<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-5464
(LOGO) MASSACHUSETTS ELECTRIC COMPANY
(Exact name of registrant as specified in charter)
MASSACHUSETTS 04-1988940
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
25 Research Drive, Westborough, Massachusetts 01582
(Address of principal executive offices)
Registrant's telephone number, including area code
(508-389-2000)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) No ( )
Common stock, par value $25 per share, authorized and
outstanding: 2,398,111 shares at March 31, 1996.
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
- ----------------------------
<TABLE>
MASSACHUSETTS ELECTRIC COMPANY
Statements of Income
Periods Ended March 31
(Unaudited)
<CAPTION>
Three Months
Twelve Months
------------
-------------
1996 1995
1996 1995
---- ----
- ---- ----
(In
Thousands)
<S> <C> <C> <C>
<C>
Operating revenue $390,819
$373,092$1,523,403 $1,473,450
--------
- ------------------ ----------
Operating expenses:
Purchased electric energy, principally from
New England Power Company, an affiliate 287,385 284,538
1,116,520 1,073,778
Other operation 47,198 44,911
208,947 214,142
Maintenance 8,056 7,432
30,149 35,084
Depreciation 12,037 11,465
45,401 43,415
Taxes, other than income taxes 8,745 8,354
30,413 28,709
Income taxes 6,711 3,043
22,965 19,429
--------
- ------------------ ----------
Total operating expenses 370,132 359,743
1,454,395 1,414,557
--------
- ------------------ ----------
Operating income 20,687 13,349
69,008 58,893
Other income (expense) - net, including
related taxes (2,037) 326
(2,904) 786
--------
- ------------------ ----------
Operating and other income 18,650 13,675
66,104 59,679
--------
- ------------------ ----------
Interest:
Interest on long-term debt 6,725 6,105
26,521 22,069
Other interest 1,387 2,641
5,530 7,840
Allowance for borrowed funds used during
construction - credit (196) (197)
(656) (510)
--------
- ------------------ ----------
Total interest 7,916 8,549
31,395 29,399
--------
- ------------------ ----------
Net income $ 10,734 $ 5,126$
34,709 $ 30,280
========
================== ==========
Statements of Retained Earnings
Retained earnings at beginning of period $150,308 $136,911$
135,264 $ 137,475
Net income 10,734 5,126
34,709 30,280
Dividends declared on cumulative
preferred stock (779) (778)
(3,115) (3,114)
Dividends declared on common stock (9,592) (5,995)
(16,187) (29,377)
--------
- ------------------ ----------
Retained earnings at end of period $150,671 $135,264$
150,671 $ 135,264
========
================== ==========
The accompanying notes are an integral part of these
financial statements.
Per share data is not relevant because the Company's common
stock is wholly-
owned by New England Electric System.
</TABLE>
<PAGE>
<TABLE>
MASSACHUSETTS ELECTRIC COMPANY
Balance Sheets
(Unaudited)
<CAPTION>
March 31,
December 31,
ASSETS 1996
1995
------ ----
----
(In
Thousands)
<S> <C>
<C>
Utility plant, at original cost $1,431,625
$1,420,069
Less accumulated provisions for depreciation 407,116
399,711
----------
----------
1,024,509
1,020,358
Construction work in progress 27,878
21,118
----------
----------
Net utility plant 1,052,387
1,041,476
----------
----------
Current assets:
Cash 1,209
1,840
Accounts receivable:
From sales of electric energy 171,245
160,795
Other (including $4,540,000 and $1,776,000
from affiliates) 6,397
3,527
Less reserves for doubtful accounts 13,552
12,544
----------
----------
164,090
151,778
Unbilled revenues 39,900
49,800
Materials and supplies, at average cost 11,341
10,602
Prepaid and other current assets 23,434
22,514
----------
----------
Total current assets 239,974
236,534
----------
----------
Deferred charges and other assets 63,160
65,090
----------
----------
$1,355,521
$1,343,100
==========
==========
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock, par value $25 per share, authorized
and outstanding 2,398,111 shares $ 59,953
$ 59,953
Premiums on capital stocks 45,862
45,862
Other paid-in capital 155,310
155,310
Retained earnings 150,671
150,308
----------
----------
Total common equity 411,796
411,433
Cumulative preferred stock 50,000
50,000
Long-term debt 353,312
353,267
----------
----------
Total capitalization 815,108
814,700
----------
----------
Current liabilities:
Short-term debt (including $11,250,000 and $1,000,000
to affiliates) 46,475
55,450
Accounts payable (including $162,150,000 and $165,515,000
to affiliates) 171,477
181,943
Accrued liabilities:
Taxes 16,832
7,371
Interest 6,861
9,502
Other accrued expenses 39,979
17,136
Customer deposits 4,496
4,633
Dividends payable 10,371
1,977
----------
----------
Total current liabilities 296,491
278,012
----------
----------
Deferred federal and state income taxes 177,570
184,575
Unamortized investment tax credits 17,404
17,684
Other reserves and deferred credits 48,948
48,129
----------
----------
$1,355,521
$1,343,100
==========
==========
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE>
<TABLE>
MASSACHUSETTS ELECTRIC COMPANY
Statements of Cash Flows
Quarters Ended March 31
(Unaudited)
<CAPTION>
1996
1995
----
----
(In
Thousands)
<S>
<C> <C>
Operating activities:
Net income $ 10,734
$ 5,126
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 12,037
11,465
Deferred income taxes and investment tax credits, net
(7,279) (2,346)
Allowance for funds used during construction
(196) (197)
Decrease (increase) in accounts receivable,
net and unbilled revenues
(2,412) 11,681
Decrease (increase) in materials and supplies
(739) (1,045)
Decrease (increase) in prepaid and other current assets
(920) 1,048
Increase (decrease) in accounts payable
(10,466) (20,091)
Increase (decrease) in other current liabilities 29,526
5,282
Other, net 2,993
(1,027)
--------
--------
Net cash provided by operating activities $ 33,278
$ 9,896
--------
--------
Investing activities:
Plant expenditures, excluding allowance for
funds used during construction
$(22,779) $(20,605)
Other investing activities
(178) (415)
--------
--------
Net cash used in investing activities
(22,957) $(21,020)
--------
--------
Financing activities:
Dividends paid on common stock $
(1,198) $(13,190)
Dividends paid on preferred stock
(779) (778)
Long-term debt - issues
48,000
Long-term debt - retirements
(10,000)
Changes in short-term debt
(8,975) (13,095)
--------
--------
Net cash provided by (used in)
financing activities
$(10,952) $ 10,937
--------
--------
Net decrease in cash and cash equivalents $
(631) $ (187)
Cash and cash equivalents at beginning of period 1,840
1,225
--------
--------
Cash and cash equivalents at end of period $ 1,209
$ 1,038
========
========
Supplementary information:
Interest paid less amounts capitalized $ 10,290
$ 9,843
--------
--------
Federal and state income taxes paid (refunded) $ 4,780
$ (9,000)
--------
--------
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE>
Note A - Hazardous Waste
- ------------------------
The Federal Comprehensive Environmental Response,
Compensation and Liability Act, more commonly known as the
"Superfund" law, imposes strict, joint and several liability,
regardless of fault, for remediation of property contaminated
with hazardous substances. A number of states, including
Massachusetts, have enacted similar laws.
The electric utility industry typically utilizes and/or
generates in its operations a range of potentially hazardous
products and by-products. New England Electric System
subsidiaries currently have an environmental audit program in
place intended to enhance compliance with existing federal,
state, and local requirements regarding the handling of
potentially hazardous products and by-products.
The Company has been named as a potentially responsible party
(PRP) by either the U.S. Environmental Protection Agency or the
Massachusetts Department of Environmental Protection for 19 sites
at which hazardous waste is alleged to have been disposed.
Private parties have also contacted or initiated legal
proceedings against the Company regarding hazardous waste
cleanup. The most prevalent types of hazardous waste sites with
which the Company has been associated are manufactured gas
locations. The Company is aware of approximately 35 such
locations in Massachusetts (including eight of the 19 locations
for which the Company is a PRP). The Company is currently aware
of other sites, and may in the future become aware of additional
sites, that it may be held responsible for remediating.
In 1993, the Massachusetts Department of Public Utilities
approved a rate agreement filed by the Company that allows for
remediation costs of former manufactured gas sites and certain
other hazardous waste sites located in Massachusetts to be met
from a non-rate-recoverable, interest-bearing fund of $30 million
established on the Company's books. Rate-recoverable
contributions of $3 million, adjusted for inflation, are added to
the fund annually in accordance with the agreement. Any
shortfalls in the fund would be paid by the Company and be
recovered through rates over seven years.
Predicting the potential costs to investigate and remediate
hazardous waste sites continues to be difficult. There are also
significant uncertainties as to the portion, if any, of the
investigation and remediation costs of any particular hazardous
waste site that may ultimately be borne by the Company. Where
appropriate, the Company intends to seek recovery from its
insurers and from other PRPs, but it is uncertain whether, and to
what extent, such efforts will be successful. At March 31, 1996,
<PAGE>
Note A - Hazardous Waste - Continued
- ------------------------------------
the Company had total reserves for environmental response costs
of $39 million and a related regulatory asset of $15 million.
The Company believes that hazardous waste liabilities for all
sites of which it is aware, and which are not covered by a rate
agreement, are not material to its financial position.
Note B - New Accounting Standard
- --------------------------------
In March 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of (FAS 121). This standard
clarifies when and how to recognize an impairment of long-lived
assets. If competitive or regulatory change should cause a
substantial revenue loss, a write-down of plant assets could be
required pursuant to FAS 121. In addition, FAS 121 requires that
all regulatory assets, which must have a high probability of
recovery to be initially established, must continue to meet that
high probability standard to avoid being written off. However, if
written off, a regulatory asset can be restored if it again has a
high probability of recovery. This standard did not have a
material impact on the financial condition or results of
operations upon adoption. However, the impact in future periods
may change as competitive factors and restructuring influence the
electric utility industry.
Note C
- ------
In the opinion of the Company, these statements reflect all
adjustments (which include normal recurring adjustments)
necessary for a fair statement of the results of its operations
for the periods presented and should be considered in conjunction
with the notes to the financial statements in the Company's 1995
Annual Report.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
---------------------------------------------------------
Condition and Results of Operations
-----------------------------------
This section contains management's assessment of
Massachusetts Electric Company's financial condition and
the
principal factors having an impact on the results of
operations.
This discussion should be read in conjunction with the
Company's
financial statements and footnotes and the 1995 Annual
Report on
Form 10-K.
Earnings
--------
Net income for the first quarter of 1996 increased $6
million
compared with the corresponding period last year. The
increase in
revenues is primarily due to sales growth and rate
increases.
Kilowatt-hour (kWh) sales to ultimate customers increased
5.6
percent in the first quarter of 1996 due to a return to
more
normal weather conditions as compared with the unusually
mild
weather experienced in the first quarter of 1995.
Partially
offsetting these increases in revenues was an increase in
operation and maintenance expenses.
Competitive Conditions
----------------------
The electric utility business is being subjected to
rapidly
increasing competitive pressures, stemming from a
combination of
trends, including the presence of surplus generating
capacity, a
<PAGE>
disparity in electric rates among regions of the country,
improvements in generation efficiency, increasing demand
for
customer choice, and new regulations and legislation
intended to
foster competition. See the Company's Annual Report on
Form 10-K
for the year ended December 31, 1995.
In states across the country, including Massachusetts,
there
have been an increasing number of proposals to allow
retail
customers to choose their electricity supplier, with
incumbent
utilities required to deliver that electricity over their
transmission and distribution systems (also known as
"retail
wheeling").
Choice: New England
In October 1995, the NEES companies announced a plan,
Choice:
New England, to allow all customers of electric utilities
in
Massachusetts, Rhode Island, and New Hampshire to choose
their
power supplier beginning in 1998. Under the plan, the
pricing of
generation would be deregulated; however, transmission and
distribution rates would remain regulated.
Under Choice: New England, the Company would no longer
sell
electricity to its customers. Instead, customers would
purchase
electricity from a supplier of their choice, with the
Company
remaining responsible for providing distribution services
to
customers under regulated rates. Transmission services
would be
provided by a new affiliate of the Company, which is being
formed
<PAGE>
by New England Electric System (NEES) to provide comparable
service across the NEES companies' transmission system.
Under Choice: New England, the Company's wholesale
contract
with New England Power Company (NEP) would be terminated.
In
return, the plan proposes that the cost of NEP's past
generation
commitments be recovered from the Company and its retail
affiliates through a contract termination charge. The
Company
would, in turn, seek to recover the payments to NEP
through a
wires access or transition charge to retail customers.
Those
commitments primarily consist of (i) generating plant
commitments, (ii) regulatory assets, (iii) purchased power
contracts, and (iv) the operating cost of nuclear plants
which
cannot be mitigated by shutting down the plants (otherwise
referred to as "nuclear costs independent of operation").
The
portion of these commitments incurred by NEP to serve the
Company's customers is currently estimated at
approximately $3
billion on a present value basis. Sunk costs associated
with
utility generating plants, such as past capital
investments, and
regulatory assets would be recovered over ten years.
Purchased
power contract costs and nuclear costs independent of
operation
would be recovered as incurred over the life of those
obligations, a period expected to extend beyond ten years.
Under
Choice: New England, the access charge would be set at
three
cents per kWh for the first three years. Thereafter, the
access
charge would vary, but is expected to decline. The
provisions of
Choice: New England, including the proposed access charge,
are
<PAGE>
subject to state approval and Federal Energy Regulatory
Commission (FERC) approval.
Choice: New England was formally filed by the Company
with
the Massachusetts Department of Public Utilities (MDPU) in
February 1996. Three other utilities and the
Massachusetts
Division of Energy Resources (DOER) also filed plans with
the
MDPU in February 1996. The DOER's plan also calls for
direct
access for all customers beginning in 1998, with a pilot
program
beginning in 1997.
On May 1, 1996, the MDPU issued a set of proposed rules
and
regulations governing the implementation of retail choice.
The
proposed rules would allow all customers of Massachusetts
investor-owned utilities to choose their electric supplier
beginning in 1998 and would establish a price cap system
for
regulating the rates of distribution service that would
continue
to be provided by local utilities. The MDPU proposed
rules
affirm the principle of stranded cost recovery for
utilities over
ten years, but create uncertainties concerning the extent
of
actual stranded cost recovery. Hearings on the proposed
rules
are scheduled for June and July. The MDPU has stated that
it
will issue final regulations in September 1996 and issue
orders
on the individual utility plans in 1997.
<PAGE>
Other regulatory initiatives
In April 1996, the FERC issued Order No. 888 addressing
open
access transmission and indicated that those utilities
that own
transmission facilities will be required to file open
access
tariffs to make available transmission service to
affiliates and
nonaffiliates at fair non-discriminatory rates. Order No.
888
also stated that public utilities will be allowed to seek
recovery of legitimate and verifiable stranded costs from
departing customers as a result of wholesale competition.
The
FERC indicated that it will provide for the recovery of
retail
stranded costs only if state regulators lack the legal
authority
to address those costs at the time of retail wheeling is
required. The FERC also stated that it would consider
proposals
for stranded cost recovery under wholesale requirements
contracts, such as the contracts between NEP and its
retail
affiliates.
Risk factors
The major risk factors affecting the Company relate to
the
possibility of adverse regulatory decisions or legislation
which
limit the level of revenues the Company is allowed to
charge for
its services. The Company's all-requirements purchased
power
contract with NEP requires either party to give seven
years
notice prior to terminating the contract. Termination of
the
contract would create stranded costs at NEP that NEP would
seek
<PAGE>
to recover from the Company pursuant to the contract. In that
event, the Company would seek recovery of such stranded
costs
from its customers. However, there is no assurance that
the
final restructuring plans ordered by state regulatory
bodies or
state legislatures will include provisions that allow the
Company
to fully recover any stranded costs passed on to the
Company by
NEP. In such an event, the Company could be faced with a
significant amount of costs being billed to it by NEP that
the
Company could not fully recover from retail customers, for
which
the Company would seek a remedy in the courts. In
addition,
there is no assurance that any performance incentive
system,
which regulators might ultimately adopt with respect to
the
Company's distribution activities, would allow the Company
to
fully recover prudently incurred costs and earn a
reasonable
return on investment.
Historically, electric utility rates have been 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. Financial Accounting
Standards
No. 71, Accounting for the Effects of Certain Types of
Regulation
(FAS 71), requires regulated entities, in appropriate
circumstances, to establish regulatory assets and
liabilities,
and thereby defer the income statement impact of certain
costs
that are expected to be recovered in future rates. The
effects
of regulatory, legislative, or utility initiatives could,
in the
near future, cause all or a portion of the Company's
operations
<PAGE>
to cease meeting the criteria of FAS 71. In that event, the
application of FAS 71 to such operations would be
discontinued
and a non-cash write-off of previously established
regulatory
assets and liabilities related to such operations would be
required. At December 31, 1995, the Company had pre-tax
regulatory assets (net of regulatory liabilities) of
approximately $50 million.
Operating Revenue
-----------------
The following table summarizes the changes in operating
revenue:
Increase (Decrease) in Operating Revenue
First Quarter
-------------
1996 vs 1995
-------------
(In Millions)
Sales to ultimate customers $ 11
Rate changes 8
Purchased Power Cost Adjustment (PPCA)
mechanism (2)
Fuel recovery 2
Demand-side Management (DSM) (2)
Other 1
---
$18
===
For a discussion of sales to ultimate customers, see the
Earnings section.
<PAGE>
The increase in revenues due to rate changes is the result
of
a $31 million base rate increase which the Company began
billing
in the fourth quarter of 1995.
The Company's rates contain a fuel clause and a PPCA
provision. These mechanisms are designed to allow the
Company to
pass on to its customers changes in purchased energy costs
resulting from rate increases or decreases by NEP, the
Company's
affiliated wholesale power supplier. The PPCA mechanism
is also
designed to pass on to customers the effects of NEP's
seasonal
rates. Although the Company experienced an increase in
purchased
power costs in the first quarter of 1996, NEP's seasonal
rates
reduced the impact of this increase. The passback to
customers
of this benefit is reflected as a reduction in revenues
under the
PPCA mechanism.
<PAGE>
Operating Expenses
------------------
The following table summarizes the changes in operating
expenses which are discussed below:
<TABLE>
<CAPTION>
Increase (Decrease) in Operating Expenses
First Quarter
- -------------
1996 vs 1995
- -------------
(In Millions)
<S> <C>
Purchased electric energy:
Fuel costs
$ 2
Other
1
Other operation and
maintenance:
DSM
(2)
Other
5
Taxes 4
---
$10
===
</TABLE>
The increase in other operation and maintenance
expense in
the first quarter reflects increased distribution
system-related
expenses and increased customer service expenses.
Post-retirement benefit costs also increased due to the
inclusion
of additional amounts in rates that were previously
deferred.
The change in taxes in the first three months of the
year is
primarily due to increased income.
<PAGE>
Utility Plant Expenditures and Financings
-----------------------------------------
Cash expenditures for utility plant totaled $23
million in
the first three months of 1996. The funds necessary for
utility
plant expenditures during the period were provided by net
cash
from operating activities, after the payment of dividends.
The
Company did not issue any long-term debt during the first
three
months of 1996.
At March 31, 1996, the Company had $46 million of
short-term
debt outstanding including $35 million of commercial paper
borrowings. The Company currently has lines of credit
with banks
totaling $90 million. These lines of credit are available
to
provide liquidity support for commercial paper borrowings
and
other corporate purposes. There were no borrowings under
these
lines of credit at March 31, 1996.
For the twelve-month period ending March 31, 1996, the
ratio
of earnings to fixed charges was 2.77.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
--------------------------
Information concerning the
restructuring dockets before the
Massachusetts Department of Public Utilities, discussed in
Part I
of this report in Management's Discussion and Analysis of
Financial Condition and Results of Operations, is
incorporated
herein by reference and made a part hereof.
Item 4. Submission of Matters to a Vote of
Security-Holders
- ------------------------------------------------------------
On March 20, 1996, the Annual
Meeting of Stockholders was
held. The following actions were taken by the unanimous
vote of
the 2,398,111 shares having general voting rights
represented at
the meeting:
The number of directors was
fixed at eleven.
The following were elected as
directors of the Company:
Urville J. Beaumont
Joan T. Bok
Sally L. Collins
John H. Dickson
Kalyan K. Ghosh
Charles B. Housen
Patricia A. McGovern
John F. Reilly
John W. Rowe
Richard P. Sergel
Roslyn M. Watson
Michael E. Jesanis was
elected Treasurer and Robert King
Wulff was elected Clerk.
Coopers & Lybrand L.L.P. was
selected as auditor for 1996.
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
The Company is filing the
following revised exhibit for
incorporation by reference into its registration statement
on
Form S-3, Commission File No. 33-59145.
12Statement re computation of
ratios
The Company is filing
Financial Data Schedules.
The Company filed a report on
Form 8-K dated February 16,
1996, containing Item 5, Other Events.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act
of 1934, the registrant has duly caused this report on
Form 10-Q
for the quarter ended March 31, 1996 to be signed on its
behalf
by the undersigned thereunto duly authorized.
MASSACHUSETTS ELECTRIC COMPANY
s/ Michael E. Jesanis
Michael E. Jesanis, Treasurer,
Authorized Officer, and
Principal Financial Officer
Date: May 13, 1996
Exhibit Index
<PAGE>
Exhibit Index
-------------
Exhibit Description Page
------- ----------- ----
12 Statement re computation of
Filed herewith
ratios
27 Financial Data Schedule
Filed herewith
Exhibit 12
<PAGE>
<TABLE>
MASSACHUSETTS ELECTRIC
COMPANY
Computation of Ratio of Earnings to
Fixed Charges
(SEC Coverage)
(Unaudited)
<CAPTION>
12 Months
Ended
March 31, 1996
Years Ended December 31,
Actual
- -------------------------------------------------------------
(Unaudited) 1995 1994
1993 1992 1991
-------------- ---- ----
---- ---- ----
(In Thousands)
<S> <C> <C> <C>
<C> <C> <C>
Net Income $34,709 $29,101
$34,726 $23,779 $34,905 $25,243
- ----------
Add income taxes and fixed charges
- ----------------------------------
Current federal income taxes 16,586 9,437
(6,762) 5,606 3,977 8,568
Deferred federal income taxes 1,998 6,156
24,932 3,430 13,451 3,889
Investment tax credits - net (1,128) (1,132)
(1,228) (1,228) (1,228) (1,194)
Massachusetts franchise tax 4,595 3,935
4,681 3,348 3,858 2,920
Interest on long-term debt 26,521 25,901
20,967 23,403 21,910 20,157
Interest on short-term debt and other5,530 6,784
6,366 3,638 3,657 3,643
------- -------
- ------- ------- ------- -------
Net earnings available for fixed charges $88,811
$80,182 $83,682 $61,976 $80,530 $63,226
------- -------
- ------- ------- ------- -------
Fixed charges:
Interest on long-term debt $26,521 $25,901
$20,967 $23,403 $21,910 $20,157
Interest on short-term debt and other5,530 6,784
6,366 3,638 3,657 3,643
------- -------
- ------- ------- ------- -------
Total fixed charges $32,051 $32,685
$27,333 $27,041 $25,567 $23,800
======= =======
======= ======= ======= =======
Ratio of earnings to fixed charges 2.77 2.45
3.06 2.29 3.15 2.66
- ----------------------------------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED
FROM THE BALANCE SHEET AND RELATED STATEMENTS OF
INCOME,
RETAINED EARNINGS AND CASH FLOWS OF MASSACHUSETTS
ELECTRIC
COMPANY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH
FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<S>
<C> <C>
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-END> MAR-31-1996 MAR-31-1995
<PERIOD-TYPE> 3-MOS 3-MOS
<BOOK-VALUE> PER-BOOK PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,052,387 0
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 239,974 0
<TOTAL-DEFERRED-CHARGES> 63,160 <F1>
0
<OTHER-ASSETS> 0
0
<TOTAL-ASSETS> 1,355,521
0
<COMMON> 59,953
0
<CAPITAL-SURPLUS-PAID-IN> 201,172
0
<RETAINED-EARNINGS> 150,671
0
<TOTAL-COMMON-STOCKHOLDERS-EQ> 411,796
0
0
0
50,000
0
<LONG-TERM-DEBT-NET> 353,312
0
<SHORT-TERM-NOTES> 46,475 <F2>
0
<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> 493,938
0
<TOT-CAPITALIZATION-AND-LIAB> 1,355,521
0
<GROSS-OPERATING-REVENUE> 390,819
373,092
<INCOME-TAX-EXPENSE> 6,711
3,043
<OTHER-OPERATING-EXPENSES> 363,421
356,700
<TOTAL-OPERATING-EXPENSES> 370,132
359,743
<OPERATING-INCOME-LOSS> 20,687
13,349
<OTHER-INCOME-NET> (2,037)
326
<INCOME-BEFORE-INTEREST-EXPEN> 18,650
13,675
<TOTAL-INTEREST-EXPENSE> 7,916
8,549
<NET-INCOME> 10,734
5,126
779
778
<EARNINGS-AVAILABLE-FOR-COMM> 9,955
4,348
<COMMON-STOCK-DIVIDENDS> 9,592
5,995
<TOTAL-INTEREST-ON-BONDS> 6,725
6,105
<CASH-FLOW-OPERATIONS> 33,278
9,896
<EPS-PRIMARY> 0 <F3>
0 <F3>
<EPS-DILUTED> 0 <F3>
0 <F3>
<FN>
<F1> Total deferred charges includes other assets.
<F2> Short-term notes includes commercial paper obligations and
notes payable
to associated companies.
<F3> Per share data is not relevant because the Company's common
stock is
wholly-owned by New England Electric System.
</FN>
