UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM U-9C-3
QUARTERLY REPORT PURSUANT TO RULE 58
For the quarterly period ended September 30, 1999
Northeast Utilities
------------------------------------
(Name of registered holding company)
Selden Street, Berlin, CT. 06037
----------------------------------------
(Address of principal executive offices)
Name and telephone number of officer to whom inquiries
concerning this report should be directed:
John J. Roman, Vice President and Controller
Telephone number: 860-665-5000
GENERAL INSTRUCTIONS
A. Use of Form
1. A reporting company, as defined herein, shall file a report on this
form within 60 days after the end of each of the first three quarters,
and within 90 days after the end of the fourth quarter, of the fiscal
year of the registered holding company. The period beginning on the
date of effectiveness of rule 58 and ending at the end of the quarter
following the quarter in which the rule becomes effective shall
constitute the initial period for which any report shall be filed, if
applicable.
2. The requirement to provide specific information by means of this form
supersedes any requirement by order of the Commission to provide
identical information by means of periodic certificates under rule 24;
but does not so supersede and replace any requirement by order to
provide information by means of an annual report on Form U-13-60.
3. Information with respect to reporting companies that is required by
Form U-13-60 shall be provided exclusively on that form.
4. Notwithstanding the specific requirements of this form, this
Commission may informally request such further information as, in its
opinion, may be necessary or appropriate.
B. Statements of Monetary Amounts and Deficits
1. Amounts included in this form and in related financial statements may
be expressed in whole dollars, thousands of dollars or hundred
thousands of dollars.
2. Deficits and other similar entries shall be indicated by either
brackets or parentheses. An explanation should be provided by
footnote.
C. Formal Requirements
This form, including exhibits, shall be filed with Commission
electronically pursuant to Regulation S-T(17 CFR 232.10 et seq.). A
conformed copy of each such report shall be filed with each state
commission having jurisdiction over the retail rates of a public utility
company that is an associate company of a reporting company. Each report
shall provide the name and telephone number of the person to whom inquiries
concerning the report should be directed.
D. Definitions
As used in this form, the word "reporting company" means an energy-related
company or gas-related company, as defined in rule 58(b). All other words
and terms have the same meaning as in the Public Utility Holding Company
Act of 1935, as amended, and the rules and regulations thereunder.
ITEM 1 - ORGANIZATION CHART
- ----------------------------------------------------
Instructions
- -----------------
1. Complete Item 1 only for the first three calendar quarters of the fiscal
year of the registered holding company.
2. Under the caption "Name of Reporting Company," list each energy-related and
gas-related company and each system company that directly or indirectly
holds securities thereof. Add the designation "(new)" for each reporting
company of which securities were acquired during the period, and the
designation"(*)" for each inactive company.
3. Under the caption "Percentage of Voting Securities Held," state the
aggregate percentage of the outstanding voting securities of the reporting
company held directly or indirectly by the registered holding company at the
end of the quarter.
4. Provide a narrative description of each reporting company's activities
during the reporting period.
- ----------------------------------------------------
<TABLE>
<CAPTION>
Percentage Activities
Energy of Voting reported
Name of or Gas Date of State of Securities Nature of during the
Reporting Co. Related Organization Organization Held Business period
- ----------------- ------- ------------ ------------ ----------------- -------------- ----------
<S> <C> <C> <C> <C> <C>
NU Holding 1/4/99 Connecticut 100% by Unregulated (A)
Enterprises, Inc. Northeast businesses
Utilities holding
company
Select Energy 9/26/96 Connecticut 100% by Invest in (B)
Energy, Inc. NU energy-related
Enterprises, Inc. activities
Select Energy 3/17/99 Connecticut 100% by Invest in (C)
Energy NU energy-related
Portland Enterprises, Inc. activities
Pipeline, Inc.
Northeast Energy 1/4/99 Connecticut 100% by Invest in (D)
Generation NU energy-related
Services Enterprises, Inc. activities
Company
</TABLE>
(A) NU Enterprises, Inc. is not the "reporting company" but is included in
this Item 1 because it holds, directly or indirectly, voting securities
issued by reporting companies as indicated above.
(B) Select Energy provides both wholesale and retail energy services. Select
Energy participates in open-access retail electricity markets and in
retail pilot programs in the Northeast. Select markets electricity as
well as natural gas and energy-related products and services in order to
enhance its core electricity service and customer relationships. Select
Energy is a registered retail electricity supplier in the states of Rhode
Island, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania
and Delaware. Select Energy is a registered gas marketer in the state of
Connecticut and also with certain local distribution companies in
Massachusetts, Rhode Island, Pennsylvania, New York, New Jersey and New
Hampshire.
(C) Select Energy Portland Pipeline, Inc. (SEPPI) acquired 5% interest in
Portland Natural Gas Transmission System partnership in March 1999.
(D) Effective January 4, 1999, Northeast Generation Services Company (NGS)
was established to provide a full range of energy-related operation and
maintenance services for large industrial, institutional and power
generation customers throughout the 11-state Northeast area. NGS' current
business segments focus on providing turnkey manage and operate services
(MOS) and also a full range of Industrial Services (IS) and Consulting
Services (CS).
MOS is a service that is designed for generation asset owners. NGS has
the ability to offer station management and operation services with a
focus on optimizing the value of that specific asset with the owner.
Within the IS platform, its offerings include mechanical and electrical
construction and maintenance services, as well as environmental
maintenance/compliance services. Within the CS platform, the product and
service offerings include engineering and environmental consulting
services, with an emphasis on power plant system design.
ITEM 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS
- ----------------------------------------------
Instruction
- -----------
With respect to a transaction with an associate company, report
only the type and principal amount of securities involved.
- ----------------------------------------------
<TABLE>
<CAPTION>
Person
Company Type of Principal to Whom Collateral Consideration Company Amount of
Issuing Security Amount of Issue or Cost of Security Given With Received for Contributing Capital
Security Issued Security Renewal Capital Was Issued Security Each Security Capital Contribution
- -------------- -------- ------------ -------- ------- ------------ ---------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NU
Select Enterprises,
Energy, Inc. N/A N/A N/A N/A N/A N/A N/A Inc. $20,000,000
Select
Energy NU
Portland Enterprises,
Pipeline, Inc. N/A N/A N/A N/A N/A N/A N/A Inc. $8,447,000
Northeast
Generation
Services
Company No transactions this quarter
</TABLE>
ITEM 3 - ASSOCIATE TRANSACTIONS
- -------------------------------------------------------------------------------
Instructions
- ------------
1. This item is used to report the performance during the quarter of contracts
among reporting companies and their associate companies, including other
reporting companies, for service, sales and construction. A copy of any
such contract not filed previously should be provided as an exhibit pursuant
to Item 6.B.
2. Parts I and II concern transactions performed by reporting companies on
behalf of associate companies, and transactions performed by associate
companies on behalf of reporting companies, respectively.
- -------------------------------------------------------------------------------
Part I - Transactions performed by reporting companies on behalf
of associate companies.
<TABLE>
<CAPTION>
Total Amount
Billed*
Reporting Associate
Company Company Types of Three months
Rendering Receiving Services ended
Services Services Rendered September 30, 1999
- ----------------------- ------------------- -------------- ------------------
(Thousands
of Dollars)
<S> <C> <C> <C>
Select Northeast Utilities
Energy, Inc. Service Company Gas Services $3
==================
Northeast Select
Generation Energy, Inc. Electrical,
Services Environmental and
Company Mechanical services $442
==================
Northeast Northeast
Generation Nuclear Energy
Services Company Electrical and
Company Mechanical services $157
==================
</TABLE>
Part II - Transactions performed by associate companies on behalf
of reporting companies.
<TABLE>
<CAPTION>
Total Amount
Billed*
Associate Reporting
Company Company Types of Three months
Rendering Receiving Services ended
Services Services Rendered September 30, 1999
- ----------------------- ------------------- -------------- ------------------
(Thousands
of Dollars)
<S> <C> <C> <C>
Northeast Utilities Select Supplies centralized
Service Company Energy, Inc. accounting,
administrative, data
processing, engineering,
financial, legal,
operational, planning,
purchasing and other
services 8,624
Fuel sales 14,134
Special deposits 1,539
Consulting services 496
Miscellaneous 801
------------------
Total $25,594
==================
Public Service Company Select
of New Hampshire Energy, Inc. Miscellaneous $42
==================
HEC Inc. Select
Energy, Inc. Engineering services $18
==================
Northeast Utilities Northeast Supplies centralized
Service Company Generation accounting,
Services administrative, data
Company processing, engineering,
financial, legal,
operational, planning,
purchasing and other
services 458
Renovation services 447
Miscellaneous 265
------------------
Total $1,170
==================
Northeast Utilities Select Energy Supplies centralized
Service Company Portland accounting,
Pipeline, Inc. administrative, data
processing, engineering,
financial, legal,
operational, planning,
purchasing and other
services $2
==================
* 'Total Amount Billed' is direct costs only.
</TABLE>
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
Investments in energy-related companies:
- ---------------------------------------
(Thousand of Dollars)
Total consolidated capitalization as of 9/30/99 $5,314,513 line 1
Total capitalization multiplied by 15%
(line 1 multiplied by .15) 797,177 line 2
Greater of $50 million or line 2 797,177 line 3
Total current aggregate investment:
(categorized by major line of
energy-related business):
Select Energy, Inc. 41,181
Select Energy Portland Pipeline, Inc. $8,445
Northeast Generation Services Company (1,417)
----------- line 4
Total current aggregate investment 48,209
---------
Difference between the greater of $50 million or 15% of
capitalization and the total aggregate investment of the line 5
registered holding company system $748,968
=========
ITEM 5 - OTHER INVESTMENTS
- ------------------------------------------------------------------
Instruction
- -----------
This item concerns investments in energy-related and gas-related companies that
are excluded from the calculation of aggregate investment under rule 58.
- ------------------------------------------------------------------
Major Line Other Other
of Energy- Investment Investment
Related in Last in This Reason for Difference
Business U-9C-3 Report U-9C-3 Report in Other Investment
- ------------- ------------- ------------- ------------------------
NONE
ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS
- -----------------------------------------------------------------------------
Instructions
- ------------
A. Financial Statements
1. Financial statements are required for reporting companies in which the
registered holding company system has at least 50% equity or other ownership
interest. For all other rule 58 companies, the registered holding company
shall make available to the Commission such financial statements as are
available to it.
2. For each reporting company, provide a balance sheet as of the end of the
quarter and income statements for the three-month and year-to-date periods
ending as of the end of the quarter, together with any notes thereto.
Financial statements shall be for the first three quarters of the fiscal
year of the registered holding company.
3. If a reporting company and each of its subsidiaries engage exclusively in
a single category of energy-related or gas-related activity, consolidated
financial statements may be filed.
4. Separate financial statements need not be filed for inactive companies or
for companies engaged solely in the ownership of interests in energy-related
or gas-related companies.
B. Exhibits
1. Copies of contracts required to be provided by Item 3 shall be filed as
exhibits.
2. A certificate stating that a copy of the report for the previous quarter
has been filed with interested state commissions shall be filed as an
exhibit. The certificate shall provide the names and addresses of the
state commissions.
- -----------------------------------------------------------------------------
A. Financial Statements
Select Energy, Inc.:
Balance Sheet - As of September 30, 1999
Income Statement-Three months and nine months ended September 30, 1999
Select Energy Portland Pipeline, Inc.:
Balance Sheet - As of September 30, 1999
Income Statement-Three months and nine months ended September 30, 1999
Northeast Generation Services Company:
Balance Sheet - As of September 30, 1999
Income Statement-Three months and nine months ended September 30, 1999
Northeast Utilities (PARENT):
Balance Sheet - As of September 30, 1999
Income Statement-Three months and nine months ended September 30, 1999
B. Exhibits
Exhibit No. Description
- ----------- -----------
6.B.1.1 The company certifies that a conformed copy of Form U-9C-3
for the previous quarter was filed with the following state
commissions:
Mr. Robert J. Murphy
Executive Secretary
Department of Public Utility Control
10 Franklin Square
New Britain, CT 06051
Ms. Mary L. Cottrell, Secretary
Massachusetts Department of Telecommunications and Energy
100 Cambridge Street
Boston, MA 02202
Mr. Thomas B. Getz
Executive Director and Secretary
State of New Hampshire
Public Utilities Commission
8 Old Suncook Road, Building One
Concord, NH 03301-7319
SELECT ENERGY, INC.
BALANCE SHEET
(Unaudited)
September 30,
1999
--------------
(Thousands
of Dollars)
ASSETS
- ------
Current Assets:
Cash $ 8,722
Accounts receivable 93,991
Accounts receivable from affiliated companies 172
Taxes receivable 25,103
Special deposits 8,304
Prepayments and other 2,630
--------------
Total current assets 138,922
--------------
Deferred Charges:
Intangibles 24,002
Unamortized debt expense 198
Other 1,356
--------------
Total deferred charges 25,556
--------------
Long- Lived Assets:
Software 1,365
Other 166
--------------
1,531
Less: Accumulated provision for depreciation (649)
--------------
882
Capital additions in progress 4,390
--------------
Total long-lived assets 5,272
--------------
Total Assets $ 169,750
==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the periods shown have been
made.
See accompanying notes to financial statements.
SELECT ENERGY, INC.
BALANCE SHEET
(Unaudited)
September 30,
1999
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Notes payable $ 6,500
Advance from parent 19,400
Accounts payable 19,177
Accounts payable to affiliated companies 96,316
Other 6,576
--------------
Total current liablilities 147,969
--------------
Stockholders' Equity:
Common stock--$1 par value. Authorized
100 shares; outstanding 100 shares -
Capital surplus, paid in 70,151
Retained earnings (48,370)
--------------
Total stockholders' equity 21,781
--------------
SELECT ENERGY, INC.
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
1999 1999
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 175,487 $ 389,292
-------------- --------------
Operating Expenses:
Purchased power net interchange
power and capacity 173,581 394,452
Other 24,985 42,990
Taxes other than income taxes 367 1,118
-------------- --------------
Total operating expenses 198,933 438,560
-------------- --------------
Operating Loss (23,446) (49,268)
-------------- --------------
Other Income 251 79
-------------- --------------
Interest and financing costs 605 1,305
-------------- --------------
Loss before income taxes (23,800) (50,494)
-------------- --------------
Income Tax Benefit:
Federal and state income taxes (8,583) (18,426)
-------------- --------------
Net Loss $ (15,217) $ (32,068)
============== ==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the periods shown have been made.
See accompanying notes to financial statements.
Total Liabilities and Stockholders' Equity $ 169,750
==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the periods shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY PORTLAND PIPELINE, INC.
BALANCE SHEET
(Unaudited)
September 30,
1999
--------------
(Thousands
of Dollars)
ASSETS
- ------
Current Assets:
Cash $ 8,447
Taxes receivable 8
--------------
Total current assets 8,455
--------------
Investments:
Other investments 8,433
--------------
Total investments 8,433
--------------
Total Assets $ 16,888
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts payable $ 457
Accounts payable to affiliated companies 7,986
--------------
Total current liabilities 8,443
--------------
Stockholders' Equity:
Common stock--$1 par value. Authorized
100 shares; outstanding 100 shares -
Capital surplus, paid in 8,457
Retained earnings (12)
--------------
Total stockholders' equity 8,445
--------------
Total Liabilities and Stockholders' Equity $ 16,888
==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the periods shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY PORTLAND PIPELINE, INC.
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
1999 1999
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ - $ -
-------------- --------------
Operating Expenses:
Operation and maintenance 2 19
Taxes other than income taxes - 1
-------------- --------------
Total operating expenses 2 20
-------------- --------------
Operating Loss (2) (20)
-------------- --------------
Income Tax Benefit:
Federal and state income taxes (1) (8)
-------------- --------------
Net Loss $ (1) $ (12)
============== ==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the periods shown have been made.
See accompanying notes to financial statements.
NORTHEAST GENERATION SERVICES COMPANY
BALANCE SHEET
(Unaudited)
September 30,
1999
--------------
(Thousands
of Dollars)
ASSETS
- ------
Current Assets:
Accounts receivable from affiliated companies $ 442
Taxes receivable 966
--------------
Total current assets 1,408
--------------
Total Assets $ 1,408
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts payable $ 1,814
Accounts payable to affiliated companies 1,011
--------------
Total current liabilities 2,825
--------------
Stockholders' Equity:
Common stock--$1 par value. Authorized
100 shares; outstanding 100 shares -
Capital surplus, paid in 10
Retained earnings (1,427)
--------------
Total stockholders' equity (1,417)
--------------
Total Liabilities and Stockholders' Equity $ 1,408
==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the periods shown have been made.
See accompanying notes to financial statements.
NORTHEAST GENERATION SERVICES COMPANY
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
1999 1999
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 1,055 $ 1,161
-------------- --------------
Operating Expenses:
Operation and maintenance 2,161 3,312
Taxes other than income taxes 60 204
-------------- --------------
Total operating expenses 2,221 3,516
-------------- --------------
Operating Loss (1,166) (2,355)
-------------- --------------
Other Loss (20) (13)
-------------- --------------
Interest and financing costs 2 2
-------------- --------------
Loss before income taxes (1,188) (2,370)
-------------- --------------
Income Tax Benefit:
Federal and state income taxes (477) (953)
-------------- --------------
Net Loss $ (711) $ (1,417)
============== ==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the periods shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
(Unaudited)
September 30,
1999
--------------
(Thousands
of Dollars)
ASSETS
- ------
Other Property and Investments:
Investments in subsidiary companies, at equity........ $ 2,248,001
Investments in transmission companies, at equity...... 17,992
Other, at cost........................................ 54
--------------
2,266,047
--------------
Current Assets:
Notes receivable from affiliated companies............ 56,200
Notes and accounts receivable......................... 628
Accounts receivable from affiliated companies......... 1,524
Taxes receivable...................................... 2,426
Prepayments........................................... 594
--------------
61,372
--------------
Deferred Charges:
Accumulated deferred income taxes..................... 6,421
Unamortized debt expense.............................. 18
Other................................................. 4,562
--------------
11,001
--------------
Total Assets...................................... $ 2,338,420
==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
(Unaudited)
September 30,
1999
--------------
(Thousands
of Dollars)
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common shares, $5.00 par value--Authorized
225,000,000 shares; 137,237,564 shares issued and
131,446,727 shares outstanding...................... $ 686,188
Capital surplus, paid in............................. 940,405
Deferred benefit plan--employee stock
ownership plan...................................... (131,185)
Retained earnings.................................... 597,505
Accumulated other comprehensive income............... 1,523
--------------
Total common shareholders' equity.................. 2,094,436
Long-term debt....................................... 152,000
--------------
Total capitalization.......................... 2,246,436
--------------
Current Liabilities:
Notes payable........................................ 10,000
Accounts payable..................................... 43,488
Accounts payable to affiliated companies............. 1,108
Long term debt--current portion...................... 19,000
Accrued interest..................................... 4,220
Dividends declared................................... 13,723
Other................................................ 1
--------------
91,540
--------------
Other Deferred Credits................................. 444
--------------
Total Capitalization and Liabilities............. $ 2,338,420
==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
September 30, September 30,
1999 1999
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
<S> <C> <C>
Operating Revenues.................................. $ 0 $ 0
-------------- --------------
Operating Expenses:
Operation expense................................. 1,558 2,440
Federal and state income taxes.................... (1,387) (6,214)
Taxes other than income taxes..................... 19 10
-------------- --------------
Total operating expenses..................... 190 (3,764)
-------------- --------------
Operating (Loss)/Income............................. (190) 3,764
-------------- --------------
Other Income:
Equity in earnings of subsidiaries................ 29,500 57,455
Equity in earnings of transmission companies...... 720 1,995
Other, net........................................ 1,783 (314)
Income taxes...................................... 3,347 (1,429)
-------------- --------------
Other income, net............................ 35,350 57,707
-------------- --------------
Income before interest charges............... 35,160 61,471
-------------- --------------
Interest Charges:
Interest on long-term debt........................ 3,678 11,119
Other interest.................................... 264 462
-------------- --------------
Interest charges............................ 3,942 11,581
-------------- --------------
Net Income for Common Shares........................ $ 31,218 $ 49,890
============== ==============
Earnings per Common Share........................... $ 0.24 $ 0.38
============== ==============
Common Shares Outstanding (average) 131,525,509 131,317,964
============== ==============
</TABLE>
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of the results of operations for the period shown have
been made.
Northeast Utilities
Select Energy, Inc.
Select Energy Portland Pipeline, Inc.
Northeast Generation Services Company
Notes to Financial Statements (Unaudited)
1. About Northeast Utilities
Northeast Utilities (NU) is the parent company of the Northeast Utilities
system (the NU system). The NU system furnishes franchised retail electric
service in Connecticut, New Hampshire and western Massachusetts through
three wholly owned subsidiaries: The Connecticut Light and Power Company
(CL&P), Public Service Company of New Hampshire (PSNH) and Western
Massachusetts Electric Company (WMECO). Another wholly owned subsidiary,
North Atlantic Energy Corporation (NAEC), sells all of its entitlement to
the capacity and output of the Seabrook nuclear power plant to PSNH under
two life-of-unit, full cost recovery contracts. A fifth wholly owned
subsidiary, Holyoke Water Power Company (HWP), is also engaged in the
production and distribution of electric power. The NU system also
furnishes firm and other wholesale electric services to various
municipalities and other utilities, and participates in retail access
programs, providing retail electric service. The NU system serves in
excess of 30 percent of New England's electric needs and is one of the 24
largest electric utility systems in the country as measured by revenues.
Several wholly owned subsidiaries of NU provide support services
for the NU system companies and, in some cases, for other New
England utilities. The Northeast Utilities Service Company
provides centralized accounting, administrative, information
resources, engineering, financial, legal, operational, planning,
purchasing and other services to the NU system companies.
Northeast Nuclear Energy Company acts as agent for the NU system
companies and other New England utilities in operating the
Millstone nuclear generating facilities. North Atlantic Energy
Service Corporation has operational responsibility for the
Seabrook nuclear generating facility. Three other subsidiaries
construct, acquire or lease some of the property and facilities
used by the NU system companies.
Charter Oak Energy, Inc. (COE), HEC, Inc. (HEC), Mode 1
Communications, Inc, (Mode 1), Select Energy, Inc. (Select
Energy), NU Enterprises, Inc. (NUEI), Northeast Generation
Company (NGC), Northeast Generation Services Company (NGS) and
Select Energy Portland Pipeline, Inc. (SEPPI), are other NU
system companies which engage in a variety of activities.
Directly and through subsidiaries, COE has an investment in a
foreign utility company as permitted under the Energy Policy Act
of 1992. This investment is accounted for on an equity basis
based upon COE's level of participation. NU has put COE up for sale.
NUEI, a direct subsidiary of Northeast Utilities, acts as the
holding company for the NU system's other unregulated businesses.
HEC provides energy management services for the NU system's and
other utilities' commercial, industrial and institutional
electric customers.
Mode 1 develops and invests in telecommunications activities.
NGC is engaged in the acquisition of non-nuclear generating
plants.
Select Energy, NGS, and SEPPI are "energy-related companies"
under Rule 58.
2. About Select Energy
NU organized NUSCO Energy Partners, Inc. (NEP), in 1996. NEP
acquired PSNH's interest in the New Hampshire retail electric
competition pilot program in late 1996. During 1997, NEP changed
its name to Select Energy, Inc. Select Energy received approval
from the Federal Energy Regulatory Commission (FERC) to become a
competitive wholesale power marketer effective December 1, 1998.
Select Energy is a subsidiary of NUEI.
Select Energy provides both wholesale and retail energy, and
energy services in the Northeast. In addition, Select Energy
markets natural gas and develops and markets energy-related
products and services in order to enhance its core electric
service offerings and customer relationships. Select Energy has
established strategic alliances with other companies in various
energy-related fields including fuel supply and management, power
quality, energy efficiency and load management services.
Select Energy is in the process of obtaining regulatory approval
to provide retail electric supply in the newly-deregulated 11-
state region from Maine to Maryland. Select Energy has recently
received approval from Delaware, Maine and New Jersey, and was
the first energy supplier to apply for a license to sell
electricity in Connecticut commencing January 1, 2000. Select
Energy also has a license to sell electricity in Massachusetts,
New Hampshire, New York, Pennsylvania, and Rhode Island and is a
registered gas marketer in Connecticut and also with certain
local distribution companies in Massachusetts, New Jersey, New
York, Pennsylvania, Rhode Island and New Hampshire.
3. About Northeast Generation Services Company
NGS, a subsidiary of NUEI, was formed on January 4, 1999. NGS
provides management, operations, and maintenance services to the
electric generation market and industrial and large commercial
customers in the 11-state region. NGS also provides consulting
services which includes engineering, construction management,
permitting and compliance management.
4. About Select Energy Portland Pipeline, Inc.
SEPPI, another subsidiary of NUEI, was formed for the purpose of
acquiring a 5% interest in the Portland Natural Gas Transmission
System (PNGTS) partnership. Coincident with that acquisition,
Select Energy agreed to purchase capacity of 30,000 mcf/day for a
20-year term.
5. Public Utility Regulation
NU is registered with the Securities and Exchange Commission
(SEC) as a holding company under the Public Utility Holding
Company Act of 1935 (1935 Act). NU and its subsidiaries are
subject to the provisions of the 1935 Act. Arrangements among
the NU system companies, outside agencies and other utilities
covering interconnections, interchange of electric power and
sales of utility property are subject to regulation by the FERC
and/or the SEC. The NU system operating subsidiaries are subject
to further regulation for rates, accounting and other matters by
the FERC and/or applicable state regulatory commissions.
6. Presentation
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
7. Special Deposits
Special deposits include cash collateral posted by the company
should Select Energy become delinquent in payments under various
power purchase and sales agreements. The balance of special
deposits on Select Energy's balance sheet at September 30, 1999
was approximately $8.3 million.
8. Advance from Parent
Select Energy received a cash advance of $19.4 million from NUEI
on June 30, 1999. Select Energy intends to repay the advance
upon acquisition of external financing at an unspecified date in
the future. No interest is being accrued on this transaction.
QUARTERLY REPORT OF SELECT ENERGY, INC.
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.
NORTHEAST UTILITIES
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(Registered Holding Company)
By: /s/ John J. Roman
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(Signature of Signing Officer)
John J. Roman
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Vice President and Controller
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Date: November 24, 1999
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