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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549-1004
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission File Number 2-7749
COMMONWEALTH ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Massachusetts 04-1659070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Main Street, Cambridge, Massachusetts 02142-9150
(Address of principal executive offices) (Zip Code)
(617) 225-4000
(Registrant's telephone number, including area code)
(Former name, address and fiscal year, if changed since last report.)
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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class of Common Stock November 1, 1997
Common Stock, $25 par value 2,043,972 shares
The Company meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q as a wholly-owned subsidiary and is therefore filing this
Form with the reduced disclosure format.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
COMMONWEALTH ELECTRIC COMPANY
CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
ASSETS
(Dollars in thousands)
September 30, December 31,
1997 1996
(Unaudited)
PROPERTY, PLANT AND EQUIPMENT, at original cost $545,938 $535,004
Less - Accumulated depreciation 172,310 163,397
373,628 371,607
Add - Construction work in progress 3,674 2,315
377,302 373,922
INVESTMENTS
Equity in nuclear electric power company 599 643
Other 14 14
613 657
CURRENT ASSETS
Cash 2,418 358
Accounts receivable -
Affiliates 3,593 2,662
Customers 41,283 42,644
Unbilled revenues 7,770 6,741
Prepaid property taxes 4,565 3,024
Inventories and other 4,133 4,580
63,762 60,009
DEFERRED CHARGES
Regulatory assets 71,466 68,129
Other 5,540 3,282
77,006 71,411
$518,683 $505,999
See accompanying notes.
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COMMONWEALTH ELECTRIC COMPANY
CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
CAPITALIZATION AND LIABILITIES
(Dollars in thousands)
September 30, December 31,
1997 1996
(Unaudited)
CAPITALIZATION
Common Equity -
Common stock, $25 par value -
Authorized and outstanding -
2,043,972 shares wholly-owned by
Commonwealth Energy System (Parent) $ 51,099 $ 51,099
Amounts paid in excess of par value 97,112 97,112
Retained earnings 32,217 27,334
180,428 175,545
Long-term debt, less current sinking
fund requirements 149,689 150,734
330,117 326,279
CURRENT LIABILITIES
Interim Financing -
Notes payable to banks 16,600 15,000
Advances from affiliates 5,870 3,070
22,470 18,070
Other Current Liabilities -
Current sinking fund requirements 3,553 3,553
Accounts payable -
Affiliates 8,986 10,213
Other 22,596 28,137
Accrued taxes -
Local property and other 5,167 3,025
Income 18,627 15,462
Other 23,443 16,274
82,372 76,664
104,842 94,734
DEFERRED CREDITS
Accumulated deferred income taxes 49,468 47,716
Unamortized investment tax credits 6,802 7,126
Other 27,454 30,144
83,724 84,986
COMMITMENTS AND CONTINGENCIES
$518,683 $505,999
See accompanying notes.
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COMMONWEALTH ELECTRIC COMPANY
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Dollars in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
1997 1996 1997 1996
ELECTRIC OPERATING REVENUES $120,058 $123,350 $348,824 $346,204
OPERATING EXPENSES
Electricity purchased for
resale, transmission and fuel 75,975 77,052 226,303 222,586
Other operation and maintenance 20,028 21,945 71,251 62,321
Depreciation 4,419 4,290 13,257 12,870
Taxes -
Income 5,206 5,383 7,309 11,289
Local property 1,480 1,524 4,632 4,415
Payroll and other 669 558 2,310 2,243
107,777 110,752 325,062 315,724
OPERATING INCOME 12,281 12,598 23,762 30,480
OTHER INCOME (EXPENSE) 7 49 (48) (212)
INCOME BEFORE INTEREST CHARGES 12,288 12,647 23,714 30,268
INTEREST CHARGES
Long-term debt 3,405 3,493 10,201 10,477
Other interest charges 609 593 1,564 1,685
Allowance for borrowed funds
used during construction (37) (10) (88) (79)
3,977 4,076 11,677 12,083
NET INCOME 8,311 8,571 12,037 18,185
RETAINED EARNINGS -
Beginning of period 27,687 20,000 27,334 20,708
Dividends on common stock (3,781) - (7,154) (10,322)
End of period $ 32,217 $ 28,571 $ 32,217 $ 28,571
See accompanying notes.
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COMMONWEALTH ELECTRIC COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Dollars in thousands)
(Unaudited)
1997 1996
OPERATING ACTIVITIES
Net income $ 12,037 $ 18,185
Effects of noncash items -
Depreciation and amortization 18,380 16,201
Deferred income taxes and investment
tax credits, net 1,138 (890)
Change in working capital, exclusive of cash
and interim financing 4,015 (3,511)
Fuel charge stabilization deferral (6,972) 4,835
All other operating items (6,585) (5,894)
Net cash provided by operating activities 22,013 28,926
INVESTING ACTIVITIES
Additions to property, plant and equipment
(exclusive of AFUDC) (16,066) (14,789)
Allowance for borrowed funds used during
construction (88) (79)
Net cash used for investing activities (16,154) (14,868)
FINANCING ACTIVITIES
Proceeds from (payment of) short-term borrowings 1,600 (7,850)
Proceeds from affiliates 2,800 6,550
Payment of dividends (7,154) (10,322)
Sinking funds payments (1,045) (1,044)
Net cash used for financing activities (3,799) (12,666)
Net increase in cash 2,060 1,392
Cash at beginning of period 358 1,430
Cash at end of period $ 2,418 $ 2,822
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest (net of capitalized amounts) $ 12,734 $ 13,043
Income taxes $ 2,825 $ 10,289
See accompanying notes.
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COMMONWEALTH ELECTRIC COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
(1) General Information
Commonwealth Electric Company (the Company) is a wholly-owned
subsidiary of Commonwealth Energy System. The parent company is referred
to in this report as the "System" and together with its subsidiaries is
collectively referred to as "the system." The System is an exempt public
utility holding company under the provisions of the Public Utility Holding
Company Act of 1935 and, in addition to its investment in the Company, has
interests in other utility and several nonregulated companies.
The Company has 740 regular employees including 485 (66%) who are
represented by three collective bargaining units. New agreements were
reached in early 1996 with two bargaining units (representing approximate-
ly 54% of regular employees) that were scheduled to expire on October 1,
1996 and November 1, 1997. These new agreements will remain in effect
until 2002 and 2001, respectively. The third agreement representing 12%
of regular employees expires on April 30, 1998. Employee relations have
generally been satisfactory.
During the second quarter of 1997, the system initiated a voluntary
personnel reduction program. For additional information, see the "Person-
nel Reduction Program" section under Management's Discussion and Analysis
of Results of Operations.
(2) Significant Accounting Policies
(a) Principles of Accounting
The Company's significant accounting policies are described in Note 2
of Notes to Financial Statements included in its 1996 Annual Report on
Form 10-K filed with the Securities and Exchange Commission. For interim
reporting purposes, the Company follows these same basic accounting poli-
cies but considers each interim period as an integral part of an annual
period and makes allocations of certain expenses to interim periods based
upon estimates of such expenses for the year.
The unaudited financial statements for the periods ended September 30,
1997 and 1996 reflect, in the opinion of the Company, all adjustments
(consisting of only normal recurring accruals, except for those described
in the "Personnel Reduction Program" section under Management's Discussion
and Analysis of Results of Operations) necessary to summarize fairly the
results for such periods. In addition, certain prior period amounts are
reclassified from time to time to conform with the presentation used in
the current period's financial statements.
Income tax expense is recorded using the statutory rates in effect
applied to book income subject to tax recorded in the interim period.
The results for interim periods are not necessarily indicative of
results for the entire year because of seasonal variations in the con-
sumption of energy and the accrual for costs associated with the personnel
reduction program referred to above.
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COMMONWEALTH ELECTRIC COMPANY
(b) Regulatory Assets and Liabilities
The Company is regulated as to rates, accounting and other matters by
various authorities including the Federal Energy Regulatory Commission
(FERC) and the Massachusetts Department of Public Utilities (DPU).
Based on the current regulatory framework, the Company accounts for
the economic effects of regulation in accordance with the provisions of
Statement of Financial Accounting Standards (SFAS) No. 71, "Accounting for
the Effects of Certain Types of Regulation." The Company has established
various regulatory assets in cases where the DPU and/or the FERC have
permitted or are expected to permit recovery of specific costs over time.
Similarly, the regulatory liabilities established by the Company are
required to be refunded to customers over time. Effective January 1,
1996, the Company adopted SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of." SFAS No.
121 imposes stricter criteria for regulatory assets by requiring that such
assets be probable of future recovery at each balance sheet date. SFAS
No. 121 did not have an impact on the Company's financial position or
results of operations upon adoption. This result may change as modifica-
tions are made to the current regulatory framework due to ongoing electric
industry restructuring efforts in Massachusetts. If all or a separable
portion of the Company's operations becomes no longer subject to the
provisions of SFAS No. 71, a write-off of related regulatory assets and
liabilities would be required, unless some form of transition cost
recovery continues through rates established and collected for the
Company's remaining regulated operations. In addition, the Company would
be required to determine any impairment to the carrying costs of deregu-
lated plant and inventory assets. However, pending Massachusetts legisla-
tion provides for recovery of stranded costs, subject to review. For
additional information relating to industry restructuring, see the
"Electric Industry Restructuring" section under Management's Discussion
and Analysis of Results of Operations.
The principal regulatory assets included in deferred charges at
September 30, 1997 and December 31, 1996 were as follows:
September 30, December 31,
1997 1996
(Dollars in thousands)
Fuel charge stabilization $30,270 $21,504
Power contract buy-out 18,432 20,794
Postretirement benefits costs
including pensions 12,026 12,092
Pilgrim nuclear plant litigation costs 6,018 6,286
Yankee Atomic unrecovered plant
and decommissioning costs 3,385 4,333
Conservation and load management costs 471 2,322
Other 864 798
$71,466 $68,129
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COMMONWEALTH ELECTRIC COMPANY
The regulatory liabilities included in other deferred credits at
September 30, 1997 and December 31, 1996 were as follows:
September 30, December 31,
1997 1996
(Dollars in thousands)
Excess Seabrook-related deferred income taxes $ 1,222 $ 2,792
Other deferred income taxes 1,970 2,086
Excess replacement power refunds 430 982
$ 3,622 $ 5,860
(3) Commitments and Contingencies
The Company is engaged in a continuous construction program presently
estimated at $109 million for the five-year period 1997 through 2001. Of
that amount, $23.3 million is estimated for 1997. As of September 30,
1997, the Company's construction expenditures amounted to approximately
$8.8 million, including an allowance for funds used during construction.
The Company expects to finance these expenditures on an interim basis with
internally-generated funds and short-term borrowings.
The program is subject to periodic review and revision due to factors
such as changes in business conditions, rates of customer growth, effects
of inflation, maintenance of reliable and safe service, equipment delivery
schedules, licensing delays, availability and cost of capital and environ-
mental regulations.
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COMMONWEALTH ELECTRIC COMPANY
Item 2. Management's Discussion and Analysis of Results of Operations
The following is a discussion of major factors which have affected
operating revenues, expenses and net income during the periods included in the
accompanying condensed statements of income. This discussion should be read
in conjunction with the Notes to Condensed Financial Statements appearing
elsewhere in this report.
A summary of the period to period changes in the principal items included
in the condensed statements of income for the three and nine months ended
September 30, 1997 and 1996 and unit sales for these periods is shown below:
Three Months Ended Nine Months Ended
September 30, September 30,
1997 and 1996 1997 and 1996
Increase (Decrease)
(Dollars in thousands)
Electric Operating Revenues $ (3,292) (2.7)% $ 2,620 0.8%
Operating Expenses -
Electricity purchased for resale,
transmission and fuel (1,077) (1.4) 3,717 1.7
Other operation and maintenance (1,917) (8.7) 8,930 14.3
Depreciation 129 3.0 387 3.0
Taxes -
Federal and state income (177) (3.3) (3,980) (35.3)
Local property and other 67 3.2 284 4.3
(2,975) (2.7) 9,338 3.0
Operating Income (317) (2.5) (6,718) (22.0)
Other Income (42) (85.7) 164 77.4
Income Before Interest Charges (359) (2.8) (6,554) (21.7)
Interest Charges (99) (2.4) (406) (3.4)
Net Income $ (260) (3.0) $ (6,148) (33.8)
Unit Sales (Megawatthours or MWH)
Retail 47,571 5.2 50,044 1.9
Wholesale 49,954 20.1 182,680 27.4
Total 97,525 8.4 232,724 7.1
The following is a summary of unit sales (in MWH) for the periods
indicated:
Three Months Nine Months
Period Ended Total Retail Wholesale Total Retail Wholesale
September 30,
1997 1,258,480 959,421 299,059 3,498,365 2,649,634 848,731
September 30,
1996 1,160,955 911,850 249,105 3,265,641 2,599,590 666,051
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COMMONWEALTH ELECTRIC COMPANY
Operating Revenues, Electricity Purchased for Resale, Transmission and Fuel
The increase in operating revenues for the nine-month period ended
September 30, 1997 from the corresponding period in 1996 was due to a greater
level of wholesale sales ($6.4 million) reflecting the changing capacity needs
of the New England Power Pool. Fluctuations in the level of wholesale
electric sales have no impact on net income. Also contributing to the
increase in revenues for the nine-month period were higher retail unit sales
($1.9 million) and the recovery of costs associated with conservation and load
management programs ($1 million). Offsetting these factors were the absence
of a $4 million refund associated with a 1996 power contract settlement
agreement and lower revenues related to the recovery of electricity purchased
for resale, transmission and fuel to retail customers ($3.9 million).
The decrease in operating revenues for the current three-month period was
primarily due to the absence of the power contract refund discussed above and
lower revenues related to the recovery of electricity purchased for resale,
transmission and fuel to retail customers ($4.4 million). Offsetting these
factors were an increase in retail unit sales revenues ($2.4 million) and
greater wholesale sales ($2.4 million).
Electricity purchased for resale, transmission and fuel expense increased
in the first nine months of 1997 due to higher unit sales. Also included in
purchased power is an increase in purchases from affiliate Canal Electric
Company's Unit 1 and 2 reflecting the increased availability of these units.
This expense declined in the current quarter despite higher unit sales due
primarily to a decline in the average cost of power.
Other Operation and Maintenance
Other operation and maintenance includes the following:
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
(Dollars in millions)
Other operation and maintenance $20.0 $21.9 $71.3 $62.3
Less:
Personnel Reduction Program - - 8.4 -
April 1 storm-related maintenance - - 1.9 -
Hurricane Edouard storm damage - 1.9 - 1.9
Conservation and load management
accelerated recovery - - 1.3 -
Net $20.0 $20.0 $59.7 $60.4
The increase in other operation and maintenance was primarily due to one-
time costs related to a Personnel Reduction Program initiated during the
second quarter (as further discussed below), storm damage costs related to an
April 1 blizzard, and costs attributable to conservation and load management
programs due to approval received in the first quarter of 1997 from the
Massachusetts Department of Public Utilities (DPU) for accelerated recovery of
costs. Partially offsetting these factors was the absence in the current
three and nine-month periods of costs associated with storm damage from
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COMMONWEALTH ELECTRIC COMPANY
Hurricane Edouard in 1996.
Depreciation and Taxes
Depreciation expense increased slightly in the current three and nine-
month periods due to a higher level of depreciable property, plant and
equipment. The decline in federal and state income taxes was due to a lower
level of pretax income. Local property and other tax increases for the
current nine-month period primarily reflect higher property tax rates and
assessments in the Company's service area. In the current quarter, the
increase in expense was due to higher payroll taxes.
Other Income and Interest Charges
Other income increased in the current nine-month period from the same
period in 1996 due to the absence of a settlement paid in the second quarter
of 1996 by the Company related to conservation management services provided by
an outside vendor.
Total interest charges declined in the current three and nine-month
periods reflecting scheduled sinking fund payments on long-term debt and,
during the current nine-month period, a lower average amount of short-term
borrowings.
Personnel Reduction Program
As initially discussed in the Company's 1996 Annual Report on Form 10-K
filed with the Securities and Exchange Commission, the Company announced the
details of a system-wide voluntary Personnel Reduction Program (PRP) in May
1997. The goal of the PRP is to achieve a reduced, more efficient and more
productive workforce in response to the significant regulatory changes facing
the System. This action followed the consolidation of the system's electric
and gas operations. The expectation is that the system's workforce will be
reduced by 15% to 20%.
The PRP was offered to substantially all regular and part-time employees
of the system. Eligibility for employees covered by collective bargaining
agreements was subject to negotiation. The system reserves the right to limit
the number of participants to 300; however, the system expects the final
participation level to exceed this count.
The program provides severance based on years of service, the continuation
of certain health and dental insurance for specified periods and limited
reimbursement for certain educational and/or outplacement services.
To date, approximately 12% of the Company's employees have voluntarily
terminated employment with the Company as a result of the PRP. The Company
estimates that the cost of termination benefits as described above, including
a portion of costs for certain affiliates but excluding generation-related
costs that are being addressed separately as part of the industry restructur-
ing process, will approximate $8.4 million which was recorded in the second
quarter and had an after-tax income impact of $5.1 million. The payback
period is expected to be less than one year.
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COMMONWEALTH ELECTRIC COMPANY
Electric Industry Restructuring
On December 30, 1996 the DPU issued a final order announcing its "Model
Rules and Legislative Proposal" as a guide in the creation of a competitive
market for electric generation in Massachusetts. Legislative proposals
concerning electric industry restructuring were filed by the Governor of the
Commonwealth of Massachusetts on February 24, 1997, and by the Massachusetts
Legislature's Joint Committee on Electric Utility Restructuring on March 20,
1997 that ultimately evolved into the proposal issued on August 4, 1997 by the
Senate Chairman of the Joint Committee on Government Regulations. Additional-
ly, during the past year, three Massachusetts electric utilities announced
negotiated restructuring settlements with the Massachusetts Attorney General.
Generally, these original proposals and settlement agreements included, among
other things, provisions for a 10% reduction in customer charges, divestiture
of non-nuclear generating assets, recovery of stranded costs through a non-
bypassable access charge and an implementation date of January 1, 1998.
Subsequently, on October 3, 1997, the House Chairman of the Joint Commit-
tee on Government Regulations issued another proposal that included, among
other things, a provision calling for a 15% reduction in rates for customers
taking standard offer service from the utility over a seven-year period, the
establishment of an auditing board within the DPU that would review the
stranded costs that would be included in each company's non-bypassable access
charge, unbundled rates as of January 1, 1998 and implementation of customer
choice of energy supplier by March 1, 1998.
On October 29, 1997, a joint proposal was filed by the chairpersons of the
Joint Committee on Government Regulations which essentially reflected the
provisions previously proposed. This proposal was then forwarded to the Ways
and Means Committee of the House of Representatives for further review and
amendment. The House Ways and Means Committee then sent the amended legisla-
tive proposal to the House of Representatives (the House). On November 10,
1997, after a considerable number of additional amendments were made by
members of the House, the legislation was passed in the House by a vote of 157
to 3. Provisions of this legislation include, among other things, a 10%
discount on standard offer service and retail choice of energy supplier
effective March 1, 1998, with a subsequent increase in the discount on
standard offer service to 15% upon completion of divestiture of non-nuclear
generating assets and securitization of net non-mitigable stranded costs
(which, for the system, are primarily the result of above-market purchased
power contracts with non-utility generators); and, recovery of stranded costs
subject to review and an audit process. A Senate version of electric industry
restructuring legislation is expected shortly.
The proposed legislation is lengthy, complex and subject to change before
it is finalized. The Company cannot yet determine the final impact on its
operations and financial condition. The final legislation must also be
approved by the Massachusetts House and Senate and signed by the Governor of
Massachusetts. While the Company is encouraged by the legislation's treatment
of stranded cost recovery, the mandated customer discount could have a
significant impact on future cash flows. The system is preparing a proposed
restructuring plan in anticipation of final legislation being enacted.
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COMMONWEALTH ELECTRIC COMPANY
Auction Process
On March 31, 1997, the system submitted a report to the DPU which detailed
the proposed auction process for selling its electric generation assets and
entitlements. The process includes a standard, sealed-bid auction for
generation assets and purchased power contracts. The auction process would
provide a market-based approach to maximizing stranded cost mitigation and
minimizing the access charges that ratepayers will have to pay for stranded
cost recovery. A request for bids from interested parties was issued during
August and in October an Offering Memorandum was issued. The system expects
that the final bidders will be chosen by year-end and that the entire process,
including regulatory approvals, will be completed no later than the end of
1998.
Provisions of Statement of Financial Accounting Standards No. 71
As described in Note 2(b) of the Notes to Condensed Financial Statements,
the Company complies with the provisions of Statement of Financial Accounting
Standards (SFAS) No. 71, "Accounting for the Effects of Certain Types of
Regulation." In the event the Company is somehow unable to meet the criteria
for following SFAS No. 71, the accounting impact would be an extraordinary,
non-cash charge to operations in an amount that could be material. Criteria
that could give rise to the discontinuance of SFAS No. 71 include: 1) increas-
ing competition restricting the Company's ability to establish prices to
recover specific costs, and 2) a significant change in the current manner in
which rates are set by regulators. The Company periodically monitors these
criteria to ensure that the continuing application of SFAS No. 71 is appropri-
ate. Recently, the Securities and Exchange Commission has questioned the
ability of certain utilities continuing the application of SFAS No. 71 where
legislation provided for the transition to retail competition. The issue of
when and how to discontinue the application of SFAS No. 71 by utilities during
transition to competition was referred to the Financial Accounting Standards
Board's Emerging Issues Task Force and guidance was issued in July 1997.
Based on the current evaluation of the various factors and conditions that are
expected to impact future cost recovery, the Company believes that its utility
operations remain subject to SFAS No. 71 and its regulatory assets, including
those related to electric generation, are probable of future recovery.
<PAGE>
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COMMONWEALTH ELECTRIC COMPANY
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending material legal proceeding.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
Filed herewith as Exhibit 1 is the Financial Data Schedule for
the nine months ended September 30, 1997.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended
September 30, 1997.
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COMMONWEALTH ELECTRIC COMPANY
SIGNATURE
Pursuant to the requirements 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.
COMMONWEALTH ELECTRIC COMPANY
(Registrant)
Principal Financial and
Accounting Officer:
Date: November 14, 1997 JAMES D. RAPPOLI
James D. Rappoli,
Financial Vice President
and Treasurer
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheet, statement of income and statement of cash flows contained in
Form 10-Q of Commonwealth Electric Company for the nine months ended September
30, 1997 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000071222
<NAME> COMMONWEALTH ELECTRIC COMPANY
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