UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM U-9C-3
QUARTERLY REPORT PURSUANT TO RULE 58
For the quarterly period ended March 31, 2001
Northeast Utilities
-----------------------------------
(Name of registered holding company)
107 Selden Street, Berlin, CT 06037
-----------------------------------
(Address of principal executive offices)
Name and telephone number of officer to whom inquiries concerning this report
should be directed:
John J. Roman, Vice President and Controller
Telephone number: 860-665-5000
GENERAL INSTRUCTIONS
A. Use of Form
1. A reporting company, as defined herein, shall file a report on this
form within 60 days after the end of each of the first three quarters,
and within 90 days after the end of the fourth quarter, of the fiscal
year of the registered holding company. The period beginning on the
date of effectiveness of rule 58 and ending at the end of the quarter
following the quarter in which the rule becomes effective shall
constitute the initial period for which any report shall be filed,
if applicable.
2. The requirement to provide specific information by means of this form
supersedes any requirement by order of the Commission to provide
identical information by means of periodic certificates under rule 24;
but does not so supersede and replace any requirement by order to
provide information by means of an annual report on Form U-13-60.
3. Information with respect to reporting companies that is required by
Form U-13-60 shall be provided exclusively on that form.
4. Notwithstanding the specific requirements of this form, this Commission
may informally request such further information as, in its opinion, may
be necessary or appropriate.
B. Statements of Monetary Amounts and Deficits
1. Amounts included in this form and in related financial statements may
be expressed in whole dollars, thousands of dollars or hundred
thousands of dollars.
2. Deficits and other similar entries shall be indicated by either
brackets or parentheses. An explanation should be provided by
footnote.
C. Formal Requirements
This form, including exhibits, shall be filed with Commission
electronically pursuant to Regulation S-T (17 CFR 232.10 et seq.). A
conformed copy of each such report shall be filed with each state
commission having jurisdiction over the retail rates of a public utility
company that is an associate company of a reporting company. Each report
shall provide the name and telephone number of the person to whom inquiries
concerning the report should be directed.
D. Definitions
As used in this form, the word "reporting company" means an energy-related
company or gas-related company, as defined in rule 58(b). All other words
and terms have the same meaning as in the Public Utility Holding Company
Act of 1935, as amended, and the rules and regulations thereunder.
ITEM 1 - ORGANIZATION CHART
------------------------------------------------------------------------------
Instructions
-----------------
1. Complete Item 1 only for the first three calendar quarters of the fiscal
year of the registered holding company.
2. Under the caption "Name of Reporting Company," list each energy-related and
gas-related company and each system company that directly or indirectly
holds securities thereof. Add the designation "(new)" for each reporting
company of which securities were acquired during the period, and the
designation "(*)" for each inactive company.
3. Under the caption "Percentage of Voting Securities Held," state the
aggregate percentage of the outstanding voting securities of the reporting
company held directly or indirectly by the registered holding company at the
end of the quarter.
4. Provide a narrative description of each reporting company's activities
during the reporting period.
------------------------------------------------------------------------------
Percentage Activities
Energy of Voting reported
Name of or Gas Date of State of Securities Nature of during the
Reporting Co. Related Organization Organization Held Business period
----------------- ------- ------------ ------------- ----------------- -------------- ----------
NU Holding 1/4/99 Connecticut 100% by Unregulated (A)
Enterprises, Inc. Northeast businesses
Utilities holding
company
Select Energy 9/26/96 Connecticut 100% by Invest in (B)
Energy, Inc. NU energy-related
Enterprises, Inc. activities
Select Energy 3/17/99 Connecticut 100% by Invest in (C)
Energy NU energy-related
Portland Enterprises, Inc. activities
Pipeline, Inc.
Northeast Energy 1/4/99 Connecticut 100% by Invest in (D)
Generation NU energy-related
Services Enterprises, Inc. activities
Company
HEC Inc. Energy 6/19/90 Massachusetts 100% by Invest in (E)
NU energy-related
Enterprises, Inc. activities
Reeds Ferry Energy 7/15/64 New 100% by Invest in (F)
Supply Co., Inc. Hampshire HEC Inc. energy-related
activities
HEC/Tobyhanna Energy 9/28/99 Massachusetts 100% by Invest in (G)
Energy Project, HEC Inc. energy-related
Inc. activities
Select Energy Energy 10/12/94 Massachusetts 100% by Invest in (H)
Contracting, Inc. HEC Inc. energy-related
activities
Yankee Energy Holding 2/15/00 Connecticut 100% by Public (I)
System Inc. Northeast Utility
Utilities Holding
Company
Yankee Energy Energy 7/2/93 Connecticut 100% by Invest in (J)
Services Company Yankee Energy energy-related
System Inc. activities
Housatonic Energy 10/16/87 Connecticut 100% by Invest in (K)
Corporation Yankee Energy energy-related
System Inc. activities
* Southbridge Energy 12/29/97 Delaware 95% by Operate and (L)
Power & Yankee Energy maintain a
Thermal, LLC Services Company cogeneration
5% by facility
Housatonic
Corporation
R. M. Energy 11/22/94 Connecticut 100% by Invest in (M)
Services, Inc. Yankee Energy energy-related
System Inc. activities
Acumentrics Energy 09/13/00 Massachusetts 5% by Invest in (N)
Corporation NU energy-related
Enterprises, Inc. activities
ERI/HEC Energy 09/30/00 Delaware 50% by Invest in (O)
EFA-Med, LLC HEC Inc. energy-related
activities
E. S. BOULOS Energy 01/19/01 Connecticut 100% by Invest in (P)
COMPANY Northeast energy-related
(New) Generation activities
Services Company
NGS MECHANICAL Energy 01/24/01 Connecticut 100% by Provide (Q)
COMPANY Northeast mechanical
(New) Generation construction
Services Company and maintenance
services
HEC/CJTS ENERGY Energy 03/02/01 Delaware 100% by Facilitate (R)
CENTER LLC HEC Inc. construction
(New) financing
* Sold in June 2000.
(A) NU Enterprises, Inc. is not the "reporting company" but is included in
this Item 1 because it holds, directly or indirectly, voting securities
issued by reporting companies as indicated above.
(B) Select Energy, Inc. (Select Energy) provides both wholesale and retail
energy services. Select Energy participates in open-access retail
electricity markets in New England, New York and the Mid-Atlantic regions.
Select Energy markets electricity, natural gas, oil, and energy-related
products and services in order to enhance its core electricity service and
customer relationships. Select Energy is a licensed retail electricity
supplier in the states of Connecticut, Delaware, Maine, Maryland,
Massachusetts, New Jersey, New York, Pennsylvania, and Rhode Island.
Select Energy is a registered gas marketer with local gas distribution
companies in the states of Connecticut, Delaware, Maine, Maryland,
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, and
Rhode Island.
(C) Select Energy Portland Pipeline, Inc. (SEPPI) acquired a 5% interest in
Portland Natural Gas Transmission System partnership in March 1999.
(D) Effective January 4, 1999, Northeast Generation Services Company (NGS) was
established to provide a full range of energy-related operation and
maintenance services for large industrial, institutional and power
generation customers throughout the 11-state Northeast area. NGS' current
business segments focus on providing turnkey Manage and Operate Services
(MOS) and also a full range of Industrial Services (IS) and Consulting
Services (CS).
MOS is a service that is designed for generation asset owners. NGS has
the ability to offer station management and operation services with a
focus on optimizing the value of that specific asset with the owner.
Within the IS platform, its offerings include mechanical and electrical
construction and maintenance services, as well as environmental
maintenance/compliance services. Within the CS platform, the product and
service offerings include engineering and environmental consulting
services, with an emphasis on power plant system design.
(E) HEC Inc. is not the "reporting company" but is included in this item 1
because it holds, directly or indirectly, voting securities issued by
reporting companies as indicated above.
(F) Reed's Ferry Supply Corporation was purchased by HEC Inc. in August 1999
as an equipment wholesaler to purchase equipment on behalf of Select
Energy Contracting Inc.
(G) Effective September 30, 1999, HEC/Tobyhanna Energy Project, Inc. was
established as a special purpose entity to manage the assets of an Energy
Savings Performance Contract (ESPC) project at the Tobyhanna Army Depot.
(H) Select Energy Contracting, Inc. designs, manages and directs the
construction of, and/or installing of mechanical, water, and electrical
systems, energy and other resource consuming equipment.
(I) Yankee Energy System Inc. is not the "reporting company" but is included
in this item 1 because it holds, directly or indirectly, voting securities
issued by reporting companies as indicated above.
(J) Yankee Energy Services Company (YESCO) provides a wide range of energy-
related services for its customers. YESCO Controls division provides
comprehensive building automation with engineering, installation and
maintenance of building control systems. YESCO Power division also
provided expertise related to the production of thermal and/or electric
power.
(K) Housatonic Corporation is not a "reporting company" but is included
in this item 1 because it holds, directly or indirectly, voting securities
issued by reporting companies as indicated above.
(L) Southbridge Power & Thermal, LLC is a single purpose limited liability
company formed to operate and manage facilities at the Southbridge
Business Center located in Southbridge, MA., which provides electricity,
thermal, compressed air, heated, and wash-water to tenants at the center.
These utilities are included in the leases of tenants at the center.
(M) R. M. Services, Inc. provides consumer collection services for companies
throughout the United States.
(N) Acumentrics Corporation develops, manufactures and distributes advanced
power generation, power quality and power protection devices including a
high-speed flywheel and advanced technology fuel cells.
(O) ERI/HEC EFA-Med, LLC is a Delaware limited liability company that was
formed by HEC Inc., and ERI Services, Inc. to enter into an indefinite
delivery/indefinite quantity with the U.S. Navy. Under the contract,
the Navy will issue Delivery Orders for energy services work at U.S.
Government facilities located in Bahrain, Greece, Egypt, Italy, Spain,
Turkey, and the United Kingdom. The LLC will designate either ERI or
HEC to perform each of the Delivery Orders. The LLC will also act as the
conduit for any project-related financing. ERI Services, Inc. and HEC
Inc. each own 50% of the LLC.
(P) E. S. Boulos Company (Boulos) is a Connecticut corporation that was formed
by NGS to acquire the assets of electrical construction companies located
in Maine. Boulos is registered to do business initially in Maine,
Massachusetts, New Hampshire, and Vermont. NGS owns 100% of the
corporation.
(Q) NGS Mechanical Company (NGSM) is a Connecticut corporation that was formed
by NGS to perform mechanical construction and maintenance services to
customers contracted with to provide such services. NGSM is registered to
do business initially in Massachusetts, New Hampshire, Maine, Vermont,
Rhode Island, and New York. NGS owns 100% of the corporation.
(R) HEC/CJTS Energy Center LLC (HEC/CJTS) is a Delaware limited liability
company that was formed by HEC Inc. to facilitate the financing of HEC's
construction of the Connecticut Juvenile Training School in Middletown,
Connecticut. HEC/CJTS will not have any employees nor will it conduct any
other activities other than those related to accepting the assignment of
the lease. HEC Inc. owns 100% of the LLC.
ITEM 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS
-------------------------------------------------------------------------------
Instruction
-----------
With respect to a transaction with an associate company, report
only the type and principal amount of securities involved.
-------------------------------------------------------------------------------
Person
Company Type of Principal to Whom Collateral Consideration Company Amount of
Issuing Security Amount of Issue or Cost of Security Given With Received for Contributing Capital
Security Issued Security Renewal Capital Was Issued Security Each Security Capital Contribution
-------------- ------------ ------------- -------- ------- ---------- ---------- ------------- ------------ ------------
NU
Select Enterprises,
Energy, Inc. N/A N/A N/A N/A N/A N/A N/A Inc. $29,400,000
Advance NU
Select from Enterprises,
Energy, Inc. Parent ($29,400,000) Issue None Inc. None None N/A N/A
Select
Energy
Portland
Pipeline, Inc. No transactions this quarter.
Northeast
Generation
Services
Company No transactions this quarter.
Select Energy
Contracting,
Inc. No transactions this quarter.
Reeds Ferry
Supply Co.,
Inc. No transactions this quarter.
HEC/Tobyhanna
Energy
Project, Inc. No transactions this quarter.
Yankee Energy
Services
Company No transactions this quarter.
Southbridge
Power &
Thermal, LLC No transactions this quarter.
R.M.
Services, Inc. No transactions this quarter.
Acumentrics
Corporation No transactions this quarter.
ERI/HEC
EFA-Med, LLC No transactions this quarter.
Northeast
Generation
E.S. Boulos Common Services
Company Stock $100 Issue N/A Company N/A $7,538,649 N/A N/A
Northeast
Generation
NGS Mechanical Common Services
Company Stock $0 Issue N/A Company N/A $10,000 N/A N/A
HEC/CJTS
Energy
Center LLC No transactions this quarter.
ITEM 3 - ASSOCIATE TRANSACTIONS
-------------------------------------------------------------------------------
Instructions
------------
1. This item is used to report the performance during the quarter of contracts
among reporting companies and their associate companies, including other
reporting companies, for service, sales and construction. A copy of any
such contract not filed previously should be provided as an exhibit pursuant
to Item 6.B.
2. Parts I and II concern transactions performed by reporting companies on
behalf of associate companies, and transactions performed by associate
companies on behalf of reporting companies, respectively.
-------------------------------------------------------------------------------
Part I - Transactions performed by reporting companies on behalf
of associate companies.
Total Amount
Billed*
Reporting Associate
Company Company Types of Three Months
Rendering Receiving Services Ended
Services Services Rendered March 31, 2001
----------------------- ------------------- -------------- ------------------
(Thousands
of Dollars)
Northeast Select
Generation Energy, Inc. Electrical and
Services Mechanical services $ 15
Company ==================
Northeast Northeast
Generation Nuclear Energy Electrical and
Services Company Mechanical services $3,596
Company ==================
Northeast The
Generation Connecticut
Services Light & Power Electrical and
Company Company Mechanical services $ 2
==================
Northeast Public Service
Generation Company of Electrical and
Services New Hampshire Mechanical services $ 263
Company ==================
Northeast Holyoke Water
Generation Power Company Electrical and
Services Mechanical services $3,864
Company ==================
Northeast Northeast
Generation Generation Electrical and
Services Company Mechanical services $3,735
Company ==================
Wholesale
Reeds Ferry Select Energy Purchasing
Supply Co., Inc. Contracting, Inc. Services $ 266
==================
Phone Center
R. M. Services, Inc. Yankee Gas Management
Services Company Services $ 519
==================
Northeast North Atlantic
Generation Energy Service Electrical and
Services Corporation Mechanical services $ 14
Company ==================
Northeast
Generation Yankee Gas Electrical and
Services Services Company Engineering services $ 5
Company ==================
Northeast
Generation Yankee Energy Electrical and
Services Service Company Mechanical services $ 44
Company ==================
Northeast Northeast
Generation Utilities
Services Service Electrical and
Company Corporation Mechanical services $ 8
==================
Part II - Transactions performed by associate companies on behalf
of reporting companies.
Total Amount
Billed*
Associate Reporting
Company Company Types of Three Months
Rendering Receiving Services Ended
Services Services Rendered March 31, 2001
----------------------- ------------------- -------------- ------------------
(Thousands)
Public Service Company Select
of New Hampshire Energy, Inc. Miscellaneous $ 6
==================
HEC Inc. Select Engineering Services
Energy, Inc. $ 80
==================
* 'Total Amount Billed' is direct costs only.
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
Investments in energy-related companies:
----------------------------------------
(Thousands of Dollars)
Total consolidated capitalization as of 03/31/01 $7,477,254 line 1
Total capitalization multiplied by 15%
(line 1 multiplied by .15) 1,121,588 line 2
Greater of $50 million or line 2 $1,121,588 line 3
Total current aggregate investment:
(categorized by major line of
energy-related business):
Select Energy, Inc. $623,828
Select Energy Portland Pipeline, Inc. 21,146
Northeast Generation Services Company 24,010
Select Energy Contracting, Inc. 25,387
Reeds Ferry Supply Co., Inc. 7
HEC/Tobyhanna Energy Project, Inc. -
Yankee Energy Services Company 7,882
Southbridge Power & Thermal, LLC 12
R. M. Services, Inc. 12,998
E. S. Boulos Company 7,539
NGS Mechanical Company 10
Acumentrics Corporation 10,000
ERI/HEC EFA-Med, LLC 1
HEC/CJTS Energy Center LLC -
-----------
Total current aggregate investment 732,820 line 4
-----------
Difference between the greater of $50 million or 15% of
capitalization and the total aggregate investment of the
registered holding company system $388,768 line 5
===========
ITEM 5 - OTHER INVESTMENTS
------------------------------------------------------------------------------
Instruction
-----------
This item concerns investments in energy-related and gas-related companies that
are excluded from the calculation of aggregate investment under rule 58.
-------------------------------------------------------------------------------
Major Line Other Other
of Energy- Investment Investment
Related in Last in This Reason for Difference
Business U-9C-3 Report U-9C-3 Report in Other Investment
------------- ------------- ------------- ------------------------
NONE
ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS
-------------------------------------------------------------------------------
Instructions
------------
A. Financial Statements
1. Financial statements are required for reporting companies in which the
registered holding company system has at least 50% equity or other ownership
interest. For all other rule 58 companies, the registered holding company
shall make available to the Commission such financial statements as are
available to it.
2. For each reporting company, provide a balance sheet as of the end of the
quarter and income statements for the three-month and year-to-date periods
ending as of the end of the quarter, together with any notes thereto.
Financial statements shall be for the first three quarters of the fiscal
year of the registered holding company.
3. If a reporting company and each of its subsidiaries engage exclusively in
a single category of energy-related or gas-related activity, consolidated
financial statements may be filed.
4. Separate financial statements need not be filed for inactive companies or
for companies engaged solely in the ownership of interests in energy-
related or gas-related companies.
B. Exhibits
1. Copies of contracts required to be provided by Item 3 shall be filed as
exhibits.
2. A certificate stating that a copy of the report for the previous quarter
has been filed with interested state commissions shall be filed as an
exhibit. The certificate shall provide the names and addresses of the
state commissions.
-------------------------------------------------------------------------------
A. Financial Statements
Select Energy, Inc.:
Balance Sheet - As of March 31, 2001
Income Statement-Three months ended March 31, 2001
Select Energy Portland Pipeline, Inc.:
Balance Sheet - As of March 31, 2001
Income Statement-Three months ended March 31, 2001
Northeast Generation Services Company:
Balance Sheet - As of March 31, 2001
Income Statement-Three months ended March 31, 2001
Select Energy Contracting, Inc.:
Balance Sheet - As of March 31, 2001
Income Statement-Three months ended March 31, 2001
Reeds Ferry Supply Co., Inc.:
Balance Sheet - As of March 31, 2001
Income Statement-Three months ended March 31, 2001
HEC/Tobyhanna Energy Project, Inc.:
Balance Sheet - As of March 31, 2001
Income Statement-Three months ended March 31, 2001
Yankee Energy Services Company:
Balance Sheet - As of March 31, 2001
Income Statement-Three months ended March 31, 2001
Southbridge Power & Thermal, LLC:
Balance Sheet - As of March 31, 2001
Income Statement-Three months ended March 31, 2001
R. M. Services, Inc.:
Balance Sheet - As of March 31, 2001
Income Statement-Three months ended March 31, 2001
ERI/HEC EFA-Med, LLC:
Not Available as of March 31, 2001
E. S. Boulos Company:
Balance Sheet - As of March 31, 2001
Income Statement-Three months ended March 31, 2001
NGS Mechanical Company:
Balance Sheet - As of March 31, 2001
Income Statement-Three months ended March 31, 2001
HEC/CJTS Energy Center LLC:
Not Available as of March 31, 2001
Northeast Utilities (PARENT):
Balance Sheet - As of March 31, 2001
Income Statement-Three months ended March 31, 2001
B. Exhibits
Exhibit No. Description
----------- -----------
6.B.2.1 The company certifies that a conformed copy of Form U-9C-3
for the previous quarter was filed with the following state
commissions:
Ms. Louise E. Rickard
Acting Executive Secretary
Department of Public Utility Control
10 Franklin Square
New Britain, CT 06051
Ms. Mary L. Cottrell, Secretary
Massachusetts Department of Telecommunications and Energy
100 Cambridge Street
Boston, MA 02202
Mr. Thomas B. Getz
Executive Director and Secretary
State of New Hampshire
Public Utilities Commission
8 Old Suncook Road, Building One
Concord, NH 03301-7319
SELECT ENERGY, INC.
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 1,826
Accounts receivable, including unbilled
revenues, net 164,875
Accounts receivable from affiliated companies 119,374
Taxes receivable 21,077
Special deposits 2,498
Unrealized gains on mark-to-market transactions 57,988
Prepaid wholesale power purchases 16,302
Prepayments and other 8,653
-------------
Total current assets 392,593
-------------
Deferred Charges:
Intangibles, net 21,369
Other 30,006
-------------
Total deferred charges 51,375
-------------
Long-Lived Assets:
Software 9,921
Other 1,060
-------------
10,981
Less: Accumulated provision for depreciation 2,251
-------------
8,730
Capital additions in progress 231
-------------
Total long-lived assets 8,961
-------------
Total Assets $ 452,929
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY, INC.
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 172,200
Accounts payable 190,751
Accounts payable to affiliated companies 50,738
Accrued taxes 2,373
Other 28,636
-------------
Total current liabilities 444,698
-------------
Stockholders' Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Capital surplus, paid in 119,176
Retained deficit (110,945)
--------------
Total stockholders' equity 8,231
--------------
Total Liabilities and Stockholders' Equity $ 452,929
==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY, INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2001
--------------
(Thousands
of Dollars)
Operating Revenues $ 596,744
-------------
Operating Expenses:
Purchased power, net interchange
power and capacity 598,543
Depreciation 1,192
Other 14,619
Taxes other than income taxes 3,765
-------------
Total operating expenses 618,119
-------------
Operating Loss (21,375)
-------------
Other Income 241
-------------
Interest and financing costs 2,461
-------------
Loss before income taxes (23,595)
-------------
Income Tax Benefit:
Federal and state income taxes, net 9,319
-------------
Loss before cumulative effect
of accounting change (14,276)
-------------
Cumulative effect of accounting change,
net of tax benefit of $14,611 (21,985)
-------------
Net Loss $ (36,261)
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY PORTLAND PIPELINE, INC.
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 352
Taxes receivable 151
-------------
Total current assets 503
-------------
Investments:
Other investments 3,268
-------------
Total investments 3,268
-------------
Deferred Charges:
Accumulated deferred income taxes 1,613
-------------
Total deferred charges 1,613
-------------
Total Assets $ 5,384
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable to affiliated companies $ 1
-------------
Total current liabilities 1
-------------
Stockholders' Equity:
Common stock, $1 par value - authorized
and outstanding 100 shares -
Capital surplus, paid in 9,257
Retained deficit (3,874)
-------------
Total stockholders' equity 5,383
-------------
Total Liabilities and Stockholders' Equity $ 5,384
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY PORTLAND PIPELINE, INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2001
--------------
(Thousands
of Dollars)
Operating Revenues $ -
-------------
Operating Expenses:
Operation 3
-------------
Total operating expenses 3
-------------
Operating Loss Before Income Taxes (3)
-------------
Income Tax Expense:
Federal and state income taxes, net -
-------------
Net Loss $ (3)
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST GENERATION SERVICES COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 1,074
Accounts receivable 18,482
Accounts receivable from affiliated companies 3,948
Fuel, materials and supplies, at average cost 376
Prepayments and other 1,292
-------------
Total current assets 25,172
-------------
Other Investments:
Other investments, at cost 7
-------------
Total other investments 7
-------------
Deferred Charges:
Other 6,078
-------------
Total deferred charges 6,078
-------------
Long-Lived Assets:
Other 2,933
-------------
2,933
Less: Accumulated provision for depreciation 1,210
-------------
1,723
Capital additions in progress 340
-------------
Total long-lived assets 2,063
-------------
Total Assets $ 33,320
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST GENERATION SERVICES COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 12,100
Accounts payable 3,692
Accounts payable to affiliated companies 4,795
Accrued taxes 1,789
Other 225
-------------
Total current liabilities 22,601
-------------
Deferred Credits:
Other 1,453
-------------
Total deferred credits 1,453
-------------
Stockholders' Equity:
Common stock, $1 par value - authorized
and outstanding 100 shares -
Capital surplus, paid in 9,510
Retained deficit (244)
-------------
Total stockholders' equity 9,266
-------------
Total Liabilities and Stockholders' Equity $ 33,320
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST GENERATION SERVICES COMPANY
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2001
--------------
(Thousands
of Dollars)
Operating Revenues $ 25,428
-------------
Operating Expenses:
Operation 13,709
Maintenance 10,463
Depreciation 92
Taxes other than income taxes 261
-------------
Total operating expenses 24,525
-------------
Operating Income 903
-------------
Other Income 364
-------------
Interest and financing costs 149
-------------
Net Income $ 1,118
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY CONTRACTING, INC.
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 278
Accounts receivable 9,890
Other material and supplies 522
Prepayments and other 181
-------------
Total current assets 10,871
-------------
Long-Lived Assets:
Other 22,404
-------------
22,404
Less: Accumulated provision for depreciation 2,332
-------------
Total long-lived assets 20,072
-------------
Total Assets $ 30,943
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY CONTRACTING, INC.
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable $ 4,487
Accounts payable to affiliated companies 9,634
Accrued taxes 647
-------------
Total current liabilities 14,768
-------------
Long-Term Liabilities:
Deferred taxes 160
Other 1,079
-------------
Total long-term liabilities 1,239
-------------
Stockholders' Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Capital surplus, paid in 14,910
Retained earnings 26
-------------
Total stockholders' equity 14,936
-------------
Total Liabilities and Stockholders' Equity $ 30,943
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY CONTRACTING, INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2001
--------------
(Thousands
of Dollars)
Operating Revenues $ 12,663
-------------
Operating Expenses:
Operation 11,320
Maintenance 162
Depreciation 500
Taxes other than income taxes 197
-------------
Total operating expenses 12,179
-------------
Operating Income 484
-------------
Other Income 19
-------------
Interest and financing costs 211
-------------
Income before income taxes 292
-------------
Income Tax Expense:
Federal and state income taxes, net 124
-------------
Net Income $ 168
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
REEDS FERRY SUPPLY CO., INC.
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 7
Accounts receivable 131
-------------
Total current assets 138
-------------
Long-Lived Assets:
Organization costs, net 262
-------------
Total long-lived assets 262
-------------
Total Assets $ 400
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable $ 131
Accounts payable to affiliated companies 295
-------------
Total current liabilities 426
-------------
Stockholders' Equity:
Common stock, $0 par value - authorized
and outstanding 100 shares 4
Capital surplus, paid in 3
Retained deficit (33)
-------------
Total stockholders' equity (26)
-------------
Total Liabilities and Stockholders' Equity $ 400
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
REEDS FERRY SUPPLY CO., INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2001
--------------
(Thousands
of Dollars)
Operating Revenues $ 266
-------------
Operating Expenses:
Other 266
Amortization 5
-------------
Total operating expenses 271
-------------
Operating Loss (5)
-------------
Net Loss $ (5)
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
HEC/TOBYHANNA ENERGY PROJECT, INC.
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 1,742
Accounts receivable 417
-------------
Total current assets 2,159
-------------
Long-Lived Assets:
Other 714
-------------
714
Less: Accumulated provision for depreciation 49
-------------
665
Contracts receivable 27,474
-------------
Total long-lived assets 28,139
-------------
Total Assets $ 30,298
=============
CAPITALIZATION AND LIABILITIES
------------------------------------
Capitalization:
Common stock, $1 par value - authorized
and outstanding 100 shares $ -
Retained earnings 210
-------------
Total common stockholder's equity 210
Long-term debt 26,446
-------------
Total capitalization 26,656
-------------
Current Liabilities:
Accounts payable to affiliated companies 3,389
Accrued interest 252
Accrued taxes 1
-------------
Total current liabilities 3,642
-------------
Total Capitalization and Liabilities $ 30,298
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
HEC/TOBYHANNA ENERGY PROJECT, INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2001
--------------
(Thousands
of Dollars)
Other Income $ 545
-------------
Interest and Financing Costs 513
-------------
Income Tax Expense 5
-------------
Net Income $ 27
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
YANKEE ENERGY SERVICES COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
ASSETS
------
Other Property and Investments:
Nonutility property, at cost $ 4,766
Investment in subsidiary company, at equity 2
-------------
Total other property and investments 4,768
-------------
Current Assets:
Accounts receivable from affiliated companies 750
Taxes receivable 1,674
Fuel, materials and supplies, at average cost 210
Prepayments and other 126
-------------
Total current assets 2,760
-------------
Deferred Charges:
Accumulated deferred income taxes 1,298
Goodwill 418
Miscellaneous work in progress 13,945
Other 550
-------------
Total deferred charges 16,211
-------------
Total Assets $ 23,739
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
YANKEE ENERGY SERVICES COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to banks $ 30
Notes payable to affiliated companies 16,407
Accounts payable 81
Accounts payable to affiliated companies 528
Other 158
-------------
Total current liablilities 17,204
-------------
Deferred Credits:
Other 252
-------------
Total deferred credits 252
-------------
Stockholders' Equity:
Common stock, $0 par value - 10,000 shares
authorized and 200 shares outstanding 1
Capital surplus, paid in 7,881
Retained deficit (1,599)
-------------
Total stockholders' equity 6,283
-------------
Total Liabilities and Stockholders' Equity $ 23,739
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
YANKEE ENERGY SERVICES COMPANY
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2001
--------------
(Thousands
of Dollars)
Operating Revenues $ 118
-------------
Operating Expenses:
Other 201
Depreciation 121
-------------
Total operating expenses 322
-------------
Operating Loss (204)
-------------
Interest and financing costs 208
-------------
Net Loss $ (412)
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SOUTHBRIDGE POWER & THERMAL, LLC
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Accounts receivable $ 125
Accounts receivable from affiliated companies 52
-------------
Total current assets 177
-------------
Total Assets $ 177
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 400
Accounts payable to affiliated companies 724
Other 1
-------------
Total current liabilities 1,125
-------------
Stockholders' Equity:
Common stock, $0 par value - authorized
and outstanding 200 shares 10
Capital surplus, paid in 2
Retained deficit (960)
-------------
Total stockholders' equity (948)
-------------
Total Liabilities and Stockholders' Equity $ 177
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SOUTHBRIDGE POWER & THERMAL, LLC
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2001
--------------
(Thousands
of Dollars)
Operating Revenues $ -
-------------
Operating Expenses:
Other 568
-------------
Total operating expenses 568
-------------
Operating Loss (568)
-------------
Other Income -
-------------
Interest and financing costs 5
-------------
Loss before income taxes (573)
-------------
Income Tax Expense:
Federal and state income taxes, net -
-------------
Net Loss $ (573)
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
R. M. SERVICES, INC.
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
ASSETS
------
Other Property and Investments:
Nonutility property, at cost $ 4,707
-------------
Total other property and investments 4,707
-------------
Current Assets:
Cash 668
Accounts receivable 626
Accounts receivable from affiliated companies 173
Taxes receivable 42
-------------
Total current assets 1,509
-------------
Deferred Charges:
Accumulated deferred income taxes 55
Goodwill 7,646
Prepaid pension 339
-------------
Total deferred charges 8,040
-------------
Total Assets $ 14,256
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
R. M. SERVICES, INC.
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 3,700
Accounts payable to affiliated companies 916
Other 107
-------------
Total current liabilities 4,723
-------------
Deferred Credits:
Other 337
-------------
Total deferred credits 337
-------------
Stockholders' Equity:
Common stock, $0 par value - 10,000 shares
authorized and 200 shares outstanding 1
Capital surplus, paid in 9,297
Retained earnings (102)
-------------
Total stockholders' equity 9,196
-------------
Total Liabilities and Stockholders' Equity $ 14,256
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
R. M. SERVICES, INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2001
--------------
(Thousands
of Dollars)
Operating Revenues $ 1,583
-------------
Operating Expenses:
Other 1,356
Depreciation 361
Taxes other than income taxes 26
-------------
Total operating expenses 1,743
-------------
Operating Loss (160)
-------------
Other Income 8
-------------
Interest and financing costs 43
-------------
Loss before income taxes (195)
-------------
Income Tax Benefit:
Federal and state income taxes, net (34)
-------------
Net Loss $ (161)
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
E. S. BOULOS COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 856
Accounts receivable 7,783
Taxes receivable 4
Materials and supplies, at average cost 107
Prepayments and other 500
-------------
Total current assets 9,250
-------------
Other Investments:
Other investments, at cost 7
-------------
Total other investments 7
-------------
Deferred Charges:
Other 5,686
-------------
Total deferred charges 5,686
-------------
Long-Lived Assets:
Other 366
-------------
366
Less: Accumulated provision for depreciation 17
-------------
Total long-lived assets 349
-------------
Total Assets $ 15,292
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
E.S. BOULOS COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Current Liabilities:
Accounts payable $ 2,872
Other 3,110
-------------
Total current liabilities 5,982
-------------
Deferred Credits:
Other 1,227
-------------
Total deferred credits 1,227
-------------
Stockholder's Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Capital surplus, paid in 7,539
Retained earnings 544
-------------
Total stockholder's equity 8,083
-------------
Total Liabilities and Stockholder's Equity $ 15,292
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
E. S. BOULOS COMPANY
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2001
--------------
(Thousands
of Dollars)
Operating Revenues $ 6,950
-------------
Operating Expenses:
Operation 6,603
Depreciation 72
-------------
Total operating expenses 6,675
-------------
Operating Income 275
-------------
Other Income 269
-------------
Income before income taxes 544
-------------
Income Tax Expense:
Federal and state income taxes, net -
-------------
Net Income $ 544
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NGS MECHANICAL COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Accounts receivable from affiliated companies $ 10
-------------
Total current assets 10
-------------
Total Assets $ 10
=============
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Current Liabilities:
Accounts payable to affiliated companies $ 1
-------------
Total current liabilities 1
-------------
Stockholder's Equity:
Common stock, $0 par value - authorized
and outstanding 100 shares -
Capital surplus, paid in 10
Retained deficit (1)
-------------
Total stockholder's equity 9
-------------
Total Liabilities and Stockholder's Equity $ 10
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NGS MECHANICAL COMPANY
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2001
--------------
(Thousands
of Dollars)
Operating Revenues $ -
-------------
Operating Expenses:
Other 1
-------------
Total operating expenses 1
-------------
Operating Loss Before Income Taxes (1)
-------------
Income Tax Expense:
Federal and state income taxes, net -
-------------
Net Loss $ (1)
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
ASSETS
------
Other Property and Investments:
Investments in subsidiary companies, at equity........ $ 2,737,935
Investments in transmission companies, at equity...... 15,000
Other, at cost........................................ 14
--------------
2,752,949
--------------
Current Assets:
Cash.................................................. 138
Notes receivable from affiliated companies............ 138,900
Notes and accounts receivable......................... 607
Accounts receivable from affiliated companies......... 150,379
Prepayments........................................... 3,111
--------------
293,135
--------------
Deferred Charges:
Unamortized debt expense.............................. 181
Other................................................. 328
--------------
509
--------------
Total Assets...................................... $ 3,046,593
==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
(Unaudited)
March 31,
2001
--------------
(Thousands
of Dollars)
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common shares, $5.00 par value - Authorized
225,000,000 shares; 148,807,333 shares issued and
143,978,260 shares outstanding...................... $ 744,037
Capital surplus, paid in............................. 1,086,918
Deferred contribution plan - employee stock
ownership plan...................................... (111,264)
Retained earnings.................................... 593,646
Accumulated other comprehensive income............... 5,745
--------------
Total common shareholders' equity.................. 2,319,082
Long-term debt....................................... 373,342
--------------
Total capitalization.......................... 2,692,424
--------------
Current Liabilities:
Notes payable to banks............................... 228,000
Accounts payable..................................... 41
Accounts payable to affiliated companies............. 1,622
Payable to Millstone 3 joint owners.................. 43,443
Long-term debt - current portion..................... 21,000
Accrued taxes........................................ 44,894
Accrued interest..................................... 8,755
Other................................................ 22
--------------
347,777
--------------
Accumulated deferred income taxes...................... 5,026
Other deferred credits................................. 1,366
--------------
6,392
--------------
Total Capitalization and Liabilities............. $ 3,046,593
==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
STATEMENT OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2001
--------------
(Thousands
of Dollars)
Operating Revenues.................................. $ -
--------------
Operating Expenses:
Operation expense................................. 1,692
Federal and state income taxes.................... (7,924)
Taxes other than income taxes..................... 22
--------------
Total operating expenses..................... (6,210)
--------------
Operating Loss...................................... 6,210
--------------
Other Income/(Loss):
Equity in earnings of subsidiaries................ 64,857
Equity in earnings of transmission companies...... 596
Gain related to Millstone sale.................... 146,844
Loss on share repurchase contracts................ (43,443)
Other, net........................................ 1,746
Income taxes...................................... (52,507)
--------------
Other income, net............................ 118,093
--------------
Income before interest charges............... 124,303
--------------
Interest Charges:
Interest on long-term debt........................ 4,494
Other interest.................................... 7,646
--------------
Interest charges............................ 12,140
--------------
Net Income for Common Shares........................ $ 112,163
==============
Basic and Diluted Earnings per Common Share......... $ 0.78
==============
Basic Common Shares Outstanding (average)........... 143,912,698
==============
Diluted Common Shares Outstanding (average)......... 144,314,339
==============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of the results of operations for the period shown have
been made.
See accompanying notes to financial statements.
Northeast Utilities
Select Energy, Inc.
Select Energy Portland Pipeline, Inc.
Northeast Generation Services Company and Subsidiaries
E.S. Boulos Company
NGS Mechanical, Inc.
Select Energy Contracting, Inc.
Reeds Ferry Supply Co., Inc.
HEC/Tobyhanna Energy Project, Inc.
HEC/CJTS Energy Center, LLC
ERI/HEC EFA-Med, LLC
Yankee Energy Services Company
R.M. Services, Inc.
Southbridge Power & Thermal, LLC
Acumentrics Corporation
Notes to Financial Statements (Unaudited)
1. About Northeast Utilities
Northeast Utilities (NU) is the parent company of the Northeast Utilities
system (NU system). The NU system's regulated utilities furnish franchised
retail electric service in Connecticut, New Hampshire and western
Massachusetts through three wholly owned subsidiaries: The Connecticut
Light and Power Company (CL&P), Public Service Company of New Hampshire (PSNH)
and Western Massachusetts Electric Company (WMECO). Another wholly owned
subsidiary, North Atlantic Energy Corporation, sells all of its entitlement
to the capacity and output of the Seabrook Station nuclear unit (Seabrook) to
PSNH under the terms of two life-of-unit, full cost recovery contracts. A
fifth wholly owned subsidiary, Holyoke Water Power Company, also is engaged
in the production and distribution of electric power.
Several wholly owned subsidiaries of NU provide support services for the NU
system companies and, in some cases, for other New England utilities.
Northeast Utilities Service Company provides centralized accounting,
administrative, engineering, financial, information resources, legal,
operational, planning, purchasing, and other services to the NU system
companies. North Atlantic Energy Service Corporation has operational
responsibility for Seabrook. Three other subsidiaries construct, acquire
or lease some of the property and facilities used by the NU system companies.
NU Enterprises, Inc. (NUEI) is a wholly owned subsidiary of NU and acts as
the holding company for certain of NU's competitive energy subsidiaries.
Northeast Generation Company (NGC) was formed to acquire and manage
generation facilities. Select Energy, Inc. (Select Energy), Select Energy
Portland Pipeline, Inc. (SEPPI), Northeast Generation Services Company and
its subsidiaries (NGS), HEC Inc. and its subsidiaries (HEC), and Mode 1
Communications, Inc., engage in a variety of energy-related and
telecommunications activities, as applicable, primarily in the competitive
energy retail and wholesale commodity, marketing and services fields. E.S.
Boulos Company (Boulos) and NGS Mechanical, Inc. (NGS Mechanical) are
wholly owned subsidiaries of NGS. Select Energy Contracting, Inc. (Select
Energy Contracting), Reeds Ferry Supply Co., Inc. (Reeds Ferry), HEC/Tobyhanna
Energy Project, Inc., (HEC/Tobyhanna), and HEC/CJTS Energy Center, LLC
(HEC/CJTS) are wholly owned subsidiaries of HEC. Another company, ERI/HEC
EFA-Med, LLC (ERI/HEC), is 50 percent owned by HEC.
Yankee Energy System, Inc. (Yankee) maintains certain wholly owned subsidiaries
including Yankee Energy Services Company (YESCO) and R. M. Services, Inc.
(R. M. Services). In June 2000, Southbridge Power & Thermal, LLC
(Southbridge), another wholly owned subsidiary of Yankee, was sold to an
unaffiliated company.
On September 26, 2000, NUEI invested $10 million in Acumentrics Corporation
(Acumentrics) in return for a 5 percent ownership share of that company.
Select Energy, SEPPI, NGS, Boulos, NGS Mechanical, Select Energy
Contracting, Reeds Ferry, HEC/Tobyhanna, HEC/CJTS, ERI/HEC, YESCO, R. M.
Services, Southbridge, and Acumentrics are "energy-related companies" under
Rule 58.
2. About Select Energy
Select Energy provides both wholesale and retail energy services. Select
Energy participates in open-access retail electricity markets in New
England, New York and the Mid-Atlantic regions. Select Energy markets
electricity, natural gas, oil and energy-related products and services in
order to enhance its core electricity service and customer relationships.
Select Energy is a licensed retail electricity supplier in the states of
Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New
York, Pennsylvania, and Rhode Island. Select Energy is a registered gas
marketer with local gas distribution companies in the states of Connecticut,
Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York,
Pennsylvania, and Rhode Island.
Beginning in January 2000, Select Energy's contract with NGC, to purchase
1,289 megawatts (MW) of capacity and energy significantly reduced the load-
following risk and allowed Select Energy to better manage its portfolio
profitability. On January 1, 2000, Select Energy began serving one-half of
CL&P's standard offer requirement for a 4-year period. Select Energy's
obligation to service this load requirement was approximately 2,000 MW
beginning in July 2000, when 100 percent of CL&P's customers were able to
choose their electric supplier. In addition, beginning in January 2000,
Select Energy assumed responsibility for serving 30 market based wholesale
contracts, totaling approximately 500 MW, throughout New England with
electric energy supply that was previously provided by CL&P and WMECO.
3. About SEPPI
SEPPI was formed for the purpose of acquiring a 5 percent interest in the
Portland Natural Gas Transmission System partnership. Coincident with that
acquisition, Select Energy agreed to purchase capacity of 30,000 mcf/day
for a 20-year term.
4. About NGS
NGS was formed to provide management, operation and maintenance services to
the electric generation market, as well as to large industrial customers in
the Northeast. NGS also provides consulting services which include
engineering services, construction management, permitting, and compliance
management.
5. About Boulos
On January 19, 2001, NGS completed the acquisition of Boulos, an electrical
construction company which specializes in high voltage electrical
construction and maintenance in Maine, Massachusetts and New Hampshire.
Boulos is wholly owned by NGS.
6. About NGS Mechanical
In January 2001, NGS formed a new subsidiary, NGS Mechanical, to provide
mechanical services initially in the New England states. NGS Mechanical is
wholly owned by NGS.
7. About Select Energy Contracting
Select Energy Contracting, formerly known as HEC International Corporation,
designs, manages, and directs the construction of, and/or installation of
mechanical, water and electrical systems, energy and other resource
consuming equipment.
8. About Reeds Ferry
Reeds Ferry was acquired by HEC in August 1999 as an equipment wholesaler
to purchase equipment on behalf of Select Energy Contracting.
9. About HEC/Tobyhanna
Effective September 30, 1999, HEC/Tobyhanna was established as a special
purpose entity to manage the assets of an Energy Savings Performance
Contract at the Tobyhanna Army Depot.
10. About HEC/CJTS
HEC/CJTS was formed on March 2, 2001, as a special purpose entity to
facilitate the financing of HEC's construction of the Connecticut Juvenile
Training School in Middletown, Connecticut. HEC/CJTS is wholly owned by
HEC.
11. About ERI/HEC
ERI/HEC was established on September 30, 2000, by HEC and ERI Services,
Inc. to enter into an indefinite delivery/indefinite quantity contract with
the United States Navy. ERI/HEC is 50 percent owned by HEC.
12. About YESCO
YESCO provides a wide range of energy-related services for its customers.
The YESCO controls division provides comprehensive building automation with
engineering, installation and maintenance of building control systems.
13. About R.M. Services
R. M. Services provides consumer collection services for companies
throughout the United States.
14. About Southbridge
Southbridge was formed to operate and manage facilities at the Southbridge
Business Center (Center) located in Southbridge, Massachusetts and provided
electrical, thermal, compressed air, and heated and wash-water services to
tenants at the Center. In June 2000, Southbridge was sold to an
unaffiliated company.
15. About Acumentrics
On September 26, 2000, NUEI invested $10 million in Acumentrics in return
for a 5 percent ownership share of that company. Acumentrics is a
privately owned producer of advanced power generation and power protection
technologies applicable to homes, telecommunications, commercial
businesses, industrial facilities, and the auto industry.
16. Public Utility Regulation
NU is registered with the Securities and Exchange Commission (SEC) as a
holding company under the Public Utility Holding Company Act of 1935 (1935
Act), and the NU system is subject to the provisions of the 1935 Act.
Arrangements among the NU system companies, outside agencies and other
utilities covering interconnections, interchange of electric power and
sales of utility property are subject to regulation by the Federal Energy
Regulatory Commission (FERC) and/or the SEC. The operating subsidiaries
are subject to further regulation for rates, accounting and other matters
by the FERC and/or applicable state regulatory commissions.
17. Presentation
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
18. Market Risk And Risk Management Instruments
Select Energy provides both firm requirement energy services to its
customers and performs energy trading and marketing activities. Select
Energy manages its exposure to risk from existing contractual commitments
and provides risk management services to its customers through forward
contracts, futures, over-the-counter swap agreements, and options (commodity
derivatives).
Select Energy has utilized the sensitivity analysis methodology to disclose
the quantitative information for the commodity price risks. Sensitivity
analysis provides a presentation of the potential loss of future earnings,
fair values or cash flows from market risk-sensitive instruments over a
selected time period due to one or more hypothetical changes in commodity
prices, or other similar price changes.
Commodity Price Risk - Trading Activities: As a market participant in the
Northeast area of the United States, Select Energy conducts commodity-
trading activities in electricity and its related products, natural gas and
oil and therefore experiences net open positions. Select Energy manages
these open positions with strict policies which limit its exposure to
market risk and require daily reporting to management of potential
financial exposure. Commodity derivatives utilized for trading purposes
are accounted for using the mark-to-market method, under Emerging Issues
Task Force Issue No. 98-10, "Accounting for Energy Trading and Risk
Management Activities." Under this methodology, these instruments are
adjusted to market value, and the unrealized gains and losses are
recognized in income in the current period in the statements of income as
operating expenses - other and in the balance sheets as prepayments and
other. The mark-to-market position at March 31, 2001, was a positive $58
million.
Under sensitivity analysis, the fair value of the portfolio is a function
of the underlying commodity, contract prices and market prices represented
by each derivative commodity contract. For swaps, forward contracts and
options, market value reflects management's best estimates considering over-
the-counter quotations, time value and volatility factors of the underlying
commitments. Exchange-traded futures and options are subject to market,
based on closing exchange prices.
As of March 31, 2001, Select Energy has calculated the market price
resulting from a 10 percent unfavorable change in forward market prices.
That 10 percent change would result in approximately a $5 million decline
in the fair value of the Select Energy trading portfolio. In the normal
course of business, Select Energy also faces risks that are either
nonfinancial or nonquantifiable. Such risks principally include credit
risk, which is not reflected in the sensitivity analysis above.
Commodity Price Risk - Nontrading Activities: Select Energy utilizes
derivative financial and commodity instruments (derivatives), including
futures and forward contracts, to reduce market risk associated with
fluctuations in the price of electricity and natural gas sold under firm
commitments with certain customers. Select Energy also utilizes
derivatives, including price swap agreements, call and put option
contracts, and futures and forward contracts, to manage the market risk
associated with a portion of its anticipated supply requirements. These
derivative instruments have been designated as cash flow hedging
instruments by the company.
When conducting sensitivity analysis of the change in the fair value of
Select Energy's electricity, natural gas and oil nontrading portfolio,
which would result from a hypothetical change in the future market price of
electricity, natural gas and oil, the fair value of the contracts are
determined from models which take into account estimated future market
prices of electricity, natural gas and oil, the volatility of the market
prices in each period, as well as the time value factors of the underlying
commitments. In most instances, market prices and volatility are
determined from quoted prices on the futures exchange.
Select Energy has determined a hypothetical change in the fair value for
its nontrading electricity, natural gas and oil contracts, assuming a 10
percent unfavorable change in forward market prices. As of March 31, 2001,
an unfavorable 10 percent change in forward market price would have
resulted in a decrease in fair value of approximately $23 million.
The impact of a change in electricity, natural gas and oil prices on Select
Energy's nontrading contracts on March 31, 2001, is not necessarily
representative of the results that will be realized when these contracts go
to eventual physical delivery.
Select Energy also maintains natural gas service agreements with certain
customers to supply gas at fixed prices for terms extending through 2003.
Select Energy has hedged its gas supply risk under these agreements through
NYMEX contracts. Under these contracts, the purchase price of a specified
quantity of gas is effectively fixed over the term of the gas service
agreements, which extend through 2002. As of March 31, 2001, the NYMEX
contracts had a notional value of $12.8 million and a positive mark-to-
market position of $0.3 million.
19. Special Deposits
Special deposits include cash collateral posted in connection with various
power purchase and sales agreements.
QUARTERLY REPORT OF SELECT ENERGY, INC.
SIGNATURE CLAUSE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935 and the rules and regulations of the Securities and Exchange Commission
issued thereunder, the undersigned company has duly caused this report to be
signed on its behalf by the undersigned officer thereunto duly authorized.
NORTHEAST UTILITIES
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(Registered Holding Company)
By: /s/ John J. Roman
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(Signature of Signing Officer)
John J. Roman
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Vice President and Controller
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Date: May 30, 2001
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