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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 first quarter of
1995:
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 provided 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 took place at NEC and New England Electric facilities
pursuant to a letter agreement and has been completed. The total
compensation under the agreement was recognized during the third
quarter of 1994. 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 March 31, 1995,
$651,820 had not yet been billed in accordance with the agreement
($275,770 included in Accounts Receivable and $376,050 included in
Deferred Charges and Other Assets).
In addition, NEERI has entered into a consulting services
agreement with NEC to evaluate and refine their Demand Side
Management Program. The consulting is taking place at NEES and
NEC facilities. Compensation recognized during the first quarter
was $26,217.
NEERI undertook consulting activities for the Hungarian
Electricity Board pursuant to Agreements with the Hungarian
Electricity Board and the United States Energy Association. The
consulting activities took place at New England Electric
facilities and in Hungary. No compensation was recognized during
the first quarter.
Pursuant to a consulting services agreement with Northrop, Devine
& Tarbell, Inc., which expired in March, 1995, NEERI provided
transmission line engineering services. The consulting took place
at New England Electric facilities. No compensation was
recognized in the first quarter.
NEERI entered into a consulting services agreement with REBIS,
Inc. to provide consulting and programming services in Walnut
Creek, California and at New England Electric facilities. The
agreement, which shall be in effect until the end of 1995,
provides for monthly billing. No compensation was recognized
during the first quarter.
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NEERI entered into a consulting engineering services agreement
with International Resources Group Ltd. to write a technical paper
on independent transmission projects. The consulting took place
at New England Electric facilities. The agreement, which shall be
in effect until the end of April, 1995, provides for payment upon
completion of the work. No compensation was recognized during the
first quarter.
NEERI entered into a consulting services agreement with Washington
International Energy Group to gather information on the Quebec-New
England High Voltage Direct Current Multi-terminal
Interconnection. The consulting took place at New England
Electric facilities. The agreement, which shall be in effect
until December 31, 1995, provides for monthly billing. No
compensation was recognized during the first quarter.
NEERI entered into a consulting services agreement with the
Electricity Corporation of New Zealand (ECNZ) (i) to review and
provide feedback on an asset management plan, and (ii) to research
and report on what information U.S. and other international
utilities disclose or make available to the public. The
consulting took place at ECNZ offices and at New England Electric
facilities. The agreement provides for monthly billing. No
compensation was recognized during the first quarter.
2. As of March 31, 1995, NEES had purchased 1,000 shares of NEERI
common stock and made subordinated loans totaling $1,774,000 to
NEERI.
3. As of March 31, 1995, 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 March 31, 1995, 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.
NEERI had invested $250,000 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 no payment had been received. Due to the
uncertainty involved in the payment of interest and repayment of
principal, NEERI had written off the investment in the fourth
quarter of 1994. QPS is seeking additional financing to bring its
product to market. Although NEERI has authority to invest up to
an additional $100,000 in QPS, NEERI has decided not to make an
additional investment at this time.
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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: May 11, 1995
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A Balance Sheet at March 31, 1995 Filed
(Unaudited, subject to adjustment) herewith
B Statement of Income and Retained Filed
Deficit for twelve months ended herewith
March 31, 1995 (Unaudited,
subject to adjustment)
C Statement of Cash Flows for twelve Filed
months ended March 31, 1995 herewith
(Unaudited, subject to adjustment)
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Exhibit A
NEW ENGLAND ELECTRIC RESOURCES, INC.
Balance Sheet
March 31, 1995
(Unaudited, Subject to Adjustment)
ASSETS
- ------
Current assets:
Cash $ 48,734
Accounts receivable 323,567
Accounts receivable from associated companies 36,129
Tax benefit receivable 344,267
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Total current assets $ 752,697
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Deferred charges and other assets 356,953
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Total assets $1,109,650
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LIABILITIES AND PARENT COMPANY'S INVESTMENT
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Current liabilities:
Accounts payable to associated companies $ 155,631
Accounts payable 941
Accrued taxes 17,895
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Total current liabilities $ 174,467
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Parent company's investment:
Common stock, par value $1 per share 1,000
Subordinated notes payable to parent 1,774,000
Paid-in capital
Retained deficit (839,817)
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Total parent company's investment $ 935,183
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Total current liabilities and parent company's investment $1,109,650
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Exhibit B
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Income and Retained Deficit
For the Twelve Months Ended March 31, 1995
(Unaudited, Subject to Adjustment)
INCOME
- ------
Services rendered to nonassociated companies $1,105,181
Miscellaneous income or loss (250,000)
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TOTAL INCOME $ 855,181
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EXPENSE
- -------
Outside services employed $1,813,405
Taxes other than income taxes 0
Income taxes (336,148)
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TOTAL EXPENSE $1,477,257
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NET INCOME OR (LOSS) $ (622,076)
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Retained earnings/(deficit) at beginning of period $ (217,741)
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Retained earnings/(deficit) at end of period $ (839,817)
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Exhibit C
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Cash Flows
For the Twelve Months Ended March 31, 1995
(Unaudited, Subject to Adjustment)
Operating Activities:
Net income/(loss) $ (622,076)
Adjustments to reconcile net loss to net cash provided
by operating activities:
(Increase)/decrease in tax benefit receivable (273,048)
(Increase)/decrease in accounts receivable (326,934)
Increase/(decrease) in accounts payable 118,580
Increase/(decrease) in accrued taxes 17,439
(Increase)/decrease in deferred charges and other assets (356,953)
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Net cash provided by operating activities $(1,442,992)
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Financing Activities:
Subordinated notes payable to parent-issues $ 1,459,000
Proceeds from common stock issued 0
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Net cash used in financing activities $ 1,459,000
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Net increase/(decrease) in cash and cash equivalents 16,008
Cash and cash equivalents at beginning of period 32,726
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Cash and cash equivalents at end of period $ 48,734
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