Form U -13 - 60
Mutual and Subsidiary Service Companies
ANNUAL REPORT
FOR THE PERIOD
Beginning January 1, 1998 and Ending December 31, 1998
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
(S210.3-0.1(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, (S210.3-0.1(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 10
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 Account 920 26
OUTSIDE SERVICES EMPLOYED Account 923 27
EMPLOYEE PENSIONS AND BENEFITS Account 926 28
GENERAL ADVERTISING EXPENSES Account 930.1 29
MISCELLANEOUS GENERAL EXPENSES Account 930.2 30
RENTS Account 931 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
------- --------------------------------------------------------- ------------ ---------
1998 1997
SERVICE COMPANY PROPERTY (Thousands of Dollars)
------------------------
<S> <C> <C>
101 Service company property (Schedule II) $ 39,152 $ 39,152
107 Construction work in progress (Schedule II) 6,199 2,634
---------- ---------
Total Property 45,351 41,786
---------- ---------
108 Less accumulated provision for depreciation and
amortization of service company property (Schedule III) 14,527 12,867
---------- ---------
Net Service Company Property 30,824 28,919
---------- ---------
INVESTMENTS
-----------
123 Investments in associate companies (Schedule IV) - -
124 Other investments (Schedule IV) - -
---------- ---------
Total Investments - -
---------- ---------
CURRENT AND ACCRUED ASSETS
--------------------------
131 Cash 776 -
134 Special deposits - -
135 Working funds 2 2
136 Temporary cash investments (Schedule IV) - -
141 Notes receivable - 2
143 Accounts receivable 4,388 5,255
144 Accumulated provision of uncollectible accounts - -
146 Accounts receivable from associate companies (Schedule V) 71,688 152,978
152 Fuel stock expenses undistributed (Schedule VI) - -
154 Materials and supplies 68,787 65,829
163 Stores expense undistributed (Schedule VII) (6) 310
165 Prepayments 1,675 3,612
174 Miscellaneous current and accrued assets (Schedule VIII) - -
---------- ---------
Total Current and Accrued Assets 147,310 227,988
---------- ---------
DEFERRED DEBITS
---------------
181 Unamortized debt expense 87 125
184 Clearing accounts 198 377
186 Miscellaneous deferred debits (Schedule IX) 10,318 15,231
188 Research, development, or demonstration
expenditures (Schedule X) - -
189 Unamortized loss on reacquired debt - 263
190 Accumulated deferred income taxes 24,503 20,376
---------- ---------
Total Deferred Debits 35,106 36,372
---------- ---------
TOTAL ASSETS AND OTHER DEBITS $ 213,240 $ 293,279
========== =========
</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
------- --------------------------------------------------------- ------------ ---------
1998 1997
PROPRIETARY CAPITAL (Thousands of Dollars)
-------------------
<S> <C> <C>
201 Common stock issued (Schedule XI) $ 15 $ 15
211 Miscellaneous paid-in-capital (Schedule XI) 15,229 15,350
215 Appropriated retained earnings (Schedule XI) - -
216 Unappropriated retained earnings (Schedule XI) 923 864
---------- ---------
Total Proprietary Capital 16,167 16,229
---------- ---------
LONG-TERM DEBT
--------------
223 Advances from associate companies (Schedule XII) - -
224 Other long-term debt (Schedule XII) 12,022 18,033
225 Unamortized premium on long-term debt - -
226 Unamortized discount on long-term debt-debit - -
---------- ---------
Total Long-Term Debt 12,022 18,033
---------- ---------
CURRENT AND ACCRUED LIABILITIES
-------------------------------
231 Notes payable - -
232 Accounts payable 48,667 116,130
233 Notes payable to associate companies (Schedule XIII) - -
234 Accounts payable to associate companies (Schedule XIII) 2,089 22,716
236 Taxes accrued 11,534 13,742
237 Interest accrued - -
238 Dividends declared - -
241 Tax collections payable 975 921
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 103,345 87,097
---------- ---------
Total Current and Accrued Liabilities 166,610 240,606
---------- ---------
DEFERRED CREDITS
----------------
253 Other deferred credits 17,330 17,235
255 Accumulated deferred investment tax credits 1,111 1,176
---------- ---------
Total Deferred Credits 18,441 18,411
---------- ---------
282 ACCUMULATED DEFERRED INCOME TAXES - -
--------------------------------- ---------- ---------
TOTAL LIABILITES AND PROPRIETARY CAPITAL $ 213,240 $ 293,279
========== =========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 $33,282 $33,282
322 REACTOR PLANT EQUIPMENT
324 ACCESSORY ELECTRIC EQUIPMENT 27 27
325 MISCELLANEOUS POWER PLANT
EQUIPMENT 4,575 4,575
391 OFFICE FURNITURE AND EQUIPMENT 1,268 1,268
---------- --------- ----------- ---------- ----------
SUB-TOTAL 39,152 39,152
---------- --------- ----------- ---------- ----------
107 CONSTRUCTION WORK IN
PROGRESS (4) 2,634 3,565 6,199
---------- --------- ----------- ---------- ----------
TOTAL $41,786 $3,565 $0 $0 $45,351
========== ========= =========== ========== ==========
- -------------------------------------------------------------------------------------------
(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, 1998
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 9,178 1,384 0 0 10,562
322 REACTOR PLANT EQUIPMENT 0 0 0 0 0
324 ACCESSORY ELECTRIC EQUIPMENT 14 0 0 0 14
325 MISCELLANEOUS POWER PLANT
EQUIPMENT 2,930 360 0 (108) 3,182
391 OFFICE FURNITURE AND FIXTURES 745 24 0 0 769
---------- --------- ----------- ---------- ----------
TOTAL $12,867 $1,768 $0 $(108) $14,527
========== ========= =========== ========== ==========
- ---------------------------------------------------------------------------------------------
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
Depreciation charged to clearing account $60
Removal costs charged to reserve (168)
----------
($108)
==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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> <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, 1998
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 $ 98,600 $25,900
The Connecticut Light and Power Company 43,284 36,559
Western Massachusetts Electric Company 10,144 8,572
Northeast Utilities Service Company 918 540
North Atlantic Energy Service Corporation 6 92
Public Service Company of New Hampshire 26 25
---------- ------------
TOTAL $152,978 $71,688
========== ============
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, 1998
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 $2,431
Western Massachusetts Electric Company 553
Public Service Company of New Hampshire 76
North Atlantic Energy Service Corporation 650
Northeast Utilities Service Company 2,489
------------
TOTAL $6,199
============
Convenience payments result primarily from the following items:
Engineering Services $3,994
Consulting Services 356
Computer Equipment & Supplies 291
Temporary Personnel Services 594
Miscellaneous (143 items) 964
------------
TOTAL $6,199
============
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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, 1998
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, 1998 $ 310
----------
Activity for the year:
Stores expense undistributed $ 4,567 $ 2,056 6,623
The above stores expenses are billed back
to each of the companies listed below:
The Connecticut Light & Power Company (3,428) (1,543) (4,971)
Western Massachusetts Electric Company (801) (362) (1,163)
Public Service Company of New Hampshire (45) (20) (65)
Nonassociate Companies (see page 22
for list of the companies) (510) (230) (740)
--------- ---------- ----------
Stores expense distributed (4,784) (2,155) (6,939)
--------- ---------- ----------
Net Activity for year $ (217) $ (99) (316)
========= ========== ----------
Ending Balance as of December 31, 1998 $ (6)
==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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, 1998
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 $ 6,236
Contractual retainage 5,175 634
Financial system development costs 2,270 1,032
RABBI Trust funding 952 952
Connecticut sales tax under protest 99 99
Employee performance payments 97 -
External audit - Millstone Unit No. 3 53 53
Unfunded supplemental executive retirement plan 10 1,061
Decommissioning costs - Millstone Unit No. 1 - 231
Restricted stock - unearned compensation - 11
Other deferred debits
(3 items in 1998 and 7 items in 1997) (1) 9
----------- ----------
TOTAL $15,231 $10,318
=========== ==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 Research Dues $ 92
BWR Vessel & Internal Project 510
The above expenses are billed back to each of the
associated companies listed below:
The Connecticut Light and Power Company (413)
Western Massachusetts Electric Company (97)
Public Service Company of New Hampshire (8)
Nonassociate Companies (see page 22 for list
of the companies) (84)
-------------
TOTAL $ 0
=============
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 $15,229
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS -
---------
TOTAL $15,229
=========
- ------------------------------------------------------------------------------------------
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 $864 $2,059 $2,000 $923
--------- --------- ---------- ---------
TOTAL $864 $2,059 $2,000 $923
========= ========= ========= =========
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
---------------------- ------------ ------------- ---------
$1,333.33 $2,000,000 10/14/98 12/31/98
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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> <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 $18,033 $0 $6,011 $12,022
-------------------------------------------------------
TOTAL OTHER LONG-TERM DEBT $25,000 $18,033 $0 $6,011 $12,022
=======================================================
(1) GIVE AN EXPLANATION OF DEDUCTIONS:
Principal payment.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 $ 1,600 $ 1,092
Western Massachusetts Electric Company 46 47
Northeast Utilities Service Company 20,639 750
Northeast Utilities 180 195
Public Service Company of New Hampshire 210 -
North Atlantic Energy Service Corporation 41 5
----------- ----------
TOTAL $22,716 $ 2,089
=========== ==========
- ------------------------------------------------------------------------------------------
ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES
Millstone 3 Funding Liability $39,801 $ 51,304
Pension Cost 35,855 42,075
VEPCO and PECO Incentive Fees 4,752 -
Performance Reward Program 3,485 6,310
Payroll Accrual 2,748 3,819
Severance Accrual 481 (158)
Miscellaneous (2 items) (25) (5)
----------- ----------
TOTAL $87,097 $103,345
=========== ==========
</TABLE>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 Millstone nuclear generating facilities. Millstone 1 and 2
are wholly owned by CL&P and WMECO. Millstone 3 is owned by CL&P, PSNH,
WMECO and other nonaffiliated utilities. The costs of the nuclear units are
recorded on the books of CL&P, PSNH, WMECO and the nonaffiliated utilities
are in 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) provides 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 NNECO, 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 4.6 percent in 1998 and 4.5 percent in 1997.
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 1998 and 1997 amounted to
approximately $4.8 million each year for capital lease rental payments and
$5.1 million and $6.1 million, respectively, for operating lease rental
payments.
Interest included in capital lease rental payments for 1998 and 1997 was
approximately $1.2 million and $1.6 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, 1998, are approximately:
Period Capital Leases Operating Leases
(Thousands of Dollars)
1999 $4,100 $220
2000 3,800 150
2001 1,700 60
2002 - 30
2003 - 20
After 2003 - 20
Future minimum lease payments 9,600 $500
Less amount representing interest 1,300
Present value of future minimum
lease payments $8,300
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, 1998 and 1997,
NNECO had no borrowings outstanding under the Pool.
4. LONG-TERM DEBT
Detail of long-term debt outstanding is:
December 31, 1998 1997
(Thousands of Dollars)
7.67% Senior Notes, due 2000 $12,022 $18,033
Less: Amounts due within one year 6,011 6,011
Long-term debt, net $ 6,011 $12,022
Cash sinking-fund requirements on debt outstanding at December 31, 1998 are
approximately $6,011,000 for 1999 and $5,776,000 for 2000. There are no cash
sinking-fund requirements after 2000.
5. PENSION BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The NU system subsidiaries, including NNECO, participate in a uniform
noncontributory defined benefit retirement plan covering all regular NU
system employees. Benefits are based on years of service and the 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 utility plant, approximated $6.2 million in 1998 and $5.4 million
in 1997.
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.
The NU system subsidiaries, including NNECO, also provide certain health care
benefits, primarily medical and dental, and life insurance benefits through a
benefit plan to retired employees. These benefits are available for
employees retiring from the NU system who have met specified service
requirements. For current employees and certain retirees, the total benefit
is limited to two times the 1993 per-retiree health care cost. These costs
are charged to expense over the future estimated worklife of the employee.
NNECO is funding postretirement costs through external trusts. NNECO is
funding, on an annual basis, amounts that are tax-deductible under the
Internal Revenue Code.
Pension and trust assets are invested primarily in domestic and international
equity securities and bonds.
The following table represents the plans' beginning benefit obligation
balance reconciled to the ending benefit obligation balance, beginning fair
value of plan assets balance reconciled to the ending fair value of plan
assets balance and the respective funds' funded status reconciled to the
Balance Sheets:
The components of net cost are:
At December 31,
Pension Benefits Postretirement Benefits
1998 1997 1998 1997
(Thousands of Dollars)
Change in benefit obligation
Benefit obligation at beginning
of year $(111,394) $(107,001) $(15,178) $(16,389)
Service cost (7,163) (5,572) (1,038) (689)
Interest cost (8,631) (7,715) (1,289) (1,072)
Transfers (5,397) 1,190 - -
Actuarial (loss)/gain (10,220) 4,897 (2,766) 2,263
Benefits paid 2,826 2,827 1,017 709
Benefit obligation at end of year $(139,979) $(111,394) $(19,254) $(15,178)
Change in plan assets
Fair value of plan assets at
beginning of year $ 103,949 $ 89,828 $ 10,008 $ 7,881
Actual return on plan assets 14,492 18,138 1,290 1,599
Employer contribution - - 1,634 1,237
Benefits paid (2,826) (2,827) (1,017) (709)
Transfers 5,397 (1,190) - -
Fair value of plan assets at end
of year $121,012 $103,949 $11,915 $10,008
Funded status at December 31 $(18,967) $ (7,445) $(7,339) $(5,170)
Unrecognized transition amount (1,439) (1,584) 3,882 4,159
Unrecognized prior service cost 3,546 3,804 - -
Unrecognized net gain (25,215) (30,630) 3,457 1,011
Accrued benefit cost $ (42,075) $(35,855) $ - $ -
The following actuarial assumptions were used in calculating the plans' year-end
funded status:
At December 31,
Pension Benefits Postretirement Benefits
1998 1997 1998 1997
Discount rate 7.00% 7.25% 7.00% 7.25%
Compensation/progression rate 4.25% 4.25% 4.25% 4.25%
Health care cost trend rate (a) N/A N/A 5.22% 5.76%
(a) The annual growth in per capita cost of covered health care benefits was
assumed to decrease to 4.40 percent by 2001.
The components of net periodic benefit cost are:
For the Years Ended December 31,
Pension Benefits Postretirement Benefits
1998 1997 1998 1997
(Thousands of Dollars)
Service cost $ 7,163 $ 5,572 $1,038 $ 689
Interest cost 8,631 7,715 1,289 1,072
Expected return on plan assets (8,848) (7,269) (747) (552)
Amortization of unrecognized
transition (asset)/obligation (145) (145) 277 277
Amortization of prior service cost 258 258 - -
Amortization of actuarial gain (838) (727) - -
Other amortization, net - - (223) (250)
Net periodic benefit cost $ 6,221 $ 5,404 $1,634 $1,236
For calculating pension and postretirement benefit costs, the following
assumptions were used:
For the Years Ended December 31,
Pension Benefits Postretirement Benefits
1998 1997 1998 1997
Discount rate 7.25% 7.75% 7.25% 7.75%
Expected long-term rate of return 9.50% 9.25% N/A N/A
Compensation/ progression rate 4.25% 4.75% 4.25% 4.75%
Long-term rate of return-
Health assets, net of tax N/A N/A 7.75% 7.50%
Life assets N/A N/A 9.50% 9.25%
Assumed health care cost trend rates have a significant effect on the amounts
reported for the health care plans. The effect of changing the assumed health
care cost trend rate by one percentage point in each year would have the
following effects:
One Percentage One Percentage
(Thousands of Dollars) Point Increase Point Decrease
Effect on total service and
interest cost components $ 87 $ (99)
Effect on postretirement
benefit obligation 727 (833)
The trust holding the health plan assets is subject to federal income taxes at
a 39.6 percent tax rate.
6. NUCLEAR PERFORMANCE
All three Millstone units were placed on the NRC watch list on January 29,
1996. The units cannot be restarted without appropriate NRC approvals.
Millstone 3 has received these approvals and resumed operation in July 1998.
Restart efforts continue for Millstone 2 and it is expected to be ready to
restart in the spring of 1999. The estimated replacement power costs are
approximately $8 million per month while Millstone 2 remains out of service.
In July 1998, CL&P and WMECO decided to retire Millstone 1 and prepare for
final decommissioning.
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
FOR THE YEAR ENDED DECEMBER 31, 1998
SCHEDULE XV
COMPARATIVE INCOME STATEMENT
- ---------------------------------------------------------------------------------------
ACCOUNT DESCRIPTION 1998 1997
- ---------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
INCOME
------
457 Services rendered to associate companies $470,221 $631,692
458 Services rendered to nonassociate companies 61,445 102,883
421 Miscellaneous income or loss 2,848 4,981
------------ -----------
Total Income 534,514 739,556
------------ -----------
EXPENSE
-------
Nuclear Power Expenses
517 Operation Supervision and Engineering 94,451 140,209
519 Coolants and Water 4,743 4,410
520 Steam Expenses 27,362 30,906
523 Electric Expenses 10,540 11,807
524 Miscellaneous Nuclear Power Expenses 78,377 74,041
525 Rents 5,725 5,579
528 Maintenance Supervision and Engineering 69,036 85,234
529 Maintenance of Structures 14,332 14,799
530 Maintenance of Reactor Plant Equipment 88,581 162,792
531 Maintenance of Electric Plant 51,885 115,900
532 Maintenance of Miscellaneous Nuclear Plant 500 663
Transmission Expenses
560 Operation Supervision and Engineering 0 0
562 Station Expenses 1,468 1,565
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 12,469 12,177
921 Office supplies and expenses 6,969 8,153
922 Administrative expense transferred-credit 0
923 Outside services employed 16,469 18,588
924 Property insurance 1,098 (1,227)
925 Injuries and damages 4,462 4,296
926 Employee pensions and benefits 20,758 18,979
928 Regulatory commission expense 15 90
930.1 General advertising expenses 0 0
930.2 Miscellaneous general expenses 398 947
931 Rents 3,002 4,434
932 Maintenance of structures and equipment 601 639
All other expenses
403 Depreciation and amortization expense 1,768 1,623
408 Taxes other than income taxes 12,860 11,239
409 Income taxes 1,798 7,975
410 Provision for deferred income taxes 1,467 837
411 Provision for deferred income taxes-credit (5,509) (5,989)
411.5 Investment tax credit (65) (65)
426.1 Donations 32 24
426.5 Other deductions 4,195 4,121
427 Interest on long-term debt 1,921 2,007
430 Interest on debt to associate companies 0 0
431 Other interest expense 747 805
------------ -----------
Total Expense 532,455 737,558
------------ -----------
Net Income $ 2,059 $ 1,998
============ ===========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
- ------------------------------------------------------------------------------
DIRECT INDIRECT COMPENSATIO 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 $372,882 $3,873 $376,755
Western Massachusetts
Electric Company 87,127 906 88,033
Public Service Company
of New Hampshire 5,398 35 5,433
---------- ---------- ----------- ----------
TOTAL $465,407 $0 $4,814 $470,221
========== ========== =========== ==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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> <C> <C> <C> <C> <C> <C>
Connecticut Yankee Atomic
Power Company $ 155 0 $ 155 $ 0 $ 155
Central Maine Power Company 4,740 31 4,771 4,771
Central Vermont Public Service 3,287 21 3,308 3,308
Montaup Electric Co. 7,594 49 7,643 7,643
New England Power Co. 23,238 150 23,388 23,388
United Illuminating Company 6,978 44 7,022 7,022
Fitchburg Gas & Electric Co. 413 3 416 416
Chicopee Municipal Electric 2,594 17 2,611 2,611
Massachusetts Municipal
Wholesale 9,197 59 9,256 9,256
Lyndonville Electric Department 93 1 94 94
Connecticut Municipal Electric
Coop 2,078 13 2,091 2,091
Vermont Electric Gen & Trans. 686 4 690 690
-------------------------------------------------------------
$ 61,053 $ 0 $ 392 $ 61,445 $ 0 $ 61,445
=============================================================
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, 1998
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 $ 84,996 $ 0 $ 84,996
519 COOLANTS AND WATER 4,056 0 4,056
520 STEAM EXPENSES 23,642 0 23,642
523 ELECTRIC EXPENSES 9,168 0 9,168
524 MISCELLANEOUS NUCLEAR POWER EXPENSES 68,311 0 68,311
525 RENTS 4,510 0 4,510
528 MAINTENANCE SUPERVISION AND ENGINEERING 60,492 0 60,492
529 MAINTENANCE OF STRUCTURES 13,580 0 13,580
530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 81,302 0 81,302
531 MAINTENANCE OF ELECTRIC PLANT 44,434 0 44,434
532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT 445 0 445
Transmission Expenses
560 OPERATION SUPERVISION AND ENGINEERING 0 0 0
562 STATION EXPENSES 120 0 120
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 10,976 0 10,976
921 OFFICE SUPPLIES AND EXPENSES 6,141 0 6,141
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0 0
923 OUTSIDE SERVICES EMPLOYED 14,507 0 14,507
924 PROPERTY INSURANCE 929 0 929
925 INJURIES AND DAMAGES 3,728 0 3,728
926 EMPLOYEE PENSIONS AND BENEFITS 18,292 0 18,292
928 REGULATORY COMMISSION EXPENSE 13 0 13
930.1 GENERAL ADVERTISING EXPENSES 0 0 0
930.2 MISCELLANEOUS GENERAL EXPENSES 352 0 352
931 RENTS 2,645 0 2,645
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT 524 0 524
All other expenses 0
403 DEPRECIATION AND AMORTIZATION EXPENSES 1,572 0 1,572
408 TAXES OTHER THAN INCOME TAXES 11,256 0 11,256
409 INCOME TAXES 1,804 0 1,804
410 PROVISION FOR DEFERRED INCOME TAXES 1,467 0 1,467
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT (5,509) 0 (5,509)
411.5 INVESTMENT TAX CREDIT (65) 0 (65)
426.1 DONATIONS 29 0 29
426.5 OTHER DEDUCTIONS 3,679 0 3,679
427 INTEREST ON LONG-TERM DEBTS 0 0 0
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0 0 0
431 OTHER INTEREST EXPENSE 747 0 747
--------------------------
SUBTOTAL EXPENSES = $468,143 $ 0 $468,143
COMPENSATION FOR USE OF CAPITAL=
427 INTEREST ON LONG-TERM DEBTS 1,921
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0
431 OTHER INTEREST EXPENSE 0
525 RENTS 833
---------
TOTAL EXPENSES = $470,897
421 MISCELLANEOUS INCOME - CREDIT (2,735) 0 (2,735)
NET INCOME 2,059
--------------------------
TOTAL COST OF SERVICE = $465,408 $ 0 $470,221
==========================
INSTRUCTION: Total cost of service will
equal for associate and nonassociate
companies the total amount billed under
their separate analysis of billing
schedules.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 $ 9,455 $ 0 $ 9,455
519 COOLANTS AND WATER 687 0 687
520 STEAM EXPENSES 3,720 0 3,720
523 ELECTRIC EXPENSES 1,372 0 1,372
524 MISCELLANEOUS NUCLEAR POWER EXPENSES 10,066 0 10,066
525 RENTS (10) 0 (10)
528 MAINTENANCE SUPERVISION AND ENGINEERING 8,544 0 8,544
529 MAINTENANCE OF STRUCTURES 752 0 752
530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 7,279 0 7,279
531 MAINTENANCE OF ELECTRIC PLANT 7,451 0 7,451
532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT 55 0 55
Transmission Expenses
560 OPERATION SUPERVISION AND ENGINEERING 0 0 0
562 STATION EXPENSES 1,348 0 1,348
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 1,493 0 1,493
921 OFFICE SUPPLIES AND EXPENSES 828 0 828
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0 0
923 OUTSIDE SERVICES EMPLOYED 1,962 0 1,962
924 PROPERTY INSURANCE 169 0 169
925 INJURIES AND DAMAGES 734 0 734
926 EMPLOYEE PENSIONS AND BENEFITS 2,466 0 2,466
928 REGULATORY COMMISSION EXPENSE 2 0 2
930.1 GENERAL ADVERTISING EXPENSES 0 0 0
930.2 MISCELLANEOUS GENERAL EXPENSES 46 0 46
931 RENTS 357 0 357
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT 77 0 77
All other expenses 0
403 DEPRECIATION AND AMORTIZATION EXPENSES 196 0 196
408 TAXES OTHER THAN INCOME TAXES 1,604 0 1,604
409 INCOME TAXES (6) 0 (6)
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 516 0 516
427 INTEREST ON LONG-TERM DEBTS 0 0 0
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0 0 0
431 OTHER INTEREST EXPENSE 0 0 0
----------------------------
SUBTOTAL EXPENSES = $61,166 $ 0 $61,166
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 392
------------
TOTAL EXPENSES = $61,558
421 MISCELLANEOUS INCOME - CREDIT (113) 0 (113)
NET INCOME 0
-----------------------------
TOTAL COST OF SERVICE = $61,053 0 $61,445
=============================
INSTRUCTION: Total cost of service will
equal for associate and nonassociate
companies the total amount billed under
their separate analysis of billing
schedules.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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> <C> <C>
Nuclear Power Expenses
517 OPERATION SUPERVISION AND ENGINEERING $ 94,451 $ 0 $ 94,451
519 COOLANTS AND WATER 4,743 0 4,743
520 STEAM EXPENSES 27,362 0 27,362
523 ELECTRIC EXPENSES 10,540 0 10,540
524 MISCELLANEOUS NUCLEAR POWER EXPENSES 78,377 0 78,377
525 RENTS 4,500 0 4,500
528 MAINTENANCE SUPERVISION AND ENGINEERING 69,036 0 69,036
529 MAINTENANCE OF STRUCTURES 14,332 0 14,332
530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 88,581 0 88,581
531 MAINTENANCE OF ELECTRIC PLANT 51,885 0 51,885
532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT 500 0 500
Transmission Expenses
560 OPERATION SUPERVISION AND ENGINEERING 0 0 0
562 STATION EXPENSES 1,468 0 1,468
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 12,469 0 12,469
921 OFFICE SUPPLIES AND EXPENSES 6,969 0 6,969
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0 0
923 OUTSIDE SERVICES EMPLOYED 16,469 0 16,469
924 PROPERTY INSURANCE 1,098 0 1,098
925 INJURIES AND DAMAGES 4,462 0 4,462
926 EMPLOYEE PENSIONS AND BENEFITS 20,758 0 20,758
928 REGULATORY COMMISSION EXPENSE 15 0 15
930.1 GENERAL ADVERTISING EXPENSES 0 0 0
930.2 MISCELLANEOUS GENERAL EXPENSES 398 0 398
931 RENTS 3,002 0 3,002
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT 601 0 601
All other expenses
403 DEPRECIATION AND AMORTIZATION EXPENSES 1,768 0 1,768
408 TAXES OTHER THAN INCOME TAXES 12,860 0 12,860
409 INCOME TAXES 1,798 0 1,798
410 PROVISION FOR DEFERRED INCOME TAXES 1,467 0 1,467
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT (5,509) 0 (5,509)
411.5 INVESTMENT TAX CREDIT (65) 0 (65)
426.1 DONATIONS 32 0 32
426.5 OTHER DEDUCTIONS 4,195 0 4,195
427 INTEREST ON LONG-TERM DEBTS 0 0 0
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0 0 0
431 OTHER INTEREST EXPENSE 747 0 747
------------------------------
SUBTOTAL EXPENSES = $529,309 $ 0 $529,309
COMPENSATION FOR USE OF CAPITAL=
427 INTEREST ON LONG-TERM DEBTS 1,921
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0
431 OTHER INTEREST EXPENSE 0
525 RENTS 1,225
----------
TOTAL EXPENSES = $532,455
421 MISCELLANEOUS INCOME - CREDIT (2,848) 0 (2,848)
NET INCOME 2,059
------------------------------
TOTAL COST OF SERVICE = $526,461 $ 0 $531,666
==============================
INSTRUCTION: Total cost of service will
equal for associate and nonassociate
companies the total amount billed under
their separate analysis of billing
schedules.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 $ 94,451 $ 0
519 COOLANTS AND WATER 4,743 0
520 STEAM EXPENSES 27,362 0
523 ELECTRIC EXPENSES 10,540 0
524 MISCELLANEOUS NUCLEAR POWER EXPENSES 78,377 0
525 RENTS 5,725 1,225
528 MAINTENANCE SUPERVISION AND ENGINEERING 69,036 0
529 MAINTENANCE OF STRUCTURES 14,332 0
530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 88,581 0
531 MAINTENANCE OF ELECTRIC PLANT 51,885 0
532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT 500 0
Transmission Expenses
560 OPERATION SUPERVISION AND ENGINEERING 0 0
562 STATION EXPENSES 1,468 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 12,469 0
921 OFFICE SUPPLIES AND EXPENSES 6,969 0
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0
923 OUTSIDE SERVICES EMPLOYED 16,469 0
924 PROPERTY INSURANCE 1,098 0
925 INJURIES AND DAMAGES 4,462 0
926 EMPLOYEE PENSIONS AND BENEFITS 20,758 0
928 REGULATORY COMMISSION EXPENSE 15 0
930.1 GENERAL ADVERTISING EXPENSES 0 0
930.2 MISCELLANEOUS GENERAL EXPENSES 398 0
931 RENTS 3,002 0
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT 601 0
All other expenses
403 DEPRECIATION AND AMORTIZATION EXPENSES 1,768 0
408 TAXES OTHER THAN INCOME TAXES 12,860 0
409 INCOME TAXES 1,798 0
410 PROVISION FOR DEFERRED INCOME TAXES 1,467 0
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT (5,509) 0
411.5 INVESTMENT TAX CREDIT (65) 0
426.1 DONATIONS 32 0
426.5 OTHER DEDUCTIONS 4,195 0
427 INTEREST ON LONG-TERM DEBTS 1,921 1,921
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0 0
431 OTHER INTEREST EXPENSE 747 0
----------------------
TOTAL EXPENSES = $532,455 $3,146
======================
INSTRUCTIONS: Indicate each department or
service function. (See Instruction 01-3
General Structure of Accounting System:
Uniform System of Accounts)
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 $19,329 $ 45,565 $ 29,557
519 COOLANTS AND WATER 1,068 1,528 2,147
520 STEAM EXPENSES 5,627 10,104 11,631
523 ELECTRIC EXPENSES 2,450 3,800 4,290
524 MISCELLANEOUS NUCLEAR POWER EXPENSES 21,257 26,848 30,272
525 RENTS 1,500 1,666 1,334
528 MAINTENANCE SUPERVISION AND ENGINEERING 7,545 34,781 26,710
529 MAINTENANCE OF STRUCTURES 1,844 10,135 2,353
530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 1,523 64,296 22,762
531 MAINTENANCE OF ELECTRIC PLANT 3,604 24,984 23,297
532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT 164 164 172
Transmission Expenses
560 OPERATION SUPERVISION AND ENGINEERING 0 0 0
562 STATION EXPENSES 0 0 1,468
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 3,665 4,083 4,721
921 OFFICE SUPPLIES AND EXPENSES 2,137 2,235 2,597
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0 0
923 OUTSIDE SERVICES EMPLOYED 4,022 3,934 8,513
924 PROPERTY INSURANCE 269 301 528
925 INJURIES AND DAMAGES 607 1,561 2,294
926 EMPLOYEE PENSIONS AND BENEFITS 6,286 6,756 7,716
928 REGULATORY COMMISSION EXPENSE 4 4 7
930.1 GENERAL ADVERTISING EXPENSES 0 0 0
930.2 MISCELLANEOUS GENERAL EXPENSES 131 124 143
931 RENTS 930 955 1,117
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT 164 196 241
All other expenses
403 DEPRECIATION AND AMORTIZATION EXPENSES 719 491 558
408 TAXES OTHER THAN INCOME TAXES 3,807 4,127 4,926
409 INCOME TAXES 908 908 (18)
410 PROVISION FOR DEFERRED INCOME TAXES 734 733 0
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT (2,755) (2,754) 0
411.5 INVESTMENT TAX CREDIT (32) (33) 0
426.1 DONATIONS 10 11 11
426.5 OTHER DEDUCTIONS 1,054 1,528 1,613
427 INTEREST ON LONG-TERM DEBTS 0 0 0
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 0 0 0
431 OTHER INTEREST EXPENSE 374 373 0
------------------------------------
TOTAL EXPENSES = $88,945 $249,404 $190,960
====================================
INSTRUCTIONS: Indicate each department or
service function. (See Instruction 01-3
General Structure of Accounting System:
Uniform System of Accounts)
</TABLE>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
SCHEDULE XVII
-------------
KEYS FOR SERVICE FUNCTIONS
--------------------------
KEYS SERVICE FUNCTION
---- ----------------
The individual unit for which NNECO provides
service is listed separately on Page 24.
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 $ 20,954 $ 0 $ 20,954 $ 0 $ 365
MILLSTONE UNIT #2 48,507 0 48,507 0 596
MILLSTONE UNIT #3 52,310 0 35,581 $16,729 657
--------------------------------------- ---------
$121,771 $ 0 $105,042 $16,729 $1,618
======================================= =========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
OUTSIDE SERVICES EMPLOYED
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> <C>
ENGINEERING SERVICES
- --------------------
ABB CE NUCLEAR POWER NA $ 256
BARTLETT NUCLEAR INC NA 982
CATARACT, INC. NA 1,981
CONTINGENCY MANAGEMENT ASSOCIATES NA 1,928
CONTRACT SOLUTIONS NA 449
DUKE ENGINEERING & SERVICES INC NA 817
JANUS MANAGEMENT ASSOCIATES NA 318
LITTLE HARBOR CONSULTANTS INC NA 206
MDM ENGINEERING CORP NA 262
ONSITE NA 1,606
PARSONS POWER GROUP INC NA 9,514
PECO NUCLEAR NA 3,682
RAYTHEON QUALITY PROGRAMS DIVISION NA 484
SARGENT & LUNDY, LLC NA 3,812
SECORE L L C NA 119
STONE & WEBSTER CONSTRUCTION CO. INC. NA 1,509
TEKTON RESOURCES NA 567
THE INDUS GROUP INC NA 371
VIRGINIA POWER NA 5,647
W D ASSOCIATES INC NA 346
WESTINGHOUSE ELECTRIC C0 NA 150
XCALIBER CONSULTING GROUP NA 529
YANKEE ATOMIC ELECTRIC CO NA 139
MISCELLANEOUS (22 PAYEES) NA 404
-----------
TOTAL ENGINEERING SERVICES $36,078
===========
LEGAL SERVICES
- --------------
CARMODY & TORRANCE DR NA $ 130
COWDERY & ECKER LLC NA 117
DAY BERRY & HOWARD NA 1,004
IPRO INC NA 551
KILLIAN & GEPHART NA 244
MORGAN LEWIS & BOCKIUS, LLP NA 2,967
RALPH G BIRD NA 108
ROSS DIXON & MASBACK NA 234
UPDIKE KELLY & SPELLACY NA 544
WINSTON & STRAWN NA 250
-----------
TOTAL LEGAL SERVICES $ 6,149
===========
SECURITY SERVICES
- -----------------
BURNS INTL SECURITY SERVICES NA $ 9,151
MISCELLANEOUS (1 PAYEE) NA 11
-----------
TOTAL SECURITY SERVICES $ 9,162
===========
TELECOMMUNICATION SERVICES
- --------------------------
LUCENT TECHNOLOGIES NA $ 144
SNET NA 648
MISCELLANEOUS (9 PAYEES) NA 45
-----------
TOTAL TELECOMMUNICATION SERVICES $ 837
===========
TEMPORARY EMPLOYMENT SERVICES
- -----------------------------
MANPOWER INC NA $ 606
NEW ENGLAND MECH SVC INC NA 150
NUCON NA 810
SUN TECHNICAL SERVICES INC NA 124
-----------
TOTAL TEMPORARY EMPLOYMENT SERVICES $ 1,690
===========
WATER TREATMENT SERVICES
- ------------------------
ECOLOCHEM NA $ 867
-----------
TOTAL WATER TREATMENT SERVICES $ 867
===========
COMPUTERS SERVICES
- ------------------
INDUS INTERNATIONAL INC NA $ 265
INTERGRAPH CORP NA 150
PRIDE TECHNOLOGIES INC NA 210
SCIENTECH INC NA 128
SMS SYSTEMS MAINTENANCE SERV NA 206
MISCELLANEOUS (3 PAYEES) NA 45
-----------
TOTAL COMPUTER SERVICES $ 1,004
===========
OTHER SERVICES
- --------------
IKON OFFICE SOLUTIONS INC NA $ 721
MEGAN CORP NA 211
NILSSON & ASSOCIATES NA 502
PRICEWATERHOUSECOOPERS LLP NA 229
THAMES RECORDS MANAGEMENT INC NA 127
MISCELLANEOUS (400 PAYEES) NA 4,001
-----------
TOTAL OTHER SERVICES $ 5,791
===========
NORTHEAST UTILIITES SERVICE COMPANY
(Supplies centralized accounting,
administrative, data processing,
engineering, financial, legal,
operational, planning, purchasing
and other services) A $ 5,821
===========
GRAND TOTAL $67,399
===========
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
OUTSIDE SERVICES EMPLOYED FOR PAYEES GREATER THAN $100,000
PAYEE NAME DESCRIPTION OF SERVICES RENDERED
- ----------------------------------------------------------------------------------------------------
ENGINEERING SERVICES
- --------------------
ABB CE NUCLEAR POWER COMBUSTION ENGINEERING RELATED SERVICES
BARTLETT NUCLEAR INC PROVIDE HEALTH PHYSICS AND DECONTAMINATION SERVICES
CATARACT, INC. ENGINEERING TECHNICAL SUPPORT SERVICES
CONTINGENCY MANAGEMENT ASSOC FURNISH FIRE PROTECTION SERVICES - MILLSTONE FACILITY
CONTRACT SOLUTIONS ENGINEERING RESTART ACTIVITIES ASSESSMENT
DUKE ENG & SERVICES INC ENGINEERING SUPPORT FOR THE MILLSTONE DESIGN ENGINEERING GROUP
JANUS MANAGEMENT ASSOCIATES FURNISH CONSULTING SERVICES IN CONNECTION WITH ARBITRATION ISSUES
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
PARSONS POWER GROUP INC CONSULTING SERVICES TO PROVIDE AN INDEPENDENT CORRECTIVE ACTION
VERIFICATION PROGRAM (ICAVP)
PECO NUCLEAR MANAGEMENT AND ENGINEERING CONSULTING SERVICES AT MILLSTONE
ACTIVITIES
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
STONE & WEBSTER CONST CO INC SITE MAINTENANCE AND JANITORIAL SERVICES
TEKTON RESOURCES ENGINEERING TECHNICAL SUPPORT SERVICES
THE INDUS GROUP INC PROVIDE SUPPORT CONTROL DOCUMENTATION FOR ICAVP, PROCESS REVIEW
VIRGINIA POWER MANAGEMENT AND ENGINEERING CONSULTING SERVICES AT MILLSTONE
W D ASSOCIATES INC OPERATIONS, PROCESS, REGULATORY LICENSING & ENGINEERING CONSULTING
SERVICES FOR MILLSTONE RESTART EFFORTS
WESTINGHOUSE ELECTRIC CO PROVIDE ENGINEERING SERVICES TO SUPPORT MILLSTONE RESTART
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
COWDERY & ECKER LLC FURNISH LEGAL SERVICES ON AN AS REQUESTED BASIS
DAY BERRY & HOWARD FURNISH LEGAL SERVICES ON AN AS REQUESTED BASIS
IPRO INC 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
ROSS DIXON & MASBACK FURNISH LEGAL SERVICES ON AN AS REQUESTED BASIS
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
TELECOMMUNICATION SERVICES
- --------------------------
LUCENT TECHNOLOGIES PROVIDE TELEPHONE SERVICES
SNET PROVIDE TELEPHONE SERVICES
TEMPORARY EMPLOYMENT SERVICES
- -----------------------------
MANPOWER, INC. FURNISH TEMPORARY LABOR SERVICES
NEW ENGLAND MECH SVC INC FURNISH TEMPORARY LABOR SERVICES
NUCON FURNISH TEMPORARY LABOR SERVICES
SUN TECHNICAL SERVICES INC FURNISH TEMPORARY LABOR SERVICES
WATER TREATMENT SERVICES
- -------------------------
ECOLOCHEM PROVIDE WATER TREATMENT PURIFICATION SERVICES
COMPUTER SERVICES
- -----------------
INDUS INTERNATIONAL INC CONSULTING SERVICES; SOFTWARE SUPPORT
INTERGRAPH CORP PROVIDE COMPUTER EQUIPMENT AND SUPPLIES
PRIDE TECHNOLOGIES INC PROVIDE COMPUTER EQUIPMENT AND SUPPLIES
SCIENTECH INC CONSULTING SERVICES; DATA INTERFACE AND OTHER SOFTWARE WORK
SMS SYSTEMS MAINTENANCE SERV PROVIDE COMPUTER HARDWARE MAINTENANCE
OTHER SERVICES
- ---------------
IKON OFFICE SOLUTIONS INC PROVIDE COPIERS AND MAINTENANCE
MEGAN CORP PROVIDE CONSULTING SERVICES FOR MILLSTONE
NILSSON & ASSOCIATES PROVIDE CONSULTING SERVICES FOR MILLSTONE
PRICE WATERHOUSE COOPERS LLP PROVIDE CONSULTING SERVICES FOR NORTHEAST UTILITIES' STRATEGIC
ENVIRONMENTAL PLAN
THAMES RECORDS MANAGEMENT INC PROVIDE RECORD MANAGEMENT SERVICES
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 $ 3,453
Supplemental Retirement and Savings Plan 3,816
Post Retirement Medical Benefit - FAS 106 2,971
Early Retirement Program 0
Group Life, Long-term Disability, Hospital
and Medical Insurance Expenses 10,403
Other Employee Benefits Expenses 115
---------
TOTAL $20,758
=========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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, 1998
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.
S441(b)(2)) shall be separately classified.
- --------------------------------------------------------------------------
DESCRIPTION AMOUNT
- --------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
Services billed from Northeast Utilities Service $394
Company (an associate company)
Other miscellaneous expenses 4
---------
TOTAL $398
=========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
RENTS
INSTRUCTIONS: Provide a listing of the amount included in "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 $ 80
Computer/office equipment 324
Vehicles 1,285
Simulator 5,611
Services billed from Northeast Utilities Service
Company (an associate company) 3,006
---------
TOTAL $10,306
=========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 $ 926
Connecticut Insurance Premium Excise Tax (12)
Massachusetts Unemployment 2
New Hampshire Business Enterprise Tax 2
Local property 1,294
Connecticut Sales Tax 49
Connecticut Corporate Business Tax (137)
---------
Sub-Total $ 2,124
---------
(2) U.S. Government Taxes:
Federal Insurance Contribution Act $ 8,245
Medicare Tax 2,360
Federal Unemployment 131
---------
Sub-Total $10,736
---------
TOTAL $12,860
=========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 $18
Service Company (an associate company)
Miscellaneous (4 payees) 14
----------
TOTAL $32
==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
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 $ 929
Services billed from Northeast
Utilities Service Company
(an associate company) 1,985
Civil Penalties United States Nuclear
Regulatory Commission 55
Communication services Miscellaneous (10 payees) 26
Stipulated judgment with
State of Connecticut:
Civil penalty State of Connecticut 700
Supplemental environment
projects funding to: University of Connecticut 300
Sea Research Foundation, Inc. 200
--------
TOTAL $4,195
</TABLE> ========
ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY
For the Year Ended December 31, 1998
SCHEDULE XVIII
NOTES TO STATEMENTS OF INCOME
INSTRUCTIONS: The space below is provided for important notes regarding
the financial statements 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, 1998)
President and Chief Executive Officer - Nuclear
- Senior Vice President and Chief Nuclear Officer - Millstone Station
- Millstone Unit #1
- Millstone Unit #2
- Millstone Unit #3
NORTHEAST NUCLEAR ENERGY COMPANY
--------------------------------
METHODS OF ALLOCATION
---------------------
For the year ended December 31, 1998
------------------------------------
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 1998:
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 1998:
(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 Conmmission issued
thereunder, the undersigned company has duly caused this report to be signed on
its behalf by the undersigned office 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, 1999
--------------
<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-31-1998 DEC-31-1997
<PERIOD-END> DEC-31-1998 DEC-31-1997
<BOOK-VALUE> PER-BOOK PER-BOOK
<NET-SERVICE-COMPANY-PROPERTY> 30,824 28,919
<TOTAL-INVESTMENTS> 0 0
<TOTAL-CURRENT-ASSETS> 147,310 227,988
<TOTAL-DEFERRED-DEBITS> 35,106 36,372
<OTHER-ASSETS-AND-DEBITS> 0 0
<TOTAL-ASSETS-AND-DEBITS> 213,240 293,279
<TOTAL-PROPRIETARY-CAPITAL> 16,167 16,229
<TOTAL-LONG-TERM-DEBT> 12,022 18,033
<NOTES-PAYABLE> 0 0
<NOTES-PAYABLE-ASSOCIATE-COMP> 0 0
<OTHER-CURR-AND-ACCRUED-LIAB> 166,610 240,606
<TOTAL-DEFERRED-CREDITS> 18,441 18,411
<DEFERRED-INCOME-TAX> 0 0
<TOT-LIABIL-AND-PROPRIET-CAP> 213,240 293,279
<SERVICES-ASSOCIATE-COMPANIES> 470,221 631,692
<SERVICES-NON-ASSOCIATE-COMP> 61,445 102,883
<MISC-INCOME-OR-LOSS> 2,848 4,981
<TOTAL-INCOME> 534,514 739,556
<SALARIES-AND-WAGES> 121,771 116,352
<EMPLOYEE-PENSION-AND-BENEFIT> 20,758 18,979
<OTHER-EXPENSES> 389,926 602,227
<TOTAL-EXPENSES> 532,455 737,558
<NET-INCOME> 2,059 1,998
<TOTAL-EXPENSES-DIRECT-COST> 529,309 734,411
<TOTAL-EXPENSES-INDIRECT-COST> 0 0
<TOT-EXP-DIRECT-AND-INDIRECT> 529,309 734,411
<PERSONNEL-END-OF-YEAR> 1,618 1,647
</TABLE>
