<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 June 30, 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 June 30, 1996.
<PAGE>
PART I FINANCIAL STATEMENTS
Item 1. Financial Statements
- ----------------------------
<TABLE>
THE NARRAGANSETT ELECTRIC COMPANY
Statements of Income
Periods Ended June 30
(Unaudited)
<CAPTION>
Quarter Six Months
-------- ----------
1996 1995 1996 1995
---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C>
Operating revenue $116,470 $116,426 $243,755 $241,446
-------- -------- -------- --------
Operating expenses:
Fuel for generation and purchased electric
energy (principally from New England
Power Company, an affiliate) 68,779 71,713 142,468 144,515
Other operation 18,156 17,649 35,259 33,918
Maintenance 2,967 2,383 6,954 5,052
Depreciation 7,220 7,506 14,357 15,013
Taxes, other than federal income taxes 9,972 9,219 20,053 18,886
Federal income taxes 1,131 655 4,133 4,116
-------- -------- -------- --------
Total operating expenses 108,225 109,125 223,224 221,500
-------- -------- -------- --------
Operating income 8,245 7,301 20,531 19,946
Other income:
Allowance for equity funds used during
construction 219 428
Other income (expense), net (125) (145) (1,234) (466)
-------- -------- -------- --------
Operating and other income 8,120 7,375 19,297 19,908
-------- -------- -------- --------
Interest:
Interest on long-term debt 4,304 4,088 8,596 8,070
Other interest 830 561 1,514 1,662
Allowance for borrowed funds used during
construction - credit (131) (332) (220) (648)
-------- -------- -------- --------
Total interest 5,003 4,317 9,890 9,084
-------- -------- -------- --------
Net income $ 3,117 $ 3,058 $ 9,407 $ 10,824
======== ======== ======== ========
Statements of Retained Earnings
Retained earnings at beginning of period $111,716 $ 98,220 $108,227 $ 91,556
Net income 3,117 3,058 9,407 10,824
Dividends declared on cumulative
preferred stock (536) (536) (1,072) (1,072)
Dividends declared on common stock (3,114) (3,397) (5,379) (3,963)
-------- -------- -------- --------
Retained earnings at end of period $111,183 $ 97,345 $111,183 $ 97,345
======== ======== ======== ========
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
Statements of Income
Twelve Months Ended June 30
(Unaudited)
<CAPTION>
1996 1995
---- ----
(In Thousands)
<S> <C> <C>
Operating revenue $501,422 $493,854
-------- --------
Operating expenses:
Fuel for generation and purchased electric
energy (principally from New England
Power Company, an affiliate) 291,225 301,616
Other operation 74,535 73,672
Maintenance 13,076 11,106
Depreciation 30,877 26,496
Taxes, other than federal income taxes 37,794 36,265
Federal income taxes 10,905 7,760
-------- --------
Total operating expenses 458,412 456,915
-------- --------
Operating income 43,010 36,939
Other income:
Allowance for equity funds used during
construction (322) 838
Other income (expense), net (960) (270)
-------- --------
Operating and other income 41,728 37,507
-------- --------
Interest:
Interest on long-term debt 17,153 15,590
Other interest 3,515 3,331
Allowance for borrowed funds used during
construction - credit (1,433) (1,526)
-------- --------
Total interest 19,235 17,395
-------- --------
Net income $ 22,493 $ 20,112
======== ========
Statements of Retained Earnings
Retained earnings at beginning of period $ 97,345 $ 84,755
Net income 22,493 20,112
Dividends declared on cumulative preferred stock (2,143) (2,143)
Dividends declared on common stock (6,512) (5,379)
-------- --------
Retained earnings at end of period $111,183 $ 97,345
======== ========
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>
June 30, December 31,
ASSETS 1996 1995
------ ---- ----
(In Thousands)
<S> <C> <C>
Utility plant, at original cost $722,856 $699,906
Less accumulated provisions for depreciation 178,516 173,391
-------- --------
544,340 526,515
Construction work in progress 5,949 8,733
-------- --------
Net utility plant 550,289 535,248
-------- --------
Current assets:
Cash 859 1,999
Accounts receivable:
From sales of electric energy 53,819 59,760
Other (including $1,524,000 and $1,464,000
from affiliates) 5,713 9,330
Less reserves for doubtful accounts 6,193 5,516
-------- --------
53,339 63,574
Unbilled revenues 15,600 16,500
Fuel, materials and supplies, at average cost 6,083 6,245
Prepaid and other current assets 16,994 15,887
-------- --------
Total current assets 92,875 104,205
-------- --------
Deferred charges and other assets 59,917 60,168
-------- --------
$703,081 $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 111,183 108,227
-------- --------
Total common equity 247,977 245,021
Cumulative preferred stock 36,500 36,500
Long-term debt 185,958 210,892
-------- --------
Total capitalization 470,435 492,413
-------- --------
Current liabilities:
Long-term debt due in one year 25,000
Short-term debt (including $5,375,000 and
$1,000,000 to affiliates) 17,375 22,675
Accounts payable (including $43,142,000 and
$38,510,000 to affiliates) 48,908 46,247
Accrued liabilities:
Taxes 4,347 6,380
Interest 5,815 5,847
Other accrued expenses 22,245 19,558
Customer deposits 5,528 5,691
Dividends payable 3,650 1,102
-------- --------
Total current liabilities 132,868 107,500
-------- --------
Deferred federal income taxes 76,950 76,017
Unamortized investment tax credits 7,766 8,016
Other reserves and deferred credits 15,062 15,675
-------- --------
$703,081 $699,621
======== ========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
THE NARRAGANSETT ELECTRIC COMPANY
Statements of Cash Flows
Six Months Ended June 30
(Unaudited)
<CAPTION>
1996 1995
---- ----
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $ 9,407 $ 10,824
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 14,357 15,013
Deferred federal income taxes and
investment tax credit, net 165 1,793
Amortization of unbilled revenues (4,104)
Allowance for funds used during construction (220) (1,076)
Decrease (increase) in accounts receivable, net
and unbilled revenues 11,135 2,629
Decrease (increase) in fuel, materials, and supplies 162 (1,278)
Decrease (increase) in prepaid and other current assets (1,107) (2,014)
Increase (decrease) in accounts payable 2,661 (5,686)
Increase (decrease) in other current liabilities 459 3,152
Other, net 500 8,880
-------- --------
Net cash provided by operating activities $ 37,519 $ 28,133
-------- --------
Investing Activities:
Plant expenditures, excluding allowance for
funds used during construction $(29,196) $(38,868)
-------- --------
Net cash used in investing activities $(29,196) $(38,868)
-------- --------
Financing Activities:
Dividends paid on common stock $ (2,831) $ (850)
Dividends paid on preferred stock (1,072) (1,072)
Long-term debt - issues 2,000 15,000
Long-term debt - retirements (2,000)
Changes in short-term debt (5,300) (1,950)
Premium on reacquisition of long-term debt (260)
-------- --------
Net cash provided by (used in) financing activities$ (9,463) $ 11,128
-------- --------
Net increase (decrease) in cash and cash equivalents $ (1,140) $ 393
Cash and cash equivalents at beginning of period 1,999 713
-------- --------
Cash and cash equivalents at end of period $ 859 $ 1,106
======== ========
Supplementary Information:
Interest paid less amounts capitalized $ 9,323 $ 8,389
-------- --------
Federal income taxes paid (refunded) $ 3,750 $ (285)
-------- --------
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 in its operations a range of potentially hazardous
products and by-products. 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
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
- ------
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 second quarter of 1996 was unchanged from
the corresponding period in 1995. Earnings for the six months to
date decreased $1.4 million from the corresponding period in 1995.
This decrease reflects (i) increased distribution system-related
operation and maintenance expenses, (ii) the completion of the
recognition of $14 million of unbilled revenues over a 21-month
period that ended in December 1995, (iii) increased taxes, other
than income taxes, and (iv) decreased allowance for funds used
during construction, the latter two of which are attributable to
the Manchester Street Station entering commercial operation in the
second half of 1995. Partially offsetting these decreases to
income for the six-month period is a 1.9 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 in base
rates.
<PAGE>
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
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 and New
Hampshire, 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"). In Rhode Island, such a proposal has been enacted into
law.
Rhode Island legislation
On August 7, 1996, the Governor of Rhode Island signed into
law legislation that will restructure the electric utility industry
in Rhode Island. Rhode Island is the first state to pass
comprehensive legislation providing retail customers with access to
alternative suppliers and providing utilities with recovery of
their stranded investments. The New England Electric System
<PAGE>
companies supported this legislation which affects the Company and
New England Power Company (NEP), its affiliated wholesale power
supplier.
The legislation will allow all customers of electric utilities
to choose their power supplier under a phased-in approach, while
transmission and distribution rates would remain regulated. This
phase-in would begin on July 1, 1997 for customers representing
approximately 10 percent of the Company's load, followed by another
10 percent on January 1, 1998, and the balance of customers on July
1, 1998.
Under the new law, NEP's wholesale contract with the Company
will be terminated. In return, the cost of NEP's past generation
commitments to serve the Company's customers will be recovered
through a transition access charge on retail distribution rates.
Those commitments, which are currently estimated at approximately
$4 billion on a present value basis in total for NEP (of which the
Company's share is approximately $1 billion), consist of (i)
generating plant commitments, (ii) regulatory assets, (iii) the
above market component of purchased power contracts, and (iv) the
operating cost of nuclear plants which cannot be mitigated by
shutting down the plants. The aggregate amount of the transition
access charge will be reduced by the fair market value of the
utilities' non-nuclear generating assets. The value of such
generating assets will be determined by leasing, selling, spinning
off, or otherwise disposing of at least a 15 percent interest in
such generating facilities.
<PAGE>
Sunk costs associated with NEP's generating plants and
regulatory assets will be recovered over a period of 12 years.
NEP's purchased power contracts and nuclear decommissioning costs
will be recovered as incurred over the life of those obligations,
a period expected to extend beyond 12 years. The initial
transition access charge will be set at 2.8 cents per kWh through
December 31, 2000, and is expected to decline thereafter.
Implementation of various aspects of the Rhode Island legislation
is subject to Rhode Island Public Utilities Commission and Federal
Energy Regulatory Commission (FERC) approval. The legislation also
requires the Company to transfer its transmission and generation
assets to affiliated companies at the net book value of those
assets.
The legislation also establishes performance-based rates for
distribution utilities, including the Company. Under the
legislation, the Company will be entitled to increase its
distribution rates by approximately $10 million annually for 1997
and 1998. In addition, for those two years, the Company's return
on equity will be subject to a floor of 6 percent and a ceiling of
11 percent. Earnings over the ceiling will be shared equally
between customers and shareholders up to an absolute cap on return
on equity of 12.5 percent. To the extent that earnings fall below
the floor, the Company will be authorized to surcharge customers
for the shortfall.
<PAGE>
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 Standard 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. While the Company believes that the new
legislation, described above, will not affect its ability to
continue to meet the criteria of FAS 71, future regulatory,
legislative, or utility initiatives, could cause all or a portion
of its operations to cease meeting such criteria. 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.
FERC order
In April 1996, the FERC issued Order No. 888 addressing open
access transmission and required those utilities that own
transmission facilities 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
<PAGE>
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 retail
wheeling is required. The FERC also stated that it would permit
stranded cost recovery under wholesale requirements contracts, such
as the contracts between NEP and its retail affiliates.
This "Competitive Conditions" section contains forward-looking
statements as defined under the securities laws. Actual results
could differ materially from those projected.
<PAGE>
Operating Revenue
- -----------------
The following table summarizes the changes in operating
revenue:
Increase (Decrease) in Operating Revenue
Second Quarter Six Months
-------------- ----------
1996 vs 1995 1996 vs 1995
------------- ------------
(In Millions)
Sales to ultimate customers $ 1 $ 4
Rate changes 3 6
Fuel recovery (2) (2)
Unbilled revenues recognized
under rate agreement (2) (4)
Rate adjustment mechanisms - (2)
--- ---
$ - $ 2
=== ===
For a discussion of sales to ultimate customers, see the
"Earnings" section.
The increase in revenues due to rate changes reflects a $12
million base rate increase, effective in December 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>
Operating Expenses
- ------------------
The following table summarizes the changes in operating
expenses which are discussed below:
Increase (Decrease) in Operating Expenses
Second Quarter Six Months
-------------- ----------
1996 vs 1995 1996 vs 1995
------------- ------------
(In Millions)
Fuel for generation and
purchased electric energy $(3) $(2)
Other operation and maintenance 1 3
Taxes, other than income taxes 1 1
--- ---
$(1) $ 2
=== ===
The increases in other operation and maintenance expense
primarily reflect increased distribution system-related expenses.
The increase in taxes, other than income taxes, in the second
quarter and six months reflects property taxes on the Manchester
Street Station.
Utility Plant Expenditures and Financings
- -----------------------------------------
Cash expenditures for utility plant totaled $29 million in the
first six months of 1996. The funds necessary for utility plant
expenditures were provided by net cash from operating activities,
after the payment of dividends.
During the first six months of 1996 the Company refinanced $2
million of long-term debt at an interest rate of 7.24 percent. The
<PAGE>
Company plans to issue an additional $10 million of long-term debt
later in 1996.
Citing the passage of the restructuring legislation in Rhode
Island, Moody's Investor Services lowered the credit ratings of the
Company from A1 to A2 for senior secured debt.
At June 30, 1996, the Company had $17 million of short-term
debt outstanding including $12 million of 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 June 30, 1996.
For the twelve-month period ending June 30, 1996, the ratio of
earnings to fixed charges was 2.58.
<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 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 May 30, 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 June 30, 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: August 14, 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
June 30, 1996 Years Ended December 31,
Actual -------------------------------------------------------------
(Unaudited) 1995 1994 1993 1992 1991
-------------- ---- ---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Net Income $22,493 $23,910 $14,589 $14,274 $21,052 $16,820
- ----------
Add income taxes and fixed charges
- ----------------------------------
Current federal income taxes 8,850 7,212 1,020 2,183 4,608 1,558
Deferred federal income taxes 1,884 3,512 3,930 2,199 4,560 5,528
Investment tax credits - net (501) (503) (508) (508) (507) (500)
Interest on long-term debt 17,153 16,627 14,334 12,715 13,290 12,581
Interest on short-term debt and other3,515 3,663 2,897 2,074 1,277 2,500
------- ------- ------- ------- ------- -------
Net earnings available for fixed charges $53,394 $54,421 $36,262 $32,937 $44,280 $38,487
------- ------- ------- ------- ------- -------
Fixed charges:
Interest on long-term debt $17,153 $16,627 $14,334 $12,715 $13,290 $12,581
Interest on short-term debt and other3,515 3,663 2,897 2,074 1,277 2,500
------- ------- ------- ------- ------- -------
Total fixed charges $20,668 $20,290 $17,231 $14,789 $14,567 $15,081
======= ======= ======= ======= ======= =======
Ratio of earnings to fixed charges 2.58 2.68 2.10 2.23 3.04 2.55
- ----------------------------------
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<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> <C> <C>
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995 DEC-31-1996 DEC-31-1995
<PERIOD-END> JUN-30-1996 JUN-30-1995 JUN-30-1996 JUN-30-1995
<PERIOD-TYPE> 6-MOS 6-MOS QTR-2 QTR-2
<BOOK-VALUE> PER-BOOK PER-BOOK PER-BOOK PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 550,289 0 0 0
<OTHER-PROPERTY-AND-INVEST> 0 0 0 0
<TOTAL-CURRENT-ASSETS> 92,875 0 0 0
<TOTAL-DEFERRED-CHARGES> 59,917 <F1> 0 0 0
<OTHER-ASSETS> 0 0 0 0
<TOTAL-ASSETS> 703,081 0 0 0
<COMMON> 56,624 0 0 0
<CAPITAL-SURPLUS-PAID-IN> 80,170 0 0 0
<RETAINED-EARNINGS> 111,183 0 0 0
<TOTAL-COMMON-STOCKHOLDERS-EQ> 247,977 0 0 0
0 0 0 0
36,500 0 0 0
<LONG-TERM-DEBT-NET> 185,958 0 0 0
<SHORT-TERM-NOTES> 5,375 0 0 0
<LONG-TERM-NOTES-PAYABLE> 0 0 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 12,000 0 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 25,000 0 0 0
0 0 0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0 0 0
<LEASES-CURRENT> 0 0 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 190,271 0 0 0
<TOT-CAPITALIZATION-AND-LIAB> 703,081 0 0 0
<GROSS-OPERATING-REVENUE> 243,755 241,446 116,470 116,426
<INCOME-TAX-EXPENSE> 4,133 4,116 1,131 655
<OTHER-OPERATING-EXPENSES> 219,091 217,384 107,094 108,470
<TOTAL-OPERATING-EXPENSES> 223,224 221,500 108,225 109,125
<OPERATING-INCOME-LOSS> 20,531 19,946 8,245 7,301
<OTHER-INCOME-NET> (1,234) (38) (125) 74
<INCOME-BEFORE-INTEREST-EXPEN> 19,297 19,908 8,120 7,375
<TOTAL-INTEREST-EXPENSE> 9,890 9,084 5,003 4,317
<NET-INCOME> 9,407 10,824 3,117 3,058
1,072 1,072 536 536
<EARNINGS-AVAILABLE-FOR-COMM> 8,335 9,752 2,581 2,522
<COMMON-STOCK-DIVIDENDS> 5,379 3,963 3,114 3,397
<TOTAL-INTEREST-ON-BONDS> 8,596 8,070 4,304 4,088
<CASH-FLOW-OPERATIONS> 37,519 28,133 19,198 10,673
<EPS-PRIMARY> 0 <F2> 0 <F2> 0 <F2> 0 <F2>
<EPS-DILUTED> 0 <F2> 0 <F2> 0 <F2> 0 <F2>
<FN>
<F1> Total deferred charges includes other assets.
<F2> Per share data is not relevant because the Company's common stock is wholly owned by New England Electric System.
</FN>
