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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of the
Securities Exchange Act of 1934
Date of Earliest Event Reported: May 30, 1996
NEW ENGLAND ELECTRIC SYSTEM
(exact name of registrant as specified in charter)
Massachusetts 1-3446 04-1663060
(state or other (Commission (I.R.S. Employer
jurisdiction of File No.) Identification No.)
incorporation)
25 Research Drive, Westborough, Massachusetts 01582
(Address of principal executive offices)
(508) 389-2000
(Registrant's telephone number, including area code)
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Item 5. Other Events
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As previously reported, in February 1996, legislation was
introduced in the Rhode Island House of Representatives that
would restructure the electric utility industry in Rhode Island.
The legislation would impact The Narragansett Electric Company
(Narragansett), a subsidiary of New England Electric System, and
Narragansett's wholesale power supplier, New England Power
Company (NEP). On May 30, 1996, the Corporations Committee of
the Rhode Island House of Representatives approved an amended
form of the proposed legislation.
The original bill would have allowed electric customers in
Rhode Island to choose their power supplier over a four-year
period beginning in 1998. Under the original bill, utilities
would be allowed to recover the cost of past generation
commitments through a transition access charge on utility
transmission and distribution wires which would be set at three
cents per kilowatthour through 2000 and was expected to decline
thereafter. Unrecovered commitments would earn a return on
equity of 1 percentage point over the rate on long-term "BBB"
rated utility bonds.
The major changes approved by the Corporations Committee
would (i) accelerate the timetable for introducing retail
competition in Rhode Island (with 10% of customers having access
on July 1, 1997, another 10% on January 1, 1998, and the balance
of customers on July 1, 1998), (ii) lower the initial access
charge from 3 cents per kilowatthour to 2.8 cents per
kilowatthour, and (iii) require that the aggregate amount of
transition access charges recoverable from customers be reduced
by the fair market value of utilities' non-nuclear generating
assets. The value of such generating assets would be determined
by leasing, selling, spinning off or otherwise disposing of at
least a 15 percent interest in such generating facilities. For
NEP, the remaining unrecovered commitments during the recovery
period would earn a return on equity of 11 percent. Utilities
would be required to file by July 1, 1997 a plan for complying
with these market valuation provisions.
The Rhode Island House of Representatives expects to vote on
the amended legislation in the near future. Consideration by
the Rhode Island Senate is expected to be completed by this
summer.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this Current Report on
Form 8-K to be signed on its behalf by the undersigned thereunto
duly authorized.
NEW ENGLAND ELECTRIC SYSTEM
s/Alfred D. Houston
By
Alfred D. Houston
Executive Vice President and
Chief Financial Officer
Date: May 31, 1996
The name "New England Electric System" means the trustee or
trustees for the time being (as trustee or trustees but not
personally) under an agreement and declaration of trust dated
January 2, 1926, as amended, which is hereby referred to, and a
copy of which as amended has been filed with the Secretary of The
Commonwealth of Massachusetts. Any agreement, obligation or
liability made, entered into or incurred by or on behalf of New
England Electric System binds only its trust estate, and no
shareholder, director, trustee, officer or agent thereof assumes
or shall be held to any liability therefor.
