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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 second 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 June 30, 1996, $275,770 had not yet been billed in
accordance with the agreement and is included in
Accounts Receivable.
NEERI entered into two agreements to provide technical
and marketing consulting services at locations
requested by the contracting parties. One agreement,
which remains in effect through December 31, 1996 and
provides for monthly billing, is with Technology
Assessment Group, Inc. The other agreement, which
provides for monthly billing and expires on November 9,
1996, is with a Delaware company. No compensation was
recognized under either contract during the second
quarter.
NEERI entered into a consulting services agreement with
a non-affiliated transmission company in the Pacific
Rim to provide on-site installation services and
training for upgraded data acquisition systems. The
consulting took place in the Pacific Rim and at New
England Electric facilities. The agreement, which
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expired in February, 1996, provided for monthly
billing. $20,496.99 was recognized during the second
quarter.
NEERI entered into four consulting services agreements
to provide construction services at job sites in
Massachusetts, Rhode Island, and Pennsylvania. Two of
the contracting parties are entities located in
Massachusetts and the other two are located in
Washington and California. Standard payment terms are
included under these contracts. Three of the
agreements expire in 1996 and the fourth one in 1998
upon completion of the specified work. $160,859.07 was
recognized during the second quarter.
NEERI provided technical services to three entities
located in Massachusetts. Such services were provided
in Massachusetts and at New England Electric
facilities. Payment for the services was received upon
completion of the work. The work was completed for all
three parties in the second quarter and $2,500.00 was
recognized.
NEERI entered into an agreement with a company located
in Minnesota to work as a subcontractor for electric
meter retrofit services. The work shall take place in
Massachusetts. The agreement provides for monthly
billing and will expire upon completion of the
specified work. No compensation was recognized during
the second quarter.
2. As of June 30, 1996, NEES had purchased 1,000 shares of
NEERI common stock and made subordinated loans totaling
$5,173,999 to NEERI.
3. As of June 30, 1996, NEERI employed no permanent
personnel.
4. As of June 30, 1996, 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.
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.
NEERI has expended $51,829 during the second quarter in
research and development activities relating to an
environmental technology.
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NEERI has expended approximately $1,042,194 during the
second quarter in connection with preliminary research
and development activities relating to potential
investments in exempt wholesale generators and foreign
utility companies. $583,174 was spent for potential
generation investments and $459,020 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: August 14, 1996
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A Balance Sheet at June 30, 1996 Filed
(Unaudited, subject to adjustment) herewith
B Statement of Income and Retained Filed
Deficit for twelve months ended herewith
June 30, 1996 (Unaudited,
subject to adjustment)
C Statement of Cash Flows for twelve Filed
months ended June 30, 1996 herewith
(Unaudited, subject to adjustment)
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Exhibit A
NEW ENGLAND ELECTRIC RESOURCES, INC.
Balance Sheet
June 30, 1996
(Unaudited, Subject to Adjustment)
ASSETS
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Current assets:
Cash $ 93,710
Accounts receivable 486,597
Accounts receivable from associated companies 4,099
Tax benefit receivable 632,187
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Total current assets $ 1,216,593
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Investment in Separation Technologies, Inc.,
at cost 999,999
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Total other assets $ 999,999
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Total assets $ 2,216,592
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LIABILITIES AND PARENT COMPANY'S INVESTMENT
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Current liabilities:
Accounts payable to associated companies $ 168,011
Accounts payable 11,727
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Total current liabilities $ 179,738
Accumulated deferred income taxes 113,100
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Total liabilities $ 292,838
Parent company's investment:
Common stock, par value $1 per share 1,000
Subordinated notes payable to parent 5,173,999
Paid-in capital 0
Accumulated deficit (3,251,245)
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Total parent company's investment $ 1,923,754
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Total liabilities and parent company's investment $ 2,216,592
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Exhibit B
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Income and Accumulated Deficit
For the Twelve Months Ended June 30, 1996
(Unaudited, Subject to Adjustment)
INCOME
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Services rendered to nonassociated companies $ 248,996
Miscellaneous income or loss 0
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TOTAL INCOME $ 248,996
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EXPENSE
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Office Supplies and Expenses $ 115,893
Outside services employed 3,546,685
Income taxes (1,416,456)
Deferred income taxes 113,100
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TOTAL EXPENSE $ 2,359,222
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NET INCOME/(LOSS) $(2,110,226)
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Accumulated deficit at beginning of period $ (1,141,019)
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Accumulated deficit at end of period $(3,251,245)
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Exhibit C
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Cash Flows
For the Twelve Months Ended June 30, 1996
(Unaudited, Subject to Adjustment)
Operating Activities:
Net loss $(2,110,226)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Deferred income taxes 113,100
(Increase)/decrease in tax benefit receivable (128,813)
(Increase)/decrease in accounts receivable (132,613)
Increase/(decrease) in accounts payable 141,126
Increase/(decrease) in accrued taxes (17,853)
(Increase)/decrease in deferred charges and
other assets 300,840
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Net cash provided by operating activities $ (1,834,439)
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Investing Activities:
Investment in Separation Technologies, Inc.,
at cost $ 0
Financing Activities:
Subordinated notes payable to parent-issues $ 1,875,000
Proceeds from common stock issued 0
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Net cash used in financing activities $ 1,875,000
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Net increase/(decrease) in cash and cash
equivalents 40,561
Cash and cash equivalents at beginning of period 53,149
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Cash and cash equivalents at end of period $ 93,710
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