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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 third quarter of 1996:
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 September 30, 1996, $200,560 had not yet been billed
in accordance with the agreement and is included in
Accounts Receivable.
NEERI entered into an agreement with a company located
in Minnesota to provide ongoing work as a subcontractor
for electric meter retrofit services. The work took
place in Massachusetts. $98,563 was recognized in the
third quarter.
NEERI entered into three agreements to provide
electrical consulting and technical related services.
One agreement was with Technology Assessment Group,
Inc. The other agreements are with a Delaware company.
The three agreements will expire in 1996. No income
was recognized under these agreements in the third
quarter.
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NEERI entered into nine consulting agreements to
provide construction services at job sites in
Massachusetts, Rhode Island, West Virginia, Minnesota,
and Pennsylvania. Standard payment terms are included
in these contracts. Five of the agreements expired
during the third quarter of 1996, one will expire in
the fourth quarter of 1996, two will expire in 1997,
and one will expire in 1998. In total, $130,739 was
recognized as income under these contracts during the
third quarter.
2. As of September 30, 1996, NEES had purchased 1,000
shares of NEERI common stock and made subordinated
loans totaling $6,748,999 to NEERI.
3. As of September 30, 1996, NEERI employed no permanent
personnel.
4. As of September 30, 1996, NEERI had not purchased or
received from associated 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.
In May, 1995 NEERI invested $999,999 in Separation
Technologies, Inc. (STI). This investment is in the
form of 153,846 shares of 6% cumulative convertible
preferred stock.
In July, 1996 NEERI invested $475,001 in Monitoring
Technologies, Inc. This investment is in the form of
271,429 shares of Series E convertible preferred stock.
NEERI has expended $69,276 during the third quarter in
research and development activities relating to an
environmental technology.
NEERI has expended approximately $993,927 during the
third quarter in connection with preliminary research
and development activities relating to potential
investments in exempt wholesale generators and foreign
utility companies. $480,921 was spent for potential
generation investments and $513,006 for potential
transmission investments.
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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: November 13, 1996
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A Balance Sheet at September 30, 1996 Filed
(Unaudited, subject to adjustment) herewith
B Statement of Income and Accumulated Filed
Deficit for twelve months ended herewith
September 30, 1996 (Unaudited,
subject to adjustment)
C Statement of Cash Flows for twelve Filed
months ended September 30, 1996 herewith
(Unaudited, subject to adjustment)
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Exhibit A
NEW ENGLAND ELECTRIC RESOURCES, INC.
Balance Sheet
September 30, 1996
(Unaudited, Subject to Adjustment)
ASSETS
- ------
Current assets:
Cash $ 487,810
Accounts receivable 336,868
Accounts receivable from associated companies 3,021
Tax benefit receivable 454,042
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Total current assets 1,281,741
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Investment in Separation Technologies, Inc.,
at cost 999,999
Investment in Monitoring Technologies, Inc.,
at cost 475,001
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Total other assets 1,475,001
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Total assets $ 2,756,741
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LIABILITIES AND PARENT COMPANY'S INVESTMENT
- -------------------------------------------
Current liabilities:
Accounts payable to associated companies $ 79,650
Accounts payable 19,844
Accrued taxes 137,898
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Total current liabilities 237,392
Accumulated deferred income taxes 81,900
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Total liabilities 319,292
Parent company's investment:
Common stock, par value $1 per share 1,000
Subordinated notes payable to parent 6,748,999
Paid-in capital 0
Accumulated deficit (4,312,550)
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Total parent company's investment 2,437,449
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Total liabilities and parent company's
investment $ 2,756,741
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Exhibit B
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Income and Accumulated Deficit
For the Twelve Months Ended September 30, 1996
(Unaudited, Subject to Adjustment)
INCOME
- ------
Services rendered to nonassociated companies $ 472,524
Miscellaneous income or loss 0
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Total Income $ 472,524
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EXPENSE
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Administrative and General Expenses $ 5,203,308
Income taxes (1,689,010)
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Total Expenses 3,514,298
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Net Income/(Loss) $(3,041,774)
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Accumulated deficit at beginning of period (1,270,776)
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Accumulated deficit at end of period $(4,312,550)
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Exhibit C
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Cash Flows
For the Twelve Months Ended September 30, 1996
(Unaudited, Subject to Adjustment)
Operating Activities:
Net loss $(3,041,774)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Deferred income taxes (217,500)
(Increase)/decrease in tax benefit receivable (95,590)
(Increase)/decrease in accounts receivable (40,368)
Increase/(decrease) in accounts payable 48,900
Increase/(decrease) in accrued taxes 137,898
(Increase)/decrease in deferred charges and
other assets 225,630
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Net cash provided by operating activities $(2,982,804)
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Investing Activities:
Investment in Monitoring Technologies, Inc.,
at cost $ (475,001)
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Net cash used in investing activities $ (475,001)
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Financing Activities:
Subordinated notes payable to parent-issues $ 3,775,000
Proceeds from common stock issued 0
-----------
Net cash used in financing activities $ 3,775,000
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Net increase/(decrease) in cash and cash
equivalents $ 317,195
Cash and cash equivalents at beginning of period 170,615
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Cash and cash equivalents at end of period $ 487,810
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