Form U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980
ANNUAL REPORT
FOR THE PERIOD
Beginning January 1, 1999 and ending December 31, 1999
--------------- -----------------
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
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
- ----------------------------------------------------------------------------------------
1999 1998
SERVICE COMPANY PROPERTY (Thousands of Dollars)
------------------------
<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) 0 680
------- -------
Total Investments 0 680
------- -------
CURRENT AND ACCRUED ASSETS
--------------------------
131 Cash 1,924 1,799
134 Special deposits 0 0
135 Working funds 0 0
136 Temporary cash investments (Schedule IV) 16 16
141 Notes receivable 0 0
143 Accounts receivable 16,604 14,160
144 Accumulated provision of uncollectible accounts 0 0
146 Accounts receivable from associate companies (Schedule V) 18 12
152 Fuel stock expenses undistributed (Schedule VI) 0 0
154 Materials and supplies 0 0
163 Stores expense undistributed (Schedule VII) 98 24
165 Prepayments 1,342 1,221
174 Miscellaneous current and accrued assets (Schedule VIII) 0 0
------- -------
Total Current and Accrued Assets 20,002 17,232
------- -------
DEFERRED DEBITS
---------------
181 Unamortized Debt Expense 0 0
184 Clearing accounts 0 0
186 Miscellaneous deferred debits (Schedule IX) 31,980 26,769
188 Research, development, or demonstration
expenditures (Schedule X) 0 0
190 Accumulated deferred income taxes 0 0
------- -------
Total Deferred Debits 31,980 26,769
------- -------
TOTAL ASSETS AND OTHER DEBITS $51,982 $44,681
======= =======
</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
- ----------------------------------------------------------------------------------------
1999 1998
(Thousands of Dollars)
<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 2
------- -------
Total Proprietary Capital 12 12
------- -------
LONG-TERM DEBT
--------------
223 Advances from associate companies (ScheduleXII) 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 7,736 9,523
233 Notes payable to associate companies (Schedule XIII) 0 0
234 Accounts payable to associate companies (Schedule XIII) 2,342 1,894
236 Taxes accrued 366 594
237 Interest accrued 0 0
238 Dividends declared 0 0
241 Tax collections payable 0 0
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 37,523 28,088
------- -------
Total Current and Accrued Liabilities 47,967 40,099
------- -------
DEFERRED CREDITS
----------------
253 Other deferred credits 3,846 4,371
255 Accumulated deferred investment tax credits 0 0
------- -------
Total Deferred Credits 3,846 4,371
------- -------
282 ACCUMULATED DEFERRED INCOME TAXES 157 199
--------------------------------- ------- -------
TOTAL LIABILITIES AND PROPRIETARY CAPITAL $51,982 $44,681
======= =======
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
SCHEDULE II - SERVICE COMPANY PROPERTY
- -------------------------------------------------------------------------------------------
BALANCE AT RETIREMENTS BALANCE
BEGINNING OR OTHER AT CLOSE
ACCT DESCRIPTION OF YEAR ADDITIONS SALES CHANGES(1) 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, 1999
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 RETIREMENT(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>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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)
ACCOUNT 123 - INVESTMENT IN ASSOCIATE COMPANIES $ 0 $ 0
ACCOUNT 124 - OTHER INVESTMENTS
Reliance Assurance - Workmen's
Compensation Bond 680 0
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS
Fidelity Institute Tax Exempt Cash
Portfolio 13 13
Citizens Bank Certificate of Deposit 3 3
---- ---
16 16
---- ---
---- ---
TOTAL $696 $16
==== ===
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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 accommoda- tion 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)
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
Northeast Utilities Service Company $ 5 $ 2
Northeast Nuclear Energy Company 5 5
North Atlantic Energy Corporation 1 5
Public Service Company of New Hampshire 1 6
--- ---
TOTAL $12 $18
=== ===
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS:
NONE
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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)
ACCOUNT 152 - FUEL STOCK EXPENSES NONE
UNDISTRIBUTED
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
SCHEDULE VII - STORES EXPENSE UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to
stores expense 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 $ 22 $ 2 $ 24
Amount incurred during the year 2,830 359 3,189
The above stores expenses are billed back to each
of the companies listed below:
Associate Companies:
The Connecticut Light and Power Company (113) (14) (127)
North Atlantic Energy Corporation (997) (123) (1,120)
Non-Associate Companies (1,662) (206) (1,868)
------- ----- ------
TOTAL $ 80 $ 18 $ 98
======= ===== ======
</TABLE>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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)
ACCOUNT 174 - MISCELLANEOUS CURRENT NONE
AND ACCRUED ASSETS
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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 $25,900 $31,111
Westinghouse Reactor Coolant Pump Settlement 600 555
Accounting Treatment Change for Payroll 299 269
Miscellaneous (>100 items) (64) 14
Preliminary Engineering for:
Steam generator blowdown 30 30
Miscellaneous (3 items) 4 1
------- -------
TOTAL $26,769 $31,980
======= =======
</TABLE>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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)
ACCOUNT 188 - RESEARCH, DEVELOPMENT OR NONE
DEMONSTRATION EXPENDITURES
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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)
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
$2 $0 $0 $2
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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)
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE COMPANIES
NONE
- -------------------------------------------------------------------------------
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES
Northeast Utilities Service Company $ 1,767 $ 2,288
Northeast Nuclear Electric Company 92 18
Public Service Company of New Hampshire 34 36
Miscellaneous (1 item) 1 0
------- -------
TOTAL $ 1,894 $ 2,342
======= =======
- -------------------------------------------------------------------------------
ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES
Accrued payroll and other employee payables $ 2,149 $ 5,817
Accrued Pension Cost 23,144 29,362
On-hand operations funding from associate companies:
North Atlantic Energy Corporation 1,006 843
The Connecticut Light & Power Company 113 95
On-hand operations funding from
non-associate companies 1,676 1,406
------- -------
TOTAL $28,088 $37,523
======= =======
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
FOR THE YEAR ENDED DECEMBER 31, 1999
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish
particulars as to any significant contingent assets or
liabilities existing at the end of the year. Notes relating
to financial statements shown elsewhere in this report may
be indicated here by reference.
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 which comprise, in part, the Northeast Utilities System (the NU
system) and are wholly owned by NU.
The NU system furnishes franchised retail electric service in Connecticut, New
Hampshire, and western Massachusetts through three wholly owned subsidiaries:
CL&P, PSNH, and WMECO. NAEC sells all of its entitlement to the capacity and
output of the Seabrook Nuclear Power Project (the Project or Seabrook) to
PSNH under two life-of-unit, full cost recovery contracts. In addition to its
retail service, the NU system furnishes firm and other wholesale electric
services to various municipalities and other utilities, and participates in
limited retail access programs, which provide off-system retail electric
service. The NU system serves in excess of 30 percent of New England's
electric needs and is one of the 24 largest electric utility systems in the
country as measured by revenues.
The Company acts as agent in operating the Project 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, CL&P and nine non-affiliated
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, 1999 were as follows:
PARTICIPANTS OWNERSHIP SHARE
- ------------ ---------------
Canal Electric Company 3.52317%
Great Bay Power Corporation 12.13240
Hudson Light & Power Department .07737
Little Bay Power Corporation 2.89989
Massachusetts Municipal Wholesale Electric Company 11.59340
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 Connecticut Light and Power Company 4.05985
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
$6,034,000 and $6,281,000 in 1999 and 1998, 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 $587,000 and
$358,000 in 1999 and 1998, respectively.
All transactions among affiliated companies 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. These expenses are recorded by
the Joint Owners. Pursuant to the Managing Agent Agreement, NAESCO does not
earn a return on capital; 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 and its subsidiaries, including the Company,
are 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. The Company, therefore, follows
the accounting policies prescribed by the FERC.
2. PENSION AND POSTRETIREMENT BENEFITS
Pension: 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 the employees' highest compensation
during 60 consecutive months of employment. The Company's allocated portion
of the NU system's pension cost for 1999 and 1998, part of which was
capitalized and billed as utility plant, approximated $6,239,000 and
$3,003,000, 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.
Postretirement Benefits: The Company also 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 retiring from the Company who have met
specified service requirements. For current employees and certain retirees,
the total postretirement benefit is limited to two times the 1993 per-retiree
health care cost. The postretirement benefit obligation has been calculated
based on this assumption. The expected cost of postretirement benefits,
primarily health and life insurance benefits are charged to expense during the
years that eligible employees render service. The Company is funding its
postretirement benefit costs through external trusts. The annually funded
amounts are tax deductible under the Internal Revenue Code. Actuarially
determined total postretirement benefits, part of which were capitalized and
billed as utility plant, approximated $804,000 in 1999 and $704,000 in 1998.
Pension and postretirement benefit assets are invested primarily in domestic
and international equity securities and bonds.
The components of net cost for the Company (in thousands) are:
As of December 31,
Pension Benefits Postretirement Benefits
1999 1998 1999 1998
---- ---- ---- ----
Change in benefit obligation:
Benefit obligation at
beginning of year........... $(72,762) $(59,416) $ (8,746) $ (7,599)
Service cost.................. (4,619) (3,888) (642) (551)
Interest cost................. (5,280) (4,438) (674) (582)
Plan Amendment................ (3,157) - - -
Transfers..................... (23) (437) - -
Special Termination Benefits.. (2,318) - - -
Actuarial gain/(loss)......... 6,442 (5,307) 95 (318)
Benefits paid................. 834 724 580 304
-------- -------- -------- --------
Benefit obligation at
end of year................. (80,883) (72,762) (9,387) (8,746)
Change in plan assets:
Fair value of plan assets at
beginning of year............. 65,263 57,396 7,574 6,447
Actual return on plan assets.. 9,917 8,154 932 825
Employer contribution......... - - 804 606
Transfers..................... (23) 437 - -
Benefits Paid................. (834) (724) (580) (304)
-------- -------- -------- --------
Fair value of plan assets at
end of year................. 74,323 65,263 8,730 7,574
Funded status at year end..... (6,560) (7,499) (657) (1,172)
Unrecognized net gain......... (31,366) (21,724) (1,394) (1,037)
Unrecognized prior
service cost................ 7,934 5,386 - -
Unrecognized net transition
obligation.................. 630 693 2,051 2,209
-------- -------- -------- --------
Accrued benefit cost $(29,362) $(23,144) $ - $ -
======== ======== ======== ========
The following actuarial assumptions were used in calculating the plan's year-
end funded status:
As of December 31,
Pension Benefits Postretirement Benefits
1999 1998 1999 1998
---- ---- ---- ----
Discount rate................. 7.75% 7.00% 7.75% 7.00%
Compensation/progression rate. 4.75 4.25 4.75 4.25
Health care cost trend
rate (a).................... N/A N/A 5.57 5.22
(a) The annual growth in per capita cost of covered health care benefits was
assumed to decrease to 4.90 percent by 2001.
The components of net periodic benefit cost (in thousands) are:
For the Years Ended December 31,
Pension Benefits Postretirement Benefits
1999 1998 1999 1998
---- ---- ---- ----
Service cost.................. $ 4,619 $ 3,888 $ 642 $ 551
Interest cost................. 5,280 4,438 674 582
Expected return on plan
assets...................... (5,540) (4,721) (574) (478)
Amortization of unrecognized
net gain.................... (1,110) (1,045) - -
Amortization of prior
service cost................ 609 380 - -
Amortization of unrecognized
net transition obligation... 63 63 158 158
Special termination benefits.. 2,318 - - -
Other amortization, net....... - - (96) (109)
------- ------- ----- -----
Net periodic cost............. $ 6,239 $ 3,003 $ 804 $ 704
======= ======= ===== =====
For calculating pension and postretirement benefit costs, the following
assumptions were used:
For the Years Ended December 31,
Pension Benefits Postretirement Benefits
1999 1998 1999 1998
---- ---- ---- ----
Discount rate................ 7.00% 7.25% 7.00% 7.25%
Expected long-term rate
of return.................. 9.50 9.50 N/A N/A
Compensation/progression
rate....................... 4.25 4.25 4.25 4.25
Long term rate of return
Health assets, net of tax.. N/A N/A 7.50 7.75
Life assets................ N/A N/A 9.50 9.50
Assumed health care cost trend rates have a significant effect on the amounts
reported for the health care plans. The effect of changing the assumed health
care cost trend rate by one percentage point in each year would have the
following effects (in thousands):
One Percentage One Percentage
Point Increase Point Decrease
Effect on total service and
interest cost components $ 40 $ (42)
Effect on postretirement
benefit obligation 308 (329)
The trust holding the health 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 $1,508,000
and $1,753,000 in 1999 and 1998, 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 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 was required. Funds had been set
aside in an interest bearing collateral account for such purpose. The balance
at December 31, 1998 was approximately $680,000. The assurance is no longer
required and the funds were returned to NAESCO on October 15, 1999.
6. INCOME TAX EXPENSE
The components of the Federal and state income tax provisions (in thousands)
are:
For the Years Ended
December 31,
1999 1998
---- ----
Current income taxes:
Federal................................. $ 151 $ 357
State................................... (313) -
----- -----
Total current........................ (162) 357
Deferred income taxes, net:
Federal................................. (55) 103
State................................... 13 (13)
----- -----
Total deferred....................... (42) 90
----- -----
Total income tax expense............. $(204) $ 447
===== =====
All income taxes were charged to operating expenses in both 1999 and 1998.
Deferred income taxes (in thousands) are comprised of the tax effects of
temporary differences as follows:
For the Years Ended
December 31,
1999 1998
---- ----
Software amortization..................... $ 108 $ 216
Injuries and damages reserve.............. (101) (51)
Accrued vacation.......................... (8) 11
Other..................................... (41) (86)
----- -----
Deferred income taxes, net.............. $ (42) $ 90
===== =====
A reconciliation between income tax expense and the expected tax expense at
the applicable statutory rate (in thousands) is as follows:
For the Years Ended
December 31,
1999 1998
---- ----
Expected Federal income tax at
35 percent of pretax income............. $ (71) $ 157
Tax effect of differences:
Adjustment for prior years taxes........ (51) 266
Other, net.............................. (82) 24
----- -----
Total income tax expense.............. $(204) $ 447
===== =====
The Company, as a wholly-owned subsidiary of NU, is included in NU's
consolidated tax return. Income tax expense is determined on a separate
company basis.
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
SCHEDULE XV
COMPARATIVE INCOME STATEMENT
- -------------------------------------------------------------------------------
ACCT DESCRIPTION 1999 1998
- -------------------------------------------------------------------------------
(Thousands of Dollars)
INCOME
------
457 Services Rendered to Associate Companies $ 68,558 $ 57,982
458 Services Rendered to Nonassociate Companies 102,657 86,821
421 Miscellaneous Income or Loss 112 39
-------- --------
Total Income 171,327 144,842
-------- --------
EXPENSE
-------
Nuclear Power Expenses
517 Operation Supervision and Engineering 23,451 24,572
518 Nuclear Fuel Expense 8,209 7,927
519 Coolants and Water 2,180 2,011
520 Steam Expenses 16,999 12,385
523 Electric Expenses 4,520 4,138
524 Miscellaneous Nuclear Power Expenses 28,092 26,858
528 Maintenance Supervision and Engineering 10,994 10,098
529 Maintenance of Structures 3,328 7,899
530 Maintenance of Reactor Plant Equipment 21,160 9,704
531 Maintenance of Electric Plant 16,674 10,920
532 Maintenance of Miscellaneous Nuclear Plant 499 590
Transmission Expenses
570 Maintenance of Station Equipment 135 15
Administrative and General Expenses
920 Salaries and Wages 4,368 3,609
921 Office Supplies and Expenses 828 1,100
922 Administrative Expense Transferred-Credit 0 0
923 Outside Services Employed 2,221 2,495
924 Property Insurance 1,739 1,886
925 Injuries and Damages 1,768 1,504
926 Employee Pensions and Benefits 17,950 10,861
928 Regulatory Commission Expense 6 1
930.1 General Advertising Expenses 99 186
930.2 Miscellaneous General Expenses 247 275
931 Rents 809 456
935 Maintenance of General Plant 97 15
All Other Expenses
408 Taxes Other Than Income Taxes 4,740 4,412
409 Income Taxes (162) 358
410 Provision for Deferred Income Taxes 171 435
411 Provision for Deferred Income Taxes (213) (345)
426.1 Donations 98 75
426.5 Other Deductions 269 319
431 Other Interest Expense 51 83
-------- --------
Total Expense 171,327 144,842
-------- --------
Net Income or (Loss) $ 0 $ 0
======== ========
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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
--------------------------------------------
The Connecticut Light and Power $ 6,951 $ $ $ 6,951
Company
North Atlantic Energy Corporation 61,607 61,607
------- ----- ----- -------
TOTAL $68,558 $ 0 $ 0 $68,558
======= ===== ===== =======
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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 $ 6,032 $ 0 $ 0 $ 6,032 $ 0 $ 6,032
Great Bay Power Corporation 20,773 20,773 20,773
Hudson Light & Power Dept. 132 132 132
Little Bay Power Corporation 457 457 457
Massachusetts Municipal Wholesale
Electric Company 19,850 19,850 19,850
Montaup Electric Company 4,508 4,508 4,508
New England Power Company 17,049 17,049 17,049
New Hampshire Electric Coop. 3,722 3,722 3,722
Taunton Municipal Lighting Plant 172 172 172
United Illuminating Company 29,962 29,962 29,962
-------- ------ ------ -------- ----- --------
$102,657 $ 0 $ 0 $102,657 $ 0 $102,657
======== ====== ====== ======== ===== ========
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, 1999
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 $ 9,390 $ 0 $ 9,390
518 Nuclear Fuel Disposal 3,287 3,287
519 Coolants and Water 873 873
520 Steam Expenses 6,807 6,807
523 Electric Expenses 1,810 1,810
524 Miscellaneous Nuclear Power Expenses 11,248 11,248
528 Maintenance Supervision and Engineering 4,402 4,402
529 Maintenance of Structures 1,333 1,333
530 Maintenance of Reactor Plant Equipment 8,473 8,473
531 Maintenance of Electric Plant 6,677 6,677
532 Maintenance of Miscellaneous Nuclear Plant 200 200
Transmission Expenses
570 Maintenance of Station Equipment 54 54
Administrative and General Expenses
920 Salaries and Wages 1,749 1,749
921 Office Supplies and Expenses 332 332
922 Administrative Expense Transferred-Credit 0 0
923 Outside Services Employed 889 889
924 Property Insurance 696 696
925 Injuries and Damages 708 708
926 Employee Pensions and Benefits 7,188 7,188
928 Regulatory Commission Expense 2 2
930.1 General Advertising Expenses 40 40
930.2 Miscellaneous General Expenses 99 99
931 Rents 324 324
935 Maintenance of General Plant 39 39
All Other Expenses
408 Taxes Other Than Income Taxes 1,898 1,898
409 Income Taxes (65) (65)
410 Provision for Deferred Income Tax 68 68
411 Provision for Deferred Income Tax (85) (85)
426.1 Donations 39 39
426.5 Other Deductions 108 108
431 Other Interest Expense 20 20
--------------------------
TOTAL EXPENSES = 68,603 0 68,603
421 Miscellaneous Non-Operating Income (45) (45)
Net Income 0 0
---------------------------
TOTAL COST OF SERVICE = $68,558 $ 0 $68,558
===========================
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, 1999
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 $ 14,061 $ 0 $ 14,061
518 Nuclear Fuel Disposal 4,922 4,922
519 Coolants and Water 1,307 1,307
520 Steam Expenses 10,192 10,192
523 Electric Expenses 2,710 2,710
524 Miscellaneous Nuclear Power Expenses 16,844 16,844
528 Maintenance Supervision and Engineering 6,592 6,592
529 Maintenance of Structures 1,995 1,995
530 Maintenance of Reactor Plant Equipment 12,687 12,687
531 Maintenance of Electric Plant 9,997 9,997
532 Maintenance of Miscellaneous Nuclear Plant 299 299
Transmission Expenses
570 Maintenance of Station Equipment 81 81
Administrative and General Expenses
920 Salaries and Wages 2,619 2,619
921 Office Supplies and Expenses 496 496
922 Administrative Expense Transferred-Credit 0 0
923 Outside Services Employed 1,332 1,332
924 Property Insurance 1,043 1,043
925 Injuries and Damages 1,060 1,060
926 Employee Pensions and Benefits 10,762 10,762
928 Regulatory Commission Expense 4 4
930.1 General Advertising Expenses 59 59
930.2 Miscellaneous General Expenses 148 148
931 Rents 486 486
935 Maintenance of General Plant 58 58
All Other Expenses
408 Taxes Other Than Income Taxes 2,842 2,842
409 Income Taxes (97) (97)
410 Provision for Deferred Income Tax 103 103
411 Provision for Deferred Income Tax (128) (128)
426.1 Donations 59 59
426.5 Other Deductions 160 160
431 Other Interest Expense 31 31
-----------------------------
TOTAL EXPENSES = 102,724 0 102,724
421 Miscellaneous Non-Operating Income (67) (67)
Net Income 0 0
-----------------------------
TOTAL COST OF SERVICE = $102,657 $ 0 $102,657
=============================
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, 1999
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 $ 23,451 $ 0 $ 23,451
518 Nuclear Fuel Disposal 8,209 8,209
519 Coolants and Water 2,180 2,180
520 Steam Expenses 16,999 16,999
523 Electric Expenses 4,520 4,520
524 Miscellaneous Nuclear Power Expenses 28,092 28,092
528 Maintenance Supervision and Engineering 10,994 10,994
529 Maintenance of Structures 3,328 3,328
530 Maintenance of Reactor Plant Equipment 21,160 21,160
531 Maintenance of Electric Plant 16,674 16,674
532 Maintenance of Miscellaneous Nuclear Plant 499 499
Transmission Expenses
570 Maintenance of Station Equipment 135 135
Administrative and General Expenses
920 Salaries and Wages 4,368 4,368
921 Office Supplies and Expenses 828 828
922 Administrative Expense Transferred-Credit 0 0
923 Outside Services Employed 2,221 2,221
924 Property Insurance 1,739 1,739
925 Injuries and Damages 1,768 1,768
926 Employee Pensions and Benefits 17,950 17,950
928 Regulatory Commission Expense 6 6
930.1 General Advertising Expenses 99 99
930.2 Miscellaneous General Expenses 247 247
931 Rents 810 810
935 Maintenance of General Plant 97 97
All Other Expenses
408 Taxes Other Than Income Taxes 4,740 4,740
409 Income Taxes (162) (162)
410 Provision for Deferred Income Tax 171 171
411 Provision for Deferred Income Tax (213) (213)
426.1 Donations 98 98
426.5 Other Deductions 268 268
431 Other Interest Expense 51 51
---------------------------
TOTAL EXPENSES = 171,327 0 171,327
421 Miscellaneous Non-Operating Income (112) (112)
Net Income 0 0
---------------------------
TOTAL COST OF SERVICE = $171,215 $ 0 $171,215
===========================
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, 1999
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 $ 23,451 $ 0 $ 23,451
518 Nuclear Fuel Disposal 8,209 8,209
519 Coolants and Water 2,180 2,180
520 Steam Expenses 16,999 16,999
523 Electric Expenses 4,520 4,520
524 Miscellaneous Nuclear Power Expenses 28,092 28,092
528 Maintenance Supervision and Engineering 10,994 10,994
529 Maintenance of Structures 3,328 3,328
530 Maintenance of Reactor Plant Equipment 21,160 21,160
531 Maintenance of Electric Plant 16,674 16,674
532 Maintenance of Miscellaneous Nuclear Plant 499 499
Transmission Expenses
570 Maintenance of Station Equipment 135 135
Administrative and General Expenses
920 Salaries and Wages 4,368 4,368
921 Office Supplies and Expenses 828 828
922 Administrative Expense Transferred Credit 0 0
923 Outside Services Employed 2,221 2,221
924 Property Insurance 1,739 1,739
925 Injuries and Damages 1,768 1,768
926 Employee Pensions and Benefits 17,950 17,950
928 Regulatory Commission Expense 6 6
930.1 General Advertising Expenses 99 99
930.2 Miscellaneous General Expenses 247 247
931 Rents 809 809
935 Maintenance of General Plant 97 97
All Other Expenses
408 Taxes Other Than Income Taxes 4,740 4,740
409 Income Taxes (162) (162)
410 Provision for Deferred Taxes 171 171
411 Provision for Deferred Taxes (213) (213)
426.1 Donations 98 98
426.5 Other Deductions 269 269
431 Other Interest Expense 51 51
-------- ------ --------
TOTAL EXPENSES $171,327 $ 0 $171,327
======== ====== ========
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, 1999
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, 1999
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 $62,020 $ 0 $24,834 $37,186 797
------- ----- ------- ------- ---
$62,020 $ 0 $24,834 $37,186 797
======= ===== ======= ======= ===
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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
- -----------------------------------
Bell Atlantic NA $ 348
Northeast Utilities Service Company A 2,635
Miscellaneous (66 payees) NA 1,110
-------
TOTAL COMPUTER SERVICES $ 4,093
=======
ENGINEERING SERVICES
- --------------------
ABB, CE NA $ 148
Altran Corp. NA 136
Corestar International NA 162
NES, Inc. NA 175
Northeast Utilities Service Company A 334
NUCON Engineering Associates, Inc. NA 235
Proto Power Corp. NA 116
Raytheon Nuclear Inc. NA 605
Sequoia Consulting Group, Inc. NA 143
Tekton Resources NA 624
Westinghouse Electric Co. NA 479
Miscellaneous (25 payees) NA 390
-------
TOTAL ENGINEERING SERVICES $ 3,547
=======
LEGAL SERVICES
- --------------
Morgan, Lewis, & Bokius, LLP NA $ 131
Northeast Utilities Service Company A 63
Miscellaneous (12 payees) NA 156
-------
TOTAL LEGAL SERVICES $ 350
=======
SECURITY SERVICES
- -----------------
Green Mountain Security Service of NH NA $ 4,079
-------
TOTAL SECURITY SERVICES $ 4,079
=======
OTHER SERVICES
- --------------
Adecco/TAD NA $ 417
Bartlett Nuclear, Inc. NA 1,268
Food With a Flair NA 120
Ibex Corporation NA 115
Normandeau Associates, Inc. NA 1,030
Northeast Utilities Service Company A 3,002
NUCON Engineering Associates, Inc. NA 351
NUMANCO L.L.P. NA 1,485
Public Service Company of New Hampshire A 518
Scudder Kemper Investments, Inc. NA 144
Spec Group Holdings, Inc. NA 261
The Pacific Institute NA 150
Miscellaneous (827 payees) NA 3,259
-------
TOTAL OTHER SERVICES $12,120
=======
GRAND TOTAL OUTSIDE SERVICES EMPLOYED $24,189
=======
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
OUTSIDE SERVICES EMPLOYED
FROM WHOM
PURCHASED DESCRIPTION OF SERVICES
- ------------------------------------------------------------------------------------
<S> <C>
COMPUTER AND COMMUNICATION SERVICES
Bell Atlantic Provides communication services.
Northeast Utilities
Service Company See note below
ENGINEERING SERVICES
- --------------------
ABB, CE Provides technical inspection and analysis services.
Altran Corp. Provides engineering services as requested.
Corestar International Provides technical inspection and analysis services.
NES, Inc. Provides technical inspection and analysis services.
Northeast Utilities
Service Company See note below
NUCON Engineering
Associates, Inc. Provide temporary, technical manpower as needed.
Proto Power Corp. Provides technical inspection and analysis services.
Raytheon Nuclear Inc. Provides engineering services as requested.
Sequoia Consulting
Group, Inc. Provide temporary, technical manpower as needed.
Tekton Resources Provides engineering services as requested.
Westinghouse
Electric Co. Provides engineering, technical, and site services
as requested.
LEGAL SERVICES
- --------------
Morgan, Lewis, &
Bokius, LLP Provides legal services as requested.
Northeast Utilities
Service Company See note below
SECURITY SERVICES
- -----------------
Green Mountain Security
Service of NH Provides security services for baseline security support.
OTHER SERVICES
- --------------
Adecco / TAD Provide temporary, technical manpower as needed.
Bartlett Nuclear, Inc. Provide temporary, technical manpower and waste services
as needed.
Food With a Flair Provide food service for site meetings.
Ibex Corporation Provides consulting and improvement services as requested.
Normandeau
Associates, Inc. Provides environmental monitoring services as requested.
Northeast Utilities
Service Company See note below
NUCON Engineering
Associates, Inc. Provide temporary, technical manpower as needed.
NUMANCO L.L.P. Provide temporary, technical manpower as needed.
services as requested.
Public Service Company
of New Hampshire Provides worker's compensation administration, facilities and
miscellaneous service.
Scudder Kemper
Investments, Inc. Provide Decommissioning Fund management.
Spec Group Holdings,
Inc. Provide temporary, technical manpower as needed.
The Pacific Institute Provides performance monitoring, trending, and improvement
services as requested.
Note: Northeast Utilities Service Company provides centralized accounting, administrative,
data processing, engineering, financial, legal, operational, planning, purchasing
and other services.
</TABLE>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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)
Pension Plan $ 5,810
Incentive Goals Plan 4,484
Group Life, Long-term Disability, Hospital
and Medical Insurance Expenses 5,074
FAS 106 VEBA Funding 764
Supplemental and Early Retirement Plans 643
Employee Stock Option Plan 992
Educational Activities 93
Other Employee Benefits Expenses 90
-------
TOTAL $17,950
=======
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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)
Science & Nature Center ADECCO/TAD $12
Barker Specialty 4
Floyd, James L. 13
New England Aquarium Services 14
Stone Signs & Designs 7
Various (27 items) 49
---
TOTAL $99
===
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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)
Information Technology/Communication Services $ 90
Medical Services 70
Research and Development 63
Various (36 items) 24
----
TOTAL $247
====
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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)
Computers/Data processing equipment $ 394
Communications equipment 104
Vehicles 18
Buildings 238
Equipment and other 754
------
TOTAL $1,508
======
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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)
(1) Other Than U.S. Government Taxes:
Insurance Premium Excise Tax $ 27
Property Tax 20
State Unemployment Tax 22
State Business Tax 152
------
Sub-Total 221
------
(2) U.S. Government Taxes:
Federal Unemployment Tax 50
Federal Insurance Contribution Act 4,469
------
Sub-Total 4,519
------
TOTAL $4,740
======
<TABLE>
<CAPTION>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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 $62
New Hampshire Estuaries Project Charitable Contributions 10
Miscellaneous (71 items) Charitable Contributions 26
---
TOTAL $98
===
</TABLE>
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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)
Penalties NRC $ 55
Political activities Murphy, S&H 41
Employees 36
Executive Incentive Compensation Various 137
----
TOTAL $269
====
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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 19A through 19G.
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
ORGANIZATION CHART (AS OF DECEMBER 31, 1999)
Executive Vice President and Chief Nuclear Officer Seabrook
- Director, Engineering
- Station Director
- Director, Support Services
- Manager, Human Resources and Organization Development
- Manager, Nuclear Oversight
- Manager, Environmental and Community Relations
ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION
For the Year Ended December 31, 1999
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, 1999
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 Conmmission issued
thereunder, the undersigned company has duly caused this report to be signed on
its behalf by the undersigned office thereunto duly authorized.
NORTH ATLANTIC ENERGY SERVICE CORPORATION
-----------------------------------------
(Name of Reporting Company)
By:
---------------------------------
(Signature of Signing Officer)
John J. Roman - Vice President and Controller
---------------------------------------------
(Printed Name and Title of Signing Officer)
Date: April 20, 2000
--------------
<TABLE> <S> <C>
<ARTICLE>OPUR2
<CIK>0000906631
<NAME>NORTH ATLANTIC ENERGY SERVICE CORPORATION
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<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-END> DEC-31-1999 DEC-31-1998
<BOOK-VALUE> PER-BOOK PER-BOOK
<NET-SERVICE-COMPANY-PROPERTY> 0 0
<TOTAL-INVESTMENTS> 0 680
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<TOTAL-DEFERRED-DEBITS> 31,980 26,769
<OTHER-ASSETS-AND-DEBITS> 0 0
<TOTAL-ASSETS-AND-DEBITS> 51,982 44,681
<TOTAL-PROPRIETARY-CAPITAL> 12 12
<TOTAL-LONG-TERM-DEBT> 0 0
<NOTES-PAYABLE> 0 0
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<OTHER-CURR-AND-ACCRUED-LIAB> 47,967 40,099
<TOTAL-DEFERRED-CREDITS> 3,846 4,371
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<SERVICES-ASSOCIATE-COMPANIES> 68,558 57,982
<SERVICES-NON-ASSOCIATE-COMP> 102,657 86,821
<MISC-INCOME-OR-LOSS> 112 39
<TOTAL-INCOME> 171,327 144,842
<SALARIES-AND-WAGES> 62,020 59,569
<EMPLOYEE-PENSION-AND-BENEFIT> 17,950 10,861
<OTHER-EXPENSES> 91,357 74,412
<TOTAL-EXPENSES> 171,327 144,842
<NET-INCOME> 0 0
<TOTAL-EXPENSES-DIRECT-COST> 171,327 144,842
<TOTAL-EXPENSES-INDIRECT-COST> 0 0
<TOT-EXP-DIRECT-AND-INDIRECT> 171,327 144,842
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