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: November 29, 1999
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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On November 29, 1999, Massachusetts Electric Company and New
England Power Company (NEP), subsidiaries of New England Electric
System (NEES), together with Eastern Edison Company and Montaup
Electric Company (Montaup), subsidiaries of Eastern Utilities
Associates (EUA)(together "the Companies"), announced that they
had reached agreement with the Massachusetts Attorney General, the
Massachusetts Division of Energy Resources, Associated Industries
of Massachusetts, and The Energy Consortium regarding rates that
will become effective after the completion of the proposed merger
of the Companies.
In April 1999, the Companies filed a proposed rate plan with
the Massachusetts Department of Telecommunications and Energy
(MDTE) as part of an overall request seeking MDTE approval of the
merger of Eastern Edison into Massachusetts Electric Company and
the merger of Montaup into NEP. The proposed rate agreement calls
for a total of $170 million in rate reductions for the customers of
Massachusetts Electric, Eastern Edison and Nantucket Electric
Company over the next five years. This rate agreement is subject
to MDTE approval and, if approved, would also constitute approval
of the Companies' mergers.
On the effective date of the rate agreement, distribution
rates for customers of the merged company will be reduced by $10
million annually, and frozen through February 28, 2005. From March
1, 2005 through December 31, 2009, the distribution rates will be
adjusted annually to follow, but remain at least 10% below, the
regional average distribution rates of similarly unbundled
investor-owned utilities in New England, New York, New Jersey, and
Pennsylvania. The effective date of the rate agreement occurs on
the later of, (i) 120 days after the NEES/EUA merger closes, (ii)
the first cycle of the billing month after the NEES/National Grid
Group plc merger closes, or (iii) April 1, 2000.
The proposed rate agreement also contains a comprehensive
service quality plan for the consolidated Massachusetts Electric
Company that implements a system of annual incentives and
penalties based on performance in the areas of reliability,
customer satisfaction, and safety. In 2009, the Massachusetts
Electric must perform an analysis to quantify savings resulting
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from cost-saving measures undertaken during the previous 10 years.
Savings generated from the mergers or other efficiency initiatives
will be shared between customers and investors over the subsequent
10 years. This earned savings mechanism is the sole means by which
costs associated with the NEES/EUA or NEES/National Grid mergers
may be recovered.
If the NEES/EUA merger closes by early 2000, as anticipated,
the rate agreement and its associated rate plan are expected to
become effective in the spring of 2000.
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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/ John G. Cochrane
By
John G. Cochrane
Treasurer
Date: December 3, 1999
