<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For fiscal year ended December 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
Registrant; State of
Incorporation or
Commission Organization; Address; I.R.S.Employer
File Number and Telephone Number Identification No
------------ ---------------------- ------------------
1-3446 NEW ENGLAND ELECTRIC SYSTEM 04-1663060
(A Massachusetts voluntary
association)
25 Research Drive
Westborough, Massachusetts 01582
Telephone: 508-366-9011
0-1229 NEW ENGLAND POWER COMPANY 04-1663070
(A Massachusetts corporation)
25 Research Drive
Westborough, Massachusetts 01582
Telephone: 508-366-9011
0-5464 MASSACHUSETTS ELECTRIC COMPANY 04-1988940
(A Massachusetts corporation)
25 Research Drive
Westborough, Massachusetts 01582
Telephone: 508-366-9011
0-898 THE NARRAGANSETT ELECTRIC COMPANY 05-0187805
(A Rhode Island corporation)
280 Melrose Street
Providence, Rhode Island 02907
Telephone: 401-941-1400
Indicate by check mark whether the registrants (1) have 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 registrants were required to
file such reports), and (2) have been subject to such filing
requirements for the past 90 days.
(X) Yes ( ) No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)
<PAGE>
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Outstanding at Name of each exchange
Registrant Title of each class March 14, 1995 on which registered
---------- ------------------- -------------- ---------------------
<S> <C> <C> <C>
New England Common Shares 64,969,652 New York Stock Exchange
Electric Boston Stock Exchange
System
Securities registered pursuant to Section 12(g) of the Act:
Registrant Title of each class
---------- -------------------
New England 6.00% Cumulative Preferred Stock
Power Company Dividend Series Preferred Stock
Massachusetts Cumulative Preferred Stock
Electric Company Preferred Stock - Cumulative
The Narragansett Cumulative Preferred Stock
Electric Company
Aggregate market value
of the voting stock Number of shares of
held by non-affiliates common stock outstanding
of the registrants at of the registrants at
March 14, 1995 March 14, 1995
---------------------- ------------------------
New England $2,054,665,245 64,969,652 ($1 par value)
Electric System
New England $5,049,784 6,449,896 ($20 par value)
Power Company
Massachusetts None 2,398,111 ($25 par value)
Electric Company
The Narragansett None 1,132,487 ($50 par value)
Electric Company
</TABLE>
<PAGE>
<TABLE>
Documents Incorporated by Reference
<CAPTION>
Part of Form 10-K into which
Description document is incorporated
---------------------------------- ----------------------------
<S> <C>
Portions of Annual Reports to Part II
Shareholders for the year ended
December 31, 1994 of the following
companies, as set forth in Part II
New England Electric System
New England Power Company
Massachusetts Electric Company
The Narragansett Electric Company
Portions of Proxy Statement of Part III
New England Electric System
filed in connection with its
annual meeting of shareholders to
be held on April 25, 1995, as set
forth in Part III
This combined Form 10-K is separately filed by New England Electric
System, New England Power Company, Massachusetts Electric Company, and The
Narragansett Electric Company. Information contained herein relating to
any individual company is filed by such company on its own behalf. Each
company makes no representation as to information relating to the other
companies.
</TABLE>
<PAGE>
TABLE OF CONTENTS
PAGE
GLOSSARY OF TERMS........................................... iii
PART I
ITEM 1. BUSINESS............................................ 1
THE SYSTEM.................................................. 1
System Organization.................................... 1
Employees.............................................. 3
ELECTRIC UTILITY OPERATIONS................................. 3
General................................................ 3
Results of Operations.................................. 6
Competitive Conditions................................. 7
Rates.................................................. 10
General............................................. 10
NEP Rates........................................... 11
Mass. Electric Rates................................ 12
Narragansett Rates.................................. 13
Granite State Rates................................. 15
Recovery of Demand Side Management Expenditures..... 15
Generation............................................. 16
Energy Mix.......................................... 16
Electric Utility Properties......................... 16
Map - Electric Utility Properties................... 19
Fuel for Generation................................. 20
Non-Utility Power Producer Information.............. 22
Nuclear Units....................................... 24
Regulatory and Environmental Matters................... 31
Regulation.......................................... 31
Hydroelectric Project Licensing..................... 31
Environmental Requirements.......................... 32
Resource Planning...................................... 36
Corporate Resource Plans............................ 36
Construction and Financing.......................... 37
Research and Development............................ 42
OIL AND GAS OPERATIONS...................................... 42
General................................................ 42
Results of Operations.................................. 44
Oil and Gas Properties................................. 45
Capital Requirements and Financing..................... 46
Map - Major Oil and Gas Properties..................... 47
EXECUTIVE OFFICERS.......................................... 48
ITEM 2. PROPERTIES.......................................... 52
ITEM 3. LEGAL PROCEEDINGS................................... 52
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. 52
-i-
<PAGE>
PAGE
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED SECURITY HOLDER MATTERS..................... 53
ITEM 6. SELECTED FINANCIAL DATA............................. 53
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS................. 54
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA......... 54
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE................. 55
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. 55
ITEM 11. EXECUTIVE COMPENSATION............................. 59
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT......................................... 70
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..... 72
PART IV
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K................... 73
INDEX TO FINANCIAL STATEMENTS............................... 99
-ii-
<PAGE>
GLOSSARY OF TERMS
Term Meaning
---- -------
AFDC allowance for funds used during construction
ANR ANR Pipeline Company
Algonquin Algonquin Gas Transmission Company
Brayton 4 Brayton Point Unit 4
C&LM Conservation and Load Management
Columbia Columbia Gas Transmission Company
Connecticut Yankee Connecticut Yankee Atomic Power Company
CRP component removal project
CWIP construction work in progress
DC direct current
DOE U.S. Department of Energy
DOER Massachusetts Division of Energy Resources
DOMAC Distrigas Corporation of Massachusetts
DSM demand-side management
EMF electric and magnetic fields
EPA U.S. Environmental Protection Agency
FERC Federal Energy Regulatory Commission
Firm Energy Contract agreement between NEPOOL members and Hydro-
Quebec
Granite State Granite State Electric Company
GMP Green Mountain Power
Interconnection transmission interconnection between
participating New England utilities
and Hydro-Quebec
Iroquois Iroquois Gas Transmission System
KWH kilowatthour
Maine Yankee Maine Yankee Atomic Power Company
Mass. Electric Massachusetts Electric Company
Mass. Hydro New England Hydro-Transmission Electric
Company, Inc.
MDPU Massachusetts Department of Public Utilities
MPLP Milford Power Limited Partnership
MRS Monitored Retrievable Storage
NEC Nantucket Electric Company
Narragansett The Narragansett Electric Company
NEEI New England Energy Incorporated
NEERI New England Electric Resources, Inc.
NEES New England Electric System
NEET New England Electric Transmission
Corporation
NEP New England Power Company
NEPOOL New England Power Pool
N.H. Hydro New England Hydro-Transmission Corporation
NHPUC New Hampshire Public Utilities Commission
NOx nitrogen oxide
NRC Nuclear Regulatory Commission
NU Northeast Utilities
-iii-
<PAGE>
GLOSSARY OF TERMS
Term Meaning
---- -------
OSP Ocean State Power
OSP II Ocean State Power II
PBOPs post-retirement benefits other than pensions
PPCA purchased power cost adjustment
PRP potentially responsible party
Pricing Policy SEC approved pricing policy between NEEI and
NEP
Resources Narragansett Energy Resources Company
Retail Companies Mass. Electric, Narragansett, and Granite
State
RIPUC Rhode Island Public Utilities Commission
RTG regional transmission working group
Samedan Samedan Oil Corporation
Seabrook 1 Seabrook Nuclear Generating Station Unit 1
SEC Securities and Exchange Commission
SED service extension discount
Service Company New England Power Service Company
SO2 sulphur dioxide
SPCC Spill prevention control and counter-measure
System the subsidiaries of NEES collectively
Tennessee Tennessee Gas Pipeline Company
TransCanada TransCanada PipeLines, Ltd.
Vermont Yankee Vermont Yankee Nuclear Power Corporation
Yankee Atomic Yankee Atomic Electric Company
Yankee Companies Yankee Atomic, Vermont Yankee, Maine Yankee,
and Connecticut Yankee
1935 Act Public Utility Holding Company Act of 1935
-iv-
<PAGE>
PART I
Item 1. BUSINESS
THE SYSTEM
SYSTEM ORGANIZATION
New England Electric System (NEES) is a voluntary association created under
Massachusetts law on January 2, 1926, and is a registered holding company under
the Public Utility Holding Company Act of 1935 (the 1935 Act). NEES owns voting
stock in the amounts indicated of the following companies, which together
constitute the System.
% Voting
Securities
State of Type of Owned by
Name of Company Organization Business NEES
--------------- ------------ --------- ----------
Subsidiaries:
Granite State Electric Company N.H. Retail 100
(Granite State) Electric
Massachusetts Electric Company Mass. Retail 100
(Mass. Electric) Electric
The Narragansett Electric CompanyR.I. Retail 100
(Narragansett) Electric
Narragansett Energy Resources R.I. Wholesale 100
Company (Resources) Electric
Generation
New England Electric Resources, Inc.Mass. Consulting 100
(NEERI) Services
New England Electric TransmissionN.H. Electric 100
Corporation (NEET) Transmission
New England Energy Incorporated Mass. Oil and Gas 100
(NEEI) Exploration
& Development
New England Hydro-Transmission N.H. Electric 53.97(a)
Corporation (N.H. Hydro) Transmission
New England Hydro-Transmission Mass. Electric 53.97(a)
Electric Company, Inc. Transmission
(Mass. Hydro)
New England Power Company (NEP) Mass. Wholesale 98.85(b)
Electric
Generation &
Transmission
New England Power Service CompanyMass. Service 100
(Service Company) Company
<PAGE>
(a) The common stock of these subsidiaries is owned by NEES and
certain participants (or their parent companies) in Phase II
of the Hydro-Quebec project. See Interconnection with Quebec,
page 23.
(b) Holders of common stock and 6% Cumulative Preferred Stock of
NEP have general voting rights. The 6% Cumulative Preferred
Stock represents 1.15% of the total voting power.
The facilities of NEES' three retail electric subsidiaries,
Mass. Electric, Narragansett, and Granite State (collectively
referred to as the Retail Companies), and of its principal
wholesale electric subsidiary, NEP, constitute a single integrated
electric utility system that is directly interconnected with other
utilities in New England and New York State, and indirectly
interconnected with utilities in Canada. See ELECTRIC UTILITY
OPERATIONS, page 3.
NEET owns and operates a portion of an international
transmission interconnection between the electric systems of
Hydro-Quebec and New England. Mass. Hydro and N.H. Hydro own and
operate facilities in connection with an expanded second phase of
this interconnection. See Interconnection with Quebec, page 23.
NEEI is engaged in various activities relating to fuel supply
for the System. These activities primarily include participation
(principally through a partnership with a non-affiliated oil
company) in domestic oil and gas exploration, development, and
production (see OIL AND GAS OPERATIONS, page 42) and the sale to
NEP of fuel purchased in the open market.
Resources is a general partner, with a 20% interest, in each
of two partnerships formed in connection with the Ocean State Power
project. See Ocean State Power, page 23.
The Service Company has contracted with NEES and its
subsidiaries to provide, at cost, such administrative, engineering,
construction, legal, and financial services as the companies
request.
NEERI is a wholly-owned, non-utility subsidiary of NEES which
provides consulting and independent project development services
domestically and internationally to non-affiliates and seeks
investment opportunities in power plant modernization,
transmission, and environmental improvement. NEERI also provides
maintenance and construction services under contract to certain
non-affiliated utility customers.
<PAGE>
EMPLOYEES
As of December 31, 1994, NEES subsidiaries had approximately
5,000 employees. As of that date, the total number of employees
was approximately 840 at NEP, 1,790 at Mass. Electric, 770 at
Narragansett, 80 at Granite State, and 1,520 at the Service
Company. Of the 5,000 employees, approximately 3,150 are members
of labor organizations. Collective bargaining agreements with the
Brotherhood of Utility Workers of New England, Inc., the
International Brotherhood of Electrical Workers, and the Utility
Workers Union of America, AFL-CIO expire in May 1995. Negotiation
of new contracts with these unions is in progress.
ELECTRIC UTILITY OPERATIONS
GENERAL
NEP's business is principally generating, purchasing,
transmitting, and selling electric energy in wholesale quantities.
In 1994, 94% of NEP's revenue from the sale of electricity was
derived from sales for resale to affiliated companies and 6% from
sales for resale to municipal and other utilities. NEP is the
wholesale supplier of the electric energy requirements of the
Retail Companies under contracts that require seven years notice of
termination. Narragansett receives credits against its purchases
of power from NEP for the cost of generation from its Providence
units, which are functionally integrated with NEP's facilities to
achieve maximum economy and reliability. Discussions of NEP's
generating properties, load growth, energy mix, and fuel supplies
include the related properties of Narragansett. For details of
sales of energy and operating revenue for the last five years, see
OPERATING STATISTICS on page 24 of the New England Power Company
1994 Annual Report to Stockholders (the NEP 1994 Annual Report).
The combined service area of the Retail Companies constitutes
the retail service area of the System and covers more than 4,400
square miles with a population of about 3,000,000 (1990 census).
See Map, page 19. The largest cities served are Worcester, Mass.
(population 170,000) and Providence, R.I. (population 161,000).
Mass. Electric and Narragansett are engaged principally in the
distribution and sale of electricity at retail. Mass. Electric
provides approximately 940,000 customers with electric service at
retail in a service area comprising approximately 43% of the area
of The Commonwealth of Massachusetts. The population of the
service area is about 2,160,000 or 36% of the total population of
the Commonwealth (1990 Census). Mass. Electric's territory
consists of 149 cities and towns including rural, suburban, and
urban communities with Worcester, Lowell, and Quincy being the
largest cities served. The economy of the area is diversified.
Principal industries served by Mass. Electric include electrical
and industrial machinery, computer manufacturing and related
products, plastic goods, fabricated metals and paper, and chemical
products. In addition, a broad range of professional, banking,
<PAGE>
high-technology, medical, and educational concerns is served.
During 1994, 41% of Mass. Electric's revenue from the sale of
electricity was derived from residential customers, 37% from
commercial customers, 21% from industrial customers, and 1% from
others. In 1994, the 20 largest customers of Mass. Electric
accounted for approximately 7% of its electric revenue. For
details of sales of energy and operating revenue for the last five
years, see OPERATING STATISTICS on page 21 of Mass. Electric's 1994
Annual Report to Stockholders (the Mass. Electric 1994 Annual
Report).
Narragansett provides approximately 324,000 customers with
electric service at retail. Its service territory, which includes
urban, suburban, and rural areas, covers about 839 square miles or
80% of the area of Rhode Island, and encompasses 27 cities and
towns including the cities of Providence, Warwick, Cranston, and
East Providence. The population of the area is about 725,000
(1990 Census) which represents about 72% of the total population of
the state. The economy of the territory is diversified. Principal
industries served by Narragansett produce fabricated metal
products, jewelry, silverware, electrical and industrial machinery,
transportation equipment, textiles, and chemical and allied
products. In addition, a broad range of professional, banking,
medical, and educational institutions is served. During 1994, 43%
of Narragansett's revenue from the sale of electricity was derived
from residential customers, 40% from commercial customers, 16% from
industrial customers, and 1% from others. In 1994, the 20 largest
customers of Narragansett accounted for approximately 10% of its
electric revenue. For details of sales of energy and operating
revenue for the last five years see OPERATING STATISTICS on page 21
of Narragansett's 1994 Annual Report to Stockholders (the
Narragansett 1994 Annual Report).
Granite State provides approximately 35,000 customers with
electric service at retail in the State of New Hampshire in a
service area having a population of about 73,000 (1990 Census),
including the city of Lebanon and the towns of Hanover, Pelham,
Salem and surrounding communities. During 1994, 48% of Granite
State's revenue from the sale of electricity was derived from
commercial customers, 39% from residential customers, 12% from
industrial customers, and 1% from others. In 1994, the 10 largest
customers of Granite State accounted for about 20% of its electric
revenue. Granite State is not subject to the reporting
requirements of the Securities Exchange Act of 1934, and its
financial impact on the System is relatively small. Information on
Granite State is provided herein solely for the purpose of
furnishing a more complete description of System operations.
On March 22, 1995, NEES agreed to acquire Nantucket Electric
Company for $3.5 million. Completion of the acquisition is
dependent on the receipt of regulatory approvals as well as the
licensing of a transmission cable to Nantucket Island.
The electric utility business of NEP and the Retail Companies
is not highly seasonal. For NEP and the Retail Companies,
industrial customers are broadly distributed among standardized
<PAGE>
industrial classifications. No single industrial classification
exceeds 3% of operating revenue, and no single customer of the
System contributes more than 1% of operating revenue.
<PAGE>
<TABLE>
RESULTS OF OPERATIONS
The following is the detail of consolidated sales and revenue
from sales of electricity by the System for the last five years.
<CAPTION>
Sales of Electricity
(in thousands of KWH)
---------------------
Classification 1994 1993 1992 1991 1990
-------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Residential 7,879,747 7,749,514 7,666,992 7,584,426 7,662,240
Commercial 8,266,754 8,064,024 7,851,859 7,757,350 7,808,422
Industrial 4,858,638 4,863,059 4,870,612 4,955,001 5,074,229
Other 149,724 154,981 164,450 173,639 182,092
---------- ---------- ---------- ---------- ----------
Total Sales
to Ultimate
Customers 21,154,863 20,831,578 20,553,913 20,470,416 20,726,983
Sales for
Resale 2,289,091 1,958,499 2,125,463 3,031,660 1,834,162
---------- ---------- ---------- ---------- ----------
Total 23,443,954 22,790,077 22,679,376 23,502,076 22,561,145
---------- ---------- ---------- ---------- ----------
Revenues from Sales of Electricity
(in thousands of dollars)
----------------------------------
Classification 1994 1993 1992 1991 1990
-------------- ---- ---- ---- ---- ----
Residential $ 812,958 $ 814,890 $ 775,973 $ 729,313 $ 677,447
Commercial 741,750 739,031 728,645 687,605 635,822
Industrial 380,931 399,524 408,243 398,684 376,736
Other 24,639 24,672 24,776 24,900 24,080
---------- ---------- ---------- ---------- ----------
Total Sales
to Ultimate
Customers 1,960,278 1,978,117 1,937,637 1,840,502 1,714,085
Unbilled
Revenue 36,591 11,100 - - -
Sales for
Resale 88,922 80,556 82,580 102,411 89,895
---------- ---------- ---------- ---------- ----------
Total $2,085,791 $2,069,773 $2,020,217 $1,942,913 $1,803,980
---------- ---------- ---------- ---------- --------------------
</TABLE>
<PAGE>
Kilowatthour (KWH) sales billed to ultimate customers in 1994
increased by 1.6% over 1993, reflecting an improved economy. KWH
sales in 1993 increased 1.4 percent over 1992 sales, reflecting
more normal weather conditions in 1993 compared with 1992,
partially offset by the fact that 1992 included an extra day for
leap year. In view of the recent mild weather, the Retail
Companies currently forecast essentially flat KWH sales in 1995.
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. To
date, this competition has been most prominent in the bulk power
market in which non-utility generating sources have noticeably
increased their market share. For example, since non-utilities
were allowed to enter the wholesale generation market, two-thirds
of NEP's new generating capability has come from independent
generating sources and Hydro-Quebec.
Electric utilities are also facing increased competition in the
retail market. Currently, retail competition includes competition
with alternative fuel suppliers (including natural gas companies)
for heating and cooling, competition with customer-owned generation
to displace purchases from electric utilities, and direct
competition among electric utilities to attract major new
facilities to their service territories. Electric utilities,
including the Retail Companies, are under increasing pressure from
large commercial and industrial customers to discount rates or face
the possibility that such customers might relocate or seek
alternate suppliers. Across the country, including the states
serviced by the Retail Companies, there have been an increasing
number of proposals to allow retail customers to choose their
electricity supplier, with utilities required to deliver that
electricity over their transmission and distribution systems. In
Massachusetts, the Massachusetts Division of Energy Resources
(DOER) proposed in January 1995 that the Massachusetts Department
of Public Utilities (MDPU) modify its regulations to allow retail
utility customers to choose a supplier and bid for access to the
local utility's transmission and distribution systems in situations
where new generating capacity is needed. The System has indicated
its support for the DOER proposal and is developing a pilot program
to implement the proposal. Also in Massachusetts, in February
1995, the MDPU initiated a proceeding regarding electric industry
regulation and structure. Legislation has been introduced in
Massachusetts this year that would allow municipalities to set up
service districts and shop for power among competing utilities. In
Rhode Island a task force of utilities, commercial and industrial
customers, and other interested parties has been established to
prepare a report to the Rhode Island Public Utilities Commission
(RIPUC) by May 1995 regarding restructuring the industry. In New
Hampshire, the New Hampshire Public Utilities Commission (NHPUC) is
considering the proposal of a new company to sell electricity at
<PAGE>
retail to large customers and has opened a series of roundtable
discussions to address competition in the industry. In response to
a number of bills introduced this session, the New Hampshire House
of Representatives has approved a bill to establish a study
committee to consider electric utility industry restructuring and
competitiveness. The study committee report is due in November
1995. The conclusions of these legislative and commission
activities and their effect on the Retail Companies is uncertain at
this time.
The impact of increased customer choice on the financial
condition of utilities is uncertain. In recent years, substantial
surplus generating capacity in the Northeast has resulted in the
sale of bulk power by utilities to other utilities at prices
substantially below the total costs of owning and operating, or
contracting for, such generating capacity. Should retail customers
gain access to the bulk power market, particularly while surplus
capacity exists, it is unlikely that utilities would be able to
charge power prices which fully cover their costs. Such
unrecovered costs, which could be substantial, have been referred
to by the industry as stranded costs.
Whether and to what extent utilities should be able to recover
stranded costs resulting from increased customer choice has been
the subject of much debate. In 1994, the Federal Energy Regulatory
Commission (FERC) issued a notice of proposed rule-making on the
recovery of stranded costs. The System and other utilities have
taken the position that when a regulatory body changes policies
which govern customer choice and the resultant rates paid by
customers, utilities must be compensated for commitments made under
the former policies. Furthermore, the utility industry believes
that recovery of stranded costs is necessary to promote efficient
competition among market participants. Previously, the FERC ruled
in 1992, in a proceeding not involving NEES subsidiaries, that a
utility may recover such stranded costs from a departing wholesale
requirements customer. On appeal, the United States Court of
Appeals for the District of Columbia Circuit has questioned whether
allowing utilities to recover stranded costs is anti-competitive
and the Court remanded the case back to the FERC for further
proceedings and development of the competitive issues.
In addition to the arguments described above, the System has
taken the position that, because utility transmission and
distribution assets have a replacement value in excess of their
historic costs (on which utility rates are set), utilities should
have the ability to recover stranded generation-related costs by
realizing the higher value of transmission and distribution assets.
The System has stated its willingness, in order to assure stranded
cost recovery and promote increased competition, to consider
divesting its transmission system, either through sale or spinoff.
The System is actively responding to current and anticipated
competitive pressures in a variety of ways, including cost control
and a 1993 corporate reorganization into separate retail and
wholesale business units. The wholesale business unit has
responded to increased competition by freezing base rates until at
<PAGE>
least 1997 (wholesale base rates were last raised in March 1992),
terminating certain purchased power and gas pipeline contracts,
shutting down uneconomic generating stations, and accelerating the
recovery of uneconomic assets and other deferred costs. In
addition, NEP's wholesale tariff requires its wholesale customers,
including the Retail Companies, to provide seven years notice
before they may terminate the tariff.
The retail business unit's response to competition includes the
EnergyFIT program which offers comprehensive value-added services
for large business customers, intensified business development
efforts including economic development rates and service packages
to encourage businesses to locate in the Retail Companies' service
territories, and development of new pricing and service options for
customers. Additionally, more than 80 percent of the Retail
Companies' large commercial and industrial customers have signed
agreements requiring three to five years notice before they may
change electricity suppliers. See Retail rate activity section,
page 12. As part of its long-term planning process, the System is
from time to time evaluating other strategies, such as business
combinations and other forms of restructuring, to better respond to
the changing competitive environment.
The System is also responding to anticipated competition by
participating in negotiations regarding possible new regional
structures in the industry. The FERC encouraged parties with
interests in the wholesale power market to resolve, on a consensual
basis, issues related to use of the transmission system as part of
a more competitive industry. In response, the System is
participating in a New England regional transmission working group
(RTG). The RTG is trying to resolve such issues as stranded cost
recovery, transmission pricing, and transmission planning and
reliability. The System is also participating in a committee to
reform the New England Power Pool (NEPOOL). NEPOOL is a group of
over 90 New England entities that own or purchase power from
virtually all of New England's generation. In January 1995, this
committee recommended that NEPOOL membership be expanded to include
all those with interests in bulk power market. This recommendation
has been adopted by NEPOOL. The reform committee is now
considering how to maintain reliability and central dispatch and
achieve efficiency in a more competitive environment.
Electric utility rates are generally based on a utility's
costs. As a result, electric utilities are subject to certain
accounting standards that are not applicable to other business
enterprises in general. These accounting rules require regulated
entities, in appropriate circumstances, to establish regulatory
assets and liabilities, which defer the income statement impact of
certain costs that are expected to be recovered in future rates.
The effects of competition could ultimately cause the operations of
the System, or a portion thereof, to cease meeting the criteria for
application of these accounting rules. In such an event,
accounting standards applicable to enterprises in general would
apply and immediate write-off of any previously deferred costs
(regulatory assets) would be necessary in the year in which these
criteria were no longer applicable. In addition, if, because of
<PAGE>
competition, utilities are unable to recover all of their costs in
rates, it may be necessary to write off those costs that are not
recoverable.
RATES
General
In 1994, 73% of the System's electric utility revenues was
attributable to NEP, whose rates are subject to regulation by the
FERC. The rates of Mass. Electric, Narragansett, and Granite State
are subject to the respective jurisdictions of the state regulatory
commissions in Massachusetts, Rhode Island, and New Hampshire.
The rates of each of the Retail Companies contain a purchased
power cost adjustment clause (PPCA). The PPCA is designed to allow
the Retail Companies to pass on to their customers changes in
purchased power expense resulting from changes allowed by the FERC
in NEP's rates. PPCA changes become effective on the dates
specified in the filing of the adjustments with the state
regulatory commission (not earlier than 30 days after such filing)
unless the state regulatory commission orders otherwise. There
have been, on occasion, regulatory delays in permitting PPCA
increases. Narragansett and Granite State rates have PPCA clauses
that fully reconcile on an annual basis purchased power expenses
incurred by the companies against purchased power related revenues.
Under a case decided by the Rhode Island Supreme Court in 1977
(Narragansett v. Burke), NEP's wholesale rates must be accepted as
allowable expenses for rate-making purposes by state commissions in
retail rate proceedings. In 1986 and 1988 the U.S. Supreme Court
reaffirmed this doctrine in two cases that did not involve NEP.
However, the Narragansett v. Burke doctrine has been indirectly
challenged by a number of state regulatory commissions which have
held that federal preemption of the regulation of wholesale
electric rates does not preclude the state commission from
reviewing the prudence of a utility's decision to purchase power
under a FERC-approved rate, and from disallowing costs if it finds
that the purchase was an imprudent choice among alternative
sources. In a 1985 opinion, the New Hampshire Supreme Court took
this position on the issue of state regulation of wholesale power
purchases. Also, legislation has been filed from time to time in
Congress that would have eroded or repealed the doctrine. If state
commissions were to refuse to allow the Retail Companies to include
the full cost of power purchased from NEP in their rates, System
earnings could be adversely affected.
The rates of NEP and the Retail Companies contain fuel
adjustment clauses that allow the rates to be adjusted to reflect
changes in the cost of fuel. NEP's fuel clause is on a current
basis. Mass. Electric has a fuel clause billing procedure that
provides for billing of fuel costs estimated on a quarterly basis,
while fuel costs billed by Narragansett and Granite State are
estimated on a semi-annual basis. Billings are adjusted in the
<PAGE>
subsequent period for any excess or deficiency in fuel cost
recovery.
The FERC rules allow up to 50% of construction work in progress
(CWIP) to be included in rate base in addition to CWIP already
allowed in rate base for fuel conversion projects or pollution
control facilities. This rule allows NEP the option of recovering
currently through rates a portion of the costs of financing its
construction program, rather than recording allowance for funds
used during construction (AFDC) on that portion.
The FERC rules with regard to canceled plants provide that
utilities may recover in rates only 50% of prudently incurred
cancelled plant costs. However, the FERC allows utilities to
include the recoverable amount in rate base and earn a return on
the unamortized balance.
NEP Rates
W-95 Rate Case
In February 1995, the FERC approved a rate agreement filed by
NEP. Under the agreement, which is effective January 1995, NEP's
base rates will be frozen until 1997. Before this rate agreement,
NEP's rate structure contained two surcharges which were recovering
the costs of a coal conversion project and a portion of NEP's
investment in the Seabrook I Nuclear Unit (Seabrook 1). Under the
rate agreement, these two surcharges, which were due to expire in
mid-1995, will be rolled into base rates. The agreement also
provides for the costs resulting from the Manchester Street Station
repowering project, which is expected to be completed in late-1995,
to be included in base rates, without a rate increase. In
addition, the agreement allows NEP to recover approximately $50
million of deferred costs associated with terminated purchased
power contracts and postretirement benefits other than pensions
(PBOPs) over seven years. The agreement also provides for full
current recovery of PBOP costs commencing in 1995. The agreement
further provides for the recovery over three years of $27 million
of costs related to the dismantling of a retired Narragansett
generating station and the replacement of a turbine rotor at one of
NEP's generating units. The agreement also increases NEP's
recovery of depreciation expense by approximately $8 million
annually to recognize costs associated with the eventual
dismantling of its Brayton Point and Salem Harbor generating
plants.
Under the agreement, approximately $15 million of the $38
million in Seabrook 1 costs due to be recovered in 1995 pursuant to
a 1988 settlement agreement will be deferred and recovered in 1996.
The agreement further allows for deferral of additional purchased
power contract termination costs and any increases in nuclear
decommissioning payments for recovery in future rates. Yankee
Atomic Electric Company, of which NEP is a 30 percent owner,
recently announced a new decommissioning cost estimate, which, if
approved by the FERC, would increase annual billings to NEP by $11
<PAGE>
million, beginning in late 1995 and ending in July 2000. (See
Nuclear Units, page 24).
The settlement rates provide for approximately $24 million in
revenues in 1996 to complete the amortization of pre-1988 Seabrook
1 costs and the costs associated with the cancelled Seabrook 2
nuclear unit. To the extent the settlement rates stay in effect
beyond 1996, the agreement provides that these revenues be applied
first to accelerate recovery of deferred PBOP costs, and then to
additional amortization of NEP's investment in the Millstone 3
nuclear unit.
Finally, the agreement provided that NEP would reimburse its
wholesale customers for approximately $15 million of discounts
provided by these customers under service extension discount (SED)
programs. Under these programs, retail customers are entitled to
such discounts only if they have signed an agreement not to
purchase power from another supplier or generate any additional
power themselves for a three to five year period.
The FERC's approval of this rate agreement applies to all of
NEP's customers except the Town of Norwood, Massachusetts and the
Milford Power Limited Partnership (MPLP), who intervened in the
rate case. See LEGAL PROCEEDINGS regarding a lawsuit initiated by
MPLP, page 52. A separate hearing will be conducted to determine
the appropriate rate to charge these two parties, who represent
less than 2 percent of NEP's sales.
W-92 Rate Case
In May 1992, the FERC approved a settlement of NEP's W-92 rate
case under which base rates were increased by $39.7 million,
effective March 1992. The entire increase was attributable to
costs associated with the commercial operation of Unit 2 of the
Ocean State Power (OSP) generating facility. These costs had been
collected through NEP's fuel clause since the unit entered service
in late 1991. The settlement also incorporated new depreciation
rates proposed in NEP's filing, which reduced NEP's overall revenue
requirement by $18 million.
Mass. Electric Rates
Rate schedules applicable to electric services rendered by
Mass. Electric are on file with the MDPU.
On March 15, 1995, Mass. Electric filed a request with the MDPU
to increase its base rates by $62 million, effective October 1,
1995. As an alternative to this proposed increase, Mass. Electric
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 Mass.
Electric's rates to rates of all electric utilities in
Massachusetts. Mass. Electric is the first electric utility in the
state to file under the MDPU's incentive ratemaking guidelines
issued in February 1995.
<PAGE>
Mass. Electric also proposed a new discount program for large
industrial customers that are willing to make a minimum annual
usage commitment for a period of five years. The discounts would
range from 5 percent to 12.5 percent of base rates depending on a
customer's level of commitment. Mass. Electric expects an MDPU
decision on its filing in late September 1995.
In 1993, the MDPU approved a rate agreement filed by Mass.
Electric, the Massachusetts Attorney General, and two groups of
large commercial and industrial customers.
Under the agreement, effective December 1, 1993, Mass. Electric
implemented an 11-month general rate decrease of $26 million
(annual basis). This rate reduction continued in effect through
October 31, 1994, at which time rates increased to the previously
approved levels. Mass. Electric also agreed not to further
increase its base rates before October 1, 1995. The agreement also
provided for the recognition of unbilled revenues for accounting
purposes. Unbilled revenues at September 30, 1993 of approximately
$35 million were amortized to income over 13 months commencing
December 1993.
The agreement further provided for rate discounts for large
commercial and industrial customers who signed agreements to give
a five year notice to Mass. Electric before they purchase power
from another supplier or generate any additional power themselves.
The notice provision may be reduced from five to three years under
certain conditions. The aggregate amount of these SEDs was $4
million during 1994 but will increase in 1995 to approximately $10
million per year under the terms of the agreement.
Customers representing approximately 88 percent of revenue from
currently eligible large commercial and industrial customers have
signed these agreements. The discounts are currently available to
customers with average monthly peak demands over 500 kilowatts.
However, as part of its March 1995 rate filing with the MDPU, the
Company proposed expanding this program to customers with average
monthly peak demands over 200 kilowatts. In addition, commencing
in 1995 the cost of these discounts is being passed on to NEP.
This is the result of a NEP rate settlement that was approved by
the FERC in early 1995.
The 1993 agreement also resolved all rate recovery issues
associated with environmental remediation costs of Massachusetts
manufactured gas waste sites formerly owned by Mass. Electric and
its affiliates, as well as certain other Mass. Electric
environmental cleanup costs. See Hazardous Substances, page 33.
Effective October 1992, the MDPU authorized a $45.6 million
annual increase in rates for Mass. Electric.
Narragansett Rates
Rate schedules applicable to electric services rendered by
Narragansett are on file with the RIPUC and the Rhode Island
Division of Public Utilities and Carriers.
<PAGE>
On March 1, 1995, Narragansett filed with the RIPUC a request
to increase its base rates by $30.5 million to be effective
December 1995. As part of its filing, Narragansett proposed a
special rate discount of 8 percent of base rates, for manufacturing
customers that agree to give Narragansett a five-year notice before
they purchase power from another supplier or generate any
additional power themselves. Narragansett had also proposed, as an
alternative to the December 1995 effective date, to phase its
requested rate increase in two steps--the first step in June 1995
($13 million) and the second step in June 1996. In an open meeting
on March 28, 1995, the RIPUC rejected the alternative phased
proposal.
In July 1994, the RIPUC approved a rate agreement between
Narragansett and the Rhode Island Division of Public Utilities and
Carriers that provides for a 5 percent base rate discount,
excluding fuel costs, for Narragansett's large commercial and
industrial customers who sign an agreement to give a five-year
notice to Narragansett before they purchase power from another
supplier or generate any additional power themselves. The notice
provision may be reduced from five to three years under certain
conditions. The aggregate amount of Narragansett's discounts was
$1.5 million in 1994 and is expected to be approximately $3 million
per year thereafter. Customers representing over 64 percent of
revenues from large commercial and industrial customers have signed
these agreements. In addition, commencing in 1995 the cost of
these discounts is being passed on to NEP. This is the result of
a NEP rate settlement that was approved by the FERC in early 1995.
The agreement also provides for Narragansett to recognize, for
accounting purposes, $14 million of unbilled revenues over a 21
month period beginning April 1994 through December 1995.
Effective March 1993, the RIPUC approved a new PPCA mechanism
for the recovery of all of Narragansett's purchased power costs,
excluding fuel charges which continue to be recovered through a
separate adjustment mechanism. Under the new mechanism any over or
under-collections of purchased power expense will ultimately be
passed on to customers including the effects of peak-demand billing
fluctuations. Narragansett accrues the effects of this new
mechanism on its books on a current basis. In August 1994, the
RIPUC gave notice that it intends to open a proceeding to consider
the effect of fuel adjustment clauses on utility incentives to
reduce costs.
Effective January 1993, the RIPUC approved a $1.5 million
increase in rates for Narragansett, representing the first step of
a three year phase-in of Narragansett's recovery of costs
associated with PBOPs. The second and third $1.5 million increases
took effect in January 1994 and 1995, respectively.
A 1986 Rhode Island Supreme Court decision held that the
RIPUC's rate-making power includes the authority to order refunds
of amounts earned in excess of an allowed return. As a result, the
RIPUC monitors Narragansett's earnings on a regular basis.
<PAGE>
Effective May 1992, the RIPUC authorized a $3.5 million annual
increase in rates for Narragansett.
Granite State Rates
Effective March 1993, the NHPUC authorized a $2.0 million rate
increase for Granite State, with a retroactive adjustment to
September 15, 1992 to reflect the difference between the authorized
amount and the $1.4 million Granite State had been collecting on an
interim basis since September 15, 1992.
Effective July 1, 1993, the NHPUC approved a $0.7 million
increase in rates for Granite State to recover costs associated
with PBOPs.
Granite State intends to file a rate case with the NHPUC in
1995.
Recovery of Demand-Side Management Expenditures
The three Retail Companies offer conservation and load
management programs, usually referred to in the industry as Demand-
Side Management (DSM) programs, which are designed to help
customers use electricity efficiently, as a part of meeting the
System's future resource needs and customers' needs for energy
services.
The Retail Companies regularly file their DSM programs with
their respective regulatory agencies and have received approval to
recover DSM program expenditures in rates on a current basis.
Mass. Electric's expenditures were $59 million, $47 million, and
$44 million in 1994, 1993, and 1992, respectively. Narragansett's
expenditures were $10 million, $12 million, and $12 million in
1994, 1993, and 1992, respectively. Since 1990, the Retail
Companies have been allowed to earn incentives based on the results
of their DSM programs. The Retail Companies must be able to
demonstrate the electricity savings produced by their DSM programs
to their respective state regulatory agencies before incentives are
recorded. Mass Electric recorded $7.1 million, $6.7 million, and
$8.6 million of before-tax incentives in 1994, 1993, and 1992,
respectively. Narragansett recorded $0.6 million, $0.5 million,
and $1.3 million of before-tax incentives in 1994, 1993, and 1992,
respectively. The Retail Companies have received regulatory orders
that will give them the opportunity to continue to earn incentives
based on 1995 DSM program results.
<PAGE>
GENERATION
Energy Mix
The following table displays the contributions of various fuel
sources and other generation to total net generation of electricity
by NEP during the past three years, as well as an estimate for
1995:
% of Net Generation
--------------------------
Estimated Actual
--------- ----------------
1995 1994 1993 1992
---- ---- ---- ----
Coal 38 37 38 41
Nuclear 17 19 18 18
Gas (1) 21 16 16 15
Oil 7 10 11 10
Hydroelectric 6 6 6 6
Hydro-Quebec 6 6 5 4
Renewable Non-Utility
Generation (2) 5 6 6 6
--- ---- --- ---
100 100 100 100
(1) Gas includes both utility and non-utility generation.
(2) Waste to energy and hydro.
Electric Utility Properties
The electric utility properties of the System companies consist
of NEP's and Narragansett's fossil-fuel base load and intermediate
load steam generating units, conventional and pumped storage
hydroelectric stations, internal combustion peaking units, portions
of fossil fuel and nuclear generating units, the ownership
interests of NEET, Mass. Hydro, and N.H. Hydro in the Hydro-Quebec
Interconnection, and an integrated system of transmission lines,
substations, and distribution facilities. See MAP - ELECTRIC
UTILITY PROPERTIES, page 19.
NEP's integrated system consists of 2,283 circuit miles of
transmission lines, 117 substations with an aggregate capacity of
13,718,088 kVA, and 7 pole or conduit miles of distribution lines.
The properties of Mass. Electric and Narragansett include
substations and distribution and transmission lines, which are
interconnected with transmission and other facilities of NEP. At
December 31, 1994, Mass. Electric owned 256 substations, which had
an aggregate capacity of 2,825,364 kVA, 146,998 line transformers
with the capacity of 7,541,289 kVA, and 15,872 pole or conduit
miles of distribution lines. Mass. Electric also owns 81 circuit
miles of transmission lines. At December 31, 1994, Narragansett
owned 238 substations, which had an aggregate capacity of 2,729,519
<PAGE>
kVA, 52,015 line transformers with the capacity of 2,206,465 kVA,
and 4,378 pole or conduit miles of distribution lines.
Narragansett, in addition, owns 337 circuit miles of transmission
lines.
Substantially all of the properties and franchises of Mass.
Electric, Narragansett, and NEP are subject to the liens of
indentures under which mortgage bonds have been issued. For
details of the mortgage liens on these properties see the long-term
debt note in Notes to Financial Statements in each of these
companies' respective 1994 annual reports. The properties of NEET
are subject to a mortgage under its financing arrangements.
<TABLE>
The net capability at December 31, 1994, and the net generation for the
twelve months ended December 31, 1994, from all sources were as follows:
<CAPTION>
Year(s)
Placed Energy Net Net
Source Location In-Service Source Capability Generation
------ -------- ---------- ------ ---------- -------------
Fossil Fuel Units (MW) (000's of MWh)
<S> <C> <C> <C> <C> <C>
Brayton Point
Station
Units 1,2 & 3 Somerset, 1963-1969 Coal-Oil-Gas(a)1,085 7,140
Unit 4 Mass. 1974 Oil-Gas 446 1,030
Salem Harbor
Station
Units 1,2 & 3 Salem, 1952-1958 Coal-Oil(a) 312 1,617
Unit 4 Mass. 1972 Oil 430 1,089
Manchester St. Prov., 1941-1949 Oil-Gas 125 58
Station(b) R.I.
Other System Me., 1963-1978 Oil 104 43
Units(c) Mass.
Hydroelectric Units(d)
Conventional Mass.,N.H.
& Vt. 1909-1987 Water 578 1,353
Pumped Storage
Bear Swamp Rowe, Mass. 1974 Water 588 (198)
Nuclear Units(e)
Yankees Conn., Me., 1968-1972Nuclear 339 2,535
and Vt.
Millstone 3 Waterford, 1986 Nuclear 140 1,150
Conn.
Seabrook 1 Seabrook, 1990 Nuclear 115 618
N.H.
Other(f) - - - 1,271 7,009
----- ------
Total 5,533 23,444
===== ======
</TABLE>
<PAGE>
(a) These units currently burn coal, but are also capable of
burning oil. Units 1 and 2 at Brayton Point Station are also
capable of limited co-firing of natural gas and Unit 3 at
Brayton Point Station will have a limited co-firing capability
after the overhaul is completed, which is projected to be in
May 1995. See Natural Gas, page 21.
(b) For a discussion of the Manchester Street Station repowering
project, see Construction and Financing on page 37.
(c) Includes (i) an interest in a jointly owned oil-fired unit in
Yarmouth, Maine, and (ii) diesel units at various locations.
(d) See Hydroelectric Project Licensing, page 31.
(e) See Nuclear Units, page 24.
(f) Capability includes contracted purchases (1,312 MW) less
contract sales (164 MW). Net generation includes the effects
of the above contracted purchases and economy interchanges
through the New England Power Exchange (including Hydro-Quebec
purchases and purchases from non-utility generation). For
further information see Non-Utility Power Producer Information,
page 22.
NEP and Narragansett are members of NEPOOL. (For possible
changes affecting NEPOOL, see Competitive Conditions, page 7.)
Mass. Electric and Granite State participate in NEPOOL through NEP.
The NEPOOL Agreement provides for coordination of the planning and
operation of the generation and transmission facilities of its
members. The NEPOOL Agreement incorporates generating capacity
reserve obligations, provisions regarding the use of major
transmission lines, and provisions for payment for facilities
usage. The NEPOOL Agreement further provides for New England-wide
central dispatch of generation through the New England Power
Exchange. Through NEPOOL, operating and capital economies are
achieved and reserves are established on a region-wide rather than
an individual company basis. The electric energy available to NEES
subsidiaries and other members is determined by the aggregate
available to NEPOOL.
The 1994 NEPOOL peak demand of 20,519 MW occurring on July 21,
1994 established a new all-time record peak for the power pool.
This new NEPOOL peak exceeded the previous maximum demand of 19,742
MW set on July 18, 1991 by approximately 4 percent.
The 1994 summer peak for the System of 4,385 MW occurred at
the same time and day as the NEPOOL peak demand, and established a
new all-time peak for the System. The previous all-time peak load
of 4,250 MW occurred on July 19, 1991. The 1994-1995 winter peak
of 4,093 MW occurred on February 6, 1995. For a discussion of
resource planning, see RESOURCE PLANNING, page 36.
<PAGE>
MAP
(Displays electric utility properties of NEES subsidiaries)
<PAGE>
Fuel for Generation
NEP burned the following amounts of coal, residual oil, and gas
during the past three years:
1994 1993 1992
---- ---- ----
Coal (in millions of tons) 3.3 3.2 3.3
Oil (in millions of barrels) 3.4 5.0 4.9
Natural Gas (in billions of cubic feet) 4.0 0.7 3.2
Coal Procurement Program
Depending on coal-fired generating unit availability and the
degree to which the units are dispatched, NEP's 1995 coal
requirements should range between 3.2 and 3.5 million tons. NEP
obtains its domestic coal under contracts of varying lengths and on
a spot basis from domestic coal producers in Kentucky, West
Virginia, and Virginia, and from mines in Colombia and Venezuela.
Two different rail systems (CSX and Norfolk Southern) transport
coal from domestic sources to loading ports on the east coast.
NEP's coal is transported from east coast ports by ocean-going
collier to Brayton Point and Salem Harbor. NEP has a term charter
with the Energy Independence, a self-unloading collier, which
carries most of NEP's U.S. coal and a portion of foreign coal. NEP
has delivered a rejectable purchase offer and notice of termination
to the present owner of the Energy Independence. This would allow
NEP to purchase the Energy Independence from the present owner,
sell it to a third party, and charter it from the third party. NEP
has also signed a new sale agreement and a new time charter with a
third party. The current ship owner is arbitrating this matter.
NEP also charters other coal-carrying vessels for the balance of
foreign coal, and presently has a contract of affreightment with
Canada Steamship Lines, International. As protection against
interruptions in coal deliveries, NEP maintained average coal
inventories at its generating stations during 1994 of 30 to 50
days.
To meet environmental requirements, NEP uses coal with a
relatively low sulphur content. NEP's average price for coal
burned, including transportation costs, calculated on a 26 million
Btu per ton basis, was $44.15 in 1992, $43.53 per ton in 1993, and
$42.90 in 1994. Based on a 42 gallon barrel of oil producing 6.3
million Btu's, these coal prices were equivalent to approximately
$10.70 per barrel of oil in 1992, $10.57 in 1993, and $10.41 in
1994.
Oil Procurement Program
Depending on unit availability, dispatch, and the relationship
of oil and gas prices, the System's 1995 oil requirements are
expected to be approximately 1.0 to 3.0 million barrels. The
System obtains its oil requirements through contracts with oil
<PAGE>
suppliers and purchases on the spot market. Current contracts
provide for minimum purchases of 1.8 million barrels in the
contract years at market related prices. The System currently has
a total storage capacity for approximately 1.5 million barrels of
residual and diesel fuel oil. The System's average cost of oil
burned, calculated on a 6.3 million Btu per barrel basis, was
$12.68 in 1992, $13.30 in 1993, and $13.17 in 1994.
Natural Gas
NEP uses natural gas at Brayton Point Unit 4 (Brayton 4) when
gas is priced less than residual fuel oil. Brayton 1, 2, and 3
also have limited capability to co-fire natural gas with coal. Gas
was burned at Units 9 and 10 at Manchester Street Station until
July 1 and October 1, 1994, respectively. By the fourth quarter of
1994, all units at Manchester Street Station were taken out of
service for completion of the repowering project. In 1994,
approximately 30 billion cubic feet of gas were purchased at an
average cost (excluding pipeline demand charges) of $1.96/MMBTU,
4.0 billion cubic feet of which were consumed at Brayton Point and
Manchester Street Station. This price was equivalent to
approximately $12.34 per barrel of oil.
The repowered Manchester Street Station will use natural gas
year round. The repowered facility could use up to 95 million
cubic feet of natural gas per day. See Construction and Financing,
page 37.
NEP's principal service agreements for firm transportation are
with the following pipeline companies:
(1) 60 million cubic feet per day on TransCanada PipeLines,
Ltd (TransCanada) from western Canada supply sources to an
interconnection with Iroquois Gas Transmission System
(Iroquois). Service commenced on November 1, 1992. NEP
is currently negotiating the possible release of 15
million cubic feet per day of the TransCanada service.
(2) 60 million cubic feet per day on Iroquois to an
interconnection with Tennessee Gas Pipeline Company
(Tennessee). Service commenced on November 1, 1993.
(3) 60 million cubic feet per day on Tennessee to an
interconnection with Algonquin Gas Transmission Company
(Algonquin). Service commenced on November 1, 1993.
(4) 60 million cubic feet per day on Algonquin to NEP's
facilities. Service commenced on November 1, 1993.
(5) 60 million cubic feet per day on ANR Pipeline Company
(ANR) from mid-continent supply sources to an
interconnection with Columbia Gas Transmission
(Columbia). Service commenced on January 23, 1995.
<PAGE>
(6) 60 million cubic feet per day on Columbia Gas Transmission
Company (Columbia) to an interconnection with Algonquin.
Service commenced on January 23, 1995.
(7) 35 million cubic feet per day on Algonquin to NEP's
facilities. Service commenced on January 23, 1995.
(8) 120 million cubic feet per day on an Algonquin lateral for
deliveries to Brayton Point Station. Service commenced in
December 1991.
Service under contracts with four Canadian natural gas
suppliers for a total of 60 million cubic feet per day commenced on
November 1, 1993. One of those supply contracts, for 15 million
cubic feet per day, has been terminated effective April 1, 1995.
NEP has not signed any long-term supply arrangements with mid-
continent producers. In addition, NEP has a 7.5 million cubic feet
per day supply contract with Distrigas Corporation of Massachusetts
(DOMAC). Service is expected to commence with commercial operation
of the repowered Manchester Street Station.
Service under the pipeline agreements listed above and the
DOMAC supply contract require minimum fixed payments. NEP's
minimum fixed payments under all pipeline and supply agreements
(including those listed above) are currently estimated to be
approximately $65 million in 1995, and $70 million per year during
1996 to 1999. The amount of the fixed payments is subject to FERC
regulation and will depend on FERC actions affecting the rates on
each of the pipelines.
As part of its W-12 rate settlement, NEP is recovering 50% of
the fixed payments associated with its principal firm service
agreements through its current fuel clause and deferring the
recovery of the remaining 50% until the Manchester Street Station
repowering project is completed. It is scheduled for completion in
late 1995. NEP has deferred payments of approximately $36 million
as of December 31, 1994. NEP has been using a portion of its
pipeline capacity to sell natural gas. Proceeds from the sale of
natural gas and pipeline capacity of $55 million and $21 million in
1994 and 1993, respectively, have been passed to customers through
NEP's fuel clause.
Nuclear Fuel Supply
As noted above, NEP participates with other New England
utilities in the ownership of several nuclear units. See Nuclear
Units, page 24. The utilities responsible for supply for these
units are not experiencing any difficulty in obtaining commitments
for the supply of each element of the nuclear fuel cycle.
Non-Utility Power Producer Information
The System companies purchase a portion of the electricity
generated by, or provide back-up or standard service to, 139 small
power producers, cogenerators, or independent power producers (a
total of 5,207,000 MWh of purchases in 1994). As of December 31,
<PAGE>
1994, these non-utility generation sources include 27 low-head
hydroelectric plants, 51 wind or solar generators, seven waste to
energy facilities, 51 cogenerators, and three independent power
producers. The total capacity of these sources is as follows:
In Service Future Projects
(12/31/94) Under Contract
Source (MW) (MW)
------ ---------- ---------------
Hydro 36 -
Wind - 20
Waste to Energy 173 16
Cogeneration 321 -
Independent Power Producers 440 -
---- --
Total 970 36
The in-service amount includes 735 MW of long-term capacity,
99 MW of short-term capacity, and 136 MW treated as load
reductions and includes the Ocean State Power contracts discussed
below.
Ocean State Power
Ocean State Power (OSP) and Ocean State Power II (OSP II) are
general partnerships that own and operate a two unit gas-fired
combined cycle electric power plant in Burrillville, R.I.
Resources is a general partner with a 20% interest in both OSP and
OSP II and had an equity investment of approximately $34 million at
December 31, 1994. The first unit began commercial operation on
December 31, 1990 and the second unit went into service on
October 1, 1991. The two units have a combined winter net
electrical capability of approximately 562 MW. Each unit's
capacity and energy output is sold under 20-year unit power
agreements to a group of New England utilities, including NEP,
which has contracts for 48.5% of the output of each unit. NEP is
required to make certain minimum fixed payments to cover capital
and fixed operating costs of these units in amounts estimated to be
$75 million per year.
Interconnection with Quebec
NEET, Mass. Hydro, and New Hampshire Hydro own and operate, on
behalf of NEPOOL participants in the project, a 450 kV direct
current (DC) transmission line and related terminals to
interconnect the New England and Quebec transmission systems (the
Interconnection). The transfer capability of the Interconnection
is 2,000 MW. Recent changes in operating limits implemented by the
New York Power Pool may restrict the effective transfer capability
to a lower level during peak periods. NEPOOL members purchase from
and sell energy to Hydro-Quebec pursuant to several agreements.
The principal agreement calls for NEPOOL members to purchase 7
billion KWH of energy each year for ten years (the Firm Energy
Contract). Purchases under the Firm Energy Contract totaled over
6.4 billion KWH in 1994.
<PAGE>
NEP is a participant in both the Phase I and Phase II projects
of the Interconnection. NEP's participation percentage in both
projects is approximately 18%. NEP and the other participants have
entered into support agreements that end in 2020, to pay monthly
their proportionate share of the total cost of constructing,
owning, and operating the transmission facilities. NEP accounts
for these support agreements as capital leases and accordingly
recorded approximately $78 million in utility plant at December 31,
1994. Under the support agreements, NEP has agreed, in conjunction
with any Phase II project debt financing, to guarantee its share of
project debt. At December 31, 1994, NEP had guaranteed
approximately $32 million. In the event any Interconnection
facilities are abandoned for any reason, each participant is
contractually committed to pay its pro-rata share of the net
investment in the abandoned facilities.
Nuclear Units
General
NEP is a stockholder of Yankee Atomic Electric Company (Yankee
Atomic), Vermont Yankee Nuclear Power Corporation (Vermont Yankee),
Maine Yankee Atomic Power Company (Maine Yankee), and Connecticut
Yankee Atomic Power Company (Connecticut Yankee). Each of these
companies (collectively referred to as the Yankee Companies) owns
a single nuclear generating unit. In addition, NEP is a joint
owner of the Millstone 3 nuclear generating unit in Connecticut and
the Seabrook 1 nuclear generating unit in New Hampshire. Millstone
3 and Seabrook 1 are operated by subsidiaries of Northeast
Utilities (NU). NEP pays its proportionate share of costs and
receives its proportionate share of each unit's output. NEP's
interest and investment in each of the Yankee Companies,
Millstone 3, and Seabrook 1 and the net capability of each plant
are as follows:
<PAGE>
Equity
Net Investment
Capability (12/31/94)
Interest (MW) (in millions)
-------- ---------- -------------
Yankee Atomic 30.0% * $ 7
Vermont Yankee 20.0% 94 10
Maine Yankee 20.0% 158 14
Connecticut Yankee 15.0% 87 15
---- ----
Subtotal 339 $46
Net Investment
in Plant**
(12/31/94)
(in millions)
-------------
Millstone 3 12.2% 140 $392
Seabrook 1 9.9% 115 80
---- ----
Subtotal 255 $472
----
Total 594
====
*Operations permanently ceased
**Excludes nuclear fuel
NEP has a 30% ownership interest in Yankee Atomic which owns
a 185 megawatt nuclear generating station in Rowe, Massachusetts.
The station began commercial service in 1960. In February 1992,
the Yankee Atomic board of directors decided to permanently cease
power operation of the facility and to proceed with
decommissioning.
In March 1993, the FERC approved a settlement agreement that
allows Yankee Atomic to recover all but $3 million of its
approximately $50 million remaining investment in the plant over
the period extending to July 2000, when the plant's Nuclear
Regulatory Commission (NRC) operating license would have expired.
Yankee Atomic recorded the $3 million before-tax write-down in
1992. The settlement agreement also allows Yankee Atomic to earn
a return on the unrecovered balance during the recovery period and
to recover other costs, including an increased level of
decommissioning costs, over this same period. Decommissioning cost
recovery increased from $6 million per year to $27 million per year
for the period 1993 to 1995. In the fourth quarter of 1994, Yankee
announced a new decommissioning cost estimate that, subject to
approval by the FERC, would increase billings to NEP by an
additional $11 million per year through July 2000.
NEP has recorded an estimate of its entire future payment
obligations to Yankee Atomic as a liability on its balance sheet
and an offsetting regulatory asset reflecting its expected future
rate recovery of such costs. This liability and related regulatory
<PAGE>
asset amounted to approximately $122 million each at December 31,
1994.
NEP purchases the output of the other Yankee nuclear electric
generating plants in the same percentages as its stock ownership of
the Yankee Companies, less small entitlements taken by municipal
utilities for Maine Yankee and Vermont Yankee. NEP has power
contracts with each Yankee Company that require NEP to pay an
amount equal to its share of total fixed and operating costs
(including decommissioning costs) of the plant plus a return on
equity.
The stockholders of three Yankee Companies (Vermont Yankee,
Maine Yankee, and Connecticut Yankee) have agreed, subject to
regulatory approval, to provide capital requirements in the same
proportion as their ownership percentages of the particular Yankee
Company.
There is widespread concern about the safety of nuclear
generating plants. The NRC regularly reviews the adequacy of its
comprehensive requirements for nuclear plants. Many local, state,
and national public officials have expressed their opposition to
nuclear power in general and to the continued operation of nuclear
power plants. It is possible that this controversy will result in
cost increases and modifications to, or premature shutdown of, the
operating nuclear units in which NEP has an interest.
On three occasions (most recently in 1987), referenda appeared
on the ballot in Maine that, if passed, would have required the
prompt shutdown of Maine Yankee. All the referenda were defeated.
There is no assurance that similar measures will not appear on
future ballots.
Aging Units
The remaining Yankee plants may experience age-related
deterioration of essential plant equipment or facilities. To the
extent that costly repair, replacement, or maintenance becomes
necessary due to such deterioration, the overall economics of the
unit would have to be re-evaluated and early shut-down of such
units could occur, as was the case with the Yankee Atomic plant.
Since January 1995, the Maine Yankee nuclear generating unit
has been shut down for refueling and inspection. On the basis of
preliminary results of testing and analysis performed during this
shutdown, Maine Yankee has detected substantially greater
deterioration of its steam generator tubes than had been previously
found. Maine Yankee announced on March 27, 1995 that the unit will
remain off-line in an extended outage to review and address the
condition of its steam generators. At a minimum, the unit is
expected to be shutdown for several months. Until this review is
completed and options are considered, Maine Yankee is unable to
assess the impact of this development on the overall economics of
the unit, and NEP is, therefore, unable to predict what courses of
action may be taken with respect to the future of the unit.
<PAGE>
Decommissioning
Each of the Yankee Companies includes charges for all or a
portion of decommissioning costs in its cost of energy. These
charges vary depending upon rate treatment, the method of
decommissioning assumed, economic assumptions, site and unit
specific variables, and other factors. Any increase in these
charges is subject to FERC approval.
Each of the operating nuclear units has established
decommissioning trust funds or escrow funds into which payments are
being made to meet the projected cost of decommissioning its plant.
If any of the units were shut down prior to the end of its
operating license, the funds collected for decommissioning to that
point would be insufficient. Estimates of NEP's pro-rata share
(based on ownership) of decommissioning costs, NEP's share of the
actual book values of decommissioning fund balances set aside for
each unit at December 31, 1994 (in millions of dollars), and the
expiration date of the operating license of each plant are as
follows:
NEP's share of
-----------------------------
Estimated
Decommissioning Fund License
Costs Balances (1) Expiration
Unit (in 1994 $) (12/31/94) Date
---- --------------- ------------ ----------
Yankee Atomic (2) $74 $29 --
Connecticut Yankee $53 $22 2007
Maine Yankee $66 $22 2008
Vermont Yankee $66 $23 2012
Millstone 3 $53 $11 2025
Seabrook 1 $36 $ 4 2026
(1) Certain additional amounts are anticipated to be
available through tax deductions.
(2) The estimated cost of decommissioning for Yankee Atomic
reflects the benefit of the component removal project (CRP)
for which decommissioning funds were spent in 1993 and 1994.
NEP is currently collecting through rates amounts for
decommissioning based upon cost estimates and funding methodologies
authorized by FERC. Such estimates are determined periodically for
each plant and may not reflect the current projected cost of
decommissioning.
There is no assurance that decommissioning costs actually
incurred by the Yankee Companies, Millstone 3, or Seabrook 1 will
not substantially exceed these amounts. For example, current
decommissioning cost estimates assume the availability of permanent
repositories for both low-level and high-level nuclear waste which
do not currently exist. NRC rules require that reasonable
<PAGE>
assurance be provided that adequate funds will be available for the
decommissioning of commercial nuclear power plants. The rule
establishes minimum funding levels that licensees must satisfy.
Each of the units in which NEP has an interest has filed a report
with the NRC providing assurance that funds will be available to
decommission the facility.
A Maine statute provides that if both Maine Yankee and its
decommissioning trust fund have insufficient assets to pay for the
plant decommissioning, the owners of Maine Yankee are jointly and
severally liable for the shortfall. The definition of owner under
the statute covers NEP and may cover companies affiliated with it.
NEP and the Retail Companies cannot determine, at this time, the
constitutionality, applicability, or effect of this statute. If
NEP or the Retail Companies were required to make payments under
this statute, they would assess their legal remedies at that time.
In any event, NEP and the Retail Companies would attempt to recover
through rates any payments required. If any claim in excess of
NEP's ownership share were enforced against a NEES company, that
company would seek reimbursement from any other Maine Yankee
stockholder which failed to pay its share of such costs.
High-Level Waste Disposal
The Nuclear Waste Policy Act of 1982 provides a framework and
timetable for selection of sites for repositories of high-level
radioactive waste (spent nuclear fuel) from United States nuclear
plants. The DOE has entered into contracts with the Yankee
Companies, the Millstone 3 joint owners, and the Seabrook 1 joint
owners for acceptance of title to, and transportation and storage
of, this waste. Under these contracts, each operating unit will
pay fees to the DOE to cover the development and creation of waste
repositories. Fees for fuel burned since April 1983 have been
collected by the DOE on an ongoing basis at the rate of one tenth
of a cent per KWH of net generation. Fees for generation up
through April 1983 were determined by the DOE as follows:
$13.2 million for Yankee Atomic, $48.7 million for Connecticut
Yankee, $50.4 million for Maine Yankee, and $39.3 million for
Vermont Yankee. Neither Millstone 3 nor Seabrook 1 has been
assessed any fees for fuel burned through April 1983, because they
did not enter commercial operation until 1986 and 1990,
respectively.
The Yankee Companies had several options to pay these fees.
Yankee Atomic paid its fee to the DOE for the period through April
1983. The other three Yankee Companies elected to defer payment
until a future date, thereby incurring interest expense. However,
payment to the DOE must occur prior to the first delivery of spent
fuel. Connecticut, Maine, and Vermont Yankee have segregated a
portion of their respective DOE obligations in external accounts.
The remainder of the funds have been used to support general
capital requirements. All expect to separately fund in full in
external accounts their DOE obligation (including accrued interest)
prior to payment to the DOE. To the extent that any of the three
Yankee Companies is unable to fully meet its DOE obligation at the
prescribed time, NEP might be required to provide additional funds.
<PAGE>
Prior to such time that the DOE takes delivery of a plant's
spent nuclear fuel, it is stored on site in spent fuel pools.
Connecticut Yankee and Maine Yankee are in the process of
reconfiguring their spent fuel pools to allow for additional
storage capability. Upon successful completion of the
reconfiguring, each plant will have sufficient spent fuel pool
capacity to support plant operation through the expiration of its
respective current NRC license. Millstone 3 will be able to
maintain a full core discharge capability through the end of its
current license. Seabrook 1's current licensed storage capacity is
adequate until at least 2010. Vermont Yankee is able to maintain
a full core discharge capability until 2001. Yankee Atomic has
adequate on-site storage capacity for all its spent fuel.
Federal legislation enacted in December 1987 directed the DOE
to proceed with the studies necessary to develop and operate a
permanent high-level waste disposal site at Yucca Mountain, Nevada.
There is local opposition to development of this site. Although
originally scheduled to open in 1998, the DOE currently estimates
that the permanent disposal site is not expected to open before
2010, a date the DOE has defined as optimistic. The U.S. General
Accounting Office has targeted 2015 as a more realistic date for
the operation of the facility. In June 1994, 20 states and 14
utilities filed lawsuits in the U.S. Court of Appeals for the
District of Columbia Circuit demanding that the DOE meet its
obligation to take spent nuclear fuel by 1998.
The legislation also provides for the development of a
Monitored Retrievable Storage (MRS) facility and abandons plans to
identify and select a second, permanent disposal site. An MRS
facility would provide temporary storage for high-level waste prior
to eventual permanent disposal. It is not known when an MRS
facility would begin accepting deliveries. Additional delays due
to political and technical problems are likely. It is extremely
unlikely deliveries would be accepted prior to 1999.
The Mescalero Apache Tribe, backed by substantial utility
interest, has proposed constructing a commercial MRS facility on
Mescalero land in New Mexico. In an initial vote in January 1995,
the Mescalero Tribe rejected the proposal. However, on March 9,
1995, another vote was taken in response to a petition signed by
tribal members and the proposal was approved. An estimated
facility opening date in 2001 is dependent upon the completion and
approval of environmental studies and obtaining an NRC license.
Federal authorities have deferred indefinitely the commercial
reprocessing of spent nuclear fuel.
Low-Level Waste Disposal
In 1986, the Low-Level Radioactive Waste Policy Amendments Act
was enacted by Congress. This statute set a time limit of December
31, 1992 beyond which disposal of low-level waste at any of the
three existing sites would be impermissible. Under the statute,
<PAGE>
individual states are responsible for finding local sites for
disposal or forming regional disposal compacts by defined milestone
dates. Extensions were provided for generators in states making
progress toward developing their own disposal facilities.
None of the states in which NEP holds an interest in a nuclear
facility has met the statutory milestones toward developing
disposal sites. Since June 30, 1994, all existing low-level waste
disposal sites have been closed permanently to non-regional wastes.
The states of Maine and Vermont have established a compact with
Texas for the disposal of low-level waste in Hudspeth County,
Texas. The compact agreement has been approved in all three states
and is now before the U.S. Congress. Assuming Congressional
approval, the site is scheduled to begin accepting waste during
1997. Maine Yankee and Vermont Yankee will continue to store low-
level waste on-site until that time. The compact releases Maine
and Vermont from having to site an in-state disposal facility.
Connecticut, Massachusetts, and New Hampshire are still required to
pursue local or regional low-level waste disposal facilities.
Until each of these states has access to a disposal site,
Connecticut Yankee, Millstone 3, Seabrook and Yankee Atomic will
take the necessary measures to continue to store low-level waste
on-site.
Nuclear Insurance
The Price-Anderson Act limits the amount of liability claims
that would have to be paid in the event of a single incident at a
nuclear plant to $8.9 billion (based upon 110 licensed reactors).
The maximum amount of commercially available insurance coverage to
pay such claims is only $200 million. The remaining $8.7 billion
would be provided by an assessment of up to $79.3 million per
incident levied on each of the nuclear units in the United States,
subject to a maximum assessment of $10 million per incident per
nuclear unit in any year. The maximum assessment, which was most
recently calculated in 1993, is to be adjusted at least every five
years to reflect inflationary changes. NEP's current interest in
the Yankee Companies (excluding Yankee Atomic), Millstone 3, and
Seabrook 1 would subject NEP to a $58.0 million maximum assessment
per incident. NEP's payment of any such assessment would be
limited to a maximum of $7.3 million per incident per year. As a
result of the permanent cessation of power operation of the Yankee
Atomic plant, Yankee Atomic has received from the NRC a partial
exemption from obligations under the Price-Anderson Act. However,
Yankee Atomic must continue to maintain $100 million of
commercially available nuclear insurance coverage.
Each of the nuclear units in which NEP has an ownership
interest also carries nuclear insurance to cover the costs of
property damage, decontamination or premature decommissioning and
workers' claims resulting from a nuclear incident. These policies
may require additional premium assessments if losses relating to
nuclear incidents at units covered by this insurance occurring in
a prior six year period exceed the accumulated funds available.
NEP's maximum potential exposure for these assessments, directly,
<PAGE>
or indirectly through purchased power payments to the Yankees, is
approximately $17 million per year.
Other Items
Federal legislation requires emergency response plans, approved
by federal authorities, for nuclear generating units. The Yankee
Companies, Seabrook 1, and Millstone 3 are not currently
experiencing difficulty in maintaining approval of their emergency
response plans.
REGULATORY AND ENVIRONMENTAL MATTERS
Regulation
Numerous activities of NEES and its subsidiaries are subject
to regulation by various federal agencies. Under the 1935 Act,
many transactions of NEES and its subsidiaries are subject to the
jurisdiction of the Securities and Exchange Commission (SEC). With
the intensifying competitive pressures within the electric utility
industry, there has been increasing debate about modifying or
repealing the 1935 Act. The System supports its repeal. (See
Competitive Conditions, page 7). Under the Federal Power Act,
certain electric subsidiaries of NEES are subject to the
jurisdiction of the FERC with respect to rates, accounting, and
hydroelectric facilities. In addition, the NRC has broad
jurisdiction over nuclear units and federal environmental agencies
have broad jurisdiction over environmental matters. The electric
utility subsidiaries of NEES are also subject to the jurisdiction
of regulatory bodies of the states and municipalities in which they
operate.
For more information, see: RATES, page 10, Nuclear Units, page
24, RESOURCE PLANNING, page 36, Fuel for Generation, page 20,
Environmental Requirements, page 32, and OIL AND GAS OPERATIONS,
page 42.
Hydroelectric Project Licensing
NEP is the largest operator of conventional hydroelectric
facilities in New England. Most of NEP's hydroelectric projects
are licensed by the FERC. These licenses expire periodically and
the projects must be relicensed at that time. NEP's present
licenses expire over a period from 2001 to 2020, excluding the
Deerfield River Project discussed below. Upon expiration of a FERC
license for a hydro project, the project may be taken over by the
United States or licensed to the existing, or a new licensee. If
the project were taken over, the existing licensee would receive an
amount equal to the lesser of (i) fair value of the project or
(ii) original cost less depreciation and amounts held in
amortization reserves, plus in either case severance damages. The
net book value of NEP's hydroelectric projects was $239 million as
of December 31, 1994.
<PAGE>
In the event that a new license is not issued when the existing
license expires, FERC must issue annual licenses to the existing
licensee which will allow the project to continue operation until
a new license is issued. A new license for a project may
incorporate operational restrictions and requirements for
additional non-power facilities (e.g., fish passage or recreational
facilities) that could affect operation of the project, and may
also require additional capital investment. For example, NEP has
previously received new licenses for projects on the Connecticut
River that involved construction of an extensive system of fish
ladders.
The license for the 84 MW Deerfield River Project expired at
the end of 1993. NEP filed an application for a new license in
1991, which is still under review. NEP has signed, with 12
governmental agencies and advocacy groups, an Offer of Settlement
which embodies operational, environmental and recreational
conditions acceptable to the parties. NEP has received water
quality certifications from the Commonwealth of Massachusetts and
the State of Vermont needed to complete the FERC relicensing
processing. In Vermont the certificate has been appealed by two
advocacy groups who did not participate in the Offer of Settlement
process. FERC has issued NEP an annual license to continue
operation of the project under the terms and conditions of the
expired license until a new license issues or other disposition of
the project takes place.
The next NEP project to require a new license will be the 368
MW Fifteen Mile Falls Project on the Connecticut River in New
Hampshire and Vermont. This license expires in 2001. The formal
process of preparing an application for a new license will begin in
1996.
In a recent policy statement, FERC asserted that it has
authority over the decommissioning of licensed hydroelectric
projects being abandoned or denied a new license. If a project is
to be decommissioned, the licensee may incur substantial costs.
Environmental Requirements
Existing Operations
The NEES subsidiaries are subject to federal, state, and local
environmental regulation of, among other things: wetlands and
flood plains; air and water quality; storage, transportation, and
disposal of hazardous wastes and substances; underground storage
tanks; and land-use. It is likely that the stringency of
environmental regulation affecting the System and its operations
will increase in the future.
Siting and Construction Activities for New Facilities
All New England states require, in certain circumstances,
regulatory approval for site selection or construction of electric
generating and major transmission facilities. Connecticut, Maine,
Massachusetts, New Hampshire, and Rhode Island also have programs
<PAGE>
of coastal zone management that might restrict construction of
power plants and other electrical facilities in, or potentially
affecting, coastal areas. All agencies of the federal government
must prepare a detailed statement of the environmental impact of
all major federal actions significantly affecting the quality of
the environment. The New England states have environmental laws
which require project proponents to prepare reports of the
environmental impact of certain proposed actions for review by
various agencies. Except for the Manchester Street Station
repowering project, the System is not currently constructing
generating plants or major transmission facilities.
Environmental Expenditures
Total System capital expenditures for environmental protection
facilities have been substantial. System capital expenditures for
such facilities amounted to approximately $31 million in 1992, $23
million in 1993, and $51 in 1994, including expenditures by NEP of
$28 million, $14 million, and $44 million, respectively, for those
years. The System estimates that total capital expenditures for
environmental protection facilities will be approximately $43
million in 1995 ($36 million by NEP) and $24 million in 1996 ($17
million by NEP).
Hazardous Substances
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. NEES 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.
NEES and/or its subsidiaries have been named as a potentially
responsible party (PRP) by either the U.S. Environmental Protection
Agency (EPA) or the Massachusetts Department of Environmental
Protection for 22 sites at which hazardous waste is alleged to have
been disposed. Private parties have also contacted or initiated
legal proceedings against NEES and certain subsidiaries regarding
hazardous waste cleanup. The most prevalent types of hazardous
waste sites with which NEES and its subsidiaries have been
associated with are manufactured gas locations. (Until the early
1970s, NEES was a combined electric and gas holding company
system.) NEES is aware of approximately 40 such locations
(including seven of the 22 locations for which NEES and/or its
subsidiaries is a PRP) mostly located in Massachusetts. NEES and
its subsidiaries are currently aware of other sites, and may in the
future become aware of additional sites, that they may be held
responsible for remediating.
<PAGE>
NEES has been notified by the EPA that it is one of several
PRPs for cleanup of the Pine Street Canal Superfund site in
Burlington, Vermont, at which coal tar and other materials were
deposited. Between 1931 and 1951, NEES and its predecessor owned
all of the common stock of Green Mountain Power Corporation (GMP).
Prior to, during, and after that time, gas was manufactured at the
Pine Street Canal site by GMP. In 1989, NEES was one of 14 parties
required to pay the EPA's past response costs related to this site.
NEES remains a PRP for ongoing and future response costs. In
November 1992, the EPA proposed a cleanup plan estimated by the EPA
to cost $50 million. In June 1993, the EPA withdrew this cleanup
plan in response to public concern about the plan and its cost. It
is uncertain at this time what the cost of any ultimate cleanup
plan will be or what NEES' share of such cost will be.
In 1993, the MDPU approved a rate agreement filed by
Massachusetts Electric 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 Massachusetts
Electric'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 Massachusetts Electric 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
investigation and remediation costs of any particular hazardous
waste site that may ultimately be borne by NEES or its
subsidiaries. Where appropriate, NEES and its subsidiaries intend
to seek recovery from their insurers and from other PRPs, but it is
uncertain whether and to what extent such efforts would be
successful. At December 31, 1994, NEES and its subsidiaries had
total reserves for environmental response costs of $45 million and
a related regulatory asset of $13 million. NEES 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.
Electric and Magnetic Fields (EMF)
In recent years, concerns have been raised about whether EMF,
which occur near transmission and distribution lines as well as
near household wiring and appliances, cause or contribute to
adverse health effects. Numerous studies on the effects of these
fields, some of them sponsored by electric utilities (including the
System), have been conducted and are continuing. Some of the
studies have suggested associations between certain EMF and health
effects, including various types of cancer, while other studies
have not substantiated such associations. It is impossible to
predict the ultimate impact on the System and the electric utility
industry if further investigations were to demonstrate that the
present electricity delivery system is contributing to increased
risk of cancer or other health problems.
<PAGE>
Many utilities, including System companies, have been contacted
by customers regarding a potential relationship between EMF and
adverse health effects. To date, no court in the United States has
ruled that EMF from electric facilities cause adverse health
effects and no utility has been found liable for personal injuries
alleged to have been caused by EMF. In any event, System companies
believe that they currently have adequate insurance coverage for
personal injury claims.
Several state courts have recognized a cause of action for
damage to property values in transmission line condemnation cases
based on the fear that power lines cause cancer. It is difficult
to predict what the impact on the System would be if this cause of
action is recognized in the states in which the System operates and
in contexts other than condemnation cases.
Bills have been introduced unsuccessfully in the past in the
Rhode Island Legislature to require that transmission lines be
placed underground. Legislation has been introduced in
Massachusetts that, if passed, would require state agencies to
study existing EMF-related research and make recommendations for
further legislation.
Air
Approximately 45 percent of NEP's electricity is produced at
eight older thermal generating units in Massachusetts. Six are
principally fueled by coal, one by oil, and one by oil and gas.
The federal Clean Air Act requires significant reduction in utility
sulfur dioxide (SO2) and nitrogen oxides (NOx) emissions that
result from burning fossil fuels by the year 2000 to reduce acid
rain and ground-level ozone (smog).
NEP is reducing SO2 emissions under Phase 1 of the federal acid
rain program that became effective in 1995. NEP is also subject to
Massachusetts SO2 and NOx reduction regulations taking effect in
1995. The SO2 and NOx reductions that are being made to meet 1995
requirements have resulted in one-time operation and maintenance
costs of $16 million and capital costs of $88 million through
December 31, 1994. Additional expenditures in 1995 are expected to
be less than $10 million and $30 million, respectively. Depending
on fuel prices, NEP also expects to incur up to $5 million annually
in increased costs to purchase cleaner fuels to meet SO2 emission
reduction requirements.
All eight of NEP's thermal units will be subject to Phase 2 of
the federal and state acid rain regulations that become effective
in 2000. NEP believes that the SO2 controls already installed for
the 1995 requirements will satisfy the Phase 2 acid rain
regulations.
In connection with the federal ozone emission requirements,
state environmental agencies in ozone non-attainment areas are
developing a second phase of NOx reduction regulations that would
have to be fully implemented by NEP no later than 1999. While the
<PAGE>
exact costs are not known, NEP estimates that the cost of
implementing these regulations would not jeopardize continued
operation of NEP's units.
The generation of electricity from fossil fuel also emits trace
amounts of certain hazardous air pollutants and fine particulates.
An EPA study of utility hazardous air pollutant emissions will be
completed in 1995. The study's conclusions could lead to new
emission standards requiring costly controls or fuel restrictions
on NEP plants. At this time, NEES and its subsidiaries cannot
estimate the impact the findings of this research might have on
NEP's operations.
Under the System's own 1993 corporate resource plan, also known
as NEESPLAN 4, the System has a goal to reduce CO2, SOx, and NOx
emissions by 2000 to 20%, 60%, and 60%, respectively, below 1990
levels. Consistent with these goals, NEP has committed to a 20%
reduction in CO2 by 2000 as part of President Clinton's Global
Climate Challenge.
Water
The federal Clean Water Act prohibits the discharge of any
pollutant (including heat), except in compliance with a discharge
permit issued by the states or the EPA for a term of no more than
five years. NEP and Narragansett have received required permits
for all their steam-generating plants. NEET has received its
required surface water discharge permits for all of its current
operations.
NEES facilities store substantial amounts of oil and are
required to have spill prevention control and counter-measure
(SPCC) plans. Currently, major System facilities such as Brayton
Point and Salem Harbor have up-to-date SPCC plans. A comprehensive
study of smaller facilities has been completed to determine the
appropriate plans for these facilities and a five-year
implementation plan is underway.
Nuclear
The NRC, along with other federal and state agencies, has
extensive regulations pertaining to environmental aspects of
nuclear reactors. Safety aspects of nuclear reactors, including
design controls and inspection programs to mitigate any possibility
of nuclear accidents and to reduce any damages therefrom, are also
subject to NRC regulation. See Nuclear Units, page 24.
RESOURCE PLANNING
Corporate Resource Plans
In 1993, the Retail Companies, working with the public utility
regulatory commissions in Massachusetts, Rhode Island, and New
Hampshire, developed a coordinated process for reviews by the three
states of the System's resource plan, including any major new
<PAGE>
resource commitments. The Retail Companies' most recent integrated
resource plan, filed in 1994 with the three state commissions,
predicts that future resource additions from the Manchester Street
Station repowering project described below and contracts with non-
utility generators along with the continued demand-side management
programs will meet NEP's resource needs until 2002. (See
Competitive Conditions, page 7, for a discussion of the treatment
of existing and future generation in a more competitive
environment.) Settlement agreements regarding the Retail
Companies' integrated resource plan have been approved by all three
state commissions.
Construction and Financing
The NEES subsidiaries' major construction project is the
repowering of the Manchester Street Station, a 140 MW electric
generating station in Providence, R.I. The joint Narragansett/NEP
project began in 1992 and remains on schedule and within budget,
with an expected in-service date of late 1995.
Narragansett and NEP operated three steam electric generating
units of approximately 45 MW each which went into service at
Manchester Street Station in the 1940s. During 1992, NEP acquired
a 90% interest in the site and the Station in anticipation of the
repowering project. As part of the repowering project, three new
combustion turbines and heat recovery steam generators are being
added to the Station, replacing the existing boilers. The existing
steam turbines are being replaced with new and more efficient
turbines of slightly larger capacity. The fuel for generation,
which was primarily residual oil, will be replaced with natural
gas, using distillate oil as an emergency backup. See Fuel for
Generation, page 20.
Repowering will more than triple the power generation capacity
of Manchester Street Station to approximately 489 MW, and
substantially increase the plant's thermal efficiency. It is
expected that the plant's capacity factor will also increase.
Certain air emissions are projected to decrease relative to
historical levels because of the change in fuels and the increase
in efficiency.
Substantial additions to Narragansett's high voltage
transmission network were necessary in order to accommodate the
output of the plant. Two 7-mile 115 kV underground transmission
cables (located primarily in public ways) are in service, which
will connect the repowered station to existing 115 kV lines at a
new substation. Total cost for the generating station is estimated
to be approximately $520 million, including AFDC. In addition,
related transmission work, which is principally the responsibility
of Narragansett, will cost approximately $60 million and was placed
in service in the third quarter of 1994. At December 31, 1994,
$353 million, including AFDC, has been spent on the project which
includes the related transmission work. Substantial commitments
have been made relative to future planned expenditures for this
project.
<PAGE>
Estimated construction expenditures (including nuclear fuel)
for the System's electric utility companies are shown below for
1995 through 1997.
The System conducts a continuing review of its construction and
financing programs. These programs and the estimates shown below
are subject to revision based upon changes in assumptions as to
System load growth, rates of inflation, receipt of adequate and
timely rate relief, the availability and timing of regulatory
approvals, new environmental and legal or regulatory requirements,
total costs of major projects, and the availability and costs of
external sources of capital.
<PAGE>
The anticipated capital requirements for oil and gas operations are not
included in the table below. See OIL AND GAS OPERATIONS page 42.
Estimated Construction Expenditures
-----------------------------------
1995 1996 1997 Total
---- ---- ---- -----
(In Millions - excluding AFDC)
NEP
---
Manchester St. Station Generation 110 40 0 150
Other Generation (1) 40 50 55 145
Other Transmission 10 25 25 60
---- ---- ---- ----
Total NEP 160 115 80 335
---- ---- ---- ----
Mass. Electric
--------------
Distribution 105 95 95 295
Narragansett
------------
Manchester St. Station Generation 10 0 0 10
Manchester St. Station Transmission/
Substation 5 0 0 5
Other Transmission 20 25 15 60
Distribution 20 25 25 75
---- ---- ---- ----
Total Narragansett 55 50 40 150
---- ---- ---- ----
Granite State
-------------
Distribution 5 5 5 15
---- ---- ---- ----
Other 5 20 5 30
---- ---- ---- ----
Combined Total
--------------
Manchester St. Station Generation 120 40 0 160
Manchester St. Station Transmission/
Substation 5 0 0 5
Other Generation (1) 40 50 55 145
Other Transmission 30 50 40 120
Distribution 130 125 125 385
Other 5 20 5 30
---- ---- ---- ----
Grand Total 330 285 225 845
---- ---- ---- ------
(1) Includes Nuclear Fuel
<PAGE>
Financing
The proportion of construction expenditures estimated to be
financed by internally generated funds during the period from 1995
to 1997 is:
NEP 100%
Mass. Electric 75%
Narragansett 60%
Granite State 80%
The general practice of the operating subsidiaries of NEES has
been to finance construction expenditures in excess of internally
generated funds initially by issuing unsecured short-term debt.
This short-term debt is subsequently reduced through sales by such
subsidiaries of long-term debt securities and preferred stock, and
through capital contributions from NEES to the subsidiaries. NEES,
in turn, generally has financed capital contributions to the
operating subsidiaries through retained earnings and the sale of
additional NEES shares. Since April 1991, NEES has been meeting
all of the requirements of its dividend reinvestment and common
share purchase plan and employee share plans through open market
purchases. Under these plans, NEES may revert to the issuance of
new common shares at any time.
The ability of NEP and the Retail Companies to issue short-term
debt is limited by regulatory restrictions, by provisions contained
in their charters, and by certain debt and other instruments.
Under the charters or by-laws of NEP, Mass. Electric, and
Narragansett, short-term debt is limited to 10% of capitalization.
The preferred stockholders authorized these limitations to be
increased to 20% of capitalization until the late 1990's, at which
time the limits will revert to 10% of capitalization. The
following table summarizes the short-term debt limits at
December 31, 1994, and the amount of outstanding short-term debt
and lines of credit and standby bond facilities at such date.
($ millions)
Lines of Credit/
Standby Bond
Limit Outstanding Facilities
----- ----------- ----------------
NEP 320 146 490
Mass. Electric 141 82 90
Narragansett 77 30 41
Granite State 10 3 7
NEES and certain subsidiaries, with regulatory approval,
operate a money pool to more effectively utilize cash resources and
to reduce outside short-term borrowings. Short-term borrowing
needs are met first by available funds of the money pool
participants. Borrowing companies pay interest at a rate designed
to approximate the cost of outside short-term borrowings.
Companies which invest in the pool share the interest earned on a
<PAGE>
basis proportionate to their average monthly investment in the
money pool. Funds may be withdrawn from or repaid to the pool at
any time without prior notice. At December 31, 1994, NEP, Mass.
Electric, and Granite State had money pool borrowings of
approximately $17 million, $9 million, and $3 million,
respectively.
In order to issue additional long-term debt and preferred
stock, NEP and the Retail Companies must comply with earnings
coverage requirements contained in their respective mortgages, note
agreements, and preference provisions. The most restrictive of
these provisions in each instance generally requires (1) for the
issuance of additional mortgage bonds by NEP, Mass. Electric, and
Narragansett, for purposes other than the refunding of certain
outstanding mortgage bonds, a minimum earnings coverage (before
income tax) of twice the pro forma annual interest charges on
mortgage bonds, and (2) for the issuance of additional preferred
stock by NEP, Mass. Electric, and Narragansett, minimum gross
income coverage (after income tax) of one and one-half times pro
forma annual interest charges and preferred stock dividends, in
each case for a period of twelve consecutive calendar months within
the fifteen calendar months immediately preceding the proposed new
issue.
The respective long-term debt and preferred stock coverages of
NEP and the Retail Companies under their respective mortgage
indentures, note agreements, and preference provisions, are stated
in the following table for the past three years:
Coverage
-----------------------
1994 1993 1992
---- ---- ----
NEP
---
General and Refunding Mortgage Bonds 4.13 4.66 4.15
Preferred Stock 2.60 2.76 2.80
Mass. Electric
--------------
First Mortgage Bonds 3.65 3.15 3.60
Preferred Stock 2.02 2.02 2.14
Narragansett
------------
First Mortgage Bonds 2.16 2.47 3.79
Preferred Stock 1.61 1.78 2.52
Granite State
-------------
Notes (1) 2.26 2.41 2.53
(1) As defined under the most restrictive note agreement.
<PAGE>
Research and Development
Expenditures for the System's research and development
activities totaled $8.9 million, $9.5 million, and $8.3 million in
1992, 1993, and 1994, respectively. Total expenditures are
expected to be about $9.9 million in 1995.
About 40% of these expenditures support the Electric Power
Research Institute, which conducts research and development
activities on behalf of its sponsors and provides the System with
access to a wide range of relevant research results at minimum
cost.
The System also directly funds research projects of a more
site-specific concern to the System and its customers. These
projects include:
- creating options to allow the use of
economically-priced fossil fuels without adversely
affecting plant performance, and to insure safe,
reliable and environmentally sound production of
electric energy at the lowest cost;
- developing and assessing new information and methods
to understand and reduce the environmental impacts
of System operations including investigation of
offset methods for counterbalancing greenhouse gas
emissions away from the source;
- developing, assessing and demonstrating new
generation technologies and fuels that will ensure
economic, efficient and environmentally sound
production of electric energy in the future;
- creating options to maintain electric service
quality and reliability for customers at the lowest
cost; and
- developing conservation, load control, and rate
design measures that will help customers use
electric energy more efficiently.
OIL AND GAS OPERATIONS
GENERAL
Since 1974, NEEI has engaged in oil and gas exploration and
development, primarily through a partnership with Samedan Oil
Corporation (Samedan), a subsidiary of Noble Affiliates, Inc.
NEEI's oil and gas activities are regulated by the SEC under the
1935 Act.
Under the terms of the Samedan-NEEI partnership agreement,
Samedan is the managing partner and oversees all partnership
<PAGE>
operations including the sale of production. Effective January 1,
1987, NEEI decided not to acquire new oil and gas prospects due to
prevailing and expected oil and natural gas market conditions.
This decision did not affect NEEI's interests and commitments in
oil and gas properties owned as of December 31, 1986 by the
Samedan-NEEI partnership. Samedan continues to explore, develop,
and manage these properties on behalf of the partnership. Thus,
the results of NEEI's operations are substantially affected by the
performance of Samedan. Samedan may elect to terminate the
partnership at the end of any calendar year upon one year's prior
notice.
NEEI is required to obtain SEC approval for further investment
in these oil and gas properties. On December 20, 1994, the SEC
issued an order authorizing NEEI to invest up to $30 million in its
partnership with Samedan for the years 1995-1998. NEEI is winding
down its oil and gas program. The level of expenditures for
exploration and development of existing properties has declined as
a result of the decision not to acquire new oil and gas prospects
after December 31, 1986.
NEEI's activities are primarily rate-regulated and consist of
all prospects entered into prior to 1984. Savings and losses from
this rate-regulated program are being passed on to NEP and
ultimately to retail customers, under an intercompany pricing
policy (Pricing Policy) approved by the SEC. Due to precipitate
declines in oil and gas prices, NEEI has incurred operating losses
since 1986 and expects to generate substantial additional losses in
the future. NEP's ability to pass such losses on to its customers
was favorably resolved in NEP's 1988 FERC rate settlement. This
settlement covered all costs incurred by or resulting from
commitments made by NEEI through March 1, 1988. Other subsequent
costs incurred by NEEI are subject to normal regulatory review.
NEEI follows the full cost method of accounting for its oil and gas
operations, under which capitalized costs (including interest paid
to banks) relating to wells and leases determined to be either
commercial or non-commercial are amortized using the unit of
production method.
Due to the Pricing Policy, NEEI's rate-regulated program has
not been subject to certain SEC accounting rules, applicable to
non-rate-regulated companies, which limit the costs of oil and gas
property that can be capitalized. The Pricing Policy has allowed
NEEI to capitalize all costs incurred in connection with fuel
exploration activities of its rate regulated program, including
interest paid to banks of which $10 million, $9 million, and
$14 million was capitalized in 1994, 1993, and 1992, respectively.
In the absence of the Pricing Policy, the SEC's full cost "ceiling
test" rule requires non-rate regulated companies to write-down
capitalized costs to a level which approximates the present value
of their proved oil and gas reserves. Based on NEEI's 1994 average
oil and gas selling prices and NEEI's proved reserves at December
31, 1994, if this test were applied, it would have resulted in a
write-down of approximately $120 million after-tax.
<PAGE>
RESULTS OF OPERATIONS
Revenues from natural gas sales were lower in 1994 versus 1993
due to decreased production. NEEI expects 1995 natural gas
revenues to be lower than 1994 revenues due to lower production
and prices. NEEI's 1994 oil and gas exploration and development
expenditures were $14 million.
NEEI's estimated proved reserves decreased from 15.1 million
barrels of oil and gas equivalent at December 31, 1993, to
12.4 million barrels of oil and gas equivalent at December 31,
1994. Production, primarily from offshore Gulf properties,
decreased reserves by 3.4 million equivalent barrels. Additions
and revisions primarily on offshore Gulf properties increased
reserves by 0.7 million equivalent barrels.
Prices received by NEEI for its natural gas from its major
producing properties varied considerably during 1994, from
approximately $1.41/MCF to $2.29/MCF, due principally to seasonal
fluctuations and regional variations in gas prices. NEEI's overall
average gas price in 1994 was $1.94/MCF.
The results of NEEI's oil and gas program will continue to be
affected by developments in the world oil market and the domestic
market for natural gas, including actions by the federal government
and by foreign governments, which may affect the price of oil and
gas, the terms of contracts under which gas is sold, and changes in
regulation of the domestic interstate gas pipelines.
The following table summarizes NEEI's crude oil and condensate
production in barrels, natural gas production in MCF, and the
average sales price per barrel of oil and per MCF of natural gas
produced by NEEI during the years ended December 1994, 1993, and
1992, and the average production (lifting) cost per dollar of gross
revenues.
Years Ended December 31,
----------------------------------
1994 1993 1992
---- ---- ----
Crude oil and condensate
production (barrels) 362,645 477,545 506,428
Natural gas production 18,011,275 19,696,944 21,514,986
(MCF)
Average sales price per
barrel of oil and $15.19 $17.76 $19.34
condensate
Average sales price per
MCF of natural gas $1.94 $1.96 $1.59
Average production cost
(including severance taxes)
per dollar of gross revenue $0.12 $0.14 $0.17
<PAGE>
OIL AND GAS PROPERTIES
During 1994, principal producing properties, representing
approximately 65% of NEEI's 1994 revenues, were (i) a 50% working
interest in Brazos Blocks A-52, A-53, A-65, and A-37 located in
federal waters offshore Texas, (ii) a 12.5% working interest in
Main Pass Blocks 107 and 108, located in Federal waters offshore
Louisiana, (iii) a 25% working interest in Main Pass Blocks 93, 94,
102, and 90, located in Federal waters offshore Louisiana, (iv) a
9.7% working interest in Eugene Island Block 24, located in Federal
waters offshore Louisiana, and (v) a 15% working interest in Brazos
Blocks 399, 400, 412, 413, and 435, located in Federal waters
offshore Texas. Other major producing properties during 1994
included a 15% working interest in Eugene Island 28, located in
Federal waters offshore Louisiana, a 13.3% working interest in
Matagorda Island Block 587, located in Federal waters offshore
Texas, a 15% working interest in High Island Blocks 21, 22, 34, 50,
and 51, located in Federal waters offshore Texas, and a 3.2%
working interest in the Sand Dunes Unit, Derrick Draw Field,
Converse County, Wyoming.
As used in the tables below, (i) a productive well is an
exploratory or a development well that is not a dry well, (ii) a
dry well is an exploratory or development well found to be
incapable of producing either oil or gas in commercial quantities,
(iii) "gross" refers to the total acres or wells in which NEEI has
a working interest, and (iv) "net," as applied to acres or wells,
refers to gross acres or wells multiplied by the percentage working
interest owned by NEEI.
The following table shows the approximate undeveloped acreage
held by NEEI as of December 31, 1994. Undeveloped acreage is
acreage on which wells have not been drilled or completed to a
point that would permit the production of commercial quantities of
oil and gas, regardless of whether such acreage contains proved
reserves.
Location Gross Acres Net Acres
-------- ----------- ---------
Offshore-Gulf of Mexico 9,995 1,999
Other 57,610 9,698
------- ------
Total 67,605 11,697
During the years ended December 31, 1994, 1993, and 1992 NEEI
participated in the completion of the following net exploratory and
development wells:
<PAGE>
Net Exploratory Wells Net Development Wells
--------------------- ---------------------
Year Ended Productive* Dry Productive* Dry
---------- ---------- --- ---------- ---
December 31, 1994 0 0 1 0
December 31, 1993 0 2 0 0
December 31, 1992 2 0 0 0
*Includes depleted wells
The following table summarizes the total gross and net
productive wells and the approximate total gross and net developed
acres, both as of December 31, 1994:
Oil Gas Developed Acres
--- --- ------------------
Gross Net Gross Net Gross Net
----- --- ----- --- ------- ------
139 16 558 65 297,096 55,610
At December 31, 1994, NEEI was not drilling or completing any
gross or net wells.
CAPITAL REQUIREMENTS AND FINANCING
Estimated expenditures in 1995 for NEEI's exploration and
development program are approximately $15 million, of which
capitalized interest costs are approximately $10 million.
Internal funds are expected to provide 100% of NEEI's capital
requirements for 1995. In 1989, NEEI refinanced its outstanding
borrowings through a credit agreement which currently provides for
borrowings of up to $250 million. Borrowings under this credit
agreement are principally secured by a pledge of NEEI's rights with
respect to NEP under the Pricing Policy covering the rate-regulated
program. The amount available for borrowing under the revolving
credit agreement decreases by varying amounts annually, beginning
December 31, 1995 and expiring December 31, 1998.
NEEI has reached agreement with a group of banks to refinance
its existing credit agreement. The new agreement would provide for
initial borrowings of $225 million. The amount available would
decrease annually through 2002. Security for the borrowings would
be unchanged. Closing is expected to occur before the end of April
1995.
<PAGE>
NEEI MAP
Major Oil and Gas Properties
<PAGE>
EXECUTIVE OFFICERS
NEES
----
All executive officers are elected to continue in office
subject to Article 19 of the Agreement and Declaration of Trust
until the first meeting of the Board of Directors following the
next annual meeting of shareholders, or the special meeting of
shareholders held in lieu of such annual meeting, and until their
successors are chosen and qualified. The executive officers also
serve as officers and/or directors of various subsidiary companies.
John W. Rowe - Age: 49 - President and Chief Executive Officer
since 1989 - Elected Chairman of NEP in 1993 - President of NEP
from 1991 to 1993 - Chairman of NEP from 1989 to 1991.
Alfred D. Houston - Age: 54 - Executive Vice President since
1994 - Senior Vice President-Finance from 1987 to 1994 - Vice
President-Finance from 1985 to 1987 - Vice President of NEP
from 1987 to 1994 - Vice President of Narragansett since 1976
- Treasurer of Narragansett since 1977.
Frederic E. Greenman - Age: 58 - Senior Vice President since
1987 - General Counsel since 1985 - Secretary since 1984 -
Vice President of NEP since 1979.
John W. Newsham - Age: 62 - Vice President since 1991 -
Executive Vice President of NEP since 1993 - Vice President of
NEP and Director of Thermal Production from 1987 to 1993.
Richard P. Sergel - Age: 45 - Vice President since 1992 -
Treasurer from 1990 to 1991 - Chairman of Mass. Electric and
Narragansett since 1993 - Treasurer of NEP and Mass. Electric
from 1990 to 1991 - Vice President of the Service Company since
1988 - Director of Rates from 1982 to 1990.
Jeffrey D. Tranen - Age: 48 - Vice President since 1991 -
President of NEP since 1993 - Vice President of NEP from 1984
to 1993 - Vice President of Mass. Hydro, N.H. Hydro, and NEET
from 1987 to 1991 - President of Mass. Hydro, N.H. Hydro, and
NEET since 1991.
Michael E. Jesanis - Age: 38 - Treasurer since 1992 - Director
of Corporate Finance from 1990 to 1991.
NEP
---
The Treasurer is elected by the stockholders to hold office
until the next annual meeting of stockholders and until the
successor is duly chosen and qualified. The other executive
officers are elected by the Board of Directors to hold office
subject to the pleasure of the directors and until the first
meeting of directors after the next annual meeting of stockholders
and until their successors are duly chosen and qualified. Certain
<PAGE>
officers of NEP are, or at various times in the past have been,
officers and/or directors of the System companies with which NEP
has entered into contracts and had other business relations.
John W. Rowe* - Chairman since 1993 - President from 1991 to
1993 - Chairman from 1989 to 1991.
Jeffrey D. Tranen* - President since 1993 - Vice President from
1984 to 1993.
John W. Newsham* - Executive Vice President since 1993 - Vice
President from 1987 to 1993.
Lawrence E. Bailey - Age: 51 - Vice President since 1989 -
Plant Manager of Brayton Point Station from 1987 to 1991.
Jeffrey A. Donahue - Age: 36 - Vice President since 1993 -
various engineering positions with the Service Company since
1983 - Director of Construction since 1992 - Chief Electrical
Engineer since 1991.
Frederic E. Greenman* - Vice President since 1979.
John F. Malley - Age: 46 - Vice President since 1992 - Manager
of Generation Planning for the Service Company from 1986 to
1991.
Arnold H. Turner - Age: 54 - Vice President since 1989 -
Director of Planning and Power Supply since 1985.
Jeffrey W. VanSant - Age: 41 - Vice President since 1993 -
Manager of Oil and Gas Exploration and Development for the
Service Company from 1985 to 1993 - Manager of Oil and Gas
Procurement from 1992 to 1993 - Manager of Natural Gas Supply
from 1989 to 1992.
Michael E. Jesanis* - Treasurer since 1992.
Howard W. McDowell - Age: 51 - Controller since 1987 -
Controller of Mass. Electric and Narragansett since 1987 -
Treasurer of Granite State since 1984.
*Please refer to the material supplied under the caption
EXECUTIVE OFFICERS - NEES for other information regarding this
officer.
Mass. Electric
--------------
The Treasurer is elected by the stockholders to hold office
until the next annual meeting of stockholders and until the
successor is duly chosen and qualified. The other executive
officers are elected by the board of directors to hold office
subject to the pleasure of the directors and until the first
meeting of the directors after the next annual meeting of
stockholders. Certain officers of Mass. Electric are, or at
<PAGE>
various times in the past have been, officers and directors of
System companies with which Mass. Electric has entered into
contracts and had other business relations.
Richard P. Sergel - Chairman since 1993 - Reference is made to
the material supplied under the caption EXECUTIVE OFFICERS -
NEES for other information regarding Mr. Sergel.
John H. Dickson - Age: 52 - President since 1990.
David L. Holt - Age: 46 - Executive Vice President since 1993 -
Vice President of NEP from 1992 to 1993 - Chief Engineer and
Director of Engineering for the Service Company since 1991 -
Chief Electrical Engineer for the Service Company from 1986 to
1991.
John C. Amoroso - Age: 56 - Vice President since 1993 -
District Manager, Southeast District from 1992 to 1993 -
Manager, Southeast District from 1985 to 1992.
Peter H. Gibson - Age: 49 - Elected Vice President in 1995 -
Director of Business Marketing since 1995 - Director of
Business Marketing for the Service Company from 1993 to 1994 -
Director of Conservation and Load Management (C&LM) and
Commercial and Industrial Services for the Service Company from
1992 to 1993 - Manager of C&LM for the Service Company from
1987 to 1991.
Gregory A. Hale - Age: 44 - Vice President since 1993 - Senior
Counsel for the Service Company from 1988 to 1993.
Cheryl A. LaFleur - Age: 40 - Vice President since 1993 - Vice
President of the Service Company from 1992 to 1993 - Assistant
to the NEES Chairman and President from 1990 to 1991 - Senior
Counsel for the Service Company from 1989 to 1991.
Robert H. McLaren - Age: 42 - Elected Vice President in 1994 -
Vice President of the Service Company from 1990 to 1994.
Charles H. Moser - Age: 54 - Vice President since 1993 - Chief
Protection and Planning Engineer for the Service Company from
1984 to 1993.
Lydia M. Pastuszek - Age: 41 - Vice President since 1993 - Vice
President of NEP from 1990 to 1993 - President of Granite State
since 1990.
Anthony C. Pini - Age: 42 - Vice President since 1993 -
Assistant Controller for the Service Company from 1985 to 1993.
Nancy H. Sala - Age: 43 - Vice President since 1992 - Central
District Manager since 1992 - Assistant to the President of
Mass. Electric from 1990 to 1992.
Dennis E. Snay - Age: 53 - Vice President and Merrimack Valley
District Manager since 1990.
<PAGE>
Michael E. Jesanis - Treasurer since 1992 - Reference is made
to the material supplied under the caption EXECUTIVE OFFICERS
- NEES for other information regarding Mr. Jesanis.
Howard W. McDowell - Controller since 1987 and Assistant
Treasurer since 1977 - Reference is made to the material
supplied under the caption EXECUTIVE OFFICERS - NEP for other
information regarding Mr. McDowell.
Narragansett
------------
Officers are elected by the board of directors or appointed,
as appropriate, to serve until the meeting of directors following
the annual meeting of stockholders, and until their successors are
chosen and qualified. Officers other than the President,
Treasurer, and Secretary, serve also at the pleasure of the
directors. Certain officers of Narragansett are, or at various
times in the past have been, officers and directors of System
companies with which Narragansett has entered into contracts and
had other business relations.
Richard P. Sergel - Chairman since 1993 - Reference is made to
the material supplied under the caption EXECUTIVE OFFICERS -
NEES for other information regarding Mr. Sergel.
Robert L. McCabe - Age: 54 - President since 1986.
William Watkins, Jr. - Age 62 - Executive Vice President since
1992 - Vice President of the Service Company from 1981 to 1992.
Francis X. Beirne - Age: 51 - Vice President since 1993 -
Manager, Southern District from 1988 to 1993.
Richard W. Frost - Age: 55 - Vice President since 1993 -
District Manager - Southern District from 1990 to 1993.
Alfred D. Houston - Vice President since 1976 - Treasurer since
1977 - Reference is made to the material supplied under the
caption EXECUTIVE OFFICERS - NEES for other information
regarding Mr. Houston.
James V. Mahoney - Age: 49 - Vice President and Director of
Business Services since 1993 - President of NEEI from 1992 to
1993 - Vice President of the Service Company from 1989 to 1993
- Director of Fuel Supply for the Service Company from 1985 to
1993.
Richard Nadeau - Age: 59 - Elected Vice President in 1994 -
Director of Customer Service since 1993 - Assistant to the
President from 1990 to 1993.
Michael F. Ryan - Age: 43 - Elected Vice President in 1994 -
Rhode Island Director for U.S. Senator John H. Chafee from 1986
to 1994.
<PAGE>
Howard W. McDowell - Controller since 1987 - Reference is made
to the material supplied under the caption EXECUTIVE OFFICERS
- NEP for other information regarding Mr. McDowell.
Item 2. PROPERTIES
See Item 1. Business - ELECTRIC UTILITY PROPERTIES, page 16
and OIL AND GAS PROPERTIES, page 45.
Item 3. LEGAL PROCEEDINGS
On October 25, 1994, NEP was sued by Milford Power Limited
Partnership (MPLP) in the Superior Court for Worcester County,
Massachusetts. MPLP, a venture formed by Enron Corporation and
Jones Capital, owns a 149 megawatt gas-fired power plant in
Milford, Massachusetts. NEP purchases 56 percent of the power
output of the facility under a long-term contract with MPLP. MPLP
alleges that NEP has engaged in a scheme to cause MPLP and its
power plant to fail and prevented MPLP from finding a long-term
buyer for the output not purchased by NEP. The complaint includes
allegations that NEP has violated the Federal Racketeer Influenced
and Corrupt Organizations Act, engaged in unfair or deceptive acts
in trade commerce, and breached contracts. MPLP seeks compensatory
damages in an unspecified amount as well as treble damages. On
November 14, 1994, NEP filed an answer denying liability, asserting
affirmative defenses, and making counterclaims against MPLP and
certain third party defendants. The case has been removed by NEP
to the United States District Court for the District of
Massachusetts.
See Item 1. COMPETITIVE CONDITIONS, page 7; RATES, page 10;
Coal Procurement Program, page 20; Nuclear Units, page 24;
Hydroelectric Project Licensing, page 31; Environmental
Requirements, page 32; Corporate Resource Plans, page 36; OIL AND
GAS OPERATIONS, page 42.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during
the last quarter of 1994.
<PAGE>
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SECURITY HOLDER MATTERS
NEES information in response to the disclosure requirements
specified by this Item 5. appears under the captions in the NEES
Annual Report indicated below:
Required Information Annual Report Caption
-------------------- ---------------------
(a) Market Information Shareholder Information
(b) Holders Shareholder Information
(c) Dividends Financial Highlights
The information referred to above is incorporated by reference
in this Item 5.
NEP, Mass. Electric, and Narragansett - The information
required by this item is not applicable as the common stock of all
these companies is held solely by NEES. Information pertaining to
payment of dividends and restrictions on payment of dividends is
incorporated herein by reference to each company's 1994 Annual
Report.
Item 6. SELECTED FINANCIAL DATA
NEES
----
The information required by this item is incorporated herein
by reference to page 25 of the NEES 1994 Annual Report.
NEP
---
The information required by this item is incorporated herein
by reference to page 25 of the NEP 1994 Annual Report.
Mass. Electric
--------------
The information required by this item is incorporated herein
by reference to page 22 of the Mass. Electric 1994 Annual Report.
<PAGE>
Narragansett
------------
The information required by this item is incorporated herein
by reference to page 22 of the Narragansett 1994 Annual Report.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
NEES
----
The information required by this item is incorporated herein
by reference to pages 16 through 24 of the NEES 1994 Annual Report.
NEP
---
The information required by this item is incorporated herein
by reference to pages 2 through 7 of the NEP 1994 Annual Report.
Mass. Electric
--------------
The information required by this item is incorporated herein
by reference to pages 2 through 7 of the Mass. Electric 1994 Annual
Report.
Narragansett
------------
The information required by this item is incorporated herein
by reference to pages 2 through 7 of the Narragansett 1994 Annual
Report.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
NEES
----
The information required by this item is incorporated herein
by reference to pages 25 through 44 of the NEES 1994 Annual Report.
NEP
---
The information required by this item is incorporated herein
by reference to pages 1, 8 through 23, and 25 of the NEP 1994
Annual Report.
<PAGE>
Mass. Electric
--------------
The information required by this item is incorporated herein
by reference to pages 1, 8 through 20, and 22 of the Mass. Electric
1994 Annual Report.
Narragansett
------------
The information required by this item is incorporated herein
by reference to pages 1, 8 through 20, and 22 of the Narragansett
1994 Annual Report.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
NEES, NEP, Mass. Electric, and Narragansett - None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
NEES
----
The information required by this item is incorporated herein
by reference to the material under the caption ELECTION OF
DIRECTORS in the definitive proxy statement of NEES, dated March 9,
1995, for the 1995 Annual Meeting of Shareholders, provided that
the information under the headings "Compensation Committee Report
on Executive Compensation" and "Corporate Performance" are not so
incorporated. Reference is also made to the information under the
caption EXECUTIVE OFFICERS - NEES in Part I of this report.
NEP
---
The names of the directors of NEP, their ages, and a brief
account of their business experience during the past five years
appear below. Information required by this item for Executive
Officers is provided under the caption EXECUTIVE OFFICERS - NEP in
Part I of this report.
Directors are elected to hold office until the next annual
meeting of stockholders or special meeting held in lieu thereof and
until their respective successors are chosen and qualified.
Joan T. Bok - Director since 1979 - Age: 65 - Chairman of the
Board of NEES - Chairman or Vice Chairman of the Company from
1988 to 1994 - Chairman of NEES from 1984 to 1994 (Chairman,
President, and Chief Executive Officer from July 26, 1988 until
<PAGE>
February 13, 1989). Directorships of NEES System companies:
New England Electric System, Massachusetts Electric Company,
The Narragansett Electric Company, Narragansett Energy
Resources Company, New England Electric Resources, Inc., New
England Electric Transmission Corporation, New England Energy
Incorporated, New England Hydro Finance Company, Inc., New
England Hydro-Transmission Corporation, New England
Hydro-Transmission Electric Company, Inc., and New England
Power Service Company. Other directorships: Avery Dennison
Corporation, John Hancock Mutual Life Insurance Company,
Monsanto Company, and the Federal Reserve Bank of Boston.
Frederic E. Greenman* - Director since 1986. Directorships of
NEES System companies and affiliates: Narragansett Energy
Resources Company, New England Electric Resources, Inc., New
England Electric Transmission Corporation, New England Energy
Incorporated, New England Hydro Finance Company, Inc., New
England Hydro-Transmission Corporation, New England
Hydro-Transmission Electric Company, Inc., New England Power
Service Company, Yankee Atomic Electric Company, Connecticut
Yankee Atomic Power Company, Maine Yankee Atomic Power Company,
and Vermont Yankee Nuclear Power Corporation.
Alfred D. Houston* - Director since 1984. Directorships of
NEES System companies: Narragansett Energy Resources Company,
New England Electric Transmission Corporation, New England
Energy Incorporated, New England Hydro Finance Company, Inc.,
New England Hydro-Transmission Corporation, New England
Hydro-Transmission Electric Company, Inc., and New England
Power Service Company.
John W. Newsham* - Director since 1991. Directorships of NEES
System companies: Narragansett Energy Resources Company, New
England Electric Resources, Inc., New England Power Service
Company, Yankee Atomic Electric Company, Connecticut Yankee
Atomic Power Company, Maine Yankee Atomic Power Company, and
Vermont Yankee Nuclear Power Corporation.
John W. Rowe* - Director since 1989. Directorships of NEES
System companies and affiliates: New England Electric System,
Massachusetts Electric Company, The Narragansett Electric
Company, Narragansett Energy Resources Company, New England
Electric Resources, Inc., New England Electric Transmission
Corporation, New England Energy Incorporated, New England Hydro
Finance Company, Inc., New England Hydro-Transmission
Corporation, New England Hydro-Transmission Electric Company,
Inc., New England Power Service Company, and Maine Yankee
Atomic Power Company. Other directorships: Bank of Boston
Corporation and UNUM Corporation.
Jeffrey D. Tranen* - Director since 1991. Directorships of
NEES System affiliates: Narragansett Energy Resources Company,
New England Electric Resources, Inc., New England Electric
Transmission Corporation, New England Energy Incorporated, New
England Hydro Finance Company, Inc., New England
<PAGE>
Hydro-Transmission Corporation, New England Hydro-Transmission
Electric Company, Inc., and New England Power Service Company.
*Please refer to the material supplied under the caption
EXECUTIVE OFFICERS - NEES and EXECUTIVE OFFICERS - NEP in Part
I of this report for other information regarding this director.
Mass. Electric
--------------
The names of the directors of Mass. Electric, their ages, and
a brief account of their business experience during the past five
years appear below. Information required by this item for
Executive Officers is provided under the caption EXECUTIVE OFFICERS
- Mass. Electric in Part I of this report.
Directors are elected to hold office until the next annual
meeting of stockholders or special meeting held in lieu thereof and
until their respective successors are chosen and qualified.
Urville J. Beaumont - Director since 1984 - Age: 62 -
Treasurer and Director, law firm of Beaumont & Campbell, P.A.
Joan T. Bok* - Director since 1979.
Sally L. Collins - Director since 1976 - Age: 59 - Director of
Workplace Health Services since 1993 - Health Services
Administrator at Kollmorgen Corporation EOD from 1989 to 1993.
John H. Dickson - Director since 1990 - Reference is made to
material supplied under the caption EXECUTIVE OFFICERS - Mass.
Electric for other information regarding Mr. Dickson. Other
directorship: Worcester Business Development Corporation.
Charles B. Housen - Director since 1979 - Age: 62 - Chairman,
President, and Director of Erving Industries, Inc., Erving,
Mass.
Patricia McGovern - Director since 1994 - Age: 53 - Counsel to
law firm of Goulston & Storrs, P.C. since 1993 - Massachusetts
State Senator and Chair of the Senate Ways and Means Committee
from 1984 to 1992.
John F. Reilly - Director since 1988 - Age: 62 - President and
CEO of Fred C. Church, Inc., Lowell, Mass. - Other
directorships: Colonial Gas Company, Family Bank, and New
England Insurance Co., Ltd.
John W. Rowe* - Director since 1989.
Richard P. Sergel* - Director since 1993.
Richard M. Shribman - Director since 1979 - Age: 69 - Treasurer
of Norick Realty Corporation, Salem, Mass. - President of
<PAGE>
Norick Realty Corporation until 1992 - Other directorships:
Eastern Bank.
Roslyn M. Watson - Director since 1992 - Age: 45 - President
of Watson Ventures (commercial real estate development and
management) Boston, Mass. since 1993 - Vice President of the
Gunwyn Company (commercial real estate development) Cambridge,
Mass. from 1986 - 1993 - Other directorships: The Dreyfus
Laurel Funds and American Express Centurion Bank.
*Please refer to the material supplied under the caption
EXECUTIVE OFFICERS - NEES in Part I of this report and/or the
material supplied under the caption DIRECTORS AND OFFICERS OF
THE REGISTRANT - NEP in this Item for other information
regarding this director.
Narragansett
------------
The names of the directors of Narragansett, their ages, and a
brief account of their business experience during the past five
years appear below. Information required by this item for
Executive Officers is provided under the caption EXECUTIVE OFFICERS
- Narragansett in Part I of this report.
Directors are elected to hold office until the next annual
meeting of stockholders or special meeting held in lieu thereof and
until their respective successors are chosen and qualified.
Joan T. Bok* - Director since 1979.
Stephen A. Cardi - Director since 1979 - Age: 53 - Treasurer
of Cardi Corporation (construction), Warwick, R.I.
Frances H. Gammell - Director since 1992 - Age: 45 -
Director, Treasurer, and Secretary of Original Bradford
Soap Works, Inc.
Joseph J. Kirby - Director since 1988 - Age: 63 - President of
Washington Trust Bancorp, Inc., Westerly, R.I. and President
and Director of the Washington Trust Company.
Robert L. McCabe - President and Director of Narragansett since
1986 - Other directorship: Citizens Savings Bank - Please refer
to the material supplied under the caption EXECUTIVE OFFICERS
- Narragansett in Part I of this report for other information
regarding Mr. McCabe.
John W. Rowe* - Director since 1989.
Richard P. Sergel* - Chairman and Director since 1993.
William E. Trueheart - Director since 1989 - Age: 51 -
President of Bryant College, Smithfield, Rhode Island - Other
directorships: Fleet National Bank.
<PAGE>
John A. Wilson, Jr. - Director since 1971 - Age: 63 -
Consultant to and former President of Wanskuck Co., Providence,
R.I., - Consultant to Hinckley, Allen, Snyder & Comen
(attorneys), Providence, R.I.
*Please refer to the material supplied under the caption
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - NEP
in this Item for other information regarding this
director.
Section 16(a) of the Securities Exchange Act of 1934 requires
the System's officers and directors, and persons who own more than
10% of a registered class of the System's equity securities, to
file reports on Forms 3, 4, and 5 of share ownership and changes in
share ownership with the SEC and the New York Stock Exchange and to
furnish the System with copies of all Section 16(a) forms they
file.
Based solely on NEP's, Mass. Electric's, and Narragansett's
review of the copies of such forms received by them, or written
representations from certain reporting persons that such forms were
not required for those persons, NEP, Mass. Electric, and
Narragansett believe that, during 1994, all filing requirements
applicable to its officers, directors, and 10% beneficial owners
were complied with.
Item 11. EXECUTIVE COMPENSATION
NEES
----
The information required by this item is incorporated herein
by reference to the material under the captions BOARD STRUCTURE AND
COMPENSATION, EXECUTIVE COMPENSATION, PAYMENTS UPON A CHANGE IN
CONTROL, PLAN SUMMARIES, and RETIREMENT PLANS in the definitive
proxy statement of NEES, dated March 9, 1995, for the 1995 Annual
Meeting of Shareholders, provided that the information under the
headings "Compensation Committee Report on Executive Compensation"
and "Corporate Performance" are not so incorporated.
NEP, MASS. ELECTRIC, AND NARRAGANSETT
-------------------------------------
EXECUTIVE COMPENSATION
The following tables give information with respect to all
compensation (whether paid directly by NEP, Mass. Electric, or
Narragansett or billed to it as hourly charges) for services in all
capacities for NEP, Mass. Electric, or Narragansett for the years
1992 through 1994 to or for the benefit of the Chief Executive
Officer and the four other most highly compensated executive
officers for each company.
<PAGE>
NEP
SUMMARY COMPENSATION TABLE
Long-Term
Compensa-
Annual Compensation (b) tion
-------------------------- ---------
Other
Name and Annual Restricted All Other
Principal Compensa- Share Compensa-
Position Year Salary Bonus tion Awards tion
(a) ($) ($)(c) ($)(d) ($)(e) ($)(f)
---------- ---- ------- ------ --------- ---------- ---------
John W. 1994 211,598 119,716 4,018 67,966 1,911(g)
Rowe 1993 181,269 112,095 2,318 54,256 2,386
Chairman 1992 184,532 69,205 2,318 56,479 2,340
Jeffrey D. 1994 187,356 98,357 5,049 45,804 3,466(h)
Tranen 1993 159,936 112,105 2,974 32,753 3,563
President 1992 120,843 52,286 2,307 23,732 2,670
John W. 1994 134,518 79,087 4,149 28,413 3,165(i)
Newsham 1993 112,460 78,093 2,020 19,319 2,776
Executive 1992 105,602 43,402 1,718 19,385 2,545
Vice
President
Frederic E. 1994 140,070 89,090 3,622 34,126 2,707(j)
Greenman 1993 123,648 75,058 2,131 22,811 3,110
Vice 1992 133,223 50,258 2,361 26,960 3,298
President
Lawrence E. 1994 140,471 66,510 116 27,484 3,952(k)
Bailey 1993 135,123 61,283 101 21,286 3,790
Vice 1992 129,711 47,737 101 20,985 2,594
President
(a) Certain officers of NEP are also officers of NEES and various
other System companies.
(b) Includes deferred compensation in category and year earned.
(c) The bonus figure represents cash bonuses under an incentive
compensation plan, special bonuses, the goals program award,
and the variable portion of the incentive thrift plan match by
NEP. See description under Plan Summaries.
(d) Includes amounts reimbursed by NEP for the payment of taxes.
<PAGE>
(e) Prior to the awards made for 1994, shares were awarded that
became unrestricted after five years. Those shares receive
the same dividends as the other common shares of NEES. The
awards made for 1994 were in the form of deferred incentive
shares, which have been deferred for receipt for at least five
years or, in some cases, until the later of five years or
termination of employment. At the end of the deferred period,
the award may be paid out in shares of 50% in shares and 50%
in cash. As cash dividends are declared, the number of
deferred incentive shares will be increased as if the
dividends were reinvested in shares. See also Payments Upon
a Change in Control, below. As of December 31, 1994, the
following executive officers held the amount of restricted
shares with the value indicated: Mr. Rowe 15,236 shares,
$489,457 value; Mr. Tranen 3,121 shares, $100,262 value; Mr.
Newsham 2,888 shares, $92,777 value; Mr. Greenman 4,257
shares, $136,756 value; and Mr. Bailey 1,931 shares, $62,033
value. These amounts do not include the restricted share
awards for 1994 which were not determined until February 1995.
The value was calculated by multiplying the closing market
price on December 31, 1994 by the number of shares.
(f) Includes NEP contributions to life insurance and the incentive
thrift plan that are not bonus contributions. See description
under Plan Summaries. The life insurance contribution is
calculated based on the value of term life insurance for the
named individuals. The premium costs for most of these
policies have been or will be recovered by NEP.
(g) For Mr. Rowe, the amount and type of compensation in 1994 is
as follows: $1,267 for contributions to the thrift plan and
$644 for life insurance.
(h) For Mr. Tranen, the amount and type of compensation in 1994 is
as follows: $3,000 for contributions to the thrift plan and
$466 for life insurance.
(i) For Mr. Newsham, the amount and type of compensation in 1994
is as follows: $2,212 for contributions to the thrift plan
and $953 for life insurance.
(j) For Mr. Greenman, the amount and type of compensation in 1994
is as follows: $1,916 for contributions to the thrift plan
and $791 for life insurance.
(k) For Mr. Bailey, the amount and type of compensation in 1994 is
as follows: $2,809 for contributions to the thrift plan and
$1,143 for life insurance.
<PAGE>
MASS. ELECTRIC
SUMMARY COMPENSATION TABLE
Long-Term
Compensa-
Annual Compensation (b) tion
-------------------------- ---------
Other
Name and Annual Restricted All Other
Principal Compensa- Share Compensa-
Position Year Salary Bonus tion Awards tion
(a) ($) ($)(c) ($)(d) ($)(e) ($)(f)
---------- ---- ------- ------ --------- ---------- ---------
Richard P. 1994 113,021 63,550 3,307 29,731 2,228(h)
Sergel (g) 1993 93,628 71,187 1,657 20,713 2,036
Chairman
John H. 1994 161,604 82,956 5,105 34,617 3,536(i)
Dickson 1993 156,900 116,399 3,005 28,103 3,623
President 1992 150,469 61,561 3,087 27,801 3,442
David L. 1994 95,122 55,347 102 22,973 2,552(j)
Holt (g) 1993 60,782 39,166 51 11,476 1,352
Executive
Vice
President
Anthony C. 1994 105,884 43,465 116 17,688 2,454(k)
Pini (g) 1993 71,457 27,761 81 7,996 1,653
Vice
President
Nancy H. 1994 107,621 39,318 116 16,129 2,493(l)
Sala 1993 102,860 43,386 103 13,370 2,378
Vice 1992 96,785 20,508 103 8,326 1,936
President
(a) Certain officers of Mass. Electric are also officers of NEES
and various other System companies.
(b) Includes deferred compensation in category and year earned.
(c) The bonus figure represents cash bonuses under an incentive
compensation plan, special bonuses, the goals program award,
and the variable portion of the incentive thrift plan match by
Mass. Electric. See description under Plan Summaries.
<PAGE>
(d) Includes amounts reimbursed by Mass. Electric for the payment
of taxes.
(e) Prior to the awards made for 1994, shares were awarded that
became unrestricted after five years. Those shares receive
the same dividends as the other common shares of NEES. The
awards made for 1994 were in the form of deferred incentive
shares, which have been deferred for receipt for at least five
years or, in some cases, until the later of five years or
termination of employment. At the end of the deferred period,
the award may be paid out in shares of 50% in shares and 50%
in cash. As cash dividends are declared, the number of
deferred incentive shares will be increased as if the
dividends were reinvested in shares. See also Payments Upon
a Change in Control, below. As of December 31, 1994, the
following executive officers held the amount of restricted
shares with the value indicated: Mr. Sergel 2,941 shares,
$94,480 value; Mr. Dickson 2,932 shares, $94,191 value; Mr.
Holt 2,123 shares, $68,201 value; Mr. Pini 1,402 shares,
$45,039 value; and Ms. Sala 713 shares, $22,905 value. These
amounts do not include the restricted share awards for 1994
which were not determined until February 1995. The value was
calculated by multiplying the closing market price on December
31, 1994 by the number of shares.
(f) Includes Mass. Electric contributions to life insurance and
the incentive thrift plan that are not bonus contributions.
See description under Plan Summaries. The life insurance
contribution is calculated based on the value of term life
insurance for the named individuals. The premium costs for
most of these policies have been or will be recovered by Mass.
Electric.
(g) Mr. Sergel, Mr. Holt, and Mr. Pini were elected as officers of
Mass. Electric in 1993. Compensation data is provided for the
years in which they have served as officers.
(h) For Mr. Sergel, the type and amount of compensation in 1994 is
as follows: $2,011 for contributions to the thrift plan and
$217 for life insurance.
(i) For Mr. Dickson, the type and amount of compensation in 1994
is as follows: $3,000 for contributions to the thrift plan
and $536 for life insurance.
(j) For Mr. Holt, the type and amount of compensation in 1994 is
as follows: $1,902 for contributions to the thrift plan and
$650 for life insurance.
(k) For Mr. Pini, the type and amount of compensation in 1994 is
as follows: $2,118 for contributions to the thrift plan and
$336 for life insurance.
(l) For Ms. Sala, the type and amount of compensation in 1994 is
as follows: $2,152 for contributions to the thrift plan and
$341 for life insurance.
<PAGE>
NARRAGANSETT
SUMMARY COMPENSATION TABLE
Long-Term
Compensa-
Annual Compensation (b) tion
-------------------------- ---------
Other
Name and Annual Restricted All Other
Principal Compensa- Share Compensa-
Position Year Salary Bonus tion Awards tion
(a) ($) ($)(c) ($)(d) ($)(e) ($)(f)
---------- ---- ------- ------ --------- ---------- ---------
Richard P. 1994 50,319 28,293 1,472 13,237 992(h)
Sergel (g) 1993 48,207 36,653 854 10,665 1,048
Chairman
Robert L. 1994 140,785 68,784 4,457 28,576 4,256(i)
McCabe 1993 139,632 98,654 2,408 22,617 3,771
President 1992 134,536 54,109 2,041 25,076 2,603
William 1994 124,428 62,799 115 26,136 6,186(j)
Watkins, 1993 118,501 39,403 101 13,370 5,847
Jr. 1992 65,586 17,315 66 7,350 1,312
Executive
Vice
President
James V. 1994 124,428 71,567 115 23,463 2,950(k)
Mahoney (g) 1993 58,426 21,563 50 8,957 1,252
Vice
President
Richard W. 1994 99,300 34,269 115 13,629 2,706(l)
Frost (g) 1993 96,408 28,667 103 11,211 2,628
Vice
President
(a) Certain officers of Narragansett are also officers of NEES and
various other System companies.
(b) Includes deferred compensation in category and year earned.
(c) The bonus figure represents cash bonuses under an incentive
compensation plan, special bonuses, the goals program award,
and the variable portion of the incentive thrift plan match by
Narragansett. See description under Plan Summaries.
<PAGE>
(d) Includes amounts reimbursed by Narragansett for the payment of
taxes.
(e) Prior to the awards made for 1994, shares were awarded that
became unrestricted after five years. Those shares receive
the same dividends as the other common shares of NEES. The
awards made for 1994 were in the form of deferred incentive
shares, which have been deferred for receipt for at least five
years or, in some cases, until the later of five years or
termination of employment. At the end of the deferred period,
the award may be paid out in shares of 50% in shares and 50%
in cash. As cash dividends are declared, the number of
deferred incentive shares will be increased as if the
dividends were reinvested in shares. See also Payments Upon
a Change in Control, below. As of December 31, 1994, the
following executive officers held the amount of restricted
shares with the value indicated: Mr. Sergel 2,941 shares,
$94,480 value; Mr. McCabe 2,753 shares, $88,440 value; Mr.
Watkins 1,307 shares, $41,987 value; Mr. Mahoney 2,107 shares,
$67,687 value; and Mr. Frost 1,238 shares, $39,771 value.
These amounts do not include the restricted share awards for
1994 which were not determined until February 1995. The value
was calculated by multiplying the closing market price on
December 31, 1994 by the number of shares.
(f) Includes Narragansett contributions to life insurance and the
incentive thrift plan that are not bonus contributions. See
description under Plan Summaries. The life insurance
contribution is calculated based on the value of term life
insurance for the named individuals. The premium costs for
most of these policies have been or will be recovered by
Narragansett.
(g) Messrs. Sergel, Mahoney, and Frost, were elected as officers
of Narragansett in 1993. Compensation data is provided for the
years in which they have served as officers.
(h) For Mr. Sergel, the type and amount of compensation in 1994 is
as follows: $895 for contributions to the thrift plan and $97
for life insurance.
(i) For Mr. McCabe, the type and amount of compensation in 1994 is
as follows: $2,613 for contributions to the thrift plan and
$1,643 for life insurance.
(j) For Mr. Watkins, the type and amount of compensation in 1994
is as follows: $2,488 for contributions to the thrift plan and
$3,698 for life insurance.
(k) For Mr. Mahoney, the type and amount of compensation in 1994
is as follows: $2,247 for contributions to the thrift plan and
$703 for life insurance.
<PAGE>
(l) For Mr. Frost, the type and amount of compensation in 1994 is
as follows: $1,986 for contributions to the thrift plan and
$720 for life insurance.
Directors' Compensation
Members of the Mass. Electric and Narragansett Boards of
Directors, except Dickson, McCabe, Rowe, and Sergel receive a
quarterly retainer of $1,250, a meeting fee of $600 plus expenses,
and 50 NEES common shares each year. Since all members of the NEP
Board are employees of NEES System companies, no fees are paid for
service on the Board except as noted below for Mrs. Bok.
Mrs. Bok retired as an employee of the System on January 1,
1994 (remaining as Chairman of the Board of NEES and a director for
NEES subsidiaries). Mrs. Bok has agreed to waive the normal fees
and annual retainers otherwise payable for services by non-
employees on NEES subsidiary boards and receives in lieu thereof a
single annual stipend of $60,000. Mrs. Bok also serves as a
consultant to NEES. Under the terms of her contract, she receives
an annual retainer of $100,000.
Mass. Electric and Narragansett permit directors to defer all
or a portion of their retainers and meeting fees. Special accounts
are maintained on Mass. Electric's and Narragansett's books showing
the amounts deferred and the interest accrued thereon.
Other
NEP, Mass. Electric, and Narragansett do not have any share
option plans.
The NEES Compensation Committee administers certain of the
incentive compensation plans, and the Management Committee
administers the others (including the incentive share plan).
Retirement Plans
The following table shows estimated annual benefits payable to
executive officers under the qualified pension plan and the
supplemental retirement plan, assuming retirement at age 65 in
1995.
PENSION TABLE
Five-Year
Average 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
Compensa- of of of of of of
tion Service Service Service Service Service Service
--------- -------- -------- -------- -------- -------- --------
$100,000 27,800 36,500 44,800 53,200 58,300 61,300
$150,000 42,900 56,100 69,000 82,000 90,000 94,500
$200,000 57,900 75,800 93,300 110,800 121,700 127,700
$250,000 72,900 95,500 117,600 139,600 153,500 161,000
$300,000 87,900 115,200 141,800 168,400 185,200 194,200
$350,000 103,000 134,900 166,100 197,200 216,900 227,400
$400,000 118,000 154,600 190,300 226,000 248,600 260,600
$500,000 148,000 194,000 238,800 283,600 312,100 327,100
<PAGE>
For purposes of the retirement plans, Messrs. Rowe, Tranen,
Newsham, Greenman, and Bailey currently have 17, 25, 44, 30, and 26
credited years of service, respectively. Mr. Sergel, Mr. Dickson,
Mr. Holt, Mr. Pini, and Ms. Sala currently have 16, 21, 23, 16, and
25 credited years of service, respectively. Messrs. McCabe,
Watkins, Mahoney, and Frost currently have 26, 22, 11, and 32
credited years of service, respectively.
Benefits under the pension plans are computed using formulae
based on percentages of highest average compensation computed over
five consecutive years. The compensation covered by the pension
plan includes salary, bonus, and restricted share awards. The
benefits listed in the pension table are not subject to deduction
for Social Security and are shown without any joint and survivor
benefits.
The Pension Table above does not include annuity payments to
be received in lieu of life insurance for Messrs. Rowe, Houston,
and Greenman. The policies are described below under Plan
Summaries.
In the year in which Mr. Newsham retires, he will receive a
one-time supplemental cash payment. The amount of the payment
would be $120,000 if he were to retire in 1995, and would be
reduced by $30,000 per year thereafter.
Under the Retirement Supplement Plan, participants receive a
limited cost of living (consumer price index) adjustment to their
pension benefits. There are no active employees currently in the
plan.
The System contributes the full amount toward post-retirement
health benefits for senior executives.
PAYMENTS UPON A CHANGE OF CONTROL
NEES has approved agreements with certain of its executives,
including Messrs. Greenman, Newsham, Rowe, Sergel, and Tranen,
which provide severance benefits in the event of certain
terminations of employment following a Change in Control of NEES
(as defined below). If, following a Change in Control, the
executive's employment is terminated other than for cause (as
defined) or if the executive terminates employment for good reason
(as defined), NEES will pay to the executive a lump sum cash
payment equal to three times (two times for some executives) the
sum of the executive's most recent annual base compensation and the
average of his or her bonus amounts for the prior three years. If
Mr. Rowe receives payments under his severance agreement that would
subject him to any federal excise tax due under section 280G of the
Internal Revenue Code, he will receive a cash "gross-up" payment so
he would be in the same net after-tax position he would have been
in had such excise tax not been applied. In addition, NEES will
provide disability and health benefits to the executive for two to
three years, provide such post-retirement health and welfare
<PAGE>
benefits as the executive would have earned within such two to
three years, and grant two or three additional years of pension
credit. Mr. Rowe would become eligible for benefits under the
Retirement Supplement Plan described above.
Change in Control, including potential change of control,
occurs (1) when any person becomes the beneficial owner of 20% of
the voting securities of NEES, (2) when the prior members of the
Board of NEES no longer constitute a 2/3 majority of the Board, or
(3) NEES enters into an agreement that could result in a Change in
Control.
The terms of the agreements are for three years with automatic
annual extensions, unless terminated by NEES.
The System's bonus plans, including the Incentive Thrift Plan,
and the Goals Program, are being amended to provide for payments
equal to the average of the bonuses for the three prior years in
the event of a Change of Control. This payment would be made in
lieu of the regular bonuses for the year in which the Change in
Control occurs. The System's Retirees Health and Life Insurance
Plan I has provisions preventing changes in benefits adverse to the
participants for three years following a Change in Control. The
Incentive Share Plan and the related Incentive Share Deferral
Agreements provide that, upon the occurrence of a change in control
(defined more narrowly than in other plans), restrictions on all
shares and account balances would cease.
NEP, MASS. ELECTRIC, AND NARRAGANSETT PLAN SUMMARIES
A brief description of the various plans through which
compensation and benefits are provided to the named executive
officers is presented below to better enable shareholders to
understand the information presented in the tables shown earlier.
The amounts of compensation and benefits provided to the named
executive officers under the plans described below (and charged to
NEP, Mass. Electric, or Narragansett) are presented in the Summary
Compensation Tables.
Goals Program
The goals program covers all employees who have completed one
year of service with any NEES subsidiary. Goals are established
annually. For 1994, these goals related to earnings per share,
customer costs, safety, absenteeism, conservation, generating
station availability, transmission reliability, environmental and
OSHA compliance, and customer favorability attitudes. Some goals
apply to all employees, while others apply to particular functional
groups. Depending upon the number of goals met, and provided the
minimum earnings goal is met, employees may earn a cash bonus of 1%
to 4-1/2% of their compensation.
<PAGE>
Incentive Thrift Plan
The incentive thrift plan (a 401(k) program) provides for a
match of one-half of up to the first 5% of base compensation
contributed to the System's incentive thrift plan (shown under All
Other Compensation in the Summary Compensation Tables) and, based
on an incentive formula tied to earnings per share, may fully match
the first 5% of base compensation contributed (the additional
amount, if any, is shown under Bonus in the Summary Compensation
Tables). Under Federal law, contributions to these plans are
limited. In 1994, the salary reduction amount was limited to
$9,240.
Incentive Compensation Plan
The System bonus plan for certain senior employees provides
that in order for cash bonuses to be awarded, NEES must achieve a
return on equity that places NEES in the top 50% of the electric
utilities listed in the Duff & Phelps Utility Group or in the top
50% of the New England/New York regional utilities. Bonuses are
also dependent upon the achievement of individual goals. In order
to provide a long-term component to the incentive compensation
plan, participants may also be awarded NEES common shares. An
individual's award of shares under the incentive share plan is a
fixed percentage of her or his cash bonus for that year. If no
cash award is made, no shares are distributed.
Life Insurance
NEES has established for certain senior executives life
insurance plans funded by individual policies. The combined death
benefit under these insurance plans is three times the
participant's annual salary.
After termination of employment, participants in one of the
insurance plans may elect, commencing at age 55 or later, to
receive an annuity income equal to 40% of annual salary. In that
event, the life insurance is reduced over fifteen years to an
amount equal to the participant's final annual salary. Due to
changes in the tax law, this plan was closed to new participants,
and an alternative was established with only a life insurance
benefit. The individuals listed in the NEP summary compensation
table are in one or the other of these plans. These plans are
structured so that, over time, the System should recover the cost
of the insurance premiums. Mass. Electric and Narragansett each
have two executive officers eligible to participate in one or the
other of these plans.
Financial Counseling
NEP, Mass. Electric, and Narragansett pay for personal
financial counseling for senior executives. As required by the
IRS, a portion of the amount paid is reported as taxable income for
the executive. Financial counseling is also offered to other
<PAGE>
employees through a limited number of seminars conducted at various
locations each year.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
NEES
----
The information required by this item is incorporated herein
by reference to the material under the caption TOTAL COMMON EQUITY
BASED HOLDINGS in the definitive proxy statement of NEES, dated
March 9, 1995, for the 1995 Annual Meeting of Shareholders,
provided that the information under the headings "Compensation
Committee Report on Executive Compensation" and "Corporate
Performance" are not so incorporated.
NEP, Mass. Electric, and Narragansett
-------------------------------------
NEES owns 100% of the voting securities of Mass. Electric and
Narragansett. NEES owns 98.85% of the voting securities of NEP.
SECURITY OWNERSHIP
The following tables list the holdings of NEES common shares
as of March 9, 1995 by NEP, Mass. Electric, and Narragansett
directors, the executive officers named in the Summary Compensation
Tables, and all directors and executive officers, as a group.
NEP
---
Shares Deferred
Beneficially Incentive
Name Owned (a) Shares (b)
---- ------------ ----------
Lawrence E. Bailey 4,761 833
Joan T. Bok 26,053
Frederic E. Greenman 11,284 1,619
Alfred D. Houston 11,653 1,880
John W. Newsham 11,084 1,168
John W. Rowe 19,598 4,878
Jeffrey D. Tranen 7,053 1,388
All directors and
executive officers,
as a group (13 persons) 115,441(c) 15,955
<PAGE>
Mass. Electric
--------------
Shares Deferred
Beneficially Incentive
Name Owned (a) Shares (b)
---- ------------ ----------
Urville J. Beaumont 163(d)
Joan T. Bok 26,053
Sally L. Collins 165
John H. Dickson 8,831 1,049
David L. Holt 5,703 789
Charles B. Housen 108
Patricia McGovern 51
Anthony C. Pini 7,395 536
John F. Reilly 165
John W. Rowe 19,598 4,878
Nancy H. Sala 6,258(e) 489
Richard P. Sergel 7,322 1,344
Richard M. Shribman 165
Roslyn M. Watson 265
All directors and
executive officers,
as a group (24 persons) 129,542(c) 13,297
Narragansett
------------
Shares Deferred
Beneficially Incentive
Name Owned (a) Shares (b)
---- ------------ ----------
Joan T. Bok 26,053
Stephen A. Cardi 164
Richard W. Frost 5,029 413
Frances H. Gammell 165
Joseph J. Kirby 165
James V. Mahoney 3,560 711
Robert L. McCabe 8,341 994
John W. Rowe 19,598 4,878
Richard P. Sergel 7,322 1,344
William E. Trueheart 165
William Watkins, Jr. 4,853 792
John A. Wilson, Jr. 558
All directors and
executive officers,
as a group (17 persons) 100,422(c) 11,906
<PAGE>
(a) Number of shares beneficially owned includes: (i) shares
directly owned by certain relatives with whom directors or
officers share voting or investment power; (ii) shares held of
record individually by a director or officer or jointly with
others or held in the name of a bank, broker, or nominee for
such individual's account; (iii) shares in which certain
directors or officers maintain exclusive or shared investment
or voting power whether or not the securities are held for
their benefit; and (iv) with respect to the executive officers,
allocated shares in the Incentive Thrift Plan described below.
(b) Deferred incentive shares represent the award of shares under
the Incentive Share Plan, described below, which have been
deferred for receipt until March 15, 2000, or, in some cases,
the later of March 15, 2000 or termination of employment. At
the end of the deferred period, the award may be paid out in
shares or 50% in shares and 50% in cash. While deferred, the
shares do not have voting rights or other rights associated
with ownership. The rights of the executives to payment are
those of general, unsecured creditors. As cash dividends are
declared, the number of deferred incentive shares will be
increased as if the dividends were reinvested in shares.
(c) Amount is less than 1% of the total number of shares of NEES
outstanding.
(d) Mr. Beaumont disclaims a beneficial ownership interest in 100
of these shares held under an irrevocable trust.
(e) Ms. Sala disclaims a beneficial ownership interest in 232
shares held under the Uniform Gift to Minors Act.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The construction company of Mr. Stephen A. Cardi, a director
of Narragansett, was paid $335,000 in 1994 pursuant to two
contracts with New England Power Company for construction work at
its Brayton Point Station. The contract amounts totalled $600,000
and $1,000,000, respectively.
Reference is made to Item 10. DIRECTORS AND EXECUTIVE OFFICERS
OF THE REGISTRANT and Item 11. EXECUTIVE COMPENSATION.
<PAGE>
PART IV
Item 14. EXHIBITS AND REPORTS ON FORM 8-K
List of Exhibits
Unless otherwise indicated, the exhibits listed below are
incorporated by reference to the appropriate exhibit numbers and
the Commission file numbers indicated in parentheses.
NEES
----
(3) Agreement and Declaration of Trust dated January 2, 1926,
as amended through April 28, 1992 (filed herewith).
(4) Instruments Defining the Rights of Security Holders
(a) Massachusetts Electric Company First Mortgage
Indenture and Deed of Trust, dated as of July 1,
1949, and twenty supplements thereto (Exhibit 7-A,
File No. 1-8019; Exhibit 7-B, File No. 2-8836;
Exhibit 4-C, File No. 2-9593; Exhibit 4 to 1980
Form 10-K, File No. 2-8019; Exhibit 4 to 1982 Form
10-K, File No. 0-5464; Exhibit 4 to 1986 Form 10-K,
File No. 0-5464; Exhibit 4(a) to 1988 Form 10-K,
File No. 1-3446; Exhibit 4(a) to 1989 Form 10-K,
File No. 1-3446; Exhibit 4(a) to 1992 Form 10-K,
File No. 1-3446; Exhibit 4(a) to 1993 Form 10-K,
File No. 1-3446).
(b) The Narragansett Electric Company First Mortgage
Indenture and Deed of Trust, dated as of September
1, 1944, and twenty-one supplements thereto
(Exhibit 7-1, File No. 2-7042; Exhibit 7-B, File
No. 2-7490; Exhibit 4-C, File No. 2-9423; Exhibit
4-D, File No. 2-10056; Exhibit 4 to 1980 Form 10-K,
File No. 0-898; Exhibit 4 to 1982 Form 10-K, File
No. 0-898; Exhibit 4 to 1983 Form 10-K, File No.
0-898; Exhibit 4 to 1985 Form 10-K, File No. 0-898;
Exhibit 4 to 1986 Form 10-K, File No. 0-898;
Exhibit 4 to 1987 Form 10-K, File No. 0-898;
Exhibit 4 to 1991 Form 10-K, File No. 0-898;
Exhibit 4(b) to 1992 Form 10-K, File No. 1-3446;
Exhibit 4(b) to 1993 Form 10-K, File No. 1-3446).
(c) The Narragansett Electric Company Preference
Provisions, as amended, dated March 23, 1993
(Exhibit 4(c) to 1993 NEES Form 10-K, File No. 1-
3446).
(d) New England Power Company Indentures
General and Refunding Mortgage Indenture and Deed
of Trust dated as of January 1, 1977 and nineteen
<PAGE>
supplements thereto (Exhibit 4(b) to 1980 Form
10-K, File No. 0-1229; Exhibit 4(b) to 1982 Form
10-K, File No. 0-1229; Exhibit 4(b) to 1983 Form
10-K, File No. 0-1229; Exhibit 4(b) to 1985 Form
10-K, File No. 0-1229; Exhibit 4(b) to 1986 Form
10-K, File No. 0-1229; Exhibit 4(c)(ii) to 1988
Form 10-K, File No. 1-3446; Exhibit 4(c)(ii) to
1989 Form 10-K, File No. 1-3446; Exhibit 4(c)(ii)
to 1990 Form 10-K, File No. 1-3446; Exhibit
4(c)(ii) to 1991 Form 10-K, File No. 1-3446;
Exhibit 4(c)(ii) to 1992 Form 10-K, File No.
1-3446; Exhibit 4(d) to 1993 Form 10-K, File No. 1-
3446).
(10) Material Contracts
(a) Boston Edison Company et al. and New England Power
Company: Amended REMVEC Agreement dated August 12,
1977 (Exhibit 5-4(d), File No. 2-61881).
(b) The Connecticut Light and Power Company et al. and
New England Power Company: Sharing Agreement for
Joint Ownership, Construction and Operation of
Millstone Unit No. 3 dated as of September 1, 1973,
and Amendment dated as of August 1, 1974 (Exhibit
10-5, File No. 2-52820); Amendments dated as of
December 15, 1975 and April 1, 1986; (Exhibit
10(b), to 1990 Form 10-K, File No. 1-3446).
Transmission Support Agreement dated August 9,
1974; Instrument of Transfer to NEP with respect to
the 1979 Connecticut Nuclear Unit, and Assumption
of Obligations, dated December 17, 1975 (Exhibit
10-6(b), File No. 2-57831).
(c) Connecticut Yankee Atomic Power Company et al. and
New England Power Company: Stockholders Agreement
dated July 1, 1964 (Exhibit 13-9-A, File No.
2-23006); Power Purchase Contract dated July 1,
1964 (Exhibit 13-9-B, File No. 2-23006);
Supplementary Power Contract dated as of April 1,
1987 (Exhibit 10(c) to 1987 Form 10-K, File No.
1-3446); Capital Funds Agreement dated September 1,
1964 (Exhibit 13-9-C, File No. 2-23006);
Transmission Agreement dated October 1, 1964
(Exhibit 13-9-D, File No. 2-23006); Agreement
revising Transmission Agreement dated July 1, 1979
(Exhibit to 1979 Form 10-K, File No. 1-3446);
Guarantee Agreement dated as of November 13, 1981
(Exhibit 10(d) to 1981 Form 10-K, File No. 1-3446);
Guarantee Agreement dated as of August 1, 1985
(Exhibit 10(c) to 1985 Form 10-K, File No. 1-3446).
(d) Maine Yankee Atomic Power Company et al. and New
England Power Company: Capital Funds Agreement
dated May 20, 1968 and Power Purchase Contract
dated May 20, 1968 (Exhibit 4-5, File No. 2-29145);
<PAGE>
Amendments dated as of January 1, 1984, March 1,
1984 (Exhibit 10(d) to 1983 Form 10-K, File No.
1-3446), October 1, 1984, and August 1, 1985
(Exhibit 10(d) to 1985 Form 10-K, File No. 1-3446);
Stockholders Agreement dated May 20, 1968 (Exhibit
10-20, File No. 2-34267); Additional Power Contract
dated as of February 1, 1984 (Exhibit 10(d) to 1985
Form 10-K, File No. 1-3446); Guarantee Agreement
dated as of September 23, 1985 (Exhibit 10(d) to
1985 Form 10-K, File No. 1-3446).
(e) New England Energy Incorporated Contracts
(i) Capital Funds Agreement with NEES dated
November 1, 1974 (Exhibit 10-29(b), File No.
2-52969); Amendment dated July 1, 1976, and
Amendment dated July 26, 1979 (Exhibit
10(g)(i) to 1980 Form 10-K, File No. 1-3446);
Amendment dated August 26, 1981 (Exhibit
10(f)(i) to 1981 Form 10-K, File No. 1-3446);
Amendment dated March 26, 1985 (Exhibit
10(e)(i) to 1985 Form 10-K, File No. 1-3446);
Amendment dated as of April 28, 1989 (Exhibit
10 (e)(i) to 1989 Form 10-K, File No.
1-3446); Amendment dated as of June 1, 1990
(Exhibit 10(e)(i) to 1990 Form 10-K, File No.
1-3446).
(ii) Loan Agreement with NEES dated July 19, 1978
and effective November 1, 1974, and Amendment
dated July 26, 1979 (Exhibit 10(g)(iii) to
1980 Form 10-K, File No. 1-3446); Amendment
dated August 26, 1981 (Exhibit 10(f)(ii) to
1981 Form 10-K, File No. 1-3446); Amendment
dated March 26, 1985 (Exhibit 10(e)(ii) to
1985 Form 10-K, File No. 1-3446); Amendment
dated as of April 28, 1989 (Exhibit 10(e)(ii)
to 1989 Form 10-K, File No. 1-3446);
Amendment dated as of June 1, 1990 (Exhibit
10(e)(ii) to 1990 Form 10-K, File No.
1-3446).
(iii) Fuel Purchase Contract with New England Power
Company dated July 26, 1979, and Amendment
dated August 26, 1981 (Exhibit 10(f)(iii) to
1981 Form 10-K, File No. 1-3446); Amendment
dated March 26, 1985, and Amendment effective
January 1, 1984 (Exhibit 10(e)(iii) to 1985
Form 10-K, File No. 1-3446); Amendment dated
as of April 28, 1989 (Exhibit 10(e)(iii) to
1989 Form 10-K, File No. 1-3446).
(iv) Partnership Agreement with Samedan Oil
Corporation as Amended and Restated on
February 5, 1985 (Exhibit 10(e)(iv) to 1984
Form 10-K, File No. 1-3446); Amendment dated
<PAGE>
as of January 14, 1992 (Exhibit 10(e)(iv) to
1991 Form 10-K, File No. 1-3446).
(v) Credit Agreement dated as of April 28, 1989
(Exhibit 10(e)(v) to 1989 Form 10-K, File No.
1-3446); Amendment dated as of June 1, 1990
(Exhibit 10(e)(v) to 1990 Form 10-K, File No.
1-3446); Amendment dated as of August 1, 1992
(Exhibit 10(e)(v) to 1992 Form 10-K, File No.
1-3446).
(vi) Capital Maintenance Agreement dated November
15, 1985, and Assignment and Security
Agreement dated November 15, 1985 (Exhibit
10(e)(vi) to 1985 Form 10-K, File No.
1-3446); Amendment dated as of April 28, 1989
(Exhibit 10(e)(vi) to 1989 Form 10-K, File
No. 1-3446).
(f) New England Power Company and New England Electric
Transmission Corporation et al.: Phase I Terminal
Facility Support Agreement dated as of December 1,
1981 (Exhibit 10(g) to 1981 Form 10-K, File No.
1-3446); Amendments dated as of June 1, 1982, and
November 1, 1982 (Exhibit 10(f) to 1982 Form 10-K,
File No. 1-3446); Agreement with respect to Use of
the Quebec Interconnection dated as of December 1,
1981 (Exhibit 10(g) to 1981 Form 10-K, File No.
1-3446); Amendments dated as of May 1, 1982, and
November 1, 1982 (Exhibit 10(f) to 1982 Form 10-K,
File No. 1-3446); Amendment dated as of January 1,
1986 (Exhibit (10)(f) 1986 Form 10-K, File No.
1-3446); Agreement for Reinforcement and
Improvement of New England Power Company's
Transmission System dated as of April 1, 1983
(Exhibit 10(f) to 1983 Form 10-K, File No. 1-3446);
Lease dated as of May 16, 1983 (Exhibit 10(f) to
1983 Form 10-K, File No. 1-3446); Upper Development
- Lower Development Transmission Line Support
Agreement dated as of May 16, 1983 (Exhibit 10(f)
to 1983 Form 10-K, File No. 1-3446).
(g) New England Electric Transmission Corporation and
PruCapital Management, Inc. et al: Note Agreement
dated as of September 1, 1986 (Exhibit 10(g) to
1986 Form 10-K, File No. 1-3446); Mortgage, Deed of
Trust and Security Agreement dated as of September
1, 1986 (Exhibit 10(g) to 1986 Form 10-K, File No.
1-3446); Equity Funding Agreement with New England
Electric System dated as of December 1, 1985
(Exhibit 10(g) to 1991 Form 10-K, File No. 1-3446).
(h) Vermont Electric Transmission Company, Inc. et al.
and New England Power Company: Phase I Vermont
Transmission Line Support Agreement dated as of
December 1, 1981; Amendments dated as of June 1,
<PAGE>
1982, and November 1, 1982 (Exhibit 10(g) to 1982
Form 10-K, File No. 1-3446); Amendment dated as of
January 1, 1986 (Exhibit 10(h) to 1986 Form 10-K,
File No. 1-3446).
(i) New England Power Pool Agreement: (Exhibit 4(e),
File No. 2-43025); Amendments dated July 1, 1972,
and March 1, 1973 (Exhibit 10-15, File No.
2-48543); Amendment dated March 15, 1974 (Exhibit
10-5, File No. 2-52775); Amendment dated June 1,
1975 (Exhibit 10-14, File No. 2-57831); Amendment
dated September 1, 1975 (Exhibit 10-13, File No.
2-59182); Amendments dated December 31, 1976,
January 31, 1977, July 1, 1977, and August 1, 1977
(Exhibit 10-16, File No. 2-61881); Amendments dated
August 15, 1978, January 3, 1980, and February 1980
(Exhibit 10-3, File No. 2-68283); Amendment dated
September 1, 1981 (Exhibit 10(h) to 1981 Form 10-K,
File No. 1-3446); Amendment dated as of December 1,
1981 (Exhibit 10(h) to 1982 Form 10-K, File No.
1-3446); Amendments dated June 1, 1982, June 15,
1983, and October 1, 1983 (Exhibit 10(i) to 1983
Form 10-K, File No. 1-3446); Amendments dated
August 1, 1985, August 15, 1985, September 1, 1985,
and January 1, 1986 (Exhibit 10(i) to 1985 Form
10-K, File No. 1-3446); Amendment dated
September 1, 1986 (Exhibit 10(i) to 1986 Form 10-K,
File No. 1-3446); Amendment dated April 30, 1987
(Exhibit 10(i) to 1987 Form 10-K, File No. 1-3446);
Amendments dated March 1, 1988 and May 1, 1988
(Exhibit 10(i) to 1988 Form 10-K, File No. 1-3446);
Amendment dated March 15, 1989 (Exhibit 10(i) to
1989 Form 10-K, File No. 1-3446); Amendment dated
October 1, 1990 (Exhibit 10(i) to 1990 Form 10-K,
File No. 1-3446); Amendment dated as of September
15, 1992 (Exhibit 10(i) to 1992 Form 10-K, File No.
1-3446).
(j) Public Service Company of New Hampshire et al. and
New England Power Company: Agreement for Joint
Ownership, Construction and Operation of New
Hampshire Nuclear Units dated as of May 1, 1973;
Amendments dated May 24, 1974, June 21, 1974,
September 25, 1974 and October 25, 1974 (Exhibit
10-18(b), File No. 2-52820); Amendment dated
January 31, 1975 (Exhibit 10-16(b), File No.
2-57831); Amendments dated April 18, 1979,
April 25, 1979, June 8, 1979, October 11, 1979,
December 15, 1979, June 16, 1980, December 31, 1980
(Exhibit 10(i) to 1980 Form 10-K, File No. 1-3446);
Amendments dated June 1, 1982, April 27, 1984,
June 15, 1984 (Exhibit 10(j) to 1984 Form 10-K,
File No. 1-3446); Amendments dated March 8, 1985,
March 14, 1986, May 1, 1986 and September 19, 1986
(Exhibit 10(j) to 1986 Form 10-K, File No. 1-3446);
Amendment dated November 12, 1987 (Exhibit 10(j) to
<PAGE>
1987 Form 10-K, File No. 1-3446); Amendment dated
January 13, 1989 (Exhibit 10(j) to 1989 Form 10-K,
File No. 1-3446); Amendment dated as of November 1,
1990 (Exhibit 10(j) to 1991 Form 10-K, File No. 1-
3446). Transmission Support Agreement dated as of
May 1, 1973 (Exhibit 10-23, File No. 2-49184);
Instrument of Transfer to NEP with respect to the
New Hampshire Nuclear Units and Assumptions of
Obligations dated December 17, 1975 and Agreement
Among Participants in New Hampshire Nuclear Units,
certain Massachusetts Municipal Systems and
Massachusetts Municipal Wholesale Electric Company
dated May 28, 1976 (Exhibit 10-16(c), File No.
2-57831); Seventh Amendment To and Restated
Agreement for Seabrook Project Disbursing Agent
(Exhibit 10(j) to 1991 Form 10-K, File No. 1-3446);
Amendments dated as of June 29, 1992 (Exhibit 10(j)
to 1992 Form 10-K, File No. 1-3446); Seabrook
Project Managing Agent Operating Agreement dated as
of June 29, 1992, and amendment to Seabrook Project
Managing Agent Agreement dated as of June 29, 1992
(Exhibit 10(j) to 1992 Form 10-K, File No. 1-3446).
(k) Vermont Yankee Nuclear Power Corporation et al. and
New England Power Company: Capital Funds Agreement
dated February 1, 1968, Amendment dated March 12,
1968, and Power Purchase Contract dated February 1,
1968 (Exhibit 4-6, File No. 2-29145); Amendments
dated as of June 1, 1972 and April 15, 1983
(Exhibit 10(k) to 1983 Form 10-K, File No. 1-3446)
and April 24, 1985 (Exhibit 10(k) to 1985 Form
10-K, File No. 1-3446); Amendment dated as of June
1, 1985 (Exhibit 10(k) to 1987 Form 10-K, File No.
1-3446); Amendments dated as of May 6, 1988
(Exhibit 10(k) to 1988 Form 10-K, File No. 1-3446);
Amendment dated as of June 15, 1989 (Exhibit 10(k)
to 1989 Form 10-K, File No. 1-3446); Additional
Power Contract dated as of February 1, 1984
(Exhibit 10(k) to 1983 Form 10-K, File No. 1-3446);
Guarantee Agreement dated as of November 5, 1981
(Exhibit 10(j) to 1981 Form 10-K, File No. 1-3446).
(l) Yankee Atomic Electric Company et al. and New
England Power Company: Amended and Restated Power
Contract dated April 1, 1985 (Exhibit 10(l) to 1985
Form 10-K, File No. 1-3446); Amendment dated May 6,
1988 (Exhibit 10(l) to 1988 Form 10-K, File No.
1-3446); Amendments dated as of June 26, 1989 and
July 1, 1989 (Exhibit 10 (l) to 1989 Form 10-K,
File No. 1-3446); Amendment dated as of February 1,
1992 (Exhibit 10(l) to 1992 Form 10-K, File No. 1-
3446).
*(m) New England Electric Companies' Deferred
Compensation Plan as amended dated December 8, 1986
(Exhibit 10(m) to 1986 Form 10-K, File No. 1-3446).
<PAGE>
*(n) New England Electric System Companies Retirement
Supplement Plan as amended dated April 1, 1991
(Exhibit 10(n) to 1991 Form 10-K, File No. 1-3446).
*(o) New England Electric Companies' Executive
Supplemental Retirement Plan as amended dated April
1, 1991 (Exhibit 10(o) to 1991 Form 10-K, File No.
1-3446).
*(p) New England Electric Companies' Incentive
Compensation Plan as amended dated January 1, 1992
(Exhibit 10(q) to 1992 Form 10-K, File No. 1-3446).
*(q) New England Electric Companies' Senior Incentive
Compensation Plan as amended dated November 26,
1991 (Exhibit 10(q) to 1991 Form 10-K, File No. 1-
3446).
*(r) New England Electric Companies' Incentive
Compensation Plan II as amended dated September 3,
1992 (Exhibit 10(r) to 1992 Form 10-K, File No.
1-3446).
*(s) New England Electric System Directors Deferred
Compensation Plan as amended dated November 24,
1992 (Exhibit 10(s) to 1992 Form 10-K, File No.
1-3446).
*(t) Forms of Life Insurance Program (Exhibit 10(s) to
1986 Form 10-K, File No. 1-3446); and Form of Life
Insurance (Collateral Assignment) (Exhibit 10(t) to
1991 Form 10-K, File No. 1-3446).
(u) New England Power Company and New England
Hydro-Transmission Electric Company, Inc. et al:
Phase II Massachusetts Transmission Facilities
Support Agreement dated as of June 1, 1985 (Exhibit
10(t) to 1986 Form 10-K, File No. 1-3446);
Amendment dated as of May 1, 1986 (Exhibit 10(t) to
1986 Form 10-K, File No. 1-3446); Amendments dated
as of February 1, 1987, June 1, 1987, September 1,
1987, and October 1, 1987 (Exhibit 10(u) to 1987
Form 10-K, File No. 1-3446); Amendment dated as of
August 1, 1988 (Exhibit 10(u) to 1988 Form 10-K,
File No. 1-3446); Amendment dated January 1, 1989
(Exhibit 10(u) to 1990 Form 10-K, File No. 1-3446).
(v) New England Power Company and New England
Hydro-Transmission Corporation et al: Phase II New
Hampshire Transmission Facilities Support Agreement
dated as of June 1, 1985 (Exhibit 10(u) to 1986
Form 10-K, File No. 1-3446); Amendment dated as of
May 1, 1986 (Exhibit 10(u) to 1986 Form 10-K, File
No. 1-3446); Amendments dated as of February 1,
1987, June 1, 1987, September 1, 1987, and
<PAGE>
October 1, 1987 (Exhibit 10(v) to 1987 Form 10-K,
File No. 1-3446); Amendment dated as of August
1,1988 (Exhibit 10(v) to 1988 Form 10-K, File No.
1-3446); Amendments dated January 1, 1989 and
January 1, 1990 (Exhibit 10(v) to 1990 Form 10-K,
File No. 1-3446).
(w) New England Power Company et al: Phase II New
England Power AC Facilities Support Agreement dated
as of June 1, 1985 (Exhibit 10(v) to 1986 Form
10-K, File No. 1-3446); Amendment dated as of May
1, 1986 (Exhibit 10(v) to 1986 Form 10-K, File No.
1-3446); Amendments dated as of February 1, 1987,
June 1, 1987, and September 1, 1987 (Exhibit 10(w)
to 1987 Form 10-K, File No. 1-3446); Amendment
dated as of August 1, 1988 (Exhibit 10(w) to 1988
Form 10-K, File No. 1-3446).
(x) New England Hydro-Transmission Electric Company,
Inc. and New England Electric System et al: Equity
Funding Agreement dated as of June 1, 1985 (Exhibit
10(w) to 1986 Form 10-K, File No. 1-3446);
Amendment dated as of May 1, 1986 (Exhibit 10(w) to
1986 Form 10-K, File No. 1-3446); Amendment dated
as of September 1, 1987 (Exhibit 10(x) to 1987
Form 10-K, File No. 1-3446); Amendment dated as of
August 1, 1988 (Exhibit 10(x) to 1988 Form 10-K,
File No. 1-3446).
(y) New England Hydro-Transmission Corporation and New
England Electric System et al: Equity Funding
Agreement dated as of June 1, 1985 (Exhibit 10(x)
to 1986 Form 10-K, File No. 1-3446); Amendment
dated as of May 1, 1986 (Exhibit 10(x) to 1986 Form
10-K, File No. 1-3446); Amendment dated as of
September 1, 1987 (Exhibit 10(y) to 1987 Form 10-K,
File No. 1-3446); Amendment dated as of August 1,
1988 (Exhibit 10(y) to 1988 Form 10-K, File No.
1-3446).
(aa) Ocean State Power, et al., and Narragansett Energy
Resources Company: Equity Contribution Agreement
dated as of December 29, 1988 (Exhibit 10(aa) to
1988 Form 10-K, File No. 1-3446); Amendment dated
as of September 29, 1989 (Exhibit 10 (aa) to 1989
Form 10-K File No. 1-3446); Ocean State Power, et
al., and New England Electric System: Equity
Contribution Support Agreement dated as of
December 29, 1988 (Exhibit 10(aa) to 1988 Form
10-K, File No. 1-3446); Amendment dated as of
September 29, 1989 (Exhibit 10 (aa) to 1989 Form
10-K, File No. 1-3446); Ocean State Power II, et
al., and Narragansett Energy Resources
Company:Equity Contribution Agreement dated as of
September 29, 1989 (Exhibit 10 (aa) to 1989 Form
10-K File No. 1-3446); Ocean State Power II, et
<PAGE>
al., and New England Electric System: Equity
Contribution Support Agreement dated as of
September 29, 1989 (Exhibit 10 (aa) to 1989 Form
10-K File No. 1-3446).
*(bb) New England Power Service Company and Joan T. Bok:
Service Credit Letter dated October 21, 1982
(Exhibit 10(cc) to 1992 Form 10-K, File No.
1-3446).
*(cc) New England Electric System and John W. Rowe:
Service Credit Letter dated December 5, 1988
(Exhibit 10(dd) to 1992 Form 10-K, File No.
1-3446).
*(dd) New England Power Service Company and the Company:
Form of Supplemental Pension Service Credit
Agreement (Exhibit 10(ee) to 1992 Form 10-K, File
No. 1-3446).
*(ee) New England Electric System and Frederic E.
Greenman: Service Credit Letter dated February 23,
1994 (filed herewith).
*(ff) New England Electric System and John W. Newsham;
Pension Service Credit Agreement dated February 23,
1994 (filed herewith).
* Compensation related plan, contract, or arrangement.
(13) 1994 Annual Report to Shareholders (filed herewith).
(21) Subsidiary list appears in Part I of this document.
(24) Power of Attorney (filed herewith).
(27) Financial Data Schedule (filed herewith).
NEP
---
(3) (a) Articles of Organization as amended through June
27, 1987 (Exhibit 3(a) to 1988 Form 10-K, File No.
0-1229).
(b) By-laws of the Company as amended June 25, 1987
(Exhibit 3 to 1987 Form 10-K, File No. 0-1229).
(4) General and Refunding Mortgage Indenture and Deed of Trust
dated as of January 1, 1977 and nineteen supplements
thereto (Exhibit 4(b) to 1980 Form 10-K, File No. 0-1229;
Exhibit 4(b) to 1982 Form 10-K, File No. 0-1229; Exhibit
4(b) to 1983 Form 10-K, File No. 0-1229; Exhibit 4(b) to
1985 Form 10-K, File No. 0-1229; Exhibit 4(b) to 1986 Form
<PAGE>
10-K, File No. 0-1229; Exhibit 4(b) to 1986 Form 10-K,
File No. 0-1229; Exhibit 4(b) to 1988 Form 10-K, File No.
0-1229; Exhibit 4(c)(ii) to 1989 NEES Form 10-K, File No.
1-3446; Exhibit 4(c)(ii) to 1990 NEES Form 10-K, File No.
1-3446; Exhibit 4(c)(ii) to 1991 NEES Form 10-K, File No.
1-3446; Exhibit 4(c)(ii) to 1992 NEES Form 10-K, File No.
1-3446; Exhibit 4(d) to 1993 NEES Form 10-K, File No.
1-3446).
(10) Material Contracts
(a) Boston Edison Company et al. and the Company:
Amended REMVEC Agreement dated August 12, 1977
(Exhibit 5-4(d), File No. 2-61881).
(b) The Connecticut Light and Power Company et al. and
the Company: Sharing Agreement for Joint
Ownership, Construction and Operation of Millstone
Unit No. 3 dated as of September 1, 1973, and
Amendment dated as of August 1, 1974 (Exhibit 10-5,
File No. 2-52820); Amendments dated as of December
15, 1975 and April 1, 1986 (Exhibit 10(b) to NEES'
1990 Form 10-K File No. 1-3446). Transmission
Support Agreement dated August 9, 1974; Instrument
of Transfer to the Company with respect to the 1979
Connecticut Nuclear Unit, and Assumption of
Obligations, dated December 17, 1975 (Exhibit
10-6(b), File No. 2-57831).
(c) Connecticut Yankee Atomic Power Company et al. and
the Company: Stockholders Agreement dated July 1,
1964 (Exhibit 13-9-A, File No. 2-2006); Power
Purchase Contract dated July 1, 1964 (Exhibit
13-9-B, File No. 2-23006); Supplementary Power
Contract dated as of April 1, 1987 (Exhibit 10(c)
to 1987 Form 10-K, File No. 0-1229); Capital Funds
Agreement dated September 1, 1964 (Exhibit 13-9-C,
File No. 2-23006);
Transmission Agreement dated October 1, 1964
(Exhibit 13-9-D, File No. 2-23006); Agreement
revising Transmission Agreement dated July 1, 1979
(Exhibit to NEES' 1979 Form 10-K, File No. 1-3446);
Five Year Capital Contribution Agreement dated
November 1, 1980 (Exhibit 10(e) to NEES' 1980 Form
10-K, File No. 1-3446); Guarantee Agreement dated
as of November 13, 1981 (Exhibit 10(d) to NEES'
1981 Form 10-K, File No. 1-3446); Guarantee
Agreement dated as of August 1, 1985 (Exhibit 10(c)
to NEES' 1985 Form 10-K, File No. 1-3446).
(d) Maine Yankee Atomic Power Company et al. and the
Company: Capital Funds Agreement dated May 20,
1968 and Power Purchase Contract dated May 20, 1968
(Exhibit 4-5, File No. 2-29145); Amendments dated
as of January 1, 1984, March 1, 1984 (Exhibit 10(d)
<PAGE>
to NEES' 1983 Form 10-K, File No. 1-3446); October
1, 1984, and August 1, 1985 (Exhibit 10(d) to NEES'
1985 Form 10-K, File No. 1-3446); Stockholders
Agreement dated May 20, 1968 (Exhibit 10-20; File
No. 2-34267); Additional Power Contract dated as of
February 1, 1984 (Exhibit 10(d) to NEES' 1985 Form
10-K, File No. 1-3446); Guarantee Agreement dated
as of September 23, 1985 (Exhibit 10(d) to NEES'
1985 Form 10-K, File No. 1-3446).
(e) Mass. Electric and the Company: Primary Service
for Resale dated February 15, 1974 (Exhibit
5-17(a), File No. 2-52969); Amendment of Service
Agreement dated June 22, 1983 (Exhibit 10(b) to
Mass. Electric's 1986 Form 10-K, File No. 0-5464);
Amendment of Service Agreement effective
November 1, 1993 (Exhibit 10(e) to 1993 Form 10-K,
File No. 0-1229); Memorandum of Understanding
effective May 22, 1994 (filed herewith).
(f) The Narragansett Electric Company and the Company:
Primary Service for Resale dated February 15, 1974
(Exhibit 4-1(b), File No. 2-51292); Amendment of
Service Agreement dated July 26, 1990 (Exhibit 4(f)
to New England Power Company's 1990 Form 10-K, File
No. 0-1229). Amendment of Service Agreement dated
July 24, 1991 (Exhibit 10(f) to 1991 Form 10-K,
File No. 0-1229); Amendment of Service Agreement
effective November 1, 1993 (Exhibit 10(f) to 1993
Form 10-K, File No. 0-1229); Memorandum of
Understanding effective May 22, 1994 (Exhibit 10(e)
to 1994 Form 10-K, File No. 0-1229).
(g) Time Charter between Intercoastal Bulk Carriers,
Inc., and New England Power Company dated as of
December 27, 1989 (Exhibit 10(g) to 1989 Form 10-K,
File No. 1-3446).
(h) New England Electric Transmission Corporation et
al. and the Company: Phase I Terminal Facility
Support Agreement dated as of December 1, 1981
(Exhibit 10(g) to NEES' 1981 Form 10-K, File No.
1-3446); Amendments dated as of June 1, 1982 and
November 1, 1982 (Exhibit 10(f) to NEES' 1982 Form
10-K, File No. 1-3446); Agreement with respect to
Use of the Quebec Interconnection dated as of
December 1, 1981 (Exhibit 10(g) to NEES' 1981 Form
10-K, File No. 1-3446); Amendments dated as of May
1, 1982 and November 1, 1982 (Exhibit 10(f) to
NEES' 1982 Form 10-K, File No. 1-3446); Amendment
dated as of January 1, 1986 (Exhibit 10(f) to NEES'
1986 Form 10-K, File No. 1-3446); Agreement for
Reinforcement and Improvement of the Company's
Transmission System dated as of April 1, 1983
(Exhibit 10(f) to NEES' 1983 Form 10-K, File No.
1-3446); Lease dated as of May 16, 1983 (Exhibit
<PAGE>
10(f) to NEES' 1983 Form 10-K, File No. 1-3446);
Upper Development-Lower Development Transmission
Line Support Agreement dated as of May 16, 1983
(Exhibit 10(f) to NEES' 1983 Form 10-K, File No.
1-3446).
(i) Vermont Electric Transmission Company, Inc. et al.
and the Company: Phase I Vermont Transmission Line
Support Agreement dated as of December 1, 1981;
Amendments dated as of June 1, 1982 and November 1,
1982 (Exhibit 10(g) to NEES' 1982 Form 10-K, File
No. 1-3446); Amendment dated as of January 1, 1986
(Exhibit 10(h) to NEES' 1986 Form 10-K, File No.
1-3446).
(j) New England Energy Incorporated and the Company:
Fuel Purchase Contract dated July 26, 1979, and
Amendment dated August 26, 1981 (Exhibit 10(f)(iii)
to NEES' 1981 Form 10-K, File No. 1-3446);
Amendment dated March 26, 1985, and Amendment
effective January 1, 1984 (Exhibit 10(e)(iii) to
NEES' 1985 Form 10-K, File No. 1-3446); Amendment
dated as of April 28, 1989 (Exhibit 10(e)(iii) to
1989 NEES Form 10-K, File No. 1-3446).
(k) New England Power Pool Agreement: (Exhibit 4(e),
File No. 2-43025); Amendments dated July 1, 1972,
March 1, 1973 (Exhibit 10-15, File No.
2-48543);Amendment dated March 15, 1974 (Exhibit
10-5, File No. 2-52775); Amendment dated June 1,
1975 (Exhibit 10-14, File No. 2-57831); Amendment
dated September 1, 1975 (Exhibit 10-13, File No.
2-59182); Amendments dated December 31, 1976,
January 31, 1977, July 1, 1977, and August 1, 1977
(Exhibit 10-16, File No. 2-61881); Amendments dated
August 15, 1978, January 3, 1980, and February 1980
(Exhibit 10-3, File No. 2-68283); Amendment dated
September 1, 1981 (Exhibit 10(h) to NEES' 1981 Form
10-K, File No. 1-3446); Amendment dated December 1,
1981 (Exhibit 10(h) to NEES' 1982 Form 10-K, File
No. 1-3446); Amendments dated June 1, 1982,
June 15, 1983, and October 1, 1983 (Exhibit 10(i)
to NEES' 1983 Form 10-K, File 1-3446); Amendments
dated August 1, 1985, August 15, 1985, September 1,
1985, and January 1, 1986 (Exhibit 10(i) to NEES'
1985 Form 10-K, File No. 1-3446); Amendment dated
September 1, 1986 (Exhibit 10(i) to NEES' 1986 Form
10-K, File No. 1-3446); Amendment dated April 30,
1987 (Exhibit 10(i) to NEES' 1987 Form 10-K, File
No. 1-3446); Amendments dated March 1, 1988 and May
1, 1988 (Exhibit 10(i) to NEES' 1988 Form 10-K,
File No. 1-3446); Amendment dated March 15, 1989
(Exhibit 10(i) to 1989 NEES Form 10-K, File No.
1-3446); Amendment dated October 1, 1990 (Exhibit
10 (i) to 1990 NEES Form 10-K, File No. 1-3446);
Amendment dated October 1, 1990 Exhibit 10(i) to
<PAGE>
1990 NEES Form 10-K, File No. 1-3446); Amendment
dated as of September 15, 1992 (Exhibit 10(i) to
1992 NEES Form 10-K, File No. 1-3446).
(l) New England Power Service Company and the Company:
Specimen of Service Contract (filed herewith).
(m) Public Service Company of New Hampshire et al. and
the Company: Agreement for Joint Ownership,
Construction and Operation of New Hampshire Nuclear
Units dated as of May 1, 1973; Amendments dated May
24, 1974, June 21, 1974, September 25, 1974 and
October 25, 1974 (Exhibit 10-18(b), File No.
2-52820); Amendment dated January 31, 1975 (Exhibit
10-16(b), File No. 2-57831); Amendments dated April
18, 1979, April 25, 1979, June 8, 1979, October 11,
1979, December 15, 1979, June 16, 1980, and
December 31, 1980 (Exhibit 10(i) to NEES' 1980 Form
10-K, File No. 1-3446); Amendments dated June 1,
1982, April 27, 1984, and June 15, 1984 (Exhibit
10(j) to NEES' 1984 Form 10-K, File No. 1-3446);
Amendments dated March 8, 1985, March 14, 1986,
May 1, 1986, and September 19, 1986 (Exhibit 10(j)
to NEES' 1986 Form 10-K, File No. 1-3446);
Amendment dated November 12, 1987 (Exhibit 10(j) to
NEES' 1987 Form 10-K, File No. 1-3446); Amendment
dated January 13, 1989 (Exhibit 10(j) to NEES' 1990
Form 10-K, File No. 1-3446); Seventh Amendment as
of November 1, 1990 (Exhibit 10(m) to NEES' 1991
Form 10-K, File No. 1-3446). Transmission Support
Agreement dated as of May 1, 1973 (Exhibit 10-23,
File No. 2-49184); Instrument of Transfer to the
Company with respect to the New Hampshire Nuclear
Units and Assumptions of Obligations dated December
17, 1975 and Agreement Among Participants in New
Hampshire Nuclear Units, certain Massachusetts
Municipal Systems and Massachusetts Municipal
Wholesale Electric Company dated May 28, 1976
(Exhibit 16(c), File No. 2-57831); Seventh
Amendment To and Restated Agreement for Seabrook
Project Disbursing Agent dated as of November 1,
1990 (Exhibit 10(m) to NEES' 1991 Form 10-K, File
No. 1-3446); Amendments dated as of June 29, 1992
(Exhibit 10(j) to NEES' 1992 Form 10-K, File No. 1-
3446). Settlement Agreement dated as of July 19,
1990 between Northeast Utilities Service Company
and the Company (Exhibit 10(m) to NEES' 1991 Form
10-K, File No. 1-3446). Seabrook Project Managing
Agent Operating Agreement dated as of June 29,
1992, Amendment to Seabrook Project Managing Agent
Operating Agreement dated as of June 29, 1992
(Exhibit 10(j) to NEES' 1992 Form 10-K, File No. 1-
3446).
<PAGE>
(n) Vermont Yankee Nuclear Power Corporation et al. and
the Company: Capital Funds Agreement dated
February 1, 1968, Amendment dated March 12, 1968
and Power Purchase Contract dated February 1, 1968
(Exhibit 4-6, File No. 2-29145); Amendments dated
as of June 1, 1972, April 15, 1983 (Exhibit 10(k)
to NEES' 1983 Form 10-K, File No. 0-1229) and
April 24, 1985 (Exhibit 10(n) to NEES' 1985 Form
10-K, File No. 1-3446); Amendment dated as of
June 1, 1985 (Exhibit 10(n) to 1988 Form 10-K, File
No. 0-1229); Amendments dated May 6, 1988 (Exhibit
10(n) to 1988 Form 10-K, File No. 0-1229);
Amendment dated as of June 15, 1989 (Exhibit 10(k)
to 1989 NEES Form 10-K, File No. 1-3446);
Additional Power Contract dated as of February 1,
1984 (Exhibit 10(k) to NEES' 1983 Form 10-K, File
No. 1-3446); Guarantee Agreement dated as of
November 5, 1981 (Exhibit 10(j) to NEES' 1981 Form
10-K, File No. 1-3446).
(o) Yankee Atomic Electric Company et al. and the
Company: Amended and Restated Power Contract dated
April 1, 1985 (Exhibit 10(l) to NEES' 1985 Form
10-K, File No. 1-3446); Amendment dated May 6, 1988
(Exhibit 10(l) to NEES' 1988 Form 10-K, File No.
1-3446); Amendments dated as of June 26, 1989 and
July 1, 1989 (Exhibit 10(l) to 1989 NEES Form 10-K,
File No. 1-3446); Amendment dated as of February 1,
1992 (Exhibit 10(l) to 1992 NEES Form 10-K, File
No. 1-3446).
*(p) New England Electric Companies' Deferred
Compensation Plan as amended dated December 8, 1986
(Exhibit 10(m) to NEES' 1986 Form 10-K, File No.
1-3446).
*(q) New England Electric System Companies Retirement
Supplement Plan as amended dated April 1, 1991
(Exhibit 10(n) to NEES' 1991 Form 10-K, File No.
1-3446).
*(r) New England Electric Companies' Executive
Supplemental Retirement Plan as amended dated April
1, 1991 (Exhibit 10(o) to NEES' 1991 Form 10-K,
File No. 1-3446).
*(s) New England Electric Companies' Incentive
Compensation Plan as amended dated January 1, 1992
(Exhibit 10(p) to NEES' 1992 Form 10-K, File No.
1-3446); New England Electric Companies' Senior
Incentive Compensation Plan as amended dated
November 26, 1991 (Exhibit 10(q) to NEES' 1991 Form
10-K, File No. 1-3446).
*(t) Forms of Life Insurance Program: (Exhibit 10(s) to
NEES' 1986 Form 10-K, File No. 1-3446); and Form of
<PAGE>
Life Insurance (Collateral Assignment) (Exhibit
10(t) to NEES' 1991 Form 10-K, File No. 1-3446).
*(u) New England Electric Companies' Incentive
Compensation Plan II as amended dated September 1,
1992 (Exhibit 10 (r) to NEES' 1992 Form 10-K, File
No. 1-3446).
(v) New England Hydro-Transmission Electric Company,
Inc. et al. and the Company: Phase II
Massachusetts Transmission Facilities Support
Agreement dated as of June 1, 1985 (Exhibit 10(t)
to NEES' 1986 Form 10-K, File No. 1-3446);
Amendment dated as of May 1, 1986 (Exhibit 10(t) to
NEES' 1986 Form 10-K, File No. 1-3446); Amendments
dated as of February 1, 1987, June 1, 1987,
September 1, 1987, and October 1, 1987 (Exhibit
10(u) to NEES' 1987 Form 10-K, File No. 1-3446);
Amendment dated as of August 1, 1988 (Exhibit 10(u)
to NEES' 1988 Form 10-K, File No. 1-3446);
Amendment dated January 1, 1989 (Exhibit 10 (u) to
NEES' 1990 Form 10-K, File No. 1-3446).
(w) New England Hydro-Transmission Corporation et al.
and the Company: Phase II New Hampshire
Transmission Facilities Support Agreement dated as
of June 1, 1985 (Exhibit 10(u) to NEES' 1986 Form
10-K, File No. 1-3446); Amendment dated as of
May 1, 1986 (Exhibit 10(u) to NEES' 1986 Form 10-K,
File No. 1-3446); Amendments dated as of February
1, 1987, June 1, 1987, September 1, 1987, and
October 1, 1987 (Exhibit 10(v) to NEES' 1987 Form
10-K, File No. 1-3446). Amendment dated as of
August 1, 1988 (Exhibit 10(v) to NEES' 1988 Form
10-K, File No. 1-3446); Amendments dated January 1,
1989 and January 1, 1990 (Exhibit 10 (v) to NEES'
1990 Form 10-K, File No. 1-3446).
(x) Vermont Electric Power Company et al. and the
Company: Phase II New England Power AC Facilities
Support Agreement dated as of June 1, 1985 (Exhibit
10(v) to NEES' 1986 Form 10-K, File No. 1-3446);
Amendment dated as of May 1, 1986 (Exhibit 10(v) to
NEES' 1986 Form 10-K, File No. 1-3446). Amendments
dated as of February 1, 1987, June 1, 1987, and
September 1, 1987 (Exhibit 10(w) to NEES' 1987 Form
10-K, File No. 1-3446); Amendment dated as of
August 1, 1988 (Exhibit 10(w) to NEES' 1988 Form
10-K, File No. 1-3446).
(y) TransCanada Pipelines Limited and the Company: Firm
Service Contract for Firm Transportation Service
for natural gas dated as of January 6, 1992;
Amendment dated as of March 2, 1992 (Exhibit 10(y)
to 1992 Form 10-K, File No. 0-1229); Amendment
dated as of October 29, 1993 (filed herewith).
<PAGE>
(z) Renaissance Energy Ltd. and the Company: Temporary
Transportation Contract Assignment (capacity swap)
for Firm Transportation Service for natural gas
dated as of October 27, 1993; Amendment dated as of
October 25, 1994 (filed herewith).
(aa) Algonquin Gas Transmission Company and the Company:
X-38 Service Agreement for Firm Transportation of
natural gas dated July 3, 1992; Amendment dated
July 31, 1992 (Exhibit 10(aa) to 1992 Form 10-K,
File No. 0-1229); Amendment dated April 15, 1994
(filed herewith).
(bb) ANR Pipeline Company and the Company: Gas
Transportation Agreement dated July 18, 1990
(Exhibit 10(bb) to 1992 Form 10-K, File No.
0-1229).
(cc) Columbia Gas Transmission Corporation and the
Company: Service Agreement for Service under FTS
Rate Schedule dated June 13, 1991 (Exhibit 10(cc)
to 1993 Form 10-K, File No. 0-1229).
(dd) Iroquois Gas Transmission System, L.P. and the
Company: Gas Transportation Contract for Firm
Reserved Service dated as of June 5, 1991 (Exhibit
10(dd) to 1992 Form 10-K, File No. 0-1229).
(ee) Tennessee Gas Pipeline Company and the Company:
Firm Natural Gas Transportation Agreement dated
July 9, 1992 (Exhibit 10(ee) to 1992 Form 10-K,
File No. 0-1229).
* Compensation related plan, contract, or arrangement.
(12) Statement re computation of ratios for incorporation by
reference into NEP registration statements on Form S-3,
Commission File Nos. 33-48257, 33-48897, and 33-49193
(filed herewith).
(13) 1994 Annual Report to Stockholders (filed herewith).
(21) Subsidiary list (filed herewith).
(24) Power of Attorney (filed herewith).
(27) Financial Data Schedule (filed herewith).
<PAGE>
Mass. Electric
--------------
(3) (a) Articles of Organization of the Company as amended
March 5, 1993, August 11, 1993, September 20, 1993,
and November 15, 1993 (Exhibit 3(a) to 1993 Form
10-K, File No. 0-5464).
(b) By-Laws of the Company as amended February 4, 1993,
July 30, 1993, and September 15, 1993 (Exhibit 3(b)
to 1993 Form 10-K, File No. 0-5464).
(4) First Mortgage Indenture and Deed of Trust, dated as of
July 1, 1949, and twenty supplements thereto (Exhibit 7-A,
File No. 1-8019; Exhibit 7-B, File No. 2-8836; Exhibit
4-C, File No. 2-9593; Exhibit 4 to 1980 Form 10-K, File
No. 2-8019; Exhibit 4 to 1982 Form 10-K, File No. 0-5464;
Exhibit 4 to 1986 Form 10-K, File No. 0-5464); Exhibit 4
to 1988 Form 10-K, File No. 0-5464; Exhibit 4(a) to 1989
NEES Form 10-K, File No. 1-3446; Exhibit 4(a) to 1992 NEES
Form 10-K, File No. 1-3446; Exhibit 4(a) to 1993 NEES Form
10-K, File No. 1-3446).
(10) Material Contracts
(a) Boston Edison Company et al. and Company: Amended
REMVEC Agreement dated August 12, 1977 (Exhibit
5-4(d), File No. 2-61881).
(b) New England Power Company and the Company: Primary
Service for Resale dated February 15, 1974 (Exhibit
5-17(a), File No. 2-52969); Amendment of Service
Agreement dated July 22, 1983 (Exhibit 10(b) to
1986 Form 10-K, File No. 0-5464); Amendment of
Service Agreement effective November 1, 1993
(Exhibit 10(e) to 1993 NEP Form 10-K, File No. 0-
1229); Memorandum of Understanding effective May
22, 1994 (Exhibit 10(e) to 1994 NEP Form 10-K, File
No. 0-1229).
(c) New England Power Pool Agreement: (Exhibit 4(e),
File No. 2-43025); Amendments dated July 1, 1972,
and March 1, 1973 (Exhibit 10-15, File No.
2-48543); Amendment dated March 15, 1974 (Exhibit
10-5, File No. 2-52775); Amendment dated June 1,
1975 (Exhibit 10-14, File No. 2-57831); Amendment
dated September 1, 1975 (Exhibit 10-13, File No.
2-59182); Amendments dated December 31, 1976,
January 31, 1977, July 1, 1977, and August 1, 1977
(Exhibit 10-16, File No. 2-61881); Amendments dated
August 15, 1978, January 3, 1980, and February 1980
(Exhibit 10-3, File No. 2-68283); Amendment dated
September 1, 1981 (Exhibit 10(h) to NEES' 1981 Form
10-K, File No. 1-3446); Amendment dated as of
December 1, 1981 (Exhibit 10(h) to NEES' 1982 Form
<PAGE>
10-K, File No. 1-3446); Amendments dated June 1,
1982, June 15, 1983, and October 1, 1983 (Exhibit
10(i) to NEES' 1983 Form 10-K, File No. 1-3446);
Amendments dated August 1, 1985, August 15, 1985,
September 1, 1985, and January 1, 1986 (Exhibit
10(i) to NEES' 1985 Form 10-K, File No. 1-3446);
Amendment dated September 1, 1986 (Exhibit 10(i) to
NEES' 1986 Form 10-K, File No. 1-3446); Amendments
dated April 30, 1987 (Exhibit 10(i) to NEES' 1987
Form 10-K, File No. 1-3446); Amendments dated
March 1, 1988 and May 1, 1988 (Exhibit 10(i) to
NEES' 1988 Form 10-K, File No. 1-3446); Amendment
dated March 15, 1989 (Exhibit 10(i) to 1989 NEES
Form 10-K, File No. 1-3446). Amendment dated
October 1, 1990 (Exhibit 10(i) to 1990 NEES Form
10-K, File No. 1-3446); Amendment dated as of
September 15, 1992 (Exhibit 10(i) to 1992 NEES Form
10-K, File No. 1-3446).
(d) New England Power Service Company and the Company:
Specimen of Service Contract (Exhibit 10(l) to 1994
NEP Form 10-K, File No. 0-1229).
(e) New England Telephone and Telegraph Company and the
Company: Specimen of Joint Ownership Agreement for
Wood Poles (Exhibit 4(e), File No. 2-24458).
*(f) New England Electric Companies' Deferred
Compensation Plan as amended dated December 8, 1986
(Exhibit 10(m) to NEES' 1986 Form 10-K, File No.
1-3446).
*(g) New England Electric System Companies Retirement
Supplement Plan as amended dated April 1, 1991
(Exhibit 10(n) to NEES' 1991 Form 10-K, File No.
1-3446).
*(h) New England Electric Companies' Executive
Supplemental Retirement Plan as amended dated April
1, 1991 (Exhibit 10(o) to NEES' 1991 Form 10-K,
File No. 1-3446).
*(i) New England Electric Companies' Incentive
Compensation Plan as amended dated January 1, 1992
(Exhibit 10(p) to NEES' 1992 Form 10-K, File No.
1-3446).
*(j) New England Electric Companies' Form of Deferred
Compensation Agreement for Directors (Exhibit 10(p)
to NEES' 1980 Form 10-K, File No. 1-3446).
*(k) New England Electric Companies' Senior Incentive
Compensation Plan as amended dated November 26,
1991 (Exhibit 10(q) to NEES' 1991 Form 10-K, File
No. 1-3446).
<PAGE>
*(l) Forms of Life Insurance Program: (Exhibit 10(s) to
NEES' 1986 Form 10-K, File No. 1-3446); and Form of
Life Insurance (Collateral Assignment) (Exhibit
10(t) to NEES' 1991 Form 10-K, File No. 1-3446).
*(m) New England Electric Companies' Incentive
Compensation Plan II as amended dated September 1,
1992 (Exhibit 10(r) to NEES' 1992 Form 10-K, File
No. 1-3446).
*(n) New England Power Service Company and the Company:
Form of Supplemental Pension Service Credit
Agreement (Exhibit 10(ee) to 1992 NEES Form 10-K,
File No. 1-3446).
* Compensation related plan, contract, or arrangement.
(13) 1994 Annual Report to Stockholders (filed herewith).
(24) Power of Attorney (filed herewith).
(27) Financial Data Schedule (filed herewith).
Narragansett
------------
(3) (a) Articles of Incorporation as amended June 9, 1988
(Exhibit 3(a) to 1988 Form 10-K, File No. 0-898).
(b) By-Laws of the Company (Exhibit 3 to 1980 Form
10-K, File No. 0-898).
(4) (a) First Mortgage Indenture and Deed of Trust, dated
as of September 1, 1944, and twenty-one supplements
thereto (Exhibit 7-1, File No. 2-7042; Exhibit 7-B,
File No. 2-7490; Exhibit 4-C, File No. 2-9423;
Exhibit 4-D, File No. 2-10056; Exhibit 4 to 1980
Form 10-K, File No. 0-898; Exhibit 4 to 1982 Form
10-K, File No. 0-898; Exhibit 4 to 1983 Form 10-K,
File No. 0-898; Exhibit 4 to 1985 Form 10-K, File
No. 0-898; Exhibit 4 to 1986 Form 10-K, File No.
0-898; Exhibit 4 to 1987 Form 10-K, File No. 0-898;
Exhibit 4(b) to 1991 NEES Form 10-K, File No.
1-3446; Exhibit 4(b) to 1992 NEES Form 10-K, File
No. 1-3446; Exhibit 4(b) to 1993 NEES Form 10-K,
File No. 1-3446).
(b) The Narragansett Electric Company Preference
Provisions, as amended, dated March 23, 1993
(Exhibit 4(c) to 1993 NEES Form 10-K, File No. 1-
3446).
<PAGE>
(10) Material Contracts
(a) Boston Edison Company et al. and the Company:
Amended REMVEC Agreement dated August 12, 1977
(Exhibit 5-4(d), File No. 2-61881).
(b) New England Power Company and the Company: Primary
Service for Resale dated February 15, 1974 (Exhibit
4-1(b), File No. 2-51292); Amendment of Service
Agreement dated July 26, 1990 (Exhibit 10(f) to
1990 NEP Form 10-K, File No. 0-1229); Amendment of
Service Agreement dated July 24, 1991 (Exhibit 4(f)
to 1991 NEP Form 10-K, File No. 0-1229); Amendment
of Service Agreement effective November 1, 1993
(Exhibit 10(f) to 1993 NEP Form 10-K, File No.
0-1229); Memorandum of Understanding effective May
22, 1994 (Exhibit 10(f) to 1994 NEP Form 10-K, File
No. 0-1229).
(c) New England Power Pool Agreement: (Exhibit 4(e),
File No. 2-43025); Amendments dated July 1, 1972,
and March 1, 1973 (Exhibit 10-15, File No.
2-48543); Amendment dated March 15, 1974 (Exhibit
10-5, File No. 2-52775); Amendment dated June 1,
1975 (Exhibit 10-14, File No. 2-57831); Amendment
dated September 1, 1975 (Exhibit 10-13, File No.
2-59182); Amendments dated December 31, 1976,
January 31, 1977, July 1, 1977, and August 1, 1977
(Exhibit 10-16, File No. 2-61881); Amendments dated
August 15, 1978, January 3, 1980, and February 1980
(Exhibit 10-3, File No. 2-68283); Amendment dated
September 1, 1981 (Exhibit 10(h) to NEES' 1981 Form
10-K, File No. 1-3446); Amendment dated December 1,
1981 (Exhibit 10(h) to NEES' 1982 Form 10-K, File
No. 1-3446); Amendments dated June 1, 1982,
June 15, 1983, and October 1, 1983 (Exhibit 10(i)
to NEES' 1983 Form 10-K, File No. 1-3446);
Amendments dated August 1, 1985, August 15, 1985,
September 1, 1985, and January 1, 1986 (Exhibit 10
(i) to NEES' 1985 Form 10-K, File No. 1-3446);
Amendment dated September 1, 1986 (Exhibit 10(i) to
NEES' 1986 Form 10-K, File No. 1-3446); Amendment
dated April 30, 1987 (Exhibit 10(i) to NEES' 1987
Form 10-K, File No. 1-3446); Amendments dated March
1, 1988 and May 1, 1988 (Exhibit 10(i) to NEES'
1988 Form 10-K, File No. 1-3446); Amendment dated
March 15, 1989 (Exhibit 10(i) to 1989 NEES Form
10-K, File No. 1-3446). Amendment dated October 1,
1990 (Exhibit 10(i) to 1990 NEES' Form 10-K, File
No. 1-3446); Amendment dated as of September 15,
1992 (Exhibit 10(i) to NEES' 1992 Form 10-K, File
No. 1-3446.
<PAGE>
(d) New England Power Service Company and the Company:
Specimen of Service Contract (Exhibit 4(l) to 1994
NEP Form 10-K, File No. 0-1229).
(e) New England Telephone and Telegraph Company and the
Company: Specimen of Joint Ownership Agreement for
Wood Poles (Exhibit 3(d), File No. 2-24458).
*(f) New England Electric Companies' Deferred
Compensation Plan for Officers, as amended December
8, 1986 (Exhibit 10(m) to NEES' 1986 Form 10-K,
File No. 1-3446).
*(g) New England Electric System Companies Retirement
Supplement Plan, as amended April 1, 1991 (Exhibit
10(n) to NEES' 1991 Form 10-K, File No. 1-3446).
*(h) New England Electric Companies' Executive
Supplemental Retirement Plan, as amended dated
April 1, 1991 (Exhibit 10(o) to NEES' 1991
Form 10-K, File No. 1-3446).
*(i) New England Companies' Incentive Compensation Plan,
as amended dated January 1, 1992 (Exhibit 10(p) to
NEES' 1992 Form 10-K, File No. 1-3446).
*(j) New England Electric Companies' Form of Deferred
Compensation Agreement for Directors (Exhibit 10(p)
to NEES' 1980 Form 10-K, File No. 1-3446).
*(k) New England Electric Companies' Senior Incentive
Compensation Plan as amended dated November 26,
1991 (Exhibit 10(q) to NEES' 1991 Form 10-K, File
No. 1-3446).
*(l) Forms of Life Insurance Program (Exhibit 10(s) to
NEES' 1986 Form 10-K, File No. 1-3446); and Form of
Life Insurance (Collateral Assignment) (Exhibit
10(t) to NEES' 1991 Form 10-K, File No. 1-3446).
*(m) New England Electric Companies' Incentive
Compensation Plan II as amended dated September 1,
1992 (Exhibit 10(r) to NEES' 1992 Form 10-K, File
No. 1-3446).
*(n) New England Power Service Company and the Company:
Form of Supplemental Pension Service Credit
Agreement (Exhibit 10(ee) to 1992 NEES Form 10-K,
File No. 1-3446).
* Compensation related plan, contract, or arrangement.
(12) Statement re computation of ratios for incorporation by
reference into the Narragansett registration statement on
Form S-3, Commission File No. 33-50015 (filed herewith).
<PAGE>
(13) 1994 Annual Report to Stockholders (filed herewith).
(24) Power of Attorney (filed herewith).
(27) Financial Data Schedule (filed herewith).
Reports on Form 8-K
NEES
----
NEES filed reports on Form 8-K dated October 25, 1994 and
December 7, 1994, both of which contained Item 5.
NEP
---
NEP filed reports on Form 8-K dated October 25, 1994 and
December 7, 1994, both of which contained Item 5.
Mass. Electric
--------------
None.
Narragansett
------------
Narragansett filed reports on Form 8-K dated April 27, 1994,
April 28, 1994, and May 13, 1994, all of which contained Item 5.
<PAGE>
NEW ENGLAND ELECTRIC SYSTEM
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf, by the undersigned thereunto duly authorized.
NEW ENGLAND ELECTRIC SYSTEM*
s/John W. Rowe
John W. Rowe
President and
Chief Executive Officer
March 29, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
(Signature and Title)
Principal Executive Officer
s/John W. Rowe
John W. Rowe
President and
Chief Executive Officer
Principal Financial Officer
s/Alfred D. Houston
Alfred D. Houston
Executive Vice President and
Chief Financial Officer
Principal Accounting Officer
s/Michael E. Jesanis
Michael E. Jesanis
Treasurer
Directors (a majority)
Joan T. Bok
Paul L. Joskow
Edward H. Ladd
Joshua A. McClure
Malcolm McLane s/John G. Cochrane
Felix A. Mirando, Jr. All by:
John W. Rowe John G. Cochrane
George M. Sage Attorney-in-fact
Anne Wexler
James R. Winoker
Date (as to all signatures on this page)
March 29, 1995
*The name "New England Electric System" means the trustee or trustees for the
time being (as trustee or trustees but not personally) under an agreement and
declaration of trust dated January 2, 1926, as amended, which is hereby
referred to, and a copy of which as amended has been filed with the Secretary
of the Commonwealth of Massachusetts. Any agreement, obligation or liability
made, entered into or incurred by or on behalf of New England Electric System
binds only its trust estate, and no shareholder, director, trustee, officer
or agent thereof assumes or shall be held to any liability therefor.
<PAGE>
NEW ENGLAND POWER COMPANY
SIGNATURES
Pursuant to the Requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized. The signature
of the undersigned company shall be deemed to relate only to matters having
reference to such company.
NEW ENGLAND POWER COMPANY
s/Jeffrey D. Tranen
Jeffrey D. Tranen
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated. The signature of
each of the undersigned shall be deemed to relate only to matters having
reference to the above-named company.
(Signature and Title)
Principal Executive Officer
s/Jeffrey D. Tranen
Jeffrey D. Tranen
President
Principal Financial Officer
s/Michael E. Jesanis
Michael E. Jesanis
Treasurer
Principal Accounting Officer
s/H.W. McDowell
Howard W. McDowell
Controller
Directors (a majority)
Joan T. Bok
Frederic E. Greenman s/John G. Cochrane
Alfred D. Houston
John W. Newsham All by:
Jeffrey D. Tranen John G. Cochrane
Attorney-in-fact
Date (as to all signatures on this page)
March 29, 1995
<PAGE>
MASSACHUSETTS ELECTRIC COMPANY
SIGNATURES
Pursuant to the Requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized. The signature
of the undersigned company shall be deemed to relate only to matters having
reference to such company.
MASSACHUSETTS ELECTRIC COMPANY
s/John H. Dickson
John H. Dickson
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated. The signature of
each of the undersigned shall be deemed to relate only to matters having
reference to the above-named company.
(Signature and Title)
Principal Executive Officer
s/John H. Dickson
John H. Dickson
President
Principal Financial Officer
s/Michael E. Jesanis
Michael E. Jesanis
Treasurer
Principal Accounting Officer
s/H.W. McDowell
Howard W. McDowell
Controller
Directors (a majority)
Urville J. Beaumont
Joan T. Bok
Sally L. Collins s/John G. Cochrane
John H. Dickson
Patricia McGovern All by:
John F. Reilly John G. Cochrane
John W. Rowe Attorney-in-fact
Richard P. Sergel
Richard M. Shribman
Roslyn M. Watson
Date (as to all signatures on this page)
March 29, 1995
<PAGE>
THE NARRAGANSETT ELECTRIC COMPANY
SIGNATURES
Pursuant to the Requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized. The signature
of the undersigned company shall be deemed to relate only to matters having
reference to such company.
THE NARRAGANSETT ELECTRIC COMPANY
s/Robert L. McCabe
Robert L. McCabe
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated. The signature of
each of the undersigned shall be deemed to relate only to matters having
reference to the above-named company.
(Signature and Title)
Principal Executive Officer
s/Robert L. McCabe
Robert L. McCabe
President
Principal Financial Officer
s/Alfred D. Houston
Alfred D. Houston
Vice President and Treasurer
Principal Accounting Officer
s/Howard W. McDowell
Howard W. McDowell
Controller
Directors (a majority)
Stephen A. Cardi
Frances H. Gammell s/John G. Cochrane
Joseph J. Kirby All by:
Robert L. McCabe John G. Cochrane
Richard P. Sergel Attorney-in-fact
William E. Trueheart
John A. Wilson, Jr.
Date (as to all signatures on this page)
March 29, 1995
<PAGE>
<TABLE>
NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
<CAPTION>
References (Page)
-----------------------
1994 Annual
Form Report to
10-K Shareholders*
---- ------------
<S> <C> <C>
Report of Independent Accountants........................... 43
Statements of Consolidated Income,
Year Ended December 31, 1994, 1993 and 1992............. 26
Statements of Consolidated Retained Earnings,
Year Ended December 31, 1994, 1993 and 1992............. 26
Consolidated Balance Sheets, December 31, 1994 and 1993... 27
Consolidated Statements of Cash Flows,
Year Ended December 31, 1994, 1993 and 1992............. 28
Consolidated Statements of Capitalization,
December 31, 1994 and 1993.............................. 29
Notes to Financial Statements............................... 30-42
For the Year Ended December 31, 1994, 1993 and 1992:
Consent of Independent Accountants........................ 100
* Incorporated by Reference
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statements of New England Electric System on Form S-3 of the Dividend
Reinvestment and Common Share Purchase Plan (File No. 33-12313) and on
Forms S-8 of the New England Electric System Companies Incentive Thrift
Plan (File No. 33-26066), the New England Electric System Companies
Incentive Thrift Plan II (File No. 33-35470) and the Yankee Atomic
Electric Company Thrift Plan (File No. 2-67531) of our report dated
February 27, 1995 on our audits of the consolidated financial statements
of New England Electric System and subsidiaries as of December 31, 1994
and 1993 and for each of the three years in the period ended December 31,
1994, which report is incorporated by reference in this Annual Report on
Form 10-K.
We also consent to the incorporation by reference in the registration
statements of New England Power Company on Forms S-3 (File Nos. 33-48257,
33-48897, and 33-49193) and The Narragansett Electric Company on Form S-3
(File No. 33-50015) of our reports dated February 27, 1995 on our audits
of the financial statements of New England Power Company and The
Narragansett Electric Company, respectively, as of December 31, 1994 and
1993 and for each of the three years in the period ended December 31,
1994, which reports are incorporated by reference in this Annual Report on
Form 10-K.
s/ Coopers & Lybrand L.L.P.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
March 29, 1995
<PAGE>
<TABLE>
NEW ENGLAND POWER COMPANY
INDEX TO FINANCIAL STATEMENTS
<CAPTION>
References (Page)
----------------------
1994 Annual
Form Report to
10-K Stockholders*
---- ------------
<S> <C> <C>
Report of Independent Accountants........................... 1
Statements of Income,
Year Ended December 31, 1994, 1993 and 1992............... 8
Statements of Retained Earnings,
Year Ended December 31, 1994, 1993 and 1992............... 8
Balance Sheets, December 31, 1994 and 1993.................. 9
Statements of Cash Flows,
Year Ended December 31, 1994, 1993 and 1992............... 10
Notes to Financial Statements............................... 11-23
For the Year Ended December 31, 1994, 1993 and 1992:
Consent of Independent Accountants....................... 100
* Incorporated by Reference
</TABLE>
<PAGE>
<TABLE>
MASSACHUSETTS ELECTRIC COMPANY
INDEX TO FINANCIAL STATEMENTS
<CAPTION>
References (Page)
----------------------
1994 Annual
Form Report to
10-K Stockholders*
---- ------------
<S> <C> <C>
Report of Independent Accountants........................... 1
Statements of Income,
Year Ended December 31, 1994, 1993 and 1992............... 8
Statements of Retained Earnings,
Year Ended December 31, 1994, 1993 and 1992............... 8
Balance Sheets, December 31, 1994 and 1993.................. 9
Statements of Cash Flows,
Year Ended December 31, 1994, 1993 and 1992............... 10
Notes to Financial Statements............................... 11-20
For the Year Ended December 31, 1994, 1993 and 1992:
Consent of Independent Accountants........................ 100
* Incorporated by Reference
</TABLE>
<PAGE>
<TABLE>
THE NARRAGANSETT ELECTRIC COMPANY
INDEX TO FINANCIAL STATEMENTS
<CAPTION>
References (Page)
----------------------
1994 Annual
Form Report to
10-K Stockholders*
---- ------------
<S> <C> <C>
Report of Independent Accountants........................... 1
Statements of Income,
Year Ended December 31, 1994, 1993 and 1992............... 8
Statements of Retained Earnings,
Year Ended December 31, 1994, 1993 and 1992............... 8
Balance Sheets, December 31, 1994 and 1993.................. 9
Statements of Cash Flows,
Year Ended December 31, 1994, 1993 and 1992............... 10
Notes to Financial Statements............................... 11-20
For the Year Ended December 31, 1994, 1993 and 1992:
Consent of Independent Accountants........................ 100
* Incorporated by Reference
</TABLE>
<PAGE>
NEES
EXHIBIT INDEX
---------------
Exhibit No. Description Page
----------- ----------- ----
(3) Agreement and Declaration of Filed Under
Trust dated January 2, 1926, Cover of
as amended through April 28, Form SE
1992
(4)(a) Massachusetts Electric Company Incorporated
First Mortgage Indenture and by Reference
Deed of Trust, dated as of
July 1, 1949, and twenty
supplements thereto
(4)(b) The Narragansett Electric Incorporated
Company First Mortgage Indenture by Reference
and Deed of Trust, dated as of
September 1, 1944, and twenty-one
supplements thereto
(4)(c) The Narragansett Electric Incorporated
Company Preference Provisions, by Reference
as amended, dated March 23, 1993
(4)(d) New England Power Company General Incorporated
and Refunding Mortgage Indenture by Reference
and Deed of Trust dated as of
January 1, 1977 and nineteen
supplements thereto
(10)(a) Boston Edison Company et al. and Incorporated
New England Power Company: by Reference
Amended REMVEC Agreement dated
August 12, 1977
(10)(b) The Connecticut Light and Power Incorporated
Company et al. and New England by Reference
Power Company: Sharing Agreement
for Joint Ownership, Construction
and Operation of Millstone Unit No.
3 dated as of September 1, 1973, and
Amendments thereto; Transmission
Support Agreement dated August 9,
1974; Instrument of Transfer to NEP
with respect to the 1979 Connecticut
Nuclear Unit, and Assumption of
Obligations, dated December 17, 1975
<PAGE>
NEES
EXHIBIT INDEX
-------------
(10)(c) Connecticut Yankee Atomic Power Incorporated
Company et al. and New England by Reference
Power Company: Stockholders
Agreement dated July 1, 1964;
Power Purchase Contract dated
July 1, 1964; Supplementary
Power Contract dated as of
April 1, 1987; Capital Funds
Agreement dated September 1,
1964; Transmission Agreement
dated October 1, 1964;
Agreement revising Transmission
Agreement dated July 1, 1979;
Guarantee Agreement dated as of
November 13, 1981; Guarantee
Agreement dated as of August 1,
1985
(10)(d) Maine Yankee Atomic Power Company Incorporated
et al. and New England Power by Reference
Company: Capital Funds Agreement
dated May 20, 1968 and Power
Purchase Contract dated May 20,
1968; Amendments dated as of
January 1, 1984, March 1, 1984,
October 1, 1984, and August 1,
1985; Stockholders Agreement
dated May 20, 1968; Additional
Power Contract dated as of
February 1, 1984; Guarantee
Agreement dated as of September 23,
1985
(10)(e)(i) New England Energy Incorporated Incorporated
Capital Funds Agreement with by Reference
NEES dated November 1, 1974 and
Amendments thereto
(10)(e)(ii) New England Energy Incorporated Incorporated
Loan Agreement with NEES dated by Reference
July 19, 1978 and effective
November 1, 1974, and Amendments
thereto
(10)(e)(iii) New England Energy Incorporated Incorporated
Fuel Purchase Contract with by Reference
New England Power Company dated
July 26, 1979, and Amendments
thereto
(10)(e)(iv) New England Energy Incorporated Incorporated
Partnership Agreement with by Reference
Samedan Oil Corporation as
Amended and Restated on
February 5, 1985 and Amendment
thereto
<PAGE>
NEES
EXHIBIT INDEX
-------------
(10)(e)(v) New England Energy Incorporated Incorporated
Credit Agreement dated as of by Reference
April 28, 1989 and Amendments
thereto
(10)(e)(vi) New England Energy Incorporated Incorporated
Capital Maintenance Agreement by Reference
dated November 15, 1985, and
Assignment and Security Agreement
dated November 15, 1985 and
Amendment thereto
(10)(f) New England Power Company and Incorporated
New England Electric Transmission by Reference
Corporation et al.: Phase I
Terminal Facility Support
Agreement dated as of December 1,
1981 and Amendments thereto;
Agreement with respect to Use
of the Quebec Interconnection
dated as of December 1, 1981
and Amendments thereto; Agreement
for Reinforcement and Improvement
of New England Power Company's
Transmission System dated as of
April 1, 1983; Lease dated as of
May 16, 1983; Upper Development -
Lower Development Transmission
Line Support Agreement dated as
of May 16, 1983
(10)(g) New England Electric Transmission Incorporated
Corporation and PruCapital by Reference
Management, Inc. et al: Note
Agreement dated as of
September 1, 1986; Mortgage,
Deed of Trust and Security
Agreement dated as of
September 1, 1986; Equity
Funding Agreement with New
England Electric System dated
as of December 1, 1985
(10)(h) Vermont Electric Transmission Incorporated
Company, Inc. et al. and New by Reference
England Power Company: Phase I
Vermont Transmission Line
Support Agreement dated as
of December 1, 1981 and
Amendments thereto
(10)(i) New England Power Pool Incorporated
Agreement and Amendments thereto by Reference
<PAGE>
NEES
EXHIBIT INDEX
-------------
(10)(j) Public Service Company of New Incorporated
Hampshire et al. and New England by Reference
Power Company: Agreement for
Joint Ownership, Construction
and Operation of New Hampshire
Nuclear Units dated as of
May 1, 1973 and Amendments
thereto; Transmission Support
Agreement dated as of May 1,
1973; Instrument of Transfer
to NEP with respect to the
New Hampshire Nuclear Units
and Assumptions of Obligations
dated December 17, 1975;
Agreement Among Participants
in New Hampshire Nuclear Units,
certain Massachusetts Municipal
Systems and Massachusetts
Municipal Wholesale Electric
Company dated May 28, 1976;
Seventh Amendment To and Restated
Agreement for Seabrook Project
Disbursing Agent and Amendments
thereto; Seabrook Project
Managing Agent Operating
Agreement dated as of June 29,
1992, and Amendment to Seabrook
Project Managing Agent Agreement
dated as of June 29, 1992
(10)(k) Vermont Yankee Nuclear Power Incorporated
Corporation et al. and New by Reference
England Power Company: Capital
Funds Agreement dated
February 1, 1968, Amendment
dated March 12, 1968, and Power
Purchase Contract dated
February 1, 1968 and Amendments
thereto; Additional Power
Contract dated as of February 1,
1984; Guarantee Agreement dated
as of November 5, 1981
(10)(l) Yankee Atomic Electric Company Incorporated
et al. and New England Power by Reference
Company: Amended and Restated
Power Contract dated April 1,
1985 and Amendments thereto
(10)(m) New England Electric Companies' Incorporated
Deferred Compensation Plan as by Reference
amended dated December 8, 1986
<PAGE>
NEES
EXHIBIT INDEX
-------------
(10)(n) New England Electric System Incorporated
Companies Retirement Supplement by Reference
Plan as amended dated April 1,
1991
(10)(o) New England Electric Companies' Incorporated
Executive Supplemental Retirement by Reference
Plan as amended dated April 1,
1991
(10)(p) New England Electric Companies' Incorporated
Incentive Compensation Plan as by Reference
amended dated January 1, 1992
(10)(q) New England Electric Companies' Incorporated
Senior Incentive Compensation by Reference
Plan as amended dated November 26,
1991
(10)(r) New England Electric Companies' Incorporated
Incentive Compensation Plan II by Reference
as amended dated September 3,
1992
(10)(s) New England Electric System Incorporated
Directors Deferred Compensation by Reference
Plan as amended dated
November 24, 1992
(10)(t) Forms of Life Insurance Program Incorporated
and Form of Life Insurance by Reference
(Collateral Assignment)
(10)(u) New England Power Company and Incorporated
New England Hydro-Transmission by Reference
Electric Company, Inc. et al:
Phase II Massachusetts
Transmission Facilities Support
Agreement dated as of June 1,
1985 and Amendments thereto
(10)(v) New England Power Company and Incorporated
New England Hydro-Transmission by Reference
Corporation et al: Phase II
New Hampshire Transmission
Facilities Support Agreement
dated as of June 1, 1985 and
Amendments thereto
(10)(w) New England Power Company et Incorporated
al: Phase II New England Power by Reference
AC Facilities Support Agreement
dated as of June 1, 1985 and
Amendments thereto
<PAGE>
NEES
EXHIBIT INDEX
-------------
(10)(x) New England Hydro-Transmission Incorporated
Electric Company, Inc. and New by Reference
England Electric System et al:
Equity Funding Agreement dated
as of June 1, 1985 and Amendments
thereto
(10)(y) New England Hydro-Transmission Incorporated
Corporation and New England by Reference
Electric System et al: Equity
Funding Agreement dated as of
June 1, 1985 and Amendments
thereto
(10)(aa) Ocean State Power, et al., and Incorporated
Narragansett Energy Resources by Reference
Company: Equity Contribution
Agreement dated as of
December 29, 1988; Amendment
dated as of September 29, 1989
Ocean State Power, et al., and Incorporated
New England Electric System: by Reference
Equity Contribution Support
Agreement dated as of
December 29, 1988; Amendment
dated as of September 29, 1989;
Ocean State Power II, et al., Incorporated
and Narragansett Energy Resources by Reference
Company: Equity Contribution
Agreement dated as of September 29,
1989
Ocean State Power II, et al., Incorporated
and New England Electric System: by Reference
Equity Contribution Support
Agreement dated as of
September 29, 1989
(10)(bb) New England Power Service Incorporated
Company and Joan T. Bok: by Reference
Service Credit Letter dated
October 21, 1982
(10)(cc) New England Electric System Incorporated
and John W. Rowe: Service by Reference
Credit Letter dated
December 5, 1988
(10)(dd) New England Power Service Incorporated
Company and the Company: by Reference
Form of Supplemental Pension
Service Credit Agreement
<PAGE>
NEES
EXHIBIT INDEX
-------------
(10)(ee) New England Electric System Filed Under
and Frederic E. Greenman: Cover of
Service Credit Letter dated Form SE
February 23, 1994
(10)(ff) New England Electric System Filed Under
and John W. Newsham: Pension Cover of
Service Credit Agreement dated Form SE
February 23, 1994
(13) 1994 Annual Report to Filed Under
Shareholders Cover of
Form SE
(21) Subsidiary list Incorporated
by Reference
(24) Power of Attorney Filed Under
Cover of
Form SE
(27) Financial Data Schedule Filed herewith
<PAGE>
NEP
EXHIBIT INDEX
-------------
Exhibit No. Description Page
----------- ----------- ----
(3)(a) Articles of Organization as Incorporated
amended through June 27, 1987 by Reference
(3)(b) By-laws of the Company as Incorporated
amended June 25, 1987 by Reference
(4) General and Refunding Mortgage Incorporated
Indenture and Deed of Trust by Reference
dated as of January 1, 1977
and nineteen supplements
thereto
(10)(a) Boston Edison Company et al. Incorporated
and the Company: Amended by Reference
REMVEC Agreement dated
August 12, 1977
(10)(b) The Connecticut Light and Power Incorporated
Company et al. and the Company: by Reference
Sharing Agreement for Joint
Ownership, Construction and
Operation of Millstone Unit No. 3
dated as of September 1, 1973,
and Amendments thereto;
Transmission Support Agreement
dated August 9, 1974; Instrument
of Transfer to the Company with
respect to the 1979 Connecticut
Nuclear Unit, and Assumption of
Obligations, dated December 17,
1975
(10)(c) Connecticut Yankee Atomic Power Incorporated
Company et al. and the Company: by Reference
Stockholders Agreement dated
July 1, 1964; Power Purchase
Contract dated July 1, 1964;
Supplementary Power Contract
dated as of April 1, 1987;
Capital Funds Agreement dated
September 1, 1964
Transmission Agreement dated Incorporated
October 1, 1964; Agreement by Reference
revising Transmission Agreement
dated July 1, 1979; Five Year
Capital Contribution Agreement
dated November 1, 1980;
Guarantee Agreement dated as
of November 13, 1981; Guarantee
Agreement dated as of August 1,
1985
<PAGE>
NEP
EXHIBIT INDEX
-------------
(10)(d) Maine Yankee Atomic Power Incorporated
Company et al. and the Company: by Reference
Capital Funds Agreement dated
May 20, 1968 and Power Purchase
Contract dated May 20, 1968;
and Amendments thereto;
Stockholders Agreement dated
May 20, 1968; Additional Power
Contract dated as of February 1,
1984; Guarantee Agreement dated
as of September 23, 1985
(10)(e) Mass. Electric and the Company: Incorporated
Primary Service for Resale dated by Reference
February 15, 1974; and Amendments
thereto
Memorandum of Understanding Filed Under
effective May 22, 1994 Cover of
Form SE
(10)(f) The Narragansett Electric Incorporated
Company and the Company: by Reference
Primary Service for Resale
dated February 15, 1974
and Amendments thereto;
Memorandum of Understanding
effective May 22, 1994
(10)(g) Time Charter between Incorporated
Intercoastal Bulk Carriers, by Reference
Inc., and New England Power
Company dated as of December 27,
1989
(10)(h) New England Electric Incorporated
Transmission Corporation et al. by Reference
and the Company: Phase I
Terminal Facility Support
Agreement dated as of
December 1, 1981; Amendments
dated as of June 1, 1982 and
November 1, 1982; Agreement with
respect to Use of the Quebec
Interconnection dated as of
December 1, 1981; Amendments
dated as of May 1, 1982 and
November 1, 1982; Amendment
dated as of January 1, 1986;
<PAGE>
NEP
EXHIBIT INDEX
-------------
(10)(h) Agreement for Reinforcement
(cont.) and Improvement of the Company's
Transmission System dated as
of April 1, 1983; Lease dated
as of May 16, 1983; Upper
Development-Lower Development
Transmission Line Support
Agreement dated as of May 16,
1983
(10)(i) Vermont Electric Transmission Incorporated
Company, Inc. et al. and the by Reference
Company: Phase I Vermont
Transmission Line Support
Agreement dated as of
December 1, 1981 and Amendments
thereto
(10)(j) New England Energy Incorporated Incorporated
and the Company: Fuel Purchase by Reference
Contract dated July 26, 1979,
and Amendments thereto
(10)(k) New England Power Pool Incorporated
Agreement and Amendments by Reference
thereto
(10)(l) New England Power Service Filed Under
Company and the Company: Cover of
Specimen of Service Contract Form SE
(10)(m) Public Service Company of New Incorporated
Hampshire et al. and the by Reference
Company: Agreement for Joint
Ownership, Construction and
Operation of New Hampshire
Nuclear Units dated as of
May 1, 1973 and Amendments
thereto; Seventh Amendment
as of November 1, 1990;
Transmission Support Agreement
dated as of May 1, 1973;
Instrument of Transfer to the
Company with respect to the New
Hampshire Nuclear Units and
Assumptions of Obligations
dated December 17, 1975 and
Agreement Among Participants
in New Hampshire Nuclear Units,
certain Massachusetts Municipal
Systems and Massachusetts
Municipal Wholesale Electric
Company dated May 28, 1976;
Seventh Amendment To and
Restated Agreement for Seabrook
<PAGE>
NEP
EXHIBIT INDEX
-------------
(10)(m) Project Disbursing Agent dated
(cont.) as of November 1, 1990;
Amendments dated as of
June 29, 1992
Settlement Agreement dated as Incorporated
of July 19, 1990 between by Reference
Northeast Utilities Service
Company and the Company
Seabrook Project Managing Incorporated
Agent Operating Agreement by Reference
dated as of June 29, 1992;
and Amendment thereto
(10)(n) Vermont Yankee Nuclear Power Incorporated
Corporation et al. and the by Reference
Company: Capital Funds
Agreement dated February 1,
1968, Amendment dated March 12,
1968 and Power Purchase Contract
dated February 1, 1968 and
Amendments thereto; Additional
Power Contract dated as of
February 1, 1984; Guarantee
Agreement dated as of November 5,
1981
(10)(o) Yankee Atomic Electric Company Incorporated
et al. and the Company: by Reference
Amended and Restated Power
Contract dated April 1, 1985
and Amendments thereto
(10)(p) New England Electric Companies' Incorporated
Deferred Compensation Plan as by Reference
amended dated December 8,
1986
(10)(q) New England Electric System Incorporated
Companies Retirement Supplement by Reference
Plan as amended dated April 1,
1991
(10)(r) New England Electric Companies' Incorporated
Executive Supplemental Retirement by Reference
Plan as amended dated April 1,
1991
(10)(s) New England Electric Companies' Incorporated
Incentive Compensation Plan as by Reference
amended dated January 1, 1992;
New England Electric Companies'
Senior Incentive Compensation
Plan as amended dated November 26,
1991
<PAGE>
NEP
EXHIBIT INDEX
-------------
(10)(t) Forms of Life Insurance Program Incorporated
and Form of Life Insurance by Reference
(Collateral Assignment)
(10)(u) New England Electric Companies' Incorporated
Incentive Compensation Plan II by Reference
as amended dated September 1,
1992
(10)(v) New England Hydro-Transmission Incorporated
Electric Company, Inc. et al. by Reference
and the Company: Phase II
Massachusetts Transmission
Facilities Support Agreement
dated as of June 1, 1985
and Amendments thereto
(10)(w) New England Hydro-Transmission Incorporated
Corporation et al. and the by Reference
Company: Phase II New Hampshire
Transmission Facilities Support
Agreement dated as of June 1,
1985 and Amendments thereto
(10)(x) Vermont Electric Power Company Incorporated
et al. and the Company: Phase by Reference
II New England Power AC
Facilities Support Agreement
dated as of June 1, 1985 and
Amendments thereto
(10)(y) TransCanada Pipelines Limited Incorporated
and the Company: Firm Service by Reference
Contract for Firm Transportation
Service for natural gas dated
as of January 6, 1992 and
Amendment dated as of March 2,
1992
Amendment dated as of October 29, Filed Under
1993 Cover of
Form SE
(10)(z) Renaissance Energy Ltd. and Filed Under
the Company: Temporary Trans- Cover of
portation Contract Assignment Form SE
(capacity swap) for Firm
Transportation Service for
natural gas dated as of October
27, 1993
Amendment dated as of October 25, Filed Under
1994 Cover of
Form SE
<PAGE>
NEP
EXHIBIT INDEX
-------------
(10)(aa) Algonquin Gas Transmission Incorporated
Company and the Company: X-38 by Reference
Service Agreement for Firm
Transportation of natural gas
dated July 3, 1992; Amendment
dated July 31, 1992
Amendment dated as of April 15, Filed Under
1994 Cover of
Form SE
(10)(bb) ANR Pipeline Company and the Incorporated
Company: Gas Transportation by Reference
Agreement dated July 18, 1990
(10)(cc) Columbia Gas Transmission Incorporated
Corporation and the Company: by Reference
Service Agreement for Service
under FTS Rate Schedule dated
June 13, 1991
(10)(dd) Iroquois Gas Transmission Incorporated
System, L.P. and the Company: by Reference
Gas Transportation Contract for
Firm Reserved Service dated as
of June 5, 1991
(10)(ee) Tennessee Gas Pipeline Company Incorporated
and the Company: Firm Natural by Reference
Gas Transportation Agreement
dated July 9, 1992
(12) Statement re computation of Filed herewith
ratios for incorporation by
reference into NEP registration
statements on Form S-3,
Commission File Nos. 33-48257,
33-48897, and 33-49193
(13) 1994 Annual Report to Filed Under
Stockholders Cover of
Form SE
(21) Subsidiary list Filed herewith
(24) Power of Attorney Filed Under
Cover of
Form SE
(27) Financial Data Schedule Filed herewith
<PAGE>
Mass. Electric
--------------
EXHIBIT INDEX
-------------
Exhibit No. Description Page
----------- ----------- ----
(3)(a) Articles of Organization of the Incorporated
Company as amended through by Reference
November 15, 1993
(3)(b) By-Laws of the Company as Incorporated
amended through September 15, by Reference
1993
(4) First Mortgage Indenture and Incorporated
Deed of Trust, dated as of by Reference
July 1, 1949, and twenty
supplements thereto
(10)(a) Boston Edison Company et al. Incorporated
and Company: Amended REMVEC by Reference
Agreement dated August 12,
1977
(10)(b) New England Power Company Incorporated
and the Company: Primary by Reference
Service for Resale dated
February 15, 1974; Amendment
of Service Agreement dated
July 22, 1983; Amendment of
Service Agreement effective
November 1, 1993; Memorandum
of Understanding effective
May 22, 1994
(10)(c) New England Power Pool Incorporated
Agreement and Amendments by Reference
thereto
(10)(d) New England Power Service Incorporated
Company and the Company: by Reference
Specimen of Service Contract
(10)(e) New England Telephone and Incorporated
Telegraph Company and the by Reference
Company: Specimen of Joint
Ownership Agreement for Wood
Poles
(10)(f) New England Electric Companies' Incorporated
Deferred Compensation Plan as by Reference
amended dated December 8, 1986
(10)(g) New England Electric System Incorporated
Companies Retirement Supplement by Reference
Plan as amended dated April 1,
1991
<PAGE>
Mass. Electric
--------------
EXHIBIT INDEX
-------------
(10)(h) New England Electric Companies' Incorporated
Executive Supplemental Retirement by Reference
Plan as amended dated April 1,
1991
(10)(i) New England Electric Companies' Incorporated
Incentive Compensation Plan as by Reference
amended dated January 1, 1992
(10)(j) New England Electric Companies' Incorporated
Form of Deferred Compensation by Reference
Agreement for Directors
(10)(k) New England Electric Companies' Incorporated
Senior Incentive Compensation by Reference
Plan as amended dated
November 26, 1991
(10)(l) Forms of Life Insurance Program Incorporated
and Form of Life Insurance by Reference
(Collateral Assignment)
(10)(m) New England Electric Companies' Incorporated
Incentive Compensation Plan II by Reference
as amended dated September 1,
1992
(10)(n) New England Power Service Incorporated
Company and the Company: by Reference
Form of Supplemental Pension
Service Credit Agreement
(13) 1994 Annual Report to Filed Under
Stockholders Cover of
Form SE
(24) Power of Attorney Filed Under
Cover of
Form SE
(27) Financial Data Schedule Filed herewith
<PAGE>
Narragansett
-------------
EXHIBIT INDEX
-------------
Exhibit No. Description Page
----------- ----------- ----
(3)(a) Articles of Incorporation as Incorporated
amended June 9, 1988 by Reference
(3)(b) By-Laws of the Company Incorporated
by Reference
(4)(a) First Mortgage Indenture and Incorporated
Deed of Trust, dated as of by Reference
September 1, 1944, and
twenty-one supplements thereto
(4)(b) The Narragansett Electric Incorporated
Company Preference Provisions, by Reference
as amended, dated March 23, 1993
(10)(a) Boston Edison Company et al. Incorporated
and the Company: Amended REMVEC by Reference
Agreement dated August 12, 1977
(10)(b) New England Power Company and Incorporated
the Company: Primary Service for by Reference
Resale dated February 15, 1974;
Amendment of Service Agreement
dated July 24, 1991; Amendment of
Service Agreement effective November
1, 1993; Memorandum of Understanding
effective May 22, 1994
(10)(c) New England Power Pool Agreement Incorporated
and Amendments thereto by Reference
(10)(d) New England Power Service Incorporated
Company and the Company: by Reference
Specimen of Service Contract
(10)(e) New England Telephone and Incorporated
Telegraph Company and the by Reference
Company: Specimen of Joint
Ownership Agreement for Wood
Poles
(10)(f) New England Electric Companies' Incorporated
Deferred Compensation Plan for by Reference
Officers, as amended December 8,
1986
(10)(g) New England Electric System Incorporated
Companies Retirement Supplement by Reference
Plan, as amended April 1, 1991
<PAGE>
Narragansett
-------------
EXHIBIT INDEX
-------------
(10)(h) New England Electric Companies' Incorporated
Executive Supplemental Retirement by Reference
Plan, as amended dated April 1,
1991
(10)(i) New England Companies' Incentive Incorporated
Compensation Plan, as amended by Reference
dated January 1, 1992
(10)(j) New England Electric Companies' Incorporated
Form of Deferred Compensation by Reference
Agreement for Directors
(10)(k) New England Electric Companies' Incorporated
Senior Incentive Compensation by Reference
Plan as amended dated November 26,
1991
(10)(l) Forms of Life Insurance Program Incorporated
and Form of Life Insurance by Reference
(Collateral Assignment)
(10)(m) New England Electric Companies' Incorporated
Incentive Compensation Plan II by Reference
as amended dated September 1,
1992
(10)(n) New England Power Service Incorporated
Company and the Company: by Reference
Form of Supplemental Pension
Service Credit Agreement
(12) Statement re computation of Filed herewith
ratios for incorporation by
reference into the Narragansett
registration statement on Form
S-3, Commission File No. 33-50015
(13) 1994 Annual Report to Filed Under
Stockholders Cover of
Form SE
(24) Power of Attorney Filed Under
Cover of
Form SE
(27) Financial Data Schedule Filed herewith
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
NEES
<ARTICLE> UT
<MULTIPLIER>1,000
<S> <C> <C>
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1993
<PERIOD-END> DEC-31-1994 DEC-31-1993
<PERIOD-TYPE> 12-MOS 12-MOS
<BOOK-VALUE> PER-BOOK PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,716,721 3,482,501
<OTHER-PROPERTY-AND-INVEST> 423,713 455,127
<TOTAL-CURRENT-ASSETS> 525,723 464,614
<TOTAL-DEFERRED-CHARGES> 418,684 <F1> 393,636 <F1>
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 5,084,841 4,795,878
<COMMON> 64,970 64,970
<CAPITAL-SURPLUS-PAID-IN> 736,823 736,823
<RETAINED-EARNINGS> 779,045 728,075
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,580,838 1,529,868
0 0
147,016 <F2> 147,528 <F2>
<LONG-TERM-DEBT-NET> 1,520,488 1,511,589
<SHORT-TERM-NOTES> 233,970 <F3>71,775
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 65,920 12,920
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,536,609 1,522,198
<TOT-CAPITALIZATION-AND-LIAB> 5,084,841 4,795,878
<GROSS-OPERATING-REVENUE> 2,243,029 2,233,978
<INCOME-TAX-EXPENSE> 128,257 121,124
<OTHER-OPERATING-EXPENSES> 1,818,276 1,809,911
<TOTAL-OPERATING-EXPENSES> 1,946,533 1,931,035
<OPERATING-INCOME-LOSS> 296,496 302,943
<OTHER-INCOME-NET> 16,071 13,657
<INCOME-BEFORE-INTEREST-EXPEN> 312,567 316,600
<TOTAL-INTEREST-EXPENSE> 97,005 107,770
<NET-INCOME> 199,426 190,223
8,697 <F2> 10,585 <F2>
<EARNINGS-AVAILABLE-FOR-COMM> 199,426 188,176
<COMMON-STOCK-DIVIDENDS> 148,456 144,233
<TOTAL-INTEREST-ON-BONDS> 93,500 100,777
<CASH-FLOW-OPERATIONS> 417,966 498,651
<EPS-PRIMARY> $3.07 $2.93
<EPS-DILUTED> $3.07 $2.93
<FN>
<F1> Total deferred charges includes other assets and accrued Yankee Atomic costs.
<F2> Preferred stock reflects preferred stock of subsidiaries. Preferred stock dividends reflect preferred stock dividends of
subsidiaries.
<F3> Short-term notes includes commercial paper obligations.
</FN>
<PAGE>
<TABLE>
NEW ENGLAND POWER COMPANY
Computation of Ratio of Earnings to Fixed Charges
(SEC Coverage)
(Unaudited)
<CAPTION>
Years Ended December 31,
------------------------------------------------------------
1994 1993* 1992* 1991* 1990*
---- ---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C> <C>
Net Income $149,373 $141,468 $134,151 $134,747 $222,219
----------
Less undistributed income of
nuclear power companies 6 544 320 (240) (133)
-------- -------- -------- -------- --------
149,367 140,924 133,831 134,987 222,352
Add income taxes and fixed charges
----------------------------------
Current federal income taxes 61,350 62,454 64,417 62,182 50,543
Deferred federal income taxes 20,501 17,745 4,741 11,134 38,367
Investment tax credits - net (3,577) (2,606) (1,328) (7,732) (26,026)
State income taxes 17,328 17,242 14,596 15,526 21,867
Interest on long-term debt 38,711 45,837 59,382 67,426 67,385
Interest on short-term debt
and other interest 1,956 5,427 2,071 2,490 6,900
Estimated interest component of
rentals 3,635 3,851 4,121 4,115 1,447
-------- -------- -------- -------- --------
Net earnings available
for fixed charges $289,271 $290,874 $281,831 $290,128 $382,835
======== ======== ======== ======== ========
Fixed charges:
Interest on long-term debt $ 38,711 $ 45,837 $ 59,382 $ 67,426 $ 67,385
Interest on short-term debt
and other interest 1,956 5,427 2,071 2,490 6,900
Estimated interest component
of rentals 3,635 3,851 4,121 4,115 1,447
-------- -------- -------- -------- --------
Total fixed charges $ 44,302 $ 55,115 $ 65,574 $ 74,031 $ 75,732
======== ======== ======== ======== ========
Ratio of earnings to fixed charges 6.53 5.28 4.30 3.92 5.06
----------------------------------
* The ratio of earnings to fixed charges for 1993 to 1990 have been restated to reflect the estimated
interest component of rentals.
</TABLE>
<PAGE>
Exhibit 21
Subsidiaries of New England Power Company
State of Incorporation or
Name of Company Organization
--------------- -------------------------
Connecticut Yankee Atomic Connecticut
Power Company
Maine Yankee Atomic Maine
Power Company
Vermont Yankee Nuclear Vermont
Power Corporation
Yankee Atomic Electric Company Massachusetts
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
NEP
<ARTICLE> UT
<MULTIPLIER>1,000
<S> <C> <C>
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1993
<PERIOD-END> DEC-31-1994 DEC-31-1993
<PERIOD-TYPE> 12-MOS 12-MOS
<BOOK-VALUE> PER-BOOK PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,876,211 1,771,156
<OTHER-PROPERTY-AND-INVEST> 69,329 66,269
<TOTAL-CURRENT-ASSETS> 374,654 343,274
<TOTAL-DEFERRED-CHARGES> 292,644 <F1> 260,588 <F1>
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 2,612,838 2,441,287
<COMMON> 128,998 128,998
<CAPITAL-SURPLUS-PAID-IN> 374,829 374,829
<RETAINED-EARNINGS> 372,763 346,153
<TOTAL-COMMON-STOCKHOLDERS-EQ> 876,590 849,980
0 0
60,516 61,028
<LONG-TERM-DEBT-NET> 695,466 667,448
<SHORT-TERM-NOTES> 145,575<F2> 50,525 <F2>
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 834,691 812,306
<TOT-CAPITALIZATION-AND-LIAB> 2,612,838 2,441,287
<GROSS-OPERATING-REVENUE> 1,540,757 1,549,014
<INCOME-TAX-EXPENSE> 96,596 93,997
<OTHER-OPERATING-EXPENSES> 1,273,640 1,272,543
<TOTAL-OPERATING-EXPENSES> 1,370,236 1,366,540
<OPERATING-INCOME-LOSS> 170,521 182,474
<OTHER-INCOME-NET> 13,665 8,332
<INCOME-BEFORE-INTEREST-EXPEN> 184,186 190,806
<TOTAL-INTEREST-EXPENSE> 34,813 49,338
<NET-INCOME> 149,373 141,468
3,440 4,883
<EARNINGS-AVAILABLE-FOR-COMM> 145,933 135,715
<COMMON-STOCK-DIVIDENDS> 119,323 111,261
<TOTAL-INTEREST-ON-BONDS> 38,711 45,837
<CASH-FLOW-OPERATIONS> 246,572 281,718
<EPS-PRIMARY>
<EPS-DILUTED>
<FN>
<F1> Total deferred charges includes other assets and accrued Yankee Atomic costs.
<F2> Short-term notes includes commercial paper obligations and short-term debt to affiliates.
</FN>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
MASS
<ARTICLE> UT
<MULTIPLIER>1,000
<S> <C> <C>
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1993
<PERIOD-END> DEC-31-1994 DEC-31-1993
<PERIOD-TYPE> 12-MOS 12-MOS
<BOOK-VALUE> PER-BOOK PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 995,995 945,285
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 240,191 229,643
<TOTAL-DEFERRED-CHARGES> 59,536 <F1> 57,376 <F1>
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 1,295,722 1,232,304
<COMMON> 59,953 59,953
<CAPITAL-SURPLUS-PAID-IN> 187,172 187,172
<RETAINED-EARNINGS> 136,911 135,276
<TOTAL-COMMON-STOCKHOLDERS-EQ> 384,036 382,401
0 0
50,000 50,000
<LONG-TERM-DEBT-NET> 265,631 264,719
<SHORT-TERM-NOTES> 81,820 <F2> 37,925 <F2>
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 35,000 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 479,235 497,259
<TOT-CAPITALIZATION-AND-LIAB> 1,295,722 1,232,304
<GROSS-OPERATING-REVENUE> 1,482,070 1,468,540
<INCOME-TAX-EXPENSE> 22,265 11,055
<OTHER-OPERATING-EXPENSES> 1,397,137 1,406,899
<TOTAL-OPERATING-EXPENSES> 1,419,402 1,417,954
<OPERATING-INCOME-LOSS> 62,668 50,586
<OTHER-INCOME-NET> (995) (64)
<INCOME-BEFORE-INTEREST-EXPEN> 61,673 50,522
<TOTAL-INTEREST-EXPENSE> 26,947 26,743
<NET-INCOME> 34,726 23,779
3,114 3,772
<EARNINGS-AVAILABLE-FOR-COMM> 31,612 19,191
<COMMON-STOCK-DIVIDENDS> 29,977 18,585
<TOTAL-INTEREST-ON-BONDS> 20,967 23,403
<CASH-FLOW-OPERATIONS> 44,252 69,651
<EPS-PRIMARY>
<EPS-DILUTED>
<FN>
<F1> Total deferred charges includes other assets.
<F2> Short-term notes includes commercial paper obligations and short-term debt to affiliates.
</FN>
<PAGE>
<TABLE>
THE NARRAGANSETT ELECTRIC COMPANY
Computation of Ratio of Earnings to Fixed Charges
(SEC Coverage)
(Unaudited)
<CAPTION>
Years Ended December 31,
------------------------------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C> <C>
Net Income $14,589 $14,274 $21,052 $16,820 $17,599
----------
Add income taxes and fixed charges
----------------------------------
Current federal income taxes 1,020 2,183 4,608 1,558 7,624
Deferred federal income taxes 3,930 2,199 4,560 5,528 351
Investment tax credits - net (508) (508) (507) (500) (504)
Interest on long-term debt 14,334 12,715 13,290 12,581 11,016
Interest on short-term debt and other 2,897 2,074 1,277 2,500 2,968
------- ------- ------- ------- -------
Net earnings available for fixed charges $36,262 $32,937 $44,280 $38,487 $39,054
------- ------- ------- ------- -------
Fixed charges:
Interest on long-term debt $14,334 $12,715 $13,290 $12,581 $11,016
Interest on short-term debt and other 2,897 2,074 1,277 2,500 2,968
------- ------- ------- ------- -------
Total fixed charges $17,231 $14,789 $14,567 $15,081 $13,984
======= ======= ======= ======= =======
Ratio of earnings to fixed charges 2.10 2.23 3.04 2.55 2.79
----------------------------------
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
NARR
<ARTICLE> UT
<MULTIPLIER>1,000
<S> <C> <C>
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1993
<PERIOD-END> DEC-31-1994 DEC-31-1993
<PERIOD-TYPE> 12-MOS 12-MOS
<BOOK-VALUE> PER-BOOK PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 491,915 421,577
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 97,735 80,621
<TOTAL-DEFERRED-CHARGES> 57,727 <F1> 53,709 <F1>
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 647,377 555,907
<COMMON> 56,624 56,624
<CAPITAL-SURPLUS-PAID-IN> 60,170 45,170
<RETAINED-EARNINGS> 91,556 81,659
<TOTAL-COMMON-STOCKHOLDERS-EQ> 208,350 183,453
0 0
36,500 36,500
<LONG-TERM-DEBT-NET> 188,862 155,972
<SHORT-TERM-NOTES> 29,800 <F2> 19,725 <F2>
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 183,865 160,257
<TOT-CAPITALIZATION-AND-LIAB> 647,377 555,907
<GROSS-OPERATING-REVENUE> 481,669 483,028
<INCOME-TAX-EXPENSE> 4,883 4,175
<OTHER-OPERATING-EXPENSES> 446,672 450,288
<TOTAL-OPERATING-EXPENSES> 451,555 454,463
<OPERATING-INCOME-LOSS> 30,114 28,565
<OTHER-INCOME-NET> 172 (91)
<INCOME-BEFORE-INTEREST-EXPEN> 30,286 28,474
<TOTAL-INTEREST-EXPENSE> 15,697 14,200
<NET-INCOME> 14,589 14,274
2,143 1,931
<EARNINGS-AVAILABLE-FOR-COMM> 12,446 11,982
<COMMON-STOCK-DIVIDENDS> 2,549 4,530
<TOTAL-INTEREST-ON-BONDS> 14,334 12,715
<CASH-FLOW-OPERATIONS> 40,188 32,714
<EPS-PRIMARY>
<EPS-DILUTED>
<FN>
<F1> Total deferred charges includes other assets.
<F2> Short-term notes includes commercial paper borrowings. Short-term notes at December 31, 1993 also includes short-term
debt to affiliates.
</FN>
