<PAGE 1>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549-1004
Form 10-K/A Amendment No. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 1-7316
COMMONWEALTH ENERGY SYSTEM
(Exact name of registrant as specified in its Declaration of Trust)
Massachusetts 04-1662010
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Main Street, Cambridge, Massachusetts 02142-9150
(Address of principal executive offices) (Zip Code)
(617) 225-4000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Shares of Beneficial New York Stock Exchange, Inc.
Interest $2 par value Pacific Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
None
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ x ]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES [ x ] NO [ ]
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 16, 1998: $789,947,326
Common Shares outstanding at March 16, 1998: 21,531,784 shares
Document Incorporated by Reference Part in Form 10-K
Notice of 1998 Annual Meeting and
Proxy Statement, dated March 30, 1998
(pages as specified herein) Part III
<PAGE>
<PAGE 2>
COMMONWEALTH ENERGY SYSTEM
The undersigned registrant hereby amends the following item of its Annual
Report for 1997 on Form 10-K as set forth on page 3.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
Exhibit 10. Material Agreements:
Filed herewith as Exhibit 1:
10.3.2.4 Fourth Amendment to the Employees Savings Plan of Commonwealth
Energy System and Subsidiary Companies, as amended and restated
January 1, 1993, effective January 1, 1998.
Exhibit 99. Additional Exhibit:
Pursuant to Rule 15(d)-21 of the Securities Exchange Act of 1934,
information, financial statements and exhibits required in Form 11-K with
respect to:
(1) Employees Savings Plan of Commonwealth Energy System and Subsidiary
Companies
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by
the undersigned, thereunto duly authorized.
COMMONWEALTH ENERGY SYSTEM
(Registrant)
By JAMES D. RAPPOLI
James D. Rappoli,
Financial Vice President
and Treasurer
Date: April 29, 1998
<PAGE>
<PAGE 3>
INFORMATION REQUIRED BY FORM 11-K ANNUAL REPORT
For the Fiscal Year Ended December 31, 1997
A. Full title of plan:
Employees Savings Plan of Commonwealth Energy System and Subsidiary
Companies (hereinafter referred to as the "Plan").
B. Name of issuer of the securities held pursuant to the Plan and the address
of its principal executive office:
Commonwealth Energy System
One Main Street
Cambridge, Massachusetts 02142-9150
Item 1. Financial Statements and Exhibits
(a) Financial Statements and Schedules attached hereto: Page
Report of Independent Public Accountants 4
Statements of Net Assets Available for Benefits
at December 31, 1997 and 1996 5 - 14
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 1997, 1996 and 1995 15 - 27
Notes to Financial Statements 28 - 36
Schedule I - Item 27a: Schedule of Investments
at December 31, 1997 37
Schedule II - Item 27d: Schedule of Reportable Transactions
for the Year Ended December 31, 1997 38
(b) Exhibits filed herewith:
Number
in SEC
Exhibit Exhibit
Table Description Number
10 Fourth Amendment to the Employees Savings Plan 1
of Commonwealth Energy System and Subsidiary
Companies, as amended and restated
January 1, 1993, effective January 1, 1998.
<PAGE>
<PAGE 4>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
Report of Independent Public Accountants
To the Savings Plan Board of the Employees Savings Plan of Commonwealth Energy
System and Subsidiary Companies:
We have audited the accompanying statements of net assets available for
benefits of the EMPLOYEES SAVINGS PLAN OF COMMONWEALTH ENERGY SYSTEM AND
SUBSIDIARY COMPANIES as of December 31, 1997 and 1996, and the related
statements of changes in net assets available for benefits for each of the
three years in the period ended December 31, 1997. These financial statements
and the supplemental schedules referred to below are the responsibility of the
plan administrator. Our responsibility is to express an opinion on these
financial statements and supplemental schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the
Employees Savings Plan of Commonwealth Energy System and Subsidiary Companies
as of December 31, 1997 and 1996, and its changes in net assets available for
benefits for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Supplemental Schedules I and II are
presented for purposes of additional analysis and are not a required part of
the basic financial statements, but are supplemental information required by
the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The Fund
Information in the statement of net assets available for benefits and the
statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets
available for benefits and changes in net assets available for benefits of
each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
April 17, 1998
<PAGE>
<PAGE 5>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
(Page 1 of 5)
Commonwealth Vanguard
Energy System Money Market
Common Share Reserves-Prime
Total Fund Portfolio
Assets
Investments, at quoted market
value (Schedule I):
Common Shares of
Commonwealth Energy System $ 88,626,418 $88,626,418 $ -
Mutual funds 210,721,055 - 25,809,453
Total investments 299,347,473 88,626,418 25,809,453
Other assets:
Loans to participants 8,939,289 - -
Receivables -
Contributions 128,326 29,668 12,629
Loan repayments 99,893 12,701 6,259
Interest 2,064 2,064 -
Exchanges in 3,037 3,037 -
Total other assets 9,172,609 47,470 18,888
Total assets 308,520,082 88,673,888 25,828,341
Liability:
Accounts payable 303,986 303,986 -
Net assets available for
benefits $308,216,096 $88,369,902 $25,828,341
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 6>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
(Page 2 of 5)
Vanguard
Fixed Income
Securities Fund-
Vanguard Short-Term Vanguard
Windsor II Corporate Wellington
Fund Portfolio Fund
Assets
Investments, at quoted market
value (Schedule I):
Common Shares of
Commonwealth Energy System $ - $ - $ -
Mutual funds 110,334,177 5,367,919 45,097,834
Total investments 110,334,177 5,367,919 45,097,834
Other assets:
Loans to participants - - -
Receivables -
Contributions 43,755 2,384 25,318
Loan repayments 41,578 788 34,598
Interest - - -
Exchanges in - - -
Total other assets 85,333 3,172 59,916
Total assets 110,419,510 5,371,091 45,157,750
Liability:
Accounts payable - - -
Net assets available for
benefits $110,419,510 $ 5,371,091 $45,157,750
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 7>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
(Page 3 of 5)
Vanguard
Vanguard Index Trust-
International Extended Vanguard
Growth Market Explorer
Portfolio Portfolio Fund
Assets
Investments, at quoted market
value (Schedule I):
Common Shares of
Commonwealth Energy System $ - $ - $ -
Mutual funds 9,471,899 6,914,193 2,940,817
Total investments 9,471,899 6,914,193 2,940,817
Other assets:
Loans to participants - - -
Receivables -
Contributions 6,669 3,593 1,927
Loan repayments 2,294 841 427
Interest - - -
Exchanges in - - -
Total other assets 8,963 4,434 2,354
Total assets 9,480,862 6,918,627 2,943,171
Liability:
Accounts payable - - -
Net assets available for
benefits $ 9,480,862 $ 6,918,627 $ 2,943,171
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 8>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
(Page 4 of 5)
Vanguard LIFEStrategy Funds-
Conservative Moderate
Income Growth Growth
Portfolio Portfolio Portfilio
Assets
Investments, at quoted market
value (Schedule I):
Common Shares of
Commonwealth Energy System $ - $ - $ -
Mutual funds 455,415 841,499 1,836,746
Total investments 455,415 841,499 1,836,746
Other assets:
Loans to participants - - -
Receivables -
Contributions 5 91 897
Loan repayments 5 4 125
Interest - - -
Exchanges in - - -
Total other assets 10 95 1,022
Total assets 455,425 841,594 1,837,768
Liability:
Accounts payable - - -
Net assets available for
benefits $ 455,425 $ 841,594 $ 1,837,768
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 9>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
(Page 5 of 5)
Vanguard
LIFEStrategy
Funds-
Growth Loan
Portfolio Fund
Assets
Investments, at quoted market
value (Schedule I):
Common Shares of
Commonwealth Energy System $ - $ -
Mutual funds 1,651,103 -
Total investments 1,651,103 -
Other assets:
Loans to participants - 8,939,289
Receivables -
Contributions 1,390 -
Loan repayments 273 -
Interest - -
Exchanges in - -
Total other assets 1,663 8,939,289
Total assets 1,652,766 8,939,289
Liability:
Accounts payable - -
Net assets available for
benefits $ 1,652,766 $ 8,939,289
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 10>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
(Page 1 of 5)
Commonwealth Vanguard
Energy System Money Market
Common Share Reserves-Prime
Total Fund Portfolio
Assets
Investments, at quoted market
value:
Common Shares of
Commonwealth Energy System $ 74,929,586 $74,929,586 $ -
Mutual funds 175,881,535 131,517 28,548,919
Total investments 250,811,121 75,061,103 28,548,919
Other assets:
Loans to participants 9,548,801 - -
Receivables -
Loan repayments 47,821 14,099 6,400
Interest 1,548 1,548 -
Contributions 151,177 40,134 16,505
Total other assets 9,749,347 55,781 22,905
Total assets 260,560,468 75,116,884 28,571,824
Liability:
Accounts payable 30,255 30,255 -
Net assets available for
benefits $260,530,213 $75,086,629 $28,571,824
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 11>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
(Page 2 of 5)
Vanguard
Fixed Income
Securities Fund-
Vanguard Short-Term Vanguard
Windsor II Corporate Wellington
Fund Portfolio Fund
Assets
Investments, at quoted market
value:
Common Shares of
Commonwealth Energy System $ - $ - $ -
Mutual funds 86,105,135 5,726,307 37,062,570
Total investments 86,105,135 5,726,307 37,062,570
Other assets:
Loans to participants - - -
Receivables -
Loan repayments 14,263 934 7,907
Interest - - -
Contributions 46,950 3,701 28,500
Total other assets 61,213 4,635 36,407
Total assets 86,166,348 5,730,942 37,098,977
Liability:
Accounts payable - - -
Net assets available for
benefits $ 86,166,348 $ 5,730,942 $37,098,977
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 12>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
(Page 3 of 5)
Vanguard
Vanguard Index Trust-
International Extended Vanguard
Growth Market Explorer
Portfolio Portfolio Fund
Assets
Investments, at quoted market
value:
Common Shares of
Commonwealth Energy System $ - $ - $ -
Mutual funds 9,243,462 5,029,383 2,312,633
Total investments 9,243,462 5,029,383 2,312,633
Other assets:
Loans to participants - - -
Receivables -
Loan repayments 2,784 913 299
Interest - - -
Contributions 8,282 4,021 1,854
Total other assets 11,066 4,934 2,153
Total assets 9,254,528 5,034,317 2,314,786
Liability:
Accounts payable - - -
Net assets available for
benefits $ 9,254,528 $ 5,034,317 $ 2,314,786
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 13>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
(Page 4 of 5)
Vanguard LIFEStrategy Funds-
Conservative Moderate
Income Growth Growth
Portfolio Portfolio Portfilio
Assets
Investments, at quoted market
value:
Common Shares of
Commonwealth Energy System $ - $ - $ -
Mutual funds 264,846 179,641 688,642
Total investments 264,846 179,641 688,642
Other assets:
Loans to participants - - -
Receivables -
Loan repayments 5 - 96
Interest - - -
Contributions 3 86 409
Total other assets 8 86 505
Total assets 264,854 179,727 689,147
Liability:
Accounts payable - - -
Net assets available for
benefits $ 264,854 $ 179,727 $ 689,147
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 14>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
(Page 5 of 5)
Vanguard
LIFEStrategy
Funds-
Growth Loan
Portfolio Fund
Assets
Investments, at quoted market
value:
Common Shares of
Commonwealth Energy System $ - $ -
Mutual funds 588,480 -
Total investments 588,480 -
Other assets:
Loans to participants - 9,548,801
Receivables -
Loan repayments 121 -
Interest - -
Contributions 732 -
Total other assets 853 9,548,801
Total assets 589,333 9,548,801
Liability:
Accounts payable - -
Net assets available for
benefits $ 589,333 $ 9,548,801
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 15>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
(Page 1 of 5)
Commonwealth Vanguard
Energy System Money Market
Common Share Reserves-Prime
Total Fund Portfolio
Assets
Additions to net assets
attributed to:
Net investment income
Dividends -
Common Shares of
Commonwealth Energy System $ 4,791,915 $ 4,791,915 $ -
Registered investment
company shares 17,162,911 - 1,518,535
Interest on loans 820,039 - -
22,774,865 4,791,915 1,518,535
Realized and unrealized
gain (loss) on investments 50,188,782 26,962,004 -
Contributions:
Employees 8,727,513 1,844,576 793,610
Employers 4,172,439 963,411 429,025
12,899,952 2,807,987 1,222,635
Total additions, net 85,863,599 34,561,906 2,741,170
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 38,166,213 6,463,039 11,399,265
Purchase fees 11,503 - -
Total deductions 38,177,716 6,463,039 11,399,265
Net increase (decrease) prior to
interfund transfers 47,685,883 28,098,867 (8,658,095)
Interfund transfers - (14,815,594) 5,914,612
Net increase (decrease) 47,685,883 13,283,273 (2,743,483)
Net assets available for benefits:
Beginning of year 260,530,213 75,086,629 28,571,824
End of year $308,216,096 $ 88,369,902 $25,828,341
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 16>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
(Page 2 of 5)
Vanguard
Fixed Income
Securities Fund-
Vanguard Short-Term Vanguard
Windsor II Corporate Wellington
Fund Portfolio Fund
Assets
Additions to net assets
attributed to:
Net investment income
Dividends -
Common Shares of
Commonwealth Energy System $ - $ - $ -
Registered investment
company shares 10,063,826 345,842 3,866,494
Interest on loans - - -
10,063,826 345,842 3,866,494
Realized and unrealized
gain (loss) on investments 17,438,941 30,754 4,616,872
Contributions:
Employees 2,951,932 186,801 1,793,160
Employers 1,350,142 96,666 818,282
4,302,074 283,467 2,611,442
Total additions, net 31,804,841 660,063 11,094,808
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 11,275,388 1,134,527 5,474,381
Purchase fees - - -
Total deductions 11,275,388 1,134,527 5,474,381
Net increase (decrease) prior to
interfund transfers 20,529,453 (474,464) 5,620,427
Interfund transfers 3,723,709 114,613 2,438,346
Net increase (decrease) 24,253,162 (359,851) 8,058,773
Net assets available for benefits:
Beginning of year 86,166,348 5,730,942 37,098,977
End of year $110,419,510 $ 5,371,091 $45,157,750
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 17>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
(Page 3 of 5)
Vanguard
Vanguard Index Trust-
International Extended Vanguard
Growth Market Explorer
Portfolio Portfolio Fund
Assets
Additions to net assets
attributed to:
Net investment income
Dividends -
Common Shares of
Commonwealth Energy System $ - $ - $ -
Registered investment
company shares 410,854 467,053 283,422
Interest on loans - - -
410,854 467,053 283,422
Realized and unrealized
gain (loss) on investments (96,346) 839,872 40,357
Contributions:
Employees 588,069 289,009 156,631
Employers 264,637 129,120 65,369
852,706 418,129 222,000
Total additions, net 1,167,214 1,725,054 545,779
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 1,142,796 507,308 198,883
Purchase fees - 11,503 -
Total deductions 1,142,796 518,811 198,883
Net increase (decrease) prior to
interfund transfers 24,418 1,206,243 346,896
Interfund transfers 201,916 678,067 281,489
Net increase (decrease) 226,334 1,884,310 628,385
Net assets available for benefits:
Beginning of year 9,254,528 5,034,317 2,314,786
End of year $ 9,480,862 $ 6,918,627 $ 2,943,171
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 18>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
(Page 4 of 5)
Vanguard LIFEStrategy Funds-
Conservative Moderate
Income Growth Growth
Portfolio Portfolio Portfolio
Assets
Additions to net assets
attributed to:
Net investment income
Dividends -
Common Shares of
Commonwealth Energy System $ - $ - $ -
Registered investment
company shares 21,161 41,796 81,732
Interest on loans - - -
21,161 41,796 81,732
Realized and unrealized
gain (loss) on investments 25,332 47,936 151,357
Contributions:
Employees 4,166 7,215 36,734
Employers 1,921 2,716 18,573
6,087 9,931 55,307
Total additions, net 52,580 99,663 288,396
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 13,499 18,190 87,658
Purchase fees - - -
Total deductions 13,499 18,190 87,658
Net increase (decrease) prior to
interfund transfers 39,081 81,473 200,738
Interfund transfers 151,490 580,394 947,883
Net increase (decrease) 190,571 661,867 1,148,621
Net assets available for benefits:
Beginning of year 264,854 179,727 689,147
End of year $ 455,425 $ 841,594 $ 1,837,768
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 19>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
(Page 5 of 5)
Vanguard
LIFEStrategy
Funds-
Growth Loan
Portfolio Fund
Assets
Additions to net assets
attributed to:
Net investment income
Dividends -
Common Shares of
Commonwealth Energy System $ - $ -
Registered investment
company shares 62,196 -
Interest on loans - 820,039
62,196 820,039
Realized and unrealized
gain (loss) on investments 131,703 -
Contributions:
Employees 75,610 -
Employers 32,577 -
108,187 -
Total additions, net 302,086 820,039
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 52,688 398,591
Purchase fees - -
Total deductions 52,688 398,591
Net increase (decrease) prior to
interfund transfers 249,398 421,448
Interfund transfers 814,035 (1,030,960)
Net increase (decrease) 1,063,433 (609,512)
Net assets available for benefits:
Beginning of year 589,333 9,548,801
End of year $ 1,652,766 $ 8,939,289
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 20>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
(Page 1 of 5)
Commonwealth Vanguard
Energy System Money Market
Common Share Reserves-Prime
Total Fund Portfolio
Assets
Additions to net assets
attributed to:
Net investment income
Dividends -
Common Shares of
Commonwealth Energy System $ 5,113,157 $ 5,113,157 $ -
Registered investment
company shares 11,654,177 - 1,408,836
Interest on loans 675,349 - -
17,442,683 5,113,157 1,408,836
Realized and unrealized
gain (loss) on investments 17,828,551 3,951,273 -
Contributions:
Employees 8,294,889 1,975,041 761,184
Employers 4,053,049 1,039,431 442,636
12,347,938 3,014,472 1,203,820
Total additions, net 47,619,172 12,078,902 2,612,656
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 15,766,572 3,979,714 4,672,998
Purchase fees 9,498 - -
Total deductions 15,776,070 3,979,714 4,672,998
Net increase (decrease) prior to
interfund transfers 31,843,102 8,099,188 (2,060,342)
Interfund transfers - (8,751,780) 3,267,792
Net increase (decrease) 31,843,102 (652,592) 1,207,450
Net assets available for benefits:
Beginning of year 228,687,111 75,739,221 27,364,374
End of year $260,530,213 $ 75,086,629 $28,571,824
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 21>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
(Page 2 of 5)
Vanguard
Fixed Income
Securities Fund-
Vanguard Short-Term Vanguard
Windsor II Corporate Wellington
Fund Portfolio Fund
Assets
Additions to net assets
attributed to:
Net investment income
Dividends -
Common Shares of
Commonwealth Energy System $ - $ - $ -
Registered investment
company shares 6,056,337 346,159 2,893,328
Interest on loans - - -
6,056,337 346,159 2,893,328
Realized and unrealized
gain (loss) on investments 10,665,917 (92,444) 2,215,457
Contributions:
Employees 2,678,605 228,352 1,688,196
Employers 1,247,197 116,897 783,045
3,925,802 345,249 2,471,241
Total additions, net 20,648,056 598,964 7,580,026
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 3,941,035 277,681 1,872,076
Purchase fees - - -
Total deductions 3,941,035 277,681 1,872,076
Net increase (decrease) prior to
interfund transfers 16,707,021 321,283 5,707,950
Interfund transfers 701,540 (469,744) 172,531
Net increase (decrease) 17,408,561 (148,461) 5,880,481
Net assets available for benefits:
Beginning of year 68,757,787 5,879,403 31,218,496
End of year $ 86,166,348 $ 5,730,942 $37,098,977
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 22>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
(Page 3 of 5)
Vanguard
Vanguard Index Trust-
International Extended Vanguard
Growth Market Explorer
Portfolio Portfolio Fund
Assets
Additions to net assets
attributed to:
Net investment income
Dividends -
Common Shares of
Commonwealth Energy System $ - $ - $ -
Registered investment
company shares 396,605 369,401 116,347
Interest on loans - - -
396,605 369,401 116,347
Realized and unrealized
gain (loss) on investments 787,700 345,278 (57,811)
Contributions:
Employees 569,446 277,279 85,954
Employers 255,699 119,339 36,125
825,145 396,618 122,079
Total additions, net 2,009,450 1,111,297 180,615
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 289,952 363,550 77,579
Purchase fees - 9,498 -
Total deductions 289,952 373,048 77,579
Net increase (decrease) prior to
interfund transfers 1,719,498 738,249 103,036
Interfund transfers 225,557 435,349 2,211,750
Net increase (decrease) 1,945,055 1,173,598 2,314,786
Net assets available for benefits:
Beginning of year 7,309,473 3,860,719 -
End of year $ 9,254,528 $ 5,034,317 $ 2,314,786
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 23>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
(Page 4 of 5)
Vanguard LIFEStrategy Funds-
Conservative Moderate
Income Growth Growth
Portfolio Portfolio Portfolio
Assets
Additions to net assets
attributed to:
Net investment income
Dividends -
Common Shares of
Commonwealth Energy System $ - $ - $ -
Registered investment
company shares 10,885 8,159 26,245
Interest on loans - - -
10,885 8,159 26,245
Realized and unrealized
gain (loss) on investments (3,056) 767 (3,545)
Contributions:
Employees 800 1,867 7,950
Employers 333 645 3,681
1,133 2,512 11,631
Total additions, net 8,962 11,438 34,331
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants - - -
Purchase fees - - -
Total deductions - - -
Net increase (decrease) prior to
interfund transfers 8,962 11,438 34,331
Interfund transfers 255,892 168,289 654,816
Net increase (decrease) 264,854 179,727 689,147
Net assets available for benefits:
Beginning of year - - -
End of year $ 264,854 $ 179,727 $ 689,147
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 24>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
(Page 5 of 5)
Vanguard
LIFEStrategy
Funds-
Growth Loan
Portfolio Fund
Assets
Additions to net assets
attributed to:
Net investment income
Dividends -
Common Shares of
Commonwealth Energy System $ - $ -
Registered investment
company shares 21,875 -
Interest on loans - 675,349
21,875 675,349
Realized and unrealized
gain (loss) on investments 19,015 -
Contributions:
Employees 20,215 -
Employers 8,021 -
28,236 -
Total additions, net 69,126 675,349
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 79 291,908
Purchase fees - -
Total deductions 79 291,908
Net increase (decrease) prior to
interfund transfers 69,047 383,441
Interfund transfers 520,286 607,722
Net increase (decrease) 589,333 991,163
Net assets available for benefits:
Beginning of year - 8,557,638
End of year $ 589,333 $ 9,548,801
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 25>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
(Page 1 of 3)
Commonwealth Vanguard
Energy System Money Market
Common Share Reserves-Prime
Total Fund Portfolio
Assets
Additions to net assets
attributed to:
Net investment income:
Dividends -
Common Shares of
Commonwealth Energy System $ 5,219,181 $ 5,219,181 $ -
Registered investment
company shares 7,757,823 - 1,569,762
Interest on loans 647,206 - -
13,624,210 5,219,181 1,569,762
Realized and unrealized
gain on investments 36,861,646 14,531,777 -
Contributions:
Employees 8,679,077 2,397,221 1,082,525
Employers 4,392,730 1,270,786 618,671
13,071,807 3,668,007 1,701,196
Total additions, net 63,557,663 23,418,965 3,270,958
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 16,118,786 3,733,426 6,012,404
Purchase fees 9,949 - -
Total deductions 16,128,735 3,733,426 6,012,404
Net increase (decrease) prior to
interfund transfers 47,428,928 19,685,539 (2,741,446)
Interfund transfers - (6,736,395) 3,354,465
Net increase (decrease) 47,428,928 12,949,144 613,019
Net assets available for benefits:
Beginning of year 181,258,183 62,790,077 26,751,355
End of year $228,687,111 $ 75,739,221 $27,364,374
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 26>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
(Page 2 of 3)
Vanguard
Fixed Income
Securities Fund-
Vanguard Short-term Vanguard
Windsor II Corporate Wellington
Fund Portfolio Fund
Assets
Additions to net assets
attributed to:
Net investment income:
Dividends -
Common Shares of
Commonwealth Energy System $ - $ - $ -
Registered investment
company shares 4,014,071 352,866 1,517,817
Interest on loans - - -
4,014,071 352,866 1,517,817
Realized and unrealized
gain on investments 14,943,396 316,587 5,839,233
Contributions:
Employees 2,585,284 263,787 1,628,304
Employers 1,248,079 141,641 791,068
3,833,363 405,428 2,419,372
Total additions, net 22,790,830 1,074,881 9,776,422
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 3,000,179 761,498 1,916,861
Purchase fees - - -
Total deductions 3,000,179 761,498 1,916,861
Net increase (decrease) prior to
interfund transfers 19,790,651 313,383 7,859,561
Interfund transfers 216,246 669,127 2,255,071
Net increase (decrease) 20,006,897 982,510 10,114,632
Net assets available for benefits:
Beginning of year 48,750,890 4,896,893 21,103,864
End of year $ 68,757,787 $ 5,879,403 $31,218,496
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 27>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
(Page 3 of 3)
Vanguard
Vanguard Index Trust-
International Extended
Growth Market Loan
Portfolio Portfolio Fund
Assets
Additions to net assets
attributed to:
Net investment income:
Dividends -
Common Shares of
Commonwealth Energy System $ - $ - $ -
Registered investment
company shares 194,489 108,818 -
Interest on loans - - 647,206
194,489 108,818 647,206
Realized and unrealized
gain on investments 682,362 548,291 -
Contributions:
Employees 533,713 188,243 -
Employers 238,129 84,356 -
771,842 272,599 -
Total additions, net 1,648,693 929,708 647,206
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 337,375 96,424 260,619
Purchase fees - 9,949 -
Total deductions 337,375 106,373 260,619
Net increase (decrease) prior to
interfund transfers 1,311,318 823,335 386,587
Interfund transfers (645,280) 1,377,434 (490,668)
Net increase (decrease) 666,038 2,200,769 (104,081)
Net assets available for benefits:
Beginning of year 6,643,435 1,659,950 8,661,719
End of year $ 7,309,473 $ 3,860,719 $ 8,557,638
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 28>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
(1) General Information
The Employees Savings Plan of Commonwealth Energy System and Subsidiary
Companies (the Plan) was originally created in 1962 by Commonwealth Energy
System (the System) and its subsidiary companies to assist employees in
adopting a regular savings program and to help employees by providing
additional security for their retirement. The Plan has been amended or
restated from time to time thereafter. The latest Plan amendments became
effective as of January 1, 1998 and relate to changes in eligibility
requirements and allowance of rollovers from another qualified plan or
Individual Retirement Account to the Plan.
Vanguard Fiduciary Trust Company of Valley Forge, Pennsylvania, has acted
as Trustee for the Plan (Plan Trustee) since January 1, 1989. The Trustee
retains the Plan assets and provides records of Plan activity to a Plan Agent
designated by a three-member Savings Plan Board (the Board) that is appointed
by the Trustees of the System and by the directors of its subsidiary
companies. The Board is responsible (except for the duties specifically
vested in the Plan Trustee) for the administration of the Plan.
The term "Participant" as used in this report shall be deemed to include
Members, Inactive Members or Former Members, all as defined in the Plan.
The Employers participating in the Plan consist of certain, wholly-owned
subsidiary companies of the System, as follows: Cambridge Electric Light
Company, Canal Electric Company, Commonwealth Gas Company, COM/Energy Services
Company, Commonwealth Electric Company, Advanced Energy Systems, Inc.
(effective December 1996), COM/Energy Marketing, Inc. (effective May 1997) and
COM/Energy Technologies, Inc. (effective September 1997) (Employers).
Each eligible employee, upon joining the Plan, shall specify in one
percent (1%) increments his or her contributions and the applicable Employer
contributions to be invested in each of twelve separate Investment Funds
(Fund(s)) that are collectively referred to as the Trust Fund (Trust Fund).
The Trust Fund is described in Note 4.
Participants may change their Fund allocation contribution daily by
contacting Vanguard Participant Services. However, not more than fifty
percent (50%) of a Participant's contributions and the applicable Employer
contributions may be allocated to the Commonwealth Energy System Common Share
Fund.
The Plan is subject to provisions of the Employee Retirement Income
Security Act of 1974 (ERISA), the Retirement Equity Act of 1984, the Tax
Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1993, and the
Taxpayer Relief Act of 1997 relating to plans of this type.
<PAGE>
<PAGE 29>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
(2) Significant Accounting Policies
(a) Principles of Accounting
The financial statements of the Plan are prepared under the accrual method
of accounting. Shares in Funds of the Plan Trustee are valued at quoted
market prices that represent the net asset value of shares held by the Plan at
year-end. The Commonwealth Energy System Common Share Fund is valued at its
year-end closing market price. Participant loans are valued at cost that
approximates fair value. In addition, certain prior period amounts are
reclassified from time to time to conform with the presentation used in the
current year's financial statements.
(b) Federal Income Taxes
The Plan is subject to certain provisions of the Internal Revenue Code
(IRC) and qualifies under Section 401(a) and 401(k) of the IRC. The Internal
Revenue Service has issued a favorable determination letter, applicable to
Plan years beginning after January 1, 1993 and for amendments adopted on
January 15, 1993, which indicates that the Plan was designed in accordance
with applicable IRC requirements. Management believes that the Plan is
currently designed and operated in accordance with applicable IRC require-
ments. As a result, the Plan has not provided for Federal income taxes.
Generally, Participants are not subject to taxes on contributions or the
earned income until such time as distributions are made.
(c) Expenses
Brokerage fees, commissions, stock transfer taxes and other expenses in
connection with the purchase, sale or distribution of securities for each Fund
may be charged to such Fund. Any expense of litigation may be paid by the
Plan Trustee and charged to the Trust Fund or to the Fund or Funds to which
the litigation relates. Expenses and charges incurred in the administration
of the Plan are generally paid by the Employers. An administrative fee
relating to the issuance of Plan loans under the Loan Fund is paid by Plan
Participants.
(d) Realized Gain (Loss) on Investments Sold or Distributed
Pursuant to rules issued by the Department of Labor (DOL), realized gain
(loss) was computed by comparing the market value of the investment
distributed or sold with the market value of said investment at the beginning
of the Plan year. The Commonwealth Energy System Common Share Fund realized
gains of $1,021,874, $675,475 and $1,027,097 on the distribution or sale of
721,145, 453,158 and 414,822 System Common Shares in 1997, 1996 and 1995,
respectively.
<PAGE>
<PAGE 30>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
A summary of realized gains (losses) on investments sold or distributed
during the years ended December 31, 1997, 1996 and 1995 is set forth below:
Quoted
Quoted Market Price
Market Price Beginning of Gain
Investment Funds or Proceeds Year (Loss)
1997
Commonwealth Energy System
Common Share Fund $ 18,230,242 $17,208,368 $1,021,874
Vanguard Money Market Reserves-
Prime Portfolio 33,208,060 33,208,060 -
Vanguard Windsor II Fund 25,137,370 22,581,557 2,555,813
Vanguard Fixed Income Securities Fund-
Short-Term Corporate Portfolio 2,916,407 2,916,225 182
Vanguard Wellington Fund 10,592,884 9,795,887 796,997
Vanguard International Growth Portfolio 6,890,708 6,741,905 148,803
Vanguard Index Trust-
Extended Market Portfolio 1,949,014 1,845,648 103,366
Vanguard Explorer Fund 2,060,790 1,997,985 62,805
Vanguard LIFEStrategy Funds (1) 1,404,036 1,353,771 50,265
$102,389,511 $97,649,406 $4,740,105
1996
Commonwealth Energy System
Common Share Fund $ 10,814,896 $10,139,421 $ 675,475
Vanguard Money Market Reserves-
Prime Portfolio 17,818,107 17,818,107 -
Vanguard Windsor II Fund 12,205,764 11,313,017 892,747
Vanguard Fixed Income Securities Fund-
Short-Term Corporate Portfolio 2,170,370 2,196,757 (26,387)
Vanguard Wellington Fund 6,174,856 5,962,417 212,439
Vanguard International Growth Portfolio 3,791,405 3,632,606 158,799
Vanguard Index Trust-
Extended Market Portfolio 1,433,320 1,371,491 61,829
Vanguard Explorer Fund 1,210,006 1,220,007 (10,001)
Vanguard LIFEStrategy Funds (1) 116,672 114,869 1,803
$ 55,735,396 $53,768,692 $1,966,704
1995
Commonwealth Energy System
Common Share Fund $ 8,320,160 $ 7,293,063 $1,027,097
Vanguard Money Market Reserves-
Prime Portfolio 13,863,305 13,863,305 -
Vanguard Windsor II Fund 8,895,459 7,758,707 1,136,752
Vanguard Fixed Income Securities Fund-
Short-Term Corporate Portfolio 1,708,442 1,664,677 43,765
Vanguard Wellington Fund 4,213,461 3,690,865 522,596
Vanguard International Growth Portfolio 3,897,722 3,816,016 81,706
Vanguard Index Trust-
Extended Market Portfolio 450,953 412,569 38,384
$ 41,349,502 $38,499,202 $2,850,300
(1) Consists of four portfolios - Income, Conservative Growth, Moderate
Growth, and Growth
<PAGE>
<PAGE 31>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
(e) Unrealized Appreciation (Depreciation) of Investments
The Plan provides that the market value of each Fund shall be determined
by the Trustee on the last day of each month. Pursuant to the rules issued by
the DOL, unrealized appreciation (depreciation) is the difference between the
market value of a Fund at the beginning of the Plan year and the quoted market
price of the Fund at the applicable valuation date. The change in unrealized
appreciation (depreciation) during the years ended December 31, 1997, 1996 and
1995 is set forth below:
Unrealized
Beginning Appreciation
Investment Funds of Year End of Year (Depreciation)
1997
Commonwealth Energy System
Common Share Fund $45,274,263 $ 71,214,393 $25,940,130
Vanguard Windsor II Fund 28,788,085 43,671,213 14,883,128
Vanguard Fixed Income Securities Fund-
Short-Term Corporate Portfolio 11,114 41,686 30,572
Vanguard Wellington Fund 7,700,785 11,520,660 3,819,875
Vanguard International Growth Portfolio 1,245,488 1,000,339 (245,149)
Vanguard Index Trust-
Extended Market Portfolio 717,547 1,454,053 736,506
Vanguard Explorer Fund (47,810) (70,258) (22,448)
Vanguard LIFEStrategy Funds (1) 11,378 317,441 306,063
$83,700,850 $129,149,527 $45,448,677
1996
Commonwealth Energy System
Common Share Fund $41,998,465 $ 45,274,263 $ 3,275,798
Vanguard Windsor II Fund 19,014,915 28,788,085 9,773,170
Vanguard Fixed Income
Securities Fund-Short-Term
Corporate Portfolio 77,171 11,114 (66,057)
Vanguard Wellington Fund 5,697,767 7,700,785 2,003,018
Vanguard International
Growth Portfolio 616,587 1,245,488 628,901
Vanguard Index Trust-
Extended Market Portfolio 434,098 717,547 283,449
Vanguard Explorer Fund - (47,810) (47,810)
Vanguard LIFEStrategy Funds (1) - 11,378 11,378
$67,839,003 $ 83,700,850 $15,861,847
1995
Commonwealth Energy System
Common Share Fund $28,493,785 $41,998,465 $13,504,680
Vanguard Windsor II Fund 5,208,271 19,014,915 13,806,644
Vanguard Fixed Income
Securities Fund-Short-Term
Corporate Portfolio (195,651) 77,171 272,822
Vanguard Wellington Fund 381,130 5,697,767 5,316,637
Vanguard International
Growth Portfolio 15,931 616,587 600,656
Vanguard Index Trust-
Extended Market Portfolio (75,809) 434,098 509,907
$33,827,657 $ 67,839,003 $34,011,346
(1) Consists of four portfolios - Income, Conservative Growth, Moderate
Growth, and Growth
<PAGE>
<PAGE 32>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
(f) Income Recognition
Income of the Commonwealth Energy System Common Share Fund consists
primarily of dividends on its Common Shares. The allocation of each Fund's
earnings to a Participant's account is based on the percent of the
Participant's units in the Funds and is allocated daily. Purchases and sales
of investments are recorded on a trade-date basis. Interest income is accrued
when earned. Dividend income is recorded on the ex-dividend date. Capital
gain distributions are included in dividend income.
(3) Participating Companies and Contributions
Generally, Participants in the Plan are required to make contributions of
at least one percent (1%) but not more than sixteen (16%) of their
compensation as defined in the Plan. Effective January 1, 1998, the maximum
amount a Participant may defer annually was increased to $10,000 from $9,500
previously. This amount is increased from time to time by the Secretary of
the Treasury in accordance with the cost of living adjustment factor
prescribed in Section 402(g)(1) of the IRC. Compensation is defined to be an
employee's authorized basic salary (including any "lump sum payment" under the
authorized basic compensation pay program), except that in the case of sales
personnel compensated in whole or in part by commissions, compensation shall
be considered to equal ninety percent (90%) of the average compensation earned
by such employee in the preceding four calendar quarters but not less than
each employee's authorized basic compensation. Salary deferral contributions
by employees are made to the Plan by payroll deduction. The Employer
contributes an additional amount equal to each employee's contribution, up to
a maximum of four percent (4%) of each employee's basic compensation rate, as
previously defined, and up to five percent (5%) for those employees no longer
eligible for postretirement health benefits.
Effective January 1, 1998, a regular employee, who was not a Member of the
Plan as of December 31, 1997, is eligible to participate in the Plan on
January 1, 1998. A regular employee who is hired after December 31, 1997 will
become eligible to participate in the Plan on the first day of the second
month following his or her initial date of employment. The employer matching
contribution will not begin until the first day of the month that follows the
employee's completion of one full year of eligibility service (completion of
one-thousand (1,000) hours of service in a twelve-month period). Previously,
employees were eligible to join the Plan upon completion of their eligibility
service. A Participant is fully vested in and has a nonforfeitable right to
the value of his or her Member, Pay Deferral and Company Accounts at all
times.
Any eligible employee may change his or her contribution percentage as of
the first day of any month by contacting Vanguard Participant Services by the
fifteenth day of the preceding month.
<PAGE>
<PAGE 33>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
The participating system companies and contributions for the years ended
December 31, 1997, 1996 and 1995 are summarized below:
Employee Contributions
1997 1996 1995
Cambridge Electric Light Company $ 654,877 $ 658,553 $ 654,474
Canal Electric Company 661,950 684,476 642,435
Commonwealth Electric Company 3,693,090 3,814,155 3,687,316
Commonwealth Gas Company 2,682,350 2,134,806 2,749,403
COM/Energy Services Company 998,047 1,002,899 945,449
Advanced Energy Systems, Inc. 19,209 - -
COM/Energy Marketing, Inc. 17,990 - -
$8,727,513 $8,294,889 $8,679,077
Employer Contributions
1997 1996 1995
Cambridge Electric Light Company $ 302,097 $ 310,388 $ 317,289
Canal Electric Company 256,419 260,990 258,375
Commonwealth Electric Company 1,672,192 1,788,366 1,813,432
Commonwealth Gas Company 1,366,255 1,108,006 1,439,253
COM/Energy Services Company 558,343 585,299 564,381
Advanced Energy Systems, Inc. 6,784 - -
COM/Energy Marketing, Inc. 10,349 - -
$4,172,439 $4,053,049 $4,392,730
Participation by employees is voluntary and may begin as of the first day
of any month by notifying the respective employer in writing on or before the
fifteenth day of the preceding month coincident with or next following
eligibility. Of the 1,781 individuals eligible to participate at December 31,
1997, 1,748 (98.1%) Participants were active and fully vested in the Plan.
(4) Investments
(a) Description of Investment Funds
The following is a description of the twelve Investment Funds in which a
Participant may allocate his or her contributions and matching Employer
contributions:
Commonwealth Energy System Common Share Fund - Consists of Common Shares
of Beneficial Interest of Commonwealth Energy System purchased on the open
market or through the System's Dividend Reinvestment and Common Share Purchase
Plan. The System's Common Shares may also be acquired directly from the
System, if such Common Shares are made available by the Board of Trustees of
the System, based on the fair market value at the time of acquisition. The
Common Shares are acquired with employee contributions and Employer contribu-
tions, dividends and interest income. The Trustee, at its discretion, will
determine the manner in which such shares may be acquired. The Fund provides
the possibility of long-term growth through increases in the market value of
<PAGE>
<PAGE 34>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
the Common Shares and the reinvestment of the dividends. Participants may not
allocate more than fifty percent (50%) of their contributions to this Fund.
Vanguard Money Market Reserves-Prime Portfolio - A mutual fund that seeks
the maximum current income that is consistent with preservation of capital and
liquidity. Value is added primarily by emphasizing specific issues and
sectors of the money market that appear to be attractively priced based upon
historical yield spread relationships. Average maturity for the Fund is
normally maintained in the range of 30-70 days, and the Fund can own no
security with a maturity longer than one year. Such money market instruments
include domestic certificates of deposit and bankers' acceptances, commercial
paper, U.S. Treasury and Government agency securities and repurchase agree-
ments on such securities and up to fifty percent (50%) of net assets can be
invested in Eurodollar certificates of deposit issued by approved U.S. banks.
Vanguard Windsor II - A mutual fund having a primary objective to provide
long-term growth of capital and income. As a secondary objective, the Fund
seeks a reasonable level of current income. The Fund is a value-oriented
growth and income fund seeking investment opportunities primarily in common
stocks that are out of favor or undervalued.
Vanguard Fixed Income Securities Fund-Short-Term Corporate Portfolio - A
mutual fund that seeks to provide a high level of current income consistent
with a two to three-year average maturity. By investing in relatively short
maturity investment-grade bonds, the Portfolio is designed to help preserve
capital.
Vanguard Wellington Fund - A mutual fund designed to pursue conservation
of capital, reasonable current income and profits without undue risk.
Conservatively structured, the Fund uses a balanced investment approach
allocating 60%-70% of net assets to equities and the remainder to fixed income
securities. The fixed income securities reduce the Fund's exposure to risks
of common stocks while common stocks are selected from dividend-paying medium
and large-capitalization stocks whose prospects are improving. The objective
is to identify these companies before their values are recognized in the
marketplace.
Vanguard International Growth Portfolio - A mutual fund that seeks long-
term capital growth by investing in common stocks of companies based outside
the United States that have above-average growth potential.
Vanguard Index Trust-Extended Market Portfolio - A mutual fund that
attempts to provide investment results that parallel the performance of the
unmanaged Wilshire 4500 Equity Index, an index consisting primarily of mid-
and small capitalization companies. To minimize tracking errors and to
allocate the Portfolio's transaction costs (bid/ask spreads, commissions and
market impact) equitably since these costs are not reflected in the
performance of market indexes, the Portfolio assesses a 0.25% transaction fee
on shares purchased.
Vanguard Explorer Fund - A mutual fund that seeks long-term growth of
capital by investing primarily in common stocks of small and emerging growth
<PAGE>
<PAGE 35>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
companies.
Vanguard LIFEStrategy Funds - Consist of four Portfolios that attempt to
maximize total investment return (i.e. capital growth and income), subject to
different investment guidelines and asset allocation policies. These Funds
invest in other Vanguard mutual funds, representing different combinations of
stocks, bonds and reserves, and reflecting varying degrees of investment risk
and reward. The four Portfolios are:
The Income Portfolio seeks to provide current income.
The Conservative Growth Portfolio seeks to provide current income and low
to moderate growth of capital.
The Moderate Growth Portfolio seeks to provide growth of capital and a
reasonable level of current income.
The Growth Portfolio seeks to provide growth of capital.
(b) Investment Funds Accounts
The Board maintains for each Participant in the Plan, under each Fund in
which all or part of his or her contributions and the applicable Employer
contributions are invested, a separate Member Account that includes a Pay
Deferral Account for current pre-tax contributions. In addition, the Member
Account may include previous after-tax contributions. The Board also
maintains a separate Company Account (for each Participant) that includes
Employer contributions made on behalf of Participants. These Accounts reflect
the portion of each Participant's interest in the Fund that is attributable to
the contributions to such Accounts.
The Plan permits Participants to transfer amounts between Funds on a
daily basis, subject to certain limitations.
Effective January 1, 1998, a Participant may request to rollover an
"eligible rollover distribution" as defined in Section 402(c)(4) of the IRC
from a qualified plan or a distribution from a conduit Individual Retirement
Account to the Plan. The Board will maintain a separate Rollover Account for
each Participant and all Participants are fully vested in their Rollover
Account at all times.
The Plan Trustee may, at its discretion, temporarily invest funds
designated for a particular Fund in short-term interest-bearing securities or
may retain certain amounts of cash in each Fund without interest being
credited thereon, for the purpose of more effectively timing the purchase of
investments or liquidity needs for the several Funds. All contributions are
transmitted weekly to the Plan Trustee.
A Participant's choice of contribution allocation to eligible Funds will
continue until changed by such Participant. Investment designations may be
changed daily by contacting a Vanguard Participant Services representative.
All interest, dividends, and other income, as well as any cash from the
sale or exchange of securities or other property produced by each of the Funds
will be reinvested in the same Fund that produced such interest, dividends and
<PAGE>
<PAGE 36>
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
other income.
(5) Party in Interest
Commonwealth Energy System is a "party in interest" as that term is
defined in Section 3.14 of ERISA.
Certain transactions involving the acquisition and distribution of
securities are made at the direction of Participants in the Plan who elect to
participate in the Commonwealth Energy System Common Share Fund as one of
their investment options. These transactions are reflected in the
accompanying financial statements at market value and are net of brokerage
commissions relating to the acquisition of these securities.
During the years ended December 31, 1997, 1996 and 1995, the Plan Trustee
purchased Common Shares of Commonwealth Energy System, made distributions of
Common Shares to Participants and sold Common Shares to accommodate cash
distributions as follows:
Commonwealth Energy System Common Share Fund
Shares Shares Sold / Distributed
Purchased Cost Shares Aggregate Value
1997 198,067 $4,667,158 721,145 $10,862,830
1996 258,747 9,134,782 453,158 8,876,352
1995 360,946 7,226,244 414,822 5,706,748
The Plan Trustee also represents a party in interest to the Plan due to
the Plan's investments in Funds of the Plan Trustee.
(6) Loans to Plan Participants
Participants may request a loan from the Plan for a minimum amount of
$1,000. The amount of the loan shall not exceed the lesser of $50,000 or
fifty percent (50%) of the balance of the Participant's total value in the
various Funds of the Plan. The interest rate on a loan is based on the prime
rate at BankBoston, N.A. on the first day of the quarter preceding the loan
request plus one percent. Participants may choose a repayment period of one
to five years. For the years 1997, 1996 and 1995, the interest rates ranged
from 9.5% to 10%.
Eligible Participants have the option of securing a second loan from the
Plan including requests for up to a thirty (30) year loan to purchase a
primary residence.
(7) Reportable Transactions
Under ERISA, transactions which, individually or in the aggregate with
the same issuer, exceed five percent (5%) of the current value of Plan assets
at the beginning of the Plan year are "reportable transactions." Details of
these reportable transactions are set forth in Schedule II of this report.
<PAGE>
<PAGE 37>
Schedule I
Employer Identification
Number: 04-1662010
Plan Number: 091187
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
ITEM 27A: SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
Market Value
Name of Issuer and Number of at End of
Title of Issue Shares or Units Cost Period
Commonwealth Energy System
Common Share Fund:
Common Shares of
Beneficial Interest -
Commonwealth Energy System* 2,665,415 $ 40,721,007 $ 88,626,418
Vanguard Funds*:
Money Market Reserves-
Prime Portfolio 25,809,453 25,809,453 25,809,453
Windsor II 3,855,142 75,297,619 110,334,177
Fixed Income Securities Fund-
Short-Term Corporate Portfolio 496,570 5,351,640 5,367,919
Wellington 1,531,336 35,992,819 45,097,834
International Growth Portfolio 577,907 8,927,674 9,471,899
Index Trust-
Extended Market Portfolio 224,852 5,718,340 6,914,193
Vanguard Explorer Fund 53,179 2,986,614 2,940,817
Vanguard LIFEStrategy Fund -
Income Portfolio 36,638 439,223 455,415
Vanguard LIFEStrategy Fund -
Conservative Growth Portfolio 62,798 797,944 841,499
Vanguard LIFEStrategy Fund -
Moderate Growth Portfolio 124,021 1,715,063 1,836,746
Vanguard LIFEStrategy Fund -
Growth Portfolio 102,937 1,523,563 1,651,103
Total Vanguard Funds 164,559,952 210,721,055
Total Investments $205,280,959 $299,347,473
Loans to Participants $ 8,939,289 $ 8,939,289
* Represent parties in interest to the Plan
The accompanying notes are an integral part of this schedule.
<PAGE>
<PAGE 38>
Schedule II
Employer Identification
Number: 04-1662010
Plan Number: 091187
EMPLOYEES SAVINGS PLAN
OF COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
ITEM 27D: SCHEDULE OF REPORTABLE TRANSACTIONS (a)
FOR THE YEAR ENDED DECEMBER 31, 1997
Purchase
PURCHASES Price
Vanguard International Growth Portfolio (b) $ 7,215,563
Vanguard Money Market Reserves-
Prime Portfolio (b) 30,353,275
Vanguard Windsor II Fund (b) 31,704,791
Vanguard Wellington Fund (b) 13,961,043
Commonwealth Energy System
Common Share Fund (b) 13,989,333
Selling Historical
SALES Price Gain
Vanguard International
Growth Portfolio (b) $ 6,890,780 $ 465,802
Vanguard Money Market Reserves-
Prime Portfolio (b) 33,092,740 -
Vanguard Windsor II Fund (b) 24,914,690 6,684,232
Vanguard Wellington Fund (b) 10,542,652 2,125,014
Commonwealth Energy System
Common Share Fund (b) 27,656,201 8,224,434
(a) Fund investments with transactions or a series of transactions in excess
of five percent (5%) of the current value of the Plan's assets as of the
beginning of the Plan year.
(b) Represent parties in interest to the Plan
The accompanying notes are an integral part of this schedule.
<PAGE 1>
EXHIBIT 1
FOURTH AMENDMENT TO
EMPLOYEES SAVINGS PLAN OF
COMMONWEALTH ENERGY SYSTEM
AND SUBSIDIARY COMPANIES.
AS AMENDED AND RESTATED AS OF JANUARY 1, 1993.
WHEREAS, the Employees Savings Plan of Commonwealth Energy System and
Subsidiary Companies (the Plan) was originally established effective September
1, 1962, amended from time to time, was restated in its entirety as of
December 1, 1975 as of January 1, 1979, as of May 11, 1981, as of January 1,
1984, as of January 1, 1985, as of January 1, 1989 and as of January 1, 1993;
and
WHEREAS, Section 14.01 of the Plan gives Commonwealth Energy System (the
System) the right to further amend the Plan;
NOW, THEREFORE, in consideration of the premises and of the covenants
contained herein, the System does hereby covenant and agree that the Plan
shall be amended in accordance with the following provisions.
1. Effective January 1, 1997, Section 2.29 of the Plan is amended to read as
follows:
"2.29 Highly Compensated Employee. Effective as of January 1, 1997,
means, for the current Plan Year, any employee who performed services for
a Participating Company or any other entity referred to in Section
2.291(ii) during the Plan Year; and was at any time during the Plan Year
or during the preceding 12 month period a 5% Owner, as that term is
defined in Section 416(i)(1)(B) of the Code and the regulations there-
under; or received Compensation in excess of $80,000 for the preceding 12
month period (or such amount as indexed in accordance with Section 415(d)
of the Internal Revenue Code for the applicable Plan Year)."
2.291 The following will apply in determining Highly Compensated
Employees:
(i) A former Employee who does not perform services for a
Participating Company or any other entity referred to in Section
2.291(ii) during the current Plan Year shall be included as a Highly
Compensated Employee for the current Plan Year if he was a Highly
Compensated Employee upon his termination of employment or at any time
after attaining age 55.
(ii) The determination as to who is a Highly Compensated Employee
shall be made after determining within the controlled group (as deferred
in Sections 414(b) and 414(c) of the Code) and after application of the
special rules in Section 414(m), (n) and (o) of the Code."
2. Effective as of the dates set forth in Section 2.42 as revised herein,
Section 2.42 of the Plan is amended to read as follows:
"2.42 "Participating Company" means the System and its subsidiaries,
namely Cambridge Electric Light Company, Commonwealth Gas Company, Canal
Electric Company, COM/Energy Services Company, Commonwealth Electric
Company, Advanced Energy Systems, Inc. (effective December 12, 1996),
COM/Energy Marketing, Inc. (effective May 23, 1997) and COM/Energy
Technologies, Inc. (effective September 5, 1997) and any other corpora-
tions or systems of which more than fifty (50%) of the voting stock or
voting shares is or hereafter may be owned by the System and which, with
the consent of the Board of Trustees, has become a party to the Plan and
has adopted the trust agreement, each or any of them, as the case may be.
3. Effective January 1, 1998, Section 3.02 of the Plan is amended to read as
follows:
<PAGE>
<PAGE 2>
"3.02 Other Employees. Any Employee, except an Employee who is
classified as a "Temporary Employee", who is not a Member of the Plan as
of December 31, 1997 shall be eligible to become a Member of the Plan on
January 1,1998. Any Employee who is hired after December 31, 1997,
except an Employee who is classified as a "Temporary Employee", shall be
eligible to become a Member on the first day of the second month
following the date he completes his initial Hour of Service.
Any Employee, who is classified as a "Temporary Employee" shall be
eligible to become a Member of the Plan as of the first day of the
calendar month next following his completion of one year of Eligibility
Service."
4. Effective January 1, 1998, Section 4.03 of the Plan is amended to add the
following paragraph:
"Effective January 1, 1998, the Savings Plan Board (or its delegate)
shall maintain a separate Rollover Account for all Members eligible under
Section 5.17. All such Members shall be fully vested in their Rollover
Account at all times."
5. Effective January 1, 1998, Section 5.06 of the Plan is amended as
follows:
"5.06 Transfer Between Investment Funds. A Member, Inactive Member or
Former Member may elect to transfer the Asset Balance of his Accounts in
whole percentage amounts from any or all Investment Funds to any or all
other Investment Funds; provided that immediately after such transfer,
the total Asset Balance of the Accounts of the Member, Inactive Member or
Former Member under Fund A shall not exceed fifty percent (50%) of the
total Asset Balance of all the Accounts of the Member, Inactive Member or
Former Member under all Investment Funds. Such election to transfer may
be made at any time, but not more than once a day, by directly notifying
the Savings Plan Board (or its delegated agent) in the manner determined
by the Savings Plan Board.
Notwithstanding the foregoing, beginning January 1, 1998, transfer of
assets may be made from Fund D to any other Investment Fund except for
Fund A provided the shares subject to the transfer have remained in the
Plan (or the Tax Reduction Act of 1975 Employees Stock Ownership Plan and
Trust of Commonwealth Energy System and Subsidiary Companies) for the
required 84 months from the allocation date as required by Section 409(d)
of the Code. No transfer of assets shall be to Fund D from any other
Investment Fund."
6. Effective January 1, 1998, Article 5 is amended to add a new Section 5.17
as follows:
"5.17 Rollover Contribution. An Employee may file a written request
with the Savings Plan Board to accept his rollover contribution. Any
such request shall state the amount of the Rollover Contribution and
include a statement that such contribution constitutes a Rollover
Contribution.
The Savings Plan Board shall determine in accordance with a uniform and
nondiscriminatory policy, whether or not such contribution originated
from a plan qualified under Section 401(a) of the Code, and may require
such Employee to submit such other evidence and documentation as it deems
necessary.
All Rollover Contributions must be in cash and the amount contributed
under the Plan and any subsequent investment experience on such
contributions shall be credited to the Employee's Rollover Account.
For purposes of this Section 5.17, a Rollover Contribution means a
rollover of an "eligible rollover distribution" as defined in Section
402(c)(4) of the Code from a qualified plan or a distribution from a
conduit Individual Retirement Account."
<PAGE>
<PAGE 3>
7. Effective January 1, 1998, Section 6.01 of the Plan is amended to add the
following paragraph:
"Notwithstanding the above, with regard to Employees who become eligible
to become Members on or after January 1, 1998, such Members shall be
eligible to share in Company Contributions commencing with the first
payroll period of the calendar month following the month they complete
one year of Eligibility Service described in Section 3.03 of the Plan."
8. Effective January 1, 1998, Section 6.02 of the Plan is amended to add the
following paragraph:
"Notwithstanding the above, with regard to Employees who become eligible
to become Members on or after January 1, 1998, such Members shall be
eligible to share in the allocation of Company Contributions commencing
with the first payroll period that begins in the calendar month following
the calendar month in which they complete one year of Eligibility Service
as described in Section 3.03 of the Plan."
9. Effective January 1, 1998, Section 6.03 of the Plan is amended to add the
following paragraph:
"Effective for Employees who become eligible to become Members on or
after January 1, 1998, the Company Account of such Members shall be fully
vested on the first anniversary of the date such Employees first become
eligible to become Members provided such Employees are employed by the
Participating Employer or an Affiliated Company on such anniversary
date."
10. Effective January 1, 1998, Section 8.01 is amended to revise the last
sentence to read as follows:
"A Member, Inactive Member or Former Member shall be required to take an
immediate lump sum payment without such Member's consent if the value of
such payment is less than or equal to $5,000 (or such other amount as
permitted by applicable law or regulations)."
11. Effective January 1, 1998, Section 8.02 is amended to revise the last
sentence to read as follows:
"A Former Member shall be required to take an immediate lump sum payment
without such Former Member"s consent if the value of such payment is less
than or equals $5,000 (or such other amount as permitted by applicable
law or regulations)."
12. Effective January 1, 1998, Section 8.03 is amended to revise the last
sentence to read as follows:
"A Member, Inactive Member or Former Member shall be required to take an
immediate lump sum payment without such Member's consent if the value of
such payment is less than or equal to $5,000 (or such other amount as
permitted by applicable law or regulations)."
13. Effective January 1, 1998, Article 8 is amended to add new Section 8.13
as follows:
"8.13 Special Options for Terminated Information Services Employees.
Effective as of the transaction date, Members of the Plan who terminate
employment as a result of the outsourcing of the information systems
function to a third party service provider and who are subsequently
employed by such third party service provider to assist with such
outsourcing shall be provided with the following options:
(a) Members may elect to leave all of their Accounts with the Plan
until such time they terminate employment with the third party service
provider, at which time they may elect to receive distribution of all of
their Accounts;
<PAGE>
<PAGE 4>
(b) Members may elect to receive a distribution of all of their
Accounts except their Pay Deferral Account which must be transferred to
the qualified plan of the third party service provider."
Notwithstanding any provision to the contrary, all such Members who are
so terminated due to the outsourcing of the information service function
shall be fully vested upon such termination of employment."
14. Effective January 1, 1998, Section 9.02 is amended to read as follows:
"9.02 Regular Withdrawal. Subject to 9.03 and 9.04, a Member, Inactive
Member or disabled Former Member may not withdraw (i) any portion of his
Company Account attributable to contributions not held in such Account
for at least twenty-four (24) calendar months or (ii) any portion of his
Pay Deferral Account. Subject to these conditions, a withdrawal from his
Accounts may be made from the Investment Funds specified by the Member,
Inactive Member or disabled Former Member and in the following sequence
of contributions and earnings:
(a) First, one hundred percent (100%) of his Member Account
consisting of his contributions made to the Plan;
(b) Second, one hundred percent (100%) of his Rollover Account as
described in Section 5.17;
(c) Third, one hundred percent (100%) of the earnings on his
contributions in his Member Account; and
(d) Fourth, one hundred percent (100%) of his Company Account
consisting of Participating Company contributions held in his Company
Account for twenty-four (24) calendar months or longer and earnings
thereon."
15. Effective January 1, 1998, Article 9 is amended to add new Section 9.07
as follows:
"9.07 Withdrawals from Rollover Account. A Member, Inactive Member or
Former Member may withdraw all or part of the value of his Rollover
Account as described in Section 5.17 at any time in accordance with the
provisions of Section 9.02."
<PAGE>
<PAGE 5>
IN WITNESS WHEREOF, Commonwealth Energy System, Cambridge Electric Light
Company, Canal Electric Company, Commonwealth Gas Company, COM/Energy Services
Company, Commonwealth Electric Company, Advanced Energy Systems, Inc.,
COM/Energy Marketing, Inc. and COM/Energy Technologies, Inc. have caused this
Amendment to be duly executed in their name and on their behalf, this 14th day
of January, 1998.
COMMONWEALTH ENERGY SYSTEM*
CAMBRIDGE ELECTRIC LIGHT COMPANY
CANAL ELECTRIC COMPANY
COMMONWEALTH GAS COMPANY
COM/ENERGY SERVICES COMPANY
COMMONWEALTH ELECTRIC COMPANY
ADVANCED ENERGY SYSTEMS, INC.
COM/ENERGY MARKETING, INC.
COM/ENERGY TECHNOLOGIES, INC.
By: W. G. POIST
W.G. Poist
President of Commonwealth Energy
System and Chairman of its
Subsidiary Companies
By: M. P. SULLIVAN
M.P. Sullivan
Secretary of Commonwealth Energy
System and Clerk of its Subsidiary
Companies
*The name "Commonwealth Energy System" means the trustees for the time being
(as trustees but not individually) under a Declaration of Trust, dated
December 31, 1926, as amended, which is hereby referred to, and a copy of
which 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, said System binds only the trust estate, and no shareholder,
director, trustee, officer or agent assumes, or shall be held to, any
liability by reason therefore.
