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File No. 70-9417
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM U-1
APPLICATION/DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
NEW ENGLAND ELECTRIC SYSTEM
(Name of company filing this statement)
25 Research Drive
Westborough, Massachusetts 01582
(Address of principal executive offices)
NEW ENGLAND ELECTRIC SYSTEM
(Name of top registered holding company parent of applicant)
John G. Cochrane Kirk L. Ramsauer
Treasurer Associate General Counsel
25 Research Drive 25 Research Drive
Westborough, MA 01582 Westborough, MA 01582
(Names and addresses of agents for service)
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Form U-1 Application/Declaration dated November 4, 1998 (Commission's
File No. 70-9417), as amended, was declared effective by Order of the
Commission dated January 27, 1999 (HCAR No. 26969). The
Application/Declaration is hereby further amended as follows:
The Commission's Order provided in part: "NEES proposes to form one or
more new special purpose subsidiaries ("Property Companies") to acquire
interests in office and warehouse space ("Real Estate Interests") that would
be leased to associate companies.... NEES currently contemplates indirectly
acquiring two facilities ("Facilities"), currently leased under long-term
lease agreements ("Agreements") to two NEES subsidiaries, from John Hancock
Life Insurance Company ("Owner").... After its acquisition from the Owner,
each Facility will be leased back to MEC or the Service Company, as the case
may be, for the remainder of the term provided for in the Agreement for that
Facility and under the same terms and conditions."
In accordance with the Commission's order, NEES organized Metrowest
Realty, L.L.C. (Metrowest Realty) as its first Property Company and
capitalized it with a $1 million capital contribution and open account
advances of $10 million.
In accordance with the Commission's Order, Metrowest Realty acquired
each of the listed facilities which continue to be occupied by MEC and the
Service Company, respectively, in accordance with their pre-existing leases
and under the same terms and conditions.
Given the proposed merger of NEES with The National Grid Group plc (see
File No. 70-9441), the proposed merger with Eastern Utilities Associates, and
the restructuring and reconfiguration of the electric utility industry arising
from opening up markets to competition, the utilization of assets held by the
Property Company (including Metrowest Realty) may change from time to time in
the future. In addition, these changes in the industry and the organization
of the holding company system may provide additional needs for real estate
investments or require the sale of existing real estate which will directly or
indirectly benefit the utility operations of the system.
Therefore, NEES and Metrowest Realty are seeking a supplemental order
permitting:
(a) additional flexibility to Metrowest Realty or one or more
additional Property Companies in future transactions with nonaffiliates as
they may become necessary or advantageous; and
(b) other NEES subsidiaries to engage in property transactions.
In particular, NEES and the Property Company request that Metrowest
Realty or such additional Property Companies have authority to acquire or
lease any interest in real estate for use by associate utility and nonutility
companies, and that any unused or unneeded property (including if applicable
the service building and the headquarters complex) may be sold, leased, or
otherwise disposed of, in whole or in part, to other associate companies or to
nonassociate companies at market rates or held and managed by the Property
Company for future sale or use.
The Property Companies may also negotiate the terms and conditions for
real estate transactions as agent for any associate company in its dealings
with associate or nonassociate companies.
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The disposition to nonaffiliated third parties of office space exceeding
the needs of utilities has been found to meet standards of the Public Utility
Holding Company Act of 1935 in the past. See Central Power and Light Company
(HCAR No. 26408), Supplemental Order of the Commission dated November 13,
1995; Southwestern Electric Power Company, et al (HCAR No. 26705), Order of
the Commission dated April 15, 1997. Other property related activities have
also been approved. See American Gas and Electric Company (HCAR No. 35-6333),
Opinion of the Commission dated December 28, 1945; in which it was noted that
a real estate company would provide flexibility in the purchase and
disposition of real estate and would avoid the complications under the
provisions of mortgages of the operating companies.
NEES requests authority to capitalize the Property Companies in an
amount not exceeding $50 million.
Item 5. Procedure
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It is requested that the Commission take action with respect to this
Post-Effective Amendment No. 1 without a hearing being held and that this
statement become effective and be granted on or before July 5, 1999, or as
soon thereafter as possible.
The Companies (1) do not request a recommended decision by a hearing
officer, (2) do not request a recommended decision by any other responsible
officer of the Commission, (3) hereby specify that the Division of Corporate
Regulation may assist in the preparation of the Commission's decision, and (4)
hereby request that there be no 30-day waiting period between the date of
issuance of the Commission's order and the date on which it is to become
effective.
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SIGNATURE
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Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this Post-Effective Amendment
No. 1 to Form U-1 Application/Declaration (Commission's File No. 70-9417) to
be signed on its behalf, as indicated by the undersigned officer thereunto
duly authorized.
NEW ENGLAND ELECTRIC SYSTEM
s/ John G. Cochrane
By
John G. Cochrane
Treasurer
Date: June 3, 1999
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.
