SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1993
OR
Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
COMMISSION FILE NUMBER 0-10007
COLONIAL GAS COMPANY
(Exact name of registrant as specified in its charter)
Massachusetts 04-1558100
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
40 Market Street, Lowell, Massachusetts 01852
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (508) 458-3171
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $3.33 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
The aggregate market value of the voting stock held by non-
affiliates of the registrant as of March 1, 1994 was
$189,122,548.
The number of shares of the registrant's common stock
outstanding as of March 1, 1994 was 8,047,768.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual report to stockholders for the year
ended December 31, 1993 are incorporated by reference into Part
II and Part IV. Portions of the proxy statement for the 1994
annual meeting of stockholders are incorporated by reference into
Part III.
COLONIAL GAS COMPANY
FORM 10-K ANNUAL REPORT - 1993
TABLE OF CONTENTS
PART I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote
of Security Holders
PART II
Item 5. Market for Registrant's Common Stock
and Related Stockholder Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis
of Financial Condition and Results of
Operations
Item 8. Financial Statements and Supplementary
Data
Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure
PART III
Item 10. Directors and Executive Officers of
the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial
Owners and Management
Item 13. Certain Relationships and Related
Transactions
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K
PART I
Item 1. Business
THE COMPANY
Colonial Gas Company ("Colonial" or the "Company"), a
Massachusetts corporation formed in 1849, is primarily a
regulated natural gas distribution utility. The Company serves
132,000 utility customers in 24 municipalities located
northwest of Boston and on Cape Cod. Through its
wholly-owned energy trucking subsidiary, Transgas Inc.
("Transgas"), the Company also provides over-the-road
transportation of liquefied natural gas ("LNG"), propane and
other commodities.
The Company's corporate office is located at 40 Market
Street, Lowell, Massachusetts 01852. The telephone number is
(508) 458-3171.
The Company's combined natural gas distribution service
areas in the Merrimack Valley region northwest of Boston and on
Cape Cod cover approximately 622 square miles with a year-round
population of approximately 500,000, which increases by
approximately 350,000 during the summer tourist season on Cape
Cod. The Company is serving approximately 48% of potential
customers in its service areas. Of its 132,000 customers,
approximately 90% are residential accounts. The Company added
4,223 firm customers in 1993. The Company's growth during the
1980's had been based primarily on new residential and commercial
construction in its service areas. More recently, as new
construction in the region has slowed from previous levels, the
Company has actively sought new customers to convert to gas from
other energy sources for their existing homes and businesses. Of
the total number of new customers in 1993, 57% converted from
other fuels.
The Company's 1993 consolidated operating revenues from gas
sales were derived 64% from residential customers, 32% from
commercial and firm industrial customers, 2% from interruptible
industrial customers and 1% from transportation customers. For
the year 1993, the Company sold 19,965 MMcf of gas, of which
12,889 MMcf was sold in the Merrimack Valley area and 7,076 MMcf
in the Cape Cod area. At December 31, 1993, 90% of the Company's
residential customers used gas as their source of heating fuel.
The demand for the products and services furnished by the Company
is to a great extent seasonal, being heaviest in the colder
months.
At December 31, 1993, the Company had 464 full-time and 51
part-time gas employees. Of those employees, 97 are covered by a
collective bargaining agreement with the United Steelworkers of
America which expires in April 1996 and 82 are covered by a separate
collective bargaining agreement with the United Steelworkers of
America which expires in February 1995. In addition, the Company
has 11 full-time and 3 part-time appliance sales employees and
Transgas employs 86 full-time employees. Of those Transgas employees,
59 are covered by a collective bargaining agreement with the
International Brotherhood of Teamsters, which expires in June 1996.
GAS SUPPLY
As of November 1, 1993, all interstate pipelines were
required to implement restructuring programs pursuant to Order
636 of the Federal Energy Regulatory Commission ("FERC"). See
"Regulatory Matters - Federal Regulation" below. Intended to
create a more competitive environment in the natural gas
industry, Order 636 required the pipelines to
unbundle/separate the three components of their former city gate
sales services: supply, transportation and storage. Under this
restructuring program local distribution companies ("LDCs") such
as the Company have been assigned their pro-rata share of the
transportation and storage entitlements which were inherent in
the discontinued sales service. Further, LDCs now negotiate
directly with suppliers for their supply requirements and must
effectively manage their transportation and storage in
conjunction with those supplies. In general, the Company pays
negotiated rates for gas supplies and tariffed rates (approved by
FERC) for transportation and storage services.
The Company has determined that its supply requirements
should be met through a combination of firm purchases, spot
purchases, supply from underground storage, liquefied natural gas
("LNG") and propane.
The following table shows the Company's sources of
firm supply to meet its gas requirements and the actual
components of gas sendout for each of the last three years:
1993 1992 1991
MMcf(a) % MMcf(a) % MMcf(a) %
Firm Gas Sources (b)
Supply purchase contracts (c) 19,731 74 - - - -
Pipeline contracts - - 24,933 81 24,933 81
LNG contracts 3,450 13 3,125 10 3,125 10
Storage inventory at
January 1(d) 3,417 13 2,786 9 2,625 9
Total sources 26,598 100 30,844 100 30,683 100
Gas Sendout
Pipeline:
Firm gas supply 2,620 13 - - - -
Pipeline contracts (e) 7,184 35 8,292 40 5,053 27
Spot purchases 5,178 26 8,341 40 9,604 51
Supplemental:
Underground storage 3,501 17 2,666 13 3,018 16
LNG-as liquid 907 4 564 2 524 3
LNG-as vapor 915 5 1,095 5 462 3
Propane-air 8 - 9 - 13 -
Total sendout 20,313 100 20,967 100 18,674 100
Ratio of firm sources to sendout 1.63 (f) 1.47 1.64
(a) The term "MMcf" means one million cubic feet of vapor
or vapor equivalent.
(b) 1993 reflects the Company's portfolio of firm
sources subsequent to the pipeline unbundling mandated by
FERC Order 636, calculated on an annualized basis.
(c) The Company's total firm pipeline transportation
capacity for 1993 following the unbundling mandated by FERC
Order 636 was 26,239 MMcf. The Company's firm supply purchase
contracts are structured to enable the Company to purchase
volumes equivalent to its total firm pipeline capacity
during the winter or peak season, but less than total firm
pipeline capacity during the off-peak season when customer
demand is less. Accordingly, on an annualized basis, the
total supply purchase contract volume shown is less than
total firm transportation capacity.
(d) The Company's storage inventory is drawn down and
refilled throughout the year depending upon the availability
and price of gas sources and upon the requirements of the
Company's customers. The Company's current level of
underground storage inventory capacity is 4,309 MMcf.
(e) 1993 reflects pipeline contracts prior to implementation
of FERC Order 636.
(f) The Company's ratio of firm sources to sendout for
1993 was determined by adding available transportation
capacity (26,239 MMcf) to LNG contracts (3,450 MMcf) and
storage inventory (3,417 MMcf), and then dividing by total
sendout.
Based upon presently available information concerning its
firm contracts for transportation, storage and supply, and other
supplemental sources, the Company expects to be able to meet the gas
requirements of its firm customers for the foreseeable future.
Additional information concerning the Company's firm sources of gas
transportation, storage and supply for its two service territories
is set forth below.
Merrimack Valley Service Area Sources
The Merrimack Valley service area is directly served by the
Tennessee Gas Pipeline Company ("Tennessee"). The Company has
three separate firm transportation contracts with Tennessee, and
two storage contracts with accompanying transportation contracts.
One of the firm transportation service contracts with
Tennessee is for approximately 25,196 Mcf per day and will be in
effect until November 1, 2000 and year to year thereafter unless
terminated upon twelve months prior written notice. The three
firm supply contracts which utilize this transportation service
provide various levels of supply service up to a total
of 25,196 Mcf per day during the peak period, and have been filed
with the Massachusetts Department of Public Utilities ("DPU") for
its approval. A ruling is expected shortly. See "Regulatory
Matters - Federal Regulation" below.
The second firm transportation service contract with
Tennessee is for approximately 17,300 Mcf per day and will be in
effect until April 1, 2013 and year to year thereafter unless
terminated upon twelve months prior written notice. To meet its
own peak season supply requirements, the Company has a firm
supply contract for the months of November through March which
provides the entire volume associated with this transportation
contract. The firm supply contract will be in effect until
October 31, 2000 and year to year thereafter unless terminated
with twelve months prior written notice. During the off-peak
season the Company expects to utilize its capacity entitlements
under this transportation contract to transport gas on behalf of
an 84 MW cogeneration facility which is independently owned.
The third firm transportation service contract with
Tennessee is utilized in conjunction with the Iroquois Pipeline
System ("Iroquois"). The Company has contracted for approximately
2,000 Mcf per day of capacity on Iroquois and Tennessee for
delivery of the Company's Canadian supplies to the Merrimack
Valley service area. These transportation contracts are in effect
until November 1, 2011 and continue year to year thereafter
unless terminated by twelve months prior written notice.
In addition, contingent upon all necessary regulatory
approvals, the Company has contracted for approximately 4,000 Mcf
of additional Canadian supply, along with associated capacity on
Iroquois and Tennessee. These volumes would be deliverable to
either the Merrimack Valley or Cape Cod service areas on a firm
basis.
The Company has underground storage capacity of
approximately 2,000,000 Mcf of natural gas pursuant to a contract
with Penn-York Energy Corporation. This storage contract is for
service to the Merrimack Valley service area and continues until
March 31, 1995 and from year to year thereafter unless terminated
upon twelve months prior written notice. The gas is transported
from storage to the Merrimack Valley service area by Tennessee
pursuant to a firm transportation contract for up to
approximately 15,691 Mcf per day which continues until March 31,
1995 and from year to year thereafter unless terminated upon
twelve months prior written notice.
The Company has another underground gas storage service
pursuant to separate storage and transportation contracts with
Tennessee. The storage contract provides capacity of
approximately 1,053,898 Mcf of natural gas, and the related
transportation contract is for up to approximately 7,504 Mcf per day.
These contracts continue until November 1, 2000 and from year to
year thereafter unless terminated upon twelve months prior
written notice.
To serve the Merrimack Valley service area, the Company owns
an LNG facility, located in Tewksbury, Massachusetts, which has
liquefaction capacity of approximately 5,000 Mcf of natural gas
per day. LNG can also be delivered by truck for injection into
this facility which has a total storage capacity of approximately
1,000,000 Mcf. In addition, the facility has the capability of
vaporizing and injecting back into the distribution system
approximately 60,000 Mcf per day.
The Company has also contracted for the purchase of LNG that
can be available to both the Merrimack Valley and Cape Cod
service areas. This contract provides for approximately 150,000
Mcf in the 1993-94 winter season with an expiration date of
October 31, 1994. The Company has an option to increase the
quantity of natural gas available under this contract by as much
as one-third during the winter season. In addition, the Company
has a separate contract for the liquefaction of approximately
300,000 Mcf of LNG each year through October 31, 1996.
The Company also owns facilities for the storage of
approximately 158,000 Mcf natural gas equivalent of propane which
can be vaporized, mixed with air and injected into the Merrimack
Valley service area distribution system at a rate of up to
approximately 26,000 Mcf per day. The Company does not normally
enter into long-term contracts for the purchase of propane to
supply either its Merrimack Valley or Cape Cod service areas, and
there are no such contracts currently in effect.
Cape Cod Service Area Sources
The Cape Cod service area is directly served by the
Algonquin Gas Transmission Company ("Algonquin") through various
transportation services. The Company has ten firm transportation
agreements with Algonquin which total approximately 37,207 Mcf of
capacity per day. Each of these ten Algonquin transportation
arrangements will be in effect until either October 31, 2012 or
October 31, 2013 and will continue year to year thereafter unless
terminated upon twelve months prior written notice. Because there
are no production supply sources directly connected to Algonquin,
these services are supported by multiple transportation and
storage services on seven upstream pipelines of several different
pipeline companies. The Company has contracted with four
suppliers for various levels of firm supply service up to a total of
20,918 Mcf per day during the peak season, and those contracts
have been filed with the DPU for its approval. A ruling is
expected shortly. See "Regulatory Matters - Federal Regulation"
below.
The Company has six unbundled storage contracts to service
the Cape Cod area, three of which are on the Texas Eastern
Transmission Company ("Texas Eastern") system and three on the
CNG Transmission Corporation ("CNG") system. Colonial has
contracted for underground natural gas storage capacity of
approximately 461,396 Mcf with Texas Eastern (related firm
transportation out of storage of up to approximately 6,451 Mcf per day)
through the 2012-2013 heating season and with CNG for underground
natural gas storage capacity of approximately 1,056,129 Mcf
(related firm transportation out of storage of up to approximately
6,442 Mcf per day). Texas Eastern and Algonquin transport the
natural gas from these storage fields to the Cape Cod service
area under a variety of transportation contracts.
Also, the Company leases facilities in the Cape Cod service
area for the storage (but not the liquefaction) of approximately
180,000 Mcf of LNG and, through May 1994, the Company has
contracted with a subsidiary of Algonquin for the annual storage
capacity of approximately 42,000 Mcf of LNG in a Providence,
Rhode Island facility. In addition, the Company has storage for
27,000 Mcf natural gas equivalent of propane which the Company
normally purchases on a short-term basis.
Lastly, the Company has one bundled supply and
transportation arrangement for the purchase and firm delivery of
gas. The arrangement provides for the delivery to the Company of up
to approximately 10,000 Mcf per day and approximately 3,000,000
Mcf annually of LNG as either liquid or vapor for a one year
period ending October 31, 1994. Under this arrangement the primary
delivery point is the Cape Cod service area, but the Company can
designate the Merrimack Valley service area on a day to day basis
as an alternate delivery point.
REGULATORY MATTERS
Federal Regulation
By the fall of 1993, several interstate pipelines serving
Colonial had implemented FERC Order 636. Order 636, issued in
1992, required interstate pipeline companies to "unbundle" gas
supply, transportation and storage services previously provided
under a unified tariffed service. Now, the Company is
responsible for procuring gas supplies and storage services to
meet its load requirements, with the pipelines providing
transportation only service. In general, Colonial pays
negotiated rates for gas supplies and FERC-approved tariffed
rates for transportation and storage services. On November 9,
1993, the Company filed each of its gas supply purchase
contracts to be reviewed by the DPU, which has not previously
exercised jurisdiction with respect to the Company's base load
supplies. These FERC ordered changes may increase the
contracting, supply and regulatory risk for the Company. At the
same time, they could also create a more competitive market for
gas supply which would permit the Company to achieve savings in
its cost of gas. Because the new rules have recently been
implemented, the Company cannot now predict their impact, but it
does not expect them to have a material direct effect on its
results of operations.
State Regulation
The Company is a public utility subject to the jurisdiction
and regulatory authority of the Massachusetts DPU with respect to
its rates as well as to the issuance of securities, franchise
territory and other related matters. The DPU permits
Massachusetts gas companies to utilize a cost of gas adjustment
clause which enables them to pass on to their customers, via
their monthly gas bill, changes in the cost of gas. Other changes
in rates charged to customers are subject to approval by the DPU
after formal proceedings.
The Company periodically receives refunds and charges from
its gas transporters related to rate adjustments ordered by the
FERC. All of the refunds and charges are returned to or collected
from utility customers under methods approved by the DPU.
During 1990, the DPU ruled that the Company and eight other
Massachusetts gas distribution companies can recover
environmental response costs related to former gas manufacturing
operations through the CGAC as described under "Environmental
Matters".
In August 1992, the DPU approved the second phase of the
Company's demand side management program. When completed this
program is expected to save over $15 million in gas costs that
would have been incurred over the lives of the installed
conservation measures. In order to achieve these savings,
Colonial is investing $8 million over a two-year period in
customer conservation measures such as insulation, heating
systems controls and water heating conservation devices. As a
result, Colonial expects to reduce customer bills by a net $7
million from the levels they would have been at if no
conservation occurred. Colonial has been authorized by the DPU
to fully recover all costs associated with the program through
the CGAC. In addition, the Company is also authorized to recover
the margins lost as a result of this program and, if certain
milestones are met, to receive an additional financial incentive
of up to $400,000. In January 1994, the Company filed a request
with the DPU to extend the operation of this program from
September 1994 until September 1995. A ruling is expected
shortly.
In October 1992, the Company received authorization from
the DPU to extend natural gas service into the Town of Eastham,
Massachusetts. Eastham, located at the eastern end of Cape Cod,
provides Colonial with new growth opportunities. Colonial
believes that there are 5,000 homes and businesses in Eastham
that currently utilize other fuels such as oil, electricity and
propane which present opportunities for natural gas conversions.
The Company has added 104 customers in the town since facilities
were constructed in the fourth quarter of 1992.
In November 1992, the DPU approved Colonial's request for
two new rate schedules which are designed to overcome equipment
cost disadvantages that existed in the natural gas air
conditioning and small scale cogeneration markets. By reducing ,
if not eliminating, these cost disadvantages, the Company
expects to increase sales into these markets and increase the
usage of its distribution system during off-peak periods. The
Company has used these new rate schedules to make proposals to
potentially large customers and expects to continue to pursue
this new market opportunity in 1994.
In April 1993, the Company applied for a $10.75 million or
7.87% increase of its base rates. This was only the second base
rate increase requested by Colonial since 1984. Effective
November 1, 1993, the Company received DPU approval of a
settlement agreement that called for a base rate increase
designed to produce additional revenues of $6.7 million or 4.9%
annually. In addition to this rate increase, the DPU approved a
proposal to expand the eligibility criteria for Colonial's
discount rate to be applied to low-income residential heating
customers. The table below summarizes the Company's recent rate
activity:
Results of the Company's Requests to Increase Base Revenue
Requested Approved
Date Effective Amount Percentage Amount Percentage
November 1, 1984 $ 4.30 million 3.73% $2.8 million 2.4%
November 1, 1990 $ 12.80 million 9.86% $7.9 million 5.6%
November 1, 1993 $ 10.75 million 7.87% $6.7 million 4.9%
In response to new marketing opportunities which may result
from the FERC Order 636 and the unbundling of interstate
pipeline services, Colonial requested in its 1993 rate filing
and gained DPU approval to offer a firm transportation service
on the Company's distribution system in order to provide
customers with an alternative to traditional firm sales service.
The DPU order also permits the Company to retain 10% of the
revenues generated from releasing the Company's interstate
pipeline transportation capacity to third parties above a
threshold of $2,500,000 for 1994. In 1993, the Company earned
$2,200,000 in capacity release revenue that was credited back to
firm customers and had no impact on earnings.
In October 1993, the DPU approved Colonial's proposal for a
rate targeted at the natural gas vehicle market. The approved
rates remain in effect over the course of a "market-development"
period that extends until January 1, 1997. To assist Colonial in
selling additional quantities of natural gas to the natural gas
powered vehicle market, the authorized rate is to be indexed
$.50 below the retail price of gasoline, provided that it cannot
fall below a floor rate equal to Colonial's marginal cost of gas
plus 5%. As of December 31, 1993, these rates are approximately
equal to $0.70 per gallon equivalent for retail customers.
COMPETITION
Massachusetts law protects gas companies from competition
with respect to pipeline distribution of natural gas within its
franchise areas by providing that, where a gas company exists in
active operation, no other person may lay pipe in the public ways
without the approval, after notice and hearing, of the municipal
authorities and the DPU. If a municipality desires to enter the
gas business, it must take certain procedural steps, including a
favorable vote by a majority of the voters in a city election or
two-thirds vote at each of two town meetings, and must purchase
the property of any gas company operating in the municipality, if
the company elects to sell, to the extent, and at such prices, as
may be agreed upon or, if no agreement is reached, as the DPU
determines.
Although, under a series of FERC orders issued in the late
1980's, certain larger industrial users may attempt to obtain gas
from other sources and by-pass a utility's distribution system,
the Company does not believe that these FERC orders will have a
material adverse effect on its business, in part because large
industrial users are not a significant part of its customer base.
The Company provides a transportation-only service of gas
through its distribution system for commercial and industrial
customers either on a firm basis or an interruptible basis. While
such transportation may displace direct gas sales by the Company,
this service assists qualifying customers in obtaining the lowest
possible gas costs while still contributing to the profit margin
of the Company. Profit margins from interruptible sales and
interruptible transportation result in lower gas costs which are
passed through to firm customers by the cost of gas adjustment
clause and, therefore, do not directly affect operating margin or
net income.
Fuel oil suppliers, electric utilities and propane suppliers
provide competition generally for residential, commercial and
industrial customers. Interruptible sales are generally in
competition with No. 6 fuel oil which most of the interruptible
customers are equipped to use. Lower worldwide oil prices may
adversely affect the Company's ability to retain or attract
customers. The Company's rates have remained generally
competitive with the price of alternative fuels, but the long-
term impact of fuel price changes on the Company and its rates
cannot be predicted.
The Company is aware that a steam generating enterprise
plans to begin operations in the City of Lowell in the fall of
1994. The enterprise would operate a "trigeneration" facility
which would produce (i) electric power for its own operation and
for sale to the New England power pool, (ii) gases such as CO2
and argon for sale in industrial applications, and (iii) steam
for sale through a pipeline system to government offices, schools
and businesses within the City of Lowell. The enterprise is in
the process of obtaining the easements and other permits and
regulatory approvals necessary for its steam pipeline system and
its fuel storage and generating facilities.
In the event this Lowell steam generating enterprise is
successfully able to produce and distribute steam to government
and private businesses in Lowell, many of whom are currently
customers of the Company, the Company would be faced with an
additional energy source competitor for those customers. It
cannot currently be determined what impact, if any, such
competition would have on the Company's sales to commercial and
industrial customers in Lowell.
ENVIRONMENTAL AND PIPELINE SAFETY MATTERS
The Company is subject to Federal and state laws and
regulations dealing with environmental protection. Compliance
with such environmental laws and regulations has resulted in
increased costs with respect to the Company's existing
operations.
Working with the Massachusetts Department of Environmental
Protection, the Company is engaged in site assessments and
evaluation of remedial options for contamination that has been
attributed to the Company's former gas manufacturing site and at
various related disposal sites. During 1990, the DPU ruled that Colonial
and eight other Massachusetts gas distribution companies can
recover environmental response costs related to former gas
manufacturing operations over a seven-year period, without
carrying costs, through the CGAC. Through December 31, 1993, the
Company had incurred $7,750,000 of environmental response costs
related to these sites, $1,521,000 for the former gas
manufacturing site and $6,229,000 for the related disposal sites. The
Company expects to continue incurring costs arising from these
environmental matters.
As of December 31, 1993 the Company has recorded on the
balance sheet a long-term liability of $5,300,000 representing
estimated future response costs relating to these sites based on
the Company's preferred methods of remediation; of this amount
$2,200,000 relates to the gas manufacturing site. Based upon the
DPU order approving rate recovery of environmental response
costs, a regulatory asset of $5,300,000 has been recorded on the
balance sheet ("Unrecovered Environmental Costs Accrued"). This
amount has decreased from the prior year estimate based upon the
completion of certain remedial actions and a lower expectation
of future costs due to changes in environmental regulations and
a better understanding of on-site exposures. Actual
environmental response costs to be incurred depends on various
factors, and therefore future costs may differ from the amount
currently recorded as a liability.
As of December 31, 1993, the Company has settled claims
relating to this matter with all liability insurers and other
known potentially responsible parties ("PRP"), except for one.
The Company expects to receive $250,000 in 1994 from that PRP.
In accordance with the DPU order referred to above, half the
costs incurred in pursuing insurers and other PRP are recovered
from the ratepayers through the CGAC and half are initially
borne by the Company. Also, per this order, any insurance and
other proceeds are applied first to the Company's costs of
pursuing recovery from insurers and other PRP, with the
remainder divided equally between the ratepayers and
shareholders.
The table below summarizes the environmental response costs
incurred and insurance and other proceeds received relating to
these environmental response costs:
(In Thousands) Response Costs Insurance and Other Proceeds
Recovered Returned Recorded as Non-
from Period of to Operating Income
Year Incurred Customers Rate Recovery Customers Net of Taxes
1988 $ 853 $ 488 1990-1997 - -
1989 4,031 2,303 1990-1997 - -
1990 639 274 1991-1998 - -
1991 374 107 1992-1999 $ 851 $ 525
1992 617 88 1993-2000 1,121 673
1993 1,236 - 1994-2001 469 290
Total $7,750 $3,260 $2,441 $1,488
TRANSGAS INC.
Transgas primarily provides over-the-road transportation of
LNG, propane and other commodities. Transgas acts as a common
carrier for approximately 60 commercial and gas utility customers
located in the eastern half of the United States. Canadian over-
the-road transportation services are also available through CGI
Transport Limited, which is a wholly-owned subsidiary of
Transgas. Transgas also provides a unique LNG portable pipeline
service, which permits gas utilities to provide continuous supply
of natural gas to communities while the pipeline supply is
temporarily interrupted during scheduled maintenance, upgrading,
and recertification, or during emergency interruption.
Rates charged for Transgas' common carrier transportation
service are filed as tariffs under operating authorities issued
to Transgas by the Interstate Commerce Commission and regulatory
agencies in various states, and to CGI Transport Limited by
Canadian provincial authorities. As common carriers, they are
also subject to various regulations applicable to motor common
carriers, including accounting matters, safety matters, rates
charged and various fiscal matters.
Transgas had revenues of $8.1 million in 1993. Approximately
50% of Transgas' revenue in 1993 was derived from transporting
Algerian LNG from the Distrigas import terminal which is located
in Everett, Massachusetts.
Transgas provides over-the-road transportation services by
utilizing a permanent fleet of 37 tractors. Transgas operates 56
trailers which are specifically designed for the transportation
of cryogenic liquids. Of those cryogenic transport trailers, 21
are leased on a long-term basis. In addition, Transgas has 25
trailers which are designed for the transportation of propane. Of
those propane transport trailers, 4 are leased on a long-term
basis. There were also 12 owner-operated tractors utilized for
propane hauling during the year. In addition to the equipment
described above, Transgas also has 11 trailers which are designed
for carrying vaporizers and 2 flat bed trailers.
Transgas competes with many other motor carriers engaged in
the transportation of various gases and other products. Transgas
believes, however, that it is the leading over-the-road
transporter of LNG due to the size of its fleet of specialized
cryogenic transport trailers.
Transgas closed its unprofitable bulk cement trucking
operation during the first half of 1993. The closing of this
operation permitted Transgas to reduce overhead expenses. In
addition, trucking equipment associated with this operation were
sold at prices exceeding net book value.
Item 1A. Executive Officers of the Registrant.
The following table indicates the present executive officers
of the Company, their ages, the dates when their service with the
Company began and their respective positions with the Company.
Affiliated with
Name and Age Position with Company Company Since
Frederic L. Putnam, Chairman and Chief Executive Officer 1953
Jr. (69)
Charles O. Swanson (62) President 1971
Frederic L. Putnam, Executive Vice President and
III (48) General Manager 1975
John P. Harrington (51) Vice President - Gas Supply 1966
Nickolas Stavropoulos Vice President - Finance and
(36) Chief Financial Officer 1979
Victor W. Baur (50) President - Transgas Inc. 1972
Dennis W. Carroll (47) Vice President and Treasurer 1990
Charles A. Cook (41) Vice President and General Counsel 1978
Mr. Putnam, Jr. has been Chairman of the Board of Directors
since 1981 and the Chief Executive Officer since 1977. He has
also been a Director since 1973.
Mr. Swanson has been President since July 1990. He is
scheduled to retire on May 1, 1994. He had been Executive Vice
President since November 1986. He has also been a Director since
1986.
Mr. Putnam, III, the son of F.L. Putnam, Jr., has been
Executive Vice President and General Manager since April 1993. He
has been elected President effective May 1, 1994. He had been
Vice President and General Manager since August 1989. He has also
been a Director since November 1991.
Mr. Harrington has been Vice President - Gas Supply since
August 1989. He had been Vice President - General Manager -
Lowell Division since November 1986. He has also been a Director
since February 1993.
Mr. Stavropoulos has been Vice President - Finance and Chief
Financial Officer since August 1989. He had been Vice President -
Rates and Planning since November 1985. He has also been a
Director since February 1993.
Mr. Baur has been President of Transgas Inc. since July
1990. He had been Executive Vice President - General Manager of
Transgas Inc. since 1984. He also became a Director in August
1993.
Mr. Carroll has been Vice President and Treasurer since
August 1990. Prior to then he was a partner with Grant Thornton,
the Company's independent certified public accountants.
Mr. Cook has been Vice President and General Counsel since
July 1990. He had been Vice President and Counsel since August
1989.
These officers hold office until the next annual meeting of
the Board of Directors or until their successors are duly elected
and qualified.
Item 2. Properties.
The Company has two principal operations centers and a
natural gas liquefaction and storage facility with approximately
1,000,000 Mcf of LNG storage capacity located in Tewksbury,
Massachusetts. The Company's gas production and storage
facilities, metering and regulation stations and operations
centers are generally located on land it owns.
A 175,000 Mcf LNG storage tank located on land owned by the
Company in South Yarmouth, Massachusetts is leased from an
unaffiliated company through 1998. The Company also has a lease
which expires in 2002 for office facilities in Lowell,
Massachusetts.
The Company's distribution mains of approximately 2,690
miles are located within public highways under franchises or
permits from state or municipal authorities, or on land owned by
others under easements or licenses from the owners. The Company's
first mortgage bonds are collateralized by utility property.
Management considers that the Company's properties are
adequate for the conduct of its business for the reasonably
foreseeable future.
Item 3. Legal Proceedings.
See Item 1, "Business--Environmental and Pipeline Safety
Matters" above, which is incorporated herein.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the Company's security
holders during the quarter ended December 31, 1993.
PART II
Item 5. Market for Registrant's Common Stock and Related
Stockholder Matters.
The information required to be reported hereunder is
incorporated by reference to the information reported in the
Company's 1993 annual report to stockholders under the caption
"Shareholder Information" and under Note D of the "Notes to
Consolidated Financial Statements".
Item 6. Selected Financial Data.
The information required to be reported hereunder is
incorporated by reference to the information reported in the
Company's 1993 annual report to stockholders under the caption
"Selected Financial Data".
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The information required to be reported hereunder is
incorporated by reference to the information reported in the
Company's 1993 annual report to stockholders under the caption
"Management's Discussion and Analysis of Financial Condition and
Results of Operations".
Item 8. Financial Statements and Supplementary Data.
The information required to be reported hereunder is
incorporated by reference to the information reported in the
Company's 1993 annual report to stockholders under the following
captions: "Consolidated Statements of Income", "Consolidated
Balance Sheets", "Consolidated Statements of Cash Flows",
"Consolidated Statements of Common Equity", "Notes to
Consolidated Financial Statements", "Report of Independent
Certified Public Accountants" and "Shareholder Information".
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information required to be reported hereunder for the
Company's Directors is incorporated by reference to the
information reported in the Company's Proxy Statement for its
1994 annual meeting of stockholders under the caption "Election
of Directors".
The information required to be reported hereunder for the
Executive Officers of the Registrant is incorporated by reference
to the information in Item 1A of this Form 10-K under the caption
"Executive Officers of the Registrant".
Item 11. Executive Compensation.
The information required to be reported hereunder is
incorporated by reference to the information reported in the
Company's Proxy Statement for its 1994 annual meeting of
stockholders under the captions "Executive Compensation" and
under the subheading "Directors' Compensation" of the caption
"Election of Directors".
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The information required to be reported hereunder is
incorporated by reference to the information reported in the
Company's Proxy Statement for its 1994 annual meeting of
stockholders under the caption "Security Ownership of Certain
Beneficial Owners and Management".
Item 13. Certain Relationships and Related Transactions.
The information required to be reported hereunder is
incorporated by reference to the information reported in the
Company's Proxy Statement for its 1994 annual meeting of
stockholders under the caption "Election of Directors".
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a) 1. Financial Statements The Consolidated Financial
Statements of the Company (including the Report of
Independent Certified Public Accountants) required to be
reported herein are incorporated by reference to the
information reported in the Company's 1993 annual report
to stockholders under the following captions:
"Consolidated Statements of Income", "Consolidated
Balance Sheets", "Consolidated Statements of Cash Flows",
"Consolidated Statements of Common Equity", "Notes to
Consolidated Financial Statements" and "Report of
Independent Certified Public Accountants".
2. Financial Statement Schedules The following Financial
Statement Schedules and report thereon are filed as part
of this Form 10-K on the pages indicated below:
Schedule
Number Description
Report of Independent Certified Public
Accountants on Schedules
V Property, Plant and Equipment for the three
years ended December 31, 1993
VI Accumulated Depreciation, Depletion and
Amortization of Property, Plant and Equipment
for the three years ended December 31, 1993
VIII Valuation and Qualifying Accounts for the
three years ended December 31, 1993
IX Short-term Debt for the three years ended
December 31, 1993
X Supplementary Income Statement Information
for the three years ended December 31, 1993
Schedules other than those listed above are either not required
or not applicable, or the required information is shown in the
financial statements or notes thereto. Columns omitted from
schedules filed have been omitted because the information is not
applicable.
3. List of Exhibits
Exhibit
Number Exhibit Reference
3a Restated Articles of Organization of Filed herewith as
Colonial Gas Company, dated April Exhibit 3a.
19, 1989, as amended on July 16,
1992, and supplemented by a
Certificate of Vote of Directors
establishing a series of a class of
stock filed on November 30, 1993.
3b By-Laws of Colonial Gas Company, as Filed herewith as
amended to date. Exhibit 3b.
4a Second Amended and Restated First Incorporated herein
Mortgage Indenture, dated as of June by reference.
1, 1992, filed as Exhibit 4(b) to
Form 10-Q of the Registrant for the
quarter ended June 30, 1992.
4b First Supplemental Indenture, dated Incorporated herein
as of June 15, 1992, filed as by reference.
Exhibit 4(c) to Form 10-Q of the
Registrant for the quarter ended
June 30, 1992.
4c Credit Agreement for Colonial Gas Incorporated herein
Company, dated as of June 27, 1990, by reference.
filed as Exhibit 10(a) to Form 8-K
of the Registrant for the quarter
ended June 30, 1990, as amended on
December 24, 1991, filed as Exhibit
4(j) to Form 10-K of the Registrant
for the year ended December 31,
1991, as amended on July 27, 1993,
filed as Exhibit 4(a) to Form 10-Q
of the Registrant for the quarter
ended June 30, 1993.
4d Credit Agreement for Massachusetts Incorporated herein
Fuel Inventory Trust, dated as of by reference.
June 27, 1990, filed as Exhibit
10(b) to Form 8-K of the Registrant
for the quarter ended June 30, 1990,
as amended on July 27, 1993, filed
as Exhibit 4(b) to Form 10-Q of the
Registrant for the quarter ended
June 30, 1993.
4e Purchase Contract, dated as of June Incorporated herein
27, 1990 between Massachusetts Fuel by reference.
Inventory Trust acting by and
through its Trustee, Shawmut Bank,
N.A. and Colonial Gas Company, filed
as Exhibit 10(e) to Form 8-K of the
Registrant for quarter ended June
30, 1990.
4f Security Agreement and Assignment of Incorporated herein
Contracts, dated as of June 27, 1990 by reference.
made by Massachusetts Fuel Inventory
Trust in favor of The First National
Bank of Boston as Agent, for the
Ratable Benefit of the Secured
Parties Named Herein, filed as
Exhibit 10(c) to Form 8-K of the
Registrant for the quarter ended
June 30, 1990.
4g Trust Agreement, dated as of June Incorporated herein
22, 1990 between Colonial Gas by reference.
Company (as Trustor) and Shawmut
Bank, N.A. (as Trustee), filed as
Exhibit 10(d) to Form 8-K of the
Registrant for quarter ended June
30, 1990.
10a Storage Service Transportation Incorporated herein
Contract with Tennessee Gas Pipeline by reference.
Company, a Division of Tenneco Inc.,
dated January 1, 1983, filed as
Exhibit 10(b) to the Registrant's
Registration Statement on Form S-2.
Commission File No. 2-93118.
10b Service Agreement with Algonquin Gas Incorporated herein
Transmission Company, dated December by reference.
11, 1972, filed as Exhibit 13(n) to
Colonial Gas Energy System's
Registration Statement on Form S-1.
Commission File No. 2-54673.
10c Storage Service Agreement with Penn- Incorporated herein
York Energy Corporation, dated as of by reference.
December 21, 1984, filed as Exhibit
10(r) to the Registrant's Annual
Report on Form 10-K for the fiscal
year ended December 31, 1984.
10d Agreement for Sale of Gas between Incorporated herein
Bay State Gas Company and Colonial by reference.
Gas Company, dated December 11,
1987, filed as Exhibit 10(m) to the
Registrant's Annual Report on Form
10-K for the fiscal year ended
December 31, 1987.
10e Agreement for Liquefaction of Gas Incorporated herein
with Bay State Gas Company, dated by reference.
March 14, 1988, filed as Exhibit
10(p) to the Registrant's Annual
Report on Form 10-K for the fiscal
year ended December 31, 1989.
10f Service Agreement with Distrigas of Incorporated herein
Massachusetts Corporation, as by reference.
related to firm vapor service, dated
September 30, 1989, filed as Exhibit
10(q) to the Registrant's Annual
Report on Form 10-K for the fiscal
year ended December 31, 1989.
10g Letter Agreement with Distrigas of Incorporated herein
Massachusetts Corporation, related by reference.
to firm vapor service agreement,
dated December 8, 1989, filed as
Exhibit 10(r) to the Registrant's
Annual Report on Form 10-K for the
fiscal year ended December 31, 1989.
10h Service Agreement with Distrigas of Incorporated herein
Massachusetts Corporation, related by reference.
to firm vapor service, dated October
31, 1990, filed as Exhibit 10(s) to
the Registrant's Annual Report on
Form 10-K for the fiscal year ended
December 31, 1990.
10i Gas Transportation Contract for Firm Incorporated herein
Reserved Service with Iroquois, by reference.
dated February 7, 1991, filed as
Exhibit 10(v) to the Registrant's
Annual Report on Form 10-K for the
fiscal year ended December 31, 1990.
10j Gas Sales Agreement No. 1 with ANE, Incorporated herein
dated February 7, 1991, filed as by reference.
Exhibit 10(y) to the Registrant's
Annual Report on Form 10-K for the
fiscal year ended December 31, 1990.
10k Gas Sales Agreement between Sonat Incorporated herein
Exploration Company and Sonat by reference.
Marketing Company and Colonial Gas
Company, dated October 1, 1990,
filed as Exhibit 10(cc) to the
Registrant's Annual Report on Form
10-K for the fiscal year ended
December 31, 1990.
10l Firm Natural Gas Transportation Incorporated herein
Agreement between Tennessee Gas by reference.
Pipeline Company and Colonial Gas
Company (under Rate Schedule NET-
NE), dated February 7, 1991, filed
as Exhibit 10(ff) to the
Registrant's Annual Report on Form
10-K for the fiscal year ended
December 31, 1991.
10m Amended and Restated Gas Sales Incorporated herein
Agreement between Sonat Marketing by reference.
Company and Colonial Gas Company,
dated July 16, 1991, filed as
Exhibit 10(jj) to the Registrant's
Annual Report on Form 10-K for the
fiscal year ended December 31, 1991.
10n Letter Agreement with Distrigas of Incorporated herein
Massachusetts Corporation, related by reference.
to firm vapor service agreement,
dated November 16, 1992, filed as
Exhibit 10(dd) to the Registrant's
Annual Report on Form 10-K for the
fiscal year ended December 31, 1992.
10o Gas Transportation Contract for Firm Incorporated herein
Reserved Service between Iroquois by reference.
Gas Transmission System, L.P. and
Colonial Gas Company, dated November
25, 1991, filed as Exhibit 10(gg) to
the Registrant's Annual Report on
Form 10-K for the fiscal year ended
December 31, 1992.
10p Service Agreement between Algonquin Filed herewith as
Gas Transmission Company and Exhibit 10p.
Colonial Gas Company (under Rate
Schedule AFT-E), dated June 1, 1993.
10q Service Agreement between Algonquin Filed herewith as
Gas Transmission Company and Exhibit 10q.
Colonial Gas Company (under Rate
Schedule AFT-1), dated June 1, 1993.
10r Service Agreement between Algonquin Filed herewith as
Gas Transmission Company and Exhibit 10r.
Colonial Gas Company (under Rate
Schedule AFT-1), dated June 1, 1993.
10s Service Agreement between Algonquin Filed herewith as
Gas Transmission Company and Exhibit 10s.
Colonial Gas Company (under Rate
Schedule AFT-1), dated June 1, 1993.
10t Service Agreement between Algonquin Filed herewith as
Gas Transmission Company and Exhibit 10t.
Colonial Gas Company (under Rate
Schedule AFT-E), dated June 1, 1993.
10u Service Agreement between Algonquin Filed herewith as
Gas Transmission Company and Exhibit 10u.
Colonial Gas Company (under Rate
Schedule AFT-1), dated June 1, 1993.
10v Service Agreement between Algonquin Filed herewith as
Gas Transmission Company and Exhibit 10v.
Colonial Gas Company (under Rate
Schedule AFT-1), dated June 1, 1993.
10w Service Agreement between Texas Filed herewith as
Eastern Transmission Corporation and Exhibit 10w.
Colonial Gas Company (under Rate Schedule
CDS), dated June 1, 1993.
10x Service Agreement between Texas Filed herewith as
Eastern Transmission Corporation and Exhibit 10x.
Colonial Gas Company (under Rate
Schedule FT-1), dated June 1, 1993.
10y Service Agreement between Texas Filed herewith as
Eastern Transmission Corporation and Exhibit 10y.
Colonial Gas Company (under Rate
Schedule FTS-8), dated June 1, 1993.
10z Service Agreement between Texas Filed herewith as
Eastern Transmission Corporation and Exhibit 10z.
Colonial Gas Company (under Rate
Schedule FTS-7), dated June 1, 1993.
10aa Service Agreement between Texas Filed herewith as
Eastern Transmission Corporation and Exhibit 10aa.
Colonial Gas Company (under Rate
Schedule FT-1), dated June 1, 1993.
10bb Service Agreement between Texas Filed herewith as
Eastern Transmission Corporation and Exhibit 10bb.
Colonial Gas Company (under Rate
Schedule SS-1), dated June 1, 1993.
10cc Service Agreement between Texas Filed herewith as
Eastern Transmission Corporation and Exhibit 10cc.
Colonial Gas Company (under Rate
Schedule SS-1), dated June 1, 1993.
10dd Service Agreement between Texas Filed herewith as
Eastern Transmission Corporation and Exhibit 10dd.
Colonial Gas Company (under Rate
Schedule SS-1), dated June 1, 1993.
10ee Service Agreement between Filed herewith as
Transcontinental Gas Pipe Line Exhibit 10ee.
Corporation and Colonial Gas Company
(under Rate Schedule FT), dated June
1, 1993.
10ff Service Agreement between Texas Filed herewith as
Eastern Transmission Corporation and Exhibit 10ff.
Colonial Gas Company (under Rate
Schedule FT-1), dated June 1, 1993.
10gg Firm Gas Transportation Agreement Filed herewith as
between Koch Gateway Pipeline Company Exhibit 10gg.
and Colonial Gas Company, dated
December 1, 1993.
10hh Service Agreement between Texas Filed herewith as
Eastern Transmission Corporation and Exhibit 10hh.
Colonial Gas Company (under Rate
Schedule FT-1), dated June 1, 1993.
10ii Service Agreement between Texas Filed herewith as
Eastern Transmission Corporation and Exhibit 10ii.
Colonial Gas Company (under Rate
Schedule FT-1), dated June 1, 1993.
10jj Service Agreement between Algonquin Filed herewith as
Gas Transmission Company and Exhibit 10jj.
Colonial Gas Company (under Rate
Schedule PSS-T), dated August 1,
1993.
10kk Service Agreement between Algonquin Filed herewith as
Gas Transmission Company and Exhibit 10kk.
Colonial Gas Company (under Rate
Schedule AFT-2), dated August 1,
1993.
10ll Service Agreement between Algonquin Filed herewith as
Gas Transmission Company and Exhibit 10ll.
Colonial Gas Company (under Rate
Schedule AFT-1), dated August 1,
1993.
10mm Gas Storage Contract between Filed herewith as
Tennessee Gas Pipeline Company and Exhibit 10mm.
Colonial Gas Company (under Rate
Schedule FS), dated September 1,
1993.
10nn Gas Transportation Agreement between Filed herewith as
Tennessee Gas Pipeline Company and Exhibit 10nn.
Colonial Gas Company (under Rate
Schedule FT-A), dated September 1,
1993.
10oo Gas Transportation Agreement between Filed herewith as
Tennessee Gas Pipeline Company and Exhibit 10oo.
Colonial Gas Company (under Rate
Schedule FT-A), dated September 1,
1993.
10pp Gas Transportation Agreement between Filed herewith as
Tennessee Gas Pipeline Company and Exhibit 10pp.
Colonial Gas Company (under Rate
Schedule FT-A), dated September 1,
1993.
10qq Service Agreement between Algonquin Filed herewith as
Gas Transmission Company and Exhibit 10qq.
Colonial Gas Company (under Rate
Schedule FST-LG), dated October 1,
1993.
10rr Service Agreement between CNG Filed herewith as
Transmission Corporation and Exhibit 10rr.
Colonial Gas Company (under Rate
Schedule FTNN), dated October 1,
1993.
10ss Service Agreement between CNG Filed herewith as
Transmission Corporation and Exhibit 10ss.
Colonial Gas Company (under Rate
Schedule GSS), dated October 1,
1993.
10tt Service Agreements between CNG Filed herewith as
Transmission Corporation and Exhibit 10tt.
Colonial Gas Company (under Rate
Schedule GSS-II), dated September
30, 1993.
10uu Service Agreement between Texas Filed herewith as
Eastern Transmission Corporation and Exhibit 10uu.
Colonial Gas Company (under Rate
Schedule FT-1), dated October 1,
1993.
10vv Gas Transportation Agreement between Filed herewith as
Tennessee Gas Pipeline Company and Exhibit 10vv.
Colonial Gas Company (under Rate
Schedule FT-A), dated September 1,
1993.
10ww Service Agreement between National Filed herewith as
Fuel Gas Supply Corporation and Exhibit 10ww.
Colonial Gas Company (under Rate
Schedule EFT), dated October 28,
1993.
10xx Gas Transportation Agreement between Filed herewith as
Tennessee Gas Pipeline Company and Exhibit 10xx.
Colonial Gas Company (under Rate
Schedule FT-A), dated September 1,
1993.
10yy Service Agreement between Algonquin Filed herewith as
Gas Transmission Company and Exhibit 10yy.
Colonial Gas Company (under Rate
Schedule AIT-1), dated September 15,
1993.
10zz Gas Transportation Agreement between Filed herewith as
Tennessee Gas Pipeline Company and Exhibit 10zz.
Colonial Gas Company (under Rate
Schedule FT-A), dated October 1,
1993.
10aaa Lease Agreement, dated as of May 1, Incorporated herein
1982, with Olde Market House by reference.
Associates of Lowell, filed as
Exhibit 10(y) to the Registrant's
Annual Report on Form 10-K for the
fiscal year ended December 31, 1982.
10bbb Lease of Equipment from The National Incorporated herein
Shawmut Bank of Boston (now Shawmut, by reference.
Bank N.A.) as Trustee, as Lessor
dated as of May 1, 1973, filed as
Exhibit 13(c) to Colonial Gas Energy
System's Registration Statement on
Form S-1. Commission File No. 2-
54673.
10ccc Form Employment Agreement for Incorporated herein
corporate officers, filed as Exhibit by reference.
10(kk) to the Registrant's Annual
Report on Form 10-K for the fiscal
year ended December 31, 1992.
10ddd Supplemental Retirement Plan Incorporated herein
Agreement between Colonial Gas by reference.
Company and F. L. Putnam, Jr., dated
December 29, 1981, filed as Exhibit
10(ll) to the Registrant's Annual
Report on Form 10-K for the fiscal
year ended December 31, 1992.
10eee Supplemental Retirement Plan Incorporated herein
Agreement between Colonial Gas by reference.
Company and C. O. Swanson, dated
December 29, 1981, filed as Exhibit
10(mm) to the Registrant's Annual
Report on Form 10-K for the fiscal
year ended December 31, 1992.
13a Those portions of the 1993 Annual Filed herewith as
Report to Stockholders which have Exhibit 13a.
been incorporated by reference in
Part II Items 5 - 8 and Part IV Item
14 part a 1.
22a Subsidiaries of the Registrant. Filed herewith as
Exhibit 22a.
24a Consent of Independent Certified Filed herewith as
Public Accountants. Exhibit 24a.
____________________
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
Exhibits 10bbb, 10ccc and 10ddd above are management
contracts or compensatory plans or arrangements in which
the executive officers of the Company participate.
b)Reports on Form 8-K.
There were no reports on Form 8-K for the quarter ended
December 31, 1993.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON
SCHEDULES
To the Shareholders of
Colonial Gas Company
In connection with our audit of the consolidated financial
statements of Colonial Gas Company and subsidiaries referred
to in our report dated January 18, 1994, which is included
in the 1993 Annual Report to Stockholders and incorporated
by reference in Part II of this Form 10-K, we have also
audited the schedules listed at Part IV, Item 14(a)2. In our
opinion, these schedules present fairly, in all material
respects, the information required to be set forth therein.
GRANT THORNTON
Boston, Massachusetts
January 18, 1994
[END OF REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON
SCHEDULES]
SCHEDULE V
COLONIAL GAS COMPANY AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
Year ended December 31, 1993
(In Thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
OTHER
CHANGES- BALANCE
BALANCE AT ADD AT
CLASSIFI- BEGINNING ADDITIONS RETIRE- (DEDUCT)- END OF
CATION OF PERIOD AT COST MENTS DESCRIBE PERIOD
Utility Property
$ 71 (b)
Land, rights of
way and
structures $ 12,269 $ - $ 131 345 (a) $ 12,554
1,233 (a)
Gas production
equipment 10,403 - 151 287 (b) 11,772
19,464 (a)
Transmission and
distribution 196,256 - 747 (358)(b) 214,615
Utilization
equipment 5,674 - 284 954 (a) 6,344
General equipment 6,188 - 462 2,226 (a) 7,952
Intangible plant 372 418 - - 790
Construction work
in progress 5,353 25,412 - (24,222)(a) 6,543
Total Utility
Property $236,515 $25,830 $ 1,775 $ - $260,570
Non-Utility Property
Land and
buildings $ 1,348 $ 12 $ 25 $ - $ 1,335
Services 640 - - - 640
General equipment 8,742 359 2,156 - 6,945
Total Non-
Utility
Property $ 10,730 $ 371 $ 2,181 $ - $ 8,920
Assets Under
Capital Leases $ 8,329 $ 494 $ 1,348 $ - $ 7,475
_____________________________
See Note A of Notes to Consolidated Financial Statements.
(a) Transfers to plant in service from construction work in progress.
(b) Intercompany transfer or reclassification of fixed assets.
[END OF COLONIAL GAS COMPANY AND SUBSIDIARIES PROPERTY, PLANT AND
EQUIPMENT YEAR ENDED DECEMBER 31, 1993]
SCHEDULE V
COLONIAL GAS COMPANY AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
Year ended December 31, 1992
(In Thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
OTHER
CHANGES- BALANCE
BALANCE AT ADD AT
CLASSIFI- BEGINNING ADDITIONS RETIRE- (DEDUCT)- END OF
CATION OF PERIOD AT COST MENTS DESCRIBE PERIOD
Utility Property
Land, rights of
way and
structures $ 11,977 $ - $ 8 $ 300 (a) $ 12,269
Gas production
equipment 10,549 - 180 34 (a) 10,403
Transmission and
distribution 177,916 - 528 18,868 (a) 196,256
Utilization
equipment 4,376 - 221 1,519 (a) 5,674
General equipment 3,065 - 83 3,206 (a) 6,188
Intangible plant 433 372 - (433)(a) 372
Construction work
in progress (5)(b)
2,547 26,300 - (23,489)(a) 5,353
Total Utility
Property $210,863 $26,672 $ 1,020 $ - $236,515
Non-Utility Property
Land and
buildings $ 1,343 $ - $ - $ 5 (b) $ 1,348
Services 640 - - - 640
General equipment 8,626 154 38 - 8,742
Total Non-
Utility
Property $ 10,609 $ 154 $ 38 $ 5 $ 10,730
Assets Under
Capital Leases $ 7,963 $ 628 $ 262 $ - $ 8,329
_____________________________
See Note A of Notes to Consolidated Financial Statements.
(a) Transfers to plant in service from construction work in progress.
(b) Intercompany transfer or reclassification of fixed assets.
[END OF COLONIAL GAS COMPANY AND SUBSIDIARIES PROPERTY, PLANT AND
EQUIPMENT YEAR ENDED DECEMBER 31, 1992]
SCHEDULE V
COLONIAL GAS COMPANY AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
Year ended December 31, 1991
(In Thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
OTHER
CHANGES- BALANCE
BALANCE AT ADD AT
CLASSIFI- BEGINNING ADDITIONS RETIRE- (DEDUCT)- END OF
CATION OF PERIOD AT COST MENTS DESCRIBE PERIOD
Utility Property
Land, rights of
way and $ (47)(b)
structures $ 11,976 $ - $ 46 94 (a) $ 11,977
Gas production
equipment 10,642 - 173 80 (a) 10,549
Transmission and
distribution 164,013 - 534 14,437 (a) 177,916
Utilization
equipment 2,799 - 163 1,740 (a) 4,376
General equipment 2,765 - 24 324 (a) 3,065
Intangible plant - 433 - - 433
Construction work
in progress 3,108 16,114 - (16,675)(a) 2,547
Total Utility
Property $195,303 $16,547 $ 940 $ (47) $210,863
Non-Utility Property
Land and
buildings $ 1,346 $ 14 $ 64 $ 47 (b) $ 1,343
Services 640 - - - 640
General equipment 8,318 563 255 - 8,626
Total Non-
Utility
Property $ 10,304 $ 577 $ 319 $ 47 $ 10,609
Assets Under
Capital Leases $ 8,646 $ 273 $ 956 $ - $ 7,963
_____________________________
See Note A of Notes to Consolidated Financial Statements.
(a) Transfers to plant in service from construction work in progress.
(b) Intercompany transfer or reclassification of fixed assets.
[END OF COLONIAL GAS COMPANY AND SUBSIDIARIES PROPERTY, PLANT AND
EQUIPMENT YEAR ENDED DECEMBER 31, 1991]
SCHEDULE VI
COLONIAL GAS COMPANY AND SUBSIDIARIES
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
For the Three Years Ended December 31, 1993
(In Thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
ADDITIONS OTHER
BALANCE CHARGED CHANGES -
AT TO COSTS ADD BALANCE
BEGINNING AND RETIRE- (DEDUCT)- AT END
DESCRIPTION OF PERIOD EXPENSES MENTS DESCRIBE OF PERIOD
Year Ended December 31, 1993
Accumulated
depreciation of
utility property
(separate reserves
not maintained) $52,700 $6,939 $1,882 $ 100 (1) $57,857
Accumulated
depreciation of non-
utility property $ 6,691 $ 670 $1,615 $ (61)(3) $ 5,685
Amortization on $ 61 (3)
capital leases $ 3,963 $ - $ - $ (463) $ 3,561
Year Ended December 31, 1992
Accumulated
depreciation of
utility property
(separate reserves
not maintained) $48,127 $6,023 $1,464 $ 14 (1) $52,700
Accumulated
depreciation of non-
utility property $ 5,842 $ 941 $ 8 $ (84)(3) $ 6,691
Amortization on $ 84 (3)
capital leases $ 3,406 $ - $ - $ 473 $ 3,963
Year Ended December 31, 1991
Accumulated
depreciation of
utility property
(separate reserves
not maintained) $43,823 $5,488 $1,276 $ 92 (1) $48,127
Accumulated
depreciation of non- $ (265)(2)
utility property $ 5,228 $ 957 $ - $ (78)(3) $ 5,842
Amortization on $ 78 (3)
capital leases $ 3,684 $ - $ - $ (356) $ 3,406
_______________________________________________
(1) Depreciation charged on clearing accounts.
(2) Sold to third party.
(3) Capitalized tractor lease.
[END OF COLONIAL GAS COMPANY AND SUBSIDIARIES ACCUMULATED DEPRECIATION,
DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE THREE YEARS ENDED DECEMBER 31, 1993]
SCHEDULE VIII
COLONIAL GAS COMPANY AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
For the Three Years Ended December 31, 1993
(In Thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE CHARGED BALANCE
AT TO COSTS AT
BEGINNING AND DEDUC- END OF
DESCRIPTION OF PERIOD EXPENSES TIONS PERIOD
For the Year Ended December 31, 1993
Reserve for
uncollectible
accounts $1,187 $2,101 $1,606 (1) $1,682
Reserve for
insurance claims $ 548 $ 616 $ 566 $ 598
For the Year Ended December 31, 1992
Reserve for
uncollectible
accounts $ 778 $1,696 $1,287 (1) $1,187
Reserve for
insurance claims $ - $ 622 $ 74 $ 548
For the Year Ended December 31, 1991
Reserve for
uncollectible
accounts $ 856 $1,516 $1,594 (1) $ 778
Reserve for
insurance claims $ 50 $ - $ 50 $ -
_____________________________
(1) Accounts charged off, net of collections.
[END OF COLONIAL GAS COMPANY AND SUBSIDIARIES VALUATION AND
QUALIFYING ACCOUNTS FOR THE THREE YEARS ENDED DECEMBER 31, 1993]
SCHEDULE IX
COLONIAL GAS COMPANY AND SUBSIDIARIES
SHORT-TERM DEBT
For the Three Years Ended December 31, 1993
(In Thousands Except Percentages)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
WEIGHTED WEIGHTED
AVERAGE MAXIMUM AVERAGE AVERAGE
CATEGORY OF INTEREST AMOUNT AMOUNT INTEREST
AGGREGATE BALANCE RATE OUTSTANDING OUTSTANDING RATE
SHORT-TERM AT END AT END DURING THE DURING THE DURING THE
DEBT OF PERIOD OF PERIOD PERIOD PERIOD (1) PERIOD (2)
Year Ended December 31, 1993
Bank Loans $32,600 3.64% $32,600 $14,546 3.71%
Gas
Inventory
Purchase $15,233 3.47% $15,233 $10,982 3.55%
Obligations
Year Ended December 31, 1992
Bank Loans $24,500 3.76% $42,600 $20,314 4.62%
Gas
Inventory
Purchase $14,741 3.81% $11,768 $10,676 4.05%
Obligations
Year Ended December 31, 1991
Bank Loans $28,000 5.06% $28,000 $ 9,251 6.42%
Gas
Inventory
Purchase $11,726 5.12% $11,864 $ 9,601 6.54%
Obligations
_____________________________
See Note F of Notes to Consolidated Financial Statements.
(1) Amounts calculated by weighting the average of amount of short-term debt
outstanding each day during the year.
(2) Rates calculated by dividing actual interest expense by average outstanding
balance of short-term debt.
[END OF COLONIAL GAS COMPANY AND SUBSIDIARIES SHORT-TERM DEBT
FOR THE THREE YEARS ENDED DECEMBER 31, 1993]
SCHEDULE X
COLONIAL GAS COMPANY AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
CHARGED TO
COSTS AND EXPENSES
YEAR ENDED DECEMBER 31,
1993 1992 1991
Maintenance and repairs included in:
Operating Expenses - Maintenance $5,631 $5,477 $5,124
Other Income 444 593 550
Total $6,075 $6,070 $5,674
Depreciation, depletion and amortization
of property, plant equipment
included in:
Operating Expenses - Depreciation $6,831 $5,895 $5,488
Operating Expenses - Operations 240 175 126
Other Income 632 906 910
Total $7,703 $6,976 $6,524
Taxes, other than payroll and income
Local property taxes included in:
Operating Expenses - Local property
taxes $2,496 $2,059 $1,683
Other Income 42 36 31
2,538 2,095 1,714
Other taxes included in:
Operating Expenses - Other Taxes 130 131 103
Other Income 186 299 347
316 430 450
Total $2,854 $2,525 $2,164
Depreciation and amortization of intangible assets, pre-operating costs
and similar deferrals, royalties and advertising costs are not shown
since the amounts are either less than 1% of operating revenues or none.
[END OF COLONIAL GAS COMPANY AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION]
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
COLONIAL GAS COMPANY Date
By March 18 , 1994
F.L. Putnam, Jr., Chairman
of the Board of Directors
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
F.L. Putnam, Jr. Chief Executive Officer, March 18 , 1994
Director
Nickolas Stavropoulos Vice President - Finance and March 18 , 1994
Chief Financial Officer, Director
(Principal Financial Officer)
D.W. Carroll Vice President and Treasurer March 18 , 1994
(Principal Accounting Officer)
V.W. Baur Director March 18 , 1994
A.C. Dudley Director March 18 , 1994
J.P. Harrington Director March 18 , 1994
H.C. Homeyer Director March 18 , 1994
R.L. Hull Director March 18 , 1994
K.R. Lydecker Director March 18 , 1994
F.L. Putnam, III Director March 18 , 1994
J.F. Reilly, Jr. Director March 18 , 1994
A.B. Sides, Jr. Director March 18 , 1994
M.M. Stapleton Director March 18 , 1994
C.O. Swanson Director March 18 , 1994
G.E. Wik Director March 18 , 1994