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 June 30, 2000
Northeast Utilities
-----------------------------------
(Name of registered holding company)
107 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> <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
HEC Inc. Energy 6/19/90 Massachusetts 100% by Invest in (E)
NU energy-related
Enterprises, Inc. activities
Reeds Ferry Energy 7/15/64 New 100% by Invest in (F)
Supply Co., Inc. Hampshire HEC Inc. energy-related
activities
HEC/Tobyhanna Energy 9/28/99 Massachusetts 100% by Invest in (G)
Energy Project, HEC Inc. energy-related
Inc. activities
Select Energy Energy 10/12/94 Massachusetts 100% by Invest in (H)
Contracting, Inc. HEC Inc. energy-related
activities
Yankee Energy Holding 2/15/00 Connecticut 100% by Public (I)
System Inc. Northeast Utility
Utilities Holding
Company
Yankee Energy Energy 7/2/93 Connecticut 100% by Invest in (J)
Services Company Yankee Energy energy-related
System Inc. activities
Housatonic Energy 10/16/87 Connecticut 100% by Invest in (K)
Corporation Yankee Energy energy-related
System Inc. activities
*Southbridge Energy 12/29/97 Delaware 95% by Operate and (L)
Power & Yankee Energy maintain a
Thermal, LLC Services Company cogeneration
5% by facility
Housatonic
Corporation
R.M. Energy 11/22/94 Connecticut 100% by Invest in (M)
Services, Inc. Yankee Energy energy-related
System Inc. activities
*Sold in June 2000.
</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, Inc. (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 Connecticut, Delaware, Maine, Massachusetts,
New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and
Maryland. Select Energy is a registered gas marketer with specific local
distribution companies in the states of Connecticut, Maine, Maryland,
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, and
Rhode Island.
(C) Select Energy Portland Pipeline, Inc. (SEPPI) acquired a 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.
(E) HEC 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.
(F) Reed's Ferry Supply Corporation was purchased by HEC Inc. in August 1999 as
an equipment wholesaler to purchase equipment on behalf of Select Energy
Contracting Inc.
(G) Effective September 30, 1999, HEC/Tobyhanna Energy Project, Inc. was
established as a special purpose entity to manage the assets of an Energy
Savings Performance Contract (ESPC) project at the Tobyhanna Army Depot.
(H) Select Energy Contracting, Inc. designs, manages and directs the
construction of, and/or installing of mechanical, water, and electrical
systems, energy and other resource consuming equipment.
(I) Yankee Energy System 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.
(J) Yankee Energy Services Company (YESCO) provides a wide range of energy-
related services for its customers. YESCO Controls division provides
comprehensive building automation with engineering, installation and
maintenance of building control systems. YESCO Mechanical Services
division provides comprehensive heating, ventilation and air-conditioning
(HVAC), boiler and refrigeration equipment services and installation.
YESCO Power division also provided expertise related to the production of
thermal and/or electric power.
(K) Housatonic Corporation is not a "reporting company" but is included in this
item 1 because it holds, directly or indirectly, voting securities issued
by reporting companies as indicated above.
(L) Southbridge Power & Thermal, LLC is a single purpose limited liability
company formed to operate and manage facilities at the Southbridge Business
Center located in Southbridge, MA., which provides electricity, thermal,
compressed air, heated, and wash-water to tenants at the center. These
utilities are included in the leases of tenants at the center.
(M) R.M. Services, Inc. provides consumer collection services for companies
throughout the United States.
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>
Select
Energy, Inc. No transactions this quarter.
Select
Energy
Portland
Pipeline, Inc. No transactions this quarter.
Northeast
Generation
Services
Company No transactions this quarter.
Select Energy
Contracting,
Inc. No transactions this quarter.
Reeds Ferry
Supply Co.,
Inc. No transactions this quarter.
HEC/Tobyhanna
Energy
Project, Inc. No transactions this quarter.
Yankee Energy
Services
Company No transactions this quarter.
Southbridge
Power &
Thermal, LLC No transactions this quarter.
R.M.
Services, Inc. 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 June 30, 2000
----------------------- ------------------- -------------- ------------------
(Thousands
of Dollars)
<S> <C> <C> <C>
Northeast Select
Generation Energy, Inc. Electrical and
Services Mechanical services ($4)
Company ======
Northeast Northeast
Generation Nuclear Energy Electrical and
Services Company Mechanical services $1,868
Company ======
Northeast The
Generation Connecticut
Services Light & Power Electrical and
Company Company Mechanical services $ 323
======
Northeast Public Service
Generation Company of Electrical and
Services New Hampshire Mechanical services $ 226
Company =======
Northeast Western
Generation Massachusetts Electrical and
Services Electric Company Mechanical services $ 66
Company ======
Northeast Holyoke Water
Generation Power Company Electrical and
Services Mechanical services $2,757
Company ======
Northeast Northeast
Generation Utilities Electrical and
Services Service Mechanical services $ 1
Company Company ======
Northeast Northeast
Generation Generation Electrical and
Services Company Mechanical services $5,356
Company ======
Wholesale
Reeds Ferry Select Energy Purchasing
Supply Co., Inc. Contracting, Inc. Services $ 210
======
Phone Center
R.M. Services, Inc. Yankee Gas Management
Services Company Services $ 173
======
</TABLE>
Part II - Transactions performed by associate companies on behalf
of reporting companies.
Total Amount
Billed*
Associate Reporting
Company Company Types of Three months
Rendering Receiving Services ended
Services Services Rendered June 30, 2000
----------------------- ------------ -------------- ----------------
(Thousands
of Dollars)
Public Service Company Select
of New Hampshire Energy, Inc. Miscellaneous $ 8
===
HEC INC. Select Engineering
Energy, Inc. Services $ 1
===
* 'Total Amount Billed' is direct costs only.
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
Investments in energy-related companies:
----------------------------------------
(Thousand of Dollars)
Total consolidated capitalization as of 06/30/00 $4,728,073 line 1
Total capitalization multiplied by 15%
(line 1 multiplied by .15) 709,211 line 2
Greater of $50 million or line 2 $709,211 line 3
Total current aggregate investment:
(categorized by major line of
energy-related business):
Select Energy, Inc. $55,933
Select Energy Portland Pipeline, Inc. 9,221
Northeast Generation Services Company (82)
Select Energy Contracting, Inc. 9,277
Reeds Ferry Supply Co., Inc. (11)
HEC/Tobyhanna Energy Project, Inc. 26,477
Yankee Energy Services Company 960
Southbridge Power & Thermal, LLC (195)
R.M. Services, Inc. 16,236
-----------
Total current aggregate investment 117,816 line 4
--------
Difference between the greater of $50 million or 15% of
capitalization and the total aggregate investment of the
registered holding company system $591,395 line 5
========
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 June 30, 2000
Income Statement-Three months and six months ended June 30, 2000
Select Energy Portland Pipeline, Inc.:
Balance Sheet - As of June 30, 2000
Income Statement-Three months and six months ended June 30, 2000
Northeast Generation Services Company:
Balance Sheet - As of June 30, 2000
Income Statement-Three months and six months ended June 30, 2000
Select Energy Contracting, Inc.:
Balance Sheet - As of June 30, 2000
Income Statement-Three months and six months ended June 30, 2000
Reeds Ferry Supply Co., Inc.:
Balance Sheet - As of June 30, 2000
Income Statement-Three months and six months ended June 30, 2000
HEC/Tobyhanna Energy Project, Inc.:
Balance Sheet - As of June 30, 2000
Income Statement-No activity through June 30, 2000
Yankee Energy Services Company:
Balance Sheet - As of June 30, 2000
Income Statement-Three months and four months ended June 30, 2000
Southbridge Power & Thermal, LLC:
Balance Sheet - As of June 30, 2000
Income Statement-Three months and four months ended June 30, 2000
R.M. Services, Inc.:
Balance Sheet - As of June 30, 2000
Income Statement-Three months and four months ended June 30, 2000
Northeast Utilities (PARENT):
Balance Sheet - As of June 30, 2000
Income Statement-Three months and six months ended June 30, 2000
B. Exhibits
Exhibit No. Description
----------- -----------
6.B.1.1 Copy of contract required by Item 3-filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.2 Copy of contract required by Item 3-filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.3a Copy of contract required by Item 3-filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.3b Copy of contract required by Item 3-filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.3c Copy of contract required by Item 3-filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.4 Copy of contract required by Item 3-filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5a Copy of contract required by Item 3-filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5b Copy of contract required by Item 3-filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5c Copy of contract required by Item 3-filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.6 Copy of contract required by Item 3-filed under confidential
treatment pursuant to Rule 104(b).
6.B.2.1 The company certifies that a conformed copy of Form U-9C-3
for the previous quarter was filed with the following state
commissions:
Ms. Louise E. Rickard
Acting 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)
June 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 27,395
Accounts receivable, including unbilled
revenues, net 178,664
Accounts receivable from affiliated companies 75,825
Taxes receivable 2,318
Special deposits 2,574
Unrealized gains on mark-to-market transactions 19,281
Prepayments and other 16,060
--------------
Total current assets 322,117
--------------
Deferred Charges:
Intangibles, net 22,622
Other 16,713
--------------
Total deferred charges 39,335
--------------
Long-Lived Assets:
Software 5,756
Other 288
--------------
6,044
Less: Accumulated provision for depreciation (1,566)
--------------
4,478
Capital additions in progress 2,961
--------------
Total long-lived assets 7,439
--------------
Total Assets $ 368,891
==============
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)
June 30,
2000
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 91,500
Advance from parent, non-interest bearing 29,400
Accounts payable 152,119
Accounts payable to affiliated companies 62,776
Accrued taxes 925
Other 5,638
--------------
Total current liablilities 342,358
--------------
Stockholders' Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Capital surplus, paid in 90,151
Retained deficit (63,618)
--------------
Total stockholders' equity 26,533
--------------
Total Liabilities and Stockholders' Equity $ 368,891
==============
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.
INCOME STATEMENT
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
2000 2000
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 436,914 $ 834,682
-------------- --------------
Operating Expenses:
Purchased power, net interchange
power and capacity 448,016 829,307
Depreciation 684 1,436
Other (2,051) 9,063
Taxes other than income taxes 1,286 2,439
-------------- --------------
Total operating expenses 447,935 842,245
-------------- --------------
Operating Loss (11,021) (7,563)
-------------- --------------
Other Income 106 606
-------------- --------------
Interest and financing costs 3,010 6,141
-------------- --------------
Loss before income taxes (13,925) (13,098)
-------------- --------------
Income Tax Benefit:
Federal and state income taxes, net (4,951) (4,624)
-------------- --------------
Net Loss $ (8,974) $ (8,474)
============== ==============
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)
June 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 359
--------------
Total current assets 359
--------------
Investments:
Other investments 9,553
--------------
Total investments 9,553
--------------
Total Assets $ 9,912
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable to affiliated companies $ 6
Accrued taxes 71
--------------
Total current liabilities 77
--------------
Deferred Credits:
Accumulated deferred income taxes 614
--------------
Total deferred credits 614
--------------
Stockholders' Equity:
Common stock, $1 par value - authorized
and outstanding 100 shares -
Capital surplus, paid in 9,257
Retained deficit (36)
--------------
Total stockholders' equity 9,221
--------------
Total Liabilities and Stockholders' Equity $ 9,912
==============
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 Six Months
Ended Ended
June 30, June 30,
2000 2000
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ - $ -
-------------- --------------
Operating Expenses:
Operation and maintenance 1 4
-------------- --------------
Total operating expenses 1 4
-------------- --------------
Operating Loss (1) (4)
-------------- --------------
Interest and financing costs 17 35
-------------- --------------
Loss before income taxes (18) (39)
-------------- --------------
Income Tax Benefit:
Federal and state income taxes, net (8) (16)
-------------- --------------
Net Loss $ (10) $ (23)
============== ==============
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)
June 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 14
Accounts receivable 571
Accounts receivable from affiliated companies 7,142
Taxes receivable 374
Fuel, materials and supplies, at average cost 113
Prepayments and other 282
--------------
Total current assets 8,496
--------------
Deferred Charges:
Accumulated deferred income taxes 1
Other 142
--------------
Total deferred charges 143
--------------
Total Assets $ 8,639
==============
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)
June 30,
2000
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 2,200
Accounts payable 2,322
Accounts payable to affiliated companies 3,608
Other 48
--------------
Total current liabilities 8,178
--------------
Deferred Credits:
Other 543
-------------
Stockholders' Equity:
Common stock, $1 par value - authorized
and outstanding 100 shares -
Capital surplus, paid in 2,010
Retained deficit (2,092)
--------------
Total stockholders' equity (82)
--------------
Total Liabilities and Stockholders' Equity $ 8,639
==============
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 Six Months
Ended Ended
June 30, June 30,
2000 2000
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 11,863 $ 17,824
-------------- --------------
Operating Expenses:
Operation and maintenance 12,576 18,729
Taxes other than income taxes 210 616
-------------- --------------
Total operating expenses 12,786 19,345
-------------- --------------
Operating Loss (923) (1,521)
-------------- --------------
Other Income 4 8
-------------- --------------
Interest and financing costs 36 59
-------------- --------------
Loss before income taxes (955) (1,572)
-------------- --------------
Income Tax Benefit:
Federal and state income taxes, net (364) (607)
-------------- --------------
Net Loss $ (591) $ (965)
============== ==============
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 CONTRACTING, INC.
BALANCE SHEET
(Unaudited)
June 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 392
Accounts receivable 3,187
Inventory 201
Prepayments and other 69
--------------
Total current assets 3,849
--------------
Long-Lived Assets:
Other 1,633
--------------
1,633
Less: Accumulated provision for depreciation (296)
--------------
1,337
Organization costs, net 11,421
--------------
Total long-lived assets 12,758
--------------
Total Assets $ 16,607
==============
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 CONTRACTING, INC.
BALANCE SHEET
(Unaudited)
June 30,
2000
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable $ 2,033
Accounts payable to affiliated companies 3,745
Accrued taxes 52
--------------
Total current liablilities 5,830
--------------
Long-term Liabilities:
Note payable 1,500
--------------
Stockholders' Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Capital surplus, paid in 9,010
Retained earnings 267
--------------
Total stockholders' equity 9,277
--------------
Total Liabilities and Stockholders' Equity $ 16,607
==============
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 CONTRACTING, INC.
INCOME STATEMENT
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
2000 2000
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 5,366 $ 8,522
-------------- --------------
Operating Expenses:
Other 4,571 7,665
Amortization 106 311
-------------- --------------
Total operating expenses 4,677 7,976
-------------- --------------
Operating Income 689 546
-------------- --------------
Other Loss (11) (17)
-------------- --------------
Interest and financing costs 98 192
-------------- --------------
Income before income taxes 602 371
-------------- --------------
Income Tax Expense:
Federal and state income taxes, net 180 180
-------------- --------------
Net Income $ 422 $ 191
============== ==============
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.
REEDS FERRY SUPPLY CO., INC.
BALANCE SHEET
(Unaudited)
June 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 7
Accounts receivable 42
--------------
Total current assets 49
--------------
Long-Lived Assets:
Organization costs, net 277
--------------
Total long-lived assets 277
--------------
Total Assets $ 326
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable to associated companies $ 337
--------------
Total current liabilities 337
--------------
Stockholders' Equity:
Common stock, $0 par value - authorized
and outstanding 100 shares -
Capital surplus, paid in 4
Retained deficit (15)
--------------
Total stockholders' equity (11)
--------------
Total Liabilities and Stockholders' Equity $ 326
==============
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.
REEDS FERRY SUPPLY CO., INC.
INCOME STATEMENT
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
2000 2000
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 210 $ 468
-------------- --------------
Operating Expenses:
Other 210 468
Amortization 5 10
-------------- --------------
Total operating expenses 215 478
-------------- --------------
Operating Loss (5) (10)
-------------- --------------
Net Loss $ (5) $ (10)
============== ==============
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.
HEC/TOBYHANNA ENERGY PROJECT, INC.
BALANCE SHEET
(Unaudited)
June 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Fixed Assets:
Other $ 20,431
--------------
20,431
Less: Accumulated provision for depreciation (24)
--------------
Total fixed assets 20,407
--------------
Special deposits 5,842
--------------
Current Assets:
Accounts receivable from affiliated companies 985
--------------
Total Assets $ 27,234
==============
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock, $1 par value - authorized
and outstanding 100 shares $ -
Capital surplus, paid in -
Retained earnings -
--------------
Total common stockholder's equity 0
Long-term debt 26,477
--------------
Total capitalization 26,477
--------------
Current Liabilities:
Accrued Interest 757
--------------
Total Capitalization and Liabilities $ 27,234
==============
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.
YANKEE ENERGY SERVICES COMPANY
BALANCE SHEET
(Unaudited)
June 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Other Property and Investments:
Nonutility property, at cost $ 5,034
Investment in subsidiary company, at equity 2
--------------
Total other property and investments 5,036
--------------
Current Assets:
Cash 60
Accounts receivable 683
Accounts receivable from affiliated companies 32
Taxes receivable 1,347
Fuel, materials and supplies, at average cost 210
--------------
Total current assets 2,332
--------------
Deferred Charges:
Accumulated deferred income taxes 1,298
Goodwill 410
Other 12,266
--------------
Total deferred charges 13,974
--------------
Total Assets $ 21,342
==============
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.
YANKEE ENERGY SERVICES COMPANY
BALANCE SHEET
(Unaudited)
June 30,
2000
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 20,100
Accounts payable 9
Accounts payable to affiliated companies 43
Other 137
--------------
Total current liablilities 20,289
--------------
Deferred Credits:
Other 93
--------------
Total deferred credits 93
--------------
Stockholders' Equity:
Common stock, $0 par value - 10,000 shares
authorized and 200 shares outstanding $ 1
Capital surplus, paid in 1,638
Retained deficit (679)
--------------
Total stockholders' equity 960
--------------
Total Liabilities and Stockholders' Equity $ 21,342
==============
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.
YANKEE ENERGY SERVICES COMPANY
INCOME STATEMENT
(Unaudited)
Four Months
Three Months Ended
Ended June 30,
June 30, 2000
2000 (a)
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 1,848 $ 3,731
-------------- --------------
Operating Expenses:
Other 1,961 4,258
Depreciation 183 275
-------------- --------------
Total operating expenses 2,144 4,533
-------------- --------------
Operating Loss (296) (802)
-------------- --------------
Other Income 270 518
-------------- --------------
Interest and financing costs 281 395
-------------- --------------
Net Loss $ (307) $ (679)
============== ==============
(a) Northeast Utilities acquired Yankee Energy System Inc. on March 1, 2000.
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.
SOUTHBRIDGE POWER & THERMAL, LLC
BALANCE SHEET
(Unaudited)
June 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 99
Accounts receivable 486
Accounts receivable from affiliated companies 38
Other 587
--------------
Total current assets 1,210
--------------
Total Assets $ 1,210
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 804
Accounts payable to affiliated companies 591
Other 10
--------------
Total current liabilities 1,405
--------------
Stockholders' Equity:
Common stock, $0 par value - authorized
and outstanding 200 shares -
Capital surplus, paid in 2
Retained deficit (197)
--------------
Total stockholders' equity (195)
--------------
Total Liabilities and Stockholders' Equity $ 1,210
==============
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.
SOUTHBRIDGE POWER & THERMAL, LLC
INCOME STATEMENT
(Unaudited)
Four Months
Three Months Ended
Ended June 30,
June 30, 2000
2000 (a)
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 936 $ 1,249
-------------- --------------
Operating Expenses:
Other 1,023 1,382
-------------- --------------
Total operating expenses 1,023 1,382
-------------- --------------
Operating Loss (87) (133)
-------------- --------------
Interest and financing costs 14 17
-------------- --------------
Loss before income taxes (101) (150)
-------------- --------------
Income Tax Expense:
Federal and state income taxes, net 54 71
-------------- --------------
Net Loss $ (155) $ (221)
============== ==============
(a) Northeast Utilities acquired Yankee Energy System Inc. on March 1, 2000.
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.
R.M. SERVICES, INC.
BALANCE SHEET
(Unaudited)
June 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Other Property and Investments:
Nonutility property, at cost $ 4,660
--------------
Total other property and investments 4,660
--------------
Current Assets:
Cash 7
Accounts receivable 1,966
Accounts receivable from affiliated companies 223
--------------
Total current assets 2,196
--------------
Deferred Charges:
Accumulated deferred income taxes 55
Goodwill 14,624
Other 236
--------------
Total deferred charges 14,915
--------------
Total Assets $ 21,771
==============
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.
R.M. SERVICES, INC.
BALANCE SHEET
(Unaudited)
June 30,
2000
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 2,127
Accounts payable 1,277
Accounts payable to affiliated companies 561
Accrued taxes 718
Other 115
--------------
Total current liabilities 4,798
--------------
Deferred Credits:
Other 737
--------------
Total deferred credits 737
--------------
Stockholders' Equity:
Common stock, $0 par value - 10,000 shares
authorized and 200 shares outstanding 1
Capital surplus, paid in 16,259
Retained deficit (24)
--------------
Total stockholders' equity 16,236
--------------
Total Liabilities and Stockholders' Equity $ 21,771
==============
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.
R.M. SERVICES, INC.
INCOME STATEMENT
(Unaudited)
Four Months
Three Months Ended
Ended June 30,
June 30, 2000
2000 (a)
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 2,237 $ 3,048
-------------- --------------
Operating Expenses:
Other 1,787 2,428
Depreciation 108 144
Taxes other than income taxes 5 7
-------------- --------------
Total operating expenses 1,900 2,579
-------------- --------------
Operating Income 337 469
-------------- --------------
Other Loss (307) (452)
-------------- --------------
Interest and financing costs 31 40
-------------- --------------
Loss before income taxes (1) (23)
-------------- --------------
Income Tax Expense:
Federal and state income taxes, net 2 1
-------------- --------------
Net Loss $ (3) $ (24)
============== ==============
(a) Northeast Utilities acquired Yankee Energy System Inc. on March 1, 2000.
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)
June 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Other Property and Investments:
Investments in subsidiary companies, at equity........ $ 2,867,678
Investments in transmission companies, at equity...... 16,320
Other, at cost........................................ 54
--------------
2,884,052
--------------
Current Assets:
Cash.................................................. 10,000
Notes receivable from affiliated companies............ 73,200
Notes and accounts receivable......................... 553
Accounts receivable from affiliated companies......... 1,664
Prepayments........................................... 22,311
--------------
107,728
--------------
Deferred Charges:
Unamortized debt expense.............................. 12
Other................................................. 5,182
--------------
5,194
--------------
Total Assets...................................... $ 2,996,974
==============
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)
June 30,
2000
--------------
(Thousands
of Dollars)
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common shares, $5.00 par value - Authorized
225,000,000 shares; 148,680,841 shares issued and
143,455,129 shares outstanding...................... $ 743,404
Capital surplus, paid in............................. 1,102,334
Deferred contribution plan - employee stock
ownership plan...................................... (121,381)
Retained earnings.................................... 639,973
Accumulated other comprehensive income............... 1,524
--------------
Total common shareholders' equity.................. 2,365,854
Long-term debt....................................... 132,000
--------------
Total capitalization.......................... 2,497,854
--------------
Current Liabilities:
Notes payable to banks............................... 426,000
Accounts payable..................................... 3,509
Accounts payable to affiliated companies............. 5,190
Long-term debt - current portion..................... 20,000
Accrued taxes........................................ 7,361
Accrued interest..................................... 3,842
Accrued Con Edison/Northeast Utilities merger fees... 3,007
Other................................................ 7
--------------
468,916
--------------
Accumulated deferred income taxes...................... 5,298
Other deferred credits................................. 24,906
--------------
30,204
--------------
Total Capitalization and Liabilities............. $ 2,996,974
==============
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.
<TABLE>
NORTHEAST UTILITIES (PARENT)
STATEMENT OF INCOME
(Unaudited)
<CAPTION>
Three Months Six Months
Ended Ended
June 30, June 30,
2000 2000
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
<S> <C> <C>
Operating Revenues.................................. $ 0 $ 0
-------------- --------------
Operating Expenses:
Operation expense................................. 8,843 13,890
Federal and state income taxes.................... 1,300 (4)
Taxes other than income taxes..................... (1) 6
-------------- --------------
Total operating expenses..................... 10,142 13,892
-------------- --------------
Operating Loss...................................... (10,142) (13,892)
-------------- --------------
Other Income:
Equity in earnings of subsidiaries................ 38,331 120,782
Equity in earnings of transmission companies...... 591 1,189
Other, net........................................ (2,530) (1,250)
Income taxes...................................... (360) -
-------------- --------------
Other income, net............................ 36,032 120,721
-------------- --------------
Income before interest charges............... 25,890 106,829
-------------- --------------
Interest Charges:
Interest on long-term debt........................ 3,247 6,577
Other interest.................................... 10,437 13,459
-------------- --------------
Interest charges............................ 13,684 20,036
-------------- --------------
Net Income for Common Shares........................ $ 12,206 $ 86,793
============== ==============
Basic Earnings per Common Share..................... $ 0.09 $ 0.62
============== ==============
Fully Diluted Earnings per Common Share............. $ 0.08 $ 0.62
============== ==============
Common Shares Outstanding (average) 143,284,493 139,476,432
============== ==============
</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.
See accompanying notes to financial statements.
Northeast Utilities
Select Energy, Inc.
Select Energy Portland Pipeline, Inc.
Northeast Generation Services Company
Select Energy Contracting, Inc.
Reeds Ferry Supply Co., Inc.
HEC/Tobyhanna Energy Project, Inc.
Yankee Energy Services Company
R.M. Services, Inc.
Southbridge Power & Thermal, LLC
Notes to Financial Statements (Unaudited)
1. About Northeast Utilities
Northeast Utilities (NU) is the parent company of the Northeast Utilities
system (NU system). The NU system's regulated utilities furnish 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, sells all of its entitlement to the capacity
and output of the Seabrook Station (Seabrook) nuclear unit to PSNH under the
terms of two life-of-unit, full cost recovery contracts. A fifth wholly owned
subsidiary, Holyoke Water Power Company, is also engaged in the production and
distribution of electric power.
Several wholly owned subsidiaries of NU provide support services for the NU
system companies and, in some cases, for other New England utilities.
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
units. North Atlantic Energy Service Corporation has operational
responsibility for Seabrook. Three other subsidiaries construct, acquire or
lease some of the property and facilities used by the NU system companies.
NU Enterprises, Inc. (NUEI) is a wholly owned subsidiary of NU and acts as a
holding company for NU's unregulated energy service companies. Select
Energy, Inc. (Select Energy), Select Energy Portland Pipeline, Inc. (SEPPI),
Northeast Generation Services Company (NGS), HEC Inc. (HEC), and Mode 1
Communications, Inc. engage in a variety of energy-related and
telecommunications activities, as applicable, primarily in the unregulated
energy retail and wholesale commodity, marketing and services fields. Select
Energy Contracting, Inc. (Select Energy Contracting), Reeds Ferry Supply Co.,
Inc. (Reeds Ferry) and the HEC/Tobyhanna Energy Project, Inc. (HEC/Tobyhanna)
are wholly owned subsidiaries of HEC. Northeast Generation Company (NGC) was
formed to acquire generating facilities.
Yankee Energy System, Inc. maintains certain wholly owned subsidiaries
including Yankee Energy Services Company (YESCO), R.M. Services, Inc. (R.M.
Services) and Southbridge Power & Thermal, LLC (Southbridge). Select Energy,
SEPPI, NGS, Select Energy Contracting, Reeds Ferry, HEC/Tobyhanna, YESCO,
R.M. Services, and Southbridge are "energy-related companies" under Rule 58.
2. About Select Energy
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 is a retail electricity supplier in the states of Connecticut,
Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New
York, Pennsylvania, and Rhode Island and is a registered gas marketer with
specific local distribution companies in the states of Connecticut, Maine,
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, and Rhode
Island.
Beginning in January 2000, Select Energy's contract with NGC, to purchase
1,289 megawatts (MW) of capacity and energy significantly reduced the load-
following risk and allowed Select Energy to better manage its portfolio
profitability. On January 1, 2000, Select Energy began serving one-half of
CL&P's standard offer requirement for a 4-year period. Select Energy's
obligation to service this load requirement was approximately 2,000 MW
beginning in July 2000, when 100 percent of CL&P's customers were able to
choose their electric supplier. In addition, beginning in January 2000,
Select Energy assumed responsibility for serving 30 market based wholesale
contracts, totaling approximately 500 MW, throughout New England with
electric energy supply that was previously provided by CL&P and WMECO.
3. About SEPPI
SEPPI was formed for the purpose of acquiring a five percent interest in the
Portland Natural Gas Transmission System partnership. Coincident with that
acquisition, Select Energy agreed to purchase capacity of 30,000 mcf/day for
a 20-year term.
4. About NGS
NGS was formed to provide management, operation and maintenance services to
the electric generation market, as well as to large industrial customers in
the Northeast. NGS also provides consulting services which include
engineering services, construction management, permitting, and compliance
management.
5. About Select Energy Contracting
Select Energy Contracting, formerly known as HEC International Corporation,
designs, manages, and directs the construction of, and/or installation of
mechanical, water and electrical systems, energy and other resource consuming
equipment.
6. About Reeds Ferry
Reeds Ferry was acquired by HEC in August 1999 as an equipment wholesaler to
purchase equipment on behalf of Select Energy Contracting.
7. About HEC/Tobyhanna
Effective September 30, 1999, HEC/Tobyhanna was established as a special
purpose entity to manage the assets of an Energy Savings Performance Contract
at the Tobyhanna Army Depot.
8. About YESCO
The YESCO controls division provides comprehensive building automation
through engineering, installation and maintenance of building control
systems. The YESCO mechanical services division provides comprehensive
heating, ventilation, air conditioning, and boiler and refrigeration
equipment services and installation.
9. About R.M. Services
R.M. Services provides consumer collection services for companies throughout
the United States.
10. About Southbridge
Southbridge was formed to operate and manage facilities at the Southbridge
Business Center (Center) located in Southbridge, Massachusetts and provides
electrical, thermal, compressed air, and heated and wash-water services to
tenants at the Center. These services were included in the leases of the
tenants at the Center. In June 2000, Southbridge was sold to an unaffiliated
company.
11. 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), and 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 Federal Energy
Regulatory Commission (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.
12. Presentation
The preparation of financial statements 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.
13. Commodity Derivatives
Select Energy, primarily through trading and marketing, manages its exposure
to risk from existing contractual commitments and provides risk management
services to its customers through forward contracts, futures, over-the
counter swap agreements, and options (collectively, "commodity derivatives").
Select Energy engages in the trading of commodity derivatives, and therefore
experiences net open positions. Select Energy manages these open positions
with strict policies which limit its exposure to market risk and requires
daily reporting to management of potential financial exposure. Commodity
derivatives utilized for trading purposes are accounted for using the mark-
to-market method, under Emerging Issues Task Force Issue No. 98-10,
"Accounting for Energy Trading and Risk Management Activities." Under this
methodology, these instruments are adjusted to market value, and the
unrealized gains and losses are recognized in income in the current period.
The mark-to-market position at June 30, 2000, was a positive $19.3 million.
14. Special Deposits
Special deposits include cash collateral posted in connection with various
power purchase and sales agreements.
15. Advance from Parent, Non-Interest Bearing
Select Energy received cash advances totaling $29.4 million from NUEI during
1999 and intends to repay the advances upon acquisition of external financing
at an unspecified date in the future. No interest is being accrued on these
transactions. No advances were received during the three months ended
June 30, 2000.
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
-----------------------------
(Registered Holding Company)
By: /s/ John J. Roman
------------------------------
(Signature of Signing Officer)
John J. Roman
------------------------------
Vice President and Controller
------------------------------
Date: August 25, 2000
------------------------------
