<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 1-7471
(LOGO) THE NARRAGANSETT ELECTRIC COMPANY
(Exact name of registrant as specified in charter)
Rhode Island 05-0187805
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
280 Melrose Street, Providence, R.I. 02901
(Address of principal executive offices)
Registrant's telephone number, including area code
(401-784-7000)
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 $50 per share, authorized and
outstanding: 1,132,487 shares at March 31, 1996.
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
- ----------------------------
<TABLE>
THE NARRAGANSETT 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 $127,285 $125,020 $501,378 $481,228
-------- -------- -------- --------
Operating expenses:
Fuel for generation and purchased electric
energy (principally from New England
Power Company, an affiliate) 73,689 72,802 295,539 295,376
Other operation 17,103 16,269 72,648 73,275
Maintenance 3,987 2,669 12,492 11,551
Depreciation 7,137 7,507 31,163 27,645
Taxes, other than federal income taxes 10,081 9,667 37,041 35,576
Federal income taxes 3,002 3,461 10,429 5,453
-------- -------- -------- --------
Total operating expenses 114,999 112,375 459,312 448,876
-------- -------- -------- --------
Operating income 12,286 12,645 42,066 32,352
Other income:
Allowance for equity funds used
during construction 209 (103) 958
Other income (expense) - net, including
related taxes (1,109) (321) (980) (390)
-------- -------- -------- --------
Operating and other income 11,177 12,533 40,983 32,920
-------- -------- -------- --------
Interest:
Interest on long-term debt 4,292 3,982 16,937 14,991
Other interest 684 1,101 3,246 3,443
Allowance for borrowed funds used during
construction - credit (89) (316) (1,634) (1,554)
-------- -------- -------- --------
Total interest 4,887 4,767 18,549 16,880
-------- -------- -------- --------
Net income $ 6,290 $ 7,766 $ 22,434 $ 16,040
======== ======== ======== ========
Statements of Retained Earnings
Retained earnings at beginning of period $108,227 $ 91,556 $ 98,220 $ 86,871
Net income 6,290 7,766 22,434 16,040
Dividends declared on cumulative
preferred stock (536) (536) (2,143) (2,143)
Dividends declared on common stock (2,265) (566) (6,795) (2,548)
-------- -------- -------- --------
Retained earnings at end of period $111,716 $ 98,220 $111,716 $ 98,220
======== ======== ======== ========
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> THE NARRAGANSETT ELECTRIC COMPANY
Balance Sheets
(Unaudited)
<CAPTION>
March 31, December 31,
ASSETS 1996 1995
------ ---- ----
(In Thousands)
<S> <C> <C>
Utility plant, at original cost $706,764 $699,906
Less accumulated provisions for depreciation 175,748 173,391
-------- --------
531,016 526,515
Construction work in progress 12,530 8,733
-------- --------
Net utility plant 543,546 535,248
-------- --------
Current assets:
Cash 803 1,999
Accounts receivable:
From sales of electric energy 59,645 59,760
Other (including $3,330,000 and $1,464,000 from affiliates) 7,719 9,330
Less reserves for doubtful accounts 5,981 5,516
-------- --------
61,383 63,574
Unbilled revenues 13,400 16,500
Fuel, materials, and supplies, at average cost 6,289 6,245
Prepaid and other current assets 16,497 15,887
-------- --------
Total current assets 98,372 104,205
-------- --------
Deferred charges and other assets 60,493 60,168
-------- --------
$702,411 $699,621
======== ========
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock, par value $50 per share,
authorized and outstanding 1,132,487 shares $ 56,624 $ 56,624
Premiums on preferred stocks 170 170
Other paid-in capital 80,000 80,000
Retained earnings 111,716 108,227
-------- --------
Total common equity 248,510 245,021
Cumulative preferred stock 36,500 36,500
Long-term debt 210,929 210,892
-------- --------
Total capitalization 495,939 492,413
-------- --------
Current liabilities:
Short-term debt (including $12,500,000 and $1,000,000
to affiliates) 19,675 22,675
Accounts payable (including $38,978,000 and $38,510,000
to affiliates) 44,525 46,247
Accrued liabilities:
Taxes 9,815 6,380
Interest 3,426 5,847
Other accrued expenses 21,480 19,558
Customer deposits 5,455 5,691
Dividends payable 2,801 1,102
-------- --------
Total current liabilities 107,177 107,500
-------- --------
Deferred federal income taxes 75,891 76,017
Unamortized investment tax credits 7,891 8,016
Other reserves and deferred credits 15,513 15,675
-------- --------
$702,411 $699,621
======== ========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
THE NARRAGANSETT ELECTRIC COMPANY
Statements of Cash Flows
Quarters Ended March 31
(Unaudited)
<CAPTION>
1996 1995
---- ----
(In Thousands)
<S> <C> <C>
Operating activities:
Net income $ 6,290 $ 7,766
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 7,137 7,507
Deferred federal income taxes and investment
tax credit, net (510) 921
Allowance for funds used during construction (89) (525)
Amortization of unbilled revenue (2,052)
Decrease (increase) in accounts receivable, net
and unbilled revenue 5,291 2,068
Decrease (increase) in fuel, materials, and supplies (44) (1,064)
Decrease (increase) in prepaid and other current assets (610) (888)
Increase (decrease) in accounts payable (1,722) (6,660)
Increase (decrease) in other current liabilities 2,700 4,337
Other, net (122) 6,050
-------- --------
Net cash provided by operating activities $ 18,321 $ 17,460
-------- --------
Investing activities:
Plant expenditures, excluding allowance for
funds used during construction $(15,346) $(17,801)
Other investing activities (69)
-------- --------
Net cash used in investing activities $(15,415) $(17,801)
-------- --------
Financing activities:
Dividends paid on common stock $ (566) $ (283)
Dividends paid on preferred stock (536) (536)
Long-term debt - issues 2,000 5,000
Long-term debt - retirements (2,000)
Changes in short-term debt (3,000) (2,850)
-------- --------
Net cash provided by (used in)
financing activities $ (4,102) $ 1,331
-------- --------
Net increase (decrease) in cash and cash equivalents $ (1,196) $ 990
Cash and cash equivalents at beginning of period 1,999 713
-------- --------
Cash and cash equivalents at end of period $ 803 $ 1,703
======== ========
Supplementary information:
Interest paid less amounts capitalized $ 7,016 $ 6,941
-------- --------
Federal income taxes paid (refunded) $ - $ (3,230)
-------- --------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Note A
- ------
A 1986 Rhode Island Supreme Court decision held that the Rhode
Island Public Utilities Commission's (RIPUC) rate-making powers
include the authority to order refunds of amounts earned in excess
of an allowed return. As a result, the RIPUC monitors the
Company's earnings on a regular basis.
Note B - 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.
The electric utility industry typically utilizes and/or
generates a range of potentially hazardous products and by-products
in its operations. New England Electric System (NEES) 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 three
sites (two of which are located in Massachusetts) at which
hazardous waste is alleged to have been disposed. 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.
Gas was manufactured from coal in Rhode Island in the past.
The Company is aware of five sites on which gas was manufactured or
manufactured gas was stored that were owned either by the Company
or by its predecessor companies. It is not known to what extent the
Company would be held liable for hazardous wastes, if any, left at
these manufactured gas locations.
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
<PAGE>
Note B - Hazardous Waste - Continued
- ------------------------
waste site that may ultimately be borne by the Company. A
preliminary review by a consultant hired by the NEES companies of
the potential cost of investigating and, if necessary, remediating
Rhode Island manufactured gas sites resulted in costs per site
ranging from less than $1 million to $11 million. An informal
waste site that may ultimately be borne by the Company. A
preliminary review by a consultant hired by the NEES companies of
the potential cost of investigating and, if necessary, remediating
Rhode Island manufactured gas sites resulted in costs per site
ranging from less than $1 million to $11 million. An informal
survey of other utilities conducted on behalf of NEES and its
subsidiaries indicated costs in a similar range. 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. The Company believes that
hazardous waste liabilities for all sites of which it is aware are
not material to its financial position.
Note C - New Accounting Standard
- --------------------------------
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of (FAS 121), effective for fiscal year 1996. This
standard clarifies when and how to recognize an impairment of
long-lived assets. If competitive or regulatory change should cause
a substantial revenue loss or lead to the permanent shutdown of any
generating facilities, 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 potential restructuring influence the
electric utility industry.
Note D
- ------
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 The
Narragansett 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 decreased $1.5
million from the corresponding period in 1995. This decrease
reflects increased distribution system-related operation and
maintenance expense and the completion of the recognition of $14
million of unbilled revenues over a 21-month period that ended in
December 1995. Partially offsetting these decreases to income is
a 3.5 percent increase in kilowatt-hour (kWh) sales due to a
return to more normal weather conditions in the first quarter of
1996 as compared to unusually mild weather in the first quarter of
1995, and an increase to base rates.
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 Rhode Island, 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 New England Electric System (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
<PAGE>
provided by a new affiliate of the Company, which is being formed
by NEES to provide comparable service across the NEES companies'
transmission system. Initially, the new affiliate would have
operational control of the Company's transmission facilities, but
may, at a later date, acquire those facilities from the Company.
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 $1 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
<PAGE>
years. Thereafter, the access charge would vary, but is expected
to decline. The provisions of Choice: New England, including the
proposed access charge, are subject to state approval and Federal
Energy Regulatory Commission (FERC) approval.
The Company filed Choice: New England with the Rhode Island
Public Utilities Commission (RIPUC) in April 1996. The RIPUC has
not yet scheduled hearings on restructuring plans.
Other regulatory initiatives
As described in the 1995 Annual Report on Form 10-K,
legislation was proposed by the Speaker and Majority Leader of the
House of Representatives of the Rhode Island Legislature that would
allow electric customers in Rhode Island to choose their power
supplier. This legislation, which is similar to Choice: New
England, is pending and is expected to be amended prior to final
consideration by the House of Representatives. Final consideration
is expected to be completed by the summer of 1996.
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
<PAGE>
will provide for the recovery of retail stranded costs only if
state regulators lack the legal authority to address those costs at
the time retail wheeling is required. The FERC also stated that it
would consider proposals for stranded cost recovery under wholesale
requirememnts 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 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 not fully recover from retail
customers, for which the Company would seek a remedy in the courts.
Historically, electric utility rates have been based on a
utility's costs. As a result, electric utilities are subject to
<PAGE>
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, such as the
proposed Rhode Island legislation or Choice: New England, could, in
the near future, cause all or a portion of the Company's operations
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.
<PAGE>
Operating Revenue
- -----------------
The following table summarizes the changes in operating
revenue:
<TABLE>
<CAPTION>
Increase (Decrease) in Operating Revenue
First Quarter
-------------
1996 vs 1995
-------------
(In Millions)
<S> <C>
Sales to ultimate customers $ 3
Rate changes 3
Unbilled revenues recognized
under rate agreement (2)
Purchased Power Cost Adjustment
(PPCA) Mechanism (2)
---
$ 2
===
</TABLE>
For a discussion of sales to ultimate customers, see the
Earnings section.
The increase in revenues due to rate changes reflects a $12
million increase in base rates, approved by the RIPUC and effective
December 1, 1995.
The decrease in unbilled revenues recognized under rate
agreement reflects the completion of the recognition of $14 million
in unbilled revenues over a 21-month period that ended December 31,
1995 in accordance with the Company's 1994 rate agreement.
<PAGE>
The Company's rates contain a fuel clause and a PPCA
provision. These mechanisms are designed to allow the Company to
true-up the recovery of purchased energy costs from NEP.
Utility Plant Expenditures and Financings
- -----------------------------------------
Cash expenditures for utility plant totaled $15 million in the
first three months of 1996. The funds necessary for utility plant
expenditures were primarily provided by net cash from operating
activities, after the payment of dividends.
During the first three months of 1996 the Company refinanced
$2 million of long-term debt at an interest rate of 7.24 percent.
The Company plans to issue an additional $10 million of long-term
debt later in 1996.
At March 31, 1996, the Company had $20 million of short-term
debt outstanding of which $7 million represents commercial paper
borrowings. The Company currently has lines of credit with banks
totaling $41 million. There were no outstanding 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 2.60.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
Information concerning the restructuring docket of the Rhode
Island Public Utilities Commission, 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 19, 1996, the Annual Meeting of Stockholders was
held. The following actions were taken by the unanimous vote of
the 1,132,487 shares having general voting rights represented at
the meeting:
The number of directors for the ensuing year was fixed at
nine.
The following were elected as directors:
Joan T. Bok
Stephen A. Cardi
Frances H. Gammell
Joseph J. Kirby
Robert L. McCabe
John W. Rowe
Richard P. Sergel
William E. Trueheart
John A. Wilson
Coopers & Lybrand L.L.P. was appointed 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 statements on Form
S-3, Commission file Nos. 33-49455, 33-50015, and 33-61131.
12 Statement re computation of ratios
The Company is filing Financial Data Schedules.
The Company filed a report on Form 8-K dated February 7, 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.
THE NARRAGANSETT ELECTRIC COMPANY
s/ Howard W. McDowell
Howard W. McDowell
Controller, Authorized Officer, and
Principal Accounting 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>
THE NARRAGANSETT 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 $22,434 $23,910 $14,589 $14,274 $21,052 $16,820
- ----------
Add income taxes and fixed charges
- ----------------------------------
Current federal income taxes 8,182 7,212 1,020 2,183 4,608 1,558
Deferred federal income taxes 2,080 3,512 3,930 2,199 4,560 5,528
Investment tax credits - net (502) (503) (508) (508) (507) (500)
Interest on long-term debt 16,937 16,627 14,334 12,715 13,290 12,581
Interest on short-term debt and other3,246 3,663 2,897 2,074 1,277 2,500
------- ------- ------- ------- ------- -------
Net earnings available for fixed charges $52,377 $54,421 $36,262 $32,937 $44,280 $38,487
------- ------- ------- ------- ------- -------
Fixed charges:
Interest on long-term debt $16,937 $16,627 $14,334 $12,715 $13,290 $12,581
Interest on short-term debt and other3,246 3,663 2,897 2,074 1,277 2,500
------- ------- ------- ------- ------- -------
Total fixed charges $20,183 $20,290 $17,231 $14,789 $14,567 $15,081
======= ======= ======= ======= ======= =======
Ratio of earnings to fixed charges 2.60 2.68 2.10 2.23 3.04 2.55
- ----------------------------------
</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 THE NARRAGANSETT ELECTRIC COMPANY, AND
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> 543,546 0
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 98,372 0
<TOTAL-DEFERRED-CHARGES> 60,493 <F1> 0
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 702,411 0
<COMMON> 56,624 0
<CAPITAL-SURPLUS-PAID-IN> 80,170 0
<RETAINED-EARNINGS> 111,716 0
<TOTAL-COMMON-STOCKHOLDERS-EQ> 248,510 0
0 0
36,500 0
<LONG-TERM-DEBT-NET> 210,929 0
<SHORT-TERM-NOTES> 19,675 <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> 186,797 0
<TOT-CAPITALIZATION-AND-LIAB> 702,411 0
<GROSS-OPERATING-REVENUE> 127,285 125,020
<INCOME-TAX-EXPENSE> 3,002 3,461
<OTHER-OPERATING-EXPENSES> 111,997 108,914
<TOTAL-OPERATING-EXPENSES> 114,999 112,375
<OPERATING-INCOME-LOSS> 12,286 12,645
<OTHER-INCOME-NET> (1,109) (112)
<INCOME-BEFORE-INTEREST-EXPEN> 11,177 12,533
<TOTAL-INTEREST-EXPENSE> 4,887 4,767
<NET-INCOME> 6,290 7,766
536 536
<EARNINGS-AVAILABLE-FOR-COMM> 5,754 7,230
<COMMON-STOCK-DIVIDENDS> 2,265 566
<TOTAL-INTEREST-ON-BONDS> 4,292 3,982
<CASH-FLOW-OPERATIONS> 18,321 17,460
<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>
