period of 3/31/87 to 12/31/93; and Term of
Exercise-10 years.
</TABLE>
The following table sets forth stock options exercised by the
Company's Chief Executive Officer and the Company's four other most highly
compensated executive officers during 1993, and the number and value of all
unexercised options at year-end. The value of "in-the-money" options
refers to options having an exercise price which is less than the market
price of the Company's stock on December 31, 1993.
<PAGE>
<TABLE>
III. OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Value
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized($)(F1)Unexercisable Unexercisable(F1)
<S> <C> <C> <C> <C>
Thomas C. Webb 6,000 $41,125 14,000/0 $ 3,500/0
Robert H. Young, Jr. - - 14,625/0 14,656/0
Robert de R. Stein - - 15,000/0 28,060/0
Donald L. Rushford 5,000 31,875 3,000/0 0/0
Thomas J. Hurcomb - - 15,000/0 35,120/0
(FN)
(F1) The dollar values are calculated by determining the difference between
the fair market value of the securities underlying the options and the exercise
or base price of the options.
</TABLE>
DEFERRED COMPENSATION PLAN
Employees of the Company who are officers are eligible to defer
receipt of a portion of their compensation pursuant to the Company's
Deferred Compensation Plan for Officers. Also, certain of the Directors of
the Company have elected to defer receipt of all or a portion of their fees
under a similar plan for Directors.
Under the Plan approved effective January 1, 1990 Directors and
Officers of the Company may elect to defer over a 5-year period receipt of
a specified amount of compensation or fees otherwise currently payable to
them until retirement at age 65 (age 70 for Directors), or until their
death, disability, or resignation. Officers may receive a reduced benefit
beginning at age 60 with 10 years of service. Amounts deferred are not
currently taxable for state and Federal income taxes. The benefit is equal
to the compensation deferred plus interest credited by the Company. This
plan is a defined contribution program under which the Company recovers any
costs, including the cost of capital, through the proceeds of the
supporting life insurance policies. In addition, if death of a Director
occurs before age 70, an additional survivor benefit equal to the annual
amount deferred will be paid to the beneficiary each year for fifteen
years. This benefit is also financed by life insurance proceeds.
PENSION PLAN
The Pension Plan of Central Vermont Public Service Corporation and Its
Subsidiaries (the "Plan") covers employees, among others, who are officers.
The Company pays the full cost of the Plan.
<PAGE>
The table below shows the annual amounts payable under the present
provisions of the Plan as amended through December 31, 1993, based on Final
Average Earnings for various years of service, assuming the employee would
retire at age 65 in 1994.
<TABLE>
<CAPTION>
Assumed
5-Year Final Years of Service
Average Earnings 15 20 25 30 35
<C> <C> <C> <C> <C> <C>
$ 80,000 $19,085 $25,447 $31,809 $ 38,171 $ 40,171
100,000 24,335 32,447 40,559 48,671 51,171
120,000 29,585 39,447 49,309 59,171 62,171
140,000 34,835 46,447 58,059 69,671 73,671
160,000 40,085 53,447 66,809 80,171 84,171
180,000 45,335 60,447 75,559 90,671 95,671
220,000 55,632 74,176 92,720 111,263 116,744
260,000 55,632 74,176 92,720 111,263 116,744
300,000 55,632 74,176 92,720 111,263 116,744
340,000 55,632 74,176 92,720 111,263 116,744
</TABLE>
Final Average Earnings is the highest five-year average of consecutive
years' Base Salary (item (c) from the Summary Compensation Table) over an
employee's career with the Corporation.
The amounts above are payable for the life of the retiree only, and
would be reduced on an actuarial basis if survivor options were chosen. In
addition, no Social Security offset applies to amounts above.
The credited years of service at December 31, 1993 under the Plan for
those individuals named in the Summary Compensation Table were as follows:
Mr. Webb, 9 years; Mr. Young, 6 years, 6 months; Mr. Stein, 5 years, 7
months; Mr. Rushford, 21 years, 6 months; and Mr. Hurcomb, 26 years.
OFFICERS' INSURANCE AND SUPPLEMENTAL RETIREMENT PLAN
The Officers' Insurance and Supplemental Retirement Plan (the "Plan")
is designed to supplement the retirement benefits available to the
Company's officers. The Plan is a part of the Company's overall strategy
for attracting and maintaining top managerial talent in the utility
industry. The Company pays the entire cost of the Plan.
Under the Plan, each officer is entitled to receive, upon his or her
retirement at age 65, fifteen annual payments in amounts equal to a
specified percentage of his or her final year's Base Salary (item (c) from
the Summary Compensation Table). A reduced benefit is available at age 60
with ten years of service.
The applicable percentages for the individuals named in Summary
Compensation Table are as follows: Mr. Webb, 44.5%; Mr. Young, 33%; Mr.
Stein, 33%; Mr. Rushford, 33%; and Mr. Hurcomb, 33%.
Shown below is the estimated Company provided benefit payable at age
65 for those individuals named in the Summary Compensation Table who
<PAGE>
receive a benefit under the Officers' Insurance and Supplemental Retirement
Plan:
Assumed Final
Annual Base Pay
$ 33% 44.5%
80,000 26,400 35,600
100,000 33,000 44,500
120,000 39,600 53,400
140,000 46,200 62,300
160,000 52,800 71,200
180,000 59,400 80,100
220,000 72,600 97,900
260,000 85,800 115,700
300,000 99,000 133,500
340,000 112,200 151,300
PREDECESSOR DEFERRED COMPENSATION PLAN
Between 1986 and 1990, the Company allowed officers to defer receipt
of compensation in return for fifteen annual payments of a defined benefit
amount upon retirement. The Company will pay the difference, if any,
between the defined benefit cost and the accumulated value of deferred
compensation.
Shown below is the estimated Company-provided benefit, payable at age
65, for those individuals named in the Summary Compensation Table who
elected to participate. Since these benefits do not apply to all of the
named individuals, they have not been reflected in the foregoing pension
table.
Annual Company-
Provided Benefit
Name Payable at Age 65
Mr. Webb $29,800
Mr. Rushford 19,700
Mr. Hurcomb 13,900
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's Officers and Directors to file reports of ownership and changes
in ownership of Company securities with the Securities and Exchange
Commission and to furnish the Company with copies of all such reports. In
1993, Director Mary Alice McKenzie inadvertently failed to file with the
Securities and Exchange Commission on a timely basis one required report
involving one transaction in Common Stock of the Company which she
beneficially owns. Except for the foregoing, the Company believes that
during 1993 all filing requirements applicable to its Officers and
Directors have been met. In making this statement, the Company has relied
on copies of reports that have been filed with the Commission.
Section 16(a) of the Securities Exchange Act of 1934 also requires
executive officers and directors and persons who beneficially own more than
ten percent (10%) of the Company's stock to file initial reports of
<PAGE>
ownership and subsequent reports of changes in ownership with the SEC and
the NYSE.
Based solely on a review of the copies of such forms prepared and
filed during 1993 on behalf of our executive officers and directors, and on
written representations that no other reports were required the Company
believes its directors and executive officers have complied with all
Section 16(a) filing requirements. The Company does not have a ten percent
holder.
The following is a tabulation of equity securities of the Company
beneficially owned by all present Directors and Executive Officers of the
Company as a group (19 persons) as of January 31, 1994. No Director,
nominee for Director or Executive Officer owns any shares of the various
classes of the Company's outstanding non-voting preferred stock.
Title of Class Amount Beneficially Owned Percent of Class
Common Stock,
$6 Par Value 187,908 shares (F1) 1.6%
(FN)
(F1) Includes 124,625 shares that the directors and executive officers
have a right to acquire pursuant to options granted under Stock Option
plans.
The Company knows of no person, entity or group (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934) which owns
beneficially more than 5% of any class of the Company's outstanding equity
securities.
Item 13. Certain Relationships and Related Transactions.
None.
Filed
Herewith
at Page
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K.
(a) The following documents are filed as part of this
report:
1. Management's Discussion:
1.1 Central Vermont Public Service Corporation
and its wholly owned subsidiaries: (See Item 7)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
<PAGE>
2. Financial Statements:
2.1 Central Vermont Public Service Corporation and
its wholly owned subsidiaries: (See Item 8)
Consolidated Statement of Income,
years ended December 31, 1993,
1992, and 1991.
Consolidated Statement of Cash Flows,
years ended December 31, 1993, 1992
and 1991.
Consolidated Balance Sheet,
December 31, 1993 and 1992.
Consolidated Statement of Capitalization,
December 31, 1993 and 1992.
Consolidated Statement of Changes in Common
Stock Equity, years ended December 31, 1993,
1992 and 1991.
Notes to Consolidated Financial Statements.
3. Financial Statement Schedules:
3.1 Central Vermont Public Service Corporation and
its wholly owned subsidiaries:
Schedule V - Utility Plant, years ended
December 31, 1993, 1992 and 1991.
Schedule VI - Accumulated Depreciation of
Utility Plant, years ended December 31, 1993,
1992 and 1991.
Filed
Herewith
at Page
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K Continued.
Schedule VIII - Reserves, years ended
December 31, 1993, 1992 and 1991.
Schedule IX - Short-term borrowings,
years ended December 31, 1993, 1992 and 1991.
3.2 Financial Statements and Schedules for Vermont
Yankee Nuclear Power Corporation - per index
attached.
Schedules not included have been omitted because they
are not applicable or the required information is shown
in the financial statements or notes thereto. Separate
financial statements of the Registrant (which is primarily
<PAGE>
an operating company) have been omitted since they are
consolidated only with those of totally held subsidiaries.
Separate financial statements of subsidiary companies not
consolidated have been omitted since, if considered in
the aggregate, they would not constitute a significant
subsidiary. Other than Vermont Yankee Nuclear Power
Corporation, separate financial statements of 50% or less
owned persons for which the investment is accounted for
by the equity method by the Registrant have been omitted
since, if considered in the aggregate, they would not
constitute a significant investment.
(b) Reports on Form 8-K:
There were no reports on Form 8-K for the quarter ended
December 31, 1993.
(c) See exhibits index.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Central Vermont Public Service Corporation:
We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements included in Central Vermont Public
Service Corporation's annual report to shareholders incorporated by
reference in this Form 10-K, and have issued our report thereon dated
February 7, 1994. Our audit was made for the purpose of forming an
opinion on those statements taken as a whole. The schedules listed in the
index above are the responsibility of the Company's management and are
presented for purposes of complying with the Securities and Exchange
Commission's rules and are not part of the basic financial statements.
These schedules have been subjected to the auditing procedures applied in
the audit of the basic consolidated financial statements and, in our
opinion, fairly state, in all material respects, the consolidated
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
Boston, Massachusetts,
February 7, 1994
<PAGE>
Schedule V
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
AND ITS WHOLLY OWNED SUBSIDIARIES
<TABLE>
Utility Plant and Nuclear Fuel
Years ended December 31, 1993, 1992 and 1991
<CAPTION>
Description 1993 1992 1991
<S> <C> <C> <C>
Electric plant:
Intangible $ 9,530,882 $ 9,530,962 $ 864,165
Production 127,113,202 127,151,910 125,136,959
Transmission 60,588,771 61,175,146 62,032,252
Distribution 162,583,392 158,350,306 153,931,597
General 33,514,895 31,974,205 30,587,869
Electric plant purchased - - 463,432
Completed construction not classified 32,905,951 19,678,446 12,867,786
Completed retirements not classified (4,308,252) (1,165,859) (790,101)
Construction work in progress 8,388,392 10,534,478 13,945,677
430,317,233 417,229,594 399,039,636
Nuclear fuel:
Fuel in refinement (921) 339,386 15,582
Fuel in stock 123,885 192,150 190,552
Fuel in reactor 2,169,513 2,581,613 2,581,613
Fuel spent 3,996,750 2,768,689 2,768,689
6,289,227 5,881,838 5,556,436
$436,606,460 $423,111,432 $404,596,072
____________ ____________ ____________
(FN)
(a)Neither total additions of $18,442,288, $19,916,850 or $18,077,565 nor
total retirements of $4,947,180, $1,401,490 or $2,671,746 for the years
ended December 31, 1993, 1992 and 1991, respectively, exceeded 10% of
the utility plant balance at the end of the year.
</TABLE>
<PAGE>
Schedule VI
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
AND ITS WHOLLY OWNED SUBSIDIARIES
Accumulated Depreciation
Of Electric Plant And
Amortization Of Nuclear Fuel
Years ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Balance at beginning of year $102,328,927 $ 88,780,026 $79,381,919
Additions:
Charges to expense 15,246,243 14,265,003 12,264,213
Salvage value of plant retired 660,011 556,873 762,217
Other(F1) - 1,188,239 -
Total additions 15,906,254 16,010,115 13,026,430
Deductions:
Retirements, renewals and replacements 4,944,980 1,401,490 2,684,708
Removal cost of plant retired during the year 991,631 1,059,724 943,615
Total deductions 5,936,611 2,461,214 3,628,323
Total accumulated depreciation 112,298,570 102,328,927 88,780,026
Accumulated amortization of nuclear fuel 4,899,751 4,385,120 3,837,982
Balance at end of year $117,198,321 $106,714,047 $92,618,008
____________ ____________ ___________
(FN)
(F1) Prior years depreciation expense related to electric plant purchased
in 1991.
</TABLE>
<PAGE>
Schedule VIII
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
AND ITS WHOLLY OWNED SUBSIDIARIES
Reserves
Year ended December 31, 1993
<TABLE>
<CAPTION>
Additions
Balance at Charged to Charged Balance at
beginning costs and to other end of
of year expenses accounts Deductions year
<S> <C> <C> <C> <C> <C>
Reserves deducted from assets
to which they apply:
$ 64,809(F1)
Reserve for uncollectible 324,081(F2)
accounts receivable $1,079,806 $960,000 $388,890 $1,492,616(F3) $ 936,080
__________ ________ ________ __________ __________
Accumulated depreciation of
miscellaneous properties:
Rental water heater program $3,334,201 $352,547 - $ 257,804(F4) $3,428,944
Non-utility property 41,052 27,101 - - 68,153
$3,375,253 $379,648 $ 257,804 $3,497,097
__________ ________ __________ __________
Reserve shown separately:
Injuries and damages reserve $ 242,901 - - $ 17,321(F5) $ 225,580
__________ __________ __________
(FN)
(F1) Amount due from collection agency.
(F2) Collections of accounts previously written off.
(F3) Uncollectible accounts written off.
(F4) Retirements of rental water heaters.
(F5) Payments for construction accidents.
</TABLE>
<PAGE>
Schedule VIII
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
AND ITS WHOLLY OWNED SUBSIDIARIES
Reserves
Year ended December 31, 1992
<TABLE>
<CAPTION>
Additions
Balance at Charged to Charged Balance at
beginning costs and to other end of
of year expenses accounts Deductions year
<S> <C> <C> <C> <C> <C>
Reserves deducted from assets
to which they apply:
Reserve for uncollectible
accounts receivable $ 992,433 $1,018,700 $355,472(F1) $1,286,799(F2) $1,079,806
__________ __________ ________ __________ __________
Accumulated depreciation of
miscellaneous properties:
Rental water heater program $3,283,660 $ 350,642 - $ 300,101(F3) $3,334,201
Non-utility property 293,777 27,958 - 280,683(F4) 41,052
$3,577,437 $ 378,600 $ 580,784 $3,375,253
__________ __________ __________ __________
Reserve shown separately:
Injuries and damages reserve $ 268,077 - - $ 25,176(F5) $ 242,901
__________ __________ __________
(FN)
(F1) Collection of accounts previously written off.
(F2) Uncollectible accounts written off.
(F3) Retirements of rental water heaters.
(F4) Retirement of non-utility property.
(F5) Payments for construction accidents.
</TABLE>
<PAGE>
Schedule VIII
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
AND ITS WHOLLY OWNED SUBSIDIARIES
Reserves
Year ended December 31, 1991
<TABLE>
<CAPTION>
Additions
Balance at Charged to Charged Balance at
beginning costs and to other end of
of year expenses accounts Deductions year
<S> <C> <C> <C> <C> <C>
Reserves deducted from assets
to which they apply:
Reserve for uncollectible
accounts receivable $ 726,992 $1,353,084 $147,337(F1) $1,234,980(F2) $ 992,433
__________ __________ ________ __________ __________
Accumulated depreciation of
miscellaneous properties:
Rental water heater program $3,197,620 $ 327,586 $ - $ 241,546(F3) $3,283,660
Non-utility property - 51,068 242,709(F4) - 293,777
$3,197,620 $ 378,654 $242,709 $ 241,546 $3,577,437
__________ __________ ________ __________ __________
Reserve shown separately:
Injuries and damages reserve $ 262,584 $ - $ 16,289(F5) $ 10,796(F6) $ 268,077
__________ __________ ________ __________ __________
(FN)
(F1) Collections of accounts previously written off.
(F2) Uncollectible accounts written off.
(F3) Retirements of rental water heaters.
(F4) Transfer from utility property to non-utility property.
(F5) Charged to construction and retirement work in progress.
(F6) Payments for construction accidents.
</TABLE>
<PAGE>
Schedule IX
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
AND ITS WHOLLY OWNED SUBSIDIARIES
Short-Term Borrowings
Years Ended December 31, 1993, 1992, 1991
<TABLE>
<CAPTION>
Interest Rate Maximum Average Weighted Average
Category of Aggregate Balance at at End of Amount Outstanding Amount Outstanding Interest Rate
Short-Term Borrowings End of Period Period at any Month-end During the Period (F2) During the Period(
<S> <C> <C> <C> <C> <C>
Notes Payable to Banks (F1)
Period Ending - 1993..... $ 1,356,000 5.20% $43,945,000 $ 8,488,000 3.67%
Period Ending - 1992..... $ 2,100,000 4.22% $ 2,100,000 $ 186,000 4.30%
Period Ending - 1991..... - - $18,700,000 $ 5,769,000 6.16%
(FN)
(F1) The Company had committed lines of credit amounting to $19,500,000 and
uncommitted loan facilities amounting to $25,000,000 at December 31, 1993.
The Company had fee arrangements on some of these short-term borrowing
arrangements.
(F2) Average amount outstanding computed by using daily debt balances.
(F3) The weighted average interest rate is computed by using daily
debt balances and daily interest expense.
</TABLE>
<PAGE>
<PAGE>
Independent Auditor's Report
The Stockholders and Board of Directors Vermont Yankee Nuclear Power
Corporation:
We have audited the accompanying balance sheet of Vermont Yankee Nuclear
Power Corporation as of December 31, 1993, and the related statements of
income and retained earnings and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audit. The financial statements of Vermont Yankee Nuclear
Power Corporation as of December 31, 1992 and 1991, were audited by other
auditors whose report, dated February 5, 1993, expressed an unqualified
opinion on those statements and included an additional paragraph
discussing the Company's 1992 change in accounting for postretirement
benefits other than pensions.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Vermont Yankee Nuclear
Power Corporation as of December 31, 1993, and the results of its
operations and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
As discussed in note 10 of the accompanying financial statements,
effective January 1, 1993 the Company adopted the provisions of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes".
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as whole. The supplementary schedules are
presented for purposes of additional analysis and are not a required part
of the basic financial statements. This information has been subjected to
the auditing procedures applied in our audit of the basic financial
statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.
Arthur Andersen & Co.
Boston, Massachusetts January 27, 1994
<PAGE>
<PAGE>
VERMONT YANKEE NUCLEAR POWER CORPORATION
Index to Financial Statements and Financial Statement Schedules
Financial Statements:
Balance Sheets, December 31, 1993 and 1992
Statements of Income and Retained Earnings, years ended
December 31, 1993, 1992 and 1991
Statements of Cash Flows, years ended December 31 ,1993,
1992 and 1991
Notes to Financial Statements
Financial Statement Schedules:
Schedule I - Marketable Securities and Other Investments
at December 31, 1993
Schedule V - Property, Plant and Equipment, years ended
December 31, 1993, 1992 and 1991
Schedule VI - Accumulated Depreciation, Depletion and
Amortization of Property, Plant and Equipment, years
ended December 31, 1993, 1992 and 1991
All other schedules are omitted as the required information is
inapplicable or the required information is included in the financial
statements or related notes.
<PAGE>
Balance Sheets
Assets
December 31,
1993 1992
(Dollars in thousands)
Utility plant:
Electric plant, at cost (note 6) $ 374,736 $ 362,278
Less accumulated depreciation 198,389 185,263
176,347 177,015
Construction work in progress 597 6,408
Net electric plant 176,944 183,423
Nuclear fuel, at cost (note 6):
Assemblies in reactor 69,063 74,025
Fuel in process - 5,236
Spent fuel 287,700 259,199
356,763 338,460
Less accumulated amortization of
burned nuclear fuel 317,039 302,362
39,724 36,098
Less accumulated amortization of
final core nuclear fuel 7,220 6,487
Net nuclear fuel 32,504 29,611
Net utility plant 209,448 213,034
Current assets:
Cash and temporary investments 2,349 1,922
Accounts receivable from sponsors 12,235 15,407
Other accounts receivable 4,522 2,715
Materials and supplies 17,081 16,862
Prepaid expenses 3,949 4,381
Total current assets 40,136 41,287
Deferred charges:
Deferred decommissioning costs
(note 2) 34,379 34,389
Accumulated deferred income taxes
(note 10) 18,231 10,378
Deferred DOE enrichment site
decontamination and
decommissioning fee (note 4) 18,627 18,143
Net unamortized loss on reacquired debt 2,942 -
Other deferred charges (note 4) 3,643 4,994
Total deferred charges 77,822 67,904
Long-term funds at amortized cost:
Decommissioning fund
(notes 2, 5, and 7) 98,880 82,091
Disposal fee defeasance fund
(notes 5, 7, and 8) 43,484 33,892
Total long-term funds 142,364 115,983
$469,770 $438,208
See accompanying notes to financial statements.
<PAGE>
Balance Sheets
Capitalization and Liabilities
December 31,
1993 1992
(Dollars in thousands)
Capitalization:
Common stock equity:
Common stock, $100 par value; authorized
400,100 shares; issued 400,014 shares of
which 7,533 are held in Treasury $ 40,001 $ 40,001
Additional paid-in capital 14,227 14,227
Treasury stock (7,533 shares at cost) (1,131) (1,131)
Retained earnings 1,067 1,178
Total common stock equity 54,164 54,275
Long-term obligations, net
(notes 6 and 7) 79,636 74,193
Total capitalization 133,800 128,468
Commitments and contingencies
(notes 2, 14 and 15)
Disposal fee and accrued interest
for spent nuclear fuel (notes 7 and 8) 80,688 78,239
Current liabilities:
Accrued liabilities 28,063 22,743
Accounts payable 2,117 2,591
Accrued interest 635 974
Accrued taxes 1,206 1,472
Total current liabilities 32,021 27,780
Deferred credits:
Accrued decommissioning costs (note 2) 134,614 117,601
Accumulated deferred income taxes 56,478 58,963
Net regulatory tax liability (note 10) 8,351 -
Accumulated deferred investment
tax credits 7,013 7,590
Net unamortized gain on reacquired debt - 1,732
Accrued DOE enrichment
site decontamination and
decommissioning fee (note 4) 15,966 17,220
Other deferred credits 839 615
Total deferred credits 223,261 203,721
$469,770 $438,208
See accompanying notes to financial statements.
<PAGE>
Statements of Income and Retained Earnings
Years ended December 31,
1993 1992 1991
(Dollars in thousands
except per share amounts)
Operating revenues $180,145 $175,919 $151,722
Operating expenses:
Nuclear fuel expense 19,526 21,240 24,864
Other operating expense 74,013 72,967 59,666
Maintenance 31,405 27,878 13,664
Depreciation 13,707 13,253 11,800
Decommissioning expense (note 2) 11,315 10,649 8,065
Taxes on income (note 10) 3,777 3,401 3,485
Property and other taxes 9,961 10,227 10,294
Total operating expenses 163,704 159,615 131,838
Operating income 16,441 16,304 19,884
Other income and (deductions):
Net earnings on decommissioning
fund (notes 2 and 5) 5,653 5,395 4,423
Decommissioning expense (note 2) (5,653) (5,395) (4,423)
Allowance for equity funds used
during construction 92 89 124
Interest 1,550 2,046 1,377
Taxes on other income (note 10) (623) (756) (447)
Other, net (232) (199) (917)
787 1,180 137
Income before interest expense 17,228 17,484 20,021
Interest expense:
Interest on long-term debt 7,281 7,101 7,684
Interest on disposal costs of
spent nuclear fuel (note 8) 2,450 2,801 4,312
Allowance for borrowed funds used
during construction (297) (339) (465)
Total interest expense 9,434 9,563 11,531
Net income 7,794 7,921 8,490
Retained earnings at beginning
of year 1,178 1,166 1,982
8,972 9,087 10,472
Dividends declared 7,905 7,909 9,306
Retained earnings at end of year $ 1,067 $ 1,178 $ 1,166
Average number of shares
outstanding in thousands 392 392 394
Net income per average share
of common stock outstanding $ 19.86 $ 20.18 $ 21.56
<PAGE>
Dividends per average share of common stock outstanding $
20.14 $ 20.15 $ 23.71
See accompanying notes to financial statements.
<PAGE>
Statements of Cash Flows
Years ended December 31,
1993 1992 1991
(Dollars in thousands)
Cash flows from operating activities:
Net income $7,794 $ 7,921 $ 8,490
Adjustments to reconcile net
income to net cash provided
by operating activities:
Amortization of nuclear fuel 15,410 18,143 21,002
Depreciation 13,707 13,253 11,800
Decommissioning expense 11,315 10,649 8,065
Deferred tax expense (979) (2,169) (801)
Amortization of deferred
investment tax credits (577) (641) (740)
Nuclear fuel disposal fee
interest accrual 2,450 2,802 4,312
Interest and dividends on
disposal fee defeasance fund (1,402) (1,385) (1,495)
(Increase) decrease in
accounts receivable 1,365 688 (129)
(Increase) decrease in prepaid
expenses 432 (1,159) 163
(Increase) in materials and
supplies inventory (219) (454) (1,531)
Increase (decrease) in accounts
payable and accrued liabilities 4,846 (7,453) 5,495
Increase (decrease) in interest
and taxes payable (605) 306 (760)
Other (1,228) (1,410) (1,665)
Total adjustments 44,515 31,170 43,716
Net cash provided by
operating activities 52,309 39,091 52,206
Cash flows from investing activities:
Electric plant additions (7,229) (10,750) (6,596)
Nuclear fuel additions (18,303) (4,707) (18,444)
Payments to decommissioning fund (11,250) (10,612) (8,323)
Payments to disposal fee
defeasance fund (8,190) (5,190) (8,216)
Net cash used in investing
activities (44,972) (31,259) (41,579)
Cash flows from financing activities:
Dividend payments (7,905) (7,909) (9,306)
Purchase of treasury stock - - (1,131)
Issuance of Series H first
mortgage bonds, net - - 10,374
Issuance of Series I first
<PAGE>
mortgage bonds, net 75,125 - -
Retirement of first mortgage bonds
including redemption costs (74,629) (6,521) (13,178)
<PAGE>
Payments of long-term obligations (137,911) (107,763) (53,419)
Borrowings under long-term
agreements 138,410 111,215 53,798
Net cash used in financing
activities (6,910) (10,978) (12,862)
Net increase (decrease) in cash and
temporary investments 427 (3,146) (2,235)
Cash and temporary investments at
beginning of year 1,922 5,068 7,303
Cash and temporary investments
at end of year $ 2,349 $ 1,922 $ 5,068
See accompanying notes to financial statements.
Notes to Financial Statements
NOTE 1. Summary of Significant Accounting Policies
(a) Regulations and Operations
Vermont Yankee Nuclear Power Corporation ("the Company") is subject to
regulations prescribed by the Federal Energy Regulatory Commission
("FERC"), and the Public Service Board of the State of Vermont with
respect to accounting and other matters. The Company is also subject to
regulation by the Nuclear Regulatory Commission ("NRC") for nuclear plant
licensing and safety, and by federal and state agencies for environmental
matters such as air quality, water quality and land use.
Prior to November, 1993, the Company was subject to regulation by the
Securities and Exchange Commission. As a result of the debt refinancing
discussed in note 6, the Company is no longer subject to such regulation.
The Company recognizes revenue pursuant to the terms of the Power
Contracts and Additional Power Contracts. The Sponsors, a group of nine
New England utilities, are severally obligated to pay the Company each
month their entitlement percentage of amounts equal to the Company's total
fuel costs and operating expenses of its Plant, plus an allowed return on
equity (since December 1, 1989, 12.25%). Such contracts also obligate the
Sponsors to make decommissioning payments through the end of the Plant's
service life and the completion of the decommissioning of the Plant. All
Sponsors are committed to such payments regardless of the Plant's
operating level or whether the Plant is out of service during the period.
Under the terms of the Capital Funds Agreements, the Sponsors are
committed, subject to obtaining necessary regulatory authorizations, to
make funds available to obtain or maintain licenses necessary to keep the
Plant in operation.
(b) Depreciation and Maintenance
Electric plant is being depreciated on the straight-line method at rates
<PAGE>
designed to fully depreciate all depreciable properties over the lesser of
estimated useful lives or the Plant's remaining NRC license life, which
extends to March, 2012. Depreciation expense was equivalent to overall
effective rates of 3.74%, 3.56% and 3.23% for the years 1993, 1992 and
1991, respectively.
Renewals and betterments constituting retirement units are charged to
electric plant. Minor renewals and betterments are charged to maintenance
expense. When properties are retired, the original cost, plus cost of
removal, less salvage, is charged to the accumulated provision for
depreciation.
(c) Amortization of Nuclear Fuel
The cost of nuclear fuel is amortized to expense based on the rate of
burn-up of the individual assemblies comprising the total core. The
Company also provides for the costs of disposing of spent nuclear fuel at
rates specified by the United States Department of Energy ("DOE") under a
contract for disposal between the Company and the DOE.
The Company amortizes to expense on a straight-line basis the estimated
costs of the final unspent nuclear fuel core, which is expected to be in
place at the expiration of the Plant's NRC operating license in conformity
with rates authorized by the FERC.
(d) Amortization of Materials and Supplies
The Company amortizes to expense a formula amount designed to fully
amortize the cost of the material and supplies inventory that is expected
to be on hand at the expiration of the Plant's NRC operating license.
(e) Long-term Funds
The Company accounts for its investments in long-term funds at amortized
cost since it has both the intent and ability to hold these investments
for the foreseeable future. Amortized cost represents the cost to
purchase the investment, net of any unamortized premiums or discounts.
Notes to Financial Statements
NOTE 1. Summary of Significant Accounting Policies (Continued)
(f) Amortization of Gain and Loss on Reacquired Debt
The difference between the amount paid upon reacquisition of any debt
security and the face value thereof, plus any unamortized premium, less
any related unamortized debt expense and reacquisition costs, or less any
unamortized discount, related unamortized debt expense and reacquisition
costs applicable to the debt redeemed, retired and canceled, is deferred
by the Company and amortized to expense on a straight-line basis over the
remaining life of the applicable security issues.
(g) Allowance for Funds Used During Construction
Allowance for funds used during construction ("AFUDC") is the estimated
cost of funds used to finance the Company's construction work in progress
and nuclear fuel in process which is not recovered from the Sponsors
through current revenues. The allowance is not realized in cash
<PAGE>
currently, but under the Power Contracts, the allowance will be recovered
in cash over the Plant's service life through higher revenues associated
with higher depreciation and amortization expense.
AFUDC was capitalized at overall effective rates of 5.92%, 6.82% and 6.98%
for 1993, 1992 and 1991, respectively, using the gross rate method.
(h) Decommissioning
The Company is accruing the estimated costs of decommissioning its Plant
over the Plant's remaining NRC license life. Any amendments to these
estimated costs are accounted for prospectively.
(i) Taxes on Income
Effective January 1, 1993, the Company began accounting for taxes on
income under the liability method required by Statement of Financial
Accounting Standard 109. See Note 10 for a further discussion of this
change in accounting.
Investment tax credits have been deferred and are being amortized to
income over the lives of the related assets.
(j) Cash Equivalents
For purposes of the Statements of Cash Flows, the Company considers all
highly liquid short-term investments with an original maturity of three
months or less to be cash equivalents.
(k) Reclassifications
Certain information in the 1992 and 1991 financial statements has been
reclassified to conform with the 1993 presentation.
(l) Earnings per Common Share
Earnings per common share have been computed by dividing earnings
available to common stock by the weighted average number of shares
outstanding during the year.
Notes to Financial Statements
NOTE 2. Decommissioning
The Company accrues estimated decommissioning costs for its nuclear plant
over its remaining NRC licensed life based on studies by an independent
engineering firm that assumes that decommissioning will be accomplished by
the prompt removal and dismantling method. This method requires that
radioactive materials be removed from the plant site and that all
buildings and facilities be dismantled immediately after shutdown.
Studies estimate that approximately six years would be required to
dismantle the Plant at shutdown, remove wastes and restore the site. The
Company has implemented rates based on a settlement agreement with the
FERC which allowed $190 million, in 1988 dollars, as the estimated
decommissioning cost. This allowed amount is used to compute the
Company's liability and billings to the Sponsors. Based on an assumed
inflation rate of 6% per annum and an expiration of the Plant's NRC
operating license in 2012, the estimated current cost of decommissioning
is $253 million and, at the end of 2012, is approximately $769 million.
<PAGE>
The present value of the pro rata portion of decommissioning costs
recorded to date is $134.6 million. On December 31, 1993, the balance in
the Decommissioning Trust was $98.9 million.
Billings to Sponsors for estimated decommissioning costs commenced during
1983, at which time the Company recorded a deferred charge for the present
value of decommissioning costs applicable to operations of the Plant for
prior periods. Current period decommissioning costs not funded through
billings to Sponsors or earnings on decommissioning fund assets are also
deferred. These deferred costs will be amortized to expense as they are
funded over the remaining life of the NRC operating license.
In 1994, the Company must file a revised estimate of decommissioning costs
and a revised schedule of future annual decommissioning fund collections
reflecting the historical differences between assumed and actual rates of
inflation and the historical differences between assumed and actual rates
of earnings on decommissioning fund assets. Filings are required to be
made within four years of the most recent FERC approval of decommissioning
cost estimates and rates.
Cash received from Sponsors for plant decommissioning costs is deposited
into the Vermont Yankee Decommissioning Trust in either the Qualified Fund
(i.e., amounts currently deductible pursuant to the IRS regulations) or
the Nonqualified Fund (i.e., excess collections pursuant to FERC
authorization which are not currently deductible). Funds held by the
Trust are invested in high-grade U.S. government securities and municipal
obligations. Interest earned by the Decommissioning Trust assets is
recorded in other income and deductions, with an equal and offsetting
amount representing the current period decommissioning cost funded by such
earnings reflected as decommissioning expense.
Decommissioning expense for 1991 included an adjustment of approximately
$2.1 million resulting from the Company's rate reduction filing approved
by the FERC on February 28, 1991 as discussed in Note 3.
NOTE 3. FERC Rate Case Matters
On April 27, 1989, Vermont Yankee filed an application with the NRC to
extend the term of the operating license from 2007 to 2012 so that the
Plant may operate for 40 years after it entered commercial service in
1972. On December 17, 1990, the NRC issued an amendment to the operating
license extending its term to March 21, 2012. The Company submitted a
rate reduction filing with the FERC to reflect in rates the adjustments to
decommissioning, depreciation and amortization resulting from the license
extension. The Company proposed to make this reduction effective as of
March 1, 1991 and, since the extension was issued in 1990, to reflect the
necessary adjustment for the period January 1, 1990 through February 28,
1991.
On February 28, 1991, the FERC approved the Company's rate reduction
filing. The effects of this ruling were accounted for prospectively in
fiscal 1991, producing a net revenue reduction of approximately $7.4
million in 1991, which reflected the retroactive treatment to January 1,
1990. This ruling resulted in reduced revenue requirements of
approximately $3.5 million for both 1992 and 1993, and similar reductions
are expected in future years.
Notes to Financial Statements
<PAGE>
NOTE 3. FERC Rate Case Matters (Continued)
On March 26, 1993, the FERC initiated a review of the return on common
equity component of the formula rates included in the Company's Power
Contracts. On October 22, 1993, the FERC approved a settlement whereby
the Company retained its 12.25% authorized rate of return on common equity
and agreed to credit monthly power billings by approximately $139,000
beginning in June, 1993.
In 1994, the Company will submit a rate filing to the FERC which will
include, among other things, a revised estimate of decommissioning costs
and a revised schedule of future annual decommissioning fund collections.
NOTE 4. Other Deferred Charges and Credits
In October, 1992, Congress passed the Energy Policy Act of 1992 which
requires, among other things, that certain utilities help pay for the
cleanup of the DOE's enrichment facilities over a 15-year period. The
Company's annual fee is estimated based on the historical share of
enrichment service provided by the DOE and is indexed to inflation. These
fees will not be adjusted for future business as the DOE's future cost of
sales will include a decontamination and decommissioning component. The
Act stipulates that the annual fee shall be fully recoverable in rates in
the same manner as other fuel costs.
In 1993, the DOE billed and the Company paid the first of the 15 annual
fees. As of December 31, 1993, the Company has recognized a current
accrued liability of $2.6 million for the two fee payments expected to be
made in 1994, a deferred credit of $16.0 million for the 12 annual fee
payments that are due subsequent to 1994 and a corresponding regulatory
asset of $18.6 million which represents the total amount includable in
future billings to the purchasers under the Power Contracts. While these
amounts are reflected in these financial statements, the Company is
reviewing the DOE's calculation of the annual fee and believes that the
annual fee will ultimately be reduced.
Approximately $2.1 and $3.3 million of the $3.6 and $5.0 million in other
deferred charges at December 31, 1993 and 1992, respectively, relate to
payments made to the Vermont Low Level Radioactive Waste Authority
("VLLRWA"), an agency of the State of Vermont for the siting and
construction of a low-level waste disposal facility.
NOTE 5. Long-term Funds
The book value and estimated market value of long-term fund investment
securities at December 31, is as follows:
1993 1992
Book Market Book Market
value value value value
(Dollars in thousands)
Decommissioning fund:
U.S. Treasury obligations $17,262 18,666 $22,000 $23,067
Municipal obligations 79,755 84,576 57,141 59,009
Accrued interest and
money market funds 1,863 1,863 2,950 2,950
98,880 105,105 82,091 85,026
<PAGE>
Disposal fee defeasance fund:
Short-term investments 39,870 39,870 26,457 26,457
Corporate bonds and notes 3,195 3,083 6,110 5,940
Accrued interest and
money market funds 419 419 1,325 1,325
43,484 43,372 33,892 33,722
Total long-term
fund investments $142,364 $148,477 $115,983 $118,748
Notes to Financial Statements
NOTE 5. Long-term Funds (Continued)
At December 31, 1993 and 1992, gross unrealized gains and losses
pertaining to the long-term investment securities were as follows:
1993 1992
(Dollars in thousands)
Unrealized gains on U.S. Treasury obligations $ 1,431 $ 1,071
Unrealized losses on U.S. Treasury obligations $ (27) $ (4)
Unrealized gains on Municipal obligations $ 4,843 $ 1,895
Unrealized losses on Municipal obligations $ (22) $ (27)
Unrealized losses on corporate bonds and notes $ (112) $ (170)
Maturities of short-term obligations, bonds and notes (face amount) at
December 31, 1993 are as follows (dollars in thousands):
Within one year $42,200
Two to five years 16,977
Five to seven years 19,670
Over seven years 57,860
$136,707
NOTE 6. Long-term Obligations
A summary of long-term obligations at December 31, 1993 and 1992 is as
follows:
1993 1992
(Dollars in thousands)
First mortgage bonds:
Series B - 8.50% due 1998 $ - $1,307
Series C - 7.70% due 1998 - 1,612
Series D - 10.125% due 2007 - 23,147
Series E - 9.875% due 2007 - 5,703
Series F - 9.375% due 2007 - 5,704
Series G - 8.94% due 1995 - 25,000
Series H - 8.25% due 1996 - 8,388
Series I - 6.48% due 2009 75,845 -
Total first mortgage bonds 75,845 70,861
Eurodollar Agreement Commercial Paper 3,791 3,292
Unamortized premium on debt - 40
<PAGE>
<PAGE>
Total long-term obligations $ 79,636 $ 74,193
The first mortgage bonds are issued under, have the terms and provisions
set forth in, and are secured by an Indenture of Mortgage dated as of
October 1, 1970 between the Company and the Trustee, as modified and
supplemented by 13 supplemental indentures. All bonds are secured by a
first lien on utility plant, exclusive of nuclear fuel, and a pledge of
the Power Contracts and the Additional Power Contracts (except for fuel
payments) and the Capital Funds Agreements with Sponsors.
On July 1, 1993, the Company retired the outstanding Series B and Series
C first mortgage bonds. In November, 1993, the Company issued $75.8
million of Series I, first mortgage bonds stated to mature on November 1,
2009. The Company applied the proceeds of the bond issuance principally
to retire the remaining Series D, Series E, Series F, Series G and Series
H first mortgage bonds including call premiums totalling $3.7 million
based on the early redemption of the bonds. Cash sinking fund
requirements for the Series I first mortgage bonds are $5.4 million
annually beginning in November, 1999.
The Company has a $75.0 million Eurodollar Credit Agreement that expires
on December 31, 1995 subject to three optional one-year extensions. The
Company issued commercial paper under this agreement with weighted average
interest rates of 3.22% for 1993 and 3.95% for 1992. Payment of the
commercial paper is supported by the Eurodollar Credit Agreement, which is
secured by a second mortgage on the Company's generating facility.
Notes to Financial Statements
NOTE 7. Disclosures About the Fair Value of Financial Instruments
The carrying amounts for cash and temporary investments, trade
receivables, accounts receivable from sponsors, accounts payable and
accrued liabilities approximate their fair values because of the short
maturity of these instruments. The fair values of long-term funds are
estimated based on quoted market prices for these or similar investments.
The fair values of each of the Company's long-term debt instruments are
estimated based on the quoted market prices for the same or similar
issues, or on the current rates offered to the Company for debt of the
same remaining maturities.
The estimated fair value of the Company's financial instruments as of
December 31 are summarized as follows (dollars in thousands):
1993 1992
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
Decommissioning fund $98,880 $105,105 $82,091 $85,026
Disposal fee
defeasance fund 43,484 43,372 33,892 33,722
Long-term debt 79,636 77,361 74,193 78,235
Disposal fee and
accrued interest 80,688 80,688 78,239 78,239
Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial
instrument. These estimates are subjective in nature and involve
uncertainties and matters of significant judgment and therefore cannot be
<PAGE>
determined with precision. Changes in assumptions could significantly
affect the estimates.
NOTE 8. Disposal Fee for Spent Nuclear Fuel
The Company has a contract with the United States Department of Energy
("DOE") for the permanent disposal of spent nuclear fuel. Under the terms
of this contract, in exchange for the one-time fee discussed below and a
quarterly fee of 1 mil per kwh of electricity generated and sold, the DOE
agrees to provide disposal services when a facility for spent nuclear fuel
and other high-level radioactive waste is available, which is required by
current statute to be prior to January 31, 1998.
The DOE contract obligates the Company to pay a one-time fee of
approximately $39.3 million for disposal costs for all spent fuel
discharged through April 7, 1983. Although such amount has been collected
in rates from the Sponsors, the Company has elected to defer payment of
the fee to the DOE as permitted by the DOE contract. The fee must be paid
no later than the first delivery of spent nuclear fuel to the DOE.
Interest accrues on the unpaid obligation based on the thirteen-week
Treasury Bill rate and is compounded quarterly. Through 1993, the Company
deposited approximately $37.5 in an irrevocable trust to be used
exclusively for defeasing this obligation at some future date, provided
the DOE complies with the terms of the aforementioned contract.
On December 31, 1991, the DOE issued an amended final rule modifying the
Standard Contract for Disposal of Spent Nuclear Fuel and/or High-level
Radioactive Waste. The amended final rule conforms with a March 17, 1989
ruling of the U.S. Court of Appeals for the District of Columbia that the
1 mil per kilowatt hour fee in the Standard Contract should be based on
net electricity generated and sold. The impact of the amendment on the
Company was to reduce the basis for the fee by 6% on an ongoing basis and
to establish a receivable from the DOE for previous overbillings and
accrued interest. The Company has recognized in its rates the full impact
of the amended final rule to the Standard Contract.
The DOE is refunding the overpayments, including interest, to utilities
over a four-year period ending in 1995 via credits against quarterly
payments. Interest is based on the 90-day Treasury Bill Auction Bond
Equivalent and will continue to accrue on amounts remaining to be
credited. At December 31, 1993 and 1992, respectively, approximately $0.9
and $1.6 million in principal and interest is reflected in other accounts
receivable.
Notes to Financial Statements
NOTE 9. Short-term Borrowings
The Company had lines of credit from various banks totalling $6.3 million
at December 31, 1993 and 1992. The maximum amount of short-term
borrowings outstanding at any month-end during 1993, 1992 and 1991 was
approximately $0.2 million, $0.6 million and $0.4 million, respectively.
The average daily amount of short-term borrowings outstanding was
approximately $0.3 million for 1993, and $0.1 million for 1992 and 1991
with weighted average interest rates of 5.75% in 1993, 6.12 % in 1992 and
8.19% in 1991. There were no amounts outstanding under these lines of
credit as of December 31, 1993 and 1992.
<PAGE>
NOTE 10. Taxes on Income
In February, 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes", which required the Company to change from the deferred
method to the liability method of accounting for income taxes on January
1, 1993. The liability method accounts for deferred income taxes by
applying enacted statutory rates in effect at the balance sheet date to
differences between the book basis and the tax basis of assets and
liabilities ("temporary differences").
This new statement requires recognition of deferred tax liabilities for
(a) income tax benefits associated with timing differences previously
passed on to customers and (b) the equity component of allowance for funds
used during construction, and of a deferred tax asset for the tax effect
of the accumulated deferred investment tax credits. It also requires the
adjustment of deferred tax liabilities or assets for an enacted change in
tax laws or rates, among other things.
Although adoption of this new statement has not and is not expected to
have a material impact on the Company's cash flow, results of operations
or financial position because of the effect of rate regulation, the
Company was required to recognize an adjustment to accumulated deferred
income taxes and a corresponding regulatory asset or liability to
customers (in amounts equal to the required deferred income tax
adjustment) to reflect the future revenues or reduction in revenues that
will be required when the temporary differences turn around and are
recovered or settled in rates. In addition, this new statement required
a reclassification of certain deferred income tax liabilities to
liabilities to customers in order to reflect the Company's obligation to
flow back deferred income taxes provided at rates higher than the current
35% federal tax rate. The Company has applied the provisions of this new
statement without restating prior year financial statements.
The components of income tax expense for the years ended December 31,
1993, 1992 and 1991 are as follows:
1993 1992 1991
(Dollars in thousands)
Taxes on operating income:
Current federal income tax $ 4,236 $ 4,926 $ 4,003
Deferred federal income tax (1,059) (1,840) (1,285)
Current state income tax 1,097 1,285 1,024
Deferred state income tax 80 (329) 483
Investment tax credit
adjustment (577) (641) (740)
3,777 3,401 3,485
Taxes on other income:
Current federal income tax 496 598 353
Current state income tax 127 158 94
623 756 447
Total income taxes $ 4,400 $ 4,157 $ 3,932
Notes to Financial Statements
NOTE 10. Taxes on Income (Continued)
<PAGE>
A reconciliation of the Company's effective income tax rates with the
federal statutory rate is as follows:
1993 1992 1991
Federal statutory rate 35.0% 34.0% 34.0%
State income taxes, net of
federal income tax benefit 6.9 6.1 6.1
Investment credit (4.7) (5.3) (6.0)
Book depreciation in
excess of tax basis 2.0 1.9 1.7
AFUDC equity 0.6 0.9 0.9
Flowback of excess
deferred taxes (3.6) (3.1) (6.7)
Other (0.1) (0.1) 1.7
36.1% 34.4% 31.7%
The items comprising deferred income
tax expense are as follows:
1993 1992 1991
(Dollars in thousands)
Decommissioning expense not
currently deductible $ (351) $ (104) $ 14
Tax depreciation over (under)
financial statement
depreciation (978) (679) 955
Tax fuel amortization
over (under) financial
statement amortization (255) (637) (1,389)
Tax loss on reacquisition of debt
over (under) financial
statement expense 1,887 187 178
Pension expense not
currently deductible (167) (192) (562)
Postemployment benefits deduction
over (under) financial
statement expense 67 (141) -
Amortization of materials and
supplies not currently deductible (335) (343) (239)
Low-level waste deduction
over (under) financial
statement expense (596) 139 825
Flowback of excess
deferred taxes (442) (376) (828)
Other 191 (23) 245
$ (979) $ (2,169) $ (801)
Notes to Financial Statements
NOTE 10. Taxes on Income (Continued)
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
<PAGE>
December 31, 1993 and January 1, 1993 are presented below:
December 31, January 1,
1993 1993
(Dollars in thousands)
Deferred tax assets:
Accumulated amortization of
final nuclear core $ 2,914 $ 2,559
Nuclear decommissioning liability 2,810 2,291
Regulatory liabilities 5,856 6,793
Accumulated deferred investment credit 2,830 2,984
Accumulated amortization of
materials and supplies 2,281 1,851
Other 2,771 4,591
Total gross deferred tax assets 19,462 21,069
Less valuation allowance 1,231 1,142
Net deferred tax assets 18,231 19,927
Deferred tax liabilities:
Plant and equipment (51,258) (51,399)
Other (5,220) (5,574)
Total gross deferred tax liabilities (56,478) (56,973)
Net deferred tax liability (38,247) (37,046)
The valuation allowance is the result of a provision in Vermont tax law
which limits refunds resulting from carrybacks of net operating losses.
NOTE 11. Supplemental Cash Flow Information
The following information supplements the cash flow information provided
in the Statements of Cash Flows:
1993 1992 1991
(Dollars in thousands)
Cash paid during the year for:
Interest (net of amount
capitalized) $ 7,632 $ 7,062 $ 7,990
Income taxes $ 7,070 $ 6,192 $ 4,793
NOTE 12. Pension Plans
The Company has two noncontributory pension plans covering substantially
all of its regular employees. The Company's funding policy is to fund the
net periodic pension expense accrued each year. Benefits are based on
age, years of service and the level of compensation during the final years
of employment.
The aggregate funded status of the Company's pension plans as of December
31, 1993 and 1992 is as follows:
December 31,
1993 1992
(Dollars in thousands)
Vested benefits $ 8,882 $ 6,548
Nonvested benefits 1,338 918
Accumulated benefit obligation 10,220 7,466
<PAGE>
Additional benefits related to
future compensation levels 8,540 7,728
Projected benefit obligation 18,760 15,194
Fair value of plan assets, invested
primarily in equities and bonds 16,343 13,791
Projected benefit obligation in
excess of plan assets $ 2,417 $ 1,403
Notes to Financial Statements
NOTE 12. Pension Plans (Continued)
The increase in the projected benefit obligation from $15.2 million in
1992 to $18.8 million in 1993 is the result of additional service
accruals, interest costs and changed plan assumptions.
Certain changes in the items shown above are not recognized as they occur,
but are amortized systematically over subsequent periods. Unrecognized
amounts still to be amortized and the amount that is included in the
balance sheet appear below.
December 31,
1993 1992
(Dollars in thousands)
Unrecognized net transition obligation $ 996 $1,057
Unrecognized net gain (4,086) (4,939)
Pension liability included
in balance sheet 4,866 4,610
Unrecognized prior service costs 641 675
Projected benefit obligation in excess of
plan assets $ 2,417 $ 1,403
The following are pension plan assumptions as of December 31, 1993 and 1992:
December 31,
1993 1992
Discount rate 7.0% 8.0%
Compensation scale 5.5% 6.5%
Expected return on assets 8.5% 8.5%
Net pension expense for the three years ending December 31, 1993 included the
following components:
1993 1992 1991
(Dollars in thousands)
Service cost - benefits earned $ 1,141 $ 1,275 $ 1,147
Interest cost on projected
benefit obligation 1,288 1,305 1,104
Actual (return) loss
on plan assets (1,792) (867) (2,124)
Net amortization and deferral 631 78 1,452
<PAGE>
<PAGE>
Net pension expense $ 1,268 $ 1,791 $ 1,579
NOTE 13. Postretirement Benefits Other Than Pensions
The Company adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
(SFAS 106), on January 1, 1992. This statement requires companies to use
accrual accounting for postretirement benefits other than pensions. Prior
to 1992, the Company accrued and collected a portion of postretirement
benefits costs through decommissioning billings while the remaining cost
was expensed when benefits were paid. The incremental cost, above the
amount collected through decommissioning billings, approximately $2.4
million, is now accrued and since January, 1992, has been included in the
Company's monthly power billings to Sponsors. The Company is funding this
liability by placing monies in separate trusts. In order to maximize the
deductible contributions permitted under IRS regulations, the Company has
amended its pension plans and established separate VEBA trusts for
management and union employees.
Notes to Financial Statements
NOTE 13. Postretirement Benefits Other Than Pensions (Continued)
In December, 1992, the FERC issued its policy statement setting forth how
utilities can recover in rates the increased costs associated with the
implementation of SFAS 106. The policy statement specifies three
conditions that must be met before FERC will consider companies' election
of the accrual method: (a) the Company must agree to make cash deposits to
an irrevocable external trust fund, at least quarterly, in amounts that
are proportional and, on an annual basis, equal to the annual test period
allowance for postretirement benefits other than pensions; (b) the Company
must agree to maximize the use of income tax deductions for contributions
to funds of this nature; and (c) in order to recover the transition
obligation, the Company must file a general rate change within three years
of adoption of SFAS 106.
The following table presents the plan's funded status reconciled with
amounts recognized in the Company's balance sheets as of December 31, 1993
and December 31, 1992 (dollars in thousands):
Accumulated postretirement benefit obligation:
1993 1992
Retirees $ 1,078 $ 1,277
Fully eligible active plan participants 921 1,332
Other active participants 8,071 9,935
Total accumulated postretirement
benefit obligation 10,070 12,544
Fair value of plan assets, invested
primarily in short-term investments 2,457 1,595
Accumulated postretirement benefit
obligation in excess of plan assets $ 7,613 $10,949
Unrecognized net transition obligation $ 7,933 $10,314
Unrecognized net gain (1,980) (126)
Accrued postretirement benefit cost
<PAGE>
collected through decommissioning
billings and included in
accrued liabilities 1,660 761
Accumulated postretirement benefit
obligation in excess of plan assets $ 7,613 $ 10,949
The net periodic postretirement benefit cost for 1993 and 1992 includes
the following components (dollars in thousands):
1993 1992
Service cost $ 735 $ 958
Interest cost 652 941
Net amortization and deferral 350 543
Net periodic postretirement benefit cost $ 1,737 $2,442
For measurement purposes, a 15% annual rate of increase in the per capita
cost of covered benefits (i.e., health care cost trend rate) was assumed
for 1993; the rate was assumed to decrease gradually to 6% by the year
2001 and remain at that level thereafter. The health care cost trend rate
assumption has a significant effect on the amounts reported. For example,
increasing the assumed health care cost trend rates by one percentage
point in each year would increase the accumulated postretirement benefit
obligation as of December 31, 1993 by $2.2 million and the aggregate of
the service and interest cost components of net periodic postretirement
benefit cost for the year ended December 31, 1993 by $0.3 million. The
weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7% at December 31, 1993.
The change in the accumulated postretirement benefit obligation from $12.5
million in 1992 to $10.0 million in 1993 is the result of adjustments made
to reflect a lower actual medical cost increase during 1993 than
projected. The reduction in the unrecognized net transition obligation
from $10.3 million in 1992 to $7.9 million in 1993 is primarily the result
of elimination of Medicare Part B coverage.
Notes to Financial Statements
NOTE 14. Lease Commitments
The Company leases equipment and systems under noncancelable operating
leases. Charges against income for rentals under these leases were
approximately $3.7 million, $2.6 million and $3.7 million in 1993, 1992
and 1991, respectively. Minimum future rentals as of December 31, 1993
are as follows:
Annual
Fiscal years ended rentals
(Dollars in thousands)
1994 $ 3,283
1995 3,060
1996 2,878
1997 2,798
1998 and after 5,053
<PAGE>
<PAGE>
The Company has entered into an agreement with General Electric Capital
Corporation to lease certain equipment being constructed by General
Electric Corporation valued at approximately $29 million including
installation costs. Under the lease agreement, the Company will make 120
monthly payments of $342,358 per month commencing on the later of (1)
April 15, 1995 or (2) the commissioning date of the equipment. The lease
will also include the sale and leaseback of a $2 million turbine rotor
forging previously owned by the Company. The lease will be classified as
an operating lease for accounting purposes.
The construction contract requires progress payments to be paid by Vermont
Yankee prior to installation of the equipment. Just prior to delivery of
the equipment, the lessor will reimburse Vermont Yankee for these payments
and will continue to make the remaining payments until the commencement
date of the lease. During the time period subsequent to equipment
delivery before the equipment is commissioned, the Company will pay
interim rent to the lessor based on the amount of outstanding progress
payments. The final documentation of the lease is currently being
negotiated, and if a final agreement cannot be reached, the Company would
be responsible for substantial termination payments.
Low-level Waste
In February, 1993, the Vermont Public Service Board issued an order which
requires the Company to pay its share of expenses incurred by the Vermont
Low Level Radioactive Waste Authority for the period April, 1993 through
June, 1994, currently capped at $4.5 million. In addition, in accordance
with Vermont Act 296, the order established a fund for the long-term care
of any eventual Vermont low-level waste disposal facility. Based on this
order, the Company must make annual payments of approximately $0.8 million
into the long-term care fund. Payments made to the VLLRWA, not pertaining
directly to the siting and construction of a low-level waste disposal
facility, are being expensed currently.
In parallel with siting a low-level radioactive waste facility in Vermont,
there has been a three-state effort between Vermont, Maine, and Texas to
form a compact to site such a facility in Texas. The Texas Legislature
has approved, and Governor Ann Richards of Texas has signed into law, a
bill that would form such a compact. On November 2, 1993, Maine voters
ratified the compact. Early during its 1994 session, the Vermont
Legislature is scheduled to vote to approve entry into the compact.
Following approval by the Vermont Legislature, the compact will require
approval of the U.S. Congress.
Notes to Financial Statements
NOTE 15. Commitments and Contingencies (Continued)
If the compact is successful and proceeds on schedule, Vermont Yankee
would begin sending its waste to a Texas facility during 1997. Under the
proposed compact, Vermont would pay the State of Texas $25 million ($12.5
million when the U.S. Congress ratifies the compact and $12.5 million when
the facility opens). In addition, Vermont must pay $2.5 million ($1.25
million when Congress ratifies the compact and $1.25 million when the
facility is licensed) for community assistance projects in Hudspeth
County, Texas, where the facility is to be located. Vermont would also
pay one-third of the Texas Low-Level Radioactive Waste Disposal Compact
Commission's expenses until the facility opens. The Disposal fees for
<PAGE>
generators in Vermont and Maine would then be set at a level that is the
same for generators in Texas. The Company anticipates recovering the
costs of the compact from sponsors.
Nuclear Fuel
The Company has approximately $165 million of "requirements based"
purchase contracts for nuclear fuel needs to meet substantially all of its
power production requirements through 2002. Under these contracts, any
disruption of operating activity would allow the Company to cancel or
postpone deliveries until actually needed.
Insurance
The Price-Anderson Act, as amended, currently limits public liability from
a single incident at a nuclear power plant to $9.4 billion. Any damages
beyond $9.4 billion are indemnified under an agreement with the NRC, but
subject to Congressional approval. The first $200 million of liability
coverage is the maximum provided by private insurance. The Secondary
Financial Protection program is a retrospective insurance plan providing
additional coverage up to $9.2 billion per incident by assessing
retrospective premiums of $79.3 million against each of the 116 reactor
units that are currently subject to the Program in the United States,
limited to a maximum assessment of $10 million per incident per nuclear
unit in any one year. The maximum assessment is to be adjusted at least
every five years to reflect inflationary changes.
The above insurance covers all workers employed at nuclear facilities
prior to January 1, 1988, for bodily injury claims. The Company has
purchased a Master Worker insurance policy with limits of $200 million
with one automatic reinstatement of policy limits to cover workers
employed on or after January 1, 1988. Vermont Yankee's estimated
contingent liability for a retrospective premium on the Master Workers
policy as of December, 1993 is $3.1 million. The Secondary Financial
Protection program referenced above provides coverage in excess of the
Master Worker policy.
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL
II) to cover the costs of property damage, decontamination or premature
decommissioning resulting from a nuclear incident. All companies insured
with NEIL II are subject to retroactive assessments if losses exceed the
accumulated funds available to NEIL II. The maximum potential assessment
against the Company with respect to losses arising during the current
policy year is $5.8 million at the time of a first loss and $12.3 million
at the time of a subsequent loss. The Company's liability for the
retrospective premium adjustment for any policy year ceases six years
after the end of that policy year unless prior demand has been made.
Notes to Financial Statements
VERMONT YANKEE NUCLEAR POWER CORPORATION
Schedule I
Marketable Securities - Other Investments
(Dollars in Thousands)
<PAGE>
<PAGE>
__________________________________________________________________________
Name of Issuer and Number Cost of Market Amount
Title of Each Issue of Shares Each Value of at Which
or Units Issue Each Each
Principal * Issue Portfolio
Amounts of at of Equity
Bonds and 12/31/93 Security
Notes Issues
and Each
Other
Security
Issue Is
Carried
on the
Balance
Sheet
__________________________________________________________________________
Decommissioning fund:
U.S. Treasury
obligations $ 16,252 $ 17,262 $ 18,666 $ 17,262
Municipal obligations 78,055 79,755 84,576 79,755
Money market funds and
Accrued Interest 1,863 1,863 1,863 1,863
$ 96,170 $ 98,880 $105,105 $ 98,880
Disposal fee defeasance fund:
Short-term investments $ 40,200 $ 39,870 $ 39,870 $ 39,870
Corporate bonds
and notes 3,200 3,195 3,083 3,195
Money market funds and
Accrued Interest 419 419 419 419
$ 43,819 $ 43,484 $ 43,372 $ 43,484
* Cost includes accrued interest and amortization of premiums and
discounts.
VERMONT YANKEE NUCLEAR POWER CORPORATION
Schedule V - Property, Plant and Equipment
Years Ended December 31, 1993, 1992, and 1991
($000)
1993 1992 1991
Electric Plant:
Land and land rights $ 1,397 $ 1,127 $ 984
Structures and improvements 61,887 61,868 61,515
<PAGE>
Reactor, turbogenerator and
accessory equipment 304,388 292,561 285,808
Transmission equipment 5,948 5,606 6,141
Other 1,116 1,116 1,116
Construction work
in progress 597 6,408 4,188
375,333 368,686 359,752
Nuclear Fuel:
Assemblies in reactor 69,063 74,025 83,213
Fuel in process - 5,236 637
Fuel in stock - - 22,863
Spent fuel 287,700 259,199 227,040
356,763 338,460 333,753
Total $732,096 $707,146 $693,505
Neither total additions of $25,361,000, $15,167,000 or $25,002,000 nor
total retirements of $411,000, $1,526,000, or $0 for the years ended
December 31, 1993, 1992 and 1991, respectively, exceeded 10% of the
utility plant balance at the end of the year.
VERMONT YANKEE NUCLEAR POWER CORPORATION
Schedule VI - Accumulated Depreciation, Depletion and
Amortization of Property, Plant and Equipment
Years Ended December 31, 1993, 1992 and 1991
(Dollars in Thousands)
Additions Other
Balance Charged to Charges Balance
Beginning Costs and and At End
of Year Expenses Retirements (Deduct) of Year
Accumulated depreciation of
electric plant: (F1)
1993 185,263 13,707 (411) (170) (B) 198,389
1992 173,827 13,253 (1,526) (291) (B) 185,263
1991 162,065 11,800 - ( 38) (B) 173,827
Accumulated amortization of
nuclear fuel:
1993 308,848 19,526 - (4,115) (C) 324,259
1992 291,013 21,240 - (3,405) (C) 308,848
1991 270,011 24,864 - (3,862) (C) 291,013
Total accumulated depreciation
and amortization
1993 494,111 33,234 (411) (4,286) 522,648
1992 464,840 34,493 (1,526) (3,696) 494,111
1991 432,076 36,664 - (3,900) 464,840
(FN)
(F1) Electric plant is being depreciated on the straight-line method at
rates designed to fully depreciate all depreciable properties by 2012.
(See Note 1 to the financial statements).
<PAGE>
<PAGE>
(B) Represents net salvage and removal costs.
(C) Represents disposal costs of spent nuclear fuel.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report dated February 7, 1994 included or
incorporated by reference in this Form 10-K, into Central Vermont Public
Service Corporation's previously filed Registration Statements on Form
S-8, File No. 33-22741, Form S-8, File No. 33-22742, Form S-8, File No.
33-58102, Form S-8, File No. 33-6200 and Form S-3, File No. 33-37095.
ARTHUR ANDERSEN & CO.
Boston, Massachusetts
March 25, 1994
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Central Vermont Public Service Corporation:
We consent to the incorporation by reference in the Registration Statement
on Form S-8, File No. 33-22741, Form S-8, File No. 33-22742, Form S-8,
File No. 33-58102, Form S-8, File No. 33-6200, and Form S-3, File
No. 33-37095, of our report dated February 5, 1993 relating to the balance
sheet of Vermont Yankee Nuclear Power Corporation as of December 31, 1992
and the related statements of income and retained earnings and cash flows
for each of the years in the two-year period ended December 31, 1992,
which report is included in the December 31, 1993 Annual Report on Form
10-K of Central Vermont Public Service Corporation.
KPMG PEAT MARWICK
Boston, Massachusetts
March 24, 1994
<PAGE>
<PAGE>
EXHIBIT INDEX
Each document described below is incorporated by reference to the
files of the Securities and Exchange Commission, unless the reference to
the document is marked as follows:
* - Document has heretofore been filed with the Commission as is
incorporated by reference and made a part hereof.
Exhibit
Number Description
3. Articles of Incorporation and By-Laws
3-1 By-Laws, as amended December 3, 1990.
(Exhibit No. 3-1, 1990 10-K)
3-2 Articles of Association, as amended August 11, 1992.
(Exhibit No. 3-2, 1992 10-K)
4. Instruments defining the rights of security holders including
Indentures
Incorporated herein by reference:
B-1 Mortgage dated October 1, 1929, between the Company and Old
Colony Trust Company, Trustee, securing the Company's First
Mortgage Bonds. (Exhibit B-3, File No. 2-2364)
B-2 Supplemental Indenture dated as of August 1, 1936,
supplemental to B-1. (Exhibit B-4 File No. 2364)
B-3 Copy of Supplemental Indenture dated as of November 15, 1943,
supplemental to B-1. (Exhibit B-3, File No. 2-5250
B-4 Copy of Supplemental Indenture dated as of December 1,
1943, supplemental to B-1. (Exhibit No. B-4, File No.
2-5250)
B-5 Copy of directors' resolutions adopted December 14, 1943,
establishing the Series C Bonds and dealing with other
related matters, supplemental to B-1. (Exhibit B-5, File
No. 2-5250)
B-6 Copy of Supplemental Indenture dated as of April 1, 1944
supplemental to B-1. (Exhibit No. B-6, File No. 2-5466)
B-7 Copy of Supplemental Indenture dated as of February 1,
1945, supplemental to B-1. (Exhibit 7.6, File No. 2-5615
(22-385)
B-8 Directors' resolutions adopted April 9, 1945, establishing
the Series D Bonds and dealing with other matters, supplemental
to B-1. (Exhibit 7.8, File No. 2-5615 (22-385)
B-9 Copy of Supplemental Indenture dated as of September 2, 1947,
<PAGE>
supplemental to B-1. (Exhibit 7.9, File No. 2-7489)
B-10 Copy of Supplemental Indenture dated as of July 15, 1948, and
directors' resolutions establishing the Series E Bonds and
dealing with other matters, supplemental to B-1. (Exhibit
7.10, File No. 2-8388)
B-11 Copy of Supplemental Indenture dated as of May 1, 1950, and
directors' resolutions establishing the Series F Bonds and
dealing with other matters, supplemental to B-1. (Exhibit 7.11,
File No. 2-8388)
B-12 Copy of Supplemental Indenture dated August 1, 1951, and and
directors'resolutions, establishing the Series G Bonds and
dealing with other matters, supplemental to B-1. (Exhibit 7.12,
File No. 2-9073)
B-13 Copy of Supplemental Indenture dated May 1, 1952, and
directors' resolutions, establishing the Series H Bonds and
dealing with other matters, supplemental to B-1. (Exhibit
4.3.13, File No. 2-9613)
B-14 Copy of Supplemental Indenture dated as of July 10, 1953,
supplemental to B-1. (July, 1953 Form 8-K)
B-15 Copy of Supplemental Indenture dated as of June 1, 1954, and
directors' resolutions establishing the Series K Bonds and
dealing with other matters, supplemental to B-1. (Exhibit
4.2.16, File No. 2-10959)
B-16 Copy of Supplemental Indenture dated as of February 1, 1957
and directors' resolutions establishing the Series L Bonds and
dealing with other matters, supplemental to B-1. (Exhibit
4.2.16, File No. 2-13321)
B-17 Copy of Supplemental Indenture dated as of March 15, 1960,
supplemental to B-1. (March, 1960 Form 8-K)
B-18 Copy of Supplemental Indenture dated as of March 1, 1962,
supplemental to B-1. (March, 1962 Form 8-K)
B-19 Copy of Supplemental Indenture dated as of March 2, 1964,
supplemental to B-1. (March, 1964 Form 8-K)
B-20 Copy of Supplemental Indenture dated as of March 1, 1965, and
directors' resolutions establishing the Series M Bonds and
dealing with other matters, supplemental to B-1. (April, 1965
Form 8-K)
B-21 Copy of Supplemental Indenture dated as of December 1, 1966,
and directors' resolutions establishing the Series N Bonds
and dealing with other matters, supplemental to B-1.
(January, 1967 Form 8-K)
B-22 Copy of Supplemental Indenture dated as of December 1, 1967,
and directors' resolutions establishing the Series O Bonds and
dealing with other matters, supplemental to B-1. (December,
1967 Form 8-K)
<PAGE>
B-23 Copy of Supplemental Indenture dated as of July 1, 1969, and
directors' resolutions establishing the Series P Bonds and
dealing with other matters, supplemental to B-1. (July, 1969
Form 8-K)
B-24 Copy of Supplemental Indenture dated as of December 1, 1969, and
directors' resolutions establishing the Series Q Bonds January,
and dealing with other matters, supplemental to B-1. (January,
1970 Form 8-K)
B-25 Copy of Supplemental Indenture dated as of May 15, 1971, and
directors' resolutions establishing the Series R Bonds and
dealing with other matters, supplemental to B-1. (May, 1971
Form 8-K)
B-26 Copy of Supplemental Indenture dated as of April 15, 1973, and
directors' resolutions establishing the Series S Bonds and
dealing with other matters, supplemental to B-1. (May, 1973
Form 8-K)
B-27 Copy of Supplemental Indenture dated as of April 1, 1975, and
directors' resolutions establishing the Series T Bonds and
dealing with other matters, supplemental to B-1. (April, 1975
Form 8-K)
B-28 Copy of Supplemental Indenture dated as of April 1, 1977,
modifying B-1. (Exhibit 2.42, File No. 2-58621)
B-29 Copy of Supplemental Indenture dated as of July 29, 1977, and
directors' resolutions establishing the Series U, V, W, and X
Bonds and dealing with other matters, supplemental to B-1.
(Exhibit 2.43, File No. 2-58621)
B-30 Copy of Thirtieth Supplemental Indenture dated as of
September 15, 1978, and directors' resolutions establishing
the Series Y Bonds and dealing with other matters,
supplemental to B-1. (Exhibit B-30, 1980 Form 10-K)
B-31 Copy of Thirty-first Supplemental Indenture dated as of
September 1, 1979, and directors' resolutions establishing
the Series Z Bonds and dealing with other matters,
supplemental to B-1. (Exhibit B-31, 1980 Form 10-K)
B-32 Copy of Thirty-second Supplemental Indenture dated as of June 1,
1981, and directors' resolutions establishing the Series AA
Bonds and dealing with other matters, supplemental to B-1.
(Exhibit B-32, 1981 Form 10-K)
B-33 Copy of Trust Indenture dated as of May 1, 1962, between the
Company and Mellon National Bank and Trust Company, Trustee,
relating to the Company's 4 7/8% Debentures due May 1, 1987.
(Exhibit 4.2.24, File No. 2-26485)
B-34 Copy of Trust Indenture dated as of May 1, 1968, between the
Company and The First National Bank of Boston, Trustee,
relating to the Company's 7% Debentures due May 1, 1993.
(May, 1986 Form 8-K)
<PAGE>
B-35 Copy of Trust Indenture dated as of April 1, 1970, between the
Company and The First National Bank of Boston, Trustee, relating
to the Company's 10 5/8% Debentures due April 1, 1995.
(April, 1970 Form 8-K)
B-36 Copy of Indenture of Mortgage, dated as of September 1, 1957,
between Vermont Electric Power Company, Inc. ("Velco") and
Bankers Trust Company, securing Velco's First Mortgage Bonds.
(Exhibit (b)(1), 1957 Form 10-K)
B-37 Copy of Supplemental Indenture dated as of December 1, 1958,
modifying B-36. (Exhibit (b)(1), 1958 Form 10-K)
B-38 Copy of Supplemental Indenture dated as of December 1, 1969,
modifying B-36. (Exhibit 2.35, File 2-57458)
B-39 Copy of Supplemental Indenture dated as of November 1, 1970,
modifying B-36. (Exhibit 2.36, File No. 2-57458)
B-40 Copy of Supplemental Indenture dated as of December 1, 1971,
modifying B-36. (Exhibit 2.37, File No. 2-57458)
B-41 Copy of Supplemental Indenture dated as of December 1, 1972,
modifying B-36. (Exhibit 2.38, File No. 2-57458)
B-42 Copy of Supplemental Indenture dated as of July 1, l974,
modifying B-36. (Exhibit 2.39, File No. 2-57458)
B-43 Copy of Supplemental Indenture dated as of January 1, 1975,
modifying B-36. (Exhibit 2.40, File No. 2-57458)
B-44 Copy of Supplemental Indenture dated as of January 1, 1979,
modifying B-36. (Exhibit B-44, 1981 Form 10-K)
B-45 Copy of Thirty-third Supplemental Indenture dated as of
August 15, 1983, and directors' resolutions establishing the
Series BB Bonds and dealing with other matters, supplemental
to B-1. (Exhibit B-45, 1983 Form 10-K)
B-46 Copy of Bond Purchase Agreement between Merrill, Lynch,
Pierce, Fenner & Smith, Inc., Underwriters and The Industrial
Development Authority of the State of New Hampshire, issuer
and Central Vermont Public Service Corporation. (Exhibit
B-46, 1984 Form 10-K)
B-47 Copy of Thirty-Fourth Supplemental Indenture dated as of
January 15, 1985, and directors' resolutions establishing the
Series CC Bonds and Series DD Bonds and matters connected
therewith, supplemental to B-1. (B-47, 1985 Form 10-K)
B-48 Copy of Bond Purchase Agreement among Connecticut Development
Authority and Central Vermont Public Service Corporation with
E. F. Hutton & Company Inc. dated December 11, 1985.
(Exhibit B-48, 1985 Form 10-K)
B-49 Stock-Purchase Agreement between Vermont Electric Power
Company, Inc. and the Company dated August 11, 1986 relative
to purchase of Class C Preferred Stock. (Exhibit B-49, 1986
<PAGE>
Form 10-K)
4-50 Copy of Thirty-Fifth Supplemental Indenture dated as of
December 15, 1989 and directors' resolutions establishing the
Series EE, Series FF and Series GG Bonds and matters
connected therewith, supplemental to B-1. (Exhibit 4-50,
1989 Form 10-K)
4-51 Copy of Thirty-Sixth Supplemental Indenture dated as of
December 10, 1990 and directors' resolutions establishing the
Series HH Bonds and matters connected therewith, supplemental
to B-1. (Exhibit 4-51, 1990 Form 10-K)
4-52 Copy of Thirty-Seventh Supplemental Indenture dated December 10,
1991 and directors' resolutions establishing the Series JJ Bonds
and matters connected therewith, supplemental to B-1.
(Exhibit 4-52, 1991 Form 10-K)
* 4-53 Copy of Thirty-Eight Supplemental Indenture dated December 10,
1993 establishing Series KK, LL, MM, NN, OO supplemental to B-1
(Exhibit 4-53, 1993 Form 10-K)
10. Material Contracts (*Denotes filed herewith)
Incorporated herein by reference:
10.l Copy of firm power Contract dated August 29, 1958, and
supplements thereto dated September 19, 1958, October 7, 1958,
and October 1, 1960, between the Company and the State
of Vermont (the "State"). (Exhibit C-1, File No. 2-17184)
10.1.1 Agreement setting out Supplemental NEPOOL Understandings
dated as of April 2, 1973. (Exhibit C-22, File No.
5-50198)
10.2 Copy of Transmission Contract dated June 13, 1957, between
Velco and the State, relating to transmission of power.
(Exhibit C-2, 1957 Form 10-K)
10.2.1 Copy of letter agreement dated August 4, 1961, between
Velco and the State. (Exhibit C-3, File No. 2-26485)
10.2.2 Amendment dated September 23, 1969. (Exhibit C-4, File
No. 2-38161)
10.2.3 Amendment dated March 12, 1980. (Exhibit C-92, 1982
Form 10-K)
10.2.4 Amendment dated September 24, 1980. (Exhibit C-93, 1982
Form 10-K)
10.3 Copy of subtransmission contract dated August 29, 1958, between
Velco and the Company (there are seven similar contracts between
Velco and other utilities). (Exhibit C-5, 1957 Form 10-K)
10.3.1 Copies of Amendments dated September 7, 196l, November
2, 1967, March 22, 1968, and October 29, 1968. (Exhibit
C-6, File No. 2-32917)
<PAGE>
10.3.2 Amendment dated December 1, 1972. (Exhibit C-91, 1982
Form 10-K)
10.4 Copy of Three-Party Agreement dated September 25, 1957, between
the Company, Green Mountain and Velco. (Exhibit C-7, File No.
2-17184)
10.4.1 Superseding Three Party Power Agreement dated January 1,
1990. (Exhibit 10-201, 1990 Form 10-K)
10.4.2 Agreement Amending Superseding Three Party Power
Agreement dated May 1, 1991. (Exhibit 10.4.2, 1991 Form
10-K)
10.5 Copy of firm power Contract dated December 29, 1961, between the
Company and the State, relating to purchase of Niagara Project
power. (Exhibit C-8, File No. 2-26485)
10.5.1 Amendment effective as of January 1, 1980. (Exhibit
C-51, 1980 Form 10-K)
10.6 Copy of agreement dated July 16, 1966, and letter supplement
dated July 16, 1966, between Velco and Public Service Company of
New Hampshire relating to purchase of single unit power from
Merrimack II. (Exhibit C-9, File No. 2-26485)
10.6.1 Copy of Letter Agreement dated July 10, 1968, modifying
Exhibit A. Exhibit C-10, File No. 2-32917)
10.7 Copy of Capital Funds Agreement between the Company and Vermont
Yankee dated as of February 1, 1968. (Exhibit C-11, File No.
70-4611)
10.7.1 Copy of Amendment dated March 12, 1968. (Exhibit C-12,
File No. 70-4611)
10.8 Copy of Power Contract between the Company and Vermont Yankee
dated as of February 1, 1968. (Exhibit C-13, File No. 70-4591)
10.8.1 Amendment dated April 15, 1983. (C-106, 1983 Form
10-K)
10.8.2 Copy of Additional Power Contract dated February 1,
1984. (Exhibit C-123, 1984 Form 10-K )
10.8.3 Amendment No. 3 to Vermont Yankee Power Contract,
dated April 24, 1985. (Exhibit 10-144, 1986 Form 10-K)
10.8.4 Amendment No. 4 to Vermont Yankee Power Contract,
dated June 1, 1985. (Exhibit 10-145, 1986 Form 10-K)
10.8.5 Amendment No. 5 dated May 6, 1988. (Exhibit 10-179,
1988 Form 10-K)
10.8.6 Amendment No. 6 dated May 6, 1988. (Exhibit 10-180,
1988 Form 10-K)
10.8.7 Amendment No. 7 dated June 15, 1989. (Exhibit 10-195,
<PAGE>
1989 Form 10-K)
10.9 Copy of Capital Funds Agreement between the Company and Maine
Yankee dated as of May 20, 1968. (Exhibit C-14, File No.
70-4658)
10.9.1 Amendment No. 1 dated August 1, 1985. (Exhibit C-125,
1984 Form 10-K )
10.10 Copy of Power Contract between the Company and Maine Yankee
dated as of May 20, 1968. (Exhibit C-15, File No. 70-4658)
10.10.1 Amendment No. 1 dated March 1, 1984. (Exhibit C-112,
1984 Form 10-K)
10.10.2 Amendment No. 2 effective January 1, 1984. (Exhibit
C-113, 1984 Form 10-K)
10.10.3 Amendment No. 3 dated October 1, 1984. (Exhibit
C-114, 1984 Form 10-K)
10.10.4 Additional Power Contract dated February 1, 1984.
(Exhibit C-126, 1985 Form 10-K)
10.11 Copy of Agreement dated January 17, 1968, between Velco and
Public Service Company of New Hampshire relating to purchase of
additional unit power from Merrimack II. (Exhibit C-16, File
No. 2-32917)
10.12 Copy of Agreement dated February 10, 1968 between the Company
and Velco relating to purchase by Company of Merrimack II unit
power. (There are 25 similar agreements between Velco and
other utilities.) (Exhibit C-17, File No. 2-32917)
10.13 Copy of Three-Party Power Agreement dated as of November 21,
1969, among the Company, Velco, and Green Mountain relating
to purchase and sale of power from Vermont Yankee Nuclear
Power Corporation. (Exhibit C-18, File No. 2-38161)
10.13.1 Amendment dated June 1, 1981. (Exhibit C-59, 1981
Form 10-K)
10.14 Copy of Three-Party Transmission Agreement dated as of November
21, 1969, among the Company, Velco, and Green Mountain
providing for transmission of power from Vermont Yankee Nuclear
Power Corporation. (Exhibit C-19, File No. 2-38161)
10.14.1 Amendment dated June 1, 1981. (Exhibit C-60, 1981
Form 10-K)
10.15 Copy of Stockholders Agreement dated March 29, 1957, between
the Company, Velco, Green Mountain and Citizens Utilities
Company. (Exhibit No. C-20, File No. 70-3558)
10.16 New England Power Pool Agreement dated as of September 1, 1971,
as amended to November 1, 1975. (Exhibit C-21, File No.
2-55385)
<PAGE>
10.16.1 Amendment dated December 31, 1976. (Exhibit C-52,
1980 Form 10-K)
10.16.2 Amendment dated January 23, 1977. (Exhibit C-53
1980 Form 10-K)
10.16.3 Amendment dated July 1, 1977. (Exhibit C-54, 1980
Form 10-K)
10.16.4 Amendment dated August 1, 1977. (Exhibit C-55,
1980 Form 10-K)
10.16.5 Amendment dated August 15, 1978. (Exhibit C-56,
1980 Form 10-K)
10.16.6 Amendment dated January 31, 1979. (Exhibit C-57
1980 Form 10-K)
10.16.7 Amendment dated Feburary 1, 1980. (Exhibit C-58,
1980 Form 10-K)
10.16.8 Amendment dated December 31, 1976. (Exhibit C-72,
1981 Form 10-K)
10.16.9 Amendment dated January 31, 1977. (Exhibit C-73,
1981 Form 10-K)
10.16.10 Amendment dated July 1, 1977. (Exhibit C-74,
1981 Form 10-K)
10.16.11 Amendment dated August 1, 1977. (Exhibit C-75,
1981 Form 10-K)
10.16.12 Amendment dated August 15, 1978. (Exhibit C-76,
1981 Form 10-K)
10.16.13 Amendment dated January 31, 1980. (Exhibit C-77,
1981 Form 10-K)
10.16.14 Amendment dated February 1, 1980. (Exhibit C-78,
1981 Form 10-K)
10.16.15 Amendment dated September 1, 1981. (Exhibit C-79
1981 Form 10-K)
10.16.16 Amendment dated December 1, 1981. (Exhibit C-80
1981 Form 10-K)
10.16.17 Amendment dated June 15, 1983. (Exhibit C-105,
1983 Form 10-K)
10.16.18 Amendment dated September 1, 1985. (Exhibit
10-160, 1986 Form 10-K)
10.16.19 Amendment dated April 30, 1987. (Exhibit 10-172, 1987
Form 10-K)
10.16.20 Amendment dated March 1, 1988. (Exhibit 10-178, 1988
<PAGE>
Form 10-K)
10.16.21 Amendment dated March 15, 1989. (Exhibit 10-194, 1989
Form 10-K)
10.16.22 Amendment dated October 1, 1990. (Exhibit 10-203,
1990 Form 10-K)
10.16.23 Amendment dated September 15, 1992. (Exhibit
10.16.23, 1992 Form 10-K)
10.16.24 Amendment dated May 1, 1993
10.16.25 Amendment dated June 1, 1993
10.17 Agreement dated October 13, 1972, for Joint Ownership,
Construction and Operation of Pilgrim Unit No. 2 among Boston
Edison Company and other utilities, including the Company.
(Exhibit C-23, File No. 2-45990)
10.17.1 Amendments dated September 20, 1973, and September 15,
1974. (Exhibit C-24, File No. 2-51999)
10.17.2 Amendment dated December 1, 1974. (Exhibit C-25, File
No. 2-54449)
10.17.3 Amendent dated February 15, 1975., (Exhibit C-26,
File No. 2-53819)
10.17.4 Amendment dated April 30, 1975. (Exhibit C-27, File
No. 2-53819)
10.17.5 Amendment dated as of June 30, 1975. (Exhibit C-28,
File No. 2-54449)
10.17.6 Instrument of Transfer dated as of October 1, 1974,
assigning partial interest from the Company to Green
Mountain Power Corporation. (Exhibit C-29, File No.
2-52177)
10.17.7 Instrument of Transfer dated as of January 17, 1975,
assigning a partial interest from the Company to the
Burlington Electric Department. (Exhibit C-30, File
No. 2-55458)
10.17.8 Addendum dated as of October 1, 1974 by which Green
Mountain Power Corporation became a party thereto.
(Exhibit C-31, File No. 2-52177)
10.17.9 Addendum dated as of January 17, 1975 by which the
Burlington Electric Department became a party thereto.
(Ehibit C-32, File No. 2-55450)
10.17.10 Amendment 23 dated as of 1975. (Exhibit C-50, 1975
Form 10-K)
10.18 Agreement for Sharing Costs Associated with Pilgrim Unit No.2
Transmission dated October 13, 1972, among Boston Edison
Company and other utilities including the Company. (Exhibit
C-33, File No. 2-45990)
10.18.1 Addendum dated as of October 1, 1974, by which Green
<PAGE>
Mountain Power Corporation became a party thereto.
(Exhibit C-34, File No. 2-52177)
10.18.2 Addendum dated as of January 17, 1975, by which
Burlington Electric Department became a party thereto.
(Exhibit C-35, File No. 2-55458)
10.19 Agreement dated as of May 1, 1973, for Joint Ownership,
Construction and Operation of New Hampshire Nuclear Units among
Public Service Company of New Hampshire and other utilities,
including Velco. (Exhibit C-36, File No. 2-48966)
10.19.1 Amendments dated May 24, 1974, June 21, 1974,
September 25, 1974, October 25, l974, and January 31,
1975. (Exhibit C-37, File No. 2-53674)
10.19.2 Instrument of Transfer dated September 27, 1974,
assigning partial interest from Velco to the Company.
(Exhibit C-38, File No. 2-52177)
10.19.3 Amendments dated May 24, 1974, June 21, 1974, and
September 25, 1974. (Exhibit C-81, File No. 2-51999)
10.19.4 Amendments dated October 25, 1974 and January 31,
1975. (Exhibit C-82, File No. 2-54646)
10.19.5 Sixth Amendment dated as of April 18, 1979. (Exhibit
C-83, File No. 2-64294)
10.19.6 Seventh Amendment dated as of April 18, 1979.
(Exhibit C-84, File No. 2-64294)
10.19.7 Eighth Amendment dated as of April 25, 1979. (Exhibit
C-85, File No. 2-64815)
10.19.8 Ninth Amendment dated as of June 8, 1979. (Exhibit
C-86, File No. 2-64815)
10.19.9 Tenth Amendment dated as of October 10, 1979.
(Exhibit C-87, File No. 2-66334 )
10.19.10 Eleventh Amendment dated as of December 15, 1979.
(Exhibit C-88, File No.2-66492)
10.19.11 Twelfth Amendment dated as of June 16, 1980. (C-89,
File No. 2-68168)
10.19.12 Thirteenth Amendment dated as of December 31, 1980.
(Exhibit C-90, File No. 2-70579)
10.19.13 Fourteenth Amendment dated as of June 1, 1982.(Exhibit
C-104, 1982 Form 10-K)
10.19.14 Fifteenth Amendment dated April 27, 1984. (Exhibit
10-134, 1986 Form 10-K)
10.19.15 Sixteenth Amendment dated June 15, 1984. (Exhibit
10-135, 1986 Form 10-K)
<PAGE>
10.19.16 Seventeenth Amendment dated March 8, 1985. (Exhibit
10-136, 1986 Form 10-K)
10.19.17 Eighteenth Amendment dated March 14, 1986. (Exhibit
10-137, 1986 Form 10-K)
10.19.18 Nineteenth Amendment dated May 1, 1986. (Exhibit
10-138, 1986 Form 10-K)
10.19.19 Twentieth Amendment dated September 19, 1986.
(Exhibit 10-139, 1986 Form 10-K)
10.19.20 Amendment No. 22 dated January 13, 1989. (Exhibit
10-193, 1989 Form 10-K)
10.20 Transmission Support Agreement dated as of May 1, 1973, among
Public Service Company of New Hampshire and other utilities,
including Velco, with respect to New Hampshire Nuclear Units.
(Exhibit C-39, File No. 248966)
10.21 Sharing Agreement - 1979 Connecticut Nuclear Unit dated
September 1, 1973, to which the Company is a party. (Exhibit
C-40, File No. 2-50142)
10.21.1 Amendment dated as of August 1, 1974. (Exhibit C-41,
File No. 2-51999)
10.21.2 Instrument of Transfer dated as of February 28, 1974,
transferring partial interest from the Company to
Green Mountain. (Exhibit C-42, File No. 2-52177)
10.21.3 Instrument of Transfer dated January 17, 1975,
transferring a partial interest from the Company to
Burlington Electric Department. (Exhibit C-43, File
No. 2-55458)
10.21.4 Amendment dated May 11, 1984. (Exhibit C-110, 1984
Form 10-K)
10.22 Preliminary Agreement dated as of July 5, 1974, with respect to
1981 Montague Nuclear Generating Units. (Exhibit C-44, File
No. 2-51733)
10.22.1 Amendment dated June 30, 1975. (Exhibit C-45, File
No. 2-54449)
10.23 Agreement for Joint Ownership, Construction and Operation of
William F. Wyman Unit No. 4 dated November 1, 1974, among
Central Maine Power Company and other utilities including the
Company. (Exhibit C-46, File No. 2-52900)
10.23.1 Amendment dated as of June 30, 1975. (Exhibit C-47,
File No. 2-55458)
10.23.2 Instrument of Transfer dated July 30, 1975, assigning
a partial interest from Velco to the Company.
(Exhibit C-48, File No. 2-55458)
<PAGE>
10.24 Transmission Agreement dated November 1, 1974, among Central
Maine Power Company and other utilities including the Company
with respect to William F. Wyman Unit No. 4. (Exhibit C-49,
File No. 2-54449)
10.25 Copy of Power Contract between the Company and Yankee Atomic
dated as of June 30, 1959. (Exhibit C-61, 1981 Form 10-K)
10.25.1 Revision dated April 1, 1975. (Exhibit C-61, 1981
Form 10-K)
10.25.2 Amendment dated May 6, 1988. (Exhibit 10-181, 1988
Form 10-K)
10.25.3 Amendment dated June 26, 1989. (Exhibit 10-196, 1989
Form 10-K)
10.25.4 Amendment dated July 1, 1989. (Exhibit 10-197, 1989
Form 10-K)
10.25.5 Amendment dated February 1, 1992 (Exhibit 10.25.5,
1992 Form 10-K)
10.26 Copy of Transmission Contract between the Company and Yankee
Atomic dated as of June 30, 1959. (Exhibit C-63, 1981 Form
10-K)
10.27 Copy of Power Contract between the Company and Connecticut
Yankee dated as of June 1, 1964. (Exhibit C-64, 1981 Form
10-K)
10.27.1 Supplementary Power Contract dated March 1, 1978.
(Exhibit C-94, 1982 Form 10-K)
10.27.2 Amendment dated August 22, 1980. (Exhibit C-95
1982 Form 10-K)
10.27.3 Amendment dated October 15, 1982. (Exhibit C-96,
1982 Form 10-K)
10.27.4 Second Supplementary Power Contract dated April 30,
1984. (Exhibit C-115, 1984 Form 10-K)
10.27.5 Additional Power Contract dated April 30, 1984.
(Exhibit C-116, 1984 Form 10-K)
10.28 Copy of Transmission Contract between the Company and
Connecticut Yankee dated as of July 1, 1964. (Exhibit C-65
1981 Form 10-K)
10.29 Copy of Capital Funds Agreement between the Company and
Connecticut Yankee dated as of July 1, 1964. (Exhibit C-66,
1981 Form 10-K)
10.29.1 Copy of Capital Funds Agreement between the Company
and Connecticut Yankee dated as of September 1, 1964.
(Exhibit C-67, 1981 Form 10-K)
<PAGE>
10.30 Copy of Five-Year Capital Contribution Agreement between the
Company and Connecticut Yankee dated as of November 1, 1980.
(Exhibit C-68, 1981 Form 10-K)
10.31 Form of Guarantee Agreement dated as of November 7, 1981,
among certain banks, Connecticut Yankee and the Company,
relating to revolving credit notes of Connecticut Yankee.
(Exhibit C-69, 1981 Form 10-K)
10.32 Form of Guarantee Agreement dated as of November 13, 1981,
between The Connecticut Bank and Trust Company, as Trustee, and
the Company, relating to debentures of Connecticut Yankee.
(Exhibit C-70, 1981 Form 10-K)
10.33 Form of Guarantee Agreement dated as of November 5, 1981,
between Bankers Trust Company, as Trustee of the Vernon Energy
Trust, and the Company, relating to Vermont Yankee Nuclear Fuel
Sale Agreement. (Exhibit C-71, 1981 Form 10-K)
10.34 Preliminary Vermont Support Agreement re Quebec Interconnection
between Velco and among seventeen Vermont Utilities dated May
1, 1981. (Exhibit C-97, 1982 Form 10-K)
10.34.1 Amendment dated June 1, 1982. (Exhibit C-98, 1982
Form 10-K)
10.35 Vermont Participation Agreement for Quebec Interconnection
between Velco and among seventeen Vermont Utilities dated July
15, 1982. (Exhibit C-99, 1982 Form 10-K)
10.35.1 Amendment No. 1 dated January 1, 1986. (Exhibit
C-132, 1986 Form 10-K)
10.36 Vermont Electric Transmission Company Capital Funds Support
Agreement between Velco and among sixteen Vermont Utilities
dated July 15, 1982. (Exhibit C-100, 1982 Form 10-K)
10.37 Vermont Transmission Line Support Agreement, Vermont Electric
Transmission Company and twenty New England Utilities dated
December 1, 1981, as amended by Amendment No. 1 dated June 1,
1982, and by Amendment No. 2 dated November 1, 1982. (Exhibit
C-101, 1982 Form 10-K)
10.37.1 Amendment No. 3 dated January 1, 1986. (Exhibit
10-149, 1986 Form 10-K)
10.38 Phase 1 Terminal Facility Support Agreement between New England
Electric Transmission Corporation and twenty New England
Utilities dated December 1, 1981, as amended by Amendment No. 1
dated as of June 1, 1982 and by Amendment No. 2 dated as of
November 1, 1982. (Exhibit C-102, 1982 Form 10-K)
10.39 Power Purchase Agreement between Velco and CVPS dated June 1,
1981. (Exhibit C-103, 1982 Form 10-K)
10.40 Agreement for Joint Ownership, Construction and Operation of
the Joseph C. McNeil Generating Station by and between City of
Burlington Electric Department, Central Vermont Realty, Inc.
<PAGE>
and Vermont Public Power Supply Authority dated May 14, 1982.
(Exhibit C-107, 1983 Form 10-K
10.40.1 Amendment No. 1 dated October 5, 1982. (Exhibit
C-108, 1983 Form 10-K)
10.40.2 Amendment No. 2 dated December 30, 1983. (Exhibit
C-109, 1983 Form 10-K)
10.40.3 Amendment No. 3 dated January 10, 1984. (Exhibit
10-143, 1986 Form 10-K)
10.41 Transmission Service Contract between Central Vermont Public
Service Corporation and The Vermont Electric Generation &
Transmission Cooperative, Inc. dated May 14, 1984. (Exhibit
C-111, 1984 Form 10-K)
10.42 Copy of Highgate Transmission Interconnection Preliminary
Support Agreement dated April 9, 1984. (Exhibit C-117, 1984
Form 10-K)
10.43 Copy of Allocation Contract for Hydro-Quebec Firm Power dated
July 25, 1984. (Exhibit C-118, 1984 Form 10-K)
10.43.1 Tertiary Energy for Testing of the Highgate HVDC
Station Agreement, dated September 20, 1985. (Exhibit
C-129, 1985 Form 10-K)
10.44 Copy of Highgate Operating and Management Agreement dated
August 1, 1984. (Exhibit C-119, 1986 Form 10-K)
10.44.1 Amendment No. 1 dated April 1, 1985. (Exhibit 10-152,
1986 Form 10-K)
10.44.2 Amendment No. 2 dated November 13, 1986. (Exhibit
10-167, 1987 Form 10-K)
10.44.3 Amendment No. 3 dated January 1, 1987. (Exhibit
10-168, 1987 Form 10-K)
10.45 Copy of Highgate Construction Agreement dated August 1, 1984.
(Exhibit C-120, 1984 Form 10-K)
10.45.1 Amendment No. 1 dated April 1, 1985. (Exhibit 10-151,
1986 Form 10-K)
10.46 Copy of Agreement for Joint Ownership, Construction and
Operation of the Highgate Transmission Interconnection.
(Exhibit C-121, 1984 Form 10-K)
10.46.1 Amendment No. 1 dated April 1, 1985. (Exhibit 10-153,
1986 Form 10-K)
10.46.2 Amendment No. 2 dated April 18, 1985. (Exhibit
10-154, 1986 Form 10-K)
10.46.3 Amendment No. 3 dated February 12, 1986. (Exhibit
10-155, 1986 Form 10-K)
<PAGE>
10.46.4 Amendment No. 4 dated November 13, 1986. (Exhibit
10-169, 1987 Form 10-K)
10.46.5 Amendment No. 5 and Restatement of Agreement dated
January 1, 1987. (Exhibit 10-170, 1987 Form 10-K)
10.47 Copy of the Highgate Transmission Agreement dated August 1,
1984. (Exhibit C-122, 1984 Form 10-K)
10.48 Copy of Preliminary Vermont Support Agreement Re: Quebec
Interconnection - Phase II dated September 1, 1984. (Exhibit
C-124, 1984 Form 10-K)
10.48.1 First Amendment dated March 1, 1985. (Exhibit C-127,
1985 Form 10-K)
10.49 Vermont Transmission and Interconnection Agreement between New
England Power Company and Central Vermont Public
Service Corporation and Green Mountain Power Corporation with
the consent of Vermont Electric Power Company, Inc., dated May
1, 1985. (Exhibit C-128, 1985 Form 10-K)
10.50 Service Contract Agreement between the Company and the State of
Vermont for distribution and sale of energy from St. Lawrence
power projects ("NYPA Power") dated as of June 25, 1985.
(Exhibit C-130, 1985 Form 10-K)
10.50.1 Lease and Operating Agreement between the Company and
the State of Vermont dated as of June 25, 1985.
(Exhibit C-131, 1985 Form 10-K)
10.51 System Sales & Exchange Agreement Between Niagara Mohawk Power
Corporation and Central Vermont Public Service Corporation
dated October 1, 1986. (Exhibit C-133, 1986 Form 10-K)
10.52 Agreement of Purchase & Sale of 1.59096% Seabrook Ownership
between Central Vermont Public Service Corporation and Eastern
Utilities Associates dated February 19, 1986. (Exhibit 10-140,
1986 Form 10-K)
10.52.1 Addendum dated June 27, 1986. (Exhibit 10-141, 1986
Form 10-K)
10.53 Agreement between Bangor Hydro-Electric Company, Central Maine
Power Company, Central Vermont Public Service Corporation,
Fitchburg Gas and Electric Light Company, Maine Public Service
Company and EUA Power Corporation dated October 20, 1986
conveying interests in transmission project facilities related
to Seabrook. (Exhibit 10-142, 1986 Form 10-K)
10.54 Transmission Agreement between Vermont Electric Power Company,
Inc. and Central Vermont Public Service Corporation dated
January 1, 1986. (Exhibit 10-146, 1986 Form 10-K)
10.55 1985 Four Party Agreement between Vermont Electric Power
Company, Central Vermont Public Service Corporation, Green
Mountain Power Corporation and Citizens Utilities dated July 1,
1985. (Exhibit 10-146, 1986 Form 10-K)
<PAGE>
10.55.1 Amendment dated February 1, 1987. (Exhibit 10-171,
1987 Form 10-K)
10.56 1985 Option Agreement between Vermont Electric Power Company,
Central Vermont Public Service Corporation, Green Mountain
Power Corporation and Citizens Utilities dated December 27,
1985. (Exhibit 10-148, 1986 Form 10-K)
10.56.1 Amendment No. 1 dated September 28, 1988. (Exhibit
10-182, 1988 Form 10-K)
10.56.2 Amendment No. 2 dated October 1, 1991. (Exhibit
10.56.2, 1991 Form 10-K)
10.57 Highgate Transmission Agreement dated August 1, 1984 by and
between the owners of the project and the Vermont electric
distribution companies. (Exhibit 10-156, 1986 Form 10-K)
10.57.1 Amendment No. 1 dated September 22, 1985. (Exhibit
10-157, 1986 Form 10-K)
10.58 Vermont Support Agency Agreement re: Quebec Interconnection -
Phase II between Vermont Electric Power Company, Inc. and
participating Vermont electric utilities dated June 1, 1985.
(Exhibit 10-158, 1986 Form 10K)
10.58.1 Amendment No. 1 dated June 20, 1986. (Exhibit 10-159,
1986 Form 10-K)
10.59 Indemnity Agreement B-39 dated May 9, 1969 with amendments 1-16
dated April 17, 1970 thru April 16, 1985 between licensees of
Millstone Unit No. 3 and the Nuclear Regulatory Commission.
(Exhibit 10-161, 1986 Form 10-K)
10.59.1 Amendment No. 17 dated November 25, 1985. (Exhibit
10-162, 1986 Form 10-K)
10.60 Memorandum of Understanding by and between The Champlain
Pipeline Company and Northern New England Gas Corporation,
Noverco Corporation and Central Vermont Equity Corporation
dated February 2, 1987. (Exhibit 10-163, 1987 Form 10-K)
10.60.1 Amendment No. 1 dated April 10, 1987. (Exhibit
10-164, 1987 Form 10-K)
10.60.2 Assignment Agreement by and between CV Energy
Resources, Inc. and CV Champlain Investments, Inc.
dated December 31, 1987. (Exhibit 10-165, 1987)
10.61 General Partnership Agreement re: Champlain Pipeline
Partnership dated January 1, 1988 by and between Noverco,
Northern New England Gas Corporation, CV Energy Resources, Inc.
and Providence Energy Corporation. (Exhibit 10-166, 1987 Form
10-K)
10.62 Contract for the Sale of 50MW of firm power between
Hydro-Quebec and Vermont Joint Owners of Highgate Facilities
dated February 23, 1987. (Exhibit 10-173, 1987 Form 10-K)
<PAGE>
10.63 Interconnection Agreement between Hydro-Quebec and Vermont
Joint Owners of Highgate facilities dated February 23, 1987.
(Exhibit 10-174, 1987 Form 10-K)
* 10.63.1 Amendment dated September 1, 1993 (Exhibit 10.63.1,
1993 Form 10-K)
10.64 Firm Power and Energy Contract by and between Hydro-Quebec and
Vermont Joint Owners of Highgate for 500MW dated December 4,
1987. (Exhibit 10-175, 1987 Form 10-K)
10.64.1 Amendment No. 1 dated August 31, 1988. (Exhibit
10-191, 1988 Form 10-K)
10.64.2 Amendment No. 2 dated September 19, 1990. (Exhibit
10-202, 1990 Form 10-K)
10.64.3 Firm Power & Energy Contract dated January 21, 1993
by and between Hydro-Quebec and Central Vermont
Public Service Corporation for the sale back of 25 MW
of power. (Exhibit 10.64.3, 1992 Form 10-K)
10.64.4 Firm Power & Energy Contract dated January 21, 1993
by and between Hydro-Quebec and Central Vermont Public
Service Corporation for the sale back of 50 MW of
power. (Exhibit 10.64.4, 1992 Form 10-K)
10.65 Settlement Agreement between EUA Power Corporation, Bangor
Hydro-Electric Company, Central Maine Power Company, Central
Vermont Public Service Corporation and Maine Public Service
Company dated January 31, 1988 re: Seabrook real estate.
(Exhibit 10-176, 1988 Form 10-K)
10.66 Hydro-Quebec Participation Agreement dated April 1, 1988 for
600 MW between Hydro-Quebec and Vermont Joint Owners of
Highgate. (Exhibit 10-177, 1988 Form 10-K)
10.67 Sale of firm power and energy (54MW) between Hydro-Quebec and
Vermont Utilities dated December 29, 1988. (Exhibit 10-183,
1988 Form 10-K)
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
10.68 Stock Option Plan for Non-Employee Directors dated July 18,
1988. (Exhibit 10-184, 1988 Form 10-K)
10.69 Stock Option Plan for Key Employees dated July 18, 1988.
(Exhibit 10-185, 1988 Form 10-K)
10.70 Officers Supplemental Insurance Plan authorized July 9, 1984.
(Exhibit 10-186, 1988 Form 10-K)
10.71 Officers Supplemental Deferred Compensation Plan dated November
4, 1985. (Exhibit 10-187, 1988 Form 10-K)
10.72 Directors' Supplemental Deferred Compensation Plan dated
November 4, 1985. (Exhibit 10-188, 1988 Form 10-K)
<PAGE>
10.73 Management Incentive Compensation Plan as adopted September 9,
1985. (Exhibit 10-189, 1988 Form 10-K)
10.73.1 Revised Management Incentive Plan as adopted February
5, 1990. (Exhibit 10-200. 1989 Form 10-K)
10.74 Officers' Change of Control Agreements as approved October 3,
1988. (Exhibit 10-190, 1988 Form 10-K)
* 10.78 Stock Option Plan for Non-Employee Directors dated April 30,
1993 (Exhibit 10.78, 1993 Form 10-K)
* 10.79 Officers Insurance Plan dated November 15, 1993
(Exhibit 10.79, 1993 Form 10-K)
* 10.80 Directors'Supplemental Deferred Compensation Plan dated
(Exhibit 10.80, 1993 Form 10-K)
* 10.81 Officers' Supplemental Deferred Compensation Plan dated
(Exhibit 10.81, 1993 Form 10-K)
--------------------------------------------
10.75 Receivables Purchase Agreement between Central Vermont Public
Service Corporation, Central Vermont Public Service Corporation
as Service Agent and The First National Bank of Boston dated
November 29, 1988. (Exhibit 10-192, 1988 Form 10-K)
* 10.75.1 Agreement Amendment No. 1 dated December 21, 1988
(Exhibit 10.75.1, 1993 Form 10-K)
* 10.75.2 Letter Agreement dated December 4, 1989
(Exhibit 10.75.2, 1993 Form 10-K)
* 10.75.3 Agreement Amendment No. 2 dated November 29, 1990
(Exhibit 10.75.3, 1993 Form 10-K)
* 10.75.4 Agreement Amendment No. 3 dated November 29, 1991
(Exhibit 10.75.4, 1993 Form 10-K)
* 10.75.5 Agreement Amendment No. 4 dated November 29, 1992
(Exhibit 10.75.5, 1993 Form 10-K)
10.76 Power Purchase Agreement with Bonneville Pacific Corporation,
Unit I, dated November 15, 1989. (Exhibit 10-198, 1989 Form
10-K)
10.77 Power Purchase Agreement with Bonneville Pacific Corporation,
Unit II, dated November 15, 1989. (Exhibit 10-199, 1989 Form
10-K)
* 10.82 Transmission Service Agreement between this Company and Green
Mountain Power Corporation dated September 1, 1993
(Exhibit 10.82, 1993 Form 10-K)
11. Not applicable.
<PAGE>
12. Not applicable.
13. 1992 Annual Report to Stockholders
* 13.1 Portions of the Annual Report to Stockholders of Central Vermont
Public Service Corporation that have been incorporated by
reference under Items 6, 7 and 8
16. Change in certifying accountant (July 1, 1985 Form 8-K)
18. Letter re change in accounting principles (1980 3rd Quarter Form 10-Q)
21. Subsidiaries of the Registrant
* 21.1 List of subsidiaries of registrant
<PAGE>
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
CENTRAL VERMONT PUBLIC SERVICE
CORPORATION
By /s/ Thomas C. Webb
Thomas C. Webb, President and
Chief Executive Officer
By /s/ Robert H. Young
Robert H. Young, Executive Vice President -
Chief Operating Officer
and Principal Financial Officer
By /s/ James M. Pennington
James M. Pennington, Controller
and Principal Accounting Officer
March 14, 1994
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
March 14, 1994 /s/ Frederic H. Bertrand
Frederic H. Bertrand
Director
<PAGE>
<PAGE>
March 14, 1994 /s/ Robert P. Bliss, Jr.
Robert P. Bliss, Jr.
Director
March 14, 1994 /s/ Elizabeth Coleman
Elizabeth Coleman
Director
March 14, 1994 /s/ Luther F. Hackett
Luther F. Hackett
Director
March 14, 1994 /s/ F. Ray Keyser, Jr.
F. Ray Keyser, Jr.
Director
March 14, 1994 /s/ Mary Alice McKenzie
Mary Alice McKenzie
Director
March 14, 1994 /s/ Gordon P. Mills
Gordon P. Mills
Director
March 14, 1994 /s/ Preston Leete Smith
Preston Leete Smith
Director
March 14, 1994 /s/ Robert D. Stout
Robert D. Stout
Director
March 14, 1994 /s/ Thomas C. Webb
Thomas C. Webb
Director
<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 of 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended Commission File No. 1-8222
December 31, 1993
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
EXHIBITS
TO
1993 FORM 10-K
<PAGE>
INDEX
List of Exhibits
1993 Form 10-K
4-53 Copy of Thirty-Eight Supplemental Indenture dated December 10,
1993 establishing Series KK, LL, MM, NN, OO supplemental to
B-1
10.16.24 Amendment dated May 1, 1993.
10.16.25 Amendment dated June 1, 1993
10.63.1 Amendment dated September 1, 1993
10.75.1 Agreement Amendment No. 1 dated December 21, 1988
10.75.2 Letter Agreement dated December 4, 1989
10.75.3 Agreement Amendment No. 2 dated November 29, 1990
10.75.4 Agreement Amendment No. 3 dated November 29, 1991
10.75.5 Agreement Amendment No. 4 dated November 29, 1992
10.78 Stock Option Plan for Non-Employee Directors dated April 30,
1993
10.79 Officers Insurance Plan dated November 15, 1993
10.80 Directors'Supplemental Deferred Compensation Plan dated
January 1, 1990
10.81 Officers' Supplemental Deferred Compensation Plan dated
January 1, 1990
10.82 Transmission Service Agreement between this Company and Green
Mountain Power Corporation dated September 1, 1993
13 Annual Report to Security holders
13.1 Portions of the Annual Report to Stockholders of
Central Vermont Public Service Corporation that have been
incorporated by reference under Items 6, 7 and 8
18. Letter re change in accounting principles (1980 3rd Quarter Form 10-Q)
21. Subsidiaries of the Registrant
* 21.1 List of subsidiaries of registrant
<PAGE>
<PAGE>
4-53
THIS SUPPLEMENTAL INDENTURE, dated as of December 10, 1993,
by and between CENTRAL VERMONT PUBLIC SERVICE
CORPORATION, a corporation duly organized and existing under the
laws of the State of Vermont (hereinafter generally referred to as the
Company), and THE FIRST NATlONAL BANK OF BOSTON, a national
banking association (hereinafter generally referred to as the Trustee), as
it is the successor Trustee under the Indenture of Mortgage next
hereinafter referred to,
WITNESSETH that:
WHEREAS the Company heretofore duly executed and delivered to Old
Colony Trust Company, as Trustee, an Indenture of Mortgage
(hereinafter generally referred to as the Original Indenture), dated as of
October 1, 1929, but actually executed on October 24, 1929 (the Original
Indenture, with all indentures supplemental thereto as therein provided,
being hereinafter generally referred to as the Mortgage), and recorded,
among other places, in Washington County (New York), Liber 150 of
Mortgages, Page 51, Grafton County (New Hampshire) Registry of
Deeds, Liber 616, Folio 484, Sullivan County (New Hampshire) Records,
Vol. 234, Page 531, in the Office of the Secretary of State of
Connecticut, in the Office of the City Clerk of Rutland, Vermont, in the
offices of the clerks of certain other towns and cities in the State of
Vermont, and in the Office of the Secretary of State of the State of
Vermont, to which Original Indenture this instrument is supplemental, and
thirty-seven duly recorded indentures supplemental thereto and in
modification and confirmation thereof, whereby all the properties of the
Company, whether owned at the time of the execution thereof or
thereafter acquired, with certain exceptions and reservations therein fully
set forth, were granted, assigned, transferred, mortgaged and pledged to
the Trustee, in trust upon the terms and conditions set forth therein, to
secure bonds of the Company issued and to be issued in accordance
with the terms of the Mortgage and for other purposes more particularly
set forth therein; and
WHEREAS on January 4, 1971, Old Colony Trust Company was merged
into The First National Bank of Boston which thereupon succeeded to the
trusts under the Mortgage; and
WHEREAS in order to comply with the obligations of the Company in
Section 12 of Article III and elsewhere in the Original Indenture, and the
provisions of said section and of Section 1 of Article XVI of the Original
Indenture, it is desirable and the Company is required and has duly and
lawfully determined, at the request of the Trustee, to execute and deliver
this instrument for the purpose of complying with said obligations and
provisions; and
WHEREAS the Company has caused to be paid or redeemed all bonds
issued under the Mortgage other than those now outstanding as
described below and has caused to be paid or redeemed or has
otherwise discharged the underlying bonds of its predecessor
corporations described in the Original Indenture and the mortgages
securing the same; and the Company has also issued and there are
outstanding on the date of delivery hereof $67,580,000 in principal
amount of First Mortgage Bonds, Series M, N, Y, EE, FF, GG, HH and
JJ and the Company proposes to issue under the Mortgage $10,000,000
in aggregate principal amount of additional First Mortgage 5.30% Bonds,
Series KK, due December 15, 1998 (herein referred to as the bonds of
Series KK); $5,000,000 in aggregate principal amount of additional First
Mortgage 5.54% Bonds, Series LL, due December 15, 2000 (herein
referred to as the bonds of Series LL); $7,500,000 in aggregate principal
amount of additional First Mortgage 6.01% Bonds, Series MM, due
December 15, 2003 (herein referred to as the bonds of Series MM);
$3,000,000 in aggregate principal amount of additional First Mortgage
6.27% Bonds, Series NN, due December 15, 2008 (herein referred to as
the bonds of Series NN); and $17,500,000 in aggregate principal amount
of additional First Mortgage 6.90% Bonds, Series OO, due December 15,
2023 (herein referred to as the bonds of Series OO), which series
(subject to the restrictions and provisions contained in the Mortgage) are
limited to such aggregate principal amount, respectively; and
WHEREAS this Supplemental Indenture has been duly and legally
authorized by the Board of Directors of the Company, and the use of
terms and expressions herein is in accordance with the definitions, uses
and constructions contained in the Original Indenture as heretofore and
hereby supplemented, modified and confirmed; and
WHEREAS the bonds of Series KK, LL, MM, NN and OO and the
Trustee's certificate thereon are to be substantially in the respective
forms set forth in resolutions (a certified copy of which is on file with
the
Trustee) of the Board of Directors of the Company designating and
authorizing the bonds of Series KK, LL, MM, NN and OO, and the bonds
of Series KK, LL, MM, NN and OO are to be redeemable as set forth in
said forms of the bonds of Series KK, LL, MM, NN and OO;
NOW THEREFORE, in confirmation of and supplementing the Mortgage
and pursuant to, in compliance with, and in execution of, the powers,
authorities and obligations conferred, imposed and reserved therein and
every other power, authority and obligation appertaining thereto, in
consideration of the premises, and of the acceptance and purchase of
the bonds by the holders thereof, and of the sum of one dollar to it duly
paid by said The First National Bank of Boston and of other good and
valuable consideration, the receipt whereof is hereby acknowledged, said
Central Vermont Public Service Corporation has given, granted,
bargained, sold, transferred, assigned, pledged, mortgaged, warranted,
conveyed and confirmed, and by these presents does give, grant,
bargain, sell, transfer, assign, pledge, mortgage, warrant, convey and
confirm, unto said The First National Bank of Boston, as Trustee as
aforesaid, and its successor or successors in the trusts under the
Mortgage and hereunder, and its and their assigns, (a) all and singular
the plants, rights, permits, franchises, privileges, easements and
property, real, personal and mixed, described in the Original Indenture
and each of the preceding Supplemental Indentures, and thereby or
otherwise thereunder conveyed, pledged, assigned, transferred and
mortgaged, or intended so to be (said descriptions in the Original
Indenture and each of the preceding Supplemental Indentures being
hereby made a part hereof to the same extent as if set forth herein at
length), whether then or now owned or thereafter or hereafter acquired,
except such of said properties or interests therein as may have been
released by the Trustee or sold or disposed of in whole or in part as
permitted by the provisions of the Original Indenture as heretofore
supplemented and amended, and (b) also, but without in any way limiting
the generality of the foregoing, all of the right, title and interest of
the
Company in and to the franchises, rights, titles, interests, easements and
properties described in Schedule A hereto attached and hereby made a
part hereof as fully as if set forth herein at length.
Subject, however, as to all of the foregoing, to the specific rights,
privileges, liens, encumbrances, restrictions, conditions, limitations,
covenants, interests, reservations, exceptions and otherwise as provided
in the Original Indenture and preceding Supplemental Indentures, and in
the descriptions in the schedules thereto and hereto and in the deeds or
grants in said schedules referred to.
BUT SPECIFICALLY RESERVING AND EXCEPTING (as the same were
reserved and excepted from the lien of the Original Indenture and all
preceding Supplemental Indentures) from this instrument and the grant,
conveyance, mortgage, transfer and assignment herein contained (1) all
right, title and interest of the Company, now owned or hereafter acquired,
in and to the properties and rights specified in subclauses (a) to (c),
both
inclusive, of the granting clauses on page 11 of the Original Indenture,
and (2) (as the same, pursuant to the provisions of Section 18(b) of
Article 2 of the Fifth Supplemental Indenture, dated as of February 1,
1945, were reserved from the lien of the Original Indenture and the
preceding Supplemental Indentures) all telephone properties, whether
heretofore or now owned or hereafter acquired by the Company.
TO HAVE AND TO HOLD all said property hereby conveyed, assigned,
pledged or mortgaged, or intended so to be, together with the rents,
issues and profits thereof, as well as all such after-acquired property,
unto the Trustee, its successor or successors in the trusts under the
Mortgage and hereunder and its and their assigns forever;
BUT IN TRUST, NEVERTHELESS, under and subject to the provisions
and conditions, with all the powers and authority and for the trusts and
purposes, herein and in the Mortgage set forth, (1) for the equal and
proportionate benefit and security (except as provided in Section 3 of
Article III and elsewhere in the Original Indenture as heretofore and
hereby supplemented, modified and confirmed) of the holders of all
bonds and interest coupons heretofore, now and hereafter issued under
the Mortgage and from time to time outstanding, pursuant to the
provisions thereof, and for the enforcement of the payment of said bonds
and coupons when payable, and the performance of and compliance with
the covenants and conditions of the Mortgage, without (except as
aforesaid) any preference, distinction or priority as to lien or otherwise
of
any bond or coupon over any other bond or coupon by reason of the
difference in the series or time of the actual issue, sale or negotiation
thereof, or for any other reason whatsoever, so that each and every bond
heretofore, now or hereafter issued under the Mortgage shall have the
same lien, and so that the interest and principal of every such bond shall,
subject to the terms of the Original Indenture, be equally and
proportionately secured thereby and hereby, as if it had been made,
executed, delivered, sold and negotiated simultaneously with the
execution and delivery of the Original Indenture; and (2) subject to the
covenants, agreements, rights, privileges, immunities, trusts and duties
set forth in the Original Indenture, as heretofore supplemented, modified
and confirmed, and in this Supplemental Indenture.
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED, upon
the trusts and for the purposes aforesaid, as set forth in the following
covenants, agreements, conditions and provisions:
ARTICLE 1.
CERTAIN LIMITATIONS AND COVENANTS.
SECTION 1. The Company covenants and agrees as follows:
That, so long as any of the bonds of Series KK, LL, MM, NN or OO
remain outstanding, it will not (a) declare or pay any dividend or make
any distribution on any shares of capital stock of the Company of any
class (other than a dividend payable solely in capital stock of the
Company), or (b) apply any of its property or assets to the purchase,
redemption or other retirement of, or set apart any sums for dividends on
or for the purchase, redemption or other retirement of, or make any
distribution by reduction of capital or otherwise in respect of (except
from
the proceeds of any stock financing subsequent to the date hereof), any
shares of capital stock of the Company of any class other than shares
retired through the operation of the mandatory sinking fund provisions of
any class of the Company's preferred stocks now or hereafter issued, if
in either case the aggregate amount so paid, distributed and applied after
December 31, 1988, would exceed the sum of (i) the aggregate of the
net income of the Company accumulated for the period from said date up
to and including the end of the month next preceding the month in which
a dividend is to be paid or such distribution, purchase, redemption or
other retirement is to be made plus (ii) $35,000,000. Any payment,
distribution, purchase, redemption or other retirement permitted by the
prior sentence may be made only if immediately prior to such action and
after giving effect to such action there will not have occurred or be con-
tinuing a default or event of default under the Mortgage. Net income of
the Company for the purpose of this section shall mean the gross
operating revenues and other income of the Company less all deductions
for operating expenses, taxes (including income, excess profits and other
taxes based on or measured by income), interest expense, reserves, any
extraordinary items of expense and other appropriate items, all as
determined in accordance with such system of accounts as may be
prescribed by the Vermont Public Service Board or any successor
regulatory commission or agency of the State of Vermont having the
same or similar jurisdiction over accounts or, in the absence thereof, in
accordance with sound accounting practice, and less, for any period, the
amount, if any, by which the Renewal Requirement as defined in Article
VII of the Mortgage for such period exceeds the aggregate amount
included in operating expenses with respect to depreciation of electric
plant during such period; provided, however, that in determining the net
income of the Company for the purposes of this section no deduction or
adjustment shall be made for or in respect of: (a) expenses in
connection with the redemption or retirement of any securities issued by
the Company, including any amount paid in excess of the principal
amount of securities redeemed or retired and, in the event that such
redemption or retirement is effected with the proceeds of sale of other
securities of the Company, interest on the securities redeemed or retired
from the date on which the funds required for such redemption or
retirement are deposited in trust for such purpose to the date of
redemption or retirement; (b) profits and losses from sales of public
utility
property or other capital assets, or taxes on or in respect of any such
profits; (c) any earned surplus adjustment (including tax adjustments)
applicable to any period prior to January 1, 1993; or (d) amortization of
utility plant adjustment accounts or intangibles.
SECTION 2.(a) The Company covenants and agrees that, except as
provided in subsections 2(b), (c), (d), (e) and (f), it will not, and will not
request the Trustee to, redeem, pay or purchase or otherwise retire any
bonds of Series KK, LL, MM, NN or OO, in connection with the Renewal
Fund established under Article VII of the Mortgage or for any other
purposes of the Mortgage other than in connection with the application
pursuant to Article IX of the Mortgage of moneys received by the Trustee
as proceeds of released property or of property taken by the power of
eminent domain or as insurance money. In connection with a
redemption or purchase pursuant to said Article IX, bonds of Series KK,
LL, MM, NN or OO may be called for redemption or purchased, as a
whole or in part in the principal amount of $1,000 or any integral multiple
thereof, at a redemption or purchase price of 100% of the principal
amount of the bonds of Series KK, LL, MM, NN or OO to be redeemed
or purchased plus accrued interest thereon to the date of redemption or
purchase, together with a premium equal to the Make-Whole Premium
Amount (as defined in subsections 2(b), (c), (d), (e) and (f) below) with
respect to the principal amount being redeemed or purchased.
(b) Notwithstanding any provision of the Mortgage, the bonds of Series
KK may be redeemed at the option of the Company, as a whole or in
part in the principal amount of $1,000 or any integral multiple thereof, at
any time after December 15, 1994 and prior to December 15, 1998, at a
redemption price of 100% of the principal amount of the bonds of Series
KK to be redeemed plus accrued interest thereon to the date of
redemption, together with a premium equal to the Make-Whole Premium
Amount with respect to the principal amount being redeemed. As used
herein the following terms shall have the meanings set forth below:
"Make-Whole Premium Amount" shall mean at any time with respect to
the bonds of Series KK being redeemed pursuant to this subsection 2(b),
the excess, if any, (and in no case less than zero) of (i) the present value
as of the date of, but immediately prior to, such redemption of the
principal payment at final maturity allocable to such redemption and the
remaining scheduled interest payments (including any accrued interest)
on the bonds of Series KK allocable to such redemption (determined by
discounting such amounts on a semiannual compounded basis at the
"Reinvestment Yield" from the respective dates on which but for the
redemption under this subsection 2(b), such principal payments and
interest payments would have been payable) over (ii) 100% of the
principal amount of the bonds of Series KK being redeemed plus accrued
interest thereon from the next preceding interest payment date to the
date of such redemption.
"Reinvestment Yield" shall mean the lesser of (A) 5.30% or (B) the sum
of 0.50% plus the arithmetic mean of the two most recent weekly
average yields to maturity for actively traded marketable U.S. Treasury
fixed interest securities (adjusted to constant maturities) equal to the
remaining Life to Maturity (as of the date of the proposed redemption of
the bonds of Series KK) as published by the Federal Reserve Board in
its Statistical Release H.15(519) for the two calendar weeks ending on
the Saturday next preceding the Premium Notice Date, as defined below,
or, if such average is not published for such period, of such reasonably
comparable index as may be approved by the holder or holders of at
least 66 2/3% of the unpaid principal amount of the bonds of Series KK
to be redeemed. If no maturity exactly corresponds to such Life to
Maturity, the yields for the two most closely corresponding published
maturities shall be calculated pursuant to the immediately preceding
sentence and the Reinvestment Yield shall be interpolated from such
yields on a straight-line basis, rounding in each of such relevant periods
to the nearest month; provided, that if there is no such greater published
maturity, the yield to maturity shall be such lesser published maturity.
"Life to Maturity" shall mean as at the date of the proposed redemption
thereof the number of years (calculated at the nearest one-twelfth) which
will elapse between the date of determination of the Life to Maturity of
the bonds of Series KK and the date of payment at final maturity.
The Company may not make any redemption under this subsection 2(b)
unless it shall have delivered to the Trustee, at least sixty (60) days
before the redemption date, written notice thereof specifying the principal
amount of bonds of Series KK to be redeemed. In the case of a
redemption under this subsection 2(b), at least thirty (30) days prior to
the date fixed for redemption (the "Premium Notice Date") the Company
will furnish written notice to the Trustee and each holder of bonds of
Series KK, by telecopy or other same day written communication, of the
premium, if any, applicable to such redemption and the calculations, in
reasonable detail, used to determine the amount of any such premium.
(c) Notwithstanding any provision of the Mortgage, the bonds of Series
LL may be redeemed at the option of the Company, as a whole or in part
in the principal amount of $1,000 or any integral multiple thereof, at any
time after December 15, 1994 and prior to December 15, 2000, at a
redemption price of 100% of the principal amount of the bonds of Series
LL to be redeemed plus accrued interest thereon to the date of
redemption, together with a premium equal to the Make-Whole Premium
Amount with respect to the principal amount being redeemed. As used
herein the following terms shall have the meanings set forth below:
"Make-Whole Premium Amount" shall mean at any time with respect to
the bonds of Series LL being redeemed pursuant to this subsection 2(c),
the excess, if any, (and in no case less than zero) of (i) the present value
as of the date of, but immediately prior to, such redemption of the
principal payment at final maturity allocable to such redemption and the
remaining scheduled interest payments (including any accrued interest)
on the bonds of Series LL allocable to such redemption (determined by
discounting such amounts on a semiannual compounded basis at the
"Reinvestment Yield" from the respective dates on which but for the
redemption under this subsection 2(c), such principal payments and
interest payments would have been payable) over (ii) 100% of the
principal amount of the bonds of Series LL being redeemed plus accrued
interest thereon from the next preceding interest payment date to the
date of such redemption.
"Reinvestment Yield" shall mean the lesser of (A) 5.54% or (B) the sum
of 0.50% plus the arithmetic mean of the two most recent weekly
average yields to maturity for actively traded marketable U.S. Treasury
fixed interest securities (adjusted to constant maturities) equal to the
remaining Life to Maturity (as of the date of the proposed redemption of
the bonds of Series LL) as published by the Federal Reserve Board in its
Statistical Release H.15(519) for the two calendar weeks ending on the
Saturday next preceding the Premium Notice Date, as defined below, or,
if such average is not published for such period, of such reasonably
comparable index as may be approved by the holder or holders of at
least 66 2/3% of the unpaid principal amount of the bonds of Series LL to
be redeemed. If no maturity exactly corresponds to such Life to Maturity,
the yields for the two most closely corresponding published maturities
shall be calculated pursuant to the immediately preceding sentence and
the Reinvestment Yield shall be interpolated from such yields on a
straight-line basis, rounding in each of such relevant periods to the
nearest month; provided, that if there is no such greater published
maturity, the yield to maturity shall be such lesser published maturity.
"Life to Maturity" shall mean as at the date of the proposed redemption
thereof the number of years (calculated at the nearest one-twelfth) which
will elapse between the date of determination of the Life to Maturity of
the bonds of Series LL and the date of payment at final maturity.
The Company may not make any redemption under this subsection 2(c)
unless it shall have delivered to the Trustee, at least sixty (60) days
before the redemption date, written notice thereof specifying the principal
amount of bonds of Series LL to be redeemed. In the case of a
redemption under this subsection 2(c), at least thirty (30) days prior to
the date fixed for redemption (the "Premium Notice Date") the Company
will furnish written notice to the Trustee and each holder of bonds of
Series LL, by telecopy or other same day written communication, of the
premium, if any, applicable to such redemption and the calculations, in
reasonable detail, used to determine the amount of any such premium.
(d) Notwithstanding any provision of the Mortgage, the bonds of Series
MM may be redeemed at the option of the Company, as a whole or in
part in the principal amount of $1,000 or any integral multiple thereof, at
any time after December 15, 1994 and prior to December 15, 2003, at a
redemption price of 100% of the principal amount of the bonds of Series
MM to be redeemed plus accrued interest thereon to the date of
redemption, together with a premium equal to the Make-Whole Premium
Amount with respect to the principal amount being redeemed. As used
herein the following terms shall have the meanings set forth below:
"Make-Whole Premium Amount" shall mean at any time with respect to
the bonds of Series MM being redeemed pursuant to this subsection
2(d), the excess, if any, (and in no case less than zero) of (i) the present
value as of the date of, but immediately prior to, such redemption of the
principal payment at final maturity allocable to such redemption and the
remaining scheduled interest payments (including any accrued interest)
on the bonds of Series MM allocable to such redemption (determined by
discounting such amounts on a semiannual compounded basis at the
"Reinvestment Yield" from the respective dates on which but for the
redemption under this subsection 2(d), such principal payments and
interest payments would have been payable) over (ii) 100% of the
principal amount of the bonds of Series MM being redeemed plus
accrued interest thereon from the next preceding interest payment date
to the date of such redemption.
"Reinvestment Yield" shall mean the lesser of (A) 6.01% or (B) the sum
of 0.50% plus the arithmetic mean of the two most recent weekly
average yields to maturity for actively traded marketable U.S. Treasury
fixed interest securities (adjusted to constant maturities) equal to the
remaining Life to Maturity (as of the date of the proposed redemption of
the bonds of Series MM) as published by the Federal Reserve Board in
its Statistical Release H.15(519) for the two calendar weeks ending on
the Saturday next preceding the Premium Notice Date, as defined below,
or, if such average is not published for such period, of such reasonably
comparable index as may be approved by the holder or holders of at
least 66 2/3% of the unpaid principal amount of the bonds of Series MM
to be redeemed. If no maturity exactly corresponds to such Life to
Maturity, the yields for the two most closely corresponding published
maturities shall be calculated pursuant to the immediately preceding
sentence and the Reinvestment Yield shall be interpolated from such
yields on a straight-line basis, rounding in each of such relevant periods
to the nearest month; provided, that if there is no such greater published
maturity, the yield to maturity shall be such lesser published maturity.
"Life to Maturity" shall mean as at the date of the proposed redemption
thereof the number of years (calculated at the nearest one-twelfth) which
will elapse between the date of determination of the Life to Maturity of
the bonds of Series MM and the date of payment at final maturity.
The Company may not make any redemption under this subsection 2(d)
unless it shall have delivered to the Trustee, at least sixty (60) days
before the redemption date, written notice thereof specifying the principal
amount of bonds of Series MM to be redeemed. In the case of a
redemption under this subsection 2(d), at least thirty (30) days prior to
the date fixed for redemption (the "Premium Notice Date") the Company
will furnish written notice to the Trustee and each holder of bonds of
Series MM, by telecopy or other same day written communication, of the
premium, if any, applicable to such redemption and the calculations, in
reasonable detail, used to determine the amount of any such premium.
(e) Notwithstanding any provision of the Mortgage, the bonds of Series
NN may be redeemed at the option of the Company, as a whole or in
part in the principal amount of $1,000 or any integral multiple thereof, at
any time after December 15, 1994 and prior to December 15, 2008, at a
redemption price of 100% of the principal amount of the bonds of Series
NN to be redeemed plus accrued interest thereon to the date of
redemption, together with a premium equal to the Make-Whole Premium
Amount with respect to the principal amount being redeemed. As used
herein the following terms shall have the meanings set forth below:
"Make-Whole Premium Amount" shall mean at any time with respect to
the bonds of Series NN being redeemed pursuant to this subsection 2(e),
the excess, if any, (and in no case less than zero) of (i) the present value
as of the date of, but immediately prior to, such redemption of the
principal payment at final maturity allocable to such redemption and the
remaining scheduled interest payments (including any accrued interest)
on the bonds of Series NN allocable to such redemption (determined by
discounting such amounts on a semiannual compounded basis at the
"Reinvestment Yield" from the respective dates on which but for the
redemption under this subsection 2(e), such principal payments and
interest payments would have been payable) over (ii) 100% of the
principal amount of the bonds of Series NN being redeemed plus
accrued interest thereon from the next preceding interest payment date
to the date of such redemption.
"Reinvestment Yield" shall mean the lesser of (A) 6.27% or (B) the sum
of 0.50% plus the arithmetic mean of the two most recent weekly
average yields to maturity for actively traded marketable U.S. Treasury
fixed interest securities (adjusted to constant maturities) equal to the
remaining Life to Maturity (as of the date of the proposed redemption of
the bonds of Series NN) as published by the Federal Reserve Board in
its Statistical Release H.15(519) for the two calendar weeks ending on
the Saturday next preceding the Premium Notice Date, as defined below,
or, if such average is not published for such period, of such reasonably
comparable index as may be approved by the holder or holders of at
least 66 2/3% of the unpaid principal amount of the bonds of Series NN
to be redeemed. If no maturity exactly corresponds to such Life to
Maturity, the yields for the two most closely corresponding published
maturities shall be calculated pursuant to the immediately preceding
sentence and the Reinvestment Yield shall be interpolated from such
yields on a straight-line basis, rounding in each of such relevant periods
to the nearest month; provided, that if there is no such greater published
maturity, the yield to maturity shall be such lesser published maturity.
"Life to Maturity" shall mean as at the date of the proposed redemption
thereof the number of years (calculated at the nearest one-twelfth) which
will elapse between the date of determination of the Life to Maturity of
the bonds of Series NN and the date of payment at final maturity.
The Company may not make any redemption under this subsection 2(e)
unless it shall have delivered to the Trustee, at least sixty (60) days
before the redemption date, written notice thereof specifying the principal
amount of bonds of Series NN to be redeemed. In the case of a
redemption under this subsection 2(e), at least thirty (30) days prior to
the date fixed for redemption (the "Premium Notice Date") the Company
will furnish written notice to the Trustee and each holder of bonds of
Series NN, by telecopy or other same day written communication, of the
premium, if any, applicable to such redemption and the calculations, in
reasonable detail, used to determine the amount of any such premium.
(f)(i) Notwithstanding any provision of the Mortgage, the bonds of Series
OO may be redeemed at the option of the Company, as a whole or in
part in the principal amount of $1,000 or any integral multiple thereof, at
any time after December 15, 1994 and prior to December 15, 2018, at a
redemption price of 100% of the principal amount of the bonds of Series
OO to be redeemed plus accrued interest thereon to the date of
redemption, together with a premium equal to the Make-Whole Premium
Amount with respect to the principal amount being redeemed. As used
herein the following terms shall have the meanings set forth below:
"Make-Whole Premium Amount" shall mean at any time with respect to
the bonds of Series OO being redeemed pursuant to this subsection 2(f),
the excess, if any, (and in no case less than zero) of (i) the present value
as of the date of, but immediately prior to, such redemption of the
principal payment at final maturity allocable to such redemption and the
remaining scheduled interest payments (including any accrued interest)
on the bonds of Series OO allocable to such redemption (determined by
discounting such amounts on a semiannual compounded basis at the
"Reinvestment Yield" from the respective dates on which but for the
redemption under this subsection 2(f), such principal payments and
interest payments would have been payable) over (ii) 100% of the
principal amount of the bonds of Series OO being redeemed plus
accrued interest thereon from the next preceding interest payment date
to the date of such redemption.
"Reinvestment Yield" shall mean the lesser of (A) 6.90% or (B) the sum
of 0.50% plus the arithmetic mean of the two most recent weekly
average yields to maturity for actively traded marketable U.S. Treasury
fixed interest securities (adjusted to constant maturities) equal to the
remaining Life to Maturity (as of the date of the proposed redemption of
the bonds of Series OO) as published by the Federal Reserve Board in
its Statistical Release H.15(519) for the two calendar weeks ending on
the Saturday next preceding the Premium Notice Date, as defined below,
or, if such average is not published for such period, of such reasonably
comparable index as may be approved by the holder or holders of at
least 66 2/3% of the unpaid principal amount of the bonds of Series OO
to be redeemed. If no maturity exactly corresponds to such Life to
Maturity, the yields for the two most closely corresponding published
maturities shall be calculated pursuant to the immediately preceding
sentence and the Reinvestment Yield shall be interpolated from such
yields on a straight-line basis, rounding in each of such relevant periods
to the nearest month; provided, that if there is no such greater published
maturity, the yield to maturity shall be such lesser published maturity.
"Life to Maturity" shall mean as at the date of the proposed redemption
thereof the number of years (calculated at the nearest one-twelfth) which
will elapse between the date of determination of the Life to Maturity of
the bonds of Series OO and the date of payment at final maturity.
The Company may not make any redemption under this subsection 2(f)(i)
unless it shall have delivered to the Trustee, at least sixty (60) days
before the redemption date, written notice thereof specifying the principal
amount of bonds of Series OO to be redeemed. In the case of a
redemption under this subsection 2(f)(i), at least thirty (30) days prior to
the date fixed for redemption (the "Premium Notice Date") the Company
will furnish written notice to the Trustee and each holder of bonds of
Series OO, by telecopy or other same day written communication, of the
premium, if any, applicable to such redemption and the calculations, in
reasonable detail, used to determine the amount of any such premium.
(ii) Notwithstanding any provision of the Mortgage, the bonds of Series
OO may be redeemed at the option of the Company, as a whole or in
part in the principal amount of $1,000 or any integral multiple thereof, at
any time on or after December 15, 2018 and prior to December 15,
2023, at a redemption price of 100% of the principal amount of the bonds
of Series OO to be redeemed plus accrued and unpaid interest thereon
to the date of redemption but without premium. The Company may not
make any redemption under this subsection 2(f)(ii) unless it shall have
delivered to the Trustee, at least sixty (60) days before the redemption
date, written notice thereof specifying the principal amount of bonds of
Series OO to be redeemed.
SECTION 3. The Company covenants and agrees that, so long as any
bonds of Series KK, LL, MM, NN or OO remain outstanding, it will apply
to the Trustee for no release, under Section 2 of Article VIII of the
Original Indenture as heretofore supplemented and amended, of any part
of the mortgaged property for any consideration consisting in whole or in
part of purchase money obligations secured by mortgage on the property
released if the aggregate principal amount of such purchase money
obligations in connection with any release would exceed sixty percent
(60%) of the value (as defined in Section 3 of Article II of the Original
Indenture as heretofore supplemented and amended) of the property to
be released.
SECTION 4. Notwithstanding any provisions of the Mortgage, whenever
any bonds of Series KK, LL, MM, NN or OO are to be called for
redemption as provided in Article 1 hereof, the Trustee shall select such
bonds in accordance with the following provisions: the principal amount
of bonds of Series KK, LL, MM, NN or OO then to be redeemed from
each holder thereof shall bear the same ratio (to the nearest $1,000) to
the total principal amount of bonds of Series KK, LL, MM, NN or OO then
to be redeemed as the total principal amount of bonds of such series
then held by each such holder bears to the total principal amount of
bonds of such series then outstanding.
Purchases of bonds of Series KK, LL, MM, NN or OO by the Company
or the Trustee (as Trustee) shall be made only (a) with the written
consent of all the then holders of the bonds of such series being
purchased to the purchase being made, or (b) after the Company or the
Trustee shall first have offered to purchase at the same price and
contemporaneously from each then holder of the bonds of such series
being purchased such holder's pro rata share of the total principal
amount of the bonds of such series then being purchased.
SECTION 5. Notwithstanding any provisions of the Mortgage, in
connection with any redemption of bonds of Series KK, LL, MM, NN or
OO any notice of redemption shall be sufficiently given if mailed first
class, postage prepaid, to each registered holder of bonds at the last
address of each holder appearing on the bond register.
SECTION 6. Notwithstanding any provisions of the Mortgage or the
bonds of Series KK, LL, MM, NN or OO, so long as the original
registered holders or any subsequent registered holder of bonds of
Series KK, LL, MM, NN or OO which is a bank, an insurance company, a
savings institution, a trust company, a pension fund, or other institutional
investor shall hold any of the bonds of Series KK, LL, MM, NN or OO all
payments of interest on the bonds of such series and all payments on
account of principal or premium, if any, shall be made directly to each
such registered holder or its nominee at such address as may from time
to time be furnished by such holder in writing without surrender or
presentation of such bonds of such series to the Trustee (except in the
case of payment or redemption of any bond of Series KK, LL, MM, NN or
OO in whole) and with respect to each such original holder or
subsequent holder such payments shall be made in accordance with the
provisions of any written agreement between such original holder or
subsequent holder and the Company which shall have been
communicated and consented to by the Trustee.
The Trustee hereby consents to the method of payment described in
Section 6 of the Bond Purchase Agreements dated as of December 3,
1993 between the Company and the respective purchasers as defined
therein.
ARTICLE 2.
MISCELLANEOUS PROVISIONS.
SECTION 1. The Trustee hereby confirms its approval, previously given,
of the designations: "First Mortgage 5.30% Bonds, Series KK" for the
bonds of said Series KK; "First Mortgage 5.54% Bonds, Series LL" for
the bonds of said Series LL; "First Mortgage 6.01% Bonds, Series MM"
for the bonds of said Series MM; "First Mortgage 6.27% Bonds, Series
NN" for the bonds of said Series NN; and "First Mortgage 6.90% Bonds,
Series OO" for the bonds of said Series OO.
SECTION 2. The Trustee shall be entitled to, may exercise and shall be
protected by, where and to the full extent that the same are applicable,
all the rights, powers, privileges, immunities and exemptions provided in
the Mortgage as if the provisions concerning the same were incorporated
herein at length. The Trustee under the Mortgage shall ex officio be
Trustee hereunder. The recitals and statements in this Supplemental
Indenture and in the bonds shall be taken as statements by the
Company alone, and shall not be considered as made by or as imposing
any obligation or liability upon the Trustee, nor shall the Trustee be held
responsible for the legality or validity of this Supplemental Indenture or of
the bonds, and the Trustee makes no covenants or representations, and
shall not be responsible, as to and for the effect, authorization, execution,
delivery or recording of this Supplemental Indenture.
SECTION 3. This Supplemental Indenture shall become void when the
Original Indenture as heretofore supplemented and amended shall be
void.
SECTION 4. The Mortgage as supplemented hereby is ratified and con-
firmed in all respects.
SECTION 5. If and to the extent that any provision of this Supplemental
Indenture limits, qualifies or conflicts with the duties imposed by any of
Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939 as
amended by the Trust Indenture Reform Act of 1990, through operation
of Section 318(c), such imposed duties shall control.
SECTION 6. This Supplemental Indenture may be simultaneously
executed in any number of counterparts, and all said counterparts
executed and delivered, each as an original, shall constitute but one and
the same instrument.
IN WITNESS WHEREOF, said CENTRAL VERMONT PUBLIC SERVICE
CORPORATION has caused this instrument to be signed, and its
corporate seal attested by its Secretary or Assistant Secretary to be
hereunto affixed, by Robert H. Young, its Executive Vice President and
Agent in that behalf duly authorized, and said THE FIRST NATIONAL
BANK OF BOSTON, in token of its acceptance of the trust herein
created, has caused this instrument to be executed in its corporate name
and its corporate seal to be hereto affixed by one of its Authorized
Officers, all as of the day and year first above written.
CENTRAL VERMONT PUBLIC SERVICE CORPORATION,
BY Robert H. Young
Robert H. Young
Its Executive Vice President
and Agent.
Attest:
Carole L. Root (Corporate
Carole L. Root, Assistant Secretary Seal)
Signed, sealed and delivered on
behalf of Central Vermont Public
Service Corporation in the presence
of:
Gale Levatino
Gale Levatino
Patricia Mitiguy
Patricia Mitiguy
<PAGE>
THE FIRST NATIONAL BANK OF BOSTON,
as Trustee as aforesaid,
James E. Mogavero
James E. Mogavero
Authorized Officer.
Signed, sealed and delivered on
(Corporate behalf of
The First National Bank Seal)
of Boston in the presence
of:
Henry W. Seemore, Jr.
Henry W. Seemore, Jr.
Robert Dougherty
Robert Dougherty
<PAGE>
SCHEDULE A.
DESCRIPTION OF PROPERTIES.
All land and premises, rights, privileges and easements conveyed or
purported to have been conveyed to the Company in and by the
following described deeds and the records thereof are hereby
incorporated herein by reference:
Properties acquired after December 10, 1991 or not previously described:
(1)Deed from Craig A. Cota and Joan D. Cota, dated
March 27, 1991, Recorded in Book 36, Page 505 of the West Rutland
Land Records in the County of Rutland and State of Vermont.
(2)Deed from Timothy A. Nichols and Brenda M. Nichols, dated October
16, 1991, Recorded in Book 66, Page 238-239 of the Arlington Land
Records in the County of Bennington and State of Vermont.
(3)Deed from Marion E. Sevigny, Roy A. Calkins, Carmen M. Bigelow,
Paul R. Calkins, Zana A. Tauriainen and Leland E. Calkins, dated April
17, 1992, Recorded in Book 214, Pages 415-420 of the St. Johnsbury
Land Records in the County of Caledonia and State of Vermont.
(4)Deed from Martin W. Bowen, Jr. and Marilyn A. Bowen, dated April 8,
1993, Recorded in Book 323, Page 156-157 of the Rutland City Land
Records in the County of Rutland and State of Vermont.
Also, all property of every kind whatsoever, including land and premises,
rights, privileges, easements, transmission lines, substations and
distribution lines, in the following towns:
IN NEW LONDON COUNTY, STATE OF CONNECTICUT:
Waterford
IN HARTFORD COUNTY, STATE OF CONNECTICUT:
Berlin
IN CUMBERLAND COUNTY, STATE OF MAINE:
Yarmouth
IN SULLIVAN COUNTY, STATE OF NEW HAMPSHIRE:
Charleston Cornish Plainfield
Claremont Newport Unity
IN CHESHIRE COUNTY, STATE OF NEW HAMPSHIRE:
Chesterfield Hinsdale
IN GRAFTON COUNTY, STATE OF NEW HAMPSHIRE:
Bath Lyman Orford
Haverhill Lyme Piermont
IN WASHINGTON COUNTY, STATE OF NEW YORK:
Granville Hampton
IN RENSSELAER COUNTY, STATE OF NEW YORK:
Hoosick
IN ADDISON COUNTY, STATE OF VERMONT:
Addison Leicester Ripton
Bridport Lincoln Salisbury
Bristol Middlebury Shoreham
Cornwall Monkton Starksboro
Ferrisburg New Haven Vergennes
Goshen Orwell Weybridge
Granville Panton Whiting
Hancock
IN BENNINGTON COUNTY, STATE OF VERMONT:
Arlington Manchester Searsburg
Bennington Peru Shaftsbury
Dorset Pownal Sunderland
Glastenbury Rupert Winhall
Landgrove Sandgate Woodford
IN CALEDONIA COUNTY, STATE OF VERMONT:
Barnet Lyndon Walden
Danville Ryegate Waterford
Kirby St. Johnsbury Wheelock
IN CHITTENDEN COUNTY, STATE OF VERMONT:
Buels Gore Essex Milton
Burlington Huntington Underhill
Colchester Jericho Westford
IN ESSEX COUNTY, STATE OF VERMONT:
Concord Guildhall Victory
Granby Lunenburg
IN FRANKLIN COUNTY, STATE OF VERMONT:
Bakersfield Fletcher Richford
Berkshire Franklin Sheldon
Enosburg Georgia St. Albans City
Fairfax Highgate St. Albans Town
Fairfield Montgomery Swanton
IN LAMOILLE COUNTY, STATE OF VERMONT:
Belvidere Eden Johnson
Cambridge Hyde Park
IN ORANGE COUNTY, STATE OF VERMONT:
Bradford Fairlee Thetford
Braintree Newbury Tunbridge
Brookfield Randolph Vershire
Chelsea Strafford West Fairleee
IN ORLEANS COUNTY, STATE OF VERMONT:
Lowell Irasburg
IN RUTLAND COUNTY, STATE OF VERMONT:
Benson Middletown Springs Sherburne
Brandon Mt. Holly Shrewsbury
Castleton Mt. Tabor Sudbury
Chittenden Pawlet Tinmouth
Clarendon Pittsfield Wallingford
Danby Pittsford Wells
Fair Haven PoultneyWest Haven
Hubbardton Proctor West Rutland
Ira Rutland City
Mendon Rutland Town
IN WASHINGTON COUNTY, STATE OF VERMONT:
Northfield Roxbury
IN WINDHAM COUNTY, STATE OF VERMONT:
Athens Guilford Stratton
Brattleboro Jamaica Townshend
Brookline Londonderry Vernon
Dover Marlboro Wardsboro
Dummerston Newfane Westminster
Grafton Rockingham Windham
IN WINDSOR COUNTY, STATE OF VERMONT:
Andover Hartland Sharon
Baltimore Ludlow Springfield
Barnard Norwich Stockbridge
Bethel Plymouth Weathersfield
Bridgewater Pomfret Weston
Cavendish Reading West Windsor
Chester Rochester Windsor
Hartford Royalton Woodstock
<PAGE>
STATE OF VERMONT, COUNTY OF RUTLAND, ss.
On this 8th day of December, A.D. 1993, before me, a Notary Public in
and for said State, duly commissioned and acting as such, personally
came Robert H. Young, Executive Vice President and Agent of said
Central Vermont Public Service Corporation, to me personally known and
known to me to be one of the persons named in and who executed the
foregoing instrument, and who being duly sworn by me deposed and
said: that he resides in Rutland, Vermont; that he is Executive Vice
President of Central Vermont Public Service Corporation, the Corporation
described in and which executed the foregoing instrument as party of the
first part; that he knows the seal of said Corporation; that the seal
affixed
to said instrument is such corporate seal; that it was so affixed by order
of the Board of Directors of said Corporation, and that he signed his
name thereto by like order, and he acknowledged and declared that he
executed the foregoing instrument and affixed the seal of said Central
Vermont Public Service Corporation thereto as its Agent by authority of
the Board of Directors of said Corporation, and acknowledged the same
to be his free act and deed, and the free act and deed of said
Corporation.
WITNESS my hand and official seal the day and year aforesaid.
Patricia Mitiguy
Patricia Mitiguy, Notary Public
My commission expires February 10, 1995
(Notarial
Seal)
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS,
COUNTY OF SUFFOLK, SS.
On this 10th day of December, A.D. 1993, before me, a Notary Public in
and for said Commonwealth, duly commissioned and acting as such,
personally came James E. Mogavero, an Authorized Officer of The First
National Bank of Boston, to me known and known to me to be one of the
persons named in and who executed the foregoing instrument, and who
being duly sworn by me deposed and said: that he resides in Boston,
Massachusetts; that he is an Authorized Officer of The First National
Bank of Boston, the corporation described in and which executed the
foregoing instrument as party of the second part; that he knows the seal
of said Bank; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
Bank, and that he signed his name thereto by like authority, and he
acknowledged the same to be his free act and deed, and the free act
and deed of said Bank. And said James E. Mogavero, an Authorized
Officer of said The First National Bank of Boston, further acknowledged
that he accepted the trust hereinbefore created for, and on behalf of, said
The First National Bank of Boston, Trustee, upon the terms therein
named.
WITNESS my hand and official seal the day and year aforesaid.
Shawn P. George
Shawn P. George, Notary Public
My Commission Expires: 9/2/99
(Notarial
Seal)
<PAGE>
ENDORSEMENT.
The First National Bank of Boston, Trustee, being the mortgagee in the
foregoing Supplemental Indenture, hereby consents to the cutting of any
timber standing upon any of the lands covered by said Supplemental
Indenture and the Mortgage referred to in said Supplemental Indenture
and to the sale of any such timber so cut and of any personal property
covered by said Original Indenture and said Supplemental Indenture to
the extent, but only to the extent, that such sale is permitted under the
provisions of said Original Indenture.
Dated: Boston, Massachusetts, December 10, 1993.
THE FIRST NATIONAL BANK OF BOSTON,
BY James E. Mogavero
James E. Mogavero
Authorized Officer.
Signed, sealed and acknowledged on behalf
of The First National Bank of Boston in the presence
of:
Henry W. Seemore, Jr.
Henry W. Seemore, Jr.
Robert Dougherty
Robert Dougherty
(Corporate Seal)
<PAGE>
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
RESOLUTIONS ESTABLISHING
SERIES JJ, KK, LL, MM, NN and OO BONDS
AND MATTERS CONNECTED THEREWITH.
I, CAROLE L. ROOT, hereby certify that I am Assistant Secretary of
Central Vermont Public Service Corporation and that the following is a
true copy of the resolutions adopted at a duly convened meeting of the
Board of Directors of said Corporation held on December 7, 1993, at
which a quorum was present and acting throughout:
On motion duly made and seconded, the following resolutions relating to
the bonds of Series KK were unanimously passed:
Resolved: that this Board of Directors of Central
Vermont Public Service Corporation hereby determines upon a thirty-
sixth series of bonds to be issued from time to time upon proper
resolutions of the Board of Directors under the terms of an Indenture of
Mortgage between this Company and The First National Bank of Boston
(successor trustee to Old Colony Trust Company), Trustee, dated as of
October 1, 1929 (but actually executed October 24, 1929), as amended,
and duly recorded, among other places, in the Office of the City Clerk of
Rutland, Vermont, and in Washington County, New York, Liber 150 of
Mortgages, Page 51, Grafton County, New Hampshire, Registry of
Deeds, Liber 616, Folio 484, Sullivan County, New Hampshire, Records,
Vol. 234, Page 531, in the Office of the Secretary of State of
Connecticut, in the offices of the clerks of certain other towns and cities
in the State of Vermont, and in the office of the Secretary of State of
Vermont; that said series shall be designated as Series KK and that the
bonds of said series shall be designated as "First Mortgage 5.30%
Bonds, Series KK"; that said bonds shall be in the form of registered
bonds without coupons; that each of said bonds shall be dated as of the
date of the interest payment day thereof next preceding the date of
issue, to which interest has been paid, unless (a) issued on an interest
payment day, in which event it shall be dated as of the date of issue, or
(b) issued prior to the occurrence of any interest payment day thereof, in
which event it shall bear the date of its issue, except that bonds of
Series
KK issued prior to June 15, 1994 in exchange for other bonds of Series
KK shall be dated so that no gain or loss of interest shall result; each
bond of Series KK shall bear interest from the date thereof; said bonds
(subject to the provisions of said Indenture of Mortgage) to be limited in
express aggregate principal amount to $10,000,000, to bear interest from
the date thereof at the rate of 5.30% per annum, payable semiannually
on the fifteenth day of June and December in each year, until the
principal thereof becomes due and payable, and to bear interest on
overdue principal and (to the extent enforceable under applicable law) on
overdue installments of interest at the rate of 6.30% per annum, and to
mature December 15, 1998, to be substantially in the form to be
authorized at this meeting; said bonds to be in the denomination of
$1,000 and multiples thereof. Said bonds of Series KK may be
redeemed as a whole or in part in multiples of one thousand dollars at
any time or from time to time prior to maturity, upon the notice and in the
manner and with the effect provided in said Indenture of Mortgage and
particularly in Article V thereof, subject to the provisions of Sections 2, 4
and 5 of Article 1 of the Thirty-Eighth Supplemental Indenture to be
authorized at this meeting, or in connection with the application pursuant
to Article IX of said Indenture of Mortgage of moneys received by the
Trustee as proceeds of released property or of property taken by the
power of eminent domain or as insurance money, any such redemption
to be made at the applicable percentages of the principal amounts
thereof specified in the forms of the definitive Series KK bonds to be
authorized at this meeting, together in each case with accrued and
unpaid interest to the date of redemption; provided, however, that said
bonds of Series KK shall not be redeemed at the option of the Company
on or before December 15, 1994, and said bonds of Series KK shall be
subject and entitled to the benefits of optional redemption provisions as
set forth in said Supplemental Indenture and referred to in said form of
the bonds of Series KK, which optional redemption provisions are hereby
approved. Subject to the provisions of Section 6 of Article 1 of said
Supplemental Indenture the principal of the bonds of Series KK shall be
payable at the principal office of the Trustee in the City of Boston,
Massachusetts, or its successor in trust under said Indenture of
Mortgage, in coin or currency of the United States of America which at
the time of payment is legal tender for public and private debts; and
subject to the provisions of Section 6 of Article 1 of said Supplemental
Indenture the interest on the bonds of Series KK shall be payable in like
coin or currency at the office or agency of this Company in the City of
Boston, Massachusetts, or, at the option of the holders, in the Borough of
Manhattan, City and State of New York.
Resolved: that this Board hereby approves the following
forms of registered bonds without coupons of Series KK, subject to such
changes, insertions and omissions in each, not substantially at variance
with said forms, as may be determined upon and approved by the
President or one of the Vice Presidents of this Company and approved
by the Trustee; and that the execution of said bonds by the President or
one of the Vice Presidents of this Company and the authentication
thereof by the Trustee shall be conclusive evidence that each so
executed is within the authority conveyed by this resolution:
(FORM OF REGISTERED BOND WITHOUT COUPONS OF SERIES
KK)
No. RKK-- $
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
FIRST MORTGAGE 5.30% BOND
SERIES KK
Due December 15, 1998
CENTRAL VERMONT PUBLIC SERVICE CORPORATION, a Vermont
corporation (hereinafter called the Company), for value received, hereby
promises to pay to
or registered assigns, the sum of DOLLARS on the
fifteenth day of December, 1998, and to pay to the registered holder
interest on said sum from the date hereof, at the rate of 5.30% per
annum, payable semiannually on the fifteenth day of June and December
in each year, until the principal hereof becomes due and payable, and at
the rate of 6.30% per annum on any overdue principal and (to the extent
enforceable under applicable law) on any overdue installment of interest.
The principal of this bond shall be payable at the principal office of The
First National Bank of Boston in the City of Boston, Massachusetts, or its
successor in trust under the Indenture of Mortgage hereinafter referred
to, in coin or currency of the United States of America which, at the time
of payment, is legal tender for public and private debts, and the interest
on this bond shall be payable, in like coin or currency, at the office or
agency of the Company in the City of Boston, Massachusetts or, at the
option of the registered holder, in the Borough of Manhattan, City and
State of New York.
This bond is one of the bonds issued and to be issued from time to time
under and in accordance with, and, irrespective of the designation
thereof or of the series in which issued, all equally secured by, an
Indenture of Mortgage or Deed of Trust dated as of October 1, 1929
(hereinafter as supplemented, modified and confirmed by thirty-eight
supplemental indentures, counterparts of which are on file with the
Trustee, and by all other indentures supplemental to any or all thereof,
collectively called the "Mortgage"), and any and all such supplemental
indentures, between the Company and Old Colony Trust Company or
The First National Bank of Boston, as Trustee, to which Mortgage
reference is hereby made for a description of the property mortgaged
and pledged, the nature and extent of the security, the terms and
conditions upon which releases and other dispositions of the property
covered by the Mortgage may be made, and the rights of the holders of
said bonds and of the Trustee in respect of such security; but neither the
foregoing reference to the Mortgage nor any provision of this bond or of
the Mortgage shall affect or permit any impairment of the absolute,
unconditional and unalterable obligation of the Company to pay, at the
maturities herein provided, the principal of and premium (if any) and
interest on this bond as herein provided. By the terms of the Mortgage
the bonds to be secured thereby are issuable in series, which may vary
as to date, amount, date of maturity, rate of interest, and in other
respects as in the Mortgage provided.
The bonds of Series KK shall not be subject to redemption,
prepayment, purchase or other retirement prior to maturity except: (a) in
connection with the application pursuant to Article IX of the Mortgage of
moneys received by the Trustee as proceeds of released property or of
property taken by the power of eminent domain or as insurance money
(in connection with a redemption or purchase pursuant to said Article IX,
and upon the notice and in the manner and with the effect provided in
the Mortgage, the bonds of Series KK, of which this is one, may be
redeemed or purchased by the Company, subject to the limitations
contained in the Mortgage or any of the bonds of Series KK, at any time
and from time to time prior to maturity, as a whole or in part in the
principal amount of $1,000 or any integral multiple thereof, at a
redemption or purchase price of 100% of the principal amount of the
bonds of Series KK to be redeemed or purchased plus accrued interest
thereon to the date of redemption or purchase, together with a premium
equal to the Make-Whole Premium Amount (as defined in subsection
2(b) of Article 1 of the Supplemental Indenture dated as of December 10,
1993) with respect to the principal amount being redeemed or
purchased); or (b) at the option of the Company, and upon the notice
and in the manner and with the effect provided in the Mortgage, as a
whole or in part in the principal amount of $1,000 or any integral multiple
thereof at any time after December 15, 1994 and prior to December 15,
1998 at a redemption price of 100% of the principal amount of the bonds
of Series KK to be redeemed plus accrued and unpaid interest thereon to
the date of redemption, together with a premium equal to the Make-
Whole Premium Amount (as defined in subsection 2(b) of Article 1 of the
Supplemental Indenture dated as of December 10, 1993) with respect to
such principal amount then to be redeemed.
In case of certain events of default specified in the Mortgage, the
principal of this bond may be declared or may become due and payable
in the manner and with the effect provided in the Mortgage. No recourse
shall be had for the payment of the principal or interest of this bond, or
for any claim based hereon, or otherwise in respect hereof or of the
Mortgage, to or against any incorporator, stockholder, officer or director,
past, present or future, of the Company, either directly or through the
Company, under any constitution or statute or rule of law, or by the
enforcement of any assessment or penalty, or otherwise, all such liability
of incorporators, stockholders, directors and officers being waived and
released by the holder hereof by the acceptance of this bond and being
likewise waived and released by the terms of the Mortgage.
This bond is transferable by the registered holder hereof, in person or by
attorney duly authorized, at said office of the Trustee, upon surrender
and cancellation of this bond, and upon any such transfer a new
registered bond or bonds, without coupons, of the same series and
maturity date and for the same aggregate principal amount will be issued
to the transferee in exchange herefor.
This bond shall not be valid or become obligatory for any purpose unless
and until it shall have been authenticated by the execution by the Trustee
or its successor in trust under the Mortgage of the certificate endorsed
hereon.
IN WITNESS WHEREOF, Central Vermont Public Service Corporation
has caused this bond to be executed in its name by the manual or
facsimile signature of its President or one of its Vice Presidents, and its
corporate seal (or a facsimile thereof) to be hereto affixed and attested
by the manual or facsimile signature of its Secretary or one of its
Assistant Secretaries, this day of , 199 .
<PAGE>
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
By ______________________________________
President
Attest:
_____________________________
Secretary
(FORM OF ENDORSEMENT FOR ALL REGISTERED
SERIES KK BONDS)
FOR VALUE RECEIVED
hereby sell(s), assigns(s) and transfer(s) unto
, the within bond issued by Central Vermont Public
Service Corporation, and all rights thereunder, hereby irrevocably
constituting and appointing attorney to transfer said
bond on the books of said Company, with full power of substitution in the
premises.
Dated: ________________
_______________________________
In the presence of:
______________________________
NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within bond in every particular,
without alteration or enlargement or any change whatever.
THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD
IN CONTRAVENTION OF SUCH ACT.
(FORM OF TRUSTEE'S CERTIFICATE FOR ALL SERIES KK BONDS)
This bond is one of the bonds of the series designated therein, described
in the within-mentioned Mortgage.
THE FIRST NATIONAL BANK OF BOSTON,
Trustee
By ____________________________________
Authorized Officer
Resolved: that this Company's First Mortgage 5.30%
Bonds, Series KK, to be issued under said Indenture of Mortgage shall
be executed in the name of this Company by the manual or facsimile sig-
nature of its President or one of its Vice Presidents and shall have
affixed thereto the corporate seal of this Company (which may be
facsimile) attested by the manual or facsimile signature of its Secretary
or an Assistant Secretary.
Resolved: that, subject to obtaining the approval of the
Vermont Public Service Board, this Board hereby authorizes the issue of
$10,000,000 in principal amount of said First Mortgage 5.30% Bonds,
Series KK, which series have been determined upon and established at
this meeting, to be issued in respect of payment, cancellation,
redemption or discharge of an aggregate principal amount of $3,000,000
First Mortgage Bonds, Series P, $3,000,000 First Mortgage Bonds,
Series R, and $4,000,000 First Mortgage Bonds, Series S, pursuant to
and in conformity with the provisions of said Indenture of Mortgage, as
amended, particularly Section 2 of Article II thereof.
Resolved: that this Board of Directors hereby authorizes
The First National Bank of Boston, Trustee under said Indenture of
Mortgage, from time to time to authenticate, on application of the
President or any Vice President of this Company, and deliver on the
written order of the President or any Vice President $10,000,000 in
principal amount of said First Mortgage 5.30% Bonds, Series KK, in such
definitive forms and denominations authorized by resolutions of this
Board as he may specify, but only upon said The First National Bank of
Boston, Trustee, being satisfied that all the requirements of Article II of
said Indenture of Mortgage, as amended, relating to the issue of bonds
in respect of payment, cancellation, redemption or discharge of bonds
have been complied with and upon the deposit with the Trustee of the
documents required under said Article II.
Whereas, by Section 12 of Article III of the Indenture of
Mortgage of this Company to The First National Bank of Boston
(successor trustee to Old Colony Trust Company), Trustee, dated as of
October 1, 1929, this Company covenanted "that it will, upon reasonable
request, execute and deliver such further instruments and do such further
acts as may be necessary or proper to carry out more effectually the
purposes of this Mortgage, especially to make subject to the lien hereof
any property now owned or hereafter acquired by it, which it is herein
provided shall be subject to the lien hereof", and, by Section 1 of Article
XVI thereof, it is provided, among other things, that this Company and
the Trustee may enter into such indentures supplemental thereto as may
be deemed necessary or desirable "to assign, convey, confirm,
mortgage, pledge, transfer and set over unto the Trustee, subject to such
liens or other encumbrances as shall be therein specifically described,
additional property or properties of the Company, for the equal and
proportionate benefit and security, except as herein otherwise expressly
provided, of the holders and owners of all bonds at any time issued and
outstanding under this Mortgage", and "to add to the covenants or
agreements of the Company for the protection of the bondholders and of
the trust estate", and "to provide the terms and conditions of redemption
of the bonds, and/or for a special sinking fund for the retirement of the
bonds of any particular series then about to be issued", and "for any
other purpose not inconsistent with the terms of this Mortgage and which
shall not impair the security of the same",
NOW, THEREFORE, BE IT
Resolved: that this Board hereby approves the
Supplemental Indenture to be dated as of December 10, 1993, setting
forth the terms of the Company's First Mortgage 5.30% Bonds, Series
KK, and authorizes and directs the President or any Vice President of
this Company for the time being in office, each as such officer and as
agent of this Company, to execute and seal with the corporate seal of
this Company (which shall be attested by the Secretary or an Assistant
Secretary of this Company for the time being in office), and deliver to
The First National Bank of Boston, Trustee, a Thirty-Eighth Supplemental
Indenture to be dated as of December 10, 1993, substantially in the form
presented to this meeting, subject to such changes, insertions and
omissions as may be determined and approved by the President or Vice
President of this Company executing the same, that such determination
and approval are within the authority conveyed by this resolution to be
conclusively evidenced by the execution of said Supplemental Indenture
on behalf of this Company and such execution being a sufficient
identification thereof for all purposes as the Supplemental Indenture
hereby authorized.
Resolved: that this Company hereby appoints The First
National Bank of Boston, a national banking association having its
principal office in the City of Boston, as the Boston paying agent of this
Company for the purpose of paying the interest on this Company's First
Mortgage 5.30% Bonds, Series KK, to be issued under and secured by
the Indenture of Mortgage dated as of October 1, 1929 (but actually
executed October 24, 1929), as amended and supplemented, made and
entered into by and between this Company and said The First National
Bank of Boston as Trustee, and hereby designates the principal office of
said The First National Bank of Boston as the office or agency of this
Company in Boston, Massachusetts, at which payment may be made to
or upon the written order of the holders of the registered bonds of Series
KK.
On motion duly made and seconded, the following resolutions relating to
the bonds of Series LL were unanimously passed:
Resolved: that this Board of Directors of Central
Vermont Public Service Corporation hereby determines upon a thirty-
seventh series of bonds to be issued from time to time upon proper
resolutions of the Board of Directors under the terms of an Indenture of
Mortgage between this Company and The First National Bank of Boston
(successor trustee to Old Colony Trust Company), Trustee, dated as of
October 1, 1929 (but actually executed October 24, 1929), as amended,
and duly recorded, among other places, in the Office of the City Clerk of
Rutland, Vermont, and in Washington County, New York, Liber 150 of
Mortgages, Page 51, Grafton County, New Hampshire, Registry of
Deeds, Liber 616, Folio 484, Sullivan County, New Hampshire, Records,
Vol. 234, Page 531, in the Office of the Secretary of State of
Connecticut, in the offices of the clerks of certain other towns and cities
in the State of Vermont, and in the office of the Secretary of State of
Vermont; that said series shall be designated as Series LL and that the
bonds of said series shall be designated as "First Mortgage 5.54%
Bonds, Series LL"; that said bonds shall be in the form of registered
bonds without coupons; that each of said bonds shall be dated as of the
date of the interest payment day thereof next preceding the date of
issue, to which interest has been paid, unless (a) issued on an interest
payment day, in which event it shall be dated as of the date of issue, or
(b) issued prior to the occurrence of any interest payment day thereof, in
which event it shall bear the date of its issue, except that bonds of Series
LL issued prior to June 15, 1994 in exchange for other bonds of Series
LL shall be dated so that no gain or loss of interest shall result; each
bond of Series LL shall bear interest from the date thereof; said bonds
(subject to the provisions of said Indenture of Mortgage) to be limited in
express aggregate principal amount to $5,000,000, to bear interest from
the date thereof at the rate of 5.54% per annum, payable semiannually
on the fifteenth day of June and December in each year, until the
principal thereof becomes due and payable, and to bear interest on
overdue principal and (to the extent enforceable under applicable law) on
overdue installments of interest at the rate of 6.54% per annum, and to
mature December 15, 2000, to be substantially in the form to be
authorized at this meeting; said bonds to be in the denomination of
$1,000 and multiples thereof. Said bonds of Series LL may be
redeemed as a whole or in part in multiples of one thousand dollars at
any time or from time to time prior to maturity, upon the notice and in the
manner and with the effect provided in said Indenture of Mortgage and
particularly in Article V thereof, subject to the provisions of Sections 2, 4
and 5 of Article 1 of the Thirty-Eighth Supplemental Indenture to be
authorized at this meeting, or in connection with the application pursuant
to Article IX of said Indenture of Mortgage of moneys received by the
Trustee as proceeds of released property or of property taken by the
power of eminent domain or as insurance money, any such redemption
to be made at the applicable percentages of the principal amounts
thereof specified in the forms of the definitive Series LL bonds to be
authorized at this meeting, together in each case with accrued and
unpaid interest to the date of redemption; provided, however, that said
bonds of Series LL shall not be redeemed at the option of the Company
on or before December 15, 1994, and said bonds of Series LL shall be
subject and entitled to the benefits of optional redemption provisions as
set forth in said Supplemental Indenture and referred to in said form of
the bonds of Series LL, which optional redemption provisions are hereby
approved. Subject to the provisions of Section 6 of Article 1 of said
Supplemental Indenture the principal of the bonds of Series LL shall be
payable at the principal office of the Trustee in the City of Boston,
Massachusetts, or its successor in trust under said Indenture of
Mortgage, in coin or currency of the United States of America which at
the time of payment is legal tender for public and private debts; and
subject to the provisions of Section 6 of Article 1 of said Supplemental
Indenture the interest on the bonds of Series LL shall be payable in like
coin or currency at the office or agency of this Company in the City of
Boston, Massachusetts, or, at the option of the holders, in the Borough of
Manhattan, City and State of New York.
Resolved: that this Board hereby approves the following
forms of registered bonds without coupons of Series LL, subject to such
changes, insertions and omissions in each, not substantially at variance
with said forms, as may be determined upon and approved by the
President or one of the Vice Presidents of this Company and approved
by the Trustee; and that the execution of said bonds by the President or
one of the Vice Presidents of this Company and the authentication
thereof by the Trustee shall be conclusive evidence that each so
executed is within the authority conveyed by this resolution:
(FORM OF REGISTERED BOND WITHOUT COUPONS OF SERIES LL)
No. RLL-- $
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
FIRST MORTGAGE 5.54% BOND
SERIES LL
Due December 15, 2000
CENTRAL VERMONT PUBLIC SERVICE CORPORATION, a Vermont
corporation (hereinafter called the Company), for value received, hereby
promises to pay to or registered assigns, the sum of DOLLARS on the
fifteenth day of December, 2000, and to pay to the registered holder
interest on said sum from the date hereof, at the rate of 5.54% per
annum, payable semiannually on the fifteenth day of June and December
in each year, until the principal hereof becomes due and payable, and at
the rate of 6.54% per annum on any overdue principal and (to the extent
enforceable under applicable law) on any overdue installment of interest.
The principal of this bond shall be payable at the principal office of The
First National Bank of Boston in the City of Boston, Massachusetts, or its
successor in trust under the Indenture of Mortgage hereinafter referred
to, in coin or currency of the United States of America which, at the time
of payment, is legal tender for public and private debts, and the interest
on this bond shall be payable, in like coin or currency, at the office or
agency of the Company in the City of Boston, Massachusetts or, at the
option of the registered holder, in the Borough of Manhattan, City and
State of New York.
This bond is one of the bonds issued and to be issued from time to time
under and in accordance with, and, irrespective of the designation
thereof or of the series in which issued, all equally secured by, an
Indenture of Mortgage or Deed of Trust dated as of October 1, 1929
(hereinafter as supplemented, modified and confirmed by thirty-eight
supplemental indentures, counterparts of which are on file with the
Trustee, and by all other indentures supplemental to any or all thereof,
collectively called the "Mortgage"), and any and all such supplemental
indentures, between the Company and Old Colony Trust Company or
The First National Bank of Boston, as Trustee, to which Mortgage
reference is hereby made for a description of the property mortgaged
and pledged, the nature and extent of the security, the terms and
conditions upon which releases and other dispositions of the property
covered by the Mortgage may be made, and the rights of the holders of
said bonds and of the Trustee in respect of such security; but neither the
foregoing reference to the Mortgage nor any provision of this bond or of
the Mortgage shall affect or permit any impairment of the absolute,
unconditional and unalterable obligation of the Company to pay, at the
maturities herein provided, the principal of and premium (if any) and
interest on this bond as herein provided. By the terms of the Mortgage
the bonds to be secured thereby are issuable in series, which may vary
as to date, amount, date of maturity, rate of interest, and in other
respects as in the Mortgage provided.
The bonds of Series LL shall not be subject to redemption, prepayment,
purchase or other retirement prior to maturity except: (a) in connection
with the application pursuant to Article IX of the Mortgage of moneys
received by the Trustee as proceeds of released property or of property
taken by the power of eminent domain or as insurance money (in
connection with a redemption or purchase pursuant to said Article IX,
and upon the notice and in the manner and with the effect provided in
the Mortgage, the bonds of Series LL, of which this is one, may be
redeemed or purchased by the Company, subject to the limitations
contained in the Mortgage or any of the bonds of Series LL, at any time
and from time to time prior to maturity, as a whole or in part in the
principal amount of $1,000 or any integral multiple thereof, at a
redemption or purchase price of 100% of the principal amount of the
bonds of Series LL to be redeemed or purchased plus accrued interest
thereon to the date of redemption or purchase, together with a premium
equal to the Make-Whole Premium Amount (as defined in subsection 2(c)
of Article 1 of the Supplemental Indenture dated as of December 10,
1993) with respect to the principal amount being redeemed or
purchased); or (b) at the option of the Company, and upon the notice
and in the manner and with the effect provided in the Mortgage, as a
whole or in part in the principal amount of $1,000 or any integral multiple
thereof at any time after December 15, 1994 and prior to December 15,
2000 at a redemption price of 100% of the principal amount of the bonds
of Series LL to be redeemed plus accrued and unpaid interest thereon to
the date of redemption, together with a premium equal to the Make-
Whole Premium Amount (as defined in subsection 2(c) of Article 1 of the
Supplemental Indenture dated as of December 10, 1993) with respect to
such principal amount then to be redeemed.
In case of certain events of default specified in the Mortgage, the
principal of this bond may be declared or may become due and payable
in the manner and with the effect provided in the Mortgage. No recourse
shall be had for the payment of the principal or interest of this bond, or
for any claim based hereon, or otherwise in respect hereof or of the
Mortgage, to or against any incorporator, stockholder, officer or director,
past, present or future, of the Company, either directly or through the
Company, under any constitution or statute or rule of law, or by the
enforcement of any assessment or penalty, or otherwise, all such liability
of incorporators, stockholders, directors and officers being waived and
released by the holder hereof by the acceptance of this bond and being
likewise waived and released by the terms of the Mortgage.
This bond is transferable by the registered holder hereof, in person or by
attorney duly authorized, at said office of the Trustee, upon surrender
and cancellation of this bond, and upon any such transfer a new
registered bond or bonds, without coupons, of the same series and
maturity date and for the same aggregate principal amount will be issued
to the transferee in exchange herefor.
This bond shall not be valid or become obligatory for any purpose unless
and until it shall have been authenticated by the execution by the Trustee
or its successor in trust under the Mortgage of the certificate endorsed
hereon.
IN WITNESS WHEREOF, Central Vermont Public Service Corporation
has caused this bond to be executed in its name by the manual or
facsimile signature of its President or one of its Vice Presidents, and its
corporate seal (or a facsimile thereof) to be hereto affixed and attested
by the manual or facsimile signature of its Secretary or one of its
Assistant Secretaries, this day of , 199 .
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
By ______________________________________
President
Attest:
_____________________________
Secretary
(FORM OF ENDORSEMENT FOR ALL REGISTERED
SERIES LL BONDS)
FOR VALUE RECEIVED
hereby sell(s), assigns(s) and transfer(s) unto
, the within bond issued by Central Vermont Public
Service Corporation, and all rights thereunder, hereby irrevocably
constituting and appointing attorney to transfer said bond on the
books of said Company, with full power of substitution in the premises.
Dated: ________________
_______________________________
In the presence of:
_____________________________
NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within bond in every particular,
without alteration or enlargement or any change whatever.
THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD
IN CONTRAVENTION OF SUCH ACT.
(FORM OF TRUSTEE'S CERTIFICATE FOR ALL SERIES LL BONDS)
This bond is one of the bonds of the series designated therein, described
in the within-mentioned Mortgage.
THE FIRST NATIONAL BANK OF BOSTON,
Trustee
By ____________________________________
Authorized Officer
Resolved: that this Company's First Mortgage 5.54%
Bonds, Series LL, to be issued under said Indenture of Mortgage shall be
executed in the name of this Company by the manual or facsimile sig-
nature of its President or one of its Vice Presidents and shall have
affixed thereto the corporate seal of this Company (which may be
facsimile) attested by the manual or facsimile signature of its Secretary
or an Assistant Secretary.
Resolved: that, subject to obtaining the approval of the
Vermont Public Service Board, this Board hereby authorizes the issue of
$5,000,000 in principal amount of said First Mortgage 5.54% Bonds,
Series LL, which series have been determined upon and established at
this meeting, to be issued in respect of payment, cancellation,
redemption or discharge of an aggregate principal amount of $1,000,000
First Mortgage Bonds, Series S and $3,500,000 First Mortgage Bonds,
Series Y and in respect of extensions and purchased property, pursuant
to and in conformity with the provisions of said Indenture of Mortgage, as
amended, particularly Sections 2 and 4 of Article II thereof.
Resolved: that this Board of Directors hereby authorizes
The First National Bank of Boston, Trustee under said Indenture of
Mortgage, from time to time to authenticate, on application of the
President or any Vice President of this Company, and deliver on the
written order of the President or any Vice President $5,000,000 in
principal amount of said First Mortgage 5.54% Bonds, Series LL, in such
definitive forms and denominations authorized by resolutions of this
Board as he may specify, but only upon said The First National Bank of
Boston, Trustee, being satisfied that all the requirements of Article II of
said Indenture of Mortgage, as amended, relating to the issue of bonds
in respect of payment, cancellation, redemption or discharge of bonds
and in respect of extensions and purchased property have been
complied with and upon the deposit with the Trustee of the documents
required under said Article II.
Whereas, by Section 12 of Article III of the Indenture
of Mortgage of this Company to The First National Bank of Boston
(successor trustee to Old Colony Trust Company), Trustee, dated as of
October 1, 1929, this Company covenanted "that it will, upon reasonable
request, execute and deliver such further instruments and do such further
acts as may be necessary or proper to carry out more effectually the
purposes of this Mortgage, especially to make subject to the lien hereof
any property now owned or hereafter acquired by it, which it is herein
provided shall be subject to the lien hereof", and, by Section 1 of Article
XVI thereof, it is provided, among other things, that this Company and
the Trustee may enter into such indentures supplemental thereto as may
be deemed necessary or desirable "to assign, convey, confirm,
mortgage, pledge, transfer and set over unto the Trustee, subject to such
liens or other encumbrances as shall be therein specifically described,
additional property or properties of the Company, for the equal and
proportionate benefit and security, except as herein otherwise expressly
provided, of the holders and owners of all bonds at any time issued and
outstanding under this Mortgage", and "to add to the covenants or
agreements of the Company for the protection of the bondholders and of
the trust estate", and "to provide the terms and conditions of redemption
of the bonds, and/or for a special sinking fund for the retirement of the
bonds of any particular series then about to be issued", and "for any
other purpose not inconsistent with the terms of this Mortgage and which
shall not impair the security of the same,
NOW, THEREFORE, BE IT
Resolved: that this Board hereby approves the
Supplemental Indenture to be dated as of December 10, 1993, setting
forth the terms of the Company's First Mortgage 5.54% Bonds, Series
LL, and authorizes and directs the President or any Vice President of this
Company for the time being in office, each as such officer and as agent
of this Company, to execute and seal with the corporate seal of this
Company (which shall be attested by the Secretary or an Assistant
Secretary of this Company for the time being in office), and deliver to
The First National Bank of Boston, Trustee, a Thirty-Eighth Supplemental
Indenture to be dated as of December 10, 1993, substantially in the form
presented to this meeting, subject to such changes, insertions and
omissions as may be determined and approved by the President or Vice
President of this Company executing the same, that such determination
and approval are within the authority conveyed by this resolution to be
conclusively evidenced by the execution of said Supplemental Indenture
on behalf of this Company and such execution being a sufficient
identification thereof for all purposes as the Supplemental Indenture
hereby authorized.
Resolved: that this Company hereby appoints The First
National Bank of Boston, a national banking association having its
principal office in the City of Boston, as the Boston paying agent of this
Company for the purpose of paying the interest on this Company's First
Mortgage 5.54% Bonds, Series LL, to be issued under and secured by
the Indenture of Mortgage dated as of October 1, 1929 (but actually
executed October 24, 1929), as amended and supplemented, made and
entered into by and between this Company and said The First National
Bank of Boston as Trustee, and hereby designates the principal office of
said The First National Bank of Boston as the office or agency of this
Company in Boston, Massachusetts, at which payment may be made to
or upon the written order of the holders of the registered bonds of Series
LL.
On motion duly made and seconded, the following resolutions relating to
the bonds of Series MM were unanimously passed:
Resolved: that this Board of Directors of Central
Vermont Public Service Corporation hereby determines upon a thirty-
eighth series of bonds to be issued from time to time upon proper
resolutions of the Board of Directors under the terms of an Indenture of
Mortgage between this Company and The First National Bank of Boston
(successor trustee to Old Colony Trust Company), Trustee, dated as of
October 1, 1929 (but actually executed October 24, 1929), as amended,
and duly recorded, among other places, in the Office of the City Clerk of
Rutland, Vermont, and in Washington County, New York, Liber 150 of
Mortgages, Page 51, Grafton County, New Hampshire, Registry of
Deeds, Liber 616, Folio 484, Sullivan County, New Hampshire, Records,
Vol. 234, Page 531, in the Office of the Secretary of State of
Connecticut, in the offices of the clerks of certain other towns and cities
in the State of Vermont, and in the office of the Secretary of State of
Vermont; that said series shall be designated as Series MM and that the
bonds of said series shall be designated as "First Mortgage 6.01%
Bonds, Series MM"; that said bonds shall be in the form of registered
bonds without coupons; that each of said bonds shall be dated as of the
date of the interest payment day thereof next preceding the date of
issue, to which interest has been paid, unless (a) issued on an interest
payment day, in which event it shall be dated as of the date of issue, or
(b) issued prior to the occurrence of any interest payment day thereof, in
which event it shall bear the date of its issue, except that bonds of Series
MM issued prior to June 15, 1994 in exchange for other bonds of Series
MM shall be dated so that no gain or loss of interest shall result; each
bond of Series MM shall bear interest from the date thereof; said bonds
(subject to the provisions of said Indenture of Mortgage) to be limited in
express aggregate principal amount to $7,500,000, to bear interest from
the date thereof at the rate of 6.01% per annum, payable semiannually
on the fifteenth day of June and December in each year, until the
principal thereof becomes due and payable, and to bear interest on
overdue principal and (to the extent enforceable under applicable law) on
overdue installments of interest at the rate of 7.01% per annum, and to
mature December 15, 2003, to be substantially in the form to be
authorized at this meeting; said bonds to be in the denomination of
$1,000 and multiples thereof. Said bonds of Series MM may be
redeemed as a whole or in part in multiples of one thousand dollars at
any time or from time to time prior to maturity, upon the notice and in the
manner and with the effect provided in said Indenture of Mortgage and
particularly in Article V thereof, subject to the provisions of Sections 2, 4
and 5 of Article 1 of the Thirty-Eighth Supplemental Indenture to be
authorized at this meeting, or in connection with the application pursuant
to Article IX of said Indenture of Mortgage of moneys received by the
Trustee as proceeds of released property or of property taken by the
power of eminent domain or as insurance money, any such redemption
to be made at the applicable percentages of the principal amounts
thereof specified in the forms of the definitive Series MM bonds to be
authorized at this meeting, together in each case with accrued and
unpaid interest to the date of redemption; provided, however, that said
bonds of Series MM shall not be redeemed at the option of the Company
on or before December 15, 1994, and said bonds of Series MM shall be
subject and entitled to the benefits of optional redemption provisions as
set forth in said Supplemental Indenture and referred to in said form of
the bonds of Series MM, which optional redemption provisions are
hereby approved. Subject to the provisions of Section 6 of Article 1 of
said Supplemental Indenture the principal of the bonds of Series MM
shall be payable at the principal office of the Trustee in the City of
Boston, Massachusetts, or its successor in trust under said Indenture of
Mortgage, in coin or currency of the United States of America which at
the time of payment is legal tender for public and private debts; and
subject to the provisions of Section 6 of Article 1 of said Supplemental
Indenture the interest on the bonds of Series MM shall be payable in like
coin or currency at the office or agency of this Company in the City of
Boston, Massachusetts, or, at the option of the holders, in the Borough of
Manhattan, City and State of New York.
Resolved: that this Board hereby approves the following
forms of registered bonds without coupons of Series MM, subject to such
changes, insertions and omissions in each, not substantially at variance
with said forms, as may be determined upon and approved by the
President or one of the Vice Presidents of this Company and approved
by the Trustee; and that the execution of said bonds by the President or
one of the Vice Presidents of this Company and the authentication
thereof by the Trustee shall be conclusive evidence that each so
executed is within the authority conveyed by this resolution:
(FORM OF REGISTERED BOND WITHOUT COUPONS OF SERIES
MM)
No. RMM-- $
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
FIRST MORTGAGE 6.01% BOND
SERIES MM
Due December 15, 2003
CENTRAL VERMONT PUBLIC SERVICE CORPORATION, a Vermont
corporation (hereinafter called the Company), for value received, hereby
promises to pay to
or registered assigns, the sum of DOLLARS on the
fifteenth day of December, 2003, and to pay to the registered holder
interest on said sum from the date hereof, at the rate of 6.01% per
annum, payable semiannually on the fifteenth day of June and December
in each year, until the principal hereof becomes due and payable, and at
the rate of 7.01% per annum on any overdue principal and (to the extent
enforceable under applicable law) on any overdue installment of interest.
The principal of this bond shall be payable at the principal office of The
First National Bank of Boston in the City of Boston, Massachusetts, or its
successor in trust under the Indenture of Mortgage hereinafter referred
to, in coin or currency of the United States of America which, at the time
of payment, is legal tender for public and private debts, and the interest
on this bond shall be payable, in like coin or currency, at the office or
agency of the Company in the City of Boston, Massachusetts or, at the
option of the registered holder, in the Borough of Manhattan, City and
State of New York.
This bond is one of the bonds issued and to be issued from time to time
under and in accordance with, and, irrespective of the designation
thereof or of the series in which issued, all equally secured by, an
Indenture of Mortgage or Deed of Trust dated as of October 1, 1929
(hereinafter as supplemented, modified and confirmed by thirty-eight
supplemental indentures, counterparts of which are on file with the
Trustee, and by all other indentures supplemental to any or all thereof,
collectively called the "Mortgage"), and any and all such supplemental
indentures, between the Company and Old Colony Trust Company or
The First National Bank of Boston, as Trustee, to which Mortgage
reference is hereby made for a description of the property mortgaged
and pledged, the nature and extent of the security, the terms and
conditions upon which releases and other dispositions of the property
covered by the Mortgage may be made, and the rights of the holders of
said bonds and of the Trustee in respect of such security; but neither the
foregoing reference to the Mortgage nor any provision of this bond or of
the Mortgage shall affect or permit any impairment of the absolute,
unconditional and unalterable obligation of the Company to pay, at the
maturities herein provided, the principal of and premium (if any) and
interest on this bond as herein provided. By the terms of the Mortgage
the bonds to be secured thereby are issuable in series, which may vary
as to date, amount, date of maturity, rate of interest, and in other
respects as in the Mortgage provided.
The bonds of Series MM shall not be subject to redemption, prepayment,
purchase or other retirement prior to maturity except: (a) in connection
with the application pursuant to Article IX of the Mortgage of moneys
received by the Trustee as proceeds of released property or of property
taken by the power of eminent domain or as insurance money (in
connection with a redemption or purchase pursuant to said Article IX,
and upon the notice and in the manner and with the effect provided in
the Mortgage, the bonds of Series MM, of which this is one, may be
redeemed or purchased by the Company, subject to the limitations
contained in the Mortgage or any of the bonds of Series MM, at any time
and from time to time prior to maturity, as a whole or in part in the
principal amount of $1,000 or any integral multiple thereof, at a
redemption or purchase price of 100% of the principal amount of the
bonds of Series MM to be redeemed or purchased plus accrued interest
thereon to the date of redemption or purchase, together with a premium
equal to the Make-Whole Premium Amount (as defined in subsection
2(d) of Article 1 of the Supplemental Indenture dated as of December 10,
1993) with respect to the principal amount being redeemed or
purchased); or (b) at the option of the Company, and upon the notice
and in the manner and with the effect provided in the Mortgage, as a
whole or in part in the principal amount of $1,000 or any integral multiple
thereof at any time after December 15, 1994 and prior to December 15,
2003 at a redemption price of 100% of the principal amount of the bonds
of Series MM to be redeemed plus accrued and unpaid interest thereon
to the date of redemption, together with a premium equal to the Make-
Whole Premium Amount (as defined in subsection 2(d) of Article 1 of the
Supplemental Indenture dated as of December 10, 1993) with respect to
such principal amount then to be redeemed.
In case of certain events of default specified in the Mortgage, the
principal of this bond may be declared or may become due and payable
in the manner and with the effect provided in the Mortgage. No recourse
shall be had for the payment of the principal or interest of this bond, or
for any claim based hereon, or otherwise in respect hereof or of the
Mortgage, to or against any incorporator, stockholder, officer or director,
past, present or future, of the Company, either directly or through the
Company, under any constitution or statute or rule of law, or by the
enforcement of any assessment or penalty, or otherwise, all such liability
of incorporators, stockholders, directors and officers being waived and
released by the holder hereof by the acceptance of this bond and being
likewise waived and released by the terms of the Mortgage.
This bond is transferable by the registered holder hereof, in person or by
attorney duly authorized, at said office of the Trustee, upon surrender
and cancellation of this bond, and upon any such transfer a new
registered bond or bonds, without coupons, of the same series and
maturity date and for the same aggregate principal amount will be issued
to the transferee in exchange herefor.
This bond shall not be valid or become obligatory for any purpose unless
and until it shall have been authenticated by the execution by the Trustee
or its successor in trust under the Mortgage of the certificate endorsed
hereon.
IN WITNESS WHEREOF, Central Vermont Public Service Corporation
has caused this bond to be executed in its name by the manual or
facsimile signature of its President or one of its Vice Presidents, and its
corporate seal (or a facsimile thereof) to be hereto affixed and attested
by the manual or facsimile signature of its Secretary or one of its
Assistant Secretaries, this day of , 199 .
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
By ______________________________________
President
Attest:
_____________________________
Secretary
(FORM OF ENDORSEMENT FOR ALL REGISTERED SERIES MM
BONDS)
FOR VALUE RECEIVED
hereby sell(s), assigns(s) and transfer(s) unto
, the within bond issued by Central Vermont Public
Service Corporation, and all rights thereunder, hereby irrevocably
constituting and appointing attorney to transfer said bond
on the books of said Company, with full power of substitution in the
premises.
Dated: _______________
________________________________
In the presence of:
______________________________
NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within bond in every particular,
without alteration or enlargement or any change whatever.
THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD
IN CONTRAVENTION OF SUCH ACT.
(FORM OF TRUSTEE'S CERTIFICATE FOR ALL SERIES MM BONDS)
This bond is one of the bonds of the series designated therein, described
in the within-mentioned Mortgage.
THE FIRST NATIONAL BANK OF BOSTON,
Trustee
By ________________________________
Authorized Officer
Resolved: that this Company's First Mortgage 6.01%
Bonds, Series MM, to be issued under said Indenture of Mortgage shall
be executed in the name of this Company by the manual or facsimile sig-
nature of its President or one of its Vice Presidents and shall have
affixed thereto the corporate seal of this Company (which may be
facsimile) attested by the manual or facsimile signature of its Secretary
or an Assistant Secretary.
Resolved: that, subject to obtaining the approval of the
Vermont Public Service Board, this Board hereby authorizes the issue of
$7,500,000 in principal amount of said First Mortgage 6.01% Bonds,
Series MM, which series have been determined upon and established at
this meeting, to be issued in respect of extensions and purchased
property, pursuant to and in conformity with the provisions of said
Indenture of Mortgage, as amended, particularly Section 4 of Article II
thereof.
Resolved: that this Board of Directors hereby authorizes
The First National Bank of Boston, Trustee under said Indenture of
Mortgage, from time to time to authenticate, on application of the
President or any Vice President of this Company, and deliver on the
written order of the President or any Vice President $7,500,000 in
principal amount of said First Mortgage 6.01% Bonds, Series MM, in
such definitive forms and denominations authorized by resolutions of this
Board as he may specify, but only upon said The First National Bank of
Boston, Trustee, being satisfied that all the requirements of Article II of
said Indenture of Mortgage, as amended, relating to the issue of bonds
in respect of extensions and purchased property have been complied
with and upon the deposit with the Trustee of the documents required
under said Article II.
Whereas, by Section 12 of Article III of the Indenture of
Mortgage of this Company to The First National Bank of Boston
(successor trustee to Old Colony Trust Company), Trustee, dated as of
October 1, 1929, this Company covenanted "that it will, upon reasonable
request, execute and deliver such further instruments and do such further
acts as may be necessary or proper to carry out more effectually the
purposes of this Mortgage, especially to make subject to the lien hereof
any property now owned or hereafter acquired by it, which it is herein
provided shall be subject to the lien hereof", and, by Section 1 of Article
XVI thereof, it is provided, among other things, that this Company and
the Trustee may enter into such indentures supplemental thereto as may
be deemed necessary or desirable "to assign, convey, confirm,
mortgage, pledge, transfer and set over unto the Trustee, subject to such
liens or other encumbrances as shall be therein specifically described,
additional property or properties of the Company, for the equal and
proportionate benefit and security, except as herein otherwise expressly
provided, of the holders and owners of all bonds at any time issued and
outstanding under this Mortgage", and "to add to the covenants or
agreements of the Company for the protection of the bondholders and of
the trust estate", and "to provide the terms and conditions of redemption
of the bonds, and/or for a special sinking fund for the retirement of the
bonds of any particular series then about to be issued", and "for any
other purpose not inconsistent with the terms of this Mortgage and which
shall not impair the security of the same",
NOW, THEREFORE, BE IT
Resolved: that this Board hereby approves the
Supplemental Indenture to be dated as of December 10, 1993, setting
forth the terms of the Company's First Mortgage 6.01% Bonds, Series
MM, and authorizes and directs the President or any Vice President of
this Company for the time being in office, each as such officer and as
agent of this Company, to execute and seal with the corporate seal of
this Company (which shall be attested by the Secretary or an Assistant
Secretary of this Company for the time being in office), and deliver to
The First National Bank of Boston, Trustee, a Thirty-Eighth Supplemental
Indenture to be dated as of December 10, 1993, substantially in the form
presented to this meeting, subject to such changes, insertions and
omissions as may be determined and approved by the President or Vice
President of this Company executing the same, that such determination
and approval are within the authority conveyed by this resolution to be
conclusively evidenced by the execution of said Supplemental Indenture
on behalf of this Company and such execution being a sufficient
identification thereof for all purposes as the Supplemental Indenture
hereby authorized.
Resolved: that this Company hereby appoints The First
National Bank of Boston, a national banking association having its
principal office in the City of Boston, as the Boston paying agent of this
Company for the purpose of paying the interest on this Company's First
Mortgage 6.01% Bonds, Series MM, to be issued under and secured by
the Indenture of Mortgage dated as of October 1, 1929 (but actually
executed October 24, 1929), as amended and supplemented, made and
entered into by and between this Company and said The First National
Bank of Boston as Trustee, and hereby designates the principal office of
said The First National Bank of Boston as the office or agency of this
Company in Boston, Massachusetts, at which payment may be made to
or upon the written order of the holders of the registered bonds of Series
MM.
On motion duly made and seconded, the following resolutions relating to
the bonds of Series NN were unanimously passed:
Resolved: that this Board of Directors of Central
Vermont Public Service Corporation hereby determines upon a thirty-
ninth series of bonds to be issued from time to time upon proper
resolutions of the Board of Directors under the terms of an Indenture of
Mortgage between this Company and The First National Bank of Boston
(successor trustee to Old Colony Trust Company), Trustee, dated as of
October 1, 1929 (but actually executed October 24, 1929), as amended,
and duly recorded, among other places, in the Office of the City Clerk of
Rutland, Vermont, and in Washington County, New York, Liber 150 of
Mortgages, Page 51, Grafton County, New Hampshire, Registry of
Deeds, Liber 616, Folio 484, Sullivan County, New Hampshire, Records,
Vol. 234, Page 531, in the Office of the Secretary of State of
Connecticut, in the offices of the clerks of certain other towns and cities
in the State of Vermont, and in the office of the Secretary of State of
Vermont; that said series shall be designated as Series NN and that the
bonds of said series shall be designated as "First Mortgage 6.27%
Bonds, Series NN"; that said bonds shall be in the form of registered
bonds without coupons; that each of said bonds shall be dated as of the
date of the interest payment day thereof next preceding the date of
issue, to which interest has been paid, unless (a) issued on an interest
payment day, in which event it shall be dated as of the date of issue, or
(b) issued prior to the occurrence of any interest payment day thereof, in
which event it shall bear the date of its issue, except that bonds of Series
NN issued prior to June 15, 1994 in exchange for other bonds of Series
NN shall be dated so that no gain or loss of interest shall result; each
bond of Series NN shall bear interest from the date thereof; said bonds
(subject to the provisions of said Indenture of Mortgage) to be limited in
express aggregate principal amount to $3,000,000, to bear interest from
the date thereof at the rate of 6.27% per annum, payable semiannually
on the fifteenth day of June and December in each year, until the
principal thereof becomes due and payable, and to bear interest on
overdue principal and (to the extent enforceable under applicable law) on
overdue installments of interest at the rate of 7.27% per annum, and to
mature December 15, 2008, to be substantially in the form to be
authorized at this meeting; said bonds to be in the denomination of
$1,000 and multiples thereof. Said bonds of Series NN may be
redeemed as a whole or in part in multiples of one thousand dollars at
any time or from time to time prior to maturity, upon the notice and in the
manner and with the effect provided in said Indenture of Mortgage and
particularly in Article V thereof, subject to the provisions of Sections 2, 4
and 5 of Article 1 of the Thirty-Eighth Supplemental Indenture to be
authorized at this meeting, or in connection with the application pursuant
to Article IX of said Indenture of Mortgage of moneys received by the
Trustee as proceeds of released property or of property taken by the
power of eminent domain or as insurance money, any such redemption
to be made at the applicable percentages of the principal amounts
thereof specified in the forms of the definitive Series NN bonds to be
authorized at this meeting, together in each case with accrued and
unpaid interest to the date of redemption; provided, however, that said
bonds of Series NN shall not be redeemed at the option of the Company
on or before December 15, 1994, and said bonds of Series NN shall be
subject and entitled to the benefits of optional redemption provisions as
set forth in said Supplemental Indenture and referred to in said form of
the bonds of Series NN, which optional redemption provisions are hereby
approved. Subject to the provisions of Section 6 of Article 1 of said
Supplemental Indenture the principal of the bonds of Series NN shall be
payable at the principal office of the Trustee in the City of Boston,
Massachusetts, or its successor in trust under said Indenture of
Mortgage, in coin or currency of the United States of America which at
the time of payment is legal tender for public and private debts; and
subject to the provisions of Section 6 of Article 1 of said Supplemental
Indenture the interest on the bonds of Series NN shall be payable in like
coin or currency at the office or agency of this Company in the City of
Boston, Massachusetts, or, at the option of the holders, in the Borough of
Manhattan, City and State of New York.
Resolved: that this Board hereby approves the following
forms of registered bonds without coupons of Series NN, subject to such
changes, insertions and omissions in each, not substantially at variance
with said forms, as may be determined upon and approved by the
President or one of the Vice Presidents of this Company and approved
by the Trustee; and that the execution of said bonds by the President or
one of the Vice Presidents of this Company and the authentication
thereof by the Trustee shall be conclusive evidence that each so
executed is within the authority conveyed by this resolution:
(FORM OF REGISTERED BOND WITHOUT COUPONS OF SERIES NN)
No. RNN-- $
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
FIRST MORTGAGE 6.27% BOND
SERIES NN
Due December 15, 2008
CENTRAL VERMONT PUBLIC SERVICE CORPORATION, a Vermont
corporation (hereinafter called the Company), for value received, hereby
promises to pay to
or registered assigns, the sum of DOLLARS on the
fifteenth day of December, 2008, and to pay to the registered holder
interest on said sum from the date hereof, at the rate of 6.27% per
annum, payable semiannually on the fifteenth day of June and December
in each year, until the principal hereof becomes due and payable, and at
the rate of 7.27% per annum on any overdue principal and (to the extent
enforceable under applicable law) on any overdue installment of interest.
The principal of this bond shall be payable at the principal office of The
First National Bank of Boston in the City of Boston, Massachusetts, or its
successor in trust under the Indenture of Mortgage hereinafter referred
to, in coin or currency of the United States of America which, at the time
of payment, is legal tender for public and private debts, and the interest
on this bond shall be payable, in like coin or currency, at the office or
agency of the Company in the City of Boston, Massachusetts or, at the
option of the registered holder, in the Borough of Manhattan, City and
State of New York.
This bond is one of the bonds issued and to be issued from time to time
under and in accordance with, and, irrespective of the designation
thereof or of the series in which issued, all equally secured by, an
Indenture of Mortgage or Deed of Trust dated as of October 1, 1929
(hereinafter as supplemented, modified and confirmed by thirty-eight
supplemental indentures, counterparts of which are on file with the
Trustee, and by all other indentures supplemental to any or all thereof,
collectively called the "Mortgage"), and any and all such supplemental
indentures, between the Company and Old Colony Trust Company or
The First National Bank of Boston, as Trustee, to which Mortgage
reference is hereby made for a description of the property mortgaged
and pledged, the nature and extent of the security, the terms and
conditions upon which releases and other dispositions of the property
covered by the Mortgage may be made, and the rights of the holders of
said bonds and of the Trustee in respect of such security; but neither the
foregoing reference to the Mortgage nor any provision of this bond or of
the Mortgage shall affect or permit any impairment of the absolute,
unconditional and unalterable obligation of the Company to pay, at the
maturities herein provided, the principal of and premium (if any) and
interest on this bond as herein provided. By the terms of the Mortgage
the bonds to be secured thereby are issuable in series, which may vary
as to date, amount, date of maturity, rate of interest, and in other
respects as in the Mortgage provided.
The bonds of Series NN shall not be subject to redemption, prepayment,
purchase or other retirement prior to maturity except: (a) in connection
with the application pursuant to Article IX of the Mortgage of moneys
received by the Trustee as proceeds of released property or of property
taken by the power of eminent domain or as insurance money (in
connection with a redemption or purchase pursuant to said Article IX,
and upon the notice and in the manner and with the effect provided in
the Mortgage, the bonds of Series NN, of which this is one, may be
redeemed or purchased by the Company, subject to the limitations
contained in the Mortgage or any of the bonds of Series NN, at any time
and from time to time prior to maturity, as a whole or in part in the
principal amount of $1,000 or any integral multiple thereof, at a
redemption or purchase price of 100% of the principal amount of the
bonds of Series NN to be redeemed or purchased plus accrued interest
thereon to the date of redemption or purchase, together with a premium
equal to the Make-Whole Premium Amount (as defined in subsection
2(e) of Article 1 of the Supplemental Indenture dated as of December 10,
1993) with respect to the principal amount being redeemed or
purchased); or (b) at the option of the Company, and upon the notice
and in the manner and with the effect provided in the Mortgage, as a
whole or in part in the principal amount of $1,000 or any integral multiple
thereof at any time after December 15, 1994 and prior to December 15,
2008 at a redemption price of 100% of the principal amount of the bonds
of Series NN to be redeemed plus accrued and unpaid interest thereon
to the date of redemption, together with a premium equal to the Make-
Whole Premium Amount (as defined in subsection 2(e) of Article 1 of the
Supplemental Indenture dated as of December 10, 1993) with respect to
such principal amount then to be redeemed.
In case of certain events of default specified in the Mortgage, the
principal of this bond may be declared or may become due and payable
in the manner and with the effect provided in the Mortgage. No recourse
shall be had for the payment of the principal or interest of this bond, or
for any claim based hereon, or otherwise in respect hereof or of the
Mortgage, to or against any incorporator, stockholder, officer or director,
past, present or future, of the Company, either directly or through the
Company, under any constitution or statute or rule of law, or by the
enforcement of any assessment or penalty, or otherwise, all such liability
of incorporators, stockholders, directors and officers being waived and
released by the holder hereof by the acceptance of this bond and being
likewise waived and released by the terms of the Mortgage.
This bond is transferable by the registered holder hereof, in person or by
attorney duly authorized, at said office of the Trustee, upon surrender
and cancellation of this bond, and upon any such transfer a new
registered bond or bonds, without coupons, of the same series and
maturity date and for the same aggregate principal amount will be issued
to the transferee in exchange herefor.
This bond shall not be valid or become obligatory for any purpose unless
and until it shall have been authenticated by the execution by the Trustee
or its successor in trust under the Mortgage of the certificate endorsed
hereon.
IN WITNESS WHEREOF, Central Vermont Public Service Corporation
has caused this bond to be executed in its name by the manual or
facsimile signature of its President or one of its Vice Presidents, and its
corporate seal (or a facsimile thereof) to be hereto affixed and attested
by the manual or facsimile signature of its Secretary or one of its
Assistant Secretaries, this day of , 199 .
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
By _____________________________________
President
Attest:
_____________________________
Secretary
<PAGE>
(FORM OF ENDORSEMENT FOR ALL REGISTERED SERIES NN
BONDS)
FOR VALUE RECEIVED
hereby sell(s), assigns(s) and transfer(s) unto
, the within bond issued by Central Vermont Public
Service Corporation, and all rights thereunder, hereby irrevocably
constituting and appointing attorney to transfer said bond on
the books of said Company, with full power of substitution in the
premises.
Dated: ___________________
_______________________________
In the presence of:
_____________________________
NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within bond in every particular,
without alteration or enlargement or any change whatever.
THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD
IN CONTRAVENTION OF SUCH ACT.
(FORM OF TRUSTEE'S CERTIFICATE FOR ALL SERIES NN BONDS)
This bond is one of the bonds of the series designated therein, described
in the within-mentioned Mortgage.
THE FIRST NATIONAL BANK OF BOSTON,
Trustee
By ______________________________
Authorized Officer
Resolved: that this Company's First Mortgage 6.27%
Bonds, Series NN, to be issued under said Indenture of Mortgage shall
be executed in the name of this Company by the manual or facsimile sig-
nature of its President or one of its Vice Presidents and shall have
affixed thereto the corporate seal of this Company (which may be
facsimile) attested by the manual or facsimile signature of its Secretary
or an Assistant Secretary.
Resolved: that, subject to obtaining the approval of the
Vermont Public Service Board, this Board hereby authorizes the issue of
$3,000,000 in principal amount of said First Mortgage 6.27% Bonds,
Series NN, which series have been determined upon and established at
this meeting, to be issued in respect of extensions and purchased
property, pursuant to and in conformity with the provisions of said
Indenture of Mortgage, as amended, particularly Section 4 of Article II
thereof.
Resolved: that this Board of Directors hereby authorizes
The First National Bank of Boston, Trustee under said Indenture of
Mortgage, from time to time to authenticate, on application of the
President or any Vice President of this Company, and deliver on the
written order of the President or any Vice President $3,000,000 in
principal amount of said First Mortgage 6.27% Bonds, Series NN, in such
definitive forms and denominations authorized by resolutions of this
Board as he may specify, but only upon said The First National Bank of
Boston, Trustee, being satisfied that all the requirements of Article II of
said Indenture of Mortgage, as amended, relating to the issue of bonds
in respect of extensions and purchased property have been complied
with and upon the deposit with the Trustee of the documents required
under said Article II.
Whereas, by Section 12 of Article III of the Indenture of
Mortgage of this Company to The First National Bank of Boston
(successor trustee to Old Colony Trust Company), Trustee, dated as of
October 1, 1929, this Company covenanted "that it will, upon reasonable
request, execute and deliver such further instruments and do such further
acts as may be necessary or proper to carry out more effectually the
purposes of this Mortgage, especially to make subject to the lien hereof
any property now owned or hereafter acquired by it, which it is herein
provided shall be subject to the lien hereof", and, by Section 1 of Article
XVI thereof, it is provided, among other things, that this Company and
the Trustee may enter into such indentures supplemental thereto as may
be deemed necessary or desirable "to assign, convey, confirm,
mortgage, pledge, transfer and set over unto the Trustee, subject to such
liens or other encumbrances as shall be therein specifically described,
additional property or properties of the Company, for the equal and
proportionate benefit and security, except as herein otherwise expressly
provided, of the holders and owners of all bonds at any time issued and
outstanding under this Mortgage", and "to add to the covenants or
agreements of the Company for the protection of the bondholders and of
the trust estate", and "to provide the terms and conditions of redemption
of the bonds, and/or for a special sinking fund for the retirement of the
bonds of any particular series then about to be issued", and "for any
other purpose not inconsistent with the terms of this Mortgage and which
shall not impair the security of the same",
NOW, THEREFORE, BE IT
Resolved: that this Board hereby approves the
Supplemental Indenture to be dated as of December 10, 1993, setting
forth the terms of the Company's First Mortgage 6.27% Bonds, Series
NN, and authorizes and directs the President or any Vice President of
this Company for the time being in office, each as such officer and as
agent of this Company, to execute and seal with the corporate seal of
this Company (which shall be attested by the Secretary or an Assistant
Secretary of this Company for the time being in office), and deliver to
The First National Bank of Boston, Trustee, a Thirty-Eighth Supplemental
Indenture to be dated as of December 10, 1993, substantially in the form
presented to this meeting, subject to such changes, insertions and
omissions as may be determined and approved by the President or Vice
President of this Company executing the same, that such determination
and approval are within the authority conveyed by this resolution to be
conclusively evidenced by the execution of said Supplemental Indenture
on behalf of this Company and such execution being a sufficient
identification thereof for all purposes as the Supplemental Indenture
hereby authorized.
Resolved: that this Company hereby appoints The First
National Bank of Boston, a national banking association having its
principal office in the City of Boston, as the Boston paying agent of this
Company for the purpose of paying the interest on this Company's First
Mortgage 6.27% Bonds, Series NN, to be issued under and secured by
the Indenture of Mortgage dated as of October 1, 1929 (but actually
executed October 24, 1929), as amended and supplemented, made and
entered into by and between this Company and said The First National
Bank of Boston as Trustee, and hereby designates the principal office of
said The First National Bank of Boston as the office or agency of this
Company in Boston, Massachusetts, at which payment may be made to
or upon the written order of the holders of the registered bonds of Series
NN.
On motion duly made and seconded, the following resolutions relating to
the bonds of Series OO were unanimously passed:
Resolved: that this Board of Directors of Central
Vermont Public Service Corporation hereby determines upon a fortieth
series of bonds to be issued from time to time upon proper resolutions of
the Board of Directors under the terms of an Indenture of Mortgage
between this Company and The First National Bank of Boston (successor
trustee to Old Colony Trust Company), Trustee, dated as of October 1,
1929 (but actually executed October 24, 1929), as amended, and duly
recorded, among other places, in the Office of the City Clerk of Rutland,
Vermont, and in Washington County, New York, Liber 150 of Mortgages,
Page 51, Grafton County, New Hampshire, Registry of Deeds, Liber 616,
Folio 484, Sullivan County, New Hampshire, Records, Vol. 234, Page
531, in the Office of the Secretary of State of Connecticut, in the offices
of the clerks of certain other towns and cities in the State of Vermont,
and in the office of the Secretary of State of Vermont; that said series
shall be designated as Series OO and that the bonds of said series shall
be designated as "First Mortgage 6.90% Bonds, Series OO"; that said
bonds shall be in the form of registered bonds without coupons; that
each of said bonds shall be dated as of the date of the interest payment
day thereof next preceding the date of issue, to which interest has been
paid, unless (a) issued on an interest payment day, in which event it
shall be dated as of the date of issue, or (b) issued prior to the
occurrence of any interest payment day thereof, in which event it shall
bear the date of its issue, except that bonds of Series OO issued prior to
June 15, 1994 in exchange for other bonds of Series OO shall be dated
so that no gain or loss of interest shall result; each bond of Series OO
shall bear interest from the date thereof; said bonds (subject to the
provisions of said Indenture of Mortgage) to be limited in express
aggregate principal amount to $17,500,000, to bear interest from the date
thereof at the rate of 6.90% per annum, payable semiannually on the
fifteenth day of June and December in each year, until the principal
thereof becomes due and payable, and to bear interest on overdue
principal and (to the extent enforceable under applicable law) on overdue
installments of interest at the rate of 7.90% per annum, and to mature
December 15, 2023, to be substantially in the form to be authorized at
this meeting; said bonds to be in the denomination of $1,000 and
multiples thereof. Said bonds of Series OO may be redeemed as a
whole or in part in multiples of one thousand dollars at any time or from
time to time prior to maturity, upon the notice and in the manner and with
the effect provided in said Indenture of Mortgage and particularly in
Article V thereof, subject to the provisions of Sections 2, 4 and 5 of
Article 1 of the Thirty-Eighth Supplemental Indenture to be authorized at
this meeting, or in connection with the application pursuant to Article IX
of said Indenture of Mortgage of moneys received by the Trustee as
proceeds of released property or of property taken by the power of
eminent domain or as insurance money, any such redemption to be
made at the applicable percentages of the principal amounts thereof
specified in the forms of the definitive Series OO bonds to be authorized
at this meeting, together in each case with accrued and unpaid interest
to the date of redemption; provided, however, that said bonds of Series
OO shall not be redeemed at the option of the Company on or before
December 15, 1994, and said bonds of Series OO shall be subject and
entitled to the benefits of optional redemption provisions as set forth in
said Supplemental Indenture and referred to in said form of the bonds of
Series OO, which optional redemption provisions are hereby approved.
Subject to the provisions of Section 6 of Article 1 of said Supplemental
Indenture the principal of the bonds of Series OO shall be payable at the
principal office of the Trustee in the City of Boston, Massachusetts, or its
successor in trust under said Indenture of Mortgage, in coin or currency
of the United States of America which at the time of payment is legal
tender for public and private debts; and subject to the provisions of
Section 6 of Article 1 of said Supplemental Indenture the interest on the
bonds of Series OO shall be payable in like coin or currency at the office
or agency of this Company in the City of Boston, Massachusetts, or, at
the option of the holders, in the Borough of Manhattan, City and State of
New York.
Resolved: that this Board hereby approves the following
forms of registered bonds without coupons of Series OO, subject to such
changes, insertions and omissions in each, not substantially at variance
with said forms, as may be determined upon and approved by the
President or one of the Vice Presidents of this Company and approved
by the Trustee; and that the execution of said bonds by the President or
one of the Vice Presidents of this Company and the authentication
thereof by the Trustee shall be conclusive evidence that each so
executed is within the authority conveyed by this resolution:
(FORM OF REGISTERED BOND WITHOUT COUPONS OF SERIES
OO)
No. ROO-- $
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
FIRST MORTGAGE 6.90% BOND
SERIES OO
Due December 15, 2023
CENTRAL VERMONT PUBLIC SERVICE CORPORATION, a Vermont
corporation (hereinafter called the Company), for value received, hereby
promises to pay to
or registered assigns, the sum of DOLLARS on the
fifteenth day of December, 2023, and to pay to the registered holder
interest on said sum from the date hereof, at the rate of 6.90% per
annum, payable semiannually on the fifteenth day of June and December
in each year, until the principal hereof becomes due and payable, and at
the rate of 7.90% per annum on any overdue principal and (to the extent
enforceable under applicable law) on any overdue installment of interest.
The principal of this bond shall be payable at the principal office of The
First National Bank of Boston in the City of Boston, Massachusetts, or its
successor in trust under the Indenture of Mortgage hereinafter referred
to, in coin or currency of the United States of America which, at the time
of payment, is legal tender for public and private debts, and the interest
on this bond shall be payable, in like coin or currency, at the office or
agency of the Company in the City of Boston, Massachusetts or, at the
option of the registered holder, in the Borough of Manhattan, City and
State of New York.
This bond is one of the bonds issued and to be issued from time to time
under and in accordance with, and, irrespective of the designation
thereof or of the series in which issued, all equally secured by, an
Indenture of Mortgage or Deed of Trust dated as of October 1, 1929
(hereinafter as supplemented, modified and confirmed by thirty-eight
supplemental indentures, counterparts of which are on file with the
Trustee, and by all other indentures supplemental to any or all thereof,
collectively called the "Mortgage"), and any and all such supplemental
indentures, between the Company and Old Colony Trust Company or
The First National Bank of Boston, as Trustee, to which Mortgage
reference is hereby made for a description of the property mortgaged
and pledged, the nature and extent of the security, the terms and
conditions upon which releases and other dispositions of the property
covered by the Mortgage may be made, and the rights of the holders of
said bonds and of the Trustee in respect of such security; but neither the
foregoing reference to the Mortgage nor any provision of this bond or of
the Mortgage shall affect or permit any impairment of the absolute,
unconditional and unalterable obligation of the Company to pay, at the
maturities herein provided, the principal of and premium (if any) and
interest on this bond as herein provided. By the terms of the Mortgage
the bonds to be secured thereby are issuable in series, which may vary
as to date, amount, date of maturity, rate of interest, and in other
respects as in the Mortgage provided.
The bonds of Series OO shall not be subject to redemption, prepayment,
purchase or other retirement prior to maturity except: (a) in connection
with the application pursuant to Article IX of the Mortgage of moneys
received by the Trustee as proceeds of released property or of property
taken by the power of eminent domain or as insurance money (in
connection with a redemption or purchase pursuant to said Article IX,
and upon the notice and in the manner and with the effect provided in
the Mortgage, the bonds of Series OO, of which this is one, may be
redeemed or purchased by the Company, subject to the limitations
contained in the Mortgage or any of the bonds of Series OO, at any time
and from time to time prior to maturity, as a whole or in part in the
principal amount of $1,000 or any integral multiple thereof, at a
redemption or purchase price of 100% of the principal amount of the
bonds of Series OO to be redeemed or purchased plus accrued interest
thereon to the date of redemption or purchase, together with a premium
equal to the Make-Whole Premium Amount (as defined in subsection 2(f)
of Article 1 of the Supplemental Indenture dated as of December 10,
1993) with respect to the principal amount being redeemed or
purchased); or (b) at the option of the Company, and upon the notice
and in the manner and with the effect provided in the Mortgage, as a
whole or in part in the principal amount of $1,000 or any integral multiple
thereof at any time after December 15, 1994 and prior to December 15,
2018 at a redemption price of 100% of the principal amount of the bonds
of Series OO to be redeemed plus accrued and unpaid interest thereon
to the date of redemption, together with a premium equal to the Make-
Whole Premium Amount (as defined in subsection 2(f) of Article 1 of the
Supplemental Indenture dated as of December 10, 1993) with respect to
such principal amount then to be redeemed; or (c) at the option of the
Company, and upon the notice and in the manner and with the effect
provided in the Mortgage, as a whole or in part in the principal amount of
$1,000 or any integral multiple thereof, at any time on or after December
15, 2018 and prior to December 15, 2023, at a redemption price of 100%
of the principal amount of the bonds of Series OO to be redeemed plus
accrued and unpaid interest thereon to the date of redemption but
without premium.
In case of certain events of default specified in the Mortgage, the
principal of this bond may be declared or may become due and payable
in the manner and with the effect provided in the Mortgage. No recourse
shall be had for the payment of the principal or interest of this bond, or
for any claim based hereon, or otherwise in respect hereof or of the
Mortgage, to or against any incorporator, stockholder, officer or director,
past, present or future, of the Company, either directly or through the
Company, under any constitution or statute or rule of law, or by the
enforcement of any assessment or penalty, or otherwise, all such liability
of incorporators, stockholders, directors and officers being waived and
released by the holder hereof by the acceptance of this bond and being
likewise waived and released by the terms of the Mortgage.
This bond is transferable by the registered holder hereof, in person or by
attorney duly authorized, at said office of the Trustee, upon surrender
and cancellation of this bond, and upon any such transfer a new
registered bond or bonds, without coupons, of the same series and
maturity date and for the same aggregate principal amount will be issued
to the transferee in exchange herefor.
This bond shall not be valid or become obligatory for any purpose unless
and until it shall have been authenticated by the execution by the Trustee
or its successor in trust under the Mortgage of the certificate endorsed
hereon.
IN WITNESS WHEREOF, Central Vermont Public Service Corporation
has caused this bond to be executed in its name by the manual or
facsimile signature of its President or one of its Vice Presidents, and its
corporate seal (or a facsimile thereof) to be hereto affixed and attested
by the manual or facsimile signature of its Secretary or one of its
Assistant Secretaries, this day of , 199 .
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
By _____________________________________
President
Attest:
_____________________________
Secretary
(FORM OF ENDORSEMENT FOR ALL REGISTERED SERIES OO
BONDS)
FOR VALUE RECEIVED
hereby sell(s), assigns(s) and transfer(s) unto
, the within bond issued by Central Vermont Public
Service Corporation, and all rights thereunder, hereby irrevocably
constituting and appointing attorney to transfer said bond
on the books of said Company, with full power of substitution in the
premises.
Dated: _______________
________________________________
In the presence of:
_____________________________
NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within bond in every particular,
without alteration or enlargement or any change whatever.
THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD
IN CONTRAVENTION OF SUCH ACT.
(FORM OF TRUSTEE'S CERTIFICATE FOR ALL SERIES OO BONDS)
This bond is one of the bonds of the series designated therein, described
in the within-mentioned Mortgage.
THE FIRST NATIONAL BANK OF BOSTON,
Trustee
By ____________________________________
Authorized Officer
Resolved: that this Company's First Mortgage 6.90%
Bonds, Series OO, to be issued under said Indenture of Mortgage shall
be executed in the name of this Company by the manual or facsimile sig-
nature of its President or one of its Vice Presidents and shall have
affixed thereto the corporate seal of this Company (which may be
facsimile) attested by the manual or facsimile signature of its Secretary
or an Assistant Secretary.
Resolved: that, subject to obtaining the approval of the
Vermont Public Service Board, this Board hereby authorizes the issue of
$17,500,000 in principal amount of said First Mortgage 6.90% Bonds,
Series OO, which series have been determined upon and established at
this meeting, to be issued in respect of extensions and purchased
property, pursuant to and in conformity with the provisions of said
Indenture of Mortgage, as amended, particularly Section 4 of Article II
thereof.
Resolved: that this Board of Directors hereby authorizes
The First National Bank of Boston, Trustee under said Indenture of
Mortgage, from time to time to authenticate, on application of the
President or any Vice President of this Company, and deliver on the
written order of the President or any Vice President $17,500,000 in
principal amount of said First Mortgage 6.90% Bonds, Series OO, in
such definitive forms and denominations authorized by resolutions of this
Board as he may specify, but only upon said The First National Bank of
Boston, Trustee, being satisfied that all the requirements of Article II of
said Indenture of Mortgage, as amended, relating to the issue of bonds
in respect of extensions and purchased property have been complied
with and upon the deposit with the Trustee of the documents required
under said Article II.
Whereas, by Section 12 of Article III of the Indenture of
Mortgage of this Company to The First National Bank of Boston
(successor trustee to Old Colony Trust Company), Trustee, dated as of
October 1, 1929, this Company covenanted "that it will, upon reasonable
request, execute and deliver such further instruments and do such further
acts as may be necessary or proper to carry out more effectually the
purposes of this Mortgage, especially to make subject to the lien hereof
any property now owned or hereafter acquired by it, which it is herein
provided shall be subject to the lien hereof", and, by Section 1 of Article
XVI thereof, it is provided, among other things, that this Company and
the Trustee may enter into such indentures supplemental thereto as may
be deemed necessary or desirable "to assign, convey, confirm,
mortgage, pledge, transfer and set over unto the Trustee, subject to such
liens or other encumbrances as shall be therein specifically described,
additional property or properties of the Company, for the equal and
proportionate benefit and security, except as herein otherwise expressly
provided, of the holders and owners of all bonds at any time issued and
outstanding under this Mortgage", and "to add to the covenants or
agreements of the Company for the protection of the bondholders and of
the trust estate", and "to provide the terms and conditions of redemption
of the bonds, and/or for a special sinking fund for the retirement of the
bonds of any particular series then about to be issued", and "for any
other purpose not inconsistent with the terms of this Mortgage and which
shall not impair the security of the same",
NOW, THEREFORE, BE IT
Resolved: that this Board hereby approves the
Supplemental Indenture to be dated as of December 10, 1993, setting
forth the terms of the Company's First Mortgage 6.90% Bonds, Series
OO, and authorizes and directs the President or any Vice President of
this Company for the time being in office, each as such officer and as
agent of this Company, to execute and seal with the corporate seal of
this Company (which shall be attested by the Secretary or an Assistant
Secretary of this Company for the time being in office), and deliver to
The First National Bank of Boston, Trustee, a Thirty-Eighth Supplemental
Indenture to be dated as of December 10, 1993, substantially in the form
presented to this meeting, subject to such changes, insertions and
omissions as may be determined and approved by the President or Vice
President of this Company executing the same, that such determination
and approval are within the authority conveyed by this resolution to be
conclusively evidenced by the execution of said Supplemental Indenture
on behalf of this Company and such execution being a sufficient
identification thereof for all purposes as the Supplemental Indenture
hereby authorized.
Resolved: that this Company hereby appoints The First
National Bank of Boston, a national banking association having its
principal office in the City of Boston, as the Boston paying agent of this
Company for the purpose of paying the interest on this Company's First
Mortgage 6.90% Bonds, Series OO, to be issued under and secured by
the Indenture of Mortgage dated as of October 1, 1929 (but actually
executed October 24, 1929), as amended and supplemented, made and
entered into by and between this Company and said The First National
Bank of Boston as Trustee, and hereby designates the principal office of
said The First National Bank of Boston as the office or agency of this
Company in Boston, Massachusetts, at which payment may be made to
or upon the written order of the holders of the registered bonds of Series
OO.
On motion duly made and seconded, the following resolution relating to
the bonds of Series KK, LL, MM, NN and OO was unanimously passed:
Resolved: that the officers of this Company and its
counsel be and they are, and each of them singly is, hereby authorized
to do any and all acts or things and to execute any and all documents
necessary or, in the opinion of the officer or officers or counsel so acting,
desirable to carry out the purposes of the foregoing resolutions and each
of them.
And I further certify that the foregoing resolutions have not
since been amended or rescinded and are now in full force and effect.
<PAGE>
IN WITNESS WHEREOF I have hereunto set my hand as such Assistant
Secretary and have affixed the corporate seal of said Corporation this 7th
day of December, 1993.
Carole L. Root
Carole L. Root
Assistant Secretary
(Corporate
Seal)
10.78
PROSPECTUS
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
77 Grove Street
Rutland, Vermont 05701
802-773-2711
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
150,000 shares of Common Stock
($6.00 Par Value)
This Prospectus describes the material features of the Central Vermont
Public Service Corporation Stock Option Plan for NonEmployee Directors
(the "Plan"). The Plan provides for automatic awards to Directors of
Central Vermont Public Service Corporation (the "Company") of options
to purchase shares of the Company's $6 par value Common Stock. Awards
may be made under the Plan with respect to an aggregate of up to
150,000 shares of the Company's Common Stock, subject to certain
proportional adjustments.
In general, options are exercisable only (i) within the period
beginning six months after the date of grant and ending five years
after the date of grant and (ii) at a fixed price equal to the fair
market value of the stock at the time the option is granted.
This Prospectus relates to the shares of the Company's Common Stock to
be issued to Directors of the Company upon exercise of options granted
under the Plan and may not be used for any reoffers or resales of such
shares. It is suggested that this Prospectus be retained for future
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
This document constitutes a prospectus covering securities that have
been registered under the Securities Act of 1933.
The date of this Prospectus is April 30, 1993.
<PAGE>
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION ........................................ ii
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............... iii
DESCRIPTION OF THE STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
General Information
Administration of the Plan............................... 2
Eligibility.............................................. 2
Number of Shares; Option Periods; Exercise............... 2
Limited Extension of Option Periods...................... 3
Cashless Exercise........................................ 3
Stock for Withholding.................................... 3
Change in Control........................................ 4
Nontransferability and Termination of Options............ 4
Fair Market Value of Common Stock........................ 5
Shares Subject to Plan.....................................5
Adjustments Upon Changes in Stock........................ 5
Effective Date and Duration of Plan...................... 5
Unfunded Plan............................................ 6
Amendment and Termination................................ 6
Short-Swing Trading Liability............................ 6
Restrictions Upon Reoffer or Resale of Shares............ 7
FEDERAL INCOME TAX CONSEQUENCES............................... 8
Effect of Share for Share Exercise....................... 8
Additional Information................................... 8
(i)
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files proxy statements, reports and other information with
the Securities and Exchange Commission (the "Commission"). Such proxy
statements, reports and other information may be inspected at the
public reference facilities maintained at the Commission's office at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices in New York (26 Federal Plaza, New York, New York
10007), Los Angeles (5757 Wilshire Boulevard, Suite 500 East, Los
Angeles, California 90036-3648) and Chicago (Everett McKinley Dirksen
Building, 219 South Dearborn Street, Chicago, Illinois 60604). Copies
of such material may be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
The Company's Common Stock is listed for trading on the New York Stock
Exchange ("NYSE") under the trading symbol "CV" (often reported in the
financial press as "CVtPS or CentlVtPS"). Reports, proxy statements and
other information concerning the Company prepared pursuant to the
Exchange Act are also on file with the NYSE and may be inspected at the
offices of the NYSE at 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement
under the Securities Act of 1933 with respect to the securities offered
hereby. This Prospectus does not contain all of the information set
forth in such Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission,
and reference is hereby made to the Registration Statement and exhibits
thereto for further information with respect to the Company and the
securities to which this Prospectus relates.
The principal executive offices of the Company are located at 77 Grove
Street, Rutland, Vermont 05701, telephone (802) 773-2711.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained
or incorporated by reference in this Prospectus and if given or made
such information or representations must not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an
offer to sell or the solicitation of an offer to buy any of the
securities offered hereby in any State to any person to whom it is
unlawful to make such offer in such State. Neither the delivery of this
Prospectus nor any sale hereunder shall under any circumstances create
any implication that there has been no change in the affairs of the
Company since the date hereof. However, if any material change occurs
in the Company's affairs at a time when the Prospectus is required to
be delivered, the Company will amend or supplement this Prospectus
appropriately.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1992;
2. The Company's definitive proxy statement dated March 30, 1993 in
connection with its annual meeting of stockholders held on May 4, 1993;
3. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, as amended by filing
dated October 13, 1992; and
4. Current Reports on Form 8-K dated January 21, and April 28, 1993.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 after the date of
this Prospectus and prior to the filing by the Company of a
post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a
statement contained in any other subsequently filed document which is
deemed to be incorporated herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Prospectus.
The Company undertakes to provide without charge to each person to whom
a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents
referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents (unless
such exhibits are specifically incorporated by reference into such
documents). Requests for such copies should be directed to: Joseph M.
Kraus, Corporate Secretary, Central Vermont Public Service Corporation,
77 Grove Street, Rutland, Vermont 05701 (telephone (802) 773-2711).
DESCRIPTION OF THE
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
General Information
The purpose of the Central Vermont Public Service Corporation Stock
Option Plan for Non-Employee Directors (the "Plan") is to enhance the
ability of the Company to attract and retain individuals of high
caliber to serve on the Company's Board of Directors, by facilitating
the participation of such persons as stockholders in the future success
and profitability of the Company.
The Plan offers the non-employee Directors of the Company the
opportunity to purchase shares of the Company's Common Stock, $6.00 par
value ("Common Stock"), through the exercise of stock options granted
to them under the Plan. A stock option entitles the optionee to
purchase shares of Common Stock at the option price and during the
option period specified in the Plan. All options granted under the Plan
will be governed by separate agreements between the Company and the
individual Directors that will specify the terms and conditions of the
awards consistent with the provisions of the Plan.
This Prospectus contains summaries of certain provisions of the Plan.
Such statements are qualified in their entirety by reference to the
Plan document, a copy of which is on file with the Commission as an
exhibit to the Company's registration statement covering the shares to
be issued pursuant to the Plan. A copy of the Plan is also on file at
the office of the Corporate Secretary at 77 Grove Street, Rutland,
Vermont 05701 and may be inspected by participants during normal
business hours. In the case of any conflict or apparent conflict
between the description contained herein and the full text of the Plan,
the text of the Plan will control.
The Plan is not subject to the provisions of the Employment Retirement
Income Security Act of 1974 ("ERISA") and is not qualified under
Section 401(a) of the Internal Revenue Code of 1986, as amended.
The shares issuable upon the exercise of a stock option will generally
consist of shares reacquired by the Company and held in treasury. If
from time to time there is not a sufficient number of treasury shares
available, authorized but unissued Common Stock will be issued under
the Plan. The proceeds received by the Company from the sale of Common
Stock under the Plan will be used for the Company's general corporate
purposes. The amount of such proceeds will depend upon a number of
factors, including the number of shares purchased, the option prices
paid and whether the shares are newly-issued or treasury shares.
All inquiries, notices and other correspondence relating to the Plan
should be addressed to Joseph M. Kraus, Secretary, Central Vermont
Public Service Corporation, 77 Grove Street, Rutland, Vermont 05701.
References in this Prospectus to the masculine gender should be deemed
to refer as well to the feminine gender as the context may require.
Administration of the Plan
Awards of stock options under the Plan are automatic. The Plan
specifies, among other things, the number of shares to be covered by
options, the dates of grant, the option price and the exercise period.
Accordingly, the administration of the Plan is in all significant
respects, self-executing.
Eligibility
Eligibility for awards under the Plan is limited to those individuals
serving on the Board of Directors while the Plan is in effect who are
neither officers nor employees of the Company or any of its 50% or more
controlled subsidiaries. As of the date of this Prospectus, the
Company's Board of Directors consists of ten individuals. All of such
persons, except Mr. Thomas C. Webb, President and Chief Executive
Officer of the Company, are eligible to participate in the Plan. Mr.
Webb is, however, eligible to receive awards under a Stock Option Plan
for Key Employees, similar in purpose and scope to the Plan described
in this Prospectus.
Number of Shares: Option Periods: Exercise
Under the Plan, options will be granted annually to each eligible
Director to purchase 2,250 shares of the Company's Common Stock at a
price equal to the fair market value of the optioned stock on the date
the option is granted. Options for 2,250 shares will be awarded to each
then eligible,Director on the first business day after each of the
1993, 1994, 1995, 1996 and 1997 annual meetings of the Company's
stockholders.
None of the options granted or to be granted under the Plan will be
designed to qualify for tax purposes as so-called incentive stock
options under Section 422A of the Internal Revenue Code.
Except as described below under the caption "Limited Extension of
Option Period," options are exercisable in whole or in part at any time
during the period beginning six months after the date of grant and
ending five years after the date of grant.
Any exercise of an option must be made in accordance with the terms of
the option agreement and the Plan. Payment may be made in cash
or in other shares of the Company's Common Stock held by the Director,
valued at their fair market value on the date the stock option is
exercised. Payment may also be made pursuant to the cashless exercise
provisions described below, so named because the Participant is not
required to pay the option price with preexisting cash assets, but
instead funds the option price through the sale by his or her broker of
some or all of the shares.
An optionee will have no rights as a stockholder with respect to any
shares covered by an option prior to the exercise of such option and
subsequent delivery of stock certificates to him.
Limited Extension of Option Period
In the event that an option period expires at a time when a limited
trading period has been declared by the Corporate Secretary and is in
effect, the option period of such option shall be automatically
extended for a period of thirty (30) days following termination of such
limited trading period by the Corporate Secretary.
Cashless Exercise
The Plan permits a so-called "cashless exercise" of a Stock Option, in
accordance with the following general procedures: The Participant must
notify the Corporate Secretary of his or her intent to exercise.
Written instructions will then be prepared and delivered to the Company
and the participant's broker indicating the Participant's cashless
election and instructing the Company to deliver to the broker the
Common Stock issuable upon exercise. The exercise of the Participant's
stock options will be executed on the same day that the broker is able
to sell the stock. The broker will then withhold from the proceeds of
the sale and deliver to the Company an amount, in cash, equal to the
option price. An additional amount for federal and state tax
withholdings may also be withheld and delivered to the Company at the
Participant's election.
Because a cashless exercise involves a sale of Company stock,
Participants should be aware of the possibility of short-swing trading
consequences under Section 16(b) of the Exchange Act. See "Short Swing
Trading Liability," below.
Stock for Withholding
The Plan permits a Participant to elect to have the Company satisfy the
federal and state income tax withholding requirements that apply upon
exercise of a Stock Option by having the Company retain from the shares
deliverable to the Participant upon exercise that number of shares of
Common Stock having a fair market value equal to the amount of the tax
withholding liability. Participants are cautioned, however, that
adverse short-swing trading consequences
may arise if this feature is utilized outside a so-called "window
period." See "Short-Swing Trading Liability" below.
Change in Control
In the event of a change in control of the Company, each outstanding
stock option not otherwise presently exercisable will become
immediately exercisable in full.
For purposes of the Plan a "change in control" of the Company occurs:
(i) when any person (including a "group" as defined in Section 13(d)(3)
of the Exchange Act) acquires 20% or more of the combined voting power
of the Company's outstanding securities; or (ii) if those members
presently constituting at least three-quarters of the Directors
("Incumbent Directors"), together with any successors to such Directors
approved by at least three-quarters of the Incumbent Directors, no
longer constitute three-quarters of the Directors at any time; or (iii)
when any person (including a "group" as defined in Section 13(d)(3) of
the Exchange Act) owns, controls or holds the power to vote 10% or more
of the Company's outstanding voting securities and immediately
following the acquisition of such securities such corporation or
partnership is a public utility holding company or the Company is in
danger of losing its exemption from registration under the Public
Utility Holding Company Act of 1935 or the Company is required to
register under such Act.
Nontransferability and Termination of Options
Options granted under the Plan are not assignable or transferable
except upon the death of the Director-participant and during his
lifetime are exercisable only by him.
If a Director-participant dies at a time when he is entitled to
exercise a stock option, then such option may be exercised in whole or
in part by his executor or administrator or the person to whom such
option is transferred b,y will or the applicable laws of descent and
distribution, at any time within three years after such death or
retirement. In no event, however, may such stock option be exercised in
any such situation more than five years after the date of the grant.
If a Director-participant ceases to be a member of the Board of
Directors for any reason other than death at a time when he is entitled
to exercise a stock option, then such option may be exercised in whole
or in part at any time within three months of such cessation; provided,
however, that except as otherwise described above under the caption
"Limited Extension of Option Period," no such stock option be may
exercised more than five years after the date of grant of such option.
Fair Market Value of Common Stock
Under the Plan, the fair market value of the Company's Common Stock as
of a particular date is deemed to be the average of the high and low
quoted selling prices for a share of Common Stock on such date, as
reported on the composite tape on such date (or, if the applicable date
is not a business day, the next preceding business day). If no sale
takes place on the date in question, the fair market value will be
deemed to be the average of the bid and asked prices on such date.
Shares Subject to Plan
The total number of shares of the Company's Common Stock with respect
to which awards may be made under the Plan is 150,000 shares, subject
to proportional adjustment, as described below. The Plan provides that
if stock options expire or terminate in whole or in part before being
exercised, for any reason, the shares covered thereby will be available
for future stock option grants under the Plan. Shares with respect to
which a stock option has been exercised, in whole or in part, will not
be available for future awards.
Adjustments Upon Changes in Stock
In the event of a stock dividend, stock split or other change in
corporate structure or capitalization affecting the Company's Common
Stock which becomes effective after adoption of the Plan, the Committee
will make appropriate adjustments in the number and kind of shares of
Stock subject to the Plan, the number and kind of shares of stock
covered by each outstanding stock option, the option price and the fair
market value of the stock.
In the event of a dissolution or liquidation of the Company, a
consolidation or merger in which the Company is not the surviving
corporation or in which a majority of its outstanding shares are so
converted or exchanged, all Qutstanding options will terminate. The
Company must, however, make all outstanding options immediately
exercisable at least 20 days before such dissolution, liquidation,
consolidation or merger or must arrange for any corporation succeeding
to the business and assets of the Company to issue to participants
replacement options on such corporation's stock which will to the
extent possible preserve the value of the options being surrendered.
Effective Date and Duration of Plan
The Plan became effective upon its approval by the Company's
Stockholders at their Annual Meeting held on May 5, 1992. Options will
be awarded annually under the Plan beginning in 1993, with the last
such award occurring on the first business day following the
1997 Annual Meeting of the Company's stockholders. The Plan does not
provide for any extensions.
Unfunded Plan
The Plan, insofar as it provides for grants, will be unfunded, and the
Company will not be required to segregate any assets that may at any
time be represented by grants under the Plan. Any liability of the
Company to any person with respect to any grant under the Plan will be
based solely upon any contractual obligations that may be created
pursuant to the Plan. No such obligation of the Company may be
construed as giving any participant or other person or entity any
interest of any kind in any assets of the Company or any Subsidiary nor
will any such obligation create a trust of any kind or a fiduciary
relationship between the Company and any such person.
Amendment and Termination
The Board of Directors may from time to time amend, suspend or
terminate the Plan but stockholder approval is needed for any amendment
that (1) materially increases the aggregate number of shares available
under the Plan (except as described above under the caption
"Adjustments Upon Changes in Stock"); (2) materially changes the
eligibility requirements for participation in the Plan; or (3)
materially increases the benefits accruing to participants under the
Plan, within the meaning of Rule 16b-3 under the Exchange Act.
The provisions of the Plan governing the matters referred to in clauses
(1) through (3) of the preceding paragraph, as well as matters relating
to (i) the number of shares for which stock options may be awarded,
(ii) the exercise price of options, (iii) the timing of awards or (iv)
the duration of option periods, may not be amended more than once every
six (6) months, except for amendments to ensure compliance with the
Internal Revenue Code, the Employee Retirement Income Security Act, or
the rules and regulations thereunder.
Short-Swinq Tradinq Liability
Directors are considered to be corporate "insiders" under Section 16 of
the Securities Exchange Act of 1934 and, accordingly are subject to the
"short swing" profit provisions of Section 16(b) of the Exchange Act.
Section 16(b) generally provides that if an insider buys and sells
securities of the Company within any six month period, any profit must
be forfeited to the Company. The grant and exercise of Stock Options
under the Plan are ordinarily exempt from short-swing trading
liability. However, Participants should be aware that the sale of
Common Stock by the broker which occurs as part of a cashless exercise
is not so exempt and may be matched against a purchase made within the
preceding or following six months to result in Section 16(b)
short-swing trading liability.
Participants are also advised that the withholding of shares in payment
of a Participant's federal and state tax liability upon exercise of a
stock option will not be exempt from Section 16 (i.e., will be treated
as a "sale") unless the withholding election is made during a "window
period" beginning on the third business day following the date of
release of annual or quarterly financial data about the Company and
ending on the twelfth business day following such date.
Directors should consider carefully the short swing profit provisions
of the Exchange Act before exercising any stock options through the
cashless exercise procedures or when making any other purchases or
sales of Company Stock.
Restrictions Upon Reoffer or Resale of Shares
Because of their status as Directors of the Company, Participants may
be deemed to be affiliates of the Company under applicable rules and
regulations of the Securities and Exchange Commission. An affiliate is
generally defined as any person who, directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under
common control with, the issuing company. Affiliates are generally
subject to the same registration and prospectus delivery requirements
under the Securities Act of 1933, as is the issuing company in
connection with sales of company stock.
This Prospectus is not available for reoffers or resales by affiliates
of Common Stock acquired upon the exercise of options granted under the
Plan. Such reoffers or resales may be made only pursuant to a separate
prospectus filed in accordance with the applicable rules and
regulations of the Securities and Exchange Commission or pursuant to
the exemptive provisions of the Securities Act of 1933 and the rules
and regulations thereunder, including Rule 144 of the Commission.
The Plan provides that the Company may require that a person exercising
a stock option agree in writing to hold for investment and not for
resale any shares of Common Stock issued to him under the Plan and to
dispose of such shares only in compliance with applicable rules and
regulations. Such agreement will be required only if, in the opinion of
counsel to the Company, it is necessary or desirable in order to comply
with applicable laws and regulations relating to the sale of
securities.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes the Company's understanding of the
more significant federal income tax consequences associated with the
Plan under the provisions of the Internal Revenue Code of 1986 (the
"Code"), as amended. The Company has not undertaken to provide personal
tax or financial advice to Participants and the following general
discussion should not be interpreted as such.
No income will be recognized by a Participant for federal income tax
purposes when an option is granted. Except as noted below under the
caption "Additional Information," at the time an option is exercised, a
Participant will recognize as ordinary income the difference between
the fair market value of the Common Stock on the date the option is
exercised and the option price (that is, the fair market value on the
date the option was granted).
Any gain or loss that a Participant realizes on a subsequent
disposition of Common Stock acquired upon the exercise of a stock
option will be treated as long-term or short-term capital gain or loss,
depending on the period during which the Participant held such shares.
For purposes of determining the amount of such gain or loss, the tax
basis in the shares will be the market value of such shares on the
exercise date.
The exercise of a stock option will entitle the Company to claim a
business expense deduction equal to the amount of income realized by
the Participant.
Effect of Share for Share Exercise
If a Participant elects to tender previously acquired shares of the
Company's Common Stock in partial or full payment of the option price,
the transaction will be treated as a tax-free exchange to the extent of
the number of shares tendered. Additional shares received will result
in ordinary income equal to the value of such shares.
Additional Information
In general, a Participant will recognize taxable income upon exercise
of a Stock Option, assuming that no disposition of the shares following
exercise of the Stock Option occurs within six months after the date of
grant. In those unusual circumstances in which the exercisability of a
Stock Option is accelerated within six months of the date of grant,
such as upon a change of control, a Participant will not recognize
taxable gain until expiration of the six-month period following the
date of grant of the Stock Option; provided, however, that a
Participant may elect to recognize taxable gain immediately in such
circumstances by filing a written election with the Internal Revenue
Service pursuant to Section 83(b) of the Internal Revenue Code. The
Company is entitled to a corresponding tax deduction when the
Participant recognizes taxable income.
If a change in control of the Company occurs accelerating the exercise
of outstanding stock options, and if such accelerated exercise is
deemed a "control payment" (within the meaning of Section 280G of the
Code), a Participant may be subject to a 20% federal excise tax on all
or a portion of such control payment, if such control payment and other
control payments exceed certain limits contained in Section 280G of the
Code. In such event, the Company would not be allowed a business
deduction with respect to the amount of such control payment.
The rules governing the tax treatment of options and shares acquired on
the exercise thereof are quite technical, so that the above description
of tax consequences is necessarily general in nature and does not
purport to be complete. Moreover, statutory provisions are subject to
change, as are their interpretations, and their application may vary in
individual circumstances. Consequently, participants are urged to
consult with their personal tax advisers for information with respect
to the tax consequences that would pertain to their particular
circumstances, including tax consequences under applicable state and
local income tax laws.
<PAGE>
10.79
OFFICERS INSURANCE PLAN
This Agreement, entered into as of the date set forth on the Summary
Schedule, which is attached hereto and made a part hereof, by and
between CENTRAL VERMONT PUBLIC SERVICE CORPORATION (hereinafter
"Company") and the Executive named on the Summary Schedule (hereinafter
"Executive").
WHEREAS, the Executive has provided valuable services to the Company
and the Company desires to retain the Executive's valuable services and
to aid in providing retirement and death benefits to the Executive and
his/her beneficiaries; and
WHEREAS, the Executive is a highly compensated managerial employee;
NOW THEREFORE, the Company and the Executive in consideration of the
terms and conditions set forth herein hereby mutually covenant and
agree as follows:
1.Retirement Benefit: The Company will commence paying the Executive
within thirty (30) days after the Executive's normal retirement date,
provided the Executive is employed by the Company on his/her normal
retirement date, the amount per month set forth on the Summary Schedule
guaranteed for fifteen (15) years. If the Executive dies after
becoming entitled to payments, but before the payments guaranteed for
fifteen (15) years have been paid, the unpaid balance of the payment
guaranteed for fifteen (15) years will continue to be paid by the
Company to the beneficiaries named in the Summary Schedule.
2.Early Retirement Benefit: In the event the Executive's employment
with the Company terminates prior to the Executive's normal retirement
date for any reason other than death of the Executive or cause (gross
misconduct), the Executive has attained the age of 55 and has been
employed by the Company for at least 10 years, then within thirty (30)
days of the date of such termination, or reaching the age of 60,
whichever is later, the Company will commence paying the Executive the
monthly retirement benefit set forth on the Summary Schedule for
fifteen years reduced by such amount as shall be determined by the
Company, however, such reduction shall not be more than five percent
(5%) for each full year that the early retirement date precedes the
normal retirement date.
3.Death Benefit: If the Executive dies after payments of monthly
benefits to the Executive have commenced, or if the Executive
terminates after age 55 and prior to age 60, pursuant to Paragraphs 1
or 2 above, then the Company shall pay to the Executive's beneficiaries
as an additional benefit, the sum of One Hundred Thousand Dollars
($100,000.00).<PAGE>
4.Leave of Absence: The Company may grant the Executive one or more
leaves of absence during which time the Executive shall be considered
to be in the employ of the Company for purposes of this Agreement.
5. Assignability: The benefits provided by this Agreement will
not be subject to garnishment, attachment or any other legal process by
the creditors of the Executive or of any person or persons designated
as beneficiaries of the agreement.
6.Employment and Other Rights: This Agreement creates no rights
whatsoever in the Executive to continue in the employ of the Company
for any length of time, nor does it create any rights in the Executive
or obligations on the part of the Company except as set forth herein.
7.Anti-Alienability Clause: Neither the Executive nor any beneficiary
shall transfer, assign, pledge, mortgage or encumber any of the
benefits and payments hereunder. The benefits shall not be subject to
seizure, lien, judgement, alimony, levy, garnishment, or attachment.
In the event that the Executive or any Beneficiary shall attempt any of
the above acts, then the payment of installment payments or benefits by
the Company shall immediately cease and terminate.
8.No Effect On Other Plans: Nothing contained herein shall affect any
right or privilege of the Executive with regard to other employee plans
the Company has, or may have in the future.
9.Financial Hardship: The Company may, in its sole discretion, pay the
balance of the account, or any portion thereof to the Executive or any
Beneficiary herein, provided that the Executive or Beneficiary has a
demonstrable need due to financial hardship. The decision of whether
or not financial hardship exists, or whether or not any payments herein
shall be made, shall at all times rest solely with the Company, in its
sole discretion.
10.Reorganization of the Company: The Company agrees that it will not
merge or consolidate with any other company, business corporation,
partnership, or organization, and/or that it will not permit any of its
activities to be taken over unless and until the succeeding or
continuing corporation expressly assumes all rights, duties, privileges
and obligations herein set forth. With regard to a default with
respect to this provision, the Executive or Beneficiary shall have a
continuing lien on all corporate assets, including transferred assets,
until the Company's obligations herein are completely and totally
fulfilled.
<PAGE>
11.Unsecured Provision: The rights of the Executive under this
Agreement, and of any Beneficiary shall be solely those of an unsecured
creditor of the Company. Any asset acquired by the Company in
connection with any obligation herein shall not be deemed to be held in
trust for the Executive or Beneficiary. All such assets remain
general, unpledged assets of the Company.
12.Communications: Any notice or communication shall be made in
writing and addressed as the case may be to the principal offices of
the Company and the principal residence of the Executive. Each part
shall notify the other of a change of address of the principal office
and principal residence.
13.Facility of Payment: Any installment or payment required to be made
by the Company under this Agreement, to any person entitled to said
payment, with the person being under a legal disability at the time,
then said payment may be made in any of the following ways, by the
Company, in its sole discretion.
Directly to the person.
2.To the legal representative of the person.
3.To some near relative of the person, said payment to be used for the
latter's benefit.
4.Directly for the payment of expenses relating to the health,
maintenance, support and education of the person.
Any such payment by the Company shall be a discharge of the obligation
to make said payment. The company shall not be liable for making the
payment to any of the parties enumerated above.
14.Arbitration: In the event of any dispute arising between the
parties of this Agreement, the parties agree that such controversy
shall be settled by arbitration, in accordance with the rules of the
American Arbitration Association. One arbitrator shall be named by
each party involved in the dispute, with an additional arbitrator named
by the arbitrators so chosen.
15.State Law: This Agreement shall be construed under the laws of the
State of Vermont.
16.Revocability: This Agreement may be revoked or amended in whole or
part by a writing signed by both parties hereto except as set forth in
Paragraph 17 below.
<PAGE>
17.Amendment: Notwithstanding any other provision of this Agreement,
in the event of a substantial change in the Federal Income Tax Laws
affecting the economic viability of this plan, the Board of Directors
may amend the plan by freezing the Executive's salary level for
purposes of this Plan at the level as of date of such amendment.
18.Whole Agreement: This writing contains the whole Agreement, with no
other understandings or provisions other than what is considered
herein.
Executed as of this _______ day of _______________, 19_______.
IN PRESENCE OF:
_______________________________ _____________________________
Executive
CENTRAL VERMONT PUBLIC SERVICE
CORPORATION
_______________________________ By___________________________
Duly Authorized Agent
<PAGE>
OFFICERS INSURANCE PLAN
SUMMARY SCHEDULE
1.Name of Executive:___________________________________________
2.Address:___________________________________________________
___________________________________________________
3.Date of Agreement: November 15, 1993
4.Monthly Retirement Benefit: __________________________ of the
Executive's salary from the Company for the calendar year before
retirement or termination of employment divided by 12.
5.Beneficiaries:__________________________________
__________________________________
__________________________________
In the event there are no surviving beneficiaries, then the benefit
shall be paid to the Executor or Administrator of the last survivor
of the Executive and said beneficiaries.
6.Normal Retirement Date:______________________________________
Executed this __________ day of ____________________, 19_____.
___________________________________ _______________________________
Witness Executive
CENTRAL VERMONT PUBLIC SERVICE
CORPORATION
________________________________By_____________________________
Witness Duly Authorized Agent
<PAGE>
DIRECTORS SUPPLEMENTAL DEFERRED COMPENSATION PLAN 10.80
ARTICLE I
PURPOSE
The purpose of this plan is to permit members of the Board of Directors
of Central Vermont Public Service Corporation and subsidiary companies
an opportunity to defer receipt of salary, bonus or incentive payments;
and to enable the Corporation to attract and retain outstanding
individuals to serve as directors.
ARTICLE II
DEFINITIONS
When used herein the following terms have the meanings indicated unless
a different meaning is clearly required by the context.
1. "Administrator": The person, persons or committee appointed by the
Board of Directors of the Corporation to administer this Plan.
2. "Corporation": Central Vermont Public Service Corporation and
subsidiary companies, and its corporate successors.
3. "Deferred Compensation Agreement": Written agreement between the
Corporation and a Participant in substantially the form attached hereto
as Exhibit A and made a part hereof.
4. "Designated Beneficiary": One or more beneficiaries, as designated
in writing to the administrator, to whom payments otherwise due to or
for the benefit of a Participant are to be made in the event of the
Participant's death. If no written designation is made by a
Participant, or if the beneficiary is not in existence at the
Participant's death, or if the beneficiary predeceases the Participant,
the Participant is deemed to have designated his estate as beneficiary.
5. "Director": A person who has been elected to such a position by the
shareholders of the Corporation.
6. "Normal Retirement": Retirement as a Director from the Corporation
on or after the later of attainment of age seventy (70) and completion
of five (5) years of Plan participation.
7. "Normal Retirement Date": The first day of the month coinciding
with or next following the date on which a Participant first meets the
requirement for Normal Retirement.
8. "Participant": A Director who is or hereafter becomes eligible to
participate in the Plan and does participate by electing, in the manner
specified herein, to defer compensation pursuant to the Plan.
9. "Participant's Account": The Participant's Account shall be the
amount deferred by the Participant pursuant to the Deferred
Compensation Agreement, Exhibit A, plus interest as determined by the
Administrator in accordance with the table attached hereto as Exhibit
B. However, the Participant understands and accepts that the present
value of the Plan cost to the Corporation shall remain less than zero
and that all risks of change in the credited interest rate used,
mortality and tax law changes are to be assumed by the Participant.
This may result in additional Plan deferrals which will be reflected in
the balance of the Participant's Account.
10. "Plan": The Deferred Compensation Plan for Directors of Central
Vermont Public Service Corporation contained herein, and as may be
amended from time to time hereafter.
11. "Plan Year": A twelve month period commencing January 1 and ending
the following December 31 with the first Plan year commencing January
1, 1990.
12. "Termination": When a Director's service with the Corporation
terminates.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
1. Eligibility.
Any Director of the Corporation.
2. Participation.
An eligible Director participates in the Plan by irrevocably
electing, in the manner specified herein, to defer a predetermined
amount for each year for five (5) consecutive Plan Years.
ARTICLE IV
RETIREMENT BENEFITS
1. Normal Retirement Benefit.
(a) Upon retirement as a Director of the Corporation on or after his
Normal Retirement Date, a Participant shall become entitled to his/her
Normal Retirement Benefit. This Normal Retirement Benefit shall be
determined by the amount in the Participant's Account as of the date of
retirement and shall be retirement and shall be paid out in the form of
a level fifteen (15) year annuity certain, payable in one hundred
eighty (180) equal monthly installments. For purposes of establishing
the retirement annuity the fixed monthly payments will be based upon
the account value at the date of retirement, with interest computed in
the future based on the 60 months interest credited to your account
prior to retirement. Payment of the Normal Retirement Benefit commences
on the first day of the first month after the Participant's Normal
Retirement Date and continues on the first day of each month thereafter
until one hundred eighty (180) monthly payments have been made.
ARTICLE V
SURVIVOR BENEFITS
1. Events. The Company will pay to a Participant's Designated
Beneficiary a Survivor Benefit as defined in this Article V in the
event a Participant's death occurs as follows:
(a) while serving as a Director of the Corporation and while a
Participant under the Plan;
(b) after becoming entitled to a Retirement Benefit under Article IV
hereof, but prior to commencement of payment of such benefit; or
(c) after annuity benefits have commenced, but prior to the completion
of one hundred eighty (180) monthly benefit payments.
2. Amount, The amount of Survivor Benefit pursuant to this Article V
will be determined as follows:
(a) The Survivor Benefit will be equal to the value of the
Participant's Account as of the date of death plus interest determined
in the same manner as Normal Retirement Benefit pursuant to Article
IV-1(a) if the Participant's death occurs while serving as a director
of the Corporation and while a Participant under the Plan. An
additional survivor benefit shall be paid to the Designated Beneficiary
which shall be equal to the annual amount deferred by the Director and
paid each year for a fifteen (15) year period. Payments shall be made
on a monthly basis for one hundred eighty (180) months certain.
(b) The Survivor Benefit will be equal to the continuation of the
monthly benefit payable to the Participant if the Participant's death
occurs after benefit payments have commenced to him/her.
3. Duration. Payment of the Survivor Benefit to a Designated
Beneficiary pursuant to this Article V commences on the first day of
the month following the death of a Participant and continues on the
first day of each month thereafter until a total of one hundred eighty
(180) monthly payments have been made to the Participant or his
Designated Beneficiary.
ARTICLE VI
TERMINATIONS
In the event a Participant's relationship as a Director of the
Corporation terminates for any reason other than death, or Normal
Retirement, the Participant will have his/her account paid as follows:
(i) If the Participant's Account is under $25,000 it shall be paid
within thirty (30) days of the date of termination;
(ii) If the Participant's Account is over $25,000, it shall be
paid in one hundred eighty (180) monthly installments commencing at the
time early retirement benefits would have been paid had he/she
continued to be employed by the Corporation as an annuity based on an
interest rate equal to the interest rate credited to the Account for
the five (5) years prior to the early retirement date.
ARTICLE VII
AMENDMENT AND TERMINATION
The Corporation reserves the right, at any time or from time to time,
by action of its Board of Directors, to modify or amend in whole or in
part any or all provisions of the Plan. In addition, the Corporation
reserves the right by action of its Board of Directors to terminate the
Plan in whole or in part. Such termination shall not affect the amount
in the Participant's Account as of the date of such modification,
amendment or termination. In addition, such modification, amendment or
termination shall not affect the Deferred Compensation Agreements under
which benefit payments had commenced prior to such modification,
amendment or termination of the Plan. Should such modification,
amendment or termination occur during the 5-year deferral period,
Participant is released from obligation to continue deferrals.
ARTICLE IX
MISCELLANEOUS
1. Suicide. Except as hereafter provided no benefit will be payable
under the Plan to a Participant or his Designated Beneficiary in the
event the Participant dies as a result of suicide with twenty-four (24)
months of entering this Plan.
In the event of such suicide, the Participant's Designated Beneficiary
will receive within a reasonable period of time a lump sum equal to the
actual amounts deferred by the Participant under the Plan.
2. Non-Alienation of Benefits. No right or benefit under the Plan shall
be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, and any attempt to anticipate, alienate, sell,
assign, pledge, encumber or charge any right or benefit under this Plan
shall be void.
3. No Trust Created. The obligations of the Corporation to make
payments hereunder shall constitute a liability of the Corporation to a
Participant. Such payments shall be made from the general funds of the
Corporation, and the Corporation shall not be required to establish or
maintain any special or separate fund, or purchase or acquire life
insurance on Participant's life, or otherwise to segregate assets to
assure that such payment shall be made, and neither a Participant, his
estate nor Designated Beneficiary shall have any interest in any
particular asset of the Corporation by reason of its obligations
hereunder. Nothing contained in the Plan shall create or be construed
as creating a trust of any kind or other fiduciary relationship between
the Corporation and a Participant or any other person.
4. Neither the execution of this Plan nor any action taken by the
Corporation pursuant to this Plan shall be held or construed to confer
on a Participant any legal right to be continued as a Director of the
Corporation nor restrict the right of any Participant to terminate his
role as a Director of the Corporation.
5. Designation of Beneficiary. Participants shall file with the
Corporation a notice in writing designating one or more Designated
Beneficiaries to whom payments otherwise due to or for the benefit of
the Participant hereunder shall be made in the event of his death prior
to the complete payment of such benefit. Participants shall have the
right to change the beneficiary or beneficiaries so designated from
time to time; provided, however, that any change shall not become
effective until received in writing by the Administrator.
6. Claims for Benefits. Each Participant or Designated Beneficiary must
claim any benefit to which entitled under this Plan by a written
notification to the Administrator. If a claim is denied, it must be
denied within a reasonable period of time, and be contained in a
written notice stating the following: the specific reason for the
denial; specific reference to the Plan provision on which the denial is
based; description of additional information necessary for the claimant
to present to present his claim, if any, and an explanation of why such
material is necessary.
The claimant will have sixty (6) days to request a review of the denial
by the Administrator, which will provide a full and fair review. The
request for review must be in writing delivered to the Administrator.
The claimant may review pertinent documents, and he may submit issues
and comments in writing. The decision by the Administrator with respect
to the review must be given within sixty (60) days after receipt of the
request, unless special circumstances require an extension (such as for
hearing). In no event shall the decision be delayed beyond one hundred
twenty (120) days after receipt of the request for review. The decision
shall be written in a manner calculated to be understood by the
claimant, and it shall include specific reasons and refer to specific
Plan provisions as to its effect.
7. Binding Effect. Obligations incurred by the Corporation pursuant to
this Plan shall be binding upon and insure to the benefit of the
Corporation, its successors and assigns, and the Participant and the
beneficiary or beneficiaries designated pursuant to section 5 of this
Article IX.
8. Entire Plan. This document and any amendments contains all the terms
and provisions of the Plan and shall constitute the entire Plan, any
other alleged terms or provisions being of no effect.
ARTICLE X
CONSTRUCTION
1. Governing Law. This Plan shall be construed and governed in
accordance with the laws of the State of Vermont.
2. Gender. The masculine gender, where appearing in the Plan, shall be
deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary.
3. Headings, etc. The cover page of this Plan, the Table of Contents
and all headings used in this Plan are for convenience of reference
only and are not part of the substance of this Plan.
THIS PLAN is adopted and becomes effective this ______day of
_______________________, 19_____.
__________________________________
Chairman of the Board
Attest:
_________________________________
Secretary
(Corporate Seal)
<PAGE>
EXHIBIT A
DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT is made this the ________ day of _______, 19___, between
Central Vermont Public Service Corporation, a Vermont corporation
(hereinafter the "Corporation"), and _____________________________ and
Director of the Corporation (hereinafter called "Participant").
WHEREAS, the Board of Directors of the Corporation has approved a
Deferred Compensation Plan for the purpose of attracting and retaining
outstanding individuals to function as Directors of the Corporation;
and
WHEREAS, such Deferred Compensation Plan provides that the Participant
become eligible to participate upon execution of a Deferred
Compensation Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the Corporation and the Participant agree as follows:
1. Participation. This Agreement is made to evidence the Participant's
participation in the Deferred Compensation Plan for Officers of Central
Vermont Public Service Corporation (hereinafter the "Plan"), to set
forth the amount of the Participant's Normal Retirement Benefit and
Survivor Benefit under the Plan.
2. Adoption of Plan. The Plan (and its provisions), as it now exists
and as it may be amended hereafter, is incorporated herein and made a
part of this Agreement.
3. Definitions. When used herein, the terms which are defined in the
Plan shall have the meanings given them in the Plan, unless a different
meaning is clearly required by the context.
4. Deferrals. Pursuant to Article III of the Plan, the Participant
hereby elects to defer the receipt of, and the Corporation hereby
elects to defer the payment of salary, bonus or incentive payments in
the amount of ____________________________________ ($_____________)
dollars per year for each of the Plan years ending December 31, ____,
________, ________, _________, and ___________.
5. Retirement Benefit. The Participant's Normal and Early Retirement
Benefits are as defined in Article IV of the Plan.
6. Survivor Benefit. The Participant's Survivor Benefit is as defined
in Article V of the Plan.
7. Entire Agreement. This Agreement contains the entire agreement and
understanding by and between the Corporation and the Participant, and
no representations, promises, agreements or understandings, written or
oral, not contained herein shall be of any force or effect.
IN WITNESS WHEREOF, the parties have executed this Agreement in
Duplicate originals as of the day and year entered above.
CENTRAL VERMONT PUBLIC SERVICE
CORPORATION
By: _________________________________
Chairman of the Board
Attest:
_____________________________________
Secretary
(Corporate Seal)
PARTICIPATING DIRECTOR:
________________________ (L.S)
Participant
<PAGE>
DESIGNATION OF BENEFICIARY
DEFERRED COMPENSATION PLAN FOR DIRECTORS
OF
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
As a participant in the Deferred Compensation Plan for Directors of
Central Vermont Public Service Corporation, I hereby designate the
following person(s) as "Designated Beneficiary", as that term is
defined and used in the Plan:
I understand that the Designated Beneficiary named above may be changed
or revoked by me at any time by filing a new designation in writing
with the Administrator.
Date _______________________ _________________________
Signature of Participant
<PAGE>
OFFICERS SUPPLEMENTAL DEFERRED COMPENSATION PLAN 10.81
ARTICLE I
PURPOSE
The purpose of this plan is to permit Officers of Central Vermont
Public Service Corporation and subsidiary companies an opportunity to
defer receipt of salary, bonus or incentive payments; and to enable the
Corporation to attract and retain outstanding individuals to function
as officers.
ARTICLE II
DEFINITIONS
When used herein the following terms have the meanings indicated unless
a different meaning is clearly required by the context.
1. "Administrator": The person, persons or committee appointed by the
Board of Directors of the Corporation to administer this Plan.
2. "Corporation": Central Vermont Public Service Corporation and
subsidiary companies, and its corporate successors.
3. "Deferred Compensation Agreement": Written agreement between the
Corporation and a Participant in substantially the form attached hereto
as Exhibit A and made a part hereof.
4. "Designated Beneficiary": One or more beneficiaries, as designated
in writing to the administrator, to whom payments otherwise due to or
for the benefit of a Participant are to be made in the event of the
Participant's death. If no written designation is made by a
Participant, or if the beneficiary is not in existence at the
Participant's death, or if the beneficiary predeceases the Participant,
the Participant is deemed to have designated his estate as beneficiary.
5. "Officer": A person who has been elected to such a position by the
Board of Directors of the Corporation.
6. "Early Retirement": Retirement as an Officer from the Corporation on
or after the later of attainment of age fifty-five (55) and the
completion of five (5) years of Plan participation but prior to meeting
the requirements for Normal Retirement as provided in section 8 of this
Article II.
7. "Early Retirement Date": The first day of the month coinciding with
or next following the date on which a Participant, having met the
requirements for Early Retirement, retires as an Officer from the
Corporation.
8. "Normal Retirement": Retirement as an Officer from the Corporation
on or after the later of attainment of sixty-five (65) and the
completion of five (5) years of Plan participation.
9. "Normal Retirement Date": The first day of the month coinciding with
or next following the date on which a Participant first meets the
requirement for Normal Retirement.
10. "Participant": An Officer who is or hereafter becomes eligible to
participate in the Plan and does participate by electing, in the manner
specified herein, to defer compensation pursuant to the Plan.
11. "Participant's Account": The Participant's Account shall be the
amount deferred by the Participant pursuant to the Deferred
Compensation Agreement, Exhibit A, plus interest as determined by the
Administrator in accordance with the table attached hereto as Exhibit
B. However, the Participant understands and accepts that the present
value of the Plan cost to the Corporation shall remain less than zero
and that all risks of change in the credited interest rate used,
mortality and tax law changes are to be assumed by the Participant.
This may result in additional Plan deferrals which will be reflected in
the balance of the Participant's Account.
12. "Plan": The Deferred Compensation Plan for Officers of Central
Vermont Public Service Corporation contained herein, and as may be
amended from time to time hereafter.
13. "Plan Year": A twelve month period commencing January 1 and ending
the following December 31 with the first Plan year commencing January
1, 1990.
14. "Termination": When an Officer's employment with the Corporation
terminates or is terminated for any reason.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
1. Eligibility.
Any Officer of the Corporation.
2. Participation.
An eligible Officer participates in the Plan by irrevocably
electing, in the manner specified herein, to defer a predetermined
amount for each year for five (5) consecutive Plan Years.
ARTICLE IV
RETIREMENT BENEFITS
1. Normal Retirement Benefit.
(a) Upon retirement as an Officer of the Corporation on or after his
Normal Retirement Date, a Participant shall become entitled to his/her
Normal Retirement Benefit. This Normal Retirement Benefit shall be
determined by the amount in the Participant's Account as of the date of
retirement and shall be retirement and shall be paid out in the form of
a level fifteen (15) year annuity certain, payable in one hundred
eighty (180) equal monthly installments. For purposes of establishing
the retirement annuity the fixed monthly payments will be based upon
the account value at the date of retirement, with interest computed in
the future based on the 60 months interest credited to your account
prior to retirement. Payment of the Normal Retirement Benefit commences
on the first day of the first month after the Participant's Normal
Retirement Date and continues on the first day of each month thereafter
until one hundred eighty (180) monthly payments have been made.
2. Early Retirement Benefit.
(a) Upon Early Retirement, a Participant becomes entitled to his
Early Retirement Benefit. The Early Retirement Benefit shall be
determined by the amount in the Participant's Account as of the date of
Early retirement and shall be paid out in the form of a level fifteen
(15) year annuity certain payable in one hundred eighty (180) monthly
installments and calculated in the same manner as the Normal Retirement
Benefit.
(b) A Participant may have payment of his Early Retirement Benefit
commence on the first day of the first month after his/her Early
Retirement Date or on the first day of any subsequent month preceding
his/her Normal Retirement Date if election is made in writing and
delivered to the Administrator at least thirty (30) days before annuity
starting date.
ARTICLE V
SURVIVOR BENEFITS
1. Events. The Company will pay to a Participant's Designated
Beneficiary a Survivor Benefit as defined in this Article V in the
event a Participant's death occurs as follows:
(a) While serving as an Officer of the Corporation and while a
Participant under the Plan;
(b) after becoming entitled to a Retirement Benefit under Article IV
hereof, but prior to commencement of payment of such benefit; or
(c) after annuity benefits have commenced, but prior to the
completion of one hundred eighty (180) monthly benefit payments.
2. Amount. The amount of Survivor Benefit pursuant to this Article V
will be determined as follows:
(a) The Survivor Benefit will be equal to the value of the
Participant's Account as of the date of death plus interest determined
in the same manner as Normal Retirement Benefit pursuant to Article
IV-l(a) If the Participant's death occurs while serving as an Officer
of the Corporation and while a Participant under the Plan.
(b) The Survivor Benefit will be equal to the continuation of the
monthly benefit payable to the Participant if the Participant's death
occurs after benefit payments have commenced to him/her.
3. Duration. Payment of the Survivor Benefit to a Designated
Beneficiary pursuant to this Article V commences on the first day of
the month following the death of a Participant and continues on the
first day of each month thereafter until a total of one hundred eighty
(180) monthly payments have been made to the Participant or his
Designated Beneficiary.
ARTICLE VI
TERMINATIONS
In the event a Participant's relationship as an Officer of the
Corporation terminates for any reason other than death, Early
Retirement or Normal Retirement, the Participant will have his/her
account paid as follows:
(i) If the Participant's Account is under $25,000 it shall be paid
within thirty (30) days of the date of termination;
(ii) If the Participant's Account is over $25,000, it shall be paid
in one hundred eighty (180) monthly installments commencing at the time
early retirement benefits would have been paid had he/she continued to
be employed by the Corporation as an annuity based on an interest rate
equal to the interest rate credited to the Account for the five (5)
years prior to the early retirement date.
ARTICLE VII
AMENDMENT AND TERMINATION
The Corporation reserves the right, at any time or from time to
time, by action of its Board of Directors, to modify or amend in whole
or in part any or all provisions of the Plan. In addition, the
Corporation reserves the right by action of its Board of Directors to
terminate the Plan in whole or in part. Such termination shall not
affect the amount in the Participant's Account as of the date of such
modification, amendment or termination. In addition, such modification,
amendment or termination shall not affect the Deferred Compensation
Agreements under which benefit payments had commenced prior to such
modification, amendment or termination of the Plan. Should such
modification, amendment or termination occur during the 5-year deferral
period, Participant is released from obligation to continue deferrals.
ARTICLE IX
MISCELLANEOUS
1. Suicide. Except as hereafter provided no benefit will be payable
under the Plan to a Participant or his Designated Beneficiary in the
event the Participant dies as a result of suicide with twenty-four (24)
months of entering this Plan.
In the event of such suicide, the Participant's Designated Beneficiary
will receive within a reasonable period of time a lump sum equal to the
actual amounts deferred by the Participant under the Plan.
2. Non-Alienation of Benefits. No right or benefit under the Plan shall
be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, and any attempt to anticipate, alienate, sell,
assign, pledge, encumber or charge any right or benefit under this Plan
shall be void.
3. No Trust Created. The obligations of the Corporation to make
payments hereunder shall constitute a liability of the Corporation to a
Participant. Such payments shall be made from the general funds of the
Corporation, and the Corporation shall not be required to establish or
maintain any special or separate fund, or purchase or acquire life
insurance on Participant's life, or otherwise to segregate assets to
assure that such payment shall be made, and neither a Participant, his
estate nor Designated Beneficiary shall have any interest in any
particular asset of the Corporation by reason of its obligations
hereunder. Nothing contained in the Plan shall create or be construed
as creating a trust of any kind or other fiduciary relationship between
the Corporation and a Participant or any other person.
4. No Employment Agreement. Neither the execution of this Plan nor any
action taken by the Corporation pursuant to this Plan shall be held or
construed to confer on a Participant any legal right to be continued as
an Officer of the Corporation nor restrict the right of any Participant
to terminate his role as an Officer of the Corporation.
5. Designation of Beneficiary. Participants shall file with the
Corporation a notice in writing designating one or more Designated
Beneficiaries to whom payments otherwise due to or for the benefit of
the Participant hereunder shall be made in the event of his death prior
to the complete payment of such benefit. Participants shall have the
right to change the beneficiary or beneficiaries so designated from
time to time; provided, however, that any change shall not become
effective until received in writing by the Administrator.
6. Claims for Benefits. Each Participant or Designated Beneficiary must
claim any benefit to which entitled under this Plan by a written
notification to the Administrator. If a claim is denied, it must be
denied within a reasonable period of time, and be contained in a
written notice stating the following: the specific reason for the
denial; specific reference to the Plan provision on which the denial is
based; description of additional information necessary for the claimant
to present to present his claim, if any, and an explanation of why such
material is necessary.
The claimant will have sixty (6) days to request a review of the denial
by the Administrator, which will provide a full and fair review. The
request for review must be in writing delivered to the Administrator.
The claimant may review pertinent documents, and he may submit issues
and comments in writing.
The decision by the Administrator with respect to the review must be
given within sixty (60) days after receipt of the request, unless
special circumstances require an extension (such as for hearing). In no
event shall the decision be delayed beyond one hundred twenty (120)
days after receipt of the request for review. The decision shall be
written in a manner calculated to be understood by the claimant, and it
shall include specific reasons and refer to specific Plan provisions as
to its effect.
7. Binding Effect. Obligations incurred by the Corporation pursuant to
this Plan shall be binding upon and insure to the benefit of the
Corporation, its successors and assigns, and the Participant and the
beneficiary or beneficiaries designated pursuant to section 5 of this
Article IX.
8. Entire PIan. This document and any amendments contains all the terms
and provisions of the Plan and shall constitute the entire Plan, any
other alleged terms or provisions being of no effect.
ARTICLE X
CONSTRUCTION
1. Governing Law. This Plan shall be construed and governed in
accordance with the laws of the State of Vermont.
2. Gender. The masculine gender, where appearing in the Plan, shall be
deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary.
3. Headings, etc. The cover page of this Plan, the Table of Contents
and all headings used in this Plan are for convenience of reference
only and are not part of the substance of this Plan.
THIS PLAN is adopted and becomes effective this day of ,
l9 .
For Central Vermont Public Service Corporation
Attest:
Secretary
(Corporate Seal)
EXHIBIT A
DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT is made this the day of ,
19 , between Central Vermont Public Service Corporation, a Vermont
corporation (hereinafter the "Corporation"), and and
Officer of the Corporation (hereinafter called "Participant").
WHEREAS, the Board of Directors of the Corporation has approved a
Deferred Compensation Plan for the purpose of attracting and retaining
outstanding individuals to function as Officers of the Corporation; and
WHEREAS, such Deferred Compensation Plan provides that the Participant
become eligible to participate upon execution of a Deferred
Compensation Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the Corporation and the Participant agree as follows:
1. Participation. This Agreement is made to evidence the Participant's
participation in the Deferred Compensation Plan for Officers of Central
Vermont Public Service Corporation (hereinafter the "Plan"), to set
forth the amount of the Participant's Normal Retirement Benefit and
Survivor Benefit under the Plan.
2. Adoption of Plan. The Plan (and its provisions), as it now exists
and as it may be amended hereafter, is incorporated herein and made a
part of this Agreement.
3. Definitions. When used herein, the terms which are defined in the
Plan shall have the meanings given them in the Plan, unless a different
meaning is clearly required by the context.
4. Deferrals. Pursuant to Article III of the Plan, the Participant
hereby elects to defer the receipt of, and the Corporation hereby
elects to defer the payment of salary, bonus or incentive payments in
the amount of ($ ) dollars per year for each of the
Plan years ending December 31, , , , ,
and .
5. Retirement Benefit. The Participant's Normal and Early Retirement
Benefits are as defined in Article IV of the Plan.
6. Survivor Benefit. The Participant's Survivor Benefit is as defined
in Article V of the Plan.
7. Entire Agreement. This Agreement contains the entire agreement and
understanding by and between the Corporation and the Participant, and
no representations, promises, agreements or understandings, written or
oral, not contained herein shall be of any force or effect.
IN WITNESS WHEREOF, the parties have executed this Agreement in
Duplicate originals as of the day and year entered above.
CENTRAL VERMONT PUBLIC
SERVICE CORPORATION
By:
Attest:
Secretary
(Corporate Seal)
PARTICIPATING OFFICER:
(L.S)
Participant
DESIGNATION OF BENEFICIARY
DEFERRED COMPENSATION PLAN FOR OFFICERS
OF
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
As a Participant in the Deferred Compensation Plan for Officers of
Central Vermont Public Service Corporation, I hereby designated the
following person(s) as "Designated Beneficiary", as that term is
defined and used in the Plan:
I understand that the Designated Beneficiary named above may be changed
or revoked by me at any time by filing a new designation in writing
with the Administrator.
Date
<PAGE>
10.82
TRANSMISSION SERVICE AGREEMENT
Dated: September 1, 1993
This Agreement sets out the terms and conditions under which Central
Vermont Public Service Corporation and Green Mountain Power Corporation
will provide each other transmission and interconnection service.
<PAGE>
TABLE OF CONTENTS
RECITALS ...............................................1
ARTICLE I ..............................................2
GENERAL TERMS AND CONDITIONS.........................2
1.1 Availability..................................2
1.2Obligations of the Parties.....................2
1.3Facilities.....................................2
1.4Termination....................................3
1.5Amendment......................................5
1.6Rights-of-Way..................................5
1.7Continuity of Service..........................6
1.8Metering.......................................8
1.9Use of Facilities..............................9
1.10Withdrawal of Facilities.....................11
1.11Liability....................................11
1.12Access.......................................12
1.13Billings and Payment.........................12
1.14Effect of Federal and State laws.............14
1.15Assignability................................14
1.16Communications between the Parties...........15
1.17Character of Service.........................15
1.18Captions.....................................16
1.19Operating Procedures.........................16
1.20Dispute Resolution...........................16
1.21Severability.................................17
1.22Entitlements.................................18
1.23New Interconnection Points...................18
1.24Peak Demand Adjustments......................18
ARTICLE II.............................................19
Rate Provisions.....................................19
2.1Monthly Charges...............................19
2.2Demand Charge Formula.........................20
2.3Remedies......................................23
ARTICLE III............................................23
Contingencies and Options...........................23
3.1Contingencies.................................23
3.2Options.......................................26
ACKNOWLEDGMENT OF ARBITRATION..........................29
ATTACHMENT A
<PAGE>
TRANSMISSION SERVICE AGREEMENT
This Agreement dated as of September 1, 1993, is entered into by and
between CENTRAL VERMONT PUBLIC SERVICE CORPORATION, a Vermont
corporation with principle offices at 77 Grove Street, Rutland, Vermont
("Central Vermont", or "CV"), and GREEN MOUNTAIN POWER CORPORATION, a
Vermont corporation with principle offices at 25 Green Mountain Drive,
Post Office Box 850, South Burlington, Vermont 05402 ("Green Mountain"
or the "GMP") (together the "Parties").
RECITALS
WHEREAS Central Vermont is a provider of utility services which owns,
operates and maintains certain transmission and distribution facilities
(together the "CV System"); and
WHEREAS Green Mountain is a provider of utility services which owns,
operates and maintains certain transmission and distribution facilities
(together the "GMP System"); and
WHEREAS the Parties desire to take service from each other over the
Interconnection and Delivery Points between the CV System and the GMP
System as more particularly described on Attachment A (the
"Interconnection and/or Delivery Points") and to provide for the
development of such additional Interconnection Points as are beneficial
to the Parties; and
WHEREAS the Parties desire this agreement to supersede all existing
transmission contracts between them;
WHEREAS the Parties desire to contract with each other for transmission
and interconnection service as more particularly described herein;
NOW THEREFORE, in consideration of the mutual promises and covenants
herein contained and for good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
ARTICLE I
General Terms and Conditions
1.1 Availability. Service under this Agreement is available from
Central Vermont for flows across the CV System and from Green Mountain
for flows across the GMP System at the Interconnection and/or Delivery
Points identified on Attachment A for a term of fifteen (15) years
from the date that service commences unless otherwise agreed
to or as provided for herein.
The Parties expressly acknowledge that the service that will be
provided and charged for at Wilder are deliveries by CVPS to serve
GMP's load at Wilder and incidental deliveries to Wilder by CVPS for
use by CVPS are not to be used in the calculations of demand for either
CVPS or GMP.
1.2 Obligations of the Parties. Each Party, by taking service under and
entering into this Agreement, agrees to take and pay for, and to
furnish, the service, subject to the terms and conditions of this
Agreement, including Article 1.5, as it may be in effect from time to
time, and subject to the action of such regulatory authorities having
jurisdiction. The Parties understand and agree that their obligation to
provide service and to take service hereunder is expressly conditioned
upon the receipt of all necessary regulatory approvals for this
Agreement in the form as executed as may be necessary or required for
the provision of service hereunder. In the event that such approvals
are not received, the Parties agree to participate in further
discussions, including mediation, in order to attempt to reach
agreement on the terms and conditions for the provision of the
transmission and interconnection service provided for herein. Central
Vermont and Green Mountain shall have the obligation to operate in
accordance with good utility practice, including the New England Power
Pool ("NEPOOL") emergency load-reduction program, and upon request, to
consult with each other in regard thereto. No provision of this
Agreement shall become effective unless this Agreement is approved
without change by FERC or any other regulatory body exercising
jurisdiction.
1.3 Facilities. It is expressly understood that each party will
construct, reconstruct, own, operate and maintain such facilities on
its system as are necessary to provide transmission and interconnection
service to the other party as required through the interconnection
points identified in Attachment A to this Agreement, as it may be
amended from time to time, subject to the provisions of Article 3 below
and the following conditions:
(a) any facilities to be constructed or reconstructed shall satisfy the
supplying Party's design criteria, or must be modified to satisfy those
criteria, which criteria may be modified from time to time in
accordance with good utilitypractice; and
(b) all appropriate and necessary licenses and permits are secured from
the regulatory bodies having jurisdiction.
1.4 Termination. This Agreement may be terminated at any time if both
Central Vermont and Green Mountain agree to the termination. If there
is no agreement to terminate, the Agreement will remain in full force
and effect for a term of fifteen (15) years from the date that service
is commenced as described in Article 1.1, or from such other date as
provided for in accordance with this Agreement. Upon termination,
nothing shall obligate the Parties to take said transmission or
interconnection service or to provide said service.
Notwithstanding the above, the receiving party at any interconnection
point may elect to terminate service at that interconnection point upon
six months written notice to the supplying party. In the event of such
termination the receiving party shall, within 30 days of termination of
service, reimburse the supplying party for any unrecovered Project
Costs, as described in Article 2.2, with respect to that
interconnection point, and shall have no further obligation to make
payment pursuant to this Agreement with respect to the terminated
interconnection point, assuming no service is taken. The parties shall
modify Attachment A to reflect the termination of service at any
interconnection point pursuant to this section.
Once a party terminates service hereunder, that service may not be
reinstated except with the consent of the supplying party or upon
payment of all charges hereunder by the receiving party as if there had
been no termination. Any cost to the supplying party resulting from
the restoration of service after termination is a project cost
hereunder which is the responsibility of the receiving party. With
respect to Johnson Interconnection, service will be terminated on the
effective date of the Transmission Contract between CVPS and the
Northern Loop Companies.
1.5 Amendment. Nothing in this Agreement shall be construed as
affecting either Party's right at any time to apply to the Federal
Energy Regulatory Commission to amend their respective Transmission
Charges (TC) described in Article 2.2 of this Agreement. Other
provisions of this Agreement may be amended by the written agreement of
the Parties. In the event that a Party exercises its right to seek to
amend said Transmission Charge, the other Party shall be afforded the
same rights concerning the change in rates as customers taking service
pursuant to said rate.
1.6 Riqhts-of-Way. The obligations of the Parties are subject to and
conditioned upon securing and retaining all rights-of-way, franchises,
locations, permits and other rights and approvals necessary in order to
permit service and or to construct, reconstruct or modify facilities
required hereunder, including approval of this Agreement, and each
party agrees to use its best efforts to secure and retain all such
rights-of-way, franchises, permits and other rights and approvals
throughout the pendency of this Agreement.
1.7 continuitY of Service. The Parties shall use their best efforts to
provide service under this Agreement but shall not be responsible for
any failure to supply service, nor for interruption, reversal of flow,
or abnormal voltage of the supply, if such failure, interruption,
reversal or abnormal voltage is without willful default or gross
negligence. The Parties do not guarantee to deliver or transmit a
constant supply of electricity hereunder and the supplying Party shall
not be considered to be in default hereunder, and shall be excused from
delivering and transmitting electricity hereunder, if and to the extent
that it shall be prevented from doing so by storm, flood, lightning,
earthquake, fire, explosion, equipment failure, civil disturbance,
labor dispute, act of God or the public enemy, action of a court or
public authority, or any other cause beyond that Party's reasonable
control.
Whenever the integrity of the supplying Party's System or the supply of
electricity is threatened by conditions on that Party's System or on
the systems with which it is directly or indirectly interconnected, or
whenever it is necessary or desirable to aid in the restoration of
service, the supplying Party may, in its reasonable judgment, curtail
or interrupt electric service or reduce voltage to the receiving Party,
and such curtailment, interruption or reduction shall not constitute
willful default by the supplying Party. When the supplying Party
interrupts or varies electric service to make repairs to or changes in
its facilities, such action shall be taken upon reasonable notice to
the receiving Party, or without notice in an emergency when such
notification would be impracticable or would prolong a dangerous
situation. The priority of the transmission service hereunder follows
service by the supplying party to its retail and firm wholesale
transmission customers and before any other customers, unless the
receiving Party has declined to pay for needed facilities in Paragraph
3.1.C. For purposes of this section, firm wholesale transmission
customers as to Central Vermont are those customers taking service
under Tariffs R-3, R-12, RS-2 and the so-called Northern Loop
customers, or any successor tariffs thereto.
Interruption of service for reasons beyond the control of the supplying
Party or for purposes of repair or restoration of the system as
described above shall not relieve the receiving Party of its
obligations to make payment under this Agreement. If, however, due to
the supplying Party's failure to perform in accordance with good
utility practice, facilities are unavailable or out of service,
billings to the receiving Party shall be proportionately reduced for
the duration of the outage.
1.8 Metering. The Parties agree to install and maintain metering, at
the Point(s) of Interconnection and Delivery, capable of recording data
in such detail as to calculate billing determinants under this
Agreement. For existing interconnections at the date of this contract
signing, existing metering shall be used. For any new interconnection
the supplying company shall install and maintain metering as described
herein.
(a) Should metering be required by the supplying Party at a point or
points other than the Point(s) of Interconnection and/or Delivery, the
metering equipment shall be compensated to register values which would
have been recorded if the equipment had been located at the Point
of Interconnection or Delivery.
(b) The accuracy of the metering equipment shall be verified by proper
test and adjusted as close as practical to 100% accuracy at least once
each year. The work of testing and adjusting any meter for accuracy
shall be performed at the expense of the Supplying Party; provided
that if the receiving Party shall request additional verification of
the accuracy of any meter in any twelve (12) month period, and the
meter proves to be accurate within two (2) percent up or down, the
expense of such verification shall be borne by the receiving Party. The
receiving Party shall be given the opportunity to witness the
additional verification.
(c) If such equipment is found to be inaccurate by more than two (2)
percent up or down, the equipment shall be made accurate and the meter
readings for the period of inaccuracy shall be adjusted to correct such
inaccuracies as far as the same can be reasonably ascertained, but no
adjustment prior to the beginning of the fourth preceding month shall
be made except by agreement of the Parties.
(d) In the event that the supplying Party's meters fail to register
properly during any billing period, the demand and loss adjustments
shall be estimated by the supplying Party based upon the best available
data and such data shall be made available to the receiving Party upon
request.
(e) If requested by the supplying Party, the receiving Party agrees to
supply, free of cost, at the Point(s) of Interconnection and/or
Delivery or such other points, suitable location(s) for the
installation of the supplying Party's metering equipment. Such
location(s) shall be established by agreement between the Parties.
(f) Upon request of any Party, metering records with respect to service
provided hereunder shall be made available for inspection and pertinent
summaries thereof shall be forwarded from time to time.
1.9 Use of Facilities. (a) The receiving Party shall exercise diligence
to operate its electric system to maintain a power factor of not less
than 90 percent (90%) lagging as measured on a monthly basis. Such
power factor may be adjusted by mutual agreement or, failing mutual
agreement, by rules as developed pursuant to the NEPOOL Agreement.
(b) The receiving Party shall operate its Interconnections and/or
Delivery Points in a manner as not to interfere with service to the
supplying Party's other customers, and further shall balance the load
on the various portions of its system so that the electric load at the
Points of Interconnection and/or Delivery of the two systems will be as
nearly equal as practical on each of the three phases with a load
differential between the highest phase and the lowest phase not
exceeding the ratio of 1:1.3.
(c) The supplying Party reserves the right to establish an electric
load limit through the Points of Interconnection and/or Delivery for
voltage, amperage or other electrical characteristics for both normal
and emergency operations in accordance with good utility practice.
Should these limits be exceeded at any time, the supplying Party may,
without penalty, interrupt its provision of service hereunder for the
duration of the period that the load limit is exceeded. The supplying
Party shall restore service when, in its sole judgment, it can
reasonably provide electric service in a safe and reliable manner
without effecting its deliveries to the supplying Party's customers.
(d) With respect to each Interconnection and/or Delivery Point the
Parties agrees to provide each year, on or before May 1st, an updated
five (5) year forecast of the following information for said point(s):
(i) their expected winter and summer peak loads including power factor;
(ii) any and all completed, in progress, and/or expected changes to
their sub-transmission systems; and
(iii) any and all completed, in progress, and/or expected changes to
their generation facilities.
This information shall be provided so that the Parties may properly
plan for required increases in the capacity of their respective
systems.
1.10 Withdrawal of Facilities. At such time as the
Parties' obligations under this Agreement terminate, the
Parties may, at their sole independent discretion, terminate
their Interconnections and/or Delivery Points with each
other's facilities. Effective on the date of any such
termination, the Parties shall have no further obligations
under this Agreement with respect to the Interconnection
and/or Delivery Point(s) or related facilities and shall
have the right, but not the obligation, to dismantle and
remove its related interconnection facilities.
1.11 Liability. Each Party shall indemnify and save the other harmless
from and against all costs and damages by reason of bodily injury,
death, or damage to property caused by or sustained on facilities it
owns or controls as a result of performance under this Agreement.
However, each Party shall be solely responsible for and shall bear:
(i) all costs arising from any events resulting in bodily injury,
death, or damage to property caused by the actions of its own
employees, contractors, or agents no and to construct and maintain its
lines and circuits in and at all places required by the supplying Party
and owned, leased or controlled by the receiving Party as necessary to
perform this Agreement. The receiving Party gives to the supplying
Party the right for its duly authorized agents and employees to enter
the premises of the receiving Party at all reasonable times for the
purpose of reading meters, keeping in repair or removing its property,
or inspecting its work incident to rendering service under this
Agreement.
1.13 Billings and Payment. (a) All meters shall be read monthly and all
bills rendered monthly by the supplying Party in such reasonable detail
as the receiving Party may request. All monthly bills may be estimated,
subject to correction by the supplying Party to adjust for changes in
the Transmission Charge (TC) as may be allowed under its respective
Federal Energy Regulatory Commission approved tariff for the provision
of transmission service, as amended from time to time, and to correct
from estimated values for all other billing determinants. Such
adjustments shall be made annually. If a Party is unable to obtain the
reading of a meter, it may estimate the reading. All bills shall be due
and payable upon presentation. In the event of a dispute as to the
amount of any bill, the disputing Party will notify the other Party of
the amount in dispute and will pay the total bill including the
disputed amount. In such event, the Parties shall use their best
efforts to resolve such dispute within a reasonable amount of time not
to exceed sixty (60) days from the date of such notice. The supplying
Party shall refund, with simple interest at the rate described in
paragraph (c), any portion of the disputed amount ultimately found to
be improper.
(b) No Party shall have the right to challenge the accuracy of any
bill, invoice or statement, nor bring any court or administrative
action of any kind questioning the accuracy of the same after a period
of eighteen (18) months from the date it is rendered. In the case of a
bill, invoice or statement containing estimates, the receiving Party
shall not have the right to challenge its accuracy after a period
of twelve (12) months from the date it is adjusted to reflect the
actual amounts due. The receiving party's rights hereunder relate to
the mathematical accuracy of the billing computations provided with the
bill and the compliance of the rates and charges with this Agreement,
and do not relate to the justness and reasonableness of the rates and
charges or the cost of service data underlying them, which subjects are
covered by Article 2.2.
(c) When all or part of any bill shall remain unpaid for more than
thirty (30) days from the mailing thereof, the receiving Party shall
pay to the supplying Party simple interest at one-hundred-twenty (120)
percent of the then prime rate offered by the Bank of Boston, its
successors or assigns, with such interest to be computed on the unpaid
amount from and after the thirtieth (3Oth) day from the date of the
mailing of said bill until the date upon which the payment is received
by the supplying Party.
1.14 Effect of Federal and State Laws. The obligations of the Parties
hereunder are subject to any present and future federal and state laws,
regulations, orders or other requirements duly promulgated; provided,
however, that the Parties' obligation to provide service hereunder is
expressly conditioned upon the receipt of necessary regulatory
approvals for this Agreement in the form as executed.
1.15 Assignability. This Agreement shall inure to the benefit of, and
shall bind, the successors of the Parties hereto but shall not be
assignable without the prior written consent of the Parties; provided,
however, that both Parties shall retain a unilateral right to assign
this Agreement to an affiliate corporation.
1.16 Communications between the Parties. Except for bills or
statements, any notice, demand or request provided for in this
Agreement shall be deemed to be properly given or made, within three
(3) business days of the date thereof, if set forth in writing and
delivered or sent by certified mail, return receipt requested, postage
prepaid to the Party at their principal offices as first described
above or at such other location(s) as may be agreed to by the Parties
in writing.
For Central Vermont, attention:
Senior Vice President - Engineering and Energy
Supply Planning
For Green Mountain, attention:
Assistant Vice President for Operations and
Maintenance.
1.17 Character of Service. Service under this Agreement shall be one of
four types: A, B, C, or D. All such service will be furnished in the
form of three-phase sixty-hertz alternating current at the nominal
voltage for each Interconnection and/or Delivery Point as set forth on
Attachment A.
(a) "Type A" is described as transmission and interconnection service
taken across any Interconnection and/or Delivery Point for periods
greater than 168 hours in any calendar year.
(b) "Type B" is described as transmission and interconnection service
taken across any Interconnection and/or Delivery Point for over 96
hours up to and including 168 hours in any calendar year.
(c) "Type C" is described as transmission and interconnection service
taken across any Interconnection and/or Delivery Point for over 48
hours up to and including 96 hours in any calendar year.
(d) "Type D" is described as transmission and interconnection service
taken across any Interconnection and/or Delivery Point up to and
including 48 hours in any calendar year.
(d) The calculation of the rates for Types of Service A, B, C, and D
are described in the Rate Provision of Article II, under Section 2.2.
1.18 CaPtions. The caption headings contained in this Agreement are
provided for convenience and shall not be deemed to be a part of this
Agreement.
1.19 Operating Procedures. All interconnected operations engaged in
pursuant to this Agreement shall be conducted in accordance with such
operating protocols and agreements as may be agreed to by the Parties
from time to time. In accordance herewith, the Parties shall make such
arrangements with the electric systems with which they are connected to
assure adherence to said operating protocols and agreements.
1.20 Dispute Resolution. The Parties shall attempt in good faith to
resolve between themselves any disputes that may arise hereunder. In
the event that the Parties are unable to resolve any such dispute, the
matter shall be immediately referred to the executives of the Parties
who have authority to resolve the dispute. If these executives are
unable to agree upon a solution within thirty (30) days, the Parties
shall have recourse to mediation, arbitration, or other alternative
dispute resolution device of their mutual selection. If the Parties
cannot agree on an alternative dispute resolution device, arbitration
shall be selected. Any arbitration shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration
Association unless otherwise agreed upon. The award rendered by any
arbitrator or resolution reached in any alternative dispute resolution
proceeding shall, to the extent applicable law permits, be final and
binding and judgment may be entered upon it in accordance with the
applicable law in any court or regulatory body having jurisdiction
thereof.
1.21 Severability. Should any clause, sentence or paragraph of this
Agreement be judicially declared invalid, unenforceable or void, such
decision shall not have the effect of invalidating or voiding the
remainder of this Agreement unless said clause, sentence or paragraph
shall go to the heart of this Agreement, and the Parties hereto agree
that the part or parts of this Agreement so held to be invalid,
unenforceable, or void shall be deemed to have been stricken and the
remainder shall have the same force and effect as if said part or parts
had never been included 1.22 Entitlements. (a) "Entitlement" means the
portion of the capability of a generating unit to which the purchaser
is entitled as an owner (either solely or in common) or as a purchaser
pursuant to a unit or system power contract, less any part thereof
which the purchaser is selling pursuant to a unit or system power
contract.
(b) The purchaser may wheel Entitlements over a supplying Party's
System without additional charge to the extent that the purchaser's
Entitlement megawatt level is below that of the combined annual
Customer Demand (CD) determined for all Interconnection and Delivery
Points in accordance with Article 2.2 below.
1.23 New Interconnection Points. Any additional Interconnection and/or
Delivery Points subsequently constructed between the Parties shall be
deemed added to Attachment A and shall be subject to this Agreement.
1.24 Peak Demand Adjustments. Due to the nature of interconnected
electrical systems, unusual circumstances outside of the control of the
receiving Party may occur from time to time at the request of the
supplying Party which will increase the amount of power provided by the
supplying Party over firm Interconnection points. If such
circumstances occur as the result of a request by the supplying Party,
the receiving Party shall be held harmless of and from any and all
costs which may arise hereunder and the Parties agree to exclude any
demands thus arising from the calculation of peak demand pursuant to
Article II hereof. Such requests may be made by the supplying Party
orally however, they shall be followed up in writing as provided for in
paragraph 1.16 above.
ARTICLE II
Rate Provisions
2.1 Monthly Charges. For each Interconnection/Delivery Point identified
on Attachment A, the receiving Party shall pay to the supplying party
the following monthly charges as described below:
(a) A Demand Charge which is determined in accordance with Article 2.2;
(b) A Customer Charge consisting of a direct assignment of regulatory
commission expenses and related costs which can be identified as
pertaining to the receiving Party in connection with service under this
Agreement within the service year exclusive of any costs included in
the calculation of the Reservation Demand pursuant to paragraph 2.2
below;
(c) To the extent that the receiving party fails to maintain the power
factor as described in paragraph 1.9, the supplying party may charge
for KVAR of excess reactive demand determined by multiplying the excess
reactive demand by the Supplying Party's rate for excess KVAR as set
out in that Party's FERC approved transmission tariff as amended from
time to time. At each Interconnection/Delivery Point, the excess
reactive demand will be the difference between the peak recorded
reactive demand (KVAR) and 50% of the peak recorded kilowatt (kW)
demand during the billing month;
(d) A Delivery Charge consisting of an assignment of the costs incurred
by the supplying Party in operating and maintaining the
Interconnection/Delivery Point(s) and other facilities developed or
reconstructed in connection with the provision of service hereunder,
including associated property taxes and allowance for working capital
and in performing the metering and billing provided for in this
Agreement; and
(e) A Loss Adjustment charge consisting of all incremental losses
incurred by the supplying Party in the provision of service hereunder.
The supplying Party will determine the loss value based on the
superimposition of electricity transmitted hereunder on other
electricity flowing within that Party's System to supply its own loads
and its obligations to others. The loss values may be adjusted by the
supplying Party from time to time consistent with changes in its System
losses as determined by that Party. Initial losses to be used are as
per Attachment A.
2.2 Demand Charge Formula.
The annual Demand Charge is calculated and pro-rated monthly in
accordance with the following formula:
Demand Charge = the receiving Party's Demand *
Transmission Charge
DC = CD * TC
Where:
Customer's Demand = the greater of Reservation
Demand or the Actual Demand
CD = the greater of RD or MD
and
Reservation Demand = (Project Cost * Annual
Carrying Charge) divided by
the Transmission Charge
RD = (PC * AC) / TC
Project Cost PC = the sum of all costs incurred by the
supplying Party in the development of new
facilities and/or reconstruction of
facilities from time to time as required,
and in pursuit of regulatory approvals as
necessary for the supplying Party to provide
service hereunder including, without implied
limitation, in the case of Central Vermont
and the Bennington Delivery Point all costs
which are incurred in accordance with a
certain Memorandum of Understanding, dated
January 12, 1993, and entered into by and
between the Parties.
AC = The Annual Carrying Charge applicable to
each investment made in accordance with the
terms and conditions of this Agreement.
= (i) * [(l+i)^n]/6[(l+i)^n]-l)
i = The "Weighted Pre-tax Rate" calculated using
the supplying Party's capital structure of
Equity, Debt, and Preferred, and the FERC
allowed pre-tax annual rates for Equity,
Debt and Preferred, as determined:
(a) for CV, in accordance with its FERC
ELECTRIC TARIFF, Original Volume No. 3, as
amended from time to time; and (b) for GMP,
in accordance with Paragraph 3 of GMP's
Transmission Contracts referred as FERC
Schedules numbers 64, 68, 72 and 73 in
FERC Docket No. ER 92-330-000 amended from
time to time.
n = The term which is the number of years from
the commencement of service from the new
facilities or reconstruction of facilities
required pursuant to this Agreement (the
"investment") to the completion of the term
of this Agreement, as in effect at the time
the decision to make the investment is made.
To the extent that t he term of the
Agreement is extended by mutual consent, the
(n) value shall not be adjusted for existing
investments. Any extended term for
this Agreement, shall be used in determining
the (n) value for investments made after the
extension of said term.
TC = As applicable, Central Vermont's
transmission capacity charge as established
in accordance with Article 2.2 of its FERC
ELECTRIC TARIFF, Original Volume No. 3, as
amended from time to time; or Green
Mountain's transmission capacity charge as
established in accordance with Paragraph 3
of GMP's Transmission Contracts referred as
FERC Schedules numbers 64, 68, 72 and 73 in
FERC Docket No. ER92-330-000 as amended from
time to time.
and
Modified Demand (MD) = Is the product of the Actual Demand (AD) and
the Demand Modifier (DM).
MD = AD * DM
Actual Demand (AD) = The receiving Party's peak electrical
demand for the calendar year as metered for
each Interconnection/Delivery point. For the
calendar year in which service is first
taken, the period for measuring peak demand
shall be from the commencement of service
through December 31 of that year. For
billing purposes, peak electric demand shall
estimated by the supplying Party annually
based on the twelve months of the preceding
calendar year. For the initial year of the
Agreement, these estimated demand values are
identified on Attachment A. A true-up will
be done at the end of each year and
reflected, with interest, in the January
billing of the following year.
Demand Modifier (DM) = For Type A Service the DM shall be 100%. For
Type B Service the DM shall be 75%.
For Type C Service the DM shall be 50~. For
Type D the DM shall be 0%.
2.3 Remedies. If any bill remains unpaid for more than sixty (60) days,
upon providing such Party with thirty (30) days written notice and
opportunity to cure the default, the supplying Party may suspend its
provision of service hereunder until full payment has been made of all
amounts due. The foregoing remedy shall not be deemed to be a waiver of
any other remedies to which either party is legally entitled.
ARTICLE III
Contingencies and Options
3.1 Contingencies. (a) Periodically as agreed to by the Parties, but at
least within five (5) years from the date that service is first
provided hereunder, each Party shall perform and the other shall pay
for a study to determine if additional facilities are required in order
to allow for flows across the Interconnection and Delivery Points
identified on Attachment A. If the studiesdemonstrate that flows are
materially greater than can reliably be served with existing facilities
at any Interconnection or Delivery Point, the supplying Party shall
determine what additional facilities or modification to existing
facilities must be developed in order to provide for continued service
hereunder.
(b) Any facility modifications or additions shall be the responsibility
of the supplying Party and that Party shall make and pay for such
facility additions or modifications subject to the terms of paragraph
(c) of this Section.
(c) The results of said studies and notice of the supplying Party's
intent to develop additional facilities shall be provided to the
receiving Party at its address as first described above. If the
receiving Party notifies the supplying Party within six (6) month of
the date of said notice that it does not desire that the additional
facilities be developed or modification to existing facilities be
performed, the supplying Party's recommendations shall be deemed to
have been rejected. In such event, the supplying Party shall continue
to provide service throughout the remainder of the term of this
Agreement or until the receiving Party elects to terminate service at
the Interconnection Point pursuant to Section 1.4., provided, however,
that such service shall be provided only to the extent that the Party
has the capability to do so. Should capability not be available at any
time throughout the remainder of the Agreement, said service may
be interrupted by the supplying Party during those times without
penalty. Nothing in this section shall relieve the receiving Party of
its obligation to make payments as provided for in this Agreement and
no adjustment in the rate shall be made on account of the interruptions
in said service .
(d) If the receiving Party does not reject the supplying Party's
recommendations, the supplying Party shall construct, reconstruct, own,
operate and maintain such additional facilities, or make modifications
to such existing facilities, as are necessary for the continued
provision of service as determined by the studies. The supplying
Party's duty to develop said additional facilities, or modify its
existing facilities, shall be subject to its receipt of all necessary
approvals of regulatory bodies of competent jurisdiction. Should the
supplying Party fail to obtain said approvals, said service may be
interrupted by the supplying Party without penalty. Nothing in this
section shall relieve the receiving Party of its obligation to make
payments as provided for in this Agreement and no adjustment in the
rate shall be made on account of the interruptions in said service.
(e) Unless otherwise provided for herein, the full cost incurred in the
performance of said studies and in the development of such additional
facilities, or modification to existing facilities, as are required to
provide the service contemplated by this Agreement shall be deemed to
be Project Costs (PC) within the meaning of the Reservation Demand (RD)
formula described in Article 2.2. Once such costs are incurred by the
supplying Party, said Reservation Demand (RD) shall be adjusted by
including the additional Project Costs (PC) and amending the Annual
Carrying Charge (AC) such that the full costs of these additional
facilities and studies are recovered by the supplying Party in the
remaining term of this Agreement.
(f) Nothing in this section shall obligate the supplying Party to pay
wheeling charges to third parties, without equal compensation from the
receiving Party, for wheeling by third Parties or for use of their
facilities in the provision of service to the receiving Party.
3.2 Options. Extend no build. (a) When each supplying Party conducts
the studies described in Article
3.1(a), it shall determine if and to what extent it can provide service
to the receiving Party for a term greater than that provided for by
this Agreement. Should the supplying Party determine that it has the
capability to continue service pursuant to this Agreement for a term
materially greater than that provided for in Article 1.1, the Party
will offer to extend the term, by a writing sent to the receiving Party
at its address as first described above. Such offer shall be made on
terms agreeable to the supplying Party. If the receiving Party notifies
the supplying Party within six (6) months of the date of said notice
that it does not desire to extend the term as offered, the supplying
Party's offer shall be deemed to have been rejected. If the receiving
Party fails to notify the supplying Party within six (6) months, or if
the receiving Party accepts the offer, the receiving Party shall be
deemed to have agreed to an extension of the term of this Agreement
and the Agreement's term shall be extended accordingly.
(b) Extend, build. When a supplying Party conducts a study as described
in Article 3.1(b), that Party may, at its sole discretion, propose to
develop additional facilities which would allow for the continuation of
service to the receiving Party pursuant to this Agreement for a term
greater than that provided for in Article 1.1, and shall so notice the
receiving Party. If the receiving Party notifies the supplying Party
within six (6) month of the date of said notice that it does not desire
to extend the term as offered, the offer shall be deemed to have been
rejected.
If the receiving Party fails to notify the supplying Party within six
(6) months, or if the receiving Party accepts the offer, the receiving
Party shall be deemed to have agreed to an extension of the term of
this Agreement and the Agreement's term shall be extended accordingly.
The full cost incurred in the development of such additional facilities
as are required to provide the service for the additional term shall be
deemed to be Project Costs (PC) within the meaning of the Reservation
Demand (RD) formula described in Article 2.2. Once such costs are
incurred by the supplying Party, said Reservation Demand (RD) shall be
adjusted by including the additional Project Costs (PC) and amending
the Annual Carrying Charge (AC) such that the full cost of these
additional facilities are recovered by the supplying Party in the
remaining term of this Agreement as amended.
ACKNOWLEDGMENT OF ARBITRATION
The Parties hereto understand that this Agreement contains an agreement
to arbitrate. After signing this document, the Parties understand that,
to the extent the law permits, they will not be able to bring a law
suit concerning any dispute that may arise which is covered by the
arbitration agreement, unless the dispute involves a question of
constitutional or civil rights. Instead the Parties agree to submit any
such dispute to an impartial arbitrator.
THIS AGREEMENT made at Rutland, Vermont.
CENTRAL VERNONT PUBLIC
SERVICE CORPORATION
/s/ Marc Schaefer
Director, Power Supply
GREEN MOUNTAIN POWER
CORPORATION
/s/ Craig T. Myotte
Asst. Vice President
<PAGE>
ATTACHMENT A
INTERCONNECTION AND/OR DELIVERY POINTS
Location Type Supplier Purchaser Nominal Estimated Loss Estimated
Service Voltage Demand Factor Reservation
(KV) (KW) % Demand
(MW)
Vergennes A GMP CVPS 46 3,000 .50 0
Vergennes A CVPS GMP 46 10,000 .75 0
Wilder A CVPS GMP 46 10,000 .20 0
Ryegate A GMP CVPS 35 10,000 .50 0
Bennington D CVPS GMP 69 0 1.05 0
Vernon D CVPS GMP 69 0 6.53 0
Vernon D GMP CVPS 69 0 6.53 0
Johnson D CVPS GMP 35 0 5.5 summer 0
8.0 winter
<PAGE>
TWENTY-NINTH AGREEMENT AMENDING 10.16.24
NEW ENGLAND POWER POOL AGREEMENT
THIS AGREEMENT, dated as of the 1st day of May, 1993 is entered into by
the signatories hereto for the amendment by them of the New England
Power Pool Agreement dated as of September 1, 1971 (the "NEPOOL
Agreement"), as previously amended by twenty-eight (28) amendments, the
most recent of which was dated as of September 15, 1992.
WHEREAS, Participant generation resources, other than hydroelectric
units, whose annual hours of operation are restricted by regulatory
requirements, contract terms or engineering or operating constraints,
may require treatment different from that otherwise provided in the
NEPOOL Agreement for Capability Responsibility and energy billing
purposes; and
WHEREAS, the signatory Participants have determined to amend the NEPOOL
Agreement in the manner specified below in order to provide for a
modified Capability Responsibility and energy billing treatment for
restricted generation resources.
NOW THEREFORE, the signatories hereby agree as follows:
SECTION I
TEXT OF AMENDMENTS
A. Amendment of Section 9.2(b)(2)
Section 9.2(b)(2) of the NEPOOL Agreement is amended by inserting the
following additional provisions immediately following the present final
paragraph of Section 9.2(b)(2):
The New Unit Adjustment Factor for any Restricted Unit for which
proposed plans were submitted subsequent to November 1, 1990 for review
pursuant to Section 10.4 (or, in the case of a unit with a rated
capacity of less than 5MW, for which notification was first given to
NEPOOL subsequent to November 1, 1990) and for the Peabody Municipal
Light Plant's Waters River #2 unit shall be determined in accordance
with the formula previously specified in this Section 9.2(b)(2),
modified as follows:
n = K1(c-C) + K2(f-F) + K3(m-M) + K4(d-D) +
K5(f-F)c2 + K6(2500-a)
The symbols used in the above formula, as modified, shall have the
meanings previously specified, except
that the symbols "K6" and "a" shall have the following meanings:
K6 is a scaling factor of 0.0001.
a is as follows:
for units with more than 2500 annual hours available for operation, "a"
= 2500,
for units with annual hours available for operation between 500 and
2500, inclusive, "a" = annual hours available for operation, and
for units with annual hours available for operation less than 500
hours, "a" = -7500;
provided, however, that a Participant may elect to avoid, in whole or
part, the effect on its Capability Responsibility of a Restricted
Unit's availability being limited to 2500 hours or less a year by
agreeing to leave unfilled a portion of its dispatchable load
allocation in accordance with rules to be adopted by the Operations
Committee.
B. Amendment of Section 12.6
The first two sentences of Section 12.6 of the NEPOOL Agreement are
amended to read as follows:
If pursuant to Section 12.5A, a Participant is deemed to have received
energy service in any hour when the Participant (i) had Entitlements in
one or more generating units which were available for service but were
not scheduled for operation by NEPEX at their full available Reserve
Capability (or, to the extent applicable, at their full available
Temporary Reserve Capability) and which, in the case of any Restricted
Unit, had an unused portion of an available Restricted Unit Operational
Allowance and/or (ii) had Scheduled Outage Service Entitlements, the
Participant shall be deemed to have received Economy Flow Service
and/or Scheduled Outage Service in an amount equal to the lesser of:
(a) the amount of energy service the Participant is deemed to have
received pursuant to Section 12.5A, or
(b) the amount of energy service which could have been provided from
its share of (1) the unused portion of the available Reserve or
Temporary Reserve Capabilities of the units described in (i) above, as
limited in the case of any Restricted Unit by the unused portion of its
available Restricted Unit Operational Allowance, plus (2) its Scheduled
Outage Service Entitlements.
Economy Flow Service is service which a Participant is deemed to
receive at any time to replace service which it could have provided at
the time from units described in (i) above, and the amount of Economy
Flow Service which it is deemed to receive at the time shall not exceed
the amount of energy service which could have been provided from its
share of the unused portions of the available Reserve Capabilities (or,
to the extent applicable, the unused portion of the available Temporary
Reserve Capabilities or the unused portion of
the available Restricted Unit Operational Allowances, whichever is
controlling) of such units.
C. Addition of Definitions of "Restricted Unit" and "Restricted Unit
Operational Allowance".
The NEPOOL Agreement is amended by adding the following definitions
following the definition of "Reserve Savings Shares" in Section 15.37A:
15.37B. Restricted Unit is a generating unit, other than a
hydroelectric unit, that is restricted in annual hours available for
operation by regulatory requirements, contract terms or actual
engineering or operating constraints. Planned or forced outages due to
maintenance requirements are not considered restrictions in annual
hours available for operation.
15.37C. Restricted Unit Operational Allowance ("Allowance") for a
Participant's Entitlement in a Restricted Unit for any calendar year
(or for the term of the
Entitlement in any year, if such term is for a shorter period than the
year) is the number of hours for which the Restricted Unit is available
for operation during the year or such shorter period, whichever is
applicable. The Allowance for a Participant's Entitlement in a
Restricted Unit for any year or shorter period shall be deemed to be
exhausted when (i) the number of hours that the Operations Committee
determines the Participant would have used its Restricted Unit
Entitlement to minimize the Participant's overall energy costs in the
absence of NEPEX dispatch, plus (ii) the number of hours that the
Participant is deemed to receive Scheduled Outage Service with respect
to its Entitlement in the Restricted Unit during the year or such
shorter period pursuant to Section 12.6, equals the Allowance.
D. Modification of Definition of "Scheduled Outage Service
Entitlement".
The definition of "Scheduled Outage Service Entitlement" in Section
15.38B of the NEPOOL Agreement is amended to read as follows:
15 . 38B Scheduled Outage Service Entitlement of a Participant is the
amount of Scheduled Outage Service which the Participant is entitled to
receive in any hour with respect to a generating unit which is
scheduled by the Operations Committee to be out of service, in whole or
in part, for maintenance during a period approved for it by the
Operations Committee for Scheduled Outage Service and is in fact out of
service, in whole or in part, for any reason during the approved
period. Such amount is equal to the lesser of (i) the portion of the
Participant's share of the Reserve Capability of such unit which is
unavailable for service times an estimated average availability of such
unit between its periodic scheduled outages or (ii) in the case of any
generating unit with a currently
applicable Temporary Reserve Capability, the portion of the
Participant's share of the Temporary Reserve Capability which is
unavailable for service; provided, however, that (a) in the case of any
Limited Fuel Unit, the amount of a Participant's Scheduled Outage
Service Entitlement shall be reduced, if appropriate, to take account
of any limit on the availability of stream flow or fuel to operate the
unit during the outage period, and (b) in the case of any Restricted
Unit, the Participant's Scheduled Outage Service Entitlement shall be
limited to the unused portion, if any, of its currently available
Restricted Unit Operational Allowance for the unit. The Operations
Committee shall develop rules for establishing the estimated average
availability of each unit between scheduled outages. Such rules shall
become effective upon approval by the Management Committee.
SECTION II
EFFECTIVENESS OF AGREEMENT
Following its execution by the requisite number of Participants, this
Agreement, and the amendments provided for above, shall become
effective on August 1, 1993, or on such later date as the Federal
Energy Regulatory Commission shall provide that such amendment shall
become effective.
SECTION III
USAGE OF DEFINED TERMS
The usage in this Agreement of terms which are defined in the NEPOOL
Agreement shall be deemed to be in accordance with the definitions
thereof in the NEPOOL Agreement.
SECTION IV
COUNTERPARTS
This Agreement may be executed in any number of counterparts and each
executed counterpart shall have the same force and effect as an
original instrument and as if all the parties to all the counterparts
had signed the same instrument. Any signature page of this Agreement
may be detached from any counterpart of this Agreement without
impairing the legal effect of any signatures thereof, and may be
attached to another counterpart of this
Agreement identical in form hereto but having attached to it one or
more signature pages.
IN WITNESS WHEREOF, each of the signatories has caused a counterpart
signature page to be executed by its duly authorized representative, as
of the 1st day of May, 1993.
COUNTERPART SIGNATURE PAGE
TO TWENTY-NINTH AGREEMENT AMENDING
NEW ENGLAND POWER POOL AGREEMENT
DATED AS OF MAY 1, 1993
The NEPOOL Agreement, being dated as of September 1, 1971, and being
previously amended by twenty-eight (28) amendments, the most recent
prior amendment being an amendment dated as of September 15, 1992.
By: Robert de R. Stein
Name: Senior Vice President
Title: Engineering & Energy Resources
Address: Central Vermont Public Service Corp.
77 Grove St.
Rutland, VT 05701
CONFORMED COPY
COUNTERPART SIGNATURE PAGE
TO TWENTY-NINTH AGREEMENT AMENDING
NEW ENGLAND POWER POOL AGREEMENT
DATED AS OF MAY 1, 1993
The NEPOOL Agreement, being dated as of September 1, 1971, and being
previously amended by twenty-eight (28) amendments, the most recent
prior amendment being an amendment dated as of September 15, 1992.
Ashburnham Municipal Light Department
By: /s/ Robert W. Gould
Manager
86 Central Street
P.O. Box 823
Ashburnham, MA 01430
Bangor Hydro-Electric Company
By: /s/ Carroll R. Lee
Vice President, Operations
33 State Street
P.O. Box 932
Bangor, ME 04402-0932
Boston Edison Company
By: /s/ B.W. Reznicek
Chairman, President and Chief
Executive Officer
800 Boylston Street
Boston, MA 02199
Boylston Municipal Light Department
By: /s/ H. Bradford White Jr.
Manager
Tivnan Road, P.O. Box 560
Boylston, MA 01505
Braintree Electric Light Department
By: /s/ Walter R. McGrath
General Manager
44 Allen Street
Braintree, MA 02184
Central Maine Power Company
By: /s/ Donald F. Kelly
Senior Vice President
Edison Drive
Augusta, ME 04336
Commonwealth Electric Company
By: /s/ James J. Keane
Vice President - Power Supply and
Transmission
2421 Cranberry Highway
Wareham, MA 02571
Concord Municipal Light Plant
By: /s/ Daniel J. Sack
Superintendent
135 Keyes Road
Concord, MA 01742
Connecticut Municipal Electric
Energy Cooperative
By: /s/ Maurice R. Scully
Executive Director
30 Stott Avenue
Norwich, CT 06360
Eastern Utilities Associates
By: /s/ Donald G. Pardus
Chairman/CEO
P.O. Box 2333
Boston, MA 02107
Fitchburg Gas and Electric Light Company
By: /s/ David K. Foote
Senior Vice President
216 Epping Road
Exeter, NH 03833
Georgetown Municipal Light Department
By: /s/ Edward Stanley
Manager
Moulton and West Main Streets
Georgetown, MA 01833
Groton Electric Light Department
By: /s/ Roger H. Beeltje
Manager
P.O. Box 679
Groton, MA 01450
Hingham Municipal Lighting Plant
By: /s/ Joseph R. Spadea. Jr.
General Manager
19 Elm Street
Hingham, MA 02043
Holden Municipal Light Department
By: /s/ Edla Ann Bloom
Director
94 Reservoir Street
Holden, MA 01520
Holyoke Gas & Electric Department
By: /s/ George E. Leary
Manager
70 Suffolk Street
Holyoke, MA 01040
Littleton Electric Light and Water Department
By: /s/ Curtis J. Lanciani
General Manager
39 Ayer Road
Littleton, MA 01460
Marblehead Municipal Light Department
By: /s/ Richard L. Bailey
General Manager
80 Commercial Street, Box 369
Marblehead, MA 01945
Middleborough Gas & Electric Department
By: /s/ John W. Dunfey
General Manager
32 South Main Street
Middleboro, MA 02346
Middleton Municipal Electric Department
By: /s/ William E. Kelley
Interim Manager
197 North Main Street
Middleton, MA 01949
New England Electric System
By: /s/ Jeffrey D. Tranen
Vice President
25 Research Drive
Westborough, MA 01582
Northeast Utilities Companies
The Connecticut Light and Power
Company
By: /s/ Bernard M. Fox
President and Chief Operating
Officer
P.O. Box 270
Hartford, CT 06141-0270
Western Massachusetts Electric
Company
By: /s/ Bernard M. Fox
President and Chief Operating
Officer
P.O. Box 270
Hartford, CT 06141-0270
Holyoke Water Power Company
By: /s/ Bernard M. Fox
President and Chief Operating
Officer
P.O. Box 270
Hartford, CT 06141-0270
Holyoke Power and Electric Company
By: /s/ Bernard M. Fox
President and Chief Operating
Officer
P.O. Box 270
Hartford, CT 06141-0270
Public Service Company of New
Hampshire
By: /s/ W. T. Frain. Jr.
Senior Vice President
1000 Elm Street
Manchester, NH 03105
Pascoag Fire District
By: /s/ Thomas J. Beauregard
Chairman
P.O. Box 107
Pascoag, Rhode Island 02859
Paxton Light Department
By: /s/ Harold L. Smith
Manager
578 Pleasant Street
Paxton, MA 01612
Princeton Municipal Light Department
By: /s/ Sharon A. Staz
General Manager
P.O. Box 247
Princeton, MA 01541-0247
Rowley Municipal Lighting Plant
By: /s/ G. Robert Merry
Manager
47 Summer Street
Rowley, MA 01969
Shrewsbury's Electric Light Plant
By: /s/ Thomas R. Josie
General Manager
100 Maple Avenue
Shrewsbury, MA 01545
Town of South Hadley Electric
Light Department
By: /s/ Wayne D. Doerpholz
Manager
85 Main Street
South Hadley, MA 01075
Taunton Municipal Lighting Plant
By: /s/ Joseph M. Blain
General Manager
P.O. Box 870
Taunton, MA 02780
Templeton Municipal Light Plant
By: /s/ Gerald Skelton
Manager/Engineer
2 School Street
Baldwinville, MA 01436
The United Illuminating Company
By: /s/ Richard J. Grossi
Chairman and Chief Executive
Officer
157 Church Street
New Haven, CT 06506-0901
UNITIL Power Corporation
By: /s/ David K. Foote
Senior Vice President
216 Epping Road
Exeter, NH 03833
Vermont Electric Power Company, Inc.
By: /s/ Richard W. Mallary
President
P.O. Box 548
Rutland, VT 05702-0548
Central Vermont Public
Service Corporation
By: /s/ Robert de R. Stein
Senior Vice President-
Engineering & Energy Resources
77 Grove Street
Rutland, VT 05701
Franklin Electric Light Company
By: /s/ Hugh H. Gates
President
P.O. Box 96
Franklin, VT 05457
Green Mountain Power Corporation
By: /s/ John V. Cleary
President & Chief Executive
Officer
P.O. Box 850
South Burlington, VT 05402
Vermont Marble Power Division of
OMYA, Inc.
By: /s/ John M. Mitchell
Executive Vice President
61 Main Street
Proctor, VT 05765
Village of Jacksonville
By: /s/ Earle S. Holland
President Board of Trustees
P.O. Box 73
Jacksonville, VT 05342
Village of Ludlow Electric Light Department
By: /s/ Donald Ellison
Chairman, Board of
Commissioners
P.O. Box 289
Ludlow, VT 05149
Village of Morrisville Water and Light Department
By: /s/ James C. Fox
Superintendent
P.O. Box 325
Morrisville, VT 05661-0325
Village of Northfield Electric Department
By: /s/ Kevin O'Donnell
Municipal Manager
26 South Main Street
Northfield, VT 05663
Readsboro Electric
By: /s/ Annette Caruso
Clerk
P.O. Box 247
Readsboro, VT 05350
Wakefield Municipal Light Department
By: /s/ William J. Wallace
General Manager
9 Albion Street
Wakefield, MA 01880
Westfield Gas & Electric Light Department
By: /s/ Daniel Golubek
General Manager
100 Elm Street
Westfield, MA 01085
<PAGE>
THIRTIETH AGREEMENT AMENDING 10.16.25
NEW ENGLAND POWER POOL AGREEMENT
THIS AGREEMENT, dated as of the 1st day of June, 1993 is
entered into by the signatories hereto for the amendment by them
of the New England Power Pool Agreement dated as of September 1,
1971 (the "NEPOOL Agreement"), as previously amended by twenty-
eight (28) amendments, the most recent of which was dated as of
September 15, 1992, and as proposed to be amended by a pending
twenty-ninth amendment dated as of May 1, 1993.
WHEREAS, the signatory Participants propose to amend the
provisions on NEPOOL planning in the NEPOOL Agreement, and to
provide for new categories of Pool-Planned Facilities and Pool-
Planned Purchases and to couple this with a change in the
definition of Pool-Planned Unit to reference only existing
Units; and
WHEREAS, the proposed amendments are intended, among other
things, to facilitate the use of revenue bond financing by
Participants which are Massachusetts municipal utilities, and to
avoid in the future controversies over criteria for the
designation of Pool-Planned Units.
NOW THEREFORE, the signatories hereby agree as follows:
SECTION I
AMENDMENTS
Section 1. Amendment of Section 7.12
Section 7.12(j) is amended to read as follows:
(j) coordinating the review of proposed plans of Participants pursuant
to Sections 10.1, 10.4 and 11.1 and coordinating the submission of
recommendations to the Management Committee regarding such proposed
plans;
Section 7.12 is further amended by deleting the "and" at the end of
Subsection (i) and by adding the following new Subsections at the end
of the Section:
(1 )
(m)
(k) to the extent appropriate, enabling the planning and installation
of reliable and economical bulk power supply and related facilities of
NEPOOL by establishing reasonable criteria, guidelines and
methods relating to the appropriate provisions for integrated bulk
power supply planning and related facilities on behalf of all the NEPOOL
Participants;
preparing forecasts of the aggregate coincidental Adjusted Load of the
Participants and of the Annual and Monthly Peaks and the Adjusted
Annual and Monthly Peaks of each of the Participants for use by the
Management Committee in estimating "C"and "E" for purposes of Section
9.2(a); and coordinating with neighboring pools, non-Participants and
the regional reliability council on matters of regional planning and
regional reliability.
Section 2. Amendment of Section 9.4(a)
Section 9.4(a) is amended to read as follows:
(a) At the conclusion of each Capability Period, the Operations
Committee shall determine whether each Participant has satisfied its
Capability Responsibility obligation for each month during such
Capability Period. If the minimum monthly System Capability of a
Participant during a month was less than its Capability Responsibility,
the number of Kilowatts of its deficiency shall be
computed and the Participant shall pay a Capability Responsibility
adjustment charge for the month computed at the rate prescribed by
Section 9.4(b). For purposes of Sections 9.4(a) and 9.4(d), the minimum
monthly System Capability of a Participant for a month during a
Capability Period is equal to the sum of (i) the Participant's lowest
System Capability (as determined without taking into account any
Entitlements in Pool-Planned Facilities initially placed in commercial
operation during the Capability Period) for any day during the month,
plus (ii) for each Pool-Planned Facility initially placed in commercial
operation during the Period on or prior to the first day of the third
month of the Period, one-sixth of (A) the amount of the Participant's
Entitlement, if any, in such Facility times (B) the number of full
months during such period that such Facility was in commercial
operation, subject to the right of the Participant to elect, by written
notice received by the chairman of the Operations Committee prior
to the end of the Period, not to receive credit under this clause (ii),
plus (iii) for each Pool-Planned Facility initially placed in
commercial operation during the period on or prior to the
first day of the month and for which no credit was given under clause
(ii), the amount of the Participant's Entitlement, if any, in such
Facility. Retirements made on the last day of any month shall not be
deducted from System Capability for that month.
Section 3. Amendment of Section 10.1
Section 10.1 is amended to read as follows:
10.1 Recommendation of Additional Facilities
The Management Committee shall periodically review the need for, and
shall recommend, additions to and changes in generating and
transmission facilities of the Participants, or sales to or purchases
of power from Non-Participants, to meet the reliability standards
established by it pursuant to Section 5.13 and the other objectives of
NEPOOL. In making its review and recommendations, the Management
Committee shall give due consideration to (i) reports of the
Policy Planning Committee as to any alternatives proposed by the Policy
Planning Committee, and (ii) such other matters as the Management
Committee deems pertinent.
The Management Committee shall specify the type, range of capacity,
target date for initial commercial operation and other appropriate
characteristics of recommended facilities.
At least once every three years the Management Committee shall adopt a
ten-year NEPOOL expansion plan specifying the type and timing of
additional generating units, PTF facilities and other resources
recommended for commercial operation during the period of the expansion
plan.
The Management Committee shall also periodically review the need for,
and shall recommend, arrangements to meet the reliability standards
established by it pursuant to Section 5.13 and the other objectives of
NEPOOL, under which Participants, affiliates of Participants or other
persons may effect additions to and changes in generating and
transmission facilities for use by Participants. Any such facilities
shall be eligible for designation as Pool-Planned Facilities under
Section 11.1.
Section 4. Amendment of Section 10.6
Section 10.6 is amended to read as follows:
10.6 Increase in Reserves Because of Non-NEPOOL Planned Unit or Facility
If a Participant has at any time an Entitlement in a generating unit
placed in commercial operation after October 31, 1975, which is not a
Pool-Planned Unit or a Pool-Planned Facility and with respect to which
no significant firm commitments to manufacturers or constructors were
made on or before November 1, 1971, and as a result of the character,
size or operation of such unit NEPOOL reserves are required to be
increased, such Participant shall be responsible for providing (at
its expense and, if more than one Participant has an Entitlement in the
unit, in proportion to its Entitlement in such unit) the required
additional NEPOOL reserves for so long as, and to the extent that, such
increase is required by reason of such unit, or until such unit is
accepted by the Management Committee as a Pool-Planned Unit or a
Pool-Planned Facility; provided that such Entitlement shall be included
in the Participant's System Capability for Capability Responsibility
purposes.
Section 5. Amendment of Section 11.1
Section 11.1 is amended to read as follows:
11.1 Pool Access Objectives; Designation of Pool-Planned Facilities or
Purchases
It is an objective of NEPOOL that each Participant shall have an
appropriate opportunityto meet its Capability Responsibility from Pool-
Planned Facilities.
It is recognized that in the past Participants have satisfied their
generating needs in various ways, as sole or joint owners of generating
units, as joint owners of interests in generating companies, as
purchasers from other Participants or Non-Participants under Unit
Contracts or as wholesale customers, although some smaller Participants
have indicated a desire to change their mode of participation in the
future by ceasing to be wholesale customers in whole or part. It is
anticipated that such smaller Participants and their suppliers will
work out individual arrangements covering the phase-out of present
contracts and that in many cases this may best be accomplished over a
five-to-ten year period. Furthermore, Participants have participated in
transmission facilities as sole owners, as joint owners of interests in
transmission companies, or by entering into joint long-term support
arrangements, and it is expected that this diversity will continue in
the future because of the varying situations of the Participants. Many
of the joint arrangements have been arranged or facilitated by NEPOOL
action, and it is a continuing objective of NEPOOL to facilitate, in
appropriate circumstances, joint generation and transmission
arrangements through the designation of Pool-Planned Facilities and
Pool-Planned Purchases.
A Participant which proposes, or whose affiliate proposes, a joint
arrangement for the installation with other Participants of an
additional generating unit rated 25 MW (gross) or above or a
transmission facility rated 69 kV or above, or for a purchase jointly
with other Participants of a Unit Contract Entitlement from a
Non-Participant may submit, in such form, manner and detail as the
Management Committee or the Policy Planning Committee may reasonably
prescribe, a request to the Management Committee to designate the
generating unit or the transmission facility as a Pool-Planned Facility
or the purchase as a Pool-Planned Purchase, as the case may be. If the
request relates to an additional generating unit or transmission
facility to be installed by the Participant or its affiliate, the
request shall be submitted at or before the time the Participant's
plan for the facility is submitted pursuant to Section 10.4. It shall
be a condition to the granting of the requested Pool-Planned status for
a generating unit or purchase that the share of the unit or purchase
which the Participant proposes to make available for joint
participation be at least a 25~ share and that it be offered first to
all other Participants on a fair and nondiscriminatory basis, before
any offering is made to Non-Participants.
The Policy Planning Committee shall review the Participant's proposal
to determine its consistency with NEPOOL objectives and shall
report the results of its review to the Management Committee. If the
Management Committee determines, on the basis of the Policy Planning
Committee's report and such other information as the Management
Committee deems appropriate, that the proposal is consistent with
NEPOOL objectives and that the Participant has made the offer of joint
participation contemplated by this Section, if required, (whether or
not such offer has been accepted by one or more other Participants), it
shall designate the proposed generating unit or transmission facility
as a pool-Planned Facility, or shall designate the purchase as a
Pool-Planned Purchase, as the case may be.
Provided the Participant has offered at least 25 of the capacity to
other Participants through joint ownership or unit contract
participation, the Management Committee may not unreasonably
withhold designation as a Pool-Planned Facility of a generating unit
proposed to be constructed by one or more Participants in order to
satisfy their anticipated Capability Responsibilities and/or to
provide an appropriate mix of their generating capabilities if the
needs of such Participants in these regards have not been satisfied
from other units or facilities designated as Pool-Planned on
a basis consistent with the following objectives:
(a) Each Participant should have a reasonable opportunity to satisfy
its load over some reasonable time period with a mix of generation
reasonably comparable as to economics and types to that being developed
for New England.
(b) No Participant should be required to subject itself to an
excessively disproportionate exposure to backup power costs or reserve
obligations as a result of having to take any Entitlement which is
excessively follows:
disproportionately large as compared to the Participant's size, or as
the result, during any sustained period, of having to take a
disproportionate portion of its capacity from immature units.
(c) No Participant which has maintained an integrated system in the
past should be required to impair the attractiveness of its
securities in the capital markets by making unreasonably large capital
investments in new generation or by becoming dependent upon other
Participants for a substantially disproportionate amount of its System
Capability.
Section 6.
Amendment of Section 15.33
Section 15.33 is amended to read as follows:
Pool-Planned Unit is one of the following units: New Haven Harbor Unit
1 (Coke Works), Mystic Unit 7, Canal Unit 2, Potter Unit 2,
Wyman Unit 4, Stony Brook Units 1, lA, lB, lC, 2A and 2B, Millstone
Unit 3, Seabrook Unit 1 and Waters River Unit 2 (to the extent
of 7 megawatts of its Summer Capability and 12 megawatts of its Winter
Capability).
Section 7. Addition of New Section 15.33A
The Agreement is amended by adding new Section 15.33A as 15.33A
Pool-Planned Facility and Pool-Planned Purchase are, respectively,
(a)(i) a generating unit or transmission facility designated as a
"Pool-Planned Facility" pursuant to Section 11.1 or (ii) which was
designated as a "Pool-Planned facility" pursuant to Section 10.1 prior
to January 1, 1993, and (b) a purchase from a Non-Participant
designated by the Management Committee as a "Pool-Planned Purchase"
pursuant to Section 11.1; provided that a "Pool-Planned Purchase" will
not be entitled to transfer rights under Section 13.2(c), but Section
13.2(c) shall continue to be effective as to existing and new purchases
from Hydro-Quebec utilizing the HQ Interconnection.
SECTION II
Following its execution by the requisite number of Participants, this
Agreement, and the amendments provided for above, shall become
effective on September 30, 1993, or on such later date as the Federal
Energy Regulatory Commission shall provide that such amendment shall
become effective.
SECTION III
USAGE OF DEFINED TERMS
The usage in this Agreement of terms which are defined in the NEPOOL
Agreement shall be deemed to be in accordance with the definitions
thereof in the NEPOOL Agreement.
SECTION IV
COUNTERPARTS
This Agreement may be executed in any number of counterparts and each
executed counterpart shall have the same force and effect as an
original instrument and as if all the parties to all the counterparts
had signed the same instrument. Any signature page of this Agreement
may be detached from any counterpart of this Agreement without
impairing the legal effect of any signatures thereof, and may be
attached to another counterpart of this Agreement identical in form
hereto but having attached to it one or more signature pages.
IN WITNESS WHEREOF, each of the signatories has caused a counterpart
signature page to be executed by its duly authorized representative, as
of the 1st day of June, 1993.
COUNTERPART SIGNATURE PAGE
TO THIRTIETH AGREEMENT AMENDING
NEW ENGLAND POWER POOL AGREEMENT
DATED AS OF JUNE 1, 1993
The NEPOOL Agreement, being dated as of September 1, 1971,
and being previously amended by twenty-eight (28) amendments
(with a pending twenty-nine (29) amendment dated as of May 1,
1993), the most recent prior amendment which has become effective
being an amendment dated as of September 15, 1992.
Name:
Title:
Address
COUNTERPART SIGNATURE PAGE TO THIRTIETH AGREEMENT AMENDING
NEW ENGLAND POWER POOL AGREEMENT DATED AS OF JUNE 1, 1993
The NEPOOL Agreement, being dated as of September l, 1971,
and being previously amended by twenty-eight (28) amendments
(with a pending twenty-nine (29) amendment dated as of May 1,
1993), the most recent prior amendment which has become effective
being an amendment dated as of September 15, 1992.
/s/ Robert de R. Stein
Robert de R. Stein
CENTRAL VERMONT PUBLIC SERVICE CORP.
Title: Senior Vice President - Engineering
Address: 77 Grove St.
Rutland, VT 05701
<PAGE>
10.63.1
OPERATING COMMITTEE
VERMONT JOINT OWNERS - HYDRO-QUEBEC
OPERATING AGREEMENT No. VJO-HQ-93-01
TERTIARY ENERGY
(hereinafter, the "Agreement")
RENEWAL OF VJO-HQ-92-02
Whereas "Tertiary Energy" is defined in Supplement III of the
Interconnection Agreement between HYDRO-QUEBEC and the VERMONT JOINT
OWNERS dated February 23, 1987 (hereinafter the "Interconnection
Agreement") as energy which is not otherwise covered in the
Interconnection Agreement or in any other agreement between the
parties, and which can be supplied by either party to the other, over
and above the supplying party's commitments or requirements for its own
system;
Whereas the conditions, rates, and charges for Tertiary Energy shall be
as agreed upon by the Operating Committee from time to time as speci-
fied in Supplement III;
Now therefore, the members of the Operating Committee unanimously agree
to the sale of Tertiary Energy by HYDRO-QUEBEC to the VERMONT JOINT
OWNERS in accordance with the Interconnection Agreement and under the
following terms and conditions:
Effective date and term:
This Agreement shall be effective from September 1, 1993 at 00:00 hours
and shall terminate on August 31, 1994 at 24:00 hours. This Agreement
may be renewed by mutual agreement of the parties.
Amount of Energy:
The maximum amount of Tertiary Energy available for purchase for each
month of the Agreement will be:
37,675 MWh September 1993
30,825 MWh October 1993
30,825 MWh November 1993
42,470 MWh December 1993
46,237 MWh January 1994,
44,525 MWh February 1994
46,237 MWh March 1994
23,975 MWh April 1994
34,250 MWh May 1994
44,182 MWh June 1994
45,210 MWh July 1994
45,210 MWh August 1994
at a maximum rate of delivery of 137 MWh per hour.
Energy price:
The unit price applicable for each megawatthour of Tertiary Energy
shall be equal to 17.75 $ US/MWh. Should the energy be generated from
thermal resources on the HYDRO-QUEBEC system or from a third party
purchase, the Tertiary Energy price shall be equal to 120% of the total
cost of providing such Tertiary Energy.
Fixed Compensation:
Whether Tertiary Energy is delivered or not, the VERMONT JOINT OWNERS
shall pay to HYDRO-QUEBEC a minimum amount of 17,080.00$ US per month
for the duration of this Agreement. During the term of this Agreement,
if the maximum rate of delivery is greater than 20 Mwh per hour without
exceeding 137 MWh per hour, then the monthly compensation shall be
increased by an amount equal to 1,100.00$ US/MWh per hour for the
amount in excess of 20 MWh per hour. If the energy delivered is from a
third party purchase, any expenses charged to HYDRO-QUEBEC other than
the cost of such energy shall be passed on directly to the VERMONT
JOINT OWNERS. Concurrently the compensation shall be reduced on an
hourly pro-rata basis for the amount of hours the energy comes from a
third party purchase.
Special Case:
Notwithstanding the above, the fixed compensation for the month of
September 1993 shall be equal to 57,260.00$ US for a rate of delivery
of 61 MWh per hour.
Scheduling:
Scheduling under this Agreement shall be conducted in the following
manner:
Monthly schedules: On or before the 5th working day of the preceding
month, VERMONT JOINT OWNERS or their mandatary under the
Interconnection Agreement shall notify HYDRO-QUEBEC of its intention to
purchase Tertiary Energy under this Agreement. Such notification shall
include the amount of Tertiary Energy expected for deliveries and the
hourly rate of delivery during the following month.
Weekly schedules: On or before 10:00 hours each Tuesday of the
preceding week, the VERMONT JOINT OWNERS or their mandatary under the
Interconnection Agreement shall submit to HYDRO-QUEBEC a preliminary
hourly schedule for Tertiary Energy deliveries during the upcoming
week.
Hourly schedule changes. The VERMONT JOINT OWNERS or their mandatary
under the Interconnection Agreement can make on-shift schedule changes
to the previously submitted weekly schedule for economic reasons.
HYDRO-QUEBEC can make on-shift schedule changes to the previously
submitted weekly schedule for the following reasons:
(i) interruptibility provisions described within the Agreement, or,
(ii) the price of energy is going to change due to the operation of or
a change of operation in HYDRO-QUEBEC's thermal units, or,
(iii) the price of energy is going to change due to the purchase of
energy from a third party.
Notifications of such changes shall be made 35 minutes prior to the
start of the hour the change is to take place. If the change is due to
the operation of the thermal units or to a third party purchase, the
VERMONT JOINT OWNERS or their mandatary under the Interconnection
Agreement shall notify HYDRO-QUEBEC 30 minutes prior to the start of
the hour if they desire to accept deliveries during the coming hour.
Interruptibility Provisions:
Deliveries under this Agreement may be interrupted by HYDRO-QUEBEC,
without creating any deficiencies, for the following reasons:
(i) HYDRO-QUEBEC's implementation of voltage reduction or load shedding
procedures,
(ii) to prevent the violation of voltage, stability, or thermal
transmission criteria,
(iii) transfer limitations on the interconnection facilities or,
(iv) the unavailability of the interconnection facilities. The
interconnection facilities include without limitation, the isolated
production equipment, the 450 kV DC line between Radisson and Sandy
Pond, the converter substations of Radisson, Nicolet and Sandy Pond and
of Des Cantons and Comerford and the associated transformation
equipment.
Delivery Point:
The Tertiary Energy under this Agreement shall be delivered on the
Radisson - Nicolet - Sandy Pond 450kV DC interconnection. Should this
interconnection be unavailable, energy may be delivered on the Des
Cantons - Comerford interconnection. The delivery point shall be the
point where such transmission lines described above, cross the boundary
between Quebec and the United States of America. It is understood that
HYDRO-QUEBEC shall not be obligated to switch load on shift to Des
Cantons - Comerford interconnection for the sole purpose of delivery of
the Tertiary Energy under this Agreement.
<PAGE>
Delivery Deficiency:
If HYDRO-QUEBEC is unable to deliver for reasons other than those
listed above, part or all of the energy scheduled by the VERMONT JOINT
OWNERS or their mandatary under the Interconnection Agreement, such
energy may be rescheduled during the remaining term of the Agreement.
If HYDRO-QUEBEC is unable to deliver a part or all of the energy
scheduled by the VERMONT JOINT OWNERS or rescheduled as provided herein
above, HYDRO-QUEBEC shall pay to VERMONT JOINT OWNERS an amount equal
to 50% of the price of the energy not delivered.
If energy cannot be delivered because the total amount of energy to be
delivered on the Radisson - Nicolet - Sandy Pond interconnection or the
Des Cantons - Comerford interconnection is less than the minimum
loading level of those facilities, no Deficiency will result and the
energy not delivered will not be rescheduled.
Acknowledgment:
The parties agree that deliveries of energy under this Agreement shall
reduce HYDRO-QUEBEC's obligations under the Firm Energy Contract
between HYDRO-QUEBEC and the NEW ENGLAND UTILITIES dated as of October
14, 1985 ("the Firm Energy Contract"), in accordance with Article 2.2
of said Firm Energy Contract.
COMITE D'EXPLOITATON VJO-HQ
/s/ M. Bernard Guertin
par: M. Bernard Guertin
/s/ Gilbert Neveu
par: Gilbert Neveu
Date: September 9, 1993
VJO-HQ OPERATING COMMlTTEE
/s/ Marc Schaefer
per: Marc Schaefer
/s/ A. Norman Terreri
per: A. Norman Terreri
Date: 93/9/9 <PAGE>
OPERATING COMMITTEE
VERMONT JOINT OWNWERS-HYDRO-QUEBEC
OPERATING AGREEMENT No. VJO-HQ-92-02
(amendment 1)
The members of the Operating Committe unnimously agree to the following
modification to the agreement VJO-HQ-92-02:
the second paragraph of the section headed Amount of Energy is hereby
deleted and replaced by the following:
"However the amount of Tertiary Energy deliveries will be limited to
35.6522% of the above amounts of energy (with a maximum rate of
delivery of 41 MWh per hour) through April 30, 1993 and to 39.1304% of
the above amounts of energy (with a maximum rate of delivery of 45 MWh
per hour) from May 1, 1993 until the Export Licence (EL-169) is
modified to allow for maximum deliveries."
HYDRO-QUEBEC
/s/ M. Bernard Guertin
par: M. Bernard Guertin
/s/ Gilbert Nevue
par: Gilbert Neveu
Date:
VERMONT JOINT OWNERS
/s/ Marc Schaefer
per:Marc Schaefer
/s/ A. Norman Terreri
per: A.Norman Terreri
Date: 6-25-93 <PAGE>
10.75.1
AMENDMENT AGREEMENT NO. 1 TO
RECEIVABLES PURCHASE AGREEMENT
This AMENDMENT AGREEMENT NO. 1, dated as December 21, 1988, is among
CENTRAL VERMONT PUBLIC SERVICE CORPORATION, CENTRAL VERMONT PUBLIC
SERVICE CORPORATION as Service Agent and THE FIRST NATIONAL BANK OF
BOSTON.
WHEREAS, the parties hereto are parties to that certain Receivables
Purchase Agreement dated as of November 29, 1988 (the "Purchase
Agreement"), and wish to amend a certain provision of the Purchase
Agreement;
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Amendment of Purchase Agreement. Section 9.4 of the Purchase
Agreement is hereby amended by adding the following to the end thereof:
"Notwithstanding the foregoing, the Seller agrees that the Bank may
disclose information obtained by the Bank pursuant to this Agreement to
participants or potential participants in its Undivided Interest,
provided that such participants agree to be bound by the
confidentiality requirements set forth herein."
2. Miscellaneous. Except as otherwise expressly provided by this
Amendment Agreement No. 1, all of the terms, conditions and provisions
of the Purchase Agreement shall remain the same. It is declared and
agreed by each of the parties hereto that the Purchase Agreement, as
amended hereby, shall continue in full force in effect, and that this
Amendment Agreement No. 1 and the Purchase Agreement shall be read and
construed as one instrument. This Amendment Agreement No. 1 shall be
governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Agreement No. 1 as of the date first written
above.
THE FIRST NATIONAL BANK OF CENTRAL VERMONT PUBLIC SERVICE
BOSTON CORPORATION, Individually and
as Service Agent
By: /s/ Daniel G. Head, Jr. By: /s/ Jonathan W. Booraem
Title: Assistant Vice President Title: Treasurer
10.75.2
BANK OF BOSTON
November 27, 1989
Central Vermont Public Service Corporation
77 Grove Street
Rutland, VT 05701
Attention: Jonathan W. Booraem, Treasurer
Re: Receivables Purchase Agreement
dated as of November 29, 1988 (the "Agreement")
Dear Jonathan:
As you are aware, Schedule 1.1 of the Agreement set forth a list
of Customers whose Outstanding Accounts may be included as Eligible
Accounts notwithstanding the fact that the aggregate Face Amount of
such Outstanding Accounts exceeds $250,000 as at any date of
determination.
We have discussed, and you have agreed, that such Schedule should
be modified to include Stratton Mountain Corp. and to exclude Vermont
Castings, Inc. from such list of Customers.
Accordingly, effective as of the date of this letter, Schedule 1.1
shall be replaced in its entirety by a new Schedule 1.1 in the form
attached hereto. Except as modified hereby, the Agreement and all of
the terms and conditions thereof are ratified and remain in full force
and effect.
Very truly yours,
THE FIRST NATIONAL BANK OF BOSTON
By /s/ Daniel G. Head Jr.
Assistant Vice President
AGREED:
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
By:/S/ Jonathan W. Booraem
Title: Treasurer
Date: December 4, 1989
<PAGE>
SCHEDULE 1.1
General Electric Co.
Sherburne Corporation
Boise Cascade Corporations
Express Foods Inc.
Eveready Plant
Grand Union Store
E.H.V. Industries, Inc.
Johnson Controls, Inc.
Mack Molding Co.
Stratton Mountain Corp.
White Pigment Plant
Wyeth Nutritionals
Tambrands Inc.
C & S Wholesale Grocers, Inc.
Price Chopper #41
C.P.M. Inc.
Bratt. Kiln Drying & Mill Co.
Stanley Tools
The Rutland Hospital
<PAGE>
10.75.3
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
Second Amendment and Extension Agreement
to
Receivables Purchase Agreement
This Second Amendment and Extension Agreement (this "Amendment") dated
as of November 29, 1990 to Receivables Purchase Agreement dated as of
November 29, 1988, as amended by a Letter Agreement dated December 4,
1989 (as so amended, the "Agreement") between CENTRAL VERMONT PUBLIC
SERVICE CORPORATION (the "Seller") and THE FIRST NATIONAL BANK OF
BOSTON (the "Bank"). Capitalized terms used herein but not defined
shall have the meanings assigned to them in the Agreement.
WHEREAS, pursuant to Section2.1(b) of the Agreement, the Purchase
Commitment of the Bank is scheduled to terminate on the second
anniversary of the Closing Date, as extended for one-year periods from
time to time, currently extended to November 29, 1991; and
WHEREAS, by means of a letter dated October 3, 1990 from the Seller to
the Bank the Seller has requested that the Purchase Commitment be
extended for an additional one-year period beyond November 29, 1991,
and the Bank is willing to so extend the Purchase Commitment on the
terms and conditions contained herein; and
WHEREAS, the Bank and the Seller wish to amend the Agreement to reflect
changes made by Duff & Phelps Inc. in its senior debt rating schedule,
and conform the rate-setting dates for LIBO Rates to current market
practice;
NOW, THEREFORE, the Bank and the Seller agree as follows:
Section 1. Amendments to the Agreement.
(a) Section10(e) of the Agreement is hereby amended by deleting the
phrase "shall exceed D&P 8" appearing therein and substituting therefor
the phrase "shall fall below D&P BBB+".
(b) The definition of "LIBO Rate" contained in Exhibit A to the
Agreement is hereby amended by deleting the phrase "third Business Day"
appearing in the third line thereof and substituting therefor the
phrase "second Business Day".
Section 2. Extension of the Purchase Termination Date. The Bank hereby
agrees that the Purchase Commitment shall be renewed for an additional
one-year period, such that the Purchase Termination Date referred to in
Section2.1(b) shall now occur on November 29, 1992.
Section 3. Representations and Warranties.
The Seller represents and warrants as follows:
(a) The execution, delivery and performance by the Seller of this
Amendment and the Purchase Documents as amended hereby are within the
corporate powers of the Seller and have been duly authorized by all
requisite corporate action by the Seller, do not contravene (i) the
Seller's Articles of Association or by-laws or (ii) any law, rule,
order, regulation or contractual restriction (including, without
limitation, any restriction in the Indenture) binding on or affecting
the Seller, and do not result in or require the creation of any lien,
security interest or other charge or encumbrance upon or with respect
to any of its properties.
(b) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is
required for the due execution and delivery of this Amendment or the
perfo~mance by the Seller of the Purchase Documents as amended hereby.
(c) This Amendment and the Purchase Documents as amended hereby are the
legal, valid and binding obligations of the Seller enforceable against
the Seller in accordance with their respective terms, except as limited
by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(d) The representations and warranties contained in Section6 of the
Agreement are true and correct as of the date hereof as though made on
and as of the date hereof (except that references to financial
statements in
Section6.5 of the Agreement shall be deemed to refer to the most recent
financial statements delivered by the Seller thereunder).
(e) No Termination Event or event that, with the giving of notice or
passage of time or both would become a Termination Event, has occurred
and is continuing.
Section 4. Miscellaneous.
(a) This Amendment and the modifications to the Agreement set forth
herein shall be governed by and construed in accordance with the laws
of The Commonwealth of Massachusetts.
(b) On and after the date hereof, each reference in the Agreement to
"this Agreement" or words of like import shall mean and be deemed to be
a reference to the Agreement as amended hereby.
(c) Except as amended and modified hereby, the Agreement is in all
respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.
(d) This Amendment may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date and year first above written.
CENTRAL VERMONT PUBLIC SERVICE
CORPORATION
By: /s/ Jonathan W. Booraem
Title: Treasurer
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Daniel G. Head, Jr.
Title: Assistant Vice President
<PAGE>
10.75.4
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
Third Amendment and Extension Agreement
to
Receivables Purchase Agreement
This Third Amendment and Extension Agreement (this "Amendment") dated
as of November 29, 1991 to Receivables Purchase Agreement dated as of
November 29, 1988, as amended by Amendment Agreement No. 1 dated as of
December 21, 1988, a Letter Agreement dated November 27, 1989 and a
Second Amendment and Extension Agreement dated as of November 29, 1990
(as so amended, the "Agreement") between CENTRAL VERMONT PUBLIC SERVICE
CORPORATION (the "Seller") and THE FIRST NATIONAL BANK OF BOSTON (the
"Bank"). Capitalized terms used herein but not defined shall have the
meanings assigned to them in the Agreement.
WHEREAS, pursuant to Section2.1(b) of the Agreement, the Purchase
Termination Date is scheduled to occur on the second anniversary of the
Closing Date, as extended for one-year periods from time to time,
currently extended to November 29, 1992; and
WHEREAS, by means of a letter dated November 8, 1991 from the Seller to
the Bank the Seller has requested that the Purchase Termination Date be
extended for an additional one-year period beyond November 29, 1992,
and the Bank is willing to so extend the Purchase Termination Date on
the terms and conditions contained herein; and
WHEREAS, the Bank and the Seller wish to amend the Agreement to lower
the minimum rating assigned by Duff & Phelps Inc. to the senior debt of
the Seller that would constitute a Termination Event, to conform such
rating to the minimum level required for ratings by Standard ~ Poor's
Corporation, and add a one-year Funding Period option for LIBO Rates;
NOW, THEREFORE, the Bank and the Seller agree as follows:
Section 1. Amendments to the Agreement.
(a) 10(e) of the Agreement is hereby amended by deleting the phrase
"shall fall below D&P BBB+" appearing therein and substituting therefor
the phrase "shall fall below D&P BBB".
(b) The definition of "Funding Period" contained in Exhibit A to the
Agreement is hereby amended by deleting the
phrase "three or six months thereafter," appearing in the fifth and
sixth lines and tenth line thereof and substituting therefor in each
such place the phrase "three, six or twelve months thereafter,".
Section 2. Extension of the Purchase Termination Date. The Bank hereby
agrees that the Purchase Termination Date referred to in 2.1(b) shall
be extended for an additional one-year period, such that the Purchase
Termination Date shall now occur on November 29, 1993.
Section 3. Representations and Warranties.
The Seller represents and warrants as follows:
(a) The execution, delivery and performance by the Seller of this
Amendment and the Purchase Documents as amended hereby are within the
corporate powers of the Seller and have been duly authorized by all
requisite corporate action by the Seller, do not contravene (i) the
Seller's Articles of Association or by-laws or (ii) any law, rule,
order, regulation or contractual restriction (including, without
limitation, any restriction in the Indenture) binding on or affecting
the Seller, and do not result in or require the creation of any lien,
security interest or other charge or encumbrance upon or with respect
to any of its properties.
(b) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is
required for the due execution and delivery of this Amendment or the
performance by the Seller of the Purchase Documents as amended hereby.
(c) This Amendment and the Purchase Documents as amended hereby are the
legal, valid and binding obligations of the Seller enforceable against
the Seller in accordance with their respective terms, except as limited
by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(d) The representations and warranties contained in Section6 of the
Agreement are true and correct as of the date hereof as though made on
and as of the date hereof (except that references to financial
statements in Section6.5 of the Agreement shall be deemed to refer to
the most recent financial statements delivered by the Seller
thereunder).
(e) No Termination Event or event that, with the giving of notice or
passage of time or both would become a Termination Event, has occurred
and is continuing.
Section 4. Miscellaneous.
(a) This Amendment and the modifications to the Agreement set forth
herein shall be governed by and construed in accordance with the laws
of The Commonwealth of Massachusetts.
(b) On and after the date hereof, each reference in the Agreement to
"this Agreement" or words of like import shall mean and be deemed to be
a reference to the Agreement as amended hereby.
(c) Except as amended and modified hereby, the Agreement is in all
respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.
(d) This Amendment may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date and year first above written.
CENTRAL VERMONT PUBLIC SERVICE
CORPORATION
By: /s/ Jonathan W. Booraem
Title: Treasurer
THE FIRST NATIONAL BANK OF BOSTON
By: Daniel G. Head, Jr.
Title: Assistant Vice President
<PAGE>
10.75.5
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
Fourth Amendment and Extension Agreement
to
Receivables Purchase Agreement
This Fourth Amendment and Extension Agreement (this "Amendment") dated
as of November 29, 1992 to Receivables Purchase Agreement dated as of
November 29, 1988, as amended by Amendment Agreement No. 1 dated as of
December 21, 1988, Letter Agreement dated November 27, 1989, Second
Amendment and Extension Agreement dated as of November 29, 1990, and
Third Amendment and Extension Agreement dated as of November 29, 1991
(as so amended, the "Agreement") between CENTRAL VERMONT PUBLIC SERVICE
CORPORATION (the "Seller") and THE FIRST NATIONAL BANK OF BOSTON (the
"Bank"). Capitalized terms used herein but not defined shall have the
meanings assigned to them in the Agreement.
WHEREAS, pursuant to Section2.1(b) of the Agreement, the Purchase
Termination Date is scheduled to occur on the second anniversary of the
Closing Date, as extended for one-year periods from time to time,
currently extended to November 29, 1993; and
WHEREAS, by means of a letter dated September 11, 1992 from the Seller
to the Bank the Seller has requested that the Purchase Termination Date
be extended for an additional one-year period beyond November 29, 1993,
and the Bank is willing to so extend the Purchase Termination Date, on
the terms and conditions contained herein; and
WHEREAS, the Seller and the Bank wish to make certain other changes to
the Agreement, on the terms and conditions contained herein;
NOW, THEREFORE, the Bank and the Seller agree as follows:
Section 1. Amendments to the Agreement.
(a) Section2.7(a)(iii) of the Agreement is hereby amended by deleting
the phrase "on the Debit Dates occurring on the 15th day of each
February, May, August and November of each year," and substituting
therefor the phrase "on the first Business Day of each March, June,
September and December of each year,".
(b) Section2.7(a)(iv) of the Agreement is hereby amended by deleting
the phrase "on each of the Debit Dates described in clause (iii)
above," and substituting therefor the phrase "on each of the dates
described in clause (iii) above,".
(c) SectionSection2.5(c), 2.7(a)(vii), 2.7(b), 2.7(c) and 2.7(d) of the
Agreement are hereby amended by inserting the phrase "or other date on
which the Bank shall debit the Collection Account" after the phrase "On
each Debit Date" appearing in the first line of each such subsection.
(d) Section10(g)(ii) of the Agreement is hereby amended by deleting the
percentage "4%" appearing therein and substituting therefor the
percentage "8%".
(e) Section10(i) of the Agreement is hereby amended by inserting the
phrase "or other date on which the Bank shall debit the Collection
Account" after the phrase "on any Debit Date" appearing in the third
line thereof.
(f) The definition of "Eligible Account(s)" contained in Exhibit A to
the Agreement is hereby amended by deleting said definition in its
entirety and substituting therefor the following:
"Eligible Account(s) - any Outstanding Account (other than an Excluded
Account) from a Customer which is an electric retail person, which
Outstanding Account has not been outstanding for more than 60 days past
the date of billing with respect thereto."
(g) The definition of "Excluded Account(s)" contained in Exhibit A to
the Agreement is hereby amended by deleting said definition in its
entirety and substituting therefor the following:
"Excluded Account(s) - (a) any Outstanding Accounts arising from the
rental of water heaters, (b) unless the Bank shall have consented in
writing, the Outstanding Accounts of any Customer other than those
Customers listed on Schedule 1.1 hereto (as such Schedule may be
amended from time to time with the prior written consent of the Bank)
when the aggregate Face Amount of such Outstanding Accounts (other than
Unbilled Accounts) exceeds $250,000 as of any date of determination,
(c) unless the Bank shall have consented in writing, any Outstanding
Accounts arising from sales of electricity to Vermont Electric Power
Cooperative, Inc., Washington Electric Cooperative, Inc., Connecticut
Valley Electric Company Inc. or any other firm wholesale Person, and
(d) any Outstanding Accounts the sale and assignment of which is
prohibited by federal or state law."
(h) Exhibits D-l and D-2 to the Agreement are hereby amended by
deleting said Exhibits and substituting therefor new Exhibits D-l and
D-2 in the forms attached hereto as Exhibits D-l and D-2.
(i) Schedule 1.1 to the Agreement is hereby amended by deleting said
Schedule 1.1 and substituting therefor a new Schedule 1.1 in the form
attached hereto as Schedule 1.1.
Section 2. Extension of the Purchase Termination Date. The Bank hereby
agrees that the Purchase Termination Date referred to in cv4,62.1(b)
shall be extended for an additional one-year period, such that the
Purchase Termination date shall now occur on November 29, 1994.
Section 3. Representations and Warranties.
The Seller represents and warrants as follows:
(a) The execution and delivery of this Amendment and the and
performance by the Seller of the Purchase Documents as amended hereby
are within the corporate powers of the Seller and have been duly
authorized by all requisite corporate action by the Seller, do not
contravene (i) the Seller's Articles of Association or by-laws or (ii)
any law, rule, order, regulation or contractual restriction (including,
without limitation, any restriction in the Indenture) binding on or
affecting the Seller, and do not result in or require the creation of
any lien, security interest or other charge or encumbrance upon or with
respect to any of its properties.
(b) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is
required for the due execution and delivery of this Amendment or the
performance by the Seller of the Purchase Documents as amended hereby.
(c) This Amendment and the Purchase Documents as amended hereby are the
legal, valid and binding obligations of the Seller enforceable against
the Seller in accordance with their respective terms, except as limited
by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(d) The representations and warranties contained in Section6 of the
Agreement are true and correct as of the date hereof as though made on
and as of the date hereof (except that references to financial
statements in Section 6.5 of the Agreement shall he deemed to refer to
the most recent financial statements delivered by the Seller
thereunder).
(e) No Termination Event or event that, with the giving of notice or
passage of time or both would become a Termination Event, has occurred
and is continuing.
Section 4. Miscellaneous.
(a) This Amendment and the modifications to the Agreement set forth
herein shall be governed by and construed in accordance with the laws
of The Commonwealth of Massachusetts.
(b) On and after the date hereof, each reference in the Agreement to
"this Agreement" or words of like import shall mean and be deemed to be
a reference to the Agreement as amended hereby.
(c) Except as amended and modified hereby, the Agreement is in all
respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.
(d) ThiS Amendment may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date and year first above written.
CENTRAL VERMONT PUBLIC SERVICE
CORPORATION
By: /s/ Jonathan W. Booraem
Title: Treasurer
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Daniel G.Head, Jr.
Title: Vice President
SCHEDULE 1.1
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
CERTAIN CUSTOMERS
General Electric Co.
Killington, LTD
Wyeth Nutritionals
Grand Union Store
Specialty Paperboard
Eveready Battery Co.
EHV Industries
Stratton Mountain Inn
Bryant Grinder Co.
Vermont Castings
Johnson Controls Inc.
Mack Molding
Windsor Minerals
C & S Wholesale Groc
The Rutland Hospital
Tambrands Inc.
OMYA
Brattleboro Kiln Dry
Price Chopper
Middlebury College
EXHIBIT D-1
MONTHLY REPORT
MONTH ENDING , 19 _
$ (000)
To be used when Undivided Interest of Purchasers as at month end set
forth above does not exceed an amount equal to 80% of the lowest
Eligible Account Balance during the most recent 12 months for which
actual data is available.
(a) Undivided Interest as at month end above is $__________.
(b) Lowest Eligible Account Balance over
12 months is $_____________.
(c) .8 times (b) = $___________.
(a) is less than or equal to (c).
Item Description
1. Outstanding Accounts (billed) $_________
2. Outstanding Accounts (unbilled) $_________
3. - Eligible Accounts Over 60 Days
Past Due ($__________)
4. - Excluded Customer Accounts Greater
Than $250,000 ($__________)
5. - Customer deposits and interest ($__________)
6. - Excluded wholesale Customer Accounts (l) ($__________)
7. - Estimated Water Heater Rentals ($__________)
8. Eligible Accounts
9. Undivided Interest
10. Fractional Undivided Interest (line 9
divided by line 8)
11. Fractional Accounts over 60 days past
due (line 3 divided by [line 1 plus
line 2])
(1) Excluded Accounts: Vermont Electric Cooperative, Inc.,
Washington Cooperative, Inc., Connecticut Valley
Electric Company Inc. and other firm wholesale Persons
<PAGE>
EXHIBIT D-2
MONTHLY REPORT
MONTH ENDING _________________, 19 _
$(000)
To be used when Undivided Interest of the Purchasers as at month end
set forth above is equal to an amount which exceeds 80% of the lowest
Eligible Account Balance during the most recent 12 months for which
actual data is available.
(a) Undivided Interest as at month end above is $_________.
(b) Lowest Eligible Account Balance over
12 months is $________________.
(c) .8 times (b) = $____________.
(a) is less than or equal to (c).
Daily Formula:
Item Description
1. Prior Day's Ending Balance of Eligible
Accounts $__________
2. - Customer Accounts Daily Cash Receipts ($__________)
3. +Daily Eligible Sales (1) $__________
4. Change in Eligible Accounts Over 60 Days
Past Due(2 From Prior Month divided by
# Days in Reporting Month ($__________)
5. - Excluded Customer Accounts Greater
Than $250,000 (3) ($__________)
6. - Customer deposits and interest ($__________)
7. - Excluded wholesale Customer Accounts (4) ($__________)
8. - Estimated Water Heater Rentals ($__________)
9. Eligible Accounts $
10. Undivided Interest $
11. Fractional Undivided Interest (line 10
divided by line (9)
12. Fractional Accounts over 60 days past
due (line 4 divided by [line 1 minus
line 2 plus line 3])
(1) Aggregate Eligible Sales for the month(including
estimated Daily Unbilled Accounts) - # Days in Month
(2) Difference From Prior Month's Amount Using Latest Aging
Report Available
(3) Difference From Prior Month's Amount Using Latest Data
Available
(4) Excluded Accounts Difference From Prior Month's Amount
Using Latest Available Data at Billing Date: Vermont
Electric Cooperative, Inc., Washington Cooperative,
Inc., Connecticut Valley Electric Company Inc. and
other firm wholesale Persons
<PAGE>
<TABLE>
Exhibit EX-13
SELECTED FINANCIAL DATA
(Dollars in thousands, except per share amounts)
<CAPTION>
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
For the year
Operating revenues $279,389 $275,375 $233,469 $231,565 $227,391
Net income $ 21,292 $ 21,422 $ 18,576 $ 17,531 $ 18,245
Earnings available for common stock $ 18,634 $ 18,764 $ 17,514 $ 16,533 $ 17,247
Consolidated return on average
common stock equity 11.0% 11.8% 11.8% 12.0% 13.0%
Earnings per share of common stock $1.64 $1.71 $1.65 $1.62 $1.73
Cash dividends paid per share of
common stock $1.42 $1.39 $1.39 $1.37 $1.34
Book value per share of common stock $15.03 $14.21 $14.03 $13.68 $13.32
Net cash provided by operating activities $ 36,833 $ 48,904 $ 42,033 $ 23,591 $ 34,852
Dividends paid $ 18,112 $ 18,174 $ 15,677 $ 14,978 $ 14,104
Construction and plant expenditures $ 20,519 $ 20,503 $ 18,950 $ 21,202 $ 28,045
At end of year
Long-term debt $122,419 $107,879 $130,163 $129,790 $114,750
Total capitalization
(excluding current portion of debt) $331,309 $302,023 $316,897 $286,424 $263,955
Total assets $480,150 $451,052 $430,748 $406,426 $366,216
</TABLE>
<PAGE>
Exhibit EX-13
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Earnings Overview
The company's 1993 earnings were $18.6 million or $1.64 per
share of common stock, equating to an 11.0% return on average
common stock equity. Earnings for 1993 compare to $18.8 million
in 1992 and $17.5 million in 1991. Return on average common
stock equity was 11.8% for 1992 and 1991.
The company earned a 12.0% return on its Vermont utility
business reflecting the lower return allowed by the Vermont
Public Service Board (PSB) for 1993. On non-utility
investments, the company earned a combined return of 6.2%
resulting from a 5.5% return from Catamount Energy Corporation
and 12.2% return from SmartEnergy Services, Inc. See Note 3 to
the Consolidated Financial Statements for additional details on
the company's non-utility investments.
Earnings for 1993 reflect a charge of $821,000 or $.07 per
common share to write-off the non-recoverable portion of the
company's investment in the Seabrook project from some of the
company's firm resale customers. These customers have decided
not to extend their contracts beyond October 1993. As discussed
below, 1993 earnings reflect the lower allowed return on equity
for Vermont's retail business of 12.0%.
A 2.4% increase in the dividend rate and three-for-two common
stock split became effective in February 1993.
In September 1993, the PSB approved the agreement, reached in
April 1993, between the company and the Vermont Department of
Public Service (DPS) regarding the reasonableness of the
company's retail rates. As part of the agreement, the company
agreed to reduce its maximum return on equity for Vermont retail
business from 12.5% to 12.0% for 1993 and accelerated the
recovery of $1.5 million of Conservation and Load Management
(C&LM), also referred to as Demand Side Management, costs in
1993. In November 1993, the PSB opened an investigation into
the company's cost of service and resulting rates as indicated
in its September 1993 order. Although the company believes its
current rate levels are justified, this investigation could
result in a refund of revenues previously collected. The
results of this investigation are expected to be known by the
third quarter of 1994. As discussed below, the company has
filed for a general rate increase in 1994.
Due to increasing competitive pressures in the industry,
uncertainties with Vermont's business environment and slow
growth associated with the recession, the company, in September
1993, announced a cost-cutting plan to mitigate future rate
increases. The plan targets $20 million in annual cost
reductions by the end of 1995 including costs of power, C&LM and
operation and maintenance.
Consistent with its cost-cutting goals, in the first quarter
of 1994, the company offered a series of programs to employees
including voluntary retirement and voluntary resignation. The
company's expectation is that it will reduce its work force by
10% to 15% by the end of 1995. See Note 9 to the Consolidated
Financial Statements for additional information related to the
voluntary programs.
Despite its cost-cutting efforts, the company filed for a
general rate increase of 8.9% on February 15, 1994 to become
<PAGE>
effective November 1, 1994. This will be the company's first
rate increase since September 1991 for its Vermont retail
service area.
Results of Operations
<TABLE>
Operating revenues and MWH sales A summary of MWH sales and
operating revenues for 1993 and 1992 (and the related percentage
changes from 1992) is set forth below:
<CAPTION>
Percentage Percentage
MWH Sales Increase Revenues (000's) Increase
1993 1992 (Decrease) 1993 1992 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
Residential 958,102 971,740 (1.4) $ 99,101 $100,574 (1.5)
Commercial 842,694 837,053 .7 86,553 86,276 .3
Industrial 400,117 420,470 (4.8) 30,741 32,030 (4.0)
Other retail 7,480 7,544 (.8) 1,706 1,700 .4
Total retail sales 2,208,393 2,236,807 (1.3) 218,101 220,580 (1.1)
Less: DPS sales 25,714 101,653 (74.7) 1,558 6,470 (75.9)
Total company retail sales 2,182,679 2,135,154 2.2 216,543 214,110 1.1
Resale sales:
Firm 62,564 87,911 (28.8) 2,747 3,635 (24.4)
Entitlement 908,819 1,070,799 (15.1) 42,417 43,400 (2.3)
Other 286,249 316,069 (9.4) 6,445 7,859 (18.0)
Total resale sales 1,257,632 1,474,779 (14.7) 51,609 54,894 (6.0)
Other revenues - - - 5,162 6,371 (19.0)
Deferred revenues - - - 6,075 - -
Total 3,440,311 3,609,933 (4.7) $279,389 $275,375 1.5
_________ _________ ________ ________
</TABLE>
Year-to-year fluctuations in total retail MWH sales are
primarily affected by customer growth, C&LM programs as well as
relative prices of alternate energy sources, weather patterns and
conservation induced by price changes and income elasticity
responses of customers. Total retail MWH sales and revenues for
1993 decreased 1.3% and 1.1%, respectively, reflecting the
state's continued sluggish economy, the effectiveness of C&LM
programs and the loss of one industrial customer. However, the
company's retail MWH sales and revenues increased 2.2% and 1.1%,
respectively, due to the reduction of the DPS block discussed
below.
Through August 31, 1993, a source of electricity obtained by
the DPS from the New York Power Authority (NYPA) and from Ontario
Hydro was nominally sold by the DPS directly to the company's
retail customers. Sales made by the DPS are excluded from total
company retail sales because they do not represent sales of
electricity from the company's power sources. When the DPS's
sources were not sufficient on a short-term basis, the company
provided back-up energy and capacity to meet the DPS's block
requirements. Under this arrangement, the company was fully
reimbursed for all back-up energy and capacity.
The DPS MWH sales decreased 74.7% compared to 1992 because
effective February 1, 1993, the PSB approved a 150 KWH joint
block supplied by both the company and the DPS, whereby the DPS
provided residential customers with the first 25 KWH and the
company provided the remaining 125 KWH. The 125 KWH were sold at
a non-seasonal (12-month fixed) rate of 9.009 cents per KWH. In
August 1993, the company and the DPS proposed a second agreement
superseding the first, creating a 250 KWH block. This proposal
<PAGE>
was approved by the PSB August 19, 1993 and became effective with
bills rendered September 1, 1993. Under the latter agreement,
the company provides all of the 250 residential KWH at a
non-seasonal rate of 8.811 cents per KWH.
Effective May 1, 1993, one of the company's firm resale
customers opted to purchase power from the company based on
market rates. Firm resale MWH sales and revenues declined
further because several firm resale customers chose not to extend
their contracts beyond October 1993.
Entitlement sales decreased 15.1% or 161,980 MWH for 1993
compared to 1992. The decrease is due to the scheduled refueling
and unplanned shutdowns of Vermont Yankee reducing sales to
UNITIL, and Commonwealth Electric under a swap arrangement. In
addition, in 1992 the company was able to sell a portion of its
Vermont Yankee entitlement to Public Service Company of New
Hampshire.
Other resale MWH sales for 1993 decreased by 9.4% and related
revenues decreased 18.0%. These variances reflect current market
conditions in Vermont and New England and the greater
availability of low cost energy in the region. These sales, made
on a short-term basis, include sales to NEPOOL and other
utilities in New England. Other resale sales are further reduced
due to fewer MWH sales to the DPS as a result of the agreements
described above.
The company continues to make every effort to maintain or
increase resale sales despite the weak market for capacity and
energy that is expected in the near-term.
The company received contract fees from the DPS for delivering
the DPS energy to customers and for providing billing and
collection services. Under this contractual arrangement, the
company received approximately $.9 million in 1993, $2.5 million
in 1992 and $2.6 million in 1991. These fees are reflected in
Other revenues in the preceding table. Although these revenues
decreased in 1993 because of the agreements described above, this
decline was offset by an increase in the company's retail
revenues.
In 1993 the company recognized $6.0 million of deferred
revenues. This amount reflects the $7.5 million which the PSB
required the company to defer from 1991 to 1993, offset by the
accelerated recovery of $1.5 million in C&LM costs per agreement
reached between the company and the DPS described in Earnings
Overview. Recognizing the deferred revenues in 1993 allowed the
company to offset higher 1993 operating costs, thereby mitigating
the need for increased rates in 1993.
The table below analyzes the components of increases or
decreases in revenues (including DPS sales) compared to the prior
year (dollars in thousands):
1993 1992
Revenue increase (decrease) from:
Retail MWH sales $(2,395) $ 4,747
Retail rates (84) 10,730
Changes in firm resale sales (888) (158)
Changes in entitlement sales (983) 23,770
Changes in other resale sales 14 (3,857)
Changes in other revenues 306 707
Deferred revenues 6,075 7,271
Net increase over prior year $ 2,045 $43,210
_______ _______
<PAGE>
The 1.3% decrease in 1993 retail MWH sales described above
resulted in a $2.4 million decrease in retail revenues. Retail
MWH sales in 1992 were higher by 2.4%, compared to 1991 resulting
in a $4.7 million increase in retail revenues.
The increase in retail rates for 1992 is due to the 7.8%
retail rate increase that became effective with bills rendered
September 1, 1991.
The $23.8 million increase in entitlement sales for 1992
resulted primarily from the swap arrangement with Commonwealth
Electric and the sell-back of the Hydro-Quebec Schedule A and
Schedule C-1 power.
The $3.8 million decrease in other resale sales for 1992
resulted primarily from a decrease in sales to NEPOOL.
Deferred revenues of $6.0 million in 1993 relate to the
recognition of 1991 deferred revenues described above.
Purchased power The company purchases approximately 90% of its
power needs under several contracts that have various durations.
Over 30% of these purchases are from affiliated companies whereby
the company receives its entitlement share of the output. The
company's purchased power portfolio assures that a mix of sources
and fuel types are available to meet the company's long-term load
growth while providing short and intermediate term opportunities
to purchase or sell capacity and energy to reduce overall power
costs. The percentages of the company's energy sources from
certain long-term commitments and company-owned generating units
were as follows:
Year Ended December 31
1993 1992 1991
Nuclear generating companies 34% 34% 45%
Canadian imports 28 25 22
PSNH--coal 8 7 8
Company-owned hydro 5 5 6
Jointly owned units 4 4 3
Other sources 21 25 16
100% 100% 100%
____ ____ ____
The company has equity ownership interests in four nuclear
generating companies: Vermont Yankee (VY), Maine Yankee (MY),
Yankee Atomic (YA) and Connecticut Yankee (CY).
The VY nuclear plant, which provides approximately one-third
of the company's power supply, was unavailable from March 6
through April 21, 1992 and from August 27 through October 24,
1993 due to its scheduled refueling outages, and had unscheduled
outages from April 7 to April 16, 1993 and December 6 to
December 20, 1993. No major unscheduled outages were experienced
during 1992.
The MY plant was shut down for refueling and maintenance from
February 14 through April 19, 1992 and from July 30 through
October 13, 1993.
See Note 2 to the Consolidated Financial Statements for
details related to YA.
The CY plant was shut down for refueling and for an extended
outage from October 17, 1991 through March 18, 1992 and was shut
down for a scheduled refueling outage from May 15 through
July 21, 1993.
Millstone #3 was shut down from July 31 through November 7,
1993 for a refueling outage.
<PAGE>
During scheduled refueling outages, the company purchases more
costly replacement energy from NEPOOL and other sources to
satisfy energy needs. In accordance with current rate-making
treatment, the company defers and amortizes to expense over their
respective fuel cycles the incremental replacement energy and
maintenance costs associated with these refueling outages for the
Yankee plants and the Millstone #3 jointly owned nuclear
generating unit. During 1993, the company deferred $2.4 million
and $6.5 million of replacement energy and capacity costs,
respectively, for VY, MY, CY and Millstone #3.
In 1984, the company and other Vermont utilities signed a
long-term purchased power contract with the DPS for 150 MW of
power provided by Hydro-Quebec. During 1987, the company and
eight other Vermont utilities signed a long-term purchased power
contract with Hydro-Quebec for up to 450 MW of power until 2020.
Approval of the 450 MW contract was received in 1990. See
Note 11 to the Consolidated Financial Statements for further
details related to the Hydro-Quebec power contracts.
Under a 30-year contract, which expires in 1998, the company
purchases 46.98 MW of capacity from Merrimack #2, a coal-fired
generating plant owned by Northeast Utilities (N.U.). Vermont
Electric Power Company, Inc., representing Vermont utilities, and
N.U. negotiated an agreement which assures the continuation of
this contract under its original terms, thereby resolving past
uncertainty relating to the contractual price of capacity and the
availability of the unit to the company.
The company also owns 18 hydroelectric generating units which
have a total nameplate capability of 37.5 MW and two gas-fired
and one diesel peaking units with a combined nameplate capability
of 28.9 MW and leases and operates two hydroelectric generating
stations from wholly owned subsidiaries with a combined nameplate
capability of 3.7 MW. In addition, the company maintains
joint-ownership interests in Joseph C. McNeil, a 53 MW wood, gas
and oil-fired unit; Wyman #4, a 619 MW oil-fired unit; and
Millstone #3, an 1149 MW nuclear unit. The company's percentage
ownership in these units is 20%, 1.78% and 1.73%, respectively.
The net cost components of purchased power for the past three
years were as follows (dollars in thousands):
<TABLE>
<CAPTION>
1993 1992 1991
Units Amount Units Amount Units Amount
<S> <C> <C> <C> <C> <C> <C>
Purchased:
Capacity (MW) 496 $ 86,857 478 $ 84,346 416 $ 65,057
Energy (MWH) 3,338,298 59,726 3,481,297 55,514 2,998,266 50,373
Production fuel (MWH) 313,020 1,737 324,478 2,201 286,660 2,065
Total purchased power and
production fuel costs 148,320 142,061 117,495
Entitlement and other
resale sales (MWH) 1,195,068 48,862 1,386,868 51,259 936,241 30,787
Net purchased power and
production fuel costs $ 99,458 $ 90,802 $ 86,708
________ ________ ________
</TABLE>
The increase in total purchased capacity costs for 1993 is due
to an increase in MW purchased, primarily from small power
producers.
The 1992 increase in total purchased capacity costs is
<PAGE>
attributable to a $9.7 million increase in price and $9.6 million
relating to a 14.9% increase in MW purchased.
Total energy costs increased $4.2 million for 1993 primarily
due to a $6.5 million increase in price offset by a decrease of
$2.3 million relating to a 4.1% decrease in MWH purchased.
However, average cost per KWH purchased increased by 12.2%. The
higher average cost is primarily due to increased MWH purchased
from small power producers mandated by Federal and state
legislation.
Total energy costs increased $5.1 million in 1992. The
increase is attributable to a 16.1% increase in MWH purchased
offset by a 5% decrease in the 1992 average cost per KWH.
Energy costs are directly related to the variable prices of
oil, nuclear fuel and coal but more importantly, to the
proportion of the company's purchased energy that comes from each
of these fuel sources. The swap arrangement with Commonwealth
Electric of Canal #2 power has increased the company's reliance
on oil as a source of electricity. Also, some Canadian purchased
power contracts are tied to fossil fuel price indices. This will
increase the company's exposure to the variability of oil price
volatility.
Production fuel costs decreased 21.1% or $.5 million in 1993,
due to lower generation by the company's jointly owned units.
For 1992, production fuel costs were stable compared to 1991.
In order to optimize its power mix for baseload, intermediate
and peaking power, the company engages in sales and purchases
with other electric utilities, primarily in New England and with
NEPOOL. These transactions typically take advantage of immediate
pricing and other market conditions. The profits from these
transactions are used to reduce revenue requirements for
rate-making purposes.
As stated earlier, the company is making every effort to
maintain or increase these sales despite the weak resale market
for excess capacity and energy in the region.
Production and transmission Phase II transmission line began
operation in November 1990. This service increased the maximum
capacity of the Hydro-Quebec 450 KV DC line from 690 MW to 2000
MW and extended the Phase I line from Comerford, New Hampshire to
Sandy Pond, Massachusetts. The company uses this transmission
path to deliver a portion of the company's long-term Hydro-Quebec
firm power contract. The Phase II project cost is approximately
$487 million. The company pays 5.132% of support costs of about
$2.7 million annually. Also, the company is obligated to pay a
4.421% share of the Phase I Hydro-Quebec capital costs of about
$.5 million annually. Under the support agreement, the company
is eligible for savings associated with certain energy
transactions by NEPOOL, which offset the company's support cost
obligations.
The increase in production and transmission expenses for 1993
was minimal. The 1992 increase of $1.2 million is due to a
retroactive adjustment recorded during the second quarter of 1991
resulting from the restructuring of the Hydro-Quebec Phase II
debt from 10 to 25 years, increased transmission costs from
Vermont Electric Power Company, Inc. and increased generation by
two of the company's jointly owned units, Millstone #3 and Wyman
#4, and an increase in their operating costs. These increases
were offset in part by lower generation by the Joseph C. McNeil
<PAGE>
generating plant in which the company has a 20% ownership
interest.
Other operation expenses Other operation expenses decreased
$2.2 million for 1993 primarily due to an environmental reserve
of $4.9 million established in December 1992 related to Cleveland
Avenue offset in part by the recognition of a postretirement
benefit obligation in accordance with Statement of Financial
Accounting Standard (SFAS) No. 106 effective January 1, 1993.
For more information on SFAS No. 106, see Note 9 to the
Consolidated Financial Statements.
Other operating expenses for 1992 include the $4.9 million
reserve related to estimated costs associated with the cleanup of
the coal tar deposits discovered at the company's Cleveland
Avenue site. For a complete disclosure on environmental matters,
see Note 11 to the Consolidated Financial Statements.
The company currently provides certain postemployment benefits
consisting of long-term disability benefits and expenses such
costs as benefits are paid, which is consistent with current
rate-making practices. In November 1992, the Financial
Accounting Standards Board issued Statement No. 112 that requires
accrual of the expected costs of such benefits provided after
employment but before retirement. For a complete disclosure of
the effect on the company's financial position at time of
adoption, see Note 9 to the Consolidated Financial Statements.
Depreciation The increases in depreciation expense for 1993 and
1992 are due to property additions and the installation of a new
customer service information system in February 1992 and general
ledger computer system in August 1993 as well as installation of
phase 2 and 3 of the customer service information system in
September and December 1993, respectively.
Income taxes Federal and state income taxes fluctuate with the
level of pretax earnings. During 1993 the company recognized
additional accumulated deferred income taxes of approximately
$15 million and a net corresponding asset from customers of
approximately $15 million reflecting future revenues that will be
required when the temporary differences reverse and are settled
in rates. See Note 10 to the Consolidated Financial Statements
for additional information relating to the adoption of SFAS
No. 109. Also, due to the Revenue Reconciliation Act which was
passed on August 10, 1993, income tax expense increased by
approximately $285,000 for the year 1993. The increase in total
income tax expense for 1992 resulted from a 36.4% increase in
pretax earnings for the period.
Other income and deductions Beginning in January 1991, the
company began accruing AFDC on expenditures related to the
development of software in accordance with regulatory policies.
The increase in allowance for equity and borrowed funds used
during construction for 1992 is primarily related to the
company's investment in its customer information system which was
placed in service February 3, 1992. In 1993, AFDC was lower than
1992 due to lower rates used for capitalization of these funds.
Other income, net, decreased due to lower prevailing interest
rates and lower levels of investments during 1993 resulting in
decreased earnings from temporary cash investments offset by
increased income from non-utility operations.
<PAGE>
Other income, net, increased in 1992 due to higher income from
non-utility operations and interest from temporary cash
investments. This increase was offset in part by the
reclassification of expenses incurred in connection with the sale
of accounts receivable and unbilled revenues from operating
expenses and by a write-off of approximately $568,000 of Seabrook
Unit 1 and 2 investments related to one of the company's
wholesale customers.
Interest on long-term debt Interest on long-term debt decreased
$3.0 million and $.4 million for 1993 and 1992, respectively,
primarily due to the company's continuing program of refinancing
First Mortgage Bonds at lower interest rates.
Other interest expense Other interest expense decreased
$.9 million for 1993 mainly due to a FERC settlement related to
certain wholesale customers. The decrease is offset in part by
an increase in interest expense due to higher levels of
short-term borrowings outstanding during 1993. Other interest
expense decreased for 1992 due to lower levels of short-term
borrowings outstanding combined with lower short-term interest
rates as well as a decrease in interest expense related to the
company's IRS audit.
Liquidity and Capital Resources
Construction The company's liquidity is primarily affected by
the level of cash generated from operations and the funding
requirements of its ongoing construction program. Cash flows
from operating activities after dividends paid provided
approximately $18.7 million in 1993, $30.7 million in 1992 and
$26.4 million in 1991.
Planned construction expenditures over the next five years
will be directed toward reconstructing and refurbishing the
company's hydro, transmission, distribution and general
facilities to improve system reliability and customer service.
Excluding allowance for funds used during construction,
construction expenditures plus expenditures for the company's
C&LM programs are estimated at $26.4 million for each of the next
five years. The company expects to finance approximately 80% of
these annual expenditures with funds generated from operations
and plans to finance the balance with short-term and long-term
debt.
Financing and Capitalization
Utility The level of short-term borrowings fluctuates based
on seasonal corporate needs, the timing of long-term financings
and market conditions. Short-term borrowings are supported by
committed lines of credit and uncommitted loan facilities with
several banks totaling $58 million. Short-term borrowings
generally are reduced when long-term debt or equity securities
are issued. In December 1993, the company issued $43 million of
long-term debt, of which $14.5 million replaced First Mortgage
Bonds redeemed in October 1993 and $4.325 million replaced First
Mortgage Bonds redeemed in January 1994. The balance was used to
reduce short-term debt outstanding. In the past, the company has
been able to finance its construction program and expects to be
able to meet all future commitments.
<PAGE>
In 1988, the company sold a $12 million interest in certain
customers' accounts receivable and unbilled revenues. Under the
sales of accounts receivable agreement the company can sell an
additional $8 million of accounts receivable if certain accounts
receivable ratio tests are satisfied. The original sale of
customer accounts receivable and unbilled revenue was for a
two-year period with an option that the company may request, on
each anniversary date, an extension for an additional year.
The company's capital structure has remained consistent with
the company's long-range financial objectives, a debt ratio of
45% or lower, an equity ratio higher than 45%. The company's
capital structure ratios (excluding amounts of long-term debt
due within one year) for the past three years were as follows:
December 31
1993 1992 1991
Common stock equity 52% 53% 48%
Preferred stock 11 11 11
Long-term debt 37 36 41
100% 100% 100%
___ ___ ___
The credit ratings of the company's securities as of
December 31, 1993, as reaffirmed by Standard & Poor's Corp. and
Duff & Phelps Corp. in mid-1993 are BBB+ and A-, respectively,
for First Mortgage Bonds and BBB for Preferred Stock.
On December 15, 1993 the company issued $43 million of First
Mortgage Bonds. The net proceeds from the issuance of the First
Mortgage Bonds were used to replace First Mortgage Bonds redeemed
in October 1993 and January 1994. The balance was used to repay,
in part, short-term debt incurred for expenditures in connection
with the company's construction program and for other corporate
purposes. The company redeemed in January 1994, $7 million of
the 9.00% Series Preferred Stock $25 Par Value and plans to
reissue approximately $7 million of Preferred Stock in the second
quarter of 1994.
Non-Utility In October 1993, Catamount Energy Corporation, a
non-utility subsidiary of the company, established an Irrevocable
Standby Letter of Credit with a bank to borrow up to an aggregate
amount of $2.3 million to replace its share of cash in the
Appomattox Cogeneration's Project Debt Service Reserve Fund.
This Letter of Credit is for a one-year term with annual
extensions available.
In December 1993, Catamount established an unsecured line of
credit with a bank to borrow up to $.5 million in support of
short-term working capital requirements. This line of credit
matures March 1, 1994.
In September 1993, SmartEnergy Services, Inc., also a
non-utility subsidiary of the company, established a $1.0 million
revolving line of credit with a bank to provide working capital
and financing assistance for investment purposes. This line of
credit is negotiable in one year.
Financial obligations of the non-utility wholly owned
subsidiaries are non-recourse to the company.
Conservation and Load Management Programs The primary purpose of
these programs is to offset the need for long-term power supply
and delivery resources that are more expensive to purchase or
<PAGE>
develop than customer-efficiency programs. Expenditures in 1992
and 1993 were $4.3 million and $9.5 million, respectively, and
are planned to be approximately $5.4 million in 1994. The amount
of expenditures will be adjusted annually, based on the
cost-effectiveness of programs compared to other options.
The PSB has approved all of the company's C&LM programs
delivered in Vermont, which include direct utility investments in
customer premises to increase customer participation. In
addition, the PSB has approved a Monitoring and Evaluation Plan
utilized to evaluate the continued cost-effectiveness of the C&LM
programs.
In late 1993, the company filed a Petition to Amend and slow
the pace of its C&LM programs in light of the excess capacity in
the region which made some of the C&LM programs less effective in
the near-term. The revised programs focus on improving
efficiencies based on lessons learned in the past several years.
In addition, the programs focus on incorporating efficiencies for
new construction and remodeling programs that have long useful
lives. In the Petition, the company stated it planned to
implement the program amendments with or without PSB approval
starting in 1994. By letter dated January 20, 1994, the PSB
indicated it would not be opening proceedings concerning the
Petition at this time. However, many of the issues raised in the
Petition are before the PSB, along with deferred C&LM
expenditures and related lost revenues from 1991 to the present,
in the PSB's investigation of our rates.
In addition, in Vermont, the company is involved in several
cases related to C&LM activities including the role of fuel
switching as a C&LM measure, the level of externalities for
electricity and the role of fuel choice in new construction.
In an order dated December 29, 1992, the New Hampshire Public
Utilities Commission (NHPUC) approved C&LM programs of the
company's wholly owned New Hampshire subsidiary, Connecticut
Valley Electric Company Inc. Currently, the NHPUC staff and the
company have reached agreement on all of the issues but one
concerning the 1994 C&LM expenditures and related lost revenues.
These expenditures and lost revenues are recovered along with
shareholder incentives for 1993 program activity through a C&LM
percentage adjustment clause applied March 1, 1994 through the
end of 1994. The only issue awaiting clarification by the NHPUC
is the method for calculating lost revenues. The agreement
reached by the company and the NHPUC staff includes a pilot
program through which costs of C&LM services will be billed
directly to customers.
Diversification Catamount Energy Corporation (Catamount) was
formed for the purpose of investing in non-regulated
energy-related projects. Currently, Catamount has four wholly
owned subsidiaries with interests in four operating independent
power projects located in Rumford, Maine; East Ryegate, Vermont;
Hopewell, Virginia; and Williams Lake, British Columbia, Canada.
Effective January 1, 1993, the company formed a new
non-utility subsidiary, SmartEnergy Services, Inc. The purpose
of this subsidiary is to cost effectively provide reliable,
energy-efficient products and services, including the rental of
electric water heaters.
Rates The company recognizes that adequate and timely rate
relief is necessary if the company is to maintain its financial
<PAGE>
strength, particularly since Vermont regulatory rules do not
allow for changes in purchased power and fuel costs to be passed
on to consumers through rate adjustment clauses. The company's
practice of reviewing costs periodically will continue and rate
increases will be requested when warranted. As part of an
agreement reached with the DPS, and subsequently approved by the
PSB, the company agreed not to increase general rates before
August 1994. The company filed for an 8.9% general rate increase
on February 15, 1994 to become effective November 1, 1994. See
Earnings Overview for additional information regarding this
matter. The company anticipates filing for rate increases
periodically, primarily to recover increasing purchased power and
other operating costs.
Inflation The annual rate of inflation as measured by the
Consumer Price Index was 2.7% for 1993, 2.9% for 1992 and 3.1%
for 1991. The company's revenues, however, are based on rate
regulation that generally recognizes only historical costs.
Inflation continues to have an impact on most aspects of the
business. Despite the modest impact of recent inflation, the
company has been able to earn its allowed return through modest
sales growth and cost containment measures.
<PAGE>
Exhibit EX-13
<TABLE>
CONSOLIDATED STATEMENT OF INCOME
(Dollars in thousands, except per share amounts)
<CAPTION>
Year Ended December 31
1993 1992 1991
<S> <C> <C> <C>
Operating Revenues $279,389 $275,375 $233,469
Operating Expenses
Operation
Purchased power 146,583 139,860 115,430
Production and transmission 21,188 20,340 19,180
Other operation 35,933 38,131 33,064
Maintenance 11,719 11,890 11,241
Depreciation 15,402 14,408 12,388
Other taxes, principally property taxes 10,022 9,602 9,286
Taxes on income 12,496 12,102 5,820
Total operating expenses 253,343 246,333 206,409
Operating Income 26,046 29,042 27,060
Other Income and Deductions
Equity in earnings of affiliates 3,613 3,815 3,966
Allowance for equity funds during construction 35 267 287
Other income, net 827 1,383 958
Provision for income taxes (276) (311) (401)
Total other income and deductions, net 4,199 5,154 4,810
Total Operating and Other Income 30,245 34,196 31,870
Interest Expense
Interest on long-term debt 8,804 11,779 12,200
Other interest 226 1,148 1,461
Allowance for borrowed funds during construction (77) (153) (367)
Total interest expense, net 8,953 12,774 13,294
Net Income 21,292 21,422 18,576
Preferred Stock Dividends Requirements 2,658 2,658 1,062
Earnings Available For Common Stock $ 18,634 $ 18,764 $ 17,514
Average Shares of Common Stock Outstanding 11,383,109 10,992,123 10,614,642
Earnings Per Share of Common Stock $1.64 $1.71 $1.65
Dividends Per Share of Common Stock $1.42 $1.39 $1.39
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
Year Ended December 31
1993 1992 1991
<S> <C> <C> <C>
Cash Flows Provided (Used) By
Operating Activities
Net income $ 21,292 $ 21,422 $ 18,576
Adjustments to reconcile net income to net cash
provided by operating activities
Deferred revenues (7,507) - 7,271
Depreciation 15,402 14,408 12,388
Deferred income taxes and investment tax credits 9,615 2,652 (1,855)
Allowance for equity funds during construction (35) (267) (287)
Net deferral and amortization of nuclear
replacement energy and maintenance costs (3,797) (135) 1,842
Amortization of property losses 1,262 119 794
Amortization of nuclear fuel 515 547 217
(Increase) decrease in accounts receivable 1,127 (823) (3,403)
Increase (decrease) in accounts payable (3,475) 1,433 2,080
Increase (decrease) in accrued income taxes (2,991) 3,179 (2,713)
Decrease in other working capital items 2,028 1,162 574
Other, net 3,397 5,207 6,549
Net cash provided by operating activities 36,833 48,904 42,033
Investing Activities
(Increase) decrease in temporary investments 597 17,978 (17,833)
Construction and plant expenditures (20,519) (20,503) (18,950)
Conservation and load management expenditures (9,874) (3,539) (1,946)
Investments in affiliates 290 269 823
Non-utility investments (7,425) (13,536) (3,932)
Other investments, net (382) (391) (208)
Net cash used in investing activities (37,313) (19,722) (42,046)
Financing Activities
Issuance of long-term debt 43,000 - 15,000
Sale of common stock 8,325 7,988 6,609
Sale of preferred stock - - 20,000
Short-term debt, net (744) 2,100 (14,740)
Retirement of long-term debt (34,216) (18,844) (14,210)
Common and preferred dividends paid (18,112) (18,174) (15,677)
Other 336 (180) 456
Net cash used by financing activities (1,411) (27,110) (2,562)
Net Increase (Decrease) In Cash (1,891) 2,072 (2,575)
Cash at Beginning of Year 2,714 642 3,217
Cash at End of Year $ 823 $ 2,714 $ 642
Supplemental Cash Flow Information
Cash paid during the year for:
Interest (net of amounts capitalized) $ 9,991 $ 12,565 $ 13,547
Income taxes (net of refunds) $ 5,337 $ 6,571 $ 10,733
<PAGE>
<PAGE>
</TABLE>
<TABLE>
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
<CAPTION>
December 31
Assets 1993 1992
<S> <C> <C>
Utility Plant, at original cost $421,929 $406,695
Less accumulated depreciation 112,299 102,329
309,630 304,366
Construction work in progress 8,388 10,534
Nuclear fuel, net 1,390 1,497
Net utility plant 319,408 316,397
Investments and Other Assets
Investments in affiliates, at equity 26,963 27,175
Non-utility investments 30,123 23,099
Non-utility property, less accumulated depreciation 3,203 3,151
Total investments and other assets 60,289 53,425
Current Assets
Cash 823 2,714
Temporary investments, at cost which
approximates market 1,162 1,759
Accounts receivable 18,614 18,988
Unbilled revenues 10,959 11,789
Materials and supplies, at average cost 4,641 4,201
Prepayments 3,098 4,093
Other current assets 4,821 4,071
Total current assets 44,118 47,615
Regulatory Assets and Other Deferred Charges 56,335 33,615
Total Assets $480,150 $451,052
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF CAPITALIZATION
(Dollars in thousands)
<CAPTION>
December 31
1993 1992
<S> <C> <C>
Common Stock Equity
Common stock, $6 par value, authorized
19,000,000 shares; outstanding 11,562,219
shares in 1993 and 11,196,576 shares in
1992 $ 69,373 $ 67,180
Other paid-in capital 42,584 36,472
Retained earnings 61,879 55,438
Total common stock equity 173,836 159,090
Cumulative Preferred and Preference Stock
Preferred stock, $100 par value, authorized
500,000 shares
Outstanding:
Non-redeemable
4.15 % Series; 37,856 shares 3,786 3,786
4.65 % Series; 10,000 shares 1,000 1,000
4.75 % Series; 17,682 shares 1,768 1,768
5.375% Series; 15,000 shares 1,500 1,500
Redeemable
8.30 % Series; 200,000 shares 20,000 20,000
Preferred stock, $25 par value, authorized
1,000,000 shares
Outstanding: 9.00% Series; 280,000 shares 7,000 7,000
Preference stock, $1 par value, authorized
1,000,000 shares
Outstanding - none - -
Total cumulative preferred and preference stock 35,054 35,054
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
December 31
1993 1992
<S> <C> <C>
Long-Term Debt
First Mortgage Bonds
5 1/8% Series M , due 1995 4,255 4,280
6 3/4% Series N , due 1996 4,325 4,350
8 1/2% Series P , due 1999 - 3,000
8 3/4% Series R , due 2001 - 3,000
8 1/2% Series S , due 2003 - 5,000
9 1/2% Series Y , due 2003 1,000 5,500
12 1/4% Series BB, due 1998 - 6,000
12.85 % Series DD, due 1997 - 6,666
9.20 % Series EE, due 1998 7,500 7,500
9.20 % Series FF, due 2000 7,500 7,500
9.26 % Series GG, due 2002 3,000 3,000
9.97 % Series HH, due 2003 25,000 25,000
8.91 % Series JJ, due 2031 15,000 15,000
5.30 % Series KK, due 1998 10,000 -
5.54 % Series LL, due 2000 5,000 -
6.01 % Series MM, due 2003 7,500 -
6.27 % Series NN, due 2008 3,000 -
6.90 % Series OO, due 2023 17,500 -
Debentures
7 %, due 1993 - 6,000
Vermont Industrial Development Authority Bonds
Variable, due 2013 (2.80% at December 31, 1993) 5,800 5,800
New Hampshire Industrial Development Authority Bonds
6 7/8%, due 2009 5,500 5,500
Connecticut Development Authority Bonds
Variable, due 2015 (2.75% at December 31, 1993) 5,000 5,000
Other
Variable, due 1999 (6% at December 31, 1993) 389 -
127,269 118,096
Less current portion 4,850 10,217
Total long-term debt 122,419 107,879
Total Capitalization $331,309 $302,023
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF CHANGES IN COMMON STOCK EQUITY
(Dollars in thousands)
<CAPTION>
Other
Common Stock Paid-in Retained
Shares Amount Capital Earnings Total
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1990 10,349,096 $62,095 $27,650 $ 51,835 $141,580
Sale of common stock 459,367 2,756 3,853 6,609
Net income 18,576 18,576
Cash dividends on capital stock:
Common stock - $1.39 per share (14,679) (14,679)
Cumulative preferred stock:
Non-redeemable (998) (998)
Redeemable (64) (64)
Other paid-in capital (486) (486)
Common stock issuance expenses (24) (24)
Acquisition adjustment 1,166 1,166
Balance, December 31, 1991 10,808,463 64,851 30,993 55,836 151,680
Sale of common stock 388,113 2,329 5,659 7,988
Net income 21,422 21,422
Cash dividends on capital stock:
Common stock - $1.39 per share (19,162) (19,162)
Cumulative preferred stock:
Non-redeemable (998) (998)
Redeemable (1,660) (1,660)
Common and preferred stock
issuance expenses (180) (180)
Balance, December 31, 1992 11,196,576 67,180 36,472 55,438 159,090
Sale of common stock 365,643 2,193 6,132 8,325
Net income 21,292 21,292
Cash dividends on capital stock:
Common stock - $1.42 per share (12,193) (12,193)
Cumulative preferred stock:
Non-redeemable (998) (998)
Redeemable (1,660) (1,660)
Common and preferred stock
issuance expenses (20) (20)
Balance, December 31, 1993 11,562,219 $69,373 $42,584 $ 61,879 $173,836
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1
Summary of significant accounting policies
Consolidation The consolidated financial statements include the accounts of
the company and its wholly owned subsidiaries.
Regulation The company is subject to regulation by the Vermont Public
Service Board (PSB), the Federal Energy Regulatory Commission (FERC) and,
to a lesser extent, the public utilities commissions in other New England
states where the company does business, with respect to rates charged for
service, accounting and other matters pertaining to regulated operations.
As such, the company currently prepares its financial statements in
accordance with Statement of Financial Accounting Standards (SFAS) No. 71,
Accounting for the Effects of Certain Types of Regulation, and records
various regulatory assets and liabilities. In order for a company to
report under SFAS No. 71, the company's rates must be designed to recover
its costs of providing service, and the company must be able to collect
those rates from customers. Management believes that the company currently
meets the criteria for continued application of SFAS No. 71, but will
continue to evaluate significant changes in the regulatory and competitive
environment to assess the company's overall consistency with the criteria
of SFAS No. 71.
Revenues Estimated unbilled revenues are recorded at the end of accounting
periods. Unbilled revenues of approximately $17.3 million, $18.6 million
and $18.3 million for 1991, 1992 and 1993, respectively, are included in
revenues on the Consolidated Statement of Income. On January 10, 1992, the
PSB issued an Accounting Order which required the company to defer
recognition of approximately $7.3 million of retail revenues that otherwise
would have been recognized in 1991 and would have caused the company to
report earnings in excess of the allowed return on utility common stock
equity of 12.5% for 1991. In compliance with the Accounting Order the 1991
deferred revenues were recognized as revenues during 1993 offsetting higher
operating and maintenance costs incurred during 1993.
Maintenance Maintenance and repairs, including replacements not qualifying
as retirement units of property, are charged to maintenance expense.
Replacements of retirement units are charged to utility plant. The
original cost of units retired plus the cost of removal, less salvage, is
charged to the accumulated provision for depreciation.
Depreciation The company uses the straight-line remaining life method of
depreciation. Total depreciation expense was between 3.49% and 3.52% of
the cost of depreciable utility plant for the years 1991 through 1993.
Income Taxes As of January 1, 1993, the company adopted SFAS No. 109,
which requires an asset and liability approach to determine income tax
liabilities. The standard recognizes tax assets and liabilities for the
cumulative effect of all temporary differences between financial statement
carrying amounts and the tax bases of assets and liabilities including the
impact of (1) income tax benefits associated with temporary differences
previously passed on to the company's customers (flow-through), (2) the
equity component of allowance for funds used during construction and
(3) deferred investment tax credits. The new standard also requires the
adjustment of deferred tax liabilities or assets for an enacted change in
<PAGE>
tax laws or rates, among other things. Prior year financial statements
have not been restated to apply the provisions of SFAS No. 109. The income
statement impact of adopting SFAS No. 109 was not material and therefore no
cumulative effect of a change in accounting method is separately reflected
in the accompanying financial statements. See Note 10. The deferred
method under APB 11, was applied in 1992 and prior years. Deferred income
taxes were provided to recognize the income tax effect of reporting certain
transactions in different years for income tax and financial reporting
purposes. Investment tax credits associated with utility plant are
deferred and amortized ratably to income over the lives of the related
properties. Investment tax credits associated with non-utility plant are
recognized as income in the year realized.
Allowance for Funds During Construction Allowance for funds used during
construction (AFDC) is the cost, during the period of construction, of debt
and equity funds used to finance construction projects. The company
capitalizes AFDC as a part of the cost of major utility plant projects to
the extent that costs applicable to such construction work in progress have
not been included in rate base in connection with rate-making proceedings.
AFDC equity represents a current non-cash credit to earnings which is
recovered over the life of the property. The AFDC rates used by the
company were 9.10%, 10.51% and 5.09% for the years 1991 through 1993,
respectively.
Regulatory Assets and Other Deferred Charges Certain costs are deferred and
amortized in accordance with authorized or expected rate-making treatment.
During regular nuclear refueling outages, the increased costs attributable
to replacement energy purchased from NEPOOL and maintenance costs are
deferred and amortized ratably to expense until the next regularly
scheduled refueling shutdown. The company earns a return on the
unamortized replacement energy and maintenance costs. See Note 2 to the
Consolidated Financial Statements for discussion of the costs associated
with the discontinued operation of the Yankee Atomic Nuclear Power
Corporation nuclear power plant.
Reclassifications Certain reclassifications have been made to prior year
Consolidated Financial Statements to conform with the 1993 presentation.
Note 2
Investments in affiliates
The company uses the equity method to account for its investments in the
following companies (dollars in thousands):
<TABLE>
<CAPTION>
December 31
Ownership 1993 1992
<S> <C> <C> <C>
Nuclear generating companies:
Vermont Yankee Nuclear Power Corporation 31.3% $16,811 $16,847
Connecticut Yankee Atomic Power Company 2.0% 2,016 2,026
Maine Yankee Atomic Power Company 2.0% 1,349 1,331
Yankee Atomic Electric Company 3.5% 836 771
21,012 20,975
Vermont Electric Power Company, Inc.:
Common stock 56.8% 3,498 3,601
Preferred stock 2,453 2,599
$26,963 $27,175
</TABLE>
<PAGE>
<PAGE>
Each sponsor of the nuclear generating companies is obligated to pay an
amount equal to its entitlement percentage of fuel, operating expenses
(including decommissioning expenses) and cost of capital and is entitled to
a similar share of the power output of the plants. The company's
entitlement percentages are identical to the ownership percentages except
that Vermont Yankee's entitlement percentage is 35%. The company is
obligated to contribute its entitlement percentage of the capital
requirements of Vermont Yankee and Maine Yankee and has a similar, but
limited, obligation to Connecticut Yankee. The company is responsible for
paying its entitlement percentage of decommissioning costs for Vermont
Yankee, Connecticut Yankee, Maine Yankee and Yankee Atomic as follows
(dollars in millions):
<TABLE>
<CAPTION>
CVPS's
Total Share of
Date of Estimated CVPS's Funded
Study Obligation Obligation Obligation
<S> <C> <C> <C> <C>
Nuclear generating companies:
Vermont Yankee 1988 $190 $66.5 $34.6
Maine Yankee 1987 $167 $3.3 $1.9
Connecticut Yankee 1992 $294.2 $5.9 $2.5
Yankee Atomic 1992 $200 $7.0 $3.1
</TABLE>
On February 26, 1992, the Board of Directors of Yankee Atomic decided
to permanently discontinue operation of their plant, and, in time,
decommission the facility. The decision to prematurely retire the plant
was based on continuing regulatory uncertainty and economics.
The company relied on Yankee Atomic for less than 1.5% of its system
capacity. Presently, purchased power costs billed to the company by Yankee
Atomic, which include a provision for ultimate decommissioning of the unit,
are being collected from the company's customers via existing retail and
wholesale rate tariffs.
On March 18, 1993, the FERC approved the settlement agreement
regarding the decommissioning plan, recovery of plant investment and all
issues with respect to prudency of the decision to discontinue operation.
Yankee Atomic has estimated that as of December 31, 1993, its costs of
discontinuing operations are approximately $345 million, which includes
$200 million of decommissioning costs in 1992 dollars.
The company's total current share of its cost with respect to Yankee
Atomic's decision to discontinue operation is approximately $12 million.
This amount is subject to ongoing review and revision and is reflected in
the accompanying balance sheet both as a regulatory asset and deferred
power contract obligation (current and non-current).
The company believes that its proportionate share of Yankee Atomic
costs will be recovered through the regulatory process and, therefore, the
ultimate resolution of the premature retirement of the plant will not have
a material adverse effect on the company's earnings or financial condition.
Although the estimated costs of decommissioning are subject to change
due to changing technologies and regulations, the company expects that the
nuclear generating companies' liability for decommissioning, including any
future changes in the liability, will be recovered in their rates over
their operating lives.
The Price-Anderson Act currently limits public liability from a single
incident at a nuclear power plant to $9.4 billion, beyond that a licensee
<PAGE>
Velco operates pursuant to the terms of the 1985 Four-Party Agreement
(as amended) with the company and two other major distribution companies in
Vermont. Although the company owns 56.8% of Velco's outstanding common
stock, the Four-Party Agreement effectively restricts the company's control
of Velco, therefore, Velco's financial statements have not been
consolidated. The Four-Party Agreement continues in full force and effect
until May 1995 and will be extended for an additional two-year term in May
1995, and every two years thereafter, unless at least ninety (90) days
prior to any two-year anniversary any party shall notify the other parties
in writing that it desires to terminate the agreement as of such
anniversary. No such notification has been filed by the parties. The
company also owns 46.6% of Velco's outstanding preferred stock, $100 par
value.
Summarized financial information for Velco is as follows (dollars in
thousands):
<TABLE>
<CAPTION>
Earnings 1993 1992 1991
<S> <C> <C> <C>
Transmission revenues $17,891 $16,722 $15,975
Operating income $4,423 $4,379 $4,345
Net income $1,375 $1,494 $1,549
Company's equity in net income $698 $749 $773
December 31
Investment 1993 1992
<S> <C> <C>
Current assets $15,181 $12,675
Non-current assets 55,018 58,146
Total assets 70,199 70,821
Less:
Current liabilities 13,180 18,824
Non-current liabilities 45,626 40,064
Net assets $11,393 $11,933
Company's equity in net assets $ 5,951 $ 6,200
</TABLE>
Note 3
Non-utility investments
The company's wholly owned subsidiary, Catamount Energy Corporation
(Catamount) invests in non-regulated, energy-related projects. Currently,
Catamount has four wholly owned subsidiaries: Catamount Rumford
Corporation, Equinox Vermont Corporation, Appomattox Vermont Corporation
and Catamount Williams Lake LTD. Certain financial information for
Catamount's investments is set forth in the table that follows (dollars in
thousands):
<TABLE>
<CAPTION>
Investment
Generating December 31
Projects Location Capacity Fuel Ownership 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Rumford Cogeneration Co. (Rumford) Maine 85MW Coal/Wood 10.9% $6,280 $5,926
Ryegate Associates (Equinox) Vermont 20MW Wood 33.1% $7,034 $2,619
Appomattox Cogeneration (Appomattox) Virginia 57MW Wood/Coal 50.0% $10,668 $11,803
Black liquor
<PAGE>
NW Energy Williams Lake L.P. British Columbia, 60MW Wood 8.1% $1,975 -
(Williams Lake) Canada
</TABLE>
The Rumford project was placed in service on August 1, 1990. The
Ryegate and Williams Lake projects began commercial operation on November
1, 1992 and April 2, 1993, respectively. On October 26, 1992, Appomattox
purchased a 50% partnership interest in Appomattox Cogeneration which owns
a power sales agreement associated with a cogeneration facility currently
in operation.
Subsequent to December 31, 1993, Catamount purchased an additional
4.185% limited partnership interest in Rumford Cogeneration Co. This
investment will increase Rumford's ownership in the project to 15.053%. At
December 31, 1993, Catamount had $2.95 million in an escrow account in
anticipation of this closing.
Effective January 1, 1993, the company formed a new subsidiary,
SmartEnergy Services, Inc. (SmartEnergy). The purpose of this subsidiary
is to cost effectively provide reliable, energy efficient products and
services, including the rental of electric water heaters. This subsidiary
contributed $289,000 to the company's earnings for the year ended December
31, 1993. Prior to January 1, 1993, the rental electric water heater
program was part of the company's core electric business and reported as
non-operating income.
On October 1, 1993, SmartEnergy purchased for $1.2 million, 304,125
shares (5%) of Green Technologies, Inc. common stock. Green Technologies,
Inc. of Boulder, Colorado, currently manufactures Green Plug electricity
savers for several types of household appliances. SmartEnergy uses the
cost method of accounting for its investment in Green Technologies, Inc.
Note 4
Redeemable preferred stock
Commencing in 1998 the 8.30% Dividend Series Preferred Stock is
redeemable at par through a mandatory sinking fund in the amount of $1.0
million per annum, and at its option, the company may redeem at par an
additional non-cumulative $1.0 million per annum.
Note 5
Long-term debt and sinking fund requirements
Based on issues outstanding at December 31, 1993, the aggregate amount
of long-term debt maturities and sinking fund requirements (exclusive of
the amount that may be satisfied by property additions) are approximately
$4.9 million, $4.2 million, $1.0 million, $3.0 million and $20.5 million
for the years 1994 through 1998, respectively. Substantially all property
and plant is subject to liens under the First Mortgage Bonds.
Note 6
Financial instruments
The fair value of the company's redeemable preferred stock and
long-term debt is estimated based on the quoted market prices for the same
or similar issues or on the current rates offered to the company for debt
of the same remaining maturation.
<PAGE>
The estimated fair values of the company's financial instruments at
December 31, 1993 are as follows (dollars in thousands):
Carrying Fair
Amount Value
Redeemable preferred stock $20,000 $22,834
Long-term debt $127,269 $137,242
Anticipated regulatory treatment of the excess of the fair value over
the carrying value of the company's redeemable preferred stock and
long-term debt, if they were settled at amounts approximating those above,
would result in an increase in the company's rates over a prescribed
amortization period. Accordingly, any settlement would not result in a
material impact on the company's financial position or results of
operations.
Note 7
Short-term debt
Utility
The company uses committed lines of credit and uncommitted loan
facilities to finance its construction program, on a short-term basis, and
for other corporate purposes. As of December 31, 1993, the company had
$19.5 million of committed lines of credit and $25 million of uncommitted
loan facilities which are normally renewed upon expiration and require
annual fees ranging from zero to .25% of an individual line. Borrowings
under these short-term debt arrangements are at interest rates ranging from
less than prime to the prime rate. The company had $1.4 million and
$2.1 million of outstanding short-term debt at December 31, 1993 and 1992,
respectively, at average interest rates of 3.61% for 1993 and 4.30% for
1992.
Non-Utility
In October 1993, Catamount established an Irrevocable Standby Letter
of Credit with a bank to borrow up to an aggregate amount of $2.3 million
to replace its share of cash in the Appomattox Cogeneration's Project Debt
Service Reserve Fund. This Letter of Credit is for a one-year term with
annual extensions available. At December 31, 1993, there were no
borrowings outstanding under this Letter of Credit. Catamount believes it
will not have to perform under this agreement because the likelihood of
default by the primary party is remote.
In November 1993, Catamount established an unsecured line of credit
with a bank to borrow up to $.5 million in support of short-term working
capital requirements. This line of credit matures March 1, 1994. At
December 31, 1993 there were no borrowings outstanding under this line of
credit.
In September 1993, SmartEnergy established a $1.0 million revolving
line of credit with a bank to provide working capital and financing
assistance for investment purposes. This line of credit expires in one
year. SmartEnergy had $696,000 of outstanding short-term debt at
December 31, 1993 at average interest rate of 6.08%.
Financial obligations of the non-utility wholly owned subsidiaries are
non-recourse to the company.
<PAGE>
Note 8
Accounts receivable
In 1988 the company entered into an agreement to sell up to
$20 million of certain accounts receivable and unbilled revenues. At
December 31, 1993 and 1992, a total of $12 million of accounts receivable
and unbilled revenues were sold under an accounts receivable facility. A
portion of the fee for using the facility is based on London Inter Bank
Offered Rate (LIBOR). In order to stabilize this portion of its
obligation, the company executed a swap transaction which sets the LIBOR
based fee at 3.985% for the period September 29, 1992 to September 29,
1994.
Accounts receivable and unbilled revenues that have been sold were
transferred with limited recourse. A pool of assets, varying between 3% to
5% of the accounts receivable and unbilled revenues sold, are set aside for
this potential recourse liability. Accounts receivable and unbilled
revenues are reflected net of sales of $4.7 million and $7.3 million,
respectively, at December 31, 1993 and $5.2 million and $6.8 million,
respectively, at December 31, 1992.
Accounts receivable are also reflected net of an allowance for
uncollectible accounts of $.9 million and $1.1 million at December 31, 1993
and 1992, respectively.
Note 9
Pension and postretirement benefits
The company has a non-contributory trusteed pension plan covering all
employees (union and non-union). Under the terms of the pension plan,
employees are generally eligible for monthly benefit payments upon reaching
the age of 65 with a minimum of five years of service. The company's
funding policy is to contribute, at least, the statutory minimum to a
trust. The company is not required by its union contract to contribute to
multi-employer plans.
The projected unit credit actuarial cost method was used to compute
net pension costs and the accumulated and projected benefit obligations.
The increase in the accumulated benefit obligation and projected benefit
obligation for 1993 results primarily from changes in plan asumptions. The
following table sets forth the funded status of the pension plan and
amounts recognized in the company's balance sheet and statement of income
(dollars in thousands):
<TABLE>
<CAPTION>
December 31
1993 1992 1991
<S> <C> <C> <C>
Funded status of the plan
Vested benefit obligation $35,837 $27,899 $23,377
Non-vested benefit obligation 493 439 283
Accumulated benefit obligation $36,330 $28,338 $23,660
Projected benefit obligation $49,743 $39,001 $34,101
Market value of plan assets (primarily equity and fixed
income securities) 46,074 39,768 37,214
Projected benefit obligation more (less) than market value
of plan assets 3,669 (767) (3,113)
Unrecognized net transition assets 1,768 1,929 2,090
<PAGE>
Unrecognized prior service costs (3,568) (3,084) (1,527)
Unrecognized net gain 1,498 5,314 4,817
Net pension liability included in other current
liabilities $ 3,367 $ 3,392 $ 2,267
Net pension costs include the following components
Service cost $ 1,491 $ 1,307 $ 1,112
Interest cost 3,377 3,065 2,705
Actual return on plan assets (6,800) (4,137) (7,640)
Net amortization and deferral 3,391 890 4,683
Pension costs 1,459 1,125 860
Less amount allocated to other accounts 276 223 164
Net pension costs expensed $ 1,183 $ 902 $ 696
</TABLE>
Assumptions used in calculating pension cost were as follows:
December 31
1993 1992 1991
Weighted average discount rates 7.25% 8.50% 8.75%
Expected long-term return on assets 9.75% 10.25% 10.25%
Rate of increase in future compensation
levels 4.75% 5.50% 6.02%
The company sponsors an unfunded defined benefit postretirement
medical plan that covers all employees.
Effective January 1, 1993, the company adopted, on a prospective
basis, Statement of Financial Accounting Standards (SFAS) No. 106,
Employer's Accounting for Postretirement Benefits Other Than Pensions
(OPEB) which requires accrual of the expected costs of such benefits during
the employees' years of service.
The following table sets forth, as of January 1, 1994, the plan's
funded status and amounts recognized in the company's Balance Sheet and the
amount of expense charged to the company's Statement of Income in 1993 in
accordance with SFAS No. 106 (dollars in thousands):
Accumulated postretirement benefit obligation
Retirees $(5,098)
Fully eligible active plan participants (1,207)
Other active plan participants (1,293)
Plan assets at fair value -
Accumulated postretirement benefit obligation
in excess of plan assets (7,598)
Unrecognized transition obligation 6,253
Unrecognized net loss 351
Accrued postretirement benefit cost $ (994)
_______
Net postretirement benefit cost for 1993 includes the
following components
Service cost $ 168
Interest cost 588
Amortization of transition obligation over
a twenty-year period 329
Postretirement benefit cost 1,085
Less amount allocated to other accounts 205
Net postretirement benefit cost expensed $ 880
_______
<PAGE>
A 9.5% pre-65 and 6.0% post-65 annual rate of increase in the per
capita costs of covered health care benefits was assumed for 1993,
decreasing to 5.5% and 4.5%, respectively, for the year 1997 and
thereafter. This decrease results from changes to the retiree medical plan
limiting the cost for employees retiring after 1995 to the 1995 per
participant cost. Increasing the assumed health care cost trend rates by
one percentage point in each year would have resulted in an increase in the
accumulated postretirement benefit obligation as of January 1, 1994, of
$491,000 and an increase in the aggregate of the service cost and interest
cost components of net periodic postretirement benefit cost for 1993 of
$42,000. A weighted average discount rate of 7.25% was used to determine
the accumulated postretirement benefit obligation. Prior to 1993, the
company expensed OPEB's costs as benefits were paid. Such costs totaled
$537,000 and $546,000 for 1991 and 1992, respectively.
In November 1992, the FASB issued SFAS No. 112, Employers' Accounting
for Postemployment Benefits, effective in 1994. SFAS No. 112 requires
accrual of the expected cost of postemployment benefits provided to former
or inactive employees, their beneficiaries, and covered dependents after
employment but before retirement. The company currently provides
postemployment benefits, consisting of long-term disability benefits and
expenses these costs as benefits are paid, which is consistent with current
rate-making practices. Such costs total $94,000, $91,000 and $156,000 for
1991 through 1993, respectively. The company will adopt SFAS No. 112
effective January 1, 1994. Management has evaluated the financial impact
of the new standard, and based on preliminary results, the accumulated
postemployment benefit obligation at January 1, 1994, is estimated to be
approximately $1.2 million and the postemployment benefit cost to be
charged to expense in 1994 will be approximately $177,000 (pre-tax).
In connection with the company's cost-cutting plan, in the first
quarter of 1994, the company offered a Voluntary Retirement Program (VRP)
to 80 eligible employees. Eligible employees have until March 15, 1994, to
participate in the VRP. If all 80 employees participated in the VRP, the
company's 1994 benefit obligation would be approximately $8.8 million.
This amount consists of pension benefits and postretirement medical
benefits of $4.3 million and $4.5 million, respectively. However, the
company does not anticipate all eligible employees to participate.
Additionally, the company offered a Voluntary Severance Program (VSP) to
certain employees. The benefits consist of severance pay and limited-term
medical coverage. At this time, the company cannot predict how many
employees will participate in the VSP or its ultimate cost. Employees that
wish to participate in the VSP have from March 7, 1994 until April 22, 1994
to apply. For rate-making purposes, the company anticipates receiving an
order in the first quarter of 1994 from the PSB requiring the company to
defer these costs and amortize them over a five-year period. The timing
and recoverability of these costs will be determined in the company's
current rate proceedings.
Note 10
Income taxes
The components of Federal and state income tax expense are as follows
(dollars in thousands):
<PAGE>
Year Ended December 31
1993 1992 1991
Federal:
Current $ 2,751 $ 7,774 $ 8,039
Deferred 7,893 2,042 (914)
Investment tax credits, net (391) (391) (708)
10,253 9,425 6,417
State:
Current 406 1,987 37
Deferred 2,113 1,001 (233)
2,519 2,988 (196)
Total Federal and state income taxes $12,772 $12,413 $ 6,221
Federal and state income taxes charged
(credited) to:
Operating expenses $12,496 $12,102 $ 5,820
Other income 276 311 401
$12,772 $12,413 $ 6,221
The principal components which resulted in deferred income tax expense
for 1992 were additional depreciation for tax purposes $3.9 million offset
by contributions in aid of construction $.9 million. The 1991 principal
components were additional depreciation for tax purposes $3.9 million
offset by deferred revenues $2.9 million, contributions in aid of
construction $1.2 million and deferred power costs $.7 million.
The principal items that comprise the difference between the total
income tax expense and the amount calculated by applying the statutory
Federal income tax rate to income before tax are as follows (dollars in
thousands):
Year Ended December 31
1993 1992 1991
Income before income tax $34,064 $33,835 $24,797
Federal statutory rate 35% 34% 34%
Federal statutory tax expense $11,922 $11,504 $ 8,431
Increases (reductions) in taxes resulting
from:
Dividend received deduction (995) (353) (1,175)
Deferred taxes on plant previously
"flowed-through" 523 523 523
State income taxes net of Federal tax
benefit 1,637 1,707 1,167
Investment credit amortization (391) (391) (485)
Seabrook project 139 70 11
Book-to-return adjustments and other (63) (647) (2,251)
Total income tax expense provided $12,772 $12,413 $ 6,221
The tax effects of temporary differences and tax carry forward that
give rise to significant portions of the deferred tax assets and deferred
tax liabilities at December 31, 1993 are presented below (dollars in
thousands):
<PAGE>
Deferred tax assets
Alternative minimum tax credit carry
forward $ 1,400
Non-deductible accruals and other 4,186
Deferred compensation and pension 4,058
Environmental costs accrual 2,142
Total deferred tax assets $11,786
Deferred tax liabilities
Property, plant and equipment $38,304
Net regulatory asset 13,806
Conservation and load management
expenditures 5,123
Nuclear refueling costs 2,633
Other 3,948
Total deferred tax liabilities 63,814
Net deferred tax liability $52,028
_______
As discussed in Note 1, the company adopted SFAS No. 109 as of January
1, 1993. As a result of adopting SFAS No. 109, the company recognized
additional net accumulated deferred income tax liabilities of approximately
$15 million and a net corresponding regulatory asset from customers of
approximately $15 million for future revenues that will be received when
the temporary differences reverse and are settled in rates. A valuation
allowance has not been recorded at December 31, 1993, as the company
expects that all deferred income tax assets will be utilized in the future.
On August 10, 1993, the Revenue Reconciliation Act of 1993 was passed
which, among other things, increased the maximum corporate income tax rate
from 34% to 35% on taxable income in excess of $10 million. The increase
was effective January 1, 1993 and resulted in additional income tax expense
of approximately $285,000 for 1993.
The company has an alternative minimum tax credit carry forward of
$1.4 million which is available to reduce future regular income taxes over
an indefinite period.
Note 11
Commitments and contingencies
The company's power supply is acquired from a variety of sources
including its own generating units, jointly owned units, long-term
contracts and short-term purchases from a variety of sources. Through its
investments in four nuclear generating companies, the company is entitled
to receive power from those nuclear units. See Note 2 for a discussion of
the company's obligations related to its investment in nuclear generating
companies.
Under long-term contracts with various electric utilities in the
region, the company is purchasing certain percentages of the electrical
output of production plants constructed and financed by those utilities.
Such contracts obligate the company to pay certain minimum annual amounts
representing the company's proportionate share of fixed costs, including
debt service requirements (amounts necessary to retire the principal of and
to pay the interest on the portion of the related long-term debt ascribed
to the company) whether or not the production plants are operating. The
cost of power obtained under such long-term contracts, including payments
required to be made when a production plant is not operating, is reflected
as "Purchased power" in the Consolidated Statement of Income.
The company purchases power from a coal-fired generating plant owned
by N.U. under a thirty-year contract which expires April 30, 1998. Under
<PAGE>
this contract the company is obligated to make capacity payments which
amounted to approximately $3.6 million, $3.7 million and $3.8 million for
1991 through 1993, respectively. These capacity payments will vary over
the contract period due to factors such as changes in N.U.'s net investment
and allowed rate of return.
Under various contracts, the company purchases from Hydro-Quebec
capacity and associated energy. Under the terms of these contracts, the
company is required to pay certain fixed capacity costs whether or not
energy purchases above a minimum level described in the contracts are made.
Such minimum energy purchases must be made whether or not other less
expensive energy sources might be available.
The state of Vermont contract, between the company and the Vermont
Department of Public Service, terminates on September 22, 1995. The
company receives 69 MW of firm capacity and associated energy delivered at
the Highgate interconnection.
The company's portion of the 1987 Hydro-Quebec contract consists of:
Schedule A, 25 MW of firm capacity and associated energy to be delivered at
the Highgate interconnection through September 22, 1995. All of this power
is being sold back to Hydro-Quebec for the duration of the contract. This
sell-back of 25 MW continues as Schedule C-1 power at the termination of
the Schedule A contract. This sell-back contract is not cancelable.
Schedule C-1, 31 MW and Schedule C-2, 21 MW of firm capacity and associated
energy are to be delivered at the NEPOOL/Hydro-Quebec (Phase I and Phase
II) interconnection through October 2012. Under a cancelable contract, the
company is selling back to Hydro-Quebec 30 MW and 20 MW of its C-1 and C-2
entitlements, respectively, for the period ending October 31, 1996. Under
the terms of this agreement, the company can exercise an option, on an
annual basis, to cancel all or any portion of this sell-back and resume
deliveries of this power under the appropriate C-1 and C-2 schedules.
Further agreements allow for the interruption of the sell-back, and the
provision of 50 MW of capacity and delivery of associated energy for the
period March through October of a given year. The company must return this
energy by the month of March of the following year or pay Hydro-Quebec 150%
of the Schedule C-1 and C-2 energy price. Hydro-Quebec has the option
under this sell-back agreement to buy back 50 MW for the period November 1,
1996 through October 31, 2000. This option must be exercised no later than
October 31, 1994. These sell-back agreements provide the company with the
necessary flexibility to minimize near-term costs while retaining the
long-term benefits of the purchase contracts. Schedule B, 92 MW of firm
capacity and associated energy is expected to be delivered at the Highgate
interconnection for 20 years beginning September 23, 1995. The company
will sell back 25 MW of Schedule B entitlement for the period September 23
through October 31, 1995. Schedule C-4a, 24 MW of firm capacity and
associated energy is expected to be delivered over the NEPOOL/Hydro-Quebec
(Phase I and Phase II) interconnection beginning November 1, 1996 through
October 31, 2012.
Joint-ownership The company's ownership interests in jointly owned
generating and transmission facilities are set forth in the table that
follows and recorded in the company's Consolidated Balance Sheet (dollars
in thousands):
<PAGE>
MW December 31
Ownership Entitlement 1993 1992
Generating plants:
Wyman #4 1.78% 11 $ 3,322 $ 3,315
Joseph C. McNeil 20.00% 11 14,821 14,821
Millstone #3 1.73% 20 75,071 75,270
Highgate transmission facility 46.08% 12,586 12,577
105,800 105,983
Accumulated depreciation 22,535 20,127
$ 83,265 $ 85,856
Wyman #4, an oil-fired generating plant, commenced commercial
operation in December 1978. The Joseph C. McNeil wood, gas and oil-fired
generating plant commenced commercial operation in June 1984 and the
Millstone #3, a nuclear generating unit, commenced commercial operation in
April 1986. The Highgate transmission interconnection with Canada was
placed in service in September 1985. The company's share of operating
expenses for these facilities is included in the corresponding operating
accounts on the Consolidated Statement of Income. Each participant in
these facilities must provide for its own financing.
Environmental The company believes it operates in compliance in all
material respects with all laws, regulations, orders and decrees respecting
environmental control to the extent currently applicable to and effective
against it. Furthermore, it is the company's policy to comply, in all
material respects, with such laws, regulations, orders and decrees,
including any variances granted thereunder.
The company's operations and activities are subject to inspection and
supervision by both state and Federal regulatory authorities including the
United States Environmental Protection Agency (EPA). The company is not
subject to any material fines for violation of any environmental laws or
other matters which are the subject of regulatory inspection or oversight,
nor is the company a responsible party in any pending or threatened
proceeding instituted by the EPA under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (Superfund).
The company is engaged in processes and activities to continually
assess and assure its compliance with environmental laws, regulations,
orders and decrees. Based on the results of these processes and activities
to date, the company is not aware of any instances where it has caused or
permitted a release of a hazardous substance through its operations on or
about the properties owned, operated and otherwise used by the company
which will likely result in any material environmental liabilities to the
company. To the extent that the company has knowledge of releases of small
quantities of fuel oil or other substances which have resulted from its
operations, the company believes that these releases can be remedied
without material adverse effect on its financial condition or the results
of its operation.
The company is an amalgamation of more than 100 predecessor companies
which were engaged in various operations and activities prior to their
being incorporated into the company. At least three of these companies
were involved in the production of gas from coal for sale and distribution
to customers at retail. These activities were halted by the company in the
late 1940's or early 1950's. The company is continually investigating,
assessing and monitoring the status of potential contaminated sites related
to these and other operations of the company and its predecessors. The
company's policy is to record a liability for remediation, monitoring and
<PAGE>
other related costs when it determines that such a liability is probable
and estimable. Coal tar deposits have been discovered at the company's
Cleveland Avenue property located in the City of Rutland, a site at which
one of its predecessors operated a coal-gasification facility. Due to the
presence of these deposits and the uncertainties as to potential
contamination and migration off-site, the company conducted studies to
determine the magnitude and extent of the coal tar releases. Based on the
results of this initial work, the company engaged a consultant to assist in
evaluating clean-up methodologies and estimate the cost to clean up the
site. These studies presently indicate that the cost to remediate this
site will be approximately $5 million. This amount was charged to expense
in the fourth quarter of 1992. The company has yet to determine whether
insurance proceeds are available to offset this expense.
The company has been contacted by the owners and potentially
responsible parties (together the PRPs) of two former municipal landfills
located in Vermont concerning the company's alleged prior use of those
facilities for the disposal of waste materials. The PRPs allege that the
company may be liable for costs in connection with the response,
investigation and clean-up of these facilities pursuant to the applicable
state and Federal law. At this time, the company has no information which
would indicate that it is liable in connection with the remediation efforts
ongoing at either site. Further investigation of the company's potential
liability for these facilities is presently being conducted.
The company is not subject to any pending or threatened litigation
with respect to any other sites nor has the EPA or other state or Federal
agency sought contribution from the company for their study or remediation.
Dividend restrictions The indentures relating to long-term debt and the
Articles of Association contain certain restrictions on the payment of cash
dividends on capital stock. Under the most restrictive of such provisions,
approximately $50 million of retained earnings was not subject to dividend
restriction at December 31, 1993.
Leases and support agreements The company participated with other electric
utilities in the construction of the Phase I Hydro-Quebec transmission
facilities in northeastern Vermont, which were completed at a total cost of
approximately $140 million. Under a support agreement relating to the
company's participation in the facilities, the company is obligated to pay
its 4.42% share of Phase I Hydro-Quebec capital costs over a 20-year
recovery period through and including 2006. The company also participated
in the construction of Phase II Hydro-Quebec transmission facilities
constructed throughout New England, which were placed in service in
November 1990 with a total cost of approximately $487 million. Under a
similar support agreement, the company is obligated to pay its 5.132% share
of Phase II Hydro-Quebec capital costs over a 25-year recovery period
through and including 2015. All costs under these support agreements are
recorded as purchased transmission expense in accordance with the company's
rate-making policies. Future minimum payments will be approximately
$3.2 million for each year from 1994 through 2015 and will decline
thereafter. The company's percentage shares of the net capital cost of
these facilities, totaling approximately, $22.6 million, are classified in
the accompanying Consolidated Balance Sheet as "Utility Plant" and
"Long-term Lease Arrangements" (current and non-current).
Minimum rental commitments of the company under non-cancelable leases
as of December 31, 1993, are not material. Total rental expense entering
into the determination of net income, consisting principally of vehicle and
equipment rentals, was approximately $2.6 million, $3.0 million and
$3.1 million for the years 1991 through 1993, respectively.
<PAGE>
As discussed in Notes 1 and 10 to the consolidated financial
statements, effective January 1, 1993, the company changed its method of
accounting for income taxes.
ARTHUR ANDERSEN & CO.
Boston, Massachusetts
February 7, 1994
<PAGE>
Exhibit 21-1
List of Subsidiaries of Registrant
State in which
Incorporated
Connecticut Valley Electric
Company Inc. (a)(F1) New Hampshire
Vermont Electric Power
Company, Inc. (b)(F2) Vermont
Central Vermont Public Service
Corporation - Bradford
Hydroelectric, Inc. (a)(F1) Vermont
Central Vermont Public Service
Corporation - East Barnet
Hydroelectric, Inc. (a)(F1) Vermont
CV Energy Resources, Inc. (a)(F1) Vermont
Catamount Rumford, Inc. (a)(F1) Vermont
Equinox Vermont Corporation (a)(F1) Vermont
Appomattox Vermont Corporation (a)(F1) Vermont
Catamount Energy Corporation (a)(F1) Vermont
Catamount Williams Lake, Ltd. (a)(F1) Vermont
SmartEnergy Services, Inc. (a)(F1) Vermont
- ---------------------------------------------------
(FN)
(F1) (a) Included in consolidated financial statements
(F2) (b) Separate financial statements do not need to be filed under
Regulation S-X, Rule 1-02(v) defining a "significant
subsidiary", and Rule 3-09, which sets forth the
requirement for filing separate financial statements
of subsidiaries not consolidated.<PAGE>
