File No. 70-
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM U-1
APPLICATION/DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
YANKEE ATOMIC ELECTRIC COMPANY
19 Midstate Drive, Suite 200
Auburn, Massachusetts 01501
(Name and principal executive office of
company filing this statement)
NEW ENGLAND ELECTRIC SYSTEM
NORTHEAST UTILITIES
(Name of top registered holding companies)
Thomas W. Bennet, Jr. Kirk L. Ramsauer
Treasurer General Counsel and Clerk
19 Midstate Drive, Suite 200 25 Research Drive
Auburn, Massachusetts 01501 Westborough, Massachusetts 01582
(Names and addresses of agents for service)
The Commission if requested to send copies of all notices, orders and
Communications in connection with this declaration to:
John A. Ritsher, Esq.
Ropes & Gray
One International Place
Boston, MA 02110
<PAGE>
Item 1. Description of Proposed Transactions
- --------------------------------------------
A. Summary of Proposed Transactions
Yankee Atomic Electric Company ("Yankee Atomic" or the
"Company") proposes to repurchase pro rata from its stockholders
(all of which are affiliates of Yankee Atomic) 95% of its
presently outstanding Common Stock at a purchase price of $100
per share, an amount equal to the book value per share on June
30, 1999, on the condition that all its Stockholders tender their
allotment of shares. The Company intends to accomplish this
repurchase in one or more steps over the next one to two years.
Thereafter, the Company will maintain minimal equity until it
ultimately prepares to liquidate and wrap up its affairs.
B. Description of Yankee Atomic Electric Company
- ------------------------------------------------
Yankee Atomic, an electric utility company, was incorporated
as a Massachusetts electric utility in 1954. The organization of
Yankee Atomic was sponsored by a group of New England utilities
for the purpose of constructing and operating New England's first
atomic powered electric generating plant, located in Rowe,
Massachusetts (the Rowe plant). The Rowe plant was licensed to
operate by the U.S. Nuclear Regulatory Commission (NRC). The
Rowe plant operated commercially from 1961 until February, 1992,
when it was permanently removed from service. The Rowe plant is
currently being dismantled and decommissioned. The NRC regulates
the ongoing decommissioning and spent fuel storage activities at
the Rowe plant.
The ten sponsoring utilities own the entire common capital
stock of Yankee Atomic in the percentages shown in the table
below. The sponsoring utilities have each entered into power
contracts with Yankee Atomic (the Power Contracts, see Exhibit B
hereto) that entitle them to and obligate them to purchase the
output of the Rowe plant in the same percentages.
<PAGE>
<TABLE>
<CAPTION>
Sponsoring Company Holding Company Percentage of Stock & Power
- --------------- ------------ ----------------------
<S> <C> <C>
New England Power Co. New England Electric 30.0%
The Conn. Lt. & Pwr Co. Northeast Utilities 24.5%
Public Service Co. of NH Northeast Utilities 7.0%
Western Mass. Elec. Co. Northeast Utilities 7.0%
Boston Edison Co. BECo - NSTAR 9.5%
Central Maine Power Co. CMP Group 9.5%
Montaup Electric Co. Eastern Utilities 4.5%
Commonwealth Elec. Co. Commonwealth Energy System 2.5%
Cambridge Elect. Lt. Co. Commonwealth Energy System 2.0%
Central Vt. Public Service Corp. Not Applicable 3.5%
----
100%
</TABLE>
B. Description of Yankee Atomic Electric Company (continued)
------------------------------------------------------------
In addition to owning and operating the Rowe plant, Yankee
Atomic in 1968 was authorized to operate its Nuclear Services
Division as a service company to provide engineering services at
cost to the Rowe plant and other nuclear plants owned by the
Company's affiliates. The Nuclear Services Division was sold on
December 1, 1997.
C. Background
--------------
Yankee Atomic's current capital consists of $15,340,000 of
equity evidenced by 153,400 shares of Common Stock, $100 par
value per share, which are held by the ten sponsoring companies
in the proportions indicated above. (See Exhibit I-1).
As essentially a single purpose utility corporation, Yankee
Atomic's economic life was primarily keyed to the operating life
of its plant. When the plant ceased operation, the Company no
longer had any electric revenue producing business and its
primary activity since 1992 has been overseeing the
decommissioning of the Rowe plant and the management of the
Nuclear Services Division. As noted above, the Nuclear Services
Division was sold in December, 1997. As a single purpose utility
corporation there have been many corporate end of life issues.
These issues required advanced financial planning to ensure that
all costs associated to the Company's activities are paid for by
the Sponsoring utilities of the Company for the electrical energy
output produced over its life and that all assets are properly
accounted for and depreciated. Such proper financial planning
will allow an orderly winding-up of the Company's business to be
accomplished concurrently with the decommissioning of the plant.
The major future cash requirements which are not yet fully funded
are the decommissioning of the plant, including interim storage
of spent fuel. Decommissioning is being funded under the Power
Contracts over the period ending June 30, 2000 approved by FERC
in docket ER95-835-000 with monthly cash payments paid by the
Sponsoring utilities to the decommissioning trust. In the event
additional decommissioning funds are needed at any future period,
the Power Contracts impose a non-cancelable obligation on the
Sponsoring utilities to pay all decommissioning costs.
In addition, there are balance sheet adjustments which must
be made so that all assets are appropriately reduced to properly
reflect their loss of value when the plant ceased to operate.
The original plant including major capital additions and all
tangible assets of the Company are being amortized as authorized
by FERC as operating expenses during the remaining license
lifetime of the Plant. The recovery of all investments and
assets have been approved by FERC in docket ER-95-835-000 and
will be fully recovered in cost of service rates by June 30,
2000. In the event additional cost of service (operating and
expense) requirements are needed at any future period, the Power
Contracts impose a non-cancelable obligation on the Sponsoring
utilities to pay all cost of service expenses.
<PAGE>
Because no additional capital funds are required to
amortize any of these assets or to fund any of those remaining
end of life obligations, Yankee Atomic believes that appropriate
steps should be taken to significantly reduce the Company's
outstanding equity contemporaneously with its write-down of its
assets.
C. Background (continued)
--------------------------------
Discussion: The Company's capital structure as of June 30, 1999
was as follows:
<TABLE>
<CAPTION>
Component ($000) % of Total
- --------- ------ ----------
<S> <C> <C>
Bank Debt $0 0%
Common Equity $15,340,000 100%
Total $15,340,000 100%
</TABLE>
Item 2. Fees, Commissions and Expenses.
- ----------------------------------------
Estimated expenses of Yankee Atomic in connection with the
repurchase of stock are shown on Exhibit G.
Item 3. Applicable Statutory Provisions.
----------------------------------------
Yankee Atomic is an indirect subsidiary of New England
Electric System and of Northeast Utilities, each of which is a
registered holding company. The acquisition of the Company's
common stock from its stockholders is therefore subject to the
provisions of Section 12(c) of the Act and of Rules 42 and 46
thereunder.
<PAGE>
Item 4. Regulatory Approval.
----------------------------
No other state commission or any Federal Commission, other
than the Securities and Exchange Commission, has jurisdiction
over the proposed transactions.
Item 5. Procedure.
-------------------
Yankee Atomic does not request a hearing on this
Declaration and requests that the Commission issue its order as
soon as practicable after the filing hereof.
Without prejudice to its right to modify the same if a hearing
should be ordered on this Declaration, Yankee Atomic hereby makes
the following specifications required by paragraph (B) of Item 5
of Form U-1;
1. There should not be a recommended decision by a hearing
officer or any other responsible officer of the Commission.
2. The Division of Corporate Regulation may assist in the
preparation of the Commission's decision.
3. There should not be a 30-day waiting period between
issuance of the Commission's order and the date on which it is to
become effective.
Item 6. Exhibits and Financial Statements.
- ------------------------------------------
(a) EXHIBITS Filed herewith:
A-1 Composite Form of Power Contract, as amended to date
B-1 Long-Term Financial Projections through 2000
F-I Opinion of Ropes & Gray as to matters required by
Instruction F- I to Exhibits to Form U-1
G-1 Yankee Atomic's Estimated Fees and Expenses
H. Proposed Form of Notice
<PAGE>
(b) FINANCIAL STATEMENTS
1-1 Balance Sheet of Yankee Atomic as of June 30, 1999.
1-2 Statement of Earnings and Retained Earnings of Yankee
Atomic for the period ending June 30, 1999.
Financial Statements of the top registered holding
companies, New England Electric System and Northeast Utilities,
have been omitted as not being necessary to a consideration of
this application.
Item 7. Information as to Environmental Effects.
- ------------------------------------------------
The proposed transactions do not involve a major Federal
action significantly affecting the quality of the human
environment.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
Declaration to be signed on its behalf by the undersigned
thereunto duly authorized.
YANKEE ATOMIC ELECTRIC COMPANY
s/Thomas W. Bennet
By:_________________________________
Thomas W. Bennet, Jr., Vice President,
Treasurer, and Chief Financial Officer
October 19, 1999
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ------------ ------
Financial Statements
--------------------
A-1 Composite Form of Power Contract Filed herewith
as amended to date
B-1 Long-Term Financial Projections Filed herewith
through 2000
F-I Opinion of Ropes & Gray as to
matters required by Instruction Filed herewith
F- I to Exhibits to Form U-1
G-1 Yankee Atomic's Estimated Fees Filed herewith
and Expenses
H. Proposed Form of Notice Filed herewith
Financial Statements
- --------------------
1-1 Balance Sheet of Yankee Atomic Filed herewith
as of June 30, 1999
1-2 Statement of Earnings and Filed herewith
Retained Earnings of Yankee
Atomic for the period ending
June 30, 1999
Composite Conformed Copy
------------------------
Yankee Atomic Electric Company
POWER CONTRACT
[The following is a composite Power Contract as amended
through Amendment No. 7 dated as of February 1, 1992. Please
note that the "whereas" clauses for each amendment have been
omitted, and that conforming signature data for the original
counterpart only is included in the Appendix. Also please note
that Amendment No. 3 restated the entire power contract. This
composite power contract has been prepared as a resource tool and
is not the formal contract among the parties.]
POWER CONTRACT dated June 30, 1959, as revised April 1,
1975, between YANKEE ATOMIC ELECTRIC COMPANY ("Yankee") and (the
names of the Customers appear in the attached Appendix) (the
"Customer").
"Yankee is a Massachusetts electric company, organized in
1954, which has constructed and placed in operation a nuclear
power plant, the output of which is sold to the New England
utilities which are its stockholders. The plant is located at a
site owned by Yankee in Rowe, Massachusetts, and consists of a
pressurized water reactor and associated steam electric
generating, transformation and auxiliary equipment have a net
electrical capacity of 176,000 KW (the "plant"). The Atomic
<PAGE>
Energy Commission has authorized operation of the plant during an
initial 40-year term extending to November 4, 1997, pursuant to
License No. DPR-3.
The percentages of Yankee's outstanding stock held by the
Customer and other stockholders of Yankee and the percentages of
the capacity and net electrical output of the plant being
purchased by them are as follows:
<TABLE>
<CAPTION>
Stock Power
Percentage Percentage
<S> <C> <C>
New England Power Company 30.0% 30.0%
The Connecticut Light and Power Company 24.5* 24.5*
Boston Edison Company 9.5 9.5
Central Maine Power Company 9.5 ---**
Western Massachusetts Electric Company 7.0 7.0
Public Service Company of New Hampshire 7.0 16.5**
Montaup Electric Company 4.5 4.5
Commonwealth Electric Company 2.5 2.5
Cambridge Electric Light Company 2.0 2.0
Central Vermont Public Service Corporation 3.5 3.5
100.0% 100.0%
</TABLE>
*Represents the consolidation of two prior existing contracts,
one with The Connecticut Light and Power Company for 15% and one
with The Hartford Electric Light Company for 9.5%, those two
companies having merged.
<PAGE>
**Public Service Company of New Hampshire has agreed to supply
power to Central Maine Power Company in amounts equivalent to
9.5% of the net electrical output of the Yankee plant, after
appropriate allowance for transmission losses.
The parties hereto agree as follows:
1. Scope of Contract
-----------------
Yankee will sell and deliver to the Customer and the
Customer will take and pay for its power percentage of the net
electrical output of the plant during the term of this contract.
2. Term of Contract
----------------
This contract shall continue in full force and effect until
the expiration of any license as issued by the Nuclear Regulatory
Commission, or any successor agency, with respect to the plant
under applicable provisions of the Atomic Energy Act of 1954, as
amended from time to time, provided, however, that if the
stockholders of Yankee, by vote of not less than 75% in interest
of the outstanding stock having general voting rights, shall at
any time vote to discontinue the operation of the plant or to
liquidate Yankee and wind up its affairs, the obligations of the
parties hereunder shall thereupon terminate. Notwithstanding the
foregoing, the applicable provisions of this contract shall
continue in effect after any termination hereof to the extent
<PAGE>
necessary (I) to complete the billings and payments required
hereunder with respect to the Customer's obligation to pay its
power percentage of the full cost of decommissioning the plant in
accordance herewith and (ii) to permit final billings and
adjustments hereunder with respect to all other obligations of
the parties hereunder, including all billings and adjustments
with respect to the recovery of Yankee's total cost of service,
as provided in Section 6 hereof, until the non-salvageable
investment in plant, nuclear fuel and materials and supplies or
other assets has been fully amortized in accordance herewith.
3. Operation of the Plant
----------------------
Yankee will operate and maintain the plant in accordance
with good utility practice and all applicable laws and rules and
regulations thereunder, including the applicable provisions of
the Atomic Energy Act of 1954.
Yankee reserves the exclusive right to control scheduling of
the operation and maintenance of the plant, including outages for
inspection, maintenance, refueling, and repairs and replacements.
Subject to the foregoing, and until otherwise determined by
Yankee's board of directors, the plant shall be subject to
<PAGE>
central dispatch pursuant to Section 12 of the New England Power
Pool Agreement dated as of September 1, 1971, as from time to
time amended.
4. Customer's Entitlement
---------------------
The Customer shall be entitled, throughout the term of this
contract, to its power percentage of the capacity and net
electrical output of the plant.
5. Deliveries and Metering.
-----------------------
Deliveries will be made in the form of three-phase, 60-
cycle, alternating current at a nominal voltage of 115,000 volts,
at a step-up substation owned by Yankee at the plant site. The
Customer will make suitable arrangements for the transmission of
the electricity so delivered to it by Yankee.
Yankee will supply all necessary metering equipment for
determining the quantity and conditions of supply of all
electricity delivered hereunder, and will maintain the accuracy
of such equipment within limits of 2% up or down. In addition to
regular routine tests, Yankee will have any such meter tested at
any time upon the written request of the Customer, and if such
meter shall prove to be accurate within 2% up or down, the
expense of the test shall be borne by the Customer. Yankee will
<PAGE>
furnish the Customer monthly, or oftener if requested by the
Customer, with a summary of the meter readings relating to the
services rendered hereunder, and upon request will make available
its metering records for the Customer's inspection and review.
6. Payment
------
With respect to each month commencing on and after April 1,
1985, the Customer will pay Yankee an amount equal to the
Customer's power percentage of the total cost of service for such
month to all customers of Yankee.
The "total cost of service" for any month shall be the sum
of (a) Yankee's operating expenses for such month with respect to
the plant, plus (b) an amount equal to one-twelfth of the
composite percentage for such month of the net plant rate base.
"Uniform System" shall mean the Uniform System of Accounts
prescribed by the Federal Energy Regulatory Commission for Class
A and Class B Public Utilities and Licensees, as from time to
time in effect.
Yankee's "operating expenses" shall include all amounts
properly chargeable to operating expense accounts, less any
applicable credits thereto, in accordance with the Uniform
System; it being understood that for purposes of this contract
"operating expenses" shall include (I) depreciation or
<PAGE>
amortization accrued at a rate at least sufficient to fully
amortize over the estimated remaining useful life of the plant
Yankee's non-salvageable investments in plant nuclear fuel and
materials and supplies or other assets, provided, however, that
if a decision is made to cease electricity production at the
plant prior to July 9, 2000, then such remaining non-salvageable
investments shall be amortized over a period extending to July 9,
2000; (ii) obligations incurred in connection with the leasing of
fuel inventory; and (iii) interest charges not associated with
outstanding indebtedness; and (iv) costs incurred in connection
with decommissioning the plant, including (a) the direct and
indirect costs of operating, maintaining or dismantling the spent
fuel storage facilities and other plant facilities after the
cessation of electricity production and (b) the accruals to any
reserve established by Yankee's board of directors to provide for
physical decommissioning of the plant over the estimated
remaining useful life of the plant, provided, however, that if a
decision is made to cease electricity production at the plant
prior to July 9, 2000, then the accruals to the reserve referred
to in clause (b) shall be made over a period extending to July 9,
2000. The parties agree that the timing and amount of any
billings by Yankee of the accrual referred to in the preceding
<PAGE>
clause (iv), and the Customer's continuing obligation to pay the
same, are subject to the jurisdiction of the Federal Energy
Regulatory Commission or its successor agency as provided by law.
The aggregate amounts of the annual accrual to the
decommissioning reserve shall be as from time to time approved by
the Federal Energy Regulatory Commission, such amounts to be
accrued in equal monthly installments. Consistent with
paragraphs 1 and 2 of Section 6 of this Power Contract, monthly
payments by the Customer to the decommissioning reserve shall be
equal to the Customer's power percentage of the total
decommissioning accrual for that month.
Composite percentage shall be computed as of the last day of
each month (the "computation date") and for any month the
composite percentage shall be that computed as of the last day of
the previous month. Composite percentage as of a computation
date shall be the sum of (I) the annual percentage rate for
return on equity then in effect as authorized by the Federal
Energy Regulatory Commission multiplied by the percentage which
equity investment (excluding any equity investment which relates
to construction work in progress not included in net plant rate
base) as of such date is of the total capital as of such date;
plus (ii) the effective interest rate per annum of each principal
<PAGE>
amount of indebtedness (excluding any principal amount of
indebtedness which relates to construction work in progress not
included in net plant rate base) outstanding on such date for
money borrowed multiplied by the percentage which such principal
amount is of total capital as of such date.
"Equity investment" as of any date shall consist of the sum
of (I) all amounts theretofore paid to Yankee for all capital
stock theretofore issued, plus all capital contributions, less
the sum of any amounts paid by Yankee in the form of stock
retirements, repurchases or redemptions or return of capital;
plus (ii) any credit balance in the capital surplus account not
included under (I) and any credit balance in the earned surplus
account on the books of Yankee as of such date.
"Total capital" as of any date shall be the equity
investment plus the total of all indebtedness then outstanding
for money borrowed.
The "net plant rate base" shall be determined monthly and
shall consist of (I) the aggregate amount properly chargeable to
Yankee's utility plant accounts, including nuclear fuel accounts,
in accordance with the Uniform System; less (ii) the amount of
any accumulated provisions for depreciation and for amortization
of nuclear fuel assemblies (exclusive of any decommissioning
<PAGE>
reserve); plus or less (iii) amounts recorded in accumulated
deferred income tax accounts, as appropriate, in accordance with
the applicable section of the regulation issued by the Federal
Energy Regulatory Commission (which as of the date hereof is
codified at 18 C.F.R. section 35.25); plus (iv) such allowances
for materials, supplies, and prepaid items as may from time to
time be determined by Yankee's board of directors; plus (v)
allowances for cash working capital as permitted from time to
time by the Federal Energy Regulatory Commission or its successor
agency; plus (vi) the amount of any unamortized deferred
expenses, as permitted from time to time by the Federal Energy
Regulatory Commission or its successor agency; plus (vii) to the
extent not provided for elsewhere in this paragraph, the
remaining unamortized amount of the non-salvageable investment in
plant, nuclear fuel and materials and supplies and other assets.
Payments shall be made in cash promptly after receipt by the
Customer of statements rendered by Yankee in such detail as the
Customer may reasonably require. Such statements may be rendered
on an estimated basis subject to corrective adjustments in
subsequent billing periods. Simple interest at the prime rate
then in effect at The First National Bank of Boston shall accrue
on any payment delayed beyond thirty days after receipt by the
Customer of a monthly statement. If any payment (other than
amounts in dispute) shall be delayed beyond six months, Yankee
may, by written notice, terminate this contract at the end of the
next succeeding calendar month.
Notwithstanding any other provision of this contract, the
treatment of construction work in progress for purposes of any
calculations relevant to the computation of monthly payments
under this Section 6 shall conform to the applicable section of
the Federal Energy Regulatory Commission's regulations respecting
such items (which as of the date of this Amendment hereof is
codified at 18 C.F.R. section 35.26), as such regulations may be
modified from time to time.
7. Audit
-----
Yankee's books and records, insofar as they pertain to the
service rendered hereunder or to any charges made therefor, shall
be open to the Customer's inspection and audit.
8. Arbitration
-----------
In case any dispute shall arise as to the interpretation of
this contract which cannot be settled by mutual agreement, such
dispute shall be submitted to arbitration. The parties shall, if
possible, agree upon a single arbitrator. In case of failure to
agree upon an arbitrator within 15 days after the deliver by
<PAGE>
either party to the other of a written notice requesting
arbitration, either party may request the American Arbitration
Association to appoint the arbitrator. The arbitrator, after
opportunity for each of the parties to be heard, shall consider
and decide the dispute and notify the parties in writing of his
decision. Such decision shall be binding upon the parties, and
the expense of the arbitration shall be borne equally by them.
9. Regulation
----------
Performance of this contract is subject to all applicable
state and federal laws and to all rules, regulations and orders
properly issued thereunder by any governmental agency having
jurisdiction in the premises.
10. Effective Date
--------------
This revised contract shall become effective on April 1,
1985, subject to any suspension order duly issued by the Federal
Energy Regulatory Commission.
11. Amendments
----------
Upon authorization by its board of directors of a uniform
amendment to all customer power contracts, Yankee shall have the
right to amend the provisions of Section 6 hereof by serving an
appropriate statement of such amendment upon the Customer and
filing the same with the Federal Energy Regulatory Commission (or
<PAGE>
such other regulatory agency as may have jurisdiction in the
premises) in accordance with the provisions of applicable laws
and any rules and regulations thereunder, and the amendment shall
thereupon become effective on the date specified therein, subject
to any suspension order duly issued by such agency. All other
amendments to this contract shall be by mutual agreement,
evidenced by a written amendment signed by the parties hereto.
12. Interpretation
--------------
The interpretation and performance of this contract shall be
in accordance with and controlled by the laws of the Commonwealth
of Massachusetts.
13. Addresses
---------
Except as the parties may from time to time otherwise agree,
any notice, request, demand, statement, bill or payment provided
for in this contract or any other notice which either party may
desire to give to the other, shall be in writing and shall be
effective upon delivery to the other party. Any such
communication shall be considered as duly delivered when mailed
by either registered or ordinary mail to the respective post
office addresses shown following the signatures of the parties
hereto.
<PAGE>
14. Corporate Obligation
--------------------
This contract is the corporate act and obligation of the
parties hereto, and any claim hereunder against any stockholder,
director or officer of either party, as such, is expressly
waived."
IN WITNESS WHEREOF the parties have executed this revised
contract by their respective officers thereunto duly authorized
as of the captioned date.
<PAGE>
<TABLE>
<CAPTION>
YANKEE ATOMIC ELECTRIC COMPANY
PRO-FORMA BALANCE SHEET
1998 1999 2000
---- ---- ----
Balance Activity Balance Activity Balance
------- -------- ------- -------- -------
ASSETS
------
<S> <C> <C> <C> <C> <C>
Life Insurance
Surrender Value $1,386,036 $0 $1,386,036 $0$1,386,036
Funded Liabilities 8,011,348(5,568,273) 2,443,075(2,443,075) 0
Working Capital 10,697,158(7,765,630) 2,931,528 1,389,680 4,321,208
DOE D&D Fuel Payment 845,042 33,802 878,844 (878,844) 0
Account Receivable 6,801,852(6,001,852) 800,000 (800,000) 0
Prepaids 4,659,556 0 4,659,556(4,659,556) 0
Unrecovered Assets 8,920,847(5,957,183) 2,963,664(2,963,664) 0
Land/other 443,324 (306,364) 136,960 0 136,960
------- ---------- -------------------- --------
Total Assets $41,765,163 ($25,565,500)$16,199,663($10,355,459) $5,844,204
==================================================
<PAGE>
LIABILITIES & EQUITY
- --------------------
Common Stock $15,340,000 $0 $7,340,000 $0$3,340,000
Retained Earnings 5,604,104 1,251,104 0
Net Income 2,090,000 450,000
Dividends/
share Dividends (6,443,000) (1,701,104)
Return of Capital (8,000,000) (4,000,000)
------------------------------------------------------------
Net Equity $20,944,104 ($12,353,000) $8,591,104($5,251,104) $3,340,000
Accounts Payable Trust 7,710,084(6,110,084) 1,600,000(1,600,000) 0
Sale Reserves 2,725,531(2,725,531) 0 0 0
Retention/Severances 1,803,606 (325,000) 1,478,606(1,478,606) 0
FAS112 Rowe 0 0 0
NSD 0 0 0 0
Unqual. Pension/
Officers Medical 3,207,742(3,207,742) 0 0 0
Deferred Income Tax 4,707,666 (452,795) 4,254,871(1,750,667) 2,504,204
Other 591,128 (341,128) 250,000 (250,000) 0
ITC 75,302 (50,220) 25,082 (25,082) 0
--------------------------------------------------------------
Total Liabilities
& Equity $41,765,163 ($25,565,500)$16,199,663 ($10,355,459) $5,844,204
===============================================================
</TABLE>
Exhibit F-1
-----------
September 30, 1999
Securities and Exchange Commission
Washington, DC 20549
Re: Yankee Atomic Electric Company
File No. 70-
Gentlemen:
This opinion is furnished to you in connection with the
filing with you of the Declaration on Form U-1 (the
"Declaration") of Yankee Atomic Electric Company (the "Company")
under the Public Utility Holding Company Act of 1935, as amended,
relating to the proposed repurchase by the Company of up to 90%
of its outstanding Common Stock.
We are counsel for the Company and in connection with this
opinion we have reviewed the Company's charter, by-laws and the
minutes of the meetings of the board of directors of the Company
and such other materials as we deemed necessary to this opinion.
Based upon the foregoing, we are of the opinion that, when
the Commission has taken the action requested in the Declaration
and when the shares have been tendered by all the sponsoring
utilities and the repurchase price has been paid by the Company,
all as described in the Declaration:
1. The Company is a corporation duly incorporated and
validly existing under the laws of The Commonwealth of
Massachusetts.
2. All State laws applicable to the repurchase of the
shares of Common Stock as described in the Declaration will have
been complied with.
3. The Company will legally acquire the shares of Common
Stock being repurchased.
4. Consummation of the aforesaid repurchase of Common
Stock of the Company will not violate the legal rights of the
holders of any securities issued by the Company.
We hereby consent to the use of this opinion in connection
with the Declaration.
Very truly yours,
s/ Ropes & Gray
Ropes & Gray
<PAGE>
Exhibit G-1
-----------
Yankee Atomic's Estimated Fees and Expenses
- -------------------------------------------
Expense Type Estimate
------------ --------
Administrative Fees $2,500
Legal Fees $3,500
-------------------------- -----------
Total Estimated Expenses $6,000
=========================== ============
<PAGE>
Exhibit H
---------
Proposed Form of Notice
Yankee Atomic Electric Company
------------------------------
Yankee Atomic Electric Company ("Yankee"), 19 Midstate
Drive, Suite 200 Auburn, Massachusetts, 01501, a subsidiary of
New England Electric System and Northeast Utilities, both
registered holding companies, has filed a declaration under
Section 12(c) of the Act and Rule 42 thereunder.
Yankee proposes to repurchase from its ten stockholders
("Sponsors") an aggregate of 145,730 shares of its Common Stock,
95% of the presently outstanding Common Stock, at a purchase
price of $100 per share, the book value per share on June 30,
1999. The funds for the repurchase will be obtained by
liquidating short-term investments held by Yankee at June 30,
1999.
Yankee is a single purpose electric utility which formerly
operated a nuclear powered electric generation facility (the
"Rowe Plant"), the output of which was sold to Yankee's ten
Sponsors. The Rowe Plant was permanently taken out of service in
February, 1992 and Yankee is in the process of decommissioning
the facility. Pursuant to Power Contracts between Yankee and
each Sponsor, which have been approved by the Federal Energy
Regulatory Commission, the Sponsors are continuing to make
payments to Yankee to cover funds for decommissioning the Rowe
Plant and waste disposal, amortization of plant investment and
return on equity. As these obligations are reduced or provided
for, Yankee believes its minimum equity requirements will also
significantly decline. Therefore, Yankee contemplates this
initial repurchase of Common Stock to reduce its equity.
No other state or Federal agency has jurisdiction over this
proposed transaction.
Yankee Atomic Electric Company
BALANCE SHEET
ASSETS
As of June 30,
1999
(UNAUDITED)
<TABLE>
<CAPTION>
June December
1999 1998
-------- --------
<S> <C> <C>
UTILITY PLANT AT ORIGINAL COST
Electric Property at Original Cost $136,960 $136,960
Total Utility Plant 136,960 136,960
CURRENT ASSETS
Cash and Cash Equivalents 11,920,155 15,747,433
Restricted Cash 0 3,000,000
Accounts Receivable
Service 526,735 883,757
Other 3,230,228 3,298,028
Prepayments 6,965,948 6,938,200
Total Current Assets 22,643,066 29,867,418
DEFERRED CHARGES AND OTHER ASSETS
Trust Funds
Plant Decommissioning 153,450,025 150,659,185
Regulatory Assets
Closure 40,757,375 61,378,901
Net Unrecovered Assets 5,961,162 8,920,847
DOE Decontamination and Decommissioning Fee 10,820,736 12,229,138
Other 204,250 306,364
Other Deferred Charges and Other Assets 4,285,483 4,516,787
Total Deferred Charges and Other Assets 215,479,031 238,011,222
TOTAL ASSETS AND OTHER DEBITS $238,259,057 $268,015,600
</TABLE>
Yankee Atomic Electric Company
BALANCE SHEET
STOCKHOLDERS' INVESTMENT AND LIABILITIES
As of June 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
June December
1999 1998
-------- ---------
<S> <C> <C>
CAPITALIZATON
Common Stock $15,340,000 $15,340,000
Retained Earnings 3,430,051 5,604,104
Total Capitalization 18,770,051 20,944,104
CURRENT LIABILITIES
Accounts Payable 137,441 136,859
Accounts Payable to Associated Companies 452,046 6,875,086
Accrued Interest and Taxes 1,572,687 (1,551)
Other Current Liabilities 1,319,100 3,979,477
Total Current Liabilities 3,481,274 10,989,871
RESERVES AND DEFERRED CREDITS
Reserves
Plant Decommissioning 153,450,025 150,659,185
Deferred Credits
Regulatory Liabilities
Closure 40,757,375 61,378,901
DOE Decontamination and Decommissioning Fee 10,539,055 11,384,096
Other 31,154 46,736
Accumulated Deferred Income Tax Liabilities 3,094,481 4,576,648
Unamortized Investment Tax Credits 50,192 75,302
Other Deferred Credits 8,085,450 7,960,757
Total Reserves and Deferred Credits 216,007,732 236,081,625
TOTAL LIABILITIES AND OTHER CREDITS $238,259,057 $268,015,600
</TABLE>
Yankee Atomic Electric Company
STATEMENTS OF INCOME AND RETAINED EARNINGS
For June 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
CURRENT MONTH YEAR TO DATE
------------------------------------- --------------------------------------
1999 1998 1999 1999 1998 1999
ACTUAL ACTUAL BUDGET ACTUAL ACTUAL BUDGET
<S> <C> <C> <C> <C> <C> <C>
ELECTRIC OPERATING REVENUE $3,778,030 $4,088,600 $4,002,000 $24,375,385 $24,521,397 $24,012,000
OPERATING EXPENSES
Fuel Disposal Cost 93,894 92,399 95,000 563,361 554,395 570,000
Operation and Maintenance 9,067 58,879 25,000 517,086 188,429 150,000
Amortization of Unrecovered Assets496,764 496,432 497,000 2,977,099 2,978,592 2,982,000
Decommissioning Collections 3,284,250 3,284,250 3,284,250 19,705,500 19,705,500 19,705,500
Taxes
Federal and State Income (166,751) 38,123 (15,650) 215,156 305,039 (93,900)
Total Operating Expenses 3,717,224 3,970,083 3,885,600 23,978,202 23,731,955 23,313,600
OPERATING INCOME 60,806 118,517 116,400 397,183 789,442 698,400
OTHER INCOME/(EXPENSE), NET
Other, Net 25,125 101,034 9,333 337,175 (173,163) 56,000
Total Other Income/(Expense), Net25,125 101,034 9,333 337,175 (173,163) 56,000
INCOME (LOSS) BEFORE INTEREST 85,931 219,551 125,733 734,358 616,279 754,400
<PAGE>
INTEREST CHARGES
Other Interest 0 0 0 0 30,403 0
Total Interest Charges 0 0 0 0 30,403 0
DISCONTINUED OPERATIONS
Sale of NSD 0 174,866 0 277,508 2,015,832 0
Income Taxes 0 (19,119) 0 (117,919) (799,943) 0
Sale of NSD, Net 0 155,747 0 159,589 1,215,889 0
NET INCOME (LOSS) $85,931 $375,298 $125,733 $893,947 $1,801,765 $754,400
SHARES OF COMMON STK OUTSTANDING 153,400 153,400 153,400 153,400 153,400 153,400
EARNINGS PER SHARE OF COMMON STK $0.56 $2.45 $0.82 $5.83 $11.75 $4.92
RETAINED EARNINGS
Retained Earnings - Beginning $3,344,120 $10,171,572 $6,232,771 $5,604,104 $8,745,105 $5,604,104
Net Income (Loss) 85,931 375,298 125,733 893,947 1,801,765 754,400
Subtotal 3,430,051 10,546,870 6,358,504 6,498,051 10,546,870 6,358,504
Dividends Paid 0 6,979,700 0 3,068,000 6,979,700 0
Retained Earnings - Ending $3,430,051 $3,567,170 $6,358,504 $3,430,051 $3,567,170 $6,358,504
</TABLE>
