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File No. 70-8679
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT NO. 2
TO
FORM U-1
APPLICATION/DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
(the Act)
GRANITE STATE ELECTRIC COMPANY (Granite)
MASSACHUSETTS ELECTRIC COMPANY (Mass. Electric)
THE NARRAGANSETT ELECTRIC COMPANY (Narragansett)
NARRAGANSETT ENERGY RESOURCES COMPANY (NERC)
NEW ENGLAND ELECTRIC TRANSMISSION CORPORATION (NEET)
NEW ENGLAND ENERGY INCORPORATED (NEEI)
NEW ENGLAND HYDRO-TRANSMISSION ELECTRIC COMPANY, INC.
(Mass. Hydro)
NEW ENGLAND HYDRO-TRANSMISSION CORPORATION (NH Hydro)
NEW ENGLAND POWER COMPANY (NEP)
NEW ENGLAND POWER SERVICE COMPANY (NEPSCO)
and
NEW ENGLAND ELECTRIC SYSTEM (NEES)
(Names of companies filing this statement)
25 Research Drive, Westborough, Massachusetts 01582
33 West Lebanon Road, Lebanon, NH 03766 (Granite)
280 Melrose Street, Providence, RI 02901 (Narragansett)
(Address of principal executive offices)
NEW ENGLAND ELECTRIC SYSTEM
(Name of top registered holding company parent
of the participating companies herein)
Michael E. Jesanis Robert King Wulff
Treasurer Corporation Counsel
25 Research Drive 25 Research Drive
Westborough, MA 01582 Westborough, MA 01582
(Names and addresses of agents for service)
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Paragraph six of Item 1 is hereby amended to read in its entirety as follows:
"NEPSCO proposes to increase its current authorization of $12 million to
$25 million. NEPSCO presently carries on its books approximately $28.5
million in unfunded post-retirement and deferred compensation obligations to
present and retired executives. The operating companies have been previously
billed for these amounts and paid the cash to NEPSCO. It is NEPSCO's current
intention to put $30 million into an existing rabbi trust to provide
additional security to those individuals. Although the money in the rabbi
trust will still be available to the creditors of the Service Company, it will
no longer be available for NEPSCO's short-term cash operating needs. NEPSCO's
short-term cash needs peak at the time of the payment of bonuses such as the
all employee goals program each March. NEPSCO's short-term borrowing reached
a maximum level of $11,125,000 in 1994 and $10,950,000 in 1995. As a result
of funding the rabbi trust and based on past seasonal borrowing needs, it is
anticipated that NEPSCO could require short-term borrowing in the $25 million
range after such funding."
Paragraph seven of Item 1 is hereby amended to read in its entirety as
follows:
"Neither NEES nor any subsidiary has an ownership interest in an exempt
wholesale generator ("EWG") or foreign utility company ("FUCO") as defined in
Sections 32 and 33 of the Act. Additionally, neither New England Electric
System nor any subsidiary is a party to, or has any rights under, a service,
sales, or construction agreement with an EWG or a FUCO. Monies from the
borrowings hereunder shall not be used, directly or indirectly, to invest in,
or otherwise acquire an interest in the business of, any EWGs or FUCOs."
Item 6(a) is hereby amended by supplying the following exhibit:
Exhibit F Opinion of Counsel
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SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, each undersigned company has duly caused this Amendment No. 2 to its
Form U-1 Application/Declaration (Commission's File No. 70-8679) to be signed
on its behalf, as indicated, by the undersigned officers thereunto duly
authorized by each such company.
NEW ENGLAND ELECTRIC SYSTEM
MASSACHUSETTS ELECTRIC COMPANY
NEW ENGLAND POWER COMPANY
NEW ENGLAND POWER SERVICE COMPANY
s/Michael E. Jesanis
By
Michael E. Jesanis, Treasurer
NARRAGANSETT ENERGY RESOURCES COMPANY
NEW ENGLAND ELECTRIC TRANSMISSION CORPORATION
NEW ENGLAND ENERGY INCORPORATED
NEW ENGLAND HYDRO-TRANSMISSION ELECTRIC COMPANY, INC.
NEW ENGLAND HYDRO-TRANSMISSION CORPORATION
s/John G. Cochrane
By
John G. Cochrane, Treasurer
GRANITE STATE ELECTRIC COMPANY
s/Howard W. McDowell
By
Howard W. McDowell, Treasurer
THE NARRAGANSETT ELECTRIC COMPANY
s/John G. Cochrane
By
John G. Cochrane, Assistant Treasurer
DATE: October 6, 1995
The name "New England Electric System" means the trustee or trustees for the
time being (as trustee or trustees but not personally) under an agreement and
declaration of trust dated January 2, 1926, as amended, which is hereby
referred to, and a copy of which as amended has been filed with the Secretary
of the Commonwealth of Massachusetts. Any agreement, obligation or liability
made, entered into or incurred by or on behalf of New England Electric System
binds only its trust estate, and no shareholder, director, trustee, officer or
agent thereof assumes or shall be held to any liability therefor.
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EXHIBIT INDEX
Exhibit No. Description Page
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F Opinion of Counsel Filed herewith
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Exhibit F
25 Research Drive, Westborough, Massachusetts 01582
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October 6, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: New England Electric System, et al.
File No. 70-8679
Dear Commissioner:
New England Electric System (NEES) and ten of its subsidiaries, Granite
State Electric Company (Granite), Massachusetts Electric Company (Mass.
Electric), The Narragansett Electric Company (Narragansett), Narragansett
Energy Resources Company (NERC), New England Electric Transmission Corporation
(NEET), New England Energy Incorporated (NEEI), New England Hydro-Transmission
Electric Company, Inc. (Mass. Hydro), New England Hydro-Transmission
Corporation (NH Hydro), New England Power Company (NEP), and New England Power
Service Company (NEPSCO) (collectively, the Participating Companies), filed an
Application/Declaration, dated August 25, 1995, on Form U-1 with your
Commission, regarding their participation in the NEES Money Pool (the Pool)
and short-term borrowings by certain of the Participating Companies from
November 1, 1995, to October 31, 1997.
Granite, Mass. Electric, Narragansett, NEET, Mass. Hydro, NH Hydro, NEP,
and NEPSCO (the Borrowing Companies) have requested authority to borrow from
banks and/or from the Pool and/or, in the cases of Mass. Electric,
Narragansett, and NEP, through dealers in commercial paper, from time to time
not to exceed the amounts listed below:
Granite $ 10,000,000.00
Mass. Electric $150,000,000.00
Narragansett $100,000,000.00
NEET $ 10,000,000.00
Mass. Hydro $ 25,000,000.00
NH Hydro $ 25,000,000.00
NEP $375,000,000.00
NEPSCO $ 25,000,000.00
Borrowings from banks will be evidenced by notes maturing in less than
one year from the date of issue. Borrowings from the Pool will be open
account advances, and no evidence of indebtedness will be prepared, unless a
lender so requests. In the cases of Mass. Electric, Narragansett, and NEP,
borrowings through commercial paper dealers will be evidenced by unsecured
promissory notes with maturities not exceeding 270 days.
Participating Companies other than the Borrowing Companies are
participants in the Pool; however, their participation is limited exclusively
to that of a lender of funds.
Corporate Authority
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The Participating Companies are duly organized in the states and
engaging in the types of business as described below:
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Name of State of
Company Organization Type of Business
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NEES Massachusetts Registered Holding Company
Granite New Hampshire Retail Electric Company
Mass. Electric Massachusetts Retail Electric Company
Narragansett Rhode Island Retail Electric Company
NERC Rhode Island Wholesale Electric Generating Company
NEET New Hampshire Electric Transmission Company
NEEI Massachusetts Oil and Gas Exploration Company
Mass. Hydro Massachusetts Electric Transmission Company
NH Hydro New Hampshire Electric Transmission Company
NEP Massachusetts Wholesale Electric Generation
and Transmission Company
NEPSCO Massachusetts Service Company
It is our opinion that (1) the Participating Companies have corporate
authority and have been duly authorized by their respective boards of
directors to participate in the Pool; (2) the Borrowing Companies have
corporate authority to make the proposed borrowings, and in the cases of Mass.
Electric, Narragansett, and NEP, to issue commercial paper, to the maximum
amounts as authorized by their respective board of directors; and (3) no
action by the stockholders of the Participating Companies is necessary for the
proposed transactions.
State Regulatory Approval
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1. New Hampshire
The New Hampshire Public Utilities Commission (NHPUC) has jurisdiction
over the proposed issuance of short-term promissory notes by Granite, NEET,
NEP, and NH Hydro. The NHPUC has authorized Granite, NEET, NEP, and NH Hydro
to incur short-term indebtedness in amounts outstanding at any one time not to
exceed $10 million for Granite, $10 million for NEET, $375 million for NEP,
and $25 million for NH Hydro (Order No. 19,848, dated June 6, 1990; Order No.
18,308 dated June 23, 1986, DF 86-149; Order No. 20,952 dated September 8,
1993, DF 93-152; Order No. 20,073 dated March 29, 1991, DF 91-008,
respectively).
2. Massachusetts
The Massachusetts Department of Public Utilities (MDPU) has jurisdiction
over the participation in the Pool as lenders by Mass. Electric, Mass. Hydro,
and NEP. The MDPU issued an order, dated January 18, 1989 (DPU 88-166),
authorizing Mass. Electric, Mass. Hydro, and NEP to participate in the Pool
under the current terms.
Other than the regulatory approvals described above, no other regulatory
approval from any state agency is necessary.
Other Limitations
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The respective board of directors of each Participating Company has
authorized the participation in the Pool and, in the cases of the Borrowing
Companies, the proposed borrowings to maximum amounts of: $12 million for
Granite; $150 million for Mass. Electric; $100 million for Narragansett; $10
million for NEET; $25 million for Mass. Hydro; $25 million for NH Hydro; $375
million for NEP; and $20 million for NEPSCO.
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The Note Agreements relating to Notes of Granite held by John Hancock
Mutual Life Insurance Company, Teachers Insurance and Annuity Association of
America, and Aid Association for Lutherans contain restrictions on Granite's
short-term borrowings.
The holders of the Cumulative Preferred Stock of Mass. Electric,
Narragansett, and NEP have each authorized unsecured indebtedness not in
excess of 20% of capitalization through September 30, 1998 for Mass. Electric,
September 30, 1998 for Narragansett, and November 1, 1998 for NEP.
We are advised that each of the above companies will be within their
respective limitations unless and until so authorized by their respective
boards of directors and, in the case of Granite its noteholders and, in the
cases of Mass. Electric, Narragansett, and NEP, by the holders of their
respective Cumulative Preferred Stock.
Based upon and subject to the foregoing and appropriate action by the
Securities and Exchange Commission under the Public Utility Holding Company
Act of 1935, it is our opinion that, in the event the proposed transactions
are consummated in accordance with the Statement on Form U-1, as amended:
(a) All state laws applicable to the proposed transactions will be
complied with;
(b) The Borrowing companies are validly organized and duly
existing; and any notes representing the borrowings, when duly
executed and delivered and when the consideration therefor has
been received, will be valid and binding obligations of the
respective company in accordance with the terms of the notes,
subject to laws of general application affecting the rights and
remedies of creditors;
(c) Each of the Participating Companies will legally acquire the
appropriate interest in any borrowing by other members of the
Pool; and
(d) The consummation of the proposed transactions will not violate
the legal rights of the holders of any securities issued by the
Participating Company concerned, or any associate company
thereof.
We hereby consent to the use of this opinion in connection with the
Statement of Form U-1, as amended, filed with your Commission with reference
to the proposed transactions.
Very truly yours,
s/Robert King Wulff
Robert King Wulff
Corporation Counsel
s/Kirk L. Ramsauer
Kirk L. Ramsauer
Assistant General Counsel
