<PAGE>
File No. 70-9417
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
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)
<PAGE>
Form U-1 Application/Declaration filed under the Public Utility Holding
Company Act of 1935, File No. 70-9417, as previously amended, is hereby
further amended as follows:
Item 1, Description of Proposed Transactions is amended as follows:
The second paragraph is amended to read:
Two of NEES' subsidiaries currently occupy office complexes under long-
term leases with John Hancock Life Insurance Company (John Hancock). John
Hancock has indicated its willingness to sell its fee simple interest in the
properties to NEES or a subsidiary thereof. As those NEES subsidiaries
engaged in businesses other than the distribution and transmission of electric
energy expand their operations, they may require new or additional office
space. It may be desirable to own and occupy such space, as opposed to
renting. Therefore, NEES believes it may be most efficient to concentrate
such property ownership interests in a new subsidiary (Property Company).
Property Company will be organized as a Massachusetts business trust with
transferable shares, a Massachusetts corporation, or a limited liability
company, with an initial capitalization of not exceeding $50 million.
Property Company may acquire the initial properties, described below, among
others up to a total investment of $50 million. NEES proposes to make an
initial equity investment in Property Company of at least $1 million and not
more than $50 million. The ultimate debt-equity ratio of Property Company,
and whether NEES' further equity interest will be represented by stock
purchases, capital contributions, or open account advances, will depend on the
nature of capital markets at the time of closing.
The fourth paragraph is amended as follows:
It is currently contemplated that after the acquisitions, the current
leasing arrangements will remain in place, with Property Company merely
replacing John Hancock as landlord under the terms and conditions remaining as
previously negotiated in arms-length bargaining between the unaffiliated
parties. Therefore, the cost experienced by Massachusetts Electric Company
with respect to the North Andover Service Building and by New England Power
Service Company with respect to the Headquarters Complex will remain the same
as they would have been if John Hancock continued as landlord. The costs
experienced by the Service Company will continue to be spread among those
companies to whom it renders services in accordance with Section 13(b) of the
Act and regulations issued thereunder.
The following paragraphs are added:
Properties acquired by the Property Company, including the service
building and the headquarters complex, may be leased to non-associate
companies if they are not required for business purposes of associate
companies.
The Property related activities are similar to those approved by the
Commission in the past under the standards of the Public Utility Holding
Company Act. See American Gas and Electric Company, (HCAR No. 35-6333)
Opinion of the Commission dated December 28, 1945; New Century Energies, Inc.,
(HCAR No. 35-26748) Memorandum, Opinion, and Order of the Commission dated
August 1, 1997.
Item 3, Applicable Statutory Provisions, is amended by adding the following:
The allocation of costs experienced by the Service Company will remain
subject to Section 13(b).
Item 6, Exhibits and Financial Statements, is amended by supplying the
following exhibit:
F Opinion of Counsel
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this Amendment No. 2 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: January 22, 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.
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
F Opinion of Counsel Filed herewith
<PAGE>
Exhibit F
25 Research Drive, Westborough, Massachusetts 01582
===================================================
January 22, 1999
Securities and Exchange Commission
450 Fifth Street, N. W.
Washington, DC 20549
RE: File No. 70-9417
Dear Commissioners:
New England Electric System (NEES) has filed a statement on Form U-1
with your Commission dated November 4, 1998, an Amendment No. 1 thereto dated
December 23, 1998, and Amendment No. 2 thereto dated January 22, 1999,
requesting authorization for the organization of and investment by NEES in one
or more new subsidiaries (the Property Company) to acquire office space
currently occupied or to be occupied in the future by NEES subsidiaries. The
initial acquisitions by the Property Company will be office complexes
currently under long-term leases with John Hancock Life Insurance Company, all
as more fully set forth in the Application/Declaration as amended.
Based upon the foregoing and subject to appropriate action by the
Securities and Exchange Commission under the Act, it is my opinion that, in
the event the proposed transactions are consummated in accordance with the
Statement:
(a) All state laws applicable to the proposed transaction will have
been complied with;
(b) The Property Company will be validly organized and duly existing;
(c) The ownership interest in the Property Company acquired by NEES
will be validly issued, fully paid, and nonassessable, and NEES
will be entitled to the rights and privileges appertaining thereto
set forth in the documents defining such rights and privileges;
(d) NEES will legally acquire the interest in the Property Company;
(e) The Property Company will legally acquire the Service Building and
the Headquarters Complex from John Hancock Mutual Life Insurance
Company;
(f) The consummation of the proposed transactions will not violate the
legal rights of the holders of any securities issued by NEES, the
Property Company, or any associate company thereof.
I hereby consent to the use of this opinion in connection with the
statement on Form U-1, as amended, filed with the Securities and Exchange
Commission with reference to the proposed transactions.
Very truly yours,
s/Robert King Wulff
Robert King Wulff
Corporation Counsel
