<PAGE>
File No. 70-8803
CERTIFICATE OF NOTIFICATION
(Rule 24)
SECURITIES AND EXCHANGE COMMISSION
BY
NEES Energy, Inc.
In accordance with the order of the Securities and Exchange Commission
dated May 23, 1996, the following is a report for the first quarter of 1999:
1. NEES Energy, Inc. (NEES Energy), a Massachusetts Corporation,
was formed on June 14, 1996. The corporation was capitalized
on August 9, 1996 when one thousand shares of NEES Energy
common stock were issued and sold to New England Electric
System (NEES).
2. As of March 31, 1999 NEES had purchased 1,000 shares of NEES
Energy common stock and made subordinated loans and other
paid-in capital contributions to NEES Energy totaling
$155,887,000 and $10,805,000, respectively.
3. As of March 31, 1999 NEES Energy had no permanent personnel
and during the first quarter of 1999 there were no
individuals assigned on a substantially full-time basis.
4. During the first quarter of 1999 NEES Energy had no kilowatt
hours sold or marketed.
5. In December 1996, following SEC approval of a joint venture
with a subsidiary of Eastern Enterprises (HCAR No. 35-
26633), NEES Energy invested in AllEnergy Marketing Company,
L.L.C.(AllEnergy), a limited liability corporation. AllEnergy
is engaged in the business of marketing and selling energy
commodities and energy related services. In December of
1997, NEES Energy increased its ownership share to 99%.
6. During the second quarter of 1998, a new energy related
company was formed in Delaware and is 100% owned by NEES
Energy; this company is also named AllEnergy Marketing Co.,
L.L.C. (AllEnergy DE). Effective January 1, 1999, AllEnergy
Marketing Co., L.L.C. was merged with and into AllEnergy DE.
7. Attached in Exhibits A through C are a consolidated balance
sheet as of March 31, 1999, consolidated income statements
and statements of cash flows for the quarter and twelve
months ended March 31, 1999.
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, the undersigned company has duly caused this certificate of
notification (Commission's File No. 70-8803) to be signed on its behalf by
the undersigned officer thereunto duly authorized.
By: s/ John G. Cochrane
______________________________
John G. Cochrane
Treasurer
Date: June 1, 1999
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A Consolidated Balance Sheet at Filed
March 31, 1999 herewith
(Unaudited, subject to adjustment)
B1 Consolidated Statement of Income and Filed
Accumulated Deficit For the Quarter herewith
ended March 31, 1999
(Unaudited, Subject to Adjustment)
C1 Consolidated Statement of Cash Flows Filed
For the Quarter Ended March 31, 1999 herewith
(Unaudited, Subject to Adjustment)
B2 Consolidated Statement of Income and Filed
Accumulated Deficit For the Twelve herewith
Months ended March 31, 1999
(Unaudited, Subject to Adjustment)
C2 Consolidated Statement of Cash Flows Filed
For the Twelve Months March 31, 1999 herewith
(Unaudited, Subject to Adjustment)
<PAGE>
Exhibit A
<TABLE>
NEES Energy, Inc.
Consolidated Balance Sheet
(Thousands of Dollars)
As of March 31, 1999
(Unaudited, Subject to Adjustment)
<CAPTION>
ASSETS
- ------
<S> <C>
Current assets:
Cash $ 6,899
Accounts receivable and unbilled revenue, less
reserves of $1,273 54,539
Inventory 8,441
Prepaid and other current assets 10,828
--------
Total current assets 80,707
--------
Fixed assets 13,303
Less accumulated depreciation (1,652)
--------
Net fixed assets 11,651
--------
Other investments 777
Goodwill, net of amortization 92,594
Deferred federal and state income taxes 823
Other assets 3,488
--------
$190,040
========
LIABILITIES AND CAPITALIZATION
- ------------------------------
Current liabilities:
Long term debt due in one year $ 308
Accounts payable (including $522 to affiliates) 15,941
Accrued liabilities 20,970
--------
Total current liabilities 37,219
Long term debt 748
Other long-term liabilities 7,718
--------
Total liabilities 45,685
--------
Parent company's investment:
Subordinated notes payable to parent 155,887
Common stock, par value $1 per share 1
Other paid-in capital 10,805
Accumulated deficit (22,338)
--------
Total parent company's investment 144,355
--------
$190,040
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</TABLE>
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Exhibit B1
<TABLE>
NEES ENERGY, INC.
Consolidated Statement of Income and Accumulated Deficit
(Thousands of Dollars)
For the Quarter Ended March 31, 1999
(Unaudited, Subject to Adjustment)
<CAPTION>
<S> <C>
INCOME
Revenue (1) $101,468
--------
Total income 101,468
--------
EXPENSES
Operating expenses
Cost of sales 88,759
Depreciation 1,461
Selling, general and administrative expenses 10,998
Income tax 168
--------
Total operating expenses 101,386
--------
Operating income 82
Other income (expense), net 53
--------
Net income 135
Accumulated deficit at beginning of period (22,473)
--------
Accumulated deficit at end of period $(22,338)
========
(1) Represents revenue of subsidiary (AllEnergy Marketing Co., L.L.C.)
</TABLE>
<PAGE>
Exhibit C1
<TABLE>
NEES Energy, Inc.
Consolidated Statement of Cash Flows
(Thousands of Dollars)
For the Quarter Ended March 31, 1999
(Unaudited, Subject to Adjustment)
<CAPTION>
<S> <C>
Operating activities:
Net income $ 135
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,461
(Increase) decrease in accounts receivable and
unbilled revenue (13,076)
(Increase) decrease in inventory 6,912
(Increase) decrease in prepaid and other
current assets 4,140
Increase (decrease) in accounts payable 2,862
Increase (decrease) in other current liabilities (3,000)
Other, net (1,558)
--------
Net cash provided by (used in) operating activities $ (2,124)
--------
Investing activities:
Fixed asset expenditures $ (309)
Investment in Griffith Consumers (78,605)
Acquisition of Barclay & Fowler assets (3,011)
Purchase of AllEnergy minority interest from
NEES Global, Inc. (456)
--------
Net cash used in investing activities $(82,381)
--------
Financing activities:
Subordinated notes payable to parent-issues $87,290
Increase (decrease) in long-term debt (79)
--------
Net cash provided by financing activities $87,211
--------
Net increase (decrease) in cash and cash equivalents $ 2,706
Cash and cash equivalents at beginning of period 4,193
--------
Cash and cash equivalents at end of period $ 6,899
========
</TABLE>
<PAGE>
Exhibit B2
<TABLE>
NEES ENERGY, INC.
Consolidated Statement of Income and Accumulated Deficit
(Thousands of Dollars)
For the Twelve Months Ended March 31, 1999
(Unaudited, Subject to Adjustment)
<CAPTION>
<S> <C>
INCOME
Revenue (1) $237,052
--------
Total income 237,052
--------
EXPENSES
Operating expenses
Cost of sales 213,994
Depreciation 2,550
Selling, general and administrative expenses 33,108
Income tax (4,182)
--------
Total operating expenses 245,470
--------
Operating income (loss) (8,418)
Other income (expense), net 539
--------
Net income/(loss) (7,879)
Accumulated deficit at beginning of period (14,459)
--------
Accumulated deficit at end of period $(22,338)
========
(1) Represents revenue of subsidiary (AllEnergy Marketing Co., L.L.C.)
</TABLE>
<PAGE>
Exhibit C2
<TABLE>
NEES ENERGY, INC.
Statement of Cash Flows
(Thousands of Dollars)
For the Twelve Months Ended March 31, 1999
(Unaudited, Subject to Adjustment)
<CAPTION>
<S> <C>
Operating activities:
Net income/(loss) $ (7,879)
Adjustments to reconcile net income/(loss) to
net cash provided by operating activities:
Depreciation and amortization 2,550
Deferred federal and state income taxes (166)
(Increase) decrease in accounts receivable and
unbilled revenue (26,034)
(Increase) decrease in inventory (3,637)
(Increase) decrease in prepaid and other
current assets (5,099)
Increase (decrease) in accounts payable 3,273
Increase (decrease) in other current liabilities 7,852
Other, net (4,825)
---------
Net cash provided by (used in) operating activities $ (33,965)
---------
Investing activities:
Fixed asset expenditures $ (2,368)
Investment in Weatherwise (360)
Acquisition of Northeastern Fuels fixed assets (3,350)
Investment in PAL Energy (13,645)
Investment in Griffith Consumers (78,605)
Acquisition of Barclay & Fowler assets (3,011)
Purchase of AllEnergy minority interest from
NEES Global, Inc. (456)
---------
Net cash used in investing activities $(101,795)
---------
Financing Activities:
Subordinated notes payable to parent-issues $ 126,224
Capital contribution from parent 10,805
Increase in long-term debt 407
---------
Net cash provided by financing activities $ 137,436
---------
Net increase (decrease) in cash and cash equivalents $ 1,676
Cash and cash equivalents at beginning of period 5,223
---------
Cash and cash equivalents at end of period $ 6,899
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</TABLE>
