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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 fourth 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 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 was completed as of
September 30, 1994. 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 December 31, 1994, $727,030 had not yet been billed in
accordance with the agreement ($275,770 included in Accounts
Receivable and $451,260 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 (DSM) Program. The consulting is taking place at NEES
and NEC facilities. Compensation recognized during the fourth
quarter was $15,658.
During the fourth quarter, NEERI conducted a one day training
seminar pursuant to a letter agreement with Tokyo Electric Power
Company. The seminar which was held at New England Electric
facilities, covered IPP Solicitation and contracting processes.
Compensation recognized during the fourth quarter was $5,000.
NEERI inspected the INDECK transmission line located in Turners
Falls, Massachusetts. The work was done pursuant to a letter
agreement which provides for billing upon completion of work.
Compensation recognized during the fourth quarter was $1,080.
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
fourth quarter was $422.
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NEERI provided 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 took place in Thailand and at New England Electric
facilities. The agreement provides for billing upon completion of
services. No compensation was recognized during the fourth
quarter.
Pursuant to a letter agreement with the World Bank, NEERI provided
a review of Power Contracting in the Moroccan utility industry.
The work took place at New England Electric Facilities. The
letter agreement provides for billing upon completion of work.
Compensation recognized during the fourth quarter was $5,500.
NEERI entered into a consulting services agreement with Northrop,
Devine & Tarbell, Inc. (ND&T) to provide transmission line
engineering services. The consulting is taking 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. No compensation was
recognized in the fourth quarter.
2. As of December 31, 1994, NEES had purchased 1,000 shares of NEERI
common stock and made subordinated loans totaling $1,474,000 to
NEERI.
3. As of December 31, 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 December 31, 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 at September 30, 1994 included 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 payment of interest and repayment of principal,
NEERI has 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: February 14, 1995
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A Balance Sheet at December 31, 1994 Filed
(Unaudited, subject to adjustment) herewith
B Statement of Income and Retained Filed
Deficit for twelve months ended herewith
December 31, 1994 (Unaudited,
subject to adjustment)
C Statement of Cash Flows for twelve Filed
months ended December 31, 1994 herewith
(Unaudited, subject to adjustment)
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Exhibit A
NEW ENGLAND ELECTRIC RESOURCES, INC.
Balance Sheet
December 31, 1994
(Unaudited, Subject to Adjustment)
ASSETS
- ------
Current assets:
Cash $ 48,647
Accounts receivable 328,685
Accounts receivable from associated companies 36,129
Tax benefit receivable 237,400
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Total current assets $ 650,861
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Deferred charges and other assets 451,260
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Total assets $1,102,121
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LIABILITIES AND PARENT COMPANY'S INVESTMENT
- -------------------------------------------
Current liabilities:
Accounts payable to associated companies $ 234,980
Accounts payable 15,597
Accrued taxes 17,895
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Total current liabilities $ 268,472
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Parent company's investment:
Common stock, par value $1 per share 1,000
Subordinated notes payable to parent 1,474,000
Paid-in capital
Retained deficit (641,351)
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Total parent company's investment $ 833,649
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Total current liabilities and parent company's investment $1,102,121
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Exhibit B
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Income and Retained Deficit
For the Twelve Months Ended December 31, 1994
(Unaudited, Subject to Adjustment)
INCOME
- ------
Services rendered to nonassociated companies $1,113,351
Miscellaneous income or loss (250,000)
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TOTAL INCOME $ 863,351
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EXPENSE
- -------
Outside services employed $1,543,724
Taxes other than income taxes 0
Income taxes (238,900)
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TOTAL EXPENSE $1,304,824
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NET INCOME OR (LOSS) $ (441,473)
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Retained earnings/(deficit) at beginning of period $ (199,878)
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Retained earnings/(deficit) at end of period $ (641,351)
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Exhibit C
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Cash Flows
For the Twelve Months Ended December 31, 1994
(Unaudited, Subject to Adjustment)
Operating Activities:
Net income/(loss) $ (441,473)
Adjustments to reconcile net loss to net cash provided
by operating activities:
(Increase)/decrease in tax benefit receivable (175,800)
(Increase)/decrease in accounts receivable (315,889)
Increase/(decrease) in accounts payable 141,596
Increase/(decrease) in accrued taxes 17,439
(Increase)/decrease in deferred charges and other assets (451,260)
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Net cash provided by operating activities $(1,225,387)
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Financing Activities:
Subordinated notes payable to parent-issues $ 1,209,000
Proceeds from common stock issued 0
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Net cash used in financing activities $ 1,209,000
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Net increase/(decrease) in cash and cash equivalents (16,387)
Cash and cash equivalents at beginning of period 65,034
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Cash and cash equivalents at end of period $ 48,647
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