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File No. 70-8803
CERTIFICATE OF NOTIFICATION
(Rule 24)
SECURITIES AND EXCHANGE COMMISSION
BY
NEES Energy, Inc.
In accordance with the order of the Securities and Exchange
Commission dated May 23, 1996, the following is a report for the
fourth quarter of 1996:
1. NEES Energy, Inc. (NEES Energy), a Massachusetts
Corporation,was formed on June 14, 1996. The corporation was
capitalized on August 9, 1996 when one thousand shares of NEES
Energy common stock were issued and sold to New England
Electric System (NEES).
2. As of December 31, 1996 NEES had purchased 1,000 shares of NEES
Energy common stock and made subordinated loans totaling
$4,505,000 to NEES Energy.
3. As of December 31, 1996 NEES Energy had no permanent personnel
and during the fourth quarter of 1996 there were no individuals
assigned on a substantially full-time basis.
4. During the fourth quarter of 1996 NEES Energy had no kilowatt
hours sold or marketed.
5. In December 1996, following SEC approval of a joint venture
with a subsidiary of Eastern Enterprises (HCAR No. 35-26633),
NEES Energy invested in AllEnergy Marketing Company,
L.L.C.(AllEnergy), a limited liability corporation. AllEnergy
is engaged in the business of marketing and selling energy
commodities and energy related services. NEES Energy will
invest, from time to time amounts not to exceed fifty million
dollars in AllEnergy. The investment during the fourth
quarter of 1996 was $1,716,268.
6. Attached in Exhibits A through C are a balance sheet as of
December 31, 1996, income statements and statements of cash
flow for the quarter and twelve months ended December 31, 1996.
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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. 70-8803) to be signed on its
behalf by the undersigned officer thereunto duly authorized.
By: s/John G. Cochrane
___________________________
John G. Cochrane
Treasurer
Date: February 28, 1997
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A Balance Sheet at December 31, 1996 Filed
(Unaudited, subject to adjustment) herewith
B1 Statement of Income and Accumulated Deficit Filed
For the Quarter ended December 31, 1996 herewith
(Unaudited, Subject to Adjustment)
C1 Statement of Cash Flows Filed
For the Quarter Ended December 31, 1996 herewith
(Unaudited, Subject to Adjustment)
B2 Statement of Income and Accumulated Deficit Filed
For the Twelve Months ended December 31, 1996 herewith
(Unaudited, Subject to Adjustment)
C2 Statement of Cash Flows Filed
For the Twelve Months December 31, 1996 herewith
(Unaudited, Subject to Adjustment)
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Exhibit A
NEES Energy, Inc.
Balance Sheet
As of December 31, 1996
(Unaudited, Subject to Adjustment)
ASSETS
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Equity investment in AllEnergy
Marketing Co., L.L.C. $1,716,268
Current assets:
Cash 291,519
Accounts receivable from associated companies 2,033
Tax benefit receivable 1,017,000
----------
Total current assets 1,310,552
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Accumulated deferred income taxes 300
----------
Total assets $3,027,120
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LIABILITIES AND PARENT COMPANY'S INVESTMENT
- -------------------------------------------
Current liabilities:
Accounts payable $ 18,731
Accounts payable to associated companies 11,360
Parent Company's Investment:
Common stock, par value $1 per share 1,000
Subordinated notes payable to parent 4,505,000
Accumulated deficit (1,508,971)
-----------
2,997,029
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Total liabilities and parent company's investment $3,027,120
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Exhibit B1
NEES ENERGY, INC.
Statement of Income and Accumulated Deficit
For the Quarter ended December 31, 1996
(Unaudited, Subject to Adjustment)
INCOME
Equity in income/(loss) of AllEnergy
Marketing Co., L.L.C. $(1,533,772)
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EXPENSES
Other operating expenses 251,541
Income tax (757,965)
-----------
Total Operating Expenses (506,424)
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Net income/(loss) (1,027,348)
Retained earnings at beginning of period (481,623)
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Accumulated deficit at end of period $(1,508,971)
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Exhibit C1
NEES Energy, Inc.
Statement of Cash Flows
For the Quarter Ended December 31, 1996
(Unaudited, Subject to Adjustment)
Operating activities:
Net income/(loss) ($1,027,348)
Adjustments to reconcile net income/(loss) to
net cash provided by operating activities:
Increase in tax benefit receivable (757,665)
Increase in undistributed income/(loss) in
subsidiary 1,533,732
Increase in deferred income taxes (300)
Decrease in accounts receivable 439
Decrease in accounts payable (377,416)
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Net cash used in operating activities (628,558)
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Investing activities:
Investment in AllEnergy Marketing Co.,L.L.C. (3,250,000)
-----------
Net cash used in investing activities (3,250,000)
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Financing Activities:
Subordinated notes payable to parent-issues 4,125,000
-----------
Net cash provided by financing activities 4,125,000
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Net increase in cash and cash equivalents 246,442
Cash and cash equivalents at beginning of period 45,077
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Cash and cash equivalents at end of period $291,519
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Exhibit B2
NEES ENERGY, INC.
Statement of Income and Accumulated Deficit
For the Twelve Months ended December 31, 1996
(Unaudited, Subject to Adjustment)
INCOME
Equity in income/(loss) of AllEnergy
Marketing Co., L.L.C. (1,533,772)
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EXPENSES
Other operating expenses 992,499
Federal income tax (1,017,300)
-----------
(24,801)
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Net income/(loss) (1,508,971)
Retained earnings at beginning of period 0
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Accumulated deficit at end of period ($1,508,971)
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Exhibit C2
NEES Energy, INC.
Statement of Cash Flows
For the Twelve Months December 31, 1996
(Unaudited, Subject to Adjustment)
Operating Activities:
Net Income/(Loss) ($1,508,971)
Adjustments to reconcile net income/(loss) to
net cash provided by operating activities:
Increase in undistributed income/(loss) in
subsidiary 1,533,732
Increase in deferred income taxes (300)
Increase in tax benefit receivable (1,017,000)
Increase in accounts receivable (2,033)
Increase in accounts payable 30,091
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Net cash used in operating activities (964,481)
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Investing activities:
Investment in AllEnergy Marketing Co.,L.L.C. (3,250,000)
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Net cash used in investing activities (3,250,000)
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Financing Activities:
Issue of common stock 1,000
Subordinated notes payable to parent-issues 4,505,000
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Net cash provided by financing activities 4,506,000
Net increase in cash and cash equivalents 291,519
Cash and cash equivalents at beginning of period 0
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Cash and cash equivalents at end of period $291,519
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