<PAGE>
FORM U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980
ANNUAL REPORT
For the Period
Beginning January 1, 1996 and Ending December 31, 1996
To The
U.S. SECURITIES AND EXCHANGE COMMISSION
Of
NEW ENGLAND POWER SERVICE COMPANY
A Subsidiary Service Company
Date of Incorporation: September 5, 1935
State or Sovereign Power under which Incorporated or Organized:
The Commonwealth of Massachusetts
Location of Principal Executive Offices of Reporting Company:
25 Research Drive
Westborough, MA 01582
Name, title, and address of officer to whom correspondence concerning this
report should be addressed:
H. W. McDowell, Controller
25 Research Drive
Westborough, MA 01582
Name of Principal Holding Company Whose Subsidiaries are served by
Reporting Company:
New England Electric System
SEC 1926 (6-82)
<PAGE>
Page 2
INSTRUCTIONS FOR USE OF FORM U-13-60
1. Time of Filing Rule 94 provides that on or before the first day of
May in each calendar year, each mutual service company and each subsidiary
service company as to which the Commission shall have made a favorable
finding pursuant to Rule 88, and every service company whose application
for approval or declaration pursuant to Rule 88 is pending shall file with
the Commission an annual report on Form U-13-60 and in accordance with the
Instructions for that form.
2. Number of Copies Each annual report shall be filed in duplicate.
The company should prepare and retain at least one extra copy for itself in
case correspondence with reference to the report become necessary.
3. Period Covered by Report The first report filed by any company
shall cover the period from the date the Uniform System of Accounts was
required to be made effective as to that company under Rules 82 and 93 to
the end of that calendar year. Subsequent reports should cover a calendar
year.
4. Report Format Reports shall be submitted on the forms prepared by
the Commission. If the space provided on any sheet of such form is
inadequate, additional sheets may be inserted of the same size as a sheet
of the form or folded to such size.
5. Money Amounts Displayed All money amounts required to be shown in
financial statements may be expressed in whole dollars, in thousands of
dollars or in hundred thousands of dollars, as appropriate and subject to
provisions of Regulation S-X (Section 210.3-01(b)).
6. Deficits Displayed Deficits and other like entries shall be
indicated by the use of either brackets or a parenthesis with corresponding
reference in footnotes. (Regulation S-X, Section 210.3-01(c))
7. Major Amendments or Corrections Any company desiring to amend or
correct a major omission or error in a report after it has been filed with
the Commission shall submit an amended report including only those pages,
schedules, and entries that are to be amended or corrected. A cover letter
shall be submitted requesting the Commission to incorporate the amended
report changes and shall be signed by a duly authorized officer of the
company.
8. Definitions Definitions contained in Instruction 01-8 to the
Uniform System of Accounts for Mutual Service Companies and Subsidiary
Service Companies, Public Utility Holding Company Act of 1935, as amended
February 2, 1979 shall be applicable to words or terms used specifically
within this Form U-13-60.
9. Organization Chart The service company shall submit with each
annual report a copy of its current organization chart.
10. Methods of Allocation The service company shall submit with each
annual report a listing of the currently effective methods of allocation
being used by the service company and on file with the Securities and
Exchange Commission pursuant to the Public Utility Holding Company Act of
1935.
11. Annual Statement of Compensation for Use of Capital Billed The
service company shall submit with each annual report a copy of the annual
statement supplied to each associate company in support of the amount of
compensation for use of capital billed during the calendar year.
<PAGE>
Page 3
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS
Schedule or Page
Description of Schedules and Accounts Account No. Number
COMPARATIVE BALANCE SHEET Schedule I 4-5
Service company property Schedule II 6-7
Accumulated provision for depreciation
and amortization of service company
property Schedule III 8
Investments Schedule IV 9
Accounts receivable from associate
companies Schedule V 10
Fuel stock expenses undistributed Schedule VI 11
Stores expense undistributed Schedule VII 12
Miscellaneous current and accrued assets Schedule VIII 13
Miscellaneous deferred debits Schedule IX 14
Research, development, or demonstration
expenditures Schedule X 15
Proprietary capital Schedule XI 16
Long-term debt Schedule XII 17
Current and accrued liabilities Schedule XIII 18
Notes to financial statements Schedule XIV 19
COMPARATIVE INCOME STATEMENT Schedule XV 20
Analysis of billing - associate
companies Account 457 21
Analysis of billing - nonassociate
companies Account 458 22
Analysis of charges for service
- associate and nonassociate companies Schedule XVI 23
Schedule of expense by department or
service function Schedule XVII 24-26
Departmental analysis of salaries Account 920 27
Outside services employed Account 923 28-29
Employee pensions and benefits Account 926 30
General advertising expenses Account 930.1 31
Miscellaneous general expenses Account 930.2 32
Rents Account 931 33
Taxes other than income taxes Account 408 34
Donations Account 426.1 35
Other deductions Account 426.5 36
Notes to statement of income Schedule XVIII 37
LISTING OF INSTRUCTIONAL FILING REQUIREMENTS
Page
Description of Reports or Statements Number
ORGANIZATION CHART 38
METHODS OF ALLOCATION 39
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED 40
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
<PAGE>
Page 4
<TABLE>
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE I
COMPARATIVE BALANCE SHEET
Give balance sheet of Company as of December 31 of the current and prior year
<CAPTION>
Account Assets and Other Debits As of December 31
Current Prior
<S> <C> <C> <C>
SERVICE COMPANY PROPERTY
101 Service company property (Schedule II) $11,157 $18,175
107 Construction work in progress (Schedule II)
-------- --------
Total Property 11,157 18,175
-------- --------
108 Less accumulated provision for depreciation
and amortization of service
company property (Schedule III) 138 138
-------- --------
Net Service Company Property 11,019 18,037
-------- --------
INVESTMENTS
123 Investments in associate companies (Schedule IV)
124 &
128 Other Investments (Schedule IV) 49,887 45,215
-------- --------
Total Investments 49,887 45,215
-------- --------
CURRENT AND ACCRUED ASSETS
131 Cash 12
134 Special deposits 121 121
135 Working funds 76 72
136 Temporary cash investments (Schedule IV) 9,225 1,100
141 Notes receivable from associate companies
(Money Pool)
143 Accounts receivable 198 2,842
144 Accumulated provision of uncollectible accounts
146 Accounts receivable from associate companies
(Schedule V) 4,924 11,308
152 Fuel stock expenses undistributed (Schedule VI)
154 Materials and supplies 23 3
163 Stores expense undistributed (Schedule VII)
165 Prepayments 9,839 10,489
174 Miscellaneous current and accrued assets
(Schedule VIII)
------- -------
Total Current and Accrued Assets 24,406 25,947
------- -------
DEFERRED DEBITS
181 Unamortized debt expense
184 Clearing accounts
186 Miscellaneous deferred debits (Schedule IX) 819 3,033
188 Research, development, or demonstration
expenditures (Schedule X)
190 Accumulated deferred income taxes 10,159 5,496
------- -------
Total Deferred Debits 10,978 8,529
------- -------
TOTAL ASSETS AND OTHER DEBITS $96,290 $97,728
======= =======
</TABLE>
<PAGE>
Page 5
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE I
COMPARATIVE BALANCE SHEET
<CAPTION>
Account Liabilities and Proprietary Capital As of December 31
Current Prior
<S> <C> <C> <C>
PROPRIETARY CAPITAL
201 Common stock issued (Schedule XI)
211 Miscellaneous paid-in-capital (Schedule XI) $16,350 $16,350
215 Appropriated retained earnings (Schedule XI)
216 Unappropriated retained earnings (Schedule XI) 1,839 165
------- -------
Total Proprietary Capital 18,189 16,515
------- -------
LONG-TERM DEBT
223 Advances from associate companies (Schedule XII)
224 Other long-term debt (Schedule XII)
225 Unamortized premium on long-term debt
226 Unamortized discount on long-term debt - debit
------- -------
Total Long-Term Debt
------- -------
CURRENT AND ACCRUED LIABILITIES
231 Notes payable
232 Accounts payable 8,290 10,215
233 Notes payable to associate companies
(Schedule XIII)
234 Accounts payable to associate companies
(Schedule XIII) 421 148
236 Taxes accrued 2,561 524
237 Interest accrued 19
238 Dividends declared
241 Tax collections payable 190 1,272
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 13,558 13,784
------- --------
Total Current and Accrued Liabilities 25,020 25,962
------- --------
DEFERRED CREDITS
253 Other deferred credits 53,081 55,251
255 Accumulated deferred investment tax credits
------- --------
Total Deferred Credits 53,081 55,251
------- --------
282 ACCUMULATED DEFERRED INCOME TAXES
------- --------
TOTAL LIABILITIES AND PROPRIETARY CAPITAL $96,290 $97,728
======= ========
</TABLE>
<PAGE>
Page 6
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE II
SERVICE COMPANY PROPERTY
<CAPTION>
BALANCE AT RETIREMENTS BALANCE
BEGINNING OR OTHER (1) AT CLOSE
DESCRIPTION OF YEAR ADDITIONS SALES CHANGES OF YEAR
<S> <C> <C> <C> <C> <C>
Account
301 Organization
303 Miscellaneous
Intangible
Plant
304 Land and Land
Rights
305 Structures and
Improvements
306 Leasehold
Improvements
307 Equipment (2) $18,134 $(7,018) $11,116
308 Office
Furniture and
Equipment 37 37
309 Automobiles,
Other Vehicles
and Related
Garage
Equipment 4 4
310 Aircraft and
Airport
Equipment
311 Other Service
Company
Property (3)
-------- -------- ---- ----- --------
SUB-TOTAL 18,175 (7,018) 11,157
-------- -------- ---- ----- --------
107 Construction
Work in
Progress (4)
--------- -------- ---- ----- --------
TOTAL $18,175 $(7,018) $11,157
========= ======== ==== ===== ========
</TABLE>
<PAGE>
Page 7
(1) PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE II - CONTINUED
(2) Subaccounts are required for each class of equipment owned. The service
company shall provide a listing by subaccount of equipment additions
during the year and the balance at the close of the year:
BALANCE
AT CLOSE
SUBACCOUNT DESCRIPTION ADDITIONS OF YEAR
Engineering Tools and Equipment None $ 11
Relay, Laboratory Testing Equipment None 25
Construction Equipment None 61
Capitalized lease for computer
information system $ (7,018) (A) $11,019
-------- -------
TOTAL $ (7,018) $11,116
======== =======
(3) DESCRIBE OTHER SERVICE COMPANY PROPERTY:
None
(4) DESCRIBE CONSTRUCTION WORK IN PROGRESS:
None
(A) Reflects amortization of capital lease.
<PAGE>
Page 8
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY
<CAPTION>
ADDITIONS OTHER
BALANCE AT CHARGED CHANGES BALANCE
BEGINNING TO RETIRE- ADD AT CLOSE
DESCRIPTION OF YEAR ACCT 403 MENTS (DEDUCT)(1) OF YEAR
<S> <C> <C> <C> <C> <C>
Account
301 Organization
303 Miscellaneous
Intangible
Plant
304 Land and Land
Rights
305 Structures and
Improvements
306 Leasehold
Improvements
307 Equipment $ 97 $ 97
308 Office
Furniture and
Equipment 37 37
309 Automobiles,
Other Vehicles
and Related
Garage
Equipment 4 4
310 Aircraft and
Airport
Equipment
311 Other Service
Company
Property
--- --- --- --- ---
TOTAL $138 $138
=== === === === ===
22) PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
None
/TABLE
<PAGE>
Page 9
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE IV
INVESTMENTS
INSTRUCTIONS: Complete the following schedule concerning investments.
Under Account 124 "Other Investments," state each investment
separately, with description, including, the name of issuing
company, number of shares or principal amount, etc.
Under Account 136, "Temporary Cash Investments," list each
investment separately.
<CAPTION>
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
<S> <C> <C>
ACCOUNT 123 - INVESTMENT IN ASSOCIATE COMPANIES None None
------ ------
TOTAL None None
===== =====
ACCOUNT 124 & 128 - OTHER INVESTMENTS
Supplemental Retirement/Deferred
Compensation Plan Trust Fund $37,784 $40,505
General American Life Insurance Company -
Net Cash Surrender Value 3,853 4,355
Confederation Life Insurance Company -
Net Cash Surrender Value 2,073 2,520
Aurora National Life Insurance Company -
Net Cash Surrender Value 1,344 1,977
Metropolitan Life Insurance Company -
Net Cash Surrender Value 190 568
Pacific Mutual Life Insurance Company -
Deferred Compensation - Life Insurance
Investments & Net Cash Surrender Value (29) (38)
------- -------
TOTAL $45,215 $49,887
======= =======
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS $ 1,100 $ 9,225
See Notes to Financial Statements
on page 19.
------- -------
TOTAL $ 1,100 $ 9,225
======= =======
</TABLE>
<PAGE>
Page 10
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE V
ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
INSTRUCTIONS: Complete the following schedule listing accounts receivable
from each associate company. Where the service company has
provided accommodation or convenience payments for associate
companies, a separate listing of total payments for each
associate company by subaccount should be provided.
BALANCE AT BALANCE AT
BEGINNING CLOSE
OF YEAR OF YEAR
DESCRIPTION
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM
ASSOCIATE COMPANIES
New England Electric System $ 699 $ 177
Nantucket Electric Company - 87
Massachusetts Electric Company 4,283 1,566
New England Hydro-Trans. Electric Co., Inc. 43 (14)
New England Hydro Transmission Corp. 6 9
New England Power Company 4,192 1,974
New England Electric Transmission Corp. 14 10
Yankee Atomic Electric Company 77 76
Granite State Electric Company 242 158
Narragansett Energy Resources Company (10) (2)
The Narragansett Electric Company 1,731 691
New England Energy Incorporated 34 45
New England Electric Resources, Inc. (3) (16)
Granite State Energy, Inc. - 2
NEES Energy, Inc. - 11
AllEnergy, Inc. - 150
------- -------
TOTAL $11,308 $ 4,924
======= =======
TOTAL
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS: PAYMENTS
New England Electric System $ (13)
Nantucket Electric Company 123
Massachusetts Electric Company (1,604)
New England Hydro-Trans. Electric Co., Inc. 27
New England Hydro Transmission Corp. -
New England Power Company 308
New England Electric Transmission Corp. 21
Yankee Atomic Electric Company 157
Granite State Electric Company 154
Narragansett Energy Resources Company -
The Narragansett Electric Company 755
New England Energy Incorporated -
New England Electric Resources, Inc. 4
Granite State Energy, Inc. -
NEES Energy, Inc. 5
AllEnergy, Inc. -
------
TOTAL PAYMENTS $ (63)
======
<PAGE>
Page 11
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE VI
FUEL STOCK EXPENSES UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect
to fuel stock expenses during the year and indicate amount
attributable to each associate company. Under the section
headed "Summary" listed below give an overall report of the
fuel functions performed by the service company.
DESCRIPTION LABOR EXPENSES TOTAL
ACCOUNT 152 - FUEL STOCK EXPENSES
UNDISTRIBUTED None None None
---- ---- ----
TOTAL None None None
==== ==== ====
SUMMARY:
<PAGE>
Page 12
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE VII
STORES EXPENSE UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with
respect to stores expense during the year and indicate
amount attributable to each associate company.
DESCRIPTION LABOR EXPENSES TOTAL
ACCOUNT 163 - STORES EXPENSE
UNDISTRIBUTED None None None
---- ---- -----
TOTAL None None None
==== ==== ====
<PAGE>
Page 13
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE VIII
MISCELLANEOUS CURRENT AND ACCRUED ASSETS
INSTRUCTIONS: Provide detail of items in this account. Items less than
$10,000 may be grouped, showing the number of items in each
group.
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
ACCOUNT 174 - MISCELLANEOUS CURRENT AND
ACCRUED ASSETS None None
---- ----
TOTAL None None
==== ====
<PAGE>
Page 14
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE IX
MISCELLANEOUS DEFERRED DEBITS
INSTRUCTIONS: Provide detail of items in this account. Items less than
$10,000 may be grouped by class, showing the number of
items in each class.
<CAPTION>
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
<S> <C> <C>
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS
Unbilled Computer Information Systems Costs $ 678 $ -
Unbilled Microwave Improvements 1,913 819
Unbilled Building Leasehold Improvements 610 114
Unbilled Shared Microwave System Expenses (102) (3)
Unbilled Dispatching Expenses (REMVEC) (118) (175)
Unbilled Heavy Equipment Expenses 42 40
Unbilled Overheads 4 16
Miscellaneous Expenses (1 item) 6 8
------ ------
TOTAL $3,033 $ 819
====== ======
</TABLE>
<PAGE>
Page 15
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE X
RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES
INSTRUCTIONS: Provide a description of each material research,
development, or demonstration project which incurred
costs by the service corporation during the year.
DESCRIPTION AMOUNT
ACCOUNT 188 - RESEARCH, DEVELOPMENT, OR
DEMONSTRATION EXPENDITURES None
----
TOTAL None
====
<PAGE>
Page 16
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
SCHEDULE XI
PROPRIETARY CAPITAL
<CAPTION>
OUTSTANDING
NUMBER OF PAR OR STATED CLOSE OF PERIOD
ACCOUNT SHARES VALUE NO. OF TOTAL
NUMBER CLASS OF STOCK AUTHORIZED PER SHARE SHARES AMOUNT
<S> <C> <C> <C> <C> <C>
201 COMMON STOCK ISSUED 4,000 $25 3 $75
INSTRUCTIONS: Classify amounts in each account with a brief explanation,
disclosing the general nature of transactions which give rise
to the reported amounts.
DESCRIPTION AMOUNT
ACCOUNT 211 - MISCELLANEOUS PAID-IN CAPITAL
Capital contributions from New England
Electric System, the holding company,
authorized on:
December 21, 1979 (SEC Release Number 35-21354) $ 1,350,000
December 29, 1995 15,000,000
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS None
----------
TOTAL $16,350,000
==========
INSTRUCTIONS: Give particulars concerning net income or (loss) during the
year, distinguishing between compensation for the use of
capital owed or net loss remaining from servicing
non-associates per the General Instructions of the Uniform
Systems of Accounts. For dividends paid during the year in
cash or otherwise, provide rate percentage, amount of
dividend, date declared and date paid.
BALANCE AT NET INCOME BALANCE AT
BEGINNING OR DIVIDENDS CLOSE
DESCRIPTION OF YEAR (LOSS) PAID OF YEAR
ACCOUNT 216 -
UNAPPROPRIATED
RETAINED EARNINGS $165,492 $1,839,383 (A) $165,492 (B) $1,839,383
-------- ---------- -------- ----------
TOTAL $165,492 $1,839,383 $165,492 $1,839,383
======== ========== ======== ==========
(A) Return on equity of 11.25% as authorized by SEC File #70-6353 amendment
No. 11 dated August 18, 1995.
(B) DATE DATE NO. OF TOTAL
DECLARED PAID SHARES DIVIDEND
2/28/96 4/01/96 3 $165,492
</TABLE>
<PAGE>
Page 17
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE XII
LONG-TERM DEBT
INSTRUCTIONS: Advances from associate companies should be reported separately for advances on notes, and
advances on open account. Names of associate companies from which advances were received
shall be shown under the class and series of obligation column. For Account 224 - Other
long-term debt provide the name of creditor company or organization, terms of the obligation,
date of maturity, interest rate, and the amount authorized and outstanding.
<CAPTION>
TERMS OF OBLIG DATE BALANCE AT BALANCE AT
NAME OF CLASS & SERIES OF INTEREST AMOUNT BEGINNING DEDUCTIONS CLOSE
CREDITOR OF OBLIGATION MATURITY RATE AUTHORIZED OF YEAR ADDITIONS (1) OF YEAR
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ACCOUNT 223 -
ADVANCES FROM
ASSOCIATE
COMPANIES: None None
ACCOUNT 224 -
OTHER LONG-TERM
DEBT: None None
---- ----
TOTAL None None
==== ====
(1) Give an explanation of deductions:
None
</TABLE>
<PAGE>
Page 18
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE XIII
CURRENT AND ACCRUED LIABILITIES
INSTRUCTIONS: Provide balance of notes and accounts payable to each associate
company. Give description and amount of miscellaneous current
and accrued liabilities. Items less than $10,000 may be
grouped, showing the number of items in each group.
<CAPTION>
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
<S> <C> <C>
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE
COMPANIES $ - $ -
See Notes to Financial Statements
on Page 19.
------- -------
TOTAL $ - $ -
======= =======
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE
COMPANIES
Massachusetts Electric Company $ 52 $ 269
New England Power Company 57 99
Granite State Electric Company 1 10
The Narragansett Electric Company 30 43
New England Electric Transmission Corp. 8 -
------- ------
TOTAL $ 148 $ 421
======= ======
ACCOUNT 242 - MISCELLANEOUS CURRENT AND
ACCRUED LIABILITIES
Group Insurance $ 29 $ (109)
NEES Goals 2,991 2,811
Postemployment Benefits 3,387 3,570
Property Under Capital Lease 6,943 5,015
Healthcare Costs (57) 17
Municipal Taxes (117) -
Accrued Benefit Costs 608 2,248
Other Current and Accrued Liabilities - 6
------- -------
TOTAL $13,784 $13,558
======= =======
</TABLE>
<PAGE>
Page 19
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes regarding
the financial statements or any account thereof. Furnish
particulars as to any significant contingent assets or
liabilities existing at the end of the year. Notes
relating to financial statements shown elsewhere in this
report may be indicated here by reference.
During 1981, certain subsidiaries of New England Electric System
established a money pool to more effectively utilize cash resources of
subsidiaries and to reduce outside short-term borrowings. The SEC authorized
the establishment of the money pool in Release No. 35-21987. In 1983, the
terms were amended in Release No. 35-22900 to allow New England Electric
System to invest in the money pool. In 1986, the terms were amended in
Release No. 35-24232 to allow New England Energy Incorporated and NEES Energy,
Incorporated to invest in the money pool and New England Electric Transmission
Corporation to invest in and borrow from the money pool. In 1988, the terms
were amended in Release No. 35-24733 to allow New England Hydro-Transmission
Electric Company Incorporated and New England Hydro-Transmission Corporation
to invest in the money pool. In 1992, the terms were amended in Release No.
35-25483 to remove NEES Energy, Incorporated from participation in the money
pool, to allow New England Hydro-Transmission Electric Company and New England
Hydro-Transmission Corporation to borrow from the money pool, to allow New
England Hydro Finance Company, Incorporated and Narragansett Energy Resources
Company to invest in the money pool and to divide the borrowing members of the
money pool into Group I and Group II, consisting of wholly owned subsidiaries
and non-wholly owned subsidiaries, respectively, with different borrowing
priorities. In 1995, the terms were amended in Release No. 35-26439 to allow
Nantucket Electric Company to invest in and borrow from the money pool.
Short-term borrowing needs of subsidiaries are met first with available
funds of other subsidiaries. Borrowing companies pay interest at a rate
designed to approximate the cost of outside short-term borrowings. Companies
who invest in the pool share the interest earned on a basis proportionate to
their average monthly investment in the money pool. Funds may be withdrawn
from or repaid to the pool at any time without prior notice.
New England Power Service Company was designated to administer the pool as
agent for the member companies. The Company has classified pool transactions
of the member companies on a net basis in the current and prior year balance
sheets.
At December 31, 1996 the detail of this pool was as follows:
Investments in the Pool:
New England Electric System $ 5,925,000
Nantucket Electric Company 150,000
New England Hydro-Trans. Electric Co., Inc. 4,850,000
New England Hydro Transmission Corp. 1,450,000
New England Energy Incorporated 175,000
Narragansett Energy Resources Company 800,000
New England Power Service Company 9,225,000 $22,575,000
----------- ===========
Borrowings from the Pool:
Massachusetts Electric Company $ 5,275,000
Granite State Electric Company 5,475,000
New England Power Company 5,275,000
The Narragansett Electric Company 5,300,000
New England Electric Transmission Corp. 1,250,000 $22,575,000
----------- ===========
<PAGE>
Page 20
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE XV
STATEMENT OF INCOME
<CAPTION>
ACCOUNT DESCRIPTION CURRENT PRIOR
YEAR YEAR
<S> <C> <C> <C>
INCOME
457 Services rendered to associate companies $196,708 $217,144
458 Services rendered to nonassociate companies 2,168 2,177
421 Miscellaneous income or loss
------- -------
TOTAL INCOME 198,876 219,321
------- -------
EXPENSE
920 Salaries and wages 89,440 93,280
921 Office supplies and expenses 36,249 39,234
922 Administrative expense transferred - credit
923 Outside services employed 14,123 10,830
924 Property insurance 81 116
925 Injuries and damages 783 1,129
926 Employee pensions and benefits 26,820 37,131
928 Regulatory commission expense 195 77
930.1 General advertising expenses
930.2 Miscellaneous general expenses 576 102
931 Rents 18,323 27,512
932 Maintenance of structures and equipment 2,128 2,144
403 Depreciation and amortization expense
408 Taxes other than income taxes 7,091 7,980
409 Income taxes 5,441 162
410 Provision for deferred income taxes 813
411 Provision for deferred income taxes - credit (4,663) (1,960)
411.5 Investment tax credit (26)
426.1 Donations 270 221
426.5 Other deductions
427 Interest on long-term debt
430 Interest on debt to associate companies (418) (902)
431 Other interest expense 598 1,313
------- -------
TOTAL EXPENSE 197,037 219,156
------- -------
NET INCOME OR (LOSS) $ 1,839 $ 165
======= =======
</TABLE>
<PAGE>
Page 21
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
<CAPTION>
DIRECT INDIRECT COMPENSATION TOTAL
COSTS COSTS FOR USE AMOUNT
NAME OF ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL BILLED
457-1 457-2 457-3
<S> <C> <C> <C> <C>
New England Electric System $ 1,142 $ 145 $ 13 $ 1,300
Nantucket Electric Company 440 100 8 548
Massachusetts Electric Company 57,048 10,454 564 68,066
New England Hydro-Transmission
Electric Co., Inc. 1,629 293 13 1,935
New England Hydro Transmission Corp. 430 56 2 488
New England Power Company 68,504 17,139 871 86,514
New England Electric Transmission
Corp. 339 47 2 388
Yankee Atomic Electric Company 56 36 1 93
Granite State Electric Company 3,625 748 39 4,412
Narragansett Energy Resources Company (6) 71 1 66
The Narragansett Electric Company 23,204 3,973 245 27,422
New England Energy Incorporated 358 445 4 807
New England Electric Resources, Inc. 2,856 762 42 3,660
NEERI International (51) 51 0 0
Granite State Energy 19 7 0 26
NEES Energy 548 151 7 706
AllEnergy 205 68 4 277
-------- ------- ------ --------
TOTAL $160,346 $ 34,546 $1,816 $196,708
======== ======= ====== ========
</TABLE>
<PAGE>
Page 22
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
ANALYSIS OF BILLING
NONASSOCIATE COMPANIES
ACCOUNT 458
<CAPTION>
DIRECT INDIRECT COMPENSATION EXCESS TOTAL
COST COST FOR USE TOTAL OR AMOUNT
NAME OF NONASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL COST DEFICIENCY BILLED
458-1 458-2 458-3 458-4
<S> <C> <C> <C> <C> <C> <C>
1) REMVEC Billings $1,820 $ 8 25 $1,853 - $1,853
2) Lockheed Martin 269 1 1 271 - 271
3) Central Maine Power Company - - - - (3) (3)
4) Ocean State Power 16 - - 16 - 16
5) Coughlin Electrical Contractors 12 - - 12 - 12
6) Dept. of Public Works 4 - - 4 - 4
7) Wellesley Crane Services 1 - - 1 - 1
8) LaPlume Excavating 1 - - 1 - 1
9) Peabody Municipal Light 2 - - 2 - 2
10) Danvers Electric 6 - - 6 - 6
11) Various Companies 5 - - 5 - 5
----- ---- --- ----- --- -----
TOTAL $2,136 $ 9 $26 $2,171 (3) $2,168
===== ==== === ===== === =====
INSTRUCTION: Provide a brief description of the services rendered to each nonassociated company:
1) Centralized Eastern N.E. Dispatching System
2) Testing of HVDC Transmission/Cost Reduction
3) Storm Restoration Services
4) Auditing Services
5) Hoisting and Rigging Training Program
6) Safety Training
7) Hoisting and Rigging Training Program
8) Safety Seminar for Backhoes and Excavators
9) Electricity Safety Seminar
10) Visual and Operational Inspection Training
11) Dielectric Testing of Rubber Safety Products
</TABLE>
<PAGE>
Page 23
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE ASSOCIATE AND NONASSOCIATE COMPANIES
<CAPTION>
ASSOCIATE COMPANY CHARGESNONASSOCIATE COMPANY CHARGESTOTAL CHARGES FOR SERVICE
------------------------------------------------------------------------------
DIRECT INDIRECT DIRECT INDIRECT DIRECTINDIRECT
COST COST TOTAL COST COST TOTAL COST COST TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
920 Salaries and Wages $ 78,240 $11,144 $ 89,384 $ 56 $ 56 $ 78,296 $11,144$ 89,440
921 Office Supplies and Expenses 25,426 8,924 34,350 1,899 1,899 27,325 8,924 36,249
922 Administrative Expense
Transferred-Credit
923 Outside Services Employed 13,155 787 13,942 181 181 13,336 787 14,123
924 Property Insurance 81 81 81 81
925 Injuries and Damages 686 97 783 686 97 783
926 Employee Pensions and Benefits 23,423 3,397 26,820 23,423 3,397 26,820
928 Regulatory Commission Expense 81 114 195 81 114 195
930.1 General Advertising Expenses
930.2 Miscellaneous General Expenses 466 110 576 466 110 576
931 Rents 11,074 7,249 18,323 11,074 7,249 18,323
932 Maintenance of Structures and
Equipment 2,128 2,128 2,128 2,128
403 Depreciation and Amortization
Expense
408 Taxes Other Than Income Taxes 6,204 887 7,091 6,204 887 7,091
409 Income Taxes 5,373 5,373 $ 68 68 5,441 5,441
410 Provision for Deferred Income
Taxes
411 Provision for Deferred Income (4,604) (4,604) (59) (59) (4,663) (4,663)
Taxes-Credit
411.5 Investment Tax Credit
426.1 Donations 53 217 270 53 217 270
426.5 Other Deductions
427 Interest on Long-Term Debt
431 Other Interest Expense 1,538 (940) 598 1,538 (940) 598
-------- ------- -------- ------ --- ------ -------- ------- -------
TOTAL EXPENSES $160,346 $34,964 $195,310 $2,136 $ 9 $2,145 $162,482 $34,973 197,455
======== ======= ======== ====== === ====== ======== ======= =======
Compensation for use of
Equity Capital 1,816 23 1,839
------- ------ -------
430 Interest on Debt to
Associate Companies (418) - (418)
-------- ------ --------
TOTAL COST OF SERVICE $196,708 $2,168 $198,876
======== ====== ========
INSTRUCTION: Total cost of service will equal for associate and nonassociate companies the total amount billed under
their separate analysis of billing schedules.
</TABLE>
<PAGE>
Page 24
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT OR SERVICE FUNCTION
<CAPTION>
TOTAL
DESCRIPTION OF ITEMS AMOUNT OVERHEAD 01 02 03 04 05
------ -------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
920 Salaries and wages $ 89,440 $3,255 $440 $1,651 $7,931 $1,255
921 Office supplies and expenses 36,249 350 37 1,620 4,005 732
922 Administrative expense transferred - credit
923 Outside services employed 14,123 293 3 38 641 117
924 Property insurance 81
925 Injuries and damages 783
926 Employee pensions and benefits 26,820 4 13 33 4
928 Regulatory commission expense 195 1 1
930.1 General advertising expenses
930.2 Miscellaneous general expense 576 124 5
931 Rents 18,323 14 947 287 194
932 Maintenance of structures and equipment 2,128 5
403 Depreciation and amortization expense
408 Taxes other than income taxes 7,091
409 Income taxes 5,441 $5,441
410 Provision for deferred income taxes
411 Provision for deferred income taxes - credit (4,663) (4,663)
411.5 Investment tax credit
426.1 Donations 270
426.5 Other deductions
427 Interest on long-term debt
430 Interest on debt to associate companies (418)
431 Other interest expense 598
-------- ------ ------- ---- ------ ------- ------
TOTAL EXPENSES $197,037 $ 778 $ 4,037 $484 $4,269 $12,908 $2,302
======== ====== ======= ==== ====== ======= ======
INSTRUCTION: Indicate each department or service function. (see Instruction 01-3 General Structure of Accounting
System: Uniform System of Accounts)
</TABLE>
<PAGE>
Page 25
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE XVII - CONTINUED
<CAPTION>
ACCOUNT
NUMBER 06 07 08 09 10 11 12 13 14 15 16
- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
920 $2,593 $11,678 $ 4,353 $ 9,946 $4,393 $1,250 $442 $19,841 $ 2,171 $ 850 $ 5,555
921 555 29 1,934 13,914 2,414 125 37 2,780 907 110 (200)
922
923 440 1,571 8,096 314 1,174 5 55 74
924 81
925 948 2 8 (203)
926 7 28 26,064 91 32 3 9 182 30 15 72
928 5 23
930.1
930.2 2 1 7 1 1 96
931 536 1,979 11,155 49 4 564 16 938
932 2,078 2 18
403
408 7,091
409
410
411
411.5
426.1 192 78
426.5
427
430 (418)
431 (1,117) (5) 1 1,719
------ ------ ------- ------- ------ ------ ------ ------- ------- ------ -------
$3,157 $12,712 $38,009 $43,206 $7,203 $1,401 $ 500 $24,560 $ 3,104 $1,030 $14,909
====== ====== ======= ======= ====== ====== ====== ======= ======= ====== =======
</TABLE>
<PAGE>
Page 26
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
SCHEDULE XVII - CONTINUED
<CAPTION>
ACCOUNT
NUMBER 17 18 19 20 21
- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
920 $ 687 $ 130 $6,446 $3,990 $ 583
921 62 47 5,837 714 240
922
923 31 1 163 863 244
924
925 11 17
926 9 15 29 10 170
928 165
930.1
930.2 36 303
931 1,601 39
932 25
403
408
409
410
411
411.5
426.1
426.5
427
430
431
------ ------ ------- ------ ------ ------ ----- ----- ------ ------
$ 789 $ 193 $14,112 $5,834 $1,540
====== ====== ====== ======= ====== ====== ====== ===== ===== ====== ======
</TABLE>
<PAGE>
Page 27
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920
<CAPTION>
DEPARTMENTAL SALARY EXPENSE
NAME OF DEPARTMENT INCLUDED IN AMOUNTS BILLED TO NUMBER
------------------------------- PERSONNEL
Indicate each dept. or TOTAL PARENT OTHER NON END OF
service function AMOUNT COMPANY ASSOCIATES ASSOCIATES YEAR
<S> <C> <C> <C> <C> <C>
01 Management $ 3,255 $193 $ 3,062 14
02 Research &
Development 440 440 7
03 Customer Service 1,651 1,651 31
04 Engineering 7,931 7,929 $ 2 130
05 REMVEC/Dispatching 1,255 1,255 17
06 Supply Chain
Management 2,593 2,593 53
07 Retail Transmission 11,678 11,625 53 170
08 Human Resources 4,353 270 4,083 39
09 Information Services 9,946 1 9,945 175
10 Demand Side Management 4,393 4,393 56
11 Rates 1,250 1,250 16
12 Environmental 442 442 8
13 Construction 19,841 19,841 339
14 Treasury/Financial 2,171 81 2,090 31
15 Financial Forecasting 850 850 11
16 Corporate Accounting 5,555 19 5,536 121
17 Internal Audit 687 687 13
18 Planning & Power
Supply* 130 130
19 Retail
Operations 6,446 6,446 102
20 Corporate Legal 3,990 93 3,897 48
21 Corporate
Communications 583 1 582 10
------- ---- ------- ---- -----
TOTAL $89,440 $658 $88,727 $ 55 1,391
======= ==== ======= ==== =====
*Six employees in January, three employees in February, March and April, and
zero employees for the remainder of the year.
</TABLE>
<PAGE>
Page 28
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services
employed. If the aggregate amounts paid to any one payee
and included within one subaccount is less than $100,000,
only the aggregate number and amount of all such payments
included within the subaccount need be shown. Provide a
subtotal for each type of service.
<CAPTION>
RELATIONSHIP
"A"- ASSOCIATE
FROM WHOM PURCHASED TYPE OF SERVICE "NA"- NON ASSOCIATE AMOUNT
<S> <C> <C> <C>
LEGAL SERVICES
Skadden, Arps, Slate, Legal Services NA 136
Meagher & Flom
Glenn Dawson Legal Services NA 131
Hale & Dorr Legal Services NA 257
Twenty-four Vendors NA 344
(Each Under $100,000) ----
TOTAL LEGAL SERVICES 868
----
OTHER SERVICES
Chapman Associates Engineering Consultants NA 248
Command Systems Information Systems NA 268
Professional Services
Duffy and Shanley, Inc. Public Relations Services NA 210
Employee Communications Human Resource Management NA 110
Services Services
Fuessler Group Inc. Public Relations Services NA 153
IBM Information Systems Support NA 5,412
Maxima Consulting, Inc. Information Systems NA 156
Professional Services
Mercer Management Management Consultants NA 856
Metzler & Associates Consulting Services NA 191
</TABLE>
<PAGE>
Page 29
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
OUTSIDE SERVICES EMPLOYED - CONTINUED
ACCOUNT 923
<CAPTION>
RELATIONSHIP
"A"- ASSOCIATE
FROM WHOM PURCHASED TYPE OF SERVICE "NA"- NON ASSOCIATE AMOUNT
<S> <C> <C> <C>
Montaup Electric Co. Personnel Assigned to REMVEC NA 110
New Boston Systems Information Systems NA 805
Professional Services
Palmer Associates Information Systems NA 257
Professional Services
Power Technologies, Inc. Engineering Consultants NA 100
Regional Economic
Research, Inc. Professional Services NA 127
Reliance Systems Information Systems NA 425
Professional Services
Stone & Webster Management Consulting NA 390
Towers, Perrin, Human Resource
Forster & Crosby Management Services NA 237
Triad Employment Professional Services NA 381
Services
Triad Engineering Corp. Professional Services NA 973
Walker Interactive Information Systems NA 239
Systems Support
Ninety-six vendors
(each under $100,000) Miscellaneous Services 1,607
------
TOTAL OTHER SERVICES 13,255
------
GRAND TOTAL $14,123
======
</TABLE>
<PAGE>
Page 30
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
EMPLOYEE PENSIONS AND BENEFITS
ACCOUNT 926
INSTRUCTIONS: Provide a listing of each pension plan and benefit
program provided by the service company. Such listing
should be limited to $25,000.
DESCRIPTION AMOUNT
Pensions $9,507
Postretirement Benefits Other than Pensions 8,301
Postemployment Benefits 184
Group Insurance Premiums 922
Executive Life Insurance (1,079)
Medical Insurance Premiums 4,400
Employee Publications 158
Employee Health Program 527
Employee Educational Aid 356
Employee Thrift Plan 2,624
Employee Occupational Health Service 191
Employee Benefits Administration 477
Employee Severance Costs 216
Miscellaneous (Each Under $25,000) 36
-------
TOTAL $26,820
=======
<PAGE>
Page 31
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
GENERAL ADVERTISING EXPENSES
ACCOUNT 930.1
INSTRUCTIONS: Provide a listing of the amount included in Account
930.1, "General Advertising Expenses", classifying the
items according to the nature of the advertising and
as defined in the account definition. If a particular
class includes an amount in excess of $3,000 applicable
to a single payee, show separately the name of the payee
and the aggregate amount applicable thereto.
DESCRIPTION NAME OF PAYEE AMOUNT
None
----
TOTAL None
====
<PAGE>
Page 32
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
MISCELLANEOUS GENERAL EXPENSES
ACCOUNT 930.2
INSTRUCTIONS: Provide a listing of the amount included in Account
930.2, "Miscellaneous General Expenses", classifying such
expenses according to their nature. Payments and expenses
permitted by Sections 321(b) (2) of the Federal Election
Campaign Act, as amended by Public Law 94-283 in 1976 (2 U.S.C.
Section 441 (b) (2)) shall be separately classified.
DESCRIPTION AMOUNT
Annual Report Costs $369
Directors' Fees 124
Membership Dues - Company 83
----
TOTAL $576
====
<PAGE>
Page 33
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
RENTS
ACCOUNT 931
INSTRUCTIONS: Provide a listing of the amount included in Account
931, "Rents", classifying such expenses by major
groupings of property, as defined in the account
definition of the Uniform System of Accounts.
TYPE OF PROPERTY AMOUNT
Building Rents $ 1,987
Microwave and Telemetering Equipment 1,415
Computer Hardware and Software 3,941
Transportation Equipment 1,501
Capital Lease - Computer Information Systems 8,096
Office and Other Equipment 1,383
------
TOTAL $18,323
======
<PAGE>
Page 34
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408
INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other Than
Income Taxes". Separate the analysis into two groups:
(1) other than U.S. Government taxes, and (2) U.S.
Government taxes. Specify each of the various kinds
of taxes and show the amounts thereof. Provide a subtotal
for each class of tax.
<CAPTION>
KIND OF TAX AMOUNT
<S> <C> <C>
1) OTHER THAN U.S. GOVERNMENT TAXES
State Unemployment $1,018
Municipal & Fuel- Motor Vehicle Excise 32
------
SUBTOTAL 1,050
------
2) U.S. GOVERNMENT TAXES
Federal Unemployment 89
Federal Insurance Contribution Act - Company 5,937
Miscellaneous 15
------
SUBTOTAL 6,041
------
TOTAL $7,091
======
</TABLE>
<PAGE>
Page 35
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
DONATIONS
ACCOUNT 426.1
INSTRUCTIONS: Provide a listing of the amount included in Account 426.1,
"Donations", classifying such expenses by its purpose. The
aggregate number and amount of all items of less than $3,000
may be shown in lieu of details.
<CAPTION>
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
<S> <C> <C>
W.G.B.H. Matching Gifts Program $ 10
United Way Matching Gifts Program 85
St. John's Seminary Matching Gifts Program 5
Pine Street Inn Human Services Agency 6
Crohn's & Colitis
Foundation Matching Gifts Program 4
Dana Farber Institute Matching Gifts Program 4
Susan G. Koman Foundation Matching Gifts Program 3
New England Aquarium Matching Gifts Program 4
Woods Hole Oceanographic
Institute Matching Gifts Program 7
Harpsichord Unlimited Matching Gifts Program 4
Worcester Polytechnic
Institute Matching Gifts Program 4
Eastern Nazarene College Matching Gifts Program 3
Miscellaneous (474 Items) Matching Gifts Program
(Each Vendor Under $3,000) for colleges, universities,
and other charitable
organizations 131
-----
TOTAL $270
=====
</TABLE>
<PAGE>
Page 36
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
(In Thousands)
OTHER DEDUCTIONS
ACCOUNT 426.5
INSTRUCTIONS: Provide a listing of the amount included in Account
426.5, "Other Deductions", classifying such expenses
according to their nature.
DESCRIPTION NAME OF PAYEE AMOUNT
None
----
TOTAL None
====
<PAGE>
Page 37
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
SCHEDULE XVIII
NOTES TO STATEMENT OF INCOME
INSTRUCTIONS: The space below is provided for important notes
regarding the statement of income or any account thereof.
Furnish particulars as to any significant increase in
services rendered or expenses incurred during the year.
Notes relating to financial statements shown elsewhere in
this report may be indicated here by reference.
No Significant Notes
<PAGE>
Page 38
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
ORGANIZATION CHART
For the Year Ended December 31, 1996
<CAPTION>
Chairman NEES
! (01)
!
President & Chief Executive
Officer NEES
! (01)
!
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
! ! ! !
Vice Sr. Vice Sr. Vice Vice
President President President President
NEES Finance - NEES NEES NEES
President - NEPSCo
! (01) ! (01) ! (01) ! (01)
! ! ! !
-Customer Service -Supply Chain Management -Environmental -Research &
! (03) ! (06) ! (12) Development
! ! ! ! (02)
-Engineering -Human Resources -Corporate Legal !
! (04) ! (08) ! (20) -Engineering
! ! ! ! (04)
-REMVEC/Dispatching -Information Services -Corporate !
! (05) ! (09) Communications -Environmental
! ! (21) ! (12)
-Retail Transmission -Rates !
! (07) ! (11) -Construction
! ! ! (13)
-Demand Side -Treasury/Financial !
Management ! (14) -Planning & Power Supply
! (10) ! (18)
! -Financial Forecasting
-Environmental ! (15)
! (12) !
! -Corporate Accounting
-Retail Operations ! (16)
(19) !
-Internal Audit
(17)
The numbers that appear with Department are a cross reference to Page 27.
</TABLE>
<PAGE>
Page 39
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
METHODS OF ALLOCATION
Inventory, less fuel
Microwave air line circuit miles
Number of employees
Number of customers
Number of meters in service
Adjusted gross revenue
Number of purchase orders
Archive space occupied
Budgeted transmission/distribution
operation and maintenance expenditures
Budgeted transmission/distribution
capital expenditures
Number of aerial devices
Average of number of purchase orders issued,
number of checks processed and inventory balances
Total billings to associated companies
for services rendered (excluding
convenience payments)
<PAGE>
Page 40
<TABLE>
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
As authorized by Commission's File No. 70-6353 and amendment No. 11 dated
August 18, 1995, New England Power Service Company included in its service
charge to customers for the year 1996 the amount of $1,839,383. The following
is a schedule indicating a breakdown of this billing:
<CAPTION>
Associated Non-Associated
Companies Companies Total
------------ ---------------- ---------
<S> <C> <C> <C>
Total Compensation $1,813,093 $26,290 $1,839,383
Excess of Revenues Billed
Over Costs Incurred to
Non-Associated Companies 3,143 (3,143) -
--------- ------- ---------
Compensation for Use of
Equity Capital Billed $1,816,236 $23,147 $1,839,383
========= ====== =========
The Company is authorized by this order and amendment thereto to use a rate
of return on Common Equity of New England Power Company as authorized in FERC
proceedings. The calculation of the authorized amount is as follows:
Common Equity:
Capital Contribution from NEES (December 21, 1979) $ 1,350,000
Capital Contribution from NEES (December 29, 1995) $15,000,000
Common Shares 75
-----------
$16,350,075
-----------
Amount of Equity return
January - December @ 11.25% $1,839,383
==========
</TABLE>
<PAGE>
Page 41
ANNUAL REPORT OF NEW ENGLAND POWER SERVICE COMPANY
For the Year Ended December 31, 1996
SIGNATURE CLAUSE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935 and the rules and regulations of the Securities and Exchange
Commission issued thereunder, the undersigned company has duly caused this
report to be signed on its behalf by the undersigned officer thereunto duly
authorized.
New England Power Service Company
---------------------------------
(Name of Reporting Company)
By: s/ H. W. McDowell
-------------------------------
(Signature of Signing Officer)
H. W. McDowell, Controller
-------------------------------------------
(Printed Name and Title of Signing Officer)
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
----------- ----------- ----
27 Financial Data Schedule Filed herewith
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR2
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET AND RELATED STATEMENTS
OF INCOME, RETAINED EARNINGS AND CASH FLOWS OF NEW
ENGLAND POWER SERVICE COMPANY, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<PERIOD-TYPE> 12-MOS
<BOOK-VALUE> PER-BOOK
<NET-SERVICE-COMPANY-PROPERTY> 11,019
<TOTAL-INVESTMENTS> 49,887
<TOTAL-CURRENT-ASSETS> 24,406
<TOTAL-DEFERRED-DEBITS> 10,978
<OTHER-ASSETS-AND-DEBITS> 0
<TOTAL-ASSETS-AND-DEBITS> 96,290
<TOTAL-PROPRIETARY-CAPITAL> 18,189
<TOTAL-LONG-TERM-DEBT> 0
<NOTES-PAYABLE> 0
<NOTES-PAYABLE-ASSOCIATE-COMP> 0
<OTHER-CURR-AND-ACCRUED-LIAB> 25,020
<TOTAL-DEFERRED-CREDITS> 53,081
<DEFERRED-INCOME-TAX> 0
<TOTAL-LIABIL-AND-PROPRIET-CAP> 96,290
<SERVICES-ASSOCIATE-COMPANIES> 196,708
<SERVICES-NON-ASSOCIATE-COMP> 2,168
<MISC-INCOME-OR-LOSS> 0
<TOTAL-INCOME> 198,876
<SALARIES-AND-WAGES> 89,440
<EMPLOYEE-PENSION-AND-BENEFIT> 26,820
<OTHER-EXPENSES> 80,777
<TOTAL-EXPENSES> 197,037
<NET-INCOME> 1,839
<TOTAL-EXPENSES-DIRECT-COST> 162,482
<TOTAL-EXPENSES-INDIRECT-COST> 34,973
<TOTAL-EXP-DIRECT-AND-INDIRECT> 197,455
<PERSONNEL-END-OF-YEAR> 1,391
