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, 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
----------------- ------- ------------ ------------- ----------------- -------------- ----------
<C> <S> <S> <S> <S> <S> <S>
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
Acumentrics Energy 09/13/00 Massachusetts 5% by Invest in (N)
Corporation NU energy-related
(New) Enterprises, Inc. activities
ERI/HEC Energy 09/30/00 Delaware 50% by Invest in (O)
EFA-Med, LLC HEC Inc. energy-related
(New) activities
</TABLE>
*Sold in June 2000.
(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, Maryland, Massachusetts,
New Hampshire, New Jersey, New York, Pennsylvania, and Rhode Island.
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 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.
(N) Acumentrics Corporation develops, manufactures and distributes advanced
power generation, power quality and power protection devices including a
high-speed flywheel and advanced technology fuel cells.
(O) ERI/HEC EFA-Med, LLC is a Delaware limited liability company that was
formed by HEC Inc., and ERI Services, Inc. to enter into an indefinite
delivery/indefinite quantity with the U.S. Navy. Under the contract,
the Navy will issue Delivery Orders for energy services work at U.S.
Government facilities located in Bahrain, Greece, Egypt, Italy, Spain,
Turkey, and the United Kingdom. The LLC will designate either ERI or HEC
to perform each of the Delivery Orders. The LLC will also act as the
conduit for any project-related financing. ERI Services, Inc. and HEC Inc.
each own 50% of the LLC.
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
-------------- -------- ------------ -------- ------- ------------ ---------- ------------- ------------- ------------
<C> <S> <S> <S> <S> <S> <S> <S> <S> <S>
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.
Select
NU
Acumentrics Common Enterprises,
Corporation Stock $5,000,000 Issue N/A Inc. N/A $5,000,000 N/A N/A
ERI/HEC
EFA-Med, LLC N/A N/A N/A N/A N/A N/A N/A HEC Inc. $500
</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, 2000
----------------------- ------------------- -------------- ------------------
(Thousands
of Dollars)
<C> <S> <S> <S>
Northeast Select
Generation Energy, Inc. Electrical and
Services Mechanical services $1
Company ==================
Northeast Northeast
Generation Nuclear Energy Electrical and
Services Company Mechanical services $1,462
Company ==================
Northeast The
Generation Connecticut
Services Light & Power Electrical and
Company Company Mechanical services $36
==================
Northeast Public Service
Generation Company of Electrical and
Services New Hampshire Mechanical services $320
Company ==================
Northeast Holyoke Water
Generation Power Company Electrical and
Services Mechanical services $3,076
Company ==================
Northeast Northeast
Generation Generation Electrical and
Services Company Mechanical services $4,652
Company ==================
Wholesale
Reeds Ferry Select Energy Purchasing
Supply Co., Inc. Contracting, Inc. Services $124
==================
Phone Center
R.M. Services, Inc. Yankee Gas Management
Services Company Services $173
==================
Northeast North Atlantic
Generation Energy Service Electrical and
Services Corporation Mechanical services $2
Company ==================
</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, 2000
----------------------- ------------------- -------------- ------------------
(Thousands
<C> <C> <C> <C>
Public Service Company Select
of New Hampshire Energy, Inc. Miscellaneous $17
==================
HEC INC. Select Engineering Services
Energy, Inc. $60
==================
* '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 09/30/00 $4,607,914 line 1
Total capitalization multiplied by 15%
(line 1 multiplied by .15) 691,187 line 2
Greater of $50 million or line 2 $691,187 line 3
Total current aggregate investment:
(categorized by major line of
energy-related business):
Select Energy, Inc. $51,676
Select Energy Portland Pipeline, Inc. 9,219
Northeast Generation Services Company 347
Select Energy Contracting, Inc. 9,435
Reeds Ferry Supply Co., Inc. (16)
HEC/Tobyhanna Energy Project, Inc. 26,594
Yankee Energy Services Company 791
Southbridge Power & Thermal, LLC (240)
R.M. Services, Inc. 16,135
Acumentrics Corporation 5,000
ERI/HEC EFA-Med, LLC 1
-----------
Total current aggregate investment 118,942 line 4
---------
Difference between the greater of $50 million or 15% of
capitalization and the total aggregate investment of the
registered holding company system $572,245 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 September 30, 2000
Income Statement-Three months and nine months ended September 30, 2000
Select Energy Portland Pipeline, Inc.:
Balance Sheet - As of September 30, 2000
Income Statement-Three months and nine months ended September 30, 2000
Northeast Generation Services Company:
Balance Sheet - As of September 30, 2000
Income Statement-Three months and nine months ended September 30, 2000
Select Energy Contracting, Inc.:
Balance Sheet - As of September 30, 2000
Income Statement-Three months and nine months ended September 30, 2000
Reeds Ferry Supply Co., Inc.:
Balance Sheet - As of September 30, 2000
Income Statement-Three months and nine months ended September 30, 2000
HEC/Tobyhanna Energy Project, Inc.:
Balance Sheet - As of September 30, 2000
Income Statement-Three months and nine months ended September 30, 2000
Yankee Energy Services Company:
Balance Sheet - As of September 30, 2000
Income Statement-Three months and seven months ended September 30, 2000
Southbridge Power & Thermal, LLC:
Balance Sheet - As of September 30, 2000
Income Statement-Three months and seven months ended September 30, 2000
R.M. Services, Inc.:
Balance Sheet - As of September 30, 2000
Income Statement-Three months and seven months ended September 30, 2000
ERI/HEC EFA-Med, LLC:
Not Available as of September 30, 2000
Northeast Utilities (PARENT):
Balance Sheet - As of September 30, 2000
Income Statement-Three months and nine months ended September 30, 2000
B. Exhibits
Exhibit No. Description
----------- -----------
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)
September 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 268
Accounts receivable, including unbilled
revenues, net 136,792
Accounts receivable from affiliated companies 118,533
Taxes receivable 431
Special deposits 12,739
Unrealized gains on mark-to-market transactions 7,020
Prepayments and other 5,859
--------------
Total current assets 281,642
--------------
Deferred Charges:
Intangibles, net 22,180
Other 20,091
--------------
Total deferred charges 42,271
--------------
Long-Lived Assets:
Software 5,897
Other 282
--------------
6,179
Less: Accumulated provision for depreciation (1,782)
--------------
4,397
Capital additions in progress 4,757
--------------
Total long-lived assets 9,154
--------------
Total Assets $ 333,067
==============
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,
2000
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 87,100
Advance from parent, non-interest bearing 29,400
Accounts payable 117,340
Accounts payable to affiliated companies 66,477
Accrued taxes 4,924
Other 5,550
--------------
Total current liabilities 310,791
--------------
Stockholders' Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Capital surplus, paid in 90,151
Retained deficit (67,875)
--------------
Total stockholders' equity 22,276
--------------
Total Liabilities and Stockholders' Equity $ 333,067
==============
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 Nine Months
Ended Ended
September 30, September 30,
2000 2000
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 546,313 $ 1,380,995
-------------- --------------
Operating Expenses:
Purchased power, net interchange
power and capacity 520,810 1,350,117
Depreciation 658 2,094
Other 29,201 38,264
Taxes other than income taxes 1,145 3,584
-------------- --------------
Total operating expenses 551,814 1,394,059
-------------- --------------
Operating Loss (5,501) (13,064)
-------------- --------------
Other Income 35 641
-------------- --------------
Interest and financing costs 2,034 8,175
-------------- --------------
Loss before income taxes (7,500) (20,598)
-------------- --------------
Income Tax Benefit:
Federal and state income taxes, net (3,244) (7,868)
-------------- --------------
Net Loss $ (4,256) $ (12,730)
============== ==============
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,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 351
Taxes receivable 44
--------------
Total current assets 395
--------------
Investments:
Other investments 9,553
--------------
Total investments 9,553
--------------
Total Assets $ 9,948
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Deferred Credits:
Accumulated deferred income taxes $ 729
--------------
Total deferred credits 729
--------------
Stockholders' Equity:
Common stock, $1 par value - authorized
and outstanding 100 shares -
Capital surplus, paid in 9,257
Retained deficit (38)
--------------
Total stockholders' equity 9,219
--------------
Total Liabilities and Stockholders' Equity $ 9,948
==============
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,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 320
Accounts receivable 53
Accounts receivable from affiliated companies 8,442
Fuel, materials and supplies, at average cost 167
Prepayments and other 318
--------------
Total current assets 9,300
--------------
Deferred Charges:
Accumulated deferred income taxes 1
Other 267
--------------
Total deferred charges 268
--------------
Long-Lived Assets:
Capital additions in progress 115
--------------
Total Assets $ 9,683
==============
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,
2000
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 2,100
Accounts payable 579
Accounts payable to affiliated companies 4,462
Accrued taxes 1,984
Other 6
--------------
Total current liabilities 9,131
--------------
Deferred Credits:
Other 205
--------------
Stockholders' Equity:
Common stock, $1 par value - authorized
and outstanding 100 shares -
Capital surplus, paid in 2,010
Retained deficit (1,663)
--------------
Total stockholders' equity 347
--------------
Total Liabilities and Stockholders' Equity $ 9,683
==============
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,
2000 2000
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 12,272 $ 30,096
-------------- --------------
Operating Expenses:
Operation and maintenance 11,452 30,181
Taxes other than income taxes 70 686
-------------- --------------
Total operating expenses 11,522 30,867
-------------- --------------
Operating Income/(Loss) 750 (771)
-------------- --------------
Other (Loss)/Income (7) 1
-------------- --------------
Interest and financing costs 58 117
-------------- --------------
Income/(loss) before income taxes 685 (887)
-------------- --------------
Income Tax Expense/(Benefit):
Federal and state income taxes, net 256 (351)
-------------- --------------
Net Income/(Loss) $ 429 $ (536)
============== ==============
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)
September 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 374
Accounts receivable 2,909
Inventory 173
Prepayments and other 93
--------------
Total current assets 3,549
--------------
Long-Lived Assets:
Other 1,700
--------------
1,700
Less: Accumulated provision for depreciation (377)
--------------
1,323
Organization costs, net 11,266
--------------
Total long-lived assets 12,589
--------------
Total Assets $ 16,138
==============
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)
September 30,
2000
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable $ 1,896
Accounts payable to affiliated companies 3,639
Accrued taxes 101
--------------
Total current liabilities 5,636
--------------
Long-term Liabilities:
Note payable 1,000
Deferred taxes 67
--------------
Total long-term liabilities 1,067
--------------
Stockholders' Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Capital surplus, paid in 9,010
Retained earnings 425
--------------
Total stockholders' equity 9,435
--------------
Total Liabilities and Stockholders' Equity $ 16,138
==============
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 Nine Months
Ended Ended
September 30, September 30,
2000 2000
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 4,396 $ 12,918
-------------- --------------
Operating Expenses:
Other 3,958 11,623
Amortization 156 467
-------------- --------------
Total operating expenses 4,114 12,090
-------------- --------------
Operating Income 282 828
-------------- --------------
Other Income 15 32
-------------- --------------
Interest and financing costs 92 284
-------------- --------------
Income before income taxes 205 576
-------------- --------------
Income Tax Expense:
Federal and state income taxes, net 48 228
-------------- --------------
Net Income $ 157 $ 348
============== ==============
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)
September 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 7
Accounts receivable 63
--------------
Total current assets 70
--------------
Long-Lived Assets:
Organization costs, net 272
--------------
Total long-lived assets 272
--------------
Total Assets $ 342
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable $ 63
Accounts payable to associated companies 295
--------------
Total current liabilities 358
--------------
Stockholders' Equity:
Common stock, $0 par value - authorized
and outstanding 100 shares -
Capital surplus, paid in 4
Retained deficit (20)
--------------
Total stockholders' equity (16)
--------------
Total Liabilities and Stockholders' Equity $ 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.
REEDS FERRY SUPPLY CO., INC.
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2000 2000
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 124 $ 592
-------------- --------------
Operating Expenses:
Other 124 592
Amortization 5 15
-------------- --------------
Total operating expenses 129 607
-------------- --------------
Operating Loss (5) (15)
-------------- --------------
Net Loss $ (5) $ (15)
============== ==============
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)
September 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 6,015
Accounts receivable 417
Accounts receivable from affiliated companies 268
--------------
Total current assets 6,700
--------------
Long-Lived Assets:
Other 20,179
--------------
20,179
Less: Accumulated provision for depreciation (32)
--------------
Total long-lived assets 20,147
--------------
Total Assets $ 26,847
==============
CAPITALIZATION AND LIABILITIES
------------------------------------
Capitalization:
Common stock, $1 par value - authorized
and outstanding 100 shares $ -
Capital surplus, paid in -
Retained earnings 117
--------------
Total common stockholder's equity 117
Long-term debt 26,477
--------------
Total capitalization 26,594
--------------
Current Liabilities:
Accrued Interest 253
--------------
Total Capitalization and Liabilities $ 26,847
==============
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.
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2000 2000
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Other Income $ 459 $ 459
-------------- --------------
Interest and financing costs 342 342
-------------- --------------
Net Income $ 117 $ 117
============== ==============
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)
September 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Other Property and Investments:
Nonutility property, at cost $ 4,939
Investment in subsidiary company, at equity 2
--------------
Total other property and investments 4,941
--------------
Current Assets:
Accounts receivable 811
Accounts receivable from affiliated companies 11
Taxes receivable 1,439
Fuel, materials and supplies, at average cost 210
--------------
Total current assets 2,471
--------------
Deferred Charges:
Accumulated deferred income taxes 1,298
Goodwill 433
Miscellaneous work in progress 13,198
Other 550
--------------
Total deferred charges 15,479
--------------
Total Assets $ 22,891
==============
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.
YANKEE ENERGY SERVICES COMPANY
BALANCE SHEET
(Unaudited)
September 30,
2000
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 21,830
Accounts payable 7
Accounts payable to affiliated companies 32
Other 138
--------------
Total current liabilities 22,007
--------------
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 1,592
Retained deficit (802)
--------------
Total stockholders' equity 791
--------------
Total Liabilities and Stockholders' Equity $ 22,891
==============
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.
YANKEE ENERGY SERVICES COMPANY
INCOME STATEMENT
(Unaudited)
Seven Months
Three Months Ended
Ended September 30,
September 30, 2000
2000 (a)
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 374 $ 4,105
-------------- --------------
Operating Expenses:
Other 156 4,414
Depreciation 93 368
-------------- --------------
Total operating expenses 249 4,782
-------------- --------------
Operating Income/(Loss) 125 (677)
-------------- --------------
Other Income 30 548
-------------- --------------
Interest and financing costs 278 673
-------------- --------------
Net Loss $ (123) $ (802)
============== ==============
(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)
September 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Accounts receivable $ 125
Other 591
--------------
Total current assets 716
--------------
Total Assets $ 716
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 345
Accounts payable to affiliated companies 587
Other 24
--------------
Total current liabilities 956
--------------
Stockholders' Equity:
Common stock, $0 par value - authorized
and outstanding 200 shares -
Capital surplus, paid in 2
Retained deficit (242)
--------------
Total stockholders' equity (240)
--------------
Total Liabilities and Stockholders' Equity $ 716
==============
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)
Seven Months
Three Months Ended
Ended September 30,
September 30, 2000
2000 (a)
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ - $ 1,249
-------------- --------------
Operating Expenses:
Other 25 1,407
-------------- --------------
Total operating expenses 25 1,407
-------------- --------------
Operating Loss (25) (158)
-------------- --------------
Interest and financing costs 8 25
-------------- --------------
Loss before income taxes (33) (183)
-------------- --------------
Income Tax Expense:
Federal and state income taxes, net 13 84
-------------- --------------
Net Loss $ (46) $ (267)
============== ==============
(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)
September 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Other Property and Investments:
Nonutility property, at cost $ 4,398
--------------
Total other property and investments 4,398
--------------
Current Assets:
Cash 8
Accounts receivable 706
Accounts receivable from affiliated companies 220
--------------
Total current assets 934
--------------
Deferred Charges:
Accumulated deferred income taxes 55
Goodwill 14,576
Other 226
--------------
Total deferred charges 14,857
--------------
Total Assets $ 20,189
==============
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)
September 30,
2000
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 2,074
Accounts payable 351
Accounts payable to affiliated companies 176
Accrued taxes 680
Other 121
--------------
Total current liabilities 3,402
--------------
Deferred Credits:
Other 652
--------------
Total deferred credits 652
--------------
Stockholders' Equity:
Common stock, $0 par value - 10,000 shares
authorized and 200 shares outstanding 1
Capital surplus, paid in 16,398
Retained deficit (264)
--------------
Total stockholders' equity 16,135
--------------
Total Liabilities and Stockholders' Equity $ 20,189
==============
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)
Seven Months
Three Months Ended
Ended September 30,
September 30, 2000
2000 (a)
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
Operating Revenues $ 1,893 $ 4,941
-------------- --------------
Operating Expenses:
Other 1,650 4,078
Depreciation 262 406
Taxes other than income taxes 25 32
-------------- --------------
Total operating expenses 1,937 4,516
-------------- --------------
Operating (Loss)/Income (44) 425
-------------- --------------
Other Loss (150) (602)
-------------- --------------
Interest and financing costs 45 85
-------------- --------------
Loss before income taxes (239) (262)
-------------- --------------
Income Tax Expense:
Federal and state income taxes, net 1 2
-------------- --------------
Net Loss $ (240) $ (264)
============== ==============
(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)
September 30,
2000
--------------
(Thousands
of Dollars)
ASSETS
------
Other Property and Investments:
Investments in subsidiary companies, at equity........ $ 2,877,833
Investments in transmission companies, at equity...... 14,986
Other, at cost........................................ 54
--------------
2,892,873
--------------
Current Assets:
Cash.................................................. 1,860
Notes receivable from affiliated companies............ 69,300
Notes and accounts receivable......................... 590
Accounts receivable from affiliated companies......... 52,203
Prepayments........................................... 21,335
--------------
145,288
--------------
Deferred Charges:
Unamortized debt expense.............................. 13
Other................................................. 1,722
--------------
1,735
--------------
Total Assets...................................... $ 3,039,896
==============
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,
2000
--------------
(Thousands
of Dollars)
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common shares, $5.00 par value - Authorized
225,000,000 shares; 148,695,939 shares issued and
143,590,018 shares outstanding...................... $ 743,480
Capital surplus, paid in............................. 1,094,996
Deferred contribution plan - employee stock
ownership plan...................................... (118,554)
Retained earnings.................................... 691,164
Accumulated other comprehensive income............... 2,699
--------------
Total common shareholders' equity.................. 2,413,785
Long-term debt....................................... 130,826
--------------
Total capitalization.......................... 2,544,611
--------------
Current Liabilities:
Notes payable to banks............................... 426,000
Accounts payable..................................... 99
Accounts payable to affiliated companies............. 603
Long-term debt - current portion..................... 20,000
Accrued taxes........................................ 7,362
Accrued interest..................................... 8,112
Accrued Con Edison/Northeast Utilities merger fees... 3,007
Other................................................ 7
--------------
465,190
--------------
Accumulated deferred income taxes...................... 5,419
Other deferred credits................................. 24,676
--------------
30,095
--------------
Total Capitalization and Liabilities............. $ 3,039,896
==============
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,
2000 2000
-------------- --------------
(Thousands (Thousands
of Dollars) of Dollars)
<C> <S> <S>
Operating Revenues.................................. $ - $ -
-------------- --------------
Operating Expenses:
Operation expense................................. 1,715 15,605
Federal and state income taxes.................... 121 117
Taxes other than income taxes..................... - 6
-------------- --------------
Total operating expenses..................... 1,836 15,728
-------------- --------------
Operating Loss...................................... (1,836) (15,728)
-------------- --------------
Other Income:
Equity in earnings of subsidiaries................ 78,979 199,761
Equity in earnings of transmission companies...... 653 1,842
Other, net........................................ 2,289 1,039
-------------- --------------
Other income, net............................ 81,921 202,642
-------------- --------------
Income before interest charges............... 80,085 186,914
-------------- --------------
Interest Charges:
Interest on long-term debt........................ 3,246 9,823
Other interest.................................... 11,296 24,755
-------------- --------------
Interest charges............................ 14,542 34,578
-------------- --------------
Net Income for Common Shares........................ $ 65,543 $ 152,336
============== ==============
Basic Earnings per Common Share..................... $ 0.46 $ 1.08
============== ==============
Fully Diluted Earnings per Common Share............. $ 0.45 $ 1.08
============== ==============
Basic Common Shares Outstanding (average) 143,535,147 140,829,337
============== ==============
Fully Diluted Common Shares Outstanding (average) 144,189,458 141,449,402
============== ==============
</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.
ERI/HEC EFA-Med, LLC
Yankee Energy Services Company
R.M. Services, Inc.
Acumentrics Corporation
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.
Northeast Generation Company (NGC) was formed to acquire generating
facilities. 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. Another
company, ERI/HEC EFA-Med, LLC (ERI/HEC), is 50% owned by HEC.
Yankee Energy System, Inc. (Yankee) maintains certain wholly owned subsidiaries
including Yankee Energy Services Company (YESCO) and R.M. Services, Inc.
(R.M. Services). In June 2000, Southbridge Power & Thermal, LLC, another
wholly owned subsidiary of Yankee, was sold to an unaffiliated company.
On September 26, 2000, NUEI invested $10 million in Acumentrics Corporation
(Acumentrics) in return for a 5 percent ownership share of that company.
Select Energy, SEPPI, NGS, Select Energy Contracting, Reeds Ferry,
HEC/Tobyhanna, ERI/HEC, YESCO, R.M. Services, and Acumentrics 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, Maryland,
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 ERI/HEC
ERI/HEC was established on September 30, 2000, by HEC and ERI Services, Inc.
to enter into an indefinite delivery/indefinite quantity contract with the
United States Navy. ERI/HEC is 50% owned by HEC.
9. About YESCO
YESCO provides a wide range of energy-related services for its customers. The
YESCO controls division provides comprehensive building automation with
engineering, installation and maintenance of building control systems. The
YESCO power division also provides expertise related to the production of
thermal and/or electric power.
10. About R.M. Services
R.M. Services provides consumer collection services for companies throughout
the United States.
11. About Acumentrics
On September 26, 2000, NUEI invested $10 million in Acumentrics in return for
a 5 percent ownership share of that company. Acumentrics is a privately
owned producer of advanced power generation and power protection technologies
applicable to homes, telecommunications, commercial businesses, industrial
facilities, and the auto industry.
12. 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.
13. 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.
14. 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 September 30, 2000, was a positive $7 million.
15. Special Deposits
Special deposits include cash collateral posted in connection with various
power purchase and sales agreements.
16. 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
September 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: November 28, 2000
---------------------------------
