<PAGE 1>
File No. 69-122
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
Form U-3A-2
STATEMENT BY HOLDING COMPANY CLAIMING EXEMPTION
UNDER RULE U-3A-2 FROM THE PROVISIONS OF THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
For the fiscal year ended December 31, 1997
COMMONWEALTH ENERGY SYSTEM
hereby files with the Securities and Exchange Commission, pursuant to Rule 2,
its statement claiming exemption as a holding company from the provisions of
the Public Utility Holding Company Act of 1935, and submits the following
information:
1. Name, State of organization, location and nature of business of claimant
and every subsidiary thereof.
Claimant
Commonwealth Energy System (the System), a Massachusetts Trust, organized
in the Commonwealth of Massachusetts is located in Cambridge,
Massachusetts. The System owns investments in the following electric and
gas utilities and other subsidiaries all of which are organized in the
Commonwealth of Massachusetts:
Name of Company Location
Electric Utilities
Cambridge Electric Light Company Cambridge, Massachusetts
Canal Electric Company Sandwich, Massachusetts
Commonwealth Electric Company New Bedford, Plymouth,
Martha's Vineyard and
the geographic area
comprising Cape Cod,
Massachusetts
Gas Utility
Commonwealth Gas Company Cambridge, Framingham, New
Bedford, Plymouth, South-
boro, Somerville and
Worcester, Massachusetts
Other Subsidiaries
Advanced Energy Systems, Inc. Cambridge, Massachusetts
(Engaged in the business of
owning and operating energy
facilities)
COM/Energy Acushnet Realty Cambridge, Massachusetts
(Organized as a Trust;
leases land to Hopkinton
LNG Corp.)
<PAGE 2>
COMMONWEALTH ENERGY SYSTEM
Other Subsidiaries (Continued)
Name of Company Location
COM/Energy Cambridge Realty Cambridge, Massachusetts
(Organized as a Trust to
hold various properties)
COM/Energy Freetown Realty Cambridge, Massachusetts
(Organized as a Trust
to develop a parcel of
land)
COM/Energy Marketing, Inc. Cambridge, Massachusetts
(Engaged in the marketing
and sale of energy products
and services)
COM/Energy Research Park Realty Cambridge, Massachusetts
(Organized as a Trust to
develop a research complex)
COM/Energy Resources, Inc. Cambridge, Massachusetts
(Organized to engage in the
sale of energy and energy
services)
COM/Energy Services Company Cambridge, Massachusetts
(Service company)
COM/Energy Steam Company Cambridge, Massachusetts
(Sells steam for heating
and industrial production)
COM/Energy Technologies, Inc. Cambridge, Massachusetts
(Engaged in the production,
distribution, marketing and
sale of energy information
and control products and
technologies)
Darvel Realty Trust Cambridge, Massachusetts
(Owns, develops and operates
real estate)
Hopkinton LNG Corp. Cambridge, Massachusetts
(Operates an LNG facility
with Commonwealth Gas Company
being its primary customer)
All of the previously listed subsidiaries are wholly-owned.
2. A brief description of the properties of claimant and each of its
subsidiary public utility companies is included in Exhibit C attached
hereto.
<PAGE 3>
COMMONWEALTH ENERGY SYSTEM
3. Reference is made to Exhibit D attached hereto for a description of sales
and purchases of electricity and gas.
This statement consists of pages numbered 1, 2, 3 and 4 inclusive,
together with the following exhibits:
Exhibit A - Financial Statements (Should be read in conjunction
with the Annual Report on Form 10-K filed with the
Securities and Exchange Commission.)
Exhibit B - Financial Data Schedule
Exhibit C - Description of Properties
Exhibit D - Sales and Purchases of Electricity and Gas
<PAGE 4>
COMMONWEALTH ENERGY SYSTEM
SIGNATURES
The above-named claimant has caused this statement to be duly
executed on its behalf by its authorized officer on this 27th day of February,
1998.
COMMONWEALTH ENERGY SYSTEM
By JAMES D. RAPPOLI
James D. Rappoli,
Financial Vice
President and
Treasurer
SEAL
Attest
MICHAEL P. SULLIVAN
Michael P. Sullivan,
Vice President,
Secretary and
General Counsel
Name, title and address of officer to whom notices and
correspondence concerning this statement should be addressed:
James D. Rappoli Financial Vice President
(Name) and Treasurer
(Title)
One Main Street, Cambridge, Massachusetts 02142-9150
(Address)
<PAGE 5>
INDEX TO
EXHIBIT A
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
INDEX TO FINANCIAL STATEMENTS
Exhibit Description
A - 1 Consolidating Statement of Income for the
Twelve Months Ended December 31, 1997 Pages 1 - 6
A - 2 Eliminations and Reclassifications to
Consolidating Statement of Income for
the Twelve Months Ended December 31, 1997
Summary Pages 1 - 3
Detail Pages 4 - 8
A - 3 Consolidating Statement of Retained
Earnings for the Twelve Months Ended
December 31, 1997 Pages 1 - 6
A - 4 Consolidating Balance Sheet -
December 31, 1997
Assets Pages 1 - 6
Capitalization and Liabilities Pages 7 - 12
Note to Consolidating Balance Sheet Page 13
A - 5 Eliminations and Reclassifications to
Consolidating Balance Sheet -
December 31, 1997
Summary Pages 1 - 2
Detail Pages 3 - 5
<PAGE 6>
EXHIBIT A-1
PAGE 1 of 6
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
Eliminations
and Reclass-
Consolidated ifications Total
OPERATING REVENUES:
Electric $ 688,508 $128,391 $ 816,899
Gas 333,977 245 334,222
Steam 16,879 - 16,879
Other 2,380 47,207 49,587
1,041,744 175,843 1,217,587
OPERATING EXPENSES:
Fuel used in electric and steam
production, principally oil 129,021 (32) 128,989
Electricity purchased for resale 265,805 122,044 387,849
Cost of gas sold 184,122 10,172 194,294
Other operation 225,658 43,729 269,387
Maintenance 36,838 - 36,838
Depreciation 53,405 - 53,405
Taxes -
Local property 19,130 - 19,130
Federal and state income -
Current 29,776 - 29,776
Deferred 2,542 - 2,542
Investment tax credits, net (1,278) - (1,278)
Payroll and other 9,075 - 9,075
954,094 175,913 1,130,007
OPERATING INCOME (LOSS) 87,650 (70) 87,580
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries - 51,952 51,952
Interest - subsidiaries - 888 888
Other, net 2,601 544 3,145
2,601 53,384 55,985
TOTAL INCOME 90,251 53,314 143,565
INTEREST CHARGES:
Long-term debt 33,572 - 33,572
Intercompany advances - 1,362 1,362
Other interest charges 6,778 - 6,778
40,350 1,362 41,712
NET INCOME (LOSS) $ 49,901 $ 51,952 $ 101,853
<PAGE 7>
EXHIBIT A-1
PAGE 2 of 6
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
Cambridge
Commonwealth Electric
Energy Subsidiaries Light
System Combined Company
OPERATING REVENUES:
Electric $ - $ 816,899 $131,327
Gas - 334,222 -
Steam - 16,879 -
Other - 49,587 -
- 1,217,587 131,327
OPERATING EXPENSES:
Fuel used in electric and steam
production, principally oil - 128,989 4,322
Electricity purchased for resale - 387,849 77,879
Cost of gas sold - 194,294 -
Other operation 1,370 268,017 28,720
Maintenance - 36,838 2,749
Depreciation - 53,405 4,335
Taxes -
Local property - 19,130 3,060
Federal and state income -
Current (1,090) 30,866 3,130
Deferred (7) 2,549 (448)
Investment tax credits, net - (1,278) (91)
Payroll and other - 9,075 885
273 1,129,734 124,541
OPERATING INCOME (LOSS) (273) 87,853 6,786
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries 51,952 - -
Interest - subsidiaries 888 - -
Other, net (5) 3,150 1,774
52,835 3,150 1,774
TOTAL INCOME 52,562 91,003 8,560
INTEREST CHARGES:
Long-term debt 2,638 30,934 1,560
Intercompany advances - 1,362 298
Other interest charges 23 6,755 1,486
2,661 39,051 3,344
NET INCOME (LOSS) $ 49,901 $ 51,952 $ 5,216
<PAGE 8>
EXHIBIT A-1
PAGE 3 of 6
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
COM/ COM/ COM/
Canal Energy Energy Energy
Electric Acushnet Cambridge Freetown
Company Realty Realty Realty
OPERATING REVENUES:
Electric $214,123 $ - $ - $ -
Gas - - - -
Steam - - - -
Other - 187 - -
214,123 187 - -
OPERATING EXPENSES:
Fuel used in electric and steam
production, principally oil 115,313 - - -
Electricity purchased for resale 5,601 - - -
Cost of gas sold - - - -
Other operation 27,707 24 5 279
Maintenance 10,209 - - -
Depreciation 19,214 - - -
Taxes -
Local property 2,770 28 4 123
Federal and state income -
Current 10,677 59 (2) (184)
Deferred (973) 25 - (4)
Investment tax credits, net (526) - - -
Payroll and other 768 - - -
190,760 136 7 214
OPERATING INCOME (LOSS) 23,363 51 (7) (214)
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries - - - -
Interest - subsidiaries - - - -
Other, net 468 11 2 -
468 11 2 -
TOTAL INCOME 23,831 62 (5) (214)
INTEREST CHARGES:
Long-term debt 7,910 - - -
Intercompany advances 212 - - 133
Other interest charges 881 - - -
9,003 - - 133
NET INCOME (LOSS) $ 14,828 $ 62 $ (5) $ (347)
<PAGE 9>
EXHIBIT A-1
PAGE 4 of 6
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
COM/ COM/ Common-
COM/Energy Energy Energy wealth
Research Services Steam Electric
Park Realty Company Company Company
OPERATING REVENUES:
Electric $ - $ - $ - $471,449
Gas - - - -
Steam - - 16,879 -
Other 1,225 37,035 - -
1,225 37,035 16,879 471,449
OPERATING EXPENSES:
Fuel used in electric and steam
production, principally oil - - 8,941 413
Electricity purchased for resale - - - 304,369
Cost of gas sold - - - -
Other operation 56 35,712 4,973 84,590
Maintenance - - 429 12,871
Depreciation - - 298 17,554
Taxes -
Local property 250 - 89 5,980
Federal and state income -
Current 265 842 816 7,106
Deferred 107 (846) (6) 3,722
Investment tax credits, net - - (4) (430)
Payroll and other - 1,259 59 2,762
678 36,967 15,595 438,937
OPERATING INCOME (LOSS) 547 68 1,284 35,212
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries - - - -
Interest - subsidiaries - - - -
Other, net 35 (46) 12 (206)
35 (46) 12 (206)
TOTAL INCOME 582 22 1,296 32,306
INTEREST CHARGES:
Long-term debt - - - 13,586
Intercompany advances - - 28 334
Other interest charges - - 3 1,463
- - 31 15,383
NET INCOME (LOSS) $ 582 $ 22 $ 1,265 $ 16,923
<PAGE 10>
EXHIBIT A-1
PAGE 5 of 6
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
Common-
wealth Darvel Hopkinton
Gas Realty LNG
Company Trust Corp.
OPERATING REVENUES:
Electric $ - $ - $ -
Gas 331,135 - -
Steam - - -
Other - 843 10,172
331,135 843 10,172
OPERATING EXPENSES:
Fuel used in electric and steam
production, principally oil - - -
Electricity purchased for resale - - -
Cost of gas sold 191,213 - -
Other operation 74,402 1,276 6,577
Maintenance 10,580 - -
Depreciation 10,482 - 1,513
Taxes -
Local property 6,315 - 511
Federal and state income -
Current 9,108 (445) 807
Deferred 745 653 (426)
Investment tax credits, net (200) - (27)
Payroll and other 3,225 - 19
305,870 1,484 8,974
OPERATING INCOME (LOSS) 25,265 (641) 1,198
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries - - -
Interest - subsidiaries - - -
Other, net 679 693 7
679 693 7
TOTAL INCOME 25,944 52 1,205
INTEREST CHARGES:
Long-term debt 7,251 - 627
Intercompany advances 330 - 27
Other interest charges 2,920 - 2
10,501 - 656
NET INCOME (LOSS) $ 15,443 $ 52 $ 549
<PAGE 11>
EXHIBIT A-1
PAGE 6 of 6
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
COM/ COM/ COM/
Advanced Energy Energy Energy
Energy Re- Market- Tech-
Systems, sources, ing, nologies,
Inc. Inc. Inc. Inc.
OPERATING REVENUES:
Electric $ - $ - $ - $ -
Gas - - 3,087 -
Steam - - - -
Other - - - 125
- - 3,087 125
OPERATING EXPENSES:
Fuel used in electric and steam
production, principally oil - - - -
Electricity purchased for resale - - - -
Cost of gas sold - - 3,081 -
Other operation 981 92 1,142 1,481
Maintenance - - - -
Depreciation - - - 9
Taxes -
Local property - - - -
Federal and state income -
Current (381) (32) (408) (492)
Deferred - - - -
Investment tax credits, net - - - -
Payroll and other 25 - 30 43
625 60 3,845 1,041
OPERATING INCOME (LOSS) (625) (60) (758) (916)
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries - - - -
Interest - subsidiaries - - - -
Other, net (279) - - -
(279) - - -
TOTAL INCOME (904) (60) (758) (916)
INTEREST CHARGES:
Long-term debt - - - -
Intercompany advances - - - -
Other interest charges - - - -
- - - -
NET INCOME (LOSS) $ (904) $ (60) $ (758) $ (916)
<PAGE 12>
EXHIBIT A-2
PAGE 1 of 8
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
SUMMARY OF ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
ENTRY NUMBER (See Pages 4-8 for detail)
TOTAL 1 2 3 4 5
STATEMENT OF INCOME CAPTION
OPERATING REVENUES:
Electric $128,391 $78,149 $ 8,885 $ 549 $39,242 $ -
Gas 245 - - - - 245
Other 47,207 - - - - -
OPERATING EXPENSES:
Fuel used in electric
and steam production (32) - - - - 245
Electricity purchased
for resale 122,044 76,859 5,643 549 38,993 -
Cost of gas sold 10,172 - - - - -
Other operation 43,729 1,290 3,242 - 249 -
OTHER INCOME:
Equity in earnings of
subsidiaries 51,952 - - - - -
Interest - subsidiaries 888 - - - - -
Other, net 544 - - - - -
INTEREST CHARGES:
Intercompany advances 1,362 - - - - -
Other interest charges - - - - - -
NET INCOME $ 51,952
<PAGE 13>
EXHIBIT A-2
PAGE 2 of 8
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
SUMMARY OF ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
ENTRY NUMBER (See Pages 4-8 for detail)
6 7 8 9 10 11
STATEMENT OF INCOME CAPTION
OPERATING REVENUES:
Electric $1, 513 $ - $ - $ - $ - $ 53
Gas - - - - - -
Other - 37,035 - - - -
OPERATING EXPENSES:
Fuel used in electric
and steam production - - - - - -
Electricity purchased
for resale - - - - - -
Cost of gas sold - - - - - -
Other operation 1,513 37,035 - - - 53
OTHER INCOME:
Equity in earnings of
subsidiaries - - 51,952 - - -
Interest - subsidiaries - - - 888 - -
Other, net - - - - 474 -
INTEREST CHARGES:
Intercompany advances - - - 888 474 -
Other interest charges - - - - - -
NET INCOME $51,952
<PAGE 14>
EXHIBIT A-2
PAGE 3 of 8
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
SUMMARY OF ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
ENTRY NUMBER (See Pages 4-8 for detail)
12 13 14
STATEMENT OF INCOME CAPTION
OPERATING REVENUES:
Electric $ - $ - $ -
Gas - - -
Other - - 10,172
OPERATING EXPENSES:
Fuel used in electric
and steam production (277) - -
Electricity purchased
for resale - - -
Cost of gas sold - - 10,172
Other operation 277 70 -
OTHER INCOME:
Equity in earnings of
subsidiaries - - -
Interest - subsidiaries - - -
Other, net - 70 -
INTEREST CHARGES:
Intercompany advances - - -
Other interest charges - - -
NET INCOME
<PAGE 15>
EXHIBIT A-2
PAGE 4 of 8
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
No. 1
OPERATING REVENUES:
Electric $78,149
OPERATING EXPENSES:
Electricity purchased for resale $76,859
Other operation 1,290
To eliminate intercompany sales of electricity as follows:
OPERATING EXPENSES
OPERATING Electricity
REVENUES Purchased Other
Electric for Resale Operation
Canal Electric Company $76,859 $ - $ -
Cambridge Electric Light Company - 15,772 -
Commonwealth Electric Company - 61,087 -
Commonwealth Electric Company 1,290 - -
Canal Electric Company - - 1,162
Commonwealth Gas Company - - 128
$78,149 $76,859 $ 1,290
No. 2
OPERATING REVENUES:
Electric $ 8,885
OPERATING EXPENSES:
Electricity purchased for resale $5,643
Other operation 3,242
To eliminate electricity purchased from third parties by Canal
Electric Company, acting as agent for Commonwealth Electric
Company and Cambridge Electric Light Company, including related
transmission costs.
No. 3
OPERATING REVENUES:
Electric $ 549
OPERATING EXPENSES:
Electricity purchased for resale $ 549
To eliminate intercompany charges relating to the abandonment of
Seabrook 2 billed by Canal Electric Company to Commonwealth
Electric Company and Cambridge Electric Light Company.
<PAGE 16>
EXHIBIT A-2
PAGE 5 of 8
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
No. 4
OPERATING REVENUES:
Electric $39,242
OPERATING EXPENSES:
Electricity purchased for resale $38,993
Other operation 249
To eliminate intercompany sales of electricity, including transmission costs,
by Canal Electric Company to Commonwealth Electric Company
($31,417,000) and Cambridge Electric Light Company ($7,825,000)
from the Seabrook nuclear power plant.
No. 5
OPERATING REVENUES:
Gas $ 245
OPERATING EXPENSES:
Fuel used in electric and steam production $ 245
To eliminate intercompany end-user transportation charges by
Commonwealth Gas Company to Cambridge Electric Light Company
No. 6
OPERATING REVENUES:
Electric $ 1,513
OPERATING EXPENSES:
Other operation $ 1,513
To eliminate intercompany rents billed by Commonwealth Electric
Company to Cambridge Electric Light Company and Canal
Electric Company.
No. 7
OPERATING REVENUES:
Other $37,035
OPERATING EXPENSES:
Other operation $37,035
To eliminate intercompany billing by COM/Energy Services Company
to the other subsidiaries.
<PAGE 17>
EXHIBIT A-2
PAGE 6 of 8
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
No. 8
OTHER INCOME:
Equity in earnings of subsidiaries $51,952
RETAINED EARNINGS $51,952
To eliminate Commonwealth Energy System's equity in 1997
earnings (losses) of subsidiaries as follows:
Cambridge Electric Light Company $ 5,216
Canal Electric Company 14,828
COM/Energy Acushnet Realty 62
COM/Energy Cambridge Realty (5)
COM/Energy Freetown Realty (347)
COM/Energy Research Park Realty 582
COM/Energy Services Company 22
COM/Energy Steam Company 1,264
Commonwealth Electric Company 16,923
Commonwealth Gas Company 15,443
Darvel Realty Trust 52
Hopkinton LNG Corp. 548
Advanced Energy Systems, Inc. (903)
COM/Energy Resources, Inc. (60)
COM/Energy Marketing, Inc. (758)
COM/Energy Technologies, Inc. (915)
$51,952
No. 9
OTHER INCOME:
Interest - subsidiaries $ 888
INTEREST CHARGES:
Intercompany advances $ 888
To eliminate interest income of Commonwealth Energy System
from subsidiaries as follows:
Cambridge Electric Light Company $ 176
Canal Electric Company 131
COM/Energy Freetown Realty 132
Commonwealth Electric Company 181
Commonwealth Gas Company 214
Hopkinton LNG Corp. 27
COM/Energy Steam Company 27
$ 888
<PAGE 18>
EXHIBIT A-2
PAGE 7 of 8
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
No. 10
OTHER INCOME:
Other, net $ 474
INTEREST CHARGES:
Intercompany advances $ 474
To eliminate intercompany interest income and expense as follows:
Income Expense
Cambridge Electric Light Company $ - $ 123
Canal Electric Company - 82
COM/Energy Acushnet Realty 10 -
COM/Energy Cambridge Realty 1 -
Darvel Realty Trust 402 -
COM/Energy Research Park Realty 33 -
COM/Energy Steam Company 12 -
Hopkinton LNG Corp. 5 -
Commonwealth Electric Company - 154
Commonwealth Gas Company 11 115
$ 474 $ 474
No. 11
OPERATING REVENUES:
Electric $ 53
OPERATING EXPENSES:
Other operation $ 53
To eliminate intercompany billing of fixed charges on a transformer
by Canal Electric Company to Commonwealth Electric Company.
No. 12
OPERATING EXPENSES:
Fuel used in electric and steam production $ 277
OPERATING EXPENSES:
Other operation $ 277
To eliminate intercompany billing for operating expenses from
Cambridge Electric Light Company to COM/Energy Steam Company.
No. 13
OTHER INCOME:
Other, net $ 70
OPERATING EXPENSES:
Other operation $ 70
To eliminate intercompany rent billed by Cambridge Electric Light
Company to COM/Energy Steam Company.
<PAGE 19>
EXHIBIT A-2
PAGE 8 of 8
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(Dollars in Thousands)
No. 14
OPERATING REVENUES:
Other $10,172
OPERATING EXPENSES:
Cost of Gas Sold $10,172
To eliminate intercompany billing by Hopkinton LNG Corp. to Commonwealth
Gas Company.
<PAGE 20>
EXHIBIT A-3
PAGE 1 of 6
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in Thousands)
Eliminations
and Reclass-
Consolidated ifications Total
Balance at December 31, 1996 $260,950 $ 80,650 $341,600
Add-
Net income for the year 49,901 51,952 101,853
310,851 132,602 443,453
Deduct-
Cash dividends-
System-
Common shares 34,068 - 34,068
Preferred shares 988 - 988
Subsidiaries-
Common stock - 40,934 40,934
35,056 40,934 75,990
Balance at December 31, 1997 $275,795 $ 91,668 $367,463
<PAGE 21>
EXHIBIT A-3
PAGE 2 of 6
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in Thousands)
Cambridge
Commonwealth Electric
Energy Subsidiaries Light
System Combined Company
Balance at December 31, 1996 $260,950 $ 80,650 $ 9,233
Add-
Net income for the year 49,901 51,952 5,216
310,851 132,602 14,449
Deduct-
Cash dividends-
System-
Common shares 34,068 - -
Preferred shares 988 - -
Subsidiaries-
Common stock - 40,934 2,842
35,056 40,934 2,842
Balance at December 31, 1997 $275,795 $ 91,668 $ 11,607
<PAGE 22>
EXHIBIT A-3
PAGE 3 of 6
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in Thousands)
Canal COM/Energy COM/Energy COM/Energy
Electric Acushnet Cambridge Freetown
Company Realty Realty Realty
Balance at December 31, 1996 $ 52,620 $ 369 $ 19 $(20,968)
Add-
Net income for the year 14,828 62 (5) (347)
67,448 431 14 (21,315)
Deduct-
Cash dividends-
System-
Common shares - - - -
Preferred shares - - - -
Subsidiaries-
Common stock 14,318 55 - -
14,318 55 - -
Balance at December 31, 1997 $ 53,130 $ 376 $ 14 $(21,315)
<PAGE 23>
EXHIBIT A-3
PAGE 4 of 6
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in Thousands)
Common-
COM/Energy COM/Energy COM/Energy wealth
Research Services Steam Electric
Park Realty Company Company Company
Balance at December 31, 1996 $ 527 $ (63) $ 644 $27,334
Add-
Net income for the year 582 22 1,265 16,923
1,109 (41) 1,909 44,257
Deduct-
Cash dividends-
System-
Common shares - - - -
Preferred shares - - - -
Subsidiaries-
Common stock 528 - 951 12,264
528 - 951 12,264
Balance at December 31, 1997 $ 581 $ (41) $ 958 $31,993
<PAGE 24>
EXHIBIT A-3
PAGE 5 of 6
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in Thousands)
Common-
wealth Darvel Hopkinton
Gas Realty LNG
Company Trust Corp.
Balance at December 31, 1996 $ 10,856 $ (302) $ 381
Add-
Net income for the year 15,443 52 549
26,299 (250) 930
Deduct-
Cash dividends-
System-
Common shares - - -
Preferred shares - - -
Subsidiaries-
Common stock 9,428 - 548
9,428 - 548
Balance at December 31, 1997 $ 16,871 $ (250) $ 382
<PAGE 25>
EXHIBIT A-3
PAGE 6 of 6
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in Thousands)
COM/ COM/ COM/
Advanced Energy Energy Energy
Energy Re- Market- Tech-
Systems, sources, ing, nologies,
Inc. Inc. Inc. Inc.
Balance at December 31, 1996 $ - $ - $ - $ -
Add-
Net income for the year (904) (60) (758) (916)
(904) (60) (758) (916)
Deduct-
Cash dividends-
System-
Common shares - - - -
Preferred shares - - - -
Subsidiaries-
Common stock - - - -
- - - -
Balance at December 31, 1997 $ (904) $ (60) $ (758) $ (916)
<PAGE 26>
EXHIBIT A-4
PAGE 1 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - ASSETS
DECEMBER 31, 1997
(Dollars in Thousands)
Eliminations
and Reclass-
Consolidated ifications Total
PROPERTY, PLANT AND EQUIPMENT,
at original cost:
Electric $1,169,737 $ - $1,169,737
Gas 374,110 - 374,110
Other 71,283 286 71,569
Leased property, net 12,740 - 12,740
1,627,870 286 1,628,156
Less: Accumulated depreciation
and amortization 577,962 - 577,962
Net Property, Plant and Equipment 1,049,908 286 1,050,194
INVESTMENTS:
Equity in common stock and earnings
of subsidiary companies - 462,960 462,960
Advances to associate companies - 19,360 19,360
Equity in corporate joint ventures-
Nuclear electric power companies
(2.5% to 4.5%) 10,368 - 10,368
Other, at cost 3,399 - 3,399
13,767 482,320 496,087
CURRENT ASSETS:
Cash 4,299 - 4,299
Accounts receivable:
Affiliated companies - 22,986 22,986
Other 138,354 - 138,354
Reserve for uncollectible accounts (9,408) - (9,408)
Unbilled revenues 32,029 - 32,029
Inventories, at average cost-
Materials and supplies 7,441 - 7,441
Natural gas 23,301 - 23,301
Electric production fuel oil 1,902 - 1,902
Prepaid property taxes 9,282 - 9,282
Prepaid income taxes - 7,964 7,964
Other 5,786 45 5,831
Total Current Assets 212,986 30,995 243,981
DEFERRED CHARGES:
Regulatory assets 178,864 - 178,864
Other 29,525 8,156 37,681
Total Deferred Charges 208,389 8,156 216,545
TOTAL $1,485,050 $ 521,757 $2,006,807
<PAGE 27>
EXHIBIT A-4
PAGE 2 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - ASSETS
DECEMBER 31, 1997
(Dollars in Thousands)
Cambridge
Commonwealth Electric
Energy Subsidiaries Light
System Combined Company
PROPERTY, PLANT AND EQUIPMENT,
at original cost:
Electric $ - $1,169,737 $ 156,753
Gas - 374,110 -
Other - 71,569 7,918
Leased property, net - 12,740 -
- 1,628,156 164,671
Less: Accumulated depreciation
and amortization - 577,962 63,706
Net Property, Plant and Equipment - 1,050,194 100,965
INVESTMENTS:
Equity in common stock and earnings
of subsidiary companies 462,960 - -
Advances to associate companies 10,255 9,105 -
Equity in corporate joint ventures-
Nuclear electric power companies
(2.5% to 4.5%) - 10,368 9,849
Other, at cost - 3,399 5
473,215 22,872 9,854
CURRENT ASSETS:
Cash 93 4,206 521
Accounts receivable:
Affiliated companies 102 22,884 2,743
Other 17 138,337 12,780
Reserve for uncollectible accounts - (9,408) (297)
Unbilled revenues - 32,029 3,047
Inventories, at average cost-
Materials and supplies - 7,441 540
Natural gas - 23,301 -
Electric production fuel oil - 1,902 936
Prepaid property taxes - 9,282 1,697
Prepaid income taxes - 7,964 1,192
Other - 5,831 501
Total Current Assets 212 243,769 23,660
DEFERRED CHARGES:
Regulatory assets - 178,864 70,466
Other 579 37,102 2,176
Total Deferred Charges 579 215,966 72,642
TOTAL $ 474,006 $1,532,801 $ 207,121
<PAGE 28>
EXHIBIT A-4
PAGE 3 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - ASSETS
DECEMBER 31, 1997
(Dollars in Thousands)
COM/ COM/ COM/
Canal Energy Energy Energy
Electric Acushnet Cambridge Freetown
Company Realty Realty Realty
PROPERTY, PLANT AND EQUIPMENT,
at original cost:
Electric $460,472 $ - $ - $ -
Gas - - - -
Other 9 553 3 2 932
Leased property, net 11,801 - - -
472,282 553 3 2 932
Less: Accumulated depreciation
and amortization 197,844 - - -
Net Property, Plant and Equipment 274,438 553 3 2 932
INVESTMENTS:
Equity in common stock and earnings
of subsidiary companies - - - -
Advances to associate companies - 190 25 -
Equity in corporate joint ventures-
Nuclear electric power companies
(2.5% to 4.5%) - - - -
Other, at cost 3,075 - - -
3,075 190 25 -
CURRENT ASSETS:
Cash 18 9 9 11
Accounts receivable:
Affiliated companies 12,159 - - 1
Other 15,397 38 - -
Reserve for uncollectible accounts - - - -
Unbilled revenues 86 - - -
Inventories, at average cost-
Materials and supplies 1,268 - - -
Natural gas - - - -
Electric production fuel oil 806 - - -
Prepaid property taxes 840 15 - 64
Prepaid income taxes - - 2 -
Other 923 2 3 10
Total Current Assets 31,497 64 14 86
DEFERRED CHARGES:
Regulatory assets 17,413 - - -
Other 9,774 (25) - -
Total Deferred Charges 27,187 (25) - 3,805
TOTAL $336,197 $ 782 $ 42 $ 6,823
<PAGE 29>
EXHIBIT A-4
PAGE 4 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - ASSETS
DECEMBER 31, 1997
(Dollars in Thousands)
COM/ COM/ COM/ Common-
Energy Energy Energy wealth
Research Services Steam Electric
Park Realty Company Company Company
PROPERTY, PLANT AND EQUIPMENT,
at original cost:
Electric $ - $ - $ - $551,959
Gas - - - -
Other 436 251 8,166 2,500
Leased property, net - 1,700 - -
436 1,951 8,166 554,459
Less: Accumulated depreciation
and amortization 125 251 4,561 174,488
Net Property, Plant and Equipment 311 1,700 3,605 379,971
INVESTMENTS:
Equity in common stock and earnings
of subsidiary companies - - - -
Advances to associate companies 395 - - -
Equity in corporate joint ventures-
Nuclear electric power companies
(2.5% to 4.5%) - - - 519
Other, at cost - - - 4
395 - - 523
CURRENT ASSETS:
Cash 11 165 22 1,496
Accounts receivable:
Affiliated companies - 4,119 - 1,753
Other 53 600 2,646 47,243
Reserve for uncollectible accounts - - - (2,044)
Unbilled revenues - - 613 9,162
Inventories, at average cost-
Materials and supplies - - 6 2,418
Natural gas - - - -
Electric production fuel oil - - - 160
Prepaid property taxes 117 - 44 3,043
Prepaid income taxes - - - -
Other 8 587 52 1,771
Total Current Assets 189 5,471 3,383 65,002
DEFERRED CHARGES:
Regulatory assets - - - 70,112
Other 397 8,908 8 3,601
Total Deferred Charges 397 8,908 8 73,713
TOTAL $ 1,292 $ 16,079 $ 6,996 $519,219
<PAGE 30>
EXHIBIT A-4
PAGE 5 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - ASSETS
DECEMBER 31, 1997
(Dollars in Thousands)
Common-
wealth Darvel Hopkinton
Gas Realty LNG
Company Trust Corp.
PROPERTY, PLANT AND EQUIPMENT,
at original cost:
Electric $ - $ - $ -
Gas 374,110 - -
Other 1,543 1 777 42,231
Leased property, net - - -
375,653 1 777 42,231
Less: Accumulated depreciation
and amortization 110,661 - 26,306
Net Property, Plant and Equipment 264,992 1 777 15,925
INVESTMENTS:
Equity in common stock and earnings
of subsidiary companies - - -
Advances to associate companies - 7 775 -
Equity in corporate joint ventures-
Nuclear electric power companies
(2.5% to 4.5%) - - -
Other, at cost 9 - -
9 7 775 -
CURRENT ASSETS:
Cash 1,867 10 11
Accounts receivable:
Affiliated companies 592 - 1,258
Other 51,584 4,234 1
Reserve for uncollectible accounts (2,853) (4,214) -
Unbilled revenues 19,121 - -
Inventories, at average cost-
Materials and supplies 1,225 - -
Natural gas 23,301 - -
Electric production fuel oil - - -
Prepaid property taxes 3,176 - 286
Prepaid income taxes 5,640 382 -
Other 1,234 151 472
Total Current Assets 104,887 563 2,028
DEFERRED CHARGES:
Regulatory assets 20,873 - -
Other 5,205 (244) 8
Total Deferred Charges 26,078 (244) 8
TOTAL $395,966 $ 9,871 $ 17,961
<PAGE 31>
EXHIBIT A-4
PAGE 6 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - ASSETS
DECEMBER 31, 1997
(Dollars in Thousands)
COM/ COM/ COM/
Advanced Energy Energy Energy
Energy Re- Market- Tech-
Systems, sources, ing, nologies,
Inc. Inc. Inc. Inc.
PROPERTY, PLANT AND EQUIPMENT,
at original cost:
Electric $ - $ - $ - $ -
Gas - - - -
Other 634 - - 2,408
Leased property, net - - - -
634 - - 2,408
Less: Accumulated depreciation
and amortization - - - 20
Net Property, Plant and Equipment 634 - - 2,388
INVESTMENTS:
Equity in common stock and earnings
of subsidiary companies - - - -
Advances to associate companies 530 40 150 -
Equity in corporate joint ventures-
Nuclear electric power companies
(2.5% to 4.5%) - - - -
Other, at cost 296 - - -
826 40 150 -
CURRENT ASSETS:
Cash 3 7 23 23
Accounts receivable:
Affiliated companies - - 9 250
Other 22 - 3,363 376
Reserve for uncollectible accounts - - - -
Unbilled revenues - - - -
Inventories, at average cost-
Materials and supplies - - - 1,984
Natural gas - - - -
Electric production fuel oil - - - -
Prepaid property taxes - - - -
Prepaid income taxes - 4 278 466
Other 51 2 39 25
Total Current Assets 76 13 3,712 3,124
DEFERRED CHARGES:
Regulatory Assets - - - -
Other 12 - 2 3,475
Total Deferred Charges 12 - 2 3,475
TOTAL $ 1,548 $ 53 $ 3,864 $ 8,987
<PAGE 32>
EXHIBIT A-4
PAGE 7 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - CAPITALIZATION AND LIABILITIES
DECEMBER 31, 1997
(Dollars in Thousands)
Eliminations
and Reclass-
Consolidated ifications Total
CAPITALIZATION:
Common Shares - Commonwealth Energy
System $2 par value, 21,531,784
shares outstanding (2,108 shares
issued during 1997) $ 43,063 $ - $ 43,063
Subsidiaries - 207,115 207,115
Amounts paid in excess of par value 111,912 164,575 276,487
Retained earnings 275,795 91,668 367,463
Total Common Share Equity 430,770 463,358 894,128
Redeemable Preferred Shares, $100 par
value, less current sinking fund
requirements:
Series A, 4.80%, 25,200 shares
authorized and outstanding 2,400 - 2,400
Series B, 8.10%, 38,400 shares
authorized and outstanding 3,680 - 3,680
Series C, 7.75%, 66,600 shares
authorized and outstanding 6,120 - 6,120
Long-Term Debt, including premiums,
less current sinking fund require-
ments and maturities 364,311 - 364,111
Total Capitalization 807,281 463,358 1,270,639
Capital Lease Obligations-Non Current 12,272 - 12,272
CURRENT LIABILITIES:
Interim Financing -
Notes payable to banks 94,075 - 94,075
Advances from affiliates - 19,360 19,360
Maturing long-term debt 19,000 - 19,000
Total Interim Financing 113,075 19,360 132,435
Other Current Liabilities -
Current sinking fund requirements 8,473 - 8,473
Accounts payable -
Affiliates - 22,986 22,986
Other 107,157 - 107,157
Dividends declared 8,517 - 8,517
Customers' deposits 3,500 - 3,500
Accrued taxes -
Income 14,410 7,964 22,374
Local property and other 9,795 - 9,795
Accrued interest 6,778 45 6,823
Capital lease obligations 1,229 - 1,229
Other 38,898 - 38,898
Total Other Current Liabilities 198,757 30,995 229,752
Total Current Liabilities 311,832 50,355 362,187
DEFERRED CREDITS AND RESERVES:
Accumulated deferred income taxes 176,354 8,044 184,398
Unamortized investment tax credits 25,340 - 25,340
Other 151,971 - 151,971
Total Deferred Credits and Reserves 353,665 8,044 361,709
TOTAL $1,485,050 $ 521,757 $2,006,807
<PAGE 33>
EXHIBIT A-4
PAGE 8 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - CAPITALIZATION AND LIABILITIES
DECEMBER 31, 1997
(Dollars in Thousands)
Cambridge
Commonwealth Electric
Energy Subsidiaries Light
System Combined Company
CAPITALIZATION:
Common Shares - Commonwealth Energy
System $2 par value, 21,531,784
shares outstanding (2,108 shares
issued during 1997) $ 43,063 $ - $ -
Subsidiaries - 207,115 8,665
Amounts paid in excess of par value 111,912 164,575 27,953
Retained earnings 275,795 91,668 11,607
Total Common Share Equity 430,770 463,358 48,225
Redeemable Preferred Shares, $100 par
value, less current sinking fund
requirements:
Series A, 4.80%, 25,200 shares
authorized and outstanding 2,400 - -
Series B, 8.10%, 38,400 shares
authorized and outstanding 3,680 - -
Series C, 7.75%, 66,600 shares
authorized and outstanding 6,120 - -
Long-Term Debt, including premiums,
less current sinking fund require-
ments and maturities 10,000 354,311 17,402
Total Capitalization 452,970 817,669 65,627
Capital Lease Obligations-Non Current - 12,272 -
CURRENT LIABILITIES:
Interim Financing -
Notes payable to banks - 94,075 19,000
Advances from affiliates - 19,360 11,290
Maturing long-term debt 10,000 9,000 -
Total Interim Financing 10,000 122,435 30,290
Other Current Liabilities -
Current sinking fund requirements 820 7,653 100
Accounts payable -
Affiliates 257 22,729 4,144
Other 354 106,803 8,076
Dividends declared 8,517 - -
Customers' deposits - 3,500 456
Accrued taxes -
Income 103 22,271 -
Local property and other - 9,795 1,706
Accrued interest 17 6,806 460
Capital lease obligations - 1,229 -
Other 101 38,797 3,374
Total Other Current Liabilities 10,169 219,583 18,316
Total Current Liabilities 20,169 342,018 48,606
DEFERRED CREDITS AND RESERVES:
Accumulated deferred income taxes - 184,398 15,135
Unamortized investment tax credits - 25,340 1,757
Other 867 151,104 75,996
Total Deferred Credits and Reserves 867 360,842 92,888
TOTAL $ 474,006 $1,532,801 $ 207,121
<PAGE 34>
EXHIBIT A-4
PAGE 9 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - CAPITALIZATION AND LIABILITIES
DECEMBER 31, 1997
(Dollars in Thousands)
COM/ COM/ COM/
Canal Energy Energy Energy
Electric Acushnet Cambridge Freetown
Company Realty Realty Realty
CAPITALIZATION:
Common Shares - Commonwealth Energy
System $2 par value, 21,531,784
shares outstanding (2,108 shares
issued during 1997) $ - $ - $ - $ -
Subsidiaries 38,080 325 25 26,000
Amounts paid in excess of par value 8,321 - - -
Retained earnings 53,130 376 14 (21,315)
Total Common Share Equity 99,531 701 39 4,685
Redeemable Preferred Shares, $100 par
value, less current sinking fund
requirements:
Series A, 4.80%, 25,200 shares
authorized and outstanding - - - -
Series B, 8.10%, 38,400 shares
authorized and outstanding - - - -
Series C, 7.75%, 66,600 shares
authorized and outstanding - - - -
Long-Term Debt, including premiums,
less current sinking fund require-
ments and maturities 83,917 - - -
Total Capitalization 183,448 701 39 4,685
Capital Lease Obligations-Non Current 11,227 - - -
CURRENT LIABILITIES:
Interim Financing -
Notes payable to banks 20,850 - - -
Advances from affiliates - - - 1,730
Maturing long-term debt - - - -
Total Interim Financing 20,850 - - 1,730
Other Current Liabilities -
Current sinking fund requirements 350 - - -
Accounts payable -
Affiliates 1,028 2 - 23
Other 21,335 - - 2
Dividends declared - - - -
Customers' deposits - - - -
Accrued taxes -
Income 2,054 33 - -
Local property and other 844 40 3 66
Accrued interest 1,414 - - -
Capital lease obligations 574 - - -
Other 4,760 - - 317
Total Other Current Liabilities 32,359 75 3 408
Total Current Liabilities 53,209 75 3 2,138
DEFERRED CREDITS AND RESERVES:
Accumulated deferred income taxes 69,447 5 - -
Unamortized investment tax credits 10,967 - - -
Other 7,899 1 - -
Total Deferred Credits and Reserves 88,313 6 - -
TOTAL $336,197 $ 782 $ 42 $ 6,823
<PAGE 35>
EXHIBIT A-4
PAGE 10 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - CAPITALIZATION AND LIABILITIES
DECEMBER 31, 1997
(Dollars in Thousands)
COM/ COM/ COM/ Common-
Energy Energy Energy wealth
Research Services Steam Electric
Park Realty Company Company Company
CAPITALIZATION:
Common Shares - Commonwealth Energy
System $2 par value, 21,531,784
shares outstanding (2,108 shares
issued during 1997) $ - $ - $ - $ -
Subsidiaries 350 325 2,550 51,099
Amounts paid in excess of par value - - - 97,112
Retained earnings 581 (41) 958 31,993
Total Common Share Equity 931 284 3,508 180,204
Redeemable Preferred Shares, $100 par
value, less current sinking fund
requirements:
Series A, 4.80%, 25,200 shares
authorized and outstanding - - - -
Series B, 8.10%, 38,400 shares
authorized and outstanding - - - -
Series C, 7.75%, 66,600 shares
authorized and outstanding - - - -
Long-Term Debt, including premiums,
less current sinking fund require-
ments and maturities - - - 147,192
Total Capitalization 931 284 3,508 327,396
Capital Lease Obligations-Non Current - 1,045 - -
CURRENT LIABILITIES:
Interim Financing -
Notes payable to banks - - - 14,900
Advances from affiliates - - 375 5,315
Maturing long-term debt - - - -
Total Interim Financing - - 375 20,215
Other Current Liabilities -
Current sinking fund requirements - - - 3,553
Accounts payable -
Affiliates 4 46 2,728 12,007
Other 2 2,348 111 32,826
Dividends declared - - - -
Customers' deposits - - - 2,038
Accrued taxes -
Income 74 718 2 19,114
Local property and other 120 11 44 3,299
Accrued interest - - - 3,811
Capital lease obligations - 655 - -
Other - 479 22 10,679
Total Other Current Liabilities 200 4,257 2,907 87,327
Total Current Liabilities 200 4,257 3,282 107,542
DEFERRED CREDITS AND RESERVES:
Accumulated deferred income taxes 106 - 51 50,283
Unamortized investment tax credits - - 30 6,696
Other 55 10,493 125 27,302
Total Deferred Credits and Reserves 161 10,493 206 84,281
TOTAL $ 1,292 $ 16,079 $ 6,996 $519,219
<PAGE 36>
EXHIBIT A-4
PAGE 11 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - CAPITALIZATION AND LIABILITIES
DECEMBER 31, 1997
(Dollars in Thousands)
Common-
wealth Darvel Hopkinton
Gas Realty LNG
Company Trust Corp.
CAPITALIZATION:
Common Shares - Commonwealth Energy
System $2 par value, 21,531,784
shares outstanding (2,108 shares
issued during 1997) $ - $ - $ -
Subsidiaries 71,425 1,700 50
Amounts paid in excess of par value 27,739 - 3,450
Retained earnings 16,871 (250) 382
Total Common Share Equity 116,035 1,450 3,882
Redeemable Preferred Shares, $100 par
value, less current sinking fund
requirements:
Series A, 4.80%, 25,200 shares
authorized and outstanding - - -
Series B, 8.10%, 38,400 shares
authorized and outstanding - - -
Series C, 7.75%, 66,600 shares
authorized and outstanding - - -
Long-Term Debt, including premiums,
less current sinking fund require-
ments and maturities 105,800 - -
Total Capitalization 221,835 1,450 3,882
Capital Lease Obligations-Non Current - - -
CURRENT LIABILITIES:
Interim Financing -
Notes payable to banks 39,325 - -
Advances from affiliates - - 650
Maturing long-term debt - - 9,000
Total Interim Financing 39,325 - 9,650
Other Current Liabilities -
Current sinking fund requirements 3,650 - -
Accounts payable -
Affiliates 1,869 20 56
Other 32,450 - 210
Dividends declared - - -
Customers' deposits 1,006 - -
Accrued taxes -
Income - - 103
Local property and other 3,366 - 285
Accrued interest 1,038 - 83
Capital lease obligations - - -
Other 18,551 250 365
Total Other Current Liabilities 61,930 270 1,102
Total Current Liabilities 101,255 270 10,752
DEFERRED CREDITS AND RESERVES:
Accumulated deferred income taxes 38,322 8,151 2,898
Unamortized investment tax credits 5,461 - 429
Other 29,093 - -
Total Deferred Credits and Reserves 72,876 8,151 3,327
TOTAL $395,966 $ 9,871 $ 17,961
<PAGE 37>
EXHIBIT A-4
PAGE 12 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - CAPITALIZATION AND LIABILITIES
DECEMBER 31, 1997
(Dollars in Thousands)
COM/ COM/ COM/
Advanced Energy Energy Energy
Energy Re- Market- Tech-
Systems, sources, ing, nologies,
Inc. Inc. Inc. Inc.
CAPITALIZATION:
Common Shares - Commonwealth Energy
System $2 par value, 21,531,784
shares outstanding (2,108 shares
issued during 1997) $ - $ - $ - $ -
Subsidiaries 1,920 101 1,200 3,300
Amounts paid in excess of par value - - - -
Retained earnings (904) (60) (758) (916)
Total Common Share Equity 1,016 41 442 2,384
Redeemable Preferred Shares, $100 par
value, less current sinking fund
requirements:
Series A, 4.80%, 25,200 shares
authorized and outstanding - - - -
Series B, 8.10%, 38,400 shares
authorized and outstanding - - - -
Series C, 7.75%, 66,600 shares
authorized and outstanding - - - -
Long-Term Debt, including premiums,
less current sinking fund require-
ments and maturities - - - -
Total Capitalization 1,016 41 442 2,384
Capital Lease Obligations-Non Current - - - -
CURRENT LIABILITIES:
Interim Financing -
Notes payable to banks - - - -
Advances from affiliates - - - -
Maturing long-term debt - - - -
Total Interim Financing - - - -
Other Current Liabilities -
Current sinking fund requirements - - - -
Accounts payable -
Affiliates 282 12 377 131
Other 10 - 3,013 6,420
Dividends declared - - - -
Customers' deposits - - - -
Accrued taxes -
Income 173 - - -
Local property and other - - 7 4
Accrued interest - - - -
Capital lease obligations - - - -
Other - - - -
Total Other Current Liabilities 465 12 3,397 6,555
Total Current Liabilities 465 12 3,397 6,555
DEFERRED CREDITS AND RESERVES:
Accumulated deferred income taxes - - - -
Unamortized investment tax credits - - - -
Other 67 - 25 48
Total Deferred Credits and Reserves 67 - 25 48
TOTAL $ 1,548 $ 53 $ 3,864 $ 8,987
<PAGE 38>
EXHIBIT A-4
PAGE 13 of 13
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
NOTE TO CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
(Dollars in Thousands)
Consolidated long-term debt, including Less Current
premiums, at December 31, 1997 is Sinking Fund
summarized as follows: Requirements
Amount and Current
Bonds, Mortgages and Similar Debt - Outstanding Maturities Net
Commonwealth Energy System -
9-Year 10.45% Senior Notes, Due 6/28/98 10,000
10-Year 10.58% Senior Notes, Due 6/28/99 10,000
20,000 $10,000 $10,000
Cambridge Electric Light Company -
30-Year 7 3/4% Notes, Series D, Due 6/1/02 2,502
7-Year 8.04% Notes, Series G, Due 3/1/99 10,000
15-Year 8.7% Notes, Series H, Due 3/1/07 5,000
17,502 100 17,402
Canal Electric Company -
First and General Mortgage Bonds:
Series B, 8.85%, Due 9/1/06 34,305
Series E, 7 3/8%, Due 12/1/20 9,962
Series F, 9 7/8%, Due 12/1/20 40,000
84,267 350 83,917
Commonwealth Gas Company -
First Mortgage Bonds:
Series I, 8.99%, Due 12/1/01 14,450
Series J, 9.95%, Due 12/1/20 25,000
Series K, 7.11%, Due 12/30/33 35,000
Series L, 6.54%, Due 9/30/07 10,000
Series M, 7.04%, Due 9/30/17 25,000
109,450 3,650 105,800
Commonwealth Electric Company -
Notes:
15-Year, 9.50%, Due 12/1/04 10,000
18-Year, 9.55%, Due 12/1/07 10,000
25-Year, 9.53%, Due 12/1/14 10,000
30-Year, 9.60%, Due 12/1/19 10,000
10-Year, 7.43%, Due 1/1/03 15,000
15-Year, 7.70%, Due 1/1/08 10,000
20-Year, 7.98%, Due 1/1/13 25,000
30-Year, 8.47%, Due 1/1/23 15,000
Term Loans:
15-Year 9.30%, Due 1/1/02 29,955
25-Year 9.37%, Due 1/1/12 15,790
150,745 3,553 147,192
Hopkinton LNG Corp. -
5-Year Term Loan, variable rate,
6.125% at 12/31/96, Due 12/29/98 9,000 9,000 -
$390,964 $26,653 $364,311
<PAGE 39>
EXHIBIT A-5
PAGE 1 of 5
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
SUMMARY OF ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
(Dollars in Thousands)
ENTRY NUMBER
(See Pages 3, 4, and 5)
ASSETS Total 1 2
PROPERTY, PLANT AND EQUIPMENT:
Other $ 286 $ - $ -
INVESTMENTS:
Equity in common stock and earnings of
subsidiary companies 462,960 462,960 -
Advances to associate companies 19,360 - 19,360
482,320 462,960 19,360
CURRENT ASSETS:
Accounts receivable -
affiliated companies 22,986 - 22,986
Prepaid income taxes 7,964 - -
Other 45 - -
30,995 - 22,986
DEFERRED CHARGES 8,156 - -
$521,757 $462,960 $ 42,346
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Shares -
Subsidiaries $207,115 $207,115 $ -
Amounts paid in excess of par value 164,575 164,575 -
Retained earnings 91,668 91,270 -
Total Common Share Equity 463,358 462,960 -
CURRENT LIABILITIES:
Interim Financing -
Advances from associate companies 19,360 - 19,360
Other Current Liabilities -
Accounts payable - affiliated companies 22,986 - 22,986
Accrued taxes - income 7,964 - -
Accrued interest 45 - -
30,995 - 22,986
DEFERRED CREDITS AND RESERVES:
Accumulated deferred income taxes 8,044 - -
$521,757 $462,960 $ 42,346
<PAGE 40>
EXHIBIT A-5
PAGE 2 of 5
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
SUMMARY OF ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
(Dollars in Thousands)
ENTRY NUMBER
(See Pages 3, 4, and 5)
ASSETS 3 4 5
PROPERTY, PLANT AND EQUIPMENT:
Other $ 286 $ - $ -
INVESTMENTS:
Equity in common stock and earnings of
subsidiary companies - - -
Advances to associate companies - - -
- - -
CURRENT ASSETS:
Accounts receivable -
affiliated companies - - -
Prepaid income taxes - 7,964 -
Other - - 45
- 7,964 45
DEFERRED CHARGES - 8,156 -
$ 286 $16,120 $ 45
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Shares -
Subsidiaries $ - $ - $ -
Amounts paid in excess of par value - - -
Retained earnings 398 - -
Total Common Share Equity 398 - -
CURRENT LIABILITIES:
Interim Financing -
Advances from associate companies - - -
Other Current Liabilities -
Accounts payable - affiliated companies - - -
Accrued taxes - income - 7,964 -
Accrued interest - - 45
- 7,964 45
DEFERRED CREDITS AND RESERVES:
Accumulated deferred income taxes (112) 8,156 -
$ 286 $16,120 $ 45
<PAGE 41>
EXHIBIT A-5
PAGE 3 of 5
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
(Dollars in Thousands)
No. 1
Common shares - subsidiaries $207,115
Amounts paid in excess of par value 164,575
Retained Earnings 91,270
INVESTMENTS - Equity in common stock and earnings
of subsidiaries $462,960
To eliminate Parent company investment in common stock and
earnings of subsidiary companies. Income of subsidiaries
recorded on equity accounting basis on Parent company
statements.
Common
Shares Amounts Paid System's
Par in Excess of Retained Equity in
Value Par Value Earnings Subsidiaries
Cambridge Electric Light Company $ 8,665 $ 27,953 $ 11,607 $ 48,225
Canal Electric Company 38,080 8,321 53,130 99,531
COM/Energy Acushnet Realty 325 - 376 701
COM/Energy Cambridge Realty 25 - 14 39
COM/Energy Freetown Realty 26,000 - (21,315) 4,685
COM/Energy Research Park Realty 350 - 581 931
COM/Energy Services Company 325 - (41) 284
COM/Energy Steam Company 2,550 - 958 3,508
Commonwealth Electric Company 51,099 97,112 31,993 180,204
Commonwealth Gas Company 71,425 27,739 16,871 116,035
Darvel Realty Trust 1,700 - (648) 1,052
Hopkinton LNG Corp. 50 3,450 382 3,882
Advanced Energy Systems, Inc. 1,920 - (904) 1,016
COM/Energy Resources, Inc. 101 - (60) 41
COM/Energy Marketing, Inc. 1,200 - (758) 442
COM/Energy Technologies, Inc. 3,300 - (916) 2,384
$207,115 $164,575 $ 91,270 $462,960
No. 2
Advances from affiliates $19,360
Accounts payable - Affiliates 22,986
INVESTMENTS - Advances to affiliates $19,360
Accounts receivable - Affiliates 22,986
To eliminate intercompany accounts as follows:
<PAGE 42>
EXHIBIT A-5
PAGE 4 of 5
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
(Dollars in Thousands)
Investments- Accounts Advances Accounts
Advances to Receivable- from Payable-
Affiliates Affiliates Affiliates Affiliates
Cambridge Electric Light Company $ - $ 2,743 $11,290 $ 4,144
Canal Electric Company - 12,159 - 1,028
COM/Energy Acushnet Realty 190 - - 2
COM/Energy Freetown Realty - 1 1,730 23
COM/Energy Cambridge Realty 25 - - -
COM/Energy Research Park Realty 395 - - 4
COM/Energy Services Company - 4,119 - 46
COM/Energy Steam Company - - 375 2,728
Commonwealth Electric Company - 1,753 5,315 12,007
Commonwealth Energy System 10,255 102 - 257
Commonwealth Gas Company - 592 - 1,869
Darvel Realty Trust 7,775 - - 20
Hopkinton LNG Corp. - 1,258 650 56
Advanced Energy Systems, Inc. 530 - - 282
COM/Energy Resources, Inc. 40 - - 12
COM/Energy Marketing, Inc. 150 9 - 377
COM/Energy Technologies, Inc. - 250 - 131
$19,360 $22,986 $19,360 $22,986
No. 3
Retained earnings $ 398
PROPERTY, PLANT AND EQUIPMENT:
Other $ 286
DEFERRED CREDITS AND RESERVES:
Accumulated deferred income taxes 112
To eliminate intercompany interest capitalized by Darvel
Realty Trust.
No. 4
CURRENT LIABILITIES:
Accrued income taxes $7,964
DEFERRED CREDITS AND RESERVES:
Accumulated deferred income taxes 8,156
CURRENT ASSETS:
Prepaid income taxes $7,964
DEFERRED CHARGES 8,156
To reclassify income taxes.
<PAGE 43>
EXHIBIT A-5
PAGE 5 of 5
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
ELIMINATIONS AND RECLASSIFICATIONS
TO
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
(Dollars in Thousands)
No. 5
CURRENT LIABILITIES:
Accrued interest $ 45
CURRENT ASSETS:
Other $ 45
To eliminate intercompany interest receivable and
payable on money pool transactions as follows:
Receivable Payable
Canal Electric Company $ - $ 1
Darvel Realty Trust 37 -
Commonwealth Gas Company - 2
Commonwealth Electric Company - 21
Cambridge Electric Light Company - 21
COM/Energy Steam Company 1 -
COM/Energy Acushnet Realty 2 -
Hopkinton LNG Corp. 1 -
COM/Energy Research Park Realty 4 -
$45 $45
<PAGE 44>
EXHIBIT C
PAGE 1 of 2
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
DESCRIPTION OF PROPERTIES - ITEM 2 OF FORM U-3A-2
DECEMBER 31, 1997
ELECTRIC Generating Stations
Rated KW
Company and Generating Station Locations Type Capacity (a)
Cambridge Electric Light Company
Kendall Square, Cambridge, Massachusetts Steam 67,450
Kendall Square, Cambridge, Massachusetts Jets 46,640
Blackstone Street, Cambridge, Massachusetts Steam 15,000
129,090
Canal Electric Company (d)
Sandwich, Massachusetts Steam 542,500
Sandwich, Massachusetts Steam 529,620(b)
1,072,120
Commonwealth Electric Company (c)
Oak Bluffs, Massachusetts Internal
Comb. 8,250
West Tisbury, Massachusetts Internal
Comb. 5,500
13,750
(a) Manufacturer's maximum name plate rating of generating units as
reported in Schedule 1, F.E.R.C. Power System Statement Form No. 12.
(b) Represents the entire capacity of Canal Unit No. 2 in which Canal
Electric Company and Montaup Electric Company each own an undivided
one-half joint-ownership interest. Canal is operator of the unit.
(c) Commonwealth Electric Company is a joint-owner, together with several
other New England utility companies, of the Wyman Unit #4 which is
located in Yarmouth, Maine. The Company has a 1.4325% interest in this
oil-fired 600,000 KW steam type unit, with an entitlement of
approximately 9 MW of power. The unit is 60% owned by Central Maine
Power Company.
(d) Canal Electric Company is a joint-owner, together with several other
New England utility companies, of the Seabrook 1 nuclear power plant
which is located in Seabrook, New Hampshire. The Company has a 3.52%
interest in this 1,150,000 KW unit, with an entitlement of
approximately 40 MW of power.
Notes: (1) Neither the System nor any of the "Other Subsidiaries" shown on
the cover of this report own any properties for the generation,
transmission or distribution of electricity or gas.
(2) None of the subsidiary companies owns any transmission lines or
pipelines which deliver or receive electric energy or gas at the
borders of The Commonwealth of Massachusetts with the exception of
a 20% undivided joint interest in a transmission line from the
Massachusetts border to a point in the Boston Edison Company
system in the vicinity of West Medway, Massachusetts and a 3.8%
interest in the Hydro-Quebec Phase II transmission facilities from
Monroe, New Hampshire to West Medway, Massachusetts.
<PAGE 45>
EXHIBIT C
PAGE 2 of 2
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
DESCRIPTION OF PROPERTIES - ITEM 2 OF FORM U-3A-2
DECEMBER 31, 1997
(3) In addition to the above generating stations, in order to provide
service to customers, each electric company maintains
substations, transmission and distribution lines. The gas
company maintains high and low pressure gas mains for
distribution of natural gas to customers. All of such property,
plant and equipment of each of the companies except as noted in
item (c) and (d) above is located within franchise areas located
in The Commonwealth of Massachusetts.
<PAGE 46>
EXHIBIT D
PAGE 1 of 2
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
SALES AND PURCHASES OF ELECTRICITY AND GAS - ITEM 3 OF FORM U-3A-2
FOR THE YEAR ENDED DECEMBER 31, 1997
Sales at Retail or Wholesale
Electricity Gas
(KWH) (MMBTU-1000 BTU)
Cambridge Electric Light Company 1,543,735,640
Canal Electric Company 4,757,859,176
Commonwealth Gas Company 43,320,385
Commonwealth Electric Company 4,701,053,864
Total 11,002,648,680 43,320,385
Elimination (detailed below) 2,289,563,164 22
Consolidated 8,713,085,516 43,320,363
Detail of Intercompany Sales
Commonwealth Electric Company Sales -
To: Canal Electric Company 13,257,500
Commonwealth Gas Company 1,133,377
14,390,877
Commonwealth Gas Company Sales -
To: Cambridge Electric Light Company 22
Canal Electric Company Sales -
To: Cambridge Electric Light Company 481,722,820
Commonwealth Electric Company 1,793,449,467
2,275,172,287
Total Elimination 2,289,563,164 22
Distributed at Retail Outside State
Electricity Gas
(KWH) (MMBTU-1000 BTU)
Cambridge Electric Light Company None None
Canal Electric Company None None
Commonwealth Gas Company None None
Commonwealth Electric Company None None
Sales at Wholesale Outside
State or at State Line
Electricity Gas
(KWH) (MMBTU-1000 BTU)
Cambridge Electric Light Company None None
Canal Electric Company None None
Commonwealth Gas Company None None
Commonwealth Electric Company None None
<PAGE 47>
EXHIBIT D
PAGE 2 of 2
COMMONWEALTH ENERGY SYSTEM AND SUBSIDIARY COMPANIES
SALES AND PURCHASES OF ELECTRICITY AND GAS - ITEM 3 OF FORM U-3A-2
FOR THE YEAR ENDED DECEMBER 31, 1997
Purchases Outside State
or at State Line
Electricity Gas
(KWH) (MMBTU-1000 BTU)
Cambridge Electric Light Company 96,005,234 None
Canal Electric Company 159,914,000 None
Commonwealth Gas Company None None
Commonwealth Electric Company None None
Total 255,919,234
Elimination -
Consolidated 255,919,234 (A)
(A) Excluding power interchanged in the New England Power Pool (Pool) of
(352,216,167) KWH. Power is supplied to the Pool by companies in the six-
state New England region. No determination is made as to the state of
origin of the power which is distributed.
<TABLE> <S> <C>
<ARTICLE> OPUR3
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheet and statement of income contained in Form U-3A-2 of Commonwealth
Energy System for the fiscal year ended December 31, 1997 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000071304
<NAME> COMMONWEALTH ENERGY SYSTEM
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 1,485,050
<TOTAL-OPERATING-REVENUES> 1,041,744
<NET-INCOME> 49,901
</TABLE>
