<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-5464
(LOGO) MASSACHUSETTS ELECTRIC COMPANY
(Exact name of registrant as specified in charter)
MASSACHUSETTS 04-1988940
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
25 Research Drive, Westborough, Massachusetts 01582
(Address of principal executive offices)
Registrant's telephone number, including area code
(508-389-2000)
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 ( )
Common stock, par value $25 per share, authorized and
outstanding: 2,398,111 shares at March 31, 1995.
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
- ----------------------------
<TABLE>
MASSACHUSETTS ELECTRIC COMPANY
Statements of Income
Periods Ended March 31
(Unaudited)
<CAPTION>
Three Months Twelve Months
------------ -------------
1995 1994 1995 1994
---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C>
Operating revenue $373,092 $381,712 $1,473,450 $1,471,811
-------- -------- ---------- ----------
Operating expenses:
Purchased electric energy, principally from
New England Power Company, an affiliate 284,538 285,162 1,073,778 1,089,605
Other operation 44,911 46,563 214,142 223,610
Maintenance 7,432 7,850 35,084 22,824
Depreciation 11,465 10,825 43,415 41,273
Taxes, other than income taxes 8,354 8,309 28,709 27,077
Income taxes 3,043 5,879 19,429 13,542
-------- -------- ---------- ----------
Total operating expenses 359,743 364,588 1,414,557 1,417,931
-------- -------- ---------- ----------
Operating income 13,349 17,124 58,893 53,880
Other income (expense) - net, including
related taxes 326 (1,455) 786 (410)
-------- -------- ---------- ----------
Operating and other income 13,675 15,669 59,679 53,470
-------- -------- ---------- ----------
Interest:
Interest on long-term debt 6,105 5,003 22,069 22,377
Other interest 2,641 1,167 7,840 4,099
Allowance for borrowed funds used during
construction - credit (197) (73) (510) (297)
-------- -------- ---------- ----------
Total interest 8,549 6,097 29,399 26,179
-------- -------- ---------- ----------
Net income $ 5,126 $ 9,572 $ 30,280 $ 27,291
======== ======== ========== ==========
Statements of Retained Earnings
Retained earnings at beginning of period $136,911 $135,276 $ 137,475 $ 129,681
Net income 5,126 9,572 30,280 27,291
Dividends declared on cumulative
preferred stock (778) (778) (3,114) (3,693)
Dividends declared on common stock (5,995) (6,595) (29,377) (14,988)
Premium on redemption of preferred stock (816)
-------- -------- ---------- ----------
Retained earnings at end of period $135,264 $137,475 $ 135,264 $ 137,475
======== ======== ========== ==========
The accompanying notes are an integral part of these financial statements.
Per share data is not relevant because the Company's common stock is wholly
owned by New England Electric System.
</TABLE>
<PAGE>
<TABLE>
MASSACHUSETTS ELECTRIC COMPANY
Balance Sheets
(Unaudited)
<CAPTION>
March 31, December 31,
ASSETS 1995 1994
------ ---- ----
(In Thousands)
<S> <C> <C>
Utility plant, at original cost $1,368,285 $1,346,824
Less accumulated provisions for depreciation 380,707 373,501
---------- ----------
987,578 973,323
Construction work in progress 17,755 22,672
---------- ----------
Net utility plant 1,005,333 995,995
---------- ----------
Current assets:
Cash 1,038 1,225
Accounts receivable:
From sales of electric energy 147,937 137,431
Other (including $11,731,000 and $6,609,000
from affiliates) 24,983 36,022
Less reserves for doubtful accounts 11,542 10,394
---------- ----------
161,378 163,059
Unbilled revenues 32,800 42,800
Materials and supplies, at average cost 12,569 11,524
Prepaid and other current assets 20,535 21,583
---------- ----------
Total current assets 228,320 240,191
---------- ----------
Deferred charges and other assets 61,232 59,536
---------- ----------
$1,294,885 $1,295,722
========== ==========
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock, par value $25 per share, authorized
and outstanding 2,398,111 shares $ 59,953 $ 59,953
Premiums on capital stocks 45,862 45,862
Other paid-in capital 141,310 141,310
Retained earnings 135,264 136,911
---------- ----------
Total common equity 382,389 384,036
Cumulative preferred stock 50,000 50,000
Long-term debt 313,413 265,631
---------- ----------
Total capitalization 745,802 699,667
---------- ----------
Current liabilities:
Long-term debt due within one year 25,000 35,000
Short-term debt (including $8,050,000 and $8,650,000
to affiliates) 68,725 81,820
Accounts payable (including $152,891,000 and $157,076,000
to affiliates) 162,011 182,102
Accrued liabilities:
Taxes 3,578 906
Interest 6,305 7,945
Other accrued expenses 31,387 27,132
Customer deposits 4,980 4,985
Dividends payable 6,774 13,968
---------- ----------
Total current liabilities 308,760 353,858
---------- ----------
Deferred federal and state income taxes 174,924 176,913
Unamortized investment tax credits 18,533 18,816
Other reserves and deferred credits 46,866 46,468
---------- ----------
$1,294,885 $1,295,722
========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
MASSACHUSETTS ELECTRIC COMPANY
Statements of Cash Flows
Quarters Ended March 31
(Unaudited)
<CAPTION>
1995 1994
---- ----
(In Thousands)
<S> <C> <C>
Operating activities:
Net income $ 5,126 $ 9,572
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 11,465 10,825
Deferred income taxes and investment tax credits - net (2,346) (544)
Allowance for funds used during construction (197) (73)
Amortization of unbilled revenues (8,000)
Decrease (increase) in accounts receivable,
net and unbilled revenues 11,681 9,283
Decrease (increase) in materials and supplies (1,045) (1,226)
Decrease (increase) in prepaid and other current assets 1,048 1,348
Increase (decrease) in accounts payable (20,091) (20,373)
Increase (decrease) in other current liabilities 5,282 11,318
Other, net (1,027) (4,073)
-------- --------
Net cash provided by operating activities $ 9,896 $ 8,057
-------- --------
Investing activities:
Plant expenditures, excluding allowance for
funds used during construction $(20,605) $(19,612)
Other investing activities (415) (5,616)
-------- --------
Net cash used in investing activities $(21,020) $(25,228)
-------- --------
Financing activities:
Dividends paid on common stock $(13,190) $ (4,796)
Dividends paid on preferred stock (778) (778)
Long-term debt-issues 48,000 10,000
Long-term debt - retirements (10,000)
Changes in short-term debt (13,095) 12,545
-------- --------
Net cash provided by financing activities $ 10,937 $ 16,971
-------- --------
Net increase (decrease) in cash and cash equivalents $ (187) $ (200)
Cash and cash equivalents at beginning of period 1,225 773
-------- --------
Cash and cash equivalents at end of period $ 1,038 $ 573
======== ========
Supplementary information:
Interest paid less amounts capitalized $ 9,843 $ 6,714
-------- --------
Federal and state income taxes paid $ (9,000) $ (1,900)
-------- --------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Note A - Hazardous Waste
- ------------------------
The Federal Comprehensive Environmental Response, Compensation
and Liability Act, more commonly known as the "Superfund" law,
imposes strict, joint and several liability, regardless of fault,
for remediation of property contaminated with hazardous substances.
A number of states, including Massachusetts, have enacted similar
laws.
The electric utility industry typically utilizes and/or
generates in its operations a range of potentially hazardous
products and by-products. New England Electric System subsidiaries
currently have in place an environmental audit program intended to
enhance compliance with existing federal, state, and local
requirements regarding the handling of potentially hazardous
products and by-products.
The Company has been named as a potentially responsible party
(PRP) by either the U.S. Environmental Protection Agency or the
Massachusetts Department of Environmental Protection for 17 sites
at which hazardous waste is alleged to have been disposed. Private
parties have also contacted or initiated legal proceedings against
the Company regarding hazardous waste cleanup. The most prevalent
types of hazardous waste sites with which the Company has been
associated are manufactured gas locations. The Company is aware of
approximately 35 such locations in Massachusetts (including seven
of the 17 locations for which the Company is a PRP). The Company
is currently aware of other sites, and may in the future become
aware of additional sites, that it may be held responsible for
remediating.
In 1993, the Massachusetts Department of Public Utilities
approved a rate agreement filed by the Company that allows for
remediation costs of former manufactured gas sites and certain
other hazardous waste sites located in Massachusetts to be met from
a non-rate recoverable interest-bearing fund of $30 million
established on the Company's books. Rate recoverable contributions
of $3 million, adjusted for inflation, are added to the fund
annually in accordance with the agreement. Any shortfalls in the
fund would be paid by the Company and be recovered through rates
over seven years.
Predicting the potential costs to investigate and remediate
hazardous waste sites continues to be difficult. There are also
significant uncertainties as to the portion, if any, of the
<PAGE>
Note A - Hazardous Waste - Continued
- ------------------------
investigation and remediation costs of any particular hazardous
waste site that may ultimately be borne by the Company. Where
appropriate, the Company intends to seek recovery from its insurers
and from other PRPs, but it is uncertain whether and to what extent
such efforts would be successful. At March 31, 1995, the Company
has total reserves for environmental response costs of $35 million
and a related regulatory asset of $11 million. The Company
believes that hazardous waste liabilities for all sites of which it
is aware, and which are not covered by a rate agreement, will not
be material to its financial position.
Note B - New Accounting Standard
- --------------------------------
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of (FAS 121), effective for fiscal year 1996. This
standard clarifies when and how to recognize an impairment of long-
lived assets. In addition, FAS 121 requires that all regulatory
assets be written off unless they continue to meet the criteria for
initially recording such regulatory assets. In order to be
initially recorded, a regulatory asset must have a high probability
of future recovery. However, once written off, a regulatory asset
can be restored if it again becomes probable of recovery. The
impact of this standard will be driven by the facts and
circumstances that exist when the standard is adopted and
thereafter.
Note C
- ------
In the opinion of the Company, these statements reflect all
adjustments (which include normal recurring adjustments) necessary
for a fair statement of the results of its operations for the
periods presented and should be considered in conjunction with the
notes to the financial statements in the Company's 1994 Annual
Report.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
---------------------------------------------------------
Condition and Results of Operations
-----------------------------------
This section contains management's assessment of Massachusetts
Electric Company's financial condition and the principal factors
having an impact on the results of operations. This discussion
should be read in conjunction with the Company's financial
statements and footnotes and the 1994 Annual Report on Form 10-K.
Earnings
- --------
Earnings for the first quarter of 1995 decreased $4 million
compared with the same period last year reflecting decreased
kilowatthour (KWH) sales of 3.1 percent as a result of unusually
mild weather conditions in the first quarter of 1995.
Rate Activity
- -------------
On March 15, 1995, the Company filed a request with the
Massachusetts Department of Public Utilities (MDPU) to increase its
base rates by $62 million, effective October 1, 1995. As an
alternative to this proposed increase, the Company filed an
incentive rate plan, which would increase rates by about $30
million, effective October 1, 1995. Under the proposed incentive
rate plan, subsequent base rate adjustments could occur annually on
May 1 and would be based on a comparison of the Company's rates to
<PAGE>
rates of all electric utilities in Massachusetts.
The Company also proposed a new discount program for large
industrial customers in the manufacturing, computing, and biotech
sectors that are willing to make a minimum annual usage commitment
for a period of five years. The discounts, which the Company
proposed to be recovered from all customers, would range from 5
percent to 12.5 percent of base rates depending on a customer's
level of commitment. These discounts are in addition to the 5
percent service extension discounts (SEDs) that are currently
available to large commercial and industrial customers that agree
to provide three to five years notice before they purchase power
from another supplier or generate any additional power themselves.
The Company has proposed lowering the minimum average load
threshold for the SED program from 500 kilowatts to 200 kilowatts.
Commencing in 1995, pursuant to a rate settlement, the cost of the
SED programs are being passed on to New England Power Company
(NEP), the Company's affiliated wholesale power supplier. The
Company expects an MDPU decision on its filing in late September
1995.
<PAGE>
Operating Revenue
- -----------------
The following table summarizes the changes in operating
revenue:
Increase (Decrease) in Operating Revenue
First Quarter
-------------
1995 vs 1994
-------------
(In Millions)
Sales decrease $(11)
General rate change/service
extension discounts 6
Unbilled revenues recognized
under rate agreement (8)
Fuel recovery 4
---
$(9)
===
KWH sales billed to ultimate customers decreased 3.1 percent in
the first quarter of 1995, compared with the corresponding period
last year. The decreased sales reflect unusually mild weather
conditions in the first quarter of 1995. In view of the recent
mild weather, the Company currently forecasts essentially flat KWH
sales in 1995.
General rate change/service extension discounts includes $7
million resulting from the November 1994 expiration of the
Company's temporary rate decrease partially offset by $1 million of
<PAGE>
increased discounts under the Company's SED program.
The amount shown for unbilled revenues recognized reflects the
Company's completion of the amortization of $35 million over a 13
month period that ended December 31, 1994 in accordance with its
October 1993 rate agreement.
Operating Expenses
- ------------------
The following table summarizes the changes in operating
expenses which are discussed below:
Increase (Decrease) in Operating Expenses
First Quarter
-------------
1995 vs 1994
-------------
(In Millions)
Purchased electric energy:
Fuel costs $ 4
Purchases and demand
charges from NEP (3)
SED credits from NEP (2)
Other operation and maintenance (2)
Depreciation 1
Taxes (3)
---
$(5)
===
The reduction in other operation and maintenance reflects
decreased distribution operation and maintenance expenses and a
<PAGE>
reduction in uncollectible accounts expense offset in part by
increased employee and retiree benefit-related costs, and general
increases in other areas.
The decrease in taxes in the first quarter of 1995 is primarily
due to decreased income.
Other Income and Interest Expense
- ---------------------------------
The increase in other income reflects increased interest income
on rate adjustment mechanisms.
The increase in interest expense is due to increased long-term
and short-term debt outstanding in the first quarter of 1995, and
increased interest related to the rate adjustment mechanisms
referred to above.
Competitive Conditions
- ----------------------
The electric utility business is being subjected to increasing
competitive pressures, stemming from a combination of trends,
including increasing electric rates, improved technologies, and new
regulations and legislation intended to foster competition. See
the Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
On March 29, 1995, the Federal Energy Regulatory Commission
(FERC) issued a notice of proposed rule-making in which it stated
<PAGE>
that recovery in rates of legitimate and verifiable stranded costs
should be allowed and that direct assignment of stranded costs to
departing customers is the appropriate method for recovery of costs
stranded as the result of wholesale competition. Under the FERC
policy proposal, costs stranded as a result of retail competition
would be subject to state commission review if the state commission
has the necessary statutory authority, and subject to FERC review
if the state commission does not have such authority. A final
decision is expected in late 1995 or early 1996.
In February 1995, the MDPU initiated a proceeding regarding the
structure and regulation of the electric utility industry. The
Company, along with a coalition of environmental and independent
power producer groups, filed a set of principles which the
coalition proposes to be the basis for restructuring. The proposed
principles included provisions to allow gradually increased
customer choice while allowing utilities to recover the cost of
their past commitments, as well as provisions for protecting
residential customers, encouraging renewable resources and energy
conservation, and honoring contracts with independent power
producers. Hearings are underway. The Company cannot predict what
action the MDPU may take in this proceeding or when such action
would take place.
<PAGE>
New Accounting Standard
- -----------------------
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of (FAS 121), effective for fiscal year 1996. This
standard clarifies when and how to recognize an impairment of long-
lived assets. In addition, FAS 121 requires that all regulatory
assets be written off unless they continue to meet the criteria for
initially recording such regulatory assets. In order to be
initially recorded, a regulatory asset must have a high probability
of future recovery. However, once written off, a regulatory asset
can be restored if it again becomes probable of recovery. The
impact of this standard will be driven by the facts and
circumstances that exist when the standard is adopted and
thereafter.
Utility Plant Expenditures and Financings
- -----------------------------------------
Cash expenditures for utility plant totaled $21 million in the
first three months of 1995. The funds necessary for utility plant
expenditures during the period were primarily provided by net cash
from operating activities, after the payment of dividends, and
proceeds from the issuance of long-term debt. During the first
<PAGE>
three months of 1995, the Company issued $48 million of first
mortgage bonds bearing interest rates ranging from 7.79 percent to
8.46 percent. The Company plans to issue an additional $40 million
of first mortgage bonds in 1995.
At March 31, 1995, the Company had $69 million of short-term
debt outstanding including $61 million in the form of commercial
paper borrowings. The Company currently has lines of credit with
banks totaling $90 million. These lines of credit are available to
provide liquidity support for commercial paper borrowings and other
corporate purposes. There were no borrowings under these lines of
credit at March 31, 1995.
For the twelve-month period ending March 31, 1995, the ratio of
earnings to fixed charges was 2.64.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
Information concerning the Company's request to increase rates
filed with the Massachusetts Department of Public Utilities,
discussed in Part I of this report in Management's Discussion and
Analysis of Financial Condition and Results of Operations, is
incorporated herein by reference and made a part hereof.
Item 4. Submission of Matters to a Vote of Security-Holders
- ------------------------------------------------------------
On March 15, 1995, the Annual Meeting of Stockholders was
held. The following actions were taken by the unanimous vote of
the 2,398,111 shares having general voting rights represented at
the meeting:
The number of directors for the ensuing year was fixed at
eleven.
The following were elected as directors:
Urville J. Beaumont
Joan T. Bok
Sally L. Collins
John H. Dickson
Charles B. Housen
Patricia A. McGovern
John F. Reilly
John W. Rowe
Richard P. Sergel
Richard M. Shribman
Roslyn M. Watson
Michael E. Jesanis was elected Treasurer and Robert King Wulff
was elected Clerk.
Coopers & Lybrand was selected as auditor for 1995.
The indeminification provisions of the Company's by-laws were
amended by changing the definition of officers covered by such
provision.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
The Company is filing the following revised exhibit for
incorporation by reference into its registration statements on Form
S-3, Commission File Nos. 33-49453 and 33-59145.
12 Statement re computation of ratios
The Company is filing Financial Data Schedules.
The Company filed a report on Form 8-K dated March 15, 1995,
containing Item 5, Other Events.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report on Form 10-Q for
the quarter ended March 31, 1995 to be signed on its behalf by the
undersigned thereunto duly authorized.
MASSACHUSETTS ELECTRIC COMPANY
s/ Michael E. Jesanis
Michael E. Jesanis, Treasurer,
Authorized Officer, and
Principal Financial Officer
Date: May 11, 1995
Exhibit Index
<PAGE>
Exhibit Index
-------------
Exhibit Description Page
- ------- ----------- ----
12 Statement re computation of Filed herewith
ratios
27 Financial Data Schedule Filed herewith
Exhibit 12
<PAGE>
<TABLE>
MASSACHUSETTS ELECTRIC COMPANY
Computation of Ratio of Earnings to Fixed Charges
(SEC Coverage)
(Unaudited)
<CAPTION>
12 Months
Ended
March 31, 1995 Years Ended December 31,
Actual -------------------------------------------------------------
(Unaudited) 1994 1993 1992 1991 1990
-------------- ---- ---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Net Income $30,280 $34,726 $23,779 $34,905 $25,243 $35,192
- ----------
Add income taxes and fixed charges
- ----------------------------------
Current federal income taxes (7,621) (6,762) 5,606 3,977 8,568 14,681
Deferred federal income taxes 23,391 24,932 3,430 13,451 3,889 1,044
Investment tax credits - net (1,204) (1,228) (1,228) (1,228) (1,194) (1,225)
Massachusetts franchise tax 4,230 4,681 3,348 3,858 2,920 3,765
Interest on long-term debt 22,069 20,967 23,403 21,910 20,157 20,626
Interest on short-term debt and other 7,840 6,366 3,638 3,657 3,643 3,090
------- ------- ------- ------- ------- -------
Net earnings available for fixed charges $78,985 $83,682 $61,976 $80,530 $63,226 $77,173
------- ------- ------- ------- ------- -------
Fixed charges:
Interest on long-term debt $22,069 $20,967 $23,403 $21,910 $20,157 $20,626
Interest on short-term debt and other 7,840 6,366 3,638 3,657 3,643 3,090
------- ------- ------- ------- ------- -------
Total fixed charges $29,909 $27,333 $27,041 $25,567 $23,800 $23,716
======= ======= ======= ======= ======= =======
Ratio of earnings to fixed charges 2.64 3.06 2.29 3.15 2.66 3.25
- ----------------------------------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE BALANCE SHEET AND RELATED STATEMENTS OF INCOME,
RETAINED EARNINGS AND CASH FLOWS OF MASSACHUSETTS ELECTRIC
COMPANY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-END> MAR-31-1995 MAR-31-1994
<PERIOD-TYPE> 3-MOS 3-MOS
<BOOK-VALUE> PER-BOOK PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,005,333 0
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 228,320 0
<TOTAL-DEFERRED-CHARGES> 61,232 <F1> 0
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 1,294,885 0
<COMMON> 59,953 0
<CAPITAL-SURPLUS-PAID-IN> 187,172 0
<RETAINED-EARNINGS> 135,264 0
<TOTAL-COMMON-STOCKHOLDERS-EQ> 382,389 0
0 0
50,000 0
<LONG-TERM-DEBT-NET> 313,413 0
<SHORT-TERM-NOTES> 68,725 <F2> 0
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 25,000 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 455,358 0
<TOT-CAPITALIZATION-AND-LIAB> 1,294,885 0
<GROSS-OPERATING-REVENUE> 373,092 381,712
<INCOME-TAX-EXPENSE> 3,043 5,879
<OTHER-OPERATING-EXPENSES> 356,700 358,709
<TOTAL-OPERATING-EXPENSES> 359,743 364,588
<OPERATING-INCOME-LOSS> 13,349 17,124
<OTHER-INCOME-NET> 326 (1,455)
<INCOME-BEFORE-INTEREST-EXPEN> 13,675 15,669
<TOTAL-INTEREST-EXPENSE> 8,549 6,097
<NET-INCOME> 5,126 9,572
778 778
<EARNINGS-AVAILABLE-FOR-COMM> 4,348 8,794
<COMMON-STOCK-DIVIDENDS> 5,995 6,595
<TOTAL-INTEREST-ON-BONDS> 6,105 5,003
<CASH-FLOW-OPERATIONS> 9,896 8,057
<EPS-PRIMARY> 0 <F3> 0 <F3>
<EPS-DILUTED> 0 <F3> 0 <F3>
<FN>
<F1> Total deferred charges includes other assets.
<F2> Short-term notes includes commercial paper obligations and notes payable
to associated companies.
<PAGE>
<F3> Per share data is not relevant because the Company's common stock is
wholly owned by New England Electric System.
</FN>
