FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-6392
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PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
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(Exact name of registrant as specified in its charter)
NEW HAMPSHIRE 02-0181050
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1000 ELM STREET, MANCHESTER, NEW HAMPSHIRE 03105
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(Address of principal executive offices) (Zip Code)
(603) 669-4000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
___ ___
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at July 29, 1994
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Common Shares, $1.00 par value 1,000 shares
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
TABLE OF CONTENTS
Page No.
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Part I. Financial Information
Item 1. Financial Statements
Balance Sheets - June 30, 1994
and December 31, 1993 2
Statements of Income - Three and Six
Months Ended June 30, 1994 and 1993 4
Statements of Cash Flows -
Six Months Ended June 30, 1994 and 1993 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8
Part II. Other Information
Item 1. Legal Proceedings 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
PART I. FINANCIAL INFORMATION
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
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(Thousands of Dollars)
<S> <C> <C>
ASSETS
- ------
Utility Plant, at original cost:
Electric................................................ $ 2,014,646 $ 1,980,050
Less: Accumulated provision for depreciation......... 457,821 441,076
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1,556,825 1,538,974
Construction work in progress........................... 6,308 8,573
Nuclear fuel, net....................................... 1,578 2,107
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Total net utility plant............................. 1,564,711 1,549,654
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Other Property and Investments:
Nuclear decommissioning trusts, at market (Note 2)<F2>.. 1,672 1,486
Investments in regional nuclear generating
companies and subsidiary company, at equity............ 19,516 19,816
Other, at cost.......................................... 356 429
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21,544 21,731
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Current Assets:
Cash and special deposits............................... 404 5,995
Notes receivable from affiliated companies.............. 40,750 -
Receivables, net........................................ 70,865 76,665
Accounts receivable from affiliated companies........... 1,968 859
Accrued utility revenues................................ 31,919 35,770
Fuel, materials, and supplies, at average cost.......... 40,913 41,187
Energy adjustment clause--current portion............... 13,802 -
Prepayments and other................................... 23,598 10,429
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224,219 170,905
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Deferred Charges:
Regulatory asset--rate agreement........................ 724,453 769,498
Regulatory asset--income taxes, net..................... 62,393 54,250
Unrecovered contract obligation--YAEC................... 19,701 24,150
Energy adjustment clause................................ 137,369 122,478
Unamortized debt expense................................ 18,579 19,643
Deferred receivable from affiliated company............. 33,284 33,284
Other................................................... 8,932 8,918
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1,004,711 1,032,221
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Total Assets........................................ $ 2,815,185 $ 2,774,511
============= =============
</TABLE>
See accompanying notes to financial statements.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
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(Thousands of Dollars)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock--$1 par value.
Authorized and outstanding 1,000 shares................ $ 1 $ 1
Capital surplus, paid in................................ 421,507 421,245
Retained earnings....................................... 92,494 60,840
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Total common stockholder's equity.............. 514,002 482,086
Preferred stock subject to mandatory redemption......... 125,000 125,000
Long-term debt.......................................... 952,985 999,985
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Total capitalization........................... 1,591,987 1,607,071
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Obligations Under Seabrook Power Contract
and Other Capital Leases................................. 840,963 815,553
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Current Liabilities:
Notes payable to affiliated company..................... - 2,500
Long-term debt--current portion......................... 94,000 94,000
Obligations under capital leases--current
portion................................................ 38,851 41,006
Accounts payable........................................ 32,839 27,119
Accounts payable to affiliated companies................ 18,458 17,576
Accrued taxes........................................... 18,870 122
Accrued interest........................................ 11,223 11,142
Accrued pension benefits................................ 33,122 31,890
Other................................................... 19,727 22,014
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267,090 247,369
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Deferred Credits:
Accumulated deferred income taxes....................... 37,260 18,076
Accumulated deferred investment tax credits............. 5,894 6,174
Deferred contract obligation--YAEC...................... 19,701 24,150
Deferred revenue from affiliated company................ 33,284 33,284
Other................................................... 19,006 22,834
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115,145 104,518
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Commitments and Contingencies (Note 4)<F4>
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Total Capitalization and Liabilities........... $ 2,815,185 $ 2,774,511
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</TABLE>
See accompanying notes to financial statements.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
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1994 1993 1994 1993
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(Thousands of Dollars)
<S> <C> <C> <C> <C>
Operating Revenues................................. $ 210,875 $ 192,360 $ 460,154 $ 417,065
---------- ---------- ---------- ----------
Operating Expenses:
Operation --
Fuel, purchased and net interchange power..... 40,640 42,866 109,565 102,926
Other......................................... 80,575 70,921 151,932 140,664
Maintenance...................................... 12,153 9,126 23,909 15,831
Depreciation..................................... 9,222 9,724 19,172 19,316
Amortization of regulatory assets, net........... 14,019 22,325 28,327 44,972
Federal and state income taxes................... 12,292 11,396 31,538 29,504
Taxes other than income taxes.................... 9,586 8,869 19,882 16,308
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Total operating expenses................... 178,487 175,227 384,325 369,521
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Operating Income................................... 32,388 17,133 75,829 47,544
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Other Income:
Equity in earnings of regional nuclear
generating companies and subsidary company..... 396 343 728 619
Other, net....................................... 661 465 1,032 724
Income taxes--credit............................. (415) 4,728 (1,772) 9,771
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Other income, net.......................... 642 5,536 (12) 11,114
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Income before interest charges............. 33,030 22,669 75,817 58,658
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Interest Charges:
Interest on long-term debt....................... 18,927 19,350 37,309 39,476
Other interest................................... 102 324 229 629
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Interest charges, net...................... 19,029 19,674 37,538 40,105
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Net Income......................................... $ 14,001 $ 2,995 $ 38,279 $ 18,553
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
PUBLIC SERVICE COMPANY of NEW HAMPSHIRE
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
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1994 1993
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(Thousands of Dollars)
<S> <C> <C>
Cash Flows From Operations:
Net Income ................................................ $ 38,279 $ 18,553
Adjusted for the following:
Depreciation............................................. 19,172 19,316
Deferred income taxes and investment tax credits, net.... 32,906 17,366
Deferred energy costs, net of amortization............... (28,693) (19,189)
Amortization of regulatory asset......................... 45,045 45,294
Other sources of cash.................................... 2,205 8,112
Other uses of cash....................................... (26,052) (440)
Changes in working capital:
Receivables and accrued utility revenues................. 8,542 12,857
Fuel, materials, and supplies............................ 274 (2,766)
Accounts payable......................................... 6,602 (3,720)
Accrued taxes............................................ 18,748 15,348
Other working capital (excludes cash).................... (14,143) (14,994)
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Net cash flows from operations............................... 102,885 95,737
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Cash Flows Used For Financing Activities:
Net decrease in short-term debt............................ (2,500) (26,000)
Reacquisitions and retirements of long-term debt .......... (47,000) (47,000)
Cash dividends on preferred stock.......................... (6,625) (6,625)
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Net cash flows used for financing activities................. (56,125) (79,625)
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Investment Activities:
Investment in plant:
Electric utility plant..................................... (11,427) (16,420)
Nuclear fuel............................................... - (622)
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Net cash flows used for investments in plant............... (11,427) (17,042)
NU System Money Pool, net.................................. (40,750) -
Other investment activities, net........................... (174) (166)
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Net cash flows used for investments.......................... (52,351) (17,208)
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Net Decrease in Cash for the Period.......................... (5,591) (1,096)
Cash and special deposits - beginning of period.............. 5,995 2,328
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Cash and special deposits - end of period.................... $ 404 $ 1,232
============ ============
</TABLE>
See accompanying notes to financial statements.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
<F1>1. General
The accompanying unaudited financial statements should be read in conjunction
with the Annual Report of Public Service Company of New Hampshire (the
company or PSNH) on Form 10-K for the year ended December 31, 1993 (1993 Form
10-K). In the opinion of the company, the accompanying financial statements
contain all adjustments necessary to present fairly the financial position as
of June 30, 1994, the results of operations for the three and six months
ended June 30, 1994 and 1993, and the statements of cash flows for the six
months ended June 30, 1994 and 1993. The results of operations for the three
and six months ended June 30, 1994 and 1993 are not necessarily indicative of
the results expected for a full year.
Certain amounts in the accompanying financial statements of the company for
the period ended June 30, 1993 have been reclassified to conform with the
June 30, 1994 presentation.
<F2>2. Changes in Accounting Principles
Statement of Financial Accounting Standards No. 115 (SFAS 115): In May 1993,
the Financial Accounting Standards Board issued SFAS 115, "Accounting for
Certain Investments in Debt and Equity Securities." SFAS 115 addresses the
accounting and reporting for certain investments in debt and equity
securities, and expands the use of fair value accounting for these
securities. SFAS 115 is applicable to PSNH with respect to its investments
in nuclear decommissioning trusts.
SFAS 115 requires investments in decommissioning trusts to be presented at
fair value and was adopted by PSNH on a prospective basis in the first
quarter of 1994.
<F3>3. Short-Term Debt
On May 11, 1994, PSNH extended through May 31, 1996 its $125 million
revolving credit facility (the facility) which was scheduled to terminate on
May 14, 1994. The original three-year facility was established with twenty-
two banks when PSNH emerged from bankruptcy in May 1991. PSNH will use the
facility as an external funding source for general borrowing purposes. For
further information regarding Short-Term Debt, see the Notes to Financial
Statements in PSNH's 1993 Form 10-K.
<F4>4. Commitments and Contingencies
Construction Program: For information regarding the Construction Program,
see the Notes to Financial Statements in PSNH's 1993 Form 10-K.
PSNH Rate Agreement: Effective June 1, 1994, the fifth of seven successive
5.5 percent annual increases went into effect for PSNH's base retail rates.
For further information regarding the PSNH Rate Agreement, see Management's
Discussion and Analysis of Financial Condition and Results of Operations in
this Form 10-Q and the Notes to Financial Statements in PSNH's 1993 Form
10-K.
Environmental Matters: For information regarding Environmental Matters, see
Part II, Item 5 - Other Information in this Form 10-Q and the Notes to
Financial Statements in PSNH's 1993 Form 10-K.
Nuclear Insurance Contingencies: For information regarding Nuclear Insurance
Contingencies, see the Notes to Financial Statements in PSNH's 1993
Form 10-K.
Financing Arrangements for the Regional Nuclear Generating Companies: For
information regarding Financing Arrangements for the Regional Nuclear
Generating Companies, see the Notes to Financial Statements in PSNH's 1993
Form 10-K.
Purchased Power Arrangements: For information regarding Purchased Power
Arrangements, see Management's Discussion and Analysis of Financial Condition
and Results of Operations in this Form 10-Q, PSNH's March 31, 1994 Form 10-Q,
and the Notes to Financial Statements in PSNH's 1993 Form 10-K.
Hydro-Quebec: For information regarding Hydro-Quebec, see the Notes to
Financial Statements in PSNH's 1993 Form 10-K.
Property Taxes: For further information on Property Taxes, see the Notes to
Financial Statements in PSNH's 1993 Form 10-K.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
Management's Discussion and Analysis of Financial
Condition and Results of Operations
This section contains management's assessment of Public Service Company of
New Hampshire's (PSNH or the company) financial condition and the principal
factors having an impact on the results of operations. The company is a
wholly-owned subsidiary of Northeast Utilities (NU). This discussion should
be read in conjunction with the company's financial statements and footnotes
and the 1993 Form 10-K and the First Quarter 1994 Form 10-Q.
FINANCIAL CONDITION
Overview
The company's net income increased to approximately $14 million and $38
million for the three- and six-month periods ended June 30, 1994,
respectively, from approximately $3 million and $19 million for the same
periods in 1993. The increases in net income are primarily attributable to
the amortization of the regulatory liability for previously incurred net
operating losses as allowed under a global settlement approved by the New
Hampshire Public Utilities Commission (NHPUC) in January 1994, increased
revenues from the June 1993 and the June 1994 rate increases, and higher
retail sales resulting from an improvement in the New Hampshire economy and a
colder winter.
Regulatory Matters
The ability of a retail customer to select an electricity supplier other than
a local electric company and then use the local electric utility to transmit
the power to the customer's site is known as "retail wheeling." While
wholesale wheeling is mandated by the Energy Policy Act of 1992 under certain
circumstances, retail wheeling is generally not required. In New Hampshire,
there have been no legislative proposals on retail wheeling to date. An
existing New Hampshire statute currently allows "limited electrical
producers" (i.e., up to five megawatts in size), to sell output to as many as
three retail customers. On August 1, 1994, an entity named Freedom Electric
Power Company filed an application with the NHPUC seeking authorization to
provide electric service at the transmission level to selected industrial
retail customers, including those of PSNH. PSNH believes such arrangements
are not permitted under existing law and are not in the public interest. It
is not clear how and when the NHPUC will respond to the application.
PSNH's rates are determined under a rate agreement executed by the Governor
and the Attorney General of New Hampshire in 1989 and subsequently approved
by the NHPUC (the Rate Agreement). The Rate Agreement sets out a
comprehensive plan of rates for PSNH, providing for seven base rate increases
of 5.5 percent per year and a comprehensive fuel and purchased power
adjustment clause (FPPAC). The base rate increases are effective annually on
each June 1. The fifth base rate increase went into effect on June 1, 1994,
along with a slightly higher FPPAC rate. The higher FPPAC rate, when
combined with the June 1 scheduled base rate increase, limited the total rate
change to 5.5 percent when compared to PSNH's current rate level.
PSNH estimates that it will underrecover FPPAC costs for the period ending
November 30, 1994 by approximately $15 million as a result of 1994 outages at
the Seabrook nuclear unit. PSNH will request recovery of these costs in the
next FPPAC filing for rates effective December 1, 1994.
The costs associated with purchases from certain independent-power producers
(IPPs) over the level assumed in the Rate Agreement are deferred and
recovered over ten-year periods through the FPPAC. At June 30, 1994, IPP
deferrals which are included in energy adjustment clause, net on the balance
sheets, were approximately $120 million. Most of these purchases are under
long-term rate orders (20-30 years) at prices significantly higher than
PSNH's current or projected avoided costs. PSNH has been attempting to
renegotiate these rate orders and must report to the NHPUC and a New
Hampshire legislative committee on the results of the negotiations.
In May 1994, PSNH filed agreements reached with two of the eight wood-fired
IPPs with the NHPUC, which call for PSNH to pay the IPPs a total of
approximately $42 million. In return, PSNH would no longer be required to
buy power from the two IPPs, and the IPPs are barred from providing service
to any customers currently on the PSNH or NU systems. If approved by the
NHPUC, the agreements will provide benefits to ratepayers over the terms of
the IPP rate orders. Hearings on these proposed agreements are scheduled for
mid-August.
As prescribed by the Rate Agreement, North Atlantic Energy Corporation (NAEC)
is phasing in its $700 million investment in Seabrook 1. As of June 30,
1994, NAEC has included in rates $490 million of its Seabrook investment.
The remaining investment ($210 million) will be phased into rates over the
next two years beginning in May 1995. The deferred return associated with
the amount of investment that has not been included in rates was
approximately $162 million through June 30, 1994, including approximately $51
million which is recorded as utility plant. This amount and the additional
deferred amounts associated with the remaining phase-in will be recovered
under NAEC's purchase agreement with PSNH over the period December 1997
through May 2001. PSNH will recover these deferred amounts from customers
over the period of June 1998 through May 2001.
Seabrook Performance
In the first six months of 1994, Seabrook operated at a capacity factor of
40.5 percent as compared to 93.8 percent for the same period in 1993. The
unit was taken out of service on January 25, 1994 for an unplanned outage and
returned to service on February 18, 1994. The unit began its scheduled 57-
day refueling and maintenance outage on April 9, 1994. The outage was
substantially extended and the unit returned to service on August 1, 1994.
Liquidity and Capital Resources
Cash provided from operations increased approximately $7 million for the
first six months of 1994, as compared with the same period in 1993, primarily
due to the increased revenues from the June 1993 and the June 1994 rate
increases. Cash used for financing activities was approximately $24 million
lower in 1994, as compared with the same period in 1993, primarily due to a
lower repayment of short-term debt. Cash used for investments was
approximately $35 million higher in 1994, as compared with 1993, primarily
due to an increase in short-term loans to other NU system companies under the
NU system Money Pool.
The company's construction program expenditures amounted to approximately $11
million for the first six months of 1994, as compared to approximately $16
million during the same period in 1993.
Management believes that, as a result of the annual rate increases provided
for by the Rate Agreement and the FPPAC, cash flow from operations should be
sufficient to cover its cash requirements including the repayment of the Term
Loan. The company's Term Loan must be repaid in 16 quarterly installments of
approximately $24 million that commenced in August 1992. The company expects
to meet cash flow requirements not covered by cash from operations through
borrowings under the Revolving Credit Facility and/or the NU system Money
Pool. The Revolving Credit Facility's final maturity was May 14, 1994 but on
April 4, 1994, the NHPUC approved a two-year extension of the maturity. At
June 30, 1994, there were no borrowings under the Revolving Credit Facility
and no borrowings outstanding under the Money Pool. The company may need to
issue new debt in 1994 to finance a buyout of some of its arrangements with
the IPPs.
RESULTS OF OPERATIONS
Comparison of the Second Quarter of 1994 with the Second Quarter of 1993
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Operating revenues increased approximately $19 million in the second quarter
of 1994, as compared with 1993. The components of the change in operating
revenues are as follows:
Changes in Operating Revenues Increase
- ------------------------------- -------------------
(Millions of Dollars)
Regulatory decisions $ 5
Fuel, purchased power, and FPPAC cost recoveries 11
Sales volume 3
---
Total revenue change $19
===
Revenues related to regulatory decisions increased primarily because of the
June 1993 and the June 1994 rate increases. Fuel, purchased power and FPPAC
cost recoveries increased in the second quarter of 1994 primarily due to
increased base rate recovery of energy costs as a result of the rate
increases and higher energy sales to outside utilities. Sales volume
increased primarily as a result of higher retail sales due to an improvement
in the New Hampshire economy in 1994. Retail sales increased 3.1 percent for
the second quarter of 1994, as compared with 1993.
Fuel, purchased, and net interchange power expense decreased approximately $2
million in the second quarter of 1994, as compared with 1993, primarily
because of the timing in the recovery of expenses under the FPPAC, partially
offset by higher energy costs in 1994 associated with sales to other
utilities and higher sales requirements.
Other operation and maintenance expenses increased approximately $13 million
in the second quarter of 1994, as compared with 1993, primarily due to higher
costs under the Seabrook Power Contract as a result of maintenance work
during the extended refueling and maintenance outage in 1994.
Amortization of regulatory assets, net decreased approximately $8 million in
the second quarter of 1994, as compared with 1993, primarily because of the
amortization in 1994 of the company's regulatory liability for net operating
losses.
Federal and state income taxes increased $6 million in the second quarter of
1994, as compared with 1993, primarily because of higher book taxable income.
Comparison of the First Six Months of 1994 with the First Six Months of 1993
- ----------------------------------------------------------------------------
Operating revenues increased approximately $43 million in the first six
months of 1994, as compared with 1993. The components of the change in
operating revenues are as follows:
Changes in Operating Revenues Increase
- ------------------------------- -------------------
(Millions of Dollars)
Regulatory decisions $10
Fuel, purchased power, and FPPAC cost recoveries 27
Sales volume 5
Other revenues 1
---
Total revenue change $43
===
Revenues related to regulatory decisions increased primarily because of the
June 1993 and the June 1994 rate increases. Fuel, purchased power and FPPAC
cost recoveries increased primarily due to increased base rate recovery of
energy costs as a result of the rate increases and higher energy sales to
outside utilities. Sales volume increased primarily as a result of higher
retail sales due to an improvement in the New Hampshire economy and a colder
winter in 1994. Retail sales increased 2.8 percent for the first six months
of 1994, as compared with 1993.
Fuel, purchased, and net interchange power expense increased approximately $7
million in the first six months of 1994, as compared with 1993, primarily
because of higher energy costs in 1994 associated with sales to other
utilities and higher sales requirements, partially offset by a decrease due
to the timing in the recovery of fuel expenses under the FPPAC.
Other operation and maintenance expenses increased approximately $19 million
in the first six months of 1994, as compared with 1993, primarily due to
higher storm-related expenses in 1994 and higher costs under the Seabrook
Power Contract as a result of maintenance work during the two outages in
1994.
Amortization of regulatory assets, net decreased approximately $17 million in
the first six months of 1994, as compared with 1993, primarily because of the
amortization in 1994 of the company's regulatory liability for net operating
losses.
Taxes other than income taxes increased approximately $4 million in the first
six months of 1994, as compared with 1993, because of higher New Hampshire
gross receipts taxes in 1994 on a higher revenue base.
Interest on long-term debt decreased approximately $2 million in the first
six months of 1994, as compared with 1993, primarily because of the $94
million repayment of the company's Term Loan in 1993 and 1994.
Federal and state income taxes increased approximately $14 million in the
first six months of 1994, as compared with 1993, primarily because of higher
book taxable income.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
1. PSNH's 1993 Form 10-K incorrectly reported that Northeast Nuclear Energy
Company (NNECO), a wholly-owned subsidiary of NU that acts as agent for the
NU System and other utilities in operating the Millstone generating units,
had been informed by the Nuclear Regulatory Commission (NRC) that the agency
did not plan to take enforcement action against NNECO with respect to
apparent violations of NRC requirements arising from 1989 events involving
the operability of a safety related system at Millstone Unit 1. This
information, contained in correspondence from the NRC dated March 17, 1994,
pertained to another matter involving two employees who raised safety
concerns and was incorrectly reported in the 1993 Form 10-K as relating to
the 1989 Millstone Unit 1 operability event. On July 13, 1994, NNECO was
notified that the NRC had issued a Notice of Violation (NOV) and proposed to
assess civil penalties in the amount of $220,000 for this matter. The first
violation, for which a civil penalty of $120,000 was assessed, concerned the
apparent untimeliness of the operability assessment. The second violation,
and its associated civil penalty of $100,000, concerned discriminatory
treatment of an employee involved in the operability determination by a
manager at the plant. In addition, the NRC also requested that NNECO provide
information which will be used to determine whether the manager should be
involved in NRC licensed activities. Unless the response time is extended by
the NRC, NNECO has 30 days to respond to the NOV and its information request.
2. On September 30, 1993, 29 participants in the New England Power Pool
(NEPOOL) (including the NU system operating companies) filed the 30th
Amendment to the NEPOOL Agreement (Amendment) at the Federal Energy
Regulatory Commission (FERC). Massachusetts Municipal Wholesale Electric
Company and several other municipal electric utilities moved to intervene and
protest the Amendment, claiming that it discriminates against transmission
dependent utilities.
On April 11, 1994, the FERC issued an order setting the Amendment for a
"paper hearing" in May 1994, which date was subsequently extended to
August 9, 1994. The order stated that FERC intends to address whether the
Amendment eliminates transmission access and the discounted rates for pool-
planned units. FERC also broadened the proceeding to consider whether
NEPOOL's activities in this are consistent with the standards of the Federal
Power Act. On July 25, 1994 the sponsors of the Amendment and the protesting
municipal utilities jointly filed a motion requesting that FERC suspend the
procedural schedule because they had reached an understanding on the terms of
a settlement that would resolve the FERC proceeding including the withdrawal
of the Amendment. On August 3, 1994, FERC granted this motion and suspended
the procedural schedule for a period of 45 days.
For additional information on this matter, see PSNH's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994 under the caption "Part II.
Other Information - Item 1 - Legal Proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders of PSNH held on May 2, 1994,
stockholders voted to fix the number of directors for the ensuing year at
ten. The vote fixing the number of directors at ten was 1,000 shares in
favor, representing 100 percent of the issued and outstanding shares of
common stock of PSNH.
At the Annual Meeting, the following ten directors were elected, each by a
vote of 1,000 shares in favor, to serve on the Board of Directors for the
ensuing year: Robert E. Busch, John C. Collins, William B. Ellis, Bernard M.
Fox, William T. Frain, Jr., Gerald Letendre, Hugh C. McKenzie, Jane E.
Newman, Dale F. Nitzschke, and Robert P. Wax.
Item 5. Other Information
1. As of July 1, 1994, the Barnwell, South Carolina low-level radioactive
waste (LLRW) facility is no longer available for the disposal of LLRW from
states situated outside its compact region. The NU System is currently
implementing plans for the temporary on-site storage of LLRW generated at its
nuclear facilities. The costs associated with temporary on-site storage of
LLRW are not material. The NU System has plans that will allow for the
storage of LLRW until permanent storage becomes available.
For additional information on this matter, see the 1993 Form 10-K, under the
caption "Item 1. Business - Electric Operations - Nuclear Generation -
Low-Level Radioactive Wastes."
2. In 1992, FERC's approval of the NU acquisition of PSNH was appealed to
the United States Court of Appeals for the First Circuit, which affirmed the
decision approving the merger but ordered FERC to address whether FERC had
applied a more stringent "public interest standard" to the Seabrook Power
Contract, any modifications would have been necessary. Purporting to apply
this standard, FERC reaffirmed certain modifications to the contract,
interpreting the standard liberally to allow it to intervene in contracts on
behalf of non-parties to the contract. NU requested rehearing, arguing that
FERC had not applied the appropriate standard, which request was denied by
FERC on July 8, 1994. NU is considering an appeal from this denial.
For additional information on this matter, see the 1993 Form 10-K, under the
caption "Item 3 - Legal Proceedings."
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during this reporting period.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
---------------------------------------
Registrant
Date August 10, 1994 By /s/ Bernard M. Fox
-------------------- ----------------------------
Bernard M. Fox
Vice Chairman, Chief
Executive Officer,
and Director
Date August 10, 1994 By /s/ John W. Noyes
-------------------- -----------------------------
John W. Noyes
Vice President and
Controller
