<PAGE>
File No.: 70-7950
CERTIFICATE OF NOTIFICATION
(Rule 24)
SECURITIES AND EXCHANGE COMMISSION
BY
NEW ENGLAND ELECTRIC RESOURCES, INC. (NEERI)
In accordance with the order of the Securities and Exchange Commission
dated September 4, 1992, the following is a report for the third quarter of
1994:
1. NEERI is a Massachusetts corporation which was formed in January
1992. NEERI was not capitalized until October 13, 1992 when one
thousand shares of NEERI common stock were issued to New England
Electric System (NEES).
To assist Nantucket Electric Company (NEC) in meeting its short-
term needs for reliable energy, NEERI is providing materials,
delivery, installation, interconnection and start-up testing
services for a fully automated two unit diesel driven electric
generating plant at the existing NEC Airport Generating Station.
The work is taking place at NEC and New England Electric
facilities pursuant to a letter agreement. The agreement provides
for billing over a three year period at $25,070 per month
effective the month immediately following the notice to proceed by
NEC. As of September 30, 1994, $802,240 had not yet been billed
in accordance with the agreement ($275,770 included in Accounts
Receivable and $526,470 included in Deferred Charges and Other
Assets). Compensation recognized during the third quarter was
$902,520.
NEERI undertook consulting activities for the Hungarian
Electricity Board pursuant to Agreements with the Hungarian
Electricity Board and the United States Energy Association (USEA).
The consulting activities took place at New England Electric
facilities and in Hungary. Compensation recognized during the
third quarter was $2,261.
Pursuant to two subcontracting agreements with RCG/Hagler Bailly,
Inc., NEERI provided assistance to the Polish Power Grid Company
to develop a process and capabilities for Integrated Resource
Planning. The project is part of the Regional Energy Efficiency
Program for Eastern and Central Europe and The Energy Sector
Restructuring, Privatization, and Regulatory Reform Program of the
Government of Poland which are being conducted with the assistance
of the United States Agency for International Development and the
World Bank. The work took place in Poland and at New England
Electric facilities. The subcontracting agreement is a fixed
price agreement and provides for billing upon completion of
consulting services. The compensation recognized in the third
quarter was $21,000.
<PAGE>
NEERI is providing consulting services on independent power to the
National Energy Policy Office of the Government of Thailand
pursuant to a subcontracting agreement with Price Waterhouse (PW)
in connection with PW's Energy Project Development Fund and the
United States Agency for International Development. The
consulting is taking place in Thailand and at New England Electric
facilities. The agreement provides for billing upon completion of
services. The compensation recognized during the third quarter
was $32,731.
Pursuant to a letter agreement with The World Bank, NEERI provided
consulting services on competitive procurement of power supplies
from non-utility power project developers in India. The work
involved efforts at NEES, in Washington, D.C. and in Hyderabad,
India. Compensation recognized for the third quarter was $18,700.
NEERI entered into a consulting services agreement with Northrop,
Devine & Tarbell, Inc. (ND&T) to provide transmission line
engineering services. The consulting will take place in Portland,
Maine, Vancouver, Washington, and at New England Electric
facilities. The agreement, which shall be in effect for six
months, provides for monthly billing. Compensation recognized in
the third quarter was $1,825.
2. As of September 30, 1994, NEES had purchased 1,000 shares of NEERI
common stock and made subordinated loans totaling $1,249,000 to
NEERI.
3. As of September 30, 1994, NEERI employed no permanent personnel.
Certain employees of NEPSCO have billed time to NEERI under the
terms of the Service Agreement filed with Form U-1, File No.
70-7950.
4. As of September 30, 1994, NEERI had not purchased or received from
associate companies of NEES any intellectual property.
5. Attached in Exhibits A through C are a balance sheet, twelve
months ending income statement, and statement of cash flow for
NEERI.
The balance sheet includes NEERI's $250,000 investment in Quality
Power Systems, Inc. (QPS). The investment, authorized by Order of
the Commission Release Number 35-26057, is in the form of a
debenture due June 1, 2004, which may, at NEERI's option, be
converted into common stock of QPS. The debenture provides for
quarterly interest payments after June 1, 1994, with the first
payment due September 1, 1994. At the time of this filing the
payment had not been received. Due to the uncertainty involved in
the interest payment's collection, NEERI has not recorded the
receivable and associated interest income on its financial
statements.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this certificate of
notification (Commission's File No. 70-7950) to be signed on its behalf by the
undersigned officer thereunto duly authorized.
NEW ENGLAND ELECTRIC RESOURCES, INC
s/John G. Cochrane
By: _________________________________
John G. Cochrane
Treasurer
Date: November 10, 1994
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A Balance Sheet at September 30, 1994 Filed
(Unaudited, subject to adjustment) herewith
B Statement of Income and Retained Filed
Deficit for twelve months ended herewith
September 30, 1994 (Unaudited,
subject to adjustment)
C Statement of Cash Flows for twelve Filed
months ended September 30, 1994 herewith
(Unaudited, subject to adjustment)
<PAGE>
Exhibit A
NEW ENGLAND ELECTRIC RESOURCES, INC.
Balance Sheet
September 30, 1994
(Unaudited, Subject to Adjustment)
ASSETS
- ------
Investment in Quality Power Systems, Inc. $ 250,000
----------
Current assets:
Cash $ 32,807
Accounts receivable 341,446
Accounts receivable from associated companies 5,793
Tax benefit receivable 23,035
----------
Total current assets $ 403,081
----------
Deferred charges and other assets 526,470
----------
Total assets $1,179,551
==========
LIABILITIES AND PARENT COMPANY'S INVESTMENT
- -------------------------------------------
Current liabilities:
Accounts payable to associated companies $ 151,134
Accounts payable 20,703
Accrued taxes 3,157
----------
Total current liabilities $ 174,994
---------
Parent company's investment:
Common stock, par value $1 per share 1,000
Subordinated notes payable to parent 1,249,000
Paid-in capital
Retained deficit (245,443)
----------
Total parent company's investment $1,004,557
----------
Total current liabilities and parent company's investment $1,179,551
==========
<PAGE>
Exhibit B
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Income and Retained Deficit
For the Twelve Months Ended September 30, 1994
(Unaudited, Subject to Adjustment)
INCOME
- ------
Services rendered to nonassociated companies $1,111,256
Miscellaneous income or loss
----------
TOTAL INCOME $1,111,256
----------
EXPENSE
- -------
Outside services employed $1,244,523
Taxes other than income taxes 0
Income taxes (51,710)
----------
TOTAL EXPENSE $1,192,813
----------
NET INCOME OR (LOSS) $ (81,557)
==========
Retained earnings/(deficit) at beginning of period $ (163,886)
----------
Retained earnings/(deficit) at end of period $ (245,443)
==========
<PAGE>
Exhibit C
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Cash Flows
For the Twelve Months Ended September 30, 1994
(Unaudited, Subject to Adjustment)
Operating Activities:
Net income/(loss) $ (81,557)
Adjustments to reconcile net loss to net cash provided
by operating activities:
(Increase)/decrease in tax benefit receivable 19,861
(Increase)/decrease in accounts receivable (296,308)
Increase/(decrease) in accounts payable 117,349
Increase/(decrease) in accrued taxes 2,700
(Increase)/decrease in deferred charges and other assets (526,470)
----------
Net cash provided by operating activities $ (764,425)
----------
Investing Activities:
Investment in Quality Power Systems, Inc. $ (250,000)
Financing Activities:
Subordinated notes payable to parent-issues $ 984,000
Proceeds from common stock issued 0
----------
Net cash used in financing activities $ 984,000
----------
Net increase/(decrease) in cash and cash equivalents (30,425)
Cash and cash equivalents at beginning of period 63,232
----------
Cash and cash equivalents at end of period $ 32,807
==========
