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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of the
Securities Exchange Act of 1934
Date of Earliest Event Reported: May 20, 1997
NEW ENGLAND POWER COMPANY
(exact name of registrant as specified in charter)
Massachusetts 1-6564 04-1663070
(state or other (Commission (I.R.S. Employer
jurisdiction of File No.) Identification No.)
incorporation)
25 Research Drive, Westborough, Massachusetts 01582
(Address of principal executive offices)
(508) 389-2000
(Registrant's telephone number, including area code)
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Item 5. Other Events
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Industry Restructuring Update
As previously reported, the Massachusetts settlement and the
Rhode Island statute and a related settlement covering customer
choice and electric utility restructuring provide for full
recovery of the costs of generating assets and oil and gas related
assets (including regulatory assets) not recoverable through the
divestiture of New England Power Company's (NEP) generating
business. NEP is a subsidiary of New England Electric System
(NEES). The Massachusetts Offer of Settlement was signed by
Massachusetts Electric Company (a retail subsidiary of NEES), NEP,
the Massachusetts Attorney General and the Massachusetts Division
of Energy Resources and was approved by the Massachusetts
Department of Public Utilities (MDPU) in February 1997. The Rhode
Island Offer of Settlement was signed by The Narragansett Electric
Company (a retail subsidiary of NEES), NEP, the Rhode Island
Public Utilities Commission (RIPUC) and the Rhode Island Division
of Public Utilities and Carriers. Federal Energy Regulatory
Commission (FERC) approval is also required for the Massachusetts
and Rhode Island stranded cost recovery. The Massachusetts and
Rhode Island Settlements were filed with the FERC at the end of May
1997. On July 11, 1997, a FERC administrative law judge certified
the Settlements to the full Commission. If accepted by the FERC,
the Settlements will complete the regulatory proceedings necessary
to implement retail access and recover stranded costs for the
companies in Massachusetts and Rhode Island.
On July 3 and 7, 1997, the Governor of Rhode Island signed
into law bills further implementing utility restructuring in Rhode
Island. The Securitization Act establishes a framework at the
RIPUC for utilities to seek approval to securitize stranded costs
through the issuance of transition bonds. The 1997 Amendments to
the Utility Restructuring Act bill changes the Act so that
utilities will not have to transfer their transmission assets to
another company and makes other technical amendments.
On May 20, 1997, the Utility Workers Union of America and the
Massachusetts Alliance of Utility Unions withdrew their appeal to
the Massachusetts Supreme Judicial Court of the MDPU approval of
the Massachusetts settlement.
Maine Yankee
NEP has a 20 percent equity ownership interest in Maine
Yankee Atomic Power Company (Maine Yankee) which owns an 880 MW
nuclear generating station. On May 27, 1997, the Maine Yankee
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owners announced that the economic viability of the station was
under review and the station would likely be permanently shutdown
unless a buyer can be found.
Town of Norwood Litigation
As previously reported, the Town of Norwood, Massachusetts
filed a lawsuit against NEP in United States District Court.
Norwood alleges that NEP's proposal to divest its power generation
assets violates the terms of a 1983 agreement with Norwood. On May
13, 1997, NEP filed a motion to dismiss the lawsuit based its
belief that Norwood's claims are within the FERC's exclusive
jurisdiction. On June 24, 1997, Norwood filed a motion for
summary judgment and in the alternative for a preliminary
injunction restraining the divestiture of NEP's generating
business. The court has delayed consideration of Norwood's motion
until after the court decides NEP's motion to dismiss.
Hydro-Quebec Arbitration
On July 11, 1996, various New England utilities which are
members of the New England Power Pool, including NEP, submitted a
dispute to arbitration regarding their Firm Energy Purchased Power
Contract with Hydro-Quebec. In June 1997, Hydro-Quebec presented
a damage claim of approximately $37 million for past damages. If
Hydro-Quebec were to prevail, NEP's share of such damages would be
approximately $6-9 million. The claims involve a dispute over the
components of a pricing formula and additional costs under the
contract. With respect to on-going claims, NEP has been paying
Hydro-Quebec the higher amount (additional costs of approximately
$3-4 million per year) since July 1996 under protest and subject
to refund. A decision by the arbitrator is expected in September
1997.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this Current Report on
Form 8-K to be signed on its behalf by the undersigned thereunto
duly authorized.
NEW ENGLAND POWER COMPANY
s/Michael E. Jesanis
By
Michael E. Jesanis
Treasurer
Date: July 14, 1997
