SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1994 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-898 (LOGO) THE NARRAGANSETT ELECTRIC COMPANY (Exact name of registrant as specified in charter) Rhode Island 05-0187805 (State or other (I.R.S. Employer jurisdiction of Identification No.) incorporation or organization) 280 Melrose Street, Providence, R.I. 02901 (Address of principal executive offices) Registrant's telephone number, including area code (401-941-1400) 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 ( ) Common stock, par value $50 per share, authorized and outstanding: 1,132,487 shares at March 31, 1994. PART I FINANCIAL INFORMATION Item 1. Financial Statements - ---------------------------- THE NARRAGANSETT ELECTRIC COMPANY Statements of Income Periods Ended March 31 (Unaudited) Three Months Twelve Months ------------ ------------- 1994 1993 1994 1993 ---- ---- ---- ---- (In Thousands) Operating revenue $125,461 $124,147 $484,343 $469,552 -------- -------- -------- -------- Operating expenses: Fuel for generation 106 49 248 889 Purchased electric energy, principally from New England Power Company, an affiliate78,207 76,242 312,860 291,213 Other operation 15,867 20,334 69,067 70,843 Maintenance 3,399 3,627 11,952 12,385 Depreciation 4,675 4,423 17,896 18,434 Taxes, other than federal income 9,909 9,686 36,068 35,419 Federal income taxes 2,891 1,566 5,500 7,341 -------- -------- -------- -------- Total operating expenses 115,054 115,927 453,591 436,524 -------- -------- -------- -------- Operating income 10,407 8,220 30,752 33,028 Other income: Allowance for equity funds used during construction 278 66 755 75 Other income (expense) - net (787) (904) (517) (837) -------- -------- -------- -------- Operating and other income 9,898 7,382 30,990 32,266 -------- -------- -------- -------- Interest: Interest on long-term debt 3,325 3,106 12,934 13,173 Other interest 554 562 2,066 1,499 Allowance for borrowed funds used during construction - credit (295) (86) (798) (326) -------- -------- -------- -------- Total interest 3,584 3,582 14,202 14,346 -------- -------- -------- -------- Net income $ 6,314 $ 3,800 $ 16,788 $ 17,920 ======== ======== ======== ======== Statements of Retained Earnings Retained earnings at beginning of period$ 81,659 $ 74,207 $ 75,354 $ 64,649 Net income 6,314 3,800 16,788 17,920 Dividends declared on cumulative preferred stock (536) (388) (2,079) (1,553) Dividends declared on common stock (566) (2,265) (2,831) (5,662) Premium on redemption of preferred stock (361) -------- -------- -------- -------- Retained earnings at end of period $ 86,871 $ 75,354 $ 86,871 $ 75,354 ======== ======== ======== ======== The accompanying notes are an integral part of these financial statements. Per share data is not relevant because the Company's common stock is wholly owned by New England Electric System. THE NARRAGANSETT ELECTRIC COMPANY Balance Sheets (Unaudited) March 31, December 31, ASSETS 1994 1993 ------ ---- ---- (In Thousands) Utility plant, at original cost $541,401 $534,569 Less accumulated provisions for depreciation 157,811 156,652 -------- -------- 383,590 377,917 Construction work in progress 51,515 43,660 -------- -------- Net utility plant 435,105 421,577 -------- -------- Current assets: Cash 1,203 838 Accounts receivable: From sales of electric energy 57,105 55,795 Other (including $1,101,000 and $1,087,000 from affiliates)10,12011,701 Less reserves for doubtful accounts 3,947 3,800 -------- -------- 63,278 63,696 Fuel, materials and supplies, at average cost 6,000 4,572 Prepaid and other current assets 10,669 11,515 -------- -------- Total current assets 81,150 80,621 -------- -------- Deferred charges and other assets 53,505 53,709 -------- -------- $569,760 $555,907 ======== ======== CAPITALIZATION AND LIABILITIES ------------------------------ Capitalization: Common stock, par value $50 per share, authorized and outstanding 1,132,487 shares $ 56,624 $ 56,624 Premiums on preferred stocks 170 170 Other paid-in capital 45,000 45,000 Retained earnings 86,871 81,659 -------- -------- Total common equity 188,665 183,453 Cumulative preferred stock 36,500 36,500 Long-term debt 160,961 155,972 -------- -------- Total capitalization 386,126 375,925 -------- -------- Current liabilities: Short-term debt to affiliates 26,025 19,725 Accounts payable (including $38,158,000 and $43,468,000 to affiliates) 43,614 51,005 Accrued liabilities: Taxes 5,096 1,712 Interest 2,984 4,921 Other accrued expenses 14,378 11,798 Customer deposits 5,518 5,622 Dividends payable 1,102 1,102 -------- -------- Total current liabilities 98,717 95,885 -------- -------- Deferred federal income taxes 64,478 63,494 Unamortized investment tax credits 8,899 9,026 Other reserves and deferred credits 11,540 11,577 -------- -------- $569,760 $555,907 ======== ======== The accompanying notes are an integral part of these financial statements. THE NARRAGANSETT ELECTRIC COMPANY Statements of Cash Flows Quarters Ended March 31 (Unaudited) 1994 1993 ---- ---- (In Thousands) Operating activities: Net income $ 6,314 $ 3,800 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 4,675 4,423 Deferred federal income taxes and investment tax credit - net232 (541) Allowance for funds used during construction (573) (152) Early retirement program (814) Decrease (increase) in accounts receivable 418 2,705 Decrease (increase) in fuel, materials and supplies(1,428) 119 Increase (decrease) in accounts payable (7,391) (7,432) Increase (decrease) in other current liabilities 3,923 3,968 Other, net 1,633 (635) -------- -------- Net cash provided by operating activities $ 7,803 $ 5,441 -------- -------- Investing activities: Plant expenditures, excluding allowance for funds used during construction $(17,636) $(11,763) -------- -------- Net cash used in investing activities $(17,636) $(11,763) -------- -------- Financing activities: Dividends paid on common stock $ (566) $ (1,699) Dividends paid on preferred stock (536) (388) Long-term debt - issues 5,000 7,500 Long-term debt - retirements (7,500) Premium on reacquisition of long-term debt (78) Changes in short-term debt 6,300 8,150 -------- -------- Net cash provided by financing activities $ 10,198 $ 5,985 -------- -------- Net increase in cash and cash equivalents $ 365 $ (337) Cash and cash equivalents at beginning of period 838 830 -------- -------- Cash and cash equivalents at end of period $ 1,203 $ 493 ======== ======== Supplementary information: Interest paid less amounts capitalized $ 5,284 $ 4,861 -------- -------- Federal income taxes paid $ (949) $ 928 -------- -------- The accompanying notes are an integral part of these financial statements. Note A - ------ A 1986 Rhode Island Supreme Court decision held that the Rhode Island Public Utilities Commission's (RIPUC) rate-making powers include the authority to order refunds of amounts earned in excess of an allowed return. As a result, the RIPUC monitors the Company's earnings on a continuous basis. Note B - ------ The Federal Comprehensive Environmental Response, Compensation and Liability Act, more commonly known as the "Superfund" law, imposes strict, joint and several liability, regardless of fault, for remediation of property contaminated with hazardous substances. Parties liable include past and present site owners and operators, transporters that brought wastes to the site, and entities that generated or arranged for disposal or treatment of wastes ultimately disposed of at the site. The electric utility industry typically utilizes and/or generates in its operations a range of potentially hazardous products and by-products. These products or by-products may not have previously been considered hazardous, and may not currently be considered hazardous, but may be identified as such by federal, state, or local authorities in the future. The New England Electric System (NEES) subsidiaries currently have in place an environmental audit program intended to enhance compliance with existing federal, state, and local requirements regarding the handling of potentially hazardous products and by-products. Federal and state environmental agencies have contacted the Company regarding liability for cleanup of sites alleged to contain hazardous waste or substances. The Company has been named as a potentially responsible party (PRP) by either the U.S. Environmental Protection Agency or the Massachusetts Department of Environmental Protection at two sites (one of which is located in Massachusetts) at which hazardous waste is alleged to have been disposed. In addition, the Company is also aware of other sites for which it may be held responsible for remediating and it is likely that, in the future, the Company will become involved in additional proceedings demanding contribution for the cost of remediating additional hazardous waste sites. Gas was manufactured from coal in Rhode Island in the past. The Company is aware of five sites on which gas was manufactured or manufactured gas was stored that were owned either by the Company Note B - Continued - ------ or by its predecessor companies. It is not known to what extent the Company would be held liable for hazardous wastes, if any, leftat these manufactured gas locations. There are significant uncertainties as to the potential costs to investigate and, when necessary, remediate any given hazardous waste site. Factors such as the evolving nature of remediation technology and regulatory requirements and the particular characteristics of each site, including, for example, the size of the site, the nature and amount of waste disposed at the site, and the surrounding geography and land use, make precise estimates difficult. A preliminary review by a consultant hired by the NEES companies of the potential cost of investigating and, if necessary, remediating Rhode Island manufactured gas sites resulted in costs per site ranging from less than $1 million to $8 million. An informal survey of other utilities conducted on behalf of NEES and its subsidiaries indicated costs in a similar range. There are also significant uncertainties as to the portion, if any, of the investigation and remediation costs of any particular hazardous waste site that may ultimately be borne by the Company. The Company believes that hazardous waste liabilities for all sites of which it is aware will not be material (10 percent of common equity) to its financial position. Where appropriate, the Company intends to seek recovery from its insurers and from other PRPs, but it is uncertain whether, and to what extent, such efforts would be successful. Note C - ------ In the opinion of the Company, these statements reflect all adjustments (which include normal recurring adjustments) necessary for a fair statement of the results of its operations for the periods presented and should be considered in conjunction with the notes to the financial statements in the Company's 1993 Annual Report. Item 2. Management's Discussion and Analysis of Financial --------------------------------------------------------- Condition and Results of Operations ----------------------------------- Earnings - -------- Net income for the first quarter of 1994 increased by $3 million as compared to the same period last year. Earnings in the first quarter of 1993 included a one-time charge of $3 million after tax ($5 million before tax) associated with an early retirement offer and special severance program. Excluding the effect of this 1993 charge, 1994 first quarter earnings remained approximately the same as in the corresponding prior period. Rate Activity - ------------- In April 1994, the Company filed a rate agreement with the Rhode Island Public Utilities Commission (RIPUC). The agreement between the Company and the Rhode Island Division of Public Utilities and Carriers would provide for a five percent base rate discount, excluding fuel costs in base rates, for the Company's large commercial and industrial customers who agree to give a five year notice to the Company before they purchase power from another supplier or generate any additional power themselves. The notice provision may be reduced from five to three years under certain conditions. The amount of the proposed discount, if all eligible customers sign agreements, is estimated at $4 million per year. The agreement would also provide for the Company to begin recognizing unbilled revenues for accounting purposes. Unbilled revenues at December 31, 1993, of approximately $14 million would be amortized to income over the twenty-one month period April 1994 through December 1995. The agreement, which is being opposed by certain parties, is subject to review and approval by the RIPUC. Effective March 1993, the RIPUC approved a new purchased power cost adjustment mechanism (PPCA) for the recovery of all of the Company's purchased power costs, excluding fuel and oil conservation adjustment charges which continue to be recovered through separate adjustment mechanisms. Under the new mechanism any over or under-collections of purchased power expense will ultimately be passed on to customers including the effects of peak- demand billing fluctuations. The Company accrued the effects of this new mechanism on its books in the current period. In addition, effective January 1993, the RIPUC approved a $1.5 million increase in rates for the Company, representing the first step of a three year phase-in of the Company's recovery of costs associated with postretirement benefits other than pensions. A second $1.5 million increase took effect January 1994. A 1986 Rhode Island Supreme Court decision held that the RIPUC's rate-making powers include the authority to order refunds of amounts earned in excess of an allowed return. As a result, the RIPUC monitors the Company's earnings on a continuous basis. Demand-Side Management - ---------------------- The Company files its conservation and load management program, also referred to in the industry as demand-side management (DSM) program, regularly with the RIPUC and has received approval to recover in rates estimated DSM expenditures on a current basis. The rates provide for reconciling estimated expenditures to actual DSM expenditures, with interest. Expenditures subject to the reconciliation mechanism were $1.3 million in the first three months of 1994 and $12 million for the full year 1993. Since 1990, the Company has been allowed to earn incentives based on the results of its DSM program. The Company must be able to demonstrate to the RIPUC the electricity savings produced by its DSM program before incentives are recorded. The Company recorded $0.5 million of before-tax incentives in 1993. The Company has received approval from the RIPUC that will give it the opportunity to continue to earn incentives based on 1994 DSM program results. Operating Revenue - ----------------- Operating revenue for the three months ended March 31, 1994 increased by $1 million from the corresponding period in 1993. Kilowatthour (KWH) sales increased by 1.1 percent in the first three months of 1994 as compared to the corresponding prior period. This increase in KWH sales reflects the colder weather conditions in the first quarter of 1994 and an improving economy partially offset by the reduction of one billing day due to meter reading schedules. KWH sales in 1994 are expected to increase less than one percent as compared to 1993. The following table summarizes the changes in operating revenue: Increase (Decrease) in Operating Revenue First Quarter ------------- 1994 vs 1993 ------------- (In Millions) Fuel recovery $ 1 Demand-side management program recovery (1) Sales increase and other 1 --- $ 1 === The Company's rates contain a fuel clause and a PPCA provision. The PPCA is designed to allow the Company to pass on to its customers changes in purchased energy costs (excluding fuel) resulting from rate increases or decreases by New England Power Company (NEP), the Company's affiliated wholesale power supplier. In March 1993, the PPCA mechanism was revised. Under the new mechanism, any over or under collection of purchased power expense including the effects of peak-demand billing fluctuations will ultimately be passed on to customers (see Rate Activity section). Operating Expenses - ------------------ The following table summarizes the changes in total operating expenses discussed below: Increase (Decrease) in Operating Expenses First Quarter ------------- 1994 vs 1993 ------------- (In Millions) Purchased electric energy: Fuel costs $ 1 Purchases and demand charges from NEP 1 Other operation and maintenance: Demand-side management program expenses (1) Other (3) Taxes, primarily income taxes 1 --- $(1) === The decrease in other operation and maintenance expense in the first quarter of 1994 is primarily due to the recording in the first quarter of 1993 of a one-time charge of $5 million associated with an early retirement offer and special severance program implemented in 1993. Hazardous Waste - --------------- The Federal Comprehensive Environmental Response, Compensation and Liability Act, more commonly known as the "Superfund" law, imposes strict, joint and several liability, regardless of fault, for remediation of property contaminated with hazardous substances. Parties liable include past and present site owners and operators, transporters that brought wastes to the site, and entities that generated or arranged for disposal or treatment of wastes ultimately disposed of at the site. The electric utility industry typically utilizes and/or generates in its operations a range of potentially hazardous products and by-products. These products or by-products may not have previously been considered hazardous, and may not currently be considered hazardous, but may be identified as such by federal, state, or local authorities in the future. The New England Electric System (NEES) subsidiaries currently have in place an environmental audit program intended to enhance compliance with existing federal, state, and local requirements regarding the handling of potentially hazardous products and by-products. Federal and state environmental agencies have contacted the Company regarding liability for cleanup of sites alleged to contain hazardous waste or substances. The Company has been named as a potentially responsible party (PRP) by either the U.S. Environmental Protection Agency (EPA) or the Massachusetts Department of Environmental Protection at two sites (one of which is located in Massachusetts) at which hazardous waste is alleged to have been disposed. In addition, the Company is also aware of other sites for which it may be held responsible for remediating and it is likely that, in the future, the Company will become involved in additional proceedings demanding contribution for the cost of remediating additional hazardous waste sites. Gas was manufactured from coal in Rhode Island in the past. The Company is aware of five sites on which gas was manufactured or manufactured gas was stored that were owned either by the Company or by its predecessor companies. It is not known to what extent the Company would be held liable for hazardous wastes, if any, left at these manufactured gas locations. There are significant uncertainties as to the potential costs to investigate and, when necessary, remediate any given hazardous waste site. Factors such as the evolving nature of remediation technology and regulatory requirements and the particular characteristics of each site, including, for example, the size of the site, the nature and amount of waste disposed at the site, and the surrounding geography and land use, make precise estimates difficult. A preliminary review by a consultant hired by the NEES companies of the potential cost of investigating and, if necessary, remediating Rhode Island manufactured gas sites resulted in costs per site ranging from less than $1 million to $8 million. An informal survey of other utilities conducted on behalf of NEES and its subsidiaries indicated costs in a similar range. There are also significant uncertainties as to the portion, if any, of the investigation and remediation costs of any particular hazardous waste site that may ultimately be borne by the Company. The Company believes that hazardous waste liabilities for all sites of which it is aware will not be material (10 percent of common equity) to its financial position. Where appropriate, the Company intends to seek recovery from its insurers and from other PRPs, but it is uncertain whether, and to what extent, such efforts would be successful. Electric and Magnetic Fields (EMF) - --------------------------------- In recent years, concerns have been raised about whether EMF, which occur near transmission and distribution lines as well as near household wiring and appliances, cause or contribute to adverse health effects. Numerous studies on the effects of these fields, some of them sponsored by electric utilities (including NEES companies), have been conducted and are continuing. Some of the studies have suggested associations between certain EMF and various types of cancer, while other studies have not substantiated such associations. In February 1993, the EPA called for significant additional research on EMF. It is impossible to predict the ultimate impact on the Company and the electric utility industry if further investigations were to demonstrate that the present electricity delivery system is contributing to increased risk of cancer or other health problems. Several state courts have recognized a cause of action for damage to property values in transmission line condemnation cases based on the fear that power lines cause cancer. It is difficult to predict what impact there would be on the Company if this cause of action is recognized in Rhode Island and in contexts other than condemnation cases. A lawsuit concerning the proposed expansion of a transmission line was filed on April 28, 1994 against the Company, NEES, and an affiliate, New England Power Service Company, in the Superior Court of Rhode Island. The plaintiffs are residents of property which borders existing transmission lines in East Greenwich, Rhode Island. The Company has a proposal before the Rhode Island Energy Facilities Siting Board (EFSB) to upgrade one of the lines and relocate the lines on the existing right of way. The plaintiffs allege that fear of health risks from exposure to high voltage power lines has devalued their property and ask for unspecified damages. The plaintiffs have also asked for an injunction to halt the proposed changes to the transmission lines and an order to remove the existing power lines. After preliminary review of the complaint, the Company does not expect that the plaintiffs will prevail. The EFSB is currently conducting hearings on the Company's proposal to upgrade and relocate the transmission lines. Bills have been introduced in the Rhode Island legislature to require that transmission lines be placed underground. In July 1993, two bills passed by the legislature restricting the construction of overhead transmission lines were vetoed by the governor. Competitive Conditions - ---------------------- The electric utility business is being subjected to increasing competitive pressures, stemming from a combination of increasing electric rates, improved technologies, and new regulations and legislation intended to foster competition. Currently, the most prominent form of competition in the electric utility industry is in the bulk power market in which non-utility generating sources have noticeably increased their market share. This change indirectly affects the Company as it purchases all of its energy requirements from NEP. Electric utilities are also facing increased competition in the retail market primarily from alternative fuel suppliers (principally natural gas companies) for heating and cooling, customer-owned generation to displace purchases from electric utilities, and direct competition among electric utilities to attract major new manufacturing facilities to their service territories. In the future, the potential exists for electric utilities and non-utility generators to sell electricity to retail customers of other electric utilities. For example, the California Public Utilities Commission recently announced a proposal that would give certain large retail customers in that state, by the year 1996, and all other retail customers by the year 2002, the option of selecting their electricity provider. Power purchased from another provider would still be delivered over the local utility's transmission network which, under the proposal, would be subject to broader access. Other states, including Rhode Island have considered or are in the process of considering options to foster increased competition. The NEES companies are responding to current and anticipated competitive pressures in a variety of ways including cost control and a corporate reorganization into separate retail and wholesale business units. The retail business unit, which includes the Company, is responding to competition through the development of value-added services for customers and the offering of economic development rates to encourage businesses to locate in the Company's service territory. In its recent rate agreement filed with the RIPUC, the Company is seeking to begin offering a discount from base rates in return for a contract requiring the customer to provide five years written notice before purchasing electricity from others or generating any additional electricity for the customer's own use. The discount will be available to customers with average monthly peak demands over 200 kilowatts. Approval of this rate agreement is pending before the RIPUC. Since a large part of the Company's costs represent the cost of power purchased from NEP, its competitive position is affected by NEP's ability to control costs. NEP is controlling costs and positioning itself for increased competition through such means as terminating certain purchased power contracts, past and future shutdowns of uneconomic generating stations, and rapid amortization of certain plant assets. Electric utility rates are generally based on a utility's costs. Therefore, electric utilities are subject to certain accounting standards that are not applicable to other business enterprises in general. These accounting rules allow regulated entities, in appropriate circumstances, to establish regulatory assets and to defer the income statement impact of certain costs that are expected to be recovered in future rates. The effects of competition could ultimately cause the operations of the Company, or a portion thereof, to cease meeting the criteria for application of these accounting rules. While the Company does not expect to cease meeting these criteria in the near future, if this were to occur, accounting standards of enterprises in general would apply and immediate recognition of any previously deferred costs would be necessary in the year in which these criteria were no longer applicable. Utility Plant Expenditures and Financing - ---------------------------------------- Cash expenditures for utility plant totaled $18 million in the first three months of 1994, including $8 million related to the Manchester Street Station Repowering Project. The funds necessary for utility plant expenditures were primarily provided by net cash from operating activities, after the payment of dividends and the proceeds of short-term and long-term debt issues. The Company issued $5 million of bonds during the first three months of 1994, bearing an interest rate of 7.05 percent. In May 1994, the Company issued an additional $8 million of new long-term debt bearing interest rates ranging from 6.91 to 8.08 percent. The Company plans to issue an additional $27 million of long-term debt by the end of 1994. At March 31, 1994, the Company had $26 million of short-term debt outstanding to affiliates. The Company currently has lines of credit with banks totaling $41 million. There were no borrowings under these lines of credit at March 31, 1994. For the twelve-month period ending March 31, 1994, the ratio of earnings to fixed charges was 2.47. Repowering of Manchester Street Station - --------------------------------------- The Company's major construction project is the repowering of Manchester Street Station, a 140 megawatt electric generating station in Providence, Rhode Island which is jointly owned by the Company (10 percent) and NEP (90 percent). Repowering will more than triple the power generation capacity of Manchester Street Station and substantially increase the plant's thermal efficiency. The total cost for the generating station, scheduled for completion in late 1995, is estimated to be approximately $525 million, including allowance for funds used during construction (AFDC). In addition, related transmission work, which is principally the responsibility of the Company, is estimated to cost approximately $75 million and is scheduled for completion in late 1994. At March 31, 1994, $217 million, including AFDC, had been incurred on the project ($41 million by the Company). Substantial commitments have been made relative to future planned expenditures for this project. PART II. OTHER INFORMATION Item 1. Legal Proceedings - -------------------------- Information concerning the rate agreement filed by the Company with the Rhode Island Public Utilities Commission, discussed in Part I of this report in Management's Discussion and Analysis of Financial Condition and Results of Operations, is incorporated herein by reference and made a part hereof. Information concerning the Company's rate filings for demand-side management programs, discussed in Part I of this report in Management's Discussion and Analysis of Financial Condition and Results of Operations, is incorporated herein by reference and made a part hereof. Information concerning a lawsuit filed against the Company in the Superior Court of Rhode Island regarding the proposed expansion of a transmission line, discussed in Part I of this report in Management's Discussion and Analysis of Financial Condition and Results of Operations, is incorporated herein by reference and made a part hereof. Item 4. Submission of Matters to a Vote of Security-Holders - ------------------------------------------------------------ On March 15, 1994, the Annual Meeting of Stockholders was held. The following actions were taken by the unanimous vote of the 1,132,487 shares having general voting rights represented at the meeting: The number of directors for the ensuing year was fixed at nine. The following were elected as directors: Joan T. Bok Stephen A. Cardi Frances H. Gammell Joseph J. Kirby Robert L. McCabe John W. Rowe Richard P. Sergel William E. Trueheart John A. Wilson Coopers & Lybrand was appointed as auditor for 1994. Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- The Company is filing the following revised exhibit for incorporation by reference into its registration statement on Form S-3, Commission File No. 33-50015. 12 Statement re computation of ratios SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-Q for the quarter ended March 31, 1994 to be signed on its behalf by the undersigned thereunto duly authorized. THE NARRAGANSETT ELECTRIC COMPANY s/ Howard W. McDowell Howard W. McDowell Controller, Authorized Officer, and Principal Accounting Officer Date: May 11, 1994