File No. 70-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
DECLARATION WITH RESPECT TO REORGANIZATION
OF A SERVICE COMPANY
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
EASTERN UTILITIES ASSOCIATES
P.O. Box 2333, Boston, Massachusetts 02107
EUA SERVICE CORPORATION
P.O. Box 2333, Boston, Massachusetts 02107
(Name of companies filing this statement
and address of principal executive office)
EASTERN UTILITIES ASSOCIATES
(Name of top registered holding company
parent of applicant or declarant)
CLIFFORD J. HEBERT, JR., TREASURER
EASTERN UTILITIES ASSOCIATES
P.O. Box 2333, Boston, Massachusetts 02107
(Name and address of agent for service)
The Commission is requested to mail signed copies
of all orders, notices and communications to:
ARTHUR I. ANDERSON, P.C.
McDermott, Will & Emery
75 State Street
Boston, MA 02109
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS.
Introduction
Eastern Utilities Associates ("EUA"), a holding company
registered under the Public Utility Holding Company Act of 1935,
as amended (the "Act"), and EUA Service Corporation ("EUA
Service"), a wholly-owned subsidiary service company of EUA,
hereby request authorization pursuant to this Declaration with
respect to the reorganization and centralization of certain
service and management functions (the "Reorganization"). EUA
Service provides services to EUA's four electric utility
companies - Blackstone Valley Electric Company ("Blackstone"),
Montaup Electric Company ("Montaup"), Eastern Edison Company
("Eastern Edison") and Newport Electric Corporation ("Newport")
(Blackstone, Montaup, Eastern Edison and Newport, hereinafter
collectively, the "Operating Companies"), as well as to EUA's
other direct and indirect subsidiaries (collectively with the
Operating Companies, the "System Companies").
Overview
In March 1995, EUA announced the Reorganization which
is designed to consolidate and restructure operations in order to
allow more flexibility in the allocation of management and
supervisory resources throughout the System Companies, generally,
and more specifically, the Operating Companies, to meet the
challenges of the changing electric utility industry and to
compete effectively in the years ahead in an increasingly more
competitive environment.
EUA expects to realize a number of benefits from the
Reorganization, such as increased efficiencies and synergies
through the elimination of previously duplicated functions. By
streamlining operations, EUA expects to enhance communication and
efficiency, which should translate into a reduction in the rate
of growth in operating and maintenance ("O&M") costs of the
Operating Companies, thereby minimizing the need for future rate
increases.
In general, the Reorganization is designed to
consolidate and centralize in EUA Service certain functions
heretofore separately performed by each of the Operating
Companies and some of the other System Companies. In part, the
Reorganization shifts certain management functions relating to
certain administrative and support functions from the Operating
Companies to EUA Service, thereby reducing costs and freeing the
Operating Companies to focus on customer service and economic
development.
The Reorganization is intended to standardize certain
practices throughout the System Companies and to streamline
management. By reducing layers of management, management will be
closer to operations and communication should be enhanced.
Organizationally, the Reorganization does not involve
the formation of new entities and will not require utility assets
to be transferred among System Companies. In addition, the
Reorganization does not require the writedown of any rate base
assets.
Reorganization Structure
Under the new structure, Blackstone, Eastern Edison and
Newport share their President who is also an Executive Vice
President of EUA and EUA Service. EUA Service and the Operating
Companies also share Vice Presidents in field operations,
technical services and marketing. The reporting lines of the
System Companies' executives post-restructuring are set forth in
Exhibit G-1.
Also contributing to the streamlining of management
resources and reduction in management and exempt staff is the
voluntary retirement incentive (the "Retirement Offer") offered
to exempt employees who met certain employment criteria. A total
of 49 eligible employees accepted the Retirement Offer. The
annual savings in salaries attributed to this group amounted to
$3,100,000.
Three major system core functions were consolidated
under EUA Service: field operations; technical services; and
marketing.
New services performed by the field operations
department as a result of the Reorganization include (i)
transmission, distribution overhead and underground lines
operation and maintenance; and (ii) meter services. The field
operations department also continues to assume the following
responsibilities for functions performed by EUA Service for the
System Companies prior to the Reorganization: (a) vegetation
management; (b) garage; (c) occupational health and safety; (d)
materials management; and (e) system stores.
New services performed by the technical services
department as a result of the Reorganization include (i)
distribution engineering; (ii) substation maintenance
(transmission and distribution); (iii) property maintenance; and
(iv) system real estate. The technical services department also
continues to assume responsibility for the following functions
performed for System Companies by EUA Service prior to the
Reorganization: (a) system operations (SCADA); (b) electrical,
mechanical, civil and environmental engineering; (c) substation
and communication; (d) radio and microwave; (e) electronics; (f)
telecommunications; (g) general office services; and (h)
security.
The new services performed by the marketing department
as a result of the Reorganization include: (i) consumer
services; (ii) marketing; and (iii) conservation and load
management - implementation. The marketing department also
continues to assume the following responsibilities for functions
performed for System Companies prior to the Reorganization: (a)
corporate, employee and media communications; (b) rates, load
research and revenue requirements; and (c) legislative affairs.
The consolidation of the various functions explained
above, resulted in transferring 95 personnel, primarily
management, supervisory and technical (engineering) levels from
System Companies to EUA Service. See Exhibit G-2 for a
reorganizational impact on employees. The annual salaries of
this group amounts to $5,300,000. The personnel transfers to EUA
Service (95) and the Retirement Offer which resulted in a
reduction of 49 employees of System Companies, were essential in
order to attain the level of flexibility in the assignment of
management and supervisory resources throughout System Companies.
Field personnel and construction crews continue as employees of
the Operating Companies and will function from field locations.
The Reorganization, however, does not affect the
existing controls with respect to the provision of services by
EUA Service to the Operating Companies. Those controls include
the following:
Annual budgets are developed with the
participation of Operating Company executives who sign off on the
services to be provided by EUA Service as part of the budget
review. In the budgeting process the cost effectiveness of the
services provided by EUA Service is evaluated and it is not
uncommon for services to be outsourced. Pole treatment, tree
trimming, and customer payment remittances have been outsourced
recently as a result of this budget review process.
Budgets, including the services to be provided by
EUA Service, are approved by the boards of directors of the
Operating Companies annually.
The service contract between EUA Service and each
of the Operating Companies is reviewed and approved by the boards
of directors of the respective Operating Companies annually.
Special services are only provided to the
Operating Companies pursuant to a requisition procedure where the
services are specifically requested by the particular Operating
Company.
EUA Service submits monthly bills to each of the
Operating Companies which are reviewed and approved by Operating
Company executives prior to payment. Charges for special
services are specifically identified in the monthly statements.
Financial Impact
The costs of the Retirement Offer, which are the only
costs associated with the Reorganization, were initially
estimated to be $3-4 million and were expensed in June, 1995.
After progressing with the Reorganization, the final costs of the
Retirement Offer were approximately $4.8 million, all of which
were incurred in 1995. Approximately $2.4 million of such costs
were or will be paid from general corporate funds. The remaining
$2.4 million will be paid from benefit plan trusts; this amount
represents the present value of enhanced benefit amounts to be
paid to participants over future years in accordance with the
early retirement program. These costs will be funded from
general corporate funds to the benefit plan trusts over future
years.
EUA expects to realize a number of benefits from the
Reorganization. Beginning in 1995 and continuing into the
future, increased efficiencies and synergies are expected to be
realized with the elimination of previously duplicated functions.
This should translate into a reduction in the rate of growth in
O&M costs and minimize the need for future rate increases. The
Reorganization costs described above are expected to be recovered
within 18 months of the implementation of the Reorganization.
Although the Reorganization increases the number of EUA
Service employees, EUA service will still represent only about
47% of EUA Service's and the Operating Companies' total
workforce. Exhibit G-2 shows the approximate staffing levels for
EUA Service, EUA's corporate employees, and the Operating
Companies, both before and after the Reorganization. Exhibit G-3
shows the areas of each Operating Company affected by the
Reorganization.
Because the Reorganization increases the amount of
services rendered by EUA Service, it is expected that the
absolute amount of EUA Service billings to the System Companies
will increase. But this increase will be more than offset by
savings resulting from centralization, standardization, and the
elimination of the need for certain duplicate facilities and
equipment so that the Operating Companies' overall costs will be
lower (see Exhibit G-4).
Under existing Commission authority, each of the
Operating Companies pays to EUA Service all costs which
reasonably can be identified and related to a particular
transaction or service performed by EUA Service on its behalf.
These costs are captured in work orders in accordance with the
Commission's Uniform System of Accounts for Mutual Service
Companies and Subsidiary Service Companies. Where one or more
System Companies is involved in or receives benefits from a
transaction or service performed, costs are allocated among the
companies on the basis most directly related to the transaction
or service performed. Costs incurred by EUA Service which are
not directly chargeable to one or more of the System Companies --
i.e., indirect costs -- are allocated among and billed to the
companies using an appropriate formula as authorized by the
Commission.
The foregoing billing principles will remain the basis
for EUA Service's charges to the System Companies unless and
until modified or new principles are adopted and reported to
and/or approved by the Commission. The services centralized in
EUA Service as a result of the Reorganization represent an
incremental extension of existing services to reflect changed
business conditions and cost reduction opportunities. They
therefore do not represent a fundamental change in the essential
scope or character of services to be rendered by EUA Service, and
will be billed in the same manner, using the same existing
allocation methods, as similar services heretofore provided by
EUA Service. Accordingly, there are no immediate plans to change
existing allocation methods or to adopt new allocation methods
for EUA Service's services except as otherwise noted herein.
However, EUA will continue working with the Commission to ensure
that the allocation methods used are effective in allocating
costs according to benefits received.
ITEM 2. ESTIMATED FEES, COMMISSIONS AND EXPENSES.
The projected fees, commissions and expenses to be paid
or incurred by EUA in connection with the proposed transaction
will be filed by amendment.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
The following sections of the Act, and the rules
promulgated by the Commission pursuant to the Act, are or may be
applicable to the Reorganization and other transactions described
herein:
Services by EUA Service Section 13(b); Rules 80
to associate companies through 94.
ITEM 4. REGULATORY APPROVALS.
No state commission and no Federal commission, other than
the Commission, has jurisdiction over the proposed transactions.
ITEM 5. PROCEDURE.
(a) In order to be in a position to carry out the proposed
transactions at the most advantageous time, the declarants
request that the Commission issue its order hereon on the
earliest practical date.
(b) It is not considered necessary that there be a
recommended decision by a hearing officer or by any other
responsible officer of the Commission. The Office of Public
Utility Regulation may assist in the preparation of the decision
of the Commission, and it is believed that a thirty (30) day
waiting period between the issuance of the order of the
Commission and the day on which the order is to become effective
would not be appropriate.
ITEM 6. EXHIBITS. (*filed herewith)
Exhibit F Opinion of McDermott, Will & Emery
*Exhibit G-1 Reporting Lines
*Exhibit G-2 Reorganizational Impact
*Exhibit G-3 Affected Departments
*Exhibit G-4 Reorganization Billing Impact Analysis
*Exhibit H Proposed Form of Notice
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
The proposed transaction does not involve major Federal
action having a significant effect on the human environment. No
Federal agency has prepared or is preparing an environmental
impact statement with respect to the proposed transaction.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned Declarants have duly caused
this statement to be signed on their behalf by the undersigned
duly authorized officers.
EASTERN UTILITIES ASSOCIATES
By: /s/ Clifford J. Hebert, Jr.
Clifford J. Hebert, Jr.
Treasurer
EUA SERVICE CORPORATION
By: /s/ Clifford J. Hebert, Jr.
Clifford J. Hebert, Jr.
Treasurer
Date: September 22, 1995
<TABLE>
<CAPTION>
EXHIBIT G-1
CORE BUSINESS ORGANIZATION CHART
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CHIEF EXECUTIVE OFFICER
D.G. Pardus
--------------------
@
@
@-----------------------------------------------------------------------------------
@ @
@ @
CHIEF OPERATING OFFICER @
J.R. Stevens @
@ @
@ @
@ @
_________________________@_______________________________________________________________ @
@ @ @ @ @
@ @ @ @ ________________
EXECUTIVE V.P. EXECUTIVE V.P. @ @ @ @ @
ADMINISTRATION OPERATIONS @ @ @ @ @
R.G. Powderly J.D. Carney @ @ @ Treasurer @
@ @ @ @ @ Corporate @
@ ----------------------- @ @ @ Secretary @
-------------------- @ @ @ @ @ C. Hebert @
@ @ @ @ V.P. V.P. @ @ @
@ @ @ @ Power Comptroller @ @ @
@ @ @ @ Supply R.M. Burns @ @ @
SENIOR V.P. @ @ @ K.A. Kirby @ @ @ @
MARKETING @ V.P V.P. @ @ @ @ @
D.H. Gulvin @ Technical Field @ @ Special @ Audit
@ @ Services Operations @ @ Projects @ T.J.
@ @ M.J. Hirsh B.A. Hassan @ @ W. Freve @ McBride
@ @ @ @ @ @ @
@ @ @ @ @ @ Treasury
@ @ @ @ @ @ Fin. Svs
Rates Info. Services Syst. Oper. Trans. & Dist. Planning @ Model
Regulatory Research Purchasing SCADA O.H. Lines Power Mgmt. @ Inv. Rel.
Load Research Cust. Info. Svs. Engineering Transmission Load Forecast @
Consumer Services Credit Standards U.G. Lines Somerset Accounting
Marketing Services Meter Reading Engineering Svs. Meters NEPOOL Reporting
Conservation & LM Human Resources Elect. Sys. Eng. Collectors J.O. Units General
Legislative Affairs Insurance Mechanical Eng. Veg. Mgmt Budget
Corp. Communications Employee Relations Environmental Fleet & Garage
Community Relations Benefits Dist. Eng. Safety
Salary Admin. Substation & Comm. Materials Mgmt.
Labor Relations Dist. Substation Stores
Training Facilities Mgmt.
</TABLE>
EXHIBIT G-2
EUA SERVICE CORPORATION
REORGANIZATIONAL IMPACT
NUMBER OF EMPLOYEES
(*)
(PRIOR) (AFTER)
NO. OF NO. OF (**)
EMPLOYEES AS EMPLOYEES AS INCREASE/
COMPANY OF MAY 31,1995 OF JUNE 30,1995 (DECREASE)
BLACKSTONE VALLEY ELECTRIC CO. 174 135 (39)
MONTAUP ELECTRIC COMPANY 110 103 (7)
EUA SERVICE CORPORATION 431 504 73
EASTERN EDISON COMPANY 323 263 (60)
NEWPORT ELECTRIC CORPORATION 92 76 (16)
TOTAL 1,130 1,081 (49)
(*) AFTER TRANSFERS AND RETIREMENTS
TRANSFERS VOLUNTARY EARLY NET INCREASE
(**) COMPANY TO EUASC RETIREMENT (DECREASE)
BLACKSTONE VALLEY ELECTRIC (34) (5) (39)
MONTAUP ELECTRIC COMPANY (4) (3) (7)
EUA SERVICE CORPORATION 95 (22) 73
EASTERN EDISON COMPANY (47) (13) (60)
NEWPORT ELECTRIC COMPANY (10) (6) (16)
TOTAL 0 (49) (49)
<TABLE>
EXHIBIT G-3
EUA SERVICE CORPORATION
ADDITIONAL DEPARTMENTALIZED RESTRUCTURE
1995
<CAPTION>
DEPT. RESPONSIBILITY
# CENTER BASIS TOTAL BLACKSTONE PARENT MONTAUP
<S> <C> <C> <C> <C> <C> <C>
120 CONS. SVCS - COMM. & INDUS. AVG COMM. & INDUST. CUST. AND REVS 100.00% 30.11% 0.00% 0.00%
121 CONS. SVCS-RESID. & SM COMM. AVG OF RESIDENTIAL REVS AND CUST 100.00% 26.47% 0.00% 0.00%
122 CONSUMER SVCS - ADMIN. AVG OF R/C 120 & 121 100.00% 28.29% 0.00% 0.00%
125 MTK./CONS. SVCS - ADM. & SUPP. AVG OF RET. CUST, REVS, (NET INTER 100.00% 23.95% 0.00% 24.73%
CO.) AND AVG OF EMPL.
269 CONSERV. & LOAD MGMT IMPLEM. AVG OF RET. SALES OF ELECTR.& # OF CUST. 100.00% 28.85% 0.00% 0.00%
271 MARKETING - ADM. & SUPPORT AVG OF R/C 266,272, AND 273 100.00% 21.89% 0.00% 50.00%
272 MARKETING TARGETED COMM. & INDUST. CUST. USUAGE 100.00% 43.77% 0.00% 0.00%
273 MARKETING - SUPPORT SERVICES AVERAGE OF R/C 266 AND 272 100.00% 21.89% 0.00% 50.00%
365 MATERIALS MGMT-ADM. & SUPP. MATERIAL AND SUPPLIES INVENTORY BAL. 100.00% 15.59% 0.00% 37.64%
452 BUILDING OPERATIONS & MAINT. GROSS UTIL. PLANT IN SVC EXCL. CWIP (EXCL 100.00% 24.76% 0.00% 20.33%
CANAL, WYMAN, SEABROOK & MILLSTONE)
455 SYSTEM REAL ESTATE GROSS UTIL PLANT IN SVC EXCL. CWIP (EXCL 100.00% 24.76% 0.00% 20.33%
CANAL, WYMAN, SEABROOK AND MILLSTONE)
525 TRANSMISSION LINES MILES OF TRANSMISSION LINES 100.00% 15.94% 0.00% 47.82%
560 TECHNICAL SVCS-ADM. & SUPP. AVERAGE OF R/C 451.571,581 AND 372 100.00% 24.65% 0.00% 23.04%
573 DISTRIBUTION ENGINEERING AVG OF GROSS DIST. PLANT, DIST. LINES AND 100.00% 26.62% 0.00% 0.00%
KWH SALES NET OF INTER CO. (EXCL. MONTAUP)
601 OP. & TECH. SVCS-ADM. & SUPP. AVG OF GROSS UTIL. PLANT, T&D LINES AND 100.00% 23.28% 0.00% 16.27%
KWH SALES (NET OF INTERCO. TRANSACTIONS)
605 FIELD OPER. -ADM. & SUPP. AVERAGE OF R/C 633,365,230,610 100.00% 22.10% 0.00% 18.81%
610 TRANSMISSION & DISTRIBUTION AVERAGE OF R/C 625,620,650,525,587 100.00% 22.82% 0.00% 10.56%
611 UNDERGROUND & OVERHEAD LINES AVERAGE OF T&D AND U.G. LINES 100.00% 22.14% 0.00% 1.70%
620 OVERHEAD LINES - DIST. MILES OF DISTRIBUTION LINES 100.00% 24.01% 0.00% 0.00%
625 METER SERVICES NUMBER OF METERS 100.00% 26.87% 0.00% 0.00%
650 UNDERGROUND LINES MILES OF UNDERGROUND LINES 100.00% 20.85% 0.00% 0.00%
656 SUBSTATION MAINTENANCE INVESTMENT OF STATION EQUIPMENT 100.00% 54.05% 0.00% 0.00%
</TABLE>
<TABLE>
EUA SERVICE CORPORATION
ADDITIONAL DEPARTMENTALIZED RESTRUCTURE (CONTINUED)
1995
<CAPTION>
DEPT. RESPONSIBILITY EUA EASTERN EUA EUA
# CENTER BASIS ENERGY EDISON COGENEX OCEAN ST
NEWPORT
<S> <C> <C> <C> <C> <C> <C> <C>
120 CONS. SVCS - COMM. & INDUS. AVG COMM. & INDUST. CUST. AND REVS 0.00% 56.54% 0.00% 0.00% 13.34%
121 CONS. SVCS-RESID. & SM COMM. AVG OF RESIDENTIAL REVS AND CUST 0.00% 62.05% 0.00% 0.00% 11.48%
122 CONSUMER SVCS - ADMIN. AVG OF R/C 120 &121 0.00% 59.30% 0.00% 0.00% 12.41%
125 MTK./CONS. SVCS - ADM. & SUPP. AVG OF RET. CUST, REVS, (NET INTER 0.00% 41.20% 0.00% 0.00% 10.12%
CO.) AND AVG OF EMPL.
269 CONSERV. & LOAD MGMT IMPLEM. AVG OF RET. SALES OF ELECTR.& # OF CUST. 0.00% 59.20% 0.00% 0.00% 11.95%
271 MARKETING - ADM. & SUPPORT AVG OF R/C 266,272, AND 273 0.00% 25.29% 0.00% 0.00% 2.82%
272 MARKETING TARGETED COMM. & INDUST. CUST. USUAGE 0.00% 50.57% 0.00% 0.00% 5.66%
273 MARKETING - SUPPORT SERVICES AVERAGE OF R/C 266 AND 272 0.00% 25.29% 0.00% 0.00% 2.82%
365 MATERIALS MGMT-ADM. & SUPP. MATERIAL AND SUPPLIES INVENTORY BAL. 0.00% 32.39% 0.00% 0.00% 14.38%
452 BUILDING OPERATIONS & MAINT. GROSS UTIL. PLANT IN SVC EXCL. CWIP (EXCL 0.00% 41.14% 0.00% 0.00% 13.77%
CANAL, WYMAN, SEABROOK & MILLSTONE)
455 SYSTEM REAL ESTATE GROSS UTIL PLANT IN SVC EXCL. CWIP (EXCL 0.00% 41.14% 0.00% 0.00% 13.77%
CANAL, WYMAN, SEABROOK AND MILLSTONE)
525 TRANSMISSION LINES MILES OF TRANSMISSION LINES 0.00% 30.47% 0.00% 0.00% 5.77%
560 TECHNICAL SVCS-ADM. & SUPP. AVERAGE OF R/C 451.571,581 AND 372 0.00% 41.68% 0.00% 0.00% 10.63%
573 DISTRIBUTION ENGINEERING AVG OF GROSS DIST. PLANT, DIST. LINES AND 0.00% 60.77% 0.00% 0.00% 12.61%
KWH SALES NET OF INTER CO. (EXCL. MONTAUP)
601 OP. & TECH. SVCS-ADM. & SUPP. AVG OF GROSS UTIL. PLANT, T&D LINES AND 0.00% 49.52% 0.00% 0.00% 10.93%
KWH SALES (NET OF INTERCO. TRANSACTIONS)
605 FIELD OPER. -ADM. & SUPP. AVERAGE OF R/C 633,365,230,610 0.00% 45.28% 0.00% 0.00% 13.81%
610 TRANSMISSION & DISTRIBUTION AVERAGE OF R/C 625,620,650,525,587 0.00% 55.11% 0.00% 0.00% 11.51%
611 UNDERGROUND & OVERHEAD LINES AVERAGE OF T&D AND U.G. LINES 0.00% 62.37% 0.00% 0.00% 13.79%
620 OVERHEAD LINES - DIST. MILES OF DISTRIBUTION LINES 0.00% 65.96% 0.00% 0.00% 10.03%
625 METER SERVICES NUMBER OF METERS 0.00% 61.63% 0.00% 0.00% 11.50%
650 UNDERGROUND LINES MILES OF UNDERGROUND LINES 0.00% 61.29% 0.00% 0.00% 17.86%
656 SUBSTATION MAINTENANCE INVESTMENT OF STATION EQUIPMENT 0.00% 39.34% 0.00% 0.00% 6.61%
</TABLE>
<TABLE>
EUA SERVICE CORPORATION
REORGANIZATION BILLING IMPACT ANALYSIS
1995
<CAPTION>
<F4> <F5>
<F1> <F2> <F3> ANNUAL LABOR NET
NO. OF LABOR PRIOR LABOR AFTER BILLING REDUCTION INCREASE
EMPL COMPANY TO EUASC TRANSFER EUASC TRANSFER IMPACT V.R.I. (DECREASE)
<S> <C> <C> <C> <C> <C> <C>
34 BLACKSTONE VALLEY $1,591,684.00 $1,335,406.00 ($256,278.00) 335,000.00 (591,278.00)
EASTERN UTILITIES ASSOC. $0.00 $7,128.79 $7,128.79 7,128.79
4 MONTAUP ELECTRIC CO. $602,756.00 $679,708.93 $76,952.93 215,700.00 (138,747.07)
47 EASTERN EDISON CO. $2,556,887.00 $2,615,919.86 $59,032.86 766,710.00 (707,677.14)
COGENEX CORP. $0.00 $8,974.32 $8,974.32 8,974.32
EUA ENERGY INVESTMENT $0.00 $3,600.85 $3,600.85 3,600.85
EUA OCEAN STATE $0.00 $3,712.37 $3,712.37 3,712.37
10 NEWPORT ELECTRIC CORP. $566,116.00 $662,991.88 $96,875.88 420,300.00 (323,424.12)
95 TOTAL $5,317,443.00 $5,317,443.00 ($0.00) 1,737,710.00 (1,737,710.00)
<FN>
<F1> OPERATING COMPANY EMPLOYEES TRANSFERRED TO EUASC
<F2> OPERATING COMPANY EMPLOYEES LABOR
<F3> ESTIMATED LABOR BILLING TO OPERATING COMPANIES OF EMPLOYEES TRANSFERRED IN CONJUNCTION WITH THE ORGANIZATION STRUCTURE
CHANGES.
<F4> ANNUAL LABOR SAVINGS OF EARLY RETIREMENT OFFER (SYSTEM OPERATING COMPANIES)
<F5> NET SAVINGS TO SYSTEM OPERATING COMPANIES ATTRIBUTED TO CENTRALIZATION OF EXECUTIVE AND MANAGEMENT FUNCTIONS AND EARLY
RETIREMENT OFFER.
</FN>
</TABLE>
Exhibit H
(PROPOSED FORM OF NOTICE)
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- , 70- )
Eastern Utilities Associates ("EUA"), a registered holding
company, and EUA Service Corporation, a wholly-owned subsidiary
of EUA ("EUA Service") have filed a declaration with this
Commission pursuant to Section 13(b) of the Public Utility
Holding Company Act of 1935 (the "Act") and Rules 80 through 94
promulgated thereunder.
EUA and EUA Service have requested Commission approval with
respect to the reorganization and centralization of certain
service and management functions (the "Reorganization"). EUA
Service provides services to EUA's four electric utility
companies - Blackstone Valley Electric Company ("Blackstone"),
Montaup Electric Company ("Montaup"), Eastern Edison Company
("Eastern Edison") and Newport Electric Corporation ("Newport")
(Blackstone, Montaup, Eastern Edison and Newport, hereinafter
collectively, the "Operating Companies"), as well as to EUA's
other direct and indirect subsidiaries (collectively with the
Operating Companies, the "System Companies").
In March 1995, EUA announced the Reorganization which
is designed to consolidate and restructure operations in order to
allow more flexibility in the allocation of management and
supervisory resources throughout the System Companies, generally,
and more specifically, the Operating Companies, to meet the
challenges of the changing electric utility industry and to
compete effectively in the years ahead in an increasingly more
competitive environment.
EUA expects to realize a number of benefits from the
Reorganization, such as increased efficiencies and synergies
through the elimination of previously duplicated functions. By
streamlining operations, EUA expects to enhance communication and
efficiency, which should translate into a reduction in the rate
of growth in operating and maintenance costs of the Operating
Companies, thereby minimizing the need for future rate increases.
In general, the Reorganization is designed to
consolidate and centralize in EUA Service certain functions
heretofore separately performed by each of the Operating
Companies and some of the other System Companies. In part, the
Reorganization shifts certain management functions relating to
certain administrative and support functions from the Operating
Companies to EUA Service, thereby reducing costs and freeing the
Operating Companies to focus on customer service and economic
development.
The Reorganization is intended to standardize certain
practices throughout the System Companies and to streamline
management. By reducing layers of management, management will be
closer to operations and communication should be enhanced.
Organizationally, the Reorganization does not involve
the formation of new entities and will not require utility assets
to be transferred among System Companies. In addition, the
Reorganization does not require the writedown of any rate base
assets.
NOTICE IS FURTHER GIVEN that any interested person may, not
later than _________, 1995, request in writing that a hearing be
held on such matter, stating the nature of his interest, the
reasons for such request, and the issues of fact or law raised by
said application/declaration which he desires to controvert; or
he may request that he be notified if the Commission should order
a hearing thereon. Any such request should be addressed:
Secretary, Securities and Exchange Commission, 450 5th Street,
N.W., Judiciary Plaza, Washington, D.C. 20549. A copy of such
request should be served personally or by mail upon the
applicant/declarant at the above-stated address and proof of
service (by affidavit or, in case of an attorney at law, by
certificate) should be filed with the request. At any time after
said date the application/declaration, as filed or as it may be
amended, may be granted and permitted to become effective as
provided in Rule 23 of the General Rules and Regulations
promulgated under the Act, or the Commission may grant exemption
from such rules as provided in Rules 20(a) and 100 thereof or
take such other action as it may deem appropriate. Persons who
request a hearing or advice as to whether a hearing is ordered
will receive any notices and orders issued in this matter,
including the date of the hearing (if ordered) and any
postponements thereof.
For the Commission, by the Division of Corporate Regulation,
pursuant to delegated authority.
Secretary
