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File Nos. 70-7950/70-8555
CERTIFICATE OF NOTIFICATION
(Rule 24)
SECURITIES AND EXCHANGE COMMISSION
BY
NEW ENGLAND ELECTRIC RESOURCES, INC. (NEERI)
In accordance with the orders of the Securities and Exchange
Commission dated September 4, 1992 and May 15, 1995, the
following is a report for the first quarter of 1997:
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 agreement provides for billing over a
three year period at $25,070 per month. As of March
31, 1997, $50,140 had not yet been billed in accordance
with a letter agreement and is included in Accounts
Receivable.
NEERI entered into an agreement with a company located
in Pennsylvania to provide ongoing work as a
subcontractor for electric meter retrofit services.
The work took place in Massachusetts. $34,811 was
recognized in the first quarter.
NEERI is a party to four agreements to provide
construction related services at job sites in
Massachusetts, West Virginia, Washington and New
Hampshire. A total of $129,955 was recognized under
these contracts in the first quarter of 1997.
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2. As of March 31, 1997, NEES had purchased 1,000 shares
of NEERI common stock and made subordinated loans
totaling $9,148,999 to NEERI.
3. As of March 31, 1997, NEERI employed no permanent
personnel.
4. As of March 31, 1997, NEERI had not purchased or
received from associated companies of NEES any
intellectual property.
5. In July, 1996 NEERI International, a wholly-owned
subsidiary of NEERI, was formed under the laws of the
Cayman Islands. NEERI owns two shares of NEERI
International, which will serve as a Project Parent for
prospective EWG/FUCO investments under File No.
70-8783. NEERI International has no employees. In the
quarter ending March 31, 1997, NEERI International had
no revenues, but had $207,798 in expenses related to
FUCO project development.
6. Attached in Exhibits A through C are the consolidated
financial statements of NEERI and NEERI International.
These statements include a balance sheet, twelve months
ending income statement, and statement of cash flow.
All significant intercompany transactions have been
eliminated.
In May, 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 also provides maintenance
services for STI equipment on an as needed basis, for
which $47,948 was recognized in the first quarter of
1997.
In July, 1996 NEERI invested $475,001 in Monitoring
Technologies, Inc. This investment is in the form of
271,429 shares of Series E convertible preferred stock.
NEERI has expended $41,484 during the first quarter in
research and development activities relating to an
environmental technology.
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NEERI expended approximately $996,015 during the first
quarter in connection with preliminary research and
development activities relating to potential
investments in exempt wholesale generators and foreign
utility companies. $1,595 was spent for potential
generation investments and $994,420 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 Nos. 70-7950 and
70-8555) 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 29, 1997
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A Balance Sheet at March 31, 1997 Filed
(Unaudited, subject to adjustment) herewith
B Statement of Income and Accumulated Filed
Deficit for twelve months ended herewith
March 31, 1997 (Unaudited,
subject to adjustment)
C Statement of Cash Flows for twelve Filed
months ended March 31, 1997 herewith
(Unaudited, subject to adjustment)
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Exhibit A
NEW ENGLAND ELECTRIC RESOURCES, INC.
Balance Sheet
March 31, 1997
(Unaudited, Subject to Adjustment)
(thousands of dollars)
ASSETS
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Current assets:
Cash $ 43
Accounts receivable 717
Accounts receivable from associated companies 86
Prepayments 793
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Total current assets 1,639
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Investment in Separation Technologies, Inc.,
at cost 1,000
Investment in Monitoring Technologies, Inc.,
at cost 475
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Total other assets 1,475
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Total assets $ 3,114
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LIABILITIES AND PARENT COMPANY'S INVESTMENT
- -------------------------------------------
Current liabilities:
Accounts payable to associated companies $ 62
Accounts payable 318
Tax collections payable 1
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Total current liabilities 381
Accumulated deferred income taxes 17
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Total liabilities 398
Parent company's investment:
Common stock, par value $1 per share 1
Subordinated notes payable to parent 9,149
Accumulated deficit (6,434)
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Total parent company's investment 2,716
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Total liabilities and parent company's
investment $ 3,114
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Exhibit B
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Income and Accumulated Deficit
For the Twelve Months Ended March 31, 1997
(Unaudited, Subject to Adjustment)
(thousands of dollars)
INCOME
- ------
Services rendered to nonassociated companies $ 1,568
-----------
Total Income $ 1,568
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EXPENSE
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Administrative and General Expenses $ 8,232
Income taxes (2,552)
Total Expenses 5,679
Net Income/(Loss) $(4,112)
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Accumulated deficit at beginning of period (2,322)
Accumulated deficit at end of period $(6,434)
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Exhibit C
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Cash Flows
For the Twelve Months Ended March 31, 1997
(Unaudited, Subject to Adjustment)
(thousands of dollars)
Operating Activities:
Net loss $(4,111)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Deferred income taxes (127)
(Increase)/decrease in tax benefit receivable 12
(Increase)/decrease in accounts receivable 471
Increase/(decrease) in accounts payable 195
Increase/(decrease) in tax collection payable 1
(Increase)/decrease in deferred charges and
other assets 50
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Net cash used in operating activities $(4,451)
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Investing Activities:
Investment in Monitoring Technologies, Inc. $ (475)
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Net cash used in investing activities $ (475)
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Financing Activities:
Subordinated notes payable to parent-issues $4,950
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Net cash provided by financing activities $4,950
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Net increase/(decrease) in cash and cash
equivalents $ 24
Cash and cash equivalents at beginning of period 19
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Cash and cash equivalents at end of period $ 43
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