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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 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 December 31, 1995, $426,190
had not yet been billed in accordance with the
agreement ($300,840 included in Accounts Receivable
and $125,350 included in Deferred Charges and Other
Assets).
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
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Hungary. $5,014.67 was recognized during the fourth
quarter.
NEERI entered into a consulting services agreement
with REBIS, Inc. to provide consulting services in
Walnut Creek, California and at New England Electric
facilities. The agreement, which expired at the end
of 1995, provided for monthly billing. No
compensation was recognized during the fourth quarter.
NEERI entered into a consulting services agreement
with an entity in the eastern part of the U.S. to
gather information on a multi-terminal transmission
interconnection in the northeastern part of the U.S.
The consulting took place at New England Electric
facilities. The agreement, which expired at the end
of 1995, provided for monthly billing. No
compensation was recognized during the fourth quarter.
NEERI entered into a consulting arrangement pursuant
to a letter agreement with a company in western Europe
to assist on a feasibility study for a transmission
interconnection for a non-affiliated electric utility
in western Europe. The consulting took place in
western Europe and at New England Electric facilities.
The arrangement provides for payment upon completion
of the work. The work was completed at the end of the
fourth quarter of 1995. No compensation was
recognized during the fourth quarter.
NEERI entered into a consulting services agreement
with Technology Assessment Group, Inc. (TAG) to
provide consulting services in connection with testing
and analysis of hydraulic turbine/generators at
locations requested by TAG. The agreement, which
remains in effect through December 31, 1996, provides
for monthly billing. No compensation was recognized
during the fourth quarter.
NEERI entered into a consulting services agreement
with a company located in Massachusetts (the company)
to develop a plan to assist the company with NOx
compliance. The consulting took place in
Massachusetts and at New England Electric facilities.
The agreement provides for monthly billing and expired
on January 3, 1996. $6,147.65 was recognized during
the fourth quarter.
NEERI entered into two consulting services agreements
with a Delaware company (the company) to provide
electrical construction, marketing, and other services
at locations requested by the company. Both contracts
provide for monthly billing. One contract expired on
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December 31, 1995 and the other expires on November 9,
1996. $2,985.19 was recognized during the fourth
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 will take place in the Pacific Rim and
at New England Electric facilities. The agreement
provides for monthly billing and is in effect until
the end of February, 1996. No compensation was
recognized during the fourth quarter.
2. As of December 31, 1995, NEES had purchased 1,000
shares of NEERI common stock and made subordinated
loans totaling $3,398,999 to NEERI.
3. As of December 31, 1995, NEERI employed no permanent
personnel.
4. As of December 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.
On May 23, 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 $55,262 during the fourth quarter
in research and development activities relating to an
environmental technology.
NEERI has expended approximately $556,991 during the
fourth quarter in connection with preliminary research
and development activities relating to potential
investments in exempt wholesale generators and foreign
utility companies. $296,336 was spent for potential
generation investments and $260,655 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: February 14, 1996
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A Balance Sheet at December 31, 1995 Filed
(Unaudited, subject to adjustment) herewith
B Statement of Income and Retained Filed
Deficit for twelve months ended herewith
December 31, 1995 (Unaudited,
subject to adjustment)
C Statement of Cash Flows for twelve Filed
months ended December 31, 1995 herewith
(Unaudited, subject to adjustment)
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Exhibit A
NEW ENGLAND ELECTRIC RESOURCES, INC.
Balance Sheet
December 31, 1995
(Unaudited, Subject to Adjustment)
ASSETS
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Current assets:
Cash $ 69,588
Accounts receivable 319,557
Tax benefit receivable 501,600
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Total current assets $ 890,745
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Investment in Separation Technologies, Inc.,
at cost 999,999
Deferred charges and other assets 125,350
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Total other assets $ 1,125,349
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Total assets $ 2,016,094
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LIABILITIES AND PARENT COMPANY'S INVESTMENT
- -------------------------------------------
Current liabilities:
Accounts payable to associated companies $ 11,707
Accounts payable 142,401
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Total current liabilities $ 154,108
Accumulated Deferred Income Taxes 175,500
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Total liabilities $ 329,608
Parent company's investment:
Common stock, par value $1 per share 1,000
Subordinated notes payable to parent 3,398,999
Paid-in capital 0
Retained deficit parent (1,713,513)
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Total parent company's investment $ 1,686,486
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Total liabilities and parent company's investment $ 2,016,094
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Exhibit B
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Income and Retained Deficit
For the Twelve Months Ended December 31, 1995
(Unaudited, Subject to Adjustment)
INCOME
- ------
Services rendered to nonassociated companies $ 97,120
Miscellaneous income or loss 0
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TOTAL INCOME $ 97,120
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EXPENSE
- -------
Outside services employed $ 1,895,625
Income taxes (901,842)
Deferred income taxes 175,500
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TOTAL EXPENSE $ 1,169,283
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NET INCOME OR (LOSS) $(1,072,163)
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Retained earnings/(deficit) at beginning
of period $ (641,350)
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Retained earnings/(deficit) at end of period $(1,713,513)
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Exhibit C
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Cash Flows
For the Twelve Months Ended December 31, 1995
(Unaudited, Subject to Adjustment)
Operating Activities:
Net income/(loss) $(1,072,163)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Deferred income taxes 175,500
(Increase)/decrease in tax benefit receivable (264,200)
(Increase)/decrease in accounts receivable 45,257
Increase/(decrease) in accounts payable (96,469)
Increase/(decrease) in accrued taxes (17,895)
(Increase)/decrease in deferred charges and
other assets 325,910
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Net cash provided by operating activities $ (904,060)
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Investing Activities:
Investment in Separation Technologies, Inc.,
at cost $ (999,999)
Financing Activities:
Subordinated notes payable to parent-issues $ 1,924,999
Proceeds from common stock issued 0
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Net cash used in financing activities $ 1,924,999
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Net increase/(decrease) in cash and cash
equivalents 20,941
Cash and cash equivalents at beginning of period 48,647
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Cash and cash equivalents at end of period $ 69,588
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