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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 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 March 31, 1996, $350,980 had not yet been billed in
accordance with the agreement ($300,840 included in
Accounts Receivable and $50,140 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
Hungary. No compensation was recognized during the
first quarter.
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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 provided for payment upon completion of
the work. The work was completed at the end of 1995.
$16,819.19 was recognized during the first 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
first 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
provided for monthly billing and expired on January 3,
1996. No compensation was recognized during the first
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
December 31, 1995 and the other expires on November 9,
1996. $7,166.28 was recognized during the first
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 provided
for monthly billing and was in effect until the end of
February, 1996. No compensation was recognized during
the first quarter.
NEERI entered into a consulting services agreement with
a company located in Massachusetts to provide emergency
construction services. Such services were provided in
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January, 1996 in Massachusetts. The agreement, which
expired in January, 1996, provided for payment upon
completion of the work. No compensation was recognized
during the first quarter.
NEERI entered into a consulting services agreement with
an educational institution located in Massachusetts to
provide construction services for the installation of a
radio tower. Such services will be provided in
Massachusetts. The agreement, which expires in
November, 1996, provides for milestone payment upon
completion of certain work. No compensation was
recognized during the first quarter.
2. As of March 31, 1996, NEES had purchased 1,000 shares
of NEERI common stock and made subordinated loans
totaling $4,198,999 to NEERI.
3. As of March 31, 1996, NEERI employed no permanent
personnel.
4. As of March 31, 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.
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 $1,097 during the first quarter in
research and development activities relating to an
environmental technology.
NEERI has expended approximately $706,158 during the
first quarter in connection with preliminary research
and development activities relating to potential
investments in exempt wholesale generators and foreign
utility companies. $343,080 was spent for potential
generation investments and $363,078 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: May 15, 1996
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A Balance Sheet at March 31, 1996 Filed
(Unaudited, subject to adjustment) herewith
B Statement of Income and Retained Filed
Deficit for twelve months ended herewith
March 31, 1996 (Unaudited,
subject to adjustment)
C Statement of Cash Flows for twelve Filed
months ended March 31, 1996 herewith
(Unaudited, subject to adjustment)
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Exhibit A
NEW ENGLAND ELECTRIC RESOURCES, INC.
Balance Sheet
March 31, 1996
(Unaudited, Subject to Adjustment)
ASSETS
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Current assets:
Cash $ 18,750
Accounts receivable 331,377
Accounts receivable from associated companies 772
Tax benefit receivable 805,772
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Total current assets $ 1,156,671
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Investment in Separation Technologies, Inc.,
at cost 999,999
Deferred charges and other assets 50,140
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Total other assets $ 1,050,139
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Total assets $ 2,206,810
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LIABILITIES AND PARENT COMPANY'S INVESTMENT
- -------------------------------------------
Current liabilities:
Accounts payable to associated companies $ 164,233
Accounts payable 20,741
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Total current liabilities $ 184,974
Accumulated deferred income taxes 144,300
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Total liabilities $ 329,274
Parent company's investment:
Common stock, par value $1 per share 1,000
Subordinated notes payable to parent 4,198,999
Paid-in capital 0
Retained deficit parent (2,322,463)
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Total parent company's investment $ 1,877,536
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Total liabilities and parent company's investment $ 2,206,810
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Exhibit B
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Income and Retained Deficit
For the Twelve Months Ended March 31, 1996
(Unaudited, Subject to Adjustment)
INCOME
- ------
Services rendered to nonassociated companies $ 94,888
Miscellaneous income or loss 0
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TOTAL INCOME $ 94,888
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EXPENSE
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Office Supplies and Expenses $ 98,096
Outside services employed 2,434,285
Income taxes (1,099,147)
Deferred income taxes 144,300
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TOTAL EXPENSE $ 1,577,534
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NET INCOME OR (LOSS) $(1,482,646)
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Retained earnings/(deficit) at beginning
of period $ (839,817)
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Retained earnings/(deficit) at end of period $(2,322,463)
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Exhibit C
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Cash Flows
For the Twelve Months Ended March 31, 1996
(Unaudited, Subject to Adjustment)
Operating Activities:
Net income/(loss) $(1,482,646)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Deferred income taxes 144,300
(Increase)/decrease in tax benefit receivable (461,505)
(Increase)/decrease in accounts receivable 27,547
Increase/(decrease) in accounts payable 28,402
Increase/(decrease) in accrued taxes (17,895)
(Increase)/decrease in deferred charges and
other assets 306,813
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Net cash provided by operating activities $ (1,454,984)
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Investing Activities:
Investment in Separation Technologies, Inc.,
at cost $ (999,999)
Financing Activities:
Subordinated notes payable to parent-issues $ 2,424,999
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Net cash used in financing activities $ 2,424,999
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Net increase/(decrease) in cash and cash
equivalents (29,984)
Cash and cash equivalents at beginning of period 48,734
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Cash and cash equivalents at end of period $ 18,750
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