Form U -13 - 60
Mutual and Subsidiary Service Companies
ANNUAL REPORT
FOR THE PERIOD
Beginning January 1, 1997 and Ending December 31, 1997
TO THE
U. S. SECURITIES AND EXCHANGE COMMISSION
OF
NORTHEAST NUCLEAR ENERGY COMPANY
A Subsidiary Service Company
Date of Incorporation - November 14, 1950
State of Sovereign Power under which Incorporated or
Organized - Connecticut
Location of Principal Executive Offices of Reporting
Company - Selden Street, Berlin, CT 06037
Name, title, and address of officer to whom correspondence
concerning this report should be addressed:
John J. Roman, Vice President and Controller,
P.O. Box 270, Hartford, CT 06141-0270
Name of Principal Holding Company Whose Subsidiaries
are served by Reporting Company
NORTHEAST UTILITIES
INSTRUCTIONS FOR USE ON FORM U-13-60
1. TIME OF FILING
Rule 94 provides that on or before the first day of May in each calendar
year, each mutual service company and each subsidiary service company as to
which the Commission shall have made a favorable finding pursuant to Rule 88,
and every service company whose application for approval or declaration
pursuant to Rule 88 is pending shall file with the Commission an annual
report on Form U-13-60 and in accordance with the instructions for that form.
2. NUMBER OF COPIES
Each annual report shall be filed in duplicate. The company should prepare
and retain at least one extra copy for itself in case correspondence with
reference to the report becomes necessary.
3. PERIOD COVERED BY REPORT
The first report filed by any company shall cover the period from the date
the Uniform System of Accounts was required to be made effective as to that
company under Rules 82 and 93 to the end of that calendar year. Subsequent
reports should cover a calendar year.
4. REPORT FORMAT
Reports shall be submitted on the forms prepared by the Commission. If the
space provided on any sheet of such form is inadequate, additional sheets may
be inserted of the same size as a sheet of the form or folded to such size.
5. MONEY AMOUNTS DISPLAYED
All money amounts required to be shown in financial statements may be
expressed in whole dollars, in thousands of dollars or in hundred thousands
of dollars, as appropriate, and subject to provisions of Regulation S-X
(Section 210.3-0.1(b)).
6. DEFICITS DISPLAYED
Deficits and other like entries shall be indicated by the use of either
brackets or a parenthesis with corresponding reference in footnotes.
(Regulation S-X, (Section 210.3-0.1(c)).
7. MAJOR AMENDMENTS OR CORRECTIONS
Any company desiring to amend or correct a major omission or error in a
report after it has been filed with the Commission shall submit an amended
report including only those pages, schedules, and entries that are to be
amended or corrected. A cover letter shall be submitted requesting the
Commission to incorporate the amended report changes and shall be signed by a
duly authorized officer of the company.
8. DEFINITIONS
Definitions contained in Instruction 01-8 to the Uniform System of Accounts
for Mutual Service Companies and Subsidiary Service Companies, Public Utility
Holding Company Act of 1935, as amended February 2, 1979 shall be applicable
to words or terms used specifically within this Form U-13-60.
9. ORGANIZATION CHART
The service company shall submit with each annual report a copy of its
current organization chart.
10. METHODS OF ALLOCATION
The service company shall submit with each annual report a listing of the
currently effective methods of allocation being used by the service company
and on file with the Securities and Exchange Commission pursuant to the
Public Utility Holding Company Act of 1935.
11. ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
The service company shall submit with each annual report a copy of the annual
statement supplied to each associate company in support of the amount of
compensation for use in capital billed during the calendar year.
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS
---------------------------------------------
Schedule or Page
Description of Schedules and Accounts Acct. No. No.
- ------------------------------------- ------------------- -----
COMPARATIVE BALANCE SHEET Schedule I 4-5
SERVICE COMPANY PROPERTY Schedule II 6-7
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY Schedule III 8
INVESTMENTS Schedule IV 9
ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES Schedule V 10
FUEL STOCK EXPENSES UNDISTRIBUTED Schedule VI 11
STORES EXPENSE UNDISTRIBUTED Schedule VII 12
MISCELLANEOUS CURRENT AND ACCRUED ASSETS Schedule VIII 13
MISCELLANEOUS DEFERRED DEBITS Schedule IX 14
RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES Schedule X 15
PROPRIETARY CAPITAL Schedule XI 16
LONG-TERM DEBT Schedule XII 17
CURRENT AND ACCRUED LIABILTIES Schedule XIII 18
NOTES TO FINANCIAL STATEMENTS Schedule XIV 19
COMPARATIVE INCOME STATEMENT Schedule XV 20
ANALYSIS OF BILLING - ASSOCIATE COMPANIES Account 457 21
ANALYSIS OF BILLING - NONASSOCIATE COMPANIES Account 458 22
ANALYSIS OF CHARGES FOR SERVICE - ASSOCIATE
AND NONASSOCIATE COMPANIES Schedule XVI 23
SCHEDULE OF EXPENSE BY DEPARTMENT OR SERVICE
FUNCTION Schedule XVII 24-25
DEPARTMENTAL ANALYSIS OF SALARIES 26
OUTSIDE SERVICES EMPLOYED 27
EMPLOYEE PENSIONS AND BENEFITS Account 926 28
GENERAL ADVERTISING EXPENSES Account 930.1 29
MISCELLANEOUS GENERAL EXPENSES Account 930.2 30
RENTS 31
TAXES OTHER THAN INCOME TAXES Account 408 32
DONATIONS Account 426.1 33
OTHER DEDUCTIONS Account 426.5 34
NOTES TO STATEMENT OF INCOME Schedule XVIII 35
LISTING OF INSTRUCTIONAL FILING REQUIREMENTS
--------------------------------------------
Page
Description of Reports or Statements No.
- ------------------------------------ -----
ORGANIZATION CHART 36
METHODS OF ALLOCATION 37
ANNUAL STATEMENT OF COMPENSATION FOR
USE OF CAPITAL BILLED 38
SIGNATURE PAGE 39
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
SCHEDULE I - COMPARATIVE BALANCE SHEET
Give balance sheet of the Company as of December 31 of the current and prior year.
------- --------------------------------------------------------- ------------ ---------
ACCOUNT ASSETS AND OTHER DEBITS AS OF DECEMBER 31
------- --------------------------------------------------------- ------------ ---------
1997 1996
SERVICE COMPANY PROPERTY (Thousands of Dollars)
------------------------
<S> <C> <C>
101 Service company property (Schedule II) $ 39,152 $ 38,117
107 Construction work in progress (Schedule II) 2,634 1,556
---------- ---------
Total Property 41,786 39,673
---------- ---------
108 Less accumulated provision for depreciation and
amortization of service company property (Schedule III) 12,867 11,202
---------- ---------
Net Service Company Property 28,919 28,471
---------- ---------
INVESTMENTS
-----------
123 Investments in associate companies (Schedule IV) - -
124 Other investments (Schedule IV) - -
---------- ---------
Total Investments - -
---------- ---------
CURRENT AND ACCRUED ASSETS
--------------------------
131 Cash - -
134 Special deposits - -
135 Working funds 2 2
136 Temporary cash investments (Schedule IV) - -
141 Notes receivable 2 -
143 Accounts receivable 5,255 9,694
144 Accumulated provision of uncollectible accounts - -
146 Accounts receivable from associate companies (Schedule V) 152,978 111,590
152 Fuel stock expenses undistributed (Schedule VI) - -
154 Materials and supplies 65,829 61,117
163 Stores expense undistributed (Schedule VII) 310 18
165 Prepayments 3,612 5,557
174 Miscellaneous current and accrued assets (Schedule VIII) - -
---------- ---------
Total Current and Accrued Assets 227,988 187,978
---------- ---------
DEFERRED DEBITS
---------------
181 Unamortized debt expense 125 152
184 Clearing accounts 377 608
186 Miscellaneous deferred debits (Schedule IX) 15,231 5,756
188 Research, development, or demonstration
expenditures (Schedule X) - -
189 Unamortized loss on reacquired debt 263 -
190 Accumulated deferred income taxes 20,376 15,197
---------- ---------
Total Deferred Debits 36,372 21,713
---------- ---------
TOTAL ASSETS AND OTHER DEBITS $ 293,279 $ 238,162
========== =========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
SCHEDULE I - COMPARATIVE BALANCE SHEET
Give balance sheet of the Company as of December 31 of the current and prior year.
------- --------------------------------------------------------- ------------ ---------
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31
------- --------------------------------------------------------- ------------ ---------
1997 1996
PROPRIETARY CAPITAL (Thousands of Dollars)
-------------------
<S> <C> <C>
201 Common stock issued (Schedule XI) $ 15 $ 15
211 Miscellaneous paid-in-capital (Schedule XI) 15,350 15,350
215 Appropriated retained earnings (Schedule XI) - -
216 Unappropriated retained earnings (Schedule XI) 864 867
---------- ---------
Total Proprietary Capital 16,229 16,232
---------- ---------
LONG-TERM DEBT
--------------
223 Advances from associate companies (Schedule XII) - -
224 Other long-term debt (Schedule XII) 18,033 24,182
225 Unamortized premium on long-term debt - -
226 Unamortized discount on long-term debt-debit - -
---------- ---------
Total Long-Term Debt 18,033 24,182
---------- ---------
CURRENT AND ACCRUED LIABILITIES
-------------------------------
231 Notes payable - -
232 Accounts payable 116,130 71,954
233 Notes payable to associate companies (Schedule XIII) - -
234 Accounts payable to associate companies (Schedule XIII) 22,716 18,784
236 Taxes accrued 13,742 7,257
237 Interest accrued - -
238 Dividends declared - 500
241 Tax collections payable 921 672
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 87,097 81,745
---------- ---------
Total Current and Accrued Liabilities 240,606 180,912
---------- ---------
DEFERRED CREDITS
----------------
253 Other deferred credits 17,235 15,595
255 Accumulated deferred investment tax credits 1,176 1,241
---------- ---------
Total Deferred Credits 18,411 16,836
---------- ---------
282 ACCUMULATED DEFERRED INCOME TAXES - -
--------------------------------- ---------- ---------
TOTAL LIABILITES AND PROPRIETARY CAPITAL $ 293,279 $ 238,162
========== =========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE II - SERVICE COMPANY PROPERTY
- -------------------------------------------------------------------------------------------
BALANCE AT RETIREMENTS BALANCE
BEGINNING OR OTHER AT CLOSE
DESCRIPTION OF YEAR ADDITIONS SALES CHANGES(1) OF YEAR
- -------------------------------------------------------------------------------------------
(Thousands of Dollars)
SERVICE COMPANY PROPERTY
- ------------------------
Account
- -------
<S> <C> <C> <C> <C> <C>
301 ORGANIZATION
303 MISCELLANEOUS INTANGIBLE PLANT
304 LAND AND LAND RIGHTS
305 STRUCTURES AND IMPROVEMENTS
306 LEASEHOLD IMPROVEMENTS
307 EQUIPMENT (2)
308 OFFICE FURNITURE AND EQUIPMENT
309 AUTOMOBILES, OTHER VEHICLES
AND RELATED GARAGE EQUIPMENT
310 AIRCRAFT AND AIRPORT EQUIPMENT
311 OTHER SERVICE COMPANY
PROPERTY (3)
321 STRUCTURES AND IMPROVEMENTS $32,866 $416 $33,282
322 REACTOR PLANT EQUIPMENT
324 ACCESSORY ELECTRIC EQUIPMENT 27 27
325 MISCELLANEOUS POWER PLANT
EQUIPMENT 4,045 530 4,575
391 OFFICE FURNITURE AND EQUIPMENT 1,179 89 1,268
---------- --------- ----------- ---------- ----------
SUB-TOTAL 38,117 1,035 39,152
---------- --------- ----------- ---------- ----------
107 CONSTRUCTION WORK IN
PROGRESS (4) 1,556 1,078 2,634
---------- --------- ----------- ---------- ----------
TOTAL $39,673 $2,113 $0 $0 $41,786
========== ========= =========== ========== ==========
- -------------------------------------------------------------------------------------------
(1) PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
NONE
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE II - CONTINUED
-----------------------
(2) SUBACCOUNTS ARE REQUIRED FOR EACH CLASS OF EQUIPMENT OWNED. THE SERVICE COMPANY
SHALL PROVIDE A LISTING BY SUBACCOUNT OF EQUIPMENT ADDITIONS DURING THE YEAR AND
THE BALANCE AT THE CLOSE OF THE YEAR:
- -------------------------------------------------------------------------------------------
BALANCE
AT CLOSE
SUBACCOUNT DESCRIPTION ADDITIONS OF YEAR
- -------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
NONE
- -------------------------------------------------------------------------------------------
(3) DESCRIBE OTHER SERVICE COMPANY PROPERTY:
- -------------------------------------------------------------------------------------------
(4) DESCRIBE CONSTRUCTION WORK IN PROGRESS:
This account includes simulator upgrade, tools and general plant items.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY
------------------------------------------
- -------------------------------------------------------------------------------------------
ADDITIONS OTHER
BALANCE AT CHARGED CHANGES BALANCE
BEGINNING TO ADD AT CLOSE
DESCRIPTION OF YEAR ACCT 403 RETIREMENTS (DEDUCT)1/ OF YEAR
- -------------------------------------------------------------------------------------------
(Thousands of Dollars)
Account
- -------
<S> <C> <C> <C> <C> <C>
301 ORGANIZATION
303 MISCELLANEOUS INTANGIBLE PLANT
304 LAND AND LAND RIGHTS
305 STRUCTURES AND IMPROVEMENTS
306 LEASEHOLD IMPROVEMENTS
307 EQUIPMENT
308 OFFICE FURNITURE AND FIXTURES
309 AUTOMOBILES, OTHER VEHICLES
AND RELATED GARAGE EQUIPMENT
310 AIRCRAFT AND AIRPORT EQUIPMENT
311 OTHER SERVICE COMPANY
PROPERTY
321 STRUCTURES AND IMPROVEMENTS 7,744 1,432 2 9,178
322 REACTOR PLANT EQUIPMENT
324 ACCESSORY ELECTRIC EQUIPMENT 13 1 14
325 MISCELLANEOUS POWER PLANT
EQUIPMENT 2,728 162 40 2,930
391 OFFICE FURNITURE AND FIXTURES 717 28 0 745
---------- --------- ----------- ---------- ----------
TOTAL $11,202 $1,623 $0 $42 $12,867
========== ========= =========== ========== ==========
- -------------------------------------------------------------------------------------------
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
Depreciation charged to clearing account $40
Removal costs charged to reserve 2
----------
$42
==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE IV - INVESTMENTS
INSTRUCTIONS: Complete the following schedule concerning investments.
Under Account 124, "Other Investments," state each investment
separately, with description, including the name of issuing company,
number of shares or principal amount, etc.
Under Account 136, "Temporary Cash Investments," list each investment
separately.
- ---------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- ---------------------------------------------------------------------------------------
<S> <C> <C>
ACCOUNT 123 - INVESTMENT IN ASSOCIATE COMPANIES
NONE
ACCOUNT 124 - OTHER INVESTMENTS
NONE
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS
NONE
----------- ----------
TOTAL $- $-
=========== ==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE V - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
INSTRUCTIONS: Complete the following schedule listing accounts receivable from each
associate company. Where the service company has provided accommodation or
convenience payments for associate companies, a separate listing of total
payments for each associate company by subaccount should be provided.
- -------------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- -------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
Northeast Utilities System Money Pool $75,000 $98,600
The Connecticut Light and Power Company 28,344 43,284
Western Massachusetts Electric Company 6,686 10,144
Northeast Utilities Service Company 1,768 918
North Atlantic Energy Service Corporation - 6
Northeast Utilities - -
Public Service Company of New Hampshire (208) 26
---------- ------------
TOTAL $111,590 $152,978
========== ============
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS:
See page 10A for details.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE V - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
INSTRUCTIONS: Complete the following schedule listing accounts receivable from each
associate company. Where the service company has provided accommodation or
convenience payments for associate companies, a separate listing of total
payments for each associate company by subaccount should be provided.
- -------------------------------------------------------------------------------------------
TOTAL
DESCRIPTION PAYMENTS
- -------------------------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C>
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS:
The Connecticut Light and Power Company $306
Western Massachusetts Electric Company 46
Public Service Company of New Hampshire 3
North Atlantic Energy Service Corporation 210
Northeast Utilities Service Company 9,534
------------
TOTAL $10,099
============
Convenience payments result primarily from the following items:
Engineering Services $5,096
Nuclear Compliance 1,747
Consulting Services 969
Computer Equipment & Supplies 456
Temporary Personnel Services 1,295
Miscellaneous (197 items) 536
------------
TOTAL $10,099
============
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE VI - FUEL STOCK EXPENSES UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to fuel
stock expenses during the year and indicate amount attributable to each
associate company. Under the section headed "Summary" listed below, give
an overall report of the fuel functions performed by the service
company.
- --------------------------------------------------------------------------------------
DESCRIPTION LABOR EXPENSES TOTAL
- --------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ACCOUNT 152 - FUEL STOCK EXPENSES
UNDISTRIBUTED $ - $ - $ -
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE VII - STORES EXPENSE UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to stores
expense during the year and indicate amount attributable to each
associate company.
- -------------------------------------------------------------------------------------
DESCRIPTION LABOR EXPENSES TOTAL
- -------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ACCOUNT 163 - STORES EXPENSE
UNDISTRIBUTED
Beginning Balance as of January 1, 1997 $18
----------
Activity for the year:
Stores expense undistributed $4,923 $5,924 10,847
The above stores expenses are billed back
to each of the companies listed below:
The Connecticut Light & Power Company (3,432) (4,130) (7,562)
Western Massachusetts Electric Company (802) (965) (1,767)
Public Service Company of New Hampshire (46) (55) (101)
Nonassociate Companies (see page 22
for list of the companies) (511) (614) (1,125)
--------- ---------- ----------
Stores expense distributed (4,791) (5,764) (10,555)
--------- ---------- ----------
Net Activity for year $132 $160 292
========= ========== ----------
Ending Balance as of December 31, 1997 $310
==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE VIII
MISCELLANEOUS CURRENT AND ACCRUED ASSETS
INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000 may be
grouped, showing the number of items in each group.
- ----------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- ----------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ACCOUNT 174 - MISCELLANEOUS CURRENT AND ACCRUED ASSETS
NONE
----------- ----------
TOTAL
=========== ==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE IX
MISCELLANEOUS DEFERRED DEBITS
INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000 may be
grouped, showing the number of items in each group.
- -----------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- -----------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS
Long term receivable from Rocky River
Realty Company (associated company) $ - $6,576
Contractual retainage 800 5,175
Financial system development costs 3,090 2,270
RABBI Trust funding 952 952
Unissued non-inventory stock materials 629 -
Connecticut sales tax under protest 99 99
Employee performance payments 92 97
External audit - Millstone Unit No. 3 53 53
Other deferred debits
(9 items in 1997 and 5 items in 1996) 41 9
----------- ----------
TOTAL $5,756 $15,231
=========== ==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE X
RESEARCH, DEVELOPMENT, OR DEMONSTRATION EXPENDITURES
INSTRUCTIONS: Provide a description of each material research, development, or
demonstration project which incurred costs by the service
corporation during the year.
- ------------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- ------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
ACCOUNT 188 - RESEARCH, DEVELOPMENT OR
DEMONSTRATION EXPENDITURES
EPRI Assessment $70
EPRI Membership 30
The above expenses are billed back to each of the
associated companies listed below:
The Connecticut Light and Power Company (22)
Western Massachusetts Electric Company (5)
Public Service Company of New Hampshire (6)
Nonassociate Companies (see page 22 for list
of the companies) (67)
-------------
TOTAL $0
=============
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE XI
PROPRIETARY CAPITAL
- ------------------------------------------------------------------------------------------
NUMBER OF PAR OR STATED OUTSTANDING CLOSE OF PERIOD
ACCOUNT SHARES VALUE ---------------------------
NUMBER CLASS OF STOCK AUTHORIZED PER SHARE NO. OF SHARES TOTAL AMOUNT
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(Thousands
of Dollars)
201 COMMON STOCK ISSUED 60,000 $10.00 1,500 $15
- ------------------------------------------------------------------------------------------
INSTRUCTIONS: Classify amounts in each account with brief explanation, disclosing the
general nature of transactions which give rise to the reported amounts.
- ------------------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- ------------------------------------------------------------------------------------------
(Thousands of Dollars)
ACCOUNT 211 - MISCELLANEOUS PAID-IN-CAPITAL $15,350
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS -
---------
TOTAL $15,350
=========
- ------------------------------------------------------------------------------------------
INSTRUCTIONS: Give particulars concerning net income or (loss) during the year,
distinguishing between compensation for the use of capital owed or net loss
remaining from servicing nonassociated per the General Instructions of the
Uniform Systems of Accounts. For dividends paid during the year in cash or
otherwise, provide rate pecentage, amount of dividend, date declared and
date paid.
- ------------------------------------------------------------------------------------------
BALANCE AT NET INCOME BALANCE AT
BEGINNING OR DIVIDENDS CLOSE
DESCRIPTION OF YEAR (LOSS) PAID OF YEAR
- ------------------------------------------------------------------------------------------
(Thousands of Dollars)
ACCOUNT 216-UNAPPROPRIATED RETAINED
EARNINGS $867 $1,998 $2,001 $864
--------- --------- --------- ---------
TOTAL $867 $1,998 $2,001 $864
========= ========= ========= =========
The net income is all compensation for use of capital.
The dividends are paid as follows:
Rate Percentage Amount of
Per Share Dividend Date Declared Date Paid
---------------------- ------------ ------------- ---------
$1,334.00 $2,001,000 11/10/97 11/30/97
</TABLE>
<TABLE>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE XII
LONG-TERM DEBT
INSTRUCTIONS:Advances from associate companies should be reported separately for advances on notes,
and advances on open account. Names of associate companies from which advances were
received shall be shown under the class and series of obligation column. For Account
224 -- Other long-term debt provide the name of creditor company or organization,
terms of obligation, date of maturity, interest rate, and the amount authorized and
outstanding.
- ------------------------------------------------------------------------------------------------------
BALANCE BALANCE
TERMS OF OBLIG. DATE AT AT
CLASS & SERIES OF INTEREST AMOUNT BEGINNING DEDUCTIONS CLOSE
NAME OF CREDITOR OF OBLIGATION MATURITY RATE AUTHORIZED OF YEAR ADDITIONS (1) OF YEAR
- ------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
ACCOUNT 223-ADVANCES FROM
ASSOCIATE
COMPANIES: NONE
===============================================
ACCOUNT 224-OTHER
LONG-TERM
DEBT:
Prudential Insurance Senior
Company of America Unsecured Note 5/2000 7.67% $25,000 $24,182 $0 $6,149 $18,033
-----------------------------------------------
TOTAL OTHER LONG-TERM DEBT $25,000 $24,182 $0 $6,149 $18,033
===============================================
</TABLE>
(1) GIVE AN EXPLANATION OF DEDUCTIONS:
Principal payment. As a result of a Downgrade Event, acceleration of principal
and interest payments were made. The rate of interest is now at 7.67% per
annum. The date of maturity is now May 8, 2000.
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES
INSTRUCTIONS: Provide balance of notes and accounts payable to each associate company.
Give description and amount of miscellaneous current and accrued
liabilities. Items less than $10,000 may be grouped, showing the number of
items in each group.
- ------------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- ------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE COMPANIES
----------- ----------
TOTAL $ - $ -
=========== ==========
- ------------------------------------------------------------------------------------------
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES
The Connecticut Light and Power Company $756 $1,600
Western Massachusetts Electric Company 41 46
Northeast Utilities Service Company 17,534 20,639
Northeast Utilities 95 180
Public Service Company of New Hampshire 203 210
North Atlantic Energy Service Corporation 155 41
----------- ----------
TOTAL $18,784 $22,716
=========== ==========
- ------------------------------------------------------------------------------------------
ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES
Millstone 3 Funding Liability $47,996 $39,801
Pension Cost 30,452 35,855
VEPCO and PECO Incentive Fees - 4,752
Performance Reward Program 544 3,485
Payroll Accrual 2,756 2,748
Severance Accrual - 481
Miscellaneous (2 items) (3) (25)
----------- ----------
TOTAL $81,745 $87,097
=========== ==========
</TABLE>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars
as to any significant contingent assets or liabilities existing
at the end of the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by
reference.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
Northeast Nuclear Energy Company (NNECO or the company) is a wholly owned
subsidiary of Northeast Utilities (NU). The Connecticut Light and Power
Company (CL&P), Public Service Company of New Hampshire (PSNH), Western
Massachusetts Electric Company (WMECO), Holyoke Water Power Company and
North Atlantic Energy Corporation are the operating subsidiaries of the
Northeast Utilities system (the NU system) and are wholly owned by NU.
NNECO acts as agent for the NU system companies and other New England
utilities in operating the two nuclear generating facilities (Millstone 1
and 2) that are wholly owned by CL&P and WMECO. The cost of the two
nuclear units is recorded on the books of the affiliated utility companies
in their proportionate ownership shares. In addition, NNECO acts as agent
in operating a third nuclear generating unit, Millstone 3, for CL&P, PSNH,
WMECO and other nonaffiliated utilities. The cost of Millstone 3 is
recorded on the books of CL&P, PSNH, WMECO and the nonaffiliated utilities
based upon their proportionate ownership shares.
Other wholly owned subsidiaries of NU provide support services for the NU
system companies and, in some cases, for other New England utilities.
Northeast Utilities Service Company (NUSCO) supplies centralized
accounting, administrative, data processing, engineering, financial, legal,
operational, planning, purchasing and other services to the NU system
companies. North Atlantic Energy Service Corporation has operational
responsibility of the Seabrook nuclear power plant.
All transactions among affiliated companies are on a recovery of cost
basis, which may include amounts representing a return on equity, and are
subject to approval of various federal and state regulatory agencies.
PUBLIC UTILITY REGULATION
NU is registered with the Securities and Exchange Commission (SEC) as a
holding company under the Public Utility Holding Company Act of 1935 (the
1935 Act). NU and its subsidiaries, including the company, are subject to
the provisions of the 1935 Act.
REVENUES
The company provides services to the affiliated utility companies on the
basis of recovery of cost plus return on capital, as defined under the
terms of agreements, which have been approved by various federal and state
regulatory commissions having jurisdiction over operations of the company
and the affiliated utility companies.
DEPRECIATION
The provision for depreciation is calculated using the straight-line method
based on estimated remaining lives of depreciable utility plant-in-service,
adjusted for salvage value and removal costs, as approved by the
appropriate regulatory agency.
Except for major facilities, depreciation rates are applied to the average
plant-in-service during the period. Major facilities are depreciated from
the time they are placed in service. When plant is retired from service,
the original cost of plant, including costs of removal, less salvage, is
charged to the accumulated provision for depreciation. The depreciation
rates for the several classes of utility plant-in-service are equivalent to
a composite rate of 4.5 percent in 1997 and 1996.
2. LEASES
The company has entered into lease agreements with two unaffiliated third
parties for the use of nuclear control room simulators (simulators) for
Millstone 1 and 2, and CL&P's and WMECO's share of the Millstone 3
simulator. In addition, the company's affiliates have entered into lease
agreements for the use of data processing equipment, office equipment,
vehicles and office space. NNECO is billed for its proportionate share of
these leases through the intercompany billing system. The provisions of
these lease agreements generally provide for renewal options.
Rental payments charged to operating expenses for 1997 and 1996 amounted to
approximately $4.8 each year, for capital lease rental payments and $6.1
million and $6.8 million, respectively, for operating lease rental
payments.
Interest included in capital lease rental payments for 1997 and 1996 was
approximately $1.6 million and $1.8 million, respectively.
Future minimum rental payments, excluding executory costs such as property
taxes, state use taxes, insurance and maintenance, under long-term
noncancelable leases as of December 31, 1997, are approximately:
Period Capital Leases Operating Leases
(Thousands of Dollars)
1998......................... $ 4,400 $ 800
1999......................... 4,400 600
2000......................... 4,000 300
2001......................... 1,900 40
2002......................... - 30
After 2002................... - 40
------- -------
Future minimum lease payments 14,700 $1,810
$1,810 =======
Less amount representing interest 2,700
Present value of future minimum
lease payments............. $12,000
=======
3. SHORT-TERM DEBT
Certain subsidiaries of NU, including NNECO, are members of the Northeast
Utilities System Money Pool (Pool). The Pool provides a more efficient use
of the cash resources of the NU system, and reduces outside short-term
borrowings. NUSCO administers the Pool as agent for the member companies.
Short-term borrowing needs of the member companies are first met with
available funds of other member companies, including funds borrowed by NU
parent. NU parent may lend to the Pool, but may not borrow. Funds may be
withdrawn from or repaid to the Pool at any time without prior notice.
Investing and borrowing subsidiaries receive and pay interest based on the
average daily Federal Funds rate. Borrowings based on loans from NU
parent, however, bear interest at NU parent's cost and must be repaid based
upon the terms of NU parent's original borrowing. At December 31, 1997 and
1996, NNECO had no borrowings outstanding under the Pool.
4. LONG-TERM DEBT
Detail of long-term debt outstanding is:
December 31, 1997 1996
(Thousands of Dollars)
7.67% Senior Notes, due 2000............... $18,033 $24,182
Less: Amounts due within one year......... 6,011 398
Long-term debt, net........................ $12,022 $23,784
In April 1997, Moody's Investors Services downgraded both CL&P's and
WMECO's first mortgage bonds. As a result of this downgrade, NNECO's note
payments became accelerated as required under the terms of the notes.
NNECO is now required to make a series of four equal annual prepayments,
effectively resulting in the notes being fully repaid by May 2000 rather
than the original maturity date in 2019. Therefore, approximately $6
million of the notes has been reclassified as a current obligation.
Cash sinking-fund requirements on debt outstanding at December 31, 1997 are
approximately $6,011,000 for 1998 and 1999, $5,776,000 for 2000 and nothing
for 2001 and 2002.
5. PENSION BENEFITS
NNECO participates in a uniform noncontributory-defined benefit retirement
plan covering all regular NU system employees (the plan). Benefits are
based on years of service and employees' highest eligible compensation
during 60 consecutive months of employment. NNECO's direct portion of the
NU system's pension cost, part of which was charged to plant, approximated
$5.4 million in 1997 and $7.2 million in 1996.
Currently, NNECO funds annually an amount at least equal to that which will
satisfy the requirements of the Employee Retirement Income Security Act and
the Internal Revenue Code. Pension costs are determined using market-
related values of pension assets. Pension assets are invested primarily in
domestic and international equity securities and bonds.
<TABLE>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
The components of net pension cost for NNECO are:
At December 31, 1997 1996
(Thousands of Dollars)
<S> <C> <C>
Service cost................................. $ 5,572 $ 5,882
Interest cost................................ 7,715 7,486
Return on plan assets........................ (18,139) (12,461)
Net amortization............................. 10,256 6,335
Net pension cost............................. $ 5,404 $ 7,242
For calculating pension cost, the following assumptions were used:
For the Years Ended December 31, 1997 1996
Discount rate................................ 7.75% 7.50%
Expected long-term rate of return............ 9.25 8.75
Compensation/progression rate................ 4.75 4.75
The following table represents the plan's funded status reconciled to the
Balance Sheets:
At December 31, 1997 1996
(Thousands of Dollars)
Accumulated benefit obligation at December 31, 1997 and
1996, including vested benefits of $(54,697,000) and
$(49,379,000), respectively................ $ (69,577)$ (63,645)
Projected benefit obligation (PBO)........... $(111,394) $(107,001)
Market value of plan assets.................. 103,949 89,828
PBO in excess of market value of plan assets. (7,445) (17,173)
Unrecognized transition amount............... (1,584) (1,729)
Unrecognized prior service costs............. 3,804 4,062
Unrecognized net gain........................ (30,630) (15,612)
Accrued pension liability.................... $ (35,855)$ (30,452)
The following actuarial assumptions were used in calculating the plan's
year-end funded status:
At December 31, 1997 1996
Discount rate................................ 7.25% 7.75%
Compensation/progression rate.............. 4.25 4.75
6. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The NU system subsidiaries, including NNECO, provide certain health care
benefits, primarily medical and dental, and life insurance benefits through
a benefit plan to retired employees (referred to as Statement of Accounting
Standards 106 (SFAS 106) benefits). For current employees and certain
retirees, the total SFAS 106 benefit is limited to two times the 1993 per-
retiree health care cost. The SFAS 106 obligation has been calculated
based on this assumption. These benefits are available for employees
retiring from the NU system who have met specified service requirements.
NNECO's direct portion of SFAS 106 costs, part of which were deferred
or charged to utility plant, approximated $1.2 million in 1997 and $2.1
million in 1996.
During 1997 and 1996, NNECO funded SFAS 106 postretirement costs through
external trusts. NNECO is funding on an annual basis amounts equal to the
SFAS 106 costs for the year which also are tax-deductible under the
Internal Revenue Code. The trust assets are invested primarily in equity
securities and bonds.
The components of health care and life insurance cost are:
At December 31, 1997 1996
(Thousands of Dollars)
Service cost..................................... $ 689 $1,009
Interest cost.................................... 1,072 1,204
Return on plan assets............................ (1,623) (762)
Amortization of unrecognized transition obligation 277 277
Other amortization, net.......................... 821 330
Net health care and life insurance cost.......... $1,236 $2,058
The following assumptions were used in calculating SFAS 106 benefit costs:
At December 31, 1997 1996
Discount rate.................................... 7.75% 7.50%
Long-term rate of return - health assets, net of tax 6.00 5.25
Long-term rate of return - life assets........... 9.25 8.75
The following table represents the plan's funded status reconciled to the
Balance Sheets:
At December 31, 1997 1996
(Thousands of Dollars)
Accumulated postretirement benefit obligation of:
Retirees....................................... $ (8,335) $ (7,500)
Active employees not eligible to retire........ (6,843) (8,889)
Total accumulated postretirement benefit obligation (15,178) (16,389)
Market value of plan assets...................... 10,008 7,881
Accumulated postretirement benefit obligation
in excess of plan assets....................... (5,170) (8,508)
Unrecognized transition amount................... 4,159 4,436
Unrecognized net loss............................ 1,011 4,072
Postretirement benefit obligation................ $ 0 $ 0
The following actuarial assumptions were used in calculating the plan's
year-end funded status:
At December 31, 1997 1996
Discount rate.................................... 7.25% 7.75%
Health care cost trend rate (a).................. 5.76 7.23
(a) The annual growth in per capita cost of covered health care benefits
was assumed to decrease to 4.4 percent by 2001.
The effect of 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, 1997 by $608,000 and the aggregate of
the service and interest cost components of net periodic postretirement
benefit cost for the year then ended by $71,000. The trust holding the
plan assets is subject to federal income taxes at a 39.6-percent tax rate.
7. NUCLEAR PERFORMANCE
The three Millstone units are managed by NNECO. Millstone 1, 2 and 3 have
been out of service since November 4, 1995, February 21, 1996 and March 30,
1996, respectively, and are on the Nuclear Regulatory Commission's (NRC)
Watch List. The company has restructured its nuclear organization and is
currently implementing comprehensive plans to restart the units. The
actual date of the return to service for each of the units is dependent
upon the completion of independent inspections and reviews by the NRC and a
vote by the NRC commissioners. NU hopes to return Millstone 3 to service
in the early spring of 1998 and Millstone 2 three to four months after
Millstone 3. Millstone 1 has been placed in extended maintenance status
while management is reviewing its options with respect to the unit.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
FOR THE YEAR ENDED DECEMBER 31, 1997
SCHEDULE XV
COMPARATIVE INCOME STATEMENT
- ---------------------------------------------------------------------------------------
ACCOUNT DESCRIPTION 1997 1996
- ---------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
INCOME
------
457 Services rendered to associate companies $631,692 $409,581
458 Services rendered to nonassociate companies 102,883 62,279
421 Miscellaneous income or loss 4,981 2,505
------------ -----------
Total Income 739,556 474,365
------------ -----------
EXPENSE
-------
Nuclear Power Expenses
517 Operation Supervision and Engineering 140,209 57,959
519 Coolants and Water 4,410 3,931
520 Steam Expenses 30,906 27,385
523 Electric Expenses 11,807 11,729
524 Miscellaneous Nuclear Power Expenses 74,041 61,290
525 Rents 5,579 5,690
528 Maintenance Supervision and Engineering 85,234 41,362
529 Maintenance of Structures 14,799 9,429
530 Maintenance of Reactor Plant Equipment 162,792 106,061
531 Maintenance of Electric Plant 115,900 61,703
532 Maintenance of Miscellaneous Nuclear Plant 663 1,553
Transmission Expenses
560 Operation Supervision and Engineering 0 0
562 Station Expenses 1,565 1,752
566 Miscellaneous Transmission Expenses 0 0
568 Maintenance Supervision and Engineering 0 0
569 Maintenance of Structures 0 0
570 Maintenance of Station Equipment 0 31
Administrative and General Expenses
920 Salaries and wages 12,177 11,536
921 Office supplies and expenses 8,153 6,044
922 Administrative expense transferred-credit 0 0
923 Outside services employed 18,588 11,876
924 Property insurance (1,227) 3,142
925 Injuries and damages 4,296 3,164
926 Employee pensions and benefits 18,979 23,571
928 Regulatory commission expense 90 30
930.1 General advertising expenses 0 0
930.2 Miscellaneous general expenses 947 1,699
931 Rents 4,434 3,573
932 Maintenance of structures and equipment 639 257
All other expenses
403 Depreciation and amortization expense 1,623 1,621
408 Taxes other than income taxes 11,239 10,716
409 Income taxes 7,975 6,882
410 Provision for deferred income taxes 837 1,218
411 Provision for deferred income taxes-credit (5,989) (5,478)
411.5 Investment tax credit (65) (66)
426.1 Donations 24 19
426.5 Other deductions 4,121 490
427 Interest on long-term debt 2,007 1,788
430 Interest on debt to associate companies 0 0
431 Other interest expense 805 476
------------ -----------
Total Expense 737,558 472,433
------------ -----------
Net Income $1,998 $1,932
============ ===========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
- -------------------------------------------------------------------------------
DIRECT INDIRECT COMPENSATION TOTAL
COSTS COSTS FOR USE AMOUNT
NAME OF ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL BILLED
- -------------------------------------------------------------------------------
(Thousands of Dollars)
457-1 457-2 457-3
----------------------------------------------
<S> <C> <C> <C> <C>
The Connecticut Light and
Power Company $500,909 $3,847 $504,756
Western Massachusetts
Electric Company 116,935 900 117,835
Public Service Company
of New Hampshire 9,068 33 9,101
---------- ---------- ------------ -----------
TOTAL $626,912 $0 $4,780 $631,692
========== ========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
ANALYSIS OF BILLING
NONASSOCIATE COMPANIES
ACCOUNT 458
- ---------------------------------------------------------------------------------------------
DIRECT INDIRECT COMPENSATION EXCESS TOTAL
COSTS COSTS FOR USE TOTAL OR AMOUNT
NAME OF NONASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL COSTS DEFICIENCY BILLED
- ---------------------------------------------------------------------------------------------
(Thousands of Dollars)
458-1 458-2 458-3 458-4
-------------------------------------------------------------
<S>
Connecticut Yankee Atomic <C> <C> <C> <C> <C><C>
Power Company $ 424 $ $ 0 $ 424 $ $ 424
Central Maine Power Company 7,961 29 7,990 7,990
Central Vermont Public Service 5,517 20 5,537 5,537
Montaup Electric Co. 12,760 46 12,806 12,806
New England Power Co. 38,965 139 39,104 39,104
United Illuminating Company 11,728 41 11,769 11,769
Fitchburg Gas & Electric Co. 692 3 695 695
Chicopee Municipal Electric 4,322 15 4,337 4,337
Massachusetts Municipal
Wholesale 15,379 55 15,434 15,434
Lyndonville Electric Department 156 1 157 157
Connecticut Municipal Electric
Coop 3,478 12 3,490 3,490
Vermont Electric Gen & Trans. 1,136 4 1,140 1,140
-------------------------------------------------------------
$102,518 $ 0 $ 365 $ 102,883 $ 0 $102,883
=============================================================
INSTRUCTIONS: Provide a brief description of the services rendered to each
nonassociate company:
The Company acts as agent in operating Millstone Unit 3 for the nonassociate companies.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
- --------------------------------------------------------------------------
ASSOCIATE COMPANY CHARGES
-------------------------
ACCOUNT DIRECT INDIRECT
NUMBER DESCRIPTION OF ITEMS COST COST TOTAL
- --------------------------------------------------------------------------
<S> <C> <C><C>
Nuclear Power Expenses
517 OPERATION SUPERVISION AND ENGINEERING 126,393 0 126,393
519 COOLANTS AND WATER 3,874 0 3,874
520 STEAM EXPENSES 27,189 0 27,189
523 ELECTRIC EXPENSES 10,477 0 10,477
524 MISCELLANEOUS NUCLEAR POWER EXPENSES 64,803 0 64,803
525 RENTS 4,424 0 4,424
528 MAINTENANCE SUPERVISION AND ENGINEERING 72,374 0 72,374
529 MAINTENANCE OF STRUCTURES 13,365 0 13,365
530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 140,393 0 140,393
531 MAINTENANCE OF ELECTRIC PLANT 90,606 0 90,606
532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT 594 0 594
Transmission Expenses
560 OPERATION SUPERVISION AND ENGINEERING 0 0 0
562 STATION EXPENSES 129 0 129
566 MISCELLANEOUS TRANSMISSION EXPENSES 0 0 0
568 MAINTENANCE SUPERVISION AND ENGINEERING 0 0 0
569 MAINTENANCE OF STRUCTURES 0 0 0
570 MAINTENANCE OF STATION EQUIPMENT 0 0 0
Administrative and General Expenses
920 SALARIES AND WAGES 10,719 0 10,719
921 OFFICE SUPPLIES AND EXPENSES 7,199 0 7,199
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0 0
923 OUTSIDE SERVICES EMPLOYED 16,361 0 16,361
924 PROPERTY INSURANCE (1,488) 0 (1,488)
925 INJURIES AND DAMAGES 3,606 0 3,606
926 EMPLOYEE PENSIONS AND BENEFITS 16,760 0 16,760
928 REGULATORY COMMISSION EXPENSE 81 0 81
930.1 GENERAL ADVERTISING EXPENSES 0 0 0
930.2 MISCELLANEOUS GENERAL EXPENSES 829 0 829
931 RENTS 3,926 0 3,926
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT 561 0 561
All other expenses 0
403 DEPRECIATION AND AMORTIZATION EXPENSES 1,402 0 1,402
408 TAXES OTHER THAN INCOME TAXES 9,821 0 9,821
409 INCOME TAXES 7,991 0 7,991
410 PROVISION FOR DEFERRED INCOME TAXES 837 0 837
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT (5,989) 0 (5,989)
411.5 INVESTMENT TAX CREDIT (65) 0 (65)
426.1 DONATIONS 21 0 21
426.5 OTHER DEDUCTIONS 3,677 0 3,677
427 INTEREST ON LONG-TERM DEBTS 0 0 0
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0 0 0
431 OTHER INTEREST EXPENSE 804 0 804
-------------------------
SUBTOTAL EXPENSES = 631,674 0 631,674
COMPENSATION FOR USE OF CAPITAL=
427 INTEREST ON LONG-TERM DEBTS 2,007
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0
431 OTHER INTEREST EXPENSE 0
525 RENTS 775
--------
TOTAL EXPENSES = 634,456
421 MISCELLANEOUS INCOME - CREDIT (4,762) 0 (4,762)
NET INCOME 1,998
-------------------------
TOTAL COST OF SERVICE = 626,912 0 631,692
=========================
</TABLE>
INSTRUCTION: Total cost of service will
equal for associate and nonassociate
companies the total amount billed under
their separate analysis of billing
schedules.
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
- ------------------------------------------------------------------------------
NONASSOCIATE COMPANY CHARGES
-----------------------------
ACCOUNT DIRECT INDIRECT
NUMBER DESCRIPTION OF ITEMS COST COST TOTAL
- ------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Nuclear Power Expenses
517 OPERATION SUPERVISION AND ENGINEERING 13,816 0 13,816
519 COOLANTS AND WATER 536 0 536
520 STEAM EXPENSES 3,717 0 3,717
523 ELECTRIC EXPENSES 1,330 0 1,330
524 MISCELLANEOUS NUCLEAR POWER EXPENSES 9,238 0 9,238
525 RENTS 15 0 15
528 MAINTENANCE SUPERVISION AND ENGINEERING 12,860 0 12,860
529 MAINTENANCE OF STRUCTURES 1,434 0 1,434
530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 22,399 0 22,399
531 MAINTENANCE OF ELECTRIC PLANT 25,294 0 25,294
532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT 69 0 69
Transmission Expenses
560 OPERATION SUPERVISION AND ENGINEERING 0 0 0
562 STATION EXPENSES 1,436 0 1,436
566 MISCELLANEOUS TRANSMISSION EXPENSES 0 0 0
568 MAINTENANCE SUPERVISION AND ENGINEERING 0 0 0
569 MAINTENANCE OF STRUCTURES 0 0 0
570 MAINTENANCE OF STATION EQUIPMENT 0 0 0
Administrative and General Expenses
920 SALARIES AND WAGES 1,458 0 1,458
921 OFFICE SUPPLIES AND EXPENSES 954 0 954
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0 0
923 OUTSIDE SERVICES EMPLOYED 2,227 0 2,227
924 PROPERTY INSURANCE 261 0 261
925 INJURIES AND DAMAGES 690 0 690
926 EMPLOYEE PENSIONS AND BENEFITS 2,219 0 2,219
928 REGULATORY COMMISSION EXPENSE 9 0 9
930.1 GENERAL ADVERTISING EXPENSES 0 0 0
930.2 MISCELLANEOUS GENERAL EXPENSES 118 0 118
931 RENTS 508 0 508
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT 78 0 78
All other expenses 0
403 DEPRECIATION AND AMORTIZATION EXPENSES 221 0 221
408 TAXES OTHER THAN INCOME TAXES 1,418 0 1,418
409 INCOME TAXES (16) 0 (16)
410 PROVISION FOR DEFERRED INCOME TAXES 0 0 0
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT 0 0 0
411.5 INVESTMENT TAX CREDIT 0 0 0
426.1 DONATIONS 3 0 3
426.5 OTHER DEDUCTIONS 444 0 444
427 INTEREST ON LONG-TERM DEBTS 0 0 0
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0 0 0
431 OTHER INTEREST EXPENSE 1 0 1
----------------------------
SUBTOTAL EXPENSES = 102,737 0 102,737
COMPENSATION FOR USE OF CAPITAL=
427 INTEREST ON LONG-TERM DEBTS 0
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0
431 OTHER INTEREST EXPENSE 0
525 RENTS 365
------------
TOTAL EXPENSES = 103,102
421 MISCELLANEOUS INCOME - CREDIT (219) 0 (219)
NET INCOME 0
-----------------------------
TOTAL COST OF SERVICE = 102,518 0 102,883
=============================
</TABLE>
INSTRUCTION: Total cost of service will
equal for associate and nonassociate
companies the total amount billed under
their separate analysis of billing
schedules.
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
- -------------------------------------------------------------------------------
TOTAL CHARGES FOR SERVICE
------------------------------
ACCOUNT DIRECT INDIRECT
NUMBER DESCRIPTION OF ITEMS COST COST TOTAL
- -------------------------------------------------------------------------------
<S> <C>
Nuclear Power Expenses
517 OPERATION SUPERVISION AND ENGINEERING 140,209 0 140,209
519 COOLANTS AND WATER 4,410 0 4,410
520 STEAM EXPENSES 30,906 0 30,906
523 ELECTRIC EXPENSES 11,807 0 11,807
524 MISCELLANEOUS NUCLEAR POWER EXPENSES 74,041 0 74,041
525 RENTS 4,439 0 4,439
528 MAINTENANCE SUPERVISION AND ENGINEERING 85,234 0 85,234
529 MAINTENANCE OF STRUCTURES 14,799 0 14,799
530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 162,792 0 162,792
531 MAINTENANCE OF ELECTRIC PLANT 115,900 0 115,900
532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT 663 0 663
Transmission Expenses
560 OPERATION SUPERVISION AND ENGINEERING 0 0 0
562 STATION EXPENSES 1,565 0 1,565
566 MISCELLANEOUS TRANSMISSION EXPENSES 0 0 0
568 MAINTENANCE SUPERVISION AND ENGINEERING 0 0 0
569 MAINTENANCE OF STRUCTURES 0 0 0
570 MAINTENANCE OF STATION EQUIPMENT 0 0 0
Administrative and General Expenses
920 SALARIES AND WAGES 12,177 0 12,177
921 OFFICE SUPPLIES AND EXPENSES 8,153 0 8,153
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0 0
923 OUTSIDE SERVICES EMPLOYED 18,588 0 18,588
924 PROPERTY INSURANCE (1,227) 0 (1,227)
925 INJURIES AND DAMAGES 4,296 0 4,296
926 EMPLOYEE PENSIONS AND BENEFITS 18,979 0 18,979
928 REGULATORY COMMISSION EXPENSE 90 0 90
930.1 GENERAL ADVERTISING EXPENSES 0 0 0
930.2 MISCELLANEOUS GENERAL EXPENSES 947 0 947
931 RENTS 4,434 0 4,434
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT 639 0 639
All other expenses
403 DEPRECIATION AND AMORTIZATION EXPENSES 1,623 0 1,623
408 TAXES OTHER THAN INCOME TAXES 11,239 0 11,239
409 INCOME TAXES 7,975 0 7,975
410 PROVISION FOR DEFERRED INCOME TAXES 837 0 837
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT (5,989) 0 (5,989)
411.5 INVESTMENT TAX CREDIT (65) 0 (65)
426.1 DONATIONS 24 0 24
426.5 OTHER DEDUCTIONS 4,121 0 4,121
427 INTEREST ON LONG-TERM DEBTS 0 0 0
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0 0 0
431 OTHER INTEREST EXPENSE 805 0 805
------------------------------
SUBTOTAL EXPENSES = 734,411 0 734,411
COMPENSATION FOR USE OF CAPITAL=
427 INTEREST ON LONG-TERM DEBTS 2,007
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0
431 OTHER INTEREST EXPENSE 0
525 RENTS 1,140
----------
TOTAL EXPENSES = 737,558
421 MISCELLANEOUS INCOME - CREDIT (4,981) 0 (4,981)
NET INCOME 1,998
------------------------------
TOTAL COST OF SERVICE = 729,430 0 734,575
==============================
</TABLE>
INSTRUCTION: Total cost of service will
equal for associate and nonassociate
companies the total amount billed under
their separate analysis of billing
schedules.
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1995
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION BY
DEPARTMENT OR SERVICE FUNCTION
- ----------------------------------------------------------------------------
ACCOUNT TOTAL
NUMBER DESCRIPTION OF ITEMS AMOUNT OVERHEAD
- ----------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
Nuclear Power Expenses
517 OPERATION SUPERVISION AND ENGINEERING 140,209 0
519 COOLANTS AND WATER 4,410 0
520 STEAM EXPENSES 30,906 0
523 ELECTRIC EXPENSES 11,807 0
524 MISCELLANEOUS NUCLEAR POWER EXPENSES 74,041 0
525 RENTS 5,579 1,140
528 MAINTENANCE SUPERVISION AND ENGINEERING 85,234 0
529 MAINTENANCE OF STRUCTURES 14,799 0
530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 162,792 0
531 MAINTENANCE OF ELECTRIC PLANT 115,900 0
532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT 663 0
Transmission Expenses
560 OPERATION SUPERVISION AND ENGINEERING 0 0
562 STATION EXPENSES 1,565 0
566 MISCELLANEOUS TRANSMISSION EXPENSES 0 0
568 MAINTENANCE SUPERVISION AND ENGINEERING 0 0
569 MAINTENANCE OF STRUCTURES 0 0
570 MAINTENANCE OF STATION EQUIPMENT 0 0
Administrative and General Expenses
920 SALARIES AND WAGES 12,177 0
921 OFFICE SUPPLIES AND EXPENSES 8,153 0
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0
923 OUTSIDE SERVICES EMPLOYED 18,588 0
924 PROPERTY INSURANCE (1,227) 0
925 INJURIES AND DAMAGES 4,296 0
926 EMPLOYEE PENSIONS AND BENEFITS 18,979 0
928 REGULATORY COMMISSION EXPENSE 90 0
930.1 GENERAL ADVERTISING EXPENSES 0 0
930.2 MISCELLANEOUS GENERAL EXPENSES 947 0
931 RENTS 4,434 0
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT 639 0
All other expenses
403 DEPRECIATION AND AMORTIZATION EXPENSES 1,623 0
408 TAXES OTHER THAN INCOME TAXES 11,239 0
409 INCOME TAXES 7,975 0
410 PROVISION FOR DEFERRED INCOME TAXES 837 0
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT (5,989) 0
411.5 INVESTMENT TAX CREDIT (65) 0
426.1 DONATIONS 24 0
426.5 OTHER DEDUCTIONS 4,121 0
427 INTEREST ON LONG-TERM DEBTS 2,007 2,007
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0 0
431 OTHER INTEREST EXPENSE 805 0
----------------------
TOTAL EXPENSES = 737,558 3,147
======================
</TABLE>
INSTRUCTIONS: Indicate each department or
service function. (See Instruction 01-3
General Structure of Accounting System:
Uniform System of Accounts)
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1995
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION BY
DEPARTMENT OR SERVICE FUNCTION
- ------------------------------------------------------------------------------------------
DEPARTMENT OR SERVICE FUNCTION
------------------------------------
ACCOUNT MILLSTONE MILLSTONE MILLSTONE
NUMBER DESCRIPTION OF ITEMS UNIT #1 UNIT #2 UNIT #3
- ------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Nuclear Power Expenses
517 OPERATION SUPERVISION AND ENGINEERING 58,630 38,388 43,191
519 COOLANTS AND WATER 1,232 1,503 1,675
520 STEAM EXPENSES 8,663 10,620 11,623
523 ELECTRIC EXPENSES 3,734 3,914 4,159
524 MISCELLANEOUS NUCLEAR POWER EXPENSES 20,656 26,004 27,381
525 RENTS 1,444 1,599 1,396
528 MAINTENANCE SUPERVISION AND ENGINEERING 15,368 29,665 40,201
529 MAINTENANCE OF STRUCTURES 4,051 6,265 4,483
530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 24,076 68,677 70,039
531 MAINTENANCE OF ELECTRIC PLANT 7,315 29,493 79,092
532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT 223 223 217
Transmission Expenses
560 OPERATION SUPERVISION AND ENGINEERING 0 0 0
562 STATION EXPENSES 0 0 1,565
566 MISCELLANEOUS TRANSMISSION EXPENSES 0 0 0
568 MAINTENANCE SUPERVISION AND ENGINEERING 0 0 0
569 MAINTENANCE OF STRUCTURES 0 0 0
570 MAINTENANCE OF STATION EQUIPMENT 0 0 0
Administrative and General Expenses
920 SALARIES AND WAGES 3,790 3,832 4,555
921 OFFICE SUPPLIES AND EXPENSES 2,614 2,565 2,974
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0 0
923 OUTSIDE SERVICES EMPLOYED 5,499 5,327 7,762
924 PROPERTY INSURANCE (835) (835) 443
925 INJURIES AND DAMAGES 901 1,238 2,157
926 EMPLOYEE PENSIONS AND BENEFITS 5,926 6,114 6,939
928 REGULATORY COMMISSION EXPENSE 35 26 29
930.1 GENERAL ADVERTISING EXPENSES 0 0 0
930.2 MISCELLANEOUS GENERAL EXPENSES 278 301 368
931 RENTS 1,433 1,414 1,587
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT 191 205 243
All other expenses
403 DEPRECIATION AND AMORTIZATION EXPENSES 663 503 457
408 TAXES OTHER THAN INCOME TAXES 3,316 3,542 4,381
409 INCOME TAXES 4,016 4,010 (51)
410 PROVISION FOR DEFERRED INCOME TAXES 419 418 0
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT (2,995) (2,994) 0
411.5 INVESTMENT TAX CREDIT (33) (32) 0
426.1 DONATIONS 8 8 8
426.5 OTHER DEDUCTIONS 1,365 1,366 1,390
427 INTEREST ON LONG-TERM DEBTS 0 0 0
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0 0 0
431 OTHER INTEREST EXPENSE 401 401 3
------------------------------------
TOTAL EXPENSES = 172,384 243,760 318,267
====================================
</TABLE>
INSTRUCTIONS: Indicate each department or
service function. (See Instruction 01-3
General Structure of Accounting System:
Uniform System of Accounts)
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE XVII
-------------
KEYS FOR SERVICE FUNCTIONS
--------------------------
KEYS SERVICE FUNCTION
---- ----------------
The individual generating units for which NNECO provides
service are listed separately on Page 24.
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
DEPARTMENTAL ANALYSIS OF SALARIES
---------------------------------
DEPARTMENTAL SALARY EXPENSE
NAME OF DEPARTMENT INCLUDED IN AMOUNTS BILLED TO NUMBER OF
- ------------------ --------------------------------------- PERSONNEL
Indicate each dept. TOTAL PARENT OTHER NON END
or service function. AMOUNT COMPANY ASSOCIATES ASSOCIATES OF YEAR
- -------------------- --------------------------------------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
MILLSTONE UNIT #1 28,517 0 28,517 0 436
MILLSTONE UNIT #2 37,118 0 37,118 0 563
MILLSTONE UNIT #3 50,717 0 34,497 16,220 648
--------------------------------------- ---------
116,352 0 100,132 16,220 1,647
======================================= =========
</TABLE>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
OUTSIDE SERVICES EMPLOYED
<TABLE>
<CAPTION>
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the
aggregate amounts paid to any one payee and included within one subaccount
is less than $100,000, only the aggregate number and amount of all
such payments included within the subaccount need be shown. Provide a
subtotal for each type of service.
- ----------------------------------------------------------------------------------------
RELATIONSHIP
"A"-ASSOCIATE
"NA"-NON
FROM WHOM PURCHASED ADDRESS ASSOCIATE AMOUNT
- ----------------------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C>
ENGINEERING SERVICES
- --------------------
A E D NA $173
ABB CE NUCLEAR POWER NA $259
BARTLETT NUCLEAR INC NA $105
CATARACT, INC. NA $3,050
CONTINGENCY MANAGEMENT ASSOCIATES NA $590
CONTRACT SOLUTIONS NA $2,809
COOPERS & LYBRAND LLP NA $229
CORE CORP NA $139
DUKE ENGINEERING & SERVICES INC NA $1,249
ENERCON SERVICES INC NA $347
ENGINEERING PLAN MANAGEMENT, INC. NA $499
GENERAL ELECTRIC COMPANY NA $2,024
GENERAL PHYSICS CORP NA $270
J GIVOO CONSULTANTS INC NA $421
JANUS MANAGEMENT ASSOCIATES NA $1,422
LINC SYSTEMS CORP NA $110
LITTLE HARBOR CONSULTANTS INC NA $2,127
MDM ENGINEERING CORP NA $1,125
ONSITE NA $624
P & I CONSULTING LTD NA $111
PARSONS POWER GROUP INC NA $4,927
PECO NUCLEAR NA $1,169
PERFORMANCE IMPROVEMENT INT'L NA $250
PERFORMANCE MANAGEMENT NA $108
PROTO POWER CORP NA $347
RAYTHEON QUALITY PROGRAMS DIVISION NA $3,541
SARGENT & LUNDY, LLC NA $4,250
SECORE L L C NA $316
SOUTHERN DEVELOPMENT & INVESTMENT GROUP NA $365
SPEC CONSULTANTS INC NA $423
STONE & WEBSTER CONSTRUCTION CO. INC. NA $573
THE INDUS GROUP INC NA $101
TJE INC NA $154
TUCKER ALAN INC NA $552
VIRGINIA POWER NA $3,878
W D ASSOCIATES INC NA $1,080
XCALIBER CONSULTING GROUP NA $150
YANKEE ATOMIC ELECTRIC CO NA $499
MISCELLANEOUS (17 PAYEES) NA $406
-----------
TOTAL ENGINEERING SERVICES 40,772
===========
LEGAL SERVICES
- --------------
CARMODY & TORRANCE DR NA 101
DAY BERRY & HOWARD NA 1,878
GOODWIN PROCTER & HOAR, LLP NA 104
KILLIAN & GEPHART NA 387
MORGAN LEWIS & BOCKIUS, LLP NA $2,036
RALPH G BIRD NA 169
UPDIKE KELLY & SPELLACY NA 491
WINSTON & STRAWN NA 237
-----------
TOTAL LEGAL SERVICES $5,403
===========
SECURITY SERVICES
- -----------------
BURNS INTL SECURITY SERVICES NA $7,913
EQUIFAX SERVICES INC NA 196
MISCELLANEOUS (1 PAYEE) NA 24
-----------
TOTAL SECURITY SERVICES $8,133
===========
TELECOMMUNICATION SERVICES
- --------------------------
AT&T NA 169
LUCENT TECHNOLOGIES NA 112
SNET NA $472
MISCELLANEOUS (7 PAYEES) NA 16
-----------
TOTAL TELECOMMUNICATION SERVICES $769
===========
TEMPORARY EMPLOYMENT SERVICES
- -----------------------------
MANPOWER INC NA $978
NUCON NA $2,346
MISCELLANEOUS (1 PAYEE) NA $12
-----------
TOTAL TEMPORARY EMPLOYMENT SERVICES $3,336
===========
WATER TREATMENT SERVICES
- ------------------------
ECOLOCHEM NA $819
-----------
TOTAL WATER TREATMENT SERVICES $819
===========
COMPUTERS SERVICES
- ------------------
ALPINE COMPUTER SYSTEMS NA $300
C W COSTELLO & ASSOCIATES INC NA $153
INTERLEAF INC NA $115
PRIDE TECHNOLOGIES INC NA $284
SCIENTECH INC NA $447
-----------
TOTAL COMPUTER SERVICES 1,299
===========
OTHER SERVICES
- --------------
BSA ADVERTISING INC NA 111
BURSON MARSTELLER NA 145
COOPERS & LYBRAND NA 128
INVESTCONSULT INC NA $158
THE WINN COMPANY NA 120
MISCELLANEOUS (554 PAYEES) NA 4,754
-----------
TOTAL OTHER SERVICES $5,416
===========
NORTHEAST UTILIITES SERVICE COMPANY
(Supplies centralized accounting,
administrative, data processing,
engineering, financial, legal,
operational, planning, purchasing
and other services) A $18,623
===========
GRAND TOTAL $84,570
===========
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
OUTSIDE SERVICES EMPLOYED FOR PAYEES GREATER THAN $100,000
</TABLE>
<TABLE>
<CAPTION>
PAYEE NAME DESCRIPTION OF SERVICES RENDERED
- ----------------------------------------------------------------------------------------------------
<S> <C>
ENGINEERING SERVICES
- --------------------
A E D PROJECT MANAGEMENT SUPPORT FOR CONDITION BASED MAINTENANCE DEPARTMENT
ABB CE NUCLEAR POWER COMBUSTION ENGINEERING RELATED SERVICES
BARTLETT NUCLEAR INC DOSIMETRY PROCESSING SERVICES
CATARACT, INC. ENGINEERING TECHNICAL SUPPORT SERVICES
CONTINGENCY MANAGEMENT ASSOC FURNISH FIRE PROTECTION SERVICES - MILLSTONE FACILITY
CONTRACT SOLUTIONS ENGINEERING RESTART ACTIVITIES ASSESSMENT
COOPERS & LYBRAND LLP ENGINEERING SERVICES WITH REGARD TO COMPLIANCE OF ENVIRONMENTAL LAWS
AND REGS. AT MILLSTONE
CORE CORP SUPPORT MILLSTONE OPERATIONS
DUKE ENG & SERVICES INC ENGINEERING SUPPORT FOR THE MILLSTONE DESIGN ENGINEERING GROUP
ENERCON SERVICES INC ENGINEERING SERVICES - BACKLOG REDUCTION AND LICENSING ACTIVITIES
ENGINEERING PLAN MANAGE INC ENGINEERING SERVICES TO SUPPORT FIRE PROTECTION PROGRAM VALIDATION
GENERAL ELECTRIC COMPANY FURNISH LOW VOLTAGE SWITCHGEAR AND TRANSFORMERS
GENERAL PHYSICS CORP CONSULTING SERVICES TO SUPPORT INDEPENDENT ASSESSMENT OF RESTART
ACTIVITIES
J GIVOO CONSULTANTS INC ENGINEERING DESIGN BASIS VERIFICATION, LICENSING VALIDATION SUPPORT
JANUS MANAGEMENT ASSOCIATES FURNISH CONSULTING SERVICES IN CONNECTION WITH WATCHLIST MATTERS
LINC SYSTEMS CORP PROVIDE READINESS REVIEW DEVELOPMENT EFFORT
LITTLE HARBOR CONSULTANTS INC INDEPENDENT THIRD PARTY OVERSIGHT OF EMPLOYEE SAFETY CONCERNS PROGRAM
AT MILLSTONE
MDM ENGINEERING CORP ENGINEERING SUPPORT FOR RESTART EFFORTS INCLUDING INDEPENDENT REVIEW
ONSITE ENGINEERING SERVICES RELATED TO OPERATION AND MAINTENANCE
P & I CONSULTING LTD COMMITMENT REVIEW AND RESOLVE
PARSONS POWER GROUP INC CONSULTING SERVICES TO PROVIDE AN INDEPENDENT CORRECTIVE ACTION
VERIFICATION PROGRAM (ICAVP)
PECO NUCLEAR MANAGEMENT AND ENGINEERING CONSULTING SERVICES AT MILLSTONE
PERFORMANCE IMPROVEMENT INT'L CONSULTING SERVICES FOR CORRECTIVE ACTION BACKLOG MANAGEMENT AND
OPTIMIZATION PROGRAM
PERFORMANCE MANAGEMENT CONSULTING SERVICES TO PROVIDE RESTART EFFORTS
PROTO POWER CORP ENGINEERING SERVICES TO SUPPORT MILLSTONE DESIGN ENGINEERING GROUP
RAYTHEON QUALITY PROGRAMS DIV.FURNISH ENGINEERING SERVICES TO PROVIDE PIPING AND COMPONENT ANALYSIS
SARGENT & LUNDY, LLC CONSULTING SERVICES TO PROVIDE AN INDEPENDENT CORRECTIVE ACTION
VERIFICATION PROGRAM (ICAVP)
SECORE L L C PROVIDE SCHEDULING SERVICES TO MILLSTONE
SOUTHERN DEV & INVEST. GROUP ENGINEERING SERVICES ASSOCIATED WITH APPENDIX R ISSUES
SPEC CONSULTANTS INC SUPPORT NUCLEAR PRODUCTION , QA/QC INSPECTIONS SERVICES AT MILLSTONE
STONE & WEBSTER CONST CO INC SITE MAINTENANCE AND JANITORIAL SERVICES
THE INDUS GROUP INC PROVIDE SUPPORT CONTROL DOCUMENTATION FOR ICAVP, PROCESS REVIEW
TJE INC SHIFT MANAGEMENT CONSULTING SERVICES
TUCKER ALAN INC ASSIST IN LEGAL PROCEEDINGS CONCERNING MILLSTONE OUTAGES
VIRGINIA POWER MANAGEMENT AND ENGINEERING CONSULTING SERVICES AT MILLSTONE
W D ASSOCIATES INC OPERATIONS, PROCESS, REGULATORY LICENSING & ENGINEERING CONSULTING
SERVICES FOR MILLSTONE RESTART EFFORTS
XCALIBER CONSULTING GROUP REVIEW ISSUES ON MANAGEMENT AND SUPERVISORY PRACTICES AT MILLSTONE
YANKEE ATOMIC ELECTRIC CO ENGINEERING SERVICES TO SUPPORT INDEPENDENT ASSESSMENT TEAM
LEGAL SERVICES
- --------------
CARMODY & TORRANCE DR FURNISH LEGAL SERVICES ON AN AS REQUESTED BASIS
DAY BERRY & HOWARD FURNISH LEGAL SERVICES ON AN AS REQUESTED BASIS
GOODWIN PROCTER & HOAR LLP FURNISH LEGAL SERVICES ON AN AS REQUESTED BASIS
KILLIAN & GEPHART FURNISH LEGAL SERVICES ON AN AS REQUESTED BASIS
MORGAN LEWIS & BOCKIUS LLP FURNISH LEGAL SERVICES ON AN AS REQUESTED BASIS
RALPH G BIRD CONSULTING SERVICES TO SUPPORT LEGAL PROCEEDINGS FOR MILLSTONE OUTAGES
UPDIKE KELLY & SPELLACY FURNISH LEGAL SERVICES ON AN AS REQUESTED BASIS
WINSTON & STRAWN FURNISH LEGAL SERVICES ON AN AS REQUESTED BASIS
SECURITY SERVICES
- -----------------
BURNS INTL SECURITY SERVICES FURNISH SECURITY SERVICES AND EQUIPMENT FOR BASELINE SECURITY SUPPORT
EQUIFAX SERVICES INC FURNISH BACKGROUND INVESTIGATIONS FOR MILLSTONE
TELECOMMUNICATION SERVICES
- --------------------------
AT&T PROVIDE TELEPHONE SERVICES
LUCENT TECHNOLOGIES PROVIDE TELEPHONE SERVICES
SNET PROVIDE TELEPHONE SERVICES
TEMPORARY EMPLOYMENT SERVICES
- -----------------------------
MANPOWER, INC. FURNISH TEMPORARY LABOR SERVICES
NUCON FURNISH TEMPORARY LABOR SERVICES
WATER TREATMENT SERVICES
- -------------------------
ECOLOCHEM PROVIDE WATER TREATMENT PURIFICATION SERVICES
COMPUTER SERVICES
- -----------------
ALPINE COMPUTER SYSTEMS CONSULTING SERVICES FOR DISK CONVERSION WORK
C W COSTELLO & ASSOCIATES INC PROVIDE PROGRAMMING SERVICES AS NEEDED
INTERLEAF INC PROVIDE HARDWARE AND SOFTWARE TROUBLESHOOTING
PRIDE TECHNOLOGIES INC PROVIDE COMPUTER EQUIPMENT AND SUPPLIES
SCIENTECH INC CONSULTING SERVICES; DATA INTERFACE AND OTHER SOFTWARE WORK
OTHER SERVICES
- ---------------
BSA ADVERTISING INC PROVIDE ADVERTISING SERVICES FOR MILLSTONE
BURSON MARSTELLER PROVIDE CONSULTING COMMUNICATION SERVICES
COOPERS & LYBRAND CONSULTING FINANCIAL SERVICES
INVESTCONSULT INC HUMAN RESOURCES CONSULTING AT MILLSTONE
THE WINN COMPANY CONSULTING, MEDIA TRAINING, VIDEO PRODUCTION
</TABLE>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANUY
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
EMPLOYEE PENSIONS AND BENEFITS
ACCOUNT 926
INSTRUCTIONS: Provide a listing of each pension plan and benefit
program provided by the service company. Such
listing should be limited to $25,000.
- ------------------------------------------------------------------------
DESCRIPTION AMOUNT
- ------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
Pension Plan $6,299
Supplemental Retirement and Savings Plan 3,529
Post Retirement Medical Benefit - FAS 106 2,266
Early Retirement Program (50)
Group Life, Long-term Disability, Hospital
and Medical Insurance Expenses 6,923
Other Employee Benefits Expenses 12
---------
TOTAL $18,979
=========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
GENERAL ADVERTISING EXPENSES
ACCOUNT 930.1
INSTRUCTIONS: Provide a listing of the amount included in Account 930.1,
"General Advertising Expenses," classifying the items
according to the nature of the advertising and as
defined in the account definition. If a particular class
includes an amount in excess of $3,000 applicable to a
single payee, show separately the name of the payee and
the aggregate amount applicable thereto.
- ------------------------------------------------------------------------------
DESCRIPTION NAME OF PAYEE AMOUNT
- ------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
---------
TOTAL $ -
=========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
MISCELLANEOUS GENERAL EXPENSES
ACCOUNT 930.2
INSTRUCTIONS: Provide a listing of the amount included in Account 930.2,
"Miscellaneous General Expenses," classifying such expenses
according to their nature. Payments and expenses permitted
by Sections 321(b)(2) of the Federal Election Campaign Act,
as amended by Public Law 94-283 in 1976 (2 U.S.C.
Sections 441(b)(2)) shall be separately classified.
- --------------------------------------------------------------------------
DESCRIPTION AMOUNT
- --------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
Services billed from Northeast Utilities Service $946
Company (an associate company)
Other miscellaneous expenses 1
---------
TOTAL $947
=========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
RENTS
INSTRUCTIONS: Provide a listing of the amount included in Account 931,
"Rents," classifying such expenses by major groupings of
property, as defined in the account definition of the
Uniform System of Accounts.
- ---------------------------------------------------------------------------
TYPE OF PROPERTY AMOUNT
- ---------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
Buildings/office space 132
Computer/office equipment 179
Vehicles 1,203
Simulator 5,284
Services billed from Northeast Utilities Service
Company (an associate company) 4,456
---------
TOTAL 11,254
=========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408
INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other Than
Income Taxes." Separate the analysis into two groups:
(1)Other than U.S. Government taxes, and (2) U.S.
Government taxes. Specify each of the various kinds of
taxes and show the amounts thereof. Provide a subtotal
for each class of tax.
- -------------------------------------------------------------------------
KIND OF TAX AMOUNT
- -------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
(1) Other Than U.S. Government Taxes:
Connecticut Unemployment $771
Connecticut Insurance Premium Excise Tax 130
Massachusetts Unemployment 8
Massachusetts Universal Health Tax 1
Local property 1,226
Connecticut Sales Tax 6
Connecticut Corporate Business Tax (408)
---------
Sub-Total 1,734
---------
(2) U.S. Government Taxes:
Federal Insurance Contribution Act 7,323
Medicare Tax 2,088
Federal Unemployment 94
---------
Sub-Total 9,505
---------
TOTAL 11,239
=========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
DONATIONS
ACCOUNT 426.1
INSTRUCTIONS: Provide a listing of the amount included in Account 426.1, "Donations,"
classifying such expenses by its purpose. The aggregate number and amount
of all items of less than $3,000 may be shown in lieu of details.
- -----------------------------------------------------------------------------------------
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
- -----------------------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C>
Services billed from Northeast Utilities $19
Service Company (an associate company)
The Salvation Army 5
----------
TOTAL $24
==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
OTHER DEDUCTIONS
ACCOUNT 426.5
INSTRUCTIONS: Provide a listing of the amount included in Account 426.5,
"Other Deductions," classifying such expenses according
to their nature.
- ---------------------------------------------------------------------------
DESCRIPTION NAME OF PAYEE AMOUNT
- ---------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C>
Executive incentive
compensation plan Various Officers $862
Services billed from Northeast
Utilities Service Company
(an associate company) 1,071
Civil Penalties United States Nuclear
Regulatory Commission 2,155
Communication services Miscellaneous (46 payees) 32
Miscellaneous (2 items) 1
--------
TOTAL $4,121
========
</TABLE>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1997
SCHEDULE XVIII
NOTES TO STATEMENTS OF INCOME
INSTRUCTIONS: The space below is provided for important notes regarding the
statement of income or any account thereof. Furnish
particulars as to any significant increases in services
rendered or expenses incurred during the year. Notes relating
to financial statements shown elsewhere in this report may be
indicated here by reference.
See Notes to Financial Statements on pages 19 through 19E.
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
ORGANIZATION CHART (AS OF DECEMBER 31, 1997)
President and Chief Executive Officer - Nuclear
- Senior Vice President and Chief Nuclear Officer - Millstone
- Recovery Officer (Millstone Unit #1)
- Recovery Officer (Millstone Unit #2)
- Vice President (Millstone Unit #3)
NORTHEAST NUCLEAR ENERGY COMPANY
--------------------------------
METHODS OF ALLOCATION
---------------------
For the year ended December 31, 1997
------------------------------------
The costs associated with the three Millstone units are billed
directly or allocated using one of three methods. The allocation
methods are as follows:
1. One-third to each unit;
2. Number of employees;
3. Net capacity of each unit.
If Millstone Unit 3 is not part of the allocation, then the allocated
costs to Millstone 1 and 2 are on the basis of one-half to each of the
two units.
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
The following annual statement was supplied to each associate company in
support of the amount of compensation for use of capital billed during 1997:
In accordance with Instruction 01-12 of the Securities and
Exchange Commission's Uniform System of Accounts for Mutual
Service Companies and Subsidiary Service Companies, Northeast
Nuclear Energy Company submits the following information on
the billing of interest on borrowed funds and a return on
equity capital to associated companies for the year 1997:
(A) Amount of compensation for use of capital billed to (See Note)
(B) The basis for billing of interest and return on equity
capital to the associated companies is based on the
percentage ownership of the individual units.
NOTE: For the associate companies and amounts, see "Analysis of Billing -
Associate Companies" on page 21.
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
SIGNATURE CLAUSE
Pursuant to the requirements of the Public Utility Holding Company Act of 1935
and the rules and regulations of the Securities and Exchange Commission issued
thereunder, the undersigned company has duly caused this report to be signed on
its behalf by the undersigned officer thereunto duly authorized.
NORTHEAST NUCLEAR ENERGY COMPANY
(Name of Reporting Company)
By: /s/ John J. Roman
(Signature of Signing Officer)
John J. Roman - Vice President and Controller
(Printed Name and Title of Signing Officer)
Date: April 23, 1998
<TABLE> <S> <C>
<ARTICLE>OPUR2
<CIK>0000310418
<NAME>NORTHEAST NUCLEAR ENERGY COMPANY
<MULTIPLIER>1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-END> DEC-31-1997 DEC-31-1996
<BOOK-VALUE> PER-BOOK PER-BOOK
<NET-SERVICE-COMPANY-PROPERTY> 28,919 28,471
<TOTAL-INVESTMENTS> 0 0
<TOTAL-CURRENT-ASSETS> 227,988 187,978
<TOTAL-DEFERRED-DEBITS> 36,372 21,713
<OTHER-ASSETS-AND-DEBITS> 0 0
<TOTAL-ASSETS-AND-DEBITS> 293,279 238,162
<TOTAL-PROPRIETARY-CAPITAL> 16,229 16,232
<TOTAL-LONG-TERM-DEBT> 18,033 24,182
<NOTES-PAYABLE> 0 0
<NOTES-PAYABLE-ASSOCIATE-COMP> 0 0
<OTHER-CURR-AND-ACCRUED-LIAB> 240,606 180,912
<TOTAL-DEFERRED-CREDITS> 18,411 16,836
<DEFERRED-INCOME-TAX> 0 0
<TOT-LIABIL-AND-PROPRIET-CAP> 293,279 238,162
<SERVICES-ASSOCIATE-COMPANIES> 631,692 409,581
<SERVICES-NON-ASSOCIATE-COMP> 102,883 62,279
<MISC-INCOME-OR-LOSS> 4,981 2,505
<TOTAL-INCOME> 739,556 474,365
<SALARIES-AND-WAGES> 116,352 86,317
<EMPLOYEE-PENSION-AND-BENEFIT> 18,979 23,571
<OTHER-EXPENSES> 602,227 362,545
<TOTAL-EXPENSES> 737,558 472,433
<NET-INCOME> 1,998 1,932
<TOTAL-EXPENSES-DIRECT-COST> 734,411 469,504
<TOTAL-EXPENSES-INDIRECT-COST> 0 0
<TOT-EXP-DIRECT-AND-INDIRECT> 734,411 469,504
<PERSONNEL-END-OF-YEAR> 1,647 1,274
</TABLE>
