REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Board of Directors of the Providence Gas
Company:
We have audited the accompanying consolidated
balance sheets and the consolidated statements of
capitalization of PROVIDENCE GAS COMPANY (a Rhode
Island corporation and a wholly owned subsidiary of
Providence Energy Corporation) as of September 30, 1995
and 1994, and the related consolidated statements of
income, changes in common stockholder's investment and
cash flows for each of the three years in the period
ended September 30, 1995. These financial statements
and the schedule referred to below are the
responsibility of the Company's management. Our
responsibility is to express an opinion on these
financial statements and the schedule based on our
audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the
accounting principles used and significant estimates
made by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial
statements referred to above present fairly, in all
material respects, the financial position of Providence
Gas Company as of September 30, 1995 and 1994, and the
results of its operations and its cash flows for each
of the three years in the period ended September 30,
1995, in conformity with generally accepted accounting
principles.
As discussed in Notes 2 and 5 to the accompanying
financial statements, effective October 1, 1993, the
Company changed its method of accounting for income
taxes and post-retirement benefits other than pensions.
Our audits were made for the purpose of forming an
opinion on the basic financial statements taken as a
whole. The schedules listed in the accompanying index
to the financial statements is presented for purposes
of complying with the Securities and Exchange
Commission's rules and is not part of the basic
financial statements. This schedule has been subjected
to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, fairly
states, in all material respects, the financial data
required to be set forth therein, in relation to the
basic financial statements taken as a whole.
Arthur Andersen LLP
Boston, Massachusetts
November 17, 1995
II-24
