<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-9C-3
QUARTERLY REPORT PURSUANT TO RULE 58
FOR THE QUARTER ENDED
JUNE 30, 1997
NEW ENGLAND ELECTRIC SYSTEM
25 Research Drive, Westborough, MA 01582
<PAGE>
<TABLE>
<CAPTION>
NEW ENGLAND ELECTRIC SYSTEM
For The Quarter Ended June 30, 1997
ITEM 1 - ORGANIZATION CHART
Percentage
Energy or State of voting
Name of Reporting Gas-Related Date of of Securities
Company Company Organization Organization Held Nature of Business
- ----------------- ----------- ------------ ------------ ----------- --------------------------------------
<S> <C> <C> <C> <C> <C>
New England Energy, Energy 11/20/72 MA 100 New England Energy, Inc. is engaged
Inc./New England in various activities relating to fuel
Electric System supply for the System. These
activities primarily include
participation (principally through a
partnership with a nonaffiliated oil
company) in domestic oil and gas
exploration, development, and production
and the sale to NEP of fuel purchased in
the open market.
Granite State Energy, Energy 04/22/96 NH 100 Granite State Energy provides a range
Inc./New England of energy and related services,
Electric System including but not limited to sales of
electric energy, audits, power quality,
fuel supply, repair, maintenance,
construction, design, engineering, and
consulting.
AllEnergy Marketing Energy 09/18/96 MA 50 AllEnergy's principal purpose is to sell
Co., L.L.C./NEES energy and provide a range of energy-
Energy, Inc./New related services, including but not
England Electric limited to, marketing, brokering and
System sales of energy, audits, fuel supply,
repair, maintenance, construction,
operation, design, engineering, and
consulting, to customers in the
competitive market in New England and
New York.
Texas Liquids, Energy 12/19/96 MA 44.5 Texas Liquids, L.L.C. engages in
L.L.C./All Energy purchasing, marketing, selling,
Marketing Co., L.L.C./ and distributing energy
NEES Energy, Inc./ commodities and related products
New England Electric and services.
System
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEW ENGLAND ELECTRIC SYSTEM
For The Quarter Ended June 30, 1997
Item 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS
(expressed in millions, rounded to hundred thousands of dollars)
Type of Principal Issue Cost Person to Collateral Consideration
Security Amount of or of Whom Security Given with Received for
Company Issuing Security Issued Security Renewal Capital Was Issued Security Each Security
- ------------------------ -------- --------- ------- ------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEW ENGLAND ELECTRIC SYSTEM
For The Quarter Ended June 30, 1997 (cont'd.)
Item 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS
(expressed in millions, rounded to hundred thousands of dollars)
Company Company Amount of
Contributing Receiving Capital
Capital Capital Contribution
------------ --------- ------------
<S> <C> <C> <C>
NEES Trust Granite State Energy *
NEES Energy, Inc. AllEnergy Marketing Co., LLC 2.0
<FN>
* Amounts are less than $100,000
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEW ENGLAND ELECTRIC SYSTEM
For The Quarter Ended June 30, 1997
Item 3 - ASSOCIATE TRANSACTIONS (expressed in millions, rounded to hundred thousands of dollars)
Part I - Transactions performed by reporting companies on behalf of associate companies
Direct Indirect Total
Reporting Company Associate Company Types of Services Costs Costs Cost of Amount
Rendering Services Receiving Services Rendered Charged Charged Capital Billed
------------------ ------------------ ----------------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
New England Energy, Inc. New England Power Co. Miscellaneous (1) (1) (1)
Part II - Transactions performed by associate companies on behalf of reporting companies
Direct Indirect Total
Associate Company Reporting Company Types of Services Costs Costs Cost of Amount
Rendering Services Receiving Services Rendered Charged Charged Capital Billed
------------------ ------------------ ----------------- ------- ------- ------- ------
Massachusetts Electric Granite State Energy, Miscellaneous (4) (1) (1) (1)
Company Inc.
New England Power Co. New England Energy, Inc. Miscellaneous (1) (1) (1)
New England Power Co. New England Energy, Inc. Fuel Purchase $11.8 $11.8
New England Power Co. AllEnergy Marketing Power purchase (1) (1) (1)
Co., LLC
New England Power Co. Granite State Energy, Power purchase (1) (1) (1)
Inc.
New England Power New England Energy, Inc. Info Services 0.1 (1) $0.1
Service Co.
New England Power New England Energy, Inc. Miscellaneous (2) $0.1 $0.1
Service Co.
New England Power Granite State Energy, Miscellaneous (3) (1) (1) (1)
Service Co. Inc.
New England Power AllEnergy Marketing Sales Planning $0.1 $0.1
Service Co. Co., LLC
New England Power AllEnergy Marketing
Service Co. Co., LLC Miscellaneous $0.1 $0.1
<FN>
(1) Amounts are below $100,000
(2) Represents 10 types of services with each type of service totaling less than $100,000.
(3) Represents 15 types of services with each type of service totaling less than $100,000.
(4) The customer service portion of the service agreement between Granite State Energy Company and New England Power
Service Company has been assigned to Massachusetts Electric Company, in accordance with its terms.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEW ENGLAND ELECTRIC SYSTEM
For The Quarter ended June 30, 1997
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
(expressed in millions rounded to hundred thousands of dollars)
<S> <C> <C>
Investment in energy-related companies:
Total consolidated capitalization as of
June 30, 1997 (1) $3,636.5 line 1
Total capitalization multiplied by 15 percent 545.5 line 2
(line 1 multiplied by 0.15)
Greater of $50 million or line 2 545.5 line 3
Total current aggregate investment:
(categorized by major line of energy-
related business)
Power marketing and other 2.0
-------
Total current aggregate investment 2.0 line 4
---
Difference between the greater of $50 million
or 15 percent of capitalization and the total
aggregate investment of the registered holding
company system
(lines 3 less line 4) $543.5 line 5
(1) Consolidated capitalization includes total common equity, cumulative
preferred stock, long-term debt (including long-term debt due within
one year), and short-term debt.
</TABLE>
<PAGE>
NEW ENGLAND ELECTRIC SYSTEM
For The Quarter Ended June 30, 1997
ITEM 5 - OTHER INVESTMENTS
Reason for
Major Line Other Other Difference
or Energy-Related Investment in Investment in Other
Business Last U-9C-3 Report in U-9C-3 Report Investment
- ----------------- ------------------ ---------------- ----------
N/A
<PAGE>
NEW ENGLAND ELECTRIC SYSTEM
For The Quarter Ended June 30, 1997
ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS
(A) Exhibits
10(a) Service Contract between New England Power Service Company
and New England Energy Incorporated dated December 31, 1996
10(b)(i) Service Contract between New England Power Service Company
and Granite State Energy, Inc. dated December 31, 1996
10(b)(ii) Service Agreement between New England Power Service Company
and Granite State Energy, Inc. dated July 1, 1996
10(b)(iii) Confidential Information Non-Disclosure Agreement between
New England Power Company and Granite State Energy, Inc.
dated May 21, 1996
10(b)(iv) Confirmation Letter between New England Power Company and
Granite State Energy, Inc. dated May 21, 1996
10(b)(v) Confirmation Letter between New England Power Company and
Granite State Energy, Inc. dated July 11, 1996
10(c) Confirmation Letter between New England Power Company and
NEES Energy, Inc. dated August 5, 1996
10(d)(i) Service Agreement by and between New England Power Service
Company and AllEnergy Marketing Company, LLC dated January
1, 1997
10(d)(ii) Capital and Liquidity Support Agreement among Eastern
Enterprises, AllEnergy Marketing Company, Inc., New England
Electric System, NEES Energy, Inc., and AllEnergy Marketing
Company, LLC dated May 27, 1997
10(d)(iii) Service Contract between New England Power Service Company
and AllEnergy Marketing Company, LLC. dated December 31,
1996
10(e) New England Power Company and New England Energy
Incorporated Fuel Purchase Contract dated July 26, 1979 and
Amendment dated August 26, 1981 (Exhibit 10(f)(iii) to NEES'
1981 Form 10-K, File No. 1-3446); Amendment dated March 26,
1985, and Amendment effective January 1, 1984 (Exhibit
10(e)(iii) to NEES' 1985 Form 10-K, File No. 1-3446);
Amendment dated as of April 28, 1989 (Exhibit 10(e)(iii) to
NEES' 1989 Form 10-K, File No. 1-3446.)
A certificate stating that a copy of the report for the previous quarter
has been filed with interested state commissions is not being provided with
this filing. This requirement is not applicable for the current quarter's
report since this is the first ever filing of this report by New England
Electric System.
<PAGE>
(B) Financial Statements
1-A New England Electric System Consolidated Income Statement
for the quarter and six months ended June 30, 1997
1-B New England Electric System Consolidated Balance Sheet As of
June 30, 1997
2-A New England Energy, Inc. Income Statement for the quarter
and six months ended June 30, 1997
2-B New England Energy, Inc. Balance Sheet as of June 30, 1997
3-A Granite State Energy, Inc. Income Statement for the quarter
and six months ended June 30, 1997
3-B Granite State Energy, Inc. Balance Sheet as of June 30, 1997
4-A AllEnergy Marketing Company, LLC Consolidated Income
Statement for the quarter and six months ended June 30, 1997
4-B AllEnergy Marketing Company, LLC Consolidated Balance Sheet
as of June 30, 1997
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this report to be signed
on its behalf by the undersigned officer thereunto duly authorized.
NEW ENGLAND ELECTRIC SYSTEM
s/Michael E. Jesanis
_______________________________
Michael E. Jesanis, Treasurer
August 28, 1997
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.
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
---------- ------------------------------------ --------------
10(a) Service Contract between New Filed Herewith
England Power Service Company and
New England Energy Incorporated dated
December 31, 1996
10(b)(i) Service Contract between New England Filed Herewith
Power Service Company and Granite
State Energy, Inc. dated December 31,
1996
10(b)(ii) Service Agreement between New England Filed Herewith
Power Service Company and Granite
State Energy, Inc. dated July 1, 1996
10(b)(iii) Confidential Information Non-Disclosure Filed Herewith
Agreement between New England Power
Company and Granite State Energy, Inc.
dated May 21, 1996
10(b)(iv) Confirmation Letter between New England Filed Herewith
Power Company and Granite State Energy,
Inc. dated May 21, 1996
10(b)(v) Confirmation Letter between New England Filed Herewith
Power Company and Granite State Energy,
Inc. dated July 11, 1996
10(c) Confirmation Letter between New England Filed Herewith
Power Company and NEES Energy, Inc.
dated August 5, 1996
10(d)(i) Service Agreement by and between New Filed Herewith
England Power Service Company and
AllEnergy Marketing Company, LLC dated
January 1, 1997
10(d)(ii) Capital and Liquidity Support Agreement Filed Herewith
among Eastern Enterprises, AllEnergy
Marketing Company, Inc., New England
Electric System, NEES Energy, Inc.,
and AllEnergy Marketing Company, LLC
dated May 29, 1997
10(d)(iii) Service Contract between New England Filed Herewith
Power Service Company and AllEnergy
Marketing Company, LLC. dated
December 31, 1996
10(e) New England Power Company and New Incorporated
England Energy Incorporated Fuel by Reference
Purchase Contract dated July 26,
1979 and Amendments thereto
<PAGE>
Financial
Statement
No. Description Page
--------- ------------------------------------- --------------
1-A New England Electric System Filed Herewith
Consolidated Income Statement for the
quarter and six months ended June 30,
1997
1-B New England Electric System Filed Herewith
Consolidated Balance Sheet As of
June 30, 1997
2-A New England Energy, Inc. Income Filed Herewith
Statement for the quarter and six
months ended June 30, 1997
2-B New England Energy, Inc. Balance Filed Herewith
Sheet as of June 30, 1997
3-A Granite State Energy, Inc. Income Filed Herewith
Statement for the quarter and six
months ended June 30, 1997
3-B Granite State Energy, Inc. Balance Filed Herewith
Sheet as of June 30, 1997
4-A AllEnergy Marketing Company, LLC Filed Herewith
Consolidated Income Statement for
the quarter and six months ended
June 30, 1997
4-B AllEnergy Marketing Company, LLC Filed Herewith
Consolidated Balance Sheet as of
June 30, 1997
<PAGE>
Exhibit 10(a)
NEW ENGLAND POWER SERVICE COMPANY
25 Research Drive
Westborough, Massachusetts 01582
SERVICE CONTRACT
December 31, 1996
New England Energy Incorporated
25 Research Drive
Westborough, MA 01582
New England Power Service Company (hereinafter called
Service Company) is a company engaged primarily in the
rendering of services to companies in the New England Electric
System holding-company system. The organization, conduct of
business and method of cost allocation of the Service Company
are designed to meet the requirements of Section 13 under the
Public Utility Holding Company Act of 1935 and the rules and
regulations promulgated thereunder to the end that services
performed by the Service Company for said associate companies
will be rendered to them at cost, fairly and equitably
allocated. Services will be rendered by Service Company only
upon receipt from time to time of specific or general request
therefor. Said requests may always be modified or cancelled by
you at your discretion. The parties hereto agree as follows:
1. The Service Company agrees to furnish you upon the
terms and conditions herein set forth such of the services
described in Schedule 1 hereto as you may from time to time
request. Service Company will also furnish, if available, such
services not described in Schedule 1 as you may request.
Notwithstanding the foregoing the Service Company shall not
furnish under this agreement any engineering, construction, or
maintenance services for a nuclear generating plant.
2. The Service Company has and will maintain a staff
trained and experienced in the engineering, construction,
operation, maintenance and management of public utility
properties. In addition to the services of its own staff,
Service Company will, after consultation with you concerning
services to be rendered pursuant to your request, arrange for
services of non-affiliated experts, consultants, accountants
and attorneys.
3. All of the services rendered under this agreement
will be at actual cost thereof. Direct charges will be made
for services where a direct allocation of cost is possible.
The methods of determining such costs and the allocation
thereof are set forth in Schedule II hereto. These methods are
reviewed annually and more frequently, if appropriate. Such
methods may be modified or changed by Service Company without
the necessity of an amendment of this agreement provided that
in each instance all services rendered hereunder will be at
actual cost thereof, fairly and equitably allocated, and all in
accordance with the requirements of the Public Utility Holding
Company Act of 1935 and the rules and regulations and orders
thereunder. You will be advised from time to time of any
material changes in such methods.
<PAGE>
-2-
4. Bills will be rendered during the first week of each
month covering amounts due for the month calculated on an
estimated basis using the actual expenses incurred during the
previous month. This estimated amount would be adjusted on the
bill to be rendered during the first week of the following
month. Any amount remaining unpaid after fifteen days
following receipt of the bill shall bear interest thereon from
the date of the bill at an annual rate of 2% above the lowest
interest rate then being charged by the First National Bank of
Boston on 90 day commercial loans. Services will be performed
hereunder for not more than one year commencing January 1,
1997, and continuing through December 31, 1997, unless
terminated at an earlier date by either party giving thirty
days' written notice to the other of such termination at the
end of any month.
5. This agreement will be subject to termination or
modification at any time to the extent its performance may
conflict with any federal or state law or any rule, regulation
or order of a federal or state regulatory body having
jurisdiction. The agreement shall be subject to approval of
any federal or state regulatory body whose approval is a legal
prerequisite to its execution and delivery or performance.
NEW ENGLAND POWER SERVICE COMPANY
s/Michael E. Jesanis
By:
Treasurer
Accepted , 19
New England Energy Incorporated
By s/Alfred D. Houston
<PAGE>
SCHEDULE I
Description of Services Available from
New England Power Service Company
Accounting:
The keeping of accounts and collateral activities,
including billing, payroll and customer relations;
preparation of reports and preservation of records.
Auditing:
Periodic audits by Service Company auditors and the
furnishing of reports and recommendations.
Construction:
Labor and equipment for construction and maintenance of
electric properties. Assistance in obtaining and
supervision of, non-affiliated contractors.
Corporate and Corporate Records:
Cooperation with attorneys, officers and special counsel
of associate companies on corporate matters, financing,
regulation, contracts, claims and litigation. Services
in connection with stockholders' and directors' meetings
and keeping of corporate records.
Customers Services:
Services re policy development and functional direction
of field business service departments, including rate
application and training, plus specialized residential,
commercial and industrial services.
Emergencies:
Assistance in emergency maintenance and restoration of
utility service and in mobilization of personnel and
equipment.
Employee Relations:
Service re labor relations, personnel, wage and salary
schedules, employee training and safety and medical
programs.
Engineering:
Civil, mechanical, electrical, and other engineering
services; technical advice, design, installation,
supervision, planning, research, testing, operation of
communications, including microwave, and operation and
maintenance of specialized technical equipment.
Executive and Administrative:
Consultation and services in management and
administration of all aspects of electric utility
business.
Information Systems:
Maintenance and operation of information systems and
equipment for accounting, engineering, administration and
other functions.
<PAGE>
Insurance:
Development, placement and administration of insurance
coverages and employee benefit programs, including group
insurance and retirement annuities; property inspections
and valuations for insurance.
Intellectual Property:
Filing applications, owning, licensing, and holding
licenses for copyrights, patents, servicemarks, and
trademarks for associated companies.
Properties:
Services re acquisition and disposition of properties;
cooperation with attorneys of associate companies in
title examination and conveyancing; maintenance of
property records; and making property inventories and
valuations.
Power Supply:
Planning and other services for supply of electric power,
and negotiation of contracts therefore.
Public Information and Relations:
Services re information to and relations with the public,
including customers, security holders, employees,
financial analysts, rating agencies and investment firms.
Purchasing and Stores:
Services re purchase and storing of materials, supplies
and equipment.
Rates:
Review, design, interpretation, analysis and other
services re rates and special contracts for sale of
electricity.
Regulation:
Analysis of laws, rules and regulations and
recommendations for action hereunder; handling of matters
with regulatory and governmental authorities; preparation
of applications and registrations.
Systems:
Establishing of accounting and other procedures and
standards.
Taxes:
Service re federal, state and municipal taxes,
preparation of returns and handling of audits and claims
by taxing authorities.
Treasury and Statistical:
Services re financing of associate companies, both short
and long-term, determination of capital needs, and
preparation of financial and statistical reports.
<PAGE>
SCHEDULE II
Determination of Cost of Service and Allocation Thereof
Cost of service will be determined in accordance with the
Public Utility Holding Company Act of 1935 and the rules and
regulations and orders thereunder, and will include all costs of
doing business incurred by the Service Company.
Records will be maintained for each Department and Division
of the Service Company in order to accumulate all costs of doing
business and to determine the cost of service. These costs will
include wages and salaries of employees and related expenses such
as insurance, taxes, pensions and other employee welfare
expenses, and rent, light, heat, telephone, supplies, and other
housekeeping costs. In addition, records will be maintained of
general administrative expenses, which will include the costs of
operating the Service Company as a corporate entity.
Charges for services rendered and related expenses and non-
personal expenses (e.g., use of automotive equipment, etc.) will
be billed directly to the serviced companies, either individually
or, when the services performed are for a group for a group of
companies, by means of an equitable allocation formula. Each
formula will have an appropriate basis such as customers, meters,
employees, plant investments, inventories or operating revenues.
Charges for services will be determined from the time
sheets of employees and will be computed on the basis of each
employee's hourly rate plus a percentage factor to cover related
expenses and general administrative expenses. Records of such
related expenses and general administrative expenses will be
maintained and subjected to periodic review.
Out-of-pocket expenses which are incurred for the serviced
companies will be billed at cost. Charges for non-personal
expenses, such as for use of automobiles, trucks and heavy
equipment, will normally be computed on the basis of costs per
hour or per mile.
<PAGE>
Exhibit 10(b)(i)
NEW ENGLAND POWER SERVICE COMPANY
25 Research Drive
Westborough, Massachusetts 01582
SERVICE CONTRACT
December 31, 1996
Granite State Energy, Inc.
4 Park Street
Concord, NH 03302
New England Power Service Company (hereinafter called
Service Company) is a company engaged primarily in the rendering
of services to companies in the New England Electric System
holding-company system. The organization, conduct of business
and method of cost allocation of the Service Company are designed
to meet the requirements of Section 13 under the Public Utility
Holding Company Act of 1935 and the rules and regulations
promulgated thereunder to the end that services performed by the
Service Company for said associate companies will be rendered to
them at cost, fairly and equitably allocated. Services will be
rendered by Service Company only upon receipt from time to time
of specific or general request therefor. Said requests may
always be modified or cancelled by you at your discretion. The
parties hereto agree as follows:
1. The Service Company agrees to furnish you upon the
terms and conditions herein set forth such of the services
described in Schedule 1 hereto as you may from time to time
request. Service Company will also furnish, if available, such
services not described in Schedule 1 as you may request.
Notwithstanding the foregoing the Service Company shall not
furnish under this agreement any engineering, construction, or
maintenance services for a nuclear generating plant.
2. The Service Company has and will maintain a staff
trained and experienced in the engineering, construction,
operation, maintenance and management of public utility
properties. In addition to the services of its own staff,
Service Company will, after consultation with you concerning
services to be rendered pursuant to your request, arrange for
services of non-affiliated experts, consultants, accountants and
attorneys.
3. All of the services rendered under this agreement will
be at actual cost thereof. Direct charges will be made for
services where a direct allocation of cost is possible. The
methods of determining such costs and the allocation thereof are
set forth in Schedule II hereto. These methods are reviewed
annually and more frequently, if appropriate. Such methods may
be modified or changed by Service Company without the necessity
of an amendment of this agreement provided that in each instance
all services rendered hereunder will be at actual cost thereof,
fairly and equitably allocated, and all in accordance with the
requirements of the Public Utility Holding Company Act of 1935
and the rules and regulations and orders thereunder. You will be
advised from time to time of any material changes in such
methods.
<PAGE>
-2-
4. Bills will be rendered during the first week of each
month covering amounts due for the month calculated on an
estimated basis using the actual expenses incurred during the
previous month. This estimated amount would be adjusted on the
bill to be rendered during the first week of the following month.
Any amount remaining unpaid after fifteen days following receipt
of the bill shall bear interest thereon from the date of the bill
at an annual rate of 2% above the lowest interest rate then being
charged by the First National Bank of Boston on 90 day commercial
loans. Services will be performed hereunder for not more than
one year commencing January 1, 1997, and continuing through
December 31, 1997, unless terminated at an earlier date by either
party giving thirty days' written notice to the other of such
termination at the end of any month.
5. This agreement will be subject to termination or
modification at any time to the extent its performance may
conflict with any federal or state law or any rule, regulation or
order of a federal or state regulatory body having jurisdiction.
The agreement shall be subject to approval of any federal or
state regulatory body whose approval is a legal prerequisite to
its execution and delivery or performance.
NEW ENGLAND POWER SERVICE COMPANY
s/Michael E. Jesanis
By:
Treasurer
Accepted 1/7/97
By: s/John H. Dickson
<PAGE>
SCHEDULE I
Description of Services Available from
New England Power Service Company
Accounting:
The keeping of accounts and collateral activities, including
billing, payroll and customer relations; preparation of
reports and preservation of records.
Auditing:
Periodic audits by Service Company auditors and the
furnishing of reports and recommendations.
Construction:
Labor and equipment for construction and maintenance of
electric properties. Assistance in obtaining and
supervision of, non-affiliated contractors.
Corporate and Corporate Records:
Cooperation with attorneys, officers and special counsel of
associate companies on corporate matters, financing,
regulation, contracts, claims and litigation. Services in
connection with stockholders' and directors' meetings and
keeping of corporate records.
Customers Services:
Services re policy development and functional direction of
field business service departments, including rate
application and training, plus specialized residential,
commercial and industrial services.
Emergencies:
Assistance in emergency maintenance and restoration of
utility service and in mobilization of personnel and
equipment.
Employee Relations:
Service re labor relations, personnel, wage and salary
schedules, employee training and safety and medical
programs.
Engineering:
Civil, mechanical, electrical, and other engineering
services; technical advice, design, installation,
supervision, planning, research, testing, operation of
communications, including microwave, and operation and
maintenance of specialized technical equipment.
Executive and Administrative:
Consultation and services in management and administration
of all aspects of electric utility business.
Information Systems:
Maintenance and operation of information systems and
equipment for accounting, engineering, administration and
other functions.
<PAGE>
Insurance:
Development, placement and administration of insurance
coverages and employee benefit programs, including group
insurance and retirement annuities; property inspections and
valuations for insurance.
Intellectual Property:
Filing applications, owning, licensing, and holding licenses
for copyrights, patents, servicemarks, and trademarks for
associated companies.
Properties:
Services re acquisition and disposition of properties;
cooperation with attorneys of associate companies in title
examination and conveyancing; maintenance of property
records; and making property inventories and valuations.
Power Supply:
Planning and other services for supply of electric power,
and negotiation of contracts therefore.
Public Information and Relations:
Services re information to and relations with the public,
including customers, security holders, employees, financial
analysts, rating agencies and investment firms.
Purchasing and Stores:
Services re purchase and storing of materials, supplies and
equipment.
Rates:
Review, design, interpretation, analysis and other services
re rates and special contracts for sale of electricity.
Regulation:
Analysis of laws, rules and regulations and recommendations
for action hereunder; handling of matters with regulatory
and governmental authorities; preparation of applications
and registrations.
Systems:
Establishing of accounting and other procedures and
standards.
Taxes:
Service re federal, state and municipal taxes, preparation
of returns and handling of audits and claims by taxing
authorities.
Treasury and Statistical:
Services re financing of associate companies, both short and
long-term, determination of capital needs, and preparation
of financial and statistical reports.
<PAGE>
SCHEDULE II
Determination of Cost of Service and Allocation Thereof
Cost of service will be determined in accordance with the
Public Utility Holding Company Act of 1935 and the rules and
regulations and orders thereunder, and will include all costs of
doing business incurred by the Service Company.
Records will be maintained for each Department and Division
of the Service Company in order to accumulate all costs of doing
business and to determine the cost of service. These costs will
include wages and salaries of employees and related expenses such
as insurance, taxes, pensions and other employee welfare
expenses, and rent, light, heat, telephone, supplies, and other
housekeeping costs. In addition, records will be maintained of
general administrative expenses, which will include the costs of
operating the Service Company as a corporate entity.
Charges for services rendered and related expenses and non-
personal expenses (e.g., use of automotive equipment, etc.) will
be billed directly to the serviced companies, either individually
or, when the services performed are for a group for a group of
companies, by means of an equitable allocation formula. Each
formula will have an appropriate basis such as customers, meters,
employees, plant investments, inventories or operating revenues.
Charges for services will be determined from the time sheets
of employees and will be computed on the basis of each employee's
hourly rate plus a percentage factor to cover related expenses
and general administrative expenses. Records of such related
expenses and general administrative expenses will be maintained
and subjected to periodic review.
Out-of-pocket expenses which are incurred for the serviced
companies will be billed at cost. Charges for non-personal
expenses, such as for use of automobiles, trucks and heavy
equipment, will normally be computed on the basis of costs per
hour or per mile.
<PAGE>
Exhibit 10(b)(ii)
SERVICE AGREEMENT
BY AND BETWEEN
NEW ENGLAND POWER SERVICE COMPANY
AND
Granite State Energy
--------------------
This Agreement is made and entered into as of the 1st day of
July, 1996 (this "Agreement") by and between Granite State
Energy, Inc. ("Client" or "GSEnergy") having offices at 25
Research Drive Westborough, Massachusetts and NEW ENGLAND POWER
SERVICE COMPANY ("NEPSCo") having offices at 25 Research Drive
Westborough, Massachusetts.
Section 1: Description of Services
NEPSCo will provide Client with billing related services
described in Exhibit A and certain customer services (the
"Services"). The descriptions of the Services to be provided the
client are incorporated (Exhibit A) herein and made a part
hereof.
Section 2: Extent of Agreement
NEPSCo shall exercise all reasonable skill, care and
diligence in carrying out the Services, shall carry out its
duties in accordance with recognized professional standards and
shall provide everything reasonably necessary to complete the
Services in accordance with the requirements of this Agreement.
Section 3: Term
This Agreement shall be in effect as of the date hereof and
through the final billing cycle for each Customer (as defined in
Exhibit A) following termination of the NH Pilot (as defined in
Exhibit A), unless earlier terminated by the parties as provided
herein. Either party may terminate this Agreement by providing 90
days written notice. Notwithstanding anything to the contrary
herein, the obligation to pay the other party money due under
this Agreement shall survive expiration and termination of this
Agreement. Further, the obligations of the parties in this
Agreement shall remain in effect to the extent necessary to
comply herewith.
Section 4: Payment Terms
Payment terms are set forth in Exhibit B, attached hereto
and made a part hereof.
<PAGE>
2
Section 5: Limitation of Liability
In no event shall either party be liable to the other party
or to any other third party for any indirect, reliance, multiple,
incidental, special, consequential, or punitive damages connected
with or arising out of the Agreement, including, but not limited
to, from NEPSCo's performance of any Services hereunder, whether
or not either party was advised of the possibility of such
damages. In no event shall NEPSCo be liable in contract, tort,
NHRSA 358-A, or otherwise (including negligence, warranty, or
strict liability) for amounts in excess of the total of all
amounts earned by NEPSCo in connection with this Agreement,
whether or not NEPSCo was advised of the possibility of such
damages.
Section 6: Warranties
NEPSCo and its affiliates, successors and assigns make no
WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT
NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE with respect to the Services.
Section 7: Indemnification
To the fullest extent permitted by law, Client shall
indemnify and hold harmless, and at NEPSCo's option, defend
NEPSCo and its affiliates, and their officers, directors,
employees, agents, servants, and assigns (collectively, "NEPSCO
Parties") from and against any and all claims and/or liability
for losses, expenses, damage to property, injury to or death of
any person, including, but not limited to, Client's employees,
NEPSCo's and its affiliates' employees, subcontractors and
subcontractors' employees, or any other liability incurred by
NEPSCo or its affiliates, including expenses, legal or otherwise,
caused wholly or in part by any act or omission, negligent or
otherwise of Client, its officers, directors, employees, agents,
servants, or assigns arising out of this Agreement, except to the
extent caused by any act or omission, negligent or otherwise, of
the NEPSCo Parties.
Section 8: Assignment and Subcontracting
NEPSCo shall not assign or subcontract the Services or any
part thereof without Client's written consent, which Client shall
not unreasonably withhold.
Section 9: Independent Contractor
NEPSCo is, and shall at all times remain, an independent
contractor.
Section 10: Entire Agreement
This Agreement constitutes the entire Agreement between the
parties with respect to the Services and all previous
representations, either written or oral, are hereby annulled and
<PAGE>
3
superseded. No modification of any of the provisions of this
Agreement shall be binding unless agreed to in writing and signed
by a duly authorized representative of each party hereto.
Section 11: No Third Party Beneficiaries
The work performed by NEPSCo under this Agreement is for
Client's use and benefit only, and not for the use and benefit of
any other person, party, or entity. Any use of or reliance upon
the work product provided under or in connection with this
Agreement by any party other than Client shall be at the sole
risk of such party. NEPSCo shall have no liability under
contract, third party beneficiary theory, tort, strict liability,
or otherwise for any third party's use or reliance upon work
performed pursuant to this Agreement.
Section 12: Confidentiality
NEPSCo agrees to take reasonable measures to hold in
confidence all pricing related information provided and
specifically designated by Client as Confidential Information,
other than that of a clearly public nature or that which Client
has acquired from other sources, and except as otherwise required
to be disclosed by law, regulation or judicial or administrative
order.
Section 13: Force Majeure
NEPSCo shall not be considered in default under this
Agreement or responsible in tort, strict liability, contract or
other legal theory to Client for damages of any description for
any interruption or failure of service or deficiency in the
quality or quantity of service, or any other failure to perform
if such failure is caused by factors beyond NEPSCo's reasonable
control, including without limitation, storm, flood, lightning,
earthquake, fire, explosion, equipment failure, civil
disturbance, labor dispute, act of God or the public enemy,
action of a court or public authority, scheduled or unscheduled
withdrawal of facilities from operation for maintenance or
repair, or any other cause beyond the reasonable control of
NEPSCo; provided, however, that NEPSCo shall use reasonable
efforts to remedy or correct any such failure or interruption as
soon as reasonably possible.
Section 14: Amendments, Modifications and Assignments
Except as provided in Section 8 above, this Agreement may
not be assigned, amended, modified, superseded, or waived, in
whole or in part, except by a written instrument signed by
authorized representatives of each of the parties hereto. A
waiver in one or more instances of any rights under this
Agreement shall not constitute a waiver of such rights for other
or future instances.
<PAGE>
4
Section 15: Enforceability
Should any portion of this Agreement be judicially declared
invalid, unenforceable, or void, such decision shall not have the
effect of invalidating or voiding the remainder of this
Agreement, and the parties hereto agree that the portion or
portions of this Agreement so held to be invalid, unenforceable,
or void shall be deemed to have been stricken and the remainder
shall have the same force and effect as if said portions or
portions had never been included herein.
Section 16: Headings
Headings are provided herein for the convenience of the
parties and shall not be construed to explain or modify any part
of this Agreement.
Section 17: Notices
Except as otherwise provided in this Agreement, any notices
under this Agreement shall be in writing and shall be sufficient
if delivered by (i) hand, (ii) U. S. Mail, first class postage
pre-paid, or (iii) facsimile, with confirmation of receipt to the
parties as follows:
For NEW ENGLAND POWER SERVICE COMPANY:
John G. Cochrane
Vice President
25 Research Drive
Westborough, Massachusetts 01582
Phone: (508) 389-2174
Facsimile: (508) 836-4560
For GSEnergy
Arthur Pearson
Marketing Manager
25 Research Drive
Westborough, Massachusetts 01582
Phone: (508) 389-2122
Section 18: Applicable Law
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New Hampshire without
regard to the principles of conflict of laws contained therein.
<PAGE>
5
IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be executed by its duly authorized representative as
of the day and the year first set forth above.
GSEnergy
By: s/John H. Dickson
Title: President
NEW ENGLAND POWER SERVICE COMPANY
By: s/John G. Cochrane
Title: Vice President
<PAGE>
EXHIBIT A
SERVICES
GSEnergy has requested that NEPSCo provide it with billing
related services for retail customer sales within Granite State
Electric Company's franchise territory under the New Hampshire
Public Utilities Commission's ("Commission") Retail Competition
Pilot Program ("NH Pilot"), which services will be provided
consistent with the Commission's rules and orders under Docket
No. 95-250. GSEnergy will supply the NEPSCo with rates to be
implemented for designed customer classes. NEPSCo will utilize
the supplied rates and usage information to calculate the
supplier portion of customer bills, then integrate this billing
option with Transmission, Distribution and Stranded Cost
components (T/D/S) of Granite State Electric's bill in a single
mailing to the customer.
Billing services include a single price among all customers
within a class on the following rate/pricing structure:
Rate Class Structure Pricing Schedule
- -------------------- ----------------
Residential Flat Energy
Residential- Time of Use On/Off Peak Energy
Residential- High Use
(greater than 25 KWH year) Flat Energy
Residential- Aggregated (GAC) Flat Energy
Small C&I- Energy Only Flat Energy
Small C&I- Demand Flat Energy & Demand
Large C&I- Demand On/Off Peak Energy & Demand
The initial establishment of rates will be at no additional cost
provided there is only one per Rate Class Structure (e.g. one
price option per rate structure). Requests to change the pricing
on an existing Rate Class Structure or to add multiple rates
within a structure must be submitted in writing at least five
business days prior to the requested implementation date.
Multiple pricing among customers within a Rate Class Structure
will result in the additional charges set forth in Exhibit B.
Definition of Billing Demand:
- ----------------------------
Billing Demand shall be the greater of:
1) The greatest fifteen-minute peak usage occurring during the
On-Peak hours period during the month as measured in kilowatts
for each Account, or
2) 90% of the greatest fifteen-minute peak usage occurring during
On-Peak hours period during the month as measured in
kilovolt-amperes for each Account where kilowatt Demand exceeds
75 kilowatts, or
3) 80% of the greatest Billing Demand as so determined above
during the preceding eleven months.
Note: On-Peak denotes the hours of 8:00 am - 9:00 pm, Monday thru
Friday, except holidays. Off-Peak periods are 9:00 pm - 8:00 am,
Monday thru Friday and all day Saturdays, Sundays, and holidays.
Holidays are New Years Day; Presidents Day; Memorial Day;
<PAGE>
Independence Day; New Hampshire Day; Columbus Day; Thanksgiving
Day; and Christmas Day.
Customer Payment:
- ----------------
Upon receipt of payments by Granite State Electric Company
("GSEC") for customers purchasing electric energy from GSEnergy
("Customer"), NEPSCo will ensure that the portion of revenue
attributable to sales of electric energy by GSEnergy is forwarded
to GSEnergy, including, without limitation, GSEnergy's
proportionate share of any Service Fees (as defined below)
received by midnight of the business day following receipt of
payment by GSEC, e.g., payments received on Monday will be
forwarded to GSEnergy by midnight on Tuesday. Payments made to
GSEnergy will be made in a lump sum representing all Customer
revenue received on behalf of GSEnergy for a given day. These
lump sum payments to GSEnergy will be made via an Automated
Clearinghouse (ACM) transaction and credited to a pre-determined
GSEnergy bank account. GSEnergy must provide NEPSCo with the name
of the receiving Bank routing and transit number (ABA number) and
Bank account number to facilitate this transfer. The GS Energy
credited amount will be accompanied by an electronic file which
provides a detailed payment summary for each individual Customer.
If GSEnergy is credited with a customer payment under the
immediate preceding paragraph hereof and the Customer's payment
is not honored for any reason by the Customer's bank, then the
amount credited to GSEnergy for such Customer's electric energy
will be charged back to GSEnergy and included in the nightly
transmission of customer payment records.
Existing service fees ("Service Fees"), such as interest charges
for unpaid balances, shall remain in effect and be assessed, as
applicable, to each Customer account. The cash posting sequence
for Customer payments is detailed below:
Cash Posting:
- ------------
The following cash posting sequence will be in effect upon
receipt of a Customer's payment.
A. Granite State Cash Posting:
--------------------------
1) Rental Arrears
2) Arrears 120 Days and Greater
3) Arrears, 90 Days
4) Arrears, 60 Days
5) Arrears, 30 Days
6) Rental Current
7) Net Current Balance
8) Miscellaneous Arrears
9) Miscellaneous Current
10) Charge off Transfer Balance
Note: Following the Granite State Electric Cash posting sequence
outlined above, remaining dollars will be credited to GSEnergy as
follows:
<PAGE>
B. GSEnergy Cash Posting:
---------------------
1) Arrears 120 Days and Greater
2) Arrears, 90 Days
3) Arrears, 60 Days
4) Arrears, 30 Days
5) Net Current Balance
Note: Following the GSEnergy cash posting sequence outlined
above, any remaining dollars i.e credit balance, will be held and
applied to the Granite State Electric net current balance.
Collection of Final Billed Accounts:
- -----------------------------------
If GSEnergy or a Customer terminates service for any reason,
NEPSCO will issue a final bill to the Customer. If after 21
billing cycles a balance remains outstanding, we will issue a
reminder bill and message to the Customer. This process will be
repeated after 42 billing cycles if necessary. If after 63
billing cycles a Customer's balance remains unpaid, NEPSCo will
remove this Customer from our billing records and forward to
GSEnergy a hard copy report of any uncollected balance for
further collection action if so desired.
Collection Notices:
- ------------------
NEPSCo has created three levels of collection bill messages to
print on an GSEnergy customer's bill. NEPSCo will work with
GSEnergy to modify the wording and dollar parameters used to
generate a message on a customer's bill. Requests to amend any
notice or dollar parameter used to generate such notices will
result in additional charges in accordance with Exhibit B.
Reporting:
- ---------
NEPSCo has the ability to develop customized reports outlining
pertinent information such as: sales, cash receipts and aging of
accounts receivables for all of GSEnergy's customers. Requests to
create a customized report will result in additional charges in
accordance with Exhibit B.
Billing Adjustments:
- -------------------
NEPSCo will make its Customer Service staff available to GSEnergy
on a requested basis and at additional cost for the purpose of
applying general adjustments to the GSEnergy portion of a
customer's account. Charges for such services are set forth in
Exhibit B.
Customer Service:
- ----------------
NEPSCo has the ability, knowledge and resources to provide
optional Customer Services to GSEnergy. These services include
but are not limited to, providing customer service
representatives to answer phone calls from GSEnergy's customers.
NEPSCo will provide GSEnergy with a unique 800 phone number
printed on the supplier portion of your customer's bill. Phones
will be answered using GSEnergy's name and our representatives
will be trained to respond to a wide variety of call types.
<PAGE>
Charges for such services are set forth in Exhibit B.
Notice of Modifications:
- -----------------------
GSEnergy shall submit all requests for modification to services
via certified mail to the following:
Massachusetts Electric Customer Service & Operations Center
c/o David A. Falkowski
Manager - Billing & Systems
55 Bearfoot Road
Northboro, MA 01532
<PAGE>
EXHIBIT B
PRICING
Charges for Billing of Supplier Use:
- -----------------------------------
The costs outlined below apply to all standard billing related
services set forth in Exhibit A, but does not include
non-standard services specifically excluded under Exhibit A that
result in additional charges. The following fee schedule applies
on a per bill generated basis.
Rate Class Billing Cost
- ---------- ------------
D-1 $1.42
D-20 $1.62
T-1 $1.54
G-6 $1.77
G-7 $1.55
G-8 $1.33
V-1 $1.41
Requests for multiple pricing within a Rate Class Structure will
result in additional charges based upon an hourly rate of $65.00.
Requests for making general billing adjustments will be serviced at
a charge of $5.00 per customer adjustment.
Invoices/Payment Terms:
- ----------------------
GSEnergy will receive a monthly invoice from NEPSCo. Payment is due
upon receipt. Upon the expiration or termination of the parties'
obligations under this Agreement, any monies or other charges due
to either party to this Agreement shall be paid within 30 days;
provided, however, any refund that arises under Price Adjustment
below shall be payable from NEPSCO within 30 days from the date
that it has the necessary information to calculate the true up
pricing. Bills not paid within the 30 days by either party shall
bear interest at the rate of 1-1/2% per month on any unpaid
balance.
Collection Notices:
- ------------------
GSEnergy will be charged on a time and expense basis at actual cost
to amend any notice or dollar parameter used to generate such
notices.
Reporting:
- ---------
NEPSCo will review any request to create a customized report and
charge GSEnergy on a time and expense basis at actual cost to
develop such reports.
Charges For Optional Customer Service:
- -------------------------------------
Optional customer service support will be charged on a time and
expense basis at actual cost.
Additionally, GSEnergy will be invoiced for any incremental phone
company charges incurred as a direct result of GSEnergy's customer
service phone number.
<PAGE>
Price Adjustment:
- ----------------
The charges for customer service and billing related services set
forth herein will be adjusted to reflect actual costs incurred by
NEPSCo based upon the Public Utility Holding Company Act of 1935
and SEC regulations and orders. Said adjustments will be calculated
annually following the close of each calendar year applicable to
this Agreement.
Tax Implications:
- ----------------
As a supplier, GSEnergy will be responsible to collect and pay all
applicable State and/or Federal taxes associated with this pilot.
<PAGE>
Exhibit 10(b)(iii)
CONFIDENTIAL INFORMATION
NON-DISCLOSURE AGREEMENT
This Agreement, dated as of May 21, 1996 is between Granite
State Energy, Inc., with offices at 25 Research Drive, Westboro,
MA, ("GSEnergy") and New England Power Company, with offices at 25
Research Drive, Westborough, MA ("Company").
WHEREAS, the Company and GSEnergy wish to discuss a
prospective purchase of power for purposes of the New Hampshire
Retail Competition Pilot Program (the "Prospective Purchase");
FOR GOOD AND VALUABLE CONSIDERATION, GSEnergy and the Company
agree as follows:
1. In connection with the Prospective Purchase, the Company
will provide GSEnergy with certain proprietary and commercially
sensitive information and develop further such information with
GSEnergy (all of the foregoing hereinafter referred to as
"Information") which it wishes GSEnergy to maintain as
confidential. GSEnergy agrees that it will safeguard such
Information maintaining it confidential and not using it except for
the purposes of such review and analysis.
The term "Information" shall mean and includes all information
in whatever form, provided for the purpose of GSEnergy's review and
analysis, but is not information which:
(a) is in the public domain at the time of disclosure to
GSEnergy; or
(b) enters the public domain after disclosure to GSEnergy,
except where such entry is the result of a breach by
GSEnergy of this Agreement; or
(c) was already in the possession of GSEnergy prior to
disclosure to GSEnergy and was not then subject to an
obligation of confidence; or
(d) is rightfully disclosed to GSEnergy by a third person.
2. GSEnergy agrees to maintain all Information in secrecy
and confidence for a period of seven (7) years from the date of
disclosure thereof, using the same degree of care as is used to
protect its own Information. In no event will this degree of care
be less than a reasonable degree of care.
3. If GSEnergy desires to use individuals not employed by
GSEnergy, GSEnergy shall not disclose Information to these
individuals without obtaining prior written approval from the
Company and having appropriate non-disclosure agreements signed in
form and substance satisfactory to the Company.
<PAGE>
- 2 -
4. It will not constitute a violation of this Agreement for
GSEnergy to disclose Information as required by a governmental body
or a court of competent jurisdiction or as otherwise required by
law, provided that the Company has been given notice of such
requirement and been afforded a reasonable opportunity to contest
it, if applicable.
5. If any provision of this Agreement is or becomes or is
deemed invalid, illegal or unenforceable in any jurisdiction, such
provision shall be deemed amended to conform to applicable laws so
as to be valid and enforceable or, if it cannot be so amended
without materially altering the intention of the parties, it shall
be stricken, and the remainder of this Agreement shall remain in
full force and effect.
6. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of
Massachusetts.
7. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which
shall constitute together but one and the same document.
8. All notices from GSEnergy hereunder shall be in writing
and delivered to the attention of Mr. Michael J. Hager, New England
Power Company, 25 Research Drive, Westborough, MA 01582. All
notices from the Company hereunder shall be in writing and
delivered to GSEnergy at the above address.
IN WITNESS WHEREOF, GSEnergy and the Company have caused this
Agreement to be executed by their authorized representatives.
GRANITE STATE ENERGY, INC.
By: s/John H. Dickson
Title: President
NEW ENGLAND POWER COMPANY
By: s/Jeffrey Tranen
Title: President
<PAGE>
Exhibit 10(b)(iv)
New England Power
A NEES company
May 21, 1996
Mr. John H. Dickson
President
Granite State Energy, Inc.
25 Research Drive
Westboro, MA 01582
CONFIRMATION LETTER
This letter shall confirm the agreement reached on May 21,
1996, between New England Power Company ("NEP") and Granite State
Energy, Inc. ("Buyer") regarding the sale/purchase of energy
under the following terms and conditions:
Buyer to purchase and receive; NEP to sell and deliver:
CONTRACT Exclusive, all-requirements service, as
QUANTITY: needed to support contracts between Buyer
and its retail customers.
DELIVERY (1) For service to retail customers served
POINT(S): by Granite State Electric Company, a point
or points on the NEP transmission system;
or
(2) For service to retail customers served
by Public Service Company of New Hampshire
("PSNH"), a point or points on the NEP
transmission system border with PSNH; or
(3) For service to retail customers served
by UNITIL/Concord, a point or points on the
NEP transmission system border with PSNH;
or
(4) For service to retail customers served
by UNITIL/Exeter&Hampton, a point or points
on the NEP transmission system border with
PSNH; or
(5) For service to retail customers served
by the New Hampshire Electric Cooperative,
Inc. ("NHEC") which are served off of the
PSNH transmission system, a point or points
on the PSNH transmission system border with
NHEC; or
(6) For service to retail customers served
by NHEC which are served off of the Central
Vermont Public Service Company ("CVPS")
transmission system, a point or points on
the CVPS transmission system border with
NHEC; or
25 Research Drive
Westborough, MA 01582-0010
Telephone: 508-389-2000
<PAGE>
Granite State Energy, Inc.
Confirmation Letter
page 2
(7) For service to retail customers served
by NHEC which are served off of the NEP
transmission system, a point or points on
the NEP transmission system; or
(8) For service to retail customers served
by Connecticut Valley Electric Company
("CVEC"), a point or points on the CVPS
transmission system border with CVEC; or
(9) Such other points as otherwise agreed
between NEP and Buyer.
In the event that NHEC obtains transmission
service for its retail customers across the
PSNH transmission system then the Delivery
Point for point 5 above shall be a point or
points on the NEP transmission system
border with PSNH.
CONTRACT The Energy Charge Rate for energy delivered
PRICE: during On-Peak hours (as defined below)
shall be as follows:
June '96 - Oct '96: $26.00 per MWh
Nov '96 - May '97: $26.80 per MWh
June '97 - Oct '97: $24.55 per MWh
Nov '97 - May '98: $25.25 per MWh
The Energy Charge Rate for energy delivered
during Off-Peak hours (as defined below)
shall be as follows:
June '96 - Oct '96: $19.90 per MWh
Nov '96 - May '97: $21.00 per MWh
June '97 - Oct '97: $19.90 per MWh
Nov '97 - May '98: $19.55 per MWh
A Reservation Charge Rate of $2.50 per MWh
shall apply to each MWh delivered during
On-Peak and Off-Peak hours; provided,
however, that the Reservation Charge Rate
will be $1.25 per MWh, during periods when
NEP is the sole supplier of energy to
Buyer, should Buyer add language in a form
acceptable to NEP on Buyer's promotional
and/or billing materials indicating that
<PAGE>
Granite State Energy, Inc.
Confirmation Letter
page 3
NEP is Buyer's supplier of energy for the
New Hampshire Pilot Program.
On-Peak hours shall be from 7:01 AM to
10:00 PM, Monday through Friday, excluding
holidays. All other hours shall be
considered Off-Peak hours.
The above Energy Charge Rates and
Reservation Charge Rates are applicable
only to (i) contracts between Buyer and its
retail customers which are executed on or
before July 15, 1996 and (ii) a maximum of
50 MW of hourly energy for such contracts.
Contracts between Buyer and its retail
customers which are executed after July 15,
1996 or which exceed the 50 MW limit will
be served under a separate agreement
between NEP and Buyer.
PERIOD OF For all sales from Buyer to its retail
DELIVERY: customers, commencing with the start of
service under the New Hampshire Retail
Pilot Program and ending upon the
termination of service under the New
Hampshire Retail Pilot Program.
Buyer may terminate service under this
Confirmation prior to June 1, 1997;
provided, however (i) Buyer provides NEP
with thirty days written notice prior to
such termination; (ii) following
termination, Buyer utilizes its own
own-load dispatch at NEPOOL to account for
its load and resources; (iii) NEP provides
100% of the energy and capacity needed to
meet Buyer's own-load requirements from
termination through May 31, 1997 ("Period
A"); and (iv) NEP provides a minimum of 50%
of the energy and capacity needed to meet
Buyer's own-load requirements from June 1,
1997 through May 31, 1998 ("Period B"). The
rates and terms under which NEP will
provide such energy and capacity will be
established under separate agreement, such
agreement to be negotiated in good faith
between NEP and Buyer; provided, however
(i) the energy and reservation rates
<PAGE>
Granite State Energy, Inc.
Confirmation Letter
page 4
rates during Period A shall not exceed the
rates contained in this Confirmation plus
any incremental costs incurred by NEP, if
any, to provide such service; (ii) the
reservation rates during Period B shall not
exceed the rate contained in this
Confirmation; and (iii) the average annual
energy rate during Period B shall not
exceed the following:
Energy Price = (A x Oil Price) + (B x Gas
Price) + C
where:
A, B are constants, expressed in million
Btu per MWh. "A" shall equal 4.74
during On-Peak hours and 1.76
during Off-Peak hours. "B" shall
equal 4.74 during On-Peak hours
and 1.76 during Off-Peak hours;
C is a constant, expressed in $ per
MWh, and shall equal 2.61 during
On-Peak hours and 10.22 during
Off-Peak hours;
Oil
Price is the average of the daily low
quotations for cargo delivery of
1.0% sulphur #6 residual fuel oil
into New York Harbor, as reported
during the billing period by
Platt's Market Scan, expressed in $
per million Btu; and
Gas
Price is the arithmetic average of the
daily settlement prices for the
last three days that the NYMEX
Contract for the month of delivery
trades, as reported in the Wall
Street Journal, expressed in $ per
million Btu. NYMEX Contract shall
mean the New York Mercantile
Exchange Natural Gas Futures
Contract as approved by the
Commodity Futures Trading
Commission for the purchase and
sale of natural gas at Henry Hub.
<PAGE>
Granite State Energy, Inc.
Confirmation Letter
page 5
OTHER: The following condition(s) precedent must
be satisfied prior to the effectiveness of
this Confirmation (i) Buyer and NEP have
obtained all necessary regulatory approvals
including, but not limited to, approvals
from the Securities and Exchange Commission
under the Public Utility Holding Company
Act and the Federal Energy Regulatory
Commission, and (ii) the start of service
from Buyer to its retail customers prior to
September 1, 1996.
For purposes of calculating the Energy and
Reservation Charges, the number of MWh's
delivered during On-Peak hours shall be
determined by summing all of the hourly
loads assigned to Buyer by the various
distribution companies during On-Peak hours
plus Buyer's allocation of transmission
losses, if any, which were provided by NEP.
For purposes of calculating the Energy and
Reservation Charges, the number of MWh's
delivered during Off-Peak hours shall be
determined by summing all of the hourly
loads assigned to Buyer by the various
distribution companies during Off-Peak
hours plus Buyer's allocation of
transmission losses, if any, which were
provided by NEP.
Buyer shall provide NEP with copies of all
of the load reports it receives from each
distribution company which indicate the
hourly loads assigned by each distribution
company to Buyer.
The Contract Price shown above does not
include any costs for transmission from
NEP's generation sources to the Delivery
Points. NEP will be responsible for making
any necessary transmission arrangements and
for supplying any losses from its
generation source(s) to the Delivery
Point(s). In addition to the above Energy
and Reservation Charges, Buyer shall
reimburse NEP for the costs incurred for
such transmission service.
<PAGE>
Granite State Energy, Inc.
Confirmation Letter
page 6
Notwithstanding anything to the contrary herein, to the
extent that the costs incurred in delivering energy under this
Agreement later change due to the use of formula rates,
governmental order, or as a result of actions otherwise beyond
the reasonable control of NEP, NEP shall bill and Buyer shall pay
any such incremental costs incurred by NEP.
This Confirmation Letter is being provided pursuant to and in
accordance with the New England Power Company FERC Electric
Tariff Original Volume No. 5 Waiver and Service Agreement to
Implement Retail Sales Under New Hampshire Pilot Program filed
with the Federal Energy Regulatory Commission on April 16, 1996
in Docket No. ER96-1585-000, ("Agreement") between NEP and Buyer,
and constitutes part of and is subject to all of the terms and
provisions of such Agreement. Terms used but not defined herein
shall have the meanings ascribed to them in the Agreement.
Please confirm that the terms stated herein accurately
reflect the agreement reached NEP and Buyer by returning an
executed copy of this letter to Buyer. Your response should
reflect the appropriate Party in your organization who has the
authority to enter into this Transaction.
GRANITE STATE ENERGY, INC.
s/John H. Dickson
Title: President
NEW ENGLAND POWER COMPANY
s/Jeffrey Tranen
Title: President
<PAGE>
Exhibit 10(b)(v)
New England Power
A NEES company
July 11, 1996
Mr. John H. Dickson
President
Granite State Energy, Inc.
25 Research Drive
Westboro, MA 01582
CONFIRMATION LETTER
This letter shall confirm the agreement reached on July 11,
1996, between New England Power Company ("NEP") and Granite State
Energy, Inc. ("Buyer") regarding the sale/purchase of energy
under the following terms and conditions:
Buyer to purchase and receive, NEP to sell and deliver:
CONTRACT Exclusive, all-requirements service, as
QUANTITY: needed to support contracts between
Buyer and its retail customers which are
executed after July 15, 1996 through
October 15, 1996.
DELIVERY (1) For service to retail customers
POINT(S): served by Granite State Electric
Company, a point or points on the NEP
transmission system; or
(2) For service to retail customers
served by Public Service Company of New
Hampshire ("PSNH"), a point or points on
the NEP transmission system border with
PSNH; or
(3) For service to retail customers
served by UNITIL/Concord, a point or
points on the NEP transmission system
border with PSNH; or
(4) For service to retail customers
served by UNITIL/Exeter & Hampton, a
point or points on the NEP transmission
system border with PSNH; or
(5) For service to retail customers
served by the New Hampshire Electric
Cooperative, Inc. ("NHEC") which are
served off of the PSNH transmission
system, a point or points on the PSNH
transmission system border with NHEC; or
(6) For service to retail customers
served by NHEC which are served off of
the Central Vermont Public Service
Company ("CVPS") transmission system, a
point or points on the CVPS transmission
system border with NEP; or
25 Research Drive
Westborough, MA 01582-0010
Telephone: 508-389-2000
<PAGE>
Granite State Energy, Inc.
Confirmation Letter
page 2
(7) For service to retail customers
served by NHEC which are served off of
the NEP transmission system, a point or
points on the NEP transmission system;
or
(8) For service to retail customers
served by Connecticut Valley Electric
Company ("CVEC"), a point or points on
the CVPS transmission system border with
NEP; or
(9) Such other points as otherwise
agreed between NEP and Buyer.
In the event that NHEC obtains
transmission service for its retail
customers across the PSNH transmission
system then the Delivery Point for point
5 above shall be a point or points on
the NEP transmission system border with
PSNH.
CONTRACT The Energy Charge Rate for energy
PRICE: delivered during On-Peak hours (as
defined below) shall be as follows:
Aug '96 - Oct '96: $28.25 per MWh
Nov '96 - May '97: $28.00 per MWh
June '97 - Oct '97: $26.25 per MWh
Nov '97 - May '98: $27.25 per MWh
The Energy Charge Rate for energy
delivered during Off-Peak hours (as
defined below) shall be as follows:
Aug '96 - Oct '96: $21.10 per MWh
Nov '96 - May '97: $22.25 per MWh
June '97 - Oct '97: $21.50 per MWh
Nov '97 - May '98: $21.50 per MWh
A Reservation Charge Rate of $2.50 per
MWh shall apply to each MWh delivered
during On-Peak and Off-Peak hours;
provided, however, that the Reservation
Charge Rate will be $1.25 per MWh,
during periods when NEP is the sole
supplier of energy to Buyer, should
Buyer add language in a form acceptable
to NEP on Buyer's promotional and/or
billing materials indicating that NEP is
<PAGE>
Granite State Energy, Inc.
Confirmation Letter
page 3
Buyer's supplier of energy for the New
Hampshire Pilot Program.
On-Peak hours shall be from 7:01 AM to
10:00 PM, Monday through Friday,
excluding holidays. All other hours
shall be considered Off-Peak hours.
The above Energy Charge Rates and
Reservation Charge Rates are applicable
only to contracts between Buyer and its
retail customers which are executed
after July 15, 1996. Contracts between
Buyer and its retail customers which
were entered into on or before July 15,
1996 are subject to the agreement
between NEP and Buyer dated May 21, 1996
("May 21 Agreement"). Should the total
sales under this agreement and the May
21 Agreement exceed 20 MW of energy in
any hour, then the excess energy will be
served under a separate agreement
between NEP and Buyer.
PERIOD OF For all sales from Buyer to its retail
DELIVERY: customers, commencing with the start of
service under the New Hampshire Retail
Pilot Program and ending upon the
termination of service under the New
Hampshire Retail Pilot Program.
Buyer may terminate service under this
Confirmation prior to June 1, 1997;
provided, however (i) Buyer provides NEP
with thirty days written notice prior to
such termination; (ii) following
termination, Buyer utilizes its own own-
load dispatch at NEPOOL to account for
its load and resources; (iii) NEP
provides 100% of the energy and capacity
needed to meet Buyer's own-load
requirements from termination through
May 31, 1997 ("Period A"); and (iv) NEP
provides a minimum of 50% of the energy
and capacity needed to meet Buyer's own-
load requirements from June 1, 1997
through May 31, 1998 ("Period B"). The
rates and terms under which NEP will
provide such energy and capacity will be
established under separate agreement,
such agreement to be negotiated in good
faith between NEP and Buyer; provided,
<PAGE>
Granite State Energy, Inc.
Confirmation Letter
page 4
however (i) the energy and reservation
rates during Period A shall not exceed
the rates contained in this Confirmation
plus any incremental costs incurred by
NEP, if any, to provide such service;
(ii) the reservation rates during Period
B shall not exceed the rate contained in
this Confirmation; and (iii) the average
annual energy rate during Period B shall
not exceed the following:
Energy Price = (A x Oil Price) +
(B x Gas Price) + C
where:
A, B are constants, expressed in
million Btu per MWh. "A" shall
equal 4.74 during On-Peak hours
and 1.76 during Off-Peak hours.
"B" shall equal 4.74 during
On-Peak hours and 1.76 during
Off-Peak hours;
C is a constant, expressed in $
per MWh, and shall equal 2.61
during On-Peak hours and 10.22
during Off-Peak hours;
Oil
Price is the average of the daily low
quotations for cargo delivery of
1.0% sulphur #6 residual fuel
oil into New York Harbor, as
reported during the billing
period by Platt's Market Scan,
expressed in $ per million Btu;
and
Gas
Price is the arithmetic average of the
daily settlement prices for the
last three days that the NYMEX
Contract for the month of
delivery trades, as reported in
the Wall Street Journal,
expressed in $ per million Btu.
NYMEX Contract shall mean the
New York Mercantile Exchange
Natural Gas Futures Contract as
approved by the Commodity
Futures Trading Commission
<PAGE>
Granite State Energy, Inc
Confirmation Letter
page 5
for the purchase and sale of
natural gas at Henry Hub.
OTHER: For purposes of calculating the Energy
and Reservation Charges, the number of
MWh's delivered during On-Peak hours
shall be determined by summing all of
the hourly loads assigned to Buyer by
the various distribution companies
during On-Peak hours, including
reconciliations, if any, plus Buyer's
allocation of transmission losses, if
any, which were provided by NEP.
For purposes of calculating the Energy
and Reservation Charges, the number of
MWh's delivered during Off-Peak hours
shall be determined by summing all of
the hourly loads assigned to Buyer by
the various distribution companies
during Off-Peak hours, including
reconciliations, if any, plus Buyer's
allocation of transmission losses, if
any, which were provided by NEP.
Buyer shall provide NEP with copies of
all of the load reports it receives from
each distribution company which indicate
the hourly loads assigned by each
distribution company to Buyer.
In order to determine the load served
under this agreement and the load served
under the May 21 Agreement, Buyer shall
provide NEP with a report, by the last
day of each calendar month, which
indicates the total number of customers
Buyer has contracted with, as of the
fifteenth day of such month, by rate
category (Residential, Small Commercial
and Industrial and Large Commercial and
Industrial). The hourly load served
under the May 21 Agreement shall be
determined as follows:
HLA=(A/B)x Load
where:
<PAGE>
Granite State Energy, Inc.
Confirmation Letter
page 6
A is the value of TCL, as defined
below, as of July 15, 1996;
B is the value of TCL, as defined
below, as of the fifteenth day
of the current billing month
(ie., as of August 15 for sales
during the month of August);
provided, however, that the
value of B shall not be less
than the value of A;
HLA is the hourly load served under
the May 21 Agreement; and
Load is Buyer's total hourly load for
the hour which is served under
this agreement and the May 21
Agreement.
The hourly load served under this
agreement shall be determined as
follows:
HLB = ((B-A)/B) x Load
where:
A, B are as defined above;
HLB is the hourly load served under
this agreement; and
Load is Buyer's total hourly load for
the hour which is served under
this agreement and the May 21
Agreement.
The value of TCL shall be determined as
follows:
TCL=(N x 1.61)+(M x 3.54)+(0 x 84.18)
where:
N is the number of customers in
the Residential rate category;
<PAGE>
Granite State Energy, Inc.
Confirmation Letter
page 7
M is the number of customers in
the Small Commercial and
Industrial rate category; and
O is the number of customers in
the large Commercial and
Industrial rate category.
The Contract Price shown above does not
include any costs for transmission from
NEP's generation sources to the Delivery
Points. NEP will be responsible for
arranging network integration
transmission service and for supplying
any losses from its generation source(s)
to the Delivery Point(s). In addition to
the above Energy and Reservation
Charges, Buyer shall reimburse NEP for
the costs incurred for such transmission
service.
Notwithstanding anything to the contrary herein, to the
extent that the costs incurred in delivering energy under this
Agreement later change due to the use of formula rates,
governmental order, or as a result of actions otherwise beyond
the reasonable control of NEP, NEP shall bill and Buyer shall pay
any such incremental costs incurred by NEP.
This Confirmation Letter is being provided pursuant to and in
accordance with the New England Power Company FERC Electric
Tariff Original Volume No. 5 Waiver and Service Agreement to
Implement Retail Sales Under New Hampshire Pilot Program filed
with the Federal Energy Regulatory Commission on April 16, 1996
in Docket No. ER96-1585-000, ("Agreement") between NEP and Buyer,
and constitutes part of and is subject to all of the terms and
provisions of such Agreement. Terms used but not defined herein
shall have the meanings ascribed to them in the Agreement.
Please confirm that the terms stated herein accurately
reflect the agreement reached between NEP and Buyer by returning
an executed copy of this letter to Buyer. Your response should
reflect the appropriate Party in your organization who has the
authority to enter into this Transaction.
<PAGE>
Granite State Energy, Inc.
Confirmation Letter
page 8
GRANITE STATE ENERGY, INC.
s/John H. Dickson
- -------------------------
Title: President
- -------------------------
NEW ENGLAND POWER COMPANY
s/John F. Malley
- -------------------------
Title: Vice President
- -------------------------
<PAGE>
Exhibit 10(c)
NEES Companies
February 5, 1997
Mr. John F. Malley, Vice President
New England Power Company
25 Research Drive
Westborough, MA 01582
Dear Mr. Malley:
This letter will serve as an assignment of the Tariff 5 Service
Agreement, effective as of July 1, 1996 (the "Service
Agreement"), between NEES Energy and New England Power Company
for the Massachusetts Electric retail electric pilot programs,
confirmed by Confirmation Letter dated August 5, 1996.
NEES Energy hereby assigns all benefits and obligations under the
Service Agreement to its subsidiary, AllEnergy Marketing Company,
L.L.C., Three University Office Park, 95 Sawyer Road, Waltham,
Massachusetts 02158. Any notices to AllEnergy should be directed
to John H. Dickson, President, at that address.
Please confirm your acceptance of this assignment by returning an
executed copy of this letter to me.
NEES ENERGY, INC.
s/Alfred D. Houston
Alfred D. Houston
Vice President
NEW ENGLAND POWER COMPANY
s/John F. Malley
John F. Malley
Vice President
<PAGE>
New England Power
A NEES company
August 5, 1996
Mr. John H. Dickson
President
NEES Energy, Inc.
25 Research Drive
Westboro, MA 01582
CONFIRMATION LETTER
This letter shall confirm the agreement reached on August 5,
1996, between New England Power Company ("NEP") and NEES Energy,
Inc. ("Buyer") regarding the sale/purchase of energy under the
following terms and conditions:
Buyer to purchase and receive; NEP to sell and deliver:
CONTRACT All-requirements service, as needed to
QUANTITY: support contracts between Buyer and its
retail customers in the Massachusetts
Electric Company Retail Pilot Program.
DELIVERY A point or points on NEP's transmission
POINT(S): system which shall be at the
interconnection(s) between NEP's system
resources and the NEP transmission
system.
CONTRACT The Energy Charge Rate for energy
PRICE: delivered during On-Peak hours (as
defined below) shall be as follows:
Jan '97 - Jan '98: $24.75 per MWh
The Energy Charge Rate for energy
delivered during Off-Peak hours (as
defined below) shall be as follows:
Jan '97 - Jan '98: $20.25 per MWh
A Reservation Charge Rate of $2.50 per
MWh shall apply to each MWh delivered
during On-Peak and Off-Peak hours;
provided, however, that the Reservation
Charge Rate will be $1.25 per MWh, during
periods when NEP is the sole supplier of
energy to Buyer, should Buyer add
CONFIDENTIAL
25 Research Drive
Westborough, MA 01582-0010
Telephone: 508-389-2000
<PAGE>
NEES Energy, Inc.
Confirmation Letter
page 2
language in a form acceptable to NEP on
Buyer's promotional and/or billing
materials indicating that NEP is Buyer's
supplier of energy.
On-Peak hours shall be from 7:01 AM to
10:00 PM, Monday through Friday,
excluding holidays. All other hours shall
be considered Off-Peak hours.
Period of For all sales from Buyer to its retail
Delivery: customers, commencing with the start of
service under Massachusetts Electric
Company's Retail Pilot Program and ending
upon the termination of service under
such program.
Other: The following condition(s) precedent must
be satisfied prior to the effectiveness
of this Confirmation (i) the proposal
submitted by Buyer in response to the
Pilot Program RFP must be selected by the
Administrator and (ii) customers must
elect to take service from Buyer.
For purposes of calculating the Energy
and Reservation Charges, the number of
MWh's delivered during On-Peak hours
shall be determined by summing all of the
hourly loads assigned to Buyer by
Massachusetts Electric Company during On-
Peak hours.
For purposes of calculating the Energy
and Reservation Charges, the number of
MWh's delivered during Off-Peak hours
shall be determined by summing all of the
hourly loads assigned to Buyer by
Massachusetts Electric Company during
Off-Peak hours.
Buyer shall provide NEP with copies of
all of the load reports it receives from
Massachusetts Electric Company which
indicate the hourly loads assigned by
Massachusetts Electric Company to Buyer.
CONFIDENTIAL
<PAGE>
NEES Energy, Inc.
Confirmation Letter
page 3
Transmission from the Delivery Point(s)
to ultimate retail customers will be
provided via network transmission service
which is purchased by Massachusetts
Electric Company.
Notwithstanding anything to the contrary herein, to the
extent that the costs incurred in delivering energy under this
Agreement later change due to the use of formula rates,
governmental order, or as a result of actions otherwise beyond
the reasonable control of NEP, NEP shall bill and Buyer shall pay
any such incremental costs incurred by NEP.
This Confirmation Letter is being provided pursuant to and in
accordance with the New England Power Company FERC Electric
Tariff Original Volume No. 5 Waiver and Service Agreement to
Implement Retail Sales Under Massachusetts Electric Company's
Pilot Program filed with the Federal Energy Regulatory Commission
in Docket No. ER96-1626-000, ("Agreement") between NEP and Buyer,
and constitutes part of and is subject to all of the terms and
provisions of such Agreement. Terms used but not defined herein
shall have the meanings ascribed to them in the Agreement.
Please confirm that the terms stated herein accurately
reflect the agreement reached on August 5, 1996, between NEP and
Buyer by returning an executed copy of this letter to Buyer. Your
response should reflect the appropriate Party in your
organization who has the authority to enter into this
Transaction, and should be received by Buyer no later than August
8, 1996.
NEES ENERGY, INC.
s/John H. Dickson
- --------------------
Title: President
NEW ENGLAND POWER COMPANY
s/John F. Malley
- ---------------------------
Title: Vice President
Generation Marketing
CONFIDENTIAL
<PAGE>
New England Power
A NEES company
July 31, 1996
Mr. John H. Dickson
President
Granite State Energy, Inc.
25 Research Drive
Westboro, MA 01582
CONFIRMATION LETTER
Please refer to the Confirmation Letter dated July 11, 1996,
between New England Power Company ("NEP") and Granite State
Energy, Inc. ("Buyer") regarding the sale/purchase of energy. NEP
and Buyer agree that the Energy Charge Rates shall be deleted in
their entirety and replaced with the following:
CONTRACT PRICE: The Energy Charge Rate for energy
delivered during On-Peak hours (as
defined below) shall be as follows:
Aug '96 - Oct '96: $26.00 per MWh
Nov '96 - May '97: $26.80 per MWh
June '97 - Oct '97: $24.55 per MWh
Nov '97 - May '98: $25.25 per MWh
The Energy Charge Rate for energy
delivered during Off-Peak hours (as
defined below) shall be as follows:
Aug '96 - Oct '96: $19.90 per MWh
Nov '96 - May '97: $21.00 per MWh
June '97 - Oct '97: $19.90 per MWh
Nov '97 - May '98: $19.55 per MWh
Please acknowledge your agreement with the above by signing
below.
GRANITE STATE ENERGY, INC. NEW ENGLAND POWER COMPANY
s/John H. Dickson s/John F. Malley
- -------------------------- --------------------------
Title: President Title: Vice President
25 Research Drive
Westborough, MA 01582-0010
Telephone: 508-389-2000
<PAGE>
Exhibit 10(d)(i)
SERVICE AGREEMENT
BY AND BETWEEN
NEW ENGLAND POWER SERVICE COMPANY
AND
AllEnergy Marketing Company, LLC
This Agreement is made and entered into as of the 1st day of
January, 1997 (this "Agreement") by and between AllEnergv
Marketing Company, LLC.("Client") having offices at Three
University Office Park, 95 Sawyer Road, Waltham, MA 02154 and NEW
ENGLAND POWER SERVICE COMPANY ("NEPSCo") having offices at 25
Research Drive Westborough, MA 01582.
Section 1: Description of Services
NEPSCo will provide Client with billing related services
described in Exhibit A (the "Services"). The descriptions of the
Services in Exhibit A are incorporated herein and made a part
hereof.
Section 2: Extent of Agreement
NEPSCo shall exercise all reasonable skill, care and
diligence in carrying out the Services, shall carry out its
duties in accordance with recognized professional standards and
shall provide everything reasonably necessary to complete the
Services in accordance with the requirements of this Agreement.
Section 3: Term
This Agreement shall be in effect as of the date hereof and
through the final billing cycle for each Customer (as defined in
Exhibit A) following termination of the Mass. Electric Pilot (as
defined in Exhibit A), unless earlier terminated by the parties
as provided herein. Either party may terminate this Agreement for
cause by providing 90 days written notice. Notwithstanding
anything to the contrary herein, the obligation to pay the other
party money due under this Agreement shall survive expiration and
termination of this Agreement. Further, upon expiration or
termination of this Agreement the parties shall cooperate with
each other in order to complete all outstanding matters related
to this Agreement in a timely and orderly manner.
Section 4: Payment Terms
Payment terms are set forth in Exhibit B, attached hereto
and made a part hereof.
<PAGE>
2
Section 5: Limitation of Liability
In no event shall either party be liable to the other party
or to any other third party for any indirect, reliance, multiple,
incidental, special, consequential, or punitive damages
(including those which arise under M.G.L. c. 93A) connected with
or arising out of the Agreement, including, but not limited to,
from NEPSCo's performance of any Services hereunder, whether or
not either party was advised of the possibility of such damages.
In no event shall NEPSCo be liable in contract, tort, or
otherwise (including negligence, warranty, or strict liability)
for amounts in excess of the total of all amounts earned by
NEPSCo in connection with this Agreement, whether or not NEPSCo
was advised of the possibility of such damages.
Section 6: Warranties
NEPSCo and its affiliates, successors and assigns make no
WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT
NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE with respect to the Services.
Section 7: Indemnification
To the fullest extent permitted by law, Client shall
indemnify and hold harmless, and at NEPSCo's option, defend
NEPSCo and its affiliates, and their officers, directors,
employees, agents, servants, and assigns (collectively, "NEPSCo
Parties") from and against any and all claims and/or liability
for losses, expenses, damage to property, injury to or death of
any person, including, but not limited to, Client's employees,
NEPSCo's and its affiliates' employees, subcontractors and
subcontractors' employees, or any other liability incurred by
NEPSCo or its affiliates, including expenses, legal or otherwise,
caused wholly or in part by any negligent, grossly negligent or
willful, act or omission of Client, its officers, directors,
employees, agents, servants, or assigns arising out of this
Agreement, except to the extent caused by any negligent, grossly
negligent or willful, act or omission of the NEPSCo Parties.
Section 8: Assignment and Subcontracting
NEPSCo shall not assign or subcontract the Services or any
part thereof without Client's written consent, which Client shall
not unreasonably withhold. Client may not assign its rights or
obligations under this Agreement except with the written consent
of NEPSCo.
Section 9: Independent Contractor
NEPSCo is, and shall at all times remain, an independent
contractor.
<PAGE>
3
Section 10: Entire Agreement
This Agreement constitutes the entire Agreement between the
parties with respect to the Services and all previous
representations, either written or oral, are hereby annulled and
superseded.
Section 11: No Third Party Beneficiaries
The work performed by NEPSCo under this Agreement is for
Client's use and benefit only, and not for the use and benefit of
any other person, party, or entity. Any use of or reliance upon
the work product provided under or in connection with this
Agreement by any party other than Client shall be at the sole
risk of such party. NEPSCo shall have no liability under
contract, third party beneficiary theory, tort, strict liability,
or otherwise for any third party's use or reliance upon work
performed pursuant to this Agreement.
Section 12: Confidentiality
NEPSCo agrees to take reasonable measures to hold in
confidence all pricing related information provided and
specifically designated by Client as Confidential Information,
other than that of a clearly public nature or that which Client
has acquired from other sources and except as otherwise required
to be disclosed by law, regulation or judicial or administrative
order.
Section 13: Force Majeure
NEPSCo shall not be considered in default under this
Agreement or responsible in tort, strict liability, contract or
other legal theory to Client for damages of any description for
any interruption or failure of service or deficiency in the
quality or quantity of service, or any other failure to perform
if such failure is caused by factors beyond NEPSCo's reasonable
control, including without limitation, storm, flood, lightning,
earthquake, fire, explosion, equipment failure, civil
disturbance, labor dispute, act of God or the public enemy,
action of a court or public authority, scheduled or unscheduled
withdrawal of facilities from operation for maintenance or
repair, or any other cause beyond the reasonable control of
NEPSCo; provided however that NEPSCo shall use reasonable efforts
to remedy or correct any such failure or interruption as soon as
reasonably possible.
Section 14: Amendments and Modifications
This Agreement may not be amended, modified, superseded, or
waived, in whole or in part, except by a written instrument
signed by authorized representatives of each of the parties
hereto. A waiver in one or more instances of any rights under
this Agreement shall not constitute a waiver of such rights for
other or future instances.
<PAGE>
4
Section 15: Enforceability
Should any portion of this Agreement be judicially declared
invalid, unenforceable, or void, such decision shall not have the
effect of invalidating or voiding the remainder of this
Agreement, and the parties hereto agree that the portion or
portions of this Agreement so held to be invalid, unenforceable,
or void shall be deemed to have been stricken and the remainder
shall have the same force and effect as if said portions or
portions had never been included herein.
Section 16: Headings
Headings are provided herein for the convenience of the
parties and shall not be construed to explain or modify any part
of this Agreement.
Section 17: Notices
Except as otherwise provided in this Agreement, any notices
under this Agreement shall be in writing and shall be sufficient
if delivered by (i) hand, (ii) U. S. Mail, first class postage
pre-paid, or (iii) facsimile, with confirmation of receipt to the
parties as follows:
For NEW ENGLAND POWER SERVICE COMPANY:
John G. Cochrane
Vice President
25 Research Drive
Westborough, Massachusetts 01582
Phone: (508) 389-2174
Facsimile: (508) 836-4560
For AllEnergy Marketing Company, LLC:
Marcy Reed
Vice President and Treasurer
Three University Office Park
95 Sawyer Road
Waltham, MA 02154
Phone: (617)642-9502
Fax: (617)642-9504
Section 18: Applicable Law
This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts
without regard to the principles of conflict of laws contained
therein.
<PAGE>
5
IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be executed by its duly authorized representative as
of the day and the year first set forth above.
AllEnergy Marketing Company, LLC
By: s/Marcy L. Reed
Title: Vice President and Treasurer
NEW ENGLAND POWER SERVICE COMPANY
By: s/John G. Cochrane
Title: Vice President
<PAGE>
EXHIBIT A
SERVICES
Client has requested that NEPSCo provide it with billing related
services for retail customer sales within Massachusetts Electric
Company's service territory under the Massachusetts Electric
Company Choice: New England Pilot Program ("Mass. Electric
Pilot"), which services will be provided consistent with the
pilot program design, its administrator's rules, and the DPU
approval dated April 3, 1996. Client will supply the NEPSCo with
rates to be implemented for designed customer classes. NEPSCo
will utilize the supplied rates and usage information to
calculate the supplier portion of customer bills, then integrate
this billing option with Transmission, Distribution and Stranded
Cost components (T/D/S) of Massachusetts Electric's bill in a
single mailing to the customer.
Billing services include a single price among all customers
within a class on the following rate/pricing structure:
Rate Class Structure Pricing Schedule
- -------------------- ----------------
Residential Flat Energy
Residential- Low Income Flat Energy
Residential- Time of Use On/Off Peak Energy
Small C&I- Energy Only Flat Energy
Small C&I- Demand Flat Energy & Demand
The initial establishment of rates will be at no additional cost
provided there is only one per Rate Class Structure (e.g. one
price option per rate structure). Requests to change the pricing
on an existing Rate Class Structure or to add multiple rates
within a structure must be submitted in writing at least five
business days prior to the requested implementation date.
Multiple pricing among customers within a Rate Class Structure
will result in the additional charges set forth in Exhibit B.
Definition of Billing Demand:
- ----------------------------
Billing Demand shall be the greater of:
1) The greatest fifteen-minute peak usage occurring during the
On-Peak hours period during the month as measured in kilowatts
for each Account, or
2) 90% of the greatest fifteen-minute peak usage occurring during
On-Peak hours period during the month as measured in
kilovolt-amperes for each Account where kilowatt Demand exceeds
75 kilowatts, or
3) 5 Kilowatts/G7 only
On-Peak/Off-Peak periods apply only to residential rate R7 for
the Pilot.
The On-Peak/Off-Peak periods shall be as defined in MECO's
applicable tariff on file with MDPU. At the present time,
On-Peak periods are from 8:00 AM to 9:00 PM, Monday through
Friday, except holidays. Off-Peak periods are 9:00 PM to
8:00 AM, Monday through Friday and all day on Saturday,
Sunday, and holidays.
<PAGE>
Holidays are New Year's Day, Presidents Day, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans Day,
Thanksgiving Day and Christmas Day. All holidays are on the day
of national observance.
Customer Payment:
- ----------------
Upon receipt of payments by Massachusetts Electric Company
("MECO") for customers purchasing electric energy from Client,
NEPSCo will ensure that the portion of revenue attributable to
sales of electric energy by Client is forwarded to Client,
including, without limitation, Client's proportionate share of
any Service Fees (as defined below). Notification of said
revenues will be forwarded by midnight of the business day
following receipt of payment by MECO, e.g., notification of
payments received on Monday will be forwarded to Client by
midnight on Tuesday. Payments made to Client will be made in a
lump sum representing all customer revenue received on behalf of
Client for a given day. These lump sum payments to Client will be
made via an Automated Clearinghouse (ACM) transaction and
credited to a pre-determined Client bank account. Client must
provide NEPSCo with the name of the receiving bank, routing and
transit number (ABA number) and bank account number to facilitate
this transfer. The Client credited amount will be accompanied by
an electronic file which provides a detailed payment summary for
each individual Client customer.
If Client is credited with a customer payment under the immediate
preceding paragraph hereof and the customer's payment is not
honored for any reason by the MECO's bank, then the amount
credited to Client for such customer's electric energy will be
charged back to Client and included in the nightly transmission
of customer payment records.
Existing service fees ("Service Fees"), such as interest charges
for unpaid balances, shall remain in effect and be assessed, as
applicable, to each customer account. The cash posting sequence
for customer payments is detailed below:
Cash Posting:
- ------------
The following cash posting sequence will be in effect upon
receipt of a customer's payment.
A. MECO Cash Posting:
-----------------
1) Rental Arrears
2) Arrears 120 Days and Greater
3) Arrears, 90 Days
4) Arrears, 60 Days
5) Arrears, 30 Days
6) Rental Current
7) Net Current Balance
8) Miscellaneous Arrears
9) Miscellaneous Current
10) Charge off transfer Balance
Note: Following the MECO Cash posting sequence outlined above,
remaining dollars will be credited to Client as follows:
<PAGE>
B. Client Cash Posting:
-------------------
1) Arrears 120 Days and Greater
2) Arrears, 90 Days
3) Arrears, 60 Days
4) Arrears, 30 Days
5) Net Current Balance
Note: Following the Client cash posting sequence outlined above,
any remaining dollars i.e credit balance, will be held and
applied to the MECO net current balance.
Collection of Final Billed Accounts:
- -----------------------------------
If Client or a Client's customer terminates service for any
reason, NEPSCo will issue a final bill to the customer(s). If
after 21 billing cycles a balance remains outstanding, NEPSCo
will issue a reminder bill and message to the customer. This
process will be repeated after 42 billing cycles if necessary. If
after 63 billing cycles a customer's balance remains unpaid,
NEPSCo will remove this customer from its billing records and
forward to Client a hard copy report of any uncollected balance
for further collection action if so desired.
Collection Notices:
- ------------------
NEPSCo has created three levels of collection bill messages to
print on a Client customer's bill. NEPSCo will work with Client
to modify the wording and dollar parameters used to generate a
message on a customer's bill. Requests to amend any notice or
dollar parameter used to generate such notices will result in
additional charges in accordance with Exhibit B.
Reporting:
- ---------
NEPSCo has the ability to develop customized reports outlining
pertinent information such as: sales, cash receipts and aging of
accounts receivables for all of Client's customers. Requests to
create a customized report will result in additional charges in
accordance with Exhibit B.
Billing Adjustments:
- -------------------
NEPSCo will make its customer service staff available to Client
on a requested basis and at additional cost for the purpose of
applying general adjustments to the Client portion of
a customer's account. Charges for such services are set forth in
Exhibit B.
Notice of Modifications:
- -----------------------
Client shall submit all requests for modification to services via
certified mail to the following:
Massachusetts Electric Customer Service & Operations Center
c/o Patrick J. Connelly
Director, Customer Service Center
55 Bearfoot Road Northboro, MA 01532
<PAGE>
EXHIBIT B
PRICING
Charges for Billing of Supplier Use:
- -----------------------------------
The costs outlined below apply to all standard billing related
services set forth in Exhibit A, but does not include
non-standard services specifically excluded under Exhibit A that
result in additional charges. The following fee schedule applies
on a per bill generated basis.
Rate Class Billing Cost
- ---------- ------------
R-5 $1.27
R-6 $1.27
R-7 $1.26
G-6 $1.49
G-7 $1.57
Requests for multiple pricing within a Rate Class Structure will
result in additional charges based upon an hourly rate of $65.00.
Requests for making general billing adjustments will be serviced
at a charge of $5.00 per customer adjustment.
Invoices/Payment Terms:
- ----------------------
Client will receive a monthly invoice from NEPSCo. Payment is
due upon receipt. Upon the expiration or termination of the
parties' obligations under this Agreement, any monies or other
charges due to either party to this Agreement shall be paid
within 30 days; provided, however, any refund that arises under
Price Adjustment below shall be payable from NEPSCo within 30
days from the date that it has the necessary information to
calculate the true up pricing. Bills not paid within the 30 days
by either party shall bear interest at the rate of 1-1/2% per
month on any unpaid balance.
Collection Notices:
- ------------------
Client will be charged on a time and expense basis at actual cost
to amend any notice or dollar parameter used to generate such
notices.
Reporting:
- ---------
NEPSCo will review any request to create a customized report and
charge Client on a time and expense basis at actual cost to
develop such reports.
Price Adjustment:
- ----------------
The charges for billing related services set forth herein will be
adjusted to reflect actual costs incurred by NEPSCo based upon
the Public Utility Holding Company Act of 1935 and SEC
regulations and orders. Said adjustments will be calculated
annually following the close of each calendar year applicable to
this Agreement.
<PAGE>
Tax Implications:
- ----------------
It is Client's or its customer's responsibility to identify and
request any exemption from the collection of the tax by filing
appropriate documentation with NEPSCo or MECO. To the extent that
the Client or customer has not forwarded the appropriate
exemption documentation, NEPSCo will collect on behalf of the
Client any sales tax imposed by governmental authorities with
respect to the sale of electricity to its customers. Client shall
be responsible, however, to pay all applicable state, local
and/or Federal taxes associated with Client's purchase and/or
sale of electricity under the Pilot, and shall indemnify NEPSCo
against all such obligations.
<PAGE>
Exhibit 10(d)(ii)
CAPITAL AND LIQUIDITY SUPPORT AGREEMENT
This CAPITAL AND LIQUIDITY SUPPORT AGREEMENT, is made and
entered into as of the 29th day of May, 1997 by and among Eastern
Enterprises ("Eastern "), a Massachusetts voluntary association,
AllEnergy Marketing Company, Inc., ("AMCI"), a wholly owned
subsidiary of Eastern, New England Electric System ("NEES"), a
Massachusetts voluntary association, NEES Energy Inc., ("NEI"), a
wholly owned subsidiary of NEES, and AllEnergy Marketing Company,
L.L.C. ("AllEnergy"), a Massachusetts limited liability company.
WITNESSETH
WHEREAS, AMCI and NEI each own fifty percent (50%) of the
equity of AllEnergy; and
WHEREAS, AllEnergy intends to incur "Fleet Debt" (as that
term hereinafter is defined) for the purposes of carrying on its
business; and
WHEREAS, Eastern, AMCI, NEES, and NEI desire to take certain
actions to support the financial condition of AllEnergy as
hereinafter set forth in order to assure its ability to incur
Fleet Debt;
NOW, THEREFORE, in consideration of the mutual promises
herein contained, the parties hereto agree as follows:
1. Stock Ownership. So long as there shall remain unpaid any
Fleet Debt which AllEnergy may have incurred, each of AMCI
and NEI shall own fifty percent (50%) of all the outstanding
equity of AllEnergy; provided, however that, upon prior
written notice to Fleet National Bank, each of AMCI and NEI
may transfer some or all of its equity in AllEnergy to the
other party. As used herein, the term "Fleet Debt" shall
mean all obligations of AllEnergy for borrowed money and in
respect of letters of credit issued for the account of
AllEnergy, including but not limited to repayment of
principal, accrued unpaid interest, fees, penalties, and
other costs, pursuant to a promissory note and letter
agreement, each dated May 1997, with Fleet National Bank,
("Fleet Credit Agreement") under which AllEnergy may borrow
or request that Fleet National Bank issue its letter or
letters of credit, which borrowings and/or letters of credit
may not exceed Ten Million ($10,000.00) Dollars outstanding
at any one time.
2. Maintenance of Net Worth. While any Fleet Debt is
outstanding, each of AMCI and NEI, severally and not
jointly, shall take all action necessary to ensure that the
"Net Worth" (as that term hereinafter is defined) of
AllEnergy is maintained at not less than One Dollar ($1.00).
As used herein the term "Net Worth" shall mean the excess of
assets over liabilities as determined in accordance with
generally accepted accounting principles as used by the
United States Financial Accounting Standards Board, as in
effect from time to time, consistently applied.
<PAGE>
3. Maintenance of Liquidity. Each of AMCI and NEI, severally
and not jointly, shall, from time to time, make
contributions to AllEnergy of cash or other liquid assets
sufficient to permit AllEnergy to pay and satisfy its Fleet
Debt promptly following written notice from AllEnergy or
Fleet National Bank to AMCI and NEI of any lack of
AllEnergy's ability to satisfy such requirements on its own.
4. Payments by AMCI and NEI. In the event that AllEnergy's Net
Worth is less than One Dollar ($1.00) (a "Net Worth
Deficiency"), or in the event that AllEnergy does not have
sufficient cash or other liquid assets to permit it to pay
and satisfy the Fleet Debt as any such Fleet Debt becomes
due (a "Liquidity Deficiency"), each of AMCI and NEI
immediately shall, upon notice from AllEnergy or Fleet
National Bank, pay to AllEnergy an amount equal to the
product of (i) the amount of the Net Worth Deficiency or
Liquidity Deficiency, as the case may be and (ii) their
respective percentage ownership interests in the equity of
AllEnergy provided, however, in no event shall the aggregate
of percentage interests described in clause (ii) be less
than 100% and provided further , however, AMCI and NEI may,
in lieu of payment to AllEnergy, elect to directly payoff
and retire all outstanding Fleet Debt and terminate the
Fleet Credit Agreement in accordance with its terms.
Eastern and NEES agree to, severally (as determined by the
percentage ownership interest of their respective
subsidiaries in AllEnergy which at all times shall equal
100% in the aggregate) and not jointly, provide the
necessary funds to AMCI and NEI, respectively, to meet their
payment commitments under sections 2, 3, and 4 hereof.
5. No Guarantee of Indebtedness. This Agreement is not, and
nothing herein contained, and no action taken pursuant
hereto by Eastern, AMCI, NEES, or NEI shall be construed as,
or deemed to constitute, a direct or indirect guarantee by
Eastern, AMCI, NEES, NEI, or any one or more of them, to any
person or entity of the payment of Fleet Debt or any other
indebtedness, or of any liability or obligation of any kind
or character whatsoever of AllEnergy or any subsidiary of
AllEnergy; provided, however, that AllEnergy may deliver
copies of this Agreement to Fleet National Bank who shall be
entitled to rely thereon in extending credit to AllEnergy
under the Fleet Credit Agreement.
6. Waivers. None of the parties hereto shall be relieved of
any of its obligations or duties hereunder due to the
failure or delay on the part of AllEnergy in asserting or
enforcing any of its rights, or in making any claims or
demands, hereunder.
7. Amendments and Termination. This Agreement may be amended
or modified at any time by the parties hereto; provided,
however, that no such amendment or modification which
adversely affects the holders of Fleet Debt outstanding at
the time of execution thereof shall be binding on or in any
manner become effective with respect to such Fleet Debt
except with the prior written consent of the holders of not
<PAGE>
less than a majority in principal amount of Fleet Debt at
the time outstanding. This Agreement shall automatically
terminate on the second anniversary of the date hereof and
may be terminated by any party hereto upon 30 days prior
written notice to the other parties; provided, however, that
this Agreement shall not terminate until such time as all
Fleet Debt outstanding on or prior to the date of the giving
of notice of termination shall have been paid in full.
8. Successors. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns
and is also intended for the benefit of the holders from
time to time of the Fleet Debt and, notwithstanding that
such holders are not parties hereto, each such holder shall
be entitled to the full benefits of this Agreement and to
enforce the covenants and agreements contained therein.
This Agreement is not intended for the benefit of any person
other than the holders of Fleet Debt, and shall not confer
or be deemed to confer upon other such person any benefits,
rights or remedies hereunder.
9. Governing Law. This Agreement shall be governed by the Laws
of The Commonwealth of Massachusetts.
10. Reference is hereby made to the declaration of trust
establishing Eastern Enterprises (formerly Eastern Gas and
Fuel Associates) dated July 18, 1929, as amended, a copy of
which is on file in the office of the Secretary of the
Commonwealth of Massachusetts. The name "Eastern
Enterprises" refers to the trustees under said declaration
of trustees and not personally; and no trustee, shareholder,
officer or agent of Eastern Enterprises shall be held to any
personal liability in connection with the affairs of said
Eastern Enterprises, but the trust estate only is liable.
11. 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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as an instrument under
seal by their respective officers thereunto duly authorized as of
the date and year first written above.
ALLENERGY MARKETING COMPANY, L.L.C.
By: s/Marcy L. Reed
Its: Vice President and Treasurer
EASTERN ENTERPRISES NEW ENGLAND ELECTRIC SYSTEM
By: By: s/Alfred D. Houston
Its: Its: Executive Vice President
ALLENERGY MARKETING NEES ENERGY, INC.
COMPANY, INC.
By: By: s/John G. Cochrane
Its: Its: Treasurer
<PAGE>
Exhibit 10(d)(iii)
NEW ENGLAND POWER SERVICE COMPANY
25 Research Drive
Westborough, Massachusetts 01582
SERVICE CONTRACT
December 31, 1996
AllEnergy Marketing Company, L.L.C.
Three University Office Park
95 Sawyer Road
Waltham, MA 02154
New England Power Service Company (hereinafter called Service
Company) is a company engaged primarily in the rendering of
services to companies in the New England Electric System holding-
company system. The organization, conduct of business and method
of cost allocation of the Service Company are designed to meet the
requirements of Section 13 under the Public Utility Holding Company
Act of 1935 and the rules and regulations promulgated thereunder to
the end that services performed by the Service Company for said
associate companies will be rendered to them at cost, fairly and
equitably allocated. Services will be rendered by Service Company
only upon receipt from time to time of specific or general request
therefor. Said requests may always be modified or cancelled by you
at your discretion. The parties hereto agree as follows:
1. The Service Company agrees to furnish you upon the terms
and conditions herein set forth such of the services described in
Schedule 1 hereto as you may from time to time request. Service
Company will also furnish, if available, such services not
described in Schedule 1 as you may request. Notwithstanding the
foregoing the Service Company shall not furnish under this
agreement any engineering, construction, or maintenance services
for a nuclear generating plant.
2. The Service Company has and will maintain a staff
trained and experienced in the provision of services of a general
and administrative nature. In addition to the services of its own
staff, Service Company will, after consultation with you concerning
services to be rendered pursuant to your request, arrange for
services of non-affiliated experts, consultants, accountants and
attorneys.
3. All of the services rendered under this agreement will
be at actual cost thereof. Direct charges will be made for
services where a direct allocation of cost is possible. The
methods of determining such costs and the allocation thereof are
set forth in Schedule II hereto. These methods are reviewed
annually and more frequently, if appropriate. Such methods may be
modified or changed by Service Company without the necessity of an
amendment of this agreement provided that in each instance all
services rendered hereunder will be at actual cost thereof, fairly
and equitably allocated, and all in accordance with the
requirements of the Public Utility Holding Company Act of 1935 and
the rules and regulations and orders thereunder. You will be
advised from time to time of any material changes in such methods.
<PAGE>
4. Bills will be rendered during the first week of each
month covering amounts due for the month calculated on an estimated
basis using the actual expenses incurred during the previous month.
This estimated amount would be adjusted on the bill to be rendered
during the first week of the following month. Any amount remaining
unpaid after fifteen days following receipt of the bill shall bear
interest thereon from the date of the bill at an annual rate of 2%
above the lowest interest rate then being charged by the First
National Bank of Boston on 90 day commercial loans. Services will
be performed hereunder for not more than one year commencing
January 1, 1997, and continuing through December 31, 1997, unless
terminated at an earlier date by either party giving thirty days'
written notice to the other of such termination at the end of any
month.
5. This agreement will be subject to termination or
modification at any time to the extent its performance may conflict
with any federal or state law or any rule, regulation or order of
a federal or state regulatory body having jurisdiction. The
agreement shall be subject to approval of any federal or state
regulatory body whose approval is a legal prerequisite to its
execution and delivery or performance.
NEW ENGLAND POWER SERVICE COMPANY
s/Michael E. Jesanis
By:
Treasurer
Accepted 1/16/97
By: s/John H. Dickson
<PAGE>
SCHEDULE I
Description of Services Available from
New England Power Service Company
Accounting:
The keeping of accounts and collateral activities, including
billing, payroll and customer relations; preparation of
reports and preservation of records.
Auditing:
Periodic audits by Service Company auditors and the
furnishing of reports and recommendations.
Corporate and Corporate Records:
Cooperation with attorneys, officers and special counsel of
associate companies on corporate matters, financing,
regulation, contracts, claims and litigation. Services in
connection with stockholders' and directors' meetings and
keeping of corporate records.
Employee Relations:
Service re labor relations, personnel, wage and salary
schedules, employee training and safety and medical
programs.
Engineering:
Civil, mechanical, electrical, and other engineering
services; technical advice, design, installation,
supervision, planning, research, testing, operation of
communications, including microwave, and operation and
maintenance of specialized technical equipment.
Executive and Administrative:
Consultation and services in management and administration
of all aspects of electric utility business.
Information Systems:
Maintenance and operation of information systems and
equipment for accounting, engineering, administration and
other functions.
Insurance:
Development, placement and administration of insurance
coverages and employee benefit programs, including group
insurance and retirement annuities; property inspections and
valuations for insurance.
Intellectual Property:
Filing applications, owning, licensing, and holding licenses
for copyrights, patents, servicemarks, and trademarks for
associated companies.
Properties:
Services re acquisition and disposition of properties;
cooperation with attorneys of associate companies in title
examination and conveyancing; maintenance of property
records; and making property inventories and valuations.
<PAGE>
Power Supply:
Planning and other services for supply of electric power,
and negotiation of contracts therefore.
Public Information and Relations:
Services re information to and relations with the public,
including customers, security holders, employees, financial
analysts, rating agencies and investment firms.
Purchasing and Stores:
Services re purchase and storing of materials, supplies and
equipment.
Regulation:
Analysis of laws, rules and regulations and recommendations
for action hereunder; handling of matters with regulatory
and governmental authorities; preparation of applications
and registrations.
Systems:
Establishing of accounting and other procedures and
standards.
Taxes:
Service re federal, state and municipal taxes, preparation
of returns and handling of audits and claims by taxing
authorities.
Treasury and Statistical:
Services re financing of associate companies, both short and
long-term, determination of capital needs, and preparation
of financial and statistical reports.
<PAGE>
SCHEDULE II
Determination of Cost of Service and Allocation Thereof
Cost of service will be determined in accordance with the
Public Utility Holding Company Act of 1935 and the rules and
regulations and orders thereunder, and will include all costs of
doing business incurred by the Service Company.
Records will be maintained for each Department and Division
of the Service Company in order to accumulate all costs of doing
business and to determine the cost of service. These costs will
include wages and salaries of employees and related expenses such
as insurance, taxes, pensions and other employee welfare
expenses, and rent, light, heat, telephone, supplies, and other
housekeeping costs. In addition, records will be maintained of
general administrative expenses, which will include the costs of
operating the Service Company as a corporate entity.
Charges for services rendered and related expenses and non-
personal expenses (e.g., use of automotive equipment, etc.) will
be billed directly to the serviced companies, either individually
or, when the services performed are for a group for a group of
companies, by means of an equitable allocation formula. Each
formula will have an appropriate basis such as customers, meters,
employees, plant investments, inventories or operating revenues.
Charges for services will be determined from the time sheets
of employees and will be computed on the basis of each employee's
hourly rate plus a percentage factor to cover related expenses
and general administrative expenses. Records of such related
expenses and general administrative expenses will be maintained
and subjected to periodic review.
Out-of-pocket expenses which are incurred for the serviced
companies will be billed at cost. Charges for non-personal
expenses, such as for use of automobiles, trucks and heavy
equipment, will normally be computed on the basis of costs per
hour or per mile.
<PAGE>
<TABLE>
NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES
Statements of Consolidated Income
Period Ended June 30, 1997
(expressed in millions, rounded to hundred thousands of dollars)
(Unaudited, subject to adjustment)
<CAPTION>
Quarter Six Months
------- ----------
<S> <C> <C>
Operating revenue $577.6 $1,215.8
------ --------
Operating expenses:
Fuel for generation 85.8 185.1
Purchased electric energy 127.2 271.7
Other operation 141.1 265.0
Maintenance 39.5 70.5
Depreciation and amortization 59.1 125.1
Taxes, other than income taxes 36.2 76.0
Income taxes 22.1 60.8
------ --------
Total operating expenses 511.0 1,054.2
------ --------
Operating income 66.6 161.6
Other income:
Equity in income of generating companies 2.4 5.1
Other income (expense), net (3.1) (4.8)
------ --------
Operating and other income 65.9 161.9
------ --------
Interest:
Interest on long-term debt 26.8 54.3
Other interest 3.8 7.6
Allowance for borrowed funds used
during construction (.4) (1.0)
------ --------
Total interest 30.2 60.9
------ --------
Income after interest 35.7 101.0
Preferred dividends of subsidiaries 1.8 3.6
Minority interests 1.7 3.3
------ --------
Net income $ 32.2 $ 94.1
====== ========
</TABLE>
<PAGE>
<TABLE>
NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES
Consolidated Balance Sheet
At June 30, 1997
(expressed in millions, rounded to hundred thousands of dollars)
(Unaudited, subject to adjustment)
<CAPTION>
ASSETS
------
<S> <C>
Utility plant, at original cost $5,783.9
Less accumulated provisions for depreciation and amortization 1,921.9
--------
3,862.0
Construction work in progress 50.2
--------
Net utility plant 3,912.2
--------
Oil and gas properties, at full cost 1,291.3
Less accumulated provision for amortization 1,114.4
--------
Net oil and gas properties 176.9
--------
Investments:
Nuclear power companies, at equity 49.5
Other subsidiaries, at equity 43.2
Other investments 103.1
--------
Total investments 195.8
--------
Current assets:
Cash 4.0
Accounts receivable, less reserves of $20,793,000 229.6
Unbilled revenues 63.1
Fuel, materials, and supplies, at average cost 80.3
Prepaid and other current assets 78.2
--------
Total current assets 455.2
--------
Deferred charges and other assets 403.6
--------
$5,143.7
========
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common share equity:
Common shares, par value $1 per share:
Authorized - 150,000,000 shares
Outstanding - 64,969,652 shares $ 65.0
Paid-in capital 736.8
Retained earnings 904.8
Treasury stock - 149,238 shares (5.2)
Unrealized gain on securities, net 2.7
--------
Total common share equity 1,704.1
Minority interests in consolidated subsidiaries 46.2
Cumulative preferred stock of subsidiaries 126.2
Long-term debt 1,484.5
--------
Total capitalization 3,361.0
--------
Current liabilities:
Long-term debt due within one year 104.7
Short-term debt 170.8
Accounts payable 127.8
Accrued taxes 25.4
Accrued interest 24.6
Dividends payable 37.4
Other current liabilities 132.4
--------
Total current liabilities 623.1
--------
Deferred federal and state income taxes 724.7
Unamortized investment tax credits 90.7
Other reserves and deferred credits 344.2
--------
$5,143.7
========
</TABLE>
<PAGE>
<TABLE>
NEW ENGLAND ENERGY INCORPORATED
Statements of Income
Period Ended June 30, 1997
(expressed in millions, rounded to hundred thousands of dollars)
(Unaudited, Subject to Adjustment)
<CAPTION>
Quarter Six Months
------- ----------
<S> <C> <C>
Operating revenue:
Sales of fuel to an affiliate $ 11.8 $ 27.4
Loss passed on to an affiliate (6.6) (15.9)
Accrued loss to be passed on to an affiliate 7.4 14.0
Sales to nonaffiliates:
Oil 1.2 2.8
Gas 7.5 20.8
------ ------
Total operating revenue 21.3 49.1
------ ------
Operating expenses:
Purchases of fuel for an affiliate 5.2 11.5
Amortization of cost of fuel reserves 14.9 35.3
Production costs 1.2 2.4
------ ------
Total operating expenses 21.3 49.2
------ ------
Operating income/(loss) - (0.1)
Other income/(expense):
Interest expense (0.5) (1.2)
State taxes (0.8) (1.6)
------ ------
Operating and other income/(loss) (1.3) (2.8)
------ ------
Federal income taxes:
Current federal income taxes (0.3) 9.5
Deferred federal income taxes (0.7) (11.6)
------ ------
Net federal income taxes (1.0) (2.1)
------ ------
Net income $ (0.3) $ (0.7)
====== ======
</TABLE>
<PAGE>
<TABLE>
NEW ENGLAND ENERGY INCORPORATED
Balance Sheet
At June 30, 1997
(expressed in millions, rounded to hundred thousands of dollars)
(Unaudited, Subject to Adjustment)
<CAPTION>
ASSETS
------
<S> <C>
Current assets:
Cash, including temporary cash investments
of $3,500,000 with affiliated companies $ 3.7
Accounts receivable:
Accrued loss to be passed on to affiliate 16.9
Prepaid expenses 0.4
---------
Total current assets 21.0
---------
Property at cost:
Cost of fuel reserves:
Exploration and development costs:
Samedan 749.0
Dorchester 67.4
Cost of capital 453.7
Other 38.7
---------
1,308.8
Less-accumulated amortization (1,114.3)
---------
Net cost of fuel reserves 194.5
Work in process - Samedan 0.9
---------
Total property 195.4
---------
$ 216.4
=========
LIABILITIES AND PARENT COMPANY'S INVESTMENT
-------------------------------------------
Current liabilities:
Accrued exploration and development costs $ 18.4
Accounts payable 2.0
Accrued interest 0.3
Accrued taxes 9.6
---------
Total current liabilities 30.3
---------
Deferred income taxes 61.0
---------
Deferred credit 2.2
---------
Notes payable to banks under credit agreement 126.0
---------
Parent company's investment:
Subordinated notes payable to parent 22.1
Common stock, par value $1 per share, and
other paid-in capital 0.2
Accumulated deficit (25.4)
---------
Total parent company's investment (3.1)
---------
$ 216.4
=========
Accrued exploration and development costs:
Total
(All Samedan)
-------------
Exploration $11.8
Development 6.5
Work in process (0.5)
Advance 0.6
------
$18.4
======
</TABLE>
<PAGE>
<TABLE>
GRANITE STATE ENERGY, INC.
Statements of Income
(expressed in millions, rounded to hundred thousands of dollars)
Period Ended June 30, 1997
(Unaudited, subject to adjustment)
<CAPTION>
Quarter Six Months
------- ----------
<S> <C> <C>
Operating revenue $0.2 $ 0.3
---- -----
Operating expenses:
Purchased electric energy 0.2 0.3
Other operating expenses - 0.1
---- -----
Total operating expenses 0.2 0.4
---- -----
Net loss $0.0 $(0.1)
==== =====
</TABLE>
<PAGE>
<TABLE>
GRANITE STATE ENERGY, INC.
Balance Sheet
At June 30, 1997
(expressed in millions, rounded to hundred thousands of dollars)
(Unaudited, subject to adjustment)
<CAPTION>
ASSETS
------
<S> <C>
Current assets:
Customer accounts receivable and unbilled revenue $ 0.1
Prepaid taxes 0.1
-----
Total assets $ 0.2
=====
LIABILITIES AND PARENT COMPANY'S INVESTMENT
-------------------------------------------
Parent company's investment:
Common stock, par value $1 per share, and
subordinated notes payable to parent $ 0.4
Accumulated deficit (0.2)
-----
Total liabilities and parent company's investment $ 0.2
=====
</TABLE>
<PAGE>
<TABLE>
ALLENERGY MARKETING COMPANY, LLC
Consolidated Income Statements
Period Ended June 30, 1997
(expressed in millions, rounded to hundred thousands of dollars)
(Unaudited, subject to adjustment)
<CAPTION>
Quarter Six Months
------- ----------
<S> <C> <C>
Revenues $ 9.0 $30.5
----- -----
Operating expenses
Cost of sales 8.7 29.3
Selling, general and administrative 3.5 6.1
Consulting 0.3 0.8
Member service charges 0.1 0.3
----- -----
Total operating expenses 12.6 36.5
----- -----
Operating loss (3.6) (6.0)
Interest income 0.1 0.1
----- -----
Net loss $(3.5) $(5.9)
===== =====
</TABLE>
<PAGE>
<TABLE>
ALLENERGY MARKETING COMPANY, LLC
Consolidated Balance Sheet
At June 30, 1997
(expressed in millions, rounded to hundred thousands of dollars)
(Unaudited, subject to adjustment)
<CAPTION>
Assets
------
<S> <C>
Cash $ 3.0
Accounts receivable 3.6
Accounts receivable - members 0.1
Inventory 4.1
Prepaid expenses 0.2
Other current assets 0.8
-----
Total current assets 11.8
Fixed assets 0.9
Goodwill 0.3
-----
Total assets $13.0
=====
Liabilities and Members' Equity
-------------------------------
Accounts payable $ 0.6
Accounts payable - members 0.2
Accrued expenses 2.8
Unearned revenue 0.5
Other current liabilities 0.2
-----
Total current liabilities 4.3
Capital lease obligation 0.1
-----
Total liabilities 4.4
Members' equity 8.6
-----
Total liabilities and members' equity $13.0
=====
</TABLE>
