<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-1229
(LOGO) NEW ENGLAND POWER COMPANY
(Exact name of registrant as specified in charter)
MASSACHUSETTS 04-1663070
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
25 Research Drive, Westborough, Massachusetts 01582
(Address of principal executive offices)
Registrant's telephone number, including area code
(508-366-9011)
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 ( )
Common stock, par value $20 per share, authorized and outstanding:
6,449,896 shares at March 31, 1994.
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
- ----------------------------
<TABLE>
NEW ENGLAND POWER COMPANY
Statements of Income
Periods Ended March 31
(Unaudited)
<CAPTION>
Three Months Twelve Months
------------ -----------
1994 1993 1994 1993
---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C>
Operating revenue, principally from affiliates$399,574$395,065$1,553,523$1,529,685
-------- -------- --------------------
Operating expenses:
Fuel for generation 73,359 73,300 273,405 287,474
Purchased electric energy 120,838 125,924 520,898 515,098
Other operation 44,402 51,789 178,700 175,710
Maintenance 20,906 17,506 106,662 105,157
Depreciation and amortization 34,658 34,139 132,451 126,208
Taxes, other than income 15,356 14,365 52,922 51,898
Income taxes 33,182 26,463 100,716 83,270
-------- -------- --------------------
Total operating expenses 342,701 343,486 1,365,754 1,344,815
-------- -------- --------------------
Operating income 56,873 51,579 187,769 184,870
Other income:
Allowance for equity funds used during
construction 1,776 691 4,337 2,558
Equity in income of nuclear power companies1,287 1,585 5,348 6,108
Other income (expense) - net, including
related taxes (2,371) (1,343) (1,595) (298)
-------- -------- --------------------
Operating and other income 57,565 52,512 195,859 193,238
-------- -------- --------------------
Interest:
Interest on long-term debt 9,152 12,252 42,738 56,442
Other interest 39 521 4,945 1,781
Allowance for borrowed funds used during
construction - credit (815) (351) (2,390) (1,478)
-------- -------- --------------------
Total interest 8,376 12,422 45,293 56,745
-------- -------- --------------------
Net income $ 49,189 $ 40,090 $ 150,566$ 136,493
======== ======== ====================
Statements of Retained Earnings
Retained earnings at beginning of period$346,153 $321,699 $ 342,655$ 311,727
Net income 49,189 40,090 150,566 136,493
Dividends declared on cumulative
preferred stock (866) (1,398) (4,351) (5,591)
Dividends declared on common stock (24,187) (17,736) (117,711) (99,974)
Premium on redemption of preferred stock (870)
-------- -------- --------------------
Retained earnings at end of period $370,289 $342,655 $ 370,289 $ 342,655
======== ======== ====================
The accompanying notes are an integral part of these financial statements.
Per share data is not relevant because the Company's common stock is wholly
owned by New England Electric System.
</TABLE>
<PAGE>
<TABLE>
NEW ENGLAND POWER COMPANY
Balance Sheets
(Unaudited)
<CAPTION>
March 31, December 31,
ASSETS 1994 1993
------ ---- ----
(In Thousands)
<S> <C> <C>
Utility plant, at original cost $2,461,163 $2,445,702
Less accumulated provisions for depreciation
and amortization 961,730 943,750
---------- ----------
1,499,433 1,501,952
Net investment in Seabrook 1 under rate settlement 87,726 103,344
Construction work in progress 214,745 165,860
---------- ----------
Net utility plant 1,801,904 1,771,156
---------- ----------
Investments:
Nuclear power companies, at equity 46,559 46,342
Nonutility property and other investments, at cost 19,932 19,927
---------- ----------
Total investments 66,491 66,269
---------- ----------
Current assets:
Cash 2,215 610
Accounts receivable, principally from sales of
electric energy:
Affiliated companies 181,828 201,674
Others 53,971 58,581
Fuel, materials and supplies, at average cost 67,933 55,955
Prepaid and other current assets 25,276 26,454
---------- ----------
Total current assets 331,223 343,274
---------- ----------
Accrued Yankee Atomic costs 96,284 103,501
Deferred charges and other assets 159,999 157,087
---------- ----------
$2,455,901 $2,441,287
========== ==========
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock, par value $20 per share,
authorized and outstanding 6,449,896 shares $ 128,998 $ 128,998
Premiums on capital stocks 86,829 86,829
Other paid-in capital 288,000 288,000
Retained earnings 370,289 346,153
---------- ----------
Total common equity 874,116 849,980
Cumulative preferred stock, par value $100 per share 61,028 61,028
Long-term debt 667,492 667,448
---------- ----------
Total capitalization 1,602,636 1,578,456
---------- ----------
Current liabilities:
Short-term debt (including $5,975,000 and $8,325,000
to affiliates 21,875 50,525
Accounts payable (including $55,945,000 and $58,056,000
to affiliates) 153,179 144,100
Accrued liabilities:
Taxes 18,435 9,337
Interest 8,573 10,086
Other accrued expenses 36,198 38,313
Dividends payable 24,187 14,512
---------- ----------
Total current liabilities 262,447 266,873
---------- ----------
Deferred federal and state income taxes 346,085 344,077
Unamortized investment tax credits 62,124 62,591
Accrued Yankee Atomic costs 96,284 103,501
Other reserves and deferred credits 86,325 85,789
---------- ----------
$2,455,901 $2,441,287
========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
NEW ENGLAND POWER COMPANY
Statements of Cash Flows
Quarters Ended March 31
(Unaudited)
<CAPTION>
1994 1993
---- ----
(In Thousands)
<S> <C> <C>
Operating activities:
Net income $ 49,189 $ 40,090
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 35,803 35,514
Deferred income taxes and investment tax credits - net4,090 (414)
Allowance for funds used during construction (2,591) (1,042)
Early retirement program 2,967
Decrease (increase) in accounts receivable 24,456 38,395
Decrease (increase) in fuel, materials and supplies(11,978) 7,292
Increase (decrease) in accounts payable 9,079 (28,358)
Increase (decrease) in other current liabilities 5,470 32,508
Other, net (5,568) (3,521)
-------- --------
Net cash provided by operating activities $107,950 $123,431
-------- --------
Investing activities:
Plant expenditures, excluding allowance
for funds used during construction $(62,317) $(29,423)
-------- --------
Net cash used in investing activities $(62,317) $(29,423)
-------- --------
Financing activities:
Dividends paid on common stock $(14,512) $(24,186)
Dividends paid on preferred stock (866) (1,398)
Long-term debt - issues 102,000
Long-term debt - retirements (101,000)
Premium on reacquisition of long-term debt (841)
Changes in short-term debt (28,650) (18,325)
-------- --------
Net cash used in financing activities $(44,028) $(43,750)
-------- --------
Net increase in cash and cash equivalents $ 1,605 $ 50,258
Cash and cash equivalents at beginning of period 610 652
-------- --------
Cash and cash equivalents at end of period $ 2,215 $ 50,910
======== ========
Supplementary information:
Interest paid less amounts capitalized $ 9,068 $ 10,260
-------- --------
Federal and state income taxes paid $ 21,881 $ 7,888
-------- --------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Note A - Investments in Nuclear Power Companies
- -----------------------------------------------
A summary of combined results of operations, assets and
liabilities of the four Yankee Nuclear Power Companies in which the
Company has investments is as follows:
Quarters Ended
March 31,
-------------------
1994 1993
---- ----
(In Thousands)
Operating revenue $150,649 $155,045
======== ========
Net income $ 7,922 $ 8,302
======== ========
Company's equity in net income $ 1,287 $ 1,585
======== ========
March 31, December 31,
1994 1993
---- ----
(In Thousands)
Plant $ 566,836 $ 591,650
Other assets 1,304,715 1,286,923
Liabilities and debt (1,624,643) (1,633,139)
----------- -----------
Net assets $ 246,908 $ 245,434
=========== ===========
Company's equity in net assets $ 46,559 $ 46,342
=========== ===========
At March 31, 1994, $12,615,000 of undistributed earnings of the
nuclear power companies were included in the Company's retained
earnings. Yankee Atomic Electric Company plans to retain its
earnings until all of its current debt commitments are satisfied.
Note B - Hazardous Waste
- ------------------------
The Federal Comprehensive Environmental Response, Compensation
and Liability Act, more commonly known as the "Superfund" law,
imposes strict, joint and several liability, regardless of fault,
<PAGE>
Note B - Continued
- ------
for remediation of property contaminated with hazardous substances.
Parties liable include past and present site owners and operators,
transporters that brought wastes to the site, and entities that
generated or arranged for disposal or treatment of wastes
ultimately disposed of at the site. A number of states, including
Massachusetts, have enacted similar laws.
The electric utility industry typically utilizes and/or
generates in its operations a range of potentially hazardous
products and by-products. These products or by-products may not
have previously been considered hazardous, and may not currently be
considered hazardous, but may be identified as such by federal,
state, or local authorities in the future. The New England
Electric System subsidiaries currently have in place an
environmental audit program intended to enhance compliance with
existing federal, state, and local requirements regarding the
handling of potentially hazardous products and by-products.
Federal and state environmental agencies, as well as private
parties, have contacted or initiated legal proceedings against the
Company regarding liability for cleanup of sites alleged to contain
hazardous waste or substances. The Company has been named as a
potentially responsible party (PRP) by either the U.S.
Environmental Protection Agency or the Massachusetts Department of
Environmental Protection at six sites at which hazardous waste is
alleged to have been disposed. The Company is also aware of other
sites for which it may be held responsible for remediating and it
is likely that, in the future, the Company will become involved in
additional proceedings demanding contribution for the cost of
remediating additional hazardous waste sites.
Predicting the potential costs to investigate and remediate
hazardous waste sites continues to be difficult. Factors such as
the evolving nature of remediation technology and regulatory
requirements and the particular characteristics of each site,
including, for example the size of the site, the nature and amount
of waste disposed at the site, and the surrounding geography and
land use, make precise estimates difficult. There are also
significant uncertainties as to the portion, if any, of the
investigation and remediation costs of any particular hazardous
waste site that may ultimately be borne by the Company. Although
rate recovery may be sought for cleanup costs incurred, it is
uncertain what portion, if any, would be allowed in rates.
<PAGE>
Note B - Continued
- ------
The Company believes that hazardous waste liabilities for all
sites of which it is aware will not be material (ten percent of
common equity) to its financial position. Where appropriate, the
Company intends to seek recovery from its insurers and from other
PRPs, but it is uncertain whether, and to what extent, such efforts
would be successful.
Note C
- ------
In the opinion of the Company, these statements reflect all
adjustments (which include normal recurring adjustments) necessary
for a fair statement of the results of its operations for the
periods presented and should be considered in conjunction with the
notes to the financial statements in the Company's 1993 Annual
Report.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
---------------------------------------------------------
Condition and Results of Operations
-----------------------------------
Earnings
- --------
Net income for the first quarter of 1994 increased $9 million
from the corresponding period in 1993. Earnings in the first
quarter of 1993 included a one-time after-tax charge of $6 million
($10 million before tax) associated with an early retirement offer
and special severance program for non-union employees undertaken by
the Company as part of an organizational review. Excluding the
effects of this 1993 charge, 1994 first quarter earnings increased
$3 million. This increase is primarily due to increased revenues
attributable to increased peak demands and decreased interest costs
attributable to 1993 debt refinancings, partially offset by
increased operation and maintenance costs.
Rate Activity
- -------------
The Federal Energy Regulatory Commission (FERC) has allowed the
Company to defer increased costs associated with a new accounting
standard for postretirement benefits other than pensions (PBOPs)
effective with its next rate filing. New accounting rules
established by the Financial Accounting Standards Board, which
became effective in 1993, require employers to establish a
liability during the working years of employees for the expected
<PAGE>
cost of providing PBOPs instead of recording such costs when paid.
In a statement of policy applicable to all utilities subject to its
rate-making jurisdiction, the FERC stated that the increased costs
resulting from these new rules could be deferred pending the next
rate filing so long as such filing occurs before the end of 1995.
Accordingly, the Company has deferred a total of approximately $13
million of increased PBOP costs since January 1, 1993.
Operating Revenue
- -----------------
The following table summarizes the changes in operating revenue
during the first quarter of 1994 compared to the corresponding
periods in 1993:
Increase (Decrease) in Operating Revenue
First Quarter
-------------
1994 vs 1993
------------
(In Millions)
Fuel recovery $(4)
Sales increase and other 8
---
$ 4
===
The increase in sales reflects a 3.9 percent increase in peak
demands due to colder weather conditions in the first quarter of
1994 compared to the same period last year.
<PAGE>
Operating Expenses
- ------------------
The following table summarizes the changes in operating
expenses:
Increase (Decrease) in Total Operating Expenses
First Quarter
-------------
1994 vs 1993
------------
(In Millions)
Fuel costs $(4)
Purchased energy excluding fuel (1)
Other operation and maintenance (4)
Taxes 8
---
$(1)
===
Total fuel costs represents fuel for generation and the
portion of purchased electric energy permitted to be recovered
through the Company's fuel adjustment clause. Purchased energy
excluding fuel represents the remainder of purchased electric
energy costs. The decrease in other operation and maintenance
expense reflects the one-time costs amounting to $10 million
associated with an early retirement offer and special severance
program recorded in the first quarter of 1993, partially offset
by increased generating plant maintenance costs, increased
computer system development costs, and general increases in
other areas.
<PAGE>
The increase in taxes is primarily due to increased income
and the effects of the increase in the Federal corporate income
tax rate from 34 percent to 35 percent which went into effect in
the third quarter of 1993 retroactive to January 1, 1993.
Interest Expense
- ----------------
The decrease in interest expense is primarily due to
significant refinancings of corporate debt at lower interest
rates during 1993.
Hazardous Waste
- ---------------
The Federal Comprehensive Environmental Response,
Compensation and Liability Act, more commonly known as the
"Superfund" law, imposes strict, joint and several liability,
regardless of fault, for remediation of property contaminated
with hazardous substances. Parties liable include past and
present site owners and operators, transporters that brought
wastes to the site, and entities that generated or arranged for
disposal or treatment of wastes ultimately disposed of at the
site. A number of states, including Massachusetts, have enacted
similar laws.
The electric utility industry typically utilizes and/or
generates in its operations a range of potentially hazardous
<PAGE>
products and by-products. These products or by-products may not
have previously been considered hazardous, and may not currently
be considered hazardous, but may be identified as such by
federal, state, or local authorities in the future. The New
England Electric System subsidiaries (NEES) currently have in
place an environmental audit program intended to enhance
compliance with existing federal, state, and local requirements
regarding the handling of potentially hazardous products and by-
products.
Federal and state environmental agencies, as well as private
parties, have contacted or initiated legal proceedings against
the Company regarding liability for cleanup of sites alleged to
contain hazardous waste or substances. The Company has been
named as a potentially responsible party (PRP) by either the
U.S. Environmental Protection Agency (EPA) or the Massachusetts
Department of Environmental Protection at six sites at which
hazardous waste is alleged to have been disposed. The Company
is also aware of other sites for which it may be held
responsible for remediating and it is likely that, in the
future, the Company will become involved in additional
proceedings demanding contribution for the cost of remediating
additional hazardous waste sites.
Predicting the potential costs to investigate and remediate
hazardous waste sites continues to be difficult. Factors such
<PAGE>
as the evolving nature of remediation technology and regulatory
requirements and the particular characteristics of each site,
including, for example the size of the site, the nature and
amount of waste disposed at the site, and the surrounding
geography and land use, make precise estimates difficult. There
are also significant uncertainties as to the portion, if any, of
the investigation and remediation costs of any particular
hazardous waste site that may ultimately be borne by the
Company. Although rate recovery may be sought for cleanup costs
incurred, it is uncertain what portion, if any, would be allowed
in rates.
The Company believes that hazardous waste liabilities for
all sites of which it is aware will not be material (ten percent
of common equity) to its financial position. Where appropriate,
the Company intends to seek recovery from its insurers and from
other PRPs, but it is uncertain whether, and to what extent,
such efforts would be successful.
Electric and Magnetic Fields (EMF)
- ---------------------------------
In recent years, concerns have been raised about whether
EMF, which occur near transmission and distribution lines as
well as near household wiring and appliances, cause or
contribute to adverse health effects. Numerous studies on the
effects of these fields, some of them sponsored by electric
<PAGE>
utilities (including NEES companies), have been conducted and
are continuing. Some of the studies have suggested associations
between certain EMF and various types of cancer, while other
studies have not substantiated such associations. In February
1993, the EPA called for significant additional research on EMF.
It is impossible to predict the ultimate impact on the Company
and the electric utility industry if further investigations were
to demonstrate that the present electricity delivery system is
contributing to increased risk of cancer or other health
problems.
Several state courts have recognized a cause of action for
damage to property values in transmission line condemnation
cases based on the fear that power lines cause cancer. It is
difficult to predict what impact there would be on the Company
if this cause of action is recognized in the states in which the
Company operates and in contexts other than condemnation cases.
Clean Air Requirements
- ----------------------
The Company produces approximately 50 percent of its
electricity at eight older thermal generating units located in
Massachusetts. The 1990 amendments to the federal Clean Air Act
require a significant reduction in the nation's sulfur dioxide
(SO2) and nitrogen oxide (NOx) emissions by the year 2000.
Under the amendments, the Company is not subject to Phase 1 of
<PAGE>
the acid rain provisions of the federal law that will become
effective in 1995. However, the Company is subject to the
Massachusetts SO2 acid rain law that will become effective in
1995. Phase 2 of the federal acid rain requirements, effective
in 2000, will apply to the Company and its units.
Under the federal Clean Air Act, state environmental
agencies in ozone non-attainment areas were required to develop
regulations (also known as Reasonably Available Control
Technology requirements, or RACT) that will become effective in
1995 to address the first phase of ozone air quality attainment.
These regulations were adopted in Massachusetts in September
1993. The RACT regulations require control technologies (such
as low NOx burners) to reduce NOx emissions, an ozone precursor.
Additional control measures may be necessary to ensure
attainment of the ozone standard. These measures would have to
be developed by the states in 1994 and fully implemented no
later than 1999. The extent of these additional control
measures is unknown at this time, but could range from minor
additions to the RACT requirements to extensive emission
reduction requirements, such as costly add-on controls or fuel
switching. Should the 1999 ozone attainment requirements be
extensive or additional Clean Air Act or other environmental
requirements be imposed, continued operation of certain existing
generating units beyond 1999 could be uneconomical. The Company
<PAGE>
believes that premature retirement of substantially all of its
older thermal generating units would cause substantial rate
increases.
To date, the Company has expended $8 million of one-time
operation and maintenance costs and $55 million of capital costs
in connection with Massachusetts and federal Clean Air Act
compliance requirements. The Company expects to incur
additional one-time operation and maintenance costs of
approximately $17 million and capital costs of approximately $60
million in 1994 and 1995 to comply with the federal and state
clean air requirements that will become effective in 1995. In
addition, as a result of federal and state clean air
requirements, the Company will begin incurring increased fuel
costs which are estimated to reach an annual level of $13
million by 1995.
The generation of electricity from fossil fuels may emit
trace amounts of hazardous air pollutants as defined in the
Clean Air Act Amendments of 1990. The Act mandates a study of
the potential dangers of hazardous air pollutant emissions from
electric utility plants. Such research is currently under way
and is expected to be complete in 1995. The study conclusions
could result in new emission standards and the need for
additional costly controls on the Company's plants. At this
time, the Company cannot estimate the impact that findings of
this research might have on operations.
<PAGE>
Competitive Conditions
- ----------------------
The electric utility business is being subjected to
increasing competitive pressures, stemming from a combination of
increasing electric rates, improved technologies, and new
regulations and legislation intended to foster competition.
Recently, this competition has been most prominent in the bulk
power market in which non-utility generating sources have
noticeably increased their market share. For example, in 1984,
less than one percent of the Company's capacity was supplied by
non-utility generation sources. By the end of 1993, non-utility
power purchases accounted for 380 MW or seven percent of the
Company's total capacity. In addition to competition from non-
utility generators, the presence of excess generating capacity
in New England has resulted in the sale of bulk power by
utilities at prices less than the total costs of owning and
operating such generating capacity.
Since over 95 percent of the Company's sales are to its
retail affiliates, the Company is affected by increased
competition that these affiliates are facing in the retail
market. Currently, competition to these retail affiliates comes
from primarily alternative fuel suppliers (principally natural
gas companies) for heating and cooling, customer-owned
generation to displace purchases from electric utilities, and
direct competition among electric utilities to attract major new
<PAGE>
manufacturing facilities to their service territories. In the
future, the potential exists for electric utilities and non-
utility generators to sell electricity to retail customers of
other electric utilities. For example, the California Public
Utilities Commission recently announced a proposal that would
give certain large retail customers in that state, by the year
1996, and all other retail customers by the year 2002, the
option of selecting their electricity provider. Power purchased
from another provider would still be delivered over the local
utility's transmission network which, under the proposal, would
be subject to broader access. Other states, including
Massachusetts and Rhode Island have considered or are in the
process of considering options to foster increased competition.
The NEES companies are responding to current and anticipated
competitive pressures in a variety of ways including cost
control and a corporate reorganization into separate wholesale
and retail business units. The wholesale business unit, which
includes the Company, is positioning itself for increased
competition through such means as terminating certain purchased
power contracts, past and future shutdowns of uneconomic
generating stations, and rapid amortization of certain plant
assets. The Company's rates currently include approximately
$100 million per year associated with the recovery of Seabrook
1 costs under a 1988 rate settlement and coal conversion
<PAGE>
expenditures at the Company's Salem Harbor station. The
recovery of these costs will be completed prior to the end of
1995. The retail business unit's response to competition
includes the development of value-added service for customers
and the offering of economic development rates to encourage
businesses to locate in the retail affiliates' service
territories.
Electric utility rates are generally based on a utility's
costs. Therefore, electric utilities are subject to certain
accounting standards that are not applicable to other business
enterprises in general. These accounting rules allow regulated
entities, in appropriate circumstances, to establish regulatory
assets and to defer the income statement impact of certain costs
that are expected to be recovered in future rates. The effects
of competition could ultimately cause the operations of the
Company, or a portion thereof, to cease meeting the criteria for
application of these accounting rules. While the Company does
not expect to cease meeting these criteria in the near future,
if this were to occur, accounting standards of enterprises in
general would apply and immediate recognition of any previously
deferred costs would be necessary in the year in which these
criteria were no longer applicable.
<PAGE>
Utility Plant Expenditures and Financing
- ----------------------------------------
Cash expenditures for utility plant totaled $62 million for
the first quarter of 1994 including $45 million related to the
Manchester Street Station Repowering Project. The funds
necessary for utility plant expenditures during the period were
provided by net cash from operating activities, after the
payment of dividends. The Company plans to issue $50 million of
long-term debt in 1994.
The Company's major construction project is the repowering
of Manchester Street Station, a 140 MW electric generating
station in Providence, Rhode Island which is jointly owned by
the Company (90 percent interest) and The Narragansett Electric
Company (Narragansett) (10 percent interest). Repowering will
more than triple the power generation capacity of Manchester
Street Station and substantially increase the plant's thermal
efficiency. The total cost for the generating station,
scheduled for completion in late 1995, is estimated to be
approximately $525 million, including allowance for funds used
during construction (AFDC). In addition, related transmission
work, which is principally the responsibility of Narragansett,
is estimated to cost approximately $75 million and is scheduled
for completion in late 1994. At March 31, 1994, $217 million,
including AFDC, had been spent on the project ($176 million by
the Company). Substantial commitments have been made relative
<PAGE>
to future planned expenditures for this project.
At March 31, 1994, the Company had $22 million of short-term
debt outstanding including $16 million in the form of commercial
paper borrowings. The Company currently has lines of credit
with banks totaling $315 million which are available to provide
liquidity support for commercial paper borrowings and for $252
million of the Company's outstanding variable rate mortgage
bonds in commercial paper mode and for other corporate purposes.
There were no borrowings under these lines of credit at March
31, 1994.
For the twelve-month period ending March 31, 1994, the ratio
of earnings to fixed charges was 6.27.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
The Company is filing the following revised exhibit for
incorporation by reference into its registration statements on
Form S-3, Commission file Nos. 33-48257, 33-48897, and 33-49193:
12 Statement re computation of ratios
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report on Form 10-Q
for the quarter ended March 31, 1994 to be signed on its behalf
by the undersigned thereunto duly authorized.
NEW ENGLAND POWER COMPANY
s/ Michael E. Jesanis
Michael E. Jesanis, Treasurer,
Authorized Officer, and
Principal Financial Officer
Date: May 11, 1994
EXHIBIT INDEX
<PAGE>
EXHIBIT INDEX
=============
EXHIBIT NUMBER DESCRIPTION PAGE
- -------------- ----------- ----
12 Statement re Computation Filed Herewith
of Ratios
EXHIBIT 12
<PAGE>
<TABLE>
NEW ENGLAND POWER COMPANY
Computation of Ratio of Earnings to Fixed Charges
(SEC Coverage)
<CAPTION>
12 Months
Ended
March 31, 1994 Years Ended December 31,
Actual --------------------------------------------------------------
(Unaudited) 1993 1992 1991 1990 1989
-------------- ---- ---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Net Income $150,566 $141,468 $134,151 $134,747 $222,219 $124,617
- ----------
Less undistributed income of
nuclear power companies 570 544 320 (240) (133) 715
-------- -------- -------- -------- -------- --------
149,996 140,924 133,831 134,987 222,352 123,902
Add income taxes and fixed charges
- ----------------------------------
Current federal income taxes 64,220 62,454 64,417 62,182 50,543 42,885
Deferred federal income taxes 21,793 17,745 4,741 11,134 38,367 7,841
Investment tax credits - net (2,445) (2,606) (1,328) (7,732) (26,026) 950
State income taxes 17,955 17,242 14,596 15,526 21,867 14,002
Interest on long-term debt 42,738 45,837 59,382 67,426 67,385 66,654
Interest on short-term debt and other4,945 5,427 2,071 2,490 6,900 7,730
-------- -------- -------- -------- -------- --------
Net earnings available
for fixed charges $299,202 $287,023 $277,710 $286,013 $381,388 $263,964
======== ======== ======== ======== ======== ========
Fixed charges:
Interest on long-term debt $ 42,738 $ 45,837 $ 59,382 $ 67,426 $ 67,385 $ 66,654
Interest on short-term debt 1,300 3,039
Other interest 4,945 5,427 2,071 2,490 5,600 4,691
-------- -------- -------- -------- -------- --------
Total fixed charges $ 47,683 $ 51,264 $ 61,453 $ 69,916 $ 74,285 $ 74,384
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges 6.27 5.60 4.52 4.09 5.13 3.55
- ----------------------------------
</TABLE>
