<PAGE>
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 third
quarter of 1997:
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 September 30, 1997 NEES had purchased 1,000 shares of
NEES Energy common stock and made subordinated loans
totaling$10,780,000 to NEES Energy.
3. As of September 30, 1997 NEES Energy had no permanent personnel
and during the third quarter of 1997 there were no individuals
assigned on a substantially full-time basis.
4. During the third quarter of 1997 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 net investment during the third
quarter of 1997 was $1,225,000.
6. Attached in Exhibits A through C are a balance sheet as of
September 30, 1997, income statements and statements of cash
flow for the quarter and twelve months ended September 30,
1997.
<PAGE>
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: November 24, 1997
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A Balance Sheet at September 30, 1997 Filed
(Unaudited, subject to adjustment) herewith
B1 Statement of Income and Accumulated Deficit Filed
For the Quarter ended September 30, 1997 herewith
(Unaudited, Subject to Adjustment)
B2 Statement of Cash Flows Filed
For the Quarter Ended September 30, 1997 herewith
(Unaudited, Subject to Adjustment)
C1 Statement of Income and Accumulated Deficit Filed
For the Twelve Months ended September 30, 1997 herewith
(Unaudited, Subject to Adjustment)
C2 Statement of Cash Flows Filed
For the Twelve Months September 30, 1997 herewith
(Unaudited, Subject to Adjustment)
<PAGE>
Exhibit A
NEES Energy, Inc.
Balance Sheet (Thousands of Dollars)
As of September 30, 1997
(Unaudited, Subject to Adjustment)
ASSETS
- ------
Equity investment in AllEnergy
Marketing Co., L.L.C. $5,504
Current assets:
Cash 79
Prepaid taxes 175
------
Total current assets 254
------
Total assets $5,758
======
LIABILITIES AND PARENT COMPANY'S INVESTMENT
- -------------------------------------------
Current liabilities
Accounts payable $ 3
Accounts payable to associated companies 6
------
Total current liabilities 9
Parent Company's Investment:
Common stock, par value $1 per share 1
Subordinated notes payable to parent 10,780
Accumulated deficit (5,032)
------
5,749
------
Total liabilities and parent company's investment $5,758
======
<PAGE>
Exhibit B1
NEES ENERGY, INC.
Statement of Income and Accumulated Deficit (Thousands of Dollars)
For the Quarter ended September 30, 1997
(Unaudited, Subject to Adjustment)
INCOME
Equity in income/(loss) of AllEnergy
Marketing Co., L.L.C. $(2,275)
=======
EXPENSES
Other operating expenses 51
Income tax (814)
-------
Total Operating Expenses (763)
-------
Net income/(loss) (1,512)
Retained earnings at beginning of period (3,520)
-------
Accumulated deficit at end of period $(5,032)
=======
<PAGE>
Exhibit B2
NEES Energy, Inc.
Statement of Cash Flows (Thousands of Dollars)
For the Quarter Ended September 30, 1997
(Unaudited, Subject to Adjustment)
Operating activities:
Net income/(loss) $ (1,512)
Adjustments to reconcile net income/(loss) to
net cash provided by operating activities:
Undistributed income/(loss) in subsidiary 2,275
(Increase)decrease in prepaid taxes 551
Increase(decrease) in accounts payable (13)
------
Net cash provided by(used in) operating activities 1,301
------
Investing activities:
Investment in AllEnergy Marketing Co.,L.L.C. (3,500)
-------
Net cash used in investing activities (3,500)
-------
Financing Activities:
Subordinated notes payable to parent-issues 2,250
-------
Net cash provided by financing activities 2,250
-------
Net increase(decrease) in cash and cash equivalents 51
Cash and cash equivalents at beginning of period 28
-------
Cash and cash equivalents at end of period $ 79
=======
<PAGE>
Exhibit C1
NEES ENERGY, INC.
Statement of Income and Accumulated Deficit (Thousands of Dollars)
For the Twelve Months ended September 30, 1997
(Unaudited, Subject to Adjustment)
INCOME
Equity in income/(loss) of AllEnergy
Marketing Co., L.L.C. $(6,746)
=======
EXPENSES
Other operating expenses 432
Interest expense 27
Federal income tax (2,655)
-------
(2,196)
-------
Net income/(loss) (4,550)
Retained earnings at beginning of period (482)
-------
Accumulated deficit at end of period $(5,032)
=======
<PAGE>
Exhibit C2
NEES Energy, INC.
Statement of Cash Flows (Thousands of Dollars)
For the Twelve Months September 30, 1997
(Unaudited, Subject to Adjustment)
Operating Activities:
Net Income/(Loss) ($4,550)
Adjustments to reconcile net income/(loss) to
net cash provided by operating activities:
Undistributed income/(loss) in subsidiary 6,746
(Increase)decrease in accounts receivable 3
(Increase)decrease in prepaid taxes 84
Increase(decrease) in accounts payable (399)
-------
Net cash provided by(used in) operating activities 1,884
-------
Investing activities:
Investment in AllEnergy Marketing Co.,L.L.C. (12,250)
-------
Net cash used in investing activities (12,250)
-------
Financing Activities:
Subordinated notes payable to parent-issues 10,400
-------
Net cash provided by financing activities 10,400
Net increase(Decrease) in cash and cash equivalents 34
Cash and cash equivalents at beginning of period 45
-------
Cash and cash equivalents at end of period $ 79
=======
