<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
second 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 June 30, 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
$147,422,000 and $10,805,000, respectively.
3. As of June 30, 1999 NEES Energy had no permanent personnel
and during the second quarter of 1999 there were no
individuals assigned on a substantially full-time basis.
4. During the second 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 June 30, 1999, consolidated income statements and
statements of cash flows for the quarter, six months and
twelve months ended June 30, 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/Geraldine M. Zipser
___________________________
Geraldine M. Zipser
Assistant Clerk
Date: August 30, 1999
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A Consolidated Balance Sheet at Filed
June 30, 1999 herewith
(Unaudited, subject to adjustment)
B1 Consolidated Statement of Income and Filed
Accumulated Deficit For the Quarter herewith
and Six Months ended June 30, 1999
(Unaudited, Subject to Adjustment)
C1 Consolidated Statement of Cash Flows Filed
For the Quarter and Six Months ended herewith
June 30, 1999
(Unaudited, Subject to Adjustment)
B2 Consolidated Statement of Income and Filed
Accumulated Deficit For the Twelve herewith
Months ended June 30, 1999
(Unaudited, Subject to Adjustment)
C2 Consolidated Statement of Cash Flows Filed
For the Twelve Months ended June 30, 1999 herewith
(Unaudited, Subject to Adjustment)
<PAGE>
Exhibit A
NEES Energy, Inc.
Consolidated Balance Sheet
(Thousands of Dollars)
As of June 30, 1999
(Unaudited, Subject to Adjustment)
ASSETS
- ------
Current assets:
Cash $ 6,466
Accounts receivable and unbilled revenue, less
reserves of $1,585 37,509
Accounts receivable from affiliates 36
Inventory 11,648
Prepaid and other current assets 8,110
--------
Total current assets 63,769
--------
Fixed assets 13,544
Less accumulated depreciation 2,152
--------
Net fixed assets 11,392
--------
Other investments 906
Goodwill, net of amortization 92,038
Deferred federal and state income taxes 823
Other assets 3,154
--------
$172,082
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LIABILITIES AND CAPITALIZATION
- ------------------------------
Current liabilities:
Long term debt due in one year $ 307
Accounts payable (including $2,007 to affiliates) 12,993
Accrued liabilities 16,738
--------
Total current liabilities 30,038
Long term debt 678
Other long-term liabilities 7,794
--------
Total liabilities 38,510
--------
Parent company's investment:
Subordinated notes payable to parent 147,422
Common stock, par value $1 per share 1
Other paid-in capital 10,805
Accumulated deficit (24,656)
--------
Total parent company's investment 133,572
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$172,082
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<PAGE>
Exhibit B1
NEES ENERGY, INC.
Consolidated Statement of Income and Accumulated Deficit
(Thousands of Dollars)
For the Periods Ended June 30, 1999
(Unaudited, Subject to Adjustment)
<TABLE>
<CAPTION>
Quarter Six Months
------- ----------
<S> <C> <C>
INCOME
Revenue (1) $ 82,903 $184,371
-------- --------
Total income 82,903 184,371
-------- --------
EXPENSES
Operating expenses
Cost of sales 71,676 160,435
Depreciation 2,287 3,748
Selling, general and administrative expenses 12,527 23,525
Income tax (1,139) (971)
-------- -------
Total operating expenses 85,351 186,737
-------- -------
Operating income (loss) (2,448) (2,366)
Other income (expense), net 130 183
-------- -------
Net income (loss) (2,318) (2,183)
Accumulated deficit at beginning of period (22,338) (22,473)
-------- -------
Accumulated deficit at end of period $(24,656) $(24,656)
======== ========
(1) Represents revenue of subsidiary (AllEnergy Marketing Co., L.L.C.)
</TABLE>
<PAGE>
Exhibit C1
NEES Energy, Inc.
Consolidated Statement of Cash Flows
(Thousands of Dollars)
For the Periods Ended June 30, 1999
(Unaudited, Subject to Adjustment)
<TABLE>
<CAPTION>
Quarter Six Months
------- ----------
<S> <C> <C>
Operating activities:
Net income (loss) $(2,318) $ (2,183)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization 2,287 3,748
(Increase) decrease in accounts receivable and
unbilled revenue 16,994 3,918
(Increase) decrease in inventory (3,163) 3,749
(Increase) decrease in prepaid and other
current assets 2,728 6,868
Increase (decrease) in accounts payable (2,948) (86)
Increase (decrease) in other current liabilities (4,521) (7,521)
Other, net (179) (1,737)
------- --------
Net cash provided by (used in) operating activities $ 8,880 $ 6,756
------- --------
Investing activities:
Fixed asset expenditures $ - $ (309)
Investment in Griffith Consumers - (78,605)
Acquisition of Barclay & Fowler assets - (3,011)
Acquisition of Hub-Langie assets (777) (777)
Purchase of AllEnergy minority interest from
NEES Global, Inc. - (456)
------- --------
Net cash used in investing activities $ (777) $(83,158)
------- --------
Financing activities:
Change in subordinated notes payable to parent $(8,465) $ 78,825
Increase (decrease) in long-term debt (71) (150)
------- --------
Net cash provided by (used in) financing activities $(8,536) $ 78,675
------- --------
Net increase (decrease) in cash and cash equivalents $ (433) $ 2,273
Cash and cash equivalents at beginning of period 6,899 4,193
------- --------
Cash and cash equivalents at end of period $ 6,466 $ 6,466
======= ========
</TABLE>
<PAGE>
Exhibit B2
NEES ENERGY, INC.
Consolidated Statement of Income and Accumulated Deficit
(Thousands of Dollars)
For the Twelve Months Ended June 30, 1999
(Unaudited, Subject to Adjustment)
INCOME
Revenue (1) $298,175
--------
Total income 298,175
--------
EXPENSES
Operating expenses
Cost of sales 267,109
Depreciation 4,766
Selling, general and administrative expenses 39,455
Income tax (4,308)
--------
Total operating expenses 307,022
--------
Operating income (loss) (8,847)
Other income (expense), net 298
--------
Net income (loss) (8,549)
Accumulated deficit at beginning of period (16,107)
--------
Accumulated deficit at end of period $(24,656)
========
(1) Represents revenue of subsidiary (AllEnergy Marketing Co., L.L.C.)
<PAGE>
Exhibit C2
NEES ENERGY, INC.
Statement of Cash Flows
(Thousands of Dollars)
For the Twelve Months Ended June 30, 1999
(Unaudited, Subject to Adjustment)
Operating activities:
Net income (loss) $ (8,549)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization 4,766
Deferred federal and state income taxes (166)
(Increase) decrease in accounts receivable and
unbilled revenue (5,207)
(Increase) decrease in inventory (3,437)
(Increase) decrease in prepaid and other
current assets (2,775)
Increase (decrease) in accounts payable (592)
Increase (decrease) in other current liabilities (1,939)
Other, net (4,690)
--------
Net cash provided by (used in) operating activities $(22,589)
--------
Investing activities:
Fixed asset expenditures $ (2,368)
Investment in Weatherwise (160)
Investment in PAL Energy (13,645)
Investment in Griffith Consumers (78,605)
Acquisition of Barclay & Fowler assets (3,011)
Acquisition of Hub-Langie assets (777)
Purchase of AllEnergy minority interest from
NEES Global, Inc. (456)
--------
Net cash used in investing activities $(99,022)
--------
Financing Activities:
Change in subordinated notes payable to parent $105,130
Capital contribution from parent 10,805
Increase (decrease) in long-term debt 336
--------
Net cash provided by financing activities $116,271
--------
Net increase (decrease) in cash and cash equivalents $ (5,340)
Cash and cash equivalents at beginning of period 11,806
--------
Cash and cash equivalents at end of period $ 6,466
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