FORM U-13-60
MUTUAL AND SUBSIDIARY SERVICE COMPANIES
REVISED FEBRUARY 7, 1980
ANNUAL REPORT
FOR THE PERIOD
BEGINNING January 1, 1997 AND ENDING December 31, 1997
TO THE
U.S. SECURITIES AND EXCHANGE COMMISSION
OF
North Atlantic Energy Service Corporation
A Subsidiary SERVICE COMPANY
DATE OF INCORPORATION: April 1, 1992
STATE OR SOVEREIGN POWER UNDER WHICH INCORPORATED OR ORGANIZED: New Hampshire
LOCATION OF PRINCIPAL EXECUTIVE OFFICES OF REPORTING COMPANY:
Route 1, Lafayette Rd., Seabrook, NH, 03874
NAME, TITLE AND ADDRESS OF OFFICER TO WHOM CORRESPONDENCE CONCERNING THIS REPORT
SHOULD BE ADDRESSED:
John J. Roman V.P. & Controller P.O. Box 270, Hartford, Ct. 06141-0270
NAME OF PRINCIPAL HOLDING COMPANY WHOSE SUBSIDIARIES ARE SERVED BY REPORTING
COMPANY:
Northeast Utilities
SEC 1926 (6-82)
INSTRUCTIONS FOR USE OF FORM U-13-60
1. Time of Filing. Rule 94 provides that on or before the first day of May
in each calendar year, each mutual service company and each subsidiary service
company as to which the Commission shall have made a favorable finding pursuant
to Rule 88, and every service company whose application for approval or
declaration pursuant to Rule 88 is pending shall file with the Commission an
annual report on Form U-13-60 and in accordance with the Instructions for that
form.
2. Number of Copies. Each annual report shall be filed in duplicate. The
company should prepare and retain at least one extra copy for itself in case
correspondence with reference to the report becomes ncessary.
3. Period Covered by Report. The first report filed by any company shall
cover the period from the date the Uniform System of Accounts was required to
be made effective as to that company under Rules 82 and 93 to the end of that
calendar year. Subsequent reports should cover a calendar year.
4. Report Format. Reports shall be submitted on the forms prepared by the
Commission. If the space provided on any sheet of such form is inadequate,
additional sheets may be inserted of the same size as a sheet of the form or
folded to such size.
5. Money Amounts Displayed. All money amounts required to be shown in
financial statements may be expressed in whole dollars, in thousands of dollars
or in hundred thousands of dollars, as appropriate and subject to provisions of
Regulation S-X ('210.3-01(b)).
6. Deficits Displayed. Deficits and other like entries shall be indicated by
the use of either brackets or a parenthesis with corresponding reference in
footnotes. (Regulation S-X. '210.3-01(c))
7. Major Amendments or Corrections. Any company desiring to amend or
correct a major omission or error in a report after it has been filed with
the Commission shall submit an amended report including only those pages,
schedules, and entries that are to be amended or corrected. A cover letter
shall be submitted requesting the Commission to incorporate the amended report
changes and shall be signed by a duly authorized officer of the company.
8. Definitions. Definitions contained in Instruction 01-8 to the Uniform
System of Accounts for Mutual Service Companies and Subsidiary Service
Companies, Public Utility Holding Company Act of 1935, as amended February 2,
1979 shall be applicable to words or terms used specifically within this
Form U-13-60.
9. Organization Chart. The service company shall submit with each annual
report a copy of its current organization chart.
10. Methods of Allocation. The service company shall submit with each annual
report a listing of the currently effective methods of allocation being used by
the service company and on file with the Securities and Exchange Commission
pursuant to the Public Utility Holding Company Act of 1935.
11. Annual Statement of Compensation for Use of Capital Billed. The service
company shall submit with each annual report a copy of the annual statement
supplied to each associate company in support of the amount of compensation for
use of capital billed during the calendar year.
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS
Schedule or Page
Description of Schedules and Accounts Acct. No. No.
Comparative Balance Sheet Schedule I 4 - 5
Service Company Property Schedule II 6 - 7
Accumulated Provision for Depreciation
and Amortization of Service Company
Property Schedule III 8
Investments Schedule IV 9
Accounts Receivable from Associate
Companies Schedule V 10
Fuel Stock Expenses Undistributed Schedule VI 11
Stores Expense Undistributed Schedule VII 12
Miscellaneous Current and Accrued Assets Schedule VIII 13
Miscellaneous Deferred Debits Schedule IX 14
Research, Development, or Demonstration
Expenditures Schedule X 15
Proprietary Capital Schedule XI 16
Long Term Debt Schedule XII 17
Current and Accrued Liabilities Schedule XIII 18
Notes to Financial Statements Schedule XIV 19
Comparative Income Statement Schedule XV 20
Analysis of Billing - Associate Companies Account 457 21
Analysis of Billing - Non-Associate
Companies Account 458 22
Analysis of Charges for Service -
Associate and Non-Associate Companies Schedule XVI 23
Schedule of Expense by Department or
Service Function Schedule XVII 24 - 25
Departmental Analysis of Salaries Account 920 26
Outside Services Employed Account 923 27
Employee Pensions and Benefits Account 926 28
General Advertising Expenses Account 930.1 29
Miscellaneous General Expenses Account 930.2 30
Rents Account 931 31
Taxes Other Than Income Taxes Account 408 32
Donations Account 426.1 33
Other Deductions Account 426.5 34
Notes to Statement of Income Schedule XVIII 35
Description of Reports or Statements
Organization Chart 36
Methods of Allocation 37
Annual Statement of Compensation for
Use of Capital Billed 38
Signature Page 39
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
SCHEDULE I - COMPARATIVE BALANCE SHEET
Give balance sheet of the Company as of December 31 of the current and prior year.
- ---------------------------------------------------------------------------------------------
ACCT ASSETS AND OTHER DEBITS AS OF DECEMBER 31
- ---------------------------------------------------------------------------------------------
1997 1996
SERVICE COMPANY PROPERTY (Thousands of Dollars)
------------------------
<S> <S> <C> <C>
101 Service company property (Schedule II) $ 0 $ 0
107 Construction work in progress (Schedule II) 0 0
---------- ----------
Total Service Company Property $ 0 $ 0
---------- ----------
108 Less accumulated provision for depreciation and
amortization of service company property (Schedule III) $ 0 $ 0
---------- ----------
Net Service Company Property $ 0 $ 0
---------- ----------
INVESTMENTS
-----------
123 Investments in associate companies (Schedule IV) $ 0 $ 0
124 Other investments (Schedule IV) 680 0
---------- ----------
Total Investments $ 680 $ 0
---------- ----------
CURRENT AND ACCRUED ASSETS
--------------------------
131 Cash $ 1,675 $ 725
134 Special deposits 0 0
135 Working funds 0 0
136 Temporary cash investments (Schedule IV) 15 14
141 Notes receivable 0 0
143 Accounts receivable 17,475 51,111
144 Accumulated provision of uncollectible accounts 0 0
146 Accounts receivable from associate companies (Schedule V) 54 523
152 Fuel stock expenses undistributed (Schedule VI) 0 0
154 Materials and supplies 0 0
163 Stores expense undistributed (Schedule VII) (476) 298
165 Prepayments 2,593 3,024
174 Miscellaneous current and accrued assets (Schedule VIII) 0 0
---------- ----------
Total Current and Accrued Assets $ 21,336 $ 55,695
---------- ----------
DEFERRED DEBITS
---------------
181 Unamortized Debt Expense $ 0 $ 0
184 Clearing accounts 0 0
186 Miscellaneous deferred debits (Schedule IX) 24,328 20,348
188 Research, development, or demonstration
expenditures (Schedule X) 0 0
190 Accumulated deferred income taxes 0 313
---------- ----------
Total Deferred Debits $ 24,328 $ 20,661
---------- ----------
TOTAL ASSETS AND OTHER DEBITS $ 46,344 $ 76,356
========== ==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
SCHEDULE I - COMPARATIVE BALANCE SHEET
Give balance sheet of the Company as of December 31 of the current and prior year.
- ---------------------------------------------------------------------------------------------
ACCT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31
- ---------------------------------------------------------------------------------------------
1997 1996
(Thousands of Dollars)
<S> <S> <C> <C>
PROPRIETARY CAPITAL
-------------------
201 Common stock issued (Schedule XI) $ 1 $ 1
211 Miscellaneous paid-in-capital (Schedule XI) 9 9
215 Appropriated retained earnings (Schedule XI) 0 0
216 Unappropriated retained earnings (Schedule XI) 2 1
---------- ----------
Total Proprietary Capital $ 12 $ 11
---------- ----------
LONG-TERM DEBT
--------------
223 Advances from associate companies (Schedule XII) $ 0 $ 0
224 Other long-term debt (Schedule XII) 0 0
225 Unamortized premium on long-term debt 0 0
226 Unamortized discount on long-term debt 0 0
---------- ----------
Total Long-Term Debt $ 0 $ 0
---------- ----------
CURRENT AND ACCRUED LIABILITIES
-------------------------------
231 Notes payable $ 0 $ 0
232 Accounts payable 10,352 41,425
233 Notes payable to associate companies (Schedule XIII) 0 0
234 Accounts payable to associate companies (Schedule XIII) 3,807 1,994
236 Taxes accrued 71 376
237 Interest accrued 0 0
238 Dividends declared 0 0
241 Tax collections payable 0 (56)
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 27,912 29,483
---------- ----------
Total Current and Accrued Liabilities $ 42,142 $ 73,222
---------- ----------
DEFERRED CREDITS
----------------
253 Other deferred credits $ 4,081 $ 3,123
255 Accumulated deferred investment tax credits 0 0
---------- ----------
Total Deferred Credits $ 4,081 $ 3,123
---------- ----------
282 ACCUMULATED DEFERRED INCOME TAXES $ 109 $ 0
--------------------------------- ---------- ----------
TOTAL LIABILITIES AND PROPRIETARY CAPITAL $ 46,344 $ 76,356
========== ==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE II - SERVICE COMPANY PROPERTY
- ---------------------------------------------------------------------------------------------
BALANCE AT RETIREMENTS BALANCE
BEGINNING OR OTHER AT CLOSE
ACCT DESCRIPTION OF YEAR ADDITIONS SALES CHANGES OF YEAR
- ---------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
SERVICE COMPANY PROPERTY
301 ORGANIZATION
303 MISCELLANEOUS INTANGIBLE PLANT
304 LAND AND LAND RIGHTS
305 STRUCTURES AND IMPROVEMENTS
306 LEASEHOLD IMPROVEMENTS
307 EQUIPMENT (2) NONE
308 OFFICE FURNITURE AND EQUIPMENT
309 AUTOMOBILES, OTHER VEHICLES
AND RELATED GARAGE EQUIPMENT
310 AIRCRAFT AND AIRPORT EQUIPMENT
311 OTHER SERVICE COMPANY
PROPERTY (3)
(1) PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
NONE
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE II - CONTINUED
-----------------------
(2) SUBACCOUNTS ARE REQUIRED FOR EACH CLASS OF EQUIPMENT OWNED. THE SERVICE
COMPANY SHALL PROVIDE A LISTING BY SUBACCOUNT OF EQUIPMENT ADDITIONS DURING THE
YEAR AND THE BALANCE AT THE CLOSE OF THE YEAR:
- ---------------------------------------------------------------------------------------------
BALANCE
AT CLOSE
SUBACCOUNT DESCRIPTION ADDITIONS OF YEAR
- ---------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
NONE
(3) DESCRIBE OTHER SERVICE COMPANY PROPERTY:
NONE
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY
- ----------------------------------------------------------------------------------------------
ADDITIONS OTHER
BALANCE AT CHARGED CHANGES BALANCE
BEGINNING TO ADD/ AT CLOSE
DESCRIPTION OF YEAR ACCT 403 RETIREMENTS (DEDUCT)(1) OF YEAR
- ----------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
Account
- -------
301 ORGANIZATION
303 MISCELLANEOUS INTANGIBLE PLANT
304 LAND AND LAND RIGHTS
305 STRUCTURES AND IMPROVEMENTS
306 LEASEHOLD IMPROVEMENTS
307 EQUIPMENT NONE
308 OFFICE FURNITURE AND FIXTURES
309 AUTOMOBILES, OTHER VEHICLES
AND RELATED GARAGE EQUIPMENT
310 AIRCRAFT AND AIRPORT EQUIPMENT
311 OTHER SERVICE COMPANY
PROPERTY
AMORTIZATION OF SERVICE COMPANY
PROPERTY
- ------------------------------------------------------------------------------------------
(1) PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
NONE
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE IV - INVESTMENTS
INSTRUCTIONS: Complete the following schedule concerning investments.
Under Account 124, "Other Investments," state each
investment separately, with description, including the
name of issuing company, number of shares or principal
amount, etc.
Under Account 136, "Temporary Cash Investments," list each
investment separately.
- --------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- --------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ACCOUNT 123 - INVESTMENT IN ASSOCIATE COMPANIES $ 0 $ 0
ACCOUNT 124 - OTHER INVESTMENTS
Reliance Assurance - Workmen's
Compensation Bond 0 680
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS
Fidelity Institute Tax Exempt Cash
Portfolio 11 12
Citizens Bank Certificate of Deposit 3 3
---------- ----------
TOTAL $ 14 $ 695
========== ==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE V - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
INSTRUCTIONS:Complete the following schedule listing accounts receivable from
each associate company. Where the service company has provided
accommodation or convenience payments for associate companies,
a separate listing of total payments for each associate company
by subaccount should be provided.
- ---------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- ---------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
Northeast Utilities Service Company $ 364 $ 10
Northeast Nuclear Energy Company 155 41
North Atlantic Energy Corporation 3 2
Public Service Company of New Hampshire 1 1
-------- --------
TOTAL $ 523 $ 54
======== ========
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS:
NONE
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE VI - FUEL STOCK EXPENSES UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect
to fuel stock expenses during the year and indicate amount
attributable to each associate company. Under the section
headed "Summary" listed below, give an overall report of
the fuel functions performed by the service company.
- -----------------------------------------------------------------------------
DESCRIPTION LABOR EXPENSES TOTAL
- -----------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
ACCOUNT 152 - FUEL STOCK EXPENSES NONE
UNDISTRIBUTED
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE VII - STORES EXPENSE UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to
stores epense during the year and indicate amount attributable
to each associate company.
- -------------------------------------------------------------------------------
DESCRIPTION LABOR EXPENSES TOTAL
- -------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ACCOUNT 163 - STORES EXPENSE
UNDISTRIBUTED
Balance at prior year end $ 286 $ 12 $ 298
Amount incurred during the year 2,632 315 2,947
The above stores expenses are billed back to
each of the companies listed below:
Associate Companies:
The Connecticut Light and
Power Company (136) (15) (151)
North Atlantic Energy Corporation (1,205) (134) (1,339)
Non-Associate Companies (2,008) (223) (2,231)
--------- --------- ---------
TOTAL $ (431) $ (45) $ (476)
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE VIII
MISCELLANEOUS CURRENT AND ACCRUED ASSETS
INSTRUCTIONS: Provide detail of items in this account. Items less than
$10,000 may be grouped, showing the number of items in each
group.
- ------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- ------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
ACCOUNT 174 - MISCELLANEOUS CURRENT NONE
AND ACCRUED ASSETS
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE IX
MISCELLANEOUS DEFERRED DEBITS
INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000
may be grouped, showing the number of items in each group.
- ------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- ------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS
Noncurrent receivable from Joint Owner funding $ 19,075 $ 23,189
Westinghouse Reactor Coolant Pump Settlement 987 682
North Atlantic Energy Service Corporation Organization Cost 19 0
Accounting Treatment Change for Payroll 358 328
Miscellaneous (>100 items) (251) 88
Preliminary Engineering for:
Security system replacement 10 0
Administration building addition 11 0
Service water improvements 59 0
Integrated reactor vessel head 40 0
Steam generator blowdown 30 30
Miscellaneous (4 items 1996, 4 items 1997) 10 11
-------- --------
TOTAL $ 20,348 $ 24,328
======== ========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE X
RESEARCH, DEVELOPMENT, OR DEMONSTRATION EXPENDITURES
INSTRUCTIONS: Provide a description of each material research, development,
or demonstration project which incurred costs by the service
corporation during the year.
- ----------------------------------------------------------------------------
DESCRIPTION AMOUNT
- ----------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C>
ACCOUNT 188 - RESEARCH, DEVELOPMENT OR NONE
DEMONSTRATION EXPENDITURES
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE XI
PROPRIETARY CAPITAL
- -----------------------------------------------------------------------------------------
NUMBER OF PAR OR STATED OUTSTANDING CLOSE OF PERIOD
ACCOUNT SHARES VALUE ---------------------------
NUMBER CLASS OF STOCK AUTHORIZED PER SHARE NO. OF SHARES TOTAL AMOUNT
- -----------------------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C> <C> <C> <C>
201 COMMON STOCK ISSUED 1,000 $ 1.00 1,000 $ 1
INSTRUCTIONS: Classify amounts in each account with brief explanation, disclosing the
general nature of transactions which give rise to the reported amounts.
- -----------------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- -----------------------------------------------------------------------------------------
(Thousands of Dollars)
<C>
ACCOUNT 211 - MISCELLANEOUS PAID-IN-CAPITAL $ 9
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS 0
-------
TOTAL $ 9
=======
- -----------------------------------------------------------------------------------------
INSTRUCTIONS: Give particulars concerning net income or (loss) during the year,
distinguishing between compensation for the use of capital owed or net
loss remaining from servicing nonassociated per the General Instructions
of the Uniform Systems of Accounts. For dividends paid during the year
in cash or otherwise, provide rate percentage, amount of dividend, date
declared and date paid.
- -----------------------------------------------------------------------------------------
BALANCE AT NET INCOME BALANCE
BEGINNING OR DIVIDENDS AT CLOSE
DESCRIPTION OF YEAR (LOSS) PAID OF YEAR
- -----------------------------------------------------------------------------------------
(Thousands of Dollars)
ACCOUNT 216-UNAPPROPRIATED
RETAINED EARNINGS
<C> <C> <C> <C>
$ 1 $ 1 $ 0 $ 2
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE XII
LONG-TERM DEBT
INSTRUCTIONS: Advances from associate companies should be reported separately for advances on notes, and
advances on open account. Names of associate companies from which advances were received shall be
shown under the class and series of obligation column. For Account 224 -- Other long-term debt
provide the name of creditor company or organization, terms of obligation, date of maturity,
interest rate, and the amount authorized and outstanding.
- --------------------------------------------------------------------------------------------------------------------
TERMS OF OBLIG. DATE BALANCE AT BALANCE AT
CLASS & SERIES OF INTEREST AMOUNT BEGINNING DEDUCTIONS CLOSE
NAME OF CREDITOR OF OBLIGATION MATURITY RATE AUTHORIZED OF YEAR ADDITIONS (1) OF YEAR
- --------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
ACCOUNT 223-ADVANCES FROM
ASSOCIATE COMPANIES
TOTAL ADVANCES FROM ASSOCIATES NONE
ACCOUNT 224-OTHER
LONG-TERM DEBT
TOTAL OTHER LONG-TERM DEBT NONE
(1) GIVE AN EXPLANATION OF DEDUCTIONS:
NONE
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES
INSTRUCTIONS: Provide balance of notes and accounts payable to each associate company.
Give description and amount of miscellaneous current and accrued
liabilities. Items less than $10,000 may be grouped, showing the number
of items in each group.
- -----------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- -----------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE COMPANIES
NONE
- -----------------------------------------------------------------------------------------
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES
Northeast Utilities Service Company $ 1,588 $ 2,022
Northeast Nuclear Electric Company 0 6
Public Service Company of New Hampshire 173 1,774
The Connecticut Light & Power Company 233 1
Miscellaneous (1 item) 0 4
-------- --------
TOTAL $ 1,994 $ 3,807
======== ========
- -----------------------------------------------------------------------------------------
ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES
Accrued payroll and other employee payables $ 6,714 $ 3,751
Accrued Pension Cost 17,028 20,157
On-hand operations funding from associate companies:
North Atlantic Energy Corporation 2,066 1,446
The Connecticut Light & Power Company 233 163
On-hand operations funding from non-associate companies 3,442 2,395
-------- --------
TOTAL $ 29,483 $ 27,912
======== ========
</TABLE>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
FOR THE YEAR ENDED DECEMBER 31, 1997
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General: North Atlantic Energy Service Corporation (the Company or NAESCO) is a
wholly owned subsidiary of Northeast Utilities (NU). The Connecticut Light and
Power Company (CL&P), Public Service Company of New Hampshire (PSNH), Western
Massachusetts Electric Company (WMECO), North Atlantic Energy Corporation
(NAEC), and Holyoke Water Power Company (HWP) are operating subsidiaries
comprising the Northeast Utilities system (the NU system) and are wholly owned
by NU.
The NU system furnishes retail electric service in Connecticut, New Hampshire,
and western Massachusetts through CL&P, PSNH, WMECO, and HWP. NAEC sells all of
its capacity to PSNH. In addition to its retail service, the NU system
furnishes firm and other wholesale electric services to various municipalities
and other utilities. The NU system serves about 30 percent of New England's
electric needs and is one of the 25 largest electric utility systems in the
country as measured by revenues.
The Company acts as agent in operating the Seabrook Nuclear Power Project (the
Project or Seabrook) pursuant to the Seabrook Project Managing Agent Operating
Agreement (the Managing Agent Agreement) and the Seabrook Project Disbursing
Agent Agreement (the Disbursing Agent Agreement). The Project is owned jointly
by NAEC and CL&P, both wholly owned subsidiaries of NU and nine nonaffiliated
New England utility companies as tenants in common with undivided interests (the
Seabrook Joint Owners). The cost of the Project is recorded on the books of
the Seabrook Joint Owners based upon their proportionate ownership share of the
Project. The Company does not have an ownership interest in the Project. The
Company is only liable for payroll related expenditures and liabilities. The
Seabrook Joint Owners are severally responsible for their respective share of
the costs of operating and maintaining the Project.
Ownership percentages of the Project as of December 31, 1997 were as follows:
OWNERSHIP
PARTICIPANTS SHARE
Canal Electric Company 3.52317%
The Connecticut Light and Power Company 4.05985
Great Bay Power Corporation 12.13240
Hudson Light & Power Department .07737
Massachusetts Municipal Wholesale Electric Company 11.59340
Montaup Electric Company 2.89989
New England Power Company 9.95766
New Hampshire Electric Cooperative, Inc. 2.17391
North Atlantic Energy Corporation 35.98201
Taunton Municipal Lighting Plant .10034
The United Illuminating Company 17.50000
100.00000%
Other wholly owned subsidiaries of NU provide support services to the Company.
Northeast Utilities Service Company (NUSCO) provides certain administrative
support to the Company, pursuant to the Service Agreement between NUSCO and
NAESCO acting as agent for the Seabrook Joint Owners, as amended, and to other
NU system companies. Billings from NUSCO recorded by the Company approximated
$9,405,000 and $8,937,000 in 1997 and 1996, respectively. PSNH provides certain
services to the Company pursuant to the Service Agreement between PSNH and
NAESCO acting as agent for the Seabrook Joint Owners, as amended. Billings from
PSNH recorded by the Company were approximately $971,000 and $369,000 in 1997
and 1996, respectively.
Yankee Atomic Electric Company (YAEC) provides services to the Company pursuant
to the Nuclear Support Services Agreement between YAEC and NAESCO acting as
agent for the Seabrook Joint Owners, as amended. Several Seabrook Joint Owners,
or their affiliates, own interests in YAEC as follows:
Owner Ownership Interest
The Connecticut Light & Power Company 24.5%
Montaup Electric Company 4.5
New England Power Company 30.0
Public Service Company of New Hampshire 7.0
Billings from YAEC recorded by the Company approximated $7,989,000 and
$5,029,000 in 1997 and 1996, respectively. Subsequent to year-end 1997, YAEC's
Nuclear Services Division was merged with Duke Engineering Services who is
performing similar services for NAESCO.
All transactions among affiliated companies, and between YAEC and the Company,
are on a recovery of cost basis which may include amounts representing a return
on equity, and are subject to approval of various federal and state regulatory
agencies.
Method of Accounting: The accompanying financial statements were prepared in
accordance with the Uniform System of Accounts for Mutual and Subsidiary Service
Companies, promulgated pursuant to the Public Utility Holding Company Act of
1935, as modified (1935 Act). This system of accounts follows, with
modifications, the Federal Energy Regulatory Commission's (the FERC) Uniform
System of Accounts and the Managing Agent Agreement. The financial statements
reflect expenses associated with managing, operating, and maintaining the
Project, excluding decommissioning costs, property taxes, amortization of
nuclear fuel, reserves, and book depreciation. Pursuant to the Managing Agent
Agreement, NAESCO does not earn a return on capital and therefore, revenues
represent the sum of the Company's operating expenses.
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 assets and liabilities at the date of the financial
statements. Estimates also affect the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Public Utility Regulation: NU is registered with the Securities and Exchange
Commission as a holding company under the 1935 Act, and it and its subsidiaries,
including the Company, are subject to the provisions of the 1935 Act. The
Company is a registered utility company in the State of New Hampshire and is
subject to appropriate regulation by the New Hampshire Public Utilities
Commission (NHPUC). The Seabrook Joint Owners, whom the Company represents as
agent, are subject to further regulation by the FERC. Therefore, the Company
follows the accounting policies prescribed by the FERC.
2. PENSION AND POSTRETIREMENT BENEFITS
Pensions: Employees of NAESCO are covered by the NU system's uniform
noncontributory-defined benefit plan covering all of its regular employees.
Benefits are based on years of service and employees' highest compensation
during five consecutive years of employment. The Company's allocated portion of
the NU system's pension cost for 1997 and 1996, part of which was capitalized
and billed as utility plant, approximated $3,129,000 and $3,638,000,
respectively.
Currently, the NU system funds annually an amount at least equal to that which
will satisfy the requirements of the Employee Retirement Income Security Act and
the Internal Revenue Code. Pension costs are determined using market-related
values of pension assets. Pension assets are invested primarily in
domestic and international equity securities and bonds.
The components of net pension cost for the Company (in thousands) are:
For the Years Ended
December 31,
1996 1997
Service cost $3,512 $3,749
Interest cost 4,067 3,567
Return on plan assets (6,708) (9,947)
Net amortization 5,497 3,030
Net Pension cost $3,129 $3,638
For calculating pension cost, the following actuarial assumptions were used:
For the Years Ended
December 31,
1996 1997
Discount rate 7.75% 7.50%
Expected long-term rate of return 9.25% 8.75%
Compensation/progression rate 4.75% 4.75%
The following table represents the plan's funded status for the Company at
December 31 (in thousands):
The following actuarial assumptions were used in calculating the Company plan's
year end funded status:
1997 1996
Accumulated benefit obligation,
including vested benefits at
December 31, 1997 and 1996 of
$27,259,000 and $23,047,0000, respectively $ 35,399 $ 29,877
Projected benefit obligation (PBO) $ 59,416 52,049
Less: Market value of plan assets 57,396 48,656
PBO in excess of market value (2,020) (3,393)
Unrecognized transition amount 756 819
Unrecognized prior service costs 5,766 6,146
Unrecognized net gain (24,659) (20,600)
Accrued pension liability $(20,157) $(17,028)
The following actuarial assumptions were used in calculating the Company plan's
year end funded status:
1997 1996
Discount rate 7.25% 7.75%
Compensation/progression rate 4.25% 4.75%
Postretirement Benefits: The Company provides certain health care benefits,
primarily medical and dental, and life insurance benefits through a benefit
plan to retired employees (referred to as SFAS 106 benefits). These benefits
are available for employees leaving the Company who are otherwise eligible to
retire and have met specified service requirements. The expected cost of
postretirement benefits, primarily health and life insurance benefits are
charged to expense during the years that eligible employees render service.
For current employees and certain retirees, the total postretirement benefit
is limited to two times the 1993 per-retiree health care costs. The
postretirement benefit obligation has been calculated based on this assumption.
Actuarially determined total SFAS 106 benefits, part of which were capitalized
and billed as utility plant, approximated $674,000 in 1997 and $1,036,000 in
1996.
The components of health care and life insurance costs for the years ended
December 31 (in thousands) are:
1997 1996
Service cost $ 475 $ 588
Interest cost 531 561
Return on plan assets (1,051) (500)
Net amortization 719 387
Net health care and life insurance cost $ 674 $ 1,036
The following actuarial assumptions were used in calculating SFAS 106 benefit
costs:
1997 1996
Discount Rate 7.75% 7.50%
Long Term Rate of Return - Health Assets,
net of tax 6.00% 5.25%
Long Term Rate of Return - Life Assets 9.25% 8.75%
The Company funds its postretirement benefit costs through investments in
external trusts. The trust assets are invested primarily in equity securities
and bonds.
The following table represents the plan's funded status at December 31 (in
thousands):
1997 1996
Accumulated postretirement benefit
obligation of:
Retirees $ 2,885 $ 2,836
Active employees fully eligible to retire 26 28
Active employees not eligible to retire 4,688 4,788
Total accumulated postretirement
benefit obligation 7,599 7,652
Market value of plan assets 6,447 5,143
Accumulated postretirement benefit
obligation in
excess of plan assets (1,152) (2,509)
Unrecognized transition amount 2,367 2,525
Unrecognized net (gain) loss (1,116) 233
Prepaid postretirement benefit liability $ 99 $ 249
The following actuarial assumptions were used in calculating the plan's year end
funded status:
1997 1996
Discount Rate 7.25% 7.75%
Health Care Cost Trend Rate(a) 5.76% 7.23%
(a) The per capita cost of covered health care benefits was assumed to
decrease to 4.4 percent by 2001.
The effect of increasing the assumed health care cost trend rates by one
percentage point in each year would increase the accumulated postretirement
benefit obligation as of December 31, 1997 by $322,000 and the aggregate of the
service and interest cost components of net periodic postretirement benefit cost
for the year then ended by $42,000. The trust holding the plan assets is
subject to federal income taxes at a 39.6-percent tax rate.
3. LEASES
The Company, on behalf of the Seabrook Joint Owners, has entered into operating
lease agreements for certain data processing equipment, office equipment,
vehicles and offsite facilities. The Company does not enter into capital
leases. Operating lease costs charged to expense approximated $1,498,000 and
$1,392,000 in 1997 and 1996, respectively.
The provisions of these lease agreements generally provide for renewal options.
The Company has no noncancelable leases.
4. FINANCING
Each of the Seabrook Joint Owners is responsible for financing its cost of
participation in the Project in proportion to its respective ownership share.
Such financing is provided to the Project in advance of such costs being
incurred. The Company, therefore, has no long-term or short-term debt
obligations.
5. OTHER INVESTMENTS
In order to be self-insured for basic worker's compensation coverage in the
State of New Hampshire, financial assurance is required. Funds have been set
aside in an interest bearing collateral account for such purpose. The balance
at December 31, 1997 was approximately $680,000.
6. INCOME TAX EXPENSE
The components of the federal and state income tax provisions for the year ended
December 31 (in thousands) are:
1997 1996
Current income taxes:
Federal $ (386) $ 325
State (112) (95)
Total current $ (498) $ 230
Deferred income taxes, net:
Federal $ 459 $ (284)
State 47 (29)
Total deferred $ 506 $ (313)
Total income tax expense $ 8 $ (83)
The components of total income tax expense for the year ended December 31 (in
thousands) are classified as follows:
1997 1996
Income taxes charged to operating expenses $ 8 $(83)
Other income taxes 0 0
Total income tax expense $ 8 $(83)
Deferred income taxes for the year ended December 31 (in thousands) are
comprised of the tax effects of temporary differences as follows:
1997 1996
Software amortization $ 455 $(596)
Workforce reduction 17 (138)
Injuries and damages reserve 94 351
Accrued vacation (20) 51
Other (40) 19
Deferred income taxes, net $ 506 $(313)
A reconciliation between income tax expense and the expected tax expense at the
applicable statutory rate for the year ended December 31 (in thousands) is as
follows:
1997 1996
Expected federal income tax at 35
percent of pretax income $ 3 $ (29)
Tax effect of differences:
State income taxes, net of federal benefit (11) (81)
Other, net 16 27
Total income tax expense $ 8 $ (83)
The company, as a wholly-owned subsidiary of NU is included in NU's consolidated
return. Income tax expense is determined on a separate company basis.
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
FOR THE YEAR ENDED DECEMBER 31, 1997
SCHEDULE XV
COMPARATIVE INCOME STATEMENT
- --------------------------------------------------------------------------------
ACCT DESCRIPTION 1997 1996
- --------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
INCOME
------
457 Services Rendered to Associate Companies $ 71,130 $ 51,541
458 Services Rendered to Nonassociate Companies 106,509 77,177
421 Miscellaneous Income or (Loss) 19 35
--------- ---------
Total Income $ 177,658 $ 128,753
--------- ---------
EXPENSE
-------
Nuclear Power Expenses
- ------------------------
517 Operation Supervision and Engineering $ 20,694 $ 19,547
518 Nuclear Fuel Expense 7,504 9,297
519 Coolants and Water 2,236 906
520 Steam Expenses 15,613 9,007
523 Electric Expenses 4,838 1,872
524 Miscellaneous Nuclear Power Expenses 25,906 23,009
528 Maintenance Supervision and Engineering 19,772 11,508
529 Maintenance of Structures 5,155 4,181
530 Maintenance of Reactor Plant Equipment 22,104 3,867
531 Maintenance of Electric Plant 19,221 4,605
532 Maintenance of Miscellaneous Nuclear Plant 758 3,899
Transmission Expenses
- -----------------------
570 Maintenance of Station Equipment 28 25
Administrative and General Expenses
- -------------------------------------
920 Salaries and Wages 4,717 3,175
921 Office Supplies and Expenses 1,620 1,560
922 Administrative Expense Transferred-Credit (9) (280)
923 Outside Services Employed 2,730 5,250
924 Property Insurance 3,729 3,663
925 Injuries and Damages 1,906 1,817
926 Employee Pensions and Benefits 13,152 14,897
928 Regulatory Commission Expense 6 2,422
930.1 General Advertising Expenses 203 182
930.2 Miscellaneous General Expenses 850 626
935 Maintenance of General Plant 64 8
All Other Expenses
- --------------------
408 Taxes Other Than Income Taxes 4,550 3,656
409 Income Taxes (498) 230
410 Provision for Deferred Income Taxes 704 41
411 Provision for Deferred Income Taxes (197) (354)
426.1 Donations 53 74
426.5 Other Deductions 135 10
431 Other Interest Expense 113 52
--------- ----------
Total Expense $ 177,657 $ 128,752
--------- ----------
Net Income or (Loss) $ 1 $ 1
========= ==========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
- --------------------------------------------------------------------------------
DIRECT INDIRECT COMPENSATION TOTAL
COSTS COSTS FOR USE AMOUNT
NAME OF ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL BILLED
- --------------------------------------------------------------------------------
(Thousands of Dollars)
457-1 457-2 457-3
-------- -------- -------- --------
<S> <C> <C> <C> <C>
The Connecticut Light and Power $ 7,212 $ $ $ 7,212
Company
North Atlantic Energy Corporation 63,918 63,918
-------- -------- -------- --------
TOTAL $ 71,130 $ 0 $ 0 $ 71,130
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
ANALYSIS OF BILLING
NONASSOCIATE COMPANIES
ACCOUNT 458
DIRECT INDIRECT COMPENSATION EXCESS TOTAL
NAME OF COSTS COSTS FOR USE TOTAL OR AMOUNT
NONASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL COSTS DEFICIENCY BILLED
(Thousands of Dollars)
458-1 458-2 458-3 458-4
-------- -------- ------------ -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Canal Electric Company $ 6,259 $ $ $ 6,259 $ $ 6,259
Great Bay Power Corporation 21,552 21,552 21,552
Hudson Light & Power Dept. 137 137 137
Massachusetts Municipal Wholesale
Electric Company 20,594 20,594 20,594
Montaup Electric Company 5,151 5,151 5,151
New England Power Company 17,689 17,689 17,689
New Hampshire Electric Coop. 3,862 3,862 3,862
Taunton Municipal Lighting Plant 178 178 178
United Illuminating Company 31,087 31,087 31,087
-------- ------- -------- -------- --------- --------
$106,509 $ 0 $ 0 $106,509 $ 0 $106,509
======== ======= ======== ======== ========= ========
INSTRUCTIONS: Provide a brief description of the services rendered to each nonassociate company:
The Company acts as agent in operating Seabrook Station for the nonassociate companies.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
- -------------------------------------------------------------------------------------
ASSOCIATE COMPANY CHARGES
ACCOUNT DIRECT INDIRECT
NUMBER DESCRIPTION OF ITEMS COST COST TOTAL
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nuclear Power Expenses
----------------------
517 Operation Supervision and Engineering $ 8,286 $ $ 8,286
518 Nuclear Fuel Disposal 3,005 3,005
519 Coolants and Water 895 895
520 Steam Expenses 6,252 6,252
523 Electric Expenses 1,937 1,937
524 Miscellaneous Nuclear Power Expenses 10,375 10,375
528 Maintenance Supervision and Engineering 7,917 7,917
529 Maintenance of Structures 2,064 2,064
530 Maintenance of Reactor Plant Equipment 8,851 8,851
531 Maintenance of Electric Plant 7,696 7,696
532 Maintenance of Miscellaneous Nuclear Plant 304 304
Transmission Expenses
---------------------
570 Maintenance of Station Equipment 11 11
Administrative and General Expenses
-----------------------------------
920 Salaries and Wages 1,889 1,889
921 Office Supplies and Expenses 649 649
922 Administrative Expense Transferred-Credit (4) (4)
923 Outside Services Employed 1,093 1,093
924 Property Insurance 1,493 1,493
925 Injuries and Damages 763 763
926 Employee Pensions and Benefits 5,266 5,266
928 Regulatory Commission Expense 2 2
930.1 General Advertising Expenses 81 81
930.2 Miscellaneous General Expenses 340 340
935 Maintenance of General Plant 26 26
All Other Expenses
------------------
408 Taxes Other Than Income Taxes 1,822 1,822
409 Income Taxes (199) (199)
410 Provision for Deferred Income Tax 282 282
411 Provision for Deferred Income Tax (79) (79)
426.1 Donations 21 21
426.5 Other Deductions 54 54
431 Other Interest Expense 45 45
----------------------------
TOTAL EXPENSES = $ 71,137 $ $ 71,137
421 Miscellaneous Non-Operating Income (8) (8)
Net Income 1 1
----------------------------
TOTAL COST OF SERVICE = $ 71,130 $ $ 71,130
============================
INSTRUCTION: Total cost of service will equal for associate and nonassociate
companies the total amount billed under their separate analysis of billing schedules.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
- ---------------------------------------------------------------------------------------
NONASSOCIATE COMPANY CHARGES
ACCOUNT DIRECT INDIRECT
NUMBER DESCRIPTION OF ITEMS COST COST TOTAL
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nuclear Power Expenses
----------------------
517 Operation Supervision and Engineering $ 12,408 $ $ 12,408
518 Nuclear Fuel Disposal 4,499 4,499
519 Coolants and Water 1,341 1,341
520 Steam Expenses 9,361 9,361
523 Electric Expenses 2,901 2,901
524 Miscellaneous Nuclear Power Expenses 15,531 15,531
528 Maintenance Supervision and Engineering 11,855 11,855
529 Maintenance of Structures 3,091 3,091
530 Maintenance of Reactor Plant Equipment 13,253 13,253
531 Maintenance of Electric Plant 11,525 11,525
532 Maintenance of Miscellaneous Nuclear Plant 454 454
Transmission Expenses
---------------------
570 Maintenance of Station Equipment 17 17
Administrative and General Expenses
-----------------------------------
920 Salaries and Wages 2,828 2,828
921 Office Supplies and Expenses 971 971
922 Administrative Expense Transferred-Credit (5) (5)
923 Outside Services Employed 1,637 1,637
924 Property Insurance 2,236 2,236
925 Injuries and Damages 1,143 1,143
926 Employee Pensions and Benefits 7,886 7,886
928 Regulatory Commission Expense 4 4
930.1 General Advertising Expenses 122 122
930.2 Miscellaneous General Expenses 510 510
935 Maintenance of General Plant 38 38
All Other Expenses
------------------
408 Taxes Other Than Income Taxes 2,728 2,728
409 Income Taxes (299) (299)
410 Provision for Deferred Income Tax 422 422
411 Provision for Deferred Income Tax (118) (118)
426.1 Donations 32 32
426.5 Other Deductions 81 81
431 Other Interest Expense 68 68
-----------------------------
TOTAL EXPENSES = $ 106,520 $ $ 106,520
421 Miscellaneous Non-Operating Income (11) (11)
Net Income 0 0
-----------------------------
TOTAL COST OF SERVICE = $ 106,509 $ $ 106,509
=============================
INSTRUCTION: Total cost of service will equal for associate and nonassociate
companies the total amount billed under their separate analysis of billing schedules.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
- --------------------------------------------------------------------------------------
TOTAL CHARGES FOR SERVICE
ACCOUNT DIRECT INDIRECT
NUMBER DESCRIPTION OF ITEMS COST COST TOTAL
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nuclear Power Expenses
----------------------
517 Operation Supervision and Engineering $ 20,694 $ $ 20,694
518 Nuclear Fuel Disposal 7,504 7,504
519 Coolants and Water 2,236 2,236
520 Steam Expenses 15,613 15,613
523 Electric Expenses 4,838 4,838
524 Miscellaneous Nuclear Power Expenses 25,906 25,906
528 Maintenance Supervision and Engineering 19,772 19,772
529 Maintenance of Structures 5,155 5,155
530 Maintenance of Reactor Plant Equipment 22,104 22,104
531 Maintenance of Electric Plant 19,221 19,221
532 Maintenance of Miscellaneous Nuclear Plant 758 758
Transmission Expenses
---------------------
570 Maintenance of Station Equipment 28 28
Administrative and General Expenses
-----------------------------------
920 Salaries and Wages 4,717 4,717
921 Office Supplies and Expenses 1,620 1,620
922 Administrative Expense Transferred-Credit (9) (9)
923 Outside Services Employed 2,730 2,730
924 Property Insurance 3,729 3,729
925 Injuries and Damages 1,906 1,906
926 Employee Pensions and Benefits 13,152 13,152
928 Regulatory Commission Expense 6 6
930.1 General Advertising Expenses 203 203
930.2 Miscellaneous General Expenses 850 850
935 Maintenance of General Plant 64 64
All Other Expenses
------------------
408 Taxes Other Than Income Taxes 4,550 4,550
409 Income Taxes (498) (498)
410 Provision for Deferred Income Tax 704 704
411 Provision for Deferred Income Tax (197) (197)
426.1 Donations 53 53
426.5 Other Deductions 135 135
431 Other Interest Expense 113 113
------------------------------
TOTAL EXPENSES = $ 177,657 $ $ 177,657
421 Miscellaneous Non-Operating Income (19) (19)
Net Income 1 1
------------------------------
TOTAL COST OF SERVICE = $ 177,639 $ $ 177,639
==============================
INSTRUCTION: Total cost of service will equal for associate and nonassociate
companies the total amount billed under their separate analysis of billing schedules.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION BY
DEPARTMENT OR SERVICE FUNCTION
- ------------------------------------------------------------------------------------
ACCOUNT SERVICE
FUNCTION
---------
TOTAL SEABROOK
NUMBER DESCRIPTION OF ITEMS AMOUNT OVERHEAD STATION
- ------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Nuclear Power Expenses
----------------------
517 Operation Supervision and Engineering $ 20,694 $ $ 20,694
518 Nuclear Fuel Disposal 7,504 7,504
519 Coolants and Water 2,236 2,236
520 Steam Expenses 15,613 15,613
523 Electric Expenses 4,838 4,838
524 Miscellaneous Nuclear Power Expenses 25,906 25,906
528 Maintenance Supervision and Engineering 19,772 19,772
529 Maintenance of Structures 5,155 5,155
530 Maintenance of Reactor Plant Equipment 22,104 22,104
531 Maintenance of Electric Plant 19,221 19,221
532 Maintenance of Miscellaneous Nuclear Plant 758 758
Transmission Expenses
---------------------
570 Maintenance of Station Equipment 28 28
Administrative and General Expenses
-----------------------------------
920 Salaries and Wages 4,717 4,717
921 Office Supplies and Expenses 1,620 1,620
922 Administrative Expense Transferred-Credit (9) (9)
923 Outside Services Employed 2,730 2,730
924 Property Insurance 3,729 3,729
925 Injuries and Damages 1,906 1,906
926 Employee Pensions and Benefits 13,152 13,152
928 Regulatory Commission Expense 6 6
930.1 General Advertising Expenses 203 203
930.2 Miscellaneous General Expenses 850 850
935 Maintenance of General Plant 64 64
All Other Expenses
------------------
408 Taxes Other Than Income Taxes 4,550 4,550
409 Income Taxes (498) (498)
410 Provision for Deferred Taxes 704 704
411 Provision for Deferred Taxes (197) (197)
426.1 Donations 53 53
426.5 Other Deductions 135 135
431 Other Interest Expense 113 113
---------- ------- ----------
TOTAL EXPENSES $ 177,657 $ 0 $ 177,657
========== ======= ==========
INSTRUCTIONS: Indicate each department or service function. (See Instruction 01-3,
General Structure of Accounting System: Uniform System of Accounts).
</TABLE>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE XVII
KEYS FOR SERVICE FUNCTIONS
KEYS SERVICE FUNCTION
The individual unit for which NAESCO provides service is listed
separately on Page 24.
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
DEPARTMENTAL ANALYSIS OF SALARIES
NAME OF DEPARTMENT DEPARTMENTAL SALARY EXPENSE
- ------------------ INCLUDED IN AMOUNTS BILLED TO NUMBER OF
---------------------------------- PERSONNEL
Indicate each department TOTAL PARENT OTHER NON END
or service function. AMOUNT COMPANY ASSOCIATES ASSOCIATES OF YEAR
- ----------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Seabrook Station $ 61,715 $ $ 24,712 $ 37,003 837
-------- ------- -------- -------- --------
$ 61,715 $ 0 $ 24,712 $ 37,003 837
======== ======= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
OUTSIDE SERVICES EMPLOYED
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the
aggregate amounts paid to any one payee and included within one subaccount
is less than $100,000, only the aggregate number and amount of all such
payments included within the subaccount need be shown. Provide a subtotal
for each type of service.
- -----------------------------------------------------------------------------------------
RELATIONSHIP
"A"-ASSOCIATE
"NA"-NON
FROM WHOM PURCHASED ASSOCIATE AMOUNT
- -----------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C>
COMPUTER AND COMMUNICATION SERVICES
KPMG Peat Marwick NA $ 251
Northeast Utilities Service Company A 3,099
Miscellaneous (32 payees) NA 333
----------
TOTAL COMPUTER SERVICES $ 3,683
----------
ENGINEERING SERVICES
Normandeau Associates NA $ 920
Northeast Utilities Service Company A 1,794
NUCON Engineering Associates, Inc. NA 301
Raytheon Engineers & Constructors NA 4,494
Yankee Atomic Electric Co. NA 7,989
Miscellaneous (26 payees) NA 346
----------
TOTAL ENGINEERING SERVICES $ 15,844
----------
LEGAL SERVICES
Northeast Utilities Service Company A $ 155
Miscellaneous (15 payees) NA 407
----------
TOTAL LEGAL SERVICES $ 562
----------
SECURITY SERVICES
Green Mountain Security Service of NH NA $ 4,099
Miscellaneous (14 payees) NA 193
----------
TOTAL SECURITY SERVICES $ 4,292
----------
OTHER SERVICES
Occupational Health Physicians NA $ 265
Massachussetts Emergency Management Agency NA 479
Northeast Utilities Service Company A 4,357
Performance Improvement International NA 332
Public Service Company of New Hampshire A 971
Republic Management NA 151
State of New Hampshire NA 226
Miscellaneous (347 payees) NA 742
----------
TOTAL OTHER SERVICES $ 7,523
----------
GRAND TOTAL OUTSIDE SERVICES EMPLOYED $ 31,904
==========
FROM WHOM PURCHASED DESCRIPTION OF SERVICES
COMPUTER AND COMMUNICATION SERVICES
KPMG Peat Marwick Provide support for mainframe
operating environment and software
upgrades.
Northeast Utilities Service Company See note below
ENGINEERING SERVICES
Normandeau Associates Provides environmental monitoring
services as requested.
Northeast Utilities Service Company See note below
NUCON Engineering Associates, Inc. Provides engineering services as
requested.
Raytheon Engineers & Constructors Provides engineering and
administrative services as
requested.
Yankee Atomic Electric Provides engineering, emergency
planning, environmental monitoring,
and other services.
LEGAL SERVICES
Northeast Utilities Service Company See note below
SECURITY SERVICES
Green Mountain Security Service of NH Provides security services for
baseline security support.
OTHER SERVICES
Occupational Health Physicians Provides site medical officer and
review of site medical records and
issues.
Massachussetts Emergency Management Agency Provides administration of state
emergency management agency.
Northeast Utilities Service Company See note below
Performance Improvement International Provides performance monitoring,
trending and improvement services
as requested.
Public Service Company of New Hampshire Provides worker's compensation
administration, facilities and
miscellaneous service.
Republic Management Provides food service for site.
State of New Hampshire Provides administration of state
emergency management agency.
Note: Northeast Utilities Service Company provides centralized
accounting, administrative, data processing, engineering,
financial, legal, operational, planning, purchasing and
other services.
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
EMPLOYEE PENSIONS AND BENEFITS
ACCOUNT 926
INSTRUCTIONS: Provide a listing of each pension plan and benefit program
provided by the service company. Such listing should be
limited to $25,000.
- ------------------------------------------------------------------------
DESCRIPTION AMOUNT
- ------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C>
Pension Plan $ 3,430
Employees Incentive Plan 3,911
Group Life, Long-term Disability, Hospital
and Medical Insurance Expenses 3,666
FAS 106 VEBA Funding 524
Supplemental and Early Retirement Plans 610
Employee Stock Ownership Plan 905
Educational Activities 92
Other Employee Benefits Expenses 14
---------
TOTAL $ 13,152
=========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
GENERAL ADVERTISING EXPENSES
ACCOUNT 930.1
INSTRUCTIONS: Provide a listing of the amount included in Account 930.1,
"General Advertising Expenses," classifying the items
according to the nature of the advertising and as defined in
the account definition. If a particular class includes an
amount in excess of $3,000 applicable to a single payee,
show separately the name of the payee and the aggregate
amount applicable thereto.
- --------------------------------------------------------------------------
DESCRIPTION AMOUNT
- --------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C>
Advertising Winn Company $ 5
Science & Nature Center Barker Specialty 23
New England Aquarium 17
Pride Printers 5
Various (46 items) 153
--------
TOTAL $ 203
========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
MISCELLANEOUS GENERAL EXPENSES
ACCOUNT 930.2
INSTRUCTIONS: Provide a listing of the amount included in Account 930.2,
"Miscellaneous General Expenses," classifying such expenses
according to their nature. Payments and expenses permitted
by Sections 321 (b)(2) of the Federal Election Campaign
Act, as amended by Public Law 94-283 in 1976 (2 U.S.C.
441(b)(2)) shall be separately classified.
- --------------------------------------------------------------------------
DESCRIPTION AMOUNT
- --------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C>
Industry and association dues $ 10
Miscellaneous Payroll Expense 1
Rents 794
Shareholder Services 10
Various (11 items) 35
-------
TOTAL $ 850
=======
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
RENTS
INSTRUCTIONS: Provide a listing of the amount included in accounts
entitled "Rents," classifying such expenses by major
groupings of property, as defined in the account definition
of the Uniform System of Accounts.
- ---------------------------------------------------------------------------
TYPE OF PROPERTY AMOUNT
- ---------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C>
Computers/Data processing equipment $ 87
Communications equipment 149
Vehicles 120
Buildings 109
Equipment and other 1,033
---------
TOTAL $ 1,498
=========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408
INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other Than
Income Taxes." Separate the analysis into two groups:
(1)Other than U.S. Government taxes, and (2) U.S.
Government taxes. Specify each of the various kinds of
taxes and show the amounts thereof. Provide a subtotal for
each class of tax.
- -------------------------------------------------------------------------
KIND OF TAX AMOUNT
- -------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C>
(1) Other Than U.S. Government Taxes:
Insurance Premium Excise Tax $ 83
Property Tax 1
State Unemployment Tax 70
State Business Tax 273
---------
Sub-Total $ 427
---------
(2) U.S. Government Taxes:
Federal Unemployment Tax $ 37
Federal Insurance Contribution Act 4,086
---------
Sub-Total $ 4,123
---------
TOTAL $ 4,550
=========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
DONATIONS
ACCOUNT 426.1
INSTRUCTIONS: Provide a listing of the amount included in Account 426.1,
"Donations," classifying such expenses by its purpose. The
aggregate number and amount of all items of less than $3,000
may be shown in lieu of details.
- -------------------------------------------------------------------------------
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
- -------------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C>
New Hampshire Seacoast United Way Charitable Contributions $ 4
Seacoast Repertory Theater Charitable Contributions 7
Miscellaneous (57 items) Charitable Contributions 42
--------
TOTAL $ 53
========
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
OTHER DEDUCTIONS
ACCOUNT 426.5
INSTRUCTIONS: Provide a listing of the amount included in Account 426.5,
"Other Deductions," classifying such expenses according to
their nature.
- ---------------------------------------------------------------------------
DESCRIPTION NAME OF PAYEE AMOUNT
- ---------------------------------------------------------------------------
(Thousands
of Dollars)
<S> <C>
Advertising Various $ 4
Political activities Murphy, S&H 40
Executive Incentive Compensation Various 91
--------
TOTAL $ 135
========
</TABLE>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE XVIII
NOTES TO STATEMENTS OF INCOME
INSTRUCTIONS: The space below is provided for important notes regarding
the financial statements of income or any account thereof.
Furnish particulars as to any significant increases in
services rendered or expenses incurred during the year.
Notes relating to financial statements shown elsewhere in
this report may be indicated here by reference.
See Notes to Financial Statements on pages 19 through 19G.
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
ORGANIZATION CHART (AS OF DECEMBER 31, 1997)
Executive Vice President and Chief Nuclear Officer Seabrook
- Director of Services
- Station Director
- Director, Nuclear Engineering
- Director, Site Support
- Lead Human Resources Coordinator
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1997
Methods of Allocation
All costs are specific to Seabrook Station and are direct charged.
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
For the Year Ended December 31, 1997
Expenses of Seabrook Station are funded in advance therefore there are
no charges for use of capital.
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
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.
NORTH ATLANTIC ENERGY SERVICE CORPORATION
-----------------------------------------
(Name of Reporting Company)
By: /s/ John J. Roman
-----------------------------------
(Signature of Signing Officer)
John J. Roman - Vice President and Controller
---------------------------------------------
(Printed Name and Title of Signing Officer)
Date: April 23, 1998
--------------------
<TABLE> <S> <C>
<ARTICLE>OPUR2
<CIK>0000906631
<NAME>NORTH ATLANTIC ENERGY SERVICE CORPORATION
<MULTIPLIER>1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-END> DEC-31-1997 DEC-31-1996
<BOOK-VALUE> PER-BOOK PER-BOOK
<NET-SERVICE-COMPANY-PROPERTY> 0 0
<TOTAL-INVESTMENTS> 680 0
<TOTAL-CURRENT-ASSETS> 21,336 55,695
<TOTAL-DEFERRED-DEBITS> 24,328 20,661
<OTHER-ASSETS-AND-DEBITS> 0 0
<TOTAL-ASSETS-AND-DEBITS> 46,344 76,356
<TOTAL-PROPRIETARY-CAPITAL> 12 11
<TOTAL-LONG-TERM-DEBT> 0 0
<NOTES-PAYABLE> 0 0
<NOTES-PAYABLE-ASSOCIATE-COMP> 0 0
<OTHER-CURR-AND-ACCRUED-LIAB> 42,142 73,222
<TOTAL-DEFERRED-CREDITS> 4,081 3,123
<DEFERRED-INCOME-TAX> 109 0
<TOT-LIABIL-AND-PROPRIET-CAP> 46,344 76,356
<SERVICES-ASSOCIATE-COMPANIES> 71,130 51,541
<SERVICES-NON-ASSOCIATE-COMP> 106,509 77,177
<MISC-INCOME-OR-LOSS> 19 35
<TOTAL-INCOME> 177,658 128,753
<SALARIES-AND-WAGES> 61,715 48,581
<EMPLOYEE-PENSION-AND-BENEFIT> 13,152 14,897
<OTHER-EXPENSES> 102,790 65,274
<TOTAL-EXPENSES> 177,657 128,752
<NET-INCOME> 1 1
<TOTAL-EXPENSES-DIRECT-COST> 177,657 128,752
<TOTAL-EXPENSES-INDIRECT-COST> 0 0
<TOT-EXP-DIRECT-AND-INDIRECT> 177,657 128,752
<PERSONNEL-END-OF-YEAR> 837 814
</TABLE>
